NOTE 4  ACQUISITION Northfield On July 6, 2018, MGP completed its acquisition of 100% of the membership interests of Northfield for a purchase price of approximately $1.1 billion (Northfield Acquisition). MGP funded the acquisition through a $200 million draw on the Operating Partnerships term loan A and a $655 million draw under the Operating Partnerships revolving credit facility, with the remainder of the purchase price paid with cash on hand. The acquisition expanded MGPs real estate assets and diversified MGPs geographic reach. MGP recognized 100% of the assets and liabilities of Northfield at fair value at the date of the acquisition. Under the acquisition method, the fair value was allocated to the assets acquired and liabilities assumed in the transaction. The Company estimated fair value using both level 2 inputs, which are observable inputs for similar assets, and level 3 inputs, which are unobservable inputs. The allocation of fair value for substantially all of the assets and liabilities is preliminary and may be adjusted up to one year after the acquisition. Specifically, as of December 31, 2018, the Company is finalizing valuation work related to the asset classes that comprise the property and equipment acquired. The following table sets forth the preliminary purchase price allocation as of July 6, 2018 (in thousands): Fair value of assets acquired and liabilities assumed: Property and equipment $ 792,807 Cash and cash equivalents 35,831 Racing and gaming license 228,000 Customer list 25,000 Goodwill 17,915 Other assets 9,598 Other liabilities (38,786 ) $ 1,070,365 MGP recognized the identifiable intangible assets at fair value. The estimated fair values of the intangible assets were preliminarily determined using methodologies under the income approach based on significant inputs that were not observable. The goodwill is primarily attributable to the synergies expected to arise after the acquisition. As further discussed in Note 17, the Company entered into an agreement with MGP to acquire all of the operating assets of Northfield (Northfield OpCo) from MGP and the real estate assets of Northfield will be leased to a subsidiary of the Company. The transaction is expected to close in the first half of 2019, subject to customary closing conditions. The transaction will be an intercompany transaction and, accordingly, the effect will be eliminated in the Companys consolidated financial statements. Consolidated results. For the period from July 6, 2018 through December 31, 2018, Northfields net revenue was $133 million, operating income and net income were both $33 million. Pro forma results of operations for the acquisition have not been presented because it is not material to the consolidated results of operations. Empire City On January 29, 2019, the Company acquired the real property and operations associated with the Empire City Casino's race track and casino (Empire City) for total consideration of approximately $864 million, plus customary working capital and other adjustments (Empire City Acquisition). The fair value of consideration paid included the assumption of debt of approximately $246 million, which was subsequently repaid, the issuance of approximately $266 million of the Companys common stock, and the remaining balance in cash. If Empire City is awarded a license for live table games on or prior to December 31, 2022 and the Company accepts such license by December 31, 2024, the Company will pay additional consideration of $50 million. Preliminary fair values for assets acquired and liabilities assumed are not reported herein as the Company is still in the process of completing the initial accounting for the acquisition. Following the completion of the acquisition of Empire City, MGP acquired the developed real property associated with Empire City from the Company and leases the real property to a subsidiary of the Company. See Note 17 for additional information. Borgata acquisition On August 1, 2016, the Company completed the acquisition of Boyd Gaming Corporations (Boyd Gaming) ownership interest in Borgata for cash consideration of $604 million. Following the completion of the acquisition of Boyd Gamings interest, MGP acquired Borgatas real property from the Company and leases the real property to a subsidiary of the Company. Additionally, as discussed in Note 11, Borgata subsequently entered into a property tax reimbursement agreement in February 2017 with the Department of Community Affairs of the State of New Jersey and Atlantic City and received the settlement amount of $72 million in June 2017, half of which the Company paid Boyd Gaming, net of fees and expenses. Through the acquisition of Boyd Gamings interest in Borgata, the Company obtained 100% of the equity interests in Borgata and therefore consolidated Borgata as of August 1, 2016. The Company recognized 100% of the assets and liabilities of Borgata at fair value at the date of the acquisition. Prior to the acquisition, the Company held a 50% ownership interest in Borgata, which was accounted for under the equity method. The fair value of the equity interests of Borgata was determined by the transaction price and equaled approximately $1.2 billion. The carrying value of the Companys equity method investment was significantly less than its share of the fair value of Borgata at the acquisition date, resulting in a $430 million gain on the acquisition. Borgatas net revenue for the period from August 1, 2016 through December 31, 2016 was $350 million, operating income was $34 million and net income was $4 million. Pro forma information. The operating results for Borgata are included in the accompanying consolidated statements of operations from the date of acquisition. The following unaudited pro forma consolidated financial information for the Company has been prepared assuming the Companys acquisition of its controlling interest has occurred as of January 1, 2015 and excludes the $430 million gain discussed above. The unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of January 1, 2015. Year Ended December 31, 2016 (In thousands, except per share data) (unaudited) Net revenues $ 9,963,322 Net income attributable to MGM Resorts International 818,247 Basis net income per share $ 1.44 Diluted net income per share $ 1.43