Krause Fund Research April 12th, 2021 Spring 2021 Current Price $43.34 Target Price $50-55

Gaming and Leisure Properties, Inc. (NYSE: GLPI) Company Overview Real Estate Gaming and Leisure Properties, Inc. (NYSE:GLPI) is the first real estate investment trust to focus on acquiring real property assets Recommendation: BUY leased to gaming operators. The portfolio currently consists of 48 gaming properties diversified across 16 states including premier Analysts tenants like Penn National Gaming, Caesars Entertainment, Boyd Gaming Corporation, and more. Through triple-net lease Adam Schliesmann arrangements, GLPI expects to grow their portfolio by acquiring [email protected] gaming facilities of which they lease back to gaming operators. In Cameron Pietzsch [email protected] an industry poised to grow as state policy is changed, GLPI is Ethan Good positioned to emerge as a leader. [email protected] Evan Pyle [email protected] Stock Performance Highlights Kyle Bucsa 52 Week High $45.75 [email protected] 52 Week Low $24.39 Beta Value 1.58 Investment Thesis Key Statistics Market Cap (B) $10.55 We recommend a BUY rating for Gaming and Leisure Properties, Shares Outstanding 232,452 Inc. due to state wide policy reform and their sound business Dividend (Yield) 2.06 (6.01%) structure. EPS (2021E) 2.16

GLPI Exhibits Potential Strength: Company Performance Highlights ● State governments are deregulating gambling restrictions ROE 10.02% due to the tax collection opportunities casinos pose. This FFO (M) $684.39 increases GLPI’s ability to accumulate new properties in P/FFO $12.56 diversified markets from the increase of non-tribal gambling. Dividend Payout Ratio 108.70% ● GLPI had near perfect rent collection even through the pandemic. We expect this to continue as COVID-19 vaccine 12 Month Performance (factset.net) rollout continues and casino traffic returns to normal levels. ● GLPI has 100% tenant capacity and will sustain this through 2028, reducing liquidity risk for the foreseeable future. ● Due to the nature of GLPI’s “triple net lease” agreements with their tenants, operating expenses are minimal, resulting in consistently high operating margins and ROE for shareholders.

Valuation Methods DCF/EP $54.58 DDM $42.95 Relative P/FFO (EPS21) $48.32

Important disclosures appear on the last page of this report. Executive Summary

Gaming and Leisure Properties is strongly positioned to become a leader within the Gaming REITs industry. With the continued deregulation of gambling outside of Las Vegas, GLPI’s geographically diverse portfolio affords them with a plethora of profitable investment opportunities. GLPI has shown the ability to generate consistent quarterly income and maintain high operating profit margins even Source: Seeking Alpha12 during the COVID-19 pandemic. This can be attributed to the quality of their tenants and the nature of their lease The YTD weighted average return in this industry is agreements. With GDP and tourism set to rebound in 2021 -1.61% compared to the 16.44% market return, however, and beyond, we expect GLPI to continue generating we are bullish about their future. We attribute their positive alpha for its shareholders. underperformance to the COVID-19 pandemic, forcing many casinos, restaurants, and hotels to limit capacity or Industry Analysis shut down completely. With the vaccine rollout in progress and the continued legalization of sports gambling across the country, we see the Gaming REITs as a potential Industry Description industry leader within the Real Estate sector.

The Gaming REITs industry consists of 3 major players. Vici Properties and MGM Growth Properties main revenue Vici Properties (VICI), Gaming and Leisure Properties streams come from property located on the Las Vegas strip, (GLPI), MGM Growth Properties (MGP). Each company's while Gaming and Leisure Properties revenue comes from primary source of revenue is generated from long-term properties located outside of Vegas. VICI in particular has leases signed by leisure and entertainment companies. made a big attempt to expand their operations outside of This includes companies like Caesars Palace, Penn National Las Vegas, with casinos spanning from New Orleans, Gaming, and other casinos and hotels located on the Las throughout the Midwest, and some parts of the East Vegas strip and around the country. They also lease out Coast. However, Gaming and Leisure Properties Inc. has the property to restaurants, golf courses, or other advantage over Vici and MGM in terms of geographically entertainment venues around the US. With continued diverse assets. . Due to zoning laws and limited state casino challenges from the ongoing COVID-19 pandemic, the licenses, this creates very high barriers to entry for Vici gaming REITs industry remained profitable driven by and MGM to expand their operations. consistent cash flows from tenants. This led the industry to 12 outperform the broader REIT sector in 2020 . Looking A key factor in the Gaming REIT industry is the way leases forward, the three companies have a combined 4.5 billion are structured. Leases require tenants to pay all property dollars of cash or credit revolver access. This allows them taxes, insurance, and operating expenses of the casinos. to acquire more properties, continue to invest in their Gaming REITs’ primary expenses are general oversight and 13 current assets, or increase their dividend to shareholders . administrative expenses - which leads to very high The table below shows the percentage breakdown of the operating margins. By writing leases in this manner, the industry in terms of market capitalization. primary sources of risk to future cash flows would be the tenant’s ability to continue to pay rent and the likelihood of tenants to renew their leases (typically last 20-40 years15).

Gaming REITs have historically not had difficulty finding tenants even through the COVID-19 pandemic, boasting a 100% occupancy rate and nearly perfect rent collection

Important disclosures appear on the last page of this report. 2 metrics (only 1 tenant out of 94 in the industry that fell M&A Activity behind in Q2 2020 but became current in Q3) as well12. Because of the general certainty of cash flows and high The three major players in this industry have all had major dividend yields of Gaming REITs, many investors view merger & acquisition deals in the past year. MGM Growth these securities as bond-like, which therefore makes their Properties and Blackstone Real Estate formed a 50.1/49.9 value susceptible to interest rate fluctuations12. joint venture to purchase the property of the MGM Grand and the Mandalay Bay for nearly $5 billion16. Gaming and Recent Developments and Industry Trends Leisure Properties has made multiple deals with Penn National Gaming to acquire casinos across the country Government and Regulatory Change while Penn operates the facilities17. VICI Properties has made similar purchases with Caesars Entertainment, Inc. Until the 1980s, commercial casinos were only legal in Las The two companies entered into a Master Transaction Vegas on “The Strip”, with the rest being tribal casinos, Agreement in which VICI would own the real estate assets which were mostly exempt from state regulations12. Over of Harrah’s New Orleans, Laughlin, and Atlantic City, while the next 30-40 years, a large wave of legislation has led to Caesars would own and operate the casinos18. 25 states legalizing commercial casinos largely due to realization of a “tax goldmine”. The tax revenue from these Economic Changes commercial casinos accounts for about a quarter in Pennsylvania and large percentages in New York, Nevada, Master leases are becoming the favored agreement in the and New Jersey12. Now, casino REITs own property 19 of industry, as there are many advantages for the REITs. First, the 25 states that allow it. if the tenant does not renew their lease, the gaming license for the property stays with the lessor instead of the lessee. An important trend that could lead to more opportunities Second, rent resets allow the property owner to base rent for the gaming REITs industry is the legalization of sports of the tenant’s operating performance, which is typically a gambling. Today, 18 states and Washington D.C. have 2% increase in rent. Fortunately, if the tenant’s operations legalized sports betting, 4 states have passed a bill that is are not successful, the rent is not lowered but rather not yet in effect, and 9 other states have active bills on the remains constant until operations become successful matter. Additionally, 12 states had bills that did not pass again. legislation and 7 states have not taken any action16. The legalization of sports betting could give the gaming REITs Market Driven Changes to Industry Sales or Inputs industry room for expansion across the country by building or acquiring casinos and hotels in states where it One of Gaming REITs biggest limitations is the has recently been legalized. construction of new property to acquire. In late 2020 to early 2021, three major casinos and hotels will be completed in Las Vegas with a couple others beginning construction this year. While some gaming cities are limited in space, like Atlantic City, Vegas is always adding new additions. The ever-expanding city holds a promising future for the REITs of this industry, especially considering the growing trend of casinos selling their property to the REITs just to rent back. Outside of Vegas, six new casinos have begun construction in Illinois, three more across Illinois, and a couple others across the country.

Source: Seeking Alpha12 Another limitation in the industry is the amount of casino licenses issued in each state. Six states have the ability to issue an unlimited number of licenses, however, there are significant regulatory factors and competitive barriers-to-entry. Eighteen states have a limited number of

Important disclosures appear on the last page of this report. 3 licenses they can issue which are auctioned off by the state outperformed MGP by almost 20% and in 2017, GLPI based on qualifications of the operator, proximity to outperformed MGP by about 8%. With our bullish outlook existing casinos, and zoning regulations. for the industry as a whole, we see VICI and GLPI’s growth outperforming MGP in the long-term future. Competition

Competitive Landscape

Due to the high capital demands to access and the new nature of the Gaming REIT industry, there are only three main publicly traded companies that compete with each Source: Seeking Alpha12 other, VICI, MGP, and GLPI. Gaming and Leisure Properties is the oldest of the three, being introduced in 2013, Operating Strategies followed by MGM Growth Properties in 2016, and VICI in 2018. GLPI is the industry leader of the three based on the All three of these gaming REITs have different niches number of properties and years in business. Across the within their casino portfolio, and varying strategies for gaming REIT industry, the main competition comes from growth. overall financial performance, the operating strategies for each company, and the debt comparison. GLPI currently owns the largest and most diversified portfolio of 48 properties across 16 states (3 in the state of Financial Performance Iowa) that are mostly regional casinos. A total of 80% of their revenue comes from gaming and they have the most All three of the publicly traded competitors in this industry casino square feet at over 3 million. Due to the high have different growth rates in terms of fund from reliance of gaming revenue and investment in casino space, operations. This metric best shows how a REIT is GLPI has the smallest amount of hotel rooms at 12,520. performing due to the fact that it adds back depreciation This is largely due to their regional casino focus that charges to fairly exemplify the company’s earnings. Today, creates a lower tourism demand than destination casinos VICI has outperformed GLPI and MGP with the highest such as the bigger hotels and resorts on the Las Vegas Strip overall AFFO at $835.8 million, growing 29% from the or in large cities. prior year compared to growth of 2% and 3% from GLPI and MGP. GLPI’s AFFO was $757.4 million and MGP had an MGM Growth Properties currently owns 17 properties that AFFO of $703.7 million19. It is important to note that VICI’s are mostly classified as “destination properties”, which are abnormally large growth rate can be attributed to the fact mostly located on the strip in Las Vegas, but they also own that it is a newer company that is focused on acquisitions property in Atlantic City, Reno, and Detroit. Unlike GLPI, to grow its business. In their early stages, GLPI and MGP they are focused on the Las Vegas Strip and not as much on also reported similarly large FFO and AFFO growth rates as regional properties. they quickly acquired properties, hotel rooms, restaurants, and more. Only 30% of their revenue comes from gaming as the The stock performance of the overall gaming REITs is company focuses on a more diverse mix of lodging, highly correlated and tends to have similar growth year hospitality, and event revenues to create an experience that over year. MGP was the overall leader this year with a satisfies tourists. MGP owns a total of 32,000 hotel rooms, decline in growth of 12.8%, while VICI and GLPI trailed the largest of the three competitors, and 1.5 million square with declines of 17.1% and 19.4%. While this bodes well feet of casino space, the smallest of the three competitors20. for MGP in the short term, recent trends have shown that in good years for the industry, VICI and GLPI have VICI currently owns 29 properties, with 69% of them being substantially higher stock growth compared to MGP. In regional and 31% being destination properties in the Las 2019, a great year for the industry, GLPI and VICI Vegas Strip21. Unlike GLPI and MGP, they focus on both the

Important disclosures appear on the last page of this report. 4 regional and destination casinos and diversify their revenue mix to have half their income from gaming and the other half from their 18,000 hotel rooms, 200 restaurants and bars and other hospitality21. In the future, VICI’s growth will continue to rely on this operating strategy and their success with their acquisition strategy as well as broader economic conditions, such as the progression of Source: Seeking Alpha12 fighting COVID-1921. Company Analysis

Company Description

Gaming and Leisure Properties is a self-administered and self-managed Pennsylvania real estate investment trust. GLPI’s primary business consists of acquiring, financing, and owning real property to be leased to gaming operators in “triple net” lease arrangements. GLPI’s portfolio Source: Seeking Alpha12 currently consists of 44 gaming and related facilities, which are located across 16 states. Its tenants include Penn Debt Comparison National Gaming, Inc., Casino Queen, Eldorado Resorts, Inc., and Boyd Gaming Corporation. GLPI also owns and Overall, gaming REITs generally operate with relatively operates Hollywood Casino Baton Rouge and Hollywood well-capitalized balance sheets, especially when compared Casino Perryville. GLPI expects to grow its portfolio by to other high yielding industries12. These companies have pursuing opportunities to acquire additional gaming to follow certain standards to qualify as a REIT, such as facilities to lease to gaming operators. GLPI also anticipates dividend distribution of at least 90% of its taxable income diversifying its portfolio over time by acquiring properties to investors. Because of this, REITs can rely on debt to fund outside the gaming industry22. expenses and expand operations17. The extent that a REIT uses debt efficiently is key for investors when analyzing Revenue Analysis risk and reward24. Given that REITs tend to have more debt than other industries, it is worth noting the debt of each In 2020, Gaming and Leisure Properties generated total competitor. Based on the debt to EBITDA ratio, GLPI has a revenues of $1.15 billion with over $1 billion coming from better ability to pay off debt than MGP, but VICI has the real estate and the rest coming from gaming, food, overall advantage in that area. VICI and GLPI both take on a beverage and other income. Total revenues marginally similar amount of debt with ratios of 47% and 52%, while decreased by about $308,000 largely to COVID-19’s effect MGP takes on a bit less with a 40% ratio. on in-person traffic which decreased gaming, food, beverage, and other income by $25 million. The bond ratings for these companies fall just below investment grade with MGP having a rating of BB-, VICI Aside from this setback, GLPI has seen revenue increases having a rating of BB, and GLPI having the highest rating of every year since its inception and has an average growth BB+. It is important to note that with these high leverage rate of about 8% since 2017. We anticipate that trend to companies, bond ratings will be lower due to the higher continue in the future as GLPI plans to make more credit risk. acquisitions, increasing their income from real estate17.

To break this revenue down further, GLPI divides total income from real estate by each master lease they own. Currently, the Penn Master Lease makes up for about 44%

Important disclosures appear on the last page of this report. 5 of the revenue from real estate and is made up of 33 of the nature of the triple-net lease agreements provide a stable 48 properties owned by GLPI. This is advantageous to GLPI source of long-term income. because the lease terms are agreed upon until 2033, meaning nearly half of GLPI’s income from real estate is Expense Analysis secured until then. The Pinnacle Master Lease makes up for about 30% of the income from real estate as has terms The most important expenses for GLPI include gaming, that are agreed upon until 203117. With these two master food, beverage, and other expenses, land rights and ground lease agreements alone, approximately 74% of GLPI’s lease expenses, general and administrative, interest income from real estate will be secured until 2031. The expense, and depreciation. rest of the income from real estate by lease is shown on the chart below. Depreciation

Depreciation for GLPI’s accounts for over 60% of total operating expenses, with a total of over $230 million. Overall, depreciation expense decreased by $9.5 million largely due to the closure of Resorts Casino Tunica in 2019 which accelerated $10.3 million of depreciation expense to bring the net book value of this property to zero17.

Gaming, food, beverage, and other expense

These expenses accounted for about 16% of total operating expenses in 2020. There was an overall decrease 17 Source: GLPI 10-K of about $18 from the prior year largely attributed to the COVID-19 pandemic, which forced closures of the TRS Another important metric to examine is the company’s Properties in March and kept most closed until at least funds from operations. GLPI generally divides FFO by their June17. two business segments, GLP Capital and the TRS Segment. The TRS Segment consists of Hollywood Casino Perryville, Land rights and ground lease expense Hollywood Casino Baton Rouge and Tropicana Las Vegas, while GLP Capital consists of the leased real property and These expenses include amortization of land rights and represents the majority of GLPI’s business. GLP Capital’s rent expenses related to GLPI’s long-term ground leases. FFO was $686.73 million compared to $612.91 in 2019, Land rights and ground lease expenses decreased by $13.4 while the TRS Segment had an FFO of -$2.34 million million to $29.04 million compared to the prior year, 2019. compared to about $8.78 million in 2019. The GLP Capital This decrease can be attributed to the acceleration of segment is the main driver of GLPI’s recent growth as it amortization expense of $6.3 million related to the closure has increased FFO by an average of 15% year over year of the Casino Tunica property in 2019. The decrease is also since 2015 compared to an average decline of 6.3% for the attributable to lower ground lease rents paid by tenants in 19 TRS Segment . 2020 that are based on the facilities' revenues which declined due to the impact of COVID-1917. The largest driver that contributed to the decrease in FFO for the TRS Segment is the fact that the few properties in General and administrative expense the segment were forced to shut down due to COVID-19 until June of 2020. Although the TRS Segment wasn't The G&A expenses for GLPI totaled $68.57 million in 2020, profitable in 2020, these numbers as a whole still an increase of about $3.2 million from the prior year, 2019. impressed us considering the closures and poor economy The increase is traceable to the negative impact from that negatively affected the REIT sector and most severance and stock acceleration charges of $6.3 million, companies around the world. With this kind of stability in related to the departure of the former CFO. The $6.3 bad economic times, it is encouraging to know that the million were partially offset by lower payroll costs

Important disclosures appear on the last page of this report. 6 primarily attributable to the temporary closures of the TRS In October 2020, GLPI and Penn closed on a transaction Properties due to COVID-19 and lower bonus expense17. whereby GLPI acquired the land under Penn's gaming facility under construction in Morgantown, Pennsylvania in Interest Expense exchange for $30.0 million in rent credits which were fully utilized by Penn in the fourth quarter of 2020. The Total interest expense in 2020 totaled $282.14 million and Company is leasing the land back to an affiliate of Penn accounted for almost all other expenses. This is compared pursuant to the Morgantown Lease for an initial annual to $301.5 million in the year ended 2019. Interest expense rent of $3 million, subject to escalation provisions decreased primarily due to refinancing activities, such as following the opening of the property17. the issuance of $400 million of 3.35% senior unsecured notes due in 2024 and $700 million of 4% senior In October 2020, GLPI entered into an Exchange unsecured notes due in 2030 during the third quarter of Agreement with subsidiaries of Caesars that own Waterloo 2019. These proceeds were utilized to repay higher cost and Bettendorf. Pursuant to the terms of the agreement, unsecured borrowings with near term maturities17. Caesars transferred to the Company the real estate assets of the Waterloo and Bettendorf properties in exchange for Recent M&A Activity the transfer by the Company to Caesars of the real property assets of the Tropicana Evansville, plus a cash Pending Acquisitions payment of $5.7 million. This resulted in the Waterloo and Bettendorf facilities being added to the Amended and In October of 2020, GLPI entered into a series of definitive Restated Caesars Master Lease and the rent increased by agreements to which a subsidiary of Bally's Corporation $0.5 million annually17. will acquire 100% of the equity interests in the Caesars subsidiary that currently operates Tropicana Evansville Capital Expenditures Analysis and GLPI will reacquire the real property assets of Tropicana Evansville from Caesars for a cash purchase During the years ended December 31, 2020 and 2019, price of approximately $340 million. GLPI also entered into Gaming and Leisure Properties spent approximately $3.1 a real estate purchase agreement with Bally's to which the million and $3 million, for capital maintenance company will purchase the real estate assets of the Dover expenditures. The majority of the capital maintenance Downs Hotel & Casino, which is currently owned and expenditures were for slot machines and slot machine operated by Bally's, for a cash purchase price of equipment at the TRS Properties. GLPI’s tenants are approximately $144.0 million17. responsible for capital maintenance expenditures at the Acquisitions leased properties (GLP Capital)17.

In October 2018, GLP completed its acquisition of the real Margin and Profit Analysis estate assets of five casino properties from Tropicana Entertainment, Inc. for $964 million. Additionally, GLP GLPI reported Q4 earnings of $0.74, beating estimates by provided a $246 million mortgage loan to ERI to finance its $0.18. They reported Q4 revenues of $300.16 million, acquisition of the real estate assets of Lumiere Place in St. missing estimates by $74.49 thousand. Despite beating Louis, Missouri from Tropicana17. earnings expectations, the price of the stock dropped almost 4% after the announcement was made. In October 2018, GLP completed its acquisition and lease modifications to accommodate Penn in its acquisition of During GLPI’s latest earnings call, SVP of Investment Pinnacle. As part of this transaction, GLP acquired the real Matthew Demchyk talked about the company's approach estate assets of Plainridge Park Casino in Plainville, given the current economic conditions. He stated that all of Massachusetts. GLP also provided a $57.7 million mortgage their properties have been able to comply with and execute loan to Boyd to finance its acquisition of the real estate safety protocols to fight the spread of the COVID-19 assets of Belterra Park Gaming and Entertainment Center pandemic. GLPI and their tenants strategically bolstered in Cincinnati, Ohio22. their balance sheets to survive any future uncertainties

Important disclosures appear on the last page of this report. 7 regarding the pandemic. Overall, the company provided Key Investment Negatives forward looking guidance. A setback in the economic recovery from COVID-19 could GLPI is in a strong position to retain positive earnings due have the potential to wreak havoc on the gaming industry to their biggest tenants (Penn National and Pinnacle) as a whole as casinos still face the risk of being shut down positioning themselves to survive the economic downturn. if we see a new COVID-19 variant or any other risk that Additionally, the reopening of the economy has led comes with a world-wide pandemic. management to expect cash flows from operations to increase in the subsequent quarters23. Given GLPI’s high dividend yield and the predictability of its contractual lease payment cash flows, its bond-like Corporate Governance nature makes its value particularly susceptible to interest rate fluctuations. Due to the possibility of increasing 5.51% of GLPI’s equity is controlled by insider interest rates in the next few years and speculation of shareholders - totaling about $553M. Of this insider possible inflation from stimulus payments and other control, roughly $509M of equity is held by CEO Peter economic factors, GLPI’s value could dramatically decrease. Carlino25. There has been little publicized activist interest in GLPI since Johnathan Litt’s firm Land and Buildings Investment Management (L&B) pushed for a GLPI and VICI Economic Outlook merger in late 2019/early 2020. Litt sold his stake in May 202026. Gross Domestic Product

Key Investment Positives The Gross Domestic Product (GDP) is the total value of all goods and services produced within the United States in a There has been a strong trend of state governments specific time period and represents the general health of relaxing gambling restrictions due to the tax collection the economy1. The real estate sector and GLPI may not be opportunities that casinos pose. We expect this trend to fully dependent on the GDP, however it is generally continue. understood that when the economy is sluggish, so is real estate, so it is an important factor to examine. This will increase availability of commercial casinos and likely allow GLPI to acquire and hold more properties in In the second quarter of 2020, we saw the GDP drop by new markets12. 32.9%, the biggest decline in history, but rebounded quickly and has been relatively stable for the past few GLPI has had near perfect rent collection even through the months. In the next 6-12 months, we can expect GDP to pandemic, and we expect this to continue as COVID recedes rise by at least 6% due to COVID-19 recovery and stimulus and casino traffic returns12. from congress, which is a good sign for real estate and the economy as a whole2. When considering the long-term GDP GLPI has 100% tenant capacity and will through at least growth, it is expected that we could see an annual growth 2028, barring tenant bankruptcy, and has grown their rate of 1-3% over the next five years3. A steady GDP growth portfolio substantially even during the pandemic. We rate will mean a more stable and healthy economy, which expect this to continue as the company has stated its desire in turn will help to benefit the real estate industry along to acquire properties and diversify its business with GLPI.

GLPI holds only one property in downtown Las Vegas and is much better diversified across the rest of the United States than its competition. Although GLPI may miss out on revenue from “The Strip” in Las Vegas, it is well positioned for the future as gambling legislation becomes more relaxed in an increasing number of states

Important disclosures appear on the last page of this report. 8 Source: Monthly New Residential Construction29 Source: Internal Monetary Fund4 Vacancy Rates New Construction The vacancy rate is a key determinant of the health of the As the supply of residential, commercial, and industrial real estate sector. It determines how many units are real estate increases, property value is also expected to available in a rental property compared to the total increase according to the Journal of Housing Economics5. number of units. This number allows property owners and In turn, landlords and property owners can charge a higher investors to analyze other economic variables, such as rent or higher price for the use or sale of the property, unemployment. A high vacancy rate can send a signal to which leads to an increased income for many REITs and investors that investing in real estate may be a poor Real Estate Management and Development firms. decision, while a low rate can indicate otherwise.

Investors feel more inclined to focus a larger percentage of In the upcoming months, we predict that vacancy rates for their portfolio towards real estate when they see commercial, industrial, and residential real estate will stay company’s profits increasing due to the new construction. relatively close to their current levels of 12%, 4%, and 2%, 7 The 2008 housing bubble was a clear indicator of respectively . Given the nature of the pandemic, many investor’s sentiment towards investing in real estate when businesses and individuals have found it difficult to rent there’s a shortage of supply. Industry stock prices out space, increasing the vacancy rate, however, stimulus plummeted with REITs losing nearly 40% in value on packages have allowed some to continue paying, which is average. Residential, commercial, and industrial real estate why these numbers won’t keep increasing. Prior to returns quickly turned positive once new construction COVID-19, industrial and commercial rates had been falling spiked across the country. In the next couple months to a since 2010 when they were 10.6% and 17.3% according to year, we predict that there will continue to be little to no the National Association of Realtors. Once businesses are growth in new real estate construction given the effect less focused on maintaining current production, vacancy COVID-19 has played in renter’s ability to pay property rates will start to slowly fall as companies look to expand owners. Real estate development firms are prioritizing by renting out additional units. Similarly, residential preserving the current value of their assets rather than vacancy rates will also drop as the unemployment rate constructing new ones6. After a couple years, the firms decreases post-pandemic, as more individuals will be able should see a ~20% five-year growth that the industry saw to pay rent and fill out vacant units. We predict that once in construction the past five years. This growth will be the rate starts to decrease in a couple years, investors will driven by a decreasing unemployment allowing businesses feel safer handing their money over to REITs and Real and individuals to pay rent and an increased investor pool Estate Development and Management firms. as pandemic-related stock market uncertainty fades.

Important disclosures appear on the last page of this report. 9 Interest Rates and Inflation

The FED has remained loyal to their commitment to keep interest rates low until 2023. Fed Chairman Jermone Powell says he expects inflation to rise, however, not enough to hinder the attempt to achieve full and inclusive employment10. This is a positive development for the real estate sector and GLPI. Economic growth results in an increase in value for their underlying assets as well as allows them to finance capital expenditures or acquisitions at a lower cost. GLPI’s high dividend yield also becomes Source: St. Louis Fed8 more attractive to investors in a low interest rate environment. GLPI can also be viewed as an inflationary Unemployment Rate hedge as it acts in a similar way to an activity managed corporate bond portfolio. The unemployment rate is another key economic metric that drives the real estate sector. According to the FRED, Consumer Confidence Index (CCI) the unemployment rate ballooned to 14.8% in April of 2020 and has remained above 6.0% since9. The real estate As of March 30th, 2021, the CCI increased to 109.7 sector was affected tremendously, causing many tenants to compared to 90.4 in February. This is the highest the CCI fall behind on rent and landlords missing out on income for has been since March of 2020, showing improved outlook consecutive months. As a result, many states are enforcing among consumers. Consumers are also increasingly bullish statewide bans of evictions to allow tenants to get back on on business conditions and the labor market. The CCI their feet. However, with the economy set to get back on outlined that 18.5% of consumers voted that current track, we expect the unemployment rate to improve. businesses are in ‘“good condition”, improving from 16.1% in February. In 6 months, 40.8% of consumers expect According to the United States Bureau of Labor Statistics, conditions to improve, up from 30.7% in February. In the unemployment rate is expected to remain steady as 6% terms of the labor market, consumer optimism increased for the next six months, then decrease to more stable levels 4.7% for finding jobs right now and increased 8.7% (around 4%) in the next 12-24 months. This is great news regarding the labor market in the coming months. for tenants, landlords, and investors in real estate as the uncertainty of the COVID-19 pandemic seems to be subsiding.

Source: The Conference Board11

Source: St. Louis Fed9

Important disclosures appear on the last page of this report. 10 With interest rates remaining low and a significant amount Valuation Analysis of cash on hand, GLPI is in a strong position to continue growing their GLP Capital division in the coming years. Overview Currently, 18 states and Washington D.C. have legalized sports betting, 4 states have passed a bill that is not yet in We forecasted a 10-year growth horizon for GLPI. Of their effect, and 9 other states have active bills on the matter. 2 business segments, we projected significant growth for Additionally, 12 states had bills that did not pass legislation 27 their GLP Capital division. GLP Capital represents the and 7 states have not taken any action . Considering GLPI majority of GLPI’s assets and was responsible for 91% of is the industry leader in Gaming REITs outside of Las total revenue in 2020. Assuming a low interest rate Vegas, we fully expect them to capitalize on these emerging environment for the foreseeable future, the COVID-19 markets. pandemic slowdown, and the relaxed gambling restrictions across the country, we expect plenty of opportunities for Continuing Value GLP Capital to expand their business operations. We assumed growth of 5% in 2021, followed by growth The continuing value assumption is a very important ranging from 10-15% in the subsequent 5 years. As for metric in our valuation models. To make this assumption, their other segment, TRS Properties, we projected zero we used the information from our economic analysis. We future growth as management is not inclined to add more felt that GDP growth would be a good indicator for the properties if the segment remains unprofitable. Using this steady-state annual growth of GLPI as GDP growth information, we constructed three valuation models represents economic growth as a whole. We used a including a DCF & EP, DDM, and Relative P/FFO. continuing value growth rate of about 3.03%, the geometric average annual GDP growth rate between 1960 Revenue Decomposition and 2019. With the overall rapid recovery from the pandemic and the long-term expectations of GDP growth, GLPI has two reportable business segments of which make we feel that this growth rate is realistic. up 100% of the company's revenue, GLP Capital and TRS Properties. We analyzed historical data of the divisions WACC dating back to the company’s IPO in 2013, along with current economic, sector, and industry research to We calculated GLPI’s WACC to be 6.49% by using a cost of determine GLPI’s growth prospects within a 10-year equity of 8.25% and an after-tax cost of debt of 3.48%. The investment horizon. GLP Capital is GLPI’s main source of use of the market value of common equity and the market revenue. This segment makes up all of GLPI’s real estate value of debt allowed us to weight the costs appropriately assets excluding Hollywood Casino Perryville, Hollywood to get to the WACC conclusion. These weights came out to Casino Baton Rouge, and Tropicana Las Vegas17. GLPI has be about 63.07% for common equity and 36.93% for debt. consistently grown its GLP Capital division by completing The WACC had a major impact on our DCF and EP models major purchases of real estate from Pinnacle as we discounted all of our free cash flow and economic Entertainment, Inc. for approximately $4.8 billion in April profit values by this number. of 2016, five casino properties from Tropicana Entertainment, Inc. for $964 million in October of 2018, Cost of Equity and recently closed deals with Penn National Gaming and Caesars Entertainment to acquire land rights in As mentioned above, we calculated a cost of equity of Pennsylvania and Iowa. Due to the nature of the lease 8.25%. We made this calculation by making assumptions agreements with their tenants, GLPI can pass a significant for the risk-free rate, beta, and equity risk premium. For portion of the operating expenses onto their tenants, the risk-free rate, we used the 10-year treasury yield on resulting in consistently high operating margins. Dating April 15, 2021. Beta was calculated by averaging the back to 2016, GLPI has posted an average net operating 1,2,3,4,5, and 10-year weekly betas from Bloomberg. For margin of 61.66%. the equity risk premium we used Prof. Damodaran’s April estimate of 4.22%.

Important disclosures appear on the last page of this report. 11 Cost of Debt Relative P/FFO

We needed to find the pre-tax cost of debt in order to find For the relative valuation, we used the two publicly traded the after-tax cost of debt. We went about this by taking competitors to GLPI, which were MGM Growth Properties Gaming and Leisure Property’s YTM on its 10-year (MGP) and VICI Properties (VICI). We felt that the price to corporate bond of 3.51%. We used this to come up with the FFO ratio was best to use given that FFO is a widely used after-tax cost of debt of 3.48%. metric in the real estate industry. FFO measures the cash generated by a REIT and their ability to pay dividends28. Valuation Models The relative valuation gave us stock prices of $48.32 for 2021 and $45.40 for 2022. Given that there were only two DCF & EP other companies to perform a relative valuation with, we felt that our DCF and EP valuation models were better We used a forecast period of 10 years for our DCF/EP indicators of the future stock price. valuations due to the potential for growth in the gaming industry as a whole. For our DCF model, we found the value of operating assets by discounting GLPI’s free cash Sensitivity Analysis flows by the WACC, then adjusted for non-operating items to find our value of equity. Beta vs. Equity Risk Premium

For the EP model, we used the WACC to discount our By conducting a sensitivity analysis with beta and the forecasted economic profit: forecasted invested capital equity risk premium, we are able to see how the changes in multiplied by the difference between ROIC and WACC. The these metrics affect our implied stock price. We decided to EP model then requires us to add back the 2020 invested compare these two metrics due to the major implications capital to find the value of operating assets. they have in our models. The ERP and beta are major drivers in our WACC calculation, which were used for the Both of these models gave us an implied price of $54.58 as discount rate in our model. The results of this analysis of April 12th, 2021. Based on the implied price, we showed us that a 0.2% increase in the ERP would quite recommend a BUY rating for GLPI given that the price substantially decrease our implied stock price and an target gives about a 26% upside compared to today’s price. increase in beta of 0.08 would also decrease the implied These model’s take into account our growth forecasts and stock price a similar amount. combination of debt and equity, which leads us to favor the DCF and EP models for our implied price.

DDM

Since GLPI is a REIT, using funds from operations per share instead of earnings per share in a dividend discount model provided us with a more relevant valuation. By using this metric, the dividend discount model gave us an implied CV Growth of NOPLAT vs. Risk Free Rate price of $42.95, a downside of 0.01%. If we were to use EPS instead of FFOPS, we would get an implied price of In this sensitivity analysis, we decided to compare the around $33, a 24% downside. Given the recent dividend relationship with the continuing value growth of NOPLAT cut and uncertainty due to the COVID-19 pandemic, along and the risk free rate as both of these are key factors in with our confidence in the future growth potential of GLPI, determining the value of GLPI’s implied stock price. The we do not see this model to be as reliable as the DCF and continuing value is drastically impacted by the change in EP models, so this model did not hold as much weight the risk free rate as it is discounted as a perpetuity. As you when deciding on our target price. can see from the table, a .03% change in the CV growth of NOPLAT has a small impact on our implied stock price.

Important disclosures appear on the last page of this report. 12 However, assuming a .07% change in the risk free rate GLP Capital Revenue Property Growth Rate vs. TRS displays a greater impact towards our valuation. Properties Revenue Per Property Growth Rate

In this sensitivity analysis, we compared both of GLPI’s divisions per property growth rates. We assumed that management will not look to expand the TRS division as it will remain unprofitable. We project TRS to stay consistent with historical averages of around -4% per property. For GLP Capital, assuming they sustain high operating margins on new acquisitions, we projected growth per property to WACC vs. CV ROIC range from 1.87%-2.47%. The changes in the growth rate property have the following effect on our valuation. In this analysis, we wanted to show the relationship between GLPI’s ability to generate returns based on capital invested, along with weighted average cost of capital. These measurements were significant in our models because they both drive GLPI’s economic profit. This sensitivity table showed us that WACC had more of an impact on our implied stock price assuming a change in WACC and CV ROIC of 0.05% and 0.10% respectively.

Real Estate Investments % of Sales vs. DPR (%AFFO)

In this sensitivity analysis, we tested the percentage change in real estate investments as a percentage of sales and DPR as a percentage of AFFO. High fluctuations in DPR combined with increases or decreases in real estate investments have a significant effect on our valuation. We expect real estate investments to remain around 685% of sales and DPR to stay around 71% of AFFO. Getting to our price target of $54.58.

Important disclosures appear on the last page of this report. 13 Index® | The Conference Board, References conference-board.org/data/consumerconfide nce.cfm#:~:text=The%20Index%20now%20s 1. Fernando, Jason. “Gross Domestic Product tands%20at,climbed%20from%2089.6%20to (GDP).” Investopedia, Investopedia, 7 Apr. %20110.0. 2021, 12. “Casino REITs: The House Always Wins.” www.investopedia.com/terms/g/gdp.asp. SeekingAlpha, 2. Payne, David. “GDP: Growth Estimates Keep seekingalpha.com/article/4358768-casino-rei Rising.” Kiplinger, Kiplinger, 25 Feb. 2021, ts-house-always-wins. www.kiplinger.com/economic-forecasts/gdp. 13. Fitch Ratings: Credit Ratings & Analysis For 3. “Real GDP Growth.” International Monetary Financial Markets, Fund - Homepage, www.fitchratings.com/research/corporate-fin www.imf.org/external/datamapper/NGDP_RP ance/fitch-rates-glpi-proposed-senior-unsecu CH@WEO/USA. red-notes-bbb-17-06-2020. 4. “GDP Forecast.” International Monetary Fund - 14. Shriber, Todd. “Gaming REITs Are Well Homepage, Positioned to Endure the Pandemic, Says www.imf.org/external/datamapper/NGDP_RP Moody's.” Casino.org, 11 Oct. 2020, CH@WEO/USA. www.casino.org/news/gaming-reits-are-well- 5. “The Effect of New Residential Construction positioned-to-endure-the-pandemic-says-moo on Housing Prices.” ResearchGate, dys/. www.researchgate.net/publication/26366437 15. Baker, Kendall. “Map: The States That Have 1_The_Effect_of_New_Residential_Constructio Legalized Sports Betting.” Axios, 13 Dec. 2019, n_on_Housing_Prices. www.axios.com/sports-betting-legalized-wha 6. “Understanding COVID-19's Impact on the t-states-4a26bb27-d88f-4adf-a908-6e10441e Real Estate Sector: Deloitte Global.” Deloitte, 1 d855.html. Apr. 2020, 16. Properties, MGM Growth. MGM Growth www2.deloitte.com/global/en/pages/about-d Properties and Blackstone Real Estate Income eloitte/articles/covid-19/understanding-covi Trust to Form Joint Venture to Acquire the Las d-19-s-impact-on-the-real-estate-sector--.htm Vegas Real Estate of the MGM Grand and l. Mandalay Bay for $4.6 Billion and 7. “Commercial Real Estate Trends & Outlook.” Simultaneously Execute Long-Term Lease with National Association of REALTORS® Research MGM Resorts, 14 Jan. 2020, Group, 2021, www.prnewswire.com/news-releases/mgm-g cdn.nar.realtor/sites/default/files/documents rowth-properties-and-blackstone-real-estate-i /2020-q4-commercial-real-estate-trends-and- ncome-trust-to-form-joint-venture-to-acquire outlook-survey-01-21-2021.pdf. -the-las-vegas-real-estate-of-the-mgm-grand- 8. “Rental Vacancy Rate for the United States.” and-mandalay-bay-for-4-6-billion-and-simulta FRED, 2 Feb. 2021, neously-execute-long-term-lease-with-mgm-r fred.stlouisfed.org/series/RRVRUSQ156N. esort-300986599.html. 9. “Unemployment Rate.” FRED, 2 Apr. 2021, 17. “GLPI 10-K.” US Securities and Exchange fred.stlouisfed.org/series/UNRATE. Commision, 10. Jeff Cox, CNBCcom. “Fed Sees Stronger glpropinc.gcs-web.com/static-files/7950bb5f- Economy and Higher Inflation, but No Rate c1ab-473d-9221-f0f3c26bf812. Hikes.” CNBC, CNBC, 17 Mar. 2021, 18. “VICI Properties Provides $400M Mortgage www.cnbc.com/2021/03/17/fed-decision-ma Loan to Caesars Entertainment.” rch-2021-fed-sees-stronger-economy-higher-i REBusinessOnline, 21 Sept. 2020, nflation-but-no-rate-hikes.html. rebusinessonline.com/vici-properties-provide 11. “Consumer Confidence Index®: The s-400m-mortgage-loan-to-caesars-entertainm Conference Board.” Consumer Confidence ent/.

Important disclosures appear on the last page of this report. 14 19. https://my.apps.factset.com 20. “Our Company.” MGM Growth Properties - About Us - Our Company, www.mgmgrowthproperties.com/about-us/o ur-company/default.aspx. 21. “Real Estate.” VICI Properties, 9 Dec. 2020, viciproperties.com/portfolio/real-estate/. 22. https://www.glpropinc.com/about-us/ 23. “Gaming and Leisure Properties, Inc. (GLPI) CEO Peter Carlino on Q4 2020 Results - Earnings Call Transcript.” SeekingAlpha, seekingalpha.com/article/4407472-gaming-a nd-leisure-properties-inc-glpi-ceo-peter-carli no-on-q4-2020-results-earnings-call. 24. “REIT Leverage Metrics.” REIT Institute, 10 Mar. 2019, www.reitinstitute.com/reit-leverage-metrics/ #:~:text=The%20extent%20to%20which%20 a,its%20returns%20and%20growth%20pote ntia. 25. “Gaming and Leisure Properties, (GLPI) Stock Major Holders.” Yahoo! Finance, Yahoo!, 15 Apr. 2021, finance.yahoo.com/quote/GLPI/holders?p=GL PI. 26. “Litt, Activist Investor That Pushed for Gaming REIT Merger, Drops GLP Stake.” Casino.org, www.casino.org/news/litt-drops-glp-stake-si gnals-end-of-vici-merger-hopes/. 27. Baker, Kendall. “Map: The States That Have Legalized Sports Betting.” Axios, 13 Dec. 2019, www.axios.com/sports-betting-legalized-wha t-states-4a26bb27-d88f-4adf-a908-6e10441e d855.html. 28. Chen, J. (2021, April 09). Funds from Operations. Retrieved April 16, 2021, from https://www.investopedia.com/terms/f/fund sfromoperation.asp#:~:text=Funds%20from %20operations%20(FFO)%20refers,cash%20 flow%20from%20their%20operations.&text= FFO%20is%20calculated%20by%20adding,a ssets%20and%20any%20interest%20income . 29. Monthly New Residential Construction. (2021, April 16). Retrieved from https://www.census.gov/construction/nrc/p df/newresconst.pdf

Important disclosures appear on the last page of this report. 15 Gaming and Leisure Properties, Inc Revenue Decomposition In Thousands Fiscal Years Ending Dec. 31 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Rental income 747,654 996,166 1,031,036 1,071,513 1,196,217 1,369,952 1,573,371 1,762,481 1,959,385 2,140,480 2,304,455 2,425,050 2,550,066 Income from direct financing lease 81,119 ------Interest income from real estate loans 6,943 28,916 19,130 25,395 28,350 32,468 37,289 41,771 46,437 50,729 54,615 57,474 60,436 Real estate taxes paid by tenants 87,466 ------Total income from real estate 923,182 1,025,082 1,050,166 1,096,908 1,224,568 1,402,419 1,610,660 1,804,252 2,005,823 2,191,210 2,359,070 2,482,524 2,610,503 Growth from prior year (%) 11.33% 11.04% 2.45% 4.45% 11.64% 14.52% 14.85% 12.02% 11.17% 9.24% 7.66% 5.23% 5.16% Gaming, food, beverage and other 132,545 128,391 102,999 122,303 136,537 156,367 179,586 201,171 223,645 244,316 263,032 276,797 291,066 Total revenues 1,055,727 1,153,473 1,153,165 1,219,211 1,361,105 1,558,786 1,790,246 2,005,422 2,229,468 2,435,525 2,622,102 2,759,320 2,901,569 Less promotional allowances Net Revenues 1,055,727 1,153,473 1,153,165 1,219,211 1,361,105 1,558,786 1,790,246 2,005,422 2,229,468 2,435,525 2,622,102 2,759,320 2,901,569 Revenues by segment GLP Capital 923,182 1,025,082 1,050,166 1,120,669 1,266,826 1,468,587 1,703,949 1,922,860 2,150,478 2,359,953 2,549,799 2,690,146 2,835,388 TRS Properties 132,545 128,391 102,999 98,542 94,279 90,199 86,297 82,563 78,990 75,572 72,303 69,174 66,181 Total revenues 1,055,727 1,153,473 1,153,165 1,219,211 1,361,105 1,558,786 1,790,246 2,005,422 2,229,468 2,435,525 2,622,102 2,759,320 2,901,569 Total Revenue Growth (%) 8.69% 9.26% -0.03% 5.73% 11.64% 14.52% 14.85% 12.02% 11.17% 9.24% 7.66% 5.23% 5.16% GLP Capital 11.33% 11.04% 2.45% 6.29% 11.54% 13.74% 13.81% 11.38% 10.58% 8.88% 7.45% 5.22% 5.12% TRS Properties -6.71% -3.13% -19.78% -4.33% -4.33% -4.33% -4.33% -4.33% -4.33% -4.33% -4.33% -4.33% -4.33% % of Total Rev. GLP Capital 87.45% 88.87% 91.07% 91.92% 93.07% 94.21% 95.18% 95.88% 96.46% 96.90% 97.24% 97.49% 97.72% TRS Properties 12.55% 11.13% 8.93% 8.08% 6.93% 5.79% 4.82% 4.12% 3.54% 3.10% 2.76% 2.51% 2.28% Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Number of Properties GLP Capital 44 43 45 47 52 59 67 74 81 87 92 95 98 TRS Properties 2 2 3 3 3 3 3 3 3 3 3 3 3 Revenue per property GLP Capital 20,981 23,839 23,337 23,844 24,362 24,891 25,432 25,985 26,549 27,126 27,715 28,317 28,933 Growth -8.91% 13.62% -2.11% 2.17% 2.17% 2.17% 2.17% 2.17% 2.17% 2.17% 2.17% 2.17% 2.17% TRS Properties 66,273 64,196 34,333 32,847 31,426 30,066 28,766 27,521 26,330 25,191 24,101 23,058 22,060 Growth -6.71% -3.13% -46.52% -4.33% -4.33% -4.33% -4.33% -4.33% -4.33% -4.33% -4.33% -4.33% -4.33% Implied revenue Property revenue 923,182 1,025,082 1,050,166 1,096,908 1,224,568 1,402,419 1,610,660 1,804,252 2,005,823 2,191,210 2,359,070 2,482,524 2,610,503 # of properties 46 44 48 50 ------Implied revenue per property 20,069 23,297 21,878 21,938 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Growth -8.03% 16.09% -6.09% 0.27% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Total square ft. of space 23,457,031 22,116,426 24,343,553 25,560,731 28,628,018 32,635,941 37,531,332 41,659,779 45,825,756 49,491,817 52,461,326 54,559,779 56,742,170 Implied revenue per square ft. 45.01 52.15 47.37 42.91 42.78 42.97 42.92 43.31 43.77 44.27 44.97 45.50 46.01 Growth -28.57% 15.88% -9.17% -9.41% -0.32% 0.46% -0.13% 0.92% 1.07% 1.15% 1.57% 1.19% 1.11% Revenue per real estate property Penn Master Lease 467,748 467,213 494,189 551,703 631,831 725,649 812,868 903,681 987,203 1,062,829 1,118,449 1,176,107 Amended Pinnacle Master Lease 310,516 322,124 334,393 373,310 427,528 491,011 550,027 611,476 667,991 719,164 756,799 795,813 Caesars Master Lease 107,703 90,411 104,715 116,902 133,880 153,760 172,241 191,484 209,182 225,206 236,992 249,209 Lumiere Lease - 22,804 12,055 13,458 15,413 17,701 19,829 22,044 24,081 25,926 27,283 28,689 Boyd Master Lease 96,832 97,807 102,880 114,853 131,534 151,065 169,222 188,127 205,515 221,259 232,837 244,841 Belterra Lease - 5,603 2,962 3,307 3,787 4,349 4,872 5,416 5,917 6,370 6,703 7,049 PENN - Meadows Lease 27,758 28,929 29,963 33,450 38,308 43,996 49,285 54,791 59,855 64,440 67,812 71,308 Casino Queen Lease 14,525 14,525 15,355 17,142 19,631 22,547 25,256 28,078 30,673 33,023 34,751 36,543 PENN Morgantown Lease - 750 396 443 507 582 652 725 792 853 897 944 Total income from real estate 1,025,082 1,050,166 1,096,908 1,224,568 1,402,419 1,610,660 1,804,252 2,005,823 2,191,210 2,359,070 2,482,524 2,610,503 % of Revenue Penn Master Lease 45.63% 44.49% 45.05% 45.05% 45.05% 45.05% 45.05% 45.05% 45.05% 45.05% 45.05% 45.05% Amended Pinnacle Master Lease 30.29% 30.67% 30.49% 30.49% 30.49% 30.49% 30.49% 30.49% 30.49% 30.49% 30.49% 30.49% Caesars Master Lease 10.51% 8.61% 9.55% 9.55% 9.55% 9.55% 9.55% 9.55% 9.55% 9.55% 9.55% 9.55% Lumiere Lease 0.00% 2.17% 1.10% 1.10% 1.10% 1.10% 1.10% 1.10% 1.10% 1.10% 1.10% 1.10% Boyd Master Lease 9.45% 9.31% 9.38% 9.38% 9.38% 9.38% 9.38% 9.38% 9.38% 9.38% 9.38% 9.38% Belterra Lease 0.00% 0.53% 0.27% 0.27% 0.27% 0.27% 0.27% 0.27% 0.27% 0.27% 0.27% 0.27% PENN - Meadows Lease 2.71% 2.75% 2.73% 2.73% 2.73% 2.73% 2.73% 2.73% 2.73% 2.73% 2.73% 2.73% Casino Queen Lease 1.42% 1.38% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% PENN Morgantown Lease 0.00% 0.07% 0.04% 0.04% 0.04% 0.04% 0.04% 0.04% 0.04% 0.04% 0.04% 0.04% Gaming and Leisure Properties, Inc Income Statement In Thousands Fiscal Years Ending Dec. 31 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Revenues Rental Income 747,654.00 996,166.00 1,031,036.00 1,071,513.45 1,196,217.33 1,369,951.57 1,573,371.21 1,762,481.01 1,959,385.46 2,140,480.33 2,304,454.55 2,425,049.98 2,550,066.09 Income from direct financing lease 81,119.00 ------Interest Income from real estate loans 6,943.00 28,916.00 19,130.00 25,394.81 28,350.29 32,467.78 37,288.82 41,770.71 46,437.33 50,729.27 54,615.45 57,473.56 60,436.43 Real estate taxes paid by tenants 87,466.00 ------Total income from real estate 923,182.00 1,025,082.00 1,050,166.00 1,096,908.26 1,224,567.62 1,402,419.35 1,610,660.03 1,804,251.72 2,005,822.80 2,191,209.60 2,359,070.00 2,482,523.54 2,610,502.52 Gaming, food, beverage and other 132,545.00 128,391.00 102,999.00 122,303.20 136,536.98 156,367.11 179,585.55 201,170.66 223,645.46 244,315.74 263,031.85 276,796.69 291,066.11 Total revenues 1,055,727.00 1,153,473.00 1,153,165.00 1,219,211.46 1,361,104.60 1,558,786.46 1,790,245.58 2,005,422.38 2,229,468.25 2,435,525.33 2,622,101.85 2,759,320.23 2,901,568.63 Less promotional allowances ------Net Revenue 1,055,727.00 1,153,473.00 1,153,165.00 1,219,211.46 1,361,104.60 1,558,786.46 1,790,245.58 2,005,422.38 2,229,468.25 2,435,525.33 2,622,101.85 2,759,320.23 2,901,568.63

Operating Expenses Gaming, food, beverage and other (77,127.00) (74,700.00) (56,698.00) (70,079.73) (78,235.69) (89,598.35) (102,902.52) (115,270.79) (128,148.85) (139,992.92) (150,717.25) (158,604.50) (166,780.88) Real estate taxes (88,757.00) ------Land rights and ground lease expense (28,358.00) (42,438.00) (29,041.00) (30,162.14) (31,326.55) (32,535.92) (33,791.98) (35,096.53) (36,451.44) (36,451.44) (36,451.44) (36,451.44) (36,451.44) Selling, General & Admin. Expenses (70,819.00) (65,385.00) (68,572.00) (60,960.57) (68,055.23) (77,939.32) (89,512.28) (100,271.12) (111,473.41) (121,776.27) (131,105.09) (137,966.01) (145,078.43) (Gains) losses from dispositions of properties (309.00) (92.00) 41,393.00 Depreciation (137,093.00) (240,435.00) (230,973.00) (303,314.65) (345,873.06) (385,533.32) (440,909.23) (505,806.99) (566,143.05) (628,990.89) (686,793.90) (739,131.09) (777,596.65) Loan impairment charges - (13,000.00) - Goodwill impairment charges (59,454.00) - - Total Operating Expenses (461,917.00) (436,050.00) (343,891.00) (464,517.09) (523,490.53) (585,606.93) (667,116.01) (756,445.43) (842,216.76) (927,211.52) (1,005,067.68) (1,072,153.04) (1,125,907.41) Income from operations 593,810.00 717,423.00 809,274.00 754,694.37 837,614.07 973,179.54 1,123,129.57 1,248,976.95 1,387,251.50 1,508,313.82 1,617,034.17 1,687,167.19 1,775,661.22

Other Income (expenses) Interest Expense (247,684.00) (301,520.00) (282,142.00) (200,316.58) (232,301.62) (259,337.13) (297,002.30) (341,103.21) (382,101.77) (424,790.20) (464,051.14) (499,600.37) (525,745.18) Interest Income 1,827.00 756.00 569.00 7,588.64 2,428.49 (3,581.40) (11,353.45) (20,428.79) (29,557.41) (39,360.32) (49,137.47) (58,800.55) (67,507.19) Losses on debt extiguishment (3,473.00) (21,014.00) (18,113.00) Management fees - - - Total other expenses (249,330.00) (321,778.00) (299,686.00) (192,727.95) (229,873.13) (262,918.52) (308,355.75) (361,532.00) (411,659.18) (464,150.52) (513,188.61) (558,400.91) (593,252.37)

Income before income taxes 344,480.00 395,645.00 509,588.00 561,966.42 607,740.94 710,261.01 814,773.82 887,444.95 975,592.32 1,044,163.30 1,103,845.56 1,128,766.27 1,182,408.85 Income tax expense 4,964.00 4,764.00 3,877.00 4,495.73 4,861.93 5,682.09 6,518.19 7,099.56 7,804.74 8,353.31 8,830.76 9,030.13 9,459.27 Net Income 339,516.00 390,881.00 505,711.00 557,470.69 602,879.01 704,578.93 808,255.63 880,345.39 967,787.58 1,035,809.99 1,095,014.80 1,119,736.14 1,172,949.58 Earnings per share 1.58 1.82 2.18 2.16 2.09 2.20 2.27 2.22 2.19 2.11 2.00 1.84 1.73 Dividends per share 2.57 2.74 2.50 2.66 2.63 2.72 2.80 2.79 2.78 2.71 2.61 2.44 2.31 Total shares outstanding 214,211.93 214,694.17 232,452.22 258,658 287,819 320,267 356,374 396,551 441,257 491,003 546,358 607,954 676,493 Gaming and Leisure Properties, Inc Balance Sheet In Thousands Fiscal Years Ending Dec. 31 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Assets Gross Real Estate Investments 8,314,546 8,301,496 8,698,098 10,052,404 11,354,808 13,077,878 15,085,915 17,045,086 19,123,304 21,138,956 23,076,949 24,727,300 26,449,282 Accumulated Depreciation (983,086) (1,200,941) (1,410,940) (1,699,017) (2,029,244) (2,397,904) (2,820,106) (3,305,000) (3,848,175) (4,452,034) (5,111,704) (5,821,909) (6,569,279) Real estate investments, net 7,331,460 7,100,555 7,287,158 8,353,387 9,325,563 10,679,974 12,265,809 13,740,086 15,275,129 16,686,922 17,965,245 18,905,392 19,880,002 Gross Property, Plant & Equipment 264,738 266,282 177,114 173,251 169,725 166,508 163,572 160,893 158,448 156,217 154,182 152,324 150,628 Accumulated Depreciation (163,854) (172,202) (96,496) (99,683) (102,591) (105,245) (107,667) (109,877) (111,894) (113,734) (115,414) (116,946) (118,345) Net PPE 100,884 94,080 80,618 73,568 67,134 61,263 55,905 51,016 46,554 42,483 38,768 35,377 32,284 Investment in direct financing lease, net ------Assets held for sale 61,448 61,448 61,448 61,448 61,448 61,448 61,448 61,448 61,448 61,448 61,448 Real estate of Tropicana Las Vegas, Gross 307,500 336,923 387,159 453,621 531,074 606,643 686,803 764,550 839,302 902,958 969,378 Accumulated Depreciation (2,669) (14,720) (27,457) (41,677) (57,962) (76,665) (97,616) (120,908) (146,353) (173,746) (202,574) Real estate of Tropicana Las Vegas, net 304,831 322,204 359,702 411,944 473,112 529,978 589,187 643,642 692,949 729,212 766,804 Real estate loans 303,684 303,684 ------Right-of-use assets and land rights,net 673,207 838,734 769,197 874,180 975,918 1,117,657 1,283,614 1,437,897 1,598,539 1,746,283 1,880,059 1,978,445 2,080,438 Cash and cash equivalents 25,783 26,823 486,451 155,672 (229,577) (727,785) (1,309,538) (1,894,706) (2,523,097) (3,149,838) (3,769,266) (4,327,384) (4,908,367) Prepaid expenses 30,967 4,228 2,098 15,260 17,036 19,510 22,408 25,101 27,905 30,484 32,819 34,537 36,317 Other current assets ------Receivable from Penn National Gaming, Inc ------Goodwill 16,067 16,067 ------Other intangible assets 9,577 9,577 ------Debt issuance costs ------Loan receivable 13,000 ------Deferred tax assets, net 5,178 6,056 5,690 6,492 7,247 8,300 9,533 10,678 11,871 12,968 13,962 14,693 15,450 Other assets 67,486 34,494 36,877 54,370 60,698 69,513 79,835 89,430 99,422 108,611 116,931 123,050 129,393 Total Assets 8,577,293 8,434,298 9,034,368 9,916,582 10,645,170 11,701,825 12,942,126 14,050,928 15,186,957 16,183,004 17,032,915 17,554,770 18,093,770

Liabilities Accounts payable 2,511 1,006 375 779 870 996 1,144 1,281 1,425 1,556 1,676 1,763 1,854 Accrued expenses 30,297 6,239 398 421 470 538 618 692 769 840 905 952 1,001 Accrued interest 45,261 60,695 72,285 67,678 75,554 86,527 99,376 111,320 123,757 135,195 145,551 153,168 161,064 Accrued saleries and wages 17,010 13,821 5,849 14,463 16,147 18,492 21,238 23,790 26,448 28,893 31,106 32,734 34,421 Gaming, property, and other taxes 42,879 944 146 622 695 796 914 1,024 1,138 1,243 1,338 1,408 1,481 Income taxes ------Current maturities of long-term debt ------Lease liabilities 183,971 152,203 186,669 208,393 238,660 274,097 307,042 341,345 372,893 401,459 422,468 444,247 Long term debt, net of unamortized debt issuance costs, bond 5,853,497 5,737,962 5,754,689 6,673,554 7,450,230 8,532,274 9,799,203 10,977,009 12,203,361 13,331,248 14,352,505 15,103,592 15,882,212 premiums and orignial issuance discounts Deferred rental income 293,911 328,485 333,061 366,171 408,787 468,157 537,673 602,298 669,586 731,472 787,508 828,719 871,441 Deferred tax liabilities 261 279 359 343 382 438 503 563 626 684 737 775 815 Other liabilities 26,059 26,651 39,985 35,197 39,294 45,000 51,682 57,894 64,362 70,311 75,697 79,658 83,765 Total liabilities 6,311,686 6,360,053 6,359,350 7,345,897 8,200,820 9,391,878 10,786,447 12,082,913 13,432,817 14,674,336 15,798,482 16,625,239 17,482,303

Shareholders' Equity Preferred stock Common stock + Additional paid-in capital 3,954,645 3,961,530 4,287,114 4,313,320 4,342,481 4,374,929 4,411,035 4,451,212 4,495,919 4,545,665 4,601,020 4,662,615 4,731,155 Retained (deficit) earnings (1,689,038) (1,887,285) (1,612,096) (1,742,636) (1,898,131) (2,064,982) (2,255,357) (2,483,197) (2,741,778) (3,036,997) (3,366,587) (3,733,084) (4,119,688) Total shareholders' equity 2,265,607 2,074,245 2,675,018 2,570,685 2,444,350 2,309,947 2,155,679 1,968,015 1,754,141 1,508,668 1,234,433 929,531 611,467 Total liabilities and shareholders' equity 8,577,293 8,434,298 9,034,368 9,916,582 10,645,170 11,701,825 12,942,126 14,050,928 15,186,957 16,183,004 17,032,915 17,554,770 18,093,770 Gaming and Leisure Properties, Inc Historical Cash Flow Statement In Thousands Fiscal Years Ending Dec. 31 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Operating Activities Net Income 26,684.00 22,919.00 19,830.00 185,384.00 128,122.00 289,305.00 380,598.00 339,516.00 390,881.00 505,711.00 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 14,568.00 14,090.00 28,923.00 106,843.00 109,783.00 115,717.00 123,835.00 148,365.00 258,971.00 242,995.00 Amortization of debt issuance costs, bond premiums and discounts - - 1,270.00 8,057.00 14,016.00 15,146.00 13,026.00 12,167.00 11,455.00 10,503.00 (Gains) losses on dispositions of property - (142.00) (39.00) 10.00 185.00 (455.00) 530.00 309.00 92.00 (41,393.00) Deferred income taxes (6,514.00) (88.00) (5,646.00) (3,305.00) (813.00) (1,535.00) (561.00) (522.00) (755.00) 451.00 Stock-based compensation - - 1,566.00 12,258.00 16,811.00 18,312.00 15,636.00 11,152.00 16,198.00 20,004.00 Straight-line rent adjustments - - - - 55,825.00 58,673.00 65,971.00 61,888.00 34,574.00 4,576.00 Deferred rent recognized ------(337,500.00) Losses on debt extinguishment ------3,473.00 21,014.00 18,113.00 Loan and goodwill impairment charges ------59,454.00 13,000.00 - (Increase), decrease Prepaid expenses and other assets (1,248.00) 1,515.00 (885.00) (10,601.00) (9,712.00) (7,565.00) (5,332.00) (673.00) (6,070.00) (6,628.00) (Decrease), increase Accounts payable and accrued expenses (468.00) (725.00) 10,634.00 (10,094.00) 3,295.00 (4,166.00) (10.00) 1,670.00 (1,775.00) (1,252.00) Accrued interest (4.00) - 17,216.00 (527.00) 95.00 16,120.00 (502.00) 12,020.00 15,434.00 11,590.00 Accrued salaries and wages 313.00 (394.00) 2,131.00 2,244.00 1,138.00 (3,100.00) 190.00 6,201.00 (3,189.00) (5,908.00) Gaming, property and other taxes and other liabilities 146.00 (250.00) (7.00) (527.00) (956.00) 913.00 (517.00) (587.00) 472.00 6,815.00 Net cash provided by operating activities 56,840.00 26,744.00 80,632.00 273,259.00 319,688.00 514,370.00 598,711.00 654,433.00 750,302.00 428,077.00 Investing Activities Capital project expenditures (5,131.00) (1,930.00) (12,198.00) (139,231.00) (16,149.00) (330.00) (78.00) (20.00) - (474.00) Capital maintenance expenditures (3,157.00) (3,260.00) (4,230.00) (3,538.00) (2,953.00) (3,111.00) (3,178.00) (4,284.00) (3,017.00) (3,130.00) Proceeds from sale of property and equipment 117.00 380.00 153.00 180.00 310.00 1,134.00 934.00 3,211.00 200.00 15.00 Acquisition of real estate assets - - - (140,730.00) - (3,267,992.00) (83,252.00) (1,243,466.00) - (5,898.00) Originations of real estate loans ------(303,684.00) - - Collections of principal payments on investment in direct financing lease - - - - 4.65 51.68 86.27 38,459.00 - - Net cash used in investing activities (8,171.00) (4,810.00) (16,275.00) (317,319.00) (14,142.00) (3,218,616.00) 698.00 (1,509,784.00) 2,817.00 (9,487.00) Financing Activities Net advances to Penn National Gaming, Inc. (27,374.00) (24,518.00) (6,982.00) ------Cash contributions to Penn National Gaming, Inc. in connection with Spin-Off - - (2,090,000.00) ------Dividends paid - - - (494,104.00) (251,732.00) (428,352.00) (529,370.00) (550,435.00) (589,128.00) (230,522.00) Taxes paid for shares withheld on restricted stock award vestings - - 1,431.00 29,931.00 29,686.00 113,484.00 18,157.00 7,537.00 (9,058.00) (15,293.00) Proceeds from issuance of common stock, net - - - - - 870,810.00 139,414.00 - (255.00) 320,873.00 Proceeds from issuance of long-term debt - - 2,350,000.00 291,644.00 - 2,552,000.00 100,000.00 2,593,405.00 1,358,853.00 2,076,383.00 Financing costs - - (48,147.00) (635.00) (9,500.00) (31,911.00) - (32,426.00) (10,029.00) (11,641.00) Repayments of long-term debt - - - (32,024.00) (68,098.00) (377,104.00) (355,112.00) (1,164,117.00) (1,477,949.00) (2,060,884.00) Premium and related costs paid on tender of senior unsecured notes ------(1,884.00) (18,879.00) (15,747.00) Net cash provided by (used in) financing activities (50,436.00) (24,518.00) (206,302.00) (205,188.00) (299,644.00) (2,698,927.00) (606,911.00) 852,080.00 (746,445.00) 63,169.00 Net increase (decrease) in cash and cash equivalents, including cash classified within assets held for sale ------(3,271.00) 1,040.00 481,759.00 Less decrease in cash classified within assets held for sale ------(22,131.00) Net increase/decrease in cash and cash equivalents (1,767.00) (2,584.00) 270,659.00 (249,248.00) 5,902.00 (5,319.00) (7,502.00) (3,271.00) 1,040.00 481,759.00 Cash and cash equivalents at beginning of period 18,913.00 17,146.00 14,562.00 285,221.00 35,973.00 41,875.00 36,556.00 29,054.00 25,783.00 26,823.00 Cash and cash equivalents at end of period 17,146.00 14,562.00 285,221.00 35,973.00 41,875.00 36,556.00 29,054.00 25,783.00 26,823.00 486,451.00

FFO & AFFO: Net Income 26,684.00 22,919.00 14,853.00 138,807.00 128,122.00 289,305.00 380,598.00 339,516.00 390,881.00 505,711.00 (Gains) losses from dispositions of property (75.00) (142.00) (39.00) 10.00 185.00 (455.00) 530.00 309.00 92.00 (41,393.00) Real estate depreciation - - 14,896.00 92,750.00 95,511.00 96,074.00 100,576.00 125,630.00 230,716.00 220,069.00 Funds from operations 26,609.00 22,777.00 29,710.00 231,567.00 223,818.00 384,924.00 481,704.00 465,455.00 621,689.00 684,387.00 Growth from prior year (%) -14.40% 30.44% 679.42% -3.35% 71.98% 25.14% -3.37% 33.57% 10.09% Straight-line rent adjustments - - 6,677.00 44,877.00 55,825.00 58,673.00 65,971.00 61,888.00 34,574.00 4,576.00 Other depreciation 14,568.00 14,090.00 14,027.00 14,093.00 14,272.00 13,480.00 12,904.00 11,463.00 9,719.00 10,904.00 Amortization of land rights - - - - - 6,163.00 10,355.00 11,272.00 18,536.00 12,022.00 Amortization of debt issuance, bond premiums and original issuance discounts - - 700.00 8,057.00 14,016.00 15,146.00 12,026.00 12,167.00 11,455.00 10,503.00 Stock based compensation - - 1,566.00 12,258.00 16,811.00 18,312.00 15,636.00 11,152.00 16,198.00 20,004.00 Losses on debt extinguishment ------3,473.00 21,014.00 18,113.00 Loan impairment charges ------13,000.00 - Capital maintenance expenditures (CAPEX) (3,157.00) (3,260.00) (4,230.00) (3,538.00) (2,953.00) (3,111.00) (3,178.00) (4,284.00) (3,017.00) (3,130.00) Adjusted funds from operations 38,020.00 33,607.00 48,450.00 307,314.00 321,789.00 542,110.00 669,490.00 683,648.00 743,168.00 757,379.00 Growth from prior year (%) -11.61% 44.17% 534.29% 4.71% 68.47% 23.50% 2.11% 8.71% 1.91% Gaming and Leisure Properties, Inc Forecasted Cash Flow Statement

Fiscal Years Ending Dec. 31 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Operating Activities Net Income 557,471 602,879 704,579 808,256 880,345 967,788 1,035,810 1,095,015 1,119,736 1,172,950 Depreciation 303,315 345,873 385,533 440,909 505,807 566,143 628,991 686,794 739,131 777,597 Prepaid expenses (13,162) (1,776) (2,474) (2,897) (2,693) (2,804) (2,579) (2,335) (1,717) (1,780) Receivable from Penn National Gaming, Inc ------Deferred tax assets, net (802) (756) (1,053) (1,232) (1,146) (1,193) (1,097) (993) (731) (757) Accounts payable 404 91 126 148 137 143 132 119 88 91 Accrued expenses 23 49 68 80 74 77 71 64 47 49 Accrued interest (4,607) 7,876 10,973 12,848 11,944 12,437 11,438 10,357 7,617 7,896 Accrued saleries and wages 8,614 1,683 2,345 2,746 2,553 2,658 2,444 2,213 1,628 1,687 Gaming, property, and other taxes 476 72 101 118 110 114 105 95 70 73 Income taxes ------Deferred rental income 33,110 42,615 59,371 69,515 64,625 67,289 61,886 56,035 41,211 42,722 Deferred tax liabilities (16) 40 56 65 60 63 58 52 39 40 Other liabilities (4,788) 4,096 5,707 6,682 6,212 6,468 5,949 5,386 3,961 4,107 Other current assets ------Net Cash Provided (Used) by Operating Activities 880,037 1,002,744 1,165,332 1,337,237 1,468,029 1,619,182 1,743,208 1,852,803 1,911,080 2,004,673

Investing Activities Gross PPE 3,863 3,525 3,217 2,936 2,679 2,445 2,231 2,036 1,858 1,695 Gross Real Estate Investments (1,354,306) (1,302,403) (1,723,070) (2,008,037) (1,959,171) (2,078,218) (2,015,652) (1,937,993) (1,650,352) (1,721,981) Investment in direct financing lease, net ------Assets held for sale ------Gross Real estate of Tropicana Las Vegas (29,423) (50,236) (66,462) (77,453) (75,568) (80,160) (77,747) (74,752) (63,657) (66,420) Right-of-use assets and land rights,net (104,983) (101,738) (141,739) (165,957) (154,283) (160,642) (147,744) (133,776) (98,386) (101,993) Goodwill ------Other intangible assets ------Other assets (17,493) (6,328) (8,815) (10,322) (9,596) (9,991) (9,189) (8,320) (6,119) (6,343) Lease liabilities 34,466 21,725 30,266 35,438 32,945 34,303 31,549 28,566 21,009 21,779 Net Cash Provided (Used) by Investing Activities (1,467,877) (1,435,455) (1,906,603) (2,223,396) (2,162,994) (2,292,264) (2,216,552) (2,124,239) (1,795,647) (1,873,262)

Financing Activities Debt issuance costs ------Loan receivable ------Current maturities of long-term debt ------Long term debt, net of unamortized debt issuance costs, 918,865 776,675 1,082,044 1,266,929 1,177,806 1,226,352 1,127,887 1,021,257 751,087 778,620 bond premiums and orignial issuance discounts Preferred stock ------Common stock + Additional paid-in capital 26,206 29,161 32,448 36,106 40,177 44,706 49,746 55,355 61,595 68,540 Dividends Paid (688,010) (758,374) (871,430) (998,631) (1,108,186) (1,226,368) (1,331,029) (1,424,604) (1,486,234) (1,559,553) Net Cash Provided (Used) by Financing Activities 257,061 47,462 243,062 304,405 109,796 44,690 (153,395) (347,992) (673,551) (712,394)

Net Cash Provided (Used) in Period (330,779) (385,249) (498,208) (581,753) (585,168) (628,392) (626,740) (619,428) (558,118) (580,983) Cash and cash equivalents at beginning of period 486,451 155,672 (229,577) (727,785) (1,309,538) (1,894,706) (2,523,097) (3,149,838) (3,769,266) (4,327,384) Cash and cash equivalents at end of period 155,672 (229,577) (727,785) (1,309,538) (1,894,706) (2,523,097) (3,149,838) (3,769,266) (4,327,384) (4,908,367)

FFO & AFFO: Net Income 557,471 602,879 704,579 808,256 880,345 967,788 1,035,810 1,095,015 1,119,736 1,172,950

(Gains) losses from dispositions of property ------Real estate depreciation 300,128 342,965 382,879 438,487 503,597 564,126 627,150 685,114 737,599 776,198 Funds from operations 857,598 945,844 1,087,458 1,246,743 1,383,942 1,531,914 1,662,960 1,780,129 1,857,335 1,949,148 Growth from prior year (%) 0 0 0 0 0 0 0 0 0 0 Straight-line rent adjustments 26,714 29,463 33,874 38,836 43,109 47,719 51,801 55,450 57,855 60,715 Other depreciation 3,187 2,908 2,654 2,422 2,210 2,017 1,840 1,679 1,533 1,399 Amortization of land rights 20,317 22,408 25,763 29,536 32,787 36,292 39,397 42,173 44,002 46,177 Amortization of debt issuance, bond premiums and original issuance discounts 14,481 15,972 18,363 21,053 23,369 25,868 28,081 30,059 31,363 32,913 Stock based compensation 23,706 26,145 30,059 34,462 38,255 42,345 45,967 49,206 51,340 53,878 Losses on debt extinguishment 25,843 28,502 32,769 37,569 41,703 46,162 50,111 53,642 55,968 58,735 Loan impairment charges ------Capital maintenance expenditures (4,042) (4,458) (5,125) (5,876) (6,523) (7,220) (7,838) (8,390) (8,754) (9,187) Adjusted funds from operations 967,804 1,066,783 1,225,815 1,404,745 1,558,853 1,725,097 1,872,320 2,003,949 2,090,642 2,193,779 Growth from prior year (%) 27.78% 10.23% 14.91% 14.60% 10.97% 10.66% 8.53% 7.03% 4.33% 4.93% FFO per share 3.32 3.29 3.40 3.50 3.49 3.47 3.39 3.26 3.06 2.88 Gaming and Leisure Properties, Inc Common Size Income Statement

Fiscal Years Ending Dec. 31 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Revenues Rental Income 70.82% 86.36% 89.41% 87.89% 87.89% 87.89% 87.89% 87.89% 87.89% 87.89% 87.89% 87.89% 87.89% Income from direct financeing lease 7.68% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Interest Income from real estate loans 0.66% 2.51% 1.66% 2.08% 2.08% 2.08% 2.08% 2.08% 2.08% 2.08% 2.08% 2.08% 2.08% Real estate taxes paid by tenants 8.28% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total income from real estate 87.45% 88.87% 91.07% 89.97% 89.97% 89.97% 89.97% 89.97% 89.97% 89.97% 89.97% 89.97% 89.97% Gaming, food, beverage and other 12.55% 11.13% 8.93% 10.03% 10.03% 10.03% 10.03% 10.03% 10.03% 10.03% 10.03% 10.03% 10.03% Total revenues 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Operating Expenses Gaming, food, beverage and other -7.31% -6.48% -4.92% -5.75% -5.75% -5.75% -5.75% -5.75% -5.75% -5.75% -5.75% -5.75% -5.75% Real estate taxes -8.41% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Land rights and ground lease expense -2.69% -3.68% -2.52% -2.47% -2.30% -2.09% -1.89% -1.75% -1.63% -1.50% -1.39% -1.32% -1.26% Selling, General & Admin. Expenses -6.71% -5.67% -5.95% -5.00% -5.00% -5.00% -5.00% -5.00% -5.00% -5.00% -5.00% -5.00% -5.00% (Gains) losses from dispositions of properties -0.03% -0.01% 3.59% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Depreciation -12.99% -20.84% -20.03% -24.88% -25.41% -24.73% -24.63% -25.22% -25.39% -25.83% -26.19% -26.79% -26.80% Loan impairment charges 0.00% -1.13% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Goodwill impairment charges -5.63% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Operating Expenses -43.75% -37.80% -29.82% -38.10% -38.46% -37.57% -37.26% -37.72% -37.78% -38.07% -38.33% -38.86% -38.80% Income from operations 56.25% 62.20% 70.18% 61.90% 61.54% 62.43% 62.74% 62.28% 62.22% 61.93% 61.67% 61.14% 61.20%

Other Income (expenses) Interest Expense -23.46% -26.14% -24.47% -16.43% -17.07% -16.64% -16.59% -17.01% -17.14% -17.44% -17.70% -18.11% -18.12% Interest Income 0.17% 0.07% 0.05% 0.62% 0.18% -0.23% -0.63% -1.02% -1.33% -1.62% -1.87% -2.13% -2.33% Losses on debt extiguishment -0.33% -1.82% -1.57% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Management fees 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total other expenses -23.62% -27.90% -25.99% -15.81% -16.89% -16.87% -17.22% -18.03% -18.46% -19.06% -19.57% -20.24% -20.45%

Income before income taxes 32.63% 34.30% 44.19% 46.09% 44.65% 45.56% 45.51% 44.25% 43.76% 42.87% 42.10% 40.91% 40.75% Income tax expense 0.47% 0.41% 0.34% 0.37% 0.36% 0.36% 0.36% 0.35% 0.35% 0.34% 0.34% 0.33% 0.33% Net Income 32.16% 33.89% 43.85% 45.72% 44.29% 45.20% 45.15% 43.90% 43.41% 42.53% 41.76% 40.58% 40.42% Gaming and Leisure Properties, Inc Common Size Balance Sheet

Fiscal Years Ending Dec. 31 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Assets Real estate investments, net 751.11% 672.57% 631.76% 724.39% 764.88% 784.65% 786.88% 767.50% 761.69% 748.47% 737.63% 721.00% 720.47% Property and equipment, used in operations, net 10.34% 8.91% 6.99% 6.38% 5.51% 4.50% 3.59% 2.85% 2.32% 1.91% 1.59% 1.35% 1.17% Investment in direct financing lease, net 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Assets held for sale 0.00% 0.00% 5.33% 5.33% 5.04% 4.51% 3.94% 3.43% 3.06% 2.76% 2.52% 2.34% 2.23% Real estate of Tropicana Las Vegas, net 0.00% 0.00% 26.43% 27.94% 29.50% 30.27% 30.35% 29.60% 29.38% 28.87% 28.45% 27.81% 27.79% Real estate loans 31.11% 28.77% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Right-of-use assets and land rights,net 68.97% 79.45% 66.69% 75.81% 80.05% 82.11% 82.35% 80.32% 79.71% 78.33% 77.19% 75.45% 75.40% Cash and cash equivalents 2.64% 2.54% 42.17% 13.50% -18.83% -53.47% -84.01% -105.83% -125.81% -141.28% -154.76% -165.03% -177.88% Prepaid expenses 3.17% 0.40% 0.18% 1.32% 1.40% 1.43% 1.44% 1.40% 1.39% 1.37% 1.35% 1.32% 1.32% Other current assets 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Receivable from Penn National Gaming, Inc 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Goodwill 1.65% 1.52% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Other intangible assets 0.98% 0.91% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Debt issuance costs 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Loan receivable 1.33% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Deferred tax assets, net 0.53% 0.57% 0.49% 0.56% 0.59% 0.61% 0.61% 0.60% 0.59% 0.58% 0.57% 0.56% 0.56% Other assets 6.91% 3.27% 3.20% 4.71% 4.98% 5.11% 5.12% 5.00% 4.96% 4.87% 4.80% 4.69% 4.69% Total Assets 878.74% 798.91% 783.23% 859.94% 873.12% 859.73% 830.27% 784.86% 757.29% 725.87% 699.35% 669.49% 655.73%

Liabilities Accounts payable 0.26% 0.10% 0.03% 0.07% 0.07% 0.07% 0.07% 0.07% 0.07% 0.07% 0.07% 0.07% 0.07% Accrued expenses 3.10% 0.59% 0.03% 0.04% 0.04% 0.04% 0.04% 0.04% 0.04% 0.04% 0.04% 0.04% 0.04% Accrued interest 4.64% 5.75% 6.27% 5.87% 6.20% 6.36% 6.38% 6.22% 6.17% 6.06% 5.98% 5.84% 5.84% Accrued saleries and wages 1.74% 1.31% 0.51% 1.25% 1.32% 1.36% 1.36% 1.33% 1.32% 1.30% 1.28% 1.25% 1.25% Gaming, property, and other taxes 4.39% 0.09% 0.01% 0.05% 0.06% 0.06% 0.06% 0.06% 0.06% 0.06% 0.05% 0.05% 0.05% Income taxes 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Current maturities of long-term debt 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Lease liabilities 0.00% 17.43% 13.20% 16.19% 17.09% 17.53% 17.58% 17.15% 17.02% 16.73% 16.48% 16.11% 16.10% Long term debt, net of unamortized debt issuance costs, bond premiums and orignial issuance 599.69% 543.51% 498.90% 578.72% 611.07% 626.86% 628.64% 613.16% 608.52% 597.96% 589.30% 576.01% 575.58% discounts Deferred rental income 30.11% 31.11% 28.87% 31.75% 33.53% 34.40% 34.49% 33.64% 33.39% 32.81% 32.33% 31.61% 31.58% Deferred tax liabilities 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% Other liabilities 2.67% 2.52% 3.47% 3.05% 3.22% 3.31% 3.32% 3.23% 3.21% 3.15% 3.11% 3.04% 3.04% Total liabilities 646.63% 602.43% 551.32% 637.02% 672.63% 690.02% 691.98% 674.93% 669.82% 658.20% 648.67% 634.04% 633.57%

Shareholders' Equity Preferred stock 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Common stock + Additional paid-in capital 405.15% 375.24% 371.67% 374.04% 356.17% 321.42% 282.98% 248.64% 224.19% 203.89% 188.91% 177.82% 171.46% Retained (deficit) earnings -173.04% -178.77% -139.76% -151.12% -155.69% -151.71% -144.69% -138.71% -136.72% -136.22% -138.23% -142.37% -149.30% Total shareholders' equity 232.11% 196.48% 231.91% 222.92% 200.49% 169.71% 138.29% 109.93% 87.47% 67.67% 50.68% 35.45% 22.16% Total liabilities and shareholders' equity 878.74% 798.91% 783.23% 859.94% 873.12% 859.73% 830.27% 784.86% 757.29% 725.87% 699.35% 669.49% 655.73% Gaming and Leisure Properties, Inc Value Driver Estimation

Fiscal Years Ending Dec. 31 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

NOPLAT: Operating Revenues Rental Income 747,654 996,166 1,031,036 1,071,513 1,196,217 1,369,952 1,573,371 1,762,481 1,959,385 2,140,480 2,304,455 2,425,050 2,550,066 Income from direct financing lease 81,119 ------Real estate taxes paid by tenants 87,466 ------Gaming, food, beverage and other 132,545 128,391 102,999 122,303 136,537 156,367 179,586 201,171 223,645 244,316 263,032 276,797 291,066 Operating Expenses Gaming, food, beverage and other (77,127) (74,700) (56,698) (70,080) (78,236) (89,598) (102,903) (115,271) (128,149) (139,993) (150,717) (158,605) (166,781) Real estate taxes (88,757) ------Land rights and ground lease expense (28,358) (42,438) (29,041) (30,162) (31,327) (32,536) (33,792) (35,097) (36,451) (36,451) (36,451) (36,451) (36,451) Selling, General & Admin. Expenses (70,819) (65,385) (68,572) (60,961) (68,055) (77,939) (89,512) (100,271) (111,473) (121,776) (131,105) (137,966) (145,078) Depreciation (137,093) (240,435) (230,973) (303,315) (345,873) (385,533) (440,909) (505,807) (566,143) (628,991) (686,794) (739,131) (777,597) Management fees ------Implied Interest on Op leases 9,145 11,389 11,397 9,451 8,624 7,870 7,182 6,554 5,981 5,458 4,980 4,545 4,147 EBITA 655,775 712,988 760,148 738,751 817,888 948,582 1,093,023 1,213,760 1,346,795 1,463,042 1,567,399 1,634,238 1,719,372 Federal taxes 2,856 3,005 1,111 State Taxes 2,630 2,514 2,315 Pretax Income 344,480 395,645 509,588 561,966 607,741 710,261 814,774 887,445 975,592 1,044,163 1,103,846 1,128,766 1,182,409 Marginal Tax Rate 1.59% 1.39% 0.67% 0.67% 0.67% 0.67% 0.67% 0.67% 0.67% 0.67% 0.67% 0.67% 0.67% Tax Provision 4,964.00 4,764.00 3,877.00 4,495.73 4,861.93 5,682.09 6,518.19 7,099.56 7,804.74 8,353.31 8,830.76 9,030.13 9,459.27 Tax Loss on Non Operating Gains (Shields on Expenses) Interest Income from real estate loans (111) (403) (129) (171) (191) (218) (251) (281) (312) (341) (367) (386) (406) Gains (losses) from dispositions of properties (5) (1) 278 ------Loan impairment charges - (181) ------Goodwill impairment charges (947) ------Interest Expense 3,944 4,206 1,897 1,347 1,562 1,744 1,997 2,293 2,569 2,856 3,120 3,359 3,535 Interest Income (29) (11) (4) (51) (16) (24) (76) (137) (199) (265) (330) (395) (454) Losses on debt extiguishment (55) (293) (122) ------Implied Interest on Operating Leases 146 159 77 64 58 53 48 44 40 37 33 31 28 Total Adjusted Taxes 7,907 8,239 5,875 5,684 6,275 7,236 8,236 9,019 9,903 10,640 11,287 11,638 12,162 Change in Deferred Taxes (683) (860) 446 (818) (716) (997) (1,167) (1,085) (1,130) (1,039) (941) (692) (717) NOPLAT 647,185 703,888 754,719 732,248 810,898 940,349 1,083,619 1,203,656 1,335,762 1,451,363 1,555,171 1,621,909 1,706,493

Invested Capital (IC): Normal Cash 26,823 29,306 29,299 30,977 34,582 39,604 45,485 50,952 56,644 61,880 66,620 70,106 73,721 AR Inventory Prepaid Expenses 30,967 4,228 2,098 15,260 17,036 19,510 22,408 25,101 27,905 30,484 32,819 34,537 36,317 Other Operating CA's OP CURRENT ASSETS 57,790 33,534 31,397 46,237 51,618 59,115 67,893 76,053 84,549 92,364 99,439 104,643 110,038 AP 2,511 1,006 375 779 870 996 1,144 1,281 1,425 1,556 1,676 1,763 1,854 Accrued Expenses, Interest, Salaries 92,568 80,755 78,532 82,562 92,171 105,557 121,231 135,802 150,974 164,928 177,562 186,854 196,487 Gaming, Property, and other taxes 42,879 944 146 622 695 796 914 1,024 1,138 1,243 1,338 1,408 1,481 Income Taxes ------Deferred Rev 293,911 328,485 333,061 366,171 408,787 468,157 537,673 602,298 669,586 731,472 787,508 828,719 871,441 Dividends Payable - - - Op CURRENT LIABILITIES 431,869 411,190 412,114 450,135 502,522 575,506 660,961 740,405 823,123 899,199 968,084 1,018,745 1,071,263 OP WC (374,079) (377,656) (380,717) (403,898) (450,904) (516,391) (593,069) (664,352) (738,573) (806,835) (868,644) (914,101) (961,225) Gross Book Value of PPE Accumulated Depr NET PPE 100,884 94,080 80,618 73,568 67,134 61,263 55,905 51,016 46,554 42,483 38,768 35,377 32,284 Net Intangible Assets 9,577 9,577 ------PV of Operating Leases 324,555 183,971 152,203 186,669 208,393 238,660 274,097 307,042 341,345 372,893 401,459 422,468 444,247 Other Operating LT Assets ------Net Real Estate 7,331,460 7,100,555 7,591,989 8,675,591 9,685,266 11,091,918 12,738,921 14,270,063 15,864,315 17,330,564 18,658,194 19,634,604 20,646,806 LT Operating Assets 7,665,592 7,294,103 7,744,192 8,862,260 9,893,659 11,330,578 13,013,018 14,577,105 16,205,660 17,703,457 19,059,653 20,057,072 21,091,054 Warranty Liabilities Deferred Revenue 293,911 328,485 333,061 366,171 408,787 468,157 537,673 602,298 669,586 731,472 787,508 828,719 871,441 Other non interest Liabilities LT Operating Liabilities 293,911 328,485 333,061 366,171 408,787 468,157 537,673 602,298 669,586 731,472 787,508 828,719 871,441 Invested Capital 7,098,486 6,682,042 7,111,032 8,165,758 9,101,103 10,407,292 11,938,183 13,361,472 14,844,055 16,207,633 17,442,269 18,349,629 19,290,671

Free Cash Flow (FCF): NOPLAT 647,185 703,888 754,719 732,248 810,898 940,349 1,083,619 1,203,656 1,335,762 1,451,363 1,555,171 1,621,909 1,706,493 Change in IC 3,576,820 (416,443) 428,989 1,054,727 935,344 1,306,190 1,530,890 1,423,289 1,482,583 1,363,578 1,234,637 907,360 941,042 FCF (2,929,635) 1,120,332 325,730 (322,479) (124,446) (365,841) (447,271) (219,633) (146,821) 87,785 320,535 714,549 765,451

Return on Invested Capital (ROIC): NOPLAT 647,185 703,888 754,719 732,248 810,898 940,349 1,083,619 1,203,656 1,335,762 1,451,363 1,555,171 1,621,909 1,706,493 Beginning IC 3,521,666 7,098,486 6,682,042 7,111,032 8,165,758 9,101,103 10,407,292 11,938,183 13,361,472 14,844,055 16,207,633 17,442,269 18,349,629 ROIC 18.38% 9.92% 11.29% 10.30% 9.93% 10.33% 10.41% 10.08% 10.00% 9.78% 9.60% 9.30% 9.30% WACC 5.96% 4.74% 8.47% 6.53% 6.53% 6.53% 6.53% 6.53% 6.53% 6.53% 6.53% 6.53% 6.53%

Economic Profit (EP): Beginning IC 3,521,666 7,098,486 6,682,042 7,111,032 8,165,758 9,101,103 10,407,292 11,938,183 13,361,472 14,844,055 16,207,633 17,442,269 18,349,629 x (ROIC - WACC) 12.42% 5.18% 2.82% 3.77% 3.40% 3.81% 3.88% 3.56% 3.47% 3.25% 3.07% 2.77% 2.77% EP 437,294 367,420 188,750 268,101 277,908 346,307 404,321 424,435 463,641 482,471 497,277 483,428 508,788 Gaming and Leisure Properties, Inc Weighted Average Cost of Capital (WACC) Estimation

Cost of Equity: ASSUMPTIONS: Risk-Free Rate 1.56% 10-year Treasury bond 4/15 Beta 1.58 Average of 1, 2, 3, 4, 5, and 10-year weekly raw betas Equity Risk Premium 4.26% Aswath Damodaran 3/1/21 COVID-Adjusted Implied ERP Cost of Equity 8.31%

Cost of Debt: Risk-Free Rate 1.56% 10-year Treasury bond Implied Default Premium 1.95% Pre-Tax Cost of Debt 3.51% "YTM on company's 10-year corporate bond" Marginal Tax Rate 0.8% After-Tax Cost of Debt 3.48%

Market Value of Common Equity: MV Weights Total Shares Outstanding 232780 (thousands) Current Stock Price $43.34 MV of Equity 10,088,685.20 63.07%

Market Value of Debt: Short-Term Debt Current Portion of LTD Long-Term Debt 5,754,689 PV of Operating Leases 152,203 MV of Total Debt 5,906,892.00 36.93%

Market Value of the Firm 15,995,577.20 100.00%

Estimated WACC 6.53% Gaming and Leisure Properties, Inc Discounted Cash Flow (DCF) and Economic Profit (EP) Valuation Models

Key Inputs: CV Growth of NOPLAT 3.03% CV Year ROIC 9.41% WACC 6.53% Cost of Equity 8.31%

Fiscal Years Ending Dec. 31 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

DCF Model: Free Cash Flow (FCF) (322,478.97) (124,446.25) (365,840.81) (447,271.44) (219,633.41) (146,821.26) 87,785.16 320,534.92 714,548.53 765,451.18 Continuing Value (CV) 33,078,658.65 PV of FCF (302,720.02) (109,663.30) (302,629.60) (347,320.30) (160,102.15) (100,467.93) 56,389.64 193,282.87 404,472.96 18,724,302.48

Value of Operating Assets: 18,055,544.64 Non-Operating Adjustments 457,152.38 Excess Cash 36,877.00 Other Assets (5,754,689.00) Debt (39,985.00) Other L-T Debt (152,203.00) PV of op leases Value of Equity 12,602,697.02 Shares Outstanding 232,452 Intrinsic Value of Last FYE $ 54.22 Implied Price as of Today $ 54.58

EP Model: Economic Profit (EP) 268,101.22 277,907.68 346,307.44 404,320.99 424,434.73 463,640.51 482,471.09 497,277.32 483,427.98 508,787.90 Continuing Value (CV) 14,729,029.32 PV of EP 251,674.11 244,895.07 286,471.27 313,967.93 309,392.42 317,263.33 309,919.96 299,858.71 273,646.27 8,337,423.93

Total PV of EP 10,944,513.02 Invested Capital (last FYE) 7,111,031.62 Value of Operating Assets: 18,055,544.64 Non-Operating Adjustments 457,152.38 Excess Cash 36,877.00 Other Assets (5,754,689.00) Debt (39,985.00) Other L-T Debt (152,203.00) PV of op leases Value of Equity 12,602,697.02 Shares Outstanding $ 232,452 Intrinsic Value of Last FYE $ 54.22 Implied Price as of Today $ 54.58 Gaming and Leisure Properties, Inc Dividend Discount Model (DDM) or Fundamental P/E Valuation Model

Fiscal Years Ending Dec. 31 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

FFO Per Share $ 3.32 $ 3.29 $ 3.40 $ 3.50 $ 3.49 $ 3.47 $ 3.39 $ 3.26 $ 3.06 $ 2.88

Key Assumptions CV growth of FFO 3.03% CV Year ROE 152% Cost of Equity 8.31%

Future Cash Flows P/E Multiple (CV Year) 18.56 FFO (CV Year) $ 2.88 Future Stock Price $ 53.48 Dividends Per Share 2.66 2.63 2.72 2.80 2.79 2.78 2.71 2.61 2.44 1.08 1.17 1.27 1.38 1.49 1.61 1.75 1.89 2.05 2.05 Discounted Cash Flows 2.46 2.25 2.14 2.04 1.87 1.72 1.55 1.38 1.19 26.07

Intrinsic Value as of Last FYE $ 42.66 Implied Price as of Today $ 42.95 Gaming and Leisure Properties, Inc Relative Valuation Models

EPS EPS Est. 5yr FFO FFO Ticker Company Price 2021E 2022E P/E 21 P/E 22 EPS gr. PEG 21 PEG 22 2021 2022 P/FFO 21 P/FFO 22 VICI VICI Properties $28.55 $1.94 $2.03 14.72 14.06 7.8 1.89 1.80 1.94 2.03 $14.72 $14.06 MGP MGM Growth Properties $33.64 $0.59 $1.34 57.02 25.10 24.1 2.37 1.04 2.53 2.58 $13.30 $13.04 Average 35.87 19.58 2.13 1.42 14.01 13.55

GLPI Gaming and Leisure Properties, Inc $43.34 2.16 2.09 20.1 20.7 0.41 49.6 51.0 3.45 3.35 $12.56 $12.94

Implied Relative Value: P/E (EPS21) $ 77.30 P/E (EPS22) $ 41.02 PEG (EPS21) $ 1.86 PEG (EPS22) $ 1.21 P/FFO (2021) $ 48.32 P/FFO (2022) $ 45.40 Gaming and Leisure Properties, Inc Key Management Ratios

Fiscal Years Ending Dec. 31 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Liquidity Ratios: Current Ratio (Current Assets / Current Liabilities) 18.99 17.38 18.87 18.96 18.16 17.35 16.63 16.05 15.55 15.11 14.72 14.36 14.03 Quick Ratio (Current Assets-(Inventories + Prepayments)/Current Liabilities) 18.91 17.37 18.87 18.93 18.13 17.32 16.60 16.02 15.51 15.08 14.68 14.33 14.00 Cash Ratio ((Cash +Marketable Securities) / Current Liabilities) 0.07 0.07 1.18 0.35 (0.46) (1.27) (1.98) (2.56) (3.07) (3.51) (3.90) (4.25) (4.59)

Asset-Management Ratios: Asset Turnover (Net Sales / Average Total Assets) 0.13 0.14 0.13 0.13 0.13 0.14 0.15 0.15 0.15 0.16 0.16 0.16 0.16 Accounts Receivable Turnover (Net Sales / Average Accounts Recievable) ------Day Sales Outstanding (Accounts Recievable/(Net Sales / 365)) ------

Financial Leverage Ratios: Debt to Assets Ratio (Total Liabilities / Total Assets) 0.74 0.75 0.70 0.74 0.77 0.80 0.83 0.86 0.88 0.91 0.93 0.95 0.97 Debt to Equity Ratio (Total Liabilities / Total Shareholder's Equity) 2.79 3.07 2.38 2.86 3.36 4.07 5.00 6.14 7.66 9.73 12.80 17.89 28.59 Equity Ratio (Total Shareholder's Equity / Total Assets) 0.26 0.25 0.30 0.26 0.23 0.20 0.17 0.14 0.12 0.09 0.07 0.05 0.03 Interest Coverage Ratio (EBIT / Annual Interest Expense) (2.40) (2.38) (2.87) (3.77) (3.61) (3.75) (3.78) (3.66) (3.63) (3.55) (3.48) (3.38) (3.38)

Profitability Ratios: Return on Equity (Net Income / Average Shareholder's Equity) 14.37% 18.01% 21.30% 21.25% 24.04% 29.64% 36.20% 42.70% 52.00% 63.49% 79.84% 103.49% 152.23% Return on Assets (Net Income / Average Total Assets) 4.29% 4.60% 5.79% 5.88% 5.86% 6.31% 6.56% 6.52% 6.62% 6.60% 6.59% 6.47% 6.58% Gross Margin (Gross Profit / Net Sales) 92.69% 93.52% 95.08% 94.25% 94.25% 94.25% 94.25% 94.25% 94.25% 94.25% 94.25% 94.25% 94.25% Operating Margin (Operating Income / Net Sales) 56.25% 62.20% 70.18% 61.90% 61.54% 62.43% 62.74% 62.28% 62.22% 61.93% 61.67% 61.14% 61.20% Pretax Margin (Income before taxes / Revenue) 32.63% 34.30% 44.19% 46.09% 44.65% 45.56% 45.51% 44.25% 43.76% 42.87% 42.10% 40.91% 40.75%

Payout Policy Ratios: Dividend Payout Ratio (Dividend/EPS) 1.40 1.62 1.50 1.15 1.23 1.26 1.24 1.24 1.26 1.27 1.29 1.30 1.33 Total Payout Ratio ((Divs. + Repurchases)/NI) 1.62 1.51 0.46 1.23 1.26 1.24 1.24 1.26 1.27 1.29 1.30 1.33 1.33 EPS Ratio (Net Earnings / Number of Shares) 1.58 1.82 2.18 2.16 2.09 2.20 2.27 2.22 2.19 2.11 2.00 1.84 1.73 Gaming and Leisure Properties, Inc Present Value of Operating Lease Obligations In Thousands Fiscal Years Ending Dec. 31 2013 2014 2015 2016 2017 2018 2019 2020 Year 1 1013 1528 1565 8693 10735 15519 14071 11079 Year 2 314 1520 1540 8633 10743 15159 13766 11082 Year 3 302 1533 1538 8182 10705 15042 13659 11081 Year 4 316 1531 1096 7543 10691 15026 13638 11034 Year 5 334 1089 461 7552 10679 15005 13617 10984 Thereafter 44178 44320 43891 482942 546433 541135 644059 569957 Total Minimum Payments 46457.0 51521.0 50091.0 523545.0 599986.0 616886.0 712810.0 625217.0 Less: Cumulative Interest 36429.5 25292.4 33769.9 325615.2 339363.9 292331.4 388027.1 355881.4 PV of Minimum Payments 10027.5 26228.6 16321.1 197929.8 260622.1 324554.6 324782.9 269335.6

Implied Interest in Year 1 Payment #DIV/0! 351.9 920.4 572.7 6945.4 9145.2 11388.6 11396.6

Pre-Tax Cost of Debt 3.51% 3.51% 3.51% 3.51% 3.51% 3.51% 3.51% 3.51% Years Implied by Year 6 Payment 132.3 40.7 95.2 63.9 51.2 36.1 47.3 51.9 Expected Obligation in Year 6 & Beyond 334 1089 461 7552 10679 15005 13617 10984

Present Value of Lease Payments PV of Year 1 978.7 1476.2 1511.9 8398.3 10371.1 14992.9 13594.0 10703.4 PV of Year 2 293.1 1418.7 1437.4 8057.6 10027.0 14148.6 12848.5 10343.4 PV of Year 3 272.3 1382.3 1386.8 7377.8 9652.8 13563.5 12316.4 9991.8 PV of Year 4 275.3 1333.7 954.8 6571.0 9313.3 13089.7 11880.6 9612.1 PV of Year 5 281.1 916.5 388.0 6355.8 8987.5 12628.3 11460.2 9244.2 PV of 6 & beyond 7927.1 19701.2 10642.2 161169.3 212270.4 256131.6 262683.2 219440.6 Capitalized PV of Payments 10027.5 26228.6 16321.1 197929.8 260622.1 324554.6 324782.9 269335.6 Gaming and Leisure Properties, Inc Sensitivity Tables

Beta GLP Capital Revenue per Property Growth Rate 54.58 1.34 1.42 1.50 1.58 1.66 1.74 1.82 54.58 1.87% 1.97% 2.07% 2.17% 2.27% 2.37% 2.47% 3.66% 107.23 95.56 85.52 76.30 69.11 62.33 56.30 -4.03% 53.05 53.57 54.09 54.62 55.16 55.70 56.24 4% 96.48 85.80 76.58 68.11 61.48 55.23 49.67 -4.13% 53.03 53.55 54.08 54.61 55.14 55.68 56.23 4.06% 87.12 77.27 68.76 60.92 54.79 49.00 43.84 -4.23% 53.02 53.54 54.07 54.60 55.13 55.67 56.22 4.26% 78.89 69.76 61.86 54.58 48.88 43.49 38.68 -4.33% 53.01 53.53 54.05 54.58 55.12 55.66 56.21 ERP 4.46% 71.60 63.10 55.74 48.95 43.62 38.58 34.08 -4.43% 53.00 53.52 54.04 54.57 55.11 55.65 56.19 4.66% 65.10 57.16 50.27 43.91 38.91 34.19 29.97 -4.53% 52.98 53.50 54.03 54.56 55.09 55.64 56.18 Property Growth Property

4.86% 59.28 51.83 45.35 39.38 34.68 30.23 26.26 TRSProperties Rev per -4.63% 52.97 53.49 54.02 54.55 55.08 55.62 56.17

CV of NOPLAT WACC 54.58 2.94% 2.97% 3.00% 3.03% 3.06% 3.09% 3.12% 54.58 6.38% 6.43% 6.48% 6.53% 6.58% 6.63% 6.68% 1.35% 57.64 57.99 58.34 58.69 59.05 59.42 59.80 9.71% 59.00 57.88 56.81 55.78 54.78 53.81 52.88 1.42% 56.28 56.61 56.95 57.29 57.63 57.98 58.34 9.61% 58.58 57.48 56.41 55.39 54.39 53.44 52.51 1.49% 54.96 55.27 55.59 55.92 56.25 56.59 56.93 9.51% 58.16 57.07 56.01 54.99 54.00 53.05 52.14 1.56% 53.67 53.97 54.27 54.58 54.90 55.22 55.55 9.41% 57.74 56.65 55.60 54.58 53.61 52.66 51.75

1.63% 52.41 52.69 52.99 53.29 53.59 53.90 54.21 ROIC CV 9.31% 57.30 56.22 55.17 54.17 53.20 52.26 51.36

Risk Free Rate Free Risk 1.70% 51.18 51.45 51.73 52.02 52.31 52.60 52.90 9.21% 56.85 55.78 54.74 53.75 52.79 51.86 50.96 1.77% 49.98 50.24 50.51 50.79 51.06 51.35 51.63 9.11% 56.39 55.33 54.30 53.31 52.36 51.44 50.55

Real Estate Investments Percentage of Sales Variable K 54.58 595% 625% 655% 685% 715% 745% 775% 86% 69.55 64.57 59.59 54.61 49.63 44.65 39.67 81% 69.54 64.56 59.58 54.60 49.62 44.64 39.66 76% 69.53 64.55 59.57 54.59 49.61 44.63 39.65 71% 69.52 64.54 59.56 54.58 49.60 44.62 39.64 66% 69.51 64.53 59.55 54.57 49.60 44.62 39.64 VariableL DPR (%AFFO) DPR 61% 69.50 64.52 59.55 54.57 49.59 44.61 39.63 56% 69.49 64.52 59.54 54.56 49.58 44.60 39.62 Important Disclaimer

This report was created by students enrolled in the Security Analysis (6F:112) class at the University of Iowa. The report was originally created to offer an internal investment recommendation for the University of Iowa Krause Fund and its advisory board. The report also provides potential employers and other interested parties an example of the students’ skills, knowledge and abilities. Members of the Krause Fund are not registered investment advisors, brokers or officially licensed financial professionals. The investment advice contained in this report does not represent an offer or solicitation to buy or sell any of the securities mentioned. Unless otherwise noted, facts and figures included in this report are from publicly available sources. This report is not a complete compilation of data, and its accuracy is not guaranteed. From time to time, the University of Iowa, its faculty, staff, students, or the Krause Fund may hold a financial interest in the companies mentioned in this report.

Important disclosures appear on the last page of this report. 16