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MGM Growth Properties Reports Fourth Quarter And Full Year Financial Results

 
MGM Growth Properties reported financial results for the quarter and year ended December 31, 2020. Net income attributable to MGP Class A shareholders for the quarter was $41.5 million, or $0.31 per dilutive share, and for the year ended December 31, 2020 was $76.1 million, or $0.59 per dilutive share.
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Financial highlights for the fourth quarter of 2020:

Consolidated rental revenue of $188.3 million;
Consolidated net income of $91.3 million, or $0.31 per diluted Operating Partnership unit;
Consolidated Funds From Operations(1) ("FFO") of $160.1 million, or $0.54 per diluted Operating Partnership unit;
Consolidated Adjusted Funds From Operations(2) ("AFFO") of $169.6 million, or $0.57 per diluted Operating Partnership unit;
Consolidated Adjusted EBITDA(3) ("Adjusted EBITDA") of $240.2 million;
General and administrative expenses of $4.0 million; and
Income from unconsolidated affiliate of $25.0 million.

Financial highlights for the year ended December 31, 2020:

Consolidated rental revenue of $768.4 million;
Consolidated net income of $160.4 million for the year, or $0.52 per diluted Operating Partnership unit;
FFO of $629.2 million for the year, or $2.02 per diluted Operating Partnership unit;
AFFO of $703.7 million for the year, or $2.26 per diluted Operating Partnership unit;
Adjusted EBITDA of $955.3 million for the year;
General and administrative expenses of $16.1 million; and
Income from unconsolidated affiliate of $89.1 million.

On December 2, 2020, the Operating Partnership redeemed and retired 23.5 million Operating Partnership units for cash, which represented the remaining $700 million under its previously announced agreement with MGM Resorts International ("MGM") to deliver cash for up to $1.4 billion of MGM's existing Operating Partnership units. As of December 31, 2020, there were approximately 280.0 million Operating Partnership units outstanding in the Operating Partnership of which MGM owned approximately 148.5 million, or 53.0%, of the Operating Partnership units in the Operating Partnership while MGP owns the remaining 47.0%.

"While 2020 presented a unique set of challenges, MGP successfully completed transactions that put us on a solid footing to continue to execute on our long-term business strategy. We acquired majority ownership of the real estate assets of the MGM Grand Las Vegas through our joint venture with Blackstone and completed $1.4 billion of unit redemption transactions that helped grow the company and diversify our shareholder base," said James Stewart, CEO of MGM Growth Properties. "The strength of our business model was again demonstrated through our 100% rent collection record and 3.7% annualized dividend increase over the year. We remain focused on continuing to grow the company and deliver long-term shareholder value."

Financial Position

The Company had $626.4 million of cash and cash equivalents as of December 31, 2020. Cash received from rent payments under the Master Lease for the quarter and year ended December 31, 2020 was $206.9 million and $840.1 million, respectively. Cash received from distributions from the unconsolidated affiliate, MGP BREIT Venture, for the quarter and year ended December 31, 2020 was $22.9 million and $81.0 million, respectively.

On January 15, 2021, the Operating Partnership made a cash distribution of $136.5 million relating to the fourth quarter dividend, $72.4 million of which was paid to MGM and $64.1 million of which was paid to MGP. Simultaneously, MGP paid a cash dividend of $0.4875 per share.

"During the fourth quarter, we successfully completed the issuance of $750 million in aggregate principal amount of 3.875% senior notes due 2029, which was upsized from the initial offering of $500 million. The offering permanently financed the unit redemption at the lowest interest rate for a bond offering in our company's history," said Andy Chien, CFO of MGM Growth Properties. "Our pro rata net leverage of 5.3x is within our long-term target of 5.0-5.5x and our balance sheet remains well positioned to capitalize on future growth opportunities."

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