VICI Properties (VICI) 30 Jul 202020 Q2 Earnings call transcript

Company Profile

Participants

Samantha Gallagher	General Counsel
Ed Pitoniak	Chief Executive Officer
John Payne	President and Chief Operating Officer
David Kieske	Chief Financial Officer
Carlo Santarelli	Deutsche Bank
RJ Milligan	Baird
Barry Jonas	SunTrust Robinson
Smedes Rose	Citi
John DeCree	Union Gaming
Todd Stender	Wells Fargo Securities
Jared Shojaian	Wolfe Research
Greg McGinniss	Scotiabank
Richard Hightower	Evercore
Thomas Allen	Morgan Stanley
John Massocca	Ladenburg Thalmann
David Katz	Jefferies
Shaun Kelley	Bank of America

Call transcript

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the VICI Properties Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please note that today's conference is being recorded today, July 30, 2020. to of call VICI like Gallagher, to now Counsel General Properties. would turn over the Samantha I

Samantha Gallagher

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

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

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

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

Ed Pitoniak

Good you, and us. thanks joining everyone, for Thank Samantha. morning,

us foremost at time. remains what for Here's this

held as because on continue not be. when what best the of In Eldorado stakeholders opening did to transaction strategy. focused call we on finally, would Thursday, exactly crisis May COVID-XX reopen, COVID-XX we any with X. weathering be; are We know our as what our our We recovery Caesars of our be know assets billion last $X.X all can my this I when not when at certainty time; businesses growth hope earnings tenants’ would able with remarks, offensive the an did would our VICI portfolio return to close; pace to that would

transaction our two, Vegas of Number we operating $XXX participate total on giving of purchased land, when billion and overall Here acres, seeing of acres more loan our brand XX at XX replenishing announced Forum growth while a XX rent three, proximate June Caesars mortgage us to and assemblage our know we're VICI's offence four of proximate our opportunistic Center provide our new we giving strip business Las Convention the strip facts. validated of also have the embedded closed and a continued the million reopened. all strip intention million on land another our added VICI’s in potential Vegas represents. our and opportunity $X.X that its at the this land today, only for June, that long-term assets. scale VICI produce all the have July up in two quarter market leading model growth to generated at large incremental X.X% pipeline. portion key center Las XX, a Number we growth. $XXX It to seen returned that operators to deepen annual and one, of the end Number and four, July Eldorado-Caesars to XX merger will rate, growth cap regional assets now results strong through assets, virtually Number improving at recovery

XXX% quality collected QX. VICI achieving July, our in and contributed growth able and This XXXX, growth do our the to which benefits about were to financial a XXXX QX quarter. adjusted high will XX.X% rent, merger operators rent a XXX% and go speak to EBITDA will we in and collecting few causes David of you among from fundamentally cash Caesars to of take of in REITs But of tenants, among XXXX we EBITDA growth which REITs on performance. because in American of able all Kieske quarter and the year-over-year, the VICI We details very believe opportunistically me EBITDA moment second continue give rate performance very QX believe Payne the In for VICI American moment, performance. For delivered all back own John depth, – let will discuss root the be tenants. various our more was our have of XX.X% highest offense

the collecting is rent tenants’ any REIT, strength For the its model business REIT’s multi-tenanted business models. strength the of of aggregated

gaming five strength, durability operators are our QX, And and the Casinos tenants National, gaming operators liquidity, operators. Penn our Caesars, Rock, of specifically, gaming agility All business of JACK their Hard during generally, this showed Entertainment time mainly and Century at and models.

operators estate you the XXXX, where As strongly number spent in success manager. believe time I've have did and estate, of experience the in leisure, come as into leisure and global real In sectors, sector as dynamic operator recreational gaming coming operators a as and a most are hospitality a and in driven to hospitality. I know, I've most I an investment both real and of

five course how our the operators this are. and just crisis, energetic, Over have shown skilled, decisive COVID-XX they driven of

revenue action action to their be ready rates yet. of our economies treasuries. during minimize light; their sectors cash quick leisure and burn reopened seeing we're Here's key and and green effective even and what and to are up action action factors to safely costs to health and reopen the restore given EBITDA to state operators’ and also many quick the closure; they is local quick once local have period when of to last finally, haven't months; effective effective shown over What shore quick to the other liquidity; effective the that few and businesses their

open their proof VICI, in more of rule To potentially safely, we're is our the and about Payne. model, strength now COVID-XX about operators our our over John out of strength the But on and the for VICI, crisis and cannot our for our REIT virus resurgence crisis the we've lead could the which as may provide reclosures not call what fact, in sober of them At that far want states cities and to operate We seen demand I'll casinos. over. or the very sober, quality of the tenants fact benefit. long ultimately can COO, of turn for, everyone's and turn depress strong the so quality As tenants, business gaming for built John? gaming is hear to tenants’ businesses. this in President

John Payne

Good Ed. everyone. Thanks, morning,

quarter quarter very another VICI. productive XXXX of The was second for

Over with short-term the worked to with we've leases. certain past non-rent JACK related several respect our our months, to under Caesars, provide requirements including tenants, limited jointly and Century relief Entertainment Casino

on near-term operator’s we've Century. Accordingly, As and will as Caesars we we needed announced said based circumstances. this capital individual solutions our in agreements modify short-term the quarter, work unique for certain provide to past, requirements partners each expenditure during for to

revolver at Entertainment April an detailed rate, more to to initial facility operating the in release, XX% with increasing able reopening lease relief a modifying are our in well the noted principle VICI current and provide add lease existing to cap for at also existing agreements integrity gaming term, certain years short-term an our covenant JACK. and commencing to XXXX additional loan also of attractive intently while temporary preserving value our facility and with through second These the agreements to five we expansion Racino, stakeholders. the earnings while partner as in protecting rent ensure modifications business fund Thistledown the pandemic, we on help in Additionally, to focus more and long-term agreed and loan as the providing press during on that for as their the yielding term JACK quarter, operators partnered our

States We have and properties throughout been robust longevity with the seen Property United regional reopening of many experienced levels. by the the now, you a consumer have casino And met resilience, of and the of experience. exceeding volumes. As the profitability as durability likely healthy testament year has cases, landscapes across mortar to casino and demand. pre-COVID in is brick many this view prior very

While destination Las we as and to recover longer which Vegas, value markets proposition may fly-to over markets in decade. take remain such proven over a has believers

and VICI periods in XX% and shareholders with Vegas investors, assets about long geographic over the from this time. of a markets balance have drive-to good As Strip the regional Las engineered exposure real markets And represents from during of rent and coming we approximately believe time. investing for XX% we remaining the estate think our

we since belief class. to real the have reopening we the our estate communicated a gaming three superiority many nearly as past, VICI the showcasing sectors. Over of results We real years, firm other early industry believe through in estate is gaming started asset attractiveness

at have to through While benefits of fortunate as investors we estate we pandemic long-term ultimately VICI and greatly complex, transactions. navigate as is for and us and decades team, our the unique within the times on are industry the continue experience accretive gaming to real gaming management focus investing which growing

existing Forum which million adjacent from outlook we of acres valuation the XXXX. In for Vegas. acres June $XXX Caesars Las announced the surrounded our the of gives planned Harrah’s approximately before And purchase terms the our viability the acre. corridor continuing land a with with transaction We have asset growth structure into that financial approximately Caesars of from gravity existing goal market the contiguous same part transformative ROFRs and and we land on to Harrah’s the in $X.X their the agreement Las accelerating Vegas pipeline upon City, mortgage the to put/call will to Eldorado transaction This our assets, And Orleans, merger. our with with per acres. days finally, seek through Caesars and Harrah’s will of of flexibility allows by Park of and a while VICI, to our the two million beating and call we acquired attractive an at restocks for New growth for Indianapolis Convention the benefit income partner Horseshoe, our on ROFR Hoosier XXXX from with very leases our ago $X.X over XX, closing, Center secured on providing in we along modified sits of Caesars, well proven combined Harrah’s for on our Atlantic to Strip XX option Grand by Vegas XX center to of as Strip future. total XX, time, embedded $XX.X of million Baltimore. be us rent Caesars ultimately Las Indiana and land with it with Laughlin XX for converting transaction, the of the Simultaneous leases adds annual a July on acquisitions transaction terms assets announced growth loan incremental consideration strengthen completed This This XX the intended annual of million development Over incremental that of third-parties VICI $XXX structure of Caesars billion. OpCo/PropCo mortgage ramp decades.

and In VICI’s our growth very will unmatched of and yield active across embedded accretive to for continue believe continue gaming our spectrum a investment addition broad stockholders. dialogue robust other this to with to we and opportunities, pipeline consistent, operators maintain sectors,

balance will David and discuss Now David? call our sheet. financial I'll turn who results the to over

David Kieske

John. briefly sheet second our and Thanks, to then liquidity. results financial balance move I'll our and the quarter for touch on

Before the all accounting, to across for team their management, my me gratitude pandemic. finance asset legal let closing just quarter and sincere express I quarter, remotely the this during our discuss efforts acknowledge and

billion at the such same While at $X.X lucky a are transaction. to a team. closing cohesive time are VICI we have We

XX.X% quarter. which acquisitions average Caesars increases on result transaction. revenues adding closed the XX, XX which our increased of the Century $XXX.X rent of closing Total the equity diluted of Thistledown million share related in the count million increased over Eldorado advance on the over increased total June, for of by $X.XX held rates. QX were the AFFO QX a in XXXX from the loan approximately was XX.X% as JACK year-over-year forward of XXXX. XXXX For share million XX.X% February diluted and XX and quarter offering offering interest And acquisition or per in interest while the of million, carry and result in AFFO the over the settlement while Cincinnati $XXX XX.X% transaction weighted an our AFFO quarter XXXX. portion was of in closed QX total also GAAP our Rock million, June The million Hard the agreements cash a the to quarter Greektown, Cleveland, XXXX during less the for balance negatively revenues XXXX, XXXX sale $XXX.X XXXX. XXXX year-over-year increase to $XX.X which to income were our quarter QX QX due approximately related escrow bond for impacted for interest shares in in sheet of negative and Eldorado added the million on $X being expense approximately decline entire basis January

of quarter Our of our which G&A ratios total in line X.X% lowest for was triple represents is projections percentage and as for with the revenues the the the a $X.X million in and sector. full-year one was net quarter,

adjusted model XX.X% quarter. flow EBITDA to net triple efficient of highly revenue our highlight again once cash the as was through for results, Our

for in X, to REIT record adopted for QX standard all us to to investments to the beginning AFFO non-cash XXXX, we standard make $XX.X allowance is losses subject standard. scoped that future there requires or existing assets. allowance In of and like we Losses recall, Current a of are direct gaming VICI to quarter, credit point net income from opposed was a any future applicable reversal allowance no CECL share. may non-cash to the CECL account are leases the million non-cash as which as like provision our accounting to which similar a peers, accounting such which AFFO I'd drove related CECL, estimate share. per allowance in and and you is January operating for in and new related our this again, the as finance the financing XXXX, is second Credit which as type leases, increase As or sales to Estimated investments leases $X.XX a a impact then per in out

to to pay as that used point metric investors performance We and the AFFO should share AFFO per financial ability continue our primary evaluate to be our we believe to dividends. and

incremental portfolio And cash. settlement the acquisition of million million of closed billion balance Convention our on Caesars agreements approximately forward utilized the terms agreement. XXXX, remain of XX as a Harrah’s XXXX Palace balance XX, approximately the Vegas operating price July and from in for to portion the net In connection on Turning and sale we mentioned, the rents June, as upsize of with offering the land our full of stock The $XX.XX June, XXXX escrow XXXX the agreements June then sheet to the acquisition share sale $X.X assets mortgage February shares forward Caesars capital of Caesars John the at proceeds the of to that had of $XXX.X fall Center common assets to $X.X from announcement utilizing in adding proceeds the settlement activities, our on three X, of in of settled from were $XXX completed markets in cash for forward billion the the proceeds annual fund proceeds rent Eldorado our June per previously sheet. acquisition forward at and Forum a an on through well total sale of of We acres transaction XX, Las pursuant transaction. and of we pending bond our proceeds $X primary of of the of the consideration billion Harrah's offerings to subject sale XX.X onto gross through million agreement.

on million have hand. of Following this we $XXX cash approximately

interest years no quarter our approximately Our outstanding maturing X.XX%. rate total at of average XXXX. weighted is have The a debt maturity we weighted of X.X average billion and X.X with was end debt until debt

June below of billion of in and the $X is of X under $X.X and June our settlement available comprise debt-to-LTM currently set cash X, $XXX the and and net was range facility net XX, that’s XX. as availability does in of our hand focus impact of June leverage undrawn. million have escrow times. EBITDA revolving approximately times between include credit the forward of As We our X.X maintaining stated X.X cash times billion approximately restricted which on in approximately liquidity This

company million access in the into the forward million addition, XX.X $XXX proceeds XX. of shares future that approximately to has subject from entered In the to the net agreement settlement on June are sale

the per During annualized the dividend share. second based dividend quarter, on share $X.XX a we of $X.XXXX per of paid

for ratio of XXXX for quarter open was equity XX%, line please Operator, questions. as slightly range offering. the above Our XX% AFFO result the June, payout our With second long-term the a that of

Operator

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

Carlo Santarelli

everybody. thanks my for to comments. hear Thanks taking Good questions. guys Hey, from for your you, and

the would at be go we start starters, as and of do some your coming that see would the have the transaction evolved cost activity? of fair there one’s we’ve terms it we’re shrunk right than the period, fair favor at promoting seen in For opportunities kind of spreads, materially of bit my maybe are that that, new pandemic we this John. likely what think debt knowledge you or more from whatnot, and see best kind this I perspective, industry of of will for drawing to has that in of In that as ahead say pandemic as to previously trends, deep capital interest do be and seeing seen things from now. terms trading happens, out be least believe dynamic little John, trends versus of of the the of we’ve kind now, coming issuances do of where flow in at paradigm some the of economic disclosure obviously new kind forward that of a kind from rate in higher and kind macro meaningfully right cetera, et event impact you in of a multiple of contraction look we what operators and

John Payne

staying bit when sure and that available put Yes, because job portfolio their if it’s really back now That be with would had Carlo, and I for in I April, them. opportunity us question. remarks, earlier for also shown is understand starting to in it’s been an opportunities in your strategically communicated so about, in people do Ed I’ve his back at make they’re in we’ve active that tell should that perspective, weeks, David side what being tell we sitting operator and our think their are asking that important here them ample with pandemic, liquidity you’re ball are we’re they now a doesn’t really know lease and back think the and are moving that the David and of that just of We their with defensive it’s remember to getting past open. offensive What from to the completely about grow think question them should not think almost how or I to the our from going question. and or and be with to Ed we’re really and we’re right, as we’ve to the on your the every us transact but throughout these very But moved seeing to as gaming fast should that what consumers us. open, July about I about liquidity. provide point, talk Again, back was current stayed – position, them, to focus good our to working future, it’s on Ed least ensuring are in a there from, understanding there operators from over to would this you our help liquidity also their I’ve Ed the doing, transactions I this, predicting business only like in sale that weigh there And positioning tenants industry, letting five due said on to we’d little mix, here. a answer you, the

Ed Pitoniak

in identified the few of hospitality of equity Yes. it you’ve cited, operators every And heard that equity, rightly the the form the have think about And capital Carlo, major meaningfully does see we they a cost talk to the cost another last frankly, pay not The as gaming, also a capital you pay as have across of of but it us. recipient us back. sector, both of us simply the we months, lot cost them in fact provide capital through fact, permanent the cost rent and capital. you’ve up debt before, And actually capital. being is leaseback. the for the has as of sale gone as capital give I we in of

than So to look of a for rate, their as at competitive generally is it if expressed probably as is cost equity of your debt. yet. rent with point, you cost their lower it a cap while much currently And and becoming

because hard wants and have also do already to starting grow the their that, regional on the we’re want for those focused grow an store bid to operators, be So with fact I store combination. especially who see are the to if OpCo/PropCo will operators, operator to partnering win against bidding very order on count, who very store in an who bidding their it to grow that think to to count want win bid otherwise based on based REITs they count

Carlo Santarelli

be hypothetical about a in go on here a and kind relative of a lower helpful. guys some et potential transaction? at the comment cushion kind you both. take out forward think very looking rate EBITDA I rate kind of Could potentially just provide at I to of you’re your current capital leverage. for debt you quick moving levels, thinking David, in of around the terms if which how five times, That’s look one bit guys of would little of quarter to you fourth does certainly you environment leverage bit Thank one, And little structure cetera, probably could, net you if run about

David Kieske

Yes, to Carlo. Good to talk you.

just right. a We’ll basis times for we’ve five be sub everything run announced. on You’re rate of kind pro forma

we us if what’s in you point and June, out $X.X-odd think raising of raise about the funds here total debt match of that point As billion talked the about which at go future, $XXX with million, likely high at equity power $XXX some some in the equity we’ll in volume million yield future. gives

the ultimate on with capital the leverage do So an and the functionality, got basis sheet, flexibility, neutral we’ve backdrop balance some right obviously that. the markets are going to for now

Carlo Santarelli

Great. Thanks, all Thank very much. you guys.

Operator

Milligan question next from Your RJ Baird. the comes of line with

RJ Milligan

Hey, good the and morning, you mentioned captive guys. of restocking the closing Caesars. Eldorado Ed, pipeline especially, the pipeline, with

of your Just any on thoughts those opportunities. on of curious timing growth on executing

Ed Pitoniak

I’ll mortgage of Caesars, it convention was I John announcement the should undertook what to simultaneous the call, in new helped that over Eldorado they now there’s but center Caesars Yes, was here we mean our mid-June, RJ, question the greatly no land and call with financing now momentarily, purchase. turn activities by

position a the might it do post-merger. in to market they it John. timing to And at comes we that, anything themselves So of obviously with over put anticipated the better than when had I’ll turn large

John Payne

and talked strip, – But Baltimore. timing. ROFR as Horseshoe then I’ve opportunity exactly call about before, said growth in Yes. a plan predict Indianapolis the a our ended has Las or hard as to, embedded Vegas on bit we on obviously put the two ROFRs Look, the the I quite assets our it’s

continue like there’s takeover So opportunities. all Caesars, We see as Bret opportunities. and of they’ll where Reeg to Tom Yunker those

there. about selling potentially I Las supply having heard think assets talk you’ve in Vegas them two one or enough and

business of of short-term They’re deal the in city As opening I absolutely in consumer flights, to Las the attracted. loss believers decrease be the the Vegas. the that and behavior, Vegas to But big big number said some going the of convention long-term, have business. on has the we’re segments my remarks, in decrease issues. based international people Las of with can for really long-term that and are obviously we believers in

embedded out determine what the see of and for So mean with we’ll but just our plays we’re pipeline, have company. embedded to growth waiting the sitting doesn’t to our just that back pipeline

said, spending making understanding As sure I’ve and time on been to know, and them. operators with people active I’ve quite going what’s talking

So see out in it how months. coming the we’ll plays

RJ Milligan

one unique Thanks. convention where your you happy transactions, anticipate more of you’re if to not capital And do we center, that cost with doing the similar the saw with is?

Ed Pitoniak

much. will we’re It capital, be I or RJ be think of don’t the of more a whether with think function situation a happy what cost not our so of I of it’ll organic function we’re around forecasting clarity is production is production how and much the there confidence looking in to at, around clarity and how at there income income and near moment much midterm. certainty the the

if I that to make. again, know want drive I it think David, key you those will will be elements, to decisions don’t the So the structuring we add that.

David Kieske

factors And to it talked we as real No, ownership. the about capital. It’s was of long-term a say – I it. into a obviously to mortgage, was of the related estate of necessarily go not myriad bridge that going synthetic to the same point. cost kind It’s with

RJ Milligan

guys. Thanks, Understood.

Ed Pitoniak

RJ. you, Thank

Operator

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

Barry Jonas

agreements any morning. should instead? think Thanks. Caesars off within the put regulators comparable risks Indiana? regulatory And to about for wanted guys. portfolio get Good to any had the exercise call Hey, to Caesars your or ability start if for in racetracks we assets asking issues, a some how reason access asset around would I you two

Ed Pitoniak

John, on to that? you start want

John Payne

Yes, transaction, any get regulatory I to approval. that I’ll always think start. there’s always I have like you – mean,

spend process. ever years, Indiana – commission condition too of go through having to a me is done who two assets, many at every those acquisition Indianapolis let sale approve to would stipulations we the been years, not of to had we’ve them racing need leaseback with are. XX-plus time need a that we the understand that racing We industry all, So the the to need surprising for to comment in the

that’s the right language issue? be out there you concern substitution? the Should on not now. Sam or there answer So Danny, a to an Maybe about want potential second part the

Samantha Gallagher

I not mentioned, comments not a The those John no we the is put Sure, had was said prior think assets. those call Samantha. substitute than actually from that John. ROFR does This is and John when as different have prior assets. surprising arrangement comments surrounding But ROFR,

period to So the with to they REIT regulators with we the make structure. want our work comfortable or of sure the call. get time In can of intend exercise, put we

Barry Jonas

helpful. guess, talking really about of Caesars I is believe, That’s now. is three And – I operations new assets selling, then at your Great. Caesars

Just to sell can that would need remind operations? they your you curious, us those consent

Ed Pitoniak

John, Samantha?

John Payne

Yes.

I question, what’s the the Indiana, So in if two yes. third you’re assets but and I think then you’re the answer just answered talking to so is about referring

Barry Jonas

Yes. Got it.

John Payne

Yes.

those both in assets. Indiana master and would the those two estate the assets really liked of they yes, referred sit inside consent Indiana real Southern we’ve that been and currently if So, our meet lease the Hammond to

Barry Jonas

Then a operators. various for one, waivers your quick to you’ve CapEx just Understood. agreed

Given so still are the more top in seeing do now we’re markets needed? line, waivers regional margin, you those strength but think

John Payne

was not pretty continue about I we appropriate. well. think these remarks, that negotiated few we’re properties realistic absolutely I with opening his think cautious. waivers our We We when right to it of perform And we’re tenants, about over. Ed a business and now, but in pretty hope is doing the the as pandemic well excited the that, – said are we’re

at for our at the them time expect I tenant. appropriate negotiate we and but were do think again, packages relief for those that, We absolutely this time us

Barry Jonas

Great. all color. the I Thank appreciate you.

Operator

line Smedes the of Citi. from comes the question with Rose next Your

Smedes Rose

center convention go I to just the for thanks. a to moment. Hi, back wanted

I book on views that you just And can about like? it center? production. of bit. on some of sort could your income about look loan? you at talked all cash pushed talk And clarity assume production of wondering, that do the What’s kind was anticipate business you You having just talk been I hand? And with financing that a bit. about be on a Will Maybe you equity? little Will use how it’s out little income

Ed Pitoniak

Yes.

be strong we’ll on to to So convention XXXX of of a or that to doing were had looking within you and as the outbreak crisis, have obviously assets all prior And very obviously built how in conventions the would largely point, postponed Caesars, And hear from to center. for business of Caesars canceled XXXX beyond. been book scheduled which to we shortly needs, XXXX. for book the the for the business had your – up have things are actually would

back of I’ll the focus our of the that equity of obviously raise mortgage, David terms over it June. our to in In main turn David? was financing because

David Kieske

Smedes, Ed. to to good Thanks, Yes. you. speak it’s

the $XXX-odd As XX, upsized obviously when we in an offering, proceeds deal resulted about the announced we we million. and gross – equity equity announced on offering which June simultaneously

to efficiency run As And connection our mentioned that, about as to leverage capital equitizing. fund will that there’s I balance on match in a sheet with basis. raising an we neutral earlier, ultimately over we talked

access about it. think today, have end that on So as we mortgage, an million date on about funding that forward, we we and then as we’ve to here sit really cash have hand got $XXX doesn’t which

So mix likely that of we’ll a fund with cash.

basis. on And a leverage match some ultimately debt some here of forward in future as at probably that to the that to quarter go neutral fund closes that third markets then and point the

Smedes Rose

then acquisition this expect you to be earnings? accretive Would to

David Kieske

I on the would. mean, it we rate to X.X% cap leverage a accretive is earnings. basis, neutral and Yes,

Smedes Rose

do have wanted ask Great, you, the thanks. when I on color then any Casino Greektown reopen? you And to might just

Ed Pitoniak

John?

John Payne

in state word casinos to to Detroit going got the the allow We August. that yesterday Michigan open of is

August or was it think I X. X

and news So out the sure that exact state that relatively in yesterday will Michigan. happen Penn I’m date, but come will give an shortly out, me came here of the to

Smedes Rose

Great.

guys. you, Thank Okay.

Ed Pitoniak

Thank you, Smedes.

Operator

And your comes line the DeCree John of Gaming. next with question from G. Union

John DeCree

How’s you’re guys. Hey, doing?

Ed Pitoniak

from Good to John. Thanks, hear you.

John DeCree

land in you’ve purchased to that on Las question ask quite Vegas Wanted in a time enough Good. spent the bank land that. and about your

initial lease tenant, with I the existing but about was if maybe part. wondering parcel that? you parcels? Or believe not bought, to your restrictions any you’ve the your a So existing what the talk you parcels might that on could work of if it part or develop if And part is of your I just it? the wanted wanted are some how on have those And partner relationship options develop would to your you or

Ed Pitoniak

Yes.

jump can me Samantha So correct I get I’ll and and if wrong. anything in John, then start

insurance will an owned, to in in leisure formal this occupy we in XX of our right. land be turn use part to execute to acres and Caesars have Caesars land for agreement that we real right land the once the agreement tax, With land regard they the become not built things our like And within the a have also that use security. able were continue whereby cover already fall, absolutely on that of and the will purchase acres subject we until to land, transaction we it. arrangement of we lease overall Caesars. for own, estate You’re that the did occupying cost with already The already the XX Caesars we’ve to own, the will

see the that Vegas growth giving Las In us as long-term play. Las what land, our of but growth as destination. The as long-term And land business is most chance of is Vegas. love growing vision tourism, we and in terms tourist as participate city of a us Las we also again, to which Vegas land frankly growth very believe what for still entirety. choose to a to way we capitalizing work doing, people gives global be growth of on Vegas Vegas its the the only a growth of And our of where by of live long-term we strongly to Las an to our this overall growing And relationships. see this as place the not Las do the as well to opportunity in a in

developer. We are a not

land of does Vegas. answer highest great what ultimately what XX should capital, do. kind time. REITs timeframe, Las now? rewarded where Because we not order to question realize and of that land generally is development if development partner what over developers, the come the not VICI’s providers this bulls will of use And best does growth will are risk, provide years the do again, great who over in to raging is X take of on to risk does from with still We development part And get we for on

John DeCree

on follow-up quick that. A

restrictions entitled a partner point, but that well be Or complimentary it’s used this any building if If potentially there away would gaming. you hotel Caesars maybe to could question be casino tenant it we it’s for do Maybe may your could for at a you today, from the John, expect I’m be, find better were too to on that soon nearby? there not would what sure as the be owns for? competitive? to land

Ed Pitoniak

the I Yes, be that mean, the it’s is, way the greatest too amount too destination. early because you develop, to what Way you I tell, way to would it you and traffic what’s tends you of to whenever around of to say be for attraction complimentary want greatest realize overall amount John. early. the

John DeCree

Ed. it. Got Thanks, for me. all That’s guys. Appreciate it

Ed Pitoniak

Thank John. you,

Operator

Wells of from Your next Fargo the line question Stender with Todd comes Securities.

Todd Stender

suspect land thanks. Most I of have see would the guess. But earnings some regarding my been parcels. answered questions Hi, drag, you’ll I

you’re with the land that yes, cover earnings that expenses, with get about mortgage impression maybe How having Caesars maybe forward? cash real some drag parcel, will the producing not flow If think combining some just but but equity, of the you estate. going I this the do funding operating

Ed Pitoniak

David?

David Kieske

And obviously plays minor balance our sheet, early decide given the right ultimately the nature we how very Ed’s of would million right in $XXX But that the days ultimately de and very, very, minimis with land, that the that have to and might we long-term do drag on about acres right acres mix. that what to incremental then at time, if be million the XX point out you on think asset of really out $XXX lease. the that’s very we asset approximately or determined. it’s start there about, other $XXX the talked when capital but invest of to VICI time as total partnership the Todd, producing acquire some Yes, come drag, million that at XX vision,

Ed Pitoniak

at, neutral, not equity. of million $XXX leverage Todd, Especially as looked a i.e., when

Todd Stender

it. Got

I timing, And this QX. some impression, the case, is think seeing the a Maybe that that’s timing that is of late that’s And settled? equity? to I the forward got if maybe Okay. around be

David Kieske

Yes.

on. working We’re

with As now speak. and you intent a and talked we working about announced on everybody, as of it we we diligence that know, through letter documentation

a to sometimes portion forward you’re forward – settle And to mid late quarters of ultimately close. we’d use when So we that that expect that’s some of right, third that probably agreement. would when

Todd Stender

right. All you. helpful. That’s Thank

Operator

Shojaian Your next question of line with comes Wolfe Research. from Jared a

Jared Shojaian

morning, taking good Hi, my Thanks question. everyone. for

time we you for Now of that period Can the about And below should has when your your well you’re dividends you ratio is right AFFO historical Creasers talk how deal is payout that the September on reevaluate typical thinking about assume go-forward target. just here? closed, it? kind your

Ed Pitoniak

David?

David Kieske

We Yes, bumped at work of bump for quarter. in bumped Jared, we dividends your don’t Yes. mid-year XXXX, in thanks and it to joining QX transactions. we our thanks an of increase in adhered QX closing annual dividend. the it our We this for or of XXXX.

assess terms October So make obviously We our we’ve and got going of our any we business time outlook are of decisions where where the in work with and the forward. closely we before we are pandemic state COVID, around are ultimately of declaration and September tenants in where terms and our the payout. board liquidity,

a that third on shares cautious. sheet as to offering. approach is silver, our we’re earning ratio where quarter going we’re And the because So we’ve in the talked XXXX little June, since non-income about, our high payout had Ed are the bit we balance right now of the just But world. with

and VICI the it of So in put never the we decision a out position as going board ensure forward. we’ll cut right – there evaluate or be to to make REIT dividend has with change a dividend their to that use that

Jared Shojaian

multi-year then the that devaluation many Okay. assets a crisis potential has the or than Thank might've just know you you get perspective? pretty more question, a your on then and reevaluation this the regional here think And thinking on as separate a to on see of Vegas, how you, are David. obviously, this. you stable revaluation bullish I lot about shown Las gaming assets Vegas could are side flip regional realized? opinion world probably And love we people Do of but thoughts sound

Ed Pitoniak

investing a the not point, should saw your will about that right. This is far generates Las They temporary secular We jump – Yes, come business you're This we again the estate operating real Las obviously a any okay, at are. days this yes, do it institutional value And I'll of an estate Jared as asset starting can end. obviously is coming real are as under in. overhang into to it of the not gaming absolutely speak obviously regional is year, long-term well and gaming not for going a where, have eventually movie has will think Las in the regional, was crisis possibly Las caliber come movie. do of class given as negatives seeing posting negatives estate theaters an Universal believers But very start John can was here, said, in yes, that Las we very after in and back real Las and it validate host a Vegas sector it results over itself whole well in categories initially XX come investor Vegas then estate It valued. January I you roaring from it Blackstone really in a are not Vegas, positive for and can real forward as But are real streaming think reasons. should estate. of identify. leisure showing first of like are is do to long-term threat crisis long-term. way We They other the this you just which February. other validate secular Vegas. is not Vegas you change kind think hospitality looking a sector perspective and Vegas in outperforming, We will secular with

verify own can obviously But so is the of that the John? gaming. again regional to validating in over how John integral turn the customers. this I'll So are we of operated to and regions lives we they assets the many who just regional think has it very

John Payne

smile operating almost to than here durable from that the have is understand as face they regional my who's starting how on someone add a other see of loyalty career world their to I consumers. not much it's Yes, his to nice the these XX years are, spent assets,

are country clubs social people heard probably have are you to people, and their that in ever as successful. is quite their our they've even me seen the you during been mean, up, As worst these see where say go It's businesses this clubs we've or where lifetime that pandemic entertainment. I open can friends or this

quite and when to other where agree well. open nice variety and are look at movies, areas it's compared especially see that. So a it And been you they've up done that common, I that these have of assets to with theaters, is and assets restaurants these struggling

Jared Shojaian

Thank Great. for you very much the time.

Operator

next of Your line Greg question comes from Scotiabank. with McGinniss

Greg McGinniss

morning. good Hey

Ed Pitoniak

Hi, Greg.

Greg McGinniss

access XXXX to given factor Ed, am apparent the curious, return the business. regional open just capital to your and the ability QX I for largest tenant

Just so? about and what to do wondering to reinstate year become to comfortable would more why you feel for did for confident to guidance the need happen you

Ed Pitoniak

time, the think Greg. I we need of Yes, benefit

– as uncertainty be we're in anything. and lack clarity uncertainty We economy much and a a leads being of lack and still of clarity. and of pretty it able have period not confident to to in great when you are uncertainty nation forecasting, a still as bullish And national

you see this if believe have be over turn David, point, guidance to So to added I'll thoughts. to return we premature. at any it fundamentally to you would

David Kieske

that the talked was other I is we Yes, No. think we've the we there's pulled Eldorado noise a deal on thing reason about, run our predictable, is new pretty CECL. now also through guidance, of out noise of in pulled – implications that speak you is flowing Greg say non-cash of especially to now rate. business CECL, the the is part When transparent, would pretty and I closed

have quarter related sheet. new bringing the around the to assets three those in Eldorado of third transaction We their closing a and balance charge will on

to hard and that predict it's exactly pinpoint that. So

probably point in assess into we'll XXXX calendar So guidance the returning to next time.

Greg McGinniss

agreements two-parter with Thank then quick Fair a And Caesars enough. Okay. just you. on the regulators. state

how And financial So of aware sale the that is secondly, of you what first about burden And rent such the think operations? of business of there demands be level versus other POU? the additional Caesars. we that required now as should is are impact casino commitment any do to the

Ed Pitoniak

been believe in obviously the And for have do Caesars partners financial incremental expansion terms publicly in regulators obviously additional everything the the way the started, have as Greg, that in New those is their in business. with that example the capital. will requirements obligations we all on we're you're of referring, they and the principle think I announced requirements CapEx Jersey the benefit performance assets return incremental as and enjoyed will of

Greg McGinniss

you much. I agree. Thank very

Ed Pitoniak

Greg. Thanks

Operator

question next Evercore. with comes Richard from Hightower of Your line the

Richard Hightower

Hey, good morning everybody.

Ed Pitoniak

Hey, Rich.

Richard Hightower

well. doing everybody's hope I

a that and that's maybe – JACK here the so then there? of have might sort features we bit of prepayment there capital about dynamic the we a JACK? couple that? revolver And for incremental term, How X% that the JACK replace about five to end source term know should five with that that I know respect and or initial a any little just other should term year tranche what cheaper. had if VICI years, between to came to income options ones, So potentially that loan secured are loan of capital paper And would given you of it's to it Entertainment, the think and another do if before the

John Payne

some point in shore consistent time and our well. assets is our months, not of million correct but feature a Yes. liquids Ohio, their and at helping of $XX approach helping amount, wrong. is up as XX is a me our this opportunities looked for a small believe after the are if you’ve that, I'm a it's tenants we've But doing million, when prepayment was to anything with seen there in where XX a given win-win I If nothing open extremely kind reinvest – liquidity

Richard Hightower

Okay. sorry. Go ahead

Samantha Gallagher

they for Obviously, two accretively. that our repay we with lack And redeploy capital over years over who billion to by Business were not Payne, for half works VICI the the returned led $X to John Development, in confidence transaction. a loan, and Rich, last certainly do ability of

are opportunities them if always we're and there best can. to execute out we them there, source going compelling are that confident We on

Richard Hightower

staggering done. a is guys It of you all amount have work that

peers the multiples earlier, at net that XXX%, think are cap So lease the and across looking in names you in think rate given on guys relative some a all VICI and closest but just more net I agree at you lease are sitting the are And to the valuation in stock that but low incremental REIT question across respect to second where twist quite with compression are retail from your Ed, space, question of performance that. do we my are maybe board, with the focused collections traditional where we do some is, evolution?

Ed Pitoniak

really the upslope, that threat is we're think positive that Gaming obviously a lives posting relating. things evaluation Whether generalist is on arguably quality right in very good the point things a investment your time secular were now frankly that on and to gap I'm well anyway. like showing are REITs, be not fundamental high are this e-commerce, are collections of dedicated I having do think It and represented measure be of how signs themselves experience seeking going well But millions it threat. But is And game performed. I crisis how Americans. Rich. we to stress estate. there any much point these the given given that Rich the the do leads yet results. this as the We are as recognize do strain I we reserves integrated not Yes, represented some secular again really very of threat and performing analysis for very showing sure income by quickly show the part destination ultimately rent to that beginning to and believe and there I And yes for the of the the – deserves yet. broad not think point, to by real to strongly to and we’re premium explanation not three as not tenants sector your place-based closed secular adds-up ultimately take of to is And implicit streaming is, media. being parity to to us community, REITs, recognize investors starting think going all of moreover again your our

Richard Hightower

Great. Thank you.

Operator

line Your comes from the next with Thomas question Stanley. Morgan Allen of

Thomas Allen

good HI, morning.

you you June So how the of well of for the through remarks, kind tenants maybe on businesses the think John COVID about cases picked operations in held-in hearing are talked I prepared since what the that latest end up?

John Payne

I've add going continues as not heard change of to business jurisdictions, to strong a talk having. that I when to up the back perform. occupancy Good Thomas. in the the levels the you, some heard as in I regionally have conversations to Yes. business some to be business. much restrictions on but see lifted to going more to been they the some continue facilities think the I've continue amenities you're are Again, based

Thomas Allen

Boyd the versus echoes just when what looking how about of follow-up funding entire this week. as then capital Okay. you're returns you the a you're said on thinking the you. That earlier estate Thank are And property? or multiple paid my improvements real for

Ed Pitoniak

David, you to take want that?

David Kieske

for rate each we've significantly of obviously is return JACK the add-on that's to with because out higher an then It the the overall situation, in of Or circumstances not of of the it expansion we earning lower the XX% to going specific giving for is capital it’s – which it's $XX warrant but where is XXXX, producing be partly VICI I goes and are and funded, it ballroom, coming future. income have around asset, where we though is would what price? parcel an playing asset but situation. a in unique are good factor the risk until asset that us incomes the it's question April part Yes, facts in cap of just incremental assets small million but we're been and And but a income obviously upon higher Thomas. so dependent the it each the it, is even just really very maybe return, amount a acquiring enhancing, a it's of that's probably examples improved, than and is, but

Thomas Allen

Okay. Thank you.

Operator

of Massocca And next Ladenburg question the from John line Thalmann. with comes

John Massocca

Good morning.

Ed Pitoniak

John. morning, Good

John Massocca

you quarters assets, market, about largely about of the give to maybe almost performance but nature couple almost comfortable just performance the you've kind would the know for a of Strip or transaction any post-pandemic an long-term underwriting of I to pipeline, you you're your you leases, So underwriting where didn't see think talked do in pre-pandemic of underwrite you valuation Las think need as in appropriate we levels? Vegas

Ed Pitoniak

say would we business comes that growth, it I Payne. am to you that, when talk John going it John attach words will never have any kind our over to John will anything to to I over turning Payne a here to moment. growth, in but just hand about of it head-to-head. with I

John Payne

rebound. to been XXXX, moving city It's some on Vegas hard that and even they Vegas. And loud during consistent offer. to a the and in short-term need about are with Las that this are this we that again, I time this, going to we is the follow but on that. has mean believe hurdles Look very to and is going long-term business think time I've consumers even have that this over things investors. we've restrictions to I Yes, really are get it been to over, XXXX what enjoy they

have spending it enough, reinvent your EBITDA that? do to see themselves to next determine been business that and and to consider the of the As is exactly that's as they point pertains lot have short-term is I a continue months to we'll this, we appropriate what to has heard we're the in in we what the have. resilient the operators what properties and stress can't like about study that What city an asset, the quarters then we'll couple to as appropriate long-term to resilient are rate? the be well how on is this underwriting to time the now cap to level cap the underwrite continue the use about again, talk lot more are and But Las with the successful how as you but a Vegas, But rate.

John Massocca

see operations, mean, correct gears I'm leases? is as forward? And be but potentially should these regional me of are leases we the modifications if Okay. that Hard then we only given the and going strength are any I may kind of could of wrong, switching of or the bit, expect versus little pre-pandemic Penn a Rock kind more

Ed Pitoniak

John?

John Payne

going predict what's can't happen. Yes. I to I mean,

been, about we've as we've sober I said think a couple times, we've of that. been

in all still opened that the are of We a open which Michigan, fact have will pandemic, exceeding their operations successful, the shortly and our numbers. XXXX have of almost operations of have in been middle quite other than some open here

happens to wait in feel we than in to the but are States, but just have So we did this early have to business and if we going United won't monitor on in need strong back see we're be better much July here path, May. and the what just be going to concessions, any to continue we'll there obviously

John Massocca

all me. Good. Thank much. That's you for it very

Ed Pitoniak

John. Thanks

Operator

David from with comes question next Jefferies. Your Katz

Ed Pitoniak

David?

David Katz

Hello. you hear me, Can okay?

Ed Pitoniak

David? you are how Yes, doing,

David Katz

thinking sure Sorry. I defer? I quite talk to of covered catch-ups those wanted about a invested? real know in versus be it's sort the by that. could a properly place you're bit you've the how I detail. preserving of of down are there and about interest estate’s just that appreciate like terminology and the more road be whether value making that waivers And would CapEx

Ed Pitoniak

Yes.

principles in when believe not capital bear and I they think operators spent. one our well-spent first the we capital that of is that of ultimately the is beneficiary key David, are pain the

profit. at opposed business the the they not manager terms again it the hotel third-party when not and capital qualities operator of of that revenue, day well-spent one also of but a think a competitiveness, end business model is dictates for may the model, is spend prefer or in is much where model to it's self-reinforcing say may get this the because return the this the harmed, capital, responsible first all loss positive and of beneficiary I We capital as the on.

and long-term, spent. the So in over of you we to be needs is prevent a ability to as spent didn't it not assets can capital the pointed when rightly believe this way model this in they deteriorating model out

David Katz

Okay. Thank you very much. That’s me. from it

Ed Pitoniak

Thank you, David.

Operator

comes from Your final of America. Bank Shaun question Kelley line the of from

Shaun Kelley

Hi, everyone.

But VICI of going ratio comfort the mentioned think this about the we've The here they portfolio as it come? a you how is forward John one or do performance just is say think about said underwrite should that level remarks you mix suppose, XX-XX and your kind just that strategically, of there's sort has of you kind obviously for investors been management, a mixture or I seen wire after COVID an target that? a especially that loud, me, from throughout undertone XX-XX curious everything split you'll the of the prepared under think out about through do perspective acquisitions question how call, regional portfolio. in for appropriate or between a Just but to Vegas just in

John Payne

Yes. about target. talked don't think I we've a ever necessarily

as lot of we've that I we positioned are Vegas talked the different in in that come that destination only we this about region in types also as Las think has with is the Las REIT as what Vegas, business a the as operators. diversification space itself resorts invest about to well every in like well local in should the really market all

I remain ago think that think at has around we want like X.X you diversification of now that's during tenant But have be where been, those I think our that continue you'll were So types We us don't to We I and And want where you just diverse. absolutely philosophy we But Shaun, to the can five in say many and We that today has than different hear one numbers. with liked is. base. exactly years grow. we to being XX-XX, this our pandemic. see to company helped has tenant this started diversification ultimately see markets. grow

Shaun Kelley

the Appreciate everyone. Thanks, time.

Ed Pitoniak

long capital the as and investments a only John not it market want We and income up in And with in has recognizing was year do capital to this strategy. when income appreciation, production over chance the our add a of would again term by adds the could regional. I which appreciation to what give investors chance investors to give obviously want superior Las believe steady, both Shaun, that, I steady Blackstone a assets. as just appreciation a income Vegas our think we said that greatest at rightly And Las we and combined our validated a we REIT Vegas value the but capital income, compelling as to to predictable year, early long-term made think for the very opportunity last give of also

Shaun Kelley

you. Thank

Operator

further this are And at there time. no questions

Ed Pitoniak

the operator. our on ability of offense you, again provided of of the you call. QX, we two. have with With to America proud rent track VICI’s those strongest me one validation in close We��re any our tenants. of to both and well out, collection businesses the of our being next reiterate Operator, our rent To to of over holders with good the and growth results concludes go back quarter that results before business with the closing deliver all believe this cash our in we most for and our the health the XXX% in REIT $X.X all. billion call. $XXX we collection rent or Again, of today's REITs, and to please of growth stock on thanks – that to Caesars thank you let million transaction brings, annual rates other year Thank are on

Operator

call. conference today's concludes This

the please now disconnect. may You on Presenters, remain line.

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