SHAREHOLDERS’ EQUITY AND PARTNERS' CAPITAL

MGP shareholders' equity. On the IPO Date, MGP completed the initial public offering of 57,500,000 of its Class A shares representing limited liability company interests. MGM retained ownership of MGP’s single Class B share. The Class B share is a non-economic interest in MGP which does not provide its holder any rights to profits or losses or any rights to receive distributions from operations of MGP or upon liquidation or winding up of MGP. MGP’s Class B shareholder is entitled to an amount of votes representing a majority of the total voting power of MGP’s shares. If the holder of the Class B share and its controlled affiliates’ (excluding MGP and its subsidiaries) aggregate beneficial ownership of the combined economic interests in MGP and the Operating Partnership falls below 30%, the Class B share is no longer entitled to any voting rights. To the extent that the Class B share is entitled to majority voting power pursuant to MGP’s operating agreement, MGM may only transfer the Class B share (other than transfers to us and MGM’s controlled affiliates) if and to the extent that such transfer is approved by special approval by an independent conflicts committee, not to be unreasonably withheld. When determining whether to grant such approval, the conflicts committee must take into account the interests of MGP’s Class A shareholders and MGP ahead of the interests of the holder of the Class B share. No par value is attributed to the MGP’s Class A and Class B shares.

Operating Partnership capital. On the IPO Date, MGP contributed the proceeds from its initial public offering to the Operating Partnership in exchange for 26.7% of the outstanding Operating Partnership units in the Company. Certain subsidiaries of MGM also acquired 73.3% of the outstanding Operating Partnership units on the IPO Date. As of August 1, 2016, the date of the Borgata Transaction, MGP’s ownership percentage in the Operating Partnership units was reduced to 23.7% and MGM's indirect ownership percentage increased to 76.3%.

MGP dividends and Operating Partnership distributions. On March 15, 2017, the Operating Partnership announced a cash distribution to holders of Operating Partnership units of $94.1 million or $0.3875 per Operating Partnership unit. MGP concurrently declared a cash dividend for the quarter ended March 31, 2017 of $22.3 million or $0.3875 per Class A share payable to shareholders of record as of March 31, 2017. The distribution and dividend were paid on April 13, 2017.

Dividends with respect to MGP’s Class A shares are characterized for federal income tax purposes as taxable ordinary dividends, capital gains dividends, non-dividend distributions or a combination thereof.

The following table presents MGP's changes in shareholders' equity for the three months ended March 31, 2017:



	Class A Shares		Additional Paid-in Capital		Accumulated Deficit			Other Comprehensive Income			Total Shareholders' Equity			Non-controlling Interest			Total Shareholders’ Equity
	(in thousands, except per share amounts)
Balance at January 1, 2017	$	—	$	1,363,130	$	(29,758	)	$	445		1,333,817			$	4,274,444		$	5,608,261
Net income - January 1, 2017 to March 31, 2017	—		—		11,348			—			11,348			35,344			46,692
Other comprehensive loss - cash flow hedges	—		—		—			(150		)	(150		)	(484		)	(634		)
Share-based compensation	—		44		—			—			44			144			188
Deemed contribution - tax sharing agreement											—			1,238			1,238
Dividends declared, $0.3875 per Class A share	—		—		(22,282		)	—			(22,282		)	(71,827		)	(94,109		)
Other	—		96		—			—			96			305			401
Balance at March 31, 2017	$	—	$	1,363,270	$	(40,692	)	$	295		$	1,322,873		$	4,239,164		$	5,562,037

The following table presents the Operating Partnership's changes in partners' capital for the three months ended March 31, 2017:



	General Partner		Limited Partner			Total Partners' Capital
	(in thousands, except per unit amounts)
Balance at January 1, 2017	$	—	$	5,608,261		$	5,608,261
Net income - January 1, 2017 to March 31, 2017	—		46,692			46,692
Other comprehensive loss - cash flow hedges	—		(634		)	(634		)
Share-based compensation	—		188			188
Deemed contribution - tax sharing agreement	—		1,238			1,238
Distributions declared, $0.3875 per Operating Partnership unit	—		(94,109		)	(94,109		)
Other	—		401			401
Balance at March 31, 2017	$	—	$	5,562,037		$	5,562,037