Company: GLPI
Filing Date: 2025-04-24
Form Type: 10-Q
Source: 0001575965-25-000017
Chunk: 32

Company: Gaming & Leisure Properties, Inc.
Filing Date: 2025-04-24
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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$9,766,133 The Company follows ASC 326 “Credit Losses”, which requires that the Company measure and record current expected credit losses (“CECL”), the scope of which includes our Investment in leases, financing receivables, net, as well as the  Company's Real estate loans which are discussed in Note 5.  The Company has elected to use an econometric default and loss rate model to estimate the allowance for credit losses, or CECL allowance. This model requires us to calculate and input lease and property-specific credit and performance metrics which in conjunction with forward-looking economic forecasts, project 

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estimated credit losses over the life of the lease or loan.  The Company then records a CECL allowance based on the expected loss rate multiplied by the outstanding investment.Expected losses within our cash flows are determined by estimating the probability of default (“PD”) and loss given default (“LGD”) of our instruments subject to CECL. We have engaged a nationally recognized data analytics firm to assist us with estimating both the PD and LGD. The PD and LGD are estimated during the initial term of the instruments subject to CECL. The PD and LGD estimates were developed using current financial condition forecasts. The PD and LGD predictive model was developed using the average historical default rates and historical loss rates, respectively, of over 100,000 commercial real estate loans dating back to 1998 that have similar credit profiles or characteristics to the real estate underlying the Company's instruments subject to CECL. Management will monitor the credit risk related to its instruments subject to CECL by obtaining the applicable rent and interest coverage on a periodic basis.  The Company also monitors legislative changes to assess whether it would have an impact on the underlying performance of its tenant.  We are unable to use our historical data to estimate losses as the Company has no loss history to date on its lease portfolio.  Our tenants were current on all of their rental obligations as of March 31, 2025 and December 31, 2024.The change in the allowance for credit losses for the Company's investment in leases is illustrated below (in thousands): Balance at December 31, 2024Change in AllowanceBalance at March 31, 2025Maryland Live! Lease$8,732 $5,696 $14,428 Pennsylvania Live! Master Lease18,471 12,286 30,757 Rockford Lease3,077 2,041 5,118 Tioga Downs Lease2,