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MGM Growth Properties Reports Third Quarter Financial Results


MGM Growth Propertie

iCrowdNewswire   Nov 4, 2020  12:41 PM ET

 MGM Growth Properties LLC reported financial results for the quarter ended September 30, 2020. Earnings attributable to MGP’s Class A shareholders for the quarter was $43.4 million, or $0.34 per diluted share.

Other financial highlights for the third quarter of 2020 included:

“We are pleased with our industry leading performance during the quarter and are further encouraged now that all the properties in our portfolio have been re-opened to the public,” said James Stewart, CEO of MGM Growth Properties. “We continued to collect 100% of our rent through October, demonstrating the strength of our master lease and liquidity position of our tenant despite the ongoing economic challenges caused by COVID-19. We continue to seek opportunities to grow our portfolio and execute on our business strategy to prudently deliver shareholder value.”

The following table provides a reconciliation of MGP’s net income to FFO, AFFO and Adjusted EBITDA for the three months ended September 30, 2020 (in thousands, except unit and per unit amounts):

 

Three Months Ended
September 30, 2020

Reconciliation of Non-GAAP Financial Measures

 

Net income

$

97,408

 

Depreciation

58,240

 

Share of depreciation of unconsolidated affiliate

10,464

 

Property transactions, net

 

Funds From Operations

166,112

 

Amortization of financing costs and cash flow hedges

6,003

 

Share of amortization of financing costs of unconsolidated affiliate

65

 

Non-cash compensation expense

639

 

Straight-line rental revenues, excluding lease incentive asset

13,632

 

Share of straight-line rental revenues of unconsolidated affiliate

(12,866)

 

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

4,627

 

Acquisition-related expenses

 

Non-cash ground lease rent, net

260

 

Other expenses

36

 

Gain on unhedged interest rate swaps

(7,701)

 

Provision for income taxes

2,732

 

Adjusted Funds From Operations

173,539

 

Interest income

(533)

 

Interest expense

59,974

 

Share of interest expense of unconsolidated affiliate

13,731

 

Amortization of financing costs and cash flow hedges

(6,003)

 

Share of amortization of financing costs of unconsolidated affiliate

(65)

 

Adjusted EBITDA

$

240,643

 
   

Weighted average Operating Partnership units outstanding

 

Basic

303,579,950

 

Diluted

303,712,557

 
   

Net income per Operating Partnership units outstanding

 

Basic

$

0.32

 

Diluted

$

0.32

 
   

FFO per Operating Partnership unit

 

Diluted

$

0.55

 
   

AFFO per Operating Partnership unit

 

Diluted

$

0.57

 

The Company had $655.2 million of cash and cash equivalents as of September 30, 2020. Cash received from rent payments for the three months ended September 30, 2020 was $206.9 million. Cash received from distributions from our unconsolidated affiliate, MGP BREIT Venture, for the three months ended September 30, 2020 was $22.9 million.

On October 15, 2020, the Operating Partnership made a cash distribution of $147.9 million relating to the third quarter dividend, $83.9 million of which was paid to subsidiaries of MGM Resorts and $64.1 million of which was paid to MGP. Simultaneously, MGP paid a cash dividend of $0.4875 per share.

“Our balance sheet remains strong and flexible to capitalize on future accretive opportunities, including the opportunity to redeem an additional $700 million of units from MGM,” said Andy Chien, CFO of MGM Growth Properties. “We have no debt maturities until 2023 and our pro rata net leverage of 4.6x remains below our long-term target of 5.0-5.5x.”

The Company’s debt at September 30, 2020 was as follows (in thousands):

 

September 30, 2020

Senior secured credit facility:

 

Senior secured revolving credit facility

$

100,000

 

5.625% senior notes, due 2024

1,050,000

 

4.625% senior notes, due 2025

800,000

 

4.50% senior notes, due 2026

500,000

 

5.75% senior notes, due 2027

750,000

 

4.50% senior notes, due 2028

350,000

 

Total principal amount of long-term debt

3,550,000

 

Less: Unamortized discount and debt issuance costs

(33,523)

 

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

$

3,516,477

 

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 session. The call will be accessible by webcast at 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 3582723. A replay of the call will be available through Monday, November 9, 2020. The replay may be accessed by dialing 1-877-344-7529 or 1-412-317-0088. The replay access code is 10149335. The call will be archived at www.mgmgrowthproperties.com. In addition, MGP will post supplemental slides today on its website at http://www.mgmgrowthproperties.com/events-and-presentations, which includes a reconciliation of MGP’s pro rata net leverage.

  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 depreciation, as defined by the National Association of Real Estate Investment Trusts, plus our share of depreciation of our unconsolidated affiliate.
  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 rental revenue (which is defined as the difference between contractual rent and cash rent payments, excluding lease incentive asset amortization); our share of straight-line rental revenues of our unconsolidated affiliate; 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; gain on unhedged interest rate swaps; 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); depreciation; our share of depreciation of our unconsolidated affiliate; amortization of financing costs and cash flow hedges; non-cash compensation expense; straight-line rent; our share of straight-line rental revenues of our unconsolidated affiliate; 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; gain on unhedged interest rate swaps; our share of provision for income taxes of our unconsolidated affiliate; interest income; interest expense (including amortization of financing costs and cash flow hedges); our share of interest expense of our unconsolidated affiliate, 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 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.



Contact Information:

www.mgmgrowthproperties.com.








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