Vici Properties Inc. · NYSE:VICI
Vici Properties — Investor Presentation (January 2019)
32 slides from Vici Properties's investor presentation, Jan 8, 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: v Sector Revenue Stability Across All Cycles Y Caesars’ Long- term (15-year) Leases Backed by v In-Place Acquisition Opportunities v Potential & Credibility for Substantial Non-gaming Growth 3.6x Corporate Rent Coverage Y¥ $8.4Bn 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 Diversity 1 Broad Array of Revenue Streams 2 Other 13% 1.3MM Casino Sq.Ft. 120+ Restaurants ~14,500 Hotel Rooms Food and Gaming Beverage 50% 19% 50+ Retail Outlets 780K Sq.Ft Meeting ~1,600 Annual Rooms 18% Space Ticket
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 Comple
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 $ 27 $ 30 $ 35 2017 $ 94 $ 46 $ 145 $ 106 $ 145 $ 98 Caesars Total $ 6 $ 14 $ 15 Capex was $ 53 $ 22 $ 12 $ 195 $ 188 $598MM $ 70 $ 141 $ 1
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 Q3 2018 LTM Unlevered Cash Flow1 as % of Revenues 94% 90% Other REIT Sections Median = 53% 64% 63% 62% 62% 58% 53% 50% 48% 47% 45% 28% Mall VICI² Hotel Office Single Home Family Manuf Storage Student Housing Industrial Net Lease Net Apartment Healthcare Strip Cente
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 +89% 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 $8Bn of Activity
RESULTS DRIVEN MANAGEMENT WITH OVER $8BN OF ACTIVITY VICI Has Accomplished a Meaningful Amount Since Emergence. . . January 2, 2019 VICI at Formation December 22, 2017 November 19, 2018 Acquired Margaritaville Pro-Forma VICI Today1 Refinanced and Closed $725 million Bossier City for $261.1 eliminate
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 DIRECTORS NO TENANT / DIRECTOR OVERLAP SEPARATION OF CHAIRMAN & CEO ROLE 0% PARENT/ TENANT COMPANY OWNERSHIP ANNUALLY ELECTED BOARD1 INDEPENDENT CHAIRMAN James Abrahamson* Diana Cantor Eugene Davis Eric Hausler AFFILIATIONS AFFILIATIONS AFFILIATIONS AFF
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% 75% 5% Independent Chairman Yes No No Separation of Chairman & CEO Role Yes Yes No Staggered Board? No3 No Yes Market Capitalization $7.6
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 DETROIT JOLIET / HAMMOND Harrah’s Horseshoe Harrah’s Greektown1 Harrah’s Horseshoe Council Council Metropolis Joliet Hammond Bluffs Bluffs N. KANSAS CITY PHILADELPHIA Harrah’s Harrah’s N. Kansas Philadelphia City LAKE TAHOE
Slide 26: Balance Sheet Positioned for Growth
BALANCE SHEET POSITIONED FOR GROWTH Capitalization Summary Disciplined Balance Sheet Management2 (Data as of September 30, 2018) Net Leverage Ratio progression $ and shares in millions 3Q’18 8.4x Revolving Credit Facility ($400 million capacity) $0 6.5x 4.7x 5.0x Term Loan B Facility 2,100 Second Li
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 $486 Million $200 Million $87 Million $23.2 million Rent 1% per year for years 2 – 5 Annual >2
Slide 28: Reconciliation from GAAP to Non-GAAP Financial Measures
RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL MEASURES The following table reconciles net income to FFO, AFFO and Adjusted EBITDA, and Net Debt to Adjusted EBITDA less incremental G&A for the periods presented. At Formation1 – YE Post-HLV – YE December Post-IPO – YE December Three Months Ended ($ i
Slide 29: Reconciliation: Historical Corporate Level Rent Coverage of Caesars
RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL MEASURES: CALCULATION OF HISTORICAL CORPORATE LEVEL RENT COVERAGE OF CAESARS 1 2 Caesars Year Ended CEOC Year Ended ($ in millions) December 31, 20153 December 31, 20153 Net income/(loss) $5,920 $(2,434) Net income/(loss) attributable to non-controlling
Slide 30: 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 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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