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Casino

MGM Growth Properties LLC Reports Third Quarter Financial Results

Friday 02 de November 2018 / 12:10

2 minutos de lectura

(Las Vegas).- MGM Growth Properties LLC today reported financial results for the quarter ended September 30, 2018 for its real estate investment trust ("REIT") operations and its taxable REIT subsidiary ("TRS") operations. Net income attributable to MGP Class A shareholders for the quarter was $19.5 million, or $0.27 per diluted share.

MGM Growth Properties LLC Reports Third Quarter Financial Results

Financial highlights for the third quarter of 2018:



  • Rental revenue was $186.6 million;

  • Consolidated net income was $69.9 million, or $0.26 per diluted Operating Partnership unit; which consisted of $57.7 million of net income from the REIT, and $12.2 million of net income from the TRS;

  • Funds From Operations(1) ("FFO") was $131.5 million , or $0.49 per diluted Operating Partnership unit;

  • Adjusted Funds From Operations(2) ("AFFO") was $154.8 million, or $0.58 per diluted Operating Partnership unit;

  • Adjusted EBITDA(3) was $212.0 million; and

  • General and administrative expenses were $3.4 million.


On July 6, 2018, the Company completed its previously announced acquisition of the Hard Rock Rocksino Northfield Park ("Northfield"), which comprises the TRS operations. The Company funded the acquisition with cash on hand and borrowings under its senior secured credit facility. Simultaneously with the close, the Company entered into a new agreement with Hard Rock to continue to serve as the manager of the property.


On September 18, 2018, the Company entered into an agreement to sell the operations of Northfield to a subsidiary of MGM Resorts International ("MGM Resorts") for approximately $275 million plus net working capital adjustments. The TRS will concurrently liquidate and the real estate assets of Northfield will be added to the existing master lease between MGM Resorts and the Company. As a result, the annual rent payment under the master lease will increase by $60 million, prorated for the remainder of the lease year. Consistent with the master lease terms, 90% of this rent will be fixed and contractually grow at 2% per year until 2022. The transaction is expected to close in the first half of 2019, subject to regulatory approvals and other customary closing conditions. The transaction was approved by the Company's Conflicts Committee.


"We are excited to present our results of operations and transaction activity for our third quarter," said James Stewart, CEO of MGM Growth Properties. "We announced the closing of the acquisition of the real estate and operations and the subsequent sale of the operations of Northfield to MGM Resorts for $275 million. Northfield just recorded its best quarter ever in terms of revenue, EBITDA and market share. We are thrilled to partner with MGM Resorts who will introduce their award-winning M Life Rewards program to further drive growth at Northfield. Additionally, MGM Springfield opened its doors in August and we are excited to see that Right of First Offer property come online and enter the Massachusetts market."


The following table provides a reconciliation of MGP's net income to FFO, AFFO and Adjusted EBITDA for the three months ended September 30, 2018 (in thousands, except unit and per unit amounts):


































































































































































































































































































































































 

Three Months Ended September 30, 2018


 

Consolidated


 

REIT


 

TRS



Reconciliation of Non-GAAP Financial Measures


         

Net income (2)



$



69,923


   

$



57,697


   

$



12,226


 

Real estate depreciation



61,218


   

61,218


   


 

Property transactions, net



339


   

339


   


 

Funds From Operations



131,480


   

119,254


   

12,226


 

Amortization of financing costs and cash flow hedges



3,471


   

3,471


   


 

Non-cash compensation expense



576


   

576


   


 

Net effect of straight-line rent and amortization of deferred revenue



5,096


   

5,096


   


 

Other depreciation and other amortization(1)



5,360


   


   

5,360


 

Acquisition-related expenses



4,423


   

1,931


   

2,492


 

Amortization of above market lease, net



171


   

171


   


 

Other non-operating expenses



1,020


   

1,020


   


 

Provision for income taxes - REIT



3,177


   

3,177


   


 

Adjusted Funds From Operations



154,774


   

134,696


   

20,078


 

Interest income (2)



(163)


   

(163)


   


 

Interest expense(2)



58,743


   

58,743


   


 

Amortization of financing costs and cash flow hedges



(3,471)


   

(3,471)


   


 

Provision for income taxes - TRS



2,089


   


   

2,089


 

Adjusted EBITDA



$



211,972


   

$



189,805


   

$



22,167


 
           

Weighted average Operating Partnership units outstanding


         

Basic



266,139,175


         

Diluted



266,335,914


         
           

Net income per Operating Partnership unit outstanding


         

Basic



$



0.26


         

Diluted



$



0.26


         
           

FFO per Operating Partnership unit


         

Diluted



$



0.49


         
           

AFFO per Operating Partnership unit


         

Diluted



$



0.58


         






















   

(1)



Other depreciation and other amortization includes both real estate and equipment depreciation and amortization of intangible assets from the TRS.



(2)



Net income, interest income and interest expense is net of intercompany interest eliminations of $5.3 million for the three months ended September 30, 2018.






Financial Position


The Company had $49.5 million of cash and cash equivalents as of September 30, 2018. Cash received from rent payments under the master lease for the three months ended September 30, 2018 was $192.6 million.


On October 15, 2018, MGM Growth Properties Operating Partnership LP (the "Operating Partnership") made a cash distribution of $116.4 million relating to the third quarter dividend, $85.4 million of which was paid to subsidiaries of MGM Resorts and $31.0 million of which was paid to MGP. Simultaneously, MGP paid a cash dividend of $0.4375 per Class A share.


"In the third quarter of 2018, MGP increased its dividend to shareholders for the 5th time since the IPO in April 2016. The annualized dividend of $1.75 per share represents a 4.2% year to date increase and an increase of 22.4% since IPO," said Andy Chien, CFO of MGM Growth Properties. "MGP's consistent dividend growth demonstrates the successful execution of our business plan to acquire market leading assets that generate long-term value for our shareholders. Northfield is a great example of this execution and we expect that the net real estate acquisition price by the time we close the sale of the operations will benefit from the performance of the property and the interim cash flows as an operating asset in our TRS. We are also excited for the closing of Empire City, which will add another fantastic real estate asset to our portfolio. With these two transactions closing, our annual rental revenue will increase by $110 million, or 14%, in the first half of next year."


The Company's long-term debt at September 30, 2018 was as follows (in thousands):































































 

September 30, 2018



Senior Secured Credit Facility:


 

Term Loan A Facility



$



470,000


 

Term Loan B Facility



1,803,750


 

Revolving Credit Facility



565,000


 

5.625% Senior Notes due 2024



1,050,000


 

4.50% Senior Notes due 2026



500,000


 

4.50% Senior Notes due 2028



350,000


 

Total principal amount of long-term debt



4,738,750


 

Less: unamortized debt issuance costs



(54,033)


 

Total long-term debt, net of unamortized debt issuance costs



$



4,684,717


 




Conference Call Details


MGP will host a conference call at 12:30 p.m. Eastern Time today which will include a brief discussion of these results followed by a question and answer period. The call will be accessible via the Internet through http://www.mgmgrowthproperties.com/events-and-presentations or by calling 1-888-317-6003 for domestic callers and 1-412-317-6061 for international callers. The conference call access code is 9788859. A replay of the call will be available through Thursday, November 8, 2018. The replay may be accessed by dialing 1-877-344-7529 or 1-412-317-0088. The replay access code is 10124890. The call will be archived at www.mgmgrowthproperties.com.





























1



Funds From Operations ("FFO") is net income (computed in accordance with U.S. GAAP), excluding gains and losses from sales or disposals of property (presented as property transactions, net), plus real estate depreciation, as defined by the National Association of Real Estate Investment Trusts ("NAREIT").


   

2



Adjusted Funds From Operations ("AFFO") is FFO as adjusted for amortization of financing costs and cash flow hedges, amortization of the above market lease, net, non-cash compensation expense, acquisition related expenses, other non-operating expenses, provision for income taxes related to the REIT, other depreciation and amortization and the net effect of straight-line rents and amortization of deferred revenue.


   

3



Adjusted EBITDA is net income (computed in accordance with U.S. GAAP) as adjusted for gains and losses from sales or disposals of property (presented as property transactions, net), real estate depreciation, other depreciation and amortization, interest income, interest expense (including amortization of financing costs and cash flow hedges), amortization of the above market lease, net, non-cash compensation expense, acquisition related expenses, other non-operating expenses, provision for income taxes and the net effect of straight-line rents and amortization of deferred revenue.






FFO, FFO per unit, AFFO, AFFO per unit and Adjusted EBITDA are supplemental performance measures that have not been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") that management believes are useful to investors in comparing operating and financial results between periods. Management believes that this is especially true since these measures exclude real estate depreciation and amortization expense and management believes that real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time. The Company believes such a presentation also provides investors with a meaningful measure of the Company's operating results in comparison to the operating results of other REITs. Adjusted EBITDA is useful to investors to further supplement AFFO and FFO and to provide investors a performance metric which excludes interest expense. In addition to non-cash items, the Company adjusts AFFO and Adjusted EBITDA for acquisition-related expenses. While we do not label these expenses as non-recurring, infrequent or unusual, management believes that it is helpful to adjust for these expenses when they do occur to allow for comparability of results between periods because each acquisition is (and will be) of varying size and complexity and may involve different types of expenses depending on the type of property being acquired and from whom.


FFO, FFO per unit, AFFO, AFFO per unit and Adjusted EBITDA do not represent cash flow from operations as defined by U.S. GAAP, should not be considered as an alternative to net income as defined by U.S. GAAP and are not indicative of cash available to fund all cash flow needs. Investors are also cautioned that FFO, FFO per unit, AFFO, AFFO per unit and Adjusted EBITDA as presented, may not be comparable to similarly titled measures reported by other REITs due to the fact that not all real estate companies use the same definitions.


Reconciliations of net income to FFO, AFFO and Adjusted EBITDA are included in this release.

Categoría:Casino

Tags: MGM,

País: United States

Event

SBC SUMMIT RIO 2024

05 de March 2024

Andre Gelfi explains the new regulation in the Brazilian gaming and betting market

(Rio de Janeiro, SoloAzar Exclusive).- The Managing Partner of Betsson group in Brazil, Andre Gelfi, was another key figure present at the inaugural SBC Summit Rio. In this exclusive interview with SoloAzar, he shared insights about the gaming and betting market in Brazil. Gelfi emphasized the hot topic of Brazilian regulations for the iGaming industry. In fact, he expressed his anticipation that the regulation, expected to be approved this year, will create a new landscape in the Brazilian market

Wednesday 27 Mar 2024 / 12:00

Influencers: "Between Effectiveness and Responsibility in the Gaming Industry".

(Rio de Janeiro, SoloAzar Exclusive) - As part of the Conference "Influencers: The Next Frontier of Social Media Marketing", as part of the Conference Agenda held on 6 and 7 March at the SBC Summit Rio 2024, leading industry personalities gathered in a panel to discuss the impact of the power of celebrities and influencers in generating engagement, as well as the proposed law that seeks to restrict their promotion of gambling.

Wednesday 27 Mar 2024 / 12:00

Pay4Fun: “We have ambitious expansion plans in the Brazilian market”

(Rio de Janeiro, SoloAzar Exclusive).- Leonardo Baptista, CEO and co-founder of Pay4Fun, is a key figure in the world of iGaming. His company, Pay4Fun, is a leading Brazilian online payment provider specializing in the iGaming market. During the first edition of the SBC Summit Rio, Baptista spoke exclusively with Soloazar, sharing insights about the new services that Pay4Fun will introduce to the market. He also discussed his vision for the future of iGaming in Brazil and Latin America. Another unmissable note by SoloAzar.

Wednesday 27 Mar 2024 / 12:00

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