01—Abstract
Summary
Summary of the 10-K filed February 18, 2021. Cited figures are marked; the original filing is the authoritative source.
VICI Properties Inc. reported that it is primarily engaged in owning and acquiring gaming, hospitality and entertainment destinations under long-term triple-net leases.
As of December 31, 2020, its portfolio consisted of 28 properties across twelve states, leased to Caesars, Penn National, Hard Rock, Century Casinos and JACK Entertainment, with Caesars as the largest tenant. Total revenues were $1.23 billiona for 2020, up from $894.8 million in 2019, and net income attributable to common stockholders was $891.7 million, or $1.75 per diluted share. AFFO was $835.8 million, or $1.64 per diluted share.
The company states that all tenants fulfilled rent obligations through February 2021 and that it collected 100% of rent in cash in 2020. The year was dominated by the July 20, 2020 Eldorado/Caesars Merger transaction, which included the $1.82 billionb acquisition of the Harrah's New Orleans, Laughlin and Atlantic City properties, a $1.19 billion CPLV lease amendment payment and a $213.8 million HLV lease amendment payment. The company recorded a $333.4 million gain upon lease modification and a $244.5 million increase in its allowance for credit losses under the new CECL standard.
Total debt was $6.85 billionc at year-end, with no maturities until 2024, and the company had $1.0 billion of available revolver capacity. The filing also highlights ongoing COVID-19 risks, including temporary closures of all properties in 2020, reduced capacity, and uncertainty about future restrictions. Caesars' substantial debt service and reliance on Las Vegas, which generated approximately 30% of lease revenue, are cited as key concentration risks.
02—Key points
Key Highlights
- Total revenues rose 37.0% year-over-year to $1.2 billion, and net income attributable to common stockholders was $891.7 million, or $1.75 per diluted share.
- AFFO increased 28.7% year-over-year to $835.8 million, and AFFO per diluted share increased 10.8% to $1.64.
- Completed $4.6 billion of acquisitions and investments, including the Eldorado Transaction for total consideration of about $3.2 billion and the JACK Cleveland/Thistledown acquisition for about $843.3 million.
- Quarterly cash dividend increased to $0.33 per share ($1.32 annualized), a 10.9% increase over the prior quarterly dividend.
- Recognized a $333.4 million gain upon lease modification and a $244.5 million increase in the allowance for credit losses in connection with the Eldorado Transaction and CECL adoption.
- Caesars is the largest tenant; Las Vegas Strip properties generated approximately 30% of lease revenue for 2020.
- Total debt of $6.85 billion at December 31, 2020, with $1.0 billion of undrawn Revolving Credit Facility capacity and no debt maturities until 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, VICI Properties kept $0.73.
- Revenue$1.23B100.0%
- Cost of revenue−$17.6M1.4%
- Gross profit$1.21B98.6%
- Operating costs−$886.9M72.4%
- Operating income$321.0M26.2%
- Interest, other & tax$575.2M46.9%
- Net income$896.2M73.1%
Where FY2020 revenue went
$1.23B- Operating costs: $886.9M, 72% of revenue
- Operating income: $321.0M, 26% of revenue
- Cost of revenue: $17.6M, 1.4% of revenue
Kept 26% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 18, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $1.23B$894.80M | +37.0% |
| Cost of Revenue | $17.63M$18.90M | −6.7% |
| Gross Profit | $1.21B$875.90M | +37.9% |
| Operating Income | $321.02M$52.30M | +513.8% |
| Interest Expense | $308.61M$248.38M | +24.2% |
| Net Income | $896.21M$545.96M | +64.2% |
| EPS (Basic) | $1.76$1.25 | +40.8% |
| EPS (Diluted) | $1.75$1.24 | +41.1% |
| Shares Outstanding (Basic) | 506.14M435.07M | +16.3% |
| Shares Outstanding (Diluted) | 510.91M439.15M | +16.3% |
05—Questions
Frequently Asked Questions
How did VICI's revenue and earnings change in 2020?
Total revenues were $1,225.6 million in 2020 compared with $894.8 million in 2019, an increase of $330.8 million. Net income attributable to common stockholders was $891.7 million, or $1.75 per diluted share, compared with $546.0 million, or $1.24 per diluted share, in 2019. The 2020 results include a $333.4 million gain upon lease modification and a $244.5 million change in allowance for credit losses.
How dependent is VICI on Caesars?
Caesars is the company's largest tenant. The filing states that Caesars lease agreements represented 84% of lease revenues in 2020, and that Caesars is obligated to pay approximately $6.2 billion in fixed annual rents and related payments over the next five years. The filing also notes that Caesars' substantial debt, including estimated 2021 debt service of approximately $917.0 million, could affect its ability to meet obligations to VICI.
How did COVID-19 affect VICI's tenants and rent collections?
All tenant properties were temporarily closed during 2020 and later reopened, generally at reduced capacity. The company states that it collected 100% of rent in cash in 2020 and that all tenants have fulfilled rent obligations through February 2021. It provided capital expenditure relief to some tenants but states that this did not defer or reduce rent obligations. The company notes continued uncertainty about future closures and tenant liquidity.
What is VICI's debt position and near-term liquidity?
Total debt was $6.85 billion face value at December 31, 2020, comprising a $2.1 billion Term Loan B, $750.0 million of 2025 Notes, $1.25 billion of 2026 Notes, $750.0 million of 2027 Notes, and $1.0 billion each of 2029 and 2030 Notes. The company had $315.99 million in cash and cash equivalents, $1.0 billion of available Revolving Credit Facility capacity, and states that none of its debt matures until 2024.
06—Continue