VICI Properties Inc. Announces First Quarter 2023 Results
- Reports
- Completed First International Acquisition in
- Completed the Acquisition of the Remaining
- Reaffirms Guidance for Full Year 2023 -
First Quarter 2023 Financial and Operating Highlights
-
Total revenues increased
110.7% year-over-year to$877.6 million -
Net income attributable to common stockholders increased
115.8% year-over-year to$518.7 million 47.9% year-over-year to$0.52 -
AFFO attributable to common stockholders increased
73.0% year-over-year to$528.6 million 18.6% year-over-year to$0.53 -
Weighted average shares outstanding increased
45.9% year-over-year -
Acquired four gaming properties in
Alberta, Canada forC , representing the Company’s first international investment$271.9 million -
Completed the previously announced acquisition of the remaining
49.9% interest in the MGM Grand/Mandalay Bay joint venture -
Announced the expansion of existing partnership with Great Wolf Resorts through the origination of a construction loan of up to
$287.9 million -
Purchased
$85.0 million - Entered into a triple-net lease agreement with Cherokee Nation Businesses related to the Gold Strike Casino Resort
-
Completed a forward equity offering with an aggregate gross offering value of approximately
$1.0 billion
CEO Comments
Edward Pitoniak, Chief Executive Officer of VICI Properties, said, “The first quarter of 2023 continued the momentum VICI generated in 2022: expanding our platform, cultivating new and expanding existing partner relationships, and accessing liquidity opportunistically. We added a new partnership and tenant with PURE Canadian Gaming and announced our first international investment with the acquisition of PURE's four Canadian casinos. VICI’s international expansion opens up a new frontier of investment opportunities as VICI aims to be an owner of premier global experiential real estate. We expanded our existing relationship with MGM Resorts by acquiring the remaining
First Quarter 2023 Financial Results
Total Revenues
Total revenues were
Net Income Attributable to Common Stockholders
Net income attributable to common stockholders was
Funds from Operations (“FFO”)
FFO attributable to common stockholders was
Adjusted Funds from Operations (“AFFO”)
AFFO attributable to common stockholders was
First Quarter 2023 Acquisitions and Portfolio Activity
Acquisitions and Investments
On January 6, 2023, the Company acquired four real estate assets from PURE Canadian Gaming Corp. (“PURE”) in
On January 9, 2023, the Company closed on the previously announced acquisition of the remaining
On March 28, 2023, the Company purchased
Other Portfolio Activity
On February 15, 2023, the Company entered into a triple-net lease agreement with Cherokee Nation Businesses (“CNB”) with respect to the real property associated with the Gold Strike Casino Resort (“Gold Strike”) in
First Quarter 2023 Capital Markets Activity
On January 3, 2023, the Company drew down
In January 2023, the Company settled an aggregate 40,592,592 shares under its ATM and November 2022 forward sale agreements in exchange for approximately
On January 18, 2023, the Company completed a primary offering of 30,302,500 shares of common stock (inclusive of 3,952,500 shares sold pursuant to the exercise in full of the underwriters’ over-allotment option) at a public offering price of
In March 2023, the Company entered into two forward-starting interest rate swap agreements with an aggregate notional amount of
The following table details the issuance of outstanding shares of common stock, including restricted common stock:
|
|
Three Months Ended March 31, |
||
Common Stock Outstanding |
|
2023 |
|
2022 |
Beginning Balance January 1, |
|
963,096,563 |
|
628,942,092 |
Issuance of common stock upon physical settlement of forward sale agreements |
|
40,592,592 |
|
119,000,000 |
Issuance of restricted and unrestricted common stock under the stock incentive program, net of forfeitures |
|
515,763 |
|
471,219 |
Ending Balance March 31, |
|
1,004,204,918 |
|
748,413,311 |
The following table reconciles the weighted-average shares of common stock outstanding used in the calculation of basic earnings per share to the weighted-average shares of common stock outstanding used in the calculation of diluted earnings per share:
|
|
Three Months Ended March 31, |
||
|
|
2023 |
|
2022 |
Determination of shares: |
|
|
|
|
Weighted-average shares of common stock outstanding |
|
1,001,526,645 |
|
684,341,045 |
Assumed conversion of restricted stock |
|
1,072,530 |
|
580,886 |
Assumed settlement of forward sale agreements |
|
1,232,150 |
|
2,992,752 |
Diluted weighted-average shares of common stock outstanding |
|
1,003,831,325 |
|
687,914,683 |
Balance Sheet and Liquidity
As of March 31, 2023, the Company had approximately
The Company’s outstanding indebtedness as of March 31, 2023 was as follows:
($ in millions) |
March 31, 2023 |
||
Revolving Credit Facility |
|
||
USD Borrowings |
$ |
— |
|
CAD Borrowings |
|
103.6 |
|
|
|
1,050.0 |
|
|
|
750.0 |
|
|
|
500.0 |
|
|
|
800.0 |
|
|
|
500.0 |
|
|
|
1,250.0 |
|
|
|
750.0 |
|
|
|
750.0 |
|
|
|
350.0 |
|
|
|
1,250.0 |
|
|
|
750.0 |
|
|
|
1,000.0 |
|
|
|
1,000.0 |
|
|
|
1,000.0 |
|
|
|
1,500.0 |
|
|
|
750.0 |
|
Total Unsecured Debt Outstanding, Face Value |
$ |
14,053.6 |
|
MGM Grand/Mandalay Bay CMBS Debt Due 2032 |
$ |
3,000.0 |
|
Total Debt Outstanding, Face Value |
$ |
17,053.6 |
|
Cash, Cash Equivalents and Short-Term Investments |
$ |
247.7 |
|
Net Debt |
$ |
16,805.9 |
|
Dividends
On March 9, 2023, the Company declared a regular quarterly cash dividend of
2023 Guidance
The Company is reaffirming AFFO guidance for the full year 2023. In determining AFFO, the Company adjusts for certain items that are otherwise included in determining net income attributable to common stockholders, the most comparable generally accepted accounting principles in
The Company estimates AFFO for the year ending December 31, 2023 will be between
The following is a summary of the Company’s full-year 2023 guidance:
For the Year Ending December 31, 2023 ($ in millions): |
|
Low |
|
High |
Estimated Adjusted Funds From Operations (AFFO) |
|
|
|
|
Estimated Adjusted Funds From Operations (AFFO) per diluted share |
|
|
|
|
Estimated Weighted Average Share Count for the Year (in millions) |
|
1,009.5 |
|
1,009.5 |
The above per share estimates reflect the dilutive effect of the pending 27,102,500 shares related to the January 2023 Forward Sale Agreements as calculated under the treasury stock method. VICI OP Units held by a third party are reflected as non-controlling interests and the income allocable to them is deducted from net income to arrive at net income attributable to common stockholders and AFFO; accordingly, guidance represents AFFO per share attributable to common stockholders based solely on outstanding shares of VICI common stock.
The estimates set forth above reflect management’s view of current and future market conditions, including assumptions with respect to the earnings impact of the events referenced in this release. The estimates set forth above may be subject to fluctuations as a result of several factors and there can be no assurance that the Company’s actual results will not differ materially from the estimates set forth above.
Supplemental Information
In addition to this release, the Company has furnished Supplemental Financial Information, which is available on our website in the “Investors” section, under the menu heading “Financials”. This additional information is being provided as a supplement to the information in this release and our other filings with the SEC. The Company has no obligation to update any of the information provided to conform to actual results or changes in the Company’s portfolio, capital structure or future expectations.
Conference Call and Webcast
The Company will host a conference call and audio webcast on Tuesday, May 2, 2023 at 9:00 a.m. Eastern Time (ET). The conference call can be accessed by dialing 833-470-1428 (domestic) or +1 404-975-4839 (international) and entering the conference ID 621271. An audio replay of the conference call will be available from 12:00 p.m. ET on May 2, 2023 until midnight ET on May 9, 2023 and can be accessed by dialing 866-813-9403 (domestic) or +1 929-458-6194 (international) and entering the passcode 396416.
A live audio webcast of the conference call will be available in listen-only mode through the “Investors” section of the Company’s website, www.viciproperties.com, on May 2, 2023, beginning at 9:00 a.m. ET. A replay of the webcast will be available shortly after the call on the Company’s website and will continue for one year.
About VICI Properties
VICI Properties Inc. is an S&P 500® experiential real estate investment trust that owns one of the largest portfolios of market-leading gaming, hospitality and entertainment destinations, including Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las Vegas, three of the most iconic entertainment facilities on the Las Vegas Strip. VICI Properties’ geographically diverse portfolio consists of 49 gaming facilities across
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects,” and similar expressions that do not relate to historical matters. All statements other than statements of historical fact are forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors which are, in some cases, beyond the Company’s control and could materially affect actual results, performance, or achievements. Among those risks, uncertainties and other factors are: the impact of changes in general economic conditions and market developments, including inflation, interest rate changes, supply chain disruptions, consumer confidence levels, changes in consumer spending, unemployment levels and depressed real estate prices resulting from the severity and duration of any downturn in the
Although the Company believes that in making such forward-looking statements its expectations are based upon reasonable assumptions, such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. The Company cannot assure you that the assumptions upon which these statements are based will prove to have been correct. Additional important factors that may affect the Company’s business, results of operations and financial position are described from time to time in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, Quarterly Reports on Form 10-Q and the Company’s other filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as may be required by applicable law.
Non-GAAP Financial Measures
This press release presents Funds From Operations (“FFO”), FFO per share, Adjusted Funds From Operations (“AFFO”), AFFO per share and Adjusted EBITDA, which are not required by, or presented in accordance with, generally accepted accounting principles in
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 define FFO as net income (or loss) attributable to common stockholders (computed in accordance with GAAP) excluding (i) gains (or losses) from sales of certain real estate assets, (ii) depreciation and amortization related to real estate, (iii) gains and losses from change in control, (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and (v) our proportionate share of such adjustments from our investment in unconsolidated affiliate.
AFFO is a non-GAAP financial measure that we use as a supplemental operating measure to evaluate our performance. We calculate our AFFO by adding or subtracting from FFO non-cash leasing and financing adjustments, non-cash change in allowance for credit losses, non-cash stock-based compensation expense, transaction costs incurred in connection with the acquisition of real estate investments, amortization of debt issuance costs and original issue discount, other non-cash interest expense, non-real estate depreciation (which is comprised of the depreciation related to our golf course operations), capital expenditures (which are comprised of additions to property, plant and equipment related to our golf course operations), impairment charges related to non-depreciable real estate, gains (or losses) on debt extinguishment and interest rate swap settlements, other gains (losses), other non-recurring non-cash transactions, our proportionate share of non-cash adjustments from our investment in unconsolidated affiliate (including the amortization of any basis differences) with respect to certain of the foregoing and non-cash adjustments attributable to non-controlling interest with respect to certain of the foregoing.
We calculate Adjusted EBITDA by adding or subtracting from AFFO contractual interest expense (including the impact of the forward-starting interest rate swaps and treasury locks) and interest income (collectively, interest expense, net), income tax expense and our proportionate share of such adjustments from our investment in unconsolidated affiliate.
These non-GAAP financial measures: (i) do not represent cash flow from operations as defined by GAAP; (ii) should not be considered as an alternative to net income as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) are not alternatives to cash flow as a measure of liquidity. In addition, these measures should not be viewed as measures of liquidity, nor do they measure our ability to fund all of our cash needs, including our ability to make cash distributions to our stockholders, to fund capital improvements, or to make interest payments on our indebtedness. Investors are also cautioned that FFO, FFO per share, AFFO, AFFO per share and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures reported by other real estate companies, including REITs, due to the fact that not all real estate companies use the same definitions. Our presentation of these measures does not replace the presentation of our financial results in accordance with GAAP.
Reconciliations of net income to FFO, FFO per share, AFFO, AFFO per share and Adjusted EBITDA are included in this release.
VICI Properties Inc. Consolidated Balance Sheets (In thousands, except share and per share data) |
||||||
|
March 31, 2023 |
|
December 31, 2022 |
|||
Assets |
|
|
|
|||
Real estate portfolio: |
|
|
|
|||
Investments in leases - sales-type, net |
$ |
22,579,820 |
|
$ |
17,172,325 |
|
Investments in leases - financing receivables, net |
|
17,051,187 |
|
|
16,740,770 |
|
Investments in loans and securities, net |
|
886,524 |
|
|
685,793 |
|
Investment in unconsolidated affiliate |
|
— |
|
|
1,460,775 |
|
Land |
|
153,560 |
|
|
153,560 |
|
Cash and cash equivalents |
|
247,673 |
|
|
208,933 |
|
Short-term investments |
|
— |
|
|
217,342 |
|
Other assets |
|
934,049 |
|
|
936,328 |
|
Total assets |
$ |
41,852,813 |
|
$ |
37,575,826 |
|
|
|
|
|
|||
Liabilities |
|
|
|
|||
Debt, net |
$ |
16,606,240 |
|
$ |
13,739,675 |
|
Accrued expenses and deferred revenue |
|
221,283 |
|
|
213,388 |
|
Dividends and distributions payable |
|
396,212 |
|
|
380,178 |
|
Other liabilities |
|
954,543 |
|
|
952,472 |
|
Total liabilities |
|
18,178,278 |
|
|
15,285,713 |
|
|
|
|
|
|||
Stockholders’ equity |
|
|
|
|||
Common stock |
|
10,042 |
|
|
9,631 |
|
Preferred stock |
|
— |
|
|
— |
|
Additional paid-in capital |
|
22,910,509 |
|
|
21,645,499 |
|
Accumulated other comprehensive income |
|
170,441 |
|
|
185,353 |
|
Retained earnings |
|
220,254 |
|
|
93,154 |
|
Total VICI stockholders’ equity |
|
23,311,246 |
|
|
21,933,637 |
|
Non-controlling interests |
|
363,289 |
|
|
356,476 |
|
Total stockholders’ equity |
|
23,674,535 |
|
|
22,290,113 |
|
Total liabilities and stockholders’ equity |
$ |
41,852,813 |
|
$ |
37,575,826 |
|
_______________________________________________________ |
Note: As of March 31, 2023 and December 31, 2022, our Investments in leases - sales-type, Investments in leases - financing receivables, Investments in loans and securities and Other assets (sales-type sub-leases) are net of |
VICI Properties Inc. Consolidated Statement of Operations (In thousands, except share and per share data) |
||||||||
Three Months Ended March 31, |
||||||||
|
2023 |
|
2022 |
|||||
Revenues |
|
|
|
|||||
Income from sales-type leases |
$ |
478,394 |
|
|
$ |
326,735 |
|
|
Income from lease financing receivables, loans and securities |
|
371,069 |
|
|
|
72,878 |
|
|
Other income |
|
18,339 |
|
|
|
8,386 |
|
|
Golf revenues |
|
9,845 |
|
|
|
8,626 |
|
|
Total revenues |
|
877,647 |
|
|
|
416,625 |
|
|
|
|
|
|
|||||
Operating expenses |
|
|
|
|||||
General and administrative |
|
15,005 |
|
|
|
9,466 |
|
|
Depreciation |
|
814 |
|
|
|
776 |
|
|
Other expenses |
|
18,339 |
|
|
|
8,386 |
|
|
Golf expenses |
|
5,952 |
|
|
|
5,285 |
|
|
Change in allowance for credit losses |
|
111,477 |
|
|
|
80,820 |
|
|
Transaction and acquisition expenses |
|
(958 |
) |
|
|
755 |
|
|
Total operating expenses |
|
150,629 |
|
|
|
105,488 |
|
|
|
|
|
|
|||||
Income from unconsolidated affiliate |
|
1,280 |
|
|
|
— |
|
|
Interest expense |
|
(204,360 |
) |
|
|
(68,142 |
) |
|
Interest income |
|
3,047 |
|
|
|
93 |
|
|
Other gains (losses) |
|
1,963 |
|
|
|
— |
|
|
Income before income taxes |
|
528,948 |
|
|
|
243,088 |
|
|
Income tax expense |
|
(1,087 |
) |
|
|
(400 |
) |
|
Net income |
|
527,861 |
|
|
|
242,688 |
|
|
Less: Net income attributable to non-controlling interests |
|
(9,121 |
) |
|
|
(2,305 |
) |
|
Net income attributable to common stockholders |
$ |
518,740 |
|
|
$ |
240,383 |
|
|
|
|
|
|
|||||
Net income per common share |
|
|
|
|||||
Basic |
$ |
0.52 |
|
|
$ |
0.35 |
|
|
Diluted |
$ |
0.52 |
|
|
$ |
0.35 |
|
|
|
|
|
|
|||||
Weighted average number of common shares outstanding |
|
|
|
|
||||
Basic |
|
1,001,526,645 |
|
|
|
684,341,045 |
|
|
Diluted |
|
1,003,831,325 |
|
|
|
687,914,683 |
|
|
VICI Properties Inc. Reconciliation of Net Income to FFO, FFO per Share, AFFO, AFFO per Share and Adjusted EBITDA (In thousands, except share and per share data) |
||||||||
Three Months Ended March 31, |
||||||||
|
2023 |
|
2022 |
|||||
Net income attributable to common stockholders |
$ |
518,740 |
|
|
$ |
240,383 |
|
|
Real estate depreciation |
|
— |
|
|
|
— |
|
|
Joint venture depreciation and non-controlling interest adjustments |
|
1,426 |
|
|
|
— |
|
|
FFO attributable to common stockholders |
|
520,166 |
|
|
|
240,383 |
|
|
Non-cash leasing and financing adjustments |
|
(122,834 |
) |
|
|
(35,564 |
) |
|
Non-cash change in allowance for credit losses |
|
111,477 |
|
|
|
80,820 |
|
|
Non-cash stock-based compensation |
|
3,467 |
|
|
|
2,630 |
|
|
Transaction and acquisition expenses |
|
(958 |
) |
|
|
755 |
|
|
Amortization of debt issuance costs and original issue discount |
|
19,682 |
|
|
|
15,977 |
|
|
Other depreciation |
|
783 |
|
|
|
746 |
|
|
Capital expenditures |
|
(988 |
) |
|
|
(454 |
) |
|
Other (gains) losses (1) |
|
(1,963 |
) |
|
|
— |
|
|
Joint venture non-cash adjustments and non-controlling interest adjustments |
|
(227 |
) |
|
|
202 |
|
|
AFFO attributable to common stockholders |
|
528,605 |
|
|
|
305,495 |
|
|
Interest expense, net |
|
181,631 |
|
|
|
52,072 |
|
|
Income tax expense |
|
1,087 |
|
|
|
400 |
|
|
Joint venture adjustments and non-controlling interest adjustments |
|
(1,021 |
) |
|
|
— |
|
|
Adjusted EBITDA attributable to common stockholders |
$ |
710,302 |
|
|
$ |
357,967 |
|
|
|
|
|
|
|||||
Net income per common share |
|
|
|
|||||
Basic |
$ |
0.52 |
|
|
$ |
0.35 |
|
|
Diluted |
$ |
0.52 |
|
|
$ |
0.35 |
|
|
FFO per common share |
|
|
|
|||||
Basic |
$ |
0.52 |
|
|
$ |
0.35 |
|
|
Diluted |
$ |
0.52 |
|
|
$ |
0.35 |
|
|
AFFO per common share |
|
|
|
|||||
Basic |
$ |
0.53 |
|
|
$ |
0.45 |
|
|
Diluted |
$ |
0.53 |
|
|
$ |
0.44 |
|
|
Weighted average number of shares of common stock outstanding |
|
|
|
|
|
|
|
|
Basic |
|
1,001,526,645 |
|
|
|
684,341,045 |
|
|
Diluted |
|
1,003,831,325 |
|
|
|
687,914,683 |
|
|
____________________ |
||
(1) |
Represents non-cash foreign currency remeasurement adjustments. |
|
VICI Properties Inc. Revenue Breakdown (In thousands) |
|||||||
|
Three Months Ended March 31, |
||||||
|
2023 |
|
2022 |
||||
Contractual revenue from sales-type leases |
|
|
|
||||
Caesars Regional Master Lease (excluding Harrah's NOLA, AC, and Laughlin) & Joliet Lease |
$ |
132,952 |
|
|
$ |
122,729 |
|
Caesars Las Vegas Master Lease |
|
113,619 |
|
|
|
105,556 |
|
MGM Grand/Mandalay Bay Lease |
|
69,922 |
|
|
|
— |
|
The Venetian Resort Las Vegas Lease |
|
63,125 |
|
|
|
25,298 |
|
Greektown Lease |
|
12,830 |
|
|
|
12,830 |
|
Hard Rock Cincinnati Lease |
|
11,176 |
|
|
|
11,010 |
|
EBCI Lease |
|
8,247 |
|
|
|
8,125 |
|
Century Master Lease |
|
6,865 |
|
|
|
6,376 |
|
Margaritaville Lease |
|
6,394 |
|
|
|
5,924 |
|
Income from sales-type leases non-cash adjustment (1) |
|
53,264 |
|
|
|
28,887 |
|
Income from sales-type leases |
|
478,394 |
|
|
|
326,735 |
|
|
|
|
|
||||
Contractual income from lease financing receivables |
|
|
|
||||
MGM Master Lease |
|
187,500 |
|
|
|
— |
|
Harrah's NOLA, AC, and Laughlin |
|
42,966 |
|
|
|
39,663 |
|
JACK Entertainment Master Lease |
|
17,423 |
|
|
|
16,690 |
|
Mirage Lease |
|
22,500 |
|
|
|
— |
|
Gold Strike Lease |
|
5,000 |
|
|
|
— |
|
Foundation Master Lease |
|
6,063 |
|
|
|
— |
|
PURE Master Lease |
|
3,809 |
|
|
|
— |
|
Income from lease financing receivables non-cash adjustment (1) |
|
69,577 |
|
|
|
6,666 |
|
Income from lease financing receivables |
|
354,838 |
|
|
|
63,019 |
|
|
|
|
|
||||
Contractual interest income |
|
|
|
||||
Senior Secured Notes |
|
108 |
|
|
|
— |
|
Senior Secured Loans |
|
10,264 |
|
|
|
9,030 |
|
Mezzanine Loans |
|
5,866 |
|
|
|
818 |
|
Income from loans non-cash adjustment (1) |
|
(7 |
) |
|
|
11 |
|
Income from loans |
|
16,231 |
|
|
|
9,859 |
|
Income from lease financing receivables and loans |
|
371,069 |
|
|
|
72,878 |
|
|
|
|
|
||||
Other income |
|
18,339 |
|
|
|
8,386 |
|
Golf revenues |
|
9,845 |
|
|
|
8,626 |
|
Total revenues |
$ |
877,647 |
|
|
$ |
416,625 |
|
____________________ |
||
(1) |
Amounts represent non-cash adjustments to recognize revenue on an effective interest basis in accordance with GAAP. |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230501005576/en/
Investor Contacts:
Investors@viciproperties.com
(646) 949-4631
Or
David Kieske
EVP, Chief Financial Officer
DKieske@viciproperties.com
Moira McCloskey
SVP, Capital Markets
MMcCloskey@viciproperties.com
Source: VICI Properties Inc.
