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Management Discussion

• The temporary closure of our properties due to COVID-19 in the current and comparative period impacted our financial results. Dates of temporary closure are shown below:
• Consolidated net revenues decreased 27% for the three months ended March 31, 2021 compared to the prior year quarter due primarily to the impact of COVID-19. While the prior year period was negatively affected by property closures for a portion of the quarter at our Las Vegas Strip Resorts and Regional Operations, the current year quarter was negatively affected by midweek property and hotel closures, lower business volume and travel activity, and ongoing operational restrictions due to the pandemic, primarily at our Las Vegas Strip Resorts. At MGM China, the prior year quarter was negatively affected by property closures and was more significantly impacted by travel restrictions to Macau than in the current quarter. These factors resulted in a 52% decrease in net revenues at our Las Vegas Strip Resorts, a 2% decrease in net revenues at our Regional Operations, and a 9% increase in net revenues at MGM China.
• Consolidated operating loss was $247 million for the three months ended March 31, 2021 compared to consolidated operating income of $1.3 billion in the prior year quarter, due primarily to the prior year quarter including a $1.5 billion gain related to the MGM Grand Las Vegas and Mandalay Bay real estate transaction, the impact of COVID-19 which caused a decrease in net revenues, discussed above, partially offset by a $28 million decrease in general and administrative expense, a $28 million decrease in depreciation and amortization, a $29 million decrease in property transactions, net, and a $66 million decrease in corporate expense. General and administrative expense decreased in the current quarter compared to the prior quarter due primarily to aggressive cost reduction efforts to reduce expenses at our domestic properties, which primarily related to decreases in payroll expense, utilities, and advertising expense, which was partially offset by a full quarter of rent expense for the Mandalay Bay and MGM Grand Las Vegas lease. Corporate expense decreased to $78 million in the first quarter of 2021 from $144 million in the prior year quarter due primarily to a decrease in payroll costs. Corporate expense in the prior year quarter included $44 million in CEO transition expense and $4 million in corporate initiatives costs. 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 prior year quarter included a $38 million other-than-temporary impairment charge on an equity method investment. Depreciation and amortization decreased compared to the prior year quarter due primarily to the sale of the MGM Grand Las Vegas and Mandalay Bay real estate assets in February 2020.