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, 2023		December 31, 2022
Assets
Real estate portfolio:
Investments in leases - sales-type, net	$	22,889,984	$	17,172,325

Investments in leases - financing receivables, net	17,337,665		16,740,770
Investments in loans and securities, net	973,217		685,793
Investment in unconsolidated affiliate	—		1,460,775
Land	150,727		153,560
Cash and cash equivalents	510,884		208,933

Short-term investments	—		217,342
Other assets	969,672		936,328
Total assets	$	42,832,149	$	37,575,826

Liabilities
Debt, net	$	16,692,728	$	13,739,675
Accrued expenses and deferred revenue	222,430		213,388
Dividends and distributions payable	426,861		380,178
Other liabilities	954,448		952,472
Total liabilities	18,296,467		15,285,713

Commitments and contingent liabilities (Note 10)

Stockholders’ equity
Common stock, $0.01 par value, 1,350,000,000 shares authorized and 1,016,827,883 and 963,096,563 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	10,168		9,631
Preferred stock, $0.01 par value, 50,000,000 shares authorized and no shares outstanding at September 30, 2023 and December 31, 2022	—		—
Additional paid-in capital	23,316,140		21,645,499
Accumulated other comprehensive income	186,241		185,353
Retained earnings	652,402		93,154
Total VICI stockholders’ equity	24,164,951		21,933,637
Non-controlling interests	370,731		356,476
Total stockholders’ equity	24,535,682		22,290,113
Total liabilities and stockholders’ equity	$	42,832,149	$	37,575,826

Note: As of September 30, 2023 and December 31, 2022, our Investments in leases - sales-type, Investments in leases - financing receivables, Investments in loans and securities, and Other assets (sales-type sub-leases) are net of allowance for credit losses of $755.4 million, $707.0 million, $22.8 million and $19.3 million, respectively, and $570.4 million, $726.7 million, $6.9 million and $19.8 million, 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,
	2023		2022		2023		2022
Revenues
Income from sales-type leases	$	500,212	$	376,048	$	1,473,961	$	1,077,952

Income from lease financing receivables, loans and securities	378,502		350,945		1,122,703		685,544
Other income	18,179		17,862		55,043		41,811
Golf revenues	7,425		6,688		28,416		25,484
Total revenues	904,318		751,543		2,680,123		1,830,791

Operating expenses
General and administrative	14,422		12,063		44,347		33,311
Depreciation	1,011		816		2,712		2,371
Other expenses	18,179		17,862		55,043		41,811
Golf expenses	6,332		5,186		18,874		16,330
Change in allowance for credit losses	95,997		232,763		166,119		865,459
Transaction and acquisition expenses	3,566		1,947		3,385		19,366
Total operating expenses	139,507		270,637		290,480		978,648

Income from unconsolidated affiliate	—		22,719		1,280		37,853
Interest expense	(204,927)		(169,354)		(612,881)		(370,624)
Interest income	7,341		3,024		16,194		3,897

Other (losses) gains	(1,122)		—		4,295		—
Income before income taxes	566,103		337,295		1,798,531		523,269
Income tax expense	(644)		(417)		(3,630)		(1,844)
Net income	565,459		336,878		1,794,901		521,425
Less: Net income attributable to non-controlling interests	(9,130)		(5,973)		(29,130)		(7,843)
Net income attributable to common stockholders	$	556,329	$	330,905	$	1,765,771	$	513,582

Net income per common share
Basic	$	0.55	$	0.34	$	1.75	$	0.61
Diluted	$	0.55	$	0.34	$	1.75	$	0.60

Weighted average number of shares of common stock outstanding
Basic	1,012,986,784		962,573,646		1,007,110,068		848,839,357
Diluted	1,013,589,640		964,134,340		1,008,437,452		850,823,037

Other comprehensive income
Net income	$	565,459	$	336,878	$	1,794,901	$	521,425
Reclassification of derivative gain to Interest expense	(6,037)		(6,037)		(18,111)		(10,196)
Unrealized gain on cash flow hedges	20,109		—		20,289		200,550
Foreign currency translation adjustments	(1,348)		—		(1,280)		—
Comprehensive income	578,183		330,841		1,795,799		711,779
Comprehensive income attributable to non-controlling interest	(9,283)		(5,897)		(29,140)		(7,715)
Comprehensive income attributable to common stockholders	$	568,900	$	324,944	$	1,766,659	$	704,064

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 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
Reclassification of derivative gain to Interest expense	—		—		(4,107)		—		(4,107)		(52)		(4,159)
Unrealized gain on cash flow hedges	—		—		91,939		—		91,939		—		91,939
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

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 Income		Retained Earnings (Deficit)		Total VICI Stockholders’ Equity		Non-controlling Interests		Total Stockholders’ Equity
Balance as of December 31, 2022	$	9,631	$	21,645,499	$	185,353	$	93,154	$	21,933,637	$	356,476	$	22,290,113
Net income	—		—		—		518,740		518,740		9,121		527,861
Issuance of common stock, net	406		1,271,066		—		—		1,271,472		—		1,271,472
Reallocation of equity	—		(4,936)		—		—		(4,936)		4,936		—
Dividends and distributions declared ($0.3900 per common share)	—		—		—		(391,640)		(391,640)		(7,048)		(398,688)
Stock-based compensation, net of forfeitures	5		(1,120)		—		—		(1,115)		(14)		(1,129)
Reclassification of derivative gain to Interest expense	—		—		(5,964)		—		(5,964)		(73)		(6,037)
Unrealized loss on cash flow hedges	—		—		(7,304)		—		(7,304)		(89)		(7,393)
Foreign currency translation adjustments	—		—		(1,644)		—		(1,644)		(20)		(1,664)
Balance as of March 31, 2023	10,042		22,910,509		170,441		220,254		23,311,246		363,289		23,674,535
Net income	—		—		—		690,702		690,702		10,879		701,581
Issuance of common stock, net	32		101,435		—		—		101,467		—		101,467
Reallocation of equity	—		(651)		—		—		(651)		651		—
Dividends and distributions declared ($0.3900 per common share)	—		—		—		(392,897)		(392,897)		(7,048)		(399,945)
Stock-based compensation, net of forfeitures	—		3,620		—		—		3,620		49		3,669
Reclassification of derivative gain to Interest expense	—		—		(5,964)		—		(5,964)		(73)		(6,037)
Unrealized gain on cash flow hedges	—		—		7,482		—		7,482		91		7,573
Foreign currency translation adjustments	—		—		1,711		—		1,711		21		1,732
Balance as of June 30, 2023	10,074		23,014,913		173,670		518,059		23,716,716		367,859		24,084,575
Net income	—		—		—		556,329		556,329		9,130		565,459
Issuance of common stock, net	94		298,159		—		—		298,253		—		298,253
Reallocation of equity	—		(897)		—		—		(897)		897		—
Dividends and distributions declared ($0.4150 per common share)	—		—		—		(421,986)		(421,986)		(7,354)		(429,340)
Stock-based compensation, net of forfeitures	—		3,965		—		—		3,965		46		4,011
Reclassification of derivative gain to Interest expense	—		—		(5,965)		—		(5,965)		(72)		(6,037)
Unrealized gain on cash flow hedges	—		—		19,870		—		19,870		239		20,109
Foreign currency translation adjustments	—		—		(1,334)		—		(1,334)		(14)		(1,348)
Balance as of September 30, 2023	$	10,168	$	23,316,140	$	186,241	$	652,402	$	24,164,951	$	370,731	$	24,535,682

See accompanying Notes to Consolidated Financial Statements.

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VICI PROPERTIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)


	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities
Net income	$	1,794,901	$	521,425
Adjustments to reconcile net income to cash flows provided by operating activities:
Non-cash leasing and financing adjustments	(383,688)		(230,522)
Stock-based compensation	11,517		9,359
Non-cash transaction costs	—		8,816
Depreciation	2,712		2,371
Other (gains) losses	(4,295)		—
Amortization of debt issuance costs and original issue discount	35,415		28,099
Change in allowance for credit losses	166,119		865,459
Income from unconsolidated affiliate	(1,280)		(37,853)
Distributions from unconsolidated affiliate	3,273		40,437
Net proceeds from settlement of derivatives	—		201,433
Change in operating assets and liabilities:
Other assets	134		(4,052)
Accrued expenses and deferred revenue	(14,230)		50,676
Other liabilities	(6,061)		(171)
Net cash provided by operating activities	1,604,517		1,455,477

Cash flows from investing activities
Net cash paid in connection with MGP Transactions	—		(4,574,536)
Net cash paid in connection with the MGM Grand/Mandalay Bay JV Interest Acquisition	(1,266,905)		—
Investments in leases - sales-type	(231,215)		(4,012,845)
Investments in leases - financing receivables	(365,827)		—
Investments in loans and securities	(702,112)		(87,166)

Principal repayments of loans and receipts of deferred fees	400,250		1,130
Capitalized transaction costs	(759)		(6,801)
Investments in short-term investments	—		(207,722)
Maturities of short-term investments	217,342		—
Proceeds from sale of real estate	6,235		—
Acquisition of property and equipment	(1,894)		(1,158)
Net cash used in investing activities	(1,944,885)		(8,889,098)

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VICI PROPERTIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)


Cash flows from financing activities
Proceeds from offering of common stock, net	1,672,417		3,219,101
Proceeds from April 2022 Notes offering	—		5,000,000
Proceeds from Revolving Credit Facility	408,204		600,000
Repayment of Revolving Credit Facility	(250,000)		(600,000)
Debt issuance costs	—		(146,176)
Repurchase of stock for tax withholding	(4,966)		(6,118)
Distributions to non-controlling interests	(21,450)		(10,711)
Dividends paid	(1,161,764)		(843,706)
Net cash provided by financing activities	642,441		7,212,390

Effect of exchange rate changes on cash, cash equivalents and restricted cash	(122)		—

Net increase (decrease) in cash, cash equivalents and restricted cash	301,951		(221,231)
Cash, cash equivalents and restricted cash, beginning of period	208,933		739,614
Cash, cash equivalents and restricted cash, end of period	$	510,884	$	518,383

Supplemental cash flow information:
Cash paid for interest	$	563,935	$	290,119
Cash paid for income taxes	$	4,896	$	2,306
Supplemental non-cash investing and financing activity:
Dividends and distributions declared, not paid	$	427,060	$	380,377
Debt issuance costs payable	$	—	$	13
Deferred transaction costs payable	$	4,418	$	1,479

Non-cash change in Investments in leases - financing receivables	$	206,771	$	120,709
Obtaining right-of-use assets in exchange for lease liabilities	$	22,968	$	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, 2023		December 31, 2022
Assets
Real estate portfolio:
Investments in leases - sales-type, net	$	22,889,984	$	17,172,325

Investments in leases - financing receivables, net	17,337,665		16,740,770
Investments in loans and securities, net	973,217		685,793
Investment in unconsolidated affiliate	—		1,460,775
Land	150,727		153,560
Cash and cash equivalents	461,024		142,600

Short-term investments	—		217,342
Other assets	890,442		856,605
Total assets	$	42,703,059	$	37,429,770

Liabilities
Debt, net	$	16,692,728	$	13,739,675
Accrued expenses and deferred revenue	218,099		206,643
Distributions payable	427,461		380,581
Other liabilities	939,873		937,655
Total liabilities	18,278,161		15,264,554

Commitments and contingent liabilities (Note 10)

Partners’ Capital
Partners’ capital, 1,029,059,256 and 975,327,936 operating partnership units issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	24,158,382		21,900,511
Accumulated other comprehensive income	186,099		185,201
Total VICI LP’s capital	24,344,481		22,085,712
Non-controlling interest	80,417		79,504
Total capital attributable to partners	24,424,898		22,165,216
Total liabilities and partners’ capital	$	42,703,059	$	37,429,770

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,
	2023		2022		2023		2022
Revenues
Income from sales-type leases	$	500,212	$	376,048	$	1,473,961	$	1,077,952

Income from lease financing receivables, loans and securities	378,502		350,945		1,122,703		685,544
Other income	18,179		17,862		55,043		41,811
Total revenues	896,893		744,855		2,651,707		1,805,307

Operating expenses
General and administrative	14,422		12,055		44,347		33,303
Depreciation	177		31		270		90
Other expenses	18,179		17,862		55,043		41,811
Change in allowance for credit losses	95,997		232,763		166,119		865,459
Transaction and acquisition expenses	3,566		1,947		3,385		19,366
Total operating expenses	132,341		264,658		269,164		960,029

Income from unconsolidated affiliate	—		22,719		1,280		37,853
Interest expense	(204,927)		(169,354)		(612,881)		(370,624)
Interest income	6,685		2,735		14,399		3,378
Other (losses) gains	(1,122)		—		4,295		—
Income before income taxes	565,188		336,297		1,789,636		515,885
Income tax expense	(417)		(245)		(1,981)		(328)
Net income	564,771		336,052		1,787,655		515,557
Less: Net income attributable to non-controlling interest	(2,421)		(1,781)		(7,747)		(5,973)
Net income attributable to partners	$	562,350	$	334,271	$	1,779,908	$	509,584

Net income per Partnership unit
Basic	$	0.55	$	0.34	$	1.75	$	0.60
Diluted	$	0.55	$	0.34	$	1.74	$	0.59

Weighted average number of Partnership units outstanding
Basic	1,025,218,157		974,805,019		1,019,341,441		855,783,910
Diluted	1,025,821,013		976,365,713		1,020,668,825		857,767,590

Other comprehensive income
Net income attributable to partners	$	562,350	$	334,271	$	1,779,908	$	509,584
Reclassification of derivative gain to Interest expense	(6,037)		(6,037)		(18,111)		(10,196)
Unrealized gain on cash flow hedges	20,109		—		20,289		200,550
Foreign currency translation adjustments	(1,348)		—		(1,280)		—
Comprehensive income attributable to partners	$	575,074	$	328,234	$	1,780,806	$	699,938

See accompanying Notes to Consolidated Financial Statements.

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VICI PROPERTIES L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(UNAUDITED)

(In thousands, except unit and per unit data)


	Partners’ Capital		Accumulated Other Comprehensive 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
Reclassification of derivative gain to Interest expense	—		(4,159)		—		(4,159)
Unrealized gain on cash flow hedges	—		91,939		—		91,939
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

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VICI PROPERTIES L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(UNAUDITED)

(In thousands, except unit and per unit data)


	Partners’ Capital		Accumulated Other Comprehensive Income		Non-Controlling Interest		Total
Balance as of December 31, 2022	$	21,900,511	$	185,201	$	79,504	$	22,165,216
Net income	522,076		—		2,839		524,915
Contributions from Parent	1,303,243		—		—		1,303,243
Distributions to Parent	(408,519)		—		—		(408,519)
Distributions to non-controlling interest	—		—		(2,278)		(2,278)
Stock-based compensation, net of forfeitures	(1,129)		—		—		(1,129)
Reclassification of derivative gain to Interest expense	—		(6,037)		—		(6,037)
Unrealized loss on cash flow hedges	—		(7,393)		—		(7,393)
Foreign currency translation adjustments	—		(1,664)		—		(1,664)
Balance as of March 31, 2023	23,316,182		170,107		80,065		23,566,354
Net income	695,482		—		2,487		697,969
Contributions from parent	103,053		—		—		103,053
Distributions to parent	(397,810)		—		—		(397,810)
Distributions to non-controlling interest	—		—		(2,278)		(2,278)
Stock-based compensation, net of forfeitures	3,669		—		—		3,669
Reclassification of derivative gain to Interest expense	—		(6,037)		—		(6,037)
Unrealized gain on cash flow hedges	—		7,573		—		7,573
Foreign currency translation adjustments	—		1,732		—		1,732
Balance as of June 30, 2023	23,720,576		173,375		80,274		23,974,225
Net income	562,350		—		2,421		564,771
Contributions from parent	298,718		—		—		298,718
Distributions to parent	(427,273)		—		—		(427,273)
Distributions to non-controlling interest	—		—		(2,278)		(2,278)
Stock-based compensation, net of forfeitures	4,011		—		—		4,011
Reclassification of derivative gain to Interest expense	—		(6,037)		—		(6,037)
Unrealized gain on cash flow hedges	—		20,109		—		20,109
Foreign currency translation adjustments	—		(1,348)		—		(1,348)
Balance as of September 30, 2023	$	24,158,382	$	186,099	$	80,417	$	24,424,898

See accompanying Notes to Consolidated Financial Statements.

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VICI PROPERTIES L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)


	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities
Net income	$	1,787,655	$	515,557
Adjustments to reconcile net income to cash flows provided by operating activities:
Non-cash leasing and financing adjustments	(383,688)		(230,522)
Stock-based compensation	11,517		9,272
Depreciation	270		90
Other (gains) losses	(4,295)		—
Amortization of debt issuance costs and original issue discount	35,415		28,099
Change in allowance for credit losses	166,119		865,459
Income from unconsolidated affiliate	(1,280)		(37,853)
Distributions from unconsolidated affiliate	3,273		40,437
Net proceeds from settlement of derivatives	—		201,433

Change in operating assets and liabilities:
Other assets	3,574		(2,182)
Accrued expenses and deferred revenue	(25,655)		46,508
Other liabilities	(5,818)		(331)
Net cash provided by operating activities	1,587,087		1,435,967

Cash flows from investing activities
Net cash paid in connection with MGP Transactions	—		(4,574,536)
Net cash paid in connection with the MGM Grand/Mandalay Bay JV Interest Acquisition	(1,266,905)		—
Investments in leases - sales-type	(231,215)		(4,012,845)
Investments in leases - financing receivables	(365,827)		—
Investments in loans and securities	(702,112)		(87,166)
Principal repayments of loans and receipts of deferred fees	400,250		1,130
Capitalized transaction costs	(759)		(6,801)
Investments in short-term investments	—		(207,722)
Maturities of short-term investments	217,342		—
Proceeds from sale of real estate	6,235		—
Acquisition of property and equipment	(1,894)		(65)
Net cash used in investing activities	(1,944,885)		(8,888,005)

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VICI PROPERTIES L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)


Cash flows from financing activities
Contributions from Parent	1,696,417		3,219,202
Distributions to Parent	(1,166,477)		(864,902)
Proceeds from April 2022 Notes offering	—		5,000,000
Proceeds from Revolving Credit Facility	408,204		600,000

Repayment of Revolving Credit Facility	(250,000)		(600,000)
Debt issuance costs	—		(146,176)
Repurchase of stock for tax withholding	(4,966)		—
Distributions to non-controlling interest	(6,834)		(6,309)
Net cash provided by financing activities	676,344		7,201,815

Effect of exchange rate changes on cash, cash equivalents and restricted cash	(122)		—

Net increase (decrease) in cash, cash equivalents and restricted cash	318,424		(250,223)
Cash, cash equivalents and restricted cash, beginning of period	142,600		705,566
Cash, cash equivalents and restricted cash, end of period	$	461,024	$	455,343

Supplemental cash flow information:
Cash paid for interest	$	563,935	$	290,119
Cash paid for income taxes	$	1,598	$	996
Supplemental non-cash investing and financing activity:
Distributions payable	$	427,060	$	380,377
Debt issuance costs payable	$	—	$	13
Deferred transaction costs payable	$	4,418	$	1,479
Non-cash change in Investments in leases - financing receivables	$	206,771	$	120,709
Obtaining right-of-use assets in exchange for lease liabilities	$	22,968	$	541,676

See accompanying Notes to Consolidated Financial Statements.

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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.

“Caesars” refers to Caesars Entertainment, ~~Operating Company,~~ Inc., a Delaware corporation and, 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 Canadian Portfolio” refers to the real estate assets of (i) Century Casino & Hotel Edmonton located in Edmonton, Alberta, (ii) Century Casino St. Albert located in Edmonton, Alberta, (iii) Century Mile Racetrack and Casino located in Edmonton, Alberta and (iv) Century Downs Racetrack and Casino located in Calgary, Alberta.

“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, (iii) Century Casino Cape Girardeau located in Cape Girardeau, Missouri, (iv) Rocky Gap Casino Resort located in Flintstone, Maryland and (v) the Century Canadian Portfolio, as amended from time to time.

“CNB” refers to Cherokee Nation Businesses, L.L.C., and, ~~“CEC”~~as the context requires, its subsidiaries.

“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.

“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, which expired undrawn in accordance with its terms on February 8, 2023.

“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 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

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

$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 Caesars for a term of five years and secured by, among other things, the Caesars Forum Convention Center in Las Vegas, which was repaid in full on May 1, 2023. In connection therewith, the Company’s call right under the put-call agreement relating to the Caesars Forum Convention Center was extended from December 31, 2026 to December 31, 2028.

“Foundation Gaming” refers to Foundation Gaming & Entertainment, ~~Corporation,~~LLC and, as the ~~parent of CEOC.~~context requires, its subsidiaries.

~~On October 6, 2017 (the “Emergence Date”~~“Foundation Master Lease” refers to the lease agreement for the Fitz Casino & Hotel, located in Tunica, Mississippi, and the WaterView Casino & Hotel, located in Vicksburg, Mississippi, as amended from time to time.

“Gold Strike Lease” refers to the lease agreement with CNB for the Gold Strike Casino Resort, located in Tunica, Mississippi (“Gold Strike”), ~~CEOC merged~~as amended from time to time.

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

“JACK Master 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.

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

“Lease Agreements” refer collectively to our leases with our respective tenants, 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.

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

“MGM Grand/Mandalay Bay JV” refers to a joint venture that holds the real estate assets of MGM Grand Las Vegas and Mandalay Bay, in which we hold a 100% ownership stake following our acquisition of the remaining 49.9% ownership stake from our former joint venture partner on January 9, 2023, as further described herein.

“MGM Grand/Mandalay Bay Lease” refers to the lease agreement for MGM Grand Las Vegas and Mandalay Bay, as amended from time to time.

“MGM Leases” refer collectively to the MGM Master Lease and the MGM Grand/Mandalay Bay Lease, in each case, unless the context otherwise requires.

“MGM Master Lease” refers to the lease agreement for the properties leased to MGM, excluding those leased under the MGM Grand/Mandalay Bay Lease, as amended from time to time.

“MGP” refers to MGM Growth Properties LLC, a Delaware limited liability company, which was acquired by the Company on April 29, 2022, 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, which was acquired by the Company on April 29, 2022, 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. (“~~New CEOC”~~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

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

the indenture, dated as of November 19, 2020, in 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”).

“MGP Transactions” refer collectively to a series of transactions pursuant to the MGP Master Transaction Agreement in connection with ~~New CEOC surviving~~our acquisition of MGP on April 29, 2022, as contemplated by the ~~merger. See “Explanatory Note”~~MGP Master Transaction Agreement, including the tax protection agreement with MGM and the MGM Master Lease.

“Mirage Lease” refers to the lease agreement with Hard Rock for the Mirage, located in ~~this Quarterly Report~~Las Vegas, Nevada, as amended from time to time.

“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 the VICI Issuers 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, 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.

“PURE Canadian Gaming” refers to PURE Canadian Gaming, Corp., an Alberta corporation, and, as the context requires, its subsidiaries.

“PURE Master Lease” refers to the lease agreement for the (i) PURE Casino Edmonton located in Edmonton, Alberta, (ii) PURE Casino Yellowhead located in Edmonton, Alberta, (iii) PURE Casino Calgary located in Calgary, Alberta and (iv) PURE Casino Lethbridge located in Lethbridge, Alberta (collectively, the “PURE Portfolio”), as amended from time to time.

“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.

“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, 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.

“Venetian Acquisition” refers to our acquisition of the Venetian Resort, with Apollo, which closed on ~~Form 10-Q.~~February 23, 2022.

“Venetian Lease” refers to the lease agreement for the Venetian Resort Las Vegas and Venetian Convention & Expo Center, located in Las Vegas, Nevada (the “Venetian Resort”), as amended from time to time.

“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 business.

“VICI Issuers” refer to VICI LP and VICI Note Co. Inc., a Delaware corporation.

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

“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.

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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, 2023, our geographically diverse real estate portfolio consisted of 54 gaming facilities in the United States and Canada, 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, CNB, EBCI, Foundation Gaming, JACK Entertainment, MGM, PENN Entertainment, PURE Canadian Gaming and Seminole Hard Rock, with Caesars and MGM being our largest tenants. VICI ~~REIT leases the Properties to New CEOC~~also owns four championship golf courses which are managed by CDN Golf Management Inc., and are located near certain of ~~its subsidiaries under~~our properties. Subsequent to quarter-end, we also acquired the land and real estate assets of 38 bowling entertainment centers across the United States from Bowlero Corp. (“Bowlero”) in a sale leaseback transaction and entered into a long-term triple-net master lease ~~agreements (the “Master Leases”).~~ with Bowlero with respect to such assets.

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 our audited financial statements and notes thereto included in our most recent Annual Report on Form 10-K, 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, 2023 are not necessarily indicative of the results that may be ~~required~~expected for the year ending December 31, 2023.

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 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 variable interest entities for which we or one of our consolidated subsidiaries is the primary beneficiary.

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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, 2023, VICI’s non-controlling interests represent an approximate 1.2% third-party ownership of VICI OP in the form of 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 date of purchase are considered cash equivalents and are carried at cost, which approximates fair value. As of September 30, 2023 and December 31, 2022, we did not have any restricted cash.

Short-Term Investments

Investments with an original maturity of greater than three months and less than one year from the date of purchase are considered short-term investments and are stated at fair value.

We may invest our excess cash in short-term investment grade commercial paper as well as discount notes issued by government-sponsored enterprises including the Federal Home Loan Mortgage Corporation and certain of the Federal Home Loan Banks. These investments generally have original maturities between 91 and 180 days and are accounted for as available for sale securities. Interest on our short-term investments is recognized as interest income in our Statement of Operations. We had $217.3 million of short-term investments as of December 31, 2022. We did not have any short-term investments as of September 30, 2023.

Purchase Price Accounting

We assess all of our property acquisitions under ASC 805 - Business Combinations (“ASC 805”) to determine if such acquisitions should be accounted for as a business combination or an asset acquisition. Under ASC 805, an acquisition does not qualify as a business combination when (i) substantially all of the fair value is concentrated in a ~~number~~single identifiable asset or group of ~~areas, including, but~~similar identifiable assets, (ii) the acquisition does not limited to: the application of fresh start reporting; the recognition of revenue from our leases; 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 changesinclude a substantive process in the ~~accounting estimates are likely~~form of an acquired workforce, or (iii) an acquired contract that cannot be replaced without significant cost, effort or delay. Generally, and to ~~occur from period to period. Actual results may differ from the estimates.~~

~~Revenue Recognition - Leases~~

~~As a REIT, the majority~~date, all of our ~~revenues will~~acquisitions have been determined to be ~~derived from rent received from~~asset acquisitions and, in accordance with ASC 805-50, all applicable transaction costs are capitalized as part of the purchase price of the acquisition.

We allocate the purchase price to the identifiable assets acquired and liabilities assumed, as applicable, using their relative fair value. Generally, with the exception of the MGP Transactions and the MGM Grand/Mandalay Bay JV Interest Acquisition (each as further described in Note 3 - Real Estate Transactions), our ~~tenants under long-term triple-net leases. The accounting guidance~~acquisitions consist of properties without existing leases or debt and, accordingly, the assets acquired are comprised of land, building and site improvements. Further, since all the components of our leases are classified as sales-type leases or financing receivables, as further described below, the assets acquired are transferred into the net investment in lease or financing receivable, as applicable.

Investments in Leases - Sales-type, Net

We account for our 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~~

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

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 component (the “Harrah’s Call Properties”) of the Caesars Regional Master Lease), Century Master Lease (excluding the Century Canadian Portfolio component), Hard Rock Cincinnati Lease, MGM Grand/Mandalay Bay 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 Foundation Master Lease, Harrah’s Call Properties components of the Caesars Regional Master Lease, Gold Strike Lease, JACK Master Lease, MGM Master Lease, Mirage Lease, PURE Master Lease and the ~~land separately as an operating lease. If~~Century Canadian Portfolio component of the ~~building element does not~~Century 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 of the criteria below, it~~sale leaseback transactions, control is not considered to have transferred to us under GAAP. Accordingly, such leases are accounted for as ~~a capital lease.~~Investments in leases - financing receivables on our Balance Sheet, net of allowance for credit losses, in accordance with ASC 310.


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.

~~The tests outlined above, as well as~~Lease Term

We assess the ~~resulting calculations, require subjective judgments, such as determining, at~~noncancelable lease ~~inception, the fair value~~term under ASC 842, which includes any reasonably assured renewal periods. All of ~~the assets, the residual value~~our Lease Agreements provide for an initial term, with multiple tenant renewal options. We have individually assessed all of ~~the assets at the end of~~our Lease Agreements and concluded that the lease term ~~the likelihood a tenant will exercise~~includes all ~~renewal options (in order to determine the lease term), the estimated remaining economic life~~ of the ~~leased assets,~~periods covered by extension options as it is reasonably certain our tenants will renew the ~~incremental borrowing rate~~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 ~~lessee~~Lease Agreements and the ~~interest rate implicit in~~lack of suitable replacement assets.

Income from Leases and Lease Financing Receivables

We recognize 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 and Securities, 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.

We classify our investments in securities on the date of acquisition of the investment as either trading, available-for-sale or held-to-maturity. We classify our debt securities as held-to-maturity, as we have the intent and ability to hold this security until maturity, the accounting of which is materially consistent with that of our Investments in loans.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

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 and securities.

We have elected to use a discounted cash flow model to estimate the allowance for credit losses, or CECL allowance for our Investments in leases - sales-type, Investments in leases - financing receivables and certain of our loans and securities, which comprise the substantial majority of our CECL allowance. This model requires us to develop cash flows which project estimated credit losses over the life of the lease, loan or security 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 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 securities 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 ~~direct financing lease is evaluated~~period in which they are deemed uncollectible. Recoveries previously written off are recorded when received. There were no charge-offs or recoveries for ~~impairment as necessary, if indicators of impairment are present,~~the three and nine months ended September 30, 2023 and 2022.

Refer to ~~determine if there has been an-other-than-temporary decline~~Note 5 - Allowance for Credit Losses for further information.

Foreign Currency Translation and Remeasurement

Our investments in the ~~residual value~~PURE Portfolio and Century Canadian Portfolio (as defined in Note 3 - Real Estate Transactions) are denominated in Canadian Dollars (“CAD” or “C$”), and accordingly, we translate the financial statements of the ~~property~~subsidiaries that own the PURE Portfolio and Century Canadian Portfolio into U.S. Dollars (“USD” or ~~a change in the lessee’s credit worthiness.~~

~~Income Taxes—REIT Qualification~~

~~We intend to elect to be taxed~~“US$”) when we consolidate their financial results 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 ofposition. Generally, assets and ~~activities is a business and to provide more consistency~~liabilities are translated at the exchange rate 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~~the Balance Sheet and ~~anticipate this standard will not have a material effect on our financial statements. We expect~~ the ~~most significant effect will be related to~~resulting translation adjustments are included in Accumulated other comprehensive income in the ~~accounting~~Balance Sheets. Certain balance sheet items, primarily equity and capital-related accounts, are reflected at the historical exchange rate. Income Statement accounts are translated using the average exchange rate for the ~~golf course revenue, which will be immaterial to the operations~~period.

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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.~~PROPERTIES INC. AND VICI PROPERTIES L.P.

~~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.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~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.(UNAUDITED)

~~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 CEOCWe and certain of ~~New CEOC’s~~our consolidated subsidiaries ~~lease~~have intercompany and third-party debt that is denominated CAD, which is not our and our consolidated subsidiaries functional currency of USD. When the ~~transferred real property assets pursuant~~debt and related operating receivables and/or payables are remeasured to the ~~Master Leases. CEC guarantees the payment obligations~~functional currency of the entity, a gain or loss can result. The resulting adjustment is reflected in Other (losses) gains, net in the Statement of Operations.

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 ~~under~~are required to pay all costs associated with such ground and use leases and provides for their direct payment to 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 Planlandlord. This income and the ~~adoption~~related expense are recorded on a gross basis in our Statement of ~~fresh start accounting.~~Operations as required under GAAP as we are the primary obligor under these certain ground and use leases.

Fair Value Measurements

~~VICI PROPERTIES INC.~~

~~NOTES TO BALANCE SHEETS (Continued)~~

~~(UNAUDITED)~~

~~In the application of fresh start accounting, the Company allocates the enterprise value to~~We 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 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,~~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 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 our audited financial statements and notes thereto included in our most recent Annual Report on Form 10-K, 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, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Principles of Consolidation

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Non-controlling Interests

Cash, Cash Equivalents and Restricted Cash

Short-Term Investments

Investments with an original maturity of greater than three months and less than one year from the date of purchase are considered short-term investments and are stated at fair value.

Purchase Price Accounting

We assess all of our property acquisitions under ASC 805 - Business Combinations (“ASC 805”) to determine if such acquisitions should be accounted for as a business combination or an asset acquisition. Under ASC 805, an acquisition does not qualify as a business combination when (i) substantially all of the ~~real estate holdings~~fair value is concentrated in a single identifiable asset or group of ~~VICI REIT (other than those~~similar identifiable assets, (ii) the acquisition does not include a substantive process in the form of ~~Caesars Entertainment Outdoor) are leased~~an acquired workforce, or (iii) an acquired contract that cannot be replaced without significant cost, effort or delay. Generally, and to ~~New CEOC and certain of its subsidiaries, and substantially~~date, all of ~~VICI REIT’s revenues (other than those~~our acquisitions have been determined to be asset acquisitions and, in accordance with ASC 805-50, all applicable transaction costs are capitalized as part of ~~Caesars Entertainment Outdoor) are derived from~~ the ~~underlying leases. Other than VICI REIT having a single tenant from which it derives substantially all~~purchase price of ~~its revenue, management does not believe there are any other significant concentrations~~the acquisition.

We allocate the purchase price to the identifiable assets acquired and liabilities assumed, as applicable, using their relative fair value. Generally, with the exception of ~~credit risk~~

~~Useful Lives of~~the MGP Transactions and the MGM Grand/Mandalay Bay JV Interest Acquisition (each as further described in Note 3 - Real Estate ~~Properties~~Transactions), our acquisitions consist of properties without existing leases or debt and, accordingly, the assets acquired are comprised of land, building and site improvements. Further, since all the components of our leases are classified as sales-type leases or financing receivables, as further described below, the assets acquired are transferred into the net investment in lease or financing receivable, as applicable.

~~Additions~~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 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 lease, depending on the classification of the lease. Since we 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 components of an investment generally have the same lease classification.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

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 component (the “Harrah’s Call Properties”) of the Caesars Regional Master Lease), Century Master Lease (excluding the Century Canadian Portfolio component), Hard Rock Cincinnati Lease, MGM Grand/Mandalay Bay 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 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 Foundation Master Lease, Harrah’s Call Properties components of the Caesars Regional Master Lease, Gold Strike Lease, JACK Master Lease, MGM Master Lease, Mirage Lease, PURE Master Lease and the Century Canadian Portfolio component of the Century 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, such leases 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.

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 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.

Investments in Loans and Securities, net

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Allowance for Credit Losses

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 ~~expense maintenance~~have engaged a nationally recognized data analytics firm to assist us with estimating both the PD and ~~repair costs~~LGD of our tenants and borrowers and their parent guarantors, as ~~incurred. Gains~~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 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 our net Investments in leases - sales-type, Investments in leases - financing receivables, Investments in loans and securities and Sales-type sub-leases (included in Other assets) on our Balance Sheet. We are required to update our CECL allowance on a quarterly basis with the ~~dispositions of property and equipment are recognized~~resulting change being recorded in the ~~period~~Statement of ~~disposal.~~Operations for the relevant period. Finally, each time we make a new investment in an asset subject to ASC 326, we are required to record an initial CECL allowance for such asset, which will result in a non-cash charge to the Statement of Operations for the relevant period.

~~Depreciation~~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 ~~straight-line method over~~same methodology as the ~~shorter~~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.

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, 2023 and 2022.

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

Foreign Currency Translation and Remeasurement



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

~~Long-Lived Assets~~

~~We have significant capital invested in our long-lived assets, and judgments are made in determining~~“US$”) when we consolidate their estimated useful lives and salvage values and if or when an asset (or asset group) has been impaired. The accuracy of these estimates affects the amount of depreciation and amortization expense recognized in our financial results and ~~whether we~~position. Generally, assets and liabilities are translated at the exchange rate in effect at the date of the Balance Sheet and the resulting translation adjustments are included in Accumulated other comprehensive income in the Balance Sheets. Certain balance sheet items, primarily equity and capital-related accounts, are reflected at the historical exchange rate. Income Statement accounts are translated using the average exchange rate for the period.

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

We and certain of our consolidated subsidiaries have intercompany and third-party debt that is denominated CAD, which is not our and our consolidated subsidiaries functional currency of USD. When the debt and related operating receivables and/or payables are remeasured to the functional currency of the entity, a gain or loss can result. The resulting adjustment is reflected in Other (losses) gains, net in the Statement of Operations.

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 payment to the landlord. This income and the related expense are recorded on a gross basis in our Statement of Operations as required under GAAP as we are the primary obligor under these certain ground and use leases.

Fair Value Measurements

We measure the fair value of 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 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 accounting for changes in the fair value of derivatives depends on the ~~disposal of an asset. We assign lives to our assets based on our standard policy, which is established by management as representative~~intended use of the ~~useful life~~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 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 ~~category of asset.~~

~~We monitor events~~hedging relationship is expected to be, and ~~circumstances that could indicate that the carrying amount of our real estate investments may not be recoverable or realized. When events or~~has been, highly effective in offsetting changes in ~~circumstances indicate~~the value or cash flows of the hedged transactions. If it is determined that a ~~potential impairment has occurred or that~~derivative is not highly effective at hedging the

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

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

~~(UNAUDITED)~~

~~carrying value of a real estate investment may not be recoverable, we use an estimate of~~ designated exposure, hedge accounting is discontinued and 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 carryingchanges in fair value of the ~~assets, we recognize an impairment charge equivalent to~~instrument are included in Net income prospectively. If the ~~amount required to reduce~~hedge relationship is terminated, then the ~~carrying~~ value of the ~~asset to its estimated~~derivative previously recorded in Accumulated other comprehensive income (loss) is recognized in earnings when the hedged transactions affect earnings. Changes in the fair ~~value. We group~~value of our ~~real estate investments together by property, the lowest level for which identifiable~~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 are available, in evaluating impairment. In assessing the recoverability of the carrying value, we make assumptions regarding future cash flows and other factors. Factors considered 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, we may be required to record an impairment loss. Changes in these assumptions and estimates could have a material impacthedges within Other comprehensive income on ~~the analysis and the Combined~~our Statement of ~~Investments~~Operations.

We use derivative instruments to mitigate the effects of ~~Real Estate Assets.~~

~~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~~interest rate volatility, whether from ~~bankruptcy on October 6, 2017~~variable rate debt or future forecasted transactions, which could unfavorably impact our future earnings and ~~in connection with the restructuring, contributed to VICI REIT land and buildings with a book value of approximately $4.8 billion, net of accumulated depreciation.~~

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

~~The Company completed its subsequent events review through November 13, 2017, the date on which the Financial Statements were available to be issued, and noted no further items requiring disclosure.~~

~~CAESARS ENTERTAINMENT OUTDOOR~~

~~(DEBTOR-IN-POSSESSION)~~

~~COMBINED CONDENSED BALANCE SHEETS~~

~~(AMOUNTS IN THOUSANDS)~~

~~(UNAUDITED)~~

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

~~See accompanying Notes to Combined Condensed Financial Statements.~~

~~CAESARS ENTERTAINMENT OUTDOOR~~

~~(DEBTOR-IN-POSSESSION)~~

~~COMBINED CONDENSED STATEMENT OF OPERATIONS~~

~~(AMOUNTS IN THOUSANDS)~~

~~(UNAUDITED)~~

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 $ —
$ —
$ —
$ —

~~See accompanying Notes to Combined Condensed Financial Statements.~~

~~CAESARS ENTERTAINMENT OUTDOOR~~

~~(DEBTOR-IN-POSSESSION)~~

~~COMBINED CONDENSED STATEMENTS OF EQUITY~~

~~(AMOUNTS IN THOUSANDS)~~

~~(UNAUDITED)~~

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

~~See accompanying Notes to Combined Condensed Financial Statements.~~

~~CAESARS ENTERTAINMENT OUTDOOR~~

~~(DEBTOR-IN-POSSESSION)~~

~~COMBINED CONDENSED STATEMENTS OF CASH FLOWS~~

~~(AMOUNTS IN THOUSANDS)~~

~~(UNAUDITED)~~

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 —
—

~~See accompanying Notes to Combined Condensed Financial Statements.~~

~~CAESARS ENTERTAINMENT OUTDOOR~~

~~(DEBTOR-IN-POSSESSION)~~

~~NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

In these notes, the words “Caesars Entertainment Outdoor,” “Business,” “Outdoor Business,” “we,” “our,” and “us” refer to the business and operation of the golf courses listed in Note 1 that are wholly-owned by Caesars Entertainment Operating Company, Inc.

“CEOC” refers to the Caesars Entertainment Operating Company, Inc. “CEC”, “Caesars” and “Caesars Entertainment” refer to Caesars Entertainment Corporation. 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.

forecasted cash flows. We also refer to (i) our Combined Condensed Financial Statements as our “Financial Statements,” (ii) our Combined Condensed Statements of Operations as our “Statements of Operations,” and (iii) our Combined Condensed Balance Sheets as our “Balance Sheets.”

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

~~Organization~~

Prior to the Emergence Date, the Outdoor Business was a wholly-owned business of CEOC, and included the operations of the Cascata golf course in Boulder City, Nevada, the Rio Secco golf course in Henderson, Nevada, the Grand Bear golf course in Biloxi, Mississippi, and the Chariot Run golf course in Elizabeth, Indiana. Caesars Entertainment Golf, Inc., Rio Development Company, Inc., Grand Casinos of Biloxi, LLC, and Riverboat Casino, LLC, directly owned these golf courses, respectively, and were debtor-in-possession subsidiaries of CEOC.

~~The golf courses generate revenue through fees charged~~ do not use derivative instruments for ~~general golf course usage (including green fees, golf club rentals, and cart charges), annual~~speculative or ~~corporate memberships (at Rio Secco, Grand Bear and Chariot Run), a school of golf (at Rio Secco), and food, beverage, and merchandise sales.~~trading purposes.

~~Bankruptcy~~

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. Because each of the four golf courses were owned by Caesars Debtor entities, the Outdoor Business was also considered a debtor-in-possession prior to the Emergence Date. CEOC’s plan of reorganization (the “Plan”) was confirmed by the Bankruptcy Court on January 17, 2017.

~~On the~~ ~~Emergence Date, subsidiaries of CEOC transferred the ownership of the Business to VICI REIT. Following emergence, VICI REIT is a separate entity initially owned by certain former creditors of CEOC.~~

Basis of Presentation

The accompanying ~~Interim~~ Financial Statements have been prepared ~~under~~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 ~~applicable~~(“SEC”). The Financial Statements, including the notes thereto, are unaudited and condense or exclude some of ~~interim periods,~~the disclosures and ~~therefore, do not include all~~ 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 ~~footnotes~~related notes should be read in conjunction with our audited financial statements and notes thereto included in our most recent Annual Report on Form 10-K, as updated from time to time in our other filings with the SEC.

All adjustments (consisting of normal recurring accruals) considered necessary for ~~complete~~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 ~~accounting principles generally accepted in~~GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the United States (“US GAAP”). The results for the interim periods reflect all adjustments (consisting of normal recurring adjustments) that management considers necessary for a fair presentation of statement of financial position, results of operations, and cash flows. The results of operations for our interim periods are not necessarily indicative of the results of operations that may be achieved for the entire 2017 fiscal year.

The Business’ Financial Statements were derived from the financial statements of CEOC, prepared on a “carve-out” basis, to present the financial position and results of operations of the Outdoor Business on a stand-alone basis. The legal entities that own the Grand Bear and the Chariot Run golf courses also include non-golf course operations that are excluded from these carve-out financial statements.

~~CAESARS ENTERTAINMENT OUTDOOR~~

~~(DEBTOR-IN-POSSESSION)~~

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

~~(UNAUDITED)~~

~~The Financial Statements include allocations of certain revenue~~reported amounts and general corporate expenses among affiliated entities. Such allocated revenue and expenses may not reflect the results we would have incurred if we had operated as a stand-alone company nor are they necessarily indicative of our future results.

~~Management believes the assumptions and methodologies used in the allocation of these revenues and expenses are reasonable.~~

~~Each of the golf courses represents a separate operating segment and we aggregate all such operations into one reportable segment.~~

~~The Business’ Financial Statements reflect the application of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852,~~ ~~Reorganizations~~. This guidance requires that transactions and events directly associated with the reorganization be distinguished from the ongoing operations of the business. In addition, the guidance provides for changes in the accounting and presentation of liabilities.

~~Golf Revenue~~

Golf revenue from CEOC and Caesars’ affiliates includes reimbursement for below market-rate golf tee times and free play for certain casino guests. Included in golf revenue are market-rate fees received from public customers as well as discounted fees received from CEOC and Caesars-affiliated customers or associates. In addition, certain VIP casino guests play the golf courses for free. In these cases, the golf course receives amounts paid by CEOC and Caesars’ affiliates at an agreed upon rate for the free play provided to their VIP guests. The reimbursement for free play was approximately $150,000 and $91,000 for the three months ended September 30, 2017 and 2016, respectively, and $603,000 and $458,000 for the nine months ended September 30, 2017 and 2016, respectively.

There are additional variable golf fees provided by CEOC and Caesars’ affiliates based on revenue shortfalls necessary to cover the cost of operating the courses at a high level appropriate for casino guests. The variable fee is dependent upon the number of rounds played, the types of rounds played (market-rate or discounted rate), and costs incurred to allow the golf course to continue to offer golf as an amenity to gaming customers of CEOC and Caesars’ affiliates. Variable golf fees included in golf revenue were approximately $2,695,000 and $2,076,000 for the three months ended September 30, 2017 and 2016, respectively, and $4,570,000 and $4,068,000 for the nine months ended September 30, 2017 and 2016, respectively.

~~Subsequent Events~~

~~On the~~ ~~Emergence Date~~, subsidiaries of VICI Golf LLC, a subsidiary of the VICI REIT, 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 annual membership fee, use fees and minimum round fees are subject to an annual escalator beginning at the times provided under the Golf Course Use Agreement.

~~The Business completed its subsequent events review through November 13, 2017, the date on which the Financial Statements were available to be issued, and noted no further items requiring disclosure.~~

~~CAESARS ENTERTAINMENT OUTDOOR~~

~~(DEBTOR-IN-POSSESSION)~~

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

~~(UNAUDITED)~~

~~Note 2 — Recently Issued Accounting Pronouncements~~

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

~~Business Combinations - January 2017~~: Updated amendments intend to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisition (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~~liabilities and ~~to provide more consistency in applying~~ the ~~guidance, reduce the costs~~disclosure of application, and make the definition of a business more operable. 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 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 financialcontingent 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 Recognition - May 2014 (amended January 2017)~~: This 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 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 recognizedliabilities at the date of ~~initial application. We anticipate adopting this standard effective January 1, 2018. We have performed a preliminary assessment~~the financial statements and ~~anticipate this standard will not have a material effect on our financial statements.~~the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from these estimates.

~~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 effect the adoption of this standard will have on our financial statements.

~~Statement of Cash Flows - August 2016~~: Amended guidance 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.

~~CAESARS ENTERTAINMENT OUTDOOR~~

~~(DEBTOR-IN-POSSESSION)~~

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

~~(UNAUDITED)~~

~~Note 3 — Property and Equipment~~

(In thousands)
September 30, 2017 December 31, 2016
Land and non-depreciable land improvements $ 35,525
$ 35,525
Depreciable land improvements 40,183
40,174
Buildings and improvements 35,153
35,133
Furniture and equipment (including capital leases) 4,833
5,445
Construction in progress 1,826
—
Total property and equipment 117,520
116,277
Less: accumulated depreciation (29,173 ) (27,446 )
Total property and equipment, net $ 88,347
$ 88,831

(In thousands)
Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2017 2016 2017 2016
Depreciation expense (including capital lease amortization) $ 801
$ 776
$ 2,402
$ 2,227

~~Note 4 — Accrued Expenses~~

(In thousands)
September 30, 2017 December 31, 2016
Accrued utilities $ 197
$ 87
Payroll and other compensation 158
228
Accrued real estate taxes and other taxes 158
130
Advance deposits 117
112
Accrued legal and professional fees 80
23
Deferred revenue 51
125
Other accruals 8
—
Total accrued expenses $ 769
$ 705

~~Note 5 — Liabilities Subject to Compromise~~

On March 25, 2015, the Bankruptcy Court entered an order establishing May 26, 2015 as the bar date for potential general creditors to file proofs of claims and established the required procedures with respect to filing such claims. A bar date is the deadline by which creditors must file a proof of claim against the Caesars Debtors for the claim to be allowed. In addition, a bar date of July 14, 2015 was established as a deadline for claims from governmental units.

As of September 30, 2017, the Business had received 55 proofs of claim, a portion of which assert, in part or in whole, unliquidated claims. These proofs of claims include 9 claims that were carved out of the legal entities that own the Business and that have additional claims, which do not correspond to the Business. In addition, the Business has been assigned by the court an additional 13 claims. In the aggregate, total asserted liquidated proofs of claim for approximately $122.2 million had been filed against or assigned to the Business. Based on reasonable current estimates, the Business expects to ask the Bankruptcy Court to disallow 19 claims representing approximately $116.3 million of such claims. These claims are classified by the Business as amended and replaced, duplicate, redundant or non-Caesars Debtor claims.

~~As of September 30, 2017 and December 31, 2016, liabilities subject to compromise was approximately $249,000 and $265,000, respectively, and consisted of accounts payable-related liabilities.~~

~~CAESARS ENTERTAINMENT OUTDOOR~~

~~(DEBTOR-IN-POSSESSION)~~

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

~~(UNAUDITED)~~

On October 6, 2017, the Business settled claims included in liabilities subject to compromise for $125,000 recognizing a reorganization gain of $124,000. In addition, approximately $5.1 million of claims are still disputed and unresolved and have been transferred to New CEOC for final resolution.

~~Note 6 — Income Taxes~~

Since Caesars Entertainment Outdoors does not have a formal tax sharing agreement in place with Caesars Entertainment for Federal income tax purposes, Caesars Entertainment pays all of Caesars Entertainment Outdoors’ Federal income taxes.

~~As there was no pre-tax book income/loss recorded~~Operating results for the three and nine months ended September 30, ~~2017~~2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Principles of Consolidation

The accompanying consolidated financial statements include our accounts and ~~2016,~~the accounts of VICI 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 variable interest entities for which we or one of 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

Cash, Cash Equivalents and Restricted Cash

Short-Term Investments

Investments with an original maturity of greater than three months and less than one year from the date of purchase are considered short-term investments and are stated at fair value.

Purchase Price Accounting

We allocate the purchase price to the identifiable assets acquired and liabilities assumed, as applicable, using their relative fair value. Generally, with the exception of the MGP Transactions and the MGM Grand/Mandalay Bay JV Interest Acquisition (each as further described in Note 3 - Real Estate Transactions), our acquisitions consist of properties without existing leases or debt and, accordingly, the assets acquired are comprised of land, building and site improvements. Further, since all the components of our leases are classified as sales-type leases or financing receivables, as further described below, the assets acquired are transferred into the net investment in lease or financing receivable, as applicable.

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 direct financing, sales-type or operating lease. As required by ASC 842, we separately assess the land and 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 the rate implicit in the lease. Any difference between the fair value of 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 lease, depending on the classification of the lease. Since we 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 components of an investment generally have the same lease classification.

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Investments in Leases - Financing Receivables, Net

Lease Term

Income from Leases and Lease Financing Receivables

Investments in Loans and Securities, net

Table of Contents

VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Allowance for Credit Losses

The CECL allowance is recorded as a reduction to our net Investments in leases - sales-type, Investments in leases - financing receivables, Investments in loans and securities and Sales-type sub-leases (included in Other assets) on our Balance Sheet. We are required to update our CECL allowance on a quarterly basis with the resulting change being recorded in the Statement of Operations for the relevant period. Finally, each time we make a new investment in an asset subject to ASC 326, we are required to record an 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 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.

Foreign Currency Translation and Remeasurement

Our investments in the PURE Portfolio and Century Canadian Portfolio (as defined in Note 3 - Real Estate Transactions) are denominated in Canadian Dollars (“CAD” or “C$”), and accordingly, we translate the financial statements of the subsidiaries that own the PURE Portfolio and Century Canadian Portfolio into U.S. Dollars (“USD” or “US$”) when we consolidate their financial results and position. Generally, assets and liabilities are translated at the exchange rate in effect at the date of the Balance Sheet and the resulting translation adjustments are included in Accumulated other comprehensive income ~~tax benefit/~~in the Balance Sheets. Certain balance sheet items, primarily equity and capital-related accounts, are reflected at the historical exchange rate. Income Statement accounts are translated using the average exchange rate for the period.

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Other Income and Other Expenses

Fair Value Measurements

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 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 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 derivative is not highly effective at hedging the designated exposure, hedge accounting 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 interest rate volatility, whether from variable rate debt or future forecasted transactions, which could unfavorably impact our future earnings and forecasted cash flows. We do not use derivative instruments for speculative or trading purposes.

Concentrations of Credit Risk

Caesars and MGM are the guarantors of all the lease payment obligations of the tenants under the applicable leases of the properties that they each respectively lease from us. Revenue from the Caesars Leases represented 37% of our lease revenues for each of the three and nine months ended September 30, 2023 and 39% and 49% of our lease revenues for the three and nine months ended September 30, 2022, respectively. Revenue from the MGM Leases represented 39% of our lease revenues for each of the three and nine months ended September 30, 2023 and 43% and 30% of our lease revenues for the three and nine months ended September 30, 2022, respectively. Additionally, our properties on the Las Vegas Strip generated approximately

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49% of our lease revenues for each of the three and nine months ended September 30, 2023, and 47% and 45% of our lease revenues for the three and nine months ended September 30, 2022, respectively. Other than having two tenants from which we derive and will continue to derive a substantial portion of our revenue and our concentration in the Las Vegas market, we do not believe there are any other significant concentrations of credit risk.

Note 3 — Real Estate Transactions

2023 Activity

Property Acquisitions

Bowlero Transaction

Subsequent to quarter-end, on October 19, 2023, we entered the family entertainment sector by acquiring the real estate assets of 38 bowling entertainment centers (the “Bowlero Portfolio”) from Bowlero in a sale-leaseback transaction for an aggregate purchase price of $432.9 million (the “Bowlero Transaction”). We financed the Bowlero Transaction through a combination of units in a newly formed VICI subsidiary issued to Bowlero, cash on hand, and a portion of proceeds from the settlement of the remaining shares under the January 2023 Forward Sale Agreements (as defined in Note 11 - Stockholders ’ Equity). Simultaneous with the closing of the Bowlero Transaction, we entered into a triple-net master lease agreement with Bowlero (the “Bowlero Master Lease”). The Bowlero Master Lease has an initial total annual rent of $31.6 million and an initial term of 25 years, with six 5-year tenant renewal options. Rent under the Bowlero Master Lease will escalate at the greater of 2.0% or CPI (subject to a 2.5% ceiling). The tenant’s obligations under the lease are guaranteed by Bowlero. Additionally, the Bowlero Master Lease contains a right of first offer provision under which, for a term of eight years, we have the right to acquire the real estate assets of any current or future Bowlero properties in the event that Bowlero elects to enter into a sale-leaseback transaction.

Century Canadian Portfolio Transaction

On September 6, 2023, we closed on the previously announced acquisition of the Century Canadian Portfolio from Century Casinos for an aggregate purchase price of C$221.7 million (approximately US$162.5 million based on the exchange rate at the time of the acquisition) (the “Century Canadian Portfolio Transaction”). We financed the Century Canadian Portfolio Transaction with a combination of cash on hand, proceeds from the partial settlement of forward equity sale agreements and a C$75.0 million (approximately US$55.0 million based on the exchange rate at the time of the acquisition) draw under our Revolving Credit Facility. Simultaneous with the closing of the transaction, the Century Canadian Portfolio was added to the Century Master Lease and annual rent increased by C$17.3 million (approximately US$12.7 million based on the exchange rate at the time of the acquisition). Additionally, the term of the Century Master Lease was extended such that, upon closing of the transaction, the lease has a full 15-year initial base lease term, with three 5-year tenant renewal options. Century Casinos previously exercised one 5-year tenant renewal option. The tenants’ obligations under the Century Master Lease continue to be guaranteed by Century Casinos.

We determined that the Century Canadian Portfolio component of the Century Master Lease meets the definition of a separate contract under ASC 842. In accordance with this guidance, we are required to separately assess the lease classification apart from the other assets in the Century Master Lease. Accordingly, we determined that the Century Canadian Portfolio Transaction should be accounted for as an asset acquisition under ASC 805-50 and further, that the land and building components of the Century Canadian Portfolio under the Century Master Lease meet the definition of a sales-type lease. Since we purchased and leased the assets back to the seller under a sale leaseback transaction, control is not considered to have transferred to us under GAAP. Accordingly, the Century Canadian Portfolio under the Century Master Lease is accounted for as Investments in leases – financing receivables on our Balance Sheet, net of an initial allowance for estimated credit losses in the amount of $16.9 million.

Rocky Gap Casino Transaction

On July 25, 2023, we closed on the previously announced acquisition of the leasehold interest in the land and buildings associated with Rocky Gap Casino Resort, located in Flintstone, Maryland (“Rocky Gap Casino”) with Century Casinos, from Golden Entertainment, Inc. for an aggregate purchase price of $260.0 million (the “Rocky Gap Casino Transaction”). Pursuant to the transaction agreements, we acquired the leasehold interest in the land and buildings associated with the Rocky Gap Casino for approximately $203.9 million and Century Casinos acquired the operating assets of the property for approximately

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$56.1 million. Simultaneous with the closing of the transaction, the Century Master Lease was amended to include Rocky Gap Casino, and annual rent under the Century Master Lease increased by $15.5 million. Additionally, the term of the Century Master Lease was extended such that, upon closing of the transaction, the lease has a full 15-year initial base lease term remaining. Century Casinos previously exercised one 5-year tenant renewal option and three additional 5-year tenant renewal options are remaining. The tenants’ obligations under the Century Master Lease continue to be guaranteed by Century Casinos.

We determined that the Rocky Gap Casino component of the Century Master Lease meets the definition of a separate contract under ASC 842. In accordance with this guidance, we are required to separately assess the lease classification apart from the other assets in the Century Maser Lease. We determined that the Rocky Gap Casino Transaction should be accounted for as an asset acquisition under ASC 805-50 and further, that the land and building components of Rocky Gap Casino under the Century Master Lease meet the definition of a sales-type lease and accordingly is accounted for as Investments in leases – sales-type on our Balance Sheet, net of an initial allowance for estimated credit losses in the amount of $15.0 million.

MGM Grand/Mandalay Bay JV Interest Acquisition

On January 9, 2023, we closed on the previously announced acquisition of the remaining 49.9% interest in the MGM Grand/Mandalay Bay JV from Blackstone Real Estate Income Trust, Inc. (“BREIT”) for cash consideration of $1,261.9 million (the “MGM Grand/Mandalay Bay JV Interest Acquisition”). We also assumed BREIT’s $1,497.0 million pro rata share of an aggregate $3.0 billion of property-level debt, which matures in 2032 and bears interest at a fixed rate of 3.558% per annum through March 2030. The cash consideration was funded through a combination of cash on hand and proceeds from the settlement of certain forward sale agreements. The MGM Grand/Mandalay Bay Lease currently has an annual rent of $309.9 million, all of which we are entitled to following the closing of the MGM Grand/Mandalay Bay JV Interest Acquisition. The MGM Grand/Mandalay Bay Lease has a remaining initial lease term of approximately 27 years (expiring in 2050), with two ten-year tenant renewal options. Rent under the MGM Grand/Mandalay Bay Lease escalates annually at 2.0% through 2035 (year 15 of the initial lease term) and thereafter at the greater of 2.0% or the Consumer Price Index (“CPI”) (subject to a 3.0% ceiling). As of December 31, 2022, the MGM Grand/Mandalay Bay JV was accounted for as an equity method investment under the voting interest model within Investment in unconsolidated affiliate on our Balance Sheets.

Simultaneously with closing of the MGM Grand/Mandalay Bay JV Interest Acquisition, as a result of acquiring full ownership, we consolidated the joint venture and determined that the consolidation should be accounted for as an asset acquisition under ASC 805-50. In application of the asset acquisition guidance, we retained the prior cost basis of our 50.1% interest, which we previously acquired in connection with the MGP Transaction, and combined such basis to the purchase price of the MGM Grand/Mandalay Bay JV Interest Acquisition.

The following is a summary of our net assets acquired upon consolidation of the MGM Grand/Mandalay Bay JV:


(In thousands)	Amount
Carrying value of prior 50.1% interest acquired in connection with the MGP Transactions	$	1,458,782
Consideration paid for MGM Grand/Mandalay Bay JV Interest Acquisition	1,261,882
Transaction costs	14,630
Total net assets acquired	$	2,735,294

Under ASC 805-50, we allocated the net assets acquired by major categories of assets acquired and liabilities assumed using relative fair value. The following is a summary of the allocated relative fair values of the assets acquired and liabilities assumed in the consolidation of the MGM Grand/Mandalay Bay JV:


(In thousands)	Amount
Investments in leases – sales-type	$	5,494,351
Cash and cash equivalents (1)	9,607
Debt, net (2)	(2,747,877)
Accrued expenses and deferred revenue (1)	(20,787)
Total net assets acquired	$	2,735,294

____________________

(1) Amount represents their current carrying value, which is equal to fair value.

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(2) Amount represents the fair value of the $3.0 billion principal amount of CMBS debt as of January 9, 2023, which was estimated as a $252.1 million discount to principal value. The fair value of the debt was estimated by modeling the contractual cash flows and discounting them back to the present value using an estimated market yield. Additionally, we considered current market rates and conditions by evaluating similar borrowing agreements with comparable loan-to-value ratios and credit profiles. The inputs used in determining the fair value measurement are considered Level 3 of the fair value hierarchy.

Concurrent with the closing of the MGM Grand/Mandalay Bay JV Interest Acquisition and consolidation of the MGM Grand/Mandalay Bay Lease, we assessed the lease classification of the MGM Grand/Mandalay Bay Lease and determined that it met the definition of a sales-type lease. Accordingly, the relative fair value of the MGM Grand/Mandalay Bay Lease of $5.5 billion was recorded as an Investment in leases – sales-type on our Balance Sheet, net of an initial allowance for ~~those~~estimated credit losses in the amount of $210.0 million.

PURE Canadian Gaming Transaction

On January 6, 2023, we acquired the real estate assets of PURE Casino Edmonton, PURE Casino Yellowhead, PURE Casino Calgary, and PURE Casino Lethbridge, all of which are located in Alberta, Canada, from PURE Canadian Gaming for an aggregate purchase price in cash of approximately C$271.9 million (approximately US$200.8 million based on the exchange rate at the time of the acquisition) (the “PURE Canadian Gaming Transaction”). We financed the PURE Canadian Gaming Transaction with a combination of cash on hand and a C$140.0 million (approximately US$103.4 million based on the exchange rate at the time of the acquisition) draw under our Revolving Credit Facility. Simultaneous with the acquisition, we entered into the PURE Master Lease. The PURE Master Lease has an initial total annual rent of approximately C$21.8 million (approximately US$16.1 million based on the exchange rate at the time of the acquisition), an initial term of 25 years, with four 5-year tenant renewal options, escalation of 1.25% per annum in lease years two and three (and thereafter at the greater of 1.5% and the Canadian Consumer Price Index, capped at 2.5%) and minimum capital expenditure requirements of 1.0% of annual net revenue (excluding gaming equipment). The tenant’s obligations under the PURE Master Lease are guaranteed by the parent entity of PURE Canadian Gaming. We determined that the PURE Canadian Gaming Transaction should be accounted for as an asset acquisition under ASC 805-50 and further, that the land and building components of the PURE Master Lease meet the definition of a sales-type lease. Since we purchased and leased the assets back to the seller under a sale leaseback transaction, control is not considered to have transferred to us under GAAP. Accordingly, the PURE Master Lease is accounted for as Investments in leases – financing receivables on our Balance Sheet, net of an initial allowance for estimated credit losses in the amount of $19.6 million.

Leasing

Gold Strike Severance Lease

On February 15, 2023, in connection with the closing of MGM’s sale of the operations of Gold Strike, we entered into the Gold Strike Lease with CNB related to the land and real estate assets of Gold Strike, and entered into an amendment to the MGM Master Lease in order to account for MGM’s divestiture of the operations of Gold Strike and to reduce the annual base rent by $40.0 million. The Gold Strike Lease has initial annual base rent of $40.0 million with other economic terms substantially similar to the MGM Master Lease, including a base term of 25 years with three 10-year tenant renewal options, escalation of 2.0% per annum (with escalation of the greater of 2.0% and CPI, capped at 3.0%, beginning in lease year 11) and minimum capital expenditure requirements of 1.0% of annual net revenue. The tenant’s obligations under the Gold Strike Lease are guaranteed by CNB.

Loan, Security and Preferred Equity Investments

Canyon Ranch Transactions

On August 22, 2023, we closed on the previously announced $140.1 million mortgage loan to a subsidiary of Canyon Ranch, a leading provider of holistic, integrative health and wellness guest experiences (“Canyon Ranch”), secured by Canyon Ranch Tucson, located in Tucson, Arizona (“Canyon Ranch Tucson”), and Canyon Ranch Lenox, located in Lenox, Massachusetts (“Canyon Ranch Lenox”). Proceeds of the loan were used by Canyon Ranch to refinance its existing CMBS debt secured by Canyon Ranch Tucson and Canyon Ranch Lenox. The loan has an initial term of two years with three one-year extensions, exercisable at Canyon Ranch’s option, subject to satisfying certain customary extension conditions.

On July 26, 2023, we committed up to $150.0 million in a preferred equity investment into the controlling entity of Canyon Ranch. The preferred equity has a term of 10 years and may be redeemed by Canyon Ranch at any time, subject to a redemption premium in the first three years. In connection with this investment, we entered into (i) a call right agreement whereby we will have the option to call the real estate assets of each of Canyon Ranch Tucson and Canyon Ranch Lenox subject to certain

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conditions, and (ii) a right of first financing agreement pursuant to which we will have the right, but not the obligation, to serve as the real estate capital financing partner for Canyon Ranch with respect to the acquisition, build-out and redevelopment of future wellness resorts. If the call right(s) are exercised, Canyon Ranch would continue to operate the applicable wellness resort(s) subject to a long-term triple net master lease with the Company. We assessed the Canyon Ranch preferred equity investment and determined that such investment is accounted for as a loan, and accordingly, is recorded in Investments in loans and securities on our Balance Sheet.

Hard Rock Ottawa Secured Notes

On March 28, 2023, we purchased $85.0 million of senior secured notes issued by H.R. Ottawa, L.P. (“Hard Rock Ottawa Notes”), which owns and operates the Hard Rock Ottawa Casino. H.R. Ottawa, L.P. intends to use the proceeds of the Hard Rock Ottawa Notes to fund a portion of (i) the redevelopment and rebrand of the existing Rideau Carleton Raceway Casino, located in Ottawa, Canada, (ii) the development of an integrated “Hard Rock” branded hotel with approximately 150 rooms, and (iii) the repayment of existing debt. The Hard Rock Ottawa Notes are denominated and issued in USD.

Significant 2022 Transactions

MGP Transactions

On April 29, 2022, we closed on the previously announced MGP Transactions governed by the MGP Master Transaction Agreement, pursuant to which we acquired MGP for total consideration of $11.6 billion, plus the assumption of approximately $5.7 billion principal amount of debt, inclusive of a 50.1% share of the MGM Grand/Mandalay Bay JV CMBS debt, at the time. Upon closing, the MGP Transactions added $1,012.2 million of annualized rent to our portfolio from 15 Class A entertainment casino resort properties spread across nine regions and comprising 36,000 hotel rooms, 3.6 million square feet of meeting and convention space and hundreds of food, beverage and entertainment venues. Under the terms of the MGP Master Transaction Agreement, each outstanding MGP Class A common share was converted into 1.366 (the “Exchange Ratio”) shares of VICI common stock. The fixed Exchange Ratio represented an agreed upon price of $43.00 per share of MGP Class A common shares based on VICI’s trailing 5-day volume weighted average price of $31.47 as of July 30, 2021. MGM received $43.00 per unit in cash for the redemption of the majority of its MGP OP units that it held for total cash consideration of approximately $4.404 billion and also acquired approximately 12.2 million units in VICI OP. The MGP Class B share that was held by MGM was cancelled and ceased to exist simultaneous with closing.

The number of MGP Class A common shares converted to shares of VICI common stock was determined as follows:


MGP Class A 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

____________________

(1) Amount excludes the cash paid in lieu of approximately 54 fractional MGP Class A common shares.

Simultaneous with the closing of the MGP Transactions on April 29, 2022, we entered into the MGM Master Lease. The MGM Master Lease has an initial term of 25 years, with three 10-year tenant renewal options and had an initial total annual rent of $860.0 million. Rent under the MGM Master Lease escalates at a rate of 2.0% per annum for the first 10 years and thereafter at the greater of 2.0% per annum or the increase in CPI, subject to a 3.0% cap. The total annual rent under the MGM Master Lease was reduced by $90.0 million upon the close of MGM’s sale of the operations of the Mirage to Hard Rock and entrance into the Mirage Lease on December 19, 2022, and further reduced by $40.0 million upon the close of MGM’s sale of the operations of Gold Strike on February 15, 2023. Additionally, we retained a 50.1% ownership stake in the MGM Grand/Mandalay Bay JV, which owns the real estate assets of MGM Grand Las Vegas and Mandalay Bay. At the time of acquisition, the MGM Grand/Mandalay Bay Lease provided for total annual base rent of approximately $303.8 million, and had an initial term of thirty years with two 10-year tenant renewal options. Rent under the MGM Grand/Mandalay Bay Lease escalates at a rate of 2.0% per annum for the first 15 years and thereafter at the greater of 2.0% per annum or CPI, subject to a 3.0% cap. On January 9, 2023, we closed on the MGM Grand/Mandalay Bay JV Interest Acquisition and accordingly own 100% of the interest in the MGM Grand/Mandalay Bay JV, including the full $3.0 billion of CMBS debt held by the joint venture.

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We assessed the MGP Transactions in accordance with ASC 805, and determined that the acquisition of MGP did not meet the definition of a business as substantially all the assets were concentrated in a group of similarly identifiable acquired assets, and did not include a substantive process in the form of an acquired workforce. Accordingly, the MGP Transactions were accounted for as an asset acquisition under ASC 805-50 and we determined the consideration transferred under the MGP Transactions was $11.6 billion, comprised of the following:


(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 MGM Grand/Mandalay Bay JV CMBS debt, at principal value	1,503,000
Total purchase price	$	17,259,990

____________________

(1) Amount represents the dollar value of 214,375,990 shares of VICI common stock, multiplied by the VICI stock price at the time of closing of $30.64 per share, which were issued in exchange for the MGP Class A common shares outstanding immediately prior to the REIT Merger and certain of the MGP stock-based compensation awards, converted to shares of VICI common stock.

(2) Amount represents 12,231,373 VICI OP Units retained by MGM as non-controlling interest in VICI OP, multiplied by the VICI stock price at the time of closing of $30.64 per share.

(3) Represents the total amount outstanding under MGP’s revolving credit facility as of April 29, 2022. In connection with the MGP Transactions, such amount was repaid in full and the related credit agreement was terminated.

(4) In accordance with ASC 805-50, all direct and incremental costs related to the MGP Transactions, primarily related to success-based fees and third-party advisory fees, were included in the consideration transferred.

Under ASC 805-50, we allocated the purchase price by major categories of assets acquired and liabilities assumed using relative fair value. The following is a summary of the allocated relative fair values of the assets acquired and liabilities assumed in the MGP Transactions valued as of April 29, 2022:


(In thousands)	Amount
Investments in leases – financing receivables (1) (2)	$	14,245,868
Investment in unconsolidated affiliate (2) (3)	1,465,814
Cash and cash equivalents (4)	25,387
Other assets (4)	338,212
Debt, net (5)	(4,106,082)
Accrued expenses and deferred revenue (4)	(79,482)
Other liabilities (4)	(332,727)
Total net assets acquired	$	11,556,990

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(1) We valued the real estate portfolio at relative fair value using rent multiples taking into consideration a variety of factors, including (i) asset quality and location, (ii) property and lease-level operating performance and (iii) supply and demand dynamics of each property’s respective market. The multiples used ranged from 15.0x – 18.5x with a weighted average rent multiple of 16.7x, as determined using relative fair value.

(2) The fair value of these assets is based on significant “unobservable” market inputs and, as such, these fair value measurements are considered Level 3 of the fair value hierarchy.

(3) We value the Investment in unconsolidated affiliate at relative fair based on our percentage ownership of the net assets of the MGM Grand/Mandalay Bay JV.

(4) Amounts represent their current carrying value which is equal to fair value. The Other assets and Other liabilities amounts include the gross presentation of certain MGP ground leases which we assumed in connection with the MGP Transactions.

(5) Amount represents the fair value of debt as of April 29, 2022, which was estimated as a $93.9 million discount to the notional value. 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.

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Concurrent with the closing of the MGP Transactions and entry into the MGM Master Lease, we assessed the lease classification of the MGM Master Lease and determined that it met the definition of a sales-type lease. Further, since MGM controlled and consolidated MGP prior to the MGP Transactions, the lease was assessed under the sale-leaseback guidance and determined to be a failed sale-leaseback under which the lease is accounted for as a financing receivable under ASC 310.

In relation to the MGM Grand/Mandalay Bay JV, we determined that such investment should be accounted for as an equity method investment and, accordingly, recorded the relative fair value as an Investment in unconsolidated affiliate on our Balance Sheet. The requirement to record our investment in the MGM Grand/Mandalay Bay JV at relative fair value under ASC 805 resulted in a difference in our acquired basis from that of the underlying records, or historical cost basis, of the MGM Grand/Mandalay Bay JV. Accordingly, we compared our proportionate share of the historical cost basis of the MGM Grand/Mandalay Bay JV as of April 29, 2022 to our proportionate share of the relative fair value, the difference of which was amortized through Income from unconsolidated affiliate over the life of the related asset or liability. On January 9, 2023, we acquired the remaining 49.9% interest in the MGM Grand/Mandalay Bay JV from BREIT and consolidated the operations of the joint venture. Refer to “MGM Grand/Mandalay Bay JV Interest Acquisition” above for further details.

Note 4 — Real Estate Portfolio

As of September 30, 2023, our real estate portfolio consisted of the following:

•Investments in leases – sales-type, representing our investment in 26 casino assets leased on a triple-net basis to our tenants, Apollo, Caesars, Century Casinos, EBCI, Hard Rock, MGM and PENN Entertainment under ten separate lease agreements;

•Investments in leases – financing receivables, representing our investment in 28 casino assets leased on a triple-net basis to our tenants, Caesars, CNB, Century Casinos, Foundation Gaming, Hard Rock, JACK Entertainment, MGM and PURE Canadian Gaming under eight separate lease agreements;

•Investments in loans and securities, representing our investments in twelve senior secured and mezzanine loans, preferred equity and the Hard Rock Ottawa Notes; and

•Land, representing our investment in certain underdeveloped or undeveloped land adjacent to the Las Vegas strip and non-operating, vacant land parcels.

The following is a summary of the balances of our real estate portfolio as of September 30, 2023 and December 31, 2022:


(In thousands)	September 30, 2023		December 31, 2022






Investments in leases – sales-type, net (1)	$	22,889,984	$	17,172,325

Investments in leases – financing receivables, net (1)	17,337,665		16,740,770
Total investments in leases, net	40,227,649		33,913,095
Investments in loans and securities, net	973,217		685,793
Investment in unconsolidated affiliate (2)	—		1,460,775
Land	150,727		153,560
Total real estate portfolio	$	41,351,593	$	36,213,223

____________________

(1) At lease inception (or upon modification), we determine the estimated residual values of the leased property (not guaranteed) under the respective Lease Agreements, which has a material impact on the determination of the rate implicit in the lease and the lease classification. As of September 30, 2023 and December 31, 2022, the estimated residual values of the leased properties under our Lease Agreements were $15.7 billion and $11.5 billion, respectively.

(2) Represents our 50.1% investment in the MGM Grand/Mandalay Bay JV prior to the MGM Grand/Mandalay Bay JV Interest Acquisition on January 9, 2023, which was accounted for as an equity method investment.

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Investments in Leases

The following table details the components of our income from sales-type leases and lease financing receivables:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Income from sales-type leases – fixed rent	$	478,419	$	371,541	$	1,410,692	$	1,064,463
Income from sales-type leases – contingent rent (1)	21,793		4,506		63,269		13,489

Income from lease financing receivables – fixed rent	356,206		339,544		1,062,508		653,908
Income from lease financing receivables – contingent rent (1)	2,511		—		7,532		—
Total lease revenue	858,929		715,591		2,544,001		1,731,860
Non-cash adjustment (2)	(131,351)		(108,556)		(383,735)		(230,516)
Total contractual lease revenue	$	727,578	$	607,035	$	2,160,266	$	1,501,344

____________________

(1) At lease inception (or upon modification), we determine the minimum lease payments under ASC 842, which exclude amounts determined to be contingent rent. Contingent rent is generally amounts in excess of specified floors or the variable rent portion of our leases. The minimum lease payments are recognized on an effective interest basis at a constant rate of return over the life of the lease and the contingent rent portion of the lease payments are recognized as earned, both in accordance with ASC 842. As of September 30, 2023, we have recognized contingent rent from our PENN Entertainment Leases in relation to the variable rent portion of the respective leases and from the Caesars Las Vegas Master Lease, Caesars Regional Master Lease, Joliet Lease, Century Master Lease, and Venetian Lease in relation to the CPI portion of the annual escalator.

(2) Amounts represent the non-cash adjustment to the minimum lease payments from sales-type leases and lease financing receivables in order to recognize income on an effective interest basis at a constant rate of return over the term of the leases.

At September 30, 2023, minimum lease payments owed to us for each of the five succeeding years under sales-type leases and our leases accounted for as financing receivables, are as follows:


	Minimum Lease Payments (1) (2)
	Investments in Leases
(In thousands)	Sales-Type		Financing Receivables		Total
2023 (remaining)	$	416,216	$	290,407	$	706,623
2024	1,682,826		1,176,742		2,859,568
2025	1,712,651		1,198,470		2,911,121
2026	1,738,942		1,220,782		2,959,724
2027	1,766,012		1,243,586		3,009,598
2028	1,794,287		1,267,086		3,061,373
Thereafter	77,503,679		87,666,277		165,169,956
Total	$	86,614,613	$	94,063,350	$	180,677,963

Weighted Average Lease Term (2)	38.2 years		49.7 years		43.2 years

____________________

(1) Minimum lease payments do not include contingent rent, as discussed above, that may be received under the Lease Agreements.

(2) The minimum lease payments and weighted average remaining lease term assumes the exercise of all tenant renewal options, consistent with our conclusions under ASC 842 and ASC 310.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Lease Provisions

As of September 30, 2023, we owned 54 properties leased under 16 separate Lease Agreements, certain of which are master lease agreements governing multiple properties and certain of which are for single assets. Our Lease Agreements are generally long-term in nature with initial terms ranging from 15 to 30 years and are structured with several tenant renewal options extending the term of the lease for another 5 to 30 years. All of our Lease Agreements provide for annual base rent escalations, which range from 1% in the earlier years to the greater of 2% or CPI in later years, with certain of our leases providing for a cap with respect to the maximum CPI-based increase. Additionally, certain of our Lease Agreements provide for a variable rent component in which a portion of the annual rent, generally 20%, is subject to adjustment based on the revenues of the underlying asset in specified periods.

The following is a summary of the material lease provisions of our Caesars Leases and MGM Leases, our two most significant tenants:

~~Note 7 — Related Party Transactions~~

($ In thousands)

MGM Master Lease

Caesars Regional Master Lease and Joliet Lease

Caesars Las Vegas
Master Lease

MGM Grand/
Mandalay Bay Lease

Lease Provision

Initial term

25 years

18 years

30 years

Initial term maturity

4/30/2047

7/31/2035

2/28/2050

Renewal terms

Three, ten-year terms

Four, five-year terms

Two, ten-year terms

Current lease year

5/1/23-4/30/24 (Lease Year 2)

11/1/22 – 10/31/23
(Lease Year 6)

3/1/23 – 2/29/24 (Lease Year 4)

Current annual rent

$744,600

$703,678 (1)

$454,478

$309,873

Annual escalator (2)

Lease years 2-10 – 2%

Lease years 11-end of term - >2% / change in CPI (capped at 3%)

Lease years 2-5 – 1.5%

Lease years 6-end of term – CPI subject to 2.0% floor

> 2% / change in CPI

Lease years 2-15 – 2%

Lease years 16-end of term - >2% / change in CPI (capped at 3%)

Variable rent adjustment (3)

None

Year 8: 70% base rent / 30% variable rent

Years 11 & 16: 80% base rent / 20% variable rent

Years 8, 11 & 16: 80% base rent / 20% variable rent

None

Variable rent adjustment calculation

None

4% of revenue increase/decrease:

Year 8: Avg. of years 5-7 less avg. of years 0-2

Year 11: Avg. of years 8-10 less avg. of years 5-7

Year 16: Avg. of years 13-15 less avg. of years 8-10

4% of revenue increase/decrease:

Year 8: Avg. of years 5-7 less avg. of years 0-2

Year 11: Avg. of years 8-10 less avg. of years 5-7

Year 16: Avg. of years 13-15 less avg. of years 8-10

None

____________________

(1) Current annual rent with respect to the Joliet Lease is presented prior to accounting for the non-controlling interest, or rent payable, to the 20% third-party ownership of Harrah’s Joliet LandCo LLC. After adjusting for the 20% non-controlling interest, combined current annual rent under the Caesars Regional Master Lease and Joliet Lease is $694.6 million.

(2) Any amounts representing rents in excess of the CPI floors specified above are considered contingent rent in accordance with GAAP.

(3) Variable rent is not subject to the annual escalator.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Capital Expenditure Requirements

We ~~had transactions~~manage our residual asset risk through protective covenants in our Lease Agreements, which require the tenant to, among other things, hold specific insurance coverage, engage in ongoing maintenance of the property and invest in capital improvements. With respect to the capital improvements, the Lease Agreements specify certain minimum amounts that our tenants must spend on capital expenditures that constitute installation, restoration and repair or other improvements of items with ~~CEOC resulting~~respect to the leased properties. The following table summarizes the capital expenditure requirements of our tenants under their respective Lease Agreements:

Provision

Caesars Regional Master Lease and Joliet Lease

Caesars Las Vegas Master Lease

MGM Grand/ Mandalay Bay Lease

Venetian Lease

All Other Leases (1)

Yearly minimum expenditure

1% of net revenues (2)

3.5% of net revenues based on 5-year rolling test, 1.5% monthly reserves

2% of net revenues based on rolling three-year basis

1% of net revenues

Rolling three-year minimum (3)

$286 million

$84 million

N/A

____________________

(1) Represents the tenants under our other Lease Agreements not specifically outlined in the table, as specified in the respective Lease Agreements.

(2) The Caesars Leases require a $107.5 million floor on annual capital expenditures for Caesars Palace Las Vegas, Joliet and the Regional Master Lease properties in the aggregate. Additionally, annual building & improvement capital improvements must be equal to or greater than 1% of prior year net ~~distributions~~revenues.

(3) Certain tenants under the Caesars Leases, as applicable, are required to spend $380.3 million on capital expenditures (excluding gaming equipment) over a rolling three-year period, with $286.0 million allocated to the regional assets, $84.0 million allocated to Caesars Palace Las Vegas and the remaining balance of ~~approximately $1,148,000~~$10.3 million to facilities (other than the Harrah’s Las Vegas Facility) covered by any Caesars Lease in such proportion as such tenants may elect. Additionally, the tenants under the Regional Master Lease and ~~$1,070,000~~Joliet Lease are required to expend a minimum of $531.9 million on capital expenditures (including gaming equipment) across certain of its affiliates and other assets, together with the $380.3 million requirement.

Investments in Loans and Securities

The following is a summary of our investments in loans and securities as of September 30, 2023 and December 31, 2022:


September 30, 2023
Investment Type	Principal Balance		Carrying Value (1)		Future Funding Commitments (2)		Weighted Average Interest Rate (3)		Weighted Average Term (4)
Senior Secured Notes (5)	$	85,000	$	76,348	$	—	11.0	%	7.5 years
Senior Secured Loans (6)	333,793		329,431		582,262		7.1	%	5.2 years
Mezzanine Loans and Preferred Equity	579,471		567,438		186,037		9.5	%	4.9 years





Total	$	998,264	$	973,217	$	768,299	8.8	%	5.2 years


December 31, 2022
Investment Type	Principal Balance		Carrying Value (1)		Future Funding Commitments (2)		Weighted Average Interest Rate (3)		Weighted Average Term (4)
Senior Secured Loans	$	495,901	$	492,895	$	584,049	7.8	%	3.2 years
Mezzanine Loans	196,597		192,898		514,882		9.1	%	4.3 years



Total	$	692,498	$	685,793	$	1,098,931	8.2	%	3.5 years

____________________

(1) Carrying value includes unamortized loan origination costs and are net of allowance for credit losses.

(2) Our future funding commitments are subject to our borrowers’ compliance with the financial covenants and other applicable provisions of each respective loan agreement.

(3) The weighted average interest rate is based on current outstanding principal balance and SOFR, as applicable for floating rate loans, as of September 30, 2023.

(4) Assumes all extension options are exercised; however, our loans may be repaid, subject to certain conditions, prior to such date.

(5) Represents our investment in the Hard Rock Ottawa Notes, which are accounted for as held-to-maturity securities.

(6) On May 1, 2023, the Forum Convention Center Mortgage Loan, representing $400.0 million in principal balance of our senior secured loans, was repaid in full.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Note 5 — Allowance for Credit Losses

Under ASC 326, we are required to estimate and record non-cash credit losses related to our historical and any future investments in sales-type leases, lease financing receivables, loans and securities classified as held-to-maturity.

During the three months ended September 30, 2023, we recognized a $96.0 million increase in our allowance for credit losses primarily driven by (i) the initial CECL allowances in relation to (a) the Century Canadian Portfolio Transaction and related classification of the Century Canadian Portfolio component of the Century Master Lease as a lease financing receivable, (b) the Rocky Gap Casino Transaction and related classification of the Rocky Gap Casino component of the Century Master Lease as a sales-type lease, and (c) the origination of the Canyon Ranch preferred equity investment and Canyon Ranch Tucson and Canyon Ranch Lenox mortgage loan, and (ii) an increase in the reasonable and supportable period, or R&S Period, probability of default, or PD, of our tenants and their parent guarantors as a result of their market performance during the current quarter.

During the nine months ended September 30, 2023, we recognized a $166.1 million increase in our allowance for credit losses primarily driven by (i) initial CECL allowances in relation to (a) the consolidation of the MGM Grand/Mandalay Bay JV in connection with the MGM Grand/Mandalay Bay JV Interest Acquisition and related classification of the MGM Grand/Mandalay Bay Lease as a sales-type lease, (b) the PURE Canadian Gaming Transaction and related classification of the PURE Master Lease as a lease financing receivable, (c) the purchase of the Hard Rock Ottawa Notes and (d) the initial allowances for the three months ended September 30, 2023 as described in the above paragraph, and (ii) an increase in the Long-Term Period PD as a result of a standard annual update made to the Long-Term PD default study we utilize to estimate our CECL allowance. This increase was partially offset by an overall decrease in the R&S Period PD of our tenants and their parent guarantors as a result of their market performance during the nine-month period.

During the three months ended September 30, 2022, we recognized a $232.8 million increase in our allowance for credit losses primarily driven by (i) changes in the macroeconomic model used to scenario condition our R&S Period PD due to uncertain and potentially negative future market conditions, (ii) an increase in the R&S Period PD of our tenants and their parent guarantors as a result of market volatility during the current quarter, (iii) an increase in the R&S Period PD and loss given default, or LGD, as a result of standard annual updates that were made to the inputs and assumptions in the model that we utilize to estimate our CECL allowance, and (iv) the initial CECL allowance on the future funding commitments from the origination of the Great Wolf Gulf Coast Texas loan and the Great Wolf South Florida loan.

During the nine months ended September 30, 2022, we recognized a $865.5 million increase in our allowance for credit losses primarily driven by initial CECL allowances on our acquisition activity during such period in the amount of $523.2 million, representing 60.5% of the total allowance for the nine months ended September 30, ~~2017 and 2016, respectively.~~2022. The ~~net distributions are~~initial CECL allowances were in relation to (i) the ~~result of cash generated by the operations~~closing of the ~~Business~~MGP Transactions on April 29, 2022, which included the (a) classification of the MGM Master Lease as a lease financing receivable and ~~proceeds~~(b) the sales-type sub-lease agreements we assumed in connection with the closing of the MGP Transactions, (ii) the closing of the Venetian Acquisition on February 23, 2022, which included (a) the classification of the Venetian Lease as a sales-type lease, (b) the estimated future funding commitments under the Partner Property Growth Fund Agreement with the Venetian and (c) the sales-type sub-lease agreements we assumed in connection with the closing of the Venetian Acquisition, and (iii) the future funding commitments from the ~~sale~~origination of ~~assets, partially offset by amounts contributed by CEOC to fund capital improvements~~the BigShots Loan, the Cabot Citrus Farms loan, the Great Wolf South Florida loan and ~~capital lease obligations. These transactions are included as transactions with parent, net in our Combined Statements of Equity.~~

~~Related Party Fees and Expenses~~

~~The following amounts are recorded with respect~~the Great Wolf Gulf Coast Texas Loan. Additional increases were attributable to the ~~related-party transactions described in this section:~~

(In thousands)
Three Months Ended September 30, Nine Months Ended September 30,
Transaction type Recorded as: 2017 2016 2017 2016
Insurance expense Administrative and other $ 12
$ 8
$ 37
$ 30

Allocation of indirect expenses from CEOC and Caesars’ affiliates ⁽¹⁾
Administrative and other 36
58
210
235

Golf revenue from CEOC and Caesars’ affiliates ⁽²⁾
Golf revenue 2,844
2,168
5,173
4,527

Pass-through revenue with CEOC and Caesars’ affiliates ⁽³⁾
Golf revenue 48
111
389
604

Food and beverage revenue 12
14
107
56

Retail and other revenue 26
36
114
119

~~______________~~

⁽¹⁾

The Statements of Operations include allocated overhead costs for certain functions historically performed by CEOC and Caesars’ affiliates, including allocations of direct and indirect operating and maintenance costs and expenses for procurement, logistics and general and administrative costs and expenses related to executive oversight, marketing, information technology, accounting, treasury, tax, and legal. These costs were allocated on the basis of either revenue or payroll expense.


⁽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.

~~Savings and Retirement Plans~~

CEOC maintains a defined contribution savings and retirement plan that allows certain employees of the Business to make pre-tax and after-tax contributions. Under the plan, participating employees may elect to contribute up to 50% of their eligible earnings, subject to IRS rules and regulations, and are eligible to receive a company match of up to $600. Participating employees become vested in matching contributions on a pro-rata basis over five years of credited service. Our contribution expense, included in direct operating expenses and administrative and other expense, was approximately $1,000 and $5,000increase for the three months ended September 30, 2022 as described above. These increases were partially offset by a decrease in the Long-Term Period PD as a result of standard annual updates that were made to the Long-Term Period PD default study we utilize to estimate our CECL allowance.

As of September 30, 2023 and December 31, 2022, and since our formation on October 6, 2017, all of our Lease Agreements and ~~2016,~~loan and security investments are current in payment of their obligations to us and no investments are on non-accrual status.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

The following tables detail the allowance for credit losses as of September 30, 2023 and December 31, 2022:


	September 30, 2023
($ In thousands)	Amortized Cost		Allowance (1)		Net Investment		Allowance as a % of Amortized Cost
Investments in leases – sales-type	$	23,645,385	$	(755,401)	$	22,889,984	3.19	%
Investments in leases – financing receivables	18,044,641		(706,976)		17,337,665		3.92	%
Investments in loans and securities	996,064		(22,847)		973,217		2.29	%
Other assets – sales-type sub-leases	806,178		(19,283)		786,895		2.39	%
Totals	$	43,492,268	$	(1,504,507)	$	41,987,761	3.46	%


	December 31, 2022
($ In thousands)	Amortized Cost		Allowance (1)		Net Investment		Allowance as a % of Amortized Cost
Investments in leases – sales-type	$	17,742,712	$	(570,387)	$	17,172,325	3.21	%
Investments in leases – financing receivables	17,467,477		(726,707)		16,740,770		4.16	%
Investments in loans and securities	692,658		(6,865)		685,793		0.99	%
Other assets – sales-type sub-leases	784,259		(19,750)		764,509		2.52	%
Totals	$	36,687,106	$	(1,323,709)	$	35,363,397	3.61	%

____________________

(1) The total allowance excludes the CECL allowance for unfunded commitments of our senior secured and mezzanine loans and for unfunded commitments of our Partner Property Growth Fund. As of September 30, 2023 and December 31, 2022, such allowance is $30.1 million and $45.1 million, respectively, and ~~$27,000 and $34,000~~is recorded in Other liabilities.

The following chart reflects the roll-forward of the allowance for credit losses on our real estate portfolio for the nine months ended September 30, ~~2017~~2023 and ~~2016, respectively.~~2022:


	Nine Months Ended September 30,
(In thousands)	2023		2022
Beginning Balance December 31,	$	1,368,819	$	534,326

Initial allowance from current period investments	271,642		523,235
Current period change in credit allowance	(105,865)		342,224
Charge-offs	—		—
Recoveries	—		—
Ending Balance September 30,	$	1,534,596	$	1,399,785

Credit Quality Indicators

We assess the credit quality of our investments through the credit ratings of the senior secured debt of the guarantors of our leases, as we believe that our Lease Agreements have a similar credit profile to a senior secured debt instrument. The credit quality indicators are reviewed by us on a quarterly basis as of quarter-end. In instances where the guarantor of one of our Lease Agreements does not have senior secured debt with a credit rating, we use either a comparable proxy company or the overall corporate credit rating, as applicable. We also use this credit rating to determine the Long-Term Period PD when estimating credit losses for each investment.

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~~CAESARS ENTERTAINMENT OUTDOOR~~

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

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

(UNAUDITED)

The following tables detail the amortized cost basis of our investments by the credit quality indicator we assigned to each lease or loan guarantor as of September 30, 2023 and 2022:


	September 30, 2023
(In thousands)	Ba2		Ba3		B1		B2		B3		N/A (2)		Total
Investments in leases – sales-type and financing receivable, Investments in loans and securities and Other assets (1)	$	4,299,350	$	32,877,396	$	3,227,870	$	880,347	$	1,293,816	$	913,489	$	43,492,268


	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 securities and Other assets (1)	$	4,230,599	$	15,624,832	$	14,975,981	$	874,054	$	280,075	$	185,790	$	36,171,331

____________________

(1)Excludes the CECL allowance for unfunded commitments recorded in Other liabilities as such commitments are not currently reflected on our Balance Sheet, rather the CECL allowance is based on our current best estimate of future funding commitments.

(2)We estimate the CECL allowance for our senior secured and mezzanine loans and preferred equity investment using a traditional commercial real estate model based on standardized credit metrics to estimate potential losses.

Note 6 — Other Assets and Other Liabilities

Other Assets

The following table details the components of our other assets as of September 30, 2023 and December 31, 2022:


(In thousands)	September 30, 2023		December 31, 2022
Sales-type sub-leases, net (1)	$	786,895	$	764,509
Property and equipment used in operations, net	66,391		67,209
Right of use assets and sub-lease right of use assets	40,052		45,008
Forward-starting interest rate swaps	20,289		—
Debt financing costs	12,147		18,646
Deferred acquisition costs	11,491		12,834
Tenant receivables	10,710		5,498
Interest receivable	8,783		6,911
Other receivables	8,074		6,474
Prepaid expenses	3,685		7,348
Other	1,155		1,891
Total other assets	$	969,672	$	936,328

(1) As of September 30, 2023 and December 31, 2022, sales-type sub-leases are net of $19.3 million and $19.8 million of allowance for credit losses, respectively. Refer to Note 5 – Allowance for Credit Losses for further details.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

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, 2023 and December 31, 2022:


(In thousands)	September 30, 2023		December 31, 2022
Land and land improvements	$	60,380	$	60,332
Buildings and improvements	15,698		15,125
Furniture and equipment	10,836		9,563
Total property and equipment used in operations	86,914		85,020
Less: accumulated depreciation	(20,523)		(17,811)
Total property and equipment used in operations, net	$	66,391	$	67,209


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Depreciation expense	$	1,011	$	816	$	2,712	$	2,371

Other Liabilities

The following table details the components of our other liabilities as of September 30, 2023 and December 31, 2022:


(In thousands)	September 30, 2023		December 31, 2022
Finance sub-lease liabilities	$	806,178	$	784,259
Deferred financing liabilities	73,600		73,600
Lease liabilities and sub-lease liabilities	40,052		45,039
CECL allowance for unfunded commitments	30,089		45,110
Deferred income taxes	4,279		4,339

Other	250		125
Total other liabilities	$	954,448	$	952,472

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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, 2023 and December 31, 2022:


($ In thousands)	September 30, 2023
Description of Debt	Maturity	Interest Rate	Principal Amount		Carrying Value (1)
Revolving Credit Facility
USD Borrowings (2)	2026	SOFR + 1.05%	$	—	$	—
CAD Borrowings (2) (3)	2026	CDOR + 1.05%	158,348		158,348
MGM Grand/Mandalay Bay CMBS Debt (4)	2032	3.558%	3,000,000		2,767,065
November 2019 Notes (5)
2026 Maturity	2026	4.250%	1,250,000		1,240,965
2029 Maturity	2029	4.625%	1,000,000		990,131
February 2020 Notes (5)
2025 Maturity	2025	3.500%	750,000		746,778
2027 Maturity	2027	3.750%	750,000		744,343
2030 Maturity	2030	4.125%	1,000,000		989,745
April 2022 Notes (5)
2025 Maturity	2025	4.375%	500,000		497,476
2028 Maturity	2028	4.516% (6)	1,250,000		1,238,965
2030 Maturity	2030	4.541% (6)	1,000,000		988,915
2032 Maturity	2032	3.980% (6)	1,500,000		1,482,327
2052 Maturity	2052	5.625%	750,000		735,730
Exchange Notes (5)
2024 Maturity	2024	5.625%	1,024,169		1,026,378
2025 Maturity	2025	4.625%	799,368		788,424
2026 Maturity	2026	4.500%	480,524		466,546
2027 Maturity	2027	5.750%	729,466		736,832
2028 Maturity	2028	4.500%	349,325		338,417
2029 Maturity	2029	3.875%	727,114		668,311
MGP OP Notes (5)
2024 Maturity	2024	5.625%	25,831		25,862
2025 Maturity	2025	4.625%	632		620
2026 Maturity	2026	4.500%	19,476		18,729
2027 Maturity	2027	5.750%	20,534		20,523
2028 Maturity	2028	4.500%	675		644
2029 Maturity	2029	3.875%	22,886		20,654
Total Debt		4.349% (7)	$	17,108,348	$	16,692,728

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)


($ In thousands)	December 31, 2022
Description of Debt	Maturity	Interest Rate	Principal Amount		Carrying Value (1)
Revolving Credit Facility (2)	2026	SOFR + 1.05%	$	—	$	—
Delayed Draw Term Loan (8)	2025	SOFR + 1.20%	—		—
November 2019 Notes (5)
2026 Maturity	2026	4.250%	1,250,000		1,238,825
2029 Maturity	2029	4.625%	1,000,000		988,931
February 2020 Notes (5)
2025 Maturity	2025	3.500%	750,000		745,020
2027 Maturity	2027	3.750%	750,000		743,086
2030 Maturity	2030	4.125%	1,000,000		988,626
April 2022 Notes (5)
2025 Maturity	2025	4.375%	500,000		496,314
2028 Maturity	2028	4.516% (6)	1,250,000		1,237,082
2030 Maturity	2030	4.541% (6)	1,000,000		987,618
2032 Maturity	2032	3.980% (6)	1,500,000		1,480,799
2052 Maturity	2052	5.625%	750,000		735,360
Exchange Notes (5)
2024 Maturity	2024	5.625%	1,024,169		1,029,226
2025 Maturity	2025	4.625%	799,368		783,659
2026 Maturity	2026	4.500%	480,524		463,018
2027 Maturity	2027	5.750%	729,466		738,499
2028 Maturity	2028	4.500%	349,325		336,545
2029 Maturity	2029	3.875%	727,114		660,489
MGP OP Notes (5)
2024 Maturity	2024	5.625%	25,831		25,901
2025 Maturity	2025	4.625%	632		615
2026 Maturity	2026	4.500%	19,476		18,542
2027 Maturity	2027	5.750%	20,534		20,520
2028 Maturity	2028	4.500%	675		639
2029 Maturity	2029	3.875%	22,886		20,361
Total Debt		4.496% (7)	$	13,950,000	$	13,739,675

____________________

(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 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 (or CDOR, as applicable) with an additional 0.10% adjustment for SOFR loans, as applicable. Additionally, the commitment fees under the Revolving Credit Facility are calculated on a credit rating-based pricing grid with a range of 0.15% to 0.375%, depending on our credit ratings. For the three and nine months ended September 30, 2023, the commitment fee for the Revolving Credit Facility was 0.250%.

(3)On January 3, 2023, we drew on the Revolving Credit Facility in the amount of C$140.0 million to fund a portion of the purchase price of the PURE Canadian Gaming Transaction. On August 31, 2023, we drew on the Revolving Credit Facility in the amount of C$75.0 million to fund a portion of the purchase price of the Century Canadian Portfolio Transaction. The balance above is inclusive of foreign currency remeasurement.

(4)Interest is payable monthly.

(5)Interest is payable semi-annually.

(6)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 — ~~Litigation, Contractual Commitments~~– Derivatives). The contractual interest rates on the April 2022 Notes maturing 2028, 2030 and ~~Contingent Liabilities~~
2032 are 4.750%, 4.950% and 5.125%, respectively.

~~Litigation~~

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

(7)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, 2023, which excludes the impact of the forward-starting interest rate swaps and treasury locks, is 4.49%.

(8)The Delayed Draw Term Loan was available to be drawn up to 12 months following the effective date of February 8, 2022. On February 8, 2023, the Delayed Draw Term Loan facility expired undrawn in accordance with its terms.

The ~~Business~~following table is a schedule of future minimum principal payments of our debt obligations as of September 30, 2023:


(In thousands)	Future Minimum Principal Payments
2023 (remaining)	$	—
2024	1,050,000
2025	2,050,000
2026	1,908,348
2027	1,500,000
2028	1,600,000
Thereafter	9,000,000
Total minimum principal payments	$	17,108,348

Senior Unsecured Notes

Exchange Notes

On September 13, 2021, we announced that the VICI Issuers commenced (i) private exchange offers to certain eligible holders (collectively, the “Exchange Offers”) for any and ~~its operations may be subject~~all of each series of the MGP OP Notes for up to ~~litigation involving employment matters, personal injuries,~~an aggregate principal amount of $4.2 billion of new notes issued by the VICI Issuers and (ii) consent solicitations with respect to each series of MGP OP Notes (collectively, the “Consent Solicitations”) to adopt certain proposed amendments to each of the indentures governing the MGP OP Notes (collectively, the “MGP OP Notes Indentures”), which, among other ~~matters~~things, eliminated or modified certain of the covenants, restrictions, provisions and events of default in each of the MGP OP Notes Indentures. Upon settlement of the Exchange Offers and Consent Solicitations on April 29, 2022, supplemental indentures to each of the MGP OP Notes Indentures that ~~arise~~effected the proposed amendments became operative.

On April 29, 2022, the VICI Issuers issued $1,024.2 million in aggregate principal amount of 5.625% Senior Notes due May 1, 2024, $799.4 million in aggregate principal amount of 4.625% Senior Notes due June 15, 2025, $480.5 million in aggregate principal amount of 4.500% Senior Notes due September 1, 2026, $729.5 million in aggregate principal amount of 5.750% Senior Notes due February 1, 2027, $349.3 million in aggregate principal amount of 4.500% Senior Notes due January 15, 2028 and $727.1 million in aggregate principal amount of 3.875% Senior Notes due February 15, 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 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 ~~normal course of business.~~respective indenture governing such Exchange Notes. We ~~do not expect the outcome~~may redeem some or all of such ~~ordinary~~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 ~~routine litigation~~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.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

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 ~~have~~the corresponding maturity series of the Exchange Notes. We may redeem some or all of such notes prior to such respective dates at a ~~material effect~~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 ~~our combined financial position, results~~May 15, 2025, (ii) $1,250.0 million in aggregate principal amount of ~~operations, or cash flows.~~

~~Contingent Liabilities~~

~~In January 2015,~~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 ~~Trustees~~VICI OP Units received by MGM in the Partnership Merger for $4,404.0 million in cash in connection with the closing of the ~~National Retirement Fund (“NRF”~~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 ~~multi-employer~~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 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.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

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.

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 ~~benefit pension plan, voted~~in the indentures). Accordingly, VICI LP and its restricted subsidiaries are no longer subject to ~~expel CEC~~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.

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 was available to be drawn for up to 12 months following the effective date and, accordingly, expired undrawn in accordance with its terms on February 8, 2023.

The Revolving Credit Facility includes two six-month maturity extension options the exercise of which is subject to customary conditions and the payment of an extension fee of 0.0625% on the extended commitments. Additionally, the Revolving Credit Facility includes the option to increase the revolving loan commitments by up to $1.0 billion 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 Revolving Credit Facility will bear interest, at VICI LP’s option, at a rate based on SOFR (or CDOR for Canadian dollars) (including a credit spread adjustment for SOFR) plus a margin ranging from 0.775% to 1.325% or a base rate (or Canadian prime rate for Canadian dollars) 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. The base rate for USD 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%. The Canadian prime rate is the highest of (i) the PRIMCAN Index rate and (ii) the average rate for thirty day Canadian Dollar bankers’ acceptance quoted by Reuters 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 January 3, 2023, we drew on the Revolving Credit Facility in the amount of C$140.0 million (approximately US$103.4 million based on the exchange rate at the time of the acquisition) to fund a portion of the purchase price of the PURE Canadian Gaming Transaction. On August 31, 2023, we drew on the Revolving Credit Facility in the amount of C$75.0 million

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

(approximately US$55.0 million based on the exchange rate at the time of the acquisition) to fund a portion of the purchase price of the Century Canadian Portfolio Transaction.

MGM Grand/Mandalay Bay CMBS Debt

On January 9, 2023, as a result of the MGM Grand/Mandalay Bay JV Interest Acquisition, we consolidated the assets and liabilities of the MGM Grand/Mandalay Bay JV, which includes the $3.0 billion in principal amount of outstanding CMBS debt (the “MGM Grand/ Mandalay Bay CMBS Debt”). The MGM Grand/Mandalay Bay CMBS Debt was originally incurred on February 14, 2020 pursuant to a loan agreement (as amended from time to time, the “MGM Grand/Mandalay Bay CMBS Loan Agreement”), and is secured primarily by mortgages on certain affiliates of the MGM Grand/Mandalay Bay JV’s fee interest in the real estate assets related to the MGM Grand Las Vegas and the Mandalay Bay Resort and Casino. The MGM Grand/Mandalay Bay CMBS Debt matures in March 2032 and bears interest at 3.558% per annum until March 2030 at which time the rate can change in accordance with the terms of the MGM Grand Mandalay Bay CMBS Loan Agreement until maturity. The MGM Grand/Mandalay Bay CMBS Loan Agreement contains certain customary affirmative and negative covenants and events of default, including, among other things, restrictions on the ability of the MGM Grand/Mandalay Bay JV and certain of its affiliates to incur additional debt and transfer, pledge or assign certain equity interests or its assets, and covenants requiring certain affiliates of the MGM Grand/Mandalay Bay JV to exist as “special purpose entities,” maintain certain ongoing reserve funds and comply with other customary obligations for commercial mortgage-backed securities loan financings.

Bridge Facilities

On March 2, 2021 and August 4, 2021, in connection with the completion of the Venetian Acquisition and MGP Transactions, respectively, VICI PropCo entered into Commitment Letters with certain lenders pursuant to which they provided commitments in an amount up to $4.0 billion and $9.3 billion, respectively, in the aggregate, each consisting of a 364-day first lien secured bridge facility (the “Venetian Acquisition Bridge Facility” and the “MGP Transactions Bridge Facility,” respectively), for the purpose of providing a portion of the financing necessary in connection with the closing of the Venetian Acquisition and MGP Transactions, as applicable. In each case the commitments were subject to a tiered commitment fee based on the period the respective commitment was outstanding and a structuring fee. During the nine months ended September 30, 2022, we recognized $16.3 million in such fees, which were recorded in Interest expense in our Statement of Operations. We did not recognize any such fees during the three months ended September 30, 2022 and the three and nine months ended September 30, 2023, since the Venetian Acquisition Bridge Facility and MGP Transactions Bridge Facility were fully terminated on February 23, 2022 and April 29, 2022, respectively, in connection with such closings.

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, 2023, we were in compliance with all financial covenants under our debt obligations.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Note 8 — Derivatives

Forward-Starting Derivatives

From March through September 2023, we entered into five forward-starting interest rate swap agreements with an aggregate notional amount of $400.0 million to hedge against changes in future cash flows resulting from changes in interest rates from the ~~plan.~~trade date through the forecasted issuance of $400.0 million of senior unsecured notes, including three forward-starting interest rate swap agreements for an aggregate notional amount of $150.0 million during the quarter ended September 30, 2023. Subsequent to quarter-end, we entered into one forward-starting interest rate swap agreement for an additional notional amount of $50.0 million. We hedged our exposure to the variability in future cash flows for a forecasted issuance of long-term debt over a maximum period ending December 2024. The ~~NRF~~forward-starting interest rate swaps are designated as cash-flow hedges.

The following table details our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of September 30, 2023. As of December 31, 2022, there were no derivative instruments outstanding.


($ In thousands)	September 30, 2023
Instrument	Number of Instruments	Fixed Rate	Notional		Index	Maturity
Forward-starting interest rate swap	1	3.4565%	$	200,000	USD-SOFR-COMPOUND	March 6, 2034
Forward-starting interest rate swap	1	3.0615%	50,000		USD-SOFR-COMPOUND	March 6, 2034
Forward-starting interest rate swap	1	3.4520%	50,000		USD-SOFR-COMPOUND	March 6, 2034
Forward-starting interest rate swap	1	3.9775%	50,000		USD-SOFR-COMPOUND	March 6, 2034
Forward-starting interest rate swap	1	4.1660%	50,000		USD-SOFR-COMPOUND	March 6, 2034

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)	2023		2022		2023		2022
Unrealized gain recorded in other comprehensive income	$	20,109	$	—	$	20,289	$	200,550
Reduction in interest expense related to the amortization of the forward-starting interest rate swaps and treasury locks	(6,037)		(6,037)		(18,111)		(10,196)

Net Investment Hedges

The C$140.0 million and C$75.0 million draws on the Revolving Credit Facility in connection with the PURE Canadian Gaming Transaction and Century Canadian Portfolio Transaction, respectively, reduce the impact of exchange rate variations associated with our investments in such entities, and, accordingly, has ~~advised CEC~~been designated as a hedge of the net investment in the PURE Canadian Gaming entities and ~~Caesars Entertainment Resort Properties, LLC (“CERP”) that this expulsion triggered~~Century Canadian Portfolio entities, respectively. As non-derivative net investment hedges, the impact of changes in foreign currency exchange rates on the principal balances are recognized as a ~~withdrawal liability with~~cumulative translation adjustment within accumulated other comprehensive income. For the three and nine months ended September 30, 2023, we recognized $2.9 million and $1.7 million, respectively, in unrealized losses related to such net investment hedges, which were recorded as a ~~present~~component of Foreign currency translation adjustments in the Statement of Operations.

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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, 2023 and December 31, 2022:


	September 30, 2023
(In thousands)			Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:
Derivative instruments – forward-starting interest rate swaps (1)	$	20,289	$	—	$	20,289	$	—


	December 31, 2022
(In thousands)			Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:

Short-term investments (2)	$	217,342	$	—	$	217,342	$	—

___________________

(1) 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.

(2) The carrying 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~~these investments is equal to their fair value due to the ~~Business’ employees did not participate in this plan, because the entities that own the Business are a member~~short-term nature of the ~~Caesars Group (as defined below), such entities~~investments as well as their credit quality.

The estimated fair values of our financial instruments as of September 30, 2023 and December 31, 2022 for which fair value is only disclosed are ~~jointly~~as follows:


	September 30, 2023				December 31, 2022
(In thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Investments in leases – financing receivables (1)	$	17,337,665	$	17,955,365	$	16,740,770	$	17,871,771
Investments in loans and securities (2)	973,217		915,899		685,793		675,456
Cash and cash equivalents	510,884		510,884		208,933		208,933

Financial liabilities:
Debt (3)
Revolving Credit Facility	158,348		158,348		—		—
MGM Grand/Mandalay Bay CMBS Debt	2,767,065		2,495,347		—		—
Senior Unsecured Notes	13,767,315		12,825,517		13,739,675		13,020,636

____________________

(1)These investments represent the JACK Master Lease, the Harrah’s Call Properties, the MGM Master Lease, the Foundation Master Lease, the Mirage Lease, the Gold Strike Lease, the PURE Master Lease and ~~severally liable with CEC and CEOC for any liability under~~ the ~~NRF’s claims.~~

~~On March 13, 2017, CEOC, CEC, CERP,~~Century Canadian Portfolio component of the ~~Caesars employers that contribute~~Century Master Lease. In relation to the ~~NRF,~~Harrah’s Call Properties, JACK Master Lease, Mirage Lease, Gold Strike Lease and MGM Master Lease, the fair value of these assets is based on significant “unobservable” market inputs and, as such, these fair value measurements are considered Level 3 of the fair value hierarchy. In relation to the Foundation Master Lease, PURE Master Lease and the ~~NRF and certain~~Century Canadian Portfolio component of ~~its related parties entered into a settlement agreement resolving all issues related~~the Century Master Lease, given the proximity of the date of our investment to the ~~disputes with the NRF. Under the terms~~date of the ~~settlement, CEC,~~financial statements, we determined that the fair value materially approximates the purchase price of the acquisition of these financial assets.

(2)These investments represent our investments in twelve senior secured and mezzanine loans and one series of senior secured notes. The fair value of investments in loans is based on significant “unobservable” market inputs and, as such, these fair value measurements are considered Level 3 of the fair value hierarchy. The fair value of our senior secured notes 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.

(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.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Note 10 — Commitments and Contingent Liabilities

Litigation

In the ordinary course of business, from time to time, we may be subject to legal claims and administrative proceedings. As of September 30, 2023, we are not subject to any litigation that we believe could have, individually or in the aggregate, a ~~person~~material adverse effect on ~~CEC’s behalf, was required to pay a total~~our business, financial condition or results of ~~$45 million to the NRF on the~~ ~~Emergence Date~~.operations, liquidity or cash flows.

~~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~~•Operating Lease Commitments. We are liable under various operating leases ~~for~~for: (i) land at the Cascata golf course, ~~equipment~~which expires in 2038 and ~~other miscellaneous~~has three 10-year extension options and (ii) our corporate headquarters in New York, NY, which expires in 2035 and has one five-year renewal option.

•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.

For the ground and use leases determined to be operating leases, we recorded a sub-lease right-of-use assets ~~which expire at various dates through 2039.~~ in Other assets and sub-lease liabilities in Other liabilities. For ground and lease uses determined to be finance leases, we 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, 2023 and December 31, 2022:


(In thousands)	September 30, 2023		December 31, 2022
Others assets (operating lease and sub-leases)	$	40,052	$	28,953
Other liabilities (operating lease and sub-lease liabilities)	40,052		28,953
Others assets (sales-type sub-leases, net) (1)	786,895		764,509
Other liabilities (finance sub-lease liabilities)	806,178		784,259

___________________

Total rental expense for operating lease commitments and total rental income and rental expense for operating and Finance sub-lease commitments and contractual rent expense under these agreements were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Operating leases
Rent expense(1)	$	508	$	503	$	1,515	$	1,504
Contractual rent	483		475		1,438		1,424
Operating sub-leases
Rental income and expense(2)	1,712		1,712		5,137		3,995
Contractual rent	1,650		1,602		4,918		3,720
Finance sub-leases
Rental income and expense(2)	14,490		14,466		43,349		33,392
Contractual rent	15,925		18,925		44,488		37,910

___________________

(1) Total rental expense is included in ~~direct~~ golf ~~operating~~operations and general and administrative expenses ~~and property costs~~ in our ~~Statements~~Statement of ~~Operations were approximately $219,000~~Operations.

(2) Total rental income and ~~$222,000~~rental expense for ~~the three months ended September 30, 2017~~operating and ~~2016, respectively,~~finance sub-lease commitments are presented gross and ~~$645,000~~included in Other income and ~~$766,000 for the nine months ended September 30, 2017 and 2016, respectively.~~Other expenses in our Statement of Operations.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

The future minimum lease commitments relating to the base lease rent portion of noncancelable operating leases and ground and use sub-leases at September 30, ~~2017~~2023 are as follows:


(In thousands)	Operating Lease Commitments		Operating Sub-Lease Commitments		Financing Sub-Lease Commitments
2023 (remaining)	$	466	$	1,667	$	14,700
2024	1,347		6,553		61,132
2025	2,025		5,129		61,308
2026	2,772		3,934		61,308
2027	2,792		4,010		61,308
2028	2,814		3,034		61,394
Thereafter	23,515		2,094		2,595,488
Total minimum lease commitments	$	35,731	$	26,421	$	2,916,638
Discounting factor	20,286		1,815		2,110,460
Lease liability	$	15,445	$	24,606	$	806,178

Discount rates (1)	5.3% – 5.5%		2.6% – 2.9%		6.0% – 8.0%

Weighted average remaining lease term	13.2 years		4.9 years		53.5 years

____________________

(1) 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.

Note 11 — Stockholder’s Equity

Stock

Authorized

As of September 30, 2023, 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.

Public Offerings

From time to time, we offer shares of our common stock through public offerings registered with the SEC. In connection with such offerings, we may issue and sell the offered shares of common stock upon settlement of the offering or, alternatively, enter into forward sale agreements with respect to all or a portion of the shares of common stock sold in such public offerings, pursuant to which the offered shares are borrowed by the forward sale purchasers and the issuance of such shares takes place upon settlement of the applicable forward sale agreement in accordance with its terms.

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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
Forward Offerings

~~Other Commitments~~On January 12, 2023, we completed a primary forward offering of 30,302,500 shares of common stock (inclusive of 3,952,500 shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares of common stock) at a public offering price of $33.00 per share for an aggregate offering value of $1,000.0 million, resulting in net proceeds, after deduction of the underwriting discount and expenses, of $964.4 million, subject to forward sale agreements (the “January 2023 Forward Sale Agreements”).

The ~~Business utilizes a third-party golf maintenance company for its Rio Secco and Cascata golf courses. The~~following table summarizes the terms of the forward sale agreements are for five years and expire in February 2019 and include all labor and equipment necessary to maintain both golf course grounds. Total expenses under these agreements included in direct golf operating expenses in the Statementsoutstanding as of ~~Operations were approximately $600,000 and $589,000 for the three months ended~~ September 30, ~~2017~~2023:


(In thousands, except share and per share data)	Effective Date (1)	Total Shares Remaining	Public Offering Price Per Share		Aggregate Offering Value		Initial Net Forward Sales Price Per Share		Initial Net Value
January 2023 Forward Sale Agreements (2) (3)	January 18, 2023	17,702,500	$	33.00	$	584,183	$	31.85	$	563,186

____________________

(1)The forward sale agreements generally require settlement within twelve months of the trade date, which is January 16, 2024 with respect to the January 2023 Forward Sale Agreements.

(2)As of September 30, 2023, the net forward sales price per share under the January 2023 Forward Sale Agreements was $31.58 and ~~2016, respectively,~~would result in us receiving approximately $559.1 million in net cash proceeds if we were to physically settle the shares. Alternatively, if we were to cash settle the shares under the January 2023 Forward Sale Agreements, it would result in a cash inflow of $44.0 million, or, if we were to net share settle the shares under the January 2023 Forward Sale Agreements, it would result in us receiving approximately 1.5 million shares.

(3)Subsequent to quarter-end, on October 17, 2023, we physically settled all of the remaining 17,702,500 shares of common stock under the January 2023 Forward Sale Agreements at a forward sale price of $31.65 per share in exchange for total net proceeds of approximately $560.3 million to fund a portion of the purchase price of the Bowlero Transaction and ~~$2,149,000~~for general corporate purposes.

We did not receive any proceeds from the sale of shares at the time we entered into each of the respective forward sale agreements. We determined that the forward sale agreements meet the criteria for equity classification and, ~~$2,110,000 for~~therefore, are exempt from derivative accounting. We recorded the 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.

The following table summarizes settlement activity of the outstanding forward sale agreements during the nine months ended September 30, ~~2017 and 2016, respectively.~~2023:


(In thousands, except share and per share data)	Settlement Date	Settlement Type	Number of Shares Settled	Net Forward Sales Price Upon Settlement		Total Net Proceeds
January 2023 Forward Sale Agreements	August 31, 2023	Physical	3,400,000	$	31.88	$	108,393
January 2023 Forward Sale Agreements	July 20, 2023	Physical	6,000,000	31.71		190,287
January 2023 Forward Sale Agreements	April 4, 2023	Physical	3,200,000	31.71		101,467
November 2022 Forward Sale Agreements	January 6, 2023	Physical	18,975,000	30.34		575,628

The following table summarizes settlement activity of the outstanding forward sale agreements during the nine months ended September 30, 2022:


(In thousands, except share and per share data)	Settlement Date	Settlement Type	Number of Shares Settled	Net Forward Share Price Upon Settlement		Total Net Proceeds
September 2021 Forward Sale Agreements	February 18, 2022	Physical	50,000,000	$	27.81	$	1,390,600
March 2021 Forward Sale Agreements	February 18, 2022	Physical	69,000,000	26.50		1,828,600

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~~CAESARS ENTERTAINMENT OUTDOOR~~

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

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

(UNAUDITED)

At-the-Market Offering Program

On February 28, 2023, we entered into an equity distribution agreement, pursuant to which we may sell, from time to time, up to an aggregate sales price of $1,500.0 million of our common stock and terminated our prior equity distribution agreement, pursuant to which we previously sold, from time to time, shares of our common stock (collectively, 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 equity distribution agreement 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.

The ~~future commitments relating~~following table summarizes our activity under the ATM Program during the nine months ended September 30, 2023 and 2022, all of which were sold subject to ~~these~~forward sale agreements.


(In thousands, except share and per share data)	Number of Shares	Weighted Average Share Price		Aggregate Value		Initial Net Forward Sales Price Per Share		Aggregate Net Value
June 2022 ATM Forward Sale Agreement	11,380,980	$	32.28	$	367,400	$	31.64	$	360,000
August 2022 ATM Forward Sale Agreement	3,918,807	34.73		136,082		34.40		134,800
June 2023 ATM Forward Sale Agreement (1)	327,306	32.36		10,600		31.71		10,400
July 2023 ATM Forward Sale Agreement (2)	271,071	32.13		8,709		31.81		8,624
September 2023 ATM Forward Sale Agreement (3)	7,572,281	30.85		233,577		30.26		229,129

____________________

(1)As of September 30, 2023, the net forward sales price per share under the June 2023 ATM Forward Sale Agreement was $31.67 and would result in us receiving approximately $10.4 million in net cash proceeds if we were to physically settle the shares. Alternatively, if we were to cash settle the shares under the June 2023 ATM Forward Sale Agreements, it would result in a cash inflow of $0.8 million, or, if we were to net share settle the shares under the June 2023 ATM Forward Sale Agreements, it would result in us receiving approximately 28,858 shares.

(2)As of September 30, 2023, the net forward sales price per share under the July 2023 ATM Forward Sale Agreement was $31.71 and would result in us receiving approximately $8.6 million in net cash proceeds if we were to physically settle the shares. Alternatively, if we were to cash settle the shares under the July 2023 ATM Forward Sale Agreements, it would result in a cash inflow of $0.7 million, or, if we were to net share settle the shares under the July 2023 ATM Forward Sale Agreements, it would result in us receiving approximately 24,300 shares.

(3)As of September 30, 2023, the net forward sales price per share under the September 2023 ATM Forward Sale Agreement was $30.26 and would result in us receiving approximately $229.2 million in net cash proceeds if we were to physically settle the shares. Alternatively, if we were to cash settle the shares under the September 2023 ATM Forward Sale Agreements, it would result in a cash inflow of $8.8 million, or, if we were to net share settle the shares under the September 2023 ATM Forward Sale Agreements, it would result in us receiving approximately 302,553 shares.

We did not receive any proceeds from the sale of shares at the time we entered into each of the respective ATM Program forward sale agreements. We determined that the ATM Program forward sale agreements meet the criteria for equity classification and, therefore, are exempt from derivative accounting. We recorded the ATM Program 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.

The following table summarizes our settlement activity of the outstanding forward shares under the ATM Program, all of which were sold subject to the ATM Program forward sale agreements and the previous equity distribution agreement, as applicable, during the nine months ended September 30, ~~2017 are~~2023. There was no settlement activity of the outstanding forward shares under the ATM Program during the nine months ended September 30, 2022.

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)


(In thousands, except share and per share data)	Settlement Date	Settlement Type	Number of Shares Settled	Net Forward Share Price Upon Settlement		Total Net Proceeds
December 2022 ATM Forward Sale Agreement	January 6, 2023	Physical	6,317,805	$	32.99	$	208,402
August 2022 ATM Forward Sale Agreement	January 6, 2023	Physical	3,918,807	33.96		133,073
June 2022 ATM Forward Sale Agreement	January 3, 2023	Physical	11,380,980	31.20		355,168

As of September 30, 2023, we have 8,170,658 forward shares outstanding under the ATM Program.

Common Stock Outstanding

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


	Nine Months Ended September 30,
Common Stock Outstanding	2023	2022
Beginning Balance January 1,	963,096,563	628,942,092

Issuance of common stock upon physical settlement of forward sale agreements	53,192,592	119,000,000

Issuance of common stock in connection with the MGP Transactions	—	214,552,532
Issuance of restricted and unrestricted common stock under the stock incentive program, net of forfeitures	538,728	598,800
Ending Balance September 30,	1,016,827,883	963,093,424

Distributions

Dividends declared (on a per share basis) during the nine months ended September 30, 2023 and 2022 were as follows:

Nine Months Ended September 30, 2023

Declaration Date

Record Date

Payment Date

Period

Dividend

March 9, 2023

March 23, 2023

April 6, 2023

January 1, 2023 – March 31, 2023

0.3900

June 8, 2023

June 22, 2023

July 6, 2023

April 1, 2023 – June 30, 2023

0.3900

September 7, 2023

September 21, 2023

October 5, 2023

July 1, 2023 – September 30, 2023

0.4150

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

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

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Note 12 — Earnings Per Share and Earnings Per Unit

Earnings Per Share

Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding net income attributable to participating securities (unvested restricted stock awards). Diluted earnings per share reflects the additional dilution for all potentially dilutive securities such as stock options, unvested restricted shares, unvested performance-based restricted shares and the shares to be issued by us upon settlement of any outstanding forward sale agreements for the period such dilutive security is outstanding. The shares issuable upon settlement of any outstanding forward sale agreements, as described in Note 11 – Stockholder’s Equity, are reflected in the diluted earnings per share calculations using the treasury stock method for the period outstanding prior to settlement. Under this method, the number of shares of our common stock used in calculating diluted earnings per share is deemed to be increased by the excess, if any, of the number of shares of common stock that would be issued upon full physical settlement of the shares under any outstanding forward sale agreements for the period prior to settlement over the number of shares of common stock that could be purchased by us in the market (based on the average market price during the period prior to settlement) using the proceeds receivable upon full physical settlement (based on the adjusted forward sales price immediately prior to settlement).

The following tables reconcile the weighted-average shares of common stock outstanding used in the calculation of basic earnings per share to the weighted-average shares of common stock outstanding used in the calculation of diluted earnings per share:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Determination of shares:
Weighted-average shares of common stock outstanding	1,012,986,784	962,573,646	1,007,110,068	848,839,357
Assumed conversion of restricted stock	602,856	988,518	790,478	795,370
Assumed settlement of forward sale agreements	—	572,176	536,906	1,188,310
Diluted weighted-average shares of common stock outstanding	1,013,589,640	964,134,340	1,008,437,452	850,823,037


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except share and per share data)	2023		2022		2023		2022
Basic:
Net income attributable to common stockholders	$	556,329	$	330,905	$	1,765,771	$	513,582
Weighted-average shares of common stock outstanding	1,012,986,784		962,573,646		1,007,110,068		848,839,357
Net income basic EPS	$	0.55	$	0.34	$	1.75	$	0.61

Diluted:
Net income attributable to common stockholders	$	556,329	$	330,905	$	1,765,771	$	513,582
Diluted weighted-average shares of common stock outstanding	1,013,589,640		964,134,340		1,008,437,452		850,823,037
Net income diluted EPS	$	0.55	$	0.34	$	1.75	$	0.60

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Earnings Per Unit

The following section presents the basic earnings per unit (“EPU”) and diluted EPU of VICI OP, our operating partnership and the direct parent and 100% interest holder in VICI LP. VICI LP’s interests are not expressed in units. However, given that VICI OP has a unit ownership structure and the financial information of VICI OP is substantially identical with that of VICI LP, we have elected to present the EPU of VICI OP. Basic EPU is computed by dividing net income attributable to partners’ capital by the weighted-average number of units outstanding during the period. In accordance with the VICI OP limited liability company agreement, for each share of common stock issued at VICI, a corresponding unit is issued by VICI OP. Accordingly, diluted EPU reflects the additional dilution for all potentially dilutive units resulting from potentially dilutive VICI stock issuances, such as options, unvested restricted stock awards, unvested performance-based restricted stock unit awards and the units to be issued by us upon settlement of any outstanding forward sale agreements of VICI for the period such dilutive security is outstanding. The units issuable upon settlement of any outstanding forward sale agreements of VICI are reflected in the diluted EPU calculations using the treasury stock method for the period outstanding prior to settlement. Under this method, the number of units used in calculating diluted EPU is deemed to be increased by the excess, if any, of the number of units that would be issued upon full physical settlement of the units under any outstanding forward sale agreements for the period prior to settlement over the number of shares of VICI common stock that could be purchased by us in the market (based on the average market price during the period prior to settlement) using the proceeds receivable upon full physical settlement (based on the adjusted forward sales price immediately prior to settlement). Upon VICI’s physical settlement of the shares of VICI common stock under the outstanding forward sale agreement, the delivery of shares of VICI common stock resulted in an increase in the number of VICI OP units outstanding and resulting dilution to EPU.

The following tables reconcile the weighted-average units outstanding used in the calculation of basic EPU to the weighted-average units outstanding used in the calculation of diluted EPU:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Determination of units:
Weighted-average units outstanding	1,025,218,157	974,805,019	1,019,341,441	855,783,910
Assumed conversion of VICI restricted stock	602,856	988,518	790,478	795,370
Assumed settlement of VICI forward sale agreements	—	572,176	536,906	1,188,310
Diluted weighted-average units outstanding	1,025,821,013	976,365,713	1,020,668,825	857,767,590


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except share and per share data)	2023		2022		2023		2022
Basic:
Net income attributable to partners	$	562,350	$	334,271	$	1,779,908	$	509,584
Weighted-average units outstanding	1,025,218,157		974,805,019		1,019,341,441		855,783,910
Net income basic EPU	$	0.55	$	0.34	$	1.75	$	0.60

Diluted:
Net income attributable to partners	$	562,350	$	334,271	$	1,779,908	$	509,584
Weighted-average units outstanding	1,025,821,013		976,365,713		1,020,668,825		857,767,590
Net income diluted EPU	$	0.55	$	0.34	$	1.74	$	0.59

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VICI PROPERTIES INC. AND VICI PROPERTIES L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Note 13 — Stock-Based Compensation

The 2017 Stock Incentive Plan (the “Plan”) is designed to provide long-term equity-based compensation to our directors and employees. The Plan is administered by the Compensation Committee of the Board of Directors. Awards under the Plan may be granted with respect to an aggregate of 12,750,000 shares of common stock and may be issued in the form of: (a) incentive stock options, (b) non-qualified stock options, (c) stock appreciation rights, (d) dividend equivalent rights, (e) restricted stock, (f) restricted stock units or (g) unrestricted stock. In addition, the Plan limits the total number of shares of common stock with respect to which awards may be granted to any employee or director during any one calendar year. At September 30, 2023, 10.2 million shares of common stock remained available for issuance by us as equity awards under the Plan.

The following table details the stock-based compensation expense recorded as General and administrative expense in the Statement of Operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Stock-based compensation expense	$	4,019	$	3,493	$	11,517	$	9,359

The following table details the activity of our time-based restricted stock and performance-based restricted stock units:


	Nine Months Ended September 30, 2023
	Incentive and Time-Based Restricted Stock			Performance-Based Restricted Stock Units
	Shares	Weighted Average Grant Date Fair Value		Units	Weighted Average Grant Date Fair Value
Outstanding at beginning of period	507,339	$	27.47	769,589	$	22.88
Granted	208,179	28.46		474,867	28.59
Vested	(210,165)	28.12		(363,267)	19.90
Forfeited	(32,718)	28.44		(115,607)	19.90
Canceled	—	—		—	—
Outstanding at end of period	472,635	$	27.55	765,582	$	28.28


	Nine Months Ended September 30, 2022
	Incentive and Time-Based Restricted Stock			Performance-Based Restricted Stock Units
	Shares	Weighted Average Grant Date Fair Value		Units	Weighted Average Grant Date Fair Value
Outstanding at beginning of period	300,031	$	24.72	588,134	$	19.32
Granted	385,291	28.61		488,252	27.03
Vested	(157,785)	25.78		(227,166)	22.68
Forfeited	(13,657)	25.26		(80,586)	22.68
Canceled	—	—		—	—
Outstanding at end of period	513,880	$	27.30	768,634	$	22.87

As of September 30, 2023, there was $22.1 million of unrecognized compensation cost related to non-vested stock-based compensation arrangements under the Plan. This cost is expected to be recognized over a weighted average period of 1.8 years.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this Item, the words“Caesars Entertainment Outdoor,” “Business,” “Outdoor Business,” “we,” “our,” and “us” refer to the business and operations of the golf courses that are wholly-owned by Caesars Entertainment Operating Company, Inc. Note references are to the notes to Caesars Entertainment Outdoors’ combined condensed financial statements included in Item 1, “Unaudited Financial Statements.”

VICI Properties Inc., a Maryland corporation, (“VICI REIT”) was created to hold certain real estate assets owned by Caesars Entertainment Operating Company, Inc. (“CEOC”), upon CEOC’s and its debtor affiliates (the “Caesars Debtors”) emergence from bankruptcy. 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. “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 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 VICI REIT on the Emergence Date.

~~As of September 30, 2017, VICI REIT had not conducted operations or had assets or liabilities.~~

The following discussion and analysis of the financial position and operating results of ~~Caesars Entertainment Outdoor~~VICI Properties Inc. and VICI Properties L.P. for the three and nine months ended September 30, ~~2017 and 2016~~2023 should be read in conjunction with the ~~unaudited combined condensed financial statements~~Financial Statements and ~~the~~related notes thereto and other financial information ~~included~~contained elsewhere ~~in this Form 10-Q.~~

The statements in this discussion regarding our expectations regarding our future performance, liquidity and capital resources, and other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Please refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

~~Overview~~

~~VICI REIT is a newly-formed Maryland corporation. On the~~ ~~Emergence Date~~, in connection with CEOC’s Plan of Reorganization, subsidiaries of CEOC transferred certain real estate assets 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 other subsidiaries of VICI REIT and the proceeds of mortgage backed debt issued by other subsidiaries of VICI REIT, for distribution to CEOC’s creditors.

VICI REIT contributed the real property assets to VICI PropCo and the Caesars Entertainment Outdoor operations to VICI Golf LLC, its wholly-owned subsidiary. VICI REIT intends to elect on its U.S. Federal income tax return for our taxable year ending December 31, 2017 to be treated as a real estate investment trust (“REIT”) and VICI Golf LLC to be treated as a taxable REIT subsidiary (“TRS”).

Following the Emergence Date, VICI REIT is a stand-alone entity initially owned by certain former creditors of CEOC. VICI REIT is primarily engaged in the business of owning, acquiring and developing gaming, hospitality and entertainment destinations. Subsidiaries of VICI REIT lease the Properties to New CEOC and certain of its subsidiaries under lease agreements (the “Master Leases”).

We expect to grow our portfolio by pursuing several opportunities. We entered into call right agreements with CEC with respect to three properties owned by Caesars Entertainment Resort Properties, LLC and Caesars Growth Partners, LLC, subsidiaries of CEC (the “Call Right Agreements”). In addition, we have entered into a right of first refusal agreement pursuant to which we have the right to own any domestic gaming facility located outside of the Gaming Enterprise District of Clark County, Nevada, or Greater Las Vegas, proposed to be owned or developed by CEC and/or CEOC or its subsidiaries, subject to certain exclusions (which agreement also provides that CEC has the right to lease and manage such facilities proposed to be acquired or developed by us, subject to certain exclusions). We believe we have additional opportunities for future expansion and development in the gaming, hospitality and entertainment industries, in particular because our portfolio includes approximately 55 acres of undeveloped land adjacent to the Las Vegas Strip. This land benefits from its prime location and the limited availability of desirable land in proximity to the Strip. In addition to the properties we may acquire from CEC and its subsidiaries from time to time, we may also actively seek to identify additional gaming, hospitality and entertainment-related properties for potential acquisition from entities unaffiliated with CEC, as well as other attractive triple-net lease opportunities. We may choose to selectively grow our portfolio through the acquisition of assets that contribute to our tenant and geographic diversification that can be leased subject to long-term leases with tenants with established operating histories, and that can provide stable cash flows, consistent with our properties.

Following the Emergence Date, substantially all of our revenues are derived from rental revenue from the leases of our properties to New CEOC and certain of its subsidiaries pursuant to three Master Leases, which are “triple-net” leases with an initial term of 15 years, with no purchase option, followed by four 5-year renewal options (exercisable by New CEOC) on the same terms and conditions.

In addition to rent, the tenant is required to pay the following: (1) all facility maintenance, (2) all insurance required in connection with the leased properties and the business conducted on the leased properties, (3) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor) and (4) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.

~~Discussion of the Historical Results of Operations of Caesars Entertainment Outdoor~~

The following discussion relates to the historical operations of Caesars Entertainment Outdoor, which, following the Emergence Date is owned by VICI Golf LLC, our taxable REIT subsidiary. The golf courses include the Cascata golf course in Boulder City, Nevada, the Rio Secco golf course in Henderson, Nevada, the Grand Bear golf course in Biloxi, Mississippi and the Chariot Run golf course in Laconia, Indiana. The golf courses generate revenue through fees charged for general golf course usage (including green fees, golf club rentals, and cart charges), annual or corporate memberships (at Rio Secco, Grand Bear and Chariot Run), a school of golf (at Rio Secco), and food, beverage, and merchandise sales.

For financial reporting periods occurring after the Emergence Date, the assets and liabilities of Caesars Entertainment Outdoor will be reflected on our consolidated balance sheet at fair value, together with other real estate assets and liabilities acquired by us. Following the Emergence Date, such assets and liabilities will not be comparable to the assets and liabilities of Caesars Entertainment Outdoor as reported for periods prior to the Emergence Date due to the application of fresh-start reporting and will be recorded at fair value.

~~Three months ended September 30, 2017 compared to three months ended September 30, 2016~~

Net revenues for Caesars Entertainment Outdoor were $4.1 million and $4.3 million for the three months ended September 30, 2017 and 2016, respectively. Revenues for the three months ended September 30, 2017 were comprised of golf revenues of $3.7 million, food and beverage revenues of $0.2 million and retail and other revenues of $0.2 million. Revenues for the three months ended September 30, 2016 were comprised of golf revenues of $3.6 million, food and beverage revenues of $0.4 million and retail and other revenues of $0.3 million. The decrease in revenue for the three months ended September 30, 2017 was primarily due to the closure of the Rio Secco golf course during the quarter due to planned renovations.

Operating expenses for Caesars Entertainment Outdoor were $4.1 million and $4.3 million for the three months ended September 30, 2017 and 2016, respectively. The decrease in operating expenses was due primarily to the closure of the Rio Secco golf course due to planned renovations during the three months ended September 30, 2017.

~~Nine months ended September 30, 2017 compared to nine months ended September 30, 2016~~

Net revenues for Caesars Entertainment Outdoor were $13.8 million and $14.0 million in 2017 and 2016, respectively. Revenues for 2017 were comprised of golf revenues of $11.2 million, food and beverage revenues of $1.3 million and retail and other revenues of $1.3 million. Revenues for 2016 were comprised of golf revenues of $10.9 million, food and beverage revenues of $1.6 million and retail and other revenues of $1.5 million. The decrease in revenue for the nine months ended September 30, 2017 was primarily

~~due to the planned closure of Rio Secco for renovations to the golf course beginning late May 2017 and continuing through early October 2017.~~

Operating expenses for Caesars Entertainment Outdoor decreased $0.2 million to $13.8 million for the nine months ended September 30, 2017 as compared to 2016, primarily due to the closure of the Rio Secco golf course due to planned renovations during the summer of 2017.

~~Recent Accounting Pronouncements~~

~~See Note 2 to Caesars Entertainment Outdoor’s financial statements included~~ in this Quarterly Report on Form 10-Q ~~for discussion of~~and the ~~adoption and potential effects of recently issued accounting standards.~~

~~Critical Accounting Policies~~

~~Our~~audited consolidated financial statements ~~are prepared~~and related notes for the year ended December 31, 2022, which were included in ~~accordance with GAAP. We~~our Annual Report on Form 10-K for the year ended December 31, 2022. All defined terms included herein have ~~identified certain accounting policies that we believe are~~ the ~~most critical~~same meaning as those set forth in the Notes to the presentation of our financial information over a period of time. These accounting policies may require our management to take decisions on subjective and/or complex matters relating to reported amounts of assets, liabilities, revenue, costs, expenses and related disclosures. These would further lead us to estimate the effect of matters that may inherently be uncertain.

Estimates are required in order to prepare the financial statements in conformity with U.S. 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, and allocation of costs and deferred income taxes. The judgment on such estimates and underlying assumptions is based on our historical experience that we believe is reasonable under the circumstances. These form the basis of our judgment on matters that may not be apparent from other available sources of information. In many instances changes in the accounting estimates are likely to occur from period to period. Actual results may differ from the estimates. We believe the current assumptions and other considerations used to estimate amounts reflected in our financial statements are appropriate. However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations and, in certain situations, could have a material adverse effect on our financial condition.

~~Revenue Recognition - Leases~~

As a REIT, the majority of our revenues is derived from rent received from our tenants under long-term triple-net leases. The accounting guidance under ASC 840—Leases (“ASC 840”) is complex and requires the use of judgment and assumptions by management to determine the proper accounting treatment of a lease. We perform a lease classification upon lease inception, to determine if we account for the lease as a capital or operating lease.

Under ASC 840, for leases of both building and land, if the fair value of the land is 25% or more of the total fair value of the leased property at lease inception we consider the land and building separately for lease classification. In these cases, if the building element of the lease meets the criteria to be classified as a capital lease, then we account for the building as a capital lease and the land separately as an operating lease. If the building element does not 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 of a lease triggers capital lease treatment we will conduct the four lease tests under ASC 840 as outlined below. If a lease meets any of the criteria below, it is accounted for 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.

~~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~~Consolidated Financial Statements contained 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.


4.	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.

The tests outlined above, as well as the resulting calculations, require subjective judgments, such as determining, at lease inception, the fair value of the assets, the residual value of the assets at the end of 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.

~~The revenue recognition model is different under capital 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 in our Combined Condensed Balance Sheet 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 element 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 in our Combined Condensed Statement of Operations.

Under the direct financing lease model, as lessor, at lease inception we record the lease receivable as Real Estate Investments Accounted for Using the Direct Financing Method in our Combined Condensed Balance Sheet. Under the direct financing lease method, we recognize fixed amounts due on an effective interest basis at a constant rate of return over the lease term. As a result, the cash payments accounted for under direct financing leases will not equal the earned income from direct financing leases as a portion of the cash rent we receive is recorded as Earned Income from Direct Financing Leases in our Combined Condensed Statement of Operations and a portion is recorded as a reduction to the Real Estate Investments Accounted for using the Direct Financing Method.

~~Real Estate Investments~~

For real estate investments accounted for using the operating method, we 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 the carrying value of 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, we must make assumptions regarding future cash flows and other factors. Factors considered 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 the related assumptions change in the future, we may be required to record an impairment loss.

For real estate investments accounted for using the direct financing method, our net investment in the direct financing lease is evaluated for impairment as necessary, if indicators of impairment 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.

~~Income Taxes-REIT Qualification~~

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 will permit 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 Internal Revenue 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.

~~Liquidity and Capital Resources~~

~~Historically, our primary sources of liquidity and capital resources for Caesars Entertainment Outdoor have been cash flow from operations.~~

Net cash provided by operating activities totaled $2.2 million and $2.4 million for the nine months ended September 30, 2017 and 2016, respectively. The decrease in net cash provided by operating activities of $0.2 million for the nine months ended September 30, 2017, compared to the corresponding period in the prior year was comprised primarily of lower cash receipts from customers due to the closure of Rio Secco due to renovations. This was partially offset by lower cash paid for operating expenses for the nine months ended September 30, 2017, compared to the corresponding period in the prior year.

Net cash used in investing activities totaled $1.9 million and $0.8 million for the nine months ended September 30, 2017 and 2016, respectively, which was solely for expenditures for property and equipment, net of construction payables. Cash used in investing activities during 2017 was due primarily to the $1.8 million invested in the renovation of the Rio Secco course from late May to the end of September.

Net cash used in financing activities totaled $1.2 million and $1.1 million for the nine months ended September 30, 2017 and 2016, respectively. The increase in net cash used in financing activities of $0.1 million for the nine months ended September 30, 2017 compared to the corresponding period in the prior year was due to an increase of funding transactions with parent.

~~Subsequent to Emergence, VICI will have the ability to borrow funds, as well as the ability to raise additional funds in the credit markets in order to finance potential acquisitions.~~

~~Capital Expenditures~~

Historically, our capital expenditures for Caesars Entertainment Outdoor have been primarily on golf course improvements and for the purchase of various golf-related equipment, including golf carts. During the Three Months Ended September 30, 2017, the Business invested approximately $1.8 million for the renovation of the Rio Secco golf course.

~~Debt~~

~~On the~~ ~~Emergence Date~~, VICI PropCo issued to certain of CEOC’s creditors $1,638.4 million of term loans under the new senior secured credit facility which matures in 2022, $311.7 million of first lien notes which mature in 2022, and $766.9 million of second lien notes which mature in 2023. CPLV syndicated $1,550.0 million of market debt to third parties for cash, and its special-purpose parent entities issued three tranches of mezzanine debt in the aggregate principal amount of $650.0 million, all of which mature in 2022. The proceeds from the CPLV mezzanine debt and the CPLV market debt were distributed to certain creditors of CEOC under the Plan.

~~The junior tranche of CPLV mezzanine debt was automatically exchanged for 17,630,700 shares of common stock on November 6, 2017.~~

The senior secured credit facilities governing the term loans 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.

~~See Note 6 to the balance sheets of VICI Properties Inc. included in~~ this Quarterly Report on Form ~~10-Q for further details regarding the Company’s debt.~~10-Q.

~~Contractual Obligations and Commitments~~

In addition to the indebtedness and capital expenditures described above, CEOC assigned various leases on property transferred in connection with the Restructuring. For further details, see Note 8 to the Combined Condensed Financial Statements of Caesars Entertainment Outdoor included in this Quarterly Report on Form 10-Q.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q, including statements such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “should,” “will,” “would” or similar expressions, which constitute “forward-looking statements” within the meaning of ~~the Private Securities Litigation Reform Act of 1995.~~federal securities law. Forward-looking statements are based on our current plans, expectations and projections about future events. ~~Forward-looking statements should not be unduly relied upon.~~We therefore caution you therefore against relying on any of these forward-looking statements. They give our expectations about the future and are not guarantees. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements to materially differ from any future results, performance and achievements expressed in or implied by such ~~forward-looking statements. We caution you therefore against relying on any of these~~ forward-looking statements.

The forward-looking statements included herein are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results, performance and ~~performance~~achievements could differ materially from those set forth in the forward-looking statements and may be affected by a variety of risks and other factors, including, among others:

the impact of changes in general economic conditions and market developments, including inflation, interest rate changes, foreign currency exchange rate fluctuations, supply chain disruptions, consumer confidence levels, changes in consumer spending, unemployment levels and depressed real estate prices resulting from the severity and duration of any downturn in the U.S. or global economy; the impact of recent and potential future interest rate increases on us, including our ability to successfully pursue investments in, and acquisitions of, additional properties and to obtain debt financing for such investments at attractive interest rates, or at all; risks associated with our pending and recently closed transactions, including our ability or failure to realize the anticipated benefits thereof; our dependence on ~~New CEOC and certain of its subsidiaries as lessees of~~our tenants at our properties, including their financial condition, results of operations, cash flows and ~~CEC~~performance, and their affiliates that serve as ~~guarantor~~guarantors of the lease payments, and the negative consequences any material adverse effect on their respective businesses could have on us; the possibility that our ~~business;~~

pending transactions may not be consummated on the terms or timeframes contemplated, or at all; the ability of the parties to our pending transactions and any future transactions to satisfy the conditions set forth in the definitive transaction documents, including the ability to receive, or delays in obtaining, the governmental and regulatory approvals and consents required to consummate the pending transactions, or other delays or impediments to completing the transactions; our ability to obtain the financing necessary to complete any acquisitions on the terms we expect in a timely manner, or at all; the anticipated benefits of certain arrangements with certain tenants in connection with our Partner Property Growth Fund; our ability to exercise our purchase rights under our put-call agreements, call agreements, right of first refusal agreements and right of first offer agreements; our borrowers’ ability to repay their outstanding loan obligations to us; our dependence on the gaming industry;

our ability to pursue our business and growth strategies may be limited ~~by our substantial debt service requirements and~~ by the requirement that we distribute 90% of our REIT taxable income in order to ~~maintain our status~~qualify for taxation as a REIT and that we distribute 100% of our REIT taxable income in order to avoid current ~~entity level~~entity-level U.S. ~~Federal~~federal income taxes;

the impact of extensive regulation from gaming and other regulatory authorities;

the ability of our tenants to obtain and maintain regulatory approvals in connection with the operation of our ~~properties;~~

properties, or the imposition of conditions to such regulatory approvals; the possibility that ~~New CEOC~~our tenants may choose not to renew ~~the Master Leases~~their respective Lease Agreements following the initial or subsequent terms of the leases;

restrictions on our ability to sell our properties ~~included in~~subject to the ~~Master Leases;~~

Lease Agreements; our tenants and any guarantors’ historical results may not be a reliable indicator of their future results; our substantial amount of indebtedness, and ability to service, refinance and otherwise fulfill our obligations under such indebtedness;

our historical financial information may not be reliable indicators of our future ~~results;~~

~~our inability to achieve the benefits that the Caesars Debtors expected to achieve from the separation~~results of ~~the Caesars Debtors into New CEOC~~operations, financial condition and ~~our company;~~

~~limits on our operational flexibility imposed by our debt agreements;~~

~~the possibility of foreclosure of our properties if we are unable to meet required debt service payments;~~

~~the impact of a rise in interest rates on our business;~~

cash flows; our inability to successfully pursue investments in, and acquisitions ~~or development~~ of, additional properties; the possibility that we identify significant environmental, tax, legal or

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other issues that materially and adversely impact the value of assets acquired or secured as collateral (or other benefits we expect to receive) in any of our pending or recently completed transactions; the impact of changes to the U.S. federal income tax laws; the possibility of adverse tax consequences as a result of our pending or recently completed transactions, including tax protection agreements to which we are a party; increased volatility in our stock price, including as a result of our pending or recently completed transactions; our inability to maintain our qualification for taxation as a REIT; the impact of climate change, natural disasters, war, political and public health conditions or uncertainty or civil unrest, violence or terrorist activities or threats on our ~~properties;~~

properties and changes in economic conditions or heightened travel security and health measures instituted in response to these events; the loss of the services of key personnel;

the inability to attract, retain and motivate employees;

the costs and liabilities associated with environmental compliance;

failure to establish and maintain an effective system of integrated internal controls;

~~the costs of operating as a public company;~~

~~the shares of our common stock are not listed on a securities exchange and there is no guarantee as to when they will be listed;~~

~~our inability to operate as a stand-alone company;~~

~~our inability to maintain our status as a REIT;~~

our reliance on distributions received from our ~~Operating Partnership~~subsidiaries, including VICI OP, to make distributions to our ~~stockholders due~~stockholders; the potential impact on the amount of our cash distributions if we were to sell any of our ~~being a holding company;~~

properties in the future; our ~~management team’s limited experience operating as part~~ability to continue to make distributions to holders of ~~a REIT structure;~~

our common stock or maintain anticipated levels of distributions over time; competition for ~~acquisition~~transaction opportunities, including from other REITs, investment companies, private equity firms and hedge funds, sovereign funds, lenders, gaming companies and other investors that may have greater resources and access to capital and a lower cost of capital or different investment parameters than us; and

additional factors discussed herein ~~under “Risk Factors”~~ and listed from time to time as “Risk Factors” in our filings with the SEC, including without limitation, in our ~~subsequent reports~~Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

~~Accordingly, you~~Any of the assumptions underlying forward-looking statements could be inaccurate. You are cautioned not to place undue reliance on any forward-looking statements. All forward-looking statements ~~which speak only~~are made as of the date of this Quarterly Report on ~~which they are made. We do not~~Form 10-Q and the risk that actual results, performance and achievements will differ materially from the expectations expressed herein will increase with the passage of time. Except as otherwise required by the Federal securities laws, we undertake ~~any~~no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or ~~otherwise.~~any other reason. In light of the significant uncertainties inherent in forward-looking statements, the inclusion of such forward-looking statements should not be regarded as a representation by us.

OVERVIEW

~~Item 3. Quantitative~~We are a Maryland corporation that is primarily engaged in the business of owning and ~~Qualitative Disclosures About Market Risk~~acquiring gaming, hospitality and entertainment destinations, subject to long-term triple net leases. We own 92 experiential assets across a geographically diverse portfolio consisting of 54 gaming properties and 38 non-gaming experiential properties across the United States and Canada, including Caesars Palace Las Vegas, MGM Grand and the Venetian Resort, three of the most iconic entertainment facilities on the Las Vegas Strip. Our gaming and entertainment facilities are leased to leading brands that seek to drive consumer loyalty and value with guests through superior services, experiences, products and continuous innovation. Across approximately 125 million square feet, our well-maintained properties are currently located across urban, destination and drive-to markets in twenty-six states and Canada, contain approximately 60,300 hotel rooms and feature over 500 restaurants, bars, nightclubs and sportsbooks.

Our portfolio also includes certain real estate debt investments that we have originated for strategic reasons, primarily in connection with transactions that either do or may provide the potential to convert our investment into the ownership of certain of the underlying real estate in the future. In addition, we own approximately 33 acres of undeveloped or underdeveloped land on and adjacent to the Las Vegas Strip that is leased to Caesars, which we may look to monetize as appropriate. VICI also owns four championship golf courses located near certain of our properties, two of which are in close proximity to the Las Vegas Strip.

We ~~face~~lease our properties to subsidiaries of, or entities managed by, Apollo, Bowlero, Caesars, Century Casinos, CNB, EBCI, Foundation Gaming, JACK Entertainment, MGM, PENN Entertainment, PURE Canadian Gaming and Seminole Hard Rock, with Caesars and MGM being our largest tenants. We believe we have a mutually beneficial relationship with each of our tenants, all of which are leading owners and operators of gaming, entertainment and leisure properties. Our long-term triple-net Lease Agreements with our tenants provide us with a highly predictable revenue stream with embedded growth potential. We believe our geographic diversification limits the effect of changes in any one market ~~risk exposure in~~on our overall performance. We are focused on driving long-term total returns through managing experiential asset growth and allocating capital diligently, maintaining a highly productive tenant base, and optimizing our capital structure to support external growth. As a growth focused public real estate investment trust with long-term investments, we expect our relationship with our partners will position us for the ~~form~~acquisition of ~~interest rate risk. This market risk arises from our debt obligations.~~additional properties across leisure and hospitality over the long-term.

Our ~~primary market risk exposure~~portfolio is ~~interest rate risk with respect to our indebtedness. After giving effect~~competitively positioned and well-maintained. Pursuant to the ~~indebtedness following~~terms of the ~~Emergence~~Lease Agreements, which require our tenants to invest in our properties, and in line with our tenants’ commitment to build guest loyalty, we anticipate our tenants

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will continue to make strategic value-enhancing investments in our properties over time, helping to maintain their competitive position. Our long-term triple-net leases provide our tenants with complete control over management at our leased properties, including sole responsibility for all operations and related expenses, including property taxes, insurance and maintenance, repair, improvement and other capital expenditures, as well as over the ~~Mandatory Preferred Conversions,~~implementation of environmental sustainability and other initiatives. Given our scale and deep industry knowledge, we ~~have an aggregate of $4,667.0 million of outstanding indebtedness. An aggregate of $1,950.1 million~~believe we are well-positioned to execute highly complementary single-asset and portfolio acquisitions, as well as other investments, to augment growth as market conditions allow, with a focus on disciplined capital allocation.

We conduct our operations as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our ~~indebtedness has variable interest rates. A one percent increase or decrease in~~net taxable income to stockholders and maintain our qualification as a REIT. We believe VICI’s election of REIT status, combined with the ~~annual interest rate on our variable rate borrowings of $1,950.1 million would increase or decrease our annual cash interest expense by approximately $19.5 million.~~

We may manage, or hedge, interest rate risks related to our borrowings by means of interest rate swap agreements. We also expect to manage our exposure to interest rate risk by maintaining a mix of fixedincome generation from the Lease Agreements and ~~variable rates for our indebtedness. However, the REIT provisions of the Internal Revenue Code substantially limit~~loans, will enhance our ability to ~~hedge our assets and liabilities. See “Risk Factors-Risks Related~~make distributions to our ~~Status~~stockholders, providing investors with current income as well as long-term growth, subject to the macroeconomic environment, other global events and market conditions more broadly. We conduct our real property business through VICI OP and our golf course business through a ~~REIT-Complying with~~taxable REIT ~~requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.”~~

~~Item 4. Controls and Procedures~~

~~Evaluation of Disclosure Controls and Procedures~~

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”subsidiary (a “TRS”), ~~is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to our management, including our principal executive officer and principal~~VICI Golf.

The financial ~~officer, as appropriate, to allow timely decisions regarding required disclosure.~~

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Exchange Act) at September 30, 2017. Based on this evaluation required by paragraph (b) of Rules 13a-15 or 15d-15, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2017.

~~Changes in Internal Control Over Financial Reporting~~

There have not been changes in our internal control over financial reporting during the three months ended September 30, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~PART II—OTHER INFORMATION~~


~~Item 1.~~	~~Legal Proceedings~~

~~The Company is party to ordinary and routine litigation incidental to our business. The~~ information ~~required by this Item is disclosed in Part I, Item 1:~~

~~Note 5 to VICI Properties Inc.’s Balance Sheets~~

~~Note 8 to Caesars Entertainment Outdoor’s Combined Condensed Financial Statements~~


~~Item 1A.~~	~~Risk Factors~~

~~You should~~ be aware that the occurrence of any of the events described in this section and elsewhere in this report or in any other of our filings with the SEC could have a material adverse effect on our business, financial position, results of operations and cash flows. In evaluating us, you should consider carefully, among other things, the risks described below. The risks and uncertainties described below are not the only ones we face, but do represent those risks and uncertainties that we believe are material to us. Additional risks and uncertainties not presently known to us or that, as of the date of this Quarterly Report on Form 10-Q, we deem immaterial may also harm our business. Some statements included in this Quarterly Report on Form 10-Q is our consolidated results (including the real property business and the golf course business) for the three and nine months ended September 30, 2023.

Impact of Material Trends on Our Business

Recent macroeconomic volatility has introduced significant uncertainty and heightened risk for businesses, including ~~statements~~us and our tenants, as a result of the current economic environment, including the impact of recent and potential future interest rate increases, inflation and increased cost of capital. Our tenants also face additional challenges, including potential changes in consumer confidence levels, behavior and spending, and increased operational expenses, such as with respect to labor or energy costs. As a triple-net lessor, increased operational expenses at our leased properties are borne by our tenants and do not directly impact their rent obligations (other than with respect to underlying inflation as applied to the CPI-based escalators) or other obligations under our Lease Agreements. As a triple-net lessor, we believe we are generally in a strong creditor position and structurally insulated from operational and performance impacts of our tenants, both positive and negative. However, the full extent to which these trends adversely affect our tenants and/or ultimately impact us depends on future developments that cannot be predicted with confidence, including our tenants’ financial performance, the direct and indirect effects of such trends (including among other things, interest rate changes, inflation, economic recessions, consumer confidence levels and general conditions in the ~~following risk factors, constitute forward-looking statements. Please~~capital and credit markets) and the impact of any future measures taken in response to such trends on our tenants.

For more information, refer to the ~~section~~sections entitled ~~“Cautionary Note Regarding Forward-Looking Statements.”~~

~~Risks Related to~~“Key Trends That May Affect Our ~~Business Following the Restructuring~~

~~We are dependent~~Business” and “Risk Factors” in our Annual Report on ~~New CEOC and CEC~~Form 10-K for the ~~foreseeable future,~~year ended December 31, 2022 and as updated from time to time in our other filings with the SEC.

SIGNIFICANT ACTIVITIES DURING 2023

Acquisition Activity

•Bowlero Transaction. Subsequent to quarter-end, on October 19, 2023, we entered the family entertainment sector by acquiring the real estate assets of the Bowlero Portfolio from Bowlero in a sale-leaseback transaction for an aggregate purchase price of $432.9 million. The transaction was funded through a combination of units in a newly formed VICI subsidiary issued to Bowlero, cash on hand, and a portion of proceeds from the settlement of the remaining shares under the January 2023 Forward Sale Agreements. Simultaneous with the closing of the Bowlero Transaction, we entered into the Bowlero Master Lease. The Bowlero Master Lease has an initial total annual rent of $31.6 million and an initial term of 25 years, with six 5-year tenant renewal options. Rent under the lease will escalate at the greater of 2.0% or CPI (subject to a 2.5% ceiling). The tenant’s obligations under the Bowlero Master Lease are guaranteed by Bowlero. Additionally, the Bowlero Master Lease contains a right of first offer provisions under which, for a term of eight years, we have the right to acquire the real estate assets of any current or future Bowlero properties in the event that Bowlero elects to enter into a sale-leaseback transaction.

•Century Canadian Portfolio Transaction. On September 6, 2023, we closed on the previously announced acquisition of the leasehold interest in the land and buildings associated with real estate assets of Century Casino & Hotel Edmonton, Century Casino St. Albert and Century Mile Racetrack and Casino, each in Edmonton, Alberta, and Century Downs Racetrack and Casino in Calgary, Alberta, from Century Casinos for an aggregate purchase price of

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C$221.7 million (approximately US$162.5 million based on the exchange rate at the time of closing). We financed the Century Canadian Portfolio Transaction with a combination of cash on hand, proceeds from the partial settlement of forward equity sale agreements and a C$75.0 million (approximately US$55.0 million based on the exchange rate at the time of closing) draw under our Revolving Credit Facility. Simultaneous with the closing of the transaction, the Century Canadian Portfolio was added to the Century Master Lease and annual rent increased by C$17.3 million (approximately US$12.7 million based on the exchange rate at the time of closing). Additionally, the term of the Century Master Lease was extended such that, upon closing of the transaction, the lease has a ~~material adverse effect~~full 15-year initial base lease term, with three 5-year tenant renewal options. Century Casinos previously exercised one 5-year tenant renewal option. The tenants’ obligations under the Century Master Lease continue to be guaranteed by Century Casinos.

•Rocky Gap Casino Transaction. On July 25, 2023, we closed on ~~New CEOC’s~~the previously announced acquisition of the Rocky Gap Casino, located in Flintstone, Maryland with Century Casinos, from Golden Entertainment, Inc. for an aggregate purchase price of $260.0 million. Pursuant to the transaction agreements, we acquired the leasehold interest in the land and ~~CEC’s businesses, financial positions,~~buildings associated with the Rocky Gap Casino for approximately $203.9 million and Century Casinos acquired the operating assets of the property for approximately $56.1 million. Simultaneous with the closing of the transaction, the Century Master Lease was amended to include the Rocky Gap Casino, and annual rent under the Century Master Lease increased by $15.5 million. Additionally, the term of the Century Master Lease was extended such that, upon closing of the transaction, the lease has a full 15-year initial base lease term remaining. Century Casinos previously exercised one 5-year tenant renewal option and three additional 5-year tenant renewal options are remaining. The tenants’ obligations under the Century Master Lease continue to be guaranteed by Century Casinos.

•MGM Grand/Mandalay Bay JV Interest Acquisition. On January 9, 2023, we closed on the previously announced MGM Grand/Mandalay Bay JV Interest Acquisition, acquiring the remaining 49.9% interest in the MGM Grand/Mandalay Bay JV from BREIT for cash consideration of $1,261.9 million. We also assumed the remaining $1,497.0 million pro rata share of an aggregate $3.0 billion of property-level debt, which matures in 2032 and bears interest at a fixed rate of 3.558% per annum through March 2030. The cash consideration was funded through a combination of cash on hand and proceeds from the settlement of certain forward sale agreements. The MGM Grand/Mandalay Bay Lease currently has an annual rent of $309.9 million, all of which we are entitled to following the closing of the MGM Grand/Mandalay Bay JV Interest Acquisition. The MGM Grand/Mandalay Bay Lease has a remaining initial lease term of approximately 27 years (expiring in 2050), with two 10-year tenant renewal options. Rent under the MGM Grand/Mandalay Bay Lease escalates annually at 2.0% through 2035 (year 15 of the initial lease term) and thereafter at the greater of 2.0% or ~~results~~CPI (subject to a 3.0% ceiling). As of ~~operations could have a material adverse effect~~December 31, 2022, the MGM Grand/Mandalay Bay JV was accounted for as an equity method investment within Investment in unconsolidated affiliate on our ~~business, financial position, or results~~Balance Sheet. Simultaneous with closing of ~~operations.~~the MGM Grand/Mandalay Bay JV Interest Acquisition, as a result of acquiring full ownership of the joint venture, we consolidated the net assets and operations of the MGM Grand/Mandalay Bay JV.

~~New CEOC~~•PURE Canadian Gaming Transaction. On January 6, 2023, we completed the PURE Canadian Gaming Transaction, acquiring the real estate assets of PURE Casino Edmonton, PURE Casino Yellowhead, PURE Casino Calgary, and PURE Casino Lethbridge, all of which are located in Alberta, Canada, from PURE Canadian Gaming for an aggregate purchase price in cash of approximately C$271.9 million (approximately US$200.8 million based on the exchange rate at the time of the acquisition). We financed the PURE Canadian Gaming Transaction with a combination of cash on hand and drawing down C$140.0 million (approximately US$103.4 million based on the exchange rate at the time of the acquisition) under our Revolving Credit Facility. Simultaneous with the acquisition, we entered into the PURE Master Lease. The PURE Master Lease has an initial total annual rent of approximately C$21.8 million (approximately US$16.1 million based on the exchange rate at the time of the acquisition), an initial term of 25 years, with four 5-year tenant renewal options, escalation of 1.25% per annum in lease years two and three (and thereafter at the greater of 1.5% and Canadian Consumer Price Index, capped at 2.5%) and minimum capital expenditure requirements of 1.0% of annual net revenue (excluding gaming equipment). The tenant’s obligations under the PURE Master Lease are guaranteed by the parent entity of PURE Canadian Gaming.

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Leasing Activity

•Gold Strike Severance Lease. On February 15, 2023, in connection with the closing of MGM’s sale of the operations of Gold Strike, we entered into the Gold Strike Lease with CNB related to the land and real estate assets of Gold Strike, and entered into an amendment to the MGM Master Lease in order to account for MGM’s divestiture of the operations of Gold Strike and to reduce the annual base rent by $40.0 million. The Gold Strike Lease has initial annual base rent of $40.0 million with other economic terms substantially similar to the MGM Master Lease, including a base term of 25 years with three 10-year tenant renewal options, escalation of 2.0% per annum (with escalation of the greater of 2.0% and CPI, capped at 3.0%, beginning in lease year 11) and minimum capital expenditure requirements of 1.0% of annual net revenue. The Gold Strike Lease is guaranteed by CNB.

Loan, Security and Preferred Equity Investment Activity

•Canyon Ranch Transactions. On August 22, 2023, we closed on the previously announced $140.1 million mortgage loan to a subsidiary of Canyon Ranch secured by Canyon Ranch Tucson and Canyon Ranch Lenox. Proceeds of the loan were to refinance Canyon Ranch’s existing CMBS debt secured by these two assets. The loan has an initial term of two years with three one-year extensions, exercisable at Canyon Ranch’s option, subject to satisfying certain customary extension conditions.

On July 26, 2023, we committed to an up to $150.0 million preferred equity investment into the controlling entity of ~~its subsidiaries~~Canyon Ranch, a leading provider of holistic, integrative health and wellness guest experiences. The preferred equity has a term of 10 years and may be redeemed by Canyon Ranch at any time, subject to a redemption premium in the first three years. In connection with this investment, we entered into (i) a call right agreement whereby we will have the option to call the real estate assets of each of Canyon Ranch Tucson and Canyon Ranch Lenox, subject to certain conditions, and (ii) a right of first financing agreement pursuant to which we will have the right, but not the obligation, to serve as the real estate capital financing partner for Canyon Ranch with respect to the acquisition, build-out and redevelopment of future wellness resorts. If the call right(s) are exercised, Canyon Ranch would continue to operate the ~~lessees~~applicable wellness resort(s) subject to a long-term triple net master lease with the Company.

•Hard Rock Ottawa Secured Notes. On March 28, 2023, we purchased $85.0 million principal amount of ~~our properties~~senior secured notes from H.R. Ottawa, L.P., which owns and operates the Hard Rock Ottawa Casino. H.R. Ottawa, L.P. intends to use the proceeds of the Hard Rock Ottawa Notes to fund a portion of (i) the redevelopment and rebrand of the existing Rideau Carleton Raceway Casino, located in Ottawa, Canada, (ii) the development of an integrated “Hard Rock” branded hotel with approximately 150 rooms, and (iii) the repayment of existing debt.

Financing and Capital Markets Activity

•January 2023 Offering. On January 12, 2023, we completed a primary forward offering of 30,302,500 shares of common stock (inclusive of 3,952,500 shares sold pursuant to the Master Leases and CEC guarantees their payment obligation under the Master Leases. The Master Leases account for a significant majority of our revenues. Additionally, because the Master Leases are triple-net leases, we depend on New CEOC to pay all insurance, taxes, utilities, and maintenance and repair expensesexercise in connection with these leased properties and to indemnify, defend, and hold us harmless from and against various claims, litigation, and liabilities arising in connection with our businesses. Although CEC guarantees New CEOC’s monetary obligations under the Lease Agreements, there can be no assurance that New CEOC and/or CEC have sufficient assets, income, and access to financing to enable them to satisfy their payment obligations on accountfull of the ~~Master Leases. New CEOC~~underwriters’ option to purchase additional shares of common stock) at a public offering price of $33.00 per share for an aggregate offering value of $1,000.0 million, resulting in net proceeds, after deduction of the underwriting discount and ~~CEC rely on~~expenses, of $964.4 million. The shares are subject to the ~~properties they~~January 2023 Forward Sale Agreements, which require settlement by January 16, 2024. 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 ~~subsidiaries own and/or operate for income~~respective affiliates and remain subject to satisfy their obligations, including their debt service requirements and lease payments due to us under the Master Leases and CEC’s guarantees. If income from these properties were to decline for any reason, if New CEOC or CEC’s or their subsidiaries’ debt service requirements were to increase (whether due to an increasesettlement in interest rates or otherwise), or if CEC’s subsidiaries were prevented from making distributions to CEC (whether due to restrictions in their lending arrangements or otherwise), New CEOC may become unable or unwilling to satisfy its payment obligations under the Master Leases and CEC may become unable or unwilling to make payments under its guarantee of the Master Leases.

The inability or unwillingness of New CEOC and/or CEC to meet their rent obligations and other obligations under the Master Leases and the related guarantee could materially adversely affect our business, financial position, or results of operations, including our ability to pay dividends to our stockholders as required to maintain our status as a REIT. For these reasons, if New CEOC and/or CEC were to experience a material adverse effect on their gaming businesses, financial positions, or results of operations, our business, financial position, or results of operations could also be materially adversely affected.

In addition, due to our dependence on rental payments from New CEOC as a primary source of revenues, we may be limited in our ability to enforce our rights under the Master Leases or to terminate the lease with respect to a particular property. Failure by New CEOC to complyaccordance with the terms of the ~~Master Leases~~January 2023 Forward Sale Agreements.

•Settlement of Outstanding Forward Sale Agreements. During the nine months ended September 30, 2023, we physically settled an aggregate of 53,192,592 shares under certain of our outstanding forward sale agreements in exchange for total net proceeds of approximately $1.7 billion.Subsequent to quarter-end, on October 17, 2023, we physically settled the 17,702,500 shares of common stock remaining under the January 2023 Forward Sale Agreements for total net proceeds of approximately $560.3 million. Following such settlements, no shares of common stock remain available for settlement under the January 2023 Forward Sale Agreements. See Note 11 - Stockholders Equity for additional information.

•At-The-Market Offering Program. During the nine months ended September 30, 2023, we sold an aggregate of 8.2 million shares under the ATM Program (as defined in Note 11 - Stockholders Equity), all of which were subject to forward sale agreements, for estimated aggregate total proceeds of $248.2 million based on the initial forward sale price with respect to each forward sale agreement. We did not initially receive any proceeds from the sale of the shares of common stock under the ATM Program, which were sold to the underwriters by the forward purchasers or to comply with the gaming regulations to which the leased properties are subject could require us to find another lessee for such leased property and there could be a decrease or cessation of rental payments by New CEOC. In such event, we may be unable to locate a suitable lessee at similar rental rates or at all, which would have the effect of reducing our rental revenues.

their respective affiliates.

~~We are dependent on the gaming industry and may be susceptible to the risks associated with it, which could materially adversely affect our business, financial position or~~Table of Contents

RESULTS OF OPERATIONS

The results of ~~operations.~~

Asoperations discussion of VICI and VICI LP are presented combined as there are no material differences between the ~~landlord of gaming facilities, we~~two reporting entities. Further, Golf revenues and Golf expenses, which are ~~impacted by the risks associated with the gaming industry. Therefore, so long~~wholly attributable to VICI and not VICI LP, are shown as our investments are concentrated in gaming-related assets, our success is dependent on the gaming industry, which could be adversely affected by economic conditions in general, changes in consumer trends and preferences and other factors over which we, New CEOC, CEC, as our tenants’ parent, and our other tenants, have no control. As we are subject to risks inherent in substantial investments in a single industry, a decreaseseparate line items in the ~~gaming business would likely have a greater adverse effect on~~Statement of Operations of VICI.


	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023		2022		Variance		2023		2022		Variance
Revenues
Income from sales-type leases	$	500,212	$	376,048	$	124,164	$	1,473,961	$	1,077,952	$	396,009

Income from lease financing receivables, loans and securities	378,502		350,945		27,557		1,122,703		685,544		437,159
Other income	18,179		17,862		317		55,043		41,811		13,232
Golf revenues	7,425		6,688		737		28,416		25,484		2,932
Total revenues	904,318		751,543		152,775		2,680,123		1,830,791		849,332

Operating expenses
General and administrative	14,422		12,063		2,359		44,347		33,311		11,036
Depreciation	1,011		816		195		2,712		2,371		341
Other expenses	18,179		17,862		317		55,043		41,811		13,232
Golf expenses	6,332		5,186		1,146		18,874		16,330		2,544
Change in allowance for credit losses	95,997		232,763		(136,766)		166,119		865,459		(699,340)
Transaction and acquisition expenses	3,566		1,947		1,619		3,385		19,366		(15,981)
Total operating expenses	139,507		270,637		(131,130)		290,480		978,648		(688,168)

Income from unconsolidated affiliate	—		22,719		(22,719)		1,280		37,853		(36,573)
Interest expense	(204,927)		(169,354)		(35,573)		(612,881)		(370,624)		(242,257)
Interest income	7,341		3,024		4,317		16,194		3,897		12,297
Other (losses) gains	(1,122)		—		(1,122)		4,295		—		4,295
Income before income taxes	566,103		337,295		228,808		1,798,531		523,269		1,275,262
Income tax expense	(644)		(417)		(227)		(3,630)		(1,844)		(1,786)
Net income	565,459		336,878		228,581		1,794,901		521,425		1,273,476
Less: Net income attributable to non-controlling interests	(9,130)		(5,973)		(3,157)		(29,130)		(7,843)		(21,287)
Net income attributable to common stockholders	$	556,329	$	330,905	$	225,424	$	1,765,771	$	513,582	$	1,252,189

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Revenue

For the three and nine months ended September 30, 2023 and 2022, our ~~revenues than if we owned a more diversified real estate portfolio, particularly because a~~revenue was comprised of the following items:


	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023		2022		Variance		2023		2022		Variance
Leasing revenue	$	858,929	$	715,591	$	143,338	$	2,544,001	$	1,731,860	$	812,141
Income from loans and securities	19,785		11,402		8,383		52,663		31,636		21,027
Other income	18,179		17,862		317		55,043		41,811		13,232
Golf revenues	7,425		6,688		737		28,416		25,484		2,932
Total revenues	$	904,318	$	751,543	$	152,775	$	2,680,123	$	1,830,791	$	849,332

Leasing Revenue

The following table details the components of our income from sales-type and financing receivables leases:


	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023		2022		Variance		2023		2022		Variance
Income from sales-type leases	$	500,212	$	376,047	$	124,165	$	1,473,961	$	1,077,952	$	396,009

Income from lease financing receivables (1)	358,717		339,544		19,173		1,070,040		653,908		416,132
Total leasing revenue	858,929		715,591		143,338		2,544,001		1,731,860		812,141
Non-cash adjustment (2)	(131,351)		(108,556)		(22,795)		(383,735)		(230,516)		(153,219)
Total contractual leasing revenue	$	727,578	$	607,035	$	120,543	$	2,160,266	$	1,501,344	$	658,922

____________________

(1) Represents the MGM Master Lease, the Harrah’s Call Properties component of the ~~rent under~~Caesars Regional Lease, the JACK Master ~~Leases will be based, over time, on~~Lease, the ~~performance~~Foundation Master Lease, the Mirage Lease, the PURE Master Lease, the Gold Strike Lease and the Century Canadian Portfolio component of the ~~gaming facilities operated by New CEOC on our properties.~~

~~The gaming industry is characterized by~~Century Master Lease. In accordance with ASC 842, since the lease agreements were determined to meet the definition of a ~~high degree of competition among a large number of participants, including riverboat casinos, dockside casinos, land-based casinos, video lottery, sweepstakes~~sales-type lease and poker machines not located in casinos, Native American gaming, on-line lotteries and other on-line wagering and gaming services and, in a broader sense, gaming operators face competition from all manner of leisure and entertainment activities. Gaming competition is intense in mostcontrol of the ~~markets where~~asset is not considered to have transferred to us, such lease agreements are accounted for as financings under ASC 310.

(2) Amounts represent the non-cash adjustment to income from sales-type leases, direct financing leases and lease financing receivables in order to recognize income on an effective interest basis at a constant rate of return over the term of the leases.

Leasing revenue is generated from rent from our ~~facilities are located. Recently, there has been~~Lease Agreements. Total leasing revenue increased $143.3 million and $812.1 million during the three and nine months ended September 30, 2023, respectively, compared to the three and nine months ended September 30, 2022, respectively. Total contractual leasing revenue increased $120.5 million and $658.9 million during the three and nine months ended September 30, 2023, respectively, compared to the three and nine months ended September 30, 2022, respectively. The increases were primarily driven by the addition to our portfolio of the Venetian Lease in February 2022, MGM Master Lease in April 2022, Foundation Master Lease in December 2022, PURE Master Lease and MGM Grand/Mandalay Bay Lease in January 2023, the Rocky Gap Casino component of the Century Master Lease in July 2023 and the Century Canadian Portfolio component of the Century Master Lease in September 2023, as well as the annual rent escalators from certain of our other Lease Agreements.

Income From Loans and Securities

Income from loans and securities increased $8.4 million and $21.0 million during the three and nine months ended September 30, 2023, respectively, compared to the three and nine months ended September 30, 2022, respectively. The increases were driven by the origination and subsequent funding, as applicable, of our senior secured and mezzanine loans, preferred equity and securities and the related interest income from the increased principal balance outstanding, partially offset by the full repayment of the Forum Convention Center Mortgage Loan.

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Other Income

Other income increased $0.3 million and $13.2 million during the three and nine months ended September 30, 2023, respectively, compared to the three and nine months ended September 30, 2022, respectively. The increases were driven primarily by the additional ~~significant competition in the gaming industry~~income and offsetting expense as a result of the ~~upgrading or expansion~~assumption of ~~facilities~~certain sub-leases in connection with the closing of the Venetian Acquisition in February 2022, the MGP Transactions in April 2022 and the Rocky Gap Casino Transaction in July 2023. The Lease Agreements require the tenants to pay all costs associated with such ground and use sub-leases and provide for their direct payment to the landlord.

Operating Expenses

For the three and nine months ended September 30, 2023 and 2022, our operating expenses were comprised of the following items:


	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023		2022		Variance		2023		2022		Variance
General and administrative	$	14,422	$	12,063	$	2,359	$	44,347	$	33,311	$	11,036
Depreciation	1,011		816		195		2,712		2,371		341
Other expenses	18,179		17,862		317		55,043		41,811		13,232
Golf expenses	6,332		5,186		1,146		18,874		16,330		2,544
Change in allowance for credit losses	95,997		232,763		(136,766)		166,119		865,459		(699,340)
Transaction and acquisition expenses	3,566		1,947		1,619		3,385		19,366		(15,981)
Total operating expenses	$	139,507	$	270,637	$	(131,130)	$	290,480	$	978,648	$	(688,168)

General and Administrative Expenses

General and administrative expenses increased $2.4 million and $11.0 million for the three and nine months ended September 30, 2023, respectively, as compared to the three and nine months ended September 30, 2022, respectively. The increase was primarily driven by ~~existing market participants,~~an increase in compensation, including stock-based compensation and the ~~entrance~~addition of new ~~gaming participants into a market or legislative changes. As competing properties~~employees and ~~new markets are opened,~~additional expenses related to the growth of our business ~~results may~~in 2023.

Other Expenses

Other expenses increased $0.3 million and $13.2 million during the three and nine months ended September 30, 2023, respectively, compared to the three and nine months ended September 30, 2022, respectively, driven primarily by the additional income and offsetting expense as a result of the assumption of certain sub-leases in connection with the closing of the Venetian Acquisition in February 2022, the MGP Transactions in April 2022 and the Rocky Gap Casino Transaction in July 2023. The Lease Agreements require the tenants to pay all costs associated with such ground and use sub-leases and provide for their direct payment to the landlord.

Change in Allowance for Credit Losses

During the nine months ended September 30, 2023, we recognized a $166.1 million increase in our allowance for credit losses primarily driven by (i) initial CECL allowances in relation to (a) the consolidation of the MGM Grand/Mandalay Bay JV in connection with the MGM Grand/Mandalay Bay JV Interest Acquisition and related classification of the MGM Grand/Mandalay Bay Lease as a sales-type lease, (b) the PURE Canadian Gaming Transaction and related classification of the PURE Master Lease as a lease financing receivable, (c) the purchase of the Hard Rock Ottawa Notes, and (d) the initial allowances as stated above describing the three months ended September 30, 2023, and (ii) an increase in the Long-Term Period PD as a result of a standard annual update made to the Long-Term PD default study we utilize to estimate our CECL allowance. This

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increase was partially offset by an overall decrease in the R&S Period PD of our tenants and their parent guarantors as a result of their market performance during the nine-month period.

During the nine months ended September 30, 2022, we recognized a $865.5 million increase in our allowance for credit losses primarily driven by initial CECL allowances on our acquisition activity during such period in the amount of $523.2 million, representing 60.5% of the total allowance for the nine months ended September 30, 2022. The initial CECL allowances were in relation to (i) the closing of the MGP Transactions on April 29, 2022, which included the (a) classification of the MGM Master Lease as a lease financing receivable and (b) the sales-type sub-lease agreements we assumed in connection with the closing of the MGP Transactions, (ii) the closing of the Venetian Acquisition on February 23, 2022, which included (a) the classification of the Venetian Lease as a sales-type lease, (b) the estimated future funding commitments under the Partner Property Growth Fund Agreement with the Venetian and (c) the sales-type sub-lease agreements we assumed in connection with the closing of the Venetian Acquisition, and (iii) the future funding commitments from the origination of the BigShots Loan, the Cabot Citrus Farms Loan, the Great Wolf South Florida loan and the Great Wolf Gulf Coast Texas loan. Additional increases were attributable to the increase for the three months ended September 30, 2022 as described above. These increases were partially offset by a decrease in the Long-Term Period PD as a result of standard annual updates that were made to the Long-Term Period PD default study we utilize to estimate our CECL allowance.

Transaction and Acquisition Expenses

Transaction and acquisition expenses increased $1.6 million and decreased $16.0 million during the three and nine months ended September 30, 2023, respectively, compared to the three and nine months ended September 30, 2022, respectively. Changes in transaction and acquisition expenses are related to fluctuations in (i) costs incurred for investments during the period that are not capitalizable under GAAP, and (ii) costs incurred for investments that we are no longer pursuing. Amounts for the nine months ended September 30, 2022 include costs incurred for the MGP Transactions and Venetian Acquisition during the period that are not capitalized under GAAP

Non-Operating Income and Expenses

For the three and nine months ended September 30, 2023 and 2022, our non-operating income and expenses were comprised of the following items:


	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2023		2022		Variance		2023		2022		Variance
Income from unconsolidated affiliate	$	—	$	22,719	$	(22,719)	$	1,280	$	37,853	$	(36,573)
Interest expense	(204,927)		(169,354)		(35,573)		(612,881)		(370,624)		(242,257)
Interest income	7,341		3,024		4,317		16,194		3,897		12,297
Other (losses) gains	(1,122)		—		(1,122)		4,295		—		4,295

Income from Unconsolidated Affiliate

Income from unconsolidated affiliate during the nine months ended September 30, 2023 represents our 50.1% share of the income of the MGM Grand/Mandalay Bay JV for the period from January 1, 2023 through January 8, 2023, immediately prior to the closing of the MGM Grand/Mandalay Bay JV Interest Acquisition. Beginning on January 9, 2023, upon the closing of the MGM Grand/Mandalay Bay JV Interest Acquisition, we consolidated the operations of the MGM Grand/Mandalay Bay JV, and subsequently, such income is included in Income from sales-type lease on our Statement of Operations and, accordingly, no Income from unconsolidated affiliate was recognized for the three months ended September 30, 2023.

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Income from unconsolidated affiliate during the three and nine months ended September 30, 2022, represents our 50.1% share of the income of the MGM Grand/Mandalay Bay JV beginning in April 2022 in connection with and upon the closing of the MGP Transactions.

Interest Expense

Interest expense increased $35.6 million and $242.3 million during the three and nine months ended September 30, 2023, respectively, as compared to the three and nine months ended September 30, 2022, respectively. The increases during the three and nine months ended September 30, 2023 were primarily related to the increase in debt from the (i) issuance of the April 2022 Notes, (ii) issuance of the Exchange Notes, (iii) assumption of the MGP OP Notes, (iv) C$140.0 million and C$75.0 million draws on the Revolving Credit Facility to finance the PURE Canadian Gaming Transaction and Century Canadian Portfolio Transaction, respectively, and (v) assumption of $3.0 billion aggregate principal amount of CMBS debt in connection with the MGM Grand/Mandalay Bay JV Interest Acquisition, the combination of which resulted in an additional $12.4 billion in notional amount of debt at a weighted average interest rate of 4.53% and 4.65% during the three and nine months ended September 30, 2023, respectively, net of the impact of the forward-starting interest rate swaps and treasury locks. The increases were partially offset by certain interest expense recorded during the three and nine months ended September 30, 2022 with no corresponding expense during the three and nine months ended September 30, 2023 and include (i) the amortization of the commitment fees associated with the Venetian Acquisition Bridge Facility and the MGP Transactions Bridge Facility and (ii) additional interest on the $600.0 million draw on the Revolving Credit Facility in February 2022 (which was repaid in full on April 29, 2022).

Additionally, the weighted average annualized interest rate of our debt, net of the impact of the forward-starting interest rate swaps and treasury locks, decreased to 4.32% from 4.47% for the three months ended September 30, 2023 compared to three months ended September 30, 2022, respectively, as a result of the lower interest rate on the MGM Grand/Mandalay Bay JV CMBS debt. The weighted average annualized interest rate of our debt, net of the impact of the forward-starting interest rate swaps and treasury locks, decreased to 4.32% from 4.35%, during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, respectively, as a result of the lower interest rate on the MGM Grand/Mandalay Bay JV CMBS debt, partially offset by a higher weighted average effective interest rate on the April 2022 Notes, Exchange Notes and MGP OP Notes as compared to our outstanding debt during such earlier periods.

Interest Income

Interest income increased $4.3 million and $12.3 million during the three and nine months ended September 30, 2023, respectively, compared to the three and nine months ended September 30, 2022, respectively. The increase was primarily driven by a significant increase in the interest rates and income earned on our excess cash, coupled with an overall increase in our cash on hand throughout the current period as compared to the prior period.

Other (Losses) Gains

During the three and nine months ended September 30, 2023, we recognized a $1.1 million loss and $4.3 million gain in Other (losses) gains, respectively, which primarily relate to the sale of excess land in April 2023 and foreign currency remeasurement adjustments associated with our investments in Canada. In connection with the PURE Canadian Gaming Transaction and Century Canadian Portfolio Transaction, we entered into intercompany debt and drew C$140.0 million on the Revolving Credit Facility and C$75.0 million, respectively, both of which are denominated in CAD and, since such debt is held at entities with USD as their functional currency, certain of the related assets and liabilities are remeasured through the Statement of Operations. There is no comparable amount during the three and nine months ended September 30, 2022, as we did not have any foreign investments or sales of land during such time.

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RECONCILIATION OF NON-GAAP MEASURES

We present VICI’s Funds From Operations (“FFO”), FFO per share, Adjusted Funds From Operations (“AFFO”), AFFO per share, and Adjusted EBITDA, which are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). These are non-GAAP financial measures and should not be ~~negatively impacted. Additionally,~~construed as alternatives to net income or as an indicator of operating performance (as determined in accordance with GAAP). We believe FFO, FFO per share, AFFO, AFFO per share and Adjusted EBITDA provide a meaningful perspective of the underlying operating performance of VICI’s business.

FFO is a non-GAAP financial measure that is considered a supplemental measure for the real estate industry and a supplement to GAAP measures. Consistent with the definition used by the National Association of Real Estate Investment Trusts (NAREIT), we define FFO as VICI’s net income (or loss) attributable to common stockholders (computed in accordance with GAAP) excluding (i) gains (or losses) from sales of certain real estate assets, (ii) depreciation and amortization related to real estate, (iii) gains and losses from change in control, (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in ~~discretionary~~the value of depreciable real estate held by the entity and (v) our proportionate share of such adjustments from our investment in unconsolidated affiliate.

AFFO is a non-GAAP financial measure that we use as a supplemental operating measure to evaluate VICI’s performance. We calculate VICI’s AFFO by adding or subtracting from FFO non-cash leasing and financing adjustments, non-cash change in allowance for credit losses, non-cash stock-based compensation expense, transaction costs incurred in connection with the acquisition of real estate investments, amortization of debt issuance costs and original issue discount, other non-cash interest expense, non-real estate depreciation (which is comprised of the depreciation related to our golf course operations), capital expenditures (which are comprised of additions to property, plant and equipment related to our golf course operations), impairment charges related to non-depreciable real estate, gains (or losses) on debt extinguishment and interest rate swap settlements, other gains (losses), other non-recurring non-cash transactions, our proportionate share of non-cash adjustments from our investment in unconsolidated affiliate (including the amortization of any basis differences) with respect to certain of the foregoing and non-cash adjustments attributable to non-controlling interest with respect to certain of the foregoing.

We calculate VICI’s Adjusted EBITDA by adding or subtracting from AFFO contractual interest expense (including the impact of the forward-starting interest rate swaps and treasury locks) and interest income (collectively, interest expense, net), income tax expense and our proportionate share of such adjustments from our investment in unconsolidated affiliate.

These non-GAAP financial measures: (i) do not represent VICI’s cash flow from operations as defined by GAAP; (ii) should not be considered as an alternative to VICI’s net income as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) are not alternatives to VICI’s cash flow as a measure of liquidity. In addition, these measures should not be viewed as measures of liquidity, nor do they measure our ability to fund all of our cash needs, including our ability to make cash distributions to our stockholders, to fund capital improvements, or to make interest payments on our indebtedness. Investors are also cautioned that FFO, FFO per share, AFFO, AFFO per share and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures reported by other real estate companies, including REITs, due to the fact that not all real estate companies use the same definitions. Our presentation of these measures does not replace the presentation of VICI’s financial results in accordance with GAAP.

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Reconciliation of VICI’s Net Income to FFO, FFO per Share, AFFO, AFFO per Share and Adjusted EBITDA


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except share data and per share data)	2023		2022		2023		2022
Net income attributable to common stockholders	$	556,329	$	330,905	$	1,765,771	$	513,582
Real estate depreciation	—		—		—		—
Joint venture depreciation and non-controlling interest adjustments	—		9,743		1,426		17,053
FFO attributable to common stockholders	556,329		340,648		1,767,197		530,635
Non-cash leasing and financing adjustments	(131,344)		(108,553)		(383,688)		(230,522)
Non-cash change in allowance for credit losses	95,997		232,763		166,119		865,459
Non-cash stock-based compensation	4,019		3,493		11,517		9,359
Transaction and acquisition expenses	3,566		1,947		3,385		19,366
Amortization of debt issuance costs and original issue discount	17,283		10,326		53,645		38,294
Other depreciation	833		785		2,442		2,280
Capital expenditures	(444)		(437)		(1,762)		(1,093)
Gain on extinguishment of debt and interest rate swap settlements	—		—		—		(5,405)
Other losses (gains) (1)	1,122		—		(4,295)		—
Joint venture non-cash adjustments and non-controlling interest adjustments	253		(10,315)		2,066		(22,171)
AFFO attributable to common stockholders	547,614		470,657		1,616,626		1,206,202
Interest expense, net	180,303		156,004		543,042		333,838
Income tax expense	644		417		3,630		1,844
Joint venture interest expense and non-controlling interest adjustments	(2,155)		11,536		(3,176)		19,187
Adjusted EBITDA attributable to common stockholders	$	726,406	$	638,614	$	2,160,122	$	1,561,071

Net income per common share
Basic	$	0.55	$	0.34	$	1.75	$	0.61
Diluted	$	0.55	$	0.34	$	1.75	$	0.60
FFO per common share
Basic	$	0.55	$	0.35	$	1.75	$	0.63
Diluted	$	0.55	$	0.35	$	1.75	$	0.62




AFFO per common share
Basic	$	0.54	$	0.49	$	1.61	$	1.42
Diluted	$	0.54	$	0.49	$	1.60	$	1.42
Weighted average number of shares of common stock outstanding
Basic	1,012,986,784		962,573,646		1,007,110,068		848,839,357
Diluted	1,013,589,640		964,134,340		1,008,437,452		850,823,037

____________________

(1)Represents non-cash foreign currency remeasurement adjustments and gain on sale of land.

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity

As of September 30, 2023, our available cash balances, capacity under our Revolving Credit Facility and proceeds available from outstanding forward sale agreements were as follows:


(In thousands)	September 30, 2023
Cash and cash equivalents	$	510,884


Capacity under Revolving Credit Facility (1)	2,341,652

Proceeds available from settlement of Forward Sale Agreements (2)	807,245
Total	$	3,659,781

____________________

(1)In addition, the Revolving Credit Facility includes the option to increase the revolving loan commitments by up to $1.0 billion to the extent that any one or more lenders (from the syndicate or otherwise) agree to provide such additional credit extensions.

(2)Assumes the physical settlement of the 17,702,500 shares under the January 2023 Forward Sale Agreement, 327,306 shares under the June 2023 ATM Forward Sale Agreement, 271,071 shares under the July 2023 ATM Forward Sale Agreement and 7,572,281 shares under the September 2023 ATM Forward Sale Agreement at the forward sale price per share of $31.58, $31.67, $31.71 and $30.26, respectively, each as calculated as of September 30, 2023.

We believe that we have sufficient liquidity to meet our material cash requirements, including our contractual obligations, debt maturities and commitments as well as our additional funding requirements, primarily through currently available cash and cash equivalents, cash received under our Lease Agreements, existing borrowings from banks, including our undrawn capacity under our Revolving Credit Facility, and proceeds from future issuances of debt and equity securities (including issuances under the ATM Program) for the next 12 months and in future periods.

All of the Lease Agreements call for an initial term of between fifteen and thirty years with additional tenant renewal options and are designed to provide us with a reliable and predictable long-term revenue stream. Our cash flows from operations and our ability to access capital resources could be adversely affected due to uncertain economic factors and volatility in the financial and credit markets, including as a result of the current inflationary environment, sustained rising interest rates, equity market volatility, changes in consumer ~~spending brought about~~behavior and spending. In particular, we can provide no assurances that our tenants will not default on their leases or fail to make full rental payments if their businesses become challenged due to, among other things, current or future adverse economic conditions. See “Overview — Impact of Material Trends on our Business” above for additional detail. In the event our tenants are unable to make all of their contractual rent payments as provided by ~~weakened~~the Lease Agreements, we believe we have sufficient liquidity from the other sources discussed above to meet all of our contractual obligations for a significant period of time. For more information, refer to the risk factors incorporated by reference into Part II. Item 1A. Risk Factors herein from our Annual Report on Form 10-K for the year ended December 31, 2022.

Our ability to raise funds through the issuance of debt and equity securities and access to other third-party sources of capital in the future will be dependent on, among other things, general economic conditions, general market conditions for REITs and investment grade issuers, market perceptions, the trading price of our stock and uncertainties related to the macroeconomic environment. We will continue to analyze which sources of capital are most advantageous to us at any particular point in time, but financing through the capital markets may not be consistently available on terms we deem attractive, or at all.

Material Cash Requirements

Contractual Obligations

Our short-term obligations consist primarily of regular interest payments on our debt obligations, dividends to our common stockholders, distributions to the VICI OP unit holders, normal recurring operating expenses, recurring expenditures for corporate and administrative needs, certain lease and other contractual commitments related to our golf operations and certain non-recurring expenditures. For more information on our material contractual commitments, refer to Note 10 - Commitments and Contingent Liabilities.

Our long-term obligations consist primarily of principal payments on our outstanding debt obligations and future funding commitments under our lease and loan agreements. As of September 30, 2023, we have $17.1 billion of debt obligations outstanding. We have $1.1 billion of debt that matures on May 1, 2024. For a summary of principal debt balances and their maturity dates and principal terms, refer to Note 7 - Debt. For a summary of our future funding commitments under our loan portfolio, refer to Note 4 - Real Estate Portfolio.

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Pursuant to our Lease Agreements, capital expenditures for properties under the Lease Agreements are the responsibility of the tenants. Minimum capital expenditure spending requirements of the tenants pursuant to the Lease Agreements are described in Note 4 - Real Estate Portfolio.

Information concerning our material contractual obligations and commitments to make future payments under contracts such as ~~but not limited to, lackluster recoveries from recessions, high unemployment levels, higher income taxes, low levels of consumer confidence, weakness~~our indebtedness, future funding commitments under our loans and Partner Property Growth Fund and future contractual operating commitments (such as future lease payments under our corporate lease) are included in the ~~housing market, cultural~~following table as of September 30, 2023. Amounts in this table omit, among other things, non-contractual commitments and ~~demographic changes~~items such as dividends and ~~increased stock market volatility may negatively impact our revenues~~recurring or non-recurring operating expenses and ~~operating cash flows.~~other expenditures, including acquisitions and other investments:

~~A substantial portion~~


		Payments Due By Period
(In thousands)		Total		2023 (remaining)		2024		2025		2026		2027 and Thereafter
Long-term debt, principal
	Senior Unsecured Notes	$	13,950,000	$	—	$	1,050,000	$	2,050,000	$	1,750,000	$	9,100,000
	MGM Grand/Mandalay Bay JV CMBS Debt	3,000,000		—		—		—		—		3,000,000



























	Revolving Credit Facility	158,348		—		—		—		158,348		—

Scheduled interest payments (1)		5,001,673		198,624		742,071		674,436		621,885		2,764,657
Total debt contractual obligations		22,110,021		198,624		1,792,071		2,724,436		2,530,233		14,864,657

Leases and contracts
	Future funding commitments – loan investments and Partner Property Growth Fund (2)	765,000		228,368		481,335		46,797		—		8,500
	Golf course operating lease and contractual commitments	42,639		519		2,112		2,153		2,197		35,658
	Corporate office leases	18,591		222		357		1,016		1,742		15,254
Total leases and contract obligations		826,230		229,109		483,804		49,966		3,939		59,412

Total contractual commitments		$	22,936,251	$	427,733	$	2,275,875	$	2,774,402	$	2,534,172	$	14,924,069

____________________

(1) Estimated interest payments on variable interest loans are based on the CDOR rate as of September 30, 2023.

(2) The allocation of our future funding commitments is based on a construction draw schedule, commitment funding date, expiration date or other information, as applicable; however, we may be obligated to fund these commitments earlier than such applicable date.

Additional Funding Requirements

In addition to the contractual obligations and commitments set forth in the table above, we have and may enter into additional agreements that commit us to potentially acquire properties in the future, fund future property improvements or otherwise provide capital to our tenants, borrowers and other counterparties, including through our put-call agreements and Partner Property Growth Fund. As of September 30, 2023, we had $1.0 billion of additional potential future funding commitments under our Partner Property Growth Fund agreements, the use of which are at the discretion of our tenants and will be dependent upon independent decisions made by our tenants with respect to any capital improvement projects and the source of funds for such projects, as well as the total funding ultimately provided under such arrangements.

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Cash Flow Analysis

The table below summarizes our cash flows for the nine months ended September 30, 2023 and 2022:


		Nine Months Ended September 30,
(In thousands)		2023		2022		Variance
Cash, cash equivalents and restricted cash
	Provided by operating activities	$	1,604,517	$	1,455,477	$	149,040
	Used in investing activities	(1,944,885)		(8,889,098)		6,944,213
	Provided by financing activities	642,441		7,212,390		(6,569,949)
	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(122)		—		(122)
	Net increase (decrease) in cash, cash equivalents and restricted cash	301,951		(221,231)		523,182
	Cash, cash equivalents and restricted cash, beginning of period	208,933		739,614		(530,681)
	Cash, cash equivalents and restricted cash, end of period	$	510,884	$	518,383	$	(7,499)

Cash Flows from Operating Activities

Net cash provided by operating activities increased $149.0 million for the nine months ended September 30, 2023 compared with the nine months ended September 30, 2022. The increase is primarily driven by an increase in cash rental payments from the addition of the MGM Master Lease, Foundation Master Lease, MGM Grand/Mandalay Bay Lease, PURE Master Lease and the Rocky Gap Casino and Century Canadian Portfolio component of the Century Master Lease to our real estate portfolio, the annual rent escalators on our Caesars Leases and certain of our other Lease Agreements, and an increase in loan income as a result of an increase in the principal balance of our loan and securities portfolio.

Cash Flows from Investing Activities

Net cash used in investing activities decreased $6,944.2 million for the nine months ended September 30, 2023 compared with the nine months ended September 30, 2022.

During the nine months ended September 30, 2023, the primary sources and uses of cash from investing activities included:

•Net payments of $1,266.9 million, including acquisition costs, in connection with the MGM Grand/Mandalay Bay JV Interest Acquisition;

•Principal repayment of the Forum Convention Center Mortgage Loan of $400.0 million;

•Disbursements to ~~satisfy~~fund investments in our loan and securities portfolio in the amount of $702.1 million;

•Maturities of short-term investments of $217.3 million;

•Payments for the PURE Canadian Gaming Transaction for a total cost of $203.3 million, including acquisition costs;

•Payments for the Rocky Gap Casino Transaction for a total cost of $205.8 million, including acquisition costs;

•Payments for the Century Canadian Portfolio Transaction for a total cost of $164.9 million, including acquisition costs;

•Payments to fund Partner Property Growth Fund investments in the amount of $25.4 million;

•Proceeds from the sale of land of $6.2 million;

•Acquisition of property and equipment costs of $1.9 million; and

•Capitalized transaction costs of $0.8 million.

During the nine months ended September 30, 2022, the primary sources and uses of cash from investing activities include:

•Net payments of $4,574.5 million in relation to the closing of the MGP Transactions, including $4,404.0 million in connection with the redemption of the majority of the MGP units held by MGM, $90.0 million in connection with the repayment of the outstanding MGP revolving credit facility and acquisition costs;

•Payments for the Venetian Acquisition for a total cost of $4,012.8 million, including acquisition costs;

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•Investment in short-term investments of $207.7 million;

•Payments to fund portions of certain development loans in the amount of $87.2 million; and

•Capitalized transaction costs of $6.8 million.

Cash Flows from Financing Activities

Net cash provided by financing activities decreased $6,569.9 million for the nine months ended September 30, 2023, compared with the nine months ended September 30, 2022.

During the nine months ended September 30, 2023, the primary sources and uses of cash in financing activities included:

•Net proceeds of $1,672.4 million from the issuance of an aggregate 53,192,592 shares of our common stock pursuant to the full physical settlement of the November 2022 Forward Sale Agreements, June 2022 ATM Forward Sale Agreement, August 2022 ATM Forward Sale Agreement, December 2022 ATM Forward Sale Agreement, and January 2023 Forward Sale Agreement;

•Dividend payments of $1,161.8 million;

•Draw of $408.2 million on our Revolving Credit Facility;

•Repayment of $250.0 million on our Revolving Credit Facility;

•Repurchase of shares of common stock for tax withholding in connection with the vesting of employee stock compensation of $5.0 million; and

•Distributions of $21.5 million to non-controlling interests.

During the nine months ended September 30, 2022, the primary sources and uses of cash from financing activities included:

•Net proceeds of $3,219.1 million from the issuance of an aggregate 119,000,000 shares of our common stock pursuant to the full physical settlement of the September 2021 Forward Sale Agreements and March 2021 Forward Sale Agreements;

•Gross proceeds of $5,000.0 million from the April 2022 Notes offering;

•Initial draw and repayment of $600.0 million on our Revolving Credit Facility;

•Dividend payments of $843.7 million;

•Debt issuance costs of $146.2 million;

•Repurchase of shares of common stock for tax withholding in connection with the vesting of employee stock compensation of $6.1 million; and

•Distributions of $10.7 million to non-controlling interest.

Debt

For a summary of our debt ~~service~~ obligations as of September 30, 2023, refer to Note 7 - Debt.

Covenants

Our debt obligations are subject to certain customary financial and protective covenants that restrict our ~~distribution obligations~~ability to incur additional debt, sell certain asset and restrict certain payments, among other things. In addition, these covenants are subject to a number of important exceptions and qualifications, including, with respect to the restricted payments covenant, the ability to make unlimited restricted payments to maintain our ~~status~~REIT status. At September 30, 2023, we were in compliance with all debt-related covenants.

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Distribution Policy

We intend to make regular quarterly distributions to holders of shares of our common stock. Dividends declared (on a per share basis) during the nine months ended September 30, 2023 and 2022 were as ~~a REIT and avoid current entity level U.S.~~ follows:

Nine Months Ended September 30, 2023

Declaration Date

Record Date

Payment Date

Period

Dividend

March 9, 2023

March 23, 2023

April 6, 2023

January 1, 2023 - March 31, 2023

0.3900

June 8, 2023

June 22, 2023

July 6, 2023

April 1, 2023 - June 30, 2023

0.3900

September 7, 2023

September 21, 2023

October 5, 2023

July 1, 2023 - September 30, 2023

0.4150

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, 2021 - June 30, 2022

0.3600

September 8, 2022

September 22, 2022

October 6, 2022

July 1, 2022 - September 30, 2022

0.3900

Federal income ~~taxes, limiting our ability to pursue our growth strategy.~~

At the Emergence Date, we had an aggregate of $4,917.0 million of outstanding indebtedness under our Term Loans, our First Lien Notes, Second Lien Notes, the CPLV Market Debt and the CPLV Mezzanine Debt. On November 6, 2017, $250.0 million of the CPLV Mezzanine Debt was automatically exchanged for Company Stock. Pursuant to the terms of the agreements governing the outstanding indebtedness and after giving effect to the Mandatory Conversions, we will be required to make annual debt service payments of approximately $248.3 million during our first year of operation.

~~In addition, the Internal Revenue Code (“Code”) generally~~tax law requires that a REIT distribute annually at least 90% of its REIT taxable income ~~to maintain its status as a REIT and 100% of its REIT taxable income to avoid incurring entity level tax,~~(with certain adjustments), determined without regard to the ~~deduction for~~ dividends paid deduction and excluding ~~net capital gains.~~ ~~VICI REIT’s TRS is also subject to income tax at regular corporate rates on~~ any ~~of its taxable income.~~ In order to maintain our status as a REIT and avoid current entity level U.S. Federal income taxes, a substantial portion of our cash flow after operating expenses and debt service will be required to be distributed.

Because of the limitations on the amount of cash available to us after satisfying our debt service obligations and our distribution obligations to maintain our status as a REIT and avoid current entity level U.S. Federal income taxes, our ability to pursue our growth strategies will be limited.

We face extensive regulation from gaming and other regulatory authorities, and our charter provides that any of our shares held by investors who are found to be unsuitable by state gaming regulatory authorities are subject to redemption.

The ownership, operation, and management of gaming and racing facilities are subject to pervasive regulation. These gaming and racing regulations impact our gaming and racing tenants and persons associated with our gaming and racing facilities, which in many jurisdictions include us as the landlord and owner of the real estate. Certain gaming authorities in the jurisdictions in which we hold properties may require us and/or our affiliates to maintain a license as a key business entity or supplier because of our status as landlord. Gaming authorities also retain great discretion to require us to be found suitable as a landlord, and certain of our stockholders, officers and directors may be required to be found suitable as well.

In many jurisdictions, gaming laws can require certain of our shareholders to file an application, be investigated, and qualify or have his, her or its suitability determined by gaming authorities. Gaming authorities have very broad discretion in determining whether an applicant should be deemed suitable. Subject to certain administrative proceeding requirements, the gaming regulators have the authority to deny any application or limit, condition, restrict, revoke or suspend any license, registration, finding of

~~suitability or approval, or fine any person licensed, registered or found suitable or approved, for any cause deemed reasonable by the gaming authorities.~~

Gaming authorities may conduct investigations into the conduct or associations of our directors, officers, key employees or investors to ensure compliance with applicable standards. If we are required to be found suitable and are found suitable as a landlord, we will be registered as a public company with the gaming authorities and will be subject to disciplinary action if, after we receive notice that a person is unsuitable to be a shareholder or to have any other relationship with us, we:

• ~~pay that person any distribution or interest upon any of our voting securities;~~

• ~~allow that person to exercise, directly or indirectly, any voting right conferred through securities held by that person;~~

• ~~pay remuneration in any form to that person for services rendered or otherwise; or~~

fail to pursue all lawful efforts to require such unsuitable person to relinquish his or her voting securities, including, if necessary, the immediate purchase of the voting securities for cash at fair market value.

Many jurisdictions also require any person who acquires beneficial ownership of more than a certain percentage of voting securities of a gaming company and, in some jurisdictions, non-voting securities, typically 5% of a publicly-traded company, to report the acquisition to gaming authorities, and gaming authorities may require such holders to apply for qualification, licensure or a finding of suitability, subject to limited exceptions for “institutional investors” that hold a company’s voting securities for passive investment purposes only. Some jurisdictions may also limit the number of gaming licenses in which a person may hold an ownership or a controlling interest.

Further, our directors, officers, key employees and investors in our shares must meet approval standards of certain gaming regulatory authorities. If such gaming regulatory authorities were to find such a person or investor unsuitable, we may be required to sever our relationship with that person or the investor may be required to dispose of his, her or its interest in us. Our charter provides that all of our shares held by investors who are found to be unsuitable by regulatory authorities are subject to redemption upon our receipt of notice of such finding. Gaming regulatory agencies may conduct investigations into the conduct or associations of our directors, officers, key employees or investors to ensure compliance with applicable standards.

Additionally, substantially all material loans, significant acquisitions, leases, sales of securities and similar financing transactions by us and our subsidiaries must be reported to and in some cases approved by gaming authorities in advance of the transaction. Neither we nor any of our subsidiaries may make a public offering of securities without the prior approval of certain gaming authorities. Changes in control through merger, consolidation, stock or asset acquisitions, management or consulting agreements, or otherwise may be subject to receipt of prior approval of certain gaming authorities. Entities seeking to acquire control of us or one of our subsidiaries (and certain of our affiliates) must satisfy gaming authorities with respect to a variety of stringent standards prior to assuming control. Failure to satisfy the stringent licensing standards may preclude entities from acquiring control of us or one of our subsidiaries (and certain of our affiliates) and/or require the entities to divest such control.

~~Required regulatory approvals can delay or prohibit transfers of our gaming properties, which could result in periods in which we are unable to receive rent for such properties.~~

New CEOC (and any other future tenants of our gaming properties) are required to be licensed under applicable law in order to operate any of our gaming properties as gaming facilities. If the Master Leases or any future lease agreements we will enter into are terminated (which could be required by a regulatory agency) or expire, any new tenant must be licensed and receive other regulatory approvals to operate the properties as gaming facilities. Any delay in or inability of the new tenant to receive required licenses and other regulatory approvals from the applicable state and county government agencies may prolong the period during which we are unable to collect the applicable rent. Further, in the event that the Master Leases or future agreements are terminated or expire and a new tenant is not licensed or fails to receive other regulatory approvals, the properties may not be operated as gaming facilities and we will not be able to collect the applicable rent. Moreover, we may be unable to transfer or sell the affected properties as gaming properties, which would adversely impact our financial condition and results of operation.

~~New CEOC may choose not to renew the Master Leases.~~

The Master Leases have an initial lease term of 15 years with the potential to extend the term for four additional five-year terms thereafter, solely at the option of New CEOC. At the expiration of the initial lease term or of any additional renewal term thereafter, New CEOC may choose not to renew the Master Leases. If the Master Leases expire without renewal, and we are not able to find suitable tenants to replace New CEOC, our results of operations and our ability to maintain previous levels of distributions to stockholders may be adversely affected.

~~The Master Leases may restrict our ability to sell the properties.~~

Our ability to sell or dispose of our properties may be hindered by the fact that such properties are subject to the Master Leases, as the terms of the Master Leases require that a purchaser enter into a severance lease with New CEOC for the sold property on substantially the same terms as contained in the applicable Master Lease, which may make our properties less attractive to a potential buyer than alternative properties that may be for sale.

We have a substantial amount of indebtedness outstanding, which may affect our ability to pay distributions, may expose us to interest rate fluctuation risk and may expose us to the risk of default under our debt obligations.

Payments of principal and interest under this indebtedness, or any other instruments governing debt we may incur in the future, may leave us with insufficient cash resources to operate our properties or to pay the distributions currently contemplated or necessary to qualify or maintain qualification as a REIT. Our substantial outstanding indebtedness or future indebtedness, and the limitations imposed on us by our debt agreements, could have other significant adverse consequences, including the following:

~~our cash flow may be insufficient to meet our required principal and interest payments;~~

we may be unable to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to capitalize upon emerging acquisition opportunities, including exercising our rights of first refusal and call rights described herein, or meet operational needs;

~~we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness;~~

~~we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms;~~

~~we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate payment of outstanding loans;~~

we may be unable to hedge floating rate debt, counterparties may fail to honor their obligations under our hedge agreements and these agreements may not effectively hedge interest rate fluctuation risk; and

~~we may default on our obligations and the lenders or mortgagees may foreclose on our properties that secure their loans.~~

If any one of these events were to occur, our financial condition, results of operations, cash flows, market price of our common stock and ability to satisfy our debt service obligations and to pay distributions to you could be adversely affected. In addition, the foreclosure on our properties could create taxable income without accompanying cash proceeds, which could result in entity level taxes to us or could adversely affect our ability to meet the distribution requirements necessary to qualify as a REIT.

~~Our ability to refinance our indebtedness as it becomes due depends on many factors, some of which are beyond our control.~~

The Term Loans, the First Lien Notes, the CPLV Market Debt and the CPLV Mezzanine Debt become due in 2022 and the Second Lien Notes become due in 2023. Our ability to refinance these indebtedness, and any other of our indebtedness, will depend, in part, on our financial performance and condition and economic, financial, competitive, legislative, regulatory and other factors. Many of these factors are beyond our control. We cannot assure you that we will be able to refinance the Term Loans, the First Lien Notes, the Second Lien Notes, the CPLV Market Debt and the CPLV Mezzanine Debt or any of our other indebtedness as it becomes due, on commercially reasonable terms or at all. If we are not able to refinance our indebtedness as it becomes due, we will be obligated to pay such indebtedness with cash from our operations and we may not have sufficient cash to do so.

~~Covenants in our debt agreements limit our operational flexibility, and a covenant breach or default could materially adversely affect our business, financial position or results of operations.~~

The agreements governing our indebtedness contain customary covenants, including restrictions on our ability to grant liens on our assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations and pay certain dividends and other restricted payments. These covenants could impair our ability to grow our business, take advantage of attractive business opportunities or successfully compete. A breach of any of these covenants or covenants under any other agreements governing our indebtedness could result in an event of default. Cross-default provisions in our debt agreements could cause an event of default under one debt agreement to trigger an event of default under our other debt agreements. Upon the occurrence of an event of default under any of our debt agreements, the lenders could elect to declare all outstanding debt under such agreements to be immediately due and payable. If we were unable to repay or refinance the accelerated debt, the lenders could proceed against any assets pledged to secure that debt, including foreclosing on or requiring the sale of our properties, and our assets may not be sufficient to repay such debt in full. Covenants that limit our operational flexibility as well as defaults under our debt instruments could have a material adverse effect on our business, financial position or results of operations.

~~Our debt service requirements expose us to the possibility of foreclosure, which could result in the loss of our investment in our properties.~~

Our indebtedness is collateralized by substantially all of our properties. If we are unable to meet the required debt service payments, the lenders of our indebtedness could foreclose on our properties and we could lose our investment. Alternatively, if we decide to sell assets in the current market to raise funds to repay matured debt, it is possible that the collateralized properties will be disposed of at a loss.

~~A rise in interest rates may increase our overall interest rate expense and could adversely affect our stock price.~~

The senior secured credit facilities and the First Lien Notes are subject to variable interest rates. A rise in interest rates may increase our overall interest rate expense and have an adverse impact on distributions to our stockholders. The risk presented by holding variable-rate indebtedness can be managed or mitigated by utilizing interest rate protection products. However, there is no assurance that we will utilize any of these products or that such products will be available to us. In addition, in the event of a rise in interest rates, we may be unable to replace maturing debt with new debt at equal or better interest rates.

Further, the dividend yield on our common stock, as a percentage of the price of such common stock, will influence the price of such common stock. Thus, an increase in market interest rates may lead prospective purchasers of our common stock to expect a higher dividend yield, which would adversely affect the market price of our common stock.

~~We may not be able to purchase the properties subject to the Call Right Agreements if we are unable to obtain additional financing.~~

The Call Right Agreements provide for our right for up to five years after the Emergence Date to enter into binding agreements to purchase the real property interests and all improvements associated with Harrah’s Atlantic City, Harrah’s Laughlin, and/or Harrah’s New Orleans from affiliates of New CEOC that currently own such properties. In order to exercise these call rights, we may be required to secure additional financing and our substantial level of indebtedness following the Emergence Date or other factors could limit our ability to do so. If we are unable to obtain financing on terms acceptable to us, we may not be able to exercise our call rights and acquire these properties. There can be no assurance that we will be able to exercise our call rights.

~~Our pursuit of investments in, and acquisitions or development of, additional properties may be unsuccessful or fail to meet our expectations.~~

We intend to pursue acquisitions of additional properties and seek acquisitions and other strategic opportunities. Accordingly, we may often be engaged in evaluating potential transactions and other strategic alternatives. In addition, from time to time, we may engage in discussions that may result in one or more transactions. Although there is uncertainty that any discussions will result in definitive agreements or the completion of any transaction, we may devote a significant amount of our management resources to such a transaction, which could negatively impact our operations. We may incur significant costs in connection with seeking acquisitions or other strategic opportunities regardless of whether the transaction is completed and in combining our operations if such a transaction is completed.

We operate in a highly competitive industry and face competition from other REITs, investment companies, private equity and hedge fund investors, sovereign funds, lenders, gaming companies and other investors, some of whom are significantly larger and have greater resources and lower costs of capital. Increased competition will make it more challenging to identify and successfully capitalize on acquisition opportunities that meet our investment objectives. If we cannot identify and purchase a sufficient quantity of gaming properties and other properties at favorable prices or if we are unable to finance acquisitions on commercially favorable terms, our business, financial position or results of operations could be materially adversely affected. Additionally, the fact that we must distribute 90% of our net taxable income in order to maintain our qualification as a REIT may limit our ability to rely upon rental payments from our leased properties or subsequently acquired properties in order to finance acquisitions. As a result, if debt or equity financing is not available on acceptable terms, further acquisitions might be limited or curtailed.

Investments in and acquisitions of gaming properties and other properties we might seek to acquire entail risks associated with real estate investments generally, including that the investment’s performance will fail to meet expectations, that the cost estimates for necessary property improvements will prove inaccurate or the operator or manager will underperform. Real estate development projects present other risks, including construction delays or cost overruns that increase expenses, the inability to obtain required zoning, occupancy and other governmental approvals and permits on a timely basis, and the incurrence of significant development costs prior to completion of the project.

Further, even if we were able to acquire additional properties in the future, there is no guarantee that such properties would be able to maintain their historical performance. In addition, our financing of these acquisitions could negatively impact our cash flows and liquidity, require us to incur substantial debt or involve the issuance of substantial new equity, which would be dilutive to existing stockholders. We have a substantial amount of indebtedness outstanding, which may affect our ability to pay distributions, may expose us to interest rate fluctuation risk and may expose us to the risk of default under our debt obligations. In addition, we cannot assure you that we will be successful in implementing our growth strategy or that any expansion will improve operating results. The failure to identify and acquire new properties effectively, or the failure of any acquired properties to perform as expected, could have a material adverse effect on us and our ability to make distributions to our stockholders.

We may sell or divest different properties or assets after an evaluation of our portfolio of businesses. Such sales or divestitures would affect our costs, revenues, profitability and financial position.

From time to time, we may evaluate our properties and may, as a result, sell or attempt to sell, divest, or spin-off different properties or assets. These sales or divestitures would affect our costs, revenues, profitability, financial position, liquidity and our ability to comply with debt covenants. Divestitures have inherent risks, including possible delays in closing transactions (including potential difficulties in obtaining regulatory approvals), the risk of lower-than-expected sales proceeds for the divested businesses, and potential post-closing claims for indemnification. In addition, current economic conditions and relatively illiquid real estate markets may result in fewer potential bidders and unsuccessful sales efforts.

~~Our properties are subject to risks from natural disasters such as earthquakes, hurricanes and severe weather.~~

Our properties are located in areas that may be subject to natural disasters, such as earthquakes, and extreme weather conditions, including, but not limited to, hurricanes. Such natural disasters or extreme weather conditions may interrupt operations at the casinos, damage our properties, and reduce the number of customers who visit our facilities in such areas. A severe earthquake could damage or destroy our properties. In addition, our operations could be adversely impacted by a drought or other cause of water shortage. A severe drought of extensive duration experienced in Las Vegas or in the other regions in which we operate could adversely affect the business and results of operations at our properties. Although New CEOC is required to maintain both property and business interruption insurance coverage, such coverage is subject to deductibles and limits on maximum benefits, including limitation on the coverage period for business interruption, and we cannot assure you that we or New CEOC will be able to fully insure such losses or fully collect, if at all, on claims resulting from such natural disasters. While the Master Leases require, and new lease agreements are expected to require, that comprehensive insurance and hazard insurance be maintained by New CEOC, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, that may be uninsurable or not economically insurable. Insurance coverage may not be sufficient to pay the full current market value or current replacement cost of a loss. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it infeasible to use insurance proceeds to replace the property after such property has been damaged or destroyed. Under such circumstances, the insurance proceeds received might not be adequate to restore the economic position with respect to such property. If we experience a loss that is uninsured or that exceeds our policy coverage limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties.

In addition, the Master Leases allow New CEOC to remove a property from the Non-CPLV Lease Agreements and to terminate the CPLV Lease Agreements during the final two years of the initial lease terms if the cost to rebuild or restore a property in connection with a casualty event exceeds 25% of total property fair market value. Similarly, if a condemnation event occurs that renders a facility unsuitable for its primary intended use, New CEOC may remove the property from the Non-CPLV Lease Agreements and may terminate the CPLV Lease Agreements. If a property is removed from the Non-CPLV Lease Agreements or if the CPLV Lease Agreements is terminated, we would lose the rent associated with the related facility, which would have a negative impact on our revenues. In this event, following termination of the lease of a property, even if we are able to restore the affected property, we could be limited to selling or leasing such property to a new tenant in order to obtain an alternate source of revenue, which may not happen on comparable terms or at all.

~~Certain properties are subject to restrictions pursuant to reciprocal easement agreements, operating agreements or similar agreements.~~

Many of the properties that we own are, and properties that we may acquire in the future may be, subject to use restrictions and/or operational requirements imposed pursuant to ground leases, restrictive covenants or conditions, reciprocal easement agreements or operating agreements (collectively, “Property Restrictions”) that could adversely affect our ability to lease space to third parties. Such Property Restrictions could include, for example, limitations on alterations, changes, expansions, or reconfiguration of properties; limitations on use of properties; limitations affecting parking requirements; or restrictions on exterior or interior signage or facades. In certain cases, consent of the other party or parties to such agreements may be required when altering, reconfiguring, expanding or redeveloping. Failure to secure such consents when necessary may harm our ability to execute leasing strategies, which could adversely affect our business, financial condition or results of operations.

~~The loss of the services of key personnel could have a material adverse effect on our business.~~

~~Our success depends in large part upon the leadership and performance of our executive management team, particularly~~ ~~Ed Pitoniak, our chief executive officer;~~ John Payne, our chief operating officer; and Mary Beth Higgins, our chief financial officer. Any unforeseen loss of our executive officers’ services, or any negative market or industry perception with respect to them or arising from their loss, could have a material adverse effect on our businesses. We do not have key man or similar life insurance policies covering members of our senior management. We have employment agreements with our executive officers, but these agreements do not guarantee that any given executive will remain with us, and there can be no assurance that any such officers will remain with us. The appointment of certain key members of our executive management team will be subject to regulatory approvals based upon suitability determinations by gaming regulatory authorities in the jurisdictions where our properties are located. If any of our executive officers is found unsuitable by any such gaming regulatory authorities, or if we otherwise lose their services, we would have to find alternative candidates and may not be able to successfully manage our business or achieve our business objectives.

~~If we cannot attract, retain and motivate employees, we may be unable to compete effectively and lose the ability to improve and expand our businesses.~~

Our success and ability to grow depend, in part, on our ability to hire, retain and motivate sufficient numbers of talented people with the increasingly diverse skills needed to serve clients and expand our business. We face intense competition for highly qualified, specialized technical, managerial, and consulting personnel. Recruiting, training, retention and benefit costs place significant demands on our resources. The inability to attract qualified employees in sufficient numbers to meet particular demands or the loss of a significant number of our employees could have an adverse effect on us.

~~We may become involved in legal proceedings that, if adversely adjudicated or settled, could have a material adverse effect on our business, financial condition, results of operations, and prospects.~~

The nature of our business subjects us to the risk of lawsuits related to matters incidental to our business filed by our tenants, customers, employees, competitors, business partners and others. As with all legal proceedings, no assurance can be provided as to the outcome of these matters and in general, legal proceedings can be expensive and time consuming. We may not be successful in the defense or prosecution of these lawsuits, which could result in settlements or damages that could significantly impact our business, financial condition and results of operations.

~~Environmental compliance costs and liabilities associated with real estate properties owned by us may materially impair the value of those investments.~~

As an owner of real property, we are subject to various federal, state and local environmental and health and safety laws and regulations. Although we do not operate or manage most of our properties, we may be held primarily or jointly and severally liable for costs relating to the investigation and clean-up of any property from which there has been a release or threatened release of a regulated material as well as other affected properties, regardless of whether we knew of or caused the release. Further, some environmental laws create a lien on a contaminated site in favor of the government for damages and the costs the government incurs in connection with such contamination.

Although under the Master Leases, New CEOC is required to indemnify us for certain environmental liabilities, including environmental liabilities it causes, the amount of such liabilities could exceed the financial ability of New CEOC to fully indemnify us. In addition, the presence of contamination or the failure to remediate contamination may adversely affect our ability to sell or lease our properties or to borrow using our properties as collateral.

~~We may be required to contribute insurance proceeds with respect to casualty events at our properties to the lenders under our debt financing agreements.~~

In the event that we were to receive insurance proceeds with respect to a casualty event at any of our properties, we may be required under the terms of our debt financing agreements to contribute all or a portion of those proceeds to the repayment of such debt, which may prevent us from restoring such properties to their prior state. If the remainder of the proceeds (after any such required repayment) were insufficient to make the repairs necessary to restore the damaged properties to a condition substantially equivalent to its state immediately prior to the casualty, we may not have sufficient liquidity to otherwise fund these repairs and may be required to obtain additional financing, which could adversely affect our business, financial position or results of operations.

If we fail to establish and maintain an effective system of integrated internal controls, we may not be able to report our financial results accurately, which could have a material adverse effect on us.

As a reporting company, we are required to develop and implement substantial control systems, policies and procedures in order to maintain our REIT qualification and satisfy our periodic SEC reporting requirements. We cannot assure you that we will be able to successfully develop and implement these systems, policies and procedures and to operate our company or that any such development and implementation will be effective.

Failure to do so could jeopardize our status as a REIT or as a reporting company, and the loss of such statuses would materially and adversely affect us. If we fail to develop, implement or maintain proper overall business controls, including as required to support our growth, our results of operations could be harmed or we could fail to meet our reporting obligations. In addition, the existence of a material weakness or significant deficiency could result in errors in our financial statements that could require a restatement, cause us to fail to meet our public company reporting obligations and cause investors to lose confidence in our reported financial information, which could have a material adverse effect on us.

~~Risk Factors Relating to the Restructuring~~

~~We may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as a stand-alone company primarily focused on owning a portfolio of gaming properties.~~

We have no historical operations as an independent company and may not have the infrastructure and personnel necessary to operate as a separate company. As a stand-alone entity, we are subject to, and responsible for, regulatory compliance, including periodic public filings with the SEC and compliance with the listing requirements of the exchange where we list our common stock, if any, and with applicable state gaming rules and regulations, as well as compliance with generally applicable tax and accounting rules. Because our business did not operate as a stand-alone company until the Emergence Date, we cannot ensure that we will be able to successfully implement the infrastructure or retain the personnel necessary to operate as a stand-alone company or that we will not incur costs in excess of anticipated costs to establish such infrastructure and retain such personnel.

~~The historical financial information included in this Quarterly Report on Form 10-Q may not be a reliable indicator of future results.~~

We are a newly organized company with no operating history. Therefore, our growth prospects must be considered in light of the risks, expenses and difficulties frequently encountered when any new business is formed. We cannot assure you that we will be able to successfully operate our business profitably or implement our operating policies and investment strategy. Further, we have not historically operated as a REIT, which may place us at a competitive disadvantage that our competitors may exploit.

The financial statements included herein may not reflect what our business, financial position or results of operations will be in the future now that we are a separate, public company. Significant changes have occurred in our cost structure, financing and business operations as a result of our operation as a stand-alone company and the entry into transactions with CEOC that have not existed historically, including the Master Leases.

~~We may be unable to achieve the benefits that the Caesars Debtors expected to achieve from the separation of the Caesars Debtors into New CEOC and our company.~~

We believe that as a company independent from New CEOC, we have the ability, subject to the Right of First Refusal Agreement, to pursue transactions with other gaming operators that would not pursue transactions with New CEOC as a current competitor, to fund acquisitions with its equity on significantly more favorable terms than those that would be available to New CEOC, to diversify into different businesses in which New CEOC, as a practical matter, could not diversify, and to pursue certain transactions that New CEOC otherwise would be disadvantaged by or precluded from pursuing due to regulatory constraints. However, we may not be able to achieve some or all of the benefits that the Caesars Debtors expected us to achieve as a company independent from New CEOC in the time the Caesars Debtors expected, if at all.

~~Some members of our management team may have limited experience operating as part of a REIT structure.~~

The requirements for qualifying as a REIT are highly technical and complex. We had not operated as a REIT prior to the Emergence Date, and some members of our and our subsidiaries’ management teams may have limited experience in complying with the income, asset, and other limitations imposed by the real estate investment provisions of the Code. Any failure to comply with those provisions in a timely manner could prevent us from qualifying as a REIT or could force us to pay unexpected taxes and penalties. In such event, our net income could be reduced and we could incur a loss, which could materially harm our business, financial position, or results of operations.

In addition, there is no assurance that any past experience with the acquisition, development, and disposition of gaming facilities will be sufficient to enable us to successfully manage our portfolio of properties as required by our business plan or the REIT provisions of the Code.

~~We cannot be certain that the bankruptcy proceedings will not adversely affect our operations going forward.~~

Our properties were operating in bankruptcy from January 15, 2015 to October 6, 2017 and we cannot assure you that having been subject to bankruptcy will not adversely affect our operations going forward. For example, we may be subject to claims that were not discharged in the bankruptcy proceedings, which could have a material adverse effect on our results of operations and profitability. Substantially all, if not all, of the material claims against the Caesars Debtors that arose prior to the date of the bankruptcy filing were addressed during the Chapter 11 proceedings. In addition, the Bankruptcy Code provides that the confirmation of a plan of reorganization discharges a debtor from substantially all debts arising prior to confirmation and certain debts arising afterwards. Circumstances in which claims and other obligations that arose prior to the bankruptcy

filing were not discharged primarily relate to certain actions by governmental units under police power authority, where CEOC agreed to preserve a claimant’s claims, as well as, potentially, instances where a claimant had inadequate notice of the bankruptcy filing. If any such claims remain, the ultimate resolution of such claims and other obligations may have a material adverse effect on our results of operations and profitability.

~~Our separation from CEOC could give rise to disputes or other unfavorable effects, which could have a material adverse effect on our business, financial position, or results of operations.~~

Disputes with third parties could arise out of our separation from CEOC, and we could experience unfavorable reactions to the separation from employees, ratings agencies, regulators, or other interested parties. These disputes and reactions of third parties could have a material adverse effect on our business, financial position, or results of operations. In addition, disputes between us and New CEOC and its subsidiaries could arise in connection with any of the Master Leases, the Management and Lease Support Agreement, the Right of First Refusal Agreement, the Call Right Agreements, or other agreements.

If our separation from CEOC, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. Federal income tax purposes, we and New CEOC could be subject to significant tax liabilities and, in certain circumstances, we could be required to indemnify New CEOC for material taxes pursuant to indemnification obligations under the Tax Matters Agreement.

The IRS issued a private letter ruling with respect to certain issues relevant to the separation from CEOC, substantially to the effect that, among other things, the separation from CEOC and certain related transactions will qualify as a transaction that is generally tax-free for U.S. Federal income tax purposes under certain provisions of the Code. The IRS ruling does not address certain requirements for tax-free treatment of the separation, and we received from our tax advisors a tax opinion substantially to the effect that, with respect to such requirements on which the IRS did not rule, such requirements should be satisfied. The IRS ruling and the tax opinion that we received and relied on, among other things, certain representations, assumptions and undertakings, including those relating to the past and future conduct of our business, and the IRS ruling and the opinion would not be valid if such representations, assumptions and undertakings were incorrect in any material respect.

Notwithstanding the IRS ruling and the tax opinion, the IRS could determine the separation should be treated as a taxable transaction for U.S. Federal income tax purposes if it determines any of the representations, assumptions or undertakings that were included in the request for the IRS ruling are false or have been violated or if it disagrees with the conclusions in the opinion that are not covered by the IRS ruling.

If the reorganization fails to qualify for tax-free treatment, in general, New CEOC would be generally subject to tax as if it had sold our assets to us in a taxable sale for their fair market value, and CEOC’s creditors who received shares of our common stock in the separation would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares.

Under the Tax Matters Agreement that we entered into with CEC and New CEOC, we generally are required to indemnify CEC and New CEOC against any tax resulting from the separation to the extent that such tax resulted from certain of our representations or undertakings being incorrect or violated. Our indemnification obligations to CEC and New CEOC are not limited by any maximum amount. As a result, if we are required to indemnify CEC and New CEOC or such other persons under the circumstances set forth in the Tax Matters Agreement, we may be subject to substantial liabilities.

~~Risks Related to our Status as a REIT~~

~~We may not maintain our status as a REIT.~~

We intend to elect and qualify to be taxed as a REIT for U.S. Federal income tax purposes commencing with our taxable year ending December 31, 2017, and expect to operate in a manner that will allow us to continue to be classified as such. Once an entity is qualified as a REIT, the Code generally requires that such entity distribute annually at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains, and that it pay tax at regular corporate rates to the extent that it annually distributes ~~annually~~ less than 100% of its REIT taxable income, determined without regard to the dividends paid deduction and including any net capital gains. In addition, a REIT iswill be required to pay a 4% nondeductible excise tax on the amount, if any, by which the distributions it makes in a calendar year are less than the sum of 85% of its ordinary income, 95% of its capital gain net income and 100% of its undistributed income from prior years. ~~As a result, in order to avoid current entity level U.S. Federal income taxes, a substantial portion of our cash flow after operating expenses and debt service will be required to be distributed.~~

Qualification as a REIT involves the application of highly technical and complex Code provisions for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification. Our qualification as a REIT depends on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. In addition, our ability to satisfy the requirements to qualify as a REIT may depend in part on the actions of third parties over which we have no control or only limited influence, including in cases where we own an equity interest in an entity that is classified as a partnership for U.S. Federal income tax purposes.

If we were to fail to qualify as a REIT in any taxable year, we would be subject to U.S. Federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates, and dividends paid to our stockholders would not be deductible by us in computing our taxable income. Any resulting corporate tax liability could be substantial and would reduce the amount of cash available for distribution to our stockholders, which in turn could have an adverse impact on the value of our common stock. 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 as a REIT. As a result, the amount available for distribution to holders of equity securities that would otherwise receive dividends would be reduced for the year or years involved.

~~The opinion we received regarding our status as a REIT does not guarantee our ability to qualify as a REIT.~~

On Emergence Date, we received an opinion of Kirkland & Ellis LLP to the effect that we have been organized in conformity with the requirements for qualification as a REIT and our proposed method of operation represented by management has enabled us, and will enable us, to satisfy the requirements for such qualification. Opinions of counsel are not binding on the IRS or any court, and could be subject to modification or withdrawal based on future legislative, judicial or administrative changes to U.S. Federal income tax laws, any of which could be applied retroactively. The opinion represented only the view of Kirkland & Ellis LLP, based on its review and analysis of the law in effect as of the Emergence Date and on certain representations made by us as to certain factual matters relating to our organization and our actual and intended or expected manner of operation.In addition, this opinion is based on the law existing and in effect on the Emergence Date. Kirkland & Ellis LLP has no obligation to advise us or the holders of our stock of any subsequent change in the matters stated, represented or assumed in its opinion or of any subsequent change in applicable law. Further, both the validity of the opinion and our qualification and taxation as a REIT will depend on our ability to meet on a continuing basis, through actual operating results, asset composition, distribution levels, diversity of share ownership and the various qualification tests imposed under the Code discussed below, the results of which will not be monitored by Kirkland & Ellis LLP. Accordingly, no assurance can be given that we will satisfy such tests on a continuing basis. Any failure to qualify to be taxed as a REIT, or failure to remain to be qualified to be taxed as a REIT, would have an adverse effect on our business, financial condition and results of operations.

We ~~may in the future choose~~intend to ~~pay dividends in the form of our own common stock, in which case stockholders may be required to pay income taxes in excess of the cash dividends they receive.~~

We may seek in the future to distribute taxable dividends that are payable in cash or our common stock. Taxable stockholders receiving such dividends will be required to include the full amount of the dividend as ordinary income to the extent of our current and accumulated earnings and profits for U.S. Federal income tax purposes. As a result, stockholders receiving dividends in the form of common stock may be required to pay income taxes with respect to such dividends in excess of the cash dividends received, if any. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale. In addition, in such case, a U.S. stockholder could have a capital loss with respect to the common stock sold that could not be used to offset such dividend income. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold U.S. Federal income tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock. In addition, such a taxable share dividend could be viewed as equivalent to a reduction in our cash distributions, and that factor, as well as the possibility that a significant number of our stockholders determine to sell our common stock in order to pay taxes owed on dividends, may put downward pressure on the market price of our common stock.

~~Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.~~

The maximum tax rate applicable to income from “qualified dividends” payable to U.S. stockholders that are individuals, trusts and estates is currently 20% (and an additional 3.8% tax on net investment income may also be applicable). Dividends payable by REITs, however, generally are not eligible for the reduced rates applicable to “qualified dividends”. Although these rules do not adversely affect the taxation of REITs, the more favorable rates applicable to regular corporate qualified dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in non-REIT corporations that pay dividends, which could adversely affect the value of the stock of REITs, including our common stock.

~~REIT distribution requirements could adversely affect our ability to execute our business plan.~~

We generally must distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, in order for us to qualify as a REIT so that U.S. Federal corporate income tax does not apply to earnings that we distribute. To the extent that we satisfy this distribution requirement and qualify for taxation as a REIT but distribute less than 100% of our REIT taxable income, determined without regard to the dividends paid deduction and including any net capital gains, we will be subject to U.S. Federal corporate income tax on any undistributed portion of such taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we distribute to our stockholders in a calendar year is less than a minimum amount specified under U.S. Federal tax laws. We intendcontinue to make distributions to our stockholders to comply with the REIT requirements of the Internal Revenue Code of 1986, as amended (the “Code”), and to avoid or otherwise minimize paying entity level federal income or excise ~~tax.~~tax (other than at any TRS of ours). We may generate taxable income greater than our income for financial reporting purposes prepared in accordance with GAAP. In particular, during the first several years of the leases, under the terms of the Master Lease Agreements, rental income will be allocated for tax purposes generally in an amount greater than cash rents. Further, we may generate REIT taxable income greater than our cash flow from operations after operating expenses and debt service as a result of differences in timing between the recognition of REIT taxable income and the actual receipt of cash or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments.

Critical Accounting Policies and Estimates

A complete discussion of our critical accounting policies and estimates is included in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no significant changes in our critical policies and estimates for the nine months ended September 30, 2023.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Our interest rate risk management objective is to limit the impact of future interest rate changes on our earnings and cash flows. To achieve this objective, our consolidated subsidiaries primarily borrow on a fixed-rate basis for longer-term debt issuances. As of September 30, 2023, we had $17.1 billion aggregate principal amount of outstanding indebtedness, of which 99.1% has fixed rate interest and 0.9% has a variable interest rate, representing the US$158.3 million (denominated in CAD) outstanding under our Revolving Credit Facility.

Additionally, we are exposed to interest rate risk between the time we enter into a transaction and the time we finance the related transaction with long-term fixed-rate debt. In ~~order to avoid current entity level U.S. Federal income taxes, we will generally be required to distribute sufficient cash flow after operating expenses and~~addition, when that long-term debt ~~service payments to satisfy REIT distribution requirements. While we intend to make distributions to our stockholders to comply with the REIT requirements of the Code,~~matures, we may ~~not~~ have ~~sufficient liquidity~~ to ~~meet the REIT distribution requirements. If our cash flow is insufficient~~refinance such debt at a higher interest rate. In a rising interest rate environment, we have from time to satisfy the REIT distribution requirements, we could be required to borrow funds on unfavorable terms, sell assets at disadvantageous prices, distribute amounts that would otherwise be invested in future acquisitions or issue dividends in the form of shares of our common stock to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirementtime and ~~to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our equity. Thus, compliance with the REIT requirements~~ may ~~hinder our ability to grow, which could adversely affect the value of our common stock.~~

~~Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow.~~

Even if we remain qualified for taxation as a REIT, we may be subject to certain U.S. Federal, state and local taxes on our income and assets, including taxes on any undistributed income and state or local income, property and transfer taxes. For example, in order to meet the REIT qualification requirements, we currently hold and expect in the future seek to ~~hold some of~~mitigate that risk by utilizing forward-starting interest rate swap agreements, treasury locks and other derivative instruments. Market interest rates are sensitive to many factors that are beyond our assets or conduct certain of our activities through one or more taxable REIT subsidiaries or other subsidiary corporations that will be subject to Federal, state, and local corporate-level income taxes as regular C corporations (i.e., corporations generally subject to corporate-level income tax under Subchapter C of Chapter 1 the Code). In addition, we may incur a 100% excise tax on transactions with a taxable REIT subsidiary if they are not conducted on an arm’s length basis. Any of these taxes would decrease cash available for distribution to our stockholders.

control.

~~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 in control.~~

~~Our charter~~REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and bylaws contain provisions, the exercise or existence of which could delay, defer or prevent a transaction or a change in control that might involve a premium price for our stockholders or otherwise be in their best interests, including the following:


▪	~~Our charter contains restrictions on the ownership and transfer of our stock.~~

~~In order for~~therefore requires us to ~~qualify as a REIT, no more than 50%~~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 Rules 13a-15(e) and 15d-15(e) of the ~~value~~Securities Exchange Act of ~~outstanding shares~~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.

VICI’s management has evaluated, under the supervision and with the participation of our ~~stock may be owned, beneficially or constructively,~~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 ~~five or fewer individuals (or certain other persons) at any time~~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 ~~last half~~three months ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, VICI’s internal control over financial reporting.

VICI Properties L.P.

Evaluation 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)Disclosure Controls and Procedures

VICI LP maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the ~~aggregate~~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 ~~outstanding shares~~end of ~~such class or series~~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 ~~our capital stock.~~the end of the period covered by this report.

~~The constructive ownership rules~~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 ~~Code~~Exchange Act) that occurred during the three months ended September 30, 2023, that have materially affected, or are ~~complex~~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 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 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 ofaffect 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~~future results and ~~transfer of shares, our charter also prohibits any person from owning shares of our stock that would result~~risk factors is set forth in our ~~being “closely held” under Section 856(h)~~Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to those factors for the nine months ended September 30, 2023.

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 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~~three months ended September 30, 2023, 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~~employees surrendered shares of common stock ~~issued~~owned by them to VICI to satisfy their statutory minimum federal and ~~outstanding as of~~state income tax obligations associated with 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 numbervesting of shares of restricted common stock ~~of any class or series that we have authority to issue and classify or reclassify any unissued shares of~~issued under our stock incentive plan. The following table summarizes such common ~~or preferred~~ stock ~~and set~~repurchases during 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 ourthree months ended September 30, 2023:


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number Of Shares Purchased As Part Of Publicly Announced Plans Or Programs	Maximum Number Of Shares That May Yet Be Purchased Under The Plans Or Programs
July 1, 2023 through July 31, 2023	—	$	—	—	—
August 1, 2023 through August 31, 2023	—	—		—	—
September 1, 2023 through September 30, 2023 (1)	267	30.82		—	—
Total	267	$	30.82	—	—

__________________________

(1) All shares of common stock ~~or otherwise be in~~were surrendered by certain employees to VICI to satisfy their statutory minimum federal and state income tax obligations associated with the ~~best interests~~vesting of performance-based restricted stock units and shares of restricted common stock issued under our ~~stockholders.~~stock incentive plan.

VICI Properties L.P.

~~Certain provisions of Maryland law may limit~~During the ~~ability of a third-party~~three months ended September 30, 2023, VICI LP did not repurchase any equity securities registered pursuant to ~~acquire control of us.~~

~~Certain provisions~~Section 12 of the ~~MGCL may have~~Exchange Act.

Item 3.Defaults Upon Senior Securities

None.

Table of Contents

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

During the ~~effect~~three months ended September 30, 2023, no director or officer of ~~inhibiting~~the Company adopted or terminated a ~~third-party from acquiring us~~“Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) 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:Regulation S-K.

Item 6.Exhibits

▪

“business combination” provisions that, subject to limitations, (a) prohibit certain business combinations between an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power 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; and

Incorporated by Reference

Exhibit
Number

Exhibit Description

Filed Herewith

Form

Exhibit

Filing Date

▪

“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.~~

10.1

~~Unregistered Sales~~

Second Amendment to Credit Agreement dated as of ~~Equity Securities~~August 4, 2023, to the Credit Agreement dated as of February 8, 2022, by and ~~Use of Proceeds~~among VICI Properties L.P., as Borrower, the financial institutions party thereto as lenders, and JPMorgan Chase Bank, N.A., as Administrative Agent.

~~None.~~

~~Item 3.~~

~~Defaults Upon Senior Securities~~

~~None.~~

~~Item 4.~~

31.1

~~Mine Safety Disclosures~~

~~Not applicable.~~

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

~~Item 5.~~

~~Other Information~~

~~None.~~

~~Item 6.~~

31.2

~~Exhibits~~

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

31.3

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

31.4

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

Inline 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

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline 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 25, 2023

Edward B. Pitoniak

(Principal Executive Officer)

/s/ DAVID A. KIESKE

~~VICI PROPERTIES INC.~~

Chief Financial Officer

October 25, 2023

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 25, 2023

Gabriel F. Wasserman

(Principal Accounting Officer)

VICI PROPERTIES L.P.

Signature

Title

Date

/s/ EDWARD B. PITONIAK

Chief Executive Officer and Director

October 25, 2023

Edward B. Pitoniak

(Principal Executive Officer)

/s/ DAVID A. KIESKE

Chief Financial Officer

October 25, 2023

David A. Kieske

(Principal Financial Officer)

/s/ GABRIEL F. WASSERMAN

Chief Accounting Officer

October 25, 2023

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.)



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, 2023
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, 2023 and December 31, 2022	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 eptember 30, 2023 and 2022			196
					~~Combined Condensed~~Consolidated Statements of ~~Operations~~Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022	207
					~~Combined Condensed Statements of Equity~~	21
	~~Combined Condensed~~Consolidated Statements of Cash Flows for the Nine Months Ended S e ptember 30, 2023 and 2022	229

			Financial Statements of VICI Properties L.P. (Unaudited)			11
					Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	11
					Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended Se ptember 30, 2023 and 2022	12
					Consolidated Statements of Partners’ Capital for the Three and Nine Months Ended S e ptem ber 30, 2023 and 2022	13
					Consolidated Statements of Cash Flows for the Nine Months Ended S eptember 30, 2023 and 2022	15

			Notes to ~~Combined Condensed~~Consolidated Financial Statements			2317
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			3054
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			3570
Item 4.			Controls and Procedures			3571

PART II.			OTHER INFORMATION
Item 1.			Legal Proceedings			3672
Item 1A.			Risk Factors			3672
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			5372
Item 3.			Defaults Upon Senior Securities			5372
Item 4.			Mine Safety Disclosures			5373
~~Item 5.~~	~~Other Information~~	53
~~Item 6.~~	~~Exhibits~~	54
~~SIGNATURE~~Item 5.			58Other Information			73
Item 6.			Exhibits			73

Signatures						74

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



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



	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



	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



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