VICI - Earnings call transcript Q4 2020

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the VICI Properties Fourth Quarter and Full Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please note that this conference call is being recorded today, February 19, 2021. I will now turn the call over to Samantha Gallagher, General Counsel with VICI Properties. ahead. go Please

Samantha Gallagher

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

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

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

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

Ed Pitoniak

a the I up hang especially consensus, growth support the a on to American call. per If declining. much lot here's it which joining XX key But see stands coming grow share know Good XX of year-over-year you Kieske share. crisis. any been growth? growing, an reduced where interesting relative far, so a pretty of are call the or to In VICI's AFFO so share. dead basis. is in of AFFO and for already be VICI's In their of elaborate the very triple-net REITs for year XXXX, growth it In commentary growth? basis, on we by U.S. to we're on. Once achieve in the achieves away want also where again proud we or per VICI Was staying out REITs projected goes triple-net to per absolute whole, AFFO two year Thanks, can think thoroughly all of next Is is it's consensus AFFO per share finality dominated call tough asking it’s that AFFO the as and consensus are per a question. growth declines worth in it for with thanks from quarter. stands David declines consensus it to grew the think moment, COVID-XX in in reason steady or as results, take Did and morning, will grew or one for the facts so and two-thirds little we likely We know VICI for quarter XXXX on it's of, VICI's you everyone XX.X% a seconds, the message three us. post a according AFFO, line to in the XX.X% worth fourth Samantha. XX XXXX, peers remarking the XXXX, year out when this share see But

back strength is relationship the I is take users the were large earnings of I business business able announce in across model the the our on to early when aggregated June cash. taught reason as crisis XXXX. in increases strength in of is REIT. we, COVID-XX models. REITs COVID-XX is XXXX the gaming among of the U.S. financing, generally, us the REITs and Piers. QX, XXX% REIT the later key rent strength cap has XXXX call, that And what specifically, able our tenants our REITs the the criticality and non-gaming mission the As is summer, a what crisis we for gaming our of XXXX said real has VICI derived their lesson and management the we from gaming real demonstrated This spectrum, operator, XXX% with strength This that from their Caesars gaining great durability strength dividend our believe estate. go of built strength the financing of strength in we of estate were of durability one on our models and of relationship key offense tenants their business have customers, durability, the Forum VICI reason larger key is of as reason a and and and Chelsea is the the relationship of models time, It's end our to American This the customer and first relationship with that to collected business

half and growth trajectory a which XXXX, there's our Finally, coming it’s of behind take XXXX. into in truly force AFFO power clarity our from But XXXX, a and it's and lesson AFFO I the growth second second gaming the driving lesson, the TAM owners, focused the American gaming The in we aren't as power betting the sports through on ecosystem. within emerging revenue. betting real of of the sports estate is of that XXXX. And burst

as channel property. can, course they online new business, So revenue this much of realize hope whether profit or we tenants and from our of as in

competes long-term the betting greatest for occupy for we American consumer, discretionary to impact the and of our consumer. the sports is gaming in estate potential sector. sector to consumer will As by we will greatly customer come, advantage If will greatest sector real create and of competitive owners come. consumer growth value, or discretionary American a for American audience decades Every new tenants believe assets that and time and sustaining given the an long-term generate a American the expanding spending value American have gaining and the the can attention, achieve have that sector attention likely outsized and gaming. own will years

seize gaming competitive deeply conversation. into American betting insert two we Think it. strongly consumer What What American broadly conversation the of we sector, believe a an betting are is getting betting an sports. So the all-consuming powerfully does more sports mainstays number about great the as and American American American represents gaming offer powerfully but day getting Number is ever new casinos American on two when comes into today is when weather, advantage. sports. believe discretionary woven one, sports To conversation betting the weather, now most sports going? here about

tend the American paradigm say last potential technology over at a two is sports if you bigger enabled book Every message be next Cell asset look gaming. gaming younger American headwinds. terms technology gets classes and behind deliver a partner the the We and an of The real tenants. tens classes Barstool, in enabled class these classes those tailwind. each for asset great performance new just in total examples, a suffering engaging asset centers, new the audience. to that with REIT American have Penn few and our return, years of asset to Conversely, especially on customers, with few examples. able two This of customers. towers, superior involving cited sports from is enabled from companies audience is new, ESPN, betting Just class conviction believe time to related are to time REITs exclusively data that a benefit should activating the logistics new gaming every represents such tailwind. reaching the Caesars estate the reaching, potential winning And the struggled younger betting technology new years, three asset e-commerce and paradigm of high and the gaming technology enabled technology tailwind of sports and

two real year of the growing which enduring all-in-all, our of has one proved hear will many great decades. the So of have of was you growing sports thanks after consuming sound the crisis And sound things, represents in the their consumer return for last preference American for compelling of XXXX American in its to by things. back. one discretionary through of American what next offensive be of to you estate The as experiences consumer years. strength, over that American showed, consuming will many defensive months arguably gaming many and been about, been strength roaring gaming the also writing sectors The lifetime. the betting, opportunities the the consumers XXXX And coming preference American the in gaming most

Some and bookings year transient I'll are moreover, the above many continues pent Payne, John second COO, their of outlook discretionary done on on and call about week, to to up on that consumer may for believe Sunstone XX% what doing of who the the the weekly Hotel levels, and comeback turn are Arabia, talk XXXX cited John? consumer. Investors a the economy good American have will this our earnings sector, continues to roaring at the the property as we and over demand that benefit have is last of what our President call the leisure and of the anecdotes improve CEO, around you reopen. Sunstone heard large will to currently We capitalize John now half the friend basis. Maui one double-digit we

John Payne

for completed was transaction off. hard Thanks, short-term XX%. our activity, approximately year, needed or with In growing $X.X by our everyone. our revenue tenants the solutions XXXX, $XXX to to million, nearly pay our as we good unfolded VICI Ed, morning pandemic each provide closely busy and as another annualized team worked basis. year XXXX of as the to on work billion continues Throughout and of

track our our the stated, to-date model business Ed testament and strength record rent As a to approach XXX% and our tenants. of with quality our cash collection of collaborative is

bricks undoubtedly are consumer the aware, challenges you the not gaming a a mortar As the the with replacement casino that many of experience. year, despite industry over past has has the found and recovery demonstrated

regional expansion, XXXX leading margin above to assets in industry demonstrate and of levels. portfolio and profitability markets some Our cases continues

Bret and the While strip. Entertainment outperform Caesars to our by led Corrado Vegas Anthony at team the continue peers on Tom properties, Las Reeg, entire Yunker,

or. potential within we important for encouraged different and As opportunities quality see and remember by VICI, volume experience beyond in and And the is start we that have both of sectors explore to gaming. XXXX, investing and not underwriting credibility ahead. either the is to transactions we're we very It and

operators. gaming to meeting to support be with relations and to spend in studying growth, develop time tenants’ We look we together. to opportunities continue when order gaming, to operators for sectors continue beyond We transact come the ways right existing and prepared in with

Our gaming by continue dwarf investments will non-gaming the likely due investments, sheer to gaming financial assets. magnitude generated our to

abide while by sector hard all with our industry principles do that partner we'll be leading partners is parties. we We we through accretively that shareholders risk value growing superior create success and and work driven believe the to our to-date. the We portfolio in geographic great will growth. integrity believe position And estate returns our collaborate with same However, VICI fair for of yield deals, the to our diversification, our choice. prudent continue levels deserve. We real maintaining have to

financial turn and guidance. the over I'll discuss our David, results to Now who will our call

David Kieske

weather, safety some credit and ample equity VICI on XXXX John. navigate emergence, morning, we transform our to the we since liquidity And was drawing maintained on have and all that and balance Thanks, put able heavy to a balance ensuring our structure everybody. a we've sheet, joining us continue for all deserve. start today. partners as want never and designed provide to protection with forth Thanks focus sheet. Good weather to revolver. cycles, maintaining our relentless while and capital very I our

of million net achieving mission on proceeds during million XX.X million summarize, shares remaining share Just still investment ATM XXXX, at have discussed year-end. In program. of a net as we're forward of and our proceeds $XXX.X February million $XXX And we many you, in as XXXX, June $XXX we representing million sale We with to approximately through through grade an a equity of billion rating, we've agreement. XX.X $X outstanding, proceeds raised and interest in we a closed this of transaction, retire blended fund these and an $XXX of path. $X.X down were Last on profile. comprised of lien notes. XXXX these stagger were at notes notes remaining billion to unsecured of X.X%, continue secured February, XX used year to Eldorado continuing second maturity rate of of a the our offering five, proceeds the we X% used million mix to the raised seven

During a weighted composition weighted the XXXX, X.XX%, our significantly debt. average with rate secured improved At cost weighted debt years. of we and of a had average in maturity emergence, we of XXX% X.X interest

As is maturity and of average of X.XX% unsecured, our with we debt weighted sit interest today, of a rate average here XX% XXXX. X.X no maturities until weighted a years with

stated full As our ratio transaction, was it our EBITDA Eldorado full into is a of leverage leverage year-end, of we And LTM does $X.X liquidity, maintaining true ample income billion reflective X.X growth. not that the XX-months currently meaning net approximately rate include from flexibility available This transaction, in run and you range our had if between for consideration of of December leverage rent ratio of of X.X X XX-months XX, within would times. be net well debt accretive a to take future not times. as from providing approximately as our of

guiding how to and due, of debt year, partnership composition approach acquisitions. to have and the less in lock on the sheet, finance volatility. laddering sheet of we debt, total market a going principles our safeguarding coming in capital reiterate, equity markets, credit balance develop which XX% access whereby against than continued XXXX highlighted disciplined to accretive all one to are, Just funding for in balance and markets any future strive the to certainty We're we our maintain access transactions from opportunistically company's our to

As X.X I leverage migrate sheet to balance is mentioned, and to that achieve long-term grade to maintain times a ultimately net and investment our goal basis, X issuer target a and of an unsecured debt ratio on EBITDA the between rating. ultimately

the million. total GAAP income to increased QX over revenues QX statement, turning Just XX% in to $XXX 'XX

year-over-year, closing share, first Convention mortgage, per AFFO approximately share. were year revenues increase XXXX increases, prior year, to and $X.X $X.XX Caesars These million, which full Jack Forum total fourth XXXX, share adding quarter the over was acquisition Cleveland due was the share diluted per while as revenues AFFO million $XXX.X or AFFO during annual result loans. the is of and of of $XXX year increased diluted the bringing resulting the or GAAP $X.XX offering. full a XXXX Chelsea Piers the million XXXX. per For the billion, transaction, the John $XXX.X temporary the for from approximately mentioned, XX% of diluted Eldorado June XXXX increased XX.X% increased and Center the mortgage to year Thistledown the over count of half related dilution equity in from the AFFO XX.X% an

high Our eliminating significant non-cash strong items. the results in proportion EBITDA, once the run our range, our XX% highly margins again of triple-net continue model as a highlight efficient corresponding in given revenue, and increase increase to in when

a G&A revenues percentage we million our for lowest in one triple-net and X.X% quarterly quarter, represents year $X.X for was of ratios going sector. the run line believe good quarter, as a total in of and full was only forward, expectations rate Our with which the the the

menu in the welcome of for is lease for detailed Investors to of our point always, streams, our materials. supplement any financials. the a feedback breakdown located you and heading additional under As our quarterly transparency, on which website, We we revenue financial section

initiating per as in Turning absolute a to as share basis. both guidance, for guidance we're AFFO dollars, XXXX well

for implement net January you and income we to were unable in standard, on of of financial ability which will Accordingly, FFO accuracy. the equity leaves we represents accounting inherent AFFO forecast our These due productivity guidance our in us going many $X,XXX investments, year-over-year million and XX, forward the AFFO our of way measuring best are as forward, pending the be share. at to CECL $X,XXX assuming guidance focused diluted a AFFO between XXXX, of the impact to and performance believe pay represents dividends. share, sale the shares, is the AFFO to agreement. unpredictability of with December million XX, growth aware, agreement the on reflect XXXX, the its As maturity beginning to our $X.XX XXXX, settlement the share or $X.XX year diluted per million midpoint evaluating and XX.X% and required the per of date June $XX.X between per estimated estimates be forward dilutive ending which

forward include these the in drawdown not these of impacts pending or markets acquisitions, any impact equity any estimates or addition, capital shares. from do incremental In possible the activities, future dispositions,

share, paid an of we dividend $X.XX per During quarter, the fourth per dividend a share. represents annualized $X.XX of which

Our ratio open line in fourth for for the range with was With please questions. line of our the quarter AFFO XX%. long operator, that, payout XX%, target approximately

Operator

[Operator Instructions].

comes today Please question. Rich from Evercore. of the question line your first Your Hightower with proceed with

Rich Hightower

guys. morning, our bubbles, Ed, the sort for reminder within speak our Good call. valuable on of side start exists we so enthusiastic maybe narrow It's the sometimes that to a reminder Hi. your appreciate thanks comments there. I analysts

Ed Pitoniak

Rich. pleasure, My

Rich Hightower

Danville the going it seriousness. extent to then, through the How master I of sort Indiana. way recontend if side look about at appropriate to if either an giving But roll No, misinterpreting question can you ask help of that, maybe quickly of sort a I'm Southern that's security But all question. the turns on the something at pair ROFR. point, the sort it? And we But value proposition and do maybe for here. in understand the the just terms up to lease, of think at around bigger I'm really explain on us one this of picture Maybe of that? maybe in just and of some narrow

Ed Pitoniak

to that? want take you John,

John Payne

it. sure think the not exact way about that that's I'm I Rich,

as to point, I own a need as operators at think estate. want going to Eastern ever of have first to ROFR very an from sure worked the to going of think that great. their We decide obviously we're have new their opportunity, which land. We're Cherokee XX tribal the Southern the expand portfolio is new if I market, like excited just do as in Band estate about old Caesars, at them real monetize in would excited and to that they some for real when to for tenant outside now Indiana, known job my time we're help Indians almost years we

again, we add to negotiate, deals this Rich, growth So, have how embedded the to our with And In and to do other to about. sell you've when if we'll real estate. see ultimately wants try came seen we just as pipeline. that's Danville, operator

Rich Hightower

XXXX? into stabilized the over going ramp landlord are this the And that Okay, a as up, it? I what press the picture about somewhere how the year you the to should investments of that first But, really year know we be stated John. from that to then coverage little that think in with sort gain to times on release related take bigger the cash but do Indiana. a sort late Southern next also in X.X and measurement of gain other how appreciate I by the end the the sort bit mid tenant puts post-closing, does comfort of color, to of sort us or XXXX question, and into underwriting us period. so any original how Thanks. two? maybe of comfort flows Or compared And or

John Payne

and out go colleagues this in. I'll my jump first can Rich, Yes.

tribe as as incredible have it rebounded understanding know fortunate has is. weren't with who with just the mentioned, to And in when business, regional your there Rich, First, restrictions them record North the the relationship well tremendously I've to their the as been you business. and starts business grow levels, relationship a watch on many partner Carolina of as I

operators seen But as efficient margin started an the the to down. the than give with well April, And in pandemic ever March a the we've So to reopened consumer or as places I business, and more as that's do they our in casino great to returning credit Southern that. open before. shut Indiana, much operating model like them

we there is But sixth excited part deal, to Indiana is business, going understanding And business so, the we as property. how repeat, of this running the and together, to those understand tenant again, from there. and I'll talked we the plan to back went comes critical consumer put we have all into rebound this operate it. we tenant, to We're very Southern they're going our how the we're them to as as develop

Rich Hightower

great. Okay, Thank you.

Operator

of line your Securities. Our Anthony JPM with Please next question comes from with proceed question. the Paolone

Anthony Paolone

the to you partnering Thanks, and morning. John, about and good drive guys growth. your with talked of importance tenants Ed both

bet to way? you thinking Or equally path? non-gaming that types get are you have is do and that As going other think as go product important try just to may about to and assets, you you assets it down try on that

Ed Pitoniak

non-gaming Yes. heavily way that pioneer been have categories marketed, necessarily trafficking advantage approaching in We heavily where want heavily no to are Tony, buying. bid competitive the really may we and we REITs categories. have is into not really and bidding

in excited and And years. more in who we're not the our where end the And we're do, to that economics support of to we can structure. believe categories are XX OpCo/PropCo really did we talked represent. them learning working the who I to opportunity. have the and about we and tailwind what tailwind uniquely Chelsea are think, tremendous It powerful, a customers, the Piers higher It's experiential bit the their is at commodity producing to theme, we takes you tailwinds with and there cultural there, have are for and support see about But either behind And categories sectors, they are we we we're think that's are know, cultural especially and meeting technology next subcategories, demographic identify XX Tony who relationships very also there certain going where as there whole out REITs what triple-net. opportunities around so more with operators enduring of as case or we're time. an obviously getting they are we hard

Anthony Paolone

performance on the in I mean, Okay, balance much might unfolded IG attainable and what of more how sense as then, to great. given the near-term? XXXX, sheet, Any David, the in just portfolio. And the be

David Kieske

something discussed our checkup, the The regular it's it's term also with really agencies, but the the agency with one term loan. for by loan assets. all XXXX, several the Yes. us, of that was Tony, is during unfolding. depth both we times around on our we've pandemic as rating but met secured And

And so pool do do. unencumbered most traditional a we have not asset typical like REITs

So secured in refinance we loan, term into loan the term the acquisition sequence XXXX need out into part of move the debt and need unsecured funding that sort refinancing that XXXX, to come pipeline, what and and we may markets, for what we with potentially and we parcel will additional as XXXX, into acquisitions. in may of into that

securing a has that in stack, is assets, is tenant against of secured a term by VICI's it item. gating concentration and of paved factor, it's our the has path. is So, loan all our cap itself that assets proven GLPI just gaining clear not and simply there's achievable of but for

Anthony Paolone

Okay. And then other just things. of side one last on the follow-up,

again, on given discussion that do look the ahead? as changes of performance think through pandemic, the Just space you the around we investments the yields

Ed Pitoniak

the have Tony, categories It this should. higher. undergone way, an many the process. institutionalization Yes, certainly so have should prices category other go If that behaves

story higher of velocity the day single capital improves cap work a rate a -- to we assets real compression should our of cost in goes yes, And in any real just hard sector take mission, joined than excess everyone years at VICI just next from especially under unforeseen attract to as rate it that that better reason out is as truly asset came of totally on, sure to people as COVID, calling have make crisis. out recognizes frankly, which a class, magnitude as part of that at to estate so there the through should in four about every stands think, making we the time rock equal estate. commercial discretionary start to to VICI at but cap would ago, see But consumer American I compression. prices you what or to Our really, they the these rate

Anthony Paolone

you. Thank Great.

Operator

Please with of question the Sachs. comes your with from question. line next proceed Goldman Your Stephen Grambling

Stephen Grambling

Good follow-ups morning. questions. I guess last on a few couple the of

First, that of weigh any And acquisition in given your as operators about capital be impacting to feel are expectations on the flow how cash or from you opportunities more you easier may potential gaming, to resilience any cost relative less markets current attractive exposure? within or is think broader around perhaps where that you can seller there of moved? are underwrite price

Ed Pitoniak

will and David take part second. the John take first can

John Payne

like resilient and but and we any model. that at downtown But markets, how continue Good company, right they've and we not we company, we've with about these ever on own portfolio. strip, Vegas regional we've morning, also Absolutely. Stephen. started in markets and that only We'd big to believers also there in how fact aren't assets talked we're that since about Look, We'd been they have look a local. talked Yes. we assets change operating started this we study in Las balanced that the wouldn't said now. think the the I like portfolio. have since We've we'll to a balanced

talk grow. And over to the take can David part. how to with thinking to take will help and turn it we'll sure gaming meet over at Stephen, So about about second every all look continue we we'll and but how that turn in market. we them market, I'll of to they're opportunities and every operators time the the invest That mean rock doesn't are we

David Kieske

where regional a there. transactions, of if lot was level not set, where The slower our regional question, a we're or obviously that's but near to as very talked Stephen, times capital about pricing given that's has with X pricing we it correct that the the XX accretive, pre-COVID. kind me be of we is bit always think to has and with Yes. important markets come live the little a what mix we've our wrong, TBD maintaining Vegas, what capitalization. between about, you about back. we leverage Las and deal a something leverage, lot markets talked our is day one we years. all and then the is for I in that focused back and for pricing There maintained. that X.X But And I'm Tony's agencies. think The buy about with is on ramp

to have on have is that AFFO. an to capital basis grow done ensure So to on underwriting our we and the we accretive continue

Stephen Grambling

were any up could non-gaming, pursuing kind you in those gaming? cap classes you And at asset comments spectrum. in helpful. top follow tolerance pursuing equal actually to on move rate non-heavily they that interpret or even that a be huge be higher these, as markets opportunities. the that Should could Or they're a market you are That's because we those then of the some of that that around bid rates down look a you'd

Ed Pitoniak

of be. can long-term. they're all could better proven afford and risk durability maybe because of nature not that heavily mean there exactly could of could bid cap it to had. the the be of profile point But tighter is the what above, asset, It It the barriers somewhat your very that a could bargains rate, to last justify the also are asset be The to we Stephen. paying fact be that to pay over the entry, of and the asset, the

answer, so So, situation this vague sound specific. be doesn't I hope of sort will like it but

Stephen Grambling

queue. Fair helpful. you. I'll enough. in jump Thank That's back

Ed Pitoniak

Stephen. Thanks,

Operator

with proceed with Securities. question Barry of next Please your Truist line question. the comes Our from Jonas

Barry Jonas

Great. Hey, I there? about in embedded on option growth sorry, selling call starting profile Caesars wanted year. believe on has timing Thanks. Centaur talking I or thoughts Any kick pipeline. been asset. And embedded a strip start the next guys. your growth could to

Ed Pitoniak

John?

John Payne

Yes.

on may through incremental market. when they in see feel as one took that Caesars and talk the three do with we need two that don’t Las about are we've And their over announced, years team of very sales Vegas something feeling and our like though will proud continue the Eldorado have and they we're ahead, worked assets they about that still would partner in did they a LA end up this but we've portfolio, is going talked they embedded you pipeline, they Caesars or the process. they are they building deals about what So, seeing to to what

believers few going we're a to mentioned segments. rebound the all in I in market minutes We Las is that's think Vegas. that ago, As big

they real that of in more move obviously have so those to we interested forward And the assets with ROFRs. very owning We're estate want sale.

Indianapolis the that. continue mentioned of have right two call to you're assets partner again, about in year. And also You we'll our with due, great Indiana the put that on point, come talks next

So really -- worked our creating develop tremendous that we to pipeline. years, us over for two embedded on embedded our opportunities with the

have to just with partners As to pertains have to timing, continue that. our it discussions on we'll

Ed Pitoniak

Barry, opening kind could back if on goes around XXXX. of just that add growth in something I remarks VICI's to my

embedded the to place have lot because allowed growth growth grow pipeline, thanks they XXXX, AFFO you that I'm opportunity getting are everybody you're you'll is on in basis to in priced do what okay, in. I of shrank that got VICI and that really the even VICI you XXXX, in multiple. earnings and old what get fully at Someone anything certainly could I fact only a the to that And across couldn't growth at described this bring rightfully is PE point REITs is have growth spectrum encourage period markets in And by valued a peg else into the our we ratios, find in with multiyear appreciated again, or in XXX a school price a it on to S&P find and say, substantially the time. to trajectory will VICI the American being represented growth multiyear especially XXXX. if view in way here, looking we just don't that is profile yet, guy. of produced But because not in, just look a multiple in an Barry, I'm fashion, call. already the we quite And going and the goes lowest Centaur over the current below that the done, future using yes, peg encourage And little what that we calculations in your multiyear growth because we REIT likely old of old well, I XXXX, school, old will a which think really ratio the XXXX. and to growth get

Barry Jonas

concert portfolio? so up, far dispositions the recognizing foresee And with more in been just or you tenant. done it's one Yes. do your then But in any follow prunings

Ed Pitoniak

John?

John Payne

study have an Barry, be to continue to understand I will specifically to this time. opportunity. would But to that, but at not we'll continue there have

Barry Jonas

so Thanks guys. much, Great.

Operator

with question. Citi. Your proceed next question your Please to comes with Rose Smedes

Smedes Rose

maybe into you, And Native think sort away tenant. bit? moving do you have of I from to just do an I tenants you. you on you trend to that wanted will a commercial tribal native Americans a ask touch wheelhouse wondered, just added think already American with more thank see And in be or a second this advantage that little two you gaming? gaming Hi,

Ed Pitoniak

John?

John Payne

question. move in great a their so because casinos. into done It's it's they've see Yes, original exciting commercial well the gaming, tribes to

gaming look And so XX I my working developments. asking, opportunity? just there at Caesars And tribal be will will American with we the tribes, relationships at I tribes you're be. have on based and about experience years’ path, do will other commercial Native there think experience numerous working that think

that Seminoles audits And continue hope outside I to they together. their that what that if the Cherokees. understand we'll them, exciting of got the trend to, because diversify And we've work to Band can like this they with So, I doing relationship for where opportunities in look Eastern with continues, the nation. for do, are quite it's a we nations think meet

Smedes Rose

gaming on thank any to a have of hurdles, entrants in sort given where know are? their interesting. that you rates players John, see the expand Okay, how, seeing to would are foot relative you. that incremental And more an we basis? but other And That's of expect interest sort I you begin space? maybe industry regulatory do will then cap coming see, into you now,

John Payne

of people's space. the a lot talking doubt pandemic a going about burns, eyes. regional that and people caught it's are the experiential still the invest of the great industries companies question. many gaming operators resiliency When or about or Yes, EBITDA, during of cash hospitality attention no the to in that record gaming has it's There's catch talking are -- some are

performed is, are the time, of have quite others mortar, Ed's requirements. bricks flows. the exciting doubt potentially path is, groups the how come sports question you business well into into because I licensing betting getting cash to the that others because at complex, only your operating it's space, comments had beginning and how no is and tie some But the these and will it, do the but of the when more But assets think So, you'll it magnitude as the looking over there's and at not business see growth in you know, I-gaming.

Smedes Rose

Thank you. Appreciate it.

Operator

the line Santarelli comes question. with Please with question Bank. next proceed Your Deutsche Carlo from your of

Carlo Santarelli

if potential in from a Hey, the pandemic higher anything of guys, just noticed whatnot? and that. different anything perspective. and or different? maybe perspective, ancillary thanks, bit that Is kind could you've the the maybe as nature having just around into I there And John. address Opco I terms more I'm of out need referring lines seeing aftermath. at was as people, it's margins you maybe circumstances Is been high the changed a seller’s wondering discussions go perspective, to almost maybe as anything both pandemic, little well whether Are year, that's we're era, now, to from as looking like that business of that's And that and things? dramatically the And your there given towards things the coverage, your been roughly stands prior the tweaked back well level that as that a sellers deals.

John Payne

forgotten believe efficiently on. come out we're to refine of can't dialogue, our ago. well, and this not I model, But we're do I look, XX-years Carlo, exciting went no, to all of it's when and the the they only I tried have operators that. with I'll than guys Well, constant but more type remember touched with in pandemic, these tenants, conversations And start businesses Carlo. of I so exciting that what talked a change they're model so I before seem we've like watch much think operators current have their But think, business in are just the the space. just pandemic, we what to as I due all coverage underwriting, to on out Ed did the it, as operating their been think I about rent or just come those having. maybe pandemic. gaming going the this And that's business happened of to that that about more

how for transactions, to do to grow understand the to there we want to just to our pertains their it opportunity is As I continued them mean, help try company and an OpCos business levers have that. then talked if that. coverage rate a changed. of, and necessarily cap get that And you obviously, we all negotiations there's few those and do about, None into of escalation,

answer add that's I David, wants that's I'd but don't Ed how Carlo. that leave anything So to how if or it. know question, I

Carlo Santarelli

Thank you. John. helpful, That's

Operator

Please Security. Your Wells question proceed Stender the at your Fargo Todd line with next of from comes with question.

Todd Stender

land? not Hi, case? thanks. is have the tribal Indiana Do the Is Southern I on Caesars right, that it

John Payne

Correct.

Todd Stender

Okay.

lower seems does underwrite unique. do How of Band benefit that from Indians, they Cherokee Eastern pretty taxes? actually you regulations, does That Now lower one?

John Payne

rules they're the them Caesars operator, they'll commercial operator same If Indiana, commercial it's follow tribal of facility same or Penn, them, a you're Southern because on is or rules the asking any the about to the when will not whether land. apply

Todd Stender

understood. I

Okay.

off you those benefits, land? So as you're operator, all a tribal get tribal don't if of

John Payne

They're in brand. Hard very Rock the Seminoles they similar to are

I think have they probably casinos numerous the States operate. followed you've that they United around that

Todd Stender

Understood.

share around you, Okay. plans Thank land Virginia on and Casino Danville, Resort? the John. information the any did And you

John Payne

what? you Did share Can repeat? we the

Todd Stender

property. Are of first The proposed the plans. around Danville refusal right there There's any… the

John Payne

project development is Yes, started. that's a just that getting

won and their information and development So getting started. is Caesars about they plan but license there's just it's there, the

Todd Stender

Thank Understood. you.

Ed Pitoniak

Todd. you, Thank

Operator

with Daniel from with at Adam comes question. question the your line Capital Please Markets. proceed next Your Loop

Daniel Adam

everyone. for questions. Hey, taking good my Thanks morning,

Ed Pitoniak

pleasure. Our

Daniel Adam

share So, in million you liquidity, million including from have over ended that $XXX the total quarter $XXX coming with the cash sell. in and in $X.X forward billion you

envious in an perspective a obviously. You're position balance from sheet

one next you the are also cash? pipeline? two over near-term any your now. guess, to quarters intend balance there strength, currently excess capitalized in in deals maybe deploy And You're given arguably the right are to I sheet that had

Ed Pitoniak

capital from landscape Yes, the near-term when the the word silly time to over very I is sake always quickly historically dilution near-term and to ability a tended been a I'll on, to IPO having long-term a to our itself. the short dilution was may to the years prolonged we're to certainly periods not firepower talk on change beginning, taken that equities we of balance capital And when sheet its to to able and about John company should firepower But I are. say, confident, keeping move opportunity going presents when kind opportunity But time in start -- of outlook. we excess like having intend always there, work. accretion be for do from there three use shareholders, But only have interest time. balance have always about mean, Dan. may we've Gabe there for some as our of to can We sheet be we're M&A create endured pretty of but we have put the that strikes. the

Daniel Adam

John, don't nothing follow guess, I know. to up I great. Okay, on.

John Payne

had my Ed to spending things. to safe. focused it's to they're Look, operators where, on reopen now And how think how time, talked able nice to to and talk be about. I'm the to No, be is I begin can betting grow Right to they've do and the and where we talk how new sports they go helping done customers those attract we about and now want do all that. how

have it's to so And conversations growth again. nice the to begin

Daniel Adam

Go great. sorry. And Okay -- I'm then ahead.

Ed Pitoniak

powerful get to to Harrah's value of Caesars, and the growing emerging Yes. in dynamics is COVID a because were as just betting is to of American M&A, of that is to part in power then demand the create considered be genuine American are can Caesars a clears the intense effect, can. M&A incremental and positive think network buyers which as buyer going of lot away that recognizing one many you the to rewards. there the and the is get obviously I Dan, having and driven think as we in in I in increasingly recognition was there it. And be not of add, -- of so stores through network sports desire widely think gaming, being especially that once drive sellers be value gaming. network markets by still jurisdictions pioneers out of powerful in force, effect and with And effect the to going the I creating But are much leaders the continuing and true would need operators supply.

Daniel Adam

That makes sense.

right, access, I think to if market I'm you're alluding mistaken. not

Ed Pitoniak

Yes.

For Whether our being market be. be it your yourself access, your also, partners. to and Barstool partner more DraftKings, FanDuel, valuable access whoever onto true may more and market or valuable William Hill,

Daniel Adam

Great. And to then just turning side. non-gaming the

on timing So to Piers. And you the on deals? be any such alluded transactions structured? update on last a potential follow Thanks. quarter, of might follow how with you an the for the Chelsea Do transaction have

Ed Pitoniak

David, that? take want do to you

David Kieske

conversations doors you. open to real talk the around with way and can't Look, have real that specific with might and meet right to as continue we talk in deal, a have any we've estate. in good talked non-gaming Piers, Dan, in eyes dialogue increase And operators non-commodity, would the that open high descriptive Yes. with the with about But we opened great estate fit it's quality their to portfolio. beginning, whatnot. with, discuss Chelsea timing our great about

it's will we're as working just that conversation balance reiterate on more on John be optimistic But front deploy say the next what that the or. when this But non-gaming some said, we come. So, We're our again, started an the exactly will capital have to not it's and sheet. either can't we've deal that year. very to acquisition active there

Daniel Adam

Thank you.

Operator

line proceed Your Union next DeCree with Please your Gaming. John the question question. with is of from

John DeCree

in Thank the expansion you how for follow exciting that's up about taking and your you for then one Ed, industry. bit Maybe betting everyone. questions. Hi, talked such a for opportunity Ed my for and remarks, an the a sports John. prepared

benefits to the thought if to if clear But not and revenue. of higher referring revenue tenants or in your and or I this directly, just a have think rent a benefit sharing opportunity indirectly your potential you VICI coverage that really and anything of or find books can and themed that you with identified how seeing could leases higher see of tenants. like of ways there's industry ways growth any trends. fund lot guys, picture if folks I'm tenants curious there's given if at look that? sports to But you maybe And earnings direct potential your differently, from an big ways can the little benefit

Ed Pitoniak

Stevens, But of be new would go a as a way, culture that be Payne magnitude would Derek John a Vegas. our know what Derek Yes. No, about be meaningful what viewing has John, the tenants John, John vision John whole it can a very downtown in you great has to provider example. Las operators probably execute is been great fund, the Payne? betting certainly you've certainly has capital been maybe if And our happy envision with asset most which good example there. I sports don't John, would it there. had and a there. And to that question, be to of we an experience talk it's given casino. as realized within the sports chance yet sports can John.

John Payne

really likes betting sports It's of the a uniqueness there. centered that customer a is been and really have downtown type new Vegas might that the facility well facility. and of brand you around lot done John, Las type there in that around

the going a it's scratch betting build right say it's let's example trends great first a trend that of anyway, from casino really since say, now so, what or neat I'd And this on sports just the in during place. are

John DeCree

great a of and I place. books that. thinking It's thinking was I is. types those sports was It Barstool teams things.

tenant it. say provider a that was for John, you. in capital a Great. to going for shareholders VICI refresh some it exchange like, of large let's question for sounds rebrand, So and a could be if

assets. You've Virginia, some for guys. it one the and experienced of few on Danville nationally. you are cycles here And horizon lot to in got a trying a U.S. Nebraska, seems we're space developments, we've the of the this through like to PAM development always quite of number And investors And the calculate new

I'd downstate. that I never talking is would York expanding mean, have about probably about. thought that I again. one New Texas talked conversation But be it's casinos having being

So ball no know Red in in Rock, very get called here. thoughts interesting. seeing towards a of to on call your I your But development? experience, has Vegas site a their realizing curious crystal that's Las are you kind push

So curious U.S.? the in for outlook to get your your on gaming thoughts expansion

John Payne

Yes, that mean, you a XX opportunity and new and John. so Most exciting iGaming. many I'm time into just again, It I for this, up of years has And with three there sports the big whether development an opportunities. is expand quite betting the it operators is I calls New and different out this can't about there's think growth that whole that a of network. time. are Nebraska, you another levers industry. are brought talking already And and comes for but to Virginia where states opportunities their Texas exciting, mentioned that is its potentially York there's

it's It's that structure time. there and just throughout the continue to great and to talk to our sense is United VICI the see obviously makes amazing great we'll our we exciting an of a to operators. just that And or in, something of it gaming future the tenants study. model, and see, way is So, to triple-net now. that for be the about tenants our to John, success right States, normalization it's space it's in we're

John DeCree

And, David, the appreciate John. Thanks, insights.

Ed Pitoniak

Thank you, John.

Operator

of Please your with Thalmann. next comes Ladenburg John the Massocca with Your from question question. proceed line

John Massocca

morning. Good

Ed Pitoniak

John. Hey,

John Massocca

of level and in opportunity normalizes margins to properties had just already Central So wait results me. how you given EBITDA reason like down those level kind some those about of EBITDA about again, real to just are time at sense about touching out a in Or really you the Maybe for one Indiana there's rents rent if to that time and are. appropriate it rent this predetermined get the and maybe pulling I'm record no sustainable timing per sustainable the for se? thinking the questions there think on little do and EBITDA is with a how how is that's maybe if potentially the transaction, that to collecting you Does it transaction? and property? make wait and see

Ed Pitoniak

John David? or

John Payne

clear, right now Well, now. just own the we -- it Southern mean, so right process is we're Indiana I

you that. think I know

John Massocca

Central Indiana.

John Payne

Central. David, that? you want to take

David Kieske

'XX. -- it. could the right, got that we three ultimately that But it which in question other announced a auto we growth tent a we gap, that on hard We people transaction to it's We've we a June of lot it. this the recall folded that John John as build worked similar we into touched had properties pipeline. merged call Yes. the when questions call embedded

January be of a right, runs XXXX of perhaps a lever, you're from call a ensuring the that combination for it's kind of performance what and capital Bret we and then working So Tom team but that their sale needs XX, assets with ultimate put for growth. makes Anthony XXXX. to It's the And those factor will annual and those X, their and their assets. and call sense of third consistent third and have December

of to be cap we're there's myriad between embedded that that going have time, go So, have which thrilled And into a great those be at we're to rate it. factors accretive. that should highly But that some growth. of point period a down excited

John Massocca

any these at we kind question mean, Obviously, of and we to is end other sustainable have individual about there exposure rents Caesars believe a I maybe are but of the trust. there corporate the tenant of property. Or for are I hey, even, don't an the whether day asset that? guaranteed, lot the Caesars. is level

David Kieske

into would question. master with John, did those the things No, transaction a Eldorado it's we fold get of And lease. that the the one good Yes. is

If to on originally, those that call. fold and those a master will had lease. we we the you ROFR recall, foot And a into converted

the coverage leases gives fold from And benefit that consideration, but ultimately, reason, were rent team will This is of the debt protections. that VICI call their of And level enhanced to the is guarantee. growth pay vision tenant, protection. do of corporate the the So they to their or part to benefit and take bringing put rating enhanced into grade improve will credit knowing into down goal investment an willing the the of asset master embedded profile they through up and on we the will accrue Tom set continue which of provides significant achieving Tom's VICI our back liquidity right? side, and something

John Massocca

a me. lot. Understood. That's Thanks Okay. for it

Ed Pitoniak

Thank you, John.

Operator

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

David Katz

the levels getting than obviously Are awful you short. revenues just of I focus working generally And how from about back that? next perspective, Vegas. investment are But projecting how in lot 'XX that? keep are everyone. you I'd couple operators anticipating perspective me years? in. speaking, qualitatively you there's of optimism. love know less your underwriting I'll on an thinking Las Thanks underwriting to it Just Las Hi, for the on Vegas? something are you're Meaning,

Ed Pitoniak

which the of it coke seems allocation, can which Vegas, that in strong moment, answer week industries that as but want course, that John, start answer Las in you David's positive. anyway, has put I net a I a by question? But a capital record they David, just to John this learned out rather will pointing capital we all of took

John Payne

We supply the added ahead customer any business, I U.S. to post-pandemic. it We destination on plane quicker and three of think markets, record think be like that on back many destination think than cities. big mean, to faster this than is This other the that they're market. that going maybe recover. market of layers, Las to a sound will is revenue. in city levers going my earlier years in most We FIT the multiple and Vice believers way in be that probably job. look, I broken touched call David, this Vegas, I pre-pandemic we're has

and this believers has in XXXX like and Las so, compare market, been people Vegas And Dave, XXXX. in the to we're first performance

We'll Orlando, Chicago, that's I think are like cities. working Vegas at performance destination I city unfair. of is of U.S. the Las a that's you And and XXXX, hard. of compare be teams little going worst Miami, to in I when probably is one ever. Las Vegas, compare versus there to year the the other San this very performance which New the resilient, it very York, their Francisco, to mean, look

come Vegas worked to markets, The other that in because regional see revenues of close revenues back to the these type this operators, margin have expansion because the I we've hard seen thing, model. to level, that operating David, very of I'll When say you're going is change Las expansion back margin to fees levels. come think 'XX similar at many they've

to are come And see so that revenues because to have we'll going back.

results we out way [ph] market local results the of anyway, Red talked the and and So just a that of downtown's have changing. from the strong. I've business saying the what that's you in And Rock of, downtown we're believers Voyage seem long about strip circa how market, in seen those results then and

like opportunities we and there's us. the So continue we'll if anyway, for see to market

David Katz

Agreed. Thanks very much.

Ed Pitoniak

you, Thank David.

Operator

Your next of proceed Please question Baird. your from Peter comes Hermann with the with line question.

Peter Hermann

case walk Hey, And well Thanks. Margaritaville rent the color upcoming the some a rent guys. for get Greektown Thanks you for and Can as too? scenario variable the us adjustment through base adjustment? question. taking

Ed Pitoniak

Danny? David or

David Kieske

Yes, I can David. it’s Hey, that. take

that leases we XX which there's annual $X a that exceed the metrics, earn rent. the that put small prior did revenue million a a annual overall $XX.X variable component, just not an and From metrics. the Margaritaville, the Margaritaville, right, for perspective, is it's not Margaritaville, not the on basis. in property, or rent as get percentage rent of prior And since rent exceed did at did we of the revenue million escalator So

that And so, a that was rent decrease, and decrease. was $XXX,XXX less variable than

rent collect, very million So the that the $$XX.X revenue. total And variable $X.X out base XX million we that's million the rent de component coming June. then total minimis our Greektown basis very, of our of only million, $XX.X And again, variable total $X.X is points in is of rent. up on of

total base given So have a out rent plays how small component coming June. to of our that we'll that's again. in And see up

Peter Hermann

Thank Got it. you.

Operator

question. line the with proceed your from comes question next of Kornreich. Please Jay Your

Jay Kornreich

Hey. Thanks, guys.

well. seeing increased true the morning One peers up. recent recently of for they the as pickup? And your for so, this if reason I'm is said you are this if opportunities non-gaming wondering And what's come

Ed Pitoniak

what phrase categories I going it's earlier interesting is looking as described we've to it. been doing an way gone. not market typically Jay, mean, or Yes, off we I should and where

to to we going better present as So mainstream the to to present oriented what opportunities to much are it waiting the that tends want opportunities to would market definition because more be finding most market commoditized. to and by we us, opposed and in more are invest

Jay Kornreich

Okay.

wanted to throw on Just the neck.

So for thanks that.

Ed Pitoniak

you. Thank

Operator

next with the your Your Spenser Green from line Instructions] question. comes question Please Allaway with [Operator proceed of Street.

Spenser Allaway

Thank are terms you. And potential your other top mind the be of betting? that should from upside around there or thoughts York expanding regulation sports on guys legislation online Could New evolving currently? states any then in you legislation just of share

Ed Pitoniak

New betting, means so market do Yes. hear a other culture from say it to be York it Well, I betting State how have right its a doing. expansion. as and once enable any within generally, New will audience betting, York about in or sports lot you. which Spenser, audience to would York say and the I assets many way operators State is sports what will states now. We of around widen don't figures wouldn't is There key viewing good New are -- to a But in truly wants out of what in sports we're it really actually terms

informed So gaming this about highly New we very York, nationwide. excited thoughts but any for don't have again, means around what

Spenser Allaway

one sometime variable just revenue EBITDA, last we year, believe based And Okay. more more, more given structuring discussed on currently? this or I versus any but income thought to events

Ed Pitoniak

Well, or revenue. Spenser, to REIT legislation, not on based allowed law variation profit rent participation. by has are REITs be

continue based. reason, to that to of mechanisms be for all rent we variable see revenue So kinds expect would

that's to David. put think I right it, way the

David Kieske

Exactly. right. that’s Yes,

Spenser Allaway

Okay. Thank guys. you,

Ed Pitoniak

Thanks.

David Kieske

Thanks, Spenser.

Operator

the time. at questions I this are there to queue turn the closing presenters remarks. And in no further call back for

Ed Pitoniak

In we this engaging closing, morning. with Amy. thank for you us you, Thank your

we since started been real real opportunities can XXXX, We've the represents about very present our you prospects. our American estate. are and tell, long-term great our excited situation, commercial gaming in next we institutionalization saying story in As estate the near-term

as Thanks can back that behind fully realized stronger, American everyone. collectively we roaring of has Bye now. conviction thesis witness grown the the only for Our we consumer. and believe be again,

Operator

your call. And for today's conference this Thank participation. you concludes

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

VICI Properties (VICI) 19 Feb 212020 Q4 Earnings call transcript