ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE (MGM Growth Properties LLC) DELAWARE (MGM Growth Properties Operating Partnership LP) | 47-5513237 81-1162318 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer X | Accelerated filer | Non-accelerated filer | Small reporting company | Emerging growth company |
Large accelerated filer | Accelerated filer | Non-accelerated filer X | Small reporting company | Emerging growth company |
• | enhances investors’ understanding of MGP and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; |
• | eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both MGP and the Operating Partnership, which we believe will assist investors in getting all relevant information on their investment in one place rather than having to access and review largely duplicative reports; and |
• | creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
Page | ||
PART I. | ||
Item 1. | ||
MGM Growth Properties LLC: | ||
MGM Growth Properties Operating Partnership LP: | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
June 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Real estate investments, net | $ | 9,880,658 | $ | 10,021,938 | |||
Cash and cash equivalents | 289,909 | 259,722 | |||||
Tenant and other receivables, net | 4,197 | 6,385 | |||||
Prepaid expenses and other assets | 51,500 | 18,487 | |||||
Above market lease, asset | 43,801 | 44,588 | |||||
Total assets | $ | 10,270,065 | $ | 10,351,120 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Liabilities | |||||||
Debt, net | $ | 3,923,224 | $ | 3,934,628 | |||
Due to MGM Resorts International and affiliates | 147 | 962 | |||||
Accounts payable, accrued expenses and other liabilities | 9,758 | 10,240 | |||||
Above market lease, liability | 46,625 | 47,069 | |||||
Accrued interest | 25,119 | 22,565 | |||||
Dividend and distribution payable | 114,399 | 111,733 | |||||
Deferred revenue | 147,946 | 127,640 | |||||
Deferred income taxes, net | 28,544 | 28,544 | |||||
Total liabilities | 4,295,762 | 4,283,381 | |||||
Commitments and contingencies (Note 11) | |||||||
Shareholders’ equity | |||||||
Class A shares: no par value, 1,000,000,000 shares authorized, 70,911,166 and 70,896,795 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | — | — | |||||
Additional paid-in capital | 1,717,086 | 1,716,490 | |||||
Accumulated deficit | (126,241 | ) | (94,948 | ) | |||
Accumulated other comprehensive income | 9,141 | 3,108 | |||||
Total Class A shareholders’ equity | 1,599,986 | 1,624,650 | |||||
Noncontrolling interest | 4,374,317 | 4,443,089 | |||||
Total shareholders’ equity | 5,974,303 | 6,067,739 | |||||
Total liabilities and shareholders’ equity | $ | 10,270,065 | $ | 10,351,120 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues | |||||||||||||||
Rental revenue | $ | 186,563 | $ | 163,177 | $ | 373,126 | $ | 326,354 | |||||||
Tenant reimbursements and other | 33,827 | 21,279 | 63,103 | 42,001 | |||||||||||
220,390 | 184,456 | 436,229 | 368,355 | ||||||||||||
Expenses | |||||||||||||||
Depreciation | 67,474 | 60,227 | 136,465 | 121,911 | |||||||||||
Property transactions, net | 14,426 | 10,587 | 18,512 | 17,442 | |||||||||||
Reimbursable expenses | 32,907 | 20,642 | 61,267 | 41,129 | |||||||||||
Amortization of above market lease, net | 172 | 172 | 343 | 343 | |||||||||||
Acquisition-related expenses | 2,131 | — | 2,672 | — | |||||||||||
General and administrative | 2,755 | 2,661 | 6,663 | 5,341 | |||||||||||
119,865 | 94,289 | 225,922 | 186,166 | ||||||||||||
Operating income | 100,525 | 90,167 | 210,307 | 182,189 | |||||||||||
Non-operating income (expense) | |||||||||||||||
Interest income | 1,278 | 881 | 2,310 | 1,559 | |||||||||||
Interest expense | (49,276 | ) | (44,818 | ) | (98,506 | ) | (89,454 | ) | |||||||
Other non-operating expenses | (3,205 | ) | (1,178 | ) | (5,389 | ) | (1,312 | ) | |||||||
(51,203 | ) | (45,115 | ) | (101,585 | ) | (89,207 | ) | ||||||||
Income before income taxes | 49,322 | 45,052 | 108,722 | 92,982 | |||||||||||
Provision for income taxes | (1,263 | ) | (1,177 | ) | (2,494 | ) | (2,415 | ) | |||||||
Net income | 48,059 | 43,875 | 106,228 | 90,567 | |||||||||||
Less: Net (income) attributable to noncontrolling interest | (34,913 | ) | (33,195 | ) | (77,252 | ) | (68,539 | ) | |||||||
Net income attributable to Class A shareholders | $ | 13,146 | $ | 10,680 | $ | 28,976 | $ | 22,028 | |||||||
Weighted average Class A shares outstanding: | |||||||||||||||
Basic | 70,993,091 | 57,687,558 | 70,982,243 | 57,596,223 | |||||||||||
Diluted | 71,184,996 | 57,854,088 | 71,158,585 | 57,818,511 | |||||||||||
Net income per Class A share (basic) | $ | 0.19 | $ | 0.19 | $ | 0.41 | $ | 0.38 | |||||||
Net income per Class A share (diluted) | $ | 0.18 | $ | 0.18 | $ | 0.41 | $ | 0.38 | |||||||
Dividends declared per Class A share | $ | 0.4300 | $ | 0.3950 | $ | 0.8500 | $ | 0.7825 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 48,059 | $ | 43,875 | $ | 106,228 | $ | 90,567 | |||||||
Other comprehensive income (loss) | |||||||||||||||
Unrealized gain (loss) on cash flow hedges, net | 6,281 | (4,112 | ) | 22,636 | (4,746 | ) | |||||||||
Other comprehensive income (loss) | 6,281 | (4,112 | ) | 22,636 | (4,746 | ) | |||||||||
Comprehensive income | 54,340 | 39,763 | 128,864 | 85,821 | |||||||||||
Less: Comprehensive (income) attributable to noncontrolling interests | (39,519 | ) | (30,058 | ) | (93,855 | ) | (64,918 | ) | |||||||
Comprehensive income attributable to Class A shareholders | $ | 14,821 | $ | 9,705 | $ | 35,009 | $ | 20,903 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities | |||||||
Net income | $ | 106,228 | $ | 90,567 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 136,465 | 121,911 | |||||
Property transactions, net | 18,512 | 17,442 | |||||
Amortization of deferred financing costs and debt discount | 6,056 | 5,623 | |||||
Loss on retirement of debt | 2,736 | 798 | |||||
Amortization related to above market lease, net | 343 | 343 | |||||
Provision for income taxes | 2,494 | 2,415 | |||||
Straight-line rental revenues | 8,635 | 1,571 | |||||
Amortization of deferred revenue | (1,836 | ) | (872 | ) | |||
Share-based compensation | 940 | 550 | |||||
Changes in operating assets and liabilities: | |||||||
Tenant and other receivables, net | 2,188 | 5,337 | |||||
Prepaid expenses and other assets | (83 | ) | (5,229 | ) | |||
Due to MGM Resorts International and affiliates | (815 | ) | 67 | ||||
Accounts payable, accrued expenses and other liabilities | (84 | ) | (1,248 | ) | |||
Accrued interest | 2,554 | (8,557 | ) | ||||
Net cash provided by operating activities | 284,333 | 230,718 | |||||
Cash flows from investing activities | |||||||
Capital expenditures for property and equipment | (190 | ) | — | ||||
Net cash used in investing activities | (190 | ) | — | ||||
Cash flows from financing activities | |||||||
Deferred financing costs | (17,490 | ) | (1,024 | ) | |||
Repayment of debt | (13,000 | ) | (25,125 | ) | |||
Dividends and distributions paid | (223,466 | ) | (188,219 | ) | |||
Net cash used in financing activities | (253,956 | ) | (214,368 | ) | |||
Cash and cash equivalents | |||||||
Net increase for the period | 30,187 | 16,350 | |||||
Balance, beginning of period | 259,722 | 360,492 | |||||
Balance, end of period | $ | 289,909 | $ | 376,842 | |||
Supplemental cash flow disclosures | |||||||
Interest paid | $ | 89,627 | $ | 92,301 | |||
Non-cash investing and financing activities | |||||||
Non-Normal Tenant Improvements by Tenant | $ | 13,507 | $ | 17,297 | |||
Accrual of dividend and distribution payable to Class A shareholders and Operating Partnership unit holders | $ | 114,399 | $ | 95,995 |
June 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Real estate investments, net | $ | 9,880,658 | $ | 10,021,938 | |||
Cash and cash equivalents | 289,909 | 259,722 | |||||
Tenant and other receivables, net | 4,197 | 6,385 | |||||
Prepaid expenses and other assets | 51,500 | 18,487 | |||||
Above market lease, asset | 43,801 | 44,588 | |||||
Total assets | $ | 10,270,065 | $ | 10,351,120 | |||
LIABILITIES AND PARTNERS' CAPITAL | |||||||
Liabilities | |||||||
Debt, net | $ | 3,923,224 | $ | 3,934,628 | |||
Due to MGM Resorts International and affiliates | 147 | 962 | |||||
Accounts payable, accrued expenses and other liabilities | 9,758 | 10,240 | |||||
Above market lease, liability | 46,625 | 47,069 | |||||
Accrued interest | 25,119 | 22,565 | |||||
Distribution payable | 114,399 | 111,733 | |||||
Deferred revenue | 147,946 | 127,640 | |||||
Deferred income taxes, net | 28,544 | 28,544 | |||||
Total liabilities | 4,295,762 | 4,283,381 | |||||
Commitments and contingencies (Note 11) | |||||||
Partners' capital | |||||||
General partner | — | — | |||||
Limited partners: 266,045,289 and 266,030,918 Operating Partnership units issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 5,974,303 | 6,067,739 | |||||
Total partners' capital | 5,974,303 | 6,067,739 | |||||
Total liabilities and partners’ capital | $ | 10,270,065 | $ | 10,351,120 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues | |||||||||||||||
Rental revenue | $ | 186,563 | $ | 163,177 | $ | 373,126 | $ | 326,354 | |||||||
Tenant reimbursements and other | 33,827 | 21,279 | 63,103 | 42,001 | |||||||||||
220,390 | 184,456 | 436,229 | 368,355 | ||||||||||||
Expenses | |||||||||||||||
Depreciation | 67,474 | 60,227 | 136,465 | 121,911 | |||||||||||
Property transactions, net | 14,426 | 10,587 | 18,512 | 17,442 | |||||||||||
Reimbursable expenses | 32,907 | 20,642 | 61,267 | 41,129 | |||||||||||
Amortization of above market lease, net | 172 | 172 | 343 | 343 | |||||||||||
Acquisition-related expenses | 2,131 | — | 2,672 | — | |||||||||||
General and administrative | 2,755 | 2,661 | 6,663 | 5,341 | |||||||||||
119,865 | 94,289 | 225,922 | 186,166 | ||||||||||||
Operating income | 100,525 | 90,167 | 210,307 | 182,189 | |||||||||||
Non-operating income (expense) | |||||||||||||||
Interest income | 1,278 | 881 | 2,310 | 1,559 | |||||||||||
Interest expense | (49,276 | ) | (44,818 | ) | (98,506 | ) | (89,454 | ) | |||||||
Other non-operating expenses | (3,205 | ) | (1,178 | ) | (5,389 | ) | (1,312 | ) | |||||||
(51,203 | ) | (45,115 | ) | (101,585 | ) | (89,207 | ) | ||||||||
Income before income taxes | 49,322 | 45,052 | 108,722 | 92,982 | |||||||||||
Provision for income taxes | (1,263 | ) | (1,177 | ) | (2,494 | ) | (2,415 | ) | |||||||
Net income | 48,059 | 43,875 | 106,228 | 90,567 | |||||||||||
Weighted average Operating Partnership units outstanding: | |||||||||||||||
Basic | 266,127,214 | 243,049,694 | 266,116,366 | 242,958,359 | |||||||||||
Diluted | 266,319,119 | 243,216,224 | 266,292,708 | 243,180,647 | |||||||||||
Net income per Operating Partnership unit (basic) | $ | 0.18 | $ | 0.18 | $ | 0.40 | $ | 0.37 | |||||||
Net income per Operating Partnership unit (diluted) | $ | 0.18 | $ | 0.18 | $ | 0.40 | $ | 0.37 | |||||||
Distributions declared per Operating Partnership unit | $ | 0.4300 | $ | 0.3950 | $ | 0.8500 | $ | 0.7825 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 48,059 | $ | 43,875 | $ | 106,228 | $ | 90,567 | |||||||
Unrealized gain (loss) on cash flow hedges, net | 6,281 | (4,112 | ) | 22,636 | (4,746 | ) | |||||||||
Comprehensive income | $ | 54,340 | $ | 39,763 | $ | 128,864 | $ | 85,821 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities | |||||||
Net income | $ | 106,228 | $ | 90,567 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 136,465 | 121,911 | |||||
Property transactions, net | 18,512 | 17,442 | |||||
Amortization of deferred financing costs and debt discount | 6,056 | 5,623 | |||||
Loss on retirement of debt | 2,736 | 798 | |||||
Amortization related to above market lease, net | 343 | 343 | |||||
Provision for income taxes | 2,494 | 2,415 | |||||
Straight-line rental revenues | 8,635 | 1,571 | |||||
Amortization of deferred revenue | (1,836 | ) | (872 | ) | |||
Share-based compensation | 940 | 550 | |||||
Changes in operating assets and liabilities: | |||||||
Tenant and other receivables, net | 2,188 | 5,337 | |||||
Prepaid expenses and other assets | (83 | ) | (5,229 | ) | |||
Due to MGM Resorts International and affiliates | (815 | ) | 67 | ||||
Accounts payable, accrued expenses and other liabilities | (84 | ) | (1,248 | ) | |||
Accrued interest | 2,554 | (8,557 | ) | ||||
Net cash provided by operating activities | 284,333 | 230,718 | |||||
Cash flows from investing activities | |||||||
Capital expenditures for property and equipment | (190 | ) | — | ||||
Net cash used in investing activities | (190 | ) | — | ||||
Cash flows from financing activities | |||||||
Deferred financing costs | (17,490 | ) | (1,024 | ) | |||
Repayment of debt | (13,000 | ) | (25,125 | ) | |||
Distributions paid | (223,466 | ) | (188,219 | ) | |||
Net cash used in financing activities | (253,956 | ) | (214,368 | ) | |||
Cash and cash equivalents | |||||||
Net increase for the period | 30,187 | 16,350 | |||||
Balance, beginning of period | 259,722 | 360,492 | |||||
Balance, end of period | $ | 289,909 | $ | 376,842 | |||
Supplemental cash flow disclosures | |||||||
Interest paid | $ | 89,627 | $ | 92,301 | |||
Non-cash investing and financing activities | |||||||
Non-Normal Tenant Improvements by Tenant | $ | 13,507 | $ | 17,297 | |||
Accrual of distribution payable to Operating Partnership unit holders | $ | 114,399 | $ | 95,995 |
June 30, 2018 | December 31, 2017 | ||||||
(in thousands) | |||||||
Land | $ | 4,143,513 | $ | 4,143,513 | |||
Buildings, building improvements, land improvements and integral equipment | 8,440,785 | 8,512,334 | |||||
12,584,298 | 12,655,847 | ||||||
Less: Accumulated depreciation | (2,703,640 | ) | (2,633,909 | ) | |||
$ | 9,880,658 | $ | 10,021,938 |
June 30, | December 31, | ||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Senior secured credit facility: | |||||||
Senior secured term loan A facility | $ | 270,000 | $ | 273,750 | |||
Senior secured term loan B facility | 1,808,375 | 1,817,625 | |||||
Senior secured revolving credit facility | — | — | |||||
$1,050 million 5.625% senior notes, due 2024 | 1,050,000 | 1,050,000 | |||||
$500 million 4.50% senior notes, due 2026 | 500,000 | 500,000 | |||||
$350 million 4.50% senior notes, due 2028 | 350,000 | 350,000 | |||||
3,978,375 | 3,991,375 | ||||||
Less: Unamortized discount and debt issuance costs | (55,151 | ) | (56,747 | ) | |||
$ | 3,923,224 | $ | 3,934,628 |
Declaration Date | Record Date | Distribution/ Dividend Per Unit/ Share | Payment Date | Operating Partnership Distribution | MGP Class A Dividend | |||||||||||
(in thousands, except per unit and per share amount) | ||||||||||||||||
2018 | ||||||||||||||||
March 15, 2018 | March 30, 2018 | $ | 0.4200 | April 15, 2018 | $ | 111,733 | $ | 29,777 | ||||||||
June 15, 2018 | June 29, 2018 | $ | 0.4300 | July 16, 2018 | $ | 114,399 | $ | 30,492 | ||||||||
2017 | ||||||||||||||||
March 15, 2017 | March 31, 2017 | $ | 0.3875 | April 13, 2017 | $ | 94,109 | $ | 22,281 | ||||||||
June 15, 2017 | June 30, 2017 | $ | 0.3950 | July 14, 2017 | $ | 95,995 | $ | 22,777 |
Total Class A Shareholders' Equity | Noncontrolling Interest | Total Shareholders’ Equity | |||||||||
(in thousands) | |||||||||||
Balance at December 31, 2017 | $ | 1,624,650 | $ | 4,443,089 | $ | 6,067,739 | |||||
Net income - January 1, 2018 to June 30, 2018 | 28,976 | 77,252 | 106,228 | ||||||||
Other comprehensive income - cash flow hedges | 6,033 | 16,603 | 22,636 | ||||||||
Share-based compensation | 251 | 689 | 940 | ||||||||
Deemed contribution - tax sharing agreement | — | 2,494 | 2,494 | ||||||||
Dividends and distributions declared | (60,269 | ) | (165,864 | ) | (226,133 | ) | |||||
Other | 345 | 54 | 399 | ||||||||
Balance at June 30, 2018 | $ | 1,599,986 | $ | 4,374,317 | $ | 5,974,303 |
General Partner | Limited Partners | Total Partners' Capital | |||||||||
(in thousands) | |||||||||||
Balance at December 31, 2017 | $ | — | $ | 6,067,739 | $ | 6,067,739 | |||||
Net income - January 1, 2018 to June 30, 2018 | — | 106,228 | 106,228 | ||||||||
Other comprehensive income - cash flow hedges | — | 22,636 | 22,636 | ||||||||
Share-based compensation | — | 940 | 940 | ||||||||
Deemed contribution - tax sharing agreement | — | 2,494 | 2,494 | ||||||||
Distributions declared | — | (226,133 | ) | (226,133 | ) | ||||||
Other | — | 399 | 399 | ||||||||
Balance at June 30, 2018 | $ | — | $ | 5,974,303 | $ | 5,974,303 |
Cash Flow Hedges | |||
(in thousands) | |||
Balance at December 31, 2017 | $ | 11,661 | |
Other comprehensive income before reclassifications | 21,802 | ||
Amounts reclassified from accumulated other comprehensive income to interest expense | 834 | ||
Net current period other comprehensive income | 22,636 | ||
Balance at June 30, 2018 | 34,297 | ||
Accumulated other comprehensive income attributable to noncontrolling interest | (25,156 | ) | |
Accumulated other comprehensive income attributable to Class A shareholders | $ | 9,141 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||
Basic net income per share | |||||||||||||||
Numerator: | |||||||||||||||
Net income attributable to Class A shares | $ | 13,146 | $ | 10,680 | $ | 28,976 | $ | 22,028 | |||||||
Denominator: | |||||||||||||||
Basic weighted average Class A shares outstanding (1) | 70,993,091 | 57,687,558 | 70,982,243 | 57,596,223 | |||||||||||
Basic net income per Class A share | $ | 0.19 | $ | 0.19 | $ | 0.41 | $ | 0.38 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||
Diluted net income per share | |||||||||||||||
Numerator: | |||||||||||||||
Net income attributable to Class A shares | $ | 13,146 | $ | 10,680 | $ | 28,976 | $ | 22,028 | |||||||
Denominator: | |||||||||||||||
Basic weighted average Class A shares outstanding (1) | 70,993,091 | 57,687,558 | 70,982,243 | 57,596,223 | |||||||||||
Effect of dilutive shares for diluted net income per Class A share (2) | 191,905 | 166,530 | 176,342 | 222,288 | |||||||||||
Weighted average shares for diluted net income per Class A share | 71,184,996 | 57,854,088 | 71,158,585 | 57,818,511 | |||||||||||
Diluted net income per Class A share (3) | $ | 0.18 | $ | 0.18 | $ | 0.41 | $ | 0.38 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||
Basic net income per Operating Partnership unit | |||||||||||||||
Numerator: | |||||||||||||||
Net income | $ | 48,059 | $ | 43,875 | $ | 106,228 | $ | 90,567 | |||||||
Denominator: | |||||||||||||||
Basic weighted average Operating Partnership units outstanding (1) | 266,127,214 | 243,049,694 | 266,116,366 | 242,958,359 | |||||||||||
Basis net income per Operating Partnership unit | $ | 0.18 | $ | 0.18 | $ | 0.40 | $ | 0.37 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||
Diluted net income per Operating Partnership unit | |||||||||||||||
Numerator: | |||||||||||||||
Net income | $ | 48,059 | $ | 43,875 | $ | 106,228 | 90,567 | ||||||||
Denominator: | |||||||||||||||
Basic weighted average Operating Partnership units outstanding (1) | 266,127,214 | 243,049,694 | 266,116,366 | 242,958,359 | |||||||||||
Effect of dilutive shares for diluted net income per Operating Partnership unit (2) | 191,905 | 166,530 | 176,342 | 222,288 | |||||||||||
Weighted average shares for diluted net income per Operating Partnership unit | 266,319,119 | 243,216,224 | 266,292,708 | 243,180,647 | |||||||||||
Diluted net income per Operating Partnership unit | $ | 0.18 | $ | 0.18 | $ | 0.40 | $ | 0.37 |
CONSOLIDATING BALANCE SHEET INFORMATION | ||||||||||||||||||||
June 30, 2018 | ||||||||||||||||||||
Operating | Guarantor | |||||||||||||||||||
Partnership | Co-Issuer | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Real estate investments, net | $ | 636 | $ | — | $ | 9,880,022 | $ | — | $ | 9,880,658 | ||||||||||
Cash and cash equivalents | 289,909 | — | — | — | 289,909 | |||||||||||||||
Tenant and other receivables, net | 376 | — | 3,821 | — | 4,197 | |||||||||||||||
Intercompany | 1,001,634 | — | — | (1,001,634 | ) | — | ||||||||||||||
Prepaid expenses and other assets | 51,500 | — | — | — | 51,500 | |||||||||||||||
Investments in subsidiaries | 8,699,073 | — | — | (8,699,073 | ) | — | ||||||||||||||
Above market lease, asset | — | — | 43,801 | — | 43,801 | |||||||||||||||
Total assets | $ | 10,043,128 | $ | — | $ | 9,927,644 | $ | (9,700,707 | ) | $ | 10,270,065 | |||||||||
Debt, net | 3,923,224 | — | — | — | 3,923,224 | |||||||||||||||
Due to MGM Resorts International and affiliates | 147 | — | — | — | 147 | |||||||||||||||
Intercompany | — | — | 1,001,634 | (1,001,634 | ) | — | ||||||||||||||
Accounts payable, accrued expenses and other liabilities | 5,936 | — | 3,822 | — | 9,758 | |||||||||||||||
Above market lease, liability | — | — | 46,625 | — | 46,625 | |||||||||||||||
Accrued interest | 25,119 | — | — | — | 25,119 | |||||||||||||||
Dividend and distribution payable | 114,399 | — | — | — | 114,399 | |||||||||||||||
Deferred revenue | — | — | 147,946 | — | 147,946 | |||||||||||||||
Deferred income taxes, net | — | — | 28,544 | — | 28,544 | |||||||||||||||
Total liabilities | 4,068,825 | — | 1,228,571 | (1,001,634 | ) | 4,295,762 | ||||||||||||||
General partner | — | — | — | — | — | |||||||||||||||
Limited partners | 5,974,303 | — | 8,699,073 | (8,699,073 | ) | 5,974,303 | ||||||||||||||
Total partners' capital | 5,974,303 | — | 8,699,073 | (8,699,073 | ) | 5,974,303 | ||||||||||||||
Total liabilities and partners’ capital | $ | 10,043,128 | $ | — | $ | 9,927,644 | $ | (9,700,707 | ) | $ | 10,270,065 |
CONSOLIDATING BALANCE SHEET INFORMATION | ||||||||||||||||||||
December 31, 2017 | ||||||||||||||||||||
Operating | Guarantor | |||||||||||||||||||
Partnership | Co-Issuer | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Real estate investments, net | $ | 488 | $ | — | $ | 10,021,450 | $ | — | $ | 10,021,938 | ||||||||||
Cash and cash equivalents | 259,722 | — | — | — | 259,722 | |||||||||||||||
Tenant and other receivables, net | 299 | — | 6,086 | — | 6,385 | |||||||||||||||
Intercompany | 1,383,397 | — | — | (1,383,397 | ) | — | ||||||||||||||
Prepaid expenses and other assets | 18,487 | — | — | — | 18,487 | |||||||||||||||
Investments in subsidiaries | 8,479,388 | — | — | (8,479,388 | ) | — | ||||||||||||||
Above market lease, asset | — | — | 44,588 | — | 44,588 | |||||||||||||||
Total assets | $ | 10,141,781 | $ | — | $ | 10,072,124 | $ | (9,862,785 | ) | $ | 10,351,120 | |||||||||
Debt, net | 3,934,628 | — | — | — | 3,934,628 | |||||||||||||||
Due to MGM Resorts International and affiliates | 962 | — | — | — | 962 | |||||||||||||||
Intercompany | — | — | 1,383,397 | (1,383,397 | ) | — | ||||||||||||||
Accounts payable, accrued expenses and other liabilities | 4,154 | — | 6,086 | — | 10,240 | |||||||||||||||
Above market lease, liability | — | — | 47,069 | — | 47,069 | |||||||||||||||
Accrued interest | 22,565 | — | — | — | 22,565 | |||||||||||||||
Dividend and distribution payable | 111,733 | — | — | — | 111,733 | |||||||||||||||
Deferred revenue | — | — | 127,640 | — | 127,640 | |||||||||||||||
Deferred income taxes, net | — | — | 28,544 | — | 28,544 | |||||||||||||||
Total liabilities | 4,074,042 | — | 1,592,736 | (1,383,397 | ) | 4,283,381 | ||||||||||||||
General partner | — | — | — | — | — | |||||||||||||||
Limited partners | 6,067,739 | — | 8,479,388 | (8,479,388 | ) | 6,067,739 | ||||||||||||||
Total partners' capital | 6,067,739 | — | 8,479,388 | (8,479,388 | ) | 6,067,739 | ||||||||||||||
Total liabilities and partners’ capital | $ | 10,141,781 | $ | — | $ | 10,072,124 | $ | (9,862,785 | ) | $ | 10,351,120 |
CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION | ||||||||||||||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||||||
Operating | Guarantor | |||||||||||||||||||
Partnership | Co-Issuer | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
Rental revenue | $ | — | $ | — | $ | 186,563 | $ | — | $ | 186,563 | ||||||||||
Tenant reimbursements and other | — | — | 33,827 | — | 33,827 | |||||||||||||||
— | — | 220,390 | — | 220,390 | ||||||||||||||||
Expenses | ||||||||||||||||||||
Depreciation | 15 | — | 67,459 | — | 67,474 | |||||||||||||||
Property transactions, net | — | — | 14,426 | — | 14,426 | |||||||||||||||
Reimbursable expenses | — | — | 32,907 | — | 32,907 | |||||||||||||||
Amortization of above market lease, net | — | — | 172 | — | 172 | |||||||||||||||
Acquisition-related expenses | 2,131 | — | — | — | 2,131 | |||||||||||||||
General and administrative | 2,755 | — | — | — | 2,755 | |||||||||||||||
4,901 | — | 114,964 | — | 119,865 | ||||||||||||||||
Operating income (loss) | (4,901 | ) | — | 105,426 | — | 100,525 | ||||||||||||||
Equity in earnings of subsidiaries | 104,163 | — | — | (104,163 | ) | — | ||||||||||||||
Non-operating income (expense) | ||||||||||||||||||||
Interest income | 1,278 | — | — | — | 1,278 | |||||||||||||||
Interest expense | (49,276 | ) | — | — | — | (49,276 | ) | |||||||||||||
Other non-operating expenses | (3,205 | ) | — | — | — | (3,205 | ) | |||||||||||||
(51,203 | ) | — | — | — | (51,203 | ) | ||||||||||||||
Income before income taxes | 48,059 | — | 105,426 | (104,163 | ) | 49,322 | ||||||||||||||
Provision for income taxes | — | — | (1,263 | ) | — | (1,263 | ) | |||||||||||||
Net income | $ | 48,059 | $ | — | $ | 104,163 | $ | (104,163 | ) | $ | 48,059 | |||||||||
Other comprehensive income | ||||||||||||||||||||
Net income | 48,059 | — | 104,163 | (104,163 | ) | 48,059 | ||||||||||||||
Unrealized gain on cash flow hedges, net | 6,281 | — | — | — | 6,281 | |||||||||||||||
Comprehensive income | $ | 54,340 | $ | — | $ | 104,163 | $ | (104,163 | ) | $ | 54,340 |
CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION | ||||||||||||||||||||
Six Months Ended June 30, 2018 | ||||||||||||||||||||
Operating | Guarantor | |||||||||||||||||||
Partnership | Co-Issuer | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
Rental revenue | $ | — | $ | — | $ | 373,126 | $ | — | $ | 373,126 | ||||||||||
Tenant reimbursements and other | — | — | 63,103 | — | 63,103 | |||||||||||||||
— | — | 436,229 | — | 436,229 | ||||||||||||||||
Expenses | ||||||||||||||||||||
Depreciation | 42 | — | 136,423 | — | 136,465 | |||||||||||||||
Property transactions, net | — | — | 18,512 | — | 18,512 | |||||||||||||||
Reimbursable expenses | — | — | 61,267 | — | 61,267 | |||||||||||||||
Amortization of above market lease, net | — | — | 343 | — | 343 | |||||||||||||||
Acquisition-related expenses | 2,672 | — | — | — | 2,672 | |||||||||||||||
General and administrative | 6,663 | — | — | — | 6,663 | |||||||||||||||
9,377 | — | 216,545 | — | 225,922 | ||||||||||||||||
Operating income (loss) | (9,377 | ) | — | 219,684 | — | 210,307 | ||||||||||||||
Equity in earnings of subsidiaries | 217,190 | — | — | (217,190 | ) | — | ||||||||||||||
Non-operating income (expense) | ||||||||||||||||||||
Interest income | 2,310 | — | — | — | 2,310 | |||||||||||||||
Interest expense | (98,506 | ) | — | — | — | (98,506 | ) | |||||||||||||
Other non-operating expenses | (5,389 | ) | — | — | — | (5,389 | ) | |||||||||||||
(101,585 | ) | — | — | — | (101,585 | ) | ||||||||||||||
Income before income taxes | 106,228 | — | 219,684 | (217,190 | ) | 108,722 | ||||||||||||||
Provision for income taxes | — | — | (2,494 | ) | — | (2,494 | ) | |||||||||||||
Net income | $ | 106,228 | $ | — | $ | 217,190 | $ | (217,190 | ) | $ | 106,228 | |||||||||
Other comprehensive income | ||||||||||||||||||||
Net income | 106,228 | — | 217,190 | (217,190 | ) | 106,228 | ||||||||||||||
Unrealized gain on cash flow hedges, net | 22,636 | — | — | — | 22,636 | |||||||||||||||
Comprehensive income | $ | 128,864 | $ | — | $ | 217,190 | $ | (217,190 | ) | $ | 128,864 |
CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION | ||||||||||||||||||||
Three Months Ended June 30, 2017 | ||||||||||||||||||||
Operating | Guarantor | |||||||||||||||||||
Partnership | Co-Issuer | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
Rental revenue | $ | — | $ | — | $ | 163,177 | $ | — | $ | 163,177 | ||||||||||
Tenant reimbursements and other | — | — | 21,279 | — | 21,279 | |||||||||||||||
— | — | 184,456 | — | 184,456 | ||||||||||||||||
Expenses | ||||||||||||||||||||
Depreciation | — | — | 60,227 | — | 60,227 | |||||||||||||||
Property transactions, net | — | — | 10,587 | — | 10,587 | |||||||||||||||
Reimbursable expenses | — | — | 20,642 | — | 20,642 | |||||||||||||||
Amortization of above market lease, net | — | — | 172 | — | 172 | |||||||||||||||
General and administrative | 2,661 | — | — | — | 2,661 | |||||||||||||||
2,661 | — | 91,628 | — | 94,289 | ||||||||||||||||
Operating income (loss) | (2,661 | ) | — | 92,828 | — | 90,167 | ||||||||||||||
Equity in earnings of subsidiaries | 91,651 | — | — | (91,651 | ) | — | ||||||||||||||
Non-operating income (expense) | ||||||||||||||||||||
Interest income | 881 | — | — | — | 881 | |||||||||||||||
Interest expense | (44,818 | ) | — | — | — | (44,818 | ) | |||||||||||||
Other non-operating expenses | (1,178 | ) | — | — | — | (1,178 | ) | |||||||||||||
(45,115 | ) | — | — | — | (45,115 | ) | ||||||||||||||
Income before income taxes | 43,875 | — | 92,828 | (91,651 | ) | 45,052 | ||||||||||||||
Provision for income taxes | — | — | (1,177 | ) | — | (1,177 | ) | |||||||||||||
Net income | $ | 43,875 | $ | — | $ | 91,651 | $ | (91,651 | ) | $ | 43,875 | |||||||||
Other comprehensive income | ||||||||||||||||||||
Net income | 43,875 | — | 91,651 | (91,651 | ) | 43,875 | ||||||||||||||
Unrealized loss on cash flow hedges, net | (4,112 | ) | — | — | — | (4,112 | ) | |||||||||||||
Comprehensive income | $ | 39,763 | $ | — | $ | 91,651 | $ | (91,651 | ) | $ | 39,763 |
CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION | ||||||||||||||||||||
Six Months Ended June 30, 2017 | ||||||||||||||||||||
Operating | Guarantor | |||||||||||||||||||
Partnership | Co-Issuer | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
Rental revenue | $ | — | $ | — | $ | 326,354 | $ | — | $ | 326,354 | ||||||||||
Tenant reimbursements and other | — | — | 42,001 | — | 42,001 | |||||||||||||||
— | — | 368,355 | — | 368,355 | ||||||||||||||||
Expenses | ||||||||||||||||||||
Depreciation | — | — | 121,911 | — | 121,911 | |||||||||||||||
Property transactions, net | — | — | 17,442 | — | 17,442 | |||||||||||||||
Reimbursable expenses | — | — | 41,129 | — | 41,129 | |||||||||||||||
Amortization of above market lease, net | — | — | 343 | — | 343 | |||||||||||||||
General and administrative | 5,341 | — | — | — | 5,341 | |||||||||||||||
5,341 | — | 180,825 | — | 186,166 | ||||||||||||||||
Operating income (loss) | (5,341 | ) | — | 187,530 | — | 182,189 | ||||||||||||||
Equity in earnings of subsidiaries | 185,115 | — | — | (185,115 | ) | — | ||||||||||||||
Non-operating income (expense) | ||||||||||||||||||||
Interest income | 1,559 | — | — | — | 1,559 | |||||||||||||||
Interest expense | (89,454 | ) | — | — | — | (89,454 | ) | |||||||||||||
Other non-operating expenses | (1,312 | ) | — | — | — | (1,312 | ) | |||||||||||||
(89,207 | ) | — | — | — | (89,207 | ) | ||||||||||||||
Income before income taxes | 90,567 | — | 187,530 | (185,115 | ) | 92,982 | ||||||||||||||
Provision for income taxes | — | — | (2,415 | ) | — | (2,415 | ) | |||||||||||||
Net income | $ | 90,567 | $ | — | $ | 185,115 | $ | (185,115 | ) | $ | 90,567 | |||||||||
Other comprehensive income | ||||||||||||||||||||
Net income | 90,567 | — | 185,115 | (185,115 | ) | 90,567 | ||||||||||||||
Unrealized loss on cash flow hedges, net | (4,746 | ) | — | — | — | (4,746 | ) | |||||||||||||
Comprehensive income | $ | 85,821 | $ | — | $ | 185,115 | $ | (185,115 | ) | $ | 85,821 |
CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION | ||||||||||||||||||||
Six Months Ended June 30, 2018 | ||||||||||||||||||||
Operating | Guarantor | |||||||||||||||||||
Partnership | Co-Issuer | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | (97,428 | ) | $ | — | $ | 381,761 | $ | — | $ | 284,333 | |||||||||
Cash flows from investing activities | ||||||||||||||||||||
Capital expenditures for property and equipment | (190 | ) | — | — | — | (190 | ) | |||||||||||||
Net cash used in investing activities | (190 | ) | — | — | — | (190 | ) | |||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Deferred financing costs | (17,490 | ) | — | — | — | (17,490 | ) | |||||||||||||
Repayment of debt | (13,000 | ) | — | — | — | (13,000 | ) | |||||||||||||
Distributions paid | (223,466 | ) | — | — | — | (223,466 | ) | |||||||||||||
Cash received by Parent on behalf of Guarantor Subsidiaries | 381,761 | — | (381,761 | ) | — | — | ||||||||||||||
Net cash provided by (used in) financing activities | 127,805 | — | (381,761 | ) | — | (253,956 | ) | |||||||||||||
Cash and cash equivalents | ||||||||||||||||||||
Net increase for the period | 30,187 | — | — | — | 30,187 | |||||||||||||||
Balance, beginning of period | 259,722 | — | — | — | 259,722 | |||||||||||||||
Balance, end of period | $ | 289,909 | $ | — | $ | — | $ | — | $ | 289,909 |
CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION | ||||||||||||||||||||
Six Months Ended June 30, 2017 | ||||||||||||||||||||
Operating | Guarantor | |||||||||||||||||||
Partnership | Co-Issuer | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | (97,207 | ) | $ | — | $ | 327,925 | $ | — | $ | 230,718 | |||||||||
Cash flows from investing activities | ||||||||||||||||||||
Capital expenditures for property and equipment | — | — | — | — | — | |||||||||||||||
Net cash used in investing activities | — | — | — | — | — | |||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Deferred financing costs | (1,024 | ) | — | — | — | (1,024 | ) | |||||||||||||
Repayment of debt principal | (25,125 | ) | — | — | — | (25,125 | ) | |||||||||||||
Distributions paid | (188,219 | ) | — | — | — | (188,219 | ) | |||||||||||||
Cash received by Parent on behalf of Guarantor Subsidiaries | 327,925 | — | (327,925 | ) | — | — | ||||||||||||||
Net cash provided by (used in) financing activities | 113,557 | — | (327,925 | ) | — | (214,368 | ) | |||||||||||||
Cash and cash equivalents | ||||||||||||||||||||
Net increase for the period | 16,350 | — | — | — | 16,350 | |||||||||||||||
Balance, beginning of period | 360,492 | — | — | — | 360,492 | |||||||||||||||
Balance, end of period | $ | 376,842 | $ | — | $ | — | $ | — | $ | 376,842 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands) | |||||||||||||||
Total revenues | $ | 220,390 | $ | 184,456 | $ | 436,229 | $ | 368,355 | |||||||
Operating income | 100,525 | 90,167 | 210,307 | 182,189 | |||||||||||
Net income | 48,059 | 43,875 | 106,228 | 90,567 | |||||||||||
Net income attributable to Class A shareholders | 13,146 | 10,680 | 28,976 | 22,028 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands) | |||||||||||||||
Net income | $ | 48,059 | $ | 43,875 | $ | 106,228 | $ | 90,567 | |||||||
Depreciation | 67,474 | 60,227 | 136,465 | 121,911 | |||||||||||
Property transactions, net | 14,426 | 10,587 | 18,512 | 17,442 | |||||||||||
Funds From Operations | 129,959 | 114,689 | 261,205 | 229,920 | |||||||||||
Amortization of financing costs and cash flow hedges | 3,216 | 3,702 | 6,325 | 6,508 | |||||||||||
Non-cash compensation expense | 556 | 362 | 940 | 550 | |||||||||||
Net effect of straight-line rent and amortization of deferred revenue | 5,103 | 1,611 | 6,799 | 699 | |||||||||||
Acquisition-related expenses | 2,131 | — | 2,672 | — | |||||||||||
Amortization of above market lease, net | 172 | 172 | 343 | 343 | |||||||||||
Other non-operating expenses | 3,205 | 1,178 | 5,389 | 1,312 | |||||||||||
Provision for income taxes | 1,263 | 1,177 | 2,494 | 2,415 | |||||||||||
Adjusted Funds From Operations | 145,605 | 122,891 | 286,167 | 241,747 | |||||||||||
Interest income | (1,278 | ) | (881 | ) | (2,310 | ) | (1,559 | ) | |||||||
Interest expense | 49,276 | 44,818 | 98,506 | 89,454 | |||||||||||
Amortization of financing costs and cash flow hedges | (3,216 | ) | (2,904 | ) | (6,325 | ) | (5,710 | ) | |||||||
Adjusted EBITDA | $ | 190,387 | $ | 163,924 | $ | 376,038 | $ | 323,932 |
Declaration Date | Record Date | Distribution/ Dividend Per Unit/ Share | Payment Date | Operating Partnership Distribution | MGP Class A Dividend | |||||||||||
(in thousands, except per unit and per share amount) | ||||||||||||||||
2018 | ||||||||||||||||
March 15, 2018 | March 30, 2018 | $ | 0.4200 | April 15, 2018 | $ | 111,733 | $ | 29,777 | ||||||||
June 15, 2018 | June 29, 2018 | $ | 0.4300 | July 16, 2018 | $ | 114,399 | $ | 30,492 | ||||||||
2017 | ||||||||||||||||
March 15, 2017 | March 31, 2017 | $ | 0.3875 | April 13, 2017 | $ | 94,109 | $ | 22,281 | ||||||||
June 15, 2017 | June 30, 2017 | $ | 0.3950 | July 14, 2017 | $ | 95,995 | $ | 22,777 |
Debt maturing in | Fair Value June 30, | |||||||||||||||||||||||||||||||
2018 | 2019 | 2020 | 2021 | 2022 | Thereafter | Total | 2018 | |||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
Fixed-rate | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,900.0 | $ | 1,900.0 | $ | 1,847.3 | ||||||||||||||||
Average interest rate | 5.122 | % | 5.122 | % | ||||||||||||||||||||||||||||
Variable rate | $ | 9.3 | $ | 21.9 | $ | 25.3 | $ | 25.3 | $ | 25.3 | $ | 1,971.5 | $ | 2,078.6 | $ | 2,066.4 | ||||||||||||||||
Average interest rate | 4.092 | % | 4.131 | % | 4.159 | % | 4.159 | % | 4.159 | % | 4.123 | % | 4.125 | % |
• | We are dependent on MGM (including its subsidiaries) unless and until we substantially diversify our portfolio, and an event that has a material adverse effect on MGM’s business, financial position or results of operations could have a material adverse effect on our business, financial position or results of operations. |
• | We depend on our properties leased to MGM for substantially all of our anticipated cash flows. |
• | We may not be able to re-lease our properties following the expiration or termination of the Master Lease. |
• | MGP's sole material assets are Operating Partnership units representing 26.7% of the ownership interests in the Operating Partnership, over which we have operating control through our ownership of its general partner. |
• | The Master Lease restricts our ability to sell our properties. |
• | We will have future capital needs and may not be able to obtain additional financing on acceptable terms. |
• | Covenants in our debt agreements may limit our operational flexibility, and a covenant breach or default could materially adversely affect our business, financial position or results of operations. |
• | Rising expenses could reduce cash flow and funds available for future acquisitions and distributions. |
• | We are dependent on the gaming industry and may be susceptible to the risks associated with it, which could materially adversely affect our business, financial position or results of operations. |
• | Because a significant number of our major gaming resorts are concentrated on the Las Vegas Strip (the “Strip”), we are subject to greater risks than a company that is more geographically diversified. |
• | Our pursuit of investments in, and acquisitions or development of, additional properties (including our acquisitions of the Rocksino, Empire City, the Empire City ROFO, or the remaining ROFO Property) may be unsuccessful or fail to meet our expectations. |
• | We may face extensive regulation from gaming and other regulatory authorities, and our operating agreement provides that any of our shares held by investors who are found to be unsuitable by state gaming regulatory authorities are subject to redemption. |
• | Required regulatory approvals can delay or prohibit future leases or transfers of our gaming properties, which could result in periods in which we are unable to receive rent for such properties. |
• | Net leases may not result in fair market lease rates over time, which could negatively impact our income and reduce the amount of funds available to make distributions to shareholders. |
• | Our dividend yield could be reduced if we were to sell any of our properties in the future. |
• | There can be no assurance that we will be able to make distributions to our Operating Partnership unitholders and Class A shareholders or maintain our anticipated level of distributions over time. |
• | An increase in market interest rates could increase our interest costs on existing and future debt and could adversely affect the price of our Class A shares. |
• | MGP is controlled by MGM, whose interests in our business may conflict with ours or yours. |
• | We are dependent on MGM for the provision of administration services to our operations and assets. |
• | MGM’s historical results may not be a reliable indicator of its future results. |
• | Our operating agreement contains provisions that reduce or eliminate duties (including fiduciary duties) of our directors, officers and others. |
• | If MGM engages in the same type of business we conduct, our ability to successfully operate and expand our business may be hampered. |
• | The Master Lease and other agreements governing our relationship with MGM were not negotiated on an arm’s-length basis and the terms of those agreements may be less favorable to us than they might otherwise have been in an arm’s-length transaction. |
• | In the event of a bankruptcy of the Tenant, a bankruptcy court may determine that the Master Lease is not a single lease but rather multiple severable leases, each of which can be assumed or rejected independently, in which case underperforming leases related to properties we own that are subject to the Master Lease could be rejected by the Tenant while tenant-favorable leases are allowed to remain in place. |
• | MGM may undergo a change of control without the consent of us or of our shareholders. |
• | If MGP fails to remain qualified to be taxed as a REIT, it will be subject to U.S. federal income tax as a regular corporation and could face a substantial tax liability, which would have an adverse effect on our business, financial condition and results of operations. |
• | Legislative or other actions affecting REITs could have a negative effect on us. |
• | The anticipated benefits of the Rocksino acquisition may not be realized fully and may take longer to realize than expected. |
• | Our ownership of the taxable REIT subsidiary (“TRS”), which we formed in connection with the Rocksino acquisition, will be subject to limitations, and a failure to comply with the limits could jeopardize our REIT qualification. |
101 | The following information from each of the MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 formatted in eXtensible Business Reporting Language: (i) Condensed Consolidated Balance Sheets at June 30, 2018 (unaudited) and December 31, 2017 (audited); (ii) Unaudited Condensed Consolidated Statements of Operations for the three and six-months ended June 30, 2018 and 2017; (iii) Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and six-months ended June 30, 2018 and 2017; (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the six-months ended June 30, 2018 and 2017; and (v) Condensed Notes to Unaudited Condensed Consolidated Financial Statements. | ||
* | Exhibits 32.1, 32.2, 32.3 and 32.4 shall not be deemed filed with the SEC, nor shall they be deemed incorporated by reference in any filing with the SEC under the Exchange Act or the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
| ||
† | Schedules and exhibits have been omitted pursuant to Item 601(b)(2)of Regulation S-K. The Company hereby undertakes to furnish supplementally copies of any of the omitted schedules and exhibits upon request by the U.S. Securities and Exchange Commission. |
MGM Growth Properties LLC | ||
Date: August 7, 2018 | By: | /s/ JAMES C. STEWART |
James C. Stewart | ||
Chief Executive Officer (Principal Executive Officer) | ||
Date: August 7, 2018 | /s/ ANDY H. CHIEN | |
Andy H. Chien | ||
Chief Financial Officer and Treasurer (Principal Financial Officer) |
MGM Growth Properties Operating Partnership LP | ||
By: MGM Growth Properties OP GP LLC, its general partner | ||
Date: August 7, 2018 | By: | /s/ JAMES C. STEWART |
James C. Stewart | ||
Chief Executive Officer (Principal Executive Officer) | ||
Date: August 7, 2018 | /s/ ANDY H. CHIEN | |
Andy H. Chien | ||
Chief Financial Officer and Treasurer (Principal Financial Officer) |
MGP OH, INC. | ||
By: | /s/ Andrew Hagopian III | |
Name: Andrew Hagopian III | ||
Title: Secretary | ||
MGM GROWTH OPERATING PARTNERSHIP LP | ||
By: | /s/ Andrew Hagopian III | |
Name: Andrew Hagopian III | ||
Title: Assistant Secretary | ||
MGP FINANCE CO-ISSUER | ||
By: | /s/ Andrew Hagopian III | |
Name: Andrew Hagopian III | ||
Title: Secretary | ||
MGP LESSOR HOLDINGS, LLC | ||
By: | /s/ Andrew Hagopian III | |
Name: Andrew Hagopian III | ||
Title: Secretary | ||
MGP LESSOR, LLC | ||
By: | /s/ Andrew Hagopian III | |
Name: Andrew Hagopian III | ||
Title: Secretary | ||
U.S. BANK NATIONAL ASSOCIATION | ||
as Trustee | ||
By: | /s/ Raymond S. Haverstock | |
Authorized Signatory |
1. | I have reviewed this quarterly report on Form 10-Q of MGM Growth Properties LLC; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: | |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): | |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ JAMES C. STEWART |
James C. Stewart |
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of MGM Growth Properties Operating Partnership LP; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: | |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; | |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): | |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ JAMES C. STEWART |
James C. Stewart |
Chief Executive Officer MGM Growth Properties OP GP LLC, the sole general partner of MGM Growth Properties Operating Partnership LP |
1. | I have reviewed this quarterly report on Form 10-Q of MGM Growth Properties LLC; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: | |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): | |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ ANDY H. CHIEN |
Andy H. Chien |
Chief Financial Officer and Treasurer |
1. | I have reviewed this quarterly report on Form 10-Q of MGM Growth Properties Operating Partnership LP; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: | |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; | |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): | |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ ANDY H. CHIEN |
Andy H. Chien |
Chief Financial Officer and Treasurer MGM Growth Properties OP GP LLC, the sole general partner of MGM Growth Properties Operating Partnership LP |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
/s/ JAMES C. STEWART |
James C. Stewart |
Chief Executive Officer |
August 7, 2018 |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
/s/ JAMES C. STEWART |
James C. Stewart |
Chief Executive Officer MGM Growth Properties OP GP LLC, the sole general partner of MGM Growth Properties Operating Partnership LP |
August 7, 2018 |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
/s/ ANDY H. CHIEN |
Andy H. Chien |
Chief Financial Officer and Treasurer |
August 7, 2018 |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
/s/ ANDY H. CHIEN |
Andy H. Chien |
Chief Financial Officer and Treasurer MGM Growth Properties OP GP LLC, the sole general partner of MGM Growth Properties Operating Partnership LP |
August 7, 2018 |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Aug. 03, 2018 |
|
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | MGP | |
Entity Registrant Name | MGM Growth Properties LLC | |
Entity Central Index Key | 0001656936 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
MGP Operating Partnership | ||
Document Information [Line Items] | ||
Entity Registrant Name | MGM Growth Properties Operating Partnership LP | |
Entity Central Index Key | 0001691299 | |
Entity Filer Category | Non-accelerated Filer | |
Class A Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 70,911,166 | |
Class B Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Shareholders’ equity | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 70,911,166 | 70,896,795 |
Common stock, shares outstanding (in shares) | 70,911,166 | 70,896,795 |
MGP Operating Partnership | ||
Partners' capital | ||
Partners' capital, units issued (in shares) | 266,045,289 | 266,030,918 |
Partners' capital, units outstanding (in shares) | 266,045,289 | 266,030,918 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Net income | $ 48,059 | $ 43,875 | $ 106,228 | $ 90,567 |
Other comprehensive income (loss) | ||||
Unrealized gain (loss) on cash flow hedges, net | 6,281 | (4,112) | 22,636 | (4,746) |
Other comprehensive income (loss) | 6,281 | (4,112) | 22,636 | (4,746) |
Comprehensive income | 54,340 | 39,763 | 128,864 | 85,821 |
Less: Comprehensive (income) attributable to noncontrolling interests | (39,519) | (30,058) | (93,855) | (64,918) |
Comprehensive income attributable to Class A shareholders | 14,821 | 9,705 | 35,009 | 20,903 |
MGP Operating Partnership | ||||
Net income | 48,059 | 43,875 | 106,228 | 90,567 |
Other comprehensive income (loss) | ||||
Unrealized gain (loss) on cash flow hedges, net | 6,281 | (4,112) | 22,636 | (4,746) |
Other comprehensive income (loss) | 22,636 | |||
Comprehensive income | $ 54,340 | $ 39,763 | $ 128,864 | $ 85,821 |
Business |
6 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | BUSINESS Organization. MGM Growth Properties LLC (“MGP” or the “Company”) is a limited liability company that was organized in Delaware on October 23, 2015. MGP conducts its operations through MGM Growth Properties Operating Partnership LP (the “Operating Partnership”), a Delaware limited partnership that was formed on January 6, 2016 and acquired by MGP on April 25, 2016. The Company has elected to be treated as a real estate investment trust ("REIT") commencing with its taxable year ended December 31, 2016. MGP is a publicly traded REIT engaged through its investment in the Operating Partnership in the real property business, which primarily consists of owning, acquiring and leasing large-scale destination entertainment and leisure resorts, whose tenants generally offer casino gaming, hotel, convention, dining, entertainment and retail. MGM Resorts International (“MGM” or the “Parent”) is a Delaware corporation that acts largely as a holding company and, through its subsidiaries, owns and operates large-scale destination entertainment and leisure resorts. Pursuant to a master lease agreement (the “Master Lease”), a subsidiary of the Operating Partnership (the “Landlord”) leases the real estate assets of The Mirage, Mandalay Bay, Luxor, New York-New York, Park MGM (which had previously been branded as Monte Carlo prior to May 2018), Excalibur, The Park, Gold Strike Tunica, MGM Grand Detroit, Beau Rivage, Borgata, and MGM National Harbor back to a subsidiary of MGM (the “Tenant”). As of June 30, 2018, there were 266,045,289 Operating Partnership units outstanding in the Operating Partnership of which MGM owned 195,134,123 or 73.3% and MGP owns the remaining 26.7%. MGM’s Operating Partnership units are exchangeable into Class A shares of MGP on a one-to-one basis, or cash at the fair value of a Class A share. The determination of settlement method is at the option of MGP’s independent conflicts committee. MGM’s indirect ownership of these Operating Partnership units is recognized as a noncontrolling interest in MGP’s financial statements. A wholly owned subsidiary of MGP is the general partner of the Operating Partnership and operates and controls all of its business affairs. As a result, MGP consolidates the Operating Partnership and its subsidiaries. MGM also has ownership of MGP’s outstanding 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 the operations of MGP or upon liquidation or winding up of MGP but which represents a majority of the voting power of MGP’s shares. As a result, MGP continues to be controlled by MGM through its majority voting rights, and is consolidated by MGM. On May 28, 2018, the Company entered into an agreement to acquire the real property associated with the Empire City Casino's race track and casino (“Empire City”) from MGM upon its acquisition of Empire City for total consideration of $625 million, which will include the assumption of approximately $245 million of debt by the Operating Partnership with the balance through the issuance of operating partnership units to MGM. Empire City will be added to the existing Master Lease between MGM and MGP. As a result, the annual rent payment to MGP will increase by $50 million. Consistent with the Master Lease terms, 90% of this rent will be fixed and contractually grow at 2% per year until 2022. In addition, pursuant to the Master Lease, MGP will have a right of first offer with respect to certain undeveloped land adjacent to the property to the extent MGM develops additional gaming facilities and chooses to sell or transfer the property in the future. The transactions are expected to close in the first quarter of 2019, subject to regulatory approvals and other customary closing conditions. On April 4, 2018, the Company entered into an agreement with Milstein Entertainment LLC to acquire the membership interests of Northfield Park Associates, LLC, an Ohio limited liability company that owns the real estate assets and operations of the Hard Rock Northfield Park ("Rocksino") for approximately $1.06 billion and on July 6, 2018, one of the Company's taxable REIT subsidiaries (“TRS”) completed the acquisition of the Rocksino. The Company funded the acquisition through a $200 million draw on the delayed draw Term Loan A and a $655 million draw under the revolving credit facility, with the remainder of the purchase price paid with cash on hand. Simultaneously with the close, the Company entered into a new agreement with Hard Rock to continue to serve as the manager of the property. The TRS was formed to engage in activities resulting in income that is not qualifying income for the REIT and will accordingly pay U.S. federal, state and local income tax at regular corporate rates on its taxable income. |
Summary of Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. All adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. Certain reclassifications have been made to conform the prior period presentation. Property tax expense was separately classified in prior periods and is now classified within “reimbursable expenses” in the accompanying condensed consolidated statements of operations. The accompanying condensed consolidated financial statements and related notes should be read in conjunction with the audited financial statements and notes thereto included in the Company's most recent Annual Report on Form 10-K. Variable Interest Entities. The condensed consolidated financial statements of MGP include the accounts of the Operating Partnership, a VIE of which the Company is the primary beneficiary, as well as its wholly owned and majority-owned subsidiaries. MGP’s maximum exposure to loss is the carrying value of the assets and liabilities of the Operating Partnership, which represents all of MGP’s assets and liabilities. As MGP holds what is deemed a majority voting interest in the Operating Partnership through its ownership of the Operating Partnership’s sole general partner, it qualifies for the exemption from providing certain of the required disclosures associated with investments in VIEs. The condensed consolidated financial statements of the Operating Partnership include the accounts of its wholly owned subsidiary, the Landlord, which owns the real estate, a VIE of which the Operating Partnership is the primary beneficiary. As of June 30, 2018, on a consolidated basis the Landlord had total assets of $9.9 billion primarily related to its real estate assets, and total liabilities of $227 million primarily related to its deferred revenue and above market lease liability. Noncontrolling interest. The Company presents noncontrolling interest and classifies such interest as a component of consolidated shareholders’ equity, separate from the Company’s Class A shareholders’ equity. Noncontrolling interest in the Company represents Operating Partnership units currently held by subsidiaries of MGM. Net income or loss of the Operating Partnership is allocated to its noncontrolling interest based on the noncontrolling interest’s ownership percentage in the Operating Partnership except for income tax expenses. Ownership percentage is calculated by dividing the number of Operating Partnership units held by the noncontrolling interest by the total Operating Partnership units held by the noncontrolling interest and the Company. Issuance of additional Class A shares and Operating Partnership units changes the ownership interests of both the noncontrolling interest and the Company. Such transactions and the related proceeds are treated as capital transactions. MGM may tender its Operating Partnership units for redemption by the Operating Partnership in exchange for cash equal to the market price of MGP’s Class A shares at the time of redemption or for unregistered Class A shares on a one-for-one basis. Such selection to pay cash or issue Class A shares to satisfy an Operating Partnership unitholder’s redemption request is solely within the control of MGP’s independent conflicts committee. Real estate investments. Real estate investments consist of land, buildings, improvements and integral equipment. The contribution or acquisition of the real property by the Operating Partnership from MGM represent transactions between entities under common control, and as a result, such real estate was initially recorded by the Company at MGM’s historical cost basis, less accumulated depreciation (i.e., there was no change in the basis of the contributed assets), as of the contribution or acquisition dates. Costs of maintenance and repairs to real estate investments are the responsibility of the Tenant under the Master Lease. Although the Tenant is responsible for all capital expenditures during the term of the Master Lease, if, in the future, a deconsolidation event occurs, the Company will be required to pay the Tenant, should the Tenant so elect, for certain capital improvements that would not constitute “normal tenant improvements” in accordance with U.S. GAAP (“Non-Normal Tenant Improvements”), subject to an initial cap of $100 million in the first year of the Master Lease increasing annually by $75 million each year thereafter. The Company will be entitled to receive additional rent based on the 10-year Treasury yield plus 600 basis points multiplied by the value of the new capital improvements the Company is required to pay for in connection with a deconsolidation event and such capital improvements will be subject to the terms of the Master Lease. Examples of Non-Normal Tenant Improvements include the costs of structural elements at the properties, including capital improvements that expand the footprint or square footage of any of the properties or extend the useful life of the properties, as well as equipment that would be a necessary improvement at any of the properties, including initial installation of elevators, air conditioning systems or electrical wiring. Such Non-Normal Tenant Improvements are capitalized and depreciated over the asset’s remaining life. Inception-to-date Non-Normal Tenant Improvements were $138.9 million through June 30, 2018. Deferred revenue. The Company receives nonmonetary consideration related to Non-Normal Tenant Improvements as they become MGP’s property pursuant to the Master Lease, and recognizes the cost basis of Non-Normal Tenant Improvements as real estate investments and deferred revenue. The Company depreciates the real estate investments over their estimated useful lives and amortizes the deferred revenue as additional rental revenue over the remaining term of the Master Lease once the related real estate assets are placed in service. Income tax provision. For interim income tax reporting the Company estimates its annual effective tax rate and applies it to its year-to-date ordinary income. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur. The Company’s effective income tax rate was 2.6% and 2.3% for the three and six months ended June 30, 2018, respectively. The provision for current taxes and the deferred tax liability in the accompanying financial statements are attributable to noncontrolling interest since the payment of such taxes are the responsibility of MGM. Recently issued accounting standards. In August 2017, the FASB issued Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years. ASU 2017-12 amends the hedge accounting recognition and presentation requirements in order to improve the transparency and understandability of information about an entity’s risk management activities, and simplifies the application of hedge accounting. The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and footnote disclosures. In 2016 and 2018, the FASB issued ASC 842 “Leases (Topic 842),” which replaces the existing guidance in ASC 840, “Leases.” ASC 842 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. ASC 842 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use (“ROU”) asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the ROU asset and for operating leases the lessee would recognize a straight-line total lease expense. The Company is currently assessing the impact the adoption of ASC 842 will have on its consolidated financial statements and footnote disclosures. In May 2014, the FASB issued ASC 606, Revenue from Contracts with Customers (Topic 606) which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods and services. The Company adopted ASC 606 on January 1, 2018 and it did not have a material impact on the Company’s financial statements and footnote disclosures. |
Real Estate Investments |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REAL ESTATE INVESTMENTS | REAL ESTATE INVESTMENTS The carrying value of real estate investments is as follows:
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Master Lease |
6 Months Ended |
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Jun. 30, 2018 | |
Leases [Abstract] | |
MASTER LEASE | MASTER LEASE Pursuant to the Master Lease, the Tenant has leased the Company’s real estate properties (other than the real estate associated with the TRS). The Master Lease is accounted for as an operating lease and has an initial lease term of ten years with the potential to extend the term for four additional five-year terms thereafter at the option of the Tenant. On April 1, 2018, the second 2.0% fixed annual rent escalator went into effect. Rent payments under the Master Lease for the third lease year of April 1, 2018 through March 31, 2019 are $770.3 million. Rental revenues from the Master Lease for the three and six months ended June 30, 2018 were $186.6 million and $373.1 million, respectively. The Company also recognized revenue related to tenant reimbursements and other of $33.8 million and $63.1 million for the three and six months ended June 30, 2018, respectively. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Debt consists of the following:
Operating Partnership credit agreement. At June 30, 2018, the Operating Partnership senior credit facility consisted of a $470 million term loan A facility, a $1.8 billion term loan B facility, and a $1.4 billion revolving credit facility. On March 23, 2018, the Operating Partnership repriced its term loan B interest rate to LIBOR plus 2.00% and extended the maturity of the term loan B facility to March 2025, effective June 14, 2018. In addition, the Operating Partnership will receive a further reduction in pricing to LIBOR plus 1.75% upon a corporate rating upgrade by either S&P or Moody's. On June 14, 2018, the Operating Partnership amended its credit agreement to provide for a $750 million increase of the revolving facility to $1.35 billion, provide for a new $200 million delayed draw on the term loan A facility (which was drawn in full, subsequent to June 30, 2018, in connection with the Rocksino closing), and extend the maturity of the revolving facility and the term loan A facility to June 2023. Additionally, the revolving and term loan A facilities were repriced to LIBOR plus 1.75% to 2.25% determined by reference to the total net leverage ratio pricing grid. In addition, amortization payments under the term loan A facility’s will start on the last business day of each calendar quarter beginning September 30, 2019, for an amount equal to 0.625% of the aggregate principal amount of the term loan A outstanding as of the amendment effective date. The Operating Partnership permanently repaid $5 million and $13 million of the term loan A and term loan B facility in the three and six months ended June 30, 2018, respectively, in accordance with the scheduled amortization. At June 30, 2018, the interest rate on the term loan A facility was 4.34% and the interest rate on the term loan B facility was 4.09%. At June 30, 2018, no amounts were drawn on the revolving credit facility or on the delayed draw on the term loan A facility. The Operating Partnership was in compliance with its financial covenants at June 30, 2018. See Note 6 for further discussion of the Company's interest rate swap agreements related to the term loan B facility. Fair value of long-term debt. The estimated fair value of the Company’s long-term debt was $3.9 billion and $4.1 billion at June 30, 2018 and December 31, 2017, respectively. Fair value was estimated using quoted prices for identical or similar liabilities in markets that are not active (level 2 inputs). Deferred financing costs. The Company recognized non-cash interest expense related to the amortization of deferred financing costs of $3.1 million and $6.1 million and during the three and six months ended June 30, 2018, respectively. The Company recognized non-cash interest expense related to the amortization of deferred financing costs of $2.8 million and $5.6 million and during the three and six months ended June 30, 2017, respectively. |
Derivatives and Hedging Activities |
6 Months Ended |
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Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITIES | DERIVATIVES AND HEDGING ACTIVITIES The Company uses derivative instruments to mitigate the effects of interest rate volatility inherent in its variable rate debt, which could unfavorably impact our future earnings and forecasted cash flows. The Company does not use derivative instruments for speculative or trading purposes. The Operating Partnership is party to interest rate swaps to mitigate the interest rate risk inherent in its senior secured term loan B facility. In May 2017 in connection with the term loan B re-pricing, the Company amended its outstanding interest rate swap agreements. As of June 30, 2018 and December 31, 2017, the Company pays a weighted average fixed rate of 1.844% on total notional amount of $1.2 billion and the variable rate received will reset monthly to the one-month LIBOR, with no minimum floor. As of June 30, 2018 and December 31, 2017, all of the Company's derivative financial instruments have been designated as cash flow hedges and qualify for hedge accounting. The fair values of the Company's interest rate swaps are $33.7 million and $11.3 million as of June 30, 2018 and December 31, 2017, respectively, based upon the present value of expected future cash flows using observable, quoted LIBOR swap rates for the full term of the swap (level 2 inputs). Interest rate swaps valued in net unrealized gain positions are recognized as asset balances within the prepaid expenses and other assets. Interest rate swaps valued in net unrealized loss positions are recognized as liability balances within accounts payable, accrued expenses and other liabilities. For the three and six months ended June 30, 2018, the amount recorded in other comprehensive income related to the derivative instruments was a net unrealized gain of $6.3 million and a net unrealized gain of $22.6 million, respectively. For the three and six months ended June 30, 2017, the amount recorded in other comprehensive income related to the derivative instruments was a net unrealized loss of $4.1 million and $4.7 million, respectively. There was no material ineffective portion of the change in fair value derivatives. For the three and six months ended June 30, 2018, the Company recorded an offset to interest expense of $0.1 million and interest expense of $0.8 million, respectively, related to the swap agreements. For the three and six months ended June 30, 2017, the Company recorded interest expense of $2.6 million and $5.3 million, respectively, related to the swap agreements. |
Shareholders' Equity and Partners' Capital |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY AND PARTNERS' CAPITAL | SHAREHOLDERS’ EQUITY AND PARTNERS' CAPITAL MGP dividends and Operating Partnership distributions. The following table presents the distributions declared and paid by the Operating Partnership and the dividends declared and paid by MGP for the six months ended June 30, 2018 and June 30, 2017. MGP pays its dividends with the receipt of its share of the Operating Partnership's distributions.
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 six months ended June 30, 2018:
The following table presents the Operating Partnership's changes in partners' capital for the six months ended June 30, 2018:
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Accumulated Other Comprehensive Income |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME Comprehensive income includes net income and all other non-shareholder changes in equity, or other comprehensive income. The following table summarizes the changes in accumulated other comprehensive income by component for the six months ended June 30, 2018:
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Net Income Per Class A Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER CLASS A SHARE | NET INCOME PER CLASS A SHARE The table below provides basic net income and per Class A share, which utilizes the weighted-average number of Class A shares outstanding without regard to dilutive potential Class A shares, and “diluted” net income per share, which includes all such shares. Net income attributable to Class A shares, weighted average Class A shares outstanding and the effect of dilutive securities outstanding are presented for the six months ended June 30, 2018 and June 30, 2017. Net income per share has not been presented for the Class B shareholder as the Class B share is not entitled to any economic rights.
(1) Includes weighted average deferred share units granted to certain members of the board of directors. (2) No shares related to outstanding share-based compensation awards were excluded due to being antidilutive. (3) Diluted net income per Class A share does not assume conversion of the Operating Partnership units held by MGM as such conversion would be antidilutive. NET INCOME PER OPERATING PARTNERSHIP UNIT The table below provides basic net income per Operating Partnership unit, which utilizes the weighted-average number of Operating Partnership units outstanding without regard to dilutive potential Operating Partnership units, and “diluted” net income per Operating Partnership units, which includes all such Operating Partnership units. Net income attributable to Operating Partnership units, weighted average Operating Partnership units outstanding and the effect of dilutive securities outstanding are presented for the three and six months ended June 30, 2018 and June 30, 2017.
(1) Includes weighted average deferred share units granted to certain members of the Board of Directors. (2) No shares related to outstanding share-based compensation awards were excluded due to being antidilutive. |
Net Income Per Operating Partnership Unit |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER OPERATING PARTNERSHIP UNIT | NET INCOME PER CLASS A SHARE The table below provides basic net income and per Class A share, which utilizes the weighted-average number of Class A shares outstanding without regard to dilutive potential Class A shares, and “diluted” net income per share, which includes all such shares. Net income attributable to Class A shares, weighted average Class A shares outstanding and the effect of dilutive securities outstanding are presented for the six months ended June 30, 2018 and June 30, 2017. Net income per share has not been presented for the Class B shareholder as the Class B share is not entitled to any economic rights.
(1) Includes weighted average deferred share units granted to certain members of the board of directors. (2) No shares related to outstanding share-based compensation awards were excluded due to being antidilutive. (3) Diluted net income per Class A share does not assume conversion of the Operating Partnership units held by MGM as such conversion would be antidilutive. NET INCOME PER OPERATING PARTNERSHIP UNIT The table below provides basic net income per Operating Partnership unit, which utilizes the weighted-average number of Operating Partnership units outstanding without regard to dilutive potential Operating Partnership units, and “diluted” net income per Operating Partnership units, which includes all such Operating Partnership units. Net income attributable to Operating Partnership units, weighted average Operating Partnership units outstanding and the effect of dilutive securities outstanding are presented for the three and six months ended June 30, 2018 and June 30, 2017.
(1) Includes weighted average deferred share units granted to certain members of the Board of Directors. (2) No shares related to outstanding share-based compensation awards were excluded due to being antidilutive. |
Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation. In the ordinary course of business, from time to time, the Company expects to be subject to legal claims and administrative proceedings, none of which are currently outstanding, which the Company believes could have, individually or in the aggregate, a material adverse effect on its business, financial condition or results of operations, liquidity or cash flows. |
Condensed Consolidating Financial Information |
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | CONDENSED CONSOLIDATING FINANCIAL INFORMATION The Operating Partnership’s senior notes were co-issued by MGP Finance Co-Issuer, Inc., a 100% owned finance subsidiary of the Operating Partnership. Obligations to pay principal and interest on the senior notes are currently guaranteed by all of the Operating Partnership’s subsidiaries, other than MGP Finance Co-Issuer, Inc., each of which is directly or indirectly 100% owned by the Operating Partnership. Such guarantees are full and unconditional, and joint and several and are subject to release in accordance with the events described below. Separate condensed financial information for the subsidiary guarantors as of June 30, 2018 and December 31, 2017 and for the six months ended June 30, 2018 and June 30, 2017 are presented below. The guarantee of a subsidiary guarantor will be automatically released upon (i) a sale or other disposition (including by way of consolidation or merger) of the subsidiary guarantor, or the capital stock of the subsidiary guarantor; (ii) the sale or disposition of all or substantially all of the assets of the subsidiary guarantor; (iii) the designation in accordance with the indenture of a subsidiary guarantor as an unrestricted subsidiary; (iv) at such time as such subsidiary guarantor is no longer a subsidiary guarantor or other obligor with respect to any credit facilities or capital markets indebtedness of the Operating Partnership; or (v) defeasance or discharge of the notes.
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Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. All adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. Certain reclassifications have been made to conform the prior period presentation. Property tax expense was separately classified in prior periods and is now classified within “reimbursable expenses” in the accompanying condensed consolidated statements of operations. |
Variable Interest Entities | Variable Interest Entities. The condensed consolidated financial statements of MGP include the accounts of the Operating Partnership, a VIE of which the Company is the primary beneficiary, as well as its wholly owned and majority-owned subsidiaries. MGP’s maximum exposure to loss is the carrying value of the assets and liabilities of the Operating Partnership, which represents all of MGP’s assets and liabilities. As MGP holds what is deemed a majority voting interest in the Operating Partnership through its ownership of the Operating Partnership’s sole general partner, it qualifies for the exemption from providing certain of the required disclosures associated with investments in VIEs. The condensed consolidated financial statements of the Operating Partnership include the accounts of its wholly owned subsidiary, the Landlord, which owns the real estate, a VIE of which the Operating Partnership is the primary beneficiary. |
Noncontrolling interest | Noncontrolling interest. The Company presents noncontrolling interest and classifies such interest as a component of consolidated shareholders’ equity, separate from the Company’s Class A shareholders’ equity. Noncontrolling interest in the Company represents Operating Partnership units currently held by subsidiaries of MGM. Net income or loss of the Operating Partnership is allocated to its noncontrolling interest based on the noncontrolling interest’s ownership percentage in the Operating Partnership except for income tax expenses. Ownership percentage is calculated by dividing the number of Operating Partnership units held by the noncontrolling interest by the total Operating Partnership units held by the noncontrolling interest and the Company. Issuance of additional Class A shares and Operating Partnership units changes the ownership interests of both the noncontrolling interest and the Company. Such transactions and the related proceeds are treated as capital transactions. MGM may tender its Operating Partnership units for redemption by the Operating Partnership in exchange for cash equal to the market price of MGP’s Class A shares at the time of redemption or for unregistered Class A shares on a one-for-one basis. Such selection to pay cash or issue Class A shares to satisfy an Operating Partnership unitholder’s redemption request is solely within the control of MGP’s independent conflicts committee. |
Real estate investments | Real estate investments. Real estate investments consist of land, buildings, improvements and integral equipment. The contribution or acquisition of the real property by the Operating Partnership from MGM represent transactions between entities under common control, and as a result, such real estate was initially recorded by the Company at MGM’s historical cost basis, less accumulated depreciation (i.e., there was no change in the basis of the contributed assets), as of the contribution or acquisition dates. Costs of maintenance and repairs to real estate investments are the responsibility of the Tenant under the Master Lease. |
Deferred revenue | Deferred revenue. The Company receives nonmonetary consideration related to Non-Normal Tenant Improvements as they become MGP’s property pursuant to the Master Lease, and recognizes the cost basis of Non-Normal Tenant Improvements as real estate investments and deferred revenue. The Company depreciates the real estate investments over their estimated useful lives and amortizes the deferred revenue as additional rental revenue over the remaining term of the Master Lease once the related real estate assets are placed in service. |
Income tax provision | Income tax provision. For interim income tax reporting the Company estimates its annual effective tax rate and applies it to its year-to-date ordinary income. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur. |
Recently issued accounting standards | Recently issued accounting standards. In August 2017, the FASB issued Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years. ASU 2017-12 amends the hedge accounting recognition and presentation requirements in order to improve the transparency and understandability of information about an entity’s risk management activities, and simplifies the application of hedge accounting. The Company is currently assessing the impact that adoption of this guidance will have on its consolidated financial statements and footnote disclosures. In 2016 and 2018, the FASB issued ASC 842 “Leases (Topic 842),” which replaces the existing guidance in ASC 840, “Leases.” ASC 842 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. ASC 842 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use (“ROU”) asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the ROU asset and for operating leases the lessee would recognize a straight-line total lease expense. The Company is currently assessing the impact the adoption of ASC 842 will have on its consolidated financial statements and footnote disclosures. In May 2014, the FASB issued ASC 606, Revenue from Contracts with Customers (Topic 606) which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods and services. The Company adopted ASC 606 on January 1, 2018 and it did not have a material impact on the Company’s financial statements and footnote disclosures. |
Real Estate Investments (Tables) |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value of Real Estate Investments | The carrying value of real estate investments is as follows:
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Debt (Tables) |
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Debt | Debt consists of the following:
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Shareholders' Equity and Partners' Capital (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions and Dividends Declared and Paid | The following table presents the distributions declared and paid by the Operating Partnership and the dividends declared and paid by MGP for the six months ended June 30, 2018 and June 30, 2017. MGP pays its dividends with the receipt of its share of the Operating Partnership's distributions.
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Changes in Shareholders' Equity | The following table presents MGP's changes in shareholders' equity for the six months ended June 30, 2018:
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Changes in Partners' Capital | The following table presents the Operating Partnership's changes in partners' capital for the six months ended June 30, 2018:
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Accumulated Other Comprehensive Income (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income | The following table summarizes the changes in accumulated other comprehensive income by component for the six months ended June 30, 2018:
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Net Income Per Class A Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income and Number of Class A Shares Used in the Calculation of Basic and Diluted Income Per Share |
(1) Includes weighted average deferred share units granted to certain members of the board of directors. (2) No shares related to outstanding share-based compensation awards were excluded due to being antidilutive. (3) Diluted net income per Class A share does not assume conversion of the Operating Partnership units held by MGM as such conversion would be antidilutive.
(1) Includes weighted average deferred share units granted to certain members of the Board of Directors. (2) No shares related to outstanding share-based compensation awards were excluded due to being antidilutive. |
Net Income Per Operating Partnership Unit (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income and Number of Operating Partnership Units Used in the Calculation of Basic and Diluted Income Per Share |
(1) Includes weighted average deferred share units granted to certain members of the board of directors. (2) No shares related to outstanding share-based compensation awards were excluded due to being antidilutive. (3) Diluted net income per Class A share does not assume conversion of the Operating Partnership units held by MGM as such conversion would be antidilutive.
(1) Includes weighted average deferred share units granted to certain members of the Board of Directors. (2) No shares related to outstanding share-based compensation awards were excluded due to being antidilutive. |
Condensed Consolidating Financial Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidating Balance Sheet Information |
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Consolidating Statement of Operations and Comprehensive Income Information |
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Consolidating Statement of Cash Flows Information |
|
Summary of Significant Accounting Policies (Details) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
|
Summary Of Significant Accounting Policies [Line Items] | ||
Treasury yield term | 10 years | |
Percentage points used in calculation for additional rent | 6.00% | |
Non-normal tenant improvements | $ 138,900,000 | $ 138,900,000 |
Effective tax rate | 2.60% | 2.30% |
Tenant | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Initial cap of non-normal tenant improvements in the first year | $ 100,000,000 | |
Annual increase in non-normal tenant improvements | 75,000,000 | |
MGP Operating Partnership | Variable Interest Entity | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Maximum exposure to loss, assets | $ 9,900,000,000 | 9,900,000,000 |
Maximum exposure to loss, liabilities | $ 227,000,000 | $ 227,000,000 |
Real Estate Investments (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Real Estate Properties [Line Items] | ||
Real estate investments, gross | $ 12,584,298 | $ 12,655,847 |
Less: Accumulated depreciation | (2,703,640) | (2,633,909) |
Real estate investments, net | 9,880,658 | 10,021,938 |
Land | ||
Real Estate Properties [Line Items] | ||
Real estate investments, gross | 4,143,513 | 4,143,513 |
Buildings, building improvements, land improvements and integral equipment | ||
Real Estate Properties [Line Items] | ||
Real estate investments, gross | $ 8,440,785 | $ 8,512,334 |
Master Lease (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
term
|
Jun. 30, 2017
USD ($)
|
Apr. 01, 2018
USD ($)
|
|
Leases [Line Items] | |||||
Number of lease extension options | term | 4 | ||||
Revenues | $ 220,390 | $ 184,456 | $ 436,229 | $ 368,355 | |
Rental Properties | |||||
Leases [Line Items] | |||||
Revenues | 186,563 | 163,177 | 373,126 | 326,354 | |
Tenant Reimbursements | |||||
Leases [Line Items] | |||||
Revenues | $ 33,827 | $ 21,279 | $ 63,103 | $ 42,001 | |
Master Lease | |||||
Leases [Line Items] | |||||
Initial lease term | 10 years | 10 years | |||
Lease extension term | 5 years | 5 years | |||
Master Lease Base Rent | |||||
Leases [Line Items] | |||||
Fixed annual rent escalator | 2.00% | ||||
Rent payments due under master lease | $ 770,300 |
Derivatives and Hedging Activities (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Derivative [Line Items] | |||||
Net gain (loss) related to derivative instrument | $ 6,281,000 | $ (4,112,000) | $ 22,636,000 | $ (4,746,000) | |
Ineffective portion of the change in fair value derivatives | $ 0 | ||||
Interest Rate Swaps | |||||
Derivative [Line Items] | |||||
Weighted average fixed rate | 1.844% | 1.844% | |||
Notional amount | $ 1,200,000,000 | $ 1,200,000,000 | |||
Interest expense | (100,000) | $ 2,600,000 | 800,000 | $ 5,300,000 | |
Designated as Hedging Instrument | Interest Rate Swaps | |||||
Derivative [Line Items] | |||||
Fair value of derivative instruments | $ 33,700,000 | $ 33,700,000 | $ 11,300,000 |
Shareholders' Equity and Partners' Capital - Distributions and Dividends Declared and Paid (Details) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | ||||
---|---|---|---|---|---|
Jul. 16, 2018 |
Apr. 15, 2018 |
Jul. 14, 2017 |
Apr. 13, 2017 |
Jun. 30, 2018 |
|
Class of Stock [Line Items] | |||||
MGP Class A Dividend | $ 226,133 | ||||
Class A Shares | |||||
Class of Stock [Line Items] | |||||
Dividend Per Share (in dollars per share) | $ 420.00 | $ 395.000 | $ 387.5000 | ||
MGP Class A Dividend | $ 29,777 | $ 22,777 | $ 22,281 | ||
Class A Shares | Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Dividend Per Share (in dollars per share) | $ 430.00 | ||||
MGP Class A Dividend | $ 30,492 | ||||
MGP Operating Partnership | |||||
Class of Stock [Line Items] | |||||
Distribution Per Unit (in dollars per share) | $ 420.00 | $ 395.0000 | $ 387.5000 | ||
Operating Partnership Distribution | $ 111,733 | $ 95,995 | $ 94,109 | ||
MGP Operating Partnership | Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Distribution Per Unit (in dollars per share) | $ 430.00 | ||||
Operating Partnership Distribution | $ 114,399 |
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