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[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE (MGM Growth Properties LLC)
DELAWARE (MGM Growth Properties Operating Partnership LP)
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47-5513237
81-1162318
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(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification Number) |
Registrant
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Title of each class
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Name of each exchange
on which registered |
MGM Growth Properties LLC
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Class A Shares, No Par Value
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New York Stock Exchange
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Large accelerated filer
X
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth ___
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
X
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Smaller reporting company
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Emerging growth ___
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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;
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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
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creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
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TABLE OF CONTENTS
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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ITEM 1
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BUSINESS
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Location
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Hotel
Rooms
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Approximate
Acres
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Approximate
Casino
Square
Footage
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Approximate
Convention
Square
Footage
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Las Vegas
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Mandalay Bay
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Las Vegas, NV
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4,752
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(1)
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124
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155,000
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2,121,000
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(2)
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The Mirage
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Las Vegas, NV
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3,044
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77
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93,000
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170,000
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New York—New York
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Las Vegas, NV
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2,024
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20
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81,000
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31,000
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Luxor
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Las Vegas, NV
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4,397
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58
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101,000
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20,000
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Monte Carlo
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Las Vegas, NV
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2,992
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21
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90,000
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77,000
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Excalibur
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Las Vegas, NV
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3,981
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51
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93,000
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25,000
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The Park
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Las Vegas, NV
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—
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3
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—
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—
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Subtotal
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21,190
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354
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613,000
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2,444,000
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Regional Properties
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MGM Grand Detroit
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Detroit, MI
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400
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24
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127,000
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30,000
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Beau Rivage
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Biloxi, MS
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1,740
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26
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(3)
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81,000
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50,000
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Gold Strike Tunica
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Tunica, MS
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1,133
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24
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48,000
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17,000
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Borgata
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Atlantic City, NJ
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2,767
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37
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(4)
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160,000
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88,000
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MGM National Harbor
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Prince George's County, MD
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308
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23
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(5)
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123,000
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50,000
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Subtotal
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6,348
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134
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539,000
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235,000
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Total
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27,538
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488
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1,152,000
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2,679,000
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(1)
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Includes 1,117 rooms at the Delano and 424 rooms at the Four Seasons Hotel, both of which are located at our Mandalay Bay property.
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(2)
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Includes 26,000 square feet at the Delano and 30,000 square feet at the Four Seasons, both of which are located at our Mandalay Bay property.
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(3)
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Ten of the 26 acres at Beau Rivage are subject to a tidelands lease.
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(4)
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Eleven of the 37 acres at Borgata are subject to ground leases.
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(5)
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All 23 acres at MGM National Harbor are subject to ground lease.
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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.
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We depend on our properties leased to MGM for all of our anticipated cash flows.
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We may not be able to re-lease our properties following the expiration or termination of the Master Lease.
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MGP's sole material assets are Operating Partnership units representing 26.6% of the ownership interests in the Operating Partnership, over which we have operating control through our ownership of its general partner, and our ownership interest in the general partner of the Operating Partnership.
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The Master Lease restricts our ability to sell our properties.
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We will have future capital needs and may not be able to obtain additional financing on acceptable terms.
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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.
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Rising expenses could reduce cash flow and funds available for future acquisitions and distributions.
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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.
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Because a majority of our major gaming resorts are concentrated on the Strip, we are subject to greater risks than a company that is more geographically diversified.
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Our pursuit of investments in, and acquisitions or development of, additional properties (including our acquisition of the remaining ROFO Property) may be unsuccessful or fail to meet our expectations.
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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.
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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.
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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.
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Our dividend yield could be reduced if we were to sell any of our properties in the future.
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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.
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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.
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MGP is controlled by MGM, whose interests in our business may conflict with ours or yours.
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We are dependent on MGM for the provision of administration services to our operations and assets.
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MGM’s historical results may not be a reliable indicator of its future results.
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Our operating agreement contains provisions that reduce or eliminate duties (including fiduciary duties) of our directors, officers and others.
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If MGM engages in the same type of business we conduct, our ability to successfully operate and expand our business may be hampered.
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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.
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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
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MGM may undergo a change of control without the consent of us or of our shareholders.
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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.
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Legislative or other actions affecting REITs could have a negative effect on us.
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Name
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Age
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Position
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James C. Stewart
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52
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Chief Executive Officer
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Andy H. Chien
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42
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Chief Financial Officer and Treasurer
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ITEM 1A.
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RISK FACTORS
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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.
A subsidiary of MGM is the Tenant and lessee of all of the properties pursuant to the Master Lease, which accounts for all of our revenues. Additionally, because the Master Lease is a triple-net lease, we depend on the Tenant to pay all insurance, taxes, utilities and maintenance and repair expenses in connection with these properties and to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with its business. There can be no assurance that the Tenant will have sufficient assets, income or liquidity to satisfy its payment obligations under the Master Lease, including any payment obligations that may arise in connection with the indemnities under the Master Lease, or that MGM will be able to satisfy its guarantee of the Tenant’s obligations under the Master Lease. Furthermore, there can be no assurance that we will have the right to seek reimbursement against an insurer or have any recourse against the Tenant or MGM in connection with such liabilities. The Tenant and MGM rely on the properties they own and/or operate for income to satisfy their obligations, including their debt service requirements and lease payments due to us under the Master Lease. If income from these properties were to decline for any reason, or if the Tenant’s or MGM’s debt service requirements were to increase, whether due to an increase in interest rates or otherwise, the Tenant may become unable or unwilling to satisfy its payment obligations under the Master Lease and MGM may become unable or unwilling to make payments under its guarantee of the Master Lease. If the Tenant were unable or unwilling to meet its rent obligations and other obligations for one or more of the properties, there can be no assurances that we would be able to contract with other lessees on similar terms as the Master Lease or at all. The inability or unwillingness of the Tenant to meet its rent obligations and other obligations under the Master Lease could materially adversely affect our business, financial position or results of operations, including our ability to pay distributions to our shareholders as required to maintain our status as a REIT. For these reasons, if the Tenant or MGM were to experience a material adverse effect on their respective business, financial positions or results of operations, our business, financial position or results of operations could also be materially adversely affected.
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We depend on the properties leased to MGM for all of our anticipated cash flows.
Unless and until we acquire additional properties, we will depend on properties operated by subsidiaries of MGM, for all of our anticipated cash flows. We may not immediately acquire other properties to further diversify and increase our sources of cash flow and reduce our portfolio concentration. Any default with regard to any property under the Master Lease will cause a default with regard to the entire portfolio covered by the Master Lease. Consequently, the impairment or loss of any one or more of our properties could materially and disproportionately reduce our ability to collect rent under the Master Lease and, as a result, have a material adverse effect on our business, financial condition, results of operations and ability to make distributions to our shareholders.
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We may not be able to re-lease our properties following the expiration or termination of the Master Lease.
When the Master Lease expires, the properties, together or individually, may not be relet in a timely manner or at all, or the terms of reletting, including the cost of allowances and concessions to future tenants, including MGM or its subsidiaries, may be less favorable than the current lease terms. The loss of the Tenant, or future tenants on acquired properties, through lease expiration or other circumstances may require us to spend (in addition to other reletting expenses) significant amounts of capital to renovate the property before it is suitable for a new tenant and cause us to incur significant costs in the form of ongoing expenses for property maintenance, taxes, insurance and other expenses.
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We may have assumed, and in the future may assume, unknown liabilities in connection with acquisitions.
As part of the Formation Transactions, the Borgata Transaction, and the MGM National Harbor Transaction we acquired properties that may be subject to unknown existing liabilities. These liabilities might include liabilities for clean-up or remediation of undisclosed environmental conditions, claims by tenants, vendors or other persons dealing with the contributed properties, tax liabilities and accrued but unpaid liabilities incurred in the ordinary course of business. While the Master Lease will allocate responsibility for many of these liabilities to the Tenant under the Master Lease, if the Tenant fails to discharge these liabilities, we could be required to do so. Additionally while in some instances we may have the right to seek reimbursement against an insurer, any recourse against third parties, including the prior investors in our assets, for certain of these liabilities will be limited. There can be no assurance that we will be entitled to any such reimbursement or that ultimately we will be able to recover in respect of such rights for any of these historical liabilities.
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MGP's sole material assets are Operating Partnership units representing 26.6% of the ownership interests in the Operating Partnership, over which MGP has operating control through its ownership of the Operating Partnership's general partner.
Because MGP's interest in the Operating Partnership represents its only cash-generating asset, its cash flows and distributions depend entirely on the performance of the Operating Partnership and its ability to distribute cash to MGP. MGP is a holding company whose sole material assets are Operating Partnership units representing 26.6% of the ownership interests in the Operating Partnership and its ownership interest in the general partner of the Operating Partnership. The source of MGP's earnings and operating cash flow consists exclusively of cash distributions from the Operating Partnership. Therefore, MGP's ability to make distributions to its Class A shareholders is completely dependent on the performance of the Operating Partnership
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The Master Lease restricts our ability to sell the properties.
Our ability to sell or dispose of the properties may be hindered by the fact that such properties are subject to the Master Lease, as the terms of the Master Lease may make such properties less attractive to a potential buyer than alternative properties that may be for sale. In addition, the Master Lease provides that we may not sell the properties to certain competitors of MGM, limiting the number of potential purchasers of our properties for as long as the properties are subject to the Master Lease.
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If we lose our key management personnel, we may not be able to successfully manage our business or achieve our objectives.
Our success depends in large part upon the leadership and performance of our executive management team, particularly James C. Stewart, our Chief Executive Officer, and Andy H. Chien, our Chief Financial Officer. The appointment of certain key members of our executive management team will be subject to regulatory approvals based upon suitability determinations by gaming regulatory authorities in the jurisdictions where our properties are located. If Messrs. Stewart or Chien are found unsuitable by any such gaming regulatory authorities, or if we otherwise lose their services, we would have to find alternative candidates and may not be able to successfully manage our business or achieve our business objectives.
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We may face extensive regulation from certain 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.
The ownership, operation and management of gaming facilities are subject to pervasive regulation. Certain gaming authorities in the jurisdictions in which MGM operates may require us and our affiliates to maintain a license as a key business entity or supplier because of our status as landlord. Gaming authorities also retain great discretion to require us to be found suitable as a landlord, and certain of our shareholders, officers and directors may be required to be found suitable as well.
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pay that person any distribution or interest upon any of our voting securities;
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allow that person to exercise, directly or indirectly, any voting right conferred through securities held by that person;
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pay remuneration in any form to that person for services rendered or otherwise; or
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fail to pursue all lawful efforts to require such unsuitable person to relinquish his or her voting securities including if necessary, the immediate purchase of the voting securities for cash at fair market value.
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We will have future capital needs and may not be able to obtain additional financing on acceptable terms.
As of December 31, 2017, we have outstanding indebtedness in principal amount of $
4.0 billion
. We may also incur additional indebtedness in the future to refinance our existing indebtedness or to finance newly acquired properties or for general corporate or other purposes. Any significant additional indebtedness could require a substantial portion of our cash flow to make interest and principal payments due on our indebtedness. Greater demands on our cash resources may reduce funds available to us to pay distributions, make capital expenditures and acquisitions, or carry out other aspects of our business strategy. Increased indebtedness can also limit our ability to adjust rapidly to changing market conditions, make us more vulnerable to general adverse economic and industry conditions and create competitive disadvantages for us compared to other companies with relatively lower debt levels. Increased future debt service obligations may limit the Operating Partnership’s and MGP's operational flexibility, including our ability to acquire properties, finance or refinance our properties, contribute properties to joint ventures or sell properties as needed. Further, to the extent we were required to incur indebtedness, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been.
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Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under the notes and our other debt.
We have a significant amount of indebtedness. As of December 31, 2017, we and our subsidiaries on a consolidated basis had $
4.0 billion
principal amount of debt and
$600 million
available for borrowing under our revolving credit facility. Our substantial indebtedness could have important consequences to our financial health. For example, it could:
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make it more difficult for us to satisfy our obligations with respect to the notes and our other debt;
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increase our vulnerability to general adverse economic and industry conditions or a downturn in our business;
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require us to dedicate a substantial portion of our cash flow from operations to debt service, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;
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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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place us at a competitive disadvantage compared to our competitors that are not as highly leveraged;
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limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds; and
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result in an event of default if we fail to satisfy our obligations under the notes or our other debt or fail to comply with the financial and other restrictive covenants contained in the indentures or our other debt instruments, which event of default could result in all of our debt becoming immediately due and payable and could permit certain of our lenders to foreclose on our assets securing such debt.
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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.
The agreements governing our indebtedness contain customary covenants, including restrictions on the Operating Partnership’s ability to grant liens on the Operating Partnership’s assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations and pay certain distributions and other restricted payments. In addition, the Operating Partnership is required to comply with certain financial covenants. These restrictions may limit our operational flexibility. Covenants that limit our operational flexibility as well as defaults under the Operating Partnership’s debt instruments could have a material adverse effect on our business, financial position or results of operations.
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The Master Lease requires us to pay for certain capital improvements or to purchase certain personal property from the Tenant in certain circumstances, and we may be required to obtain additional financing.
The Master Lease provides that, if MGM were required to cease consolidating us within its financial statements prepared in accordance with U.S. GAAP at any time in the future (a “deconsolidation event”), we may be required to pay the Tenant, should the Tenant so elect, an amount equal to the fair market value of certain capital improvements made by or at the direction of the Tenant or the Operating Subtenants from the start of the term of the Master Lease until the deconsolidation event, subject to an initial cap of $100 million in the first year of the Master Lease increasing annually by $75 million each year thereafter. Rent under the Master Lease will increase by a factor applied to such amount paid by us to the Tenant. If such a deconsolidation event were to occur and we do not elect to pay in equity, we may not have sufficient liquidity to fund these payments in respect of capital improvements, and may be required to obtain additional financing, which could adversely affect funds for future acquisitions and have a material adverse effect on our business, financial position or results of operations. Alternatively, we may elect to make payments in respect of the capital improvements in the form of equity, which could be dilutive to existing shareholders.
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Rising expenses could reduce cash flow and funds available for future acquisitions and distributions.
Our properties will be subject to increases in tax rates and tax assessments, utility costs, insurance costs, repairs, maintenance and administrative expenses, and other operating expenses. We may also incur significant expenditures as a result of deferred maintenance for the properties and other properties we may acquire in the future. While the properties under the Master Lease are leased on a triple-net basis, if the Tenant or future tenants fail to pay required tax, utility and other impositions and other operating expenses, or if the Tenant or future tenants fails to maintain leased properties in the condition required by the Master Lease, and if we are required to incur a high level of capital expenditures, we could be required to pay those costs which may require that we obtain additional financing and could adversely affect funds available for future acquisitions or cash available for distributions.
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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.
As the owner of properties associated with gaming facilities, we will be impacted by the risks associated with the gaming industry. Therefore, our success is to some degree dependent on the gaming industry, which could be adversely affected by economic conditions in general, changes in consumer trends, reductions in discretionary consumer spending and corporate spending on conventions and business development and preferences and other factors over which we and MGM have no control. Economic contraction, economic uncertainty or the perception by our customers of weak or weakening economic conditions may cause a decline in demand for hotels, casino resorts, trade shows and conventions, and for the type of luxury amenities offered at our properties. In addition, changes in
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Because a majority of our major gaming resorts are concentrated on the Strip, we are subject to greater risks than a company that is more geographically diversified.
Given that a majority of our major resorts are concentrated on the Strip, our business may be significantly affected by risks common to the Las Vegas tourism industry. For example, the cost and availability of air services and the impact of any events that disrupt air travel to and from Las Vegas can adversely affect the business of the Tenant. We cannot control the number or frequency of flights to or from Las Vegas, but the Tenant relies on air traffic for a significant portion of its visitors. Reductions in flights by major airlines as a result of higher fuel prices or lower demand can impact the number of visitors to our properties. Additionally, there is one principal interstate highway between Las Vegas and Southern California, where a large number of the customers that frequent our properties reside. Capacity constraints of that highway or any other traffic disruptions may also affect the number of customers who visit our facilities. Moreover, due to the concentration of our major resorts that operate on the Strip, we may be disproportionately affected by general risks such as acts of terrorism, natural disasters, including major fires, floods and earthquakes, and severe or inclement weather, should such developments occur in or nearby Las Vegas.
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Our pursuit of investments in, and acquisitions or development of, additional properties (including our acquisition of the remaining ROFO Property) may be unsuccessful or fail to meet our expectations.
We operate in a highly competitive industry and face competition from other REITs, investment companies, private equity and hedge fund investors, sovereign funds, lenders, gaming companies and other investors, some of whom are significantly larger and have greater resources and lower costs of capital. Increased competition will make it more challenging to identify and successfully capitalize on acquisition opportunities that meet our investment objectives, particularly if the properties or assets we are seeking to acquire are owned or operated by competitors of MGM. Additionally, although our Master Lease provides us with a right of first offer with respect to the remaining ROFO Property, there can be no assurance that MGM's development property in Springfield, Massachusetts will be completed on schedule, or at all, or as to the timing of its commencement of operations or when operations at the ROFO Property will stabilize in order for us to consider a purchase of this asset. In addition, MGM may elect not to sell the ROFO Property in the future, or we may be unable to reach an agreement with MGM on the terms of the purchase of such property if MGM were to elect to sell the ROFO Property in the future. Accordingly, there can be no assurance that we will be able to acquire any additional properties in the future.
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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.
MGM (and any future tenants of our gaming properties) will be required to be licensed under applicable law in order to operate any of our gaming properties as gaming facilities. If the Master Lease or any future lease agreements we may enter into are terminated (which could be required by a regulatory agency) or expire, any new tenant must be licensed and receive other regulatory approvals to operate the properties as gaming facilities. Any delay in or inability of the new tenant to receive required licenses and other regulatory approvals from the applicable state and county government agencies may prolong the period during which we are unable to collect the applicable rent. Further, in the event that the Master Lease or future agreements are terminated or expire and a new tenant is not licensed or fails to receive other regulatory approvals, the gaming properties may not be operated as gaming facilities and we will not be able to collect the applicable rent. Moreover, we may be unable to transfer or sell the affected properties as gaming properties, which would adversely impact our financial condition and results of operation.
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Our operating agreement restricts the ownership and transfer of MGP's outstanding Class A shares, which may have the effect of delaying, deferring or preventing a transaction or change of control of our company.
In order for MGP to qualify to be taxed as a REIT, not more than 50% in value of its outstanding shares may be owned, actually or constructively, by five or fewer individuals at any time during the last half of each taxable year after the first year for which it elects to qualify to be taxed as a REIT. Additionally, at least 100 persons must beneficially own MGP's shares during at least 335 days of a taxable year (other than the first taxable year for which we elect to be taxed as a REIT). Also, subject to limited exceptions, neither we nor an actual or constructive owner of 10% or more (by value) of our shares may actually or constructively own 10% or more of the interests in the assets or net profits of a non-corporate tenant, or, if the tenant is a corporation, 10% or more of the total combined voting power of all classes of stock entitled to vote or 10% or more of the total value of all classes of stock of the tenant. Any tenant that exceeds such ownership limits is referred to as a related party tenant, and rent from a related party tenant generally will not qualify under the REIT income tests.
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Any mechanic’s liens incurred by the Tenant or the Operating Subtenants will attach to, and constitute liens on, our interest in the properties.
To the extent the Tenant or the Operating Subtenants make any improvements, these improvements could cause mechanic’s liens to attach to our properties. To the extent that mechanic’s liens, or similar claims, are recorded against any of the properties or any properties we may acquire in the future, the holders of such mechanic’s liens or claims may enforce them by court action and courts may cause the applicable properties or future properties to be sold to satisfy such liens or claims, which could negatively impact our revenues, results of operations and our distributions to shareholders. Further, holders of such liens or claims could have priority over MGP's Class A shareholders in the event of bankruptcy or liquidation, and as a result, a trustee in bankruptcy may have difficulty realizing or foreclosing on such properties in any such bankruptcy or liquidation, and the amount of distributions MGP's Class A shareholders could receive in such bankruptcy or liquidation could be reduced.
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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.
All of our rental revenue is generated from the Master Lease, which is a triple-net lease, and provides greater flexibility to the Tenant related to the use of leased property than would be the case with ordinary property leases, such as the right to freely sublease portions of each leased property, to make alterations
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The Tenant may assign its responsibilities under the Master Lease to unaffiliated third parties.
The Tenant may assign its obligations under the Master Lease (including with respect to one or more individual properties) to a third party assignee without our consent if such assignee meets certain conditions under the Master Lease regarding its experience operating large-scale casinos (or in the case of any of our non-gaming properties, experience operating similar properties), licensing status and economic condition, among other requirements. Despite these assignment requirements, there can be no assurances that any future assignee of the Tenant’s obligations under the Master Lease would be as creditworthy as the Tenant or MGM, or would be able to operate the properties with the same operational expertise as the Tenant and MGM, which could have a material adverse effect on our business, financial condition, results of operations.
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We may be unable to realize the anticipated benefit of the rent escalators in our Master Lease.
Although the Master Lease provides that the base rent will be escalated annually by 2.0% for the second through the sixth lease years (as defined in the Master Lease), thereafter this rent escalation is subject to the Tenant and, without duplication, the Operating Subtenants collectively meeting an adjusted net revenue to rent ratio of 6.25:1.00 based on their net revenue from the leased properties subject to the Master Lease (as determined in accordance with U.S. GAAP, adjusted to exclude net revenue attributable to certain scheduled subleases and, at the Tenant’s option, reimbursed cost revenue). If the rent escalation were not to apply in any particular year, no arrears would accrue or be payable in future lease years. Therefore, there can be no assurance that we will ever realize the benefit of the rent escalators in the Master Lease after the sixth lease year, which could have a material adverse effect on anticipated future cash flows and our ability to increase our distributions to shareholders.
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Our dividend yield could be reduced if we were to sell any of our properties in the future.
If we elect to sell one or more of the properties in the future, our results of operations could decrease, which could result in a lower level of distributions to our unitholders and shareholders than we made prior to such sale or sales. If our distributions were to decrease, the effective dividend yield of MGP's Class A shares (i.e., the yield as a percentage of the then-market price of MGP's Class A shares) could subsequently decrease as well, which could have a material adverse effect on the market price of MGP's Class A shares.
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An increase in market interest rates could increase our interest costs on existing and future debt and could adversely affect the price of MGP's Class A shares.
If interest rates increase, so could our interest costs for any new debt and our variable rate debt obligations. This increased cost could make the financing of any acquisition more costly, as well as lower future period earnings. Rising interest rates could limit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing. In addition, an increase in interest rates could decrease the access third parties have to credit, thereby decreasing the amount they are willing to pay for our assets and consequently limiting our ability to reposition our portfolio promptly in response to changes in economic or other conditions.
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The Tenant may choose not to renew the Master Lease or seek to renegotiate the terms of the Master Lease at each renewal term.
The Master Lease generally has an initial lease term of ten years with the potential to extend the term for four additional five-year terms thereafter (other than with respect to MGM National Harbor, as described below), solely at the option of the Tenant. The initial term of the Master Lease with respect to MGM National Harbor ends on August 31, 2024. Thereafter, the initial term of the Master Lease with respect to MGM National Harbor may be renewed at the option of the Tenant for an initial renewal period lasting until the earlier of the end of the then-current term of the Master Lease or the next renewal term (depending on whether MGM elects to renew the other properties under the Master Lease in connection with the expiration of the initial ten-year term). If, however, the Tenant chooses not to renew the lease with respect to MGM National Harbor after the initial MGM National Harbor term under the Master Lease, the Tenant would also lose the right to renew the Master Lease with respect to the rest of the properties when the initial ten-year lease term related to the rest of the properties ends in 2026. At the expiration of any additional renewal term thereafter, the Tenant may choose not to renew the Master Lease or seek to
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We may be required to contribute insurance proceeds with respect to casualty events at our properties to the lenders under our debt financing agreements.
In the event that we were to receive insurance proceeds with respect to a casualty event at any of our properties, we may be required under the terms of our debt financing agreements to contribute all or a portion of those proceeds to the repayment of such debt, which may prevent us from restoring such properties to their prior state. If the remainder of the proceeds (after any such required repayment) were insufficient to make the repairs necessary to restore the damaged properties to a condition substantially equivalent to its state immediately prior to the casualty, we may not have sufficient liquidity to otherwise fund these repairs and may be required to obtain additional financing, which could have a material adverse effect on our business, financial position or results of operations.
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There can be no assurance that we will be able to make distributions to our unitholders and Class A shareholders or maintain our anticipated level of distributions over time.
We will determine future distributions based on a number of factors, including, among other things, our operating results, our financial condition, especially in relation to our anticipated future capital needs, our then-current expansion plans, the distribution requirements for REITs under the Code, and other factors our board deems relevant. For example, if the Tenant were unable to make rental payments under the Master Lease and MGM were unable to fulfill its obligations under its guarantee, our ability to make distributions would be materially impaired. Our ability to make distributions to our unitholders and Class A shareholders, to maintain our anticipated level of distributions over time, and the timing, amount and composition of any future distributions will be at the sole discretion of our board in light of conditions then existing. Consequently, there can be no assurance that we will ever be able to make distributions at the anticipated distribution rate or be able to maintain our anticipated distribution rate over time, and any change in our distribution policy could have a material adverse effect on the market price of our Class A shares.
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Delaware law and provisions in our operating agreement may delay or prevent takeover attempts by third parties and therefore inhibit our shareholders from realizing a premium on their shares.
Our operating agreement and Delaware law both contain provisions that are intended to prevent coercive takeover practices and inadequate takeover bids and to require prospective acquirers to negotiate with our board of directors.
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provide majority voting rights to the holder of MGP's outstanding Class B share;
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provide that any merger, consolidation, conversion, sale or other disposition of our assets requires approval of our board of directors;
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require advance notice for our shareholders to nominate candidates for election to our board of directors or to propose business to be considered by our shareholders at a meeting of our shareholders;
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allow us to issue additional securities, including, but not limited to, preferred shares, without approval by our shareholders;
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allow the board of directors to amend the operating agreement without the approval of the shareholders except under certain specified circumstances;
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require that (subject to certain exceptions) no person may own, or be deemed to own by virtue of the attribution provisions of the Code, more than 9.8% of the aggregate value or number (whichever is more restrictive) of any class of MGP's shares (other than MGP's Class B share) or more than 9.8% in value of the aggregate outstanding shares of all classes and series of MGP's shares; and
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limit the ability of our shareholders to call special meetings of our shareholders or to act by written consent.
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The bankruptcy or insolvency of the Tenant could result in the termination of the Master Lease and material losses to us.
Although the Tenant’s performance and payments under the Master Lease are guaranteed by MGM, a default by the Tenant with regard to any property under the Master Lease, or by MGM with regard to its guarantee, will cause a default with regard
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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.
The Tenant, a subsidiary of MGM, leases all of the properties pursuant to the Master Lease. Bankruptcy laws afford certain protections to tenants that may also affect the Master Lease, which may be treated for purposes of bankruptcy laws as either a single lease for all the properties or as separate and severable leases for each property. Subject to certain restrictions, a tenant under a lease generally is required to assume or reject the lease as a whole, rather than making the decision on a property-by-property basis. This prevents the tenant from assuming only the better performing properties and terminating the lease with respect to the poorer performing properties. However, it is possible that a bankruptcy court could determine that a single “master lease” covering multiple properties is not a single indivisible lease but rather is multiple severable leases each of which can be assumed or rejected independently. Whether or not a bankruptcy court will require that the Master Lease must be assumed or rejected as a whole depends upon a “facts and circumstances” analysis considering a number of factors, including the parties’ intent, the nature and purpose of the relevant documents, whether there was separate and distinct consideration for each property included in the Master Lease, whether the Landlord or Tenant had the ability to dispose of its interest in any property included in the Master Lease, the provisions contained in the relevant documents and applicable state law. If a bankruptcy court in a bankruptcy of the Tenant were to determine that the Master Lease is not a single lease but rather multiple severable leases each of which can be assumed or rejected independently, certain underperforming leases related to properties we own could be rejected by the Tenant in bankruptcy while tenant-favorable leases are allowed to remain in place, thereby adversely affecting payments to us derived from the properties.
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A bankruptcy court may judicially recharacterize the Master Lease as a secured lending transaction, in which case we would not be treated as the owner of the properties and could lose certain rights as the owners in the bankruptcy proceedings.
It is possible that, if we were to become subject to bankruptcy proceedings, a bankruptcy court could re-characterize the lease transactions set forth in the Master Lease as secured lending transactions depending on its interpretation of the terms of the Master Lease, including, among other factors, the length of the Master Lease relative to the useful life of the leased property. If the Master Lease were judicially recharacterized as a secured lending transaction, we would not be treated as the owner of the properties and could lose the legal as well as economic attributes of the owners of the properties, which could have a material adverse effect on our business, financial position or results of operations.
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We may experience uninsured or underinsured losses, which could result in a significant loss of the capital we have invested in a property, decrease anticipated future revenues or cause us to incur unanticipated expense.
While the Master Lease requires, and any new lease agreements are expected to require, that comprehensive insurance and hazard insurance be maintained by the Tenant, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, that are or will be subject to sublimits and may be uninsurable or not economically insurable. Insurance coverage may not be sufficient to pay the full current market value or current replacement cost of a loss. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it infeasible to use insurance proceeds to replace the property after such property has been damaged or destroyed. Under such circumstances, the insurance proceeds received might not be adequate to restore the economic position with respect to such property.
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Changes in building and/or zoning laws may require us to update a property in the event of recapture or prevent us from fully restoring a property in the event of a substantial casualty loss and/or require us to meet additional or more stringent construction requirements.
Due to changes, among other things, in applicable building and zoning laws, ordinances and codes that may affect certain of our properties that have come into effect after the initial construction of the properties, certain properties may not comply fully with current building and/or zoning laws, including electrical, fire, health and safety codes and regulations, use, lot coverage, parking and setback requirements, but may qualify as permitted non-conforming uses. Although the Master Lease requires the Tenant to pay for and ensure continued compliance with applicable law, there is no assurance that future leases will be negotiated on the same basis or that the Tenant or other future tenants will make the required changes as required by the terms of the Master Lease and/or any future leases we may enter into. In addition, such changes may limit the Tenant’s ability to restore the premises of a property to its previous condition in the event of a substantial casualty loss with respect to the property or the ability to refurbish, expand or renovate such property to remain compliant, or increase the cost of construction in order to comply with changes in building or zoning codes and regulations. If the Tenant is unable to restore a property to its prior use after a substantial casualty loss or is required to comply with more stringent building or zoning codes and regulations, we may be unable to re-lease the space at a comparable effective rent or sell the property at an acceptable price, which may materially and adversely affect us.
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Environmental compliance costs and liabilities associated with real estate properties owned by us may materially impair the value of those investments.
As an owner of real property, we are subject to various federal, state and local environmental and health and safety laws and regulations. Although we will not operate or manage most of our property, we may be held primarily or jointly and severally liable for costs relating to the investigation and clean-up of any property from which there has been a release or threatened release of a regulated material as well as other affected properties, regardless of whether we knew of or caused the release.
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Certain properties are subject to restrictions pursuant to reciprocal easement agreements, operating agreements, or similar agreements.
Many of the properties are, and properties that we acquire in the future may be, subject to use restrictions and/or operational requirements imposed pursuant to ground leases, restrictive covenants or conditions, reciprocal easement agreements or operating agreements that could adversely affect our ability to lease space to third parties. Such restrictions could include, for example, limitations on alterations, changes, expansions, or reconfiguration of properties; limitations on use of properties; limitations affecting parking requirements; or restrictions on exterior or interior signage or facades. In certain cases, consent of the other party or parties to such agreements may be required when altering, reconfiguring, expanding or redeveloping. Failure to secure such consents when necessary may harm our ability to execute leasing strategies, which could adversely affect our business, financial condition or results of operations.
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Our properties are subject to risks from natural disasters such as earthquakes, hurricanes and severe weather.
Our properties are located in areas that may be subject to natural disasters, such as earthquakes, and extreme weather conditions, including, but not limited to, hurricanes. Such natural disasters or extreme weather conditions may interrupt operations at the casino resorts, damage our properties, and reduce the number of customers who visit our facilities in such areas. A severe earthquake in Las Vegas could damage or destroy a number of our properties. In addition, our operations could be adversely impacted by a drought or other cause of water shortage. A severe drought of extensive duration experienced in Las Vegas or in the other regions in which we expect to operate could adversely affect the business and results of operations at our properties. Although the Tenant is required to maintain both property and business interruption insurance coverage for certain extreme weather conditions, such coverage is subject to deductibles and limits on maximum benefits, including limitation on the coverage period for business interruption, and we cannot assure you that we or the Tenant will be able to fully insure such losses or fully collect, if at all, on claims resulting from such natural disasters or extreme weather conditions.
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Possible terrorist activity or other acts of violence could adversely affect our financial condition and results of operations.
Terrorist attacks or other acts of violence may result in declining economic activity, which could harm the demand for goods and services offered by the Tenant and the value of our properties and might adversely affect the value of an investment in our securities. Such a resulting decrease in retail demand could make it difficult for us to renew or re-lease our properties at lease rates equal to or above historical rates. Terrorist activities or violence also could directly affect the value of our properties through damage, destruction or loss, and the availability of insurance for such acts, or of insurance generally, might be lower or cost more, which could increase our operating expenses and adversely affect our financial condition and results of operations. To the extent that the Tenant is affected by future attacks, its business similarly could be adversely affected, including its ability to continue to meet obligations under the Master Lease. These acts might erode business and consumer confidence and spending and might result in increased volatility in national and international financial markets and economies. Any one of these events might decrease demand for real estate, decrease or delay the occupancy of our new or redeveloped properties, and limit our access to capital or increase our cost of raising capital.
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The operation of our properties will require, and the operation of properties acquired in the future (including the ROFO Property we may acquire) will likely require, the use of certain brand names.
The operation of our properties requires the use of certain brand names, and the terms of the Master Lease do not require the Tenant, MGM or any of its subsidiaries to transfer any intellectual property rights associated with any casino resort to us or to potential new tenants. If the Tenant or another subsidiary of MGM were to cease being the tenant of the properties, we or a successor tenant may be required to rebrand and/or renovate such properties at substantial cost. If we are unable to successfully manage the transition of our business to new brands in order to accommodate future tenants, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
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We
have engaged and may engage in hedging transactions that may limit gains or result in losses.
We have used derivatives to hedge certain of our liabilities and we currently have interest rate swap agreements in place. As of December 31, 2017, we have aggregate interest rate swap agreements covering $1.2 billion of borrowings under the Operating Partnership's term loan B facility. The counterparties of these arrangements are major financial institutions; however, we are exposed to credit risk in the event of non-performance by the counterparties. This has certain risks, including losses on a hedge position, which may reduce the return on our investments. Such losses may exceed the amount invested in such instruments. In addition, counterparties to a hedging arrangement could default on their obligations. We may have to pay certain costs, such as transaction fees or breakage costs, related to hedging transactions.
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We are controlled by MGM, whose interests in our business may conflict with ours or yours.
MGP's Class B share, representing a majority of the voting power of its shares, is owned by MGM, whose interests may differ from or conflict with the interests of MGP's other shareholders. MGM has the ability to exercise control over MGP's affairs, including control over the outcome of all matters submitted to MGP's shareholders for approval, including the election of directors and significant transactions. MGM will also have the power to prevent or cause a change in control as a result of its beneficial ownership of MGP's Class B share, which could, among other things, discourage a potential acquirer from attempting to obtain control of MGP in a manner that provides a control premium to any shareholders other than MGM. Moreover, in such a change of control, shareholders are not entitled to dissenters’ rights of appraisal under our operating agreement or applicable Delaware law. As a result, unless and until MGM and its controlled affiliates’ (excluding us and our subsidiaries) aggregate beneficial ownership of the combined economic interests in MGP and the Operating Partnership falls below 30%, MGM will be able to effectively control us.
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We are dependent on MGM for the provision of administration services to our operations and assets.
The operation of our business depends on the administration services provided by MGM, including, among others, accounting, financial reporting, human resources, information systems, tax and legal services. MGM’s personnel and support staff that provide services to us are not required to act exclusively for us, and no specific individuals are required to be provided to us by MGM. Any failure to effectively manage our operations or to implement our strategy could have a material adverse effect on our business, financial condition, results of operations and cash flows.
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MGP's operating agreement contains provisions that reduce or eliminate duties (including fiduciary duties) of its directors, officers and others.
MGP's operating agreement provides that its board of directors, in exercising its rights in its capacity as members of the board of directors, is entitled to consider only such interests and factors as they desire, including MGM’s interests, and has no duty or obligation (fiduciary or otherwise) to give any consideration to any interest of or factors affecting us and is not subject to any different standards imposed by our operating agreement, the Limited Liability Company Act of Delaware or under any other law, rule or regulation or in equity. Similarly, MGP's operating agreement provides that its officers, MGM and its affiliates and any other person eligible for indemnification under the terms of our operating agreement do not
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MGM has no obligation to fund our future capital needs.
MGM has no obligation to fund our business and operations, and does not guarantee or otherwise provide credit support for our indebtedness. We cannot assure our unitholders and shareholders that adequate sources of funding will be available to us on favorable terms or at all. As a result, we may not be able to fund our future capital needs, which could have an adverse effect on our business, financial condition and results of operations.
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If MGM engages in the same type of business we conduct, our ability to successfully operate and expand our business may be hampered.
Our operating agreement provides that:
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the doctrine of corporate opportunity, or any analogous doctrine, does not apply to, among others, MGM and its affiliates and our directors or executive officers or any of their affiliates;
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no such persons or entities will have any duty to communicate or offer any opportunity, of which such person becomes aware, relating to a potential transaction, agreement, arrangement or other matter that may be an opportunity for such other persons;
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no such persons or entities will be liable to such other persons for breach of any fiduciary duty or other duty by reason of the fact that such person pursues or acquires such opportunity for itself, directs such opportunity to another person or entity or does not communicate such opportunity or information to such other persons or entities; and
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MGM and its affiliates may compete with us for investment opportunities and may own an interest in entities that compete with us on an operations basis.
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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 connection with the Formation Transactions, we entered into the Master Lease and various agreements to govern our relationship with MGM. These agreements include the MCA, Corporate Services Agreement, IP License Agreement, Registration Rights Agreement and a sublease agreement. While MGM endeavored to have these agreements reflect customary, arm’s-length commercial terms and conditions, these agreements are not the result of arm’s-length negotiations, and consequently there can be no assurance that the terms of these agreements are as favorable to us as if they had been negotiated with unaffiliated third parties. In addition, we may choose not to enforce, or to enforce less vigorously, our rights under our agreements with MGM because of our desire to maintain our ongoing relationship with MGM and its affiliates.
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MGM may undergo a change of control without the consent of us or of our unitholders and shareholders.
MGM is not required to seek our consent or the consent of our shareholders in connection with a change of control involving MGM, and accordingly, MGM’s controlling interest in us may become controlled by a new owner of MGM in the event of such change of control. If a new owner were to acquire MGM and thereby acquire MGM’s interest in us, and appoint new directors or officers of its own choosing, it would be able to exercise substantial influence over our policies and procedures and exercise substantial influence over our management and the types of acquisitions that we make. Such changes could result in our capital being used to make acquisitions that are substantially different from our targeted acquisitions. Additionally, we cannot predict with any certainty the effect that any change of control of MGM and transfer in MGM’s interest in us would have on the trading price of our shares or on our ability to raise capital or make investments in the future, because such matters would depend to a large extent on the identity of the new owner and the new owner’s intentions with regard to us. As a result, our future would be uncertain, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
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We are a “controlled company” within the meaning of applicable stock market rules and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.
MGM owns more than 50% of the voting power of our outstanding shares entitled to vote generally in the election of directors, and we are a “controlled company” under applicable stock exchange corporate governance standards. As a controlled company, we intend to rely on exemptions from certain stock exchange corporate governance standards, including the requirements that:
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the majority of our board of directors consists of independent directors;
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we have a nominating and governance committee composed entirely of independent directors with a written operating agreement addressing the committee’s purpose and responsibilities; and
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we have a compensation committee composed entirely of independent directors with a written operating agreement addressing the committee’s purpose and responsibilities.
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We intend to rely on these exemptions, and, as a result, you will not have the same protections afforded to shareholders of companies that are subject to all of the stock exchange corporate governance requirements.
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If MGP fails to remain qualified to be taxed as a REIT, we 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.
We intend to continue to operate in a manner that will allow MGP to continue to qualify to be taxed as a REIT for U.S. federal income tax purposes. We received opinions of Weil, Gotshal & Manges LLP (“REIT Tax Counsel”) that, commencing with our taxable year ended
December 31, 2016
, MGP was organized in conformity with the requirements for qualification and taxation as a REIT under the U.S. federal income tax laws and MGP's proposed method of operations will enable it to satisfy the requirements for qualification and taxation as a REIT under the U.S. federal income tax laws for our taxable year ended
December 31, 2017
and subsequent taxable years. You should be aware, however, that opinions of counsel are not binding on the Internal Revenue Service (“IRS”) or any court. The opinion of REIT Tax Counsel represents only the view of REIT Tax Counsel, based on its review and analysis of existing law and on certain representations as to factual matters and covenants made by MGM and us, including representations relating to the values of our assets and the sources of our income. The opinion was expressed as of the date issued. REIT Tax Counsel will have no obligation to advise MGM, us or the holders of our shares of any subsequent change in the matters stated, represented or assumed or of any subsequent change in applicable law. Furthermore, both the validity of the opinion of REIT Tax Counsel and our qualification to be taxed as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis, the results of which will not be monitored by REIT Tax Counsel. Our ability to satisfy the asset tests depends upon our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Any failure to qualify to be taxed as a REIT, or failure to remain to be qualified to be taxed as a REIT, would have an adverse effect on our business, financial condition and results of operations.
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Qualifying to be taxed as a REIT involves highly technical and complex provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and violations of these provisions could jeopardize our REIT qualification.
Qualification to be taxed as a REIT involves the application of highly technical and complex Code provisions for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize MGP's REIT qualification. MGP's qualification to be taxed as a REIT will depend on its satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis. In addition, MGP's ability to satisfy the requirements to qualify to be taxed as a REIT may depend in part on the actions of third parties over which we have no control or only limited influence.
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The ownership limits that apply to REITs, as prescribed by the Code and by our operating agreement, may inhibit market activity in our shares and restrict our business combination opportunities.
In order for MGP to qualify to be taxed as a REIT, not more than 50% in value of its outstanding shares may be owned, beneficially or constructively, by five or fewer individuals, as defined in the Code to include certain entities, at any time during the last half of each taxable year after the first year for which MGP elects to qualify to be taxed as a REIT. Additionally, at least 100 persons must beneficially own MGP's shares during at least 335 days of a taxable year (other than the first taxable year for which it elects to be taxed as a REIT). Also, subject to limited exceptions, neither MGP nor an actual or constructive owner of 10% or more (by value) of its shares may actually or constructively own 10% or more of the interests in the assets or net profits of a non-corporate tenant, or, if the tenant is a corporation, 10% or more of the total combined voting power of all classes of stock entitled to vote or 10% or more of the total value of all classes of stock of the tenant. Any tenant that exceeds such ownership limits is referred to as a related party tenant, and rent from a related party tenant generally will not qualify under the REIT income tests. Subject to certain exceptions, MGP's operating agreement authorizes its board of directors to take such actions as are necessary and desirable to preserve its qualification to be taxed as a REIT. MGP's operating agreement also provides that, unless exempted by the board of directors in its sole discretion, no person may own more than 9.8% in value or in number, whichever is more restrictive, of any class of its shares (other than its Class B share) or 9.8% in value of the aggregate outstanding shares of all classes and series of its shares, including if repurchases by us cause a person’s holdings to exceed such limitations. The constructive ownership rules are complex and may cause Class A shares owned directly or constructively by a group of related individuals to be constructively owned by one individual or entity. These ownership limits could delay or prevent a transaction or a change in control of us that might involve a premium price for our shares or otherwise be in the best interests of our shareholders.
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Distributions payable by REITs qualify for a less favorable tax rate than the reduced tax rates available for some dividends.
While distributions payable by REITs for tax years beginning after December 31, 2017 are eligible for a new 20% pass-through
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REIT distribution requirements could adversely affect our ability to execute our business plan.
To maintain REIT status, MGP must meet a number of organizational and operational requirements, including a requirement that it annually distributes to our shareholders at least 90% of our REIT taxable income, determined without regard to the dividends-paid deduction and excluding any net capital gains. To the extent that we satisfy this distribution requirement and qualify for taxation as a REIT but distribute less than 100% of our REIT taxable income, determined without regard to the dividends-paid deduction and including any net capital gains, MGP will be subject to U.S. federal corporate income tax on its undistributed net taxable income. In addition, MGP will be subject to a nondeductible 4% excise tax if the amount that we actually distribute to Class A shareholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. We intend to make distributions to Class A shareholders to comply with the REIT requirements of the Code.
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To fund our growth strategy and refinance our indebtedness, we may depend on external sources of capital, which may not be available to us on commercially reasonable terms or at all.
To maintain REIT status, MGP must meet a number of organizational and operational requirements, including a requirement that it annually distributes to its shareholders at least 90% of its REIT taxable income, determined without regard to the dividends-paid deduction and excluding any net capital gains. As a result of these requirements, we may not be able to fund future capital needs, including any necessary acquisition financing, solely from operating cash flows. Consequently, we intend to rely on third-party capital market sources for debt or equity financing to fund our business strategy. In addition, we will likely need third-party capital market sources to refinance our indebtedness at maturity. Continued or increased turbulence in the United States or international financial markets and economies could adversely affect our ability to replace or renew maturing liabilities on a timely basis or access the capital markets to meet liquidity requirements and may result in adverse effects on our business, financial condition and results of operations. As such, we may not be able to obtain the financing on favorable terms or at all. Our access to third-party sources of capital also depends, in part, on:
|
•
|
the market’s perception of our growth potential;
|
•
|
our then-current levels of indebtedness;
|
•
|
our historical and expected future earnings, cash flows and cash distributions; and
|
•
|
the market price of MGP's Class A shares.
|
•
|
Even if MGP remains qualified to be taxed as a REIT, we may face other tax liabilities that reduce our cash flow.
Even if MGP remains qualified for taxation as a REIT, we may be subject to certain U.S. federal, state and local taxes on our income and assets, including taxes on any undistributed income and state or local income, property and transfer taxes. For example, although we currently have one taxable REIT subsidiaries (a “TRS”) that does not engage in any operating activities, in the future, we may hold some of our assets or conduct certain of our activities through one or more, to the extent we have an active TRS in the future, or other subsidiary corporations these entities will be subject to foreign, federal, state and local corporate-level income taxes as regular C corporations. In addition, we may incur a 100% excise tax on transactions with a TRS if they are not conducted on an arm’s-length basis. Any of these taxes would decrease cash available for distribution to our shareholders.
|
•
|
Complying with REIT requirements may cause us to liquidate investments or forgo otherwise attractive opportunities.
To qualify to be taxed as a REIT for U.S. federal income tax purposes, we must ensure that, at the end of each calendar quarter,
|
•
|
Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.
The REIT provisions of the Code substantially limit our ability to hedge our assets and liabilities. Any income from a hedging transaction that we enter into primarily to manage risk of currency fluctuations or to manage risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets does not constitute “gross income” for purposes of the 75% or 95% gross income tests that apply to REITs, provided that certain identification requirements are met. To the extent that we enter into other types of hedging transactions or fail to properly identify such transaction as a hedge, the income is likely to be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may be required to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because a TRS may be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise choose to bear. In addition, losses in a TRS will generally not provide any tax benefit, except that such losses could theoretically be carried back or forward against past or future taxable income in the TRS.
|
•
|
If MGP fails to meet the REIT income tests as a result of receiving non-qualifying income, we would be required to pay a penalty tax in order to retain MGP's REIT status, or MGP may fail to qualify as a REIT
.
Certain income we receive could be treated as non-qualifying income for purposes of the REIT requirements. For example, rents we receive or accrue from the Tenant will not be treated as qualifying rent for purposes of these requirements if the Master Lease is not respected as a true lease for U.S. federal income tax purposes and is instead treated as a service contract, joint venture or some other type of arrangement. If the Master Lease is not respected as a true lease for U.S. federal income tax purposes, MGP may fail to qualify to be taxed as a REIT. Even if MGP has reasonable cause for a failure to meet the REIT income tests as a result of receiving non-qualifying income, we would nonetheless be required to pay a penalty tax in order to retain MGP's REIT status.
|
•
|
Legislative or other actions affecting REITs could have a negative effect on us.
The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury. Changes to the tax laws, with or without retroactive application, could materially and adversely affect our investors, our business plans or us. For instance, it is possible that future legislation could result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be taxed, for federal income tax purposes, as a corporation. We cannot predict how changes in the tax laws might affect our investors or us. New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect MGP's ability to qualify as a REIT or the U.S. federal income tax consequences of such qualification.
|
•
|
The market price and trading volume of our shares may be volatile.
The market price of MGP's Class A shares may be volatile. In addition, the trading volume in MGP's Class A shares may fluctuate and cause significant price variations to occur. We cannot assure you that the market price of MGP's Class A shares will not fluctuate or decline significantly in the future.
|
•
|
actual or anticipated variations in our quarterly results of operations or distributions;
|
•
|
changes in our funds from operations or earnings estimates;
|
•
|
publication of research reports about us or the real estate or gaming industries;
|
•
|
changes in market interest rates that may cause purchasers of our shares to demand a different yield;
|
•
|
changes in market valuations of similar companies;
|
•
|
market reaction to any additional debt we may incur in the future;
|
•
|
additions or departures of key personnel;
|
•
|
actions by institutional shareholders;
|
•
|
speculation in the press or investment community about our company or industry or the economy in general;
|
•
|
the occurrence of any of the other risk factors presented in our periodic reports;
|
•
|
general market and economic conditions; and
|
•
|
enactment of legislation that could materially reduce or eliminate the tax advantages of REITs.
|
•
|
Our cash available for distribution to shareholders may not be sufficient to make distributions at expected levels, and we may need to borrow in order to make such distributions, make such distributions in the form of shares or may not be able to make such distributions in full.
Distributions that we make are authorized and determined by MGP's board of directors in its sole discretion out of funds legally available therefor. While we anticipate maintaining relatively stable distribution(s) during each year, the amount, timing and frequency of distributions are at the sole discretion of MGP's board of directors and will be declared based upon various factors, including, but not limited to: future taxable income, limitations contained in debt instruments, debt service requirements, operating cash inflows and outflows including capital expenditures and acquisitions, limitations on our ability to use cash generated in the TRSs, if any, to fund distributions and applicable law.
|
•
|
Future offerings of debt and/or preferred equity securities, which may be senior to our shares for purposes of distributions or upon liquidation, could adversely affect the market price of MGP's Class A shares.
In the future, we may attempt to increase our capital resources by making additional offerings of debt or preferred equity securities, including medium-term notes, trust preferred securities, senior or subordinated notes and preferred shares. If a liquidation event were to occur, holders of our debt securities and preferred shares and lenders with respect to other borrowings will receive distributions of our available assets prior to the holders of our shares. Additional equity offerings may dilute the holdings of our existing shareholders or reduce the market price of MGP's Class A shares, or both. Holders of MGP's Class A shares are not entitled to preemptive rights or other protections against dilution. MGP's preferred shares, if issued, could have a preference on liquidating distributions or a preference on distribution payments that could limit our ability to make a distribution to the holders of MGP's Class A shares. Since our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our shareholders bear the risk of our future offerings reducing the market price of MGP's Class A shares and diluting their shareholdings in us.
|
•
|
Our earnings and cash distributions could affect the market price of MGP's Class A shares.
MGP's Class A shares may trade at prices that are higher or lower than the net asset value per share. To the extent that we retain operating cash flow for investment purposes, working capital reserves or other purposes rather than distributing the cash flows to shareholders, these retained funds, while increasing the value of our underlying assets, may negatively impact the market price of MGP's Class A shares. Our failure to meet market expectations with regard to future earnings and cash distributions could adversely affect the market price of MGP's Class A shares.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
2017
|
|
2016
|
|||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
|
||||||||
First Quarter
|
$
|
27.05
|
|
|
$
|
24.82
|
|
|
N/A
|
|
|
N/A
|
|
|
||
Second Quarter
|
29.60
|
|
|
26.94
|
|
|
$
|
26.90
|
|
(1)
|
$
|
21.76
|
|
(1)
|
||
Third Quarter
|
31.68
|
|
|
28.26
|
|
|
27.11
|
|
|
24.32
|
|
|
||||
Fourth Quarter
|
30.02
|
|
|
28.28
|
|
|
26.32
|
|
|
23.80
|
|
|
|
Distribution Declared
|
||||||
|
2017
|
|
2016
|
||||
First Quarter
|
$
|
0.3875
|
|
|
N/A
|
|
|
Second Quarter
|
0.3950
|
|
|
$
|
0.2632
|
|
|
Third Quarter
|
0.3950
|
|
|
0.3875
|
|
||
Fourth Quarter
|
0.4200
|
|
|
0.3875
|
|
Index
|
4/20/16
|
6/16
|
9/16
|
12/16
|
3/17
|
6/17
|
9/17
|
12/17
|
||||
MGM Growth Properties
|
100.00
|
122.49
|
121.43
|
119.73
|
129.84
|
|
141.99
|
|
148.87
|
|
145.73
|
|
S&P 500
|
100.00
|
102.46
|
106.40
|
110.47
|
117.17
|
|
120.79
|
|
126.20
|
|
134.59
|
|
FTSE NAREIT Equity REITs
|
100.00
|
106.96
|
105.42
|
102.37
|
103.56
|
|
105.14
|
|
106.13
|
|
107.72
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands, except share and per share data)
|
||||||||||||||||||
Statement of Operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
765,695
|
|
|
$
|
467,548
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating income (loss)
|
352,785
|
|
|
153,774
|
|
|
(261,954
|
)
|
|
(246,242
|
)
|
|
(253,873
|
)
|
|||||
Net income (loss)
|
165,990
|
|
|
35,346
|
|
|
(261,954
|
)
|
|
(246,242
|
)
|
|
(253,873
|
)
|
|||||
Net income attributable to Class A shareholders
|
41,775
|
|
|
29,938
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income per Class A share
—
basic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Class A shareholders per share
|
$
|
0.68
|
|
|
$
|
0.52
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||
Weighted average Class A shares outstanding
|
61,733,136
|
|
|
57,502,158
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||||
Net income per Class A share—diluted:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Class A shareholders per share
|
$
|
0.67
|
|
|
$
|
0.52
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||
Weighted average Class A shares outstanding
|
61,916,546
|
|
|
57,751,489
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
As of December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate investments, net
|
$
|
10,021,938
|
|
|
$
|
9,079,678
|
|
|
$
|
7,793,639
|
|
|
$
|
7,867,812
|
|
|
$
|
7,963,570
|
|
Total assets
|
10,351,120
|
|
|
9,506,740
|
|
|
7,793,639
|
|
|
7,867,812
|
|
|
7,963,570
|
|
|||||
Debt, net
|
3,934,628
|
|
|
3,621,942
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Class A shareholders’ equity
|
1,624,650
|
|
|
1,333,817
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Noncontrolling interest
|
4,443,089
|
|
|
4,274,444
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total shareholders' equity/Predecessor net Parent investment
|
6,067,739
|
|
|
5,608,261
|
|
|
6,058,959
|
|
|
6,127,347
|
|
|
6,296,856
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
482,578
|
|
|
$
|
297,781
|
|
|
$
|
(58,473
|
)
|
|
$
|
(59,980
|
)
|
|
$
|
(59,485
|
)
|
Net cash used in investing activities
|
(462,988
|
)
|
|
(138,987
|
)
|
|
(129,308
|
)
|
|
(90,504
|
)
|
|
(78,528
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(120,360
|
)
|
|
201,698
|
|
|
187,781
|
|
|
150,484
|
|
|
138,013
|
|
|||||
Dividends declared per Class A share
|
1.60
|
|
|
1.04
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands, except unit and per unit data)
|
||||||||||||||||||
Statement of Operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
765,695
|
|
|
$
|
467,548
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating income (loss)
|
352,785
|
|
|
153,774
|
|
|
(261,954
|
)
|
|
(246,242
|
)
|
|
(253,873
|
)
|
|||||
Net income (loss)
|
165,990
|
|
|
35,346
|
|
|
(261,954
|
)
|
|
(246,242
|
)
|
|
(253,873
|
)
|
|||||
Net income per Operating Partnership unit
—
basic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per unit
|
$
|
0.67
|
|
|
$
|
0.52
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||
Weighted average Operating Partnership units outstanding
|
249,451,258
|
|
|
232,181,070
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||||
Net income per Operating Partnership unit—diluted:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per unit
|
$
|
0.66
|
|
|
$
|
0.52
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||
Weighted average Operating Partnership units outstanding
|
249,634,668
|
|
|
232,430,401
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate investments, net
|
$
|
10,021,938
|
|
|
$
|
9,079,678
|
|
|
$
|
7,793,639
|
|
|
$
|
7,867,812
|
|
|
$
|
7,963,570
|
|
Total assets
|
10,351,120
|
|
|
9,506,740
|
|
|
7,793,639
|
|
|
7,867,812
|
|
|
7,963,570
|
|
|||||
Debt, net
|
3,934,628
|
|
|
3,621,942
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Partners’ capital/Predecessor net Parent investment
|
6,067,739
|
|
|
5,608,261
|
|
|
6,058,959
|
|
|
6,127,347
|
|
|
6,296,856
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands, except per unit data)
|
||||||||||||||||||
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
482,578
|
|
|
$
|
297,781
|
|
|
$
|
(58,473
|
)
|
|
$
|
(59,980
|
)
|
|
$
|
(59,485
|
)
|
Net cash used in investing activities
|
(462,988
|
)
|
|
(138,987
|
)
|
|
(129,308
|
)
|
|
(90,504
|
)
|
|
(78,528
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(120,360
|
)
|
|
201,698
|
|
|
187,781
|
|
|
150,484
|
|
|
138,013
|
|
|||||
Distributions declared per Operating Partnership unit
|
1.60
|
|
|
1.04
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Year Ended
|
|
Less: Activity
|
|
IPO Date to
|
||||||
|
December 31, 2016
|
|
prior to IPO Date
|
|
December 31, 2016
|
||||||
|
(in thousands, except unit and per unit amounts)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Rental revenue
|
$
|
419,239
|
|
|
$
|
—
|
|
|
$
|
419,239
|
|
Tenant reimbursements and other
|
48,309
|
|
|
—
|
|
|
48,309
|
|
|||
|
467,548
|
|
|
—
|
|
|
467,548
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Depreciation
|
220,667
|
|
|
63,675
|
|
|
156,992
|
|
|||
Property transactions, net
|
4,684
|
|
|
874
|
|
|
3,810
|
|
|||
Reimbursable expenses
|
68,063
|
|
|
19,834
|
|
|
48,229
|
|
|||
Amortization of above market lease, net
|
286
|
|
|
—
|
|
|
286
|
|
|||
Acquisition-related expenses
|
10,178
|
|
|
—
|
|
|
10,178
|
|
|||
General and administrative
|
9,896
|
|
|
—
|
|
|
9,896
|
|
|||
|
313,774
|
|
|
84,383
|
|
|
229,391
|
|
|||
Operating income (loss)
|
153,774
|
|
|
(84,383
|
)
|
|
238,157
|
|
|||
Non-operating income (expense)
|
|
|
|
|
|
||||||
Interest income
|
774
|
|
|
—
|
|
|
774
|
|
|||
Interest expense
|
(116,212
|
)
|
|
—
|
|
|
(116,212
|
)
|
|||
Other non-operating
|
(726
|
)
|
|
—
|
|
|
(726
|
)
|
|||
|
(116,164
|
)
|
|
—
|
|
|
(116,164
|
)
|
|||
Income (loss) before income taxes
|
37,610
|
|
|
(84,383
|
)
|
|
121,993
|
|
|||
Provision for income taxes
|
(2,264
|
)
|
|
—
|
|
|
(2,264
|
)
|
|||
Net income (loss)
|
35,346
|
|
|
(84,383
|
)
|
|
119,729
|
|
|||
Less: Net (income) loss attributable to noncontrolling interest
|
$
|
(5,408
|
)
|
|
$
|
84,383
|
|
|
$
|
(89,791
|
)
|
Net income attributable to Class A shareholders
|
$
|
29,938
|
|
|
$
|
—
|
|
|
$
|
29,938
|
|
|
Year Ended December 31,
|
|
IPO Date to
|
||||||||
|
2017
|
|
2016
|
|
December 31, 2016
|
||||||
Net income (loss)
|
$
|
165,990
|
|
|
$
|
35,346
|
|
|
$
|
119,729
|
|
Depreciation
|
260,455
|
|
|
220,667
|
|
|
156,992
|
|
|||
Property transactions, net
|
34,022
|
|
|
4,684
|
|
|
3,810
|
|
|||
Funds From Operations
|
460,467
|
|
|
260,697
|
|
|
280,531
|
|
|||
Amortization and write-off of financing costs and cash flow hedge amortization
|
12,511
|
|
|
7,195
|
|
|
7,195
|
|
|||
Non-cash compensation expense
|
1,336
|
|
|
510
|
|
|
510
|
|
|||
Net effect of straight-line rent and deferred revenue amortization
|
4,063
|
|
|
(1,819
|
)
|
|
(1,819
|
)
|
|||
Acquisition-related expenses
|
17,304
|
|
|
10,178
|
|
|
10,178
|
|
|||
Amortization of above market lease, net
|
686
|
|
|
286
|
|
|
286
|
|
|||
Provision for income taxes
|
4,906
|
|
|
2,264
|
|
|
2,264
|
|
|||
Adjusted Funds From Operations
|
501,273
|
|
|
279,311
|
|
|
299,145
|
|
|||
Interest income
|
(3,907
|
)
|
|
(774
|
)
|
|
(774
|
)
|
|||
Interest expense
|
184,175
|
|
|
116,212
|
|
|
116,212
|
|
|||
Amortization of financing costs and cash flow hedges
|
(11,713
|
)
|
|
(7,195
|
)
|
|
(7,195
|
)
|
|||
Adjusted EBITDA
|
$
|
669,828
|
|
|
$
|
387,554
|
|
|
$
|
407,388
|
|
|
Year Ended December 31,
|
|
IPO Date to
|
||||
|
2017
|
|
December 31, 2016
|
||||
Weighted average Operating Partnership units outstanding
|
|
|
|
||||
Basic
|
249,451,258
|
|
|
232,181,070
|
|
||
Diluted
|
249,634,668
|
|
|
232,430,401
|
|
||
|
|
|
|
||||
Net income per Operating Partnership units outstanding
|
|
|
|
||||
Basic
|
$
|
0.67
|
|
|
$
|
0.52
|
|
Diluted
|
$
|
0.66
|
|
|
$
|
0.52
|
|
|
|
|
|
||||
FFO per Operating Partnership unit
|
|
|
|
||||
Diluted
|
$
|
1.84
|
|
|
$
|
1.21
|
|
AFFO per Operating Partnership unit
|
|
|
|
||||
Diluted
|
$
|
2.01
|
|
|
$
|
1.29
|
|
Declaration Date
|
|
Record Date
|
|
Distribution/ Dividend Per Unit/ Share
|
|
Payment Date
|
|
Operating Partnership Distribution Amount
|
|
MGP Class A Dividend Amount
|
||||||
(in thousands, except per unit and per share amount)
|
||||||||||||||||
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
|
|
September 15, 2017
|
|
September 29, 2017
|
|
$
|
0.3950
|
|
|
October 13, 2017
|
|
$
|
101,222
|
|
|
$
|
28,004
|
|
December 15, 2017
|
|
December 29, 2017
|
|
$
|
0.4200
|
|
|
January 16, 2018
|
|
$
|
111,733
|
|
|
$
|
29,777
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2016
|
|
|
|
|
|
|
|
|
|
|
||||||
June 16, 2016
|
|
June 30, 2016
|
|
$
|
0.2632
|
|
(1)
|
July 15, 2016
|
|
$
|
56,720
|
|
|
$
|
15,134
|
|
September 15, 2016
|
|
September 30, 2016
|
|
$
|
0.3875
|
|
|
October 14, 2016
|
|
$
|
94,109
|
|
|
$
|
22,281
|
|
December 15, 2016
|
|
December 30, 2016
|
|
$
|
0.3875
|
|
|
January 16, 2017
|
|
$
|
94,109
|
|
|
$
|
22,281
|
|
|
Payments due by Period
|
||||||||||||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Long-term debt
|
$
|
33.5
|
|
|
$
|
33.5
|
|
|
$
|
33.5
|
|
|
$
|
247.3
|
|
|
$
|
18.5
|
|
|
$
|
3,625.1
|
|
|
$
|
3,991.4
|
|
Estimated interest payments on long-term debt
(1)
|
181.5
|
|
|
182.9
|
|
|
181.5
|
|
|
170.8
|
|
|
163.6
|
|
|
287.2
|
|
|
1,167.5
|
|
|||||||
Ground leases
(2)
|
16.2
|
|
|
17.6
|
|
|
19.1
|
|
|
23.0
|
|
|
23.0
|
|
|
1,303.1
|
|
|
1,402.0
|
|
|||||||
Total
|
$
|
231.2
|
|
|
$
|
234.0
|
|
|
$
|
234.1
|
|
|
$
|
441.1
|
|
|
$
|
205.1
|
|
|
$
|
5,215.4
|
|
|
$
|
6,560.9
|
|
(1)
|
Estimated interest payments are based on principal amounts and expected maturities of debt outstanding at December 31, 2017 and LIBOR rates as of December 31, 2017 for our senior credit facility. We have adjusted estimated interest expense to include the impact of our interest rate swap agreements with a $1.2 billion notional amount that were entered into in December 2016 and January 2017 and were repriced in May 2017, for which we pay an average combined fixed rate of 1.844% and receive the 1-month LIBOR rate.
|
(2)
|
Non-cancelable commitments under ground leases assigned to the Company in the Borgata Transaction extending through 2070 and MGM National Harbor Transaction extending through 2082 as discussed in Note 3 to the accompanying financial statements. Such amounts will be paid by the Tenant pursuant to the Master Lease through 2046.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
||||||||||||||||
|
Debt maturing in
|
|
December 31,
|
||||||||||||||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
|
2017
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Fixed-rate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,900.0
|
|
|
$
|
1,900.0
|
|
|
$
|
1,967.6
|
|
Average interest rate
|
|
|
|
|
|
|
|
|
|
|
5.122
|
%
|
|
5.122
|
%
|
|
|
||||||||||||||
Variable rate
|
$
|
33.5
|
|
|
$
|
33.5
|
|
|
$
|
33.5
|
|
|
$
|
247.3
|
|
|
$
|
18.5
|
|
|
$
|
1,725.1
|
|
|
$
|
2,091.4
|
|
|
$
|
2,095.9
|
|
Average interest rate
|
4.042
|
%
|
|
4.042
|
%
|
|
4.042
|
%
|
|
4.280
|
%
|
|
3.818
|
%
|
|
3.818
|
%
|
|
3.883
|
%
|
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
|
Securities to be issued
upon exercise of
outstanding options,
warrants and rights
|
|
Weighted average
exercise price of
outstanding options,
warrants and rights
|
|
Securities available for
future issuance under
equity compensation
plans
|
|||
|
(in thousands)
|
|||||||
Equity compensation plans approved by
shareholders
(1)
|
244
|
|
|
N/A
|
|
|
2,085
|
|
Equity compensation plans not approved by
shareholders
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
244
|
|
|
N/A
|
|
|
2,085
|
|
(1)
|
As of
December 31, 2017
we had restricted share units, performance share units and deferred share units outstanding. These awards do not have an exercise price. The amount included in the securities outstanding above for performance share units assumes that each target price is achieved.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
(a)(1).
|
Financial Statements.
|
Included in Part II of this Report:
|
|
|
|
||
|
||
|
||
|
||
|
||
MGM Growth Properties LLC:
|
|
|
|
||
Years Ended December 31, 2017, 2016, and 2015
|
|
|
|
||
|
||
|
||
|
||
MGM Growth Properties Operating Partnership LP:
|
|
|
|
||
Years Ended December 31, 2017, 2016, and 2015
|
|
|
|
||
|
||
|
||
|
||
|
(a)(2).
|
Financial Statement Schedule.
|
MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP:
|
|
|
|
(a)(3).
|
Exhibits.
|
Exhibit
Number |
|
Description
|
|
||
|
Exhibit
Number |
|
Description
|
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
||
|
|
|
|
||
|
||
|
||
|
||
|
Exhibit
Number |
|
Description
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
Exhibit
Number |
|
Description
|
|
||
|
||
101
|
|
The following information from each of the MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP’s Annual Report on Form 10-K for the year ended December 31, 2017 formatted in eXtensible Business Reporting Language: (i) Consolidated Balance Sheets at December 31, 2017 and December 31, 2016; (ii) Combined and Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015; (iii) Combined and Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2017, 2016 and 2015; (iv) Combined and Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015; (v) Consolidated Statements of Shareholders’ Equity (for MGM Growth Properties LLC) or of Partners’ Capital (for MGM Growth Properties Operating Partnership LP) for the years ended December 31, 2017, 2016 and 2015; (vi) Notes to the Combined and Consolidated Financial Statements; and (vii) Financial Statement Schedule
|
*
|
Management contract or compensatory plan or arrangement.
|
**
|
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.
|
•
|
Hiring skilled accounting personnel and training them appropriately;
|
•
|
Written accounting policies;
|
•
|
Written documentation of accounting systems and procedures;
|
•
|
Segregation of incompatible duties;
|
•
|
Internal audit function to monitor the effectiveness of the system of internal control; and
|
•
|
Oversight by an independent Audit Committee of the Board of Directors.
|
•
|
Hiring skilled accounting personnel and training them appropriately;
|
•
|
Written accounting policies;
|
•
|
Written documentation of accounting systems and procedures;
|
•
|
Segregation of incompatible duties;
|
•
|
Internal audit function to monitor the effectiveness of the system of internal control; and
|
•
|
Oversight by an independent Audit Committee of the Board of Directors.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS
|
|||||||
Real estate investments, net
|
$
|
10,021,938
|
|
|
$
|
9,079,678
|
|
Cash and cash equivalents
|
259,722
|
|
|
360,492
|
|
||
Tenant and other receivables, net
|
6,385
|
|
|
9,503
|
|
||
Prepaid expenses and other assets
|
18,487
|
|
|
10,906
|
|
||
Above market lease, asset
|
44,588
|
|
|
46,161
|
|
||
Total assets
|
$
|
10,351,120
|
|
|
$
|
9,506,740
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|||||||
Liabilities
|
|
|
|
||||
Debt, net
|
$
|
3,934,628
|
|
|
$
|
3,621,942
|
|
Due to MGM Resorts International and affiliates
|
962
|
|
|
166
|
|
||
Accounts payable, accrued expenses and other liabilities
|
10,240
|
|
|
10,478
|
|
||
Above market lease, liability
|
47,069
|
|
|
47,957
|
|
||
Accrued interest
|
22,565
|
|
|
26,137
|
|
||
Dividend payable
|
111,733
|
|
|
94,109
|
|
||
Deferred revenue
|
127,640
|
|
|
72,322
|
|
||
Deferred income taxes, net
|
28,544
|
|
|
25,368
|
|
||
Total liabilities
|
4,283,381
|
|
|
3,898,479
|
|
||
Commitments and contingencies (
Note 13
)
|
|
|
|
||||
Shareholders' equity
|
|
|
|
||||
Class A shares: no par value, 1,000,000,000 shares authorized, 70,896,795 and 57,500,000 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
1,716,490
|
|
|
1,363,130
|
|
||
Accumulated deficit
|
(94,948
|
)
|
|
(29,758
|
)
|
||
Accumulated other comprehensive income
|
3,108
|
|
|
445
|
|
||
Total Class A shareholders' equity
|
1,624,650
|
|
|
1,333,817
|
|
||
Noncontrolling interest
|
4,443,089
|
|
|
4,274,444
|
|
||
Total shareholders' equity
|
6,067,739
|
|
|
5,608,261
|
|
||
Total liabilities and shareholders' equity
|
$
|
10,351,120
|
|
|
$
|
9,506,740
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
|
|
|
|
|
||||||
Rental revenue
|
$
|
675,089
|
|
|
$
|
419,239
|
|
|
$
|
—
|
|
Tenant reimbursements and other
|
90,606
|
|
|
48,309
|
|
|
—
|
|
|||
|
765,695
|
|
|
467,548
|
|
|
—
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Depreciation
|
260,455
|
|
|
220,667
|
|
|
196,816
|
|
|||
Property transactions, net
|
34,022
|
|
|
4,684
|
|
|
6,665
|
|
|||
Reimbursable expenses
|
88,254
|
|
|
68,063
|
|
|
58,473
|
|
|||
Amortization of above market lease, net
|
686
|
|
|
286
|
|
|
—
|
|
|||
Acquisition-related expenses
|
17,304
|
|
|
10,178
|
|
|
—
|
|
|||
General and administrative
|
12,189
|
|
|
9,896
|
|
|
—
|
|
|||
|
412,910
|
|
|
313,774
|
|
|
261,954
|
|
|||
Operating income (loss)
|
352,785
|
|
|
153,774
|
|
|
(261,954
|
)
|
|||
Non-operating income (expense)
|
|
|
|
|
|
||||||
Interest income
|
3,907
|
|
|
774
|
|
|
—
|
|
|||
Interest expense
|
(184,175
|
)
|
|
(116,212
|
)
|
|
—
|
|
|||
Other non-operating
|
(1,621
|
)
|
|
(726
|
)
|
|
—
|
|
|||
|
(181,889
|
)
|
|
(116,164
|
)
|
|
—
|
|
|||
Income (loss) before income taxes
|
170,896
|
|
|
37,610
|
|
|
(261,954
|
)
|
|||
Provision for income taxes
|
(4,906
|
)
|
|
(2,264
|
)
|
|
—
|
|
|||
Net income (loss)
|
165,990
|
|
|
35,346
|
|
|
(261,954
|
)
|
|||
Less: Net (income) attributable to noncontrolling interest
|
(124,215
|
)
|
|
(5,408
|
)
|
|
261,954
|
|
|||
Net income attributable to Class A shareholders
|
$
|
41,775
|
|
|
$
|
29,938
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Weighted average Class A shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
61,733,136
|
|
|
57,502,158
|
|
|
N/A
|
|
|||
Diluted
|
61,916,546
|
|
|
57,751,489
|
|
|
N/A
|
|
|||
|
|
|
|
|
|
||||||
Per Class A share data
|
|
|
|
|
|
||||||
Net income per Class A share (basic)
|
$
|
0.68
|
|
|
$
|
0.52
|
|
|
N/A
|
|
|
Net income per Class A share (diluted)
|
$
|
0.67
|
|
|
$
|
0.52
|
|
|
N/A
|
|
|
57,751,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
165,990
|
|
|
$
|
35,346
|
|
|
$
|
(261,954
|
)
|
Other comprehensive income
|
|
|
|
|
|
||||||
Unrealized gain on cash flow hedges
|
9,782
|
|
|
1,879
|
|
|
—
|
|
|||
Other comprehensive income
|
9,782
|
|
|
1,879
|
|
|
—
|
|
|||
Comprehensive income (loss)
|
175,772
|
|
|
37,225
|
|
|
(261,954
|
)
|
|||
Less: Comprehensive income attributable to noncontrolling interests
|
(131,236
|
)
|
|
(6,842
|
)
|
|
—
|
|
|||
Comprehensive income (loss) attributable to Class A shareholders
|
$
|
44,536
|
|
|
$
|
30,383
|
|
|
$
|
(261,954
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
165,990
|
|
|
$
|
35,346
|
|
|
$
|
(261,954
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
260,455
|
|
|
220,667
|
|
|
196,816
|
|
|||
Property transactions, net
|
34,022
|
|
|
4,684
|
|
|
6,665
|
|
|||
Amortization and write-off of deferred financing costs and debt discount
|
12,158
|
|
|
7,195
|
|
|
—
|
|
|||
Amortization related to above market lease, net
|
686
|
|
|
286
|
|
|
—
|
|
|||
Provision for income taxes
|
4,906
|
|
|
2,264
|
|
|
—
|
|
|||
Straight-line rental revenues
|
6,414
|
|
|
(1,739
|
)
|
|
—
|
|
|||
Amortization of deferred revenue
|
(2,352
|
)
|
|
(80
|
)
|
|
—
|
|
|||
Share-based compensation
|
1,336
|
|
|
510
|
|
|
—
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Tenant and other receivables, net
|
3,118
|
|
|
(9,503
|
)
|
|
—
|
|
|||
Prepaid expenses and other assets
|
(1,537
|
)
|
|
6,747
|
|
|
—
|
|
|||
Due to MGM Resorts International and affiliates
|
796
|
|
|
166
|
|
|
—
|
|
|||
Accounts payable, accrued expenses and other liabilities
|
158
|
|
|
5,101
|
|
|
—
|
|
|||
Accrued interest
|
(3,572
|
)
|
|
26,137
|
|
|
—
|
|
|||
Net cash provided by (used in) operating activities
|
482,578
|
|
|
297,781
|
|
|
(58,473
|
)
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Capital expenditures for property and equipment
|
(488
|
)
|
|
(138,987
|
)
|
|
(129,308
|
)
|
|||
MGM National Harbor Transaction
|
(462,500
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(462,988
|
)
|
|
(138,987
|
)
|
|
(129,308
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of debt
|
350,000
|
|
|
3,700,000
|
|
|
—
|
|
|||
Deferred financing costs
|
(5,598
|
)
|
|
(77,163
|
)
|
|
—
|
|
|||
Repayment of assumed debt and bridge facilities
|
(425,000
|
)
|
|
(4,544,850
|
)
|
|
—
|
|
|||
Repayment of debt principal
|
(41,875
|
)
|
|
(16,750
|
)
|
|
—
|
|
|||
Issuance of Class A shares
|
404,685
|
|
|
1,207,500
|
|
|
—
|
|
|||
Class A share issuance costs
|
(17,137
|
)
|
|
(75,032
|
)
|
|
—
|
|
|||
Dividends and distributions paid
|
(385,435
|
)
|
|
(150,829
|
)
|
|
—
|
|
|||
Net cash transfers from Parent
|
—
|
|
|
158,822
|
|
|
187,781
|
|
|||
Net cash provided by (used in) financing activities
|
(120,360
|
)
|
|
201,698
|
|
|
187,781
|
|
|||
Cash and cash equivalents
|
|
|
|
|
|
||||||
Net increase (decrease) for the period
|
(100,770
|
)
|
|
360,492
|
|
|
—
|
|
|||
Balance, beginning of period
|
360,492
|
|
|
—
|
|
|
—
|
|
|||
Balance, end of period
|
$
|
259,722
|
|
|
$
|
360,492
|
|
|
$
|
—
|
|
Supplemental cash flow disclosures
|
|
|
|
|
|
||||||
Interest paid
|
$
|
176,033
|
|
|
$
|
82,880
|
|
|
$
|
—
|
|
Non-cash investing and financing activities
|
|
|
|
|
|
||||||
Non-Normal Tenant Improvements by Tenant
|
$
|
52,995
|
|
|
$
|
72,402
|
|
|
$
|
—
|
|
Accrual of dividend and distribution payable to Class A shareholders and Operating Partnership unit holders
|
$
|
111,733
|
|
|
$
|
94,109
|
|
|
$
|
—
|
|
MGM National Harbor Transaction net assets acquired
|
$
|
721,409
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Borgata Transaction net assets acquired
|
$
|
—
|
|
|
$
|
1,273,230
|
|
|
$
|
—
|
|
|
Class A Shares
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Predecessor Net Parent Investment
|
|
Total Class A Shareholders' Equity
|
|
Noncontrolling Interest
|
|
Total Shareholders' Equity
|
||||||||||||||||
Balance at January 1, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,127,347
|
|
|
$
|
6,127,347
|
|
|
$
|
—
|
|
|
$
|
6,127,347
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(261,954
|
)
|
|
(261,954
|
)
|
|
—
|
|
|
(261,954
|
)
|
||||||||
Net transfers from Parent
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
193,566
|
|
|
193,566
|
|
|
—
|
|
|
193,566
|
|
||||||||
Balance at December 31, 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,058,959
|
|
|
6,058,959
|
|
|
—
|
|
|
6,058,959
|
|
||||||||
Net loss - January 1, 2016 to April 24, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(84,383
|
)
|
|
(84,383
|
)
|
|
—
|
|
|
(84,383
|
)
|
||||||||
Assumption of bridge facilities from MGM
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,000,000
|
)
|
|
(4,000,000
|
)
|
|
—
|
|
|
(4,000,000
|
)
|
||||||||
Other contributions from MGM
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,893,502
|
|
|
1,893,502
|
|
|
—
|
|
|
1,893,502
|
|
||||||||
Noncontrolling interest and additional paid-in capital effective April 24, 2016
|
—
|
|
|
201,785
|
|
|
—
|
|
|
—
|
|
|
(3,868,078
|
)
|
|
(3,666,293
|
)
|
|
3,666,293
|
|
|
—
|
|
||||||||
Issuance of Class A shares
|
—
|
|
|
1,207,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,207,500
|
|
|
—
|
|
|
1,207,500
|
|
||||||||
Initial public offering costs
|
—
|
|
|
(75,032
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75,032
|
)
|
|
—
|
|
|
(75,032
|
)
|
||||||||
Borgata Transaction
|
—
|
|
|
28,753
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,753
|
|
|
699,626
|
|
|
728,379
|
|
||||||||
Net income - April 25, 2016 to December 31, 2016
|
—
|
|
|
—
|
|
|
29,938
|
|
|
—
|
|
|
—
|
|
|
29,938
|
|
|
89,791
|
|
|
119,729
|
|
||||||||
Other comprehensive income - cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
445
|
|
|
—
|
|
|
445
|
|
|
1,434
|
|
|
1,879
|
|
||||||||
Share-based compensation
|
—
|
|
|
124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124
|
|
|
386
|
|
|
510
|
|
||||||||
Deemed contribution - tax sharing agreement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,156
|
|
|
2,156
|
|
||||||||
Dividends and distributions declared and paid
|
—
|
|
|
—
|
|
|
(59,696
|
)
|
|
—
|
|
|
—
|
|
|
(59,696
|
)
|
|
(185,242
|
)
|
|
(244,938
|
)
|
||||||||
Balance at December 31, 2016
|
—
|
|
|
1,363,130
|
|
|
(29,758
|
)
|
|
445
|
|
|
—
|
|
|
1,333,817
|
|
|
4,274,444
|
|
|
5,608,261
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
41,775
|
|
|
—
|
|
|
—
|
|
|
41,775
|
|
|
124,215
|
|
|
165,990
|
|
||||||||
Other comprehensive income - cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
2,761
|
|
|
—
|
|
|
2,761
|
|
|
7,021
|
|
|
9,782
|
|
||||||||
MGM National Harbor Transaction
|
—
|
|
|
19,372
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
19,383
|
|
|
277,026
|
|
|
296,409
|
|
||||||||
Issuance of Class A shares
|
—
|
|
|
333,742
|
|
|
(4,125
|
)
|
|
(109
|
)
|
|
—
|
|
|
329,508
|
|
|
58,040
|
|
|
387,548
|
|
||||||||
Share-based compensation
|
—
|
|
|
334
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
334
|
|
|
1,002
|
|
|
1,336
|
|
||||||||
Deemed contribution - tax sharing agreement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,730
|
|
|
1,730
|
|
||||||||
Dividends and distributions declared and paid
|
—
|
|
|
—
|
|
|
(102,840
|
)
|
|
—
|
|
|
—
|
|
|
(102,840
|
)
|
|
(300,219
|
)
|
|
(403,059
|
)
|
||||||||
Other
|
—
|
|
|
(88
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88
|
)
|
|
(170
|
)
|
|
(258
|
)
|
||||||||
Balance at December 31, 2017
|
$
|
—
|
|
|
$
|
1,716,490
|
|
|
$
|
(94,948
|
)
|
|
$
|
3,108
|
|
|
$
|
—
|
|
|
$
|
1,624,650
|
|
|
$
|
4,443,089
|
|
|
$
|
6,067,739
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS
|
|||||||
Real estate investments, net
|
$
|
10,021,938
|
|
|
$
|
9,079,678
|
|
Cash and cash equivalents
|
259,722
|
|
|
360,492
|
|
||
Tenant and other receivables, net
|
6,385
|
|
|
9,503
|
|
||
Prepaid expenses and other assets
|
18,487
|
|
|
10,906
|
|
||
Above market lease, asset
|
44,588
|
|
|
46,161
|
|
||
Total assets
|
$
|
10,351,120
|
|
|
$
|
9,506,740
|
|
|
|
|
|
||||
LIABILITIES AND PARTNERS' CAPITAL
|
|||||||
Liabilities
|
|
|
|
||||
Debt, net
|
$
|
3,934,628
|
|
|
$
|
3,621,942
|
|
Due to MGM Resorts International and affiliates
|
962
|
|
|
166
|
|
||
Accounts payable, accrued expenses and other liabilities
|
10,240
|
|
|
10,478
|
|
||
Above market lease, liability
|
47,069
|
|
|
47,957
|
|
||
Accrued interest
|
22,565
|
|
|
26,137
|
|
||
Distribution payable
|
111,733
|
|
|
94,109
|
|
||
Deferred revenue
|
127,640
|
|
|
72,322
|
|
||
Deferred income taxes, net
|
28,544
|
|
|
25,368
|
|
||
Total liabilities
|
4,283,381
|
|
|
3,898,479
|
|
||
Commitments and contingencies (
Note 13
)
|
|
|
|
||||
Partners’ capital
|
|
|
|
||||
General partner
|
—
|
|
|
—
|
|
||
Limited partners: 266,030,918 and 242,862,136 Operating Partnership units issued and outstanding as of December 31, 2017 and December 31, 2016, respectively.
|
6,067,739
|
|
|
5,608,261
|
|
||
Total partners’ capital
|
6,067,739
|
|
|
5,608,261
|
|
||
Total liabilities and partners’ capital
|
$
|
10,351,120
|
|
|
$
|
9,506,740
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
|
|
|
|
|
||||||
Rental revenue
|
$
|
675,089
|
|
|
$
|
419,239
|
|
|
$
|
—
|
|
Tenant reimbursements and other
|
90,606
|
|
|
48,309
|
|
|
—
|
|
|||
|
765,695
|
|
|
467,548
|
|
|
—
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Depreciation
|
260,455
|
|
|
220,667
|
|
|
196,816
|
|
|||
Property transactions, net
|
34,022
|
|
|
4,684
|
|
|
6,665
|
|
|||
Reimbursable expenses
|
88,254
|
|
|
68,063
|
|
|
58,473
|
|
|||
Amortization of above market lease, net
|
686
|
|
|
286
|
|
|
—
|
|
|||
Acquisition-related expenses
|
17,304
|
|
|
10,178
|
|
|
—
|
|
|||
General and administrative
|
12,189
|
|
|
9,896
|
|
|
—
|
|
|||
|
412,910
|
|
|
313,774
|
|
|
261,954
|
|
|||
Operating income (loss)
|
352,785
|
|
|
153,774
|
|
|
(261,954
|
)
|
|||
Non-operating income (expense)
|
|
|
|
|
|
||||||
Interest income
|
3,907
|
|
|
774
|
|
|
—
|
|
|||
Interest expense
|
(184,175
|
)
|
|
(116,212
|
)
|
|
—
|
|
|||
Other non-operating
|
(1,621
|
)
|
|
(726
|
)
|
|
—
|
|
|||
|
(181,889
|
)
|
|
(116,164
|
)
|
|
—
|
|
|||
Income (loss) before income taxes
|
170,896
|
|
|
37,610
|
|
|
(261,954
|
)
|
|||
Provision for income taxes
|
(4,906
|
)
|
|
(2,264
|
)
|
|
—
|
|
|||
Net income (loss)
|
$
|
165,990
|
|
|
$
|
35,346
|
|
|
$
|
(261,954
|
)
|
|
|
|
|
|
|
||||||
Weighted average Operating Partnership units outstanding:
|
|
|
|
|
|
||||||
Basic
|
249,451,258
|
|
|
232,181,070
|
|
|
N/A
|
|
|||
Diluted
|
249,634,668
|
|
|
232,430,401
|
|
|
N/A
|
|
|||
|
|
|
|
|
|
||||||
Per Operating Partnership unit data
|
|
|
|
|
|
||||||
Net income per Operating Partnership unit (basic)
|
$
|
0.67
|
|
|
$
|
0.52
|
|
|
N/A
|
|
|
Net income per Operating Partnership unit (diluted)
|
$
|
0.66
|
|
|
$
|
0.52
|
|
|
N/A
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
165,990
|
|
|
$
|
35,346
|
|
|
$
|
(261,954
|
)
|
Unrealized gain on cash flow hedges
|
9,782
|
|
|
1,879
|
|
|
—
|
|
|||
Comprehensive income (loss)
|
$
|
175,772
|
|
|
$
|
37,225
|
|
|
$
|
(261,954
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
165,990
|
|
|
$
|
35,346
|
|
|
$
|
(261,954
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
260,455
|
|
|
220,667
|
|
|
196,816
|
|
|||
Property transactions, net
|
34,022
|
|
|
4,684
|
|
|
6,665
|
|
|||
Amortization and write-off of deferred financing costs and debt discount
|
12,158
|
|
|
7,195
|
|
|
—
|
|
|||
Amortization related to above market lease, net
|
686
|
|
|
286
|
|
|
—
|
|
|||
Provision for income taxes
|
4,906
|
|
|
2,264
|
|
|
—
|
|
|||
Straight-line rental revenues
|
6,414
|
|
|
(1,739
|
)
|
|
—
|
|
|||
Amortization of deferred revenue
|
(2,352
|
)
|
|
(80
|
)
|
|
—
|
|
|||
Share-based compensation
|
1,336
|
|
|
510
|
|
|
—
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Tenant and other receivables, net
|
3,118
|
|
|
(9,503
|
)
|
|
—
|
|
|||
Prepaid expenses and other assets
|
(1,537
|
)
|
|
6,747
|
|
|
—
|
|
|||
Due to MGM Resorts International and affiliates
|
796
|
|
|
166
|
|
|
—
|
|
|||
Accounts payable, accrued expenses and other liabilities
|
158
|
|
|
5,101
|
|
|
—
|
|
|||
Accrued interest
|
(3,572
|
)
|
|
26,137
|
|
|
—
|
|
|||
Net cash provided by (used in) operating activities
|
482,578
|
|
|
297,781
|
|
|
(58,473
|
)
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Capital expenditures for property and equipment
|
(488
|
)
|
|
(138,987
|
)
|
|
(129,308
|
)
|
|||
MGM National Harbor Transaction
|
(462,500
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(462,988
|
)
|
|
(138,987
|
)
|
|
(129,308
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of debt
|
350,000
|
|
|
3,700,000
|
|
|
—
|
|
|||
Deferred financing costs
|
(5,598
|
)
|
|
(77,163
|
)
|
|
—
|
|
|||
Repayment of assumed debt and bridge facilities
|
(425,000
|
)
|
|
(4,544,850
|
)
|
|
—
|
|
|||
Repayment of debt principal
|
(41,875
|
)
|
|
(16,750
|
)
|
|
—
|
|
|||
Proceeds from issuance of Operating Partnership units by MGP
|
387,548
|
|
|
1,132,468
|
|
|
—
|
|
|||
Distributions paid
|
(385,435
|
)
|
|
(150,829
|
)
|
|
—
|
|
|||
Net cash transfers from Parent
|
—
|
|
|
158,822
|
|
|
187,781
|
|
|||
Net cash provided by (used in) financing activities
|
(120,360
|
)
|
|
201,698
|
|
|
187,781
|
|
|||
Cash and cash equivalents
|
|
|
|
|
|
||||||
Net increase (decrease) for the period
|
(100,770
|
)
|
|
360,492
|
|
|
—
|
|
|||
Balance, beginning of period
|
360,492
|
|
|
—
|
|
|
—
|
|
|||
Balance, end of period
|
$
|
259,722
|
|
|
$
|
360,492
|
|
|
$
|
—
|
|
Supplemental cash flow disclosures
|
|
|
|
|
|
||||||
Interest paid
|
$
|
176,033
|
|
|
$
|
82,880
|
|
|
$
|
—
|
|
Non-cash investing and financing activities
|
|
|
|
|
|
||||||
Non-Normal Tenant Improvements by Tenant
|
$
|
52,995
|
|
|
$
|
72,402
|
|
|
$
|
—
|
|
Accrual of distribution payable to Operating Partnership unit holders
|
$
|
111,733
|
|
|
$
|
94,109
|
|
|
$
|
—
|
|
MGM National Harbor Transaction net assets acquired
|
$
|
721,409
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Borgata Transaction net assets acquired
|
$
|
—
|
|
|
$
|
1,273,230
|
|
|
$
|
—
|
|
|
General Partner
|
|
Limited Partners
|
|
Predecessor Net Parent Investment
|
|
Total
Partners' Capital |
||||||||
Balance at January 1, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,127,347
|
|
|
$
|
6,127,347
|
|
Net loss
|
—
|
|
|
—
|
|
|
(261,954
|
)
|
|
(261,954
|
)
|
||||
Net transfers from Parent
|
—
|
|
|
—
|
|
|
193,566
|
|
|
193,566
|
|
||||
Balance at December 31, 2015
|
—
|
|
|
—
|
|
|
6,058,959
|
|
|
6,058,959
|
|
||||
Net loss - January 1, 2016 to April 24, 2016
|
—
|
|
|
—
|
|
|
(84,383
|
)
|
|
(84,383
|
)
|
||||
Assumption of bridge facilities from MGM
|
—
|
|
|
—
|
|
|
(4,000,000
|
)
|
|
(4,000,000
|
)
|
||||
Other contributions from MGM
|
—
|
|
|
—
|
|
|
1,893,502
|
|
|
1,893,502
|
|
||||
Limited partnership interest effective April 25, 2016
|
—
|
|
|
3,868,078
|
|
|
(3,868,078
|
)
|
|
—
|
|
||||
Purchase of Operating Partnership units by MGM
|
—
|
|
|
1,132,468
|
|
|
—
|
|
|
1,132,468
|
|
||||
Borgata Transaction
|
—
|
|
|
728,379
|
|
|
—
|
|
|
728,379
|
|
||||
Net income - April 25, 2016 to December 31, 2016
|
—
|
|
|
119,729
|
|
|
—
|
|
|
119,729
|
|
||||
Other comprehensive income - cash flow hedges
|
—
|
|
|
1,879
|
|
|
—
|
|
|
1,879
|
|
||||
Share-based compensation
|
—
|
|
|
510
|
|
|
—
|
|
|
510
|
|
||||
Deemed contribution - tax sharing agreement
|
—
|
|
|
2,156
|
|
|
—
|
|
|
2,156
|
|
||||
Distributions declared and paid
|
—
|
|
|
(244,938
|
)
|
|
—
|
|
|
(244,938
|
)
|
||||
Balance at December 31, 2016
|
—
|
|
|
5,608,261
|
|
|
—
|
|
|
5,608,261
|
|
||||
Net income
|
—
|
|
|
165,990
|
|
|
—
|
|
|
165,990
|
|
||||
Other comprehensive income - cash flow hedges
|
—
|
|
|
9,782
|
|
|
—
|
|
|
9,782
|
|
||||
MGM National Harbor Transaction
|
—
|
|
|
296,409
|
|
|
—
|
|
|
296,409
|
|
||||
Issuance of Operating Partnership units
|
—
|
|
|
387,548
|
|
|
—
|
|
|
387,548
|
|
||||
Share-based compensation
|
—
|
|
|
1,336
|
|
|
—
|
|
|
1,336
|
|
||||
Deemed contribution - tax sharing agreement
|
—
|
|
|
1,730
|
|
|
—
|
|
|
1,730
|
|
||||
Distributions declared and paid
|
—
|
|
|
(403,059
|
)
|
|
—
|
|
|
(403,059
|
)
|
||||
Other
|
—
|
|
|
(258
|
)
|
|
—
|
|
|
(258
|
)
|
||||
Balance at December 31, 2017
|
$
|
—
|
|
|
$
|
6,067,739
|
|
|
$
|
—
|
|
|
$
|
6,067,739
|
|
Buildings and building improvements
|
20 to 40 years
|
Land improvements
|
10 to 20 years
|
Fixtures and integral equipment
|
3 to 20 years
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative asset - interest rate swaps
|
$
|
11,306
|
|
|
$
|
—
|
|
|
$
|
11,306
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Senior secured credit facility:
|
|
|
|
|
|
|
|
||||||||
Senior secured term loan A facility
|
273,750
|
|
|
—
|
|
|
273,750
|
|
|
—
|
|
||||
Senior secured term loan B facility
|
1,822,169
|
|
|
—
|
|
|
1,822,169
|
|
|
—
|
|
||||
Senior secured revolving credit facility
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
$1,050 million 5.625% senior notes, due 2024
|
1,126,125
|
|
|
—
|
|
|
1,126,125
|
|
|
—
|
|
||||
$500 million 4.50% senior notes, due 2026
|
496,250
|
|
|
—
|
|
|
496,250
|
|
|
—
|
|
||||
$350 million 4.50% senior notes, due 2028
|
$
|
345,188
|
|
|
|
|
$
|
345,188
|
|
|
|
||||
|
$
|
4,063,482
|
|
|
$
|
—
|
|
|
$
|
4,063,482
|
|
|
$
|
—
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Land
|
$
|
4,143,513
|
|
|
$
|
4,143,513
|
|
Buildings, building improvements, land improvements and integral equipment
|
8,512,334
|
|
|
7,324,657
|
|
||
|
12,655,847
|
|
|
11,468,170
|
|
||
Less: Accumulated depreciation
|
(2,633,909
|
)
|
|
(2,388,492
|
)
|
||
|
$
|
10,021,938
|
|
|
$
|
9,079,678
|
|
Year ending December 31,
|
(in thousands)
|
||
2018
|
$
|
766,933
|
|
2019
|
780,782
|
|
|
2020
|
794,907
|
|
|
2021
|
809,315
|
|
|
2022
|
757,060
|
|
|
Thereafter
|
2,461,451
|
|
|
Total
|
6,370,448
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Senior secured credit facility:
|
|
|
|
||||
Senior secured term loan A facility
|
$
|
273,750
|
|
|
$
|
292,500
|
|
Senior secured term loan B facility
|
1,817,625
|
|
|
1,840,750
|
|
||
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
|
|
|
—
|
|
||
|
3,991,375
|
|
|
3,683,250
|
|
||
Less: Unamortized discount and debt issuance costs
|
(56,747
|
)
|
|
(61,308
|
)
|
||
|
$
|
3,934,628
|
|
|
$
|
3,621,942
|
|
Year ending December 31,
|
(in thousands)
|
||
2018
|
$
|
33,500
|
|
2019
|
33,500
|
|
|
2020
|
33,500
|
|
|
2021
|
247,250
|
|
|
2022
|
18,500
|
|
|
Thereafter
|
3,625,125
|
|
|
|
$
|
3,991,375
|
|
|
|
|
December 31,
|
|||||
|
Location on Balance Sheet
|
|
2017
|
2016
|
||||
|
|
|
(in thousands)
|
|||||
Interest rate swaps - cash flow hedges
|
Prepaid expenses and other assets
|
|
$
|
11,306
|
|
$
|
1,879
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Federal:
|
|
|
|
|
|
||||||
Current
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred
|
—
|
|
|
—
|
|
|
—
|
|
|||
Provision for federal income taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State:
|
|
|
|
|
|
||||||
Current
|
$
|
1,729
|
|
|
$
|
2,156
|
|
|
$
|
—
|
|
Deferred
|
3,177
|
|
|
108
|
|
|
—
|
|
|||
Provision for state income taxes
|
$
|
4,906
|
|
|
$
|
2,264
|
|
|
$
|
—
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Deferred tax liability – federal and state
|
|
|
|
||||
Real estate investments, net
|
$
|
28,544
|
|
|
$
|
25,368
|
|
Total deferred tax liability
|
$
|
28,544
|
|
|
$
|
25,368
|
|
Declaration Date
|
|
Record Date
|
|
Distribution/ Dividend Per Unit/ Share
|
|
Payment Date
|
|
Operating Partnership Distribution Amount
|
|
MGP Class A Dividend Amount
|
||||||
(in thousands, except per unit and per share amount)
|
||||||||||||||||
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
|
|
September 15, 2017
|
|
September 29, 2017
|
|
$
|
0.3950
|
|
|
October 13, 2017
|
|
$
|
101,222
|
|
|
$
|
28,004
|
|
December 15, 2017
|
|
December 29, 2017
|
|
$
|
0.4200
|
|
|
January 16, 2018
|
|
$
|
111,733
|
|
|
$
|
29,777
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2016
|
|
|
|
|
|
|
|
|
|
|
||||||
June 16, 2016
|
|
June 30, 2016
|
|
$
|
0.2632
|
|
(1)
|
July 15, 2016
|
|
$
|
56,720
|
|
|
$
|
15,134
|
|
September 15, 2016
|
|
September 30, 2016
|
|
$
|
0.3875
|
|
|
October 14, 2016
|
|
$
|
94,109
|
|
|
$
|
22,281
|
|
December 15, 2016
|
|
December 30, 2016
|
|
$
|
0.3875
|
|
|
January 16, 2017
|
|
$
|
94,109
|
|
|
$
|
22,281
|
|
|
Cash Flow Hedges
|
||
|
(in thousands)
|
||
Balance, December 31, 2015
|
$
|
—
|
|
Other comprehensive income before reclassifications
|
1,521
|
|
|
Amounts reclassified from accumulated other comprehensive income to interest expense
|
358
|
|
|
Balance, December 31, 2016
|
1,879
|
|
|
Other comprehensive income before reclassifications
|
566
|
|
|
Amounts reclassified from accumulated other comprehensive income to interest expense
|
9,216
|
|
|
Net current period other comprehensive income
|
9,782
|
|
|
Balance, December 31, 2017
|
11,661
|
|
|
Other comprehensive loss attributable to noncontrolling interest
|
(8,553
|
)
|
|
Accumulated other comprehensive income attributable to Class A shareholders
|
$
|
3,108
|
|
|
Year Ended December 31, 2017
|
|
April 25 - December 31, 2016
|
||||
|
(in thousands, except share
and per share amounts) |
||||||
Basic net income per Class A share
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net income attributable to Class A shares
|
$
|
41,775
|
|
|
$
|
29,938
|
|
Denominator:
|
|
|
|
||||
Basic weighted average Class A shares outstanding
(1)
|
61,733,136
|
|
|
57,502,158
|
|
||
Basic net income per Class A share
|
$
|
0.68
|
|
|
$
|
0.52
|
|
|
Year Ended December 31, 2017
|
|
April 25 - December 31, 2016
|
||||
|
(in thousands, except share
and per share amounts) |
||||||
Diluted net income per Class A share
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net income attributable to Class A shares
|
$
|
41,775
|
|
|
$
|
29,938
|
|
Denominator:
|
|
|
|
||||
Basic weighted average Class A shares outstanding
(1)
|
61,733,136
|
|
|
57,502,158
|
|
||
Effect of dilutive shares for diluted net income per Class A share
(2)
|
183,410
|
|
|
249,331
|
|
||
Weighted average shares for diluted net income per Class A share
|
61,916,546
|
|
|
57,751,489
|
|
||
Diluted net income per Class A share
(3)
|
$
|
0.67
|
|
|
$
|
0.52
|
|
(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.
|
|
Year Ended December 31, 2017
|
|
April 25 – December 31, 2016
|
||||
|
(in thousands, except unit
and per unit amounts) |
||||||
Basic net income per Operating Partnership unit
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
165,990
|
|
|
$
|
119,729
|
|
Denominator:
|
|
|
|
||||
Basic weighted average Operating Partnership units outstanding
(1)
|
249,451,258
|
|
|
232,181,070
|
|
||
Basic net income per Operating Partnership unit
|
$
|
0.67
|
|
|
$
|
0.52
|
|
|
Year Ended December 31, 2017
|
|
April 25 – December 31, 2016
|
||||
|
(in thousands, except unit
and per unit amounts) |
||||||
Diluted net income per Operating Partnership unit
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
165,990
|
|
|
$
|
119,729
|
|
Denominator:
|
|
|
|
||||
Basic weighted average Operating Partnership units outstanding
(1)
|
249,451,258
|
|
|
232,181,070
|
|
||
Effect of dilutive units for diluted net income per Operating Partnership unit
(2)
|
183,410
|
|
|
249,331
|
|
||
Weighted average units for diluted net income per Operating Partnership unit
|
249,634,668
|
|
|
232,430,401
|
|
||
Diluted net income per Operating Partnership unit
|
$
|
0.66
|
|
|
$
|
0.52
|
|
(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.
|
Year ending December 31,
|
(in thousands)
|
||
2018
|
$
|
16,203
|
|
2019
|
17,585
|
|
|
2020
|
19,145
|
|
|
2021
|
23,024
|
|
|
2022
|
23,024
|
|
|
Thereafter
|
1,303,098
|
|
|
|
$
|
1,402,079
|
|
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
|
|
|||||
|
|
$
|
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
|
|
|||||
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 BALANCE SHEET INFORMATION
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
December 31, 2016
|
||||||||||||||||||
|
|
Operating
|
|
|
|
Guarantor
|
|
|
|
|
||||||||||
|
|
Partnership
|
|
Co-Issuer
|
|
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Real estate investments, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,079,678
|
|
|
$
|
—
|
|
|
$
|
9,079,678
|
|
Cash and cash equivalents
|
|
360,492
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
360,492
|
|
|||||
Tenant and other receivables, net
|
|
2,059
|
|
|
—
|
|
|
7,444
|
|
|
—
|
|
|
9,503
|
|
|||||
Intercompany
|
|
880,823
|
|
|
—
|
|
|
—
|
|
|
(880,823
|
)
|
|
—
|
|
|||||
Prepaid expenses and other assets
|
|
9,167
|
|
|
—
|
|
|
1,739
|
|
|
—
|
|
|
10,906
|
|
|||||
Investments in subsidiaries
|
|
8,100,942
|
|
|
—
|
|
|
—
|
|
|
(8,100,942
|
)
|
|
—
|
|
|||||
Above market lease, asset
|
|
—
|
|
|
—
|
|
|
46,161
|
|
|
—
|
|
|
46,161
|
|
|||||
|
|
$
|
9,353,483
|
|
|
$
|
—
|
|
|
$
|
9,135,022
|
|
|
$
|
(8,981,765
|
)
|
|
$
|
9,506,740
|
|
Debt, net
|
|
3,621,942
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,621,942
|
|
|||||
Due to MGM Resorts International and affiliates
|
|
—
|
|
|
—
|
|
|
166
|
|
|
—
|
|
|
166
|
|
|||||
Intercompany
|
|
—
|
|
|
—
|
|
|
880,823
|
|
|
(880,823
|
)
|
|
—
|
|
|||||
Accounts payable, accrued expenses, and other liabilities
|
|
3,034
|
|
|
—
|
|
|
7,444
|
|
|
—
|
|
|
10,478
|
|
|||||
Above market lease, liability
|
|
—
|
|
|
—
|
|
|
47,957
|
|
|
—
|
|
|
47,957
|
|
|||||
Accrued interest
|
|
26,137
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,137
|
|
|||||
Distribution payable
|
|
94,109
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94,109
|
|
|||||
Deferred revenue
|
|
—
|
|
|
—
|
|
|
72,322
|
|
|
—
|
|
|
72,322
|
|
|||||
Deferred income taxes, net
|
|
—
|
|
|
—
|
|
|
25,368
|
|
|
—
|
|
|
25,368
|
|
|||||
Total liabilities
|
|
3,745,222
|
|
|
—
|
|
|
1,034,080
|
|
|
(880,823
|
)
|
|
3,898,479
|
|
|||||
General partner
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Limited partners
|
|
5,608,261
|
|
|
—
|
|
|
8,100,942
|
|
|
(8,100,942
|
)
|
|
5,608,261
|
|
|||||
Total partners' capital
|
|
5,608,261
|
|
|
—
|
|
|
8,100,942
|
|
|
(8,100,942
|
)
|
|
5,608,261
|
|
|||||
Total liabilities and partners' capital
|
|
$
|
9,353,483
|
|
|
$
|
—
|
|
|
$
|
9,135,022
|
|
|
$
|
(8,981,765
|
)
|
|
$
|
9,506,740
|
|
CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
|
Operating
|
|
|
|
Guarantor
|
|
|
|
|
||||||||||
|
|
Partnership
|
|
Co-Issuer
|
|
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental revenue
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
675,089
|
|
|
$
|
—
|
|
|
$
|
675,089
|
|
Tenant reimbursements and other
|
|
—
|
|
|
—
|
|
|
90,606
|
|
|
—
|
|
|
90,606
|
|
|||||
|
|
—
|
|
|
—
|
|
|
765,695
|
|
|
—
|
|
|
765,695
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation
|
|
—
|
|
|
—
|
|
|
260,455
|
|
|
—
|
|
|
260,455
|
|
|||||
Property transactions, net
|
|
—
|
|
|
—
|
|
|
34,022
|
|
|
—
|
|
|
34,022
|
|
|||||
Reimbursable expenses
|
|
—
|
|
|
—
|
|
|
88,254
|
|
|
—
|
|
|
88,254
|
|
|||||
Amortization of above market lease, net
|
|
—
|
|
|
—
|
|
|
686
|
|
|
—
|
|
|
686
|
|
|||||
Acquisition-related expenses
|
|
17,304
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,304
|
|
|||||
General and administrative
|
|
12,189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,189
|
|
|||||
|
|
29,493
|
|
|
—
|
|
|
383,417
|
|
|
—
|
|
|
412,910
|
|
|||||
Operating income (loss)
|
|
(29,493
|
)
|
|
—
|
|
|
382,278
|
|
|
—
|
|
|
352,785
|
|
|||||
Equity in earnings of subsidiaries
|
|
377,372
|
|
|
—
|
|
|
—
|
|
|
(377,372
|
)
|
|
—
|
|
|||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
|
3,907
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,907
|
|
|||||
Interest expense
|
|
(184,175
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(184,175
|
)
|
|||||
Other non-operating
|
|
(1,621
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,621
|
)
|
|||||
|
|
(181,889
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(181,889
|
)
|
|||||
Income (loss) before income taxes
|
|
165,990
|
|
|
—
|
|
|
382,278
|
|
|
(377,372
|
)
|
|
170,896
|
|
|||||
Provision for income taxes
|
|
—
|
|
|
—
|
|
|
(4,906
|
)
|
|
—
|
|
|
(4,906
|
)
|
|||||
Net income (loss)
|
|
$
|
165,990
|
|
|
$
|
—
|
|
|
$
|
377,372
|
|
|
$
|
(377,372
|
)
|
|
$
|
165,990
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
|
165,990
|
|
|
—
|
|
|
377,372
|
|
|
(377,372
|
)
|
|
165,990
|
|
|||||
Unrealized gain on cash flow hedges
|
|
9,782
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,782
|
|
|||||
Comprehensive income (loss)
|
|
$
|
175,772
|
|
|
$
|
—
|
|
|
$
|
377,372
|
|
|
$
|
(377,372
|
)
|
|
$
|
175,772
|
|
CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
|
Operating
|
|
|
|
Guarantor
|
|
|
|
|
||||||||||
|
|
Partnership
|
|
Co-Issuer
|
|
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental revenue
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
419,239
|
|
|
$
|
—
|
|
|
$
|
419,239
|
|
Tenant reimbursements and other
|
|
—
|
|
|
—
|
|
|
48,309
|
|
|
—
|
|
|
48,309
|
|
|||||
|
|
—
|
|
|
—
|
|
|
467,548
|
|
|
—
|
|
|
467,548
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation
|
|
—
|
|
|
—
|
|
|
220,667
|
|
|
—
|
|
|
220,667
|
|
|||||
Property transactions, net
|
|
—
|
|
|
—
|
|
|
4,684
|
|
|
—
|
|
|
4,684
|
|
|||||
Reimbursable expenses
|
|
—
|
|
|
—
|
|
|
68,063
|
|
|
—
|
|
|
68,063
|
|
|||||
Amortization of above market lease, net
|
|
—
|
|
|
—
|
|
|
286
|
|
|
—
|
|
|
286
|
|
|||||
Acquisition-related expenses
|
|
10,178
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,178
|
|
|||||
General and administrative
|
|
9,896
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,896
|
|
|||||
|
|
20,074
|
|
|
—
|
|
|
293,700
|
|
|
—
|
|
|
313,774
|
|
|||||
Operating income (loss)
|
|
(20,074
|
)
|
|
—
|
|
|
173,848
|
|
|
—
|
|
|
153,774
|
|
|||||
Equity in earnings of subsidiaries
|
|
171,584
|
|
|
—
|
|
|
—
|
|
|
(171,584
|
)
|
|
—
|
|
|||||
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
|
774
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
774
|
|
|||||
Interest expense
|
|
(116,212
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(116,212
|
)
|
|||||
Other non-operating
|
|
(726
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(726
|
)
|
|||||
|
|
(116,164
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(116,164
|
)
|
|||||
Income (loss) before income taxes
|
|
35,346
|
|
|
—
|
|
|
173,848
|
|
|
(171,584
|
)
|
|
37,610
|
|
|||||
Provision for income taxes
|
|
—
|
|
|
—
|
|
|
(2,264
|
)
|
|
—
|
|
|
(2,264
|
)
|
|||||
Net income (loss)
|
|
$
|
35,346
|
|
|
$
|
—
|
|
|
$
|
171,584
|
|
|
$
|
(171,584
|
)
|
|
$
|
35,346
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
|
35,346
|
|
|
—
|
|
|
171,584
|
|
|
(171,584
|
)
|
|
35,346
|
|
|||||
Unrealized gain on cash flow hedges
|
|
1,879
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,879
|
|
|||||
Comprehensive income (loss)
|
|
$
|
37,225
|
|
|
$
|
—
|
|
|
$
|
171,584
|
|
|
$
|
(171,584
|
)
|
|
$
|
37,225
|
|
CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
|
Operating
|
|
|
|
Guarantor
|
|
|
|
|
||||||||||
|
|
Partnership
|
|
Co-Issuer
|
|
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(198,925
|
)
|
|
$
|
—
|
|
|
$
|
681,503
|
|
|
$
|
—
|
|
|
$
|
482,578
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures for property and equipment funded by Parent
|
|
(488
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(488
|
)
|
|||||
MGM National Harbor transaction
|
|
(462,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(462,500
|
)
|
|||||
Net cash used in investing activities
|
|
(462,988
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(462,988
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of debt
|
|
350,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,000
|
|
|||||
Deferred financing costs
|
|
(5,598
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,598
|
)
|
|||||
Repayment of assumed debt
|
|
(425,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(425,000
|
)
|
|||||
Repayment of debt principal
|
|
(41,875
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,875
|
)
|
|||||
Proceeds from purchase of Operating Partnership units by MGP
|
|
387,548
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
387,548
|
|
|||||
Distributions paid
|
|
(385,435
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(385,435
|
)
|
|||||
Cash received by Parent on behalf of Guarantor Subsidiaries
|
|
681,503
|
|
|
—
|
|
|
(681,503
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by financing activities
|
|
561,143
|
|
|
—
|
|
|
(681,503
|
)
|
|
—
|
|
|
(120,360
|
)
|
|||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net decrease for the period
|
|
(100,770
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100,770
|
)
|
|||||
Balance, beginning of period
|
|
360,492
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
360,492
|
|
|||||
Balance, end of period
|
|
$
|
259,722
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
259,722
|
|
CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
|
Operating
|
|
|
|
Guarantor
|
|
|
|
|
||||||||||
|
|
Partnership
|
|
Co-Issuer
|
|
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(99,884
|
)
|
|
$
|
—
|
|
|
$
|
397,665
|
|
|
$
|
—
|
|
|
$
|
297,781
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures for property and equipment funded by Parent
|
|
—
|
|
|
—
|
|
|
(138,987
|
)
|
|
—
|
|
|
(138,987
|
)
|
|||||
Net cash used in investing activities
|
|
—
|
|
|
—
|
|
|
(138,987
|
)
|
|
—
|
|
|
(138,987
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of debt
|
|
3,700,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,700,000
|
|
|||||
Deferred financing costs
|
|
(77,163
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(77,163
|
)
|
|||||
Repayment of bridge facilities
|
|
(4,544,850
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,544,850
|
)
|
|||||
Repayment of debt principal
|
|
(16,750
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,750
|
)
|
|||||
Proceeds from purchase of Operating Partnership units by MGP
|
|
1,132,468
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,132,468
|
|
|||||
Distributions paid
|
|
(150,829
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(150,829
|
)
|
|||||
Cash received by Parent on behalf of Guarantor Subsidiaries
|
|
417,500
|
|
|
—
|
|
|
(417,500
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash transfers from Parent
|
|
—
|
|
|
—
|
|
|
158,822
|
|
|
—
|
|
|
158,822
|
|
|||||
Net cash provided by financing activities
|
|
460,376
|
|
|
—
|
|
|
(258,678
|
)
|
|
—
|
|
|
201,698
|
|
|||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase for the period
|
|
360,492
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
360,492
|
|
|||||
Balance, beginning of period
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance, end of period
|
|
$
|
360,492
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
360,492
|
|
|
Quarter
|
||||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Total
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
183,899
|
|
|
$
|
184,456
|
|
|
$
|
182,798
|
|
|
$
|
214,542
|
|
|
$
|
765,695
|
|
Operating income
|
92,022
|
|
|
90,167
|
|
|
89,378
|
|
|
81,218
|
|
|
352,785
|
|
|||||
Net income
|
46,692
|
|
|
43,875
|
|
|
43,700
|
|
|
31,723
|
|
|
165,990
|
|
|||||
Net income attributable to Class A shareholders
|
11,348
|
|
|
10,680
|
|
|
11,025
|
|
|
8,722
|
|
|
41,775
|
|
|||||
Net income per Class A share (basic)
|
$
|
0.20
|
|
|
$
|
0.19
|
|
|
$
|
0.18
|
|
|
$
|
0.12
|
|
|
$
|
0.68
|
|
Net income per Class A share (diluted)
|
$
|
0.20
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
$
|
0.12
|
|
|
$
|
0.67
|
|
2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
110,903
|
|
|
$
|
172,499
|
|
|
$
|
184,146
|
|
|
$
|
467,548
|
|
Operating income (loss)
|
(67,970
|
)
|
|
39,193
|
|
|
86,792
|
|
|
95,759
|
|
|
153,774
|
|
|||||
Net income (loss)
|
(67,970
|
)
|
|
9,646
|
|
|
42,671
|
|
|
50,999
|
|
|
35,346
|
|
|||||
Net income attributable to Class A shareholders
|
—
|
|
|
6,953
|
|
|
10,591
|
|
|
12,394
|
|
|
29,938
|
|
|||||
Net income per Class A share (basic)
|
N/A
|
|
|
$
|
0.12
|
|
|
$
|
0.18
|
|
|
$
|
0.22
|
|
|
$
|
0.52
|
|
|
Net income per Class A share (diluted)
|
N/A
|
|
|
$
|
0.12
|
|
|
$
|
0.18
|
|
|
$
|
0.21
|
|
|
$
|
0.52
|
|
|
Quarter
|
||||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Total
|
||||||||||
|
(in thousands, except per unit data)
|
||||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
183,899
|
|
|
$
|
184,456
|
|
|
$
|
182,798
|
|
|
$
|
214,542
|
|
|
$
|
765,695
|
|
Operating income
|
92,022
|
|
|
90,167
|
|
|
89,378
|
|
|
81,218
|
|
|
352,785
|
|
|||||
Net income
|
46,692
|
|
|
43,875
|
|
|
43,700
|
|
|
31,723
|
|
|
165,990
|
|
|||||
Net income per Operating Partnership unit (basic)
|
$
|
0.19
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
$
|
0.12
|
|
|
$
|
0.67
|
|
Net income per Operating Partnership unit (diluted)
|
$
|
0.19
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
$
|
0.12
|
|
|
$
|
0.66
|
|
2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
110,903
|
|
|
$
|
172,499
|
|
|
$
|
184,146
|
|
|
$
|
467,548
|
|
Operating income (loss)
|
(67,970
|
)
|
|
39,193
|
|
|
86,792
|
|
|
95,759
|
|
|
153,774
|
|
|||||
Net income (loss)
|
(67,970
|
)
|
|
9,646
|
|
|
42,671
|
|
|
50,999
|
|
|
35,346
|
|
|||||
Net income per Operating Partnership unit (basic)
|
N/A
|
|
|
$
|
0.12
|
|
|
$
|
0.18
|
|
|
$
|
0.21
|
|
|
$
|
0.52
|
|
|
Net income per Operating Partnership unit (diluted)
|
N/A
|
|
|
$
|
0.12
|
|
|
$
|
0.18
|
|
|
$
|
0.21
|
|
|
$
|
0.52
|
|
By:
|
|
/s/ JAMES C. STEWART
|
|
|
James C. Stewart
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Signature
|
|
Title
|
|
Date
|
/S/ JAMES C. STEWART
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
March 1, 2018
|
James C. Stewart
|
|
|
|
|
/S/ ANDY H. CHIEN
|
|
Chief Financial Officer and Treasurer
(Principal Financial Officer)
|
|
March 1, 2018
|
Andy H. Chien
|
|
|
|
|
/S/ JAMES J. MURREN
|
|
Chairman of the Board
|
|
March 1, 2018
|
James J. Murren
|
|
|
|
|
/S/ ELISA GOIS
|
|
Director
|
|
March 1, 2018
|
Elisa Gois
|
|
|
|
|
/S/ WILLIAM J. HORNBUCKLE
|
|
Director
|
|
March 1, 2018
|
William J. Hornbuckle
|
|
|
|
|
/S/ JOHN M. MCMANUS
|
|
Director
|
|
March 1, 2018
|
John M. McManus
|
|
|
|
|
/S/ MICHAEL RIETBROCK
|
|
Director
|
|
March 1, 2018
|
Michael Rietbrock
|
|
|
|
|
/S/ THOMAS ROBERTS
|
|
Director
|
|
March 1, 2018
|
Thomas Roberts
|
|
|
|
|
/S/ ROBERT SMITH
|
|
Director
|
|
March 1, 2018
|
Robert Smith
|
|
|
|
|
/S/ DANIEL J. TAYLOR
|
|
Director
|
|
March 1, 2018
|
Daniel J. Taylor
|
|
|
|
|
By:
|
|
MGM Growth Properties OP GP LLC
|
By:
|
|
/s/ JAMES C. STEWART
|
|
|
Name: James C. Stewart
|
|
|
Title: Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
/S/ JAMES C. STEWART
|
|
Chief Executive Officer
|
|
March 1, 2018
|
James C. Stewart
|
|
|
|
|
/S/ ANDY H. CHIEN
|
|
Chief Financial Officer and Treasurer
|
|
March 1, 2018
|
Andy H. Chien
|
|
|
|
|
/S/ JAMES J. MURREN
|
|
Manager
|
|
March 1, 2018
|
James J. Murren
|
|
|
|
|
/S/ WILLIAM J. HORNBUCKLE
|
|
Manager
|
|
March 1, 2018
|
William J. Hornbuckle
|
|
|
|
|
|
|
|
|
Acquisition Costs
(a)
|
|
Costs
Capitalized Subsequent to Acquisition |
|
Gross Amount
at Which Carried at Close of Period (b) |
|
|
|
|
|
|
||||||||||||||||||||||||
Property
(c)
|
|
Encumbrances
|
|
Land
|
|
Building and Improvements
|
|
Land
|
|
Building and Improvements
|
|
Land
|
|
Building and Improvements
|
|
Total
|
|
Accumulated Depreciation
|
|
Year Acquired
|
|
Useful Life
(d)
|
||||||||||||||||
Investment Properties:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
New York-New York
|
|
e
|
|
$
|
149,984
|
|
|
$
|
484,001
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
149,984
|
|
|
$
|
484,738
|
|
|
$
|
634,722
|
|
|
$
|
(282,949
|
)
|
|
2016
|
|
f
|
The Mirage
|
|
e
|
|
1,017,562
|
|
|
760,222
|
|
|
—
|
|
|
—
|
|
|
1,017,562
|
|
|
759,386
|
|
|
1,776,948
|
|
|
(467,094
|
)
|
|
2016
|
|
f
|
||||||||
Mandalay Bay
|
|
e
|
|
1,199,785
|
|
|
1,882,381
|
|
|
—
|
|
|
—
|
|
|
1,199,785
|
|
|
1,873,959
|
|
|
3,073,744
|
|
|
(681,192
|
)
|
|
2016
|
|
f
|
||||||||
Luxor
|
|
e
|
|
440,685
|
|
|
710,796
|
|
|
—
|
|
|
—
|
|
|
440,685
|
|
|
705,909
|
|
|
1,146,594
|
|
|
(327,832
|
)
|
|
2016
|
|
f
|
||||||||
Excalibur
|
|
e
|
|
814,805
|
|
|
342,685
|
|
|
—
|
|
|
43,350
|
|
|
814,805
|
|
|
383,754
|
|
|
1,198,559
|
|
|
(131,675
|
)
|
|
2016
|
|
f
|
||||||||
Monte Carlo
|
|
e
|
|
291,035
|
|
|
376,625
|
|
|
—
|
|
|
82,048
|
|
|
291,035
|
|
|
391,103
|
|
|
682,138
|
|
|
(146,147
|
)
|
|
2016
|
|
f
|
||||||||
Beau Rivage
|
|
e
|
|
104,945
|
|
|
561,457
|
|
|
—
|
|
|
—
|
|
|
104,945
|
|
|
560,404
|
|
|
665,349
|
|
|
(241,814
|
)
|
|
2016
|
|
f
|
||||||||
MGM Grand Detroit
|
|
e
|
|
52,509
|
|
|
597,324
|
|
|
—
|
|
|
—
|
|
|
52,509
|
|
|
597,324
|
|
|
649,833
|
|
|
(161,804
|
)
|
|
2016
|
|
f
|
||||||||
Gold Strike Tunica
|
|
e
|
|
3,609
|
|
|
179,146
|
|
|
—
|
|
|
—
|
|
|
3,609
|
|
|
178,673
|
|
|
182,282
|
|
|
(83,720
|
)
|
|
2016
|
|
f
|
||||||||
Borgata
|
|
e
|
|
35,568
|
|
|
1,264,432
|
|
|
—
|
|
|
—
|
|
|
35,568
|
|
|
1,256,189
|
|
|
1,291,757
|
|
|
(64,322
|
)
|
|
2016
|
|
f
|
||||||||
MGM National Harbor
|
|
—
|
|
—
|
|
|
1,183,909
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,220,292
|
|
|
1,220,292
|
|
|
(36,383
|
)
|
|
2017
|
|
f
|
||||||||
The Park
|
|
e
|
|
33,026
|
|
|
101,353
|
|
|
—
|
|
|
—
|
|
|
33,026
|
|
|
100,115
|
|
|
133,141
|
|
|
(8,977
|
)
|
|
2016
|
|
f
|
||||||||
|
|
|
|
4,143,513
|
|
|
8,444,331
|
|
|
—
|
|
|
125,398
|
|
|
4,143,513
|
|
|
8,511,846
|
|
|
12,655,359
|
|
|
(2,633,909
|
)
|
|
|
|
|
||||||||
Corporate Property:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
MGP Corporate Office
|
|
e
|
|
—
|
|
|
488
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
488
|
|
|
488
|
|
|
—
|
|
|
2017
|
|
f
|
||||||||
|
|
|
|
$
|
4,143,513
|
|
|
$
|
8,444,819
|
|
|
$
|
—
|
|
|
$
|
125,398
|
|
|
$
|
4,143,513
|
|
|
$
|
8,512,334
|
|
|
$
|
12,655,847
|
|
|
$
|
(2,633,909
|
)
|
|
|
|
|
(a)
|
Represents the net carrying value of the IPO Properties on the IPO Date and the real estate assets of Borgata and MGM National Harbor on their respective acquisition dates by the Operating Partnership.
|
(b)
|
The aggregate cost of land, buildings and improvements for federal income tax purposes is approximately
$8.7
billion.
|
(c)
|
All of the properties are large-scale destination entertainment and gaming-related properties, with the exception of The Park and MGP Corporate Office. See “Item 1 — Business — Our Properties” for additional detail about our properties.
|
(d)
|
We have omitted the date of construction of our properties on the basis that compiling this disclosure on a site-by-site basis would be impracticable because the majority of the real estate assets were constructed by other companies that were later acquired by MGM and then ultimately acquired by MGP on the IPO Date.
|
(e)
|
The assets comprising these Properties collectively secure the entire amount of the Operating Partnership's senior secured credit facility.
|
(f)
|
Depreciation is computed based on the following estimated useful lives:
|
Buildings and building improvements
|
20 to 40 years
|
Land improvements
|
10 to 20 years
|
Fixtures and integral equipment
|
3 to 20 years
|
|
2017
|
|
2016
|
||||
Balance at beginning of year
|
$
|
11,468,170
|
|
|
$
|
9,965,185
|
|
Additions
(1)
|
1,273,288
|
|
|
1,511,390
|
|
||
Impairments
|
—
|
|
|
—
|
|
||
Dispositions and write-offs
|
(85,611
|
)
|
|
(8,405
|
)
|
||
Balance at end of year
|
$
|
12,655,847
|
|
|
$
|
11,468,170
|
|
(1)
|
Includes
$1.2 billion
resulting from the Operating Partnership's acquisition of MGM National Harbor from MGM. See “Note 3 — Acquisitions — MGM National Harbor Transaction for additional details.”
|
|
2017
|
|
2016
|
||||
Balance at beginning of year
|
$
|
(2,388,492
|
)
|
|
$
|
(2,171,546
|
)
|
Depreciation expense
|
(260,455
|
)
|
|
(220,667
|
)
|
||
Property transactions, net
|
(34,022
|
)
|
|
—
|
|
||
Dispositions and write-offs
|
85,443
|
|
|
3,721
|
|
||
MGM National Harbor Transaction
|
(36,383
|
)
|
|
—
|
|
||
Balance at end of year
|
$
|
(2,633,909
|
)
|
|
$
|
(2,388,492
|
)
|
SECTION 2.1.
|
Request 4
|
SECTION 2.2.
|
Piggyback Registration 5
|
SECTION 2.3.
|
Expenses 5
|
SECTION 2.4.
|
Other Registration 6
|
SECTION 3.1.
|
Notice and Incidental Registration 6
|
SECTION 3.2.
|
Shelf Registration Statement 7
|
SECTION 4.1.
|
Registration and Qualification 9
|
SECTION 4.2.
|
Underwriting 11
|
SECTION 4.3.
|
Blackout Periods 12
|
SECTION 4.4.
|
Qualification for Rule 144 Sales 13
|
SECTION 5.1.
|
Preparation; Reasonable Investigation 14
|
SECTION 6.1.
|
Restrictions on Public Sale 14
|
SECTION 7.1.
|
Indemnification 16
|
SECTION 8.1.
|
Benefits of Registration Rights 19
|
SECTION 9.1.
|
No Inconsistent Agreements 19
|
SECTION 9.2.
|
Captions 19
|
SECTION 9.3.
|
Severability 19
|
SECTION 9.4.
|
Modification and Amendment 19
|
SECTION 9.5.
|
Counterparts 20
|
SECTION 9.6.
|
Entire Agreement 20
|
SECTION 9.7.
|
Assignment; Successors and Assigns; Joinders 20
|
SECTION 9.8.
|
Notices 20
|
SECTION 9.9.
|
Specific Performance 20
|
SECTION 9.10.
|
Dispute Resolution 20
|
SECTION 9.11.
|
Governing Law; Jurisdiction 21
|
By:
|
MGM Resorts International, a Delaware corporation
|
Its:
|
Managing Venturer
|
|
|
Year ended December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations before income taxes
|
|
$
|
170,896
|
|
|
$
|
37,610
|
|
|
$
|
(261,954
|
)
|
|
$
|
(246,242
|
)
|
|
$
|
(253,873
|
)
|
Fixed charges (see below)
|
|
184,175
|
|
|
116,212
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
355,071
|
|
|
153,822
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capitalized interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
355,071
|
|
|
153,822
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
(1)
|
|
$
|
184,175
|
|
|
$
|
116,212
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Capitalized interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
$
|
184,175
|
|
|
$
|
116,212
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Ratio of earnings to fixed charges and preferred share dividends
(2)
|
|
1.93
|
|
|
1.32
(4)
|
|
|
N/A
(3)
|
|
|
N/A
(3)
|
|
|
N/A
(3)
|
|
Subsidiary
|
Jurisdiction of Incorporation
|
|
|
|
|
MGM Growth Properties OP GP LLC
|
Delaware
|
|
MGM Growth Properties Operating Partnership LP
|
Delaware
|
|
MGP Finance Co-Issuer Inc.
|
Delaware
|
|
MGP Lessor Holdings, LLC
|
Delaware
|
|
MGP Lessor, LLC
|
Delaware
|
|
|
|
|
|
|
|
Subsidiary
|
Jurisdiction of Incorporation
|
|
|
MGP Finance Co-Issuer Inc.
|
Delaware
|
MGP Lessor Holdings, LLC
|
Delaware
|
MGP Lessor, LLC
|
Delaware
|
|
|
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K 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 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 annual report on Form 10-K 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; 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 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 annual report on Form 10-K 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 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 annual report on Form 10-K 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; 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 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 Office
|
March 1, 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
|
March 1, 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
|
March 1, 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
|
March 1, 2018
|