UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________

FORM 10-Q

_____________________________

☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2022

or

☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________

Commission file number: 001-38372 (VICI Properties Inc.)

Commission file number: 333-264352-01 (VICI Properties L.P.)

_____________________________

VICI Properties Inc.

VICI Properties L.P.

(Exact name of registrant as specified in its charter)

_____________________________

Maryland	(VICI Properties Inc.)	81-4177147
Delaware	(VICI Properties L.P.)	35-2576503
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

535 Madison Avenue, 20th Floor New York, New York 10022

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (646) 949-4631

_____________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, $0.01 par value	VICI	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   

VICI Properties Inc. Yes  ☒    No  ☐ VICI Properties L.P.  Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  

VICI Properties Inc. Yes  ☒    No  ☐ VICI Properties L.P.  Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

VICI Properties Inc.				VICI Properties L.P.
Large Accelerated Filer	☒	Accelerated filer	☐	Large Accelerated Filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐	Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☐			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    

VICI Properties Inc. Yes   ☐   No  ☒  VICI Properties L.P.  Yes  ☐   No  ☒ 

As of October 26, 2022, VICI Properties Inc. had 963,097,848 shares of common stock, $0.01 par value per share, outstanding. VICI Properties L.P. has no common stock outstanding.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the three and nine months ended September 30, 2022 of VICI Properties Inc. and VICI Properties L.P. Unless stated otherwise or the context otherwise requires, references to “VICI” mean VICI Properties Inc. and its consolidated subsidiaries, including VICI Properties OP LLC (“VICI OP”), and references to “VICI LP” mean VICI Properties L.P. and its consolidated subsidiaries. Unless stated otherwise or the context otherwise requires, the terms “the Company,” “we,” “our” and “us” mean VICI and VICI LP, including, collectively, their consolidated subsidiaries.

In order to highlight the differences between VICI and VICI LP, the separate sections in this report for VICI and VICI LP described below specifically refer to VICI and VICI LP. In the sections that combine disclosure of VICI and VICI LP, this report refers to actions or holdings of VICI and VICI LP as being “our” actions or holdings. Although VICI LP is generally the entity that directly or indirectly enters into contracts and joint ventures, holds assets and incurs debt, we believe that references to “we,” “us” or “our” in this context is appropriate because the business is one enterprise and we operate substantially all of our business and own, either directly or through subsidiaries, substantially all of our assets through VICI LP.

VICI is a real estate investment trust (“REIT”) that is the sole owner of VICI Properties GP LLC (the “General Partner”), the sole general partner of VICI LP. As of September 30, 2022, VICI owns 100% of the limited liability company interests of VICI Properties HoldCo LLC (“HoldCo”), which in turn owns approximately 98.7% of the limited liability company interest of VICI OP (such interests, “VICI OP Units”), our operating partnership, which in turns owns 100% of the limited partnership interest in VICI LP. The balance of the VICI OP Units not held by HoldCo are held by MGM Resorts International or its affiliates.

The following diagram details VICI’s organizational structure as of September 30, 2022.

We believe combining the quarterly reports on Form 10-Q of VICI and VICI LP into this single report:

•enhances investors’ understanding of VICI and VICI LP by enabling investors to view the business as a whole in the same manner as management views and operates the business;

•eliminates duplicative disclosure and provides a more streamlined and readable presentation; and

•creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

We operate VICI and VICI LP as one business. Because VICI LP is managed by VICI, and VICI conducts substantially all of its operations and owns, either directly or through subsidiaries, substantially all of its assets indirectly through VICI LP, VICI’s executive officers are VICI LP’s executive officers, although, as a partnership, VICI LP does not have a board of directors.

We believe it is important to understand the few differences between VICI and VICI LP in the context of how VICI and VICI LP operate as a consolidated company. VICI is a REIT whose only material assets are its indirect interest in VICI LP, through which it conducts its real property business. VICI also conducts its golf course business through a taxable REIT subsidiary (a “TRS”), VICI Golf LLC, a Delaware limited liability company (“VICI Golf”). As a result, VICI does not conduct business itself other than issuing public equity from time to time and does not directly incur any material indebtedness, rather VICI LP

2

holds substantially all of our assets, except for those held in VICI Golf. Except for net proceeds from public equity issuances by VICI, VICI LP generates all capital required by the Company’s business, which sources include VICI LP’s operations and its direct or indirect incurrence of indebtedness.

VICI consolidates VICI LP for financial reporting purposes, and VICI does not have material assets other than its indirect investment in VICI LP. Therefore, while there are some areas of difference between the unaudited Consolidated Financial Statements of VICI and those of VICI LP, the assets and liabilities of VICI and VICI LP are materially the same on their respective financial statements. As of September 30, 2022, the primary areas of difference between the unaudited Consolidated Financial Statements of VICI and those of VICI LP were stockholders’ equity and partners’ capital, non-controlling interests, and golf operations, which include the assets and liabilities and income and expenses of VICI Golf.

To help investors understand the differences between VICI and VICI LP, this report provides:

•separate consolidated financial statements for VICI and VICI LP;

•a single set of notes to such consolidated financial statements that includes separate discussions of stockholders’ equity or partners’ equity and per share and per unit data, as applicable;

•a combined Management’s Discussion and Analysis of Financial Condition and Results of Operations section that also includes discrete information related to each entity, as applicable;

•separate Part I, Item 4. Controls and Procedures sections;

•separate Part II, Item 2. Issuer Purchases of Equity Securities sections related to each entity; and

•separate Exhibits 31 and 32 certifications for each VICI and VICI LP in order to establish that the requisite certifications have been made and that VICI and VICI LP are each compliant with Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.

The separate discussions of VICI and VICI LP in this report should be read in conjunction with each other to understand our results on a consolidated basis and how management operates our business.

3

VICI PROPERTIES INC.
VICI PROPERTIES L.P.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2022
TABLE OF CONTENTS
			Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements of VICI Properties Inc. (Unaudited)		5
		Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	5
		Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended September 30, 2022 and 2021	6
		Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021	7
		Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	9
	Financial Statements of VICI Properties L.P. (Unaudited)		11
		Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	11
		Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended September 30, 2022 and 2021	12
		Consolidated Statements of Partners’ Capital for the Three and Nine Months Ended September 30, 2022 and 2021	13
		Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	15
	Notes to Consolidated Financial Statements		17
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		55
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		73
Item 4.	Controls and Procedures		74
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings		75
Item 1A.	Risk Factors		75
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		75
Item 3.	Defaults Upon Senior Securities		75
Item 4.	Mine Safety Disclosures		75
Item 5.	Other Information		75
Item 6.	Exhibits		76
Signatures			77

4

PART I        FINANCIAL INFORMATION

Item 1.        Financial Statements

VICI PROPERTIES INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands, except share and per share data)

	September 30, 2022		December 31, 2021
Assets
Real estate portfolio:
Investments in leases - sales-type, net	$	17,011,585	$	13,136,664
Investments in leases - financing receivables, net	16,441,616		2,644,824
Investments in loans, net	579,805		498,002
Investment in unconsolidated affiliate	1,463,230		—
Land	153,560		153,576
Cash and cash equivalents	518,383		739,614
Short-term investments	207,722		—
Other assets	932,081		424,693
Total assets	$	37,307,982	$	17,597,373
Liabilities
Debt, net	$	13,730,503	$	4,694,523
Accrued expenses and deferred revenue	202,888		113,530
Dividends and distributions payable	380,174		226,309
Other liabilities	932,120		375,837
Total liabilities	15,245,685		5,410,199
Commitments and contingent liabilities (Note 10)
Stockholders’ equity
Common stock, $0.01 par value, 1,350,000,000 shares authorized and 963,093,424 and 628,942,092 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	9,631		6,289
Preferred stock, $0.01 par value, 50,000,000 shares authorized and no shares outstanding at September 30, 2022 and December 31, 2021	—		—
Additional paid-in capital	21,641,945		11,755,069
Accumulated other comprehensive income	191,314		884
Retained (deficit) earnings	(133,311)		346,026
Total VICI stockholders’ equity	21,709,579		12,108,268
Non-controlling interests	352,718		78,906
Total stockholders’ equity	22,062,297		12,187,174
Total liabilities and stockholders’ equity	$	37,307,982	$	17,597,373

_______________________________________________________

Note: As of September 30, 2022 and December 31, 2021, our Investments in leases - sales-type, Investments in leases - financing receivables, Investments in loans and Other assets (sales-type sub-leases) are net of $687.4 million, $660.8 million, $6.0 million and $22.0 million, respectively, and $434.9 million, $91.1 million, $0.8 million and $6.5 million of Allowance for credit losses, respectively. Refer to Note 5 - Allowance for Credit Losses for further details.

See accompanying Notes to Consolidated Financial Statements.

5

VICI PROPERTIES INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(UNAUDITED)

(In thousands, except share and per share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues
Income from sales-type leases	$	376,048	$	292,059	$	1,077,952	$	873,337
Income from lease financing receivables and loans	350,945		70,205		685,544		210,578
Other income	17,862		6,936		41,811		20,897
Golf revenues	6,688		6,504		25,484		21,602
Total revenues	751,543		375,704		1,830,791		1,126,414
Operating expenses
General and administrative	12,063		8,379		33,311		24,092
Depreciation	816		771		2,371		2,320
Other expenses	17,862		6,936		41,811		20,897
Golf expenses	5,186		5,143		16,330		14,881
Change in allowance for credit losses	232,763		9,031		865,459		(24,453)
Transaction and acquisition expenses	1,947		177		19,366		9,689
Total operating expenses	270,637		30,437		978,648		47,426
Income from unconsolidated affiliate	22,719		—		37,853		—
Interest expense	(169,354)		(165,099)		(370,624)		(321,953)
Interest income	3,024		26		3,897		75
Loss from extinguishment of debt	—		(15,622)		—		(15,622)
Income before income taxes	337,295		164,572		523,269		741,488
Income tax expense	(417)		(388)		(1,844)		(2,128)
Net income	336,878		164,184		521,425		739,360
Less: Net income attributable to non-controlling interests	(5,973)		(2,322)		(7,843)		(6,988)
Net income attributable to common stockholders	$	330,905	$	161,862	$	513,582	$	732,372
Net income per common share
Basic	$	0.34	$	0.29	$	0.61	$	1.35
Diluted	$	0.34	$	0.28	$	0.60	$	1.31
Weighted average number of shares of common stock outstanding
Basic	962,573,646		555,153,692		848,839,357		542,843,855
Diluted	964,134,340		571,894,545		850,823,037		557,113,510
Other comprehensive income
Net income	$	336,878	$	164,184	$	521,425	$	739,360
Reclassification of derivative (gain) loss to Interest expense	(6,037)		64,239		(10,196)		64,239
Unrealized gain on cash flow hedges	—		6,576		200,550		28,282
Comprehensive income	330,841		234,999		711,779		831,881
Comprehensive income attributable to non-controlling interest	(5,897)		(2,322)		(7,715)		(6,988)
Comprehensive income attributable to common stockholders	$	324,944	$	232,677	$	704,064	$	824,893

See accompanying Notes to Consolidated Financial Statements.

6

VICI PROPERTIES INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(In thousands, except share and per share data)

	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive  (Loss) Income		Retained Earnings (Deficit)		Total VICI Stockholders’ Equity		Non-controlling Interests		Total Stockholders’ Equity
Balance as of December 31, 2020	$	5,367	$	9,363,539	$	(92,521)	$	139,454	$	9,415,839	$	77,906	$	9,493,745
Net income	—		—		—		269,801		269,801		2,298		272,099
Dividends and distributions declared ($0.3300 per common share)	—		—		—		(177,217)		(177,217)		(2,071)		(179,288)
Stock-based compensation, net of forfeitures	3		755		—		—		758		—		758
Unrealized gain on cash flow hedges	—		—		12,378		—		12,378		—		12,378
Balance as of March 31, 2021	5,370		9,364,294		(80,143)		232,038		9,521,559		78,133		9,599,692
Net income	—		—		—		300,709		300,709		2,368		303,077
Dividends and distributions declared ($0.3300 per common share)	—		—		—		(177,223)		(177,223)		(2,072)		(179,295)
Stock-based compensation, net of forfeitures	—		2,267		—		—		2,267		—		2,267
Unrealized gain on cash flow hedges	—		—		9,328		—		9,328		—		9,328
Balance as of June 30, 2021	5,370		9,366,561		(70,815)		355,524		9,656,640		78,429		9,735,069
Net income	—		—		—		161,862		161,862		2,322		164,184
Issuance of common stock, net	919		2,383,896		—		—		2,384,815		—		2,384,815
Dividends and distributions declared ($0.3600 per common share)	—		—		—		(226,420)		(226,420)		(2,072)		(228,492)
Stock-based compensation, net of forfeitures	—		2,395		—		—		2,395		—		2,395
Unrealized gain on cash flow hedges	—		—		6,576		—		6,576		—		6,576
Reclassification of derivative loss to Interest expense	—		—		64,239		—		64,239		—		64,239
Balance as of September 30, 2021	$	6,289	$	11,752,852	$	—	$	290,966	$	12,050,107	$	78,679	$	12,128,786

7

VICI PROPERTIES INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)

(UNAUDITED)

(In thousands, except share and per share data)

	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive  (Loss) Income		Retained Earnings (Deficit)		Total VICI Stockholders’ Equity		Non-controlling Interests		Total Stockholders’ Equity
Balance as of December 31, 2021	$	6,289	$	11,755,069	$	884	$	346,026	$	12,108,268	$	78,906	$	12,187,174
Net income	—		—		—		240,383		240,383		2,305		242,688
Issuance of common stock, net	1,190		3,216,907		—		—		3,218,097		—		3,218,097
Dividends and distributions declared ($0.3600 per common share)	—		—		—		(270,600)		(270,600)		(2,103)		(272,703)
Stock-based compensation, net of forfeitures	5		(86)		—		—		(81)		—		(81)
Unrealized gain on cash flow hedges	—		—		108,611		—		108,611		—		108,611
Balance as of March 31, 2022	7,484		14,971,890		109,495		315,809		15,404,678		79,108		15,483,786
Net loss	—		—		—		(57,706)		(57,706)		(435)		(58,141)
Issuance of common stock, net	2,147		6,570,084		—		—		6,572,231		—		6,572,231
Issuance of VICI OP Units	—		—		—		—		—		374,769		374,769
Reallocation of equity	—		99,029		(52)		—		98,977		(94,573)		4,404
Dividends and distributions declared ($0.3600 per common share)	—		—		—		(346,713)		(346,713)		(6,465)		(353,178)
Stock-based compensation, net of forfeitures	—		3,195		—		—		3,195		41		3,236
Unrealized gain on cash flow hedges	—		—		91,939		—		91,939		—		91,939
Reclassification of derivative gain to Interest expense	—		—		(4,107)		—		(4,107)		(52)		(4,159)
Balance as of June 30, 2022	9,631		21,644,198		197,275		(88,610)		21,762,494		352,393		22,114,887
Net income	—		—		—		330,905		330,905		5,973		336,878
Reallocation of equity	—		(5,702)		—		—		(5,702)		1,298		(4,404)
Dividends and distributions declared ($0.3900 per common share)	—		—		—		(375,606)		(375,606)		(6,914)		(382,520)
Stock-based compensation, net of forfeitures	—		3,449		—		—		3,449		44		3,493
Reclassification of derivative gain to Interest expense	—		—		(5,961)		—		(5,961)		(76)		(6,037)
Balance as of September 30, 2022	$	9,631	$	21,641,945	$	191,314	$	(133,311)	$	21,709,579	$	352,718	$	22,062,297

See accompanying Notes to Consolidated Financial Statements.

8

VICI PROPERTIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)

	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities
Net income	$	521,425	$	739,360
Adjustments to reconcile net income to cash flows provided by operating activities:
Non-cash leasing and financing adjustments	(230,522)		(89,714)
Stock-based compensation	9,359		7,067
Non-cash transaction costs	8,816		—
Depreciation	2,371		2,320
Amortization of debt issuance costs and original issue discount	28,099		50,723
Change in allowance for credit losses	865,459		(24,453)
Income from unconsolidated affiliate	(37,853)		—
Distributions from unconsolidated affiliate	40,437		—
Net proceeds from settlement of derivatives	201,433		—
Loss on extinguishment of debt	—		15,622
Change in operating assets and liabilities:
Other assets	(4,052)		2,694
Accrued expenses and deferred revenue	50,676		(94,542)
Other liabilities	(171)		1,847
Net cash provided by operating activities	1,455,477		610,924
Cash flows from investing activities
Net cash paid in connection with MGP Transactions	(4,574,536)		—
Investments in leases - sales-type	(4,012,845)		—
Investments in leases - financing receivables	—		(6,000)
Investments in loans	(87,166)		(19,161)
Principal repayments of lease financing receivables	—		1,651
Principal repayments of loans and receipts of deferred fees	1,130		30,448
Capitalized transaction costs	(6,801)		(9,215)
Investments in short-term investments	(207,722)		—
Maturities of short-term investments	—		19,973
Proceeds from sale of real estate	—		3,813
Acquisition of property and equipment	(1,158)		(1,653)
Net cash (used in) provided by investing activities	(8,889,098)		19,856

9

VICI PROPERTIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)

Cash flows from financing activities
Proceeds from offering of common stock, net	3,219,101		2,386,129
Proceeds from April 2022 Notes offering	5,000,000		—
Proceeds from Revolving Credit Facility	600,000		—
Repayment of Term Loan B Facility	—		(2,100,000)
Repayment of Revolving Credit Facility	(600,000)		—
Debt issuance costs	(146,176)		(23,166)
Repurchase of stock for tax withholding	(6,118)		(1,647)
Distributions to non-controlling interests	(10,711)		(6,215)
Dividends paid	(843,706)		(532,360)
Net cash provided by (used in) financing activities	7,212,390		(277,259)
Net (decrease) increase in cash, cash equivalents and restricted cash	(221,231)		353,521
Cash, cash equivalents and restricted cash, beginning of period	739,614		315,993
Cash, cash equivalents and restricted cash, end of period	$	518,383	$	669,514
Supplemental cash flow information:
Cash paid for interest	$	290,119	$	272,574
Cash paid for income taxes	$	2,306	$	1,790
Supplemental non-cash investing and financing activity:
Dividends and distributions declared, not paid	$	380,377	$	226,420
Debt issuance costs payable	$	13	$	50,716
Deferred transaction costs payable	$	1,479	$	12,426
Equity issuance costs payable	$	—	$	350
Non-cash change in Investments in leases - financing receivables	$	120,709	$	15,292
Lease liabilities arising from obtaining right-of-use assets	$