Good day, ladies and gentlemen. Thank you for standing by. Welcome to the VICI Properties third quarter 2018 earnings conference call. At this time, all participants are in a listen-only mode. Please note that this conference call is being recorded today, November 2nd, 2018. I will now turn the call over to Samantha Gallagher with VICI Properties.
Thank you, operator, and good morning. Everyone should have access to the company's third quarter 2018 earnings release and the supplemental information. The release and supplemental information can be found in the investors section of the VICI Properties website at www.viciproperties.com. Some of our comments today will be forward-looking statements within the meaning of the federal securities laws. Forward-looking statements, which are usually identified by the use of words such as will, expect, should, guidance, intend, project, 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 filings for a more detailed discussion of the risks that could impact future operating results and financial conditions.
During the call, we will discuss 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 our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our third quarter 2018 earnings release and our supplemental information. Hosting the call today, we have Ed Pitoniak, Chief Executive Officer, John Payne, President and Chief Operating Officer, David Kieske, Chief Financial Officer, and Gabe Wasserman, Chief Accounting Officer. 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. We appreciate you taking the time to join VICI's third quarter earnings call this morning. We released our third quarter results last evening, and it has been just over one year since we emerged from our spinoff. We now have a full year, four fiscal quarters of reported results under our belts. Here are a few of our key accomplishments in building our business over our first four quarters of operations. We've raised nearly $2.4 billion of equity through our Q4 2017 equity private placement and our February 2018 IPO. We've refinanced over $2 billion of debt and eliminated over $1 billion of debt. We've closed or announced a total of $2.1 billion of acquisitions, and we've managed to de-lever from 8.4 times debt to EBITDA emergence to 5.0 times as of Q3 while growing our pro forma AFFO by about 46%.
I might add, we have accomplished all of this within a governance framework that was established to serve our one and only class of shareholder, the common equity shareholder. We realize that our sector leadership is and always will be contingent on us making good decisions, taking the right actions, and managing risks properly day after day after day, so that every day our shareholders' interests are being relentlessly cared for and value is being steadily created. This past quarter, as regards to our growth pipeline, we closed on the Octavius Tower acquisition for $507.5 million, adding $35 million in rent and rounding out our ownership of the real estate of the iconic Caesars Palace Las Vegas. We continue to move toward closing the Margaritaville, Harrah's Philadelphia, and lease modification transactions. We hope to have all of those wrapped up during the fourth quarter.
We continue to see a lot of activity in the sector, as John can attest and will do so in a moment. We don't see ourselves slowing down as we intend to continue to pursue attractive growth opportunities. Not to be forgotten, we still have three call option properties in our back pocket, as well as any ROFO assets become available. Needless to say, we feel very good about how our first year has progressed based on the three key elements of our business model. One, best-in-sector governance and high energetic management capability. Two, high-quality portfolio income that is durable and transparent through all cycles. Three, best-in-sector growth prospects. With that, I'll now turn the call over to John to discuss what we're seeing in the market. John, over to you.
Thanks, Ed, good morning, everyone. The market environment for gaming transactions continues to be active, and the number of transactions announced by us and the gaming REIT sector more broadly over the past year is a testament to the growing confidence operators and investors have in the gaming REIT model. This quarter, we closed on the Octavius Tower at Caesars Palace, and we continue to make progress towards completing the acquisition of Harrah's Philadelphia with Caesars and Margaritaville Bossier City with Penn National, which we hope to close during the fourth quarter. We have no intention of slowing down. As you've seen from the transactions we've announced over the past year, there's no shortage of external growth opportunities currently out in the marketplace.
While we are the new guy in the market, we have longstanding relationships within the industry that have allowed us to make progress towards our goals. Those goals have not changed. We continue to work on diversifying our tenant base, expanding geographically in attractive regional markets, and growing our Las Vegas exposure, all while creating value for our shareholders. As we've said before, we continue to believe we can further build the portfolio by putting your capital to work. The principles key to our success have been our true independence, our depth of understanding of the tenant's underlying business and our focus on executing what we consider fair deals that are mutually beneficial to both the OpCo and VICI. We believe that the acquisitions we've completed and announced to date have demonstrated this not only to our operating partners, but to our shareholders who we've entrusted with their capital.
With that, I'll turn the call over to David, who will discuss our financial results.
Thanks, John. We reported total AFFO of $132.2 million or $0.36 per share for the third quarter. Our earnings for the quarter reflect $232.7 million, which was comprised of Revenue of $232.7 million, which was comprised of $227.3 million from our real property business and $5.4 million from our golf business. Real property business revenue was comprised of $189.9 million of income from direct financing leases, $12.2 million of income from operating leases, and $25.1 million of property taxes paid by our tenants. Our income from direct financing leases for the quarter includes a $13 million net change to our investment in direct financing leases, which is a non-cash item. After adjusting for the non-controlling interest attributable to Joliet, our portion of the DFL that is deducted from net income to calculate AFFO is $12.9 million.
On the cost side, our general and administrative costs were $5.7 million for the quarter. We're thrilled to report that we have completed the previously discussed transition from Las Vegas to New York and reached our steady state run rate for G&A. We continue to expect that costs will hover around $6 million per quarter, with slight fluctuations possibly occurring quarter to quarter. During Q3, the company recognized a $12.3 million non-cash loss on impairment on certain non-operating vacant land parcels. By way of background, as part of our emergence and spinoff from CEOC, VICI inherited approximately 215 acres of non-operating land parcels scattered across the country. All of the land parcels are located outside of Las Vegas, and none of the land parcels are a component of the operations of our regional property portfolio.
As part of our efforts to monetize certain parcels, it was determined the carrying value recorded on our balance sheet at the time of emergence exceeded the fair market value. As a result, we recorded a one-time non-cash impairment and reclassified the remaining land value of approximately $22 million from investments in operating leases to land on the balance sheet. On the acquisition front, on July 11th, we completed the acquisition of Octavius Tower for $507.5 million. The purchase was funded with cash on the balance sheet. Octavius Tower is operating pursuant to a standalone lease, which provides for annual rent of $35 million and has an initial term that expires on October 31st, 2032, with four five-year renewal options. In connection with the closing of Harrah's Philadelphia and the lease modifications, the CTLV lease will be amended to include Octavius Tower.
As has been mentioned, we hope to close Margaritaville and Harrah's Philadelphia and the lease modifications during the fourth quarter. We expect the total net cash outflow for these transactions, including the impact of the $159 million reduction of the Philadelphia purchase price in connection with the agreed-upon lease modifications, to be approximately $344 million. We expect both transactions to be funded using cash on the balance sheet. Turning to our balance sheet, we ended the quarter with approximately $466 million of cash and short-term investments. Our outstanding debt at quarter end was $4.1 billion, with a weighted average interest rate, including the impact of our interest rate swaps of 4.95%, and a weighted average maturity of approximately 5.2 years. We have no debt maturing until 2022. Based on annualized third quarter adjusted EBITDA, our net leverage is five times.
With respect to our guidance for the remainder of 2018, the company is updating its estimated net income per share guidance to reflect the non-cash loss on impairment which occurred in Q3, and we are reaffirming the AFFO per share guidance for the full year 2018. As a reminder, our guidance does not include pending acquisitions that have not yet closed. We estimate that net income attributable to common stockholders will be between $1.44 and $1.45 per diluted share, and that AFFO per share will continue to be between $1.43 and $1.44 per diluted share for the year ending December 31st, 2018. Finally, regarding the company's dividend policy, with the closing of Octavius Tower, we raised our targeted annual dividend rate by 9.5%.
On September 17th, we declared a quarterly dividend of $0.2875 per share of common stock for the third quarter, which reflected the increased annualized dividend rate of $1.15 per share. The dividend was paid on October 11th to stockholders of record as of the close of business on September 28th. In closing, we continue to make tremendous progress as we execute on our strategy. We believe we are well-positioned to keep growing our portfolio and driving shareholder value. Operator, at this time, we'd be happy to open the line for questions.
Thank you. At this time, I would like to remind everyone in order to ask a question, please press star then the number 1 on your telephone keypad. We'll pause for just a moment to compile any questions that may come in. Your first question is from the line of Daniel Adam with Nomura Instinet. Please go ahead, your line is open.
Good morning, everyone. Thanks for taking my question.
Good morning, Dan.
Hi, Dan. Can we talk about the M&A environment a little bit? Outside of the call right properties and other drop-downs from Caesars, what are you guys seeing in terms of new pipeline opportunities? As a follow-up to that, are you seeing opportunities more with publicly traded operators or with both public and private casino owner-operators? Thanks.
John, go ahead.
Yeah. I'm going to sound a little bit like a broken record for the last two quarters we've been speaking. The activity in the space continues to be strong. We're out there. Obviously, as we noted, the new kid on the block, and we're making sure that all the operators out there understand our model and our true independence.
When it comes to whether they're public companies or private companies, I'd say there's a mixture of both out there. Again, we're making sure that we're out there, and it's quite active. Whether all these assets that are out there that we're talking about transact, we don't know. We're making sure that VICI's presence is out there.
Dan, I might just add that what we're benefiting from is the increasing understanding on the part of asset controllers and/or operators as to what the nature of the capital is that we convey to them if we do a sale leaseback transaction. That is to say we're another form of permanent capital, and we believe, in many cases, a cheaper form of permanent capital than they could access, either through the public markets or other private channels.
Okay, great.
Your next question.
That's good for me, guys.
Your next question.
Thank you.
Comes from Smedes Rose with Citi. Please go ahead. Your line is open.
Hi. Thanks. This is Abishai on for Smedes. There have been a lot of media stories about the fate of Caesars. From your perspective, can you talk about what a change of control would mean, if anything, for your existing leases with Caesars, as well as your call options on the three Harrah's casinos?
Sure. Yeah. Just to start with, to provide context, whenever we talk about Caesars, we are in the definition of a long-term relationship with Caesars. It's a relationship that has at least 34 years to go. In 2052, chances are pretty good, if we're all here, and quite frankly, I may not, given my age, but that it would be a relationship that continues into the future. In terms of change of control, I think first of all, just to emphasize what is perhaps obvious, is that Caesars has announced nothing in regard to any potential changes of control. They're obviously undertaking a CEO search, as they announced yesterday. In terms of the technicalities of the change of control, were one to take place, I'll turn it over to David and John.
Yeah. In terms of the call properties, those are essentially obligations of Caesars and the entity, and those would carry forward if there were any change of control. The leases are obligations of the entity as well, and we don't have any concern that those leases would be impacted if there were a change of control. Caesars is our tenant. We're only speculating on what is rumored in the press as you are, but we feel good about our tenant and the relationship we have with our tenant.
I think obviously, you know this well, Smedes, that we're obviously in the triple net space, and you have to look past just quarter by quarter. If you do look at the underlying business of Caesars, you look at the quarter two results, EBITDA was up 13%. This quarter was a little down, but they're forecasting for the fourth quarter, the outlook looks really strong between, I think it was 6% and 16%. Those are healthy growth of the underlying tenant's business.
Great. Would it change the way you think about timing of the call options? Would you want to be more inclined to exercise on them sooner rather than later, or different kinds of different?
No, not necessarily. Our timing on the call properties will always be based upon our believing it is a very opportune time to exercise a call or multiple calls at any given time over the remaining 4 years that we have to call them. We're not concerned about anything that may happen and how it may impact the timing of them. We'll always do it when we believe it's the best time on behalf of our shareholders to take them down.
Okay. Thank you.
Your next question comes from Stephen Grambling with Goldman Sachs. Your line is open.
Hey, good morning. I guess one clarification, just on the impairment. Can you just provide a little more details where some of that land is, maybe why there was a deterioration, or maybe it fell under your expectations or maybe that it is even the cost of the land. Also what you plan to do maybe with the rest of the land?
Sure. Stephen, good morning. This is land that had been on Caesars' balance sheet for years, and John can speak to how long it has been around. This is land that Caesars accumulated over a period of time when there was potential opportunities to expand gaming in jurisdictions or potential licenses that were going to be granted. This is really non de minimis land, non-operating land that is not associated with any casino operations. This is something that the creditors, as part of the bankruptcy, put within the VICI bucket, so to speak. As we went to start to monetize some of this because it has no intrinsic value to us going forward, we realized the value that was, from an accounting standpoint, that was on the books and that was brought over during the emergence was just simply different than the fair market value.
We took a $12 million non-cash write down. It was $34 million in aggregate. Obviously, we wrote that down to $12 million. At the one time, just cleaning up some of the accounting that was done at the time of the emergence.
Great. Thanks. Then maybe turning to just the overall M&A environment, and you alluded to this a little bit, but have you seen any shift at all in property pricing expectations, either due to the rising interest rates or even just Gaming sector performance in general?
Stephen, this is John.
Go ahead, John.
We have not seen any difference in activity or pricing at this time. Maybe it's a little early, and we'll just have to continue to watch that. The activity has been as robust as it has been the previous quarters, as I've communicated. Again, we'll continue to monitor, we'll continue to listen to what's out in the market. We've not seen a decline in the number of activity.
Great. Thank you so much. I'll jump back in the queue.
Thank you.
Your next question comes from Cameron McKnight with Credit Suisse. Your line is open.
Good morning. Thanks very much.
Morning, Cameron.
A question for Ed or David or John. In terms of potential accretion from transactions, a lot of gaming deals over the past few years have been done with 5%-8% accretion to AFFO per share. Where do you think that settles down over time, and do you think it settles down at some level below that?
Yeah. I think historically, Cam, part of the explanation for that magnitude of accretion is that, until recently, most of the big trades were big portfolio trades, that were capable of generating that kind of en bloc accretion. I think when you get down to single assets, it's unlikely you're going to see that magnitude of accretion. I think at that point, you'd be more rightly focused on the cash-on-cash return of the transaction unto itself, as opposed to an EPS accretion per share. Because obviously, as each of the three of us get bigger, accretion per share will become mathematically somewhat harder to achieve.
I would evaluate, especially single asset transactions, not only on an accretion per share basis, which we will always make sure is positive, but also on cash-on-cash return of the acquisition in relation to the cost of capital that was required to execute that transaction.
Perfect. Thanks, Ed. David, in terms of funding M&A, if you were to issue seven to 10-year paper today, where do you think that might price?
Yeah. Seven to 10-year, with our ratings are Ba3/BB rating is kind of in the mid to high fives, is what the bankers continue to tell us. Obviously, rates are moving around, 10-year moves around a bunch, the overall debt market seem liquid and fluid still, at a pricing that would make sense to achieve the accretion that Ed spoke about.
Perfect. Thanks. One last one for John, if I can. John, you've been in the gaming industry a long time. What's your interpretation of what we saw in the third quarter in Vegas?
Yeah, people were prepared for numbers were going to be quite weaker than that, Cam. The numbers that have come out had some weakness compared to prior year. They seem to have exceeded the expectation, which was nice to see. It's funny, I was looking less about the third, Cam, onto the fourth and the first. The operators have talked a lot about the strength that they're seeing in the fourth and into 2019, which is great to hear.
The other thing, Cam, I would just add is that, as John's already alluded to, we're a triple net REIT. We're going to collect the same rent no matter what happens at the operator level quarter-to-quarter. Nonetheless, this is a period where we feel our portfolio strategy of having exposure to both the regional market and Las Vegas is the right strategy for us as a REIT, such that we can confidently distribute cash through all cycles. Because as you did see, for instance, in the results Caesars Entertainment reported yesterday, their regional performance in Q3 was very strong. With about 60% of our portfolio out in the regions, 40% in Las Vegas, again, we like that balance. Again, not that we live quarter-to-quarter, but we like having tenants who have that kind of portfolio exposure and diversity geographically.
Perfect. Thank you very much.
Your next question comes from Carlo Santarelli with Deutsche Bank. Your line is open.
Hey, guys. David, just wanted to circle back to the comment you made earlier, in terms of the, I think, $344 million of financing net for the two transactions, including the lease modification. You mentioned largely cash. I think you guys have about $145 million of cash on the balance sheet as of 3Q end. What's the comfortable balance there you guys are willing to kind of keep at the corporate level?
Carlo, it's good talking to you. The one thing we want to point out is that we also have $320 million of short-term investments. Those are just simply from an accounting classification, highly liquid investment-grade commercial paper with maturities of 91 to 120 days. When you sum those two together, that's the 466 that I referenced in my remarks. We have plenty of cash on the balance sheet to fund the two pending transactions. As we think about our cash needs on a go-forward basis, probably in the $75 million-$100 million range. We want to make sure we've got enough cash to cover the next quarter's dividends. We have very little working capital needs, but want to make sure we're able to just continue to fund our dividends.
With free cash flow that we generate from our low payout ratio also allows us to be well-covered.
Great. Thank you for that. Then just, if I may, one follow-up. As it pertains to
Obviously, some of the changes that are taking place at Caesars. When you think about the potential for them to be doing M&A on the buy side going forward, does any of the decision-making there or anything you could potentially be partnering on, do you believe there might be a little bit of a lag in that right now until things are more settled?
Only time will tell, Carlo. Again, we have a lot of confidence in the Caesars board. We have a lot of confidence in the Caesars management team. I think what you heard yesterday was a continuing commitment to growth over time, and very good results. One thing I just want to highlight that Caesars reported yesterday that probably didn't get the attention it deserves, is the continuing guest satisfaction improvement that Caesars continues to generate in terms of Net Promoter Scores and customer service scores. As real estate and hospitality people with hospitality backgrounds, I put a lot of stock in how happy a tenant's customers are. Whenever you have improving happiness, you have a company that has improving prospects. I think that has implications in how they grow in the future.
Very helpful. Thanks, David. Thanks, Ed.
Your next question comes from Shaun Kelley with Bank of America. Your line is open. Hello, Shaun Kelley. Is your line on mute?
Hi, this is Ally. I'm on for Shaun.
Ally.
I know you guys, in your prepared remarks, mentioned interest in growing in Vegas. I was just wondering, are there any other regional markets that you think seem appealing right now, or ones that maybe you're currently in and would be interested in expanding in?
John?
Yeah. We continue to look at all opportunities. We've talked about expanding our footprint in Vegas, not only on the Strip, but if there was an opportunity to get into the local market there, we like that business. That business continues to grow. We like what we're seeing in the Reno market, which we already have an asset there as well. There are some other regional markets that continue to show great strength and growth, and some regional markets that we just aren't in that we think would continue to diversify our portfolio. If assets came for sale, we would be very interested in those assets as well. That's a short answer, but hitting all the markets, we think there's still opportunity for us to look at all of them.
Okay, great.
Ally, maybe just to add on to John's comment. On a day when we obviously saw a very positive jobs report and, moreover, very positive wage growth, so much of that increased economic vitality is taking place out in the regions, and we feel it is going to mean good things for regional operators for the years to come here.
Got it. Thank you.
Your next question is with Komal Patel with Goldman Sachs. Please go ahead, your line is open.
Hi. Good morning, guys. Just a couple quick follow-ups. What's your appetite on taking on kind of larger transactions or potentially multiple properties at once? Especially considering the pace of M&A so far has been fairly measured.
Ed, you want to touch on that? You want me to?
David, again, I think the underlying question really has to do with our confidence in our ability to effectively fund larger transactions. I'll turn it over to David.
Thanks. Hi, Komal. Nice to chat with you. At the basis of any acquisition is it has to be accretive day one for us. We would not shy away from larger portfolios just because they are larger. We feel that we have good access to both the debt markets and the equity markets as needed to potentially acquire larger acquisitions if they were accretive, if they made sense with our portfolio diversification and our tenant diversification. As John's alluded to, there's a lot going on out there, and we're not shying away from anything just, frankly, given size.
Got it. Yep. That was actually the direction I was going in. Kind of as a follow-up, is there a level of leverage that you think could be just too high and that would kind of trigger you guys considering using equity for a transaction? Is it something in the six range, six and a half range, something higher than that that could kind of frame how you think about these potential transactions?
Yeah. As we've talked about, Komal, and as Ed alluded to it in some of his opening remarks, day of emergence, we were about 8.4 times debt to EBITDA. We're 5.0 times on a net basis today. We are going to be very disciplined in keeping our leverage in the low fives, kind of that five to five and a half times. There may be times when it ticks up slightly north of five and a half times, but it would be hard for us to ever get into a six times debt to EBITDA range. We want to be measured and disciplined and make sure we can grow the portfolio accretively, and we want to work to acquire assets or portfolios on a leverage-neutral basis.
Got it. Thanks. Then just one last one from me. In an effort to be more aggressive on M&A deals, kind of given the landscape, would you consider using a TRS structure for operating rights if an attractive property comes up, something like one of your public peers recently did? Do you think that doesn't quite align with your risk appetite?
I don't think we'd ever rule it out if it made sense at a given time to do so. I would say generally, though, again, we take very seriously, as we obviously have to, the fact that we're a REIT. And we believe that equity capital invests in us as a REIT in order to receive the distributions it does in the most tax effective way possible from the source income. Again, we wouldn't rule it out, but we would always look to see the degree to which we can take any dollar of income that our company generates and turn it over to our investors in the most tax effective way possible.
Understood. Appreciate the time. Thanks so much.
Thanks, Komal.
Your next question is from John DeCree with Union Gaming. Please go ahead. Your line is open.
Morning, everyone. I think you've touched on pretty much all of my questions, Maybe just a housekeeping item if I missed it in the prepared remarks. Do you have a kind of updated timing or time range on the acquisitions of Harrah's and Margaritaville?
John, hey, how you doing? It's David. As we mentioned, we hope to have everything wrapped up by the end of the year. I think Penn guided similar timing on their call around Margaritaville. We're just working through some final regulatory and loan consent processes on both of those transactions.
Okay, got it. Then I guess to kind of stay high level, we've talked a little bit about kind of the M&A environment and your appetites in different parts, Maybe to ask the question a little differently, other than obviously ensuring the next deal that you do is economic and value accretive, are there other strategic priorities in terms of tenant diversity or things that you might be looking for as you kind of scale the M&A environment?
We're obviously always going to value tenant diversity. Tenant diversity is not necessarily just an end unto itself. Tenant diversity is a means of getting more exposure to more markets, more operating practices, more end user, end customer relationships. Again, that will always be a big part of what we're doing. Again, it will have more to do at the end of the day with the quality of the market we're buying into, the quality of the asset in that market, and the operator's relationship to its end customers. If that yields us more and more tenants, we'll obviously be very happy to have achieved that.
Thanks, guys.
Your next question is from RJ Milligan with Baird. Please go ahead. Your line is open.
Hey, good morning, guys. Most of my questions have been asked. I'm curious though, as you're having increased discussions for either smaller portfolios or single assets, is there any change in what sellers are expecting in terms of economics or where you're setting the rents? Just curious how those negotiations have changed possibly from larger deals to smaller deals.
John?
Yeah, RJ, good morning. Not really changed from larger to smaller. I'd answer that question. It really depends on the operator that we're talking to. As you can imagine, there are different goals and objectives depending on the operator, the property, but it has not changed at all in the recent times. It's been quite stable. We'll continue to watch. It's been quite active as we talked about. It really comes down to, what is the seller trying to achieve with a possible deal?
RJ, maybe just to add a little bit to that. The gaming operators, especially the public gaming operators, have come through a wild couple of months here. Post the Q2 earnings announcements, a number of them have seen their stocks get hit pretty hard. It was all so quick, so volatile, so violent really, that I don't think anybody was able to just kind of rise above that and go, okay, now we suddenly have to reprice everything, because I think the greater sense was, what the heck is going on? Only time will tell if this was an air pocket that everybody's going to quickly recover from or if it's something longer term or in nature.
We think given the Q3 results you're seeing from just about every operator out there, that there was a wild overreaction in terms of how the gaming stocks performed over these last two months. We'll refind here pretty quickly an equilibrium that is based upon the fundamentally strong performance that they're all showing.
When we do hit that equilibrium, would you anticipate greater velocity in terms of M&A and/or the selling of real estate?
I don't know if the velocity is necessarily going to pick up. I think there will be commitment obviously, or very much so to the conversations around these potential transactions and a recognition that these transactions do take time.
Thanks for the color, guys.
Thanks, RJ.
If you would like to ask a question, please press star, then the number one on your telephone keypad. Your next question is from Daniel Adam with Nomura Instinet. Please go ahead. Your line is open.
Hey, guys, just one quick follow-up. Can you remind us what the expected AFFO per share accretion is from Harrah's Philadelphia and Margaritaville? Do you intend to update the 4Q and 2018 guidance once those deals close? Thanks.
Yeah, Dan, our policy would be to update guidance once those deals do close. Just as a reminder, Harrah's Philadelphia will generate $21 million of annual rent, and Margaritaville will generate about $23 million of annual rent. You can do the math on the per share that's standing and what that adds to really a full year 2019 in terms of AFFO per share growth, which we think, once we get these closed, our shareholders will benefit from a full year of having those acquisitions in our portfolio. We're excited about what 2019 brings.
Maybe just to restate the obvious, because they are being paid for with the cash on hand, the $400 million plus of cash that David referred to earlier, obviously that rent turns into NOI, turns into AFFO, with 100% flow through just about.
Got it. Thanks, guys.
Thanks, Dan.
There are no further questions at this time. I turn the call back over to the presenters.
Thank you, Karina. Thanks everybody for your time today. We look forward to providing an update on our continued progress, and we'll report our fourth quarter and year-end results. Thanks again.
This concludes today's call. You may now disconnect.