mgm-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended September 30, 2023


☐			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 Resorts International

(Exact name of registrant as specified in its charter)


Delaware			88-0215232
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

3600 Las Vegas Boulevard South, Las Vegas, Nevada 89109

(Address of principal executive offices) (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 (Par Value $0.01)	MGM	New York Stock Exchange (NYSE)

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	☐
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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding at November 6, 2023
Common Stock, $0.01 par value						341,583,381 shares

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

FORM 10-Q

I N D E X


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Consolidated Balance Sheets at September 30, 2023 and December 31, 2022	1
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and September 30, 2022	2
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and September 30, 2022	3
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and September 30, 2022	4
	Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and September 30, 2022	5
	Condensed Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	43
PART II.	OTHER INFORMATION	44
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
SIGNATURES		47

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)


	September 30, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	3,316,360	$	5,911,893
Accounts receivable, net	812,187		852,149
Inventories	135,859		126,065
Income tax receivable	159,806		73,016
Prepaid expenses and other	834,961		583,132
Assets held for sale	—		608,437
Total current assets	5,259,173		8,154,692

Property and equipment, net	5,256,883		5,223,928

Other assets
Investments in and advances to unconsolidated affiliates	231,998		173,039
Goodwill	5,142,838		5,029,312
Other intangible assets, net	1,733,379		1,551,252
Operating lease right-of-use assets, net	24,150,291		24,530,929
Other long-term assets, net	797,897		1,029,054
Total other assets	32,056,403		32,313,586
	$	42,572,459	$	45,692,206
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts and construction payable	$	412,757	$	369,817
Current portion of long-term debt	—		1,286,473
Accrued interest on long-term debt	114,714		83,451
Other accrued liabilities	2,434,598		2,236,323
Liabilities related to assets held for sale	—		539,828
Total current liabilities	2,962,069		4,515,892

Deferred income taxes, net	2,990,639		2,969,443
Long-term debt, net	6,505,517		7,432,817
Operating lease liabilities	25,129,233		25,149,299
Other long-term obligations	523,283		256,282
Commitments and contingencies (Note 9)
Redeemable noncontrolling interests	32,938		158,350
Stockholders’ equity
Common stock, $0.01 par value: authorized 1,000,000,000 shares, issued and outstanding 340,914,804 and 379,087,524 shares	3,409		3,791
Capital in excess of par value	—		—
Retained earnings	3,962,925		4,794,239
Accumulated other comprehensive income (loss)	(617)		33,499
Total MGM Resorts International stockholders’ equity	3,965,717		4,831,529
Noncontrolling interests	463,063		378,594
Total stockholders’ equity	4,428,780		5,210,123
	$	42,572,459	$	45,692,206

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

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenues
Casino	$	2,050,584	$	1,407,367	$	5,884,394	$	4,185,411
Rooms	827,091		827,397		2,490,902		2,159,202
Food and beverage	698,261		722,982		2,163,628		1,893,592
Entertainment, retail and other	385,691		447,637		1,215,980		1,264,545
Reimbursed costs	11,556		10,689		33,782		32,519
	3,973,183		3,416,072		11,788,686		9,535,269
Expenses
Casino	1,056,487		653,601		3,073,122		1,950,132
Rooms	260,905		256,128		751,319		684,670
Food and beverage	530,145		528,966		1,579,561		1,377,749
Entertainment, retail and other	238,403		271,177		740,403		755,110
Reimbursed costs	11,556		10,689		33,782		32,519
General and administrative	1,192,298		1,212,474		3,472,228		3,018,076
Corporate expense	121,838		117,264		366,485		348,115
Preopening and start-up expenses	68		396		356		1,372
Property transactions, net	12,227		(11,639)		(378,235)		23,704
Gain on REIT transactions, net	—		—		—		(2,277,747)
Depreciation and amortization	201,827		1,405,520		608,831		2,060,413
	3,625,754		4,444,576		10,247,852		7,974,113
Income (loss) from unconsolidated affiliates	22,507		(17,467)		(68,681)		(119,888)
Operating income (loss)	369,936		(1,045,971)		1,472,153		1,441,268
Non-operating income (expense)
Interest expense, net of amounts capitalized	(111,170)		(125,172)		(353,415)		(457,822)
Non-operating items from unconsolidated affiliates	438		(995)		(1,187)		(22,248)
Other, net	(34,879)		(14,316)		35,121		(23,322)
	(145,611)		(140,483)		(319,481)		(503,392)
Income (loss) before income taxes	224,325		(1,186,454)		1,152,672		937,876
Benefit (provision) for income taxes	(12,440)		125,367		(217,360)		(411,131)
Net income (loss)	211,885		(1,061,087)		935,312		526,745
Less: Net (income) loss attributable to noncontrolling interests	(50,768)		484,257		(106,592)		662,346
Net income (loss) attributable to MGM Resorts International	$	161,117	$	(576,830)	$	828,720	$	1,189,091
Earnings (loss) per share
Basic	$	0.46	$	(1.45)	$	2.30	$	2.81
Diluted	$	0.46	$	(1.45)	$	2.28	$	2.79
Weighted average common shares outstanding
Basic	347,345		393,295		360,732		417,686
Diluted	351,390		393,295		364,847		421,770

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

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income (loss)	$	211,885	$	(1,061,087)	$	935,312	$	526,745
Other comprehensive loss, net of tax:
Foreign currency translation	(30,386)		(17,563)		(36,475)		(45,357)
Cash flow hedges	—		—		—		37,692
Other	—		—		871		—
Other comprehensive loss	(30,386)		(17,563)		(35,604)		(7,665)
Comprehensive income (loss)	181,499		(1,078,650)		899,708		519,080
Less: Comprehensive (income) loss attributable to noncontrolling interests	(51,056)		484,932		(105,104)		649,713
Comprehensive income (loss) attributable to MGM Resorts International	$	130,443	$	(593,718)	$	794,604	$	1,168,793

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

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities
Net income	$	935,312	$	526,745
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	608,831		2,060,413
Amortization of debt discounts, premiums and issuance costs	20,846		25,404
Provision for credit losses	25,974		6,827
Stock-based compensation	46,246		46,138
Property transactions, net	(378,235)		23,704
Gain on REIT transactions, net	—		(2,277,747)
Noncash lease expense	388,571		303,044
Other investment losses	39,452		27,562
Loss from unconsolidated affiliates	69,868		142,136
Distributions from unconsolidated affiliates	8,838		36,131
Deferred income taxes	11,828		371,840
Change in operating assets and liabilities:
Accounts receivable	5,296		(66,556)
Inventories	(9,766)		(12,388)
Income taxes receivable and payable, net	(81,871)		35,873
Prepaid expenses and other	(74,088)		(25,403)
Accounts payable and accrued liabilities	276,924		92,200
Other	80,813		17,351
Net cash provided by operating activities	1,974,839		1,333,274
Cash flows from investing activities
Capital expenditures	(603,053)		(456,570)
Dispositions of property and equipment	6,133		9,748
Investments in unconsolidated affiliates	(144,452)		(226,317)
Proceeds from sale of operating resorts	460,392		—
Proceeds from real estate transactions	—		4,373,820
Acquisitions, net of cash acquired	(122,058)		(1,889,548)
Proceeds from repayment of principal on note receivable	152,518		—
Distributions from unconsolidated affiliates	6,792		9,864
Investments and other	(176,826)		(238,361)
Net cash provided by (used in) investing activities	(420,554)		1,582,636
Cash flows from financing activities
Net borrowings (repayments) under bank credit facilities - maturities of 90 days or less	(931,028)		937,050
Repayment of long-term debt	(1,285,600)		(1,000,000)
Debt issuance costs	(20,617)		(1,367)
Dividends paid to common shareholders	—		(3,091)
Distributions to noncontrolling interest owners	(169,093)		(207,792)
Repurchases of common stock	(1,668,888)		(2,423,009)
Other	(101,871)		(82,355)
Net cash used in financing activities	(4,177,097)		(2,780,564)
Effect of exchange rate on cash, cash equivalents, and restricted cash	(36,316)		(3,315)
Change in cash and cash equivalents classified as assets held for sale	25,938		(39,656)
Cash, cash equivalents, and restricted cash
Net change for the period	(2,633,190)		92,375
Balance, beginning of period	6,036,388		5,203,059
Balance, end of period	$	3,403,198	$	5,295,434
Supplemental cash flow disclosures
Interest paid, net of amounts capitalized	$	301,173	$	411,701
Federal, state and foreign income taxes paid	286,561		12,888
Non-cash investing and financing activities
MGM Grand Paradise gaming concession intangible asset	$	226,083	$	—
MGM Grand Paradise gaming concession payment obligation	226,083		—

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

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)


	Common Stock
	Shares	Par Value		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total MGM Resorts International Stockholders’ Equity		Noncontrolling Interests		Total Stockholders’ Equity
Balances, July 1, 2023	352,790	$	3,528	$	—	$	4,382,588	$	30,057	$	4,416,173	$	419,194	$	4,835,367
Net income	—	—		—		161,117		—		161,117		50,625		211,742
Currency translation adjustment	—	—		—		—		(30,674)		(30,674)		288		(30,386)
Stock-based compensation	—	—		10,270		—		—		10,270		794		11,064
Issuance of common stock pursuant to stock-based compensation awards	891	9		(9,762)		(9,318)		—		(19,071)		—		(19,071)
Distributions to noncontrolling interest owners	—	—		—		—		—		—		(7,476)		(7,476)
Repurchases of common stock	(12,766)	(128)		—		(571,462)		—		(571,590)		—		(571,590)
Adjustment of redeemable noncontrolling interest to redemption value	—	—		(34)		—		—		(34)		—		(34)
Other	—	—		(474)		—		—		(474)		(362)		(836)
Balances, September 30, 2023	340,915	$	3,409	$	—	$	3,962,925	$	(617)	$	3,965,717	$	463,063	$	4,428,780

Balances, January 1, 2023	379,088	$	3,791	$	—	$	4,794,239	$	33,499	$	4,831,529	$	378,594	$	5,210,123
Net income	—	—		—		828,720		—		828,720		106,111		934,831
Currency translation adjustment	—	—		—		—		(34,987)		(34,987)		(1,488)		(36,475)
Stock-based compensation	—	—		44,092		—		—		44,092		2,093		46,185
Issuance of common stock pursuant to stock-based compensation awards	1,096	11		(12,328)		(9,318)		—		(21,635)		—		(21,635)
Distributions to noncontrolling interest owners	—	—		—		—		—		—		(21,566)		(21,566)

Issuance of restricted stock units	—	—		1,701		—		—		1,701		—		1,701
Repurchases of common stock	(39,269)	(393)		(33,688)		(1,650,716)		—		(1,684,797)		—		(1,684,797)
Adjustment of redeemable noncontrolling interest to redemption value	—	—		1,377		—		—		1,377		—		1,377
Other	—	—		(1,154)		—		871		(283)		(681)		(964)
Balances, September 30, 2023	340,915	$	3,409	$	—	$	3,962,925	$	(617)	$	3,965,717	$	463,063	$	4,428,780

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

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)


	Common Stock
	Shares	Par Value		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total MGM Resorts International Stockholders’ Equity		Noncontrolling Interests		Total Stockholders’ Equity
Balances, July 1, 2022	398,418	$	3,984	$	—	$	5,746,532	$	(16,942)	$	5,733,574	$	1,464,109	$	7,197,683
Net loss	—	—		—		(576,830)		—		(576,830)		(486,445)		(1,063,275)
Currency translation adjustment	—	—		—		—		(16,888)		(16,888)		(675)		(17,563)
Stock-based compensation	—	—		6,751		—		—		6,751		664		7,415
Issuance of common stock pursuant to stock-based compensation awards	346	4		(5,005)		—		—		(5,001)		—		(5,001)
Cash distributions to noncontrolling interest owners	—	—		—		—		—		—		(1,985)		(1,985)
Dividends declared and paid to common shareholders ($0.0025 per share)	—	—		—		(980)		—		(980)		—		(980)
Repurchases of common stock	(10,003)	(100)		(9,764)		(297,090)		—		(306,954)		—		(306,954)
Adjustment of redeemable noncontrolling interest to redemption value	—	—		8,043		—		—		8,043		—		8,043
Other	—	—		(25)		—		—		(25)		7,325		7,300
Balances, September 30, 2022	388,761	$	3,888	$	—	$	4,871,632	$	(33,830)	$	4,841,690	$	982,993	$	5,824,683

Balances, January 1, 2022	453,804	$	4,538	$	1,750,135	$	4,340,588	$	(24,616)	$	6,070,645	$	4,906,121	$	10,976,766
Net income (loss)	—	—		—		1,189,091		—		1,189,091		(669,087)		520,004
Currency translation adjustment	—	—		—		—		(33,781)		(33,781)		(11,576)		(45,357)
Cash flow hedges	—	—		—		—		13,483		13,483		24,209		37,692
Stock-based compensation	—	—		41,207		—		—		41,207		4,931		46,138
Issuance of common stock pursuant to stock-based compensation awards	675	7		(12,723)		—		—		(12,716)		—		(12,716)
Cash distributions to noncontrolling interest owners	—	—		—		—		—		—		(93,274)		(93,274)
Dividends declared and paid to common shareholders ($0.0075 per share)	—	—		—		(3,091)		—		(3,091)		—		(3,091)
Issuance of restricted stock units	—	—		1,941		—		—		1,941		186		2,127
Repurchases of common stock	(65,718)	(657)		(1,767,396)		(654,956)		—		(2,423,009)		—		(2,423,009)
Adjustment of redeemable noncontrolling interest to redemption value	—	—		(13,355)		—		—		(13,355)		—		(13,355)
Deconsolidation of MGP	—	—		—		—		11,084		11,084		(3,184,710)		(3,173,626)
Other	—	—		191		—		—		191		6,193		6,384
Balances, September 30, 2022	388,761	$	3,888	$	—	$	4,871,632	$	(33,830)	$	4,841,690	$	982,993	$	5,824,683

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

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1 — ORGANIZATION

Organization. MGM Resorts International, a Delaware corporation (together with its consolidated subsidiaries, unless otherwise indicated or unless the context requires otherwise, the “Company”) is a global gaming and entertainment company with domestic and international locations featuring hotels and casinos, convention, dining, and retail offerings, and sports betting and online gaming operations.

As of September 30, 2023, the Company’s domestic casino resorts include the following integrated casino, hotel and entertainment resorts in Las Vegas, Nevada: Aria (including Vdara), Bellagio, The Cosmopolitan of Las Vegas (“The Cosmopolitan”), MGM Grand Las Vegas (including The Signature), Mandalay Bay, Luxor, New York-New York, Park MGM, and Excalibur. The Company also operates MGM Grand Detroit in Detroit, Michigan, MGM National Harbor in Prince George’s County, Maryland, MGM Springfield in Springfield, Massachusetts, Borgata in Atlantic City, New Jersey, Empire City in Yonkers, New York, MGM Northfield Park in Northfield Park, Ohio, and Beau Rivage in Biloxi, Mississippi. Additionally, the Company operates The Park, a dining and entertainment district located between New York-New York and Park MGM. The Company leases the real estate assets of its domestic properties pursuant to triple-net lease agreements, as further discussed in Note 8.

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 MGM Macau and MGM Cotai, two integrated casino, hotel and entertainment resorts in Macau, as well as the related gaming concession and land concessions.

The Company also owns LV Lion Holding Limited (“LeoVegas”), a consolidated subsidiary that has global online gaming operations headquartered in Sweden and Malta. Additionally, the Company and its venture partner, Entain plc, each have a 50% ownership interest in BetMGM, LLC (“BetMGM”), an unconsolidated affiliate, which provides online sports betting and gaming in certain jurisdictions in North America.

Japan. In April 2023, the Japanese government officially certified the Area Development Plan (“ADP”) for the development of an integrated resort in Osaka, which was previously submitted by the city/prefecture of Osaka and the Company’s 50% owned unconsolidated venture (“Osaka IR KK”), and, in September 2023, Osaka IR KK signed an agreement with Osaka to implement the ADP.

MGM Grand Paradise gaming concession. Gaming in Macau is currently administered by the Macau Government through concessions awarded to six different concessionaires. On December 16, 2022, MGM Grand Paradise was awarded a ten-year concession contract to permit the operation of games of chance or other games in casinos in Macau, which commenced on January 1, 2023. Refer to Note 5 for further discussion of the gaming concession.

Reportable segments. The Company has three reportable segments: Las Vegas Strip Resorts, Regional Operations and MGM China. See Note 12 for additional information about the Company’s segments.

Impact of COVID-19 - Update. On January 8, 2023, Macau lifted the majority of its COVID-19 pandemic travel and quarantine restrictions with the exception of overseas visitors travelling from outside of mainland China, Hong Kong and Taiwan being required to present a negative nucleic acid test or rapid antigen test result, and on February 6, 2023 all remaining COVID-19 travel restrictions were removed. As of September 30, 2023, all of the Company’s properties were open and not subject to any COVID-19 related operating restrictions.

NOTE 2 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation. As permitted by the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the Company’s 2022 annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s interim financial statements. The results for such periods are not necessarily indicative of the results to be expected for the full year.

Principles of 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 variable interest entity (“VIE”). The Company consolidates its investment in a VIE when it determines that it is its primary beneficiary. 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.

The Company has a 5% ownership interest in the venture that owns and leases back the real estate assets of Bellagio (the “Bellagio BREIT Venture”). Bellagio BREIT Venture is a VIE of which the Company is not the primary beneficiary and, accordingly, the Company does not consolidate the venture. The Company’s maximum exposure to loss in Bellagio BREIT Venture is equal to the carrying value of its investment of $55 million as of September 30, 2023, 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 September 30, 2023, as further discussed in Note 9.

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 generally accounts for the entity under the equity method, such as BetMGM, which does not qualify for consolidation as the Company has joint control, given the entity is 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 entity, as defined in Accounting Standards Codification (“ASC”) 810. For entities over which the Company does not have significant influence, the Company accounts for its equity investment under ASC 321.

Fair value measurements. Fair value measurements affect the Company’s accounting and impairment assessments of its long-lived assets, investments in unconsolidated affiliates 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 quoted prices for identical or comparable instruments or pricing using observable market data; or Level 3 inputs, which are unobservable inputs. The Company used the following inputs in its fair value measurements:

•Level 1 inputs when measuring its equity investments recorded at fair value;

•Level 2 inputs for its long-term debt fair value disclosures; See Note 6;

•Level 1 and Level 2 inputs for its debt investments; and

•Level 1, Level 2, and Level 3 inputs when assessing the fair value of assets acquired and liabilities assumed in acquisitions. See Note 3.

Equity investments. Fair value is measured based upon trading prices on the applicable securities exchange for equity investments for which the Company has elected the fair value option of ASC 825 and equity investments accounted for under ASC 321 that have a readily determinable fair value. The fair value of these investments was $409 million and $461 million as of September 30, 2023 and December 31, 2022, respectively, and is reflected within “Other long-term assets, net” on the consolidated balance sheets. Gains and losses are recorded in “Other, net” in the statements of operations. For the three and nine months ended September 30, 2023, the Company recorded a net loss on its equity investments of $57 million and $52 million, respectively. For the three and nine months ended September 30, 2022, the Company recorded a net loss on its equity investments of $20 million and $28 million, respectively.

Debt investments. The Company’s investments in debt securities are classified as trading securities and recorded at fair value. Gains and losses are recorded in “Other, net” in the statements of operations. Debt securities are considered cash

equivalents if the criteria for such classification is met or otherwise classified as short-term investments within “Prepaid expenses and other” since the investment of cash is available for current operations.

The following tables present information regarding the Company’s debt investments:


	Fair value level	September 30, 2023		December 31, 2022
		(In thousands)
Cash and cash equivalents:
Money market funds	Level 1	$	174,585	$	12,009
Commercial paper	Level 2	—		5,992
Cash and cash equivalents		174,585		18,001
Short-term investments:
U.S. government securities	Level 1	42,132		56,835
U.S. agency securities	Level 2	25,744		9,530
Commercial paper and certificates of deposit	Level 2	—		4,466
Corporate bonds	Level 2	392,585		213,875
Asset-backed securities	Level 2	2,420		—
Short-term investments		462,881		284,706
Total debt investments		$	637,466	$	302,707

Cash and cash equivalents. Cash and cash equivalents consist of cash and highly liquid investments with maturities of 90 days or less at the date of purchase. The fair value of cash and cash equivalents approximates carrying value because of the short maturity of those instruments (Level 1).

Restricted cash. MGM China’s pledged cash of $87 million and $124 million as of September 30, 2023 and December 31, 2022, respectively, securing the bank guarantees discussed in Note 9 is restricted in use and classified within “Other long-term assets, net.” Such amounts plus “Cash and cash equivalents” on the consolidated balance sheets equal “Cash, cash equivalents, and restricted cash” on the consolidated statements of cash flows as of September 30, 2023 and December 31, 2022.

Accounts receivable. As of September 30, 2023 and December 31, 2022, the loss reserve on accounts receivable was $131 million and $113 million, respectively.

Note receivable. In February 2023, the secured note receivable related to the sale of Circus Circus Las Vegas and the adjacent land was repaid, prior to maturity, for $170 million, which approximated its carrying value on the date of repayment. As of December 31, 2022, the carrying value of the note receivable was $167 million and was recorded within “Other long-term assets, net” on the consolidated balance sheets.

Accounts payable. As of September 30, 2023 and December 31, 2022, the Company had accrued $56 million and $80 million, respectively, for purchases of property and equipment within “Accounts and construction payable” on the consolidated balance sheets.

Revenue recognition. 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, 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 consolidated balance sheets.

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


	Outstanding Chip Liability				Loyalty Program				Customer Advances and Other
	2023		2022		2023		2022		2023		2022
	(In thousands)
Balance at January 1	$	185,669	$	176,219	$	183,602	$	144,465	$	816,376	$	640,001
Balance at September 30	185,615		156,560		204,333		175,716		847,572		747,505
Increase / (decrease)	$	(54)	$	(19,659)	$	20,731	$	31,251	$	31,196	$	107,504

The January 1, 2023 balances exclude liabilities related to assets held for sale.

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 12.

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.

The Company classifies a lease with terms greater than twelve months as either operating or finance. At commencement, 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. The initial measurement of 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, for most of the Company’s leases, such as its ground subleases and equipment leases, the Company cannot readily determine the implicit rate. Accordingly, the Company uses its incremental borrowing rate to discount the lease payments for such leases based on the information available at the commencement date. 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 8 for discussion of leases under which the Company is a lessee.

The Company is a lessor under certain other 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. For the three and nine months ended September 30, 2023, lease revenues from third-party tenants include $20 million and $57 million recorded within food and beverage revenue, respectively, and $27 million and $86 million recorded within entertainment, retail, and other revenue for the same such periods, respectively. For the three and nine months ended September 30, 2022, lease revenues from third-party tenants include $19 million and $52 million recorded within food and beverage revenue, respectively, and $30 million and $85 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.

Redeemable noncontrolling interest. Noncontrolling interests with redemption features, such as put rights, that are not exclusively in the Company’s control, are considered redeemable noncontrolling interests. Redeemable noncontrolling interests are presented outside of stockholders’ equity within the mezzanine section of the accompanying consolidated balance sheets. The interests are initially accounted for at fair value and subsequently adjusted to the greater of the redemption value and carrying value (initial fair value adjusted for attributed net income (loss) and distributions, as applicable). The Company records such adjustments to capital in excess of par value.

During the nine months ended September 30, 2023 and 2022, the Company purchased $138 million and $21 million

of interests from its redeemable noncontrolling interest parties, respectively.

Share repurchases. Shares repurchased pursuant to the Company’s share repurchase plans are retired upon purchase. The cost of the repurchases in excess of the aggregate par value of the shares reduces capital in excess of par value, to the extent available, with any residual cost applied against retained earnings.

NOTE 3 — ACQUISITIONS AND DIVESTITURES

Push Gaming acquisition. On August 31, 2023, LeoVegas acquired 86% of digital gaming developer, Push Gaming Holding Limited (“Push Gaming”) for total consideration of $145 million, which was preliminarily allocated to $126 million of goodwill and $40 million of amortizable intangible assets.

LeoVegas acquisition. On May 2, 2022, the Company commenced a public offer to the shareholders of LeoVegas to tender 100% of the shares at a price of SEK 61 in cash per share. On September 7, 2022, the Company completed its tender offer and acquired 65% of the outstanding shares of LeoVegas and, at the completion of an extended acceptance period on September 22, 2022, acquired an additional 2% of outstanding shares, for an aggregate cash tender price of $370 million. During the tender offer period, the Company had acquired 31% of outstanding shares in open market purchases that had an acquisition-date fair value of approximately $172 million. As the Company’s previous 31% ownership interest was accounted for at fair value, no gain or loss was recorded upon consolidation. The remaining outstanding shares, with a fair value of approximately $11 million based upon the tender price, were settled by the Company in cash in connection with squeeze-out proceedings during the second quarter of 2023. The acquisition provided the Company an opportunity to create a scaled global online gaming business.

The Company recognized 100% of the assets, liabilities, and noncontrolling interests of LeoVegas at fair value at the date of the acquisition. The fair value of the acquired equity interests of LeoVegas was determined by the tender price and equaled $556 million, inclusive of cash settlement of equity awards. Under the acquisition method, the fair value was allocated to the assets acquired, liabilities assumed, and noncontrolling interests. The Company estimated fair value using level 1 inputs, level 2 inputs, and level 3 inputs. The estimated fair values of the identified intangible assets were determined using methodologies under the income approach based on significant inputs that were not observable. The intangible assets include trademarks, which is an indefinite-lived intangible asset, and customer lists and technology, which are finite-lived intangibles that are amortized over each of their estimated useful lives of five years. Goodwill is primarily attributable to the profitability of LeoVegas in excess of identifiable assets and is not deductible for tax purposes. All of the goodwill was assigned to Corporate and other.

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


Cash and cash equivalents	$	93,407
Receivables and other current assets	36,872
Technology	109,027
Trademarks	144,374
Customer lists	126,526
Goodwill	288,367
Other long-term assets	19,181
Accounts payable, accrued liabilities, and other current liabilities	(118,302)
Debt	(104,439)
Other long-term liabilities	(36,457)
Noncontrolling interests	(2,861)
	$	555,695

The operating results for LeoVegas are included in the consolidated statements of operations from the date of acquisition. LeoVegas’s net revenue for the period from September 7, 2022 through September 30, 2022 was $31 million and operating loss and net loss were $3 million and $4 million, respectively.

The Cosmopolitan acquisition. On May 17, 2022, the Company acquired 100% of the equity interests in the entities that own the operations of The Cosmopolitan for cash consideration of $1.625 billion plus working capital

adjustments for a total purchase price of approximately $1.7 billion. The acquisition expands the Company’s customer base and provides a greater depth of choices and experiences for guests in Las Vegas.

The Company recognized 100% of the acquired assets and assumed liabilities 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 estimated fair values of the identified intangible assets were determined using methodologies under the income approach based on significant inputs that were not observable. The intangible assets include trademarks, which is an indefinite-lived intangible asset, and customer lists, which is amortized over its estimated useful life of seven years. Goodwill, which is deductible for tax purposes, is primarily attributable to the profitability of The Cosmopolitan in excess of identifiable assets as well as expected synergies. All of the goodwill was assigned to the Las Vegas Strip Resorts segment.

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


Cash and cash equivalents	$	80,670
Receivables and other current assets	94,354
Property and equipment	120,912
Trademarks	130,000
Customer lists	95,000
Goodwill	1,289,468
Operating lease right-of-use-assets, net	3,404,894
Other long-term assets	23,709
Accounts payable, accrued liabilities, and other current liabilities	(145,136)
Operating lease liabilities	(3,401,815)
Other long-term liabilities	(1,570)
	$	1,690,486

The operating results for The Cosmopolitan are included in the consolidated statements of operations from the date of acquisition. The Cosmopolitan’s net revenue for the period from May 17, 2022 through September 30, 2022 was $465 million and operating income and net income were each $57 million.

Unaudited pro forma information - The Cosmopolitan acquisition. The following unaudited pro forma consolidated financial information for the Company has been prepared assuming the Company’s acquisition of The Cosmopolitan had occurred as of January 1, 2021. 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 the indicated date. Pro forma results of operations for the LeoVegas and Push Gaming acquisitions have not been included because they are not material to the consolidated results of operations.


	Three Months Ended September 30,		Nine Months Ended September 30,
	2022		2022
	(In thousands)
Net revenues	$	3,416,072	$	9,958,088
Net income attributable to MGM Resorts International	(576,830)		1,203,246

VICI Transaction. Prior to the closing of the VICI Transaction (defined below), MGM Growth Properties LLC (“MGP”) was a consolidated subsidiary of the Company. Substantially all of its assets were owned by and substantially all of its operations were conducted through MGM Growth Properties Operating Partnership LP ("MGP OP”). MGP had two classes of common shares: Class A shares and a single Class B share. The Company owned MGP’s Class B share, through which it held a controlling interest in MGP as it was entitled to an amount of votes representing a majority of the total voting power of MGP’s shares. The Company and MGP each held MGP OP units representing limited partner interests in MGP OP.

Additionally, the Company had leased the real estate assets of The Mirage, Luxor, New York-New York, Park MGM, Excalibur, The Park, Gold Strike Tunica, MGM Grand Detroit, Beau Rivage, Borgata, Empire City, MGM National Harbor, MGM Northfield Park, and MGM Springfield from MGP OP. The Company also leased, and continues to lease,

the real estate assets of Mandalay Bay and MGM Grand Las Vegas from subsidiaries of a venture that was 50.1% owned by a subsidiary of MGP OP at the time of the transaction (such venture, the “MGP BREIT Venture”).

On April 29, 2022, VICI Properties Inc. (“VICI”) acquired MGP in a stock-for-stock transaction (such transaction, the “VICI Transaction”). MGP Class A shareholders received 1.366 shares of newly issued VICI stock in exchange for each MGP Class A share outstanding and the Company received 1.366 units of VICI OP in exchange for each MGP OP 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 redeemed the majority of the Company’s VICI OP units for cash consideration of $4.4 billion, with the Company retaining an approximate 1% ownership interest in VICI OP that had a fair value of approximately $375 million. MGP’s Class B share that was held by the Company was cancelled. Accordingly, the Company no longer held a controlling interest in MGP and deconsolidated MGP upon the closing of the transactions. Further, the Company entered into an amended and restated master lease with VICI as discussed in Note 8. The Mandalay Bay and MGM Grand Las Vegas lease remained unchanged.

In connection with the transactions, the Company recognized a $2.3 billion gain recorded within “Gain on REIT transactions, net.” The gain reflects the fair value of consideration received of $4.8 billion plus the carrying amount of noncontrolling interest immediately prior to the transactions of $3.2 billion less the net carrying value of the assets and liabilities and accumulated comprehensive income derecognized of $5.7 billion.

The major classes of assets and liabilities derecognized were as follows:


	(In thousands)
Cash and cash equivalents	$	25,387
Income tax receivable	5,486
Prepaid expenses and other	128
Property and equipment, net	9,250,519
Investments in and advances to unconsolidated affiliates	817,901
Operating lease right-of-use assets, net	236,255
Other long-term assets, net	3,991
Total assets	$	10,339,667

Accounts payable	$	1,136
Accrued interest on long-term debt	68,150
Other accrued liabilities	4,057
Deferred income taxes, net	1,284
Long-term debt, net	4,259,473
Operating lease liabilities	336,689
Total liabilities	$	4,670,789

The Mirage transaction. On December 19, 2022, the Company completed the sale of the operations of The Mirage to an affiliate of Seminole Hard Rock Entertainment, Inc. (“Hard Rock”) for cash consideration of $1.075 billion, or $1.1 billion, net of purchase price adjustments and transaction costs. At closing, the master lease between the Company and VICI was amended to remove The Mirage and to reflect a $90 million reduction in annual cash rent.

Gold Strike Tunica. On February 15, 2023, the Company completed the sale of the operations of Gold Strike Tunica to CNE Gaming Holdings, LLC (“CNE”), a subsidiary of Cherokee Nation Business, for cash consideration of $450 million, or $474 million, net of purchase price adjustments and transaction costs. At closing, the master lease between the Company and VICI was amended to remove Gold Strike Tunica and to reflect a $40 million reduction in annual cash rent. The Company recognized a $399 million gain recorded within “Property transactions, net.” The gain reflects the net cash consideration less the net carrying value of the assets and liabilities derecognized of $75 million.

The operations of Gold Strike Tunica are not classified as discontinued operations 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.

The major classes of assets and liabilities derecognized are as follows:


	(In thousands)
Cash and cash equivalents	$	26,911
Accounts receivable, net	2,466
Inventories	1,087
Prepaid expenses and other	1,522
Property and equipment, net	21,300
Goodwill	40,523
Other intangible assets, net	5,700
Operating lease right-of-use assets, net	507,231
Other long-term assets, net	1,251
Total assets	$	607,991
Accounts payable	$	1,657
Other accrued liabilities	13,778
Other long-term obligations	1,707
Operating lease liabilities	516,136
Total liabilities	$	533,278

NOTE 4 — INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

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


	September 30, 2023		December 31, 2022
	(In thousands)
BetMGM (50%)	$	—	$	31,760
Other	231,998		141,279
	$	231,998	$	173,039

The Company’s share of losses of BetMGM in excess of its equity method investment balance is $7 million as of September 30, 2023.

The Company recorded its share of income (loss) from unconsolidated affiliates as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Income (loss) from unconsolidated affiliates	$	22,507	$	(17,467)	$	(68,681)	$	(119,888)
Non-operating items from unconsolidated affiliates	438		(995)		(1,187)		(22,248)
	$	22,945	$	(18,462)	$	(69,868)	$	(142,136)

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
MGP BREIT Venture (through April 29, 2022)	$	—	$	—	$	—	$	51,051
BetMGM	12,629		(23,582)		(91,743)		(186,804)
Other	9,878		6,115		23,062		15,865
	$	22,507	$	(17,467)	$	(68,681)	$	(119,888)

In connection with the VICI Transaction in April 2022, the Company deconsolidated MGP and, accordingly, derecognized the assets and liabilities of MGP, which included MGP OP’s investment in MGP BREIT Venture.

MGP BREIT Venture distributions. During the nine months ended September 30, 2022, MGP OP received $32 million in distributions from MGP BREIT Venture.

BetMGM contributions. During the nine months ended September 30, 2023, the Company contributed $50 million to BetMGM. During the three and nine months ended September 30, 2022, the Company contributed $50 million and $200 million to BetMGM, respectively.

NOTE 5 — GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets consisted of the following:


	September 30, 2023		December 31, 2022
	(In thousands)
Goodwill	$	5,142,838	$	5,029,312

Indefinite-lived intangible assets:
Trademarks	$	752,537	$	754,431
Gaming rights and other	382,118		385,060
Total indefinite-lived intangible assets	1,134,655		1,139,491
Finite-lived intangible assets:
MGM Grand Paradise gaming subconcession	—		4,519,486
Less: Accumulated amortization	—		(4,519,486)
	—		—
Customer lists	299,732		283,232
Less: Accumulated amortization	(93,761)		(60,055)
	205,971		223,177
Gaming rights	332,591		106,600
Less: Accumulated amortization	(55,583)		(33,316)
	277,008		73,284
Technology and other	148,307		129,061
Less: Accumulated amortization	(32,562)		(13,761)
	115,745		115,300
Total finite-lived intangible assets, net	598,724		411,761
Total other intangible assets, net	$	1,733,379	$	1,551,252

Goodwill. A summary of changes in the Company’s goodwill is as follows:


	2023
	Balance at January 1		Acquisitions/Divestitures		Reclassifications		Currency exchange		Balance at September 30
	(In thousands)
Las Vegas Strip Resorts	$	2,707,009	$	—	$	—	$	—	$	2,707,009
Regional Operations	660,940		—		—		—		660,940
MGM China	1,350,878		—		—		(5,011)		1,345,867
Corporate and other	310,485		125,612		—		(7,075)		429,022
	$	5,029,312	$	125,612	$	—	$	(12,086)	$	5,142,838


	2022
	Balance at January 1		Acquisitions		Reclassifications		Currency exchange		Balance at December 31
	(In thousands)
Las Vegas Strip Resorts	$	1,427,790	$	1,279,219	$	—	$	—	$	2,707,009
Regional Operations	701,463		—		(40,523)		—		660,940
MGM China	1,351,744		—		—		(866)		1,350,878
Corporate and other	—		288,367		—		22,118		310,485
	$	3,480,997	$	1,567,586	$	(40,523)	$	21,252	$	5,029,312