PART I—I FINANCIAL INFORMATION

Item 1. ~~Unaudited~~ Financial Statements

VICI PROPERTIES INC.

CONSOLIDATED BALANCE SHEETS

~~(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)~~

(UNAUDITED)

(In thousands, except share and per share data)



	~~September 30, 2017~~		~~December 31, 2016~~
~~Assets~~
~~Total assets~~	$	—	$	—

~~Commitments and contingencies (Note 5)~~

~~Equity~~
~~Common stock, $0.01 par value, 100,000,000 shares authorized and 1,000 shares issued and outstanding as of September 30, 2017~~	$	—	$
~~Membership interest as of December 31, 2016~~	$		$	—
~~Total equity~~	$	—	$	—


	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 ~~Balance Sheets~~Consolidated Financial Statements.

Table of Contents

VICI PROPERTIES INC.

~~NOTES TO~~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.

Table of Contents

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

Table of Contents

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.

Table of Contents

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

Table of Contents

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	$	541,676	$	—

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

VICI PROPERTIES L.P.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands, except unit and per unit 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	455,343		705,566

Short-term investments	207,722		—
Other assets	853,382		344,014
Total assets	$	37,166,243	$	17,482,646

Liabilities
Debt, net	$	13,730,503	$	4,694,523
Accrued expenses and deferred revenue	198,943		110,056
Distributions payable	380,377		226,309
Other liabilities	917,393		361,270
Total liabilities	15,227,216		5,392,158

Commitments and contingent liabilities (Note 10)

Partners’ Capital
Partners’ capital, 975,324,797 and 628,942,092 operating partnership units issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	21,669,219		12,010,698
Accumulated other comprehensive income	191,238		884
Total VICI LP’s capital	21,860,457		12,011,582
Non-controlling interest	78,570		78,906
Total capital attributable to partners	21,939,027		12,090,488
Total liabilities and partners’ capital	$	37,166,243	$	17,482,646

Table of Contents

VICI PROPERTIES L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(UNAUDITED)

(In thousands, except unit and per unit 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
Total revenues	744,855		369,200		1,805,307		1,104,812

Operating expenses
General and administrative	12,055		8,379		33,303		24,092
Depreciation	31		29		90		92
Other expenses	17,862		6,936		41,811		20,897
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	264,658		24,552		960,029		30,317

Income from unconsolidated affiliate	22,719		—		37,853		—
Interest expense	(169,354)		(165,099)		(370,624)		(321,953)
Interest income	2,735		23		3,378		61
Loss from extinguishment of debt	—		(15,622)		—		(15,622)
Income before income taxes	336,297		163,950		515,885		736,981
Income tax expense	(245)		(245)		(328)		(1,128)
Net income	336,052		163,705		515,557		735,853
Less: Net income attributable to non-controlling interest	(1,781)		(2,322)		(5,973)		(6,988)
Net income attributable to partners	$	334,271	$	161,383	$	509,584	$	728,865

Net income per Partnership unit
Basic	$	0.34	$	0.29	$	0.60	$	1.34
Diluted	$	0.34	$	0.28	$	0.59	$	1.31

Weighted average number of Partnership units outstanding
Basic	974,805,019		555,153,692		855,783,910		542,843,855
Diluted	976,365,713		571,894,545		857,767,590		557,113,510

Other comprehensive income
Net income attributable to partners	$	334,271	$	161,383	$	509,584	$	728,865
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 attributable to partners	$	328,234	$	232,198	$	699,938	$	821,386

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

VICI PROPERTIES L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(UNAUDITED)

(In thousands, except unit and per unit data)


	Partners’ Capital		Accumulated Other Comprehensive (Loss) Income		Non-Controlling Interest		Total
Balance as of December 31, 2020	$	9,417,794	$	(92,521)	$	77,906	$	9,403,179
Net income	268,593		—		2,298		270,891

Contributions from parent	13,173		—		—		13,173
Distributions to parent	(189,915)		—		—		(189,915)
Distributions to non-controlling interest	—		—		(2,071)		(2,071)
Stock-based compensation, net of forfeitures	2,252		—		—		2,252
Unrealized gain on cash flow hedges	—		12,378		—		12,378

Balance as of March 31, 2021	9,511,897		(80,143)		78,133		9,509,887
Net income	298,889		—		2,368		301,257
Contributions from parent	3,152		—		—		3,152
Distributions to parent	(180,744)		—		—		(180,744)
Distributions to non-controlling interest	—		—		(2,072)		(2,072)
Stock-based compensation, net of forfeitures	2,366		—		—		2,366
Unrealized gain on cash flow hedges	—		9,328		—		9,328
Balance as of June 30, 2021	9,635,560		(70,815)		78,429		9,643,174
Net income	161,383		—		2,322		163,705
Contributions from parent	2,386,874		—		—		2,386,874
Distributions to parent	(228,937)		—		—		(228,937)
Distributions to non-controlling interest	—		—		(2,072)		(2,072)
Stock-based compensation, net of forfeitures	2,366		—		—		2,366
Unrealized gain on cash flow hedges	—		6,576		—		6,576
Reclassification of derivative loss to Interest expense			64,239				64,239
Balance as of September 30, 2021	$	11,957,246	$	—	$	78,679	$	12,035,925

Table of Contents

VICI PROPERTIES L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(UNAUDITED)

(In thousands, except unit and per unit data)


	Partners’ Capital		Accumulated Other Comprehensive (Loss) Income		Non-Controlling Interest		Total
Balance as of December 31, 2021	$	12,010,698	$	884	$	78,906	$	12,090,488
Net income	238,348		—		2,305		240,653

Contributions from parent	3,229,165		—		—		3,229,165
Distributions to parent	(281,990)		—		—		(281,990)
Distributions to non-controlling interest	—		—		(2,103)		(2,103)
Stock-based compensation, net of forfeitures	2,602		—		—		2,602
Unrealized gain on cash flow hedges	—		108,611		—		108,611

Balance as of March 31, 2022	15,198,823		109,495		79,108		15,387,426
Net loss	$	(63,035)	$	—	$	1,887	$	(61,148)

Contributions from parent	6,949,119		—		—		6,949,119
Distributions to parent	(375,626)		—		—		(375,626)
Distributions to non-controlling interest	—		—		(2,062)		(2,062)
Stock-based compensation, net of forfeitures	3,236		—		—		3,236
Unrealized gain on cash flow hedges	—		91,939		—		91,939
Reclassification of derivative gain to Interest expense	—		(4,159)		—		(4,159)
Balance as of June 30, 2022	21,712,517		197,275		78,933		21,988,725
Net income	334,271		—		1,781		336,052
Contributions from parent	142		—		—		142
Distributions to parent	(381,204)		—		—		(381,204)
Distributions to non-controlling interest	—		—		(2,144)		(2,144)
Stock-based compensation, net of forfeitures	3,493		—		—		3,493

Reclassification of derivative gain to Interest expense	—		(6,037)		—		(6,037)
Balance as of September 30, 2022	$	21,669,219	$	191,238	$	78,570	$	21,939,027

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

VICI PROPERTIES L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)


	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities
Net income	$	515,557	$	735,853
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	9,272		6,984
Depreciation	90		92
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	(2,182)		3,936
Accrued expenses and deferred revenue	46,508		(94,172)
Other liabilities	(331)		296
Net cash provided by operating activities	1,435,967		605,167

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	(65)		(15)
Net cash (used in) provided by investing activities	(8,888,005)		21,494

Cash flows from financing activities
Contributions from Parent	3,219,202		2,386,911
Distributions to Parent	(864,902)		(532,000)
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)
Distributions to non-controlling interest	(6,309)		(6,215)
Net cash provided by (used in) financing activities	7,201,815		(274,470)

Table of Contents

VICI PROPERTIES L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)


Net (decrease) increase in cash, cash equivalents and restricted cash	(250,223)		352,191
Cash, cash equivalents and restricted cash, beginning of period	705,566		286,245
Cash, cash equivalents and restricted cash, end of period	$	455,343	$	638,436

Supplemental cash flow information:
Cash paid for interest	$	290,119	$	272,574
Cash paid for income taxes	$	996	$	1,397
Supplemental non-cash investing and financing activity:
Distributions payable	$	380,377	$	226,420
Debt issuance costs payable	$	13	$	50,716
Deferred transaction costs payable	$	1,479	$	12,426
Non-cash change in Investments in leases - financing receivables	$	120,709	$	15,292
Lease liabilities arising from obtaining right-of-use assets	$	541,676	$	—

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In these notes, the words ~~“VICI REIT,~~the “Company,” ~~“Company,~~“VICI,” “we,” “our,” and “us” refer to VICI Properties Inc., and its subsidiaries, including VICI LP, on a consolidated basis, unless otherwise stated or the context requires otherwise. ~~In addition, “CEOC”~~

We refer to (i) our Condensed Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Balance Sheets as our “Balance Sheet,” (iii) our Consolidated Statements of Operations and Comprehensive Income as our “Statement of Operations,” and (iv) our Consolidated Statement of Cash Flows as our “Statement of Cash Flows.” References to numbered “Notes” refer to the Notes to our Consolidated Financial Statements.

“Apollo” refers to Apollo Global Management, Inc., a Delaware corporation, and, as the context requires, certain of its subsidiaries and affiliates.

“April 2022 Notes” refer collectively to (i) the $500.0 million aggregate principal amount of 4.375% senior unsecured notes due 2025, (ii) the $1,250.0 million aggregate principal amount of 4.750% senior unsecured notes due 2028, (iii) the $1,000.0 million aggregate principal amount of 4.950% senior unsecured notes due 2030, (iv) the $1,500.0 million aggregate principal amount of 5.125% senior unsecured notes due 2032, and (v) the $750.0 million aggregate principal amount of 5.625% senior unsecured notes due 2052, in each case issued by VICI LP in April 2022.

“BREIT JV” refers to the joint venture between MGP and Blackstone Real Estate Income Trust, Inc. in which the Company holds a 50.1% ownership stake following the MGP Transactions.

“BREIT JV Lease” refers to the lease agreement for MGM Grand Las Vegas and Mandalay Bay.

“Caesars” refers to Caesars Entertainment, ~~Operating Company,~~ Inc., a Delaware corporation and, ~~“CEC”~~as the context requires, its subsidiaries.

“Caesars Las Vegas Master Lease” refers to the lease agreement for Caesars Palace Las Vegas and the Harrah’s Las Vegas facilities, as amended from time to time.

“Caesars Leases” refer collectively to the Caesars Las Vegas Master Lease, the Caesars Regional Master Lease and the Joliet Lease, in each case, unless the context otherwise requires.

“Caesars Regional Master Lease” refers to the lease agreement for the regional properties (other than the facility in Joliet, Illinois) leased to Caesars, as amended from time to time.

“Century Casinos” refers to Century Casinos, Inc., a Delaware corporation, and, as the context requires, its subsidiaries.

“Century Master Lease” refers to the lease agreement for the (i) Mountaineer Casino, Racetrack & Resort located in New Cumberland, West Virginia, (ii) Century Casino Caruthersville located in Caruthersville, Missouri and (iii) Century Casino Cape Girardeau located in Cape Girardeau, Missouri, as amended from time to time.

“Chelsea Piers Mortgage Loan” refers to an $80.0 million mortgage loan agreement entered into on August 31, 2020 with Chelsea Piers New York with a term of seven years and secured by the Chelsea Piers complex in New York City.

“Co-Issuer” refers to VICI Note Co. Inc., a Delaware corporation, and co-issuer of the November 2019 Notes, February 2020 Notes and Exchange Notes.

“Credit Agreement” refers to the Credit Agreement, dated as of February 8, 2022, by and among VICI LP, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, as amended from time to time.

“Credit Facilities” refers collectively to the Delayed Draw Term Loan and the Revolving Credit Facility.

“Delayed Draw Term Loan” refers to the three-year unsecured delayed draw term loan facility of VICI LP provided under the Credit Agreement entered into in February 2022, as amended from time to time.

“EBCI” refers to the Eastern Band of Cherokee Indians, a federally recognized Tribe located in western North Carolina, and, as the context requires, its subsidiary and affiliate entities.

“Exchange Notes” refer collectively to (i) the $1,024.2 million aggregate principal amount of 5.625% senior unsecured notes due 2024, (ii) the$799.4 million aggregate principal amount of 4.625% senior unsecured notes due 2025, (iii) the$480.5 millionaggregate principal amount of 4.500% senior unsecured notes due 2026, (iv) the$729.5 million aggregate principal amount of 5.750% senior unsecured notes due 2027, (v) the$349.3 million aggregate principal amount of 4.500% senior unsecured notes due 2028, and (vi) the$727.1 million aggregate principal amount of 3.875% senior unsecured notes due 2029, in each case issued by VICI LP and Co-Issuer, in April 2022 pursuant to the Exchange Offers and Consent

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Solicitations (as defined herein).

“February 2020 Notes” refer collectively to (i) the $750.0 million aggregate principal amount of 3.500% senior unsecured notes due 2025, (ii) the $750.0 million aggregate principal amount of 3.750% senior unsecured notes due 2027, and (iii) the $1.0 billion aggregate principal amount of 4.125% senior unsecured notes due 2030, in each case issued by VICI LP and Co-Issuer in February 2020.

“Forum Convention Center Mortgage Loan” refers to a $400.0 million mortgage loan agreement entered into on September 18, 2020 with a subsidiary of Caesars with a term of five years and secured by, among other things, the Caesars Forum Convention Center in Las Vegas.

“Greektown Lease” refers to the lease agreement for the Greektown Casino-Hotel, located in Detroit, Michigan, as amended from time to time.

“Hard Rock” means Hard Rock International, and, as the context requires, its subsidiary and affiliate entities.

“Hard Rock Cincinnati Lease” refers to the lease agreement for the Hard Rock Cincinnati Casino, located in Cincinnati, Ohio, as amended from time to time.

“JACK Cleveland/Thistledown Lease” refers to the lease agreement for the JACK Cleveland Casino located in Cleveland, Ohio, and the JACK Thistledown Racino facility located in North Randall, Ohio, as amended from time to time.

“JACK Entertainment” refers to JACK Ohio LLC, and, as the context requires, its subsidiary and affiliate entities.

“Joliet Lease” refers to the lease agreement for the facility in Joliet, Illinois, as amended from time to time.

“Lease Agreements” refer collectively to the BREIT JV Lease, the Caesars Leases, the Century Master Lease, the Southern Indiana Lease, the Hard Rock Cincinnati Lease, the JACK Cleveland/Thistledown Lease, the MGM Master Lease, the PENN Entertainment ~~Corporation,~~Leases, and the ~~parent~~Venetian Lease, unless the context otherwise requires.

“Margaritaville Lease” refers to the lease agreement for Margaritaville Resort Casino, located in Bossier City, Louisiana, as amended from time to time.

“Mergers” refer to a series of ~~CEOC.~~

~~On October 6, 2017 (the “Emergence Date”), CEOC merged~~transactions governed by the MGP Master Transaction Agreement that occurred on April 29, 2022, consisting of (i) the contribution of our interest in VICI LP to VICI OP, which subsequent to the MGP Transactions serves as our new operating partnership, followed by (ii) the merger of MGP with and into ~~CEOC~~Venus Sub LLC, a Delaware limited liability company and wholly owned subsidiary of VICI LP (“~~New CEOC”~~REIT Merger Sub”), with ~~New CEOC~~REIT Merger Sub surviving the merger, followed by (iii) the distribution by REIT Merger Sub of the interests of the general partner of MGP OP to VICI LP and (iv) the merger of REIT Merger Sub with and into MGP OP, with MGP OP surviving such merger. ~~See “Explanatory Note”~~

“MGM” refers to MGM Resorts International, a Delaware corporation, and, as the context requires, its subsidiaries.

“MGM Master Lease” refers to the lease agreement for the wholly-owned properties leased to MGM.

“MGM Tax Protection Agreement” refers to the tax protection agreement entered into with MGM upon consummation of the MGP Transactions.

“MGP” refers to MGM Growth Properties LLC, a Delaware limited liability company, and, as the context requires, its subsidiaries.

“MGP Master Transaction Agreement” refers to that certain Master Transaction Agreement between the Company, MGP, MGP OP, VICI LP, REIT Merger Sub, VICI OP, and MGM entered into on August 4, 2021.

“MGP OP” refers to MGM Growth Properties Operating Partnership LP, a Delaware limited partnership, and, as the context requires, its subsidiaries.

“MGP OP Notes” refer collectively to the notes issued by MGP OP and MGP Finance Co-Issuer, Inc. (“MGP Co-Issuer” and, together with MGP OP, the “MGP Issuers”), consisting of (i) the 5.625% Senior Notes due 2024 issued pursuant to the indenture, dated as of April 20, 2016, (ii) the 4.625% Senior Notes due 2025 issued pursuant to the indenture, dated as of June 5, 2020, (iii) the 4.500% Senior Notes due 2026 issued pursuant to the indenture, dated as of August 12, 2016, (iv) the 5.750% Senior Notes due 2027 issued pursuant to the indenture, dated as of January 25, 2019, (v) the 4.500% Senior Notes due 2028 issued pursuant to the indenture, dated as of September 21, 2017, and (vi) the 3.875% Senior Notes due 2029 issued pursuant to the indenture, dated as of November 19, 2020, in ~~this Quarterly Report~~each case, as amended or supplemented as of the date hereof, among the MGP Issuers and U.S. Bank National Association, as trustee (the “MGP Trustee”).

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

“MGP Transactions” refer collectively to a series of transactions pursuant to the MGP Master Transaction Agreement between us, MGP and MGM and the other parties thereto in connection with our acquisition of MGP on ~~Form 10-Q.~~April 29, 2022, as contemplated by the MGP Master Transaction Agreement, including the MGM Tax Protection Agreement and the MGM Master Lease.

“November 2019 Notes” refer collectively to (i) the $1.25 billion aggregate principal amount of 4.250% senior unsecured notes due 2026, and (ii) the $1.0 billion aggregate principal amount of 4.625% senior unsecured notes due 2029, in each case issued by VICI LP and VICI Note Co. Inc., as Co-Issuer, in November 2019.

“Partner Property Growth Fund” refers to certain arrangements with certain tenants relating to our funding of “same-store” capital improvements, including redevelopment, new construction projects and other property improvements, in exchange for increased rent pursuant to the terms of our existing Lease Agreements with such tenants.

“PENN Entertainment” refers to PENN Entertainment Gaming, Inc., a Pennsylvania corporation, and, as the context requires, its subsidiaries.

“PENN Entertainment Leases” refer collectively to the Margaritaville Lease and the Greektown Lease, unless the context otherwise requires.

“Revolving Credit Facility” refers to the four-year unsecured revolving credit facility of VICI LP provided under the Credit Agreement entered into in February 2022, as amended from time to time.

“Secured Revolving Credit Facility” refers to the five-year first lien revolving credit facility entered into by VICI PropCo in December 2017, as amended, which was terminated on February 8, 2022.

“Seminole Hard Rock” refers to Seminole Hard Rock Entertainment, Inc.

“Senior Unsecured Notes” refer collectively to the November 2019 Notes, the February 2020 Notes, the April 2022 Notes and the Exchange Notes and the MGP OP Notes.

“Southern Indiana Lease” refers to the lease agreement with EBCI for the Caesars Southern Indiana Casino and Hotel, located in Elizabeth, Indiana (“Caesars Southern Indiana”), as amended from time to time.

“Term Loan B Facility” refers to the seven-year senior secured first lien term loan B facility entered into by VICI PropCo in December 2017, as amended from time to time, which was repaid in full on September 15, 2021.

“Venetian Acquisition” refers to our acquisition of the Venetian Resort, with Apollo, which closed on February 23, 2022.

“Venetian Lease” refers to the lease agreement for the Venetian Resort Las Vegas and Venetian Expo, located in Las Vegas, Nevada (the “Venetian Resort”).

“Venetian Tenant” refers to an affiliate of certain funds managed by affiliates of Apollo.

“VICI Golf” refers to VICI Golf LLC, a Delaware limited liability company that is the owner of our golf segment business.

“VICI Issuers” refers to VICI Properties L.P., a Delaware limited partnership and VICI Note Co. Inc., a Delaware corporation.

“VICI LP” refers to VICI Properties L.P., a Delaware limited partnership and an indirect wholly owned subsidiary of VICI.

“VICI OP” refers to VICI Properties OP LLC, a Delaware limited liability company and a consolidated subsidiary of VICI, which serves as our operating partnership.

“VICI OP Units” refer to limited liability company interests in VICI OP.

“VICI PropCo” refers to VICI Properties 1 LLC, a Delaware limited liability company ~~which through its subsidiaries own the real estate assets transferred by CEOC to~~ and an indirect wholly owned subsidiary of VICI.

Table of Contents

VICI REIT on the Emergence Date and “CPLV” refers to the Caesars Palace Las Vegas facility located in the Las Vegas Strip, which was owned by CEOC prior to the Emergence Date and whose related real estate assets were transferred by CEOC to us on the Emergence Date.PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Note 1 — Business ~~Formation~~ and ~~Basis of Presentation~~Organization

Business ~~Formation~~

On January 15, 2015, CEOC and certain of its subsidiaries (the “Caesars Debtors”) voluntarily filed for relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) with the United States Bankruptcy Court for the Northern District of Illinois (the “Bankruptcy Court”). As a result of this filing, CEOC operated as a debtor-in-possession under the Bankruptcy Code. CEOC’s plan of reorganization (the “Plan”) was confirmed by the Bankruptcy Court on January 17, 2017.

VICI REIT was organized as a limited liability company and wholly owned subsidiary of CEOC in Delaware on July 5, 2016 and was subsequently converted to a corporation under the laws of the State of Maryland. On May 5, 2017, VICI REIT issued common stock to CEOC in conjunction with VICI REIT’s conversion to a corporation under the laws of the State of Maryland. As of September 30, 2017, VICI REIT had not conducted operations and had no assets or liabilities.

~~On the~~ ~~Emergence Date~~ ~~, subsidiaries of CEOC transferred certain real estate assets (the “Properties”) and four golf course businesses (“Caesars Entertainment Outdoor~~”) to VICI REIT in exchange for 100% of VICI REIT’s common stock, series A convertible preferred stock (“Series A Preferred Stock”) and other consideration, including debt issued by certain subsidiaries of VICI REIT and the proceeds of mortgage backed debt issued by other subsidiaries of VICI REIT, for distribution to certain of CEOC’s creditors.

~~Following the~~ ~~Emergence Date, VICI REIT is a stand-alone entity initially owned by certain former creditors of CEOC. VICI REIT is~~We are primarily engaged in the business of owning ~~acquiring~~ and ~~developing~~acquiring gaming, hospitality and entertainment ~~destinations. A subsidiary~~destinations, subject to long-term triple-net leases. As of September 30, 2022, our national, geographically diverse real estate portfolio consisted of 43 market-leading properties, including Caesars Palace Las Vegas, MGM Grand and the Venetian Resort. Our properties are leased to, and our tenants are, subsidiaries of, or entities managed by, Apollo, Caesars, Century Casinos, EBCI, JACK Entertainment, MGM, PENN Entertainment and Seminole Hard Rock, with Caesars and MGM being our largest tenants. VICI ~~REIT leases the Properties to New CEOC and~~also owns four championship golf courses located near certain of ~~its subsidiaries under lease agreements (the “Master Leases”).~~ our properties.

VICI, ~~REIT conducts its real property business through an operating partnership~~the parent company, is a Maryland corporation and ~~its golf course business through a taxable REIT subsidiary (“TRS”),~~ ~~Caesars Entertainment Outdoor. VICI REIT intends to make an election on its Federal income tax return for its taxable year ending December 31, 2017 to be treated as a~~internally managed real estate investment trust (“REIT”).

~~The balance sheets should be read in conjunction with the~~ ~~Combined Statement of Investments of Real Estate Assets to be Contributed to VICI Properties Inc.~~ ~~and the combined financial statements of~~ ~~Caesars Entertainment Outdoor, which are included elsewhere within this Quarterly Report on Form 10-Q.~~

~~Basis of Presentation~~

The accompanying balance sheets are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). Statements of operations, cash flows and equity are not presented as there has been no activity since the date of inception through September 30, 2017.

VICI REIT must distribute at least 90% of its taxable income to shareholders to maintain its intended qualification as a REIT. To the extent VICI REIT annually distributes less than 100% of its taxable income, it will be subject to for U.S. federal income tax ~~at regular corporate rates on any undistributed net taxable income. In addition, VICI REIT’s TRS will also be subject to income tax at regular corporate rates on any of its taxable income.~~

~~VICI PROPERTIES INC.~~

~~NOTES TO BALANCE SHEETS (Continued)~~

~~(UNAUDITED)~~

~~Reportable Segments~~

purposes. Our real property business, which represents the substantial majority of our assets, is conducted through VICI OP and indirectly through VICI LP and our golf course business, VICI Golf, is conducted through a direct wholly-owned taxable REIT subsidiary (“TRS”) of VICI. As a REIT, we generally will ~~represent two reportable segments. The real property business segment will consist of leased real property and will represent~~not be subject to U.S. federal income taxes on our taxable income to the ~~substantial majority~~extent that we annually distribute all of our ~~business. The golf course business segment will consist of four golf courses, which each will be operating segments~~net taxable income to stockholders and ~~will be aggregated into one reportable segment.~~maintain our qualification as a REIT.

Note 2 — Summary of Significant Accounting Policies

~~Estimates~~Basis of Presentation

The accompanying Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements, including the notes thereto, are unaudited and condense or exclude some of the disclosures and information normally required in ~~order~~audited financial statements.

We believe the disclosures made are adequate to ~~prepare~~prevent the information presented from being misleading. However, the accompanying unaudited Financial Statements and related notes should be read in conjunction with VICI’s audited financial statements and notes thereto included in VICI’s most recent Annual Report on Form 10-K and VICI LP’s audited financial statements and notes thereto included as an exhibit to the Current Report on Form 8-K filed on April 18, 2022, as updated from time to time in our other filings with the SEC.

All adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. Certain prior period amounts have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of financial statements in conformity with ~~US GAAP. Significant~~GAAP requires us to make estimates ~~judgments,~~and assumptions. These estimates and assumptions ~~will~~affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from these estimates.

Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be ~~required~~expected for the year ending December 31, 2022.

Principles of Consolidation

The accompanying consolidated financial statements include our accounts and the accounts of VICI LP, and the subsidiaries in which we or VICI LP has a ~~number~~controlling interest. All intercompany account balances and transactions have been eliminated in consolidation. We consolidate all subsidiaries in which we have a controlling financial interest and VIEs for which we or one of ~~areas, including, but not limited to:~~our consolidated subsidiaries is the ~~application~~primary beneficiary.

Table of ~~fresh start reporting;~~Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Non-controlling Interests

We present non-controlling interests and classify such interests as a component of consolidated stockholders’ equity or partners’ capital, separate from VICI stockholders’ equity and VICI LP partners’ capital. As of September 30, 2022, VICI’s non-controlling interests represent an approximate 1.3% third-party ownership of VICI OP in the ~~recognition~~form of ~~revenue from our leases; determining~~VICI OP Units and a 20% third-party ownership of Harrah’s Joliet LandCo LLC, the ~~useful lives of real estate properties;~~entity that owns the Harrah’s Joliet facility and ~~evaluating~~is the ~~impairment of long-lived assets. The judgment on such estimates and underlying assumptions is based on our historical experience that we believe is reasonable~~lessor under the ~~circumstances. In many instances changes in the accounting estimates are likely to occur from period to period. Actual results may differ~~related Joliet Lease. As VICI OP is a parent entity of VICI LP, VICI LP’s only non-controlling interest is that of third-party ownership of Harrah’s Joliet LandCo LLC.

Cash, Cash Equivalents and Restricted Cash

Cash consists of cash-on-hand and cash-in-bank. Any investments with an original maturity of three months or less from the ~~estimates.~~date of purchase are considered cash equivalents and are carried at cost, which approximates fair value. As of September 30, 2022 and December 31, 2021, we did not have any restricted cash.

~~Revenue Recognition~~Investments in Leases - ~~Leases~~Sales-type, Net

~~As a REIT, the majority of~~We account for our ~~revenues will be derived from rent received from our tenants under long-term triple-net leases. The accounting guidance~~investments in leases under ASC ~~840—Leases~~842 “Leases” (“ASC ~~840”~~842”) ~~is complex~~. Upon lease inception or lease modification, we assess lease classification to determine whether the lease should be classified as a direct financing, sales-type or operating lease. As required by ASC 842, we separately assess the land and ~~requires~~building components of the ~~use of judgment and assumptions by management~~property to determine the ~~proper accounting treatment~~classification of ~~a lease. We will perform a lease classification upon lease inception, to determine if we account for~~each component. If the lease ascomponent is determined to be a ~~capital~~direct financing or ~~operating~~sales-type lease, we record a net investment in the lease, which is equal to the sum of the lease receivable and the unguaranteed residual asset, discounted at the rate implicit in the lease.

~~Under ASC 840, for leases of both building and land, if~~ Any difference between the fair value of the ~~land~~asset and the net investment in the lease is ~~25%~~considered selling profit or ~~more~~loss and is either recognized upon execution of the ~~total fair value~~lease or deferred and recognized over the life of the ~~leased property at~~ lease, ~~inception~~depending on the classification of the lease. Since we ~~consider~~purchase properties and simultaneously enter into new leases directly with the tenants, the net investment in the lease is generally equal to the purchase price of the asset, and, due to the long-term nature of our leases, the land and building ~~separately for~~components of an investment generally have the same lease classification. ~~In these cases, if~~

We have determined that the land and building ~~element~~components of all of the Caesars Leases (excluding the Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Atlantic City real estate asset components (the “Harrah’s Call Properties”) of the Caesars Regional Master Lease), Century Master Lease, Hard Rock Cincinnati Lease, PENN Entertainment Leases, Southern Indiana Lease, and Venetian Lease meet the definition of a sales-type lease ~~meets~~under ASC 842.

Investments in Leases - Financing Receivables, Net

In accordance with ASC 842, for transactions in which we enter into a contract to acquire an asset and lease it back to the ~~criteria to be~~seller under a lease classified as a ~~capital~~sales-type lease ~~then~~(i.e., a sale leaseback transaction), control of the asset is not considered to have transferred to us. As a result, we ~~account~~do not recognize the net investment in the lease but instead recognize a financial asset in accordance with ASC 310 “Receivables” (“ASC 310”); however, the accounting for the financing receivable under ASC 310 is materially consistent with the accounting for our investments in leases - sales-type under ASC 842.

We determined that the land and building ~~as a capital lease~~components of the MGM Master Lease, JACK Cleveland/Thistledown Lease and the ~~land separately as an operating lease. If~~Harrah’s Call Properties asset components of the ~~building element does not~~Caesars Regional Master Lease meet the ~~criteria to be classified as a capital lease, then we account for the building and land as a single operating lease.~~

~~To determine if the building portion~~definition of a sales-type lease ~~triggers capital lease treatment~~and, since we ~~will conduct~~purchased and leased the ~~four lease tests~~assets back to the sellers under ~~ASC 840 as outlined below. If a lease meets any~~sale leaseback transactions, control is not considered to have transferred to us under GAAP. Accordingly, the MGM Master Lease, JACK Cleveland/Thistledown Lease and the Harrah’s Call Properties component of the ~~criteria below, it is~~Caesars Regional Master Lease are accounted for as Investments in leases - financing receivables on our Balance Sheet, net of allowance for credit losses, in accordance with ASC 310.

Lease Term

We assess the noncancelable lease term under ASC 842, which includes any reasonably assured renewal periods. All of our Lease Agreements provide for an initial term, with multiple tenant renewal options. We have individually assessed all of our Lease Agreements and concluded that the lease term includes all of the periods covered by extension options as it is reasonably certain our tenants will renew the Lease Agreements. We believe our tenants are economically compelled to renew the Lease Agreements due to the importance of our real estate to the operation of their business, the significant capital they have invested and are required to invest in our properties under the terms of the Lease Agreements and the lack of suitable replacement assets.

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Investment in Unconsolidated Affiliate

We account for our investment in unconsolidated affiliate using the equity method of accounting as we have the ability to exercise significant influence, but not control, over operating and financing policies of the investment. Our equity method investment represents our 50.1% ownership interest in the BREIT JV, which was acquired in the MGP Transactions and, as a ~~capital lease.~~


1.	Transfer of ownership. The lease transfers ownership of the property to the lessee by the end of the lease term. This criterion is met in situations in which the lease agreement provides for the transfer of title at or shortly after the end of the lease term.


2.	Bargain purchase option. The lease contains a provision allowing the lessee, at its option to purchase the leased property for a price which is sufficiently lower than the expected fair value of the property at the date the option becomes exercisable.


3.	Lease term. The lease term is equal to 75% or more of the estimated economic life of the leased property. However, if the beginning of the lease falls within the last 25% of the total estimated economic life of the leased property, including earlier years of use, this criterion shall not be used for purposes of classifying the lease. This test is conducted on a property by property basis.

Minimum lease payments. The present value of the minimum lease payments at the beginning of the lease term, excluding the portion of payments representing executory costs such as insurance, maintenance and taxes to be paid by the lessor, including any profit thereon, equals or exceeds 90% of the fair value of the leased property to the lessor at lease inception less any related investment tax credit retained by the lessor. If the beginning of the lease term falls within the last 25% of the total estimated economic life of the lease property, including earlier years of use, this criterion shall not be used for purposes of classifying the lease.

result, was recorded at relative fair value. The ~~tests outlined above, as well as~~difference in basis between our share of the ~~resulting calculations, require subjective judgments, such as determining, at lease inception, the fair~~carrying value of the BREIT JV and the relative fair value upon acquisition is amortized into Income from unconsolidated affiliate over the estimated useful life of the respective underlying real estate assets, the ~~residual~~remaining lease term of the BREIT JV Lease, or the remaining term of the assumed debt, as applicable.

We assess our investment in unconsolidated affiliate for recoverability and, if it is determined that a loss in value of the ~~assets at~~investment is other than temporary, we write down the ~~end of~~investment to its fair value.

Income from Leases and Lease Financing Receivables

We recognize the lease term, the likelihood a tenant will exercise all renewal options (in order to determine the lease term), the estimated remaining economic life of the leased assets, the incremental borrowing rate of the lessee and the interest rate implicit in the lease. A change in estimate or judgment can result in a materially different financial statement presentation.

~~VICI PROPERTIES INC.~~

~~NOTES TO BALANCE SHEETS (Continued)~~

~~(UNAUDITED)~~

~~The revenue recognition model is different under capital~~related income from our sales-type leases and ~~operating leases.~~

~~Under the operating~~ lease model, as the lessor, at lease inception the land is recorded as Real Estate Investments Accounted for Using the Operating Method and we record rental income from operating leases on a straight-line basis over the lease term. The amount of annual minimum lease payments attributable to the land after deducting executory costs, including any profit thereon, is determined by applying our incremental borrowing rate to the value of the land. We record this lease income as Rental Income from Operating Leases.

~~Under the direct~~ financing lease model, as the lessor, at lease inception we record the lease receivable as Real Estate Investments Accounted for Using the Direct Financing Method. Under the direct financing lease method, we recognize fixed amounts duereceivables on an effective interest basis at a constant rate of return over the ~~lease term.~~terms of the applicable leases. As a result, the cash payments accounted for under ~~direct~~sales-type leases and lease financing ~~leases~~receivables will not equal ~~the earned~~ income from ~~direct financing leases as~~our Lease Agreements. Rather, a portion of the cash rent we receive is recorded as ~~Earned~~ Income from ~~Direct Financing Leases~~sales-type leases or Income from lease financing receivables and loans, as applicable, in our Statement of Operations and a portion is recorded as a change to Investments in leases - sales-type, net or Investments in leases - financing receivables, net, as applicable.

Initial direct costs incurred in connection with entering into investments classified as sales-type leases are included in the balance of the net investment in lease. Such amounts will be recognized as a reduction to Income from investments in leases over the life of the lease using the effective interest method. Costs that would have been incurred regardless of whether the lease was signed, such as legal fees and certain other third-party fees, are expensed as incurred to Transaction and acquisition expenses in our Statement of Operations.

Loan origination fees and costs incurred in connection with entering into investments classified as lease financing receivables are included in the balance of the net investment and such amounts will be recognized as a reduction to Income from investments in loans and lease financing receivables over the life of the lease using the effective interest method.

Investments in Loans, net

Investments in loans are held-for-investment and are carried at historical cost, inclusive of unamortized loan origination costs and fees and allowances for credit losses. Income is recognized on an effective interest basis at a constant rate of return over the life of the related loan.

Allowance for Credit Losses

ASC 326 “Financial Instruments-Credit Losses” (“ASC 326”) requires that we measure and record current expected credit losses (“CECL”) for the majority of our investments, the scope of which includes our Investments in leases - sales-type, Investments in leases - financing receivables and Investments in loans.

We have elected to use a discounted cash flow model to estimate the Allowance for credit losses, or CECL allowance. This model requires us to develop cash flows which project estimated credit losses over the life of the lease or loan and discount these cash flows at the asset’s effective interest rate. We then record a CECL allowance equal to the difference between the amortized cost basis of the asset and the present value of the expected credit loss cash flows.

Expected losses within our cash flows are determined by estimating the probability of default (“PD”) and loss given default (“LGD”) of our tenants and borrowers and their parent guarantors, as applicable, over the life of each individual lease or financial asset. We have engaged a nationally recognized data analytics firm to assist us with estimating both the PD and LGD of our tenants and borrowers and their parent guarantors, as applicable. The PD and LGD are estimated during a reasonable and supportable period for which we believe we are able to estimate future economic conditions (the “R&S Period”) and a long-term period for which we revert to long-term historical averages (the “Long-Term Period”). The PD and LGD estimates for the R&S Period are developed using the current financial condition of the tenant or borrower and parent guarantor, as applicable, and applied to a projection of economic conditions over a two-year term. The PD and LGD for the Long-Term Period are estimated using the average historical default rates and historical loss rates, respectively, of public companies over

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

approximately the past 40 years that have similar credit profiles or characteristics to our tenants, borrowers and their parent guarantors, as applicable. We are unable to use our historical data to estimate losses as we have no loss history to date.

The CECL allowance is recorded as a reduction to ~~the Real Estate~~our net Investments ~~Accounted for using the Direct Financing Method.~~

~~Concentrations of Credit Risk~~

~~Following the~~ ~~Emergence Date, all of the real estate holdings of VICI REIT (other than~~ ~~Caesars Entertainment Outdoor~~)in leases - sales-type, Investments in leases - financing receivables, Investments in loans and Sales-type sub-leases included in Other assets on our Balance Sheet. We are leased to New CEOC and certain of its subsidiaries, and substantially all of VICI REIT’s revenues are derived from the Master Leases, which represents a concentration of credit risk due to the single tenant nature of our leases. Management believes that the corporate lease guaranty by New CEOC’s parent, CEC, and the rent coverage ratio mitigate this risk. Management does not believe there are any other significant concentrations of credit risk.

~~Real Estate Investments~~

For real estate investments accounted for using the operating method, we will continually monitor events and circumstances that could indicate that the carrying amount of our real estate investments may not be recoverable or realized. When events or changes in circumstances indicate that a potential impairment has occurred or that the carrying value of a real estate investment may not be recoverable, we use an estimate of the undiscounted value of expected future operating cash flows to determine whether the real estate investment is impaired. If the undiscounted cash flows plus net proceeds expected from the disposition of the asset is less than the carrying value of the assets, we recognize an impairment charge equivalent to the amount required to ~~reduce~~update our CECL allowance on a quarterly basis with the ~~carrying value~~resulting change being recorded in the Statement of Operations for the asset to its estimated fair value. We group our real estate investments together by property, the lowest level for which identifiable cash flows are available, in evaluating impairment. In assessing the recoverability of the carrying value,relevant period. Finally, each time we make ~~assumptions regarding future cash flows and other factors. Factors considered~~a new investment in performing this assessment include current operating results, market and other applicable trends and residual values, as well as the effect of obsolescence, demand, competition and other factors. If these estimates or related assumptions change in the future,an asset subject to ASC 326, we ~~may be~~are required to record an ~~impairment loss.~~initial CECL allowance for such asset, which will result in a non-cash charge to the Statement of Operations for the relevant period.

~~For real estate investments accounted~~We are required to estimate a CECL allowance related to contractual commitments to extend credit, such as future funding commitments under a revolving credit facility, delayed draw term loan, construction loan or through commitments made to our tenants to fund the development and construction of improvements at our properties through the Partner Property Growth Fund. We estimate the amount that we will fund for each contractual commitment based on (i) discussions with our borrowers and tenants, (ii) our borrowers' and tenants’ business plans and financial condition and (iii) other relevant factors. Based on these considerations, we apply a CECL allowance to the estimated amount of credit we expect to extend. The CECL allowance for unfunded commitments is calculated using the ~~direct financing method,~~same methodology as the allowance for all of our ~~net investment~~other investments subject to the CECL model. The CECL allowance related to these future commitments is recorded as a component of Other liabilities on our Balance Sheet.

Charge-offs are deducted from the allowance in the period in which they are deemed uncollectible. Recoveries previously written off are recorded when received. There were no charge-offs or recoveries for the three and nine months ended September 30, 2022 and 2021.

Refer to Note 5 - Allowance for Credit Losses for further information.

Other income and Other expenses

Other income primarily represents sub-lease income related to certain ground and use leases. Under the Lease Agreements, the tenants are required to pay all costs associated with such ground and use leases and provides for their direct ~~financing lease is evaluated for impairment~~payment to the landlord. This income and the related expense are recorded on a gross basis in our Statement of Operations as ~~necessary, if indicators of impairment~~required under GAAP as we are ~~present, to determine if there has been an-other-than-temporary decline in~~ the ~~residual value of the property or a change in the lessee’s credit worthiness.~~primary obligor under these certain ground and use leases.

~~Income Taxes—REIT Qualification~~Fair Value Measurements

We intend to elect to be taxed and qualify as a REIT for U.S. Federal income tax purposes commencing with our taxable year ending December 31, 2017, and we intend to continue to be organized and to operate in a manner that permits us to qualify as a REIT beyond that taxable year end. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our annual REIT taxable income to shareholders, determined without regard to the dividends paid deduction and excluding any net capital gains. As a REIT, we generally will not be subject to Federal income tax on income that we pay as distributions to our shareholders. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. Federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate income tax rates, and distributions paid to our shareholders would not be deductible by us in computing taxable income. Any resulting corporate liability created if we fail to qualify as a REIT could be substantial and could materially and adversely affect our net income and net cash available for distribution to shareholders. Unless we were entitled to relief under certain Code provisions, we also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify to be taxed as a REIT.

~~VICI PROPERTIES INC.~~

~~NOTES TO BALANCE SHEETS (Continued)~~

~~(UNAUDITED)~~

~~Note 3 — Recently Issued Accounting Pronouncements~~

~~The Financial Accounting Standards Board (the “FASB”) issued the following authoritative guidance amending the FASB Accounting Standards Codification.~~

~~Derivatives and Hedging - August 2017~~: This revised accounting guidance expands hedge accounting by making additional hedge strategies eligible for hedge accounting and amending presentation and disclosure requirements. The intent of these revisions is to simplify application of hedge accounting and increase transparency of information about an entity’s risk management activities. The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact this guidance will have on our financial statements.

~~Compensation - Stock Compensation - May 2017~~: Amendments in this update provide guidance regarding which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. An entity should account for the effects of a modification unless all of the following are met: (i) the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award; (ii) the vesting conditions of the modified award are the same as the vesting conditions of the original award; and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as before the original award was modified. Amendments in this update are effective for all periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. Application of amended guidance should be applied prospectively to an award modified on or after the adoption date.

~~Business Combinations - January 2017:~~Updated amendment intending to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for acquisitions (or disposals) of assets or businesses. Amendments in this update provide a more robust framework to use in determining when a set of assets and activities is a business and to provide more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. Amendments should be applied on a prospective basis on or after the effective date. No disclosures are required at transition. The amendments are effective to annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is allowed as follows: (1) transactions for which the acquisition date occurs before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance and (2) transactions in which a subsidiary is deconsolidated or a group of assets is derecognized that occur before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. We are currently assessing the effect the adoption of this standard will have on our financial statements.

~~Financial Instruments-Credit Losses - June 2016 (amended January 2017)~~: Amended guidance that replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of broader range of reasonable and supportable information to inform credit loss estimates. Amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual right to receive cash. Amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We are currently assessing the effect the adoption of this standard will have on our financial statements.

~~Leases - February 2016 (amended January 2017):~~ The amended guidance requires most lease obligations to be recognized as a right-of-use asset with a corresponding liability on the balance sheet. The guidance also requires additional qualitative and quantitative disclosures to assess the amount, timing, and uncertainty of cash flows arising from leases. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance should be implemented for the earliest period presented using a modified retrospective approach, which includes optional practical expedients primarily focused on leases that commence before the effective date. The qualitative and quantitative effects of adoption are still being analyzed. We are in the process of evaluating the full impact the new guidance will have on our financial statements.

~~Revenue from Contracts with Customers - May 2014 (amended January 2017)~~: The new guidance is intended to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP applicable to revenue transactions. Existing industry guidance will be eliminated. The FASB has recently issued several amendments to the standard, including clarification on accounting for and identifying performance obligations. This guidance is effective for annual reporting periods beginning after

~~VICI PROPERTIES INC.~~

~~NOTES TO BALANCE SHEETS (Continued)~~

~~(UNAUDITED)~~

December 15, 2017, including interim periods within those reporting periods. The guidance should be applied using the full retrospective method or retrospectively with the cumulative effect initially applying the guidance recognized at the date of initial application. We anticipate adopting this standard effective January 1, 2018. We have performed a preliminary assessment and anticipate this standard will not have a material effect on our financial statements. We expect the most significant effect will be related to the accounting for the golf course revenue, which will be immaterial to the operations of VICI REIT. However, the quantitative effects of these changes are being analyzed. We are assessing the full effect the adoption of this standard will have on our financial statements.

~~Income Taxes - October 2016~~: Amended guidance that addresses intra-entity transfers of assets other than inventory, which requires the recognition of any related income tax consequences when such transfers occur. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Amendments are effective for fiscal years beginning after December 15, 2017, and interim reporting periods within those years. Early adoption is permitted. We are assessing the impact the adoption of this standard will have on our financial statements.

~~Statement of Cash Flows - August 2016~~: Amended guidance that addresses eight specific cash flow issues with the objective of reducing diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments should be applied retrospectively to each period presented. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We are currently assessing the effect the adoption of this standard will have on our financial statements.

~~Note 4 — Income Taxes~~

To qualify as a REIT, VICI REIT must meet certain organizational, income, asset, and distribution tests. Accordingly, VICI REIT will generally not be subject to corporate U.S. Federal or state income tax to the extent that it makes qualifying distributions to its shareholders and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements, including certain asset, income, distribution, and share ownership tests. VICI REIT intends to comply with these requirements and maintain REIT status. However, VICI REIT may still be subject to Federal excise tax, as well as certain state and local income and franchise taxes and VICI Golf LLC will be subject to Federal, state and local income taxes.

~~Note 5 — Commitments and Contingencies~~

~~Litigation~~

~~In the ordinary course of business, from time to time, VICI REIT may be subject to legal claims and administrative proceedings, none of which are currently outstanding.~~

~~Note 6 — Subsequent Events~~

~~Emergence Date~~

~~Pursuant to the Plan, on the~~ ~~Emergence Date~~, the historical business of CEOC was separated by means of a spin-off transaction whereby the Caesars Debtors’ real property assets (subject to certain exceptions) and golf course operations were transferred to VICI REIT. New CEOC and certain of New CEOC’s subsidiaries lease the transferred real property assets pursuant to the Master Leases. CEC guarantees the payment obligations of the tenants under the Master Leases and an affiliate of CEC manages the operating activities of such properties.

~~Management estimates that the properties transferred have a fair value range between $8.2 billion and $8.4 billion.~~

~~Accounting Impact of Emergence~~

Upon emergence, the Company will apply fresh start accounting to its consolidated financial statements. Our Annual Report on Form 10-K for the fiscal year ending ended December 31, 2017 will reflect the consummation of the Plan and the adoption of fresh start accounting.

~~VICI PROPERTIES INC.~~

~~NOTES TO BALANCE SHEETS (Continued)~~

~~(UNAUDITED)~~

~~In the application of fresh start accounting, the Company allocates the enterprise value to~~measure the fair value of ~~assets~~financial instruments based on assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and ~~liabilities in conformity~~the reporting entity’s own assumptions about market participant assumptions. In accordance with the ~~guidance~~fair value hierarchy, Level 1 assets/liabilities are valued based on quoted prices for ~~the acquisition method of~~identical instruments in active markets, Level 2 assets/liabilities are valued based on quoted prices in active markets for similar instruments, on quoted prices in less active or inactive markets or on other “observable” market inputs, and Level 3 assets/liabilities are valued based significantly on “unobservable” market inputs.

Refer to Note 9 - Fair Value for further information.

Derivative Financial Instruments

We record our derivative financial instruments as either Other assets or Other liabilities on our Balance Sheet at fair value.

The accounting for ~~business combinations. The amount remaining after allocation of the enterprise value to~~changes in the fair value of ~~identified tangible and intangible assets and liabilities, if any, is reflected as goodwill and subject to periodic evaluation for impairment. In addition to fresh start accounting,~~derivatives depends on the ~~Company’s consolidated financial statements will reflect all effects~~intended use of the ~~transactions contemplated by the Plan. Accordingly, the Company’s consolidated balance sheet at December 31, 2017 will not be comparable~~derivative, whether we elected to ~~its balance sheet for periods prior to the adoption of fresh start~~designate a derivative in a hedging relationship and apply hedge accounting and ~~prior~~whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows are considered cash flow hedges. We formally document our hedge relationships and designation at the contract’s inception. This documentation includes the identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and our evaluation of the effectiveness of its hedged transaction.

On a quarterly basis, we also assess whether the derivative we designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in the value or cash flows of the hedged transactions. If it is determined that a

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

derivative is not highly effective at hedging the designated exposure, hedge accounting ~~for~~is discontinued and the changes in fair value of the instrument are included in Net income prospectively. If the hedge relationship is terminated, then the value of the derivative previously recorded in Accumulated other comprehensive income (loss) is recognized in earnings when the hedged transactions affect earnings. Changes in the fair value of our derivative instruments that qualify as hedges are reported as a component of Accumulated other comprehensive income (loss) in our Balance Sheet with a corresponding change in Unrealized gain (loss) in cash flows hedges within Other comprehensive income on our Statement of Operations.

We use derivative instruments to mitigate the effects of ~~the Plan.~~

At emergence, management estimates that Real Estate Investments accounted for using the direct financing method have a fair value between $7.0 billion and $7.1 billion; Real Estate Investments accounted for using the operating method have a fair value between $1.1 billion and $1.2 billion; and property and equipment transferred that is used in operations have a fair value between $50 million and $100 million. In accordance with the Plan, CEOC transferred $55.7 million of cash to the Company at emergence.

~~In addition, at emergence, the Company entered into debt agreements totaling $4.917 billion, of which $250.0 million was exchanged for shares of VICI REIT’s common stock on November 6, 2017 (see “The Mandatory Conversions” below).~~

~~Rentals under Direct Financing and Operating Leases~~

On the Emergence Date, VICI REIT entered into three Master Leases with New CEOC and certain of its subsidiaries. They include a separate lease for Caesars Palace Las Vegas (“CPLV Lease Agreement”) which provides for a fixed annual base rent for each of the first seven years of the lease term of $165.0 million per year; a separate lease for the Harrah’s Joliet facilities (“Joliet Lease Agreement”) in which the Company’s portion of the base rent for the first seven years of the lease term is 80% of $39.625 million per year; and a lease for all other properties leased to New CEOC and certain of its subsidiaries (“Non-CPLV Lease Agreement”) which provides for a fixed annual base rent for each of the first seven years of the lease term of $433.3 million per year. The Master Leases provide for an initial term of 15 years commencing on the ~~Emergence Date~~, with no purchase option. At the option of New CEOC, the Master Leases may be extended for up to four five-year renewal terms beyond the initial term, on substantially the same terms and conditions. In addition, each lease agreement contains a fixed annual rent escalator on the base rent equal to the greater of 2% or the increase in the Consumer Price Index commencing on the second year of the lease with respect to the CPLV Lease Agreement and on the sixth year of the lease with respect to the Joliet and Non-CPLV Lease Agreements.

Future Minimum Rental Payments Due from Noncancelable Leases⁽¹⁾⁽²⁾
(In millions)
Remaining 2017 $ 149.0
2018 630.6
2019 633.9
2020 637.2
2021 640.7
2022 and thereafter 24,948.3
Total $ 27,639.7

~~____________________~~


⁽¹⁾	~~Amounts exclude any variable rental payments during the terms of the Master Leases~~


⁽²⁾	~~Amounts include renewal terms and minimum fixed annual rent escalator (minimum 2% annual increases described above)~~

~~Golf Course Use Agreement~~

On the Emergence Date, subsidiaries of VICI Golf LLC, a subsidiary of the Company, entered into a golf course use agreement (the “Golf Course Use Agreement”) with New CEOC and Caesars Enterprise Services, LLC (“CES”) (collectively, the “users”), whereby the users were granted certain priority rights and privileges with respect to access and use of certain golf course properties. Payments under the Golf Course Use Agreement are comprised of a $10.0 million annual membership fee, use fees and minimum rounds fees. The membership fee is subject to increase or decrease, as applicable, whenever rent under the Non-CPLV Lease Agreement is adjusted in accordance with the terms of the Non-CPLV Lease Agreement; and the adjusted membership fee will be calculated based on the proportionate increase or decrease, as applicable, in rent under the Non-CPLV Lease Agreement. The use fees and minimum round fees are subject to the Annual Escalator beginning at the times provided under the Golf Course Use Agreement.

~~VICI PROPERTIES INC.~~

~~NOTES TO BALANCE SHEETS (Continued)~~

~~(UNAUDITED)~~

~~Common Stock and Preferred Stock~~

Effective on the Emergence Date, the Company has authority to issue 750,000,000 shares of stock, consisting of 700,000,000 shares of Common Stock, $0.01 par value per share and 50,000,000 shares of Preferred Stock, $0.01 par value per share (“Preferred Stock”), of which 12,000,000 shares has been classified as Series A Convertible Preferred Stock, $0.01 par value per share (“Series A Preferred Stock”).

~~On the~~ ~~Emergence Date~~, the Company issued 177,160,494 shares of common stock and 12,000,000 shares of Series A preferred stock with an aggregate liquidation preference of $300.0 million ($25 per share) to CEOC and certain of its subsidiaries in exchange for the Properties and Caesars Entertainment Outdoor. CEOC distributed such shares to certain of its creditors and to certain backstop parties.

Pursuant to the Plan and a Backstop Commitment Agreement dated September 12, 2017, the backstop purchasers agreed, or otherwise had the right, to purchase a specified number of the shares of the Series A preferred stock for cash, with the cash proceeds of such purchases being paid to certain creditors of CEOC. An aggregate of 6,002,907 shares of Series A preferred stock were purchased by the backstop purchasers on the Emergence Date (the “Backstop Shares”) at a price of $20.83 per share and an aggregate of 5,997,093 shares of Series A preferred stock were issued to certain creditors of CEOC as a portion of the recovery on account of their claims.

~~The Mandatory Conversions~~

On November 6, 2017, all of the Series A preferred stock automatically converted into 51,433,692 shares of the Company’s common stock (the “Mandatory Preferred Conversion”). No additional consideration was payable in connection with the Mandatory Preferred Conversion.

In addition, on the Emergence Date, CPLV Mezz 3, a special-purpose parent entity of CPLV, issued a junior tranche of CPLV Mezzanine Debt in an amount of $250.0 million to institutional accredited investors, which debt automatically converted into an aggregate of 17,630,700 shares of the Company’s common stock on November 6, 2017 (the “Mandatory Mezzanine Conversion”). No additional consideration was payable in connection with the Mandatory Mezzanine Conversion.

~~Indebtedness Following Emergence from Bankruptcy~~

Final Book Value at Emergence
Maturity Rate (Dollars in millions)
Senior Secured First Lien Term Loans (“Term Loans”) 2022 Variable 1,638.4
First Priority Senior Secured Notes (“First Lien Notes”) 2022 Variable 311.7
Second Priority Senior Secured Notes (“Second Lien Notes”) 2023 8.00% 766.9
CPLV Debt ⁽¹⁾

CPLV Market Debt 2022 4.36% 1,550.0
CPLV Mezzanine Debt ⁽²⁾
2022 Various 650.0
Total Debt $ 4,917.0

~~____________________~~


⁽¹⁾	~~Syndicated debt issued to third parties for cash. Proceeds were distributed to certain creditors of CEOC under the Plan.~~


⁽²⁾	Three tranches of mezzanine debt for $650.0 million were issued under the CPLV Mezzanine Loan Agreement. The $250.0 million junior tranche was automatically exchanged for Company stock on November 6, 2017.

~~Senior Secured Credit Facilities~~

On the Emergence Date, VICI PropCo and certain of its subsidiaries entered into a first lien credit agreement (the “Credit Agreement”) among VICI PropCo, as borrower, the lenders party thereto, and Wilmington Trust, National Association, as administrative agent, governing the senior secured credit facilities. The senior secured credit facilities provide for senior secured financing consisting of senior secured first lien term loans (“Term Loans”) distributed to certain of CEOC’s creditors pursuant to the terms of the Plan in an aggregate principal amount of $1,638.4 million which mature in 2022. The senior secured credit facilities

~~VICI PROPERTIES INC.~~

~~NOTES TO BALANCE SHEETS (Continued)~~

~~(UNAUDITED)~~

have capacity to add incremental loans in an aggregate amount of: (a) $60.0 million plus (b) $1,450.0 million plus (c) additional amounts, subject to the borrower and its restricted subsidiaries not exceeding certain leverage ratios.

VICI PropCo will pay interest quarterly on the Term Loans at a rate per annum, reset quarterly, equal to (i) with respect to any ABR borrowings, the sum of ABR (as defined in the Credit Agreement) and 2.50% and (ii) with respect to Eurocurrency borrowings, the sum of the Adjusted Eurocurrency Rate (as defined in the Credit agreement) and 3.50%. The senior secured credit facilities mature on October 15, 2022.

VICI PropCo’s material, domestic wholly-owned subsidiaries, other than CPLV, certain CPLV-related entities and VICI FC Inc. are guarantors. The senior secured credit facilities are secured by a pledge of substantially all of the existing and future property and assets of VICI PropCo and the restricted subsidiary guarantors, including a pledge of the capital stock of the wholly-owned domestic subsidiaries held by VICI PropCo and the subsidiary guarantors and 65% of any capital stock of first-tier foreign subsidiaries held by VICI PropCo and the subsidiary guarantors, in each case subject to exceptions.

Under the senior secured credit facilities, VICI PropCo is required to meet specified leverage ratios in order to take certain actions, such as incurring certain debt. In addition, the senior secured credit facilities contain customary representations and warranties, events of default and affirmative and negative covenants.

The Term Loans are prepayable at VICI PropCo’s option, in whole or in part, at any time, and from time to time, at prices defined in the credit agreement, provided, however, that no “make-whole” or prepayment premium shall be payable in the event of any voluntary prepayment in cash of all Term Loans prior to the six-month anniversary of the issuance of such loans on the Emergence Date.

~~First Lien Notes~~

On the Emergence Date, VICI PropCo and its wholly-owned subsidiary, VICI FC Inc. (together, the “notes co-issuers”) entered into an indenture (the “First Lien Indenture”) with UMB Bank, National Association, as trustee, governing the $311.7 million in aggregate principal amount of First-Priority Senior Secured Floating Rate Notes due 2022 (the “First Lien Notes”) issued pursuant to the Plan. The First Lien Notes mature on October 15, 2022.

The notes co-issuers will pay interest quarterly on the First Lien Notes at a rate per annum, reset quarterly, equal to the sum of LIBOR (as defined in the First Lien Indenture), with a floor of 1.00%, and 3.50%.

The First Lien Notes are senior secured obligations and rank equally and ratably in right of payment with all existing and future senior obligations and senior to all future subordinated indebtedness. The First Lien Notes are guaranteed on a senior secured basis by the subsidiary guarantors that guarantee indebtedness under the senior secured credit facilities and are secured by a first-priority security interest, subject to permitted liens, in the collateral that also secures the senior secured credit facilities. Neither VICI REIT nor certain subsidiaries of VICI PropCo, including CPLV and its subsidiaries, are subject to the covenants of the indenture governing the First Lien Notes or are guarantors of the First Lien Notes.

The First Lien Indenture contains customary events of default and affirmative and negative covenants. Generally, if an event of default occurs, the trustee or the holders of at least 30% in principal amount of the then outstanding First Lien Notes may declare the principal of and accrued but unpaid interest on all of the First Lien Notes to be due and payable immediately.

The First Lien Notes are redeemable at VICI PropCo’s option, in whole or in part, at any time, or from time-to-time at prices defined in the indenture. No premium is payable upon redemption if all of the first lien notes are redeemed on or before April 15, 2018. In addition, prior to the first anniversary of such issuance, up to 35% of the original aggregate principal amount of the First Lien Notes may be redeemed at VICI PropCo’s option with the net cash proceeds of certain issuances of common or preferred equity by VICI PropCo or VICI REIT, at a price equal to 100% of the principal amount of the First Lien Notes redeemed plus a premium equal to the interest rate ~~per annum on the First Lien Notes in effect on the date on~~volatility, whether from variable rate debt or future forecasted transactions, which ~~notice of redemption is given plus accrued~~could unfavorably impact our future earnings and ~~unpaid interest to the redemption date; provided, however, that at least 50% of the original aggregate principal amount of the First Lien Notes must remain outstanding after any such redemption.~~

~~VICI PROPERTIES INC.~~

~~NOTES TO BALANCE SHEETS (Continued)~~

~~(UNAUDITED)~~

~~Second Lien Notes~~

On the Emergence Date, VICI PropCo and its wholly-owned subsidiary, VICI FC Inc entered into an indenture (the “Second Lien Indenture”) among the notes co-issuers, the subsidiary guarantors party thereto from time to time, and UMB Bank, National Association, as trustee, governing the $766.9 million in aggregate principal amount of 8.00% Second-Priority Senior Secured Notes due 2023 (the “Second Lien Notes”) issued pursuant to the Plan. The Second Lien Notes mature on October 15, 2023.

~~The notes co-issuers will pay interest semi-annually on the Second Lien Notes at a rate per annum of 8.00%.~~

The Second Lien Notes are senior secured obligations and rank equally and ratably in right of payment with all existing and future senior obligations and senior to all future subordinated indebtedness. The Second Lien Notes are guaranteed on a senior secured basis by the subsidiary guarantors that guarantee indebtedness under the senior secured credit facilities and the First Lien Notes and secured by a second-priority security interest, subject to permitted liens, in the same collateral that secures the senior secured credit facilities and the First Lien Notes. Neither VICI REIT nor certain subsidiaries of VICI PropCo, including CPLV and its subsidiaries, are subject to the covenants of the indenture governing the Second Lien Notesforecasted cash flows. We do not use derivative instruments for speculative or ~~will be guarantors of the Second Lien Notes.~~trading purposes.

The Second Lien Indenture contains customary events of default and affirmative and negative covenants. Generally, if an event of default occurs, the trustee or the holders of at least 30% in principal amount of the then outstanding Second Lien Notes may declare the principal of and accrued but unpaid interest on all of the Second Lien Notes to be due and payable immediately.

The Second Lien Notes are redeemable at VICI PropCo’s option, in whole or in part, at any time, or from time-to-time, at the prices defined in the indenture. In addition, prior to the third anniversary of such issuance, up to 35% of the original aggregate principal amount of the Second Lien Notes may be redeemed at VICI PropCo’s option with the net cash proceeds of certain issuances of common or preferred equity by VICI PropCo or VICI REIT, at a price equal to 108% of the principal amount of the Second Lien Notes redeemed plus accrued and unpaid interest to the redemption date; provided, however, that at least 50% of the original aggregate principal amount of the Second Lien Notes must remain outstanding after any such redemption.

~~CPLV Debt~~

On the Emergence Date, CPLV and its special-purpose parent entities entered into loan documents governing $2,200.0 million of debt borrowed from third parties, including (i) $1,550.0 million of asset level real estate mortgage financing from various third-party financial institutions (the “CPLV CMBS Debt”), and (ii) three tranches of mezzanine debt in the aggregate principal amount of $650.0 million (the “CPLV Mezzanine Debt,” and together, the “CPLV Debt”). The proceeds of the CPLV Debt were distributed to certain of CEOC’s creditors pursuant to the terms of the Plan.

~~CPLV CMBS Debt~~

The $1,550.0 million of CPLV CMBS Debt is secured by all of the assets of CPLV, including, but not limited to, CPLV’s (1) fee interest (except as provided in (2)) in and to CPLV, (2) leasehold interest with respect to Octavius Tower, and (3) interest in the CPLV Lease Agreement and all related agreements, including the Master Lease Agreements. The CPLV CMBS Debt is a first priority lien, subject only to permitted encumbrances and an obligation to repay a specified sum with interest. The CPLV CMBS Debt was evidenced by certain promissory notes and secured by a deed of trust that created a mortgage lien on the fee and/or leasehold interest of CPLV.

~~The CPLV CMBS Debt matures on October 10, 2022. Interest payments are due monthly on the CPLV CMBS Notes at a rate per annum of 4.36%.~~

The loan documents governing the CPLV CMBS Debt contain covenants limiting CPLV’s ability to, among other things: (i) incur additional debt; (ii) enter into certain transactions with its affiliates; (iii) consolidate, merge, sell or otherwise dispose of its assets; and (iv) allow transfers of its direct or indirect equity interests.

~~CPLV Mezzanine Debt~~

On the Emergence Date, three direct and indirect special-purpose parent entities of CPLV issued $650.0 million of CPLV Mezzanine Debt, which was placed by various third-party financial institutions. The CPLV Mezzanine Debt was issued in three tranches: senior, intermediate and junior, in an aggregate amount of $200.0 million, $200.0 million and $250.0 million, respectively. The

~~VICI PROPERTIES INC.~~

~~NOTES TO BALANCE SHEETS (Continued)~~

~~(UNAUDITED)~~

proceeds from such financing were distributed to certain CEOC creditors pursuant to the terms of the Plan. Each tranche of CPLV Mezzanine Debt was secured by each borrower’s equity interests in its direct wholly-owned subsidiary. The CPLV Mezzanine Debt is an obligation to repay the principal amount with interest, and is evidenced by one or more promissory notes and secured by, among other things, a pledge of equity interests or other similar security instrument that creates a lien on the equity interests held by the respective special purpose entity.

The loan documents governing the CPLV Mezzanine Debt contain covenants limiting each issuer’s ability to, among other things: (i) incur additional debt; (ii) enter into certain transactions with its affiliates; (iii) consolidate, merge, sell or otherwise dispose of its assets; and (iv) allow transfers of its direct or indirect equity interests.

Each of the three tranches has, or had, in the case of the junior tranche, a contractual maturity date of October 31, 2022. Interest payments are, or were, in the case of the junior tranche, due monthly on each tranche of the CPLV Mezzanine Debt at a rate per annum of 6.75% on the senior tranche, 7.45% on the intermediate tranche, and 8.07% on the junior tranche, respectively.

~~The junior tranche of $250.0 million was automatically exchanged for 17,630,700 shares of the Company’s common stock on November 6, 2017.~~

~~COMBINED STATEMENT OF INVESTMENTS OF REAL ESTATE ASSETS~~

~~TO BE CONTRIBUTED TO VICI PROPERTIES INC.~~

~~(AMOUNTS IN MILLIONS)~~

~~(UNAUDITED)~~

September 30, 2017 December 31, 2016
Assets
Property, net $ 4,831.0
$ 4,856.6
Total assets $ 4,831.0
$ 4,856.6

~~See accompanying Notes to Combined Statement of Investments of Real Estate Assets to be Contributed to VICI Properties Inc.~~

~~NOTES TO COMBINED STATEMENT OF INVESTMENTS OF REAL ESTATE ASSETS~~

~~TO BE CONTRIBUTED TO VICI PROPERTIES INC.~~

~~(UNAUDITED)~~

In these notes, the words “VICI REIT,” “Company,” “we,” “our,” and “us” refer to VICI Properties Inc., unless otherwise stated or the context requires otherwise. “VICI PropCo” refers to VICI Properties 1 LLC, a Delaware limited liability company, which through its subsidiaries own the real estate assets transferred by Caesars Entertainment Operating Company, Inc. (“CEOC”) to VICI REIT on the Emergence Date.

~~In addition, we refer to the Combined Statement of Investments of Real Estate Assets to be Contributed to VICI Properties Inc. as the “Combined Statement of Investments of Real Estate Assets.”~~

On October 6, 2017 (the “Emergence Date”), CEOC merged with and into CEOC LLC, a Delaware limited liability company (“New CEOC”), with New CEOC surviving the merger. See “Explanatory Note” in this Quarterly Report on Form 10-Q.

~~Note 1 — Business Formation and Basis of Presentation~~

~~Business Formation~~

VICI Properties Inc. was organized as a limited liability company in Delaware on July 5, 2016 and was subsequently converted to a corporation under the laws of the State of Maryland. VICI REIT intends to elect to be treated as a “real estate investment trust” (“REIT”) for Federal income tax purposes. As of September 30, 2017, VICI REIT had not conducted operations and had no assets or liabilities.

~~On the~~ ~~Emergence Date~~, CEOC emerged from bankruptcy and completed the restructuring as contemplated by the Plan in which subsidiaries of CEOC contributed certain real estate assets (the “Properties”) and the assets and operations comprising CEOC’s four golf course businesses (“Caesars Entertainment Outdoor”) to VICI REIT (the “Transactions”). VICI REIT is an owner, acquirer and developer of gaming, hospitality and entertainment destinations.

The accompanying Combined Statement of Investments of Real Estate Assets reflects financial information as of September 30, 2017 relating to the owned real estate gaming and related facilities that were transferred from CEOC to VICI REIT on the ~~Emergence Date~~.

~~Basis of Presentation~~

The accompanying Combined Statement of Investments of Real Estate Assets reflects the assets directly attributable to CEOC’s real estate holdings to be owned by VICI REIT, with the exception of Caesars Entertainment Outdoor. The Combined Statement of Investments of Real Estate Assets is combined on the basis of common control and is prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). Management believes the assumptions underlying the Combined Statement of Investments of Real Estate Assets are reasonable; however, the Combined Statement of Investments of Real Estate Assets may not necessarily reflect VICI REIT’s financial position in the future or what their financial position would have been had VICI REIT operated as a standalone company during the periods presented.

~~NOTES TO COMBINED STATEMENT OF INVESTMENTS OF REAL ESTATE ASSETS~~

~~TO BE CONTRIBUTED TO VICI PROPERTIES INC. (Continued)~~

~~(UNAUDITED)~~

~~The Properties~~



~~Bally’s Atlantic City~~		~~Harrah’s Reno~~
~~Bluegrass Downs~~		~~Harvey’s Lake Tahoe~~
~~Caesars Atlantic City~~		~~Horseshoe Bossier City~~
~~Caesars Palace Las Vegas~~		~~Horseshoe Council Bluffs~~
~~Harrah’s Gulf Coast~~		~~Horseshoe Hammond~~
~~Harrah’s Council Bluffs~~		~~Horseshoe Southern Indiana~~
~~Harrah’s Joliet~~⁽¹⁾		~~Horseshoe Tunica~~
~~Harrah’s Lake Tahoe~~		~~Louisiana Downs~~
~~Harrah’s Metropolis~~		~~Tunica Roadhouse~~
~~Harrah’s North Kansas City~~		~~Other property~~⁽²⁾

~~_____________~~


⁽¹⁾	~~Owned by Harrah’s Joliet LandCo LLC, a joint venture of which VICI PropCo is the 80% owner and the managing member.~~


⁽²⁾	~~Consists primarily of miscellaneous vacant land holdings.~~

~~Note 2 — Summary of Significant Accounting Policies~~

Estimates are required in order to prepare the financial statements in conformity with US GAAP. Significant estimates, judgments, and assumptions are required in a number of areas, including, but not limited to: the application of fresh start reporting; determining the useful lives of real estate properties; and evaluating the impairment of long-lived assets. The judgment on such estimates and underlying assumptions is based on our historical experience that we believe is reasonable under the circumstances. In many instances changes in the accounting estimates are likely to occur from period to period. Actual results may differ from the estimates.

~~Concentrations~~Basis of ~~Credit Risk~~Presentation

~~Following~~The accompanying Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information set forth in the ~~Emergence Date, all~~Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the applicable rules and regulations of the ~~real estate holdings~~Securities and Exchange Commission (“SEC”). The Financial Statements, including the notes thereto, are unaudited and condense or exclude some of the disclosures and information normally required in audited financial statements.

We believe the disclosures made are adequate to prevent the information presented from being misleading. However, the accompanying unaudited Financial Statements and related notes should be read in conjunction with VICI’s audited financial statements and notes thereto included in VICI’s most recent Annual Report on Form 10-K and VICI LP’s audited financial statements and notes thereto included as an exhibit to the Current Report on Form 8-K filed on April 18, 2022, as updated from time to time in our other filings with the SEC.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from these estimates.

Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Principles of Consolidation

The accompanying consolidated financial statements include our accounts and the accounts of VICI ~~REIT (other than those~~LP, and the subsidiaries in which we or VICI LP has a controlling interest. All intercompany account balances and transactions have been eliminated in consolidation. We consolidate all subsidiaries in which we have a controlling financial interest and VIEs for which we or one of ~~Caesars Entertainment Outdoor) are leased to New CEOC~~our consolidated subsidiaries is the primary beneficiary.

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Non-controlling Interests

We present non-controlling interests and ~~certain~~classify such interests as a component of ~~its subsidiaries,~~consolidated stockholders’ equity or partners’ capital, separate from VICI stockholders’ equity and ~~substantially all~~VICI LP partners’ capital. As of September 30, 2022, VICI’s non-controlling interests represent an approximate 1.3% third-party ownership of VICI ~~REIT’s revenues (other than those~~OP in the form of ~~Caesars Entertainment Outdoor) are derived~~VICI OP Units and a 20% third-party ownership of Harrah’s Joliet LandCo LLC, the entity that owns the Harrah’s Joliet facility and is the lessor under the related Joliet Lease. As VICI OP is a parent entity of VICI LP, VICI LP’s only non-controlling interest is that of third-party ownership of Harrah’s Joliet LandCo LLC.

Cash, Cash Equivalents and Restricted Cash

Cash consists of cash-on-hand and cash-in-bank. Any investments with an original maturity of three months or less from the ~~underlying leases. Other than VICI REIT having~~date of purchase are considered cash equivalents and are carried at cost, which approximates fair value. As of September 30, 2022 and December 31, 2021, we did not have any restricted cash.

Investments in Leases - Sales-type, Net

We account for our investments in leases under ASC 842 “Leases” (“ASC 842”). Upon lease inception or lease modification, we assess lease classification to determine whether the lease should be classified as a ~~single tenant from which it derives substantially all of its revenue, management does not believe there are any other significant concentrations of credit risk~~

~~Useful Lives of Real Estate Properties~~

~~Additions to~~direct financing, sales-type or operating lease. As required by ASC 842, we separately assess the land and ~~buildings are stated~~building components of the property to determine the classification of each component. If the lease component is determined to be a direct financing or sales-type lease, we record a net investment in the lease, which is equal to the sum of the lease receivable and the unguaranteed residual asset, discounted at ~~cost. We capitalize~~ the ~~costs~~rate implicit in the lease. Any difference between the fair value of ~~improvements that extend~~the asset and the net investment in the lease is considered selling profit or loss and is either recognized upon execution of the lease or deferred and recognized over the life of the ~~asset. We expense maintenance and repair costs as incurred. Gains or losses~~lease, depending on the ~~dispositions~~classification of ~~property~~the lease. Since we purchase properties and ~~equipment are recognized~~simultaneously enter into new leases directly with the tenants, the net investment in the ~~period~~lease is generally equal to the purchase price of ~~disposal.~~the asset, and, due to the long-term nature of our leases, the land and building components of an investment generally have the same lease classification.

~~Depreciation~~We have determined that the land and building components of all of the Caesars Leases (excluding the Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Atlantic City real estate asset components (the “Harrah’s Call Properties”) of the Caesars Regional Master Lease), Century Master Lease, Hard Rock Cincinnati Lease, PENN Entertainment Leases, Southern Indiana Lease, and Venetian Lease meet the definition of a sales-type lease under ASC 842.

Investments in Leases - Financing Receivables, Net

In accordance with ASC 842, for transactions in which we enter into a contract to acquire an asset and lease it back to the seller under a lease classified as a sales-type lease (i.e., a sale leaseback transaction), control of the asset is ~~calculated~~not considered to have transferred to us. As a result, we do not recognize the net investment in the lease but instead recognize a financial asset in accordance with ASC 310 “Receivables” (“ASC 310”); however, the accounting for the financing receivable under ASC 310 is materially consistent with the accounting for our investments in leases - sales-type under ASC 842.

We determined that the land and building components of the MGM Master Lease, JACK Cleveland/Thistledown Lease and the Harrah’s Call Properties asset components of the Caesars Regional Master Lease meet the definition of a sales-type lease and, since we purchased and leased the assets back to the sellers under sale leaseback transactions, control is not considered to have transferred to us under GAAP. Accordingly, the MGM Master Lease, JACK Cleveland/Thistledown Lease and the Harrah’s Call Properties component of the Caesars Regional Master Lease are accounted for as Investments in leases - financing receivables on our Balance Sheet, net of allowance for credit losses, in accordance with ASC 310.

Lease Term

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Investment in Unconsolidated Affiliate

We account for our investment in unconsolidated affiliate using the ~~straight-line~~equity method of accounting as we have the ability to exercise significant influence, but not control, over operating and financing policies of the ~~shorter~~investment. Our equity method investment represents our 50.1% ownership interest in the BREIT JV, which was acquired in the MGP Transactions and, as a result, was recorded at relative fair value. The difference in basis between our share of the carrying value of the BREIT JV and the relative fair value upon acquisition is amortized into Income from unconsolidated affiliate over the estimated useful life of the ~~asset~~respective underlying real estate assets, the remaining lease term of the BREIT JV Lease, or the remaining term of the assumed debt, as applicable.

We assess our investment in unconsolidated affiliate for recoverability and, if it is determined that a loss in value of the investment is other than temporary, we write down the investment to its fair value.

Income from Leases and Lease Financing Receivables

We recognize the related income from our sales-type leases and lease financing receivables on an effective interest basis at a constant rate of return over the terms of the applicable leases. As a result, the cash payments accounted for under sales-type leases and lease financing receivables will not equal income from our Lease Agreements. Rather, a portion of the cash rent we receive is recorded as ~~follows:~~Income from sales-type leases or Income from lease financing receivables and loans, as applicable, in our Statement of Operations and a portion is recorded as a change to Investments in leases - sales-type, net or Investments in leases - financing receivables, net, as applicable.



~~Land improvements~~	~~12 years~~
~~Buildings and improvements~~	~~5 to 40 years~~

~~Long-Lived Assets~~Investments in Loans, net

Allowance for Credit Losses

We have ~~significant capital invested in our long-lived assets, and judgments are made in determining their~~elected to use a discounted cash flow model to estimate the Allowance for credit losses, or CECL allowance. This model requires us to develop cash flows which project estimated ~~useful lives and salvage values and if or when an asset (or asset group) has been impaired. The accuracy of these estimates affects~~credit losses over the amount of depreciation and amortization expense recognized in our financial results and whether we have a gain or loss on the disposal of an asset. We assign lives to our assets based on our standard policy, which is established by management as representativelife of the ~~useful~~lease or loan and discount these cash flows at the asset’s effective interest rate. We then record a CECL allowance equal to the difference between the amortized cost basis of the asset and the present value of the expected credit loss cash flows.

We ~~monitor events~~have engaged a nationally recognized data analytics firm to assist us with estimating both the PD and ~~circumstances that could indicate that the carrying amount~~LGD of our ~~real estate investments may not be recoverable~~tenants and borrowers and their parent guarantors, as applicable. The PD and LGD are estimated during a reasonable and supportable period for which we believe we are able to estimate future economic conditions (the “R&S Period”) and a long-term period for which we revert to long-term historical averages (the “Long-Term Period”). The PD and LGD estimates for the R&S Period are developed using the current financial condition of the tenant or ~~realized. When events or changes in circumstances indicate that~~borrower and parent guarantor, as applicable, and applied to a ~~potential impairment has occurred or that~~projection of economic conditions over a two-year term. The PD and LGD for the Long-Term Period are estimated using the average historical default rates and historical loss rates, respectively, of public companies over

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO ~~COMBINED STATEMENT OF INVESTMENTS OF REAL ESTATE ASSETS~~

~~TO BE CONTRIBUTED TO VICI PROPERTIES INC.~~CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

~~carrying value of~~The CECL allowance is recorded as a ~~real estate investment may not be recoverable, we use an estimate of the undiscounted value of expected future operating cash flows~~reduction to ~~determine whether the real estate investment is impaired. If the undiscounted cash flows plus~~our net ~~proceeds expected from the disposition of the asset is less than the carrying value of the~~Investments in leases - sales-type, Investments in leases - financing receivables, Investments in loans and Sales-type sub-leases included in Other assets ~~we recognize an impairment charge equivalent to the amount~~on our Balance Sheet. We are required to ~~reduce~~update our CECL allowance on a quarterly basis with the ~~carrying value~~resulting change being recorded in the Statement of Operations for the asset to its estimated fair value. We group our real estate investments together by property, the lowest level for which identifiable cash flows are available, in evaluating impairment. In assessing the recoverability of the carrying value,relevant period. Finally, each time we make ~~assumptions regarding future cash flows and other factors. Factors considered~~a new investment in performing this assessment include current operating results, market and other applicable trends and residual values, as well as the effect of obsolescence, demand, competition and other factors. If these estimates or related assumptions change in the future,an asset subject to ASC 326, we ~~may be~~are required to record an ~~impairment loss. Changes~~initial CECL allowance for such asset, which will result in a non-cash charge to the Statement of Operations for the relevant period.

We are required to estimate a CECL allowance related to contractual commitments to extend credit, such as future funding commitments under a revolving credit facility, delayed draw term loan, construction loan or through commitments made to our tenants to fund the development and construction of improvements at our properties through the Partner Property Growth Fund. We estimate the amount that we will fund for each contractual commitment based on (i) discussions with our borrowers and tenants, (ii) our borrowers' and tenants’ business plans and financial condition and (iii) other relevant factors. Based on these ~~assumptions~~considerations, we apply a CECL allowance to the estimated amount of credit we expect to extend. The CECL allowance for unfunded commitments is calculated using the same methodology as the allowance for all of our other investments subject to the CECL model. The CECL allowance related to these future commitments is recorded as a component of Other liabilities on our Balance Sheet.

Refer to Note 5 - Allowance for Credit Losses for further information.

Other income and Other expenses

Other income primarily represents sub-lease income related to certain ground and use leases. Under the ~~analysis~~Lease Agreements, the tenants are required to pay all costs associated with such ground and use leases and provides for their direct payment to the landlord. This income and the ~~Combined~~related expense are recorded on a gross basis in our Statement of ~~Investments of Real Estate Assets.~~Operations as required under GAAP as we are the primary obligor under these certain ground and use leases.

Fair Value Measurements

~~Note 3 — Property~~

(In millions)
September 30, 2017 December 31, 2016
Land and improvements $ 2,505.5
$ 2,492.6
Buildings and improvements 3,646.5
3,571.7
Total property 6,152.0
6,064.3
Less: accumulated depreciation (1,321.0 ) (1,207.7 )
Total property, net $ 4,831.0
$ 4,856.6

~~Note 4 — Subsequent Events~~

~~As discussed in Note 1, CEOC emerged from bankruptcy on October 6, 2017 and in connection with~~We measure the ~~restructuring, contributed to VICI REIT land and buildings with a book~~fair value of ~~approximately $4.8 billion, net of accumulated depreciation.~~

~~Management estimates~~financial instruments based on assumptions that market participants would use in pricing the ~~properties transferred have~~asset or liability. As a basis for considering market participant assumptions in fair value measurements, a fair value ~~range~~hierarchy distinguishes between ~~$8.2 billion~~market participant assumptions based on market data obtained from sources independent of the reporting entity and ~~$8.4 billion~~the reporting entity’s own assumptions about market participant assumptions. In accordance with the fair value hierarchy, Level 1 assets/liabilities are valued based on quoted prices for identical instruments in active markets, Level 2 assets/liabilities are valued based on quoted prices in active markets for similar instruments, on quoted prices in less active or inactive markets or on other “observable” market inputs, and Level 3 assets/liabilities are valued based significantly on “unobservable” market inputs.

Refer to Note 9 - Fair Value for further information.

Derivative Financial Instruments

We record our derivative financial instruments as either Other assets or Other liabilities on our Balance Sheet at fair value.

The ~~Company completed~~accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows are considered cash flow hedges. We formally document our hedge relationships and designation at the contract’s inception. This documentation includes the identification of the hedging instruments and the hedged items, its ~~subsequent events review through November 13, 2017,~~risk management objectives, strategy for undertaking the ~~date on which~~hedge transaction and our evaluation of the ~~Financial Statements were available~~effectiveness of its hedged transaction.

On a quarterly basis, we also assess whether the derivative we designated in each hedging relationship is expected to be, ~~issued,~~ and ~~noted no further items requiring disclosure.~~has been, highly effective in offsetting changes in the value or cash flows of the hedged transactions. If it is determined that a

Table of Contents

~~CAESARS ENTERTAINMENT OUTDOOR~~

~~(DEBTOR-IN-POSSESSION)~~VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO ~~COMBINED CONDENSED~~CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Note 6 — Other Assets and Other Liabilities

Other Assets

The following table details the components of our other assets as of September 30, 2022 and December 31, 2021:


(In thousands)	September 30, 2022		December 31, 2021
Sales-type sub-leases, net (1)	$	762,066	$	273,970
Property and equipment used in operations, net	67,302		68,515
Right of use assets and sub-lease right of use assets	46,611		16,811
Debt financing costs	19,715		24,928
Deferred acquisition costs	12,197		24,690

Tenant receivables	9,187		5,032
Prepaid expenses	5,903		3,660
Interest receivable	4,843		2,780
Other receivables	3,066		341
Forward-starting interest rate swaps	—		884
Other	1,191		3,082
Total other assets	$	932,081	$	424,693

(1) As of September 30, 2022 and December 31, 2021, sales-type sub-leases are net of $22.0 million and $6.5 million of Allowance for credit losses, respectively. Refer to Note 5 - Allowance for Credit Losses for further details.

Property and equipment used in operations, included within other assets, is primarily attributable to the land, building and improvements of our golf operations and consists of the following as of September 30, 2022 and December 31, 2021:


(In thousands)	September 30, 2022		December 31, 2021
Land and land improvements	$	60,080	$	59,250
Buildings and improvements	15,065		14,880
Furniture and equipment	9,158		9,014
Total property and equipment used in operations	84,303		83,144
Less: accumulated depreciation	(17,001)		(14,629)
Total property and equipment used in operations, net	$	67,302	$	68,515


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Depreciation expense	$	816	$	771	$	2,371	$	2,320

Other Liabilities

The following table details the components of our other liabilities as of September 30, 2022 and December 31, 2021:


(In thousands)	September 30, 2022		December 31, 2021
Finance sub-lease liabilities	$	784,112	$	280,510
Deferred financing liabilities	73,600		73,600
Lease liabilities and sub-lease liabilities	46,689		16,811
CECL allowance for unfunded commitments	23,525		1,037
Deferred income taxes	4,194		3,879

Total other liabilities	$	932,120	$	375,837

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Note 7— Debt

The following tables detail our debt obligations as of September 30, 2022 and December 31, 2021:


($ In thousands)	September 30, 2022
Description of Debt	Maturity	Interest Rate	Face Value		Carrying Value(1)
Revolving Credit Facility (2)	2026	SOFR + 1.050%	$	—	$	—
Delayed Draw Term Loan (2)	2025	SOFR + 1.200%	—		—
November 2019 Notes(3)
2026 Maturity	2026	4.250%	1,250,000		1,238,112
2029 Maturity	2029	4.625%	1,000,000		988,531
February 2020 Notes(3)
2025 Maturity	2025	3.500%	750,000		744,434
2027 Maturity	2027	3.750%	750,000		742,667
2030 Maturity	2030	4.125%	1,000,000		988,253
April 2022 Notes(3)
2025 Maturity	2025	4.375%	500,000		495,927
2028 Maturity	2028	4.516% (4)	1,250,000		1,236,455
2030 Maturity	2030	4.541% (4)	1,000,000		987,186
2032 Maturity	2032	3.980% (4)	1,500,000		1,480,290
2052 Maturity	2052	5.625%	750,000		735,237
Exchange Notes(3)
2024 Maturity	2024	5.625%	1,024,169		1,030,177
2025 Maturity	2025	4.625%	799,368		782,077
2026 Maturity	2026	4.500%	480,524		461,848
2027 Maturity	2027	5.750%	729,466		739,056
2028 Maturity	2028	4.500%	349,325		335,923
2029 Maturity	2029	3.875%	727,114		657,902
MGP OP Notes(3)
2024 Maturity	2024	5.625%	25,831		25,915
2025 Maturity	2025	4.625%	632		613
2026 Maturity	2026	4.500%	19,476		18,480
2027 Maturity	2027	5.750%	20,534		20,519
2028 Maturity	2028	4.500%	675		637
2029 Maturity	2029	3.875%	22,886		20,264
Total Debt		4.496% (5)	$	13,950,000	$	13,730,503

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)


($ In thousands)	December 31, 2021
Description of Debt	Maturity	Interest Rate	Face Value		Carrying Value(1)
Secured Revolving Credit Facility (6)	2024	L + 2.00%	$	—	$	—
November 2019 Notes(3)
2026 Maturity	2026	4.250%	1,250,000		1,235,972
2029 Maturity	2029	4.625%	1,000,000		987,331
February 2020 Notes(3)
2025 Maturity	2025	3.500%	750,000		742,677
2027 Maturity	2027	3.750%	750,000		741,409
2030 Maturity	2030	4.125%	1,000,000		987,134
Total Debt		4.105%	$	4,750,000	$	4,694,523

____________________

(1)Carrying value is net of unamortized original issue discount and unamortized debt issuance costs incurred in conjunction with debt.

(2)Interest on any outstanding balance is payable monthly. Borrowings under the Revolving Credit Facility and Delayed Draw Term Loan bear interest at a rate based on a credit rating-based pricing grid with a range of 0.775% to 1.325% margin plus SOFR and a range of 0.85% to 1.60% margin plus SOFR, respectively, depending on our credit ratings, with an additional 0.10% adjustment. Additionally, the commitment fees under the Revolving Credit Facility and Delayed Draw Term Loan are calculated on a credit rating-based pricing grid with a range of 0.15% to 0.375%, for both instruments depending on our credit ratings. For the three and nine months ended September 30, 2022, the commitment fees for both the Revolving Credit Facility and Delayed Draw Term Loan were 0.375%.

(3)Interest is payable semi-annually.

(4)Interest rates represent the contractual interest rates adjusted to account for the impact of the forward-starting interest rate swaps and treasury locks (as further described in Note 8 - Derivatives). The contractual interest rates on the April 2022 Notes maturing 2028, 2030 and 2032 are 4.750%, 4.950% and 5.125%, respectively.

(5)The interest rate represents the weighted average interest rates of the Senior Unsecured Notes adjusted to account for the impact of the forward-starting interest rate swaps and treasury locks (as further described in Note 8 - Derivatives), as applicable. The contractual weighted average interest rate as of September 30, 2022, which excludes the impact of the forward-starting interest rate swaps and treasury locks, is 4.67%

(6)On February 8, 2022, we terminated the Secured Revolving Credit Facility (including the first priority lien on substantially all of VICI PropCo’s and its existing and subsequently acquired wholly owned material domestic restricted subsidiaries’ material assets) and the Existing Credit Agreement, and entered into the Credit Agreement providing for the Credit Facilities, as described below.

The following table is a schedule of future minimum principal payments of our debt obligations as of September 30, 2022:


(In thousands)	Future Minimum Principal Payments
2022 (remaining)	$	—
2023	—
2024	1,050,000
2025	2,050,000
2026	1,750,000
2027	1,500,000
Thereafter	7,600,000
Total minimum principal payments	$	13,950,000

Senior Unsecured Notes

Exchange Notes

On April 29, 2022, the VICI Issuers issued $1,024.2 million in aggregate principal amount of 5.625% Senior Notes due 2024, $799.4 million in aggregate principal amount of 4.625% Senior Notes due 2025, $480.5 million in aggregate principal amount of 4.500% Senior Notes due 2026, $729.5 million in aggregate principal amount of 5.750% Senior Notes due 2027, $349.3 million in aggregate principal amount of 4.500% Senior Notes due 2028 and $727.1 million in aggregate principal amount of 3.875% Senior Notes due 2029 in exchange for the validly tendered and not validly withdrawn MGP OP Notes, originally issued by the MGP Issuers, pursuant to the settlement of the Exchange Offers and Consent Solicitations in connection

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

with the closing of the MGP Transactions. The Exchange Notes were issued with the same interest rate, maturity date and redemption terms as the corresponding series of MGP OP Notes, in each case under a supplemental indenture dated as of April 29, 2022, between the VICI Issuers and UMB Bank, National Association, as trustee (the “Trustee”).

The Exchange Notes due 2025, 2026, 2027, 2028, and 2029 are redeemable at our option, in whole or in part, at any time on or after February 1, 2024, March 15, 2025, June 1, 2026, November 1, 2026, October 15, 2027 and November 15, 2028, respectively, at the redemption prices set forth in the respective indenture governing such Exchange Notes. We may redeem some or all of such notes prior to such respective dates at a price equal to 100% of the principal amount thereof plus a “make-whole” premium.

MGP OP Notes

Following the issuance of the Exchange Notes pursuant to the settlement of the Exchange Offers and Consent Solicitations, $25.8 million in aggregate principal amount of MGP OP Notes due 2024, $0.6 million in aggregate principal amount of MGP OP Notes due 2025, $19.5 million in aggregate principal amount of MGP OP Notes due 2026, $20.5 million in aggregate principal amount of MGP OP Notes due 2027, $0.7 million in aggregate principal amount of MGP OP Notes due 2028 and $22.9 million in aggregate principal amount of MGP OP Notes due 2029 remain outstanding.

Each series of the MGP OP Notes is redeemable at our option, in whole or in part, at any time on or after the same dates as set forth above with respect to the corresponding maturity series of the Exchange Notes. We may redeem some or all of such notes prior to such respective dates at a price equal to 100% of the principal amount thereof plus a “make-whole” premium.

April 2022 Notes

On April 29, 2022, VICI LP, our wholly owned subsidiary, issued (i) $500.0 million in aggregate principal amount of 4.375% Senior Notes due 2025, which mature on May 15, 2025, (ii) $1,250.0 million in aggregate principal amount of 4.750% Senior Notes due 2028, which mature on February 15, 2028, (iii) $1,000.0 million in aggregate principal amount of 4.950% Senior Notes due 2030, which mature on February 15, 2030, (iv) $1,500.0 million in aggregate principal amount of 5.125% Senior Notes due 2032, which mature on May 15, 2032, and (v) $750.0 million in aggregate principal amount of 5.625% Senior Notes due 2052, which mature on May 15, 2052, (collectively, the “April 2022 Notes”) in each case under a supplemental indenture dated as of April 29, 2022, between VICI LP and the Trustee. We used the net proceeds of the offering to (i) fund the consideration for the redemption of a majority of the VICI OP Units received by MGM in the Partnership Merger for $4,404.0 million in cash in connection with the closing of the MGP Transactions on April 29, 2022, and (ii) pay down the outstanding $600.0 million balance on our Revolving Credit Facility.

Prior to their maturity date, in the case of the April 2022 Notes due 2025, and January 15, 2028 (one month prior to the maturity date of the April 2022 Notes due 2028), December 15, 2029 (two months prior to the maturity date of the April 2022 Notes due 2030), February 15, 2032 (three months prior to the maturity date of the April 2022 Notes due 2032) and November 15, 2051 (six months prior to the maturity date of the April 2022 Notes due 2052), respectively, in the case of the April 2022 Notes due 2028, 2030, 2032 and 2052, we may redeem the April 2022 Notes at our option, in whole or in part, at any time and from time to time, at a price equal to 100% of the principal amount thereof plus a “make-whole” premium. On or after January 15, 2028, December 15, 2029, February 15, 2032 and November 15, 2051, respectively, we may redeem the April 2022 Notes due 2028, 2030, 2032 and 2052 at a redemption price equal to 100% of the principal amount of such Notes to be redeemed, plus accrued and unpaid interest thereon to the redemption date.

February 2020 Notes

On February 5, 2020, the VICI Issuers issued (i) $750.0 million in aggregate principal amount of 3.500% Senior Notes due 2025, which mature on February 15, 2025, (ii) $750.0 million in aggregate principal amount of 3.750% Senior Notes due 2027, which mature on February 15, 2027, and (iii) $1,000.0 million in aggregate principal amount of 4.125% Senior Notes due 2030, which mature on August 15, 2030 (collectively, the “February 2020 Notes”), under separate indentures, each dated as of February 5, 2020, among the VICI Issuers, the subsidiary guarantors party thereto and the Trustee.

The February 2020 Notes due 2025, 2027 and 2030 are redeemable at our option, in whole or in part, at any time on or after February 15, 2022, February 15, 2023, and February 15, 2025, respectively, at the redemption prices set forth in the respective indenture. We may redeem some or all of the February 2020 Notes due 2025, 2027 and 2030 prior to such respective dates at a price equal to 100% of the principal amount thereof plus a “make-whole” premium. Prior to February 15, 2022, with respect to the February 2020 Notes due 2025, and February 15, 2023, with respect to the February 2020 Notes due 2027 and 2030, we

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

may redeem up to 40% of the aggregate principal amount of the February 2020 Notes due 2025, 2027 and 2030 using the proceeds of certain equity offerings at the redemption price set forth in the respective indenture.

November 2019 Notes

On November 26, 2019, the VICI Issuers issued (i) $1,250.0 million in aggregate principal amount of 4.250% Senior Notes due 2026, which mature on December 1, 2026, and (ii) $1,000.0 million in aggregate principal amount of 4.625% Senior Notes due 2029, which mature on December 1, 2029 (collectively, the “November 2019 Notes”), under separate indentures, each dated as of November 26, 2019, among the VICI Issuers, the subsidiary guarantors party thereto and the Trustee.

The November 2019 Notes due 2026 and 2029 are redeemable at our option, in whole or in part, at any time on or after December 1, 2022 and December 1, 2024, respectively, at the redemption prices set forth in the respective indenture. We may redeem some or all of the November 2019 Notes due 2026 or 2029 prior to such respective dates at a price equal to 100% of the principal amount thereof plus a “make-whole” premium. Prior to December 1, 2022, we may redeem up to 40% of the aggregate principal amount of the November 2019 Notes due 2026 or 2029 using the proceeds of certain equity offerings at the redemption price set forth in the respective indenture.

Guarantee and Financial Covenants

None of the Senior Unsecured Notes are guaranteed by any subsidiaries of VICI LP. The Exchange Notes, the MGP OP Notes and the April 2022 Notes benefit from a pledge of the limited partnership interests of VICI LP directly owned by VICI OP (the “Limited Equity Pledge”). The Limited Equity Pledge has also been granted in favor of (i) the administrative agent and the lenders under the Credit Agreement and (ii) the trustee under the indentures governing, and the holders of, the November 2019 Notes and the February 2020 Notes.

Until February 8, 2022, the November 2019 Notes and February 2020 Notes were fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each guaranteed indebtedness under the Existing Credit Agreement. All subsidiary guarantees were released upon the termination of the Existing Credit Agreement concurrently with the execution of the Credit Agreement on February 8, 2022.

VICI LP and its subsidiaries represent our “Real Property Business” segment, with the “Golf Course Business” segment corresponding to the portion of our business operated through entities that are not direct or indirect subsidiaries of VICI LP or obligors of the November 2019 Notes, February 2020 Notes and Exchange Notes. Refer to Note 14 - Segment Information for more information about our segments.

Pursuant to the terms of the respective indentures, in the event that the November 2019 Notes, February 2020 Notes and Exchange Notes (i) are rated investment grade by at least two of S&P, Moody’s and Fitch and (ii) no default or event of default has occurred and is continuing under the respective indentures, VICI LP and its restricted subsidiaries will no longer be subject to certain of the restrictive covenants under such indentures. On April 18, 2022, the November 2019 Notes, February 2020 Notes and Exchange Notes were rated investment grade by each of S&P and Fitch and VICI LP notified the Trustee of such Suspension Date (as defined in the indentures). Accordingly, VICI LP and its restricted subsidiaries are no longer subject to certain of the restrictive covenants under such indentures, but are subject to a maintenance covenant requiring VICI LP and its restricted subsidiaries to maintain a certain total unencumbered assets to unsecured debt ratio. In the event that the November 2019 Notes, February 2020 Notes and Exchange Notes are no longer rated investment grade by at least two of S&P, Moody’s and Fitch, then VICI LP and its restricted subsidiaries will again be subject to all of the covenants of the respective indentures, as applicable, but will no longer be subject to the maintenance covenant.

The indenture governing the April 2022 Notes contains certain covenants that limit the ability of VICI LP and its subsidiaries to incur secured and unsecured indebtedness and VICI LP to consummate a merger, consolidation or sale of all or substantially all of its assets. In addition, VICI LP is required to maintain total unencumbered assets of at least 150% of total unsecured indebtedness. These covenants are subject to a number of important exceptions and qualifications.

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Unsecured Credit Facilities

On February 8, 2022, VICI LP entered into the Credit Agreement providing for (i) the Revolving Credit Facility in the amount of $2.5 billion scheduled to mature on March 31, 2026 and (ii) the Delayed Draw Term Loan in the amount of $1.0 billion scheduled to mature on March 31, 2025. The Delayed Draw Term Loan is available to be drawn up to 12 months following the effective date of February 8, 2022. The Revolving Credit Facility includes two six-month maturity extension options and the Delayed Draw Term Loan includes two 12-month extension options, in each case, the exercise of which is subject to customary conditions and the payment of an extension fee of 0.0625% on the extended commitments, in the case of each six-month extension of the Revolving Credit Facility, and 0.125% on the extended term loans, in the case of each twelve-month extension of the Delayed Draw Term Loan. The Credit Facilities include the option to increase the revolving loan commitments by up to $1.0 billion and increase the delayed draw term loan commitments or add one or more new tranches of term loans by up to $1.0 billion in the aggregate, in each case, to the extent that any one or more lenders (from the syndicate or otherwise) agree to provide such additional credit extensions. On July 15, 2022, the Credit Agreement was amended pursuant to a First Amendment among VICI LP and the lenders party to the Credit Agreement, in order to permit borrowings under the Revolving Credit Facility in certain foreign currencies in an aggregate principal amount of up to the equivalent of $1.25 billion.

Borrowings under the Credit Facilities will bear interest, at VICI LP’s option, (i) with respect to the Revolving Credit Facility, at a rate based on SOFR (including a credit spread adjustment) plus a margin ranging from 0.775% to 1.325% or a base rate plus a margin ranging from 0.00% to 0.325%, in each case, with the actual margin determined according to VICI LP’s debt ratings, and (ii) with respect to the Delayed Draw Term Loan, at a rate based on SOFR (including a credit spread adjustment) plus a margin ranging from 0.85% to 1.60% or a base rate plus a margin ranging from 0.00% to 0.60%, in each case, with the actual margin determined according to VICI LP’s debt ratings. The base rate is the highest of (i) the prime rate of interest last quoted by the Wall Street Journal in the U.S. then in effect, (ii) the NYFRB rate from time to time plus 0.5% and (iii) the SOFR rate for a one-month interest period plus 1.0%, subject in each case to a floor of 1.0%. In addition, the Revolving Credit Facility requires the payment of a facility fee ranging from 0.15% to 0.375% (depending on VICI LP’s debt rating) of total revolving commitments.

Pursuant to the terms of the Credit Agreement, VICI LP is subject to, among other things, customary covenants and the maintenance of various financial covenants. The Credit Agreement is consistent with certain tax-related requirements related to security for the Company’s debt.

On February 18, 2022, we drew on the Revolving Credit Facility in the amount of $600.0 million to fund a portion of the purchase price of the Venetian Acquisition. On April 29, 2022, we repaid the outstanding balance of the Revolving Credit Facility using the proceeds from the April 2022 Notes offering.

Senior Secured Credit Facilities

In December 2017, VICI PropCo entered into a credit agreement (as amended, amended and restated and otherwise modified, the “2017 Credit Agreement”), comprised of a $2.2 billion Term Loan B Facility and a $1.0 billion Secured Revolving Credit Facility (the Term Loan B Facility and the Secured Revolving Credit Facility, as amended, are referred to together as the “Senior Secured Credit Facilities”). On September 15, 2021, we used the proceeds from the settlement of the June 2020 Forward Sale Agreement (as defined in Note 11- Stockholders’ Equity) and the proceeds from the issuance of 65,000,000 shares of common stock from the September 2021 equity offering to repay in full the Term Loan B Facility, including outstanding accrued interest. In connection with the full repayment, we recognized a loss on extinguishment of debt of $15.6 million during the three and nine months ended September 30, 2021, representing the write-off of the remaining unamortized deferred financing costs.

Following the repayment in full of the Term Loan B Facility, the Secured Revolving Credit Facility remained in effect pursuant to the 2017 Credit Agreement. On February 8, 2022, we terminated the Secured Revolving Credit Facility (including the first priority lien on substantially all of VICI PropCo’s material assets and those of its existing and subsequently acquired wholly owned material domestic restricted subsidiaries) and the 2017 Credit Agreement, and entered into the Credit Agreement providing for the Credit Facilities, as described above.

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Bridge Facilities

MGP Transactions Bridge Facility

On August 4, 2021, in connection with the completion of the MGP Transactions, VICI PropCo entered into a Commitment Letter with certain lenders pursuant to which they provided commitments in an amount up to $9.3 billion in the aggregate, consisting of a 364-day first lien secured bridge facility (the “MGP Transactions Bridge Facility”), for the purpose of providing a portion of the financing necessary in connection with the closing of the MGP Transactions, which was fully terminated on April 29, 2022 in connection with such closing.

The MGP Transactions Bridge Facility was subject to a tiered commitment fee based on the period the commitment is outstanding and a structuring fee. For the nine months ended September 30, 2022 and 2021, we recognized $15.3 million and $27.0 million, respectively, of fees related to the MGP Transactions Bridge Facility in Interest expense on our Statement of Operations. For the three months ended September 30, 2021, we recognized $27.0 million of fees related to the MGP Transaction Bridge Facility in Interest expense on our Statement of Operations. As the MGP Transactions Bridge Facility was terminated in April 2022, no such expense was recorded for the three months ended September 30, 2022.

Venetian Acquisition Bridge Facility

On March 2, 2021, in connection with the Venetian Acquisition, VICI PropCo entered into a Commitment Letter with certain lenders pursuant to which they provided commitments in an amount up to $4.0 billion in the aggregate, consisting of a 364-day first lien secured bridge facility (the “Venetian Acquisition Bridge Facility”), for the purpose of providing a portion of the financing necessary to fund the consideration in connection with the closing of the Venetian Acquisition, which was fully terminated on February 23, 2022 in connection with such closing.

The Venetian Acquisition Bridge Facility was subject to a tiered commitment fee based on the period the commitment is outstanding and a structuring fee. For the nine months ended September 30, 2022 and 2021, we recognized $1.0 million and $10.9 million, respectively, of fees related to the Venetian Acquisition Bridge Facility in Interest expense on our Statement of Operations. For the three months ended September 30, 2021, we recognized $3.0 million of fees related to the Venetian Acquisition Bridge Facility in Interest expense on our Statement of Operations. As the Venetian Acquisition Bridge Facility was terminated in February 2022, no such expense was recorded for the three months ended September 30, 2022.

Financial Covenants

As described above, our debt obligations are subject to certain customary financial and protective covenants that restrict VICI LP, VICI PropCo and its subsidiaries’ ability to incur additional debt, sell certain asset and restrict certain payments, among other things. These covenants are subject to a number of exceptions and qualifications, including the ability to make restricted payments to maintain our REIT status. At September 30, 2022, we are in compliance with all financial covenants under our debt obligations.

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Note 8 — ~~Litigation, Contractual~~Derivatives

The following table details our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of December 31, 2021. As of September 30, 2022, there were no derivative instruments outstanding.

($ In thousands)

December 31, 2021

Instrument

Number of Instruments

Fixed Rate

Notional

Index

Maturity

Forward-starting interest rate swap

1.3465%

500,000

USD SOFR- COMPOUND

May 2, 2032

Forward-Starting Derivatives

From December 2021 through April 2022, we entered into five forward-starting interest rate swap agreements with an aggregate notional amount of $2.5 billion and two U.S. Treasury Rate Lock agreements with an aggregate notional amount of $500.0 million to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of $3.0 billion of long-term debt. The forward-starting interest rate swaps and treasury locks were designated as cash-flow hedges. In April 2022 in connection with the April 2022 Notes offering, we settled the outstanding forward-starting interest rate swaps for total net proceeds of $202.3 million and the treasury locks for total net proceeds of $4.5 million. Since the forward-starting swaps and treasury locks were hedging the interest rate risk on the April 2022 Notes, the unrealized gain in Accumulated other comprehensive income will be amortized over the term of the respective derivative instruments, which matches that of the underlying note, as a reduction in interest expense.

The following table presents the effect of our forward-starting derivative financial instruments on our Statement of Operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Unrealized gain recorded in other comprehensive income	$	—	$	—	$	200,550	$	—
Reduction in interest expense related to the amortization of the forward-starting interest rate swaps and treasury locks	(6,037)		—		(10,196)		—

Interest Rate Swaps

In April 2018 and January 2019, we entered into six interest rate swap agreements with third party financial institutions having an aggregate notional amount of $2.0 billion. The interest rate swap transactions were designated as cash flow hedges that effectively fix the LIBOR component of the interest rate on a portion of the outstanding debt under the Term Loan B Facility at 2.8297%. On September 15, 2021, in connection with the full repayment of the Term Loan B Facility, we unwound and settled all of our outstanding interest rate swap agreements resulting in a cash payment of $66.9 million, inclusive of accrued interest of $2.7 million. As the Term Loan B Facility was repaid in full with proceeds from the issuance of 65,000,000 shares of common stock on September 14, 2021 and proceeds from the settlement of the June 2020 Forward Sale Agreement with no replacement debt, the full amount held in Other comprehensive income, $64.2 million, was immediately reclassified to Interest expense.

The following table presents the effect of our interest rate swaps derivative financial instruments on our Statement of Operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Unrealized gain recorded in other comprehensive income	$	—	$	6,576	$	—	$	28,282
Interest from interest rate swaps recorded in interest expense	—		8,792		—		29,960
Interest rate swap settlement recorded in interest expense	—		64,239		—		64,329

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Note 9 — Fair Value

The following table summarizes our assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021:


	September 30, 2022
(In thousands)			Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:
Short-term investments (1)	$	207,722	$	—	$	207,722	$	—


	December 31, 2021
(In thousands)			Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:

Derivative instruments - forward-starting interest rate swap (2)	$	884	$	—	$	884	$	—

___________________

(1) The carrying value of these investments is equal to their fair value due to the short-term nature of the investments as well as their credit quality.

(2) The fair values of our interest rate swap derivative instruments were estimated using advice from a third-party derivative specialist, based on contractual cash flows and observable inputs comprising interest rate curves and credit spreads, which are Level 2 measurements as defined under ASC 820.

The estimated fair values of our financial instruments as of September 30, 2022 and December 31, 2021 for which fair value is only disclosed are as follows:


	September 30, 2022				December 31, 2021
(In thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Investments in leases - financing receivables (1)	$	16,441,616	$	17,457,867	$	2,644,824	$	3,104,337
Investments in loans (2)	579,805		585,779		498,002		498,614
Cash and cash equivalents	518,383		518,383		739,614		739,614

Financial liabilities:
Debt
Revolving Credit Facility	—		—		—		—
Delayed Draw Term Loan	—		—		—		—
Senior Unsecured Notes (3)	13,730,503		12,567,443		4,694,523		4,955,000

____________________

(1)These investments represent the JACK Cleveland/Thistledown Lease, the Harrah’s Call Properties and the MGM Master Lease. The fair value of these assets are based on significant “unobservable” market inputs and, as such, these fair value measurements are considered Level 3 of the fair value hierarchy.

(2)We believe the current principal balance of these investments approximates their fair value.

(3)The fair value of our debt instruments was estimated using quoted prices for identical or similar liabilities in markets that are not active and, as such, these fair value measurements are considered Level 2 of the fair value hierarchy.

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Note 10 — Commitments and Contingent Liabilities

Litigation

~~The Business and its operations~~In the ordinary course of business, from time to time, we may be subject to legal claims and administrative proceedings. As of September 30, 2022, we are not subject to any litigation ~~involving employment matters, personal injuries, and other matters~~ that ~~arise~~we believe could have, individually or in the ~~normal course of business. We do not expect the outcome of such ordinary and routine litigation to have~~aggregate, a material adverse effect on our ~~combined~~business, financial ~~position,~~condition or results of operations, liquidity or cash flows.

~~Contingent Liabilities~~

In January 2015, a majority of the Trustees of the National Retirement Fund (“NRF”), a multi-employer defined benefit pension plan, voted to expel CEC and certain of its affiliates from the plan. The NRF has advised CEC and Caesars Entertainment Resort Properties, LLC (“CERP”) that this expulsion triggered a withdrawal liability with a present value of approximately $360 million, payable in 80 quarterly payments of about $6 million. The NRF filed a similar claim against each Caesars Debtor in CEOC’s bankruptcy. Although the Business’ employees did not participate in this plan, because the entities that own the Business are a member of the Caesars Group (as defined below), such entities are jointly and severally liable with CEC and CEOC for any liability under the NRF’s claims.

On March 13, 2017, CEOC, CEC, CERP, the Caesars employers that contribute to the NRF, and the NRF and certain of its related parties entered into a settlement agreement resolving all issues related to the disputes with the NRF. Under the terms of the settlement, CEC, or a person on CEC’s behalf, was required to pay a total of $45 million to the NRF on the ~~Emergence Date~~.

~~Under the Caesars Debtors’ Plan, the NRF is barred from asserting any claims against the Company and its subsidiaries to the extent such claims arose prior to the Emergence Date.~~

Operating Lease Commitments

~~The Business is~~We are liable under various operating leases ~~for~~for: (i) land at the Cascata golf course, ~~equipment~~which expires in 2038 and ~~other miscellaneous assets,~~has three 10-year extension options and (ii) certain corporate offices, the most material of which ~~expire at various dates through 2039.~~ is our corporate headquarters in New York, NY, which expires in 2030 and has one five-year renewal option. The discount rates for the leases were determined based on the yield of our then current secured borrowings, adjusted to match borrowings of similar terms, and are between 5.3% and 5.5%. The weighted average remaining lease term as of September 30, 2022 under our operating leases was 13.8 years.

Total rental expense, included in golf operations and general and administrative expenses in our Statement of Operations and contractual rent expense under these agreements ~~included in direct golf operating expenses and property costs in our Statements of Operations~~ were ~~approximately $219,000 and $222,000 for the three months ended September 30, 2017 and 2016, respectively, and $645,000 and $766,000 for the nine months ended September 30, 2017 and 2016, respectively.~~as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Rent expense	$	503	$	503	$	1,504	$	1,507
Contractual rent	475		470		1,424		1,410

The future minimum lease commitments relating to the base lease rent portion of noncancelable operating leases at September 30, ~~2017~~2022 are as follows:


(In thousands)	Lease Commitments
2022 (remaining)	$	523
2023	1,937
2024	1,847
2025	1,908
2026	1,958
2027	1,979
Thereafter	15,137
Total minimum lease commitments	$	25,291
Discounting factor	8,964
Lease liability	$	16,327

Sub-Lease Commitments

Certain of our acquisitions necessitate that we assume, as the lessee, ground and use leases that are integral to the operations of the property, the cost of which is passed to our tenants through the Lease Agreements, which require the tenants to pay all costs associated with such ground and use leases and provide for their direct payment to the landlord.

We have determined we are the primary obligor of certain of such ground and use leases and, accordingly, have presented these leases on a gross basis on our Balance Sheet and Statement of Operations. The following is a summary of the leases, the lease classification of which has been determined to be either an operating sub-lease or finance sub-lease.

Operating Sub-Lease Commitments

With respect to the following information, we assessed the lease classification of certain of the sub-leases to our tenants through the Lease Agreements, and our obligation as primary obligor of the leases and determined that they meet the definition of an operating lease. Accordingly, we have recorded sub-lease right-of-use assets in Other assets and sub-lease liabilities in Other liabilities.

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Operating Leases (In thousands)
Remaining 2017 $ 211
2018 873
2019 891
2020 908
2021 926
2022 and thereafter 20,234
Total minimum rental commitments $ 24,043


(In thousands)	September 30, 2022		December 31, 2021
Others assets (operating sub-leases)	$	30,362	$	—
Other liabilities (operating sub-lease liabilities)	30,362		—

Total rental income and rental expense, included in Other ~~Commitments~~

~~The Business utilizes a third-party golf maintenance company for its Rio Secco~~income and ~~Cascata golf courses. The agreements are for five years~~Other expenses, respectively, in our Statement of Operations and ~~expire in February 2019 and include all labor and equipment necessary to maintain both golf course grounds. Total expenses~~contractual rent expense under these agreements were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Rental income and expense	$	1,712	$	—	$	3,995	$	—
Contractual rent	1,602		—		3,720		—

The future minimum lease commitments relating to the sub-leases at September 30, 2022 are as follows:


(In thousands)	Lease Commitments
2022 (remaining)	$	1,619
2023	6,585
2024	6,553
2025	5,129
2026	3,934
2027	4,010
Thereafter	5,128
Total minimum lease commitments	$	32,957
Discounting factor	2,595
Sub-lease liabilities	$	30,362

The discount rate for the operating sub-leases were determined based on the yield of our secured borrowings at the time of assumption of the leases, adjusted to match borrowings of similar terms, and are between 2.6% and 2.9%. The weighted average remaining lease term as of September 30, 2022 under our operating sub-lease was 7.2 years.

Finance Sub-Lease Commitments

With respect to the following information, we assessed the lease classification of certain of the sub-leases to our tenants through the Lease Agreements, and our obligation as primary obligor of the ground and use leases and determined that they meet the definition of a sales-type lease and finance lease. Accordingly, we have recorded a sales-type sub-lease in Other assets and finance sub-lease liability in Other liabilities.

The following table details the balance and location in our Balance Sheet of the ground and use sub-leases as of September 30, 2022 and December 31, 2021:


(In thousands)	September 30, 2022		December 31, 2021
Others assets (sales-type sub-leases, net)	$	762,066	$	273,970
Other liabilities (finance sub-lease liabilities)	784,112		280,510

Total rental income and rental expense, included in ~~direct golf operating~~Other income and Other expenses, respectively, in our Statement of Operations and contractual rent expense under these agreements were as follows:

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Rental income and expense	$	14,466	$	5,604	$	33,392	$	16,905
Contractual rent	18,925		8,838		37,910		20,513

The future minimum lease commitments relating to the ground and use sub-leases at September 30, 2022 are as follows:


(In thousands)	Lease Commitments
2022 (remaining)	$	14,281
2023	58,769
2024	59,039
2025	59,174
2026	59,174
2027	59,174
Thereafter	2,555,535
Total minimum lease commitments	$	2,865,145
Discounting factor	2,081,033
Finance sub-lease liability	$	784,112

The discount rates for the finance ground and use sub-leases were determined based on the yield of our secured borrowings at the time of assumption of the leases, adjusted to match borrowings of similar terms, and are between 6% and 8%. The weighted average remaining lease term as of September 30, 2022 under our finance sub-leases was 55.0 years.

Note 11 — Stockholders' Equity

Stock

Authorized

As of September 30, 2022, we have the authority to issue 1,400,000,000 shares of stock, consisting of 1,350,000,000 shares of common stock, $0.01 par value per share, and 50,000,000 shares of preferred stock, $0.01 par value per share.

Primary Follow-on Offerings

September 2021 Offering

On September 14, 2021, we completed a primary follow-on offering of 115,000,000 shares of common stock consisting of (i) 65,000,000 shares of common stock (including 15,000,000 shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional common stock) and (ii) 50,000,000 shares of common stock that were subject to forward sale agreements (collectively, the “September 2021 Forward Sale Agreements”), which required settlement by September 9, 2022, in each case at a public offering price of $29.50 per share for an aggregate offering value of $3.4 billion, resulting in net proceeds, after deduction of the underwriting discount and expenses, of $1,859.0 million from the sale of the 65,000,000 shares (including 15,000,000 shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional common stock). We did not initially receive any proceeds from the sale of the 50,000,000 shares subject to the September 2021 Forward Sale Agreements, which were sold to the underwriters by the forward purchasers or their respective affiliates and remained subject to settlement in accordance with the terms of the September 2021 Forward Sale Agreements.

On February 18, 2022, we settled the September 2021 Forward Sale Agreements by delivering 50,000,000 shares of our common stock to the forward purchases, in exchange for total net proceeds of approximately $1,390.6 million, which were used to pay for a portion of the purchase price of the Venetian Acquisition. The physical settlement of the September 2021 Forward Sale Agreements were calculated based on the initial forward sale price per share of $28.62, as adjusted for a floating interest rate factor and other fixed amounts based on the passage of time, as specified in the ~~Statements~~September 2021 Forward Sale Agreements, resulting in a net forward sale price on the settlement date of ~~Operations~~$27.81 per share.

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

March 2021 Offering

On March 4, 2021, we completed a primary follow-on offering of 69,000,000 shares of common stock (inclusive of 9,000,000 shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional common stock) at a public offering price of $29.00 per share for an aggregate offering value of $2,001.0 million, all of which were subject to forward sale agreements (the “March 2021 Forward Sale Agreements”), which required settlement by March 4, 2022. We did not initially receive any proceeds from the sale of the shares of common stock in the offering, which were sold to the underwriters by the forward purchasers or their respective affiliates.

On February 18, 2022, we settled the March 2021 Forward Sale Agreements by delivering 69,000,000 shares of our common stock to the forward purchases, in exchange for total net proceeds of approximately ~~$600,000~~$1,828.6 million, which were used to pay for a portion of the purchase price of the Venetian Acquisition. The physical settlement of the March 2021 Forward Sale Agreements were calculated based on the initial forward sale price per share of $28.06, as adjusted for a floating interest rate factor and ~~$589,000~~other fixed amounts based on the passage of time, as specified in the March 2021 Forward Sale Agreements, resulting in a net forward sale price on the settlement date of $26.50 per share.

June 2020 Offering

On June 17, 2020, we completed a primary follow-on offering of 29,900,000 shares of common stock (inclusive of 3,900,000 shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional common stock) at a public offering price of $22.15 per share for an aggregate offering value of $662.3 million, all of which were subject to a forward sale agreement (the “June 2020 Forward Sale Agreement”), which initially required settlement by September 17, 2020. On September 16, 2020, we amended the June 2020 Forward Sale Agreement to extend the maturity date from September 17, 2020 to June 17, 2021. We did not initially receive any proceeds from the sale of the shares of common stock in the offering, which were sold to the underwriters by the forward purchaser or its affiliates.

On September 28, 2020, we partially settled the June 2020 Forward Sale Agreement by delivering 3,000,000 shares of our common stock to the forward purchaser, in exchange for total net proceeds of approximately $63.0 million, which was calculated based on the net forward sale price on the settlement date of $21.04 per share. On September 9, 2021, we physically settled the remaining shares under the June 2020 Forward Sale Agreement by delivering 26,900,000 shares of our common stock to the forward purchaser in exchange for total net proceeds of approximately $526.9 million, which was calculated based on the net forward sale price on the settlement date of $19.59 per share. The physical settlements of the June 2020 Forward Sale Agreement were calculated based on the initial forward sale price per share of $21.37, as adjusted for a floating interest rate factor and other fixed amounts based on the passage of time, as specified in the June 2020 Forward Sale Agreement.

At-the-Market Offering Program

In May 2021, we entered into an equity distribution agreement (the “ATM Agreement”), subsequently amended in November 2021, pursuant to which we may sell, from time to time, up to an aggregate sales price of $1,000.0 million of our common stock (the “ATM Program”). Sales of common stock, if any, made pursuant to the ATM Program may be sold in negotiated transactions or transactions that are deemed to be “at the market” offerings, as defined in Rule 415 of the Securities Act. The ATM Program also provides that the Company may sell shares of its common stock under the ATM Program through forward sale contracts. Actual sales under the ATM Program will depend on a variety of factors including market conditions, the trading price of our common stock, our capital needs, and our determination of the appropriate sources of funding to meet such needs.

During the three months ended September 30, ~~2017~~2022, we sold a total of 3,918,807 shares under the ATM Program at a weighted average price per share of $34.73 for an aggregate value of $136.08 million, all of which were sold subject to a forward sale agreement (the “August 2022 ATM Forward Sale Agreement”). After fees and ~~2016,~~other adjustments calculated in accordance with the forward sale agreement, the aggregate net value of $134.8 million yielded a net initial forward sales price per share of $34.40.

During the three months ended June 30, 2022, we sold a total of 11,380,980 shares under the ATM Program at a weighted average price per share of $32.28 for an aggregate value of $367.4 million, all of which were sold subject to a forward sale agreement (the “June 2022 ATM Forward Sale Agreement” and together with the August 2022 ATM Forward Sale Agreement the “ATM Forward Sale Agreements”). After fees and other adjustments calculated in accordance with the forward sale agreement, the aggregate net value of $360.0 million yielded a net initial forward sales price per share of $31.64.

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

During the three months ended March 31, 2022 and the three and nine months ended September 30, 2021, we did not sell any shares under the ATM Program. We have no obligation to sell the remaining shares available for sale under the ATM Program.

We did not receive any proceeds from the sale of shares at the time we entered into the ATM Forward Sale Agreements. We determined that the ATM Forward Sale Agreements meet the criteria for equity classification and, therefore, are exempt from derivative accounting. We recorded the ATM Forward Sale Agreements at fair value at inception, which we determined to be zero. Subsequent changes to fair value are not required under equity classification. We expect to settle the shares under the ATM Forward Sale Agreements prior to the expiration of their respective terms entirely by the physical delivery of shares of our common stock in exchange for cash proceeds, although we may elect cash settlement or net share settlement for all or a portion of our obligations under the ATM Forward Sale Agreements.

As of September 30, 2022, the net forward sales price per share under the August 2022 ATM Forward Sale Agreement and June 2022 ATM Forward Sale Agreement were $34.08 and $31.36, respectively, and ~~$2,149,000~~would result in us receiving approximately $133.5 million and ~~$2,110,000 for~~$356.9 million, respectively, in net cash proceeds if we were to physically settle the shares under the ATM Forward Sale Agreements. Alternatively, if we were to cash settle the shares under the August 2022 ATM Forward Sale Agreement and the June 2022 ATM Forward Sale Agreement, it would result in a cash inflow of $3.4 million and $17.2 million, respectively, or, if we were to net share settle the shares under the August 2022 ATM Forward Sale Agreement and the June 2022 ATM Forward Sale Agreement, it would result in us receiving approximately 0.1 million and 0.6 million shares, respectively.

The following table details the issuance of outstanding shares of common stock, including restricted common stock:


	Nine Months Ended September 30,
Common Stock Outstanding	2022	2021
Beginning Balance January 1,	628,942,092	536,669,722
Issuance of common stock in primary follow-on offerings	—	65,000,000
Issuance of common stock upon physical settlement of forward sale agreements (1)	119,000,000	26,900,000

Issuance of common stock in connection with the REIT Mergers	214,552,532	—
Issuance of restricted and unrestricted common stock under the stock incentive program, net of forfeitures	598,800	375,165
Ending Balance September 30,	963,093,424	628,944,887

___________________

(1) Excludes the 15,299,787 shares subject to the ATM Forward Sale Agreements as such shares are not yet settled.

Dividends

Dividends declared (on a per share basis) during the nine months ended September 30, ~~2017~~2022 and ~~2016, respectively.~~2021 were as follows:

Nine Months Ended September 30, 2022

Declaration Date

Record Date

Payment Date

Period

Dividend

March 10, 2022

March 24, 2022

April 7, 2022

January 1, 2022 - March 31, 2022

0.3600

June 9, 2022

June 23, 2022

July 7, 2022

April 1, 2022 - June 30, 2022

0.3600

September 8, 2022

September 22, 2022

October 6, 2022

July 1, 2022 - September 30, 2022

0.3900

Nine Months Ended September 30, 2021

Declaration Date

Record Date

Payment Date

Period

Dividend

March 11, 2021

March 25, 2021

April 8, 2021

January 1, 2021 - March 31, 2021

0.3300

June 10, 2021

June 24, 2021

July 8, 2021

April 1, 2021 - June 30, 2021

0.3300

August 4, 2021

September 24, 2021

October 7, 2021

July 1, 2021 - September 30, 2021

0.3600

~~Complying with REIT requirements may cause us~~Table of Contents

Capital Markets Risks

We are exposed to ~~liquidate or forgo otherwise attractive opportunities.~~

To qualify as a REIT, we must ensure that, at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and “real estate assets” (as defined in the Code), including certain mortgage loans and securities. The remainder of our investments (other than government securities, qualified real estate assets and securities issued by a taxable REIT subsidiary) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our total assets (other than government securities, qualified real estate assets and securities issued by a taxable REIT subsidiary) can consist of the securities of any one issuer, and no more than 25% of the value of our total assets can be represented by securities of one or more taxable REIT subsidiaries. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate or forgo otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders. In additionrisks related to the ~~asset tests set forth above, to qualify as a REIT we must continually satisfy tests concerning, among other things, the sources of~~equity capital markets, and our income, the amounts we distribute to our stockholders and the ownership of our stock. We may be unable to pursue investments that would be otherwise advantageous to us in order to satisfy the source-of-income or asset-diversification requirements for qualifying as a REIT. Thus, compliance with the REIT requirements may hinder ourrelated ability to ~~make certain attractive investments.~~

~~If our Operating Partnership failed to qualify as a partnership or a disregarded entity for U.S. Federal income tax purposes, we would cease to qualify as a REIT and suffer other adverse consequences.~~

We believe that our Operating Partnership will be treated as a partnership or a disregarded entity for U.S. Federal income tax purposes. As a partnership or a disregarded entity, our Operating Partnership is not subject to Federal income tax on its income. Instead, each of its partners, including us, is allocated, and may be required to pay tax with respect to, its share of our Operating Partnership’s income. As ofraise capital through the Emergence Date, our Operating Partnership was treated as a disregarded entity for U.S. Federal income tax purposes and all of its income will be allocated to us. We cannot assure you, however, that the IRS will not challenge the status of our Operating Partnership or any other subsidiary partnership in which we own an interest as a partnership for Federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating our Operating Partnership or any such other subsidiary partnership as an entity taxable as a corporation for U.S. Federal income tax purposes, it is likely that we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we would likely cease to qualify as a REIT. Also, the failure of our Operating Partnership or any subsidiary partnerships to qualify as a partnership or a disregarded entity could cause it to become subject to Federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.

~~We may be subject to built-in gains tax on the disposition of certain of our properties.~~

If we acquire certain properties in tax-deferred transactions, which properties were held by one or more C corporations before they were held by us, we may be subject to a built-in gain tax on future disposition of such properties. This is the case with respect to all or substantially all of the properties acquired from CEOC pursuant to the Restructuring. If we dispose of any such properties during the five-year period following acquisition of the properties from the respective C corporation (i.e., during the five-year period following ownership of such properties by a REIT), we will be subject to U.S. Federal income tax (and applicable state and local taxes) at the highest corporate tax rates on any gain recognized from the disposition of such properties to the extent of the excess of the fair market value of the properties on the date that they were contributed to or acquired by us in a tax-deferred transaction over the adjusted tax basis of such properties on such date, which are referred to as built-in gains. Similarly, if we recognize certain other income considered to be built-in income during the five-year period following the property acquisitions described above, we could be subject to U.S. Federal tax under the built-in gains tax rules. We would be subject to this corporate-level tax liability (without the benefit of the deduction for dividends paid) even if we qualify and maintain our status as a REIT. Any recognized built-in gain will retain its character as ordinary income or capital gain and will be taken into account in determining REIT taxable income and the REIT distribution requirements. Any tax on the recognized built-in gain will reduce REIT taxable income. We may choose to forego otherwise attractive opportunities to sell assets in a taxable transaction during the five-year built-in gain recognition period in order to avoid this built-in gain tax. However, there can be no assurance that such a taxable transaction will not occur. The amount of any such built-in gain tax could be material and the resulting tax liability could have a negative effect on our cash flow and limit our ability to pay distributions required to maintain our status as a REIT.

~~Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.~~

The REIT provisions of the Code substantially limit our ability to hedge our assets and liabilities. Income from certain hedging transactions that we may enter into to manage risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets or from transactions to manage risk of currency fluctuations with respect to any item of income or gain that satisfy the REIT gross income tests (including gain from the termination of such a transaction) does not constitute “gross income” for purposes of the 75% or 95% gross income tests that apply to REITs, provided that certain identification requirements are met. To the extent that we enter into other types of hedging transactions or fail to properly identify such transaction as a hedge, the income is likely to be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may be required to limit our use of advantageous hedging techniques or implement those hedges through a taxable REIT subsidiary. This could increase the cost of our hedging activities because the taxable REIT subsidiary may be subject to tax on gains or expose us to greater risks associated with changes in interest rates that we would otherwise want to bear. In addition, losses in the taxable REIT subsidiary will generally not provide any tax benefit, except that such losses could theoretically be carried back or forward against past or future taxable income in the taxable REIT subsidiary.

~~We may pay a purging distribution, if any, in common stock and cash.~~

In order to qualify as a REIT, we must distribute any “earnings and profits,” as defined in the Code, that are allocated from CEOC to us in connection with the spin-off transaction by the end of the first taxable year in which we elect REIT status (the “purging distribution”). Based on analysis of CEOC’s earnings and profits, we currently do not believe that any earnings and profits were allocated to us in connection with the spin-off and therefore do not currently expect to be required to make a purging distribution. If notwithstanding this expectation we are required to make a purging distribution, we may pay a purging distribution to our shareholders in a combination of cash and shares of our common stock. Each of our shareholders will be permitted to elect to receive the shareholder’s entire entitlement under the purging distribution in either cash or shares of our common stock, subject to a cash limitation. If our shareholders elect to receive an amount of cash in excess of the cash limitation, each such electing shareholder will receive a pro rata amount of cash corresponding to the shareholder’s respective entitlement under the purging distribution declaration. The IRS issued a private letter ruling with respect to certain issues relevant to the separation from CEOC providing generally that, subject to the terms and conditions contained therein, the amount of any shares of our common stock received by any of our shareholders as part of a purging distribution, if any, will be considered to equal the amount of cash that could have been received instead. Although we may generally rely upon the ruling, no assurance can be given that the IRS will not challenge our qualification as a REIT on the basis of other issues or facts outside the scope of the ruling. In a purging distribution, if any, a shareholder of our common stock will be required to report dividend income equal to the amount of cash and common stock received as a result of the purging distribution even though we may distribute no cash or only nominal amounts of cash to such shareholder.

~~Risks Related to Our Organizational Structure~~

~~Our rights and the rights of our stockholders to take action against our directors and officers are limited.~~

The Maryland General Corporation Law (“MGCL”) provides that a director has no liability in any action based on an act of the director if he or she has acted in good faith, in a manner he or she reasonably believes to be in the corporation’s best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. As permitted by the MGCL, our charter limits the liability of our directors and officers to our company and our stockholders for money damages, except for liability resulting from:


▪	~~actual receipt of an improper benefit or profit in money, property or services; or~~


▪	a final judgment based upon a finding that his or her action or failure to act was the result of active and deliberate dishonesty by the director or officer and was material to the cause of action adjudicated.

Our charter and our amended and restated bylaws (our “bylaws”) also obligate us to indemnify our directors and officers for actions taken by them in those capacities and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding to the maximum extent permitted by Maryland law. In addition, we have entered into indemnification agreements with our directors and executive officers that provide for indemnification and advance expenses to the maximum extent permitted by Maryland law. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist under common law.

~~Our board of directors may change our major corporate, investment and financing policies without stockholder approval and those changes may adversely affect our business.~~

Our board of directors will determine and may alter or eliminate our major corporate policies, including our acquisition, investment, financing, growth, operations and distribution policies. While our stockholders have the power to elect or remove directors, our stockholders have limited direct control over changes in our policies and those changes could adversely affect our business, financial condition, results of operations, the market price of our common stock and our ability to make distributions to our stockholders.

~~The ability of our board of directors to revoke our REIT qualification, with stockholder approval, may cause adverse consequences to our stockholders.~~

Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, only with the affirmative vote of stockholders entitled to cast a majority of all votes entitled to be cast on the matter, if the board determines that it is no longer in our best interests to continue to qualify as a REIT. If we cease to be a REIT, we would become subject to Federal income tax on our taxable income and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on the total return to our stockholders.

~~Our charter and bylaws contain provisions that may delay, defer or prevent an acquisition~~issuance of our common stock or other equity instruments. We are also exposed to risks related to the debt capital markets, and our related ability to finance our business through long-term indebtedness, borrowings under credit facilities or other debt instruments. As a ~~change~~REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing, and terms of capital we raise.

Item 4. Controls and Procedures

VICI Properties Inc.

Evaluation of Disclosure Controls and Procedures

VICI maintains disclosure controls and procedures (as defined in ~~control.~~Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) designed to provide reasonable assurance that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods, and is accumulated and communicated to VICI’s management, including VICI’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

~~Our charter~~VICI’s management has evaluated, under the supervision and ~~bylaws contain provisions,~~with the ~~exercise~~participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e) as of the end of the period covered by this report. Based upon this evaluation, VICI’s principal executive officer and principal financial officer concluded that VICI’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There have been no changes in VICI’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended September 30, 2022, that have materially affected, or ~~existence~~are reasonably likely to materially affect, VICI’s internal control over financial reporting.

VICI Properties L.P.

Evaluation of ~~which could delay, defer~~Disclosure Controls and Procedures

VICI LP maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) designed to provide reasonable assurance that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods, and is accumulated and communicated to our management, including VICI LP’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

VICI LP’s management has evaluated, under the supervision and with the participation of VICI LP’s principal executive officer and principal financial officer, the effectiveness of VIC LP’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e) as of the end of the period covered by this report. Based upon this evaluation, VICI LP’s principal executive officer and principal financial officer concluded that VICI LP’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There have been no changes in VICI LP’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended September 30, 2022, that have materially affected, or ~~prevent a transaction or a change~~are reasonably likely to materially affect, VICI LP’s internal control over financial reporting.

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information contained under the heading “Litigation” in ~~control~~Note 10 - Commitments and Contingent Liabilities to our Financial Statements included in this report is incorporated by reference into this Item 1.

Item 1A. Risk Factors

A description of certain factors that ~~might involve a premium price~~may affect our future results and risk factors is set forth in our Annual Report on Form 10-K for ~~our stockholders or otherwise be in their best interests, including~~ the ~~following:~~year ended December 31, 2021. There have been no material changes to those factors for the nine months ended September 30, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

(b) Use of Proceeds from Registered Securities

Not applicable.

VICI Properties Inc.

During the three months ended September 30, 2022, VICI did not repurchase any equity securities registered pursuant to Section 12 of the Exchange Act.

VICI Properties L.P.

During the three months ended September 30, 2022, VICI LP did not repurchase any equity securities registered pursuant to Section 12 of the Exchange Act.

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

None.

Table of Contents

Item 6.Exhibits

▪

~~Our charter contains restrictions~~

Incorporated by Reference

Exhibit
Number

Exhibit Description

Filed Herewith

Form

Exhibit

Filing Date

10.1

Eleventh Amendment to Regional Lease, dated as of August 25 , 202 2 , by and among the entities listed on ~~the ownership~~Schedules A and ~~transfer of our stock.~~B thereto

In order for us to qualify as a REIT, no more than 50% of the value of outstanding shares of our stock may be owned, beneficially or constructively, by five or fewer individuals (or certain other persons) at any time during the last half of each taxable year. Subject to certain exceptions, our charter prohibits any stockholder from owning beneficially or constructively, with respect to any class or series of our capital stock, more than 9.8% (in value or by number of shares, whichever is more restrictive) of the aggregate of the outstanding shares of such class or series of our capital stock.

The constructive ownership rules under the Code are complex and may cause the outstanding stock owned by a group of related individuals or entities to be deemed to be constructively owned by one individual or entity. As a result, the acquisition of 9.8% or less of the outstanding shares of a class or series of our stock by an individual or entity could cause that individual or entity or another individual or entity to own constructively in excess of the relevant ownership limits.

Among other restrictions on ownership and transfer of shares, our charter also prohibits any person from owning shares of our stock that would result in our being “closely held” under Section 856(h) of the Code or otherwise cause us to fail to qualify as a REIT. Any attempt to own or transfer shares of our common stock or of any of our other capital stock in violation of these restrictions may result in the shares being automatically transferred to a charitable trust or may be void.

Our charter provides that our board may grant exceptions to the 9.8% ownership limit, subject in each case to certain initial and ongoing conditions designed to protect our status as a REIT. These ownership limits may prevent a third-party from acquiring control of us if our board of directors does not grant an exemption to the ownership limits, even if our stockholders believe the change in control is in their best interests.

▪

~~Our board of directors has the power to cause us to issue and authorize additional shares of our stock without stockholder approval.~~

Our charter authorizes us to issue authorized but unissued shares of common or preferred stock in addition to the shares of common stock issued and outstanding as of the date of this Quarterly Report on Form 10-Q. In addition, our board of directors may, without stockholder approval, amend our charter to increase the aggregate number of our shares of stock or the number of shares of stock of any class or series that we have authority to issue and classify or reclassify any unissued shares of common or preferred stock and set the preferences, rights and other terms of the classified or reclassified shares. As a result, our board of directors may establish a class or series of shares of common or preferred stock that could delay or prevent a transaction or a change in control that might involve a premium price for our shares of common stock or otherwise be in the best interests of our stockholders.

~~Certain provisions of Maryland law may limit the ability of a third-party to acquire control of us.~~

Certain provisions of the MGCL may have the effect of inhibiting a third-party from acquiring us or of impeding a change of control under circumstances that otherwise could provide our common stockholders with the opportunity to realize a premium over the then-prevailing market price of such shares, including:

▪

31.1

~~“business combination” provisions that, subject~~

VICI Properties Inc. Certification of Principal Executive Officer Pursuant to ~~limitations, (a) prohibit certain business combinations between an “interested stockholder” (defined generally as any person who beneficially owns 10% or more~~Section 302 of the ~~voting power~~Sarbanes-Oxley Act of our outstanding shares of voting stock or an affiliate or associate of ours who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of our then outstanding shares of our common stock) or an affiliate of any interested stockholder and us for five years after the most recent date on which the stockholder becomes an interested stockholder, and (b) thereafter impose two super- majority stockholder voting requirements on these combinations; and2002.

▪

“control share” provisions that provide that holders of “control shares” of our company (defined as voting shares of stock that, if aggregated with all other shares of stock owned or controlled by the acquirer (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights with respect to “control shares” except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all of the votes entitled to be cast on the matter, excluding all votes entitled to be cast by the acquirer of control shares, and by any of our officers and employees who are also our directors.

Our charter provides that, notwithstanding any other provision of our charter or our bylaws, the Maryland Business Combination Act (Title 3, Subtitle 6 of the MGCL) does not apply to any business combination between us and any interested stockholder of ours and that we expressly elect not to be governed by the provisions of Section 3-602 of the MGCL in whole or in part. Any amendment to such provision of our charter must be approved by the affirmative vote of stockholders entitled to cast a majority of all votes entitled to be cast on the matter. Pursuant to the MGCL, our bylaws provide that the Maryland Business Combination Act does not apply to any business combination between us and any interested stockholder and contains a provision exempting from the Maryland Control Share Acquisition Act any and all acquisitions by any person of shares of our stock. There can be no assurance that this exemption contained in our bylaws will not be amended or eliminated at any time in the future.

Additionally, Title 3, Subtitle 8 of the MGCL permits our board of directors, without stockholder approval and regardless of what is provided in our charter or bylaws, to implement certain takeover defenses, such as a classified board. However, our charter provides that we are prohibited from electing to be subject to any or all of the provisions of Title 3, Subtitle 8 of the MGCL unless such election is first approved by the affirmative vote of stockholders of not less than a majority of all shares of ours then outstanding and entitled to be cast on the matter.

~~A small number of our stockholders could significantly influence our business and affairs.~~

As of the Emergence Date, a few stockholders owned substantial amounts of our outstanding voting stock. Large holders may be able to affect matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combination transactions.

~~Risks Related to Our Common Stock~~

The cash available for distribution to stockholders may not be sufficient to pay dividends at expected levels, nor can we assure you of our ability to make distributions in the future. We may use borrowed funds to make distributions.

If cash available for distribution is less than the amount necessary to make cash distributions, our inability to make the expected distributions could result in a decrease in the market price of our common stock. All distributions will be made at the discretion of our board of directors and will depend on our earnings, our financial condition, maintenance of our REIT qualification and other factors as our board of directors may deem relevant from time to time. We may not be able to make distributions in the future. In addition, some of our distributions may include a return of capital. To the extent that we decide to make distributions in excess of our current and accumulated earnings and profits in the future, such distributions would generally be considered a return of capital for Federal income tax purposes to the extent of the holder’s adjusted tax basis in their shares.

A return of capital is not taxable, but it has the effect of reducing the holder’s adjusted tax basis in our common stock. To the extent that such distributions exceed the adjusted tax basis of a holder’s shares, they will be treated as gain from the sale or exchange of such stock. If we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been.

~~VICI REIT is a holding company with no direct operations and will rely on distributions received from the Operating Partnership to make distributions to its stockholders.~~

VICI REIT is a holding company and conducts its operations through subsidiaries, including the Operating Partnership and the TRS. VICI REIT does not have, apart from the common and preferred units that it owns in the Operating Partnership, any independent operations. As a result, VICI REIT relies on distributions from its Operating Partnership to make any distributions to its stockholders it might declare on its common stock and to meet any of its obligations, including tax liability on taxable income allocated to it from the Operating Partnership (which might not be able to make distributions to VICI REIT equal to the tax on such allocated taxable income). In turn, the ability of subsidiaries of the Operating Partnership to make distributions to the Operating Partnership, and therefore, the ability of the Operating Partnership to make distributions to VICI REIT, depends on the operating results of these subsidiaries and the Operating Partnership and on the terms of any financing arrangements they have entered into. In addition, because VICI REIT is a holding company, claims of common stockholders of VICI REIT are structurally subordinated to all existing and future liabilities and other obligations (whether or not for borrowed money) and any preferred equity of the Operating Partnership and its subsidiaries. Therefore, in the event of our bankruptcy, liquidation or reorganization, VICI REIT’s assets and those of the Operating Partnership and its subsidiaries will be available to satisfy the claims of VICI REIT common stockholders only after all of VICI REIT’s, the Operating Partnership’s and its subsidiaries’ liabilities and other obligations and any preferred equity of any of them have been paid in full.

The Operating Partnership may, in connection with its acquisition of additional properties or otherwise, issue additional common units or preferred units to third parties. Such issuances would reduce VICI REIT’s ownership in the Operating Partnership. Because stockholders of VICI REIT do not directly own common units or preferred units of the Operating Partnership, they do not have any voting rights with respect to any such issuances or other partnership level activities of the Operating Partnership.

Conflicts of interest could arise between the interests of our stockholders and the interests of holders of Operating Partnership units which may impede business decisions that could benefit our stockholders.

Conflicts of interest could arise as a result of the relationships between us, on the one hand, and our Operating Partnership or any limited partner thereof, if any, on the other. Our directors and officers have duties to us under applicable Maryland law. At the same time, we, as general partner of our Operating Partnership, have fiduciary duties and obligations to our Operating Partnership and its limited partners under Delaware law and the partnership agreement of our Operating Partnership in connection with the management of our Operating Partnership. Our duties as general partner to our Operating Partnership and its limited partners may come into conflict with the duties of our directors and officers to VICI REIT. These conflicts may be resolved in a manner that is not in the best interests of our stockholders.

~~Transfer of our common stock may be limited in the absence of an active trading market for our shares.~~

~~Our common stock has~~ ~~been~~ ~~thinly traded and is currently quoted on the OTC Markets, which provide significantly less liquidity than a national securities exchange such as the NYSE or the NASDAQ.~~ There is no guarantee that we will be able to list our shares on a national securities exchange. We cannot predict the extent to which a trading market will develop or how liquid that market might become. An active trading market may not develop or, if developed, may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the market price of your shares.

~~The market price of our common stock could be adversely affected by market conditions and by our actual and expected future earnings and level of cash dividends.~~

Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could reduce the market price of shares without regard to our operating performance. For example, the trading prices of equity securities issued by REITs have historically been affected by changes in market interest rates. One of the factors that may influence the market price of our common stock is the annual yield from distributions on our common stock as compared to yields on other financial instruments. An increase in market interest rates, or a decrease in our distributions to stockholders, may lead prospective purchasers of shares of our common stock to demand a higher distribution rate or seek alternative investments. As a result, if interest rates rise, it is likely that the market price of our common stock will decrease as market rates on interest-bearing securities increase. In addition, our operating results could be below the expectations of investors, and in response the market price of our shares could decrease significantly. The market value of the equity securities of a REIT is also based upon the market’s perception of the REIT’s growth potential and its current and potential future cash distributions, whether from operations, sales or refinancings, and is secondarily based upon the real estate market value of the underlying assets. For that reason, our common stock may trade at prices that are higher or lower than our net asset value per share. To the extent we retain operating cash flow for investment purposes, working capital reserves or other purposes, these retained funds, while increasing the value of our underlying assets, may not correspondingly increase the market price of our common stock. Our failure to meet the market’s expectations with regard to future earnings and cash distributions likely would adversely affect the market price of our common stock and, in such instances, you may be unable to resell your shares at a price you find reasonable.

~~Item 2.~~

31.2

~~Unregistered Sales~~

VICI Properties Inc. Certification of ~~Equity Securities and Use~~Principal Financial Officer Pursuant to Section 302 of ~~Proceeds~~the Sarbanes-Oxley Act of 2002.

~~None.~~

~~Item 3.~~

~~Defaults Upon Senior Securities~~

~~None.~~

~~Item 4.~~

31.3

~~Mine Safety Disclosures~~

~~Not applicable.~~

VICI Properties L.P. Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~Item 5.~~

~~Other Information~~

~~None.~~

~~Item 6.~~

31.4

~~Exhibits~~

VICI Properties L.P. Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

VICI Properties Inc. Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

VICI Properties Inc. Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.3

VICI Properties L.P. Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.4

VICI Properties L.P. Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Incorporated by Reference
Exhibit
Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date
2.1
Separation Agreement, dated as of October 6, 2017, between Caesars Entertainment Operating Company, Inc. and VICI Properties Inc.
8-K 2.1 10/11/2017

3.1
Articles of Amendment and Restatement of VICI Properties Inc.
8-K 3.1 10/11/2017

3.2
Amended and Restated Bylaws of VICI Properties Inc.
8-K 3.2 10/11/2017

4.1
Indenture, dated as of October 6, 2017, by and among VICI Properties 1 LLC, VICI FC Inc., the subsidiary guarantors party thereto from time to time, and UMB Bank, National Association, as trustee, governing the First-Priority Senior Secured Floating Rate Notes due 2022.
8-K 4.1 10/11/2017

4.2
Indenture, dated as of October 6, 2017, by and among VICI Properties 1 LLC, VICI FC Inc., the subsidiary guarantors party thereto from time to time, and UMB Bank, National Association, as trustee, governing the 8.0% Second-Priority Senior Secured Notes due 2023.
8-K 4.2 10/11/2017

4.3
Registration Rights Agreement, dated as of October 6, 2017, between VICI Properties Inc. and the holders named therein.
8-K 4.3 10/11/2017

10.1
Lease (CPLV), dated as of October 6, 2017, by and among CPLV Property Owner LLC, Desert Palace LLC, Caesars Entertainment Operating Company, Inc. and CEOC, LLC, relating to the CPLV Facilities.
8-K 10.1 10/11/2017

10.2
Lease (Non-CPLV), dated as of October 6, 2017, by and among the entities listed on Schedules A and B thereto and CEOC, LLC, relating to the Non-CPLV Facilities.
8-K 10.2 10/11/2017

10.3
Lease (Joliet), dated as of October 6, 2017, by and between Harrah’s Joliet Landco LLC and Des Plaines Development Limited Partnership, relating to the Joliet Facilities.
8-K 10.3 10/11/2017

10.4
Golf Course Use Agreement, dated as of October 6, 2017, by and among Rio Secco LLC, Cascata LLC, Chariot Run LLC, Grand Bear LLC, Caesars Enterprise Services, LLC, CEOC, LLC and, solely for purposes of Section 2.1(c) thereof, Caesars License Company, LLC.
8-K 10.4 10/11/2017

Incorporated by Reference
Exhibit
Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date
10.5
Management and Lease Support Agreement, dated as of October 6, 2017, by and among Desert Palace LLC, Caesars Entertainment Operating Company, Inc., CEOC, LLC, CPLV Manager, LLC, Caesars Entertainment Corporation, CPLV Property Owner LLC, and solely for certain articles and sections named therein, Caesars License Company, LLC and Caesars Enterprise Services, LLC relating to the CPLV Facilities.
8-K 10.5 10/11/2017

10.6
Management and Lease Support Agreement, dated as of October 6, 2017, by and among CEOC, LLC, the entities listed therein, Non-CPLV Manager, LLC, Caesars Entertainment Corporation and solely for certain articles and sections named therein, Caesars License Company, LLC and Caesars Enterprise Services, LLC relating to the Non-CPLV Facilities.
8-K 10.6 10/11/2017

10.7
Management and Lease Support Agreement, dated as of October 6, 2017, by and among Des Plaines Development Limited Partnership, Joliet Manager, LLC, Caesars Entertainment Corporation, Harrah’s Joliet Landco LLC and solely for certain articles and sections named therein, Caesars License Company, LLC and Caesars Enterprise Services, LLC relating to the Joliet Facilities.
8-K 10.7 10/11/2017

10.8
Right of First Refusal Agreement, dated as of October 6, 2017, between Caesars Entertainment Corporation and VICI Properties L.P.
8-K 10.8 10/11/2017

10.9
Call Right Agreement, dated as of October 6, 2017, by and between VICI Properties L.P. and Caesars Entertainment Corporation relating to Harrah’s New Orleans.
8-K 10.9 10/11/2017

10.10
Call Right Agreement, dated as of October 6, 2017, by and between VICI Properties L.P. and Caesars Entertainment Corporation relating to Harrah’s Laughlin.
8-K 10.10 10/11/2017

10.11
Call Right Agreement, dated as of October 6, 2017, by and between VICI Properties L.P. and Caesars Entertainment Corporation relating to Harrah’s Atlantic City.
8-K 10.11 10/11/2017

10.12
Tax Matters Agreement, dated as of October 6, 2017, by and among Caesars Entertainment Corporation, CEOC, LLC, VICI Properties Inc., VICI Properties L.P. and CPLV Property Owner LLC.
8-K 10.12 10/11/2017

10.13
Loan Agreement, dated as of October 6, 2017, by and among CPLV Property Owner LLC, as borrower, JPMorgan Chase Bank, National Association, Barclays Bank PLC, Goldman Sachs Mortgage Company and Morgan Stanley Bank, N.A., as lenders, governing the CPLV CMBS Debt.
8-K 10.13 10/11/2017

Incorporated by Reference
Exhibit
Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date
10.14
Mezzanine C Loan Agreement, dated as of October 6, 2017, by and among CPLV Mezz 3 LLC, Wilmington Savings Fund Society, FSB, as Administrative Agent and Collateral Agent, and the lenders party thereto, governing the junior mezzanine debt.
8-K 10.14 10/11/2017

10.15
Mezzanine B Loan Agreement, dated as of October 6, 2017, by and among CPLV Mezz 2 LLC, Wilmington Savings Fund Society, FSB, as Administrative Agent and Collateral Agent, and the lenders party thereto, governing the intermediate mezzanine debt.
8-K 10.15 10/11/2017

10.16
Mezzanine A Loan Agreement, dated as of October 6, 2017, by and among CPLV Mezz 1 LLC, Wilmington Savings Fund Society, FSB, as Administrative Agent and Collateral Agent, and the lenders party thereto, governing the senior mezzanine debt.
8-K 10.16 10/11/2017

10.17
Mandatory Conversion Implementation Agreement, dated as of October 6, 2017, by and between VICI Properties Inc. and CPLV Mezz 3 LLC.
8-K 10.17 10/11/2017

10.18
First Lien Credit Agreement, dated as of October 6, 2017, among VICI Properties 1 LLC, as the Borrower, the lenders party thereto, and Wilmington Trust, National Association, as Administrative Agent.
8-K 10.18 10/11/2017

10.19
First Lien Intercreditor Agreement, dated as of October 6, 2017, among VICI Properties 1 LLC and VICI FC Inc., as the Borrowers, Wilmington Trust, National Association, as Collateral Agent and Authorized Representative under the Credit Agreement, UMB Bank, National Association, as the Initial Other Authorized Representative, and each additional Authorized Representative from time to time party hereto.
8-K 10.19 10/11/2017

10.20
First Lien Collateral Agreement, dated as of October 6, 2017, among VICI Properties 1 LLC, VICI FC Inc., each Subsidiary Party thereto, and Wilmington Trust, National Association, as Collateral Agent.
8-K 10.20 10/11/2017

10.21
Second Lien Intercreditor Agreement, dated as of October 6, 2017, among VICI Properties 1 LLC and VICI FC Inc., as the Borrowers, Wilmington Trust, National Association, as Credit Agreement Agent, UMB Bank, National Association, as the Initial Other First Priority Lien Obligations Agent, and each Other First Priority Lien Obligations Agent from time to time party hereto.
8-K 10.21 10/11/2017

Incorporated by Reference
Exhibit
Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date
10.22
Second Lien Collateral Agreement, dated as of October 6, 2017, among VICI Properties 1 LLC, VICI FC Inc., each Subsidiary Party thereto, and UMB Bank, National Association, as Collateral Agent.
8-K 10.22 10/11/2017

10.23
Amended and Restated Agreement of Limited Partnership of VICI Properties L.P.
8-K 10.23 10/11/2017

10.24
Form of Indemnification Agreement, between VICI Properties Inc. and its directors and officers

10 10.20 9/28/2017

10.25
Employment Agreement, dated as of October 6, 2017, by and between VICI Properties Inc. and Edward Pitoniak.
8-K 10.25 10/11/2017

10.26
Employment Agreement, dated as of October 6, 2017, by and between VICI Properties Inc. and John Payne.
8-K 10.26 10/11/2017

10.27
Employment Agreement, dated as of October 6, 2017, by and between VICI Properties Inc. and Mary E. Higgins.
8-K 10.27 10/11/2017

10.28
VICI Properties Inc. 2017 Stock Incentive Plan.
8-K 10.28 10/11/2017

31.1
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X

31.2
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X

*32.1
Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
__

*32.2
Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
__

101.INS XBRL Instance Document X

101.SCH XBRL Taxonomy Extension Schema Document X

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document X

101.DEF XBRL Taxonomy Extension Definition Linkbase Document X

101.LAB XBRL Taxonomy Extension Label Linkbase Document X

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document X

~~_______________~~

* Furnished ~~herewith.~~

herewith

Table of Contents

~~SIGNATURE~~SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

VICI PROPERTIES INC.

Signature

Title

Date

/s/ EDWARD B. PITONIAK

Chief Executive Officer and Director

October 27, 2022

Edward B. Pitoniak

(Principal Executive Officer)

/s/ DAVID A. KIESKE

~~VICI PROPERTIES INC.~~

Chief Financial Officer

October 27, 2022

David A. Kieske

(Principal Financial Officer)

~~November 13, 2017~~

~~By:~~

~~/S/ KENNETH J. KUICK~~

/s/ GABRIEL F. WASSERMAN

~~Kenneth J. Kuick~~

~~Senior Vice President and~~ Chief Accounting Officer

October 27, 2022

Gabriel F. Wasserman

(Principal Accounting Officer)

VICI PROPERTIES L.P.

Signature

Title

Date

/s/ EDWARD B. PITONIAK

Chief Executive Officer and Director

October 27, 2022

Edward B. Pitoniak

(Principal Executive Officer)

/s/ DAVID A. KIESKE

Chief Financial Officer

October 27, 2022

David A. Kieske

(Principal Financial Officer)

/s/ GABRIEL F. WASSERMAN

Chief Accounting Officer

October 27, 2022

Gabriel F. Wasserman

(Principal Accounting Officer)



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.)



	September 30, 2017		December 31, 2016
Assets
Current assets
Cash	$	84	$	920
Receivables, net	206		77
Inventories	528		371
Prepayments	85		276
Total current assets	903		1,644
Property and equipment, net	88,347		88,831
Total assets	$	89,250	$	90,475

Liabilities and Equity
Current liabilities
Accounts payable	$	194	$	305
Accrued expense	769		705
Current portion of long-term debt	—		14
Total current liabilities	963		1,024
Deferred income taxes	5,043		5,043
Liabilities subject to compromise	249		265
Total liabilities	6,255		6,332
Commitments and contingencies (Note 8)
Equity
Net investment	82,943		84,091
Retained earnings	52		52
Total equity	82,995		84,143
Total liabilities and equity	$	89,250	$	90,475



	Three Months Ended September 30,					Nine Months Ended September 30,
	2017		2016			2017		2016
Revenues
Golf ($2,892, $2,279, $5,562 and $5,131 attributable to related parties)	$	3,682	$	3,631		$	11,146	$	10,901
Food and beverage	233		340			1,338		1,541
Retail and other	187		312			1,343		1,520
Net revenues	4,102		4,283			13,827		13,962
Operating expenses
Direct
Golf	1,461		1,484			5,088		5,294
Food and beverage	235		363			1,119		1,359
Retail and other	185		317			1,041		1,166
Property costs	1,127		883			2,836		2,341
Depreciation	801		776			2,402		2,227
Administrative and other	293		459			1,341		1,569
Total operating expenses	4,102		4,282			13,827		13,956
Income from operations	—		1			—		6
Interest expense	—		(1		)	—		(6		)
Income before taxes	—		—			—		—
Income taxes	—		—			—		—
Net income	$	—	$	—		$	—	$	—



	Net Investment			Retained Earnings		Total Equity
Balance as of December 31, 2015	$	85,323		$	52	$	85,375
Net income	—			—		—
Transactions with parent, net	(1,070		)	—		(1,070		)
Balance as of September 30, 2016	$	84,253		$	52	$	84,305

Balance as of December 31, 2016	$	84,091		$	52	$	84,143
Net income	—			—		—
Transactions with parent, net	(1,148		)	—		(1,148		)
Balance as of September 30, 2017	$	82,943		$	52	$	82,995



	Nine Months Ended September 30,
	2017			2016
Cash flows from operating activities
Net income	$	—		$	—
Adjustments to reconcile net income to cash flows provided by operating activities:
Depreciation	2,402			2,227
Provisions for bad debt	11			31
Change in current assets and liabilities:
Receivables	(141		)	(26		)
Inventories	(157		)	(9		)
Prepayments	192			(32		)
Accounts payable	(127		)	114
Accrued expenses	64			81
Cash flows provided by operating activities	2,244			2,386
Cash flows from investing activities
Acquisitions of property and equipment, net of change in related payables	(1,918		)	(793		)
Cash flows used in investing activities	(1,918		)	(793		)
Cash flows from financing activities
Repayments for capital leases	(14		)	(38		)
Transactions with parent, net	(1,148		)	(1,070		)
Cash flows used in financing activities	(1,162		)	(1,108		)
Net increase in cash and cash equivalents	(836		)	485
Cash and cash equivalents, beginning of period	920			351
Cash and cash equivalents, end of period	$	84		$	836

	Nine Months Ended September 30,
Supplemental Cash Flow Information:	2017			2016
Cash paid for interest	$	—		$	6
Cash paid for income taxes	—			—



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



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


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


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


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			~~Page~~
Item 1.			~~VICI Properties Inc. Balance Sheets (Unaudited)~~
	~~Balance Sheets~~	4
	~~Notes to Balance Sheets~~	5
	~~Combined Statement~~Financial Statements of ~~Investments of Real Estate Assets to be Contributed to~~ VICI Properties Inc. (Unaudited)
	~~Combined Statement of Investments of Real Estate Assets to be Contributed to VICI Properties Inc.~~	155
					~~Notes to Combined Statement~~Consolidated Balance Sheets as of ~~Investments of Real Estate Assets to be Contributed to VICI Properties Inc.~~September 30, 2022 and December 31, 2021	165
			~~Caesars Entertainment Outdoor (Debtor-in-Possession) Combined Condensed Financial Statements (Unaudited)~~
	~~Combined Condensed Balance Sheets~~Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended S e ptember 30, 2022 and 2021			196
					~~Combined Condensed~~Consolidated Statements of ~~Operations~~Stockholders’ Equity for the Three and Nine Months Ended S e ptember 30, 2022 and 2021	207
					~~Combined Condensed Statements of Equity~~	21
	~~Combined Condensed~~Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	229

			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 ~~Combined Condensed~~Consolidated Financial Statements			2317
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			3055
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			3573
Item 4.			Controls and Procedures			3574

PART II.			OTHER INFORMATION
Item 1.			Legal Proceedings			3675
Item 1A.			Risk Factors			3675
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			5375
Item 3.			Defaults Upon Senior Securities			5375
Item 4.			Mine Safety Disclosures			5375
~~Item 5.~~	~~Other Information~~	53
~~Item 6.~~	~~Exhibits~~	54
~~SIGNATURE~~Item 5.			58Other Information			75
Item 6.			Exhibits			76

Signatures						77

Future Minimum Rental Payments Due from Noncancelable Leases⁽¹⁾⁽²⁾

	(In millions)
Remaining 2017	$	149.0
2018	630.6
2019	633.9
2020	637.2
2021	640.7
2022 and thereafter	24,948.3
Total	$	27,639.7



	Final		Book Value at Emergence
	Maturity	Rate	(Dollars in millions)
Senior Secured First Lien Term Loans (“Term Loans”)	2022	Variable	1,638.4
First Priority Senior Secured Notes (“First Lien Notes”)	2022	Variable	311.7
Second Priority Senior Secured Notes (“Second Lien Notes”)	2023	8.00%	766.9
CPLV Debt ⁽¹⁾
CPLV Market Debt	2022	4.36%	1,550.0
CPLV Mezzanine Debt ⁽²⁾	2022	Various	650.0
Total Debt			$	4,917.0


MGP Common Shares outstanding as of April 29, 2022			156,757,773
Exchange Ratio			1.366
VICI common stock issued (1)			214,131,064
VICI common stock issued for MGP stock-based compensation awards			421,468
Total VICI common stock issued			214,552,532


(In thousands)	Amount
REIT Merger Consideration (1)	$	6,568,480
Redemption payment to MGM	4,404,000
VICI OP Units retained by MGM (2)	374,769
Repayment of MGP revolving credit facility (3)	90,000
Transactions costs (4)	119,741
Total consideration transferred	$	11,556,990
Assumption of MGP OP Notes and Exchange Notes, at principal value	4,200,000
Assumption of our proportionate share of the BREIT JV CMBS debt, at principal value	1,503,000
Total purchase price	$	17,259,990


	Minimum Lease Payments (1) (2)
	Investments in Leases
(In thousands)	Sales-Type		Financing Receivables		Total
2022 (remaining)	$	333,747	$	272,444	$	606,191
2023	1,344,189		1,103,787		2,447,976
2024	1,366,127		1,125,348		2,491,475
2025	1,385,348		1,146,509		2,531,857
2026	1,405,006		1,168,089		2,573,095
2027	1,425,272		1,190,145		2,615,417
Thereafter	56,603,912		86,652,035		143,255,947
Total	$	63,863,601	$	92,658,357	$	156,521,958

Weighted Average Lease Term (2)	36.6 years		51.1 years		43.7 years


September 30, 2022
Loan Type	Principal Balance		Carrying Value(1)		Future Funding Commitments(2)		Weighted Average Interest Rate		Weighted Average Term (3)
Senior Secured	$	474,168	$	470,674	$	213,832	7.8	%	3.3 years
Mezzanine	111,611		109,131		153,898		7.9	%	4.1 years





Total	$	585,779	$	579,805	$	367,730	7.9	%	3.5 years


⁽²⁾	~~See Business and Basis of Presentation - Golf Revenue~~


⁽³⁾	Primarily includes transactions where CEOC and Caesars affiliates’ customers charge their golf, food and beverage and retail purchases directly to their hotel bill. Amounts collected from the customer by the hotel are remitted to the golf course.


	September 30, 2022
($ In thousands)	Amortized Cost		Allowance (1)		Net Investment		Allowance as a % of Amortized Cost
Investments in leases - sales-type	$	17,698,971	$	(687,386)	$	17,011,585	3.88	%
Investments in leases - financing receivables	17,102,430		(660,814)		16,441,616		3.86	%
Investments in loans	585,818		(6,013)		579,805		1.03	%
Other assets - sales-type sub-leases	784,112		(22,046)		762,066		2.81	%
Totals	$	36,171,331	$	(1,376,259)	$	34,795,072	3.80	%


	September 30, 2022
(In thousands)	Ba2		Ba3		B1		B2		B3		N/A(2)		Total
Investments in leases - sales-type and financing receivable, Investments in loans and Other assets (1)	$	4,230,599	$	15,624,832	$	14,975,981	$	874,054	$	280,075	$	185,790	$	36,171,331


	September 30, 2021
(In thousands)	Ba2		Ba3		B1		B2		B3		N/A(2)		Total
Investments in leases - sales-type and financing receivable, Investments in loans and Other assets (1)	$	—	$	952,620	$	14,905,789	$	866,312	$	281,869	$	84,292	$	17,090,882



	Operating Leases (In thousands)
Remaining 2017	$	211
2018	873
2019	891
2020	908
2021	926
2022 and thereafter	20,234
Total minimum rental commitments	$	24,043


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share data)	2022		2021		2022		2021
Basic:
Net income attributable to common stockholders	$	330,905	$	161,862	$	513,582	$	732,372
Weighted-average shares of common stock outstanding	962,574		555,154		848,839		542,844
Basic EPS	$	0.34	$	0.29	$	0.61	$	1.35

Diluted:
Net income attributable to common stockholders	$	330,905	$	161,862	$	513,582	$	732,372
Diluted weighted-average shares of common stock outstanding	964,134		571,895		850,823		557,114
Diluted EPS	$	0.34	$	0.28	$	0.60	$	1.31


	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021
(In thousands)	Real Property Business		Golf Course Business		VICI Consolidated		Real Property Business		Golf Course Business		VICI Consolidated
Revenues	$	744,855	$	6,688	$	751,543	$	369,200	$	6,504	$	375,704
Interest expense	(169,354)		—		(169,354)		(165,099)		—		(165,099)

Loss on extinguishment of debt	—		—		—		(15,622)		—		(15,622)
Income from unconsolidated affiliate	22,719		—		22,719		—		—		—
Income before income taxes	336,489		806		337,295		163,953		619		164,572
Income tax expense	(245)		(172)		(417)		(245)		(143)		(388)
Net income	336,244		634		336,878		163,708		476		164,184

Depreciation	31		785		816		29		742		771

Total assets	37,205,177		102,805		37,307,982		17,453,567		95,237		17,548,804
Total liabilities	15,227,819		17,866		15,245,685		5,402,358		17,660		5,420,018

	Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021
(In thousands)	Real Property Business		Golf Course Business		VICI Consolidated		Real Property Business		Golf Course Business		VICI Consolidated
Revenues	$	1,805,306	$	25,485	$	1,830,791	$	1,104,812	$	21,602	$	1,126,414
Interest expense	(370,624)		—		(370,624)		(321,953)		—		(321,953)

Loss on extinguishment of debt	—		—		—		(15,622)		—		(15,622)
Income from unconsolidated affiliate	37,853		—		37,853		—		—		—
Income before income taxes	516,278		6,991		523,269		736,991		4,497		741,488
Income tax expense	(328)		(1,516)		(1,844)		(1,128)		(1,000)		(2,128)
Net income	515,950		5,475		521,425		735,863		3,497		739,360

Depreciation	90		2,281		2,371		92		2,228		2,320

Total assets	37,205,177		102,805		37,307,982		17,453,567		95,237		17,548,804
Total liabilities	15,227,819		17,866		15,245,685		5,402,358		17,660		5,420,018



	Maintenance Agreement (In thousands)
Remaining 2017	$	775
2018	2,969
2019	225
Total maintenance agreement commitments	$	3,969


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except share data and per share data)	2022		2021		2022		2021
Net income attributable to common stockholders	$	330,905	$	161,862	$	513,582	$	732,372
Real estate depreciation	—		—		—		—
Joint venture depreciation and non-controlling interest adjustments	9,743		—		17,053		—
FFO attributable to common stockholders	340,648		161,862		530,635		732,372
Non-cash leasing and financing adjustments	(108,553)		(30,865)		(230,522)		(88,063)
Non-cash change in allowance for credit losses	232,763		9,031		865,459		(24,453)
Non-cash stock-based compensation	3,493		2,395		9,359		7,067
Transaction and acquisition expenses	1,947		177		19,366		9,689
Amortization of debt issuance costs and original issue discount	10,326		34,098		38,294		50,723
Other depreciation	785		742		2,280		2,228
Capital expenditures	(437)		(131)		(1,093)		(1,638)
(Gain) loss on extinguishment of debt and interest rate swap settlements	—		79,861		(5,405)		79,861
Joint venture non-cash adjustments and non-controlling interest adjustments	(10,315)		250		(22,171)		773
AFFO attributable to common stockholders	470,657		257,420		1,206,202		768,559
Interest expense, net	156,004		66,736		333,838		206,916
Income tax expense	417		388		1,844		2,128
Joint venture interest expense and non-controlling interest adjustments	11,536		—		19,187		—
Adjusted EBITDA attributable to common stockholders	$	638,614	$	324,544	$	1,561,071	$	977,603

Net income per common share
Basic	$	0.34	$	0.29	$	0.61	$	1.35
Diluted	$	0.34	$	0.28	$	0.60	$	1.31
FFO per common share
Basic	$	0.35	$	0.29	$	0.63	$	1.35
Diluted	$	0.35	$	0.28	$	0.62	$	1.31




AFFO per common share
Basic	$	0.49	$	0.46	$	1.42	$	1.42
Diluted	$	0.49	$	0.45	$	1.42	$	1.38
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


		Payments Due By Period
(In thousands)		Total		2022 (remaining)		2023		2024		2025		2026 and Thereafter
Long-term debt, principal
	Senior Unsecured Notes	$	13,950,000	$	—	$	—	$	1,050,000	$	2,050,000	$	10,850,000



























	Revolving Credit Facility	—		—		—		—		—		—
	Delayed Draw Term Loan	—		—		—		—		—		—
Scheduled interest payments		4,734,650		176,687		660,184		625,876		557,121		2,714,781
Total debt contractual obligations		18,684,650		176,687		660,184		1,675,876		2,607,121		13,564,781

Leases and contracts
	Future funding commitments – loan investments and lease agreements(1)	367,730		22,338		288,182		42,209		—		15,000
	Golf course operating lease and contractual commitments (2)	49,021		1,377		5,523		2,112		2,154		37,856
	Corporate office leases	7,187		284		967		857		899		4,179
Total leases and contract obligations		423,938		23,999		294,673		45,178		3,053		57,035

Total contractual commitments		$	19,108,588	$	200,687	$	954,857	$	1,721,055	$	2,610,174	$	13,621,816