Vici Properties Inc. · NYSE:VICI
Vici Properties — Investor Presentation (February 2018)
38 slides from Vici Properties's investor presentation, Feb 26, 2018
Slide 1: Investor Presentation
INVESTOR Presentation Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation and that may be made in meetings are forward-looking statements. Forward-looking statements are based on the Company’s current plans, expectations and projections about future events and are not guarantees of future performance. Thes
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes reference to Funds From Operations (“FFO”), Adjusted Funds From Operations (“AFFO”) and Adjusted EBITDA, which are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). These ar
Slide 4: VICI Has Accomplished More Since Emergence Than Many REITs Do in Their Entire History
VICI HAS ACCOMPLISHED MORE SINCE EMERGENCE THAN MANY REITS DO IN THEIR ENTIRE HISTORY VICI Has Created Tremendous Shareholder Value In a Short Period of Time… Refinanced Substantial Portion of Our Debt, Greatly Reducing Interest Expense -- Leverage Reduced Dramatically to 5.0x1, Bringing it In-Line
Slide 5: Who We Are
1 WHO WE ARE
Slide 6: Mission and Vision
MISSION To be America’s most dynamic leisure & hospitality experiential Real estate company VISION We seek to be the real estate partner of choice for the leading creators & operators of place-based, scaled leisure & hospitality experiences We seek to lease properties to tenants with market-leading
Slide 7: VICI at a Glance: Master Lease Terms
35-year master leases structured as 15-year initial term with four five-year extensions by Tenant. Corporate Rent Coverage represents Caesars corporate level guarantee of the rent obligations for all VICI owned properties except Harrah’s Las Vegas, which is guaranteed by Caesars Resort Collection (“
Slide 8: The Advantage of Experiential Real Estate
Experiences Things Experiences Things Source: Evercore ISI Equity Research. Represents the comparison of 166 Companies that sell “things”, including retailers (online such as Amazon and in-store), manufacturers of consumer staples and durables as well as consumer discretionary items (such as Apple)
Slide 9: Fundamental Advantages of our Experiential and Gaming Real Estate Portfolio
2 Diversified Revenue Streams from Gaming, F&B, Retail and Entertainment 7 Lack of Near Term Supply Growth in Highly Desirable Las Vegas Market 6 Transparent Growth Pipeline 1 Triple Net REIT with 100% Occupancy 5 Tenant Financial Transparency & Strength 3 High Barriers to Entry Given Legislative &
Slide 10: Investment Highlights
Investment Highlights 2
Slide 11: Key Investment Highlights
Key Investment highlights Geographically Diverse Revenue Sources Supported by Well-Structured Leases Stable Cash Flows 3 Parent Guarantee From a Leading Global Operator with Industry-Leading Brands1 Leading Tenant 2 Experiential Real Estate Diversification Across Markets and MSAs Diverse, High Quali
Slide 12: High Quality Real Estate Anchored by Iconic Assets
High quality real estate anchored by iconic assets Harrah’s Reno Harvey’s Lake Tahoe Harrah’s Lake Tahoe Harrah’s Las Vegas Caesars Palace Las Vegas Bally’s Atlantic City Caesars Atlantic City Louisiana Downs Horseshoe Bossier City Horseshoe Tunica Tunica Roadhouse Hotel & Casino Harrah’s N. Kansas
Slide 13: Broad Array of Premium Experiential Amenities
Broad array of premium experiential amenities VICI IS A REAL ESTATE COMPANY FOCUSED ON OWNING EXPERIENTIAL PROPERTIES IN DYNAMIC MARKETS WHERE HOSPITALITY, GAMING, ENTERTAINMENT, AND LEISURE INTERSECT Per HLV bifold Per HLV bifold Per HLV bifold Had been 113 prior to HLV Adding Ruth’s Chris Toby Kei
Slide 14: Caesars Palace: Iconic Asset in Prime Location on Las Vegas Strip
Caesars palace: iconic asset in PRIME location on las Vegas strip Over 27,000 daily visitors Home to The Forum Shops, a 680,000 sq. ft. shopping mall and 4th largest grossing retail shopping mall per sq. ft. Located on ~86 acres of land at the heart of the Las Vegas Strip 3,974 hotel rooms across 6
Slide 15: Caesars Entertainment: Leading Operator as Tenant
Higher trip counts Greater cross play across the network Enhanced tracking of customer behavior Over 50 million members, from all 50 states and 125 countries Accepted at nearly 40 casinos in 23 markets Over 60% of members view it as their preferred loyalty program Allows members to earn and redeem p
Slide 16: High Lease Coverage from Strong, Well Capitalized Tenant
High lease coverage from strong, well capitalized tenant Caesars’ Enterprise EBITDAR1 $mm Caesars’ Capital Structure Leading public casino operator Right sized capital structure Reduced debt post emergence Reduced fixed charges post emergence Leverage in line with key gaming peers Caesars’ Corporate
Slide 17: Significant Diversification in Tenant Revenue Streams
Significant diversification in tenant revenue streams Gaming 48% Rooms 22% Food & Beverage 18% Other2 13% Source: Caesars 10-Q for the nine months ended September 30, 2017. Represents 9 months ended September 30, 2017 revenue by vertical for Caesars. Includes entertainment revenues, rental income, a
Slide 18: Balance Sheet Positioned for Growth
Vici BALANCE SHEET POSITIONED FOR GROWTH Capitalization Summary $mm Pro Forma 3Q'17 Adj. Pro Forma IPO1 Revolving Credit Facility ($400mm capacity) $300 ($300) $0 Term Loan B Facility 2,200 (100) 2,100 Second Lien Notes 767 (268) 498 Total Non-CPLV 3,267 (668) 2,598 CPLV CMBS Debt 1,550 1,550 Total
Slide 19: Clear Path of Identifiable and Actionable Growth
Clear Path of Identifiable and Actionable Growth Broad Opportunities Across Identified and Other Experiential Real Estate Assets # of VICI Properties Las Vegas Convention Center As Well as Any Caesars Real Estate Purchased Outside Clark County, NV +84% Increase in Number of Properties 1 (Acquired 12
Slide 20: Harrah's Las Vegas Acquisition Demonstrates Value of Growth Pipeline
Harrah’s Las vegas acquisition demonstrates value of growth pipeline Implied Cap Rate1 7.7% Year 1 Rent $87.4mm Purchase Price $1.136bn Undeveloped Land Disposition $73.6mm / 18.4 Acres ($4mm per Acre) Attractive Amenities 2,530 rooms / suites with over 1,600 upgraded over the past 2 years (60%) 1,2
Slide 21: Right of First Refusal Assets Provide Incremental Acquisitions Pipeline
Right of first refusal assets provide Incremental built in Acquisitions pipeline On November 16, 2017 Caesars acquired Centaur Holdings for $1.7bn1 (12.1x LTM EBITDA2) Centaur owns and operates two gaming assets Caesars is expected to build a ~300K sq.ft. convention space on land acquired in HLV tra
Slide 22: Harrah's Las Vegas Acquisition Compared to Single-Asset Trades
NOI ($mm) Harrah’s Las Vegas Acquisition Compared to 2016-2017 Single-Asset Trades > $70 NOI Cap Rate (%) Source: Real Capital Analytics (RCA). Transaction was for a stake in the property; bubble represents the implied price of 100% interest. 5 Circle sizes represent relative asset value 1 1 1 1 1 1
Slide 23: Organic Growth from Three Caesars Option Properties
Organic growth from three Caesars option properties http://investor.caesars.com/releasedetail.cfm?releaseid=932263 “ATLANTIC CITY, N.J., Sept. 18, 2015 /PRNewswire/ -- Caesars Entertainment Corporation officially opened on Thursday, September 17th its Waterfront Conference Center at Harrah's Resort
Slide 24: Additional Las Vegas Land Provides Opportunity for Further Growth
Caesars Palace Harrah’s Paris Planet Hollywood Venetian The Mirage Bellagio The Cosmopolitan Additional las vegas land provides opportunity for further growth 5 DEMONSTRATED ABILITY TO CAPITALIZE ON STRATEGIC OPPORTUNITIES & MONETIZE EXISTING ASSETS Caesars land VICI received a ROFR on Caesars’ expe
Slide 25: Tenant Portfolio Offers Additional Acquisition and Development Opportunities
5 Note: Caesars is under no obligation to give VICI preferential treatment over competitors if multiple bids exist on any property. Harrah’s Las Vegas Caesars Palace Octavius Tower Paris Las Vegas Bally’s Las Vegas The Cromwell Flamingo Las Vegas The LINQ Hotel & Casino Planet Hollywood Resort & Cas
Slide 26: Multiple Avenues for Growth
Multiple Avenues For growth M&A Framework: Clear Acquisition Criteria Market Quality Asset Real Estate Quality Asset Income Quality Accretion Necessary Return Thresholds Core Portfolio Caesars Call Option Properties Caesars LV & non-LV Properties/Lands Acquisition & Development Partnerships with Cae
Slide 27: Proven and Independent Management Team
Proven and independent Management Team with expertise in real estate, gaming & hospitality BIOGRAPHY Previously served as the Vice Chairman of Realterm and currently serves as an independent director on the Board of Ritchie Brothers Served as Managing Director, Acting CEO and Trustee of InnVest, Can
Slide 28: Board of Directors
Elizabeth Holland AFFILIATIONS BIOGRAPHY CEO of Abbell Associates, LLC Currently serves as an independent director of Federal Realty Investment Trust Serves the Executive Board and the Board of Trustees of International Council of Shopping Centers Craig Macnab AFFILIATIONS BIOGRAPHY Held the positio
Slide 29: Key Investment Highlights
Key Investment highlights Geographically Diverse Revenue Sources Supported by Well-Structured Leases Stable Cash Flows 3 Parent Guarantee From a Leading Global Operator with Industry-Leading Brands1 Leading Tenant 2 Experiential Real Estate Diversification Across Markets and MSAs Diverse, High Quali
Slide 30: Appendix
3 Appendix
Slide 31: Master Lease Agreements: Triple Net Structure
MASTER LEASE AGREEMENTS: triple net structure provides Security & EARNINGS Predictability Over the three years, the $350mm minimum is allocated $84mm to CPLV, $255mm to Non-CPLV (total $339mm) and the rest to CPLV/Non-CPLV as tenant may elect. Includes $10mm attributable to annual golf course fees.
Slide 32: Caesars is a Leading Gaming Operator
Caesars IS a leading GAMING OPERATOR “Fair Share” Analysis of Key Locations Actual vs. “Expected” Revenue1 “Fair Share” 100% (Casino captures revenue in proportion to the number of gaming units in the market) Source: Caesars Oct-2017 Analyst Day Presentation, Company filings. Note: “Fair Share” is d
Slide 33: Properties Located in High Density Population Centers
20 properties located In high density population centers Kansas City Memphis Las Vegas Chicago « « « « « « « « « « « « VICI Current Properties 100-Mile Radius of Select High Density Population Centers San Francisco Philadelphia New York Indianapolis Key Source Market San Diego Louisville People per
Slide 34: VICI's Strategy for Executing on Growth
VICI’s strategy for executing on growth Demographic projections Economic projections Propensity to game (for gaming assets) Gaming trends / share shifting in market (for gaming assets) Market Quality Location Building construction quality & integrity Building condition Asset Real Estate Quality Reve
Slide 35: Tax Reform Enhances Tax Advantages of REIT Structure
Tax reform enhances tax advantages of reit structure1 Individual Rate Deduction on Ordinary Dividends Effective Tax Rate3 Illustrative Potential Benefit4 Pre TCJA Post TCJA 39.6% 37.0% 20.0% 29.6% 10.0% 35.0% 35.0% 20.0% 28.0% 7.0% 33.0% 32.0% 20.0% 25.6% 7.4% 28.0% 24.0% 20.0% 19.2% 8.8% 25.0% 22.0
Slide 36: Reconciliation from GAAP to Non-GAAP Financial Measures
Reconciliation from GAAP to non-gaap FINANCIAL measures ($ in millions) At Formation1 - Year Ended December 31, 2016 Post-IPO - Year Ended December 31, 2016 Net Income $421 $583 Real Estate Depreciation – – FFO $421 $583 Direct Financing Lease Adjustments2 (52) (57) Amortization of debt issuance cos
Slide 37: Calculation of Historical Corporate Level Rent Coverage
Reconciliation from GAAP to non-gaap FINANCIAL measures: CALCULATION of HISTORICAL CORPORATE LEVEL RENT COVERAGE of Caesars Amounts during 2016 and 2017 primarily represent Caesars’ estimated costs in connection with CEOC’s restructuring. Amount during 2015 primarily represents Caesars’ gain recogni
Slide 38: CEOC Reconciliation of Net Income to EBITDA
CEOC Year Ended December 31, Twelve Months Ended September 30, 2017 ($ in millions) 20152 2016 Net income/(loss) ($2,434) $337 $425 Loss from discontinued operations, net of income taxes 13 4 – Income tax provision/(benefit) (26) 14 13 Other income, including interest income (8) (47) (22) Reorganiza
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