What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-02 compared with 2022-08-03 · 169 added, 153 removed, 371 unchanged (46% of the section changed)

11 unchanged sentences

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.

We also offer online gaming and sports betting through LeoVegas, our consolidated subsidiary, as well as through BetMGM, our unconsolidated affiliate.

Impact of COVID-19 - Update

As of June 30, 2022, all of our domestic properties were open and not subject to operating restrictions;

As of September 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.

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

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.

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

On October 30, 2022, a COVID-19 case was identified as connected to MGM Cotai.

All guests and staff were isolated until November 1, 2022 and all gaming, hotel, restaurant, and retail operations were suspended with limited operations expected to resume beginning November 3, 2022.

More broadly, electronic applications for individual and group travel visas to Macau resumed on November 1, 2022, however, several travel and entry restrictions in Macau and mainland China remain in place, including COVID-19 testing and certain quarantine requirements, which have significantly impacted visitation to our Macau properties.

Although gaming operations in Macau have resumed and certain restrictions on visa applications have been lifted, protective and operational measures have had a negative effect on MGM China’s operations.

The extent and timing of further closures 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

6 unchanged sentences

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.

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.

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.

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.

2 unchanged sentences

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.

however, management submitted its bid on September 14, 2022, and believes that MGM Grand Paradise will be successful in obtaining a gaming concession.

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.”

In September 2022, we acquired LeoVegas through a tender offer at a cash price of SEK 61 per share, for a total fair value of equity interests acquired of approximately $556 million, inclusive of cash settlement of equity awards.

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

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).

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

See Note 3 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.

Upon closing, the master lease between us and VICI will be amended to remove Gold Strike Tunica and reflect a $40 million reduction in annual cash rent.

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

11 unchanged sentences

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 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.

Rooms that were out of service during the nine months ended September 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.

Turnover provides a basis for measuring VIP casino win percentage.

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

4 unchanged sentences

Net income (loss) attributable to MGM Resorts International (576,830) 1,350,433 1,189,091 1,123,357

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.

Consolidated net revenues were $3.4 billion for the three months ended September 30, 2022 compared to $2.7 billion in the prior year quarter, an increase of 26%.

The current quarter benefited from the inclusion of the net revenues of The Cosmopolitan and a full quarter of net revenues related to Aria as well as from comparative increases in business volume and travel activity at our domestic resorts, primarily at our Las Vegas Strip Resorts.

At MGM China, the current and prior year quarters were significantly impacted by travel and entry restrictions in Macau due to the impact of COVID-19 with the current quarter being negatively affected by property closures and more significantly impacted by restrictions compared to the prior quarter.

As a result, net revenues at our Las Vegas Strip Resorts increased 67%, Regional Operations increased 5%, and MGM China decreased 70% 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.

Consolidated operating loss was $1.0 billion for the three months ended September 30, 2022 compared to operating income of $1.9 billion in the prior year quarter.

The current quarter reflected an increase in depreciation and amortization expense, 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, and a decrease in income from unconsolidated affiliates, partially offset by the increase in net revenues, as discussed above.

In addition, the prior year quarter benefited from the gain on consolidation of CityCenter, net of $1.6 billion.

Depreciation and amortization expense increased $1.1 billion compared to the prior year quarter, due primarily to the change in useful life of the MGM Grand Paradise gaming subconcession.

Consolidated net revenues were $9.5 billion for the nine months ended September 30, 2022 compared to $6.6 billion in the prior year period, an increase of 44%.

The current year period benefited from the inclusion of The Cosmopolitan and a full year of net revenues related to Aria.

The current year period 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 period, however, business

volumes subsequently improved at our domestic resorts with a significant increase primarily at our Las Vegas Strip Resorts over the prior year period, which was negatively affected by midweek property and hotel closures, lower travel activity, and operational restrictions due to the COVID-19 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 negatively affected by property closures and more significantly impacted by restrictions related to the COVID-19 pandemic compared to the prior year period.

As a result, net revenues at our Las Vegas Strip Resorts increased 108%, Regional Operations increased 13%, and MGM China decreased 44% 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.

Consolidated operating income was $1.4 billion for the nine months ended September 30, 2022 compared to $1.9 billion 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.

The prior year period benefited from the gain on consolidation of CityCenter, net of $1.6 billion.

Depreciation and amortization expense increased $1.2 billion compared to the prior year period, due primarily to the change in useful life of the MGM Grand Paradise gaming subconcession.

Net Revenues by Segment

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

10 unchanged sentences

Food and beverage 115,432 92,148 312,621 211,661

Entertainment, retail and other 48,567 30,345 88,465 54,098

Entertainment, retail and other, and reimbursed costs 52,557 42,579 141,022 96,677

973,935 925,123 2,824,433 2,492,756

8 unchanged sentences

Las Vegas Strip Resorts

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;

Las Vegas Strip Resorts casino revenue was $576 million for the three months ended September 30, 2022 compared to $423 million in the prior year quarter, an increase of 36%, due primarily to the inclusion of The Cosmopolitan and a full quarter of casino revenue related to Aria, and increases in business volume and travel activity in the current year quarter.

Las Vegas Strip Resorts casino revenue was $1.5 billion for the nine months ended September 30, 2022 compared to $1.0 billion in the prior year period, an increase of 54%, due primarily to the inclusion of The Cosmopolitan and a full year of casino revenue related to 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 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.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

Slots win % 9.3 % 9.6 % 9.3 % 9.5 %

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.

Las Vegas Strip Resorts rooms revenue was $736 million for the three months ended September 30, 2022 compared to $403 million in the prior year quarter, an increase of 83%.

The current year quarter benefited from the inclusion of The Cosmopolitan and a full quarter of revenues from Aria 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 $1.9 billion for the nine months ended September 30, 2022 compared to $846 million in the prior year period, an increase of 127%.

The current year period benefited from the inclusion of The Cosmopolitan and a full year of revenues from Aria.

Although operations were initially negatively affected by the omicron variant in the early part of the period, REVPAR increased significantly 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

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

4 unchanged sentences

$ 210 $ 148 $ 192 $ 109

(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;

(1) Rooms that were out of service, including midweek closures, during the nine months ended September 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 $600 million for the three months ended September 30, 2022 compared to $309 million in the prior year quarter, an increase of 94%, and Las Vegas Strip Resorts entertainment, retail and other revenues were $390 million for the three months ended September 30, 2022 compared to $247 million in the prior year quarter, an increase of 58%, due primarily to the inclusion of The Cosmopolitan and a full quarter of revenues from Aria and an increase in business volume and travel activity in the current year quarter.

Las Vegas Strip Resorts food and beverage revenue was $1.5 billion for the nine months ended September 30, 2022 compared to $615 million in the prior year period, an increase of 151%, and Las Vegas Strip Resorts entertainment, retail and other revenues were $1.1 billion for the nine months ended September 30, 2022 compared to $462 million in the prior

year period, an increase of 136%, due primarily to the inclusion of The Cosmopolitan and a full year of revenues from Aria.

The current year period 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 $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.

Regional Operations casino revenue was $721 million for the three months ended September 30, 2022 compared to $720 million in the prior year quarter, flat compared to the prior year quarter, and $2.2 billion for the nine months ended September 30, 2022 compared to $2.0 billion in the prior year period, an increase of 7%, due primarily to table games win increasing 12% over the prior year period and slots win increasing 11% over the prior year period, 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

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

Slots win % 9.5 % 9.6 % 9.5 % 9.6 %

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.

Regional Operations rooms revenue was $85 million for the three months ended September 30, 2022 compared to $71 million in the prior year quarter, an increase of 20%, due to increased business volume and travel activity over the prior year quarter.

Regional Operations rooms revenue was $212 million for the nine months ended September 30, 2022 compared to $160 million in the prior year period, an increase of 32%, 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 $115 million for the three months ended September 30, 2022 compared to $92 million in the prior year quarter, an increase of 25%, and Regional Operations entertainment, retail and other revenue, and reimbursed costs was $53 million for the three months ended September 30, 2022 compared to $43 million in the prior year quarter, an increase of 23%, due primarily to increased business volume compared to the prior quarter.

Regional Operations food and beverage revenue was $313 million for the nine months ended September 30, 2022 compared to $212 million in the prior year period, an increase of 48% and Regional Operations entertainment, retail and other revenue, and reimbursed costs was $141 million for the nine months ended September 30, 2022 compared to $97 million in the prior year period, an increase of 46%, 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

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

Main floor table games win % 21.4 % 21.3 % 22.4 % 21.0 %

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.

MGM China net revenues were $87 million for the three months ended September 30, 2022 compared to $289 million in the prior year quarter, a decrease of 70%, and $499 million for the nine months ended September 30, 2022 compared to $896 million in the prior year period, a decrease of 44%, due to the current and prior year period being significantly impacted by travel and entry restrictions in Macau with the current year period being negatively affected by property closures and more significantly impacted by restrictions related to the COVID-19 pandemic.

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 $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.

Corporate and other revenue in the current year periods primarily includes revenues from LeoVegas, other corporate operations, and management services.

In the prior year periods, corporate and other revenue also included reimbursed costs revenue related to our CityCenter management agreement (which was terminated upon the acquisition of CityCenter in September 2021).

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

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

Las Vegas Strip Resorts

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.

Las Vegas Strip Resorts Adjusted Property EBITDAR was $846 million for the three months ended September 30, 2022 compared to $535 million in the prior year quarter, an increase of 58%.

Las Vegas Strip Resorts Adjusted Property EBITDAR margin decreased to 36.8% for the three months ended September 30, 2022 compared to 38.7% in the prior year quarter due to an increase in contribution from lower margin non-gaming outlets and venues and an increase in general and administrative expense primarily related to payroll.

Las Vegas Strip Resorts Adjusted Property EBITDAR was $2.3 billion for the nine months ended September 30, 2022 compared to $1.0 billion in the prior year period, an increase of 118%.

Las Vegas Strip Resorts Adjusted Property EBITDAR margin increased to 37.1% for the nine months ended September 30, 2022 compared to 35.5% in the prior year period as the current year period benefited from the increase in revenues, partially offset by an increase in contribution from lower-margin non-gaming outlets and venues and an increase in general and administrative expenses primarily related to payroll and advertising.

Regional Operations

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.

Regional Operations Adjusted Property EBITDAR was $322 million for the three months ended September 30, 2022 compared to $348 million in the prior year quarter, a decrease of 8%.

Regional Operations Adjusted Property EBITDAR was $975 million for the nine months ended September 30, 2022 compared to $909 million in the prior year period, an increase of 7%.

Regional Operations Adjusted Property EBITDAR margin decreased to 33.1% for the three months ended September 30, 2022 compared to 37.6% in the prior year quarter.

Regional Operations Adjusted Property EBITDAR margin decreased to 34.5% for the nine months ended September 30, 2022 compared to 36.4% in the prior year period.

The margin decreases were due primarily to an increase in contribution from lower margin non-gaming outlets and venues and an increase in general and administrative expense primarily related to payroll.

MGM China Adjusted Property EBITDAR was a loss of $70 million for the three months ended September 30, 2022 compared to Adjusted Property EBIT DAR of $7 million in the prior year quarter.

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

License fee expense was $2 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.

MGM China Adjusted Property EBITDAR was a loss of $148 million for the nine months ended September 30, 2022 compared to Adjusted Property EBITDAR of $20 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.

License fee expense was $9 million and $16 million for the nine months ended September 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 and six months ended June 30, 2022 and 2021.

The following table presents the financial results of Las Vegas Strip Resorts on a same-store basis for the three and nine months ended September 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

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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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.

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

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

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Interest Expense

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.

Gross interest expense was $125 million and $200 million for the three months ended September 30, 2022 and 2021, respectively, and $458 million and $599 million for the nine months ended September 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 MGP OP’s senior notes in connection with the deconsolidation of MGP, partially offset by an increase in the debt outstanding under MGM China’s revolving credit facilities.

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 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.

Other expense, net was $14 million and $49 million for the three months ended September 30, 2022 and 2021, respectively.

The current year and prior year quarters included a net unrealized loss on equity instruments of $20 million and $48 million, respectively.

Other expense, net was $23 million for the for the nine months ended September 30, 2022 compared to other income, net of $70 million in the prior year period.

The current year period included a $28 million net unrealized loss on equity instruments.

The prior year period included a $39 million net unrealized gain on equity instruments, and a $33 million gain on the MGP OP’s unhedged interest rate swaps.

Our effective income tax rate was a benefit of 10.6% on loss before income taxes and a provision of 43.8% on income before income taxes for the three and nine months ended September 30, 2022, respectively, compared to a provision of 17.4% and 16.9% on income before income taxes for the three and nine months ended September 30, 2021, respectively.

The effective rate for the three months ended September 30, 2022 was unfavorably impacted by losses in Macau that we could not benefit and an increase in state deferred tax liabilities resulting from the issuance of income tax regulations by the state of New Jersey, partially offset by a decrease in Macau deferred tax liabilities resulting from an extension of the exemption from the Macau 12% complementary tax to the end of the year.

The effective rate for the nine months ended September 30, 2022 was unfavorably impacted by losses in Macau that we could not benefit and the increase in state deferred tax liabilities as a result of the New Jersey income tax regulation issuance, partially offset by the decrease in Macau deferred tax liabilities resulting from the extension of the exemption from the Macau 12% complementary tax to the end of the year, the impact of the reassessment of the useful life of the MGM Grand Paradise gaming subconcession, and the impact of a decrease in state deferred tax liabilities as a result of the VICI Transaction.

The effective rates for the three and nine months ended September 30, 2021 were favorably impacted by tax expense recorded on the "Gain on consolidation of CityCenter, net", at an approximately 12% effective rate due to the presence of goodwill, and were 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, 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.

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 related to triple-net operating leases and ground leases, income from unconsolidated affiliates related to investments in real estate ventures, and also excludes gain on consolidation of CityCenter, net, gain related to CityCenter’s sale of Harmon land recorded within income from unconsolidated affiliates, 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 and The Cosmopolitan subsequent to its acquisition on May 17, 2022 in Same-Store Adjusted Property EBITDAR for the periods indicated.

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

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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, 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” 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, gain on consolidation of CityCenter, net, rent expense related to triple-net operating leases 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.

results and trends.

Also, we believe excluded items may not relate specifically to current trends or be indicative of future results.

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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.

In addition, management excludes rent expense related to triple-net operating leases and ground leases.

Management believes excluding rent expense related to 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 related to our triple-net operating leases and ground leases, and is provided for the limited purposes discussed herein.

In addition, other companies in the gaming and hospitality industries that report Adjusted EBITDAR may calculate Adjusted EBITDAR in a different manner and such differences may be material.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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140,483 272,711 503,392 595,287

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

Operating income (loss) (1,045,971) 1,892,782 1,441,268 1,909,852

Preopening and start-up expenses 396 1,547 1,372 1,642

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

Gain on consolidation of CityCenter, net — (1,562,329) — (1,562,329)

Triple-net operating lease and ground lease rent expense 604,193 191,622 1,350,099 570,851

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Guarantor Financial Information

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.

As of September 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.

Our foreign subsidiaries, including LeoVegas, MGM China, and each of their respective 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.

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

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.

Prior to the VICI Transaction, certain of our guarantor subsidiaries owned MGP OP units which were accounted for under the equity method and is reflected as such within the summarized financial information.

Certain of our guarantor subsidiaries accounted for the MGP master lease as an operating lease with the operating lease liabilities, operating lease ROU assets, and related rent expense 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.

September 30,

2022 December 31,

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Current assets $ 7,377,165 $ 5,663,171

Investment in the MGP Operating Partnership — 2,284,222

Investment in MGP OP — 2,284,222

MGP master lease right-of-use asset, net — 6,629,140

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Other long-term liabilities 28,162,590 18,472,138

Six Months Ended

June 30, 2022

Nine Months Ended

September 30, 2022

Income Statement (In thousands)

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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, and tax payments or refunds.

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.

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.

Cash provided by operating activities was $1.3 billion in the nine months ended September 30, 2022 compared to $887 million in the prior year period.

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 a decrease in cash paid for interest, partially offset by an increase in triple-net lease rent payments.

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 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.

Cash provided by investing activities was $1.6 billion in the nine months ended September 30, 2022 compared to $1.7 billion in the prior year period.

In the nine months ended September 30, 2022, we received $4.4 billion in net cash proceeds related to the VICI Transaction, which were partially offset by cash paid of $1.6 billion to acquire The Cosmopolitan, net of cash acquired, cash paid of $280 million in connection with the LeoVegas tender offer, net of cash acquired, cash paid of $183 million to acquire shares of LeoVegas in the open market during the tender offer period, payments of $457 million in capital expenditures, as further discussed below, and contributions of $200 million to our unconsolidated affiliate, BetMGM.

In comparison, in the prior year period we received $3.9 billion in net cash proceeds from the sale of the real estate of Aria and Vdara, which were partially offset by our payments of $1.8 billion to acquire CityCenter, net of cash acquired, $322 million in capital expenditures, as further discussed below, and contributions of $150 million to BetMGM.

Capital Expenditures

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 $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.

We made capital expenditures of $457 million in the nine months ended September 30, 2022, of which $23 million related to MGM China.

Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate and other entities of $434 million primarily relate to expenditures in information technology and room remodels.

We made capital expenditures of $322 million in the nine months ended September 30, 2021, of which $58 million related to MGM China.

Capital expenditures at MGM China included $44 million primarily related to construction of the Emerald Tower project at MGM Cotai and $14 million related to projects at MGM Macau.

Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate entities of $264 million primarily related to expenditures in information technology and room remodels.

Financing activities.

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.

Cash used in financing activities was $2.8 billion in the nine months ended September 30, 2022 compared to $2.1 billion in the prior year period.

In the nine months ended September 30, 2022, we had net repayments of debt of $63 million, as further discussed below, distributed $208 million to noncontrolling interest owners, and we repurchased $2.4 billion of our common stock.

In comparison, in the prior year period, we had net repayments of debt of $1.5 billion, as further discussed below, distributed $240 million to noncontrolling interest owners, and we repurchased $1.0 billion of our common stock, partially offset by net proceeds received of $793 million from the issuance of MGP’s Class A shares.

Borrowings and Repayments of Long-term Debt

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.

During the nine months ended September 30, 2022, we had net repayments of debt of $63 million, which consisted of the repayment of $1.0 billion of aggregate principal amount of our 7.75% senior notes due 2022, partially offset by net draws of $40 million on MGP OP’s revolving credit facility, net borrowings of $884 million on MGM China ’ s first revolving credit facility and borrowings of $13 million on MGM China’s second revolving credit facility.

MGM China’s borrowings were made 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 nine months ended September 30, 2021, we had net repayments of debt of $1.5 billion, which consisted of the repayment of the $1.7 billion outstanding on CityCenter’s credit facility in full, which was assumed in the acquisition, using cash on hand, net repayments of $503 million on MGM China’s first revolving credit facility, and repayments of $10 million on MGP OP’s revolving credit facility.

These repayments were partially offset by 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%.

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 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:

During the nine months ended September 30, 2022, we repurchased and retired $2.4 billion of our common stock pursuant to our February 2020 $3.0 billion and March 2022 $2.0 billion stock repurchase plans.

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

The remaining availability under the March 2022 $2.0 billion stock repurchase plan was $827 million as of September 30, 2022.

In March, June, and September 2022 and 2021, we paid dividends of $0.0025 per share, totaling $3 million and $4 million paid during the nine months ended September 30, 2022 and 2021, respectively.

MGP OP paid the following distributions to its partnership unit holders during the nine months ended September 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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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 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.

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

As of September 30, 2022, we had cash and cash equivalents of $5.3 billion, of which MGM China held $875 million.

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

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.

At September 30, 2022, we had $8.6 billion in principal amount of indebtedness, including $1.2 billion outstanding under MGM China’s first revolving credit facility, $13 million outstanding under MGM China’s second revolving credit facility, and $39 million outstanding under LeoVegas’s revolving credit facility.

No amounts were drawn on our revolving credit facility.

We have $1.4 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 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.

As of September 30, 2022, our expected cash interest payments over the next twelve months are approximately $220 million to $230 million, excluding MGM China, and approximately $445 million to $460 million on a consolidated basis, which includes MGM China.

We are also required, as of September 30, 2022, to make annual cash rent payments of $1.9 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.

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We additionally have planned contributions to BetMGM over the remainder of the year of approximately $25 million.

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.

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

Subsequent to the quarter ended September 30, 2022, we repurchased approximately 6 million shares of our common stock at an average price of $31.76 per share for an aggregate amount of $183 million.

Repurchased shares were retired.

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.

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

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

As previously discussed, the COVID-19 pandemic caused 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 2022.

As a result of the widespread distribution of vaccines and the removal of operational restrictions, 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, 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.

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We cannot predict the degree, or duration, to which our operations will be affected by the COVID-19 pandemic, and the effects could be material.

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.

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

Critical Accounting Policies and Estimates

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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

Long-lived assets valuation - 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.

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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.

Goodwill valuation

We continue to conclude, as of September 30, 2022, that it is more-likely-than-not that the fair value of our reporting units exceed their 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.

For MGM Macau, if the property 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 the carrying value of the reporting unit to exceed its fair value in future periods, potentially resulting in an impairment charge.

For Empire City, if we are not successful in obtaining a commercial gaming license, if the costs to obtain the license, develop, and construct a full-scale commercial gaming facility increase from our current expectations, or if we do not realize our forecasted cash flows for the expanded facility, it could cause the carrying value 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.

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

As of September 30, 2022, variable rate borrowings represented approximately 16% 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 June 30, 2022

Debt maturing in Fair Value September 30, 2022

2022 2023 2024 2025 2026 Thereafter Total

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Variable rate $ 102 $ — $ 1,255 $ — $ — $ — $ 1,357 $ 1,357

Average interest rate N/A N/A 3.5 % N/A N/A N/A 3.5 %

Average interest rate 5.7 % N/A 5.2 % N/A N/A N/A 5.3 %

In addition to the risk associated with our variable interest rate debt, we are also exposed to risks related to changes in foreign currency exchange rates, mainly related to MGM China and to our operations at MGM Macau and MGM Cotai.

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

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

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

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.

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, expectations regarding MGM Grand Paradise’s bid for a new concession contract, the closing of The Mirage and Gold Strike Tunica transactions and any benefits expected to be received as a result of those and any other transactions to acquire or sell assets, 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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Therefore, we caution you against relying on any of these forward-looking statements.

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:

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 VICI BREIT Venture could adversely affect our development options and financial results and impact our ability to satisfy our obligations;

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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 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 Mirage 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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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