What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-02-24 compared with 2022-02-25 · 241 added, 286 removed, 343 unchanged (61% of the section changed)

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Most of our revenue is cash-based, through customers wagering with cash or paying for non-gaming services with cash or credit cards.

We rely on the ability of our resorts to generate operating cash flow to fund capital expenditures, provide excess cash flow for future development, repay debt financings, and return capital to our shareholders.

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 rely on the ability of our resorts to generate operating cash flow to pay rent, fund capital expenditures, provide excess cash flow for future development, repay debt financings, and return capital to our shareholders.

We lease the real estate assets of our domestic resorts pursuant to triple-net lease agreements and 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.

Our results of operations are affected by decisions we make related to our capital allocation, our access to capital and our cost of capital.

While we continue to be focused on improving our financial position and returning capital to shareholders, we are also dedicated to capitalizing on strategic development or initiatives.

While we continue to be focused on maintaining a strong balance sheet with adequate liquidity and returning capital to shareholders, we are also dedicated to capitalizing on strategic development or initiatives.

Our results of operations do not tend to be seasonal in nature, though a variety of factors may affect the results of any interim period, including the timing of major conventions, Far East baccarat volumes, the amount and timing of marketing and special events for our high-end gaming customers, and the level of play during major holidays, including New Year and Lunar New Year.

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In addition, our success in marketing to customer groups such as convention customers and the financial health of customer segments such as business travelers or high-end gaming customers from a specific country or region can affect our results.

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 in 2020 and 2021 and may continue to impact our business in 2022 and thereafter.

Our results will also depend upon our ability to expand our ownership, management and operation of gaming facilities and accessing new markets for iGaming and online sports betting.

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 in 2020, 2021 and 2022 and may continue to impact our business thereafter.

In March 2020, all of our domestic properties were temporarily closed pursuant to state and local government restrictions imposed as a result of COVID-19.

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Beginning in the latter part of the first quarter of 2021 and continuing into the second quarter of 2021, our domestic jurisdictions eased and removed prior operating restrictions, including capacity and occupancy limits, as well as social distancing policies.

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.

As of December 31, 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.

In Macau, following a temporary closure of our properties on February 5, 2020, operations resumed on February 20, 2020, subject to certain health safeguards, such as limiting the number of seats available at each table game, slot machine spacing, reduced operating hours at a number of restaurants and bars, temperature checks, and mask protection.

Although the issuance of tourist visas (including the individual visit scheme) for residents of Zhuhai, Guangdong Province and all other provinces in mainland China to travel to Macau resumed on August 12, 2020, August 26, 2020 and September 23, 2020, respectively, 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

mainland China, and bans on entry on other visitors), which significantly impacted visitation to our Macau properties.

The issuance of tourist visas (including the individual visit scheme) for residents of Zhuhai, Guangdong Province and all other provinces in mainland China to travel to Macau resumed on August 12, 2020, August 26, 2020 and September 23, 2020, respectively, however several travel and entry restrictions in Macau, Hong Kong and mainland China remained 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.

In the third and fourth quarters of 2021, local COVID-19 cases were identified in Macau.

Upon such occurrences, a state of immediate prevention was declared and mass mandatory nucleic acid testing was imposed in Macau, the validity period of negative test results for re-entry into mainland China was shortened and quarantine requirements were imposed, certain events were cancelled or suspended, and in some instances, certain entertainment and leisure facilities were closed throughout Macau.

Although gaming and hotel operations have remained open during these states of immediate prevention, such measures have had a negative effect on our 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.

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.

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

All guests and staff at MGM Cotai were isolated until November 1, 2022 and all gaming, hotel, restaurant, and retail operations were suspended with limited operations resumed beginning November 3, 2022.

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

Beginning in December 2022, Macau and mainland China started to unwind testing and quarantine requirements as well as travel and entry restrictions associated with the “dynamic zero” COVID-19 policy.

On January 8, 2023, Macau lifted the majority of its COVID-19 pandemic travel and quarantine restrictions with the exception of overseas visitors travelling from outside of mainland China, Hong Kong and Taiwan being required to present a negative nucleic acid test or rapid antigen test result in place until February 6, 2023 when all remaining COVID-19 travel restrictions were removed.

Visitation Statistics

The Las Vegas Strip segment results of operations are heavily impacted by visitor volume and trends.

During the year ended December 31, 2022, Las Vegas visitor volume increased 21% compared to the prior year period according to information published by the Las Vegas Convention and Visitors Authority.

The Las Vegas market has had the addition of new sporting events and venues, the expansion of convention centers, as well as music and entertainment events, which have positively impacted visitation, along with the easing of COVID-19 related restrictions, as discussed above.

The Las Vegas market has had the expansion of convention center, sporting, music, and entertainment events in the current year, which have significantly impacted visitation positively among business and leisure travel.

The MGM China segment results of operations also are heavily impacted by visitor volume and trends.

During the year ended December 31, 2021, Macau visitor arrivals increased 31% compared to the prior year period according to statistics published by the Statistics and Census Service of the Macau Government, as the prior year period was more negatively affected by travel and entry restrictions in Macau than in the current year period.

During the year ended December 31, 2022, Macau visitor arrivals decreased 26% compared to the prior year period according to statistics published by the Statistics and Census Service of the Macau Government, as the current year period was more negatively affected by travel and entry restrictions in Macau than in the prior year period.

For a discussion of the risks to our business resulting from COVID-19, please see “Item 1A.

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Other Developments

As of December 31, 2021, we lease the real estate assets of The Mirage, Luxor, New York-New York, Park MGM, Excalibur, The Park, Gold Strike Tunica, MGM Grand Detroit, Beau Rivage, Borgata, Empire City, MGM National Harbor, MGM Northfield Park, and MGM Springfield pursuant to a master lease agreement with MGP.

See Note 1 in the accompanying consolidated financial statements for information regarding MGP and the Operating Partnership, which we consolidate in our financial statements.

All intercompany transactions, including transactions under the master lease with MGP, have been eliminated in consolidation.

As further discussed below, we lease the real estate assets of Bellagio pursuant to a lease agreement with Bellagio BREIT Venture, the real estate assets of Mandalay Bay and MGM Grand Las Vegas pursuant to a lease agreement with MGP BREIT Venture, and the real estate assets of Aria (including Vdara) pursuant to a lease agreement with a fund managed by Blackstone, as further discussed below.

In April 2019, we acquired the membership interests of Northfield Park Associates, LLC (“Northfield”), an Ohio limited liability company that owned the real estate assets and operations of the Hard Rock Rocksino Northfield Park, from MGP and MGP retained the real estate assets.

We then rebranded the property to MGM Northfield Park, and added it to the master lease between us and MGP.

See Note 18 in the accompanying financial statements for information regarding this acquisition.

Also, in January 2019, we acquired the real property and operations associated with Empire City in Yonkers, New York for consideration of approximately $865 million.

Subsequently, MGP acquired the developed real property associated with Empire City from us and Empire City was added to the master lease between us and MGP.

In addition, pursuant to the master lease amendment, we agreed to provide MGP a right of first offer with respect to certain undeveloped land adjacent to the property to the extent that we develop additional gaming facilities and choose to sell or transfer such property in the future.

See Note 4 and Note 18 in the accompanying consolidated financial statements for information regarding this acquisition.

In March 2019, we entered into an amendment to the master lease between us and MGP with respect to improvements made by us related to the rebranding of the Park MGM and NoMad Las Vegas.

See Note 18 in the accompanying financial statements for information regarding this transaction with MGP, which is eliminated in consolidation.

In November 2019, we completed the Bellagio transaction, pursuant to which Bellagio BREIT Venture was formed, which acquired the Bellagio real estate assets from us and entered into a lease agreement to lease the real estate assets back to us.

The Bellagio lease has an initial term of 30 years with two 10-year renewal periods, exercisable at our option.

The initial term of the lease provides for an initial annual rent of $245 million with a fixed 2% escalator for the first 10 years

and, thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year, subject to a cap of 3% during the 11th through 20th years and 4% thereafter.

In addition, the lease obligates us to spend a specified percentage of net revenues at the property on capital expenditures and that we comply with certain financial covenants, which, if not met, would require us to maintain cash security or provide one or more letters of credit in favor of the landlord in an amount equal to rent for the succeeding 2-year period.

In exchange for the contribution of the real estate assets, we received total consideration of $4.25 billion, which consisted of a 5% equity interest in the venture and cash of approximately $4.2 billion.

We also provide a shortfall guarantee of the principal amount of indebtedness of Bellagio BREIT Venture (and any interest accrued and unpaid thereon).

As a result of the sale, we recorded a gain of approximately $2.7 billion.

See Note 1, Note 11, and Note 12 in the accompanying consolidated financial statements for information regarding this transaction, lease agreement, and shortfall guarantee, respectively.

In December 2019, we sold Circus Circus Las Vegas and adjacent land for $825 million, which consisted of $663 million paid in cash and a secured note due 2024 with a face value of $163 million and fair value of $134 million.

In connection with our review of the carrying value of assets to be sold due to the offer for sale received during the third quarter of 2019, we recorded a non-cash impairment charge of $219 million.

Upon completion of the sale in the fourth quarter, we recorded a loss of $2 million.

See Note 1 and Note 16 in the accompanying consolidated financial statements for information regarding this transaction.

In February 2020, we completed the MGP BREIT Venture Transaction pursuant to which the real estate assets of MGM Grand Las Vegas and Mandalay Bay (including Mandalay Place) were contributed to MGP BREIT Venture, owned 50.1% by the Operating Partnership and 49.9% by a subsidiary of BREIT.

In exchange for the contribution of the real estate assets, MGM and MGP received total consideration of $4.6 billion, which was comprised of $2.5 billion of cash, $1.3 billion of the Operating Partnership’s secured indebtedness assumed by MGP BREIT Venture, and the Operating Partnership’s 50.1% equity interest in MGP BREIT Venture.

In addition, the Operating Partnership issued approximately 3 million Operating Partnership units to us representing 5% of the equity value of MGP BREIT Venture.

We also provide a shortfall guarantee of the principal amount of indebtedness of MGP BREIT Venture (and any interest accrued and unpaid thereon).

In February 2020, we completed the MGM Grand Las Vegas and Mandalay Bay transaction pursuant to which the real estate assets of MGM Grand Las Vegas and Mandalay Bay (including Mandalay Place) were contributed to VICI BREIT Venture, owned 50.1% by MGP OP (now owned by VICI) and 49.9% by a subsidiary of BREIT.

In exchange for the contribution of the real estate assets, MGM and MGP received total consideration of $4.6 billion, which was comprised of $2.5 billion of cash, $1.3 billion of MGP OP’s secured indebtedness assumed by VICI BREIT Venture, and MGP OP’s 50.1% equity interest in VICI BREIT Venture (now owned by VICI).

In addition, MGP OP issued approximately 3 million MGP OP units to us representing 5% of the equity value of VICI BREIT Venture.

We also provide a shortfall guarantee of the principal amount of indebtedness of VICI BREIT Venture (and any interest accrued and unpaid thereon).

On the closing date, BREIT also purchased approximately 5 million MGP Class A shares for $150 million.

See Note 1, Note 11, and Note 12 in the accompanying consolidated financial statements for information regarding this transaction, lease agreement, and shortfall guarantee, respectively.

In connection with the MGP BREIT Venture Transaction, MGP BREIT Venture entered into a lease with us for the real estate assets of Mandalay Bay and MGM Grand Las Vegas.

The lease has an initial term of 30 years with two 10-year renewal periods, exercisable at our option.

The initial term of the lease provides for an initial annual rent of $292 million with a fixed 2% escalator for the first 15 years and, thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year, subject to a cap of 3%.

In addition, the lease obligates us to spend a specified percentage of net revenues at the properties on capital expenditures and that we comply with certain financial covenants, which, if not met, would require us to maintain cash security or provide one or more letters of credit in favor of the landlord in an amount equal to the rent for the succeeding 1-year period.

See Note 11 in the accompanying financial statements for information regarding this lease agreement.

In connection with the MGP BREIT Venture Transaction, the master lease with MGP was modified to remove the Mandalay Bay property and the annual cash rent under the MGP master lease was reduced by $133 million, as further discussed in Note 18.

Also, in January 2020, we, the Operating Partnership, and MGP entered into an agreement for the Operating Partnership to waive its right following the closing of the MGP BREIT Venture Transaction to issue MGP Class A shares, in lieu of cash, to us in connection with us exercising our right to require the Operating Partnership to redeem the Operating Partnership units we hold, at a price per unit equal to a 3% discount to the ten day average closing price prior to the date of the notice of redemption .

The waiver was effective upon closing of the transaction on February 14, 2020 and was scheduled to terminate on the earlier of February 14, 2022 or upon our receipt of cash proceeds of $1.4 billion as consideration for the redemption of our Operating Partnership units.

On May 18, 2020 the Operating Partnership redeemed approximately 30 million Operating Partnership units that we held for $700 million, or $23.10 per unit, and on December 2, 2020, the Operating Partnership redeemed approximately 24 million Operating Partnership units that we held for the remaining $700 million, or $29.78 per unit.

In connection with the MGM Grand Las Vegas and Mandalay Bay transaction, the master lease with MGP was modified to remove the Mandalay Bay property and VICI BREIT Venture entered into a lease with us for the real estate assets of Mandalay Bay and MGM Grand Las Vegas.

See Note 11 for information regarding the MGM Grand Las Vegas and Mandalay Bay lease.

Also, in January 2020, we, MGP OP, and MGP entered into an agreement for MGP OP to waive its right following the closing of the MGM Grand Las Vegas and Mandalay Bay transaction to issue MGP Class A shares, in lieu of cash, to us in connection with us exercising our right to require MGP OP to redeem the MGP OP units we hold, at a price per unit

equal to a 3% discount to the ten day average closing price prior to the date of the notice of redemption .

On May 18, 2020 MGP OP redeemed approximately 30 million MGP OP units that we held for $700 million, or $23.10 per unit, and on December 2, 2020, MGP OP redeemed approximately 24 million of the MGP OP units that we held for the remaining $700 million, or $29.78 per unit.

As a result, the waiver terminated in accordance with its terms.

In March 2021, we delivered a notice of redemption to MGP covering approximately 37 million Operating Partnership units that we held which was satisfied with aggregate cash proceeds of approximately $1.2 billion, using cash on hand together with the proceeds from MGP's issuance of Class A shares.

In March 2021, we delivered a notice of redemption to MGP covering approximately 37 million MGP OP units that they held which was satisfied with aggregate cash proceeds of approximately $1.2 billion, using cash on hand together with the proceeds from MGP’s issuance of Class A shares.

See Note 13 in the accompanying consolidated financial statements for information regarding this transaction, which eliminates in consolidation.

In August 2021, we entered into an agreement with VICI and MGP whereby VICI will acquire MGP.

Pursuant to the agreement, MGP Class A shareholders will receive 1.366 shares of newly issued VICI stock in exchange for each MGP Class A share outstanding and we will receive 1.366 units of the new VICI OP in exchange for each Operating Partnership unit we hold.

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 will redeem the majority of our VICI OP units for cash consideration of $4.4 billion, with us retaining an approximate $370 million ownership interest in the VICI OP (based upon the close price of VICI stock as of August 3, 2021).

MGP’s Class B share that we hold will be cancelled.

As part of the transaction, we will enter into an amended and restated master lease with VICI.

The new master lease will have 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 transaction is expected to close in the first half of 2022, subject to customary closing conditions, regulatory approvals, and approval by VICI stockholders (which was obtained on October 29, 2021).

See “Item 1A.

Risk Factors — Risks Related to Our Announced Transactions — The VICI Transaction, The Cosmopolitan transaction, and The Mirage 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.”

In September 2021, we entered into an agreement to acquire the operations of The Cosmopolitan for cash consideration of $1.625 billion, subject to customary working capital adjustments.

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

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

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

Additionally, the lease will require us to spend a specified percentage of net revenues over a rolling 5-year period at the property on capital expenditures and for us to comply with certain financial covenants, which, if not met, would require us to maintain cash security or one or more letters of credit in favor of the landlord in an amount equal to rent for the succeeding 1-year period.

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

In September 2021, we completed the acquisition of the 50% ownership interest in CityCenter held by Infinity World for cash consideration of $2.125 billion.

In September 2021, we completed the acquisition of the remaining 50% ownership interest in CityCenter for cash consideration of $2.125 billion.

Upon the closing of the transaction, we own 100% of CityCenter and accordingly no longer account for our interest under the equity method of accounting, and we now consolidate CityCenter in our financial statements.

See Note 4 in the accompanying consolidated financial statements for information regarding this transaction.

In September 2021, we sold the real estate assets of Aria (including Vdara) for cash consideration of $3.89 billion and entered into a lease pursuant to which we lease back the real property.

The lease has an initial term of 30 years with three 10-year renewal periods, exercisable at our option.

The initial term of the lease provides for an initial annual rent of $215 million with a fixed 2% escalator for the first 15 years and, thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year, subject to a cap of 3%.

In addition, the lease obligates us to spend a specified percentage of net revenues at the properties on capital expenditures and that we comply with certain financial covenants, which, if not met, would require us to maintain cash security or provide a letter of credit in favor of the landlord in an amount equal to the rent for the succeeding 1-year period.

In September 2021, we sold the real estate assets of Aria and Vdara for cash consideration of $3.89 billion and entered into a lease pursuant to which we lease back the real property.

See Note 11 in the accompanying consolidated financial statements for information regarding this lease.

In October 2021, MGP acquired the real estate assets of MGM Springfield from us and MGM Springfield was added to the MGP master lease between us and MGP through which we lease back the real property.

Transactions with MGP, including transactions under the MGP master lease, have been eliminated in our consolidation of MGP.

Refer to Note 18 for further discussion of the master lease with MGP.

In December 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.

Pursuant to the agreement, Hard Rock is obligated to use its reasonable best efforts to obtain the requisite antitrust and gaming regulatory approvals.

The agreement may be terminated by either party if the closing has not occurred on or before December 13, 2022, which date may be extended by either party to March 13, 2023 under certain circumstances.

The agreement contemplates a reverse termination fee of $322.5 million that is payable by Hard Rock to us in the event that the parties are unable to obtain antitrust or gaming regulatory approval.

Upon closing, the master lease between us and VICI (or MGP in the event that the VICI Transaction is terminated) will be amended and restated to reflect a $90 million reduction in annual cash rent.

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

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

Transactions with MGP, including transactions under the master lease with MGP, have been eliminated in our consolidation of MGP.

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, 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 4 and Note 11 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 The Cosmopolitan.

See Note 4 and Note 11 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 that were awarded in the public tender that concluded in December 2022, 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 expired on December 31, 2022, thereby accelerating the recognition of amortization within our statements of operations.

See Note 1 and Note 7 in the accompanying consolidated financial statements for further discussion.

In December 2022, we were awarded a new gaming concession, which permits the operation of games of chance or other games in casinos in Macau, commencing on January 1, 2023.

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 4 in the accompanying consolidated financial statements for discussion of this transaction.

In December 2022, we completed the sale of the operations of The Mirage to Hard Rock for cash consideration of $1.075 billion, subject to certain purchase price adjustments.

At closing, the master lease with VICI was amended to remove The Mirage and reflect a $90 million reduction in annual cash rent.

Refer to Note 4 in the accompanying consolidated financial statements for discussion of this transaction.

In February 2023, we completed the sale of the operations of Gold Strike Tunica to CNE for cash consideration of $450 million, subject to certain purchase price adjustments.

At closing, the master lease with VICI was amended to remove Gold Strike Tunica and reflect a $40 million reduction in annual cash rent.

Refer to Note 4 in the accompanying consolidated financial statements for further discussion of this transaction.

Key Performance Indicators

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however, reduced gaming volumes as a result of the COVID-19 pandemic could cause volatility in our hold percentages;

• Hotel revenue indicators:

• 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 years ended December 31, 2021 and 2020 as a result of 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 years ended December 31, 2021 and 2020 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:

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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.

however, reduced gaming volumes as a result of the pandemic could cause volatility in MGM China’s hold percentages.

Results of Operations

The following discussion is based on our consolidated financial statements for the years ended December 31, 2021, 2020 and 2019.

Summary Operating Results

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Net income (loss) attributable to MGM Resorts International 1,473,093 1,254,370 (1,032,724)

Our domestic properties were temporarily closed due to COVID-19 on the dates shown below:

Las Vegas Strip Resorts (1)

Closure Date Initial Re-opening Date

Bellagio March 17, 2020 June 4, 2020

MGM Grand Las Vegas March 17, 2020 June 4, 2020

New York-New York March 17, 2020 June 4, 2020

Excalibur March 17, 2020 June 11, 2020

Luxor March 17, 2020 June 25, 2020

Mandalay Bay (2)

March 17, 2020 July 1, 2020

The Mirage (3)

March 17, 2020 August 27, 2020

March 17, 2020 September 30, 2020

Regional Operations

Gold Strike Tunica March 17, 2020 May 25, 2020

Beau Rivage March 17, 2020 June 1, 2020

MGM Northfield Park March 14, 2020 June 20, 2020

MGM National Harbor March 15, 2020 June 29, 2020

MGM Springfield (4)

March 15, 2020 July 13, 2020

Borgata March 16, 2020 July 26, 2020

MGM Grand Detroit (5)

March 16, 2020 August 7, 2020

Empire City March 14, 2020 September 21, 2020

(1) Aria was excluded from the table above, as it was not consolidated during 2020.

(2) Park MGM and Mandalay Bay’s hotel tower operations were closed midweek starting November 9, 2020 and November 30, 2020, respectively, and full week hotel tower operations resumed on March 3, 2021.

(3) The Mirage’s hotel tower operations were closed midweek beginning November 30, 2020.

The entire property was closed midweek starting January 4, 2021, and re-opened on March 3, 2021.

(4) MGM Springfield’s hotel was re-closed beginning November 2, 2020, and partial hotel operations resumed with midweek closures on March 5, 2021.

Certain of our properties or portions thereof were temporarily closed due to COVID-19 during the comparative period 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.

• The Mirage's hotel tower operations were closed midweek, with the entire property closed midweek starting January 4, 2021, and re-opened on March 3, 2021.

• MGM Springfield's hotel was closed and partial hotel operations resumed with midweek closures on March 5, 2021.

Full hotel operations resumed on December 13, 2021.

(5) MGM Grand Detroit re-closed on November 17, 2020 and re-opened on December 23, 2020, with the hotel tower operations resuming February 9, 2021.

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

Consolidated net revenues were $13.1 billion in 2022 compared to $9.7 billion in 2021, an increase of 36%.

The current year benefited from the inclusion of the net revenues of Aria subsequent to consolidation in September 2021 and the removal of mandated operational and capacity restrictions at our properties, as well as an increase in travel, while the prior year was negatively affected by temporary property closures at certain of our Las Vegas Strip Resorts and Regional Operations for a portion of the year due to the pandemic.

At MGM China, the prior year was negatively affected by both property closures in the first quarter and was also more significantly impacted by travel and entry restrictions in Macau than in the current year.

These factors resulted in a 111% increase in net revenues at our Las Vegas Strip Resorts, a 72% increase in net revenues at our Regional Operations, and an 84% increase in net revenues at MGM China.

Consolidated operating income was $2.3 billion for the year ended December 31, 2021 compared to a loss of $642 million in 2020, due primarily to the temporary property closures in the prior year as well as the inclusion of the operating income of Aria subsequent to consolidation in September 2021, as discussed above.

The current year included a gain on consolidation of CityCenter, net of $1.6 billion and the prior year included a $1.5 billion gain on REIT transactions, net and $26 million in restructuring costs.

In addition, corporate expense decreased $37 million compared to the prior year.

Corporate expense in the current year included $34 million in transaction costs, while the prior year included $44 million of CEO transition expense and $49 million of October 1 litigation settlement expense.

Included in the CEO transition expense is $20 million of stock compensation expense, of which approximately $13 million related to the modification and accelerated vesting of outstanding stock compensation awards.

Property transactions, net in the current year included a gain of $29 million related to a reduction in the estimate of contingent consideration related to the Empire City acquisition, a gain of $76 million relating to the sale of art, and an other-than-temporary impairment charge of $22 million related to an investment in an unconsolidated affiliate.

Property transactions, net in the prior year included a $64 million other-than-temporary non-cash impairment charge on an equity method investment and $17 million related to a loss on production show costs.

Depreciation expense decreased $60 million compared to the prior year primarily as a result of certain assets

becoming fully depreciated in the current year at MGM China, primarily at MGM Cotai.

General and administrative expense increased $385 million compared to the prior year due primarily to the prior year reflecting the temporary property closures, the inclusion of rent expense for the Aria lease, which commenced in September 2021, and also due to a full period of rent expense for the MGM Grand Las Vegas and Mandalay Bay lease in the current year, partially offset by realized benefits from our cost savings initiatives at our domestic properties.

The current year benefited from the inclusion of the net revenues of The Cosmopolitan and a full year of net revenues related to Aria, partially offset by the disposition of The Mirage.

The current year 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 year;

however, business volumes subsequently improved at our domestic resorts with a significant increase primarily at our Las Vegas Strip Resorts over the prior year, 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 years were significantly impacted by travel and entry restrictions in Macau with the current year being negatively affected by property closures and more significantly impacted by restrictions related to the COVID-19 pandemic compared to the prior year.

As a result, net revenues at our Las Vegas Strip Resorts increased 77%, Regional Operations increased 12%, and MGM China decreased 44% compared to the prior year.

Consolidated operating income was $1.4 billion in 2022 compared to $2.3 billion in 2021, a decrease of 37%.

The current year period benefited from an increase in gains from transactions and the increase in domestic business volumes discussed above, partially offset by an increase in general and administrative expense, an increase in depreciation and amortization expense, and a decrease in income from unconsolidated affiliates.

Gains from transactions in the current year included a $2.3 billion net gain related to the VICI Transaction recorded in gain on REIT transactions, net, and a $1.1 billion net gain related to the sale of the operations of The Mirage recorded within property transactions, net, while the prior year benefited from the $1.6 billion net gain on consolidation of CityCenter.

General and administrative expense increased $1.7 billion primarily due to an increase of rent expense of $1.1 billion related to the Aria and Vdara, VICI, and The Cosmopolitan leases, which commenced in September 2021, April 2022, and May 2022, respectively, as well as other increases, primarily in payroll costs.

Depreciation and amortization expense increased $2.3 billion compared to the prior year period, due primarily to an increase of $2.5 billion in amortization expense of the MGM Grand Paradise gaming concession as a result of the change in its useful life.

Net Revenues by Segment

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Food and beverage 429,188 307,750 184,153

Entertainment, retail and other 142,270 82,880 201,008

Entertainment, retail and other, and reimbursed costs 201,412 142,270 82,880

3,815,885 3,392,363 1,967,171

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Las Vegas Strip Resorts

Las Vegas Strip Resorts casino revenue was $1.5 billion in 2021, compared to $728 million in 2020, an increase of 113%, due primarily to the temporary property closures for a portion of 2020 and removal of mandated operational and capacity restrictions, as well as an increase in travel in the current year, and the inclusion of the operating results of Aria subsequent to consolidation in September 2021.

Las Vegas Strip Resorts casino revenue was $2.1 billion in 2022, compared to $1.5 billion in 2021, an increase of 36%, due primarily to the inclusion of The Cosmopolitan and a full year of casino revenue related to Aria, partially offset by the disposition of The Mirage, 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;

however, business volumes subsequently improved with a significant increase over the prior year, 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:

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Slots Hold % 9.3 % 9.4 % 9.4 %

Las Vegas Strip Resorts rooms revenue was $1.4 billion in 2021, compared to $663 million in 2020, an increase of 112%, due primarily to the temporary property closures for a portion of the prior year and removal of mandated operational and capacity restrictions, as well as an increase in travel in the current year, and the inclusion of the operating results of Aria subsequent to consolidation in September 2021.

Las Vegas Strip Resorts rooms revenue was $2.7 billion in 2022, compared to $1.4 billion in 2021, an increase of 95%.

The current year benefited from the inclusion of The Cosmopolitan and a full year of revenues from Aria, partially offset by the disposition of The Mirage.

Although operations were initially negatively affected by the omicron variant in the early part of the year, REVPAR increased significantly due to an increase in occupancy and ADR as business volume and travel activity improved in the current year.

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

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(1) Rooms that were out of service, including full and midweek closures, during the years ended December 31, 2021 and 2020 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 $1.0 billion in 2021, compared to $472 million in 2020, an increase of 115%, due primarily to the temporary closures at certain properties and operational and capacity restrictions in the prior year and removal of those restrictions in the current year as well as an increase in travel in the current year, and the inclusion of the operating results of Aria subsequent to consolidation in September 2021.

However, not all outlets were fully re-opened during the current year and the properties did not benefit from the removal of mandated operational and capacity restrictions as well as an increase in travel primarily until the latter part of the second quarter of the current year.

Las Vegas Strip Resorts entertainment, retail and other revenue was $770 million in 2021, compared to $383 million in 2020, an increase of 101%, due primarily to the temporary property closures for a portion of the prior year and removal of mandated operational and capacity restrictions as well as an increase in travel in the current year, and the inclusion of the operating results of Aria subsequent to consolidation in September 2021.

However, venue re-openings and events did not primarily occur until beginning in the latter part of the second quarter of the current year.

Las Vegas Strip Resorts food and beverage revenue was $2.1 billion in 2022, compared to $1.0 billion in 2021, an increase of 109%, and Las Vegas Strip Resorts entertainment, retail and other revenue was $1.4 billion in 2022, compared to $770 million in 2021, an increase of 87%, due primarily to the inclusion of The Cosmopolitan and a full year of revenues from Aria, partially offset by the disposition of The Mirage.

The current year was initially negatively affected by the omicron variant in the early part of the year;

however, business volume and travel activity subsequently improved with a significant increase over the prior year, 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 $2.7 billion in 2021, compared to $1.6 billion in 2020, an increase of 73%, due primarily to the temporary property closures in the prior year and removal of mandated operational and capacity restrictions and, to a lesser extent, increase in travel in the current year.

Regional Operations casino revenue was $2.9 billion in 2022, compared to $2.7 billion in 2021, an increase of 7%, due primarily to table game win increasing 18% over the prior year and slots win increasing 9% over the prior year, as the prior year 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:

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Slots Hold % 9.5 % 9.6 % 9.7 %

Regional Operations rooms revenue was $221 million in 2021, compared to $131 million in 2020, an increase of 69%, due primarily to the temporary property closures in the prior year and removal of mandated operational and capacity restrictions and, to a lesser extent, increase in travel in the current year.

Regional Operations food and beverage revenue was $308 million in 2021, compared to $184 million in 2020, an increase of 67%, due primarily to the temporary property closures in the prior year and removal of mandated operational and capacity restrictions beginning primarily in the second quarter of the current year.

Regional Operations entertainment, retail and other revenue was $142 million in 2021, compared to $83 million in 2020, an increase of 72%, due primarily to temporary property closures in the prior year and removal of mandated operational and capacity restrictions beginning primarily in the second quarter of the current year.

Regional Operations rooms revenue was $284 million in 2022, compared to $221 million in 2021, an increase of 29%, due to an increase in business volume and travel activity over the prior year, 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 $429 million in 2022, compared to $308 million in 2021, an increase of 39%, and Regional Operations entertainment, retail and other, and reimbursed costs revenue was $201 million in 2022, compared to $142 million in 2021, an increase of 42%, 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:

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Main Floor Table Games Win % 22.8 % 21.4 % 22.9 %

MGM China net revenues were $1.2 billion in 2021, compared to $657 million in 2020, an increase of 84%.

The prior year was negatively affected by both property closures in February 2020 and was more significantly impacted by travel and entry restrictions in Macau than in the current year.

MGM China net revenues were $674 million in 2022, compared to $1.2 billion in 2021, a decrease of 44%, due to the current and prior year being significantly impacted by travel and entry restrictions in Macau with the current year being negatively affected by COVID-19 related 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 $226 million, $245 million and $437 million for 2021, 2020 and 2019, respectively.

Reimbursed costs revenue for the year ended December 31, 2021 decreased compared to the prior year 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.

Corporate and other revenue in the current year 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).

Adjusted Property EBITDAR and Adjusted EBITDAR

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Adjusted Property EBITDAR is our reportable segment generally accepted accounting principles (“GAAP”) measure, which we utilize as the primary profit measure for our reportable segments.

See Note 17 to the accompanying consolidated financial statements and “Reportable Segment GAAP measure” below for additional information.

See Note 17 to the accompanying consolidated financial statements and

“Reportable Segment GAAP measure” below for additional information.

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

Year Ended December 31,

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Las Vegas Strip Resorts

Las Vegas Strip Resorts Adjusted Property EBITDAR was $1.7 billion in 2021 compared to $232 million in 2020.

Las Vegas Strip Resorts Adjusted Property EBITDAR was $3.1 billion in 2022 compared to $1.7 billion in 2021, an increase of 81%.

Las Vegas Strip Resorts Adjusted Property EBITDAR margin increased to 37.4% in 2022 compared to 36.7% in 2021.

The current year benefited from the increase in revenues, as discussed above, as well as realized benefits from our cost savings initiatives.

The current year benefited from the increase in revenues, partially offset by increases in contribution from lower-margin non-gaming outlets and venues and promotional activities.

Regional Operations

Regional Operations Adjusted Property EBITDAR was $1.2 billion in 2021 compared to $344 million in 2020.

Regional Operations Adjusted Property EBITDAR margin increased to 35.9% in 2021 compared to 17.5% in 2020 as the current year benefited from the increase in revenues, as discussed above, as well as realized benefits from our cost saving initiatives.

MGM China’s Adjusted Property EBITDAR was $25 million in 2021 compared to a loss of $194 million in 2020.

The increase was due primarily to the temporary property closures in the prior year as well as the prior year being more significantly impacted by travel and entry restrictions in Macau and other operational restrictions related to the pandemic than in the current year.

Regional Operations Adjusted Property EBITDAR was $1.3 billion in 2022 compared to $1.2 billion in 2021, an increase of 6%.

Regional Operations Adjusted Property EBITDAR margin decreased to 33.9% in 2022 compared to 35.9% in 2021.

The margin decrease was due primarily to an increase in contribution from lower margin non-gaming outlets and venues.

MGM China’s Adjusted Property EBITDAR was a loss of $203 million in 2022 compared to Adjusted Property EBITDAR of $25 million in 2021.

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

License fee expense was $12 million for 2022 and $21 million in the prior year.

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 periods presented below.

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

Year Ended December 31,

2022 2021 2020

(In thousands)

Las Vegas Strip Resorts net revenues $ 8,398,372 $ 4,737,185 $ 2,245,785

Acquisitions (1)

(2,226,495) (366,879) —

Dispositions (2)

(559,858) (419,063) (172,720)

Las Vegas Strip Resorts same-store net revenues $ 5,612,019 $ 3,951,243 $ 2,073,065

Las Vegas Strip Resorts Adjusted Property EBITDAR $ 3,142,308 $ 1,738,211 $ 232,188

Acquisitions (1)

(908,841) (159,930) —

Dispositions (2)

(159,267) (122,127) 18,354

Las Vegas Strip Resorts Same-Store Adjusted Property EBITDAR $ 2,074,200 $ 1,456,154 $ 250,542

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

(2) Excludes the net revenues and Adjusted Property EBITDAR of The Mirage

Operating Results – Details of Certain Charges

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(In thousands)

Loss related to sale of Circus Circus Las Vegas and adjacent land $ — $ — $ 220,294

Gain on sale of the operations of The Mirage $ (1,066,784) $ — $ —

Other property transactions, net 29,787 (67,736) 93,567

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See Note 16 to the accompanying consolidated financial statements for discussion of property transactions, net.

Operating Results – Income from Unconsolidated Affiliates

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

Income (loss) from Unconsolidated Affiliates

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

Year Ended December 31,

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CityCenter (through September 26, 2021) $ — $ 128,127 $ (29,753)

MGP BREIT Venture 155,817 136,755 —

VICI BREIT Venture (through April 29, 2022) 51,051 155,817 136,755

BetMGM (234,464) (211,182) (61,663)

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$ (160,213) $ 84,823 $ 42,938

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.

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 remaining 50% ownership interest in CityCenter 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 June 2021, CityCenter closed the sale of its Harmon land for $80 million on which it recorded a $30 million gain.

We recorded a $50 million gain, which included $15 million of our 50% share of the gain recorded by CityCenter and $35 million representing the reversal of certain basis differences in 2021.

Our share of CityCenter’s operating income, including certain basis difference adjustments, was $128 million for the current year period through September 26, 2021 compared to our share of CityCenter's operating loss of $30 million in 2020, due primarily to the temporary property closures in the prior year and removal of mandated operational and capacity restrictions, an increase in travel beginning primarily in the second quarter of the current year, and the gain related to the sale of its Harmon land in the current year, as discussed above, partially offset by a shorter comparative period in the current year given that, as of September 2021, we no longer account for our interest in CityCenter under the equity method of accounting, as discussed above.

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 the VICI BREIT Venture.

Non-operating Results

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Gross interest expense was $596 million in 2022 compared to $800 million in 2021.

The increase in gross interest expense was due primarily to an increase in average debt outstanding related to senior notes due to the issuances by us, the Operating Partnership and MGM China in 2020 and 2021, partially offset by a decrease in the weighted average interest rate of the senior notes.

See Note 9 to the accompanying consolidated financial statements for additional discussion on long-term debt and see “Liquidity and Capital Resources” for additional discussion on issuances and repayments of long-term debt and other sources and uses of cash.

Other income, net was $66 million in 2021 compared to other expense, net of $89 million in 2020.

The current year included a $28 million net gain on change in fair value of an equity instrument, a $39 million gain on the Operating Partnership’s unhedged interest rate swaps, and $22 million of interest income, partially offset by $13 million of foreign currency remeasurement losses primarily related to MGM China’s U.S.

dollar-denominated senior notes.

The prior year included a $109 million loss incurred on the early retirement of debt related to our senior notes and the termination of our revolving facility, as well as an $18 million loss incurred on the early retirement of debt related to the Operating Partnership’s repayment of its term loan A facility and its term loan B facility, partially offset by $9 million of foreign currency remeasurement gains primarily related to MGM China’s U.S.

dollar-denominated senior notes, and $32 million in interest income.

Income taxes.

The decrease from the prior year period 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 9 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 $83 million in 2022 compared to $66 million in 2021.

The current and prior year included interest income of $87 million and $22 million, respectively, and a net gain on equity investments of $10 million and $28 million, respectively.

The current year income was partially offset by a $12 million loss relating to interest rate swaps, while the prior year included a $39 million gain on interest rate swaps.

The following table summarizes information related to our income taxes:

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Federal, state and foreign income taxes paid, net of refunds $ 22,955 $ 43,018 $ 8,543

Our effective rate for 2022 was unfavorably impacted by losses in Macau that we could not benefit and an increase in state deferred tax liabilities as a result of the New Jersey income tax regulation issuance, partially offset by a decrease in Macau deferred tax liabilities resulting from the acceleration of amortization of the MGM Grand Paradise gaming subconcession and the extension of the exemption from the Macau 12% complementary tax to the end of the year as well as the impact of a decrease in state deferred tax liabilities as a result of the VICI Transaction.

Our effective rate for 2021 was favorably impacted by the permanent exclusion of a portion of the gain on consolidation of CityCenter, partially offset by the unfavorable impact of losses in Macau that we could not benefit.

The effective rate for 2020 was unfavorably impacted by losses in Macau that we could not benefit and adjustments to valuation allowances for Macau deferred tax assets and foreign tax credits, partially offset by tax benefit resulting from carrying back net operating losses to tax years with a higher tax rate than is currently in effect.

Cash taxes paid increased in 2021 compared to 2020 primarily due to an increase in federal income taxes paid resulting from increased U.S.

taxable income following the recovery of the business from the impacts of COVID-19.

Cash taxes paid decreased in 2022 compared to 2021 primarily due to refunds received from carryback claims related to losses incurred in 2020.

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, restructuring costs (which represents costs related to severance, accelerated stock compensation expense, and consulting fees directly related to the operating model component of the MGM 2020 Plan), rent expense associated with triple-net operating and ground leases, income from unconsolidated affiliates related to investments in real estate ventures, property transactions, net, and also excludes gain on consolidation of CityCenter, net, gain related to CityCenter's sale of Harmon land recorded within income from unconsolidated affiliates and corporate expense (which includes CEO transition expense and October 1 litigation settlement) and stock compensation expense, which are not allocated to each operating segment, and rent expense related to the master lease with MGP that eliminates in consolidation.

Adjusted Property EBITDAR is a measure defined as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening and start-up expenses, property transactions, net, gain on REIT transactions, net, restructuring costs (which represents costs related to severance, accelerated stock compensation expense, and consulting fees directly related to the operating model component of the MGM 2020 Plan), 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 (which includes CEO transition expense and October 1 litigation settlement) 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.

“Adjusted Property EBITDAR margin” is Adjusted Property EBITDAR divided by related segment net revenues.

Non-GAAP Measure

“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, CEO transition expense, October 1 litigation settlement, restructuring costs (which represents costs related to severance, accelerated stock compensation expense, and consulting fees directly related to the operating model component of the MGM 2020 Plan), 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 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.

Non-GAAP Measures

“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 and to exclude the Adjusted Property EBITDAR of disposed operating segments from the beginning of the reporting period through the date of disposition.

Accordingly, we have excluded the Adjusted Property EBITDAR of The Cosmopolitan for periods subsequent to its acquisition on May 17, 2022, Aria for periods subsequent to its acquisition on September 27, 2021, and The Mirage for the periods prior to its disposition on December 19, 2022 in Same-Store Adjusted Property EBITDAR for the periods indicated, as applicable.

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 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, gain on REIT transactions, net, gain on consolidation of CityCenter, net, CEO transition expense, October 1 litigation settlement, restructuring costs (which represents costs related to severance, accelerated stock compensation expense, and consulting fees directly related to the operating model component of the MGM 2020 Plan), 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.

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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.

However, as discussed herein, Adjusted EBITDAR should not be viewed as a measure of overall operating performance, considered in isolation, or as an alternative to net income, because this measure is not

presented on a GAAP basis and exclude certain expenses, including the rent expense associated with our triple-net operating and ground leases, and are provided for the limited purposes discussed herein.

Adjusted EBITDAR should not be construed as an alternative to operating income or net income, as an indicator of our performance;

or as an alternative to cash flows from operating activities, as a measure of liquidity;

or as any other measure determined in accordance with GAAP.

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.

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

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

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 us, as well as comparing our 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.

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

Year Ended December 31,

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Net income (loss) attributable to MGM Resorts International $ 1,473,093 $ 1,254,370 $ (1,032,724)

Net income (loss) attributable to noncontrolling interests (45,981) (287,183) 165,234

Net loss attributable to noncontrolling interests (1,266,362) (45,981) (287,183)

Net income (loss) 206,731 1,208,389 (1,319,907)

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Property transactions, net (1,036,997) (67,736) 93,567

Depreciation and amortization 3,482,050 1,150,610 1,210,556

Gain on REIT transactions, net (2,277,747) — (1,491,945)

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

Depreciation and amortization 1,150,610 1,210,556 1,304,649

CEO transition expense — — 44,401

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

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.

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 accounted for the master lease with MGP as an operating lease with the rent expense reflected within the summarized financial information.

Additionally, assets held for

sale and liabilities related to assets held for sale associated with Gold Strike Tunica are included within current assets and other current liabilities, respectively, within the summarized financial information.

December 31, 2022

Balance Sheet (In thousands)

Current assets $ 6,733,048

Investment in the MGP Operating Partnership 2,284,222

Intercompany accounts due from non-guarantor subsidiaries —

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

Other long-term assets 28,802,794

MGP master lease operating lease liabilities – current 154,287

Other current liabilities 3,892,694

Intercompany accounts due to non-guarantor subsidiaries 16,697

MGP master lease operating lease liabilities – noncurrent 7,083,505

Other long-term liabilities 28,285,295

Year Ended December 31, 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 $1.4 billion in 2021 compared to cash used in operating activities of $1.5 billion in 2020.

The change from the prior year was due primarily to the increase in Adjusted Property EBITDAR discussed within the results of operations section above, and due to the prior year being negatively affected by a change in working capital related to gaming and non-gaming deposits, gaming taxes and other gaming liabilities, and payroll related liabilities as a result of the COVID-19 pandemic, partially offset by an increase in triple-net lease rent payments and cash paid for interest and taxes.

Cash provided by operating activities was $1.8 billion in 2022 compared to $1.4 billion in 2021.

The change from the prior year 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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Cash provided by investing activities was $2.1 billion in 2022 compared to $1.5 billion in 2021 .

In 2021, we received $3.9 billion in net cash proceeds from the sale of the real estate of Aria (including Vdara), received $107 million in net proceeds from the sale of property and equipment, primarily related to the sale of art, which were partially offset by our payments of $1.8 billion to acquire CityCenter, net of cash acquired, $491 million in capital expenditures, as further discussed below, and contributions of $225 million to BetMGM.

In comparison, in the prior year we received $2.5 billion in net cash proceeds from the Mandalay Bay and MGM Grand Las Vegas real estate transaction, which were partially offset by $271 million in capital expenditures and $80 million in contributions to BetMGM.

In the prior year period, distributions from unconsolidated affiliates included $51 million related to our share of a distribution paid by CityCenter.

In 2022, we received $4.4 billion in net cash proceeds related to the VICI Transaction and $1.1 billion in net cash proceeds related to the sale of the operations of The Mirage, which were partially offset by cash paid of $1.6 billion to acquire The Cosmopolitan, net of cash acquired, cash paid of $279 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 $765 million in capital expenditures, as further discussed below, contributions of $225 million to our unconsolidated affiliate, BetMGM, and $282 million in net investments in debt securities .

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, received $107

million in net proceeds from the sale of property and equipment, primarily related to the sale of art, which were partially offset by our payments of $1.8 billion to acquire CityCenter, net of cash acquired, $491 million in capital expenditures, as further discussed below, and contributions of $225 million to BetMGM.

Capital Expenditures

In 2022, we made capital expenditures of $765 million, of which $31 million related to MGM China.

Capital expenditures at MGM China included $49 million primarily related to construction of the Emerald Tower project at MGM Cotai and $19 million related to projects at MGM Macau.

Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate entities of $423 million primarily relate to expenditures in information technology and room remodels.

Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate and other entities of $734 million were primarily related to expenditures in information technology, room remodels, and convention center remodels.

In 2021, we made capital expenditures of $491 million, of which $68 million related to MGM China.

Capital expenditures at MGM China included $95 million primarily related to construction close-out and projects at MGM Cotai and $13 million related to projects at MGM Macau.

Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate entities of $162 million included expenditures relating to information technology, health and safety initiatives, and various room, restaurant, and entertainment venue remodels.

Capital expenditures at MGM China included $49 million primarily related to construction of the Emerald Tower project at MGM Cotai and $19 million related to projects at MGM Macau.

Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate entities of $423 million were primarily related to expenditures in information technology and room remodels.

Financing activities.

Cash used in financing activities was $2.8 billion in 2021 compared to cash provided by financing activities of $2.1 billion in 2020.

In 2021 , we had net repayments of debt of $1.3 billion, as further discussed below, distributed $324 million to noncontrolling interest owners, and we repurchased $1.8 billion of our common stock, partially offset by net proceeds received of $793 million from the issuance of MGP's Class A shares.

In comparison, in the prior year period, we received net proceeds from the incurrence of the bridge loan facility in connection with the MGP BREIT Venture Transaction of $1.3 billion, net proceeds of $525 million from MGP’s Class A share issuances, net debt borrowings of $1.1 billion, as further discussed below, repurchased $354 million of our common stock, distributed $286 million to noncontrolling interest owners, and paid $78 million in dividends to our shareholders .

Cash used in financing activities was $3.0 billion in 2022 compared to $2.8 billion in 2021.

In 2022 , we had net borrowings of debt of $78 million, as further discussed below, distributed $211 million to noncontrolling interest owners, and we repurchased $2.8 billion of our common stock.

In comparison, in the prior year period, we had net repayments of debt of $1.3 billion, as further discussed below, distributed $324 million to noncontrolling interest owners, and we repurchased $1.8 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

In 2022, we had net borrowings of debt of $78 million, which consisted of 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 $224 million on MGM China’s second revolving credit facility t o 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, partially offset by the repayment of $1.0 billion of aggregate principal amount of our 7.75% senior notes due 2022 at maturity, and the repayments of $30 million of LeoVegas senior unsecured notes and $40 million of LeoVegas’ revolving credit facility due to change-in-control provisions.

In 2021, we had net repayments of debt of $1.3 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, and net repayments of $407 million on MGM China’s first 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% and net draws of $40 million on the Operating Partnership's revolving credit facility, of which $35 million was used in connection with MGP's acquisition of MGM Springfield with the remainder used to fund the Operating Partnership's and MGP's distribution and dividend payments.

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% and net draws of $40 million on MGP OP's revolving credit facility, of which $35 million was used in connection with MGP’s acquisition of MGM Springfield with the remainder used to fund MGP OP’s and MGP’s distribution and dividend payments.

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.

In 2020, we had net proceeds from the incurrence of the bridge loan facility in connection with the MGP BREIT Venture Transaction of $1.3 billion and net debt borrowings of $1.1 billion, which consisted of net borrowings on MGM China’s credit facility of $103 million, our issuance of $750 million of 4.75% senior notes and $750 million of 6.75% senior notes, the Operating Partnership’s issuance of $750 million of 3.875% senior notes and $800 million of 4.625% senior notes, and MGM China’s issuance of $500 million of 5.25% senior notes, partially offset by the tender of $750 million of our senior notes and the corresponding $97 million of tender offer costs, and the net repayment of $1.7 billion on the Operating Partnership's senior credit facility consisting of the repayment of $1.3 billion of its term loan B facility in full using the proceeds of the $1.3 billion bridge loan facility, which was then assumed by MGP BREIT Venture, the repayment of its $399 million term loan A facility in full using the net proceeds from MGP’s settlement of forward equity agreements, partially offset by a net draw of $10 million on its revolving credit facility.

In March 2020, with certain of the proceeds from the MGP BREIT Venture Transaction, we completed cash tender offers for an aggregate amount of $750 million of our senior notes, comprised of $325 million principal amount of our outstanding 5.75% senior notes due 2025, $100 million principal amount of our outstanding 4.625% senior notes due 2026, and $325 million principal amount of our outstanding 5.5% senior notes due 2027.

In May 2020, we issued $750 million in aggregate principal amount of 6.750% senior notes due 2025.

The proceeds were used to further increase our liquidity position.

In June 2020, the Operating Partnership issued $800 million in aggregate principal amount of 4.625% senior notes due 2025.

The proceeds were used to repay borrowings on the Operating Partnership’s senior credit facility, which were used to fund the May 2020 redemption of $700 million of Operating Partnership units held by us.

In June 2020, MGM China issued $500 million in aggregate principal amount of 5.25% senior notes due 2025.

The proceeds were used to partially repay amounts outstanding under the MGM China credit facility and for general corporate purposes.

In October 2020, we issued $750 million in aggregate principal amount of 4.75% senior notes due 2028.

The proceeds were used for general corporate purposes.

In November 2020, the Operating Partnership issued $750 million in aggregate principal amount of 3.875% senior notes due 2029.

The proceeds were used for general corporate purposes, which included the December 2020 redemption of $700 million of the Operating Partnership units held by us.

Dividends, Distributions to Noncontrolling Interest Owners and Share Repurchases

In 2021, we repurchased and retired $1.8 billion of our common stock pursuant to our May 2018 $2.0 billion and February 2020 $3.0 billion stock repurchase programs.

As a result of those repurchases, we completed our May 2018 $2.0 billion stock repurchase program, and the remaining availability under the February 2020 $3.0 billion stock repurchase program was $1.3 billion as of December 31, 2021.

In 2020, we repurchased and retired $354 million of our common stock pursuant to our May 2018 $2.0 billion stock repurchase program.

In 2022, we repurchased and retired $2.8 billion of our common stock pursuant to our stock repurchase plans.

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

As of December 31, 2022, the remaining availability under the March 2022 $2.0 billion stock repurchase plan was $475 million.

Additionally, in February 2023, we announced that the Board of Directors authorized a $2.0 billion stock repurchase plan.

In 2021, we repurchased and retired $1.8 billion of our common stock pursuant to our May 2018 $2.0 billion and February 2020 $3.0 billion stock repurchase plans.

In connection with those repurchases, we completed our May 2018 $2.0 billion stock repurchase plan.

In March 2022, June 2022, September 2022, and December 2022, we paid dividends of $0.0025 per share, totaling $4 million for 2022.

In March 2020, we paid a dividend of $0.15 per share, and in June 2020, September 2020 and December 2020, we paid dividends of $0.0025 per share, totaling $78 million for 2020.

In 2020, MGM China paid the final dividend for 2019 of $41 million, of which we received $23 million and noncontrolling interests received $18 million.

The Operating Partnership paid the following distributions to its partnership unit holders during 2021 and 2020:

In March 2021, June 2021, September 2021, and December 2021, we paid dividends of $0.0025 per share, totaling $5 million for 2021.

MGP OP paid the following distributions to its partnership unit holders during 2022 and 2021:

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

• $602 million of distributions paid in 2020, of which we received $358 million and MGP received $2 44 million, which MGP concurrently paid as a dividend to its Class A shareholders.

• $545 million of distributions paid in 2021, of which we received $243 million and MGP receiv ed $302 million, which MGP concurrently paid as a dividend to its Class A shareholders.

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 2020 and 2021 and may continue to impact our business in 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 for cash consideration of $1.625 billion, as discussed further in Note 1 .

As of December 31, 2021, we had cash and cash equivalents of $4.7 billion, of which MGM China held $399 million and the Operating Partnership held $8 million.

In addition to our cash and cash equivalent balance, we have significant holdings:

a 41.5% economic interest in MGP (refer to Note 1 for discussion on our agreement entered into in August 2021 regarding the VICI Transaction) and an approximate 56% interest in MGM China.

At December 31, 2021, we had $12.9 billion in principal amount of indebtedness, including $360 million outstanding under the $1.25 billion MGM China first revolving credit facility and $50 million outstanding under the $1.35 billion Operating Partnership 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 significant outstanding debt, interest payments, rent payments, and contractual obligations in addition to planned capital expenditures and commitments .

As of December 31, 2022, we had cash and cash equivalents of $5.9 billion, of which MGM China held $860 million.

In addition to the cash and cash equivalents, MGM China also had approximately $124 million of restricted cash.

At December 31, 2022, we had $8.8 billion in principal amount of indebtedness, including $1.2 billion outstanding under MGM China’s first revolving credit facility and $224 million outstanding under MGM China’s second revolving credit facility.

No amounts were drawn on our revolving credit facility.

We have $1.3 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 2021, MGM China further amended each of its first revolving credit facility and its second revolving credit facility to provide for waivers of the maximum leverage ratio and minimum interest coverage ratio through the fourth quarter of 2022.

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.

As of December 31, 2021, our expected cash interest payments, excluding MGP and MGM China, for 2022, 2023, and 2024 are approximately $300 million, $225 million, and $190 million, respectively, and our expected cash interest payments on a consolidated basis, which includes MGP if the VICI Transaction does not close and MGM China, for 2022, 2023, and 2024, are approximately $715 million, $625 million, and $585 million, respectively.

We are also required as of December 31, 2021 to make annual cash rent payments of $1.6 billion, in the aggregate, under the 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.

We have planned capital expenditures in 2022 of approximately $775 million to $815 million domestically and approximately $110 million to $130 million at MGM China, 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 properties, on capital expenditures.

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.

Our estimated cash interest payments, based on principal amounts of debt outstanding and the contractual maturity dates and interest rates as of December 31, 2022, for 2023, 2024, and 2025 are approximately $230 million, $190 million, and $145 million, respectively, excluding MGM China, and approximately $480 million, $355 million, and $235 million, respectively, on a consolidated basis, which includes MGM China.

We are also required as of December 31, 2022 to make annual cash rent payments of $1.7 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 11 for discussion of our leases and lease obligations.

We have planned capital expenditures in 2023 of approximately $795 million to $835 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 an estimate of approximately $110 million to $150 million at MGM China.

Refer to Note 12 for discussion of MGM Grand Paradise’s commitment to investment in gaming and non-gaming projects and the development of international tourist markets as well as other contractual obligations pursuant to its gaming concession.

The estimated amount of the investment for 2023 that relates to capital projects is included within the capital expenditure amounts above.

We additionally have planned contributions to BetMGM in 2023 of approximately $75 million.

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

We continue to explore potential development or investment opportunities, such as a commercial gaming facility in New York and our venture in Japan, which may require cash commitments in the future.

We also expect to continue to repurchase shares pursuant to our share repurchase plans.

Subsequent to December 31, 2022, we repurchased approximately 6 million shares of our common stock at an average price of $38.12 per share for an aggregate amount of $210 million .

Repurchased shares were retired.

In January 2022, the Operating Partnership paid $141 million of distributions to its partnership unit holders, of which we received $59 million and MGP received $82 million, which MGP concurrently paid as a dividend to its Class A shareholders.

On February 9, 2022 , our Board of Directors approved a quarterly dividend of $0.0025 per share.

The dividend will be payable on March 15, 2022 to holders of record on March 10, 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 i n 2020 and 2021 and may continue to impact our business 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.

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.

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.

On February 8, 2023, we announced that the Board of Directors has determined to suspend the ongoing dividends in light of our current preferred method of returning value to shareholders through our share repurchase plan.

To the extent we determine to reinstate the dividend in the 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 .

For additional information related to our long-term obligations, refer to the maturities of long-term debt table in Note 9 and the lease liability maturity table in Note 11.

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To prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, we must make estimates and assumptions that affect the amounts reported in the consolidated financial statements.

We regularly evaluate these estimates and assumptions, particularly in areas we consider to be critical accounting estimates, where the estimates and assumptions involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material effect on our financial condition or results of operations.

We regularly evaluate these estimates and assumptions, particularly in areas we consider to be critical accounting estimates, where the estimates and assumptions involve both a significant level of estimation uncertainty due to the levels of subjectivity and judgment necessary to account for the matters or the susceptibility of such matters to change is high and also have had or are reasonably likely to have a material effect on our financial condition or results of operations.

However, by their nature, judgments are subject to an inherent degree of uncertainty and therefore actual results can differ from our estimates.

Loss Reserve for Casino Accounts Receivable

Loss Reserve for Casino Receivables

Marker play represents a significant portion of the table games volume at certain of our Las Vegas resorts.

Our other casinos do not emphasize marker play to the same extent, although we offer markers to customers at those casinos as well.

MGM China extends credit to certain in-house VIP gaming customers and, historically, to gaming promoters.

MGM China extends credit to certain in-house VIP gaming customers.

We maintain strict controls over the issuance of markers and aggressively pursue collection from our customers who fail to pay their marker balances timely.

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MGM China performs background checks and investigates credit worthiness prior to issuing credit.

Refer to Note 2 for further discussion of our casino receivables and those due from customers residing in foreign countries.

We maintain a loss reserve for casino accounts at all of our operating casino resorts.

The provision for doubtful accounts, an operating expense, increases the loss reserve.

We regularly evaluate the loss reserve for casino accounts.

At domestic resorts where marker play is not significant, the loss reserve is generally established by applying standard reserve percentages to aged account balances, which is supported by relevant historical analysis and any other known information such as the current economic conditions that could drive losses.

Expected credit losses, an operating expense, increases the loss reserve.

We regularly evaluate the loss reserve for casino accounts, which involves judgments and assumptions about realizability, current and expected future economic conditions in various geographies, and business conditions.

At domestic resorts where marker play is not significant, the loss reserve is generally established by applying standard reserve percentages to aged account balances, which is supported by ongoing evaluation of relevant historical analysis and any other known information such as the current economic conditions that could drive losses.

At domestic resorts where marker play is significant, we apply standard reserve percentages to aged account balances under a specified dollar amount and specifically analyze the collectability of each account with a balance over the specified dollar amount, based on the age of the account, the customer’s current and expected future financial condition, collection history, and current and expected future economic conditions.

MGM China specifically analyzes the collectability of casino receivables on an individual basis taking into account the age of the account, the financial condition and the collection history of the customer or, historically, the gaming promoter.

In addition to enforceability issues, the collectability of unpaid markers given by foreign customers at our domestic resorts is affected by a number of factors, including changes in currency exchange rates and economic conditions in the customers’ home countries.

Because individual customer account balances can be significant, the loss reserve and the provision can change significantly between periods, as information about a certain customer becomes known or as changes in a region’s economy occur.

The following table shows key statistics related to our casino receivables, net of discounts:

Approximately $54 million and $63 million of casino receivables and $25 million and $31 million of the loss reserve for casino receivables relate to MGM China at December 31, 2022 and 2021, respectively.

The following table shows key statistics related to our casino receivables:

(In thousands)

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Loss reserve as a percentage of casino accounts receivable 20 % 31 %

Approximately $63 million and $54 million of casino receivables and $31 million and $18 million of the loss reserve for casino accounts receivable relate to MGM China at December 31, 2021 and 2020, respectively.

The loss reserve as a percentage of casino accounts receivable decreased in the current year due to a decrease in specific reserves at our domestic resorts, as well as the i nclusion of Aria in the current year, which had a lower loss reserve compared to our other domestic resorts due to the age of its outstanding receivables, partially offset by an increase in the loss reserve at MGM China primarily due to an increase in its specific reserves.

At December 31, 2021, a 100 basis-point change in the loss reserve as a percentage of casino accounts receivable would change income before income taxes by $4 million.

Fixed Asset Capitalization and Depreciation Policies

The loss reserve as a percentage of casino accounts receivable decreased in the current year primarily due to a decrease in the age of outstanding receivables.

Because individual customer account balances can be significant, the loss reserve and credit losses can change significantly between periods, as information about a certain customer becomes

known or as changes in economic conditions occur.

At December 31, 2022, a 100 basis-point change in the loss reserve as a percentage of casino receivables would change income before income taxes by $5 million.

Fixed Asset Capitalization

Property and equipment are stated at cost.

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Maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred.

Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets.

When we construct assets, we capitalize direct costs of the project, including fees paid to architects and contractors, property taxes, and certain costs of our design and construction subsidiaries.

In addition, interest cost associated with major development and construction projects is capitalized as part of the cost of the project.

Interest is typically capitalized on amounts expended on the project using the weighted average cost of our outstanding borrowings.

Capitalization of interest starts when construction activities begin and ceases when construction is substantially complete, or development activity is suspended for more than a brief period.

We must make estimates and assumptions when accounting for capital expenditures.

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Historically, undiscounted cash flows of our significant operating asset groups have exceeded their carrying values by a substantial margin.

During 2019, we recorded a non-cash impairment charge relating to the carrying value of Circus Circus Las Vegas and adjacent land.

Refer to Note 16 for further discussion.

We review indefinite-lived intangible assets at least annually and between annual test dates in certain circumstances.

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For our 2022 annual impairment tests, we utilized the option to perform a qualitative (“step zero”) analysis for certain of our indefinite-lived intangibles and concluded it was more likely than not that the fair values of such intangibles exceeded their carrying values by a substantial margin.

We elected to perform a quantitative analysis for the MGM Northfield Park gaming license in 2021 primarily using the discounted cash flow approach, for which the fair value exceeded its carrying value by a substantial margin.

As discussed below, management makes significant judgments and estimates as part of these analyses.

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None of our reporting units incurred any goodwill impairment charges in 2022.

For our 2021 annual impairment tests, we utilized the option to perform a step zero analysis for certain of our reporting units and concluded it was more likely than not that the fair values of such reporting units exceeded their carrying values by a substantial margin.

As discussed below, management makes significant judgments and estimates as part of these analyses.

If future operating results of our reporting units do not meet current expectations it could cause carrying values of our reporting units to exceed their fair values in future periods, potentially resulting in a goodwill impairment charge.

For our 2022 annual impairment tests, we either utilized the option to perform a step zero analysis for certain of our reporting units and concluded it was more likely than not that the

fair values of such reporting units exceeded their carrying values by a substantial margin or we elected to perform a quantitative analysis and the fair value of the reporting units exceeded their carrying value by a substantial margin.

There are several estimates inherent in evaluating these assets for impairment.

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 multiples, capitalization rates and the discount rates used in the impairment tests are highly judgmental and dependent in large part on expectations of future market conditions.

The value of our Empire City reporting unit is dependent upon us obtaining a commercial gaming license and the timing thereof, as well as other assumptions that may change throughout the bidding process as additional information becomes known, which includes the size, scope, and timing of constructing an expanded facility, the potential for and timing of a transaction for the monetization of the improvements and the proceeds and any rent associated with such transaction, and the incremental cash flows generated by the expanded facility, such as license payments and other payments to government entities, gaming tax rates, and forecasted revenue and expenses from operations.

While the quantitative impairment analysis performed in 2022 resulted in the fair value of Empire City exceeding its carrying value by a substantial margin based upon the assumptions as of the date of the analysis, any of these assumptions could change materially as a result of new or additional information and, if they do, could result in an impairment of up to the full amount of the reporting unit’s goodwill of $256 million.

See Note 2 and Note 7 to the accompanying consolidated financial statements for further discussion of goodwill and other intangible assets.

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, which occurred on December 31, 2022, and provided for other material changes to the rights and obligations provided for under new gaming concessions, we determined that MGM Grand Paradise’s gaming subconcession and new gaming concession are two separate units of account.

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

The gaming subconcession was an entity-wide asset of MGM China as the benefit of the right to conduct gaming provided by the gaming subconcession was 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.

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

accordingly, no impairment was indicated.

There were 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 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 ended on December 31, 2022.

Accordingly, amortization of the MGM Grand Paradise gaming subconcession was 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.

Impairment of Investments in Unconsolidated Affiliates

See Note 2 to the accompanying consolidated financial statements for discussion of our evaluation of other-than-temporary impairment of investments in unconsolidated affiliates.

During 2021 and 2020, we recorded $22 million and $64 million, respectively, in other-than-temporary impairment charges on equity method investments.

During 2022, our investments in unconsolidated affiliates had no material impairments.

In 2021 and 2020, we recorded $22 million and $64 million, respectively, in other-than-temporary impairment charges on equity method investments.

Refer to Note 6 for further discussion.

Our investments in unconsolidated affiliates had no material impairments in 2019.

We are subject to income taxes in the U.S.

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This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the scheduled reversal of deferred tax liabilities, the duration of statutory carryforward periods, and tax planning strategies.

We recorded a valuation allowance on the net deferred tax assets of our domestic jurisdictions of $2.7 billion as of both December 31, 2021 and 2020, and a valuation allowance on certain net deferred tax assets of foreign jurisdictions of $149 million and $156 million as of December 31, 2021 and 2020, respectively.

We recorded a valuation allowance on the net deferred tax assets of our domestic jurisdictions of $2.6 billion and $2.7 billion as of December 31, 2022 and 2021, respectively, and a valuation allowance on certain net deferred tax assets of foreign jurisdictions of $245 million and $149 million as of December 31, 2022 and 2021, respectively.

We reassess the realization of deferred tax assets each reporting period.

In the event we were to determine that it is more likely than not that we will be unable to

realize all or part of our deferred tax assets in the future, we would increase the valuation allowance and recognize a corresponding charge to earnings or other comprehensive income in the period in which we make such a determination.

In the event we were to determine that it is more likely than not that we will be unable to realize all or part of our deferred tax assets in the future, we would increase the valuation allowance and recognize a corresponding charge to earnings or other comprehensive income in the period in which we make such a determination.

Likewise, if we later determine that we are more likely than not to realize the deferred tax assets, we would reverse the applicable portion of the previously recognized valuation allowance.

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What changed 10-K

Item 7. Management’s Discussion and Analysis