Table of Contents

Filed Pursuant to Rule 424(b)(5)
Registration No. 333-218090

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of Securities to be Registered		Amount to be Registered(1)		Proposed Maximum Offering Price Per Share		Proposed Maximum Aggregate Offering Price		Amount of Registration Fee(2)
Class A shares representing limited liability company interests		13,225,000		$30.60		$404,685,000		$46,903

(1)	Includes 1,725,000 Class A shares subject to the underwriters’ overallotment option to purchase additional shares from us.

(2)	Calculated in accordance with Rule 457(o) Rule 457(r) under the Securities Act of 1933, as amended. This “Calculation of Registration Fee” table shall be deemed to update the “Calculation of Registration Fee” table in the registrant’s Registration Statement on Form S-3ASR (File No. 333-218090).

---

Table of Contents

 

Prospectus Supplement

(To prospectus dated May 18, 2017)

11,500,000 Shares

 

 

MGM Growth Properties LLC

Class A Shares

 

 

This is an offering by MGM Growth Properties LLC (“MGP”). We are offering 11,500,000 Class A common shares representing limited liability company interests (the “Class A shares”) of MGP. The Class A shares are listed on The New York Stock Exchange under the symbol “MGP.” The last reported sale price of Class A shares on The New York Stock Exchange on September 6, 2017 was $30.98 per share.

 

 

An investment in MGP’s Class A shares involves risks. See “Risk Factors” beginning on page S-16 of this prospectus supplement and the risks set forth under the caption “Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2016, which is incorporated by reference herein.

 

		Per Share				Total
Public offering price		$	30.60			$	351,900,000
Underwriting discount(1)		$	1.224			$	14,076,000
Proceeds, before expenses, to us		$	29.376			$	337,824,000

 

(1)	We refer you to “Underwriting” beginning on page S-33 of this prospectus supplement for additional information regarding underwriting compensation.

The underwriters may also exercise their overallotment option to purchase an additional 1,725,000 Class A shares from us, at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus supplement.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES DESCRIBED HEREIN OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

NO GAMING OR REGULATORY AGENCY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The underwriters expect to deliver the Class A shares against payment in New York, New York on or about September 11, 2017 through the facilities of The Depository Trust Company.

 

 

Joint Book-Running Managers

 

BofA Merrill Lynch		Barclays		Deutsche Bank Securities		J.P. Morgan
Evercore ISI				Morgan Stanley

Co-Managers

 

BNP PARIBAS		Citigroup		Fifth Third Securities		SMBC Nikko		SunTrust Robinson Humphrey

 

Credit Agricole CIB		Citizens Capital Markets		Ladenburg Thalmann		Scotiabank		UBS Investment Bank		Union Gaming

Prospectus Supplement dated September 6, 2017

---

Table of Contents

TABLE OF CONTENTS

Prospectus Supplement

		Page
About This Prospectus Supplement			S-ii
Basis of Presentation			S-ii
Certain Operational and Non-U.S. GAAP Financial Measures of MGP			S-iii
Trademarks and Tradenames			S-iv
Cautionary Statement Concerning Forward-Looking Statements			S-v
Prospectus Supplement Summary			S-1
The Offering			S-9
Summary Historical Condensed Combined and Consolidated Statements and Pro Forma Financial Information			S-11
Risk Factors			S-16
Use of Proceeds			S-21
Unaudited Pro Forma Condensed Combined and Consolidated Financial Information			S-23
Market Price of the Class A Shares and Dividend History			S-32
Underwriting			S-33
Legal Matters			S-39
Experts			S-39
Incorporation of Certain Information by Reference			S-39
Annex  I Unaudited Reconciliation of Non-U.S. GAAP Measures of MGM			S-A1-1
Annex  II Calculation of MGM Historical Corporate Rent Coverage Ratio			S-A2-1

Prospectus

 

About This Prospectus			1
Cautionary Statement Concerning Forward-Looking Statements			3
Ratio of Earnings to Combined Fixed Charges and Preferred Share Distributions			5
The Company			6
Risk Factors			8
Use of Proceeds			8
Description of Shares			9
Description of Depositary Shares			22
Description of Warrants			25
Material U.S. Federal Income Tax Considerations			27
Selling Security Holders			49
Plan of Distribution			49
Legal Matters			49
Experts			49
Where You Can Find More Information			49
Incorporation of Certain Information by Reference			50

 

S-i

---

Table of Contents

ABOUT THIS PROSPECTUS SUPPLEMENT

This prospectus supplement is a supplement to the accompanying base prospectus that is also a part of this document. This prospectus supplement and the accompanying base prospectus are part of a “shelf” registration statement that we filed with the Securities and Exchange Commission (the “Commission”). The shelf registration statement was deemed effective by the Commission upon filing on May 18, 2017. By using a shelf registration statement, we may sell any combination of the securities described in the base prospectus from time to time in one or more offerings. In this prospectus supplement, we provide you with specific information about the terms of this offering.

You should rely only on the information or representations incorporated by reference or provided in this prospectus supplement and the accompanying prospectus or in any free writing prospectus filed by us with the Commission. We have not and the underwriters have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. If the description of this offering varies between this prospectus supplement and the accompanying prospectus, you should rely on the information contained in or incorporated by reference in this prospectus supplement. You may obtain copies of the shelf registration statement, or any document which we have filed as an exhibit to the shelf registration statement or to any other Commission filing, either from the Commission or from the Secretary of MGP as described under “Where You Can Find More Information” in the accompanying prospectus. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus or any free writing prospectus is accurate as of any date other than the date on the front cover of this prospectus supplement or the date of the accompanying prospectus, free writing prospectus or any such document incorporated by reference, as applicable. Our business, financial condition, results of operations and prospects may have changed since that date.

BASIS OF PRESENTATION

Unless otherwise stated, or the context otherwise requires, references in this prospectus to “we,” “us,” “our,” “our company,” “the company” or “MGP” are to MGM Growth Properties LLC and its consolidated subsidiaries, including MGM Growth Properties Operating Partnership LP, a Delaware limited partnership. MGM Growth Properties Operating Partnership LP is the entity through which MGP conducts substantially all of its business and owns substantially all of its assets. In addition, we sometimes refer to MGM Growth Properties Operating Partnership LP as the “Operating Partnership.” References in this prospectus to “MGM” are to MGM Resorts International, a Delaware corporation, and, unless the context requires otherwise, its consolidated subsidiaries, including MGP.

Unless otherwise indicated, the information in this prospectus supplement assumes no exercise by the underwriters of their overallotment option to purchase additional Class A shares.

 

S-ii

---

Table of Contents

CERTAIN OPERATIONAL AND NON-U.S. GAAP FINANCIAL MEASURES OF MGP

Pro forma Funds From Operations (“FFO”) is a financial measure that is not prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and is considered a supplement to U.S. GAAP measures for the real estate industry. We define pro forma FFO as pro forma net income (computed in accordance with U.S. GAAP), excluding pro forma gains and losses from sales or disposals of real property (presented as property transactions, net), plus real estate depreciation, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”).

We define pro forma Adjusted Funds From Operations (“AFFO”) as pro forma FFO as adjusted for pro forma amortization and write-off of financing costs and cash flow hedge amortization, the net amortization of the above market lease, non-cash compensation expense, acquisition-related expenses, the provision for income taxes, and the net effect of straight-line rent, ground lease and amortization of deferred revenue.

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

Pro forma FFO, pro forma AFFO and pro forma Adjusted EBITDA are supplemental performance measures that have not been prepared in conformity with 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. Pro forma Adjusted EBITDA is useful to investors to further supplement pro forma FFO and pro forma AFFO and to provide investors a performance metric which excludes interest expense. In addition to non-cash items, the Company adjusts pro forma AFFO and pro forma 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.

Pro forma FFO, pro forma AFFO and pro forma Adjusted EBITDA do not represent cash flow from operations as defined by U.S. GAAP, should not be considered as an alternative to pro forma 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 pro forma FFO, pro forma AFFO and pro forma 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.

Please see “Prospectus Supplement Summary—Summary Historical Condensed Combined and Consolidated Financial Statements and Pro Forma Financial Information—Reconciliation of Pro Forma Net Income to Pro Forma FFO, AFFO and Adjusted EBITDA” for a reconciliation of our pro forma net income to pro forma FFO, pro forma AFFO and pro forma Adjusted EBITDA.

A subsidiary of MGM (the “Tenant”) is currently the sole lessee under our master lease agreement (the “Master Lease”), and MGM guarantees the Tenant’s performance and payments under the Master Lease. In order to evaluate the business results of casino resorts, MGM monitors their net revenues and Adjusted Property EBITDA. MGM uses Adjusted Property EBITDA as the primary performance measure for its reportable segments. Adjusted EBITDA is a measure defined as earnings before interest and other non-operating income

 

S-iii

---

Table of Contents

(expense), taxes, depreciation and amortization, preopening and start-up expenses and property transactions, net. Adjusted Property EBITDA is a measure defined as Adjusted EBITDA before corporate expense and stock compensation expense related to MGM’s and MGP’s stock option plan, not allocated to each casino resort. Adjusted EBITDA or Adjusted Property EBITDA should not be construed as an alternative to operating income or net income as an indicator of MGM’s performance; an alternative to cash flows from operating activities, a measure of liquidity; or as any other measure determined in accordance with U.S. GAAP. MGM has significant uses of cash flows, including capital expenditures, interest payments, taxes and debt principal repayments, which are not reflected in Adjusted EBITDA or Adjusted Property EBITDA. Also, other companies in the gaming and hospitality industries that report Adjusted EBITDA or Adjusted Property EBITDA information may calculate Adjusted EBITDA or Adjusted Property EBITDA in a different manner.

Please see Annex I of this prospectus supplement for a reconciliation of MGM’s Adjusted EBITDA and Adjusted Property EBITDA to net income (loss) and MGM’s operating income (loss) to Adjusted Property EBITDA and Adjusted EBITDA, all as reported by MGM.

TRADEMARKS AND TRADENAMES

The names of the brands of our casino resorts that are operated by MGM are registered trademarks of the respective owners of those brands, and neither they nor any of their officers, directors, agents or employees:

 

•

have approved any disclosure in which they or the names of their brands appear; or

 

•

are responsible or liable for any of the content in this document.

 

S-iv

---

Table of Contents

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This prospectus supplement and the accompanying prospectus includes or incorporates by reference “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “may,” “will,” “pro forma” and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements we make regarding our ability to meet our financial and strategic goals and our ability to further grow its portfolio and drive shareholder value. The foregoing is not a complete list of all forward-looking statements we make.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Therefore, we caution you against relying on any of these forward-looking statements. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

 

•

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.

 

•

We depend on our properties for all of our anticipated cash flows.

 

•

We may not be able to re-lease our properties following the expiration or termination of the Master Lease (as defined under “Prospectus Supplement Summary—Business”).

 

•

Our sole material assets are units representing limited partner interests in the Operating Partnership (“Operating Partnership units”) representing 23.7% 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. Because our interest in the Operating Partnership represents our only cash-generating asset, our cash flows and distributions depend entirely on the performance of the Operating Partnership and its ability to distribute cash to us.

 

•

The Master Lease restricts our ability to sell the properties or our interests in the Operating Partnership and Landlord (as defined under “Prospectus Supplement Summary—Business”).

 

•

We will have future capital needs and may not be able to obtain additional financing on acceptable terms.

 

•

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.

 

•

Rising expenses could reduce cash flow and funds available for future acquisitions and distributions.

 

•

We have a limited operating history and the historical financial information and pro forma financial information included or incorporated by reference into this prospectus supplement or the accompanying prospectus may not be a reliable indicator of future results.

 

•

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.

 

•

Because a majority of our major gaming resorts are concentrated on the Las Vegas Strip (the “Strip”), we are subject to greater risks than a company that is more geographically diversified.

 

•

Our pursuit of investments in, and acquisitions or development of, additional properties (including our proposed acquisition of MGM National Harbor or any other ROFO Property (as defined under

 

S-v

---

Table of Contents

“Prospectus Supplement Summary—Overview of the Proposed MGM National Harbor Transaction”)) may be unsuccessful or fail to meet our expectations.

 

•

We may face extensive regulation from gaming and other regulatory authorities, and our operating agreement provides that any of our Class A shares held by investors who are found to be unsuitable by state gaming regulatory authorities are subject to redemption.

 

•

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.

 

•

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.

 

•

Our dividend yield could be reduced if we were to sell any of our properties in the future.

 

•

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.

 

•

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.

 

•

We are controlled by MGM, whose interests in our business may conflict with yours.

 

•

We are dependent on MGM for the provision of administration services to our operations and assets.

 

•

MGM’s historical results may not be a reliable indicator of its future results.

 

•

MGM’s historical corporate rent coverage ratio described in this prospectus supplement may not be a reliable indicator of its future results.

 

•

Our operating agreement contains provisions that reduce or eliminate duties (including fiduciary duties) of our directors, officers and others.

 

•

If MGM engages in the same type of business we conduct, our ability to successfully operate and expand our business may be hampered.

 

•

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 the event of a bankruptcy of the Tenant (as defined under “Prospectus Supplement Summary—Business”), 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.

 

•

MGM may undergo a change of control without the consent of us or of our shareholders.

 

•

If we do not qualify to be taxed as a REIT, or fail 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.

 

•

Legislative or other actions affecting REITs could have a negative effect on us.

 

•

We may be unable to complete the MGM National Harbor Transaction, or may not consummate it on the terms described in this prospectus supplement.

Any forward-looking statement made by us in this prospectus supplement and the accompanying prospectus or included or incorporated herein or therein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. If we update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements.

 

S-vi

---

Table of Contents

 

S-1

---

Table of Contents

 

S-2

---

Table of Contents

 

S-3

---

Table of Contents

 

S-4

---

Table of Contents

 

S-5

---

Table of Contents

 

S-6

---

Table of Contents

 

S-7

---

Table of Contents

 

S-8

---

Table of Contents

 

S-9

---

Table of Contents

 

S-10

---

Table of Contents

 

S-11

---

Table of Contents

 

S-12

---

Table of Contents

 

S-13

---

Table of Contents

 

S-14

---

Table of Contents

 

S-15

---

Table of Contents

RISK FACTORS

Before you decide to invest in the Class A shares, you should be aware that investment in the Class A shares carries various risks, including those described below, that could have a material adverse effect on our business, financial position, results of operations and cash flows. We urge you to carefully consider these risk factors, together with all of the other information included and incorporated by reference in this prospectus supplement and the accompanying prospectus, before you decide to invest in the Class A shares. In addition, we identify other factors that could affect our business in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017, all of which are incorporated by reference herein.

Risks Related to the MGM National Harbor Transaction

We may be unable to complete the MGM National Harbor Transaction, or may not consummate it on the terms described herein.

This offering is expected to be completed prior to the closing of the MGM National Harbor Transaction. We expect to consummate the MGM National Harbor Transaction during the fourth quarter of 2017, and intend to apply all of the net proceeds from this offering to fund a portion of the MGM National Harbor Transaction, including the repayment of $425.0 million of assumed debt which represents the outstanding amount of the MGM National Harbor term loan. See “Use of Proceeds.” The consummation of the MGM National Harbor Transaction, however, is subject to certain customary regulatory and other closing conditions, which make its completion and timing uncertain, and, accordingly, there can be no assurance that such conditions will be satisfied on the anticipated schedule or at all.

This offering is not conditioned upon the completion of the MGM National Harbor Transaction, and by purchasing our Class A shares in this offering, you are investing in us on a stand-alone basis and recognize that we may not consummate the MGM National Harbor Transaction or realize the expected benefits therefrom if we do. In the event that we fail to consummate the MGM National Harbor Transaction, we will have issued a significant number of additional Class A shares and we will not have acquired the revenue and cash flow generating assets of MGM National Harbor. In addition, in the event that we fail to consummate the MGM National Harbor Transaction, we intend to use the net proceeds from this offering for working capital and general corporate purposes, which may include the acquisition and improvement of properties, the repayment of indebtedness, capital expenditures and other general business purposes. However, we would have broad authority to use the net proceeds of this offering for these and other purposes that could adversely affect our earnings, FFO and AFFO per share and our ability to make distributions to Class A shareholders.

If the MGM National Harbor Transaction is not completed, we could be subject to a number of risks that may adversely affect our business and the market price of our common shares, including:

 

•

we will be required to pay costs relating to the MGM National Harbor Transaction, such as legal, accounting, financial advisory and printing fees, whether or not the transaction is completed;

 

•

time and resources committed by our management to matters relating to the MGM National Harbor Transaction could otherwise have been devoted to pursuing other beneficial opportunities;

 

•

the market price of our Class A shares could decline to the extent that the current market price reflects a market assumption that the MGM National Harbor Transaction will be completed; and

 

•

we would not realize the benefits we expect to realize from consummating the MGM National Harbor Transaction.

We cannot provide any assurance that the MGM National Harbor Transaction will be completed or that there will not be a delay in the completion of the MGM National Harbor Transaction. Furthermore, our ability to raise the amount of capital necessary to fund the MGM National Harbor Transaction is subject to market and economic

 

S-16

---

Table of Contents

conditions. If the MGM National Harbor Transaction is not consummated, our reputation in our industry and in the investment community could be damaged, and the market price of our Class A shares could decline.

The completion of the MGM National Harbor Transaction is subject to the receipt of approvals, consents or clearances from regulatory authorities that may impose conditions that could have an adverse effect on us or, if not obtained, could prevent completion of the MGM National Harbor Transaction.

Completion of the MGM National Harbor Transaction is conditioned upon the receipt of certain governmental approvals, including, without limitation, gaming regulatory approvals. Although we have agreed to use our commercially reasonable best efforts to obtain the requisite governmental approvals, there can be no assurance that these approvals will be obtained and that the other conditions to completing the MGM National Harbor Transaction will be satisfied. In addition, the governmental authorities from which the regulatory approvals are required may impose conditions on the completion of the MGM National Harbor Transaction or require changes to the terms of the acquisition or related agreements to be entered into in connection with the acquisition by us of the MGM National Harbor assets. Such conditions or changes and the process of obtaining regulatory approvals could have the effect of delaying or impeding consummation of the MGM National Harbor Transaction or of imposing additional costs or limitations on us following completion of the MGM National Harbor Transaction, any of which might have an adverse effect on us following completion of the MGM National Harbor Transaction.

The unaudited pro forma condensed combined and consolidated financial information contained in this prospectus supplement is presented for illustrative purposes only and is not necessarily indicative of what our financial position, operating results and other data would have been if the Formation Transactions, the Borgata Transaction, the MGM National Harbor Transaction and this offering had actually been completed on the dates indicated and is not intended to project such information for any future date or for any future period, as applicable.

The unaudited pro forma condensed combined and consolidated financial information included in this prospectus supplement was prepared on the basis of assumptions and estimates underlying the adjustments described in the accompanying notes, which are based on available information that we believe to be reasonable. In addition, such unaudited pro forma condensed combined and consolidated financial information does not reflect adjustments for other developments with our business or MGM National Harbor’s business after June 30, 2017. However, these assumptions may change or may be incorrect, and actual results may differ, perhaps significantly. Therefore, the unaudited pro forma condensed combined and consolidated financial information does not purport to represent what our financial position, operating results and other data would have been if the Formation Transactions, the Borgata Transaction, the MGM National Harbor Transaction and this offering had actually been completed on the dates indicated and is not intended to project such information for any future date or for any future period, as applicable. For additional information about the basis of presentation of the financial information included in this prospectus supplement, see “Unaudited Pro Forma Condensed Combined and Consolidated Financial Information” and the financial statements included or incorporated by reference elsewhere in this prospectus supplement.

We may have assumed unknown liabilities in connection with the Formation Transactions and Borgata Transaction and may assume unknown liabilities in connection with the MGM National Harbor Transaction.

As part of the Formation Transactions and Borgata Transaction, we acquired properties that may be subject to unknown existing liabilities, and as a part of the MGM National Harbor Transaction, the MGM National Harbor assets we intend to acquire may similarly 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 allocates (or, with respect to the MGM National Harbor assets, is expected to 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.

 

S-17

---

Table of Contents

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.

The Tenant may choose not to renew the Master Lease or seek to renegotiate the terms of the Master Lease at each renewal term, including at the end of the initial term of the Master Lease with respect to MGM National Harbor.

The Master Lease has an initial lease term of ten years with the potential to extend the term for four additional five-year terms thereafter, solely at the option of the Tenant. At the expiration of the initial lease term or of any additional renewal term thereafter, the Tenant may choose not to renew the Master Lease or seek to renegotiate the terms of the Master Lease.

Furthermore, upon the completion of the proposed MGM National Harbor Transaction, it is anticipated that the Master Lease will be amended to add MGM National Harbor, and the initial term of the Master Lease with respect to MGM National Harbor will be the period from the closing date of the MGM National Harbor Transaction until the last day of the calendar month that is eighty-two (82) months after that date. 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 ends related to the rest of the properties in 2026.

If the Master Lease expires without renewal, or the terms of the Master Lease are modified in a way which is adverse to us, our results of operations and our ability to maintain previous levels of distributions to unitholders and shareholders may be adversely affected.

Risks Related to Our Business and Operations

MGM’s historical corporate rent coverage ratio described in this prospectus supplement may not be a reliable indicator of its future results.

While the information regarding MGM’s historical corporate rent coverage ratio was prepared on the basis of assumptions and information that we believe to be reasonable, MGM’s actual results and corporate rent coverage ratio in the future may differ from the historical numbers presented, perhaps significantly, due to numerous factors, including the condition of the gaming markets in the regions in which MGM operates and the levels of dividends and distributions received by MGM from CityCenter, Grand Victoria and MGM China. In addition, MGM, its subsidiaries (including MGM China) and CityCenter have a significant amount of outstanding indebtedness, and the cash flow required to service such indebtedness, which is not accounted for in the calculation of MGM’s historical corporate rent coverage ratio, may impact the amount of actual cash MGM has available to satisfy its obligations under the Master Lease. Furthermore, on August 1, 2016, Borgata was added to the existing Master Lease between the Landlord and the Tenant. As a result, the initial annual rent amount under the Master Lease increased by $100.0 million to $650.0 million, prorated for the remainder of the first lease year after the Borgata Transaction. In addition, as a result of the first rent escalator that took effect on April 1, 2017, rent under the Master Lease increased by an additional $11.7 million. Furthermore, upon the completion of the proposed MGM National Harbor Transaction, it is anticipated that the Master Lease will be amended to add MGM National Harbor, increasing the annual rent amount under the Master Lease by $95.0 million to $756.7 million, prorated for the remainder of the lease year. The calculation of MGM’s historical corporate rent coverage ratio does not include the impact of the Borgata Transaction for the period prior to the Borgata Transaction during the year ended December 31, 2016, nor

 

S-18

---

Table of Contents

the anticipated impact of the MGM National Harbor Transaction. Management currently anticipates that the corporate rent coverage ratio for the year ending December 31, 2017 will be negatively impacted as a result of the contractual rent escalator in the Master Lease that went into effect on April 1, 2017 and the expected $95.0 million increase in annual rent under the Master Lease following the MGM National Harbor Transaction. Accordingly, you should not place undue reliance on such information, as it may not be indicative of MGM’s results or corporate rent coverage ratio in the future.

Risks Related to Our Class A Shares

An increase in market interest rates could cause potential investors to seek higher returns and therefore reduce demand for our Class A shares and result in a decline in our share price.

One of the factors that may influence the price of our Class A shares is the return on our shares (i.e., the amount of distributions as a percentage of the price of our shares) relative to market interest rates. An increase in market interest rates, which are currently at low levels relative to historical rates, may lead prospective purchasers of our Class A shares to expect a return which we may be unable or choose not to provide. Higher interest rates would likely increase our borrowing costs and potentially decrease the cash available for distribution. Thus, higher market interest rates could cause the market price of our Class A shares to decline.

Our cash available for distribution to shareholders may not be sufficient to continue 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 will be authorized and determined by our Board of Directors in its sole discretion out of funds legally available therefor. See “Market Price of the Class A Shares and Dividend History.” While we anticipate maintaining relatively stable distribution(s) during each year, the amount, timing and frequency of distributions will be at the sole discretion of the 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, if any, to fund distributions and applicable law.

For purposes of satisfying the minimum distribution requirement to qualify for and maintain REIT status, our taxable income will be calculated without reference to our cash flow. Consequently, under certain circumstances, we may not have available cash to pay our required distributions, and we may need to increase our borrowings in order to fund our intended distributions, or we may distribute a portion of our distributions in the form of our Class A shares, which could result in significant shareholder dilution, or in the form of our debt instruments. Pursuant to recent guidance issued by the IRS, certain part-stock and part-cash dividends distributed by publicly-traded REITs will be treated as dividends that satisfy the REIT annual distribution requirement and qualify for the dividends paid deduction for U.S. federal income tax purposes. There is no assurance, however, that we can structure part-stock and part-cash distributions in a manner that meets the requirements of the guidance. Therefore, it is unclear whether and to what extent we will be able to make taxable dividends payable in-kind. In addition, to the extent we were to make distributions that include our Class A shares or debt instruments, a shareholder of ours will be required to report dividend income as a result of such distributions even though we distributed no cash or only nominal amounts of cash to such shareholder.

The number of shares available for future sale could adversely affect the market price of our Class A shares.

We cannot predict whether future issuances of our shares or the availability of our Class A shares for resale in the open market will decrease the market price per share of our Class A shares. Sales of a substantial number of our Class A shares in the public market, or the perception that such sales might occur, could adversely affect the market price of our Class A shares. In addition, except as described herein, we, our directors and executive officers and MGM have agreed with the underwriters not to offer, pledge, sell, contract to sell or otherwise transfer or dispose of any shares or securities convertible into or exercisable or exchangeable for our Class A shares for a period of 60 days, after the completion of this offering; however, these lock-up agreements are

 

S-19

---

Table of Contents

subject to numerous exceptions and the representatives, on behalf of the underwriters, may waive these lock-up provisions without notice. If any or all of these holders cause a large number of their shares to be sold in the public market, the sales could reduce the trading price of our Class A shares and could impede our ability to raise future capital. In addition, the exercise of the underwriters’ overallotment option to purchase additional Class A shares or other future issuances of our shares would be dilutive to existing shareholders.

If securities or industry press or analysts cease covering our Class A shares, publish negative research or reports about our business, or if they change their recommendations regarding our Class A shares adversely, our Class A share price and trading volume could decline.

The trading market for our Class A shares may be influenced by the articles, research and reports that industry or securities analysts and press publish about us or our business. If one or more of the analysts who cover us downgrade our Class A shares, or if industry press publishes negative articles about our company, our Class A share price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our Class A share price or trading volume to decline.

There may be future sales or other dilution of MGP’s equity, which may adversely affect the market price of the Class A shares. Significant exercises of stock options could adversely affect the market price of our Class A shares.

As of September 1, 2017, there were 57,671,795 Class A shares issued and entitled to vote. In addition, as of September 1, 2017, 2,087,815 Class A shares were reserved for issuance pursuant to stock option and employee benefit plans, and 185,362,136 Class A shares convertible from Operating Partnership units held by MGM (not inclusive of 9,771,987 Operating Partnership units expected to be issued to a subsidiary of MGM in connection with the MGM National Harbor Transaction with an aggregate value of $300.0 million based on a price per unit equal to the closing price of the Company’s Class A shares on the NYSE on September 5, 2017. The sale, or availability for sale, of substantial amounts of our Class A shares in the public market, whether directly by us or resulting from the exercise of options, issuances under employee benefit plans or exchange of the Operating Partnership units held by MGM (and, where applicable, sales pursuant to Rule 144 under the Securities Act), would be dilutive to existing security holders, could adversely affect the prevailing market price of our Class A shares and could impair our ability to raise additional capital through the sale of equity securities.

Except as described under “Underwriting” with respect to the 60-day lock-up, MGP is not restricted from issuing additional Class A shares, including securities that are convertible into or exchangeable for, or that represent the right to receive, Class A shares. The issuance of additional Class A shares will dilute the ownership interest of existing shareholders. Sales of a substantial number of Class A shares or other equity-related securities in the public market could depress the market value of the Class A shares, and impair MGP’s ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of the Class A shares or other equity-related securities would have on the market price of the Class A shares.

Sales of the Class A shares in the public market or sales of any of our other securities could dilute ownership and earnings per share, and even the perception that such sales could occur could cause the market price of the Class A shares to decline. The market price of the Class A shares also could decline as a result of sales of the Class A shares made after this offering or the perception that such sales could occur.

 

S-20

---

Table of Contents

USE OF PROCEEDS

We estimate that the net proceeds from this offering, after the deduction of the underwriting discounts and commissions and our estimated expenses, will be approximately $335.9 million (or $386.6 million if the underwriters exercise their option to purchase additional Class A shares in full).

We intend to use the net proceeds of this offering, together with the proceeds from approximately $370.6 million of additional indebtedness and $200.0 million of cash on hand, to (i) refinance the $425.0 million of debt to be assumed in connection with the MGM National Harbor Transaction, representing the amount outstanding under the MGM National Harbor term loan, (ii) pay $462.5 million of cash consideration for the MGM National Harbor assets, and (iii) pay fees and expenses related to this offering, with the remainder, if any, for general corporate purposes. Any proceeds received in connection with the exercise by the underwriters of their overallotment option to purchase additional Class A shares will be used to pay a portion of the cash consideration for the purchase of the MGM National Harbor assets, repay a portion of the assumed debt or for general corporate purposes. To the extent the gross proceeds from this offering are less than $351.9 million, we expect to incur additional indebtedness under the Revolving Credit Facility equal to the difference to fund the purchase price. We intend to opportunistically access the debt capital markets to fund a portion of the cash consideration for the MGM National Harbor assets, but, absent such a capital markets financing, expect to draw on our Revolving Credit Facility in connection with the closing of the MGM National Harbor Transaction to fund a portion of the cash consideration, and, in the future, raise long-term debt financing to refinance such amounts drawn under the Revolving Credit Facility, subject to market and other conditions. To the extent that we refinance amounts outstanding under the Revolving Credit Facility with fixed-rate long-term debt financing, we anticipate that such fixed-rate debt financing would bear interest at a higher rate than our current variable interest rate debt obligations, including the Revolving Credit Facility.

Pending application of the net proceeds to us from this offering, we intend to invest such net proceeds temporarily in interest-bearing, short-term investment grade securities, money market accounts or checking accounts, in a manner that is consistent with our intention to maintain our qualification for taxation as a REIT.

The total purchase price for the MGM National Harbor assets will be $1,187.5 million, including 9,771,987 Operating Partnership units with an aggregate value of $300.0 million based on a price per unit equal to the closing price of the Company’s Class A shares on the NYSE on September 5, 2017. Pursuant to our operating agreement, the total purchase price has been conclusively deemed to be fair and reasonable by our board of directors, as the amount was negotiated and approved by our conflicts committee according to the Special Approval procedures required for such a determination. For more information on our conflicts committee procedures, see “Prospectus Supplement Summary—Overview of Management and Governance.”

As of June 30, 2017, the MGM National Harbor credit facility consisted of a $425 million term loan facility and a $100 million revolving credit facility. The term loan facility and revolving credit facility bear interest at LIBOR plus an applicable rate determined by MGM National Harbor’s total leverage ratio (2.25% as of June 30, 2017). The term loan facility and revolving credit facility are scheduled to mature in January 2021 and the term loan facility is subject to scheduled amortization payments on the last day of each calendar quarter beginning December 31, 2017, initially in an amount equal to 1.25% of the aggregate principal balance and increasing to 1.875% and 2.50% of the aggregate principal balance on December 31, 2019 and December 31, 2020, respectively. The outstanding balance at June 30, 2017 consisted of the $425 million term loan and $30 million drawn on the revolving credit facility. At June 30, 2017, the interest rate on the term loan facility was 3.48% and the interest rate on the revolving credit facility was 3.44%. In connection with the MGM National Harbor Transaction, MGM will repay the $30.0 million outstanding under the MGM National Harbor credit facility’s revolving credit facility.

This offering is not conditioned upon the successful completion of the MGM National Harbor Transaction. Accordingly, even if the MGM National Harbor Transaction does not occur, the Class A shares sold in this

 

S-21

---

Table of Contents

offering will remain outstanding, and we will not have any obligation to offer to repurchase any or all of such Class A shares. If the MGM National Harbor Transaction does not occur for any reason, we intend to use the net proceeds from this offering for working capital and general corporate purposes, which may include the acquisition and improvement of properties, the repayment of indebtedness, capital expenditures and other general business purposes. See “Risk Factors—Risks Related to the MGM National Harbor Transaction—We may be unable to complete the MGM National Harbor Transaction, or may not consummate it on the terms described herein.”

Affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are lenders under the Operating Partnership’s credit agreement and affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Fifth Third Securities, Inc., BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., SunTrust Robinson Humphrey, Inc. and SMBC Nikko Securities America, Inc. are lenders and/or agents under the MGM National Harbor term loan and may receive a portion of the net proceeds from this offering. See “Underwriting—Other Relationships” for more information.

 

S-22

---

Table of Contents

UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED FINANCIAL INFORMATION

MGP is a publicly traded controlled REIT, primarily engaged in the real property business, which consists of owning, acquiring and leasing large-scale destination entertainment and leisure resorts, whose tenants generally offer casino gaming, hotel, convention, dining, entertainment and retail. MGP conducts its operations through the Operating Partnership, a limited partnership formed in Delaware on January 6, 2016.

On April 25, 2016, MGM engaged in the Formation Transactions, in which certain subsidiaries of MGM transferred the IPO Properties to newly formed subsidiaries and subsequently transferred 100% ownership interest in such subsidiaries to the Operating Partnership pursuant to a Master Contribution Agreement in exchange for Operating Partnership units. These subsidiaries subsequently underwent a series of restructuring transactions resulting in the Operating Partnership owning 100% of the equity in MGP Lessor Holdings, LLC (“Holdings”) and Holdings owning 100% of the equity in the Landlord. In connection with the Formation Transactions, the Landlord leased the IPO Properties to the Tenant under the Master Lease. For periods prior to April 25, 2016, the financial statements of MGP represent the IPO Properties which have been determined to be MGP’s predecessor for accounting purposes.

On May 31, 2016, MGM entered into a definitive agreement to acquire Boyd Gaming’s ownership interest in Borgata and completed the acquisition of Borgata on August 1, 2016. Pursuant to a master transaction agreement by and between MGM, MGP, the Operating Partnership, the Landlord and the Tenant, concurrently with the acquisition, MGM transferred all of Borgata’s real estate assets to the Landlord in the Borgata Transaction. A subsidiary of MGM operates Borgata.

The Master Lease provides MGP with a right of first offer with respect to MGM National Harbor in Maryland, which commenced operations on December 8, 2016, and MGM’s development property located in Springfield, Massachusetts, which may be exercised upon MGM’s election to sell these properties. Pursuant to this right under the Master Lease, MGM has notified MGP of its election to assign the MGM National Harbor assets and offered MGP the right to purchase the MGM National Harbor assets.

MGP intends to acquire the MGM National Harbor assets in the MGM National Harbor Transaction pursuant to which MGM National Harbor, a subsidiary of MGM, will assign the MGM National Harbor assets to the Operating Partnership in exchange for a combination of cash, the assumption of certain debt from MGM National Harbor and the issuance of Operating Partnership units by the Operating Partnership to MGM National Harbor. MGP intends to fund the acquisition, in part, with net proceeds from the issuance and sale of Class A shares of approximately $335.9 million (assuming that the underwriters do not exercise any of their overallotment option to purchase additional Class A shares).

The MGM National Harbor Transaction, in which the MGM National Harbor assets will be assigned from a subsidiary of MGM to the Landlord is considered to be between legal entities under common control and has been accounted for under the common control subsections of ASC 805. Under the common control subsections of ASC 805, such assets are recorded by MGP on the same basis as that established by MGM. Any difference between the basis of the real estate assets contributed by MGM and the purchase price consideration paid by MGP is recorded as an adjustment to equity.

The following unaudited pro forma condensed combined and consolidated financial information has been prepared in accordance with Article 11 of Regulation S-X to reflect the effects of the Formation Transactions, the Borgata Transaction, the MGM National Harbor Transaction and this offering on MGP’s financial statements. Such information is based on certain assumptions that management currently believes are directly attributable to these transactions, factually supportable and, with respect to the statements of operations, expected to have a continuing impact on MGP’s consolidated results.

 

S-23

---

Table of Contents

The unaudited pro forma condensed consolidated balance sheet as of June 30, 2017 presents the condensed consolidated balance sheet of MGP and gives effect to the MGM National Harbor Transaction and this offering as if they had occurred on June 30, 2017. The unaudited pro forma condensed combined and consolidated statement of operations for the year ended December 31, 2016 and unaudited pro forma condensed combined and consolidated statement of operations for the six months ended June 30, 2017 present the condensed combined and consolidated statements of operations of MGP, giving effect to the Formation Transactions, the Borgata Transaction, the MGM National Harbor Transaction and this offering as if they had occurred on January 1, 2016. The unaudited pro forma condensed combined and consolidated financial information should be read in conjunction with the accompanying notes to the unaudited pro forma condensed combined and consolidated financial information. In addition, the unaudited pro forma condensed combined and consolidated financial information was based on, and should be read in conjunction with, the following historical financial statements and accompanying notes:

 

•

separate condensed combined and consolidated financial statements of MGP as of, and for the six months ended, June 30, 2017, and the related notes contained in MGP’s and the Operating Partnership’s Combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the Commission on August 8, 2017; and

 

•

separate combined and consolidated financial statements of MGP as of, and for the year ended, December 31, 2016, and the related notes contained in MGP’s and the Operating Partnership’s Combined Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Commission on March 6, 2017.

The unaudited pro forma condensed combined and consolidated financial information is provided for informational purposes only. The unaudited pro forma condensed combined and consolidated financial information does not purport to represent what MGP’s results of operations or financial condition would have been had the Formation Transactions, the Borgata Transaction, the MGM National Harbor Transaction and this offering had actually occurred on the dates indicated and does not purport to project MGP’s results of operations or financial condition for any future period or as of any future date. In addition, the unaudited pro forma condensed combined and consolidated financial information has not been adjusted to reflect any matters not directly attributable to implementing the Formation Transactions, the Borgata Transaction, the MGM National Harbor Transaction and this offering. No adjustment, therefore, has been made for actions that may be taken once the transactions closed, such as any of MGP’s integration plans related to National Harbor. As a result, the actual amounts recorded in the consolidated financial statements of MGP may differ from the amounts reflected in the unaudited pro forma condensed combined and consolidated financial information, and the differences may be material.

 

S-24

---

Table of Contents

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of June 30, 2017

(in thousands)

 

		MGP (Historical)				Pro Forma Adjustments (MGM National Harbor Transaction and this Offering) (a)				MGP (Pro Forma)
Assets
Real estate investments, net		$	8,957,622			$	1,140,019			$	10,097,641
Cash and cash equivalents			376,842				(200,000	)			176,842
Tenant and other receivables, net			4,166				—				4,166
Prepaid expenses and other assets			8,819				—				8,819
Above market lease, asset			45,374				—				45,374
Total assets		$	9,392,823			$	940,019			$	10,332,842
Liabilities
Debt, net		$	3,601,214			$	370,600			$	3,971,814
Due to MGM Resorts International and affiliates			233				—				233
Accounts payable, accrued expenses and other liabilities			8,829				—				8,829
Above market lease, liability			47,513				—				47,513
Accrued interest			17,580				—				17,580
Dividend payable			95,995				—				95,995
Deferred revenue			88,747				—				88,747
Deferred income taxes, net			25,368				—				25,368
Total liabilities			3,885,479				370,600				4,256,079
Commitments and contingencies
Shareholders’ equity
Class A shares			—				—				—
Additional paid-in capital			1,370,370				303,089				1,673,459
Accumulated deficit			(56,914	)			(19,000	)			(75,914	)
Accumulated other comprehensive income (loss)			(680	)			—				(680	)
Total Class A shareholders’ equity			1,312,776				284,089				1,596,865
Noncontrolling interest			4,194,568				285,330				4,479,898
Total shareholders’ equity			5,507,344				569,419				6,076,763
Total liabilities and shareholders’ equity		$	9,392,823			$	940,019			$	10,332,842

 

S-25

---

Table of Contents

Unaudited Pro Forma Condensed Combined and Consolidated Statement of Operations

For the Year Ended December 31, 2016

(in thousands except share and per share amounts)

 

		MGP (Historical)				Pro Forma Adjustments (Formation Transactions) (1/1/2016- 4/25/2016)						Pro Forma Adjustment (Borgata Transaction) (1/1/2016- 8/1/2016)						MGP (Pro Forma Adjusted for Formation Transactions and Borgata Transaction)				Pro Forma Adjustment (MGM National Harbor Transaction and this Offering)						MGP (Pro Forma Combined)
Revenues
Rental revenue		$	419,239			$	174,897			(aa)		$	58,582			(aa)		$	652,718			$	95,397			(kk)		$	748,115
Tenant reimbursements and other			48,309				16,891			(bb)			3,530			(bb)			68,730				14,518			(ll)(mm)			83,248
			467,548				191,788						62,112						721,448				109,915						831,363
Expenses
Depreciation			220,667				—						22,731			(cc)			243,398				37,736			(nn)			281,134
Property transactions, net			4,684				—						—						4,684				—						4,684
Property taxes			65,120				—						3,530			(bb)			68,650				347			(ll)			68,997
Property insurance			2,943				(2,943	)		(dd)			—						—				—						—
Amortization of above market lease, net			286				—						398			(ee)			684				—						684
Acquisition-related expenses			10,178				—						(10,178	)		(ff)			—				—						—
General and administrative			9,896				367			(gg)			—						10,263				15,620			(mm)			25,883
			313,774				(2,576	)					16,481						327,679				53,703						381,382
Operating income (loss)			153,774				194,364						45,631						393,769				56,212						449,981
Non-operating income (expense)
Interest income			774				—						—						774				—						774
Interest expense			(116,212	)			(53,663	)		(hh)			(6,140	)		(hh)			(176,015	)			(13,568	)		(oo)			(189,583	)
Other non-operating			(726	)			—						—						(726	)			—						(726	)
			(116,164	)			(53,663	)					(6,140	)					(175,967	)			(13,568	)					(189,535	)
Income (loss) before income taxes			37,610				140,701						39,491						217,802				42,644						260,446
Provision for income taxes			(2,264	)			—						(4,107	)		(ii)			(6,371	)			—						(6,371	)
Net income (loss)			35,346				140,701						35,384						211,431				42,644						254,075
Less: Net (income) loss attributable to noncontrolling interest			(5,408	)			(123,666	)		(jj)			(30,790	)		(jj)			(159,864	)			(26,055	)		(pp)			(185,919	)
Net income attributable to Class A shareholders		$	29,938			$	17,035					$	4,594					$	51,567			$	16,589					$	68,156
Weighted average Class A shares outstanding:
Basic			57,502,158																57,502,158				11,500,000			(qq)			69,002,158
Diluted			57,751,489																57,751,489				11,500,000			(qq)			69,251,489
Per Class A share data
Net income per Class A share (basic)		$	0.52															$	0.90									$	0.99
Net income per Class A share (diluted)		$	0.52															$	0.89									$	0.98

 

S-26

---

Table of Contents

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the Six Months Ended June 30, 2017

(in thousands except share and per share amounts)

 

		MGP (Historical)				Pro Forma Adjustments (MGM National Harbor Transaction and this Offering)						MGP (Pro Forma Combined)
Revenues
Rental revenue		$	326,354			$	47,699			(kk)		$	374,053
Tenant reimbursements and other			42,001				13,896			(ll)(mm)			55,897
			368,355				61,595						429,950
Expenses
Depreciation			121,911				18,868			(nn)			140,779
Property transactions, net			17,442				—						17,442
Property taxes			41,129				6,811			(ll)			47,940
Property insurance			—				—						—
Amortization of above market lease, net			343				—						343
Acquisition-related expenses			—				—						—
General and administrative			5,341				7,810			(mm)			13,151
			186,166				33,489						219,655
Operating income (loss)			182,189				28,106						210,295
Non-operating income (expense)
Interest income			1,559				—						1,559
Interest expense			(89,454	)			(6,611	)		(oo)			(96,065	)
Other non-operating			(1,312	)			—						(1,312	)
			(89,207	)			(6,611	)					(95,818	)
Income (loss) before income taxes			92,982				21,495						114,477
Provision for income taxes			(2,415	)			—						(2,415	)
Net income (loss)			90,567				21,495						112,062
Less: Net (income) loss attributable to noncontrolling interest			(68,539	)			(13,566	)		(pp)			(82,105	)
Net income attributable to Class A shareholders		$	22,028			$	7,929					$	29,957
Weighted average Class A shares outstanding:
Basic			57,596,223				11,500,000			(qq)			69,096,223
Diluted			57,818,511				11,500,000			(qq)			69,318,511
Per Class A share data
Net income per Class A share (basic)		$	0.38									$	0.43
Net income per Class A share (diluted)		$	0.38									$	0.43

 

S-27

---

Table of Contents

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED FINANCIAL INFORMATION

Note 1—Balance Sheet Pro Forma Adjustments

Pro Forma Adjustments—MGM National Harbor Transaction and this Offering:

(a) The MGM National Harbor Transaction is accounted for under the common control subsections of ASC 805. Under the common control subsections of ASC 805, such assets are recorded by MGP on the same basis as that established by MGM. As of June 30, 2017, the company estimates the net carrying value of the MGM National Harbor assets was $1.14 billion, solely comprising the estimated net carrying value of the buildings and improvements at MGM National Harbor, including accumulated depreciation of $22.0 million. The land at MGM National Harbor is subject to a ground lease and not included in the estimate of the net carrying value of the MGM National Harbor assets.

MGP intends to purchase from MGM all of MGM National Harbor’s interest in the MGM National Harbor assets for consideration of approximately $1,187.5 million consisting of (i) cash consideration of $462.5 million, (ii) the assumption of MGM National Harbor’s $425.0 million term loan facility and (iii) the issuance of 9,771,987 Operating Partnership units to a subsidiary of MGM with an aggregate value of $300.0 million based on a price per unit equal to the closing price of the Company’s Class A shares on the NYSE on September 5, 2017. The difference between the basis of the real estate assets contributed by MGM and the purchase consideration is recorded as an adjustment to equity.

Cash consideration and transaction expenses directly attributable to the transaction, as well as the repayment of the $425.0 million MGM National Harbor term loan facility upon its assumption by the Operating Partnership, will be funded with a combination of $200.0 million of cash on hand, approximately $335.9 million in net proceeds from this offering and $370.6 million of proceeds from the Operating Partnership’s Revolving Credit Facility. The Revolving Credit Facility bears interest at LIBOR plus 2.25% to 2.75%.

MGP expects to receive net proceeds of $335.9 million from the issuance and sale of Class A shares in this offering, which represents the expected gross proceeds of this offering, net of $16.0 million in offering costs (assuming that the underwriters do not exercise any of their overallotment option to purchase additional Class A shares). If the amount of the net proceeds received in this offering is less than $335.9 million, MGP expects to use additional cash or proceeds from the Revolving Credit Facility to fund the difference. MGP will use the proceeds from the sale of Class A shares in this offering to purchase an equal number of Operating Partnership units issued by the Operating Partnership.

MGP expects to incur approximately $19.0 million of expenses directly attributable to the MGM National Harbor Transaction. Such expenses were not recognized in the unaudited pro forma condensed combined and consolidated statements of operations as they are not expected to have a continuing effect.

Cash and cash equivalents includes the following cash inflows and cash outflows (in thousands):

 

Sources						Uses
Proceeds from this offering		$	351,900			Cash consideration paid		$	462,500
Proceeds from the Revolving Credit Facility			370,600			Repayment of the MGM National Harbor term loan			425,000
Cash on hand			200,000			Offering costs and expenses			16,000
						Transaction costs—MGM National Harbor Transaction			19,000
		$	922,500					$	922,500

 

S-28

---

Table of Contents

On a pro forma basis after giving effect to the MGM National Harbor Transaction and this offering, certain of MGM’s operating and other subsidiaries are expected to own 195,134,123 of the 264,298,272 total Operating Partnership units, entitling MGM to 73.8% of the economic interest in the Operating Partnership. 9,771,987 Operating Partnership units are expected to be issued in connection with the MGM National Harbor Transaction based on the last reported sale price of MGP’s Class A shares on the NYSE on September 5, 2017.

Note 2—Statement of Operations Pro Forma Adjustments

Pro Forma Adjustments—Formation Transactions and Borgata Transaction:

(aa) Represents rental income associated with the rent from the Master Lease. Base rent under the Master Lease includes a fixed annual rent escalator of 2.0% for the second through the sixth lease years (as defined in the Master Lease). Thereafter, the annual escalator of 2.0% will be subject to the Tenant and, without duplication, the MGM operating subsidiary sublessees of the Tenant 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 accounting principles generally accepted in the United States, adjusted to exclude net revenue attributable to certain scheduled subleases and, at the Tenant’s option, reimbursed cost revenues. The first 2.0% fixed annual rent escalator went into effect on April 1, 2017. Because the unaudited pro forma condensed combined and consolidated statement of operations for the year ended December 31, 2016 gives effect to the Formation Transactions and Borgata Transaction as if they had occurred on January 1, 2016, the effect of this escalator is not reflected, as it would not have occurred until January 1, 2017. The unaudited pro forma condensed combined and consolidated statement of operations for the six months ended June 30, 2017 includes the effect of this escalator within the historical results of MGP. Percentage rent under the Master Lease is initially a fixed amount for approximately the first six years of the Master Lease and will then be adjusted every five years based on the average actual annual net revenues from the leased properties subject to the Master Lease at such time (excluding net revenue attributable to certain scheduled subleases and, at the Tenant’s option, certain reimbursed costs) for the trailing five-calendar-year period. Base rent and percentage rent under the Master Lease known at the lease commencement date is recorded on a straight-line basis over the initial ten-year non-cancelable lease term and all four five-year renewal terms under the Master Lease, as such renewal terms have been determined to be reasonably assured.

As a result of the consummation of the Borgata Transaction, the initial annual rent under the Master Lease increased by $100.0 million, prorated for the remainder of the lease year, $90.0 million of which relates to base rent under the Master Lease and the remaining $10.0 million of which relates to percentage rent under the Master Lease. Following the closing of the Borgata Transaction and through April 1, 2017, base rent under the Master Lease was $585.0 million and percentage rent under the Master Lease was $65.0 million.

For the year ended December 31, 2016, pro forma rental revenue recognized, as adjusted for the Formation Transactions and Borgata Transaction, is $652.7 million compared to total lease payments due under the Master Lease of $650.0 million. The difference of $2.7 million is an adjustment to recognize fixed amounts due under the Master Lease on a straight-line basis over the lease term.

(bb) Represents revenue for the property taxes paid by the Tenant under the Master Lease with an offsetting expense recorded in operating expenses, as the Landlord is the primary obligor.

(cc) Depreciation amounts were determined based on management’s evaluation of the estimated remaining useful lives of the real estate assets of the Borgata. The values allocated to buildings, building improvements, land improvements, fixtures and integral equipment are depreciated on a straight-line basis using an estimated useful life. In utilizing these useful lives for determining the pro forma adjustments, management considered the length of time the property had been in existence, the maintenance history and anticipated future maintenance.

 

S-29

---

Table of Contents

(dd) Represents the elimination of property insurance expense, which is paid directly by the Tenant under the terms of the Master Lease.

(ee) Represents the net effect of the amortization of the unfavorable lease liability related to certain ground leases expiring in 2070, which were assigned to the Landlord in connection with the Borgata Transaction, and under which the Landlord is the primary obligor, as well as the favorable lease asset representing future favorable lease reimbursements from the Tenant to the Landlord under the Master Lease, which extends through 2046.

(ff) Represents the elimination of nonrecurring transaction costs incurred during the year ended December 31, 2016 of $10.2 million that are directly related to the acquisition of Borgata and included in the historical results of MGP.

(gg) Represents expense related to the base salary and annual equity awards pursuant to the employment agreements with MGP’s Chief Executive Officer and Chief Financial Officer.

(hh) Represents interest expense related to borrowings that were incurred by the Operating Partnership in connection with the Formation Transactions and the Borgata Transaction, including the amortization of debt issuance costs. It is estimated that a one-eighth percentage change in the annual interest rates on the Operating Partnership’s variable rate obligations (including its Revolving Credit Facility, which bears interest at LIBOR plus 2.25% to 2.75%) would change interest expense related to these borrowings by $3.0 million for the year ended December 31, 2016.

(ii) The Landlord is required to join in the filing of a New Jersey consolidated corporation business tax return under the New Jersey Casino Control Act and include in such return its income and expenses associated with its New Jersey assets and is thus subject to an entity level tax in New Jersey. Although the consolidated New Jersey return also includes MGM and certain of its subsidiaries, MGP is required to record New Jersey state income taxes in its consolidated financial statements as if the Landlord was taxed for state purposes on a stand-alone basis. MGP and MGM have entered into a tax sharing agreement providing for an allocation of taxes due in the consolidated New Jersey return. Pursuant to this agreement, the Landlord will only be responsible for New Jersey taxes on any gain that may be realized upon a future sale of the New Jersey assets resulting solely from an appreciation in value of such assets over their value on the date they were contributed to the Landlord by a subsidiary of MGM. MGM is responsible for all other taxes reported in the New Jersey consolidated return. The provision for current taxes and the deferred tax liability in MGP’s consolidated financial statements are attributable to noncontrolling interest since the payment of such taxes are the responsibility of MGM.

(jj) On a pro forma basis after giving effect to the Formation Transactions and the Borgata Transaction, certain of MGM’s operating and other subsidiaries owned 185,362,136 of the 242,862,136 total Operating Partnership units, entitling MGM to 76.3% of the economic interest in the Operating Partnership.

Pro Forma Adjustments—MGM National Harbor Transaction and this Offering:

(kk) As a result of the consummation of the MGM National Harbor Transaction, the annual rent under the Master Lease increased by $95.0 million, prorated for the remainder of the second lease year, $85.5 million of which relates to base rent under the Master Lease and the remaining $9.5 million of which relates to percentage rent under the Master Lease. For pro forma purposes, the Master Lease amendment related to the MGM National Harbor Transaction is reflected as if it were effective beginning on January 1, 2016 at the beginning of the initial lease year and subject to the fixed annual rent escalator of 2.0% for the second through the sixth lease years (as defined in the Master Lease). On a pro forma basis after giving effect to the MGM National Harbor Transaction, base rent under the Master Lease for the initial lease year would have been $670.5 million and percentage rent under the Master Lease for the initial lease year would have been $74.5 million.

For the year ended December 31, 2016, additional pro forma rental revenue recognized related to the MGM National Harbor Transaction is $95.4 million compared to total related lease payments due under the Master

 

S-30

---

Table of Contents

Lease of $95.0 million. The difference of $0.4 million is an adjustment to recognize fixed amounts due under the Master Lease on a straight-line basis over the lease term.

For the six months ended June 30, 2017, additional pro forma rental revenue recognized related to the MGM National Harbor Transaction is $47.7 million compared to total related lease payments due under the Master Lease of $48.4 million. The difference of $0.7 million is an adjustment to recognize fixed amounts due under the Master Lease on a straight-line basis over the lease term.

(ll) Represents revenue for the additional property taxes paid by the Tenant under the Master Lease related to the MGM National Harbor assets with an offsetting expense recorded in operating expenses, as the Landlord is the primary obligor.

(mm) The land on which National Harbor was developed is subject to a ground lease, which is expected to be assigned to the Operating Partnership in connection with the MGM National Harbor Transaction. Rent payments pursuant to this ground lease will be reimbursed by the Tenant under the Master Lease over its related term, which extends through 2046. Reflects the straight-line ground lease expense through the end of the ground lease term, as well as the straight-line reimbursement revenue through 2046 in tenant reimbursements and other, as the Landlord is the primary obligor.

(nn) Represents the depreciation expense directly associated with the assignment of the MGM National Harbor assets to the Operating Partnership. The MGM National Harbor assets assigned pursuant to the MGM National Harbor Transaction will be recorded at the historical cost as the MGM National Harbor Transaction does not result in a change in control of the assets.

(oo) Represents additional interest expense related to amounts to be drawn on the Revolving Credit Facility to fund the MGM National Harbor Transaction. The Revolving Credit Facility bears interest at LIBOR plus 2.25% to 2.75%. It is estimated that a one-eighth percentage change in the annual interest rates of the Revolving Credit Facility would change interest expense related to these borrowings by $0.5 million for the year ended December 31, 2016 and $0.2 million for the six months ended June 30, 2017. To the extent that MGP refinances amounts outstanding under the Revolving Credit Facility with fixed-rate long-term debt financing, MGP anticipates that such fixed-rate debt financing would bear interest at a higher rate than its current variable interest rate debt obligations, including the Revolving Credit Facility.

(pp) On a pro forma basis after giving effect to the Formation Transactions, the Borgata Transaction, the MGM National Harbor Transaction and this offering, certain of MGM’s operating and other subsidiaries owned 195,134,123 of the 264,298,272 total Operating Partnership units, entitling MGM to 73.8% of the economic interest in the Operating Partnership based on the last reported sale price of MGP’s Class A shares on the NYSE on September 5, 2017.

(qq) Pro forma earnings per common share are based on historical MGP weighted average Class A shares outstanding, adjusted to assume the Class A shares estimated to be issued by MGP in this offering were outstanding for the entire periods presented.

 

S-31

---

Table of Contents

MARKET PRICE OF THE CLASS A SHARES AND DIVIDEND HISTORY

The Class A shares are traded on the New York Stock Exchange under the symbol “MGP.” The following table sets forth, for the periods indicated, the high and low closing prices per share of MGP Class A shares on the New York Stock Exchange and the dividends declared per Class A share.

 

		Class A shares								Dividends
		High				Low
Fiscal Year ended December 31, 2016
Second Quarter(1)		$	26.90			$	21.76			$	0.2632
Third Quarter			27.11				24.32				0.3875
Fourth Quarter			26.32				23.80				0.3875
Fiscal Year ending December 31, 2017
First Quarter			27.05				24.82				0.3875
Second Quarter			29.60				26.94				0.3950
Third Quarter (through September 6, 2017)		$	30.98			$	28.26				—

 

(1)	Represents the period from April 20, 2016, the first date on which our shares were publicly traded, until June 30, 2016.

On September 6, 2017, the last sale price reported on the New York Stock Exchange for our Class A shares was $30.98 per share. On September 6, 2017 there were two holders of record of our Class A shares.

The Operating Partnership has made distributions and MGP has declared cash dividends each quarter since the completion of its initial public offering. On June 15, 2017, the Operating Partnership announced a cash distribution to holders of Operating Partnership units of $96.0 million or $0.3950 per Operating Partnership unit. MGP concurrently declared a cash dividend for the quarter ended June 30, 2017 of $22.8 million or $0.3950 per Class A share payable to shareholders of record as of June 30, 2017. The distribution and dividend were paid on July 14, 2017.

While we plan to continue to make quarterly distributions and dividends, no assurances can be made as to the frequency of any future distributions and dividends. Distributions and dividends made by us are authorized and determined by our Board of Directors in its sole discretion out of funds legally available therefore and are dependent upon a number of factors, including restrictions under applicable law.

 

S-32

---

Table of Contents

UNDERWRITING

Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are acting as representatives of each of the underwriters named below. Subject to the terms and conditions set forth in an underwriting agreement among us and the underwriters, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the number of Class A shares set forth opposite its name below.

 

Underwriter		Number of Shares
Merrill Lynch, Pierce, Fenner & Smith                       Incorporated			2,012,500
Barclays Capital Inc.			1,897,500
Deutsche Bank Securities Inc.			1,897,500
J.P. Morgan Securities LLC			1,897,500
Evercore Group L.L.C.			920,000
Morgan Stanley & Co. LLC			862,500
BNP Paribas Securities Corp.			345,000
Citigroup Global Markets Inc.			345,000
Fifth Third Securities, Inc.			345,000
SMBC Nikko Securities America, Inc.			345,000
SunTrust Robinson Humphrey, Inc.			230,000
Credit Agricole Securities (USA) Inc.			115,000
Citizens Capital Markets, Inc.			57,500
Ladenburg Thalmann & Co. Inc.			57,500
Scotia Capital (USA) Inc.			57,500
UBS Securities LLC			57,500
Union Gaming Securities, LLC			57,500
Total			11,500,000

Subject to the terms and conditions set forth in the underwriting agreement, the underwriters have agreed, severally and not jointly, to purchase all of the Class A shares sold under the underwriting agreement if any of these shares are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the nondefaulting underwriters may be increased or the underwriting agreement may be terminated.

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.

The underwriters are offering the Class A shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the Class A shares, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer’s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Commissions and Discounts

The representatives have advised us that the underwriters propose to offer the Class A shares to the public at the public offering price set forth on the cover page of this prospectus and to dealers at that price less a concession not in excess of $0.73440 per share. After the offering, the public offering price, concession or any other term of the offering may be changed.

 

S-33

---

Table of Contents

The following table shows the public offering price, underwriting discount and proceeds before expenses to us. The information assumes either no exercise or full exercise by the underwriters of their option to purchase additional shares.

 

		Per Share				Without Option				With Option
Public offering price		$	30.60			$	351,900,000			$	404,685,000
Underwriting discount		$	1.224			$	14,076,000			$	16,187,400
Proceeds, before expenses, to us		$	29.376			$	337,824,000			$	388,497,600

The expenses of the offering, not including the underwriting discount, are estimated at $1.9 million and are payable by us. We have also agreed to reimburse the underwriters for certain of their expenses in an amount up to $15,000.

Option to Purchase Additional Shares

We have granted an overallotment option to the underwriters, exercisable for 30 days after the date of this prospectus, to purchase up to 1,725,000 additional Class A shares at the public offering price, less the underwriting discount. If the underwriters exercise this option, each will be obligated, subject to conditions contained in the underwriting agreement, to purchase a number of additional shares proportionate to that underwriter’s initial amount reflected in the above table.

No Sales of Similar Securities

We have agreed that we will not:

 

•

offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly (regardless of whether any such transaction is to be settled by the delivery of our Class A shares or such other securities, in cash or otherwise), or file with the Commission a registration statement under the Securities Act relating to, any of our Class A shares or any securities convertible into or exercisable or exchangeable for any of our Class A shares, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing; or

 

•

enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences associated with the ownership of any of our Class A shares or any such other securities (regardless of whether any such transaction is to be settled by the delivery of our Class A shares or such other securities, in cash or otherwise),

in each case without the prior written consent of the representatives for a period of 60 days after the date of this prospectus, with certain limited exceptions. In particular, we may make offers of, or engage in negotiations or discussions contemplating the issuance of, Class A shares or any securities convertible into or exercisable or exchangeable for Class A shares, in each case in connection with the potential acquisition of property or assets, or the potential acquisition of, a joint venture with or a merger with another company. In addition, in the event that we enter into a definitive agreement contemplating the issuance of Class A shares or any securities convertible into or exercisable or exchangeable for any of our Class A shares in connection with an acquisition of property or assets, or an acquisition of, a joint venture with, or a merger with another company or pursuant to an employee benefit plan assumed by us in connection with such acquisition, joint venture or merger, we may issue Class A shares or any securities convertible or exchangeable for Class A shares representing up to 10% of the outstanding Class A shares on a fully diluted basis and, with consent, we may issue Class A shares or any securities convertible or exchangeable for Class A shares representing greater than 10% of the outstanding Class A shares on a fully diluted basis, provided that the recipient of such securities representing greater than 10% of the outstanding Class A shares on a fully diluted basis agrees to deliver to the representatives a lock-up agreement having the terms described below.

 

S-34

---

Table of Contents

Our directors, executive officers and our other existing holders of Class A shares and securities convertible into or exchangeable or exercisable into our Class A shares have entered into lock-up agreements with the underwriters prior to the commencement of this offering pursuant to which each of these persons or entities, with certain limited exceptions, for a period of 60 days after the date of this prospectus, may not, without the prior written consent of the representatives:

 

•

offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly (regardless of whether any such transaction is to be settled by delivery of our Class A shares or such other securities, in cash or otherwise), any of our Class A shares or any securities convertible into or exercisable or exchangeable for any of our Class A shares (including, without limitation, our Class A shares or such other securities which may be deemed to be beneficially owned by such directors, executive officers and shareholders in accordance with the rules and regulations of the Commission and securities which may be issued upon exercise of a stock option or warrant);

 

•

enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences associated with ownership of any of our Class A shares or such other securities, regardless of whether any such transaction is to be settled by delivery of our Class A shares or such other securities, in cash or otherwise; or

 

•

make any demand for, or exercise any right with respect to, the registration of any of our Class A shares or any security convertible into or exercisable or exchangeable for our Class A shares.

This lock-up provision applies to Class A shares and such other securities, whether owned now or acquired later, by the person executing the agreement or for which the person executing the agreement acquires the power of disposition.

New York Stock Exchange Listing

The Class A shares are listed on the New York Stock Exchange under the symbol “MGP.”

Price Stabilization, Short Positions

Until the distribution of the Class A shares is completed, Commission rules may limit underwriters and selling group members from bidding for and purchasing our common shares. However, the representatives may engage in transactions that stabilize the price of the common shares, such as bids or purchases to peg, fix or maintain that price.

In connection with the offering, the underwriters may purchase and sell Class A shares in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of Class A shares than they are required to purchase in the offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional Class A shares described above. The underwriters may close out any covered short position by either exercising their option to purchase additional Class A shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of Class A shares available for purchase in the open market as compared to the price at which they may purchase Class A shares through the option granted to them. “Naked” short sales are sales in excess of such option. The underwriters must close out any naked short position by purchasing Class A shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our Class A shares in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of shares of Class A shares made by the underwriters in the open market prior to the completion of the offering.

 

S-35

---

Table of Contents

Similar to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our Class A shares or preventing or retarding a decline in the market price of our Class A shares. As a result, the price of our Class A shares may be higher than the price that might otherwise exist in the open market. The underwriters may conduct these transactions on the New York Stock Exchange, in the over-the-counter market or otherwise.

Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our Class A shares. In addition, neither we nor any of the underwriters make any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

Electronic Distribution

In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail.

Other Relationships

Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.

Affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are lenders under the Operating Partnership’s credit agreement and affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Fifth Third Securities, Inc., BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., SunTrust Robinson Humphrey, Inc. and SMBC Nikko Securities America, Inc. are lenders and/or agents under the MGM National Harbor term loan. We intend to use a portion of the net proceeds of this offering together with proceeds from the incurrence of additional indebtedness to, among other things, refinance the debt assumed in connection with the MGM National Harbor Transaction, and therefore affiliates of certain of the underwriters may receive a portion of the net proceeds from this offering. See “Use of Proceeds.”

In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

Notice to Prospective Investors in Australia

No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”), in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.

Any offer in Australia of the shares may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.

 

S-36

---

Table of Contents

The shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions.

This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

Notice to Prospective Investors in the Dubai International Financial Centre

This prospectus supplement relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This prospectus supplement is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus supplement nor taken steps to verify the information set forth herein and has no responsibility for the prospectus supplement. The Class A shares to which this prospectus supplement relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Class A shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus supplement you should consult an authorized financial advisor.

Notice to Prospective Investors in Hong Kong

The Class A shares have not been offered or sold and will not be offered or sold in Hong Kong, by means of any document, other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. No advertisement, invitation or document relating to the Class A shares has been or may be issued or has been or may be in the possession of any person for the purposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Class A shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.

Notice to Prospective Investors in Canada

The Class A shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Class A shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any

 

S-37

---

Table of Contents

applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

 

S-38

---

Table of Contents

LEGAL MATTERS

Certain legal matters, including the validity of shares offered hereby, will be passed upon for us by Milbank, Tweed, Hadley & McCloy LLP. Weil, Gotshal & Manges LLP has also represented us with respect to tax and certain corporate matters. Certain legal matters in connection with this offering will be passed upon for the underwriters by Latham & Watkins LLP, Los Angeles, California.

EXPERTS

The combined and consolidated financial statements and the related financial statement schedule of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP incorporated in this prospectus by reference from the Combined Annual Report on Form 10-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports, which are incorporated herein by reference. Such financial statements and financial statement schedule have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

We incorporate by reference into this prospectus supplement and the accompanying prospectus the following documents and reports filed with the Commission:

 

•

The Combined Annual Report on Form 10-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP for the fiscal year ended December 31, 2016;

 

•

The Combined Quarterly Reports on Form 10-Q of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP for the fiscal quarters ended March 31, 2017 and June 30, 2017;

 

•

The information responsive to Part III of Form 10-K for the fiscal year ended December 31, 2016 provided in our Proxy Statement on Schedule 14A filed on April 19, 2017;

 

•

Our Current Reports on Form 8-K filed on January 13, 2017, February 17, 2017, May 1, 2017, June 5, 2017 and September 6, 2017; and

 

•

The description of our Class A shares contained in our Registration Statement on Form 8-A filed with the Commission on April 11, 2016.

All documents and reports filed (but not furnished) by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and on or before the time that our offering of the securities covered by this prospectus supplement is completed are deemed to be incorporated by reference in this prospectus supplement from the date of filing of such documents or reports, except as to any portion of any future document or report that is deemed to have been furnished and not filed under those sections. Any statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus supplement will be deemed to be modified or superseded for purposes of this prospectus supplement to the extent that any statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference in this prospectus supplement modifies or supersedes such statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement.

Any person receiving a copy of this prospectus supplement may obtain, without charge, upon written or oral request, a copy of any of the documents incorporated by reference except for the exhibits to such documents (other than the exhibits expressly incorporated in such documents by reference). To obtain copies of these filings, see “Where You Can Find More Information” in the accompanying prospectus.

 

S-39

---

Table of Contents

ANNEX I

UNAUDITED RECONCILIATION OF NON-U.S. GAAP MEASURES OF MGM

The following table presents a reconciliation of MGM’s Adjusted EBITDA to net income (loss), each as reported by MGM:

 

		Year ended December 31,
		2008				2009				2010				2011				2012				2013				2014				2015				2016
		(in thousands)
Adjusted EBITDA		$	1,882,441			$	1,107,099			$	972,389			$	1,603,771			$	1,747,981			$	2,124,581			$	2,219,562			$	2,238,920			$	2,795,684
NV Energy exit expense			—				—				—				—				—				—				—				—				(139,335	)
Preopening and start-up expenses			(23,059	)			(53,013	)			(4,247	)			316				(2,127	)			(13,314	)			(39,257	)			(71,327	)			(140,075	)
Property transactions, net and goodwill impairments			(1,277,132	)			(1,328,689	)			(1,454,349	)			3,318,838				(696,806	)			(124,761	)			(41,002	)			(1,503,942	)			(17,078	)
Gain on Borgata transaction			—				—				—				—				—				—				—				—				430,118
Depreciation and amortization			(778,236	)			(689,273	)			(633,423	)			(817,146	)			(927,697	)			(849,225	)			(815,765	)			(819,883	)			(849,527	)
Operating income			(195,986	)			(963,876	)			(1,119,630	)			4,105,779				121,351				1,137,281				1,323,538				(156,232	)			2,079,787
Non-operating income (expense): Interest expense, net of amounts capitalized			(609,286	)			(775,431	)			(1,113,580	)			(1,086,832	)			(1,116,358	)			(857,347	)			(817,061	)			(797,579	)			(694,773	)
Other, net			69,901				(273,286	)			11,807				(181,938	)			(739,206	)			(217,744	)			(95,591	)			(92,432	)			(125,837	)
			(539,385	)			(1,048,717	)			(1,101,773	)			(1,268,770	)			(1,855,564	)			(1,075,091	)			(912,652	)			(890,011	)			(820,610	)
Income before income taxes			(735,371	)			(2,012,593	)			(2,221,403	)			2,837,009				(1,734,213	)			62,190				410,886				(1,046,243	)			1,259,177
Provision for income taxes			(186,298	)			720,911				780,825				401,116				117,301				(20,816	)			(283,708	)			6,594				(22,299	)
Net income (loss)			(921,669	)			(1,291,682	)			(1,440,578	)			3,238,125				(1,616,912	)			41,374				127,178				(1,039,649	)			1,236,878
Less: Net income attributable to noncontrolling interests			—				—				—				(120,307	)			(150,779	)			(213,108	)			(277,051	)			591,929				(135,438	)
Net income (loss) attributable to MGM Resorts International		$	(921,669	)		$	(1,291,682	)		$	(1,440,578	)		$	3,117,818			$	(1,767,691	)		$	(171,734	)		$	(149,873	)		$	(447,720	)		$	1,101,440

 

S-A1-1

---

Table of Contents

The following tables present reconciliations of MGM’s operating income (loss) to Adjusted Property EBITDA and Adjusted EBITDA, each as reported by MGM:

 

		Six Months Ended June 30, 2017
		Operating income (loss)				NV Energy exit expense				Preopening and start-up expenses				Property transactions, net				Depreciation and amortization				Adjusted EBITDA
		(in thousands) (unaudited)
Bellagio		$	202,762			$	(6,970	)		$	—			$	123			$	44,145			$	240,060
MGM Grand Las Vegas			138,278				(7,424	)			7				844				36,019				167,724
Mandalay Bay			105,745				(8,524	)			—				(10	)			49,178				146,389
The Mirage			85,255				(4,043	)			—				117				19,140				100,469
Luxor			48,902				(3,394	)			—				1,164				19,043				65,715
New York-New York			53,445				(2,025	)			(8	)			183				15,541				67,136
Excalibur			51,062				(2,658	)			—				258				8,789				57,451
Monte Carlo			6,735				(2,461	)			1,049				9,990				23,925				39,238
Circus Circus Las Vegas			25,982				(3,130	)			450				735				8,160				32,197
MGM Grand Detroit			78,544				—				—				—				11,473				90,017
Beau Rivage			29,598				—				—				5				11,989				41,592
Gold Strike Tunica			23,396				—				—				(22	)			4,613				27,987
Borgata			118,977				—				1,277				1,220				38,868				160,342
National Harbor			28,599				—				227				—				40,294				69,120
Domestic resorts			997,280				(40,629	)			3,002				14,607				331,177				1,305,437
MGM China			116,229				—				23,158				332				119,583				259,302
Unconsolidated resorts			80,286				—				—				—				—				80,286
Management and other operations			16,421				—				—				—				3,592				20,013
			1,210,216				(40,629	)			26,160				14,939				454,352				1,665,038
Stock compensation			(25,409	)			—				—				—				—				(25,409	)
Corporate			(186,580	)			—				9,999				—				40,171				(136,410	)
		$	998,227			$	(40,629	)		$	36,159			$	14,939			$	494,523			$	1,503,219

 

		Six Months Ended June 30, 2016
		Operating income (loss)				Preopening and start-up expenses				Property transactions, net				Depreciation and amortization				Adjusted EBITDA
		(in thousands) (unaudited)
Bellagio		$	189,253			$	—			$	61			$	44,875			$	234,189
MGM Grand Las Vegas			141,555				—				500				36,328				178,383
Mandalay Bay			75,484				29				1,158				44,654				121,325
The Mirage			54,126				—				(413	)			20,465				74,178
Luxor			31,046				1,444				373				18,582				51,445
New York-New York			50,493				372				100				10,416				61,381
Excalibur			37,710				—				2,969				8,152				48,831
Monte Carlo			26,271				145				152				16,552				43,120
Circus Circus Las Vegas			18,288				—				130				8,047				26,465
MGM Grand Detroit			71,846				—				—				11,986				83,832
Beau Rivage			37,650				—				(62	)			13,247				50,835
Gold Strike Tunica			21,104				—				93				4,833				26,030
Domestic resorts			754,826				1,990				5,061				238,137				1,000,014
MGM China			98,905				12,448				1,271				120,695				233,319
Unconsolidated resorts			459,924				3,087				—				—				463,011
Management and other operations			3,585				1,150				—				3,752				8,487
			1,317,240				18,675				6,332				362,584				1,704,831
Stock compensation			(20,309	)			—				—				—				(20,309	)
Corporate			(211,922	)			28,109				(347	)			44,154				(140,006	)
		$	1,085,009			$	46,784			$	5,985			$	406,738			$	1,544,516

 

S-A1-2

---

Table of Contents

		Year ended December 31, 2016
		Operating income (loss)				NV Energy exit expense				Preopening and start-up expenses				Property transactions, net and gain on Borgata transaction				Depreciation and amortization				Adjusted EBITDA
		(in thousands)
Bellagio		$	366,543			$	23,815			$	—			$	118			$	88,783			$	479,259
MGM Grand Las Vegas			231,327				25,365				82				1,719				72,188				330,681
Mandalay Bay			114,202				29,123				252				2,377				89,655				235,609
The Mirage			85,300				13,813				—				44				40,270				139,427
Luxor			57,653				11,594				1,625				708				36,612				108,192
New York-New York			93,169				7,439				479				210				20,432				121,729
Excalibur			71,885				9,083				—				4,405				16,152				101,525
Monte Carlo			33,291				8,409				1,929				1,131				34,102				78,862
Circus Circus Las Vegas			33,516				10,694				—				816				16,963				61,989
MGM Grand Detroit			147,865				—				—				(59	)			23,608				171,414
Beau Rivage			68,054				—				—				(172	)			25,880				93,762
Gold Strike Tunica			39,831				—				—				67				9,792				49,690
Borgata(1)			38,616				—				90				8,652				33,923				81,281
National Harbor(2)			(13,626	)			—				17,986				—				5,236				9,596
Domestic resorts			1,367,626				139,335				22,443				20,016				513,596				2,063,016
MGM China			255,264				—				27,848				(216	)			237,840				520,736
Unconsolidated resorts(3)			524,448				—				3,168				—				—				527,616
Management and other operations			4,316				—				1,150				29				7,505				13,000
			2,151,654				139,335				54,609				19,829				758,941				3,124,368
Stock compensation			(44,957	)			—				—				—				—				(44,957	)
Corporate			(26,910	)			—				85,466				(432,869	)			90,586				(283,727	)
		$	2,079,787			$	139,335			$	140,075			$	(413,040	)		$	849,527			$	2,795,684

 

(1)	Represents operating results of Borgata for the period from August 1, 2016 (the first day of the Company’s full ownership) through December 31, 2016.

(2)	Represents operating results of National Harbor for the month ended December 31, 2016.

(3)	Represents the Company’s share of operating income (loss), adjusted for the effect of certain basis differences. Includes the Company’s share of Borgata results for the seven months ended July 31, 2016.

 

S-A1-3

---

Table of Contents

		Year ended December 31, 2015
		Operating income (loss)				Preopening and start-up expenses				Property transactions, net and goodwill impairment				Depreciation and amortization				Adjusted EBITDA
		(in thousands)
Bellagio		$	303,858			$	—			$	1,085			$	90,442			$	395,385
MGM Grand Las Vegas			206,896				—				110				73,260				280,266
Mandalay Bay			120,142				—				3,599				79,733				203,474
The Mirage			66,069				115				1,729				44,562				112,475
Luxor			49,369				(2	)			94				37,708				87,169
New York-New York			81,618				(74	)			4,931				19,982				106,457
Excalibur			67,545				—				111				14,591				82,247
Monte Carlo			55,594				—				3,219				27,149				85,962
Circus Circus Las Vegas			27,305				280				21				15,639				43,245
MGM Grand Detroit			131,016				—				(36	)			23,999				154,979
Beau Rivage			62,613				—				(5	)			26,235				88,843
Gold Strike Tunica			34,362				—				221				11,440				46,023
Other resort operations			2,975				—				—				466				3,441
Domestic resorts			1,209,362				319				15,079				465,206				1,689,966
MGM China			(1,212,377	)			13,863				1,472,128				266,267				539,881
Unconsolidated resorts			254,408				3,475				—				—				257,883
Management and other operations			27,395				1,179				1,080				7,765				37,419
			278,788				18,836				1,488,287				739,238				2,525,149
Stock compensation			(32,125	)			—				—				—				(32,125	)
Corporate			(402,895	)			52,491				15,655				80,645				(254,104	)
		$	(156,232	)		$	71,327			$	1,503,942			$	819,883			$	2,238,920

 

		Year ended December 31, 2014
		Operating income (loss)				Preopening and start-up expenses				Property transactions, net				Depreciation and amortization				Adjusted EBITDA
		(in thousands)
Bellagio		$	304,144			$	—			$	900			$	88,658			$	393,702
MGM Grand Las Vegas			174,297				197				(667	)			81,027				254,854
Mandalay Bay			95,449				1,133				2,307				76,737				175,626
The Mirage			57,338				452				2,464				49,900				110,154
Luxor			31,801				2				432				37,849				70,084
New York-New York			75,360				732				427				18,586				95,105
Excalibur			52,915				—				500				14,804				68,219
Monte Carlo			48,937				1,507				290				21,046				71,780
Circus Circus Las Vegas			8,135				85				61				15,334				23,615
MGM Grand Detroit			118,755				—				2,728				23,315				144,798
Beau Rivage			43,152				—				1,000				26,109				70,261
Gold Strike Tunica			27,460				—				392				12,480				40,332
Other resort operations			(2,318	)			—				336				1,759				(223	)
Domestic resorts			1,035,425				4,108				11,170				467,604				1,518,307
MGM China			547,977				9,091				1,493				291,910				850,471
Unconsolidated resorts			62,919				917				—				—				63,836
Management and other operations			26,152				359				415				9,058				35,984
			1,672,473				14,475				13,078				768,572				2,468,598
Stock compensation			(28,372	)			—				—				—				(28,372	)
Corporate			(320,563	)			24,782				27,924				47,193				(220,664	)
		$	1,323,538			$	39,257			$	41,002			$	815,765			$	2,219,562

 

S-A1-4

---

Table of Contents

		Year ended December 31, 2013
		Operating income (loss)				Preopening and start-up expenses				Property transactions, net				Depreciation and amortization				Adjusted EBITDA
		(in thousands)
Bellagio		$	261,321			$	—			$	470			$	96,968			$	358,759
MGM Grand Las Vegas			149,602				—				2,220				84,310				236,132
Mandalay Bay			78,096				1,903				2,823				84,332				167,154
The Mirage			63,090				—				4,722				49,612				117,424
Luxor			21,730				802				2,177				36,852				61,561
New York-New York			65,006				—				3,533				20,642				89,181
Excalibur			49,184				—				69				14,249				63,502
Monte Carlo			45,597				791				3,773				18,780				68,941
Circus Circus Las Vegas			(1,596	)			—				1,078				17,127				16,609
MGM Grand Detroit			135,516				—				(2,402	)			22,575				155,689
Beau Rivage			38,015				—				(260	)			29,182				66,937
Gold Strike Tunica			22,767				—				1,330				13,390				37,487
Other resort operations			(21,951	)			—				23,018				2,243				3,310
Domestic resorts			906,377				3,496				42,551				490,262				1,442,686
MGM China			501,021				9,109				390				303,589				814,109
Unconsolidated resorts			68,322				507				—				—				68,829
Management and other operations			13,749				189				4				11,835				25,777
			1,489,469				13,301				42,945				805,686				2,351,401
Stock compensation			(26,112	)			—				—				—				(26,112	)
Corporate			(326,076	)			13				81,816				43,539				(200,708	)
		$	1,137,281			$	13,314			$	124,761			$	849,225			$	2,124,581

 

		Year ended December 31, 2012
		Operating income (loss)				Preopening and start-up expenses				Property transactions, net				Depreciation and amortization				Adjusted EBITDA
		(in thousands)
Bellagio		$	206,679			$	—			$	2,101			$	94,074			$	302,854
MGM Grand Las Vegas			94,529				—				6,271				79,926				180,726
Mandalay Bay			64,818				830				3,786				77,327				146,761
The Mirage			65,266				—				929				51,423				117,618
Luxor			20,777				—				4,794				37,689				63,260
New York-New York			68,591				—				581				21,333				90,505
Excalibur			43,978				—				5				17,805				61,788
Monte Carlo			38,418				—				1,328				18,935				58,681
Circus Circus Las Vegas			4,514				—				106				19,452				24,072
MGM Grand Detroit			130,564				641				922				33,543				165,670
Beau Rivage			40,713				—				(50	)			30,698				71,361
Gold Strike Tunica			27,420				—				(53	)			13,102				40,469
Other resort operations			(904	)			—				(14	)			2,373				1,455
Domestic resorts			805,363				1,471				20,706				497,680				1,325,220
MGM China			302,092				—				2,307				374,946				679,345
Unconsolidated resorts			(17,456	)			656				—				—				(16,800	)
Management and other operations			(4,258	)			—				—				14,205				9,947
			1,085,741				2,127				23,013				886,831				1,997,712
Stock compensation			(33,974	)			—				—				—				(33,974	)
Corporate			(930,416	)			—				673,793				40,866				(215,757	)
		$	121,351			$	2,127			$	696,806			$	927,697			$	1,747,981

 

S-A1-5

---

Table of Contents

		Year ended December 31, 2011
		Operating income (loss)				Preopening and start-up expenses				Gain on MGM China transaction and property transactions, net				Depreciation and amortization				Adjusted EBITDA
		(in thousands)
Bellagio		$	203,026			$	—			$	2,772			$	96,699			$	302,497
MGM Grand Las Vegas			71,762				—				232				77,142				149,136
Mandalay Bay			84,105				—				531				84,488				169,124
The Mirage			41,338				—				1,559				59,546				102,443
Luxor			39,866				—				112				38,103				78,081
New York-New York			63,824				—				(76	)			23,536				87,284
Excalibur			44,428				—				646				20,183				65,257
Monte Carlo			35,059				—				131				22,214				57,404
Circus Circus Las Vegas			4,040				—				(1	)			18,905				22,944
MGM Grand Detroit			125,235				—				1,415				39,369				166,019
Beau Rivage			30,313				—				58				39,649				70,020
Gold Strike Tunica			15,991				—				36				13,639				29,666
Other resort operations			(86,012	)			—				80,120				4,133				(1,759	)
Domestic resorts			672,975								87,535				537,606				1,298,116
MGM China			137,440				—				1,120				221,126				359,686
MGM Macau (50%)			115,219				—				—				—				115,219
CityCenter (50%)			(56,291	)			—				—				—				(56,291	)
Other unconsolidated resorts			79,368																79,368
Management and other operations			(13,813	)			(316	)			—				14,416				287
			934,898				(316	)			88,655				773,148				1,796,385
Stock compensation			(36,528	)			—				—				—				(36,528	)
Corporate			3,207,409				—				(3,407,493	)			43,998				(156,086	)
		$	4,105,779			$	(316	)		$	(3,318,838	)		$	817,146			$	1,603,771

 

		Year ended December 31, 2010
		Operating income (loss)				Preopening and start-up expenses				Property transactions, net				Depreciation and amortization				Adjusted EBITDA
		(in thousands)
Bellagio		$	174,355			$	—			$	(17	)		$	96,290			$	270,628
MGM Grand Las Vegas			84,359				—				127				78,607				163,093
Mandalay Bay			29,859				—				2,892				91,634				124,385
The Mirage			36,189				—				(207	)			66,124				102,106
Luxor			18,822				—				257				42,117				61,196
New York-New York			41,845				—				6,880				27,529				76,254
Excalibur			39,534				—				803				22,899				63,236
Monte Carlo			5,020				185				3,923				24,427				33,555
Circus Circus Las Vegas			(5,366	)			—				230				20,741				15,605
MGM Grand Detroit			115,040				—				(327	)			40,460				155,173
Beau Rivage			21,564				—				349				39,374				61,287
Gold Strike Tunica			26,115				—				(540	)			14,278				39,853
Other resort operations			(6,391	)			—				20				5,413				(958	)
Domestic resorts			580,945				185				14,390				569,893				1,165,413
MGM Macau (50%)			129,575				—				—				—				129,575
CityCenter (50%)			(253,976	)			3,494				—				—				(250,482	)
Other unconsolidated resorts			84,940																84,940
Management and other operations			(27,084	)			568				—				14,358				(12,158	)
			514,400				4,247				14,390				584,251				1,117,288

 

S-A1-6

---

Table of Contents

		Year ended December 31, 2010
		Operating income (loss)				Preopening and start-up expenses				Property transactions, net				Depreciation and amortization				Adjusted EBITDA
		(in thousands)
Stock compensation			(34,988	)			—				—				—				(34,988	)
Corporate			(1,599,042	)			—				1,439,959				49,172				(109,911	)
		$	(1,119,630	)		$	4,247			$	1,454,349			$	633,423			$	972,389

 

		Year ended December 31, 2009
		Operating income (loss)				Preopening and start-up expenses				Property transactions, net				Depreciation and amortization				Adjusted EBITDA
		(in thousands)
Bellagio		$	157,079			$	—			$	2,326			$	115,267			$	274,672
MGM Grand Las Vegas			123,378				—				30				90,961				214,369
Mandalay Bay			65,841				948				(73	)			93,148				159,864
The Mirage			74,756				—				313				66,049				141,118
Luxor			37,527				(759	)			181				39,218				76,167
Treasure Island(1)			12,730				—				(1	)			—				12,729
New York-New York			45,445				—				1,631				31,479				78,555
Excalibur			47,973				—				(16	)			24,173				72,130
Monte Carlo			16,439				—				(4,740	)			24,895				36,594
Circus Circus Las Vegas			4,015				—				(9	)			23,116				27,122
MGM Grand Detroit			90,183				—				7,336				40,491				138,010
Beau Rivage			16,234				—				157				49,031				65,422
Gold Strike Tunica			29,010				—				(209	)			16,250				45,051
Other resort operations			(4,172	)			—				(57	)			5,988				1,759
Domestic resorts			716,438				189				6,869				620,066				1,343,562
MGM Macau (50%)			24,615				—				—				—				24,615
CityCenter (50%)			(260,643	)			52,009				—				—				(208,634	)
Other unconsolidated resorts			96,132				815												96,947
Management and other operations			7,285				—				2,473				8,564				18,322
			583,827				53,013				9,342				628,630				1,274,812
Stock compensation			(36,571	)			—				—				—				(36,571	)
Corporate			(1,511,132	)			—				1,319,347				60,643				(131,142	)
		$	(963,876	)		$	53,013			$	1,328,689			$	689,273			$	1,107,099

 

(1)	Treasure Island was sold in March 2009.

 

S-A1-7

---

Table of Contents

		Year ended December 31, 2008
		Operating income (loss)				Preopening and start-up expenses				Property transactions, net				Depreciation and amortization				Adjusted EBITDA
		(in thousands)
Bellagio		$	257,415			$	—			$	1,130			$	133,755			$	392,300
MGM Grand Las Vegas			170,049				443				2,639				97,661				270,792
Mandalay Bay			145,005				11				1,554				101,925				248,495
The Mirage			99,061				242				6,080				62,968				168,351
Luxor			84,948				1,116				2,999				43,110				132,173
Treasure Island(1)			63,454				—				1,828				37,729				103,011
New York-New York			74,276				726				3,627				32,830				111,459
Excalibur			83,953				—				961				25,235				110,149
Monte Carlo			46,788				—				(7,544	)			25,380				64,624
Circus Circus Las Vegas			33,745				—				5				22,401				56,151
MGM Grand Detroit			77,671				135				6,028				53,674				137,508
Beau Rivage			22,797				—				76				48,150				71,023
Gold Strike Tunica			15,093				—				2,326				13,981				31,400
Other resort operations			(5,367	)			—				2,718				6,244				3,595
Domestic resorts			1,168,888				2,673				24,427				705,043				1,901,031
MGM Macau (50%)			11,898				—				—				—				11,898
CityCenter (50%)			(36,821	)			17,270				—				—				(19,551	)
Other unconsolidated resorts			101,297				3,011												104,308
Management and other operations			6,609				—				—				10,285				16,894
			1,251,871				22,954				24,427				715,328				2,014,580
Stock compensation			(36,277	)			—				—				—				(36,277	)
Corporate			(1,411,580	)			105				1,252,705				62,908				(95,862	)
		$	(195,986	)		$	23,059			$	1,277,132			$	778,236			$	1,882,441

 

(1)	Treasure Island was sold in March 2009.

 

S-A1-8

---

Table of Contents

ANNEX II

CALCULATION OF MGM HISTORICAL CORPORATE RENT COVERAGE RATIO⁽¹⁾

The following table presents the formulation used to calculate MGM’s historical corporate rent coverage ratio.

 

<

		Year ended December 31,
		2008				2009				2010				2011				2012				2013				2014				2015				2016(2)
		(in thousands)
		(unaudited)
Adjusted EBITDA related to:
Domestic resorts		$	1,901,031			$	1,343,562			$	1,165,413			$	1,298,116			$	1,325,220			$	1,442,686			$	1,518,307			$	1,689,966			$	2,063,016
Management and other operations			16,894				18,322				(12,158	)			287				9,947				25,777				35,984				37,419				13,000
Corporate (excluding stock-based compensation)			(95,862	)			(131,142	)			(109,911	)			(156,086	)			(215,757	)			(200,708	)			(220,664	)			(254,104	)			(283,727	)
		$	1,822,063			$	1,230,742			$	1,043,344			$	1,142,317			$	1,119,410			$	1,267,755			$	1,333,627			$	1,473,281			$	1,792,289
Corporate Rent Coverage Ratio excluding dividends and distributions received by MGM			3.3x				2.2x				1.9x				2.1x				2.0x				2.3x				2.4x				2.7x				3.0x
Dividends and distributions received by MGM(3):
CityCenter			—				—				—				—				—				—				—				200,000				540,000
MGM China			—				—				192,355				30,513				203,886				312,225				389,739				304,159				52,902
Grand Victoria			41,125				33,750				33,500				30,000				22,000				16,275				15,450				16,850				14,250
Borgata			19,579				60,136				113,422				—				—				—				—				14,094				2,654
		$	60,704			$	93,886			$	339,277			$	60,513			$	225,886			$	328,500			$	405,189			$	535,103			$	609,806
		$	1,882,767			$	1,324,628			$	1,382,621			$	1,202,830			$	1,345,296			$	1,596,255			$	1,738,816			$	2,008,384			$	2,402,095
Corporate Rent Coverage Ratio			3.4x				2.4x				2.5x				2.2x				2.4x				2.9x				3.2x				3.7x