What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-01 compared with 2022-11-02 · 139 added, 288 removed, 252 unchanged (63% of the section changed)

9 unchanged sentences

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

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, a consolidated subsidiary, as well as through BetMGM, an unconsolidated affiliate.

Impact of COVID-19 - Update

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

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

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

Our properties in Macau were open during the first half of 2022, however, gaming operations were temporarily suspended on July 11, 2022 due to an increase in the number of COVID-19 cases in Macau and resumed on July 23, 2022, subject to certain continuing health safeguards.

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

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

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

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

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

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, and on February 6, 2023 all remaining COVID-19 travel restrictions were removed.

As of March 31, 2023, all of our properties were open and not subject to any COVID-19 related operating restrictions.

Other Developments

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

In May 2022, we acquired the operations of The Cosmopolitan for cash consideration of $1.625 billion, plus working capital adjustments for a total purchase price of approximately $1.7 billion.

Additionally, we entered into a lease

agreement for the real estate assets of The Cosmopolitan.

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

In June 2022, the Macau government enacted a new gaming law that provides for material changes to the legal form of gaming concessions in Macau, including discontinuing and prohibiting gaming subconcessions subsequent to their expiration, and also includes material changes to the rights and obligations provided for under the new gaming concessions to be awarded in the upcoming public tender, such as limiting the term of concessions to a maximum of 10 years.

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

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

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

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

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

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

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

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

Pending Transactions

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

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

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

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

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

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

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

In April 2023, the Japanese government officially certified the Area Development Plan (“ADP”) previously submitted by the city/prefecture of Osaka, Japan and our 50% owned venture.

Agreements with Osaka on the construction of the planned integrated resort are required to be finalized within 90 days of the ADP approval.

In April 2023, LeoVegas entered into an agreement to acquire the majority ownership of digital gaming developer, Push Gaming Holding Limited.

The transaction is subject to regulatory and customary approvals and is expected to close in the third quarter of 2023.

Key Performance Indicators

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• Gaming revenue indicators:

table games drop and slots handle (volume indicators);

table games drop and slot handle (volume indicators);

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

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

Our normal table games hold percentage at our Las Vegas Strip Resorts is in the range of 25.0% to 35.0% of table games drop for baccarat and 19.0% to 23.0% for non-baccarat;

• 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 nine months ended September 30, 2021 as a result of property closures due to the pandemic were excluded from the available room count when calculating hotel occupancy and REVPAR.

Additional key performance indicators at MGM China are:

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

Turnover provides a basis for measuring VIP casino win percentage.

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

Results of Operations

Summary Operating Results

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

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

• 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.

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

The following table summarizes our consolidated operating results:

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(In thousands)

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Net income (loss) attributable to MGM Resorts International 466,807 (18,016)

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

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

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

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

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

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

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

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

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

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

The current year period was initially negatively affected by a decrease in business volume and travel due to the spread of the omicron variant in the early part of the period, however, business

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

At MGM China, the current and prior year period were significantly impacted by travel and entry restrictions in Macau with the current year period being negatively affected by property closures and more significantly impacted by restrictions related to the COVID-19 pandemic compared to the prior year period.

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

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

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

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

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

Consolidated net revenues were $3.9 billion for the three months ended March 31, 2023 compared to $2.9 billion in the prior year quarter, an increase of 36%.

The current year quarter benefited from the inclusion of The Cosmopolitan, which was partially offset by the disposition of The Mirage and Gold Strike Tunica.

The prior year quarter was negatively affected by a decrease in business volume and travel due to the spread of the omicron variant in the early part of the quarter.

At MGM China, the current year quarter benefited from the removal of travel and entry restrictions in Macau.

As a result, net revenues at our Las Vegas Strip Resorts increased 31%, Regional Operations increased 6%, and MGM China increased 130% compared to the prior year quarter.

Consolidated operating income was $731 million for the three months ended March 31, 2023 compared to $106 million in the prior year quarter.

The current year quarter benefited from a $398 million gain related to the sale of the operations of Gold Strike Tunica recorded in property transactions, net, the increase in net revenues, as discussed above, and an $85 million decrease in depreciation and amortization expense, partially offset by an increase in rent expense recorded within general and administrative expense for the VICI and The Cosmopolitan leases, which commenced in April 2022 and May 2022, respectively.

Depreciation and amortization expense decreased compared to the prior year quarter due to the deconsolidation of MGP in April 2022 and due to the MGM Grand Paradise gaming subconcession becoming fully amortized as of December 31, 2022.

Net Revenues by Segment

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Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(In thousands)

20 unchanged sentences

Las Vegas Strip Resorts

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

Las Vegas Strip Resorts casino revenue was $1.5 billion for the nine months ended September 30, 2022 compared to $1.0 billion in the prior year period, an increase of 54%, due primarily to the inclusion of The Cosmopolitan and a full year of casino revenue related to Aria and was negatively affected by a decrease in business volume and travel due to the spread of the omicron variant in the early part of the current year period;

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

Las Vegas Strip Resorts net revenues for the three months ended March 31, 2023 for each revenue type increased compared to the prior year quarter due primarily to the inclusion of The Cosmopolitan, partially offset by the disposition of The Mirage, and also due to the early part of the prior year quarter being negatively affected by the spread of the omicron variant.

Las Vegas Strip Resorts casino revenue was $501 million for the three months ended March 31, 2023 compared to $475 million in the prior year quarter, an increase of 5%.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(Dollars in millions)

2 unchanged sentences

Table games win % 22.7 % 24.6 %

Slots handle $ 6,193 $ 3,863 $ 16,144 $ 9,804

Slots win $ 577 $ 369 $ 1,502 $ 932

Slots win % 9.3 % 9.6 % 9.3 % 9.5 %

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

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

Las Vegas Strip Resorts rooms revenue was $1.9 billion for the nine months ended September 30, 2022 compared to $846 million in the prior year period, an increase of 127%.

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

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

Slot handle $ 5,759 $ 4,607

Slot win $ 544 $ 427

Slot win % 9.4 % 9.3 %

Las Vegas Strip Resorts rooms revenue was $752 million for the three months ended March 31, 2023 compared to $485 million in the prior year quarter, an increase of 55%, due primarily to an increase in REVPAR.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Occupancy (1)

93 % 82 % 88 % 69 %

Average daily rate (ADR) $ 258 $ 197

Revenue per available room (REVPAR)

$ 210 $ 148 $ 192 $ 109

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

Las Vegas Strip Resorts food and beverage revenue was $600 million for the three months ended September 30, 2022 compared to $309 million in the prior year quarter, an increase of 94%, and Las Vegas Strip Resorts entertainment, retail and other revenues were $390 million for the three months ended September 30, 2022 compared to $247 million in the prior year quarter, an increase of 58%, due primarily to the inclusion of The Cosmopolitan and a full quarter of revenues from Aria and an increase in business volume and travel activity in the current year quarter.

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

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

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

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

Las Vegas Strip Resorts food and beverage revenue was $583 million for the three months ended March 31, 2023 compared to $384 million in the prior year quarter, an increase of 52%, and Las Vegas Strip Resorts entertainment, retail and other revenues were $341 million for the three months ended March 31, 2023 compared to $318 million in the prior year quarter, an increase of 7%.

Regional Operations

Regional Operations casino revenue was $721 million for the three months ended September 30, 2022 compared to $720 million in the prior year quarter, flat compared to the prior year quarter, and $2.2 billion for the nine months ended September 30, 2022 compared to $2.0 billion in the prior year period, an increase of 7%, due primarily to table games win increasing 12% over the prior year period and slots win increasing 11% over the prior year period, as the prior year period was negatively affected by midweek hotel closures at certain properties and operational restrictions related to the pandemic primarily during the first quarter of 2021.

Regional Operations casino revenue was $717 million for the three months ended March 31, 2023 compared to $704 million in the prior year quarter, an increase of 2%, due primarily to an increase in slot handle over the prior year quarter.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(Dollars in millions)

2 unchanged sentences

Table games win % 21.1 % 21.2 %

Slots handle $ 7,426 $ 6,900 $ 21,190 $ 18,797

Slots win $ 703 $ 661 $ 2,016 $ 1,810

Slots win % 9.5 % 9.6 % 9.5 % 9.6 %

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

Regional Operations rooms revenue was $212 million for the nine months ended September 30, 2022 compared to $160 million in the prior year period, an increase of 32%, due to an increase in business volume and travel activity over the prior year period, which was negatively affected by midweek hotel closures at certain properties and operational restrictions related to the pandemic primarily during the first quarter of 2021.

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

Regional Operations food and beverage revenue was $313 million for the nine months ended September 30, 2022 compared to $212 million in the prior year period, an increase of 48% and Regional Operations entertainment, retail and other revenue, and reimbursed costs was $141 million for the nine months ended September 30, 2022 compared to $97 million in the prior year period, an increase of 46%, due primarily to increased business volume and the prior year period being negatively affected by operational restrictions related to pandemic.

Slot handle $ 6,999 $ 6,662

Slot win $ 670 $ 638

Slot win % 9.6 % 9.6 %

Regional Operations rooms revenue was $67 million for the three months ended March 31, 2023 compared to $56 million in the prior year quarter, an increase of 20%, due to an increase in occupancy.

Regional Operations food and beverage revenue was $112 million for the three months ended March 31, 2023 compared to $91 million in the prior year quarter, an increase of 23%, and Regional Operations entertainment, retail and other revenue, and reimbursed costs was $50 million for the three months ended March 31, 2023 compared to $40 million in the prior year quarter, an increase of 25%, as non-gaming amenities had not yet returned to pre-COVID-19 volumes in the comparative prior year quarter.

The following table shows key gaming statistics for MGM China:

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(Dollars in millions)

VIP table games turnover $ 328 $ 1,800 $ 1,975 $ 6,763

VIP table games win $ 8 $ 72 $ 55 $ 221

VIP table games win % 2.6 % 4.0 % 2.8 % 3.3 %

Main floor table games drop $ 2,177 $ 1,096

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Main floor table games win % 24.0 % 21.8 %

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

MGM China net revenues were $618 million for the three months ended March 31, 2023 compared to $268 million in the prior year quarter, an increase of 130%, due to the current year quarter being positively affected by the removal of COVID-19 related travel and entry restrictions in Macau.

Corporate and other

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

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

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

Corporate and other revenue primarily includes revenues from LeoVegas, other corporate operations, and management services.

The increase in the current year quarter compared to the prior year quarter is primarily due to the acquisition of LeoVegas in September 2022.

Adjusted Property EBITDAR and Adjusted EBITDAR

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Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(In thousands)

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Las Vegas Strip Resorts

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

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

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

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

Las Vegas Strip Resorts Adjusted Property EBITDAR was $836 million for the three months ended March 31, 2023 compared to $594 million in the prior year quarter, an increase of 41%.

Las Vegas Strip Resorts Adjusted Property EBITDAR margin increased to 38.4% for the three months ended March 31, 2023 compared to 35.7% in the prior year quarter as the current year quarter primarily benefited from the increase in rooms revenues discussed above.

Regional Operations

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

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

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

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

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

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

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

License fee expense was $2 million in the current quarter and $5 million in the prior year quarter.

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

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

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

Regional Operations Adjusted Property EBITDAR was $313 million for the three months ended March 31, 2023, which was flat compared to the prior year quarter.

Regional Operations Adjusted Property EBITDAR margin decreased to 33.1% for the three months ended March 31, 2023 compared to 35.2% in the prior year quarter.

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

MGM China Adjusted Property EBITDAR was $169 million for the three months ended March 31, 2023 compared to Adjusted Property EBITDAR loss of $26 million in the prior year quarter.

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

Supplemental Information - Same-store Results of Operations

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

The following table presents the financial results of Las Vegas Strip Resorts and Regional Operations on a same-store basis for the three months ended March 31, 2023 and 2022.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(In thousands)

1 unchanged sentence

Acquisitions (1)

(694,103) (13,529) (1,538,236) (13,529)

Dispositions (2)

Las Vegas Strip Resorts same-store net revenues $ 1,867,984 $ 1,535,095

1 unchanged sentence

Acquisitions (1)

(276,055) (5,878) (623,607) (5,878)

Dispositions (2)

Las Vegas Strip Resorts Same-Store Adjusted Property EBITDAR $ 705,955 $ 560,742

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

Income (loss) from Unconsolidated Affiliates

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

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands)

Regional Operations net revenues $ 945,843 $ 890,829

Dispositions (1)

(26,967) (58,073)

Regional Operations same-store net revenues $ 918,876 $ 832,756

Regional Operations Adjusted Property EBITDAR $ 313,175 $ 313,279

Dispositions (1)

(11,073) (28,611)

Regional Operations Same-Store Adjusted Property EBITDAR $ 302,102 $ 284,668

(1) Excludes the net revenues and Adjusted Property EBITDAR of Gold Strike Tunica.

Income (loss) from Unconsolidated Affiliates

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

Three Months Ended

(In thousands)

CityCenter $ — $ 40,747 $ — $ 128,127

VICI BREIT Venture — 38,959 51,051 116,876

MGP BREIT Venture (through April 29, 2022) $ — $ 38,936

BetMGM (81,872) (91,993)

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$ (74,999) $ (46,838)

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

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

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

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

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

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

Non-operating Results

Interest Expense

Gross interest expense was $125 million and $200 million for the three months ended September 30, 2022 and 2021, respectively, and $458 million and $599 million for the nine months ended September 30, 2022 and 2021, respectively.

The decrease from the respective prior year periods is due primarily to a decrease in debt outstanding as a result of the derecognition of MGP OP’s senior notes in connection with the deconsolidation of MGP, partially offset by an increase in the debt outstanding under MGM China’s revolving credit facilities.

Gross interest expense was $131 million and $196 million for the three months ended March 31, 2023 and 2022, respectively.

The decrease from the prior year quarter is due primarily to a decrease in debt outstanding as a result of the repayment of the $1.0 billion 7.75% senior notes in March 2022, the derecognition of MGP OP’s senior notes in connection with the deconsolidation of MGP in April 2022, and the repayment of the $1.25 billion 6% senior notes in March 2023, partially offset by an increase in the debt outstanding under MGM China’s revolving credit facilities.

See Note 6 to the accompanying consolidated financial statements for discussion on long-term debt and see “Liquidity and Capital Resources” for discussion on issuances and repayments of long-term debt and other sources and uses of cash.

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

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

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

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

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

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

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

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

The effective rates for the three and nine months ended September 30, 2021 were favorably impacted by tax expense recorded on the "Gain on consolidation of CityCenter, net", at an approximately 12% effective rate due to the presence of goodwill, and were unfavorably impacted by losses in Macau that we could not benefit, partially offset by the release of tax reserves in conjunction with the closure of a New Jersey state income tax audit.

Other income, net was $46 million and $34 million for the three months ended March 31, 2023 and 2022, respectively.

Our effective income tax rate was a provision of 25.7% on income before income taxes and a benefit of 51.1% on loss before income taxes for the three months ended March 31, 2023 and 2022, respectively.

The prior year quarter was unfavorably impacted by losses in Macau from which we could not benefit.

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, property transactions, net, gain on REIT transactions, net, rent expense related to triple-net operating leases and ground leases, income from unconsolidated affiliates related to investments in real estate ventures, and also excludes gain on consolidation of CityCenter, net, gain related to CityCenter’s sale of Harmon land recorded within income from unconsolidated affiliates, corporate expense and stock compensation expense, which are not allocated to each operating segment, and rent expense related to the master lease with MGP that eliminated in consolidation.

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

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, 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 corporate expense and stock compensation expense, which are not allocated to each operating segment, and rent expense related to the master lease with MGP that eliminated in consolidation.

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

Non-GAAP measures

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

“Same-Store Adjusted Property EBITDAR” is 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, for Las Vegas Strip Resorts, we have excluded the Adjusted Property EBITDAR of The Cosmopolitan for periods subsequent to its acquisition on May 17, 2022 and of The Mirage for the periods prior to its disposition on December 19, 2022, as applicable.

For Regional Operations, we have excluded the Adjusted Property EBITDAR of Gold Strike Tunica for the periods prior to its disposition on February 15, 2023, 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.

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

“Adjusted EBITDAR” is earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening and start-up expenses, property transactions, net, gain on REIT transactions, net, gain on consolidation of CityCenter, net, rent expense related to triple-net operating leases and ground leases, gain related to CityCenter’s sale of Harmon land recorded within income from unconsolidated affiliates, and income from unconsolidated affiliates related to investments in real estate ventures.

“Adjusted EBITDAR” is earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening and start-up expenses, property transactions, net, rent expense related to triple-net operating leases and ground leases, 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.

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

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

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

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 triple-net operating leases and ground leases, and is provided for the limited purposes discussed herein.

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

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Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(In thousands)

Net income (loss) attributable to MGM Resorts International $ 466,807 $ (18,016)

Net loss attributable to noncontrolling interests (484,257) (12,497) (662,346) (31,055)

Net income (loss) attributable to noncontrolling interests 13,076 (16,777)

Net income (loss) 479,883 (34,793)

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85,177 176,922

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

Operating income 730,839 105,788

Preopening and start-up expenses 139 434

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Depreciation and amortization 203,501 288,638

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

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

Triple-net operating lease and ground lease rent expense 570,555 262,452

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

Income from unconsolidated affiliates related to real estate ventures (2,695) (41,646)

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Guarantor Financial Information

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

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

As of March 31, 2023, all of our principal debt arrangements are guaranteed by each of our wholly owned material domestic subsidiaries that guarantee our senior credit facility.

Our principal debt arrangements are not guaranteed by MGM Grand Detroit, MGM National Harbor, Blue Tarp reDevelopment, LLC (the entity that owns the operations of MGM Springfield), MGM Sports & Interactive Gaming, LLC (the entity that owns our 50% interest in BetMGM), 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.

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

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

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

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

September 30,

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 as of December 31, 2022.

2023 December 31,

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Current assets $ 5,216,484 $ 6,733,048

Investment in MGP OP — 2,284,222

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

Other long-term assets 28,519,572 28,802,794

MGP master lease operating lease liabilities – current — 154,287

Other current liabilities 1,946,811 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 28,327,103 28,285,295

Nine Months Ended

September 30, 2022

Three Months Ended

March 31, 2023

Income Statement (In thousands)

Net revenues $ 2,689,698

MGP master lease rent expense 429,065

Operating income 680,643

Income from continuing operations 1,235,266

Income before income taxes 691,250

Net income 522,827

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

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

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

Cash provided by operating activities was $704 million in the three months ended March 31, 2023 compared to $420 million in the prior year quarter.

The change from the prior year period was due primarily to the increase in Adjusted Property EBITDAR at our Las Vegas Strip Resorts and MGM China 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 and the change in cash paid (refunded) for taxes, net.

Investing activities.

Our investing cash flows can fluctuate significantly from year to year depending on our decisions with respect to strategic capital investments in new or existing resorts, business acquisitions or dispositions, and the timing of maintenance capital expenditures to maintain the quality of our resorts.

the timing of maintenance capital expenditures to maintain the quality of our resorts.

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

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

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

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

Cash provided by investing activities was $212 million in the three months ended March 31, 2023 compared to cash used in investing activities of $237 million in the prior year quarter.

In the three months ended March 31, 2023, we received $439 million in net cash related to the sale of the operations of Gold Strike Tunica, received $153 million in cash related to the principal portion of the Circus Circus Las Vegas note receivable that was repaid, and made payments of $140 million in capital expenditures, as further discussed below, contributed $25 million to BetMGM, and made $218 million in net investments in debt securities.

In comparison, in the prior year period we made payments of $102 million in capital expenditures, as further discussed below, and contributed $125 million to BetMGM.

Capital Expenditures

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

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

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

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

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

We made capital expenditures of $140 million in the three months ended March 31, 2023, of which $6 million related to MGM China, for which the MGM China amount is inclusive of capital expenditures relating to the gaming concession investment.

Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate and other entities of $134 million primarily related to expenditures in information technology, room remodels, and convention center remodels.

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

Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate entities of $93 million primarily relate to expenditures in information technology and room remodels.

Financing activities.

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

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

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

Cash used in financing activities was $2.4 billion in the three months ended March 31, 2023 compared to $2.2 billion in the prior year quarter.

In the three months ended March 31, 2023, we had net repayments of debt of $1.8 billion, as further discussed below, distributed $18 million to noncontrolling interest owners, and we repurchased $484 million of our common stock.

In comparison, in the prior year period, we had net repayments of debt of $1.0 billion, as further discussed below, distributed $118 million to noncontrolling interest owners, and we repurchased $1.0 billion of our common stock.

Borrowings and Repayments of Long-term Debt

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

MGM China’s borrowings were made to fund an increase in share capital of MGM Grand Paradise pursuant to the capital requirements under the new Macau gaming law and for general corporate purposes.

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

These repayments were partially offset by MGM China’s March 2021 issuance of $750 million in aggregate principal amount of 4.75% senior notes due 2027 at an issue price of 99.97%.

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

During the three months ended March 31, 2023, we had net repayments of debt of $1.8 billion, which consisted of the rep ayment of $1.25 billion of aggregate principal amount of our 6% senior notes due 2023 upon maturity, and aggregate repayments of $586 million on MGM China’s revolving credit facilities.

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

Dividends, Distributions to Noncontrolling Interest Owners, and Share Repurchases

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

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

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

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

MGP OP paid the following distributions to its partnership unit holders during the nine months ended September 30, 2022 and 2021:

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

• $406 million of distributions paid in 2021, of which we received $185 million and MGP received $221 million, which MGP concurrently paid as a dividend to its Class A shareholders.

During the three months ended March 31, 2023, we paid $484 million relating to repurchases of our common stock pursuant to our stock repurchase plans.

See Note 11 for further information on the stock repurchases.

In connection with those repurchases, the March 2022 $2.0 billion stock repurchase plan was completed.

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

The remaining availability under the February 2023 $2.0 billion stock repurchase plan was $2.0 billion as of March 31, 2023.

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

During the three months ended March 31, 2022, we paid dividends of $0.0025 per share, totaling $1 million and MGP OP 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.

Other Factors Affecting Liquidity and Anticipated Uses of Cash

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

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

In addition to required cash on hand for operations, we utilize corporate cash management procedures to minimize the amount of cash held on hand or in banks.

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

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

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

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

No amounts were drawn on our revolving credit facility.

We have $1.4 billion of debt maturing in the next twelve months, which we expect to repay with cash on hand.

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

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

We are also required, as of September 30, 2022, to make annual cash rent payments of $1.9 billion over the next twelve months under triple-net lease agreements, which triple-net leases are also subject to annual escalators and also require us to pay substantially all costs associated with the lease, including real estate taxes, ground lease payments,

insurance, utilities and routine maintenance, in addition to the annual cash rent.

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

We have planned capital expenditures expected over the remainder of the year of approximately $355 million to $365 million domestically, which is inclusive of the capital expenditures required under the triple-net lease agreements, each of which requires us to spend a specified percentage of net revenues at the respective domestic properties, and approximately $10 million to $20 million at MGM China, including approximately $7 million of show production costs related to the development of entertainment at the MGM Cotai theater.

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

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

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

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 .

As of March 31, 2023, we had cash and cash equivalents of $4.5 billion, of which MGM China held $468 million, and we had $6.9 billion in principal amount of indebtedness, including $879 million outstanding under MGM China’s first revolving credit facility.

No amounts were drawn on our revolving credit facility or MGM China’s second revolving credit facility.

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

As of March 31, 2023, our expected cash interest payments over the next twelve months are approximately $185 million to $195 million, excluding MGM China, and approximately $385 million to $395 million on a consolidated basis, which includes MGM China.

We are required, as of March 31, 2023, 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 8 for discussion of our leases and lease obligations.

We have planned capital expen ditures expected over the remainder of the year of approximately $680 million to $690 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 $135 million to $155 million at MGM China, which is inclusive of the estimated amount of the gaming concession investment for 2023 that relates to capital projects.

We additionally have planned contributions to BetMGM over the remainder of 2023 of approximately $50 million.

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

Additionally, we expect to have cash commitments of $200 million to $250 million over the remainder of 2023 relating to our Japan venture’s planned integrated resort in Osaka for which the amount and timing is subject to change and will be dependent upon funding of the venture from noncontrolling interests and the timing and amount of financing received by the venture.

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

Subsequent to the quarter ended March 31, 2023, we repurchased approximately 4 million shares of our common stock for an aggregate amount of $172 million, excluding excise tax.

Repurchased shares were retired.

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

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

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

As previously discussed, the COVID-19 pandemic caused significant economic disruption both globally and in the United States, and impacted our business, financial condition, results of operations and cash flows since the onset of the pandemic, which continued in 2022.

As a result of the widespread distribution of vaccines and the removal of operational restrictions, we have seen economic recovery in some of the market segments in which we operate, as shown in our Summary Operating Results.

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

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.

Critical Accounting Policies and Estimates

A complete discussion of our critical accounting policies and estimates is included in our Form 10-K for the fiscal year ended December 31, 2022.

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

Long-lived assets valuation - MGM Grand Paradise gaming subconcession

In connection with the enactment of the new Macau gaming law in June 2022 that provides for material changes to the legal form of gaming concessions in Macau, including discontinuing and prohibiting gaming subconcessions subsequent to their expiration and has material changes to the rights and obligation provided for under new gaming concessions to be awarded in the upcoming public tender, we determined that MGM Grand Paradise’s existing gaming subconcession and new gaming concession, if obtained, would be two separate units of account.

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

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

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

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

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

accordingly, no impairment was indicated.

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

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

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

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

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

Additionally, we reassessed the useful life of the existing gaming subconcession intangible asset and, given the new gaming law and the resulting changes described above, we determined that the useful life would no longer be based on the initial term of the MGM Cotai land concession that ends in January 2038, and that the new useful life is consistent with the remaining contractual term of the existing gaming subconcession, which ends on December 31, 2022.

Accordingly, amortization of the MGM Grand Paradise gaming subconcession will be recognized on a straight-line basis over its reduced useful life, thereby accelerating the recognition of amortization within our statements of operations.

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

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

Goodwill valuation

We continue to conclude, as of September 30, 2022, that it is more-likely-than-not that the fair value of our reporting units exceed their carrying value and, accordingly, an interim quantitative impairment review of goodwill was not triggered.

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

For MGM Macau, if the property continues to face closures, if its operations do not recover from the impacts of COVID-19 in the forecasted time period, if we are not successful in obtaining a gaming concession in connection with future public tenders, or if our obligations under the new gaming concession exceed those forecasted, it could cause the carrying value of the reporting unit to exceed its fair value in future periods, potentially resulting in an impairment charge.

For Empire City, if we are not successful in obtaining a commercial gaming license, if the costs to obtain the license, develop, and construct a full-scale commercial gaming facility increase from our current expectations, or if we do not realize our forecasted cash flows for the expanded facility, it could cause the carrying value of the reporting unit to exceed its fair value in future periods, potentially resulting in an impairment charge.

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

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

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

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates.

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates and

foreign currency exchange rates.

Our primary exposure to market risk is interest rate risk associated with our variable rate long-term debt.

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This effect would be realized in the periods subsequent to the periods when the debt matures.

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

As of September 30, 2022, variable rate borrowings represented approximately 16% of our total borrowings.

We do not enter into derivative transactions that would be considered speculative positions .

As of March 31, 2023, variable rate borrowings represented approximately 13% of our total borrowings.

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

Debt maturing in Fair Value September 30, 2022

Debt maturing in Fair Value March 31, 2023

2023 2024 2025 2026 2027 Thereafter Total

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

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

As of March 31, 2023, a 1% weakening of the Hong Kong dollar (the functional currency of MGM China) to the U.S.

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

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

statements we make regarding the impact of COVID-19 on our business, expectations regarding the impact of macroeconomic trends on the Company’s business, our ability to execute on ongoing and future strategic initiatives, including the development of an integrated resort in Japan and investments we make in online sports betting and iGaming, expectations regarding MGM Grand Paradise’s bid for a new concession contract, the closing of The Mirage and Gold Strike Tunica transactions and any benefits expected to be received as a result of those and any other transactions to acquire or sell assets, amounts we will spend on capital expenditures and investments, our expectations with respect to future share repurchases and cash dividends on our common stock, dividends and distributions we will receive from MGM China, our ability to achieve the benefits of our cost savings initiatives, and amounts projected to be realized as deferred tax assets.

statements we make regarding the impact of COVID-19 on our business, expectations regarding the impact of macroeconomic trends on our business, our ability to execute on ongoing and future strategic initiatives, including the development of an integrated resort in Japan, a commercial gaming facility in New York and investments we make in online sports betting and iGaming, expansion of LeoVegas and the MGM digital brand, positioning BetMGM as a leader in sports betting and iGaming, the closing of the Push Gaming Holding Limited acquisition, amounts we will spend on capital expenditures and investments, our expectations with respect to future share repurchases and cash dividends on our common stock, dividends and distributions we will receive from MGM China, amounts projected to be realized as deferred tax assets, and our ability to achieve our public social impact and sustainability goals.

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

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Therefore, we caution you against relying on any of these forward-looking statements.

Important factors that could cause actual results to differ materially from those in the forward-looking statements include,

but are not limited to, regional, national or global political, economic, business, competitive, market, and regulatory conditions and the following:

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

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

• our substantial indebtedness and significant financial commitments, including the fixed component of our rent payments under our triple-net leases and guarantees we provide of the indebtedness of the landlords of Bellagio, Mandalay Bay, and MGM Grand Las Vegas could adversely affect our development options and financial results and impact our ability to satisfy our obligations;

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

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

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

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

• significant competition we face with respect to destination travel locations generally and with respect to our peers in the industries in which we compete;

• the impact on our business of economic and market conditions in the jurisdictions in which we operate and in the locations in which our customers reside;

• the possibility that we may not realize all of the anticipated benefits of our cost savings initiatives, including our MGM 2020 Plan, or our asset light strategy;

• the fact that our ability to pay ongoing regular dividends is subject to the discretion of our board of directors and certain other limitations;

• the fact that we suspended our payment of ongoing regular dividends to our stockholders, and may not elect to resume paying dividends in the foreseeable future or at all;

• all of our domestic gaming facilities are leased and could experience risks associated with leased property, including risks relating to lease termination, lease extensions, charges and our relationship with the lessor, which could have a material adverse effect on our business, financial position or results of operations;

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• the potential reputational harm as a result of increased scrutiny related to our corporate social responsibility efforts;

• the possibility that we may not achieve our ESG related goals or that our ESG initiatives may not result in their intended or anticipated benefits;

• extreme weather conditions or climate change may cause property damage or interrupt business;

• water scarcity could negatively impact our operations;

• the fact that our businesses are subject to extensive regulation and the cost of compliance or failure to comply with such regulations could adversely affect our business;

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• risks related to pending claims that have been, or future claims that may be brought against us;

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

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

• disruptions in the availability of our computer systems, through cyber-attacks or otherwise, which could impact our ability to service our customers and adversely affect our sales and the results of operations;

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

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

• the ability of the Macau government to (i) terminate MGM Grand Paradise’s concession under certain circumstances without compensating MGM Grand Paradise, (ii) from the eighth year of MGM Grand Paradise’s concession, redeem the concession by providing MGM Grand Paradise at least one year’s prior notice and subject to the payment of reasonable and fair damages or indemnity to MGM Grand Paradise, or (iii) refuse to grant MGM Grand Paradise an extension of the concession in 2032;

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis