Acquisitions and dispositions

6 Months Ended

Jun. 30, 2019

ACQUISITIONS AND DISPOSITIONS

Empire City Acquisition

As discussed in Note 1, on January 29, 2019, the Company acquired the developed real property associated with Empire City from MGM for fair value consideration of approximately $634.4 million. The Company funded the acquisition of the developed real property from MGM through the assumption of approximately $246.0 million of indebtedness, which was repaid with borrowings under its senior secured credit facility, and the issuance of approximately 12.9 million Operating Partnership units to MGM. Empire City was added to the existing Master Lease between the Landlord and Tenant, as further discussed in Note 5.

The Empire City Transaction was accounted for as a transaction between entities under common control and, therefore, the Company recorded the Empire City real estate assets at the carryover value of $625.0 million from MGM with the difference between the purchase price and carrying value of assets recorded, which was approximately $9.4 million, recorded as a reduction to additional paid-in-capital.

Northfield Acquisition and Northfield OpCo Transaction

On July 6, 2018 the TRS completed its acquisition of 100% of the membership interests of Northfield for a purchase price of approximately $1.1 billion. The Company recognized 100% of the assets and liabilities of Northfield at fair value at the date of the acquisition.

On April 1, 2019, the Company’s TRS liquidated. Concurrently, a subsidiary of MGM acquired Northfield OpCo for fair value consideration transferred of approximately $305.2 million consisting primarily of approximately 9.4 million Operating Partnership units that were ultimately redeemed by the Operating Partnership and the Company retained the real estate assets. Subsequently, MGM rebranded Northfield OpCo to MGM Northfield Park, which was then added to the existing Master Lease between the Landlord and Tenant. Refer to Note 5 for further discussion on the Master Lease.

The Northfield OpCo Transaction was accounted for as a transaction between entities under common control and, therefore, the Company had carried the Northfield OpCo operating assets and liabilities as held and used until the close of the transaction on April 1, 2019. As a transaction between entities under common control, the Company recorded the difference between the purchase price of $305.2 million and the carrying value of net assets transferred of $292.3 million to additional paid-in-capital.

The Company’s results for Northfield OpCo for the six months ended June 30, 2019 are reflected in discontinued operations on the consolidated statement of operations and the related assets and liabilities have been reclassified as assets held for sale and liabilities related to assets held for sale on the consolidated balance sheet on a retrospective basis. The retained MGM Northfield Park real estate assets have been retrospectively reclassified into real estate investments, net. The major classes of assets and liabilities of the Northfield OpCo presented as assets and liabilities related to assets held for sale as of December 31, 2018 were as follows:



	December 31, 2018
Assets held for sale	(in thousands)
Property and equipment, used in operations, net	$	20,391
Cash and cash equivalents	55,822
Tenant and other receivables, net	7,322
Prepaid expenses and other assets	3,024
Goodwill	17,915
Other intangible assets, net	251,214
Assets held for sale	$	355,688

Liabilities related to assets held for sale
Due to MGM Resorts International and affiliates	$	80
Accounts payable, accrued expenses and other liabilities	28,806
Deferred revenue	51
Liabilities related to assets held for sale	$	28,937

The results of the Northfield OpCo discontinued operations are summarized as follows:



	Six Months Ended June 30,
	2019
	(in thousands)
Total revenues	$	67,841
Total expenses	(48,735		)
Income from discontinued operations before income taxes	19,106
Provision for income taxes	(2,890		)
Income from discontinued operations, net of tax	16,216
Less: Income attributable to noncontrolling interests - discontinued operations	(11,434		)
Income from discontinued operations attributable to Class A shareholders	$	4,782

As Northfield OpCo was not acquired until July 6, 2018, there are no results of Northfield OpCo discontinued operations included in the three and six months ended June 30, 2018.