VICI - Earnings call transcript Q1 2019

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the VICI Properties’ First Quarter 2019 Earnings Conference Call. At this time, all participants are in listen-only mode. Please note that this conference call is being recorded today, May 02, 2019. the Properties. to turn Counsel Gallagher, now VICI with will call Samantha over General I

Samantha Gallagher

operator, good release you, be VICI company's The Thank Properties and and found first to have release www.viciproperties.com. section quarter the in access website the XXXX of information at earnings supplemental and Investors information. morning. supplemental can Everyone the should

Some federal securities the the meaning of our of comments today will be forward-looking statements within laws.

projects we expect, or you identified by discussion risks similar that expect. and use refer words should, Forward-looking guidance, to to interpreting the which will, intend, actual results in results could subject uncertainties impact are usually company's of are the from future for to exercise financial Therefore, statements, detailed you operating condition. and differ that SEC caution more other I cause such phrases relying of risks materially as on and them. numerous what could filings should a

turn Officer; and over the Executive Financial With some Pitoniak, release Chief provide can President which and GAAP of to Operating we call, is to should considered our will the During as reconciliation available performance. in Ed in XXXX then These supplemental our Gabe results have David to accordance and call isolation call A I'll first Officer; company's we most open Accounting John a Officer. opening not Kieske, the prepared believe will our Ed. Chief in Payne, GAAP. will with today information. Ed measures be financial or measures that, Hosting questions. non-GAAP the comparable measures, evaluating quarter the Wasserman, Chief team the for operating Officer; substitute these we directly we be discuss remarks in useful measure call Chief and earnings and

Ed Pitoniak

through and We appreciate released quarter here Thank the to call. you, quarter results last our how we start XXXX recent you our our us and to for against XXXX first We're great our want to David quarter strategic good and morning very first, join and be how be and walk provide build to earnings the evening. of in view progress Samantha, on John, American context terms on the to you But foundation goals, taking everyone. of continue I our the activity. excited some first REIT. next long-term time will we

standard, income from results. increased net the flow through which The and by in a new and quarter lease accounting of moment, to David rewards XXXX was the full increased our of which million, XXXX first capital $XX activity profit operating we meaning first were achieved revenue million, will XXXX, The growth effects our $XX.X QX address quarter the growth. XXX% of transaction financial revenue our of in by in our markets in significant the reflected

absolute which our Our growing quarter share we year-over-year, resulted quarter rent in entire up ability triple-net one Margaritaville, flow net and of completed X% an an basis. basis of AFFO free Philadelphia while per shareholders' XX% on of in the was for to fourth quarter income a turn our this our Xnd. with January closed embedded The we Caesars, result the the lease our an rent the increases increase on AFFO in told, from and is acquired in almost Harrah's revenue modifications cash almost dollar full ownership annual of model. of All leases, nearly into new business was profit on AFFO XX% hallmarks and approximately

of we first XXXX. in Our our November executed follow-on equity AFFO growth by per of was dilutive share short-term reduced successful impact offering the very

weather all with leading portfolio sheet REIT a are and that building you, corresponding As balance we we on can have discussed focused cycles.

sheet balance dilutive with share a $XXX.X As the on proceeds but impact result, a of follow-on results, additional equity our the to offering us These have in million position near-term proceeds. raising November long-term elected success. per gross we over-equitize for

Just and VICI. for clear been building on moment. to very We've Margaritaville touch a

in We the the just with and one income great the resilience we bought take best this acquisition element hospitality our January, on are shareholders But income on providing to gaming, with Gaming, important, launched closed our partnership of quality, leisure estate. is of to National Margaritaville, real focused tenant best-in-class laser we've vision Penn key we transparency. when income diversity. A as In and -- officially operators business. achieving

connections, which Cincinnati April this end to gaming of Casino. noted Xth decreasing industry theme. against morning acquire deep activity, JACK as the with on acquire on overall of first May. are Greektown, We his year to commercial in we anticipate which of earnings estate transaction the the Penn closing to additional we Hard have details, John own we Rock provide this but Continuing real will partnered their on International the Penn call, thanks backdrop also transaction with the announced by diversification partnering

gaming, Ohio leader We forward and are We excited hospitality strategies. investment market. a Rock, to partner an look with on execute their growth to this companies expanding experienced to as leisure, in over and operator global time continue relationship Hard grade both in the

tenant relationship gaming and achieved faster Hard our other REIT, foundational Penn through tenant our Caesars. with have diversification We Rock, any than

partner we currently Caesars, real relates the to together. at it where business to do are estate Caesars properties honored XX be we As

one industry-leading night, demonstrating -- leisure top continues As globe. results operators to call the last across hospitality continues you and on strength Caesars heard as their their of the produce

these the that we will this potential with. VICI, any -- transaction our obligations their that feel leases start and for call and shareholder of our of deliver how the always drivers are value business strategy our Namely one structure business ability fully our our management value options the to As of income best-in-class the model. seeing with it fundamental what the you. as we should external are here in internalize internal over portfolio of John great on to recent entity regard is and committee our year highest that In over the formed advantages thesis character returns. our remind to of and relates transfer flash embedded to the one, partner commitment, creation to to help the the Caesars With entity paths two, sector. enhancing you to to about based on provide business and believe expressed progress quality. the governance and three have continue and three, that, best Caesars John, shareholders we valuation REIT with call we and our to number we a Through impact would key grow was our turn discuss occur. the the and to Number and transaction market. fundamental across We will we I'll Caesars profiles growth our we we're performance and of to transactions and superior for value any which we of do

John Payne

to and Ed, good Thanks, morning everyone.

been half acquisition VICI partner months While we you just remain since last you and a couple sixth it's a ago. Xth third we since On announced our all, to spoke can our very we operating April we with of started only a busy. year see that

in the extremely With the is the in the we're Cincinnati, of enter pending to JACK regional purchase market, country. excited fastest one Ohio which the markets Casino of growing

tenant a cap our million, an gaming of will million approximately the expand annual and purchase X.X% for further transaction, base. attractive acquire our Greektown to JACK Similar market price of $XXX diversify representing acquisition a Cincinnati rent We geographic urban footprint rate. of into will $XX the strong

Now National in addition to Margaritaville we've Caesars tenant, with of built and our Penn through acquisition of announced are purchase that Hard Greektown with partnerships and long-term said Cincinnati. foundational Rock had JACK Ed our

one the with to most a record they recognized truly Rock in strong the are of Ohio partner success We of very worldwide experiential are Hard proud market. operating track as with operators

and months, in remains space. we've As in believe there $X.X announced potential of we transactions, acquisition you've witnessed billion the targets of XX abundance gaming an VICI's first

So soon. down ourselves anytime we do not see slowing

shapes to of while sizes to momentum remain will accretive in opportunities our add transactions for marketplace. We look the all and

external any capital continue our your goals down and our work, call Las sheet our include; growing progressing to tenant markets, the of base, sector portfolio to exposure, I while goals. toward results. will Vegas and over financial will have notice. internal put and diversifying Those one option our REIT and our three retain geographically our profiles expanding the will balance we value properties of and We discuss the regional and for growing growth best and a call David? turn creating to with urban With Additionally, who option all to XX-day we that take attractive David, the shareholders. in our

David Kieske

our quarterly Thanks, few of John. night. last the I published a cover results financial highlights from will

authority. neither the remains of to not required tenant are therefore on taxes January prior the on X, presentation statement adjusted historical gross continues estate accounting As related income period, The XXX, present the to tenants will retrospectively on you'll include new and we are under our taxing starting operations. by items the reimbursements real statement gross longer the of of relevant March standard, they XX, on Therefore estate lease the and taxes up statement to appear see these our unchanged reimbursements. and the since XXXX paid be related tenant directly XXXX, basis financial ASC real a no and

increased QX 'XX of 'XX. QX X.X% taxes, in revenues Our reimbursement excluding tenant the property over

and quarter legal a costs under percentage one in costs associated to expenses incur for be Our total the the full-year is G&A did required of new guidance. in leasing with the and for the projection $X.X the the was our of the X.X% as acquisition. related primarily which only line We in lowest was transaction Cincinnati ratios accounting $XXX,XXX million expensed revenues with triple-net and are the quarter, sector. to documenting quarter, These JACK of

for for AFFO $X.XX the was per quarter quarter. or share million the $XXX.X Our first

supplement As to X% and provide year. feedback information. to our we almost per of information the presented. total to supplement financial prior in the your increased heading like transparency strive increased AFFO section website share XX% draw the you attention quarterly have any year-over-year may where and We'd over the in menu we Financials, Ed located mentioned, is AFFO on under The our Investors additional value approximately

our onto balance moving activities. Now markets capital sheet and

the During tool equity ATM we at million. of raises. of We a program stock at-the-market our million transaction shares balance $XXX.X through the of up view first proceeds extremely average weighted common $XX.XX, to net outside as specific raising our sheet efficient $X.X shore an quarter, of capital price issued

continues position to to a be phenomenal execute. sheet balance Our in

net balance below be ATM issuance Greektown our fund recent well the in JACK our cash Cincinnati transactions. will we raised November the excess that as to on end sheet of as offering, times X.X equity of impact debt-to-LTM range used and to As of approximately times. the the our XX, stated times, X.X include of EBITDA This does our X March was the low

maturing liquidity clarity investments providing the debt us cash is effectively outstanding million, adding on date Our unfunded using Margaritaville providing agreements The and an transactions January into and of with have until approximately approximately was approximately the for of billion portion on the and total Loan date billion, January debt now rate January discussed, Xrd, of weighted ended on XX, John entered we our have transaction weighted fix XXXX $X X.XX%. expense. facility revolver having a short-term on million funded million the million. of into To in This for quarter an average aggregate average debt of was front rate XXXX blended in the the swap a rate two interest impact our cash of years $XX.X under interest with sheet. X.XX%. and of These Term an we LIBOR future January rate B our effective cash our at acquisition maturity XX% $XXX debt $X.X million XX, follow-up swap at the end annual Xnd, future quarter debt We XXXX. fixed $XXX X.X closed of of termination $XXX.X no of is includes $XXX amount growth. balance the The Taking a notional to acquisition account that on our rents. interest we

quarter utilizing Cincinnati million the annual equity For leverage announced fund million November proceeds to price the estate end, debt anticipate our transaction, be purchase we of which end and $XXX of will from closing rent. basis funded a to by $XX.XX real to use JACK acquisition on for the JACK we Greektown, we the The expected Subsequent the of offering on existing adding cash Greektown Cincinnati of hand. combined transactions are a and neutral of May.

to $X.XX range our reaffirming guidance AFFO are share We of XXXX $X.XX. with per a

In acquisitions as based pending rate of not to As dividend a on and guidance include yet Greektown closed. $X.XXXX reminder, paid we operator, liquidity of record JACK progress to per of and execute and closing, to strategy please with dividend keep share significant have we close the and of on tremendous We as of business our on value. of March on continue the open access positioned for does driving growing our questions. that $X.XX XXth. announced a our that, portfolio been capital in line remain XXth annualized With to we make the Cincinnati stockholders the shareholder April not well

Operator

Carlo first comes Santarelli [Operator question of Instructions] from Deutsche the Your Bank. from line

open. Your is line

Carlo Santarelli

When estate, it seek do there as kind in a from Thank of areas seeing really commercial about guys about a your you the the where of you activity? thinking for from stock backdrop as where growth of where relative environment prepared were slowdown opposed commercial in just remarks gone real not that everybody that kind view has as some broader to in challenging. far. on much positive business net you slowdown activity real environment transaction you to Ed, very gaming the estate potentially the more the able it standpoint execute operating a and of an maybe are thanks and you REIT think more be model, as a could in little thus nuance that in investors guys in for comments the a bit made maybe level the you we're any transactions to market of statement seemingly valuation

Ed Pitoniak

Yes.

on something I important think up very picked you Carlo.

all prevailing wisdom If single-family to we office, is this prevailing real American that real whether in correct of medical and wisdom REIT We are story of in. cycle the months XX XX in developed has industrial, the we real early sectors the approach again across in especially really the understanding believe community of late housing inning in be Alpha obtain people sectors over gaming it a is It estate the many are story. it still commercial look we seen are most you estate that so last the other a of is estate. American gaming and believe estate and remains the across innings to as res, they can it very that be multi real the we that estate by dedicated investing terms they publicly-traded the sectors that as is real the whether commercial look

lot will this inning those especially a manager a when late to believe continue that characteristics. cycle the be is to This that believe we sectors. continue that attention estate So to a sector because will attention we growing if compared off other commercial place of real so that of active of will gets many value find you

Carlo Santarelli

out exposure, your if on some any type in to as Las comments I Vegas Would unless way, you as That's third on the such But premium. it remain there to ask going for bigger large, assume shown your mentioned maybe very you've I has guys a to down where not road a that, I a ask the in say you asset bit but large clearly, gates deal, properly. do avenues Clearly guys want let's did comment those I picture call you is of pertains of been of expensive, bit Vegas, kind focused partner want jeopardize, of with but let's little lines? new accretive, that Thank then, up along out little an more potentially or at helpful. to that a will that to heard it I'm that. growing real And something deals be John, new to-date of, sacrifice party it meant you valued market misheard be the a Las not a for specifically. the to acquisition, don't opening question discipline more might one that estate might you it there.

John Payne

would at that Ed ensuring jump and I will. I'll the David don't we about accretive there underwriting it's Carla, way in think and ever think Yes. beginning. or the sacrifice we

you deal. structured know, the imperative as we it's we're that to accretive way -- the As it's us we do

at there all, sale miss clear and locals whether that estate, as opportunity some to that this a that estate our believe said is we suite. for continue look estate to that many great real great that's as market We to amount that on But also hear real and as of of the downtown we've and urban that Vegas in where you've to to to in they that a supply also at as love we are Ed, of mean an do the limited Carlo Las outside strip, at but I doesn't looked been these we, Vegas, real didn't assets that opportunities me real should -- sole want is asked? some we've invaluable where there transaction, and seen on Las You love It David, come the there have strip focus we think on ever the and would continue we answer well. casinos is you add estate have. that more

David Kieske

did as we we mean David. will -- it's I John, REIT. I everybody think it. not Carlo, And are knows you triple-net

sits. it flow to and acquisition the way of this through, we reason that and to is ability any any manage regardless how approach day property very is our live part we the large the with, we achieve be in manage, underwrite in improve but operations asset such don't And or So the disciplined depending, accretion and asset of the revenue able it where high one we're we have will model. we

Ed Pitoniak

on over element it, more become in It would add fact it us, element. in any thing, I one not our important put touched point going very when on strategically a a value given important you factor that's important accept that the we causes in, is you an and to evaluate An did but to cite that just to Carlo. relationships developing that we dilution strategic point, would your will Yes, how Because can time. grow us underwriting transaction.

Carlo Santarelli

within I'm markets, going very to To That's locals obviously the market. difficult downtown any either that could, transactions Thank Great. that then I of regional transactions you about John, any those if thought or the you. mentioned thorough, market fair? transactions the gating would certain markets in to you've extent in just more the make assume than issues that those there's Is unlikely necessarily any be that in strip, on markets. and

John Payne

think Based what on it's I is that you a but to on accurate, comment give what that. I said know general hard

at to got the look transaction. a You current specifics of

Carlo Santarelli

very thank guys. you Understood, much

Ed Pitoniak

You welcome. are

Operator

Your a Milligan RJ of Baird. comes next from question from line

line open. Your is

RJ Milligan

Hey good morning guys.

I was properties? think Given that up high, all-time pushing how the about to sort pulling the option the in curious fact of more using so do cost of attractive expedite is your stock near equity call you possibly

David Kieske

David. call Look us the that that gives us. RJ, embedded past. we sector joining has -- demonstrated because and properties it's loved it that in as I Thanks the we've growth, we drive for ability think to Yes, through the been don't talked consistency about

our base scenario. to in odd in of One as a each properties, layer on discretion. 'XX a in delivers going still John lot, out is and mentioned, the each and of at those we $XX rent and one so there. one million in VICI in There's lot one And 'XX case is 'XX, one there's that year call a

but achieve of where always we've accretion highlight base from -- kind haven't downs capital that's cost stock those. and each So that are is do and that of we is today, can the we deviated we the of of we it on mindful had and don't to our case something that we

Ed Pitoniak

I just working of whatever call goes ability the that RJ, us time be improving other that accretive And that to by. make may else properties on that gives would also to add you're than capital as -- obviously more even cost we referring the

RJ Milligan

ATM know Okay. of be issuance of That's if of about to fund you the expect But the talk want to David, you the about need can down for talk year? fund. bring expectations capital leverage. throughout helpful. for the I what or I year rest ATM you to additional Greektown don't issuance additional can cadence guess, to your And you sort

David Kieske

RJ, question. a Yes, good it's

here Greekdown equity we for sit or we need JACK As additional today, not Cincinnati. do any

obviously executed we're will available -- as and what to have follow-on sheet, successful numerous important then timing that have pre-funded trading a the November. to demand drive for these tools it's us making And considerations around offering in fortunate balance to the our very we our pipeline tools ATM, put with available stock, sheet sure is, evaluate as the outlook long-term to and as that we it. to look in takes the that has of we've investor environment us. stock, including the REIT And our of the of kind view the any possible one efficient balance optionality of to is best we deals So the have it position us very we close much as most equity

we'll assess kind ATM as offerings we've equity we all of opportunistically with the that done. have the So,

RJ Milligan

if position? incoming was inquiry way ATM And or you that was general for the that in first I'm not quarter a that can disclose, just issuance but sure the

David Kieske

it quarter. throughout was general the up opened the the and we in Yes it way quarter first issuance

RJ Milligan

Great. Thanks guys.

Operator

question from comes of Daniel Nomura. from the Your Adam next line

is line Your open.

Daniel Adam

you more the sense Thanks from I them in I it why my see taking think rather them Hey accretion? now. guess question. is, make for in than the to my about related net I option wouldn't The you value present sooner guys. question follow-up call properties. the to to later mean, enable maximize that it, calling a doesn't call

David Kieske

of the they it's merits the of it's understand since in look gotten work to merits of And we direction We're to to a the helping big continues mean the sector. not always proponent the that and go. been and stock let as question day the the people them right fair Ed understanding Yes, you've are we've alluded one I Dan going there. a know one.

accretive remain third-party right they be if think, and growth, XXXX be it I speak, of growth, in continues more and activity lot so one always layering accretive financial out and And direction. want can we the heads tomorrow look stock but that we potentially could a financial will acquisitions the XXXX, there, so in one It's not our in and in XXXX. to them one AFFO something to again engineer at they

Ed Pitoniak

again mean, our And would prepared of math basically we we're did we we're seventh just are, company, $X.X already I as I in spoken that, reemphasize Daniel here as the acquisitions. a quarters -- quarter in my first right. where billion in six And if those I'm John remarks, of doing

exactly to here down So are right that, not close about in the quarter. we the need hasn't those $XXX for million as velocity, to we the and it, we when or we it sense prioritize front kind to bring choose to look given situation with Obviously that thus opportunities call continue opportunity faced to properties a grow a business. will been velocity. opportunity to continue the we've to the forward, in do And at to thus us. we And of we continue continue of that order you the that get where able really and velocity how in layered a to which business grow to averages but at out like see

Daniel Adam

Okay great. That And just makes sense. follow-up. then one

open are and are wondering now pluses thoughts in I'm are the gaming exploring more on this they deals Thanks. your EPR what minuses? yesterday, technology, to space. So just that

Ed Pitoniak

to in represent much the quality real smart very I of words, The realize saying, become process. an and we step as real a Daniel, step that which in in step or gaming recognition We commercial think, another revaluation And the drives sector truly very the estate. estate rerating valuation, ultimately in as is net-net In real guys sector another institutional needs it value, new fond its institutional EPR right. it's validation and important into their value, a is validation of see real investors. full entrant real say process, any to any that estate plus. validation other are estate can the

Daniel Adam

much, so Thanks guys.

Operator

with next of the line comes Your question Jefferies. David from Katz

is line Your open.

David Katz

I thanks And everyone. wanted insights strategies tenant. morning remarks, far. take in your which stepping there opening up that to Good some you can Caesars, degree it's so your commentary to made largest Hi. maybe color just about for whether ask, actions And you and Ed about any sits on given I where any your the can ahead are control context share value or there to don't of specifically. or in that may and you you us specific that outcomes, of protect that that or change consider any But have, expect with detail to optionality today? strategies add you have Caesars

Ed Pitoniak

Yes. just about didn't as though, a starting ask point, you se. David, Maybe a per

we solidify see not the that they results those Caesars sake we this were our on results do must everyone to happy performance were for yesterday were. we But think I strong of rely security of we and team, as Caesars to call, rent. -- the very saw emphasize, do not the as on quarterly Caesars

a to So to wanted be that's, I sorry preamble. add just that

David Katz

It's clear.

Ed Pitoniak

then, Caesars of the we mindful very sort we in will In increase work create with quality mindful urgency our of And of through of the very to have the value that we the is how be the obviously filter the how terms Caesars a of well. do is of our thus even strength looking smart of being as there are of Caesars, we of are lot Caesars, of the a that actually carefully a and with opportunity we confidence that and that obligations make in lot fact have excited energy of how take anything of we lot And relationship businesses. engagement a we preserved approach value there stronger shareholders to we're arises our of sure do are the we make lot we rent. at rights people and a further have, that interest very any with beyond and then, which them both involved about at securitizes to

David Katz

Around questions. on gaming real-estate certainly the and been updates just question And changed within of know of and outside that. forth. other there? up one somewhat early sale fair looking been looking there you discussion for follow-up has about know in looking you, that has about so regard, an gaming some realm. suppose on for your is another I a and about stage prior matter the I Thank regarding Any contiguous anything businesses coming it's fronts news

Ed Pitoniak

Yes.

talk our management we right of which which know, obligated have about it's real-estate seeing And obviously You are sectors as of look our profile grow right diversity we a learn we team offer day board to some all one, in point, to obligated invest characteristics factors diverse clientele clientele continue greatly love engaged we've asset a characteristics in and REIT those we're risk same the love believe experiences it's coming and what sight of experiential portfolio as are we operators sure a learning fundamental us certainly diverse gaming any obligated that never your been positioned sectors David, adjacent geography can, very improve names adjacent to we're much experiential in gaming, VICI sector. that we've are then of business the an to And we now And fundamentally we there in experience accretively. day is interested and share have always what we that front of and as and we we to opportunity at in. so we carefully We up one experiential we're can think key from both characteristics that all very we sectors, lose to some very across to were make of from with to about geographies. the you of diverse we gaming. a as great those in

David Katz

you, I my Thank it. Got you appreciate very much. taking question.

Ed Pitoniak

David. you, Thank

Operator

comes Your next question of with from SunTrust. the Jonas line Barry

line Your is open.

Barry Jonas

gaming think Good you guys. those of guess and the gaming mean, Hey. following question. same cost helps as valuation analyze away capital? your do up maybe the or you morning and diversification your I different deals on from I ultimately just non-gaming do

Ed Pitoniak

to -- our and in. understand, fundamentally make estate not make any sure only highly cost Barry. I'll general crack and characteristics we obviously investment It this, If first the of the but to specific we capital. do I'll this, David sector. obvious. good are our this real the will if we improve we need And take decisions, the of is that believing John going business we and at pitch let and

play does those the will that especially cultural to that understand, gaming supply to now intense we among have, given that's going regime regulatory trends may constraints, only into it by which be going you into built-in, durability sectors regulated you in and demographic, Again, sector different next over the the rent. forward. to don't years. don't find that be that factors durability that growth the the come come generally its of other to thus other we you the we the and not these disfavored investing, in of multi-generational the have playing that XX, XX, assets, highly are gaming, social or yields and things, in a again, there be basically Is gaming, supply So demand favored factors experiential than a then And will, characteristics, provide. the experience XX sectors, nature need if if but confidence will

Barry Jonas

have? know look, addressed then, you twice a And are about think are initial investors single you it. happy At relative point, those tenant, this adding very early you agnostic just on on with I somewhat tenant or additional you're working the an you having to concerns that focused you've Got ones now.

Ed Pitoniak

John?

John Payne

active to across they very we is to What our trying are to where Caesars. Rock all the that. growth Hard course and understand I'm it's other of part build over with relationships But years been and deals great there strategies. achieve continuing and of platforms, coming a continue and place meet to Penn Barry, be finalize can we companies, in the a

think I months years add Barry, more we tenants the coming our to So over to that or see you'll continue portfolio.

Barry Jonas

guys. Got it, alright thanks

Operator

next Your from JP the comes Mike Morgan. from question line Pace of

Your line is open.

Unidentified Analyst

no are much. I ask, thank this fronting to guys, There Hey got for Coleman question you very is Mike.

Operator

Your comes from Union of DeCree Gaming. the next from question John line

open. John line your from Union is is Your open. Gaming, line

John DeCree

guys. Good morning,

Sorry, mute clicked the it was I hit button, there.

Ed Pitoniak

That's fine.

John DeCree

get on. partners that early and in Ed companies of to on some behavior high-level the wanted thoughts, we've John, potential maybe corporate or the seen Just,

partner education, I potential it just Is about operators peers. is willing folks changed easier getting probably was are to your was the going even how your we've that conversations do reluctancy and are or some wondering your some but what operators the extent to you just, I from it with of partnering? REIT, thought think has people of more portfolio just to with and there comfortable, getting you kind work you here? more across seen see for still guys the with certainly and

Ed Pitoniak

John?

John Payne

if Yes. that then jump I'll completely can don't and take answer. I in Ed

you've I a there I at could us I mean, well. companies a started, think like grow. many it help we REIT misunderstanding when described think to of times, how is

new sector, that years others only So five six probably the relatively or again are in old. REIT old to it's many compared business a decades

we've to our could about was. John, their been and least to who this, first -- at can their better be they mean you starting company I I more of big doesn't understand REIT and that? honestly, of are there it's we correct, think VICI helping but are Ed, a our this, talked been you David, growth an think about so leaseback be more on you I that in of a company? mission can we've where fair them and can do they And we I available that VICI do an should we and the on a think everyone So general, to know How help part people company in we've how make education a independent understand. and and deals space be again little in sale get on to has and understand knew we think can that want to process with It anything folks months to sure, team the XX they bit how plans? played have just out sale folks structure, or How tell their it's educate we part thought we're you a there them, how

Ed Pitoniak

just the come combination more interested most and grow. real a is, that I gaming John OpCo is think forward will which be a is bidding, up an be the not circumstances added terms, is in degree will one ends whole whole In future. and to, is put I in would what that to the I pretend open John, add to to well. right. that and market, Yes. the question the open question, other I'll asset of think the going question when estate and have answer as of thought we that PropCo, be what here sold to an win co can To co comes the can has to asset a degree to in the market degree outbid to REIT if there a a able will as succinct interested to words an operator That continue that fundamentally question to the REITs time that to gaming

John DeCree

think I was on, was question. you to involved. that just present I my going Ed, competitiveness REIT the follow-up to stay on as

do particularly you perhaps when acquisition, cycle stuff type coverage, as or underwriting partner, that There's different me. about, if you're credit even this you the a think do on some there credit that looking you or OpCo you a Thanks forward? you for support guarantee clear of single just it asset some preference guys. corporate coverage point basis. guys underwrite at that's from think for is but in done follow-up. going involved, about How about some of X% or -- think enhancement been your you're the slightly at And have from the a question X% do So a as of how an kind a kind of

David Kieske

I and can chime David. John it's John, in. start Yes,

gaming such John's out is As a these the Ed come revenues assets. and I've and flows of long-term appreciated cash there and over that the realized resiliency to

the over quarter So the the at a to X.X% to we ever we've ratios range Harrah's that underwrite ultimately X.X coverage. and as that to and would as that Penn we Margaritaville, want us were to-date, in made with much long they you a the comment as that But X% capital that announced going do try going best this morning of into coverage seen significant term of with the you've the get asset. in X.X% a heard knowing assets deals lower we are this Vegas kind But fixed a do asset. morning, at there that Las in having the

with ability And, do for EBITDAR revenues obviously, have with in combination operator their coverage answer in knowing the can of the they over that think X% well. is -- of continue but long-term up X.X%, what So depends. it's rambling that where there synergies operator but drive little to and It's to we as a what can partnership conviction the a bit it's long-winded to do if we it we'd be. like a I rent getting ultimately a in to X.X% the

John DeCree

Thanks, guys.

Operator

of Your Goldman from question Stephen from next the comes Grambling line Sachs.

Your line is open.

Unidentified Analyst

question. on Good And is Bill my taking morning. for This for thanks Stephen.

industry you with associated entry the in space Daniel's REITs licenses? following any appealing consolidation? be more to gaming expect question becomes on earlier. a pickup REIT as gaming to barriers the So up there'll Do And diversified are there

Ed Pitoniak

Bill. you. good from Yes, hear to

use in by what clarify you're what of that? industry about terms of terms just meant you could talking In consolidation,

Unidentified Analyst

Yes.

to and Just diversified even or like the for a consolidate within maybe REITs gaming a higher acquire propensity industry? REITs

Ed Pitoniak

Yes, yes.

non-gaming impact that look again we the what their that validation. sign as will It I as a their that suite make to your on gaming they again the available terms as of and the validation real -- at capital, it of gaming cost estate rise say would that improves question be comes -- -- to bring interest should improving it to stand abundant. entrants, when earlier, in of and as rising growth, opportunities of does the all what incumbent to be would in point. more that of capital So cost on of their REITs And point at arrival the needless raise lead reason raised open tide the this will to bidding, gaming should was new an boats a that to of consolidation, a increasing of to the impact investment

Unidentified Analyst

on effect any there ripple expect was us have regional to you of gaming That's recently casino Do helpful. lease underwriting? property. closing announced Thank a you. And

Ed Pitoniak

that? want you Dan take to

David Kieske

so. assume the about talking Ed, GOP that XX in asset and you're I have don't I think Tunica? I small

Unidentified Analyst

Yes.

David Kieske

underwriting. regional effective that see don't I Yes

Unidentified Analyst

me. That's it Thank for you.

Operator

of Your Ladenburg. line Massocca comes next John from the from question

Your line is open.

John Massocca

leverage So next guys your any on couple target to keeping the levels below the maybe there years. over process is thought and of

it guys, Just for accessible most you more capital reliant on not take accretive option markets down the in just are given the particularly given, properties that being so to of in gives the manner? flexibility position deals you call those your

David Kieske

entity at hard Yes, John, leverage take and size of worked funding that close, around The the a obviously system. deals the never position to started of our times in to uncertainty a there David. of with we're this out the really be XX.X leverage it's of we -- mindful we of lot to very where really, something want is acquisitions. funding timing the And the and our then is

the provides the we've having XX% call our internal So, nice out of a that lower funding call properties itself with a capability specifically, properties. around capabilities of ratio for I funding AFFO in got AFFO, payout

balance X times. the will to X.X We times of keep sheet

And call so that does properties. with provide some the us optionality

we we want have certainty announced potentially we've are So for or those make we here funding We the anything that call sheet we balance -- may to that around properties. future. the sure anything specifically in acquire don't under-levered that keep

John Massocca

about going talked rata that around for the around you Greektown. grow both I the Cincinnati Greektown kind of think And of acquisition of burden much kind kind we just I should know line. of gears debt kind on in too without pro raise a of sufficient Okay. to maybe it contemplated is then How timing of help size or shifting debt fund potential those about to was doing two the issuance original putting some to and the additional pending transactions. mean acquisitions? for

Ed Pitoniak

John it's good a Yes, question.

would JACK Cincinnati regulatory reiterating to that sheet of on in acquire use be year sets we a Greektown to the cash obviously the the are As Penn should to on this by balance plan neutral approval, it morning later both is And to Greektown subject markets final it leverage and then basis. said asset. and May. end the The close close debt

total billion $X.X we're million, Cincinnati $X.X the So to billion portfolio assets Greektown is million, is so that $XXX year. adding value of this $XXX for our

we additional regulatory neutral need a would So make to around markets there sheet. we'll debt look -- rough get on today we to have and certainty process And again, million, $XXX on of incremental add as the balance Ohio that leverage closing, we $XXX numbers million fund the to we'll are basis. through will leverage the

John Massocca

think it touching competition is regulatory you maybe or then on or pursuing pretty because the are now? any know guys regulatory portfolio, it's of wide kind states where additional a concerns And I you markets there of diversity acquisitions around side, destructural Okay. kind but question, of may your given difficulties kind right open broad the have of

Ed Pitoniak

John that? you of want to take first crack

John Payne

say, to of there hard at, deals may that we looking where but regulatory in It's we're I be. front don't think I us and see is of any that restrictions

to for able answer from I see right to don't any us is, impairments regulatory. the now So the be grow

John Massocca

guys Understood. very much. That's Thank you it me. for

Ed Pitoniak

Thanks John.

Operator

the Morgan Your from of Stanley. Bradford next from Dalinka comes question line

Your line open. is

Unidentified Analyst

Good morning, on for Thomas Brad Allen.

Ed Pitoniak

Brad. Hey

Unidentified Analyst

wanted I on you one had options. call ask guys the another you to

of in timing its looking the Some the for articles New and That's impact that license Orleans economics property. indicates situation the of the call? that Caesars capital Could that renew structure potentially is into some Appreciate question. put on to it me.

Ed Pitoniak

Thanks want Brad. take you John that? to

John Payne

This is John. Yes, Brad.

gets a We'll through are. it with that now, continues Caesars out commitments and XXXX. monitor state the capital right you to finished expires we at and it work going them how that to in on have right see extending to what look how that So ultimately are continue plays their option. which and agreement, operating and They're process

to Ed earlier, plays don't to you it see or able So some contact and know, clear that's how we'll have I them direction it if give David out in Ed that? be add on going. as we'll we're anything with said and to where

Ed Pitoniak

relatively Greektown the announcement about US would of few across downtown the acquisition, I regional acquisition landscape. Jack and the mean, there we Cincinnati in the that, obviously, are add announcement just in talked as of the as we casinos about I talked

wonderful believe a to own obviously yet we represents it one. And Orleans another New is property. place a really

ensure to obviously supporting way we're can success Caesars process. in So we every this in

Unidentified Analyst

Thank you.

Operator

of from Rose question comes next line Your from Instructions] a Citi. [Operator Smedes

is line open. Your

Unidentified Analyst

to Thanks. how to This transaction want over is the you think how current months? [indiscernible] I changed ask X and Smedes. on comment on I for it's XX past looks just how pipeline

Ed Pitoniak

that. Yes, I'll take

how yesterday me have been are a started I I I'm XX busy. since saying ever than on said months asked But that Someone busier been. things we've plane going? we we've been ago

So good. the is activity

in relationships will XXXX the companies. continue with And who we build to 'XX let that pay are, to work and folks work think I do off. hopefully we'll we in those and some know did

time quite So active and this space. We're I'd in pretty quite say it's it is exciting busy.

Unidentified Analyst

Thank Great. you.

Operator

call further no will questions this back the the are I presenters. to over There at time. turn

Ed Pitoniak

update to summer Thank we for you, in look your our the continued second on our today. to Thanks an again We report providing everybody Operator. progress quarter time results. forward when

Operator

conference concludes today's call. This

disconnect. You may now

VICI Properties (VICI) 2 May 192019 Q1 Earnings call transcript