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Exhibit 99.1

Excerpts from the Preliminary Offering Memorandum of VICI Properties L.P., dated January 21, 2020

BASIS OF PRESENTATION

Unless the context otherwise requires or unless otherwise specified, (i) all references in this offering memorandum to the term “Holdings” refer to VICI Properties Inc., a Maryland corporation, (ii) all references to the “Operating Partnership” refer to VICI Properties L.P., a Delaware limited partnership, (iii) all references to “Co-Issuer” refer to VICI Note Co. Inc., a Delaware corporation, and (iv) all references to “Issuers” refer to the Operating Partnership and the Co-Issuer. Unless the context otherwise requires, or unless otherwise specified, all references in this offering memorandum to the terms “we,” “us” and “our” refer to the Operating Partnership and the Co-Issuer, together with their consolidated subsidiaries.

“Caesars” refers to Caesars Entertainment Corporation, a Delaware corporation, including any successors, and its subsidiaries, including any successors.

“Caesars Entertainment Outdoor” refers to the historical operations of the golf courses that were transferred from CEOC to VICI Golf on October 6, 2017.

“Caesars Lease Agreements” refers collectively to the CPLV Lease Agreement, the Non-CPLV Lease Agreement, the Joliet Lease Agreement and the HLV Lease Agreement, unless the context otherwise requires.

“CEC” refers to Caesars Entertainment Corporation, a Delaware corporation.

“Century Casinos” refers to Century Casinos, Inc., a Delaware corporation, and its subsidiaries.

“Century Lease Agreement” refers to the lease agreement for Mountaineer Casino, Racetrack & Resort, Lady Luck Casino Caruthersville and Isle Casino Cape Girardeau, as amended from time to time.

“CEOC” refers to Caesars Entertainment Operating Company, Inc., a Delaware corporation, and its subsidiaries, prior to Formation Date, and following the Formation Date, CEOC, LLC, a Delaware limited liability company, and its subsidiaries. CEOC is a subsidiary of CEC.

“CPLV CMBS Debt” refers to $1.55 billion of asset-level real estate mortgage financing of Caesars Palace Las Vegas, incurred by a subsidiary of the Operating Partnership on October 6, 2017 and repaid in full in November 2019.

“CPLV Lease Agreement” refers to the lease agreement for Caesars Palace Las Vegas, as amended from time to time, which will be combined with the HLV Lease Agreement into a single Las Vegas master lease upon the closing of the ERI/CEC Merger.

“Eldorado Transaction” refers to a series of transactions between us and ERI in connection with the ERI/CEC Merger, including the MTA Properties Acquisitions (as defined below), modifications to lease agreements, and rights of first refusal.

“ERI” refers to Eldorado Resorts, Inc., a Nevada corporation, and its subsidiaries, including any successors.

“ERI/CEC Merger” refers to the merger contemplated under an Agreement and Plan of Merger pursuant to which a subsidiary of ERI will merge with and into Caesars, with Caesars surviving as a wholly-owned subsidiary of ERI.

“Existing Senior Notes” refers to the Issuers’ (i) $1.25 billion aggregate principal amount of 4.250% Senior Notes due 2026 (the “Existing 2026 Notes”) issued under an indenture dated as of November 26, 2019 (the “Existing 2026 Notes Indenture”), among the Issuers, the subsidiary guarantors party thereto and UMB

 

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Bank, National Association, as trustee (the “Existing Notes Trustee”) and (ii) $1.0 billion aggregate principal amount of 4.625% Senior Notes due 2029 (the “Existing 2029 Notes” and, together with the Existing 2026 Notes, the “Existing Senior Notes”) issued under an indenture dated as of November 26, 2019 (the “Existing 2029 Notes Indenture” and, together with the 2026 Notes Indenture, the “Existing Senior Indentures”), among the Issuers, the subsidiary guarantors party thereto and the Existing Notes Trustee.

“Formation Date” refers to October 6, 2017.

“Greektown” refers to the real estate assets associated with the Greektown Casino-Hotel, located in Detroit, Michigan, which we purchased on May 23, 2019.

“Greektown Lease Agreement” refers to the lease agreement for Greektown, as amended from time to time.

“Hard Rock” means Hard Rock International, and its affiliate entities.

“HLV Additional Rent Acquisition” refers to the agreement to increase the annual rent payable to us with respect to the Harrah’s Las Vegas property by $15.0 million.

“HLV Lease Agreement” refers to the lease agreement for the Harrah’s Las Vegas facilities, as amended from time to time, which will be combined with the CPLV Lease Agreement into a single Las Vegas master lease agreement upon the closing of the ERI/CEC Merger.

“JACK Cincinnati” refers to the real estate assets associated with the JACK Cincinnati Casino, located in Cincinnati, Ohio, which we purchased on September 20, 2019.

“JACK Cincinnati Lease Agreement” refers to the lease agreement for JACK Cincinnati, as amended from time to time.

“JACK Entertainment” refers to JACK Entertainment LLC, and its subsidiary and affiliate entities.

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

“June 2019 equity offering” refers to the offering by Holdings completed on June 28, 2019 of (i) 50,000,000 shares of its common stock at an offering price of $21.50 per share, resulting in net proceeds, after the deduction of the underwriting discount and expenses, of $1.0 billion and (ii) 65,000,000 shares of its common stock that are subject to forward sale agreements to be settled by September 2020.

“Lease Agreements” refer collectively to the Caesars Lease Agreements, the Penn National Lease Agreements and the JACK Cincinnati Lease Agreement, unless the context otherwise requires.

“Margaritaville” refers to the real estate of Margaritaville Resort Casino, located in Bossier City, Louisiana, which we purchased on January 2, 2019.

“Margaritaville Lease Agreement” refers to the lease agreement for Margaritaville, as amended from time to time.

“Master Transaction Agreement” refers to the master transaction agreement with ERI relating to the Eldorado Transaction, as amended from time to time.

“Non-CPLV Lease Agreement” refers to the lease agreement for regional properties leased to Caesars other than the facilities in Joliet, Illinois, as amended from time to time.

 

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“Penn National” refers to Penn National Gaming, Inc., a Pennsylvania corporation, and its subsidiaries.

“Penn National Lease Agreements” refer collectively to the Margaritaville Lease Agreement and the Greektown Lease Agreement, unless the context otherwise requires.

“PropCo Revolving Credit Facility” refers to the five-year senior secured first lien revolving credit facility entered into by VICI PropCo, as amended from time to time.

“PropCo Notes” refers to $766.9 million aggregate principal amount of 8.0% second priority senior secured notes due 2023 issued by VICI PropCo and VICI FC Inc. in October 2017, of which approximately $498.5 million aggregate principal amount remains outstanding.

“PropCo Term Loan B Facility” refers to the seven-year senior secured first lien term loan B facility entered into by VICI PropCo in December 2017.

“VICI Golf” refers to VICI Golf LLC, a Delaware limited liability company that is the indirect owner and operator of Holdings’ golf segment business.

“VICI PropCo” refers to VICI Properties 1 LLC, a Delaware limited liability company, and a wholly owned subsidiary of the Operating Partnership.

 

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NON-GAAP FINANCIAL MEASURES OF HOLDINGS

This offering memorandum presents Funds From Operations (“FFO”), pro forma FFO, Adjusted Funds From Operations (“AFFO”), pro forma AFFO, Adjusted EBITDA and pro forma Adjusted EBITDA, each of Holdings, 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 construed as alternatives to net income or as an indicator of operating performance (as determined in accordance with GAAP). Holdings believes FFO, pro forma FFO, AFFO, pro forma AFFO, Adjusted EBITDA and pro forma Adjusted EBITDA provide a meaningful perspective of the underlying operating performance of our business. These non-GAAP financial measures are presented with respect to Holdings and not the Operating Partnership or the Co-Issuer.

FFO and pro forma FFO are non-GAAP financial measures that are considered supplemental measures 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, Holdings defines FFO as net income (or loss) (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 and (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Holdings prepares pro forma FFO by adjusting FFO to give effect to the net income associated with certain recent acquisitions and other transactions as if each such transactions had been completed on January 1, 2018 (and only to the extent not reflected in historical financial results), including: (i) the Recently Completed Transactions (as defined below), (ii) the Debt and Equity Transactions (as defined below), (iii) the JACK Cleveland/Thistledown Acquisition (as defined below) and (iv) the Eldorado Transaction, including the issuance of and use of proceeds from the Existing Senior Notes and the issuance of $2,500 million aggregate principal amount of notes in this offering, after deducting the initial purchasers’ discounts related to this offering, estimated offering expenses and the use of proceeds from the offering as described herein in “Use of Proceeds” (collectively, the “Pro Forma Transactions”). For a reconciliation of FFO and pro forma FFO to the most directly comparable U.S. GAAP measure, see “Summary—Summary Historical and Pro Forma Financial Data of Holdings.”

AFFO and pro forma AFFO are non-GAAP financial measures that Holdings uses as supplemental operating measures to evaluate its performance. Holdings calculates AFFO by adding or subtracting from FFO direct financing and sales-type lease adjustments, transaction costs incurred in connection with the acquisition of real estate investments, non-cash stock-based compensation expense, 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 Holdings’ golf course operations), capital expenditures (which are comprised of additions to property, plant and equipment related to Holdings’ golf course operations), impairment charges and gains (or losses) on debt extinguishment. Holdings prepares pro forma AFFO by adjusting AFFO to give effect to the net income associated with the Pro Forma Transactions as if the Pro Forma Transactions had occurred on January 1, 2018 (and only to the extent not reflected in historical financial results). For a reconciliation of AFFO and pro forma AFFO to the most directly comparable U.S. GAAP measure, see “Summary—Summary Historical and Pro Forma Financial Data of Holdings.”

Holdings calculates Adjusted EBITDA by adding or subtracting from AFFO interest expense and interest income (collectively, interest expense, net) and income tax expense. Holdings prepares pro forma Adjusted EBITDA by adjusting Adjusted EBITDA to give effect to the net income associated with the Pro Forma Transactions as if the Pro Forma Transactions had occurred on January 1, 2018 (and only to the extent not reflected in historical financial results). For a reconciliation of Adjusted EBITDA and pro forma Adjusted EBITDA to the most directly comparable U.S. GAAP measure, see “Summary—Summary Historical and Pro Forma Financial Data of Holdings.”

 

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

The non-GAAP financial measures in this offering memorandum are presented for Holdings, the parent company of the Operating Partnership, and not the Operating Partnership or the Co-Issuer. For a description of the material differences between the consolidated financial statements of Holdings and the financial information of the Operating Partnership and the Co-Issuer, see “Material Differences between the Consolidated Financial Statements of Holdings and the Financial Information of the Issuers.”

 

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Summary Historical and Pro Forma Financial Data of Holdings

The following summary historical consolidated financial and operating data of Holdings for the year ended December 31, 2018 and the period from October 6, 2017 to December 31, 2017, and the summary historical consolidated balance sheet data as of December 31, 2018 and December 31, 2017 have been derived from, and should be read together with, Holdings’ audited consolidated financial statements and related notes and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” each of which is included in Holdings’ Annual Report on Form 10-K for the year ended December 31, 2018, which is incorporated by reference into this offering memorandum. See “Available Information and Incorporation by Reference.”

The summary historical consolidated financial information for each of the nine-month periods ended September 30, 2019 and 2018, and the balance sheet data as of September 30, 2019 have been derived from, and should be read together with, Holdings’ unaudited consolidated financial statements and related notes and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” each of which is included in Holdings’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, which is incorporated by reference into this offering memorandum. In the view of Holdings and its subsidiaries, the unaudited consolidated financial statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial information for the interim periods. Interim results for the nine months ended and as of September 30, 2019 are not necessarily indicative of, and are not projections for, the results to be expected for any future period.

The following tables also set forth (i) certain summary pro forma consolidated and combined financial data as of September 30, 2019 and (ii) certain summary pro forma consolidated and combined financial data of Holdings for the twelve months ended September 30, 2019, which were calculated by subtracting the pro forma consolidated and combined financial data for the nine months ended September 30, 2018 from the pro forma consolidated and combined financial data for the year ended December 31, 2018, and adding the pro forma consolidated and combined financial data for the nine months ended September 30, 2019, in each case reflecting certain pro forma adjustments that are described below in summary and more fully in the section entitled “Unaudited Pro Forma Consolidated and Combined Financial Data of Holdings,” which is contained elsewhere in this offering memorandum.

The unaudited pro forma consolidated and combined balance sheet information of Holdings gives effect to (i) the recently completed Century Portfolio Acquisition, (ii) the Debt and Equity Transactions (as defined below), (iii) the JACK Cleveland/Thistledown Acquisition and (iv) the Eldorado Transaction, including the issuance of the notes in this offering and the issuance of the Existing Senior Notes, as if each such transaction had been completed as of September 30, 2019, as these transactions were not reflected in Holdings’ balance sheet as of September 30, 2019, and is not necessarily indicative of what Holdings’ financial position would have been if such transactions had actually been completed on September 30, 2019 and is not intended to project such information for any future date. The unaudited pro forma consolidated and combined statements of operations information give effect to (i) the Recently Completed Transactions (as defined below), (ii) the Debt and Equity Transactions, (iii) the JACK Cleveland/Thistledown Acquisition, and (iv) the Eldorado Transaction, including the issuance of the notes in this offering and the issuance of the Existing Senior Notes, as if each such transaction had been completed on January 1, 2018 and is not necessarily indicative of what Holdings’ operating results and other data would have been if such transactions had actually been if such transactions had actually been completed on January 1, 2018 and is not intended to project such information for any future date.

 

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The following summary historical consolidated financial and operating data is provided with respect to Holdings, the parent company of the Operating Partnership, and not the Issuers. For a description of the material differences between the consolidated financial statements of Holdings and the financial information of the Operating Partnership and the Co-Issuer, see “Material Differences between the Consolidated Financial Statements of Holdings and the Financial Information of the Issuers.”

 

     Historical     Pro forma  

(In thousands)

   Year Ended
December 31,
2018
    Period from
October 6,
2017 to
December 31,
2017
    Nine Months Ended
September 30,
    Twelve Months
Ended
September 30,
2019
 
  2019     2018  
                 (unaudited)     (unaudited)  

Statement of Operations:

 

Revenues

   $ 897,977     $ 187,609     $ 657,261     $ 671,938     $ 1,411,171  

Total operating expenses

     140,023       43,413       41,520       109,666       51,959  

Operating income

     757,954       144,196       615,741       562,272       1,359,212  

Interest expense

     (212,663     (63,354     (176,936     (158,365     (330,980

Interest income

     11,307       282       15,861       7,504       19,664  

Loss from extinguishment of debt

     (23,040     (38,488     —         (23,040     —    

Income before income taxes

     533,558       42,636       454,666       388,371       1,047,896  

Income tax (expense) benefit

     (1,441     1,901       (1,098     (884     (5,028

Net income

     532,117       44,537       453,568       387,487       1,042,868  

Net income attributable to non-controlling interest

     (8,498     (1,875     (6,235     (6,409     (9,042

Net income attributable to common stockholders

     523,619       42,662       447,333       381,078       1,033,826  

Other Operating Data:

 

FFO(1)

   $ 523,619     $ 42,662     $ 447,333     $ 381,078     $ 1,033,826  

AFFO(1)

     525,632       84,068       472,939       385,767       970,483  

Adjusted EBITDA(1)

     722,453       145,083       616,932       533,036       1,257,128  

 

     Historical      Pro Forma  
     As of December 31,      As of
September 30,
2019
     As of
September 30,
2019
 

(In thousands)

   2018      2017  
                   (unaudited)      (unaudited)  

Balance Sheet Data:

 

Cash and cash equivalents

   $ 577,883      $ 183,646      $ 431,423      $ 205,798  

Restricted cash

     20,564        13,760        32,087        58  

Short-term investments

     520,877        —          342,767        —    

Total assets

     11,333,368        9,739,712        12,581,466        16,421,643  

Debt, net

     4,122,264        4,785,756        4,125,473        6,752,205  

Non-controlling interests

     83,573        84,875        83,755        94,459  

Stockholders’ equity

     6,901,022        4,776,364        8,074,069        9,316,093  

 

(1) 

FFO, pro forma FFO, AFFO, pro forma AFFO, Adjusted EBITDA and pro forma Adjusted EBITDA are not required by, or presented in accordance with, GAAP. These are non-GAAP financial measures and should not be construed as alternatives to net income or as an indicator of operating performance (as determined in accordance with GAAP). Holdings believes FFO, pro forma FFO, AFFO, pro forma AFFO, Adjusted EBITDA and pro forma Adjusted EBITDA provide a meaningful perspective of the underlying operating performance of its business. For more information about how Holdings calculates FFO, pro forma FFO, AFFO, pro forma AFFO, Adjusted EBITDA and pro forma Adjusted EBITDA, see “Non-GAAP Financial Measures of Holdings.”

 

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Because not all companies calculate FFO, pro forma FFO, AFFO, pro forma AFFO, Adjusted EBITDA and pro forma Adjusted EBITDA in the same way as Holdings does and other companies may not perform such calculations, those measures as used by other companies may not be consistent with the way Holdings calculates such measures and should not be considered as alternative measures of operating income or net income. Presentation of these measures does not replace the presentation of Holdings’ results in accordance with GAAP.

The following reconciles FFO, AFFO and Adjusted EBITDA to net income, and pro forma FFO, pro forma AFFO and pro forma Adjusted EBITDA to pro forma net income for the periods presented (in thousands):

 

    Historical     Pro Forma  

(In thousands)

  Year ended
December 31,
2018
    Period from
October 6, 2017
to December 31,
2017
    Nine Months
ended
September 30,
2019
    Year ended
December 31,
2018
    Nine Months
ended
September 30,
2019
    Nine Months
ended
September 30,
2018
 
                (unaudited)                    

Net income attributable to common stockholders

  $ 523,619     $ 42,662     $ 447,333     $ 1,005,460     $ 771,136     $ 742,770  

Real estate depreciation

    —          —          —          —          —          —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

FFO

    523,619       42,662       447,333       1,005,460       771,136       742,770  

Direct financing and sales-type lease adjustments attributable to common stockholders

    (44,852     (8,362     (2,093     (110,906     (75,698     (82,019

Transaction and acquisition expenses

    393       9,039       4,749       393       4,749       —     

Non-cash stock-based compensation

    2,342       1,385       3,821       2,342       3,821       1,482  

Amortization of debt issuance costs and original issue discount

    5,976       156       18,180       15,995       25,694       11,991  

Other depreciation

    3,679       751       2,940       3,679       2,940       2,752  

Capital expenditures

    (899     (51     (1,991     (899     (1,991     (744

Loss on impairment

    12,334       —          —          12,334       —          12,334  

Loss on extinguishment of debt

    23,040       38,488       —          23,040       —          23,040  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

AFFO

    525,632       84,068       472,939       951,438       730,651       711,606  

Interest expense, net

    195,380       62,916       142,895       285,107       210,191       213,681  

Income tax expense (benefit)

    1,441       (1,901     1,098       4,814       3,628       3,414  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

  $ 722,453     $ 145,083     $ 616,932     $ 1,241,359     $ 944,470     $ 928,701  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS OF HOLDINGS

The following unaudited pro forma consolidated and combined financial statements of Holdings have been prepared in accordance with Article 11 of Regulation S-X and give effect to the transactions described below. The unaudited pro forma consolidated and combined balance sheet gives effect to (i) the recently completed Century Portfolio Acquisition, (ii) the Debt and Equity Transactions, (iii) the JACK Cleveland/Thistledown Acquisition, and (iv) the Eldorado Transaction, including the issuance of the notes in this offering and the issuance of the Existing Senior Notes, as if each such transaction had been completed as of September 30, 2019, as these transactions were not reflected in Holdings’ balance sheet as of September 30, 2019. The unaudited pro forma consolidated and combined statements of operations of Holdings give effect to (i) the Recently Completed Transactions, (ii) the Debt and Equity Transactions, (iii) the JACK Cleveland/Thistledown Acquisition, and (iv) the Eldorado Transaction, including the issuance of the notes in this offering and the issuance of the Existing Senior Notes, as if each such transaction had been completed on January 1, 2018.

The following unaudited pro forma consolidated and combined financial statements are provided with respect to Holdings, the parent company of the Operating Partnership, and not the Operating Partnership or the Co-Issuer. For a description of the material differences between the consolidated financial statements of Holdings and the financial information of the Operating Partnership and the Co-Issuer, see “Material Differences between the Consolidated Financial Statements of Holdings and the Financial Information of the Issuers.”

Recently Completed Transactions

Octavius Tower and Harrah’s Philadelphia Acquisitions and Initial Lease Modifications (as defined below) with Caesars

 

   

The acquisition of Octavius Tower at Caesars Palace, Las Vegas completed on July 11, 2018 for a purchase price of $507.5 million (the “Octavius Tower Acquisition”);

 

   

The acquisition of Harrah’s Philadelphia in Chester, Pennsylvania completed on December 26, 2018 for a purchase price of $241.5 million, which purchase price was reduced by $159.0 million to reflect the aggregate net present value of the Initial Lease Modifications, as defined below (the “Harrah’s Philadelphia Acquisition”); and

 

   

In connection with the closing of the Harrah’s Philadelphia Acquisition, each of the Non-CPLV Lease Agreement and the CPLV Lease Agreement was amended to, among other things, (i) include Harrah’s Philadelphia and Octavius Tower, respectively, (ii) add a base rent escalation of 1.5% per year for years two through five of the Non-CPLV Lease Agreement, (iii) implement, from the commencement of the eighth lease year under the Formation Lease Agreements, minimum rent coverage ratios that may impact the base rent increases paid by Caesars to us, and (iv) commencing with the eighth lease year, reduce variable rent adjustments (increases or decreases) to 4.0% of revenue growth or decline, as applicable. The HLV Lease Agreement and the Joliet Lease Agreement were also amended at such time to be consistent with the Non-CPLV Lease Agreement and the CPLV Lease Agreement with respect to the aforementioned amendments. These amendments, which occurred on December 26, 2018, are collectively referred to as the “Initial Lease Modifications.”

Margaritaville Acquisition

 

   

The acquisition of Margaritaville Resort Casino, located in Bossier City, Louisiana completed on January 2, 2019 for a purchase price of $261.1 million and entry into a triple net lease agreement with Penn National.

 

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Greektown Acquisition

 

   

The acquisition of Greektown Casino-Hotel, located in Detroit, Michigan completed on May 23, 2019 for a purchase price of $700.0 million and entry into a triple net lease agreement with Penn National.

JACK Cincinnati Acquisition

 

   

The acquisition of JACK Cincinnati Casino, located in Cincinnati, Ohio completed on September 20, 2019 for a purchase price of $558.3 million and entry into a triple net lease agreement with Hard Rock.

Century Portfolio Acquisition

 

   

The acquisition of the Century Portfolio completed on December 6, 2019, for an aggregate purchase price of $277.8 million and entry into a triple net lease agreement with Century Casinos.

We refer to the Octavius Tower Acquisition, the Harrah’s Philadelphia Acquisition, the Initial Lease Modifications, the Margaritaville Acquisition, the Greektown Acquisition, the JACK Cincinnati Acquisition and the Century Portfolio Acquisition, collectively, as the “Recently Completed Transactions.”

Debt and Equity Transactions

Refinancing of the PropCo Notes

 

   

The use of $500.0 million of the gross proceeds of this offering to repay in full the PropCo Notes and pay related fees and expenses.

Forward Share Settlement

 

   

The issuance of 65,000,000 shares of common stock of Holdings upon settlement of the forward agreements entered into in connection with Holdings’ June 2019 equity offering (the “Forward Share Agreements”), which settlement will finance a portion of Holdings’ cash needs relating to the JACK Cleveland/Thistledown Acquisition and the Eldorado Transaction.

We refer to the redemption and refinancing of the PropCo Notes and the settlement of the Forward Share Agreements, collectively, as the “Debt and Equity Transactions.”

JACK Cleveland/Thistledown Acquisition

 

   

The JACK Cleveland/Thistledown Acquisition for a purchase price of $843.3 million and entry into a triple net lease agreement with a subsidiary of JACK Entertainment;

 

   

The funding of the JACK Cleveland loan in the amount of $50.0 million with a subsidiary of Rock Ohio Ventures LLC; and

 

   

The use of $600.0 million of the gross proceeds of the offering of the Existing Senior Notes to finance a portion of the purchase price of the JACK Cleveland/Thistledown Acquisition and related fees and expenses.

Eldorado Transaction

 

   

The CPLV Additional Rent Acquisition for a purchase price of $1,189.9 million;

 

   

The HLV Additional Rent Acquisition for a purchase price of $213.8 million;

 

   

The MTA Properties Acquisition for a purchase price (including a purchase price adjustment of $14.0 million) of $1,823.5 million;

 

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The financial statement impact of the Subsequent Lease Modifications;

 

   

The use of $2,000.0 million of the gross proceeds of this offering to finance a portion of Holdings’ cash needs relating to the Eldorado Transaction; and

 

   

The use of $1,650.0 million of the gross proceeds of the offering of the Existing Senior Notes to repay in full the CPLV CMBS Debt and pay related fees and expenses.

The assumptions used and pro forma adjustments derived from such assumptions are based on currently available information, and in many cases are based on estimates and preliminary information. The assumptions underlying the pro forma adjustments are described in the accompanying notes to the unaudited pro forma consolidated and combined financial statements of Holdings. We believe such assumptions are reasonable under the circumstances and reflect our best currently available estimates and judgments. However, no assurance can be given that the JACK Cleveland/Thistledown Acquisition or the Eldorado Transaction will occur on the terms or timing contemplated herein, or at all. Furthermore, the unaudited pro forma consolidated and combined financial statements are not reflective of Holdings’ future financial condition or results of operations and do not necessarily reflect what our financial condition or results of operations would have been had the transactions to which the pro forma adjustments relate actually occurred on the dates indicated.

The unaudited pro forma consolidated and combined financial statements are derived from and should be read in conjunction with Holdings’ consolidated financial statements and related notes included in Holdings’ Annual Report and Holdings’ consolidated financial statements and related notes included in Holdings’ Quarterly Report on Form 10-Q for the quarters ended September 30, 2019 and 2018.

 

11


Unaudited Pro Forma Consolidated and Combined Balance Sheet

As of September 30, 2019

(in thousands, except share and per share amounts)

 

     VICI
Properties
Inc(a)
    Century
Portfolio
Acquisition
    Debt and
Equity
Transactions
    JACK
Cleveland/
Thistledown
Acquistion
    Eldorado
Transaction
    Total
Pro Forma
 

Assets

            

Real estate portfolio:

            

Investments in direct financing and sales-type leases, net

   $ 10,455,900     $ 280,137 (b)    $ —       $ —         2,535,621 (b)    $ 13,271,658  

Investments in loans and financing receivables

     —         —         —         898,884 (b)      1,836,265 (b)      2,735,149  

Investments in operating leases

     1,086,658       —         —         —         (1,086,658 )(b)      —    

Land

     94,711       —         —         —         —         94,711  

Cash and cash equivalents

     431,423       (278,246 )(c)      1,268,880 (c)      —         (1,216,259 )(c)      205,798  

Restricted cash

     32,087       —         —         —         (32,029 )(c)      58  

Short-term investments

     342,767       —         —         (305,701 )(c)      (37,066 )(c)      —    

Other assets

     137,920       (1,891 )(d)      —         (2,646 )(d)      (19,114 )(d)      114,269  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 12,581,466     $ —       $ 1,268,880     $ 590,537     $ 1,980,760     $ 16,421,643  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities

            

Debt, net

   $ 4,125,473     $ —       $ (6,564 )(e)    $ 590,537 (e)    $ 2,042,759 (e)    $ 6,752,205  

Accrued interest

     23,945       —         —         —         —         23,945  

Deferred financing liability

     73,600       —         —         —         —         73,600  

Deferred revenue

     250       —         —         —         —         250  

Dividends payable

     137,048       —         —         —         —         137,048  

Other liabilities

     147,081       —         —         —         (28,579 )(d)      118,502  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     4,507,397       —         (6,564     590,537       2,014,180       7,105,550  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Stockholders’ equity

            

Common stock, $0.01 par value, 700,000,000 shares authorized 461,005,745 shares issued and outstanding at September 30, 2019 and 526,005,745 pro forma shares issued and outstanding

     4,610       —         650 (f)      —         —         5,260  

Preferred stock, $0.01 par value, 50,000,000 shares authorized and no shares outstanding at September 30, 2019 and pro forma shares

     —         —         —         —         —         —    

Additional paid-in capital

     7,816,233       —         1,313,944 (f)      —         —         9,130,177  

Accumulated other comprehensive income

     (77,116     —         —         —         —         (77,116

Retained earnings

     246,587       —         (39,150 )(g)      —         (44,124 )(g)      163,313  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total VICI stockholders’ equity

     7,990,314       —         1,275,444       —         (44,124     9,221,634  

Non-controlling interests

     83,755       —         —         —         10,704 (h)      94,459  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     8,074,069       —         1,275,444       —         (33,420     9,316,093  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 12,581,466     $ —       $ 1,268,880     $ 590,537     $ 1,980,760     $ 16,421,643  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

12


Unaudited Pro Forma Consolidated and Combined Statement of Operations

For the Nine Months Ended September 30, 2019

(in thousands, except share and per share amounts)

 

     VICI
Properties
Inc (aa)
    Recently
Completed
Transactions
    Debt and
Equity
Transactions
    JACK Cleveland/
Thistledown
Acquistion
    Eldorado
Transaction
    Total
Pro Forma
 

Revenues

            

Income from direct financing and sales-type leases

   $ 603,300     $ 66,978 (ee)    $ —       $ —       $ 186,038 (jj)    $ 856,316  

Income from operating leases

     32,740       —         —         —         (32,740 )(jj)      —    

Income from loans and financing receivables

     —         —         —         51,154 (hh)      130,267 (jj)      181,421  

Golf operations

     21,221       —         —         —         —         21,221  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revenues

     657,261       66,978       —         51,154       283,565       1,058,958  

Operating Expenses

            

General and administrative

     19,460       —         —         —         —         19,460  

Depreciation

     2,948       —         —         —         —         2,948  

Golf operations

     14,363       —         —         —         —         14,363  

Acquisition and transaction expense

     4,749       —         —         —         —         4,749  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     41,520       —         —         —         —         41,520  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     615,741       66,978       —         51,154       283,565       1,017,438  

Interest expense

     (176,936     —         14,230 (gg)      (20,889 )(ii)      (68,151 )(kk)      (251,746

Interest income

     15,861       —         —         —         —         15,861  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     454,666       66,978       14,230       30,265       215,414       781,553  

Income tax expense

     (1,098     (611 )(ff)      —         (318 )(ff)      (1,601 )(ff)      (3,628
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     453,568       66,367       14,230       29,947       213,813       777,925  

Less: Net income attributable to non-controlling interests

     (6,235     —         —         —         (554 )(ll)      (6,789
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to common shareholders

   $ 447,333     $ 66,367     $ 14,230     $ 29,947     $ 213,259     $ 771,136  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share

            

Basic

             $ 1.47  

Diluted

             $ 1.47  

Weighted average number of common shares outstanding

 

         

Basic

               524,038,621 (mm) 

Diluted

               524,362,457 (mm) 

 

13


Unaudited Pro Forma Consolidated and Combined Statement of Operations

For the Nine Months Ended September 30, 2018

(in thousands, except share and per share amounts)

 

    VICI
Properties
Inc (bb)
    Adoption
of ASC
842 (dd)
    Recently
Completed
Transactions
    Debt and
Equity
Transactions
    JACK Cleveland/
Thistledown
Acquistion
    Eldorado
Transaction
    Total
Pro Forma
 

Revenues

             

Income from direct financing and sales-type leases

  $ 554,293     $ —       $ 117,325 (ee)    $ —       $ —       $ 178,371 (jj)    $ 849,989  

Income from operating leases

    36,627       —         (3,886 )(ee)      —         —         (32,741 )(jj)      —    

Income from loans and financing receivables

    —         —         —         —         51,290 (hh)      128,988 (jj)      180,278  

Tenant reimbursement of property taxes

    61,322       (61,322     —         —         —         —         —    

Golf operations

    19,696       —         —         —         —         —         19,696  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revenues

    671,938       (61,322     113,439       —         51,290       274,618       1,049,963  

Operating Expenses

             

General and administrative

    20,145       —         —         —         —         —         20,145  

Depreciation

    2,757       —         —         —         —         —         2,757  

Property taxes

    61,598       (61,322     —         —         —         —         276  

Golf operations

    12,832       —         —         —         —         —         12,832  

Loss on impairment

    12,334       —         —         —         —         —         12,334  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    109,666       (61,322     —         —         —         —         48,344  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    562,272       —         113,439       —         51,290       274,618       1,001,619  

Interest expense

    (158,365     —         —         14,230 (gg)      (20,889 )(ii)      (68,151 )(kk)      (233,175

Interest income

    7,504       —         —         —         —         —         7,504  

Loss from extinguishment of debt

    (23,040     —         —         —         —         —         (23,040
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    388,371       —         113,439       14,230       30,401       206,467       752,908  

Income tax expense

    (884     —         (611 )(ff)      —         (318 )(ff)      (1,601 )(ff)      (3,414
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    387,487       —         112,828       14,230       30,083       204,866       749,494  

Less: Net income attributable to non-controlling interests

    (6,409     —         —         —         —         (315 )(ll)      (6,724
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to common shareholders

  $ 381,078     $ —       $ 112,828     $ 14,230     $ 30,083     $ 204,551     $ 742,770  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share

             

Basic

              $ 1.43  

Diluted

              $ 1.43  

Weighted average number of common shares outstanding

 

           

Basic

                519,417,230 (mm) 

Diluted

                519,462,075 (mm) 

 

14


Unaudited Pro Forma Consolidated and Combined Statement of Operations

For the Year Ended December 31, 2018

(in thousands, except share and per share amounts)

 

    VICI
Properties
Inc (cc)
    Adoption
of ASC
842 (dd)
    Recently
Completed
Transactions
    Debt and
Equity
Transactions
    JACK Cleveland/
Thistledown
Acquistion
    Eldorado
Transaction
    Total
Pro Forma
 

Revenues

             

Income from direct financing and sales-type leases

  $ 741,564     $ —       $ 154,045 (ee)    $ —       $ —       $ 238,799 (jj)    $ 1,134,408  

Income from operating leases

    47,972       —         (4,319 )(ee)      —         —         (43,653 )(jj)      —    

Income from loans and financing receivables

    —         —         —         —         68,367 (hh)      172,200 (jj)      240,567  

Tenant reimbursement of property taxes

    81,240       (81,240     —         —         —         —         —    

Golf operations

    27,201       —         —         —         —         —         27,201  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revenues

    897,977       (81,240     149,726       —         68,367       367,346       1,402,176  

Operating Expenses

             

General and administrative

    24,429       —         —         —         —         —         24,429  

Depreciation

    3,686       —         —         —         —         —         3,686  

Property taxes

    81,810       (81,240     —         —         —         —         570  

Golf operations

    17,371       —         —         —         —         —         17,371  

Loss on impairment

    12,334       —         —         —         —         —         12,334  

Transaction and acquisition expense

    393       —         —         —         —         —         393  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    140,023       (81,240     —         —         —         —         58,783  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    757,954       —         149,726       —         68,367       367,346       1,343,393  

Interest expense

    (212,663     —         —         18,974 (gg)      (27,852 )(ii)      (90,868 )(kk)      (312,409

Interest income

    11,307       —         —         —         —         —         11,307  

Loss from extinguishment of debt

    (23,040     —         —         —         —         —         (23,040
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    533,558       —         149,726       18,974       40,515       276,478       1,019,251  

Income tax expense

    (1,441     —         (815 )(ff)      —         (424 )(ff)      (2,134 )(ff)      (4,814
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    532,117       —         148,911       18,974       40,091       274,344       1,014,437  

Less: Net income attributable to non-controlling interests

    (8,498     —         —         —         —         (479 )(ll)      (8,977
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to common shareholders

  $ 523,619     $ —       $ 148,911     $  18,974     $ 40,091     $  273,865     $ 1,005,460  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share

             

Basic

              $ 1.94  

Diluted

              $ 1.94  

Weighted average number of common shares outstanding

             

Basic

                519,406,994 (mm) 

Diluted

                519,434,700 (mm) 

 

15


Note 1—Balance Sheet Pro Forma Adjustments

 

  (a)

Represents the balance sheet of Holdings as of September 30, 2019, as set forth in Holdings’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.

 

  (b)

Represents:

 

   

The Century Portfolio Acquisition accounted for as sales-type leases under ASC 842

The JACK Cleveland/Thistledown Acquisition as follows:

 

   

The JACK Cleveland/Thistledown Lease Agreement was accounted for entirely as a financing receivable in accordance with ASC 310—Receivables. The transaction met the definition of a sales-type lease under ASC 842, and it further met the definition of a sale leaseback transaction under ASC 842, under which the lease is accounted for as a financing in accordance with ASC 310—Receivables.

 

   

The JACK Cleveland loan accounted for as a financing receivable under ASC 310—Receivables.

The Eldorado Transaction as follows:

 

   

Upon the CPLV Additional Rent Acquisition, HLV Additional Rent Acquisition and resulting modification of the related leases, the CPLV Lease Agreement was reassessed and both the land and building components of the modified CPLV Lease Agreement were determined to be sales-type leases. As such, the land component, previously determined to be an operating lease, was reclassified as a sales-type lease.

 

   

The MTA Properties Acquisition was accounted for entirely as a financing receivable in accordance with ASC 310—Receivables. The transaction met the definition of a sales-type lease under ASC 842, and it further met the definition of a sale leaseback transaction under ASC 842, under which the lease is accounted for as a financing in accordance with ASC 310—Receivables.

 

   

The amendments to the Joliet Lease Agreement and Non-CPLV Lease Agreement were determined to meet the definition of a modification under ASC 842. In accordance with modification guidance, the lease classifications were reassessed and the land and building components of the leases were determined to be sales-type leases. The operating land associated with the Non-CPLV Lease Agreement, previously classified as an Investment in operating leases, was reclassified as sales-type lease upon modification.

These investments are inclusive of an estimated $23.4 million of capitalized initial direct costs and loan origination fees that Holdings and its subsidiaries anticipate incurring in connection with these transactions, including the previously incurred costs noted in (d) below

 

  (c)

Represents:

 

   

the cash and short-term investments used to pay for the aggregate purchase price of the Century Portfolio Acquisition and a portion of the aggregate purchase price of the JACK Cleveland/Thistledown Acquisition and Eldorado Transaction;

 

   

the net cash payment of the fees and expenses related to the redemption and refinancing of the PropCo Notes;

 

   

the estimated net proceeds from the physical settlement of the 65,000,000 shares of common stock associated with the forward sale agreements at the forward settlement price of $20.22 per share (the forward price as of September 30, 2019);

 

   

the release of restricted cash held in escrow upon the refinancing of the CMBS CPLV Debt; and

 

   

the payment of the bridge commitment and structuring fees upon termination of the Bridge Facilities.

 

16


  (d)

Represents:

 

   

$28.6 million payment of the bridge commitment and structuring fee.

 

   

$15.5 million in unamortized costs relating to the bridge commitment and structuring fee.

 

   

$8.1 million reclassification of previously incurred deferred costs associated with the Century Portfolio Acquisition, JACK Cleveland/Thistledown Acquisition and Eldorado Transaction as Investments in direct financing and sales-type leases;

 

  (e)

Represents:

 

   

$2,500.0 million of notes issued in this offering, the net proceeds of which will be used to redeem the outstanding PropCo Notes in full and to pay a portion of the purchase prices for the Eldorado Transaction.

 

   

$2,250.0 million of Existing Senior Notes issued in the November 2019 offering, the net proceeds of which were used to repay in full the CPLV CMBS Debt and the remainder of which will be used to pay a portion of the purchase price of the JACK Cleveland/Thistledown Acquisition.

These borrowings are net of $74.8 million of deferred financing costs, of which $35.9 was previously incurred in relation to our Existing Senior Notes offering and $38.9 million that we anticipate incurring in connection with the current notes offering. See paragraph (gg) and (kk) to Note 2—Statements of Operations Pro Forma Adjustments below.

 

  (f)

Represents the net proceeds upon full physical settlement of the 65,000,000 shares of common stock associated with the forward sale agreements at the forward settlement price of $20.22 per share (the forward price as of September 30, 2019). The actual net proceeds that Holdings will receive from the settlement of the forward sales agreements will be based on numerous factors, including the settlement method and the forward sale price at the time of settlement. As a result, the actual net proceeds from the sale will likely differ from the net proceeds estimated for purposes of these unaudited pro forma consolidated and combined financial statements.

 

  (g)

Represents the adjustment to retained earnings from the non-recurring items as follows:

 

   

$39.2 million loss from extinguishment of debt as a result of the redemption and refinancing of the PropCo Notes in connection with this offering.

 

   

$31.9 million, which represents Holdings’ share of the $42.6 million gain on lease modification as a result of the Subsequent Lease Modifications with the Eldorado Transactions. Such amounts are recognized as the difference between the carrying value of the net investment in direct financing leases or operating leases and the fair value of the net investment in sales-type leases subsequent to modification.

 

   

$58.0 million loss from extinguishment of debt as a result of the CPLV CMBS Debt refinancing.

 

   

$15.5 million representing the full amortization of the bridge structuring and commitment fees as described in (d) above.

 

   

$2.5 million in legal and third-party leasing costs which are required to be expensed under ASC 842.

 

  (h)

Represents the portion of the gain on lease modification as described in (g) above attributable to the non-controlling interest holder in the joint venture of our Joliet property.

Note 2—Statements of Operations Pro Forma Adjustments

 

  (aa)

Represents Holdings’ results of operations for the nine months ended September 30, 2019, as set forth in Holdings’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.

 

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  (bb)

Represents Holdings’ results of operations for the nine months ended September 30, 2018, as set forth in Holdings’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2018.

 

  (cc)

Represents Holdings’ results of operations for the year ended December 31, 2018, as set forth in Holdings’ Annual Report on Form 10-K.

 

  (dd)

Represents the adjustments to the Statement of Operations to conform presentation for the adoption of ASC 842 to present on a net basis the payments of property taxes made directly by our tenants.

 

  (ee)

Represents pro forma adjustments to revenues for the Recently Completed Transactions as follows:

Octavius Tower Acquisition, Harrah’s Philadelphia Acquisition and Initial Lease Modifications

 

   

$17.5 million of additional income from direct financing and sales-type leases for the nine months ended September 30, 2018 and $21.0 million of additional income from direct financing and sales-type leases for the year ended December 31, 2018 associated with the rent from Octavius Tower and Harrah’s Philadelphia and the impact of the Initial Lease Modifications. Pro forma cash received from the Octavius Tower Acquisition and Harrah’s Philadelphia Acquisition during the nine months ended September 30, 2018 and year ended December 31, 2018 was $41.1 million and $56.1 million, respectively. No adjustment was required for the nine months ended September 30, 2019 since the transactions closed during the year ended December 31, 2018.

 

   

$3.9 million decrease in income from operating leases for the nine months ended September 30, 2018 and $4.3 million decrease in income from operating leases for the year ended December 31, 2018 as a result of the modifications to the CPLV Lease Agreement pursuant to the Initial Lease Modifications and the resulting changes in the minimum rents due as well as changes in the allocation of income between the portion of the CPLV Lease Agreement accounted for as a direct financing lease and the portion accounted for as an operating lease. Such adjustment does not result in a change to the pro forma cash received under our lease agreements. No adjustment was required for the nine months ended September 30, 2019 since the Initial Lease Modifications took place during the year ended December 31, 2018.

Margaritaville Acquisition

 

   

$14.4 million of income from direct financing and sales-type leases for the nine months ended September 30, 2018 and $19.2 million of income from direct financing and sales-type leases for the year ended December 31, 2018. Pro forma cash received under the lease agreement was $17.4 million and $23.2 million during nine months ended September 30, 2018 and the year ended December 31, 2018. The adjustment for the nine months ended September, 2019 was determined to be immaterial as the Margaritaville Acquisition closed on January 2, 2019.

Greektown Acquisition

 

   

$17.4 million of additional income from direct financing and sales-type leases for the nine months ended September 30, 2019, $34.5 million of additional income from direct financing and sales-type leases for the nine months ended September 30, 2018 and $45.9 million of income from direct financing and sales-type leases for the year ended December 31, 2018. Pro forma cash received under the lease agreement during the nine months ended September 30, 2019, nine months ended September 30, 2018 and year ended December 31, 2018 was $41.7 million, $41.7 million and $55.6 million, respectively.

JACK Cincinnati Acquisition

 

   

$30.0 million of additional income from direct financing and sales-type leases for the nine months ended September 30, 2019, $31.4 million of additional income from direct financing and sales-type

 

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leases for the nine months ended September 30, 2018 and $41.9 million of income from direct financing and sales-type leases for the year ended December 31, 2018 . Pro forma cash received under the lease agreement during the nine months ended September 30, 2019, nine months ended September 30, 2018 and year ended December 31, 2018 was $32.5 million, $32.1 million and $42.8 million, respectively.

Century Portfolio Acquisition

 

   

$19.6 million of additional income from direct financing and sales-type leases for the nine months ended September 30, 2019, $19.5 million of additional income from direct financing and sales-type leases for the nine months ended September 30, 2018 and $26.0 million of income from direct financing and sales-type leases for the year ended December 31, 2018. Pro forma cash received under the lease during the nine months ended September 30, 2019, nine months ended September 30, 2018 and year ended December 31, 2018 was $18.9 million, $18.8 million and $25.0 million, respectively.

 

  (ff)

Represents estimated federal, state and local taxes that are not reimbursable by our tenants.

 

  (gg)

Represents the pro forma debt financing associated with the redemption and refinancing of the PropCo Notes as follows:

 

   

$14.2 million, $14.2 million and $19.0 million decrease in interest expense for the nine months ended September 30, 2019, the nine months ended September 30, 2018 and the year ended December 31, 2018, respectively, related to the portion of the notes issued in this offering used to redeem and refinance the PropCo Notes, and related fees and expenses. Holdings has assumed that the notes issued in this offering have a fixed weighted average interest rate of 3.95%, plus the amortization of estimated debt issuance costs.

 

  (hh)

Represents pro forma adjustments to revenues for the JACK Cleveland/Thistledown Acquisition as follows:

 

   

$51.2 million of additional income from loan and financing receivables for the nine months ended September 30, 2019, $51.3 million of additional income from loan and financing receivables for the nine months ended September 30, 2018 and $68.4 million of income from loan and financing receivables for the year ended December 31, 2018. Pro forma cash received during the nine months ended September 30, 2019, nine months ended September 30, 2018 and year ended December 31, 2018 was $53.3 million, $52.8 million and $70.4 million, respectively.

 

  (ii)

Represents the increase in interest expense related to $600.0 million of the Existing Senior Notes used to finance a portion of the aggregate purchase price for the JACK Cleveland/Thistledown Acquisition, and related fees and expenses. The Existing Senior Notes have a weighted average fixed interest rate of 4.42%, plus the amortization of debt issuance costs.

 

  (jj)

Represents pro forma adjustments to revenues for the Eldorado Transaction as follows:

 

   

$186.0 million of additional income from direct financing and sales-type leases for the nine months ended September 30, 2019, $178.4 million of additional income from direct financing and sales-type leases for the nine months ended September 30, 2018 and $238.8 million of income from direct financing and sales-type leases for the year ended December 31, 2018 associated with the rent from the CPLV Additional Rent Acquisition and the HLV Additional Rent Acquisition and the impact of the Subsequent Lease Modifications. Pro forma cash received from the CPLV Additional Rent Acquisition and the HLV Additional Rent Acquisition during the nine months ended September 30, 2019, nine months ended September 30, 2018 and year ended December 31, 2018 was $75.4 million, $73.9 million and $98.5 million, respectively.

 

   

$32.7 million, $32.7 million and $43.7 million decreases in income from operating leases for the nine months ended September 30, 2019, the nine months ended September 30, 2018 and the year

 

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ended December 31, 2018, respectively, due to the reassessment of the lease classification resulting in the reclassification of the land component of the CPLV Lease Agreement from an operating lease to a sales-type lease. After giving effect to the Subsequent Lease Modifications, all rent under the modified CPLV Lease Agreement is recognized as a component of Income from direct financing and sales-type leases, net. Such adjustment does not result in a change to the pro forma cash received under our lease agreements.

 

   

$130.3 million, $129.0 million and $172.2 million of income from financing receivable for the nine months ended September 30, 2019, the nine months ended September 30, 2018 and the year ended December 31, 2018, respectively, associated with the rent from the MTA Properties Acquisition. Pro forma cash received under the lease agreement relating to the MTA Properties Acquisition during the nine months ended September 30, 2019, nine months ended September 30, 2018 and year ended December 31, 2018 was $117.2 million, $115.5 million and $154.0 million, respectively.

 

  (kk)

Represents the pro forma debt financing associated with the Eldorado Transaction as follows:

 

   

$62.6 million, $62.6 million and $83.4 million additional interest expense for the nine months ended September 30, 2019, the nine months ended September 30, 2018 and the year ended December 31, 2018, respectively, related to the portion of the notes issued in this offering used to finance a portion of the purchase price for the Eldorado Transaction, and related fees and expenses.

 

   

$5.6 million, $5.6 million and $7.5 million increase in interest expense for the nine months ended September 30, 2019, the nine months ended September 30, 2018 and the year ended December 31, 2018, respectively, related to the portion of the notes issued in the offering of the Existing Senior Notes used to refinance the CPLV CMBS Debt, and related fees and expenses. The Existing Senior Notes have a weighted average fixed interest rate of 4.42%, plus the amortization of estimated debt issuance costs.

 

  (ll)

Represents the portion of the gain on lease modification as described in (g) in Note 1 above attributable to the non-controlling interest holder in the joint venture of our Joliet property.

 

  (mm)

Pro forma earnings per share are based on historical weighted average shares of common stock outstanding, adjusted to assume the following shares were outstanding for the entire periods presented: (i) 65,000,000 shares of common stock to be issued by Holdings under the forward sale agreements (assuming full physical settlement thereof); (ii) 35,000,000 shares of common that Holdings issued in a public offering completed on June 28, 2019; and (iii) for the nine months ended September 30, 2018 and the year ended December 31, 2018, the 69,575,000 shares of common stock that Holdings issued in a public offering completed on February 5, 2018 and the 34,500,000 shares of common stock that Holdings issued in a public offering completed on November 19, 2018.

 

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