Exhibit 99.1
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MGM GROWTH PROPERTIES REPORTS THIRD QUARTER FINANCIAL RESULTS
Las Vegas, Nevada, November 5, 2019 – MGM Growth Properties LLC (“MGP” or the “Company”) (NYSE: MGP) today reported financial results for the quarter ended September 30, 2019. Net income attributable to MGP’s Class A shareholders for the quarter was $22.5 million, or $0.24 per diluted share.
Other financial highlights for the third quarter of 2019 included:
Rental revenue of $219.8 million;
Consolidated net income of $68.6 million, or $0.23 per diluted Operating Partnership unit;
Funds From Operations(1) (“FFO”) of $150.4 million, or $0.51 per diluted Operating Partnership unit;
Adjusted Funds From Operations(2) (“AFFO”) of $173.1 million, or $0.59 per diluted Operating Partnership unit;
Adjusted EBITDA(3) of $232.6 million; and
General and administrative expenses were $4.5 million.
“We are pleased to present our third quarter 2019 results. MGP increased its dividend for the 9th time since the IPO to an annualized dividend of $1.88 per share, representing a 5.0% year to date increase and an increase of 31.5% since the IPO,” said James Stewart, CEO of MGM Growth Properties. “We are excited about the growth opportunities available to us in the market right now and continue to evaluate numerous prospects in the gaming and leisure spaces using a disciplined approach focused on sustainable, long-term value creation.”



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The following table provides a reconciliation of MGP’s net income to FFO, AFFO and Adjusted EBITDA for the three months ended September 30, 2019 (in thousands, except unit and per unit amounts):
 
Three Months Ended September 30, 2019
Reconciliation of Non-GAAP Financial Measures
 
Net income
$
68,553

Real estate depreciation
71,957

Property transactions, net
9,921

Funds From Operations
150,431

Amortization of financing costs and cash flow hedges
3,369

Non-cash compensation expense
519

Straight-line rental revenues, excluding lease incentive asset
11,664

Amortization of lease incentive asset and deferred revenue on non-normal tenant improvements
4,501

Acquisition-related expenses
92

Non-cash ground lease rent, net
259

Other expenses
306

Provision for income taxes
1,979

Adjusted Funds From Operations
173,120

Interest income
(241
)
Interest expense
63,048

Amortization of financing costs and cash flow hedges
(3,369
)
Adjusted EBITDA
$
232,558

 
 
Weighted average Operating Partnership units outstanding
 
Basic
292,867,986

Diluted
293,025,483

 
 
Net income per Operating Partnership unit outstanding
 
Basic
$
0.23

Diluted
$
0.23

 
 
FFO per Operating Partnership unit
 
Diluted
$
0.51

 
 
AFFO per Operating Partnership unit
 
Diluted
$
0.59

The Company had $153.5 million of cash and cash equivalents as of September 30, 2019. Cash received from rent payments under the Master Lease for the three months ended September 30, 2019 was $236.5 million.

On October 15, 2019, the Operating Partnership made a cash distribution of $138.7 million relating to the third quarter dividend, $93.9 million of which was paid to subsidiaries of MGM Resorts and $44.9 million of which was paid to MGP. Simultaneously, MGP paid a cash dividend of $0.47 per Class A share to MGP Class A shareholders.

During the quarter, the Operating Partnership entered into an interest rate swap agreement with a notional amount of $300 million and also modified and extended certain of its existing interest rate swaps with a combined notional amount of $400 million. As of September 30, 2019, the Operating Partnership pays a weighted average fixed rate of 1.707% on $1.5 billion total notional amount of effective interest rate swap agreements.


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“Our net leverage provides for ample flexibility and significant liquidity to fund future transactions accretively,” said Andy Chien, CFO of MGM Growth Properties. “We have utilized interest rate swaps to fix interest expense and now 93% of our debt is fixed rate. This is another example of executing on our long-term business strategy of delivering long-term growth for our shareholders by creating a stable and predictable stream of cash flows and opportunistically tapping the capital markets to hedge interest rate risk.”
The Company’s long-term debt at September 30, 2019 was as follows (in thousands):
 
September 30, 2019
Senior secured credit facility:
 
Senior secured term loan A facility
$
467,063

Senior secured term loan B facility
1,785,250

Senior secured revolving credit facility

$1,050 million 5.625% senior notes, due 2024
1,050,000

$500 million 4.50% senior notes, due 2026
500,000

$750 million 5.75% senior notes, due 2027
750,000

$350 million 4.50% senior notes, due 2028
350,000

Total principal amount of long-term debt
4,902,313

Less: Unamortized discount and debt issuance costs
(54,905
)
Total long-term debt, net of unamortized debt issuance costs
$
4,847,408

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 0065419. A replay of the call will be available through Tuesday, November 12, 2019. The replay may be accessed by dialing 1-877-344-7529 or 1-412-317-0088. The replay access code is 10135302. 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.

2
Adjusted Funds From Operations (“AFFO”) is FFO as adjusted for amortization of financing costs and cash flow hedges; non-cash compensation expense; straight-line rent (which is defined as the difference between contractual rent and cash rent payments, excluding lease incentive asset amortization); amortization of lease incentive asset and deferred revenue relating to non-normal tenant improvements; acquisition-related expenses; non-cash ground lease rent, net; other expenses and provision for income taxes.

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; amortization of financing costs and cash flow hedges; non-cash compensation expense; straight-line rent; amortization of lease incentive asset and deferred revenue relating to non-normal tenant improvements; acquisition-related expenses; non-cash ground lease rent, net; other expenses; interest income; interest expense (including amortization of financing costs and cash flow hedges), and provision for income taxes.

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

Page 3 of 6



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.
*       *      *
About MGM Growth Properties
MGM Growth Properties LLC (NYSE:MGP) is one of the leading publicly traded real estate investment trusts engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts, whose diverse amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. MGP currently owns a portfolio of properties, consisting of 11 premier destination resorts in Las Vegas and elsewhere across the United States, MGM Northfield Park in Northfield, OH, Empire Resort Casino in Yonkers, NY, as well as a retail and entertainment district, The Park in Las Vegas. As of December 31, 2018, our destination resorts, the Park, and MGM Northfield Park collectively comprised approximately 27,400 hotel rooms, 2.7 million convention square footage, 150 retail outlets, 300 food and beverage outlets and 20 entertainment venues. As a growth-oriented public real estate entity, MGP expects its relationship with MGM Resorts and other entertainment providers to attractively position MGP for the acquisition of additional properties across the entertainment, hospitality and leisure industries. For more information about MGP, visit the Company’s website at http://www.mgmgrowthproperties.com.
This release includes “forward-looking” statements and “safe harbor statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and/or uncertainties, including those described in MGP’s public filings with the Securities and Exchange Commission. MGP has based forward-looking statements on management’s current expectations and assumptions and not on historical facts. Examples of these statements include, but are not limited to, MGP’s expectations regarding its ability to continue to grow its dividend, successfully execute on its business strategy and acquire additional properties in accretive transactions. These forward-looking statements involve a number of risks and uncertainties and the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include risks related to MGP’s ability to receive, or delays in obtaining, any regulatory approvals required to own its properties, or other delays or impediments to completing MGP’s planned acquisitions or projects, including any acquisitions of properties from MGM; the ultimate timing and outcome of any planned acquisitions or projects; MGP’s ability to maintain its status as a REIT; the availability of and the ability to identify suitable and attractive acquisition and development opportunities and the ability to acquire and lease those properties on favorable terms; MGP’s ability to access capital through debt and equity markets in amounts and at rates and costs acceptable to MGP; changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs or to the gaming or lodging industries; and other factors described in MGP’s period reports filed with the Securities and Exchange Commission. In providing forward-looking statements, MGP is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If MGP updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements.
MGP CONTACTS:
 
 
Investment Community
 
News Media
ANDY CHIEN
 
(702) 669-1480 or media@mgpreit.com
Chief Financial Officer
 
 
MGM Growth Properties
 
 
(702) 669-1470
 
 






Page 4 of 6



MGM GROWTH PROPERTIES LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Revenues
 
 
 
 
 
 
 
Rental revenue
$
219,847

 
$
186,564

 
$
636,575

 
$
559,690

Tenant reimbursements and other
6,164

 
30,095

 
18,618

 
93,198

Total revenues
226,011

 
216,659

 
655,193

 
652,888

 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
Depreciation
71,957

 
63,468

 
223,062

 
199,933

Property transactions, net
9,921

 
339

 
11,344

 
18,851

Ground lease and other reimbursable expenses
5,920

 
29,168

 
17,760

 
90,435

Amortization of above market lease, net

 
171

 

 
514

Acquisition-related expenses
92

 
1,931

 
8,891

 
4,603

General and administrative
4,476

 
3,358

 
12,305

 
10,021

Total expenses
92,366

 
98,435

 
273,362

 
324,357

 
 
 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
 
 
Interest income
241

 
163

 
2,189

 
2,473

Interest expense
(63,048
)
 
(58,743
)
 
(190,973
)
 
(157,249
)
Other
(306
)
 
(1,020
)
 
(806
)
 
(6,409
)
 
(63,113
)
 
(59,600
)
 
(189,590
)
 
(161,185
)
Income from continuing operations before income taxes
70,532

 
58,624

 
192,241

 
167,346

Provision for income taxes
(1,979
)
 
(2,650
)
 
(5,771
)
 
(5,144
)
Income from continuing operations, net of tax
68,553

 
55,974

 
186,470

 
162,202

Income from discontinued operations, net of tax

 
13,949

 
16,216

 
13,949

Net income
68,553

 
69,923

 
202,686

 
176,151

Less: Net income attributable to noncontrolling interest
(46,038
)
 
(50,439
)
 
(138,358
)
 
(127,691
)
Net income attributable to Class A shareholders
$
22,515

 
$
19,484

 
$
64,328

 
$
48,460

 
 
 
 
 
 
 
 
Weighted average Class A shares outstanding:
 
 
 
 
 
 
 
Basic
93,165,443

 
71,005,052

 
89,440,552

 
70,991,129

Diluted
93,322,940

 
71,201,791

 
89,645,109

 
71,174,270

 
 
 
 
 
 
 
 
Net income per share attributable to Class A shareholders (basic):
 
 
 
 
 
 
 
Income from continuing operations
$
0.24

 
$
0.22

 
$
0.67

 
$
0.63

Income from discontinued operations

 
0.05

 
0.05

 
0.05

Net income per Class A share
$
0.24

 
$
0.27

 
$
0.72

 
$
0.68

 
 
 
 
 
 
 
 
Net income per share attributable to Class A shareholders (diluted):
 
 
 
 
 
 
 
Income from continuing operations
$
0.24

 
$
0.22

 
$
0.67

 
$
0.63

Income from discontinued operations

 
0.05

 
0.05

 
0.05

Net income per Class A share
$
0.24

 
$
0.27

 
$
0.72

 
$
0.68


Page 5 of 6



MGM GROWTH PROPERTIES LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)

 
September 30, 2019
 
December 31, 2018
ASSETS
Real estate investments, net
$
10,894,121

 
$
10,506,129

Lease incentive asset
532,186

 

Cash and cash equivalents
153,526

 
3,995

Tenant and other receivables, net
463

 
7,668

Prepaid expenses and other assets
27,413

 
34,813

Above market lease, asset
41,834

 
43,014

Operating lease right-of-use assets
280,020

 

Assets held for sale

 
355,688

Total assets
$
11,929,563

 
$
10,951,307

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
 
 
 
Debt, net
$
4,847,408

 
$
4,666,949

Due to MGM Resorts International and affiliates
298

 
227

Accounts payable, accrued expenses and other liabilities
59,937

 
20,796

Above market lease, liability

 
46,181

Accrued interest
37,407

 
26,096

Dividend and distribution payable
138,730

 
119,055

Deferred revenue
95,306

 
163,926

Deferred income taxes, net
29,721

 
33,634

Operating lease liabilities
336,452

 

Liabilities related to assets held for sale

 
28,937

Total liabilities
5,545,259

 
5,105,801

Commitments and contingencies
 
 
 
Shareholders’ equity
 
 
 
Class A shares: no par value, 1,000,000,000 shares authorized, 95,468,067 and 70,911,166 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively

 

Additional paid-in capital
2,307,463

 
1,712,671

Accumulated deficit
(216,824
)
 
(150,908
)
Accumulated other comprehensive income (loss)
(16,129
)
 
4,208

Total Class A shareholders’ equity
2,074,510

 
1,565,971

Noncontrolling interest
4,309,794

 
4,279,535

Total shareholders’ equity
6,384,304

 
5,845,506

Total liabilities and shareholders’ equity
$
11,929,563

 
$
10,951,307



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