Gaming and Leisure Properties
Annual Report 2017

Plain-text annual report

Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K(Mark One) xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2017ORoTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission file number 001-36124Gaming and Leisure Properties, Inc.(Exact name of registrant as specified in its charter)Pennsylvania(State or other jurisdiction ofincorporation or organization) 46-2116489(I.R.S. EmployerIdentification No.)845 Berkshire Blvd., Suite 200Wyomissing, Pennsylvania(Address of principal executive offices) 19610(Zip Code)Registrant's telephone number, including area code: (610) 401-2900Securities registered pursuant to Section 12(b) of the Act:Title of each class Name of each exchange on which registeredCommon Stock, par value $.01 per share NASDAQSecurities registered pursuant to Section 12(g) of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No oIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No xIndicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit andpost such files). Yes x No oIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained,to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. xIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growthcompany. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:Large accelerated filer x Accelerated filer o Non-accelerated filer o (Do not check if asmaller reporting company) Smaller reporting company oEmerging growth company oIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section13(a) of the Exchange Act. oIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No xAs of June 30, 2017 (the last business day of the registrant's most recently completed second fiscal quarter), the aggregate market value of the voting common stock held bynon-affiliates of the registrant was approximately $7.6 billion. Such aggregate market value was computed by reference to the closing price of the common stock as reported on theNASDAQ Global Select Market on June 30, 2017.The number of shares of the registrant's common stock outstanding as of February 12, 2018 was 213,223,235.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant's definitive proxy statement for its 2018 annual meeting of shareholders (when it is filed) will be incorporated by reference into Part III of thisAnnual Report on Form 10-K.Table of ContentsIMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTSForward-looking statements in this document are subject to known and unknown risks, uncertainties and other factors that may cause actual results,performance or achievements of Gaming and Leisure Properties, Inc. ("GLPI") and subsidiaries (collectively, the "Company") to be materially different fromany future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include informationconcerning the Company's business strategy, plans, and goals and objectives.Forward-looking statements in this document include, but are not limited to, statements regarding our ability to grow our portfolio of gaming facilitiesand to secure additional avenues of growth beyond the gaming industry, and our expectations with respect to the proposed acquisition of PinnacleEntertainment, Inc. (“Pinnacle”) by Penn National Gaming, Inc. (“Penn”) and the impact on our business and results of operations. In addition, statementspreceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans," "may increase,""may fluctuate," and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward-looking innature and not historical facts. You should understand that the following important factors could affect future results and could cause actual results to differmaterially from those expressed in such forward-looking statements:•the availability of and the ability to identify suitable and attractive acquisition and development opportunities and the ability to acquire and leasethe respective properties on favorable terms;•the degree and nature of our competition;•the ultimate timing and outcome (including the possibility that the proposed transaction may not be completed or that completion may be undulydelayed) of the proposed merger transaction between Penn and Pinnacle;•the ability to receive, or delays in obtaining, the regulatory approvals required to own and/or operate our properties, or other delays or impedimentsto completing our planned acquisitions or projects;•our ability to maintain our status as a real estate investment trust ("REIT"), given the highly technical and complex Internal Revenue Code (the"Code") provisions for which only limited judicial and administrative authorities exist, where even a technical or inadvertent violation couldjeopardize REIT qualification and where requirements may depend in part on the actions of third parties over which the Company has no control oronly limited influence;•the satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis in orderfor the Company to maintain its REIT status;•the ability and willingness of our tenants, operators and other third parties to meet and/or perform their obligations under their respective contractualarrangements with us, including, in some cases, their obligations to indemnify, defend and hold us harmless from and against various claims,litigation and liabilities;•the ability of our tenants and operators to maintain the financial strength and liquidity necessary to satisfy their respective obligations and liabilitiesto third parties, including without limitation obligations under their existing credit facilities and other indebtedness;•the ability of our tenants and operators to comply with laws, rules and regulations in the operation of our properties, to deliver high quality services,to attract and retain qualified personnel and to attract customers;•the ability to generate sufficient cash flows to service our outstanding indebtedness;•the access to debt and equity capital markets;•adverse changes in our credit rating;•fluctuating interest rates;•the impact of global or regional economic conditions;•the availability of qualified personnel and our ability to retain our key management personnel;1Table of Contents•GLPI's duty to indemnify Penn in certain circumstances if the spin-off transaction described in Part 1 of this Annual Report on Form 10-K fails to betax-free;•changes in the United States tax law and other state, federal or local laws, whether or not specific to real estate, real estate investment trusts or to thegaming, lodging or hospitality industries;•changes in accounting standards;•the impact of weather events or conditions, natural disasters, acts of terrorism and other international hostilities, war or political instability;•other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estateinvestments; and•additional factors discussed in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Resultsof Operations" in this report.Certain of these factors and other factors, risks and uncertainties are discussed in the "Risk Factors" section of this report. Other unknown orunpredictable factors may also cause actual results to differ materially from those projected by the forward-looking statements. Most of these factors aredifficult to anticipate and are generally beyond the control of the Company.You should consider the areas of risk described above, as well as those set forth under the heading "Risk Factors," in connection with considering anyforward-looking statements that may be made by the Company generally. The Company does not undertake any obligation to release publicly any revisionsto any forward-looking statements, to report events or to report the occurrence of unanticipated events unless required to do so by law.2Table of ContentsTABLE OF CONTENTS PagePART I ITEM 1.BUSINESS4ITEM 1A.RISK FACTORS22ITEM 1B.UNRESOLVED STAFF COMMENTS35ITEM 2.PROPERTIES36ITEM 3.LEGAL PROCEEDINGS36ITEM 4.MINE SAFETY DISCLOSURES36PART II ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUERPURCHASES OF EQUITY SECURITIES37ITEM 6.SELECTED FINANCIAL DATA38ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS39ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK58ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA59ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE108ITEM 9A.CONTROLS AND PROCEDURES108ITEM 9B.OTHER INFORMATION110PART III ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE111ITEM 11.EXECUTIVE COMPENSATION111ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSTOCKHOLDERS MATTERS111ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE111ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES111PART IV ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES112ITEM 16.FORM 10-K SUMMARY112 EXHIBIT INDEX113 SIGNATURES117 3Table of Contents This Annual Report on Form 10-K includes information regarding Penn National Gaming, Inc., a Pennsylvania corporation, and its subsidiaries(collectively "Penn") and Pinnacle Entertainment, Inc., a Delaware corporation, and its subsidiaries (collectively "Pinnacle"). Penn and Pinnacle aresubject to the reporting requirements of the U.S. Securities and Exchange Commission ("SEC") and are required to file with the SEC annual reportscontaining audited financial information and quarterly reports containing unaudited financial information. The information related to Penn and Pinnacleprovided in this Annual Report on Form 10-K has been derived from Penn and Pinnacle's respective public filings. We have not independently verified thisinformation. We have no reason to believe that this information derived from Penn and Pinnacle's public filings is inaccurate in any material respect thathas not been disclosed publicly. We are providing this data for information purposes only. Penn and Pinnacle's filings with the SEC can be found atwww.sec.gov.In this Annual Report on Form 10-K, the terms "we," "us," "our," the "Company" and "GLPI" refer to Gaming and Leisure Properties, Inc. andsubsidiaries, unless the context indicates otherwise.PART IITEM 1. BUSINESSOverviewGLPI is a self-administered and self-managed Pennsylvania REIT. The Company was formed from the 2013 tax-free spin-off of the real estate assets ofPenn and was incorporated in Pennsylvania on February 13, 2013, as a wholly-owned subsidiary of Penn. On November 1, 2013, Penn contributed to GLPI,through a series of internal corporate restructurings, substantially all of the assets and liabilities associated with Penn's real property interests and real estatedevelopment business, as well as the assets and liabilities of Louisiana Casino Cruises, Inc. (d/b/a Hollywood Casino Baton Rouge) and Penn CecilMaryland, Inc. (d/b/a Hollywood Casino Perryville), which are referred to as the "TRS Properties," and then spun-off GLPI to holders of Penn's common andpreferred stock in a tax-free distribution (the "Spin-Off"). The assets and liabilities of GLPI were recorded at their respective historical carrying values at thetime of the Spin-Off in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 505-60, "Spinoffs and Reverse Spinoffs." GLPI owns and operates the TRS Properties through its indirect wholly-owned subsidiary, GLP Holdings, Inc.The Company elected on its United States ("U.S.") federal income tax return for its taxable year that began on January 1, 2014 to be treated as a REITand the Company, together with GLP Holdings, Inc., jointly elected to treat each of GLP Holdings, Inc., Louisiana Casino Cruises, Inc. and Penn CecilMaryland, Inc. as a "taxable REIT subsidiary" (a "TRS") effective on the first day of the first taxable year of GLPI as a REIT. In connection with the Spin-Off,Penn allocated its accumulated earnings and profits (as determined for U.S. federal income tax purposes) for periods prior to the consummation of the Spin-Off between Penn and GLPI. In connection with its election to be taxed as a REIT for U.S. federal income tax purposes for the year ended December 31, 2014,GLPI declared a special dividend to its shareholders to distribute any accumulated earnings and profits relating to the real property assets and attributable toany pre-REIT years, including any earnings and profits allocated to GLPI in connection with the Spin-Off, to comply with certain REIT qualificationrequirements (the "Purging Distribution").As a result of the Spin-Off, GLPI owns substantially all of Penn's former real property assets and leases back these assets to Penn for use by itssubsidiaries pursuant to a unitary master lease (the "Penn Master Lease"). The Penn Master Lease is a triple-net operating lease with an initial term of 15 years(expiring October 31, 2028) with no purchase option, followed by four 5-year renewal options (exercisable by Penn) on the same terms and conditions. InApril 2016, the Company acquired substantially all of the real estate assets of Pinnacle Entertainment, Inc. ("Pinnacle") for approximately $4.8 billion. GLPIleases these assets back to Pinnacle, under a unitary triple-net lease with an initial term of 10 years (expiring April 30, 2026) with no purchase option,followed by five 5-year renewal options (exercisable by Pinnacle) on the same terms and conditions (the "Pinnacle Master Lease" and together with the PennMaster Lease, the "Master Leases"). See Note 4 to the Consolidated Financial Statements for further details surrounding the Pinnacle acquisition.GLPI's primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net leasearrangements. Triple-net leases are leases in which the lessee pays rent to the lessor, as well as all taxes, insurance, and maintenance expenses that arise fromthe use of the property. As of December 31, 2017, GLPI’s portfolio consisted of 38 gaming and related facilities, including the TRS Properties, the realproperty associated with 20 gaming and related facilities operated by Penn, the real property associated with 15 gaming and related facilities operated byPinnacle and the real property associated with the Casino Queen in East St. Louis, Illinois. These facilities are geographically diversified across 14 states andcontain approximately 15.2 million of rentable square feet. As of December 31, 2017, the Company's properties were 100% occupied.4Table of ContentsWe expect to grow our portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators under prudent terms. Forexample, on December 17, 2017, the Company entered into agreements to purchase two additional properties, Plainridge Park Casino and Belterra ParkGaming & Entertainment Center, from Penn and Pinnacle, respectively. We will acquire these properties in connection with the proposed acquisition ofPinnacle by Penn pursuant to a definitive agreement and plan of merger between them, also dated December 17, 2017 (the "Merger"). Subject to andconcurrently with the completion of the Merger, we have agreed to, among other things, amend our master lease with Pinnacle to allow for the sale byPinnacle of the operating assets at Ameristar Casino Hotel Kansas City, Ameristar Casino Resort Spa St. Charles and Belterra Casino Resort to Boyd GamingCorporation (“Boyd”) and to enter into a new master lease agreement with Boyd on terms similar to the Company’s existing leases. The transaction isexpected to add additional annual rental revenue of approximately $46 million upon closing. The transaction which is subject to regulatory approval isexpected to close in the second half of 2018.Additionally, we believe we have the ability to leverage the expertise our management team has developed over the years to secure additional avenuesfor growth beyond the gaming industry.Tax StatusWe elected on our 2014 U.S. federal income tax return to be treated as a REIT and intend to continue to be organized and to operate in a manner thatwill permit us to qualify as a REIT. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement todistribute at least 90% of our annual REIT taxable income to shareholders. As a REIT, we generally will not be subject to federal income tax on income thatwe distribute as dividends to our shareholders. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax, including anyapplicable alternative minimum tax, on our taxable income at regular corporate income tax rates, and dividends paid to our shareholders would not bedeductible by us in computing taxable income. Any resulting corporate liability could be substantial and could materially and adversely affect our netincome and net cash available for distribution to shareholders. Unless we were entitled to relief under certain provisions of the Code, we also would bedisqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify to be taxed as a REIT.Our TRS Properties are able to engage in activities resulting in income that is not qualifying income for a REIT. As a result, certain activities of theCompany which occur within our TRS Properties are subject to federal and state income taxes.TenantsAs of December 31, 2017, 20 of the Company’s real estate investment properties were leased to a subsidiary of Penn under the Penn Master Leaseand 14 of the Company's real estate investment properties were leased to a subsidiary of Pinnacle under the Pinnacle Master Lease. Penn and Pinnacle areboth leading, diversified, multi-jurisdictional owners and managers of gaming and pari-mutuel properties and established gaming providers with strongfinancial performance. The obligations under the Penn and Pinnacle Master Leases are guaranteed by Penn and Pinnacle, respectively, and by most of Penn'sand Pinnacle's subsidiaries that occupy and operate the facilities leased under the respective Master Leases. Additionally, the real estate assets of theMeadows Racetrack and Casino (the "Meadows") are leased to Pinnacle under a single property triple-net operating lease separate from the Pinnacle MasterLease (the "Meadows Lease"). GLPI also leases the Casino Queen property back to its operator on a triple-net basis on terms similar to those in the MasterLeases (the "Casino Queen Lease").The rent structure under the Penn Master Lease includes a fixed component, a portion of which is subject to an annual 2% escalator if certain rentcoverage ratio thresholds are met, and a component that is based on the performance of the facilities, which is adjusted, subject to certain floors (i) every fiveyears to an amount equal to 4% of the average net revenues of all facilities under the Penn Master Lease (other than Hollywood Casino Columbus andHollywood Casino Toledo) during the preceding five years, and (ii) monthly by an amount equal to 20% of the net revenues of Hollywood Casino Columbusand Hollywood Casino Toledo during the preceding month.Similar to the Penn Master Lease, the Pinnacle Master Lease also includes a fixed component, a portion of which is subject to an annual 2%escalator if certain rent coverage ratio thresholds are met and a component that is based on the performance of the facilities, which is adjusted, subject tocertain floors, every two years to an amount equal to 4% of the average annual net revenues of all facilities under the Pinnacle Master Lease during thepreceding two years. The Meadows Lease contains a fixed component, subject to annual escalators, and a component that is based on the performance of the facility,which is reset every two years to a fixed amount determined by multiplying (i) 4% by (ii) the average annual net revenues of the facility for the trailing twoyear period. The Meadows Lease contains an annual escalator provision for up to 5% of the base rent, if certain rent coverage ratio thresholds are met, whichremains at 5% until the earlier of ten years or the year in which total rent is $31 million, at which point the escalator will be reduced to 2% annuallythereafter.5Table of ContentsThe rent structure under the Casino Queen Lease also includes a fixed component, a portion of which is subject to an annual 2% escalator if certainrent coverage ratio thresholds are met, and a component that is based on the performance of the facility, which is reset every five years to a fixed amountequal to the greater of (i) the annual amount of non-fixed rent applicable for the lease year immediately preceding such rent reset year and (ii) an amountequal to 4% of the average annual net revenues of the facility for the trailing five year period.In addition to rent, as triple-net lessees, all of the Company's tenants are required to pay the following executory costs: (1) all facility maintenance,(2) all insurance required in connection with the leased properties and the business conducted on the leased properties, including coverage of the landlord'sinterests, (3) taxes levied on or with respect to the leased properties, (other than taxes on the income of the lessor) and (4) all utilities and other servicesnecessary or appropriate for the leased properties and the business conducted on the leased properties.Our tenants do not have the ability to terminate their obligations under our long-term tenant leases prior to their expiration without the Company'sconsent. If our long-term tenant leases are terminated prior to their expiration other than with our consent, our tenants may be liable for damages and incurcharges such as continued payment of rent through the end of the lease term and maintenance costs for the leased property. All of our tenant leases contain alimited number of renewal options which may be exercised at our tenants' option. Both the Penn Master Lease and Casino Queen Lease have an initial term of15 years with no purchase option, followed by four 5 year renewal options (exercisable by Penn or Casino Queen, respectively) on the same terms andconditions, while the Pinnacle Master Lease has an initial term of 10 years with no purchase option, followed by five 5-year renewal options (exercisable byPinnacle) on the same terms and conditions. The Meadows Lease has an initial term of 10 years with no purchase option and the option to renew for threesuccessive 5-year terms and one 4-year term, (exercisable by Pinnacle) on the same terms and conditions.6Table of ContentsThe following table summarizes certain features of our properties as of December 31, 2017: LocationType of Facility Approx.PropertySquareFootage (1) OwnedAcreage LeasedAcreage (2) HotelRoomsTenants Hollywood Casino LawrenceburgLawrenceburg, INDockside gaming 634,000 73.1 32.1 295Hollywood Casino AuroraAurora, ILDockside gaming 222,189 0.4 1.7 —Hollywood Casino JolietJoliet, ILDockside gaming 322,446 276.4 — 100Argosy Casino AltonAlton, ILDockside gaming 124,569 0.2 3.6 —Hollywood Casino ToledoToledo, OHLand-based gaming 285,335 43.8 — —Hollywood Casino ColumbusColumbus, OHLand-based gaming 354,075 116.2 — —Hollywood Casino at Charles Town RacesCharles Town, WVLand-based gaming/Thoroughbred racing 511,249 298.6 — 153Hollywood Casino at Penn National RaceCourseGrantville, PALand-based gaming/Thoroughbred racing 451,758 573.7 — —M ResortHenderson, NVLand-based gaming 910,173 83.5 — 390Hollywood Casino BangorBangor, MELand-based gaming/Harness racing 257,085 6.4 37.9 152Zia Park Casino (3)Hobbs, NMLand-based gaming/Thoroughbred racing 109,067 317.4 — —Hollywood Casino Gulf CoastBay St. Louis, MSLand-based gaming 425,920 578.7 — 291Argosy Casino RiversideRiverside, MODockside gaming 450,397 37.9 — 258Hollywood Casino TunicaTunica, MSDockside gaming 315,831 — 67.7 494Boomtown BiloxiBiloxi, MSDockside gaming 134,800 1.5 1.0 —Hollywood Casino St. LouisMaryland Heights, MOLand-based gaming 645,270 247.8 — 502Hollywood Gaming at Dayton RacewayDayton, OHLand-based gaming/Standardbred racing 191,037 119.7 — —Hollywood Gaming at Mahoning ValleyRace CourseYoungstown, OHLand-based gaming/Thoroughbred racing 177,448 193.4 — —Resorts Casino TunicaTunica, MSDockside gaming 319,823 — 86.6 2011st Jackpot Casino (formerly known asBally's Casino Tunica)Tunica, MSDockside gaming 78,941 52.9 93.8 —Casino QueenEast St. Louis, ILLand-based gaming 330,502 67.2 — 157Ameristar Black HawkBlack Hawk, COLand-based gaming 775,744 104.1 — 535Ameristar East ChicagoEast Chicago, INDockside gaming 509,867 — 21.6 288Belterra Casino Resort (3)Florence, INDockside gaming 733,751 167.1 148.5 608Ameristar Council Bluffs (3)Council Bluffs, IADockside gaming 312,047 36.2 22.6 160L'Auberge Baton RougeBaton Rouge, LADockside gaming 436,461 99.1 — 205Boomtown Bossier CityBossier City, LADockside gaming 281,747 21.8 — 187L'Auberge Lake CharlesLake Charles, LADockside gaming 1,014,497 — 234.5 995Boomtown New OrleansNew Orleans, LADockside gaming 278,227 53.6 — 150Ameristar VicksburgVicksburg, MSDockside gaming 298,006 74.1 — 149Ameristar Kansas CityKansas City, MODockside gaming 763,939 224.5 31.4 184Ameristar St. CharlesSt. Charles, MODockside gaming 1,272,938 241.2 — 397River City Casino and HotelSt. Louis, MODockside gaming 431,226 — 83.4 200Jackpot Properties (4)Jackpot, NVLand-based gaming 419,800 79.5 — 416The Meadows Racetrack and Casino (3)Washington, PALand-based gaming 417,921 155.5 — — 15,198,086 4,345.5 866.4 7,467TRS Properties Hollywood Casino Baton RougeBaton Rouge, LADockside gaming 120,517 24.1 — —Hollywood Casino PerryvillePerryville, MDLand-based gaming 97,961 36.4 — — 218,478 60.5 — —Total 15,416,564 4,406.0 866.4 7,467 (1) Square footage includes air conditioned space and excludes parking garages and barns.7Table of Contents(2) Leased acreage reflects land subject to leases with third parties and includes land on which certain of the current facilities and ancillary supportingstructures are located as well as parking lots and access rights.(3) These properties include hotels not owned by the Company. Square footage and rooms associated with properties not owned by GLPI are excludedfrom the table above.(4)Encompasses two gaming properties in Jackpot, Nevada, Cactus Pete’s and The Horseshu.Hollywood Casino LawrenceburgWe own 73.1 acres and lease 32.1 acres in Lawrenceburg, Indiana, a portion of which serves as the dockside embarkation for the gaming vessel, andincludes a Hollywood-themed casino riverboat, an entertainment pavilion, a 295-room hotel, two parking garages and an adjacent surface lot, with the otherportion used for remote parking.Hollywood Casino AuroraWe own a dockside barge structure and land-based pavilion in Aurora, Illinois. We own the land, which is approximately 0.4 acres, on which thepavilion is located. The property also includes two parking garages under capital lease agreements and rights to a pedestrian walkway bridge under anoperating lease, together comprising 1.7 acres.Hollywood Casino JolietWe own 276.4 acres in Joliet, Illinois, which includes a barge-based casino, land-based pavilion, a 100-room hotel, a parking garage, surface parkingareas and a recreational vehicle park.Argosy Casino AltonWe lease 3.6 acres in Alton, Illinois, a portion of which serves as the dockside boarding for the Alton Belle II, a riverboat casino. The dockside facilityincludes an entertainment pavilion and office space, as well as surface parking areas. In addition, we own an office building property consisting of 0.2 acres.Hollywood Casino ToledoWe own a 43.8 acre site in Toledo, Ohio, where Hollywood Casino Toledo is located. The property includes the casino as well as structured and surfaceparking.Hollywood Casino ColumbusWe own 116.2 acres of land in Columbus, Ohio, where Hollywood Casino Columbus is located. The property includes the casino as well as structuredand surface parking.Hollywood Casino at Charles Town RacesWe own 298.6 acres on various parcels in Charles Town and Ranson, West Virginia of which 155 acres comprise Hollywood Casino at Charles TownRaces. The facility includes a 153-room hotel and a 3/4-mile all-weather lighted thoroughbred racetrack, a training track, two parking garages, an employeeparking lot, an enclosed grandstand/clubhouse and housing facilities for over 1,300 horses.Hollywood Casino at Penn National Race CourseWe own 573.7 acres in Grantville, Pennsylvania, where Penn National Race Course is located on 181 acres. The facility includes a one-mile all-weatherlighted thoroughbred racetrack and a 7/8-mile turf track, a parking garage and surface parking spaces. The property also includes approximately 393 acressurrounding the Penn National Race Course that are available for future expansion or development.M ResortWe own 83.5 acres on the southeast corner of Las Vegas Boulevard and St. Rose Parkway in Henderson, Nevada, where the M Resort is located. The MResort property includes a 390-room hotel and a parking facility. In addition, our tenant has rights to 4.0 acres of land at the casino site.8Table of ContentsHollywood Casino BangorWe lease 2.5 acres in Bangor, Maine on which Hollywood Casino Bangor is located. We also own 6.4 acres adjacent to the casino on which a 152-roomhotel and a four-story parking garage are located. In addition, we lease 35.4 acres at and around historic Bass Park, which is adjacent to the facility, andincludes a one-half mile standardbred racetrack, a grandstand with over 12,000 square feet and seating for 3,500 patrons and parking.Zia Park CasinoWe own 317.4 acres in Hobbs, New Mexico, where Zia Park Casino is located. The property also includes a one-mile quarter thoroughbred racetrack.Hollywood Casino Gulf CoastWe own 578.7 acres in the city of Bay St. Louis, Mississippi, including a 20-slip marina. The property includes a land-based casino, 18-hole golfcourse, a 291-room hotel, a recreational vehicle park and other facilities.Argosy Casino RiversideWe own 37.9 acres in Riverside, Missouri, which includes a barge-based casino, a 258-room luxury hotel, an entertainment/banquet facility and aparking garage.Hollywood Casino TunicaWe lease 67.7 acres of land in Tunica, Mississippi. The property includes a single-level casino, a 494-room hotel, surface parking and other land-basedfacilities.Boomtown BiloxiWe lease 1.0 acre of land mostly used for parking and a welcome center and own an additional 1.5 acres in Biloxi, Mississippi. In addition, our tenanthas rights to 18.5 acres of land, most of which is utilized for the gaming location and 4.5 acres of submerged tidelands at the casino site.Hollywood Casino St. LouisWe own 247.8 acres along the Missouri River in Maryland Heights, Missouri, which includes a 502-room hotel and structure and surface parking.Hollywood Gaming at Dayton RacewayWe own 119.7 acres in Dayton, Ohio, where Penn opened Hollywood Gaming at Dayton Raceway on August 28, 2014. The property includes a land-based casino, a 5/8-mile all-weather standardbred racetrack and surface parking.Hollywood Gaming at Mahoning Valley Race CourseWe own 193.4 acres in Youngstown, Ohio, where Penn opened Hollywood Gaming at Mahoning Valley Race Course on September 17, 2014. Theproperty includes a land-based casino, a one-mile thoroughbred racetrack and surface parking.Resorts Casino TunicaWe lease 86.6 acres in Tunica, Mississippi, where the Resorts Casino Tunica is located. The property is located along the Mississippi River andincludes a dockside gaming facility, surface parking, a 201-room hotel and other land-based facilities.1st Jackpot Casino (formerly known as Bally's Casino Tunica)We own 52.9 acres of wetlands and lease an additional 93.8 acres in Tunica, Mississippi located approximately 30 miles from downtown Memphis,Tennessee. The property is located along the Mississippi River and includes a dockside gaming facility, surface parking and other land-based facilities.Casino QueenWe own 67.2 acres in East St. Louis, Illinois, which includes a 157-room hotel, a recreational vehicle park and surface parking areas.9Table of ContentsAmeristar Black HawkWe own 104.1 acres in Black Hawk, Colorado which includes a land based casino and a 535 room hotel. The casino property sits on approximately6 acres and the remaining 98 acres which are located across the street from the casino are used mainly for overflow parking, administrative offices and awarehouse.Ameristar East ChicagoWe lease 21.6 acres in East Chicago, Indiana located approximately 25 miles from downtown Chicago, Illinois. The property includes a docksideriverboat gaming facility and a 288 room hotel.Belterra Casino ResortWe own 167.1 acres and lease an additional 148.5 acres in Florence, Indiana. The property is located along the Ohio River and includes a docksideriverboat gaming facility and a 608 room hotel.Ameristar Council BluffsWe own 36.2 acres and lease an additional 22.6 acres in Council Bluffs, Iowa. The property is located across the Missouri River from Omaha,Nebraska. The property also includes a 160 room hotel.L’ Auberge Baton RougeWe own 99.1 acres in Baton Rouge, Louisiana. The property includes a dockside riverboat gaming facility and a 205 room hotel and is locatedapproximately 10 miles south of downtown Baton Rouge.Boomtown Bossier CityWe own 21.8 acres on the banks of the Red River in Bossier City, Louisiana. The property features a 187 room hotel adjoining a dockside riverboatcasino.L’Auberge Lake CharlesWe lease 234.5 acres in Lake Charles, Louisiana. The property includes a dockside riverboat gaming facility and a 995 room hotel and is one of theclosest full-scale casino-hotel facilities to Houston, Texas.Boomtown New OrleansWe own 53.6 acres in Harvey, Louisiana. The property includes a dockside riverboat casino and a 150 room hotel.Ameristar VicksburgWe own 74.1 acres in Vicksburg, Mississippi. The property includes a dockside riverboat casino and a 149 room hotel. Also located on the propertyis a recreational vehicle park and buildings which are used for warehousing and support services.Ameristar Kansas CityWe own 224.5 acres in Kansas City, Missouri, along the north bank of the Missouri River and lease an additional 31.4 adjacent acres. The propertyincludes a dockside gaming facility and a 184 room hotel.Ameristar St. CharlesWe own 241.2 acres in St. Charles, Missouri, along the west bank of the Missouri River. The property includes a dockside gaming facility and a 397room hotel.River City Casino and HotelWe lease 83.4 acres in St. Louis County Missouri approximately 12 miles south of downtown St. Louis. The property includes a dockside gamingfacility and a 200 room hotel.10Table of ContentsJackpot PropertiesWe own 79.5 acres in Jackpot, Nevada, encompassing Cactus Pete’s and The Horseshu. In addition to these two land-based casinos, the propertyincludes a 416 room hotel and a recreational vehicle park. These two properties sit directly across from each other with Highway 93 separating them.The Meadows Racetrack and CasinoWe own 155.5 acres in Washington, Pennsylvania. The property includes a land based casino, an off-track wagering facility, a 24-lane bowling alleyand a state-of-the-art 5/8- mile harness track with a 500-seat grandstand. TRS PropertiesHollywood Casino Baton RougeHollywood Casino Baton Rouge is a dockside riverboat gaming facility operating in Baton Rouge, Louisiana. The riverboat features approximately28,000 square feet of gaming space with 923 gaming machines and 12 table games. The facility also includes a two-story, 58,000 square foot docksidebuilding featuring a variety of amenities, including a grill, a 268-seat buffet, a deli, a premium players' lounge, an event venue, a lobby bar, a public atrium,two meeting rooms and 1,490 parking spaces.Hollywood Casino PerryvilleHollywood Casino Perryville is located directly off Interstate 95 in Cecil County, Maryland just 35 miles northeast of Baltimore and 70 miles fromWashington, D.C. Hollywood Casino Perryville is a Hollywood-themed facility which offers 34,329 square feet of gaming space with 822 slot machines, 14table games, 8 poker tables and a simulcast race book. The facility also offers several third-party operated food and beverage options, including a bar andgrill, a casino bar, a gift shop and 1,600 parking spaces with valet and self-parking.CompetitionWe compete for additional real property investments with other REITs, investment companies, private equity and hedge fund investors, sovereignfunds, lenders, gaming companies and other investors. Some of our competitors are significantly larger and have greater financial resources and lower costs ofcapital than we have. Furthermore, in April 2016, MGM Resorts International ("MGM") formed MGM Growth Properties, a separate publicly traded REIT,holding a substantial portion of the real estate assets associated with MGM's operations. Additionally, in October 2017, Caesars Entertainment Corporationemerged from bankruptcy and completed the spin-off of substantially all of its real estate assets to VICI Properties, a separate publicly traded REIT. Increasedcompetition will make it more challenging to identify and successfully capitalize on acquisition opportunities that meet our investment objectives.In addition, revenues from our gaming properties are dependent on the ability of our gaming tenants and operators to compete with other gamingoperators. The gaming industry is characterized by an increasingly high degree of competition among a large number of participants, including riverboatcasinos, dockside casinos, land-based casinos, video lottery, sweepstakes and poker machines not located in casinos, Native American gaming, emergingvarieties of Internet gaming and other forms of gaming in the U.S. In a broader sense, our gaming tenants and operators face competition from all manner ofleisure and entertainment activities, including: shopping, athletic events, television and movies, concerts and travel. Legalized gaming is currently permittedin various forms throughout the U.S., in several Canadian provinces and on various lands taken into trust for the benefit of certain Native Americans in theU.S. and Canada. Other jurisdictions, including states adjacent to states in which our gaming tenants and operators are located have legalized, and willexpand gaming in the near future. In addition, established gaming jurisdictions could award additional gaming licenses or permit the expansion or relocationof existing gaming operations. New, relocated or expanded operations by other persons will increase competition for our gaming tenants and operators andcould have a material adverse impact on our gaming tenants and operators and us as landlord. Finally, the imposition of smoking bans and/or higher gamingtax rates have a significant impact on our gaming tenants' and operators' ability to compete with facilities in nearby jurisdictions.SegmentsConsistent with how our Chief Operating Decision Maker (as such term is defined in ASC 280 "Segment Reporting") reviews and assesses our financialperformance, we have two reportable segments, GLP Capital, L.P. (a wholly-owned subsidiary of GLPI through which GLPI owns substantially all of its realestate assets) ("GLP Capital") and the TRS Properties. The GLP Capital reportable segment consists of the leased real property and represents the majority ofour business. The TRS Properties reportable segment consists of Hollywood Casino Perryville and Hollywood Casino Baton Rouge. See "Item 7—11Table of ContentsManagement's Discussion and Analysis of Financial Condition and Results of Operations" and "Item 8—Financial Statements and Supplementary Data—Note 15—Segment Information" for further information with respect to the Company's segments.Executive Officers of the CompanyNameAge PositionPeter M. Carlino71 Chairman of the Board and Chief Executive OfficerWilliam J. Clifford60 Chief Financial Officer and TreasurerSteven T. Snyder57 Senior Vice President of Corporate DevelopmentBrandon J. Moore43 Senior Vice President, General Counsel and SecretaryDesiree A. Burke52 Senior Vice President and Chief Accounting OfficerPeter M. Carlino. Mr. Carlino is Chairman of our Board of Directors and Chief Executive Officer. Mr. Carlino joined the Company in connectionwith the Spin-Off on November 1, 2013. Prior to the Spin-Off, Mr. Carlino served as Penn's founder and Chief Executive Officer. He continues as Penn's non-executive Chairman of the Board of Directors. Since 1976, Mr. Carlino has been President of Carlino Capital Management Corp. (formerly known as CarlinoFinancial Corporation), a holding company that owns and operates various Carlino family investments.William J. Clifford. Mr. Clifford is our Chief Financial Officer and Treasurer. Mr. Clifford joined the Company in connection with the Spin-Off onNovember 1, 2013. Prior to the Spin-Off, Mr. Clifford served as Penn's Senior Vice President-Finance and Chief Financial Officer since October 2001. FromMarch 1997 to July 2001, Mr. Clifford served as the Chief Financial Officer and Senior Vice President of Finance with Sun International Resorts, Inc.,Paradise Island, Bahamas. From November 1993 to February 1997, Mr. Clifford was Financial, Hotel and Operations Controller for Treasure Island Hotel andCasino in Las Vegas. From May 1989 to November 1993, Mr. Clifford was Controller for Golden Nugget Hotel and Casino, Las Vegas. Prior to May 1989,Mr. Clifford held the positions of Controller for the Dunes Hotel and Casino, Las Vegas, Property Operations Analyst with Aladdin Hotel and Casino, LasVegas, Casino Administrator with Las Vegas Hilton, Las Vegas, Senior Internal Auditor with Del Webb, Las Vegas, and Agent, Audit Division, of the NevadaGaming Control Board, Las Vegas and Reno.Steven T. Snyder. Mr. Snyder is our Senior Vice President of Corporate Development. Mr. Snyder joined the Company in connection with the Spin-Off on November 1, 2013. Prior to the Spin-Off, he served as Penn's Senior Vice President of Corporate Development since 2003 and was responsible foridentifying and conducting internal and industry analysis of potential acquisitions, partnerships and other opportunities. He joined Penn as Vice President ofCorporate Development in May 1998 and held that position until his appointment to Senior Vice President in 2003. Prior to joining Penn, Mr. Snyder was apartner with Hamilton Partners, Ltd., as well as Managing Director of Municipal and Corporate Investment Banking for Meridian Capital Markets. Mr. Snyderbegan his career in finance at Butcher & Singer, where he served as First Vice President of Public Finance.Brandon J. Moore. Mr. Moore is our Senior Vice President, General Counsel and Secretary. Mr. Moore joined the Company in January 2014.Previously, he served as Penn's Vice President, Senior Corporate Counsel since March 2010 where he was a member of the legal team responsible for a varietyof transactional, regulatory and general legal matters. Prior to joining Penn, Mr. Moore was with Ballard Spahr LLP, where he provided advanced legalcounsel to clients on matters including merger and acquisition transactions, debt and equity financings, and various other matters.Desiree A. Burke. Ms. Burke joined the Company in April 2014 as our Senior Vice President and Chief Accounting Officer. Previously, Ms. Burkeserved as Penn's Vice President and Chief Accounting Officer since November 2009. Additionally, she served as Penn's Vice President and CorporateController from November 2005 to October 2009. Prior to her time at Penn National Gaming, Inc., Ms. Burke was the Executive Vice President/Director ofFinancial Reporting and Control for MBNA America Bank, N.A. She joined MBNA in 1994 and held positions of ascending responsibility in the financedepartment during her tenure. Ms. Burke is a CPA.Tax ConsiderationsWe elected to be treated as a REIT on our 2014 U.S. federal income tax return and we, together with an indirect wholly-owned subsidiary of theCompany, GLP Holdings, Inc., jointly elected to treat each of GLP Holdings, Inc., Louisiana Casino Cruises, Inc. and Penn Cecil Maryland, Inc. as a "taxableREIT subsidiary" effective on the first day of the first taxable year of GLPI as a REIT. We intend to continue to be organized and to operate in a manner thatwill permit us to qualify as a REIT. Qualification and taxation as a REIT depends on our ability to meet on a continuing basis, through actual operatingresults, distribution levels, and diversity of stock ownership, various qualification requirements imposed upon REITs by the Code. Our12Table of Contentsability to qualify to be taxed as a REIT also requires that we satisfy certain tests, some of which depend upon the fair market values of assets that we owndirectly or indirectly. The material qualification requirements are summarized below. Such values may not be susceptible to a precise determination.Accordingly, no assurance can be given that the actual results of our operations for any taxable year will satisfy such requirements for qualification andtaxation as a REIT. Additionally, while we intend to operate so that we continue to qualify to be taxed as a REIT, no assurance can be given that the InternalRevenue Service (the "IRS") will not challenge our qualification, or that we will be able to operate in accordance with the REIT requirements in the future.Taxation of REITs in GeneralAs a REIT, generally we will be entitled to a deduction for dividends that we pay and therefore will not be subject to U.S. federal corporate income taxon our net REIT taxable income that is currently distributed to our shareholders. This treatment substantially eliminates the "double taxation" at thecorporate and shareholder levels that generally results from an investment in a C corporation. A "C corporation" is a corporation that generally is required topay tax at the corporate level. Double taxation means taxation once at the corporate level when income is earned and once again at the shareholder levelwhen the income is distributed. In general, the income that we generate is taxed only at the shareholder level upon a distribution of dividends to ourshareholders. We will nonetheless be subject to U.S. federal tax in the following circumstances:•We will be taxed at regular corporate rates on any undistributed net taxable income, including undistributed net capital gains.•For tax years that began prior to December 31, 2017, we may be subject to the "alternative minimum tax" on our items of tax preference, includingany deductions of net operating losses.•If we have net income from prohibited transactions, which are, in general, sales or other dispositions of inventory or property held primarily forsale to customers in the ordinary course of business, other than foreclosure property, such income will be subject to a 100% tax.•If we elect to treat property that we acquire in connection with a foreclosure of a mortgage loan or certain leasehold terminations as "foreclosureproperty," we may thereby avoid the 100% tax on gain from a resale of that property (if the sale would otherwise constitute a prohibitedtransaction), but the income from the sale or operation of the property may be subject to corporate income tax at the highest applicable rate(currently 21%).•If we fail to satisfy the 75% gross income test and/or the 95% gross income test, as discussed below, but nonetheless maintain our qualification asa REIT because we satisfy other requirements, we will be subject to a 100% tax on an amount based on the magnitude of the failure, as adjusted toreflect the profit margin associated with our gross income.•If we violate the asset tests (other than certain de minimis violations) or other requirements applicable to REITs, as described below, and yetmaintain our qualification as a REIT because there is reasonable cause for the failure and other applicable requirements are met, we may be subjectto a penalty tax. In that case, the amount of the penalty tax will be at least $50,000 per failure, and, in the case of certain asset test failures, will bedetermined as the amount of net income generated by the nonqualifying assets in question multiplied by the highest corporate tax rate (currently21%) if that amount exceeds $50,000 per failure.•If we fail to distribute during each calendar year at least the sum of (i) 85% of our ordinary income for such year, (ii) 95% of our capital gain netincome for such year and (iii) any undistributed net taxable income from prior periods, we will be subject to a nondeductible 4% excise tax on theexcess of the required distribution over the sum of (a) the amounts that we actually distributed and (b) the amounts we retained and upon which wepaid income tax at the corporate level.•We may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to meet record-keeping requirementsintended to monitor our compliance with rules relating to the composition of a REIT's shareholders.•A 100% tax may be imposed on transactions between us and a TRS that do not reflect arm's-length terms.•If we acquire appreciated assets from a corporation that is not a REIT (i.e., a corporation taxable under subchapter C of the Code) in a transactionin which the adjusted tax basis of the assets in our hands is determined by reference to the adjusted tax basis of the assets in the hands of thesubchapter C corporation, we may be subject to tax on such13Table of Contentsappreciation at the highest corporate income tax rate then applicable if we subsequently recognize gain on a disposition of any such assets duringthe five-year period following their acquisition from the subchapter C corporation. (Notwithstanding the “Supplement to Certain United StatesFederal Income Tax Considerations” section of our Prospectus Supplement dated August 9, 2016, to our Prospectus dated March 28, 2016, finalregulations were issued by the U.S. Department of the Treasury (the “Treasury”) on January 17, 2017, confirming that the recognition periodduring which this tax could apply is a 5-year period and not a 10-year period.) •The earnings of our TRS Properties will generally be subject to U.S. federal corporate income tax.In addition, we and our subsidiaries may be subject to a variety of taxes, including payroll taxes and state, local, and foreign income, property, grossreceipts and other taxes on our assets and operations. We could also be subject to tax in situations and on transactions not presently contemplated.Requirements for Qualification—GeneralThe Code defines a REIT as a corporation, trust or association:1.that is managed by one or more trustees or directors;2.the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest;3.that would be taxable as a domestic corporation but for its election to be subject to tax as a REIT;4.that is neither a financial institution nor an insurance company subject to specific provisions of the Code;5.the beneficial ownership of which is held by 100 or more persons;6.in which, during the last half of each taxable year, not more than 50% in value of the outstanding stock is owned, directly or indirectly, by five orfewer "individuals" (as defined in the Code to include specified tax-exempt entities); and7.that meets other tests described below, including with respect to the nature of its income and assets.The Code provides that conditions (1) through (4) must be met during the entire taxable year, and that condition (5) must be met during at least335 days of a taxable year of 12 months, or during a proportionate part of a shorter taxable year. Conditions (5) and (6) need not be met during a corporation'sinitial tax year as a REIT (which, in our case, was 2014). Our charter provides restrictions regarding the ownership and transfers of our stock, which areintended to assist us in satisfying the stock ownership requirements described in conditions (5) and (6) above. These restrictions, however, may not ensurethat we will, in all cases, be able to satisfy the share ownership requirements described in conditions (5) and (6) above. If we fail to satisfy these shareownership requirements, except as provided in the next sentence, our status as a REIT will terminate. If, however, we comply with the rules contained in theapplicable Treasury regulations that require us to ascertain the actual ownership of our shares and we do not know, or would not have known through theexercise of reasonable diligence, that we failed to meet the requirements described in condition (6) above, we will be treated as having met this requirement.To monitor compliance with the stock ownership requirements, we generally are required to maintain records regarding the actual ownership of ourstock. To do so, we must demand written statements each year from the record holders of significant percentages of our stock pursuant to which the recordholders must disclose the actual owners of the stock (i.e., the persons required to include our dividends in their gross income). We must maintain a list ofthose persons failing or refusing to comply with this demand as part of our records. We could be subject to monetary penalties if we fail to comply with theserecord-keeping requirements. If, upon request by the Company, a shareholder fails or refuses to comply with the demands, such holder will be required byTreasury regulations to submit a statement with his, her or its tax return disclosing the actual ownership of our stock and other information.Qualified REIT SubsidiariesThe Code provides that a corporation that is a "qualified REIT subsidiary" shall not be treated as a separate corporation, and all assets, liabilities anditems of income, deduction and credit of a "qualified REIT subsidiary" shall be treated as assets, liabilities and items of income, deduction and credit of theREIT. A "qualified REIT subsidiary" is a corporation, all of the capital stock of which is owned by the REIT, that has not elected to be a "taxable REITsubsidiary" (discussed below). In applying the requirements described herein, all of our "qualified REIT subsidiaries" will be ignored, and all assets, liabilitiesand items of income, deduction and credit of such subsidiaries will be treated as our assets, liabilities and items of income, deduction and credit. Thesesubsidiaries, therefore, will not be subject to federal corporate income taxation, although they may be subject to state and local taxation.14Table of ContentsTaxable REIT SubsidiariesIn general, we may jointly elect with a subsidiary corporation, whether or not wholly-owned, to treat such subsidiary corporation as a TRS. Wegenerally may not own more than 10% of the securities of a taxable corporation, as measured by voting power or value, unless we and such corporation electto treat such corporation as a TRS. The separate existence of a TRS is not ignored for U.S. federal income tax purposes. Accordingly, a TRS generally issubject to corporate income tax on its earnings, which may reduce the cash flow that we and our subsidiaries generate in the aggregate and may reduce ourability to make distributions to our shareholders.We are not treated as holding the assets of a TRS or as receiving any income that the subsidiary earns. Rather, the stock issued by the TRS to us is anasset in our hands, and we treat the dividends paid to us, if any, as income. This treatment can affect our income and asset test calculations, as describedbelow. Because we do not include the assets and income of TRSs on a look-through basis in determining our compliance with the REIT requirements, we mayuse such entities to undertake indirectly activities that the REIT rules might otherwise preclude us from doing directly or through pass-through subsidiaries.For example, we may use TRSs to perform services or conduct activities that give rise to certain categories of income or to conduct activities that, ifconducted by us directly, would be treated in our hands as prohibited transactions.The TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level ofcorporate taxation. Further, the rules impose a 100% excise tax on transactions between a TRS and its parent REIT or the REIT's tenants that are notconducted on an arm's-length basis. We intend that all of our transactions with our TRS, if any, will be conducted on an arm's-length basis.Income TestsAs a REIT, we must satisfy two gross income requirements on an annual basis. First, at least 75% of our gross income for each taxable year, excludinggross income from sales of inventory or dealer property in "prohibited transactions," discharge of indebtedness and certain hedging transactions, generallymust be derived from "rents from real property," gains from the sale of real estate assets, interest income derived from mortgage loans secured by real property(including certain types of mortgage-backed securities, other than certain debt instruments of publicly offered REITs), dividends received from other REITs,and specified income from temporary investments. Second, at least 95% of our gross income in each taxable year, excluding gross income from prohibitedtransactions, discharge of indebtedness and certain hedging transactions, must be derived from some combination of income that qualifies under the 75%gross income test described above, as well as other dividends, interest, and gain from the sale or disposition of stock or securities, which need not have anyrelation to real property. Income and gain from certain hedging transactions will be excluded from both the numerator and the denominator for purposes ofboth the 75% and 95% gross income tests.Rents received by a REIT will qualify as "rents from real property" in satisfying the gross income requirements described above only if severalconditions are met.•The amount of rent must not be based in whole or in part on the income or profits of any person. However, an amount received or accrued generallywill not be excluded from the term "rents from real property" solely by reason of being based on a fixed percentage or percentages of gross receipts orsales.•Rents received from a tenant will not qualify as "rents from real property" in satisfying the gross income tests if the REIT, or a direct or indirectowner of 10% or more of the REIT, directly or constructively, owns 10% or more of such tenant (a "Related Party Tenant"). However, rentalpayments from a taxable REIT subsidiary will qualify as rents from real property even if we own more than 10% of the total value or combinedvoting power of the taxable REIT subsidiary if (i) at least 90% of the property is leased to unrelated tenants and the rent paid by the taxable REITsubsidiary is substantially comparable to the rent paid by the unrelated tenants for comparable space or (ii) the property leased is a “qualifiedlodging facility,” as defined in Section 856(d)(9)(D) of the Code, or a “qualified health care property,” as defined in Section 856(e)(6)(D)(i) of theCode, and certain other conditions are satisfied.•Rent attributable to personal property leased in connection with a lease of real property will not qualify as "rents from real property" if such rentexceeds 15% of the total rent received under the lease.•The REIT generally must not operate or manage the property or furnish or render services to tenants, except through an "independent contractor"who is adequately compensated and from whom the REIT derives no income, or through a taxable REIT subsidiary. The "independent contractor"requirement, however, does not apply to the extent the services provided by the REIT are "usually or customarily rendered" in connection with therental of space for occupancy only, and are not otherwise considered "rendered to the occupant." In addition, a de minimis rule applies with respectto non-customary services. Specifically, if the value of the non-customary service income with respect to15Table of Contentsa property (valued at no less than 150% of the direct costs of performing such services) is 1% or less of the total income derived from the property,then all rental income except the non-customary service income will qualify as "rents from real property." A taxable REIT subsidiary may provideservices (including noncustomary services) to a REIT’s tenants without "tainting" any of the rental income received by the REIT, and will be able tomanage or operate properties for third parties and generally engage in other activities unrelated to real estate.We do not anticipate receiving rent that is based in whole or in part on the income or profits of any person (except by reason of being based on a fixedpercentage or percentages of gross receipts or sales consistent with the rules described above). Our former parent, Penn, received a private letter ruling fromthe IRS that concluded certain rental formulas under the Penn Master Lease will not cause any amounts received under the Penn Master Lease to be treated asother than rents from real property. While we do not expect to seek similar rulings for additional leases we enter into that have substantially similar terms asthe Penn Master Lease, we intend to treat amounts received under those leases consistent with the conclusions in the ruling, though there can be no assurancethat the IRS will not challenge such treatment. We also do not anticipate receiving more than a de minimis amount of rents from any Related Party Tenant orrents attributable to personal property leased in connection with real property that will exceed 15% of the total rents received with respect to such realproperty. We may receive certain types of income that will not qualify under the 75% or 95% gross income tests. In particular, dividends received from ataxable REIT subsidiary will not qualify under the 75% test. We believe, however, that the aggregate amount of such items and other non-qualifying incomein any taxable year will not cause GLPI to exceed the limits on non-qualifying income under either the 75% or 95% gross income tests.We may directly or indirectly receive distributions from TRSs or other corporations that are not REITs or qualified REIT subsidiaries. Thesedistributions generally are treated as dividend income to the extent of the earnings and profits of the distributing corporation. Such distributions willgenerally constitute qualifying income for purposes of the 95% gross income test, but not for purposes of the 75% gross income test. Any dividends that wereceive from another REIT or qualified REIT subsidiary, however, will be qualifying income for purposes of both the 95% and 75% gross income tests.We believe that we have and will continue to be in compliance with these gross income tests. If we fail to satisfy one or both of the 75% or 95% grossincome tests for any taxable year, we may still qualify to be taxed as a REIT for such year if we are entitled to relief under applicable provisions of the Code.These relief provisions will be generally available if (i) our failure to meet these tests was due to reasonable cause and not due to willful neglect and(ii) following our identification of the failure to meet the 75% or 95% gross income test for any taxable year, we file a schedule with the IRS setting forth eachitem of our gross income for purposes of the 75% or 95% gross income test for such taxable year in accordance with Treasury regulations. It is not possible tostate whether we would be entitled to the benefit of these relief provisions in all circumstances. If these relief provisions are inapplicable to a particular set ofcircumstances, we will not qualify to be taxed as a REIT. Even if these relief provisions apply, and we retain our status as a REIT, the Code imposes a taxbased upon the amount by which we fail to satisfy the particular gross income test.Asset TestsAt the close of each calendar quarter, we must also satisfy five tests relating to the nature of our assets. First, at least 75% of the value of our total assetsmust be represented by some combination of "real estate assets," cash, cash items, U.S. government securities, and, under some circumstances, stock or debtinstruments purchased with new capital. For this purpose, real estate assets include interests in real property (such as land, buildings, leasehold interest in realproperty and, for taxable years that began or after January 1, 2016, personal property leased with real property if the rents attributable to the personal propertywould be rents from real property under the income tests discussed above), interests in mortgages on real property or on interests in real property, shares inother qualifying REITs, and stock or debt instruments held for less than one year purchased with the proceeds from an offering of shares of our stock orcertain debt and, for tax years that began on or after January 1, 2016, debt instruments issued by publicly offered REITs. Assets that do not qualify forpurposes of the 75% asset test are subject to the additional asset tests described below.Second, the value of any one issuer's securities that we own may not exceed 5% of the value of our total assets.Third, we may not own more than 10% of any one issuer's outstanding securities, as measured by either voting power or value. The 5% and 10% assettests do not apply to securities of TRSs and qualified REIT subsidiaries and the 10% asset test does not apply to "straight debt" having specifiedcharacteristics and to certain other securities described below. Solely for purposes of the 10% asset test, the determination of our interest in the assets of apartnership or limited liability company in which we own an interest will be based on our proportionate interest in any securities issued by the partnership orlimited liability company, excluding for this purpose certain securities described in the Code. The safe harbor under which certain types of securities aredisregarded for purposes of the 10% value limitation includes (1) straight debt securities (including straight debt securities that provides for certaincontingent payments); (2) any loan to an individual or an estate; (3) any rental agreement described in Section 467 of the Code, other than with a "relatedperson"; (4) any obligation to pay rents from real16Table of Contentsproperty; (5) certain securities issued by a State or any political subdivision thereof, or the Commonwealth of Puerto Rico; (6) any security issued by a REIT;and (7) any other arrangement that, as determined by the Secretary of the Treasury, is excepted from the definition of a security. In addition, for purposes ofapplying the 10% value limitation, (a) a REIT’s interest as a partner in a partnership is not considered a security; (b) any debt instrument issued by apartnership is not treated as a security if at least 75% of the partnership’s gross income is from sources that would qualify for the 75% REIT gross income test;and (c) any debt instrument issued by a partnership is not treated as a security to the extent of the REIT’s interest as a partner in the partnership.Fourth, the aggregate value of all securities of TRSs that we hold, together with other non-qualified assets (such as furniture and equipment or othertangible personal property, or non-real estate securities) may not, in the aggregate, exceed 25% of the value of our total assets. Beginning after December 31,2017, the aggregate value of all securities of the TRSs that we hold may not exceed 20% of our total assets.Fifth, for taxable years beginning after December 31, 2015, not more than 25% of the value of our gross assets may be represented by debt instrumentsof publicly offered REITs that are not secured by mortgages on real property or interests in real property.However, certain relief provisions are available to allow REITs to satisfy the asset requirements or to maintain REIT qualification notwithstandingcertain violations of the asset and other requirements. For example, if we should fail to satisfy the asset tests at the end of a calendar quarter such a failurewould not cause us to lose our REIT qualification if we (i) satisfied the asset tests at the close of the preceding calendar quarter and (ii) the discrepancybetween the value of our assets and the asset requirements was not wholly or partly caused by an acquisition of non-qualifying assets, but instead arose fromchanges in the relative market values of our assets. If the condition described in (ii) were not satisfied, we still could avoid disqualification by eliminatingany discrepancy within 30 days after the close of the calendar quarter in which it arose or by making use of the relief provisions described above.In the case of de minimis violations of the 10% and 5% asset tests, a REIT may maintain its qualification despite a violation of such requirements if(i) the value of the assets causing the violation does not exceed the lesser of 1% of the REIT's total assets and $10,000,000 and (ii) the REIT either disposes ofthe assets causing the failure within six months after the last day of the quarter in which it identifies the failure, or the relevant tests are otherwise satisfiedwithin that time frame.Even if we did not qualify for the foregoing relief provisions, one additional provision allows a REIT which fails one or more of the asset requirementsto nevertheless maintain its REIT qualification if (i) the REIT provides the IRS with a description of each asset causing the failure, (ii) the failure is due toreasonable cause and not willful neglect, (iii) the REIT pays a tax equal to the greater of (a) $50,000 per failure and (b) the product of the net incomegenerated by the assets that caused the failure multiplied by the highest applicable corporate tax rate (currently 21%) and (iv) the REIT either disposes of theassets causing the failure within six months after the last day of the quarter in which it identifies the failure, or otherwise satisfies the relevant asset testswithin that time frame.We believe that we have been and will continue to be in compliance with the asset tests described above.Annual Distribution RequirementsIn order to qualify to be taxed as a REIT, we are required to distribute dividends, other than capital gain dividends, to our shareholders in an amount atleast equal to:(i)the sum of(a)90% of our REIT taxable income, computed without regard to our net capital gains and the deduction for dividends paid; and(b)90% of our after tax net income, if any, from foreclosure property (as described below); minus(ii)the excess of the sum of specified items of non-cash income over 5% of our REIT taxable income, computed without regard to our net capitalgain and the deduction for dividends paid.We generally must make these distributions in the taxable year to which they relate, or in the following taxable year if declared before we timely fileour tax return for the year and if paid with or before the first regular dividend payment after such declaration. These distributions will be treated as receivedby our shareholders in the year in which paid. In order for distributions to be counted as satisfying the annual distribution requirements for REITs, and toprovide us with a REIT-level tax deduction, the distributions must not be "preferential dividends." A dividend is not a preferential dividend if thedistribution is (i) pro rata among all outstanding shares of stock within a particular class and (ii) in accordance with any preferences among17Table of Contentsdifferent classes of stock as set forth in our organizational documents. Given our status as a "publicly offered REIT" (within the meaning of the Code), thepreferential dividend rules do not apply to us for taxable years beginning after December 31, 2014.To the extent that we distribute at least 90%, but less than 100%, of our REIT taxable income, as adjusted, we will be subject to tax at ordinarycorporate tax rates on the retained portion. We may elect to retain, rather than distribute, some or all of our net long-term capital gains and pay tax on suchgains. In this case, we could elect for our shareholders to include their proportionate shares of such undistributed long-term capital gains in income, and toreceive a corresponding credit for their share of the tax that we paid. Our shareholders would then increase the adjusted basis of their stock by the differencebetween (i) the amounts of capital gain dividends that we designated and that they include in their taxable income, minus (ii) the tax that we paid on theirbehalf with respect to that income.To the extent that in the future we may have available net operating losses carried forward from prior tax years, such losses may reduce the amount ofdistributions that we must make in order to comply with the REIT distribution requirements.If we fail to distribute during each calendar year at least the sum of (i) 85% of our ordinary income for such year, (ii) 95% of our capital gain net incomefor such year and (iii) any undistributed net taxable income from prior periods, we will be subject to a non-deductible 4% excise tax on the excess of suchrequired distribution over the sum of (a) the amounts actually distributed, plus (b) the amounts of income we retained and on which we have paid corporateincome tax.We expect that our REIT taxable income will be less than our cash flow because of depreciation and other non-cash charges included in computingREIT taxable income. Accordingly, we anticipate that we generally will have sufficient cash or liquid assets to enable us to satisfy the distributionrequirements described above. However, from time to time, we may not have sufficient cash or other liquid assets to meet these distribution requirements dueto timing differences between the actual receipt of income and actual payment of deductible expenses, and the inclusion of income and deduction ofexpenses in determining our taxable income. In addition, we may decide to retain our cash, rather than distribute it, in order to repay debt, acquire assets, orfor other reasons. If these timing differences occur, we may borrow funds to pay dividends or pay dividends through the distribution of other property(including shares of our stock) in order to meet the distribution requirements, while preserving our cash.If our taxable income for a particular year is subsequently determined to have been understated, we may be able to rectify a resultant failure to meet thedistribution requirements for a year by paying "deficiency dividends" to shareholders in a later year, which may be included in our deduction for dividendspaid for the earlier year. In this case, we may be able to avoid losing REIT qualification or being taxed on amounts distributed as deficiency dividends,subject to the 4% excise tax described above. We will be required to pay interest based on the amount of any deduction taken for deficiency dividends.For purposes of the 90% distribution requirement and excise tax described above, any distribution must be paid in the taxable year to which they relate,or in the following taxable year if such distributions are declared in October, November or December of the taxable year, are payable to shareholders of recordon a specified date in any such month, and are actually paid before the end of January of the following year. Such distributions are treated as both paid by usand received by our shareholders on December 31 of the year in which they are declared.In addition, at our election, a distribution for a taxable year may be declared before we timely file our tax return for the year, provided we pay suchdistribution with or before our first regular dividend payment after such declaration, and such payment is made during the 12-month period following theclose of such taxable year. Such distributions are taxable to our shareholders in the year in which paid, even though the distributions relate to our priortaxable year for purposes of the 90% distribution requirement.We believe that we have satisfied the annual distribution requirements for the year ended, December 31, 2017. Although we intend to satisfy the annualdistribution requirements to continue to qualify as a REIT for the year ending December 31, 2018 and thereafter, economic, market, legal, tax or otherconsiderations could limit our ability to meet those requirements.Failure to QualifyIf we fail to satisfy one or more requirements for REIT qualification other than the income or asset tests, we could avoid disqualification as a REIT if ourfailure is due to reasonable cause and not to willful neglect and we pay a penalty of $50,000 for each such failure. Relief provisions are also available forfailures of the income tests and asset tests, as described above in "—Income Tests" and "—Asset Tests."If we fail to qualify for taxation as a REIT in any taxable year, and the relief provisions described above do not apply, we would be subject to tax,including any applicable alternative minimum tax, on our taxable income at regular corporate rates. We cannot deduct distributions to shareholders in anyyear in which we are not a REIT, nor would we be required to make distributions in such a year. In this situation, to the extent of current and accumulatedearnings and profits (as determined for18Table of ContentsU.S. federal income tax purposes), distributions to shareholders would be taxable as regular corporate dividends. Such dividends paid to U.S. shareholdersthat are individuals, trusts and estates may be taxable at the preferential income tax rates (i.e., currently the 20% maximum U.S. federal rate) for qualifieddividends. In addition, subject to the limitations of the Code, corporate distributees may be eligible for the dividends received deduction. Unless we areentitled to relief under specific statutory provisions, we would also be disqualified from re-electing to be taxed as a REIT for the four taxable years followingthe year during which we lost our qualification. It is not possible to state whether, in all circumstances, we would be entitled to this statutory relief.Legislative or Other Actions Affecting REITsThe present U.S. federal income tax treatment of REITs may be modified, possibly with retroactive effect, by legislative, judicial or administrativeaction at any time. The REIT rules are constantly under review by persons involved in the legislative process and by the IRS and the Treasury which mayresult in statutory changes as well as revisions to regulations and interpretations. Changes to the U.S. federal tax laws and interpretations thereof couldadversely affect an investment in our common stock.On December 22, 2017, H.R. 1, known as the Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budgetfor fiscal year 2018 (the "Tax Cuts and Jobs Act") was signed into law. The Tax Cuts and Jobs Act makes significant changes to the U.S. federal incometaxation of individuals and corporations, generally effective for taxable years beginning after December 31, 2017. In addition to reducing corporate andindividual income tax rates, the Tax Cuts and Jobs Act eliminates or restricts various deductions that, along with other provisions, may change the way thatwe calculate our REIT taxable income and our TRS’s taxable income. Significant provisions of the Tax Cuts and Jobs Act that investors should be aware ofinclude provisions that: (i) lower the corporate income tax rate to 21%, (ii) provide noncorporate taxpayers with a deduction of up to 20% of certain incomeearned through partnerships and REITs, (iii) limits the net operating loss deduction to 80% of taxable income, where taxable income is determined withoutregard to the net operating loss deduction itself, generally eliminates net operating loss carrybacks and allows unused net operating losses to be carriedforward indefinitely, (iv) expand the ability of businesses to deduct the cost of certain property investments in the year in which the property is purchased,and (v) generally lower tax rates for individuals and other noncorporate taxpayers, while limiting deductions such as miscellaneous itemized deductions andstate and local tax deductions. In addition, the Tax Cuts and Jobs Act limits the deduction for net interest expense incurred by a business to 30% of the“adjusted taxable income” of the taxpayer. However, the limitation on the interest expense deduction does not apply to certain small-business taxpayers orelecting real property trades or businesses, such as any real property development, redevelopment, construction, reconstruction, acquisition, conversion,rental, operation, management, leasing, or brokerage trade or business. Making the election to be treated as a real property trade or business requires theelecting real property trade or business to depreciate non-residential real property, residential rental property, and qualified improvement property over alonger period using the alternative depreciation system. We have not yet determined whether we or our TRS will elect out of the new interest expenselimitation.The effect of the Tax Cuts and Jobs Act is highly uncertain, both in terms of its direct effect on the taxation of holders of our common stock and itsindirect effect on the value of our assets or market conditions generally. Furthermore, many of the provisions of the Tax Cuts and Jobs Act will requireguidance through the issuance of Treasury regulations in order to assess their effect. There may be a substantial delay before such regulations arepromulgated, increasing the uncertainty as to the ultimate effect of the statutory amendments on us.Stockholders are urged to consult with their own tax advisors with respect to the impact that the Tax Cuts and Jobs Act and other legislation mayhave on their investment and the status of legislative, regulatory or administrative developments and proposals and their potential effect on their investmentin our shares.RegulationThe ownership, operation, and management of, and provision of certain products and services to, gaming and racing facilities are subject to pervasiveregulation. Gaming laws are generally based upon declarations of public policy designed to protect gaming consumers and the viability and integrity of thegaming industry. Gaming laws also may be designed to protect and maximize state and local revenues derived through taxes and licensing fees imposed ongaming industry participants as well as to enhance economic development and tourism. To accomplish these public policy goals, gaming laws establishprocedures to ensure that participants in the gaming industry, including landlords and other suppliers, meet certain standards of character and fitness. Inaddition, gaming laws require gaming industry participants to:•ensure that unsuitable individuals and organizations have no role in gaming operations;•establish procedures designed to prevent cheating and fraudulent practices;19Table of Contents•establish and maintain responsible accounting practices and procedures;•maintain effective controls over their financial practices, including establishment of minimum procedures for internal fiscal affairs and thesafeguarding of assets and revenues;•maintain systems for reliable record keeping;•file periodic reports with gaming regulators;•ensure that contracts and financial transactions are commercially reasonable, reflect fair market value and are arms-length transactions; and•establish programs to promote responsible gaming.These regulations impact our business in three important ways: (1) our ownership and operation of the TRS Properties; (2) our ownership of land andbuildings in which gaming activities are operated by third party tenants pursuant to long-term leases; and (3) the operations of our gaming tenants. Ourownership and operation of the TRS Properties subject GLPI, its subsidiaries and its officers and directors to the jurisdiction of the gaming regulatoryagencies in Louisiana and Maryland. Further, many gaming and racing regulatory agencies in the jurisdictions in which our gaming tenants operate requireGLPI and its affiliates to maintain a license as a key business entity or supplier because of its status as landlord, including Colorado, Illinois, Indiana,Mississippi, Missouri, Ohio and Pennsylvania.Our businesses are subject to various federal, state and local laws and regulations in addition to gaming regulations. These laws and regulationsinclude, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, health care, currencytransactions, taxation, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be interpreted differentlyin the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts orgovernmental authorities could adversely affect our operating results.InsuranceWe have comprehensive liability, property and business interruption insurance at our TRS Properties. In regards to our properties subject to triple-netleases, the lease agreements require our tenants to have their own comprehensive liability, property and business interruption insurance policies, includingprotection for our insurable interests as the landlord.Environmental MattersOur properties are subject to environmental laws regulating, among other things, air emissions, wastewater discharges and the handling and disposal ofwastes, including medical wastes. Certain of the properties we own utilize above or underground storage tanks to store heating oil for use at the properties.Other properties were built during the time that asbestos-containing building materials were routinely installed in residential and commercial structures. Ourtriple-net leases obligate the tenants thereunder to comply with applicable environmental laws and to indemnify us if their noncompliance results in losses orclaims against us, and we expect that any future leases will include the same provisions for other operators. An operator's failure to comply could result infines and penalties or the requirement to undertake corrective actions which may result in significant costs to the operator and thus adversely affect theirability to meet their obligations to us.Pursuant to U.S. federal, state and local environmental laws and regulations, a current or previous owner or operator of real property may be required toinvestigate, remove and/or remediate a release of hazardous substances or other regulated materials at, or emanating from, such property. Further, undercertain circumstances, such owners or operators of real property may be held liable for property damage, personal injury and/or natural resource damageresulting from or arising in connection with such releases. Certain of these laws have been interpreted to provide for joint and several liability unless the harmis divisible and there is a reasonable basis for allocation of responsibility. We also may be liable under certain of these laws for damage that occurred prior toour ownership of a property or at a site where we sent wastes for disposal. The failure to properly remediate a property may also adversely affect our ability tolease, sell or rent the property or to borrow funds using the property as collateral.In connection with the ownership of our real property, we could be legally responsible for environmental liabilities or costs relating to a release ofhazardous substances or other regulated materials at or emanating from such property. In order to assess the potential for such liability, we conduct routinedue diligence of environmental assessments prior to acquisition. We are not aware of any environmental issues that are expected to have a material impact onthe operations of any of our properties.20Table of ContentsPursuant to the Penn Master Lease and a Separation and Distribution Agreement between Penn and GLPI, any liability arising from or relating toenvironmental liabilities arising from the businesses and operations of Penn's real property holdings prior to the Spin-Off (other than any liability arisingfrom or relating to the operation or ownership of the TRS Properties and except to the extent first discovered after the end of the term of the Penn MasterLease) was retained by Penn and Penn will indemnify GLPI (and its subsidiaries, directors, officers, employees and agents and certain other related parties)against any losses arising from or relating to such environmental liabilities. Similarly, pursuant to a Separation and Distribution Agreement betweenPinnacle's operating company and GLPI (as successor to Pinnacle Entertainment), any liability arising from or relating to environmental liabilities arisingfrom the business and operations of Pinnacle's real property holdings prior to the Pinnacle transaction (except to the extent first discovered after the end ofthe term of the Pinnacle Master Lease) was retained by Pinnacle and Pinnacle will indemnify GLPI (and its subsidiaries, directors, officers, employees andagents and certain other related parties) against any losses arising from or relating to such environmental liabilities. There can be no assurance that Penn orPinnacle will be able to fully satisfy their indemnification obligations. Moreover, even if we ultimately succeed in recovering from Penn or Pinnacle anyamounts for which we are held liable, we may be temporarily required to bear these losses.EmployeesAs of December 31, 2017, we had 714 full and part-time employees. Substantially all of these employees are employed at Hollywood Casino BatonRouge and Hollywood Casino Perryville. The Company believes its relations with its employees are good.Some of our employees at Hollywood Casino Perryville are currently represented by labor unions. The Seafarers Entertainment and Allied Trade Unionrepresents 161 of our employees at Hollywood Casino Perryville under an agreement that expires in February 2020. Additionally, Local No. 27 United Foodand Commercial Workers and United Industrial Service Transportation Professional and Government Workers of North America represent certain employeesunder collective bargaining agreements that expire in 2020, neither of which represents more than 50 of our employees at Hollywood Casino Perryville.Available InformationFor more information about us, visit our website at www.glpropinc.com. The contents of our website are not part of this Annual Report on Form 10-K.Our electronic filings with the SEC (including all annual reports on Form 10-K and Form 10-K/A, quarterly reports on Form 10-Q and Form 10-Q/A, andcurrent reports on Form 8-K, and any amendments to these reports), including the exhibits, are available free of charge through our website as soon asreasonably practicable after we electronically file them with or furnish them to the SEC.21Table of ContentsITEM 1A. RISK FACTORSRisk Factors Relating to Our BusinessWe are significantly dependent on two tenants and their respective subsidiaries until we substantially diversify our portfolio. An event that has a materialadverse effect on either tenant’s respective business, financial position or results of operations could have a material adverse effect on our business,financial position or results of operations and we could be restrained from exercising any remedies under our Master Leases.Substantially all of our revenues are based on the revenue derived under the master leases with Penn and Pinnacle. Because these master leases aretriple-net leases, we depend on Penn and Pinnacle to operate the properties that we own in a manner that generates revenues sufficient to allow the tenants tomeet their obligations to us, including payment of rent and all insurance, taxes, utilities and maintenance and repair expenses in connection with these leasedproperties and to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with theirbusinesses. There can be no assurance that either Penn or Pinnacle will have sufficient assets, income or access to financing to enable them to satisfy theirpayment obligations under the master leases. The ability of our tenants to fulfill their obligations may depend, in part, upon the overall profitability of theiroperations. The inability or unwillingness of either Penn or Pinnacle to meet their subsidiaries’ rent obligations and other obligations under the master leases,in each case, could materially and adversely affect our business, financial position or results of operations, including our ability to pay dividends to ourshareholders as required to maintain our status as a REIT and our financial position could be materially weakened if any of our tenants are unable to meettheir obligations to us or failed to renew or extend any lease as such lease expires, or if we are unable to lease or re-lease our properties on economicallyfavorable terms.Due to our dependence on rental payments from Penn and Pinnacle (and their respective subsidiaries) as our primary source of revenue, we may belimited in our ability to enforce our rights under the master leases or to terminate the master leases with respect to any particular property. Failure by Penn orPinnacle to comply with the terms of their respective master leases or to comply with the gaming regulations to which the leased properties are subject couldrequire us to find another lessee for such leased property and there could be a decrease or cessation of rental payments by either Penn or Pinnacle, as the casemay be. In such event, we may be unable to locate a suitable lessee at similar rental rates or at all, which would have the effect of reducing our rentalrevenues.Although we will acquire a new tenant, Boyd, if the Penn-Pinnacle Merger (described below) is completed, we will become even more dependent onPenn as a result of its acquisition of Pinnacle. Any event, including the integration of Penn and Pinnacle after the completion of the Penn-Pinnacle Merger,that has a material adverse effect on Penn’s business, financial position or results of operations could have a material adverse effect on our business, financialposition or results of operations. In addition, continued consolidation in the gaming industry would increase our dependence on our existing tenants andcould make it increasingly difficult for us to find alternative tenants for our properties.Our pursuit of investments in, and acquisitions or development of, additional properties may be unsuccessful or fail to meet our expectations.We operate in a highly competitive industry and face competition from other REITs (including other gaming-focused REITs), investmentcompanies, private equity and hedge fund investors, sovereign funds, lenders, gaming companies (including gaming companies considering REIT structures)and other investors, some of whom are significantly larger and have greater resources and lower costs of capital. Increased competition will make it morechallenging to identify and successfully capitalize on acquisition opportunities that meet our investment objectives. If we cannot identify and purchase asufficient number of investment properties at favorable prices or if we are unable to finance acquisitions on commercially favorable terms, our business,financial position or results of operations could be materially adversely affected. Additionally, the fact that we must distribute 90% of our net taxable incomein order to maintain our qualification as a REIT may limit our ability to rely upon rental payments from our leased properties or subsequently acquiredproperties in order to finance acquisitions. As a result, if debt or equity financing is not available on acceptable terms, further acquisitions might be limited orcurtailed and completing proposed acquisitions may be adversely impacted. Furthermore, fluctuations in the price of our common stock may impact ourability to finance additional acquisitions through the issuance of common stock and/or cause significant dilution.Investments in and acquisitions of gaming properties and other properties we might seek to acquire entail risks associated with real estateinvestments, including that the investment's performance will fail to meet expectations or that the tenant, operator or manager will underperform. Real estatedevelopment projects present other risks, including construction delays or cost overruns that increase expenses, the inability to obtain required zoning,occupancy and other governmental approvals and permits on a timely basis, and the incurrence of significant development costs prior to completion of theproject.22Table of ContentsPenn’s proposed acquisition of Pinnacle is subject to the satisfaction of closing conditions, including the timely receipt of all necessary regulatoryapprovals, financing and other matters, and the failure of Penn and Pinnacle to complete the acquisition could negatively impact our stock price andgrowth plans.On December 17, 2017, Penn and Pinnacle announced that Penn intends to acquire Pinnacle (the “Penn-Pinnacle Merger”). Under our master leaseswith both Penn and Pinnacle, we have a consent right with respect to any divestitures effected in connection with the Penn-Pinnacle Merger. In agreeing tothe Penn-Pinnacle Merger, we will be acquiring the physical assets at Penn’s Plainridge Park Casino and Pinnacle’s Belterra Park Gaming & Entertainment forapproximately $315 million subject to the closing of the Penn-Pinnacle Merger. Additionally, in order to facilitate the Penn-Pinnacle Merger, we intend toenter into a new lease with Boyd Gaming Corp. (“Boyd”), whereby Boyd will become the operator for four casino operations Boyd is acquiring fromPinnacle. The Penn-Pinnacle Merger is subject to the satisfaction of closing conditions, including the timely receipt of all necessary regulatory approvals,financing and other matters. If Penn and Pinnacle are unable to complete the Penn-Pinnacle Merger, we would not be able to acquire the physical assets asplanned and it could negatively impact our stock price and growth plans.We will need to repay or refinance borrowings under our senior unsecured credit facility and our senior unsecured notes with maturities in 2018.We have a $1,825 million dollar senior unsecured credit facility (the "Credit Facility"), consisting of a $700 million revolving credit facility, a $300million Term Loan A facility, and an $825 million Term Loan A-1 facility. Our revolving credit facility and the Term Loan A facility mature on October 28,2018 and the Term Loan A-1 facility matures on April 28, 2021. At December 31, 2017, we have $230 million outstanding under the term loan A facility andno borrowings outstanding under the revolving credit facility. We also have $550 million of 4.375% senior unsecured notes scheduled to mature onNovember 1, 2018 (the "2018 Notes"). During 2018, we will need to repay, refinance, replace or otherwise extend the maturity of the portion of our CreditFacility that matures during 2018 and the 2018 Notes. Our ability to repay, refinance, replace or extend these borrowings by their maturity dates will bedependent on, among other things, business conditions, our financial performance and the general condition of the financial markets. If a financial disruptionwere to occur at the time that we are required to repay indebtedness outstanding under our Credit Facility and the 2018 Notes, we could be forced toundertake alternate financings, including a sale of additional common stock, negotiate for an extension of the maturity of our Credit Facility or delayexpenditures in order to generate proceeds that could be used to repay indebtedness under our Credit Facility and the 2018 Notes. We cannot provide anyassurance that we will be able to consummate any such transaction on terms that are commercially reasonable, on terms acceptable to us or at all.We are dependent on the gaming industry and may be susceptible to the risks associated with it, which could materially adversely affect our business,financial position or results of operations.As the owner and landlord of gaming facilities, we are impacted by the risks associated with the gaming industry. Therefore, our success is to somedegree dependent on the gaming industry, which could be adversely affected by economic conditions in general, changes in consumer trends and preferencesand other factors over which we and our tenants have no control. As we are subject to risks inherent in substantial investments in a single industry, a decreasein the gaming business would likely have a greater adverse effect on our revenues than if we owned a more diversified real estate portfolio, particularlybecause a component of the rent under our leases is based, over time, on the performance of the gaming facilities operated by our tenants. Decreases indiscretionary consumer spending brought about by weakened general economic conditions such as, but not limited to, lackluster recoveries from recessions,high unemployment levels, higher income taxes, low levels of consumer confidence, weakness in the housing market, cultural and demographic changes, andincreased stock market volatility may negatively impact our revenues and operating cash flow.The gaming industry is characterized by an increasing number of gaming facilities with an increasingly high degree of competition among a largenumber of participants, including riverboat casinos, dockside casinos, land-based casinos, video lottery, sweepstakes and poker machines not located incasinos, Native American gaming and other forms of gaming in the U.S. Furthermore, competition from alternative wagering products, such as internetlotteries, sweepstakes, social gaming products, daily fantasy sports and other internet wagering gaming services or games of skill, which allow their customersa wagering alternative to the casino-style, in person gaming from home or in non-casino settings, could divert customers from our properties and thusadversely affect our TRS Properties and the business of our tenants and, indirectly, our business. Certain alternative wagering products may be illegal underfederal or state law but operate exclusively in certain states or from overseas locations, and are accessible to certain domestic gamblers. Present state or federallaws that restrict the forms of gaming authorized or the number of competitors that offer gaming in the applicable jurisdiction are subject to change and mayincrease the competition affecting our TRS Properties and the business of our tenants and, indirectly, our business. Currently, there are proposals that wouldlegalize internet poker and other alternative wagering products in a number of states. Several states have intrastate internet gaming. Expansion of internetgaming in other jurisdictions (both legal and illegal) could further compete with our traditional operations, which could have an adverse impact on ourbusiness and result of operations.23Table of ContentsThe operations of our TRS Properties and of our tenants in our leased facilities are subject to disruptions or reduced patronage as a result of severeweather conditions, natural disasters and other casualty events. Because many of our facilities are located on or adjacent to bodies of water, they are subjectto risks in addition to those associated with land-based facilities, including loss of service due to casualty, forces of nature, mechanical failure, extended orextraordinary maintenance, flood, hurricane or other severe weather conditions. A component of the rent under our leases is based, over time, on theperformance of the gaming facilities operated by Penn, Pinnacle and Casino Queen on our properties; consequently, a casualty that leads to the loss of use ofa casino facility subject to our leases for an extended period may negatively impact our revenues.We face extensive regulation from gaming and other regulatory authorities.The ownership, operation, and management of gaming and racing facilities are subject to pervasive regulation. These regulations impact both ourownership and operation of the TRS Properties and the operations of our gaming tenants. Our ownership and operation of the TRS Properties subject us, ourofficers, directors and shareholders to the jurisdiction of the gaming regulatory agencies in Louisiana and Maryland. Further, many gaming and racingregulatory agencies in the jurisdictions in which our tenants operate require GLPI, its affiliates and certain officers and directors to maintain licenses as a keybusiness entity, supplier or key person because of GLPI's status as landlord. For GLPI to maintain such licenses in good standing, certain of GLPI's officers,directors and shareholders are also required to maintain license or finding of suitability.Many jurisdictions also require any person who acquires beneficial ownership of more than a certain percentage of voting securities of a gamingcompany and, in some jurisdictions, non-voting securities, typically 5%, to report the acquisition to gaming authorities, and gaming authorities may requiresuch holders to apply for qualification or a finding of suitability, subject to limited exceptions for "institutional investors" that hold a company's votingsecurities for passive investment purposes only. Some jurisdictions may also limit the number of gaming licenses in which a person may hold an ownership ora controlling interest. Subject to certain administrative proceeding requirements, the gaming regulators have the authority to deny any application or limit,condition, restrict, revoke or suspend any license, registration, finding of suitability or approval, or fine any person licensed, registered or found suitable orapproved, for any cause deemed reasonable by the gaming authorities.Additionally, substantially all material loans, significant acquisitions, leases, sales of securities and similar financing transactions by us and oursubsidiaries must be reported to and in some cases approved by gaming authorities in advance of the transaction. Neither we nor any of our subsidiaries maymake a public offering of securities without the prior approval of certain gaming authorities. Changes in control through merger, consolidation, stock or assetacquisitions, management or consulting agreements, or otherwise are subject to receipt of prior approval of gaming authorities. Entities seeking to acquirecontrol of GLPI or one of its subsidiaries must satisfy gaming authorities with respect to a variety of stringent licensing standards prior to assuming control.Required regulatory approvals can delay or prohibit transfers of our gaming properties, which could result in periods in which we are unable to receiverent for such properties.The tenants of our gaming properties are operators of gaming facilities and must be licensed under applicable state law. Prior to the transfer ofgaming facilities, including a controlling interest, the new owner or operator generally must become licensed under state law. In the event that any currentlease or any future lease agreement we enter into is terminated or expires and a new tenant is found, any delays in the new tenant receiving regulatoryapprovals from the applicable state government agencies, or the inability to receive such approvals, may prolong the period during which we are unable tocollect the applicable rent.Our pursuit of strategic acquisitions unrelated to the gaming industry may be unsuccessful or fail to meet our expectations. We may pursue strategic acquisitions of properties unrelated to the gaming industry, including acquisitions that may be complementary to ourexisting gaming properties. Our management does not possess the same level of expertise with the dynamics and market conditions applicable to non-gaming assets, which could adversely affect the results of our expansion into other asset classes. In addition, we may be unable to achieve our desired returnon our investments in new or adjacent asset classes.Our charter restricts the ownership and transfer of our outstanding stock, which may have the effect of delaying, deferring or preventing a transaction orchange of control of our company.In order for us to qualify to be taxed as a REIT, not more than 50% in value of our outstanding shares of stock may be owned, actually orconstructively, by five or fewer individuals at any time during the last half of each taxable year after the first year for which GLPI elected to qualify to betaxed as a REIT (2014). Additionally, at least 100 persons must beneficially own GLPI stock during at least 335 days of a taxable year (other than the firsttaxable year for which GLPI elected to be taxed as a REIT). GLPI's charter, with certain exceptions, authorizes the Board of Directors to take such actions asare necessary and desirable to preserve GLPI's qualification as a REIT. GLPI's charter also provides that, subject to certain exceptions approved24Table of Contentsby the Board of Directors, no person may beneficially or constructively own more than 7% in value or in number, whichever is more restrictive, of GLPI'soutstanding shares of all classes and series of stock. The constructive ownership rules are complex and may cause shares of stock owned directly orconstructively by a group of related individuals or entities to be constructively owned by one individual or entity. These ownership limits could delay orprevent a transaction or a change in control of GLPI that might involve a premium price for shares of GLPI stock or otherwise be in the best interests of GLPIshareholders. The acquisition of less than 7% of our outstanding stock by an individual or entity could cause that individual or entity to own beneficially orconstructively in excess of 7% in value of our outstanding stock, and thus violate our charter's ownership limit. Our charter prohibits any person from owningshares of our stock that would result in our being "closely held" under Section 856(h) of the Code. Any attempt to own or transfer shares of our stock inviolation of these restrictions may result in the transfer being automatically void. GLPI's charter also provides that shares of GLPI's capital stock acquired orheld in excess of the ownership limit will be transferred to a trust for the benefit of a designated charitable beneficiary, and that any person who acquiresshares of GLPI's capital stock in violation of the ownership limit will not be entitled to any dividends on the shares or be entitled to vote the shares or receiveany proceeds from the subsequent sale of the shares in excess of the lesser of the market price on the day the shares were transferred to the trust or the amountrealized from the sale. GLPI or its designee will have the right to purchase the shares from the trustee at this calculated price as well. A transfer of shares ofGLPI's capital stock in violation of the limit may be void under certain circumstances. GLPI's 7% ownership limitation may have the effect of delaying,deferring or preventing a change in control of GLPI, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all ofour assets) that might provide a premium price for GLPI's shareholders. To assist GLPI in complying with applicable gaming laws, our charter also providesthat capital stock of GLPI that is owned or controlled by an unsuitable person or an affiliate of an unsuitable person will be transferred to a trust for thebenefit of a designated charitable beneficiary, and that any such unsuitable person or affiliate will not be entitled to any dividends on the shares or beentitled to vote the shares or receive any proceeds from the subsequent sale of the shares in excess of the lesser of the price paid by the unsuitable person oraffiliate for the shares or the amount realized from the sale, in each case less a discount in a percentage (up to 100%) to be determined by our Board ofDirectors in its sole and absolute discretion. The shares shall additionally be redeemable by GLPI, out of funds legally available for that redemption, to theextent required by the gaming authorities making the determination of unsuitability or to the extent determined to be necessary or advisable by our Board ofDirectors, at a redemption price equal to the lesser of (i) the market price on the date of the redemption notice, (ii) the market price on the redemption date, or(iii) the actual amount paid for the shares by the owner thereof, in each case less a discount in a percentage (up to 100%) to be determined by our Board ofDirectors in its sole and absolute discretion.Pennsylvania law and provisions in our charter and bylaws may delay or prevent takeover attempts by third parties and therefore inhibit our shareholdersfrom realizing a premium on their stock.Our charter and bylaws, in addition to Pennsylvania law, contain provisions that are intended to deter coercive takeover practices and inadequatetakeover bids and to encourage prospective acquirors to negotiate with our Board of Directors rather than to attempt a hostile takeover. Our charter andbylaws, among other things (i) permit the Board of Directors, without further action of the shareholders, to issue and fix the terms of preferred stock, whichmay have rights senior to those of the common stock; (ii) establish certain advance notice procedures for shareholder proposals, and require all directorcandidates to be recommended by the nominating committee of the Board of Directors following the affirmative determination by the nominating committeethat such nominee is likely to meet the applicable suitability requirements of any federal, state or local regulatory body having jurisdiction over us;(iii) provide that a director may only be removed by shareholders for cause and upon the vote of 75% of the shares entitled to vote; (iv) do not permit directnomination by shareholders of nominees for election to the Board of Directors, but instead permit shareholders to recommend potential nominees to ourCompensation and Governance Committee; (v) require shareholders to have beneficially owned at least 1% of our outstanding common stock in order torecommend a person for nomination for election to the Board of Directors, or to present a shareholder proposal, for action at a shareholders' meeting; and(vi) provide for supermajority approval requirements for amending or repealing certain provisions in our charter and in order to approve an amendment orrepeal of any provision of our bylaws that has not been proposed by our Board of Directors.In addition, specific anti-takeover provisions in Pennsylvania law could make it more difficult for a third party to attempt a hostile takeover. Theseprovisions require (i) approval of certain transactions by a majority of the voting stock other than that held by the potential acquirer; (ii) the acquisition at"fair value" of all the outstanding shares not held by an acquirer of 20% or more; (iii) a five-year moratorium on certain "business combination" transactionswith an "interested shareholder;" (iv) the loss by interested shareholders of their voting rights over "control shares;" (v) the disgorgement of profits realized byan interested shareholder from certain dispositions of our shares; and (vi) severance payments for certain employees and prohibiting termination of certainlabor contracts.We believe these provisions will protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers tonegotiate with our Board of Directors and by providing our Board of Directors with more time to assess any acquisition proposal. These provisions are notintended to make GLPI immune from takeovers or to prevent a25Table of Contentstransaction from occurring. However, these provisions will apply even if the offer may be considered beneficial by some shareholders and could delay orprevent an acquisition that our Board of Directors determines is not in the best interests of GLPI. These provisions may also prevent or discourage attempts toremove and replace incumbent directors.If we lose our key management personnel, we may not be able to successfully manage our business and achieve our objectives.Our success depends in large part upon the leadership and performance of our executive management team, particularly Peter M. Carlino, our chiefexecutive officer, and William J. Clifford, our chief financial officer. Furthermore, we do not have any employment agreements in place with the members ofour executive management team. If we lose the services of Messrs. Carlino or Clifford, or other members of our executive management team, we may not beable to successfully manage our business or achieve our business objectives.We may experience uninsured or underinsured losses, which could result in a significant loss of the capital we have invested in a property, decreaseanticipated future revenues or cause us to incur unanticipated expense.While our leases require, and new lease agreements are expected to require, that comprehensive insurance and hazard insurance be maintained by thetenants, a tenant's failure to comply could lead to an uninsured or underinsured loss and there can be no assurance that we will be able to recover suchuninsured or underinsured amounts from such tenant. Further, there are certain types of losses, generally of a catastrophic nature, such as earthquakes,hurricanes and floods, that may be uninsurable or not economically insurable. Insurance coverage may not be sufficient to pay the full current market valueor current replacement cost of a loss. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make itinfeasible to use insurance proceeds to replace the property after such property has been damaged or destroyed. Under such circumstances, the insuranceproceeds received might not be adequate to restore the economic position with respect to such property.If we or one of our tenants experience a loss that is uninsured, or that exceeds our or our tenant's policy coverage limits, we could lose the capitalinvested in the damaged properties as well as the anticipated future cash flows from those properties. In addition, if the damaged properties were subject torecourse indebtedness, we could continue to be liable for the indebtedness even if these properties were irreparably damaged.In addition, even if damage to our properties is covered by insurance, a disruption of our or our tenant's business caused by a casualty event mayresult in the loss of business or tenants. The business interruption insurance we or our tenant's carry may not fully compensate us for the loss of business ortenants due to an interruption caused by a casualty event.A disruption in the financial markets may make it more difficult to evaluate the stability, net assets and capitalization of insurance companies andany insurer's ability to meet its claim payment obligations. A failure of an insurance company to make payments to us upon an event of loss covered by aninsurance policy could adversely affect our business, financial condition and results of operations.The market price of our common stock may be volatile, and holders of our common stock could lose a significant portion of their investment if the marketprice of our common stock declines.The market price of our common stock may be volatile, and shareholders may not be able to resell their shares of our common stock at or above theprice at which they acquired the common stock due to fluctuations in its market price, including changes in price caused by factors unrelated to ourperformance or prospects.Specific factors that may have a significant effect on the market price for our common stock include, among others, the following:•changes in stock market analyst recommendations or earnings estimates regarding our common stock or other comparable REITs;•actual or anticipated fluctuations in our revenue stream or future prospects;•strategic actions taken by us or our competitors, such as acquisitions;•our failure to close pending acquisitions;•our failure to achieve the perceived benefits of our acquisitions, including financial results, as rapidly as or to the extent anticipated byfinancial or industry analysts;26Table of Contents•new laws or regulations or new interpretations of existing laws or regulations applicable to our business and operations or the gamingindustry;•changes in tax or accounting standards, policies, guidance, interpretations or principles;•adverse conditions in the financial markets or general U.S. or international economic conditions, including those resulting from war,incidents of terrorism and responses to such events; and•sales of our common stock by members of our management team or other significant shareholders.Environmental compliance costs and liabilities associated with real estate properties owned by us may materially impair the value of those investments.As an owner of real property, we are subject to various federal, state and local environmental and health and safety laws and regulations. Althoughwe will not operate or manage most of our property, we may be held primarily or jointly and severally liable for costs relating to the investigation and clean-up of any property from which there has been a release or threatened release of a regulated material as well as other affected properties, regardless of whetherwe knew of or caused the release.In addition to these costs, which are typically not limited by law or regulation and could exceed the property's value, we could be liable for certainother costs, including governmental fines and injuries to persons, property or natural resources. Further, some environmental laws create a lien on thecontaminated site in favor of the government for damages and the costs the government incurs in connection with such contamination.Although we intend to require our operators and tenants to undertake to indemnify us for certain environmental liabilities, including environmentalliabilities they cause, the amount of such liabilities could exceed the financial ability of the tenant or operator to indemnify us. The presence ofcontamination or the failure to remediate contamination may adversely affect our ability to sell or lease the real estate or to borrow using the real estate ascollateral.Changes to U.S. federal income tax laws could materially and adversely affect us and our shareholders.The recently enacted Tax Cuts and Jobs Act makes significant changes to the federal income taxation of individuals and corporations under theCode, generally effective for taxable years beginning after December 31, 2017. In addition to reducing corporate and individual income tax rates, the TaxCuts and Jobs Act eliminates or restricts various deductions that, along with other provisions, may change the way that we calculate our REIT taxable incomeand our TRS’s taxable income. Significant provisions of the Tax Cuts and Jobs Act that investors should be aware of include provisions that: (i) lower thecorporate income tax rate to 21%, (ii) provide noncorporate taxpayers with a deduction of up to 20% of certain income earned through partnerships andREITs, (iii) limits the net operating loss deduction to 80% of taxable income, where taxable income is determined without regard to the net operating lossdeduction itself, generally eliminates net operating loss carrybacks and allows unused net operating losses to be carried forward indefinitely, (iv) expand theability of businesses to deduct the cost of certain property investments in the year in which the property is purchased, (v) generally lower tax rates forindividuals and other noncorporate taxpayers, while limiting deductions such as miscellaneous itemized deductions and state and local tax deductions, and(vi) limits the deduction for net interest expense incurred by a business to 30% of the “adjusted taxable income” of the taxpayer, but does not apply to certainsmall-business taxpayers or electing real property trades or businesses, including REITs. The effect of these, and the many other, changes made is highlyuncertain, both in terms of their direct effect on the taxation of holders of our common stock and their indirect effect on the value of our assets or marketconditions generally. Furthermore, many of the provisions of the Tax Cuts and Jobs Act will require guidance through the issuance of Treasury regulations inorder to assess their effect. There may be a substantial delay before such regulations are promulgated, increasing the uncertainty as to the ultimate effect ofthe statutory amendments on us.We face risks associated with security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of ourinformation technology (IT) networks and related systems. We face risks associated with security breaches, whether through cyber-attacks or cyber intrusions over the internet, malware, computer viruses,attachments to e-mails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of ourIT networks and related systems. The risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, including by computerhackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusionsfrom around the world have increased. Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-dayoperations. Although we make efforts to maintain the security and integrity of these types of IT networks and related systems,27Table of Contentsand we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts andmeasures will be effective or that attempted security breaches or disruptions would not be successful or damaging. A security breach or other significantdisruption involving our IT networks and related systems could disrupt the proper functioning of our networks and systems; result in misstated financialreports, violations of loan covenants and/or missed reporting deadlines; result in our inability to monitor our compliance with the rules and regulationsregarding our qualification as a REIT; result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of proprietary,confidential, sensitive or otherwise valuable information of ours or others, which others could use to compete against us or for disruptive, destructive orotherwise harmful purposes and outcomes; require significant management attention and resources to remedy any damages that result; subject us to claims forbreach of contract, damages, credits, penalties or termination of certain agreements; or damage our reputation among our tenants and investors generally.Risk Factors Relating to our Status as a REITIf we do not qualify to be taxed as a REIT, or fail to remain qualified as a REIT, we will be subject to U.S. federal income tax as a regular corporation andcould face a substantial tax liability, which would reduce the amount of cash available for distribution to our shareholders.We elected on our 2014 U.S. federal income tax return to be treated as a REIT and intend to continue to be organized and to operate in a manner thatwill permit us to qualify as a REIT. We currently operate, and intend to continue to operate, in a manner that will allow us to continue to qualify to be taxedas a REIT for U.S. federal income tax purposes. We received an opinion from our special tax advisors, Wachtell, Lipton, Rosen & Katz and KPMG LLP(collectively the "Special Tax Advisors"), with respect to our qualification as a REIT in connection with the Spin-Off. Investors should be aware, however,that opinions of advisors are not binding on the IRS or any court. The opinions of the Special Tax Advisors represent only the view of the Special TaxAdvisors based on their review and analysis of existing law and on certain representations as to factual matters and covenants made by us, includingrepresentations relating to the values of our assets and the sources of our income. The opinions are expressed as of the date issued. The Special Tax Advisorshave no obligation to advise us or the holders of our common stock of any subsequent change in the matters stated, represented or assumed or of anysubsequent change in applicable law. Furthermore, both the validity of the opinions of Special Tax Advisors and our qualification as a REIT will depend onour satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis, the results ofwhich will not be monitored by the Special Tax Advisors. Our ability to satisfy the asset tests depends upon our analysis of the characterization and fairmarket values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals.Penn has received a private letter ruling from the IRS with respect to certain issues relevant to our qualification as a REIT. In general, the rulingprovides, subject to the terms and conditions contained therein, that (1) certain of the assets to be held by us after the Spin-Off and (2) the methodology forcalculating a certain portion of rent received by us pursuant to the Penn Master Lease will not adversely affect our qualification as a REIT. Although we maygenerally rely upon the ruling, no assurance can be given that the IRS will not challenge our qualification as a REIT on the basis of other issues or factsoutside the scope of the ruling.If we were to fail to qualify to be taxed as a REIT in any taxable year, we would be subject to U.S. federal income tax, including any applicablealternative minimum tax, on our taxable income at regular corporate rates, and dividends paid to our shareholders would not be deductible by us incomputing our taxable income. Any resulting corporate liability could be substantial and would reduce the amount of cash available for distribution to ourshareholders, which in turn could have an adverse impact on the value of our common stock. Unless we were entitled to relief under certain Code provisions,we also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify to be taxed asa REIT.Qualifying as a REIT involves highly technical and complex provisions of the Code and violations of these provisions could jeopardize our REITqualifications.Qualification as a REIT involves the application of highly technical and complex Code provisions for which only limited judicial andadministrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification. Our qualification as a REIT depends onour satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis. In addition, ourability to satisfy the requirements to qualify to be taxed as a REIT may depend in part on the actions of third parties over which we have no control or onlylimited influence.28Table of ContentsWe could fail to qualify to be taxed as a REIT if income we receive from Penn or Pinnacle, or their subsidiaries, is not treated as qualifying income.Under applicable provisions of the Code, we will not be treated as a REIT unless we satisfy various requirements, including requirements relating tothe sources of our gross income. Rents received or accrued by us from Penn or Pinnacle, or their subsidiaries, will not be treated as qualifying rent forpurposes of these requirements if the Penn Master Lease or Pinnacle Master Lease is not respected as a true lease for U.S. federal income tax purposes and isinstead treated as a service contract, joint venture or some other type of arrangement. If the Penn Master Lease or Pinnacle Master Lease is not respected as atrue lease for U.S. federal income tax purposes, we may fail to qualify to be taxed as a REIT. Furthermore, our qualification as a REIT will depend on oursatisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis. Our ability to satisfythe asset tests depends upon our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precisedetermination, and for which we will not obtain independent appraisals.In addition, subject to certain exceptions, rents received or accrued by us from Penn or Pinnacle, or their subsidiaries, will not be treated asqualifying rent for purposes of these requirements if we or an actual or constructive owner of 10% or more of our stock actually or constructively owns 10%or more of the total combined voting power of all classes of Penn stock or Pinnacle stock entitled to vote or 10% or more of the total value of all classes ofPenn stock or Pinnacle stock. Our charter provides for restrictions on ownership and transfer of our shares of stock, including restrictions on such ownershipor transfer that would cause the rents received or accrued by us from Penn or Pinnacle, or their subsidiaries, to be treated as non-qualifying rent for purposes ofthe REIT gross income requirements. Nevertheless, there can be no assurance that such restrictions will be effective in ensuring that rents received or accruedby us from Penn or Pinnacle, or their subsidiaries, will not be treated as qualifying rent for purposes of REIT qualification requirements.Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.The maximum U.S. federal income tax rate applicable to income from "qualified dividends" payable by U.S. corporations to U.S. shareholders thatare individuals, trusts and estates is currently 20%. Ordinary dividends payable by REITs, however, generally are not eligible for the reduced rates. However,for taxable years that begin after December 31, 2017, and before January 1, 2026: (i) the U.S. federal income tax brackets generally applicable to ordinaryincome of individuals, trusts and estates have been modified (with the rates generally reduced), and (ii) shareholders that are individuals, trusts or estates aregenerally entitled to a deduction equal to 20% of the aggregate amount of ordinary income dividends received from a REIT (not including dividends that areeligible for the reduced rates applicable to “qualified dividend income” or treated as capital gain dividends), subject to certain limitations and not subject toexpiration as of January 1, 2018.The more favorable rates applicable to regular corporate qualified dividends could cause investors who are individuals, trusts or estates to perceiveinvestments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adverselyaffect the value of the stock of REITs, including our stock, even taking into account the lower 37% maximum rate for ordinary income and the 20%deduction for ordinary REIT dividends received in taxable years beginning after December 31, 2017 and before January 1, 2026.REIT distribution requirements could adversely affect our ability to execute our business plan.We generally must distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction andexcluding any net capital gains, in order to qualify to be taxed as a REIT (assuming that certain other requirements are also satisfied) so that U.S. federalcorporate income tax does not apply to earnings that we distribute. To the extent that we satisfy this distribution requirement and qualify for taxation as aREIT but distribute less than 100% of our REIT taxable income, determined without regard to the dividends paid deduction and including any net capitalgains, we will be subject to U.S. federal corporate income tax on our undistributed net taxable income. In addition, we will be subject to a 4% nondeductibleexcise tax if the actual amount that we distribute to our shareholders in a calendar year is less than a minimum amount specified under U.S. federal income taxlaws. We intend to make distributions to our shareholders to comply with the REIT requirements of the Code.From time to time, we may generate taxable income greater than our cash flow as a result of differences in timing between the recognition of taxableincome and the actual receipt of cash or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments. Ifwe do not have other funds available in these situations, we could be required to borrow funds on unfavorable terms, sell assets at disadvantageous prices ordistribute amounts that would otherwise be invested in future acquisitions to make distributions sufficient to enable us to pay out enough of our taxableincome to satisfy the REIT distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives couldincrease our costs or reduce our equity. Thus, compliance with the REIT requirements may hinder our ability to grow, which could adversely affect the valueof our stock. Restrictions on our indebtedness, including29Table of Contentsrestrictions on our ability to incur additional indebtedness or make certain distributions, could preclude us from meeting the 90% distribution requirement.Decreases in funds from operations due to unfinanced expenditures for acquisitions of properties or increases in the number of shares of our common stockoutstanding without commensurate increases in funds from operations each would adversely affect our ability to maintain distributions to our shareholders.Moreover, the failure of Penn or Pinnacle to make rental payments under the Penn Master Lease, the Pinnacle Master Lease or the Meadows Lease, asapplicable, would materially impair our ability to make distributions. Consequently, there can be no assurance that we will be able to make distributions atthe anticipated distribution rate or any other rate.Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow.Even if we remain qualified for taxation as a REIT, we may be subject to certain U.S. federal, state, and local taxes on our income and assets,including taxes on any undistributed income and state or local income, property and transfer taxes. For example, we hold certain of our assets and conductrelated activities through TRS subsidiary corporations that are subject to federal, state, and local corporate-level income taxes as regular C corporations aswell as state and local gaming taxes. In addition, we may incur a 100% excise tax on transactions with a TRS if they are not conducted on an arm's-lengthbasis. Any of these taxes would decrease cash available for distribution to our shareholders.Complying with REIT requirements may cause us to forego otherwise attractive acquisition opportunities or liquidate otherwise attractive investments.To qualify to be taxed as a REIT for U.S. federal income tax purposes, we must ensure that, at the end of each calendar quarter, at least 75% of thevalue of our assets consist of cash, cash items, government securities and "real estate assets" (as defined in the Code), including certain mortgage loans andsecurities. The remainder of our investments (other than government securities, qualified real estate assets and securities issued by a TRS) generally cannotinclude more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any oneissuer. In addition, in general, no more than 5% of the value of our total assets (other than government securities, qualified real estate assets and securitiesissued by a TRS) can consist of the securities of any one issuer, and no more than 20% of the value of our total assets can be represented by securities of oneor more TRSs. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of thecalendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result,we may be required to liquidate or forego otherwise attractive investments. These actions could have the effect of reducing our income and amounts availablefor distribution to our shareholders.In addition to the asset tests set forth above, to qualify to be taxed as a REIT we must continually satisfy tests concerning, among other things, thesources of our income, the amounts we distribute to shareholders and the ownership of our stock. We may be unable to pursue investments that would beotherwise advantageous to us in order to satisfy the source-of-income or asset-diversification requirements for qualifying as a REIT. Thus, compliance withthe REIT requirements may hinder our ability to make certain attractive investments.Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.The REIT provisions of the Code substantially limit our ability to hedge our assets and liabilities. Income from certain hedging transactions that wemay enter into to manage risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets or from transactionsto manage risk of currency fluctuations with respect to any item of income or gain that satisfy the REIT gross income tests (including gain from thetermination of such a transaction) does not constitute "gross income" for purposes of the 75% or 95% gross income tests that apply to REITs, provided thatcertain identification requirements are met. To the extent that we enter into other types of hedging transactions or fail to properly identify such transaction asa hedge, the income is likely to be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may berequired to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedgingactivities because the TRS may be subject to tax on gains or expose us to greater risks associated with changes in interest rates that we would otherwise wantto bear. In addition, losses in the TRS will generally not provide any tax benefit, except that such losses could theoretically be carried back or forward againstpast or future taxable income in the TRS.We paid the Purging Distribution in common stock and cash and may pay taxable dividends on our common stock in common stock and cash. Ourshareholders may sell shares of our common stock to pay tax on such dividends, placing downward pressure on the market price of our common stock.We paid the Purging Distribution in a combination of cash and GLPI stock. Penn has received a private letter ruling from the IRS with respect tocertain issues relevant to our payment of the Purging Distribution in a combination of cash and GLPI stock. In general, the ruling provides, subject to theterms and conditions contained therein, that (1) the Purging Distribution will be treated as a dividend that will first reduce our accumulated earnings andprofits (as determined for U.S.30Table of Contentsfederal income tax purposes) attributable to pre-REIT years in satisfaction of the REIT annual distribution requirement and (2) the amount of any GLPI stockreceived by any GLPI shareholder as part of the Purging Distribution will be considered to equal the amount of cash that could have been received instead. Inconnection with the Purging Distribution, a shareholder of our common stock was required to report dividend income as a result of the Purging Distributioneven though we distributed no cash or only nominal amounts of cash to such shareholder.We currently intend to pay dividends (other than the Purging Distribution) in cash only, and not in-kind. However, if for any taxable year, we havesignificant amounts of taxable income in excess of available cash flow, we may declare dividends in-kind in order to satisfy the REIT annual distributionrequirements. We may distribute a portion of our dividends in the form of our stock or our debt instruments. In either event, a shareholder of GLPI commonstock will be required to report dividend income as a result of such distributions even though we distributed no cash or only nominal amounts of cash to suchshareholder.The IRS has issued private letter rulings to other REITs (and, with respect to the Purging Distribution and as described above, to Penn) treatingcertain distributions that are paid partly in cash and partly in stock as taxable dividends that would satisfy the REIT annual distribution requirement andqualify for the dividends paid deduction for U.S. federal income tax purposes. Those rulings may be relied upon only by taxpayers to whom they were issued,but we could request a similar ruling from the IRS. We cannot rely on the private letter ruling Penn received from the IRS, as described above, with respect tothe payment of dividends other than the Purging Distribution. In addition, the IRS previously issued a revenue procedure authorizing publicly traded REITsto make elective cash/stock dividends, but that revenue procedure does not apply to our taxable year that began on January 1, 2014 and future taxable years.Accordingly, it is unclear whether and to what extent we will be able to make taxable dividends (other than the Purging Distribution) payable in-kind.If we make any taxable dividend payable in cash and common stock, taxable shareholders receiving such dividends will be required to include thefull amount of the dividend as ordinary income to the extent of our current and accumulated earnings and profits, as determined for U.S. federal income taxpurposes. As a result, shareholders may be required to pay income tax with respect to such dividends in excess of the cash dividends received. If a U.S.shareholder sells the GLPI stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income withrespect to the dividend, depending on the market price of the stock at the time of the sale. Furthermore, with respect to certain non-U.S. shareholders, we maybe required to withhold federal income tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in GLPIstock. If, in any taxable dividend payable in cash and GLPI stock, a significant number of our shareholders determine to sell shares of our stock in order topay taxes owed on dividends, it may be viewed as economically equivalent to a dividend reduction and put downward pressure on the market price of ourstock.We could be subject to tax on any unrealized net built-in gains in the assets held before electing to be treated as a REIT and in the assets acquired fromPinnacle.We own appreciated assets that were held by a C corporation before we elected to be treated as a REIT and were acquired in a transaction in whichthe adjusted tax basis of the assets in our ownership is determined by reference to the adjusted tax basis of the assets in the hands of the C corporation. If wedispose of any such appreciated assets during the five-year period following our acquisition of the assets from the C corporation (i.e., during the five-yearperiod following our qualification as a REIT), we will be subject to tax at the highest corporate tax rates on any gain from such assets to the extent of theexcess of the fair market value of the assets on the date that they were acquired by us (i.e., at the time that we became a REIT) over the adjusted tax basis ofsuch assets on such date, which are referred to as built-in gains. The assets acquired from Pinnacle are expected to have significant built-in-gains. Because,prior to the Pinnacle transaction, Pinnacle was a C corporation, if we dispose of any such appreciated assets during the five-year period following thetransaction, we will be subject to tax at the highest corporate tax rates on any gain from such assets to the extent of the built-in-gain in such assets at the timeof the transaction.We would be subject to this tax liability even if we continue to qualify and maintain our status as a REIT. Any recognized built-in gain will retainour character as ordinary income or capital gain and will be taken into account in determining REIT taxable income and our distribution requirement. Anytax on the recognized built-in gain will reduce REIT taxable income. We may choose not to sell in a taxable transaction appreciated assets we mightotherwise sell during the five-year period in which the built-in gain tax applies in order to avoid the built-in gain tax. However, there can be no assurancesthat such a taxable transaction will not occur. If we sell such assets in a taxable transaction, the amount of corporate tax that we will pay will vary dependingon the actual amount of net built-in gain or loss present in those assets as of the time we became a REIT. The amount of tax could be significant.31Table of ContentsRisks Related to Our Capital StructureWe may have future capital needs and may not be able to obtain additional financing on acceptable terms.As of December 31, 2017, we had indebtedness of $4.48 billion, with an additional $699.6 million available for borrowing under our revolvingcredit facility. We may incur additional indebtedness in the future to refinance our existing indebtedness or to finance newly-acquired properties. Anysignificant additional indebtedness could require a substantial portion of our cash flow to make interest and principal payments due on our indebtedness.Greater demands on our cash resources may reduce funds available to us to pay dividends, make capital expenditures and acquisitions, or carry out otheraspects of our business strategy. Increased indebtedness can also limit our ability to adjust rapidly to changing market conditions, make us more vulnerableto general adverse economic and industry conditions and create competitive disadvantages for us compared to other companies with relatively lower debtlevels and/or borrowing costs. Increased future debt service obligations may limit our operational flexibility, including our ability to acquire properties,finance or refinance our properties, contribute properties to joint ventures or sell properties as needed. To the extent that we incur additional indebtedness orsuch other obligations, the risks associated with our leverage, including our possible inability to service our debt, would increase.We may be unable to obtain additional financing or financing on favorable terms or our operating cash flow may be insufficient to satisfy ourfinancial obligations under indebtedness outstanding from time to time (if any). If financing is not available when needed, or is available on unfavorableterms, we may be unable to develop new or enhance our existing properties, complete acquisitions or otherwise take advantage of business opportunities orrespond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations.We incurred additional indebtedness in connection with the Pinnacle transaction.Our increased indebtedness could have important consequences, including the following:•it may limit our ability to obtain additional debt or equity financing for working capital, capital expenditures, acquisitions, debt servicerequirements and general corporate or other purposes;•a material portion of our cash flows will be dedicated to the payment of principal and interest on our indebtedness, including indebtednessit may incur in the future, and will not be available for other purposes, including to pay dividends and make acquisitions;•it could limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate and place us at acompetitive disadvantage compared to our competitors that have less debt or are less leveraged;•it could make us more vulnerable to downturns in general economic or industry conditions or in our business, or prevent us from carryingout activities that are important to our growth;•it could increase our interest expense if interest rates in general increase because our indebtedness under the senior unsecured credit facilitybears interest at floating rates;•it could limit our ability to take advantage of strategic business opportunities; and•it could make it more difficult for us to satisfy our obligations with respect to our indebtedness, including under the notes, and any failureto comply with the obligations of any of our debt instruments, including any financial and other restrictive covenants, could result in anevent of default under the indenture governing the notes or under the agreements governing our other indebtedness which, if not cured orwaived, could result in the acceleration of our indebtedness under the senior credit facility and under the notes.We cannot assure you that our business will generate sufficient cash flow from operations, or that future borrowings will be available under oursenior unsecured credit facility or from other debt financing, in an amount sufficient to enable us to pay our indebtedness, including the notes, or to fund ourother liquidity needs. If we do not generate sufficient cash flow from operations to satisfy our debt service obligations, including payments on the notes, wemay have to undertake alternative financing plans, such as refinancing or restructuring our indebtedness, selling assets or seeking to raise additional capital,including by issuing equity securities or securities convertible into equity securities. Our ability to restructure or refinance our indebtedness will depend onthe capital markets and our financial condition at such time. Any refinancing of our indebtedness could be at higher interest rates and may require us tocomply with more onerous covenants, which could further restrict our32Table of Contentsbusiness operations. Our inability to generate sufficient cash flow to satisfy our debt service requirements, including the inability to service the notes, or torefinance our obligations on commercially reasonable terms, would have an adverse effect, which could be material, on our business, financial position andresults of operations, as well as on our ability to satisfy our obligations in respect of the notes.Our shareholders may be subject to significant dilution caused by the additional issuance of equity securities.If and when additional funds are raised through the issuance of equity securities, including under our "at the market" offering program (the "ATMProgram") and in connection with future acquisitions, our shareholders may experience significant dilution. Additionally, sales of substantial amounts of ourcommon stock in the public market, or the perception that such sales could occur, could adversely affect the market price of our common stock, may make itmore difficult for our shareholders to sell their GLPI common stock at a time and price that they deem appropriate and could impair our future ability to raisecapital through an offering of our equity securities.Adverse changes in our credit rating may affect our borrowing capacity and borrowing terms.Our outstanding debt is periodically rated by nationally recognized credit rating agencies. The credit ratings are based upon our operatingperformance, liquidity and leverage ratios, overall financial position, and other factors viewed by the credit rating agencies as relevant to both our industryand the economic outlook. Our credit rating may affect the amount of capital we can access, as well as the terms of any financing we obtain. Because we relyin part on debt financing to fund growth, the absence of an investment grade credit rating or any credit rating downgrade may have a negative effect on ourfuture growth.If we cannot obtain additional capital, our growth may be limited.As described above, in order to qualify and maintain our qualification as a REIT each year, we are required to distribute at least 90% of our REITtaxable income, excluding net capital gains, to our shareholders. As a result, our retained earnings available to fund acquisitions, development, or othercapital expenditures are nominal, and we rely upon the availability of additional debt or equity capital to fund these activities. Our long-term ability to growthrough acquisitions or development, which is an important component of our strategy, will be limited if we cannot obtain additional debt financing or raiseequity capital. Market conditions may make it difficult to obtain debt financing or raise equity capital, and we cannot assure you that we will be able toobtain additional debt or equity financing or that we will be able to obtain such capital on favorable terms.An increase in market interest rates could increase our interest costs on existing and future debt and could adversely affect our stock price.If interest rates increase, so could our interest costs for any new debt and our variable rate debt obligations. This increased cost could make thefinancing of any acquisition more costly, as well as lower our current period earnings. Rising interest rates could limit our ability to refinance existing debtwhen it matures or cause us to pay higher interest rates upon refinancing. In addition, an increase in interest rates could decrease the access third parties haveto credit, thereby decreasing the amount they are willing to pay for our assets and consequently limiting our ability to reposition our portfolio promptly inresponse to changes in economic or other conditions.Further, the dividend yield on our common stock, as a percentage of the price of such common stock, will influence the price of such common stock.Thus, an increase in market interest rates may lead prospective purchasers of our common stock to expect a higher dividend yield, which would adverselyaffect the market price of our common stock.Covenants in our debt agreements may limit our operational flexibility, and a covenant breach or default could materially adversely affect our business,financial position or results of operations.The agreements governing our indebtedness contain customary covenants, including restrictions on our ability to grant liens on our assets, incurindebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations and pay certain dividends and other restricted payments.Specifically, our debt agreements contain the following financial covenants: a maximum total debt to total asset value ratio of 60% (subject to increase to65% for specified periods in connection with certain acquisitions), a minimum fixed charge coverage ratio of 1.5 to 1, a maximum senior secured debt to totalasset value ratio of 40% and a maximum unsecured debt to unencumbered asset value ratio of 60%. These restrictions may limit our operational flexibility.Covenants that limit our operational flexibility as well as defaults under our debt instruments could have a material adverse effect on our business, financialposition or results of operations.33Table of ContentsRisk Factors Relating to Our Spin-Off from Penn and the Acquisition of Pinnacle's Gaming PropertiesIf the Spin-Off, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes,GLPI could be subject to significant tax liabilities and, in certain circumstances, GLPI could be required to indemnify Penn for material taxes pursuant toindemnification obligations under the Tax Matters Agreement.Penn has received a private letter ruling from the IRS substantially to the effect that, among other things, the Spin-Off, together with the requiredcompliance exchanges and certain related transactions, will qualify as a transaction that is generally tax-free for U.S. federal income tax purposes underSections 355 and/or 368(a)(1)(D) of the Code (the "IRS Ruling"). The IRS Ruling does not address certain requirements for tax-free treatment of the Spin-Offunder Section 355, and Penn received from its tax advisors a tax opinion substantially to the effect that, with respect to such requirements on which the IRSwill not rule, such requirements have been satisfied. The IRS Ruling, and the tax opinions that Penn received from its tax advisors, relied on, among otherthings, certain representations, assumptions and undertakings, including those relating to the past and future conduct of GLPI's business, and the IRS Rulingand the opinions would not be valid if such representations, assumptions and undertakings were incorrect in any material respect.Notwithstanding the IRS Ruling and the tax opinions, the IRS could determine the Spin-Off should be treated as a taxable transaction for U.S.federal income tax purposes if it determines any of the representations, assumptions or undertakings that were included in the request for the IRS Ruling arefalse or have been violated or if it disagrees with the conclusions in the opinions that are not covered by the IRS Ruling.Under a Tax Matters Agreement that GLPI entered into with Penn, GLPI generally is required to indemnify Penn against any tax resulting from theSpin-Off to the extent that such tax resulted from (i) an acquisition of all or a portion of the equity securities or assets of GLPI, whether by merger orotherwise, (ii) other actions or failures to act by GLPI, or (iii) any of GLPI's representations or undertakings being incorrect or violated. GLPI'sindemnification obligations to Penn and its subsidiaries, officers and directors will not be limited by any maximum amount. If GLPI is required to indemnifyPenn or such other persons under the circumstance set forth in the Tax Matters Agreement, GLPI may be subject to substantial liabilities.The historical financial information included in this filing may not be a reliable indicator of future results.The historical financial statements for the years ended December 31, 2017, 2016, 2015 and 2014 included herein reflect a full year of operations forthe real estate entity and the businesses in the TRS, whereas financial results for the year ended December 31, 2013 (included in Item 6) reflect a full year ofoperations for the businesses in the TRS and a partial year from November 1, 2013 to December 31, 2013 for the real estate entity. The historical financialstatements included herein do not reflect what the business, financial position or results of operations of GLPI may be in the future.The ownership by our executive officers and directors of common shares, options or other equity awards of Penn may create, or may create the appearanceof, conflicts of interest.Because of their current or former positions with Penn, substantially all of our executive officers, including our chief executive officer and chieffinancial officer, and certain directors own common shares of Penn, options to purchase common shares of Penn or other Penn equity awards as well ascommon shares, options to purchase common shares and/or other equity awards in GLPI. The individual holdings of common shares, options to purchasecommon shares or other equity awards of Penn and GLPI may be significant for some of these persons compared to their total assets. These equity interestsmay create, or appear to create, conflicts of interest when these directors and officers are faced with decisions that could benefit or affect the equity holders ofPenn in ways that do not benefit or affect us in the same manner.Peter M. Carlino, our Chairman and Chief Executive Officer, and David A. Handler, one of our independent directors, also serve on the Penn Board ofDirectors which may create conflicts of interest and/or create regulatory obstacles for the Company in its pursuit of additional properties.Peter M. Carlino serves as non-executive Chairman of the Board of Directors of Penn and the Chairman and Chief Executive Officer of GLPI. Inaddition, David A. Handler, one of our directors, serves as a director at Penn. These overlapping positions could create, or appear to create, potential conflictsof interest when our or Penn's management and directors pursue the same corporate opportunities, such as greenfield development opportunities, or facedecisions that could have different implications for us and Penn. For example, potential conflicts of interest could arise in connection with the negotiation orthe resolution of any dispute between us and Penn (or its subsidiaries) regarding the terms of the agreements governing the separation and the relationship(e.g. Penn Master Lease) thereafter. Potential conflicts of interest could also arise if we and Penn enter into any commercial arrangements with each other inthe future, including as a result of Penn's proposed acquisition of Pinnacle and the consummation of the transactions contemplated thereby. We haveestablished a mechanism in our Corporate Governance Guidelines to address potential conflicts through the use of an independent director but there can beno34Table of Contentsassurance that this process will completely eliminate conflicts resulting from overlapping directors. In addition to potential conflicts of interest, theoverlapping director position could create obstacles to engaging in certain transactions in close proximity to existing Penn properties and there can be noassurance that we will be able to overcome such obstacles.Potential indemnification liabilities of GLPI pursuant to the Separation and Distribution Agreement could materially adversely affect GLPI.The Separation and Distribution Agreement between GLPI and Penn provides for, among other things, the principal corporate transactions requiredto effect the separation, certain conditions to the separation and provisions governing the relationship between GLPI and Penn with respect to, and resultingfrom the separation.Among other things, the Separation and Distribution Agreement provides for indemnification obligations designed to make us financiallyresponsible for substantially all liabilities that may result relating to or arising out of our business. If GLPI is required to indemnify Penn under thecircumstances set forth in the Separation and Distribution Agreement, GLPI may be subject to substantial liabilities.Each of Penn and Pinnacle have contractual obligations to indemnify us for certain liabilities. However, there can be no assurance that these indemnitieswill be sufficient to insure us against the full amount of such liabilities, or that Penn's or Pinnacle’s ability, as applicable, to satisfy its indemnificationobligation will not be impaired in the future.Each of Penn and Pinnacle have contractual obligations to indemnify us for certain liabilities. However, third parties could seek to hold usresponsible for any of the liabilities that Penn and Pinnacle agreed to retain, and there can be no assurance that Penn or Pinnacle, as applicable, will be able tofully satisfy its indemnification obligations. Moreover, even if we ultimately succeed in recovering from Penn or Pinnacle, as applicable, any amounts forwhich we are held liable, we may be temporarily required to bear these losses while seeking recovery from Penn or Pinnacle, as applicable, and such recoverycould have a material adverse impact on Penn's or Pinnacle’s financial condition and ability to pay rent due under the Penn Master Lease or the PinnacleMaster Lease, as applicable.A court could deem the distribution to be a fraudulent conveyance and void the transaction or impose substantial liabilities upon us.A court could deem the distribution of GLPI common shares or certain internal restructuring transactions undertaken by Penn in connection with theSpin-Off, or the Purging Distribution by GLPI, to be a fraudulent conveyance or transfer. Fraudulent conveyances or transfers are defined to include transfersmade or obligations incurred with the actual intent to hinder, delay or defraud current or future creditors or transfers made or obligations incurred for less thanreasonably equivalent value when the debtor was insolvent, or that rendered the debtor insolvent, inadequately capitalized or unable to pay its debts as theybecome due. In such circumstances, a court could void the transactions or impose substantial liabilities upon us, which could adversely affect our financialcondition and our results of operations. Among other things, the court could require our shareholders to return to Penn some or all of the shares of ourcommon stock issued in the distribution, to return some of the Purging Distribution to GLPI, or require us to fund liabilities of other companies involved inthe restructuring transactions for the benefit of creditors. Whether a transaction is a fraudulent conveyance or transfer will vary depending upon thejurisdiction whose law is being applied.The Spin-Off agreements are not the result of negotiations between unrelated third parties.The agreements that we entered into with Penn in connection with the Spin-Off, including the Separation and Distribution Agreement, Penn MasterLease, Tax Matters Agreement, Employee Matters Agreement and Transition Services Agreement, were negotiated in the context of the Spin-Off while wewere still a wholly-owned subsidiary of Penn. Accordingly, during the period in which the terms of those agreements were negotiated, we did not have anindependent board of directors or a management team independent of Penn. As a result, although those agreements are generally intended to reflect arm's-length terms, the terms of those agreements may not reflect terms that would have resulted from arm's-length negotiations between unaffiliated third parties.Accordingly, there can be no assurance that the terms of these agreements will be as favorable for GLPI as would have resulted from negotiations with one ormore unrelated third parties.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.35Table of ContentsITEM 2. PROPERTIESRental PropertiesAs of December 31, 2017, the Company had 36 rental properties, consisting of the real property associated with 20 gaming and related facilitiesoperated by Penn, the real property associated with 15 gaming and related facilities operated by Pinnacle and the real property associated with the CasinoQueen in East St. Louis, Illinois. All rental properties are subject to long-term triple-net leases. For additional information pertaining to our tenant leases andour rental properties see Item 1.TRS PropertiesHollywood Casino Baton RougeHollywood Casino Baton Rouge is a dockside riverboat casino located on approximately 20.1 acres, which we own, on the east bank of the MississippiRiver in the East Baton Rouge Downtown Development District. The property site serves as the dockside embarkation for Hollywood Casino Baton Rougeand features a two-story building. We also own approximately 4.0 acres of land which features a railroad underpass that provides unimpeded access to thecasino property.Hollywood Casino PerryvilleWe own 36.4 acres of land in Perryville, Maryland where Hollywood Casino Perryville is located. The property is located directly off Interstate 95 inCecil County, Maryland just 35 miles northeast of Baltimore and 70 miles from Washington, D.C.See Item 1 for further information pertaining to our TRS Properties.Corporate OfficeThe Company's corporate headquarters building is located in Wyomissing, Pennsylvania and is owned by the Company.ITEM 3. LEGAL PROCEEDINGSThe Company is subject to various legal and administrative proceedings relating to personal injuries, employment matters, commercial transactionsand other matters arising in the normal course of business. The Company does not believe that the final outcome of these matters will have a material adverseeffect on the Company's consolidated financial position or results of operations. In addition, the Company maintains what it believes is adequate insurancecoverage to further mitigate the risks of such proceedings. However, such proceedings can be costly, time consuming and unpredictable and, therefore, noassurance can be given that the final outcome of such proceedings may not materially impact the Company's consolidated financial condition or results ofoperations. Further, no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from suchmatters.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.36Table of ContentsPART IIITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIESMarket InformationOur common stock is quoted on the NASDAQ Global Select Market under the symbol "GLPI." The following table sets forth for the periods indicatedthe high and low closing prices per share of our common stock as reported on the NASDAQ Global Select Market and cash dividends per share declared andpaid for the same periods. High Low Dividends per Share2017 First Quarter $33.42 $30.27 $0.62Second Quarter 38.53 33.33 0.62Third Quarter 39.19 36.31 0.63Fourth Quarter 37.20 35.54 0.632016 First Quarter $31.13 $24.82 $0.56Second Quarter 34.83 31.49 0.56Third Quarter 35.89 32.42 0.60Fourth Quarter 33.17 29.59 0.60The closing sale price per share of our common stock on the NASDAQ Global Select Market on February 12, 2018 was $33.31. As of February 12, 2018,there were approximately 691 holders of record of our common stock.Dividend PolicyThe Company's annual dividend is greater than or equal to at least 90% of its REIT taxable income on an annual basis, determined without regard tothe dividends paid deduction and excluding any net capital gains. U.S. federal income tax law generally requires that a REIT annually distribute at least 90%of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay regular corporate rates to theextent that it annually distributes less than 100% of its taxable income.On February 1, 2018, the Company declared a regular quarterly cash dividend of $0.63 per share, which is payable on March 23, 2018 to shareholdersof record as of March 9, 2018. Cash available for distribution to GLPI shareholders is derived from the rental payments received under the Company's realestate leases and the income of the TRS Properties. All distributions will be made by GLPI at the discretion of its Board of Directors and will depend on thefinancial position, results of operations, cash flows, capital requirements, debt covenants, applicable laws and other factors as the Board of Directors of GLPIdeems relevant. See Note 13 to the consolidated financial statements for further details on dividends.37Table of ContentsITEM 6. SELECTED FINANCIAL DATAThe following selected consolidated financial and operating data for the five-year period ended December 31, 2017 is derived from our consolidatedfinancial statements. The selected consolidated financial and operating data should be read in conjunction with our consolidated financial statements andnotes thereto, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the other financial information includedherein. Year Ended December 31, 2017 (1) 2016 (1) 2015 2014 2013 (3) (in thousands, except per share data)Income statement data: Net revenues$971,307 $828,255 $575,053 $591,068 $235,452Total operating expenses365,789 347,632 317,638 332,562 181,547Income from operations605,518 480,623 257,415 258,506 53,905Total other expenses215,133 183,773 121,851 114,586 23,456Income before income taxes390,385 296,850 135,564 143,920 30,449Taxes on income9,787 7,545 7,442 5,113 15,596Net income$380,598 $289,305 $128,122 $138,807 $14,853Per share data: Basic earnings per common share$1.80 $1.62 $1.12 $1.23 $0.13Diluted earnings per common share$1.79 $1.60 $1.08 $1.18 $0.13Weighted shares outstanding - Basic210,705 178,594 114,432 112,037 110,617Weighted shares outstanding - Diluted212,752 180,622 118,439 117,586 115,865Other data: Net cash provided by operating activities$598,711 $514,370 $319,688 $273,259 $80,632Net cash provided by (used in) investing activities698 (3,218,616) (14,142) (317,319) (16,275)Net cash (used in) provided by financing activities(606,911) 2,698,927 (299,644) (205,188) 206,302Depreciation and amortization123,835 115,717 109,783 106,843 28,923Straight-line rent adjustments65,971 58,673 55,825 44,877 6,677Collections of principal payments on investment in directfinancing lease73,072 48,533 — — —Interest expense217,068 185,896 124,183 117,030 19,254Capital expenditures (2)3,256 3,441 19,102 142,769 16,428Balance sheet data: Cash and cash equivalents$29,054 $36,556 $41,875 $35,973 $285,221Real estate investments, net3,662,045 3,739,091 2,090,059 2,180,124 2,010,303Investment in direct financing lease, net2,637,639 2,710,711 — — —Total assets7,246,882 7,369,330 2,448,155 2,525,454 2,562,362Total debt4,442,880 4,664,965 2,510,341 2,570,361 2,303,123Shareholders' equity (deficit)2,458,247 2,433,869 (253,514) (176,290) (137,452)Property Data: Number of rental properties owned at year end36 34 19 19 17Rentable square feet at year end15,198 14,799 6,970 6,970 6,344 (1) In April 2016, the Company purchased substantially all of the real property assets of Pinnacle for approximately $4.8 billion. The purchase of theseassets, which were subsequently leased back to Pinnacle under a triple-net lease and financed through a combination of debt and equity, contributedto the Company's significant growth in asset base as well as improved financial performance during fiscal years 2017 and 2016. To a lesser extent,the purchase of the real property assets of the Meadows for $323.3 million in September 2016, (which were also subsequently leased to38Table of ContentsPinnacle) also contributed to the Company's improved operating results during fiscal years 2017 and 2016. Finally, the purchase of the real propertyassets of Bally's Casino Tunica and Resorts Casino Tunica for $82.9 million in May 2017 (leased to Penn) contributed slightly to the Company'sincrease in net revenues for fiscal year 2017. See Note 4 to the Consolidated Financial Statements for additional information on the Company'sacquisitions.(2) The higher level of capital expenditures in 2014 was primarily due to the construction of Hollywood Gaming at Dayton Raceway and HollywoodGaming at Mahoning Valley Race Course which opened to the public on August 28, 2014 and September 17, 2014, respectively.(3) The Company's 2013 fiscal year reflects a partial year of operations for the GLP Capital operating segment as GLPI was spun-off from Penn onNovember 1, 2013. See Note 1 to the Consolidated Financial Statements for additional details.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our OperationsGLPI is a self-administered and self-managed Pennsylvania REIT. GLPI was incorporated in Pennsylvania on February 13, 2013, as a wholly-ownedsubsidiary of Penn. On November 1, 2013, Penn contributed to GLPI, through a series of internal corporate restructurings, substantially all of the assets andliabilities associated with Penn's real property interests and real estate development business, as well as the assets and liabilities of Hollywood Casino BatonRouge and Hollywood Casino Perryville, which are referred to as the "TRS Properties," and then spun-off GLPI to holders of Penn's common and preferredstock in a tax-free distribution. The Company elected on its U.S. federal income tax return for its taxable year that began on January 1, 2014 to be treated as aREIT and the Company, together with an indirect wholly-owned subsidiary of the Company, GLP Holdings, Inc., jointly elected to treat each of GLPHoldings, Inc., Louisiana Casino Cruises, Inc. and Penn Cecil Maryland, Inc. as a "taxable REIT subsidiary" effective on the first day of the first taxable yearof GLPI as a REIT. As a result of the Spin-Off, GLPI owns substantially all of Penn's former real property assets and leases back most of those assets to Penn foruse by its subsidiaries, under the Penn Master Lease, and GLPI also owns and operates the TRS Properties through its indirect wholly-owned subsidiary, GLPHoldings, Inc. The assets and liabilities of GLPI were recorded at their respective historical carrying values at the time of the Spin-Off. In April 2016, theCompany acquired substantially all of the real estate assets of Pinnacle for approximately $4.8 billion. GLPI leases these assets back to Pinnacle, under atriple-net lease with an initial term of 10 years with no purchase option, followed by five 5-year renewal options (exercisable by Pinnacle) on the same termsand conditions. See Note 4 to the Consolidated Financial Statements for further details surrounding the Pinnacle acquisition.GLPI's primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net leasearrangements. As of December 31, 2017, GLPI's portfolio consisted of 38 gaming and related facilities, including the TRS Properties, the real propertyassociated with 20 gaming and related facilities operated by Penn, the real property associated with 15 gaming and related facilities operated by Pinnacle andthe real property associated with the Casino Queen in East St. Louis, Illinois. These facilities are geographically diversified across 14 states and containapproximately 15.2 million of rentable square feet. As of December 31, 2017, our properties were 100% occupied.We expect to grow our portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators under prudent terms.For example, on December 17, 2017, the Company entered into agreements to purchase two additional properties, Plainridge Park Casino and Belterra ParkGaming & Entertainment from Penn and Pinnacle, respectively. We will acquire these properties in connection with the proposed acquisition of Pinnacle byPenn pursuant to a definitive agreement and plan of merger between them, also dated December 17, 2017. Subject to and concurrently with the completion ofthe Merger, we have agreed to, among other things, amend our master lease with Pinnacle to allow for the sale by Pinnacle of the operating assets at AmeristarCasino Hotel Kansas City, Ameristar Casino Resort Spa St. Charles and Belterra Casino Resort to Boyd and to enter into a new master lease agreement withBoyd on terms similar to the Company’s existing leases. The transaction is expected to add additional annual rental revenue of approximately $46 millionupon closing. The transaction which is subject to regulatory approval is expected to close in the second half of 2018.Additionally, we believe we have the ability to leverage the expertise our management team has developed over the years to secure additionalavenues for growth beyond the gaming industry.As of December 31, 2017, the majority of our earnings are the result of the rental revenues we receive from our triple-net Master Leases with Pennand Pinnacle. Additionally, we have rental revenue from the Casino Queen property which is39Table of Contentsleased back to a third party operator on a triple-net basis and the Meadows property which is leased to Pinnacle under a triple-net lease separate from thePinnacle Master Lease. In addition to rent, the tenants are required to pay the following executory costs: (1) all facility maintenance, (2) all insurancerequired in connection with the leased properties and the business conducted on the leased properties, including coverage of the landlord's interests, (3) taxeslevied on or with respect to the leased properties (other than taxes on the income of the lessor) and (4) all utilities and other services necessary or appropriatefor the leased properties and the business conducted on the leased properties. Additionally, in accordance with ASC 605, we record revenue for the real estate taxes paid by our tenants on the leased properties with an offsettingexpense in general and administrative expense within the consolidated statement of income, as we believe we are the primary obligor. Similarly, we recordrevenue for the ground lease rent paid by our tenants with an offsetting expense in general and administrative expense within the consolidated statement ofincome as we have concluded that as the lessee we are the primary obligor under the ground leases. We sublease these ground leases back to our tenants, whoare responsible for payment directly to the landlord. Gaming revenue generated by our TRS Properties is derived primarily from video lottery gaming revenue and to a lesser extent, table game andpoker revenue, which is highly dependent upon the volume and spending levels of customers at our TRS Properties. Other revenues at our TRS Properties arederived from dining, retail, and certain other ancillary activities.Our Competitive StrengthsWe believe the following competitive strengths will contribute significantly to our success:Geographically Diverse Property PortfolioAs of December 31, 2017, our portfolio consisted of 38 gaming and related facilities. Our portfolio comprises approximately 15.4 million of propertysquare footage and over 5,200 acres of owned and leased land and is broadly diversified by location across 14 states. Our geographic diversification will limitthe effect of a decline in any one regional market on our overall performance.Financially Secure TenantsAs of December 31, 2017, substantially all of the Company's real estate properties were leased to Penn or Pinnacle and approximately 53% and 45%of the Company's collective rental revenues and income from direct financing lease were derived from tenant leases with Penn and Pinnacle, respectively.Penn and Pinnacle are both leading, diversified, multi-jurisdictional owners and managers of gaming and pari-mutuel properties and established gamingproviders with strong financial performance. Penn and Pinnacle are publicly traded companies that are subject to the informational filing requirements of theSecurities Exchange Act of 1934, as amended, and are required to file periodic reports on Form 10-K and Form 10-Q and current reports on Form 8-K with theSecurities and Exchange Commission. Readers are directed to Penn and Pinnacle's respective websites for further financial information on these companies.As disclosed above, Penn has entered into an agreement to acquire Pinnacle and we expect that transaction to close in the second half of 2018.Long-Term, Triple-Net Lease StructureOur real estate properties are leased under long-term triple-net leases guaranteed by our tenants, pursuant to which the tenant is responsible for allfacility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or withrespect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leasedproperties.Flexible UPREIT StructureWe have the flexibility to operate through an umbrella partnership, commonly referred to as an UPREIT structure, in which substantially all of ourproperties and assets are held by GLP Capital or by subsidiaries of GLP Capital. Conducting business through GLP Capital allows us flexibility in the mannerin which we structure and acquire properties. In particular, an UPREIT structure enables us to acquire additional properties from sellers in exchange forlimited partnership units, which provides property owners the opportunity to defer the tax consequences that would otherwise arise from a sale of their realproperties and other assets to us. As a result, this structure potentially may facilitate our acquisition of assets in a more efficient manner and may allow us toacquire assets that the owner would otherwise be unwilling to sell because of tax considerations. We believe that this flexibility will provide us an advantagein seeking future acquisitions.40Table of ContentsExperienced and Committed Management TeamAlthough our management team has limited experience in operating a REIT, it has extensive gaming and real estate experience. Peter M. Carlino,chief executive officer of GLPI, has more than 30 years of experience in the acquisition and development of gaming facilities and other real estate projects.William J. Clifford, chief financial officer of GLPI, is a finance professional with more than 30 years of experience in the gaming industry, including fouryears of gaming regulatory experience, sixteen years of casino property operations, and sixteen years of corporate experience. Through years of publiccompany experience, our management team also has extensive experience accessing both debt and equity capital markets to fund growth and maintain aflexible capital structure.Segment Information Consistent with how our Chief Operating Decision Maker reviews and assesses our financial performance, we have two reportable segments, GLPCapital and the TRS Properties. The GLP Capital reportable segment consists of the leased real property and represents the majority of our business. The TRSProperties reportable segment consists of Hollywood Casino Perryville and Hollywood Casino Baton Rouge. Executive Summary Financial Highlights We reported net revenues and income from operations of $971.3 million and $605.5 million, respectively, for the year ended December 31, 2017,compared to $828.3 million and $480.6 million, respectively, for the year ended December 31, 2016. The major factors affecting our results for the yearended December 31, 2017, as compared to the year ended December 31, 2016, were:•During April 2016, we acquired substantially all of Pinnacle's real estate assets. These assets are leased back to Pinnacle under a Master Lease whichis bifurcated between an operating lease and a direct financing lease, resulting in the recognition of rental income for the land assets leased toPinnacle and income from a direct financing lease for the building assets leased to Pinnacle. Additionally, during September 2016, we acquired thereal estate assets of the Meadows and leased these assets to Pinnacle under a single property triple-net lease and during May of 2017, we acquiredthe real estate assets of Bally's Casino Tunica (subsequently re-branded as the 1st Jackpot Casino) and Resorts Casino Tunica (the "TunicaProperties") and leased these assets to Penn under the Penn Master Lease. Rental revenue and income from the direct financing lease were $829.2million and $684.2 million for the years ended December 31, 2017 and 2016, respectively. Rental revenue and income from the direct financinglease increased by $145.0 million for the year ended December 31, 2017, as compared to the year ended December 31, 2016, primarily due to thePinnacle transaction, which increased rental income, income from the direct financing lease and revenue recorded for real estate taxes paid by ourtenants and the Tunica and Meadows transactions, which increased both rental income and revenue recorded for real estate taxes paid by our tenants.•Net revenues for our TRS Properties decreased by $2.0 million for the year ended December 31, 2017, as compared to the prior year, due to decreasedrevenues at both Hollywood Casino Baton Rouge and Hollywood Casino Perryville. The largest driver of the decrease resulted from lower revenuesat Hollywood Casino Perryville, related to the outsourcing of its food and beverage outlets to a third party provider during the first quarter of 2017. •Total operating expenses increased by $18.2 million for the year ended December 31, 2017, as compared to the prior year, driven by increases in realestate taxes, primarily as a result of the addition of the Pinnacle and Meadows properties to our real estate portfolio and land right and ground rentlease expense, primarily related to the land rights acquired with the Pinnacle and Tunica transactions, partially offset by a decline in general andadministrative expenses.•Other expenses, net increased by $31.4 million for the year ended December 31, 2017, as compared to the prior year, driven by increases in interestexpense from the Company's April 2016 borrowings, which were utilized to finance the Pinnacle transaction. •Net income increased by $91.3 million for the year ended December 31, 2017, compared to the prior year, primarily due to the variances explainedabove.41Table of ContentsSegment Developments The following are recent developments that have had or are likely to have an impact on us by segment: GLP Capital•On May 1, 2017, the Company purchased the real property assets of Bally's Casino Tunica and Resorts Casino Tunica for $82.9 million. Pennpurchased the operating assets of the Tunica Properties directly from the seller, operates both properties and leases the real property assets from theCompany under the Penn Master Lease. The initial annual cash rent of $9.0 million for the Tunica Properties will be subject to rent escalators andadjustments consistent with the other properties under the Penn Master Lease.•On September 9, 2016, the Company purchased the real property assets of the Meadows from Cannery Casino Resorts, LLC. Concurrent with theCompany's purchase of the Meadows' real estate assets, Pinnacle purchased the entities holding the Meadows gaming and racing licenses andoperating assets directly from CCR. GLPI leases the Meadows real property assets to Pinnacle under a triple-net lease separate from the PinnacleMaster Lease with an initial term of 10 years with no purchase option and the option to renew for three successive five-year terms and one four-yearterm, at Pinnacle's option.•On April 28, 2016, the Company acquired substantially all of the real estate assets of Pinnacle, for approximately $4.8 billion. GLPI leases theseassets back to Pinnacle, under a triple-net lease with an initial term of 10 years with no purchase option, followed by five 5-year renewal options(exercisable by Pinnacle) on the same terms and conditions. The Pinnacle Master Lease added 14 properties to our real estate portfolio.TRS Properties•During the first quarter of 2017, Hollywood Casino Perryville outsourced the operation of its food and beverage outlets to a third party provider.Employees of these outlets are now employees of the third party; therefore both Hollywood Casino Perryville's revenues and expenses related tofood and beverage decreased during the year ended December 31, 2017, as compared to the prior year.Critical Accounting EstimatesWe make certain judgments and use certain estimates and assumptions when applying accounting principles in the preparation of our consolidatedfinancial statements. The nature of the estimates and assumptions are material due to the levels of subjectivity and judgment necessary to account for highlyuncertain factors or the susceptibility of such factors to change. We have identified the accounting for leases, income taxes, real estate investments, andgoodwill and other intangible assets as critical accounting estimates, as they are the most important to our financial statement presentation and requiredifficult, subjective and complex judgments.We believe the current assumptions and other considerations used to estimate amounts reflected in our consolidated financial statements areappropriate. However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidatedfinancial statements, the resulting changes could have a material adverse effect on our consolidated results of operations and, in certain situations, could havea material adverse effect on our consolidated financial condition.Leases As a REIT, the majority of our revenues are derived from rent received from our tenants under long-term triple-net leases. Currently, we have MasterLeases with both Penn and Pinnacle under which we lease 20 and 14 properties, respectively, to these tenants. We also have a long-term lease with CasinoQueen and a separate single property lease by which we lease the Meadows' real estate assets to Pinnacle. The accounting guidance under ASC 840 - Leases("ASC 840") is complex and requires the use of judgments and assumptions by management to determine the proper accounting treatment of a lease. Weperform a lease classification test upon the entry into any new lease, to determine if we will account for the lease as a capital or operating lease. The revenuerecognition model and thus the presentation of our financial statements is significantly different under capital leases and operating leases.Under the operating lease model, as the lessor, the assets we lease remain on our books and we record rental revenues on a straight-line basis over thelease term. This includes the recognition of percentage rents that are fixed and determinable at the lease inception date on a straight-line basis over the entirelease term, resulting in the recognition of deferred rental revenue42Table of Contentson our consolidated balance sheets. Deferred rental revenue is amortized to rental revenue on a straight-line basis over the remainder of the lease term. Thelease term includes the initial non-cancelable lease term and any reasonably assured renewal periods. Contingent rental income that is not fixed anddeterminable at lease inception is recognized only when the lessee achieves the specified target. Recognition of rental income commences when control ofthe facility has been transferred to the tenant. Under operating lease treatment, assets we own and lease to tenants are recorded on our consolidated balancesheet as real estate investments.Under the direct financing lease model, however, at lease inception we record an investment in direct financing lease on our consolidated balancesheet rather than recording the actual assets we own and the cash rent we receive from tenants is not entirely recorded as rental revenue, but rather a portion isrecorded as interest income and a portion is recorded as a reduction to the direct financing lease receivable. Under ASC 840, for leases of both building andland, leases may be bifurcated between operating and capital leases, with the land portion of the lease typically qualifying for operating lease treatment. Todetermine if the building portion of a lease triggers capital lease treatment we conduct the four lease tests in ASC 840 outlined below. If a lease meets any ofthe four criteria below, it is accounted for as a capital lease.1) Transfer of ownership - The lease transfers ownership of the property to the lessee by the end of the lease term. This criterion is met in situations inwhich the lease agreement provides for the transfer of title at or shortly after the end of the lease term in exchange for the payment of a nominal fee, forexample, the minimum required by statutory regulation to transfer title.2) Bargain purchase option - The lease contains a bargain purchase option, which is a provision allowing the lessee, at its option, to purchase the leasedproperty for a price which is sufficiently lower than the expected fair value of the property at the date the option becomes exercisable. In addition, theexercise of the option must be reasonably assured at lease inception.3) Lease term - The lease term is equal to 75 percent or more of the estimated economic life of the leased property. However, if the beginning of the leaseterm falls within the last 25 percent of the total estimated economic life of the leased property, including earlier years of use, this criterion shall not be usedfor purposes of classifying the lease. This test is conducted on a property by property basis.4) Minimum lease payments - The present value of the minimum lease payments at the beginning of the lease term, excluding that portion of thepayments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, including any profit thereon, equals or exceeds90% of the fair value of the leased property to the lessor at lease inception less any related investment tax credit retained by the lessor and expected to berealized by the lessor. If the beginning of the lease term falls within the last 25% of the total estimated economic life of the leased property, including earlieryears of use, this criterion shall not be used for purposes of classifying the lease.The tests outlined above, as well as the resulting calculations, require subjective judgments, such as determining, at lease inception, the fair value ofthe assets, the residual value of the assets at the end of the lease term, the likelihood a tenant will exercise all renewal options (in order to determine the leaseterm), the estimated remaining economic life of the leased assets, the incremental borrowing rate of the lessee and the interest rate implicit in the lease. Aslight change in estimate or judgment can result in a materially different financial statement presentation.Our net investment in the direct financing lease is evaluated for impairment as necessary, if indicators of impairment are present, to determine if therehas been an-other-than-temporary decline in the residual value of the property or a change in the lessee's credit worthiness.Income TaxesWe elected on our U.S. federal income tax return for our taxable year that began on January 1, 2014 to be treated as a REIT and we, together with anindirect wholly-owned subsidiary of the Company, GLP Holdings, Inc., jointly elected to treat each of GLP Holdings, Inc., Louisiana Casino Cruises, Inc. andPenn Cecil Maryland, Inc. as a "taxable REIT subsidiary" effective on the first day of the first taxable year of GLPI as a REIT. We intend to continue to beorganized and to operate in a manner that will permit us to qualify as a REIT. To qualify as a REIT, we must meet certain organizational and operationalrequirements, including a requirement to distribute at least 90% of our annual REIT taxable income to shareholders determined without regard to thedividends paid deduction and excluding any net capital gain, meet the various other requirements imposed by the Code relating to matters such as operatingresults, asset holdings, distribution levels, and diversity of stock ownership. As a REIT, we generally will not be subject to federal income tax on income thatwe distribute as dividends to our shareholders. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax, including anyapplicable alternative minimum tax, on our taxable income at regular corporate income tax rates, and dividends paid to our shareholders would not bedeductible by us in computing taxable income. Any resulting corporate liability could be substantial and could43Table of Contentsmaterially and adversely affect our net income and net cash available for distribution to shareholders. Unless we were entitled to relief under certain Codeprovisions, we also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify tobe taxed as a REIT. It is not possible to state whether in all circumstances we would be entitled to this statutory relief.Our TRS Properties are able to engage in activities resulting in income that would be not qualifying income for a REIT. As a result, certain activitiesof the Company which occur within our TRS Properties are subject to federal and state income taxes.Real Estate InvestmentsReal estate investments primarily represent land and buildings leased to the Company's tenants. Real estate investments that we received inconnection with the Spin-Off were contributed to us at Penn's historical carrying amount. We record the acquisition of real estate at fair value, includingacquisition and closing costs. The cost of properties developed by GLPI include costs of construction, property taxes, interest and other miscellaneous costsincurred during the development period until the project is substantially complete and available for occupancy. We consider the period of future benefit ofthe asset to determine the appropriate useful lives. Depreciation is computed using a straight-line method over the estimated useful lives of the buildings andbuilding improvements. Additionally, the amortization of real estate assets subject to capital leases (for which GLPI is the lessee) is included within thedepreciation line item of the Company's consolidated statements of income.We continually monitor events and circumstances that could indicate that the carrying amount of our real estate investments may not be recoverableor realized. When indicators of potential impairment suggest that the carrying value of a real estate investment may not be recoverable, we estimate the fairvalue of the investment by calculating the undiscounted future cash flows from the use and eventual disposition of the investment. This amount is comparedto the asset's carrying value. If we determine the carrying amount is not recoverable, we would recognize an impairment charge equivalent to the amountrequired to reduce the carrying value of the asset to its estimated fair value, calculated in accordance with GAAP. We group our real estate investmentstogether by lease, the lowest level for which identifiable cash flows are available, in evaluating impairment. In assessing the recoverability of the carryingvalue, we must make assumptions regarding future cash flows and other factors. Factors considered in performing this assessment include current operatingresults, market and other applicable trends and residual values, as well as the effect of obsolescence, demand, competition and other factors. If these estimatesor the related assumptions change in the future, we may be required to record an impairment loss.Goodwill and Other Intangible AssetsAt December 31, 2017, we had $75.5 million in goodwill and $9.6 million in other intangible assets within our consolidated balance sheet, resultingfrom the contribution of Hollywood Casino Baton Rouge and Hollywood Casino Perryville in connection with the Spin-Off. Our goodwill resides on thebooks of our Hollywood Casino Baton Rouge subsidiary, while the other intangible asset represents a gaming license on the books of our Hollywood CasinoPerryville subsidiary. Both subsidiaries are members of the TRS Properties segment and are considered separate reporting units under ASC 350, "Intangibles -Goodwill and Other" ("ASC 350"). Goodwill is tested at the reporting unit level, which is an operating segment or one level below an operating segment forwhich discrete financial information is available.Under ASC 350, we are required to test goodwill for impairment at least annually and whenever events or circumstances indicate that it is more likelythan not that goodwill may be impaired. We have elected to perform our annual goodwill impairment test as of October 1 of each year. ASC 350 prescribes atwo-step goodwill impairment test, the first step which involves the determination of the fair value of each reporting unit and its comparison to the carryingamount. In order to determine the fair value of the Baton Rouge reporting unit, the Company utilized a discounted cash flow model, which relied onprojected EBITDA to determine the reporting unit's future cash flows. If the carrying amount exceeds the fair value in step 1, then step 2 of the impairmenttest is performed to determine the implied value of goodwill. If the implied value of goodwill is less than the goodwill allocated to the reporting unit, animpairment loss is recognized.In accordance with ASC 350, we consider the Hollywood Casino Perryville gaming license an indefinite-lived intangible asset that does not requireamortization based on our future expectations to operate this casino indefinitely as well as the gaming industry's historical experience in renewing theseintangible assets at minimal cost with various state gaming commissions. Rather, the gaming license is tested annually, or more frequently if indicators ofimpairment exist, for impairment by comparing the fair value of the recorded asset to its carrying amount. If the carrying amount of the indefinite-lifeintangible asset exceeds its fair value, an impairment loss is recognized. Hollywood Casino Perryville's gaming license will expire in September 2025, fifteenyears from the casino's opening date. We expect to expense any costs related to the gaming license renewal as incurred.44Table of ContentsWe assessed the fair value of our gaming license using the Greenfield Method under the income approach. The Greenfield Method estimates the fairvalue of the gaming license assuming we built a casino with similar utility to that of the existing facility. The method assumes a theoretical start-up companygoing into business without any assets other than the intangible asset being valued. As such the value of the license is a function of the following items:•Projected revenues and operating cash flows;•Theoretical construction costs and duration;•Pre-opening expenses;•Discounting that reflects the level of risk associated with receiving future cash flows attributable to the license; and•Remaining useful life of the license.The evaluation of goodwill and indefinite-lived intangible assets requires the use of estimates about future operating results to determine theestimated fair value of the reporting unit and the indefinite-lived intangible assets. We must make various assumptions and estimates in performing ourimpairment testing. The implied fair value includes estimates of future cash flows that are based on reasonable and supportable assumptions which representour best estimates of the cash flows expected to result from the use of the assets. Changes in estimates, increases in our cost of capital, reductions intransaction multiples, changes in operating and capital expenditure assumptions or application of alternative assumptions and definitions could producesignificantly different results. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from our estimates. If ourongoing estimates of future cash flows are not met, we may have to record additional impairment charges in future accounting periods. Our estimates of cashflows are based on the current regulatory and economic climates, as well as recent operating information and budgets. These estimates could be negativelyimpacted by changes in federal, state or local regulations, economic downturns, or other events.Forecasted cash flows can be significantly impacted by the local economy in which our subsidiaries operate. For example, increases inunemployment rates can result in decreased customer visitations and/or lower customer spend per visit. In addition, new legislation which approves gamingin nearby jurisdictions or further expands gaming in jurisdictions in which we operate can result in increased competition for the property. This generally hasa negative effect on profitability once competitors become established, as a certain level of cannibalization occurs absent an overall increase in customervisitations. Lastly, increases in gaming taxes approved by state regulatory bodies can negatively impact forecasted cash flows.Assumptions and estimates about future cash flow levels are complex and subjective. They are sensitive to changes in underlying assumptions andcan be affected by a variety of factors, including external factors, such as industry, geopolitical and economic trends, and internal factors, such as changes inour business strategy, which may reallocate capital and resources to different or new opportunities which management believes will enhance our overallvalue but may be to the detriment of our existing operations.We determined the fair value of our goodwill and gaming license as of October 1, 2017 utilizing the forecasted cash flow methods described aboveand compared these values to the carrying value of the assets on our balance sheet. In determining the fair value of each asset, we incorporated recentoperating trends of both TRS properties into our current year projections. After consideration of these facts, the fair value of both assets exceeded theircarrying amounts, and as of October 1, 2017, our goodwill and gaming license were not impaired.As discussed in Note 2 to the Consolidated Financial Statements, the FASB recently issued ASU 2017-04, Intangibles - Goodwill and Other (Topic350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which simplifies the goodwill impairment test for public companies by eliminatingStep 2 from the test. Upon the adoption of ASU 2017-04, an impairment charge is simply recorded as the difference between the carrying value and fair valueof a reporting unit's goodwill, when the carrying value exceeds fair value. See Note 2 to the Consolidated Financial Statements for further details on the newstandard. The Company does not expect the adoption of ASU 2017-04 to significantly impact its goodwill impairment testing, as it has not recognized animpairment charge for goodwill or intangible assets since inception.45Table of ContentsResults of Operations The following are the most important factors and trends that contribute or may contribute to our operating performance:•The fact that a wholly-owned subsidiary of Penn and a wholly-owned subsidiary of Pinnacle lease substantially all of our properties, pursuant totheir respective Master Leases, and account for a significant portion of our revenue.•The risks related to economic conditions and the effect of such conditions on consumer spending for leisure and gaming activities, which maynegatively impact our gaming tenants and operators. •The fact that the rules and regulations of U.S. federal income taxation are constantly under review by legislators, the IRS and the U.S. Department ofthe Treasury. Changes to the tax laws or interpretations thereof, with or without retroactive application, could materially and adversely affect GLPI'sinvestors or GLPI.The consolidated results of operations for the years ended December 31, 2017, 2016 and 2015 are summarized below: Year Ended December 31,2017 2016 2015(in thousands)Revenues Rental income$671,190 $567,444 $392,075Income from direct financing lease74,333 48,917 —Real estate taxes paid by tenants83,698 67,843 35,050Total rental revenue and income from direct financing lease829,221 684,204 427,125Gaming, food, beverage and other146,866 149,661 153,523Total revenues976,087 833,865 580,648Less promotional allowances(4,780) (5,610) (5,595)Net revenues971,307 828,255 575,053Operating expenses Gaming, food, beverage and other80,487 82,463 85,774Real estate taxes84,666 69,448 36,412Land rights and ground lease expense24,005 14,799 2,812General and administrative63,151 71,368 82,857Depreciation113,480 109,554 109,783Total operating expenses365,789 347,632 317,638Income from operations$605,518 $480,623 $257,415 Certain information regarding our results of operations by segment for the years ended December 31, 2017, 2016 and 2015 is summarized below: Net Revenues Income from OperationsYear Ended December 31,2017 2016 2015 2017 2016 2015(in thousands)GLP Capital$829,221 $684,204 $427,125 $578,661 $454,682 $232,701TRS Properties142,086 144,051 147,928 26,857 25,941 24,714Total$971,307 $828,255 $575,053 $605,518 $480,623 $257,415FFO, AFFO and Adjusted EBITDA Funds From Operations ("FFO"), Adjusted Funds From Operations ("AFFO") and Adjusted EBITDA are non-GAAP financial measures used by theCompany as performance measures for benchmarking against the Company’s peers and as internal measures of business operating performance which is usedas a bonus metric. The Company believes FFO, AFFO and Adjusted EBITDA provide a meaningful perspective of the underlying operating performance ofthe Company’s current business. This is especially true since these measures exclude real estate depreciation and we believe that real estate values fluctuatebased on market conditions rather than depreciating in value ratably on a straight-line basis over time. In addition, in46Table of Contentsorder for the Company to qualify as a REIT, it must distribute 90% of its REIT taxable income annually. The Company adjusts AFFO accordingly to provideour investors an estimate of the taxable income available for this distribution requirement.FFO is a non-GAAP financial measure that is considered a supplemental measure for the real estate industry and a supplement to GAAP measures.The National Association of Real Estate Investment Trusts defines FFO as net income (computed in accordance with GAAP), excluding (gains) or losses fromsales of property and real estate depreciation. We define AFFO as FFO excluding stock based compensation expense, debt issuance costs amortization, otherdepreciation, amortization of land rights, straight-line rent adjustments and direct financing lease adjustments, reduced by maintenance capital expenditures.Finally, we define Adjusted EBITDA as net income excluding interest, taxes on income, depreciation, (gains) or losses from sales of property, stock basedcompensation expense, straight-line rent adjustments, direct financing lease adjustments and the amortization of land rights. FFO, AFFO and Adjusted EBITDA are not recognized terms under GAAP. Because certain companies do not calculate FFO, AFFO and AdjustedEBITDA in the same way and certain other companies may not perform such calculation, those measures as used by other companies may not be consistentwith the way the Company calculates such measures and should not be considered as alternative measures of operating profit or net income. The Company’spresentation of these measures does not replace the presentation of the Company’s financial results in accordance with GAAP.The reconciliation of the Company’s net income per GAAP to FFO, AFFO, and Adjusted EBITDA for the years ended December 31, 2017, 2016 and2015 is as follows: Year Ended December 31,2017 2016 2015 (in thousands)Net income$380,598 $289,305 $128,122Losses (gains) from dispositions of property530 (455) 185Real estate depreciation100,576 96,074 95,511Funds from operations$481,704 $384,924 $223,818Straight-line rent adjustments65,971 58,673 55,825Direct financing lease adjustments73,072 48,533 —Other depreciation12,904 13,480 14,272Amortization of land rights10,355 6,163 —Amortization of debt issuance costs (1)13,026 15,146 14,016Stock based compensation15,636 18,312 16,811Maintenance CAPEX(3,178) (3,111) (2,953)Adjusted funds from operations$669,490 $542,120 $321,789Interest, net215,133 183,773 121,851Income tax expense9,787 7,545 7,442Maintenance CAPEX3,178 3,111 2,953Amortization of debt issuance costs (1)(13,026) (15,146) (14,016)Adjusted EBITDA$884,562 $721,403 $440,019(1) Such amortization is a non-cash component included in interest, net.47Table of ContentsThe reconciliation of each segment’s net income per GAAP to FFO, AFFO, and Adjusted EBITDA for the years ended December 31, 2017, 2016 and2015 is as follows: GLP Capital TRS PropertiesYear Ended December 31, 2017 2016 2015 2017 2016 2015 (in thousands)Net income $372,832 $280,295 $119,914 $7,766 $9,010 $8,208(Gains) losses from dispositions of property — (471) 152 530 16 33Real estate depreciation 100,576 96,074 95,511 — — —Funds from operations $473,408 $375,898 $215,577 $8,296 $9,026 $8,241Straight-line rent adjustments 65,971 58,673 55,825 — — —Direct financing lease adjustments 73,072 48,533 — — — —Other depreciation 2,076 2,097 1,913 10,828 11,383 12,359Amortization of land rights 10,355 6,163 — — — —Debt issuance costs amortization (1) 13,026 15,146 14,016 — — —Stock based compensation 15,636 18,312 16,811 — — —Maintenance CAPEX — — — (3,178) (3,111) (2,953)Adjusted funds from operations $653,544 $524,822 $304,142 $15,946 $17,298 $17,647Interest, net (2) 204,730 173,371 111,449 10,403 10,402 10,402Income tax expense 1,099 1,016 1,338 8,688 6,529 6,104Maintenance CAPEX — — — 3,178 3,111 2,953Debt issuance costs amortization (1) (13,026) (15,146) (14,016) — — —Adjusted EBITDA $846,347 $684,063 $402,913 $38,215 $37,340 $37,106 (1) Such amortization is a non-cash component included in interest, net.(2) Interest expense, net for the GLP Capital segment is net of an intercompany interest elimination of $10.4 million for the years ended December 31,2017, 2016 and 2015. 2017 Compared with 2016Net income, FFO, AFFO, and Adjusted EBITDA for our GLP Capital segment were $372.8 million, $473.4 million, $653.5 million and $846.3million, respectively, for the year ended December 31, 2017. This compared to net income, FFO, AFFO, and Adjusted EBITDA, for our GLP Capital segmentof $280.3 million, $375.9 million, $524.8 million and $684.1 million, respectively, for the year ended December 31, 2016. The significant increase in netincome in our GLP Capital segment was primarily driven by a $145.0 million increase in net revenues, partially offset by a $21.0 million increase inoperating expenses and a $31.4 million increase in interest, net. The increase in net revenues in our GLP Capital segment was primarily due to the Pinnacletransaction, which increased rental income, income from the direct financing lease and revenue recorded for real estate taxes paid by our tenants and theTunica and Meadows transactions, which increased both rental income and revenue recorded for real estate taxes paid by our tenants. The increase inoperating expenses in our GLP Capital segment was driven by increases in real estate taxes, primarily as a result of the addition of the Pinnacle and Meadowsproperties to our real estate portfolio during 2016 and land right and ground rent lease expense, primarily related to the land rights acquired with the Pinnacleand Tunica transactions, partially offset by a decline in general and administrative expenses. The increase in interest, net was driven by higher interestexpense related to the Company's additional borrowings incurred to finance the Pinnacle acquisition. The changes described above also led to higher FFO forthe year ended December 31, 2017, as compared to the year ended December 31, 2016. The increase in AFFO for our GLP Capital segment was primarilydriven by the changes described above, as well as, increases in adjustments for our direct financing lease, increased amortization of land rights related to theacquired ground leases, increased straight-line rent adjustments related to our Meadows Lease and the addition of the Tunica Properties to the Penn MasterLease, partially offset by lower debt issuance costs amortization and stock based compensation, all of which are added back for purposes of calculatingAFFO. Direct financing lease adjustments represent the portion of cash rent we receive from tenants that is applied against our lease receivable and thus notrecorded as revenue and the amortization of land rights represents the non-cash amortization of the value assigned to the Company's acquired ground leases.These adjustments are added back to arrive at AFFO because they represent, in the case of the direct financing lease adjustments, cash we have received andrecorded in taxable income and in the case of the amortization of land rights, non-cash48Table of Contentscharges which are non-deductible for tax purposes. Therefore, these adjustments help our investors better understand the components of our taxable incomewhich must be distributed to our shareholders. The increase in Adjusted EBITDA for our GLP Capital segment was primarily driven by the increases in AFFOdescribed above, as well as, a higher add back for interest.Net income and FFO for our TRS Properties segment decreased by $1.2 million and $0.7 million, respectively, for the year ended December 31,2017, as compared to the year ended December 31, 2016, primarily due to declining revenues partially offset by decreased expenses. AFFO for our TRSProperties segment decreased by $1.4 million for the year ended December 31, 2017, as compared to the year ended December 31, 2016, primarily due thereasons described above, as well as, lower depreciation expense due to certain assets reaching full depreciation. Adjusted EBITDA for our TRS Propertiessegment increased by $0.9 million for the year ended December 31, 2017, as compared to the year ended December 31, 2016, primarily due to theexplanations described above, in addition to higher income taxes in the year ended December 31, 2017.2016 Compared with 2015Net income, FFO, AFFO, and Adjusted EBITDA for our GLP Capital segment were $280.3 million, $375.9 million, $524.8 million and $684.1million, respectively, for the year ended December 31, 2016. This compared to net income, FFO, AFFO, and Adjusted EBITDA, for our GLP Capital segmentof $119.9 million, $215.6 million, $304.1 million and $402.9 million, respectively, for the year ended December 31, 2015. The significant increase in netincome in our GLP Capital segment was primarily driven by a $257.1 million increase in net revenues, partially offset by a $32.9 million increase in realestate taxes and a $61.7 million increase in interest expense. The increase in net revenues in our GLP Capital segment was primarily due to the portion of therent received under the Pinnacle Master Lease recognized as rental income and as income from the direct financing lease, and to a lesser extent the rentalincome recognized under the Meadows Lease, as well as the impact of the Penn rent escalator and an increase in real estate taxes paid by tenants. Interestexpense increased due to the Company's additional borrowings incurred to finance the Pinnacle acquisition. The changes described above also led to higherFFO for the year ended December 31, 2016, as compared to the year ended December 31, 2015. The increase in AFFO for our GLP Capital segment wasprimarily driven by the changes described above, as well as, the inclusion of adjustments for our direct financing lease and the amortization of land rights,increased straight-line rent adjustments related to our new Meadows Lease and higher stock-based compensation expense, which are added back for purposesof calculating AFFO. The increase in Adjusted EBITDA for our GLP Capital segment was primarily driven by the increases in AFFO described above, as wellas, a higher add back for interest, less the increase in amortized debt issuance costs, which are non-cash and excluded from Adjusted EBITDA.Net income and FFO for our TRS Properties segment both increased by $0.8 million for the year ended December 31, 2016 as compared to the yearended December 31, 2015, primarily due to expense management at the TRS Properties, despite declining revenues. AFFO for our TRS Properties segmentdecreased by $0.3 million for the year ended December 31, 2016, as compared to the year ended December 31, 2015, primarily due to lower depreciationexpense due to certain assets reaching full depreciation. Adjusted EBITDA for our TRS Properties segment increased by $0.2 million for the year endedDecember 31, 2016, as compared to the year ended December 31, 2015, primarily due to the explanations described above, in addition to higher incometaxes in the year ended December 31, 2016.Revenues Revenues for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands): PercentageYear Ended December 31, 2017 2016 Variance VarianceTotal rental revenue and income from direct financing lease $829,221 $684,204 $145,017 21.2 %Gaming, food, beverage and other 146,866 149,661 (2,795) (1.9)%Total revenues 976,087 833,865 142,222 17.1 %Less promotional allowances (4,780) (5,610) 830 14.8 %Net revenues $971,307 $828,255 $143,052 17.3 % 49Table of Contents PercentageYear Ended December 31, 2016 2015 Variance VarianceTotal rental revenue and income from direct financing lease $684,204 $427,125 $257,079 60.2 %Gaming, food, beverage and other 149,661 153,523 (3,862) (2.5)%Total revenues 833,865 580,648 253,217 43.6 %Less promotional allowances (5,610) (5,595) (15) (0.3)%Net revenues $828,255 $575,053 $253,202 44.0 % Total rental revenue and income from direct financing lease2017 Compared to 2016For the years ended December 31, 2017 and 2016, rental revenue and income from the direct financing lease were $829.2 million and $684.2million, respectively, for our GLP Capital segment, which included $83.7 million and $67.8 million, respectively, of revenue for the real estate taxes paid byour tenants on the leased properties. During April 2016, we acquired the real estate assets of Pinnacle and immediately leased these assets back to Pinnacleunder a long-term triple-net master lease. Under ASC 840, the Pinnacle lease is bifurcated between an operating and direct financing lease, resulting in therecognition of rental revenue for the land portion of the lease and interest income from the direct financing lease, relating to the leased building assets.Additionally, during September 2016, we acquired the real estate assets of the Meadows and leased these assets to Pinnacle under a single property triple-netlease and during May 2017, we acquired the real estate assets of the Tunica Properties and leased these assets to Penn under the Penn Master Lease.In accordance with ASC 605, the Company is required to present the real estate taxes paid by its tenants on the leased properties as revenue with anoffsetting expense on its consolidated statement of operations, as the Company believes it is the primary obligor. Similarly, the Company records revenue forthe ground lease rent paid by its tenants with an offsetting expense in land rights and ground lease expense within the consolidated statements of income asthe Company has concluded that as the lessee it is the primary obligor under the ground leases. The Company subleases these ground leases back to itstenants, who are responsible for payment directly to the landlord.Rental revenue and income from the direct financing lease increased $145.0 million or 21.2% for the year ended December 31, 2017, as compared tothe year ended December 31, 2016, primarily due to a full year of rent for the portion of the rent received under the Pinnacle Master Lease recognized asrental income and as income from the direct financing lease, a full year of rent received under the Meadows Lease and from the addition of the TunicaProperties to the Penn Master Lease, as well as the impact of the Penn and Pinnacle rent escalators, improved results at our two Ohio properties with monthlyvariable rent and an increase in real estate taxes, primarily resulting from the addition of the Pinnacle properties to our real estate portfolio. Specifically,Pinnacle contributed $103.1 million of rental revenue and income from the direct financing lease to the increase in net revenues for the year endedDecember 31, 2017, as compared to the year ended December 31, 2016. The Penn properties contributed $14.5 million to the increase in net revenues for theyear ended December 31, 2017, as compared to the year ended December 31, 2016, resulting from the addition of the Tunica Properties, the impact of the rentescalator and the performance at the Ohio properties, while the Meadows Lease contributed $11.4 million to the increase in net revenues for the year endedDecember 31, 2017, as compared to the prior year. Lastly, real estate taxes contributed $15.8 million to the increase in net revenues for the year endedDecember 31, 2017, as compared to the prior year period.2016 Compared to 2015For the years ended December 31, 2016 and 2015, rental revenue and income from the direct financing lease were $684.2 million and $427.1million, respectively, for our GLP Capital segment, which included $67.8 million and $35.0 million, respectively, of revenue for the real estate taxes paid byour tenants on the leased properties. Rental revenue and income from the direct financing lease increased $257.1 million or 60.2% for the year ended December 31, 2016, as compared tothe year ended December 31, 2015, primarily due to the portion of the rent received under the Pinnacle Master Lease recognized as rental income and asincome from the direct financing lease, as well as the impact of the Penn rent escalator and an increase in real estate taxes, primarily resulting from theaddition of the Pinnacle properties to our real estate portfolio. Specifically, Pinnacle contributed $164.7 million of rental revenue, $48.9 million of interestincome from the direct financing lease and $23.9 million of real estate tax income to net revenues for the year ended December 31, 2016. The Meadowscontributed $5.1 million of rental revenue and $0.6 million of real estate tax income to net revenues for the year ended December 31, 2016, while the Pennrent escalator contributed an increase of $4.9 million of rental revenue for the year ended December 31, 2016, as compared to the year ended December 31,2015.50Table of ContentsGaming, food, beverage and other revenue2017 Compared to 2016 Gaming, food, beverage and other revenue for our TRS Properties segment decreased by $2.8 million, or 1.9%, for the year ended December 31,2017, as compared to the year ended December 31, 2016, due to decreased gaming, food, beverage and other revenues of $2.5 million and $0.3 million atHollywood Casino Perryville and Hollywood Baton Rouge, respectively. The largest driver of the decrease resulted from lower revenues at HollywoodCasino Perryville, related to the outsourcing of its food and beverage outlets to a third party provider during the first quarter of 2017.2016 Compared to 2015Gaming, food, beverage and other revenue for our TRS Properties segment decreased by $3.9 million, or 2.5%, for the year ended December 31,2016, as compared to the year ended December 31, 2015, primarily due to decreased gaming revenues of $2.0 million and $1.7 million at Hollywood CasinoPerryville and Hollywood Baton Rouge, respectively, resulting from lower patronage at both properties.Operating Expenses Operating expenses for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands): PercentageYear Ended December 31, 2017 2016 Variance VarianceGaming, food, beverage and other $80,487 $82,463 $(1,976) (2.4)%Real estate taxes 84,666 69,448 15,218 21.9 %Land rights and ground lease expense 24,005 14,799 9,206 62.2 %General and administrative 63,151 71,368 (8,217) (11.5)%Depreciation 113,480 109,554 3,926 3.6 %Total operating expenses $365,789 $347,632 $18,157 5.2 % PercentageYear Ended December 31, 2016 2015 Variance VarianceGaming, food, beverage and other $82,463 $85,774 $(3,311) (3.9)%Real estate taxes 69,448 36,412 33,036 90.7 %Land rights and ground lease expense 14,799 2,812 11,987 426.3 %General and administrative 71,368 82,857 (11,489) (13.9)%Depreciation 109,554 109,783 (229) (0.2)%Total operating expenses $347,632 $317,638 $29,994 9.4 % Gaming, food, beverage and other expense 2017 Compared with 2016Gaming, food, beverage and other expense for our TRS Properties segment decreased by approximately $2.0 million, or 2.4%, for the year endedDecember 31, 2017, as compared to the year ended December 31, 2016, primarily due to lower expenses resulting from the outsourcing of the operations ofthe food and beverage outlets at Hollywood Casino Perryville during the first quarter of 2017 and lower gaming and admissions taxes, resulting from lowerrevenues at both TRS Properties.2016 Compared with 2015Gaming, food, beverage and other expense for our TRS Properties segment decreased by approximately $3.3 million, or 3.9%, for the year endedDecember 31, 2016, as compared to the year ended December 31, 2015, primarily due to lower gaming and admissions taxes, resulting from lower revenues atboth TRS Properties, as well as a decrease in the gaming tax rate on revenue generated from slot machines at Hollywood Casino Perryville. During the yearended December 31, 2015, Hollywood Casino Perryville directly purchased slot machines in exchange for gaming tax reductions from the state of Maryland,lowering its tax rate on gaming revenues derived from slot machines for the year ended December 31, 2016 as compared to the year ended December 31,2015.51Table of ContentsReal estate taxes2017 Compared with 2016 Real estate taxes increased by $15.2 million, or 21.9%, for the year ended December 31, 2017, as compared to the year ended December 31, 2016,primarily due to a full year of the real estate tax expense attributable to the acquired Pinnacle and Meadows properties. Although this amount is paid by ourtenants, we are required to present this amount in both revenues and expense for financial reporting purposes under ASC 605. 2016 Compared with 2015 Real estate taxes increased by approximately $33.0 million, or 90.7%, for the year ended December 31, 2016, as compared to the year endedDecember 31, 2015, primarily due to the inclusion of the real estate tax expense attributable to the acquired Pinnacle properties.Land rights and ground lease expense2017 Compared with 2016 Land rights and ground lease expense includes the amortization of land rights and rent expense related to the Company's long-term ground leases.Land rights and ground lease expense increased by $9.2 million, or 62.2%, for the year ended December 31, 2017, as compared to the year endedDecember 31, 2016, primarily due to a full year of amortization of the land rights associated with the Pinnacle acquisition, as well as a full year of ground rentrelated to these leases and the acquisition of the Tunica Properties in May of 2017. In connection with both acquisitions, we acquired land rights to long-termleases which are recorded on our consolidated balance sheet as land right assets and amortized over the term of the leases, including renewal options. We alsorecord rent expense related to these ground leases with offsetting revenue recorded within the consolidated statements of income as we have concluded thatas the lessee we are the primary obligor under the ground leases. We sublease these ground leases back to our tenants, who are responsible for paymentdirectly to the landlord. 2016 Compared with 2015 Land rights and ground lease expense increased by $12.0 million, or 426.3%, for the year ended December 31, 2016, as compared to the year endedDecember 31, 2015, primarily due to the 2016 acquisition of substantially all of the real property of Pinnacle.General and administrative expense General and administrative expenses include items such as compensation costs (including stock-based compensation awards), professional servicesand costs associated with development activities. In addition, Penn provided GLPI with certain administrative and support services on a transitional basispursuant to a transition services agreement executed in connection with the Spin-Off from the date of the Spin-Off through September 30, 2015. The feescharged to GLPI for transition services furnished pursuant to this agreement were determined based on fixed percentages of Penn’s internal costs which wereintended to approximate the actual cost incurred by Penn in providing the transition services to GLPI for the relevant period.2017 Compared with 2016 General and administrative expenses decreased by $8.2 million, or 11.5%, for the year ended December 31, 2017, as compared to the year endedDecember 31, 2016, led by lower stock-based compensation charges in the current year.2016 Compared with 2015 General and administrative expenses decreased by $11.5 million, or 13.9%, for the year ended December 31, 2016, as compared to the year endedDecember 31, 2015, led by lower legal expenses and stock-based compensation charges in the current year.52Table of ContentsDepreciation expense2017 Compared with 2016 Depreciation expense increased by $3.9 million or 3.6% to $113.5 million for the year ended December 31, 2017 as compared to the year endedDecember 31, 2016, primarily due to a full year of depreciation expense on the Meadows assets, which were acquired in September of 2016.2016 Compared with 2015 Depreciation expense was relatively flat year over year when comparing the year ended December 31, 2016 to the year ended December 31, 2015.The Company notes that only the land assets acquired from Pinnacle are recorded as fixed assets on our consolidated balance sheet, whereas the buildingassets acquired from Pinnacle are recorded as an investment in direct financing lease on our consolidated balance sheet. Therefore, the Company did notrecord any additional depreciation as a result of the Pinnacle acquisition.Other income (expenses) Other income (expenses) for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands): PercentageYear Ended December 31, 2017 2016 Variance VarianceInterest expense $(217,068) $(185,896) $(31,172) (16.8)%Interest income 1,935 2,123 (188) (8.9)%Total other expenses $(215,133) $(183,773) $(31,360) (17.1)% PercentageYear Ended December 31, 2016 2015 Variance VarianceInterest expense $(185,896) $(124,183) $(61,713) (49.7)%Interest income 2,123 2,332 (209) (9.0)%Total other expenses $(183,773) $(121,851) $(61,922) (50.8)% Interest expense2017 Compared with 2016For the year ended December 31, 2017, interest expense related to our fixed and variable rate borrowings was $217.1 million, as compared to $185.9million in the year ended December 31, 2016. Interest expense primarily increased due to interest expense related to the April 2016 issuance of $400 millionof senior unsecured notes due 2021 and $975 million of senior unsecured notes due 2026 and borrowings of $825 million under the term loan A-1 facility.The additional borrowings were utilized to finance the Pinnacle acquisition.2016 Compared with 2015For the year ended December 31, 2016, interest expense related to our fixed and variable rate borrowings was $185.9 million, as compared to $124.2million in the year ended December 31, 2015. Interest expense primarily increased due to interest expense related the additional borrowing utilized tofinance the Pinnacle acquisition.Taxes2017 Compared to 2016Our income tax expense increased $2.2 million for the year ended December 31, 2017 as compared to the year ended December 31, 2016. During theyear ended December 31, 2017, we had income tax expense of approximately $9.8 million, compared to income tax expense of $7.5 million during the yearended December 31, 2016. Income tax expense increased primarily due to adjustments at the TRS Properties related to the December 2017 Tax Cuts and JobAct. Our effective tax rate (income taxes as a percentage of income before income taxes) was 2.5% for both the years ended December 31, 2017 and 2016.53Table of Contents2016 Compared to 2015Our income tax expense remained relatively flat during the year ended December 31, 2016 as compared to the year ended December 31, 2015.During the year ended December 31, 2016, we had income tax expense of approximately $7.5 million, compared to income tax expense of $7.4 millionduring the year ended December 31, 2015. Our effective tax rate (income taxes as a percentage of income from operations before income taxes) was 2.5% forthe year ended December 31, 2016, as compared to 5.5% for the year ended December 31, 2015, as we had additional rental income in the year endedDecember 31, 2016 which was not subject to income tax.Liquidity and Capital Resources Our primary sources of liquidity and capital resources are cash flow from operations, borrowings from banks, and proceeds from the issuance of debtand equity securities. Net cash provided by operating activities was $598.7 million, $514.4 million and $319.7 million during the years ended December 31, 2017, 2016and 2015, respectively. The increase in net cash provided by operating activities of $84.3 million for the year ended December 31, 2017 as compared to theyear ended December 31, 2016 was primarily comprised of an increase in cash receipts from customers/tenants of $129.3 million, (excluding cash receivedfrom Pinnacle and classified as an investing activity) and a decrease in cash paid to employees of $10.6 million, partially offset by increases in cash paid foroperating expenses, interest and taxes of $1.2 million, $49.9 million and $4.3 million, respectively. The increase in cash receipts collected from ourcustomers and tenants for the year ended December 31, 2017 as compared to the year ended December 31, 2016 was primarily due to a full year of rentreceived under both the Pinnacle Master Lease and the Meadows Lease, as well as the additional rent received from Penn related to the new TunicaProperties, the performance of the Ohio properties and the impact of the rent escalators under both Master Leases, partially offset by a decrease in our TRSProperties' net revenues. The increase in cash paid for interest was related to the Company's April 2016 acquisition of Pinnacle's real estate assets and therelated borrowings. The increase in net cash provided by operating activities for the year ended December 31, 2016 as compared to the year ended December31, 2015 was primarily due to the rent received under the Pinnacle Master Lease and to a lesser extent the Meadows Lease and the impact of the Penn rentescalator, partially offset by a decrease in the TRS Properties' net revenues and higher interest related to the Company's borrowings primarily related to thePinnacle transaction. Net cash provided by investing activities totaled $0.7 million during the year ended December 31, 2017 and used cash of $3.2 billion and $14.1million, respectively, for the years ended December 31, 2016 and 2015. Net cash provided by investing activities during the year ended December 31, 2017consisted of cash payments of $83.3 million primarily related to the acquisition of the Tunica Properties and capital expenditures of $3.2 million, partiallyoffset by net cash received of $13.2 million from Casino Queen to retire their five-year term loan and borrow an additional $13.0 million under a new 5.5 yearunsecured term loan at 15%, as well as rental payments received from tenants and applied against the lease receivable on our balance sheet of $73.1 million.Net cash used in investing activities during the year ended December 31, 2016 consisted of cash payments of $3.3 billion related to the acquisition of thePinnacle and Meadows' real estate assets, partially offset by principal payments of $3.2 million made by Casino Queen on their five-year term loan, as wellrental payments received from tenants and applied against the lease receivable on our balance sheet of $48.5 million. In addition to the cash paid for thePinnacle assets, we also issued approximately 56.0 million shares of our common stock as consideration for the Pinnacle real estate assets (non-cash investingactivity). Net cash used in investing activities for the year ended December 31, 2015 included capital expenditures of $19.1 million, primarily related to $6.5million of construction spend related to the Company's new corporate headquarters building located in Wyomissing, Pennsylvania, and Hollywood CasinoPerryville's $5.9 million purchase of slot machines, associated with its initiative to directly purchase slot machines in exchange for gaming tax reductions,partially offset by $4.7 million of principal payments received from Casino Queen on their five year term loan. Financing activities used net cash of $606.9 million during the year ended December 31, 2017, provided net cash of $2.7 billion during the yearended December 31, 2016 and used net cash of $299.6 million during the year ended December 31, 2015. Net cash used by financing activities for the yearended December 31, 2017 included dividend payments of $529.4 million and repayments of long-term debt of $335.1 million, partially offset by proceedsfrom the issuance of common stock under the ATM Program, net of issuance costs of $139.4 million, proceeds from stock option exercises, net of taxes paidrelated to shares withheld for tax purposes on restricted stock award vestings of $18.2 million and proceeds from the issuance of long-term debt of $100.0million. Net cash provided by financing activities for the year ended December 31, 2016 included proceeds from the issuance of long-term debt of $2.6billion, proceeds from the issuance of common stock, net of issuance costs of $870.8 million and proceeds from stock option exercises of $113.5 million,partially offset by dividend payments of $428.4 million and repayments of long-term debt and financing costs of $409.0 million. During the year endedDecember 31, 2016, we issued approximately 28.8 million shares of our common stock in a primary equity offering and approximately 1.3 million shares ofour common stock under the ATM Program, as well as issuing $1.375 billion in new senior unsecured notes and54Table of Contentsdrawing down on the $825 million term loan A-1 facility. These new debt and equity instruments were utilized to finance the acquisition of the Pinnacle andMeadows' real estate assets. In addition to the shares issued in the primary equity offering and the ATM Offering, we also issued approximately 56.0 millionshares of our common stock as consideration for the Pinnacle real estate assets (non-cash financing activity). Net cash used in financing activities for the yearended December 31, 2015 included dividend payments of $251.7 million and repayments of long-term debt and financing costs of $77.6 million, partiallyoffset by proceeds from stock option exercises of $29.7 million. Capital Expenditures Capital expenditures are accounted for as either capital project or capital maintenance (replacement) expenditures. Capital project expenditures arefor fixed asset additions that expand an existing facility or create a new facility. The cost of properties developed by the Company include costs ofconstruction, property taxes, interest and other miscellaneous costs incurred during the development period until the project is substantially complete andavailable for occupancy. Capital maintenance expenditures are expenditures to replace existing fixed assets with a useful life greater than one year that areobsolete, worn out or no longer cost effective to repair.Capital project expenditures totaled $16.1 million for the year ended December 31, 2015 and primarily consisted of construction spend totaling$6.5 million related to the Company's new corporate headquarters building located in Wyomissing, Pennsylvania and Hollywood Casino Perryville's directpurchase of slot machines. During the year ended December 31, 2015, Hollywood Casino Perryville made direct purchases of slot machines from the state ofMaryland totaling $5.9 million, which resulted in a decrease of gaming taxes derived from slot machine revenues. Previously, all of the property's slotmachines were owned by the state. As this one-time project cost was dictated by new state legislation that allowed Maryland casinos to purchase their slotmachines in exchange for gaming tax reductions this expense was treated as a capital project expenditure.During the years ended December 31, 2017, 2016 and 2015 we spent approximately $3.2 million, $3.1 million and $3.0 million, respectively, forcapital maintenance expenditures. The majority of the capital maintenance expenditures were for slot machines and slot machine equipment at our TRSProperties. Our tenants are responsible for capital maintenance expenditures at our leased properties. DebtSenior Unsecured Credit Facility The Company has a $1,825 million dollar Credit Facility, consisting of a $700 million revolving credit facility, a $300 million Term Loan Afacility, and an $825 million Term Loan A-1 facility. The revolving credit facility and the Term Loan A facility mature on October 28, 2018 and the TermLoan A-1 facility matures on April 28, 2021. At December 31, 2017, the Credit Facility had a gross outstanding balance of $1,055 million, consisting of the$1,055 million Term Loan A and A-1 facilities. Additionally, at December 31, 2017, the Company was contingently obligated under letters of credit issuedpursuant to the senior unsecured credit facility with face amounts aggregating approximately $0.4 million, resulting in $699.6 million of available borrowingcapacity under the revolving credit facility as of December 31, 2017.The Credit Facility contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of GLPI and itssubsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations or pay certaindividends and other restricted payments. The Credit Facility contains the following financial covenants, which are measured quarterly on a trailing four-quarter basis: a maximum total debt to total asset value ratio, a maximum senior secured debt to total asset value ratio, a maximum ratio of certain recoursedebt to unencumbered asset value and a minimum fixed charge coverage ratio. In addition, GLPI is required to maintain a minimum tangible net worth and itsstatus as a REIT on and after the effective date of its election to be treated as a REIT, which the Company elected on its 2014 U.S. federal income tax return.GLPI is permitted to pay dividends to its shareholders as may be required in order to maintain REIT status, subject to the absence of payment or bankruptcydefaults. GLPI is also permitted to make other dividends and distributions subject to pro forma compliance with the financial covenants and the absence ofdefaults. The Credit Facility also contains certain customary affirmative covenants and events of default, including the occurrence of a change of control andtermination of the Penn Master Lease (subject to certain replacement rights). The occurrence and continuance of an event of default under the Credit Facilitywill enable the lenders under the Credit Facility to accelerate the loans and terminate the commitments thereunder. At December 31, 2017, the Company wasin compliance with all required financial covenants under the Credit Facility.55Table of ContentsSenior Unsecured NotesAt December 31, 2017, the Company had $550 million outstanding of 4.375% senior unsecured notes maturing on November 1, 2018 (the "2018Notes"), $1,000 million outstanding of 4.875% senior unsecured notes maturing on November 1, 2020 (the "2020 Notes"), $400 million of 4.375% seniorunsecured notes maturing on April 15, 2021 (the "2021 Notes"), $500 million outstanding of 5.375% senior unsecured notes maturing on November 1, 2023(the "2023 Notes") and $975 million of 5.375% senior unsecured notes maturing on April 15, 2026 (the "2026 Notes" and collectively with the 2018 Notes,the 2020 Notes, the 2021 Notes and the 2023 Notes, the "Notes"). Interest on each of the 2018 Notes, 2020 Notes and 2023 Notes, is payable semi-annuallyon May 1 and November 1 of each year. Interest on the 2021 Notes and 2026 Notes is payable semi-annually on April 15 and October 15 of each year andcommenced on October 15, 2016.The Company may redeem the Notes of any series at any time, and from time to time, at a redemption price of 100% of the principal amount of theNotes redeemed, plus a "make-whole" redemption premium described in the indenture governing the Notes, together with accrued and unpaid interest to, butnot including, the redemption date, except that if Notes of a series are redeemed 90 or fewer days prior to their maturity, the redemption price will be 100% ofthe principal amount of the Notes redeemed, together with accrued and unpaid interest to, but not including, the redemption date. If GLPI experiences achange of control accompanied by a decline in the credit rating of the Notes of a particular series, the Company will be required to give holders of the Notesof such series the opportunity to sell their Notes of such series at a price equal to 101% of the principal amount of the Notes of such series, together withaccrued and unpaid interest to, but not including, the repurchase date. The Notes also are subject to mandatory redemption requirements imposed by gaminglaws and regulations. The Notes were issued by GLP Capital, L.P. and GLP Financing II, Inc. (the "Issuers"), two wholly-owned subsidiaries of GLPI, and are guaranteed ona senior unsecured basis by GLPI. The guarantees of GLPI are full and unconditional. The Notes are the Issuers' senior unsecured obligations and rank paripassu in right of payment with all of the Issuers' senior indebtedness, including the Credit Facility, and senior in right of payment to all of the Issuers'subordinated indebtedness, without giving effect to collateral arrangements. See Note 19 for additional financial information on the parent guarantor andsubsidiary issuers of the Notes.The Notes contain covenants limiting the Company’s ability to: incur additional debt and use its assets to secure debt; merge or consolidate withanother company; and make certain amendments to the Penn Master Lease. The Notes also require the Company to maintain a specified ratio ofunencumbered assets to unsecured debt. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. At December 31, 2017, the Company was in compliance with all required financial covenants under the Notes.Capital LeaseThe Company assumed the capital lease obligation related to certain assets at its Aurora, Illinois property. GLPI recorded the asset and liabilityassociated with the capital lease on its balance sheet. The original term of the capital lease was 30 years and it will terminate in 2026.OutlookBased on our current level of operations and anticipated earnings, we believe that cash generated from operations and cash on hand, together withamounts available under our senior unsecured credit facility, will be adequate to meet our anticipated debt service requirements, capital expenditures,working capital needs and dividend requirements. During 2018, we expect to refinance our Credit Facility which matures on October 28, 2018. In addition,we expect the majority of our future growth to come from acquisitions of gaming and other properties to lease to third parties. If we consummate significantacquisitions in the future, our cash requirements may increase significantly and we would likely need to raise additional proceeds through a combination ofeither common equity (including under our ATM Program) and/or debt offerings. Our future operating performance and our ability to service or refinance ourdebt will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. See "Risk Factors-Risks Related to Our Capital Structure" of this Annual Report on Form 10-K for a discussion of the risk related to our capital structure.56Table of ContentsCommitments and ContingenciesContractual Cash ObligationsThe following table presents our contractual obligations at December 31, 2017: Payments Due By Period Total 2018 2019 - 2020 2021 - 2022 2023 and After (in thousands)Senior unsecured credit facility Principal$1,055,000 $230,000 $— $825,000 $—Interest (1)107,617 32,984 64,018 10,615 —4.375% senior unsecured notes due 2018 Principal550,000 550,000 — — —Interest24,063 24,063 — — —4.875% senior unsecured notes due 2020 Principal1,000,000 — 1,000,000 — —Interest146,250 48,750 97,500 — —4.375% senior unsecured notes due 2021 Principal400,000 — — 400,000 — Interest61,250 17,500 35,000 8,750 —5.375% senior unsecured notes due 2023 Principal500,000 — — — 500,000Interest161,250 26,875 53,750 53,750 26,8755.375% senior unsecured notes due 2026 Principal975,000 — — — 975,000 Interest445,454 52,406 104,813 104,813 183,422Capital lease obligations1,230 117 252 278 583Operating leases599,986 10,735 21,448 21,370 546,433Other liabilities reflected in the Company'sconsolidated balance sheets (2)674 674 — — —Total$6,027,774 $994,104 $1,376,781 $1,424,576 $2,232,313 (1) The interest rates associated with the variable rate components of our senior unsecured credit facility are estimated, reflected of forward LIBOR curvesplus the spread over LIBOR of 150 basis points. The contractual amounts to be paid on our variable rate obligations are affected by changes in marketinterest rates and changes in our spreads which are based on our leverage ratios. Future changes in such ratios will impact the contractual amounts tobe paid.(2) Primarily represents liabilities associated with reward programs at our TRS Properties that can be redeemed for free play, merchandise or services.57Table of ContentsOther Commercial CommitmentsThe following table presents our material commercial commitments as of December 31, 2017 for the following future periods: Total AmountsCommitted 2018 2019 - 2020 2021 - 2022 2023 and After (in thousands)Letters of Credit (1)$395 $395 — — —Total$395 $395 — — — (1) The available balance under the revolving credit portion of our senior unsecured credit facility is reduced by outstanding letters of credit.Off-Balance Sheet ArrangementsWe had no off-balance sheet arrangements as of December 31, 2017 and 2016.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We face market risk exposure in the form of interest rate risk. These market risks arise from our debt obligations. We have no internationaloperations. Our exposure to foreign currency fluctuations is not significant to our financial condition or results of operations. GLPI’s primary market risk exposure is interest rate risk with respect to its indebtedness of $4,481.2 million at December 31, 2017. Furthermore,$3,425.0 million of our obligations are the senior unsecured notes that have fixed interest rates with maturity dates ranging from less than one year to eightand one-half years. An increase in interest rates could make the financing of any acquisition by GLPI more costly, as well as increase the costs of its variablerate debt obligations. Rising interest rates could also limit GLPI’s ability to refinance its debt when it matures or cause GLPI to pay higher interest rates uponrefinancing and increase interest expense on refinanced indebtedness. GLPI may manage, or hedge, interest rate risks related to its borrowings by means ofinterest rate swap agreements. GLPI also expects to manage its exposure to interest rate risk by maintaining a mix of fixed and variable rates for itsindebtedness. However, the provisions of the Code applicable to REITs substantially limit GLPI’s ability to hedge its assets and liabilities. The table below provides information at December 31, 2017 about our financial instruments that are sensitive to changes in interest rates. For debtobligations, the table presents notional amounts maturing in each fiscal year and the related weighted-average interest rates by maturity dates. Notionalamounts are used to calculate the contractual payments to be exchanged by maturity date and the weighted-average interest rates are based on impliedforward LIBOR rates at December 31, 2017. 01/01/18-12/31/18 01/01/19-12/31/19 01/01/20-12/31/20 01/01/21-12/31/21 01/01/22-12/31/22 Thereafter Total Fair Value at12/31/2017(in thousands)Long-term debt: Fixed rate$550,000 $— $1,000,000 $400,000 $— $1,475,000 $3,425,000 $3,574,688Average interest rate4.38% 4.88% 4.38% 5.38% Variable rate$230,000 $— $— $825,000 $— $— $1,055,000 $1,045,600Average interest rate (1) 3.21% 3.96% (1) Estimated rate, reflective of forward LIBOR plus the spread over LIBOR applicable to variable-rate borrowing.58Table of ContentsITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the shareholders and the Board of Directors ofGaming and Leisure Properties, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Gaming and Leisure Properties, Inc. and Subsidiaries (the "Company") as of December 31,2017 and 2016, and the related consolidated statements of income, changes in shareholders’ equity (deficit), and cash flows, for each of the two years in theperiod ended December 31, 2017, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, andthe results of their operations and their cash flows for each of the two years in the period ended December 31, 2017, in conformity with accounting principlesgenerally accepted in the United States of America.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company'sinternal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued bythe Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 16, 2018, expressed an unqualified opinion on theCompany's internal control over financial reporting.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Companyin accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing proceduresto assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also includedevaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financialstatements. We believe that our audits provide a reasonable basis for our opinion./s/ DELOITTE & TOUCHE LLPNew York, New YorkFebruary 16, 2018We have served as the Company's auditor since 2016.59Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMBoard of Directors and ShareholdersGaming and Leisure Properties, Inc. and SubsidiariesWe have audited the accompanying consolidated statements of income, changes in shareholders' equity (deficit) and cash flows for the year ended December31, 2015, of Gaming and Leisure Properties, Inc. and Subsidiaries (the "Company"). Our audit also included the financial statement schedule listed in theIndex at Item 15(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinionon these financial statements and schedule based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated results of operations and cash flows ofGaming and Leisure Properties, Inc. and Subsidiaries for the year ended December 31, 2015, in conformity with U.S. generally accepted accountingprinciples. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole,present fairly in all material respects the information set forth therein./s/ ERNST & YOUNG LLP Philadelphia, PennsylvaniaFebruary 22, 2016 60Table of ContentsGaming and Leisure Properties, Inc. and SubsidiariesConsolidated Balance Sheets(amounts in thousands, except share and per share data) December 31, 2017 December 31, 2016 Assets Real estate investments, net$3,662,045 $3,739,091Land rights, net640,148 590,758Property and equipment, used in operations, net108,293 119,427Investment in direct financing lease, net2,637,639 2,710,711Cash and cash equivalents29,054 36,556Prepaid expenses8,452 7,477Goodwill75,521 75,521Other intangible assets9,577 9,577Loan receivable13,000 26,200Deferred tax assets4,478 3,922Other assets58,675 50,090Total assets$7,246,882 $7,369,330 Liabilities Accounts payable$715 $1,079Accrued expenses7,913 6,590Accrued interest33,241 33,743Accrued salaries and wages10,809 10,619Gaming, property, and other taxes35,399 32,584Long-term debt, net of unamortized debt issuance costs4,442,880 4,664,965Deferred rental revenue232,023 166,052Deferred tax liabilities244 265Other liabilities25,411 19,564Total liabilities4,788,635 4,935,461 Commitments and Contingencies (Note 10) Shareholders’ equity Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at December 31,2017 and December 31, 2016)— —Common stock ($.01 par value, 500,000,000 shares authorized, 212,717,549 and 207,676,827 shares issued atDecember 31, 2017 and December 31, 2016, respectively)2,127 2,077Additional paid-in capital3,933,829 3,760,729Retained accumulated deficit(1,477,709) (1,328,937)Total shareholders’ equity2,458,247 2,433,869Total liabilities and shareholders’ equity$7,246,882 $7,369,330 See accompanying notes to the consolidated financial statements.61Table of ContentsGaming and Leisure Properties, Inc. and SubsidiariesConsolidated Statements of Income(in thousands, except per share data) Year ended December 31, 2017 2016 2015 Revenues Rental income $671,190 $567,444 $392,075Income from direct financing lease 74,333 48,917 —Real estate taxes paid by tenants 83,698 67,843 35,050Total rental revenue and income from direct financing lease 829,221 684,204 427,125Gaming, food, beverage and other 146,866 149,661 153,523Total revenues 976,087 833,865 580,648Less promotional allowances (4,780) (5,610) (5,595)Net revenues 971,307 828,255 575,053 Operating expenses Gaming, food, beverage and other 80,487 82,463 85,774Real estate taxes 84,666 69,448 36,412Land rights and ground lease expense 24,005 14,799 2,812General and administrative 63,151 71,368 82,857Depreciation 113,480 109,554 109,783Total operating expenses 365,789 347,632 317,638Income from operations 605,518 480,623 257,415 Other income (expenses) Interest expense (217,068) (185,896) (124,183)Interest income 1,935 2,123 2,332Total other expenses (215,133) (183,773) (121,851) Income before income taxes 390,385 296,850 135,564Income tax expense 9,787 7,545 7,442Net income $380,598 $289,305 $128,122 Earnings per common share: Basic earnings per common share $1.80 $1.62 $1.12Diluted earnings per common share $1.79 $1.60 $1.08 See accompanying notes to the consolidated financial statements.62Table of ContentsGaming and Leisure Properties, Inc. and SubsidiariesConsolidated Statements of Changes in Shareholders’ Equity (Deficit)(in thousands, except share data)Common Stock AdditionalPaid-InCapital RetainedAccumulatedDeficit TotalShareholders’Equity (Deficit)Shares Amount Balance, December 31, 2014112,981,088 $1,130 $888,860 $(1,066,280) $(176,290)Stock option activity2,511,639 25 34,621 — 34,646Restricted stock activity101,594 1 11,739 — 11,740Dividends paid ($2.18 per common share)— — — (251,732) (251,732)Net income 128,122 128,122Balance, December 31, 2015115,594,321 1,156 935,220 (1,189,890) (253,514)Issuance of common stock86,074,167 861 2,693,939 — 2,694,800Stock option activity5,870,282 59 115,416 — 115,475Restricted stock activity138,057 1 16,154 — 16,155Dividends paid ($2.32 per common share)— — — (428,352) (428,352)Net income— — — 289,305 289,305Balance, December 31, 2016207,676,827 2,077 3,760,729 (1,328,937) 2,433,869Issuance of common stock3,864,872 38 139,376 — 139,414Stock option activity1,013,984 10 20,993 — 21,003Restricted stock activity161,866 2 12,731 — 12,733Dividends paid ($2.50 per common share)— — — (529,370) (529,370)Net income— — — 380,598 380,598Balance, December 31, 2017212,717,549 $2,127 $3,933,829 $(1,477,709) $2,458,247 See accompanying notes to the consolidated financial statements.63Table of ContentsGaming and Leisure Properties, Inc. and Subsidiaries Consolidated Statements of Cash Flows(in thousands) Year ended December 31, 2017 2016 2015Operating activities Net income $380,598 $289,305 $128,122Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 123,835 115,717 109,783Amortization of debt issuance costs 13,026 15,146 14,016Losses (gains) on dispositions of property 530 (455) 185Deferred income taxes (561) (1,535) (813)Stock-based compensation 15,636 18,312 16,811Straight-line rent adjustments 65,971 58,673 55,825 (Increase) decrease, Prepaid expenses and other assets (5,332) 7,565 (9,712)(Decrease), increase Accounts payable (421) 506 (946)Accrued expenses 411 (4,672) 4,241Accrued interest (502) 16,120 95Accrued salaries and wages 190 (3,100) 1,138Gaming, property and other taxes (517) 913 (956)Other liabilities 5,847 1,875 1,899Net cash provided by operating activities 598,711 514,370 319,688Investing activities Capital project expenditures (78) (330) (16,149)Capital maintenance expenditures (3,178) (3,111) (2,953)Proceeds from sale of property and equipment 934 1,134 310Principal payments on loan receivable 13,200 3,150 4,650Acquisition of real estate assets (83,252) (3,267,992) — Collections of principal payments on investment in direct financing lease 73,072 48,533 —Net cash provided by (used in) investing activities 698 (3,218,616) (14,142)Financing activities Dividends paid (529,370) (428,352) (251,732)Proceeds from exercise of options, net of taxes paid related to shares withheld for taxpurposes on restricted stock award vestings 18,157 113,484 29,686Proceeds from issuance of common stock, net of issuance costs 139,414 870,810 —Proceeds from issuance of long-term debt 100,000 2,552,000 —Financing costs — (31,911) (9,500)Repayments of long-term debt (335,112) (377,104) (68,098)Net cash (used in) provided by financing activities (606,911) 2,698,927 (299,644)Net (decrease) increase in cash and cash equivalents (7,502) (5,319) 5,902Cash and cash equivalents at beginning of period 36,556 41,875 35,973Cash and cash equivalents at end of period $29,054 $36,556 $41,875See Note 17 to the consolidated financial statements for supplemental cash flow information and noncash investing and financing activities.64Table of ContentsGaming and Leisure Properties, Inc.Notes to the Consolidated Financial Statements 1. Business and Basis of Presentation Gaming and Leisure Properties, Inc. ("GLPI") is a self-administered and self-managed Pennsylvania real estate investment trust ("REIT"). GLPI(together with its subsidiaries, the "Company") was incorporated on February 13, 2013, as a wholly-owned subsidiary of Penn National Gaming, Inc. ("Penn").On November 1, 2013, Penn contributed to GLPI, through a series of internal corporate restructurings, substantially all of the assets and liabilities associatedwith Penn’s real property interests and real estate development business, as well as the assets and liabilities of Hollywood Casino Baton Rouge andHollywood Casino Perryville, which are referred to as the "TRS Properties," and then spun-off GLPI to holders of Penn's common and preferred stock in a tax-free distribution (the "Spin-Off"). The assets and liabilities of GLPI were recorded at their respective historical carrying values at the time of the Spin-Off inaccordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 505-60, "Spinoffs andReverse Spinoffs."The Company elected on its United States ("U.S.") federal income tax return for its taxable year that began on January 1, 2014 to be treated as a REITand the Company, together with an indirect wholly-owned subsidiary of the Company, GLP Holdings, Inc., jointly elected to treat each of GLPHoldings, Inc., Louisiana Casino Cruises, Inc. (d/b/a Hollywood Casino Baton Rouge) and Penn Cecil Maryland, Inc. (d/b/a Hollywood Casino Perryville) asa "taxable REIT subsidiary" ("TRS") effective on the first day of the first taxable year of GLPI as a REIT. In connection with the Spin-Off, Penn allocated itsaccumulated earnings and profits (as determined for U.S. federal income tax purposes) for periods prior to the consummation of the Spin-Off between Pennand GLPI. In connection with its election to be taxed as a REIT for U.S. federal income tax purposes, GLPI declared a special dividend to its shareholders todistribute any accumulated earnings and profits relating to the real property assets and attributable to any pre-REIT years, including any earnings and profitsallocated to GLPI in connection with the Spin-Off, to comply with certain REIT qualification requirements.As a result of the Spin-Off, GLPI owns substantially all of Penn’s former real property assets and leases back most of those assets to Penn for use byits subsidiaries, under a unitary master lease, a triple-net operating lease with an initial term of 15 years (expiring October 31, 2028) with no purchase option,followed by four 5-year renewal options (exercisable by Penn) on the same terms and conditions (the "Penn Master Lease"), and GLPI also owns and operatesthe TRS Properties through an indirect wholly-owned subsidiary, GLP Holdings, Inc. In April 2016, the Company acquired substantially all of the real estateassets of Pinnacle Entertainment, Inc. ("Pinnacle") for approximately $4.8 billion. GLPI leases these assets back to Pinnacle, under a unitary triple-net leasewith an initial term of 10 years (expiring April 30, 2026) with no purchase option, followed by five 5-year renewal options (exercisable by Pinnacle) on thesame terms and conditions (the "Pinnacle Master Lease"). See Note 4 for further details surrounding the Pinnacle acquisition.GLPI’s primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net leasearrangements. As of December 31, 2017, GLPI’s portfolio consisted of 38 gaming and related facilities, including the TRS Properties, the real propertyassociated with 20 gaming and related facilities operated by Penn, the real property associated with 15 gaming and related facilities operated by Pinnacle andthe real property associated with the Casino Queen in East St. Louis, Illinois. These facilities are geographically diversified across 14 states and containapproximately 15.2 million of rentable square feet. As of December 31, 2017, the Company's properties were 100% occupied.GLPI expects to grow its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators under prudentterms. For example, on December 17, 2017, the Company entered into agreements to purchase two additional properties, Plainridge Park Casino and BelterraPark Gaming & Entertainment Center from Penn and Pinnacle, respectively. We will acquire these properties in connection with the proposed acquisition ofPinnacle by Penn pursuant to a definitive agreement and plan of merger between them, also dated December 17, 2017 (the "Merger"). Subject to andconcurrently with the completion of the Merger, we have agreed to, among other things, amend our master lease with Pinnacle to allow for the sale byPinnacle of the operating assets at Ameristar Casino Hotel Kansas City, Ameristar Casino Resort Spa St. Charles and Belterra Casino Resort to Boyd GamingCorporation (“Boyd”) and to enter into a new master lease agreement with Boyd on terms similar to the Company’s existing leases. The transaction which issubject to regulatory approval is expected to close in the second half of 2018.In order to conform to the current presentation of the statement of income, the Company combined certain line items on the consolidated statementsof income for the years ended December 31, 2016 and 2015. Specifically, the Company aggregated the former revenue line items gaming revenue and food,beverage and other revenue into the line item gaming, food, beverage and other revenues and aggregated the former expense line items gaming expenses andfood, beverage and other expenses into the line item gaming, food, beverage and other expenses. Furthermore, also to conform to the current65Table of Contentspresentation of the statement of income, the Company separated the general and administrative line item into the line items general and administrativeexpenses and land rights and ground lease expense on the consolidated statements of income for the years ended December 31, 2016 and 2015. This new lineitem includes the amortization of land rights and rent expense related to the Company's long-term ground leases. These reclassifications were made only forpresentation purposes and had no impact on the Company's financial results for the years ended December 31, 2016 and 2015.The consolidated financial statements include the accounts of GLPI and its subsidiaries. All intercompany accounts and transactions have beeneliminated in consolidation.The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenueand expenses for the reporting periods. Actual results may differ from those estimates. 2. New Accounting PronouncementsRecently Adopted Accounting PronouncementsIn March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, Compensation -Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). This ASU amends certain aspects ofaccounting for share-based payments to employees, including (i) requiring all income tax effects of share-based awards to be recognized in the incomestatement when the award vests or settles and eliminating APIC pools, (ii) permitting employers to withhold the share equivalent of an employee's maximumtax liability without triggering liability accounting and (iii) allowing companies to make a policy election to account for forfeitures as they occur. TheCompany adopted ASU 2016-09 on January 1, 2017 and it did not have a significant impact on how the Company accounts for share-based payments.Accounting Pronouncements Not Yet AdoptedIn May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU2017-09"). This ASU provides clarity about which changes to the terms or conditions of a share-based payment award require the application of modificationaccounting. Specifically, ASU 2017-09 clarifies that changes to the terms or conditions of an award should be accounted for as a modification unless all ofthe following are met: 1) the fair value of the modified award is the same as the fair value of the original award immediately before the original award ismodified, 2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original awardis modified and 3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the originalaward immediately before the original award is modified. ASU 2017-09 is effective for annual reporting periods beginning after December 15, 2017. TheCompany adopted ASU 2017-09 on January 1, 2018 and does not expect the adoption of ASU 2017-09 to significantly impact its accounting for share-basedpayment awards, as changes to awards' terms and conditions subsequent to the grant date are unusual and infrequent in nature.In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment("ASU 2017-04"). This ASU simplifies an entity's goodwill impairment test by eliminating Step 2 from the test. The new guidance also amends the definitionof impairment to a condition that exists when the carrying amount of goodwill exceeds its fair value. By eliminating Step 2 from the test, entities are nolonger required to determine the implied fair value of goodwill by computing the fair value (at impairment testing date) of all assets and liabilities in amanner similar to that required in conjunction with business combinations. Upon the adoption of ASU 2017-04, an impairment charge is simply recorded asthe difference between carrying value and fair value, when carrying value exceeds fair value. ASU 2017-04 is effective for annual reporting periodsbeginning after December 15, 2019 and early adoption is permitted. The Company does not expect the adoption of ASU 2017-04 to significantly impact itsgoodwill impairment testing.In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01").This ASU provides clarifying guidance on what constitutes a business acquisition versus an asset acquisition. Specifically, the new guidance lays out ascreen to more easily determine if a set of integrated assets and activities does in fact represent a business. Under the ASU 2017-01, when substantially all ofthe fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the assets do not represent abusiness. ASU 2017-01 is effective for annual reporting periods beginning after December 15, 2017. The Company adopted ASU 2017-01 on January 1, 2018with no impact to the Company's accounting treatment of its acquisitions.66Table of ContentsIn August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and CashPayments, a Consensus of the FASB Emerging Issues Task Force ("ASU 2016-15"). This ASU provides clarifying guidance on the presentation of certain cashreceipts and cash payments in the statement of cash flows. ASU 2016-15 is effective for annual reporting periods beginning after December 15, 2017. TheCompany adopted ASU 2016-15 on January 1, 2018, with no impact to its presentation of cash receipts and payments on its consolidated statements of cashflows.In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstrument ("ASU 2016-13"). This ASU introduces a new model for estimating credit losses for certain types of financial instruments, including loansreceivable and net investments in direct financing leases, amongst other financial instruments. ASU 2016-13 sets forth an "expected credit loss" impairmentmodel to replace the current "incurred loss" method of recognizing credit losses, which is intended to improve financial reporting by requiring timelyrecording of credit losses on loans and other financial instruments. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, with earlyadoption permitted for fiscal years beginning after December 15, 2018. The Company does not expect the adoption of ASU 2016-13 to have a significantimpact on its consolidated financial statements.In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). This ASU primarily provides new guidance for lesseeson the accounting treatment of operating leases. Under the new guidance, lessees are required to recognize assets and liabilities arising from operating leaseson the balance sheet. ASU 2016-02 also aligns lessor accounting with the revenue recognition guidance in Topic 606 of the Accounting StandardsCodification. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018 and is required to be adopted on a modifiedretrospective basis, meaning the new leasing model will be applied to the earliest year presented in the financial statements and thereafter. However, inNovember 2017, the FASB issued a proposed ASU, which would permit companies to apply the transition provisions of the lease accounting standard at itseffective date (i.e. comparative financial statements would not be required).The Company is evaluating the impact of adopting this new accounting standard on its financial statements but does not expect the adoption of thenew guidance to have a significant impact on the accounting treatment of its triple-net tenant leases, which are the primary source of revenue to theCompany. Generally speaking, ASU 2016-02 will more significantly impact the accounting for leases in which GLPI is the lessee by requiring the Companyto record a right of use asset and lease liability on its consolidated balance sheet for these leases. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). This new standard will replaceall current U.S. GAAP guidance on this topic and eliminate all industry-specific guidance. ASU 2014-09 provides a unified five-step model to determinewhen and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services tocustomers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. At the April 1, 2015FASB meeting, the board voted to defer the effective date for the new revenue recognition standard to annual reporting periods beginning after December 15,2017. The pronouncement was originally effective for annual reporting periods beginning after December 15, 2016, and companies were permitted to electthe adoption of the standard as of the original effective date. When adopted, the new guidance can be applied either retrospectively to each period presentedor as a cumulative-effect adjustment as of the date of adoption.The Company has completed its evaluation of the impact of adopting this new accounting standard on its financial statements and internal revenuerecognition policies. The majority of the Company's revenue recognition policies will not be impacted by the new standard, as leases (the source of theCompany's majority of revenues) are excluded from ASU 2014-09. Only the accounting treatment for the customer loyalty programs at the TRS propertieswill be impacted by the adoption of ASU 2014-09. Specifically, the recognition of revenue associated with these points based programs will be impacted byeliminating the current accrual for the cost of the points awarded at the time of play and instead deferring the portion of the revenue received from thecustomer at the time of play and attributed to the awarded points until a later period when the points are redeemed or forfeited. The revenue deferral will becalculated from the portion of the transaction price allocated to the points based upon their retail value. Under the former guidance, the cost of the points wasrecorded as an operating expense through the gaming, food, beverage and other expense line item of the Company's consolidated statement of income. Inaddition, upon the adoption of ASU 2014-09, promotional allowances representing the retail value of food, beverages and other services furnished to guestswithout charge will no longer be presented as a separate line item on the consolidated statements of income, rather they will be presented on a net basiswithin gaming, food, beverage and other revenue. This change has no impact to net revenues and is for presentation purposes only. The Company adoptedASU 2014-09 on January 1, 2018 using the modified retrospective approach and recorded a cumulative adjustment to retained earnings of approximately$400,000 at the adoption date.67Table of Contents3. Summary of Significant Accounting PoliciesCash and Cash EquivalentsThe Company considers all cash balances and highly-liquid investments with original maturities of three months or less to be cash and cashequivalents.Concentration of Credit RiskConcentrations of credit risk arise when a number of operators, tenants, or obligors related to the Company's investments are engaged in similarbusiness activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractualobligations, including those to the Company, to be similarly affected by changes in economic conditions. Additionally, concentrations of credit risk mayarise when revenues of the Company are derived from a small number of tenants. As of December 31, 2017, substantially all of the Company's real estateproperties were leased to Penn or Pinnacle and approximately 53% and 45% of the Company's collective rental revenues and income from direct financinglease were derived from tenant leases with Penn and Pinnacle, respectively. Revenues from Penn and Pinnacle are reported in the Company's GLPCapital, L.P. reportable segment. Both Penn and Pinnacle are publicly traded companies that are subject to the informational filing requirements of theSecurities Exchange Act of 1934, as amended, and are required to file periodic reports on Form 10-K and Form 10-Q and current reports on Form 8-K with theSecurities and Exchange Commission ("SEC"). Readers are directed to Penn and Pinnacle's respective websites for further financial information on thesecompanies. Other than the Company's tenant concentration, management believes the Company's portfolio was reasonably diversified by geographicallocation and did not contain any other significant concentrations of credit risk. As of December 31, 2017, the Company's portfolio of 36 leased properties andthe TRS properties is diversified by location across 14 states.Financial instruments that subject the Company to credit risk consist of cash and cash equivalents, accounts receivable, loans receivable and theCompany's net investment in direct financing lease related to the Pinnacle Master Lease. (See Note 8 for further details on the net investment in directfinancing lease).The Company's policy is to limit the amount of credit exposure to any one financial institution and place investments with financial institutionsevaluated as being creditworthy, or in short-term money market and tax-free bond funds which are exposed to minimal interest rate and credit risk. At times,the Company has bank deposits and overnight repurchase agreements that exceed federally-insured limits.Prepaid Expenses and Other AssetsPrepaid expenses consist of expenditures for goods (other than inventories) or services before the goods are used or the services are received. Theseamounts are deferred and charged to operations as the benefits are realized and primarily consist of prepayments for insurance and other contracts that will beexpensed during the subsequent year. It also includes property taxes that were paid in advance, as well as transaction costs that will be allocated to purchaseprice upon the closing of an asset acquisition. Other assets consists primarily of accounts receivable, deposits, food and beverage inventory and deferredcompensation plan assets (See Note 10 for further details on the deferred compensation plan).Fair Value of Financial Instruments The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable toestimate:Cash and Cash Equivalents The fair value of the Company’s cash and cash equivalents approximates the carrying value of the Company’s cash and cash equivalents, due to theshort maturity of the cash equivalents.Deferred Compensation Plan AssetsThe Company's deferred compensation plan assets consist of open-ended mutual funds and as such the fair value measurement of the assets isconsidered a Level 1 measurement as defined under ASC 820 "Fair Value Measurements and Disclosures" ("ASC 820"). Deferred compensation plan assets areincluded within other assets on the consolidated balance sheets.68Table of ContentsLoan ReceivableThe fair value of the loan receivable approximates the carrying value of the Company's loan receivable, as collection on the outstanding loanbalance is reasonably assured and the interest rate approximates market rates for a similar instrument. The fair value measurement of the loan receivable isconsidered a Level 3 measurement as defined under ASC 820.Long-term Debt The fair value of the senior unsecured notes and senior unsecured credit facility is estimated based on quoted prices in active markets and as such isa Level 1 measurement as defined under ASC 820. The estimated fair values of the Company’s financial instruments are as follows (in thousands):December 31, 2017 December 31, 2016CarryingAmount FairValue CarryingAmount FairValueFinancial assets: Cash and cash equivalents$29,054 $29,054 $36,556 $36,556Deferred compensation plan assets22,617 22,617 17,593 17,593Loan receivable13,000 13,000 26,200 26,200Financial liabilities: Long-term debt: Senior unsecured credit facility1,055,000 1,045,600 1,290,000 1,272,852Senior unsecured notes3,425,000 3,574,688 3,425,000 3,573,500Real Estate InvestmentsReal estate investments primarily represent land and buildings leased to the Company's tenants. The Company records the acquisition of real estateassets at fair value, including acquisition and closing costs. The cost of properties developed by the Company include costs of construction, property taxes,interest and other miscellaneous costs incurred during the development period until the project is substantially complete and available for occupancy. TheCompany considers the period of future benefit of the asset to determine the appropriate useful lives. Depreciation is computed using a straight-line methodover the estimated useful lives of the buildings and building improvements which are generally between 10 to 31 years.The Company continually monitors events and circumstances that could indicate that the carrying amount of its real estate investments may not berecoverable or realized. When indicators of potential impairment suggest that the carrying value of a real estate investment may not be recoverable, theCompany estimates the fair value of the investment by calculating the undiscounted future cash flows from the use and eventual disposition of theinvestment. This amount is compared to the asset's carrying value. If the Company determines the carrying amount is not recoverable, it would recognize animpairment charge equivalent to the amount required to reduce the carrying value of the asset to its estimated fair value, calculated in accordance withGAAP. The Company groups its real estate investments together by lease, the lowest level for which identifiable cash flows are available, in evaluatingimpairment. In assessing the recoverability of the carrying value, the Company must make assumptions regarding future cash flows and other factors. Thefactors considered by the Company in performing this assessment include current operating results, market and other applicable trends and residual values, aswell as the effect of obsolescence, demand, competition and other factors. If these estimates or the related assumptions change in the future, the Companymay be required to record an impairment loss.Land RightsLand rights represent the Company's rights to land subject to long-term ground leases. The Company records land rights at the acquisition date fairvalue of the long-term rights purchased from sellers. Essentially, land rights represent the below market value of the related ground leases. Land rights areamortized over the individual lease term of each ground lease, including all renewal options. Amortization expense related to the land rights is recordedwithin land rights and ground lease expense in the Company's consolidated statements of income. Land rights are monitored for potential impairment inmuch the same way as the Company's real estate assets. If the Company determines the carrying amount of a land right is not recoverable, it would recognizean impairment charge equivalent to the amount required to reduce the carrying value of the asset to its estimated fair value, calculated in accordance withGAAP.69Table of ContentsProperty and Equipment Used in OperationsProperty and equipment are stated at cost, less accumulated depreciation and represent assets used by the Company's TRS operations and certaincorporate assets. Maintenance and repairs that neither add materially to the value of the asset nor appreciably prolong its useful life are charged to expense asincurred. Gains or losses on the disposal of property and equipment are included in the determination of income.Depreciation of property and equipment is recorded using the straight-line method over the following estimated useful lives: Land improvements 15 yearsBuilding and improvements 5 to 31 yearsFurniture, fixtures, and equipment 3 to 31 yearsLeasehold improvements are depreciated over the shorter of the estimated useful life of the improvement or the related lease term. The estimateduseful lives are determined based on the nature of the assets as well as the Company's current operating strategy.The Company reviews the carrying value of its property and equipment for possible impairment whenever events or changes in circumstancesindicate that the carrying value of an asset may not be recoverable based upon the estimated undiscounted future cash flows expected to result from its useand eventual disposition. If the Company determines the carrying amount is not recoverable, it would recognize an impairment charge equivalent to theamount required to reduce the carrying value of the asset to its estimated fair value, calculated in accordance with GAAP. In estimating expected future cashflows for determining whether an asset is impaired, assets are grouped at the individual property level. In assessing the recoverability of the carrying value ofproperty and equipment, the Company must make assumptions regarding future cash flows and other factors. The factors considered by the Company inperforming this assessment include current operating results, market and other applicable trends and residual values, as well as the effect of obsolescence,demand, competition and other factors. If these estimates or the related assumptions change in the future, the Company may be required to record animpairment loss for these assets.Investments in Direct Financing LeasesThe Company's investment in direct financing lease represents the building portion of the real estate assets acquired in the Pinnacle acquisition. Asdiscussed in Note 8, the Pinnacle Master Lease is bifurcated between an operating lease and a direct financing lease, with the land assets qualifying foroperating lease treatment and the building assets triggering direct financing lease treatment. Upon entry into a direct financing lease, the Company recordsthe acquisition date fair value of the purchased buildings as the net investment in direct financing lease on its consolidated balance sheet. The grossinvestment in a direct financing lease represents the total future minimum lease payments attributable to the direct financing lease as well as the estimatedresidual value of the property. At any point in time, the difference between the net investment and gross investment in a direct financing lease represents theunearned income which is subsequently recognized as interest income and included in income from direct financing lease in the Company's consolidatedstatements of income. Unearned income is recognized over the applicable lease term using the effective interest rate method which produces a constantperiodic rate of return on the net investment in the leased property. Furthermore, the Company's investment in direct financing leases is reduced over theapplicable lease term to its residual value by the building portion of rent.If and when an investment in direct financing lease is identified for impairment evaluation, the Company will apply the guidance in both ASC 310"Receivables" ("ASC 310") and ASC 360 "Property, Plant and Equipment" ("ASC 360"). Under ASC 310, the lease receivable portion of the net investment indirect financing leases is classified as a loan and identified for impairment when it becomes probable GLPI, as the lessor, will be unable to collect all rentalpayments associated with the Company's investment in direct financing leases. Under ASC 360, the residual value portion of the net investment in directfinancing leases is monitored for impairment under the same method the Company applies to real estate investments.Goodwill and Other Intangible AssetsAt both December 31, 2017 and 2016, the Company had $75.5 million of goodwill and $9.6 million of other intangible assets within itsconsolidated balance sheets, resulting from the contribution of Hollywood Casino Baton Rouge and Hollywood Casino Perryville in connection with theSpin-Off. The Company's goodwill resides on the books of its Hollywood Casino Baton Rouge subsidiary, while the other intangible asset represents agaming license on the books of its Hollywood Casino Perryville subsidiary. Both subsidiaries are members of the TRS Properties segment and are consideredseparate70Table of Contentsreporting units under ASC 350, "Intangibles - Goodwill and Other" ("ASC 350"). Goodwill is tested at the reporting unit level, which is an operating segmentor one level below an operating segment for which discrete financial information is available.Under ASC 350, the Company is required to test goodwill for impairment at least annually and whenever events or circumstances indicate that it ismore likely than not that goodwill may be impaired. The Company has elected to perform its annual goodwill impairment test as of October 1 of each year.ASC 350 prescribes a two-step goodwill impairment test, the first step which involves the determination of the fair value of each reporting unit and itscomparison to the carrying amount. In order to determine the fair value of the Baton Rouge reporting unit, the Company utilized a discounted cash flowmodel, which relied on projected EBITDA to determine the reporting unit's future cash flows. If the carrying amount exceeds the fair value in step 1, then step2 of the impairment test is performed to determine the implied value of goodwill. If the implied value of goodwill is less than the goodwill allocated to thereporting unit, an impairment loss is recognized.In accordance with ASC 350, the Company considers its Hollywood Casino Perryville gaming license an indefinite-lived intangible asset that doesnot require amortization based on the Company's future expectations to operate this casino indefinitely, as well as the gaming industry's historical experiencein renewing these intangible assets at minimal cost with various state gaming commissions. Rather, the Company's gaming license is tested annually, or morefrequently if indicators of impairment exist, for impairment by comparing the fair value of the recorded asset to its carrying amount. If the carrying amount ofthe indefinite-life intangible asset exceeds its fair value, an impairment loss is recognized. Hollywood Casino Perryville's gaming license will expire inSeptember 2025, fifteen years from the casino's opening date. The Company expects to expense any costs related to the gaming license renewal as incurred.We assessed the fair value of our gaming license using the Greenfield Method under the income approach. The Greenfield Method estimates the fairvalue of the gaming license assuming the Company built a casino with similar utility to that of the existing facility. The method assumes a theoretical start-up company going into business without any assets other than the intangible asset being valued. As such the value of the license is a function of thefollowing items:•Projected revenues and operating cash flows;•Theoretical construction costs and duration;•Pre-opening expenses;•Discounting that reflects the level of risk associated with receiving future cash flows attributable to the license; and•Remaining useful life of the licenseThe evaluation of goodwill and indefinite-lived intangible assets requires the use of estimates about future operating results to determine theestimated fair value of the reporting unit and the indefinite-lived intangible assets. The Company must make various assumptions and estimates inperforming its impairment testing. The implied fair value includes estimates of future cash flows that are based on reasonable and supportable assumptions,which represent the Company's best estimates of the cash flows expected to result from the use of the assets. Changes in estimates, increases in the Company'scost of capital, reductions in transaction multiples, changes in operating and capital expenditure assumptions or application of alternative assumptions anddefinitions could produce significantly different results. Future cash flow estimates are, by their nature, subjective and actual results may differ materiallyfrom the Company's estimates. If the Company's ongoing estimates of future cash flows are not met, the Company may have to record additional impairmentcharges in future accounting periods. The Company's estimates of cash flows are based on the current regulatory and economic climates, as well as recentoperating information and budgets. These estimates could be negatively impacted by changes in federal, state or local regulations, economic downturns, orother events.Forecasted cash flows can be significantly impacted by the local economy in which the Company's subsidiaries operate. For example, increases inunemployment rates can result in decreased customer visitations and/or lower customer spend per visit. In addition, new legislation which approves gamingin nearby jurisdictions or further expands gaming in jurisdictions in which the Company operates can result in increased competition for the property. Thisgenerally has a negative effect on profitability once competitors become established, as a certain level of cannibalization occurs absent an overall increase incustomer visitations. Lastly, increases in gaming taxes approved by state regulatory bodies can negatively impact forecasted cash flows.Assumptions and estimates about future cash flow levels are complex and subjective. They are sensitive to changes in underlying assumptions andcan be affected by a variety of factors, including external factors, such as industry, geopolitical and economic trends, and internal factors, such as changes inthe Company's business strategy, which may reallocate capital and resources to different or new opportunities which management believes will enhance theCompany's overall value but may be to the detriment of its existing operations.71Table of ContentsThe Company determined the fair value of its goodwill and gaming license as of October 1, 2017 utilizing the forecasted cash flow methodsdescribed above and compared these values to the carrying value of the assets on its balance sheet. In determining the fair value of each asset, the Companyincorporated recent operating trends of both TRS properties into its current year projections. After consideration of these facts, the fair value of both assetssubstantially exceeded their carrying amount, and as of October 1, 2017, the Company's goodwill and gaming license were not impaired.As discussed in Note 2, the FASB recently issued ASU 2017-04, which simplifies the goodwill impairment test for public companies by eliminatingStep 2 from the test. Upon the adoption of ASU 2017-04, an impairment charge is simply recorded as the difference between the carrying value and fair valueof a reporting unit's goodwill, when the carrying value exceeds fair value. See Note 2 for further details on the new standard. The Company does not expectthe adoption of ASU 2017-04 to significantly impact its goodwill impairment testing, as it has not recognized an impairment charge for goodwill orintangible assets since inception.Debt Issuance CostsDebt issuance costs that are incurred by the Company in connection with the issuance of debt are deferred and amortized to interest expense over thecontractual term of the underlying indebtedness. In accordance with ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying thePresentation of Debt Issuance Costs, the Company records long-term debt net of unamortized debt issuance costs on its consolidated balance sheets.Loan ReceivableThe Company may periodically loan funds to tenants. Loans are made at prevailing market interest rates and recorded on the Company'sconsolidated balance sheets at carrying value which approximates fair value. If the collectability of an outstanding loan balance is not reasonably assured,the Company will assess the loan's carrying value for potential impairment. If it is determined the loan is in fact impaired it will be written down or offcompletely. Currently, the Company does not have any allowances recorded against its loan receivable as the collection of the remaining principal andinterest payments is reasonable assured. Interest income related to loans receivable is recorded in interest income within the Company's consolidatedstatements of income in the period earned.Income TaxesThe TRS Properties are able to engage in activities resulting in income that would not be qualifying income for a REIT. As a result, certain activitiesof the Company which occur within its TRS Properties are subject to federal and state income taxes. The Company accounts for income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"). Under ASC 740, deferred tax assets andliabilities are determined based on the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and aremeasured at the prevailing enacted tax rates that will be in effect when these differences are settled or realized. ASC 740 also requires that deferred tax assetsbe reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realizability of thedeferred tax assets is evaluated by assessing the valuation allowance and by adjusting the amount of the allowance, if any, as necessary. The factors used toassess the likelihood of realization are the forecast of future taxable income.ASC 740 also creates a single model to address uncertainty in tax positions, and clarifies the accounting for uncertainty in income taxes recognizedin an enterprise's financial statements by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in anenterprise's financial statements. It also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interimperiods, disclosure and transition. The Company did not have any uncertain tax positions for the three years ended December 31, 2017.The Company is required under ASC 740 to disclose its accounting policy for classifying interest and penalties, the amount of interest and penaltiescharged to expense each period, as well as the cumulative amounts recorded in the consolidated balance sheets. If and when they occur, the Company willclassify any income tax-related penalties and interest accrued related to unrecognized tax benefits in taxes on income within the consolidated statements ofincome. During the year ended December 31, 2017, the Company recognized no penalties and interest, net of deferred income taxes and during the yearsended December 31, 2016 and 2015, the Company recognized $1 thousand and $59 thousand of penalties and interest, net of deferred income taxes,respectively.The Company elected on its U.S. federal income tax return for its taxable year that began on January 1, 2014 to be treated as a REIT and theCompany, together with an indirect wholly-owned subsidiary of the Company, GLP Holdings, Inc., jointly elected to treat each of GLP Holdings, Inc.,Louisiana Casino Cruises, Inc. and Penn Cecil Maryland, Inc. as a "taxable REIT subsidiary" effective on the first day of the first taxable year of GLPI as aREIT. The Company continues to be organized72Table of Contentsand to operate in a manner that will permit the Company to qualify as a REIT. To qualify as a REIT, the Company must meet certain organizational andoperational requirements, including a requirement to distribute at least 90% of its annual REIT taxable income to shareholders. As a REIT, the Companygenerally will not be subject to federal, state or local income tax on income that it distributes as dividends to its shareholders, except in those jurisdictionsthat do not allow a deduction for such distributions. If the Company fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal, state andlocal income tax, including any applicable alternative minimum tax, on its taxable income at regular corporate income tax rates, and dividends paid to itsshareholders would not be deductible by the Company in computing taxable income. Any resulting corporate liability could be substantial and couldmaterially and adversely affect the Company's net income and net cash available for distribution to shareholders. Unless the Company was entitled to reliefunder certain Internal Revenue Code provisions, the Company also would be disqualified from re-electing to be taxed as a REIT for the 4 taxable yearsfollowing the year in which it failed to qualify to be taxed as a REIT.Revenue RecognitionThe Company recognizes rental revenue from tenants, including rental abatements, lease incentives and contractually fixed increases attributable tooperating leases, on a straight-line basis over the term of the related leases when collectability is reasonably assured. Additionally, percentage rent that isfixed and determinable at the lease inception date is recorded on a straight-line basis over the lease term, resulting in the recognition of deferred rentalrevenue on the Company’s consolidated balance sheets. Deferred rental revenue is amortized to rental revenue on a straight-line basis over the remainder ofthe lease term. The lease term includes the initial non-cancelable lease term and any reasonably assured renewable periods. Contingent rental income that isnot fixed and determinable at lease inception is recognized only when the lessee achieves the specified target. Recognition of rental income commenceswhen control of the facility has been transferred to the tenant.The Company recognizes income from tenants subject to direct financing leases ratably over the lease term using the effective interest rate methodwhich produces a constant periodic rate of return on the net investment in the leased property. At lease inception, the Company records an asset whichrepresents the Company's net investment in the direct financing lease. This initial net investment is determined by aggregating the total future minimumlease payments attributable to the direct financing lease and the estimated residual value of the property, less unearned income. Over the lease term, theinvestment in the direct financing lease is reduced and income is recognized for the building portion of rent. Furthermore, as the net investment in directfinancing lease includes only future minimum lease payments, percentage rent that is not fixed and determinable at the lease inception is excluded from thedetermination of the rent attributable to the leased assets and will therefore be recorded as income from the direct financing lease in the period earned. Forfurther detail on the Company's direct financing lease refer to Note 8.Additionally, in accordance with ASC 605, "Revenue Recognition," the Company records revenue for the real estate taxes paid by its tenants on theleased properties with an offsetting expense in real estate taxes within the consolidated statement of income as the Company has concluded it is the primaryobligor. Similarly, the Company records revenue for the ground lease rent paid by its tenants with an offsetting expense in land rights and ground leaseexpense within the consolidated statements of income as the Company has concluded that as the lessee it is the primary obligor under the ground leases. TheCompany subleases these ground leases back to its tenants, who are responsible for payment directly to the landlord.Gaming revenue generated by the TRS Properties mainly consists of video lottery gaming revenue and to a lesser extent, table game and pokerrevenue. Video lottery gaming revenue is the aggregate net difference between gaming wins and losses with liabilities recognized for funds deposited bycustomers before gaming play occurs, for "ticket-in, ticket-out" coupons in the customers’ possession, and for accruals related to the anticipated payout ofprogressive jackpots. Progressive slot machines, which contain base jackpots that increase at a progressive rate based on the number of coins played, arecharged to revenue as the amount of the jackpots increase. Table game gaming revenue is the aggregate of table drop adjusted for the change in aggregatetable chip inventory. Table drop is the total dollar amount of the currency, coins, chips, tokens, outstanding counter checks (markers), and front money thatare removed from the live gaming tables. Additionally, food and beverage revenue is recognized as services are performed.Gaming revenue is recognized net of certain sales incentives in accordance with ASC 605-50, "Revenue Recognition— Customer Payments andIncentives." The Company records certain sales incentives and points earned in point-loyalty programs as a reduction of revenue. See Note 2 for a summary ofanticipated changes to the recognition of revenue at the TRS Properties upon the adoption of ASU 2014-09 on January 1, 2018.73Table of Contents Gaming and Admission Taxes For the TRS Properties, the Company is subject to gaming and admission taxes based on gross gaming revenues in the jurisdictions in which itoperates. The Company primarily recognizes gaming tax expense based on the statutorily required percentage of revenue that is required to be paid to stateand local jurisdictions in the states where wagering occurs. At Hollywood Casino Baton Rouge, the state gaming tax rate is flat, while the admission tax isbased on graduated tax rates that increase as gross gaming revenues increase. At Hollywood Casino Perryville the state gaming tax rate is flat. The Companyrecords gaming and admission taxes at the Company’s estimated effective gaming tax rate for the year, considering estimated taxable gaming revenue and theapplicable rates. Such estimates are adjusted each interim period. If gaming and admission tax rates change during the year, such changes are appliedprospectively in the determination of gaming tax expense in future interim periods. For the three years ended December 31, 2017, these expenses, which arerecorded within gaming, food, beverage and other expense in the consolidated statements of income, totaled $57.4 million, $57.7 million and $60.1 million,respectively.Earnings Per Share The Company calculates earnings per share ("EPS") in accordance with ASC 260, "Earnings Per Share." Basic EPS is computed by dividing netincome applicable to common stock by the weighted-average number of common shares outstanding during the period, excluding net income attributable toparticipating securities (unvested restricted stock awards). Diluted EPS reflects the additional dilution for all potentially-dilutive securities such as stockoptions, unvested restricted shares and unvested performance-based restricted shares.The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-averagecommon shares outstanding used in the calculation of diluted EPS for the years ended December 31, 2017, 2016 and 2015: Year Ended December 31,2017 2016 2015(in thousands)Determination of shares: Weighted-average common shares outstanding210,705 178,594 114,432Assumed conversion of dilutive employee stock-based awards644 1,699 3,755Assumed conversion of restricted stock155 171 170Assumed conversion of performance-based restricted stock awards1,248 158 82Diluted weighted-average common shares outstanding212,752 180,622 118,439The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the years ended December 31, 2017,2016 and 2015: Year Ended December 31,2017 2016 2015(in thousands, except per share amounts)Calculation of basic EPS: Net income$380,598 $289,305 $128,122Less: Net income allocated to participating securities(622) (668) (517)Net income attributable to common shareholders$379,976 $288,637 $127,605Weighted-average common shares outstanding210,705 178,594 114,432Basic EPS$1.80 $1.62 $1.12 Calculation of diluted EPS: Net income$380,598 $289,305 $128,122Diluted weighted-average common shares outstanding212,752 180,622 118,439Diluted EPS$1.79 $1.60 $1.08There were 3,483, 23,954 and 24,233 outstanding equity based awards during the years ended December 31, 2017, 2016 and 2015, respectively, thatwere not included in the computation of diluted EPS because they were antidilutive. 74Table of ContentsStock-Based CompensationThe Company's 2013 Long Term Incentive Compensation Plan (the "2013 Plan") provides for the Company to issue restricted stock awards,including performance-based restricted stock awards, and other equity or cash based awards to employees. Any director, employee or consultant shall beeligible to receive such awards.The Company accounts for stock compensation under ASC 718, "Compensation - Stock Compensation," which requires the Company to expensethe cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. This expense isrecognized ratably over the requisite service period following the date of grant. The fair value of the Company's time-based restricted stock awards isequivalent to the closing stock price on the day of grant. The Company utilizes a third party valuation firm to measure the fair value of performance-basedrestricted stock awards at grant date using the Monte Carlo model. The unrecognized compensation cost relating to restricted stock awards and performance-based restricted stock awards will be amortized to expenseover the awards’ remaining vesting periods.See Note 14 for further information related to the stock-based compensation.Segment Information Consistent with how the Company’s Chief Operating Decision Maker reviews and assesses the Company’s financial performance, the Company hastwo reportable segments, GLP Capital, L.P. (a wholly-owned subsidiary of GLPI through which GLPI owns substantially all of its real estate assets)("GLP Capital") and the TRS Properties. The GLP Capital reportable segment consists of the leased real property and represents the majority of theCompany’s business. The TRS Properties reportable segment consists of Hollywood Casino Perryville and Hollywood Casino Baton Rouge. See Note 15 forfurther information with respect to the Company’s segments.Statements of Cash FlowsThe Company has presented the consolidated statements of cash flows using the indirect method, which involves the reconciliation of net income tonet cash flow from operating activities.4. AcquisitionsCurrent Year AcquisitionOn May 1, 2017, the Company acquired the real property assets of Bally's Casino Tunica (subsequently re-branded as the 1st Jackpot Casino) andResorts Casino Tunica (the "Tunica Properties") for $82.9 million. The Company acquired both Bally's Casino Tunica and Resorts Casino Tunica, as well asthe Resorts Hotel and land at Bally's Casino Tunica. Land rights to three long-term ground leases related to the Tunica Properties were also acquired in thetransaction. The Company records revenue for the ground lease rent paid by its tenants with an offsetting expense in land rights and ground lease expensewithin the consolidated statements of income as the Company has concluded that as the lessee it is the primary obligor under these ground leases. As theprimary obligor under these ground leases, the Company will record annual obligations of $2.7 million in its financial statements as both revenue andexpense. However, the Company subleases these ground leases back to its tenants, who are responsible for payment directly to the landlord.Penn purchased the operating assets of the Tunica Properties directly from the seller, operates both properties and leases the real property assets fromthe Company under the Penn Master Lease. The initial annual cash rent of $9.0 million for the Tunica Properties will be subject to rent escalators andadjustments consistent with the other properties under the Penn Master Lease.Prior Year AcquisitionsOn September 9, 2016, the Company acquired the real property assets of the Meadows Racetrack and Casino (the "Meadows") from Cannery CasinoResorts ("CCR") for approximately $323.3 million. Concurrent with the Company's purchase of the Meadows' real estate assets, Pinnacle purchased theentities holding the Meadows' gaming and racing licenses and operating assets from CCR. GLPI leases the Meadows' real property assets to Pinnacle under atriple-net lease separate from the Pinnacle Master Lease with an initial term of 10 years with no purchase option and the option to renew for three successive5-year terms and one 4-year term, at Pinnacle's option (the "Meadows Lease").75Table of ContentsOn April 28, 2016, the Company acquired substantially all of the real estate assets of Pinnacle, adding 14 properties to its real estate portfolio. Theacquisition of Pinnacle's real estate assets was the final step in a series of transactions contemplated by the July 20, 2015 merger agreement between GLPI,Gold Merger Sub, LLC, a wholly owned subsidiary of GLPI ("Merger Sub"), and Pinnacle providing for the merger of Pinnacle with and into Merger Sub, withMerger Sub surviving the merger as a wholly owned subsidiary of GLPI (the "Pinnacle Merger"). Following the Pinnacle Merger, GLPI contributed all of theequity interests of Gold Merger Sub to GLP Capital, L.P., a Pennsylvania limited partnership and a wholly owned subsidiary of GLPI ("GLP Capital"). AtDecember 31, 2017, GLPI owns all of Pinnacle’s real property assets, other than Pinnacle’s Belterra Park Gaming & Entertainment Center property and excessland at certain locations. Approval of the Pinnacle Merger by GLPI shareholders and Pinnacle stockholders was obtained at separate special meetings held onMarch 15, 2016.In order to effect the acquisition of Pinnacle’s real property assets (other than the Belterra Park property and excess land at certain locations), prior tothe Pinnacle Merger, Pinnacle caused certain assets relating to its operating business to be transferred to, and liabilities relating thereto to be assumed by anewly formed wholly owned subsidiary of Pinnacle ("OpCo"). Immediately following the separation of its real property assets and gaming and otheroperating assets, Pinnacle distributed to its stockholders all of the issued and outstanding shares of common stock of OpCo. As described above, on April 28,2016, Pinnacle merged with and into Merger Sub, as described in more detail in the joint proxy statement/prospectus filed with a Registration Statement onForm S-4 (No. 333-206649) initially filed by GLPI with the SEC on December 23, 2015 and declared effective on February 16, 2016 (the "Joint ProxyStatement/Prospectus"), completing the Pinnacle Merger. Merger Sub, as the surviving company in the Pinnacle Merger, owns substantially all of Pinnacle’sreal estate assets that were retained or transferred to Pinnacle in the separation and leases those assets back to Pinnacle pursuant to the triple-net 35-year(including extension renewals) Pinnacle Master Lease. A wholly-owned subsidiary of Pinnacle operates the leased gaming facilities as a tenant under thePinnacle Master Lease Agreement.At the effective time of the Pinnacle Merger, each share of Pinnacle common stock issued and outstanding immediately prior to the effective time ofthe Pinnacle Merger was converted into 0.85 of a share of GLPI common stock, with cash paid in lieu of the issuance of fractional shares of GLPI commonstock. Shares of GLPI common stock were also issued to satisfy GLPI's portion of the outstanding Pinnacle employee equity and cash-based incentive awardsoutstanding at the closing date. Approximately 56.0 million shares of GLPI common stock were issued as consideration in the Pinnacle Merger. Additionally,GLPI repaid $2.7 billion of Pinnacle's debt and paid $226.8 million of Pinnacle's transaction expenses related to the Pinnacle Merger. The acquisition of thePinnacle real estate assets is accounted for as an asset acquisition under ASC 805 - Business Combinations. Under asset acquisition accounting, transactioncosts incurred to acquire the purchased assets are also included as part of the asset cost. Inclusive of $28.3 million of the Company's own transactionexpenses, the purchase price of the Pinnacle real estate assets was $4.8 billion. The Pinnacle Merger contributed approximately $352.5 million and $237.5million to the Company's net revenues for the years ended December 31, 2017 and 2016, respectively and resulted in approximately $54.2 million and $36.2million of additional operating expenses for the same periods. Pinnacle is a publicly traded company that is subject to the informational filing requirementsof the Securities and Exchange Act of 1934, as amended, and is required to file periodic reports on Form 10-K, Form 10-Q and Form 8-K with the SEC.Readers are directed to Pinnacle's website for further financial information on Pinnacle.Purchase price allocations are primarily based on the fair values of assets acquired and liabilities assumed at the time of acquisition. The followingtables summarize the consideration transferred in the Pinnacle Merger and the purchase price allocation to the assets acquired in the Pinnacle Merger (inthousands):Consideration Cash$2,955,090GLPI common stock1,823,991Fair value of total consideration transferred$4,779,081Real estate investments, net$1,422,547Land rights, net596,920Investment in direct financing lease, net2,759,244Prepaid expenses111Other assets259Total purchase price$4,779,08176Table of ContentsAs detailed above, the Company paid $3.0 billion in cash for the acquired Pinnacle real estate assets. In addition, as part of the consideration paidfor the Pinnacle real estate assets acquired in the Pinnacle Merger, the Company issued shares of its common stock to Pinnacle stockholders and to Pinnacleto satisfy the Company's portion of Pinnacle's employee equity and cash-based incentive awards. The dollar value of the issued shares was $1.8 billion and isconsidered purchase price.The real estate investments, net represent the land purchased from Pinnacle, while the land rights, net represent the Company's rights to land subjectto long-term ground leases. The Company acquired ground leases at several of the Pinnacle properties and immediately subleased the land back to Pinnacle.The investment in direct financing lease, net is the Company's investment in the buildings and building improvements purchased from Pinnacle. As detailedin Note 8, the Pinnacle Master Lease was bifurcated between an operating lease and direct financing lease. The accounting treatment for the buildingspurchased under a direct financing lease required the Company to record its initial investment in the buildings as a receivable on its consolidated balancesheet, which is subsequently reduced over the lease term to its estimated residual value. The purchase price allocated to prepaid expenses and other assetsrepresents the current and long-term portions of a director and officer liability insurance policy purchased from Pinnacle.5. Real Estate Investments Real estate investments, net, represents investments in 36 rental properties and the corporate headquarters building and is summarized as follows: December 31, 2017 December 31, 2016(in thousands)Land and improvements$2,057,928 $2,057,391Building and improvements2,461,573 2,438,581Total real estate investments4,519,501 4,495,972Less accumulated depreciation(857,456) (756,881)Real estate investments, net$3,662,045 $3,739,0916. Land RightsLand rights, net represent the Company's rights to land subject to long-term ground leases. The Company obtained ground lease rights through theacquisition of several of its rental properties and immediately subleased the land to its tenants. These land rights represent the below market value of therelated ground leases. The Company assessed the acquired ground leases to determine if the lease terms were favorable or unfavorable, given marketconditions at the acquisition date. Because the market rents to be received under the Company's triple-net tenant leases were greater than the rents to be paidunder the acquired ground leases, the Company concluded that the ground leases were below market and were therefore required to be recorded as a definitelived asset (land rights) on its books.The land rights are amortized over the individual lease term of each ground lease, including all renewal options, which ranged from 25 years to 92years at their respective acquisition dates. Land rights net, consists of the following: December 31, 2017 December 31, 2016 (in thousands)Land rights$656,666 $596,921Less accumulated amortization(16,518) (6,163)Land rights, net$640,148 $590,758Amortization expense related to the ground leases is recorded within land rights and ground lease expense in the consolidated statements of incomeand totaled $10.4 million and $6.2 million for the years ended December 31, 2017 and 2016, respectively.77Table of ContentsAs of December 31, 2017, estimated future amortization expense related to the Company’s ground leases by fiscal year is as follows (in thousands):Year ending December 31, 2018$10,910201910,910202010,910202110,910202210,910Thereafter585,598Total$640,148Details of the significant ground leases are as follows. The Company leases land at the Belterra Casino Resort under two ground leases, each with aninitial term of 5 years and nine automatic renewals of 5 years each. The renewal options extend the leases through 2049 and are not terminable by theCompany. The lease includes a base portion which is adjusted at each renewal based upon the CPI and a variable portion which is adjusted annually basedupon 1.5% of gross gaming wins in excess of $100 million.The Company leases land at the Ameristar East Chicago property under a ground lease with an initial term of 30 years and two optional renewals of30 years each. The lease extends through 2086 with all renewals. Rent under the lease is adjusted every 3 years based upon the CPI and does not include avariable portion.The Company leases land at the River City Hotel and Casino under a ground lease with a term of 99 years that extends through 2108. The leaseincludes a base portion which is fixed and a variable portion which is adjusted annually based upon 2.5% of the annual gross receipts of the property lessfixed rent payments made in the same year.The Company leases land at the L'Auberge Lakes Charles property under a ground lease with an initial term of 10 years and six optional renewals of10 years each. The lease extends through 2075 with all renewals. Rent under the lease is adjusted annually based upon the CPI and does not include avariable portion.The Company leases land at the Resorts Casino Tunica property under a ground lease with an initial term of 3 years and nine optional renewals of 5years each. The lease extends through 2042 with all renewals. The lease has an annual fixed rent provision and does not include a variable portion.The Company leases land at the 1st Jackpot Casino (formerly known as Bally's Casino Tunica) under two ground leases. The first ground lease has aninitial term of 6 years and nine optional renewals of 6 years each. The lease extends through 2054 with all renewals. Rent under this lease is adjustedannually based upon the CPI and does not include a variable portion. The second lease has an initial term of 10 years with ten optional renewals of 5 yearseach. The lease extends through 2055 with all renewals. The lease has an annual fixed rent provision and a variable portion which is adjusted annually basedupon net gaming revenues of up to 4%, dependent on the property's operating results.7. Property and Equipment Used in Operations Property and equipment used in operations, net, consists of the following and primarily represents the assets utilized in the TRS Properties December 31, 2017 December 31, 2016(in thousands)Land and improvements$30,276 $30,965Building and improvements116,286 117,350Furniture, fixtures, and equipment114,972 114,965Construction in progress8 330Total property and equipment261,542 263,610Less accumulated depreciation(153,249) (144,183)Property and equipment, net$108,293 $119,42778Table of Contents8. ReceivablesInvestment in Direct Financing Lease, NetUnder ASC 840 - Leases ("ASC 840"), the Pinnacle Master Lease is bifurcated between an operating lease and a direct financing lease. The fair valueassigned to the land (inclusive of the land rights) qualifies for operating lease treatment, while the fair value assigned to the buildings is classified as a directfinancing lease. Under ASC 840, the accounting treatment for direct financing leases requires the Company to record an investment in direct financing leaseson its books at lease inception and subsequently recognize interest income and a reduction in the investment for the building portion of rent. This initial netinvestment is determined by aggregating the total future minimum lease payments attributable to the direct financing lease and the estimated residual valueof the property, less unearned income. The interest income recorded under the direct financing lease is included in income from direct financing lease in theCompany's consolidated statements of income and is recognized over the 35-year lease term using the effective interest rate method which produces aconstant periodic rate of return on the net investment in the leased property. Furthermore, as the net investment in direct financing lease includes only futureminimum lease payments, rent that is not fixed and determinable at the lease inception is excluded from the determination of the rent attributable to theleased assets and will therefore be recorded as income from direct financing lease in the period earned. The unguaranteed residual value is the Company'sestimate of what it could realize upon the sale of the property at the end of the lease term.The net investment in the direct financing lease is evaluated for impairment as necessary, if indicators of impairment are present, to determine ifthere has been an-other-than-temporary decline in the residual value of the property or a change in the lessee's credit worthiness. At December 31, 2017, therewere no indicators of a decline in the estimated residual value of the property and collectability of the remaining receivable balance is reasonably assured.The Company's investment in direct financing lease, net, consists of the following and represents the building assets acquired from Pinnacle: December 31, 2017 December 31, 2016(in thousands)Minimum lease payments receivable$3,263,387 $3,405,131Unguaranteed residual value689,811 689,811Gross investment in direct financing lease3,953,198 4,094,942Less: unearned income(1,315,559) (1,384,231)Investment in direct financing lease, net$2,637,639 $2,710,711Loan ReceivableIn January 2014, the Company completed the asset acquisition of the real property associated with the Casino Queen in East St. Louis, Illinois for$140.7 million. GLPI leases the property back to Casino Queen on a triple-net basis on terms similar to those in the Master Leases. The lease has an initialterm of 15 years and the tenant has an option to renew it at the same terms and conditions for four successive five-year periods (the "Casino Queen Lease"). Simultaneously with the Casino Queen acquisition, GLPI also provided Casino Queen with a $43.0 million, five-year term loan at 7% interest, pre-payable at any time, which, together with the sale proceeds, completely refinanced and retired all of Casino Queen’s outstanding long-term debt obligations.On March 13, 2017, the outstanding principal and interest on this loan was repaid in full and GLPI simultaneously provided a new unsecured $13.0 million,5.5 year term loan to CQ Holding Company, Inc., an affiliate of Casino Queen, to partially finance their acquisition of Lady Luck Casino in Marquette, Iowa.The cash proceeds were net settled. The new loan bears an interest rate of 15% and is pre-payable at any time. As of December 31, 2017, the balance of thenew loan is $13.0 million. The collectability of the loan balance is reasonably assured, and as of December 31, 2017, there is no indication that the obligorwill not remit all mandatory principal and interest payments in full and on time. The loan balance is recorded at carrying value which approximates fairvalue. Interest income related to the loan is recorded in interest income within the Company's consolidated statements of income in the period earned.79Table of Contents9. Long-term Debt Long-term debt, net of current maturities and unamortized debt issuance costs is as follows: December 31, 2017 December 31, 2016(in thousands)Unsecured term loan A$230,000 $300,000Unsecured term loan A-1825,000 825,000Unsecured $700 million revolver— 165,000$550 million 4.375% senior unsecured notes due November 2018550,000 550,000$1,000 million 4.875% senior unsecured notes due November 20201,000,000 1,000,000$400 million 4.375% senior unsecured notes due April 2021400,000 400,000$500 million 5.375% senior unsecured notes due November 2023500,000 500,000$975 million 5.375% senior unsecured notes due April 2026975,000 975,000Capital lease1,230 1,341Total long-term debt4,481,230 4,716,341Less: unamortized debt issuance costs(38,350) (51,376)Total long-term debt, net of unamortized debt issuance costs$4,442,880 $4,664,965The following is a schedule of future minimum repayments of long-term debt as of December 31, 2017 (in thousands): 2018$780,117201912320201,000,12920211,225,1362022142Over 5 years1,475,583Total minimum payments$4,481,230Senior Unsecured Credit Facility The Company has a $1,825 million dollar senior unsecured credit facility (the "Credit Facility"), consisting of a $700 million revolving creditfacility, a $300 million Term Loan A facility, and an $825 million Term Loan A-1 facility. The revolving credit facility and the Term Loan A facility matureon October 28, 2018 and the Term Loan A-1 facility matures on April 28, 2021.The interest rates payable on the loans are, at the Company's option, equal to either a LIBOR rate or a base rate plus an applicable margin, whichranges from 1.0% to 2.0% per annum for LIBOR loans and 0.0% to 1.0% per annum for base rate loans, in each case, depending on the credit ratings assignedto the Credit Facility. At December 31, 2017, the applicable margin was 1.50% for LIBOR loans and 0.50% for base rate loans. In addition, the Company isrequired to pay a commitment fee on the unused portion of the commitments under the revolving facility at a rate that ranges from 0.15% to 0.35% perannum, depending on the credit ratings assigned to the Credit Facility. At December 31, 2017, the commitment fee rate was 0.25%. The Company is notrequired to repay any loans under the Credit Facility prior to maturity on October 28, 2018 and may prepay all or any portion of the loans under the CreditFacility prior to maturity without premium or penalty, subject to reimbursement of any LIBOR breakage costs of the lenders. The Company's wholly ownedsubsidiary, GLP Capital is the primary obligor under the Credit Facility, which is guaranteed by GLPI.At December 31, 2017, the Credit Facility had a gross outstanding balance of $1,055 million. Additionally, at December 31, 2017, the Company wascontingently obligated under letters of credit issued pursuant to the senior unsecured credit facility with face amounts aggregating approximately $0.4million, resulting in $699.6 million of available borrowing capacity under the revolving credit facility as of December 31, 2017.The Credit Facility contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of GLPI and itssubsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in80Table of Contentsacquisitions, mergers or consolidations or pay certain dividends and other restricted payments. The Credit Facility contains the following financialcovenants, which are measured quarterly on a trailing four-quarter basis: a maximum total debt to total asset value ratio, a maximum senior secured debt tototal asset value ratio, a maximum ratio of certain recourse debt to unencumbered asset value and a minimum fixed charge coverage ratio. In addition, GLPI isrequired to maintain a minimum tangible net worth and its status as a REIT on and after the effective date of its election to be treated as a REIT, which theCompany elected on its 2014 U.S. federal income tax return. GLPI is permitted to pay dividends to its shareholders as may be required in order to maintainREIT status, subject to the absence of payment or bankruptcy defaults. GLPI is also permitted to make other dividends and distributions subject to pro formacompliance with the financial covenants and the absence of defaults. The Credit Facility also contains certain customary affirmative covenants and events ofdefault, including the occurrence of a change of control and termination of the Penn Master Lease (subject to certain replacement rights). The occurrence andcontinuance of an event of default under the Credit Facility will enable the lenders under the Credit Facility to accelerate the loans and terminate thecommitments thereunder. At December 31, 2017, the Company was in compliance with all required financial covenants under the Credit Facility.Senior Unsecured NotesAt December 31, 2017, the Company had $550 million outstanding of 4.375% senior unsecured notes maturing on November 1, 2018 (the "2018Notes"), $1,000 million outstanding of 4.875% senior unsecured notes maturing on November 1, 2020 (the "2020 Notes"), $400 million of 4.375% seniorunsecured notes maturing on April 15, 2021 (the "2021 Notes"), $500 million outstanding of 5.375% senior unsecured notes maturing on November 1, 2023(the "2023 Notes") and $975 million of 5.375% senior unsecured notes maturing on April 15, 2026 (the "2026 Notes"and collectively with the 2018 Notes,the 2020 Notes, the 2021 Notes and the 2023 Notes, the "Notes"). Interest on each of the 2018 Notes, 2020 Notes and 2023 Notes, is payable semi-annuallyon May 1 and November 1 of each year. Interest on the 2021 Notes and 2026 Notes is payable semi-annually on April 15 and October 15 of each year andcommenced on October 15, 2016.The Company may redeem the Notes of any series at any time, and from time to time, at a redemption price of 100% of the principal amount of theNotes redeemed, plus a "make-whole" redemption premium described in the indenture governing the Notes, together with accrued and unpaid interest to, butnot including, the redemption date, except that if Notes of a series are redeemed 90 or fewer days prior to their maturity, the redemption price will be 100% ofthe principal amount of the Notes redeemed, together with accrued and unpaid interest to, but not including, the redemption date. If GLPI experiences achange of control accompanied by a decline in the credit rating of the Notes of a particular series, the Company will be required to give holders of the Notesof such series the opportunity to sell their Notes of such series at a price equal to 101% of the principal amount of the Notes of such series, together withaccrued and unpaid interest to, but not including, the repurchase date. The Notes also are subject to mandatory redemption requirements imposed by gaminglaws and regulations. The Notes were issued by GLP Capital, L.P. and GLP Financing II, Inc. (the "Issuers"), two wholly-owned subsidiaries of GLPI, and are guaranteed ona senior unsecured basis by GLPI. The guarantees of GLPI are full and unconditional. The Notes are the Issuers' senior unsecured obligations and rank paripassu in right of payment with all of the Issuers' senior indebtedness, including the Credit Facility, and senior in right of payment to all of the Issuers'subordinated indebtedness, without giving effect to collateral arrangements. See Note 19 for additional financial information on the parent guarantor andsubsidiary issuers of the Notes.The Notes contain covenants limiting the Company’s ability to: incur additional debt and use its assets to secure debt; merge or consolidate withanother company; and make certain amendments to the Penn Master Lease. The Notes also require the Company to maintain a specified ratio ofunencumbered assets to unsecured debt. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. At December 31, 2017, the Company was in compliance with all required financial covenants under the Notes.Capital LeaseThe Company assumed the capital lease obligation related to certain assets at its Aurora, Illinois property. GLPI recorded the asset and liabilityassociated with the capital lease on its balance sheet. The original term of the capital lease was 30 years and it will terminate in 2026.81Table of Contents10. Commitments and Contingencies Separation and Distribution AgreementsPursuant to a Separation and Distribution Agreement between Penn and GLPI, any liability arising from or relating to legal proceedings involvingthe businesses and operations of Penn’s real property holdings prior to the Spin-Off (other than any liability arising from or relating to legal proceedingswhere the dispute arises from the operation or ownership of the TRS Properties) will be retained by Penn, and Penn will indemnify GLPI (and its subsidiaries,directors, officers, employees and agents and certain other related parties) against any losses it may incur arising from or relating to such legal proceedings.Similarly, pursuant to a Separation and Distribution Agreement between Pinnacle's operating company and GLPI (as successor to Pinnacle Entertainment),any liability arising from or relating to legal proceedings involving the business and operations of Pinnacle's real property holdings prior to the PinnacleMerger will be retained by Pinnacle, and Pinnacle will indemnify GLPI (and its subsidiaries, directors, officers, employees and agents and certain otherrelated parties) against any losses it may incur arising from or relating to such legal proceedings. There can be no assurance that Penn or Pinnacle will be ableto fully satisfy their indemnification obligations. Moreover, even if we ultimately succeed in recovering from Penn or Pinnacle any amounts for which we areliable, we may be temporarily required to bear those losses.LitigationThe Company is subject to various legal and administrative proceedings relating to personal injuries, employment matters, commercial transactions,and other matters arising in the normal course of business. The Company does not believe that the final outcome of these matters will have a material adverseeffect on the Company’s consolidated financial position or results of operations. In addition, the Company maintains what it believes is adequate insurancecoverage to further mitigate the risks of such proceedings. However, such proceedings can be costly, time consuming, and unpredictable and, therefore, noassurance can be given that the final outcome of such proceedings may not materially impact the Company’s financial condition or results of operations.Further, no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from such matters. Operating Lease CommitmentsAs part of the Spin-Off, Penn assigned to GLPI various leases on the land and buildings acquired in connection with the Spin-Off. The leases consistof annual base lease payments and, in some instances, a percentage rent based on a percent of adjusted gaming wins, as described in the respective leases. Thefollowing is a description of some of the more significant lease contracts that Penn assigned to GLPI:The Company has an operating lease for the land utilized in connection with the operations of the Boomtown Biloxi casino in Biloxi, Mississippi.The lease commenced March 3, 1994 and is for a term of 99 years. The annual rental payments are increased every 5 years by fifteen percent. The next resetperiod is in March 2019.The Company has an operating lease for the land utilized in connection with the operations of Hollywood Casino Tunica in Tunica, Mississippi.The lease commenced on October 11, 1993 with a five year initial term and nine five year renewals at the tenant's option. The lease agreement has an annualfixed rent provision, as well as an annual revenue-sharing provision, which is equal to the result obtained by subtracting the fixed rent provision from 4% ofgross revenues.The Company has an operating lease with the City of Bangor for the land utilized in connection with the operations of Hollywood Casino Bangor,which opened on July 1, 2008. Under the lease agreement, there is a fixed rent provision, for which GLPI is responsible, which totals $0.1 million per year.The term of the lease, which commenced with the opening of Hollywood Casino Bangor, is for an initial term of fifteen years, with three ten-year renewaloptions.During May 2017, the Company acquired the real estate assets of the Tunica Properties, including the rights to land subject to long-term groundleases. The Company assumed three ground leases related to the acquired Tunica Properties and immediately subleased the land to Penn, who is responsiblefor payment directly to the landlord. The Company records revenue for the ground lease rent paid by its tenants with an offsetting expense in land rights andground lease expense within the consolidated statements of income as the Company has concluded that as the lessee it is the primary obligor under theseground leases. The portion of the ground lease rent that is fixed and determinable is included in the schedule below as a future commitment, while the portionof the ground lease rent that is variable is excluded from future commitments as the amounts are not fixed and determinable at December 31, 2017 andtherefore considered contingent rent. For those ground leases with optional renewal terms extending beyond the 35-year lease term of the Penn Master Lease,the Company has included only the renewals that align most closely to the 2048 termination date of the Penn Master Lease in the schedule below, as itcannot be reasonably assured it will renew ground leases for land subleased to Penn beyond the term of the Penn Master Lease. The following is a descriptionof the lease contracts assumed from the acquisition of the Tunica Properties:82Table of ContentsThe Company leases land at the Resorts Casino Tunica property under a ground lease with an initial term of 3 years and nine optional renewals of 5years each. The lease extends through 2042 with all renewals. The lease has an annual fixed rent provision and does not include a variable portion.The Company leases land at the 1st Jackpot Casino (formerly known as Bally's Casino Tunica) under two ground leases. The first ground lease has aninitial term of 6 years and nine optional renewals of 6 years each. The lease extends through 2054 with all renewals. Rent under this lease is adjustedannually based upon the CPI and does not include a variable portion. The second lease has an initial term of 10 years with ten optional renewals of 5 yearseach. The lease extends through 2055 with all renewals. The lease has an annual fixed rent provision and a variable portion which is adjusted annually basedupon net gaming revenues of up to 4%, dependent on the property's operating results.During April 2016, the Company acquired the real estate assets of Pinnacle, including the rights to land subject to long-term ground leases. TheCompany assumed ground leases at several of the acquired Pinnacle properties and immediately subleased the land back to Pinnacle, who is responsible forpayment directly to the landlord. For those ground leases with optional renewal terms extending beyond the 35-year lease term of the Pinnacle Master Lease,the Company has included only the renewals that align most closely to the 2051 termination date of the Pinnacle Master Lease in the schedule below, as itcannot be reasonably assured it will renew ground leases for land subleased to Pinnacle beyond the term of the Pinnacle Master Lease. The following is adescription of the more significant lease contracts assumed from Pinnacle:The Company leases land at the Belterra Casino Resort under two ground leases, each with an initial term of 5 years and nine automatic renewals of5 years each. The renewal options extend the leases through 2049 and are not terminable by the Company. The lease includes a base portion which isadjusted at each renewal based upon the CPI and a variable portion which is adjusted annually based upon 1.5% of gross gaming wins in excess of $100million.The Company leases land at the Ameristar East Chicago property under a ground lease with an initial term of 30 years and two optional renewals of30 years each. The lease extends through 2086 with all renewals. Rent under the lease is adjusted every 3 years based upon the CPI and does not include avariable portion.The Company leases land at the River City Hotel and Casino under a ground lease with a term of 99 years that extends through 2108. The leaseincludes a base portion which is fixed and a variable portion which is adjusted annually based upon 2.5% of the annual gross receipts of the property lessfixed rent payments made in the same year.The Company leases land at the L'Auberge Lakes Charles property under a ground lease with an initial term of 10 years and six optional renewals of10 years each. The lease extends through 2075 with all renewals. Rent under the lease is adjusted annually based upon the CPI and does not include avariable portion.In addition, the Company is liable under numerous operating leases for equipment and other miscellaneous assets, which expire at various datesthrough 2023.Total rental expense under these agreements was $15.8 million, $11.0 million and $5.4 million for the years ended December 31, 2017, 2016 and2015. This includes rent expense under the leases assigned to the Company at Spin-Off, leases for equipment and miscellaneous assets and the fixed andvariable rent under the ground leases discussed above.The future minimum lease commitments, as of inception of the lease, relating to noncancelable operating leases at December 31, 2017 are as follows(in thousands):Year ending December 31, (1)2018$10,735201910,743202010,705202110,691202210,679Thereafter546,433Total$599,986 (1) The above table excludes contingent rent in accordance with ASC 840.83Table of ContentsEmployee Benefit PlansThe Company maintains a defined contribution plan under the provisions of Section 401(k) of the Internal Revenue Code of 1986, as amended,which covers all eligible employees. The plan enables participating employees to defer a portion of their salary and/or their annual bonus in a retirement fundto be administered by the Company. The Company makes a discretionary match contribution of 50% of employees' elective salary deferrals, up to amaximum of 6% of eligible employee compensation. The matching contributions for the defined contribution plan were $0.3 million for each of the yearsended December 31, 2017, 2016 and 2015.The Company maintains a non-qualified deferred compensation plan that covers most management and other highly-compensated employees. Theplan allows the participants to defer, on a pre-tax basis, a portion of their base annual salary and/or their annual bonus, and earn tax-deferred earnings onthese deferrals. The plan also provides for matching Company contributions that vest over a five-year period. The Company has established a Trust, andtransfers to the Trust, on a periodic basis, an amount necessary to provide for its respective future liabilities with respect to participant deferral and Companycontribution amounts. The Company's matching contributions for the non-qualified deferred compensation plan for the years ended December 31, 2017,2016 and 2015 were $0.6 million, $0.7 million and $0.5 million, respectively. The Company's deferred compensation liability, which was included in otherliabilities within the consolidated balance sheet, was $22.7 million and $17.7 million at December 31, 2017 and 2016, respectively and primarily relates tobalances contributed as part of the Spin-Off as related to the Company's executive officers that were previously employed by Penn. Assets held in the Trustwere $22.6 million and $17.6 million at December 31, 2017 and 2016, respectively, and are included in other assets within the consolidated balance sheet.Labor AgreementsSome of Hollywood Casino Perryville's employees are currently represented by labor unions. The Seafarers Entertainment and Allied Trade Unionrepresents 161 of Hollywood Casino Perryville's employees under an agreement that expires in February 2020. Additionally, Local No. 27 United Food andCommercial Workers and United Industrial Service Transportation Professional and Government Workers of North America represent certain employeesunder collective bargaining agreements that expire in 2020, neither of which represents more than 50 of Hollywood Casino Perryville's employees. If theCompany fails to renew or modify existing agreements on satisfactory terms, this failure could have a material adverse effect on Hollywood CasinoPerryville's business, financial condition and results of operations. There can be no assurance that Hollywood Casino Perryville will be able to maintain theseagreements.11. Revenue RecognitionAs of December 31, 2017, 20 of the Company’s real estate investment properties were leased to a subsidiary of Penn under the Penn Master Leaseand 14 of the Company's real estate investment properties were leased to a subsidiary of Pinnacle under the Pinnacle Master Lease. The obligations under thePenn and Pinnacle Master Leases are guaranteed by Penn and Pinnacle, respectively and by most of Penn and Pinnacle subsidiaries that occupy and operatethe facilities leased under the Master Leases. A default by Penn or its subsidiaries with regard to any facility will cause a default with regard to the PennMaster Lease and a default by Pinnacle or its subsidiaries with regard to any facility will cause a default with regard to the Pinnacle Master Lease.Additionally, the Meadows real estate assets are leased to Pinnacle under a single property triple-net lease separate from the Pinnacle Master Lease. GLPI alsoleases the Casino Queen property back to its operator on a triple-net basis on terms similar to those in the Master Leases.The rent structure under the Penn Master Lease includes a fixed component, a portion of which is subject to an annual 2% escalator if certain rentcoverage ratio thresholds are met, and a component that is based on the performance of the facilities, which is adjusted, subject to certain floors (i) every fiveyears to an amount equal to 4% of the average net revenues of all facilities under the Penn Master Lease (other than Hollywood Casino Columbus andHollywood Casino Toledo) during the preceding five years, and (ii) monthly by an amount equal to 20% of the net revenues of Hollywood Casino Columbusand Hollywood Casino Toledo during the preceding month.Similar to the Penn Master Lease, the Pinnacle Master Lease also includes a fixed component, a portion of which is subject to an annual 2%escalator if certain rent coverage ratio thresholds are met and a component that is based on the performance of the facilities, which is adjusted, subject tocertain floors every two years to an amount equal to 4% of the average annual net revenues of all facilities under the Pinnacle Master Lease during thepreceding two years. The Meadows Lease contains a fixed component, subject to annual escalators, and a component that is based on the performance of the facility,which is reset every two years to a fixed amount determined by multiplying (i) 4% by (ii) the average annual net revenues of the facility for the trailing twoyear period. The Meadows Lease contains an annual escalator84Table of Contentsprovision for up to 5% of the base rent, if certain rent coverage ratio thresholds are met, which remains at 5% until the earlier of ten years or the year in whichtotal rent is $31.0 million, at which point the escalator will be reduced to 2% annually thereafter.The rent structure under the Casino Queen Lease also includes a fixed component, a portion of which is subject to an annual 2% escalator if certainrent coverage ratio thresholds are met, and a component that is based on the performance of the facility, which is reset every five years to a fixed amountequal to the greater of (i) the annual amount of non-fixed rent applicable for the lease year immediately preceding such rent reset year and (ii) an amountequal to 4% of the average annual net revenues of the facility for the trailing five year period.In addition to rent, as triple-net lessees, all of the Company's tenants are required to pay the following executory costs: (1) all facility maintenance,(2) all insurance required in connection with the leased properties and the business conducted on the leased properties, including coverage of the landlord'sinterests, (3) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor) and (4) all utilities and other servicesnecessary or appropriate for the leased properties and the business conducted on the leased properties.The Company determined, based on facts and circumstances prevailing at the time of each lease's inception, that neither Penn, Casino Queen orPinnacle could continue as a going concern without the properties that are leased to it under the respective master lease agreements (in the instance of Pennand Pinnacle) and single property lease (in the instance of Casino Queen) with GLPI. At lease inception, all of Casino Queen's revenues and substantially allof Penn and Pinnacle's revenues were generated from operations in connection with the leased properties. There are also various legal restrictions in thejurisdictions in which Penn, Casino Queen and Pinnacle operate that limit the availability and location of gaming facilities, which makes relocation orreplacement of the leased gaming facilities restrictive and potentially impracticable or unavailable. Moreover, under the terms of the master leases, Penn andPinnacle must make renewal elections with respect to all of the leased property together; the tenant is not entitled to selectively renew certain of the leasedproperty while not renewing other property. Accordingly, the Company concluded that failure by Penn, Casino Queen or Pinnacle to renew the lease wouldimpose a significant penalty on such tenant such that renewal of all lease renewal options appears at lease inception to be reasonably assured. Therefore, theCompany concluded that the term of the leases with both Penn and Casino Queen is 35 years, equal to the initial 15-year term plus all four of the 5-yearrenewal options. The lease term of the Pinnacle Master Lease is also 35 years, equal to the initial 10-year term plus all five of the 5-year renewal options.As described in Note 4, subsequent to purchasing the majority of Pinnacle's real estate assets and leasing them back to Pinnacle, GLPI entered into aseparate triple-net lease with Pinnacle to lease the Meadows real estate assets to Pinnacle. Because this lease involves only a single property within Pinnacle'sportfolio, GLPI concluded it was not reasonably assured at lease inception that Pinnacle would elect to exercise all lease renewal options. The Companyconcluded that failure by Pinnacle to renew the Meadows Lease would not impose a significant penalty on such tenant as this property's operations representonly an incremental portion of Pinnacle's total business at lease inception. Therefore, the Company concluded that the lease term of the Meadows Lease is 10years, equal to the initial 10 year term only.As of December 31, 2017, the future minimum rental income from the Company's properties under non-cancelable operating leases, including anyreasonably assured rental periods, was as follows (in thousands):Year ending December 31,Future RentalPaymentsReceivable Straight-Line RentAdjustments Future Income to beRecognized Related toOperating Leases2018$683,054 $(51,866) $631,1882019632,578 11,215 643,7932020632,578 11,215 643,7932021632,578 11,215 643,7932022632,578 11,215 643,793Thereafter16,641,083 239,029 16,880,112Total$19,854,449 $232,023 $20,086,472For the years ended December 31, 2017, 2016 and 2015, GLPI recognized $46.8 million, $43.8 million and $43.5 million, respectively, incontingent rental income from Hollywood Casino Columbus and Hollywood Casino Toledo related to clause (ii) in the paragraph above. The expected futureminimum rental income from these properties, as well as the portion of the expected future rent based on the performance of the Company's leased facilitiesthat will reset after a certain passage of85Table of Contentstime as detailed above are excluded from the table above as they are considered contingent rental income under ASC 840 "Leases." Furthermore, during theyears ended December 31, 2017, 2016 and 2015 the Company recognized $17.5 million, $9.1 million and $4.0 million, respectively of rental income relatedto the annual rent escalators described above. Any anticipated future rent escalations are also excluded from the table above.As of December 31, 2017, the expected future cash receipts to be recognized as income, as well as the cash receipts to be applied against theinvestment in direct financing lease from the Company's properties under the non-cancelable direct financing lease, inclusive of the fixed portion of groundlease rent and including any reasonably assured rental periods, is as follows (in thousands):Year ending December 31,Cash Receipts to beRecorded as Income Cash Receipts to beApplied Against theInvestment in DirectFinancing Lease2018$72,283 $45,244201970,497 32,881202068,831 34,546202167,166 36,212202265,500 37,878Thereafter1,163,686 1,761,067Total$1,507,963 $1,947,828The portion of the ground lease rent that is fixed and determinable is included in the schedule above as future income, while the portion of theground lease rent that is variable, as well as, the property taxes the Company's records as revenue are excluded from future minimum revenue as the amountsare not fixed and determinable at December 31, 2017. Furthermore, any contingent rent the Company expects to receive from tenants is excluded from theabove schedules as it is not fixed and determinable at December 31, 2017.Gaming revenue generated by the TRS Properties mainly consists of video lottery gaming revenue, and to a lesser extent, table game and pokerrevenue. Video lottery gaming revenue is the aggregate net difference between gaming wins and losses with liabilities recognized for funds deposited bycustomers before gaming play occurs, for "ticket-in, ticket-out" coupons in the customers’ possession, and for accruals related to the anticipated payout ofprogressive jackpots. Progressive slot machines, which contain base jackpots that increase at a progressive rate based on the number of coins played, arecharged to revenue as the amount of the jackpots increases. Table game gaming revenue is the aggregate of table drop adjusted for the change in aggregatetable chip inventory. Table drop is the total dollar amount of the currency, coins, chips, tokens, outstanding counter checks (markers), and front money thatare removed from the live gaming tables. Additionally, food and beverage revenue is recognized as services are performed. Gaming revenue is recognized net of certain sales incentives in accordance with ASC 605-50, "Revenue Recognition— Customer Payments andIncentives." The Company records certain sales incentives and points earned in point-loyalty programs as a reduction of revenue. See Note 2 for a summary ofanticipated changes to the recognition of revenue at the TRS Properties upon the adoption of ASU 2014-09 on January 1, 2018.The following table discloses the components of gaming, food, beverage and other revenue within the consolidated statements of income for theyears ended December 31, 2017, 2016 and 2015: Year Ended December 31,2017 2016 2015(in thousands)Video lottery$118,998 $119,390 $122,292Table game17,218 18,069 18,799Poker1,182 1,135 1,219Food, beverage and other9,468 11,067 11,213Total gaming, food, beverage and other revenue, net of cash incentives$146,866 $149,661 $153,523 The retail value of food and beverage and other services furnished to guests without charge is included in gross revenues and then deducted aspromotional allowances.86Table of Contents12. Income TaxesThe Company elected on its U.S. federal income tax return for its taxable year that began on January 1, 2014 to be treated as a REIT. The benefits ofthe intended REIT conversion on the Company's tax provision and effective income tax rate are reflected in the tables below. Deferred tax assets andliabilities are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidatedbalance sheets. These temporary differences result in taxable or deductible amounts in future years. As a result of the Tax Cuts and Job Act, the corporate taxrate was permanently lowered from the existing maximum rate of 35% to 21%, effective for tax years including or commencing January 1, 2018. As a result ofthe reduction of the corporate tax rate, U.S. generally accepted accounting principles require companies to re-value their deferred tax assets and liabilities asof the date of the enactment, with resulting tax effects accounted for in the reported period of enactment. As such, the Company revalued its net deferred taxasset at December 31, 2017. This revaluation resulted in a reduction in the value of its net deferred tax asset of approximately $1.8 million, which wasrecorded as additional income tax expense in the Company’s consolidated statement of income for the year ended December 31, 2017.The components of the Company's deferred tax assets and liabilities, related to its TRS, are as follows:Year ended December 31,2017 2016 (in thousands)Deferred tax assets: Accrued expenses$1,597 $1,655Property and equipment4,823 5,818Net deferred tax assets6,420 7,473Deferred tax liabilities: Property and equipment(902) (2,192)Intangibles(1,284) (1,624)Net deferred tax liabilities(2,186) (3,816)Net:$4,234 $3,657The provision for income taxes charged to operations for years ended December 31, 2017, 2016 and 2015 was as follows:Year ended December 31,201720162015 (in thousands)Current tax expense Federal$7,039 $6,004 $4,945State3,309 3,076 3,310Total current10,348 9,080 8,255Deferred tax (benefit) expense Federal(166) (1,324) (533)State(395) (211) (280)Total deferred(561) (1,535) (813)Total provision$9,787 $7,545 $7,44287Table of ContentsThe following tables reconcile the statutory federal income tax rate to the actual effective income tax rate for the years ended December 31, 2017,2016 and 2015:Year ended December 31,201720162015Percent of pretax income U.S. federal statutory income tax rate35.0 % 35.0 % 35.0 %State and local income taxes0.6 % 0.7 % 1.3 %Federal tax rate change0.5 % — % — %REIT conversion benefit(33.6)% (33.2)% (31.3)%Other miscellaneous items— % — % 0.5 %2.5 % 2.5 % 5.5 % Year ended December 31,2017 2016 2015 (in thousands)Amount based upon pretax income U.S. federal statutory income tax$136,636 $103,897 $47,447State and local income taxes2,284 2,039 1,702Federal tax rate change1,818 — —REIT conversion benefit(130,876) (98,459) (42,438)Permanent differences49 44 61Other miscellaneous items(124) 24 670 $9,787 $7,545 $7,442The Company is still subject to federal income tax examinations for its years ended December 31, 2014 and forward.13. Shareholders' EquityCommon StockATM ProgramDuring August 2016, the Company commenced a continuous equity offering under which the Company may sell up to an aggregate of $400 millionof its common stock from time to time through a sales agent in "at the market" offerings (the "ATM Program"). Actual sales will depend on a variety of factors,including market conditions, the trading price of the Company's common stock and determinations of the appropriate sources of funding for proposedtransactions. The Company may sell the shares in amounts and at times to be determined by the Company, but has no obligation to sell any of the shares inthe ATM Program. The ATM Program also allows the Company to enter into forward sale agreements. In no event will the aggregate number of shares soldunder the ATM Program (whether under any forward sale agreement or through a sales agent), have an aggregate sales price in excess of $400 million. TheCompany expects, that if it enters into a forward sale contract, to physically settle each forward sale agreement with the forward purchaser on one or moredates specified by the Company prior to the maturity date of that particular forward sale agreement, in which case the aggregate net cash proceeds atsettlement will equal the number of shares underlying the particular forward sale agreement multiplied by the relevant forward sale price. However, theCompany may also elect to cash settle or net share settle a particular forward sale agreement, in which case proceeds may or may not be received or cash maybe owed to the forward purchaser.In connection with the ATM Program, the Company engaged a sales agent who may receive compensation of up to 2% of the gross sales price of theshares sold. Similarly, in the event the Company enters into a forward sale agreement, it will pay the relevant forward seller a commission of up to 2% of thesales price of all borrowed shares of common stock sold during the applicable selling period of the forward sale agreement.During the year ended December 31, 2017, GLPI sold 3,864,872 shares of its common stock at an average price of $36.22 per share under the ATMProgram, which generated gross proceeds of approximately $140.0 million (net proceeds of approximately $139.4 million). Program to date, the Companyhas sold 5,186,871 shares of its common stock at an average88Table of Contentsprice of $35.91 per share under the ATM Program and generated gross proceeds of approximately $186.3 million (net proceeds of approximately $185.0million). The Company used the net proceeds from the ATM Program to partially fund its acquisition of the Meadows' and Tunica real estate assets. As ofDecember 31, 2017, the Company had $213.7 million remaining for issuance under the ATM Program and had not entered into any forward sale agreements.Stock Issued in Connection with Pinnacle TransactionOn April 6, 2016, the Company closed a public offering of 28,750,000 shares of its common stock, at a public offering price of $30.00 per share,before underwriting discount, which included 3,750,000 shares of common stock issued in connection with the exercise in full of the underwriters’ option topurchase additional shares.The Company received approximately $825.2 million in net proceeds from the offering and used the net proceeds from the offering to partially fundits acquisition of substantially all of the real estate assets of Pinnacle, including the repayment, redemption and/or discharge of a portion of certain debt ofPinnacle assumed by the Company in connection with the Pinnacle Merger and the payment of transaction-related fees and expenses.Additionally, on April 28, 2016, in connection with the Pinnacle Merger, the Company issued approximately 56.0 million shares of its commonstock to Pinnacle stockholders and to Pinnacle to satisfy the Company's portion of Pinnacle's employee equity and cash-based incentive awards asconsideration for the Pinnacle real estate assets.The following table lists the regular dividends declared and paid by the Company during the years ended December 31, 2017, 2016 and 2015:Declaration Date Shareholder Record Date SecuritiesClass Dividend PerShare Period Covered Distribution Date Dividend Amount (in thousands)2017 February 1, 2017 March 13, 2017 CommonStock $0.62 First Quarter 2017 March 24, 2017 $129,007April 25, 2017 June 16, 2017 CommonStock $0.62 Second Quarter 2017 June 30, 2017 $131,554July 25, 2017 September 8, 2017 CommonStock $0.63 Third Quarter 2017 September 22, 2017 $133,936October 19, 2017 December 1, 2017 CommonStock $0.63 Fourth Quarter 2017 December 15, 2017 $133,9422016 January 29, 2016 February 22, 2016 CommonStock $0.56 First Quarter 2016 March 25, 2016 $65,345April 25, 2016 June 2, 2016 CommonStock $0.56 Second Quarter 2016 June 17, 2016 $113,212August 3, 2016 September 12, 2016 CommonStock $0.60 Third Quarter 2016 September 23, 2016 $124,262November 4, 2016 December 5, 2016 CommonStock $0.60 Fourth Quarter 2016 December 16, 2016 $124,4662015 February 3, 2015 March 10, 2015 CommonStock $0.545 First Quarter 2015 March 27, 2015 $62,072May 1, 2015 June 11, 2015 CommonStock $0.545 Second Quarter 2015 June 26, 2015 $62,348July 30, 2015 September 14, 2015 CommonStock $0.545 Third Quarter 2015 September 25, 2015 $62,456October 28, 2015 December 1, 2015 CommonStock $0.545 Fourth Quarter 2015 December 18, 2015 $62,814In addition for the years ended December 31, 2017, 2016 and 2015, dividend payments were made to or accrued for GLPI restricted stock awardholders and for both GLPI and Penn unvested employee stock options in the amount of $0.9 million, $1.1 million and $2.0 million, respectively.89Table of ContentsA summary of the Company's common stock distributions for the years ended December 31, 2017, 2016 and 2015 is as follows (unaudited): Year Ended December 31, 2017 2016 2015 (in dollars per share)Qualified dividends$0.0543 $0.1050 $0.0698Non-qualified dividends2.2436 2.0746 1.9462Capital gains0.0371 0.0624 0.0012Non-taxable return of capital0.1650 0.0780 0.1628Total distributions per common share$2.50 $2.32 $2.18 Percentage classified as qualified dividends2.17% 4.53% 3.21%Percentage classified as non-qualified dividends89.75% 89.42% 89.45%Percentage classified as capital gains1.48% 2.69% —%Percentage classified as non-taxable return of capital6.60% 3.36% 7.34% 100.00% 100.00% 100.00%14. Stock-Based CompensationAs of December 31, 2017, the Company had 2,755,796 shares available for future issuance under the 2013 Long Term Incentive Compensation Plan(the "2013 Plan") that was approved by shareholders on October 23, 2013. The 2013 Plan provides for the Company to issue restricted stock awards,including performance-based restricted stock awards and other equity or cash based awards to employees. Any director, employee or consultant shall beeligible to receive such awards.In connection with the Spin-Off, each outstanding option with respect to Penn common stock outstanding on the distribution date was convertedinto two awards, an adjusted Penn option and a GLPI option. The adjustment preserved the aggregate intrinsic value of the options. Additionally, inconnection with the Spin-Off, holders of outstanding restricted stock and phantom stock units ("PSUs") with respect to Penn common stock became entitledto an additional share of restricted stock or PSU with respect to GLPI common stock for each share of Penn restricted stock or PSU held. These awards are notcounted against the 2013 Plan limit mentioned above.The adjusted options, as well as the restricted stock awards and PSUs, otherwise remain subject to their original terms, except that for purposes of theadjusted Penn awards (including in determining exercisability and the post-termination exercise period), continued service with GLPI following thedistribution date shall be deemed continued service with Penn; and for purposes of the GLPI awards (including in determining exercisability and the post-termination exercise period), continued service with Penn following the distribution date shall be deemed continued service with GLPI.The unrecognized compensation cost relating to restricted stock awards and performance-based restricted stock awards will be amortized to expenseover the awards’ remaining vesting periods.As of December 31, 2017, there was no remaining unrecognized compensation cost related to stock options. For the years ended December 31, 2016and 2015, the Company recognized $20 thousand and $2.8 million, respectively of compensation expense associated with these awards. In addition, for theyears ended December 31, 2016 and 2015 the Company also recognized $4.5 million and $11.3 million, respectively, of compensation expense relating tothe $2.32 and $2.18, respectively, per share dividends paid on vested employee stock options.90Table of ContentsThe following tables contain information on stock options issued and outstanding for the year ended December 31, 2017 : Number ofOption Shares Weighted-AverageExercisePrice Weighted-AverageRemainingContractualTerm (in years) AggregateIntrinsic Value(in thousands)Outstanding at December 31, 2016 2,056,382 $20.25 Exercised (1,013,984) 20.71 Canceled (1,653) 24.15 Outstanding at December 31, 2017 1,040,745 $19.80 0.77 $17,902 The Company had 1,040,745 stock options that were exercisable at December 31, 2017 with an exercise price range from $17.33 to $26.45 and aweighted average exercise price of $19.80 which had an intrinsic value of $17.9 million and a weighted-average remaining contractual term of 0.77 years.The aggregate intrinsic value of stock options exercised for the years ended December 31, 2017, 2016 and 2015 was $14.9 million, $75.0 million and $47.8million, respectively. The Company issues new authorized common shares to satisfy stock option exercises and restricted stock award releases.As of December 31, 2017, there was $5.4 million of total unrecognized compensation cost for restricted stock awards that will be recognized over thegrants' remaining weighted average vesting period of 1.75 years. For the years ended December 31, 2017, 2016 and 2015, the Company recognized $6.0million, $7.3 million and $5.9 million, respectively, of compensation expense associated with these awards. The total fair value of awards released for theyears ended December 31, 2017, 2016 and 2015, was $7.3 million, $5.3 million and $4.5 million, respectively.The following table contains information on restricted stock award activity for the years ended December 31, 2017 and 2016: Number ofAwardShares Weighted AverageGrant-Date FairValueOutstanding at December 31, 2015463,764 $32.76Granted168,966 $27.80Released(204,596) $33.21Canceled(14,892) $30.51December 31, 2016413,242 $30.59Granted184,791 $30.89Released(251,313) $32.05Canceled(1,976) $30.37Outstanding at December 31, 2017344,744 $29.69Performance-based restricted stock awards have a three-year cliff vesting with the amount of restricted shares vesting at the end of the three-yearperiod determined based upon the Company’s performance as measured against its peers. More specifically, the percentage of shares vesting at the end of themeasurement period will be based on the Company’s three-year total shareholder return measured against the three-year return of the companies included inthe MSCI US REIT index and the Company's stock performance ranking among a group of triple-net REIT peer companies. The triple-net measurement groupincludes publicly traded REITs deriving at least 75% of revenues from triple-net leases. As of December 31, 2017, there was $9.9 million of totalunrecognized compensation cost, which will be recognized over the awards' remaining weighted average vesting period of 1.68 years. For the years endedDecember 31, 2017, 2016 and 2015, the Company recognized $9.7 million, $11.0 million and $8.1 million, respectively, of compensation expenseassociated with these awards.91Table of ContentsThe following table contains information on performance-based restricted stock award activity for the years ended December 31, 2017 and 2016: Number of Performance-Based Award Shares Weighted AverageGrant-Date FairValueOutstanding at December 31, 20151,091,556 $20.10Granted558,000 $17.22Released— $—Canceled (1)(543,556) $22.93December 31, 20161,106,000 $17.25Granted558,000 $17.95Released— $—Canceled— $—Outstanding at December 31, 20171,664,000 $17.49(1) The performance-based restricted stock awards granted in 2014 did not vest as the Company's performance was below the threshold for vesting.92Table of Contents15. Segment Information The following tables present certain information with respect to the Company’s segments. Intersegment revenues between the Company’s segmentswere not material in any of the periods presented below. GLP Capital TRS Properties Eliminations (1) Total (in thousands)For the year ended December 31, 2017 Net revenues $829,221 $142,086 $— $971,307Income from operations 578,661 26,857 — 605,518Interest, net 215,136 10,403 (10,406) 215,133Income before income taxes 373,931 16,454 — 390,385Income tax expense 1,099 8,688 — 9,787Net income 372,832 7,766 — 380,598Depreciation 102,652 10,828 — 113,480Capital project expenditures 78 — — 78Capital maintenance expenditures — 3,178 — 3,178 For the year ended December 31, 2016 Net revenues $684,204 $144,051 $— $828,255Income from operations 454,682 25,941 — 480,623Interest, net 183,777 10,402 (10,406) 183,773Income before income taxes 281,311 15,539 — 296,850Income tax expense 1,016 6,529 — 7,545Net income 280,295 9,010 — 289,305Depreciation 98,171 11,383 — 109,554Capital project expenditures 229 101 — 330Capital maintenance expenditures — 3,111 — 3,111 For the year ended December 31, 2015 Net revenues $427,125 $147,928 $— $575,053Income from operations 232,701 24,714 — 257,415Interest, net 121,855 10,402 (10,406) 121,851Income before income taxes 121,252 14,312 — 135,564Income tax expense 1,338 6,104 — 7,442Net income 119,914 8,208 — 128,122Depreciation 97,424 12,359 — 109,783Capital project expenditures 10,252 5,897 — 16,149Capital maintenance expenditures — 2,953 — 2,953 Balance sheet at December 31, 2017 Total assets $7,045,747 $201,135 $— $7,246,882 Balance sheet at December 31, 2016 Total assets $7,156,501 $212,829 $— $7,369,330 (1) Amounts in the "Eliminations" column represent the elimination of intercompany interest payments from the Company’s TRS Properties businesssegment to its GLP Capital business segment.93Table of Contents16. Summarized Quarterly Data (Unaudited)The following table summarizes the quarterly results of operations for the years ended December 31, 2017 and 2016: Fiscal Quarter First Second Third Fourth (in thousands, except per share data) 2017 Net revenues$242,713 $243,391 $244,506 $240,697 Income from operations150,006 152,696 152,699 150,117 Net income93,991 96,334 97,014 93,259 Earnings per common share: Basic earnings per common share$0.45 $0.46 $0.46 $0.44 Diluted earnings per common share$0.45 $0.45 $0.45 $0.43 2016 Net revenues$148,820 $207,361 $233,275 $238,799(1) Income from operations67,637 120,817 143,306 148,863(1) Net income32,749 73,264 89,600 93,692(1) Earnings per common share: Basic earnings per common share$0.28 $0.40 $0.43 $0.45 Diluted earnings per common share$0.27 $0.39 $0.43 $0.45 (1) During April 2016, the Company acquired substantially all of the real estate assets of Pinnacle and subsequently leased these assets back to Pinnacleunder a triple-net master lease, which significantly increased the Company's net revenues, income from operations and net income. The acquisitionof the Meadows' real property assets in September 2016 also contributed to the Company's improved operating results in the fourth quarter of 2016as compared to the third quarter of 2016. See Note 4 for further details surrounding the Pinnacle and Meadows acquisitions.17. Supplemental Disclosures of Cash Flow Information and Noncash ActivitiesSupplemental disclosures of cash flow information are as follows:Year ended December 31,2017 2016 2015 (in thousands)Cash paid for income taxes, net of refunds received11,646 7,362 9,785Cash paid for interest204,442 154,527 109,966Noncash investing and financing activities are as follows:Year ended December 31,2017 2016 2015 (in thousands)Equity raised to partially finance the Pinnacle transaction$— $1,823,991 $—94Table of Contents18. Related Party TransactionsDuring the year ended December 31, 2014, the Company entered into an Agreement of Sale (the "Sale Agreement") with Wyomissing ProfessionalCenter Inc. ("WPC") and acquired certain land in an office complex known as The Wyomissing Professional Center Campus, located in Wyomissing,Pennsylvania (on which to build its corporate headquarters), in exchange for the payment of $725,000 in cash to WPC, plus taxes and closing costs. Inaddition, the Company reimbursed WPC approximately $270,000 for site work and pre-development costs previously completed per the Sale Agreement.Also in connection with the completion of construction of its corporate headquarters building, the Company entered into an agreement (the "ConstructionManagement Agreement") with CB Consulting Group LLC (the "Construction Manager") during the year ended December 31, 2014. Construction of theCompany's corporate headquarters building was completed in October 2015 and the Company did not incur additional costs related to the building withWPC or the Construction Manager subsequent to 2015.The Company paid approximately $433,000 and $244,000, respectively, to WPC during the years ended December 31, 2015 and 2014 inconnection with construction costs paid by WPC on the Company's behalf. Pursuant to the Construction Management Agreement, the Construction Manager,among other things, provided certain construction management services to the Company in exchange for three percent (3%) of the total cost of work tocomplete the building construction project, and certain additional costs for added services. During the years ended December 31, 2015 and 2014, theCompany paid approximately $175,000 and $59,000, respectively, to the Construction Manager.Upon completion of the building in October 2015, the Company became responsible for the payment of monthly common area maintenance fees tothe Wyomissing Professional Center Owners' Association ("WPCOA"). During the years ended December 31, 2017, 2016 and 2015, the Company paidapproximately $35,000, $30,000 and $10,000 to the WPCOA, respectively.Peter M. Carlino, the Company’s Chairman of the Board of Directors and Chief Executive Officer, is also the sole owner of WPC and associated withthe WPCOA. In addition, Mr. Carlino’s son owns a material interest in the Construction Manager.19. Supplementary Consolidating Financial Information of Parent Guarantor and Subsidiary Issuers GLPI guarantees the Notes issued by its subsidiaries, GLP Capital, L.P. and GLP Financing II, Inc. Each of the subsidiary issuers is 100% owned byGLPI. The guarantees of GLPI are full and unconditional. GLPI is not subject to any material or significant restrictions on its ability to obtain funds from itssubsidiaries by dividend or loan or to transfer assets from such subsidiaries, except as provided by applicable law. None of GLPI's subsidiaries guarantee theNotes. Summarized balance sheet information as of December 31, 2017 and 2016 and summarized income statement and cash flow information for the yearsended December 31, 2017, 2016 and 2015 for GLPI as the parent guarantor, for GLP Capital, L.P. and GLP Financing II, Inc. as the subsidiary issuers and theother subsidiary non-issuers is presented below.95Table of ContentsAt December 31, 2017Consolidating Balance Sheet Parent Guarantor Subsidiary Issuers Other Subsidiary Non-Issuers Eliminations Consolidated (in thousands)Assets Real estate investments, net $— $1,794,840 $1,867,205 $— $3,662,045Land rights, net — 58,635 581,513 — 640,148Property and equipment, used in operations, net — 20,568 87,725 — 108,293Investment in direct financing lease, net — — 2,637,639 — 2,637,639Cash and cash equivalents — 6,734 22,320 — 29,054Prepaid expenses — 4,067 2,746 1,639 8,452Goodwill — — 75,521 — 75,521Other intangible assets — — 9,577 — 9,577Loan receivable — — 13,000 — 13,000Intercompany loan receivable — 193,595 — (193,595) —Intercompany transactions and investment in subsidiaries 2,458,247 5,087,893 2,959,174 (10,505,314) —Deferred tax assets — 4,478 — 4,478Other assets — 42,485 16,190 — 58,675Total assets $2,458,247 $7,208,817 $8,277,088 $(10,697,270) $7,246,882 Liabilities Accounts payable $— $619 $96 $— $715Accrued expenses — 672 7,241 — 7,913Accrued interest — 33,241 — — 33,241Accrued salaries and wages — 7,832 2,977 — 10,809Gaming, property, and other taxes — 21,135 14,264 — 35,399Income taxes — (306) (1,333) 1,639 —Long-term debt, net of unamortized debt issuance costs — 4,442,880 — — 4,442,880Intercompany loan payable — — 193,595 (193,595) —Deferred rental revenue — 220,019 12,004 — 232,023Deferred tax liabilities — — 244 — 244Other liabilities — 24,478 933 — 25,411Total liabilities — 4,750,570 230,021 (191,956) 4,788,635 Shareholders’ equity (deficit) Preferred stock ($.01 par value, 50,000,000 shares authorized,no shares issued or outstanding at December 31, 2017) — — — — —Common stock ($.01 par value, 500,000,000 shares authorized,212,717,549 shares issued at December 31, 2017) 2,127 2,127 2,127 (4,254) 2,127Additional paid-in capital 3,933,829 3,933,831 9,498,755 (13,432,586) 3,933,829Retained accumulated (deficit) earnings (1,477,709) (1,477,711) (1,453,815) 2,931,526 (1,477,709)Total shareholders’ equity (deficit) 2,458,247 2,458,247 8,047,067 (10,505,314) 2,458,247Total liabilities and shareholders’ equity (deficit) $2,458,247 $7,208,817 $8,277,088 $(10,697,270) $7,246,88296Table of ContentsYear ended December 31, 2017Consolidating Statement of Income Parent Guarantor Subsidiary Issuers Other Subsidiary Non-Issuers Eliminations Consolidated (in thousands)Revenues Rental income $— $398,070 $273,120 $— $671,190Income from direct financing lease — — 74,333 — 74,333Real estate taxes paid by tenants — 43,672 40,026 — 83,698Total rental revenue and income from direct financing lease — 441,742 387,479 — 829,221Gaming, food, beverage and other — — 146,866 — 146,866Total revenues — 441,742 534,345 — 976,087Less promotional allowances — — (4,780) — (4,780)Net revenues — 441,742 529,565 — 971,307Operating expenses Gaming, food, beverage and other — — 80,487 — 80,487Real estate taxes — 43,755 40,911 — 84,666Land rights and ground lease expense — 5,895 18,110 — 24,005General and administrative — 39,863 23,288 — 63,151Depreciation — 93,948 19,532 — 113,480Total operating expenses — 183,461 182,328 — 365,789Income from operations — 258,281 347,237 — 605,518 Other income (expenses) Interest expense — (217,068) — — (217,068)Interest income — — 1,935 — 1,935Intercompany dividends and interest — 451,295 12,318 (463,613) —Total other expenses — 234,227 14,253 (463,613) (215,133) Income before income taxes — 492,508 361,490 (463,613) 390,385Income tax expense — 1,099 8,688 — 9,787Net income $— $491,409 $352,802 $(463,613) $380,59897Table of ContentsYear ended December 31, 2017Consolidating Statement of Cash Flows ParentGuarantor SubsidiaryIssuers OtherSubsidiaryNon-Issuers Eliminations Consolidated (in thousands)Operating activities Net income $— $491,409 $352,802 $(463,613) $380,598Adjustments to reconcile net income to net cash provided by(used in) operating activities: Depreciation and amortization — 95,058 28,777 — 123,835Amortization of debt issuance costs — 13,026 — — 13,026Losses on dispositions of property — — 530 — 530Deferred income taxes — — (561) — (561)Stock-based compensation — 15,636 — — 15,636Straight-line rent adjustments — 56,815 9,156 — 65,971 (Increase) decrease, Prepaid expenses and other assets — (5,703) 1,268 (897) (5,332)Intercompany — 317 (317) — —(Decrease) increase, Accounts payable — 148 (569) — (421)Accrued expenses — 103 308 — 411Accrued interest — (502) — — (502)Accrued salaries and wages — (79) 269 — 190Gaming, property and other taxes — (505) (12) — (517)Income taxes — (325) (572) 897 —Other liabilities — 6,591 (744) — 5,847Net cash provided by (used in) operating activities — 671,989 390,335 (463,613) 598,711Investing activities Capital project expenditures — (78) — — (78)Capital maintenance expenditures — — (3,178) — (3,178)Proceeds from sale of property and equipment — 10 924 — 934Principal payments on loan receivable — — 13,200 — 13,200Acquisition of real estate assets — (82,866) (386) — (83,252)Collection of principal payments on investment in directfinancing lease — — 73,072 — 73,072Net cash provided by (used in) investing activities — (82,934) 83,632 — 698Financing activities Dividends paid (529,370) — — — (529,370)Proceeds from exercise of options, net of taxes paid related toshares withheld for tax purposes on restricted stock awardvestings 18,157 — — — 18,157Proceeds from issuance of common stock, net of issuance costs 139,414 — — — 139,414Proceeds from issuance of long-term debt — 100,000 — — 100,000Financing costs — — — — —Payments of long-term debt — (335,112) — (335,112)Intercompany financing 371,799 (358,983) (476,429) 463,613 —Net cash (used in) provided by financing activities — (594,095) (476,429) 463,613 (606,911)Net increase (decrease) in cash and cash equivalents — (5,040) (2,462) — (7,502)Cash and cash equivalents at beginning of period — 11,774 24,782 — 36,556Cash and cash equivalents at end of period $— $6,734 $22,320 $— $29,05498Table of ContentsAt December 31, 2016 Consolidating Balance Sheet ParentGuarantor SubsidiaryIssuers OtherSubsidiaryNon-Issuers Eliminations Consolidated (in thousands)Assets Real estate investments, net $— $1,863,568 $1,875,523 $— $3,739,091Land rights, net — — 590,758 — 590,758Property and equipment, used in operations, net — 22,598 96,829 — 119,427Investment in direct financing lease, net — — 2,710,711 — 2,710,711Cash and cash equivalents — 11,774 24,782 — 36,556Prepaid expenses — 3,106 3,629 742 7,477Goodwill — — 75,521 — 75,521Other intangible assets — — 9,577 — 9,577Loan receivable — — 26,200 — 26,200Intercompany loan receivable — 193,595 — (193,595) —Intercompany transactions and investment in subsidiaries 2,433,869 5,211,835 2,947,915 (10,593,619) —Deferred tax assets — — 3,922 — 3,922Other assets — 37,335 12,755 — 50,090Total assets $2,433,869 $7,343,811 $8,378,122 $(10,786,472) $7,369,330 Liabilities Accounts payable $— $413 $666 $— $1,079Accrued expenses — 434 6,156 — 6,590Accrued interest — 33,743 — — 33,743Accrued salaries and wages — 7,911 2,708 — 10,619Gaming, property, and other taxes — 21,364 11,220 — 32,584Income taxes — 18 (760) 742 —Long-term debt, net of unamortized debt issuance costs — 4,664,965 — — 4,664,965Intercompany loan payable — — 193,595 (193,595) —Deferred rental revenue — 163,204 2,848 — 166,052Deferred tax liabilities — — 265 — 265Other liabilities — 17,890 1,674 — 19,564Total liabilities — 4,909,942 218,372 (192,853) 4,935,461 Shareholders’ equity (deficit) Preferred stock ($.01 par value, 50,000,000 shares authorized,no shares issued or outstanding at December 31, 2016) — — — — —Common stock ($.01 par value, 500,000,000 sharesauthorized, 207,676,827 shares issued at December 31, 2016) 2,077 2,077 2,077 (4,154) 2,077Additional paid-in capital 3,760,730 3,760,730 9,338,083 (13,098,814) 3,760,729Retained accumulated (deficit) earnings (1,328,938) (1,328,938) (1,180,410) 2,509,349 (1,328,937)Total shareholders’ equity (deficit) 2,433,869 2,433,869 8,159,750 (10,593,619) 2,433,869Total liabilities and shareholders’ equity (deficit) $2,433,869 $7,343,811 $8,378,122 $(10,786,472) $7,369,33099Table of ContentsYear ended December 31, 2016Consolidating Statement of Income ParentGuarantor SubsidiaryIssuers OtherSubsidiaryNon-Issuers Eliminations Consolidated (in thousands)Revenues Rental $— $383,553 $183,891 $— $567,444Income from direct financing lease — — 48,917 — 48,917Real estate taxes paid by tenants — 41,441 26,402 — 67,843Total rental revenue — 424,994 259,210 — 684,204Gaming, food, beverage and other — — 149,661 — 149,661Total revenues — 424,994 408,871 — 833,865Less promotional allowances — — (5,610) — (5,610)Net revenues — 424,994 403,261 — 828,255Operating expenses Gaming, food, beverage and other — — 82,463 — 82,463Real estate taxes — 41,510 27,938 — 69,448Land rights and ground lease expense — 2,685 12,114 — 14,799General and administrative — 48,452 22,916 — 71,368Depreciation — 93,476 16,078 — 109,554Total operating expenses — 186,123 161,509 — 347,632Income from operations — 238,871 241,752 — 480,623 Other income (expenses) Interest expense — (185,896) — — (185,896)Interest income — 169 1,954 — 2,123Intercompany dividends and interest — 318,047 19,670 (337,717) —Total other expenses — 132,320 21,624 (337,717) (183,773) Income before income taxes — 371,191 263,376 (337,717) 296,850Income tax expense — 1,016 6,529 — 7,545Net income $— $370,175 $256,847 $(337,717) $289,305100Table of ContentsYear ended December 31, 2016Consolidating Statement of Cash Flows ParentGuarantor SubsidiaryIssuers OtherSubsidiaryNon-Issuers Eliminations Consolidated (in thousands)Operating activities Net income $— $370,175 $256,847 $(337,717) $289,305Adjustments to reconcile net income to net cash provided by(used in) operating activities: Depreciation — 93,476 22,241 — 115,717Amortization of debt issuance costs — 15,146 — — 15,146(Gains) losses on dispositions of property — (471) 16 — (455)Deferred income taxes — — (1,535) — (1,535)Stock-based compensation — 18,312 — — 18,312Straight-line rent adjustments — 55,825 2,848 — 58,673 Decrease (increase), Prepaid expenses and other assets — 6,939 (1,554) 2,180 7,565 Intercompany — 21 (21) — —(Decrease) increase, 0 0 0 Accounts payable — 119 387 — 506Accrued expenses — (4,303) (369) — (4,672)Accrued interest — 16,120 — — 16,120Accrued salaries and wages — (2,817) (283) — (3,100)Gaming, property and other taxes — 899 14 — 913Income taxes — 59 2,121 (2,180) —Other liabilities — 1,589 286 — 1,875Net cash provided by (used in) operating activities — 571,089 280,998 (337,717) 514,370Investing activities Capital project expenditures — (229) (101) — (330)Capital maintenance expenditures — — (3,111) — (3,111)Proceeds from sale of property and equipment — 897 237 — 1,134Principal payments on loan receivable — — 3,150 — 3,150Acquisition of real estate assets — — (3,267,992) — (3,267,992)Collection of principal payments on investment in direct financinglease — — 48,533 — 48,533Net cash provided by (used in) investing activities — 668 (3,219,284) — (3,218,616)Financing activities Dividends paid (428,352) — — — (428,352)Proceeds from exercise of options, net of taxes paid related toshares withheld for tax purposes on restricted stock awardvestings 113,484 — — — 113,484Proceeds from issuance of common stock, net of issuance costs 870,810 — — — 870,810Proceeds from issuance of long-term debt — 2,552,000 — — 2,552,000Financing costs — (31,911) — — (31,911)Payments of long-term debt — (377,104) — — (377,104)Intercompany financing (555,942) (2,711,684) 2,929,909 337,717 —Net cash (used in) provided by financing activities — (568,699) 2,929,909 337,717 2,698,927Net increase (decrease) in cash and cash equivalents — 3,058 (8,377) — (5,319)Cash and cash equivalents at beginning of period — 8,716 33,159 — 41,875Cash and cash equivalents at end of period $— $11,774 $24,782 $— $36,556101Table of ContentsYear ended December 31, 2015Consolidating Statement of Income ParentGuarantor SubsidiaryIssuers OtherSubsidiaryNon-Issuers Eliminations Consolidated (in thousands)Revenues Rental $— $378,075 $14,000 $— $392,075Real estate taxes paid by tenants — 33,041 2,009 — 35,050Total rental revenue — 411,116 16,009 — 427,125Gaming, food, beverage and other — — 153,523 — 153,523Total revenues — 411,116 169,532 — 580,648Less promotional allowances — — (5,595) — (5,595)Net revenues — 411,116 163,937 — 575,053Operating expenses Gaming, food, beverage and other — — 85,774 — 85,774Real estate taxes — 33,041 3,371 — 36,412Land rights and ground lease expense — 2,812 — — 2,812General and administrative — 59,138 23,719 — 82,857Depreciation — 94,380 15,403 — 109,783Total operating expenses — 189,371 128,267 — 317,638Income from operations — 221,745 35,670 — 257,415 Other income (expenses) Interest expense — (124,183) — — (124,183)Interest income — 10 2,322 — 2,332Intercompany dividends and interest — 36,292 7,094 (43,386) —Total other expenses — (87,881) 9,416 (43,386) (121,851) Income before income taxes — 133,864 45,086 (43,386) 135,564Income tax expense — 1,338 6,104 — 7,442Net income $— $132,526 $38,982 $(43,386) $128,122102Table of ContentsYear ended December 31, 2015Consolidating Statement of Cash Flows ParentGuarantor SubsidiaryIssuers OtherSubsidiaryNon-Issuers Eliminations Consolidated (in thousands)Operating activities Net income $— $132,526 $38,982 $(43,386) $128,122Adjustments to reconcile net income to net cash provided by (usedin) operating activities: Depreciation — 94,380 15,403 — 109,783Amortization of debt issuance costs — 14,016 — — 14,016Losses on sales of property — 152 33 — 185Deferred income taxes — — (813) — (813)Stock-based compensation — 16,811 — — 16,811Straight-line rent adjustments — 55,825 — — 55,825 (Increase) decrease, Prepaid expenses and other assets — (9,988) 1,699 (1,423) (9,712) Intercompany — 2,484 (2,484) — —Increase (decrease), 0 0 0 Accounts payable — (1,013) 67 — (946)Accrued expenses — 4,104 137 — 4,241Accrued interest — 95 — — 95Accrued salaries and wages — 715 423 — 1,138Gaming, property and other taxes — (898) (58) — (956)Income taxes — 125 (1,548) 1,423 —Other liabilities — 1,934 (35) — 1,899Net cash provided by (used in) operating activities — 311,268 51,806 (43,386) 319,688Investing activities Capital project expenditures — (10,252) (5,897) — (16,149)Capital maintenance expenditures — — (2,953) — (2,953)Proceeds from sale of property and equipment — 304 6 — 310Principal payments on loan receivable — — 4,650 — 4,650Net cash used in investing activities — (9,948) (4,194) — (14,142)Financing activities Dividends paid (251,732) — — — (251,732)Proceeds from exercise of options, net of taxes paid related toshares withheld for tax purposes on restricted stock awardvestings 29,686 — — — 29,686Financing costs — (9,500) — — (9,500)Payments of long-term debt — (68,098) — — (68,098)Intercompany financing 219,403 (219,456) (43,333) 43,386 —Net cash (used in) provided by financing activities (2,643) (297,054) (43,333) 43,386 (299,644)Net (decrease) increase in cash and cash equivalents (2,643) 4,266 4,279 — 5,902Cash and cash equivalents at beginning of period 2,643 4,450 28,880 $— 35,973Cash and cash equivalents at end of period $— $8,716 $33,159 $— $41,875103Table of Contents20. Subsequent EventsOn February 1, 2018, the Company declared a regular quarterly cash dividend of $0.63 per share, which is payable on March 23, 2018 toshareholders of record as of March 9, 2018.During January 2018, the Company repaid $45 million of borrowings under its Term Loan A facility.104Table of ContentsSCHEDULE IIIREAL ESTATE ASSETS AND ACCUMULATED DEPRECIATIONDecember 31, 2017(in thousands) Initial Cost to Company NetCapitalizedCosts(Retirements)Subsequent toAcquisition Gross Amount at which Carried at Close ofPeriod Life onwhichDepreciationin LatestIncomeStatement isComputed OriginalDate ofConstruction/Renovation Description Location Encumbrances Land andImprovements Buildings andImprovements Land andImprovements Buildings andImprovements Total (1) AccumulatedDepreciation DateAcquired RentalProperties: HollywoodCasinoLawrenceburg Lawrenceburg,IN $— $15,251 $342,393 $(30) $15,222 $342,392 $357,614 $124,203 1997/2009 11/1/2013 31HollywoodCasino Aurora Aurora, IL — 4,937 98,378 (383) 4,936 97,996 102,932 60,978 1993/2002/2012 11/1/2013 30HollywoodCasino Joliet Joliet, IL — 19,214 101,104 — 19,214 101,104 120,318 55,119 1992/2003/2010 11/1/2013 31ArgosyCasino Alton Alton, IL — — 6,462 — — 6,462 6,462 4,302 1991/1999 11/1/2013 31HollywoodCasino Toledo Toledo, OH — 12,003 144,093 — 12,003 144,093 156,096 29,566 2012 11/1/2013 31HollywoodCasinoColumbus Columbus,OH — 38,240 188,543 105 38,266 188,622 226,888 38,132 2012 11/1/2013 31HollywoodCasino atCharlesTownRaces Charles Town,WV — 35,102 233,069 — 35,102 233,069 268,171 120,949 1997/2010 11/1/2013 31HollywoodCasino atPennNationalRaceCourse Grantville, PA — 25,500 161,810 — 25,500 161,810 187,310 68,266 2008/2010 11/1/2013 31M Resort Henderson, NV — 66,104 126,689 (436) 65,668 126,689 192,357 30,973 2009/2012 11/1/2013 30HollywoodCasino Bangor Bangor, ME — 12,883 84,257 — 12,883 84,257 97,140 28,896 2008/2012 11/1/2013 31Zia ParkCasino Hobbs, NM — 9,313 38,947 — 9,313 38,947 48,260 18,020 2005 11/1/2013 31HollywoodCasino GulfCoast Bay St. Louis,MS — 59,388 87,352 (229) 59,176 87,335 146,511 47,006 1992/2006/2011 11/1/2013 40ArgosyCasinoRiverside Riverside, MO — 23,468 143,301 (77) 23,391 143,301 166,692 58,364 1994/2007 11/1/2013 37HollywoodCasino Tunica Tunica, MS — 4,634 42,031 — 4,634 42,031 46,665 25,293 1994/2012 11/1/2013 31BoomtownBiloxi Biloxi, MS — 3,423 63,083 (137) 3,286 63,083 66,369 43,434 1994/2006 11/1/2013 15HollywoodCasinoSt. Louis MarylandHeights, MO — 44,198 177,063 — 44,198 177,063 221,261 63,611 1997/2013 11/1/2013 13HollywoodCasino atDaytonRaceway (2) Dayton, OH — 3,211 — 86,288 3,211 86,288 89,499 9,382 2014 11/1/2013 31HollywoodCasino atMahoningValleyRace Track(2) Youngstown,OH — 5,683 — 94,314 5,833 94,164 99,997 9,970 2014 11/1/2013 31ResortsCasino Tunica Tunica, MS — — 12,860 — — 12,860 12,860 791 1994/1996/2005/2014 5/1/2017 311st JackpotCasino(formerlyknown asBally'sCasinoTunica) Tunica, MS — 161 10,100 — 161 10,100 10,261 234 1995 5/1/2017 31Casino Queen East St. Louis,IL — 70,716 70,014 — 70,716 70,014 140,730 12,049 1999 1/23/2014 31AmeristarBlack Hawk Black Hawk,CO — 238,864 — — 238,864 — 238,864 — N/A 4/28/2016 N/ABelterraCasino Resort Florence, IN — 56,368 — — 56,368 — 56,368 — N/A 4/28/2016 N/A105Table of ContentsAmeristar CouncilBluffs CouncilBluffs, IA — 78,707 — — 78,707 — 78,707 — N/A 4/28/2016 N/AL'Auberge BatonRouge Baton Rouge,LA — 199,316 — — 199,316 — 199,316 — N/A 4/28/2016 N/ABoomtownBossier City Bossier City,LA — 77,152 — — 77,152 — 77,152 — N/A 4/28/2016 N/ABoomtown NewOrleans Boomtown,LA — 43,761 — — 43,761 — 43,761 — N/A 4/28/2016 N/AAmeristarVicksburg Vicksburg,MS — 97,900 ——97,900—97,900— N/A 4/28/2016 N/AAmeristar KansasCity Kansas City,MO — 222,231 — — 222,231 — 222,231 — N/A 4/28/2016 N/AAmeristar St.Charles St. Charles,MO — 363,203 — — 363,203 — 363,203 — N/A 4/28/2016 N/AJackpot Properties Jackpot, NV — 45,045 — — 45,045 — 45,045 — N/A 4/28/2016 N/AThe MeadowsRacetrack andCasino Washington,PA — 181,532 141,370 386 181,918 141,370 323,288 7,311 2006 9/9/2016 31 $— $2,057,508 $2,272,919 $179,801 $2,057,178 $2,453,050 $4,510,228 $856,849 HeadquartersProperty: GLPI CorporateOffice (3) Wyomissing,PA $— $750 $8,465 $58 $750 $8,523 $9,273 $607 2014/2015 9/19/2014 31 $— $2,058,258$2,281,384$179,859$2,057,928$2,461,573$4,519,501$857,456 (1)The Company acquired substantially all of the real estate assets of Pinnacle Entertainment, Inc. and subsequently leased the assets back toPinnacle in April 2016. As discussed further in the footnotes to the Consolidated Financial Statements, however, the Pinnacle Master Lease was bifurcatedbetween an operating lease and a direct financing lease, resulting in the land that is subject to operating lease treatment being recorded as a real estate asseton the Company's consolidated balance sheet, while the building assets that triggered direct financing lease treatment are recorded as an investment in directfinancing lease on the Company's consolidated balance sheet. Additionally, at several of the properties acquired from Pinnacle, the Company acquired landlease rights only (rights to land subject to long-term ground leases). Land lease rights are recorded as land rights on the Company's consolidated balancesheet and amortized through land rights and ground lease expense on the Company's consolidated statement of income. Therefore, although the scheduleabove discloses the Company's real estate investments as required, the Company directs readers to the Consolidated Financial Statements for a completeunderstanding of the assets acquired from Pinnacle. The aggregate cost for federal income tax purposes of the properties listed above was $6.92 billion atDecember 31, 2017. This amount includes the tax basis of all real property assets acquired from Pinnacle, including building assets.(2) Hollywood Casino at Dayton Raceway and Hollywood Casino at Mahoning Valley Race Course were jointly developed with Penn National Gaming, Inc.The costs capitalized subsequent to acquisition represent the capital expenditures incurred by the Company subsequent to the transfer of the developmentproperties at Spin-Off. Both properties commenced operations and began paying rent during the year ended December 31, 2014.(3) The Company's corporate headquarters building was completed in October 2015. The land was purchased on September 19, 2014 and construction on thebuilding occurred through October 2015.106Table of ContentsA summary of activity for real estate and accumulated depreciation for the years ended December 31, 2017, 2016 and 2015 is as follows: Year Ended December 31, 2017 2016 2015Real Estate:(in thousands)Balance at the beginning of the period$4,495,972 $2,750,867 $2,742,845Acquisitions23,507 1,745,449 —Capital expenditures and assets placed in service32 82 8,478Dispositions(10) (426) (456)Balance at the end of the year$4,519,501 $4,495,972 $2,750,867Accumulated Depreciation: Balance at the beginning of the period$(756,881) $(660,808) $(565,297)Depreciation expense(100,576) (96,073) (95,511)Dispositions1 — —Balance at the end of the year$(857,456) $(756,881) $(660,808)107Table of ContentsITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.ITEM 9A. CONTROLS AND PROCEDURESEvaluation of Disclosure Controls and ProceduresThe Company's management, under the supervision and with the participation of the principal executive officer and principal financial officer, hasevaluated the effectiveness of the Company's disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under theSecurities Exchange Act of 1934, as amended (the "Exchange Act"), as of December 31, 2017, which is the end of the period covered by this Annual Reporton Form 10-K. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter howwell-designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply itsjudgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our principal executive officer andprincipal financial officer concluded that as of December 31, 2017 the Company's disclosure controls and procedures were effective to ensure thatinformation required to be disclosed by the Company in reports it files or submits under the Exchange Act is (i) recorded, processed, summarized, evaluatedand reported, as applicable, within the time periods specified in the United States Securities and Exchange Commission's rules and forms and (ii) accumulatedand communicated to the Company's management, including the Company's principal executive officer and principal financial officer, as appropriate toallow timely decisions regarding required disclosures.Management's Report on Internal Control over Financial ReportingThe Company's management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, asdefined in Exchange Act Rules 13a-15(f) and 15d-15(f). The Company's management conducted an assessment of the Company's internal control overfinancial reporting and concluded it was effective as of December 31, 2017. In making this assessment, management used the criteria established by theCommittee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013).Deloitte & Touche LLP, the Company's independent registered accounting firm, issued an audit report on the effectiveness of the Company'sinternal control over financial reporting as of December 31, 2017, which is included on the following page of this Annual Report on Form 10-K.Changes in Internal Control Over Financial ReportingThere have been no changes in the Company's internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))that occurred during the fiscal quarter ended December 31, 2017, that have materially affected, or are reasonably likely to materially affect, the Company'sinternal control over financial reporting. During the year ended December 31, 2017, we implemented controls to ensure we had adequately evaluated ourcontracts with customers and properly assessed the impact of ASU 2014-09 on our financial statements to facilitate the adoption of this new guidance onJanuary 1, 2018. We do not expect significant changes to our internal control over financial reporting due to the adoption of the new standard.108Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the shareholders and Board of Directors ofGaming and Leisure Properties, Inc. and SubsidiariesOpinion on Internal Control over Financial ReportingWe have audited the internal control over financial reporting of Gaming and Leisure Properties, Inc. and Subsidiaries (the "Company") as of December 31,2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the TreadwayCommission ("COSO"). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidatedfinancial statements and financial statement schedule as of and for the year ended December 31, 2017, of the Company and our report dated February 16,2018, expressed an unqualified opinion on those financial statements.Basis for OpinionThe Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness ofinternal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Ourresponsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firmregistered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining anunderstanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. Webelieve that our audit provides a reasonable basis for our opinion.Definition and Limitations of Internal Control over Financial ReportingA company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate./s/ DELOITTE & TOUCHE LLPNew York, New YorkFebruary 16, 2018109Table of ContentsITEM 9B. OTHER INFORMATIONNone110Table of ContentsPART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe information required by this item concerning directors is hereby incorporated by reference to the Company's definitive proxy statement for its2018 Annual Meeting of Shareholders (the "2018 Proxy Statement"), to be filed with the U.S. Securities and Exchange Commission within 120 days afterDecember 31, 2017, pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended. Information required by this item concerningexecutive officers is included in Part I of this Annual Report on Form 10-K.ITEM 11. EXECUTIVE COMPENSATIONThe information called for in this item is hereby incorporated by reference to the 2018 Proxy Statement.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERSThe information called for in this item is hereby incorporated by reference to the 2018 Proxy Statement.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCEThe information called for in this item is hereby incorporated by reference to the 2018 Proxy Statement.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESThe information called for in this item is hereby incorporated by reference to the 2018 Proxy Statement.111Table of ContentsPART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a) 1. Financial Statements. The following is a list of the Consolidated Financial Statements of the Company and its subsidiaries and supplementary datafiled as part of Item 8 hereof:Reports of Independent Registered Public Accounting FirmsConsolidated Balance Sheets as of December 31, 2017 and 2016Consolidated Statements of Income for the years ended December 31, 2017, 2016 and 2015Consolidated Statements of Changes in Shareholders' Equity (Deficit) for the years ended December 31, 2017, 2016 and 2015Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 20152. Financial Statement Schedule:Schedule III. Real Estate and Accumulated Depreciation as of December 31, 2017 for GLPI.3. Exhibits, Including Those Incorporated by Reference.The exhibits to this Report are listed on the accompanying index to exhibits and are incorporated herein by reference or are filed as part of thisannual report on Form 10-K.ITEM 16. FORM 10-K SUMMARYNone.112Table of ContentsEXHIBIT INDEXExhibit Description of Exhibit2.1 Separation and Distribution Agreement, dated November 1, 2013, by and between Penn National Gaming, Inc. and Gaming and LeisureProperties, Inc. (Incorporated by reference to Exhibit 2.1 to the Company's current report on Form 8-K filed on November 7, 2013). 2.2 Agreement and Plan of Merger, dated as of July 20, 2015, by and among Pinnacle Entertainment, Inc., Gaming and Leisure Properties, Inc. andGold Merger Sub, LLC. (Incorporated by reference to Exhibit 2.1 to the Company's current report on Form 8-K filed on July 22, 2015). 2.3 Amendment No. 1, dated as of March 25, 2016, to Agreement and Plan of Merger, dated as of July 20, 2015, by and among PinnacleEntertainment, Inc., Gaming and Leisure Properties, Inc. and Golder Merger Sub, LLC. (Incorporated by reference to Exhibit 2.1 to theCompany's current report on Form 8-K filed on March 28, 2016). 2.4 Separation and Distribution Agreement, dated April 28, 2016, by and between PNK Entertainment, Inc., Gold Merger Sub, LLC (as successorto Pinnacle Entertainment, Inc.) and solely with respect to Article VIII, Gaming and Leisure Properties, Inc. (Incorporated by reference toExhibit 2.4 to the Company's current report on Form 8-K filed on April 28, 2016). 3.1 Amended and Restated Articles of Incorporation of Gaming and Leisure Properties, Inc. (Incorporated by reference to Exhibit 3.1 to theCompany's current report on Form 8-K filed on June 2, 2016). 3.2 Amended and Restated Bylaws of Gaming and Leisure Properties, Inc. (Incorporated by reference to Exhibit 3.2 to the Company's currentreport on Form 8-K filed on June 2, 2016). 4.1 Indenture, dated as of October 30, 2013, among GLP Capital, L.P. and GLP Financing II, Inc., as Issuers, Gaming and Leisure Properties, Inc., asParent Guarantor, and Wells Fargo Bank, National Association, as Trustee. (Incorporated by reference to Exhibit 4.1 to the Company's currentreport on Form 8-K filed on November 1, 2013). 4.2 First Supplemental Indenture, dated as of March 28, 2016, among GLP Capital, L.P., GLP Financing II, Inc. and Wells Fargo Bank, NationalAssociation, as Trustee. (Incorporated by reference to Exhibit 4.1 to the Company's current report on Form 8-K filed on March 28, 2016). 4.3 Second Supplemental Indenture, dated as of April 28, 2016, by and among GLP Capital, L.P., GLP Financing II, Inc. as Issuers and Gaming andLeisure Properties, Inc, as Parent Guarantor and Wells Fargo Bank, National Association, as Trustee. (Incorporated by reference to Exhibit 4.3to the Company's current report on Form 8-K filed on April 28, 2016). 4.4 Third Supplemental Indenture, dated as of April 28, 2016, by and among GLP Capital, L.P., GLP Financing II, Inc. as Issuers and Gaming andLeisure Properties, Inc. as Parent Guarantor and Wells Fargo Bank, National Association, as Trustee. (Incorporated by reference to Exhibit 4.4to the Company's current report on Form 8-K filed on April 28, 2016). 4.5 Officer's Certificate of GLP Capital, L.P. and GLP Financing II, Inc., dated as of October 30, 2013, establishing the 2018 Notes and the 2023Notes. (Incorporated by reference to Exhibit 4.2 to the Company's current report on Form 8-K filed on November 1, 2013). 4.6 Officer's Certificate of GLP Capital, L.P. and GLP Financing II, Inc., dated as of October 31, 2013, establishing the 2020 Notes. (Incorporatedby reference to Exhibit 4.3 to the Company's current report on Form 8-K filed on November 1, 2013). 4.7 Form of 2021 Note (Incorporated by reference to Exhibit 4.5 and included in Exhibit 4.3 to the Company's current report on Form 8-K filed onApril 28, 2016). 4.8 Form of 2026 Note (Incorporated by reference to Exhibit 4.6 and included in Exhibit 4.4 to the Company's current report on Form 8-K filed onApril 28, 2016). 10.1 Registration Rights Agreement, dated as of October 30, 2013, by and among GLP Capital, L.P., GLP Financing II, Inc., Gaming and LeisureProperties, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and the other initial purchasers named therein, with respect to the2018 Notes. (Incorporated by reference to Exhibit 10.1 to the Company's current report on Form 8-K filed on November 1, 2013). 113Table of ContentsExhibit Description of Exhibit10.2 Registration Rights Agreement, dated as of October 30, 2013, by and among GLP Capital, L.P., GLP Financing II, Inc., Gaming and LeisureProperties, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and the other initial purchasers named therein, with respect to the2023 Notes. (Incorporated by reference to Exhibit 10.2 to the Company's current report on Form 8-K filed on November 1, 2013). 10.3 Registration Rights Agreement, dated as of October 31, 2013, by and among GLP Capital, L.P., GLP Financing II, Inc., Gaming and LeisureProperties, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and the other initial purchasers named therein, with respect to the2020 Notes. (Incorporated by reference to Exhibit 10.3 to the Company's current report on Form 8-K filed on November 1, 2013). 10.4 Credit Agreement, dated as of October 28, 2013, among GLP Capital, L.P., as successor-by-merger to GLP Financing, LLC, each lender fromtime to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent. (Incorporated by reference to Exhibit 10.4 to theCompany's current report on Form 8-K filed on November 1, 2013). 10.5 Amendment No. 1, dated as of July 31, 2015, to the Credit Agreement dated as of October 28, 2013 among GLP Capital, L.P., the several banksand other financial institutions party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and the various other parties thereto.(Incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on S-4 filed on August 28, 2015). 10.6 First Amendment, dated as of March 25, 2016, to Amendment No. 1, dated as of July 31, 2015, to the Credit Agreement dated as of October 28,2013 among GLP Capital, L.P., the several banks and other financial institutions party thereto, JPMorgan Chase Bank, N.A., as AdministrativeAgent and the various other parties thereto. (Incorporated by reference to Exhibit 10.1 to the Company's current report on Form 8-K filed onMarch 28, 2016). 10.7 Master Lease, dated November 1, 2013, by and among GLP Capital L.P. and Penn Tenant LLC. (Incorporated by reference to Exhibit 10.1 tothe Company's current report on Form 8-K filed on November 7, 2013). 10.8 First Amendment to the Master Lease Agreement, dated as of March 5, 2014, by and among GLP Capital L.P. and Penn Tenant, LLC.(Incorporated by reference to Exhibit 10.1 to the Company's quarterly report on Form 10-Q filed on May 12, 2014). 10.9 Second Amendment to the Master Lease Agreement, dated as of April 18, 2014, by and among GLP Capital L.P. and Penn Tenant, LLC.(Incorporated by reference to Exhibit 10.1 to the Company's quarterly report on Form 10-Q filed on August 1, 2014). 10.10 Third Amendment to the Master Lease Agreement, dated as of September 20, 2016, by and among GLP Capital L.P. and Penn Tenant, LLC.(Incorporated by reference to Exhibit 10.2 to the Company's quarterly report on Form 10-Q filed on November 9, 2016). 10.11 Fourth Amendment to the Master Lease Agreement, dated as of May 1, 2017, by and among GLP Capital L.P. and Penn Tenant, LLC.(Incorporated by reference to Exhibit 10.2 to the Company's quarterly report on Form 10-Q filed on May 3, 2017). 10.12 Master Lease, dated April 28, 2016, by and among Gold Merger Sub, LLC (as successor to Pinnacle Entertainment, Inc.) and Pinnacle MLS,LLC. (Incorporated by reference to Exhibit 2.3 to the Company's current report on Form 8-K filed on April 28, 2016). 10.13 First Amendment to the Master Lease, dated August 29, 2016, by and among Gold Merger Sub, LLC (as successor to Pinnacle Entertainment,Inc.) and Pinnacle MLS, LLC. (Incorporated by reference to Exhibit 10.1 to the Company's quarterly report on Form 10-Q filed on November9, 2016). 10.14 Second Amendment to the Master Lease, dated October 25, 2016, by and among Gold Merger Sub, LLC (as successor to PinnacleEntertainment, Inc.) and Pinnacle MLS, LLC. (Incorporated by reference to Exhibit 10.13 to the Company's annual report on Form 10-K filedon February 22, 2017). 10.15 Third Amendment to the Master Lease, dated March 24, 2017, by and among Gold Merger Sub, LLC (as successor to Pinnacle Entertainment,Inc.) and Pinnacle MLS, LLC. (Incorporated by reference to Exhibit 10.1 to the Company's quarterly report on Form 10-Q filed on May 3,2017). 10.16 Consent Agreement by and among Gaming and Leisure Properties, Inc., Gold Merger Sub, LLC, PA Meadows, LLC, WTA II, Inc., CCRPennsylvania Racing, Inc., Penn National Gaming, Inc., Pinnacle Entertainment, Inc., PNK Development 33, LLC and Pinnacle MLS, LLCdated December 17, 2017. (Incorporated by reference to Exhibit 10.1 to the Company's current report on Form 8-K filed on December 19,2017).114Table of ContentsExhibit Description of Exhibit10.17 Tax Matters Agreement, dated as of November 1, 2013, by and among Penn National Gaming, Inc. and Gaming and Leisure Properties, Inc.(Incorporated by reference to Exhibit 10.2 to the Company's current report on Form 8-K filed on November 7, 2013). 10.18 Tax Matters Agreement, dated as of July 20, 2015, by and among Pinnacle Entertainment, Inc. and Gaming and Leisure Properties, Inc.(Incorporated by reference to Exhibit 10.1 to the Company's current report on Form 8-K filed on July 22, 2015). 10.19 Transition Services Agreement, dated November 1, 2013, by and among Penn National Gaming, Inc. and Gaming and Leisure Properties, Inc.(Incorporated by reference to Exhibit 10.3 to the Company's current report on Form 8-K filed on November 7, 2013). 10.20 Employee Matters Agreement, dated as of November 1, 2013, by and between Penn National Gaming, Inc. and Gaming and LeisureProperties, Inc. (Incorporated by reference to Exhibit 10.4 to the Company's current report on Form 8-K filed on November 7, 2013). 10.21 Employee Matters Agreement, dated April 28, 2016, by and between PNK Entertainment, Inc. and Gold Merger Sub, LLC (as successor toPinnacle Entertainment, Inc.) (Incorporated by reference to Exhibit 2.5 to the Company's current report on Form 8-K filed on April 28, 2016). 10.22# Gaming and Leisure Properties, Inc. 2013 Long Term Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to theCompany's Registration Statement on Form S-8 filed on October 31, 2013). 10.23# Form of Restricted Stock Performance Award I under the Gaming and Leisure Properties, Inc. 2013 Long-Term Incentive Compensation Plan.(Incorporated by reference to Exhibit 4.8 to the Company's annual report on Form 10-K filed on February 22, 2017). 10.24# Form of Restricted Stock Performance Award II under the Gaming and Leisure Properties, Inc. 2013 Long-Term Incentive Compensation Plan.(Incorporated by reference to Exhibit 4.9 to the Company's annual report on Form 10-K filed on February 22, 2017). 10.25# Form of Restricted Stock Award under the Gaming and Leisure Properties, Inc. 2013 Long-Term Incentive Compensation Plan. (Incorporatedby reference to Exhibit 4.2 to the Company's quarterly report on Form 10-Q filed on May 4, 2015). 10.26#* Form of Restricted Stock Performance Award I under the Gaming and Leisure Properties, Inc. 2013 Long-Term Incentive Compensation Planfor Awards Issued after January 1, 2018. 10.27#* Form of Restricted Stock Performance Award II under the Gaming and Leisure Properties, Inc. 2013 Long-Term Incentive Compensation Planfor Awards Issued after January 1, 2018. 10.28 Amended and Restated Membership Interest Purchase Agreement, dated as of December 15, 2015, by and among Gaming and LeisureProperties, Inc., GLP Capital, L.P., PA Meadows LLC, PA Mezzco LLC and Cannery Casino Resorts, LLC. (Incorporated by reference toExhibit 10.14 to the Company's annual report on Form 10-K filed on February 22, 2016). 10.29 Agreement of Sale, dated as of September 19, 2014, between Wyomissing Professional Center Inc. and GLP Capital, L.P. (Incorporated byreference to Exhibit 10.1 to the Company's quarterly report on Form 10-Q filed on November 7, 2014). 10.30 Construction Management Agreement, dated as of September 24, 2014, between GLP Capital, L.P. and CB Consulting Group, LLC(Incorporated by reference to Exhibit 10.1 to the Company's quarterly report on Form 10-Q filed on November 7, 2014). 21* Subsidiaries of the Registrant. 23.1* Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm. 23.2* Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm. 31.1* CEO Certification pursuant to rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934. 115Table of ContentsExhibit Description of Exhibit31.2* CFO Certification pursuant to rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934. 32.1* CEO Certification pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes - Oxley Act of 2002. 32.2* CFO Certification pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes - Oxley Act of 2002. 101* Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets at December 31, 2017 and 2016, (ii) theConsolidated Statements of Income for the years ended December 31, 2017, 2016 and 2015, (iii) the Consolidated Statements of Changes inShareholders' Equity (Deficit) for the years ended December 31, 2017, 2016 and 2015, (iv) the Consolidated Statements of Cash Flows for theyears ended December 31, 2017, 2016 and 2015, and (v) the notes to the Consolidated Financial Statements. # Compensation plans and arrangements for executives and others.* Filed herewith.116Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized. GAMING AND LEISURE PROPERTIES, INC. By: /s/ PETER M. CARLINO Peter M. Carlino Chairman of the Board andChief Executive OfficerDated: February 16, 2018Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated.Signature Title Date /s/ PETER M. CARLINO Chairman of the Board and Chief Executive Officer(Principal Executive Officer) February 16, 2018Peter M. Carlino /s/ WILLIAM J. CLIFFORD Chief Financial Officer and Treasurer (PrincipalFinancial Officer) February 16, 2018William J. Clifford /s/ DESIREE A. BURKE Senior Vice President and Chief Accounting Officer(Principal Accounting Officer) February 16, 2018Desiree A. Burke /s/ DAVID A. HANDLER Director February 16, 2018David A. Handler /s/ JOSEPH W. MARSHALL Director February 16, 2018Joseph W. Marshall /s/ JAMES B. PERRY Director February 16, 2018James B. Perry /s/ BARRY F. SCHWARTZ Director February 16, 2018Barry F. Schwartz /s/ EARL C. SHANKS Director February 16, 2018Earl C. Shanks /s/ E. SCOTT URDANG Director February 16, 2018E. Scott Urdang 117Exhibit 10.26GAMING AND LEISURE PROPERTIES, INC.PERFORMANCE RESTRICTED STOCK AWARD TERMSFOR AWARDS ISSUED AFTER JANUARY 1, 2018All Restricted Stock is subject to the provisions of the 2013 Long Term Incentive Compensation Plan (the “Plan”) and anyrules and regulations established by the Compensation Committee of the Board of Directors of Gaming and LeisureProperties, Inc. A copy of the Plan is available on the Merrill Lynch website under Document Library/Plan Documents.Unless specifically defined herein, words used herein with initial capitalized letters are defined in the Plan.The terms provided herein are applicable to Performance Restricted Stock Awards issued after January 1, 2018. Differentterms may apply to any prior or future awards under the Plan.I.DEFINITIONSFor purposes of a Performance Restricted Stock Award, the following terms shall have the meanings set forth:A.“Initial Share Price” means the closing stock price for the last trading day preceding the start of the applicableperformance period.B.“Final Share Price” means for the Company and for the Peer Group companies, based on the closing stock price forthe last trading day preceding the end of the applicable performance period.C.“Peer Group” means the companies included in the MSCI US REIT Index as of the beginning of the PerformancePeriod; provided that if a constituent company(s) in the Peer Group ceases to be actively traded, due, for example, to merger orbankruptcy, or the Compensation Committee otherwise reasonably determines that is no longer suitable for the purposes of thisAgreement, then company(s) shall not be included in the Peer Group.D.“Performance Period” means the three-year period beginning on January 1 of the calendar year with respect towhich Restricted Stock Award is granted, or if applicable, earlier upon the date on which a Change in Control shall be effective.E.“Total Shareholder Return,” or “TSR” means the Final Share Price minus the Initial Share Price, plus any dividends(ordinary and special) paid during the applicable Performance Period. All dividends are assumed to be reinvested in the stock.II.PAYMENT FOR SHARESThere is no exercise price or other payment required in exchange for a Performance Restricted Stock Award.III.FORFEITURE/LAPSE OF RESTRICTIONSThe Compensation Committee will determine the percentage of each Performance Restricted Stock Award with respect to whichrestrictions will lapse based on the achievement of the following TSR thresholds as compared to the Peer Group during the applicablePerformance Period:Achievement LevelPeer Group Percentile Percentage ofMaximum EarnedBelow 25th 0%50th 50%75th or Above 100%Restrictions on Performance Restricted Stock Awards will lapse on a linear basis between achievement levels. Notwithstanding theforegoing, in the event that the Company’s TSR for the Performance Period is negative, the maximum Percentage Earned for aPerformance Restricted Stock Award will be 50%.Performance Restricted Stock Awards are subject to forfeiture until lapse of such forfeiture restrictions determined at the conclusion ofthe applicable Performance Period. Any shares with restrictions that do not lapse at the end of the applicable Performance Period willbe forfeited. In addition, in the event of an Award Holder’s death, disability, retirement or other termination of employment, theforfeiture restrictions on a Performance Restricted Stock Award shall lapse and/or shares of Restricted Stock forfeited as follows:A.Death and Disability: The Award Holder or such Holder’s estate, as applicable, will be entitled to receive thepercentage of a Performance Restricted Stock Award determined at the end of the applicable Performance Period as if such AwardHolder were still employed at the end of the applicable Performance Period.B.Termination without Cause or by Award Holder for Retirement: The Award Holder will be entitled to receive thepercentage of a Performance Restricted Stock Award determined at the end of the applicable Performance Period multiplied by afraction, the numerator of which equals the number of days during such Performance Period that such Award Holder was activelyemployed by the Company, and the denominator of which equals the total days in the applicable Performance Period.C.Termination for Cause or by Award Holder other than Retirement: All shares subject to the Performance RestrictedStock Award will be forfeited and the underlying Restricted Stock will immediately revert to the Company. An Award Holder willreceive no payment for shares of Restricted Stock that are forfeited.D.Change of Control (as defined in the Plan): The ending date of the applicable Performance Period will be establishedas the effective date of the Change of Control and the lapsing of restrictions will be determined as of such date.The “lapse” of forfeiture restrictions means that the Common Stock subject to the Award shall, thereafter, be fully transferable by theAward Holder, subject to compliance with Section VII of these Award terms. Until the lapse of such forfeiture restrictions an AwardHolder may not sell, transfer, pledge or otherwise dispose of the shares of Common Stock subject to a Performance Restricted StockAward. There are no additional events or occurrences that shall lead to lapse of any forfeiture restrictions on this Award.The term “Cause” shall be as defined in the Award Holder’s employment agreement or, if such Award Holder does not have anemployment agreement with the Company or such term is otherwise not defined, such term shall mean (i) an Award Holder shall havebeen convicted of, or pled guilty or nolo contendere to, a felony or any misdemeanor involving allegations of fraud, embezzlement,theft or dishonesty against the Company; (ii) Award Holder is found to be an Unsuitable Person as defined in the Plan; (iii) AwardHolder engages in wrongful disclosure of confidential information or otherwise engages in competition with the Company; or (iv) theCompany’s reasonable determination of Award Holder’s willful misconduct in the performance of such Holder’s duties with theCompany (other than any such failure resulting from incapacity due to physical disability or mental illness); or (v) the Company’sreasonable determination of Award Holder’s willful engagement in illegal conduct or gross misconduct which is materially injurious tothe Company or one of its affiliates.IV.LEAVES OF ABSENCEFor purposes of a Performance Restricted Stock Award, service as an employee does not automatically terminate with a leave ofabsence. Please refer to Section 12.12 of the Plan for the impact of a leave of absence. V.STOCK CERTIFICATESThe Common Stock issued at the end of a Performance Period, if any, will be in the form of uncertificated shares. During theRestricted Period the shares of Common Stock underlying a Performance Restricted Stock Award will be held by the Company.VI.VOTING AND DIVIDEND RIGHTSAn Award Holder of Performance Restricted Stock Awards may NOT vote the underlying Restricted Stock and will NOT receive anydividends paid with respect to such shares Restricted Stock until the lapse of forfeiture restrictions, at which time such Holder willreceive dividends accruing during the applicable Performance Period on the shares with respect to which the restrictions lapse.VII.WITHHOLDING TAXESNo evidence of shares of Common Stock will be released or issued to an Award Holder at the end of a Performance Period unlesssuch Holder has made arrangements, acceptable to the Company, to pay any withholding taxes that may be due as a result of the lapseof the forfeiture restrictions. In accordance with the Plan, an Award Holder is authorized to make payment of any such withholding taxin cash, by payroll deduction, by authorizing the Company to withhold shares of Common Stock from an applicable Award or bysurrendering to the Company shares of Common Stock that already owned by such Holder. In the event an Award Holder elects toauthorize the Company to withhold shares of Common Stock from anAward, such Holder can only authorize the retention of shares of Common Stock equal to the minimum tax withholding obligation.The fair market value of the shares of Common Stock retained by the Company or surrendered by an Award Holder shall bedetermined in accordance with the Plan as of the date the tax obligation arises.VIII.NO RIGHT TO CONTINUED SERVICEA Performance Restricted Stock Award does not give a Holder the right to continue in service with the Company in any capacity. TheCompany reserves the right to terminate a Holder’s services at any time, with or without cause, subject to any employment agreementor other contract.IX.ADJUSTMENTSIn the event of a stock split, a stock dividend or a similar change in the Common Stock, the number of shares of Restricted Stocksubject to a Performance Restricted Stock Award that remain subject to forfeiture will be adjusted accordingly.These Performance Restricted Stock Award terms and the Plan constitute the entire understanding between an Award Holder and theCompany regarding a Performance Restricted Stock Award.Exhibit 10.27GAMING AND LEISURE PROPERTIES, INC.PERFORMANCE RESTRICTED STOCK AWARD TERMSFOR AWARDS ISSUED AFTER JANUARY 1, 2018All Restricted Stock is subject to the provisions of the 2013 Long Term Incentive Compensation Plan (the “Plan”) and anyrules and regulations established by the Compensation Committee of the Board of Directors of Gaming and LeisureProperties, Inc. A copy of the Plan is available on the Merrill Lynch website under Document Library/Plan Documents.Unless specifically defined herein, words used herein with initial capitalized letters are defined in the Plan.The terms provided herein are applicable to Performance Restricted Stock Awards issued after January 1, 2018. Differentterms may apply to any prior or future awards under the Plan.I.DEFINITIONSFor purposes of a Performance Restricted Stock Award, the following terms shall have the meanings set forth:A.“Initial Share Price” means, for the Company and for the Peer Group companies, the closing stock price for the lasttrading day preceding the start of the applicable Performance Period.B.“Final Share Price” means, for the Company and for the Peer Group companies, the closing stock price for the lasttrading day preceding the end of the applicable Performance Period.C.“Peer Group” means the following companies which have been identified to be triple net real estate investmenttrusts:Agree Realty CorporationSTORE Capital CorporationEPR PropertiesVEREITFour Corners Property TrustW. P. CareyGaming and Leisure PropertiesOmega Healthcare InvestorsGetty RealtyCommunications Sales & LeasingGlobal Net LeaseAlexandria Real Estate EquitiesGramercy Property TrustGladstone Commercial CorporationLexington Realty TrustLTC PropertiesMGM Growth PropertiesOne Liberty PropertiesNational Retail PropertiesSeritage Growth PropertiesRealty Income CorporationSTAG Industrial GroupSelect Income REITSpirit Realty CapitalProvided that if a constituent company(s) in the Peer Group ceases to be actively traded, due, for example, to merger orbankruptcy, or the Compensation Committee otherwise reasonably determines that is no longer suitable for the purposes of this AwardAgreement, then such company(s) shall not be included in the Peer Group.D.“Performance Period” means the three-year period beginning on January 1 of the calendar year with respect towhich this Performance Restricted Stock Award is granted, provided that a Performance Period shall end immediately upon the date onwhich a Change in Control shall be effective.E.“Total Shareholder Return,” or “TSR” means, for the Company and for the Peer Group companies, the Final SharePrice minus the Initial Share Price, plus any dividends (ordinary and special) paid during the applicable Performance Period. Alldividends are assumed to be reinvested in the stock.II.PAYMENT FOR SHARESThere is no exercise price or other payment required in exchange for a Performance Restricted Stock Award.III.FORFEITURE/LAPSE OF RESTRICTIONSThe Compensation Committee will determine the percentage of each Performance Restricted Stock Award with respect to whichrestrictions will lapse based on the achievement of the following TSR thresholds as compared to the Peer Group during the applicablePerformance Period:Achievement LevelPeer Group Percentile Percentage ofMaximum EarnedBelow 25th 0%50th 50%75th or Above 100%Restrictions on Performance Restricted Stock Awards will lapse on a linear basis between achievement levels. Notwithstanding theforegoing, in the event that the Company’s TSR for the Performance Period is negative, the maximum Percentage Earned for aPerformance Restricted Stock Award will be 50%.Performance Restricted Stock Awards are subject to forfeiture until lapse of such forfeiture restrictions determined at the conclusion ofthe applicable Performance Period. Any shares with restrictions that do not lapse at the end of the applicable Performance Period willbe forfeited. In addition, in the event of an Holder’s death, disability, retirement or other termination of employment or service, theforfeiture restrictions on a Performance Restricted Stock Award shall lapse and/or shares of Restricted Stock forfeited as follows:A.Death and Disability: The Holder or such Holder’s estate, as applicable, will be entitled to receive the percentage ofa Performance Restricted Stock Award determined at the end of the applicable Performance Period as if such Holder were stillemployed at the end of the applicable Performance Period.B.Termination without Cause or by Holder for Retirement: The Holder will be entitled to receive the percentage of aPerformance Restricted Stock Award determined at the end of the applicable Performance Period multiplied by a fraction, thenumerator of which equals the number of days during such Performance Period that such Holder was actively employed by, orproviding services to, the Company, and the denominator of which equals the total days in the applicable Performance Period.C.Termination for Cause or by Holder other than Retirement: All shares subject to the Performance Restricted StockAward will be forfeited and the underlying Restricted Stock will immediately revert to the Company. A Holder will receive nopayment for shares of Restricted Stock that are forfeited.D.Change of Control (as defined in the Plan): The ending date of the applicable Performance Period will be establishedas the effective date of the Change of Control and the lapsing of restrictions will be determined as of such date.The “lapse” of forfeiture restrictions means that the Common Stock subject to the Award shall, thereafter, be fully transferable by theHolder, subject to compliance with Section VII of this Award Agreement. Until the lapse of such forfeiture restrictions a Holder maynot sell, transfer, pledge or otherwise dispose of the shares of Common Stock subject to a Performance Restricted Stock Award. Thereare no additional events or occurrences that shall lead to lapse of any forfeiture restrictions on this Award.The term “Cause” shall be as defined in the Holder’s employment agreement or, if such Holder does not have an employmentagreement with the Company or such term is otherwise not defined, such term shall mean (i) Holder shall have been convicted of, orpled guilty or nolo contendere to, a felony or any misdemeanor involving allegations of fraud, embezzlement, theft or dishonestyagainst the Company; (ii) Holder is found to be an Unsuitable Person as defined in the Plan; (iii) Holder engages in wrongfuldisclosure of confidential information or otherwise engages in competition with the Company; or (iv) the Company’s reasonabledetermination of Holder’s willful misconduct in the performance of such Holder’s duties with the Company (other than any suchfailure resulting from incapacity due to physical disability or mental illness); or (v) the Company’s reasonable determination ofHolder’s willful engagement in illegal conduct or gross misconduct which is materially injurious to the Company or one of its affiliates.IV.LEAVES OF ABSENCEFor purposes of a Performance Restricted Stock Award, service as an employee does not automatically terminate with a leave ofabsence. Please refer to Section 12.12 of the Plan for the impact of a leave of absence. V.STOCK CERTIFICATESThe Common Stock issued at the end of a Performance Period, if any, will be in the form of uncertificated shares. During theRestricted Period the shares of Common Stock underlying a Performance Restricted Stock Award will be held by the Company.VI.VOTING AND DIVIDEND RIGHTSA Holder of Performance Restricted Stock Awards may NOT vote the underlying Restricted Stock and will NOT receive anydividends paid with respect to such shares Restricted Stock until the lapse of forfeiture restrictions, at which time such Holder willreceive dividends accruing during the applicable Performance Period on the shares with respect to which the restrictions lapse.VII.WITHHOLDING TAXESNo evidence of shares of Common Stock will be released or issued to a Holder at the end of a Performance Period unless such Holderhas made arrangements, acceptable to the Company, to pay any withholding taxes that may be due as a result of the lapse of theforfeiture restrictions. In accordance with the Plan, a Holder is authorized to make payment of any such withholding tax in cash, bypayroll deduction, by authorizing the Company to withhold shares of Common Stock from an applicable Award or by surrendering tothe Company shares of Common Stock that already owned by such Holder. In the event a Holder elects to authorize the Company towithhold shares of Common Stock from an Award, such Holder can only authorize the retention of shares of Common Stock equal tothe minimum tax withholding obligation. The fair market value of the shares of Common Stock retained by the Company orsurrendered by a Holder shall be determined in accordance with the Plan as of the date the tax obligation arises.VIII.NO RIGHT TO CONTINUED SERVICEA Performance Restricted Stock Award does not give a Holder the right to continue in service with the Company in any capacity. TheCompany reserves the right to terminate a Holder’s services at any time, with or without cause, subject to any employment agreementor other contract.IX.ADJUSTMENTSIn the event of a stock split, a stock dividend or a similar change in the Common Stock, the number of shares of Restricted Stocksubject to a Performance Restricted Stock Award that remain subject to forfeiture will be adjusted accordingly.This Award Agreement and the Plan constitute the entire understanding between a Holder and the Company regarding a PerformanceRestricted Stock Award.Exhibit 21Subsidiaries of Gaming and Leisure Properties, Inc. (a Pennsylvania corporation) Name of Subsidiary State or OtherJurisdiction ofIncorporationCCR PA Racing, LLC PennsylvaniaGLP Capital Partners, LLC PennsylvaniaGLP Capital, L.P. PennsylvaniaGLP Holdings, Inc. PennsylvaniaGLP Financing I, LLC DelawareGLP Financing II, Inc. DelawareGLP Midwest Properties I, LLC DelawareGold Merger Sub, LLC DelawareLouisiana Casino Cruises, Inc. (d/b/a Hollywood Casino Baton Rouge) LouisianaPA Meadows, LLC PennsylvaniaPenn Cecil Maryland, Inc. (d/b/a Hollywood Casino Perryville) MarylandWTA II, LLC DelawareExhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in the following Registration Statements of our reports dated February 16, 2018, relating to the consolidatedfinancial statements and financial statement schedule of Gaming and Leisure Properties, Inc. and Subsidiaries, and the effectiveness of Gaming and LeisureProperties, Inc. and Subsidiaries’ internal control over financial reporting, appearing in this Annual Report on Form 10-K of Gaming and Leisure Properties,Inc. and Subsidiaries for the year ended December 31, 2017:Registration Statement No. 333-210423 on Form S-3Amendment No. 4 to Registration Statement No. 333-206649 on Form S-4Amendment No. 1 to Registration Statement No. 333-196662 on Form S-4Registration Statement No. 333-192017 on Form S-8/s/ DELOITTE & TOUCHE LLPNew York, New YorkFebruary 16, 2018Exhibit 23.2CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in the following Registration Statements:(1) Registration Statement (Form S-8 No. 333-192017) pertaining to the 2013 Long Term Incentive Compensation Plan,(2) Registration Statement (Form S-4 No. 333-196662) of Gaming and Leisure Properties, Inc. and Subsidiaries,(3) Registration Statement (Form S-4 No. 333-206649) of Gaming and Leisure Properties, Inc. and Subsidiaries, and(4) Registration Statement (Form S-3 No. 333-210423) of Gaming and Leisure Properties, Inc. and Subsidiaries;of our report dated February 22, 2016, with respect to the consolidated financial statements and schedule of Gaming and Leisure Properties, Inc. andSubsidiaries included in this Annual Report (Form 10-K) of Gaming and Leisure Properties, Inc. for the year ended December 31, 2017./s/ Ernst & Young LLPPhiladelphia, PennsylvaniaFebruary 16, 2018Exhibit 31.1 CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 I, Peter M. Carlino, certify that: 1. I have reviewed this annual report on Form 10-K of Gaming and Leisure Properties, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. February 16, 2018/s/ Peter M. CarlinoName: Peter M. CarlinoChief Executive OfficerExhibit 31.2 CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 I, William J. Clifford, certify that: 1. I have reviewed this annual report on Form 10-K of Gaming and Leisure Properties, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. February 16, 2018/s/ William J. CliffordName: William J. CliffordChief Financial OfficerExhibit 32.1 CERTIFICATION PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 200218 U.S.C. SECTION 1350 In connection with the annual report of Gaming and Leisure Properties, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2017,as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter M. Carlino, Chief Executive Officer of the Company, certify,pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. /s/ Peter M. CarlinoPeter M. CarlinoChief Executive OfficerFebruary 16, 2018Exhibit 32.2 CERTIFICATION PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002,18 U.S.C. SECTION 1350 In connection with the annual report of Gaming and Leisure Properties, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2017,as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William J. Clifford, Chief Financial Officer of the Company,certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. /s/ William J. CliffordWilliam J. CliffordChief Financial OfficerFebruary 16, 2018

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