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Item 1. Financial Statements

2022-08-03 compared with 2022-05-02 · 449 added, 239 removed, 493 unchanged (58% of the section changed)

11 unchanged sentences

Prepaid expenses and other 337,701 258,972

Assets held for sale 2,028,267 —

Total current assets 9,166,781 6,416,182

14 unchanged sentences

Other accrued liabilities 1,874,659 1,983,444

Liabilities related to assets held for sale 1,957,420 —

Total current liabilities 5,544,580 3,442,264

20 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Casino $ 1,357,134 $ 1,336,124 $ 2,778,044 $ 2,434,757

13 unchanged sentences

Property transactions, net ( 19,395 ) ( 28,906 ) 35,343 ( 2,835 )

Gain on REIT transactions, net ( 2,277,747 ) — ( 2,277,747 ) —

Depreciation and amortization 366,255 283,625 654,893 574,176

827,854 2,087,540 3,529,537 3,956,398

Loss from unconsolidated affiliates ( 46,838 ) ( 25,579 )

Operating income (loss) 105,788 ( 246,690 )

Income (loss) from unconsolidated affiliates ( 55,583 ) 83,338 ( 102,421 ) 57,759

Operating income 2,381,451 263,760 2,487,239 17,070

Non-operating income (expense)

3 unchanged sentences

( 185,987 ) ( 138,630 ) ( 362,909 ) ( 322,576 )

Loss before income taxes ( 71,134 ) ( 430,636 )

Benefit for income taxes 36,341 94,698

Net loss ( 34,793 ) ( 335,938 )

Income (loss) before income taxes 2,195,464 125,130 2,124,330 ( 305,506 )

Benefit (provision) for income taxes ( 572,839 ) ( 34,826 ) ( 536,498 ) 59,872

Net income (loss) 1,622,625 90,304 1,587,832 ( 245,634 )

Net loss attributable to noncontrolling interests 161,312 14,449 178,089 18,558

Net loss attributable to MGM Resorts International $ ( 18,016 ) $ ( 331,829 )

Loss per share

Net income (loss) attributable to MGM Resorts International $ 1,783,937 $ 104,753 $ 1,765,921 $ ( 227,076 )

Earnings (loss) per share

Basic $ 4.24 $ 0.14 $ 4.06 $ ( 0.56 )

8 unchanged sentences

Three Months Ended

Net loss $ ( 34,793 ) $ ( 335,938 )

Other comprehensive income, net of tax:

June 30, Six Months Ended

2022 2021 2022 2021

Net income (loss) $ 1,622,625 $ 90,304 $ 1,587,832 $ ( 245,634 )

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment ( 9,828 ) 5,811 ( 27,794 ) ( 7,211 )

Unrealized gain on cash flow hedges 1,661 2,090 37,692 17,388

Other comprehensive income 18,065 2,276

Comprehensive loss ( 16,728 ) ( 333,662 )

Other comprehensive income (loss) ( 8,167 ) 7,901 9,898 10,177

Comprehensive income (loss) 1,614,458 98,205 1,597,730 ( 235,457 )

Comprehensive loss attributable to noncontrolling interests 163,460 10,213 164,781 11,792

Comprehensive loss attributable to MGM Resorts International $ ( 15,407 ) $ ( 332,083 )

Comprehensive income (loss) attributable to MGM Resorts International $ 1,777,918 $ 108,418 $ 1,762,511 $ ( 223,665 )

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended June 30,

Cash flows from operating activities

Net loss $ ( 34,793 ) $ ( 335,938 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Net income (loss) $ 1,587,832 $ ( 245,634 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 654,893 574,176

Amortization of debt discounts, premiums and issuance costs 18,271 19,938

Loss on early retirement of debt — 37

Provision for credit losses 292 3,724

1 unchanged sentence

Property transactions, net 35,343 ( 2,835 )

Gain on REIT transactions, net ( 2,277,747 ) —

Noncash lease expense 168,022 88,029

Other investment gains ( 14,983 ) —

Loss from unconsolidated affiliates 61,971 46,415

Other investment losses (gains) 7,974 ( 86,183 )

Loss (income) from unconsolidated affiliates 123,674 ( 13,707 )

Distributions from unconsolidated affiliates 34,830 49,625

7 unchanged sentences

Other 6,957 ( 41,341 )

Net cash provided by (used in) operating activities 420,482 ( 87,610 )

Net cash provided by operating activities 932,713 368,416

Cash flows from investing activities

2 unchanged sentences

Investments in unconsolidated affiliates ( 167,181 ) ( 101,845 )

Proceeds from real estate transactions 4,373,820 —

Acquisitions, net of cash acquired ( 1,597,739 ) —

Distributions from unconsolidated affiliates 925 803

Other ( 10,015 ) 342

Net cash used in investing activities ( 237,383 ) ( 154,912 )

Investments and other ( 155,280 ) 1,342

Net cash provided by (used in) investing activities 2,226,681 ( 273,722 )

Cash flows from financing activities

10 unchanged sentences

Effect of exchange rate on cash, cash equivalents, and restricted cash ( 1,617 ) ( 85 )

Change in cash and cash equivalents classified as assets held for sale ( 37,232 ) —

Cash, cash equivalents, and restricted cash

4 unchanged sentences

Interest paid, net of amounts capitalized $ 329,621 $ 347,551

Federal, state and foreign income tax refunds received, net ( 67,294 ) ( 2,401 )

Federal, state and foreign income taxes paid (refunds received), net ( 32,736 ) 1,898

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

Shares Par Value Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Loss Total MGM Resorts International Stockholders’ Equity Noncontrolling Interests Total Stockholders’ Equity

Balances, April 1, 2022 430,562 $ 4,306 $ 761,559 $ 4,321,482 $ ( 22,007 ) $ 5,065,340 $ 4,814,284 $ 9,879,624

Net income (loss) — — — 1,783,937 — 1,783,937 ( 163,596 ) 1,620,341

Currency translation adjustment — — — — ( 6,709 ) ( 6,709 ) ( 3,119 ) ( 9,828 )

Cash flow hedges — — — — 690 690 971 1,661

Stock-based compensation — — 12,075 — — 12,075 3,304 15,379

Issuance of common stock pursuant to stock-based compensation awards 225 2 ( 5,406 ) — — ( 5,404 ) — ( 5,404 )

Cash distributions to noncontrolling interest owners — — — — — — ( 2,448 ) ( 2,448 )

Dividends declared and paid to common shareholders ($ 0.0025 per share)

— — — ( 1,021 ) — ( 1,021 ) — ( 1,021 )

Repurchases of common stock ( 32,369 ) ( 324 ) ( 755,893 ) ( 357,866 ) — ( 1,114,083 ) — ( 1,114,083 )

Adjustment of redeemable noncontrolling interest to redemption value — — ( 12,412 ) — — ( 12,412 ) — ( 12,412 )

Deconsolidation of MGP — — — — 11,084 11,084 ( 3,184,710 ) ( 3,173,626 )

Other — — 77 — — 77 ( 577 ) ( 500 )

Balances, June 30, 2022 398,418 $ 3,984 $ — $ 5,746,532 $ ( 16,942 ) $ 5,733,574 $ 1,464,109 $ 7,197,683

Balances, January 1, 2022 453,804 $ 4,538 $ 1,750,135 $ 4,340,588 $ ( 24,616 ) $ 6,070,645 $ 4,906,121 $ 10,976,766

Net loss — — — ( 18,016 ) — ( 18,016 ) ( 19,046 ) ( 37,062 )

Net income (loss) — — — 1,765,921 — 1,765,921 ( 182,642 ) 1,583,279

Currency translation adjustment — — — — ( 16,893 ) ( 16,893 ) ( 10,901 ) ( 27,794 )

5 unchanged sentences

— — — ( 2,111 ) — ( 2,111 ) — ( 2,111 )

MGP dividend payable to Class A shareholders — — — — — — ( 83,080 ) ( 83,080 )

Issuance of restricted stock units — — 1,941 — — 1,941 186 2,127

1 unchanged sentence

Adjustment of redeemable noncontrolling interest to redemption value — — ( 21,398 ) — — ( 21,398 ) — ( 21,398 )

Deconsolidation of MGP — — — — 11,084 11,084 ( 3,184,710 ) ( 3,173,626 )

Other — — 216 — — 216 ( 1,132 ) ( 916 )

Balances, March 31, 2022 430,562 $ 4,306 $ 761,559 $ 4,321,482 $ ( 22,007 ) $ 5,065,340 $ 4,814,284 $ 9,879,624

Balances, June 30, 2022 398,418 $ 3,984 $ — $ 5,746,532 $ ( 16,942 ) $ 5,733,574 $ 1,464,109 $ 7,197,683

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

Balances, April 1, 2021 491,874 $ 4,919 $ 3,569,186 $ 2,757,941 $ ( 25,218 ) $ 6,306,828 $ 4,925,691 $ 11,232,519

Net income (loss) — — — 104,753 — 104,753 ( 16,953 ) 87,800

Currency translation adjustment — — — — 3,233 3,233 2,578 5,811

Cash flow hedges — — — — 432 432 1,658 2,090

Stock-based compensation — — 9,684 — — 9,684 1,174 10,858

Issuance of common stock pursuant to stock-based compensation awards 238 2 ( 2,316 ) — — ( 2,314 ) — ( 2,314 )

Cash distributions to noncontrolling interest owners — — — — — — ( 3,290 ) ( 3,290 )

Dividends declared and paid to common shareholders ($ 0.0025 per share)

— — — ( 1,220 ) — ( 1,220 ) — ( 1,220 )

MGP dividend payable to Class A shareholders — — — — — — ( 80,673 ) ( 80,673 )

Repurchases of common stock ( 5,582 ) ( 56 ) ( 220,336 ) — — ( 220,392 ) — ( 220,392 )

Adjustment of redeemable noncontrolling interest to redemption value — — ( 37,011 ) — — ( 37,011 ) — ( 37,011 )

MGP Class A share issuances — — 16,752 — 371 17,123 94,387 111,510

Other — — ( 944 ) — 9 ( 935 ) ( 631 ) ( 1,566 )

Balances, June 30, 2021 486,530 $ 4,865 $ 3,335,015 $ 2,861,474 $ ( 21,173 ) $ 6,180,181 $ 4,923,941 $ 11,104,122

Balances, January 1, 2021 494,318 $ 4,943 $ 3,439,453 $ 3,091,007 $ ( 30,677 ) $ 6,504,726 $ 4,675,182 $ 11,179,908

13 unchanged sentences

Other — — ( 3,171 ) — ( 2,473 ) ( 5,644 ) ( 2,694 ) ( 8,338 )

Balances, March 31, 2021 491,874 $ 4,919 $ 3,569,186 $ 2,757,941 $ ( 25,218 ) $ 6,306,828 $ 4,925,691 $ 11,232,519

Balances, June 30, 2021 486,530 $ 4,865 $ 3,335,015 $ 2,861,474 $ ( 21,173 ) $ 6,180,181 $ 4,923,941 $ 11,104,122

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

Organization.

MGM Resorts International (together with its consolidated subsidiaries, unless otherwise indicated or unless the context requires otherwise, the “Company”) is a Delaware corporation that acts largely as a holding company and, through subsidiaries, owns and operates casino resorts .

As of March 31, 2022, the Company operates the following integrated casino, hotel and entertainment resorts in Las Vegas, Nevada:

Aria (including Vdara), Bellagio, MGM Grand Las Vegas (including The Signature), The Mirage, Mandalay Bay, Luxor, New York-New York, Park MGM, and Excalibur.

As of June 30, 2022, the Company operates the following integrated casino, hotel and entertainment resorts in Las Vegas, Nevada:

Aria (including Vdara), Bellagio, The Cosmopolitan of Las Vegas ( “ The Cosmopolitan”), MGM Grand Las Vegas (including The Signature), The Mirage, Mandalay Bay, Luxor, New York-New York, Park MGM, and Excalibur.

The Company also operates MGM Grand Detroit in Detroit, Michigan, MGM National Harbor in Prince George’s County, Maryland, MGM Springfield in Springfield, Massachusetts, Borgata in Atlantic City, New Jersey, Empire City in Yonkers, New York, MGM Northfield Park in Northfield Park, Ohio, and the following resorts in Mississippi:

1 unchanged sentence

Additionally, the Company operates The Park, a dining and entertainment district located between New York-New York and Park MGM, and the Company owns and operates Shadow Creek, an exclusive world-class golf course located approximately ten miles north of the Las Vegas Strip, and Fallen Oak golf course in Saucier, Mississippi.

MGM Growth Properties LLC (“MGP”), a consolidated subsidiary of the Company as of March 31, 2022 and until the closing of the VICI Transaction, as discussed below, was organized as an umbrella partnership REIT (commonly referred to as an UPREIT) structure in which substantially all of its assets were owned by and substantially all of its operations were conducted through MGM Growth Properties Operating Partnership LP (the “Operating Partnership”).

Prior to the closing of the VICI Transaction, MGP had two classes of authorized and outstanding voting common shares (collectively, the “shares”):

The Company leases the real estate assets of its domestic resorts pursuant to triple-net lease agreements, as further discussed in Note 9.

The Company has an approximate 56 % controlling interest in MGM China Holdings Limited (together with its subsidiaries, “MGM China”), which owns MGM Grand Paradise, S.A.

(“MGM Grand Paradise”).

MGM Grand Paradise owns and operates MGM Macau and MGM Cotai, two integrated casino, hotel and entertainment resorts in Macau, as well as the related gaming subconcession and land concessions.

Prior to the closing of the VICI Transaction (defined below), MGM Growth Properties LLC (“MGP”) was a consolidated subsidiary of the Company.

Substantially all of its assets were owned by and substantially all of its operations were conducted through MGM Growth Properties Operating Partnership LP (the “Operating Partnership”).

MGP had two classes of common shares:

Class A shares and a single Class B share.

The Company owned MGP’s Class B share, which did not provide its holder any rights to profits or losses or any rights to receive distributions from operations of MGP or upon liquidation or winding up of MGP.

MGP’s Class A shareholders were entitled to one vote per share, while the Company, as the owner of the Class B share, held a controlling interest in MGP as it was entitled to an amount of votes representing a majority of the total voting power of MGP’s shares so long as the Company and its controlled affiliates’ (excluding MGP) aggregate beneficial ownership of the combined economic interests in MGP and the Operating Partnership did not fall below 30 %.

The Company owned MGP’s Class B share, through which it held a controlling interest in MGP as it was entitled to an amount of votes representing a majority of the total voting power of MGP’s shares.

The Company and MGP each held Operating Partnership units representing limited partner interests in the Operating Partnership.

The general partner of the Operating Partnership was a wholly owned subsidiary of MGP.

The Operating Partnership units held by the Company were exchangeable into Class A shares of MGP on a one-to-one basis, or cash at the Fair Market Value of a Class A share (as defined in the Operating Partnership’s partnership agreement).

The determination of settlement method was at the option of MGP’s independent conflicts committee.

As of March 31, 2022, the Company owned 41.5 % of the Operating Partnership units, and MGP held the remaining 58.5 % ownership interest in the Operating Partnership.

Prior to the closing of the VICI Transaction, the Company leased the real estate assets of The Mirage, Luxor, New York-New York, Park MGM, Excalibur, The Park, Gold Strike Tunica, MGM Grand Detroit, Beau Rivage, Borgata, Empire City, MGM National Harbor, MGM Northfield Park, and MGM Springfield pursuant to a master lease agreement between a subsidiary of the Company and a subsidiary of the Operating Partnership.

The Company leases the real estate assets of Bellagio pursuant to a lease agreement between a subsidiary of the Company and a venture that is 5 % owned by such subsidiary and 95 % owned by a subsidiary of Blackstone Real Estate Income Trust, Inc.

(“BREIT”, and such venture, the “Bellagio BREIT Venture”).

Additionally, the Company leases the real estate assets of Mandalay Bay and MGM Grand Las Vegas, pursuant to a lease agreement between a subsidiary of the Company and a venture that is 50.1 % owned by a subsidiary of the Operating Partnership and 49.9 % by a subsidiary of BREIT (such venture, the “MGP BREIT Venture”).

Further, the Company leases the real estate assets of Aria (including Vdara) pursuant to a lease agreement between a subsidiary of the Company and funds managed by The Blackstone Group ("Blackstone"), as further discussed below.

Refer to Note 7 for further discussion of the leases.

Immediately prior to the VICI Transaction, the Company owned 41.5 % of the Operating Partnership units, and MGP held the remaining 58.5 % ownership interest in the Operating Partnership.

Additionally, the Company had leased the real estate assets of certain of its domestic properties from the Operating Partnership, as further discussed in Note 14, and the real estate assets of Mandalay Bay and MGM Grand Las Vegas from a venture that was 50.1 % owned by a subsidiary of the Operating Partnership and 49.9 % by a subsidiary of Blackstone Real Estate Investment Trust, Inc.

(“BREIT”, such venture, the “VICI BREIT Venture”).

VICI Transaction.

On April 29, 2022, the Company completed a series of transactions with VICI Properties, Inc.

(“VICI”) and MGP whereby VICI acquired MGP in a stock-for-stock transaction (such transaction, the “VICI Transaction”).

MGP Class A shareholders received 1.366 shares of newly issued VICI stock in exchange for each MGP Class A share outstanding and the Company received 1.366 units of the new VICI operating partnership (“VICI OP”) in exchange for each Operating

Partnership unit held by the Company.

The fixed exchange ratio represents an agreed upon price of $ 43 per share of MGP Class A share to the five-day volume weighted average price of VICI stock as of the close of business on July 30, 2021.

In connection with the exchange, VICI OP redeemed the majority of the Company’s VICI OP units for cash consideration of $ 4.4 billion, with the Company retaining an approximate 1 % ownership interest in VICI OP with a fair value of approximately $ 375 million.

(“VICI”) and MGP whereby VICI acquired MGP in a stock-for-stock transaction (such transaction, the “VICI Transaction”), with the Company retaining an approximate 1 % ownership interest in VICI Properties OP LLC (“VICI OP”).

MGP’s Class B share that was held by the Company was cancelled.

Accordingly, the Company no longer holds a controlling interest in MGP and deconsolidated MGP upon the closing of the April 2022 transactions.

Accordingly, the Company no longer holds a controlling interest in MGP and deconsolidated MGP upon the closing of the transactions.

Refer to Note 3 for further discussion of the transactions.

In connection with the VICI Transaction, the Company entered into an amended and restated master lease with VICI.

The new master lease has an initial term of 25 years, with three 10-year renewals, and initial annual rent of $ 860 million, escalating annually at a rate of 2 % per annum for the first 10 years and thereafter equal to the greater of 2 % and the CPI increase during the prior year subject to a cap of 3 %.

The lease has a triple-net structure, which requires the Company to pay substantially all costs associated with each property, including real estate taxes, insurance, utilities and routine maintenance, in addition to the rent.

Additionally, the Company is required to pay the rent payments under the ground leases of the Borgata, Beau Rivage, and National Harbor.

Pending Transactions

On September 26, 2021, the Company entered into an agreement to acquire the operations of The Cosmopolitan of Las Vegas (“The Cosmopolitan”) for cash consideration of $ 1.625 billion, subject to customary working capital adjustments.

Additionally, the Company will enter into a lease agreement for the real estate assets of The Cosmopolitan.

The Cosmopolitan lease will have an initial term of 30 years with three subsequent 10 -year renewal periods, exercisable at the Company’s option.

The initial term of the lease provides for an initial annual cash rent of $ 200 million with a fixed 2 % escalator for the first 15 years, and thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year, subject to a cap of 3 %.

The transaction is expected to close in the first half of 2022, subject to regulatory approvals and other customary closing conditions.

In addition, on December 13, 2021, the Company entered into an agreement to sell the operations of The Mirage to an affiliate of Seminole Hard Rock Entertainment, Inc.

("Hard Rock") for cash consideration of $ 1.075 billion, subject to certain purchase price adjustments.

Upon closing, the master lease between the Company and VICI will be amended and restated to reflect a $ 90 million reduction in annual cash rent.

The transaction is expected to close during the second half of 2022, subject to certain closing conditions, including, but not limited to, the receipt of regulatory approvals.

On May 2, 2022, the Company commenced a public offer to the shareholders of LeoVegas AB (publ) (“LeoVegas”) to tender 100 % of the shares of LeoVegas at a price of SEK 61 in cash per share, equivalent to a total tender offer value of approximately SEK 6.0 billion (approximately $ 607 million, based on exchange rates at April 29, 2022).

The transaction is expected to close in the second half of 2022, subject to certain regulatory approvals, the receipt of valid tenders of more than 90 % of LeoVegas' shares, and customary closing conditions.

The Company has an approximate 56 % controlling interest in MGM China Holdings Limited (together with its subsidiaries, “MGM China”), which owns MGM Grand Paradise, S.A.

(“MGM Grand Paradise”).

MGM Grand Paradise owns and operates MGM Macau and MGM Cotai, two integrated casino, hotel and entertainment resorts in Macau, as well as the related gaming subconcession and land concessions.

Gaming in Macau is currently administered by the Macau Government through concessions awarded to three different concessionaires and three subconcessionaires, of which a subsidiary of MGM China, MGM Grand Paradise, is a subconcessionaire.

In 2019, the expiration of MGM Grand Paradise’s subconcession term was extended from March 31, 2020 to June 26, 2022, consistent with the expiration of the other concessionaires and subconcessionaires.

Pursuant to the current Macau gaming law, upon reaching the maximum duration of 20 years, the term of the concessions may be extended one or more times by order of the Chief Executive, which period may not exceed, in total, 5 years.

On January 14, 2022, the Macau Government disclosed the content of a bill to amend Macau gaming law, which followed a 45-day public consultation process regarding draft amendment proposals that were issued in September 2021.

Under the bill the existing subconcessions will be discontinued and a maximum of six concessions will be awarded for a term to be specified in the concession contract that may not exceed 10 years and which may be extended by three years under certain circumstances.

The bill is subject to debate and approval by the Macau Legislative Assembly.

The approval of the new gaming law bill will precede the public tender for the awarding of new gaming concessions.

On March 3, 2022, the Macau Government

announced its intention to extend the term of Macau’s six concession and subconcession contracts from June 26, 2022 until December 31, 2022, and invited the concessionaires and subconcessionaires to submit a formal request for an extension.

On March 11, 2022, MGM Grand Paradise submitted its request for an extension, along with a commitment to pay the Macau government up to MOP 47 million (approximately US$ 6 million) and provide a bank guarantee to secure the fulfillment of MGM Grand Paradise's payment obligations towards its employees should MGM Grand Paradise be unsuccessful in tendering for a new concession contract after its subconcession expires.

The extension of MGM Grand Paradise's subconcession is subject to approval by the Macau government as well as entering into a new subconcession extension contract with SJM Resorts, S.A.

Unless MGM Grand Paradise's gaming subconcession is further extended or legislation with regard to reversion of casino premises is amended the casino area premises and gaming-related equipment subject to reversion will automatically be transferred to the Macau Government upon expiration, and MGM China will cease to generate any revenues from such gaming operations.

In addition, certain events relating to the loss, termination, rescission, revocation or modification of MGM Grand Paradise’s gaming subconcession in Macau, where such events have a material adverse effect on the financial condition, business, properties, or results of operations of MGM China, taken as a whole, may result in a special put option triggering event under MGM China’s senior notes and in an event of default under MGM China’s revolving credit facilities.

MGM China continues to closely monitor developments regarding the retendering process or concession extensions including the issuance of guidance by the Macau Government.

MGM China intends to respond proactively to all relevant Macau Government requirements when known relating to the process.

Management cannot provide any assurance that the gaming subconcession will be further extended beyond the current term or that it will be able to obtain a gaming concession in a public tender;

however, management believes that MGM Grand Paradise will be successful in obtaining an extension of its gaming subconcession beyond its current term and a gaming concession when a public tender is held.

The Company owns 50 % of BetMGM, LLC (“BetMGM”), which provides online sports betting and iGaming in certain jurisdictions in the United States.

Refer to Note 9 for further discussion of the lease.

The Cosmopolitan acquisition.

On May 17, 2022, the Company acquired the operations of The Cosmopolitan.

Additionally, the Company entered into a lease agreement for the real estate assets of The Cosmopolitan.

Refer to Note 3 for additional information on this acquisition and Note 9 for further discussion of the lease.

The Mirage transaction.

On December 13, 2021, the Company entered into an agreement to sell the operations of The Mirage to an affiliate of Seminole Hard Rock Entertainment, Inc.

( “ Hard Rock”).

Upon closing, the master lease between the Company and VICI will be amended and restated.

Refer to Note 3 for additional information on this disposition.

LeoVegas transaction.

On May 2, 2022, the Company commenced a public offer to the shareholders of LeoVegas AB (publ) (“LeoVegas”) to tender 100 % of the shares of LeoVegas at a price of SEK 61 in cash per share, equivalent to a total tender offer value of approximately SEK 6.0 billion (approximately $ 583 million, based on exchange rates at June 30, 2022).

The transaction is expected to close in the third quarter of 2022, subject to certain regulatory approvals, the receipt of valid tenders of more than 90 % of LeoVegas’ shares, and customary closing conditions.

During the three months ended June 30, 2022, the Company purchased shares of LeoVegas in the open market and, as of June 30, 2022, has a 23 % ownership interest.

Gold Strike Tunica transaction.

On June 9, 2022, the Company entered into an agreement to sell the operations of Gold Strike Tunica to Cherokee Nation Entertainment Gaming Holdings, LLC (“CNE”), a subsidiary of Cherokee Nation Business.

Upon closing, the master lease between the Company and VICI will be amended and restated.

Refer to Note 3 for additional information on this disposition.

MGM Grand Paradise existing gaming subconcession and new gaming law.

Gaming in Macau is currently administered by the Macau Government through concessions awarded to three different concessionaires and three subconcessionaires.

Pursuant to the agreement dated April 19, 2005 between MGM Grand Paradise and SJM Resorts S.A.

("SJMSA," formerly Sociedade de Jogos de Macau, S.A.), a gaming subconcession was acquired by MGM Grand Paradise for the right to operate casino games of chance and other casino games for a period commencing on April 20, 2005 through March 31, 2020.

Pursuant to the then-existing Macau gaming law, upon reaching the maximum duration foreseen in the law (up to a maximum term of 20 years), the term of the concessions may be extended one or more times by order of the Chief Executive, which period may not exceed, in total, 5 years.

In 2019, MGM Grand Paradise’s subconcession term was extended from March 31, 2020 to June 26, 2022, consistent with the expiration of the other concessionaires and subconcessionaires.

On June 23, 2022, MGM Grand Paradise entered into an addendum to its subconcession pursuant to which its gaming subconcession was extended to December 31, 2022 (refer to Note 6 for additional considerations relating to the gaming subconcession).

In connection with the extension, MGM Grand Paradise paid the Macau government MOP 47 million (approximately $ 6 million) and will provide, within three months of the execution of the extension, a bank guarantee to secure the fulfillment of MGM Grand Paradise’s existing commitment of labor liabilities upon expiration of its subconcession (refer to Note 10 for discussion on the guarantee).

Additionally, MGM Grand Paradise executed an agreement with the Macau government pursuant to which the casino areas of MGM Cotai and MGM Macau will be reverted, free of charge and without any encumbrances, to the Macau government at the end of the extended subconcession period on December 31, 2022.

Management anticipates the gaming assets subject to reversion will be assets used in gaming operations or located in a gaming area, as well as an allocation of square footage for building assets.

Upon reversion, MGM Grand Paradise will cease to have the legal ownership of the gaming assets, and, while management is currently evaluating the effect of the reversion, it expects that it will retain use of such assets if it is able to obtain a gaming concession in the forthcoming public tender.

On January 14, 2022, the Macau government disclosed the content of a proposed bill to amend Macau gaming law, which followed a 45-day public consultation process regarding draft amendment proposals that were issued in September 2021.

The new gaming law was approved by the Macau Legislative Assembly on June 21, 2022 and published in the Macau Official Gazette on June 22, 2022.

Under the new gaming law, the existing subconcessions will be discontinued and a maximum of six concessions will be awarded for a term to be specified in the concession contract that may not exceed 10 years and which may be extended by three years under certain exceptional circumstances.

The enactment of the new gaming law precedes the public tender for the awarding of new gaming concessions for which the rules of the public tender were published on July 1, 2022, which outlined the details for the bidding, the qualifications of bidding companies, and the criteria for granting the new gaming concessions.

On July 28, 2022, the opening of the public tender was announced with a deadline for the submission of bids of September 14, 2022.

MGM China intends to respond proactively and believes it will be in a position to satisfy the relevant requirements relating to the tender process.

Certain events relating to the loss, termination, rescission, revocation or modification of MGM Grand Paradise’s ability to game in Macau, where such events have a material adverse effect on the financial condition, business, properties, or results of operations of MGM China, taken as a whole, may result in a special put option triggering event under MGM China’s senior notes and in an event of default under MGM China’s revolving credit facilities.

Management cannot provide any assurance that it will be able to obtain a gaming concession in the public tender;

however, management believes that MGM Grand Paradise will be successful in obtaining a gaming concession when the public tender is held.

The Company owns 50 % of BetMGM, LLC (“BetMGM”), which provides online sports betting and iGaming in certain jurisdictions in North America.

The other 50 % of BetMGM is owned by Entain plc.

3 unchanged sentences

See Note 13 for additional information about the Company’s segments.

Financial Impact of COVID-19.

The spread of the novel coronavirus (“COVID-19”) and developments surrounding the global pandemic have had a significant impact on the Company’s business, financial condition, results of operations and cash flows since the onset of the pandemic, which continued in the first quarter of 2022 and may continue during the remainder of 2022 and thereafter.

In the first quarter of 2022, all of the Company's properties were open and not subject to operating restrictions;

Impact of COVID-19 - Update.

As of June 30, 2022, all of the Company’s domestic properties were open and not subject to operating restrictions;

however, travel and business volume were negatively affected in the early part of the first quarter of 2022 due to the spread of the omicron variant.

Although all of the Company’s properties have re-opened, in light of the unpredictable nature of the pandemic, including the emergence and spread of COVID-19 variants, the properties may be subject to new operating restrictions and/or temporary, complete, or partial shutdowns in the future.

At this time, the Company cannot predict whether jurisdictions, states or the federal government will adopt similar or more restrictive measures in the future than in the past, including stay-at-home orders or the temporary closure of all or a portion of the Company’s properties as a result of the pandemic.

In Macau, the Company’s properties continue to operate subject to certain health safeguards, such as limiting the number of seats available at each table game, slot machine spacing, temperature checks, mask protection, and health declarations submitted through the Macau Health Code system.

Although the issuance of tourist visas (including the individual visit scheme) for residents of mainland China to travel to Macau resumed in 2020, several travel and entry restrictions in Macau, Hong Kong and mainland China remain in place (including the temporary suspension of ferry services between Hong Kong and Macau, the negative nucleic acid test result certificate, and mandatory quarantine requirements for returning residents, for visitors from Hong Kong, Taiwan, and certain regions in mainland China, and bans on entry on other visitors), which significantly impacted visitation to the Company’s Macau properties.

Macau is currently operating under a “dynamic zero” COVID-19 policy, as is Hong Kong and mainland China.

Under this policy, when local infections are identified several restrictions may be imposed, including the lock down of sections of cities or entire cities and travel restrictions, imposition of mass mandatory nucleic acid testing, shortening of the validity period of negative test results for re-entry into mainland China from Macau and imposition of quarantine requirements, cancellation or suspension of certain events and, in some instances, closing of certain entertainment and leisure facilities.

gaming and hotel operations have remained open during these states of immediate prevention, such measures have had a negative effect on the MGM China's operations and it is uncertain whether further closures, including the closure of the Company’s properties, or travel restrictions to Macau will be implemented if additional local COVID-19 cases are identified.

The Company’s properties in Macau were open during the first half of 2022, however, gaming operations were temporarily suspended on July 11, 2022 due to an increase in the number of COVID-19 cases in Macau and resumed on July 23, 2022, subject to certain continuing health safeguards, with most restaurants and bars and certain retail outlets remaining closed.

Several travel and entry restrictions in Macau, Hong Kong and mainland China remain in place, including entry bans, visa limitations, COVID-19 testing, and certain quarantine requirements, which have significantly impacted visitation to the Company’s Macau properties.

Although gaming operations have resumed, protective and operational measures have had a negative effect on MGM China’s operations.

The extent and timing of a closure of the MGM China’s properties, limitations of operations, or whether further travel restrictions to or from Macau will be implemented is uncertain if there is an increase or continued spread of COVID-19.

NOTE 2 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

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The Company evaluates entities for which control is achieved through means other than voting rights to determine if it is the primary beneficiary of a variable interest entity (“VIE”).

A VIE is an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support.

The Company identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics:

(i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance;

and (ii) the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the entity.

The Company consolidates its investment in a VIE when it determines that it is its primary beneficiary.

For these VIEs, the Company records a noncontrolling interest in the consolidated balance sheets.

The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary.

The Company performs this analysis on an ongoing basis.

As of March 31, 2022, management determined that MGP is a VIE because the Class A equity investors as a group lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance.

The Company determined that it is the primary beneficiary of MGP and consolidates MGP because (i) its ownership of MGP’s single Class B share entitles it to a majority of the total voting power of MGP’s shares, and (ii) the exchangeable nature of the Operating Partnership units owned provide the Company the right to receive benefits from MGP that could potentially be significant to MGP.

The Company recorded MGP’s ownership interest in the Operating Partnership as noncontrolling interest in the Company’s consolidated financial statements.

As of March 31, 2022, on a consolidated basis MGP had total assets of $ 10.4 billion, primarily related to its real estate investments, and total liabilities of $ 5.0 billion, primarily related to its indebtedness.

Refer to Note 1 for discussion regarding the deconsolidation of MGP upon closing of the VICI Transaction in April 2022.

Management has determined that Bellagio BREIT Venture is a VIE because the equity holders as a group lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance.

The Company has determined that it is not the primary beneficiary of Bellagio BREIT Venture and, accordingly, does not consolidate the venture, because the Company does not have power to direct the activities that could potentially be significant to the venture;

BREIT, as the managing member, has such power.

The Company has recorded its 5 % ownership interest in Bellagio BREIT Venture as an investment in unconsolidated affiliates in the Company’s consolidated financial statements, for which such amount was $ 58 million as of March 31, 2022.

The Company’s maximum exposure to loss as a result of its involvement with Bellagio BREIT Venture is equal to the carrying value of its investment, assuming no future capital funding requirements, plus the exposure to loss resulting from the Company’s guarantee of the debt of Bellagio BREIT Venture, which guarantee is immaterial as of March 31, 2022, as further discussed in Note 8.

Management has determined that the venture that is 5 % owned by a subsidiary of the Company and 95 % owned by a subsidiary of BREIT, (such venture, the “Bellagio BREIT Venture”), is a VIE because the equity holders as a group lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance.

The Company has determined that it is not the primary beneficiary of Bellagio BREIT Venture because the Company does not have power to direct the activities that could potentially be significant to the venture as BREIT, as the managing member, has such power;

accordingly, the Company does not consolidate the venture.

The Company’s maximum exposure to loss in Bellagio BREIT Venture is equal to the carrying value of its investment of $ 57 million as of June 30, 2022, assuming no future capital funding requirements, plus the exposure to loss resulting from the Company’s guarantee of the debt of Bellagio BREIT Venture, which guarantee is immaterial as of June 30, 2022, as further discussed in Note 10.

For entities determined not to be a VIE, the Company consolidates such entities in which the Company owns 100 % of the equity.

For entities in which the Company owns less than 100% of the equity interest, the Company consolidates the entity under the voting interest model if it has a controlling financial interest based upon the terms of the respective entities’ ownership agreements, such as MGM China.

For these entities, the Company records a noncontrolling interest in

the consolidated balance sheets and all intercompany balances and transactions are eliminated in consolidation.

If the entity does not qualify for consolidation under the voting interest model and the Company has significant influence over the operating and financial decisions of the entity, the Company accounts for the entity under the equity method, such as MGP BREIT Venture and BetMGM, which do not qualify for consolidation as the Company has joint control, given the entities are structured with substantive participating rights whereby both owners participate in the decision making process, which prevents the Company from exerting a controlling financial interest in such entities, as defined in ASC 810.

For equity interests in entities in which the Company does not have significant influence, the Company records its equity investment under ASC 321 and reflects such investments within “Other long-term assets, net” on the consolidated balance sheets.

The fair value of such equity investment was $ 81 million as of March 31, 2022.

For these entities, the Company records a noncontrolling interest in the consolidated balance sheets and all intercompany balances and transactions are eliminated in consolidation.

If the entity does not qualify for consolidation under the voting interest model and the Company has significant influence over the operating and financial decisions of the entity, the Company generally accounts for the entity under the equity method, such as BetMGM, which does not qualify for consolidation as the Company has joint control, given the entity is structured with substantive participating rights whereby both owners participate in the decision making process, which prevents the Company from exerting a controlling financial interest in such entity, as defined in ASC 810.

For entities over which the Company does not have significant influence, such as VICI OP, the Company accounts for its equity investment under ASC 321.

Fair value measurements .

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The Company used the following inputs in its fair value measurements:

• Level 1 inputs when measuring its equity investments under ASC 321;

• Level 1 inputs when measuring its equity investments recorded at fair value;

• Level 1 and Level 2 inputs for its long-term debt fair value disclosures.

• Level 1, Level 2, and Level 3 inputs when assessing the fair value of assets acquired and liabilities assumed in the CityCenter acquisition.

• Level 1, Level 2, and Level 3 inputs when assessing the fair value of assets acquired and liabilities assumed in acquisitions.

Fair value is measured based upon trading prices on the applicable securities exchange for equity investments for which the Company has elected the fair value option of ASC 825, such as LeoVegas, and equity investments accounted for under ASC 321, such as VICI OP.

The fair value of these investments was $ 571 million and $ 66 million as of June 30, 2022 and December 31, 2021, respectively, and is reflected within “Other long-term assets, net” on the consolidated balance sheets.

Unrealized gains and losses are recorded in “Other, net” in the statements of operations.

For the three and six months ended June 30, 2022, the Company recorded a net unrealized loss of $ 23 million and $ 8 million, respectively.

For each of the three and six months ended June 30, 2021, the Company recorded a net unrealized gain of $ 86 million.

Restricted cash.

Restricted cash reflects cash held in an escrow account related to the reverse termination fee that was contractually required to be prefunded for The Cosmopolitan acquisition and is reflected as "Restricted Cash" on the condensed consolidated balance sheets.

"Restricted Cash" and "Cash and cash equivalents" on the condensed consolidated balance sheets equal "Cash, cash equivalents, and restricted cash" on the condensed consolidated statements of cash flows.

Restricted cash reflects cash held in an escrow account related to the reverse termination fee that was contractually required to be prefunded for The Cosmopolitan acquisition and is reflected as “Restricted Cash” on the consolidated balance sheets as of December 31, 2021.

“Restricted Cash” and “Cash and cash equivalents” on the consolidated balance sheets equal “Cash, cash equivalents, and restricted cash” on the consolidated statements of cash flows as of December 31, 2021.

Accounts receivable.

As of June 30, 2022 and December 31, 2021, the loss reserve on accounts receivable was $ 113 million and $ 128 million, respectively.

Revenue recognition.

The Company’s revenue from contracts with customers consists of casino wagers transactions, hotel room sales, food and beverage transactions, entertainment shows, and retail transactions.

For casino wager transactions that include incentives earned by customers under the Company’s loyalty programs, the Company allocates a portion of net win based upon the standalone selling price of such incentive (less estimated breakage).

This allocation is deferred and recognized as revenue when the customer redeems the incentive.

When redeemed, revenue is recognized in the department that provides the goods or service.

Redemption of loyalty incentives at third party outlets are deducted from the loyalty liability and amounts owed are paid to the third party, with any discount received recorded as other revenue.

After allocating revenue to other goods and services provided as part of casino wager transactions, the Company records the residual amount to casino revenue.

Contract and Contract-Related Liabilities .

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The Company generally has three types of liabilities related to contracts with customers:

(1) outstanding chip liability, which represents the amounts owed in exchange for gaming chips held by a customer, (2) loyalty program obligations, which represents the deferred allocation of revenue relating to loyalty program incentives earned, as discussed above, and (3) customer advances and other, which is primarily funds deposited by customers before gaming play occurs (“casino front money”) and advance payments on goods and services yet to be provided such as advance ticket sales and deposits on rooms and convention space or for unpaid wagers.

(1) outstanding chip liability, which represents the amounts owed in exchange for gaming chips held by a customer, (2) loyalty program obligations, which represents the deferred allocation of revenue relating to loyalty program incentives earned, and (3) customer advances and other, which is primarily funds deposited by customers before gaming play occurs (“casino front money”) and advance payments on goods and services yet to be provided, such as advance ticket sales and deposits on rooms and convention space or for unpaid wagers.

These liabilities are generally expected to be recognized as revenue within one year of being purchased, earned, or deposited and are recorded within “Other accrued liabilities” on the consolidated balance sheets.

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Balance at January 1 $ 176,219 $ 212,671 $ 144,465 $ 139,756 $ 640,001 $ 382,287

Balance at March 31 141,636 170,040 149,316 133,047 720,764 407,372

Balance at June 30 165,564 144,975 160,752 136,659 704,404 513,971

Increase / (decrease) $ ( 10,655 ) $ ( 67,696 ) $ 16,287 $ ( 3,097 ) $ 64,403 $ 131,684

The June 30, 2022 balances exclude liabilities related to assets held for sale.

Revenue by source.

The Company presents the revenue earned disaggregated by the type or nature of the good or service (casino, room, food and beverage, and entertainment, retail and other) and by relevant geographic region within Note 13.

The Company determines if an arrangement is or contains a lease at inception or modification of the arrangement.

An arrangement is or contains a lease if there are identified assets and the right to control the use of an identified asset is conveyed for a period of time in exchange for consideration.

Control over the use of the identified asset means the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset.

The Company classifies a lease with terms greater than twelve months as either operating or finance.

At commencement date, the right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term.

The initial measurement of the operating lease ROU assets also includes any prepaid lease payments and are reduced by any previously accrued deferred rent.

When available, such as for the Company’s triple-net operating leases for which the lessor has provided its implicit rate or provided the assumptions required for the Company to readily determine the rate implicit in the lease, the Company uses the rate implicit in the lease to discount lease payments to present value.

However, for most of the Company’s leases, such as its ground subleases and equipment leases, the Company cannot readily determine the implicit rate.

Accordingly, the Company uses its incremental borrowing rate to discount the lease payments for such leases based on the information available at the commencement date.

Lease terms include options to extend or terminate the lease when it is reasonably certain that such option will be exercised.

The Company’s triple-net operating leases each contain renewal periods at the Company’s option, each of which are not considered to be reasonably certain of being exercised.

Many of the Company’s leases include fixed rental escalation clauses that are factored into the determination of lease payments.

For operating leases, lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term.

For finance leases, the ROU asset depreciates on a straight-line basis over the shorter of the lease term or useful life of the ROU asset and the lease liability accretes interest based on the interest method using the discount rate determined at lease commencement.

Refer to Note 9 for discussion of leases under which the Company is a lessee.

The master lease agreement with MGP is eliminated in consolidation;

refer to Note 12 for further discussion of the master lease with MGP.

Refer to Note 14 for discussion of the master lease with MGP.

The Company is a lessor under certain other lease arrangements.

Lease revenues earned by the Company from third parties are classified within the line item corresponding to the type or nature of the tenant’s good or service .

During the three months ended March 31, 2022 and 2021, lease revenues from third-party tenants include $ 14 million and $ 4 million recorded within food and beverage revenue, respectively, and $ 26 million and $ 16 million recorded within entertainment, retail, and other revenue for the same such periods, respectively.

During the three and six months ended June 30, 2022, lease revenues from third-party tenants include $ 19 million and $ 33 million recorded within food and beverage revenue, respectively, and $ 29 million and $ 55 million recorded within entertainment, retail, and other revenue for the same such periods, respectively.

During the three and six months ended June 30, 2021, lease revenues from third-party tenants include $ 11 million and $ 16 million recorded within food and beverage revenue, respectively, and $ 20 million and $ 36 million recorded within entertainment, retail, and other revenue for the same such periods, respectively.

Lease revenues from the rental of hotel rooms are recorded as rooms revenues within the consolidated statements of operations.

NOTE 3 — ACQUISITION

On September 27, 2021, the Company completed the acquisition of Infinity World's 50 % ownership interest in CityCenter for cash consideration of $ 2.125 billion.

Through the acquisition, the Company obtained 100 % of the equity interests in CityCenter and therefore consolidated CityCenter as of September 27, 2021.

Share repurchases.

Shares repurchased pursuant to the Company’s share repurchase programs are retired upon purchase.

The cost of the repurchases in excess of the aggregate par value of the shares reduces capital in excess of par value, to the extent available, with any residual cost applied against retained earnings.

NOTE 3 — ACQUISITIONS AND DIVESTITURES

The Cosmopolitan acquisition.

On May 17, 2022, the Company acquired 100 % of the equity interests in the entities that own the operations of The Cosmopolitan for cash consideration of $ 1.625 billion plus working capital adjustments for a total purchase price of approximately $ 1.7 billion.

The acquisition expands the Company’s customer base and provides a greater depth of choices and experiences for guests in Las Vegas.

The Company recognized 100 % of the acquired assets and assumed liabilities 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 level 1 inputs, level 2 inputs, and level 3 inputs.

As the transaction was recently consummated on May 17, 2022, the allocation of fair value for substantially all of the assets and liabilities is preliminary as of June 30, 2022, and may be adjusted up to one year after the acquisition.

The following table sets forth the preliminary purchase price allocation (in thousands):

Fair value of assets acquired and liabilities assumed:

Cash and cash equivalents $ 80,670

Receivables and other current assets 98,006

Property and equipment 122,419

Trademarks 130,000

Customer lists 95,000

Goodwill 1,284,309

Operating lease right-of-use-assets, net 3,404,894

Other long-term assets 23,709

Accounts payable, accrued liabilities, and other current liabilities ( 145,350 )

Operating lease liabilities ( 3,401,815 )

Other long-term liabilities ( 1,570 )

The estimated fair values of the intangible assets were determined using methodologies under the income approach based on significant inputs that were not observable.

The identified intangible assets include trademarks, which is an indefinite-lived intangible asset, and customer lists, which is amortized over its estimated useful life of seven years .

Goodwill, which is deductible for tax purposes, is primarily attributable to the profitability of The Cosmopolitan in excess of identifiable assets as well as expected synergies.

All of the goodwill was assigned to the Company’s Las Vegas Strip Resorts segment.

The operating results for The Cosmopolitan are included in the accompanying consolidated statements of operations from the date of acquisition.

The Cosmopolitan’s net revenue for the period from May 17, 2022 through June 30, 2022 was $ 151 million and operating income and net income were $ 18 million and $ 18 million, respectively.

CityCenter acquisition.

On September 27, 2021, the Company acquired Infinity World’s 50 % ownership interest in CityCenter for cash consideration of $ 2.125 billion.

Prior to the acquisition, the Company held a 50 % ownership interest, which was accounted for under the equity method.

Through the acquisition, the Company obtained 100 % of the equity interests and therefore consolidated CityCenter as of September 27, 2021.

The fair value of the equity interests of CityCenter was determined by the transaction price and equaled $ 4.25 billion.

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The Company classified the real estate assets as held for sale as of the acquisition date and accordingly measured the real estate assets at fair value less costs to sell, as reflected in the table below.

See Note 7 for additional information regarding the lease.

See Note 9 for discussion of the lease.

The Company recognized 100 % of the assets and liabilities of CityCenter at fair value at the date of the acquisition.

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Other long-term liabilities ( 64,054 )

The Company recognized the identifiable intangible assets of CityCenter at fair value, which consisted of indefinite-lived trade names, which was determined using methodologies under the relief from royalty method based on significant inputs that were not observable.

The fair value of the acquired indefinite-lived trademarks was determined using methodologies under the relief from royalty method based on significant inputs that were not observable.

The goodwill is primarily attributable to the profitability of CityCenter in excess of identifiable assets, of which approximately 50 % of the goodwill is deductible for income tax purposes.

All of the goodwill was assigned to the Company’s Las Vegas Strip Resorts segment.

Unaudited pro forma information.

The operating results for CityCenter 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 Company’s acquisition of its controlling interest had occurred as of January 1, 2020 and excludes the gain on consolidation recognized by the Company.

The pro forma information does not reflect transactions that occurred subsequent to acquisition, such as the subsequent sale-leaseback transaction or the repayment of CityCenter's assumed debt.

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, 2020.

Three Months Ended March 31,

Unaudited pro forma information - CityCenter and The Cosmopolitan acquisitions .

The following unaudited pro forma consolidated financial information for the Company has been prepared assuming the Company’s acquisition of its controlling interest of CityCenter had occurred as of January 1, 2020 and the acquisition of The Cosmopolitan had occurred as of January 1, 2021.

The pro forma information excludes the gain on consolidation of CityCenter and does not reflect transactions that occurred subsequent to acquisition, such as the Aria real estate sale-leaseback transaction or the repayment of CityCenter’s assumed debt.

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(In thousands)

Net revenues $ 3,422,277 $ 2,685,073 $ 6,542,015 $ 4,554,236

Net loss attributable to MGM Resorts International ( 321,821 )

Net income (loss) attributable to MGM Resorts International 1,781,930 167,176 1,780,076 ( 188,776 )

VICI Transaction.

On April 29, 2022, VICI acquired MGP in a stock-for-stock transaction.

MGP Class A shareholders received 1.366 shares of newly issued VICI stock in exchange for each MGP Class A share outstanding and the Company received 1.366 units of VICI OP in exchange for each Operating Partnership unit held by the Company.

MGP’s Class B share that was held by the Company was cancelled.

Accordingly, the Company no longer holds a controlling interest in MGP and deconsolidated MGP upon the closing of the transactions.

Further, the Company entered into an amended and restated master lease with VICI as discussed in Note 9.

The lease between the Company and VICI BREIT Venture for the real estate assets of Mandalay Bay and MGM Grand Las Vegas remained unchanged.

In connection with the transactions, the Company recognized a $ 2.3 billion gain recorded within “Gain on REIT transactions, net.” The gain reflects the fair value of consideration received of $ 4.8 billion plus the carrying amount of noncontrolling interest immediately prior to the transactions of $ 3.2 billion less the carrying value of the assets and liabilities and accumulated comprehensive income derecognized of $ 5.7 billion.

The major classes of assets and liabilities derecognized are as follows:

(In thousands)

Cash and cash equivalents $ 25,387

Income tax receivable 5,486

Prepaid expenses and other 128

Property and equipment, net 9,250,519

Investments in and advances to unconsolidated affiliates 817,901

Operating lease right-of-use assets, net 236,255

Other long-term assets, net 3,991

Total assets $ 10,339,667

Accounts payable $ 1,136

Accrued interest on long-term debt 68,150

Other accrued liabilities 4,057

Deferred income taxes, net 1,284

Long-term debt, net 4,259,473

Operating lease liabilities 336,689

Total liabilities $ 4,670,789

On December 13, 2021, the Company entered into an agreement to sell the operations of The Mirage to an affiliate of Hard Rock for cash consideration of $ 1.075 billion, subject to certain purchase price adjustments.

Upon closing, the master lease between the Company and VICI will be amended and restated to reflect a $ 90 million reduction in annual cash rent.

The transaction is expected to close during the fourth quarter of 2022, subject to certain closing conditions, including, but not limited to, the receipt of regulatory approvals.

The closing condition that the VICI Transaction is consummated or terminated was resolved upon the closing of such transaction and, accordingly, the asset group is classified as held for sale as of June 30, 2022.

Gold Strike Tunica.

On June 9, 2022, the Company entered into an agreement to sell the operations of Gold Strike Tunica to CNE for cash consideration of $ 450 million, subject to certain purchase price adjustments.

Upon closing, the master lease between the Company and VICI will be amended and restated to reflect a $ 40 million reduction in annual cash rent.

The transaction is expected to close during the first quarter of 2023, subject to certain closing conditions, including, but not limited to, the receipt of regulatory approvals.

The asset group is classified as held for sale as of June 30, 2022.

The Mirage and Gold Strike Tunica are not classified as discontinued operations because the Company concluded that the sales are not a strategic shift that have a major effect on the Company’s operations or its financial results and they do not represent a major geographic segment or product line.

The major classes of assets and liabilities classified as held for sale as of June 30, 2022 are as follows:

The Mirage Gold Strike Tunica

(In thousands)

Cash and cash equivalents $ 17,989 $ 19,242

Accounts receivable, net 22,386 1,722

Inventories 4,661 950

Prepaid expenses and other 6,680 1,284

Property and equipment, net 25,861 16,481

Goodwill 10,249 40,523

Other intangible assets, net 3,095 5,700

Operating lease right-of-use assets, net 1,329,337 513,670

Other long-term assets, net 7,024 1,413

Assets held for sale $ 1,427,282 $ 600,985

Accounts payable $ 10,525 $ 5,335

Other accrued liabilities 66,421 17,826

Other long-term obligations 8,248 3,508

Operating lease liabilities 1,330,013 515,544

Liabilities related to assets held for sale $ 1,415,207 $ 542,213

NOTE 4 — PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

2022 December 31,

(In thousands)

Land $ 437,387 $ 4,082,842

Buildings, building improvements and land improvements 4,363,189 12,236,042

Furniture, fixtures and equipment 4,231,243 5,722,565

Construction in progress 456,394 421,445

9,488,213 22,462,894

Accumulated depreciation ( 4,647,475 ) ( 8,179,310 )

Finance lease ROU assets, net 186,930 151,909

$ 5,027,668 $ 14,435,493

NOTE 5 — INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

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(In thousands)

MGP BREIT Venture ( 50.1 % owned by the Operating Partnership)

VICI BREIT Venture ( 50.1 % owned by the Operating Partnership through April 28, 2022)

$ — $ 816,756

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$ 155,600 $ 967,044

The Company recorded its share of loss from unconsolidated affiliates, including adjustments for basis differences, as follows:

The Company recorded its share of income (loss) from unconsolidated affiliates, including adjustments for basis differences, as follows:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(In thousands)

Loss from unconsolidated affiliates $ ( 46,838 ) $ ( 25,579 )

Income (loss) from unconsolidated affiliates $ ( 55,583 ) $ 83,338 $ ( 102,421 ) $ 57,759

Non-operating items from unconsolidated affiliates ( 6,120 ) ( 23,216 ) ( 21,253 ) ( 44,052 )

$ ( 61,703 ) $ 60,122 $ ( 123,674 ) $ 13,707

The following table summarizes information related to the Company’s share of operating loss from unconsolidated affiliates:

The following table summarizes information related to the Company’s share of operating income (loss) from unconsolidated affiliates:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(In thousands)

CityCenter $ — $ 90,212 $ — $ 87,380

MGP BREIT Venture 38,936 38,962

VICI BREIT Venture 12,116 38,954 51,051 77,917

BetMGM ( 71,229 ) ( 45,979 ) ( 163,223 ) ( 105,215 )

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$ ( 55,583 ) $ 83,338 $ ( 102,421 ) $ 57,759

Refer to Note 3 for discussion on the acquisition and consolidation of CityCenter in September 2021.

MGP BREIT Venture distributions.

For the three months ended March 31, 2022 and 2021, the Operating Partnership received $ 24 million and $ 15 million in distributions from MGP BREIT Venture, respectively.

Refer to Note 3 for discussion of the acquisition and consolidation of CityCenter in September 2021 and for discussion of the derecognition of the assets and liabilities of MGP, which included the Operating Partnership’s investment in VICI BREIT Venture, in April 2022.

VICI BREIT Venture distributions.

For the three and six months ended June 30, 2022, the Operating Partnership received $ 8 million and $ 32 million in distributions, respectively.

For the three and six months ended June 30, 2021, the Operating Partnership received $ 32 million and $ 47 million in distributions, respectively.

BetMGM contributions.

For the three months ended March 31, 2022 and 2021, the Company contributed $ 125 million and $ 75 million to BetMGM, respectively.

For the three and six months ended June 30, 2022, the Company contributed $ 25 million and $ 150 million to BetMGM, respectively.

For the three and six months ended June 30, 2021, the Company contributed $ 25 million and $ 100 million to BetMGM, respectively.

NOTE 6 — GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets consisted of the following:

2022 December 31,

(In thousands)

Goodwill $ 4,705,842 $ 3,480,997

Indefinite-lived intangible assets:

Detroit development rights $ 98,098 $ 98,098

MGM Northfield Park and Empire City racing and gaming licenses 280,000 280,000

Trademarks and other 600,443 479,238

Total indefinite-lived intangible assets 978,541 857,336

Finite-lived intangible assets:

MGM Grand Paradise gaming subconcession 4,493,309 4,516,532

Accumulated amortization ( 2,065,163 ) ( 1,865,219 )

2,428,146 2,651,313

MGM National Harbor and MGM Springfield gaming licenses 106,600 106,600

Accumulated amortization ( 29,762 ) ( 26,209 )

76,838 80,391

Other finite-lived intangible assets 159,839 65,207

Accumulated amortization ( 45,237 ) ( 37,862 )

114,602 27,345

Total finite-lived intangible assets, net 2,619,586 2,759,049

Total other intangible assets, net $ 3,598,127 $ 3,616,385

A summary of changes in the Company’s goodwill by reportable segment is as follows for the six months ended June 30, 2022 and twelve months ended December 31, 2021:

Balance at January 1 Acquisitions Reclassifications Currency exchange Balance at June 30

(In thousands)

Goodwill, net by segment:

Las Vegas Strip Resorts $ 1,427,790 $ 1,284,309 $ ( 10,249 ) $ — $ 2,701,850

Regional Operations 701,463 — ( 40,523 ) — 660,940

MGM China 1,351,744 — — ( 8,692 ) 1,343,052

$ 3,480,997 $ 1,284,309 $ ( 50,772 ) $ ( 8,692 ) $ 4,705,842

Balance at January 1 Acquisitions Reclassifications Currency exchange Balance at December 31

(In thousands)

Goodwill, net by segment:

Las Vegas Strip Resorts $ 30,452 $ 1,397,338 $ — $ — $ 1,427,790

Regional Operations 701,463 — — — 701,463

MGM China 1,359,363 — — ( 7,619 ) 1,351,744

$ 2,091,278 $ 1,397,338 $ — $ ( 7,619 ) $ 3,480,997

Goodwill was recognized in 2022 related to the acquisition of the operations of The Cosmopolitan, which is included in Las Vegas Strip Resorts.

Goodwill related to the Mirage and Gold Strike Tunica, which are included in Las Vegas Strip Resorts and Regional Operations, respectively, were reclassified into assets held for sale in 2022 as further discussed in Note 3.

Goodwill was recognized in 2021 related to the acquisition of the 50 % ownership interest in CityCenter, which is included in Las Vegas Strip Resorts.

MGM Grand Paradise gaming subconcession.

As described in Note 1, the enactment of the new Macau gaming law in June 2022 provides for material changes to the legal form of gaming concessions in Macau, including discontinuing and prohibiting gaming subconcessions subsequent to their expiration, and also includes material changes to the rights and obligations provided for under the new gaming concessions to be awarded in the upcoming public tender.

As a result, the Company determined that the existing MGM Grand Paradise gaming subconcession and new gaming concession, if obtained, would be two separate units of account.

Further, as the material changes in the legal and regulatory environment could have an adverse effect on the value of MGM Grand Paradise’s gaming subconcession, the Company concluded that a triggering event had occurred under ASC 360 in June 2022 for the MGM China asset group.

The Company compared the estimated undiscounted cash flows of the asset group to its carrying value and determined that the undiscounted cash flows significantly exceeded the carrying value and therefore, no impairment was indicated.

Additionally, the Company reassessed the useful life of the existing gaming subconcession intangible asset and determined that, given the new gaming law and the resulting changes described above, the useful life would no longer be based on the initial term of the MGM Cotai land concession, which ends in January 2038, and that the useful life should be revised to align with the cessation of the subconcession rights that will occur at the end of the contractual term of the existing gaming subconcession, which ends on December 31, 2022.

Accordingly, amortization of the MGM Grand Paradise gaming subconcession will be recognized on a straight-line basis over its reduced useful life.

NOTE 7 — LONG-TERM DEBT

8 unchanged sentences

5.625 % Operating Partnership senior notes, due 2024

1,050,000 1,050,000

5.375 % MGM China senior notes, due 2024

5 unchanged sentences

4.625 % Operating Partnership senior notes, due 2025

800,000 800,000

5.25 % MGM China senior notes, due 2025

3 unchanged sentences

4.5 % Operating Partnership senior notes, due 2026

500,000 500,000

4.625 % senior notes, due 2026

1 unchanged sentence

5.75 % Operating Partnership senior notes, due 2027

750,000 750,000

5.5 % senior notes, due 2027

3 unchanged sentences

4.5 % Operating Partnership senior notes, due 2028

350,000 350,000

4.75 % senior notes, due 2028

1 unchanged sentence

3.875 % Operating Partnership senior notes, due 2029

750,000 750,000

7 % debentures, due 2036

5 unchanged sentences

Senior secured credit facility.

At March 31, 2022, the Company’s senior secured credit facility consisted of a $ 1.675 billion revolving credit facility of which no amounts were drawn.

At June 30, 2022, the Company’s senior secured credit facility consisted of a $ 1.675 billion revolving credit facility, of which no amounts were drawn.

The Company’s senior secured credit facility contains customary representations and warranties, events of default and positive and negative covenants.

The Company was in compliance with its credit facility covenants at March 31, 2022.

Operating Partnership senior secured credit facility.

At March 31, 2022, the Operating Partnership senior secured credit facility consisted of a $ 1.35 billion revolving credit facility of which no amounts were drawn.

The Operating Partnership was in compliance with its credit facility covenants at March 31, 2022.

The Operating Partnership terminated its interest rate swap agreements in March 2022.

The Company was in compliance with its credit facility covenants at June 30, 2022.

MGM China first revolving credit facility.

At March 31, 2022, the MGM China first revolving credit facility consisted of a $ 1.25 billion unsecured revolving credit facility.

At March 31, 2022, $ 391 million was drawn on the MGM China first revolving credit facility and the weighted average interest rate was 3.02 %.

At June 30, 2022, the MGM China first revolving credit facility consisted of a $ 1.25 billion unsecured revolving credit facility.

At June 30, 2022, $ 1.2 billion was drawn on the MGM China first revolving credit facility and the weighted average interest rate was 3.48 %.

The MGM China first revolving credit facility contains customary representations and warranties, events of default, and positive, negative and financial covenants, including that MGM China maintains compliance with a maximum leverage ratio and a minimum interest coverage ratio.

In February 2022, MGM China further amended its first revolving credit

facility to extend the financial covenant waivers through maturity in May 2024.

MGM China was in compliance with its applicable MGM China first revolving credit facility covenants at March 31, 2022.

In February 2022, MGM China further amended its first revolving credit facility to extend the financial covenant waivers through maturity in May 2024.

MGM China was in compliance with its applicable MGM China first revolving credit facility covenants at June 30, 2022.

MGM China second revolving credit facility.

At March 31, 2022, the MGM China second revolving credit facility consisted of a $ 400 million unsecured revolving credit facility with an option to increase the amount of the facility up to $ 500 million, subject to certain conditions.

Draws will be subject to satisfaction of certain conditions precedent, including evidence that the MGM China first revolving credit facility has been fully drawn.

At March 31, 2022, no amounts were drawn on the MGM China second revolving credit facility.

At June 30, 2022, the MGM China second revolving credit facility consisted of a $ 400 million unsecured revolving credit facility with an option to increase the amount of the facility up to $ 500 million, subject to certain conditions.

Draws will be subject to satisfaction of certain conditions precedent, including

evidence that the MGM China first revolving credit facility has been fully drawn.

At June 30, 2022, no amounts were drawn on the MGM China second revolving credit facility.

The MGM China second revolving credit facility contains customary representations and warranties, events of default, and positive, negative and financial covenants, including that MGM China maintains compliance with a maximum leverage ratio and a minimum interest coverage ratio.

In February 2022, MGM China further amended its second revolving credit facility to extend the financial covenant waivers through maturity in May 2024.

MGM China was in compliance with its applicable MGM China second revolving credit facility covenants at March 31, 2022.

MGM China was in compliance with its applicable MGM China second revolving credit facility covenants at June 30, 2022.

Senior notes.

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In March 2021, MGM China issued $ 750 million in aggregate principal amount of 4.75 % senior notes due 2027 at an issue price of 99.97 %.

Operating Partnership senior secured credit facility and Operating Partnership senior notes.

In April 2022, the Operating Partnership senior secured credit facility and the senior notes of the Operating Partnership were derecognized in connection with the deconsolidation of MGP as a result of the VICI Transaction.

In March 2022, the Operating Partnership terminated its interest rate swap agreements.

Fair value of long-term debt.

The estimated fair value of the Company’s long-term debt was $ 11.7 billion and $ 13.4 billion at March 31, 2022 and December 31, 2021, respectively.

The estimated fair value of the Company’s long-term debt was $ 7.5 billion and $ 13.4 billion at June 30, 2022 and December 31, 2021, respectively.

Fair value was estimated using quoted market prices for the Company’s senior notes and credit facilities.

2 unchanged sentences

The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur.

The Company’s effective income tax rate was a benefit of 51.1 % and 22.0 % on loss before income taxes for the three months ended March 31, 2022 and 2021, respectively.

The Company’s effective income tax rate was a provision of 26.1 % and 25.3 % on income before income taxes for the three and six months ended June 30, 2022, respectively, compared to a provision of 27.8 % on income before income taxes and a benefit of 19.6 % on loss before income taxes for the three and six months ended June 30, 2021.

The Company recognizes deferred income tax assets, net of applicable reserves, related to net operating losses, tax credit carryforwards and certain temporary differences.

1 unchanged sentence

Otherwise, a valuation allowance is applied.

During the three months ended March 31, 2022, the Company reversed $ 13 million of unrecognized tax benefit upon the resolution of a tax accounting method issue related to its customer loyalty program.

During the three and six months ended June 30, 2022, the Company increased its valuation allowance for Macau deferred tax assets by $ 90 million primarily as a result of the reassessment of the useful life of the MGM Grand Paradise gaming subconcession, with a corresponding increase to provision for income taxes, and decreased its state deferred tax liabilities by $ 37 million as a result of the VICI Transaction, with a corresponding decrease to provision for income taxes.

During the six months ended June 30, 2022, the Company reversed $ 13 million of unrecognized tax benefit upon the resolution of a tax accounting method issue related to its customer loyalty program.

NOTE 9 — LEASES

The Company leases the land underlying certain of its properties, real estate, and various equipment under operating and, to a lesser extent, finance lease arrangements.

The MGP master lease, which is further discussed in Note 12, eliminates in consolidation and, accordingly, is not included within the disclosures below.

As of March 31, 2022, the Company, through MGP, was a lessee of land underlying MGM National Harbor and a portion of the land underlying Borgata and Beau Rivage.

MGP was obligated to make lease payments through the non-cancelable term of the ground leases, which is through 2051 for Beau Rivage, through 2070 for Borgata, and through 2082 for MGM National Harbor.

Refer to Note 1 for discussion of the VICI Transaction.

Additionally, MGM Grand Paradise has MGM Macau and MGM Cotai land concession contracts, each with an initial 25-year contract term ending in April 2031 and January 2038, respectively.

The Company leases real estate, land underlying certain of its properties, and various equipment under operating and, to a lesser extent, finance lease arrangements.

Real estate assets and land.

The Company leases the real estate assets of its domestic resorts pursuant to triple-net lease agreements, which are classified as operating leases.

The triple-net structure of the leases requires the Company to pay substantially all costs associated with each property, including real estate taxes, insurance, utilities and routine maintenance (with each lease obligating the Company to spend a specified percentage of net revenues at the properties on capital expenditures), in addition to the annual cash rent.

Each of the leases also obligates the Company to comply with certain financial covenants, which, if not met, would require the Company to maintain cash security or provide one or more letters of credit in favor of the landlord in an amount equal to 6 months or 1 year of rent, as applicable to the circumstances, under the VICI lease, 1 year of rent under the Mandalay Bay and MGM Grand Las Vegas lease, the Aria lease, and The

Cosmopolitan lease, and 2 years of rent under the Bellagio lease.

The Company was in compliance with its applicable covenants under its leases as of June 30, 2022.

Bellagio lease .

The Company leases the real estate assets of Bellagio from the Bellagio BREIT Venture.

The Bellagio lease commenced November 15, 2019 and has an initial term of 30 years with two 10 -year renewal periods, exercisable at the Company’s option, with a fixed 2 % rent escalator for the first 10 years and, thereafter, an escalator equal to the greater of 2 % and the CPI increase during the prior year, subject to a cap of 3 % during the 11th through 20th years and 4 % thereafter.

Annual cash rent payments for the third lease year that commenced on December 1, 2021 increased to $ 255 million as a result of the 2 % fixed annual escalator.

Mandalay Bay and MGM Grand Las Vegas lease .

The Company leases the real estate assets of Mandalay Bay and MGM Grand Las Vegas from VICI BREIT Venture.

The Mandalay Bay and MGM Grand Las Vegas lease commenced February 14, 2020 and has an initial term of 30 years with two 10 -year renewal periods, exercisable at the Company’s option, with a fixed 2 % rent escalator for the first 15 years and, thereafter, an escalator equal to the greater of 2 % and the CPI increase during the prior year, subject to a cap of 3 %.

Annual cash rent payments for the third lease year that commenced on March 1, 2022 increased to $ 304 million as a result of the 2 % fixed annual escalator.

The Company leases the real estate assets of Aria (including Vdara) from funds managed by Blackstone.

The Aria lease commenced September 28, 2021 and has an initial term of 30 years with three 10 -year renewal periods, exercisable at the Company’s option, with a fixed 2 % rent escalator for the first 15 years, and thereafter, an escalator equal to the greater of 2 % and the CPI increase during the prior year, subject to a cap of 3 %.

Annual cash rent payments for the first lease year that commenced on September 28, 2021 was $ 215 million.

The VICI lease and ground subleases.

The Company leases the real estate assets of The Mirage, Luxor, New York-New York, Park MGM, Excalibur, The Park, Gold Strike Tunica, MGM Grand Detroit, Beau Rivage, Borgata, Empire City, MGM National Harbor, MGM Northfield Park, and MGM Springfield from VICI.

The VICI lease commenced April 29, 2022 and has an initial term of 25 years, with three 10 -year renewal periods, exercisable at the Company’s option, with a fixed 2 % rent escalator for the first 10 years, and thereafter, an escalator equal to the greater of 2 % and the CPI increase during the prior year subject to a cap of 3 %.

Additionally, the VICI lease provides VICI with a right of first offer with respect to any further gaming development by the Company on the undeveloped land adjacent to Empire City, which VICI may exercise should the Company elect to sell the property.

Annual cash rent payments for the first lease year that commenced on April 29, 2022 was $ 860 million.

The Company is required to pay the rent payments under the ground leases of the Borgata, Beau Rivage, and National Harbor through the term of the VICI lease.

The ground subleases of Beau Rivage and National Harbor are classified as operating leases and the ground sublease of Borgata is classified as a finance lease.

The Cosmopolitan lease.

The Company leases the real estate assets of The Cosmopolitan from a subsidiary of BREIT.

The Cosmopolitan lease commenced May 17, 2022 and has an initial term of 30 years with three 10 -year renewal periods, exercisable at the Company’s option, with a fixed 2 % rent escalator for the first 15 years, and thereafter, an escalator equal to the greater of 2 % and the CPI increase during the prior year, subject to a cap of 3 %.

Annual cash rent payments for the first lease year that commenced on May 17, 2022 was $ 200 million.

MGM China land concessions .

MGM Grand Paradise has MGM Macau and MGM Cotai land concession contracts with the government of Macau, each with an initial 25 -year contract term ending in April 2031 and January 2038, respectively, with a right to renew for further consecutive periods of 10 years, at MGM Grand Paradise’s option.

The land leases are classified as operating leases.

Real estate assets.

The Company leases the real estate assets of Bellagio, Mandalay Bay, MGM Grand Las Vegas, and Aria (including Vdara) pursuant to triple-net lease agreements, which are classified as operating leases.

Each of the leases obligates the Company to spend a specified percentage of net revenues at the properties on capital expenditures and that the Company comply with certain financial covenants, which, if not met, would require the Company to maintain cash security or provide one or more letters of credit in favor of the landlord in an amount equal to 1 year of rent under the Mandalay Bay and MGM Grand Las Vegas lease and Aria lease and 2 years of rent under the Bellagio lease.

The Company was in compliance with its applicable covenants under its leases as of March 31, 2022.

Other information.

Components of lease costs and other information related to the Company’s leases was:

Components of lease costs and other information related to the Company’s leases are:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(In thousands)

6 unchanged sentences

Total finance lease costs $ 21,304 $ 17,276 $ 42,354 $ 34,434

(1) The Bellagio lease and the Mandalay Bay and MGM Grand Las Vegas lease are held with related parties, as further discussed in Note 12.

Operating lease cost includes $ 83 million for each of the three months ended March 31, 2022 and 2021 related to the Bellagio lease.

Operating lease cost includes $ 99 million for each of the three months ended March 31, 2022 and 2021 related to the Mandalay Bay and MGM Grand Las Vegas lease.

(2) For the three months ended March 31, 2021, interest expense includes the effect of COVID-19 related rent concessions which was recognized as negative variable rent expense.

(1) The Bellagio lease is held with a related party, as further discussed in Note 14.

Operating lease cost includes $ 83 million for each of the three months ended June 30, 2022 and 2021 and $ 166 million for each of the six months ended June 30, 2022 and 2021 related to the Bellagio lease.

(2) For the three and six months ended June 30, 2021, interest expense includes the effect of COVID-19 related rent concessions which was recognized as negative variable rent expense.

2022 December 31,

18 unchanged sentences

Finance leases 5 3

(1) As of March 31, 2022 and December 31, 2021, operating lease right-of-use assets, net included $ 3.6 billion related to the Bellagio lease for each of the respective periods, and $ 3.9 billion and $ 4.0 billion related to the Mandalay Bay and MGM Grand Las Vegas lease, respectively.

(2) As of March 31, 2022 and December 31, 2021, operating lease liabilities – long-term included $ 3.8 billion related to the Bellagio lease for each of the respective periods, and $ 4.2 billion related to the Mandalay Bay and MGM Grand Las Vegas lease for each of the respective periods.

Three Months Ended

(1) As of June 30, 2022 and December 31, 2021, operating lease right-of-use assets, net included $ 3.6 billion related to the Bellagio lease.

(2) As of June 30, 2022 and December 31, 2021, operating lease liabilities – long-term included $ 3.8 billion related to the Bellagio lease.

Six Months Ended

Cash paid for amounts included in the measurement of lease liabilities (In thousands)

10 unchanged sentences

Year ending December 31, (In thousands)

2022 (excluding the three months ended March 31, 2022) $ 628,471 $ 66,982

2022 (excluding the six months ended June 30, 2022) $ 882,530 $ 44,610

2023 1,792,609 72,205

14 unchanged sentences

The Company’s senior credit facility limits the amount of letters of credit that can be issued to $ 1.35 billion.

At March 31, 2022, $ 33 million in letters of credit were outstanding under the Company’s senior credit facility.

The Operating Partnership’s senior credit facility limited the amount of letters of credit that can be issued to $ 75 million.

No letters of credit were outstanding under the Operating Partnership’s senior credit facility at March 31, 2022.

The amount of available borrowings under each of the credit facilities is reduced by any outstanding letters of credit.

At June 30, 2022, $ 33 million in letters of credit were outstanding under the Company’s senior credit facility.

The amount of available borrowings under the credit facility is reduced by any outstanding letters of credit.

MGM China bank guarantee.

In connection with the extension of the expiration of the gaming subconcession to June 2022, MGM Grand Paradise provided a bank guarantee to the government of Macau in May 2019 to warrant the fulfillment of an existing commitment of labor liabilities upon expiration of the gaming subconcession.

The amount of the bank guarantee was approximately $ 102 million as of March 31, 2022 when giving effect to foreign currency exchange rate fluctuations.

MGM Grand Paradise committed to provide for a guarantee in connection with its request for the extension of the gaming subconcession to December 2022.

In May 2019, in connection with the extension of the term of its gaming subconcession to June 2022, MGM Grand Paradise provided a bank guarantee to the government of Macau in the amount of MOP 820 million (approximately $ 101 million as of June 30, 2022) to warrant the fulfillment of an existing commitment of labor liabilities upon expiration of the gaming subconcession.

In connection with the June 2022 extension of the term of its gaming subconcession to December 31, 2022, MGM Grand Paradise is required to provide, within three months of the execution of such extension, a bank guarantee to the government of Macau in the amount of not less than MOP 880 million (approximately $ 109 million as of June 30, 2022), which would replace or increase the bank guarantee provided under the previous extension.

As of June 30, 2022, the MOP 820 million guarantee was in place and the MOP 880 million guarantee was not yet provided.

Bellagio BREIT Venture shortfall guarantee.

The Company provides a shortfall guarantee of the $ 3.01 billion principal amount of indebtedness (and any interest accrued and unpaid thereon) of Bellagio BREIT Venture, which matures in 2029.

The Company provides a shortfall guarantee of the $ 3.01 billion principal amount of indebtedness (and any interest accrued and unpaid thereon) of Bellagio BREIT Venture, which matures

The terms of the shortfall guarantee provide that after the lenders have exhausted certain remedies to collect on the obligations under the indebtedness, the Company would then be responsible for any shortfall between the value of the collateral, which is the real estate assets of Bellagio owned by Bellagio BREIT Venture, and the debt obligation.

1 unchanged sentence

such value is immaterial.

MGP BREIT Venture shortfall guarantee.

The Company provides a shortfall guarantee of the $ 3.0 billion principal amount of indebtedness (and any interest accrued and unpaid thereon) of MGP BREIT Venture, which has an initial term of 12 years , maturing in 2032, with an anticipated repayment date of March 2030.

The terms of the shortfall guarantee provide that after the lenders have exhausted certain remedies to collect on the obligations under the indebtedness, the Company would then be responsible for any shortfall between the value of the collateral, which is the real estate assets of Mandalay Bay and MGM Grand Las Vegas, owned by MGP BREIT Venture, and the debt obligation.

VICI BREIT Venture shortfall guarantee.

The Company provides a shortfall guarantee of the $ 3.0 billion principal amount of indebtedness (and any interest accrued and unpaid thereon) of VICI BREIT Venture, which has an initial term of 12 years , maturing in 2032, with an anticipated repayment date of March 2030.

The terms of the shortfall guarantee provide that after the lenders have exhausted certain remedies to collect on the obligations under the indebtedness, the Company would then be responsible for any shortfall between the value of the collateral, which is the real estate assets of Mandalay Bay and MGM Grand Las Vegas, owned by VICI BREIT Venture, and the debt obligation.

This guarantee is accounted for under ASC 460 at fair value;

such value is immaterial.

MGP BREIT Venture bad acts guarantee.

The Operating Partnership provides a guarantee for the losses incurred by the lenders of the indebtedness of MGP BREIT Venture arising out of certain bad acts by the Operating Partnership, its venture partner, or the venture, such as fraud or willful misconduct, based on the party’s percentage ownership of MGP

BREIT Venture.

This guarantee is capped at 10 % of the principal amount outstanding at the time of the loss.

The Operating Partnership and its venture partner have separately indemnified each other for the other party’s share of the overall liability exposure, if at fault.

The guarantee is accounted for under ASC 460 at fair value;

such value is immaterial.

NOTE 11 — INCOME PER SHARE OF COMMON STOCK

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(In thousands)

Net loss attributable to MGM Resorts International $ ( 18,016 ) $ ( 331,829 )

Net income (loss) attributable to MGM Resorts International $ 1,783,937 $ 104,753 $ 1,765,921 $ ( 227,076 )

Adjustment related to redeemable noncontrolling interests ( 12,412 ) ( 37,011 ) ( 21,397 ) ( 46,439 )

Net loss attributable to common stockholders - basic and diluted $ ( 27,002 ) $ ( 341,257 )

Net income (loss) attributable to common stockholders – basic and diluted $ 1,771,525 $ 67,742 $ 1,744,524 $ ( 273,515 )

Weighted-average common shares outstanding – basic 417,393 489,459 430,084 491,785

3 unchanged sentences

NOTE 12 — STOCKHOLDERS’ EQUITY

Other equity activity

MGM Resorts International dividends.

On May 2, 2022 the Company’s Board of Directors approved a quarterly dividend of $ 0.0025 per share that will be payable on June 15, 2022 to holders of record on June 10, 2022.

On August 3, 2022 the Company’s Board of Directors approved a quarterly dividend of $ 0.0025 per share that will be payable on September 15, 2022 to holders of record on September 9, 2022.

MGM Resorts International stock repurchase program.

3 unchanged sentences

The timing, volume and nature of stock repurchases will be at the sole discretion of management, dependent on market conditions, applicable securities laws, and other factors, and may be suspended or discontinued at any time.

During the three months ended March 31, 2021, the Company repurchased approximately 3 million shares of its common stock at an average price of $ 37.87 per share for an aggregate amount of $ 119 million.

Repurchased shares were retired.

During the three months ended March 31, 2022, the Company repurchased approximately 23 million shares of its common stock at an average price of $ 42.92 per share for an aggregate amount of $ 1.0 billion, which included the February 2022 repurchase of 4.5 million shares at a price of $ 45.00 per share for an aggregate amount of $ 202.5 million from funds managed by Corvex Management LP, a related party.

During the three months ended June 30, 2021, the Company repurchased approximately 6 million shares of its common stock at an average price of $ 39.48 per share for an aggregate amount of $ 220 million.

During the six months ended June 30, 2021, the Company repurchased approximately 9 million shares of its common stock at an average price of $ 38.90 per share for an aggregate amount of $ 340 million.

Repurchased shares were retired.

The remaining availability under the February 2020 $ 3.0 billion stock repurchase program was $ 248 million as of March 31, 2022 and the remaining availability under the March 2022 $ 2.0 billion stock repurchase program was $ 2.0 billion as of March 31, 2022.

Subsequent to the quarter ended March 31, 2022, the Company repurchased 7 million shares of its common stock at an average price of $ 41.08 per share for an aggregate amount of $ 269 million.

During the three months ended June 30, 2022, the Company repurchased approximately 32 million shares of its common stock at an average price of $ 34.42 per share for an aggregate amount of $ 1.1 billion.

During the six months ended June 30, 2022, the Company repurchased approximately 56 million shares of its common stock at an average price of $ 37.98 per share for an aggregate amount of $ 2.1 billion, which included the February 2022 repurchase of 4.5 million shares at a price of $ 45.00 per share for an aggregate amount of $ 202.5 million from funds managed by Corvex Management LP, a related party.

In connection with these repurchases, the February 2020 $ 3.0 billion stock repurchase program was completed.

Repurchased shares were retired.

The remaining availability under the March 2022 $ 2.0 billion stock repurchase program was $ 1.1 billion as of June 30, 2022.

Subsequent to the quarter ended June 30, 2022, the Company repurchased 5 million shares of its common stock at an average price of $ 29.32 per share for an aggregate amount of $ 156 million.

Repurchased shares were retired.

Accumulated other comprehensive loss.

2 unchanged sentences

(In thousands)

Balances, April 1, 2022 $ ( 11,091 ) $ ( 28,841 ) $ 17,925 $ ( 22,007 )

Other comprehensive loss before reclassifications ( 9,828 ) — — ( 9,828 )

Amounts reclassified from accumulated other comprehensive loss to interest expense — 1,661 — 1,661

Other comprehensive income (loss), net of tax ( 9,828 ) 1,661 — ( 8,167 )

Other changes in accumulated other comprehensive loss:

Deconsolidation of MGP — 28,151 ( 17,067 ) 11,084

Changes in accumulated other comprehensive loss ( 9,828 ) 29,812 ( 17,067 ) 2,917

Other comprehensive loss (income) attributable to noncontrolling interest 3,119 ( 971 ) — 2,148

Balances, June 30, 2022 $ ( 17,800 ) $ — $ 858 $ ( 16,942 )

Balances, January 1, 2022 $ ( 907 ) $ ( 41,634 ) $ 17,925 $ ( 24,616 )

2 unchanged sentences

Other comprehensive income (loss), net of tax ( 27,794 ) 37,692 — 9,898

Other changes in accumulated other comprehensive loss:

Deconsolidation of MGP — 28,151 ( 17,067 ) 11,084

Changes in accumulated other comprehensive loss ( 27,794 ) 65,843 ( 17,067 ) 20,982

Other comprehensive loss (income) attributable to noncontrolling interest 10,901 ( 24,209 ) — ( 13,308 )

Balances, March 31, 2022 $ ( 11,091 ) $ ( 28,841 ) $ 17,925 $ ( 22,007 )

Balances, June 30, 2022 $ ( 17,800 ) $ — $ 858 $ ( 16,942 )

NOTE 13 — SEGMENT INFORMATION

5 unchanged sentences

Las Vegas Strip Resorts consists of the following casino resorts:

Aria (including Vdara) (upon acquisition in September 2021), Bellagio, MGM Grand Las Vegas (including The Signature), Mandalay Bay (including Delano and Four Seasons), The Mirage, Luxor, New York-New York (including The Park), Excalibur, and Park MGM (including NoMad Las Vegas).

Aria (including Vdara) (upon acquisition in September 2021), Bellagio, The Cosmopolitan (upon acquisition in May 2022), MGM Grand Las Vegas (including The Signature), Mandalay Bay (including Delano and Four Seasons), The Mirage, Luxor, New York-New York (including The Park), Excalibur, and Park MGM (including NoMad Las Vegas).

Regional Operations.

12 unchanged sentences

Adjusted Property EBITDAR is the Company’s reportable segment GAAP measure, which management utilizes as the primary profit measure for its reportable segments and underlying operating segments.

Adjusted Property EBITDAR is a measure defined as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening and start-up expenses, rent expense associated with triple-net operating and ground leases, income from unconsolidated affiliates related to investments in real estate ventures, property transactions, net, and excludes corporate expense and stock compensation expense, which are not allocated to each operating segment, and rent expense related to the master lease with MGP that eliminates in consolidation.

Adjusted Property EBITDAR is a measure defined as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening and start-up expenses, property transactions, net, gain on REIT transactions, net, rent expense associated with triple-net operating and ground leases, income from unconsolidated affiliates related to investments in real estate ventures, and excludes corporate expense and stock compensation expense, which are not allocated to each operating segment, and rent expense related to the master lease with MGP that eliminated in consolidation.

The following tables present the Company’s segment information:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(In thousands)

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Depreciation and amortization ( 366,255 ) ( 283,625 ) ( 654,893 ) ( 574,176 )

Gain on REIT transactions, net 2,277,747 — 2,277,747 —

Triple-net operating lease and ground lease rent expense ( 483,454 ) ( 189,609 ) ( 745,906 ) ( 379,229 )

Gain related to sale of Harmon land - unconsolidated affiliate — 49,755 — 49,755

Income from unconsolidated affiliates related to real estate ventures 14,826 41,666 56,472 83,338

Operating income (loss) 105,788 ( 246,690 )

Operating income 2,381,451 263,760 2,487,239 17,070

Non-operating income (expense)

3 unchanged sentences

( 185,987 ) ( 138,630 ) ( 362,909 ) ( 322,576 )

Loss before income taxes ( 71,134 ) ( 430,636 )

Benefit for income taxes 36,341 94,698

Net loss ( 34,793 ) ( 335,938 )

Income (loss) before income taxes 2,195,464 125,130 2,124,330 ( 305,506 )

Benefit (provision) for income taxes ( 572,839 ) ( 34,826 ) ( 536,498 ) 59,872

Net income (loss) 1,622,625 90,304 1,587,832 ( 245,634 )

Net loss attributable to noncontrolling interests 161,312 14,449 178,089 18,558

Net loss attributable to MGM Resorts International $ ( 18,016 ) $ ( 331,829 )

Net income (loss) attributable to MGM Resorts International $ 1,783,937 $ 104,753 $ 1,765,921 $ ( 227,076 )

NOTE 14 — RELATED PARTY TRANSACTIONS

As further described in Note 1, prior to the closing of the VICI Transaction, the Company leased the real estate assets of The Mirage, Luxor, New York-New York, Park MGM, Excalibur, The Park, Gold Strike Tunica, MGM Grand Detroit, Beau Rivage, Borgata, Empire City, MGM National Harbor, MGM Northfield Park, and MGM Springfield pursuant to a master lease with MGP.

The annual cash rent payments under the MGP master lease for the seventh lease year, which commenced on April 1, 2022, increased to $ 877 million from $ 873 million, due to the sixth 2 % annual base rent escalator that went into effect on April 1, 2022, as the tenant and operating subsidiary sublessee, collectively, met the adjusted net revenue to rent ratio on which such escalator was contingent, which increased annual cash rent by $ 16 million, partially offset by the percentage rent reset that went into effect on April 1, 2022, calculated based on the percentage of average actual annual net revenue of the leased properties during the preceding five year period, which decreased annual cash rent by $ 12 million.

In October 2021, MGP acquired the real estate assets of MGM Springfield from the Company and MGM Springfield was added to the master lease between the Company and MGP.

Final regulatory approvals, which were not necessary for the transaction to close, are expected to be received within nine to twelve months following the close of the transaction.

Until final regulatory approvals are obtained, the parties will be subject to a trust agreement, which provides for the property to go into a trust (or, at the Company’s option, be returned to the Company) during the interim period in the event that the regulator finds reasonable cause to believe that MGP may not be found suitable.

The property will then remain in trust until a final determination regarding MGP’s suitability is made.

All intercompany transactions, including transactions under the MGP master lease, have been eliminated in the Company’s consolidation of MGP.

The public ownership of MGP’s Class A shares is recognized as noncontrolling interests in the Company’s consolidated financial statements.

As further described in Note 1, in April 2022, the Company completed a series of transactions with VICI and MGP whereby VICI acquired MGP in a stock-for-stock transaction.

As part of the transaction, the Company entered into an amended and restated master lease with VICI.

All intercompany transactions, including transactions under the MGP master lease, were eliminated in the Company’s consolidation of MGP.

The public ownership of MGP’s Class A shares was recognized as noncontrolling interests in the Company’s consolidated financial statements.

In April 2022, the Company completed the VICI Transaction, which resulted in the deconsolidation of MGP, including its investment in the VICI BREIT Venture.

Refer to Note 3 for additional information on the VICI Transaction.

As part of the transactions, the Company entered into an amended and restated master lease with VICI.

Refer to Note 9 for further discussion on the master lease with VICI.

Bellagio BREIT Venture

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Refer to Note 9 for further information related to the Bellagio lease.

MGP BREIT Venture

MGP has a 50.1 % ownership interest in MGP BREIT Venture, which owns the real estate assets of Mandalay Bay and MGM Grand Las Vegas and leases such assets to a subsidiary of the Company pursuant to a lease agreement.

Refer to Note 7 for further information related to the Mandalay Bay and MGM Grand Las Vegas lease.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements