Vici Properties Inc. · NYSE:VICI
Vici Properties — Investor Presentation (April 2018)
36 slides from Vici Properties's investor presentation, Apr 12, 2018
Slide 1: Investor Presentation
INVESTOR PRESENTATION
Slide 2: Disclaimers: Forward-Looking Statements
DISCLAIMERS 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 perfo
Slide 3: Disclaimers (Continued): Non-GAAP Financial Measures
DISCLAIMERS (CONTINUED) 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 S
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… DEBT CAPITAL EQUITY CAPITAL GROWTH Refinanced Substantial Portion of Our Debt, Greatly Reducing Interest Expense — Leverage Reduced Dramatica
Slide 5: Who We Are
1WHO WE ARE 5
Slide 6: VICI Is the Next Generation Experiential Real Estate Company
VICI IS THE NEXT GENERATION EXPERIENTIAL REAL ESTATE COMPANY 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 EXPERIENC
Slide 7: Our Four Key Pillars of Value
OUR FOUR KEY PILLARS OF VALUE Portfolio Tenant Capital Governance Operational Excellence and Financial Flexibility Institutional REIT Structure Quality and Diversity Strong Credit Attributes to Fund Growth and Experienced Management  20 Market-Leading Gaming  3.6x Corporate Level Rent  $6.8
Slide 8: The Advantage of Experiential Real Estate
THE ADVANTAGE OF EXPERIENTIAL REAL ESTATE COMPANIES THAT SELL “EXPERIENCES” HAVE CONSISTENTLY OUTPERFORMED COMPANIES THAT SELL “THINGS”—BOTH FINANCIALLY AND OPERATIONALLY Superior Revenue Growth Superior Returns1 250 450 Experiences Experiences 400 225 200 350 300 175 250 Things 150 Things 200 125 1
Slide 9: Fundamental Advantages of Our Experiential and Gaming Real Estate Portfolio
FUNDAMENTAL ADVANTAGES OF OUR EXPERIENTIAL AND GAMING REAL ESTATE PORTFOLIO 1 2 Diversified 3 High Barriers to 4 Triple Net REIT Revenue Streams Entry Given with 100% from Gaming, Legislative & Occupancy F&B, Retail and Regulatory Entertainment Controls 5 6 7 Lack of Near 8 Tenant Financial Term Sup
Slide 10: Investment Highlights
2Investment Highlights 10
Slide 11: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS Diverse, High Quality, Experiential Real Estate Diversification Across Markets and 1 Experiential Portfolio MSAs Parent Guarantee From a Leading 2 Leading Tenant Global Operator with Industry-Leading Brands1 Geographically Diverse Revenue Sources 3 Stable Cash Flows Support
Slide 12: High Quality Real Estate Anchored by Iconic Assets
1 HIGH QUALITY REAL ESTATE ANCHORED BY ICONIC ASSETS Harrah’s Reno Harvey’s Lake Tahoe Harrah’s Lake Tahoe Harrah’s Horseshoe Council Bluffs Council Bluffs Harrah’s Metropolis Horseshoe Harrah’s Bally’s Atlantic City Hammond Joliet Caesars Atlantic City Harrah’s Atlantic City Harrah’s Las Vegas Hamm
Slide 13: Broad Array of Premium Experiential Amenities
1 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 1.3mm Casino Space Square Feet State-of-the-art meeting space ~780K Meeting Space including Caesa
Slide 14: Caesars Palace: Iconic Asset in Prime Location on Las Vegas Strip
1 CAESARS PALACE: ICONIC ASSET IN PRIME LOCATION ON LAS VEGAS STRIP Over 27,000 Home to The daily visitors Forum Shops, a 680,000 sq. ft. 7 acres of shopping mall and developable land th 4 largest grossing retail shopping mall per sq. ft. ~124,200 sq. ft. Located on ~86 of casino space acres of land
Slide 15: Caesars Entertainment: Leading Operator as Tenant
2 CAESARS ENTERTAINMENT: LEADING OPERATOR AS TENANT Caesars is the Largest Gaming and Entertainment Company in the World with #1 or #2 Market Share in Most Markets Total Rewards is the Gaming Industry’s First, Largest, and Most Preferred Loyalty Program 15 >50mm ~65,000 >100mm Brands Across Gaming T
Slide 16: High Lease Coverage from Strong, Well Capitalized Tenant
2 HIGH LEASE COVERAGE FROM STRONG, WELL CAPITALIZED TENANT Caesars is a Well Capitalized Tenant…  Leading public casino operator  Right sized capital structure  Reduced debt post emergence Caesars’ Capital Structure  Reduced fixed charges post emergence  Leverage in line with key gami
Slide 17: Significant Diversification in Tenant Revenue Streams
3 SIGNIFICANT DIVERSIFICATION IN TENANT REVENUE STREAMS MSA Diversity Tenant’s Underlying Revenue Diversity 1 New Orleans Nashville 3% 1% Other2 Memphis, 3% 11% Omaha, 4% Las Vegas Kansas City 35% 4% Dallas 7% Food & Beverage 17% Gaming Louisville 52% 7% Chicago 8% Rooms Philadelphia 19% San Francis
Slide 18: VICI Balance Sheet Positioned for Growth
4 VICI BALANCE SHEET POSITIONED FOR GROWTH Capitalization Summary Disciplined Balance Sheet Management $mm Significant Deleveraging Since Emergence3 4Q’17 Adj. Pro Forma IPO1 Net Leverage Ratio progression Revolving Credit Facility $300 ($300) $0 ($400mm capacity) 8.4x Term Loan B Facility 2,200 (10
Slide 19: Clear Path of Identifiable and Actionable Growth
5 CLEAR PATH OF IDENTIFIABLE AND ACTIONABLE GROWTH Broad Opportunities Across Identified and Other Experiential Real Estate Assets # of VICI Properties +84% Increase in Number of As Well as Any Properties Caesars Real Estate Purchased Outside Clark County, NV 9 35 3 3 1 19 Caesars Octavius Tower Las
Slide 20: Harrah's Las Vegas Acquisition Demonstrates Value of Growth Pipeline
5 HARRAH’S LAS VEGAS ACQUISITION DEMONSTRATES VALUE OF GROWTH PIPELINE Property Overview Harrah’s Las Vegas Acquisition Attractive Amenities Purchase Price $1.136bn • 2,530 rooms / suites with over 1,600 upgraded over the past 2 years (60%) Year 1 Rent $87.4mm • 1,210 slots, 90 tables, 90,600 sq. ft
Slide 21: Right of First Refusal Assets Provide Incremental Built-In Acquisitions Pipeline
5 RIGHT OF FIRST REFUSAL ASSETS PROVIDE INCREMENTAL BUILT IN ACQUISITIONS PIPELINE AS PART OF THE ACQUISITION OF THE HARRAH’S LAS VEGAS REAL ESTATE, VICI SOLD UNDEVELOPED LAND TO CAESARS AND ACQUIRED A ROFR ON THE CENTAUR GAMING REAL ESTATE Centaur Real Estate • On November 16, 2017 Caesars acquired
Slide 22: Harrah's Las Vegas Acquisition Compared to 2016-2017 Single-Asset Trades
5 HARRAH’S LAS VEGAS ACQUISITION COMPARED TO 2016-2017 SINGLE-ASSET TRADES > $70 NOI NOI ($mm) 120 245 Park Ave, NYC 100 1 Fashion Show, LV 1 1095 Sixth Ave, NYC MGM National Harbor, MD 787 Seventh Ave, NYC 1 Harrah’s Las Vegas Wordwide Plaza, NYC 1 80 10 Hudson Yards, NYC 1285 Sixth Ave, NYC 1515 B
Slide 23: Organic Growth from Three Caesars Option Properties
5 ORGANIC GROWTH FROM THREE CAESARS OPTION PROPERTIES VICI HAS A 5-YEAR CALL OPTION FROM SPIN-OFF1 TO ACQUIRE THREE PROPERTIES AT A 10% CAP RATE2 WITH $130 MILLION OF TOTAL RENT AS OF JUNE 20163 H A R R A H ’ S AT L A N T I C C I T Y H A R R A H ’ S L A U G H L I N H A R R A H ’ S N E W O R L E A N
Slide 24: Additional Las Vegas Land Provides Opportunity for Further Growth
5 ADDITIONAL LAS VEGAS LAND PROVIDES OPPORTUNITY FOR FURTHER GROWTH DEMONSTRATED ABILITY TO CAPITALIZE ON STRATEGIC OPPORTUNITIES & MONETIZE EXISTING ASSETS VICI received a ROFR on Caesars’ expected East Side Convention The Mirage Center Caesars Caesars land Palace The LINQ VICI-owned 27 acres of la
Slide 25: Tenant Portfolio Offers Additional Acquisition and Development Opportunities
5 TENANT PORTFOLIO OFFERS ADDITIONAL ACQUISITION AND DEVELOPMENT OPPORTUNITIES Caesars Owned Real Estate Value Creation Through Collaboration • Harrah’s Las Vegas  Prospect to Purchase Additional Properties • Caesars Palace Octavius Tower Owned by Tenant • Paris Las Vegas • Bally’s Las Vegas F
Slide 26: Multiple Avenues for Growth
5 MULTIPLE AVENUES FOR GROWTH M&A Framework: Clear Acquisition Criteria 1. Market Quality 2. Asset Real Estate Quality 3. Asset Income Quality 4. Accretion Other Leisure & Hospitality Non-Gaming Resorts Risk International Gaming Opportunities Casino Acquisitions w/ other Gaming Cos. Acquisition & De
Slide 27: Proven and Independent Management Team
6 PROVEN AND INDEPENDENT MANAGEMENT TEAM WITH EXPERTISE IN REAL ESTATE, GAMING & HOSPITALITY EDWARD PITONIAK JOHN PAYNE DAVID KIESKE Chief Executive Officer President and Chief Chief Financial Officer Operating Officer BIOGRAPHY BIOGRAPHY BIOGRAPHY • Previously served as the Vice Chairman of Realter
Slide 28: Independent and Experienced Board of Directors
6 INDEPENDENT AND EXPERIENCED BOARD OF DIRECTORS  N O T E N A N T / D I R E C T O R O V E R L A P S E P A R A T I O N O F C H A I R M A N & C E O R O L E 0 % P A R E N T / T E N A N T C O M P A N Y O W N E R S H I P A N N U A L L Y E L E C T E D B O A R D 1 I N D E P E N D E N T C H A
Slide 29: Appendix
3Appendix 29
Slide 30: Master Lease Agreements: Triple Net Structure Provides Security & Earnings Predictability
MASTER LEASE AGREEMENTS: TRIPLE NET STRUCTURE PROVIDES SECURITY & EARNINGS PREDICTABILITY Non-CPLV & Joliet (2 Leases) Caesars Palace Las Vegas Harrah’s Las Vegas Initial Base Rent $465mm $165mm $87mm Greater of 1% per year for years Greater of 2% or change Greater of 2% or change in CPI Annual Esca
Slide 31: Properties Located in High Density Population Centers
20 PROPERTIES LOCATED IN HIGH DENSITY POPULATION CENTERS DIVERSIFIED PORTFOLIO OF REGIONAL GAMING ASSETS PROVIDES LOWER VOLATILITY OF REVENUES Omaha Des Moines Kansas City Chicago Indianapolis Sacramento ï,«ï,« New York San Francisco ï,«ï,«ï,«ï,«ï,«ï,« Philadelphia ï,« ï,«ï,« ï,« Louisville ï,«ï,«ï,
Slide 32: VICI's Strategy for Executing on Growth
VICI’S STRATEGY FOR EXECUTING ON GROWTH Acquisition Criteria Market Quality Market Quality Asset Asset Real ` Income Estate Quality Quality Acquisition Criteria Asset Asset Real Income Quality Estate Quality Accretion Accretion Key Acquisition Guidelines • Demographic projections • Economic projecti
Slide 33: Reconciliation from GAAP to Non-GAAP Financial Measures
RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL MEASURES The following table reconciles pro forma net income to FFO, AFFO and Adjusted EBITDA, and Net Debt to Adjusted EBITDA less incremental G&A for the periods presented. For further information, see “Unaudited Pro Forma Combined Condensed Financial
Slide 34: Reconciliation: Calculation of Historical Corporate Level Rent Coverage of Caesars
RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL MEASURES: CALCULATION OF HISTORICAL CORPORATE LEVEL RENT COVERAGE OF CAESARS The following table reconciles net income/(loss) of Caesars and CEOC to Adjusted EBITDA of Caesars and CEOC, respectively, for the periods indicated. Commencing January 15, 201
Slide 35: Reconciliation: Corporate Level Rent Coverage of Caesars (Cont'd)
RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL MEASURES: CALCULATION OF HISTORICAL CORPORATE LEVEL RENT COVERAGE OF CAESARS1 (CONT’D) CEOC2 Year Ended December 31, ($ in millions) 20153 Net income/(loss) ($2,434) Loss from discontinued operations, net of income taxes 13 Income tax provision/(benefit
Slide 36: Reconciliation: Corporate Level Rent Coverage of Caesars (Cont'd)
RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL MEASURES: CALCULATION OF HISTORICAL CORPORATE LEVEL RENT COVERAGE OF CAESARS1 (CONT’D) The following reconciliation is derived from page 22 (Reconciliation of Non-GAAP Financial Information: FY 2017 Same-Store) of the investor presentation “4Q & FY 2017