UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________ FORM 10-Q ________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ Commission file number: 001-38372 _________________________ VICI Properties Inc. (Exact name of registrant as specified in its charter) __________________________ Maryland 81-4177147 (State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.) organization) 535 Madison Avenue, 20th Floor New York, New York 10022 (Address of Principal Executive Offices) (Zip Code) Registrant’s telephone number, including area code: (646) 949-4631 __________________________ Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of each exchange on which registered Common stock, $0.01 par value VICI New York Stock Exchange Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large Accelerated Filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of October 28, 2020, the registrant had 536,669,722 shares of its $0.01 par value common stock outstanding. 1 Table of Contents VICI PROPERTIES INC. FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2020 TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements of VICI Properties Inc. (Unaudited) 3 Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 3 Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended September 30, 2020 and 2019 4 Consolidated Statements of Stockholders’ Equity for the Nine Months Ended September 30, 2020 and 2019 5 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019 7 Notes to Consolidated Financial Statements 9 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 52 Item 3. Quantitative and Qualitative Disclosures About Market Risk 75 Item 4. Controls and Procedures 75 PART II. OTHER INFORMATION Item 1. Legal Proceedings 76 Item 1A. Risk Factors 76 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 76 Item 3. Defaults Upon Senior Securities 76 Item 4. Mine Safety Disclosures 76 Item 5. Other Information 76 Item 6. Exhibits 77 Signatures 79 2 Table of Contents PART I FINANCIAL INFORMATION Item 1. Financial Statements VICI PROPERTIES INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands, except share and per share data) September 30, 2020 December 31, 2019 Assets Real estate portfolio: Investments in leases - sales-type and direct financing, net....................... $ 13,009,966 $ 10,734,245 Investments in leases - operating ............................................................... — 1,086,658 Investments in leases - financing receivables, net...................................... 2,600,228 — Investments in loans, net............................................................................ 533,713 — Land............................................................................................................ 158,190 94,711 Cash and cash equivalents............................................................................... 144,057 1,101,893 Short-term investments.................................................................................... 19,973 59,474 Other assets...................................................................................................... 385,703 188,638 Total assets................................................................................................. $ 16,851,830 $ 13,265,619 Liabilities Debt, net........................................................................................................... $ 6,761,832 $ 4,791,563 Accrued interest............................................................................................... 47,106 20,153 Deferred financing liability.............................................................................. 73,600 73,600 Deferred revenue............................................................................................. 309 70,340 Dividends payable........................................................................................... 176,982 137,056 Other liabilities................................................................................................ 422,462 123,918 Total liabilities........................................................................................... 7,482,291 5,216,630 Commitments and contingent liabilities (Note 11) Stockholders’ equity Common stock, $0.01 par value, 700,000,000 shares authorized and 536,668,779 and 461,004,742 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively ............................ 5,367 4,610 Preferred stock, $0.01 par value, 50,000,000 shares authorized and no shares outstanding at September 30, 2020 and December 31, 2019 ............... — — Additional paid-in capital................................................................................ 9,361,526 7,817,582 Accumulated other comprehensive loss.......................................................... (104,258) (65,078) Retained earnings............................................................................................. 29,338 208,069 Total VICI stockholders’ equity................................................................. 9,291,973 7,965,183 Non-controlling interest................................................................................... 77,566 83,806 Total stockholders’ equity.......................................................................... 9,369,539 8,048,989 Total liabilities and stockholders’ equity............................................... $ 16,851,830 $ 13,265,619 _______________________________________________________ Note: As of September 30, 2020, our Investments in leases - sales-type and direct financing, Investments in leases - financing receivables, Investments in loans and Other assets (sales-type sub-leases) are net of $467.0 million, $93.0 million, $3.2 million and $7.2 million of Allowance for credit losses, respectively. The credit loss standard does not require retrospective application and as such there is no corresponding allowance as of December 31, 2019. Refer to Note 6 - Allowance for Credit Losses for further details. See accompanying Notes to Consolidated Financial Statements. 3 Table of Contents VICI PROPERTIES INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) (In thousands, except share and per share data) Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Revenues Income from sales-type and direct financing leases........... $ 270,274 $ 206,001 $ 718,421 $ 603,300 Income from operating leases............................................. 3,638 10,913 25,464 32,740 Income from lease financing receivables and loans........... 52,827 — 82,696 — Other income...................................................................... 7,276 — 8,702 — Golf operations................................................................... 5,638 5,599 17,273 21,221 Revenues...................................................................... 339,653 222,513 852,556 657,261 Operating expenses General and administrative................................................. 8,047 6,717 22,560 19,460 Depreciation....................................................................... 910 1,000 2,990 2,948 Other expenses................................................................... 7,263 — 8,702 — Golf operations................................................................... 4,672 5,423 13,181 14,363 Change in allowance for credit losses................................ 177,052 — 261,080 — Transaction and acquisition expenses................................ 2,026 993 7,703 4,749 Total operating expenses.............................................