VICI Properties Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the VG Properties First Quarter 2023 Earnings Conference Call. At this time, all participants are in a saloon mode. Please note that this conference call is being recorded today, May 2nd, 2023. I'll now turn the call over to Samantha Gallagher, General Counsel with VG Properties.

Thank you, Operator, and good morning. Everyone should have access to the company's First Quarter 2023 earnings release and supplemental information. The release and supplemental information can be found in the investor section of the VG Properties website at www.vgproperties.com. Some of our comments today will be forward-looking statements within the meaning of the Federal Securities Law. Forward-looking statements, which are usually identified by use of words such as will, believe, expect, should, guidance, intend, outlook, projects, or other similar phrases, are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Therefore, you should exercise caution in interpreting and relying on them. I refer you to the company's SEC filing for a more detailed discussion of the risks that could impact future operating results and financial conditions. During the call, we will discuss certain non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available on our website in our first quarter 2023 earnings release, our supplemental information, and our filings with the SEC. For additional information with respect to non-GAAP measures of certain tenants and or counterparties, please refer to the respective company's public filings with the SEC. Hosting the call today, we have Ed Petoniak, Chief Executive Officer, John Payne, President and Chief Operating Officer, David Kieske, Chief Financial Officer, Dave Wasserman, Chief Accounting Officer, and William McCluskey, Senior Vice President of Capital Markets. Ed and team will provide some opening remarks, and then we will open the call to questions. With that, I'll turn the call over to Ed.

Thank you, Samantha, and good morning, everyone. Let me start today by telling you how I tend to spend my Saturday mornings, espresso in hand. First, I grab the FT, the old-fashioned print edition, to see what Katie Martin has to say about the state of the equity and credit markets in her long view column. Katie can be very funny, but the long and short of it is that the market participants she's quoting these days aren't having a lot of fun. Then I might grab my iPad and catch up on any of Rob Armstrong's unhedged FT columns that I fell behind on during the prior week. Rob's response to current and prospective market conditions is rather Hamlet in character. To be or not to be, to be a bull or to be a bear, or to be neither. But who is he who is neither bull nor bear? That is the question. In my second espresso, I might see what the two Michaels and one Marco, among others, have had to offer in market commentary and forecasting in the prior few days. Hartnett, Wilson, Kolonovic. I could call them the three Archdukes of Doom, but that would be unfair. Well, actually, not that unfair. If these folks are formulating a rational response to the current state of the macroeconomy, monetary and fiscal policy, and the markets, visibility is low, uncertainty is high. In commercial real estate, asset pricing is murky and or a subject of dispute between would-be sellers and would-be buyers. As a result, there's not a whole lot of trading going on. commercial real estate trading was down nearly 70% year-over-year in March 2023, and it's not like March 2022 was a barn burner for real estate assets or portfolio trading. What does all this uncertainty and low visibility mean for how we're thinking and what we're doing at VG? Our thinking and doing starts with our current state of earnings growth and investment activity. As you saw in last night's VG earnings release, for Q1 2023, we generated year-over-year ASFO growth of 18.6% per share, a rate that we believe will be among the highest for REITs generally and S&P 500 REITs specifically. And to take a broader view, so far in earnings season, year-over-year Q1 2023 earnings growth for S&P 500 companies of all kinds is running at negative 4%, versus Vichy's Q1 AFFO growth, again, at 18.6%. But it's not only about growth and current earnings, it's about growing our future earnings. Along that line, and even amidst this murky trading environment, within Q1, we allocated a total of $1.6 billion of incremental capital to compelling and creative experiential property and lending investments, which John will have more detail on in a moment. And even with that $1.6 billion of capital, having been newly allocated in Q1, we have approximately $859 million of equity dry powder, thanks to our unsettled forward equity, and approximately $650 million in cash. Combine that with $2.4 billion of undrawn revolver capacity, and we have the funding in place to seize on further opportunity if opportunity presents itself in this current environment. Most of all, during an uncertain time like this, we keep doing what we've done at VT from the beginning. We are always working on our future, growing relationships that have the potential to grow our business. These relationships don't have to turn into deals tomorrow, as John has noted in the past. In that vein, think about the fact that the ASFO growth VT expects to produce in 2023 is, in good measure, the result of relationship building we did many years ago. with those who would end up being our partners in our Venetian and MGP transactions, which we announced in 2021. Thus it is to reiterate that much of the work we are doing at Vici in 2023 is about growth in 2024, 2025, and beyond. And yet I don't mean to suggest that we are not jumping on immediate opportunities when those opportunities are compelling as evidenced, again, by the $1.6 billion of capital we newly deployed in Q1 2023. Finally, we are working intensely in the present and for our future with one of the lowest G&A loads in American triple net REIT management as a percentage of revenues or of assets. Think of our G&A as a form of asset management fee. Our asset management fee, understood in this way, as measured by Vici corporate G&A, runs at about 0.1% of assets under management. That's a fee load you would expect from a passive manager of an index fund. With Vici, for 0.1%, you get very active investment management that has historically produced significant outperformance. I'll now turn the call to John so that he can share with you what kind of activities we have been up to and are up to. John.