Vici Properties Inc. · NYSE:VICI
Vici Properties — Investor Presentation (May 2019)
32 slides from Vici Properties's investor presentation, May 7, 2019
Slide 1: Investor Presentation
Exhibit 99.1 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 VICI Properties Inc.’s (“VICI or the “Company”) current plans, expectations and projections about future events and
Slide 3: 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 EXPERIENCE
Slide 4: VICI Provides the Optimal Combination Of
VICI PROVIDES THE OPTIMAL COMBINATION OF: ¥ Sector Revenue Stability Across All Cycles Y Caesars’ Long- term (15-year) Leases Backed by 3.5x Corporate Rent Coverage v In-Place Acquisition Opportunities Y Potential & Credibility for Substantial Non-gaming Growth ¥ $9.1Bn of Activity Since Emergence?
Slide 5: Portfolio Income: Character & Quality
1Portfolio Income: Character & Quality 5
Slide 6: Fundamental Advantages of Our Experiential and Gaming Real Estate Portfolio
FUNDAMENTAL ADVANTAGES OF OUR EXPERIENTIAL AND GAMING REAL ESTATE PORTFOLIO Diversified High Barriers to State & Local Triple Net REIT Revenue Streams Entry Given 1 2 3 4 Incentives to with 100% from Gaming, Legislative & Ensure Casinos Occupancy F&B, Retail and Regulatory Thrive Entertainment Contr
Slide 7: Income Foundation: Strength of Our Tenants – Caesars
INCOME FOUNDATION: STRENGTH OF OUR TENANTS – CAESARS Caesars’ Underlying Revenue Diversity1 Broad Array of Revenue Streams 2 Other 12% 1.3MM Casino Sq.Ft. ~150 Restaurants ~14,800 Hotel Rooms Food and Beverage Gaming 18% 51% 50+ Retail Outlets 626K Sq.Ft Meeting ~1,600 Annual Rooms 19% Space Tickete
Slide 8: Income Foundation: Strength of Our Tenants – Penn
INCOME FOUNDATION: STRENGTH OF OUR TENANTS1 – PENN Leading Regional Operator Diversified Portfolio Largest U.S. regional gaming operator 40 Properties in 18 jurisdictions across the U.S. 193 Food & Beverage locations 49,400 Gaming machines 1,200 Table games 8,800 Hotel rooms 35,000+ Employees Strong
Slide 9: Income Foundation: Caesars' Investment in Our Properties
INCOME FOUNDATION: CAESARS' INVESTMENT IN OUR PROPERTIES Historical CEOC Capital Expenditures¹ Capital Expenditures by Type¹ $ 222 $ 223 $ 222 $ 223 $ 220 $ 220 $ 30 $ 27 $ 35 Caesars Total Capex $ 94 $ 46 $ 145 $ 106 $ 145 $ 98 2017: $598MM $ 6 $ 14 $ 15 2018: $565MM $ 53 $ 22 $ 12 $ 195 $ 188 LTM
Slide 10: Income Durability Throughout Economic Cycles
INCOME DURABILITY THROUGHOUT ECONOMIC CYCLES Gaming Revenue: 50% Less Volatile than S&P 500 Revenue… 300% Peak-to-trough: 250% Gambling -9% Retail -11% S&P Sales -18% 200% 150% 100% Casino Gambling PCE 1 Retail & Food Service Sales S&P 500 Revenue/Share 50% Q498 Q400 Q402 Q404 Q406 Q408 Q410 Q412 Q4
Slide 11: Income Magnitude and Value
INCOME MAGNITUDE AND VALUE 2015 – 2018 Single-Asset Real Estate Transactions with NOI > $70 Million NOI ($MM) 120 245 Park Ave, NYC 1 100 Fashion Show, LV 1095 Sixth Ave, NYC 1 MGM National Harbor, MD 787 Seventh Ave, NYC Worldwide Plaza, NYC1 Harrah’s Las Vegas 1 80 10 Hudson Yards, NYC 1285 Sixth
Slide 12: Income Flow Through & Transparency
INCOME FLOW THROUGH & TRANSPARENCY Transparency & Integrity of VICI AFFO Multiple & Payout Ratio1 18E AFFOx 18E Payout 18E AFFOx Delta 18E Payout Ratio Delta Incl. Redev Ratio Incl. Redev VICI2 15.9x 15.9x 0% 80% 80% 0% Subsector Triple Net 16.2x 16.3x 0% 83% 83% 0% Single Family 29.0x 30.0x 4% 43%
Slide 13: Growth Opportunities
2Growth Opportunities
Slide 14: Clearly Identified and Actionable Growth
CLEARLY IDENTIFIED AND ACTIONABLE GROWTH Broad Opportunities Across Identified and Other Experiential Real Estate Assets # of Properties Additional ROFR on Any +95% Increase in Caesars Real Estate Number of Purchased Outside Clark Properties County, NV Caesars Palace Octavius Tower1 2 3 Clear Pipeli
Slide 15: Substantial Organic Rent & AFFO Growth
SUBSTANTIAL ORGANIC RENT & AFFO GROWTH 5-Year Call Option Until October 2022 to Acquire Three Properties at a 10% Cap Rate1 with $130 Million of Total Rent as of June 20162 HARRAH’S ATLANTIC CITY HARRAH’S LAUGHLIN HARRAH’S NEW ORLEANS Ability to Generate Highly Attractive Internal AFFO Growth Reinve
Slide 16: Las Vegas Land Provides Opportunity for Further Growth
LAS VEGAS LAND PROVIDES OPPORTUNITY FOR FURTHER GROWTH Unrivaled Opportunity to Deepen the Strip at its Center VICI has a Put-Call Rights Agreement on 18 acres for Caesars’ The Mirage expected Caesars Forum Venetian Convention Center Caesars Harrah’s Caesars-owned 41 acres Palace The LINQ VICI-owned
Slide 17: Potential Non-Gaming External Growth Opportunities
POTENTIAL NON-GAMING EXTERNAL GROWTH OPPORTUNITIES Recreation / Hospitality ($78Bn)1 Fitness Centers ($34Bn) Concert Venues ($32Bn) Theme Parks ($18Bn) Movie Theatres ($17Bn) Spa / Wellness ($17bn) Cultural ($15Bn) Size of Market (Revenues) ofSize Market Sports Arenas ($9bn)² Ski Resorts ($3bn) How
Slide 18: The Advantage of Experiential Real Estate
THE ADVANTAGE OF EXPERIENTIAL REAL ESTATE Consumer Spending on “Experiences” Has Greatly Outpaced “Things” During the Past 15 Years 2,000 5.3% 1,500 Shift in Spending 2.8% Behavior 1,000 2.3% Indexed PCE Performance 500 1.5% 0 0% 1% 2% 3% 4% 5% 6% CAGR Since 2000 Motor Vehicles Clothing Home Furnish
Slide 19: Capability & Governance
3Capability & Governance
Slide 20: Results Driven Management with Over $9.1Bn of Activity
RESULTS DRIVEN MANAGEMENT WITH OVER $9.1BN OF ACTIVITY VICI Has Accomplished a Meaningful Amount Since Emergence. . . January 2, 2019 December 22, 2017 November 14, 2018 November Acquired VICI at Formation Acquired Harrah’s Las Announced agreement 19, 2018 Margaritaville Pro Forma VICI Today¹ Vegas
Slide 21: Proven and Independent Management Team
PROVEN AND INDEPENDENT MANAGEMENT TEAM WITH EXPERTISE IN REAL ESTATE, GAMING & HOSPITALITY EDWARD PITONIAK JOHN PAYNE Chief Executive Officer President and Chief Operating Officer • Former Vice Chairman, Realterm, private-equity leader in institutionalizing industrial real • Previously served as CEO
Slide 22: Independent and Experienced Board of Directors
INDEPENDENT AND EXPERIENCED BOARD OF DIRECTORS1 NO TENANT / DIRECTOR OVERLAP SEPARATION OF CHAIRMAN & CEO ROLE 0% PARENT/ TENANT COMPANY OWNERSHIP ANNUALLY ELECTED BOARD2 INDEPENDENT CHAIRMAN James Abrahamson* Diana Cantor Eric Hausler Elizabeth Holland AFFILIATIONS AFFILIATIONS AFFILIATIO
Slide 23: Strong Corporate Governance Highlighted by Independence from Tenant
STRONG CORPORATE GOVERNANCE HIGHLIGHTED BY INDEPENDENCE FROM TENANT Overlapping Directors with Tenant 0 4 2 Parent / Tenant Company 1 2 Ownership 0% 69% 5% Independent Chairman Yes No No Separation of Chairman & CEO Role Yes Yes No Staggered Board? No3 No Yes Source: Company filings 1.
Slide 24: Appendix
Appendix
Slide 25: High Quality Real Estate Anchored by Iconic Assets
HIGH QUALITY REAL ESTATE ANCHORED BY ICONIC ASSETS COUNCIL BLUFFS METROPOLIS CINCINNATI DETROIT JOLIET / HAMMOND Horseshoe Harrah’s JACK Harrah’s Horseshoe Harrah’s Council 2 Metropolis 1 Greektown Joliet Hammond Council Bluffs Cincinnati Bluffs N. KANSAS CITY PHILADELPHIA Harrah’s Harrah’s N. Kansa
Slide 26: Balance Sheet Positioned for Growth
BALANCE SHEET POSITIONED FOR GROWTH Capitalization Summary Disciplined Balance Sheet Management1 (Data as of March 31, 2019) Net Leverage Ratio progression $ and shares in millions 1Q’19 8.4x Revolving Credit Facility ($400 million capacity) $0 6.5x 4.7x 4.3x Term Loan B Facility 2,100 Second Lien N
Slide 27: Master Lease Agreements: Triple Net Structure
MASTER LEASE AGREEMENTS: TRIPLE NET STRUCTURE PROVIDES SECURITY & EARNINGS PREDICTABILITY Non-CPLV & Joliet Caesars Palace Las Margaritaville Harrah’s Las Vegas (2 Leases)1 Vegas2 Bossier City Initial Cash $493.9 Million $200.0 Million $87.4 Million $23.2 million Rent Current $501.0 Million $204.4 M
Slide 28: Reconciliation from GAAP to Non-GAAP Financial Measures
RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL MEASURES The following table reconciles net income to FFO, AFFO and Adjusted EBITDA, and Net Debt to Adjusted EBITDA less incremental G&A for the periods presented. At Formation1 – YE Post-HLV – YE December Post-IPO – YE December Twelve Months Ended ($
Slide 29: Reconciliation from GAAP to Non-GAAP Financial Measures
RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL MEASURES The following table reconciles net income to FFO, AFFO and Adjusted EBITDA. Three Months Ended June 30, September 30, December 31, March 31, Twelve Months Ended ($ in millions) 2018 2018 2018 2019 March 31, 2019 Net Income attributable to commo
Slide 30: 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 (CONT’D) Caesars adopted ASU 2014-09 effective January 1, 2018, using the full retrospective method, which requires the recasting of each prior reporting period presented consi
Slide 31: Definitions of Non-GAAP Financial Measures
DEFINITIONS OF NON-GAAP FINANCIAL MEASURES FFO is a non-GAAP financial measure that is considered a supplemental measure for the real estate industry and a supplement to GAAP measures. Consistent with the definition used by The National Association of Real Estate Investment Trusts (“NAREIT”), we def
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