What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-03 compared with 2022-05-02 · 231 added, 136 removed, 293 unchanged (56% of the section changed)

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MGM Resorts International together with its subsidiaries may be referred to as “we,” “us” or “our.” MGM China Holdings Limited together with its subsidiaries is referred to as “MGM China.” MGM Growth Properties LLC together with its subsidiaries is referred to as “MGP.”

Description of our business and key performance indicators

Description of our business

Our primary business is the operation of casino resorts, which offer gaming, hotel, convention, dining, entertainment, retail and other resort amenities.

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We make significant investments in our resorts through newly remodeled hotel rooms, restaurants, entertainment and nightlife offerings, as well as other new features and amenities.

Financial Impact of COVID-19

The spread of COVID-19 and developments surrounding the global pandemic have had a significant impact on our 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 our properties were open and not subject to operating restrictions;

Impact of COVID-19 - Update

As of June 30, 2022, all of our 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 our 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, we 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 our properties as a result of the pandemic.

In Macau, our 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 our 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.

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

Our 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 our 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 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.

Other Developments

In April 2022, we completed a series of transactions with VICI Properties, Inc.

("VICI") and MGP whereby VICI acquired MGP.

MGP Class A shareholders received 1.366 shares of newly issued VICI stock in exchange for each MGP Class A share outstanding and we received 1.366 units of the new VICI operating partnership (“VICI OP”) in exchange for each Operating Partnership unit previously held by us.

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 our VICI OP units for cash consideration of $4.4 billion, with us retaining an approximate 1% ownership interest in VICI OP with a fair value of approximately $375 million.

In April 2022, we completed the VICI Transaction in a stock-for-stock transaction.

In connection with the transaction, VICI OP redeemed the majority of our VICI OP units for cash consideration of $4.4 billion, with us retaining an approximate 1% ownership interest in VICI OP.

MGP’s Class B share that was previously held by us was cancelled.

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

As part of the transactions, we 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 us to pay substantially all costs associated with each property, including real estate taxes, insurance, utilities and routine maintenance, in addition to the rent.

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

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

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

See Note 3 and Note 9 in the accompanying consolidated financial statements for discussion of the transaction and lease, respectively.

In May 2022, we acquired 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.

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

See Note 3 and Note 9 in the accompanying consolidated financial statements for discussion of the transaction and lease, respectively.

In June 2022, the Macau government enacted a new gaming law that 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, such as limiting the term of concessions to a maximum of 10 years.

As a result, we reassessed the useful life of the MGM Grand Paradise gaming subconcession intangible asset and reduced the useful life to align with the contractual term of the subconcession, which expires on December 31, 2022, thereby accelerating the recognition of amortization within our statements of operations.

See Note 1 and Note 6 in the accompanying consolidated financial statements for further discussion.

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.

For a description of certain risks applicable to MGM Grand Paradise’s subconcession and related matters, refer to our Annual Report on Form 10-K for the year ended December 31, 2021 under the heading “Risk Factors– Risks Related to Our Macau Operations.”

Pending Transactions

On December 13, 2021, we 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 us and VICI will be amended and restated to reflect a $90 million reduction in annual cash rent.

See Note 3 in the accompanying consolidated financial statements for discussion of the transaction.

On May 2, 2022, we commenced a public offer to the shareholders of 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).

See Note 1 in the accompanying consolidated financial statements for discussion of the transaction.

During the three months ended June 30, 2022, we acquired equity interests in LeoVegas through the purchase of shares in the open market.

On June 9, 2022, we 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 us and VICI will be amended and restated to reflect a $40 million reduction in annual cash rent.

See Note 3 in the accompanying consolidated financial statements for discussion of the transaction.

Key Performance Indicators

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“win” or “hold” percentage, which is not fully controllable by us.

Our normal table games hold percentage at our Las Vegas Strip Resorts is in the range of 25.0% to 35.0% of table games drop for Baccarat and 19.0% to 23.0% for non-Baccarat however, reduced gaming volumes as a result of the COVID-19 pandemic could cause volatility in our hold percentages;

Our normal table games hold percentage at our Las Vegas Strip Resorts is in the range of 25.0% to 35.0% of table games drop for Baccarat and 19.0% to 23.0% for non-Baccarat however, reduced gaming volumes as a result of the pandemic could cause volatility in our hold percentages;

• Hotel revenue indicators (for Las Vegas Strip Resorts) – hotel occupancy (a volume indicator);

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Because the mix of rooms provided on a complimentary basis, particularly to casino customers, includes a disproportionate suite component, the composite ADR including complimentary rooms is slightly higher than the ADR for cash rooms, reflecting the higher retail value of suites.

Rooms that were out of service during the three months ended March 31, 2021 as a result of property closures due to the COVID-19 pandemic were excluded from the available room count when calculating hotel occupancy and REVPAR.

Rooms that were out of service during the six months ended June 30, 2021 as a result of property closures due to the pandemic were excluded from the available room count when calculating hotel occupancy and REVPAR.

Additional key performance indicators at MGM China are:

• Gaming revenue indicators - MGM China utilizes “turnover,” which is the sum of nonnegotiable chip wagers won by MGM China calculated as nonnegotiable chips purchased plus nonnegotiable chips exchanged less nonnegotiable chips returned.

nonnegotiable chips returned.

Turnover provides a basis for measuring VIP casino win percentage.

Win for VIP gaming operations at MGM China is typically in the range of 2.6% to 3.3% of turnover however, reduced gaming volumes as a result of the COVID-19 pandemic could cause volatility in MGM China’s hold percentages.

Win for VIP gaming operations at MGM China is typically in the range of 2.6% to 3.3% of turnover however, reduced gaming volumes as a result of the pandemic could cause volatility in MGM China’s hold percentages.

Results of Operations

Summary Operating Results

Certain of our properties or portions thereof were temporarily closed due to COVID-19 during the first quarter of 2021 as follows:

Certain of our properties or portions thereof were temporarily closed due to COVID-19 during the comparative periods in 2021 as follows:

• Park MGM and Mandalay Bay’s hotel tower operations were closed midweek and full week hotel operations resumed March 3, 2021.

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• MGM Grand Detroit’s hotel tower operations were closed and resumed on February 9, 2021.

The following table summarizes our consolidated financial results for the three months ended March 31, 2022 and 2021:

The following table summarizes our consolidated operating results:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(In thousands)

Net revenues $ 3,264,888 $ 2,267,962 $ 6,119,197 $ 3,915,709

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

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

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

Consolidated net revenues were $2.9 billion for the three months ended March 31, 2022 compared to $1.6 billion in the prior year quarter, an increase of 73%.

The current quarter benefited from the inclusion of the net revenues of Aria, subsequent to consolidation in September 2021 and was negatively affected by a decrease in business volume and travel due to the spread of the omicron variant in the early part of the quarter, however results improved over the prior year quarter which was negatively affected by midweek property and hotel closures, lower business volume and travel activity, and operational restrictions due to the COVID-19 pandemic primarily at its Las Vegas Strip Resorts.

At MGM China, the current and prior year quarter were significantly impacted by travel and entry restrictions in Macau with the current quarter being negatively affected by increased restrictions related to the spread of the omicron variant.

As a result, net revenues at our Las Vegas Strip Resorts increased 205%, Regional Operations increased 25%, and MGM China decreased 9%.

Consolidated operating income was $106 million for the three months ended March 31, 2022 compared to a loss of $247 million in the prior year quarter.

The change was primarily driven by the inclusion of Aria in the current quarter and the temporary property and hotel closures, lower business volumes and travel activity, and ongoing operational restrictions related to the pandemic in the prior year quarter, as discussed above, partially offset by an increase in rent expense recorded within general and administrative expense for the Aria lease, which commenced in September 2021, and in property transactions, net.

Property transactions, net increased $29 million compared to the prior year quarter.

The current quarter included a $31 million non-cash impairment charge related to land and a $25 million loss related to an increase in the estimate of contingent consideration related to the Empire City acquisition.

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

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

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

Consolidated net revenues were $3.3 billion for the three months ended June 30, 2022 compared to $2.3 billion in the prior year quarter, an increase of 44%.

The current quarter benefited from the inclusion of the net revenues of Aria and The Cosmopolitan as well as from comparative increases in business volume and travel activity at our domestic resorts.

At MGM China, the current and prior year quarters were significantly impacted by travel and entry restrictions in Macau with the current quarter being more negatively affected by restrictions related to the increased spread of COVID-19.

As a result, net revenues at our Las Vegas Strip Resorts increased 113%, Regional Operations increased 12%, and MGM China decreased 54% compared to the prior year quarter.

Consolidated operating income was $2.4 billion for the three months ended June 30, 2022 compared to $264 million in the prior year quarter.

The current quarter benefited from a $2.3 billion gain related to the VICI Transaction and the increase in net revenues, as discussed above, partially offset by an increase in rent expense recorded within general and administrative expense for the Aria, VICI, and The Cosmopolitan leases, which commenced in September 2021, April 2022, and May 2022, respectively, an increase in depreciation and amortization expense, and a decrease in income from unconsolidated affiliates.

Depreciation and amortization expense increased $83 million compared to the prior year quarter, due primarily to the change in useful life of the MGM Grand Paradise gaming subconcession and the acquisition of Aria and The Cosmopolitan, partially offset by a decrease resulting from the deconsolidation of MGP in April 2022.

Additionally, property transactions, net included a gain of $25 million in the current year quarter and a gain of $29 million in the prior year quarter, each related to a reduction in the estimate of contingent consideration related to the Empire City acquisition.

Consolidated net revenues were $6.1 billion for the six months ended June 30, 2022 compared to $3.9 billion in the prior year period, an increase of 56%.

The current year period benefited from the inclusion of Aria and The Cosmopolitan, and was initially negatively affected by a decrease in business volume and travel due to the spread of the omicron variant in the early part of the first quarter of the current year period, however, business volumes subsequently improved at our domestic resorts with a significant increase over the prior year period, which was negatively affected by midweek property and hotel closures, lower travel activity, and operational restrictions due to the pandemic.

At MGM China, the current and prior year period were significantly impacted by travel and entry restrictions in Macau with the current year period being

more negatively affected by restrictions related to the increasing spread of COVID-19.

As a result, net revenues at our Las Vegas Strip Resorts increased 145%, Regional Operations increased 18%, and MGM China decreased 32% compared to the prior year period.

Consolidated operating income was $2.5 billion for the six months ended June 30, 2022 compared to $17 million in the prior year period.

The current year period benefited from a $2.3 billion gain related to the VICI Transaction and the increase in net revenues, as discussed above, partially offset by an increase in rent expense recorded within general and administrative expense for the Aria, VICI, and The Cosmopolitan leases, which commenced in September 2021, April 2022, and May 2022, respectively, an increase in depreciation and amortization expense, and a decrease in income from unconsolidated affiliates.

Depreciation and amortization expense increased $81 million compared to the prior year period, due primarily to the change in useful life of the MGM Grand Paradise gaming subconcession and the acquisition of Aria and The Cosmopolitan, partially offset by a decrease resulting from the deconsolidation of MGP in April 2022.

Additionally, property transactions, net increased $38 million compared to the prior year period primarily related to a $31 million non-cash impairment charge related to land.

Net Revenues by Segment

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Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(In thousands)

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Las Vegas Strip Resorts

Las Vegas Strip Resorts casino revenue was $475 million for the three months ended March 31, 2022 compared to $232 million in the prior year quarter, an increase of 105%.

The current quarter benefited from the inclusion of Aria and was negatively affected by a decrease in business volume and travel due to the spread of the omicron variant in the early part of the quarter, however the prior year quarter was negatively affected by midweek property and hotel closures at certain properties, lower business volume and travel activity, and operational restrictions due to the pandemic.

Las Vegas Strip Resorts casino revenue was $499 million for the three months ended June 30, 2022 compared to $353 million in the prior year quarter, an increase of 41%, due primarily to the inclusion of Aria and The Cosmopolitan, and increases in business volume and travel activity in the current year quarter.

Las Vegas Strip Resorts casino revenue was $974 million for the six months ended June 30, 2022 compared to $586 million in the prior year period, an increase of 66%, due primarily to the inclusion of Aria and The Cosmopolitan and was

negatively affected by a decrease in business volume and travel due to the spread of the omicron variant in the early part of the current year period;

however, business volumes subsequently improved with a significant increase over the prior year period, which was negatively affected by midweek property and hotel closures, lower travel activity, and operational restrictions due to the pandemic.

The following table shows key gaming statistics for our Las Vegas Strip Resorts:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(Dollars in millions)

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Slots Win % 9.3 % 9.6 % 9.3 % 9.5 %

Las Vegas Strip Resorts rooms revenue was $485 million for the three months ended March 31, 2022 compared to $144 million in the prior year quarter, an increase of 236%.

The current quarter benefited from the inclusion of Aria and was negatively affected by the omicron variant in the early part of the quarter, discussed above.

REVPAR increased due to the prior year quarter being negatively impacted by lower business volume and travel activity and operational restrictions related to the pandemic.

Las Vegas Strip Resorts rooms revenue was $696 million for the three months ended June 30, 2022 compared to $299 million in the prior year quarter, an increase of 133%.

The current year quarter benefited from the inclusion of Aria and The Cosmopolitan and an increase in REVPAR due to an increase in occupancy and ADR as a result of an increase in business volume and travel activity in the current year quarter.

Las Vegas Strip Resorts rooms revenue was $1.2 billion for the six months ended June 30, 2022 compared to $443 million in the prior year period, an increase of 167%.

The current year period benefited from the inclusion of Aria and The Cosmopolitan and although operations were initially negatively affected by the omicron variant in the early part of the period, REVPAR increased due to an increase in occupancy and ADR as business volume and travel activity improved in the current year period.

The following table shows key hotel statistics for our Las Vegas Strip Resorts:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Occupancy (1)

92 % 77 % 85 % 62 %

Average daily rate (ADR) $ 225 $ 149 $ 213 $ 142

Revenue per available room (REVPAR) (1)

(1) Rooms that were out of service, including midweek closures, during the three months ended March 31, 2021 due to the COVID-19 pandemic were excluded from the available room count when calculating hotel occupancy and REVPAR.

Las Vegas Strip Resorts food and beverage revenue was $384 million for the three months ended March 31, 2022 compared to $90 million in the prior year quarter, an increase of 325%, and Las Vegas Strip Resorts entertainment, retail and other revenues was $318 million for the three months ended March 31, 2022 compared to $78 million in the prior year quarter, an increase of 307%, due primarily to the inclusion of Aria and was negatively affected by the omicron variant in the early part of the quarter, discussed above, while the prior year quarter was negatively impacted by temporary midweek property and hotel tower closures at certain properties, lower business volume and travel activity, and operational restrictions related to the pandemic.

$ 208 $ 115 $ 182 $ 88

(1) Rooms that were out of service, including midweek closures, during the six months ended June 30, 2021 due to the COVID-19 pandemic were excluded from the available room count when calculating hotel occupancy and REVPAR.

Las Vegas Strip Resorts food and beverage revenue was $561 million for the three months ended June 30, 2022 compared to $216 million in the prior year quarter, an increase of 160%, and Las Vegas Strip Resorts entertainment, retail and other revenues were $382 million for the three months ended June 30, 2022 compared to $137 million in the prior year quarter, an increase of 179%, due primarily to the inclusion of Aria and The Cosmopolitan and an increase in business volume and travel activity in the current year quarter.

Las Vegas Strip Resorts food and beverage revenue was $945 million for the six months ended June 30, 2022 compared to $306 million in the prior year period, an increase of 209%, and Las Vegas Strip Resorts entertainment, retail and other revenues were $700 million for the six months ended June 30, 2022 compared to $215 million in the prior year period, an increase of 226%, due primarily to the inclusion of Aria and The Cosmopolitan and was initially negatively affected by the omicron variant in the early part of the period;

however, business volume and travel activity subsequently improved with a significant increase over the prior year period which was negatively impacted by temporary midweek property and hotel tower closures at certain properties, lower business and travel activity, and operational restrictions related to the pandemic.

Regional Operations

Regional Operations casino revenue was $704 million for the three months ended March 31, 2022 compared to $597 million in the prior year quarter, an increase of 18%, due primarily to table game win increasing 25% over the prior year quarter and slots win increasing 21% over the prior year quarter, respectively, as the prior year quarter was negatively affected by midweek hotel closures at certain properties and operational restrictions related to the pandemic.

Regional Operations casino revenue was $734 million for the three months ended June 30, 2022 compared to $708 million in the prior year quarter, an increase of 4%, due primarily to table game win increasing 12% over the prior year quarter and slots win increasing 8% over the prior year quarter.

Regional Operations casino revenue was $1.4 billion for the six months ended June 30, 2022 compared to $1.3 billion in the prior year period, an increase of 10%, due primarily to table game win increasing 18% over the prior year period and slots win increasing 14% over the prior year period, respectively, as the prior year period was negatively affected by midweek hotel closures at certain properties and operational restrictions related to the pandemic primarily during the first quarter of 2021.

The following table shows key gaming statistics for our Regional Operations:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(Dollars in millions)

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Slots Win % 9.5 % 9.6 % 9.5 % 9.7 %

Regional Operations rooms revenue was $56 million for the three months ended March 31, 2022 compared to $41 million in the prior year quarter, an increase of 38%, due to the prior year quarter being negatively affected by midweek hotel closures at certain properties and operational restrictions related to the pandemic.

Regional Operations food and beverage revenue was $91 million for the three months ended March 31, 2022 compared to $50 million in the prior year quarter, an increase of 81% and Regional Operations entertainment, retail and other revenue was $40 million for the three months ended March 31, 2022 compared to $24 million in the prior year quarter, an increase of 68%, due primarily to the prior year quarter being negatively affected by operational restrictions related to pandemic.

Regional Operations rooms revenue was $71 million for the three months ended June 30, 2022 compared to $49 million in the prior year quarter, an increase of 45%, due to increased business volume and travel activity over the prior year quarter.

Regional Operations rooms revenue was $127 million for the six months ended June 30, 2022 compared to $90 million in the prior year period, an increase of 42%, due to an increase in business volume and travel activity over the prior year period, which was negatively affected by midweek hotel closures at certain properties and operational restrictions related to the pandemic primarily during the first quarter of 2021.

Regional Operations food and beverage revenue was $106 million for the three months ended June 30, 2022 compared to $69 million in the prior year quarter, an increase of 53%, and Regional Operations entertainment, retail and other revenue was $49 million for the three months ended June 30, 2022 compared to $30 million in the prior year quarter, an increase of 60%, due primarily to increased business volume compared to the prior quarter.

Regional Operations food and beverage revenue was $197 million for the six months ended June 30, 2022 compared to $120 million in the prior year period, an increase of 65% and Regional Operations entertainment, retail and other revenue was $88 million for the six months ended June 30, 2022 compared to $54 million in the prior year period, an increase of 64%, due primarily to increased business volume and the prior year period being negatively affected by operational restrictions related to pandemic.

The following table shows key gaming statistics for MGM China:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(Dollars in millions)

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Main Floor Table Games Win % 24.8 % 20.1 % 22.6 % 21.0 %

MGM China net revenues were $268 million for the three months ended March 31, 2022 compared to $296 million in the prior year quarter, a decrease of 9%.

The current quarter was more significantly impacted by a decrease in travel as well as entry restrictions in Macau primarily related to the spread of omicron variant in Hong Kong and mainland China.

MGM China net revenues were $143 million for the three months ended June 30, 2022 compared to $311 million in the prior year quarter, a decrease of 54% and $411 million for the six months ended June 30, 2022 compared to $607 million in the prior year period, a decrease of 32%, due to the current and prior year period being significantly impacted by travel and entry restrictions in Macau with the current year period being more negatively affected by restrictions related to the increasing spread of COVID-19.

Corporate and other

Corporate and other revenue includes revenues from other corporate operations, management services and reimbursed costs revenue primarily related to our CityCenter management agreement (which was terminated upon the acquisition of CityCenter in September 2021).

Reimbursed costs revenue represents reimbursement of costs, primarily payroll-related, incurred by us in connection with the provision of management services and was $12 million and $58 million for the three months ended March 31, 2022 and 2021, respectively, which decreased compared to the prior year quarter due primarily to the termination of the CityCenter management agreement, as discussed above.

Reimbursed costs revenue represents reimbursement of costs, primarily payroll-related, incurred by us in connection with the provision of management services and was $10 million and $75 million for the three months ended June 30, 2022 and 2021, respectively, and $22 million and $133 million for the six months ended June 30, 2022 and 2021, respectively, which decreased for the respective comparative periods due primarily to the termination of the CityCenter management agreement, as discussed above.

See below for additional discussion of our share of operating results from unconsolidated affiliates.

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Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(In thousands)

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Las Vegas Strip Resorts

Las Vegas Strip Resorts Adjusted Property EBITDAR was $594 million for the three months ended March 31, 2022 compared to $108 million in the prior year quarter, an increase of 449%.

Las Vegas Strip Resorts Adjusted Property EBITDAR margin increased to 35.7% for the three months ended March 31, 2022 compared to 19.8% in the prior year quarter as the current year quarter benefited from the increase in revenues, discussed above, and the realized benefits of cost savings initiatives.

Las Vegas Strip Resorts Adjusted Property EBITDAR was $825 million for the three months ended June 30, 2022 compared to $397 million in the prior year quarter, an increase of 108%.

Las Vegas Strip Resorts Adjusted Property EBITDAR margin decreased to 38.6% for the three months ended June 30, 2022 compared to 39.5% in the prior year quarter due to an increase in contribution from lower margin non-gaming outlets and venues compared to the prior year quarter.

Las Vegas Strip Resorts Adjusted Property EBITDAR was $1.4 billion for the six months ended June 30, 2022 compared to $505 million in the prior year period, an increase of 181%.

Las Vegas Strip Resorts Adjusted Property EBITDAR margin increased to 37.3% for the six months ended June 30, 2022 compared to 32.6% in the prior year period as the current year period benefited from the increase in revenues and the realized benefits of cost savings initiatives, partially offset by an increase in contribution from lower-margin non-gaming outlets and venues primarily in the second quarter of the current year period.

Regional Operations

Regional Operations Adjusted Property EBITDAR was $313 million for the three months ended March 31, 2022 compared to $242 million in the prior year quarter, an increase of 29%.

Regional Operations Adjusted Property EBITDAR margin increased to 35.2% for the three months ended March 31, 2022 compared to 34.0% in the prior year quarter as the current year benefited from the increase in revenues, discussed above, and the realized benefits from cost savings initiatives.

MGM China Adjusted Property EBITDAR was a loss of $26 million for the three months ended March 31, 2022 compared to Adjusted Property EBITDAR of $5 million in the prior year quarter.

The decrease was due primarily to the decrease in revenues, discussed above, and the current quarter included an $18 million charge related to litigation reserves.

License fee expense was $5 million for each of the three month periods ended March 31, 2022 and 2021.

Regional Operations Adjusted Property EBITDAR was $340 million for the three months ended June 30, 2022 compared to $318 million in the prior year quarter, an increase of 7%.

Regional Operations Adjusted Property EBITDAR margin decreased to 35.4% for the three months ended June 30, 2022 compared to 37.2% in the prior year quarter due primarily to an increase in contribution from lower margin non-gaming outlets and venues.

Regional Operations Adjusted Property EBITDAR was $653 million for the six months ended June 30, 2022 compared to $560 million in the prior year period, an increase of 17%.

Regional Operations Adjusted Property EBITDAR margin decreased to 35.3% for the six months ended June 30, 2022 compared to 35.7% in the prior year period due primarily to an increase in contribution from lower margin non-gaming outlets and venues.

MGM China Adjusted Property EBITDAR was a loss of $52 million for the three months ended June 30, 2022 compared to Adjusted Property EBITDAR of $9 million in the prior year quarter.

The decrease was due primarily to the decrease in revenues, discussed above.

License fee expense was $3 million in the current quarter and $5 million in the prior year quarter.

MGM China Adjusted Property EBITDAR was a loss of $78 million for the six months ended June 30, 2022 compared to Adjusted Property EBITDAR of $13 million in the prior year period.

The decrease was due primarily to the decrease in revenues, discussed above, and the current year period included an $18 million charge related to litigation reserves.

License fee expense was $7 million and $11 million for the six months ended June 30, 2022 and 2021, respectively.

Supplemental Information - Same-store Results of Operations

The following table presents the financial results of Las Vegas Strip Resorts on a same-store basis for the three months ended March 31, 2022 and 2021.

The following table presents the financial results of Las Vegas Strip Resorts on a same-store basis for the three and six months ended June 30, 2022 and 2021.

Same-Store Adjusted Property EBITDAR is a non-GAAP measure, discussed within “Non-GAAP measures” below.

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(In thousands)

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Acquisitions (1)

(532,840) — (844,133) —

Las Vegas Strip Resorts same-store net revenues $ 1,604,336 $ 1,004,568 $ 2,955,935 $ 1,549,532

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Acquisitions (1)

(226,332) — (347,552) —

Las Vegas Strip Resorts Same-Store Adjusted Property EBITDAR $ 598,935 $ 396,805 $ 1,071,349 $ 504,924

(1) The net revenues and Adjusted Property EBITDAR of Aria have been excluded for periods subsequent to its acquisition on September 27, 2021 in determining Las Vegas Strip Resorts same-store net revenues and Las Vegas Strip Resorts Same-Store Adjusted Property EBITDAR.

Loss from Unconsolidated Affiliates

The following table summarizes information related to our share of operating loss from unconsolidated affiliates:

(1) Excludes the net revenues and Adjusted Property EBITDAR of The Cosmopolitan and Aria.

Income (loss) from Unconsolidated Affiliates

The following table summarizes information related to our 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

In June 2021, CityCenter closed the sale of its Harmon land, for which we recorded a $50 million gain within our share of operating income from unconsolidated affiliates.

In September 2021, we completed the acquisition of the 50% ownership interest in CityCenter held by Infinity World and now own 100% of the equity interest in CityCenter.

Accordingly, we no longer account for our interest in CityCenter under the equity method of accounting, and we now consolidate CityCenter in our financial statements.

In April 2022, we completed the VICI Transaction pursuant to which the assets and liabilities of MGP were derecognized, which included the Operating Partnership’s investment in VICI BREIT Venture.

Accordingly, we no longer have an ownership interest in VICI BREIT Venture.

Non-operating Results

Interest Expense

Gross interest expense was $196 million for each of three months ended March 31, 2022 and 2021.

Gross interest expense was $137 million and $203 million for the three months ended June 30, 2022 and 2021, respectively, and $333 million and $399 million for the six months ended June 30, 2022 and 2021, respectively.

The decrease from the respective prior year periods is due primarily to a decrease in debt outstanding as a result of the derecognition of the Operating Partnership’s senior notes in connection with the deconsolidation of MGP.

See Note 7 to the accompanying consolidated financial statements for discussion on long-term debt and see “Liquidity and Capital Resources” for discussion on issuances and repayments of long-term debt and other sources and uses of cash.

Other income, net was $34 million and $32 million for the three months ended March 31, 2022 and 2021, respectively.

Our 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.

Both the current year quarter and prior year quarter were unfavorably impacted by losses in Macau that we could not benefit, although the current year quarter was more greatly impacted due to the expected mix of domestic income and Macau losses.

The effective rate in the prior year quarter was also favorably impacted by a release of tax reserves in conjunction with the closure of the most recent New Jersey state audit for Marina District Development Company.

Other expense, net was $43 million and $9 million for the three and six months ended June 30, 2022, respectively, and other income, net was $87 million and $120 million for the three and six months ended June 30, 2021, respectively.

The prior year periods included an $86 million gain on investment which was related primarily to the change in measurement of an equity instrument that previously qualified for the measurement alternative under ASC 321, and which was discontinued upon the equity interest having a readily determinable fair value as a result of becoming exchange-traded.

Our 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, respectively.

The effective rate for the three and six months ended June 30, 2022 was driven primarily by tax expense recorded on the VICI Transaction and was unfavorably impacted by an increase in the valuation allowance for Macau deferred tax assets and by losses in Macau that we could not benefit, partially offset by the favorable impact of a decrease in state deferred tax liabilities as a result of the VICI Transaction.

The effective rate for the three and six months ended June 30, 2021 was unfavorably impacted by losses in Macau that we could not benefit, partially offset by the release of tax reserves in conjunction with the closure of a New Jersey state income tax audit.

Reportable segment GAAP measure

“Adjusted Property EBITDAR” is our reportable segment GAAP measure, which we utilize as the primary profit measure for our 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, and property transactions, net, and also 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, 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 property transactions, net, and also 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.

We manage capital allocation, tax planning, stock compensation, and financing decisions at the corporate level.

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“Same-Store Adjusted Property EBITDAR” is Adjusted Property EBITDAR further adjusted to exclude the Adjusted Property EBITDAR of acquired operating segments from the date of acquisition through the end of the reporting period.

Accordingly, we have excluded the Adjusted Property EBITDAR of Aria for periods subsequent to its acquisition on September 27, 2021 in Same-Store Adjusted Property EBITDAR for the periods indicated.

Accordingly, we have excluded the Adjusted Property EBITDAR of Aria for periods subsequent to its acquisition on September 27, 2021 and The Cosmopolitan subsequent to its acquisition on May 17, 2022 in Same-Store Adjusted Property EBITDAR for the periods indicated.

Same-Store Adjusted Property EBITDAR is a non-GAAP measure and is presented solely as a supplemental disclosure to reported GAAP measures because management believes this measure is useful in providing meaningful period-to-period comparisons of the results of our operations for operating segments that were consolidated for the full period presented to assist users of the financial statements in reviewing operating performance over time.

Same-Store Adjusted Property EBITDAR should not be viewed as a measure of overall operating performance, considered in isolation, or as an alternative to our reportable segment GAAP measure or net income, or as an alternative to any other measure determined in accordance with generally accepted accounting principles, because this measure is not presented on a GAAP basis, and is provided for the limited purposes discussed herein.

In addition, Same-Store Adjusted Property EBITDAR may not be defined in the same manner by all companies and, as a result, may not be comparable to similarly titled non-GAAP financials measures of other companies, and such differences may be material.

In addition, Same-Store Adjusted Property EBITDAR may not be defined in the same manner by all companies and, as a result, may not be comparable to similarly titled non-GAAP financial measures of other companies, and such differences may be material.

A reconciliation of our reportable segment Adjusted Property EBITDAR GAAP measure to Same-Store Adjusted Property EBITDAR is included herein.

“Adjusted EBITDAR” is earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening and start-up expenses, property transactions, net, rent expense associated with triple-net operating and ground leases, and income from unconsolidated affiliates related to investments in real estate ventures.

measure is widely used by analysts, lenders, financial institutions, and investors as a principal basis for the valuation of gaming companies.

“Adjusted EBITDAR” is 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, gain related to CityCenter’s sale of Harmon land recorded within

income from unconsolidated affiliates, and income from unconsolidated affiliates related to investments in real estate ventures.

Adjusted EBITDAR information is a non-GAAP measure that is a valuation metric, should not be used as an operating metric, and is presented solely as a supplemental disclosure to reported GAAP measures because we believe this measure is widely used by analysts, lenders, financial institutions, and investors as a principal basis for the valuation of gaming companies.

We believe that while items excluded from Adjusted EBITDAR may be recurring in nature and should not be disregarded in evaluation of our earnings performance, it is useful to exclude such items when analyzing current results and trends.

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Property transactions, net includes normal recurring disposals, gains and losses on sales of assets related to specific assets within our resorts, but also includes gains or losses on sales of an entire operating resort or a group of resorts and impairment charges on entire asset groups or investments in unconsolidated affiliates, which may not be comparable period over period.

In addition, management excludes rent expense associated with triple-net operating leases and ground leases.

Management believes excluding rent expense associated with triple-net operating leases and ground leases provides useful information to analysts, lenders, financial institutions, and investors when valuing the Company, as well as comparing the Company’s results to other gaming companies, without regard to differences in capital structure and leasing arrangements since the operations of other gaming companies may or may not include triple-net operating leases or ground leases.

However, as discussed herein, Adjusted EBITDAR should not be viewed as a measure of overall operating performance, an indicator of our performance, considered in isolation, or construed as an alternative to operating income or net income, or as an alternative to cash flows from operating activities, as a measure of liquidity, or as an alternative to any other measure determined in accordance with generally accepted accounting principles because this measure is not presented on a GAAP basis and excludes certain expenses, including the rent expense associated with our triple-net operating and ground leases, and is provided for the limited purposes discussed herein.

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We have significant uses of cash flows, including capital expenditures, interest payments, taxes, real estate triple-net lease and ground lease payments, and debt principal repayments, which are not reflected in Adjusted EBITDAR.

A reconciliation of GAAP net loss to Adjusted EBITDAR is included herein.

The following table presents a reconciliation of net loss attributable to MGM Resorts International to Adjusted EBITDAR:

A reconciliation of GAAP net income (loss) to Adjusted EBITDAR is included herein.

The following table presents a reconciliation of net income (loss) attributable to MGM Resorts International to Adjusted EBITDAR:

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)

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

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

Benefit for income taxes (36,341) (94,698)

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

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

Provision (benefit) for income taxes 572,839 34,826 536,498 (59,872)

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

Non-operating (income) expense:

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

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

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

Preopening and start-up expenses 542 90 976 95

1 unchanged sentence

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)

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Guarantor Financial Information

As of March 31, 2022, all of our principal debt arrangements are guaranteed by each of our wholly owned material domestic subsidiaries that guarantee our senior credit facility.

Our principal debt arrangements are not guaranteed by MGP, the Operating Partnership, MGM Grand Detroit, MGM National Harbor, Blue Tarp reDevelopment, LLC (the entity that owns and operates MGM Springfield), and each of their respective subsidiaries.

As of June 30, 2022, all of our principal debt arrangements are guaranteed by each of our wholly owned material domestic subsidiaries that guarantee our senior credit facility.

Our principal debt arrangements are not guaranteed by MGM Grand Detroit, MGM National Harbor, Blue Tarp reDevelopment, LLC (the entity that owns and operates MGM Springfield), and each of their respective subsidiaries.

Our foreign subsidiaries, including MGM China and its subsidiaries, are also not guarantors of our principal debt arrangements.

In the event that any subsidiary is no longer a guarantor of our credit facility or any of our future capital markets indebtedness, that subsidiary will be released and relieved of its obligations to guarantee our existing senior notes.

The indentures governing the senior notes further

provide that in the event of a sale of all or substantially all of the assets of, or capital stock in a subsidiary guarantor then such subsidiary guarantor will be released and relieved of any obligations under its subsidiary guarantee.

The indentures governing the senior notes further provide that in the event of a sale of all or substantially all of the assets of, or capital stock in a subsidiary guarantor then such subsidiary guarantor will be released and relieved of any obligations under its subsidiary guarantee.

The guarantees provided by the subsidiary guarantors rank senior in right of payment to any future subordinated debt of ours or such subsidiary guarantors, junior to any secured indebtedness to the extent of the value of the assets securing such debt and effectively subordinated to any indebtedness and other obligations of our subsidiaries that do not guarantee the senior notes.

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The summarized financial information of us and our guarantor subsidiaries, on a combined basis, is presented below.

As of March 31, 2022, certain of our guarantor subsidiaries collectively own Operating Partnership units and each subsidiary accounts for its respective investment under the equity method within the summarized financial information presented below.

These subsidiaries have also accounted for the MGP master lease as an operating lease, recording operating lease liabilities and operating ROU assets with the related rent expense of guarantor subsidiaries reflected within the summarized financial information.

Prior to the VICI Transaction, certain of our guarantor subsidiaries collectively owned Operating Partnership units and each subsidiary accounted for its respective investment under the equity method within the summarized financial information presented below.

These subsidiaries also accounted for the MGP master lease as an operating lease, recording operating lease liabilities and operating ROU assets with the related rent expense of guarantor subsidiaries reflected within the summarized financial information.

Additionally, assets held for sale and liabilities related to assets held for sale

associated with The Mirage and Gold Strike Tunica are included within current assets and other current liabilities, respectively, within the summarized financial information.

2022 December 31,

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Other long-term liabilities 28,070,878 18,472,138

Three Months Ended

March 31, 2022

Six Months Ended

June 30, 2022

Income Statement (In thousands)

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Operating activities.

Trends in our operating cash flows tend to follow trends in operating income, excluding non-cash charges, but can be affected by changes in working capital, the timing of significant interest payments, tax payments or refunds, and distributions from unconsolidated affiliates.

Cash provided by operating activities was $420 million in the three months ended March 31, 2022 compared to cash used in operating activities of $88 million in the three months ended March 31, 2021.

The change from the prior year period was due primarily to the increase in Adjusted Property EBITDAR at our Las Vegas Strip Resorts and Regional Operations discussed within the results of operations section above and refunds received from taxes, partially offset by an increase in triple-net lease rent payments and cash paid for interest.

Cash provided by operating activities was $933 million in the six months ended June 30, 2022 compared to $368 million in the prior year period.

Investing activities.

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Capital expenditures related to regular investments in our existing resorts can also vary depending on timing of larger remodel projects related to our public spaces and hotel rooms.

Cash used in investing activities was $237 million in the three months ended March 31, 2022 compared to $155 million in the three months ended March 31, 2021.

In the three months ended March 31, 2022, we made payments of $102 million in capital expenditures, as further discussed below, and contributions of $125 million to our unconsolidated affiliate, BetMGM, LLC (“BetMGM”).

In comparison, in the prior year quarter we made $79 million in capital expenditures, as further discussed below, and contributions of $75 million to BetMGM.

Cash provided by investing activities was $2.2 billion in the six months ended June 30, 2022 compared to cash used in investing activities of $274 million in the prior year period.

In the six months ended June 30, 2022, we received $4.4 billion in net cash proceeds related to the VICI Transaction, which were partially offset by net cash paid of $1.6 billion to acquire The Cosmopolitan, payments of $237 million in capital expenditures, as further discussed below, and contributions of $150 million to our unconsolidated affiliate, BetMGM, LLC (“BetMGM”).

In comparison, in the prior year period we made $183 million in capital expenditures, as further discussed below, and contributions of $100 million to BetMGM.

Capital Expenditures

We made capital expenditures of $102 million in the three months ended March 31, 2022, of which $9 million related to MGM China.

We made capital expenditures of $237 million in the six months ended June 30, 2022, of which $16 million related to MGM China.

Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate entities of $221 million primarily relate to expenditures in information technology and room remodels.

We made capital expenditures of $79 million in the three months ended March 31, 2021, of which $30 million related to MGM China.

Capital expenditures at MGM China included $23 million related to construction of the Emerald Tower project at MGM Cotai and $7 million related to projects at MGM Macau.

We made capital expenditures of $183 million in the six months ended June 30, 2021, of which $42 million related to MGM China.

Capital expenditures at MGM China included $33 million primarily related to construction of the south tower project at MGM Cotai and $9 million related to projects at MGM Macau.

Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate entities of $141 million primarily relate to expenditures in information technology and room remodels.

Financing activities.

Cash used in financing activities was $2.2 billion in the three months ended March 31, 2022 compared to cash provided by financing activities of $1.3 billion in the three months ended March 31, 2021.

In the three months ended March 31, 2022, we had net repayments of debt of $1.0 billion, as further discussed below, distributed $118 million to noncontrolling interest owners, and we repurchased $1.0 billion of our common stock.

In comparison, in the prior year quarter, we had net borrowings of debt of $876 million, as further discussed below, received net proceeds of $676 million from the issuance of MGP's Class A shares, distributed $76 million to noncontrolling interest owners, and we repurchased $119 million of our common stock.

Cash used in financing activities was $2.5 billion in the six months ended June 30, 2022 compared to cash provided by financing activities of $430 million in the prior year period.

In the six months ended June 30, 2022, we had net repayments of debt of $162 million, as further discussed below, distributed $206 million to noncontrolling interest owners, and we repurchased $2.1 billion of our common stock.

In comparison, in the prior year period, we had net borrowings of debt of $198 million, as further discussed below, received net proceeds of $793 million from the issuance of MGP’s Class A shares, distributed $156 million to noncontrolling interest owners, and we repurchased $340 million of our common stock.

Borrowings and Repayments of Long-term Debt

During the three months ended March 31, 2022 , we had net repayments of debt of $1.0 billion, which consisted of the repayment of $1.0 billion of aggregate principal amount of our 7.75% senior notes due 2022, net repayments of $50 million on the Operating Partnership’s revolving credit facility, and net borrowings of $32 million on MGM China's first revolving credit facility.

During the three months ended March 31, 2021, we had net borrowings of debt of $876 million, which consisted of MGM China’s issuance of $750 million in aggregate principal amount of 4.75% senior notes due 2027 at an issue price of 99.97% and $133 million of net borrowings on MGM China’s first revolving credit facility, partially offset by the Operating Partnership’s repayment of $9 million on its revolving credit facility.

The net proceeds from MGM China’s 4.75% senior notes due 2027 issuance were used to partially repay amounts outstanding under the MGM China first revolving credit facility in April 2021 and for general corporate purposes.

During the six months ended June 30, 2022, we had net repayments of debt of $162 million, which consisted of the repayment of $1.0 billion of aggregate principal amount of our 7.75% senior notes due 2022, net draws of $40 million on the Operating Partnership’s revolving credit facility, and net borrowings of $798 million on MGM China ’ s first revolving credit facility to fund an increase in share capital of MGM Grand Paradise pursuant to the capital requirements under the new Macau gaming law and for general corporate purposes.

During the six months ended June 30, 2021, we had net borrowings of debt of $198 million, which consisted of MGM China’s March 2021 issuance of $750 million in aggregate principal amount of 4.75% senior notes due 2027 at an issue price of 99.97%, offset by $542 million of net repayments on MGM China’s first revolving credit facility and the Operating Partnership’s repayment of $10 million on its revolving credit facility.

The net proceeds from MGM China’s 4.75% senior notes due 2027 issuance were used to partially repay amounts outstanding under the MGM China first revolving credit facility and for general corporate purposes.

Dividends, Distributions to Noncontrolling Interest Owners, and Share Repurchases

During the three months ended March 31, 2022, we repurchased and retired $1.0 billion of our common stock pursuant to our February 2020 $3.0 billion stock repurchase program.

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

In March 2022 and 2021 we paid dividends of $0.0025 per share, totaling $1 million paid during each of the three months ended March 31, 2022 and 2021.

The Operating Partnership paid the following distributions to its partnership unit holders during the three months ended March 31, 2022 and 2021:

During the six months ended June 30, 2022, we repurchased and retired $2.1 billion of our common stock pursuant to our February 2020 $3.0 billion and March 2022 $2.0 billion stock repurchase programs.

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

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

In March and June 2022 and 2021, we paid dividends of $0.0025 per share, totaling $2 million paid during each of the six months ended June 30, 2022 and 2021.

The Operating Partnership paid the following distributions to its partnership unit holders during the six months ended June 30, 2022 and 2021:

• $283 million of distributions paid in 2022, of which we received $117 million and MGP received $166 million, which MGP concurrently paid as a dividend to its Class A shareholders;

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Other Factors Affecting Liquidity and Anticipated Uses of Cash

As previously discussed, the spread of COVID-19 and developments surrounding the global pandemic have had a significant impact on our business, financial condition, results of operations, and cash flows in the first quarter of 2022 and may continue to impact our business during the remainder of 2022 and thereafter.

We require a certain amount of cash on hand to operate our resorts.

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In addition, from time to time we may use excess funds to repurchase our outstanding debt and equity securities subject to limitations in our revolving credit facility and Delaware law, as applicable.

We have significant outstanding debt, interest payments, rent payments, and contractual obligations in addition to planned capital expenditures and commitments, including acquiring the operations of The Cosmopolitan of Las Vegas and the LeoVegas tender offer.

As of March 31, 2022, we had cash and cash equivalents of $2.7 billion, of which MGM China held $288 million and the Operating Partnership held $8 million.

We have significant outstanding debt, interest payments, rent payments, and contractual obligations in addition to planned capital expenditures and commitments, including the LeoVegas tender offer.

As of June 30, 2022, we had cash and cash equivalents of $5.8 billion, of which MGM China held $886 million.

In addition to our cash and cash equivalent balance, we have an approximate 56% interest in MGM China.

We completed the VICI Transaction pursuant to which the majority of our VICI OP units were redeemed for cash consideration of $4.4 billion in April 2022 (refer to Note 1 for further discussion on the VICI Transaction).

At March 31, 2022, we had $11.8 billion in principal amount of indebtedness, including $391 million outstanding under the $1.25 billion MGM China first revolving credit facility.

No amounts were drawn on our $1.675 billion revolving credit facility, the $1.35 billion Operating Partnership revolving credit facility, or the $400 million MGM China second revolving credit facility.

At June 30, 2022, we had $8.4 billion in principal amount of indebtedness, including $1.2 billion outstanding under the $1.25 billion MGM China first revolving credit facility.

No amounts were drawn on our $1.675 billion revolving credit facility or the $400 million MGM China second revolving credit facility.

We have $1.25 billion of debt maturing in the next twelve months, which we expect to repay with cash on hand.

Due to the continued impact of the COVID-19 pandemic, in February 2022, MGM China further amended each of its first revolving credit facility and its second revolving credit facility to extend the financial covenant waivers through maturity in May 2024.

As of March 31, 2022, our expected cash interest payments over the next twelve months are approximately $255 million to $265 million, excluding MGP and MGM China, and approximately $450 million to $460 million on a consolidated basis, which includes MGM China and excludes MGP given the consummation of the VICI Transaction in April 2022.

We are also required, as of March 31, 2022, to make annual cash rent payments of $1.7 billion under triple-net lease agreements, which leases are also subject to annual escalators and also require us to pay substantially all costs associated with the lease, including real estate taxes, ground lease payments, insurance, utilities and routine maintenance, in addition to the annual cash rent.

In addition, as part of the VICI Transaction in April 2022, we entered into a triple-net lease agreement pursuant to which we are required to pay initial annual cash rent of $860 million, subject to annual escalators, and which replaces the master lease with MGP.

Refer to Note 1 for discussion of leases relating to pending transactions, Note 7 for discussion of current leases, and Note 12 for discussion of the MGP master lease.

As of June 30, 2022, our expected cash interest payments over the next twelve months are approximately $255 million to $265 million, excluding MGM China, and approximately $460 million to $470 million on a consolidated basis, which includes MGM China.

We are also required, as of June 30, 2022, to make annual cash rent payments of $1.8 billion over the next twelve months under triple-net lease agreements, which triple-net leases are also subject to annual escalators and also require us to pay substantially all costs associated with the lease, including real estate taxes, ground lease payments, insurance, utilities and routine maintenance, in addition to the annual cash rent.

See Note 9 for discussion of our leases and lease obligations and Note 1 and Note 3 for pending transactions.

We have planned capital expenditures expected over the remainder of the year of approximately $525 million to $535 million domestically, which is inclusive of the capital expenditures required under the triple-net lease agreements, each of which requires us to spend a specified percentage of net revenues at the respective domestic properties, and approximately $30 million to $40 million at MGM China, including approximately $11 million of show production costs related to the development of entertainment at the MGM Cotai theater.

We additionally have planned contributions to BetMGM over the remainder of the year of approximately $75 million.

We also expect to continue to repurchase shares pursuant to our February 2020 $3.0 billion share repurchase program and our March 2022 $2.0 billion share repurchase program.

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

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

We also expect to continue to repurchase shares pursuant to our March 2022 $2.0 billion share repurchase program.

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

Repurchased shares were retired.

In April 2022, the Operating Partnership paid $142 million of distributions to its partnership unit holders, of which we received $59 million and MGP received $83 million, which MGP concurrently paid as a dividend to its Class A shareholders.

On May 2, 2022 , our Board of Directors approved a quarterly dividend of $0.0025 per share.

The dividend will be payable on June 15, 2022 to holders of record on June 10, 2022.

On August 3, 2022 , our Board of Directors approved a quarterly dividend of $0.0025 per share.

The dividend will be payable on September 15, 2022 to holders of record on September 9, 2022.

Future determinations regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our results of operations, financial condition, and other factors that our Board of Directors may deem relevant.

As previously discussed, the COVID-19 pandemic has caused, and is continuing to cause, significant economic disruption both globally and in the United States, and impacted our 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 in 2022 and thereafter.

As previously discussed, the COVID-19 pandemic has caused, and is continuing to cause, significant economic disruption both globally and in the United States, and impacted our business, financial condition, results of operations and cash flows since the onset of the pandemic, which continued in the first half of 2022 and may continue in 2022 and thereafter.

As widespread vaccine distribution continues and operational restrictions have been removed, we have seen economic recovery in some of the market segments in which we operate, as shown in our Summary Operating Results.

However, some areas continue to experience renewed outbreaks and surges in infection rates.

However, some areas continue to experience renewed outbreaks and surges in infection rates, resulting in the imposition of operational restrictions, such as the temporary re-closure of our properties in Macau in July 2022 due to an increase in the number of local COVID-19 cases.

As a result, our business segments continue to face many uncertainties and our operations remain vulnerable to reversal of these trends or other continuing negative effects caused by the pandemic.

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We continue to monitor the evolving situation and guidance from international and domestic authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations.

In these circumstances, there may be developments outside our control requiring us to further adjust our operating plan, including the implementation or extension of new or existing restrictions, which may include the reinstatement of stay-at-home orders in the jurisdictions in which we operate or additional restrictions on travel and/or our business operations.

In these circumstances, there may be developments outside our control requiring us to further adjust our operating plan,

including the implementation or extension of new or existing restrictions, which may include the reinstatement of stay-at-home orders in the jurisdictions in which we operate or additional restrictions on travel and/or our business operations.

Because the situation is ongoing, and because the duration and severity remain unclear, it is difficult to forecast any impacts on our future results.

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A complete discussion of our critical accounting policies and estimates is included in our Form 10-K for the fiscal year ended December 31, 2021.

There have been no significant changes in our critical accounting policies and estimates since year end.

There have been no significant changes in our critical accounting policies and estimates since year end, other than discussed below.

Long-lived assets - MGM Grand Paradise gaming subconcession

In connection with the enactment of the new Macau gaming law in June 2022 that provides for material changes to the legal form of gaming concessions in Macau, including discontinuing and prohibiting gaming subconcessions subsequent to their expiration and has material changes to the rights and obligation provided for under new gaming concessions to be awarded in the upcoming public tender, we determined that MGM Grand Paradise’s existing 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 existing gaming subconcession, we concluded that a trigger event had occurred in June 2022 for the MGM China asset group.

The gaming subconcession is an entity-wide asset of MGM China as the benefit of the right to conduct gaming provided by the gaming subconcession is shared by each of MGM China’s casino resorts and the cash flows generated by the gaming subconcession cannot be separated from the casino resorts in which gaming operations are conducted.

We determined that the real estate is the primary asset of the asset group as the real estate component generates a significant portion of the entity’s cash flows through gaming operations conducted at its casino resorts.

Accordingly, cash flows were projected over the remaining useful life of the real estate, including cash flows from gaming operations as we believe we will be successful in obtaining a gaming concession in future public tenders.

The estimated undiscounted cash flows of the asset group significantly exceeded the carrying value;

accordingly, no impairment was indicated.

There are several estimates inherent in evaluating the gaming subconcession asset for impairment.

The determination of the asset group to be tested for recoverability and the primary asset of the asset group are matters of judgment as it is dependent on corporate structure, the legal and regulatory environment in which the entity operates, and the level of interdependency between assets used in revenue generating activities.

The determination of the primary asset directly affects the period over which cash flows are forecasted when performing the recoverability test.

In particular, future cash flow estimates are, by their nature, subjective and actual results may differ materially from our estimates.

In addition, the determination of undiscounted cash flows used in the impairment tests are highly judgmental and dependent in large part on expectations of land concession renewals and successfully obtaining a gaming concession in connection with future public tenders.

Additionally, we reassessed the useful life of the existing gaming subconcession intangible asset and, given the new gaming law and the resulting changes described above, we determined that the useful life would no longer be based on the initial term of the MGM Cotai land concession that ends in January 2038, and that the new useful life is consistent with the remaining 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, thereby accelerating the recognition of amortization within our statements of operations.

The determination of the unit of account and useful life of the gaming subconcession are based upon facts and circumstances as of a point in time and may change as such conditions develop, evolve, or change.

We have determined the unit of account and useful life based upon the final gaming law and its enactment in June 2022 as the enactment reflects the finalization of the changes in legal form and rights and obligations related to gaming concessions in Macau.

Goodwill - MGM Macau

We continue to conclude, as of June 30, 2022, that it is more-likely-than-not that the fair value of MGM Macau continues to exceed its carrying value and, accordingly, an interim quantitative impairment review of goodwill was not triggered.

However, management makes significant judgments and estimates as part of these analyses.

If MGM Macau continues to face closures, if its operations do not recover from the impacts of COVID-19 in the forecasted time period, if we are not successful in obtaining a gaming concession in connection with future public tenders, or if our obligations under

the new gaming concession exceed those forecasted, it could cause carrying values of the reporting unit to exceed its fair value in future periods, potentially resulting in an impairment charge.

In addition, the determination of multiples, control premiums, and the discount rates used in the impairment tests are highly judgmental and dependent in large part on expectations of future market conditions and entity performance.

In addition to the inherent risks associated with our normal operations, we are also exposed to additional market risks.

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We do not hold or issue financial instruments for trading purposes and do not enter into derivative transactions that would be considered speculative positions .

As of March 31, 2022, variable rate borrowings represented approximately 3% of our total borrowings.

As of June 30, 2022, variable rate borrowings represented approximately 14% of our total borrowings.

The following table provides additional information about our gross long-term debt subject to changes in interest rates :

Debt maturing in Fair Value March 31, 2022

Debt maturing in Fair Value June 30, 2022

2022 2023 2024 2025 2026 Thereafter Total

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dollar could have adverse effects on our financial position and results of operations.

As of March 31, 2022, a 1% weakening of the Hong Kong dollar (the functional currency of MGM China) to the U.S.

As of June 30, 2022, a 1% weakening of the Hong Kong dollar (the functional currency of MGM China) to the U.S.

dollar would result in a foreign currency transaction loss of $28 million .

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Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “will,” “may” and similar references to future periods.

Examples of forward-looking statements include, but are not limited to, statements we make regarding the impact of COVID-19 on our business, our ability to reduce expenses and otherwise maintain our liquidity position during the pandemic, our ability to generate significant cash flow, execute on ongoing and future strategic initiatives, including the development of an integrated resort in Japan and investments we make in online sports betting and iGaming, the closing of The Cosmopolitan of Las Vegas transaction, The Mirage transaction, and the LeoVegas transaction, amounts we will spend on capital expenditures and investments, our expectations with respect to future share repurchases and cash dividends on our common stock, dividends and distributions we will receive from MGM China, our ability to achieve the benefits of our cost savings initiatives, and amounts projected to be realized as deferred tax assets.

Examples of forward-looking statements include, but are not limited to:

statements we make regarding the impact of COVID-19 on our business, expectations regarding the impact of macroeconomic trends on the Company’s business, our ability to execute on ongoing and future strategic initiatives, including the development of an integrated resort in Japan and investments we make in online sports betting and iGaming;

the closing of The Mirage, LeoVegas, and Gold Strike Tunica transactions and any benefits expected to be received as a result of those transactions, amounts we will spend on capital expenditures and investments, our expectations with respect to future share repurchases and cash dividends on our common stock, dividends and distributions we will receive from MGM China, our ability to achieve the benefits of our cost savings initiatives, and amounts projected to be realized as deferred tax assets.

The foregoing is not a complete list of all forward-looking statements we make.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict.

Because forward-looking statements relate to the future, they are subject to inherent

uncertainties, risks, and changes in circumstances that are difficult to predict.

Our actual results may differ materially from those contemplated by the forward-looking statements.

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Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, regional, national or global political, economic, business, competitive, market, and regulatory conditions and the following:

• our substantial indebtedness and significant financial commitments, including the fixed component of our rent payments under our triple-net leases and guarantees we provide of the indebtedness of Bellagio BREIT Venture and MGP BREIT Venture could adversely affect our development options and financial results and impact our ability to satisfy our obligations;

• our substantial indebtedness and significant financial commitments, including the fixed component of our rent payments under our triple-net leases and guarantees we provide of the indebtedness of Bellagio BREIT Venture and VICI BREIT Venture could adversely affect our development options and financial results and impact our ability to satisfy our obligations;

• current and future economic, capital and credit market conditions could adversely affect our ability to service our substantial indebtedness and significant financial commitments, including the fixed components of our rent payments, and to make planned expenditures;

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• the fact that we are required to pay a significant portion of our cash flows as rent, which could adversely affect our ability to fund our operations and growth, service our indebtedness and limit our ability to react to competitive and economic changes;

• The Cosmopolitan of Las Vegas transaction, The Mirage transaction, and the LeoVegas transaction each remain subject to the satisfaction of certain closing conditions, including the receipt of certain regulatory approvals, and any anticipated benefits from such transactions may take longer to realize than expected or may not be realized at all;

• The Mirage, LeoVegas, and Gold Strike Tunica transactions each remain subject to the satisfaction of certain closing conditions, including the receipt of certain regulatory approvals, and any anticipated benefits from such transactions may take longer to realize than expected or may not be realized at all;

• the global COVID-19 pandemic has continued to materially impact our business, financial results and liquidity, and such impact could worsen and last for an unknown period of time;

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• restrictions on our ability to have any interest or involvement in gaming businesses in China, Macau, Hong Kong and Taiwan, other than through MGM China;

• the ability of the Macau government to terminate MGM Grand Paradise’s subconcession under certain circumstances without compensating MGM Grand Paradise, exercise its redemption right with respect to the subconcession, or refuse to grant MGM Grand Paradise a further extension of the subconcession on or prior to December 31, 2022;

• the potential for conflicts of interest to arise because certain of our directors and officers are also directors of MGM China.

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You should also be aware that while we from time to time communicate with securities analysts, we do not disclose to them any material non-public information, internal forecasts or other confidential business information.

Therefore, you should not assume that we agree with any statement or report issued by any analyst, irrespective of the content of the statement or report.

Therefore, you should not assume that we agree with any statement or report issued by any analyst, irrespective of the content of the

statement or report.

To the extent that reports issued by securities analysts contain projections, forecasts or opinions, those reports are not our responsibility and are not endorsed by us.

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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 2. Management’s Discussion and Analysis