MGM Resorts International and MGM Growth Properties LLC Announce Completion of $700 Million Operating Partnership Unit Redemption

LAS VEGAS, May 18, 2020 /PRNewswire/ -- MGM Resorts International ("MGM Resorts") (NYSE: MGM) and MGM Growth Properties LLC ("MGP") (NYSE: MGP) today announced that MGP has redeemed 30.3 million of MGM Resorts' operating partnership units (the "Units") for $700 million. Following the redemption, MGM Resorts has $700 million remaining under its agreement with MGP to purchase up to $1.4 billion of MGM Resorts' Units for cash through February 2022.

"Today's announcement is another example of our efforts to bolster our already strong liquidity position during the COVID-19 pandemic," said Bill Hornbuckle, Acting CEO and President of MGM Resorts. "As we gear up to reopen and safely welcome our guests once again at our properties across the U.S., maintaining a strong balance sheet and preserving our financial flexibility remain critical pillars of long-term success. This transaction both strengthens MGM's balance sheet and delivers significant accretion to MGP. We continue to see significant value in our MGP stake and are optimistic that future redemptions will occur at higher prices."

MGM Resorts intends to use the $700 million in proceeds to repay amounts drawn under its revolving credit facility. As of March 31, 2020, excluding MGM China and MGP, and after giving effect to the redemption and MGM Resorts' recent bond offering, MGM Resorts had liquidity⁽¹⁾ of approximately $5.3 billion.

Upon completion of the transaction, MGM Resorts will have approximately 172 million units, representing a 56.7% economic ownership in MGP. In addition, MGM Resorts continues to hold significant real estate assets, including its ownership of MGM Springfield, its 50% interest in CityCenter in Las Vegas and its 56% interest in MGM China.

"We are pleased with the benefits this transaction brings to MGP and our shareholders," said James Stewart, CEO of MGM Growth Properties. "The redemption is double digit accretive to our current run-rate AFFO per share while maintaining low financial leverage, and the remaining $700 million unit redemption agreement provides a clear path for future accretion. This transaction also creates an even stronger liquidity position for our tenant, MGM Resorts, reinforcing our confidence in the stability of our revenue stream and the strength of our business model. As a result, we believe this should allow us to increase our next quarterly dividend, which would be the eleventh time in four years."

MGP utilized cash on hand to fund the redemption. As a result of the accretion realized by this transaction, MGP expects that its next quarterly dividend will be increased to $1.95 per share on an annualized basis, a $0.05 increase from its prior rate of $1.90 per share. In addition, following the transaction, MGP will continue to have over $1 billion of liquidity between cash and cash equivalents and its revolving credit facility with adjusted annualized pro rata net leverage of 4.7x.

(1) Cash and equivalents as of March 31, 2020. MGM Resorts (excluding MGM China and MGP) cash and equivalents of $3.9 billion as of March 31, 2020, adjusted for $742 million of net proceeds from issuance of $750 million 6.750% senior notes due 2025 and adjusted for $700 million of proceeds from this redemption.

About MGM Resorts International
MGM Resorts International (NYSE: MGM) is an S&P 500® global entertainment company with national and international locations featuring best-in-class hotels and casinos, state-of-the-art meetings and conference spaces, incredible live and theatrical entertainment experiences, and an extensive array of restaurant, nightlife and retail offerings. MGM Resorts creates immersive, iconic experiences through its suite of Las Vegas-inspired brands. The MGM Resorts portfolio encompasses 29 unique hotel and destination gaming offerings in the United States and Macau, including some of the most recognizable resort brands in the industry such as Bellagio, MGM Grand, ARIA and Park MGM. The Company's 50/50 venture, ROAR Digital LLC, offers U.S. sports betting and online gaming through market-leading brands, including BetMGM and partypoker. The Company is currently pursuing targeted expansion in Asia through the integrated resort opportunity in Japan. Through its "Focused on What Matters: Embracing Humanity and Protecting the Planet" initiative, MGM Resorts commits to creating a more sustainable future, while striving to make a bigger difference in the lives of its employees, guests, and in the communities where it operates. The global employees of MGM Resorts are proud of their company for being recognized as one of FORTUNE® Magazine's World's Most Admired Companies®. For more information, please visit us at www.mgmresorts.com. Please also connect with us @MGMResortsIntl on Twitter as well as Facebook and Instagram.

About MGM Growth Properties
MGM Growth Properties LLC (NYSE:MGP) is one of the leading publicly traded real estate investment trusts engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts, whose diverse amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. MGP, together with its joint venture, currently owns a portfolio of properties, consisting of 12 premier destination resorts in Las Vegas and elsewhere across the United States, MGM Northfield Park in Northfield, OH, Empire Resort Casino in Yonkers, NY, as well as a retail and entertainment district, The Park in Las Vegas. As of December 31, 2019, our destination resorts, the Park, Empire Resort Casino, and MGM Northfield Park collectively comprised approximately 27,400 hotel rooms, 1.4 million casino square footage, and 2.7 million convention square footage. As a growth-oriented public real estate entity, MGP expects its relationship with MGM Resorts and other entertainment providers to attractively position MGP for the acquisition of additional properties across the entertainment, hospitality and leisure industries. For more information about MGP, visit the Company's website at http://www.mgmgrowthproperties.com.

Forward-Looking Statements
Statements in this release that are not historical facts are "forward-looking" statements and "safe harbor statements" that involve risks and/or uncertainties, including those described in MGM Resorts' and MGP's public filings with the SEC. MGM Resorts and MGP have based forward-looking statements on current expectations and assumptions and not on historical facts. Examples of these statements include, but are not limited to, statements MGM Resorts makes regarding the impact of COVID-19 on its business, the expecting timing and price of any future redemptions and the strength of its liquidity position and statements MGP makes with regard to the expected accretion from the transaction, the amount of its dividend and the amounts MGM Resorts expects to receive from such dividends. These forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include the continued impact of the COVID-19 pandemic on the businesses of MGM Resorts and MGP, the general economic conditions and market conditions in the markets in which the companies operate and competition with other destination travel locations throughout the United States and the world, the design, timing and costs of expansion projects, risks relating to international operations, permits, licenses, financings, approvals and other contingencies in connection with growth in new or existing jurisdictions and additional risks and uncertainties described in MGM Resorts' and MGP's Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports). In providing forward-looking statements, neither MGM Resorts nor MGP is undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If MGM Resorts or MGP updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements.

Non-GAAP Financial Measures
MGP's pro rata net leverage ratio presented in this release is calculated by dividing MGP's total net debt after giving effect to the redemption, including its pro rata share of the debt at MGP's 50.1% owned joint venture entity, by MGP's annualized Adjusted EBITDA for the quarter ended March 31, 2020. The following table sets for MGP's calculation of pro rata net leverage as of March 31, 2020. Since non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, the most directly comparable GAAP financial measures as an indicator of operating performance.

SOURCE MGM Resorts International; MGM Growth Properties LLC

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