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Gaming and Leisure Properties Inc (GLPI 0.42%)
Q4Â 2019 Earnings Call
Feb 21, 2020, 10:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Greetings and welcome to Gaming and Leisure Properties' Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions]
I would now like to turn the conference over to your host, Joe Jaffoni. Please go ahead.
Joseph Jaffoni -- Investor Relations
Thank you, Stacey, and good morning, everyone, and thank you for joining Gaming and Leisure Properties' fourth quarter 2019 earnings call and webcast. The press release distributed yesterday afternoon is available in the Investor Relations section on our website at www.glpropinc.com.
On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. Forward-looking statements may include those related to revenue, operating income, and financial guidance, as well as non-GAAP financial measures such as FFO and AFFO. As a reminder, forward-looking statements represent management's current estimates and the Company assumes no obligation to update any forward-looking statements in the future.
We encourage listeners to review the more detailed discussions related to forward-looking statements contained in the Company's filings with the SEC, as well as the definitions and reconciliations of non-GAAP financial measures contained in the Company's earnings release.
On this morning's call, we are joined by Peter Carlino, Chairman and Chief Executive Officer; and Steve Snyder, Chief Financial Officer at Gaming and Leisure Properties. Also joining today's call are Desiree Burke, Senior Vice President and Chief Accounting Officer; Brandon Moore, Senior Vice President, General Counsel and Secretary; Steve Ladany, Senior Vice President; and Matthew -- I'm sorry, Senior Vice President of Finance; and Matthew Demchyk, Senior VP of Investments.
With that, it's my pleasure to turn the call over to Peter Carlino. Peter?
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Well, thank you, Joe, and good morning, everyone. We are of course delighted to report the end of a great quarter and the end of a terrific year for GLPI and its shareholders. We have set a -- I have set a goal in 2019 to do a better job of outreach to our shareholders, tell a better story and do a more effective job and because I was feeling as Rodney Dangerfield used to say, we can't get no respect and I was satisfied that performance was good, but clearly people weren't getting it out in the market.
So in sharing our story most effective -- more effectively with all of you and our excellent financial performance, I was satisfied that the market would eventually come to recognize that. Regional gaming in particular offers some of the most attractive risk-adjusted cash flows in the marketplace. As I like to remind folks that we speak with, our properties are 100% occupied today and we expect that they will be 100% occupied 10 years from today and 20 years from today. And that's unique.
And we also want to make the point that regional gaming has revenue that is inherently more stable than Las Vegas Strip revenue and I think the market is just beginning to appreciate that. The story we've been telling, but I think people have come to recognize that, these are pretty serious properties in the markets where we are and in many cases, our properties are market leaders and that's just beginning to be appreciated.
For 2020, we'll continue to refine our outreach to all of you and to others who may not yet know our story. We remain totally focused on generating safe and attractive and accretive transactions this year, as always. I think we have demonstrated over decades that we can compete on our abilities and not just our cost of capital. That having been said, though, we have worked on a two-prong attack to boost our equity value. You've just heard, outreach is part of it. And on the debt side, continue to look for opportunity to improve our debt profile rate term, at the same time remaining committed to our investment grade rating. And remind you that we are the only gaming REIT that holds those ratings. We're going to hang on to it.
I should point out that, though, our standards are tough and many of you have heard me say that we're not in the monument building business, but rather disciplined buyers who manage our ambitions with the goal of building steady, permanent cash flow for the future. Following this philosophy, our team has delivered total shareholder return over the last six years of 13.5% compounded annually. And by the way, just to get a plug-in for -- from our major tenants, while at Penn National that was over 24% compounded over 20 years. So I think our record of delivering long-term value has been good. So we'll remain aggressive, but disciplined and -- as we look to 2020 and beyond.
So with that, Steve, I'll turn it over to you.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Great. Thanks, Peter, and good morning, everyone. Just a couple of housecleaning matters before I go into a little bit more detail. As you've probably seen by now, we did file our Annual Report on SEC Form 10-K last evening. It was effective this morning. So that's out there for anyone to the degree you have follow-up questions. Secondly, you also saw our press release which we issued this morning free open after our Board call yesterday evening, declaring the first quarter 2020 dividend at a rate of $0.70 per share, which is payable on March 20th to shareholders of record on March 6th.
Moving forward, as Peter mentioned, it was really a very quiet quarter compared to some of our most recent quarters, in that there were no non-recurring items, no unamortized financing fee write-offs, no goodwill impairment charges or anything. Really we've, in the quarter, really hit our stride as an operating business and feel strongly that we've set the template for the future opportunities for GLPI. We did modestly exceed our revenue and adjusted EBITDA guidance in the quarter and our AFFO, we actually exceeded our guidance by nearly 1%. So in by all economic measures, it was a very successful quarter for the Company.
For the full year, we actually modestly exceeded the high end of our AFFO guidance which we established a year ago when we issued our 2018 year end earnings report even though we faced the headwind of not realizing the full escalator, but just a fractional escalator out of the amended Pinnacle Master Lease with Penn National Gaming.
Just to touch on the portfolio real quickly. During the quarter, we did anniversary our lease relationships with both Boyd and Eldorado Resorts. And those relationships have been very attractive both sides. They've been mutually beneficial for both parties. I think you're going to start to see some more of those mutual benefits as time unfolds.
The first one that you're going to see and Boyd hit upon it in their earnings call last night, we did just recently get approval to move the Belterra Park facility into our owned real estate category. You'll recall, we used a bridge financing, a mortgage financing mechanism in order to satisfy concerns that were expressed at the time by the Ohio Racing Commission. In January of this year, the Ohio Racing Commission, I'm happy to report, did approve the transfer of that from a mortgage facility to an owned facility, highlighting the mutual benefit and the cooperation that exists with we and the Boyd folks.
Also, as it relates to the Boyd assets, very encouraged by their comments on their earnings call last night, as they commented on their desire to invest capital and room refresh projects in two of our assets, the Ameristar Kansas City and the Belterra Resort property. So its evidence is, to us the continued performance and the continued interest and the continued benefit of the Boyd management approach to that core property portfolio.
As it relates to Eldorado, we are continuing our discussions with Eldorado on finding a replacement for the Lumiere property. We are in the real estate ownership business. We extended a loan to Eldorado to satisfy the Missouri regulators. That loan was for the purchase of real estate as required by the Missouri regulators. During the quarter, we did release the mortgage on that facility and are, as I said, actively working with Eldorado. As you can imagine, they've had some other pressing matters in front of them over these last couple of months, but they do remain engaged in a constructive dialog on the replacement of the Lumiere property into the Tropicana Master Lease.
This removal of the master -- the removal of the mortgage on the Lumiere property in conjunction with the removal of the resorts casino in Tunica from the PENN Master Lease, I'll point out, did result in a reduction in the property count that you are seeing in our earnings release and that you're going to see in our 10-K by two properties, with no impact whatsoever on any of our rental stream or income stream or anything else I just pointed out, so that those of you who are used to our 46 property count aren't surprised by what you see.
During the quarter, we realized the full escalator on the PENN Master Lease as it anniversaried in November. We realized the full anniversary of the Meadows Master lease, the Meadows Lease as well as the catch-up payment for the partial escalator under the amended Pinnacle Master lease which we brought to your attention and shared with you on our last quarterly call. In spite of the fact that there have been some significant construction disruptions at the Meadows, which as you heard from Penn are now behind them. They invested a great deal of capital in our facility in renovating and replacing the food court, as well as building a new center bar, sports bar, sportsbook concept that has been very well received by patrons of the facility.
Moving on, Casino Queen has continued to pay their occupancy cost. There are no issues with respect to payment. As you know, they have been below their default coverage ratio. We continue to monitor the situation closely. We bring to your attention the fact that at the January 30th meeting of the Illinois Gaming Board, there was an agenda item for the request of transfer -- for the transfer of the ownership of the Casino Queen, so that the entity that we've described to you in the past has become much more active in the management and in the future will become much more active in the ownership of the Casino Queen.
We are encouraged by the performance that we saw in the fourth quarter in terms of the revenue reports that Illinois Gaming Commission did issue. I'm seeing pretty significant year-over-year improvements from a revenue standpoint. We did just earlier this week received a preliminary coverage calculations under that lease, which we are now in the process of drilling down on, because it doesn't appear that the flow-through is there based on those revenue growth realizations that they did see during the quarter. So we will be working with the new management team at Casino Queen to get a better understanding of what's going on there.
Finally, on the TRS, our management team in the taxable REIT subsidiary both in Perryville and Baton Rouge, and they continue to do a great job managing their businesses, managing the expenses of their businesses and the TRS was a very pleasant outperformer during the quarter, exceeding our guidance by nearly $800,000. We are in the process of looking at a potential modest investment land side move in Baton Rouge now that the Louisiana regulators have approved a land side move and we'll inform you as those plans develop over the coming quarters.
On the balance sheet, you saw in our earnings release that we closed the quarter with $46 million drawn on the revolver. We had gross leverage, net of unamortized issuance costs of 5.5 times, trailing 12 months EBITDA at 12.31. We had net leverage of 5.49 times trailing 12 months EBITDA. At the end of the quarter, we did have -- just under 9% of our debt was floating rate. I will bring to your attention the fact that we have recently called for the early redemption in March of our $215 million 4.875% notes due in November of this year and the $400,000 -- excuse me, the $400 million 4.375% notes due in April of next year.
I would point out for people on the call that even if we fund that on the revolver, which is not our current anticipation, we will be reducing interest expense and extending the duration of our debt. So there are tremendous opportunities for the Company for continued rationalization and continued improvement of our capital structure as a result of the flexibility that we've provided ourselves with the call for the early redemption of those notes.
There was, in the quarter, really at quarter end, an immaterial amount of activity on the ATM. Part of that was just because of settlement date convention from an accounting standpoint, but we wanted to let everyone know that we do know how to use the at-the-market equity program and have evidenced it.
Finally, we have established our guidance for the first quarter of 2020 as well as the full year guidance for 2020. Our guidance reflects the biennial variable rent resets in the four leases that are subject to variable rent resets in 2020. Those being the amended Pinnacle Master Lease, the Boyd Master Lease, both of which will be in May and the Eldorado and the PENN-Meadows Master Lease which will be in October. So we've made estimates based on input that we've gotten from our tenants, as well as the data that we follow with respect to the monthly performance of those properties, so that we feel we've conservatively reflected what those variable rent reset impacts will be for the Company in 2020.
And the last point I'd make on the guidance, we've given a range for the year. The range is on the low side, inclusive of the Eldorado escalator which has a default trigger of 1.2 times, so we're very comfortable we're going to realize that escalator. And on the high end of the range, we've included escalators for the PENN Master Lease in November, the Boyd Master Lease when it hits its lease anniversary in May, the Eldorado Master Lease of course, and then finally the Meadows Master Lease or the Meadows Lease in October.
So with that, operator, I would turn it over for questions to the assembled group.
Questions and Answers:
Operator
Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Nico Yulico with Scotiabank. Please go ahead.
Greg McGinniss -- Scotiabank -- Analyst
Hey, this is Greg McGinniss on with Nick. Good morning, everyone. Steve, all else being equal, if you were to find a sizable acquisition that actually fit your strict underwriting process in the near future, how would you think about funding that deal? What's the availability of debt financing GLPI today and is there a target leverage metric that you may try to hit for the Company through deal financing.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Yeah. Thanks, Greg, and good morning. Look, we do have leverage guidelines that the Board has set and that we have adhered to. As Peter mentioned in his comments, it's taken us -- it took us four and a half years to get to a crossover investment grade issuer, we're not going to give that up. We certainly were comfortable going into the closing on the four quarter 2008 transactions funding them with all leverage, taking our leverage up at the time to something north of 5.7. But as we said at the time, we saw a glide path, which we've achieved of getting down below 5.5, so leverage of 5 to 5.5 is where we're comfortable with, with the comfort level of stretching slightly up to 6 as we presented to the rating agencies for the right transaction depending on what the market opportunities are at the time.
We've been a beneficiary. Peter mentioned the equity value impact that we've seen throughout calendar 2019 as a result of the engagement we've entered into with you, our shareholders. You are also seeing substantial improvements in our credit spreads. Our long-dated 2030 maturities are now down to treasuries plus about 1.75 depending on which deal you look at. So the credit markets have been good to us. The equity markets have been good to us. You should think of us looking at every acquisition financing on as accretive and as leverage neutral basis as possible.
Greg McGinniss -- Scotiabank -- Analyst
All right, thank you very much, Steve. And then, Peter, I'm just curious, have you spoken with Land & Buildings after their initial public commentary? And then, what are your thoughts regarding that potential merger suggestion with VICI?
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Well, yeah, I mean, we did -- I think we've said that we had a conversation with those folks and understood what they were interested in. I think, frankly, look, our performance has been so terrific that kind of took the air out of that balloon for now. But look, shareholders are always pressing for us to do something that is in their interest. I see no particular advantage to transaction with VICI. Look, they have their plans, we have ours. My argument would always be, if you like what those guys are doing, you are on them.
If you like who we are and what we're doing, own us. And look, in the end, it's all about producing more value for our shareholders. And I guess the bottom line is, it certainly -- as we sit today, I see no advantage at all to that. And we've had no further discussions with them and we will maintain a -- Matt, I think you've maintained a healthy dialog.
Matthew Demchyk -- Senior Vice President of Investments
Yeah. I think, Greg, at the end of the day, what's really been clear over this last 12 months since we've really been out talking with people is that we've got a differentiated approach and that ultimately, to Peter's earlier comments, when you think about the value inherent in our portfolio that's unique among the three public companies and among all gaming REIT structures, there is more ground to be covered and more upside as people appreciate the merits of regional assets and put appropriate multiples on them. For us, arguably than anyone.
And then, back to Peter's other point, when you think about the platform value and the scarcity value inherent you get with our Company, with the management team with that track record and assets, you couldn't duplicate. I think that we and Land & Buildings, both would agree that there is a lot of upside in the stock. And I think that's the case they originally made, whether or not the transaction helps us get there. It doesn't seem like it's necessary if you look at the performance year-to-date.
Greg McGinniss -- Scotiabank -- Analyst
Well, thank you very much.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Thank you.
Operator
Our next question comes from Joe Greff with JPMorgan. Please go ahead.
Joe Greff -- JPMorgan -- Analyst
Hey, guys, just two quick questions. Thank you for all the information in both the release and in these prepared comments. Kind of first question, the old tried and true question of, can you talk about what some of the things that might be in your pipeline broadly, how that pipeline might be in terms of size and activity wise, how does that compare to the last couple of quarters? And then just my second question, point of clarification, Steve, on your guidance. It doesn't appear to us that you're factoring in any benefit from calling in those two pieces of debt. Just to clarify that. That's all for me. Thank you.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Yeah. Joe, let me start with the latter. You are absolutely correct, we are being I think reasonably conservative in our guidance as it relates to interest expense. We are obviously watching the capital markets, we're seeing tenors that seem to be available to issuers, including ourselves that probably a year or two ago, we would have never thought about or even considered. But given the long duration of our assets, we're really looking at all options with respect to financing on a more permanent basis obviously than the revolver, the redemption of the 4.875% and 4.375% that we've called. So you are correct in terms of the guidance.
Your earlier question in terms of the pipeline, look, I commend everyone on this phone call, everyone has a, in ever more creative way of asking the same question and you'll get the same response from us. I mean, we look at -- as Peter has said, we look at everything that moves. We have tremendous relationships with the leading regional gaming operators, PENN and Eldorado and Boyd in the United States. This is an industry that is continuing to consolidate in spite of what Josh and Keith might have said on their phone call in terms of their focus on the operating leverage that comes with sale leaseback financing transactions.
The experience that we've had with that management team over the year plus now that they've been a tenant in our buildings, has proven to them that we are a facilitator. We're not an obstacle, but we really are a business partner and a facilitator in helping them grow their business. And I expect them to continue to see those opportunities and explore those opportunities. So I would leave you with the thought that there is really nothing different. Obviously cap rates have compressed for us and our peer sets. Our ability to pay has grown and you should assume that operators and sellers are aware of that.
Joe Greff -- JPMorgan -- Analyst
Thank you for your thoughts.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Thanks, Joe.
Operator
Our next question comes from David Katz with Jefferies. Please go ahead.
David Katz -- Jefferies -- Analyst
Hi, good morning, everyone.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Good morning, David.
David Katz -- Jefferies -- Analyst
So two questions, if I may. First, since the last quarterly conference call, we've seen some deals that have occurred and we frequently asked whether strip assets or larger scale assets would be of interest, and the answer is, usually at a price. If we look at a couple of those deals and you can surmise that I'm speaking specifically about things like Bellagio. Are the occurrence of those deals, are those positive for you? Are those good for the business model and are they good for you?
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Well, let me take a quick shot at that. I know there's some opinions around the table, and I encourage others on our team to speak up. But look, I think it's terrific. What it underscores is that an institutional source of capital has looked at these unique, in that case Bellagio, it's a unique property to be sure and made a judgment that that's a highly valuable asset that makes sense for the long term. And I think we all sort of stand in a reflected light if you will, of that transaction.
Look, I think this has always been about, from the time we started this market segment, a gaming REIT, it was always about getting the market to appreciate that these are special assets with long-term enduring safe value and anything that happens in our space that suggests that these are important is helpful. So we're delighted, I can't say we would have paid what those folks paid, but look, it makes sense, it's unique. Matt, do you want to comment? I know you've spent some time with this one.
Matthew Demchyk -- Senior Vice President of Investments
Yeah. I think you put it really well, Peter. And I'd just add, I mean, there is a validation of the asset class for sure, and I think as people dig in more on the institutional side over the years, I mean, they are trying to solve for enduring cash flow and put a price on that. And when you dig into the merits of the portfolio like ours, ultimately there is clearly the case to be made that lower volatility of cash flow is more valuable over time and also that this concept of scarcity value is really relevant.
In other parts of real estate, it's extremely important to have barriers to entry and that's one thing we don't have as much of in Las Vegas. There's a high land cost, but you can build with capital. Some of our assets, I mean when you look at the State of Ohio and the fact that the metes and bounds of those actual locations are in the state constitution, there is some enduring value there that ultimately as people dig in will be recognized. And this is a step along that path. How long it takes to get to the end of that path? We don't know, but a good signpost for sure.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Yeah, David, the short answer to your question is, those transactions are absolutely beneficial to our asset class. There is no question in my mind that as institutional capital continues to look at opportunities -- as Matt mentioned and as Peter mentioned, there will continue to be a greater and greater appreciation of basically the toll bridge nature of these regional gaming facilities and what they mean for state governments. So everybody gets caught up first in fit and finish, right. How pretty doe the thing look and then secondly, how does it perform. And we've always been on the performance side.
David Katz -- Jefferies -- Analyst
All right. And my second -- thank you for that. And my second question, certainly the stock performance shouldn't be lost on anyone. It's certainly not lost on me and hard-earned on your part. There is still somewhat of a differential in sort of your trading level, I believe, relative to the two others. What's your opinion as to why that exists? And what you intend, what strategies or thoughts you have about how you can continue to close that gap?
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Yeah, I need to correct you. I do think we are with the middle of the pack, we're not at the head of the class. But I think based on the performance that we've been able to post over the course of calendar 2019 and here into 2020, we're on the same lap with everybody. We're not quite at the same cap rates as one of our competitors, but we're on top of and depending on what metric you use, actually through one of our other competitors. So I think you are starting to see the benefits of what Peter mentioned, which is really the significant engagement that we've undertaken with respect to investors, both on the equity capital markets and on the debt capital markets side.
So I would disagree a little bit with your conclusion, but your point is well taken. It's not over. It's a work in progress and it's a work that we continue to be focused on day in and day out in terms of continuing to educate investors on the value of the cash flows that these regional toll bridges produce in these markets.
Operator
Thank you. Our next question comes from Rich Anderson. Please go ahead.
Richard Anderson -- SMBC Nikko Securities America -- Analyst
Hey, thanks and good morning. Happy to join the call. So when I think of what's going on in the gaming REIT space, I feel as though you and others are basically exploiting an inefficiency and exploiting comes with a negative connotation. I don't mean it that way. But there is a widespread between cap rates and cost of capital and you're able to create accretion. It reminds me of a long time ago in the REIT space me being a REIT guy and not a gaming guy, where you had to spread investing opportunity which ultimately went away and now REITs are having to develop or do other things to create accretion.
So my question is, if you close your eyes and envision a similar chain of events happening here, cap rates coming down, property values up, all good, but your stock price and interest and rate environment don't adjust at the commensurate pace, what would you be inclined to do? Would you let the portfolio marinate, would you adjust your underwriting, would you look to other asset classes? Could you redevelop and scale? I'm just curious if it's something you're thinking about now? Or if it's something we're just not worried about today and we'll worry about it when that time comes?
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
We're always looking ahead. Any suggestion that somehow we're sleep, and you're not implying that of course, but, look, we're always looking at what the future might hold. Kind of hard to react to something that has not yet occurred. We get the question constantly, what else might you guys do. And, look, we're going to stick with gaming as long as gaming is where we can be. And I think there is still significant runway over the next years before we really have to worry about being someplace else, really do.
There are some states that may approve gaming. I know Georgia is one for example. We'd love to be players in that field, as an example. And we maintain, and I'm looking down the table at Steve Ladany and Steve is burning the midnight oil around various possibilities, things that we're looking at, trying to determine what we can make work. That's a daily process. So I think we're a good bit away from throwing in the towel and imagining we've got, what do you think Steve?
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Yeah. Rich, first of all, welcome you and Jay to our coverage universe and welcome you to our asset class. Thanks for all the effort and energy you've put into moving up the learning curve. The answer to your question is pretty easy. It's really all of what you enumerated. Our responsibility as a management team is first and foremost to prudently manage the balance sheet and efficiently and accretively deploy capital, it's as easy as that.
And given the stakes that we all have in terms of ownership here in the Company, particularly Peter and his family, as you've heard me refer to them as our shareholder and Chief, as opposed to our Chairman or Chief Executive, you can rest assured that that same discipline is going to be applied to all of the alternatives that you mentioned, developing or enhancing the existing portfolio, look at opportunities beyond regional gaming, looking at opportunities for development as this asset class continues to mature.
Richard Anderson -- SMBC Nikko Securities America -- Analyst
Okay, great.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
That's why I made the point. Rich, if I can just underline it again, that we are very aggressive folks and those who have followed us for years, but we're not in the monument building business. It's why I said that there is no deal we have to do, so that, in the end, it's simply about building value, value, value. Steve said it and it's true. I'm a shareholder before I am anything else. Shepherding our investments, being smart is all that matters to me. It isn't in the next deal, it simply is not trying to look good, we get a bonus because we added three more properties that added nothing to the cash flow and nothing to maybe even increase the risk profile. We're just not in that business. The folks who generally stick with us are people who value what we do and value our investment philosophy. So for better for worse, that's what we sell. Aggressive prudence.
Richard Anderson -- SMBC Nikko Securities America -- Analyst
Okay, great. Okay. Second for me is, in our launch report we kind of mentioned sports betting and online gambling as sort of a courtesy to pretend like we knew what we are talking about, and I don't know that it's playing a major role in the underlying business of the bricks and mortar operations of your operators. And you can correct me if I'm wrong on that. But then you have the Penn Barstool kind of connection and the term omnichannel was brought up. And I'm just wondering what's the next generation phase of the business. Do you think online gambling and sports betting becomes a bigger part of the conversation over the next several years? And is that a good thing or a bad thing from the standpoint of your operators and what is GLPI willing to do to participate or adjust?
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
No, Rich, first of all, from a sports betting perspective, every one of the operators that have reported to-date and I'm sure the operators that have not yet reported are going to talk about the lift that they've seen in their buildings as a result of sports betting, where it's in entitled. Whether it's the incremental food and beverage sales, whether or not it's just the incremental visitation, the incremental gameplay, the incremental table games, lot play that comes from more people and a newer demographic coming into the building.
So the impact of sports betting in those markets where it's been approved in Pennsylvania, in Indiana, in Mississippi, in West Virginia, New Jersey, it really has been a nice uplift for these businesses. In terms of the Internet piece, the Internet piece as we've talked in the past, I mean, the first state to approve online casinos has been New Jersey, now others have followed, Pennsylvania, in particular. But in the New Jersey model, those operators of the online casinos, the online sports books are tied to the casino facilities.
And as we've said in the past, they are tied to the casino facilities because it's already an infrastructure that can be regulated. It's an infrastructure that is easier to tax and it's also an infrastructure and more of the real estate investors on this call will come to appreciate this, gaming regulators and gaming operators do recognize the social responsibility because there is a small portion of the population that gambles beyond their means and responsible gaming is an issue in every state in every jurisdiction and keeping gaming whether it's on the Internet or in a brick and mortar facility with those people that have those experiences, that have those databases, that have those backgrounds in terms of KYC, know your customer, are always going to be the lead as these new states come online. So I don't foresee -- if I heard you correctly, you're asking the question, is there an Amazon risk in our business.
Richard Anderson -- SMBC Nikko Securities America -- Analyst
Correct.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
There is not from -- two respects. One is the regulatory framework I just mentioned and two is gaming does remain a very social and a very interactive activity. And I think New Jersey has proven that as the longest dated now online casino facility and it has proven a tool to identify and attract incremental customers to draw into the physical facility.
Richard Anderson -- SMBC Nikko Securities America -- Analyst
Okay, great. And I think my colleague Jay has one follow-up question.
Jay Kornreich -- SMBC Nikko Securities America -- Analyst
Hi, guys, thanks for taking the question. Just real quick, does the 1.77 rent coverage for the Pinnacle lease include the accounting adjustment that was discussed with Penn last quarter, which rose the coverage above the escalator threshold or is this number not inclusive of that?
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
No, that number would be flowing through that on a trailing 12 basis based on the escalator when it was realized in April, May -- end of April of 2019.
Jay Kornreich -- SMBC Nikko Securities America -- Analyst
Okay. All right. Thank you.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Sure, Jay. Thanks.
Operator
Next question comes from Robin Farley with UBS. Please go ahead.
Robin Farley -- UBS -- Analyst
Great. Thanks. I have two questions that are kind of related to topics and already covered. But just a little bit of a different angle. One is -- first is, are there other transactions that we've seen out there in the last three to four months? Are they at multiples that are so high that they are actually raising seller expectations to a point that it would make it harder for you to do something that you might have been able to do six months ago?
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Look, Robin, I don't think -- I can't speak for anybody and I'm not going to stereotype. But I think if there are any people on the planet that compare their real estate to the Bellagio on the Las Vegas Strip, I would hope I can count them on -- the digits on one hand. These are very unique assets. These are very unique circumstances. Both of these partnerships that -- yes, sellers will try, more importantly bankers will try and convince sellers that if they are retained as their banker, they can get them those multiples. But I would not look at the price discovery from Bellagio as being illustrative of the next two or three transactions by any stretch of the imagination.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Yeah, I'll say flat. We're not seeing that yet. I mean, the things we're looking at, we are not seeing that kind of reaction.
Robin Farley -- UBS -- Analyst
Okay, great. That was helpful. Thanks. My other question is also related to the Penn deal with Barstool, but I guess what I want to ask it is, we've kind of seen a precedent with Park MGM and MGP where improvements or expansions like non-gaming elements are then kind of sold to a gaming REIT, right, sort of monetizing those additional pieces. So I'm wondering, if the physical part of the deal with Barstool where they're talking about adding restaurants and bars and if that creates additional cash flow, is there opportunity then for GLPI to sort of buy that in the way we've seen this precedent non-gaming deal as -- when a property is expanded or renovated? Is there opportunity for that if the Barstool deals come for you?
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
No, it's a fair question. I would not by any stretch of the imagination compare the conversion of the Monte Carlo into the Park MGM and anything that we would ever see in the regional markets or anything that the Barstool announcement would precipitate at Penn. What we have seen from them, I mentioned in my earlier comments, they've been rolling out new food courts. Now, I think they are up to their fifth. They just opened the new eatery out at the Meadows and they are continuing to invest in their businesses.
We have had conversations with them and I know they've acknowledged it in the past as well, to look at opportunities to maybe grow these businesses by adding hotels where there aren't hotels, by adding RV parks where there is excess land. Those are opportunities for us to put capital to work. But quite frankly, we become the indirect beneficiary when they do invest in their businesses. And that's why I commented after listening to the Boyd call last night, by going back in and doing room renovations in the hotel at Ameristar Kansas City and the hotel at Belterra Resort in Indiana, we over time will be the beneficiary. They obviously will be the biggest beneficiary or they wouldn't be undertaking those projects. They see value there, which will allure to them and ultimately to us.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Look, I think part of the answer is, we're not going to -- anything they can fund internally of this relatively modest stuff, they're going to do. A hotel or something of that magnitude we are at, we have had those kind of conversations. We are looking at some of the excess land in various markets. That sort of thing does make some sense. But I think they will continue to -- which makes us very happy. As Steve said, they want to put money in our properties, god bless them.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Now if Barstool becomes a Universal Studios kind of brand and they started expanding massively with Barstool branded hotels or those kinds of things, we can all aspire.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
They've got some pretty, some aggressive [Speech Overlap] around Barstool, so anything is possible.
Robin Farley -- UBS -- Analyst
Okay. Great. Thank you.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Thanks, Robin.
Operator
Next question comes from Spenser Allaway with Green Street Advisors. Please go ahead.
Spenser Allaway -- Green Street Advisors -- Analyst
Thank you. Obviously, as you guys touched upon in your prepared remarks, guidance assumes a range of outcomes regarding the leases that are subject to the rent resets in '20. But can you guys just provide a little bit more color on your confidence in achieving those resets based on the operators today, the 720?
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Yeah. Good morning, Spenser, and welcome you as well to our coverage universe. You've invested a lot of time and you've visited several of our properties and we thank you for it and appreciate those efforts. In terms of the escalators, the resets, quite frankly, that's why we disclose the coverage is on a four wall basis. It's one of the many reasons I should say why we disclose the four wall coverages that we do for each of our leases. So that everyone on this phone call can sort of make their own value judgment based on where they're trending, what the likelihood is.
You saw us last year incorporate guidance which on the low end had no escalators, on the high end had all of the escalators. We've moderated that a bit this year, just based on the performance of one particular master lease. So I think the answer will lie somewhere in between, but we feel very comfortable that the balance that we've set with the high and the low estimate are reflective of the likelihood of realizing those bumps.
Spenser Allaway -- Green Street Advisors -- Analyst
Okay. And then maybe just going back to an earlier question on Land & Buildings position in your stock. Can you -- aside of M&A, but maybe can you just talk about any potential changes to governance, or composition, and/or G&A that may have been discussed or suggested by the activists?
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
There's nothing that -- I'm just going to think, is there anything. No, really no changes anticipated in any area and we just -- yeah, there are no specific answers. So that's probably the best answer.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
And Spenser, one -- in Peter's opening remarks, he commented on the engagement that we've had throughout 2019 with all investors. So there is nothing unique to Land & Buildings. We do interact with and we very much appreciate the dialog that we've had with a very an ever-growing number of investors and really factor everything into account and use that dialog as an opportunity to just be better informed as we continue to manage this business.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Yeah, you had asked about governance, really there is nothing that has been requested. Actually I think in most measures, we are pretty well rated. For governance, we don't have any significant issues anywhere. Do we -- Brandon, I'm looking at our General Counsel.
Brandon J. Moore -- Senior Vice President, General Counsel & Secretary
No, I don't think we have any specific governance issues that have been raised by shareholders to us in the past quarter. One of the holes that we did have, I think, was the lack of a female on our Board, which because of the regulated nature of what it takes to be a Director on our Board, it took us quite some time to find qualified candidates, but we recently did add a female Director to our Board and we are very excited about that. I think that was the biggest request that we had from shareholders that we've now filled.
Spenser Allaway -- Green Street Advisors -- Analyst
All right, thank you.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Thank you, Spenser.
Operator
Next question comes from Barry Jonas with SunTrust. Please go ahead.
Jeff Stantial -- SunTrust Robinson Humphrey -- Analyst
Hi, guys, this is Jeff on for Barry. Thanks for taking our questions. First off, you guys have been fairly disciplined in terms of setting the terms of your leases. For future deals, could you maybe just walk us through what areas you are maybe more flexible on and which are less so?
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Look, Barry, it -- every lease is a unique negotiation, is a unique dialog, because we want to be the landlord of choice, we want to be the business partner of choice for our tenants. So it's difficult to stereotype. I would point back to my earlier comment, anything that we do needs to be accretive. If it's going to be of a lesser credit quality because obviously now we've gotten a portfolio of tenants with multi-billions of dollars in equity market cap, in most cases, not all, but certainly with the master leases. So anything that we do, if we're going to move out on the risk spectrum, we're going to be -- we're going to expect to be compensated for it. So you're asking a hypothetical that really is impossible to comment on.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
I'll just add, Barry. If you look at what we've done historically and you apply it to the current time, our goal is really to get the highest IRR possible and if there win-win ways that we can tweak aspects of the lease that we and our tenant wins, we'll be happy to do them. But it all comes down to the economics like Steve said.
Jeff Stantial -- SunTrust Robinson Humphrey -- Analyst
Great, thanks. Lastly from us, you've mentioned some international opportunities in the past. Is that still something you are considering?
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Yeah, I mean, bottom line is, we look at -- as I said earlier, we look at any opportunity to accretively deploy our shareholders our capital.
Jeff Stantial -- SunTrust Robinson Humphrey -- Analyst
Great. Thanks. That's all for us. Appreciate all the color, guys.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Thank you.
Operator
Next question comes from John DeCree with Union Gaming. Please go ahead.
John DeCree -- Union Gaming -- Analyst
Hey, everyone, hanks for taking the questions. And I think you've address them all at least twice, but just to pile in here on kind of Las Vegas Strip versus regional question. Peter, you've kind of spoken at length about the less cyclicality and more resilience of regionals. And when we look at kind of valuation for the Las Vegas Strip, just kind of wanted to get some clarity on your thoughts, if there was an opportunity that Las Vegas Strip was accretive, would you be interested in moving in there or stay focused on regionals? And then I guess it's kind of a risk-reward question. Would you approach kind of Las Vegas Strip with a little bit more stringent underwriting standards, given the kind of resiliency you already have in your kind of existing regional portfolio?
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Look, I think, you've answered it with a lot more caution. And remember, it's one thing to operate a spectacular property, which we built and have in, say, in Toledo, Ohio or Columbus, Ohio, no hotels. As compared to, say, a 4,000-room hotel property along with other entertainments, as you know, nightclubs and everything that goes with it, you can imagine the -- we did much, much more coverage to be satisfied, that we'd be safe in a downturn. And we know that the downturn will have a profoundly larger effect in a Las Vegas Strip property than it would in your neighborhood store. That's been demonstrated. It's pretty clear. And so, yeah, I mean, we'd be thrilled to look at a good property, but again it would be with eyes wide open. And we would like to think some sensible underwriting approach. But, no, we will look at anything, I sometimes say, many are called, but few are chosen.
John DeCree -- Union Gaming -- Analyst
Very clear. That's it for me, Peter. I appreciate the additional color on that one. Thanks a lot.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Thank you.
Operator
Our next question comes from John Massocca with Ladenburg Thalmann. Please go ahead.
John Massocca -- Ladenburg Thalmann -- Analyst
Good morning.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Yeah, good morning.
John Massocca -- Ladenburg Thalmann -- Analyst
So you kind of mentioned in your prepared remarks that you would want to fund any potential future acquisition activity on a leverage neutral basis, but I guess given the recent performance in your stock, would it not make sense maybe to kind of over-equitize any transaction to kind of bring leverage kind of well below target levels?
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
John, that was in response to earlier question. It wasn't in the opening remarks. But your point is well taken. The bottom line is, we are at leverage levels for the Company given the cash flows that our assets produce, that we are very comfortable with. I don't lose any sleep at night over the balance sheet of GLPI. So we -- your point about over-equitizing, look, everything is a facts and circumstances determination based on what market environment exist at the time. And right now, as I did say in some of my opening remarks, you're looking at long-dated opportunities in debt capital markets that if you'd ask me two years ago might be available to GLPI, I would have looked at you like you're crazy. So you should assume that we will look at all capital structures with respect to both the existing balance sheet as well as prospective acquisitions.
John Massocca -- Ladenburg Thalmann -- Analyst
Okay. And then just one quick detail question. Can you maybe quantify the variable rent change assumptions that are baked into 2020 guidance?
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
We have not drilled down. We are not disclosing that only because we do not want to front run our tenants and more importantly, we don't want to say something that our tenants come back and suggest that we should not have disclosed. So what we've guided people to is there are monthly revenue reports by property in every market in which our portfolio is located, except for Nevada, Mississippi, and Colorado, that you can get a very good sense of what the resulting variable rent resets will be. We do maintain a database for each lease looking at the monthly revenues and feel that we have very good insight into those. But again, prefer not to front run our tenants.
John Massocca -- Ladenburg Thalmann -- Analyst
Okay. But just to clarify, that is some level of change is baked into your guidance?
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Yeah, I'm sorry. Yeah, absolutely.
John Massocca -- Ladenburg Thalmann -- Analyst
Okay, that's it for me. Thank you very much.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Thanks, John.
Operator
Our next question comes from Daniel Adam with Nomura. Please go ahead.
Daniel Adam -- Nomura -- Analyst
Hi, good morning, everyone. Most of my questions have been answered, but if I could just ask one on the TRS Properties. I'm wondering if you have a sports betting strategy in place should Maryland and/or Louisiana pass legislation? My sense is that Maryland, in particular, could have draft regulations approved before November of this year. Thanks so much.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Thanks, Daniel. The answer, in Maryland, any expansion of gaming has to go to the voters. So, right now there is a bill in the legislature in Maryland that would change that, but to-date, any change in gaming must go to the voters. If this were the referendum question that were on the ballot, it would allow for regulatory approval of sports wagering in the future. So it's not as cut-and-dried as your comments may have suggested. But the answer to your question is, absolutely.
With respect to both of our TRS assets, Louisiana and Maryland, as you can imagine are on very different tax, what happens in Baton Rouge is not the same as what happens in Minneapolis with respect to enabling legislation for sports wagering, but we have had several discussions. Our property management teams at both locations have been engaged, as you can imagine, because the number of the vendors are very actively out there looking at what states will be next and how they can participate.
Daniel Adam -- Nomura -- Analyst
Okay, great. I appreciate the color.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Thanks, Dan.
Operator
Our next question comes from Jordan Bender with Macquarie Group. Please go ahead.
Jordan Bender -- Macquarie Group -- Analyst
Good morning. Thanks for taking my question. So we saw JV forum during the quarter in this space and you guys had mentioned that you don't need a larger asset, but if there is a value, is this something that you would entertain without flexing up the balance sheet? And then as my follow-up, could you quantify the investing for the move to land in Baton Rouge? Thanks.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Yeah, I'll take the latter question. We've told the people that are involved in it, that it's got to be under $20 million, because there is no real revenue growth opportunity. It's really all a matter of being more efficient in how we deliver services down there and coming off of a three story riverboat to a purpose-built land-based facility. So that's an easy question.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Yeah, there is definable cost savings, but they are limited. They're in -- not insignificant, but that's all. We see no revenue growth going land side, nothing material. As to the joint venture notion?
Matthew Demchyk -- Senior Vice President of Investments
Yeah, I'd say, historically -- this is Matt. Historically, we've been creative with our acquisitions and the structure could play a role in the future if it made sense, but we certainly would underwrite things with an appreciation for a look through leverage. I think to the point of your question. And also with an appreciation of any appropriate complexity discount or other kind of incidentals [Phonetic] that would come with that for our structure. But it is an interesting avenue for potential transactions in the future.
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
I mean, the bottom line is, we've talked about it.
Jordan Bender -- Macquarie Group -- Analyst
Okay. Thanks, guys.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Thanks, Jordan.
Operator
Thank you. We've come to the end of the Q&A session.
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Well, that's pretty finite and sudden, but I hope this has been helpful to all and we'll look forward to speaking with you all again next quarter. Thank you so much.
Operator
[Operator Closing Remarks]
Duration: 58 minutes
Call participants:
Joseph Jaffoni -- Investor Relations
Peter M. Carlino -- Chairman of the Board and Chief Executive Officer
Steven T. Snyder -- Senior Vice President and Chief Financial Officer
Matthew Demchyk -- Senior Vice President of Investments
Brandon J. Moore -- Senior Vice President, General Counsel & Secretary
Greg McGinniss -- Scotiabank -- Analyst
Joe Greff -- JPMorgan -- Analyst
David Katz -- Jefferies -- Analyst
Richard Anderson -- SMBC Nikko Securities America -- Analyst
Jay Kornreich -- SMBC Nikko Securities America -- Analyst
Robin Farley -- UBS -- Analyst
Spenser Allaway -- Green Street Advisors -- Analyst
Jeff Stantial -- SunTrust Robinson Humphrey -- Analyst
John DeCree -- Union Gaming -- Analyst
John Massocca -- Ladenburg Thalmann -- Analyst
Daniel Adam -- Nomura -- Analyst
Jordan Bender -- Macquarie Group -- Analyst
