Greetings and welcome to the Gaming and Leisure Properties' Fourth Quarter 2016 Conference Call. At this time all participants are in a listen-only-mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder this conference is being recorded. I'd now like to turn the conference over to Danielle Guterding. Please go ahead Danielle.

Good morning. We would like to thank you for joining us today for Gaming and Leisure Properties fourth quarter 2016 earnings call and webcast. The press release distributed earlier this morning is available in the Investor Relations section on our website at www.glpropinp.com. On today's call managements' 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 risk and uncertainties that may cause actual results to differ from those discussed today. Examples of forward-looking statements 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 estimate 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 these forward-looking statements contained in the company's filings with the SEC and the definitions and the reconciliations of non-GAAP financial measures contained in the company's earnings release. On this morning's conference call we are joined by Peter Carlino, Chairman and Chief Executive Officer; and Bill Clifford, Chief Financial Officer of Gaming and Leisure Properties. And also joining are Steve Synder, Senior Vice President of Development; Desiree Burke, Chief Accounting Officer; and Brandon Moore, Senior Vice President, General Counsel and Secretary. Now I'd like to turn the call over to Peter Carlino. Peter?

Good morning everyone and welcome to our year ending call. First I'd like to say that as we think about this past year it's been a highly transformative terrific year for Gaming and Leisure Properties. We have built I think in a very strong order a terrific company, we had great results, and we remain pretty motivated as we look ahead what we think we can do with this platform overtime. As usual not a whole lot of moving parts to report, the numbers kind of speak for themselves. Obviously there is a high degree of predictability in this business. I can tell you that we remain focused and looking at new opportunities always, always with caution in mind you have followed us for many years you understand that is it's never hubris or ego. It’s all about what can make sense in building value for shareholders. That is our first, second, third and total motivation. So, with that I am going to turn it immediately open to questions and see what we can -- see what you folks would like to know. So go ahead operator.

Thank you. [Operator Instruction] Our first question is from the line Felicia Hendrix with Barclays. Please go ahead with your question.

Hi, good morning.

Hi, Felicia. Morning.

So, Penn just said on their earnings call that they are not going to hit their escalators this year. So, I guess that would affect you in November, right?

Right.

When you are kind of -- it could affect the year backwards. So, and I know it’s only one month but is that contemplated in your guidance?

Yes, our guidance does not have any escalator for Penn, which would take into effect actually two months, November and December.

Okay November. Okay, that’s good. And then just bigger picture, so I guess we all have more clarity now around the Ceasars restructuring, and I am just wondering how you are thinking about opportunities coming from the CEOC, OpCo/PropCo transaction?

Well, the quick answer is it’s impossible to know Felicia. You can imagine that we stay very, very, very close to that situation, but have allowed it play out as it has. And so we have to see where all the chips fall. They can use that fund and then we’ll see. Bill, do you any thought about that?

I would just add that I think they put out, probably the most telling thing which indicates that they are on track is the fact they put out an 8-K indicating that they got their PLR from the IRS. We haven’t seeing the PLR, but candidly I’ll be honest and say I am impressed that they were successful getting that through with some of the what I thought would have been some challenging aspects to that request but obviously the PLR is done and congratulations to them. In terms of opportunity for us, I think that’s going to be on hold for a while clearly with the now the momentum they have and the direction that they are going in and their full speed they had progressed relative to getting -- coming out of the -- giving the bank plan approved and going through the regulatory process. I think our opportunities are pretty limited in the interim and I think most of our opportunities will avail themselves, if there are any opportunities. Once they have completed their transaction, which I understand they are targeting for June with an outside date of the end of the year. So, I think they have a lot of work to get done between now and then. I am not going to give any commentary as to the feasibility of their deadlines or their dates. But clearly they are moving forward and we are going to continue to stay vigilant I mean vigilant is not quite the right word, but we are going to be continue to pay attention. And offer certainly be willing to be helpful if there should ever be an opportunity for us to get involved.

Yes sufficiently big. I mean look they are going to end up with a very highly levered products in the hands of a lot of people who aren’t going to want to hold that product. So, who knows, that’s the quick answer, who knows. You know that we’ll be alert as it comes fall off the tree, we’ll be there to pick them up. So, that’s about all we can say.

Okay. And just one more and I know you guys just hold the real estate, but do you have any comments on the meadows the performance in the quarter just according to the data that comes from the state was lower than we expected?

We don’t know, I mean honestly we are a little bit we have to kind of wait for the Pinnacle earnings release and whatever commentary they are going to give on that and certainly would be inappropriate even if we had a comment or had our information to share that at this point give that it’s their operations and their property. So, I am going to beg off on that one.

Okay, that’s fair. Thanks a lot.

I’ll say this, in my conversations with them more broadly have been that they’re very pleased with the acquisition and are making some significant improvements and feel really good about it. So I’d be shocked frankly if we get to their call and we don’t hear something along those lines that they’re quite happy with it.

Great, thanks.

Your next question is from the line of Joseph Greff with JP Morgan. Please proceed with your question.

Good morning, guys.

Good morning.

I was hoping you guys can talk about in your more recent discussion with sellers of gaming real estate, how the two issues of higher interest rates and the prospect of corporate tax reform impact those discussions?

I think we’re just finding out now what that going to mean. Look our conversations with various people go on. But I think rationally depending upon what the Trump administration actually does or the Congress actually gets around doing, I don’t know I’d be kind of cautious by the seller.

Right I think I would summarize it this play which is that companies that we’re thinking about doing a transaction with us relative to how they might do a recapitalization. Look we are effectively saying well we really need to understand what the new rules are relative to what the corporate tax rate is going to be, what the deductibility of interest is going to be, et cetera, et cetera there’s a number of things that are being worried about in the public domain that may or may not come to be and I think candidly any prudent person would say let me understand what the new ground rules are before we start continuing the transaction. On the other hand if there’s just like what we’ve probably said a number of times is that if you have a seller who’s motivated to sell or wants to do a transaction for reasons other than optimizing or great price or taking advantage of tax situations those sellers are still going to be willing to talk to us. Now obviously that reduces the field dramatically in terms of the number of people that are what we can expect to get something done in the next several months. But I would expect that that’s probably true in a number of M&A transaction environments in terms of people trying to understand what implications of the revised tax code might be.

Good, enough. Thanks guys.

Your next question is from the line of Cameron McKnight with Wells Fargo. Please go ahead with your question.

Good morning, thanks very much.

Morning.

Question for your Peter or Bill, what sort of drop is contemplated at Charles Town in the guidance as you’ve thought about rental coverage for this year and the sensitivities around that?

Well we were just listening it on the Penn call and we understand that they did disclose what happened for the two months in terms of the rent coverage at 1.68. I would caution people not to be too alarmed by that because those are the seasonally two of the weakest months of the year. And every year that two months period versus the rest of the year is lower. Our guidance is we coordinate that with Penn so our guidance ties in to their guidance. And for good reason, the reality is they have certainly all of the information, they have the day-to-day understanding what’s going on. We get information but we really get it at the public level. So short of us thinking and I don’t really want to -- first of all I'm not in a position to comment on their guidance but secondly, short of us feeling that their guidance is completely out of line, which I don’t know how I would even come to that conclusion based on the information I have. But short of that is our expectation that our guidance will pie into what they’re guiding. And therefore having individual comments is a little challenging. I take them as their words, what they had on the call, which is that Charles Town is doing really well for the -- since the opening of National Harbor and doing better than their expectations. I don’t have information relative to how they’ve incorporated that outperformance into the outer months of the guidance. So I don’t know if they’ve left that at what they originally expected the next 10 months to be or whether they’ve incorporated and seeing some of their improvements or better than expected results they’ve seen in the first two months whether they’ve allowed for that in their guidance or not. So I know that's kind of a caught out and I apologize for that. But the reality is where we are to a certain degree can reliant on their guidance. And candidly short of us having better information I think that's probably the most prudent approach for us to take relative to giving our guidance going forward.

I think they’ve said they expect to end the year somewhat better than what they reported in those first two months. So we are expecting that they could as we saw last year have an upturn in December, maybe not to 1.8 but it’s going to move well in that direction. And I think we're optimistic or at least encouraged that the next year when all the -- everything comes together that they're going to be closer or they maybe there. So we haven’t thrown in the talent not yet, but still answered it perfectly, we obviously don't have that crystal ball.

Got it, thanks very much. And then just to circle back on your earlier comment Bill, did I hear this correctly that since Seizures came out with their private weather ruling that conversations around deals have cooled off a little bit is that fair to say?

No they're not related. In other words the cooling of deals to the extent that it was structural transaction with corporations is more related to the election of Donald Trump and the issues around what's in the public domain relative to tax reform. So that's that. The Seizures thing is simply our probably we're recognizing that with the momentum in their transaction that we don't see. We think that it's going to take them getting through process before we would potentially have an opportunity related to the Seizures assets. And as Peter touched on even when they're done, we don't believe that the Seizures Real Estate Group is a Group that really long-term dedicated REIT investors to put it that way.

Got it. Okay thank you that's very helpful.

Our next question is from the line of Carlo Santarelli with Deutsche Bank. Please proceed with your question.

Hey, guys thanks for taking my question and good morning. If we just thought about potential opportunities out there, and I know you're not going to comment on any kind of specific transactions, but one of the things I was curious to get your view on is, is when you have a property or properties that you're potentially looking at and you do see the potential for a competitive threat down the road. How much comfort do you have given your experience and maybe going forward on a transaction like that where there could be future ambiguities created by competition?

Well I think that's the big part of what is our strength here at GLPI relative to what -- it gives us an advantage relative to what I'll call non-gaming REIT. Certainly people in the gaming industry have an understanding and I'm not going to infer that we have particular insights that other people who are constantly with the gaming industry don't understand. But I do think that we have passed of opportunities to be involved in market where we saw long-term threat that we're going to have a meaningful impact to the individual properties. And so for us to do one-off type properties in tough markets, we look we definitely will treat those differently than if it's a portfolio of assets or if it's in a market where we see a very stable customer base and a stable outcome or outlook for the industry. Certainly I'm not going to comment on the individual markets that we passed on, but I can think of at least three where there has been three guys that thought they might offer us up their land and buildings in a market that we just quite candidly passed on. And so I think that's part of being long-term oriented, caution and recognize that the first thing we want to do is add to shareholder value and not to detract and even though something might look great for the first few year until something bad happens. We recognize that we're in this for the very long haul. Obviously when we enter into 35 year well basically 10 or 15 with renewals out to 35 or 30 years, we have got to take a view that what’s the competitive landscape looks like over the next 20 years as an example or 10 to 20. And so you know I think doesn’t mean we’ll always get it right, but certainly going into the situations where you know that there is real challenges to the market is probably something we’ll be staying away from. Have stayed away from and we will continue to stay away from.

Thank you.

Our next question comes from the line Thomas Allen of Morgan Stanley. Please proceed with your question.

Hey, good morning. Quick question, just what was the rationale with increasing the dividend slightly? Thanks.

Well, our dividend policy has always been to payout 80% of our AFFO as a dividend, we expect candidly the dividend increase reflect our expectations for 2017 in terms what our AFFOs going to increase by and that’s the function of obviously the Meadows transaction, which was not incorporated into the fourth quarter, as well as our deleveraging events that we expect to happen. And so we expect the AFFO to grow and therefore appropriately we would expect the dividend to increase as well. Or has increased.

Thank you.

Thank you. We have time for one final question today, coming from the line of Robin Farley with UBS. Please proceed with your question.

Operator, we are more than happy to take…

We will take any questions until we are tired. So we are not going anywhere.

Sure sir. Thank you. Sorry.

So two questions I had they’re both kind of follow-ups. A couple of months ago you had described the market as kind of a softer transaction market and about 5 to 10 sellers out there. How would you characterize that number now, is it a similar number, but just the different level of conviction maybe? Or is that kind of pool changed? And then also… well go ahead.

I don’t know that we put up a number, I don’t know all of us are looking quizzically around the table, but I mean, I can’t find exactly the same. Steve why don’t you just for fun.

No I think, the climate Robin is very similar, but to Bill’s earlier point, there are sellers out there that are waiting to see what these first 200 days of the Trump administration mean from a tax standpoint, from a corporate tax standpoint. So I think anybody that has expectations that we’ll be announcing a transaction in the next week, while this uncertainty is still out there shouldn’t get their hopes up and I think the flip side to that is the administration seems to be moving quickly on everything. So we would just have to wait and see.

And what Steve is talking about is with any kind of formal corporate type restructuring transaction for the sale are not right fit. But there may -- we’re certainly working on a couple of opportunities where I am not promising anything but there is a potential that we could be announcing a small transaction at some point in time here in the reasonable future. But the deal is not done and I can tell you, each -- every phone call starts off with some basically comments that I don’t know if we’re going to get their concept. So we’ll see.

Okay, great, fair enough. Thanks. And then, my other question also kind of a follow-up, I don’t know if you’ve actually said, do you sort of have an idea of what you think the impact of National Harbor would be just sort of percentage wise, when you look out to the year ahead now that it’s been open for this two months kind of what kind of percent impact we should be thinking about?

Well that’s kind of a different way of getting back to the...

I thought, I would try.

I appreciate that. We don’t know, in fact I’ll tell you the 10 folks have been very tight lived about that, I mean it’s real clear that is better, I was going to say way better, but I can’t even characterize it that way that it pleasingly better, how’s that than let’s say what exactly, but they are not saying that that’s the picture for ever and ever. So my sense is, we’re going to have to stay tune over these next months until they get comfortable that the run rate that they are at today is better, worse whatever it’s going to be. So I mean that’s the most we can get out of it.

Is your sense that the stays that we’re better in January, because I guess I think there was a storm in January last year, although it was generally warm winter that maybe made some comps easy for some period of January is it your sense that things are pleasingly better outside of that event?

That’s the impression I got. I think I would say that yes even counting the storm affect from last year that they’re happy with their results on a year-over-year comparison. But I may be putting -- I’ll go back and read the transcript on the Penn earnings…

No I think that’s a safe statement, but they’re very cautious because they don’t want to get caught having made a mistake or misled anybody and helping out us as well. So look we’re just going to have to wait a few more months until they’re willing to say hey this is where we are.

Yes I would and in the background and I'm going to go back to my old days back when I was over there, more than three years ago at this point we did lot of analysis in different markets in terms of trying to understand how long does it take me to really have a good handle in terms of where you’re going to perform. And honestly that really happens around the six months window when you have pretty good data relative to how you think the impact of whatever transaction or whatever competition or whatever aspect is going to happen. But for whatever reason there is misleading trend in the first few months many times, sometimes they hold, sometimes they don’t, but really when you want to say what’s my correlation now I really did it takes about six months after the event before you can get enough data to really starts to say okay I can see where this is going.

But I also think what Penn highlighted on their call was predictable; I mean National Harbor is in a terrible location. Wonderfully central to a lot of population so those of us who have been there more than a couple of times, but the traffic and there’s a lot of ugliness in getting close to it makes it still appealing I think towards the -- a lot of the Virginia market to continue going over to Charles Town. So I was always optimistic that we settle out into a good place, but again we won’t know, but we’ll know soon enough.

Okay, great. Thank you very much.

Your next question is coming from the line of David Hargreaves with Stifel. Please go ahead with your question.

Hi, thanks for being generous in taking the question. I'm just wondering if you’re drawing on your knowledge of what’s going on in Pennsylvania. Where do you think the last Racino license ends up, seems to be a lot of opposition to that in the major markets? What do you think has to happen where does it go?

That’s a very good question. I have not talked to the Penn guys in a while about that except I do know that they’re highly focused of course on keeping it where it kind of belong out in the Western part of the state. The reality is and I’ll be real clear about this, there’s no place to put it. I mean in our time at Penn we exhaustibly looked at every guys in city, town, state college, down town whatever there has been talk in the past of try to move it to get expert, but that’s really Penn National’s market could be obviously wouldn’t be a greater thing. But the reality is that license and the two of them coming up should be retired. And there’s going to be a lot of pressure to try to get them to do it. There’ll be pressure the other way to try to put it we look at the state, look at the math the reality is there is no place to put those licenses. And I know some of the politicians even at my time that I spoke with recognize that and we’re in favor of extinguishing those licenses. So nice to have them, but where you’re going to put them.

Can it be viable where it is?

Well apparently not, I mean, I think no it’s challenging right because originally when the legislation was adopted before Ohio path. So the world changed with the CLT legislation in Ohio. But to Peter’s point I mean there are a number of people in Harrisburg and certainly a lot of people of the Western part of the state that do think that they Western Pennsylvania license given the legacy that’s taken place in Lawrence County. So it’s sure speculation at this point.

Yeah don’t know, but you can bet there is going to be a lot of fighting around that point. But take it as a gospel. We’ve come to stay through our Penn days and with an absolutely a fine to come and there is no place I’ll just put it in the vernacular to put that license that makes any sense at all. And I don’t say that in self-serving way there’s no place to put it.

Thanks very much for sharing your thoughts.

Thank you. Gentlemen there are no additional questions at this time.

Okay well I am glad we squeezed in a couple more Bill any further comments? Well look we thank you very much for dialing in this morning. We are still excited about this business. Sounds like we're going to have to be a little bit patient until we see what Mr. Trump is doing. I'll just make one comment politically that I heard speaker Ryan say this morning that he is not putting tax reform on the backburner that he is absolutely in the Republican authority commitment but it's going to be in the second trench I guess, but before June. So we'll be in this first round they’re going to focus say he on healthcare because it's the biggest need and then he's committed absolutely says he to tax reform. So we'll see. And thanks very much see you next quarter.

This concludes the teleconference. You may disconnect your lines at this time. Thank you for your participation.