UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


(Mark One)

☒

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

2021

OR

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-10362

MGM RResorts Internationalesorts International

(Exact name of Registrant as specified in its charter)

DELAWARE

88-0215232

Delaware

88-0215232
(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

3600 Las Vegas Boulevard South - Las Vegas, Nevada 89109

(Address of principal executive office) (Zip Code)

(702) 693-7120

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 Par Value

MGM

New York Stock Exchange (NYSE)

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Large accelerated filer

☒Accelerated filer☐
Non-accelerated filer
☐
Smaller reporting company☐
Emerging growth company

☐
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes ☐ No ☒

The aggregate market value of the Registrant’s Common Stock held by non-affiliates of the Registrant as of June 28, 201930, 2021 (based on the closing price on the New York Stock Exchange Composite Tape on June 28, 2019)30, 2021) was $14.4$17.5 billion. Shares of common stock held by each officer and director and by each person who owns 10% or more of the outstanding common shares have been excluded. As of February 24, 2020, 492,434,34123, 2022, 439,172,269 shares of Registrant’s Common Stock, $0.01 par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE


Portions of the Registrant’s definitive Proxy Statement for its 20192022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.


TABLE OF CONTENTS

Page

PART I

Page

Item 1.

BusinessPART I

1

Item 1A.

1.

12

1

Item 1A.

15
Item 1B.

25

32

Item 2.

26

33

Item 3.

27

34

Item 4.

27

34

PART II

Item 5.

28

35

Item 6.

30

37

Item 7.

31

37

Item 7A.

50

57

Item 8.

51

58

55

62

60

67

104

107

Item 9.

105

108

Item 9A.

106

108

Item 9B.

107

109

PART III

Item 9C.
109

PART III

Item 10.

108

110

Item 11.

108

110

Item 12.

108

110

Item 13.

108

110

Item 14.

108

110

PART IV

Item 15.

109

111

Item 16.

116

118

117

119




PART I

ITEM 1.

ITEM 1.    BUSINESS


MGM Resorts International is referred to as the “Company,” “MGM Resorts,” or the “Registrant,” and together with its subsidiaries may also be referred to as “we,” “us” or “our.” MGM China Holdings Limited together with its subsidiaries is referred to as “MGM China.” Except where the context indicates otherwise, “MGP” refers to MGM Growth Properties LLC together with its consolidated subsidiaries.


Overview


MGM Resorts International is a Delaware corporation incorporated in 1986 that acts largely as a holding company and, through subsidiaries, owns and operates integrated casino, hotel, and entertainment resorts across the United States and in Macau.


We believe we own or invest inoperate several of the finest casino resorts in the world and we continually reinvest in our resorts to maintain our competitive advantage. 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 believe we operate the highest quality resorts in each of the markets in which we operate. Ensuring our resorts are the premier resorts in their respective markets requires capital investments to maintain the best possible experiences for our guests.


MGM Growth Properties LLC (“MGP”), is a consolidated subsidiary of the Company. Substantially all of its assets are owned by and substantially all of its businesses are conducted through its subsidiary MGM Growth Properties Operating Partnership LP (the “Operating Partnership”). As of December 31, 2019, pursuant to a master lease agreement between a subsidiary of the Company and a subsidiary of the Operating Partnership,2021, we lease the real estate assets of The Mirage, Mandalay Bay, 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 Northfield.Springfield pursuant to a master lease agreement between a subsidiary of ours and a subsidiary of the Operating Partnership. See Note 1 in the accompanying consolidated financial statements for information regarding MGP and the Operating Partnership, which we consolidate in our financial statements, and Note 18 in the accompanying consolidated financial statements for information regarding the master lease with MGP. As further discussed below, pursuant to a lease agreement, weMGP, which eliminates in consolidation.

We lease the real estate assets of Bellagio frompursuant to a lease agreement between a subsidiary of ours and a venture that we formed withis 5% owned by such subsidiary and 95% owned by a subsidiary of Blackstone Real Estate Income Trust, Inc. (“BREIT”, and such venture, the “Bellagio BREIT Venture”). We lease the real estate assets of Mandalay Bay and MGM Grand Las Vegas pursuant to a lease agreement between a subsidiary of ours and a venture that is 50.1% owned by a subsidiary of the Operating Partnership and 49.9% owned by a subsidiary of BREIT (such venture, the “MGP BREIT Venture”). SeeWe lease the real estate assets of Aria (including Vdara) pursuant to a lease agreement between a subsidiary of ours and funds managed by The Blackstone Group Inc. ("Blackstone"). Refer to Note 11 in the accompanying consolidated financial statements for information regarding the lease with BREIT.

further discussion of these leases.


Business Developments


In August 2016,recent years, in furtherance of our vision to be the world’s premier gaming entertainment company, we acquiredhave implemented an asset-light business model, which has involved a comprehensive review of our owned real estate assets to find opportunities to monetize those assets efficiently and allow unlocked capital to be redeployed towards balance sheet improvements, new growth opportunities, and to return value to our shareholders. At the remaining 50% ownership interestsame time, we have continued to focus on key growth opportunities that align with our vision, particularly by investing in Borgata, at which time Borgata became a wholly-owned consolidated subsidiaryU.S. online sports betting and iGaming through BetMGM, expanding our digital capabilities, and seeking to diversify our Asia operations with development efforts in Japan.

As part of ours. Subsequently, MGP acquired Borgata’sthat business strategy, we have sought, and executed on, opportunities to invest in our growth areas, divest our real property from usestate assets, and Borgata was addedacquire, or enter into venture transactions with respect to the existing master lease between us and MGP. In December 2016, we opened MGM National Harbor and, in October 2017, MGP also acquired the long-term leasehold interest and real property associated with MGM National Harbor from us and MGM National Harbor was added to the existing master lease between us and MGP.

In February 2018, we opened MGM Cotai, anoperations of integrated casino, hotel, and entertainment resort onresorts, including through the Cotai Strip in Macau, and in August 2018, we opened MGM Springfield in Springfield, Massachusetts.

following transactions:


•In July 2018, MGP acquiredwe and Entain plc (“Entain”) formed BetMGM, LLC (“BetMGM”), a venture that is owned 50% by each party. In connection with its formation, we provided BetMGM with exclusive access to all of our domestic landbased and online sports betting, major tournament poker, and online gaming operations and Entain provided BetMGM with exclusive access to its technology in 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 (“Northfield Acquisition”). In April 2019, we acquired the membership interests of Northfield from MGP and MGP retained the associated real estate assets. We then rebranded the property to MGM Northfield Park, which was then added to the existing master lease between us and MGP.

United States.


•In January 2019, we acquired the real property and operations associated with Empire City Casino's racetrack and casino ("Empire City"). for total consideration of approximately $865 million. Subsequently, MGP acquired
1

Empire City’s developed real property from us and Empire City was then added to the existing master lease between us and MGP.

Refer to Note 4 and Note 18 for additional information.


•In March 2019, we entered into an amendment to the existing master lease between us and MGP with respect to investmentsimprovements made by us related to the rebranding of the Park MGM and NoMad Las Vegas property (the “Park MGM Lease Transaction”).

Refer to Note 18 for additional information on this transaction, which eliminates in consolidation.


•Additionally, in November 2019, weBellagio BREIT Venture was formed, a venture (the “Bellagio BREIT Venture”) with BREIT, which acquired the Bellagio real estate assets from us for total consideration of $4.25 billion, and leased such assets back to us pursuant to a long-term lease agreement (the “Bellagio Sale-Leaseback Transaction”). Theagreement. Refer to Note 11 for additional information relating to the lease has an initial term of thirty yearsand Note 12 for the guarantee entered into in connection with the potential to extend for two ten year terms thereafter and provides for an initial rent of $245 million, escalating annually at a rate of 2% per annum for the first ten years and thereafter equal totransaction.



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 a letter of credit in favor of the landlord in an amount equal to rent for the succeeding two year period. •We received $4.25 billion consideration for the sale, which consisted of a 5% equity interest in the venture with the remaining consideration of approximately $4.2 billion in cash. We also provide a shortfall guarantee of the principal amount of indebtedness of Bellagio BREIT Venture’s $3.01 billion of debt (and any interest accrued and unpaid thereon).

In December 2019, we completed the sale of Circus Circus Las Vegas and adjacent land for $825 million, which consisted of $662.5 million paid in cash and a secured note due 2024 with a face value of $162.5 million and fair value of $133.7 million.

See Note 16 for additional information related to this transaction.


•On February 14, 2020, we completed a series of transactions (collectively 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 athe newly formed entity (“MGP BREIT Venture”), owned 50.1% by the Operating Partnership and 49.9% by a subsidiary of BREIT. InVenture 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 ofbillion. See Note 1 for further discussion on the Operating Partnership’s secured indebtedness assumed by MGP BREIT Venture,transaction and Note 12 for the Operating Partnership’s 50.1% equity interestguarantee entered into in connection with the 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. transaction.

•In connection with the transactions, we provided a shortfall guaranty of the principal amount of indebtedness of the MGP 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.

In connection with the transactions,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 provides for a term of thirty years with two ten-year renewal options and has an initial annual base rent of $292 million, escalating annually at a rate of 2% per annum forAdditionally, the first fifteen years and thereafter equal to the greater of 2% and the CPI increase during the prior year subject to a cap of 3%. In addition, the lease will require us to spend 3.5% of net revenues over a rolling five-year period at the properties on capital expenditures and for us to comply with certain financial covenants, which, if not met, will 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 one-year period.

In connection with the MGP BREIT Venture Transaction, the existing 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.

million, as further discussed in Note 18. Refer to Note 11 for additional information relating to the lease.


•Also, on January 14, 2020, we, the Operating Partnership, and MGP entered into a waiver agreement pursuant to which approximately 30 million Operating Partnership units that we held were redeemed for $700 million on May 18, 2020 and approximately 24 million Operating Partnership units that we held were redeemed for $700 million on December 2, 2020. As a result, the waiver terminated in accordance with its terms. Refer to Note 1 for further information regarding this transaction, which eliminates in consolidation.

•On March 4, 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. See Note 13 for information regarding this transaction, which eliminates in consolidation.

•On August 4, 2021, we entered into an agreement with VICI Properties, Inc. (“VICI”) and MGP whereby VICI will acquire MGP in a stock-for-stock transaction (such transaction, the “VICI Transaction”). 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 operating partnership (“VICI OP”) in exchange for each Operating Partnership unit held by us. In connection with the exchange, VICI OP will redeem the majority of our VICI OP units for cash consideration of $4.4 billion. MGP’s Class B share that is held by us will be cancelled. As part of the transaction, we will enter into an amended and restated master lease with VICI. 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). Refer to Note 1 for further information.

•On September 26, 2021, we entered into an agreement to acquire the operations of The Cosmopolitan of Las Vegas ("The Cosmopolitan") for cash consideration of $1.625 billion, subject to customary working capital adjustments. Additionally, the Company will enter into a lease agreement for the Operating Partnershipreal estate assets of The Cosmopolitan. The transaction is expected to waive its rightclose in the first half of 2022, subject to issue MGP Class A shares,regulatory approvals and other customary closing conditions. Refer to Note 1 for further information.

•On September 27, 2021, we completed the acquisition of the 50% ownership interest in lieuCityCenter Holdings, LLC ("CityCenter") held by Infinity World Development Corp ("Infinity World"), a wholly owned subsidiary of Dubai World, a Dubai, United Arab Emirates government decree entity, for cash consideration of $2.125 billion. Refer to us in connection with us exercising our rightNote 4 for additional information on this acquisition.

2

•On September 28, 2021, we sold the real estate assets of Aria (including Vdara) to requirefunds managed by Blackstone for cash consideration of $3.89 billion and entered into a lease through which the Operating Partnership to redeem the Operating Partnership units we hold, at a price per unit equalreal property is leased back to a 3% discountsubsidiary of the Company. Refer to Note 11 for discussion of the lease agreement.

•On September 28, 2021, we announced that we, together with our venture partner, ORIX Corporation ("ORIX"), were selected by Osaka as the region’s integrated resort partner. In December 2021, we and ORIX formed a venture, through which we will bid to develop one of Japan's first integrated resorts.

•On October 29, 2021, MGP acquired the real estate assets of MGM Springfield from us for cash consideration of $400 million and MGM Springfield was added to the applicable cash amount as calculatedMGP master lease between us and MGP through which MGP leases back the real property to a subsidiary of ours. Transactions with MGP, including transactions under the MGP master lease, have been eliminated in accordance with the operating agreement. The waiver terminates on the earlierour consolidation of 24 months following the closingMGP. Refer to Note 18 for further discussion of the master lease with MGP.

•On December 13, 2021, we entered into an agreement to sell the operations of The Mirage to an affiliate of Seminole Hard Rock Entertainment, Inc. ("Hard Rock") for cash consideration of $1.075 billion, subject to certain purchase price adjustments. Upon closing, the master lease between us and VICI (or MGP BREIT Venturein 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 us receiving cash proceedsreceipt of $1.4 billionregulatory approvals. Refer to Note 1 for further information.

For additional information relating to our acquisitions, divestitures, venture transactions, and other arrangements, including those referred to above, see “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations,” as consideration forwell as the redemptionnotes to our consolidated financial statements specified above.

Financial Impact of COVID-19. See “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Description of our Operating Partnership units.

business and key performance indicators — Financial Impact of COVID-19” for more information about the effect of the COVID-19 pandemic on our business and our recovery. For a discussion of the risks to our business resulting from COVID-19, see “Item 1A. Risk Factors — Risks Related to Our Business, Industry, and Market Conditions.”


Resort Operations


General


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 heavily on the ability of our resorts to generate operating cash flow to fund capital expenditures, provide excess cash flow for future development, acquisitions or investments, and repay debt financings.


Our results of operations do not tend to be seasonal in nature as all of our casino resorts, except as otherwise described related to the impact of COVID-19, typically operate 24 hours a day, every day of the year, with the exception of Empire City, Casino which operates 20 hours a day, every day of the year.year, 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. Our primary casino and hotel operations are owned and managed by us. Other resort amenities may be owned and operated by us, owned by us but managed by third parties for a fee, or leased to third parties. We utilize third-party management for specific expertise in operations of restaurants and nightclubs. Wealso lease space to third-party retail and food and beverage operators, particularly for branding opportunities.


As of December 31, 2019,2021, we have three reportable segments: Las Vegas Strip Resorts, Regional Operations, and MGM China.

China, as generally described below. See Note 17 for detailed financial information about our reportable segments.


Las Vegas Strip Resorts and Regional Operations

Las Vegas Strip Resorts. Las Vegas Strip Resorts consists of the following casino resorts:Aria (including Vdara) (upon acquisition in September 2021), Bellagio, MGM Grand Las Vegas (including The Signature), Mandalay Bay (including Delano and Four Seasons), The Mirage, Luxor, New York-New York (including theThe Park), Excalibur, Park MGM (including NoMad Las Vegas) and Circus Circus Las Vegas (until the sale of such property in December 2019).

Regional Operations. Regional Operations consists of the following casino resorts: MGM Grand Detroit in Detroit, Michigan; Beau Rivage in Biloxi, Mississippi; Gold Strike Tunica in Tunica, Mississippi; Borgata in Atlantic City, New
3

Jersey; MGM National Harbor in Prince George’s County, Maryland; MGM Springfield in Springfield, Massachusetts; Empire City in Yonkers, New York (upon its acquisition in January 2019); and MGM Northfield Park in Northfield Park, Ohio (upon MGM’s acquisition of the operations from MGP in April 2019).

Over half of the net revenue from our domestic resortsLas Vegas Strip Resorts is typically derived from non-gaming operations, including hotel, food and beverage, entertainment and other non-gaming amenities. Weamenities and the majority of the net revenue from our Regional Operations is typically derived from gaming operations. Although our domestic customer mix has changed in the near term as a result of the COVID-19 pandemic, our long-term strategy continues to be to market to different customers and utilize our significant convention and meeting facilities to allow us to maximize hotel occupancy and customer volumes, which also leads to better labor utilization. Our operating results are highly dependent on the volume of customers at our resorts,properties, which in turn affects the price we can charge for our hotel rooms and other amenities.


Our casino operations feature a variety of slots and table games, and, racethrough BetMGM, we offer online sports betting and sports book wagering.iGaming in certain jurisdictions in the United States. In addition, we offerprovide our premium players access to high-limit rooms and lounge experiences where players may enjoy an upscale atmosphere.


MGM China


We own approximately 56% of MGM China, which owns MGM Grand Paradise, S.A. (“MGM Grand Paradise”), the Macau company that owns and operates the MGM Macau and MGM Cotai casino resorts and holds the related gaming subconcession and land concessions. We believe our ownership interest in MGM China plays an important role in extending our reach internationally and will foster future growth and profitability. Macau isAlthough visitation during 2020 and 2021 was significantly reduced by the world’s largest gaming destination in terms of revenue andCOVID-19 pandemic, we expect the long-term future growth inof the Asian gaming market to drive additional visitation at MGM Macau and MGM Cotai.


Our current MGM China operations relate to MGM Macau and MGM Cotai, discussed further below. MGM China’s revenues are generated primarily from gaming operations which are conducted under a gaming subconcession held by MGM Grand Paradise.Paradise, a subsidiary of MGM China. The Macau government has granted three gaming concessions and each of these concessionaires has granted a subconcession. The MGM Grand Paradise gaming subconcession was granted by SJM Resorts S.A. ("SJMSA", formerly Sociedade de Jogos de Macau, S.A.), which expires in June 2022. The Macau government currently prohibits additional concessions and subconcessions, but does not place a limit on the number of casinos or gaming areas operated by the concessionaires and subconcessionaires, though additional casinos or gaming areas require government approval prior to commencing operations.

See “Risk Factors — Risks Related to our Macau Operations — The Macau government can 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 an extension of the subconcession in 2022, or MGM Grand Paradise may be unsuccessful in obtaining a gaming concession when a new public tender is held by the Macau government, any of which would have a material adverse effect on our business, financial condition, results of operations and cash flows.”


As discussed above, gaming in Macau is currently administered by the Macau Government through concessions awarded to three different concessionaires and three subconcessionaires, of which a subsidiary of MGM China, MGM Grand Paradise, is a subconcessionaire. In 2019, the expiration of MGM Grand Paradise's subconcession term was extended from March 31, 2020 to June 26, 2022, consistent with the expiration of the other concessionaires and subconcessionaires. Pursuant to the current Macau gaming law, upon reaching the maximum duration of 20 years, the term of the concessions may be extended one or more times by order of the Chief Executive, which period may not exceed, in total, 5 years. On January 14, 2022, the Macau Government disclosed the content of a bill to amend Macau gaming law, which followed a 45-day public consultation process regarding draft amendment proposals that were issued in September 2021. Under the bill, the existing subconcessions will be discontinued and a maximum of six concessions will be awarded for a term to be specified in the concession contract that may not exceed 10 years and which may be extended by three years under certain circumstances. The bill is subject to debate and approval by the Macau Legislative Assembly. The approval of the new gaming law bill will precede the public tender for the awarding of new gaming concessions and to date the Macau Government has provided no indication as to whether the public tender will take place before expiry of the existing gaming concessions and subconcessions but acknowledged that it could consider the extension of the existing concessions and subconcessions beyond their current term if the public tender is held at a later date. Unless MGM Grand Paradise's gaming subconcession is extended or legislation with regard to reversion of casino premises is amended, the casino area premises and gaming-related equipment subject to reversion will automatically be transferred to the Macau Government upon expiration, and MGM Grand Paradise will cease to generate any revenues from such gaming operations. In addition, certain events relating to the loss, termination, rescission, revocation or modification of MGM Grand Paradise’s gaming subconcession 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 an event of default under MGM China’s revolving credit facilities. MGM
4

China continues to closely monitor developments regarding the retendering process or concession extensions including the issuance of guidance by the Macau Government. MGM China intends to respond proactively to all relevant Macau Government requirements when known relating to the retendering process. We cannot provide any assurance that the gaming subconcession will be extended beyond the current term or that we will be able to obtain a gaming concession in a public tender; however, management believes that MGM Grand Paradise will be successful in obtaining a gaming concession when a public tender is held.

Corporate and Other


We have additional business activities including our investments in unconsolidated affiliates, and certain other corporate and management operations. Our unconsolidated affiliates include the ventures with BREIT, discussed elsewhere, and BetMGM. In September 2021, we completed the acquisition of the 50% ownership interest in CityCenter Holdings, LLC (“CityCenter”) isheld by Infinity World and now own 100% of the equity interest in CityCenter. Accordingly, we no longer account for our most significant unconsolidated affiliate, whichinterest in CityCenter under the equity method of accounting, and we also manage for a fee.

See Note 17now consolidate CityCenter in the accompanying consolidatedour financial statements for detailed financial information about our segments.

statements.


5

Our Operating Resorts

We have provided certain information below about our resorts as of December 31, 2019.

2021.

 

 

Number of

 

 

Approximate

 

 

 

 

 

 

 

 

 

 

 

Guestrooms

 

 

Casino Square

 

 

 

 

 

 

Gaming

 

Name and Location

 

and Suites

 

 

Footage (1)

 

 

Slots (2)

 

 

Tables (3)

 

Las Vegas Strip Resorts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bellagio

 

 

3,933

 

 

 

155,000

 

 

 

1,692

 

 

 

147

 

MGM Grand Las Vegas (4)

 

 

6,071

 

 

 

169,000

 

 

 

1,553

 

 

 

128

 

Mandalay Bay (5)

 

 

4,750

 

 

 

152,000

 

 

 

1,232

 

 

 

71

 

The Mirage

 

 

3,044

 

 

 

94,000

 

 

 

1,195

 

 

 

75

 

Luxor

 

 

4,397

 

 

 

101,000

 

 

 

1,049

 

 

 

53

 

Excalibur

 

 

3,981

 

 

 

94,000

 

 

 

1,161

 

 

 

50

 

New York-New York

 

 

2,024

 

 

 

81,000

 

 

 

1,139

 

 

 

62

 

Park MGM (6)

 

 

2,898

 

 

 

66,000

 

 

 

914

 

 

 

66

 

Subtotal

 

 

31,098

 

 

 

912,000

 

 

 

9,935

 

 

 

652

 

Regional Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MGM Grand Detroit (Detroit, Michigan) (7)

 

 

400

 

 

 

127,000

 

 

 

3,205

 

 

 

134

 

Beau Rivage (Biloxi, Mississippi)

 

 

1,740

 

 

 

87,000

 

 

 

1,811

 

 

 

81

 

Gold Strike (Tunica, Mississippi)

 

 

1,133

 

 

 

48,000

 

 

 

1,183

 

 

 

68

 

Borgata (Atlantic City, New Jersey)

 

 

2,767

 

 

 

160,000

 

 

 

2,859

 

 

 

188

 

MGM National Harbor (Prince George's County, Maryland) (8)

 

 

308

 

 

 

146,000

 

 

 

3,137

 

 

 

161

 

MGM Springfield (Springfield, Massachusetts) (9)

 

 

240

 

 

 

109,000

 

 

 

1,814

 

 

 

79

 

MGM Northfield Park (Northfield, Ohio)

 

 

—

 

 

 

73,000

 

 

 

2,200

 

 

 

—

 

Empire City (Yonkers, New York)

 

 

—

 

 

 

137,000

 

 

 

4,671

 

 

 

—

 

Subtotal

 

 

6,588

 

 

 

887,000

 

 

 

20,880

 

 

 

711

 

MGM China:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MGM Macau – 55.95% owned (Macau S.A.R.)

 

 

582

 

 

 

307,000

 

 

 

1,085

 

 

 

290

 

MGM Cotai – 55.95% owned (Macau S.A.R.)

 

 

1,390

 

 

 

298,000

 

 

 

1,154

 

 

 

262

 

Subtotal

 

 

1,972

 

 

 

605,000

 

 

 

2,239

 

 

 

552

 

Other Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CityCenter – 50% owned (Las Vegas, Nevada) (10)

 

 

5,499

 

 

 

139,000

 

 

 

1,492

 

 

 

126

 

Subtotal

 

 

5,499

 

 

 

139,000

 

 

 

1,492

 

 

 

126

 

Grand total

 

 

45,157

 

 

 

2,543,000

 

 

 

34,546

 

 

 

2,041

 


Name and LocationNumber of Guestrooms and Suites
Approximate Casino Square Footage(1)
Slots (2)
Gaming Tables (3)
Las Vegas Strip Resorts:    
Aria(4)
5,497142,0001,316121
Bellagio3,933152,0001,312146
MGM Grand Las Vegas (5)
6,071169,0001,245122
Mandalay Bay (6)
4,750152,00099069
The Mirage3,04494,00083571
Luxor4,397101,00081945
Excalibur3,98193,00089442
New York-New York2,02481,00089354
Park MGM (7)
2,89866,00074565
Subtotal36,5951,050,0009,049735
Regional Operations:    
MGM Grand Detroit (Detroit, Michigan) (8)
400147,0002,817140
Beau Rivage (Biloxi, Mississippi)1,74085,0001,51675
Gold Strike Tunica (Tunica, Mississippi)1,10957,0001,08261
Borgata (Atlantic City, New Jersey)2,767213,0002,816163
MGM National Harbor (Prince George's County, Maryland) (9)
308150,0002,123158
MGM Springfield (Springfield, Massachusetts)(10)
240106,0001,57152
MGM Northfield Park (Northfield, Ohio)—73,0001,669—
Empire City (Yonkers, New York)—137,0004,696—
Subtotal6,564968,00018,290649
MGM China:    
MGM Macau – 55.95% owned (Macau S.A.R.)
585307,0001,017289
MGM Cotai – 55.95% owned (Macau S.A.R.)1,418298,0001,026263
Subtotal2,003605,0002,043552
Grand total45,1622,623,00029,3821,936

(1)

Casino square footage is approximate and includes the gaming floor, race and sports, high limit areas and casino specific walkways, and excludes casino cage and other non-gaming space within the casino area.

(2)(1)Casino square footage is approximate and includes the gaming floor, race and sports, high limit areas and casino specific walkways, and excludes casino cage and other non-gaming space within the casino area.

Includes slot machines, video poker machines and other electronic gaming devices.

(3)(2)Includes slot machines, video poker machines and other electronic gaming devices. Also include 172 and 187 gaming devices temporarily out of service due to COVID-19 restrictions at MGM Macau and MGM Cotai, respectively.

Includes blackjack (“21”), baccarat, craps, roulette and other table games; does not include poker.

(4)(3)Includes blackjack (“21”), baccarat, craps, roulette and other table games; does not include poker. MGM China gaming tables reflect the permanent table count, excludes temporary tables.

Includes 1,078 rooms at The Signature at MGM Grand Las Vegas.

(5)(4)Includes 1,495 condominium-hotel units at Vdara, which are predominantly utilized as company-owned hotel rooms.

Includes 1,117 rooms at the Delano and 424 rooms at the Four Seasons Hotel.

(6)(5)Includes 1,078 rooms at The Signature at MGM Grand Las Vegas.

Includes 293 rooms at NoMad Las Vegas.

(7)(6)Includes 1,117 rooms at the Delano and 424 rooms at the Four Seasons Hotel.

Our local investors have an ownership interest of approximately 3% of MGM Grand Detroit.

(8)(7)Includes 293 rooms at NoMad Las Vegas.

Our local investors have a non-voting economic interest in MGM National Harbor. Refer to Note 2 in the accompanying consolidated financial statements for further description of such interest.

(9)(8)Our local investors have an ownership interest of approximately 3% of MGM Grand Detroit.

Our local investor has a 1% ownership interest in MGM Springfield.

(10)(9)Our local investors have a non-voting economic interest in MGM National Harbor. Refer to Note 2 in the accompanying consolidated financial statements for further description of such interest.

Includes Aria with 4,004 rooms. Vdara includes 1,495 condo-hotel units, which are predominantly utilized as company-owned hotel rooms. The other 50% of CityCenter is owned by Infinity World Development Corp.


(10)Our local investor has a non-voting economic interest in MGM Springfield.


6

Customers and Competition

Our casino resortsproperties operate in highly competitive environments. We compete against gaming companies, as well as other hospitality companies in the markets in which we operate, neighboring markets, and in other parts of the world, including non-gaming resort destinations such as Hawaii. Our gaming operations compete to a lesser extent with state-sponsored lotteries, off-track wagering, card parlors, online gamblingiGaming and other forms of legalized gaming in the United States and internationally. For further discussion of the potential impact of competitive conditions on our business, see “Risk“Item 1A. Risk Factors — Risks Related to our Business.”Business, Industry, and Market Conditions — We face significant competition with respect to destination travel locations generally and with respect to our peers in the industries in which we compete, including increased competition through online sports betting and iGaming, and failure to compete effectively could materially adversely affect our business, financial condition, results of operations and cash flow.”


Our primary methods of successful competition include:

•

Locating our resorts in desirable leisure and business travel markets and operating at superior sites within those markets;

•Locating our resorts in desirable leisure and business travel markets and operating at superior sites within those markets;

Constructing and maintaining high-quality resorts and facilities, including luxurious guestrooms, state-of-the-art convention facilities and premier dining, entertainment, retail and other amenities;

•Constructing and maintaining high-quality resorts and facilities, including luxurious guestrooms, state-of-the-art convention facilities and premier dining, entertainment, retail and other amenities;

Recruiting, training and retaining well-qualified and motivated employees who provide superior customer service;

•Recruiting, training and retaining well-qualified and motivated employees who provide superior customer service;

Providing unique, “must-see” entertainment attractions; and

•Providing unique, “must-see” entertainment attractions; and

Developing distinctive and memorable marketing, promotional and customer loyalty programs.

•Developing distinctive and memorable marketing, promotional and customer loyalty programs.

Las Vegas Strip Resorts and Regional Operations


Our customers include premium gaming customers; leisure and wholesale travel customers; business travelers, and group customers, including conventions, trade associations, and small meetings. We have a completediverse portfolio of resortsproperties, which appeal to the upper end of each market segment and also cater to leisure and value-oriented tour and travel customers. Many of our resortsproperties have significant convention and meeting space which we utilize to drive business to our resortsproperties during mid-weekmidweek and off-peak periods.


Our Las Vegas casino resorts compete for customers with a large number of other hotel casinos in the Las Vegas area, including major hotel casinos on or near the Las Vegas Strip, major hotel casinos in the downtown area, which is about five miles from the center of the Las Vegas Strip, and several major hotel casinos elsewhere in the Las Vegas area. Our Las Vegas Strip Resorts also compete, in part, with each other. Major competitors, including new entrants, have either recently expanded their hotel room capacity and convention space offerings, or have plans to expand their capacity or construct new resorts in Las Vegas. Also, the growth of gaming in areas outside Las Vegas has increased the competition faced by our operations in Las Vegas.


Outside Nevada, our resorts primarily compete with other hotel casinos in their markets and for customers in surrounding regional gaming markets, where location is a critical factor to success. In addition, we compete with gaming operations in surrounding jurisdictions and other leisure destinations in each region.


MGM China


The three primary customer bases in the Macau gaming market are VIP gaming operations, main floor gaming operations and slot machine operations. VIP gaming play ishas historically been sourced both internally and externally. Externally sourced VIP gaming play iswas obtained through external gaming promoters who assist VIP players with their travel and entertainment arrangements. Gaming promoters arehave been compensated through payment of revenue-sharing arrangements and rolling chip turnover-based commissions. In-house VIP players also typically receive a commission based on the program in which they participate. Unlike gaming promoters and in-house VIP players, main floor players do not receive commissions. The profit contribution from the main floor gaming operations exceedshas historically exceeded the VIP gaming operations due to commission costs paid to gaming promoters. We offer amenities to attract players such as premium gaming lounges and stadium-style electronic table games terminals, which include both table games and slots to create a dedicated exclusive gaming space for premium main floor players’ use, as well as non-gaming amenities, such as The Mansion and Mansion OneMGM Cotai Emerald Villa to attract ultra-high end customers.


VIP gaming at MGM China is conducted by the use of special purpose nonnegotiable gaming chips. Gaming promoters currently purchase these nonnegotiable chips and in turn they sell these chips to their players. The nonnegotiable chips allow us to track the amount of wagering conducted by each gaming promoters’ clients in order to determine VIP gaming play. Gaming promoter commissions are currently based on a percentage of the gross table games win or a percentage of the table games turnover they generate. They also receive a complimentary allowance based on a percentage of the table games turnover they generate, which can be applied to hotel rooms, food and beverage and other discretionary customers-related
7

customer-related expenses. Gaming promoter commissions are recorded as a reduction of casino revenue. In-house VIP commissions are based on a percentage of rolling chip turnover and are recorded as a reduction of casino revenue.



In December 2021, we suspended operations with our primary gaming promoters. In January 2022, the Macau Government disclosed the content of a bill to amend the gaming law which includes some restrictions relating to gaming promoters, including: each gaming promoter can only exercise the activity of gaming promotion for one concessionaire, revenue sharing arrangements between concessionaires and gaming promoters are prohibited, gaming promoters are prohibited from having exclusive operation of casino reserved areas, and gaming promoters are restricted to only providing support to the concessionaires in the promotion of casino gaming activities through commissions. The bill is subject to debate and approval by the Macau Legislative Assembly.

We have focused our business on main floor gaming operations and, accordingly, we do not expect VIP gaming operations to be a significant source of revenue in future years. The majority of MGM China's casino revenue has been provided by main floor gaming operations in recent years and we expect this customer base will be the primary source of growth in the future.

Our key competitors in Macau include five other gaming concessionaires and subconcessionaires. If the Macau government were to grant additional concessions or subconcessions, we would face additional competition which could have a material adverse effect on our financial condition, results of operations or cash flows. Additionally, we face competition at our Macau and Cotai properties from concessionaires who have expanded their operations, primarily on the Cotai Strip.

We encounter competition from major gaming centers located in other areas of Asia and around the world including, but not limited to, Singapore, South Korea, Vietnam, Cambodia, the Philippines, Australia, and Las Vegas.


Marketing


Our marketing efforts are conducted through various means, including our loyalty programs. We advertise on radio, television, internet and billboards and in newspapers and magazines in selected cities throughout the United States and overseas, as well as by direct mail, email and through the use of social media. We also advertise through our regional marketing offices located in major U.S. and foreign cities. Our direct marketing efforts utilize advanced analytic techniques that identify customer preferences and help predict future customer behavior, allowing us to make more relevant offers to customers, influence incremental visits, and help build lasting customer relationships.

M life


MGM Rewards, our customer loyalty program, is a tiered program and allows customers to qualify for benefits across our participating resorts and in both gaming and non-gaming areas, encouraging customers to keep their total spend within our casino resorts. In January 2022, we redesigned our loyalty program to expand the ways in which our customers can earn benefits. We also offer the Golden Lion Club for gaming focused customers, in addition to M life Rewards, at MGM China. The structured rewards systems based on member value and tier level ensure that customers can progressively access the full range of services that the resorts provide. Our loyalty programs focus on building a rewarding relationship with our customers, encouraging members to increase both visitation and spend.


Strategy


We strive to be the recognized globala leader in the global gaming, entertainment and hospitality embracing innovationindustry that delivers extraordinary entertainment across a portfolio of properties in the United States and diversity to inspire excellence. Macau. The quality of our resortsproperties and amenities can be measuredis evidenced by our success in winning numerous awards, both domestic and globally, including several Four and Five Diamond designations from the American Automobile Association, as well as multiple Four and Five Star designations from Forbes Travel Guide as well asand numerous certifications of our Corporate Social Responsibility efforts.

Our

In order to achieve our vision of becoming the world's premier gaming entertainment company, we developed our strategic objectives include:

•

Operational enhancements. Drive continuous improvements in operational performance to support enterprise-wide increases in revenue, market share, cash flow, and margins;

plan, which centers on four pillars:

•

Financial strength.Accelerate financial performance through optimal capital structure and disciplined investment of cash flows;

•Strong People and Culture. Recruit, develop and retain the best talent. Foster a culture of diversity and inclusion. Invest in the employee experience.

Corporate social responsibility. Continue to solidify the Company’s reputation as a global leader in the principles of Corporate Social Responsibility;

•Customer-Centric Model. Leverage a customer-centric model reinforced by a strong brand and deep customer insights to provide unmatched entertainment experiences for our guests and drive top-line growth.

Geographic expansion. Execute a targeted approach to domestic and international expansion to increase global brand presence; and

•Operational Excellence. Operating model refinement to maximize operating efficiencies and expand margins. Enhancement of digital capabilities to strengthen customer loyalty.

Business model innovation. Explore the evolution of the existing business model into new lines of business and key adjacencies.

•Disciplined Capital Allocation to Maximize Shareholder Value. Pursuit of targeted, attractive ROI opportunities that align to our strategic vision. Focus on shareholder returns. Fortify balance sheet.

8

Due to the COVID-19 pandemic and the resulting rapidly changing environment, our strategic direction must allow for flexibility. The strategic plan was developed with the intent to regularly revisit, measure, and reevaluate for emerging opportunities.

In allocating resources, our financial strategy is focused on managing a proper mix of investinginvestments in our existing resorts, spending onproperties, strategic developments or initiativesgrowth opportunities, debt repayment and repaying long-term debt or returning capital to shareholders.shareholder returns. We believe there are reasonable investments for us to make in new initiatives and at our current resorts that will provide profitable returns.


We regularly evaluate possible expansion and acquisitiontargeted opportunities that provide an attractive return on investment in domestic and international markets. Opportunities we evaluate may includemarkets, including the ownership, management and operation of gaming and other entertainment facilities in Nevada, or in states other than Nevada, or outside of the United States,and accessing new markets for iGaming and online sports and interactive, as well as online gaming.betting. We also leverage our management expertise and well-recognized brands through strategic partnerships and international expansion opportunities. We feel that several of our brands are well-suited to new projects in both gaming and non-gaming developments. We may undertake these opportunities either alone or in cooperation with one or more third parties.

During 2019, we launched the (“MGM 2020 Plan”), a portfolio of Adjusted EBITDAR (as defined herein) improvement initiatives that yielded over $130 million of Adjusted EBITDAR uplift in 2019.


We expect to exceed $200 million by the end of 2020 compared to 2018 results. The initiatives are primarily comprised of labor, sourcing and revenue initiatives. We have continuedcontinue to invest in our operating model by expanding the footprint of our Centers of Excellence and enabling best in class operations through adjustments within corporate and property business units. As part of the second phase of our MGM 2020 Plan, we expect to invest in our digital transformation to drive customer-centric strategy for revenue growth. In addition, we have implemented several improvement and cost cutting initiatives comprised of labor, sourcing, and revenue programs that have further improved our operating model and have positioned us as a stronger company.

We have continued to focus on our key growth opportunities to developof developing an integrated resort in Japan and also continued investmentsinvesting in BetMGM. In September 2021, we, together with our venture partner, ORIX, were selected by Osaka as the region’s integrated resort partner. This selection marks an important step in our long-term bid to develop one of Japan’s first integrated casino resorts. We are currently working with Osaka to submit an area development plan to the central government during the application period. As it relates to BetMGM, we believe that BetMGM is positioned as a long-term leader in the U.S. online sports betting throughand iGaming industries. As part of our venture, Roar Digital LLC.


Technology

We utilize technologycommitment to maximize revenuethe success of BetMGM, we have integrated our MGM Rewards program with BetMGM and have BetMGM branded on-property sportsbooks and kiosks to drive efficiencyhigher value customers at lower acquisition costs through a robust omni-channel strategy. Further, we continue to explore bringing full-scale commercial gaming to Empire City in our operations. Additionally, technology is core to our ability to provide an enhanced customer and employee experience. New York.


Technology

We believe thattechnology, digital platforms and customer experiencesadvanced data science/analytics capabilities are critical to optimizing customer experience and loyalty, employee productivity and engagement, operational efficiency and revenue growth. We are focused on using these capabilities to achieve specific goals of creating ‘only at MGM’ differentiation through unique content and experiences, establishing a perennial engagement with our guests for increased loyalty, digital diversification through enhanced e-commerce and seamless integration of the physical integrated resorts business with digital casino and sports betting businesses, creating cross-property experiences and promotions in Las Vegas to provide much better value to the consumer, enhancing our marketplace and are critical components to drive growthdata driven decisioning capabilities in our business. While we continue to automate variousall aspects of operations in an effort to control costs, we are also investing in infrastructureour business for faster decision making, and platforms unique to MGM such as self-service technology, advanced pricing systems and a host of other platform-based customeroptimizing our operations and employee services. Our team of world class product leadersproductivity and technologists leverage the newest advancements in technology including cloud, advanced analytics, and other methods to ensure speed to market and security of our platforms. For example, our commerce and digital platforms provide our customers the ability to create an itinerary of experiences including self-service booking of accommodations, dining and entertainment, with pricing options unique and specific to them based on their relationship or loyalty status with us. We expect continued and incremental investment in this area as part of the second phase of our MGM 2020 Plan.

Commitment to Employees

We believe that knowledgeable, friendly and dedicated employees are a primary success factor in the hospitality industry. Therefore, we invest heavily in recruiting, training, motivating and retaining exceptional employees, and we seek to hire and promote the strongest management team possible. We have numerous programs, both at the corporate and business unit level, designed to achieve these objectives. We believe in the importance of developing our employeesexperience through training and advanced education. Our Pathways Educational Program provides tuition reimbursement and our College Opportunity Program, in partnership with the Nevada System of Higher Education, provides online education at no cost to eligibledigitization.


Environmental & Social Responsibility

At MGM Resorts employees inwe have had a long-standing commitment to environmental and social responsibility. For over a decade, we have had a dedicated board committee focused on Corporate Social Responsibility (“CSR”). In 2019, we had bolstered governance of these topics by uniting our key pillars of Diversity and Inclusion, Philanthropy and Community Engagement and Environmental Sustainability under one Executive Committee-level leader who manages the United States. We also offer a student Loan Debt Assistance Program that will match a portion of monthly student loan debt payments for qualifying employees. The MGM Resorts Scholarship Program for ChildrenSocial Impact and Sustainability Center of Employees awards scholarshipsExcellence, reports directly to selected children of our full-time domestic employees (excluding executives) based on financial needthe Chief Executive Officer and academic performance.

Corporate Social Responsibility

We believe that profitabilityPresident, and social responsibility can be linked for long-term sustainabilityserves as liaison to the CSR and profitability in furtherance of valueSustainability board committee. This leader now also oversees the Human Resources function, and is thus able to all our stakeholders – our shareholders, our employees, our customers and our communities.

We have a bold vision for how our company will lead the way in social impact and environmental sustainability in the years to come. Focused on What Matters: Embracing Humanity and Protecting the Planet articulates our purpose and our commitment to a set of priorities and goals that we hope can have an enduring impact on the world. We have aligned our efforts with a growing interest from investors to define a set ofintegrate Environmental, Social and Governance criteria(“ESG”) considerations more deeply into the core culture of our organization.


The year 2021 was a critical one in terms of progress on our ESG initiatives. In May 2021, we published our 2020 Social Impact & Sustainability Report containing our most robust ESG disclosures to date. In this report we showed the significant progress made towards many of our ESG goals that assistswe had announced publicly in identifying companiesprior reports, and we expect to publish a report in 2022 reflecting our progress on these goals during 2021.

Importantly, 2021 saw the opening of the 100MW “MGM Resorts Mega Solar Array” in North Las Vegas. This is the hospitality industry’s largest direct-connect renewable electricity project world-wide and has significantly improved our trajectory to achieve our previously announced carbon reduction goals. In connection with values that match their own. Focused on What Matters: Embracing Humanitythe opening of this array, we enhanced our climate ambition by announcing two new 2030 goals: to cut global total operational carbon emissions by
9

50%, and Protectingsource 100% renewable electricity in the Planet definesUSA. Beyond the environmental benefits associated with the renewable electricity generated, the array will also help us hedge our environmental sustainabilityelectricity costs and social impact strategy in four critical areas: Fostering Diversity and Inclusion, Investing in Community, Caring for One Another and Protecting the Planet. reduce our exposure to price volatility risks.

In each of these areas2021, we have adopted goalsalso made substantial progress against which we will chart our progress. We have aligned our goals and our social impact and environmental sustainability priorities to the United Nations Sustainable Development Goals. Focused on What Matters reaffirms our commitment to aligning more of our guests, employees and partners;ESG report disclosures to the communities we call home and to the planet we must protect.

Through investment of many years of dedicated effort and resources,leading ESG frameworks by publishing our evolving social impact strategy – grounded in prudent fiscal management and long-term focused strategies – have advanced us beyond leadership in the gaming and hospitality industry to national recognition for our accomplishments.

Our core values of integrity, inclusion, teamwork and excellence shape our character and culture, the way we do business, and our CSR practices. Four strategic pillars guide our work.

Fostering diversity and inclusion. Our commitment to inclusion translates diversity as a fundamental paradigmfirst ever disclosures informed by guidelines of the 21st century global economy into long-term human capital leadership, customer market expansionGlobal Reporting Initiative (GRI) and competitive business advantage. Inclusion is an important, multi-dimensional business imperative that attracts top talent; drives our cultureSustainability Accounting Standards Board (SASB) Hotels & Lodging and Casinos & Gaming Sector Standards.


Our full list of respect for humanity; leverages the broad diversity of our employees’ talents to drive excellence in collaboration, innovationESG goals and financial performance; fuels expansion of our customer markets and supply chain; and forges stronger ties with our communities around the world.

Investing in community.  The communities in which we operate, and our employees live, work and care for their families,performance against them are cornerstones of our business. We create economic opportunity for local residents, collaborate to promote educational and develop skills of local workforces, engage local businesses, and stimulate economic developmentavailable in our communities. We promote responsible gaming practices2020 Social Impact & Sustainability Report, available at mgmresorts.com/focused. The content on this website and tools,report is for informational purposes only and such as GameSense, that keep gaming safe and entertaining. Beyond our tax support of public education, infrastructure and services, we make philanthropic and development-related investments in long-term institutions that benefit our employees and customers and elevate the quality of life and culture in our communities.


Caring for one another.  We believe caring for less fortunate community neighborscontent is a deep-rooted part of our culture, and our actions help uplift the communities in which we operate, while simultaneously instilling employee pride and engagement in our business. Through three primary channels – our employee-driven MGM Resorts Foundation, our Employee Volunteer Program and our Corporate Giving Program, we contribute leadership, funding and manpower to an extensive array of nonprofit organizations that provide services, goods and resources indispensable to our communities’ well-being, development and stability.

Protecting the Planet. We continue to gain recognition for our comprehensive environmental responsibility initiatives in energy and water conservation, recycling and waste management, sustainable supply chain and green construction. Many of our resorts have earned certification from Green Key, one of the largest international programs evaluating environmental sustainability in hotel operations. Aria, Vdara, Bellagio, Delano, Mandalay Bay, and MGM Grand Detroit have all received “Five Green Key,” the highest possible rating. Many major travel service providers recognize the Green Key designation and identify our resorts for their continued commitment to sustainable hotel operations.

In addition, we believe that incorporating the tenets of environmental sustainability in our business decisions advances a platform for innovation and operational efficiency. CityCenter (Aria, Vdara and Veer) is one of the world’s largest private sustainable developments. With six LEED® Gold certifications from the U.S. Green Building Council (the “Council”), CityCenter serves as the standard for combining luxury and environmental responsibility within the large-scale hospitality industry. Also, MGM National Harbor, The Park, and T-Mobile Arena have all been awarded LEED® Gold certificationnot incorporated by the Council.

At MGM China, we incorporate the same commitment to environmental preservation. MGM Cotai has achieved the China Green Building (Macau) Design label from the China Green Building and Energy Saving (Macau) Association.

Intellectual Property

reference into this Annual Report on Form 10-K.


Trademarks

Our principal intellectual property consists of trademarks for, among others, Aria, Vdara, Bellagio, The Mirage, Borgata, Mandalay Bay, MGM, MGM Grand, MGM Resorts International, Luxor, Excalibur, New York-New York, Beau Rivage and Empire City, all of which have been registered or allowed in various classes in the United States. In addition, we have also registered or applied to register numerous other trademarks in connection with our properties, facilities and development projects in the United States and in various other foreign jurisdictions. These trademarks are brand names under which we market our properties and services. We consider these brand names to be important to our business since they have the effect of developing brand identification. We believe that the name recognition, reputation and image that we have developed attract customers to our facilities. Once granted, our trademark registrations are of perpetual duration so long as they are used and periodically renewed. It is our intent to pursue and maintain our trademark registrations consistent with our goals for brand development and identification, and enforcement of our trademark rights.


Human Capital

We are focused on fostering a people-driven culture exemplified by how we lead and uphold our core values, which in 2021 evolved to: captivate our audience, inspire excellence, champion inclusion, and win together, to create an engaged and diverse workforce. Our long-term people strategy is designed to enhance talent attraction and development to support business objectives, guest experience, community engagement, and financial goals. Our workforce development strategies support local hiring and developing a robust workforce in the local communities in which we operate through veteran support, community training and employment, fulfilling local hiring commitments (where applicable), and through internship and management development programs.

Growth and Development

We invest significant resources to develop the talent needed, now and in the future, to continue to be a premier employer of choice across the gaming, hospitality, and entertainment industries. We are committed to a culture of continuous learning where employees, at all levels, are engaged in developing their knowledge, skills, and abilities and we support the long-term career aspirations of our employees through education and professional/personal development. In 2021, we introduced several new learning and development initiatives focused on a broad range of employee segments. Except as otherwise temporarily impacted due to COVID-19, we offer tuition reimbursement, contribute toward student loan debt repayment, and have partnered with the Nevada System of Higher Education to allow employees to earn a degree online free of charge for all credit hours.

Equity, Diversity, and Inclusion (“ED&I”)

Our approach to ED&I is anchored by our corporate and people strategies and a social impact and sustainability approach that centers on embracing humanity and protecting the planet. A concise framework lays out four strategic pillars to guide our work: invest in people; build an inclusive culture; grow business and customer engagement and supplier diversity; and, enhance marketplace leadership and community relations. As part of our commitment, we have committed to the following four long-range goals: (1) ensure that all employees have equal access to leadership opportunities, (2) spend at least 10% of our biddable procurement with diverse suppliers, (3) expand our Supplier Diversity Mentorship Program to achieve 50 graduates and (4) train 100% of management employees on social impact policies and goals. In connection with each goal, we have established robust key performance indicators, which are tracked and published in our annual Social Impact and Sustainability Report.In addition, we have detailed internal Human Capital workforce reports, which include demographic and diversity data, and are reviewed with the Corporate Social Responsibility and Sustainability Committee of the Board, leadership teams and executive management on a regular basis.

10

Internally, we use multiple channels to facilitate communication and to continuously advance our core value of inclusiveness. The channels include but are not limited to open forums with executives, employee engagement surveys with detailed action planning, and employee network groups.

Work in the area of equity, diversity and inclusion is advanced through a range of programs and initiatives which include education and training, community partnerships, recruitment and talent development, advocacy, engagement and outreach. Responsibility is driven and led by the Company’s Chief People, Inclusion and Sustainability Officer, who reports directly to the Chief Executive Officer and President, and is supported by a centralized diversity and inclusion team and the Human Resources department.

Health, Safety, and Wellness

In order to promote our culture of overall employee health and wellness we provide benefits, tools and resources to help maintain or improve physical, mental, and financial health. We continue to align benefit offerings to the needs of a diverse workforce across an expanded regional presence and leverage innovative solutions to expand access to health and wellness resources, including the recent addition of a service to help connect LGBTQIA+ people and their loved ones with culturally and clinically competent health care providers.

To ensure our employees' continued health, safety, and wellness in response to COVID-19, we coordinated with medical experts to put in place extensive testing protocols for our employees and required COVID-19 vaccination as a condition of employment for all salaried employees and new hires throughout the United States. As a commitment to our employees impacted by the pandemic, we have maintained benefits eligibility for many employees who were furloughed in 2020 and were unable to work enough hours to qualify for benefits until business conditions improved.

Community Engagement and Philanthropy

Our philanthropic focus centers around: Embracing Humanity and Protecting the Planet. We organize our major programs and initiatives under the pillars of caring for one another and investing in the community. We established the MGM Resorts Foundation in 2002 as an engagement opportunity for employees to contribute to charitable causes, which provides two types of grants (1) the Employee Emergency Grant, which benefits our employees, and (2) the Community Grant, which benefits local communities. We endeavor to care for our communities through volunteerism and philanthropy and encourage all of our employees to volunteer through a variety of programs. In addition, we offer opportunities for our employees to give back to their communities, including through programs such as VolunteerREWARDS, which provides employees with opportunities to earn grant money to their charity of choice based on volunteer hours.

Employees and Labor Relations


As of December 31, 2019,2021, we had approximately 52,00042,000 full-time and 18,00017,000 part-time employees domestically, of which approximately 6,000 and 3,000, respectively, support the Company’s management agreements with CityCenter.domestically. In addition, we had approximately 11,00010,000 employees at MGM China. We had collective bargaining agreements with unions covering approximately 38,00035,000 of our employees as of December 31, 2019.2021. Collective bargaining agreements covering a number of employee job classifications inmultiple bargaining units at our Regional Operations and Las Vegas propertiesStrip Resorts are scheduled to expire in 2022. This includes all bargaining units at Gold Strike Tunica in Mississippi, all bargaining units at Borgata in Atlantic City, our hotel/food & beverage bargaining unit at MGM National Harbor, and all valet operations in Las Vegas (with the first halfexception of 2020. We anticipate negotiationsThe Signature). Negotiations for successor contracts covering those employees are being scheduled as expiration dates approach and will begin in the first quarter of 2020. In addition, in our regional properties, successor collective bargaining agreements will be negotiated in 2020 for MGM Grand Detroit, Borgata and Empire City.  Negotiations for first time collective bargaining agreements are underway for employee bargaining units at MGM National Harbor, MGM Grand Las Vegas, MGM Northfield Park, and the MGM Resorts Operations Contact Center in Las Vegas.continue throughout 2022. As of December 31, 2019,2021, none of the employees of MGM China are part of a labor union and the MGM China resorts are not party to any collective bargaining agreements.


Government Regulation and Licensing


The gaming industry is highly regulated, and we must maintain our licenses and pay gaming taxes to continue our operations. Each of our casinos is subject to extensive regulation under the laws, rules and regulations of the jurisdiction in which it is located. These laws, rules and regulations generally concern the responsibility, financial stability and character of the owners, managers, and persons with financial interest in the gaming operations. Violations of laws in one jurisdiction could result in disciplinary action in other jurisdictions.



A more detailed description of the gaming regulations to which we are subject is contained in Exhibit 99.1 to this Annual Report on Form 10-K, which Exhibit is incorporated herein by reference.

Our businesses are subject to various federal, state, local and foreign laws and regulations affecting businesses in general. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, smoking, employees, currency transactions, taxation, zoning and building codes (including regulations under
11

the Americans with Disabilities Act, which requires all public accommodations to meet certain federal requirements related to access and use by persons with disabilities), construction, land use and marketing and advertising. We also deal with significant amounts of cash in our operations and are subject to various reporting and anti-money laundering regulations. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results.


In addition, we are subject to certain federal, state and local environmental laws, regulations and ordinances, including the Clean Air Act, the Clean Water Act, the Resource Conservation Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act and the Oil Pollution Act of 1990. Under various federal, state and local laws and regulations, an owner or operator of real property may be held liable for the costs of removal or remediation of certain hazardous or toxic substances or wastes located on its property, regardless of whether or not the present owner or operator knows of, or is responsible for, the presence of such substances or wastes. We have not identified any issues associated with our properties that could reasonably be expected to have an adverse effect on us or the results of our operations.


For a discussion of potential risks to our business relating to regulatory matters, including due to the potential impact of legislative and regulatory changes, please see “Item 1A. Risk Factors — Risks Related to Legal and Regulatory Matters and Changes in Public Policy.”

Cautionary Statement Concerning Forward-Looking Statements


This Form 10-K and our 20192021 Annual Report to Stockholders contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “will,” “may” and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements we make regarding the executionimpact of COVID-19 on our business, our ability to reduce expenses and otherwise maintain our liquidity position during the MGM 2020 Plan and our asset light strategy,pandemic, our ability to generate significant cash flow, execute on ongoing and future projects,strategic initiatives, including the development of an integrated resort in Japan and investments we make in online sports betting and iGaming, the closing of the VICI Transaction, The Cosmopolitan transaction, and The Mirage transaction, amounts we will spend inon 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 or the Operating Partnership, or CityCenterour ability to achieve the benefits of our cost savings initiatives, and amounts projected to be realized as deferred tax assets. The foregoing is not a complete list of all forward-looking statements we make.


Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. 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 to MGP, rent payments to the Bellagio BREIT Venture, and rent we will be required to make in connection with the MGP BREIT Venture lease, and guarantee we provide of the indebtedness of the Bellagio BREIT Venture and will provide for MGP BREIT Venture could adversely affect our development options and financial results and impact our ability to satisfy our obligations;

•

current and future economic, capital and credit market conditions could adversely affect our ability to service or refinance our indebtedness and to make planned expenditures;

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

restrictions and limitations in the agreements governing our senior credit facility and other senior indebtedness could significantly affect our ability to operate our business, as well as significantly affect our liquidity;

•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;

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;

•restrictions and limitations in the agreements governing our senior credit facility and other senior indebtedness could significantly affect our ability to operate our business, as well as significantly affect our liquidity;

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 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 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;

•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;

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;

•potential litigation instituted against us, our transaction counterparties, or our respective directors challenging the VICI Transaction may prevent such transaction from becoming effective within the expected timeframe or at all;

the possibility that we may not realize all of the anticipated benefits of our MGM 2020 Plan or our asset light strategy;


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•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;

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

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

Nearly 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;

•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;

financial, operational, regulatory or other potential challenges that may arise with respect to MGP, as the lessor for a significant portion of our properties, may adversely impair our operations;

•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 MGP has adopted a policy under which certain transactions with us, including transactions involving consideration in excess of $25 million, must be approved in accordance with certain specified procedures;

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

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;

•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;

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 an extension of the subconcession in 2022;

•financial, operational, regulatory or other potential challenges that may arise with respect to MGP, as the lessor for a significant portion of our properties, may adversely impair our operations;

the dependence of MGM Grand Paradise upon gaming promoters for a significant portion of gaming revenues in Macau;

•the fact that MGP has adopted a policy under which certain transactions with us, including transactions involving consideration in excess of $25 million, must be approved in accordance with certain specified procedures;

changes to fiscal and tax policies;

•the concentration of a significant number of our major gaming resorts on the Las Vegas Strip;

our ability to recognize our foreign tax credit deferred tax asset and the variability of the valuation allowance we may apply against such deferred tax asset;

•the fact that we extend credit to a large portion of our customers and we may not be able to collect such gaming receivables;

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

•the potential occurrence of impairments to goodwill, indefinite-lived intangible assets or long-lived assets which could negatively affect future profits;

the concentration of a significant number of our major gaming resorts on the Las Vegas Strip;

•the susceptibility of leisure and business travel, especially travel by air, to global geopolitical events, such as terrorist attacks, other acts of violence, acts of war or hostility or outbreaks of infectious disease (including the COVID-19 pandemic);

the fact that we extend credit to a large portion of our customers and we may not be able to collect such gaming receivables;

•the fact that co-investing in properties or businesses, including our investment in BetMGM, decreases our ability to manage risk;

the potential occurrence of impairments to goodwill, indefinite-lived intangible assets or long-lived assets which could negatively affect future profits;

•the fact that future construction, development, or expansion projects will be subject to significant development and construction risks;

the susceptibility of leisure and business travel, especially travel by air, to global geopolitical events, such as terrorist attacks, other acts of violence, acts of war or hostility or outbreaks of infectious disease (including the recent coronavirus outbreak);

•the fact that our insurance coverage may not be adequate to cover all possible losses that our properties could suffer, our insurance costs may increase and we may not be able to obtain similar insurance coverage in the future;

the fact that co-investing in properties, including our investment in CityCenter, decreases our ability to manage risk;

•the fact that a failure to protect our trademarks could have a negative impact on the value of our brand names and adversely affect our business;

the fact that future construction, development, or expansion projects will be subject to significant development and construction risks;

•the fact that a significant portion of our labor force is covered by collective bargaining agreements;

the fact that our insurance coverage may not be adequate to cover all possible losses that our properties could suffer, our insurance costs may increase and we may not be able to obtain similar insurance coverage in the future;

•the sensitivity of our business to energy prices and a rise in energy prices could harm our operating results;

the fact that a failure to protect our trademarks could have a negative impact on the value of our brand names and adversely affect our business;

•the potential failure of future efforts to expand through investments in other businesses and properties or through alliances or acquisitions, or to divest some of our properties and other assets;

the risks associated with doing business outside of the United States and the impact of any potential violations of the Foreign Corrupt Practices Act or other similar anti-corruption laws;

•the potential that failure to maintain the integrity of our computer systems and internal customer information could result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits or other restrictions on our use or transfer of data;

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

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

the fact that a significant portion of our labor force is covered by collective bargaining agreements;

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

the sensitivity of our business to energy prices and a rise in energy prices could harm our operating results;

•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;

the potential that failure to maintain the integrity of our computer systems and internal customer information could result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits or other restrictions on our use or transfer of data;

•the risks associated with doing business outside of the United States and the impact of any potential violations of the Foreign Corrupt Practices Act or other similar anti-corruption laws;

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

•increases in gaming taxes and fees in the jurisdictions in which we operate;

the potential failure of future efforts to expand through investments in other businesses and properties or through alliances or acquisitions, or to divest some of our properties and other assets;

•our ability to recognize our foreign tax credit deferred tax asset and the variability of the valuation allowance we may apply against such deferred tax asset;

increases in gaming taxes and fees in the jurisdictions in which we operate; and

•changes to fiscal and tax policies;

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

•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 an extension of the subconcession in 2022; and
•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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Any forward-looking statement made by us in this Form 10-K or our 20192021 Annual Report to Stockholders speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. If we update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements.


You should also be aware that while we from time to time communicate with securities analysts, we do not disclose to them any material non-public information, internal forecasts or other confidential business information. Therefore, you should not assume that we agree with any statement or report issued by any analyst, irrespective of the content of the statement or report. To the extent that reports issued by securities analysts contain projections, forecasts or opinions, those reports are not our responsibility and are not endorsed by us.



Information about our Executive Officers


The following table sets forth, as of February 27, 2020,25, 2022, the name, age and position of each of our executive officers. Executive officers are elected by and serve at the pleasure of the Board of Directors.


Name

Age

Position

JamesName

AgePosition
William J. Murren(1)

Hornbuckle

58

64

Chairman and Chief Executive Officer

and President

William J. Hornbuckle

Corey I. Sanders

62

58

President and Chief Operating Officer

Corey I. Sanders

Jonathan S. Halkyard

56

57

Chief Financial Officer and Treasurer

John M. McManus

52

54

Executive Vice President, General Counsel and Secretary

Robert C. Selwood

Tilak Mandadi

64

58

Executive Vice PresidentChief Strategy, Innovation and Chief AccountingTechnology Officer

Atif Rafiq

46

President of Commercial & Growth

(1)

On February 12, 2020, the Company announced that Mr. Murren has informed the Board of Directors that he will step down from his position as Chairman and Chief Executive Officer of the Company prior to the expiration of his contract. He will continue to serve in his current leadership roles until a successor is appointed.

Mr. MurrenHornbuckle has served as Chairman and Chief Executive Officer of the Company since December 2008July 2020 and as President from December 1999 tosince December 2012. He served as Acting Chief Executive Officer from March 2020 to July 2020, as Chief Operating Officer from August 2007 through December 2008. He was Chief Financial Officer from January 1998March 2019 to August 2007 and Treasurer from November 2001 to August 2007.

Mr. Hornbuckle has served as President since December 2012 and as Chief Operating Officer since March 2019. He served2020, as President and Chief Customer Development Officer from December 2018 to February 2019, as Chief Marketing Officer from August 2009 to August 2014 and President and Chief Operating Officer of Mandalay Bay Resort & Casino from April 2005 to August 2009.


Mr. Sanders has served as theChief Operating Officer since December 2020. Previously, he served as Chief Financial Officer and Treasurer sincefrom March 2019. He served2019 to January 2021, as Chief Operating Officer from September 2010 through February 2019, as Chief Operating Officer for the Company’s Core Brand and Regional Properties from August 2009 to September 2010, as Executive Vice President—Operations from August 2007 to August 2009, and as Executive Vice President and Chief Financial Officer for MGM Grand Resorts from April 2005 to August 2007.


Mr. Halkyard has served as Chief Financial Officer and Treasurer since January 2021. Prior to joining the Company, Mr. Halkyard served as President and Chief Executive Officer of Extended Stay America, Inc. ("Extended Stay") and its paired-share REIT, ESH Hospitality, Inc., from January 2018 through November 2019, as Chief Financial Officer of Extended Stay from January 2015 through December 2017, and as Chief Operating Officer of Extended Stay from September 2013 through January 2015. Prior to joining Extended Stay, Mr. Halkyard served as Chief Financial Officer of NV Energy, Inc. from July 2012 through September 2013 and, prior to that, he served in various executive, finance and managerial roles at Caesars Entertainment Inc. since 1999, including as Chief Financial Officer from 2006 through 2012.

Mr. McManus has served as Executive Vice President, General Counsel and Secretary since July 2010. He served as Acting General Counsel from December 2009 to July 2010, as a senior member of the Company’s Corporate Legal Department from July 2008 to December 2009, and he served as counsel to various MGM operating subsidiaries from May 2001 to July 2008.


Mr. SelwoodMandadi has served as Executive Vice PresidentChief Strategy, Innovation and Chief AccountingTechnology Officer since August 2007. He served as Senior Vice President—Accounting of the Company from February 2005 to August 2007 and as Vice President—Accounting of the Company from December 2000 to February 2005.

Mr. Rafiq has served as President of Commercial & Growth of the Company since May 2019.July 2021. Prior to joining the Company, Mr. RafiqMandadi served as the ChiefExecutive Vice President of Digital Officer and Global Chief InformationTechnology Officer at Volvo Car AB since January 2017for Disney Parks, Experiences and priorProducts, Inc. from March 2013. Prior to that,joining Disney, Mr. Mandadi served as Chief Digital Officer and Corporate Senior Vice President at McDonald’sof Digital for American Express Company from 2013 through 2016.

July 2006 to March 2013.


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Available Information


We maintain a website at www.mgmresorts.com that includes financial and other information for investors. We provide access to our SEC filings, including our annual report on Form 10-K and quarterly reports on Form 10-Q (including related filings in XBRL format), filed and furnished current reports on Form 8-K, and amendments to those reports on our website, free of charge, through a link to the SEC’s EDGAR database. Through that link, our filings are available as soon as reasonably practicable after we file or furnish the documents with the SEC. These filings are also available on the SEC’s website at www.sec.gov.


Because of the time differences between Macau and the United States, we also use our corporate website as a means of posting important information about MGM China.


References in this document to our website address do not incorporate by reference the information contained on the websites into this Annual Report on Form 10-K.



ITEM 1A.

ITEM 1A.    RISK FACTORS


You should be aware that the occurrence of any of the events described in this section and elsewhere in this report or in any other of our filings with the SEC could have a material adverse effect on our business, financial position, results of operations and cash flows. In evaluating us, you should consider carefully, among other things, the risks described below.


Summary of Risk Factors

The following is a summary of the principal risks that could adversely affect our business, operations and financial results.

Risks RelatingRelated to Our Substantial Indebtedness

Financial Commitments


•Our substantial indebtedness and significant financial commitments, including the fixed component of our rent payments and our debt guarantees we provide on the indebtedness of Bellagio BREIT Venture and MGP BREIT Venture could adversely affect our operations 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 or make planned expenditures.
•The agreements governing our senior credit facility and other senior indebtedness contain restrictions and limitations that could significantly affect our ability to operate our business, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations.
•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 initiatives, service our indebtedness and limit our ability to react to competitive and economic changes.

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.
•The potential litigation instituted against us, our transaction counterparties, or our respective directors challenging the VICI Transaction may prevent such transaction from becoming effective within the expected timeframe or at all.

Risks Related to Our Business, Industry, and Market Conditions

•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.
•We face significant competition with respect to destination travel locations generally and with respect to our peers in the industries in which we compete, including increased competition through online sports betting and iGaming, and failure to compete effectively could materially adversely affect our business, financial condition, results of operations and cash flows.
•Our business is affected by economic and market conditions in the jurisdictions in which we operate and in the locations in which our customers reside.
•We may not realize all of the anticipated benefits of our cost savings initiatives, including those associated with our MGM 2020 Plan.
15

•Our ability to pay ongoing regular dividends to our stockholders is subject to the discretion of our board of directors and may be limited by our holding company structure, existing and future debt agreements entered into by us or our subsidiaries and state law requirements.
•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.
•Paul Salem, our Chairman, Daniel J. Taylor, one of our directors, and Corey Sanders, and John M. McManus, members of our senior management, may have actual or potential conflicts of interest because of their positions at MGP.
•Despite our ability to exercise control over the affairs of MGP as a result of our ownership of the single outstanding Class B share of MGP, MGP has adopted a policy under which certain transactions with us, including transactions involving consideration in excess of $25 million, must be approved in accordance with certain specified procedures, which could affect our ability to execute our operational and strategic objectives.
•Because a significant number of our major gaming resorts are concentrated on the Las Vegas Strip, we are subject to greater risks than a gaming company that is more geographically diversified.
•We extend credit to a large portion of our customers and we may not be able to collect gaming receivables.
•We may incur impairments to goodwill, indefinite-lived intangible assets, or long-lived assets which could negatively affect our future profits.
•Leisure and business travel, especially travel by air, are particularly susceptible to global geopolitical events, such as terrorist attacks, other acts of violence or acts of war or hostility or the outbreak of infectious diseases.
•Co-investing in properties or businesses, including our investment in BetMGM, decreases our ability to manage risk.
•Any of our future construction, development or expansion projects will be subject to significant development and construction risks, which could have a material adverse impact on related project timetables, costs and our ability to complete the projects.
•Our insurance coverage may not be adequate to cover all possible losses that our properties could suffer. In addition, our insurance costs may increase and we may not be able to obtain similar insurance coverage in the future.
•Any failure to protect our trademarks could have a negative impact on the value of our brand names and adversely affect our business.
•A significant portion of our labor force is covered by collective bargaining agreements.
•Our business is particularly sensitive to energy prices and a rise in energy prices could harm our operating results.
•We may seek to expand through investments in other businesses and properties or through alliances or acquisitions, and we may also seek to divest some of our properties and other assets, any of which may be unsuccessful.
•The failure to maintain the integrity of our computer systems and customer information could result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits and restrictions on our use of data.
•We are subject to risks related to corporate social responsibility and reputation.
•We are subject to risks and costs related to climate change.

Risks Related to Legal and Regulatory Matters and Changes in Public Policy

•Our businesses are subject to extensive regulation and the cost of compliance or failure to comply with such regulations may adversely affect our business and results of operations.
•Any violation of the Foreign Corrupt Practices Act or any other similar anti-corruption laws could have a negative impact on us.
•If the jurisdictions in which we operate increase gaming taxes and fees, as well as other taxes and fees, our results could be adversely affected.
•The future recognition of our foreign tax credit deferred tax asset is uncertain, and the amount of valuation allowance we may apply against such deferred tax asset may change materially in future periods.
•We face risks related to pending claims that have been, or future claims that may be, brought against us.

Risks Related to Our Macau Operations

•We have agreed not to have any interest or involvement in gaming businesses in China, Macau, Hong Kong and Taiwan, other than through MGM China.
•The Macau government can 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 an extension of the subconcession in 2022, or MGM Grand Paradise may be unsuccessful in obtaining a gaming concession when a new public tender is held by the Macau government, any of
16

which would have a material adverse effect on our business, financial condition, results of operations and cash flows.
•We are subject to risks associated with doing business outside of the United States.
•Conflicts of interest may arise because certain of our directors and officers are also directors of MGM China, the holding company for MGM Grand Paradise which owns and operates MGM Macau and MGM Cotai.

For a more complete discussion of the material risks facing our business, please see below.

Risks Related to Our Substantial Financial Commitments

Our substantial indebtedness and significant financial commitments, including the fixed component of our rent payments and guarantees we provide of the indebtedness of Bellagio BREIT Venture and MGP BREIT Venture could adversely affect our operations and financial results and impact our ability to satisfy our obligations. As of December 31, 2019,2021, we had approximately $11.3$12.9 billion of principal amount of indebtedness outstanding on a consolidated basis. Thebasis, including $4.3 billion of outstanding indebtedness of the Operating Partnership and $3.1 billion of outstanding indebtedness of MGM China, our consolidated subsidiaries, had $4.4 billion and $2.2 billion, respectively, of indebtedness outstanding.China. Any increase in the interest rates applicable to our existing or future borrowings would increase the cost of our indebtedness and reduce the cash flow available to fund our other liquidity needs. We do not guarantee MGM China’s or the Operating Partnership’s obligations under their respective debt agreements and, to the extent MGM China or the Operating Partnership were to cease to produce cash flow sufficient to service their indebtedness, our ability to make additional investments into such entities is limited by the covenants in our existing senior credit facility.


In addition, our substantial indebtedness and significant financial commitments could have important negative consequences on us, including:


•increasing our exposure to general adverse economic and industry conditions;
•limiting our flexibility to plan for, or react to, changes in our business and industry;
•limiting our ability to borrow additional funds for working capital requirements, capital expenditures, debt service requirements, execution of our business strategy (including returning value to our shareholders) or other general operating requirements;
•

increasing our exposure to general adverse economic and industry conditions;

•

limiting our flexibility to plan for, or react to, changes in our business and industry;

•

limiting our ability to borrow additional funds for working capital requirements, capital expenditures, debt service requirements, execution of our business strategy (including returning value to our shareholders) or other general operating requirements;

•

making it more difficult for us to make payments on our indebtedness; or

•

placing us at a competitive disadvantage compared to less-leveraged competitors.

Moreover, our businesses are capital intensive. For our owned, leased and managed resorts to remain attractive and competitive, we must periodically invest significant capital to keep the properties well-maintained, modernized and refurbished. Moreover, our leases with MGP, the Bellagio BREIT Venture, and the MGP BREIT Venture have fixed rental payments (with annual escalators) and also require us to apply a percentage of net revenues generated at the leased properties to capital expenditures at those properties. Such investments require an ongoing supply of cash and, to the extent that we cannot fund expenditures from cash generated by operations, funds must be borrowed or otherwise obtained. Similarly, development projects, including any potential future development of an integrated resort in Japan, and acquisitions could require significant capital commitments, the incurrence of additional debt, guarantees of third-party debt or the incurrence of contingent liabilities, any or all of which could have an adverse effect on our business, financial condition and results of operations.

In addition, our senior credit facility calculates interest on outstanding balances using the London Inter-Bank Offered Rate (“LIBOR”). On July 27, 2017, the United Kingdom Financial Conduct Authority (the "FCA") announced it would phase out LIBOR as a benchmark by the end of 2021. Although our senior credit facility includes LIBOR replacement provisions that contemplate an alternate benchmark rate to be mutually agreed upon by us and the administrative agent, if necessary, any such changes may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made if LIBOR was available in its current form. As a result, there can be no assurance that discontinuation of LIBOR will not result in significant increases in benchmark interest rates, substantially higher financing costs or a shortage of available debt financing, any of which could have an adverse effect on us.

Current and future economic, capital and credit market conditions could adversely affect our ability to service or refinance our indebtedness and to make planned expenditures. Our ability to make payments on, and to refinance, our indebtedness, make our rent payments under our leases and to fund planned or committed capital expenditures and other investments depends on our ability to generate cash flow, receive distributions from our unconsolidated affiliates (including CityCenter) and subsidiaries (including MGM China and the Operating Partnership), borrow under our senior credit facility or incur new indebtedness. If regional and national economic conditions deteriorate, revenues from our operations could decline as consumer spending levels decrease and we could fail to generate cash sufficient to fund our liquidity needs or satisfy the financial and other restrictive covenants in our debt and lease instruments. We cannot assure you that our business will generate sufficient cash flow from operations, or continue to receive distributions from our unconsolidated affiliates and subsidiaries, nor can we assure you that future borrowings will be available to us under our senior secured credit facility in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs or that we will be able to access the capital markets in the future to borrow additional indebtedness on terms that are favorable to us.


We have a significant amount of indebtedness maturing in 2022, and thereafter. Our ability to timely refinance and replace our indebtedness in the future will depend upon the economic and credit market conditions discussed above. If we are unable to refinance our indebtedness on a timely basis, we might be forced to seek alternate forms of financing, dispose of certain assets or minimize capital expenditures and other investments. There is no assurance that any of these alternatives would be available to us, if at all, on satisfactory terms, on terms that would not be disadvantageous to us, or on terms that would not require us to breach the terms and conditions of our existing or future debt agreements or leases.

The agreements governing our senior credit facility and other senior indebtedness contain restrictions and limitations that could significantly affect our ability to operate our business, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations. Covenants governing our senior credit facility and certain of our debt securities restrict, among other things, our ability to:

•

pay dividends or distributions, repurchase equity, prepay certain debt or make certain investments;

•

incur additional debt;

•

incur liens on assets;

•

sell assets or consolidate with another company or sell all or substantially all of our assets;

•

enter into transactions with affiliates;

•

allow certain subsidiaries to transfer assets or enter into certain agreements; and

•

enter into sale and lease-back transactions.

Our ability to comply with these provisions may be affected by events beyond our control. The breach of any such covenants or obligations not otherwise waived or cured could result in a default under the applicable debt obligations and could trigger acceleration of those obligations, which in turn could trigger cross-defaults under other agreements governing our long-term indebtedness. In addition, our senior secured credit facility requires us to satisfy certain financial covenants, including a maximum total net leverage ratio, a maximum first lien net leverage ratio and a minimum interest coverage ratio. Any default under our senior credit facility or the indentures governing our other debt could adversely affect our growth, our financial condition, our results of operations and our ability to make payments on our debt.

In addition, each of MGM China and the Operating Partnership has issued debt securities and isindebtedness; or

•placing us at a borrower under credit facilities, all of which contain covenants that restrict the respective borrower’s abilitycompetitive disadvantage compared to engage in certain transactions, require them to satisfy certain financial covenants and impose certain operating and financial restrictions on them and their respective subsidiaries. These restrictions include, among other things, limitations on their ability to pay dividends or distributions to us, incur additional debt, make investments or engage in other businesses, merge or consolidate with other companies, or transfer or sell assets.

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.less-leveraged competitors. As of December 31, 2019 we are required to make annual rent payments of $946 million under the master lease with MGP and annual rent payments of $245 million under the lease with Bellagio BREIT Venture, and will be required to make annual rent payments of $292 million under the lease with MGP BREIT Venture, which leases are also subject to annual escalators as described elsewhere in this Annual Report on Form 10-K. The leases also require us to spend a certain amount on capital expenditures at the leased properties. As a result of the foregoing rent and capital expenditure obligations, our ability to fund our operations, raise capital, make acquisitions, make investments, service our debt and otherwise respond to competitive and economic changes may be adversely affected. For example, our obligations under the leases may:

•

make it more difficult for us to satisfy our obligations with respect to our indebtedness and to obtain additional indebtedness; 

•

increase our vulnerability to general adverse economic and industry conditions or a downturn in our business;

•

require us to dedicate a substantial portion of our cash flow from operations to making rent payments, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, development projects, pay dividends, repurchase shares and other general corporate purposes;

•

limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; 

•

restrict our ability to make acquisitions, divestitures and engage in other significant transactions; and

•

cause us to lose our rights with respect to the applicable leased properties if we fail to pay rent or other amounts or otherwise default on the leases.

Any of the above factors could have a material adverse effect on our business, financial condition and results of operations.


The Company provides a guarantee of the indebtedness of the Bellagio BREIT Venture and MGP BREIT Venture. We currently also provide a shortfall guaranteeguarantees of the $3.01 billion and $3.0 billion principal amount of indebtedness (and any interest accrued and unpaid thereon) of the Bellagio BREIT Venture and MGP BREIT Venture, respectively. The terms of each guarantee provide that, after the lenders have exhausted certain remedies to collect on the obligations under the underlying indebtedness, we would then be responsible for any shortfall between the value of the collateral and the debt obligation, which amount may be material, and we may not have sufficient cash on hand to fund any such obligation to the extent it is triggered in the future. If we do not have sufficient cash on hand, we may need to raise capital, including incurring additional indebtedness, in order to satisfy our obligation. There can be no assurance that any financing will be available to us, or, if available, will be on terms that are satisfactory to us.


Moreover, our businesses are capital intensive. For our owned, leased and managed resorts to remain attractive and competitive, we must periodically invest significant capital to keep the properties well-maintained, modernized and refurbished. The leases for our operating properties have fixed rental payments (with annual escalators) and also require us to apply a percentage of net revenues generated at the leased properties to capital expenditures at those properties. Such investments require an ongoing supply of cash and, to the extent that we cannot fund expenditures from cash generated by operations, funds must be borrowed or otherwise obtained. Similarly, development projects, including any potential future development of an integrated resort in Japan, strategic initiatives, including positioning BetMGM as a leader in online sports betting and iGaming, and acquisitions could require significant capital commitments, the incurrence of additional debt, guarantees of third-party debt or the incurrence of contingent liabilities, any or all of which could have an adverse effect on our business, financial condition, results of operations and cash flows.

Current and future economic, capital and credit market conditions could adversely affect our ability to service our substantial indebtedness and significant financial commitments or make planned expenditures. Our ability to make payments on our substantial indebtedness and other significant financial commitments, including the rent payments under our leases, and to fund planned or committed capital expenditures and other investments depends on our ability to generate cash flow, receive distributions from our unconsolidated affiliates and subsidiaries (including MGM China and the Operating Partnership), and borrow under our senior credit facility or incur new indebtedness. In 2020 and 2021, the COVID-19 pandemic resulted in significant deterioration to the global economy, and substantial declines in our revenues from operations and expected distributions from our unconsolidated affiliates and subsidiaries. We expect that the recent
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emergence and global spread of COVID-19 variants may continue to impact consumer spending levels in 2022 and potentially thereafter, and if we fail to generate cash sufficient to fund our liquidity needs or satisfy the financial and other covenants in our debt and lease instruments, we cannot assure you that future borrowings will be available to us under our senior secured credit facility in an amount sufficient to enable us to pay our indebtedness or fund our other liquidity needs or that we will be able to access the capital markets in the future to borrow additional debt on terms favorable to us, or at all.

In addition, we have a significant amount of indebtedness maturing in 2022, and thereafter. Our ability to fund or timely refinance and replace our indebtedness will depend upon the economic and credit market conditions discussed above. If we are unable to fund or refinance our indebtedness on a timely basis, we might be forced to seek alternate forms of financing, dispose of certain assets or minimize capital expenditures and other investments. There is no assurance that any of these alternatives would be available to us, if at all, on satisfactory terms, on terms that would not be disadvantageous to us, or on terms that would not require us to breach the terms and conditions of our existing or future debt agreements or leases.

The agreements governing our senior credit facility and other senior indebtedness contain restrictions and limitations that could significantly affect our ability to operate our business, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations. Covenants governing our senior secured credit facility and certain of our debt securities restrict, among other things, our ability to:

•pay dividends or distributions, repurchase equity, prepay certain debt or make certain investments;
•incur additional debt;
•incur liens on assets;
•sell assets or consolidate with another company or sell all or substantially all of our assets;
•enter into transactions with affiliates;
•allow certain subsidiaries to transfer assets or enter into certain agreements; and
•enter into sale and lease-back transactions.

Our ability to comply with these provisions may be affected by events beyond our control. The breach of any such covenants or obligations not otherwise waived or cured could result in a default under the applicable debt obligations and could trigger acceleration of those obligations, which in turn could trigger cross-defaults under other agreements governing our long-term indebtedness. Any default under our senior credit facility or the indentures governing our other debt could adversely affect our growth, our financial condition, our results of operations and our ability to make payments on our debt and other financial commitments.

In addition, each of MGM China and the Operating Partnership has issued debt securities and is a borrower under credit facilities, all of which contain covenants that restrict the respective borrower’s ability to engage in certain transactions, require them to satisfy certain financial covenants and impose certain operating and financial restrictions on them and their respective subsidiaries. These restrictions include, among other things, limitations on their ability to pay dividends or distributions to us, incur additional debt, make investments or engage in other businesses, merge or consolidate with other companies, or transfer or sell assets.

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 initiatives, service our indebtedness and limit our ability to react to competitive and economic changes. As of December 31, 2021 we are required to make annual rent payments of $1.6 billion, in the aggregate, under the triple-net lease agreements, which leases are also subject to annual escalators as described elsewhere in this Annual Report on Form 10-K. The leases also require us to spend a certain amount on capital expenditures at the leased properties. In addition, the leases governing the Bellagio, MGM Grand Las Vegas, Mandalay Bay, Aria (including Vdara) real estate assets require us to comply with certain financial covenants which, if not met, will require us to deposit cash collateral or issue letters of credit for the benefit of the applicable landlord equal to 1 year of rent under the MGM Grand Las Vegas and Mandalay Bay lease and the Aria lease and 2 years of rent under the Bellagio lease. As a result of the foregoing rent and capital expenditure obligations, our ability to fund our operations, raise capital, make acquisitions, make investments, service our debt and otherwise respond to competitive and economic changes may be adversely affected. For example, our obligations under the leases may:

•make it more difficult for us to satisfy our obligations with respect to our indebtedness and to obtain additional indebtedness;
•increase our vulnerability to general adverse economic and industry conditions or a downturn in our business;
•require us to dedicate a substantial portion of our cash flow from operations to making rent payments, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, development projects, pay dividends, repurchase shares and other general corporate purposes;
18

•limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
•restrict our ability to make acquisitions, divestitures and engage in other significant transactions; and
•cause us to lose our rights with respect to the applicable leased properties if we fail to pay rent or other amounts or otherwise default on the leases.

Any of the above factors could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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. Each of the VICI Transaction, The Cosmopolitan transaction and The Mirage transaction is subject to certain closing conditions, which may not be satisfied within the anticipated timeframe or at all. For example, completion of the transactions remains subject to the receipt of certain regulatory approvals. There can be no assurance that any required regulatory approvals will be obtained, and the regulatory authorities from which approvals are required may impose conditions on the consummation of the transaction or require changes to the terms of the transaction or agreements to be entered into in connection with the transaction. Such conditions or changes and the process of obtaining regulatory approvals could have the effect of delaying or impeding the completion of the transactions, which might reduce the anticipated benefits to us of the transaction or have an adverse effect on our business, financial condition and results of operations. The completion of the VICI Transaction is also subject to the satisfaction of additional closing conditions, including, among others, (i) receipt of approval of VICI’s shareholders (which was obtained on October 29, 2021), (ii) the absence of any restraining order, injunction or other judgment, order or decree from any applicable governmental authority prohibiting the consummation of the transaction, (iii) the effectiveness of the registration statement for VICI’s shares to be issued in the VICI Transaction and the authorization for listing of those shares on the New York Stock Exchange, (iv) the absence of a material adverse effect on the parties to the master transaction agreement, (v) the accuracy of each party’s representations and warranties in the master transaction agreement, subject to customary materiality standards, and (vi) compliance of each party with its respective covenants under the master transaction agreement. No assurance can be given that these or any other required conditions to closing will be satisfied. If the conditions precedent to the VICI Transaction are not satisfied, the VICI Transaction will not be completed unless such conditions are validly waived. Such conditions may jeopardize or delay the completion of the transaction or may reduce the anticipated benefits of the transaction.

If any of the transactions are not completed, or are not completed on a timely basis, our business may be adversely affected and, without realizing any of the benefits of having completed such transactions, we may be subject to additional risks, costs and expenses, including, but not limited to, the following:

•we will be required to pay our costs relating to such transactions, such as legal, accounting, financial advisory and printing fees, whether or not the transactions are completed;
•the diversion of time and resources committed by our management to matters relating to the transactions could otherwise have been devoted to pursuing other beneficial opportunities;
•we may be subject to negative publicity or be negatively perceived by the investment or business communities as a result of the failure to consummate any or all of the transactions;
•the price of our shares may decline to the extent that the current market price of our shares reflects a higher price than it otherwise would have based on the assumption that any or all of the transactions will be consummated;
•we would have incurred significant expenses relating to such transactions that we may be unable to recover, including termination fees if applicable; and
•we may be subject to litigation related to the failure to consummate the transactions or to perform our obligations under the respective transaction agreements.

In addition, we entered into the transactions as part of our current growth strategy. Even if the transactions are completed as currently anticipated, there can be no assurances that any anticipated benefits from the transactions will be realized as expected or that such benefits will be achieved within the anticipated time frame or at all. Failure to achieve the anticipated benefits of the transactions could adversely affect our results of operations or cash flows, cause dilution to our earnings per share, decrease or delay any accretive effect of such transactions and negatively impact the price of our common stock.

The potential litigation instituted against us, our transaction counterparties, or our respective directors challenging the proposed VICI Transaction may prevent such transaction from becoming effective within the expected timeframe or at all. Potential litigation related to the VICI Transaction may result in injunctive or other relief prohibiting, delaying or otherwise adversely affecting the parties’ ability to complete the VICI Transaction. One of the conditions to the
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VICI Transaction under the master transaction agreement is that no temporary restraining order, preliminary or permanent injunction or other judgment, order or decree issued by any governmental authority of competent jurisdiction prohibiting consummation of the VICI Transaction or any other transactions contemplated by the master transaction agreement shall be in effect. Accordingly, any such injunctive or other relief may prevent the VICI Transaction from becoming effective within the expected timeframe or at all. In addition, defending against such claims may be expensive and divert management’s attention and resources, which could adversely affect our business and the businesses of the counterparties to such transactions.

Risks Related to Our Business,

Industry, and Market Conditions


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.As of the date of this annual report, there continues to be uncertainty around the COVID-19 pandemic, its duration, and its impact on U.S. and global economic activity and consumer behavior. The omicron variant of COVID-19, which appears to be the most transmissible and contagious variant to date, has caused an increase in COVID-19 cases globally. The impact of the omicron variant, or of any other variants that may emerge, cannot be predicted at this time, and could depend on numerous factors, including the availability of vaccines in different parts of the world, vaccination rates among the population, the effectiveness of COVID-19 vaccines against the variants, and the response by governmental bodies to reinstate mandated business closures, orders to “shelter in place,” occupancy limitations, and travel and transportation restrictions. While restrictions have eased throughout 2021, new restrictions to combat the spread of the variants, such as restrictions and bans on travel or transportation, stay-at-home directives, limitations on the size of gatherings, closures of work facilities, schools, public buildings and businesses, cancellation of events, including sporting events, concerts, conferences and meetings, and quarantines and lock-downs may be put into place in the future. In addition, the spread of new variants, including omicron, has had a material impact on domestic and international travel, which has resulted in reduced demand for hotel rooms, convention space and other casino resorts amenities.
In Macau, while all of our properties were open during 2021, several travel and entry restrictions were in place in Macau, Hong Kong and mainland China (including the temporary suspension of ferry services between Hong Kong and Macau, the 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 MGM Macau and MGM Cotai. In addition, from time to time during 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 MGM Grand Paradise's operations and it is uncertain whether further closures, including the closure of MGM Grand Paradise's properties, or travel restrictions to Macau will be implemented if additional local COVID-19 cases are identified.

The extent to which the COVID-19 pandemic and new variants continue to impact our business, results of operations, and financial results, including the duration and magnitude of such effects, will depend on numerous evolving factors that we may not be able to accurately predict or assess, including, but not limited to: the duration and scope of the pandemic (and whether there is a, or multiple, further resurgences in the future); the efficacy of the vaccine against existing and new variants of the COVID-19 virus; the adoption rate of vaccines and the ability to effectively and efficiently distribute vaccines domestically and internationally to allow travel to resume to pre-pandemic levels; the negative impact the pandemic has on global and regional economies and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence even after travel advisories and restrictions are lifted; our and our business partners' ability to successfully navigate the impacts of the pandemic; actions governments, businesses and individuals take in response to the pandemic (including the rise of variant strains of the virus), such as limiting or banning travel and limiting or banning leisure, casino and entertainment (including sporting events) activities, including the complete or partial closures of our properties; and how quickly economies, travel activity, and demand for gaming, entertainment and leisure activities recovers after the pandemic subsides. We may also face unforeseen liability or be subject to additional obligations as a result of the COVID-19 pandemic, including as a result of claims alleging exposure to COVID-19 in connection with our operations or facilities or to the extent we are subject to a governmental enforcement action as a result of health and safety compliance. The impact of the COVID-19 pandemic may also have the effect of exacerbating many of the other risks described in this section or in any other filings with the SEC. As a result of the foregoing, we cannot predict the ultimate scope, duration and impact the COVID-19 pandemic will have on our results of operations, but it may continue to have a material impact on our business, financial condition, liquidity, results of operations (including revenues and profitability) and stock price.

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We face significant competition with respect to destination travel locations generally and with respect to our peers in the industries in which we compete, including increased competition through online sports betting and iGaming, and failure to compete effectively could materially adversely affect our business, financial condition, results of operations and cash flowflows. The hotel, resort, entertainment, and casinogaming industries are highly competitive. We do not believe that our competition is limited to a particular geographic area, and hotel, resort, entertainment, and gaming operations in other states or countries, as well as the increased availability of online sports betting and iGaming, could attract our customers. To the extent that new casinos enter our markets or hotel room capacity is expanded by others in major destination locations, competition will increase. Major competitors, including potential new entrants, may also expand their hotel room capacity, expand their range of amenities, improve their level of service, or construct new resorts in Las Vegas, Macau or in the domestic regional markets in which we operate, all of which could attract our customers. Also, the growth of retail gaming in areas outside Las Vegas including California, has increased the competition faced by our operations in Las Vegas and elsewhere. For instance, local referendums were recently passed to allow retail gaming in Virginia and Nebraska, with active lobbying occurring in additional states. While we believe our principal competitors are major gaming and hospitality resorts with well-established and recognized brands, we also compete against smaller hotel offerings and peer-to-peer inventory sources, which allow travelers to book short-term rentals of homes and apartments from owners. We expect that we will continue to face increased competition from new channels of distribution, innovations in consumer-facing technology platforms and other transformations in the travel industry that could impact our ability to attract and retain customers and related business.


We have also seen significant expansion across the United States in legalized forms of iGaming and online sports betting and expect additional jurisdictions will likely legalize iGaming and online sports betting in the future. We participate in the domestic iGaming and online sports betting market through our venture, BetMGM, which faces significant competition from other industry participants as well as the broader gaming and entertainment industries. If BetMGM is unable to sustain or grow interest in its offerings it may not be able to gain the scale necessary to successfully compete in the growing market and, as a result, we may not receive the anticipated benefits from our investment. In addition, the expansion of iGaming, online sports betting, and other types of gaming may further compete with our land-based operations by reducing customer visitation and spend at our properties.

In addition, competition could increase if changes in gaming restrictions in the United States and elsewhere result inare enacted, including the addition of new gaming establishments located closer to our customers than our casinos. For example, while our Macau operations compete to some extent with casinos located elsewhere in or near Asia, certain countriesareas in the region have legalized casino gaming (including Japan) and others (such as Taiwan and Thailand) may legalize casino gaming (or online gaming)iGaming) in the future. Furthermore, currently MGM Grand Paradise holds one of only six gaming concessions authorized by the Macau government to operate casinos in Macau. If the Macau government were to allow additional competitors to operate in Macau through the grant of additional concessions or if current concessionaires and subconcessionaires open additional facilities, we would face increased competition.

Similarly, as a result of Macau’s Gaming Inspection and Co-ordination Bureau increasing scrutiny and restrictions imposed on gaming promoters, we along with certain other casino operators in Macau, suspended our primary gaming promoters, which has led to substantial declines in revenues from gaming promoters. As a result, we expect competition for the mass market segment amongst Macau operators will grow and if we are unable to maintain and further develop our mass market business and replace revenue previously obtained through use of gaming promoters, our business, financial condition, results of operations and cash flows could be adversely affected.


Most jurisdictions where casino gaming is currently permitted place numerical and/or geographical limitations on the issuance of new gaming licenses. Although a number of jurisdictions in the United States and foreign countries are considering legalizing or expanding casino gaming, in some cases new gaming operations may be restricted to specific locations and we expect that there will be intense competition for any attractive new opportunities (which may include acquisitions of existing properties) that do arise. Furthermore, certain jurisdictions, including Nevada and New Jersey, have also legalized forms of online gaming and other jurisdictions, including Illinois, have legalized video gaming terminals. Additionally, in May 2018, the United States Supreme Court overturned a federal ban on sports betting that had prohibited single-game gambling in most states, raising the potential for increased competition in sports betting should additional states pass legislation to legalize it.  The expansion of online gaming, sports betting, and other types of gaming in these and other jurisdictions may further compete with our operations by reducing customer visitation and spend in our casino resorts.


In addition to competition with other hotels, resorts and casinos, we compete with destination travel locations outside of the markets in which we operate. Our failure to compete successfully in our various markets and to continue to attract customers could adversely affect our business, financial condition, results of operations and cash flow.

flows.


Our businesses are subject to extensive regulation and the cost of compliance or failure to comply with such regulations may adversely affect our business and results of operations. Our ownership and operation of gaming facilities is subject to extensive regulation by the countries, states and provinces in which we operate. These laws, regulations and ordinances vary from jurisdiction to jurisdiction, but generally concern the responsibility, financial stability and character of the owners and managers of gaming operations as well as persons financially interested or involved in gaming operations. As such, our gaming regulators can require us to disassociate ourselves from suppliers or business partners found unsuitable by the regulators or, alternatively, cease operations in that jurisdiction. In addition, unsuitable activity on our part or on the part of our domestic or foreign unconsolidated affiliates or subsidiaries in any jurisdiction could have a negative effect on our ability to continue operating in other jurisdictions. The regulatory environment in any particular jurisdiction may change in the future and any such change could have a material adverse effect on our results of operations. For example, in 2018, the U.S. Department of Justice (“DOJ”) reversed its previously-issued opinion published in 2011, which stated that interstate transmissions of wire communications that do not relate to a “sporting event or contest” fall outside the purview of the Wire Act of 1961 (“Wire Act”).  The DOJ’s updated opinion concluded instead that the Wire Act was not uniformly limited to gaming relating to sporting events or contests and that certain of its provisions apply to non-sports-related wagering activity. In June 2019, a federal district court in New Hampshire ruled that the DOJ’s new interpretation of the Wire Act was erroneous and vacated DOJ’s new opinion.  DOJ has appealed the decision of the district court to the U.S. Court of Appeals for the First Circuit. An adverse ruling in the Court of Appeals or other disposition of the case may impact our ability to engage in online internet gaming in the future. For a summary of gaming and other regulations that affect our business, see “Regulation and Licensing” and Exhibit 99.1 to this Annual Report on Form 10-K.

Further, our directors, officers, key employees and investors in our properties must meet approval standards of certain state and foreign regulatory authorities. If state regulatory authorities were to find such a person or investor unsuitable, we would be required to sever our relationship with that person or the investor may be required to dispose of his, her or its interest in the property. State regulatory agencies may conduct investigations into the conduct or associations of our directors, officers, key employees or investors to ensure compliance with applicable standards. Certain public and private issuances of securities, borrowings under credit agreements, guarantees of indebtedness and other transactions also require the approval of certain regulatory authorities.

Macau laws and regulations concerning gaming and gaming concessions are complex, and a court or administrative or regulatory body may in the future render an interpretation of these laws and regulations, or issue new or modified regulations, that differ from MGM China’s interpretation, which could have a material adverse effect on its business, financial condition and results of operations. In addition, MGM China’s activities in Macau are subject to administrative review and approval by various government agencies. We cannot assure you that MGM China will be able to obtain all necessary approvals, and any such failure to do so may materially affect its long-term business strategy and operations. Macau laws permit redress to the courts with respect to administrative actions; however, to date such redress is largely untested in relation to gaming issues.

In addition to gaming regulations, we are also subject to various federal, state, local and foreign laws and regulations affecting businesses in general. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, smoking, employees, currency transactions, taxation, zoning and building codes, and marketing and advertising. For instance, we are subject to certain federal, state and local environmental laws, regulations and ordinances, including the Clean Air Act, the Clean Water Act, the Resource Conservation Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act and the Oil Pollution Act of 1990. Under various federal, state and local environmental laws and regulations, an owner or operator of real property may be held liable for the costs of removal or remediation of certain hazardous or toxic substances or wastes located on its property, regardless of whether or not the present owner or operator knows of, or is responsible for, the presence of such substances or wastes. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. For example, Illinois has enacted a ban on smoking in nearly all public places, including bars, restaurants, work places, schools and casinos. In addition, effective January 1, 2019, smoking in casinos in Macau, including MGM Macau and MGM Cotai, will only be permitted inside specially ventilated smoking rooms, rather than outside smoking areas or VIP areas. The likelihood or outcome of similar legislation in other jurisdictions and referendums in the future cannot be predicted, though any smoking ban would be expected to negatively impact our financial performance.

We also deal with significant amounts of cash in our operations and are subject to recordkeeping and reporting obligations as required by various anti-money laundering laws and regulations. For instance, we are subject to regulation under the Currency and Foreign Transactions Reporting Act of 1970, commonly known as the “Bank Secrecy Act,” which, among other things, requires us to report to the Internal Revenue Service (“IRS”) any currency transactions in excess of $10,000 that occur within a 24-hour gaming day, including identification of the individual(s) involved in the currency transaction. We are also required to report certain suspicious activity where we know, suspect or have reason to suspect transactions, among other things, involve funds from illegal activity or are intended to evade federal regulations or avoid reporting requirements or have no business or lawful purpose. In addition, under the Bank Secrecy Act we are subject to various other rules and regulations involving reporting, recordkeeping and retention. Our compliance with the Bank Secrecy Act is subject to periodic examinations by the IRS. Any such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Any violations of the anti-money laundering laws, including the Bank Secrecy Act, or regulations by any of our properties could have an adverse effect on our financial condition, results of operations or cash flows.


Our business is affected by economic and market conditions in the jurisdictions in which we operate and in the locations in which our customers reside. Our business is particularly sensitive to reductions in discretionary consumer spending and corporate spending on conventions, trade shows and business development. EconomicAdverse macroeconomic conditions, including inflation, economic contraction, economic uncertainty or the perception by our customers of weak or weakening economic conditions may cause a decline in demand for hotels, casino resorts, trade shows and conventions, and for the type of luxury amenities we offer. In addition, changes in discretionary consumer spending or consumer preferences could be driven by factors such as the increased cost of travel, an unstable job market, perceived or actual disposable consumer income and wealth, outbreaks of contagious diseases or fears of war and acts of terrorism or other

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acts of violence. Consumer preferences also evolve over time due to a variety of factors, including demographic changes, which, for instance, have resulted in recent growth in consumer demand for non-gaming offerings. Our success depends in part on our ability to anticipate the preferences of consumers and timely react to these trends, and any failure to do so may negatively impact our results of operations. In particular, Aria, Bellagio and MGM Grand Las Vegas may be affected by economic conditions in the Far East, and all of our Nevada resorts are affected by economic conditions in the United States, and California in particular. A recession, economic slowdown or any other significant economic condition, including inflationary pressures, affecting consumers, corporations, or corporationsthe supply chain, generally is likely to cause a reduction in visitation to our resorts, which would adversely affect our operating results.

For example, in December 2019 a new strain of coronavirus (Covid-19) was reported in Wuhan, China. In order to mitigate the spread of the virus, China has placed certain cities under quarantine and advised its citizens to avoid all non-essential travel and other countries, including the U.S., have also restricted inbound travel from China. In addition, China implemented a temporary suspension of its visa scheme that permits mainland Chinesedue to travelthe COVID-19 pandemic, our business has also been impacted by labor shortages and global supply chain disruptions. If we are unable to Macau,hire and on February 4, 2020 the Hong Kong SAR government temporarily suspended all ferry service from Hong Kong to Macau until further notice. The government of Macau also asked that all gaming operators in Macau suspend casino operations for a 15-day period that commenced on February 5, 2020.  As a result, MGM Macau and MGM Cotai suspended all operations at their properties other than operations that were necessary to provideretain sufficient non-gaming facilities to serve any remaining hotel guests. Operations at MGM Macau and MGM Cotai resumed on February 20, 2020; however, there are currently limits on the number of gaming tables allowedemployees to operate and restrictions on the number of seats available at each table, and the temporary suspension of the visa scheme and ferry service to Macau remains in place. The Company is currently unable to predict the duration of theour properties or procure necessary supplies, our business, disruption in Macau or the impact of the reduced customer traffic at the Company’s properties as a result, but we expect the impact could have a material effect on MGM China’s results of operations for the first quarter of 2020 and potentially thereafter. Although the outbreak has been largely concentrated in China, to the extent that the virus impacts the willingness or ability of customers to travel to the Company’s properties in the United States (due to travel restrictions, or otherwise), the Company’s domestic results of operationsreputation could also be negatively impacted. The extent to which the coronavirus impacts the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and any additional actions taken to contain it from spreading.


In addition, since we expect a significant number of customers to come to MGM Macau and MGM Cotai (and, to a lesser extent, our domestic properties) from mainland China, general economic, regulatory, geopolitical and market conditions in China could impact our financial prospects. Any slowdown in economic growth or changes to China’s current restrictions on travel and currency conversion or movements, including continued market impacts from the COVID-19 outbreak and market impacts resulting from China’s recent anti-corruption campaign and related tightening of liquidity provided by non-bank lending entities and cross-border currency monitoring (including increased restrictions on Union Pay withdrawals and other ATM limits on the withdrawal of patacas imposed byand facial recognition technology on ATM machines in Macau to strictly enforce the government)"know your customer" regulations for mainland Chinese bank cardholders), could disrupt the number of visitors from mainland China and/or the amounts they are willing to spend at our properties. Most recently, in July 2017, the Chinese government, along with Macau authorities, implemented new facial recognition technology on ATM machines in Macau to strictly enforce the “know your customer” regulations for mainland Chinese bank cardholders and in November 2017 new rules were adopted to control the cross-border transportation of cash and bearer negotiable instruments. It is unclear whether these and other measures will continue to be in effect, become more restrictive, or be readopted in the future. These developments have had, and any future policy developments that may be implemented may have, the effect of reducing the number of visitors to Macau from mainland China, which could adversely impact tourism and the gaming industry in Macau.

Furthermore, our operations in Macau may be impacted by competition for limited labor resources and our ability to retain and hire employees. We compete with a large number of casino resorts for a limited number of employees and we anticipate that such competition will grow in light of the opening of new developments in Macau. While we seek employees from outside of Macau to adequately staff our resorts, certain Macau government policies limit our ability to import labor in certain job classifications (for instance, the Macau government requires that we only hire Macau residents as dealers in our casinos) and any future government policies that freeze or cancel our ability to import labor could cause labor costs to increase.increase (including limitations on our ability to import labor as a result of temporary travel restrictions adopted as part of the COVID-19 mitigation efforts). Finally, because additional casino projects have commenced operations and other projects are under construction, the existing transportation infrastructure may need to be expanded to accommodate increased visitation to Macau. If transportation facilities to and from Macau are inadequate to meet the demands of an increased volume of gaming customers visiting Macau, the desirability of Macau as a gaming destination, as well as the results of operations at our developments in Macau, could be negatively impacted.



We may not realize all of the anticipated benefits of our cost savings initiatives, including those associated with our MGM 2020 Plan. We have undertaken, and plan to undertake, several initiatives to implement the first phaseAs part of our MGM 2020 Plan, we undertook several initiatives to reduce costs and further position us for growth. While we believe these initiatives will exceed $200 million of annual Adjusted EBITDAR upliftgrowth by the end of 2020, compared to 2018 results, our efforts may fail to achieve expected results. As part2020. In addition, as a result of the second phase ofCOVID-19 pandemic, we implemented several additional cost savings initiatives in 2020 to improve our MGM 2020 Plan,operating model. However, we also expect to invest in our digital transformation to drive customer-centric strategy for revenue growth to drive additional EBITDAR uplift, which efforts may also fail to achieve expected results. Execution of our MGM 2020 Plan is subject to numerous risks and uncertainties that may change at any time, and, therefore, our actual Adjusted EBITDAR uplift may differ materially from what we anticipate.

The anticipated benefits of our asset light strategy, including the Bellagio Sale-Leaseback Transaction and MGP BREIT Venture Transaction, may take longer to realize than expected or may notcannot be realized at all.Our current growth strategy is to pursue and execute on an asset-light business model, which involves a comprehensive review of our owned real estate assets to determine whether those assets can be monetized efficiently to allow unlocked capital to be redeployed towards balance sheet improvements, new growth opportunities and to return value to our shareholders. Our ability to execute on this strategy will depend on our ability to identify accretive transactions that optimize the value of our remaining assets. There can be no assurances, however,sure that we will be able to monetize our remaining real property assets on commercially reasonable terms,successfully implement these cost savings initiatives in the time frames contemplated or at all, that we will ultimately be able to realize the expected benefits of these or any other cost savings initiatives, or that any new additional costs or increases in existing expenses will not offset any cost savings. If we fail to achieve the anticipated benefits fromof any such potential transactions willcurrent or future cost savings initiatives, our profitability and results of operations could be realized.negatively impacted.


Our ability to pay ongoing regular dividends to our stockholders is subject to the discretion of our board of directors and may be limited by our holding company structure, existing and future debt agreements entered into by us or our subsidiaries and state law requirements. WeDuring the COVID-19 pandemic we significantly reduced our historic dividend rate. Although we intend to pay ongoing regular quarterly cash dividends on our common stock; however, our board of directors may, in its sole discretion, change the amount or frequency of dividends or discontinue the payment of dividends entirely. In addition, our ability to pay dividends is restricted by certain covenants in our credit agreement, and because we are a holding company with no material direct operations, we are dependent on receiving cash from our operating subsidiaries to generate the funds from operations necessary to pay dividends on our common stock. We expect ourOur subsidiaries will continueability to generate significantthe cash flow necessary to maintain quarterly dividend payments on our common stock; however, their ability to generate funds will bestock is subject to their operating results, cash requirements and financial condition,condition. In addition, our subsidiaries’ ability to make distributions to us is subject to any applicable provisions of state law that may limit the amount of funds available to us, and compliance with covenants and financial ratios related to existing or future agreements governing any indebtedness at such subsidiaries and any limitations in other agreements such subsidiaries may have with third parties. In addition, each of the companies in our
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corporate chain must manage its assets, liabilities and working capital in order to meet all of their respective cash obligations. As a consequence of these various limitations and restrictions, future dividend payments may be further reduced or eliminated.eliminated in their entirety. Any change in the level of our dividends or the suspension of the payment thereof could adversely affect the market price of our common stock.

Nearly 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. Nearly allAll of our domestic properties are subject to triple-net leases that, in addition to rent, require us to pay: (1) all facility maintenance, (2) all insurance required in connection with the leased properties and the business conducted on the leased properties, (3) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor), (4) all capital expenditures, and (5) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. We are responsible for paying these expenses notwithstanding the fact that many of the benefits received in exchange for such costs shall accrue in part to the landlords as the owners of the associated facilities. Furthermore, our obligation to pay rent as well as the other costs described above is absolute in virtually all circumstances, regardless of the performance of the properties and other circumstances that might abate rent in leases that now place these risks on the tenant, such as certain events of casualty and condemnation.

In addition, under the master lease with MGP, if some of Finally, our facilities should prove to be unprofitable or experience other issues that would warrant ceasing operations, or if we should otherwise decide to exit a particular property, we would remain obligated for lease payments and other obligations even if we decidedleases limit our ability to cease operations at those locations unless we are able to transfer the rights with respect to a particular property in accordance with the requirements of the MGP master lease. Furthermore, our ability to transfer our obligations under the MGP master lease to a third-party with respect to individual properties, should we decide to withdraw from a particular location, is limited to non-Las Vegas properties and no more than two Las Vegas gaming properties, and is subject to identifying a willing third-party who meets the requirements for a transferee set forth in the MGP master lease, which we may be unable to find. In addition, we could incur special charges relating to the closing of such facilities including sublease termination costs, impairment charges and other special charges that would reduce our net income and could have a material adverse effect on our business, financial condition and results of operations.

James J. Murren,certain limited exceptions.


Paul Salem, our Chairman, Daniel J. Taylor, one of our directors, and William J. Hornbuckle,Corey Sanders, and John M. McManus, members of our senior management, may have actual or potential conflicts of interest because of their positions at MGP. James J. MurrenPaul Salem serves as our Chairman and as the Chairman of MGP. In addition, Daniel J. Taylor, one of our directors, is


also a director of MGP, and William J. Hornbuckle,Corey Sanders and John M. McManus, members of our senior management, are also directors of MGP. While we have procedures in place to address such situations and the organizational documents with respect to MGP contain provisions that reduce or eliminate duties (including fiduciary duties) to any MGP shareholder to the fullest extent permitted by law, these overlapping positions could nonetheless create, or appear to create, potential conflicts of interest when our or MGP'sMGP’s management and directors pursue the same corporate opportunities, such as potential acquisition targets, or face decisions that could have different implications for us and MGP. Further, potential conflicts of interest could arise in connection with the resolution of any dispute between us and MGP (or its subsidiaries) regarding the terms of the agreements governing the separation and the relationship, between us and MGP, such as under the MGP master lease. Potential conflicts of interest could also arise if we and MGP enter into any commercial or other adverse arrangements with each other in the future.


Despite our ability to exercise control over the affairs of MGP as a result of our ownership of the single outstanding Class B share of MGP, MGP has adopted a policy under which certain transactions with us, including transactions involving consideration in excess of $25 million, must be approved in accordance with certain specified procedures, which could affect our ability to execute our operational and strategic objectives. We own the single outstanding Class B share of MGP. The Class B Share is a non-economic interest in MGP which does not provide its holder any rights to profits or losses or any rights to receive distributions from operations of MGP or upon liquidation or winding up of MGP, and which represents a majority of the voting power of MGP’s shares so long as the holder of the Class B share and its controlled affiliates’ (excluding MGP) aggregate beneficial ownership of the combined economic interests in MGP and the Operating Partnership does not fall below 30%. We, therefore, have the ability to exercise significant control over MGP’s affairs, including control over the outcome of all matters submitted to MGP’s shareholders for approval.

MGP’s operating agreement, however, provides that whenever a potential conflict of interest exists or arises between us or any of our affiliates (other than MGP and its subsidiaries), on the one hand, and MGP or any of its subsidiaries, on the other hand, any resolution or course of action by MGP’s board of directors in respect of such conflict of interest shall be conclusively deemed to be fair and reasonable to MGP if it is (i) approved by a majority of a conflicts committee which consists solely of “independent” directors (which MGP refers to as “Special Approval”) (such independence determined in accordance with the NYSE’s listing standards, the standards established by the Exchange Act to serve on an audit committee of a board of directors and certain additional independence requirements in our operating agreement), (ii) determined by MGP’s board of directors to be fair and reasonable to MGP or (iii) approved by the affirmative vote of the holders of at least a majority of the voting power of MGP’s outstanding voting shares (excluding voting shares owned by us and our affiliates). Furthermore, MGP’s operating agreement provides that any transaction with a value, individually or in the aggregate, over $25 million between us or any of our affiliates (other than MGP and its subsidiaries), on the one hand, and MGP or any of its subsidiaries, on the other hand (any such transaction (other than the exercise of rights by us or any of our affiliates (other than MGP and its subsidiaries) under any of the material agreements entered into on the closing day of MGP’s formation transactions), a “Threshold Transaction”), shall be permitted only if (i) Special Approval is obtained or (ii) such transaction is approved by the affirmative vote of the holders of at least a majority of the voting power of MGP’s outstanding voting shares (excluding voting shares owned by us and our affiliates).

As a result, certain transactions, including any Threshold Transactions that we may want to pursue with MGP and that could have significant benefit to us may require Special Approval. There can be no assurance that the required approval will be

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obtained with respect to these transactions either from a conflicts committee comprised of independent MGP directors or the affirmative vote of a majority of the shares not held by us and our affiliates. The failure to obtain such requisite consent could materially affect our ability and the cost to execute our operational and strategic objectives.

We have agreed not to have any interest or involvement in gaming businesses in China, Macau, Hong Kong and Taiwan, other than through MGM China

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As a result of the extension of the Macau gaming subconcession, we entered into a First Renewed Deed of Non-Compete Undertakings with MGM China and Ms. Ho, Pansy Catilina Chiu King (“Ms. Ho”), pursuant to which we are restricted from having any interest or involvement in gaming businesses in the People’s Republic of China, Macau, Hong Kong and Taiwan, other than through MGM China. While gaming is currently prohibited in China, Hong Kong and Taiwan, if it is legalized in the future our ability to compete in these locations could be limited until the earliest of (i) the date MGM China’s ordinary shares cease to be listed on The Stock Exchange of Hong Kong Limited or (ii) the date when our ownership of MGM China shares is less than 20% of the then-issued share capital of MGM China.

The Macau government can 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 an extension of the subconcession in 2022, any of which would have a material adverse effect on our business, financial condition, results of operations and cash flows. The Macau government has the right to unilaterally terminate the subconcession in the event of fundamental non-compliance by MGM Grand Paradise with applicable Macau laws or MGM Grand Paradise’s basic obligations under the subconcession contract. MGM Grand Paradise has the opportunity to remedy any such non-compliance with its fundamental obligations under the subconcession contract within a period to be stipulated by the Macau government. Upon such termination, all of MGM Grand Paradise’s casino area premises and gaming-related equipment would be transferred automatically to the Macau government without compensation to MGM Grand Paradise, and we would cease to generate


any revenues from these operations. We cannot assure you that MGM Grand Paradise will perform all of its obligations under the subconcession contract in a way that satisfies the requirements of the Macau government.

Furthermore, under the subconcession contract, MGM Grand Paradise is obligated to comply with any laws and regulations that the Macau government might promulgate in the future. We cannot assure you that MGM Grand Paradise will be able to comply with these laws and regulations or that these laws and regulations would not adversely affect our ability to construct or operate our Macau businesses. If any disagreement arises between MGM Grand Paradise and the Macau government regarding the interpretation of, or MGM Grand Paradise’s compliance with, a provision of the subconcession contract, MGM Grand Paradise will be relying on a consultation and negotiation process with the Macau government. During any consultation or negotiation, MGM Grand Paradise will be obligated to comply with the terms of the subconcession contract as interpreted by the Macau government. Currently, there is no precedent concerning how the Macau government will treat the termination of a concession or subconcession upon the occurrence of any of the circumstances mentioned above. The loss of the subconcession would require us to cease conducting gaming operations in Macau, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition, the subconcession contract expires on June 26, 2022. Unless the subconcession is extended, or legislation with regard to reversion of casino premises is amended, all of MGM Grand Paradise’s casino premises and gaming-related equipment will automatically be transferred to the Macau government on that date without compensation to us, and we will cease to generate any revenues from such gaming operations. Beginning on April 20, 2017, the Macau government may redeem the subconcession contract by providing us at least one year’s prior notice. In the event the Macau government exercises this redemption right, MGM Grand Paradise is entitled to fair compensation or indemnity. The amount of such compensation or indemnity will be determined based on the amount of gaming and non-gaming revenue generated by MGM Grand Paradise, excluding the convention and exhibition facilities, during the taxable year prior to the redemption, before deducting interest, depreciation and amortization, multiplied by the number of remaining years before expiration of the subconcession. We cannot assure you that MGM Grand Paradise will be able to renew or extend the subconcession contract on terms favorable to MGM Grand Paradise or at all. We also cannot assure you that if the subconcession is redeemed, the compensation paid to MGM Grand Paradise will be adequate to compensate for the loss of future revenues.

MGM Grand Paradise is dependent upon gaming promoters for a significant portion of gaming revenues in Macau. Gaming promoters, who promote gaming and draw high-end customers to casinos, are responsible for a significant portion of MGM Grand Paradise’s gaming revenues in Macau. With the rise in gaming in Macau and the recent reduction in the number of licensed gaming promoters in Macau and in the number of VIP rooms operated by licensed gaming promoters, the competition for relationships with gaming promoters has increased. While MGM Grand Paradise is undertaking initiatives to strengthen relationships with gaming promoters, there can be no assurance that it will be able to maintain, or grow, relationships with gaming promoters. In addition, continued reductions in, and new regulations governing, the gaming promoter segment may result in the closure of additional VIP rooms in Macau, including VIP rooms at MGM Macau and MGM Cotai. If MGM Grand Paradise is unable to maintain or grow relationships with gaming promoters, or if gaming promoters are unable to develop or maintain relationships with our high-end customers (or if, as a result of recent market conditions in Macau, gaming promoters encounter difficulties attracting patrons to come to Macau or experience decreased liquidity limiting their ability to grant credit to patrons), MGM Grand Paradise’s ability to grow gaming revenues will be hampered. Furthermore, if existing VIP rooms at MGM Macau and MGM Cotai are closed there can be no assurance that MGM Grand Paradise will be able to locate acceptable gaming promoters to run such VIP rooms in the future in a timely manner, or at all.

In addition, the quality of gaming promoters is important to MGM Grand Paradise’s and our reputation and ability to continue to operate in compliance with gaming licenses. While MGM Grand Paradise strives for excellence in associations with gaming promoters, we cannot assure you that the gaming promoters with whom MGM Grand Paradise is or becomes associated will meet the high standards insisted upon. If a gaming promoter falls below MGM Grand Paradise’s standards, MGM Grand Paradise or we may suffer reputational harm or possibly sanctions from gaming regulators with authority over our operations.

We also grant credit lines to certain gaming promoters and any adverse change in the financial performance of those gaming promoters may impact the recoverability of these loans.

The future recognition of our foreign tax credit deferred tax asset is uncertain, and the amount of valuation allowance we may apply against such deferred tax asset may change materially in future periods.We currently have significant deferred tax assets resulting from foreign tax credit carryforwards that are available to reduce potential taxable foreign-sourced income in future periods, including the recapture of overall domestic losses to the extent of U.S. taxable income. We evaluate our foreign tax credit deferred tax asset for recoverability and record a valuation allowance to the extent that we determine it is not more likely than not such asset will be recovered. This evaluation is based on all available evidence, including assumptions concerning future U.S. operating profits and foreign source income. As a result, significant judgment is required in assessing the possible need for a valuation allowance and


changes to our assumptions could result in a material change in the valuation allowance with a corresponding impact on the provision for income taxes in the period including such change.

Extreme weather conditions or climate change may cause property damage or interrupt business, which could harm our business and results of operations. Certain of our properties are located in areas that may be subject to extreme weather conditions, including, but not limited to, hurricanes and winter storms in the United States and severe typhoons in Macau. Such extreme weather conditions may interrupt our operations, damage our properties, and reduce the number of customers who visit our facilities in such areas. In addition, our operations could be adversely impacted by a drought or other cause of water shortage. A severe drought of extensive duration experienced in Las Vegas or in the other regions in which we operate could adversely affect our business and results of operations. Although we maintain both property and business interruption insurance coverage for certain extreme weather conditions, such coverage is subject to deductibles and limits on maximum benefits, including limitation on the coverage period for business interruption, and we cannot assure you that we will be able to fully insure such losses or fully collect, if at all, on claims resulting from such extreme weather conditions. Furthermore, such extreme weather conditions may interrupt or impede access to our affected properties and may cause visits to our affected properties to decrease for an indefinite period, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.

Because a significant number of our major gaming resorts are concentrated on the Las Vegas Strip, we are subject to greater risks than a gaming company that is more geographically diversified. Given that a significant number of our major resorts are concentrated on the Las Vegas Strip, our business may be significantly affected by risks common to the Las Vegas tourism industry. For example, the cost and availability of air services and the impact of any events that disrupt air travel to and from Las Vegas can adversely affect our business. We cannot control the number or frequency of flights to or from Las Vegas, but we rely on air traffic for a significant portion of our visitors. Reductions in flights by major airlines as a result of higher fuel prices or lower demand, as a result of limitations on travel imposed to address the COVID-19 pandemic or otherwise, can impact the number of visitors to our resorts. Additionally, there is one principal interstate highway between Las Vegas and Southern California, where a large number of our customers reside. Capacity constraints of that highway or any other traffic disruptions may also affect the number of customers who visit our facilities.


We extend credit to a large portion of our customers and we may not be able to collect gaming receivables. We conduct a portion of our gaming activities on a credit basis through the issuance of markers which are unsecured instruments. Table games players typically are issued more markers than slot players, and high-end players typically are issued more markers than patrons who tend to wager lower amounts. High-end gaming is more volatile than other forms of gaming, and variances in win-loss results attributable to high-end gaming may have a significant positive or negative impact on cash flow and earnings in a particular quarter. Furthermore, the loss or a reduction in the play of the most significant of these high-end customers could have an adverse effect on our business, financial condition, results of operations and cash flows. We issue markers to those customers whose level of play and financial resources warrant, in the opinion of management, an extension of credit. In addition, MGM Grand Paradise extends credit to certain gaming promoters and those promoters can extend credit to their customers. Uncollectible receivables from high-end customers and gaming promoters could have a significant impact on our results of operations.


While gaming debts evidenced by markers and judgments on gaming debts are enforceable under the current laws of Nevada, and Nevada judgments on gaming debts are enforceable in all states under the Full Faith and Credit Clause of the U.S. Constitution, other jurisdictions may determine that enforcement of gaming debts is against public policy. Although courts of some foreign nations will enforce gaming debts directly and the assets in the U.S. of foreign debtors may be reached to satisfy a judgment, judgments on gaming debts from United States courts are not binding on the courts of many foreign nations.


Furthermore, we expect that MGM China will be able to enforce its gaming debts only in a limited number of jurisdictions, including Macau. To the extent MGM China gaming customers and gaming promoters are from other jurisdictions, MGM China may not have access to a forum in which it will be able to collect all of its gaming receivables because, among other reasons, courts of many jurisdictions do not enforce gaming debts and MGM China may encounter forums that will refuse to enforce such debts. Moreover, under applicable law, MGM China remains obligated to pay taxes on uncollectible winnings from customers.


Even where gaming debts are enforceable, they may not be collectible. Our inability to collect gaming debts could have a significant negative impact on our operating results.


We may incur impairments to goodwill, indefinite-lived intangible assets, or long-lived assets which could negatively affect our future profits. We review our goodwill, intangible assets and long-lived assets on an annual basis and during interim reporting periods in accordance with the authoritative guidance. Significant negative trends, reduced estimates of future cash flows, disruptions to our business, slower growth rates or lack of growth have resulted in write-downs and impairment charges in the past and, if one or more of such events occurs in the future, additional impairment charges or write-downs may be required in future periods. If we are required to record additional impairment charges or write-downs, this could have a material adverse impact on our consolidated results of operations.



Leisure and business travel, especially travel by air, are particularly susceptible to global geopolitical events, such as terrorist attacks, other acts of violence or acts of war or hostility or the outbreak of infectious diseases. We are dependent on the willingness of our customers to travel by air. Since most of our customers travel by air to our Las Vegas and Macau properties, any terrorist act or other acts of violence, outbreak of hostilities, escalation of war, or any actual or perceived threat to the security of travel by air, could adversely affect our financial condition, results of operations and cash flows. In addition, the outbreak of infectious diseases, such as the recent coronavirus, mayCOVID-19, has severely disrupted, and is expected to continue to disrupt, domestic and international travel. For instance, the coronavirus outbreakThe COVID-19 pandemic has resulted in several countries, governments, public institutions and other organizations imposing or recommending, and businesses and individuals implementing, restrictions on various activities or other actions to combat its spread, such as restrictions and bans on travel or transportation, stay-at-home directives, limitations on the size of gatherings, closures of work facilities, schools, public buildings and businesses,
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cancellation of events,including United States, issuing travel warningssporting events, concerts, conferences and suspending flightsmeetings, and quarantines and lock-downs. Even when those restrictions are removed, consumer willingness to attend large scale conferences may be impacted for the foreseeable future due to continued concerns over safety and from China. In addition, on February 4, 2020, the Hong Kong SAR government temporarily suspended all ferry service from Hong Kongsocial distancing. See “—The global COVID-19 pandemic has continued to Macau, until further notice. We are unable to predict the extent to which disruptions to travel as a result of the coronavirus willmaterially impact our business, financial results and liquidity, and such impact could worsen and last for an unknown period of operations but we expect that the current disruption will have an adverse effect on MGM China’s results of operations for the first quarter of 2020 and potentially thereafter. time.”

Furthermore, although we have been able to purchase some insurance coverage for certain types of terrorist acts, insurance coverage against physical loss or business interruption resulting from war and some forms of terrorism continues to be unavailable.

Co-investing in our properties or businesses, including our investment in CityCenter,BetMGM, decreases our ability to manage risk. In addition to acquiring or developing hotels and resorts or acquiring companies that complement our business directly, we have from time to time invested, and expect to continue to invest, in properties or businesses as a co-investor. Co-investors often have shared control over the operation of the property or business. Therefore, the operation of such properties or businesses is subject to inherent risk due to the shared nature of the enterprise and the need to reach agreements on material matters. In addition, investments with other investors may involve risks such as the possibility that the co-investor might become bankrupt or not have the financial resources to meet its obligations, or have economic or business interests or goals that are inconsistent with our business interests or goals, or be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives. Consequently, actions by a co-investor might subject the properties or businesses owned by such entities to additional risk. Further, we may be unable to take action without the approval of our co-investors, or our co-investors could take actions binding on the property without our consent. Additionally, should a co-investor become bankrupt, we could become liable for its share of liabilities.


For instance, CityCenter, which is 50% ownedexample, we share control of BetMGM with Entain with all major operating, investing and managed byfinancial activities requiring the consent of both members. Disagreements between us has a significantand Entain could arise in the future, including with respect to the amount and timing of indebtedness, which could adversely affect its business and its ability to meet its obligations.capital contributions. If CityCenter is unable to meet its financial commitments and we and our co-investorEntain are unable to support the future funding requirements, as necessary, such eventof BetMGM, then BetMGM may not have the resources to execute on the development or implementation of its strategies, including funding efforts to increase its market share, which could have adverse financial consequences to us.result in us not receiving the anticipated benefits from our investment. In addition, the agreements governing CityCenter’s indebtedness subject CityCenter and its subsidiariesif we are awarded a concession to significant financialdevelop an integrated casino resort in Japan, we would do so in a consortium with ORIX and other restrictive covenants, including restrictions on itslocal investors. As a result, we could be subject to additional risks related to being unable to directly control development activities or the timing of development completion, which may impact our ability to incur additional indebtedness, place liens upon assets, make distributions to us, make certain investments, consummate certain asset sales, enter into transactions with affiliates (including us) and mergecomplete the project on our anticipated timeline, or consolidate with any other person or sell, assign, transfer, lease, convey or otherwise dispose ofat all, or substantially all of its assets. The CityCenter credit facility also includes certain financial covenants that require CityCenter to maintain a maximum total net leverage ratio (as defined in CityCenter’s credit facility) for each quarter. We cannot be sure that CityCenter will be able to meet this test inwithin the future or that the lenders will waive any failure to meet the test.

agreed upon specifications.


Any of our future construction, development or expansion projects will be subject to significant development and construction risks, which could have a material adverse impact on related project timetables, costs and our ability to complete the projects.


Although our business model is primarily asset-light, we intend to continue to evaluate opportunities for future construction, development or expansion projects. Any of our future construction, development or expansion projects, such as our proposed integrated resort in Japan, will be subject to a number of risks, including:

•

lack of sufficient, or delays in the availability of, financing;

•

changes to plans and specifications;

•lack of sufficient, or delays in the availability of, financing;

engineering problems, including defective plans and specifications;

•changes to plans and specifications;

shortages of, and price increases in, energy, materials and skilled and unskilled labor, and inflation in key supply markets;

•engineering problems, including defective plans and specifications;

delays in obtaining or inability to obtain necessary permits, licenses and approvals;

•shortages of, and price increases in, energy, materials and skilled and unskilled labor;

changes in laws and regulations, or in the interpretation and enforcement of laws and regulations, applicable to gaming, leisure, residential, real estate development or construction projects;

•pricing inflation, including wage inflation, in key supply markets;

labor disputes or work stoppages;

•delays in obtaining or inability to obtain necessary permits, licenses and approvals;

availability of qualified contractors and subcontractors;

•changes in laws and regulations, or in the interpretation and enforcement of laws and regulations, applicable to gaming, leisure, residential, real estate development or construction projects;

disputes with and defaults by contractors and subcontractors;

•labor disputes or work stoppages;

personal injuries to workers and other persons;

•availability of qualified contractors and subcontractors;

environmental, health and safety issues, including site accidents and the spread of viruses;

•disputes with and defaults by contractors and subcontractors;

weather interferences or delays;

•personal injuries to workers and other persons;

fires, typhoons and other natural disasters;

•environmental, health and safety issues, including site accidents and the spread of viruses;

geological, construction, excavation, regulatory and equipment problems; and

•weather interferences or delays;

other unanticipated circumstances or cost increases.


•fires, typhoons and other natural disasters;

•geological, construction, excavation, regulatory and equipment problems; and
•other unanticipated circumstances or cost increases.

The occurrence of any of these development and construction risks could increase the total costs, delay or prevent the construction, development, expansion or opening or otherwise affect the design and features of any future projects
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which we might undertake. In addition, the regulatory approvals associated with our development projects may require us to open future casino resorts by a certain specified time and to the extent we are unable to meet those deadlines, and any such deadlines are not extended, we may lose our regulatory approval to open a casino resort in a proposed jurisdiction, or incur payment penalties in connection with any delays which could have an adverse effect on our business, financial condition, results of operations and financial condition.cash flows.

We also make significant capital expenditures to maintain and upgrade our resorts, which may disrupt operations and displace revenue at the properties, including revenue lost while rooms, restaurants and meeting spaces are under renovation and out of service.


Our insurance coverage may not be adequate to cover all possible losses that our properties could suffer. In addition, our insurance costs may increase and we may not be able to obtain similar insurance coverage in the future. Although we have “all risk” property insurance coverage for our operating properties, which covers damage caused by a casualty loss (such as fire, natural disasters, acts of war, or terrorism or other acts of violence), each policy has certain exclusions. In addition, our property insurance coverage is in an amount that may be significantly less than the expected replacement cost of rebuilding the facilities if there was a total loss. Our level of insurance coverage also may not be adequate to cover all losses in the event of a major casualty. In addition, certain casualty events, such as labor strikes, nuclear events, acts of war, loss of income due to cancellation of room reservations or conventions due to fear of terrorism or other acts of violence, loss of electrical power due to catastrophic events, rolling blackouts or otherwise, deterioration or corrosion, insect or animal damage, and pollution, may not be covered at all under our policies. Therefore, certain acts could expose us to substantial uninsured losses.


In addition to the damage caused to our properties by a casualty loss, we may suffer business disruption as a result of these events or be subject to claims by third parties that may be injured or harmed. While we carry business interruption insurance and general liability insurance, this insurance may not be adequate to cover all losses in any such event. Furthermore, the leases we entered into in connection with the MGP BREIT Venture Transaction and the Bellagio BREIT Venturesale-leaseback transaction require us to maintain specified insurance coverage. We cannot assure you that we will continue to be able to obtain the types and limits of insurance coverage required by these leases and, to the extent such required insurance coverage cannot be obtained at commercially reasonable cost or at all, then we would need to obtain amendments to the leases or face a default by the applicable tenant under the lease, which could have material adverse effect on our business.


We renew our insurance policies (other than our builder’s risk insurance) on an annual basis. The cost of coverage may become so high that we may need to further reduce our policy limits, further increase our deductibles or self-insured retentions, or agree to certain exclusions from our coverage.


Any failure to protect our trademarks could have a negative impact on the value of our brand names and adversely affect our business. The development of intellectual property is part of our overall business strategy, and we regard our intellectual property to be an important element of our success. While our business as a whole is not substantially dependent on any one trademark or combination of several of our trademarks or other intellectual property, we seek to establish and maintain our proprietary rights in our business operations through the use of trademarks. We file applications for, and obtain trademarks in, the United States and in foreign countries where we believe filing for such protection is appropriate. Despite our efforts to protect our proprietary rights, parties may infringe our trademarks and our rights may be invalidated or unenforceable. The laws of some foreign countries do not protect proprietary rights to as great an extent as the laws of the United States. Monitoring the unauthorized use of our intellectual property is difficult. Litigation may be necessary to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. Litigation of this type could result in substantial costs and diversion of resource. We cannot assure you that all of the steps we have taken to protect our trademarks in the United States and foreign countries will be adequate to prevent imitation of our trademarks by others. The unauthorized use or reproduction of our trademarks could diminish the value of our brand and its market acceptance, competitive advantages or goodwill, which could adversely affect our business.


WeA significant portion of our labor force is covered by collective bargaining agreements. Work stoppages and other labor problems could negatively affect our business and results of operations. As of December 31, 2021, approximately 35,000 of our employees are subjectcovered by collective bargaining agreements. A prolonged dispute with the covered employees or any labor unrest, strikes or other business interruptions in connection with labor negotiations or others could have an adverse impact on our operations, and adverse publicity in the marketplace related to union messaging could further harm our reputation and reduce customer demand for our services. Also, wage and/or benefit increases resulting from new labor agreements may be significant and could also have an adverse impact on our results of operations. To the extent that our non-union employees seek union representation or elect union representation, we would have exposure to risks associated with doing business outsiderepresentation proceedings, labor negotiations and/or economic impacts of newly negotiated labor agreements. Furthermore, we may have, or acquire in the future, multi-employer plans that are classified as “endangered,”
26

“seriously endangered,” or “critical” status. For instance, Borgata’s most significant plan is the Legacy Plan of the United StatesUNITE HERE Retirement Fund, which has been listed in “critical status” and is subject to a rehabilitation plan. Plans in these classifications must adopt measures to improve their funded status through a funding improvement or rehabilitation plan, which may require additional contributions from employers (which may take the form of a surcharge on benefit contributions) and/or modifications to retiree benefits. In addition, while Borgata has no current intention to withdraw from these plans, a withdrawal in the future could result in the incurrence of a contingent liability that would be payable in an amount and at such time (or over a period of time) that would vary based on a number of factors at the time of (and after) withdrawal. Any such additional costs may be significant.

Our business is particularly sensitive to energy prices and a rise in energy prices could harm our operating results. Our operations outsideWe are a large consumer of the United States are subject to risks that are inherent in conducting business under non-United States laws, regulationselectricity and customs. In particular, the risks associated with the operation of MGM China or any future operations in which weother energy and, therefore, higher energy prices may engage in any other foreign territories, include:

•

changes in laws and policies that govern operations of companies in Macau or other foreign jurisdictions;

•

changes in non-United States government programs;

•

possible failure by our employees or agents to comply with anti-bribery laws such as the United States Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions;

•

general economic conditions and policies in China, including restrictions on travel and currency movements;

•

difficulty in establishing, staffing and managing non-United States operations;

•

different labor regulations;

•

changes in environmental, health and safety laws;

•

outbreaks of diseases or epidemics, including the recent coronavirus outbreak;

•

potentially negative consequences from changes in or interpretations of tax laws;

•

political instability and actual or anticipated military and political conflicts;

•

economic instability and inflation, recession or interest rate fluctuations; and

•

uncertainties regarding judicial systems and procedures.

These risks, individually or in the aggregate, could have an adverse effect on our results of operations. Accordingly, increases in energy costs may have a negative impact on our operating results. Additionally, higher electricity and gasoline prices that affect our customers may result in reduced visitation to our resorts and a reduction in our revenues.


We may seek to expand through investments in other businesses and properties or through alliances or acquisitions, and we may also seek to divest some of our properties and other assets, any of which may be unsuccessful. We intend to consider strategic and complementary acquisitions and investments in other businesses, properties or other assets. Furthermore, we may pursue any of these opportunities in alliance with third parties, including MGP. Acquisitions and investments in businesses, properties or assets, as well as these alliances, are subject to risks that could affect our business, including risks related to:

•spending cash and incurring debt;
•assuming contingent liabilities;
•unanticipated issues in integrating information, communications and other systems;
•unanticipated incompatibility of purchasing, logistics, marketing and administration methods;
•retaining key employees; and
•consolidating corporate and administrative infrastructures.

We cannot assure you that we will be able to identify opportunities or complete transactions on commercially reasonable terms or at all. In addition, even if we are able to identify any such opportunities and complete transactions, we cannot assure you that we will realize the anticipated synergies and benefits of our acquisitions or that they will be accretive to our results of operations. Our estimates and assumptions regarding expected synergies and benefits of our acquisitions could materially change, including as a result of factors beyond our control, and could delay, decrease or eliminate the expected accretive effect of the acquisitions. In addition, even if we are able to successfully integrate new assets and businesses, the integration of such assets and businesses may result in unanticipated costs, competitive responses, loss of customer or other business relationships and the diversion of management attention, and the expansion of our operations in general, whether through acquisition, development or internal growth, could also cause us to incur substantial costs, including legal, professional and consulting fees.

In addition, we periodically review our business to identify properties or other assets that we believe either are non-core, no longer complement our business, are in markets which may not benefit us as much as other markets or could be sold at significant premiums. From time to time, we may attempt to sell these identified properties and assets. There can be no assurance, however, that we will be able to complete dispositions on commercially reasonable terms or at all.

The failure to maintain the integrity of our computer systems and customer information could result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits and restrictions on our use of data.We collect and process information relating to our employees, guests, and others for various business purposes, including marketing and promotional purposes. The collection and use of personal data are governed by privacy laws and regulations enacted by the various states, the United States and other jurisdictions around the world. Privacy laws and regulations continue to evolve and on occasion may be inconsistent (or conflict) between jurisdictions. Various federal, state and foreign legislative or regulatory bodies may enact or adopt new or additional laws and regulations concerning privacy, data retention, data transfer, and data protection. For example, the European Union has adopted a data protection regulation known as the General Data Protection Regulation, which became fully enforceable in May 2018, that includes operational and compliance requirements with significant penalties for non-compliance. California has enacted a comprehensive privacy law, known as the California Consumer Privacy Act of 2018, which went into effect on January 1, 2020 and provides some of the strongest privacy requirements in the United States. In addition, new privacy requirements in California, Colorado, and Virginia generally go into effect on January 1, 2023.

Compliance with applicable privacy laws and regulations may increase our operating costs and/or adversely impact our ability to market our products, properties and services to our guests. In addition, non-compliance with applicable
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privacy laws and regulations by us (or in some circumstances non-compliance by third parties engaged by us), including accidental loss, inadvertent disclosure, unapproved dissemination or a breach of security on systems storing our data may result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits or restrictions on our use or transfer of data. We rely on proprietary and commercially available systems, software, and tools to provide security for processing of customer and employee information, such as payment card and other confidential or proprietary information. Our data security measures are reviewed and evaluated regularly; however, they might not protect us against increasingly sophisticated and aggressive threats including, but not limited to, computer malware, viruses, hacking and phishing attacks by third parties. In addition, while we maintain cyber risk insurance to assist in the cost of recovery from a significant cyber event, such coverage may not be sufficient.

We also rely extensively on computer systems to process transactions, maintain information and manage our businesses. Disruptions in the availability of our computer systems, through cyber-attacks or otherwise, could impact our ability to service our customers and adversely affect our sales and the results of operations. For instance, there has been an increase in criminal cyber security attacks against companies where customer and company information has been compromised and company data has been destroyed. Our information systems and data, including those we maintain with our third-party service providers, have been subject to cyber security breaches in the past and may be subject to cyber security breaches in the future. In addition, our third-party information system service providers face risks relating to cyber security similar to ours, and we do not directly control any of such parties’ information security operations. A significant theft, loss or fraudulent use of customer or company data maintained by us or by a third-party service provider could have an adverse effect on our reputation, cause a material disruption to our operations, and result in remediation expenses, regulatory penalties and litigation by customers and other parties whose information was subject to such attacks, all of which could have a material adverse effect on our business, results of operations and cash flows.

We are subject to risks related to corporate social responsibility and reputation. Many factors influence our reputation and the value of our brands including the perception held by our customers, business partners, other key stakeholders and the communities in which we do business. Our business faces increasing scrutiny related to environmental, social and governance factors and risk of damage to our reputation and the value of our brands if we fail to act responsibly in several areas including diversity and inclusion, community engagement and philanthropy, environmental sustainability, plastic pollution, climate change, responsible gaming, supply chain management, workplace conduct, human rights, and many others, some of which may be unforeseen. Any harm to our reputation could further impact employee engagement and retention and the willingness of customers and our partners to do business with us, which could have a material adverse effect on our business, results of operations and cash flows.

We are subject to risks and costs related to climate change. Extreme weather conditions, potentially exacerbated by climate change, may cause property damage or interrupt business, which could harm our business and results of operations. Certain of our properties are located in areas that may be subject to extreme weather conditions, including, but not limited to, hurricanes, floods, tornados, wildfires, and winter storms in the United States and severe typhoons in Macau. Such extreme weather conditions may interrupt our operations or the operations of critical suppliers, damage our properties, and reduce the number of customers who visit our facilities in such areas. In addition, our operations or the operations of critical suppliers could be adversely impacted by a drought or other cause of water stress or shortage. A severe drought of extensive duration experienced in Las Vegas or in the other regions in which we operate or source critical supplies could adversely affect our business. Although we maintain both property and business interruption insurance coverage for certain extreme weather conditions, such coverage is subject to deductibles and limits on maximum benefits, including limitation on the coverage period for business interruption, and we cannot assure you that we will be able to fully insure such losses or fully collect, if at all, on claims resulting from such extreme weather conditions.

Furthermore, such extreme weather conditions may result in reduced availability or increased price volatility of certain critical supplies, may interrupt or impede access to our affected properties, and may cause visits to our affected properties to decrease for an indefinite period. Additionally, many states and municipalities have begun to adopt laws and policies on climate change and emission reduction targets. Changes in federal, state, and local legislation and regulation based on concerns about climate change could result in increased regulatory costs, which may include capital expenditures on our existing properties to ensure compliance with any new or updated regulations, which may potentially adversely affect our operations. There can be no assurance that the potential impacts of climate change and severe weather will not have a material adverse effect on our properties, operations or business.

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Risks Related to Legal and Regulatory Matters and Changes in Public Policy

Our businesses are subject to extensive regulation and the cost of compliance or failure to comply with such regulations may adversely affect our business and results of operations. Our ownership and operation of gaming facilities is subject to extensive regulation by the countries, states and provinces in which we operate. These laws, regulations and ordinances vary from jurisdiction to jurisdiction, but generally concern the responsibility, financial condition.

stability and character of the owners and managers of gaming operations as well as persons financially interested or involved in gaming operations. As such, our gaming regulators can require us to disassociate ourselves from suppliers or business partners found unsuitable by the regulators or, alternatively, cease operations in that jurisdiction. In addition, unsuitable activity on our part or on the part of our domestic or foreign unconsolidated affiliates or subsidiaries in any jurisdiction could have a negative effect on our ability to continue operating in other jurisdictions. The regulatory environment in any particular jurisdiction may change in the future and any such change could have a material adverse effect on our results of operations. Furthermore, our iGaming and online sports betting initiatives may be particularly subject to risks related to potential changes in the regulatory environment as a result of the continued development of regulations in this industry. For example, in 2018, the U.S. Department of Justice (“DOJ”) reversed its previously-issued opinion published in 2011, which stated that interstate transmissions of wire communications that do not relate to a “sporting event or contest” fall outside the purview of the Wire Act of 1961 (“Wire Act”). The DOJ’s updated opinion concluded instead that the Wire Act was not uniformly limited to gaming relating to sporting events or contests and that certain of its provisions apply to non-sports-related wagering activity. In June 2019, a federal district court in New Hampshire ruled that the DOJ’s new interpretation of the Wire Act was erroneous and vacated DOJ’s new opinion. The DOJ appealed the decision of the district court to the U.S. Court of Appeals for the First Circuit. In January 2021, the Court of Appeals essentially affirmed the decision of the district court, and the DOJ did not file a further appeal. For a summary of gaming and other regulations that affect our business, see “Regulation and Licensing” and Exhibit 99.1 to this Annual Report on Form 10-K.


Further, our directors, officers, key employees and investors in our properties must meet approval standards of certain state and foreign regulatory authorities. If state regulatory authorities were to find such a person or investor unsuitable, we would be required to sever our relationship with that person or the investor may be required to dispose of his, her or its interest in the property. State regulatory agencies may conduct investigations into the conduct or associations of our directors, officers, key employees or investors to ensure compliance with applicable standards. Certain public and private issuances of securities, borrowings under credit agreements, guarantees of indebtedness and other transactions also require the approval of certain regulatory authorities.

Macau laws and regulations concerning gaming and gaming concessions are complex, and a court or administrative or regulatory body may in the future render an interpretation of these laws and regulations, or issue new or modified regulations, that differ from MGM China’s interpretation, which could have a material adverse effect on its business, financial condition and results of operations. In addition, MGM Grand Paradise's activities in Macau are subject to administrative review and approval by various government agencies. We cannot assure you that MGM Grand Paradise will be able to obtain all necessary approvals, and any such failure to do so may materially affect its long-term business strategy and operations. Macau laws permit redress to the courts with respect to administrative actions; however, to date such redress is largely untested in relation to gaming issues.

In addition to gaming regulations, we are also subject to various federal, state, local and foreign laws and regulations affecting businesses in general. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, smoking, employees, currency transactions, taxation, zoning and building codes, and marketing and advertising. For instance, we are subject to certain federal, state and local environmental laws, regulations and ordinances, including the Clean Air Act, the Clean Water Act, the Resource Conservation Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Energy Policy Act, the Safe Drinking Water Act, Renewable Portfolio Standards, the Oil Pollution Act of 1990, and many others. Under various federal, state and local environmental laws and regulations, an owner or operator of real property may be held liable for the costs of removal or remediation of certain hazardous or toxic substances or wastes located on its property, regardless of whether or not the present owner or operator knows of, or is responsible for, the presence of such substances or wastes. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. In addition, effective January 1, 2019, smoking in casinos in Macau, including MGM Macau and MGM Cotai, is only permitted inside specially ventilated smoking rooms, rather than outside smoking areas or VIP areas. The likelihood or outcome of similar legislation in other jurisdictions and referendums in the future cannot be predicted, though any smoking ban would be expected to negatively impact our financial performance.

We also deal with significant amounts of cash in our operations and are subject to recordkeeping and reporting obligations as required by various anti-money laundering laws and regulations. For instance, we are subject to regulation under the Currency and Foreign Transactions Reporting Act of 1970, commonly known as the “Bank Secrecy Act”, which, among other things, requires us to report to the Internal Revenue Service (“IRS”) any currency transactions in excess of $10,000 that occur within a 24-hour gaming day, including identification of the individual(s) involved in the currency
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transaction. We are also exposedrequired to a varietyreport certain suspicious activity where we know, suspect or have reason to suspect transactions, among other things, involve funds from illegal activity or are intended to evade federal regulations or avoid reporting requirements or have no business or lawful purpose. In addition, under the Bank Secrecy Act we are subject to various other rules and regulations involving reporting, recordkeeping and retention. Our compliance with the Bank Secrecy Act is subject to periodic examinations by the IRS. Any such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Any violations of market risks,the anti-money laundering laws, including the effectsBank Secrecy Act, or regulations by any of changesour properties could have an adverse effect on our financial condition, results of operations or cash flows.

Furthermore, the COVID-19 pandemic has resulted in foreign currency exchange rates. If the United States dollar strengthens in relationgovernments, public institutions and other organizations imposing or recommending restrictions on various activities or other actions to combat its spread. See “—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.” In addition to the currencies of other countries, our United States dollar reported income from sources where revenue is denominatedpandemic-related restrictions that resulted in the currenciestemporary closures of our properties during 2020, governmental or other such countries will decrease.

COVID-19-related restrictions have been extended or reimposed from time-to-time and new restrictions may be imposed in the future.


Any violation of the Foreign Corrupt Practices Act or any other similar anti-corruption laws could have a negative impact on us. AHistorically, a significant portion of our revenue iswas derived from operations outside the United States, which exposes us to complex foreign and U.S. regulations inherent in doing cross-border business and in each of the countries in which we transact business. We are subject to compliance with the United States Foreign Corrupt Practices Act (“FCPA”) and other similar anti-corruption laws, which generally prohibit companies and their intermediaries from making improper payments to foreign government officials for the purpose of obtaining or retaining business. While our employees and agents are required to comply with these laws, we cannot be sure that our internal policies and procedures will always protect us from violations of these laws, despite our commitment to legal compliance and corporate ethics. Violations of these laws by us or our non-controlled ventures may result in severe criminal and civil sanctions as well as other penalties against us, and the SEC and U.S. Department of Justice continue to vigorously pursue enforcement of the FCPA. The occurrence or allegation of these types of risks may adversely affect our business, performance, prospects, value, financial condition, and results of operations.


If the jurisdictions in which we operate increase gaming taxes and fees, as well as other taxes and fees, our results could be adversely affected.State and local authorities raise a significant amount of revenue through taxes and fees, including taxes and fees on gaming activities. From time to time, legislators and government officials have proposed changes in tax laws, or in the administration of such laws, affecting the gaming industry. Periods of economic downturn or uncertainty and budget deficits may intensify such efforts to raise revenues through increases in gaming or other taxes, the imposition of new taxes or changes to tax laws that result in increased taxes to us. If the jurisdictions in which we operate were to increase taxes, impose new taxes or change existing tax laws, our financial condition and results of operations could be materially adversely affected.

The future recognition of our foreign tax credit deferred tax asset is uncertain, and the amount of valuation allowance we may apply against such deferred tax asset may change materially in future periods.We currently have significant deferred tax assets resulting from foreign tax credit carryforwards that are available to reduce taxes attributable to potential taxable foreign-sourced income in future periods, including the recapture of overall domestic losses to the extent of 50 percent of U.S. taxable income per year. We evaluate our foreign tax credit deferred tax asset for recoverability and record a valuation allowance to the extent that we determine it is not more likely than not such asset will be recovered. This evaluation is based on all available evidence, including assumptions concerning future U.S. operating profits and foreign source income. As a result, significant judgment is required in assessing the possible need for a valuation allowance and changes to our assumptions could result in a material change in the valuation allowance with a corresponding impact on the provision for income taxes in the period including such change.

We face risks related to pending claims that have been, or future claims that may be, brought against us. Claims have been brought against us and our subsidiaries in various legal proceedings, and additional legal and tax claims arise from time to time. We may not be successful in the defense or prosecution of our current or future legal proceedings, which could result in settlements or damages that could significantly impact our business, financial condition, results of operations and reputation. Please see the further discussion in “Legal Proceedings” and Note 12 in the accompanying consolidated financial statements.

A significant portion


Risks Related to Our Macau Operations

We have agreed not to have any interest or involvement in gaming businesses in China, Macau, Hong Kong and Taiwan, other than through MGM China. As a result of our labor force is covered by collective bargaining agreements. Work stoppagesthe extension of the Macau gaming subconcession, we entered into a First Renewed Deed of Non-Compete Undertakings with MGM China and other labor problems could negatively affect our business and results of operations. As of December 31, 2019, approximately 38,000 of our employeesMs. Ho, Pansy Catilina Chiu King (“Ms.
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Ho”), pursuant to which we are covered by collective bargaining agreements. A prolonged dispute with the covered employeesrestricted from having any interest or any labor unrest, strikes or other business interruptionsinvolvement in connection with labor negotiations or others could have an adverse impact on our operations, and adverse publicitygaming businesses in the marketplace related to union messaging could further harm our reputationPeople’s Republic of China, Macau, Hong Kong and reduce customer demand for our services. Also, wage and/or benefit increases resulting from new labor agreements may be significantTaiwan, other than through MGM China. While gaming is currently prohibited in China, Hong Kong and could also have an adverse impact on our results of operations. To the extent that our non-union employees join unions, we would have greater exposure to risks associated with labor problems. Furthermore, we may have, or acquireTaiwan, if it is legalized in the future multi-employer plans that are classified as “endangered,” “seriously endangered,”our ability to compete in these locations could be limited until the earliest of (i) the date MGM China’s ordinary shares cease to be listed on The Stock Exchange of Hong Kong Limited or “critical” status. For instance, Borgata’s most significant plan(ii) the last day of MGM Grand Paradise's subconcession for operation of casino games (or any extension thereof); or (iii) the date when our ownership of MGM China shares is the Legacy Planless than 20% of the UNITE HERE Retirement Fund, which has been listedthen-issued share capital of MGM China.

The Macau government can 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 an extension of the subconcession in “critical status” and is subject to a rehabilitation plan. Plans in these classifications must adopt measures to improve their funded status through a funding improvement 2022, or rehabilitation plan, which may require additional contributions from employers (which may take the form of a surcharge on benefit contributions) and/or modifications to retiree benefits. In addition, while Borgata has no current intention to withdraw from these plans, a withdrawal in the future could result in the incurrence of a contingent liability that would be payable in an amount and at such time (or over a period of time) that would vary based on a number of factors at the time of (and after) withdrawal. Any such additional costsMGM Grand Paradise may be significant.


Our businessunsuccessful in obtaining a gaming concession when a new public tender is particularly sensitive to energy prices andheld by the Macau government, any of which would have a rise in energy prices could harm our operating results. We are a large consumer of electricity and other energy and, therefore, higher energy prices may have anmaterial adverse effect on our business, financial condition,results of operations and cash flows. The Macau government has the right to unilaterally terminate the subconcession in the event of fundamental non-compliance by MGM Grand Paradise with applicable Macau laws or MGM Grand Paradise’s basic obligations under the subconcession contract. MGM Grand Paradise has the opportunity to remedy any such non-compliance with its fundamental obligations under the subconcession contract within a period to be stipulated by the Macau government. Upon such termination, all of MGM Grand Paradise’s casino area premises and gaming-related equipment would be transferred automatically to the Macau government without compensation to MGM Grand Paradise, and we would cease to generate any revenues from these operations. Accordingly, increasesWe cannot assure you that MGM Grand Paradise will perform all of its obligations under the subconcession contract in energy costs may have a negative impact on our operating results. Additionally, higher electricity and gasoline pricesway that affect our customers may result in reduced visitationsatisfies the requirements of the Macau government.


Furthermore, under the subconcession contract, MGM Grand Paradise is obligated to our resorts and a reduction in our revenues.

The failure to maintain the integrity of our computer systems and customer information could result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits and restrictions on our use of data.We collect and process information relating to our employees, guests, and others for various business purposes, including marketing and promotional purposes. The collection and use of personal data are governed by privacycomply with any laws and regulations enacted bythat the various states,Macau government might promulgate in the United States and other jurisdictions around the world. Privacyfuture. We cannot assure you that MGM Grand Paradise will be able to comply with these laws and regulations continue to evolve and on occasion may be inconsistent (or conflict) between jurisdictions. Various federal, state and foreign legislative or regulatory bodies may enact or adopt new or additionalthat these laws and regulations concerning privacy, data retention, data transfer, and data protection. For example, the European Union has adopted a data protection regulation known as the General Data Protection Regulation, which became fully enforceable in May 2018, that includes operational and compliance requirements with significant penalties for non-compliance. In addition, California has enacted a new privacy law, known as the California Consumer Privacy Act of 2018, which went into effect on January 1, 2020 and provides some of the strongest privacy requirements in the United States.

Compliance with applicable privacy laws and regulations may increase our operating costs and/orwould not adversely impactaffect our ability to marketconstruct or operate our products, propertiesMacau businesses. If any disagreement arises between MGM Grand Paradise and servicesthe Macau government regarding the interpretation of, or MGM Grand Paradise’s compliance with, a provision of the subconcession contract, MGM Grand Paradise will be relying on a consultation and negotiation process with the Macau government. During any consultation or negotiation, MGM Grand Paradise will be obligated to our guests. In addition, non-compliancecomply with applicable privacy laws and regulationsthe terms of the subconcession contract as interpreted by us (or in somethe Macau government. Currently, there is no precedent concerning how the Macau government will treat the termination of a concession or subconcession upon the occurrence of any of the circumstances non-compliance by third parties engaged by us), including accidentalmentioned above. The loss inadvertent disclosure, unapproved dissemination or a breach of security on systems storing our data may result in damage to our reputation and/or subjectthe subconcession would require us to fines, payment of damages, lawsuits or restrictions on our use or transfer of data. We rely on proprietary and commercially available systems, software, and tools to provide security for processing of customer and employee information, such as payment card and other confidential or proprietary information. Our data security measures are reviewed and evaluated regularly; however, they might not protect us against increasingly sophisticated and aggressive threats including, but not limited to, computer malware, viruses, hacking and phishing attacks by third parties. In addition, while we maintain cyber risk insurance to assistcease conducting gaming operations in the cost of recovery from a significant cyber event, such coverage may not be sufficient.

We also rely extensively on computer systems to process transactions, maintain information and manage our businesses. Disruptions in the availability of our computer systems, through cyber-attacks or otherwise, could impact our ability to service our customers and adversely affect our sales and the results of operations. For instance, there has been an increase in criminal cyber security attacks against companies where customer and company information has been compromised and company data has been destroyed. Our information systems and data, including those we maintain with our third-party service providers, may be subject to cyber security breaches in the future. In addition, our third-party information system service providers face risks relating to cyber security similar to ours, and we do not directly control any of such parties’ information security operations. A significant theft, loss or fraudulent use of customer or company data maintained by us or by a third-party service provider could have an adverse effect on our reputation, cause a material disruption to our operations, and result in remediation expenses, regulatory penalties and litigation by customers and other parties whose information was subject to such attacks, all ofMacau, which couldwould have a material adverse effect on our business, financial condition, results of operations and cash flows.

We are


In addition, the subconcession contract expires on June 26, 2022. Pursuant to the current Macau gaming law, upon reaching the maximum duration of 20 years, the term of the concessions may be extended one or more times by order of the Chief Executive, which period may not exceed, in total, 5 years. On January 14, 2022, the Macau Government disclosed the content of a bill to amend Macau gaming law, which followed a 45-day public consultation process regarding draft amendment proposals that were issued in September 2021. Under the bill, the existing subconcessions will be discontinued and a maximum of six concessions will be awarded for a term to be specified in the concession contract that may not exceed 10 years and which may be extended by three years, under certain circumstances. The bill is subject to risks relateddebate and approval by the Macau Legislative Assembly. The approval of the new gaming law bill will precede the public tender for the awarding of new gaming concessions and to corporate social responsibilitydate the Macau Government has provided no indication as to whether the public tender will take place before expiry of the existing gaming concessions and reputation. Many factors influence our reputationsubconcessions, which is on June 26, 2022, but acknowledged that it could consider the extension of the existing concessions and subconcessions beyond their current term if the valuepublic tender is held at a later date. Unless MGM Grand Paradise's gaming subconcession is extended, or legislation with regard to reversion of our brands includingcasino premises is amended, the perception held by our customers, business partners, other key stakeholderscasino area premises and gaming-related equipment subject to reversion will automatically be transferred to the communitiesMacau Government upon expiration, and MGM Grand Paradise will cease to generate any revenues from such gaming operations. In addition, certain events relating to the loss, termination, rescission, revocation or modification of MGM Grand Paradise’s gaming subconcession in which we do business. Our business faces increasing scrutiny related to environmental, social and governance activities and risk of damage to our reputation and the value of our brands if we fail to act responsibly in a number of areas,Macau, where such as diversity and inclusion, environmental stewardship, supply chain management, climate change, workplace conduct, human rights, philanthropy and support for local communities. Any harm to our reputation could impact employee engagement and retention and the willingness of customers and our partners to do business with us, which couldevents 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 an event of default under MGM China’s revolving credit facilities. Beginning on April 20, 2017, the Macau government may redeem the subconcession contract by providing us at least 1 year prior notice. In the event the Macau government exercises this redemption right, MGM Grand Paradise is entitled to fair compensation or indemnity. The amount of such compensation or indemnity will be determined based on the amount of gaming and non-gaming revenue generated by MGM Grand Paradise, excluding the convention and exhibition facilities, during the taxable year prior to the redemption, before deducting interest, depreciation and amortization, multiplied by the number of remaining years before expiration of the subconcession. We cannot assure you that MGM Grand Paradise will be able to obtain an extension of the subconcession contract or be awarded a new gaming concession on terms favorable to MGM Grand Paradise or at all. In
31

addition, there is uncertainty on the terms associated with any extension, which could include additional fees or other financial commitments that may have an adverse impact on the financial position of MGM Grand Paradise. We also cannot assure you that if the subconcession is redeemed, the compensation paid to MGM Grand Paradise will be adequate to compensate for the loss of future revenues.

We are subject to risks associated with doing business outside of the United States. Our operations outside of the United States are subject to risks that are inherent in conducting business under non-United States laws, regulations and customs. In particular, the risks associated with the operation of MGM China or any future operations in which we may engage in any other foreign territories, include:

•changes in laws and policies that govern operations of companies in Macau or other foreign jurisdictions;
•changes in non-United States government programs;
•possible failure by our employees or agents to comply with anti-bribery laws such as the United States Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions;
•general economic conditions and policies in China, including restrictions on travel and currency movements;
•difficulty in establishing, staffing and managing non-United States operations;
•different labor regulations;
•changes in environmental, health and safety laws;
•outbreaks of diseases or epidemics, including the COVID-19 pandemic;
•potentially negative consequences from changes in or interpretations of tax laws;
•political instability and actual or anticipated military and political conflicts;
•economic instability and inflation, recession or interest rate fluctuations; and
•uncertainties regarding judicial systems and procedures.

These risks, individually or in the aggregate, could have an adverse effect on our business, financial condition, results of operations and cash flows.

We may seekare also exposed to expand through investmentsa variety of market risks, including the effects of changes in other businesses and properties or through alliances or acquisitions, and we may also seek to divest some of our properties and other assets, any of which may be unsuccessful. We intend to consider strategic and complementary acquisitions and investments in other businesses, properties or other assets. Furthermore, we may pursue any of these opportunities in alliance with third parties, including MGP. Acquisitions and investments in businesses, properties or assets, as well as these alliances, are subject to risks that could affect our business, including risks related to:

•

spending cash and incurring debt;

•

assuming contingent liabilities;

•

unanticipated issues in integrating information, communications and other systems;

•

unanticipated incompatibility of purchasing, logistics, marketing and administration methods;

•

retaining key employees; and

•

consolidating corporate and administrative infrastructures.


We cannot assure you that we will be able to identify opportunities or complete transactions on commercially reasonable terms or at all, or that we will actually realize any anticipated benefits from such acquisitions, investments or alliances. In addition, even if we are able to successfully integrate new assets and businesses, the integration of such assets and businesses may result in unanticipated costs, competitive responses, loss or customer or other business relationships and the diversion of management attention.

In addition, we periodically review our business to identify properties or other assets that we believe either are non-core, no longer complement our business, are in markets which may not benefit us as much as other markets or could be sold at significant premiums. From time to time, we may attempt to sell these identified properties and assets. There can be no assurance, however, that we will be able to complete dispositions on commercially reasonable terms or at all.

foreign currency exchange rates. If the jurisdictionsUnited States dollar strengthens in which we operate increase gaming taxes and fees, as well asrelation to the currencies of other taxes and fees,countries, our results could be adversely affected.State and local authorities raise a significant amount ofUnited States dollar reported income from sources where revenue through taxes and fees, including taxes and fees on gaming activities. From time to time, legislators and government officials have proposed changes in tax laws, oris denominated in the administrationcurrencies of other such laws, affecting the gaming industry. Periods of economic downturn or uncertainty and budget deficits may intensify such efforts to raise revenues through increases in gaming taxes. If the jurisdictions in which we operate were to increase taxes, including gaming taxes or fees, depending on the magnitude of the increase and any offsetting factors, our financial condition and results of operations could be materially adversely affected. For instance, income generated from gaming operations of MGM Grand Paradise currently has the benefit of a corporate tax exemption in Macau through March 31, 2020, which exempts us from paying the 12% complementary tax on profits generated by the operation of casino games. We have applied for an extension of such exemption to June 26, 2022 to run concurrent with its extended sub-concession.  While our competitors have received additional extensions of their complementary tax exemptions through June 26, 2022, which runs concurrent with the end of the term of their gaming concessions, and we believe MGM Grand Paradise should also be entitled to such extension in order to ensure non-discriminatory treatment among gaming concessionaires and sub-concessionaires, a requirement under Macanese law,  due to the uncertainty concerning taxation after the subconcession renewal process, we cannot assure you that any extensions of the tax exemptioncountries will be granted beyond March 31, 2020.decrease.


Conflicts of interest may arise because certain of our directors and officers are also directors of MGM China, the holding company for MGM Grand Paradise which owns and operates MGM Macau and MGM Cotai. As a result of the initial public offering of shares of MGM China common stock in 2011, MGM China has stockholders who are not affiliated with us, and we and certain of our officers and directors who also serve as officers and/or directors of MGM China may have conflicting fiduciary obligations to our stockholders and to the minority stockholders of MGM China. Decisions that could have different implications for us and MGM China, including contractual arrangements that we have entered into or may in the future enter into with MGM China, may give rise to the appearance of a potential conflict of interest or an actual conflict of interest.

ITEM 1B.    

UNRESOLVED STAFF COMMENTS


None.



32


ITEM 2.    PROPERTIES
P
ROPERTIES

The location and general characteristics of our properties are provided in Part I, Item 1. Business. As detailed in the aforementioned section, the majority of our facilities are subject to leases of the underlying real estate assets, which among other things, includes the land underlying the facility and the buildings used in the operations.

The following table lists certain of our principal land and leasehold holdings as of December 31, 2019. 

2021.

Approximate

Approximate
Name and Location

Acres

Notes

Las Vegas Strip Resorts

Bellagio

Aria(1)

77

Approximately two acres of the site are subject to two ground leases.(4)

64

Bellagio(2)
75
MGM Grand Las Vegas(5)

(3)

102

Mandalay Bay(2)(5)

(3)

124

The Mirage(2)

(4)

77

Luxor(2)

(4)(5)

73

Includes 15 acres of land located across the Las Vegas Strip from Luxor.

Excalibur(2)

(4)

51

New York-New York(2)

(4)(6)

23

Includes three acres of land related to The Park entertainment district development located between Park MGM and New York-New York.

Park MGM(2)

(4)

21

Regional Operations

MGM Grand Detroit (Detroit, Michigan)(2)

(4)(7)

27

Beau Rivage (Biloxi, Mississippi)(2)

(4)(8)

42

10 acres are subject to a tidelands lease.

40

Gold Strike Tunica (Tunica, Mississippi)(2)

(4)

24

MGM National Harbor (Prince George's County, Maryland)(2)

(4)(9)

23

All 23 acres are subject to a ground lease.

Borgata (Atlantic City, New Jersey)(2)

(4)(10)

46

11 acres are subject to ground leases.

MGM Springfield (Springfield, Massachusetts)

(4)

14

MGM Northfield Park (Northfield, Ohio)(2)

(4)

113

Empire City (Yonkers, New York)(2)

(4)(11)

97

Includes 57 acres of land adjacent to the property.

MGM China

MGM Macau(3)

(12)

10

MGM Cotai(3)

(12)

18

(1)

Subject to a lease agreement between a subsidiary of ours and the Bellagio BREIT Venture, in which the land and the real estate assets are owned and leased from the Bellagio BREIT Venture.  

(1)Subject to a master lease agreement between a subsidiary of ours and funds managed by Blackstone.

(2)Subject to a lease agreement between a subsidiary of ours and Bellagio BREIT Venture.
(3)Subject to a master lease agreement between a subsidiary of ours and MGP BREIT Venture.
(4)(2)

Subject to a master lease agreement between a subsidiary of ours and a subsidiary of the Operating Partnership, in which the land and the real estate assets are leased from a subsidiary of the Operating Partnership.

(3)

Subject to separate land concession agreements with the Macau government.

(4)

Beginning January 1, 2020, approximately two acres subject to a ground lease with a third party expired, reducing the total acres to approximately 75 acres.

(5)

Beginning February 14, 2020, subject to a master lease agreement between a subsidiary of ours and MGP BREIT Venture, in which the land and the real estate assets are leased from MGP BREIT Venture.

As of December 31, 2019, the land and substantially all of the assetsOperating Partnership.

(5)58 acres are subject to a master lease agreement between a subsidiary of MGM Grandours and a subsidiary of the Operating Partnership. We own an additional 15 acres of land located across the Las Vegas secured the obligations under our senior credit facility. In addition, the senior credit facility was secured byStrip from Luxor.
(6)Includes 3 acres of land related to The Park entertainment district development located between Park MGM and New York-New York.
(7)24 acres are subject to a pledgemaster lease agreement between a subsidiary of ours and a subsidiary of the equity or limited liability company interestsOperating Partnership.
(8)26 acres are subject to a master lease agreement between a subsidiary of ours and a subsidiary of the subsidiaries thatOperating Partnership, which leases 10 acres pursuant to a tidelands lease with a third party.
(9)All 23 acres are subject to a master lease agreement between a subsidiary of ours and a subsidiary of the Operating Partnership, which leases all 23 acres pursuant to a ground lease with a third party.
(10)37 acres are subject to a master lease agreement between a subsidiary of ours and a subsidiary of the Operating Partnership, which leases 11 acres pursuant to a ground lease with a third party.
(11)41 acres are subject to a master lease agreement between a subsidiary of ours and a subsidiary of the Operating Partnership. We own MGM Grand Las Vegas and Bellagio. In connectionan additional 56 acres adjacent to the property retained for potential future development.
(12)Subject to separate land concession agreements with the MGP BREIT Venture Transaction, on February 14, 2020, we entered into a new unsecured credit agreement which provides that we will grant a security interest in our Operating Partnership units in the future to the extent our leverage ratio exceeds certain thresholds.

Macau government.


The land and substantially all of the assets of MGP’s properties, indicated within the table above, other than MGM National Harbor, and Empire City, and MGM Springfield, secure the obligations under the Operating Partnership’s credit agreement. These borrowings are non-recourse to us.

The land and substantially all of the assets of Bellagio secure the obligations under the Bellagio BREIT Venture indebtedness. We provide a shortfall guarantee on

the principal amount of such indebtedness (and any interest accrued and unpaid thereon)
as further described within “Risk Factors – Risks Related to Our Business.”

The land and substantially all of the assets of MGM Grand Las Vegas and Mandalay Bay secure the obligations under MGP BREIT Venture’s indebtedness. We provide a shortfall guarantee on the principal amount of such indebtedness (and any interest accrued and unpaid thereon) as further described within “Risk Factors – Risks Related to Our Business.”

Other than as described above, none of our properties are subject to any major encumbrance.



33


ITEM 3.

ITEM 3.    LEGAL PROCEEDINGS

October 1 litigation.

We and/or certain
See discussion of our subsidiaries were named as defendantslegal proceedings in a number of lawsuits related to the October 1, 2017 shooting in Las Vegas. The matters involve in large degree the same legalNote 12 – Commitments and factual issues, each case being filed on behalf of individuals who are seeking damages for emotional distress, physical injury, medical expenses, economic damages and/or wrongful death. Lawsuits were first filed in October 2017 and include actions originally filed Contingencies in the District Court of Clark County, Nevada and in the Superior Court of Los Angeles County, California. In June 2018, we removed to federal court all actions that remained pending in California and Nevada state courts. We also initiated declaratory relief actions in federal courts in various districts against individuals who had sued or stated an intent to sue.

In connection with the mediation of these matters, we and law firms representing plaintiffs in the majority of pending matters and purporting to represent substantially all claimants known to us (collectively, the “Claimants”) have entered into a settlement agreement (the “Settlement Agreement”) whereby, subject to the satisfaction of certain monetary and non-monetary conditions, our insurance carriers will deposit funds into a settlement fund covering the plaintiffs and certain other cases that emerged or were filed prior to October 1, 2019. Pursuant to the terms of the Settlement Agreement, we expect that the total amount placed in the fund to be between $735 million and $800 million, subject to and depending on obtaining a minimum level of participation with escalators based on greater participation increasing the amount payable up to $800 million in the event of 100% participation by certain categories of claimants, as defined in the Settlement Agreement. We have $751 million of insurance coverage available to fund. Following the mediation a few additional lawsuits were filed against us and/or certain of our subsidiaries. While it is possible that these lawsuits may be resolved as part of the Settlement Agreement, no assurances can be made that they will be included. Although we continue to believe we are not legally responsible for the perpetrator’s criminal acts, in the interest of avoiding protracted litigation and the related impact on the community, we believed it was in the best interests of all parties involved to negotiate and enter into the Settlement Agreement. As a result of the foregoing, we believe that it is probable a loss will be incurred and, as of December 31, 2019, we accrued a liability of $735 million, which represents the low end of the range of probable loss. In addition, we recorded an insurance receivable of $735 million, which represents the entire amount of the liability recorded for the settlement of these cases. While we intend for substantially all claimants to be covered by the Settlement Agreement, it remains possible that certain claimants may not join the settlement. In addition, no assurances can be given that the significant conditions to the Settlement Agreement will be satisfied by the Claimants.

If the conditions in the Settlement Agreement are not satisfied and the mediation stay is lifted, we are currently unable to reliably predict the future developments in, outcome of, and economic costs and other consequences of any such litigation related to this matter. We will continue to investigate the factual and legal defenses, and evaluate these matters based on subsequent events, new information and future circumstances. We intend to defend against any such lawsuits and believe we ultimately should prevail, but litigation of this type is inherently unpredictable. Although there are significant procedural, factual and legal issues to be resolved that could significantly affect our belief as to the possibility of liability, we currently believe that it is reasonably possible that we could incur liability in connection with certain of these lawsuits. The foregoing determination was made in accordance with generally accepted accounting principles, as codified in ASC 450-20, and is not an admission of any liability on our part or any of our affiliates. Given that these cases would be in the early stages, and in light of the uncertainties surrounding them, we do not currently possess sufficient information to determine a range of reasonably possible liability. The insurance carriers have not expressed a reservation of rights or coverage defense that affects our evaluation of potential losses in connection with these claims. Our general liability insurance coverage provides, as part of the contractual “duty to defend”, payment of legal fees and associated costs incurred to defend covered lawsuits that are filed arising from the October 1, 2017 shooting in Las Vegas. Payment of such fees and costs is in addition to (and not limited by) the limits of the insurance policies and does not erode the total liability coverage available.

Other. We are a party to various legal proceedings, most of which relate to routine matters incidental to our business. Management does not believe that the outcome of such proceedings will have a material adverse effect on ouraccompanying consolidated financial position, results of operations or cash flows.statements.


ITEM 4.

ITEM 4.    MINE SAFETY DISCLOSURES


Not applicable.



34

PART II

ITEM 5.

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


Common Stock Information


Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “MGM.”


There were approximately 3,4833,294 record holders of our common stock as of February 24, 2020.

23, 2022.


Dividend Policy


The Company implemented a dividend program in February 2017 pursuant to which it has paid regular quarterly dividends. In the second quarter of 2020 the Company reduced its annual dividend to $0.01 per share in light of the impact of the COVID-19 pandemic on its operations at that time. The Company has maintained an annual dividend of $0.01 per share throughout 2021. The amount, declaration and payment of any future dividends will be subject to the discretion of our Board of Directors who will evaluate our dividend policy from time to time based on factors it deems relevant, and the contractual limitations described below. In addition, as a holding company with no independent operations, our ability to pay dividends will depend upon the receipt of cash from our operating subsidiaries to generate the funds from operations necessary to pay dividends on our common stock. Furthermore, our senior credit facility contains financial covenants and restrictive covenants that could restrict our ability to pay dividends, subject to certain exceptions. In addition, the Operating Partnership and MGM China credit facilities each contain limitations on the ability of the applicable subsidiary under each credit agreement to pay dividends to us. There can be no assurance that we will continue to pay dividends in the future.


Purchases of Equity Securities by the Issuer


The following table provides information about share repurchases made by the Company of its common stock during the quarter ended December 31, 2019:

2021:

 

 

 

 

 

 

 

 

 

Total Number

 

 

Dollar Value of

 

 

Total

 

 

 

 

 

 

of Shares

 

 

Shares that May

 

 

Number of

 

 

Average

 

 

Purchased as

 

 

Yet be Purchased

 

 

Shares

 

 

Price Paid

 

 

Part of a Publicly

 

 

Under the Program

 

Period

Purchased

 

 

per Share

 

 

Announced Program

 

 

(In thousands)

 

October 1, 2019 — October 31, 2019

 

—

 

 

$

—

 

 

 

—

 

 

$

750,216

 

November 1, 2019 — November 30, 2019

 

4,964,502

 

 

$

31.23

 

 

 

4,964,502

 

 

$

595,162

 

December 1, 2019 — December 31, 2019

 

7,284,817

 

 

$

32.62

 

 

 

7,284,817

 

 

$

357,496

 


On May 10, 2018, the Company announced that its Board of Directors had adopted a $2.0 billion stock repurchase program. Additionally, in

PeriodTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of a Publicly Announced Program
Dollar Value of Shares that May Yet be Purchased Under the Program
(In thousands)
October 1, 2021 — October 31, 20211,800,000 $44.51 1,800,000 $1,897,460 
November 1, 2021 — November 30, 20213,747,997 $43.71 3,747,997 $1,733,626 
December 1, 2021 — December 31, 202111,598,650 $41.67 11,598,650 $1,250,266 

In February 2020, upon substantial completion of the priorMay 2018 $2.0 billion stock repurchase program, the Company announced that itsCompany’s Board of Directors had adoptedauthorized a $3.0 billion stock repurchase program. Under the stock repurchase program, the Company may repurchase shares from time to time in the open market or in privately negotiated agreements. Repurchases of common stock may also be made under a Rule 10b5-1 plan, which would permit common stock to be repurchasedpurchased when the Company might otherwise be precluded from doing so under insider trading laws. The timing, volume and nature of stock repurchases will be at the sole discretion of management, dependent on market conditions, applicable securities laws, and other factors, and may be suspended or discontinued at any time. All shares repurchased by the Company during the quarter ended December 31, 20192021 were purchased pursuant to the Company’s publicly announced stock repurchase programs and have been retired.



35


PERFORMANCE GRAPH

The graph below matches our cumulative Five-Year5-year total shareholder return on common stock with the cumulative total returns of the Dow Jones US Total Return index, the S&P 500 index and the Dow Jones US Gambling index. The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends as required by the SEC) from December 31, 20142016 to December 31, 2019.2021. The return shown on the graph is not necessarily indicative of future performance.


The following performance graph shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act, nor shall this information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into a filing.

mgm-20211231_g1.jpg


12/1612/1712/1812/1912/2012/21
MGM Resorts International100.00 117.48 86.75 121.19 115.78 164.94 
Dow Jones US Total Return100.00 121.50 115.45 151.41 182.30 230.61 
S&P 500100.00 121.83 116.49 153.17 181.35 233.41 
Dow Jones US Gambling100.00 140.14 97.24 143.49 128.65 112.16 

ITEM 6.SELECTED FINANCIAL DATA

The following reflects selected historical financial data that should be read in conjunction with “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes theretostock price performance included elsewhere in this Annual Report on Form 10-K. The historical results aregraph is not necessarily indicative of the results of operations to be expected in the future.

 

 

2019

 

 

2018

 

 

2017

 

 

2016

 

 

2015

 

 

 

(In thousands, except per share data)

 

Net revenues

 

$

12,899,672

 

 

$

11,763,096

 

 

$

10,797,479

 

 

$

9,478,269

 

 

$

9,179,590

 

Operating income (loss)

 

 

3,940,215

 

 

 

1,469,486

 

 

 

1,712,527

 

 

 

2,078,199

 

 

 

(152,838

)

Net income (loss)

 

 

2,214,380

 

 

 

583,894

 

 

 

2,088,184

 

 

 

1,235,846

 

 

 

(1,037,444

)

Net income (loss) attributable to MGM Resorts

   International

 

 

2,049,146

 

 

 

466,772

 

 

 

1,952,052

 

 

 

1,100,408

 

 

 

(445,515

)

Earnings (loss) per share - Basic

 

$

3.90

 

 

$

0.82

 

 

$

3.38

 

 

$

1.94

 

 

$

(0.82

)

Earnings (loss) per share - Diluted

 

$

3.88

 

 

$

0.81

 

 

$

3.34

 

 

$

1.92

 

 

$

(0.82

)

Dividends declared per common share

 

$

0.52

 

 

$

0.48

 

 

$

0.44

 

 

$

—

 

 

$

—

 

Total assets

 

$

33,876,356

 

 

$

30,210,706

 

 

$

29,160,042

 

 

$

28,174,400

 

 

$

25,215,178

 

Long-term obligations(1)

 

 

15,915,508

 

 

 

15,449,495

 

 

 

13,115,246

 

 

 

13,359,339

 

 

 

12,532,224

 

MGM Resorts International stockholders' equity

 

 

7,727,265

 

 

 

6,512,283

 

 

 

7,577,061

 

 

 

6,192,825

 

 

 

5,119,927

 

(1)

Includes long-term debt, operating lease liabilities, other long-term obligations (which includes finance lease liabilities), and redeemable noncontrolling interests.

The following events/transactions affect the year-to-year comparability of the selected financial data presented above:

Acquisitions, Dispositions, and Significant Transactions

•

In 2016, we recorded a $401 million gain for our share of CityCenter’s gain on the sale of the Shops at Crystals (“Crystals”) and also recorded a $430 million gain on our acquisition of the remaining 50% ownership interest in Borgata on August 1, 2016, and began to consolidate Borgata beginning on that date.

future stock price performance.

•

In 2016, we received net proceeds of $1.1 billion in connection with MGP’s IPO.

•

In 2016, we opened MGM National Harbor.

36

•

In 2018, we opened MGM Cotai and MGM Springfield; MGP acquired Northfield.


•

In 2019, we acquired Empire City.

ITEM 6.    RESERVED

•

In 2019, we recorded a loss of $220 million related to the sale of Circus Circus Las Vegas and adjacent land and a gain of $2.7 billion related to the Bellagio transaction.

Other

•

In 2015, we recorded a goodwill impairment charge of $1.5 billion at MGM China. We also recorded an $80 million gain for our share of CityCenter’s gain resulting from the final resolution of its construction litigation and related settlements.

•

In 2016, we recorded a $152 million expense related to our strategic decision to exit the fully bundled sales system of NV Energy. In 2017, we then recorded a gain of $45 million related to the NV Energy exit fee modification.

•

In 2017, we began declaring dividends.

•

In 2017, we recorded a $1.4 billion tax benefit related to the enactment of the U.S. Tax Cuts and Jobs Act (“Tax Act”). In 2018, we then recorded a $20 million tax expense related to the Tax Act.

•

In 2018, we adopted the new accounting standard relating to revenue recognition on a full retrospective basis. Accordingly, financial data as of and for the years ended December 31, 2018, 2017, and 2016, and for the year ended December 31, 2015, reflect such retrospective adoption within the chart above. Financial data as of December 31, 2015 does not reflect such adoption.

•

In 2019, we adopted the new accounting standard related to leases utilizing the simplified transition method and accordingly did not recast comparative period financial information.

•

In 2019, we recorded a $198 million loss on early retirement of debt.


ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management’s discussion and analysis of financial condition and results of operations includes discussion as of and for the year ended December 31, 20192021 compared to December 31, 2018.2020. Discussion of our financial condition and results of operations as of and for the year ended December 31, 20182020 compared to December 31, 20172019 can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018,2020, filed with the Securities and Exchange Commission (“SEC”) on February 27, 2019.26, 2021.

Executive Overview


Description of our business and key performance indicators

Our primary business is the ownership and operation of casino resorts, which offer gaming, hotel, convention, dining, entertainment, retail and other resort amenities. We own or invest inoperate several of the finest casino resorts in the world and we continually reinvest in our resorts to maintain our competitive advantage. 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 heavily on the ability of our resorts to generate operating cash flow to fund capital expenditures, provide excess cash flow for future development, and repay debt financings.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.


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.

The Las Vegas Strip segment results of operations are heavily impacted by visitor volume and trends. During the year ended December 31, 2019, Las Vegas visitor volume increased 1% compared to the prior year period according to information published by the Las Vegas Convention and Visitors Authority. The Las Vegas market is growing and diversifying with the addition of new sporting events and venues, the expansion of convention centers, as well as music and entertainment events.

The MGM China segment results of operations also are heavily impacted by visitor volume and trends. During the year ended December 31, 2019 Macau visitor arrivals increased 10% compared to the prior year period according to statistics published by the Statistics and Census Service of the Macau Government. In early 2020, the rapid spread of a respiratory illness caused by a novel coronavirus (Covid-19) identified as originating in Wuhan, Hubei Province, China led to certain cities in China being placed under quarantine and citizens across China were advised to avoid non-essential travel. Certain countries, including the U.S., have restricted inbound travel from mainland China to mitigate the spread of the virus. In addition, China implemented a temporary suspension of its visa scheme that permits mainland Chinese to travel to Macau, and on February 4, 2020 the Hong Kong SAR government temporarily suspended all ferry service from Hong Kong to Macau, until further notice. The Macau Government Tourism Office disclosed total visitation from mainland China to Macau decreased 83% and total visitor arrivals decreased 78% during Chinese New Year as compared to the same period in 2019.

On February 4, 2020, the government of Macau asked that all gaming operators in Macau suspend casino operations for a 15-day period that commenced on February 5, 2020. As a result, MGM Macau and MGM Cotai suspended all operations at their properties other than operations that were necessary to provide sufficient non-gaming facilities to serve any remaining hotel guests. Operations at MGM Macau and MGM Cotai resumed on February 20, 2020; however, there are currently limits on the number of gaming tables allowed to operate and restrictions on the number of seats available at each table, and
 the temporary suspension of the visa scheme and ferry service to Macau remains in place. As a result of these measures, we expect material declines in MGM China’s operating results during the first quarter of 2020 and potentially thereafter. Additionally, to the extent that the virus impacts the willingness or ability of customers to travel to our properties in the United States (due to travel restrictions, or otherwise), our domestic results of operations could also be negatively impacted. We are continuing to evaluate the nature and extent of the impacts to our business, which could have a material effect on our consolidated operating results for the first quarter of 2020 and potentially thereafter. Given the uncertain nature of these circumstances, the related impact on our results of operations, cash flows and financial condition cannot be reasonably estimated at this time.

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 Baccaratbaccarat 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. While our results do not depend on key individual customers, a significant portion of our operating income is generated from high-end gaming customers, which can cause variability in our results as evidenced by the recent weakness in Far East baccarat, which we expect to continue in 2020.results. 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. 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. Throughout the second and third quarters of 2020, all of our properties that were temporarily closed re-opened to the public, with temporary re-closures and re-openings occurring for certain of our properties or portions thereof into the first quarter of 2021. Upon re-opening, the properties continued to operate without certain amenities and subject to certain occupancy limitations, with restrictions varying by jurisdiction. 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.

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
37

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.

The Las Vegas Strip segment results of operations are heavily impacted by visitor volume and trends. During the year ended December 31, 2021, Las Vegas visitor volume increased 69% 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 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.

For a discussion of the risks to our business resulting from COVID-19, please see “Item 1A. Risk Factors — Risks Related to Our Business, Industry, and Market Conditions.”

Other Developments

As of December 31, 2019, pursuant to a master lease agreement with MGP,2021, we lease the real estate assets of The Mirage, Mandalay Bay, 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 Northfield Park.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, pursuant to a lease agreement with the Bellagio BREIT Venture, we lease the real estate assets of Bellagio.

In July 2018,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 completed its Northfield Acquisition for approximately $1.1 billion. 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, which was thenand added it to the existing master lease between us and MGP. See Note 4 and 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 existing 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 existing master lease between us and MGP with respect to investmentsimprovements made by us related to improvements atthe 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 Sale-Leaseback Transaction,transaction, pursuant to which we formed the 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 subsequent ten-year10-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 ten10 years
38

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. We received $4.25 billion considerationIn 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 sale,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 with the remaining considerationand cash of approximately $4.2 billion in cash.billion. We also provide a shortfall guarantee of the principal amount of indebtedness of the Bellagio BREIT Venture’s $3.01 billion of debtVenture (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 lease agreement.

shortfall guarantee, respectively.


In December 2019, we sold Circus Circus Las Vegas and adjacent land for $825 million, which consisted of $662.5$663 million paid in cash and a secured note due 2024 with a face value of $162.5$163 million and fair value of $133.7$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.

On


In February 14, 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 the 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. In connection with the transactions, we providedWe also provide a shortfall guarantyguarantee of the principal amount of indebtedness of the MGP 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 transactions,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 provides for ahas an initial term of thirty30 years with two ten-year10-year renewal options and hasperiods, exercisable at our option. The initial term of the lease provides for an initial annual base rent of $292 million escalating annually atwith a rate offixed 2% per annumescalator for the first fifteen15 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 will requireobligates us to spend 3.5%a specified percentage of net revenues over a rolling five-year period at the properties on capital expenditures and for us tothat we comply with certain financial covenants, which, if not met, willwould 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 one-year1-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 existing 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.million, as further discussed in Note 18.

Also, on in January 14, 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 applicable cash amount as calculated in accordance withten day average closing price prior to the operating agreement.date of the notice of redemption. The waiver terminateswas effective upon closing of the transaction on February 14, 2020 and was scheduled to terminate on the earlier of 24 months following the closingFebruary 14, 2022 or upon our receipt of the MGP BREIT Venture Transaction and us receiving 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. As a result, the waiver terminated in accordance with its terms.


In January 2019,March 2021, we announced the implementationdelivered a notice of a company-wide business optimization initiative (the “MGM 2020 Plan”)redemption to further reduce costs, improve efficiencies and position us for growth,MGP covering approximately 37 million Operating Partnership units that we held which yielded over $130 millionwas satisfied with aggregate cash proceeds of Adjusted EBITDAR uplift in 2019 compared to 2018 results. We expect the initiatives associatedapproximately $1.2 billion, using cash on hand together with the MGM 2020 Planproceeds 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.

39

In August 2021, we entered into an agreement with VICI and MGP whereby VICI will acquire MGP. Pursuant to exceed Adjusted EBITDAR upliftthe agreement, MGP Class A shareholders will receive 1.366 shares of $200newly 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 byownership interest in the endVICI OP (based upon the close price of 2020 compared to 2018 results, which includes operating model changes to improve efficiency. We currently anticipate achieving this target.VICI stock as of August 3, 2021). MGP’s Class B share that we hold will be cancelled. As part of the second phase,transaction, we planwill 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 investthe 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. 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 digital transformationfinancial 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 drive revenue growthwhich 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. 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 customer-centric strategy aimed at increasing customer spend, increasing our wallet share,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 attracting our most valuable customers.

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.


40

Key Performance Indicators


Key performance indicators related to gaming and hotel revenue are:

•

Gaming revenue indicators: table games drop and slots 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; and

•

Hotel revenue indicators: hotel occupancy (a volume indicator); average daily rate (“ADR,” a price indicator); and revenue per available room (“REVPAR,” a summary measure of hotel results, combining ADR and occupancy rate). Our calculation of ADR, which is the average price of occupied rooms per day, includes the impact of complimentary rooms. Complimentary room rates are determined based on standalone selling price. 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.

•Gaming revenue indicators: table games drop and slots 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 COVID-19 pandemic could cause volatility in our hold percentages; and

•Hotel revenue indicators: hotel occupancy (a volume indicator); average daily rate (“ADR,” a price indicator); and revenue per available room (“REVPAR,” a summary measure of hotel results, combining ADR and occupancy rate). Our calculation of ADR, which is the average price of occupied rooms per day, includes the impact of complimentary rooms. Complimentary room rates are determined based on standalone selling price. 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.

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 COVID-19 pandemic could cause volatility in MGM China’s hold percentages.

•

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.

Results of Operations


The following discussion is based on our consolidated financial statements for the years ended December 31, 2019, 20182021, 2020 and 2017.

2019.


Summary FinancialOperating Results


The following table summarizes our operating results:

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In thousands)

 

Net revenues

 

$

12,899,672

 

 

$

11,763,096

 

 

$

10,797,479

 

Operating income

 

 

3,940,215

 

 

 

1,469,486

 

 

 

1,712,527

 

Net income

 

 

2,214,380

 

 

 

583,894

 

 

 

2,088,184

 

Net income attributable to MGM Resorts International

 

 

2,049,146

 

 

 

466,772

 

 

 

1,952,052

 



 Year Ended December 31,
 202120202019
 (In thousands)
Net revenues$9,680,140 $5,162,082 $12,899,672 
Operating income (loss)2,278,699 (642,434)3,940,215
Net income (loss)1,208,389 (1,319,907)2,214,380
Net income (loss) attributable to MGM Resorts International1,254,370 (1,032,724)2,049,146

Summary Operating Results

41


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

Las Vegas Strip Resorts(1)
Closure DateInitial Re-opening Date
BellagioMarch 17, 2020June 4, 2020
MGM Grand Las VegasMarch 17, 2020June 4, 2020
New York-New YorkMarch 17, 2020June 4, 2020
ExcaliburMarch 17, 2020June 11, 2020
LuxorMarch 17, 2020June 25, 2020
Mandalay Bay(2)
March 17, 2020July 1, 2020
The Mirage(3)
March 17, 2020August 27, 2020
Park MGM(2)
March 17, 2020September 30, 2020
Regional Operations
Gold Strike TunicaMarch 17, 2020May 25, 2020
Beau RivageMarch 17, 2020June 1, 2020
MGM Northfield ParkMarch 14, 2020June 20, 2020
MGM National HarborMarch 15, 2020June 29, 2020
MGM Springfield(4)
March 15, 2020July 13, 2020
BorgataMarch 16, 2020July 26, 2020
MGM Grand Detroit(5)
March 16, 2020August 7, 2020
Empire CityMarch 14, 2020September 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. 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.

Consolidated net revenues were $9.7 billion in 2019 increased 10%2021 compared to 2018 due primarily $5.2 billion in 2020, an increase of 88%. The current year benefited from the inclusion of the net revenues of Aria subsequent to continued ramp-upconsolidation in September 2021 and the removal of operationsmandated operational and capacity restrictions at MGM Cotai following its opening in February 2018, a full year of operating results at MGM Springfield, which opened in August 2018, the acquisition of Empire City in January 2019, a full year of operating results at MGM Northfield Park, which MGP acquired in July 2018, andour properties, as well as an increase in revenues as a result oftravel, while the ramp-up of operations at Park MGM, partially offsetprior year was negatively affected by a decrease in casino revenuestemporary property closures at certain of our other Las Vegas Strip Resorts.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 increased $2.5was $2.3 billion to $3.9 billion in 2019,for the year ended December 31, 2021 compared to $1.5 billiona loss of $642 million in 2018.2020, 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 $2.7gain 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 Bellagio Sale-Leaseback Transaction,modification and accelerated vesting of outstanding stock compensation awards. Property transactions, net in the current year included a $220gain of $29 million loss 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 Circus Circus Las Vegasart, and adjacent land, includedan other-than-temporary impairment charge of $22 million related to an investment in propertyan unconsolidated affiliate. Property transactions, net as well as $92in the prior year included a $64 million in restructuring costsother-than-temporary non-cash impairment charge on an equity method investment and $17 million related to severance, accelerated stock compensationa loss on production show costs. Depreciation expense and consulting fees directly related to the operating model component of the MGM 2020 Plan. In comparison, consolidated operating income in 2018 included a $45 million gain related to the sale of Grand Victoria and $24 million in business interruption insurance proceeds primarily at Mandalay Bay. During 2019, consolidated operating income was positively impacted by the increase in net revenues described above and a decrease in preopening and start-up expenses, partially offset by increases in general and administrative, depreciation and amortization, and corporate expenses, further discussed below. Preopening and start-up expenses decreased by $144 million in 2019 compared to 2018 due primarily to the openings of MGM Springfield and MGM Cotai and the completion of the Park MGM rebranding project. Corporate expense, including share-based compensation for corporate employees, increased $45$60 million compared to the prior year period. Theprimarily as a result of certain assets
42

becoming fully depreciated in the current year period included $20 million of Empire City acquisition costs,at MGM China, primarily related to transfer taxes and advisory fees, $29 million in costs incurred to implement theat MGM 2020 Plan, of which $12 million is included in the restructuring costs discussed above, and $11 million in finance modernization initiative costs. The prior year period included $27 million of corporate brand campaign expenses, $19 million in transaction costs, and $8 million in costs incurred to implement the MGM 2020 Plan and finance modernization initiatives. Depreciation and amortization expense, and generalCotai. General and administrative expense increased $385 million compared to the prior year due primarily to the operationsprior 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 Cotai, MGM SpringfieldGrand Las Vegas and Empire City.

Mandalay Bay lease in the current year, partially offset by realized benefits from our cost savings initiatives at our domestic properties.


Net Revenues by Segment

The following table presents a detail by segment of net revenues:

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In thousands)

 

Las Vegas Strip Resorts

 

 

 

 

 

 

 

 

 

 

 

 

Table games win

 

$

789,330

 

 

$

949,055

 

 

$

931,508

 

Slots win

 

 

1,193,607

 

 

 

1,140,269

 

 

 

1,106,192

 

Other

 

 

64,834

 

 

 

62,249

 

 

 

67,150

 

Less: Incentives

 

 

(751,601

)

 

 

(743,840

)

 

 

(668,020

)

   Casino revenue

 

 

1,296,170

 

 

 

1,407,733

 

 

 

1,436,830

 

Rooms

 

 

1,863,521

 

 

 

1,776,029

 

 

 

1,778,869

 

Food and beverage

 

 

1,517,745

 

 

 

1,402,378

 

 

 

1,410,496

 

Entertainment, retail and other

 

 

1,153,615

 

 

 

1,130,532

 

 

 

1,119,928

 

   Non-casino revenue

 

 

4,534,881

 

 

 

4,308,939

 

 

 

4,309,293

 

 

 

 

5,831,051

 

 

 

5,716,672

 

 

 

5,746,123

 

Regional Operations

 

 

 

 

 

 

 

 

 

 

 

 

Table games win

 

 

827,155

 

 

 

793,754

 

 

 

722,966

 

Slots win

 

 

2,362,638

 

 

 

1,947,325

 

 

 

1,784,452

 

Other

 

 

313,710

 

 

 

108,690

 

 

 

92,377

 

Less: Incentives

 

 

(965,723

)

 

 

(822,844

)

 

 

(764,992

)

   Casino revenue

 

 

2,537,780

 

 

 

2,026,925

 

 

 

1,834,803

 

Rooms

 

 

316,753

 

 

 

318,017

 

 

 

319,049

 

Food and beverage

 

 

494,243

 

 

 

428,934

 

 

 

410,143

 

Entertainment, retail and other

 

 

201,008

 

 

 

160,645

 

 

 

145,725

 

   Non-casino revenue

 

 

1,012,004

 

 

 

907,596

 

 

 

874,917

 

 

 

 

3,549,784

 

 

 

2,934,521

 

 

 

2,709,720

 

MGM China

 

 

 

 

 

 

 

 

 

 

 

 

VIP table games win

 

 

1,237,297

 

 

 

1,235,387

 

 

 

1,099,303

 

Main floor table games win

 

 

1,906,600

 

 

 

1,391,454

 

 

 

1,044,415

 

Slots win

 

 

286,939

 

 

 

284,919

 

 

 

180,500

 

Less: Commissions and incentives

 

 

(821,030

)

 

 

(716,616

)

 

 

(582,583

)

   Casino revenue

 

 

2,609,806

 

 

 

2,195,144

 

 

 

1,741,635

 

Rooms

 

 

142,306

 

 

 

118,527

 

 

 

54,824

 

Food and beverage

 

 

127,152

 

 

 

114,862

 

 

 

51,330

 

Entertainment, retail and other

 

 

26,158

 

 

 

21,424

 

 

 

10,371

 

   Non-casino revenue

 

 

295,616

 

 

 

254,813

 

 

 

116,525

 

 

 

 

2,905,422

 

 

 

2,449,957

 

 

 

1,858,160

 

Reportable segment net revenues

 

 

12,286,257

 

 

 

11,101,150

 

 

 

10,314,003

 

Corporate and other

 

 

613,415

 

 

 

661,946

 

 

 

483,476

 

 

 

$

12,899,672

 

 

$

11,763,096

 

 

$

10,797,479

 


 Year Ended December 31,
 202120202019
 (In thousands)
Las Vegas Strip Resorts   
Casino$1,549,419 $728,254 $1,296,170 
Rooms1,402,712 662,813 1,863,521 
Food and beverage1,015,366 471,529 1,517,745 
Entertainment, retail and other769,688 383,189 1,153,615 
 4,737,185 2,245,785 5,831,051 
Regional Operations   
Casino2,721,515 1,569,193 2,537,780 
Rooms220,828 130,945 316,753 
Food and beverage307,750 184,153 494,243 
Entertainment, retail and other142,270 82,880 201,008 
 3,392,363 1,967,171 3,549,784 
MGM China   
Casino1,057,962 565,671 2,609,806 
Rooms66,498 36,624 142,306 
Food and beverage68,489 40,284 127,152 
Entertainment, retail and other17,812 14,124 26,158 
 1,210,761 656,703 2,905,422 
Reportable segment net revenues9,340,309 4,869,659 12,286,257 
Corporate and other339,831 292,423 613,415 
 $9,680,140 $5,162,082 $12,899,672 

Las Vegas Strip Resorts


Las Vegas Strip Resorts casino revenue decreased 8%was $1.5 billion in 20192021, compared to 2018$728 million in 2020, an increase of 113%, due primarily due to the temporary property closures for a 17% decrease in table games win resulting from a 9% decrease in table games drop, driven by Far East baccarat,portion of 2020 and removal of mandated operational and capacity restrictions, as well as an increase in incentives, partially offset by a 5% increasetravel in slots win.the current year, and the inclusion of the operating results of Aria subsequent to consolidation in September 2021.


43


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

 

 

Year Ended December 31,

 

 

2019

 

2018

 

2017

 

 

(Dollars in millions)

Table Games Drop

 

$3,526

 

$3,857

 

$3,777

Table Games Win %

 

22.4%

 

24.6%

 

24.7%

Slots Handle

 

$12,874

 

$12,569

 

$12,396

Slots Hold %

 

9.3%

 

9.1%

 

8.9%


 Year Ended December 31,
 202120202019
 (Dollars in millions)
Table Games Drop$3,597 $2,001 $3,526 
Table Games Win$885 $470 $789 
Table Games Win %24.6 %23.5 %22.4 %
Slots Handle$15,089 $6,904 $12,874 
Slots Win$1,417 $649 $1,194 
Slots Hold %9.4 %9.4 %9.3 %

Las Vegas Strip Resorts rooms revenue increased 5%was $1.4 billion in 20192021, compared to 2018,$663 million in 2020, an increase of 112%, due primarily due to the temporary property closures for a 4%portion of the prior year and removal of mandated operational and capacity restrictions, as well as an increase in REVPAR.

travel in the current year, and the inclusion of the operating results of Aria subsequent to consolidation in September 2021.


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

 

 

Year Ended December 31,

 

 

2019

 

2018

 

2017

Occupancy

 

91%

 

91%

 

91%

Average Daily Rate (ADR)

 

$167

 

$161

 

$160

Revenue per Available Room (REVPAR)

 

$153

 

$147

 

$146


 Year Ended December 31,
 202120202019
Occupancy(1)
74 %55 %91 %
Average Daily Rate (ADR)$173 $161 $167 
Revenue per Available Room (REVPAR)(1)
$128 $88 $153 

(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 increased 8%was $1.0 billion in 20192021, compared to 2018$472 million in 2020, an increase of 115%, due primarily to the ramp-uptemporary closures at certain properties and operational and capacity restrictions in the prior year and removal of newly opened outlets at Park MGM and NoMad Las Vegas andthose restrictions in the current year as well as an increase in cateringtravel in the current year, and banquets revenue driven by the completioninclusion of the expansionoperating results of MGM Grand’s Conference CenterAria subsequent to consolidation in 2019.

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 increased 2%was $770 million in 20192021, compared to 2018$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 entertainment revenue relatedtravel 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 at Park Theater, partially offset by a decreasedid not primarily occur until beginning in revenue from Cirque du Soleil production shows.

the latter part of the second quarter of the current year.


Regional Operations


Regional Operations casino revenue increased 25%was $2.7 billion in 20192021, compared to 2018$1.6 billion in 2020, an increase of 73%, due primarily due to the acquisitiontemporary property closures in the prior year and removal of Empire Citymandated operational and capacity restrictions and, to a lesser extent, increase in 2019, for which its video lottery terminal revenue is includedtravel in other casino revenue, the acquisition of MGM Northfield Park’s operations from MGP, and a full year of operations at MGM Springfield.

current year.


44

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

 

 

Year Ended December 31,

 

 

2019

 

2018

 

2017

 

 

(Dollars in millions)

Table Games Drop

 

$4,226

 

$4,038

 

$3,872

Table Games Win %

 

19.6%

 

19.7%

 

18.7%

Slots Handle

 

$25,031

 

$21,468

 

$19,634

Slots Hold %

 

9.4%

 

9.1%

 

9.1%


 Year Ended December 31,
 202120202019
 (Dollars in millions)
Table Games Drop$3,980 $2,422 $4,226 
Table Games Win$788 $488 $827 
Table Games Win %19.8 %20.1 %19.6 %
Slots Handle$25,566 $14,527 $25,031 
Slots Win$2,462 $1,405 $2,363 
Slots Hold %9.6 %9.7 %9.4 %

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 increased 15%was $308 million in 20192021, compared to 2018$184 million in 2020, an increase of 67%, due primarily to fullthe temporary property closures in the prior year and removal of operations at MGM Springfield,mandated operational and capacity restrictions beginning primarily in the acquisitionsecond quarter of Empire City, and the acquisition of MGM Northfield Park’s operations from MGP.

current year.


Regional Operations entertainment, retail and other revenue increased 25%was $142 million in 20192021, compared to 2018$83 million in 2020, an increase of 72%, due primarily to entertainment revenue at MGM Springfieldtemporary property closures in the prior year and MGM Northfield Park, ATM fees fromremoval of mandated operational and capacity restrictions beginning primarily in the operationssecond quarter of MGM Springfield, Empire City and MGM Northfield Park, and parking fees from the operations of Empire City.

current year.


MGM China

The following table shows key gaming statistics for MGM China:

 

 

Year Ended December 31,

 

 

2019

 

2018

 

2017

 

 

(Dollars in millions)

VIP Table Games Turnover

 

$38,071

 

$40,599

 

$34,533

VIP Table Games Win %

 

3.2%

 

3.0%

 

3.2%

Main Floor Table Games Drop

 

$8,252

 

$7,566

 

$5,159

Main Floor Table Games Win %

 

23.1%

 

18.4%

 

20.2%


 Year Ended December 31,
 202120202019
 (Dollars in millions)
VIP Table Games Turnover$8,499 $7,015 $38,071 
VIP Table Games Win$272 $213 $1,237 
VIP Table Games Win %3.2 %3.0 %3.2 %
Main Floor Table Games Drop$4,509 $2,037 $8,252 
Main Floor Table Games Win$966 $467 $1,907 
Main Floor Table Games Win %21.4 %22.9 %23.1 %

MGM China net revenue increased 19%revenues were $1.2 billion in 20192021, compared to 2018 primarily as a result of the continued ramp-up of operations at MGM Cotai and$657 million in 2020, an increase in main floor table games win percentage. Main floor table games win increased 37% compared to theof 84%. The prior year due to the addition of 25 new-to-market tables at MGM Cotaiwas negatively affected by both property closures in 2019February 2020 and a 472 basis point increasewas more significantly impacted by travel and entry restrictions in win percentage. VIP table games win increased slightly in 2019 compared to 2018 due to the opening of VIP junket rooms at the end of the third quarter of 2018 at MGM Cotai and an increaseMacau than in the VIP table games win percentage, offset by a 34% decrease in turnover at MGM Macau.

current year.


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 and $68 million in net revenues from MGP’s Northfield casino, which represents revenues prior to our(which was terminated upon the acquisition of MGM Northfield Park’s operations from MGP on April 1, 2019. Corporate and other revenue for 2018 included $133 millionCityCenter in net revenues from MGP Northfield’s casino.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 $425 millionfor 2021, 2020 and $402 million2019, respectively. Reimbursed costs revenue for 2019, 2018 and 2017, respectively.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.


45

Adjusted Property EBITDAR and Adjusted EBITDAR


The following table presents a detail ofAdjusted Property EBITDAR and Adjusted EBITDAR. We use 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 “Non-GAAP Measures”Note 17 to the accompanying consolidated financial statements and “Reportable Segment GAAP measure” below for additional information.

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In thousands)

 

Adjusted EBITDAR

 

 

 

 

 

 

 

 

 

 

 

 

Las Vegas Strip Resorts

 

$

1,643,122

 

 

$

1,706,315

 

 

$

1,781,390

 

Regional Operations

 

 

969,866

 

 

 

781,854

 

 

 

754,597

 

MGM China

 

 

734,729

 

 

 

574,333

 

 

 

535,524

 

Reportable segment Adjusted Property EBITDAR

 

 

3,347,717

 

 

 

3,062,502

 

 

 

3,071,511

 

Corporate and other

 

 

(331,621

)

 

 

(224,800

)

 

 

(213,908

)

 

 

$

3,016,096

 

 

$

2,837,702

 

 

$

2,857,603

 


 Year Ended December 31,
 202120202019
 (In thousands)
Las Vegas Strip Resorts$1,738,211 $232,188 $1,643,122 
Regional Operations1,217,814 343,990 969,866 
MGM China25,367 (193,832)734,729 
Corporate and other(560,309)(530,843)(331,621)
Adjusted EBITDAR$2,421,083 

Las Vegas Strip Resorts

Adjusted Property EBITDAR at our


Las Vegas Strip Resorts decreased 4%Adjusted Property EBITDAR was $1.7 billion in 20192021 compared to 2018 due primarily to a decrease in casino revenue, as discussed above, and the inclusion of $24$232 million in business interruption insurance proceeds at Mandalay Bay in the prior year.2020. Las Vegas Strip Resorts Adjusted Property EBITDAR margin was 28.2%increased to 36.7% in 2019, a 167 basis point decrease2021 compared to 2018.  

10.3% in 2020. The current year benefited from the increase in revenues, as discussed above, as well as realized benefits from our cost savings initiatives.


Regional Operations


Regional Operations Adjusted Property EBITDAR at ourwas $1.2 billion in 2021 compared to $344 million in 2020. Regional Operations increased 24% in 2019 compared to 2018 and benefitted from a full year of operations at MGM Springfield, the acquisition of Empire City, and the acquisition of MGM Northfield Park’s operations from MGP. Adjusted Property EBITDAR margin was 27.3%increased to 35.9% in 2019, a 68 basis point increase2021 compared to 2018, primarily17.5% in 2020 as a result of the inclusion of Empire City and MGM Northfield Park.

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


MGM China

MGM China’s Adjusted Property EBITDAR increased 28%was $25 million in 20192021 compared to 2018a loss of $194 million in 2020. The increase was due primarily to the ramp-up of operations at MGM Cotai, and an increasetemporary property closures in main floor table games win percentage, as discussed above. Excluding intercompany license fees of $51 million and $43 million for the years ended December 31, 2019 and 2018, respectively, Adjusted Property EBITDAR increased 27% compared to 2018. Adjusted Property EBITDAR margin was 25.3% in 2019, a 185 basis point increase compared to 2018.

Corporate and other

Adjusted EBITDAR related to corporate and other in 2019 decreased compared to the prior year due primarily to $14 million of non-recurring charges including certain management termination feesas well as the prior year being more significantly impacted by travel and entry restrictions in Macau and other fees, an increase in corporate expense as described in “Summary Operating Results,” a decrease in income from unconsolidated affiliates, as discussed below, and a decrease in Adjusted EBITDARoperational restrictions related to MGM Northfield Park’s operating results from $45the pandemic than in the current year. License fee expense was $21 million for 2021 and $11 million in 2018 compared to $23 million in 2019.

the prior year.


Operating Results – Details of Certain Charges

Preopening and start-up expenses consisted of the following:

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In thousands)

 

MGM China

 

$

2,619

 

 

$

64,341

 

 

$

86,970

 

MGM Springfield

 

 

—

 

 

 

60,787

 

 

 

22,881

 

Park MGM rebranding

 

 

2,245

 

 

 

22,569

 

 

 

6,498

 

Other

 

 

2,311

 

 

 

3,695

 

 

 

2,126

 

 

 

$

7,175

 

 

$

151,392

 

 

$

118,475

 


Preopening and start-up expenses decreased in 2019 due primarily to the opening of MGM Springfield and the final phase of MGM Cotai, as well as the completion of the Park MGM rebranding project.

Property transactions, net consisted of the following:

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Loss related to sale of Circus Circus Las Vegas and adjacent land

 

$

220,294

 

 

$

—

 

 

$

—

 

Gain on sale of Grand Victoria

 

 

—

 

 

 

(44,703

)

 

 

—

 

Other property transactions, net

 

 

55,508

 

 

 

53,850

 

 

 

50,279

 

 

 

$

275,802

 

 

$

9,147

 

 

$

50,279

 


 Year Ended December 31,
 202120202019
 (In thousands)
Loss related to sale of Circus Circus Las Vegas and adjacent land$— $— $220,294 
Other property transactions, net(67,736)93,567 55,508 
 $(67,736)$93,567 $275,802 

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



46

Operating Results – Income from Unconsolidated Affiliates


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

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In thousands)

 

CityCenter

 

$

128,421

 

 

$

138,383

 

 

$

133,400

 

Other

 

 

(8,900

)

 

 

9,307

 

 

 

12,822

 

 

 

$

119,521

 

 

$

147,690

 

 

$

146,222

 



 Year Ended December 31,
 202120202019
 (In thousands)
CityCenter (through September 26, 2021)$128,127 $(29,753)$128,421 
MGP BREIT Venture155,817 136,755 — 
BetMGM(211,182)(61,663)(15,804)
Other12,061 (2,401)6,904 
 $84,823 $42,938 $119,521 


In 2019,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 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 results,income, including certain basis difference adjustments, was $128 million for the current year period through September 26, 2021 compared to $138our share of CityCenter's operating loss of $30 million in 2018.  The2020, due primarily to the temporary property closures in the prior year period included a $12 millionand removal of mandated operational and capacity restrictions, an increase in travel beginning primarily in the second quarter of the current year, and the gain onrelated to the sale of Mandarin Oriental related toits Harmon land in the reversal of basis differences in excess of our share of the loss recorded by CityCenter. The current year, as discussed above, partially offset by a shorter comparative period included $12 million in charges related to restructuring costs and certain one-time management agreement termination fees. At Aria, casino revenues decreased 5%the current year given that, as of September 2021, we no longer account for our interest in 2019 compared to 2018 primarily due to a decrease in table games win, driven by baccarat. CityCenter’s non-casino revenues increased 4% in 2019 compared to 2018 primarily related to an increase in food and beverage revenue due toCityCenter under the openingequity method of a new outlet, and a 3% increase in rooms revenue due primarily to a 4% increase in REVPAR at Aria.accounting, as discussed above.

Non-operating Results


Interest expense. The following table summarizes information related to interest expense, net:

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In thousands)

 

Total interest incurred

 

$

853,007

 

 

$

821,229

 

 

$

779,855

 

Interest capitalized

 

 

(5,075

)

 

 

(51,716

)

 

 

(111,110

)

 

 

$

847,932

 

 

$

769,513

 

 

$

668,745

 


 Year Ended December 31,
 202120202019
 (In thousands)
Total interest incurred$800,156 $679,251 $853,007 
Interest capitalized(563)(2,871)(5,075)
 $799,593 $676,380 $847,932 

Gross interest expense was $800 million in 2019 increased $32 million2021 compared to 2018$679 million in 2020. The increase in gross interest expense was due primarily to an increase in the average debt outstanding under ourrelated to senior notes due to the issuances by us, the Operating Partnership and an increaseMGM China in the weighted average interest rate related to our senior credit facilities, which was2020 and 2021, partially offset by a decrease in the average debt outstanding under our senior credit facilities and a decrease in the weighted average interest rate of ourthe senior notes. Capitalized interest was $5 million and $52 million during the years ended December 31, 2019 and 2018, respectively. The decrease in capitalized interest was due primarily to the completion of MGM Springfield, which opened in August 2018, and the completion of MGM Cotai, which opened in February 2018. 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, net. Other income, net was $66 million in 2021 compared to other expense, net of $89 million in 2019 increased $1652020. The current year included a $28 million compared 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 2018 due primarily toMGM China’s U.S. dollar-denominated senior notes. The prior year included a $198$109 million loss incurred on the early retirement of debt related to our senior notes and senior creditthe termination of our revolving facility, the Operating Partnership’s prepaymentsas well as an $18 million loss incurred on its senior credit facility, and the early retirement of debt related to MGM China’s senior secured creditthe Operating Partnership’s repayment of its term loan A facility and its term loan B facility, partially offset by a $11$9 million of foreign currency remeasurement gain ongains primarily related to MGM China’s U.S. dollar-denominated senior notes, and a $9$32 million increase in interest income. Refer to Note 9 for further discussion on long-term debt.

47


Income taxes. The following table summarizes information related to our income taxes:

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In thousands)

 

Income before income taxes

 

$

2,846,725

 

 

$

634,006

 

 

$

960,790

 

Benefit (provision) for income taxes

 

 

(632,345

)

 

 

(50,112

)

 

 

1,127,394

 

Effective income tax rate

 

 

22.2

%

 

 

7.9

%

 

 

(117.3

)%

Federal, state and foreign income taxes paid, net of refunds

 

$

28,493

 

 

$

(10,100

)

 

$

181,651

 

 Year Ended December 31,
 202120202019
 (In thousands)
Income (loss) before income taxes$1,461,804 $(1,511,479)$2,846,725 
Benefit (provision) for income taxes(253,416)191,572 (632,345)
Effective income tax rate17.3 %12.7 %22.2 %
Federal, state and foreign income taxes paid, net of refunds$43,018 $8,543 $28,493 

Our effective tax rate for 2019 is driven primarily by the $2.7 billion gain recorded on the Bellagio Sale-Leaseback Transaction. Income tax expense recorded on this gain results in our effective tax rate approximating our federal and state combined statutory rate and minimizes the impact of other items. Our effective tax rate for 20182021 was favorably impacted by the reversalpermanent exclusion of Macau shareholder dividend tax that was accrued in 2017 upon receipta portion of the extensiongain on consolidation of the annual fee arrangement and income tax benefit recorded on our Macau operations,CityCenter partially offset by measurement periodthe 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 expense relatedassets and foreign tax credits, partially offset by tax benefit resulting from carrying back net operating losses to the U.S. Tax Cuts and Jobs Act (the “Tax Act”).  

tax years with a higher tax rate than is currently in effect.


Cash taxes paid increased in 20192021 compared to 20182020 primarily due to federal taxes paid on the liquidation of MGP OH, Inc., a consolidated subsidiary directly owned by MGM Growth Properties Operating Partnership LP, and an increase in statefederal income taxes paid in 2019 compared to 2018. resulting from increased U.S. taxable income following the recovery of the business from the impacts of COVID-19.
In addition,
Reportable Segment GAAP measure

“Adjusted Property EBITDAR” is our reportable segment GAAP measure, which we receivedutilize as the primary profit measure for our reportable segments and underlying operating segments. Adjusted Property EBITDAR is a refund in 2018 of taxes paid with respect to our 2017 federal income tax return.


Non-GAAP Measures

“Adjusted EBITDAR” ismeasure defined as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening and start-up expenses, gain on Bellagio transaction,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), NV Energy exit expense, rent expense associated with triple nettriple-net operating and ground leases, income from unconsolidated affiliates related to investments in REITs, andreal estate ventures, property transactions, net. We utilize “Adjusted Property EBITDAR” as the primary profit measures for our reportable segmentsnet, and underlying operating segments. Adjusted Property EBITDAR is a measure defined as Adjusted EBITDAR beforealso 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 before rent expense related to the master lease with MGP that eliminates 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 these measures arethis 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 Adjusted Property EBITDAR, and Adjusted Property EBITDAR margin 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 compared to other periods because these items can vary significantly depending on specific underlying transactions or events that may not be comparable between the periods being presented.trends. Also, we believe excluded items may not relate specifically to current trends or be indicative of future results. For example, preopening and start-up expenses will be significantly different in periods when we are developing and constructing a major expansion project and will depend on where the current period lies within the development cycle, as well as the size and scope of the project(s). Property transactions, net includes normal recurring disposals, gains and losses on sales of assets related to specific assets within our resorts, but also includes gains or losses on sales of an entire operating resort or a group of resorts and impairment charges on entire asset groups or investments in unconsolidated affiliates, which may not be comparable period over period. In addition, we changed our non-GAAP measures in the fourth quarter of 2019, including recasting prior periods, as a result of the Bellagio real estate transaction, to exclude rent expense associated with triple net operating leases and ground leases. We believe excluding rent expense associated with 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 and Adjusted Property EBITDAR should not be viewed as measuresa measure of overall operating performance, considered in isolation, or as an alternative to net income, because these measures arethis measure is not
48

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


Adjusted EBITDAR Adjusted Property EBITDAR or Adjusted Property EBITDAR margin should not be construed as alternativesan alternative to operating income or net income, as indicatorsan indicator of our performance; or as alternativesan alternative to cash flows from operating activities, as measuresa measure of liquidity; or as any other measure determined in accordance with generally accepted accounting principles.GAAP. We have significant uses of cash flows, including capital expenditures, interest payments, taxes, real estate triple nettriple-net lease and ground lease payments, and debt principal repayments, which are not reflected in Adjusted EBITDAR, Adjusted Property EBITDAR or Adjusted Property EBITDAR margin.EBITDAR. Also, other companies in the gaming and hospitality industries that report Adjusted EBITDAR Adjusted Property EBITDAR or Adjusted Property EBITDAR margin information may calculate Adjusted EBITDAR Adjusted Property EBITDAR or Adjusted Property EBITDAR margin 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:
 Year Ended December 31,
 202120202019
 (In thousands)
Net income (loss) attributable to MGM Resorts International$1,254,370 $(1,032,724)$2,049,146 
Plus: Net income (loss) attributable to noncontrolling interests(45,981)(287,183)165,234 
Net income (loss)1,208,389 (1,319,907)2,214,380 
Provision (benefit) for income taxes253,415 (191,572)632,345 
Income (loss) before income taxes1,461,804 (1,511,479)2,846,725 
Non-operating (income) expense
Interest expense, net of amounts capitalized799,593 676,380 847,932 
Non-operating items from unconsolidated affiliates83,243 103,304 62,296 
Other, net(65,941)89,361 183,262 
 816,895 869,045 1,093,490 
Operating income (loss)2,278,699 (642,434)3,940,215 
Preopening and start-up expenses5,094 84 7,175 
Property transactions, net(67,736)93,567 275,802 
Gain on REIT transactions, net— (1,491,945)(2,677,996)
Gain on consolidation of CityCenter, net(1,562,329)— — 
Depreciation and amortization1,150,610 1,210,556 1,304,649 
CEO transition expense— 44,401 — 
October 1 litigation settlement— 49,000 — 
Restructuring— 26,025 92,139 
Triple-net operating lease and ground lease rent expense833,158 710,683 74,656 
Gain related to sale of Harmon land - unconsolidated affiliate(49,755)— — 
Income from unconsolidated affiliates related to real estate ventures(166,658)(148,434)(544)
Adjusted EBITDAR$2,421,083 

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In thousands)

 

Net income attributable to MGM Resorts International

 

$

2,049,146

 

 

$

466,772

 

 

$

1,952,052

 

Plus: Net income attributable to noncontrolling interests

 

 

165,234

 

 

 

117,122

 

 

 

136,132

 

Net income

 

 

2,214,380

 

 

 

583,894

 

 

 

2,088,184

 

Provision (benefit) for income taxes

 

 

632,345

 

 

 

50,112

 

 

 

(1,127,394

)

Income before income taxes

 

 

2,846,725

 

 

 

634,006

 

 

 

960,790

 

Non-operating expense

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net of amounts capitalized

 

 

847,932

 

 

 

769,513

 

 

 

668,745

 

Non-operating items from unconsolidated affiliates

 

 

62,296

 

 

 

47,827

 

 

 

34,751

 

Other, net

 

 

183,262

 

 

 

18,140

 

 

 

48,241

 

 

 

 

1,093,490

 

 

 

835,480

 

 

 

751,737

 

Operating income

 

 

3,940,215

 

 

 

1,469,486

 

 

 

1,712,527

 

NV Energy exit expense

 

 

—

 

 

 

—

 

 

 

(40,629

)

Preopening and start-up expenses

 

 

7,175

 

 

 

151,392

 

 

 

118,475

 

Property transactions, net

 

 

275,802

 

 

 

9,147

 

 

 

50,279

 

Gain on Bellagio transaction

 

 

(2,677,996

)

 

 

—

 

 

 

—

 

Depreciation and amortization

 

 

1,304,649

 

 

 

1,178,044

 

 

 

993,480

 

Restructuring

 

 

92,139

 

 

 

—

 

 

 

—

 

Triple net operating lease and ground lease rent expense

 

 

74,656

 

 

 

29,633

 

 

 

23,471

 

Income from unconsolidated affiliates related to investments in REITs

 

 

(544

)

 

 

—

 

 

 

—

 

Adjusted EBITDAR

 

$

3,016,096

 

 

$

2,837,702

 

 

$

2,857,603

 



Guarantor Financial Information


As of December 31, 2021, 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. In the event that any subsidiary is no longer a guarantor of our credit facility or any of our future capital markets indebtedness, that subsidiary will be released and relieved of its obligations to guarantee our existing senior notes. The following table presents Adjusted Property EBITDARindentures governing the senior notes further provide that in the event of a sale of all or substantially all of the assets of, or capital stock in a subsidiary guarantor then such subsidiary guarantor will be released and Adjusted EBITDAR:relieved of any obligations under its subsidiary guarantee.

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In thousands)

 

Bellagio

 

$

465,194

 

 

$

490,702

 

 

$

506,526

 

MGM Grand Las Vegas

 

 

282,609

 

 

 

371,566

 

 

 

344,685

 

Mandalay Bay

 

 

237,472

 

 

 

265,741

 

 

 

258,471

 

The Mirage

 

 

153,838

 

 

 

131,864

 

 

 

176,996

 

Luxor

 

 

125,758

 

 

 

120,749

 

 

 

126,650

 

New York-New York

 

 

147,179

 

 

 

137,622

 

 

 

135,036

 

Excalibur

 

 

117,774

 

 

 

111,255

 

 

 

113,561

 

Park MGM

 

 

65,983

 

 

 

14,290

 

 

 

49,191

 

Circus Circus Las Vegas

 

 

47,315

 

 

 

62,526

 

 

 

70,274

 

Las Vegas Strip Resorts

 

 

1,643,122

 

 

 

1,706,315

 

 

 

1,781,390

 

MGM Grand Detroit

 

 

193,971

 

 

 

195,817

 

 

 

176,280

 

Beau Rivage

 

 

111,101

 

 

 

105,493

 

 

 

89,319

 

Gold Strike Tunica

 

 

66,712

 

 

 

52,081

 

 

 

52,882

 

Borgata

 

 

206,812

 

 

 

203,945

 

 

 

286,690

 

MGM National Harbor

 

 

215,962

 

 

 

210,729

 

 

 

149,426

 

MGM Springfield

 

 

34,349

 

 

 

13,789

 

 

 

—

 

Empire City Casino

 

 

71,013

 

 

 

—

 

 

 

—

 

MGM Northfield Park

 

 

69,946

 

 

 

—

 

 

 

—

 

Regional Operations

 

 

969,866

 

 

 

781,854

 

 

 

754,597

 

MGM Macau

 

 

458,099

 

 

 

478,121

 

 

 

535,524

 

MGM Cotai

 

 

276,630

 

 

 

96,212

 

 

 

—

 

MGM China

 

 

734,729

 

 

 

574,333

 

 

 

535,524

 

Unconsolidated resorts

 

 

122,598

 

 

 

147,690

 

 

 

146,222

 

Management and other operations

 

 

24,773

 

 

 

74,790

 

 

 

26,838

 

Stock compensation

 

 

(68,289

)

 

 

(68,211

)

 

 

(60,936

)

Corporate

 

 

(410,703

)

 

 

(379,069

)

 

 

(326,032

)

 

 

$

3,016,096

 

 

$

2,837,702

 

 

$

2,857,603

 

49


The guarantees provided by the subsidiary guarantors rank senior in right of payment to any future subordinated debt of ours or such subsidiary guarantors, junior to any secured indebtedness to the extent of the value of the assets securing such debt and effectively subordinated to any indebtedness and other obligations of our subsidiaries that do not guarantee the senior notes. In addition, the obligations of each subsidiary guarantor under its guarantee is limited so as not to constitute a fraudulent conveyance under applicable law, which may eliminate the subsidiary guarantor’s obligations or reduce such obligations to an amount that effectively makes the subsidiary guarantee lack value.

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.
December 31,
2021
Balance Sheet(In thousands)
Current assets$5,663,171 
Investment in the MGP Operating Partnership2,284,222 
Intercompany accounts due from non-guarantor subsidiaries— 
MGP master lease right-of-use asset, net6,629,140 
Other long-term assets17,025,933 
MGP master lease operating lease liabilities – current154,287 
Other current liabilities2,752,185 
Intercompany accounts due to non-guarantor subsidiaries16,697 
MGP master lease operating lease liabilities – noncurrent7,083,505 
Other long-term liabilities18,472,138 

Year Ended
December 31,
2021
Income Statement(In thousands)
Net revenues$6,841,788 
MGP master lease rent expense(630,364)
Operating income2,025,160 
Income from continuing operations1,963,979 
Net income1,702,096 
Net income attributable to MGM Resorts International1,702,096 

Liquidity and Capital Resources


Cash Flows – Summary


Our cash flows consisted of the following:

 

 

Year Ended December 31,

 

 

2019

 

 

2018

 

 

2017

 

 

 

 

(In thousands)

Net cash provided by operating activities

 

$

1,810,401

 

 

$

1,722,539

 

 

$

2,206,411

 

 

Net cash provided by (used in) investing activities

 

 

3,519,434

 

 

 

(2,083,021

)

 

 

(1,580,592

)

 

Net cash provided by (used in) financing activities

 

 

(4,529,594

)

 

 

389,234

 

 

 

(568,778

)

 

 Year Ended December 31,
 202120202019
 (In thousands)
Net cash provided by (used in) operating activities$1,373,423 $(1,493,043)$1,810,401 
Net cash provided by investing activities1,543,645 2,159,304 3,519,434 
Net cash provided by (used in) financing activities(2,814,095)2,103,427 (4,529,594)



50

Cash Flows


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 increased to $1.8was $1.4 billion in 2019 from $1.72021 compared to cash used in operating activities of $1.5 billion in 2018. Operating cash flows increased2020. The change from the prior year was due primarily to the increase in Adjusted Property EBITDAR discussed within the current year period comparedresults of operations section above, and due to the prior year period duebeing negatively affected by a change in working capital related to increases in our operating income primarily from our Regional Operationsgaming and MGM China,non-gaming deposits, gaming taxes and other gaming liabilities, and payroll related liabilities as discussed above,a result of the COVID-19 pandemic, partially offset by an increase in triple-net lease rent payments and cash paid for interest as discussed in “Non-operating Results” and an increase in cash paid for taxes. In addition, operating cash flows in the current year period were negatively affected by a decrease in working capital primarily related to a decrease in gaming deposits. Operating cash flows in the prior year period were negatively affected by a decrease in working capital primarily related to the timing of significant chip purchases by gaming promoters at MGM China.



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. 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.rooms

.


Cash provided by investing activities was $3.5$1.5 billion in 20192021 compared to cash used in investing activities of $2.1$2.2 billion in 2018. The change was due2020. 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 to $4.2 billion of proceeds received related to the sale of Bellagio, $652art, 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 received related tofrom the sale of Circus CircusMandalay Bay and MGM Grand Las Vegas and adjacent land, the inclusion of the $1.0 billion outflow for MGP’s acquisition of Northfield Park in 2018, and a decrease of $748real estate transaction, which were partially offset by $271 million in capital expenditures partially offset by a $536and $80 million outflow forin contributions to BetMGM. In the acquisition of Empire City and a $222 million decrease inprior year period, distributions from unconsolidated affiliates. Distributions from unconsolidated affiliates in 2019 included $51 million related to our $90 million share of a $180 million dividenddistribution paid by CityCenter in 2019. Distributions from unconsolidated affiliates in 2018 included our $313 million share of a $625 million dividend paid by CityCenter. The decrease in capital expenditures primarily reflects substantial completion of our development projects at MGM Cotai, MGM Springfield, and the rebranding at Park MGM, as discussed in further detail below.


Capital Expenditures


In 2019,2021, we made capital expenditures of $739$491 million, of which $146$68 million related to MGM China. Capital expenditures at MGM China included $118$49 million primarily related to projectsconstruction of the Emerald Tower project at MGM Cotai and $28$19 million related to projects at MGM Macau. Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate entities of $593$423 million included $49 million relatedprimarily relate to the construction of MGM Springfield, $52 million related to the Park MGM rebranding project, as well as expenditures relating toin information technology the expansion of the convention center at MGM Grand Las Vegas and various room restaurant, and entertainment venue remodels.

In 2018,2020, we made capital expenditures of $1.5 billion,$271 million, of which $376$108 million related to MGM China, excluding development fees and capitalized interest on development fees eliminated in consolidation.China. Capital expenditures at MGM China included $340$95 million primarily related to the construction ofclose-out and projects at MGM Cotai and $36$13 million related to projects at MGM Macau. Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate entities of $1.1 billion$162 million included $368 million related to the construction of MGM Springfield, $228 million related to the Park MGM rebranding project, as well as expenditures relating to the expansion of the convention center at MGM Grand Las Vegasinformation technology, health and safety initiatives, and various room, restaurant, and entertainment venue remodels.


Financing activities. Cash used in financing activities was $4.5$2.8 billion in 20192021 compared to cash provided by financing activities of $389 million$2.1 billion in 2018. The change was due primarily to2020. In 2021, we had net debt repayments of $4.1debt 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 2019 compared tothe 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 $2.2$1.1 billion, in 2018, partially offset by proceeds from MGP’s issuancesas further discussed below, repurchased $354 million of Class A shares in 2019 of $1.3 billionour common stock, distributed $286 million to noncontrolling interest owners, and a decrease of $252paid $78 million in share repurchases.dividends to our shareholders

.


Borrowings and Repayments of Long-term Debt


In 2019, 2021, we repaidhad net repayments of debt of $4.1$1.3 billion, which consisted of the repayment of our $850the $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 8.625%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 2019,2027 at an issue price of 99.97% and net draws of $40 million on the repaymentOperating Partnership's revolving credit facility, of an aggregate $2.8 billionwhich $35 million was used in connection with MGP's acquisition of ourMGM Springfield with the remainder used to fund the Operating Partnership's and MGP's distribution and dividend payments. The net proceeds from MGM China’s 4.75% senior notes as described below,due 2027 issuance were used to partially repay amounts outstanding under the MGM China first revolving credit facility and for general corporate purposes.

51

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 net repayments on our4.75% senior credit facility, $1.1 billionnotes and $750 million of net repayments on the Operating Partnership’s senior credit facility, and $1.8 billion of net repayments on the current and previous MGM China senior secured credit facilities, partially offset by our issuance of $1.0 billion of our6.75% 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 $1.5$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.

In April 2019, we issued $1.0 billion in aggregatenotes, 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. We used the net proceeds from the offering to fund the purchase of $639 million in aggregate principal amount of our outstanding 6.75% senior notes due 2020 and $233 million in aggregate principal amount of our outstanding 5.25% senior notes due 2020 through our cash tender offers. In December 2019, we used a portion of the net proceeds from the Bellagio Sale-Leaseback Transaction to redeem for cash the remaining $267 million principal amount of its outstanding 5.25% senior notes due 2020, the remaining $361 million principal amount of its outstanding 6.75% senior notes due 2020, all $1.25 billion principal amount of its outstanding 6.625% senior notes due 2021, permanently repay the $750 million outstanding on our term loan A facility, and fully repay amounts outstanding under our revolving credit facility.


In May 2019, MGM China2020, we issued $750 million in aggregate principal amount of 5.375%6.750% senior notes due 20242025. 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 5.875%4.75% senior notes due 2026 and2028. The proceeds were used the proceeds to permanently repay approximately $1.0 billion on its term loan facility with the remainder used to pay down its revolving credit facility under its prior senior secured credit facility. In August 2019, MGM China entered into a new $1.25 billion senior unsecured revolving credit facility, on which it drew $776 million and used the proceeds to fully repay the borrowings outstanding under its previous senior secured credit facility.for general corporate purposes.



In November 2019,2020, the Operating Partnership used the proceeds from its November 2019 Class A share issuance to prepay $65 million on the term loan A facility and $476 million on the term loan B facility, which reflects all scheduled amortization plus additional principal, and fully repaid the outstanding balance on its revolving credit facility. The proceeds from the Operating Partnership’s issuance ofissued $750 million 5.75%in aggregate principal amount of 3.875% senior notes due 2027 in January 2019 along with2029. The proceeds were used for general corporate purposes, which included the proceeds from MGP’s January 2019 Class A share issuance were primarily used to finance MGP’s acquisitionDecember 2020 redemption of the real property associated with Empire City and finance the Park MGM Lease Transaction.

In 2018, we borrowed net debt of $2.2 billion which primarily consisted of the issuance of $1.0 billion 5.75% senior notes due 2025, $368$700 million of net borrowings on our senior credit facility, $137 million of net borrowings on the MGM China credit facility, and $728 million of net borrowings on the Operating Partnership senior credit facility. Additionally, we paid $77 million of debt issuance costs related to the amendments of the Operating Partnership’s senior credit facility in March and June 2018, the amendment of MGM China’s credit facility in June 2018, the amendment of our senior credit facility in December 2018, and the issuance of the $1.0 billion 5.75% senior notes.units held by us.


Dividends, Distributions to Noncontrolling Interest Owners and Share Repurchases


In May 2018, our Board of Directors authorized a $2.0 billion stock repurchase program and completed the previously announced $1.0 billion stock repurchase program. In 2019, we2021, we repurchased and retired $1.0$1.8 billion of our common stock pursuant to our currentMay 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 plan.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 2018,2020, we repurchased and retired $1.3 billion$354 million of our common stock pursuant to our current and prior stock repurchase plan. The remaining availability under ourMay 2018 $2.0 billion stock repurchase program was approximately $357program.

In March 2021, June 2021, September 2021, and December 2021, we paid dividends of $0.0025 per share, totaling $5 million asfor 2021. In March 2020, we paid a dividend of $0.15 per share, and in June 2020, September 2020 and December 31, 2019.2020, we paid dividends of $0.0025 per share, totaling $78 million for 2020.

In 2019,2020, MGM China paid dividendsthe final dividend for 2019 of $62$41 million, of which we received $35$23 million and noncontrolling interests received $27$18 million. In 2018, MGM China paid dividends of $78 million, of which we received $44 million and noncontrolling interests received $34 million.

During 2019, we paid dividends each quarter of $0.13 per share, totaling $271 million for the year. During 2018, we paid dividends each quarter of $0.12 per share, totaling $261 million for the year.


The Operating Partnership paid the following distributions to its partnership unit holders during 20192021 and 2018:

•

$534 million of distributions paid in 2019, of which we received $372 million and MGP received $162 million, which MGP concurrently paid as a dividend to its Class A shareholders;

2020:


•$545 million of distributions paid in 2021, of which we received $243 million and MGP received $302 million, which MGP concurrently paid as a dividend to its Class A shareholders; and
•$602 million of distributions paid in 2020, of which we received $358 million and MGP received $244 million, which MGP concurrently paid as a dividend to its Class A shareholders.

Other•

$454 million of distributions paid in 2018, of which we received $333 million and MGP received $121 million, which MGP concurrently paid as a dividend to its Class A shareholders.

Other Factors Affecting Liquidity

and Anticipated sourcesUses of Cash


As previously discussed, the spread of COVID-19 and usesdevelopments surrounding the global pandemic have had a significant impact on our business, financial condition, results of cash.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.
52

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. Funds are swept from the accounts at most of our domestic resorts daily into central bank accounts, and excess funds are invested overnight or are used to repay borrowingsamounts drawn under our revolving credit facility. We have significant outstanding debt, rent payments, interest payments, and contractual obligations in addition to planned capital expenditures (and required capital expenditures pursuant to the terms of our long-term leases). In addition, from time to time we planmay 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 heldhave 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 $2.3$4.7 billion, at December 31, 2019, of which MGM China held $420$399 million and the Operating Partnership held $202$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, 2019,2021, we had $11.3$12.9 billion in principal amount of indebtedness, including $1.7 billion outstanding under the $3.1 billion Operating Partnership credit facility, and $667$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 expect to meet ourhave $1.0 billion of debt maturities and planned equity repurchases and capital expenditure requirements with future anticipated operating cash flows, cash and cash equivalents, proceeds frommaturing in the MGP BREIT Venture Transaction, MGP’s cash redemption of our Operating Partnership units, and available borrowings under our credit facilities. We expect to make domestic capital investments at our resorts and corporate entities of $410 million to $420 million. Additionally,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 investmentsexpenditures in 2022 of approximately $775 million to $815 million domestically and approximately $110 million to $130 million at MGM China, of $195 million to $205 million.


As partwhich is inclusive of the MGP BREIT Venture Transaction,capital expenditures required under the considerationtriple-net lease agreements, each of which requires us to us forspend a specified percentage of net revenues, at the real estate assetsrespective properties, on capital expenditures. We additionally have planned contributions to BetMGM in 2022 of MGM Grand Las Vegas included, among other things,approximately $225 million. $2.4 billion of cash. Further, in connection with the waiver agreement signed in February 2019, we have the ability to exercise our right to receive cash for up to $1.4 billion of our Operating Partnership units.


With the proceeds from the MGP BREIT Venture Transaction and the cash we
We also expect to receive for redemption of the Operating Partnership units, we plancontinue to repurchase debt and equity securities, as discussed further below. Additionally, in connection with the MGP BREIT Venture Transaction, we entered into an unsecured credit agreement, comprised of a $1.5shares pursuant to our February 2020 $3.0 billion unsecured revolving facility that matures in February 2025.

share repurchase program. Subsequent to the year ended December 31, 2019,2021, we repurchased 11approximately 15 million shares of our common stock pursuant to our $2.0 billion share repurchase program at an average price of $32.57$43.88 per share for an aggregate amount of $354 million.$670 million. Repurchased shares will bewere retired.

On February 12, 2020, we announced that our Board of Directors adopted a $3.0 billion stock repurchase program

. On February 13, 2020, we announced cash tender offers
to acquire up to $1.25 billion in aggregate purchase price of our issued and outstanding common stock through a modified “Dutch auction” tender offer at a price not greater than $34 nor less than $29 per share, in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions described in the offer to purchase dated February 13, 2020, and in the related letter of transmittal and other related materials. The tender offer is scheduled to expire on March 12, 2020, unless extended or terminated.

On February 18, 2020, we commenced cash tender offers to purchase up to $750 million in aggregate principal amount of our outstanding 5.75% senior notes due 2025, 4.625% senior notes due 2026, and 5.5% senior notes due 2027. Holders of notes that are tendered by March 2, 2020 will receive the tender offer consideration plus an early tender premium. The tender offers will expire on March 16, 2020, unless extended or earlier terminated by us. We intend to fund the tender offers with the net cash proceeds from the MGP BREIT Venture Transaction, and, if necessary, cash on hand or borrowings under our revolving credit facility.

On February 12, 2020, the Board of Directors approved a quarterly dividend to holders of record on March 10, 2020 of $0.15 per share, which will be paid on March 16, 2020.

In January 2020,2022, the Operating Partnership paid $147$141 million of distributions to its partnership unit holders, of which we received $94$59 million and MGP received $53$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, in Executive Overview, duethe COVID-19 pandemic has caused, and is continuing to of the outbreak of a novel coronavirus (Covid-19) primarily concentrated in Chinacause, significant economic disruption both globally and the resulting impacts on visitation to Macau, we expect material declines in MGM China’s operating results during the first quarter of 2020 and potentially thereafter. Additionally, to the extent that the virus impacts the willingness or ability of customers to travel to our properties in the United States, (due to travel restrictions, or otherwise),and impacted our domesticbusiness, financial condition, results of operations could also be negatively impacted. We are continuingand cash flows in 2020 and 2021 and may continue to evaluate the natureimpact our business in 2022 and extentthereafter. 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
53

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.

For additional information related to our business, which could have a material effect on our consolidated operating results forlong-term obligations, refer to the first quartermaturities of 2020long-term debt table in Note 9 and potentially thereafter. Given the uncertain nature of these circumstances, the related impact on our results of operations, cash flows and financial condition cannot be reasonably estimated at this time.lease liability maturity table in Note 11.

Principal Debt Arrangements


See Note 9 to the accompanying consolidated financial statements for information regarding our debt agreements as of December 31, 2019.

Off Balance Sheet Arrangements

As of December 31, 2019, our off-balance sheet arrangements consist primarily of purchase obligations, disclosed below, and our variable interest in unconsolidated affiliates, which is our investment in Bellagio BREIT Venture. See Note 2 to the accompanying consolidated financial statements for additional information relating to our exposure to risks associated with our variable interest. 


Commitments and Contractual Obligations

The following table summarizes our scheduled contractual obligations as of December 31, 2019:

 

 

2020

 

 

2021

 

 

2022

 

 

2023

 

 

2024

 

 

Thereafter

 

 

Total

 

 

 

(In millions)

 

Long-term debt(1)

 

$

—

 

 

$

—

 

 

$

1,000

 

 

$

1,649

 

 

$

2,467

 

 

$

6,155

 

 

$

11,271

 

Estimated interest payments on long-term debt(2)

 

 

638

 

 

 

638

 

 

 

600

 

 

 

511

 

 

 

378

 

 

 

498

 

 

 

3,263

 

Construction commitments

 

 

31

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

31

 

Operating lease liabilities(3)

 

 

346

 

 

 

324

 

 

 

314

 

 

 

316

 

 

 

321

 

 

 

10,067

 

 

 

11,688

 

Finance lease liabilities(3)

 

 

30

 

 

 

27

 

 

 

25

 

 

 

17

 

 

 

—

 

 

 

—

 

 

 

99

 

Other long-term liabilities(4)

 

 

—

 

 

 

43

 

 

 

7

 

 

 

—

 

 

 

—

 

 

 

32

 

 

 

82

 

Other purchase obligations(5)

 

 

109

 

 

 

35

 

 

 

24

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

169

 

 

 

$

1,154

 

 

$

1,067

 

 

$

1,970

 

 

$

2,494

 

 

$

3,166

 

 

$

16,752

 

 

$

26,603

 

(1)

Reflects scheduled amortization payments and debt maturities. Refer to Note 9 for further information on long-term debt.

2021.

(2)

Estimated interest payments, including the impact of interest rate swap agreements, are based on principal amounts and expected maturities of debt outstanding at December 31, 2019.

(3)

Refer to Note 11 for further information on our leases.

(4)

Reflects future expected cash outlays of our other long-term liabilities recorded on our balance sheet as of December 31, 2019, and, accordingly, we have not included such liabilities above that do not have future cash payments, such as deferred rent. We have also excluded contingent consideration related to the Empire City acquisition, general liability and workers compensation insurance claims, deferred income tax liabilities and unrecognized tax benefits from the amounts presented in the table as the amounts that will be settled in cash are not known or contingent upon certain future events occurring, and the timing of any payments is uncertain.

(5)

Our purchase obligations represent minimum obligations we have under agreements with certain of our vendors, primarily advertising and entertainment contracts. Also, although open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to the delivery of goods or performance of services, and hence, have not been included in the table above.

Critical Accounting Policies and Estimates


Management’s discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements. 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 changes in the estimates and assumptions couldinvolve 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, financial position or cash flows.operations. However, by their nature, judgments are subject to an inherent degree of uncertainty and therefore actual results can differ from our estimates.

Allowance


Loss Reserve for Doubtful Casino Accounts Receivable


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. We maintain strict controls over the issuance of markers and aggressively pursue collection from our customers who fail to pay their marker balances timely. These collection efforts are similar to those used by most large corporations when dealing with overdue customer accounts, including the mailing of statements and delinquency notices, personal contacts, the use of outside collection agencies and civil litigation. Markers are generally legally enforceable instruments in the United States and Macau. Markers are not legally enforceable instruments in some foreign countries, but the United States assets of foreign customers may be reached to satisfy judgments entered in the United States. We consider the likelihood and difficulty of enforceability, among other factors, when we issue credit to customers at our domestic resorts who are not residents of the United States. MGM China performs background checks and investigates the credit worthiness of gaming promoters and casino customers prior to issuing credit. Refer to Note 2 for further discussion of the Company’sour casino receivables and those due from customers residing in foreign countries.


We maintain an allowance, ora loss reserve for doubtful casino accounts at all of our operating casino resorts. The provision for doubtful accounts, an operating expense, increases the allowance for doubtful accounts.loss reserve. We regularly evaluate the allowanceloss reserve for doubtful casino accounts. At domestic resorts where marker play is not significant, the allowanceloss reserve is generally established by applying standard reserve percentages to aged account balances.balances, which is supported by 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 any other known information.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 or casino customer.

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 allowanceloss 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.

54


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

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Casino receivables

 

$

394,163

 

 

$

419,127

 

Allowance for doubtful casino accounts receivable

 

 

88,338

 

 

 

85,544

 

Allowance as a percentage of casino accounts receivable

 

 

22

%

 

 

20

%

 December 31,
 20212020
 (In thousands)
Casino receivables$380,907$260,998
Loss reserve for casino accounts receivable117,539107,723
Loss reserve as a percentage of casino accounts receivable31 %41 %


Approximately $77$63 million and $48$54 million of casino receivables and $16$31 million and $12$18 million of the allowanceloss reserve for doubtful casino accounts receivable relate to MGM China at December 31, 20192021 and 2018,2020, respectively. The allowance for doubtful accountsloss reserve as a percentage of casino accounts receivable increaseddecreased in the current year due to a decrease in specific reserves at our domestic resorts, as well as the inclusion 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 age of outstanding account balancesloss reserve at our domestic resorts.MGM China primarily due to an increase in its specific reserves. At December 31, 2019,2021, a 100 basis-point change in the allowance for doubtful accountsloss reserve as a percentage of casino accounts receivable would change income before income taxes by $4 million.


Fixed Asset Capitalization and Depreciation Policies


Property and equipment are stated at cost. A significant amount of our property and equipment was acquired through business combinations and was therefore recognized at fair value at the acquisition date. 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-averageweighted 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. Whether an expenditure is considered a maintenance expense, or a capital asset is a matter of judgment. When constructing or purchasing assets, we must determine whether existing assets are being replaced or otherwise impaired, which also may be a matter of judgment. In addition, our depreciation expense is highly dependent on the assumptions we make about our assets’ estimated useful lives. We determine the estimated useful lives based on our experience with similar assets, engineering studies, and our estimate of the usage of the asset. Whenever events or circumstances occur which change the estimated useful life of an asset, we account for the change prospectively.


Impairment of Long-lived Assets, Goodwill and Indefinite-lived Intangible Assets


We evaluate our property and equipment and other long-lived assets for impairment based on our classification as held for sale or to be held and used. Several criteria must be met before an asset is classified as held for sale, including that management with the appropriate authority commits to a plan to sell the asset at a reasonable price in relation to its fair value and is actively seeking a buyer. For assets classified as held for sale, we recognize the asset at the lower of carrying value or fair market value less costs of disposal, as estimated based on comparable asset sales, offers received, or a discounted cash flow model. For assets to be held and used, we review for impairment whenever indicators of impairment exist. We then compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment is recorded based on the fair value of the asset. For operating assets, fair value is typically measured using a discounted cash flow model whereby future cash flows are discounted using a weighted-averageweighted average cost of capital, developed using a standard capital asset pricing model, based on guideline companies in our industry. If an asset is still under development, future cash flows include remaining construction costs. All recognized impairment losses, whether for assets to be held for sale or assets to be held and used, are recorded as operating expenses.



There are several estimates, assumptions and decisions in measuring impairments of long-lived assets. First, management must determine the usage of the asset. To the extent management decides that an asset will be sold, it is more likely that an impairment may be recognized. Assets must be tested at the lowest level for which identifiable cash flows exist. This means that some assets must be grouped, and management has some discretion in the grouping of assets. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from our estimates.
55


On a quarterly basis, we review our major long-lived assets to determine if events have occurred or circumstances exist that indicate a potential impairment. Potential factors which could trigger an impairment include underperformance compared to historical or projected operating results, negative industry or economic factors, significant changes to our operating environment, or changes in intended use of the asset group. We estimate future cash flows using our internal budgets and probability weight cash flows in certain circumstances to consider alternative outcomes associated with recoverability of the asset group, including potential sale. 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. We perform our annual impairment test for indefinite-lived intangible assets in the fourth quarter of each fiscal year. Indefinite-lived intangible assets consist primarily of license rights and trademarks. For our 20192021 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 Borgata trade name using the relief-from-royalty method, for which the fair value exceeded its carrying value by approximately 11% in 2019. We also elected to perform a quantitative analysis for theMGM Northfield Park gaming license in 20192021 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. If certain future operating results do not meet current expectations it could cause carrying values of the intangibles to exceed their fair values in future periods, potentially resulting in an impairment charge.


We review goodwill at least annually and between annual test dates in certain circumstances. None of our reporting units incurred any goodwill impairment charges in 2019.2021. For our 20192021 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. For reporting units for which we elected to perform a quantitative analysis, the fair value of such reporting units exceeded their carrying value 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.


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.


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


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. Refer to Note 6 for further discussion. Our investments in unconsolidated affiliates had no material impairments in 2019, 2018, or 2017.

2019.


Income Taxes


We recognize deferred tax assets, net of applicable reserves, relatedare subject to net operating loss and tax credit carryforwards and certain temporary differences with a future tax benefit to the extent that realization of such benefit is more likely than not. Otherwise, a valuation allowance is applied.


We file income tax returnstaxes in the U.S. federal jurisdiction, various state and local jurisdictions, and foreign jurisdictions, although the income taxes paid in foreign jurisdictions are not material. Our


We recognize deferred tax assets and liabilities related to net operating losses, tax credit carryforwards and temporary differences with future tax consequences. We reduce the carrying amount of deferred tax assets by a valuation allowance if it is more likely than not such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on such "more-likely-than-not" realization threshold. 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 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
56

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. In order for us to realize our deferred tax assets, we must be able to generate sufficient taxable income in the jurisdictions in which the deferred tax assets are located.

Furthermore, we are subject to routine corporate income tax audits in many of these jurisdictions. We believe that positions taken on our tax returns are subject tofully supported, but tax authorities may challenge these positions, which may not be fully sustained on examination by the Internal Revenue Service (“IRS”) and otherrelevant tax authorities. Positions taken in tax returns are sometimes subject to uncertainty in the tax laws and may not ultimately be accepted by the IRS or other tax authorities. See Note 10 in the accompanying consolidated financial statements for a discussion of the status and impact of examinations by tax authorities.

We assessAccordingly, our tax positions using a two-step process. A tax position is recognized if it meets a “more likely than not” threshold and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized. Uncertain tax positions must be reviewed at each balance sheet date. Liabilities we record as a result of this analysis are recorded separately from any current or deferred income tax accounts and are classified as current in “Other accrued liabilities” or long-term in “Other long-term liabilities” based onprovision includes amounts intended to satisfy assessments that may result from these challenges. Determining the time until expected payment. Additionally, we recognize accrued interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

provision for these potential assessments and recording the related effects requires management judgments and estimates. The amounts ultimately paid on resolution of an audit could be materially different from the amounts previously included in our income tax provision and, therefore, could have a material impact on our income tax provision, net income and cash flows.


Refer to Note 10 in the accompanying consolidated financial statements for further discussion relating to income taxes.



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Market Risk


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. Our primary exposure to market risk is interest rate risk associated with our variable rate long-term debt. We attempt to limit our exposure to interest rate risk by managing the mix of our long-term fixed rate borrowings and short-term borrowings under our bank credit facilities and by utilizing interest rate swap agreements that provide for a fixed interest payment on the Operating Partnership’s credit facility. A change in interest rates generally does not have an impact upon our future earnings and cash flow for fixed-rate debt instruments. As fixed-rate debt matures, however, and if additional debt is acquired to fund the debt repayment, future earnings and cash flow may be affected by changes in interest rates. 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 December 31, 2019,2021, variable rate borrowings represented approximately 10%3% of our total borrowings after giving effect toon the Operating Partnership’s borrowings for the currently effective interest rate swap agreements on which the Operating Partnership pays a weighted average of 1.821%1.783% on a total notional amount of $1.9 billion.$700 million. Additionally, the Operating Partnership has $900 million of notional amount of forward starting swaps that are not currently effective. The following table provides additional information about the maturities of our gross long-term debt subject to changes in interest rates, excluding the effect of the Operating Partnership interest rate swaps discussed aboveabove::

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value

 

 

Debt maturing in,

 

 

December 31,

 

 Debt maturing inFair Value December 31, 2021

 

2020

 

 

2021

 

 

2022

 

 

2023

 

 

2024

 

 

Thereafter

 

 

Total

 

 

2019

 

 20222023202420252026ThereafterTotal

 

(In millions)

 

 (In millions except interest rates)

Fixed-rate

 

$

—

 

 

$

—

 

 

$

1,000

 

 

$

1,250

 

 

$

1,800

 

 

$

4,851

 

 

$

8,901

 

 

$

9,759

 

Fixed-rate$1,000 $1,250 $1,800 $2,725 $1,650 $4,026 $12,451 $12,948 

Average interest rate

 

N/A

 

 

N/A

 

 

 

7.8

%

 

 

6.0

%

 

 

5.5

%

 

 

5.4

%

 

 

5.8

%

 

 

 

 

Average interest rate7.8 %6.0 %5.5 %5.6 %5.2 %4.9 %5.5 % 

Variable rate

 

$

—

 

 

$

—

 

 

$

—

 

 

$

399

 

 

$

667

 

 

$

1,305

 

 

$

2,371

 

 

$

2,377

 

Variable rate$— $50 $360 $— $— $— $410 $410 

Average interest rate

 

N/A

 

 

N/A

 

 

N/A

 

 

 

3.5

%

 

 

4.9

%

 

 

3.8

%

 

 

4.1

%

 

 

 

 

Average interest rateN/A1.9 %3.0 %N/AN/AN/A2.8 % 


In addition to the risk associated with our variable interest rate debt, we are also exposed to risks related to changes in foreign currency exchange rates, mainly related to MGM China and to our operations at MGM Macau and MGM Cotai. While recent fluctuations in exchange rates have not been significant, potential changes in policy by governments or fluctuations in the economies of the United States, China, Macau or Hong Kong could cause variability in these exchange rates. We cannot assure you that the Hong Kong dollar will continue to be pegged to the U.S. dollar or the current peg rate for the Hong Kong dollar will remain at the same level. The possible changes to the peg of the Hong Kong dollar may result in severe fluctuations in the exchange rate thereof. For U.S. dollar denominated debt incurred by MGM China, fluctuations in the exchange rates of the Hong Kong dollar in relation to the U.S. dollar could have adverse effects on our financial position and results of operations. As of December 31, 2019,2021, 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 $15$28 million.

57


ITEM 8.FINANCIAL STATEMENTSSTATEMENTS AND SUPPLEMENTARY DATA


Financial Statements:

Financial Statements:

52

59

53

Consolidated Balance Sheets — December 31, 20192021 and 20182020

55

62

Years Ended December 31, 2019, 20182021, 2020 and 2017

2019

Consolidated Statements of Operations

56

63

Consolidated Statements of Comprehensive Income (Loss)

57

64

Consolidated Statements of Cash Flows

58

65

Consolidated Statements of Stockholders’ Equity

59

66

60

67


Financial Statement Schedule:

Schedule II — Valuation and Qualifying Accounts

104

107

The financial information included in the financial statement schedule should be read in conjunction with the consolidated financial statements. All other financial statement schedules have been omitted because they are not applicable, or the required information is included in the consolidated financial statements or the notes thereto.


58


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Stockholders and the Board of Directors of MGM Resorts International


Opinion on Internal Control over Financial Reporting


We have audited the internal control over financial reporting of MGM Resorts International and subsidiaries (the “Company”) as of December 31, 2019,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.


We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2019,2021, of the Company and our report dated February 27, 2020,25, 2022, expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s change in accounting principle.

statements.


Basis for Opinion


The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.


Definition and Limitations of Internal Control over Financial Reporting


A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ DELOITTEDeloitte & TOUCHETouche LLP


Las Vegas, Nevada

February 27, 2020

25, 2022




59

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of MGM Resorts International


Opinion on the Financial Statements


We have audited the accompanying consolidated balance sheets of MGM Resorts International and subsidiaries (the "Company") as of December 31, 20192021 and 2018,2020, the related consolidated statements of operations, and comprehensive income (loss), cash flows and stockholders’stockholders' equity for each of the three years in the period ended December 31, 2019,2021, and the related notes and the financial statement schedule of Valuation and Qualifying Accounts included in Item 15(a)(2), (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20192021 and 2018,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019,2021, in conformity with accounting principles generally accepted in the United States of America.


We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2020,25, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 2 to the financial statements, effective January 1, 2019, the Company adopted FASB ASC Topic 842, Leases, using the modified retrospective approach.


Basis for Opinion


These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.


Critical Audit Matter


The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.


Acquisition and Goodwill and Other Intangible Assets Valuation of Empire City –CityCenter — Refer to Notes 41 and 74 to the financial statements

Critical Audit Matter Description


On September 27, 2021, the Company completed the acquisition of the 50% ownership interest in CityCenter Holdings, LLC (“CityCenter”) held by Infinity World Development Corp for cash consideration of $2.125 billion. Prior to the acquisition, the Company held a 50% ownership interest, which was accounted for under the equity method. The Company’s evaluationCompany accounted for the acquisition under the acquisition method of goodwillaccounting for impairmentbusiness combinations, and the fair value was allocated to the assets acquired and liabilities assumed at the Empire City reporting unit (“Empire City”) involves the comparisonacquisition date, which included $180.0 million of trademarks and $1.4 billion of goodwill. Management estimated the fair value of the reporting unit to its carrying value. The Company determinestrademarks using the relief from royalty method, which is a specific discounted cash flow method. Goodwill was recognized as the excess of the cash consideration and the acquisition-date fair value of its reporting units usingthe Company’s equity method investment over the identifiable assets acquired and liabilities assumed.

The fair value determination of the trademarks required management to make significant estimates and assumptions around expected cash flows and projected financial results, including forecasted revenues (collectively the “forecast”), as
60

well as the selection of discount rates. Changes to these assumptions and estimates could have a combination of income-based and market-based approaches and incorporates assumptions it believes market participants would utilize. Under the income-based approach, the Company uses a discounted cash flow model to estimatesignificant impact on the fair value of the reporting unit, which requires management to make subjective estimatestrademarks and assumptions, particularly related tothe recognition of goodwill. Therefore, auditing the forecast of future revenues and EBITDA, as well as in the selection of the company specific risk premium utilized in the calculation of the discount rate.  The fair value of Empire City reporting unit exceeded its carrying value as of the measurement date and, therefore, no impairment was recognized.


The Company’s goodwill balance was $2.1 billion as of December 31, 2019, of which $256 million relates to the Empire City acquisition completed in January 2019.  The sensitivity of operating results for Empire City to changes in the regulatory environment and competition required the application ofrates involved a highhigher degree of auditor judgment and subjectivity, as well as an increased extentlevel of audit effort, including the need to involve ourinvolvement of fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the forecast of future revenues and EBITDA, as well as in determining the reasonableness of the selection of the company specific risk premium utilized in the calculation of the discount rate.

specialists.


How the Critical Audit Matter Was Addressed in the Audit


Our audit procedures related to management’s estimatethe forecast and selection of discount rates used by management to determine the fair value of the forecast of future revenuesacquired intangible assets and EBITDA, as well as the company specific risk premium utilized in the discount ratereporting unit assigned goodwill included the following, among others:

•

We tested the operating effectiveness of controls over management’s goodwill impairment evaluation, including the controls related to management’s forecast of future revenues and EBITDA, as well as the controls related to management’s selection of the company specific risk premium utilized in the calculation of the discount rate.

•

We evaluated management’s ability to accurately forecast future revenues and EBITDA and assessed the reasonableness of the forecasted future revenues and EBITDA by comparing the forecast to:

o•We tested the effectiveness of controls over determining the fair value of the tradename, including those over management’s forecast and the selection of discount rates.

Historical revenues and EBITDA

o

Forecast information included in analyst and industry reports

o•We evaluated the assumptions and estimates included in the forecast by:

Internal communications to management and the Board of Directors    

o◦Comparing the forecasts to information included in the Company’s communications to the Board of Directors, earnings and press releases, gaming industry reports, investor presentations, and analyst reports for the Company and certain of its peer companies;

Subsequent forecasts, to evaluate for changes made by management since the annual measurement date through issuance of the financial statements.

•◦Comparing the forecasts to historical financial results;

With the assistance of our fair value specialists, we evaluated the reasonableness of the company specific risk premium utilized in the discount rate by gaining an understanding of the estimated company specific risk premium, gathering and analyzing relevant facts and objective evidence provided by the Company, and gathering and analyzing additional facts and objective evidence obtained through independent research.

◦Conducting inquiries with management; and
◦Evaluating whether the forecast was consistent with evidence obtained in other areas of the audit.

•With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rates by:
◦Testing the market-based source information underlying the determination of the discount rates and the mathematical accuracy of the discount rate calculations.
◦Developing a range of independent estimates and comparing those to the discount rate selected by management.

/s/ DELOITTEDeloitte & TOUCHETouche LLP


Las Vegas, Nevada

February 27, 2020

25, 2022


We have served as the Company's auditor since 2002.


61


MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

 

December 31,

 

 

 

2019

 

 

2018

 

ASSETS

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,329,604

 

 

$

1,526,762

 

Accounts receivable, net

 

 

612,717

 

 

 

657,206

 

Inventories

 

 

102,888

 

 

 

110,831

 

Income tax receivable

 

 

27,167

 

 

 

28,431

 

October 1 litigation insurance receivable

 

 

735,000

 

 

 

—

 

Prepaid expenses and other

 

 

200,317

 

 

 

203,548

 

Total current assets

 

 

4,007,693

 

 

 

2,526,778

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

18,285,955

 

 

 

20,729,888

 

 

 

 

 

 

 

 

 

 

Other assets

 

 

 

 

 

 

 

 

Investments in and advances to unconsolidated affiliates

 

 

822,366

 

 

 

732,867

 

Goodwill

 

 

2,084,564

 

 

 

1,821,392

 

Other intangible assets, net

 

 

3,826,504

 

 

 

3,944,463

 

Operating lease right-of-use assets, net

 

 

4,392,481

 

 

 

—

 

Other long-term assets, net

 

 

456,793

 

 

 

455,318

 

Total other assets

 

 

11,582,708

 

 

 

6,954,040

 

 

 

$

33,876,356

 

 

$

30,210,706

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

235,437

 

 

$

302,578

 

Construction payable

 

 

74,734

 

 

 

311,793

 

Current portion of long-term debt

 

 

—

 

 

 

43,411

 

Accrued interest on long-term debt

 

 

122,250

 

 

 

140,046

 

October 1 litigation liability

 

 

735,000

 

 

 

—

 

Other accrued liabilities

 

 

2,024,002

 

 

 

2,151,054

 

Total current liabilities

 

 

3,191,423

 

 

 

2,948,882

 

 

 

 

 

 

 

 

 

 

Deferred income taxes, net

 

 

2,106,506

 

 

 

1,342,538

 

Long-term debt, net

 

 

11,168,904

 

 

 

15,088,005

 

Operating lease liabilities

 

 

4,277,970

 

 

 

—

 

Other long-term obligations

 

 

363,588

 

 

 

259,240

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

 

 

105,046

 

 

 

102,250

 

Stockholders' equity

 

 

 

 

 

 

 

 

Common stock, $.01 par value: authorized 1,000,000,000 shares, issued and

   outstanding 503,147,632 and 527,479,528 shares

 

 

5,031

 

 

 

5,275

 

Capital in excess of par value

 

 

3,531,099

 

 

 

4,092,085

 

Retained earnings

 

 

4,201,337

 

 

 

2,423,479

 

Accumulated other comprehensive loss

 

 

(10,202

)

 

 

(8,556

)

Total MGM Resorts International stockholders' equity

 

 

7,727,265

 

 

 

6,512,283

 

Noncontrolling interests

 

 

4,935,654

 

 

 

3,957,508

 

Total stockholders' equity

 

 

12,662,919

 

 

 

10,469,791

 

 

 

$

33,876,356

 

 

$

30,210,706

 


 December 31,
 20212020
ASSETS
Current assets  
Cash and cash equivalents$4,703,059 $5,101,637 
Restricted cash500,000 — 
Accounts receivable, net583,915 316,502 
Inventories96,374 88,323 
Income tax receivable273,862 243,415 
Prepaid expenses and other258,972 200,782 
Total current assets6,416,182 5,950,659 
 
Property and equipment, net14,435,493 14,632,091 
 
Other assets
Investments in and advances to unconsolidated affiliates967,044 1,447,043 
Goodwill3,480,997 2,091,278 
Other intangible assets, net3,616,385 3,643,748 
Operating lease right-of-use assets, net11,492,805 8,286,694 
Other long-term assets, net490,210 443,421 
Total other assets20,047,441 15,912,184 
 $40,899,116 $36,494,934 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities  
Accounts payable$263,097 $142,523 
Construction payable23,09930,149
Current portion of long-term debt1,000,000— 
Accrued interest on long-term debt172,624138,832
Other accrued liabilities1,983,4441,545,079
Total current liabilities3,442,2641,856,583
 
Deferred income taxes, net2,439,3642,153,016
Long-term debt, net11,770,79712,376,684
Operating lease liabilities11,802,4648,390,117
Other long-term obligations319,914472,084
Commitments and contingencies (Note 12)00
Redeemable noncontrolling interests147,54766,542
Stockholders' equity
Common stock, $0.01 par value: authorized 1,000,000,000 shares, issued and
 outstanding 453,803,759 and 494,317,865 shares
4,5384,943
Capital in excess of par value1,750,1353,439,453
Retained earnings4,340,5883,091,007
Accumulated other comprehensive loss(24,616)(30,677)
Total MGM Resorts International stockholders' equity6,070,6456,504,726
Noncontrolling interests4,906,1214,675,182
Total stockholders' equity10,976,76611,179,908
 $40,899,116 $36,494,934 

The accompanying notes are an integral part of these consolidated financial statements.



62

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Casino

 

$

6,517,759

 

 

$

5,753,150

 

 

$

5,016,426

 

Rooms

 

 

2,322,579

 

 

 

2,212,573

 

 

 

2,152,741

 

Food and beverage

 

 

2,145,247

 

 

 

1,959,021

 

 

 

1,871,969

 

Entertainment, retail and other

 

 

1,477,200

 

 

 

1,412,860

 

 

 

1,354,301

 

Reimbursed costs

 

 

436,887

 

 

 

425,492

 

 

 

402,042

 

 

 

 

12,899,672

 

 

 

11,763,096

 

 

 

10,797,479

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Casino

 

 

3,623,899

 

 

 

3,199,775

 

 

 

2,673,397

 

Rooms

 

 

829,677

 

 

 

791,761

 

 

 

748,947

 

Food and beverage

 

 

1,661,626

 

 

 

1,501,868

 

 

 

1,414,611

 

Entertainment, retail and other

 

 

1,051,400

 

 

 

999,979

 

 

 

954,125

 

Reimbursed costs

 

 

436,887

 

 

 

425,492

 

 

 

402,042

 

General and administrative

 

 

2,101,217

 

 

 

1,764,638

 

 

 

1,559,575

 

Corporate expense

 

 

464,642

 

 

 

419,204

 

 

 

356,872

 

NV Energy exit expense

 

 

—

 

 

 

—

 

 

 

(40,629

)

Preopening and start-up expenses

 

 

7,175

 

 

 

151,392

 

 

 

118,475

 

Property transactions, net

 

 

275,802

 

 

 

9,147

 

 

 

50,279

 

Gain on Bellagio transaction

 

 

(2,677,996

)

 

 

—

 

 

 

—

 

Depreciation and amortization

 

 

1,304,649

 

 

 

1,178,044

 

 

 

993,480

 

 

 

 

9,078,978

 

 

 

10,441,300

 

 

 

9,231,174

 

Income from unconsolidated affiliates

 

 

119,521

 

 

 

147,690

 

 

 

146,222

 

Operating income

 

 

3,940,215

 

 

 

1,469,486

 

 

 

1,712,527

 

Non-operating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net of amounts capitalized

 

 

(847,932

)

 

 

(769,513

)

 

 

(668,745

)

Non-operating items from unconsolidated affiliates

 

 

(62,296

)

 

 

(47,827

)

 

 

(34,751

)

Other, net

 

 

(183,262

)

 

 

(18,140

)

 

 

(48,241

)

 

 

 

(1,093,490

)

 

 

(835,480

)

 

 

(751,737

)

Income before income taxes

 

 

2,846,725

 

 

 

634,006

 

 

 

960,790

 

Benefit (provision) for income taxes

 

 

(632,345

)

 

 

(50,112

)

 

 

1,127,394

 

Net income

 

 

2,214,380

 

 

 

583,894

 

 

 

2,088,184

 

Less: Net income attributable to noncontrolling interests

 

 

(165,234

)

 

 

(117,122

)

 

 

(136,132

)

Net income attributable to MGM Resorts International

 

$

2,049,146

 

 

$

466,772

 

 

$

1,952,052

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

3.90

 

 

$

0.82

 

 

$

3.38

 

Diluted

 

$

3.88

 

 

$

0.81

 

 

$

3.34

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

524,173

 

 

 

544,253

 

 

 

572,253

 

Diluted

 

 

527,645

 

 

 

549,536

 

 

 

578,795

 


 Year Ended December 31,
 202120202019
Revenues   
Casino$5,362,912 $2,871,720 $6,517,759 
Rooms1,690,037 830,382 2,322,579 
Food and beverage1,391,605 696,040 2,145,247 
Entertainment, retail and other1,009,503 518,991 1,477,200 
Reimbursed costs226,083 244,949 436,887 
 9,680,140 5,162,082 12,899,672 
Expenses
Casino2,551,169 1,701,783 3,623,899 
Rooms600,942 419,156 829,677 
Food and beverage1,034,780 674,118 1,661,626 
Entertainment, retail and other617,635 412,705 1,051,400 
Reimbursed costs226,083 244,949 436,887 
General and administrative2,507,239 2,122,333 2,101,217 
Corporate expense422,777 460,148 464,642 
Preopening and start-up expenses5,094 84 7,175 
Property transactions, net(67,736)93,567 275,802 
Gain on REIT transactions, net— (1,491,945)(2,677,996)
Gain on consolidation of CityCenter, net(1,562,329)— — 
Depreciation and amortization1,150,610 1,210,556 1,304,649 
 7,486,264 5,847,454 9,078,978 
Income from unconsolidated affiliates84,823 42,938 119,521 
Operating income (loss)2,278,699 (642,434)3,940,215 
Non-operating income (expense)
Interest expense, net of amounts capitalized(799,593)(676,380)(847,932)
Non-operating items from unconsolidated affiliates(83,243)(103,304)(62,296)
Other, net65,941 (89,361)(183,262)
 (816,895)(869,045)(1,093,490)
Income (loss) before income taxes1,461,804 (1,511,479)2,846,725 
Benefit (provision) for income taxes(253,415)191,572 (632,345)
Net income (loss)1,208,389 (1,319,907)2,214,380 
Less: Net (income) loss attributable to noncontrolling interests45,981 287,183 (165,234)
Net income (loss) attributable to MGM Resorts International$1,254,370 $(1,032,724)$2,049,146 
 
Earnings (loss) per share
Basic$2.44 $(2.02)$3.90 
Diluted$2.41 $(2.02)$3.88 
Weighted average common shares outstanding
Basic481,930494,152524,173
Diluted487,356494,152527,645

The accompanying notes are an integral part of these consolidated financial statements.




63

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

Net income

 

$

2,214,380

 

 

$

583,894

 

 

$

2,088,184

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

28,870

 

 

 

(13,022

)

 

 

(43,188

)

Other comprehensive income (loss) related to cash flow hedges

 

 

(29,505

)

 

 

3,576

 

 

 

7,995

 

Other comprehensive loss

 

 

(635

)

 

 

(9,446

)

 

 

(35,193

)

Comprehensive income

 

 

2,213,745

 

 

 

574,448

 

 

 

2,052,991

 

Less: Comprehensive income attributable to noncontrolling interests

 

 

(168,447

)

 

 

(112,622

)

 

 

(119,700

)

Comprehensive income attributable to MGM Resorts International

 

$

2,045,298

 

 

$

461,826

 

 

$

1,933,291

 


 Year Ended December 31,
 202120202019
Net income (loss)$1,208,389 $(1,319,907)$2,214,380 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment(24,655)27,762 28,870 
Unrealized gain (loss) on cash flow hedges34,788 (79,365)(29,505)
Other comprehensive income (loss)10,133 (51,603)(635)
Comprehensive income (loss)1,218,522 (1,371,510)2,213,745 
Less: Comprehensive (income) loss attributable to noncontrolling interests35,700 309,969 (168,447)
Comprehensive income (loss) attributable to MGM Resorts International$1,254,222 $(1,061,541)$2,045,298 

The accompanying notes are an integral part of these consolidated financial statements.




64

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,214,380

 

 

$

583,894

 

 

$

2,088,184

 

Adjustments to reconcile net income to net cash provided by

   operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,304,649

 

 

 

1,178,044

 

 

 

993,480

 

Amortization of debt discounts, premiums and issuance costs

 

 

38,972

 

 

 

41,102

 

 

 

32,996

 

Loss on early retirement of debt

 

 

198,151

 

 

 

3,619

 

 

 

45,696

 

Provision for doubtful accounts

 

 

39,270

 

 

 

39,762

 

 

 

20,603

 

Stock-based compensation

 

 

88,838

 

 

 

70,177

 

 

 

62,494

 

Property transactions, net

 

 

275,802

 

 

 

9,147

 

 

 

50,279

 

Gain on Bellagio transaction

 

 

(2,677,996

)

 

 

—

 

 

 

—

 

Noncash lease expense

 

 

71,784

 

 

 

—

 

 

 

—

 

Income from unconsolidated affiliates

 

 

(57,225

)

 

 

(96,542

)

 

 

(111,471

)

Distributions from unconsolidated affiliates

 

 

299

 

 

 

11,563

 

 

 

13,050

 

Deferred income taxes

 

 

595,046

 

 

 

46,720

 

 

 

(1,259,406

)

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(726,610

)

 

 

(149,554

)

 

 

(17,972

)

Inventories

 

 

6,522

 

 

 

(7,860

)

 

 

(4,656

)

Income taxes receivable and payable, net

 

 

1,259

 

 

 

14,120

 

 

 

(53,204

)

Prepaid expenses and other

 

 

7,567

 

 

 

(8,656

)

 

 

(54,739

)

Accounts payable and accrued liabilities

 

 

465,602

 

 

 

21,508

 

 

 

422,258

 

Other

 

 

(35,909

)

 

 

(34,505

)

 

 

(21,181

)

Net cash provided by operating activities

 

 

1,810,401

 

 

 

1,722,539

 

 

 

2,206,411

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures, net of construction payable

 

 

(739,006

)

 

 

(1,486,843

)

 

 

(1,864,082

)

Dispositions of property and equipment

 

 

2,578

 

 

 

25,612

 

 

 

718

 

Proceeds from Bellagio transaction

 

 

4,151,499

 

 

 

—

 

 

 

—

 

Proceeds from sale of Circus Circus Las Vegas and adjacent land

 

 

652,333

 

 

 

—

 

 

 

—

 

Proceeds from sale of business units and investment in unconsolidated affiliate

 

 

—

 

 

 

163,616

 

 

 

—

 

Acquisition of Northfield, net of cash acquired

 

 

—

 

 

 

(1,034,534

)

 

 

—

 

Acquisition of Empire City Casino, net of cash acquired

 

 

(535,681

)

 

 

—

 

 

 

—

 

Investments in and advances to unconsolidated affiliates

 

 

(81,877

)

 

 

(56,295

)

 

 

(16,727

)

Distributions from unconsolidated affiliates

 

 

100,700

 

 

 

322,631

 

 

 

301,211

 

Other

 

 

(31,112

)

 

 

(17,208

)

 

 

(1,712

)

Net cash provided by (used in) investing activities

 

 

3,519,434

 

 

 

(2,083,021

)

 

 

(1,580,592

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

Net borrowings (repayments) under bank credit facilities – maturities of

   90 days or less

 

 

(3,634,049

)

 

 

1,242,259

 

 

 

15,001

 

Issuance of long-term debt

 

 

3,250,000

 

 

 

1,000,000

 

 

 

350,000

 

Retirement of senior notes and senior debentures

 

 

(3,764,167

)

 

 

(2,265

)

 

 

(502,669

)

Debt issuance costs

 

 

(63,391

)

 

 

(76,519

)

 

 

(9,977

)

Issuance of MGM Growth Properties Class A shares, net

 

 

1,250,006

 

 

 

—

 

 

 

387,548

 

Dividends paid to common shareholders

 

 

(271,288

)

 

 

(260,592

)

 

 

(252,014

)

Distributions to noncontrolling interest owners

 

 

(223,303

)

 

 

(184,932

)

 

 

(170,402

)

Purchases of common stock

 

 

(1,031,534

)

 

 

(1,283,333

)

 

 

(327,500

)

Other

 

 

(41,868

)

 

 

(45,384

)

 

 

(58,765

)

Net cash provided by (used in) financing activities

 

 

(4,529,594

)

 

 

389,234

 

 

 

(568,778

)

Effect of exchange rate on cash

 

 

2,601

 

 

 

(1,985

)

 

 

(3,627

)

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Net increase for the period

 

 

802,842

 

 

 

26,767

 

 

 

53,414

 

Balance, beginning of period

 

 

1,526,762

 

 

 

1,499,995

 

 

 

1,446,581

 

Balance, end of period

 

$

2,329,604

 

 

$

1,526,762

 

 

$

1,499,995

 

Supplemental cash flow disclosures

 

 

 

 

 

 

 

 

 

 

 

 

Interest paid, net of amounts capitalized

 

$

826,970

 

 

$

723,609

 

 

$

658,637

 

Federal, state and foreign income taxes paid (refunds received), net

 

 

28,493

 

 

 

(10,100

)

 

 

181,651

 

Non-cash investing and financing activities

 

 

 

 

 

 

 

 

 

 

 

 

Note receivable related to sale of Circus Circus Las Vegas and adjacent land

 

$

133,689

 

 

$

—

 

 

$

—

 

Investment in Bellagio BREIT Venture

 

 

62,133

 

 

 

—

 

 

 

—

 

Increase in construction accounts payable

 

 

—

 

 

 

—

 

 

 

204,466

 


 Year Ended December 31,
 202120202019
Cash flows from operating activities   
Net income (loss)$1,208,389 $(1,319,907)$2,214,380 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization1,150,610 1,210,556 1,304,649 
Amortization of debt discounts, premiums and issuance costs40,328 34,363 38,972 
Loss on early retirement of debt37 126,462 198,151 
Provision for credit losses21,852 71,422 39,270 
Stock-based compensation65,183 106,956 88,838 
Property transactions, net(67,736)93,567 275,802 
Gain on REIT transactions, net— (1,491,945)(2,677,996)
Gain on consolidation of CityCenter, net(1,562,329)— — 
Noncash lease expense188,917 183,399 71,784 
Other investment gains(28,417)— — 
Loss (income) from unconsolidated affiliates(1,580)60,366 (57,225)
Distributions from unconsolidated affiliates99,370 86,584 299 
Deferred income taxes241,947 18,347 595,046 
Change in operating assets and liabilities:
Accounts receivable(236,182)960,099 (726,610)
Inventories3,107 14,705 6,522 
Income taxes receivable and payable, net(30,444)(216,250)1,259 
Prepaid expenses and other(36,608)(37)7,567 
Accounts payable and accrued liabilities442,626 (1,382,980)465,602 
Other(125,647)(48,750)(35,909)
Net cash provided by (used in) operating activities1,373,423 (1,493,043)1,810,401 
Cash flows from investing activities
Capital expenditures(490,697)(270,579)(739,006)
Dispositions of property and equipment106,600 6,136 2,578 
Proceeds from real estate transactions3,888,431 2,455,839 4,151,499 
Proceeds from sale of Circus Circus Las Vegas and adjacent land— — 652,333 
Acquisitions, net of cash acquired(1,789,604)— (535,681)
Investments in unconsolidated affiliates(226,889)(96,925)(81,877)
Distributions from unconsolidated affiliates9,694 63,960 100,700 
Other46,110 873 (31,112)
Net cash provided by investing activities1,543,645 2,159,304 3,519,434 
Cash flows from financing activities
Net repayments under bank credit facilities – maturities of 90 days or less(2,096,217)(1,595,089)(3,634,049)
Issuance of long-term debt749,775 3,550,000 3,250,000 
Retirement of senior notes— (846,815)(3,764,167)
Debt issuance costs(18,726)(62,348)(63,391)
Proceeds from issuance of bridge loan facility— 1,304,625 — 
Issuance of MGM Growth Properties Class A shares, net792,851 524,704 1,250,006 
Dividends paid to common shareholders(4,789)(77,606)(271,288)
Distributions to noncontrolling interest owners(324,190)(286,385)(223,303)
Purchases of common stock(1,753,509)(353,720)(1,031,534)
Other(159,290)(53,939)(41,868)
Net cash provided by (used in) financing activities(2,814,095)2,103,427 (4,529,594)
Effect of exchange rate on cash, cash equivalents, and restricted cash(1,551)2,345 2,601 
Cash, cash equivalents, and restricted cash
Net increase for the period101,422 2,772,033 802,842 
Balance, beginning of period5,101,637 2,329,604 1,526,762 
Balance, end of period$5,203,059 $5,101,637 $2,329,604 
Supplemental cash flow disclosures
Interest paid, net of amounts capitalized$705,680 $639,718 $826,970 
Federal, state and foreign income taxes paid, net43,018 8,543 28,493 
Non-cash investing and financing activities
Note receivable related to sale of Circus Circus Las Vegas and adjacent land$— $— $133,689 
Investments in unconsolidated affiliates— 802,000 62,133
MGP BREIT Venture assumption of bridge loan facility— 1,304,625 — 

The accompanying notes are an integral part of these consolidated financial statements.



65

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Years ended December 31, 2019, 20182021, 2020 and 2017

2019

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained

 

 

Accumulated

 

 

MGM Resorts

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Capital in

 

 

Earnings

 

 

Other

 

 

International

 

 

Non-

 

 

Total

 

 

 

 

 

 

 

Par

 

 

Excess of

 

 

(Accumulated

 

 

Comprehensive

 

 

Stockholders'

 

 

Controlling

 

 

Stockholders'

 

 

 

Shares

 

 

Value

 

 

Par Value

 

 

Deficit)

 

 

Income (Loss)

 

 

Equity

 

 

Interests

 

 

Equity

 

Balances, January 1, 2017

 

 

574,124

 

 

$

5,741

 

 

$

5,653,575

 

 

$

518,456

 

 

$

15,053

 

 

$

6,192,825

 

 

$

3,749,132

 

 

$

9,941,957

 

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,952,052

 

 

 

—

 

 

 

1,952,052

 

 

 

128,320

 

 

 

2,080,372

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(23,995

)

 

 

(23,995

)

 

 

(19,193

)

 

 

(43,188

)

Other comprehensive income - cash

   flow hedges

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,234

 

 

 

5,234

 

 

 

2,761

 

 

 

7,995

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

57,531

 

 

 

—

 

 

 

—

 

 

 

57,531

 

 

 

4,991

 

 

 

62,522

 

Issuance of common stock pursuant to

   stock-based compensation awards

 

 

2,152

 

 

 

22

 

 

 

(33,802

)

 

 

—

 

 

 

—

 

 

 

(33,780

)

 

 

—

 

 

 

(33,780

)

Cash distributions to noncontrolling

   interest owners

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(147,685

)

 

 

(147,685

)

Dividends declared to common shareholders

   ($0.44 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(252,014

)

 

 

—

 

 

 

(252,014

)

 

 

—

 

 

 

(252,014

)

MGP dividend payable to Class A

   shareholders

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(29,777

)

 

 

(29,777

)

Issuance of performance share units

 

 

—

 

 

 

—

 

 

 

9,648

 

 

 

—

 

 

 

—

 

 

 

9,648

 

 

 

95

 

 

 

9,743

 

Repurchase of common stock

 

 

(10,000

)

 

 

(100

)

 

 

(327,400

)

 

 

—

 

 

 

—

 

 

 

(327,500

)

 

 

—

 

 

 

(327,500

)

MGP Class A share issuance

 

 

—

 

 

 

—

 

 

 

35,029

 

 

 

—

 

 

 

109

 

 

 

35,138

 

 

 

326,484

 

 

 

361,622

 

Adjustment of redeemable non-

   controlling interest to redemption value

 

 

—

 

 

 

—

 

 

 

(18,280

)

 

 

—

 

 

 

—

 

 

 

(18,280

)

 

 

—

 

 

 

(18,280

)

MGM National Harbor transaction

 

 

—

 

 

 

—

 

 

 

(12,486

)

 

 

—

 

 

 

(11

)

 

 

(12,497

)

 

 

19,383

 

 

 

6,886

 

Other

 

 

—

 

 

 

—

 

 

 

(6,106

)

 

 

(1,195

)

 

 

—

 

 

 

(7,301

)

 

 

(448

)

 

 

(7,749

)

Balances, December 31, 2017

 

 

566,276

 

 

 

5,663

 

 

 

5,357,709

 

 

 

2,217,299

 

 

 

(3,610

)

 

 

7,577,061

 

 

 

4,034,063

 

 

 

11,611,124

 

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

466,772

 

 

 

—

 

 

 

466,772

 

 

 

108,114

 

 

 

574,886

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(7,422

)

 

 

(7,422

)

 

 

(5,600

)

 

 

(13,022

)

Other comprehensive income - cash

   flow hedges

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,476

 

 

 

2,476

 

 

 

1,100

 

 

 

3,576

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

65,072

 

 

 

—

 

 

 

—

 

 

 

65,072

 

 

 

5,124

 

 

 

70,196

 

Issuance of common stock pursuant to

   stock-based compensation awards

 

 

2,280

 

 

 

23

 

 

 

(32,225

)

 

 

—

 

 

 

—

 

 

 

(32,202

)

 

 

—

 

 

 

(32,202

)

Cash distributions to noncontrolling

   interest owners

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(147,321

)

 

 

(147,321

)

Dividends declared to common shareholders

   ($0.48 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(260,592

)

 

 

—

 

 

 

(260,592

)

 

 

—

 

 

 

(260,592

)

MGP dividend payable to Class A

   shareholders

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(31,732

)

 

 

(31,732

)

Issuance of performance share units

 

 

—

 

 

 

—

 

 

 

3,609

 

 

 

—

 

 

 

—

 

 

 

3,609

 

 

 

107

 

 

 

3,716

 

Repurchase of common stock

 

 

(41,076

)

 

 

(411

)

 

 

(1,282,922

)

 

 

—

 

 

 

—

 

 

 

(1,283,333

)

 

 

—

 

 

 

(1,283,333

)

Adjustment of redeemable non-

   controlling interest to redemption value

 

 

—

 

 

 

—

 

 

 

(21,326

)

 

 

—

 

 

 

—

 

 

 

(21,326

)

 

 

—

 

 

 

(21,326

)

Other

 

 

—

 

 

 

—

 

 

 

2,168

 

 

 

—

 

 

 

—

 

 

 

2,168

 

 

 

(6,347

)

 

 

(4,179

)

Balances, December 31, 2018

 

 

527,480

 

 

 

5,275

 

 

 

4,092,085

 

 

 

2,423,479

 

 

 

(8,556

)

 

 

6,512,283

 

 

 

3,957,508

 

 

 

10,469,791

 

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,049,146

 

 

 

—

 

 

 

2,049,146

 

 

 

156,141

 

 

 

2,205,287

 

Currency translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

16,125

 

 

 

16,125

 

 

 

12,745

 

 

 

28,870

 

Other comprehensive loss - cash

   flow hedges

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(19,973

)

 

 

(19,973

)

 

 

(9,532

)

 

 

(29,505

)

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

83,897

 

 

 

—

 

 

 

—

 

 

 

83,897

 

 

 

4,941

 

 

 

88,838

 

Issuance of common stock pursuant to

   stock-based compensation awards

 

 

2,150

 

 

 

20

 

 

 

(25,985

)

 

 

—

 

 

 

—

 

 

 

(25,965

)

 

 

—

 

 

 

(25,965

)

Cash distributions to noncontrolling

   interest owners

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(181,816

)

 

 

(181,816

)

Dividends declared to common shareholders

   ($0.52 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(271,288

)

 

 

—

 

 

 

(271,288

)

 

 

—

 

 

 

(271,288

)

MGP dividend payable to Class A

   shareholders

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(53,489

)

 

 

(53,489

)

Issuance of performance share units

 

 

—

 

 

 

—

 

 

 

1,546

 

 

 

—

 

 

 

—

 

 

 

1,546

 

 

 

—

 

 

 

1,546

 

Repurchase of common stock

 

 

(35,854

)

 

 

(358

)

 

 

(1,031,176

)

 

 

—

 

 

 

—

 

 

 

(1,031,534

)

 

 

—

 

 

 

(1,031,534

)

Adjustment of redeemable non-

   controlling interest to redemption value

 

 

—

 

 

 

—

 

 

 

(2,714

)

 

 

—

 

 

 

—

 

 

 

(2,714

)

 

 

—

 

 

 

(2,714

)

Empire City acquisition

 

 

9,372

 

 

 

94

 

 

 

265,671

 

 

 

—

 

 

 

—

 

 

 

265,765

 

 

 

—

 

 

 

265,765

 

Empire City MGP transaction

 

 

—

 

 

 

—

 

 

 

(18,913

)

 

 

—

 

 

 

195

 

 

 

(18,718

)

 

 

23,745

 

 

 

5,027

 

MGP Class A share issuance

 

 

—

 

 

 

—

 

 

 

150,464

 

 

 

—

 

 

 

1,512

 

 

 

151,976

 

 

 

1,049,582

 

 

 

1,201,558

 

Park MGM Transaction

 

 

—

 

 

 

—

 

 

 

(1,984

)

 

 

—

 

 

 

16

 

 

 

(1,968

)

 

 

2,496

 

 

 

528

 

Northfield OpCo transaction

 

 

—

 

 

 

—

 

 

 

21,681

 

 

 

—

 

 

 

(2

)

 

 

21,679

 

 

 

(27,439

)

 

 

(5,760

)

Other

 

 

—

 

 

 

—

 

 

 

(3,473

)

 

 

—

 

 

 

481

 

 

 

(2,992

)

 

 

772

 

 

 

(2,220

)

Balances, December 31, 2019

 

 

503,148

 

 

$

5,031

 

 

$

3,531,099

 

 

$

4,201,337

 

 

$

(10,202

)

 

$

7,727,265

 

 

$

4,935,654

 

 

$

12,662,919

 

 Common StockCapital in Excess of Par ValueRetained Earnings (Accumulated Deficit)Accumulated Other Comprehensive Income (Loss)
Total MGM Resorts International Stockholders' Equity
Noncontrolling InterestsTotal Stockholders' Equity
 SharesPar Value
Balances, January 1, 2019527,480 $5,275 $4,092,085 $2,423,479 $(8,556)$6,512,283 $3,957,508 $10,469,791 
Net income— — — 2,049,146 — 2,049,146 156,141 2,205,287 
Currency translation adjustment— — — — 16,125 16,125 12,745 28,870 
Cash flow hedges— — — — (19,973)(19,973)(9,532)(29,505)
Stock-based compensation— — 83,897 — — 83,897 4,941 88,838 
Issuance of common stock pursuant to stock-based compensation awards2,150 20 (25,985)— — (25,965)— (25,965)
Cash distributions to noncontrolling interest owners— — — — — — (181,816)(181,816)
Dividends declared and paid to common shareholders ($0.52 per share)— — — (271,288)— (271,288)— (271,288)
MGP dividend payable to Class A shareholders— — — — — — (53,489)(53,489)
Issuance of restricted stock units— — 1,546 — — 1,546 — 1,546 
Repurchases of common stock(35,854)(358)(1,031,176)— — (1,031,534)— (1,031,534)
Adjustment of redeemable noncontrolling interest to redemption value— — (2,714)— — (2,714)— (2,714)
Empire City acquisition9,372 94 265,671 — — 265,765 — 265,765 
Empire City MGP transaction— — (18,913)— 195 (18,718)23,745 5,027 
MGP Class A share issuance— — 150,464 — 1,512 151,976 1,049,582 1,201,558 
Park MGM Transaction— — (1,984)— 16 (1,968)2,496 528 
Northfield transaction— — 21,681 — (2)21,679 (27,439)(5,760)
Other— — (3,473)— 481 (2,992)772 (2,220)
Balances, December 31, 2019503,148 5,031 3,531,099 4,201,337 (10,202)7,727,265 4,935,654 12,662,919 
Net loss— — — (1,032,724)— (1,032,724)(293,401)(1,326,125)
Currency translation adjustment— — — — 15,711 15,711 12,051 27,762 
Cash flow hedges— — — — (44,528)(44,528)(34,837)(79,365)
Stock-based compensation— — 100,907 — — 100,907 6,049 106,956 
Issuance of common stock pursuant to stock-based compensation awards2,031 21 (16,424)— — (16,403)— (16,403)
Cash distributions to noncontrolling interest owners— — — — — — (221,690)(221,690)
Dividends declared and paid to common shareholders ($0.1575 per share)— — — (77,606)— (77,606)— (77,606)
MGP dividend payable to Class A shareholders— — — — — — (64,086)(64,086)
Issuance of restricted stock units— — 2,142 — — 2,142 — 2,142 
Repurchases of common stock(10,861)(109)(353,611)— — (353,720)— (353,720)
Adjustment of redeemable noncontrolling interest to redemption value— — 35,520 — — 35,520 — 35,520 
MGP Class A share issuances— — 64,188 — 646 64,834 442,717 507,551 
MGP BREIT Venture Transaction— — (6,503)— (59)(6,562)8,287 1,725 
Redemption of Operating Partnership units— — 83,859 — 8,773 92,632 (114,924)(22,292)
Other— — (1,724)— (1,018)(2,742)(638)(3,380)
Balances, December 31, 2020494,318 4,943 3,439,453 3,091,007 (30,677)6,504,726 4,675,182 11,179,908 
Net income (loss)— — — 1,254,370 — 1,254,370 (55,793)1,198,577 
Currency translation adjustment— — — — (13,871)(13,871)(10,784)(24,655)
Cash flow hedges— — — — 13,723 13,723 21,065 34,788 
Stock-based compensation— — 59,492 — — 59,492 5,691 65,183 
Issuance of common stock pursuant to stock-based compensation awards2,574 25 (44,543)— — (44,518)— (44,518)
Cash distributions to noncontrolling interest owners— — — — — — (250,910)(250,910)
Dividends declared and paid to common shareholders ($0.01 per share)— — — (4,789)— (4,789)— (4,789)
MGP dividend payable to Class A shareholders— — — — — — (82,294)(82,294)
Repurchases of common stock(43,088)(430)(1,753,079)— — (1,753,509)— (1,753,509)
Adjustment of redeemable noncontrolling interest to redemption value— — (78,298)— — (78,298)— (78,298)
MGP Class A share issuances— — 99,934 — 3,240 103,174 656,361 759,535 
Redemption of Operating Partnership units— — 171,332 — 5,327 176,659 (227,487)(50,828)
MGM Springfield transaction— — (133,844)— — (133,844)172,749 38,905 
Other— — (10,312)— (2,358)(12,670)2,341 (10,329)
Balances, December 31, 2021453,804 $4,538 $1,750,135 $4,340,588 $(24,616)$6,070,645 $4,906,121 $10,976,766 


The accompanying notes are an integral part of these consolidated financial statements
66
.


MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — ORGANIZATION


Organization. MGM Resorts International (together with its consolidated subsidiaries, unless otherwise indicated or unless the context requires otherwise, the “Company”) is a Delaware corporation that acts largely as a holding company and, through subsidiaries, owns and operates casino resorts.


As of December 31, 2019,2021, the Company owns and operates the following integrated casino, hotel and entertainment resorts in Las Vegas, Nevada: Aria (including Vdara), Bellagio, MGM Grand Las Vegas (including The Signature), The Mirage, Mandalay Bay, Luxor, New York-New York, Park MGM, and Excalibur. Operations at MGM Grand Las Vegas include management of The Signature at MGM Grand Las Vegas. The Company owns andalso operates along with local investors, MGM Grand Detroit in Detroit, Michigan, MGM National Harbor in Prince George’s County, Maryland, and MGM Springfield in Springfield, Massachusetts. The Company also owns and operatesMassachusetts, Borgata located on Renaissance Pointe in the Marina area of Atlantic City, New Jersey, Empire City in Yonkers, New York, MGM Northfield Park in Northfield Park, Ohio, and the following resorts in Mississippi: Beau Rivage in Biloxi and Gold Strike Tunica in Tunica. Additionally, the Company owns and operates theThe Park, a dining and entertainment district located between New York-New York and Park MGM, and the Company owns and operates Shadow Creek, an exclusive world-class golf course located approximately ten miles north of its Las Vegas Strip Resorts Primm Valley Golf Club at the California/Nevada state line and Fallen Oak golf course in Saucier, Mississippi.


MGM Growth Properties LLC (“MGP”), a consolidated subsidiary of the Company, is organized as an umbrella partnership REIT (commonly referred to as an UPREIT) structure in which substantially all of its assets are owned by and substantially all of its businesses arebusiness is conducted through MGM Growth Properties Operating Partnership LP (the “Operating Partnership”). MGP has two classes of authorized and outstanding voting common shares (collectively, the “shares”): Class A shares and a single Class B share.share. The Company owns MGP’s Class B share, which does not provide its holder any rights to profits or losses or any rights to receive distributions from operations of MGP or upon liquidation or winding up of MGP. MGP’s Class A shareholders are entitled to one1 vote per share, while the Company, as the owner of the Class B share, holds a controlling interest in MGP as it is entitled to an amount of votes representing a majority of the total voting power of MGP’s shares so long as the Company and its controlled affiliates’ (excluding MGP) aggregate beneficial ownership of the combined economic interests in MGP and the Operating Partnership does not fall below 30%. The Company and MGP each hold Operating Partnership units representing limited partner interests in the Operating Partnership. The general partner of the Operating Partnership is a wholly-ownedwholly owned subsidiary of MGP. TheMGP. The Operating Partnership units held by the Company are exchangeable into Class A shares of MGP on a one-to-one basis, or cash at the fair valueFair Market Value of a Class A share.share (as defined in the Operating Partnership's partnership agreement). The determination of settlement method is at the option of MGP’s independent conflicts committee; refer to discussion below as to the agreement entered into in February 2020 which allows the Company to receive cash of up to $1.4 billion in exchange for its Operating Partnership units, should the Company elect to have its units redeemed for a 24 month period following the closing of the MGP BREIT Venture Transaction (as defined below). The Company and MGP’s ownership interest percentage in the Operating Partnership have varied based upon the transactions that MGP has completed, as discussed in Note 18.committee. As of December 31, 2019,2021, the Company owned 63.7%41.5% of the Operating Partnership units, and MGP held the remaining 36.3%58.5% ownership interest in the Operating Partnership.

Pursuant to a master lease agreement between a subsidiary of the Company and a subsidiary of the Operating Partnership, the


The Company leases the real estate assets of The Mirage, Mandalay Bay, 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 Northfield Park. As discussed further below,Springfield pursuant to a master lease agreement between a subsidiary of the Company and a subsidiary of the Operating Partnership. The Company leases the real estate assets of Bellagio pursuant to a lease agreement between a subsidiary of the Company and thea venture withthat is 5% owned by such subsidiary and 95% owned by a subsidiary of Blackstone Real Estate Income Trust, Inc. (“BREIT)BREIT”, and such venture, the “Bellagio BREIT Venture”). Additionally, the Company leases the real estate assets of Bellagio fromMandalay Bay and MGM Grand Las Vegas, pursuant to a lease agreement between a subsidiary of the BellagioCompany and a venture that is 50.1% owned by a subsidiary of the Operating Partnership and 49.9% by a subsidiary of BREIT Venture.

In July 2018, MGP acquired(such venture, the membership interests of Northfield Park Associates, LLC (“Northfield”“MGP BREIT Venture”), a company that owned. Further, the Company leases the real estate assets and operations of the Hard Rock Rocksino Northfield Park (“Northfield Acquisition”). In April 2019, the Company acquired the membership interestsAria (including Vdara) pursuant to a lease agreement between a subsidiary of Northfield from MGP and MGP retained the associated real estate assets. The Company then rebranded the property to MGM Northfield Park, which was then added to the existing master lease between the Company and MGP.funds managed by The Blackstone Group ("Blackstone"), as further discussed below. Refer to Note 4 and Note 1811 for additional information.  

further discussion of the leases.


In January 2019, the Company acquired the real property and operations associated with the Empire City Casino's race trackracetrack and casino ("Empire City"). Subsequently, MGP acquired the developed real property associated with Empire City from the Company and Empire City was added to the existing master lease between the Company and MGP. Refer to Note 4 and Note 18 for additional information.


In March 2019, the Company entered into an amendment to the existing master lease with respect to investmentsimprovements made by the Company related to improvements atthe rebranding of the Park MGM and NoMad Las Vegas. Refer to Note 18 for additional information on this transaction.transaction, which eliminates in consolidation.


In April 2019, the Company acquired the membership interests of Northfield Park Associates, LLC ("Northfield") from MGP and MGP retained the associated real estate assets. The Company then rebranded the property to MGM

67

Northfield Park, and added it to the master lease between the Company and MGP. Refer to Note 18 for additional information.

On November 15, 2019, the CompanyBellagio BREIT Venture was formed, a venture (the “Bellagio BREIT Venture”) with a subsidiary of BREIT, which acquired the Bellagio real estate assets from the Company and entered into a lease agreement to lease the real estateleased such assets back to the Company. As considerationCompany pursuant to a lease agreement. In exchange for the contribution of the real estate assets, the Company received total consideration of $4.25 billion, which consisted of a 5% equity interest in the venture and cash of approximately $4.2 billion. The Company recorded a gain of $2.7 billion related to sale of the Bellagio real estate assets, recorded asin “Gain on Bellagio transaction,”REIT transactions, net” in the consolidated statements of operations, which primarily reflects the difference between the carrying value of the real estate assets sold and the consideration received. The Company also provides a shortfall guarantee of the principal amount of indebtedness of the debt of the Bellagio BREIT Venture’s $3.01 billion of debt (and any interest accrued and unpaid thereon). Refer to Note 11 and Note 12 for additional information relating to the lease and guarantee, respectively.


In December 2019, the Company completed the sale of Circus Circus Las Vegas and adjacent land. See Note 16 for additional information related to this transaction.


On February 14, 2020, the Company completed a series of transactions (collectively 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 athe newly formed entity (“MGP BREIT Venture”), owned 50.1% by the Operating Partnership and 49.9% by a subsidiary of BREIT.Venture. In exchange for the contribution of the real estate assets, the Company received total consideration of $4.6$4.6 billion, which was comprised of $2.5$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 the MGP BREIT Venture. In addition, the Operating Partnership issued approximately 3 million Operating Partnership units to the Company representing 5% of the equity value of MGP BREIT Venture. The Company recorded the difference between consideration received of $2.5 billion and the carrying value of the MGM Grand Las Vegas real estate assets of $733 million and selling costs of $27 million as a net gain on sale of assets of $1.7 billion, which is reflected within “Gain on REIT transactions, net” in the consolidated statements of operations. The Company also recorded the difference between consideration received of $2.1 billion and the carrying value of the Mandalay Bay real estate assets of $2.3 billion and selling costs of $10 million as a net loss on sale of assets of $252 million, which is reflected within “Gain on REIT transactions, net” in the consolidated statements of operations. In connection with the transactions, the Company providedprovides a shortfall guarantyguarantee of the principal amount of indebtedness of the MGP BREIT Venture (and any interest accrued and unpaid thereon). as further discussed in Note 12. On the closing date, BREIT also purchased approximately 5 million MGP Class A shares for $150 million.  

million.


In connection with the transactions,MGP BREIT Venture Transaction, MGP BREIT Venture entered into a lease with a subsidiary of the Company for the real estate assets of Mandalay Bay and MGM Grand Las Vegas. The lease provides for a term of thirty years with two ten-year renewal options and has an initial annual base rent of $292 million, escalating annually at a rate of 2% per annum forVegas as further discussed in Note 11. Additionally, the first fifteen years and thereafter equal to the greater of 2% and the CPI increase during the prior year subject to a cap of 3%. In addition, the lease will require the Company to spend 3.5% of net revenues over a rolling five-year period at the properties on capital expenditures and for the Company to comply with certain financial covenants, which, if not met, will require the Company 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 one-year period.

In connection with the MGP BREIT Venture Transaction, the existing 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.

The real estate assets of Mandalay Bay and MGM Grand Las Vegas were classified$133 million, as held and usedfurther discussed in the consolidated balance sheets at December 31, 2019 as the held for sale criteria were not met as of the balance sheet date.

Note 18.


Also, on January 14, 2020, the Company, 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 the Company in connection with the Company exercising its right to require the Operating Partnership to redeem Operating Partnership units that the Company holds, at a price per unit equal to a 3% discount to the applicable cash amount as calculated in accordance withten day average closing price prior to the operating agreement.date of the notice of redemption. The waiver terminateswas effective upon closing of the transaction on February 14, 2020 and was scheduled to terminate on the earlier of 24 months followingFebruary 14, 2022 or upon the closingCompany’s receipt of the MGP BREIT Venture Transaction and the Company receiving cash proceeds of $1.4 billion as consideration for the redemption of the Company’s Operating Partnership units. On May 18, 2020, the Operating Partnership redeemed approximately 30 million Operating Partnership units that the Company held for $700 million, or $23.10 per unit, and on December 2, 2020, the Operating Partnership redeemed approximately 24 million of the Operating Partnership units that the Company held for the remaining $700 million, or $29.78 per unit. As a result, the waiver terminated in accordance with its terms.

On March 4, 2021, certain subsidiaries of the Company delivered a notice of redemption to MGP covering approximately 37 million Operating Partnership units that they held, as further discussed in Note 13.

On August 4, 2021, the Company entered into an agreement with VICI Properties, Inc. (“VICI”) and MGP whereby VICI will acquire MGP in a stock-for-stock transaction (such transaction, the “VICI Transaction”).

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 the Company will receive 1.366 units of the new VICI operating partnership (“VICI OP”) in exchange for each Operating Partnership unit held by the Company. 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 the Company’s VICI OP units for cash consideration of $4.4 billion, with the Company retaining an approximate $370 million ownership

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interest in the VICI OP (based upon the close price of VICI stock as of August 3, 2021). MGP’s Class B share that is held by the Company will be cancelled. As part of the transaction, the Company will enter into an amended and restated master lease with VICI. The new master lease will have an initial term of 25 years, with 3 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).

On September 26, 2021, the Company entered into an agreement to acquire the operations of The Cosmopolitan of Las Vegas ("The Cosmopolitan") for cash consideration of $1.625 billion, subject to customary working capital adjustments. Pursuant to the agreement, the Company 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 transaction has not closed on or before June 26, 2022, which date may be extended by either party to a date on or prior to September 26, 2022 under certain circumstances. The agreement contemplates a reverse termination fee of $500 million that is payable by the Company in the event that the parties are unable to obtain antitrust or gaming regulatory approval. Additionally, the Company 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 3 subsequent 10-year renewal periods, exercisable at the Company’s 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 the Company to spend a specified percentage of net revenues over a rolling 5-year period at the property on capital expenditures and for the Company to comply with certain financial covenants, which, if not met, would require the Company 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.

On September 27, 2021, the Company completed the acquisition of the 50% ownership interest in CityCenter Holdings, LLC ("CityCenter") held by Infinity World Development Corp ("Infinity World"), a wholly owned subsidiary of Dubai World, a Dubai, United Arab Emirates government decree entity. CityCenter is located between Bellagio and Park MGM and consists of Aria, an integrated casino, hotel and entertainment resort; and Vdara, a luxury condominium-hotel. Refer to Note 4 for additional information on this acquisition.

On September 28, 2021, the Company sold the real estate assets of Aria (including Vdara) to funds managed by The Blackstone Group Inc. ("Blackstone") for cash consideration of $3.89 billion and entered into a lease through which the real property is leased back to a subsidiary of the Company, as further discussed in Note 11.

On October 29, 2021, MGP acquired the real estate assets of MGM Springfield from the Company and MGM Springfield was added to the MGP master lease between the Company and MGP through which MGP leases back the real property to a subsidiary of the Company. Transactions with MGP, including transactions under the MGP master lease, have been eliminated in the Company’s consolidation of MGP. Refer to Note 18 for additional information.

On December 13, 2021, the Company entered into an agreement to sell the operations of The Mirage to an affiliate of Seminole Hard Rock Entertainment, Inc. ("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 the Company in the event that the parties are unable to obtain antitrust or gaming regulatory approval. Upon closing, the master lease between the Company 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.

The Company has an approximate 56% controlling interest in MGM China Holdings Limited (together with its subsidiaries, “MGM China”), which owns MGM Grand Paradise, S.A. (“MGM Grand Paradise”). MGM Grand Paradise owns and operates the MGM Macau resort and casino and MGM Cotai, an2 integrated casino, hotel and entertainment resort located on the Cotai Stripresorts in Macau, as well as the related gaming subconcession and land concessions.


Gaming in Macau is currently administered by the Macau Government through concessions awarded to three different concessionaires and three subconcessionaires, of which a subsidiary of MGM China, MGM Grand Paradise, is a subconcessionaire. In early2019, the expiration of MGM Grand Paradise’s subconcession term was extended from March 31, 2020 to June 26, 2022, consistent with the rapid spreadexpiration of the other concessionaires and subconcessionaires. Pursuant to the
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Macau gaming law, upon reaching the maximum duration of 20 years, the term of the concessions may be extended one or more times by order of the Chief Executive, which period may not exceed, in total, 5 years. On January 14, 2022, the Macau Government disclosed the content of a respiratory illness causedbill to amend Macau gaming law, which followed a 45-day public consultation process regarding draft amendment proposals that were issued in September 2021. Under the bill the existing subconcessions will be discontinued and a maximum of six concessions will be awarded for a term to be specified in the concession contract that may not exceed 10 years and which may be extended by a novel coronavirus (Covid-19) identified as originating in Wuhan, Hubei Province, China ledthree years under certain circumstances. The bill is subject to certain actions takendebate and approval by the Chinese government and other countries to attempt to mitigate the spreadMacau Legislative Assembly. The approval of the virus.  Amongnew gaming law bill will precede the actions taken werepublic tender for the implementationawarding of travel restrictions, suchnew gaming concessions and to date the Macau Government has provided no indication as to whether the temporary suspensionpublic tender will take place before expiry of China’s visa schemethe existing gaming concessions and subconcessions but acknowledged that permits mainland Chineseit could consider the extension of the existing concessions and subconcessions beyond their current term if the public tender is held at a later date. Unless MGM Grand Paradise's gaming subconcession is extended or legislation with regard to travel to Macau, the temporary suspension of all ferry service from Hong Kong to Macau, the suspensionreversion of casino operationspremises is amended the casino area premises and gaming-related equipment subject to reversion will automatically be transferred to the Macau Government upon expiration, and MGM China will cease to generate any revenues from such gaming operations. In addition, certain events relating to the loss, termination, rescission, revocation or modification of MGM Grand Paradise’s gaming subconcession in Macau, forwhere such events have a 15-day period that commenced on February 5, 2020, and restrictions placed on inbound travel from mainland China to the U.S. Although operations at MGM Macau and MGM Cotai resumed on February 20, 2020, there are currently limitsmaterial adverse effect on the number of gaming tables allowed to operate and restrictions on the number of seats available at each table, and the temporary suspension of the visa scheme and ferry service to Macau remains in place. Due to the reduced travel to the Company's Macaufinancial condition, business, properties, as a result of these measures, the Company expects a decline in the operating results of its MGM


China operating segments. Additionally, to the extent that the virus impacts the willingness or ability of customers to travel to the Company’s properties in the United States (due to travel restrictions, or otherwise), the Company’s domestic results of operations could alsoof 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. MGM China continues to closely monitor developments regarding the retendering process or concession extensions including the issuance of guidance by the Macau Government. MGM China intends to respond proactively to all relevant Macau Government requirements when known relating to the process. Management cannot provide any assurance that the gaming subconcession will be negatively impacted. The Companyextended beyond the current term or that it will be able to obtain a gaming concession in a public tender; however, management believes that MGM Grand Paradise will be successful in obtaining a gaming concession when a public tender is continuing to evaluate the nature and extent of the impacts to its business, held.


which could have a material effect on its consolidated operating results for the first quarter of 2020 and potentially thereafter. Given the uncertain nature of these circumstances, the related impact on results of operations, cash flows and financial condition cannot be reasonably estimated at this time.

The Company owns 50% of and manages CityCenter Holdings,BetMGM, LLC (“CityCenter”BetMGM”), located between Bellagiowhich provides online sports betting and Park MGM.iGaming in certain jurisdictions in the United States. The other 50% of CityCenterBetMGM is owned by Infinity World Development Corp, a wholly owned subsidiary of Dubai World, a Dubai, United Arab Emirates government decree entity. CityCenter consists of Aria, an integrated casino, hotel and entertainment resort; and Vdara, a luxury condominium-hotel. See Note 6 and Note 18 for additional information related to CityCenter.

Entain plc.


The Company has 3 reportable segments: Las Vegas Strip Resorts, Regional Operations and MGM China. See Note 17 for additional information about the Company’s segments.


Financial Impact of COVID-19. The spread of the novel 2019 coronavirus (“COVID-19”) and developments surrounding the global pandemic have had a significant impact on the Company’s business, financial condition, results of operations and cash flows in 2020 and 2021 and may continue to impact the Company's business in 2022 and thereafter. In March 2020, all of the Company’s domestic properties were temporarily closed pursuant to state and local government restrictions imposed as a result of COVID-19. Throughout the second and third quarters of 2020, all of the Company’s properties that were temporarily closed re-opened to the public, with temporary re-closures and re-openings occurring for certain of the Company’s properties or portions thereof into the first quarter of 2021. Upon re-opening, the properties continued to operate without certain amenities and subject to certain occupancy limitations, with restrictions varying by jurisdiction. Beginning in the latter part of the first quarter of 2021 and continuing into the second quarter of 2021, the Company’s domestic jurisdictions eased and removed prior operating restrictions, including capacity and occupancy limits, as well as social distancing policies.

Although all of the Company’s 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, the Company 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 the Company’s properties as a result of the pandemic.

In Macau, following a temporary closure of the Company’s 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 certain regions in mainland China, and bans on entry on other visitors), which significantly impacted visitation to the Company’s 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,
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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 the Company's operations and it is uncertain whether further closures, including the closure of the Company’s properties, or travel restrictions to Macau will be implemented if additional local COVID-19 cases are identified.

NOTE 2 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation. For entities not determined to be a variable interest entity (“VIE”), the Company consolidates such entities in which the Company owns 100% of the equity. For entities in which the Company owns less than 100% of the equity interest, the Company consolidates the entity if it has the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements, such as MGM China. For these entities, the Company records a noncontrolling interest in the consolidated balance sheets. The Company’s investments in unconsolidated affiliates which are 50% or less owned are accounted for under the equity method when the Company can exercise significant influence over or has joint control of the unconsolidated affiliate, such as CityCenter. All intercompany balances and transactions are eliminated in consolidation.

The Company evaluates entities for which control is achieved through means other than voting rights to determine if it is the primary beneficiary of a VIE.variable interest entity (“VIE”). A VIE is an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. The Company identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the entity. The Company consolidates its investment in a VIE when it determines that it is its primary beneficiary. For these VIEs, the Company records a noncontrolling interest in the consolidated balance sheets. The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary. The Company performs this analysis on an ongoing basis.

basis.

Management has determined that MGP is a VIE because the Class A equity investors as a group lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance. The Company has determined that it is the primary beneficiary of MGP and consolidates MGP because (i) its ownership of MGP’s single Class B share entitles it to a majority of the total voting power of MGP’s shares, and (ii) the exchangeable nature of the Operating Partnership units owned provide the Company the right to receive benefits from MGP that could potentially be significant to MGP. The Company has recorded MGP’s ownership interest in the Operating Partnership as noncontrolling interest in the Company’s consolidated financial statements. As of December 31, 2019,2021, on a consolidated basis MGP had total assets of $11.9$10.4 billion, primarily related to its real estate investments, and total liabilities of $5.0$5.1 billion, primarily related to its indebtedness.

Management has determined that Bellagio BREIT Venture is a VIE because the equity holders as a group lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance. The Company has determined that it is not the primary beneficiary of Bellagio BREIT Venture and, accordingly, does not consolidate Bellagio BREIT Venture,the venture, because the Company does not have power to direct the activities that could potentially be significant to Bellagio BREIT Venture;the venture; BREIT, as the managing member, has such power. The Company has recorded its 5% ownership interest in Bellagio BREIT Venture as an investment in unconsolidated affiliates in the Company’s consolidated financial statements, for which such amount was $61$58 million as of December 31, 2019.2021. The Company’s maximum exposure to loss as a result of its involvement with Bellagio BREIT Venture is equal to the carrying value of its investment, assuming no future capital funding requirements, plus the exposure to loss resulting from the Company’s guarantee of the debt of Bellagio BREIT Venture, which guarantee is immaterial as of December 31, 2021, as further discussed in Note 12.


For entities determined not to be a VIE, the Company consolidates such entities in which the Company owns 100% of the equity. For entities in which the Company owns less than 100% of the equity interest, the Company consolidates the entity under the voting interest model if it has a controlling financial interest based upon the terms of the respective entities’ ownership agreements, such as MGM China. For these entities, the Company records a noncontrolling interest in the consolidated balance sheets and all intercompany balances and transactions are eliminated in consolidation. If the entity does not qualify for consolidation under the voting interest model and the Company has significant influence over the operating and financial decisions of the entity, the Company accounts for the entity under the equity method, such as the Company’s investments in MGP BREIT Venture and BetMGM, which do not qualify for consolidation as the Company has joint control, given the entities are structured with substantive participating rights whereby both owners participate in the decision making process, which prevents the Company from exerting a controlling financial interest in such entities, as defined in ASC 810.

For equity interests in entities in which the Company does not have significant influence, the Company records its equity investment under ASC 321 and reflects such investments within “Other long-term assets, net” on the consolidated balance sheets. The fair value of such equity investments was $66 million as of December 31, 2021.
Reclassifications. Certain reclassifications have been made to conform the prior period presentation.

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Management’s use of estimates. The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. These principles require the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Fair value measurements. Fair value measurements affect the Company’s accounting and impairment assessments of its long-lived assets, investments in unconsolidated affiliates cost method investments,or equity interests, assets acquired, and liabilities assumed in an acquisition, and goodwill and other intangible assets. Fair value measurements also affect the Company’s accounting for certain of its financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured according to a hierarchy that includes: Level 1 inputs, such as quoted prices in an active market; Level 2 inputs, which are observable inputs for similar assets; or Level 3 inputs, which are unobservable inputs.The Company used the following inputs in its fair value measurements:

•

Level 1 and Level 2 inputs for its long-term debt fair value disclosures. See Note 9;

•

Level 2 and Level 3 inputs when assessing the fair value of assets acquired and liabilities assumed during the Northfield and Empire City acquisition. See Note 4;

•Level 1 inputs when measuring its equity investments under ASC 321;

•Level 1 and Level 2 inputs for its long-term debt fair value disclosures. See Note 9;
•Level 2 inputs when measuring the Operating Partnership’s fair value of its interest rate swaps. See Note 9;
•Level 1, Level 2, and Level 3 inputs when assessing the fair value of assets acquired and liabilities assumed in the CityCenter acquisition. See Note 4; and
•Level 2 and Level 3 inputs when assessing the fair value of the note receivable relating to the Circus Circus Las Vegas and adjacent land sale. See Note 16.

•

Level 2 and Level 3 inputs when assessing the fair value of the note receivable relating to the Circus Circus Las Vegas and adjacent land sale. See Note 16.

Cash and cash equivalents. Cash and cash equivalents include cash on hand, investments and interest-bearing instruments with maturities of 90 days or less at the date of acquisition. Such investments are carried at cost, which approximates market value. Book overdraft balances resulting from the Company’s cash management program are recorded as “Accounts payable” or “Construction payable” as applicable.


Restricted cash. Restricted cash reflects cash held in an escrow account related to the reverse termination fee that was contractually required to be prefunded for The Cosmopolitan acquisition and is reflected as "Restricted Cash" on the consolidated balance sheets as of December 31, 2021. "Restricted Cash" and "Cash and cash equivalents" on the consolidated balance sheets as of December 31, 2021 equal "Cash, cash equivalents, and restricted cash" on the consolidated statements of cash flows.

Accounts receivable and credit risk. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of casino accounts receivable. The Company issues credit to approved casino customers and gaming promoters following background checks and investigations of creditworthiness. At December 31, 20192021 and 2018,2020, approximately 57%43% and 62%52%, respectively, of the Company’s gross casino accounts receivable were owed by customers from foreign countries, primarily within Asia. Business or economic conditions or other significant events in these countries could affect the collectability of such receivables.


Accounts receivable are typically non-interest bearing and are initially recorded at cost. Accounts are written off when management deems the account to be uncollectible. Recoveries of accounts previously written off are recorded when received. An estimated allowance for doubtful accountsloss reserve is maintained to reduce the Company’s receivables to their net carrying amount, which approximates fair value. The allowanceloss reserve is estimated based on both a specific review of customer accounts as well as historical collection experience and current and expected future economic and business conditions. Management believes that as of December 31, 2019,2021, no significant concentrations of credit risk existed for which an allowancea loss reserve had not already been recorded.


Inventories. Inventories consist primarily of food and beverage, retail merchandise and operating supplies, and are stated at the lower of cost or net realizable value. Cost is determined primarily using the average cost method for food and beverage and operating supplies. Cost for retail merchandise is determined using the cost method.


Property and equipment. Property and equipment are stated at cost. A significant amount of the Company’s property and equipment was acquired through business combinations and therefore recognized at fair value at the acquisition date. Gains or losses on dispositions of property and equipment are included in the determination of income or loss. Maintenance costs are expensed as incurred. As of December 31, 2019, and 2018, the Company had accrued $14 million and $47 million, respectively for property and equipment within “Accounts payable”.


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Property and equipment are generally depreciated over the following estimated useful lives on a straight-line basis:


Buildings and improvements

15 to 40 years

Land improvements

10 to 20 years

Furniture and fixtures

3 to 20 years

Equipment

3 to 15 years



The Company evaluates its property and equipment and other long-lived assets for impairment based on its classification as held for sale or to be held and used. Several criteria must be met before an asset is classified as held for sale, including that management with the appropriate authority commits to a plan to sell the asset at a reasonable price in relation to its fair value and is actively seeking a buyer. For assets held for sale, the Company recognizes the asset at the lower of carrying value or fair market value less costs to sell, as estimated based on comparable asset sales, offers received, or a discounted cash flow model. For assets to be held and used, the Company reviews for impairment whenever indicators of impairment exist. The Company then compares the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment charge is recorded based on the fair value of the asset, typically measured using a discounted cash flow model. If an asset is still under development, future cash flows include remaining construction costs. All recognized impairment losses, whether for assets held for sale or assets to be held and used, are recorded as operating expenses. Refer to Note 16 for discussion on the impairment loss recorded on Circus Circus Las Vegas and adjacent land in 2019.

Capitalized interest. The interest cost associated with major development and construction projects is capitalized and included in the cost of the project. When no debt is incurred specifically for a project, interest is capitalized on amounts expended on the project using the weighted-averageweighted average cost of the Company’s outstanding borrowings. Capitalization of interest ceases when the project is substantially complete, or development activity is suspended for more than a brief period.


Investments in and advances to unconsolidated affiliates. The Company has investments in unconsolidated affiliates accounted for under the equity method. Under the equity method, carrying value is adjusted for the Company’s share of the investees’ earnings and losses, amortization of certain basis differences, as well as capital contributions to and distributions from these companies. Distributions in excess of equity method earnings are recognized as a return of investment and recorded as investing cash inflows in the accompanying consolidated statements of cash flows. The Company classifies operating income and losses as well as gains and impairments related to its investments in unconsolidated affiliates as a component of operating income or loss and classifies non-operating income or losses related to its investments in unconsolidated affiliates as a component of non-operating income or loss, as the Company’s investments in such unconsolidated affiliates are an extension of the Company’s core business operations.


The Company evaluates its investments in unconsolidated affiliates for impairment whenever events or changes in circumstances indicate that the carrying value of its investment may have experienced an “other-than-temporary”other-than-temporary decline in value. If such conditions exist, the Company compares the estimated fair value of the investment to its carrying value to determine if an impairment is indicated and determines whether the impairment is “other-than-temporary” based on its assessment of all relevant factors, including consideration of the Company’s intent and ability to retain its investment. The Company estimates fair value using a discounted cash flow analysis based on estimated future results of the investee and market indicators of terminal year capitalization rates, and a market approach that utilizes business enterprise value multiples based on a range of multiples from the Company’s peer group.


Goodwill and other intangible assets. Goodwill represents the excess of purchase price over fair market value of net assets acquired in business combinations. Goodwill and indefinite-lived intangible assets must be reviewed for impairment at least annually and between annual test dates in certain circumstances. The Company performs its annual impairment tests in the fourth quarter of each fiscal year. NaNNo material impairments were indicated or recorded as a result of the annual impairment review for goodwill and indefinite-lived intangible assets in 2021, 2020, and 2019.2019, 2018 and 2017.


Accounting guidance provides entities the option to perform a qualitative assessment of goodwill and indefinite-lived intangible assets (commonly referred to as “step zero”) in order to determine whether further impairment testing is necessary. In performing the step zero analysis the Company considers macroeconomic conditions, industry and market considerations, current and forecasted financial performance, entity-specific events, and changes in the composition or carrying amount of net assets of reporting units for goodwill. In addition, the Company takes into consideration the amount of excess of fair value over carrying value determined in the last quantitative analysis that was performed, as well as the
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period of time that has passed since the last quantitative analysis. If the step zero analysis indicates that it is more likely than not that the fair value is less than its carrying amount, the entity would proceed to a quantitative analysis.


Under the quantitative analysis, goodwill for relevant reporting units is tested for impairment using a discounted cash flow analysis based on the estimated future results of the Company’s reporting units discounted using market discount rates and market indicators of terminal year capitalization rates, and a market approach that utilizes business enterprise value multiples based on a range of multiples from the Company’s peer group. If the fair value of the reporting unit is less than its carrying value, an impairment charge is recognized equal to the difference. Under the quantitative analysis, license rights are tested for impairment using a discounted cash flow approach, and trademarks are tested for impairment using the relief-from-royalty method. If the fair value of an indefinite-lived intangible asset is less than its carrying amount, an impairment loss is recognized equal to the difference.



Revenue recognition. The Company’s revenue from contracts with customers consists of casino wagers transactions, hotel room sales, food and beverage transactions, entertainment shows, and retail transactions.


The transaction price for a casino wager is the difference between gaming wins and losses (“net win”). In certain circumstances, the Company offers discounts on markers, which is estimated based upon historical business practice, and recorded as a reduction of casino revenue. Commissions rebated to gaming promoters and VIP players at MGM China are also recorded as a reduction of casino revenue. The Company accounts for casino revenue on a portfolio basis given the similar characteristics of wagers by recognizing net win per gaming day versus on an individual wager basis.


For casino wager transactions that include other goods and services provided by the Company to gaming patrons on a discretionary basis to incentivize gaming, the Company allocates revenue from the casino wager transaction to the good or service delivered based upon stand-alonestandalone selling price (“SSP”). Discretionary goods and services provided by the Company and supplied by third parties are recognized as an operating expense.


For casino wager transactions that include incentives earned by customers under the Company’s loyalty programs, the Company allocates a portion of net win based upon the SSP of such incentive (less estimated breakage). This allocation is deferred and recognized as revenue when the customer redeems the incentive. When redeemed, revenue is recognized in the department that provides the goods or service. Redemption of loyalty incentives at third partythird-party outlets are deducted from the loyalty liability and amounts owed are paid to the third party, with any discount received recorded as other revenue. Commissions and incentives provided to gaming customers were $2.5 billion, $2.3 billion and $2.1 billion for the years ended December 31, 2019, 2018 and 2017, respectively. After allocating revenue to other goods and services provided as part of casino wager transactions, the Company records the residual amount to casino revenue.revenue

.


The transaction price of rooms, food and beverage, and retail contracts is the net amount collected from the customer for such goods and services. The transaction price for such contracts is recorded as revenue when the good or service is transferred to the customer over their stay at the hotel or when the delivery is made for the food & beverage and retail & other contracts. Sales and usage-based taxes are excluded from revenues. For some arrangements, the Company acts as an agent in that it arranges for another party to transfer goods and services and the Company is not the controlling entity, which primarily include certain of the Company’s entertainment shows as well as customer rooms arranged byand, in certain jurisdictions, the Company’s arrangement with BetMGM for online travel agents.

sports betting and iGaming.


The Company also has other contracts that include multiple goods and services, such as packages that bundle food, beverage, or entertainment offerings with hotel stays and convention services. For such arrangements, the Company allocates revenue to each good or service based on its relative SSP. The Company primarily determines the SSP of rooms, food and beverage, entertainment, and retail goods and services based on the amount that the Company charges when sold separately in similar circumstances to similar customers.


Contract and Contract-Related Liabilities.There may be a difference between the timing of cash receipts from the customer and the recognition of revenue, resulting in a contract or contract-related liability. The Company generally has three types of liabilities related to contracts with customers: (1) outstanding chip liability, which represents the amounts owed in exchange for gaming chips held by a customer, (2) loyalty program obligations, which represents the deferred allocation of revenue relating to loyalty program incentives earned, as discussed above, and (3) customer advances and other, which is primarily funds deposited by customers before gaming play occurs (“casino front money”) and advance payments on goods and services yet to be provided such as advance ticket sales and deposits on rooms and convention space or for unpaid wagers. These liabilities are generally expected to be recognized as revenue within one year of being purchased, earned, or deposited and are recorded within “Other accrued liabilities” on the Company’s consolidated balance sheets.


74

The following table summarizes the activity related to contract and contract-related liabilities:

 

Outstanding Chip Liability

 

 

Loyalty Program

 

 

Customer Advances and Other

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

(in thousands)

 

Balance at January 1

$

323,811

 

 

$

597,753

 

 

$

113,293

 

 

$

91,119

 

 

$

667,285

 

 

$

539,626

 

Balance at December 31

 

314,570

 

 

 

323,811

 

 

 

126,966

 

 

 

113,293

 

 

 

481,095

 

 

 

667,285

 

Increase / (decrease)

$

(9,241

)

 

$

(273,942

)

 

$

13,673

 

 

$

22,174

 

 

$

(186,190

)

 

$

127,659

 


 Outstanding Chip LiabilityLoyalty ProgramCustomer Advances and Other
 2021 20202021202020212020
 (in thousands)
Balance at January 1$212,671 $314,570 $139,756 $126,966 $382,287 $481,095 
Balance at December 31176,219 212,671 144,465 139,756 640,001 382,287 
Increase / (decrease)$(36,452)$(101,899)$4,709 $12,790 $257,714 $(98,808)

Reimbursed cost. Costs reimbursed pursuant to management services are recognized as revenue in the period it incurs the costs as this reflects when the Company performs its related performance obligation and is entitled to reimbursement. Reimbursed costs relaterelated primarily to the Company’s management of CityCenter.CityCenter (such management agreement was terminated upon the acquisition of CityCenter in September 2021).



Revenue by source. The Company presents the revenue earned disaggregated by the type or nature of the good or service (casino, room, food and beverage, and entertainment, retail and other) and by relevant geographic region within Note 17.


Leases. The Company determines if an arrangement is or contains a lease at inception or modification of the arrangement. An arrangement is or contains a lease if there are identified assets and the right to control the use of an identified asset is conveyed for a period of time in exchange for consideration. Control over the use of the identified asset means the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset.

For leases


The Company classifies a lease with terms greater than twelve months as either operating or finance. At commencement date, the right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.term. The initial measurement of the operating lease ROU assets also includes any prepaid lease payments and are reduced by any previously accrued deferred rent. When available, such as for the Company’s triple-net operating leases for which the lessor has provided its implicit rate or provided the assumptions required for the Company to readily determine the rate implicit in the lease, the Company uses the rate implicit in the lease to discount lease payments to present value; however,value. However, for most of the Company’s leases, do not provide asuch as its equipment leases, the Company cannot readily determinabledetermine the implicit rate. Therefore,Accordingly, the Company typically uses its incremental borrowing rate to discount the lease payments for such leases based on the information available at the commencement date. Many of the Company’s leases include fixed rental escalation clauses that are factored into the determination of lease payments. Lease terms include options to extend or terminate the lease when it is reasonably certain that such option will be exercised. The Company’s triple-net operating leases each contain renewal periods at the Company’s option, each of which are not considered to be reasonably certain of being exercised. Many of the Company’s leases include fixed rental escalation clauses that are factored into the determination of lease payments. For operating leases, lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term. For finance leases, the ROU asset depreciates on a straight-line basis over the shorter of the lease term or useful life of the ROU asset and the lease liability accretes interest based on the interest method using the discount rate determined at lease commencement.


Refer to Note 11 for discussion of leases under which the Company is a lessee. The master lease agreement with MGP is eliminated in consolidation; refer to Note 18 for further discussion of the master lease with MGP.

The Company is a lessor under certain of itsother lease arrangements. Lease revenues earned by the Company from third parties are classified within the line item corresponding to the type or nature of the tenant’s good or service. Lease revenues from third-party tenants include $53$43 million, $51$24 million and $51$53 million recorded within food and beverage revenue for 2019, 20182021, 2020 and 2017,2019, respectively, and $89$85 million, $87$60 million and $79$89 million recorded within entertainment, retail, and other revenue for the same such periods, respectively. Lease revenues from the rental of hotel rooms are recorded as rooms revenues within the consolidated statements of operations.


Advertising. The Company expenses advertising costs as they are incurred. Advertising expense that primarily relates to media placement costs and which is generally included in general and administrative expenses, was $257$121 million, $305$88 million and $223$195 million for 2021, 2020 and 2019, 2018 and 2017, respectively.


Corporate expense. Corporate expense represents unallocated payroll, aircraft costs, professional fees and various other expenses not directly related to the Company’s casino resort operations. In addition, corporate expense includes the costs associated with the Company’s evaluation and pursuit of new business opportunities, which are expensed as incurred.

75


Preopening and start-up expenses. Preopening and start-up costs, including organizational costs, are expensed as incurred. Costs classified as preopening and start-up expenses include payroll, outside services, advertising, and other expenses related to new or start-up operations.


Property transactions, net. The Company classifies transactions such as write-downs and impairments, demolition costs, and normal gains and losses on the sale of assets as “Property transactions, net.” See Note 16 for a detailed discussion of these amounts.


Redeemable noncontrolling interest. Certain noncontrolling interest parties have non-voting economic interests in MGM National Harbor which provide for annual preferred distributions by MGM National Harbor to the noncontrolling interest parties based on a percentage of its annual net gaming revenue (as defined in the MGM National Harbor operating agreement). Such distributions are accrued each quarter and are paid 90-days90 days after the end of each fiscal year. Beginning on December 31, 2019, theThe noncontrolling interest parties each have the ability to require MGM National Harbor to purchase all or a portion of their interests for a purchase price based on a contractually agreed upon formula.


The Company has recorded the interests as “Redeemable noncontrolling interests” in the mezzanine section of the accompanying consolidated balance sheets and not stockholders’ equity because their redemption is not exclusively in the Company’s control. The interests were initially accounted for at fair value. Subsequently, the Company recognizes changes in the redemption value as they occur and adjusts the carrying amount of the redeemable noncontrolling interests to equal the maximum redemption value, provided such amount does not fall below the initial carrying value, at the end of each reporting period. The Company records any changes caused by such an adjustment in capital in excess of par value. Additionally, the carrying amount of the redeemable noncontrolling interests is adjusted for accrued annual preferred distributions, with changes caused by such adjustments recorded within net income (loss) attributable to noncontrolling interests.



Income per share of common stock. The table below reconciles basic and diluted income per share of common stock. Diluted net income attributable to common stockholders includes adjustments for redeemable noncontrolling interests and the potentially dilutive effect on the Company’s equity interests in MGP and MGM China due to shares outstanding under their respective stock compensation plans.interests. Diluted weighted-averageweighted average common and common equivalent shares include adjustments for potential dilution of share-based awards outstanding under the Company’s stock compensation plan.

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

Numerator:

 

(In thousands)

 

Net income attributable to MGM Resorts International

 

$

2,049,146

 

 

$

466,772

 

 

$

1,952,052

 

Adjustment related to redeemable noncontrolling interests

 

 

(2,713

)

 

 

(21,326

)

 

 

(18,363

)

Net income available to common stockholders - basic

 

 

2,046,433

 

 

 

445,446

 

 

 

1,933,689

 

Potentially dilutive effect due to MGP and MGM China stock compensation plans

 

 

(194

)

 

 

(206

)

 

 

(268

)

Net income attributable to common stockholders - diluted

 

$

2,046,239

 

 

$

445,240

 

 

$

1,933,421

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding basic

 

 

524,173

 

 

 

544,253

 

 

 

572,253

 

Potential dilution from share-based awards

 

 

3,472

 

 

 

5,283

 

 

 

6,542

 

Weighted-average common and common equivalent shares - diluted

 

 

527,645

 

 

 

549,536

 

 

 

578,795

 

Antidilutive share-based awards excluded from the calculation of diluted earnings per share

 

 

1,617

 

 

 

2,668

 

 

 

2,601

 


 Year Ended December 31,
 202120202019
Numerator:(In thousands)
Net income (loss) attributable to MGM Resorts International$1,254,370 $(1,032,724)$2,049,146 
Adjustment related to redeemable noncontrolling interests(78,298)35,520 (2,713)
Net income (loss) available to common stockholders - basic1,176,072 (997,204)2,046,433 
Other— — (194)
Net income (loss) attributable to common stockholders - diluted$1,176,072 $(997,204)$2,046,239 
Denominator:
Weighted average common shares outstanding basic481,930 494,152 524,173 
Potential dilution from share-based awards5,426 — 3,472 
Weighted average common and common equivalent shares - diluted487,356 494,152 527,645 
Antidilutive share-based awards excluded from the calculation of diluted earnings per share198 9,493 1,617 

Currency translation. The Company translates the financial statements of foreign subsidiaries that are not denominated in U.S. dollars. Balance sheet accounts are translated at the exchange rate in effect at each balance sheet date. Income statement accounts are translated at the average rate of exchange prevailing during the period. Translation adjustments resulting from this process are recorded to other comprehensive income (loss). Gains or losses from foreign currency remeasurements are recorded to other non-operating income (expense).


Accumulated other comprehensive income (loss). Comprehensive income (loss) includes net income (loss) and all other non-stockholder changes in equity, or other comprehensive income (loss). Elements of the Company’s accumulated other comprehensive income (loss) are reported in the accompanying consolidated statements of stockholders’ equity. Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedges will be reclassified to interest expense as interest payments are made on the corresponding variable-rate debt.

Recently issued accounting standards.


In February 2016, the FASB issued ASC 842 “Leases (Topic 842)”, which replaces the existing guidance in Topic 840, “Leases”, (“ASC 842”). ASC 842 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. ASC 842 requires a dual approach for lessee accounting under which a lessee would classify and account for its lease agreements as either finance or operating. Both finance and operating leases will result in the lessee recognizing a ROU asset and a corresponding lease liability. For finance leases, the lessee will recognize interest expense associated with the lease liability and depreciation expense associated with the ROU asset; and for operating leases, the lessee will recognize straight-line lease expense. The Company adopted ASC 842 on January 1, 2019 utilizing the simplified transition method and accordingly did not recast comparative period financial information. The Company elected the basket of transition practical expedients which includes not needing to reassess: (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) direct costs for any existing leases. As a result of adoption, the Company recognized $656 million of operating ROU assets and $580 million of operating lease liabilities as of January 1, 2019.

Prior to the adoption of ASC 842 on January 1, 2019, the MGP master lease between subsidiaries of MGM and MGP was accounted for as a failed sale of the real estate assets due to the subsidiaries’ investments in the Operating Partnership, which constituted continuing involvement. As such, the real estate assets were reflected in the balance sheets of the applicable MGM subsidiaries as well as the associated finance lease liability. In connection with the adoption of ASC 842, the sale and leaseback of the real estate assets under the master lease now qualify as a passed sale and are determined to be operating leases. Accordingly, the real estate assets are now only reflected on the balance sheet of MGP and the MGM subsidiaries have recorded operating lease liabilities and operating ROU assets. The MGP master lease and its related accounting eliminates in consolidation

76
.


In June 2016, the FASB issued ASC 326 “Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments” (“ASC 326”), which replaces the existing incurred loss model with a current expected credit loss (CECL) model that requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company would be required to use a forward-looking CECL model for accounts receivables, guarantees, and other financial instruments. The Company will adopt ASC 326 on January 1, 2020 and does not expect ASC 326 to have a material impact on its financial statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” (“ASU 2019-12”), which simplifies the accounting for income taxes and includes removal of certain exceptions to the general principles of ASC 740, Income Taxes, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. ASU 2019-12 is effective for the Company beginning on January 1, 2021. Early adoption is permitted. The Company is currently assessing the impact ASU 2019-12 will have on its consolidated financial statements and footnote disclosures.

NOTE 3 — ACCOUNTS RECEIVABLE, NET


Accounts receivable, net consisted of the following:

 

December 31,

 

 December 31,

 

2019

 

 

2018

 

 20212020

 

(In thousands)

 

 (In thousands)

Casino

 

$

394,163

 

 

$

419,127

 

Casino$380,907 $260,998 

Hotel

 

 

164,079

 

 

 

154,707

 

Hotel180,098 46,288 

Other

 

 

149,036

 

 

 

174,147

 

Other151,258 135,805 

 

 

707,278

 

 

 

747,981

 

 712,263 443,091 

Less: Allowance for doubtful accounts

 

 

(94,561

)

 

 

(90,775

)

Less: Loss reservesLess: Loss reserves(128,348)(126,589)

 

$

612,717

 

 

$

657,206

 

 $583,915 $316,502 


NOTE 4 — ACQUISITION

ACQUISITIONS


CityCenter

On September 27, 2021, the Company completed the acquisition of Infinity World's 50% ownership interest in CityCenter for cash consideration of $2.125 billion.

Through the acquisition, the Company obtained 100% of the equity interests in CityCenter and therefore consolidated CityCenter as of September 27, 2021. Prior to the acquisition, the Company held a 50% ownership interest, which was accounted for under the equity method. The fair value of the equity interests of CityCenter was determined by the transaction price and equaled $4.25 billion. The carrying value of the Company's equity method investment was less than its share of the fair value of CityCenter at the acquisition date, resulting in a net gain of $1.6 billion upon consolidation, which is recognized as "Gain on consolidation of CityCenter, net" on the consolidated statements of operations.

On September 28, 2021, the Company sold the real estate assets of Aria (including Vdara) for cash consideration of $3.89 billion and entered into a lease agreement pursuant to which the Company leases back the real property. The Company classified the real estate assets as held for sale as of the acquisition date and accordingly measured the real estate assets at fair value less costs to sell, as reflected in the table below. See Note 11 for additional information regarding the lease.

The Company recognized 100% of the assets and liabilities of CityCenter at fair value at the date of the acquisition. Under the acquisition method, the fair value was allocated to the assets acquired and liabilities assumed in the transaction. The Company estimated fair value using level 1 inputs, level 2 inputs, and level 3 inputs.

The following table sets forth the purchase price allocation (in thousands):
Fair value of assets acquired and liabilities assumed:
Cash and cash equivalents$335,396 
Receivables and other current assets106,417 
Property and equipment - real estate assets held for sale3,888,431 
Property and equipment323,093 
Trademarks180,000 
Goodwill1,397,338 
Other long-term assets13,923 
Accounts payable, accrued liabilities, and other current liabilities(201,093)
Debt(1,729,451)
Other long-term liabilities(64,054)
$4,250,000 

The Company recognized the identifiable intangible assets of CityCenter at fair value, which consisted of indefinite-lived trade names, which was determined using methodologies under the relief from royalty method based on significant
77

inputs that were not observable. The goodwill is primarily attributable to the profitability of CityCenter in excess of identifiable assets, of which approximately 50% of the goodwill is deductible for income tax purposes. All of the goodwill was assigned to the Company’s Las Vegas Strip Resorts segment.

Results. CityCenter’s net revenue for the period from September 27, 2021 through December 31, 2021 was $367 million and operating income and net income were $69 million and $68 million, respectively.

Unaudited pro forma information. The operating results for CityCenter are included in the accompanying consolidated statements of operations from the date of acquisition. The following unaudited pro forma consolidated financial information for the Company has been prepared assuming the Company’s acquisition of its controlling interest had occurred as of January 1, 2020 and excludes the gain on consolidation discussed above. The pro forma information does not reflect transactions that occurred subsequent to acquisition, such as the subsequent sale-leaseback transaction or the repayment of CityCenter's assumed debt. The unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of January 1, 2020.
Year Ended December 31,
20212020
(In thousands)
Net Revenues$10,153,603 $5,456,763 
Net income attributable to MGM Resorts International137,773 (1,041,271)

Empire City


On January 29, 2019, the Company acquired the real property and operations associated with Empire City for total consideration of approximately $865 million, plus customary working capital and other adjustments. The fair value of consideration paid included the issuance of approximately $266 million of the Company’s common stock, the incurrence of a new bridge facility, and the remaining balance in cash. If Empire City is awarded a license for live table games on or prior to December 31, 2022 and the Company accepts such license by December 31, 2024, the Company will pay additional consideration of $50 million. The acquisition expands the Company’s presence in the northeast region and greater New York City market. Subsequent to the Company’s acquisition, MGP acquired the developed real property associated with Empire City from the Company and Empire City was added to the existing master lease between the Company and MGP. See Note 18 for additional information.

The Company recognized 100% of the assets and liabilities of Empire City at fair value on the date of acquisition. Under the acquisition method, the fair value was allocated to the assets acquired and liabilities assumed in the transaction. The Company estimated fair value using both level 2 inputs, which are observable inputs for similar assets, and level 3 inputs, which are unobservable inputs. During the second quarter of 2019, the Company received updated information regarding facts and circumstances in existence as of the acquisition date that impacted the forecasted revenues and expenses utilized in the preliminary purchase price valuation. As a result, the Company recorded a measurement period adjustment that included a $76 million decrease to the racing and


gaming license, a $17 million decrease to other intangible assets and a $20 million decrease to deferred income taxes, with the offset to goodwill.


The following table sets forth the purchase price allocation (in thousands):

 

 

 

 

Fair value of assets acquired and liabilities assumed:

 

 

 

Property and equipment

$

645,733

 

Cash and cash equivalents

 

63,197

 

Racing and gaming license

 

52,000

 

Other intangible assets

 

34,000

 

Goodwill

 

256,133

 

Other assets

 

24,420

 

Deferred income taxes

 

(125,149

)

Other liabilities

 

(85,690

)

 

$

864,644

 

The Company recognized the identifiable intangible assets at fair value. The estimated fair values of the intangible assets were determined using methodologies under the income approach based on significant inputs that were not observable. The gaming license is an indefinite-lived intangible asset and the customer lists and trade name acquired, both of which comprise other intangible assets above, are amortized over their estimated useful lives of approximately four and five years, respectively. The goodwill is primarily attributable to the potential for a conversion to a full-scale gaming facility.

For the period from January 29, 2019 through December 31, 2019, Empire City’s net revenue was $193$193 million, operating income was $12$12 million and net income was $36 million.$36 million. Pro forma results of operations for the acquisition have not been presented because it is not material to the consolidated results of operations.


Northfield

On July 6, 2018, MGP completed its acquisition of 100% of the membership interests of Northfield for a purchase price of approximately $1.1 billion (“Northfield Acquisition”). MGP funded the acquisition through a $200 million draw on the Operating Partnership’s term loan A and a $655 million draw under the Operating Partnership’s revolving credit facility, with the remainder of the purchase price paid with cash on hand. The acquisition expanded MGP’s real estate assets and diversified MGP’s geographic reach.

MGP recognized 100% of the assets and liabilities of Northfield at fair value at the date of the acquisition. Under the acquisition method, the fair value was allocated to the assets acquired and liabilities assumed in the transaction. The Company estimated fair value using both level 2 inputs, which are observable inputs for similar assets, and level 3 inputs, which are unobservable inputs.

The following table sets forth the purchase price allocation (in thousands):

Fair value of assets acquired and liabilities assumed:

 

 

 

Property and equipment

$

792,807

 

Cash and cash equivalents

 

35,831

 

Racing and gaming license

 

228,000

 

Customer list

 

25,000

 

Goodwill

 

17,915

 

Other assets

 

9,598

 

Other liabilities

 

(38,786

)

 

$

1,070,365

 


MGP recognized the identifiable intangible assets at fair value. The estimated fair values of the intangible assets were determined using methodologies under the income approach based on significant inputs that were not observable. The goodwill was primarily attributed to the synergies expected to arise after the acquisition.

In April 2019, the Company subsequently acquired the membership interests of Northfield from MGP, and MGP retained the associated real estate assets. MGM Northfield Park was then added to the existing master lease between the Company and MGP. Refer to Note 18 for additional information.

For the period from July 6, 2018 through December 31, 2018, Northfield’s net revenue was $133 million, operating income and net income were both $33 million. Pro forma results of operations for the acquisition have not been presented because it is not material to the consolidated results of operations.



78

NOTE 5 — PROPERTY AND EQUIPMENT, NET


Property and equipment, net consisted of the following:

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Land

 

$

5,348,223

 

 

$

6,923,769

 

Buildings, building improvements and land improvements

 

 

15,291,801

 

 

 

16,437,695

 

Furniture, fixtures and equipment

 

 

5,924,439

 

 

 

6,064,330

 

Construction in progress

 

 

209,890

 

 

 

321,944

 

 

 

 

26,774,353

 

 

 

29,747,738

 

Less: Accumulated depreciation

 

 

(8,581,835

)

 

 

(9,017,850

)

Finance lease ROU assets, net

 

 

93,437

 

 

 

—

 

 

 

$

18,285,955

 

 

$

20,729,888

 


 December 31,
 20212020
 (In thousands)
Land$4,082,842 $4,081,029 
Buildings, building improvements and land improvements12,236,042 12,053,422 
Furniture, fixtures and equipment5,722,565 5,600,579 
Construction in progress421,445 170,957 
 22,462,894 21,905,987 
Less: Accumulated depreciation(8,179,310)(7,474,876)
Finance lease ROU assets, net151,909 200,980 
 $14,435,493 $14,632,091 

NOTE 6 — INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES


Investments in and advances to unconsolidated affiliates consisted of the following:

 

December 31,

 

 

2019

 

 

2018

 

 December 31,

 

 

 

 

 

 

 

 

 20212020

 

(In thousands)

 

 (In thousands)

CityCenter Holdings, LLC – CityCenter (50%)

 

$

568,879

 

 

$

589,965

 

CityCenter (50% as of December 31, 2020)CityCenter (50% as of December 31, 2020)$— $441,893 
MGP BREIT Venture (50.1% owned by the Operating Partnership)MGP BREIT Venture (50.1% owned by the Operating Partnership)816,756 810,066 
BetMGM (50%)BetMGM (50%)41,060 27,310 

Other

 

 

253,487

 

 

 

142,902

 

Other109,228 167,774 

 

$

822,366

 

 

$

732,867

 

 $967,044 $1,447,043 


The Company recorded its share of income (loss) from unconsolidated affiliates, including adjustments for basis differences, as follows:

 

Year Ended December 31,

 

 

2019

 

 

2018

 

 

2017

 

 Year Ended December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 202120202019

 

(In thousands)

 

 (In thousands)

Income from unconsolidated affiliates

 

$

119,521

 

 

$

147,690

 

 

$

146,222

 

Income from unconsolidated affiliates$84,823 $42,938 $119,521 

Preopening and start-up expenses

 

 

—

 

 

 

(3,321

)

 

 

—

 

Non-operating items from unconsolidated affiliates

 

 

(62,296

)

 

 

(47,827

)

 

 

(34,751

)

Non-operating items from unconsolidated affiliates(83,243)(103,304)(62,296)

 

$

57,225

 

 

$

96,542

 

 

$

111,471

 

 $1,580 $(60,366)$57,225 


The following table summarizes further information related to the Company’s share of operating income (loss) from unconsolidated affiliates:

 

Year Ended December 31,

 

 

2019

 

 

2018

 

 

2017

 

 Year Ended December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 202120202019

 

(In thousands)

 

 (In thousands)

CityCenter

 

$

128,421

 

 

$

138,383

 

 

$

133,401

 

CityCenter (through September 26, 2021)CityCenter (through September 26, 2021)$128,127 $(29,753)$128,421 
MGP BREIT VentureMGP BREIT Venture155,817 136,755 — 
BetMGMBetMGM(211,182)(61,663)(15,804)

Other

 

 

(8,900

)

 

 

9,307

 

 

 

12,821

 

Other12,061 (2,401)6,904 

 

$

119,521

 

 

$

147,690

 

 

$

146,222

 

 $84,823 $42,938 $119,521 

CityCenter

Mandarin Oriental sale.


MGP BREIT Venture distributions. On August 30, 2018, During the years ended December 31, 2021 and 2020, the Operating Partnership received $94 million and $81 million, respectively, in distributions from MGP BREIT Venture.
79


BetMGM contributions. During the years ended December 31, 2021 and 2020, the Company contributed $225 million and $80 million to BetMGM, respectively.

CityCenter closed the saleacquisition. The Company obtained 100% of the Mandarin Orientalequity interests in CityCenter and adjacent retail parcelstherefore consolidated CityCenter as of September 27, 2021. Prior to the acquisition, the Company held a 50% ownership interest, which was accounted for approximately $214 million. under the equity method. Refer to Note 4.

CityCenter distributions. During the year ended December 31, 2018,2020, CityCenter recognized a loss on the salepaid $101 million in distributions, of the Mandarin Oriental of $133 million andwhich the Company recognized a $12 million gain on the sale related to the reversal of basis differences in excess ofreceived its 50% share, of the loss recorded by CityCenter, which is recorded within “Income from unconsolidated affiliates”.


CityCenter distributions. or approximately $51 million. During the year ended December 31, 2019, CityCenter paid $180 million in dividends and distributions, of which the Company received its 50% share, or approximately $90 million. During the year ended December 31, 2018,


CityCenter paid $625 million in dividends and distributions,sale of which the Company received its 50% share, or approximately $313 million. During the year ended December 31, 2017,Harmon land.In June 2021, CityCenter paid $600 million in dividends and distributions, of which the Company received its 50% share, or approximately $300 million.

Grand Victoria

Grand Victoria sale. On August 7, 2018, the Company, along with its joint venture partner, completedclosed the sale of Grand Victoria, ofits Harmon land for $80 million on which it recorded a subsidiary of the Company owned a 50% interest, for $328$30 million in cash.gain. The Company recorded a $50 million gain, which included $15 million of $45its 50% share of the gain recorded by CityCenter and $35 million related torepresenting the sale, which is recordedreversal of certain basis differences in 2021.


Other. During the years ended December 31, 2021 and 2020, the Company recognized other-than-temporary impairment charges of $22 million and $64 million, respectively, within “Property transactions, net”. in the consolidated statements of operations related to investments in unconsolidated affiliates previously classified within “Other” in the “Investments in and advances to unconsolidated affiliates” table above.


Unconsolidated Affiliate Financial Information -– CityCenter

(as of December 31, 2020 and through September 26, 2021) & MGP BREIT Venture


Summarized balance sheet information is as follows:

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Current assets

 

$

405,918

 

 

$

363,755

 

Property and other assets, net and other long-term assets

 

 

5,982,059

 

 

 

6,167,853

 

Current liabilities

 

 

295,815

 

 

 

347,710

 

Long-term debt and other long-term obligations

 

 

1,782,411

 

 

 

1,763,290

 

 December 31,
 20212020
 (In thousands)
Cash and cash equivalents$16 $96,758 
Property and equipment, net4,439,851 10,237,004 
Other assets, net193,184 256,813 
Debt, net2,994,782 4,715,997 
Other liabilities8,018 270,583 


Summarized results of operations are as follows:

 

Year Ended December 31,

 

 

2019

 

 

2018

 

 

2017

 

 Year Ended December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 202120202019

 

(In thousands)

 

 (In thousands)

Net revenues

 

$

1,294,861

 

 

$

1,277,745

 

 

$

1,227,733

 

Net revenues$1,084,503 $869,638 $1,294,861 

Operating income

 

 

188,156

 

 

 

185,368

 

 

 

200,109

 

Income from continuing operations

 

 

69,143

 

 

 

97,091

 

 

 

137,226

 

Net income (loss)

 

 

69,143

 

 

 

(37,911

)

 

 

131,683

 

Net income (loss)294,797 (43,749)69,143 


Basis Differences


The Company’s investments in unconsolidated affiliates do not equal the Company’s share of venture-level equity due to various basis differences. Basis differences related to depreciable assets are being amortized based on the useful lives of the related assets and liabilities, and basis differences related to non–depreciable assets, such as land and indefinite-lived intangible assets, are not being amortized. Basis differences relating to the Company's investment in CityCenter were resolved in connection with the consolidation of CityCenter in 2021.

80

Differences between the Company’s share of venture-level equity and investment balances are as follows:

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Venture-level equity attributable to the Company

 

$

2,399,993

 

 

$

2,347,103

 

Adjustment to CityCenter equity upon contribution of net assets by MGM Resorts

   International (1)

 

 

(509,382

)

 

 

(514,592

)

CityCenter capitalized interest (2)

 

 

177,898

 

 

 

186,830

 

CityCenter completion guarantee (3)

 

 

261,708

 

 

 

274,685

 

CityCenter deferred gain (4)

 

 

(210,240

)

 

 

(212,276

)

CityCenter capitalized interest on sponsor notes (5)

 

 

(34,755

)

 

 

(36,500

)

Other-than-temporary impairments of CityCenter investment (6)

 

 

(1,304,317

)

 

 

(1,352,118

)

Other adjustments

 

 

41,461

 

 

 

39,735

 

 

 

$

822,366

 

 

$

732,867

 

(1)

Primarily relates to land and fixed assets.

(2)

Relates to interest capitalized on the Company’s investment balance during development and construction stages.

 December 31,
 20212020
 (In thousands)
Venture-level equity attributable to the Company$961,787 $2,981,550 
Adjustment to CityCenter equity upon contribution of net assets by MGM Resorts International(1)
— (504,171)
CityCenter capitalized interest(2)
— 168,966 
CityCenter completion guarantee(3)
— 248,730 
CityCenter deferred gain(4)
— (208,204)
CityCenter capitalized interest on sponsor notes(5)
— (33,010)
Other-than-temporary impairments of CityCenter investment(6)
— (1,256,516)
Other adjustments5,257 49,698 
 $967,044 $1,447,043 

(3)(1)Primarily related to land and fixed assets.

Created by contributions to CityCenter under the completion guarantee recognized as equity contributions by CityCenter split between the members.


(2)Related to interest capitalized on the Company’s investment balance during development and construction stages.

(4)(3)Created by contributions to CityCenter under the completion guarantee recognized as equity contributions by CityCenter split between the members.

Relates to a deferred gain on assets contributed to CityCenter upon formation of CityCenter.

(5)(4)Related to a deferred gain on assets contributed to CityCenter upon formation of CityCenter.

Relates to interest on the sponsor notes capitalized by CityCenter during development. Such sponsor notes were converted to equity in 2013.  

(6)(5)Related to interest on the sponsor notes capitalized by CityCenter during development. Such sponsor notes were converted to equity in 2013.

The impairment of the Company’s CityCenter investment includes $352 million of impairments allocated to land as of December 31, 2019 and 2018.

(6)The impairment of the Company’s CityCenter investment included $352 million of impairments allocated to land.


NOTE 7 — GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets consisted of the following:

 

December 31,

 

 December 31,

 

2019

 

 

2018

 

 20212020

 

(In thousands)

 

 (In thousands)

Goodwill

 

$

2,084,564

 

 

$

1,821,392

 

Goodwill$3,480,997 $2,091,278 

 

 

 

 

 

 

 

 

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

Indefinite-lived intangible assets:

Detroit development rights

 

$

98,098

 

 

$

98,098

 

Detroit development rights$98,098 $98,098 

MGM Northfield Park racing and gaming licenses

 

 

228,000

 

 

 

228,000

 

Trademarks, license rights and other

 

 

352,212

 

 

 

312,022

 

MGM Northfield Park and Empire City racing and gaming licensesMGM Northfield Park and Empire City racing and gaming licenses280,000 280,000 
Trademarks and otherTrademarks and other479,238 299,238 

Total indefinite-lived intangible assets

 

 

678,310

 

 

 

638,120

 

Total indefinite-lived intangible assets857,336 677,336 

Finite-lived intangible assets:

 

 

 

 

 

 

 

 

Finite-lived intangible assets:

MGM Grand Paradise gaming sub-concession

 

 

4,519,558

 

 

 

4,468,766

 

MGM Grand Paradise gaming subconcessionMGM Grand Paradise gaming subconcession4,516,532 4,541,990 

Less: Accumulated amortization

 

 

(1,514,772

)

 

 

(1,342,561

)

Less: Accumulated amortization(1,865,219)(1,697,481)

 

 

3,004,786

 

 

 

3,126,205

 

 2,651,313 2,844,509 

MGM Macau land concession

 

 

—

 

 

 

83,885

 

MGM National Harbor and MGM Springfield gaming licensesMGM National Harbor and MGM Springfield gaming licenses106,600 106,600 

Less: Accumulated amortization

 

 

—

 

 

 

(32,035

)

Less: Accumulated amortization(26,209)(19,102)

 

 

—

 

 

 

51,850

 

 80,391 87,498 

Customer lists

 

 

202,347

 

 

 

174,679

 

Less: Accumulated amortization

 

 

(161,892

)

 

 

(151,465

)

 

 

40,455

 

 

 

23,214

 

Finite-lived gaming licenses and other intangible assets

 

 

141,327

 

 

 

136,127

 

Other finite-lived intangible assetsOther finite-lived intangible assets65,207 60,649 

Less: Accumulated amortization

 

 

(38,374

)

 

 

(31,053

)

Less: Accumulated amortization(37,862)(26,244)

 

 

102,953

 

 

 

105,074

 

 27,345 34,405 

Total finite-lived intangible assets, net

 

 

3,148,194

 

 

 

3,306,343

 

Total finite-lived intangible assets, net2,759,049 2,966,412 

Total other intangible assets, net

 

$

3,826,504

 

 

$

3,944,463

 

Total other intangible assets, net$3,616,385 $3,643,748 



81

Goodwill. A summary of changes in the Company’s goodwill by reportable segment is as follows for 2019 and 2018:follows:

 

 

2019

 

 

 

Balance at January 1

 

 

Acquisitions

 

 

Reclassifications

 

 

Currency exchange

 

 

Balance at December 31

 

 

 

(In thousands)

 

Goodwill, net by segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Las Vegas Strip Resorts

 

$

70,975

 

 

$

—

 

 

$

(40,523

)

 

$

—

 

 

$

30,452

 

Regional Operations

 

 

386,892

 

 

 

256,133

 

 

 

58,438

 

 

 

—

 

 

 

701,463

 

MGM China

 

 

1,345,610

 

 

 

—

 

 

 

—

 

 

 

7,039

 

 

 

1,352,649

 

Corporate and other

 

 

17,915

 

 

 

—

 

 

 

(17,915

)

 

 

—

 

 

 

—

 

 

 

$

1,821,392

 

 

$

256,133

 

 

$

—

 

 

$

7,039

 

 

$

2,084,564

 


 

 

 

 

2018

 

 

 

 

 

Balance at January 1

 

 

Acquisitions

 

 

Currency exchange

 

 

Balance at December 31

 

 

 

 

 

(In thousands)

 

Goodwill, net by segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Las Vegas Strip Resorts

 

 

 

$

70,975

 

 

$

—

 

 

$

—

 

 

$

70,975

 

Regional Operations

 

 

 

 

386,892

 

 

 

—

 

 

 

—

 

 

 

386,892

 

MGM China

 

 

 

 

1,348,664

 

 

 

—

 

 

 

(3,054

)

 

 

1,345,610

 

Corporate and other

 

 

 

 

—

 

 

 

17,915

 

 

 

—

 

 

 

17,915

 

 

 

 

 

$

1,806,531

 

 

$

17,915

 

 

$

(3,054

)

 

$

1,821,392

 


 2021
 Balance at January 1AcquisitionsCurrency exchangeBalance at December 31
 (In thousands)
Goodwill, net by segment:    
Las Vegas Strip Resorts$30,452 $1,397,338 $— $1,427,790 
Regional Operations701,463 — — 701,463 
MGM China1,359,363 — (7,619)1,351,744 
 $2,091,278 $1,397,338 $(7,619)$3,480,997 

 2020
 Balance at January 1AcquisitionsCurrency exchangeBalance at December 31
 (In thousands)
Goodwill, net by segment:
Las Vegas Strip Resorts$30,452 $— $— $30,452 
Regional Operations701,463 — — 701,463 
MGM China1,352,649 — 6,714 1,359,363 
 $2,084,564 $— $6,714 $2,091,278 

Goodwill was recognized in 2021 related to the acquisition of Empire Citythe 50% ownership interest in January 2019,CityCenter, which is included in Regional Operations. See Note 4 for discussion of the Empire City acquisition.

Goodwill was recognized by MGP, which was included within Corporate and other in 2018 and reclassed to Regional Operations in 2019, in connection with MGP’s acquisition of Northfield in 2018, and the Company’s acquisition of the membership interests of Northfield in 2019. See Note 4 for discussion of the Northfield Acquisition.

The presentation of the goodwill balance attributable to Gold Strike Tunica has been reclassified in 2019 from Las Vegas Strip Resorts, to Regional Operations.

Indefinite-lived intangible assets. The Company’s indefinite-lived intangible assets consist primarily of development rightsas further discussed in Detroit, gaming and racing licenses for MGM Northfield Park, and trademarks and trade names, which is primarily related to Mandalay Bay, Luxor, Borgata, and Empire City.Note 4.


MGM Grand Paradise gaming subconcession. Pursuant to the agreement dated JuneApril 19, 20042005 between MGM Grand Paradise and SJM Resorts S.A. ("SJMSA", formerly Sociedade de Jogos de Macau, S.A. (“SJMSA”), a gaming sub-concessionsubconcession was acquired by MGM Grand Paradise for the right to operate casino games of chance and other casino games for a period of 15 years commencing on April 20, 2005. 2005 through March 31, 2020. In March 2019, MGM Grand Paradise and SJMSA entered into a Sub-ConcessionSubconcession Extension Contract (the “Extension Agreement”), pursuant to which the gaming sub-concessionsubconcession was extended to June 26, 2022, which coincides with the current expiration of all the other concessionairesconcessions and sub-concessionaires.subconcessions. MGM Grand Paradise paid the government of Macau approximately $25 million and paid SJMSA approximately $2 million as a contract premium for such extension. The Company cannot provide any assurance that the gaming sub-concessionMGM Grand Paradise will be extended beyondawarded a gaming concession subsequent to the current terms;expiration of its gaming subconcession; however, as further discussed in Note 1, management believes that the gaming sub-concessionMGM Grand Paradise will be extended, given that the Cotai landsuccessful in obtaining a gaming concession agreement with the government extends significantly beyond the gaming sub-concession. As such,when a public tender is held. Accordingly, as of December 31, 2019,2021 and 2020, the Company amortizes the gaming sub-concessionsubconcession intangible asset on a straight-line basis over the initial term of the Cotai land concession ending inthrough January 2038.

MGM Macau land concession.


MGM Grand Paradise entered into a contract with the Macau government to use the land underNational Harbor and MGM Macau commencing from April 6, 2006. The land use right has an initial term through April 6, 2031, subject to renewal for additional periods. Upon the adoption of ASC 842 on January 1, 2019, the below market component of the MGM Macau land concession, recognized prior to ASC 842 adoption as an intangible asset, is now reflected within the ROU operating asset recorded for the MGM Macau land concession.

Customer lists. The Company recognized intangible assets related to the Empire City customer list and the MGM Northfield Park customer list, which are amortized on a straight-line basis over the estimated useful life over four years, and seven years, respectively. The Company also recognized intangible assets related to MGM China’s and Borgata’s customer lists, which became fully amortized in 2016 and 2018, respectively.

Finite-livedSpringfield gaming licenses. The license fee paid to the State of Maryland of $22 million is considered a finite-lived intangible asset that is amortized on a straight-line basis over a period of its initial term of 15 years, beginning in December 2016, when MGM National Harbor started operations. The license fee paid to the State of Massachusetts of $85 million is considered a finite-lived intangible asset that is amortized over a period of 15 years, beginning in August 2018, when MGM Springfield started operations.

Other.

82
The Company’s other finite–lived intangible assets consist primarily of lease acquisition costs amortized over the life of the related leases, and certain license rights amortized over their contractual life.  


Total amortization expense related to intangible assets was $197 million, $194 million and $192 million $176 millionfor 2021, 2020, and $173 million for 2019, 2018, and 2017, respectively. As of December 31, 2019,2021, estimated future amortization is as follows:

 

 

 

 

 

Years ending December 31,

 

(In thousands)

 

2020

 

$

193,886

 

2021

 

 

196,932

 

2022

 

 

190,840

 

2023

 

 

178,378

 

2024

 

 

175,866

 

Thereafter

 

 

2,212,292

 

 

 

$

3,148,194

 


Years ending December 31,(In thousands)
2022$190,257 
2023177,982 
2024175,995 
2025174,210 
2026172,424 
Thereafter1,868,181 
 $2,759,049 


NOTE 8 — OTHER ACCRUED LIABILITIES


Other accrued liabilities consisted of the following:

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Contract and contract-related liabilities:

 

 

 

 

 

 

 

 

    Outstanding chip liability

 

$

314,570

 

 

$

323,811

 

    Loyalty program obligations

 

 

126,966

 

 

 

113,293

 

    Casino front money

 

 

176,827

 

 

 

342,941

 

    Advance deposits and ticket sales

 

 

190,325

 

 

 

221,003

 

    Unpaid wagers and other

 

 

113,943

 

 

 

103,341

 

Other accrued liabilities:

 

 

 

 

 

 

 

 

    Payroll and related

 

 

507,041

 

 

 

518,892

 

    Taxes, other than income taxes

 

 

218,027

 

 

 

235,160

 

    MGP Dividend

 

 

53,489

 

 

 

31,732

 

    Lease obligations - short-term (Refer to Note 11)

 

 

95,448

 

 

 

—

 

    Other

 

 

227,366

 

 

 

260,881

 

 

 

$

2,024,002

 

 

$

2,151,054

 




 December 31,
 20212020
 (In thousands)
Contract and contract-related liabilities:
 Outstanding chip liability$176,219 $212,671 
 Loyalty program obligations144,465 139,756 
 Casino front money206,244 133,114 
 Advance deposits and ticket sales283,188 123,079 
 Unpaid wagers and other150,569 126,094 
Other accrued liabilities:
 Payroll and related429,797 327,644 
 Taxes, other than income taxes195,973 109,100 
 Operating Partnership interest rate swaps - current14,071 32,155 
 MGP dividend82,294 64,086 
 Operating lease liabilities - current (Refer to Note 11)
31,706 31,843 
 Finance lease liabilities - current (Refer to Note 11)
87,665 80,193 
 Other181,253 165,344 
$1,983,444 $1,545,079 


83

NOTE 9 — LONG-TERM DEBT


Long-term debt consisted of the following:

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Senior credit facility

 

$

—

 

 

$

750,000

 

Operating Partnership senior credit facility

 

 

1,703,750

 

 

 

2,819,125

 

MGM China credit facility

 

 

667,404

 

 

 

2,433,562

 

$850 million 8.625% senior notes, due 2019

 

 

—

 

 

 

850,000

 

$500 million 5.25% senior notes, due 2020

 

 

—

 

 

 

500,000

 

$1,000 million 6.75% senior notes, due 2020

 

 

—

 

 

 

1,000,000

 

$1,250 million 6.625% senior notes, due 2021

 

 

—

 

 

 

1,250,000

 

$1,000 million 7.75% senior notes, due 2022

 

 

1,000,000

 

 

 

1,000,000

 

$1,250 million 6% senior notes, due 2023

 

 

1,250,000

 

 

 

1,250,000

 

$1,050 million 5.625% Operating Partnership senior notes, due 2024

 

 

1,050,000

 

 

 

1,050,000

 

$750 million 5.375% MGM China senior notes, due 2024

 

 

750,000

 

 

 

—

 

$1,000 million 5.75% senior notes, due 2025

 

 

1,000,000

 

 

 

1,000,000

 

$750 million 5.875% MGM China senior notes, due 2026

 

 

750,000

 

 

 

—

 

$500 million 4.50% Operating Partnership senior notes, due 2026

 

 

500,000

 

 

 

500,000

 

$500 million 4.625% senior notes, due 2026

 

 

500,000

 

 

 

500,000

 

$750 million 5.75% Operating Partnership senior notes, due 2027

 

 

750,000

 

 

 

—

 

$1,000 million 5.5% senior notes, due 2027

 

 

1,000,000

 

 

 

—

 

$350 million 4.50% Operating Partnership senior notes, due 2028

 

 

350,000

 

 

 

350,000

 

$0.6 million 7% debentures, due 2036

 

 

552

 

 

 

552

 

 

 

 

11,271,706

 

 

 

15,253,239

 

Less: Premiums, discounts, and unamortized debt issuance costs, net

 

 

(102,802

)

 

 

(121,823

)

 

 

 

11,168,904

 

 

 

15,131,416

 

Less: Current portion

 

 

—

 

 

 

(43,411

)

 

 

$

11,168,904

 

 

$

15,088,005

 

 December 31,
 20212020
 
 (In thousands)
Operating Partnership senior credit facility$50,000 $10,000 
MGM China first revolving credit facility360,414 770,034 
7.75% senior notes, due 20221,000,000 1,000,000 
6% senior notes, due 20231,250,000 1,250,000 
5.625% Operating Partnership senior notes, due 20241,050,000 1,050,000 
5.375% MGM China senior notes, due 2024750,000 750,000 
6.75% senior notes, due 2025750,000 750,000 
5.75% senior notes, due 2025675,000 675,000 
4.625% Operating Partnership senior notes, due 2025800,000 800,000 
5.25% MGM China senior notes, due 2025500,000 500,000 
5.875% MGM China senior notes, due 2026750,000 750,000 
4.5% Operating Partnership senior notes, due 2026500,000 500,000 
4.625% senior notes, due 2026400,000 400,000 
5.75% Operating Partnership senior notes, due 2027750,000 750,000 
5.5% senior notes, due 2027675,000 675,000 
4.75% MGM China senior notes, due 2027750,000 — 
4.5% Operating Partnership senior notes, due 2028350,000 350,000 
4.75% senior notes, due 2028750,000 750,000 
3.875% Operating Partnership senior notes, due 2029750,000 750,000 
7% debentures, due 2036552 552 
 12,860,966 12,480,586 
Less: Premiums, discounts, and unamortized debt issuance costs, net(90,169)(103,902)
 12,770,797 12,376,684 
Less: Current portion(1,000,000)— 
$11,770,797 $12,376,684 

Debt due within one year of the December 31, 2019 and 2018 balance sheet was classified as long-term as the Company had both the intent and ability to refinance current maturities on a long-term basis under its revolving senior credit facilities, with the exception that $43 million related to MGM China’s term loan amortization payments in excess of available borrowings under the previous MGM China revolving credit facility were classified as current as of December 31, 2018.


Interest expense, net consisted of the following:

Year Ended December 31,

 

 Year Ended December 31,

2019

 

 

2018

 

 

2017

 

 202120202019

 

 

 

 

 

 

 

 

 

 

 

    

(In thousands)

 

 (In thousands)

Total interest incurred

$

853,007

 

 

$

821,229

 

 

$

779,855

 

Total interest incurred$800,156 $679,251 $853,007 

Interest capitalized

 

(5,075

)

 

 

(51,716

)

 

 

(111,110

)

Interest capitalized(563)(2,871)(5,075)

$

847,932

 

 

$

769,513

 

 

$

668,745

 

 $799,593 $676,380 $847,932 


Senior credit facility. At December 31, 2019, 2021, the Company’s senior credit facility consisted of a $1.5$1.675 billion revolving facility of which no amounts were drawn.

On February 14, 2020, in connection with the MGP BREIT Venture Transaction, the Company used proceeds from the transaction to repay and terminate the $1.5 billion outstanding on its then existing revolving facility in full and entered into an unsecured credit agreement, comprised of a $1.5 billion unsecured revolving facility that would mature in February 2025. As a result, the Company incurred a $4 million loss on early retirement of debt recorded in “Other, net” in the consolidated statements of operations.

84

In April 2020 and then in February 2021, the Company amended its credit facility to provide it with certain relief from the effects of the COVID-19 pandemic, including certain financial maintenance covenant waivers, agreeing to liquidity tests, and pledging the Operating Partnership units held by loan parties to the lenders as collateral. In November 2021, the Company terminated its existing revolving facility and entered into a new $1.675 billion secured revolving credit facility that matures in November 2026. The revolving credit facility bears interest of SOFR plus 1.50% to 2.25% determined by reference to a rent adjusted total net leverage ratio pricing grid.

The Company's senior revolving credit facility is, subject to gaming approval, guaranteed by each of the Company's existing direct and indirect wholly-owned material domestic restricted subsidiaries, subject to certain exclusions. The senior revolving credit facility is secured by a pledge of the equity in certain of the Company's domestic operating properties. Mandatory prepayments will be required upon the occurrence of certain events, including sales of certain assets, subject to certain exceptions. The Company’s senior revolving credit facility also contains customary representations and warranties, events of default and positive and negative covenants. The Company was in compliance with its applicable covenants at December 31, 2021.

Operating Partnership senior credit facility and bridge facility. At December 31, 2021, the Operating Partnership’s senior secured credit facility consisted of a $1.35 billion revolving credit facility. The revolving facility bears interest of LIBOR plus 1.50%1.75% to 2.25% determined by reference to a total net leverage ratio pricing grid and will mature in DecemberJune 2023. At December 31, 2019, 0 amounts were2021, $50 million was drawn on the revolving credit facility. In November 2019, facility and the Company used a portion of the net proceeds of the Bellagio transaction to pay off all $750 million outstandinginterest rate on the term loan A facility, which was subsequently extinguished, and fully paid down its revolving facility.

The senior credit facility contains representations and warranties, customary events of default, and positive, negative and financial covenants, including that the Company maintain compliance with a maximum total net leverage ratio, a maximum first lien net leverage ratio and a minimum interest coverage ratio.

was 1.85%.


As of December 31, 2019, the senior credit facility is secured by (i) a mortgage on the real properties comprising the MGM Grand Las Vegas, (ii) a pledge of substantially all existing and future personal property of the subsidiaries of the Company that own the MGM Grand Las Vegas; and (iii) a pledge of the equity or limited liability company interests of the entities that own the MGM Grand Las Vegas and the Bellagio. In connection with the MGP BREIT Venture Transaction, on February 14, 2020, we entered into a new unsecured credit agreement which provides that we will grant a security interest in our Operating Partnership units in the future to the extent our leverage ratio exceeds certain thresholds.

In connection with the MGP BREIT Venture Transaction, the Company entered into an unsecured credit agreement, comprised of a $1.5 billion unsecured revolving facility that matures in February 2025, and the revolving commitments under the prior credit agreement were terminated.

Operating Partnership senior credit facility. At December 31, 2019, the Operating Partnership’s senior secured credit facility consisted of a $399 million term loan A facility, a $1.3 billion term loan B facility, and a $1.35 billion revolving credit facility. The revolving and term loan A facilities bear interest of LIBOR plus 1.75% to 2.25% determined by reference to a total net leverage ratio pricing grid. The revolving and term loan A facilities will mature in June 2023. The term loan B facility bears interest of LIBOR plus 2.00% and will mature in March 2025.

The term loan facilities are subject to amortization of principal in equal quarterly installments of approximately $3 million and $5 million for the term loan A facility and term loan B facility, respectively, with the balances due at maturity. In November 2019, the Operating Partnership used the proceeds from its equity offering, discussed in Note 13, to prepay $65 million on the term loan A facility and $476 million on the term loan B facility, which reflects all scheduled amortization plus additional principal. At December 31, 2019, the interest rate on the term loan A facility was 3.55% and the interest rate on the term loan B facility was 3.80%. At December 31, 2019, 0 amounts were drawn on the revolving credit facility.

In connection with the MGP BREIT Venture Transaction, the Operating Partnership amended its senior secured credit facility to, among other things, allow for the transaction to occur, permit the incurrence by the Operating Partnership of a nonrecourse guarantee forrelating to the debt of the MGP BREIT Venture (refer to Note 12 for description of such guarantee), and permit the incurrence of athe bridge loan facility. As a result of the transaction and the amendment, the Operating Partnership repaid its $1.3$1.3 billion outstanding term loan B facility in full with the proceeds of a bridge facility, which was then assumed by the MGP BREIT Venture as partial consideration for the Operating Partnership’s contribution. Additionally, the Operating Partnership used the proceeds from the settlement of the forward equity issuances to pay off the outstanding balance of$399 million on its term loan A facility in full.

As a result, the Operating Partnership incurred an $18 million loss on early retirement of debt recorded in “Other, net” in the consolidated statements of operations.


The Operating Partnership is party to interest rate swaps to mitigate the effects of interest rate volatility inherent in its variable rate debt as well as forecasted debt issuances. As of December 31, 2021, the Operating Partnership has currently effective interest rate swap agreements on which it pays a weighted average fixed rate of 1.783% on total notional amount of $700 million. The Operating Partnership has an additional $900 million total notional amount of forward starting interest rate swaps that are not currently effective. The fair value of interest rate swaps designated as cash flow hedges was $25 million, with $5 million recorded as a current liability and $20 million recorded as a long-term liability as of December 31, 2021, and $41 million, with $1 million recorded as a current liability and $40 million recorded as a long-term liability, as of December 31, 2020. The fair value of interest rate swaps not designated as cash flow hedges was $27 million, with $8 million recorded as a current liability and $19 million recorded as a long-term liability as of December 31, 2021, and $78 million, with $31 million recorded as a current liability and $47 million recorded as a long-term liability, as of December 31, 2020. Interest rate swaps in a current liability position are recorded within “Other accrued expenses,” and those in a long-term liability position are recorded within “Other long-term obligations” on the consolidated balance sheets.

The Operating Partnership credit facility contains customary representations and warranties, events of default and positive and negative covenants. The revolving credit facility and term loan A facility also requirecovenants, including that the Operating Partnership maintain compliance with a maximum senior secured net debt to adjusted total assets ratio, a maximum total net debt to adjusted assets ratio and a minimum interest coverage ratio. The Operating Partnership was in compliance with its credit facility covenants at December 31, 2019.

2021.


The Operating Partnership senior credit facility is guaranteed by each of the Operating Partnership’s existing and subsequently acquired direct and indirect wholly owned material domestic restricted subsidiaries, except for MGM Springfield reDevelopment, which owns the real estate assets of MGM Springfield, and secured by a first priority lien security interest on substantially all of the Operating Partnership’s and such restricted subsidiaries’ material assets, including mortgages on its real estate, excluding the real estate assets of MGM National Harbor, and Empire City, and MGM Springfield and subject to other customary exclusions.

The Operating Partnership is party to interest rate swaps to mitigate the interest rate risk inherent in its senior


MGM China first revolving credit facility. As of December 31, 2019, the Operating Partnership has effective interest rate swap agreements on which it pays a weighted average fixed rate of 1.821% on total notional amount of $1.9 billion. The Operating Partnership has an additional $900 million total notional amount of forward starting interest rate swaps that are not currently effective.

MGM China credit facility. At December 31, 2019,2021, the MGM China first revolving credit facility consisted of a $1.25 billion unsecured revolving credit facility. In August 2019,The MGM China entered into a new $1.25 billion senior unsecuredfirst revolving credit facility on which it drew $776 million and used the proceeds to fully repay the borrowings outstanding under its previous secured credit facility. The new revolving credit facility matures in May 2024 and bears interest at a fluctuating rate per annum based on HIBORHong Kong Interbank Offered Rate (“HIBOR”) plus 1.625% to 2.75%, as

85

determined by MGM China’s leverage ratio. During 2019, MGM China also used the proceeds from its senior notes issuance, discussed below, to permanently repay $1.0 billion of the previous term loan facilities, with the remaining proceeds used to pay down outstanding borrowings under its previous revolving credit facility.ratio and will mature in May 2024. At December 31, 2019, $6672021, $360 million was outstandingdrawn on the revolving credit facility. At December 31, 2019, the interest rate on theMGM China first revolving credit facility and the weighted average interest rate was 4.95%2.95%.


The MGM China first revolving credit facility contains customary representations and warranties, events of default, and positive, negative and financial covenants, including that MGM China maintains compliance with a maximum leverage ratio and a minimum interest coverage ratio. Due to the impact of the outbreak of the novel coronavirus, discussed in Note 1,ratio. In February 2021, MGM China entered into an amendment toamended its credit agreement on February 21, 2020 that providedto provide for an increase of its maximum leverage ratio for the first quarter of 2020, a waiver of its maximum leverage ratio beginning inand its minimum interest coverage ratio through the secondfourth quarter of 20202022. MGM China was in compliance with its applicable MGM China credit facility covenants at December 31, 2021. In February 2022, MGM China further amended its first revolving credit facility to extend the financial covenant waivers through maturity.

MGM China second revolving credit facility. At December 31, 2021,the MGM China second revolving credit facility consisted of a $400 million unsecured revolving credit facility with an option to increase the amount of the facility up to $500 million, subject to certain conditions. The MGM China second credit facility bears interest at a fluctuating rate per annum based on HIBOR plus 1.625% to 2.75%, as determined by MGM China’s leverage ratio and extending throughwill mature in May 2024. Draws will be subject to satisfaction of certain conditions precedent, including evidence that the MGM China first quarterrevolving credit facility has been fully drawn. At December 31, 2021, no amounts were drawn on the MGM China second revolving credit facility.

The MGM China second credit facility contains customary representations and warranties, events of 2021,default, and positive, negative and financial covenants, including that MGM China maintains compliance with a maximum leverage ratio and a decrease of its minimum interest coverage ratio beginning in the secondthird quarter of 20202021. In February 2021, MGM China further amended its second credit facility agreement to provide for a waiver of its maximum leverage ratio and extendingits minimum interest coverage ratio through the firstfourth quarter of 2021.2022. MGM China was in compliance with its applicable MGM China second credit facility covenants at December 31, 2019.

Bridge Facility. 2021. In connection with the Empire City transaction in January 2019, the Company borrowed $246 million under a bridge facility, which was subsequently assumed by the Operating Partnership. The Operating Partnership repaid the bridge facility with a combination of cash on hand and a draw onFebruary 2022, MGM China further amended its second revolving credit facility which was subsequently repaid with proceeds from its offeringto extend the financial covenant waivers through maturity.


Senior Notes. In October 2020, the Company issued $750 million in aggregate principal amount of its 5.75%4.75% senior notes due 2027, discussed below.2028.

Senior Notes.


In May 2020, the Company issued $750 million in aggregate principal amount of 6.75% senior notes due 2025.

In March 2020, the Company completed cash tender offers for an aggregate amount of $750 million of its senior notes, comprised of $325 million principal amount of its outstanding 5.75% senior notes due 2025, $100 million principal amount of its outstanding 4.625% senior notes due 2026, and $325 million principal amount of its outstanding 5.5% senior notes due 2027. As a result, the Company incurred a $105 million loss on early retirement of debt recorded in “Other, net” in the consolidated statements of operations.

In December 2019, the Company used a portion of the net proceeds from the Bellagio transaction to redeem for cash all $267 million principal amount of its outstanding 5.250% senior notes due 2020, all $361 million principal amount of its outstanding 6.750% senior notes due 2020, and all $1.25 billion principal amount of its outstanding 6.625% senior notes due 2021. The Company incurred a $171 million loss on the early retirement of such notes recorded in “Other, net” in the consolidated statements of operations.

In April 2019, the Company issued $1.0 billion in aggregate principal amount of 5.50% senior notes due 2027. The Company primarily used the net proceeds from the offering to fund the purchase of $639 million in aggregate principal amount of its outstanding 6.75% senior notes due 2020 and $233 million in aggregate principal amount of its outstanding 5.25% senior notes due 2020 through cash tender offers.


In February 2019, the Company repaid its $850 million 8.625% senior notes due 2019.


Operating Partnership senior notes. In June 2018, the Company issued $1.0 billion in aggregate principal amount of 5.750% senior notes due 2025.

On February 18,November 2020, the Company commenced cash tender offers to purchase up toOperating Partnership issued $750 million in aggregate principal amount of its outstanding 5.750%3.875% senior notes due 2025,2029.


In June 2020, the Operating Partnership issued $800 million in aggregate principal amount of 4.625% senior notes due 2026, and 5.500% senior notes due 2027. Holders of notes that are tendered by March 2, 2020 will receive the tender offer consideration plus an early tender premium. The tender offers will expire on March 16, 2020, unless extended or earlier terminated by the Company.  

Operating Partnership senior notes. 2025.


In January 2019, the Operating Partnership issued $750 million in aggregate principal amount of 5.75% senior notes due 2027.

86

Each series of the Operating Partnership's senior notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis by all of the Operating Partnership’s subsidiaries that guarantee the Operating Partnership’s credit facilities, other than MGP Finance Co-Issuer, Inc., which is a co-issuer of the senior notes. The Operating Partnership may redeem all or part of the senior notes at a redemption price equal to 100% of the principal amount of the senior notes plus, to the extent the Operating Partnership is redeeming senior notes prior to the date that is three months prior to their maturity date, an applicable make whole premium, plus, in each case, accrued and unpaid interest. The indentures governing the senior notes contain customary covenants and events of default. These covenants are subject to a number of important exceptions and qualifications set forth in the applicable indentures governing the senior notes, including, with respect to the restricted payments covenants, the ability to make unlimited restricted payments to maintain the REIT status of MGP.


MGM China senior notes. In March 2021, MGM China issued $750 million in aggregate principal amount of 4.75% senior notes due 2027 at an issue price of 99.97%.

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

In May 2019, MGM China issued $750 million in aggregate principal amount of 5.375% senior notes due 2024 and $750 million in aggregate principal amount of 5.875% senior notes due 2026. The Company primarily used the net proceeds from the offering to pay down outstanding borrowings under the MGM China first revolving credit facility, as discussed above.facility. MGM China incurred a $16 million loss on the debt retirement recorded in “Other, net” in the consolidated statements of operations.


CityCenter senior credit facility. In connection with the CityCenter acquisition, the Company assumed $1.7 billion of CityCenter's indebtedness, which was repaid and extinguished in September 2021 with cash on hand.


Maturities of long-term debt. The maturities of the principal amount of the Company’s long-term debt as of December 31, 20192021 are as follows:

Years ending December 31,

 

 

 

(In thousands)

 

2020

 

 

 

$

—

 

2021

 

 

 

 

—

 

2022

 

 

 

 

1,000,000

 

2023

 

 

 

 

1,649,125

 

2024

 

 

 

 

2,467,404

 

Thereafter

 

 

 

 

6,155,177

 

 

 

 

 

$

11,271,706

 

 

 

 

 

 

 

 


Years ending December 31,(In thousands)
2022$1,000,000 
20231,300,000 
20242,160,414 
20252,725,000 
20261,650,000 
Thereafter4,025,552 
 $12,860,966 

Fair value of long-term debt. The estimated fair value of the Company’s long-term debt was $12.1$13.4 billion and $15.1$13.2 billion at December 31, 20192021 and 2018,2020, respectively. Fair value was estimated using quoted market prices for the Company’s senior notes and senior credit facilities.


NOTE 10 — INCOME TAXES


The Company recognizes deferred income tax assets, net of applicable reserves, related to net operating losses, tax credit carryforwards and certain temporary differences. The Company recognizes future tax benefits to the extent that realization of such benefit is more likely than not. Otherwise, a valuation allowance is applied.


Income (loss) before income taxes for domestic and foreign operations consisted of the following:

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In thousands)

 

Domestic operations

 

$

2,717,756

 

 

$

660,832

 

 

$

747,090

 

Foreign operations

 

 

128,969

 

 

 

(26,826

)

 

 

213,700

 

 

 

$

2,846,725

 

 

$

634,006

 

 

$

960,790

 



 Year Ended December 31,
 202120202019
 (In thousands)
Domestic operations$2,094,324 $(665,376)$2,717,756 
Foreign operations(632,520)(846,103)128,969 
 $1,461,804 $(1,511,479)$2,846,725 


87

The benefit (provision) for income taxes attributable to income (loss) before income taxes is as follows:

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

Federal:

 

(In thousands)

 

Current

 

$

(4,928

)

 

$

11,991

 

 

$

(120,980

)

Deferred (excluding separate components)

 

 

(537,993

)

 

 

(143,468

)

 

 

204,713

 

Deferred – change in enacted rates

 

 

—

 

 

 

—

 

 

 

987,942

 

Deferred – valuation allowance

 

 

(20,175

)

 

 

(19,753

)

 

 

101,443

 

Other noncurrent

 

 

(5,745

)

 

 

576

 

 

 

1,356

 

Benefit (provision) for federal income taxes

 

 

(568,841

)

 

 

(150,654

)

 

 

1,174,474

 

State:

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

(22,685

)

 

 

(12,564

)

 

 

(6,798

)

Deferred (excluding separate components)

 

 

(32,793

)

 

 

(12,731

)

 

 

(25,233

)

Deferred – operating loss carryforward

 

 

(5,241

)

 

 

(29,490

)

 

 

44,242

 

Deferred – valuation allowance

 

 

(191

)

 

 

41,068

 

 

 

(40,078

)

Other noncurrent

 

 

(1,401

)

 

 

(1,334

)

 

 

(3,876

)

Provision for state income taxes

 

 

(62,311

)

 

 

(15,051

)

 

 

(31,743

)

Foreign:

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

(2,454

)

 

 

(2,037

)

 

 

(470

)

Deferred (excluding separate components)

 

 

44,374

 

 

 

63,827

 

 

 

(40,653

)

Deferred – operating loss carryforward

 

 

32,915

 

 

 

30,574

 

 

 

4,688

 

Deferred – valuation allowance

 

 

(76,028

)

 

 

23,229

 

 

 

21,098

 

Benefit (provision) for foreign income taxes

 

 

(1,193

)

 

 

115,593

 

 

 

(15,337

)

 

 

$

(632,345

)

 

$

(50,112

)

 

$

1,127,394

 


 Year Ended December 31,
 202120202019
Federal:(In thousands)
Current$(8,984)$207,544 $(4,928)
Deferred (excluding separate components)(189,657)19,852 (537,993)
Deferred – valuation allowance
(14,967)(42,109)(20,175)
Other noncurrent(14,262)4,922 (5,745)
Benefit (provision) for federal income taxes(227,870)190,209 (568,841)
State:
Current5 (816)(22,685)
Deferred (excluding separate components)(28,068)(33,087)(32,793)
Deferred – operating loss carryforward
(27,936)47,728 (5,241)
Deferred – valuation allowance
(601)(3,375)(191)
Other noncurrent13,260 (946)(1,401)
Benefit (provision) for state income taxes(43,340)9,504 (62,311)
Foreign:
Current(3,717)(828)(2,454)
Deferred (excluding separate components)8,943 4,206 44,374 
Deferred – operating loss carryforward
5,793 39,920 32,915 
Deferred – valuation allowance
6,776 (51,439)(76,028)
Benefit (provision) for foreign income taxes17,795 (8,141)(1,193)
 $(253,415)$191,572 $(632,345)

A reconciliation of the federal income tax statutory rate and the Company’s effective tax rate is as follows:

 

Year Ended December 31,

 

 

2019

 

 

2018

 

 

2017

 

Federal income tax statutory rate

 

21.0

%

 

 

21.0

%

 

 

35.0

%

Change in enacted rates

 

—

 

 

 

—

 

 

 

(102.7

)

Non-controlling interest

 

(0.8

)

 

 

(2.4

)

 

 

(1.5

)

Foreign jurisdiction income/losses taxed at other than U.S. statutory rate

 

(0.5

)

 

 

(9.5

)

 

 

(9.2

)

Repatriation of foreign earnings

 

—

 

 

 

—

 

 

 

35.4

 

Foreign tax credit

 

—

 

 

 

—

 

 

 

(70.3

)

Federal valuation allowance

 

0.7

 

 

 

3.1

 

 

 

(10.6

)

Macau dividend tax

 

—

 

 

 

(6.4

)

 

 

4.2

 

State taxes, net

 

1.7

 

 

 

1.9

 

 

 

2.4

 

General business credits

 

(0.5

)

 

 

(2.9

)

 

 

(1.0

)

Stock-based compensation

 

(0.1

)

 

 

(1.2

)

 

 

(2.1

)

Non-deductible employee dining facility costs

 

0.2

 

 

 

1.4

 

 

 

—

 

Permanent and other items

 

0.5

 

 

 

2.9

 

 

 

3.1

 

 

 

22.2

%

 

 

7.9

%

 

 

(117.3

)%



 Year Ended December 31,
 202120202019
Federal income tax statutory rate21.0 %21.0 %21.0 %
Net operating loss carryback rate differential— 5.5 — 
Noncontrolling interest(3.2)1.6 (0.8)
Foreign jurisdiction income/losses taxed at other than U.S. statutory rate8.2 (12.5)(0.5)
Federal valuation allowance1.0 (2.8)0.7 
State taxes, net2.3 0.5 1.7 
Gain on consolidation of CityCenter, net(10.1)— — 
Permanent and other items(1.9)(0.6)0.1 
 17.3 %12.7 %22.2 %

88


The tax-effected components of the Company’s net deferred tax liability are as follows:

 

December 31,

 

 December 31,

 

2019

 

 

2018

 

 20212020

Deferred tax assets – federal and state:

 

(In thousands)

 

Deferred tax assets – federal and state:(In thousands)

Bad debt reserve

 

$

25,085

 

 

$

23,497

 

Deferred compensation

 

 

7,918

 

 

 

5,950

 

Net operating loss carryforward

 

 

19,265

 

 

 

23,406

 

Net operating loss carryforward$35,350 $57,419 

Accruals, reserves and other

 

 

97,590

 

 

 

88,139

 

Accruals, reserves and other39,163 167,553 

Investments in unconsolidated affiliates

 

 

—

 

 

 

83,130

 

Stock-based compensation

 

 

18,882

 

 

 

20,581

 

Lease liabilities

 

 

1,020,171

 

 

 

—

 

Lease liabilities2,714,308 1,972,343 

Long-term debt

 

 

2,022

 

 

 

—

 

Tax credits

 

 

2,600,142

 

 

 

2,926,996

 

Tax credits3,060,733 3,095,856 

 

 

3,791,075

 

 

 

3,171,699

 

 5,849,554 5,293,171 

Less: Valuation allowance

 

 

(2,469,907

)

 

 

(2,449,582

)

Less: Valuation allowance(2,735,451)(2,720,008)

 

 

1,321,168

 

 

 

722,117

 

 3,114,103 2,573,163 

Deferred tax assets – foreign:

 

 

 

 

 

 

 

 

Deferred tax assets – foreign:

Bad debt reserve

 

 

1,682

 

 

 

1,372

 

Net operating loss carryforward

 

 

140,223

 

 

 

107,308

 

Net operating loss carryforward185,936 180,143 

Accruals, reserves and other

 

 

13,112

 

 

 

18,603

 

Accruals, reserves and other15,228 17,083 

Property and equipment

 

 

10,125

 

 

 

998

 

Property and equipment27,366 17,890 

Stock-based compensation

 

 

6,487

 

 

 

5,409

 

Lease liabilities

 

 

1,213

 

 

 

—

 

Lease liabilities1,458 1,368 

 

 

172,842

 

 

 

133,690

 

 229,988 216,484 

Less: Valuation allowance

 

 

(104,149

)

 

 

(28,121

)

Less: Valuation allowance(148,811)(155,587)

 

 

68,693

 

 

 

105,569

 

 81,177 60,897 

Total deferred tax assets

 

$

1,389,861

 

 

$

827,686

 

Total deferred tax assets$3,195,280 $2,634,060 

Deferred tax liabilities – federal and state:

 

 

 

 

 

 

 

 

Deferred tax liabilities – federal and state:

Property and equipment

 

$

(1,599,948

)

 

$

(1,729,786

)

Property and equipment$(1,361,356)$(1,349,355)

Investments in unconsolidated affiliates

 

 

(496,501

)

 

 

—

 

Investments in unconsolidated affiliates(1,252,816)(1,158,342)

ROU assets

 

 

(977,870

)

 

 

—

 

ROU assets(2,570,620)(1,860,195)

Long-term debt

 

 

—

 

 

 

(3,141

)

Intangibles

 

 

(112,380

)

 

 

(90,758

)

Intangibles(141,934)(108,728)

 

 

(3,186,699

)

 

 

(1,823,685

)

 (5,326,726)(4,476,620)

Deferred tax liabilities – foreign:

 

 

 

 

 

 

 

 

Deferred tax liabilities – foreign:

Intangibles

 

 

(307,728

)

 

 

(346,539

)

Intangibles(307,522)(309,256)

ROU Assets

 

 

(1,940

)

 

 

—

 

ROU Assets(396)(1,200)

 

 

(309,668

)

 

 

(346,539

)

 (307,918)(310,456)

Total deferred tax liability

 

$

(3,496,367

)

 

$

(2,170,224

)

Total deferred tax liability$(5,634,644)$(4,787,076)

Net deferred tax liability

 

$

(2,106,506

)

 

$

(1,342,538

)

Net deferred tax liability$(2,439,364)$(2,153,016)

On December 22, 2017,


In March 2020, the U.S. government enacted comprehensive tax legislation commonly referred to as the U.S. Tax CutsCoronavirus Aid, Relief, and JobsEconomic Security Act (the “Tax“CARES Act”). was signed into law. The TaxCARES Act made broad and complex changescontains certain income tax provisions that are beneficial to the U.S.Company; namely, the relaxation of the interest expense deduction limitation for the 2019 and 2020 tax code that are generally applicableyears and the allowance of a 5-year carryback of net operating losses (“NOLs”) incurred during tax years 2018 through 2020. The Company has recorded a federal income tax receivable of $226 million to reflect the carryback of its 2020 NOL. Furthermore, since the NOL was carried back to tax years beginning after December 31, 2017. The Company’s accounting for certain elements ofwhen the Tax Actfederal income tax rate was incomplete as of December 31, 2017. Consequently,35%, compared to the 21% rate currently in effect, the Company recorded non-cashrealized $90 million more income tax expense totaling $20 million duringbenefit than if it would have only been able to carry the measurement period in 2018, as it adjusted its valuation allowance on its foreign tax credit (FTC) carryovers to account for guidance clarifying the treatment of FTCs resulting from Global Intangible Low-Taxed Income (GILTI) and other provisions impacting FTC utilization. These measurement period adjustments increased the Company’s effective tax rate by 3% during the year ended December 31, 2018. In addition, the Company finalized its accounting for the tax treatment of indirect costs of providing certain employee fringe benefits subject to limitation under the Tax Act. This measurement period adjustment had an immaterial impact on the effective tax rate for the year ended December 31, 2018.  The Company’s accounting for the impact of the Tax Act is complete.  

The Company has made an accounting policy decision to treat taxes due, if any, on future inclusions in U.S. taxable income under the GILTI provisions as a current period expense when incurred. Accordingly, the Company has not provided a deferred tax liability for any GILTI taxes that may result in future periods.

NOL forward.


The Company has recorded a valuation allowance of $2.47$2.7 billion on its FTCforeign tax credit (“FTC”) carryover of $2.6$3.1 billion as of December 31, 2019,2021, resulting in an FTC net deferred tax asset of $133$332 million. The FTCs are attributable to the Macau Special Gaming Tax, which is 35% of gross gaming revenue in Macau. Because MGM Grand Paradise is presently exempt from the Macau 12% complementary tax on gaming profits, the Company believes that payment of the Macau Special Gaming Tax qualifies as a tax paid in lieu of an income tax that is creditable against U.S. taxes. While the Company generally does not expect to generate new FTC carryovers underafter the Tax Act,year ended December 31, 2017, it will be able to utilize its existing FTC carryovers to the extent that it has active foreign source income during the 10-year FTC carryforward period. Such foreign source income includes the recapture, to the extent of 50% of U.S. taxable income each year, of overall domestic losses that totaled $87 million$1.3 billion at December 31, 2019.2021. The Company relies on future U.S. source
89

operating income in assessing utilization of the overall domestic losses and, by extension, future FTC realization during the 10-year FTC carryover period. The FTC carryovers will expire if not utilized as follows: $319$297 million in 2022; $976 million in 2023; $773$780 million in 2024; $333$674 million in 2025; and $199$134 million in 2026; and $200 million in 2027.


The Company’s assessment of the realization of its FTC deferred tax asset is based on available evidence, including assumptions concerning future U.S. operating profits and foreign source income. As a result, significant judgment is required in assessing the possible need for a valuation allowance and changes to such assumptions could result in a material change in the valuation allowance with a corresponding impact on the provision for income taxes in the period including such change.


On March 30, 2020, MGM Grand Paradise has beenwas granted an extension of its exemption from the Macau 12% complementary tax on gaming profits through March 31, 2020.June 26, 2022, concurrent with the end of the term of its current gaming subconcession. Absent thisthe exemption from complementary tax on gaming profits, “Net income attributable to MGM Resorts International” would have decreased by $54 million and $43$10 million in 20192021 and 2018, respectively,increased by $4 million in 2020 and diluted earnings per share would have decreased by $0.10$0.02 in 2021 and $0.08 in 2019 and 2018, respectively.

Given the Extension Agreement entered into during the first quarter, MGM Grand Paradise has applied for an extension of the gaming profits complementary tax exemption to June 26, 2022increased by $0.01 to run concurrent with its extended sub-concession. Competitors of MGM Grand Paradise have received additional extensions of their complementary tax exemptions through June 26, 2022, which runs concurrent with the end of the term of their gaming concessions.in 2020. The Company believes MGM Grand Paradise should also be entitledcontinues to such extension in order to ensure non-discriminatory treatment among gaming concessionaires and sub-concessionaires, a requirement under Macanese law. Based upon these developments, the Company during the first quarter re-measured the net deferred tax liability of MGM Grand Paradise assuming that it will receive an additional extension of its complementary tax exemption through June 26, 2022. This change in assumption resulted in a net increase in deferred tax liabilities in the amount of $35 million, due to an increase in the valuation allowance on certain net operating loss deferred tax assets partially offset by a reduction in certain intangible deferred tax liabilities, and a corresponding increase in the provision for income taxes for the year ended December 31, 2019. The Company has assumedassume that MGM Grand Paradise will pay the Macau 12% complementary tax on gaming profits for all periods beyond June 26, 2022 and has factored that assumption into the measurement of Macau deferred tax assets and liabilities.


Non-gaming operations remain subject to the Macau complementary tax. At December 31, 2021, MGM Grand Paradise had at December 31, 2019 a complementary tax net operating lossNOL carryforward of $1.15$1.5 billion resulting from non-gaming operations that will expire if not utilized against non-gaming income in years 20202022 through 2022.

2024.


MGM Grand Paradise’s exemption from the 12% complementary tax on gaming profits does not apply to dividend distributions of such profits to MGM China. However,On July 26, 2021, MGM Grand Paradise has had anextended its agreement with the Macau government to settle the 12% complementary tax that would otherwise be due by its shareholder, MGM China, on distributions of its gaming profits by paying a flat annual payment (“annual fee arrangement”) regardless of the amount of distributable dividends. On March 15, 2018, MGM Grand Paradise executed anThe extension of the annual fee arrangement, which covers the distributions of gaming profits earned for the period of JanuaryApril 1, 20172020 through March 31, 2020. ItJune 26, 2022. The agreement requires annual payments of approximately $1 million for 2017the period April 1, 2020 through 2019December 31, 2020, $2 million for January 1, 2021 through December 31, 2021, and a payment of approximately $300,000$1 million for the first quarter 2020.period January 1, 2022 through June 26, 2022. The Company reversed, during 2018, $41recorded $3 million of deferred taxes previously recorded on 2017 earnings that were not covered by an annual fee arrangement prior to the extension, resulting in a reduction in provision for income taxes fortax expense during the year ended December 31, 2018, partially offset by2021 under the 2017 annual payment amount. MGM Grand Paradise has applied for an extension of the annual fee arrangement to cover distributions of gaming profits to be earned through June 26, 2022.extension.

The Company has net operating lossesNOLs in certain of the states in which it operates that total $291$536 million as of December 31, 2019,2021, which equates to deferred tax assets of $19$35 million after federal tax effect and before valuation allowance. These net operating lossThe majority of these NOL carryforwards will expire if not utilized by 20302025 through 2037.2040 with the remaining being carried forward indefinitely. The Company has provided a valuation allowance of $3$6 million on certain of its state deferred tax assets, including the net operating lossesa portion of NOLs described above.


In addition, there is a valuation allowance of $102$146 million on certain Macau deferred tax assets, and a valuation allowance of $3 million on Hong Kong net operating lossesNOLs because the Company believes these assets do not meet the “more likely than not” criteria for recognition.



A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits is as follows:

Year Ended December 31,

Year Ended December 31,

 

 2021 2020 2019

(In thousands)

 

 (In thousands)

Gross unrecognized tax benefits at January 1

$

24,464

 

 

$

18,588

 

 

$

14,026

 

Gross unrecognized tax benefits at January 1$35,617 $33,298 $24,464 

Gross increases - prior period tax positions

 

8,960

 

 

 

5,345

 

 

 

—

 

Gross increases - prior period tax positions12,949 3,717 8,960 

Gross decreases - prior period tax positions

 

(1,006

)

 

 

(957

)

 

 

(2,280

)

Gross decreases - prior period tax positions(13,388)(1,398)(1,006)

Gross increases - current period tax positions

 

880

 

 

 

1,488

 

 

 

6,842

 

Gross increases - current period tax positions654 — 880 
Settlements with Taxing Authorities Settlements with Taxing Authorities(16,264)— — 

Gross unrecognized tax benefits at December 31

$

33,298

 

 

$

24,464

 

 

$

18,588

 

Gross unrecognized tax benefits at December 31$19,568 $35,617 $33,298 


The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $9$11 million and $13$9 million at December 31, 20192021 and 2018,2020, respectively.


The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense, which were not material asfor each of December 31, 2019, 2018 or 2017. The Company does not anticipate that the total amounts of unrecognized tax benefits at December 31, 2019 will change materially within the next twelve months.

periods presented.


90

The Company files income tax returns in the U.S. federal jurisdiction, various state and local jurisdictions, and foreign jurisdictions, although the income taxes paid in foreign jurisdictions are not material. As of December 31, 2019,2021, the IRS can generally no longer assess tax with respect to years ended prior to 2014; however,2016. During the twelve months ended December 31, 2021, the Company reached a settlement with the IRS may adjust NOLs generated in such years that were utilized in 2014. The Company’sAppeals Office on the examination of its 2014 U.S. consolidated federal income tax return is currently under examination byreturn. No cash tax payments were due as a result of the IRS.

settlement.


As of December 31, 2019,2021, other than adjustments resulting from the federal and state income tax audits discussed above,herein, the various state and local tax jurisdictions in which the Company files tax returns can no longer assess tax with respect to years ended prior to 2014.2016. However, such state and local tax jurisdictions may adjust NOLs generated in such years that are utilized in subsequent years. The Company’s stateDuring 2021, an examination of income tax returns filed in Michigan for the tax years 2014 through 2017 are currently under examination and the Company was recently notified that the 2018 tax year will be included in the examination as well. In addition, the State of New Jersey recently opened an audit of one of the Company’s subsidiaries, Marina District Development Company, LLC, for the tax years 2015 through 2018. The examinations2018 closed with no change and an examination of the Company’s state income tax returns filed in MississippiMassachusetts for tax years 2017 and 2018 closed with no material adjustments. Additionally, the Company's income tax returns filed in New JerseyYork City for the tax years 20142017 through 2016 were completed during 2019 resulting in noare currently under examination. The Company does not anticipate any material adjustments upon resolution of this audit.

The Company received a final audit adjustments. No other state or localdetermination with respect to the examination of income tax returns filed in the state of Michigan for tax years 2014 through 2018. The Company had an informal conference with the Michigan Department of Treasury Hearings Division to contest the findings of the audit. The Hearings Division issued its decision and order and now the Company is determining its next course of action. Any final adjustments upon resolution of this matter are currently under examination.

not expected to be material.


The Company believes that it is reasonably possible that the total amounts of unrecognized tax benefits at December 31, 2021 may decrease by up to $13 million within the next twelve months on the expectation of resolution of a tax accounting method related to its customer loyalty program.

NOTE 11 – LEASES


The Company leases the land underlying certain of its properties, real estate, and various equipment under operating and, to a lesser extent, finance lease arrangements. The MGP master lease, agreement with MGPwhich is eliminatedfurther discussed in Note 18, eliminates in consolidation and, accordingly, is not included within the disclosures below; refer to Note 18 for further discussion of the master lease with MGP.

below.


Land. The Company, through MGP, is a lessee of land underlying Borgata, MGM National Harbor and a portion of the land underlying Borgata and Beau Rivage. The CompanyMGP is obligated to make lease payments through the non-cancelable term of the ground leases, which is through 20662051 for Beau Rivage, through 2070 for Borgata, and through 2082 for MGM National Harbor. Additionally, the CompanyMGM Grand Paradise has MGM Macau and MGM Cotai land concession contracts, each with an initial 25-year contract term ending in April 2031 and January 2038, respectively. The Company’s land leases are classified as operating leases.

Bellagio


Real Estate Assets. The Company leases the real estate assets.assets of Bellagio, Mandalay Bay and MGM Grand Las Vegas, and Aria (including Vdara)   Pursuantpursuant to atriple-net lease agreement between a subsidiaryagreements, which are classified as operating leases. Each of the leases obligates the Company to spend a specified percentage of net revenues at the properties on capital expenditures and that the Company comply with certain financial covenants, which, if not met, would require the Company to maintain cash security or provide one or more letters of credit in favor of the landlord in an amount equal to 1 year of rent under the Mandalay Bay and MGM Grand lease and Aria lease and 2 years of rent under the Bellagio BREIT Venture, lease. The Company was in compliance with its applicable covenants as of December 31, 2021.

Bellagio leasethe. The Company leases the real estate assets of Bellagio from the Bellagio BREIT venture. Venture. The Bellagio lease has an initial term of 30 years with two subsequent ten-year2 10-year renewal periods, exercisable at the Company’s option.The lease provides for initial annual rent of $245 millionoption, with a fixed 2% rent escalator for the first ten10 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. The Company does not considerAnnual cash rent payments for the renewal options reasonably certain of being exercised and, accordingly, has determined thethird lease termyear that commenced on December 1, 2021 increased to be 30 years. In consideration of such, Company determined that the expected lease term of 30 years to be less than 75%$255 million as a result of the economic useful live of the real estate assets of Bellagio. Further, the Bellagio BREIT Venture provided its implicit rate to the Company, with which the Company determined that the present value of the future lease payments is less than 90% of the fair market value of the Bellagio real estate assets.  Accordingly, in consideration of these lease classification tests as well as that the lease does not transfer ownership of the assets back to the Company at the end of the lease term or grant the Company a purchase option and the real estate assets have alternative uses at the end of the lease term,  the Company classified Bellagio lease as an operating lease.second 2% fixed annual escalator.



Mandalay Bay and MGM Grand Las Vegas real estate assets. leaseIn February 2020, the. The Company entered into a lease with MGP BREIT Venture forleases the real estate assets of Mandalay Bay and MGM Grand Las Vegas. ReferVegas from MGP BREIT Venture. The Mandalay Bay and MGM Grand Las Vegas lease has an initial term of 30 years with 2 10-year renewal periods, exercisable at the Company’s option, with a fixed 2% rent escalator for the first 15 years and, thereafter, an escalator equal to Notethe greater of 2% and the CPI increase during the prior year, subject to a cap of 3%. Annual cash rent payments for the second lease year that commenced on March 1, for further discussion.2021 increased to $298 million as a result of the first 2% fixed annual escalator.

91

Aria lease. The Company is still assessingleases the accounting treatmentreal estate assets of Aria (including Vdara) from funds managed by Blackstone. The Aria lease has an initial term of 30 years with 3 10-year renewal periods, exercisable at the Company's option, with a fixed 2% rent escalator for this subsequent event, includingthe 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%. Annual cash rent payments for the first lease year that of the lease agreement.commenced on September 28, 2021 was $215 million.


Other information. Components of lease costs and other information related to the Company’s leases waswas:
 Year Ended December 31,
 2021 20202019
 (In thousands)
Operating lease cost, primarily classified within "General and administrative"(1)
$870,779 $751,002 $143,954 
 
Finance lease costs
Interest expense(2)
$2,354 $(21,320)$1,164 
Amortization expense73,475 70,476 13,341 
Total finance lease costs$75,829 $49,156 $14,505 

(1)The Bellagio lease and the Mandalay Bay and MGM Grand Las Vegas lease are held with related parties, as followsfurther discussed in Note 18. Operating lease cost includes $331 million for each of the years ended December 31, 2021 and 2020, and $42 million for the year ended December 31, 2019:2019, related to the Bellagio lease. Operating lease cost includes $395 million, $347 million, and $0 for the years ended December 31, 2021, 2020, and December 31, 2019, respectively, related to the Mandalay Bay and MGM Grand Las Vegas lease.

 

(In thousands)

 

 

Operating lease expense cost, primarily classified within "General and administrative"

$

143,954

 

 

 

 

 

 

 

Finance Lease Costs

 

 

 

 

Interest expense

$

1,164

 

 

Amortization expense

 

13,341

 

 

Total finance lease costs

$

14,505

 

 

(2)For the years ended December 31, 2021 and 2020, interest expense includes the effect of COVID-19 related rent concessions, which was recognized as negative variable rent expense.

 

December 31, 2019

 

 

Supplemental balance sheet information

(In thousands)

 

 

Operating leases

 

 

 

 

Operating lease right-of-use assets

$

4,392,481

 

 

Operating lease liabilities - short-term, classified within "Other accrued liabilities"

$

67,473

 

 

Operating lease liabilities - long-term

 

4,277,970

 

 

Total operating lease liabilities

$

4,345,443

 

 

 

 

 

 

 

Finance leases

 

 

 

 

Finance lease right-of-use assets, classified within "Property and equipment, net"

$

93,437

 

 

Finance lease liabilities - short-term, classified within "Other accrued liabilities"

$

27,975

 

 

Finance lease liabilities - long-term, classified within "Other long-term obligations"

 

67,182

 

 

Total finance lease liabilities

$

95,157

 

 

 

 

 

 

 

Weighted-average remaining lease term (years)

 

 

 

 

Operating leases

 

31

 

 

Finance leases

 

4

 

 

 

 

 

 

 

Weighted-average discount rate (%)

 

 

 

 

Operating leases

 

7

 

 

Finance leases

 

3

 

 


 

Year Ended

 

 

 

December 31, 2019

 

 

Cash paid for amounts included in the measurement of lease liabilities

(In thousands)

 

 

Operating cash outflows from operating leases

$

117,072

 

 

Operating cash outflows from finance leases

 

1,164

 

 

Financing cash outflows from finance leases

 

10,311

 

 

 

 

 

 

 

ROU assets obtained in exchange for new lease liabilities

 

 

 

 

Operating leases

$

3,814,115

 

 

Finance leases

 

84,934

 

 



 December 31,
 20212020
Supplemental balance sheet information(In thousands)
Operating leases  
Operating lease right-of-use assets, net(1)
$11,492,805$8,286,694
Operating lease liabilities - current, classified within "Other accrued liabilities"
$31,706$31,843
Operating lease liabilities - long-term(2)
11,802,4648,390,117
Total operating lease liabilities$11,834,170$8,421,960
 
Finance leases
Finance lease right-of-use assets, net, classified within "Property and equipment, net"
$151,909$200,980
Finance lease liabilities - current, classified within "Other accrued liabilities"
$87,665$80,193
Finance lease liabilities - long-term, classified within "Other long-term obligations"
75,560134,287
Total finance lease liabilities$163,225$214,480
 
Weighted average remaining lease term (years)
Operating leases2930
Finance leases23
 
Weighted average discount rate (%)
Operating leases7 8 
Finance leases3 3 


(1)As of December 31, 2021 and 2020, operating lease right-of-use assets, net included $3.6 billion and $3.7 billion related to the Bellagio lease, respectively and $4.0 billion related to the Mandalay Bay and MGM Grand Las Vegas lease for each of the respective periods.
(2)As of December 31, 2021 and 2020, operating lease liabilities – long-term included $3.8 billion related to the Bellagio lease for each of the respective periods, and $4.2 billion and $4.1 billion related to the Mandalay Bay and MGM Grand Las Vegas lease, respectively.

92


 Year Ended December 31,
 2021 20202019
Cash paid for amounts included in the measurement of lease liabilities(In thousands)
Operating cash outflows from operating leases$669,681 $572,186 $117,072 
Operating cash outflows from finance leases4,761 2,956 1,164 
Financing cash outflows from finance leases(1)
73,257 34,494 10,311 
 
ROU assets obtained in exchange for new lease liabilities
Operating leases$3,388,120 $4,120,955 $3,814,115 
Finance leases24,433 177,085 84,934 

(1)Included within “Other” within cash flows from financing activities on the consolidated statements of cash flows.

Maturities of lease liabilities were as follows:

Operating Leases

 

 

Finance Leases

 

 Operating Leases Finance Leases

Year ending December 31,

(In thousands)

 

Year ending December 31,(In thousands)

2020

$

345,678

 

 

$

30,361

 

2021

 

324,281

 

 

 

27,273

 

2022

 

313,779

 

 

 

25,427

 

2022$838,062 $90,633 

2023

 

316,336

 

 

 

17,019

 

2023850,305 73,568 

2024

 

320,642

 

 

 

—

 

2024862,796 1,747 
20252025876,046 1,253 
20262026885,863 24 

Thereafter

 

10,066,850

 

 

 

—

 

Thereafter26,660,145 — 

Total future minimum lease payments

 

11,687,566

 

 

 

100,080

 

Total future minimum lease payments30,973,217 167,225 

Less: Amount of lease payments representing interest

 

(7,342,123

)

 

 

(4,923

)

Less: Amount of lease payments representing interest(19,139,047)(4,000)

Present value of future minimum lease payments

 

4,345,443

 

 

 

95,157

 

Present value of future minimum lease payments11,834,170 163,225 

Less: Current portion

 

(67,473

)

 

 

(27,975

)

Less: Current portion(31,706)(87,665)

Long-term lease obligations

$

4,277,970

 

 

$

67,182

 

Long-term portion of lease liabilitiesLong-term portion of lease liabilities$11,802,464 $75,560 


NOTE 12 – COMMITMENTS AND CONTINGENCIES

October 1 litigation.

The Company and/or certain of its subsidiaries were named as defendants in a number of lawsuits related to the October 1, 2017 shooting in Las Vegas. The matters involve in large degree the same legal and factual issues, each case being filed on behalf of individuals who are seeking damages for emotional distress, physical injury, medical expenses, economic damages and/or wrongful death. Lawsuits were first filed in October 2017 and include actions originally filed in the District Court of Clark County, Nevada and in the Superior Court of Los Angeles County, California. In June 2018, the Company removed to federal court all actions that remained pending in California and Nevada state courts. The Company also initiated declaratory relief actions in federal courts in various districts against individuals who had sued or stated an intent to sue
.Litigation

In connection with the mediation of these matters, the Company and law firms representing plaintiffs in the majority of pending matters and purporting to represent substantially all claimants known to the Company (collectively, the “Claimants”) have entered into a settlement agreement (the “Settlement Agreement”) whereby, subject to the satisfaction of certain monetary and non-monetary conditions, the Company’s insurance carriers will deposit funds into a settlement fund covering the plaintiffs and certain other cases that emerged or were filed prior to October 1, 2019. Pursuant to the terms of the Settlement Agreement, the Company expects that the total amount placed in the fund to be between $735 million and $800 million, subject to and depending on obtaining a minimum level of participation with escalators based on greater participation increasing the amount payable up to $800 million in the event of 100% participation by certain categories of claimants, as defined in the Settlement Agreement. The Company has $751 million of insurance coverage available to fund. Following the mediation a few additional lawsuits were filed against the Company and/or certain of its subsidiaries. While it is possible that these lawsuits may be resolved as part of the Settlement Agreement, no assurances can be made that they will be included. Although the Company continues to believe it is not legally responsible for the perpetrator’s criminal acts, in the interest of avoiding protracted litigation and the related impact on the community, the Company believed it was in the best interests of all parties involved to negotiate and enter into the Settlement Agreement. As a result of the foregoing, the Company believes that it is probable a loss will be incurred and, as of December 31, 2019, the Company accrued a liability of $735 million, which represents the low end of the range of probable loss. In addition, the Company recorded an insurance receivable of $735 million, which represents the entire amount of the liability recorded for the settlement of these cases. While the Company intends for substantially all claimants to be covered by the Settlement Agreement, it remains possible that certain claimants may not join the settlement. In addition, no assurances can be given that the significant conditions to the Settlement Agreement will be satisfied by the Claimants.


If the conditions in the Settlement Agreement are not satisfied and the mediation stay is lifted, the Company is currently unable to reliably predict the future developments in, outcome of, and economic costs and other consequences of any such litigation related to this matter. The Company will continue to investigate the factual and legal defenses, and evaluate these matters based on subsequent events, new information and future circumstances. The Company intends to defend against any such lawsuits and believes it ultimately should prevail, but litigation of this type is inherently unpredictable. Although there are significant procedural, factual and legal issues to be resolved that could significantly affect the Company’s belief as to the possibility of liability, the Company currently believes that it is reasonably possible that it could incur liability in connection with certain of these lawsuits. The foregoing determination was made in accordance with generally accepted accounting principles, as codified in ASC 450-20, and is not an admission of any liability on the part of the Company or any of its affiliates. Given that these cases would be in the early stages, and in light of the uncertainties surrounding them, the Company does not currently possess sufficient information to determine a range of reasonably possible liability. The insurance carriers have not expressed a reservation of rights or coverage defense that affects the Company’s evaluation of potential losses in connection with these claims. The Company’s general liability insurance coverage provides, as part of the contractual “duty to defend”, payment of legal fees and associated costs incurred to defend covered lawsuits that are filed arising from the October 1, 2017 shooting in Las Vegas. Payment of such fees and costs is in addition to (and not limited by) the limits of the insurance policies and does not erode the total liability coverage available.

Other litigation. The Company is a party to various legal proceedings, most of which relate to routine matters incidental to its business. Management does not believe that the outcome of such proceedings will have a material adverse effect on the Company’s financial position, results of operations or cash flowsflows.

.

Borgata property tax reimbursement agreement.

In 2017, Borgata was reimbursed $72 million as settlement for property tax refunds in satisfaction of New Jersey Tax Court and Superior Court judgments of pending tax appeals. The Company recorded the amounts received as an offset to general and administrative expenses in the consolidated statements of operations. As required by the agreement to acquire Borgata from Boyd Gaming in August 2016, the Company paid Boyd Gaming half of the settlement amount received by the Company, net of fees and expenses, which was recorded in general and administrative expenses in the consolidated statements of operations.

Other guarantees. The Company and its subsidiaries are party to various guarantee contracts in the normal course of business, which are generally supported by letters of credit issued by financial institutions. The Company’s senior credit facility limits the amount of letters of credit that can be issued to $500 million and the Operating Partnership’s senior credit facility limits the amount to $75 million.$1.35 billion. At December 31, 2019, $112021, $33 million in letters of credit were outstanding under the Company’s senior credit facility. NaNThe Operating Partnership’s senior credit facility limits the amount of letters of credit that can be issued to $75 million. No letters of credit were outstanding under the Operating Partnership’s senior credit facility at December 31, 2019.2021. The amount of available borrowings under each of the credit facilities is reduced by any outstanding letters of credit.


MGM China bank guarantee.In connection with the Extension Agreement,extension of the expiration of the gaming subconcession to June 2022, MGM Grand Paradise provided a bank guarantee in an amount of approximately $102 million (when giving effect to foreign currency exchange rate fluctuations) to the government of Macau in May 2019 to warrant the fulfillment of an existing commitment of labor debtsliabilities upon the expiration of the Extension Agreementgaming subconcession in June 2022.

Additionally, The amount of the bank guarantee was approximately $102 million as of December 31, 2021 when giving effect to foreign currency exchange rate fluctuations.


Bellagio BREIT Venture shortfall guarantee.The Company provides a shortfall guarantee of the $3.01 billion principal amount of indebtedness (and any interest accrued and unpaid thereon) of Bellagio BREIT Venture, which matures in 2029. The terms of the shortfall guarantee provide that after the lenders have exhausted certain remedies to collect on the
93

obligations under the indebtedness, the Company would then be responsible for any shortfall between the value of the collateral, which is the real estate assets of Bellagio owned by Bellagio BREIT Venture, and the debt obligation. This guarantee is accounted for under ASC 460 at fair value; such value is immaterial.

In connection with the


MGP BREIT Venture Transaction, theshortfall guarantee. The Company provides a shortfall guarantee of the $3.0 billion principal amount of indebtedness (and any interest accrued and unpaid thereon) of MGP BREIT Venture, which has an initial term of twelve12 years, maturing in 2032, with an anticipated repayment date of March 2030. The terms of the shortfall guarantee provide that after the lenders have exhausted certain remedies to collect on the obligations under the indebtedness, the Company would then be responsible for any shortfall between the value of the collateral, which is the real estate assets of Mandalay Bay and MGM Grand Las Vegas, owned by MGP BREIT Venture, and the debt obligation. Refer to Note 1This guarantee is accounted for further discussionunder ASC 460 at fair value; such value is immaterial.

MGP BREIT Venture bad acts guarantee. The Operating Partnership provides a guarantee for the losses incurred by the lenders of the indebtedness of MGP BREIT Venture arising out of certain bad acts by the Operating Partnership, its venture partner, or the venture, such as fraud or willful misconduct, based on this subsequent event.

the party’s percentage ownership of MGP BREIT Venture. This guarantee is capped at 10% of the principal amount outstanding at the time of the loss. The Operating Partnership and its venture partner have separately indemnified each other for the other party’s share of the overall liability exposure, if at fault. The guarantee is accounted for under ASC 460 at fair value; such value is immaterial.



94

NOTE 13 — STOCKHOLDERS’ EQUITY


Accumulated Other Comprehensive Income (Loss)

The following is a summary of the changesLoss


Changes in the accumulated balance of other comprehensive income (loss)loss attributable to MGM Resorts International:

 

 

Currency Translation Adjustments

 

 

Cash Flow Hedges

 

 

Other

 

 

Total

 

 

 

(In thousands)

 

Balances, January 1, 2017

 

$

12,545

 

 

$

1,434

 

 

$

1,074

 

 

$

15,053

 

Other comprehensive income (loss) before reclassifications

 

 

(43,188

)

 

 

(1,221

)

 

 

98

 

 

 

(44,311

)

Amounts reclassified from accumulated other comprehensive income to "Interest expense, net"

 

 

—

 

 

 

9,216

 

 

 

—

 

 

 

9,216

 

Other comprehensive income (loss), net of tax

 

 

(43,188

)

 

 

7,995

 

 

 

98

 

 

 

(35,095

)

Other comprehensive (income) loss attributable to noncontrolling interest

 

 

19,193

 

 

 

(2,761

)

 

 

—

 

 

 

16,432

 

Balances, December 31, 2017

 

 

(11,450

)

 

 

6,668

 

 

 

1,172

 

 

 

(3,610

)

Other comprehensive income (loss) before reclassifications

 

 

(13,022

)

 

 

4,706

 

 

 

—

 

 

 

(8,316

)

Amounts reclassified from accumulated other comprehensive loss to "Interest expense, net"

 

 

—

 

 

 

(1,130

)

 

 

—

 

 

 

(1,130

)

Other comprehensive income (loss), net of tax

 

 

(13,022

)

 

 

3,576

 

 

 

—

 

 

 

(9,446

)

Other comprehensive (income) loss attributable to noncontrolling interest

 

 

5,600

 

 

 

(1,100

)

 

 

—

 

 

 

4,500

 

Balances, December 31, 2018

 

 

(18,872

)

 

 

9,144

 

 

 

1,172

 

 

 

(8,556

)

Other comprehensive income (loss) before reclassifications

 

 

28,870

 

 

 

(28,783

)

 

 

—

 

 

 

87

 

Amounts reclassified from accumulated other comprehensive loss to "Interest expense, net"

 

 

—

 

 

 

(5,599

)

 

 

—

 

 

 

(5,599

)

Amounts reclassified from accumulated other comprehensive loss related to de-designation of interest rate swaps to "Other, net"

 

 

—

 

 

 

4,877

 

 

 

—

 

 

 

4,877

 

Other comprehensive income (loss), net of tax

 

 

28,870

 

 

 

(29,505

)

 

 

—

 

 

 

(635

)

Other changes in accumulated other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Empire City MGP transaction

 

 

—

 

 

 

—

 

 

 

195

 

 

 

195

 

MGP Class A share issuances

 

 

—

 

 

 

—

 

 

 

1,512

 

 

 

1,512

 

Park MGM Transaction

 

 

—

 

 

 

—

 

 

 

16

 

 

 

16

 

Northfield OpCo transaction

 

 

—

 

 

 

—

 

 

 

(2

)

 

 

(2

)

Other

 

 

—

 

 

 

—

 

 

 

481

 

 

 

481

 

Changes in accumulated other comprehensive income (loss)

 

 

28,870

 

 

 

(29,505

)

 

 

2,202

 

 

 

1,567

 

Other comprehensive (income) loss attributable to noncontrolling interest

 

 

(12,745

)

 

 

9,532

 

 

 

—

 

 

 

(3,213

)

Balances, December 31, 2019

 

$

(2,747

)

 

$

(10,829

)

 

$

3,374

 

 

$

(10,202

)

International are as follows:


 Currency Translation AdjustmentsCash Flow HedgesOtherTotal
 (In thousands)
Balances, January 1, 2019$(18,872)$9,144 $1,172 $(8,556)
Other comprehensive income (loss) before reclassifications28,870 (28,783)— 87 
Amounts reclassified from accumulated other comprehensive loss to interest expense— (5,599)— (5,599)
Amounts reclassified from accumulated other comprehensive loss related to de-designation of interest rate swaps to "Other, net"— 4,877 — 4,877 
Other comprehensive income (loss), net of tax28,870 (29,505)— (635)
Other changes in accumulated other comprehensive loss:
Empire City MGP transaction— — 195 195 
MGP Class A share issuances— — 1,512 1,512 
Park MGM Transaction— — 16 16 
Northfield transaction— — (2)(2)
Other— — 481 481 
Changes in accumulated other comprehensive loss28,870 (29,505)2,202 1,567 
Other comprehensive (income) loss attributable to noncontrolling interest(12,745)9,532 — (3,213)
Balances, December 31, 2019(2,747)(10,829)3,374 (10,202)
Other comprehensive income (loss) before reclassifications27,762 (94,740)— (66,978)
Amounts reclassified from accumulated other comprehensive loss to interest expense— 17,922 — 17,922 
Amounts reclassified from accumulated other comprehensive loss to "Other, net"— (2,547)— (2,547)
Other comprehensive income (loss), net of tax27,762 (79,365)— (51,603)
Other changes in accumulated other comprehensive loss:
MGP Class A share issuances— — 646 646 
MGP BREIT Venture Transaction— — (59)(59)
Redemption of Operating Partnership units— — 8,773 8,773 
Other— — (1,018)(1,018)
Changes in accumulated other comprehensive loss27,762 (79,365)8,342 (43,261)
Other comprehensive (income) loss attributable to noncontrolling interest(12,051)34,837 — 22,786 
Balances, December 31, 202012,964 (55,357)11,716 (30,677)
Other comprehensive income (loss) before reclassifications(24,655)12,588 — (12,067)
Amounts reclassified from accumulated other comprehensive loss to interest expense— 22,200 — 22,200 
Other comprehensive income (loss), net of tax(24,655)34,788 — 10,133 
Other changes in accumulated other comprehensive loss
MGP Class A share issuances— — 3,240 3,240 
Redemption of Operating Partnership units— — 5,327 5,327 
Other— — (2,358)(2,358)
Changes in accumulated other comprehensive loss(24,655)34,788 6,209 16,342 
Other comprehensive (income) loss attributable to noncontrolling interest10,784 (21,065)— (10,281)
Balances, December 31, 2021$(907)$(41,634)$17,925 $(24,616)

At December 31, 2021, the estimated amount currently recorded in accumulated other comprehensive loss that will be recognized in earnings over the next 12 months is not material.

95

Noncontrolling interest


The following is a summary of net income attributable to MGM Resorts International and transfers to noncontrolling interest, which shows the effects of changes in the Company’s ownership interest in a subsidiary on the equity attributable to the Company:

 

For the Years Ended December 31,

 

 

2019

 

 

2018

 

 

2017

 

 For the Years Ended December 31,

 

(In thousands)

 

 202120202019

Net income attributable to MGM Resorts International

 

$

2,049,146

 

 

$

466,772

 

 

$

1,952,052

 

(In thousands)
Net income (loss) attributable to MGM Resorts InternationalNet income (loss) attributable to MGM Resorts International$1,254,370 $(1,032,724)$2,049,146 

Transfers from/(to) noncontrolling interest:

 

 

 

 

 

 

 

 

 

 

 

 

Transfers from/(to) noncontrolling interest:
Empire City MGP transactionEmpire City MGP transaction— — (18,718)

MGP Class A share issuances

 

 

151,976

 

 

 

—

 

 

 

35,138

 

MGP Class A share issuances103,174 64,834 151,976 

MGM National Harbor transaction

 

 

—

 

 

 

—

 

 

 

(12,497

)

Empire City MGP transaction

 

 

(18,718

)

 

 

—

 

 

 

—

 

Park MGM Transaction

 

 

(1,968

)

 

 

—

 

 

 

—

 

Park MGM Transaction— — (1,968)

Northfield OpCo transaction

 

 

21,679

 

 

 

—

 

 

 

—

 

Northfield transactionNorthfield transaction— — 21,679 
MGP BREIT Venture TransactionMGP BREIT Venture Transaction— (6,562)— 
Redemption of Operating Partnership unitsRedemption of Operating Partnership units176,659 92,632 — 

Other

 

 

(935

)

 

 

(5,667

)

 

 

(2,889

)

Other(5,062)(1,759)(935)

Net transfers from/(to) noncontrolling interest

 

 

152,034

 

 

 

(5,667

)

 

 

19,752

 

Change from net income attributable to MGM Resorts International and transfers to noncontrolling interest

 

$

2,201,180

 

 

$

461,105

 

 

$

1,971,804

 

Net transfers from noncontrolling interestNet transfers from noncontrolling interest274,771 149,145 152,034 
Change from net income (loss) attributable to MGM Resorts International and transfers to noncontrolling interestChange from net income (loss) attributable to MGM Resorts International and transfers to noncontrolling interest$1,529,141 $(883,579)$2,201,180 


Noncontrolling interest ownership transactions

MGP Class A share issuance – September 2017.

On September 11, 2017, MGP completed a public offering of 13.2 million of its Class A shares. In connection with the offering, the Operating Partnership issued 13.2 million Operating Partnership units to MGP. The Company has adjusted the carrying value of the noncontrolling interests as a result of MGP’s Class A share issuance to adjust for the change in noncontrolling interests ownership percentage of the Operating Partnership's net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to MGP’s issuance of the incremental shares, the Company indirectly owned 72.3% of partnership units in the Operating Partnership.E

MGM National Harbor transaction. On October 15, 2017, MGP acquired the long-term leasehold interest and real property associated with MGM National Harbor from a subsidiary of the Company in exchange for cash of $463 million, the assumption of $425 million of indebtedness, which was immediately repaid by MGP on the closing date, and the issuance of 9.8 million Operating Partnership units to a subsidiary of the Company. The Company adjusted the carrying value of noncontrolling interests to adjust for the change in noncontrolling interests ownership percentage of the Operating Partnership’s net assets, including assets and liabilities transferred, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to the MGM National Harbor transaction, the Company indirectly owned 73.4% of the partnership units in the Operating Partnership.

Empire City MGP transaction. As further discussed in Note 18, inon January 29, 2019, MGP acquired the developed real property associated with Empire City from the Company for consideration that included the issuance of approximately 13 million Operating Partnership units to a subsidiary of the Company. The Company adjusted the carrying value of the noncontrolling interests for the change in noncontrolling interestsinterests’ ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to the Empire City MGP transaction, the Company indirectly owned 74.6% of the partnership units in the Operating Partnership.

MGP Class A share issuance – January 2019. On January 31, 2019, MGP completed an offering of approximately 20 million of its Class A shares. In connection with the offering, the Operating Partnership issued approximately 20 millionan equal amount of Operating Partnership units to MGP. The Company has adjusted the carrying value of the noncontrolling interests as a result of MGP’s Class A share issuance to adjust for the change in noncontrolling interestsinterests’ ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to the issuance, the Company indirectly owned 69.7% of the partnership units in the Operating Partnership.

Park MGM Lease Transaction. As further discussed in Note 18, inon March 7, 2019, the Company andentered into an amendment to the MGP completedmaster lease with respect to improvements made by the Company related to the rebranding of the Park MGM Lease Transaction (as defined in Note 18)and NoMad Las Vegas property (the “Park MGM Transaction”) for which consideration included the issuance of approximately 1 million Operating Partnership units to a subsidiary of the Company. The Company has adjusted the carrying value of the noncontrolling interests for the change in noncontrolling interestsinterests’ ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to the issuance, the Company indirectly owned 69.8% of the partnership units in the Operating Partnership.


Northfield OpCo transaction. As further discussed in Note 18, in April 2019, the Company acquired the membership interests of Northfield from MGP for consideration of approximately 9 million Operating Partnership units that were ultimately redeemed by the Operating Partnership and MGP retained the real estate assets. The Company has adjusted the carrying value of the noncontrolling interests for the change in noncontrolling interestsinterests’ ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to the Northfield OpCo transaction, the Company indirectly owned 68.8% of the partnership units in the Operating Partnership.


96

MGP Class A share issuances – At-the-Market (“ATM”) program. During the year ended December 31, 2019, MGP issued approximately 5 million Class A shares under its ATM program. In connection with the issuances, the Operating Partnership issued an equal amount of Operating Partnership units to MGP during the year ended December 31, 2019. The Company adjusted the carrying value of the noncontrolling interests for the change in noncontrolling interests’ ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to the collective issuances, the Company indirectly owned 67.6% of the partnership units in the Operating Partnership.
MGP Class A share issuance – November 2019. On November 22, 2019, MGP completed an offering of 30 million of its Class A shares. The Offeringoffering consisted of 18 million shares sold directly to the underwriters at closing and 12 million shares sold to forward purchasers under forward sale agreements. In connection with the offering, the Operating Partnership issued 18 million Operating Partnership units to MGP. The Company has adjusted the carrying value of the noncontrolling interests as a result of MGP’s Class A share issuance to adjust for the change in noncontrolling interestsinterests’ ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to the issuance, the Company indirectly owned 63.7% of the partnership units in the Operating Partnership.

In connection with any issuance ofMGP Class A shares byshare issuance – Forward settlements. On February 11, 2020 through February 13, 2020, MGP under the forward sales agreements, additional Operating Partnership units will be issued to the Company by the Operating Partnership on a one-to-one basis with the number ofsettled approximately 13 million Class A shares issued by MGPunder forward sales agreements from MGP's November 2019 offering and under MGP's ATM program. In connection with the settlements, the Operating Partnership issued an equal amount of Operating Partnership units to MGP. The Company adjusted the carrying value of the noncontrolling interests for the change in such sales.noncontrolling interests’ ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to the settlements, the Company indirectly owned 61.2% of the partnership units in the Operating Partnership.


MGP Class A share issuancesissuance – At-the-Market (“ATM”) program. BREIT.During the year ended December 31, 2019, MGP issued On February 14, 2020, in connection with MGP’s registered sale of approximately 5 million Class A shares under its ATM program. In connection with the issuances,to BREIT, the Operating Partnership issued 5 millionan equal amount of Operating Partnership units to MGP during the year ended December 31, 2019.MGP. The Company hasadjusted the carrying value of the noncontrolling interests for the change in noncontrolling interests’ ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to the issuance, the Company indirectly owned 60.3% of the partnership units in the Operating Partnership.

MGP Class A share issuance – MGP BREIT Venture Transaction. In February 2020, in connection with the MGP BREIT Venture Transaction, the Operating Partnership issued approximately 3 million Operating Partnership units to the Company as discussed in Note 1. The Company adjusted the carrying value of the noncontrolling interests for the change in noncontrolling interests’ ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to the issuance, the Company indirectly owned 60.6% of the partnership units in the Operating Partnership.

Redemption of Operating Partnership units. On May 18, 2020, the Operating Partnership redeemed approximately 30 million Operating Partnership units from the Company for $700 million pursuant to the waiver agreement discussed in Note 1. The Company adjusted the carrying value of the noncontrolling interests for the change in noncontrolling interests ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to the collective issuances, and as of December 31, 2019,redemption, the Company indirectly owned 63.7%56.7% of the partnership units in the Operating Partnership. Further, on December 2, 2020, the Operating Partnership redeemed approximately 24 million Operating Partnership units from the Company for

Stock repurchase$700 million pursuant to the waiver agreement discussed in Note 1. The Company adjusted the carrying value of the noncontrolling interests for the change in noncontrolling interests’ ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive income. Subsequent to the redemption and as of December 31, 2020, the Company indirectly owned 53.0% of the partnership units in the Operating Partnership.


MGP Class A share issuance – March 2021. On March 15, 2021, MGP completed an offering of 22 million of its Class A shares, the proceeds of which were used to partially satisfy MGP’s obligations pursuant to the notice of redemption delivered by certain MGM subsidiaries, discussed below. Subsequent to MGP’s Class A share issuance and the redemption of Operating Partnership units, discussed below, the Company indirectly owned 42.1% of the partnership units in the Operating Partnership.

Redemption of Operating Partnership units – March 2021. In March 2021, subsidiaries of the Company delivered a notice of redemption to MGP covering approximately 37 million Operating Partnership units that they held in accordance with the terms of the Operating Partnership’s partnership agreement. Upon receipt of the notice of redemption, MGP formed a conflicts committee to determine the mix of consideration that it would provide for the Operating
97

Partnership units. The conflicts committee determined that MGP would redeem approximately 15 million Operating Partnership units for cash (with such Operating Partnership units retired upon redemption) and would satisfy its remaining obligation under that notice covering the remaining 22 million Operating Partnership units using the proceeds, net of the underwriters’ discount, of MGP’s Class A offering, for aggregate cash proceeds received by the Company of approximately $1.2 billion. The Company adjusted the carrying value of the noncontrolling interests for the change in noncontrolling interests’ ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive loss. Subsequent to the collective transactions, the Company indirectly owned 42.1% of the partnership units in the Operating Partnership.

MGP Class A share issuances – ATM program. During the year ended December 31, 2021, MGP issued approximately 3 million Class A shares under its ATM program,

which completed its ATM program. In connection with the issuances, the Operating Partnership issued an equal amount of Operating Partnership units to MGP. The Company adjusted the carrying value of the noncontrolling interests for the change in noncontrolling interests’ ownership percentage of the Operating Partnership’s net assets, with offsetting adjustments to capital in excess of par value and accumulated other comprehensive loss. Subsequent to the collective issuances, the Company indirectly owned 41.6% of the partnership units in the Operating Partnership.

Other equity activity

MGM Resorts International dividends. On February 9, 2022 the Company’s Board of Directors approved a quarterly dividend of $0.0025 per share that will be payable on March 15, 2022 to holders of record on March 10, 2022.

MGM Resorts International stock repurchase program. In February 2020, upon substantial completion of the May 2018 $2.0 billion stock repurchase program, the Company’s Board of Directors authorized a $2.0 billion stock repurchase program and completed the previously announced $1.0 billion stock repurchase program. Additionally, on February 12, 2020, the Company announced that the Board of Directors adopted a $3.0 billion stock repurchase program. Under eachthe stock repurchase program, the Company may repurchase shares from time to time in the open market or in privately negotiated agreements. Repurchases of common stock may also be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The timing, volume and nature of stock repurchases will be at the sole discretion of management, dependent on market conditions, applicable securities laws, and other factors, and may be suspended or discontinued at any time.


During the year ended December 31, 2019, the Company repurchased approximately 36 million shares of its common stock at an average purchase price of $28.77 per share for an aggregate amount of $1.0 billion. Repurchased shares were retired. The remaining availability under the $2.0 billion stock repurchase program was approximately $357 million as of December 31, 2019.

Subsequent to


During the year ended December 31, 2019,2020, the Company repurchased approximately 11 million shares of its common stock at an average purchase price of $32.57 per share for an aggregate amount of $354 million. Repurchased shares will bewere retired.

Additionally, subsequent to the year ended December 31, 2019, on February 13, 2020, the Company announced the commencement of a tender offer to acquire up to $1.25 million in aggregate purchase price of the Company’s issued and outstanding common stock through a modified “Dutch auction” tender offer at a price not greater than $34 nor less than $29 per share, in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions described in the offer to purchase dated February 13, 2020, and in the related letter of transmittal and other related materials. The tender offer is scheduled to expire on March 12, 2020, unless extended or terminated.


During the year ended December 31, 2018,2021, the Company repurchased approximately 4143 million shares of its common stock at an average purchase price of $31.25$40.70 per share for an aggregate amount of $1.3$1.8 billion. Repurchased shares were retired.

MGM Resorts International dividends. On During the year ended December 31, 2021, the Company completed its May 2018 $2.0 billion stock repurchase program and the remaining availability under the February 12, 2020 $3.0 billion stock repurchase program was $1.3 billion as of December 31, 2021.


Subsequent to the Company’s Boardyear ended December 31, 2021, the Company repurchased approximately 15 million shares of Directors approved a quarterly dividendits common stock at an average price of $0.15$43.88 per share that will be payable on March 16, 2020 to holdersfor an aggregate amount of record on March 10, 2020.$670 million, which included the February 2022 repurchase of 4.5 million shares at a price of $45.00 per share for an aggregate amount of $202.5 million from funds managed by Corvex Management LP, a related party. Repurchased shares were retired.


NOTE 14 — STOCK-BASED COMPENSATION


MGM Resorts 2005 Omnibus Incentive Plan. The Company’s omnibus incentive plan, as amended (the “Omnibus Plan”), allows it to grant up to 45 million shares or share-based awards, such as stock options, stock appreciation rights (“SARs”), restricted stock units (“RSUs”), performance share units (“PSUs”) and other stock-based awards to eligible directors, officers and employees of the Company and its subsidiaries.


As of December 31, 2019,2021, the Company had an aggregate of approximately 20 million shares of common stock available for grant as share-based awards under the Omnibus Plan. Additionally, as of December 31, 2019,2021, the Company had approximately 41 million aggregate SARs outstanding and approximately 76 million aggregate RSUs and PSUs outstanding, including deferred share units and dividend equivalent units related to RSUs and PSUs.

Intrinsic value.

98
The following table includes information related to the intrinsic value:

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In thousands)

 

SARs exercised and RSUs and PSUs vested

 

$

86,843

 

 

$

97,302

 

 

$

100,264

 

SARs outstanding

 

 

45,197

 

 

 

21,563

 

 

 

112,604

 

SARs vested and expected to vest

 

 

45,162

 

 

 

21,547

 

 

 

111,284

 

SARs exercisable

 

 

41,432

 

 

 

19,745

 

 

 

78,865

 

As of December 31, 2019,2021, there was a total of $116$85 million of unamortized compensation related to SARs, RSUs, and PSUs, which is expected to be recognized over a weighted-averageweighted average period of 2.01.6 years.


MGM Growth Properties 2016 Omnibus Incentive Plan and MGM China Share Option Plan. The Company’s subsidiaries, MGP and MGM China, each adopted their own equity award plans for the issuance of share-based awards to each subsidiary’s eligible recipients.


Recognition of compensation cost. Compensation cost was recognized as follows:

 

Year Ended December 31,

 

 Year Ended December 31,

 

2019

 

 

2018

 

 

2017

 

 202120202019

Compensation cost:

 

(In thousands)

 

Compensation cost:(In thousands)

Omnibus Plan

 

$

76,995

 

 

$

57,735

 

 

$

49,383

 

Omnibus Plan$53,683 $93,096 $76,995 

MGM Growth Properties Omnibus Incentive Plan

 

 

2,277

 

 

 

2,092

 

 

 

2,568

 

MGM Growth Properties Omnibus Incentive Plan4,827 2,854 2,277 

MGM China Share Option Plan

 

 

9,566

 

 

 

10,369

 

 

 

10,571

 

MGM China Share Option Plan6,673 11,006 9,566 

Total compensation cost

 

 

88,838

 

 

 

70,196

 

 

 

62,522

 

Total compensation cost65,183 106,956 88,838 

Less: Reimbursed costs and capitalized cost

 

 

(3,487

)

 

 

(1,710

)

 

 

(1,398

)

Less: Reimbursed costs and capitalized cost(1,198)(2,118)(3,487)

Compensation cost after reimbursed costs and capitalized cost

 

 

85,351

 

 

 

68,486

 

 

 

61,124

 

Compensation cost after reimbursed costs and capitalized cost63,985 104,838 85,351 

Less: Related tax benefit

 

 

(16,752

)

 

 

(13,218

)

 

 

(18,650

)

Less: Related tax benefit(12,982)(20,605)(16,752)

Compensation cost, net of tax benefit

 

$

68,599

 

 

$

55,268

 

 

$

42,474

 

Compensation cost, net of tax benefit$51,003 $84,233 $68,599 


NOTE 15 — EMPLOYEE BENEFIT PLANS


Multiemployer benefit plans. The Company currently participates in multiemployer pension plans in which the risks of participating differs from single-employer plans in the following aspects:

a)

Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers;

b)

If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers;

c)

If an entity chooses to stop participating in some of its multiemployer plans, the entity may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability; and

d)

If the plan is terminated by withdrawal of all employers and if the value of the nonforfeitable benefits exceeds plan assets and withdrawal liability payments, employers are required by law to make up the insufficient difference.


The Company’s participation in these plans is presented below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EIN/Pension

 

Pension Protection Act Zone Status (2)

 

FIP/RP

 

Contributions by the Company

(in thousands)(4)

 

 

Surcharge

 

Expiration Dates of Collective Bargaining

Pension Fund(1)

 

Plan Number

 

2018

 

2017

 

Status (3)

 

2019

 

 

2018

 

 

2017

 

 

Imposed

 

Agreements

Southern Nevada Culinary and Bartenders Pension Plan

 

88-6016617/001

 

Green

 

Green

 

No

 

$

52,218

 

 

$

47,825

 

 

$

45,297

 

 

No

 

3/31/2021(5); 5/31/2023(5); 5/31/2024(5)

The Legacy Plan of the UNITE HERE Retirement Fund (UHF)(6)

 

82-0994119/001

 

Red

 

Red

 

Yes

 

$

10,151

 

 

$

9,794

 

 

$

9,416

 

 

Yes

 

2/29/2020(7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The Company was listed in the plan's Form 5500 as providing more than 5% of the total contributions for the plan years 2018 and 2017 for the Southern Nevada Culinary and Bartenders Pension Plan and for the plan year 2018 for the UHF. At the date the financial statements were issued, Form 5500 was not available for the plan year 2019.

(2)

The zone status is based on information that the Company received from the plan and is certified by the plan's actuary. Plans in the red zone are generally less than 65% funded (critical status) and plans in the green zone are at least 80% funded.

 EIN/Pension
Pension Protection Act Zone Status (2)
FIP/RP
Contributions by the Company
(in thousands)(4)
SurchargeExpiration Dates of Collective Bargaining
Pension Fund(1)
Plan Number20202019
Status (3)
202120202019ImposedAgreements
Southern Nevada Culinary and Bartenders Pension Plan88-6016617/001GreenGreenNo$37,242 $24,610 $52,218 No
05/31/2023(5); 05/31/2024(5)
The Legacy Plan of the UNITE HERE Retirement Fund (UHF)82-0994119/001RedRedImplemented$7,683 $5,151 $10,151 No5/31/2022

(3)(1)The Company was listed in the plan's Form 5500 as providing more than 5% of the total contributions for the plan years 2020 and 2019 for both plans. At the date the financial statements were issued, Form 5500 was not available for the plan year 2021.

Indicates plans for which a Financial Improvement Plan (FIP) or a Rehabilitation Plan (RP) is either pending or has been implemented.

(4)(2)The zone status is based on information that the Company received from the plan and is certified by the plan's actuary. Plans in the red zone are generally less than 65% funded (critical status) and plans in the green zone are at least 80% funded.

There have been no significant changes that affect the comparability of contributions.

(5)(3)Indicates plans for which a Financial Improvement Plan (FIP) or a Rehabilitation Plan (RP) is either pending or has been implemented.

The Company is party to 12 collective bargaining agreements (CBA) that require contributions with the Local Joint Executive Board of Las Vegas, which is made up of the Culinary Workers Union and Bartenders Union. The agreements between Aria, Bellagio, Mandalay Bay, and MGM Grand Las Vegas are the most significant because more than half of the Company’s employee participants in this plan are covered by those 4 agreements.

(6)(4)There have been no significant changes that affect the comparability of contributions.

Effective January 1, 2018, the Pension Benefit Guaranty Corporation approved the spin-off of the UNITE HERE portion of the Legacy Plan of the National Retirement Fund (NRF) to the newly formed UHF. As a result of the spin-off, the pension liabilities as well as certain assets of the plan were transferred to the new plan. The terms of the UHF plan are identical to the NRF plan.

(5)The Company is party to 11 collective bargaining agreements (CBA) that require contributions with the Local Joint Executive Board of Las Vegas, which is made up of the Culinary Workers Union and Bartenders Union. The agreements between Aria, Bellagio, Mandalay Bay, and MGM Grand Las Vegas are the most significant because more than half of the Company’s employee participants in this plan are covered by those 4 agreements.


(7)

The Company intends to extend the agreement past the expiration date until a new agreement is executed.

Multiemployer benefit plans other than pensions. Pursuant to its collective bargaining agreements referenced above, the Company also contributes to UNITE HERE Health (the “Health Fund”), which provides healthcare benefits to

99

its active and retired members. The Company contributed $206$143 million, $191$138 million, and $183$206 million to the Health Fund in the years ended December 31, 2021, 2020, and 2019, 2018, and 2017, respectively.

Self-insurance. The Company is self-insured for most health care benefits and workers compensation for its non-union employees. The liability for self-insurance was $95 million and $93 million at December 31, 2019 and 2018, respectively, which is included in “Other accrued liabilities” and “Other long-term obligations.”

NOTE 16 — PROPERTY TRANSACTIONS, NET


Property transactions, net consisted of the following:

 

Year Ended December 31,

 

 

2019

 

 

2018

 

 

2017

 

 Year Ended December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 202120202019

 

(In thousands)

 

 (In thousands)

Loss related to sale of Circus Circus Las Vegas and adjacent land

 

$

220,294

 

 

$

—

 

 

$

—

 

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

Gain on sale of Grand Victoria

 

 

—

 

 

 

(44,703

)

 

 

—

 

Other property transactions, net

 

 

55,508

 

 

 

53,850

 

 

 

50,279

 

Other property transactions, net(67,736)93,567 55,508 

 

$

275,802

 

 

$

9,147

 

 

$

50,279

 

 $(67,736)$93,567 $275,802 


Circus Circus Las Vegas and adjacent land. In December 2019, the Company completed the previously announced sale of Circus Circus Las Vegas and the adjacent land for $825 million, which consisted of $662.5$663 million paid in cash and a secured note due 2024 with a face value of $162.5$163 million and fair value of $133.7$134 million. The note has a stated interest rate of 3% for the first two years, 4% for following two years, and 4.5% for the fifth year and is secured by the borrower with the land adjacent to Circus Circus Las Vegas as collateral with an effective interest rate of 7.31%. The interest on the note, which is comprised of the stated interest and the discount on the note, will amortizeamortizes into interest income using the effective interest method over the length of the agreement. The carrying value of the note receivable was $155 million and $144 million as of December 31, 2021 and 2020, respectively, and was recorded within “Other long-term assets, net” in the consolidated balance sheets.



During the third quarter of 2019, the Company recorded a non-cash impairment charge of $219 million, which reflects the amount by which the assets’ carrying value exceeds the assets’ fair value (expected selling price). WeThe Company further recognized a loss of $2 million during the fourth quarter of 2019 primarily relating to selling costs. The assets and liabilities of Circus Circus Las Vegas and the adjacent land sold of $810 million and $14 million, respectively, primarily consisted of property and equipment, net of $785 million. Circus Circus Las Vegas iswas not classified as discontinued operations for the year ended December 31, 2019 because the Company concluded that the sale is not a strategic shift that has a major effect on the Company’s operations or its financial results and it does not represent a major geographic segment or product line.

Grand Victoria investment sale.

See Note 6 for additional information related
Other. Other property transactions, net in 2021 includes a gain of $76 million relating to the sale of Grand Victoriaart and a gain of $29 million related to a reduction in the estimate of contingent consideration related to the Empire City acquisition, partially offset by an other-than-temporary impairment charge of $22 million related to an investment in 2018.an unconsolidated affiliate, as discussed in Note 6, as well as miscellaneous asset disposals and write-downs.

Other.


Other property transactions, net in 2020 includes other-than-temporary impairment charges of $64 million related to an investment in an unconsolidated affiliate, as discussed in Note 6, a loss of $17 million related to production show costs, as well as miscellaneous asset disposals and write-downs.

Other property transactions, net for 2019 includes miscellaneous asset disposals and demolition costs in the periods presented in the above table, including a loss of $24 million related to MGM Cotai production show costs in 2018, and a loss of $20 million and $34 million related to the rebranding of the Monte Carlo Resort and Casino to Park MGM and NoMad Las Vegas in 2018 and 2017, respectively.costs.

100


NOTE 17 — SEGMENT INFORMATION


The Company’s management views each of its casino resorts as an operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, the regulatory environments in which they operate and their management and reporting structure. The Company has aggregated its operating segments into the following reportable segments: Las Vegas Strip Resorts, Regional Operations and MGM China.


Las Vegas Strip Resorts. Las Vegas Strip Resorts consists of the following casino resorts: Aria (including Vdara) (upon acquisition in September 2021), Bellagio, MGM Grand Las Vegas (including The Signature), Mandalay Bay (including Delano and Four Seasons), The Mirage, Luxor, New York-New York (including theThe Park), Excalibur, Park MGM (including NoMad Las Vegas) and Circus Circus Las Vegas (until the sale of such property in December 2019).


Regional Operations. Regional Operations consists of the following casino resorts: MGM Grand Detroit in Detroit, Michigan; Beau Rivage in Biloxi, Mississippi; Gold Strike Tunica in Tunica, Mississippi; Borgata in Atlantic City, New Jersey; MGM National Harbor in Prince George’s County, Maryland; MGM Springfield in Springfield, Massachusetts; Empire City in Yonkers, New York (upon acquisition in January 2019); and MGM Northfield Park in Northfield Park, Ohio (upon MGM’s acquisition of the operations from MGP in April 2019).


MGM China. MGM China consists of MGM Macau and MGM Cotai.


The Company’s operations related to investments in unconsolidated affiliates, MGM Northfield Park (prior to April 1, 2019 as the operations were owned by MGP until that date), and certain other corporate operations and management services have not been identified as separate reportable segments; therefore, these operations are included in “Corporate and other” in the following segment disclosures to reconcile to consolidated results.

In 2019, the Company changed its segment measure of profit and loss from Adjusted Property EBITDA to Adjusted Property EBITDAR. As discussed in Note 2, prior to the adoption of ASC 842 on January 1, 2019, the master lease between subsidiaries of the Company and MGP was accounted for as a failed sale of the real estate assets due to the subsidiaries’ investments in the Operating Partnership, which constituted continuing involvement. As such, the real estate assets were reflected in the balance sheets of the applicable MGM subsidiaries as well as the associated finance lease liability. In connection with the adoption of ASC 842, the sale and leaseback of the real estate assets under the master lease now qualify as a passed sale and are determined to be operating leases. Accordingly, the real estate assets are now only reflected on the balance sheet of MGP and the MGM subsidiaries have recorded operating lease liabilities and operating ROU assets and also now record rent expense instead of depreciation and interest expense. The master lease and its related accounting eliminates in consolidation. Further, as a result of the Bellagio transaction in the fourth quarter of 2019, the Company records rent expense associated with the triple-net operating lease with Bellagio BREIT Venture. In order to present profit and loss of each reportable segment on a similar economic basis, the rent expense associated with the triple net operating leases and ground leases is added back within the financial information reviewed by the chief operating decision maker and as presented below, including recasting of prior year periods.

Adjusted Property EBITDAR is athe Company’s reportable segment GAAP measure, definedwhich management utilizes as the primary profit measure for its reportable segments and underlying operating segments. Adjusted EBITDAR before corporate expense and stock compensation expense, which are not allocated to each operating segment, and before rent expense related to the master lease with MGP that eliminates in consolidation. AdjustedProperty 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 Bellagio transaction,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 nettriple-net operating and ground leases, income from unconsolidated affiliates related to investments in REITs, NV Energy exitreal estate ventures, property transactions, net, and 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 property transactions, net.

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.

101


The following tables present the Company’s segment information:

 

Year Ended December 31,

 

 

2019

 

 

2018

 

 

2017

 

 Year Ended December 31,

 

(In thousands)

 

 202120202019

Net Revenues

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)
Net revenueNet revenue   

Las Vegas Strip Resorts

 

 

 

 

 

 

 

 

 

 

 

 

Las Vegas Strip Resorts   

Casino

 

$

1,296,170

 

 

$

1,407,733

 

 

$

1,436,830

 

Casino$1,549,419 $728,254 $1,296,170 

Rooms

 

 

1,863,521

 

 

 

1,776,029

 

 

 

1,778,869

 

Rooms1,402,712 662,813 1,863,521 

Food and beverage

 

 

1,517,745

 

 

 

1,402,378

 

 

 

1,410,496

 

Food and beverage1,015,366 471,529 1,517,745 

Entertainment, retail and other

 

 

1,153,615

 

 

 

1,130,532

 

 

 

1,119,928

 

Entertainment, retail and other769,688 383,189 1,153,615 

 

 

5,831,051

 

 

 

5,716,672

 

 

 

5,746,123

 

 4,737,185 2,245,785 5,831,051 

Regional Operations

 

 

 

 

 

 

 

 

 

 

 

 

Regional Operations

Casino

 

 

2,537,780

 

 

 

2,026,925

 

 

 

1,834,803

 

Casino2,721,515 1,569,193 2,537,780 

Rooms

 

 

316,753

 

 

 

318,017

 

 

 

319,049

 

Rooms220,828 130,945 316,753 

Food and beverage

 

 

494,243

 

 

 

428,934

 

 

 

410,143

 

Food and beverage307,750 184,153 494,243 

Entertainment, retail and other

 

 

201,008

 

 

 

160,645

 

 

 

145,725

 

Entertainment, retail and other142,270 82,880 201,008 

 

 

3,549,784

 

 

 

2,934,521

 

 

 

2,709,720

 

 3,392,363 1,967,171 3,549,784 

MGM China

 

 

 

 

 

 

 

 

 

 

 

 

MGM China

Casino

 

 

2,609,806

 

 

 

2,195,144

 

 

 

1,741,635

 

Casino1,057,962 565,671 2,609,806 

Rooms

 

 

142,306

 

 

 

118,527

 

 

 

54,824

 

Rooms66,498 36,624 142,306 

Food and beverage

 

 

127,152

 

 

 

114,862

 

 

 

51,330

 

Food and beverage68,489 40,284 127,152 

Entertainment, retail and other

 

 

26,158

 

 

 

21,424

 

 

 

10,371

 

Entertainment, retail and other17,812 14,124 26,158 

 

 

2,905,422

 

 

 

2,449,957

 

 

 

1,858,160

 

 1,210,761 656,703 2,905,422 

Reportable segment net revenues

 

 

12,286,257

 

 

 

11,101,150

 

 

 

10,314,003

 

Reportable segment net revenues9,340,309 4,869,659 12,286,257 

Corporate and other

 

 

613,415

 

 

 

661,946

 

 

 

483,476

 

Corporate and other339,831 292,423 613,415 

 

$

12,899,672

 

 

$

11,763,096

 

 

$

10,797,479

 

 $9,680,140 $5,162,082 $12,899,672 

Adjusted Property EBITDAR

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Property EBITDAR

Las Vegas Strip Resorts

 

$

1,643,122

 

 

$

1,706,315

 

 

$

1,781,390

 

Las Vegas Strip Resorts$1,738,211 $232,188 $1,643,122 

Regional Operations

 

 

969,866

 

 

 

781,854

 

 

 

754,597

 

Regional Operations1,217,814 343,990 969,866 

MGM China

 

 

734,729

 

 

 

574,333

 

 

 

535,524

 

MGM China25,367 (193,832)734,729 

Reportable segment Adjusted Property EBITDAR

 

 

3,347,717

 

 

 

3,062,502

 

 

 

3,071,511

 

Reportable segment Adjusted Property EBITDAR2,981,392 382,346 3,347,717 

 

 

 

 

 

 

 

 

 

 

 

 

Other operating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Other operating income (expense)

Corporate and other

 

 

(331,621

)

 

 

(224,800

)

 

 

(213,908

)

NV Energy exit expense

 

 

—

 

 

 

—

 

 

 

40,629

 

Corporate and other, netCorporate and other, net(560,309)(530,843)(331,621)

Preopening and start-up expenses

 

 

(7,175

)

 

 

(151,392

)

 

 

(118,475

)

Preopening and start-up expenses(5,094)(84)(7,175)

Property transactions, net

 

 

(275,802

)

 

 

(9,147

)

 

 

(50,279

)

Property transactions, net67,736 (93,567)(275,802)

Gain on Bellagio transaction

 

 

2,677,996

 

 

 

—

 

 

 

—

 

Depreciation and amortization

 

 

(1,304,649

)

 

 

(1,178,044

)

 

 

(993,480

)

Depreciation and amortization(1,150,610)(1,210,556)(1,304,649)
Gain on REIT transactions, netGain on REIT transactions, net— 1,491,945 2,677,996 
Gain on consolidation of CityCenter, netGain on consolidation of CityCenter, net1,562,329 — — 
CEO transition expenseCEO transition expense— (44,401)— 
October 1 litigation settlementOctober 1 litigation settlement— (49,000)— 

Restructuring

 

 

(92,139

)

 

 

—

 

 

 

—

 

Restructuring— (26,025)(92,139)

Triple net operating lease and ground lease rent expense

 

 

(74,656

)

 

 

(29,633

)

 

 

(23,471

)

Income from unconsolidated affiliates related to investments in REITs

 

 

544

 

 

 

—

 

 

 

—

 

Operating income

 

 

3,940,215

 

 

 

1,469,486

 

 

 

1,712,527

 

Triple-net operating lease and ground lease rent expenseTriple-net operating lease and ground lease rent expense(833,158)(710,683)(74,656)
Gain related to sale of Harmon land - unconsolidated affiliateGain related to sale of Harmon land - unconsolidated affiliate49,755 — — 
Income from unconsolidated affiliates related to real estate venturesIncome from unconsolidated affiliates related to real estate ventures166,658 148,434 544 
Operating income (loss)Operating income (loss)2,278,699 (642,434)3,940,215 

Non-operating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating income (expense)

Interest expense, net of amounts capitalized

 

 

(847,932

)

 

 

(769,513

)

 

 

(668,745

)

Interest expense, net of amounts capitalized(799,593)(676,380)(847,932)

Non-operating items from unconsolidated affiliates

 

 

(62,296

)

 

 

(47,827

)

 

 

(34,751

)

Non-operating items from unconsolidated affiliates(83,243)(103,304)(62,296)

Other, net

 

 

(183,262

)

 

 

(18,140

)

 

 

(48,241

)

Other, net65,941 (89,361)(183,262)

 

 

(1,093,490

)

 

 

(835,480

)

 

 

(751,737

)

 (816,895)(869,045)(1,093,490)

Income before income taxes

 

 

2,846,725

 

 

 

634,006

 

 

 

960,790

 

Income (loss) before income taxesIncome (loss) before income taxes1,461,804 (1,511,479)2,846,725 

Benefit (provision) for income taxes

 

 

(632,345

)

 

 

(50,112

)

 

 

1,127,394

 

Benefit (provision) for income taxes(253,415)191,572 (632,345)

Net income

 

 

2,214,380

 

 

 

583,894

 

 

 

2,088,184

 

Less: Net income attributable to noncontrolling interests

 

 

(165,234

)

 

 

(117,122

)

 

 

(136,132

)

Net income attributable to MGM Resorts International

 

$

2,049,146

 

 

$

466,772

 

 

$

1,952,052

 

Net income (loss)Net income (loss)1,208,389 (1,319,907)2,214,380 
Less: Net (income) loss attributable to noncontrolling interestsLess: Net (income) loss attributable to noncontrolling interests45,981 287,183 (165,234)
Net income (loss) attributable to MGM Resorts InternationalNet income (loss) attributable to MGM Resorts International$1,254,370 $(1,032,724)$2,049,146 



 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

Capital expenditures:

 

(In thousands)

 

Las Vegas Strip Resorts

 

$

285,863

 

 

$

501,044

 

 

$

419,983

 

Regional Operations

 

 

187,489

 

 

 

72,865

 

 

 

66,628

 

MGM China

 

 

145,634

 

 

 

390,212

 

 

 

923,346

 

Reportable segment capital expenditures

 

 

618,986

 

 

 

964,121

 

 

 

1,409,957

 

Corporate and other

 

 

120,020

 

 

 

537,347

 

 

 

469,053

 

Eliminated in consolidation

 

 

—

 

 

 

(14,625

)

 

 

(14,928

)

 

 

$

739,006

 

 

$

1,486,843

 

 

$

1,864,082

 


102

 Year Ended December 31,
 202120202019
Capital expenditures:(In thousands)
Las Vegas Strip Resorts$266,944 $87,511 $285,863 
Regional Operations77,406 41,456 187,489 
MGM China67,989 108,352 145,634 
Reportable segment capital expenditures412,339 237,319 618,986 
Corporate and other78,358 33,260 120,020 
 $490,697 $270,579 $739,006 

Total assets are not allocated to segments for internal reporting presentations or when determining the allocation of resources and, accordingly, are not presented.


Long-lived assets, which includes property and equipment, net, operating and finance lease right-of-use assets, net, goodwill, and other intangibles,intangible assets, net, presented by geographic region in which the Company holds assets are presented below:

 

December 31,

 

 December 31,

 

2019

 

 

2018

 

 

2017

 

 202120202019

Long-lived assets:

 

(In thousands)

 

Long-lived assets:(In thousands)

United States

 

$

20,582,055

 

 

$

18,228,939

 

 

$

16,863,222

 

United States$25,848,917 $21,035,992 $20,582,055 

China and all other foreign countries

 

 

8,007,449

 

 

 

8,266,804

 

 

 

8,456,728

 

China and all other foreign countries7,176,763 7,617,819 8,007,449 

 

$

28,589,504

 

 

$

26,495,743

 

 

$

25,319,950

 

 $33,025,680 $28,653,811 $28,589,504 


NOTE 18 — RELATED PARTY TRANSACTIONS


CityCenter


Management agreements. The Company andUntil the Company's acquisition of CityCenter have entered into agreements wherebyin September 2021, the Company is responsible forwas party to a management ofagreement pursuant to which it managed the operations of CityCenter for a fee of 2% of revenue and 5% of EBITDA (as defined)defined within the management agreement) for Aria and Vdara. The Company earned fees of $29 million, $16 million and $48 million $47 million and $49 million forduring the years ended December 31, 2019, 20182021, 2020, and 2017,2019, respectively. The Company is being reimbursed for certain costs in performing its development and management services. During the years ended December 31, 2019, 2018 and 2017, the Company incurred $420 million, $409 million and $390 million, respectively, of costs reimbursable by CityCenter, primarily for employee compensation and certain allocated costs.costs in performing the Company's management services, of $187 million, $212 million and $420 million during the years ended December 31, 2021, 2020, and 2019, respectively. As of December 31, 2019 and 2018,2020, CityCenter owed the Company $66$39 million and $83 million, respectively, for management services and reimbursable costs recorded in “Accounts receivable, net” inon the accompanying consolidated balance sheets. The management agreement was terminated in connection with the Company's acquisition of CityCenter, as discussed in Note 4.


MGM China


Ms. Ho, Pansy Catilina Chiu King (“Ms. Ho”) is a memberthe Co-Chairperson of the Board of Directors of, and holds a minority ownership interest in, MGM China. Ms. Ho is also the managing director of Shun Tak Holdings Limited (together with its subsidiaries “Shun Tak”), a leading conglomerate in Hong Kong with core businesses in transportation, property, hospitality and investments. Shun Tak provides various services and products, including ferry tickets, travel products, rental of hotel rooms, laundry services and property cleaning services to MGM China. In addition, MGM China leases transportation equipment and office space from Shun Tak. MGM China incurred expenses relating to Shun Tak of $16$7 million, $17$7 million and $13$16 million for the years ended December 31, 2021, 2020 and 2019, 2018 and 2017, respectively.

In addition, Ms. Ho indirectly holds managing director positionsa 50% interest in an entity that provides, along with several other companies that provide travelits subsidiary, marketing and advertisingpublic relations consulting services, including for the retendering of MGM China's gaming subconcession, to MGM China, which totaled $6$4 million, $1 million, and $4 million for the yearyears ended December 31, 2019.

2021, 2020, and 2019, respectively.


Grand Paradise Macau deferred cash payment. On September 1, 2016, the Company purchased 188.1 million common shares of its MGM China subsidiary from Grand Paradise Macau (“GPM”), an entity controlled by Ms. Ho. As
103

part of the consideration for the purchase, the Company agreed to pay GPM or its nominee a deferred cash payment of $50 million, which will be paid inmillion. The payments included amounts equal to the ordinary dividends received on such shares, with a final lump sum payment due on the fifth anniversary of the closing date of the transaction, if any portion of the deferred cash payment remains unpaid at that time.which was made in September 2021. Such amount wasamounts were paid to Expert AnglesAngels Limited, an entity controlled by Ms. Ho through November 2018 and subsequently controlled by an immediate family member of Ms. Ho. As of December 31, 2019 and 2018,2020, the Company recorded a remaining liability on a discounted basis of $34 million and $36$33 million in “Other long-term obligationsaccrued liabilities” on the consolidated balance sheets.

”, respectively. 


MGM Branding and Development Holdings, Ltd. (together with its subsidiary MGM Development Services, Ltd., “MGM Branding and Development”), an entity included in the Company’s consolidated financial statements in which Ms. Ho indirectly holds a noncontrolling interest, is party to a brand license agreement and a development services agreement with MGM China, for which the related amounts are eliminated in consolidation. An entity owned by Ms. Ho received distributions of $20$8 million, $22$5 million and $15$20 million for the years ended December 31, 2019, 20182021, 2020 and 2017,2019, respectively, in connection with the ownership of a noncontrolling interest in MGM Branding and Development Holdings, Ltd.


MGP


As further described in Note 1, pursuant to the master lease with MGP, the Company leases the real estate assets of The Mirage, Mandalay Bay, Luxor, New York-New York, Park MGM, Excalibur, The Park, Gold Strike Tunica, MGM Grand Detroit, Beau Rivage, Borgata, Empire City, MGM National Harbor, and MGM Northfield Park, and MGM Springfield from MGP.


MGP master lease. The MGP master lease has an initial lease term of ten10 years that began on April 25, 2016 (other than with respect to MGM National Harbor, as described below) with the potential to extend the term for 4 additional five-year5-year terms thereafter at the option of the Company.Company (with additional renewal options with respect to MGM Springfield, as described below). The MGP master lease provides that any extension of its term must apply to all of the real estate under the master lease at the time of the extension. The MGP master lease provides that the initial term with respect to MGM National Harbor ends on April 31, 2024. Thereafter, the initial term of the MGP master lease with respect to MGM National Harbor may be renewed at the option of the Company for an initial renewal period lasting until the earlier of the end of the then-current term of the master lease or the next renewal term (depending on whether the Company elects to renew the other properties under the master lease in connection with the expiration of the initial ten-year10-year term). If, however, the Company chooses not to renew the lease with respect to MGM National Harbor after the initial MGM National Harbor term under the master lease, the Company would also lose the right to renew the MGP master lease with respect to the rest of the properties when the initial ten-year10-year lease term ends related to the rest of the properties in 2026. In addition to the four 5-year renewal terms, the term of the lease with respect to MGM Springfield may be extended for an additional four 5-year renewal terms. The MGP master lease has a triple-net structure, which requires the Company 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 base rent. Additionally, the master lease provides MGP with a right of first offer with respect to MGM Springfield and with respect to any further gaming development by the Company on the undeveloped land adjacent to Empire City, which MGP may exercise should the Company elect to sell eitherthis property in the future.


Rent under the MGP master lease consists of a “base rent”base rent component and a “percentage rent”percentage rent component. As of December 31, 2019,2021, the base rent represents approximately 90%91% of the rent payments due and the percentage rent represents approximately 10%9% of the rent payments due under the MGP master lease. The MGP master lease also provides for fixed annual escalators of 2% on the base rent through the sixth lease year and the possibility for additional 2% increases thereafter subject to the Companytenant and operating subsidiary sublessee, collectively, meeting an adjusted net revenue to rent ratio, as well as potential increases in percentage rent in year six and every five years thereafter based on a percentage of average actual annual net revenue during the preceding five year period calculated in accordance with the terms under the master lease. With respect to the additional renewal terms for MGM Springfield, for the first two additional renewal terms, base rent will include a fixed annual rent escalator of 2.0%, subject to the adjusted net revenue to rent ratio, as discussed above. For each lease year subsequent to the first two additional renewal terms, the base rent shall be the Fair Market Rent (as defined in the MGP master lease) in respect of MGM Springfield. The MGP master lease also contains customary events of default and financial covenants.covenants; provided that the tenant will not be in default of the financial covenants in the event there is an unavoidable delay (as such term is defined in the lease). The Company was in compliance with all applicable covenants as of December 31, 2019.

2021.


Subsequent to the Company completing its acquisition of Empire City in January 2019, MGP acquired the developed real property associated with Empire City from the Company for consideration of approximately $634 million, which included the assumption of debt of approximately $246 million, which was immediately repaid, and the remaining paid through theremainder in issuance of Operating Partnership units. The real estate assets of Empire City were then leased to the Company pursuant to an amendment to the MGP master lease, increasing the annual rent payment to MGP by $50 million, prorated for the remainder of the lease year. Consistent with the MGP master lease terms, 90% of this rent will be fixed and contractually
104

grow at 2% per year until 2022. As disclosed above, the master lease provides MGP with a right of first offer with respect to certain undeveloped land adjacent to the property to the extent the Company develops additional gaming facilities, which MGP may exercise should the Company elect to sell this property in the future.


On March 7, 2019, the Company entered into an amendment to the existing MGP master lease with respect to investments made by the Company related to the Park MGM and NoMad Las Vegas property (the “Park MGM Lease Transaction”).Transaction. In connection with the transaction, the Company received consideration of $638$638 million, of which approximately $606$606 million was paid in cash and the remaining paid through theremainder in issuance of Operating Partnership units. Additionally, the annual rent payment to MGP was increased by $50$50 million, prorated for the remainder of the lease year. Consistent with the master lease terms, 90% of this rent will be fixed and contractually grow at 2% per year until 2022.


Additionally, on April 1, 2019, the Company acquired the membership interests of Northfield from MGP, which held the operations of Northfield, for fair value of consideration of approximately $305$305 million consisting primarily of approximately 9 million Operating Partnership units that were ultimately redeemed by the Operating Partnership, and MGP retained the associated real estate assets. The Company then rebranded the property to MGM Northfield Park, which was then added to the existing MGP master lease with MGP, increasing the annual rent payment to MGP by $60 million.$60 million. Consistent with the master lease terms, 90% of this rent will be fixed and contractually grow at 2% per year until 2022.



The annual rent payments under the MGP master lease for the fourth lease year, which commenced on April 1, 2019, increased to $946 million from $770 million at the start of the third lease year. The increase was a result of the $50 million in additional rent for each of the Park MGM Transaction and the addition of Empire City in the beginning of 2019, the $60 million of additional rent for MGM Northfield Park, which entered the Master Lease on April 1, 2019, as well as the third 2.0%2% fixed annual rent escalator that went into effect on April 1, 2019.


On February 14, 2020, the Company amended the MGP master lease to remove Mandalay Bay from such master lease and the annual rent under the MGP master lease was reduced by $133 million to $813 million.  Refer

The annual cash rent payments under the MGP master lease for the fifth lease year, which commenced on April 1, 2020, increased to $828 million from $813 million, as a result of the fourth 2% fixed annual rent escalator that went into effect on April 1, 2020.

The annual cash rent payments under the MGP master lease for the sixth lease year, which commenced on April 1, 2021, increased to $843 million from $828 million, as a result of the fifth 2% fixed annual rent escalator that went into effect on April 1, 2021.

In October 2021, MGP acquired the real estate assets of MGM Springfield from the Company for $400 million of cash consideration, which was accounted for as a transaction between entities under common control. The Company adjusted the carrying value of noncontrolling interests to adjust for its share of the difference between the carrying value of the net assets transferred and the consideration received, with offsetting adjustments to capital in excess of par value. MGM Springfield was added to the master lease between the Company and MGP. Following the closing of the transaction, the annual rent payment to MGP increased from $843 million to $873 million, reflecting the addition of MGM Springfield, which increased the annual rent payment by $30 million, $27 million of which will be fixed and contractually grow at 2% per year with escalators subject to the adjusted net revenue to rent ratio, as further described above. Final regulatory approvals, which were not necessary for the transaction to close, are expected to be received within nine to twelve months following the close of the transaction. Until final regulatory approvals are obtained, the parties will be subject to a trust agreement, which provides for the property to go into a trust (or, at the Company’s option, be returned to the Company) during the interim period in the event that the regulator finds reasonable cause to believe that MGP may not be found suitable. The property will then remain in trust until a final determination regarding MGP’s suitability is made.

Additionally, refer to Note 1 for further discussion.

discussion relating to the waiver agreement with MGP and the Operating Partnership units redeemed in 2020 thereunder.


All intercompany transactions, including transactions under the MGP master lease, have been eliminated in the Company’s consolidation of MGP. The public ownership of MGP’s Class A shares is recognized as non-controllingnoncontrolling interests in the Company’s consolidated financial statements.


As further described in Note 1, in August 2021, the Company entered into an agreement with VICI and MGP whereby VICI will acquire MGP in a stock-for-stock transaction. As part of the transaction, the Company will enter into an amended and restated master lease with VICI. 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).

105

Bellagio BREIT Venture


The Company has a 5% ownership interest in the Bellagio BREIT Venture, which owns the Bellagio real estate assets of Bellagio and leased backleases such assets to a subsidiary of the Company pursuant to a lease agreement. Refer to Note 11 for further information related to the Bellagio lease.


MGP BREIT Venture

On February 14, 2020, the Company entered into a lease with the MGP BREIT Venture, in which


MGP has a 50.1% ownership interest.  Refer to Note 1 for further discussion of this subsequent event.

NOTE 19 —CONDENSED CONSOLIDATING FINANCIAL INFORMATION

As of December 31, 2019, all of the Company’s principal debt arrangements are guaranteed by each of its material domestic subsidiaries, other thaninterest in MGP and the Operating Partnership, MGM Grand Detroit, MGM National Harbor, MGM Springfield, and each of their respective subsidiaries. The Company’s international subsidiaries, including MGM China and its subsidiaries, are not guarantors of such indebtedness. Separate condensed financial statement information for the subsidiary guarantors and non-guarantors as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017, are presented below. Within the Condensed Consolidating Statements of Cash Flows, the Company has presented net changes in intercompany accounts as investing activities if the applicable entities have a net asset in intercompany accounts and as a financing activity if the applicable entities have a net intercompany liability balance.

Certain of the Company’s subsidiaries collectively own Operating Partnership units and each subsidiary accounts for its respective investment under the equity method within the condensed consolidating financial information presented below. Prior to the adoption of ASC 842 on January 1, 2019, for these subsidiaries, such investment constituted continuing involvement, and accordingly, the sale and leaseback ofBREIT Venture, which owns the real estate assets under the MGP master lease did not qualify for sale-leaseback accounting. The real estateof Mandalay Bay and MGM Grand Las Vegas and leases such assets were reflected in the balance sheetsto a subsidiary of the applicable MGM subsidiaries. In addition, such subsidiaries recognized finance liabilities within “Other long-term obligations” relatedCompany pursuant to rent payments due under the MGP mastera lease and recognized the related interest expense component of such payments. These real estate assets were also reflected on the balance sheet of the MGP subsidiary that received such assets. The condensed consolidating financial information presented below therefore included the accountingagreement. Refer to Note 11 for such activity within the respective columns presented and in the elimination column. In connection with the adoption of ASC 842, the sale and leaseback of the real estate assets under the MGP master lease now qualify as a passed sale and are determined to be operating leases.  As such, the real estate assets, finance liabilities, and related interest expense component of rent payments are no longer reflected in the results of the applicable MGM subsidiaries.  Instead, the real estate assets are now only reflected on the balance sheet of the MGP subsidiary that received such assets and the MGM subsidiaries have recorded operating lease liabilities and operating ROU assets with the related rent expense reflected within “general and administrative” expense within the condensed consolidating financial information.


CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

Non-Guarantor

Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

Parent

 

 

Guarantor

Subsidiaries

 

 

MGP

 

 

Other

 

 

Elimination

 

 

Consolidated

 

 

 

(In thousands)

 

Current assets

 

$

1,847,328

 

 

$

1,166,667

 

 

$

216,232

 

 

$

790,285

 

 

$

(12,819

)

 

$

4,007,693

 

Property and equipment, net

 

 

—

 

 

 

2,972,291

 

 

 

10,827,972

 

 

 

4,497,664

 

 

 

(11,972

)

 

 

18,285,955

 

Investments in subsidiaries

 

 

26,283,270

 

 

 

3,500,241

 

 

 

—

 

 

 

—

 

 

 

(29,783,511

)

 

 

—

 

Investments in the MGP Operating Partnership

 

 

—

 

 

 

3,713,065

 

 

 

—

 

 

 

783,049

 

 

 

(4,496,114

)

 

 

—

 

Investments in and advances to unconsolidated affiliates

 

 

—

 

 

 

782,820

 

 

 

—

 

 

 

14,546

 

 

 

25,000

 

 

 

822,366

 

Intercompany accounts

 

 

—

 

 

 

12,994,459

 

 

 

—

 

 

 

—

 

 

 

(12,994,459

)

 

 

—

 

Other non-current assets

 

 

59,968

 

 

 

14,142,246

 

 

 

866,068

 

 

 

7,057,191

 

 

 

(11,365,131

)

 

 

10,760,342

 

 

 

$

28,190,566

 

 

$

39,271,789

 

 

$

11,910,272

 

 

$

13,142,735

 

 

$

(58,639,006

)

 

$

33,876,356

 

Current liabilities

 

$

842,161

 

 

$

1,601,959

 

 

$

197,581

 

 

$

845,471

 

 

$

(295,749

)

 

$

3,191,423

 

Intercompany accounts

 

 

12,956,091

 

 

 

—

 

 

 

774

 

 

 

37,594

 

 

 

(12,994,459

)

 

 

—

 

Deferred income taxes, net

 

 

1,865,535

 

 

 

—

 

 

 

29,909

 

 

 

240,971

 

 

 

(29,909

)

 

 

2,106,506

 

Long-term debt, net

 

 

4,713,521

 

 

 

569

 

 

 

4,307,354

 

 

 

2,147,460

 

 

 

—

 

 

 

11,168,904

 

Other non-current liabilities

 

 

85,993

 

 

 

13,151,072

 

 

 

476,642

 

 

 

2,339,166

 

 

 

(11,411,315

)

 

 

4,641,558

 

Total liabilities

 

 

20,463,301

 

 

 

14,753,600

 

 

 

5,012,260

 

 

 

5,610,662

 

 

 

(24,731,432

)

 

 

21,108,391

 

Redeemable noncontrolling interests

 

 

—

 

 

 

—

 

 

 

—

 

 

 

105,046

 

 

 

—

 

 

 

105,046

 

MGM Resorts International stockholders' equity

 

 

7,727,265

 

 

 

24,513,386

 

 

 

4,383,113

 

 

 

5,011,075

 

 

 

(33,907,574

)

 

 

7,727,265

 

Noncontrolling interests

 

 

—

 

 

 

4,803

 

 

 

2,514,899

 

 

 

2,415,952

 

 

 

—

 

 

 

4,935,654

 

Total stockholders' equity

 

 

7,727,265

 

 

 

24,518,189

 

 

 

6,898,012

 

 

 

7,427,027

 

 

 

(33,907,574

)

 

 

12,662,919

 

 

 

$

28,190,566

 

 

$

39,271,789

 

 

$

11,910,272

 

 

$

13,142,735

 

 

$

(58,639,006

)

 

$

33,876,356

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

Non-Guarantor

Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

Parent

 

 

Guarantor

Subsidiaries

 

 

MGP

 

 

Other

 

 

Elimination

 

 

Consolidated

 

 

 

(In thousands)

 

Current assets

 

$

304,741

 

 

$

1,244,864

 

 

$

12,054

 

 

$

972,820

 

 

$

(7,701

)

 

$

2,526,778

 

Property and equipment, net

 

 

—

 

 

 

13,585,370

 

 

 

10,506,129

 

 

 

6,392,014

 

 

 

(9,753,625

)

 

 

20,729,888

 

Investments in subsidiaries

 

 

22,419,282

 

 

 

3,401,031

 

 

 

—

 

 

 

—

 

 

 

(25,820,313

)

 

 

—

 

Investments in the MGP Operating Partnership

 

 

—

 

 

 

3,434,602

 

 

 

—

 

 

 

831,494

 

 

 

(4,266,096

)

 

 

—

 

Investments in and advances to unconsolidated affiliates

 

 

—

 

 

 

678,748

 

 

 

—

 

 

 

29,119

 

 

 

25,000

 

 

 

732,867

 

Intercompany accounts

 

 

—

 

 

 

7,135,183

 

 

 

—

 

 

 

—

 

 

 

(7,135,183

)

 

 

—

 

Other non-current assets

 

 

67,214

 

 

 

1,186,666

 

 

 

77,436

 

 

 

4,932,872

 

 

 

(43,015

)

 

 

6,221,173

 

Assets held for sale

 

 

—

 

 

 

—

 

 

 

355,688

 

 

 

—

 

 

 

(355,688

)

 

 

—

 

 

 

$

22,791,237

 

 

$

30,666,464

 

 

$

10,951,307

 

 

$

13,158,319

 

 

$

(47,356,621

)

 

$

30,210,706

 

Current liabilities

 

$

154,484

 

 

$

1,646,481

 

 

$

160,441

 

 

$

1,224,752

 

 

$

(237,276

)

 

$

2,948,882

 

Intercompany accounts

 

 

6,932,325

 

 

 

—

 

 

 

227

 

 

 

202,631

 

 

 

(7,135,183

)

 

 

—

 

Deferred income taxes, net

 

 

1,097,654

 

 

 

—

 

 

 

33,634

 

 

 

240,970

 

 

 

(29,720

)

 

 

1,342,538

 

Long-term debt, net

 

 

8,055,472

 

 

 

570

 

 

 

4,666,949

 

 

 

2,365,014

 

 

 

—

 

 

 

15,088,005

 

Other non-current liabilities

 

 

39,019

 

 

 

7,210,948

 

 

 

215,613

 

 

 

2,247,584

 

 

 

(9,453,924

)

 

 

259,240

 

Liabilities related to assets held for sale

 

 

—

 

 

 

—

 

 

 

28,937

 

 

 

—

 

 

 

(28,937

)

 

 

—

 

Total liabilities

 

 

16,278,954

 

 

 

8,857,999

 

 

 

5,105,801

 

 

 

6,280,951

 

 

 

(16,885,040

)

 

 

19,638,665

 

Redeemable noncontrolling interests

 

 

—

 

 

 

—

 

 

 

—

 

 

 

102,250

 

 

 

—

 

 

 

102,250

 

MGM Resorts International stockholders' equity

 

 

6,512,283

 

 

 

21,808,465

 

 

 

4,279,535

 

 

 

4,383,581

 

 

 

(30,471,581

)

 

 

6,512,283

 

Noncontrolling interests

 

 

—

 

 

 

—

 

 

 

1,565,971

 

 

 

2,391,537

 

 

 

—

 

 

 

3,957,508

 

Total stockholders' equity

 

 

6,512,283

 

 

 

21,808,465

 

 

 

5,845,506

 

 

 

6,775,118

 

 

 

(30,471,581

)

 

 

10,469,791

 

 

 

$

22,791,237

 

 

$

30,666,464

 

 

$

10,951,307

 

 

$

13,158,319

 

 

$

(47,356,621

)

 

$

30,210,706

 


CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION

 

 

Year Ended December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

Non-Guarantor

Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

Parent

 

 

Guarantor

Subsidiaries

 

 

MGP

 

 

Other

 

 

Elimination

 

 

Consolidated

 

 

 

(In thousands)

 

Net revenues

 

$

—

 

 

$

8,250,745

 

 

$

881,078

 

 

$

4,648,935

 

 

$

(881,086

)

 

$

12,899,672

 

Equity in subsidiaries' earnings

 

 

3,468,056

 

 

 

143,416

 

 

 

—

 

 

 

—

 

 

 

(3,611,472

)

 

 

—

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Casino and hotel operations

 

 

9,834

 

 

 

4,715,365

 

 

 

—

 

 

 

2,889,321

 

 

 

(11,031

)

 

 

7,603,489

 

General and administrative

 

 

27,752

 

 

 

2,235,321

 

 

 

23,321

 

 

 

755,378

 

 

 

(940,555

)

 

 

2,101,217

 

Corporate expense

 

 

180,288

 

 

 

236,175

 

 

 

27,041

 

 

 

21,138

 

 

 

—

 

 

 

464,642

 

Preopening and start-up expenses

 

 

—

 

 

 

5,168

 

 

 

—

 

 

 

2,007

 

 

 

—

 

 

 

7,175

 

Property transactions, net

 

 

7,530

 

 

 

255,081

 

 

 

10,844

 

 

 

2,347

 

 

 

—

 

 

 

275,802

 

Gain on Bellagio transaction

 

 

—

 

 

 

(2,677,996

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,677,996

)

Depreciation and amortization

 

 

—

 

 

 

431,222

 

 

 

294,705

 

 

 

578,722

 

 

 

—

 

 

 

1,304,649

 

 

 

 

225,404

 

 

 

5,200,336

 

 

 

355,911

 

 

 

4,248,913

 

 

 

(951,586

)

 

 

9,078,978

 

Income (loss) from unconsolidated affiliates

 

 

—

 

 

 

134,584

 

 

 

—

 

 

 

(15,063

)

 

 

—

 

 

 

119,521

 

Operating income

 

 

3,242,652

 

 

 

3,328,409

 

 

 

525,167

 

 

 

384,959

 

 

 

(3,540,972

)

 

 

3,940,215

 

Interest expense, net of amounts capitalized

 

 

(472,066

)

 

 

(1,103

)

 

 

(249,944

)

 

 

(124,819

)

 

 

—

 

 

 

(847,932

)

Other non-operating, net

 

 

(97,903

)

 

 

254,509

 

 

 

(8,276

)

 

 

(11,304

)

 

 

(382,584

)

 

 

(245,558

)

Income from continuing operations before income taxes

 

 

2,672,683

 

 

 

3,581,815

 

 

 

266,947

 

 

 

248,836

 

 

 

(3,923,556

)

 

 

2,846,725

 

Provision for income taxes

 

 

(623,537

)

 

 

(8

)

 

 

(7,598

)

 

 

(1,202

)

 

 

—

 

 

 

(632,345

)

Income from continuing operations, net of tax

 

 

2,049,146

 

 

 

3,581,807

 

 

 

259,349

 

 

 

247,634

 

 

 

(3,923,556

)

 

 

2,214,380

 

Income from discontinued operations, net of tax

 

 

—

 

 

 

—

 

 

 

16,216

 

 

 

—

 

 

 

(16,216

)

 

 

—

 

Net income

 

 

2,049,146

 

 

 

3,581,807

 

 

 

275,565

 

 

 

247,634

 

 

 

(3,939,772

)

 

 

2,214,380

 

Less: Net income attributable to noncontrolling interests

 

 

—

 

 

 

(8,995

)

 

 

(90,260

)

 

 

(65,979

)

 

 

—

 

 

 

(165,234

)

Net income attributable to MGM Resorts International

 

$

2,049,146

 

 

$

3,572,812

 

 

$

185,305

 

 

$

181,655

 

 

$

(3,939,772

)

 

$

2,049,146

 

Net income

 

$

2,049,146

 

 

$

3,581,807

 

 

$

275,565

 

 

$

247,634

 

 

$

(3,939,772

)

 

$

2,214,380

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

16,125

 

 

 

16,125

 

 

 

—

 

 

 

28,870

 

 

 

(32,250

)

 

 

28,870

 

Other comprehensive loss related to cash flow hedges

 

 

(19,973

)

 

 

—

 

 

 

(35,198

)

 

 

—

 

 

 

25,666

 

 

 

(29,505

)

Other comprehensive income (loss)

 

 

(3,848

)

 

 

16,125

 

 

 

(35,198

)

 

 

28,870

 

 

 

(6,584

)

 

 

(635

)

Comprehensive income

 

 

2,045,298

 

 

 

3,597,932

 

 

 

240,367

 

 

 

276,504

 

 

 

(3,946,356

)

 

 

2,213,745

 

Less: Comprehensive income attributable to noncontrolling interests

 

 

—

 

 

 

—

 

 

 

(80,728

)

 

 

(87,719

)

 

 

—

 

 

 

(168,447

)

Comprehensive income attributable to MGM Resorts International

 

$

2,045,298

 

 

$

3,597,932

 

 

$

159,639

 

 

$

188,785

 

 

$

(3,946,356

)

 

$

2,045,298

 


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION

 

 

Year Ended December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

Non-Guarantor

Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

Parent

 

 

Guarantor

Subsidiaries

 

 

MGP

 

 

Other

 

 

Elimination

 

 

Consolidated

 

 

 

(In thousands)

 

Cash flows from operating activities

 

 

 

Net cash provided by (used in) operating activities

 

$

(308,995

)

 

$

1,404,869

 

 

$

100,706

 

 

$

629,412

 

 

$

(15,591

)

 

$

1,810,401

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures, net of construction payable

 

 

—

 

 

 

(504,105

)

 

 

—

 

 

 

(234,913

)

 

 

12

 

 

 

(739,006

)

Dispositions of property and equipment

 

 

—

 

 

 

2,425

 

 

 

—

 

 

 

153

 

 

 

—

 

 

 

2,578

 

Proceeds from Bellagio transaction

 

 

—

 

 

 

4,151,499

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,151,499

 

Proceeds from sale of Circus Circus Las Vegas and adjacent land

 

 

—

 

 

 

652,333

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

652,333

 

Acquisition of Empire City Casino, net of cash acquired

 

 

—

 

 

 

(535,681

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(535,681

)

Investments in and advances to unconsolidated affiliates

 

 

—

 

 

 

(81,877

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(81,877

)

Distributions from unconsolidated affiliates

 

 

—

 

 

 

100,700

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

100,700

 

Intercompany accounts

 

 

—

 

 

 

(5,859,196

)

 

 

—

 

 

 

—

 

 

 

5,859,196

 

 

 

—

 

Northfield OpCo transaction

 

 

—

 

 

 

(3,779

)

 

 

3,779

 

 

 

—

 

 

 

—

 

 

 

—

 

Other

 

 

—

 

 

 

(4,500

)

 

 

—

 

 

 

(26,612

)

 

 

—

 

 

 

(31,112

)

Net cash provided by (used in) investing activities

 

 

—

 

 

 

(2,082,181

)

 

 

3,779

 

 

 

(261,372

)

 

 

5,859,208

 

 

 

3,519,434

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net borrowings (repayments) under bank credit facilities - maturities of 90 days or less

 

 

(752,220

)

 

 

245,950

 

 

 

(1,361,325

)

 

 

(1,766,454

)

 

 

—

 

 

 

(3,634,049

)

Issuance of long-term debt

 

 

1,000,000

 

 

 

—

 

 

 

750,000

 

 

 

1,500,000

 

 

 

—

 

 

 

3,250,000

 

Retirement of senior notes and senior debentures

 

 

(3,764,167

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3,764,167

)

Debt issuance costs

 

 

(14,080

)

 

 

—

 

 

 

(9,983

)

 

 

(39,328

)

 

 

—

 

 

 

(63,391

)

Issuance of MGM Growth Properties Class A shares, net

 

 

—

 

 

 

—

 

 

 

1,250,006

 

 

 

—

 

 

 

—

 

 

 

1,250,006

 

Dividends paid to common shareholders

 

 

(271,288

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(271,288

)

MGP dividends paid to consolidated subsidiaries

 

 

—

 

 

 

—

 

 

 

(371,759

)

 

 

—

 

 

 

371,759

 

 

 

—

 

Distributions to noncontrolling interest owners

 

 

—

 

 

 

(4,907

)

 

 

(161,976

)

 

 

(56,420

)

 

 

—

 

 

 

(223,303

)

Purchases of common stock

 

 

(1,031,534

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,031,534

)

Intercompany accounts

 

 

5,987,076

 

 

 

456,571

 

 

 

—

 

 

 

(212,692

)

 

 

(6,230,955

)

 

 

—

 

Other

 

 

(27,217

)

 

 

(47,686

)

 

 

(1,342

)

 

 

(3,523

)

 

 

37,900

 

 

 

(41,868

)

Net cash provided by (used in) financing activities

 

 

1,126,570

 

 

 

649,928

 

 

 

93,621

 

 

 

(578,417

)

 

 

(5,821,296

)

 

 

(4,529,594

)

Effect of exchange rate on cash

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,601

 

 

 

—

 

 

 

2,601

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

��

Cash flows from discontinued operations, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

—

 

 

 

—

 

 

 

15,591

 

 

 

—

 

 

 

(15,591

)

 

 

—

 

Cash flows used in investing activities

 

 

—

 

 

 

—

 

 

 

(12

)

 

 

—

 

 

 

12

 

 

 

—

 

Cash flows used in financing activities

 

 

—

 

 

 

—

 

 

 

(37,900

)

 

 

—

 

 

 

37,900

 

 

 

—

 

Net cash flows used in discontinued operations

 

 

—

 

 

 

—

 

 

 

(22,321

)

 

 

—

 

 

 

22,321

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in cash and cash equivalents classified as assets held for sale

 

 

—

 

 

 

—

 

 

 

(22,321

)

 

 

—

 

 

 

22,321

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) for the period

 

 

817,575

 

 

 

(27,384

)

 

 

198,106

 

 

 

(207,776

)

 

 

22,321

 

 

 

802,842

 

Balance, beginning of period

 

 

259,738

 

 

 

445,423

 

 

 

3,995

 

 

 

817,606

 

 

 

—

 

 

 

1,526,762

 

Balance, end of period

 

$

1,077,313

 

 

$

418,039

 

 

$

202,101

 

 

$

609,830

 

 

$

22,321

 

 

$

2,329,604

 


CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION

 

 

Year Ended December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

Non-Guarantor

Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

Parent

 

 

Guarantor

Subsidiaries

 

 

MGP

 

 

Other

 

 

Elimination

 

 

Consolidated

 

 

 

(In thousands)

 

Net revenues

 

$

—

 

 

$

7,780,253

 

 

$

869,495

 

 

$

3,983,575

 

 

$

(870,227

)

 

$

11,763,096

 

Equity in subsidiaries' earnings

 

 

1,221,538

 

 

 

116,676

 

 

 

—

 

 

 

—

 

 

 

(1,338,214

)

 

 

—

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Casino and hotel operations

 

 

11,130

 

 

 

4,438,687

 

 

 

—

 

 

 

2,491,007

 

 

 

(21,949

)

 

 

6,918,875

 

General and administrative

 

 

9,945

 

 

 

1,241,329

 

 

 

93,739

 

 

 

495,015

 

 

 

(75,390

)

 

 

1,764,638

 

Corporate expense

 

 

156,503

 

 

 

216,318

 

 

 

48,675

 

 

 

21,317

 

 

 

(23,609

)

 

 

419,204

 

Preopening and start-up expenses

 

 

—

 

 

 

26,100

 

 

 

—

 

 

 

125,292

 

 

 

—

 

 

 

151,392

 

Property transactions, net

 

 

—

 

 

 

(15,955

)

 

 

20,319

 

 

 

25,033

 

 

 

(20,250

)

 

 

9,147

 

Depreciation and amortization

 

 

—

 

 

 

628,961

 

 

 

266,622

 

 

 

543,606

 

 

 

(261,145

)

 

 

1,178,044

 

 

 

 

177,578

 

 

 

6,535,440

 

 

 

429,355

 

 

 

3,701,270

 

 

 

(402,343

)

 

 

10,441,300

 

Income (loss) from unconsolidated affiliates

 

 

—

 

 

 

148,866

 

 

 

—

 

 

 

(1,176

)

 

 

—

 

 

 

147,690

 

Operating income

 

 

1,043,960

 

 

 

1,510,355

 

 

 

440,140

 

 

 

281,129

 

 

 

(1,806,098

)

 

 

1,469,486

 

Interest expense, net of amounts capitalized

 

 

(480,985

)

 

 

(510

)

 

 

(215,532

)

 

 

(72,486

)

 

 

—

 

 

 

(769,513

)

Other non-operating, net

 

 

63,722

 

 

 

(444,897

)

 

 

(4,690

)

 

 

(187,786

)

 

 

507,684

 

 

 

(65,967

)

Income before income taxes

 

 

626,697

 

 

 

1,064,948

 

 

 

219,918

 

 

 

20,857

 

 

 

(1,298,414

)

 

 

634,006

 

Benefit (provision) for income taxes

 

 

(159,925

)

 

 

—

 

 

 

(5,779

)

 

 

115,592

 

 

 

—

 

 

 

(50,112

)

Income from continuing operations, net of tax

 

 

466,772

 

 

 

1,064,948

 

 

 

214,139

 

 

 

136,449

 

 

 

(1,298,414

)

 

 

583,894

 

Income from discontinued operations, net of tax

 

 

—

 

 

 

—

 

 

 

30,563

 

 

 

—

 

 

 

(30,563

)

 

 

—

 

Net income

 

 

466,772

 

 

 

1,064,948

 

 

 

244,702

 

 

 

136,449

 

 

 

(1,328,977

)

 

 

583,894

 

Less: Net income attributable to noncontrolling interests

 

 

—

 

 

 

—

 

 

 

(67,065

)

 

 

(50,057

)

 

 

—

 

 

 

(117,122

)

Net income attributable to MGM Resorts International

 

$

466,772

 

 

$

1,064,948

 

 

$

177,637

 

 

$

86,392

 

 

$

(1,328,977

)

 

$

466,772

 

Net income

 

$

466,772

 

 

$

1,064,948

 

 

$

244,702

 

 

$

136,449

 

 

$

(1,328,977

)

 

$

583,894

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(7,422

)

 

 

(7,422

)

 

 

—

 

 

 

(13,022

)

 

 

14,844

 

 

 

(13,022

)

Other comprehensive income related to cash flow hedges

 

 

2,476

 

 

 

—

 

 

 

4,128

 

 

 

—

 

 

 

(3,028

)

 

 

3,576

 

Other comprehensive income (loss)

 

 

(4,946

)

 

 

(7,422

)

 

 

4,128

 

 

 

(13,022

)

 

 

11,816

 

 

 

(9,446

)

Comprehensive income

 

 

461,826

 

 

 

1,057,526

 

 

 

248,830

 

 

 

123,427

 

 

 

(1,317,161

)

 

 

574,448

 

Less: Comprehensive income attributable to noncontrolling interests

 

 

—

 

 

 

—

 

 

 

(68,165

)

 

 

(44,457

)

 

 

—

 

 

 

(112,622

)

Comprehensive income attributable to MGM Resorts International

 

$

461,826

 

 

$

1,057,526

 

 

$

180,665

 

 

$

78,970

 

 

$

(1,317,161

)

 

$

461,826

 


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION

 

 

Year Ended December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Guarantor

Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

Parent

 

 

 

 

Guarantor

Subsidiaries

 

 

MGP

 

 

Other

 

 

Elimination

 

 

Consolidated

 

 

 

(In thousands)

 

Cash flows from operating activities

 

 

 

Net cash provided by (used in) operating activities

 

$

(460,117

)

 

 

 

$

1,294,989

 

 

$

556,801

 

 

$

330,866

 

 

$

—

 

 

$

1,722,539

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures, net of construction payable

 

 

—

 

 

 

 

 

(697,462

)

 

 

(192

)

 

 

(789,189

)

 

 

—

 

 

 

(1,486,843

)

Dispositions of property and equipment

 

 

—

 

 

 

 

 

25,507

 

 

 

—

 

 

 

105

 

 

 

—

 

 

 

25,612

 

Proceeds from sale of business units and investment in unconsolidated affiliate

 

 

—

 

 

 

 

 

163,616

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

163,616

 

Acquisition of Northfield, net of cash acquired

 

 

—

 

 

 

 

 

33,802

 

 

 

(1,068,336

)

 

 

—

 

 

 

—

 

 

 

(1,034,534

)

Investments in and advances to unconsolidated affiliates

 

 

—

 

 

 

 

 

(56,295

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(56,295

)

Distributions from unconsolidated affiliates

 

 

—

 

 

 

 

 

322,631

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

322,631

 

Intercompany accounts

 

 

—

 

 

 

 

 

(1,136,764

)

 

 

—

 

 

 

—

 

 

 

1,136,764

 

 

 

—

 

Other

 

 

—

 

 

 

 

 

(13,416

)

 

 

—

 

 

 

(3,792

)

 

 

—

 

 

 

(17,208

)

Net cash used in investing activities

 

 

—

 

 

 

 

 

(1,358,381

)

 

 

(1,068,528

)

 

 

(792,876

)

 

 

1,136,764

 

 

 

(2,083,021

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net borrowings under bank credit facilities - maturities of 90 days or less

 

 

377,500

 

 

 

 

 

—

 

 

 

727,750

 

 

 

137,009

 

 

 

—

 

 

 

1,242,259

 

Issuance of long-term debt

 

 

1,000,000

 

 

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,000,000

 

Retirement of senior notes and senior debentures

 

 

—

 

 

 

 

 

(2,265

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,265

)

Debt issuance costs

 

 

(26,125

)

 

 

 

 

—

 

 

 

(17,490

)

 

 

(32,904

)

 

 

—

 

 

 

(76,519

)

Dividends paid to common shareholders

 

 

(260,592

)

 

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(260,592

)

MGP dividends paid to consolidated subsidiaries

 

 

—

 

 

 

 

 

—

 

 

 

(333,192

)

 

 

—

 

 

 

333,192

 

 

 

—

 

Distributions to noncontrolling interest owners

 

 

—

 

 

 

 

 

—

 

 

 

(121,068

)

 

 

(63,864

)

 

 

—

 

 

 

(184,932

)

Purchases of common stock

 

 

(1,283,333

)

 

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,283,333

)

Intercompany accounts

 

 

917,760

 

 

 

 

 

207,015

 

 

 

—

 

 

 

345,181

 

 

 

(1,469,956

)

 

 

—

 

Other

 

 

(32,225

)

 

 

 

 

(6,979

)

 

 

—

 

 

 

(6,180

)

 

 

—

 

 

 

(45,384

)

Net cash provided by financing activities

 

 

692,985

 

 

 

 

 

197,771

 

 

 

256,000

 

 

 

379,242

 

 

 

(1,136,764

)

 

 

389,234

 

Effect of exchange rate on cash

 

 

—

 

 

 

 

 

—

 

 

 

—

 

 

 

(1,985

)

 

 

—

 

 

 

(1,985

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from discontinued operations, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

—

 

 

 

 

 

—

 

 

 

23,406

 

 

 

—

 

 

 

(23,406

)

 

 

—

 

Cash flows from investing activities

 

 

—

 

 

 

 

 

—

 

 

 

32,416

 

 

 

—

 

 

 

(32,416

)

 

 

—

 

Cash flows from financing activities

 

 

—

 

 

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Net cash flows from discontinued operations

 

 

—

 

 

 

 

 

—

 

 

 

55,822

 

 

 

—

 

 

 

(55,822

)

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in cash and cash equivalents classified as assets held for sale

 

 

—

 

 

 

 

 

—

 

 

 

55,822

 

 

 

—

 

 

 

(55,822

)

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) for the period

 

 

232,868

 

 

 

 

 

134,379

 

 

 

(255,727

)

 

 

(84,753

)

 

 

—

 

 

 

26,767

 

Balance, beginning of period

 

 

26,870

 

 

 

 

 

311,044

 

 

 

259,722

 

 

 

902,359

 

 

 

—

 

 

 

1,499,995

 

Balance, end of period

 

$

259,738

 

 

 

 

$

445,423

 

 

$

3,995

 

 

$

817,606

 

 

$

—

 

 

$

1,526,762

 


CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION

 

 

Year Ended December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

Non-Guarantor

Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

Parent

 

 

Guarantor

Subsidiaries

 

 

MGP

 

 

Other

 

 

Elimination

 

 

Consolidated

 

 

 

(In thousands)

 

Net revenues

 

$

—

 

 

$

7,649,990

 

 

$

765,695

 

 

$

3,151,304

 

 

$

(769,510

)

 

$

10,797,479

 

Equity in subsidiaries' earnings

 

 

1,391,725

 

 

 

156,081

 

 

 

—

 

 

 

—

 

 

 

(1,547,806

)

 

 

—

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Casino and hotel operations

 

 

10,784

 

 

 

4,262,212

 

 

 

—

 

 

 

1,923,942

 

 

 

(3,816

)

 

 

6,193,122

 

General and administrative

 

 

8,742

 

 

 

1,180,989

 

 

 

84,348

 

 

 

369,844

 

 

 

(84,348

)

 

 

1,559,575

 

Corporate expense

 

 

127,092

 

 

 

200,801

 

 

 

34,085

 

 

 

(515

)

 

 

(4,591

)

 

 

356,872

 

NV Energy exit expense

 

 

—

 

 

 

(40,629

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(40,629

)

Preopening and start-up expenses

 

 

—

 

 

 

8,258

 

 

 

—

 

 

 

110,217

 

 

 

—

 

 

 

118,475

 

Property transactions, net

 

 

—

 

 

 

43,985

 

 

 

34,022

 

 

 

6,294

 

 

 

(34,022

)

 

 

50,279

 

Depreciation and amortization

 

 

—

 

 

 

649,676

 

 

 

260,455

 

 

 

343,804

 

 

 

(260,455

)

 

 

993,480

 

 

 

 

146,618

 

 

 

6,305,292

 

 

 

412,910

 

 

 

2,753,586

 

 

 

(387,232

)

 

 

9,231,174

 

Income (loss) from unconsolidated affiliates

 

 

—

 

 

 

147,234

 

 

 

—

 

 

 

(1,012

)

 

 

—

 

 

 

146,222

 

Operating income

 

 

1,245,107

 

 

 

1,648,013

 

 

 

352,785

 

 

 

396,706

 

 

 

(1,930,084

)

 

 

1,712,527

 

Interest expense, net of amounts capitalized

 

 

(466,907

)

 

 

(982

)

 

 

(184,175

)

 

 

(16,681

)

 

 

—

 

 

 

(668,745

)

Other non-operating, net

 

 

26,215

 

 

 

(402,602

)

 

 

2,286

 

 

 

(142,997

)

 

 

434,106

 

 

 

(82,992

)

Income before income taxes

 

 

804,415

 

 

 

1,244,429

 

 

 

170,896

 

 

 

237,028

 

 

 

(1,495,978

)

 

 

960,790

 

Benefit (provision) for income taxes

 

 

1,147,637

 

 

 

—

 

 

 

(4,906

)

 

 

(15,337

)

 

 

—

 

 

 

1,127,394

 

Net income

 

 

1,952,052

 

 

 

1,244,429

 

 

 

165,990

 

 

 

221,691

 

 

 

(1,495,978

)

 

 

2,088,184

 

Less: Net income attributable to noncontrolling interests

 

 

—

 

 

 

—

 

 

 

(41,775

)

 

 

(94,357

)

 

 

—

 

 

 

(136,132

)

Net income attributable to MGM Resorts International

 

$

1,952,052

 

 

$

1,244,429

 

 

$

124,215

 

 

$

127,334

 

 

$

(1,495,978

)

 

$

1,952,052

 

Net income

 

$

1,952,052

 

 

$

1,244,429

 

 

$

165,990

 

 

$

221,691

 

 

$

(1,495,978

)

 

$

2,088,184

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(23,995

)

 

 

(23,995

)

 

 

—

 

 

 

(43,188

)

 

 

47,990

 

 

 

(43,188

)

Other comprehensive income related to cash flow hedges

 

 

5,234

 

 

 

—

 

 

 

9,782

 

 

 

—

 

 

 

(7,021

)

 

 

7,995

 

Other comprehensive income (loss)

 

 

(18,761

)

 

 

(23,995

)

 

 

9,782

 

 

 

(43,188

)

 

 

40,969

 

 

 

(35,193

)

Comprehensive income

 

 

1,933,291

 

 

 

1,220,434

 

 

 

175,772

 

 

 

178,503

 

 

 

(1,455,009

)

 

 

2,052,991

 

Less: Comprehensive income attributable to noncontrolling interests

 

 

—

 

 

 

—

 

 

 

(44,536

)

 

 

(75,164

)

 

 

—

 

 

 

(119,700

)

Comprehensive income attributable to MGM Resorts International

 

$

1,933,291

 

 

$

1,220,434

 

 

$

131,236

 

 

$

103,339

 

 

$

(1,455,009

)

 

$

1,933,291

 


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION

 

 

Year Ended December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

Non-Guarantor

Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

Parent

 

 

Guarantor

Subsidiaries

 

 

MGP

 

 

Other

 

 

Elimination

 

 

Consolidated

 

 

 

(In thousands)

 

Cash flows from operating activities

 

 

 

Net cash provided by (used in) operating activities

 

$

(584,252

)

 

$

1,152,083

 

 

$

482,578

 

 

$

1,156,002

 

 

$

—

 

 

$

2,206,411

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures, net of construction payable

 

 

—

 

 

 

(482,024

)

 

 

(488

)

 

 

(1,381,570

)

 

 

—

 

 

 

(1,864,082

)

Dispositions of property and equipment

 

 

—

 

 

 

502

 

 

 

—

 

 

 

216

 

 

 

—

 

 

 

718

 

Acquisition of National Harbor, net of cash acquired

 

 

—

 

 

 

—

 

 

 

(462,500

)

 

 

—

 

 

 

462,500

 

 

 

—

 

Investments in and advances to unconsolidated affiliates

 

 

—

 

 

 

(16,727

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(16,727

)

Distributions from unconsolidated affiliates

 

 

—

 

 

 

301,211

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

301,211

 

Intercompany accounts

 

 

462,500

 

 

 

(1,186,942

)

 

 

—

 

 

 

—

 

 

 

724,442

 

 

 

—

 

Other

 

 

—

 

 

 

(1,754

)

 

 

—

 

 

 

42

 

 

 

—

 

 

 

(1,712

)

Net cash provided by (used in) investing activities

 

 

462,500

 

 

 

(1,385,734

)

 

 

(462,988

)

 

 

(1,381,312

)

 

 

1,186,942

 

 

 

(1,580,592

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net borrowings (repayments) under bank credit facilities - maturities of 90 days or less

 

 

122,500

 

 

 

—

 

 

 

(466,875

)

 

 

359,376

 

 

 

—

 

 

 

15,001

 

Issuance of long-term debt

 

 

—

 

 

 

—

 

 

 

350,000

 

 

 

—

 

 

 

—

 

 

 

350,000

 

Retirement of senior notes and senior debentures

 

 

(502,669

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(502,669

)

Debt issuance costs

 

 

—

 

 

 

—

 

 

 

(5,598

)

 

 

(4,379

)

 

 

—

 

 

 

(9,977

)

Issuance of MGM Growth Properties Class A shares, net

 

 

—

 

 

 

—

 

 

 

387,548

 

 

 

—

 

 

 

—

 

 

 

387,548

 

Dividends paid to common shareholders

 

 

(252,014

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(252,014

)

MGP dividends paid to consolidated subsidiaries

 

 

—

 

 

 

—

 

 

 

(290,091

)

 

 

—

 

 

 

290,091

 

 

 

—

 

Distributions to noncontrolling interest owners

 

 

—

 

 

 

—

 

 

 

(95,344

)

 

 

(75,058

)

 

 

—

 

 

 

(170,402

)

Purchases of common stock

 

 

(327,500

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(327,500

)

Intercompany accounts

 

 

1,042,111

 

 

 

248,626

 

 

 

—

 

 

 

186,296

 

 

 

(1,477,033

)

 

 

—

 

Other

 

 

(33,801

)

 

 

(11,644

)

 

 

—

 

 

 

(13,320

)

 

 

—

 

 

 

(58,765

)

Net cash provided by (used in) financing activities

 

 

48,627

 

 

 

236,982

 

 

 

(120,360

)

 

 

452,915

 

 

 

(1,186,942

)

 

 

(568,778

)

Effect of exchange rate on cash

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3,627

)

 

 

—

 

 

 

(3,627

)

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) for the period

 

 

(73,125

)

 

 

3,331

 

 

 

(100,770

)

 

 

223,978

 

 

 

—

 

 

 

53,414

 

Balance, beginning of period

 

 

99,995

 

 

 

307,713

 

 

 

360,492

 

 

 

678,381

 

 

 

—

 

 

 

1,446,581

 

Balance, end of period

 

$

26,870

 

 

$

311,044

 

 

$

259,722

 

 

$

902,359

 

 

$

—

 

 

$

1,499,995

 


NOTE 20 — SELECTED QUARTERLY FINANCIAL RESULTS (UNAUDITED)

 

 

Quarter

 

 

 

First

 

 

Second

 

 

Third

 

 

Fourth

 

 

Total

 

2019

 

(In thousands, except per share data)

 

Net revenues

 

$

3,176,911

 

 

$

3,223,243

 

 

$

3,314,382

 

 

$

3,185,136

 

 

$

12,899,672

 

Operating income

 

 

370,260

 

 

 

371,485

 

 

 

238,381

 

 

 

2,960,089

 

 

 

3,940,215

 

Net income

 

 

66,157

 

 

 

76,169

 

 

 

6,104

 

 

 

2,065,950

 

 

 

2,214,380

 

Net income (loss) attributable to MGM Resorts

   International

 

 

31,297

 

 

 

43,405

 

 

 

(37,133

)

 

 

2,011,577

 

 

 

2,049,146

 

Earnings (loss) per share - Basic

 

$

0.05

 

 

$

0.08

 

 

$

(0.08

)

 

$

3.94

 

 

$

3.90

 

Earnings (loss) per share - Diluted

 

$

0.05

 

 

$

0.08

 

 

$

(0.08

)

 

$

3.91

 

 

$

3.88

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

$

2,822,237

 

 

$

2,858,695

 

 

$

3,029,302

 

 

$

3,052,862

 

 

$

11,763,096

 

Operating income

 

 

359,757

 

 

 

363,075

 

 

 

410,903

 

 

 

335,751

 

 

 

1,469,486

 

Net income

 

 

266,301

 

 

 

140,423

 

 

 

171,410

 

 

 

5,760

 

 

 

583,894

 

Net income (loss) attributable to MGM Resorts

   International

 

 

223,444

 

 

 

123,777

 

 

 

142,878

 

 

 

(23,327

)

 

 

466,772

 

Earnings (loss) per share - Basic

 

$

0.39

 

 

$

0.21

 

 

$

0.26

 

 

$

(0.06

)

 

$

0.82

 

Earnings (loss) per share - Diluted

 

$

0.38

 

 

$

0.21

 

 

$

0.26

 

 

$

(0.06

)

 

$

0.81

 

Because earnings per share amounts are calculated using the weighted average number of common and dilutive common equivalent shares outstanding during each quarter, the sum of the per share amounts for the four quarters does not equal the total earnings per share amounts for the year. The following sections list certain items affecting comparability of quarterly and year-to-date results and related impact on earnings (loss) per share - diluted. Additionalfurther information related to these items is included elsewhere in the notes to the accompanying financial statements.

Certain items affecting comparability for the year ended December 31, 2019 are as follows:

•

First Quarter. None

Mandalay Bay and MGM Grand Las Vegas lease.

•

Second Quarter. None

•

Third Quarter. The Company recorded a $219 million non-cash impairment charge ($0.33 per share in the quarter and $0.32 per share in the full year of 2019) related to the Circus Circus Las Vegas and adjacent land; and

•

Fourth Quarter. The Company recorded a $2.7 billion gain ($4.04 per share in the quarter and $3.95 per share in the full year of 2019) related to the sale and lease back of Bellagio. Additionally, the Company recorded loss on early retirement of debt of $142 million ($0.21 per share) in the quarter and $198 million ($0.28 per share) in the full year of 2019.

Certain items affecting comparability for the year ended December 31, 2018 are as follows:

•

First Quarter. The Company recorded a $72 million tax benefit ($0.13 per share in the quarter) related to a measurement period adjustment of the Tax Act;

•

Second Quarter. None;

•

Third Quarter. The Company recorded a $45 million gain ($0.07 per share in the quarter and $0.06 per share in the full year of 2018) related to the sale of Grand Victoria. Additionally, the Company recorded a $12 million gain ($0.02 per share in the quarter and full year of 2018) related to the sale of Mandarin Oriental; and

•

Fourth Quarter. The Company recorded business interruption insurance proceeds of $24 million ($0.04 per share in the quarter and $0.03 per share in the full year of 2018) primarily at Mandalay Bay. Additionally, the Company recorded a $92 million tax expense ($0.17 per share in the quarter) related to the Tax Act.

106



SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

(In thousands)

 

 

Balance at

 

 

Provision for

 

 

Write-offs,

 

 

 

 

 

 

 

Beginning of

 

 

Doubtful

 

 

Net of

 

 

Balance at

 

 

 

Period

 

 

Accounts

 

 

Recoveries

 

 

End of Period

 

Allowance for doubtful accounts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2019

 

$

90,775

 

 

$

39,270

 

 

$

(35,484

)

 

$

94,561

 

Year Ended December 31, 2018

 

 

92,571

 

 

 

39,762

 

 

 

(41,558

)

 

 

90,775

 

Year Ended December 31, 2017

 

 

97,920

 

 

 

20,603

 

 

 

(25,952

)

 

 

92,571

 

 

 

Balance at

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of

 

 

 

 

 

 

 

 

 

 

Balance at

 

 

 

Period

 

 

Increase

 

 

Decrease

 

 

End of Period

 

Deferred income tax valuation allowance:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2019

 

$

2,477,703

 

 

$

96,353

 

 

$

—

 

 

$

2,574,056

 

Year Ended December 31, 2018

 

 

2,513,738

 

 

 

—

 

 

 

(36,035

)

 

 

2,477,703

 

Year Ended December 31, 2017

 

 

2,583,274

 

 

 

—

 

 

 

(69,536

)

 

 

2,513,738

 




 Balance at Beginning of PeriodExpected Credit LossesWrite-offs, Net of RecoveriesBalance at End of Period
Loss reserve:    
Year Ended December 31, 2021$126,589 $21,852 $(20,093)$128,348 
Year Ended December 31, 202094,561 71,422 (39,394)126,589 
Year Ended December 31, 201990,775 39,270 (35,484)94,561 

 Balance at Beginning of PeriodIncreaseDecreaseBalance at End of Period
Deferred income tax valuation allowance:    
Year Ended December 31, 2021$2,875,595 $8,667 $— $2,884,262 
Year Ended December 31, 20202,574,056 301,539 — 2,875,595 
Year Ended December 31, 20192,477,703 96,353 — 2,574,056 


107

ITEM 9.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE


None.



ITEM 9A.CONTROLS    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures


Our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“the Exchange Act”)) were effective as of December 31, 20192021 to provide reasonable assurance that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and regulations and to provide that such information is accumulated and communicated to management to allow timely decisions regarding required disclosures. This conclusion is based on an evaluation as required by Rules 13a-15(b) and 15d-15(b) under the Exchange Act conducted under the supervision and participation of the principal executive officer and principal financial officer along with company management.


Changes in Internal Control over Financial Reporting


During the quarter ended December 31, 2019,2021, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have commenced finance modernization initiatives to implement new accounting systems, which are expected to improve the efficiency of certain business processes. We will continue to monitor and evaluate our internal control over financial reporting throughout the transformation.


Management’s Annual Report on Internal Control over Financial Reporting


Management’s Responsibilities


Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Sections 13a-15(f) and 15d-15(f) of the Exchange Act) for MGM Resorts International and subsidiaries (the “Company”).


Objective of Internal Control over Financial Reporting


In establishing adequate internal control over financial reporting, management has developed and maintained a system of internal control, policies and procedures designed to provide reasonable assurance that information contained in the accompanying consolidated financial statements and other information presented in this annual report is reliable, does not contain any untrue statement of a material fact or omit to state a material fact, and fairly presents in all material respects the financial condition, results of operations and cash flows of the Company as of and for the periods presented in this annual report. These include controls and procedures designed to ensure that this information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate for all timely decisions regarding required disclosure. Significant elements of the Company’s internal control over financial reporting include, for example:

•

Hiring skilled accounting personnel and training them appropriately;

•

Written accounting policies;

•Hiring skilled accounting personnel and training them appropriately;

Written documentation of accounting systems and procedures;

•Written accounting policies;

Segregation of incompatible duties;

•Written documentation of accounting systems and procedures;

Internal audit function to monitor the effectiveness of the system of internal control; and

•Segregation of incompatible duties;

Oversight by an independent Audit Committee of the Board of Directors.

•Internal audit function to monitor the effectiveness of the system of internal control; and
•Oversight by an independent Audit Committee of the Board of Directors.

Management’s Evaluation


Management, with the participation of the Company’s principal executive officer and principal financial officer, has evaluated the Company’s internal control over financial reporting using the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.


Based on its evaluation as of December 31, 2019,2021, management believes that the Company’s internal control over financial reporting is effective in achieving the objectives described above.


108

The Company’s independent registered public accounting firm’s report on the effectiveness of our internal control over financial reporting appears herein.



ITEM 9B.    

OTHER INFORMATION


None.



ITEM 9C.    DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.
109

PART III



ITEM 10.

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE


We incorporate by reference the information appearing under “Information about our Executive Officers” in Item 1 of this Form 10-K and under “Election of Directors” and “Corporate Governance” in our definitive Proxy Statement for our 20202022 Annual Meeting of Stockholders, which we expect to file with the SEC on or before March 27, 2020within 120 days after December 31, 2021 (the “Proxy Statement”).


ITEM 11.

ITEM 11.    EXECUTIVE COMPENSATION


We incorporate by reference the information appearing under “Director Compensation” and “Executive Compensation” and “Corporate Governance — Human Capital and Compensation Committee Interlocks and Insider Participation” and “Compensation“Human Capital and Compensation Committee Report” in the Proxy Statement.


ITEM 12.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


We incorporate by reference the information appearing under “Principal Stockholders” and “Election of Directors” in the Proxy Statement.


Equity Compensation Plan Information


The following table includes information about our equity compensation plans at December 31, 2019:

2021:

 

 

Securities to be issued

 

 

Weighted average

 

 

Securities available for

 

 

 

upon exercise of

 

 

exercise price of

 

 

future issuance under

 

 

 

outstanding options,

 

 

outstanding options,

 

 

equity compensation

 

 

 

warrants and rights

 

 

warrants and rights

 

 

plans

 

 

 

(In thousands, except per share data)

 

Equity compensation plans approved by

   security holders (1)

 

 

10,991

 

 

$

23.16

 

 

 

20,310

 

Equity compensation plans not approved by

   security holders

 

 

—

 

 

 

—

 

 

 

—

 


 Securities to be issued upon exercise of outstanding options, warrants and rightsWeighted average exercise price of outstanding options, warrants and rightsSecurities available for future issuance under equity compensation plans
 (In thousands, except per share data)
Equity compensation plans approved by security holders (1)
6,539$24.33 20,080
Equity compensation plans not approved by security holders———

(1)

As of December 31, 2019,2021, we had 4.34.0 million restricted stock units and 2.51.7 million performance share units outstanding that do not have an exercise price; therefore, the weighted average per share exercise price only relates to outstanding stock appreciation rights. The amount included in the securities outstanding above for performance share units assumes that each target price is achieved.


ITEM 13.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORS, INDEPENDENCE


We incorporate by reference the information appearing under “Transactions with Related Persons” and “Corporate Governance” in the Proxy Statement.


ITEM 14.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES


We incorporate by reference the information appearing under “Selection“Ratification of Selection of Independent Registered Public Accounting Firm” in the Proxy Statement.


110


PART IV


ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)(1).Financial Statements. The following consolidated financial statements of the Company are filed as part of this report under Item 8 – “Financial Statements and Supplementary Data.”


52

59

53

Consolidated Balance Sheets — December 31, 20192021 and 20182020

55

62

Years Ended December 31, 2019, 20182021, 2020 and 2017

2019

Consolidated Statements of Operations

56

63

Consolidated Statements of Comprehensive Income (Loss)

57

64

Consolidated Statements of Cash Flows

58

65

Consolidated Statements of Stockholders’ Equity

59

66

60

67


(a)(2).Financial Statement Schedule. The following financial statement schedule of the Company is filed as part of this report under Item 8 – “Financial Statements and Supplementary Data.”

Years Ended December 31, 2019, 20182021, 2020 and 2017

2019

104

107


The financial information included in the financial statement schedule should be read in conjunction with the consolidated financial statements. All other financial statement schedules have been omitted because they are not applicable, or the required information is included in the consolidated financial statements or the notes thereto.

(a)(3).

Exhibits.

(a)(3).    Exhibits.

Exhibit
Number

Description

2.1

Exhibit
Number

Description

2.1
Equity Purchase Agreement by and between MGM CC Holdings, Inc., Infinity World Development Corp. and, solely for purposes of Article X thereof, MGM Resorts International, dated as of June 30, 2021 (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on July 1, 2021).
2.2
Master Transaction Agreement by and among MGM Resorts International, Bellagio,CityCenter Land, LLC and BCORE Paradise ParentAce Purchaser LLC, dated as of October 15, 2019June 30, 2021 (incorporated by reference to Exhibit 2.2 of the Company’s Current Report on Form 8-K filed on July 1, 2021).
2.3
Master Transaction Agreement, by and among MGM Resorts International, MGM Growth Properties LLC, MGM Growth Properties Operating Partnership LP, VICI Properties Inc., Venus Sub LLC, VICI Properties L.P. and VICI Properties OP LLC, dated as of August 4, 2021 (incorporated by reference to Exhibit 2.1 of MGM Resort International’sthe Company’s Current Report on Form 8-K filed with the SEC on October 16, 2019)August 5, 2021).

3.1

2.4

Purchase Agreement by and among BRE Spade Parent LLC, BRE Spade PropCo Holdings LLC, BRE Spade Mezz 1 LLC, BRE Spade Voteco LLC and MGM Resorts International, dated as of September 26, 2021 (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on September 28, 2021).
2.5
Purchase Agreement by and between MGM Resorts International and HR Nevada, LLC, dated as of December 13, 2021 (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on December 14, 2021).
3.1
Amended and Restated Certificate of Incorporation of the Company, dated June 14, 2011 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2011).

3.2

Amended and Restated Bylaws of the Company, effective January 13, 20162021 (incorporated by reference to Exhibit 3.1 toof the Company’s Current Report on Form 8-K filed on January 15, 2016)2021).

4.1(1)

Indenture, dated November 15, 1996, by and between Mandalay and Wells Fargo Bank (Colorado), N.A., as Trustee (the “Mandalay November 1996 Indenture”) (incorporated by reference to Exhibit 4(e) to the Mandalay October 1996 10-Q).

111

4.1(2)

Supplemental Indenture, dated as of November 15, 1996, to the Mandalay November 1996 Indenture, with respect to $150 million aggregate principal amount of 7.0% Senior Notes due 2036 (incorporated by reference to Exhibit 4(f) to the Mandalay October 1996 10-Q).

4.1(3)

7.0% Senior Notes due February 15, 2036, in the principal amount of $150,000,000 (incorporated by reference to Exhibit 4(g) to the Mandalay October 1996 10-Q).

4.1(4)

Indenture, dated March 22, 2012, between the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 toof the Company’s Current Report on Form 8-K filed on March 22, 2012).

4.1(5)

First Supplemental Indenture, dated March 22, 2012, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee with respect to $1.0 billion aggregate principal amount of 7.75% senior notes due 2022 (incorporated by reference to Exhibit 4.2 toof the Company’s Current Report on Form 8-K filed on March 22, 2012).


4.1(6)

4.1(6)

Fourth Supplemental Indenture, dated November 25, 2014, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee, to the Indenture, dated as of March 22, 2012, among the Company and U.S. Bank National Association, as trustee, relating to the 6.000% senior notes due 2023 (incorporated by reference to Exhibit 4.1 toof the Company’s Current Report on Form 8-K filed on November 25, 2014).

4.1(7)

Fifth Supplemental Indenture, dated August 19, 2016, among MGM Resorts International, the guarantors named therein and U.S. Bank National Association, as trustee, to the Indenture, dated as of March 22, 2012, among MGM Resorts International and U.S. Bank National Association, as trustee, relating to the 4.625% senior notes due 2026 (incorporated by reference to Exhibit 4.1 toof the Company’s Current Report on Form 8-K filed on August 19, 2016).

4.1(8)

Sixth Supplemental Indenture, dated June 18, 2018, among MGM Resorts International, the guarantors named therein and U.S. Bank National Association, as trustee, to the Indenture, dated as of March 22, 2012, among MGM Resorts International and U.S. Bank National Association, as trustee, relating to the 5.750% senior notes due 2025 (incorporated by reference to Exhibit 4.1 toof the Company’s Current Report on Form 8-K filed on June 18, 2018).

4.1(9)

Seventh Supplemental Indenture, dated April 10, 2019, among MGM Resorts International, the guarantors named therein and U.S. Bank National Association, as trustee, to the Indenture, dated as of March 22, 2012, among MGM Resorts International and U.S. Bank National Association, as trustee, relating to the 5.500% senior notes due 2027 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on April 10, 2019).

4.1(10)

Eighth Supplemental Indenture, dated May 4, 2020, among MGM Resorts International, the guarantors named therein and U.S. Bank National Association, as trustee, to the Indenture, dated as of March 22, 2012, among MGM Resorts International and U.S. Bank National Association, as trustee, relating to the 6.750% senior notes due 2025 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on May 4, 2020).
4.1(11)
Ninth Supplemental Indenture, dated October 13, 2020, among MGM Resorts International, the guarantors named therein and U.S. Bank National Association, as trustee, to the Indenture, dated as of March 22, 2012, among MGM Resorts International and U.S. Bank National Association, as trustee, relating to the 4.750% senior notes due 2028 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on October 13, 2020).
4.1(12)
Indenture, dated as of August 12, 2016, among MGM Growth Properties Operating Partnership LP, MGP Finance Co-Issuer, Inc., the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K of MGM Growth Properties LLC filed on August 12, 2016).

4.1(11)

4.1(13)

Indenture, dated as of April 20, 2016, among MGP Escrow Issuer, LLC and MGP Escrow Co-Issuer, Inc. and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 toof the Company’s Current Report on Form 8-K filed April 21, 2016).

4.1(12)

4.1(14)

Indenture, dated as of September 21, 2017, among MGM Growth Properties Operating Partnership LP, MGP Finance Co-Issuer, Inc., the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on September 21, 2017).

4.1(13)

4.1(15)

Indenture, dated as of January 25, 2019, among MGM Growth Properties Operating Partnership LP, MGP Finance Co-Issuer, Inc., the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on January 25, 2019).

4.1(14)

4.1(16)

Supplemental Indenture to the Indentures, dated as of June 15, 2018, among MGP OH, Inc., MGP Finance Co-Issuer, Inc. and MGM Growth Properties Operating Partnership LP (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on August 7, 2018).

112

4.1(15)

4.1(17)

Second Supplemental Indenture to the Indentures, dated as of July 10, 2018, among Northfield Park Associates LLC, Cedar Downs OTB, LLC, MGP Finance Co-Issuer, Inc. and MGM Growth Properties Operating Partnership LP (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on November 6, 2018).

4.1(16)

4.1(18)

Third Supplemental Indenture to the Indentures, dated as of January 29, 2019, among MGP Yonkers Realty Sub, LLC, YRL Associates, L.P., MGP Finance Co-Issuer, Inc., MGM Growth Properties Operating Partnership LP, the Subsidiary Guarantors named therein, and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on May 7, 2019).

4.1(17)

4.1(19)

Fourth Supplemental Indenture to the Indentures, dated as of March 29, 2019, among MGP, MGP OH Propco, LLC, MGP Finance Co-Issuer, Inc., MGM Growth Properties Operating Partnership LP, the Subsidiary Guarantors named therein, and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.3 toof the Company’s Quarterly Report on Form 10-Q of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on May 7, 2019).


4.1(20)

4.1(18)

Indenture governing the 5.375% senior notes due 2024, dated as of May 16, 2019, between MGM China Holdings Limited and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on May 16, 2019).

4.1(19)

4.1(21)

Indenture governing the 5.875% senior notes due 2026, dated as of May 16, 2019, between MGM China Holdings Limited and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on May 16, 2019).

4.2

4.1(22)

Indenture, dated as of June 5, 2020, among MGM Growth Properties Operating Partnership LP, MGP Finance Co-Issuer, Inc., the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on June 5, 2020).
4.1(23)
Indenture governing the 5.25% senior notes due 2025, dated as of June 18. 2020, between MGM China Holdings Limited and Wilmington Savings Fund Society, FSB, as trustee (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K filed on June 22, 2020).
4.1(24)
Indenture, dated as of November 19, 2020, among MGM Growth Properties Operating Partnership LP, MGP Finance Co-Issuer, Inc., the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on November 20, 2020).
4.1(25)
Indenture governing the 4.75% senior notes due 2027, dated as of March 31, 2021, between MGM China Holdings Limited and Wilmington Savings Fund Society, FSB, as trustee (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K filed on March 31, 2021).
4.1(26)
Seventh Supplemental Indenture, dated as of September 23, 2021, to the Indenture dated as of April 20, 2016, by and among MGM Growth Properties Operating Partnership LP, MGP Finance Co-Issuer, Inc., the Subsidiary Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on September 27, 2021).
4.1(27)
Seventh Supplemental Indenture, dated as of September 23, 2021, to the Indenture dated as of August 12, 2016, by and among MGM Growth Properties Operating Partnership LP, MGP Finance Co-Issuer, Inc., the Subsidiary Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on September 27, 2021).
4.1(28)
Seventh Supplemental Indenture, dated as of September 23, 2021, to the Indenture dated as of September 21, 2017, by and among MGM Growth Properties Operating Partnership LP, MGP Finance Co-Issuer, Inc., the Subsidiary Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.3 of theCurrent Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filedon September 27, 2021).
4.1(29)
Seventh Supplemental Indenture, dated as of September 23, 2021, to the Indenture dated as of January 25, 2019, by and among MGM Growth Properties Operating Partnership LP, MGP Finance Co-Issuer, Inc., the Subsidiary Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.4 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on September 27, 2021).
4.1(30)
First Supplemental Indenture, dated as of September 23, 2021, to the Indenture dated as of June 5, 2020, by and among MGM Growth Properties Operating Partnership LP, MGP Finance Co-Issuer, Inc., the Subsidiary Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on September 27, 2021).
113

4.1(31)
First Supplemental Indenture, dated as of September 23, 2021, to the Indenture dated as of November 19, 2020, by and among MGM Growth Properties Operating Partnership LP, MGP Finance Co-Issuer, Inc., the Subsidiary Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.6 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on September 27, 2021).
4.2
Guarantee (Mandalay Resort Group 7.0% Senior Notes due 2036), dated as of April 25, 2005, by the Company and certain subsidiaries of the Company, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.22 to of the September 2005 10-Q)Company's Quarterly Report on Form 10-Qfiled on November 9, 2005).

4.3

Amended and Restated Registration Rights Agreement, between MGM Growth Properties LLC and MGM Resorts International, dated as of October 5, 2017 (incorporated by reference to Exhibit 10.8 of the Annual Report on Form 10-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on March 1, 2018).

4.4

Description of MGM Common Stock

10.1(1)

Amended and Restated Credit Agreement, dated as of April 25, 2016, among MGM Resorts International, the Lenders from time to time party thereto and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.2 to4.4 of the Company’s CurrentCompany's Annual Report on Form 8-K10-K filed April 25, 2016)on February 26, 2021).

10.1(2)

10.1(1)

First Amendment, dated as of December 21, 2018, to the Amended and Restated Credit Agreement, dated as of April 25, 2016 among the Company, the Administrative Agent and the other parties lenders thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 28, 2018).

10.1(3)

Second Amendment, dated as of November 14, 2019, to the Amended and Restated Credit Agreement, dated as of April 25, 2016 among MGM, the lenders from time to time party thereto and the Administrative Agent (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on November 18, 2019).

10.1(4)

Credit Agreement, dated as of April 25, 2016, among MGM Growth Properties Operating Partnership LP, the financial institutions referred to as Lenders therein and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.17 of the Current Report on Form 8-K of MGM Growth Properties LLC filed on April 25, 2016).

10.1(5)

10.1(2)

First Amendment to Credit Agreement, dated October 26, 2016, among MGM Growth Properties Operating Partnership LP, the other loan parties and lenders named therein and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of MGM Growth Properties LLC filed on October 26, 2016).

10.1(6)

10.1(3)

Second Amendment to Credit Agreement, dated May 1, 2017, among MGM Growth Properties Operating Partnership LP, the other loan parties and lenders named therein and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of MGM Growth Properties LLC filed on May 1, 2017).

10.1(4)

10.1(7)

Third Amendment to Credit Agreement, dated March 23, 2018, among MGM Growth Properties Operating Partnership LP, the other loan parties and lenders named therein and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of MGM Growth Properties LLC filed on March 26, 2018).

10.1(8)

10.1(5)

Fourth Amendment to Credit Agreement, dated June 14, 2018, among MGM Growth Properties Operating Partnership LP, the other loan parties and lenders named therein and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of MGM Growth Properties LLC filed on June 18, 2018).


10.1(6)

10.1(9)

Sixth SupplementalFifth Amendment to Credit Agreement, dated April 15, 2019, betweenas of February 14, 2020, among MGM China Holdings Limited, MGM Grand Paradise (HK) Limited, Superemprego Limitada, MGM – Security Services, LTD.Growth Properties Operating Partnership LP, the other loan parties and lenders named therein and Bank of America, N.A., as Facility Agent administrative agent (incorporated by reference to Exhibit 10.5 of MGM Growth Properties LLC Current Report on Form 8-K filed on February 18, 2020).

(incorporated10.1(7)
Credit Agreement, dated as of November 24, 2021, among the Company, Bank of America, N.A., as administrative agent, and certain lenders party thereto (incorporated by reference to Exhibit 10.1 of the Company’s QuarterlyCurrent Report on Form 10-Q8-K filed on August 8, 2019)November 26, 2021)..

10.1(10)

10.1(8)

Revolving Credit Facility Agreement, dated August 12, 2019 (the “2019 Revolving Credit Facility”), by and among MGM China Holdings Limited and certain Arrangers and Lenders party thereto (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on August 13, 2019).

10.1(11)

10.1(9)

Amendment Letter to the 2019 Revolving Credit Facility Agreement, dated February 18, 2020, by and among MGM China Holdings Limited and certain Arrangers and Lenders Party thereto (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on May 1, 2020).
10.1(10)
Amendment Letter to the 2019 Revolving Credit Facility Agreement, dated April 9, 2020, by and among MGM China Holdings Limited and certain Arrangers and Lenders Party thereto (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on August 3, 2020).
10.1(11)
Revolving Credit Facility Agreement, dated May 26, 2020 (the “2020 Revolving Credit Facility”), by and among MGM China Holdings Limited and certain Lenders party thereto (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on May 29, 2020).
10.1(12)
Increase Confirmation to 2020 Revolving Credit Facility dated as of June 29, 2020 between the Increase Lender and the Facility Agent (incorporated by reference to Exhibit 10.1(13) of the Company’s Annual Report on Form 10-K filed on February 26, 2021).
10.1(13)
Amendment Letter to the 2019 Revolving Credit Facility, dated October 5, 2020, by and among MGM China Holdings Limited and certain Arrangers and Lenders Party thereto (incorporated by reference to Exhibit 10.1(14) of the Company’s Annual Report on Form 10-K filed on February 26, 2021).
114

10.1(14)
Amendment Letter to the 2020 Revolving Credit Facility, dated October 5, 2020, by and among MGM China Holdings Limited and certain Arrangers and Lenders Party thereto (incorporated by reference to Exhibit 10.1(15) of the Company’s Annual Report on Form 10-K filed on February 26, 2021).
10.1(15)
Amendment Letter to the 2019 Revolving Credit Facility, dated February 24, 2021, by and among MGM China Holdings Limited and certain Arrangers and Lenders Party thereto (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on May 3, 2021).
10.1(16)
Amendment Letter to the 2020 Revolving Credit Facility, dated February 24, 2021, by and among MGM China Holdings Limited and certain Arrangers and Lenders Party thereto (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q filed on May 3, 2021).
10.1(17)
Guaranty Agreement, dated as of November 15, 2019 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 18, 2019).

10.2(1)

10.1(18)

Guaranty Agreement, dated as of February 14, 2020 (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on May 1, 2020).
10.2(1)
Subconcession Contract for the Exploitation of Games Fortune and Chance or Other Games in Casino in the Special Administrative Region of Macau, dated April 19, 2005, between Sociedade de Jogos de Macau, S.A., as concessionaire, and MGM Grand Paradise S.A., as subconcessionaire (incorporated by reference to Exhibit 10.1 toof the Company’s Quarterly Report on Form 10-Q filed on November 7, 2011).

10.2(2)

Sub-Concession Extension Contract, dated as of March 15, 2019, between MGM Grand Paradise Limited and Sociedade de Jogos de Macau, S.A. (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on March 18, 2019).

10.2(3)

MGM SJM Agreement, dated as of March 15, 2019, between MGM Grand Paradise Limited and Sociedade de Jogos de Macau, S.A. (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on March 18, 2019).

10.2(4)

Land Concession Agreement, dated as of April 18, 2005, relating to the MGM Macau resort and casino between the Special Administrative Region of Macau and MGM Grand Paradise, S.A. (incorporated by reference to Exhibit 10.2 toof the Company’s Quarterly Report on Form 10-Q filed on August 9, 2011).

10.2(5)

Land Concession Agreement, effective as of January 9, 2013, relating to the MGM Macau resort and casino between the Special Administrative Region of Macau and MGM Grand Paradise S.A. (incorporated by reference to Exhibit 10.2(4) toof the Company’s Annual Report on Form 10-K filed on March 1, 2013).

10.3(1)

10.4(1)

Third Amended and Restated Limited Liability Company Agreement of CityCenter Holdings, LLC, dated December 22, 2015 (incorporated by reference to Exhibit 10.3(1) to the Company’s Annual Report on Form 10-K filed on February 29, 2016).

10.3(2)

Company Stock Purchase and Support Agreement, dated August 21, 2007, by and between the Company and Infinity World Investments, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed August 27, 2007).

10.3(3)

Amendment No. 1, dated October 17, 2007, to the Company Stock Purchase and Support Agreement by and between the Company and Infinity World Investments, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 23, 2007).

10.4(1)

Master Lease between MGP Lessor, LLC and MGM Lessee, LLC, dated April 25, 2016 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of MGM Growth Properties LLC filed on April 25, 2016).

10.4(2)

First Amendment to Master Lease, dated as of August 1, 2016, between MGP Lessor, LLC and MGM Lessee, LLC (incorporated by reference to Exhibit 10.1 toof the Company’s Current Report on Form 8-K filed on August 1, 2016).

10.4(3)

Second Amendment to Master Lease, dated as of October 5, 2017, between MGP Lessor, LLC and MGM Lessee, LLC (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on October 6, 2017).

10.4(4)

Third Amendment to Master Lease Agreement, dated as of January 29, 2019, between MGP Lessor, LLC and MGM Lessee, LLC (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on January 29, 2019).


10.4(5)

10.4(5)

Fourth Amendment to Master Lease Agreement, dated as of March 7, 2019, between MGP Lessor, LLC and MGM Lessee, LLC (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP filed on March 8, 2019).

10.4(6)

Fifth Amendment to Master Lease Agreement, dated as of April 1, 2019, between MGP Lessor, LLC and MGM Lessee, LLC (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of MGM Growth Properties LLC and MGM Growth Properties Operating Partnership LP on Form 8-K filed on April 4, 2019).

10.4(7)

Sixth Amendment to Master Lease, by and between MGP Lessor, LLC and MGP Lessee, LLC, dated as of February 14, 2020 (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed with the Commission on February 18, 2020).
10.4(8)
Seventh Amendment to Master Lease Agreement, dated as of October 29, 2021, between MGP Lessor, LLC and MGM Lessee, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on October 29, 2021).
10.4(9)
Lease, by and between BCORE Paradise LLC and Bellagio, LLC, dated as of November 15, 2019 (incorporated by reference to Exhibit 10.1 toof the Company’s Current Report on Form 8-K filed on November 18, 2019).

115

10.4(8)

10.4(10)

First Amendment to Lease, by and between BCORE Paradise LLC and Bellagio, LLC, dated as of April 14, 2021 (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on August 6, 2021).
10.4(11)
Lease, by and between Mandalay PropCo, LLC, MGM Grand PropCo, LLC and MGM Lessee II, LLC, dated as of February 14, 2020 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on February 18, 2020).
10.4(12)
Master Lease by and among Ace A PropCo LLC, Ace V PropCo LLC and MGM Lessee III, LLC, dated as of September 28, 2021 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on September 28, 2021).
10.4(13)
Tax Protection Agreement, by and among Bellagio, LLC, BCORE Paradise Parent LLC and BCORE Paradise JV LLC, dated as of November 15, 2019 (incorporated by reference to Exhibit 10.2 toof the Company’s Current Report on Form 8-K filed on November 18, 2019).

10.4(14)

Tax Protection Agreement, by and among MGM Resorts International, MGM Growth Properties Operating Partnership LP and MGP BREIT Venture 1 LLC, dated as of February 14, 2020 (incorporated by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K filed on February 18, 2020).
*10.5(1)

Amended and Restated 2005 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 toof the Company’s Current Report on Form 8-K filed on June 10, 2014).

*10.5(2)

Second Amended and Restated Annual Performance-Based Incentive Plan for Executive Officers (incorporated by reference to Appendix A toof the Company’s Proxy Statement filed on April 20, 2016).

*10.5(3)

Deferred Compensation Plan II, as Amended and Restated, effective December 17, 2014 (incorporated by reference to Exhibit 10.4(6) toof the Company’s Annual Report on Form 10-K filed on March 2, 2015).

*10.5(4)

Supplemental Executive Retirement Plan II, dated as of December 30, 2004 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on January 10, 2005).

*10.5(5)

Amendment No. 1 to the Supplemental Executive Retirement Plan II, dated as of July 10, 2007 (incorporated by reference to Exhibit 10.3(12) toof the 2007 10-K)Company's Annual Report on Form 10-K filed on February 29, 2008).

*10.5(6)

Amendment No. 2 to the Supplemental Executive Retirement Plan II, dated as of October 15, 2007 (incorporated by reference to Exhibit 10.3(14) toof the 2007 10-K)Company's Annual Report on Form 10-K filed on February 29, 2008).

*10.5(7)

Amendment No. 1 to the Supplemental Executive Retirement Plan II, dated as of November 4, 2008 (incorporated by reference to Exhibit 10.2 toof the Company’s Current Report on Form 8-K filed on November 7, 2008).

*10.5(8)

Employment Agreement, effective as of December 13, 2014, between the Company and Robert H. Baldwin (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 13, 2015).

*10.5(9)

Separation Agreement and Complete Release of Claims, between MGM Resorts International and Daniel J. D’Arrigo, dated February 21, 2019 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 22, 2019).

*10.5(10)

Employment Agreement, dated as of October 3, 2016,April 1, 2020, by and between the Company and James J. Murren (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 5, 2016).

*10.5(11)

Employment Agreement, effective as of November 15, 2016, between the Company and Corey Sanders (incorporated by reference to Exhibit 10.2 to the Company’sof the Company's Current Report on Form 8-K filed on December 7, 2016)March 31, 2020).

*10.5(12)

10.5(9)

Employment Agreement, effective as of November 15, 2016,April 1, 2020, by and between the Company and John McManus (incorporated by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K filed on March 31, 2020).
*10.5(10)
Employment Agreement, effective as of July 29, 2020, by and between the Company and William Hornbuckle (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on July 31, 2020).
*10.5(11)
Employment Agreement, effective as of January 11, 2021, by and between the Company’sCompany and Jonathan Halkyard (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on December 7, 2016)January 6, 2021).

*10.5(13)

10.5(12)

Employment Agreement, effective as of November 15, 2016,June 3, 2021, by and between the Company and John McManus (incorporated by references to Exhibit 10.5(14) of the Company’s Annual Report on Form 10-K filed on February 27, 2019).Tilak Mandadi.

*10.5(14)

Employment Agreement, effective as of March 25, 2019, between the Company and Atif Rafiq.10.5(13)


*10.5(15)

Amended and Restated Deferred Compensation Plan for Non-employee Directors, effective as of June 5, 2014 (incorporated by reference to Exhibit 10.1 toof the Company’s Quarterly Report on Form 10-Q filed on August 11, 2014).

*10.5(16)

10.5(14)

Form of Restricted Stock Units Agreement of the Company effective for awards granted in October 2015 and thereafter (incorporated by reference to Exhibit 10.4 toof the Company’s Quarterly Report on Form 10-Q filed on November 6, 2015).

*10.5(17)

10.5(15)

Form of Restricted Stock Units Agreement of the Company (Performance) effective for awards granted in October 2015 and thereafter (incorporated by reference to Exhibit 10.5 toof the Company’s Quarterly Report on Form 10-Q filed on November 6, 2015).

*10.5(18)

10.5(16)

Form of Sign-On RSU Award Agreement (incorporated by reference to Exhibit 10.2 toof the Company’s Current Report on Form 8-K filed on October 5, 2016).

*10.5(19)

10.5(17)

Form of Performance Share UnitsRSU Agreement of the Company, effective for bonus awards granted in March 2014 through March 2015 (incorporated(Named Executive Officer Employment Agreement Awards) (incorporated by reference to Exhibit 10.1 to10.4 of the Company’s QuarterlyCompany's Current Report on Form 10-Q8-K filed on May 8, 2014)March 31, 2020).

116

*10.5(20)

10.5(18)

Form of RSU Agreement (Hornbuckle) (incorporated by reference to Exhibit 10.5 of the Company's Current Report on Form 8-K filed on March 31, 2020).
*10.5(19)
Form of Performance Share Units Agreement of the Company effective for awards granted in October 2015 and thereafter (incorporated by reference to Exhibit 10.6 toof the Company’s Quarterly Report on Form 10-Q filed on November 6, 2015).

*10.5(21)

10.5(20)

Form of Bonus Performance Share Units Agreement of the Company, effective for bonus awards granted in March 2016 and thereafter (incorporated by reference to Exhibit 10.3 toof the Company’s Quarterly Report on Form 10-Q filed on May 6, 2016).

*10.5(22)

10.5(21)

Change of Control Policy for Executive Officers, dated as of November 5, 2012 (incorporated by reference to Exhibit 10.6 toof the Company’s Current Report on Form 8-K filed on November 8, 2012).

*10.5(23)

10.5(22)

Form of Memorandum Agreement re: Changes to Severance and Change of Control Policies (incorporated by reference to Exhibit 10.7 toof the Company’s Current Report on Form 8-K filed on November 8, 2012).

*10.5(24)

10.5(23)

Form of Freestanding Stock Appreciation Right Agreement of the Company effective for awards granted in October 2013 and thereafter (incorporated by reference to Exhibit 10.4(43) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013).

*10.5(25)

Amendment to all Stock Appreciation Right Agreements adopted by the Compensation Committee of the Board of Directors on October 7, 2013 (incorporated by reference to Exhibit 10.4(44) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013).

*10.5(26)

Form of Freestanding Stock Appreciation Right Agreement of the Company effective for awards granted in October 2015 and thereafter (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on November 6, 2015).

*10.5(27)

MGM Growth Properties LLC 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 99.1 of the Registration Statement on Form S-8 of MGM Growth Properties LLC (File No. 333-210832) filed on April 19, 2016).

*10.5(28)

10.5(24)

MGM Growth Properties LLC Form of 2016 Restricted Share Units Agreement (MGM Non-Employee Directors) (incorporated by reference to Exhibit 10.15 of the Current Report on Form 8-K of MGM Growth Properties LLC filed on April 25, 2016).

*10.5(29)

10.5(25)

MGM Growth Properties LLC Form of 2016 Restricted Share Units Agreement (MGM Employees) (incorporated by reference to Exhibit 10.16 of the Current Report on Form 8-K of MGM Growth Properties LLC filed on April 25, 2016).

*10.5(30)

10.5(26)

Retirement Policy for Senior Officers, adopted January 10, 2017 (incorporated by reference to Exhibit 10.1 toof the Company’s Current Report on Form 8-K filed on January 12, 2017).

*10.5(31)

10.5(27)

Amended and Restated Retirement Policy for Senior Officers, dated October 7, 2019.2019 (incorporated by reference to Exhibit 10.5(31) of the Company’s Annual Report on Form 10-K filed on February 27, 2020).


*10.5(28)

*10.5(32)

Form of Letter to Employees re: Existing Equity Awards (incorporated by reference to Exhibit 10.1 toof the Company’s Current Report on Form 8-K filed on March 10, 2017).

*10.5(33)

10.5(29)

Form of Performance Share Unit Agreement (Bonus Payout) (incorporated by reference to Exhibit 10.2 toof the Company’s Current Report on Form 8-K filed on March 10, 2017).

*10.5(34)

10.5(30)

Form of Performance Share Unit Agreement (Annual Grant) (incorporated by reference to Exhibit 10.3 toof the Company’s Current Report on Form 8-K filed on March 10, 2017).

*10.5(35)

10.5(31)

Form of Restricted Stock Unit Agreement (Non-Employee Director) (incorporated by reference to Exhibit 10.4 toof the Company’s Current Report on Form 8-K filed on March 10, 2017).

*10.5(36)

10.5(32)

Form of Restricted Stock Unit Agreement (with Performance Hurdle) (incorporated by reference to Exhibit 10.5 toof the Company’s Current Report on Form 8-K filed on March 10, 2017).

*10.5(37)

10.5(33)

Form of Restricted Stock Unit Agreement (no Performance Hurdle) (incorporated by reference to Exhibit 10.6 toof the Company’s Current Report on Form 8-K filed on March 10, 2017).

*10.5(38)

10.5(34)

Form of Restricted Stock Unit Agreement (Bonus RSUs) (incorporated by reference to Exhibit 10.5(40) toof the Company’s Annual Report on Form 10 K10-K filed on March 1, 2018).

*10.5(39)

10.5(35)

Form of Restricted Stock Unit (Deferred Payment Bonus) (incorporated by reference to Exhibit 10.1 toof the Company’s Quarterly Report on Form 10-Q filed on May 7, 2018).

*10.5(40)

10.5(36)

Form of Relative Performance Share Unit Agreement (Annual Grant) (incorporated by reference to Exhibit 10.5(41) toof the Company’s Annual Report on Form 10‑K filed on March 1, 2018).

*10.5(41)

10.5(37)

Form of Performance Share Unit Agreement (Annual Grant) (incorporated by reference to Exhibit 10.5(41) of the Company’s Annual Report on Form 10-K filed on February 27, 2020).

*10.5(42)

10.5(38)

Form of Performance Share Unit Agreement (Annual Grant, Messrs. Hornbuckle, Sanders & McManus) (incorporated by reference to Exhibit 10.5(42) of the Company’s Annual Report on Form 10-K filed on February 27, 2020).

*10.5(43)

10.5(39)

Form of Restricted Stock Unit Agreement (with Performance Hurdle) (incorporated by reference to Exhibit 10.5(43) of the Company’s Annual Report on Form 10-K filed on February 27, 2020).

*10.5(44)

10.5(40)

Form of Restricted Stock Unit Agreement (no Performance Hurdle) (incorporated by reference to Exhibit 10.5(44) of the Company’s Annual Report on Form 10-K filed on February 27, 2020).

*10.5(45)

10.5(41)

Form of Relative Performance Share Unit Agreement (Annual Grant) (incorporated by reference to Exhibit 10.5(45) of the Company’s Annual Report on Form 10-K filed on February 27, 2020).
*10.5(42)
Form of Relative Performance Share Unit Agreement (Annual Grant, Messrs. Hornbuckle, Sanders & McManus) (incorporated by reference to Exhibit 10.5(46) of the Company’s Annual Report on Form 10-K filed on February 27, 2020).
117

*10.5(43)
Form of Omnibus Amendment to Relative Performance Share Unit Agreements (incorporated by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q filed on May 3, 2021).
*10.5(44)
Form of Relative Performance Share Unit Agreement (Annual Grant).

*10.5(46)

10.5(45)

Form of Relative Performance Share Unit Agreement (Annual Grant, Messrs. Hornbuckle, Sanders & McManus).

21

List of subsidiaries of the Company.

23.1

22

Subsidiary Guarantors.
23.1
Consent of Deloitte & Touche LLP, independent auditors to the Company.

31.1

Certification of Chief Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d‑14(a).

31.2

Certification of Chief Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d‑14(a).

**32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.

**32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

99.1

Description of Regulation and Licensing.

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.


101.LAB

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

The cover page from this Annual Report on Form 10-K for the year ended December 31, 2019,2021, has been formatted in Inline XBRL.

*

Management contract or compensatory plan or arrangement.

**

Exhibits 32.1 and 32.2 shall not be deemed filed with the SEC, nor shall they be deemed incorporated by reference in any filing with the SEC under the Exchange Act or the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

In accordance with Rule 402 of Regulation S-T, the XBRL information included in Exhibit 101 and Exhibit 104 to this Form 10-K shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

In accordance with Rule 402 of Regulation S-T, the XBRL information included in Exhibit 101 and Exhibit 104 to this Form 10-K shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.


ITEM 16.

FORM 10K

ITEM 16.    FORM 10-K SUMMARY


None.


118


SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


MGM Resorts International


By:

/s/ JAMES J. MURREN

By:

James/s/ WILLIAM J. Murren

HORNBUCKLE

Chairman of the Board and William J. Hornbuckle

Chief Executive Officer

and President

(Principal Executive Officer)


Dated: February 27, 2020

25, 2022


Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature

Title

Date

Signature

TitleDate
/s/ Jamess/ William J. Murren

Hornbuckle

Chief Executive Officer and President
(Principal Executive Officer)
February 25, 2022
William J. Hornbuckle
/s/ Jonathan S. Halkyard
Chief Financial Officer and Treasurer
(Principal Financial Officer)
February 25, 2022
Jonathan S. Halkyard
/s/ Todd R. Meinert
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
February 25, 2022
Todd R. Meinert
/s/ Paul Salem
Chairman of the Board and

Chief Executive Officer

(Principal Executive Officer)

February 27, 2020

25, 2022

James J. Murren

Paul Salem

/s/ Corey I. Sanders

s/ Mary Chris Jammet

Chief Financial Officer

and Treasurer

(Principal Financial Officer)

Director

February 27, 2020

25, 2022

Corey I. Sanders

/s/ Robert C. Selwood

Executive Vice President

and Chief Accounting Officer

(Principal Accounting Officer)

February 27, 2020

Robert C. Selwood

/s/ Mary Chris Jammet

Director

February 27, 2020

Mary Chris Jammet

/s/ Barry Diller

Director

February 25, 2022

/sBarry Diller/ William W. Grounds

Director

February 27, 2020

William W. Grounds

/s/ Alexis M. Herman

Director

February 25, 2022

/s/ Alexis M. Herman

Director

February 27, 2020

Alexis M. Herman

 
/s/ Joseph Levin

Director

February 25, 2022

/sJoseph Levin/ Roland Hernandez

Director

February 27, 2020

Roland Hernandez

/s/ Rose McKinney-James

Director

February 25, 2022

/s/ John B. Kilroy, Jr.

Director

February 27, 2020

John B. Kilroy, Jr.



/s/ Rose McKinney-James

Director

February 27, 2020

119

Rose McKinney-James

Signature

Title

Date

/s/ Keith A. Meister
Director
February 25, 2022
Keith A. Meister

Director

February 27, 2020

Keith A. Meister

/s/ Gregory M. Spierkel

Director

February 25, 2022

/s/ Paul Salem

Director

February 27, 2020

Paul Salem

/s/ Gregory M. Spierkel

Director

February 27, 2020

Gregory M. Spierkel

 
/s/ Janet Swartz
 

Director

February 25, 2022

/s/ JanJanet Swartz

Director

February 27, 2020

Jan Swartz

/s/ Daniel J. Taylor

Director

February 27, 2020

25, 2022

Daniel J. Taylor

118

120