Master Lease Financing Obligation

6 Months Ended

Jun. 30, 2017

Master Lease Financing Obligation

Master Lease Financing Obligation

8.  Master Lease Financing Obligation

The Company’s Master Lease with GLPI is accounted for as a financing obligation. The obligation was calculated at the inception of the spin-off of GLPI based on the future minimum lease payments due to GLPI under the Master Lease discounted at 9.70%, which represented the estimated incremental borrowing rate over the lease term, including renewal options that were reasonably assured of being exercised and the funded construction of certain leased real estate assets in development at the date of the Spin-Off. As of May 1, 2017, in connection with the acquisition of Bally’s and Resorts (see Note 5 for more information), the Company’s Master Lease financing obligation was increased by $82.6 million which was the purchase price paid by GLPI for the casinos underlying real estate assets.  Total payments under the Master Lease were $114.0 million and $226.4 as compared to $110.8 million and $222.2 million for the three and six months ended June 30, 2017 and 2016, respectively. The interest expense recognized for the three and six months ended June 30, 2017 was $99.4 million and $197.1 million as compared to $97.8 million and $196.5 million for the three and six months ended June 30, 2016, respectively.