Document/ExhibitDescriptionPagesSize 1: 10-Q Quarterly Report HTML 1.70M
2: EX-10.1 Material Contract HTML 43K
3: EX-10.2 Material Contract HTML 44K
4: EX-22 Published Report re: Matters Submitted to a Vote HTML 59K
of Security Holders
5: EX-31.1 Certification -- §302 - SOA'02 HTML 26K
6: EX-31.2 Certification -- §302 - SOA'02 HTML 26K
7: EX-32.1 Certification -- §906 - SOA'02 HTML 24K
8: EX-32.2 Certification -- §906 - SOA'02 HTML 24K
14: R1 Cover Page HTML 75K
15: R2 Consolidated Balance Sheets HTML 154K
16: R3 Consolidated Balance Sheets (Parenthetical) HTML 33K
17: R4 Consolidated Statements of Operations HTML 140K
18: R5 Consolidated Statements of Comprehensive Income HTML 61K
(Loss)
19: R6 Consolidated Statements of Cash Flows HTML 156K
20: R7 Consolidated Statements of Stockholders' Equity HTML 109K
21: R8 Consolidated Statements of Stockholders' Equity HTML 25K
(Parenthetical)
22: R9 Organization HTML 31K
23: R10 Basis of Presentation and Significant Accounting HTML 79K
Policies
24: R11 Acquisitions and Divestitures HTML 80K
25: R12 Investments in and Advances to Unconsolidated HTML 58K
Affiliates
26: R13 Goodwill and Other Intangible Assets HTML 51K
27: R14 Long-Term Debt HTML 57K
28: R15 Income Taxes HTML 28K
29: R16 Leases HTML 92K
30: R17 Commitments and Contingencies HTML 30K
31: R18 Earnings Per Share HTML 45K
32: R19 Stockholders? Equity HTML 53K
33: R20 Segment Information HTML 120K
34: R21 Related Party Transactions HTML 31K
35: R22 Pay vs Performance Disclosure HTML 35K
36: R23 Insider Trading Arrangements HTML 29K
37: R24 Basis of Presentation and Significant Accounting HTML 97K
Policies (Policies)
38: R25 Basis of Presentation and Significant Accounting HTML 59K
Policies (Tables)
39: R26 Acquisitions and Divestitures (Tables) HTML 75K
40: R27 Investments in and Advances to Unconsolidated HTML 59K
Affiliates (Tables)
41: R28 Goodwill and Other Intangible Assets (Tables) HTML 48K
42: R29 Long-Term Debt (Tables) HTML 49K
43: R30 Leases (Tables) HTML 103K
44: R31 Earnings Per Share (Tables) HTML 45K
45: R32 Stockholders? Equity (Tables) HTML 46K
46: R33 Segment Information (Tables) HTML 112K
47: R34 ORGANIZATION - Additional Information (Detail) HTML 40K
48: R35 BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING HTML 71K
POLICIES - Additional Information (Detail)
49: R36 BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING HTML 44K
POLICIES - Schedule of Debt Investments (Detail)
50: R37 BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING HTML 35K
POLICIES - Schedule of Contract and Contract -
Related Liabilities (Detail)
51: R38 ACQUISITIONS AND DIVESTITURES - Additional HTML 136K
Information (Details)
52: R39 ACQUISITIONS AND DIVESTITURES - Schedule of HTML 94K
Purchase Price Allocation (Details)
53: R40 ACQUISITIONS AND DIVESTITURES - Pro Forma HTML 28K
Financial Information (Details)
54: R41 ACQUISITIONS AND DIVESTITURES - Assets and HTML 89K
Liabilities Derecognized and Classified as Held
for Sale (Details)
55: R42 INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED HTML 34K
AFFILIATES - Schedule of Investments in and
Advances to Unconsolidated Affiliates (Detail)
56: R43 INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED HTML 38K
AFFILIATES - Additional Information (Detail)
57: R44 INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED HTML 31K
AFFILIATES - Schedule of Share of Net Income
(Loss) From Unconsolidated Affiliates (Detail)
58: R45 INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED HTML 35K
AFFILIATES - Schedule of Share of Income (Loss)
From Unconsolidated Affiliates (Detail)
59: R46 GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of HTML 58K
Goodwill and Other Intangible Assets (Details)
60: R47 GOODWILL AND OTHER INTANGIBLE ASSETS - Additional HTML 34K
Information (Details)
61: R48 LONG-TERM DEBT - Schedule of Long-Term Debt HTML 84K
(Detail)
62: R49 LONG-TERM DEBT - Additional Information (Detail) HTML 65K
63: R50 INCOME TAXES - Additional Information (Detail) HTML 25K
64: R51 LEASES - Additional Information (Detail) HTML 132K
65: R52 LEASES - Schedule of Components of Lease Costs HTML 34K
(Detail)
66: R53 LEASES - Schedule of Supplemental Balance Sheet HTML 65K
Information Related to Leases (Detail)
67: R54 LEASES - Schedule of Cash Paid for Amounts HTML 37K
Included in Measurement of Lease Liabilities and
ROU Assets Obtained in Exchange for New Lease
Liabilities (Detail)
68: R55 LEASES - Schedule of Maturities of Lease HTML 70K
Liabilities (Detail)
69: R56 Commitments and Contingencies (Detail) HTML 49K
70: R57 EARNINGS PER SHARE - Schedule of Diluted HTML 60K
Weighted-Average Number of Common and Common
Equivalent Shares Adjustments for Potential
Dilution of Share-Based Awards Outstanding
(Detail)
71: R58 STOCKHOLDERS? EQUITY - Additional Information HTML 52K
(Detail)
72: R59 STOCKHOLDERS? EQUITY - Schedule of Changes in HTML 67K
Accumulated Other Comprehensive Loss Attributable
to MGM Resorts International by Component (Detail)
73: R60 SEGMENT INFORMATION - Schedule of Segment HTML 143K
Information (Detail)
74: R61 RELATED PARTY TRANSACTIONS - Additional HTML 34K
Information (Detail)
77: XML IDEA XML File -- Filing Summary XML 138K
75: XML XBRL Instance -- mgm-20230630_htm XML 2.15M
76: EXCEL IDEA Workbook of Financial Report Info XLSX 163K
10: EX-101.CAL XBRL Calculations -- mgm-20230630_cal XML 274K
11: EX-101.DEF XBRL Definitions -- mgm-20230630_def XML 851K
12: EX-101.LAB XBRL Labels -- mgm-20230630_lab XML 2.14M
13: EX-101.PRE XBRL Presentations -- mgm-20230630_pre XML 1.23M
9: EX-101.SCH XBRL Schema -- mgm-20230630 XSD 209K
78: JSON XBRL Instance as JSON Data -- MetaLinks 573± 855K
79: ZIP XBRL Zipped Folder -- 0000789570-23-000019-xbrl Zip 431K
(Exact name of registrant as specified in its charter)
iDelaware
i88-0215232
(State or other jurisdiction
of
incorporation or organization)
(I.R.S. Employer
Identification No.)
i3600 Las Vegas Boulevard South, iLas Vegas, iNevadai89109
(Address of principal executive offices) (Zip Code)
(i702) i693-7120
(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
iCommon stock (Par Value $0.01)
iMGM
New
York Stock Exchange (iNYSE)
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. iYes☒ 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). iYes☒ 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.
iLarge
accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
i☐
Emerging growth company
i☐
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 i☒
Indicate
the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1 — iORGANIZATION
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 June 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 i56% 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, itwo integrated casino, hotel and entertainment resorts in Macau, as well as the related gaming concession and land concessions.
The Company also owns LeoVegas AB (“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 ii50/% 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 previously submitted by the city/prefecture of Osaka and the Company’s i50% owned unconsolidated venture.
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 ithree
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 June 30, 2023, all of the
Company’s properties were open and not subject to any COVID-19 related operating restrictions.
NOTE 2 — iBASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
i
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.
7
i
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 i5% 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 $i55 million as of June 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 June 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 i100% of the equity. For entities in which the Company owns less than i100%
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.
/
i
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; and
•Level 1 and Level 2 inputs for its debt investments.
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 $i466 million and $i461 million
as of June 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 six months ended June 30, 2023, the Company recorded a net gain on its equity investments of $i6 million
and $i5 million, respectively. For the three and six months ended June 30, 2022, the Company recorded a net loss on its equity investments of $i23 million
and $i8 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.
/
8
i
The following tables present information regarding the
Company’s debt investments:
iRestricted
cash. MGM China’s pledged cash of $i87 million and $i124 million as of June 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 June 30, 2023 and December 31, 2022./
Accounts receivable. As of June 30, 2023 and December 31, 2022, the
loss reserve on accounts receivable was $i129 million and $i113 million, respectively.
iNote
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 $i170 million, which approximated its carrying value on the date of repayment. As of December 31, 2022, the carrying value of the note receivable was $i167 million
and was recorded within “Other long-term assets, net” on the consolidated balance sheets./
Accounts payable. As of June 30, 2023 and December 31, 2022, the Company had accrued $i60 million
and $i80 million, respectively, for purchases of property and equipment within “Accounts and construction payable” on the consolidated balance sheets.
i
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.
i
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
$
i185,669
$
i176,219
$
i183,602
$
i144,465
$
i816,376
$
i640,001
Balance
at June 30
i196,446
i165,564
i194,570
i160,752
i806,072
i704,404
Increase
/ (decrease)
$
i10,777
$
(i10,655)
$
i10,968
$
i16,287
$
(i10,304)
$
i64,403
//
9
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.
i
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 six months ended June 30, 2023, lease revenues from third-party tenants include $i19 million and $i37 million recorded within food and beverage revenue, respectively, and $i29 million
and $i59 million recorded within entertainment, retail, and other revenue for the same such periods, respectively. For the three and six months ended June 30, 2022, lease revenues from third-party tenants include $i19 million and $i33 million
recorded within food and beverage revenue, respectively, and $i29 million and $i55 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.
/
i
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 days after the end of each fiscal year. The 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.
During the six months ended June 30, 2023 and 2022, MGM National Harbor purchased $i138 million and $i21 million
of interests from the noncontrolling interest parties, respectively.
/
10
iShare 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 — iACQUISITIONS AND DIVESTITURES
LeoVegas acquisition.
On May 2, 2022, the Company commenced a public offer to the shareholders of LeoVegas to tender i100% of the shares at a price of SEK i61
in cash per share. On September 7, 2022, the Company completed its tender offer and acquired i65% of the outstanding shares of LeoVegas and, at the completion of an extended acceptance period on September 22, 2022, acquired an additional i2%
of outstanding shares, for an aggregate cash tender price of $i370 million. During the tender offer period, the Company had acquired i31%
of outstanding shares in open market purchases that had an acquisition-date fair value of approximately $i172 million. As the Company’s previous i31%
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 $i11 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 provides the
Company an opportunity to create a scaled global online gaming business.
The Company recognized i100% 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
$i556 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 ifive 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.
i
The
following table sets forth the purchase price allocation (in thousands):
Cash and cash equivalents
$
i93,407
Receivables
and other current assets
i36,872
Technology
i109,027
Trademarks
i144,374
Customer
lists
i126,526
Goodwill
i288,367
Other
long-term assets
i19,181
Accounts payable, accrued liabilities, and other current liabilities
(i118,302)
Debt
(i104,439)
Other
long-term liabilities
(i36,457)
Noncontrolling interests
(i2,861)
$
i555,695
/
The
Cosmopolitan acquisition. On May 17, 2022, the Company acquired i100% of the equity interests in the entities that own the operations of The Cosmopolitan for cash consideration of $i1.625 billion
plus working capital adjustments for a total purchase price of approximately $i1.7 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 i100%
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 iseven
years. Goodwill, which is deductible for
11
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
$
i80,670
Receivables
and other current assets
i94,354
Property and equipment
i120,912
Trademarks
i130,000
Customer
lists
i95,000
Goodwill
i1,289,468
Operating
lease right-of-use-assets, net
i3,404,894
Other long-term assets
i23,709
Accounts
payable, accrued liabilities, and other current liabilities
(i145,136)
Operating lease liabilities
(i3,401,815)
Other
long-term liabilities
(i1,570)
$
i1,690,486
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. iThe 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 acquisition have not been included because it is not material to the consolidated results of operations.
Net
income attributable to MGM Resorts International
i1,781,930
i1,780,076
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 itwo 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 i50.1% 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 i1.366 shares of newly issued VICI stock in exchange for each MGP Class A share outstanding and the Company received i1.366 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 $i43 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 $i4.4 billion,
with the Company retaining an approximate i1% ownership interest in VICI OP that had a fair value of approximately $i375 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.
12
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 $i2.3 billion gain recorded within “Gain on REIT transactions, net.” The gain reflects the fair value of consideration received of $i4.8 billion
plus the carrying amount of noncontrolling interest immediately prior to the transactions of $i3.2 billion less the net carrying value of the assets and liabilities and accumulated comprehensive income derecognized of $i5.7 billion.
i
The major classes of assets and liabilities derecognized were as follows:
(In thousands)
Cash
and cash equivalents
$
i25,387
Income tax receivable
i5,486
Prepaid
expenses and other
i128
Property and equipment, net
i9,250,519
Investments
in and advances to unconsolidated affiliates
i817,901
Operating lease right-of-use assets, net
i236,255
Other
long-term assets, net
i3,991
Total assets
$
i10,339,667
Accounts
payable
$
i1,136
Accrued interest on long-term debt
i68,150
Other
accrued liabilities
i4,057
Deferred income taxes, net
i1,284
Long-term
debt, net
i4,259,473
Operating lease liabilities
i336,689
Total
liabilities
$
i4,670,789
/
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 $i1.075 billion, or $i1.1 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 $i90 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 $i450 million, or $i474 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 $i40 million reduction in annual cash rent. The Company recognized a $i399 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 $i75 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.
13
The major classes of assets and liabilities derecognized are as follows:
(In thousands)
Cash and cash equivalents
$
i26,911
Accounts
receivable, net
i2,466
Inventories
i1,087
Prepaid
expenses and other
i1,522
Property and equipment, net
i21,300
Goodwill
i40,523
Other
intangible assets, net
i5,700
Operating lease right-of-use assets, net
i507,231
Other
long-term assets, net
i1,251
Total assets
$
i607,991
Accounts
payable
$
i1,657
Other accrued liabilities
i13,778
Other
long-term obligations
i1,707
Operating lease liabilities
i516,136
Total
liabilities
$
i533,278
NOTE 4 — iINVESTMENTS
IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES
i
Investments in and advances to unconsolidated affiliates consisted of the following:
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. For the three and six months ended June 30, 2022, MGP OP received $i8 million and $i32 million
in distributions from MGP BREIT Venture, respectively.
BetMGM contributions. For the three and six months ended June 30, 2023, the Company contributed $i25 million and $i50
million to BetMGM, respectively. For the three and six months ended June 30, 2022, the Company contributed $i25 million and $i150 million
to BetMGM, respectively.
NOTE 5 — iGOODWILL AND OTHER INTANGIBLE ASSETS
i
Goodwill
and other intangible assets consisted of the following:
MGM
Grand Paradise gaming subconcession and concession. Pursuant to the gaming concession contract that MGM Grand Paradise entered into with the Macau government, which commenced January 1, 2023, MGM Grand Paradise
15
is required, among other things, to pay a fixed annual premium and an annual variable premium based on the number of gaming tables and machines for the term of the gaming concession. Additionally, in connection with the expiration of the MGM Grand Paradise gaming subconcession on December 31, 2022, the casino areas of MGM Cotai and MGM Macau reverted,
free of charge and without any encumbrances, to the Macau government, which became the legal owner of the reverted gaming assets. Upon the commencement of the gaming concession, the gaming assets were temporarily transferred to MGM Grand Paradise for the duration of the concession term in return for annual payments determined by square meters of the reverted casino areas.
On January 1, 2023, MGM Grand Paradise recorded an intangible asset, included within “Gaming rights” above, of $i226 million
for the right to conduct gaming and operate the reverted gaming equipment and gaming areas and a corresponding liability for the in-substance consideration to be paid over the concession term for such rights, which is the unconditional obligation of the fixed and variable annual premiums, as well as the payments relating to the use of the reverted gaming assets. The initial value of the intangible asset and liability were measured as the present value of these payments based upon the approved number of gaming tables and slot machines, estimates of the Macau average price index, and square meters of the reverted casino areas, each as of January 1, 2023. The current portion of $i7 million
and noncurrent portion of $i212 million of the remaining liability was recorded within “Other accrued liabilities” and “Other long-term liabilities,” respectively, in the consolidated balance sheets as of June 30, 2023. The gaming concession intangible asset is being amortized on a straight-line basis over the iten-year
term of the gaming concession contract. The fully amortized gaming subconcession intangible asset was derecognized upon the expiration of the gaming subconcession and corresponding commencement of the gaming concession contract.
Less:
Premiums, discounts, and unamortized debt issuance costs, net
(i34,780)
(i41,899)
i6,709,244
i8,719,290
Less:
Current portion
(i35,200)
(i1,286,473)
$
i6,674,044
$
i7,432,817
/
MGM
China's senior notes due within one year of the June 30, 2023 balance sheet were classified as long-term as MGM China has both the intent and ability to refinance the current maturities on a long-term basis.
Senior secured credit facility. At June 30, 2023, the Company’s senior secured credit facility consisted of a $i1.675 billion
revolving credit facility, of which ino amounts were drawn.
16
The Company’s senior secured credit facility contains customary representations and warranties, events of default and positive and negative covenants. The Company
was in compliance with its credit facility covenants at June 30, 2023.
MGM China first revolving credit facility. At June 30, 2023, the MGM China first revolving credit facility consisted of a HK$i9.75 billion (approximately $i1.2 billion)
unsecured revolving credit facility and the weighted average interest rate was i7.83%.
In June 2023, MGM China amended its first revolving credit agreement, which extended the maturity date to May 2026.
The MGM China first revolving credit facility contains customary representations and warranties, events of default, and positive, negative and financial covenants, including that MGM China maintains compliance with a maximum leverage ratio and a minimum interest coverage
ratio. In connection with the June 2023 amendment, the financial covenants under the MGM China first revolving credit facility are waived through December 31, 2024 and become effective beginning on March 31, 2025. MGM China was in compliance with its applicable MGM China first revolving credit facility covenants at June 30, 2023.
MGM China second revolving credit facility. At June 30, 2023,the MGM China second revolving credit facility consisted of a HK$i3.12 billion
(approximately $i398 million) unsecured revolving credit facility with an option to increase the amount of the facility up to HK$i5.85 billion (approximately $i747 million),
subject to certain conditions. At June 30, 2023, ino amounts were drawn on the MGM China second revolving credit facility.
In June 2023, MGM China amended its second revolving credit agreement, which extended the maturity date to May 2026, increased the amount to which MGM China may upsize the facility, and removed the requirement for the MGM China first revolving credit facility to be fully drawn prior to utilizing the MGM China second revolving credit facility.
The
MGM China second 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. In connection with the June 2023 amendment, the financial covenants under the MGM China second revolving credit facility are waived through December 31, 2024 and become effective beginning on March 31, 2025. MGM China was in compliance with its applicable MGM China second revolving credit facility covenants at June 30, 2023.
Senior notes. In March 2023, the
Company repaid its $i1.25 billion i6% notes due 2023 upon maturity. In March 2022, the Company repaid its $i1.0 billion
i7.75% notes due 2022 upon maturity.
Fair value of long-term debt. The estimated fair value of the Company’s long-term debt was $i6.5 billion
and $i8.4 billion at June 30, 2023 and December 31, 2022, respectively.
NOTE 7 — iINCOME
TAXES
For interim income tax reporting the Company estimates its annual effective tax rate and applies it to its year-to-date ordinary income. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur. The Company’s effective income tax rate was i13.8%
and i22.1% for the three and six months ended June 30, 2023, respectively, compared to i26.1% and i25.3%
for the three and six months ended June 30, 2022, respectively.
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.
NOTE 8 — iLEASES
The
Company leases real estate, land underlying certain of its properties, and various equipment under operating and, to a lesser extent, finance lease arrangements.
Real estate assets and land. The Company leases the real estate assets of its domestic properties pursuant to triple-net lease agreements, which are classified as operating leases. The triple-net structure of the leases requires the Company to
17
pay substantially all costs associated with each property, including real estate taxes,
insurance, utilities and routine maintenance (with each lease obligating the Company to spend a specified percentage of net revenues at the properties on capital expenditures), in addition to the annual cash rent. Each of the leases also requires the Company to comply with certain financial covenants, which, if not met, would require the Company to maintain cash security or provide ione
or more letters of credit in favor of the landlord in an amount equal to i6 months or i1 year of rent, as applicable to the circumstances, under the VICI lease, iii1//
year of rent under the Mandalay Bay and MGM Grand Las Vegas lease, the Aria and Vdara lease, and The Cosmopolitan lease, and i2 years of rent under the Bellagio lease. The Company was in compliance with its applicable covenants under its leases as of June 30, 2023.
Bellagio lease. The
Company leases the real estate assets of Bellagio from Bellagio BREIT Venture. The Bellagio lease commenced November 15, 2019 and has an initial term of i30 years with itwoi10-year
renewal periods, exercisable at the Company’s option, with a fixed i2% rent escalator for the first i10 years and, thereafter, an escalator equal to the greater of i2%
and the CPI increase during the prior year, subject to a cap of i3% during the 11th through 20th years and i4% thereafter. Annual cash rent payments for the fourth lease year that commenced on December 1, 2022
increased to $i260 million as a result of the i2% fixed annual escalator.
Mandalay Bay and MGM Grand Las Vegas lease. The
Company leases the real estate assets of Mandalay Bay and MGM Grand Las Vegas from subsidiaries of VICI. The Mandalay Bay and MGM Grand Las Vegas lease commenced February 14, 2020 and has an initial term of i30 years with itwoi10-year renewal periods, exercisable at the Company’s option, with a fixed i2% rent escalator for the first i15
years and, thereafter, an escalator equal to the greater of i2% and the CPI increase during the prior year, subject to a cap of i3%. Annual cash rent payments for the fourth lease year that commenced on March 1, 2023 increased to $i310 million
as a result of the i2% fixed annual escalator.
Aria and Vdara lease. The Company leases the real estate assets of Aria and Vdara from funds managed by The Blackstone Group, Inc. The Aria and Vdara lease commenced September 28, 2021 and has an initial term of i30
years with ithreei10-year renewal periods, exercisable at the Company’s option, with a fixed i2%
rent escalator for the first i15 years, and thereafter, an escalator equal to the greater of i2% and the CPI increase during the prior year, subject to a cap of i3%.
Annual cash rent payments for the second lease year that commenced on October 1, 2022 increased to $i219 million as a result of the i2% fixed annual escalator.
The
VICI lease and ground subleases. The Company leases the real estate assets of Luxor, New York-New York, Park MGM, Excalibur, The Park, MGM Grand Detroit, Beau Rivage, Borgata, Empire City, MGM National Harbor, MGM Northfield Park, and MGM Springfield from VICI. The VICI lease commenced April 29, 2022 and has an initial term of i25 years, with ithreei10-year renewal periods, exercisable at the Company’s option, with a fixed i2% rent escalator for the first i10
years, and thereafter, an escalator equal to the greater of i2% and the CPI increase during the prior year subject to a cap of i3%. Additionally, the VICI lease provides VICI with a right of first offer with respect to any further gaming development by the
Company on the undeveloped land adjacent to Empire City, which VICI may exercise should the Company elect to sell the property. Annual cash rent payments for the first lease year that commenced on April 29, 2022 was $i860 million. In December 2022, in connection with the sale of the operations of The Mirage, the VICI lease was amended to remove The Mirage and to reflect a $i90 million
reduction in annual cash rent, thereby reducing the annual cash rent payments to $i770 million. In February 2023, in connection with the sale of the operations of Gold Strike Tunica, the VICI lease was amended to remove Gold Strike Tunica and to reflect a $i40 million
reduction in annual cash rent, thereby reducing the annual cash rent payments to $i730 million. The modification resulted in a reassessment of the lease classification and remeasurement of the VICI lease, with the lease continuing to be accounted for as an operating lease and $i507 million
of net operating lease ROU and $i516 million of lease liabilities allocable to Gold Strike Tunica were derecognized (see Note 3). Annual cash rent payments for the second lease year that commenced on May 1, 2023 increased to $i745 million
as a result of the i2% fixed annual escalator.
The Company is required to pay the rent payments under the ground leases of the Borgata, Beau Rivage, and National Harbor through the term of the VICI lease. The ground subleases of Beau Rivage and National Harbor are classified as operating leases and the ground sublease of Borgata is classified as a finance lease.
The Cosmopolitan
lease. The Company leases the real estate assets of The Cosmopolitan from a subsidiary of Blackstone Real Estate Investment Trust, Inc. The Cosmopolitan lease commenced May 17, 2022 and has an initial term of i30 years with ithreei10-year renewal periods, exercisable at the Company’s option, with a fixed i2% rent escalator for the first i15
years, and thereafter, an escalator equal to the greater of i2% and the CPI increase during the prior year, subject to a cap of i3%. Annual cash rent payments for the second lease year that commenced on June 1, 2023 was $i204 million.
18
MGM China land concessions. MGM Grand Paradise has MGM Macau and MGM Cotai land concession contracts with the government of Macau, each with an initial ii25/-year
contract term ending in April 2031 and January 2038, respectively, with a right to renew for further consecutive periods of ii10/ years, at MGM Grand Paradise’s
option. The land leases are classified as operating leases.
i
Other information. Components of lease costs and other information related to the Company’s leases are:
Operating lease cost, primarily classified within “General and administrative”(1)
$
i575,472
$
i488,987
$
i1,156,460
$
i760,836
Finance
lease costs
Interest expense
$
i3,107
$
i1,811
$
i4,521
$
i2,704
Amortization
expense
i17,313
i19,493
i34,839
i39,650
Total
finance lease costs
$
i20,420
$
i21,304
$
i39,360
$
i42,354
/
(1)Operating
lease cost includes $ii83/ million for each of the three months ended June 30, 2023 and 2022
and $ii166/ million for each of the six months ended June 30, 2023 and 2022 related
to the Bellagio lease, which is held with a related party.
Less:
Amount of lease payments representing interest
(i34,070,242)
(i81,044)
Present
value of future minimum lease payments
i25,200,000
i128,420
Less:
Current portion
(i63,281)
(i41,124)
Long-term
portion of lease liabilities
$
i25,136,719
$
i87,296
//
NOTE
9 — iCOMMITMENTS AND CONTINGENCIES
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 flows.
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 $i1.35 billion.
At June 30, 2023, $i29 million in letters of credit were outstanding under the Company’s senior credit facility. The amount of available borrowings under the credit facility is reduced by any outstanding letters of credit.
MGM China bank guarantees.In connection with the issuance of the gaming concession in January 2023, bank guarantees
were provided to the government of Macau in the amount of MOP i1 billion (approximately $i124 million as of June 30, 2023)
to warrant the fulfillment of labor liabilities and of damages or losses that may result if there is noncompliance with the concession. The guarantees expire i180 days after the end of the concession term. As of December 31, 2022, MOP i1 billion
(approximately $i124 million as of December 31, 2022) of the bank guarantees were secured by pledged cash and, in connection with a release of MOP i300 million of such pledged
cash during the six months ended June 30, 2023, MOP i700 million of the bank guarantees (approximately $i87 million as of June
30, 2023) were secured by pledged cash as of June 30, 2023.
Shortfall guarantees.The Company provides shortfall guarantees of the $i3.01 billion principal amount of indebtedness (and any interest accrued and unpaid thereon) of Bellagio BREIT Venture, the landlord of Bellagio, which matures in 2029 and of the $i3.0 billion
principal amount of indebtedness (and any interest accrued and unpaid thereon) of the landlords of Mandalay Bay and MGM Grand Las Vegas, which matures in 2032 and has an anticipated repayment date
20
of March 2030. The terms of the shortfall guarantees 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 the applicable property owned by the landlord, and the debt obligation. The guarantees are accounted for under ASC 460 at fair value; such value is immaterial.
NOTE
10 — iEARNINGS PER SHARE
i
The table below reconciles basic and diluted earnings per share of common stock. Diluted weighted-average common and common equivalent shares include adjustments for potential dilution of share-based awards outstanding
under the Company’s stock compensation plan.
Net income attributable to MGM Resorts International
$
i200,796
$
i1,783,937
$
i667,603
$
i1,765,921
Adjustment
related to redeemable noncontrolling interests
i114
(i12,412)
i1,410
(i21,397)
Net
income attributable to common stockholders – basic and diluted
$
ii200,910/
$
ii1,771,525/
$
ii669,013/
$
ii1,744,524/
Denominator:
Weighted-average
common shares outstanding – basic
i361,050
i417,393
i367,535
i430,084
Potential
dilution from share-based awards
i4,289
i3,910
i4,150
i4,252
Weighted-average
common and common equivalent shares – diluted
i365,339
i421,303
i371,685
i434,336
Antidilutive
share-based awards excluded from the calculation of diluted earnings per share
i261
i705
i268
i599
/
NOTE
11 — iSTOCKHOLDERS’ EQUITY
MGM Resorts International stock repurchases. In March 2022, the Company announced that the Board of Directors authorized a $i2.0 billion
stock repurchase plan, and, in February 2023, the Company announced that the Board of Directors authorized a $i2.0 billion stock repurchase plan. Under these stock repurchase plans, 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 three months ended June 30, 2022, the Company repurchased approximately i32 million
shares of its common stock for an aggregate amount of $i1.1 billion. During the six months ended June 30, 2022, the Company repurchased approximately i56 million
shares of its common stock for an aggregate amount of $i2.1 billion, which included the February 2022 repurchase of i4.5 million shares for an aggregate amount of $i202.5 million
from funds managed by Corvex Management LP, a related party. Repurchased shares were retired.
During the three months ended June 30, 2023, the Company repurchased approximately i15 million shares of its common stock for an aggregate amount of $i626
million. During the six months ended June 30, 2023, the Company repurchased approximately i27 million shares of its common stock for an aggregate amount of $i1.1 billion.
In connection with these repurchases, the March 2022 stock repurchase plan was completed. Repurchased shares were retired. The remaining availability under the February 2023 $i2.0 billion stock repurchase plan was $i1.4 billion
as of June 30, 2023.
Subsequent to the quarter ended June 30, 2023, the Company repurchased approximately i2 million shares of its common stock for an aggregate amount of $i88
million, excluding excise tax. Repurchased shares were retired.
21
Accumulated other comprehensive income. iChanges in accumulated other comprehensive income attributable to MGM Resorts International are as follows:
The Company’s management views each of its casino properties 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 in Las Vegas, Nevada: Aria (including Vdara), Bellagio, The Cosmopolitan (upon its acquisition in May 2022), MGM Grand Las Vegas (including The Signature), Mandalay Bay (including Delano and Four Seasons), The Mirage (until its disposition in December 2022), Luxor, New York-New York (including The Park), Excalibur, and Park MGM (including NoMad Las Vegas).
Regional Operations. Regional Operations consists of the following casino properties: MGM Grand Detroit in Detroit, Michigan; Beau Rivage in Biloxi, Mississippi; Gold Strike Tunica in Tunica, Mississippi
(until its disposition in February 2023); 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; and MGM Northfield Park in Northfield Park, Ohio.
MGM China. MGM China consists of MGM Macau and MGM Cotai.
The Company’s operations related to LeoVegas (upon its acquisition in September 2022), investments in unconsolidated affiliates, 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.
Adjusted Property EBITDAR is the Company’s reportable segment GAAP measure, which management utilizes as the primary profit measure for its reportable segments and underlying operating segments. Adjusted Property EBITDAR is a measure defined as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening and start-up expenses, property transactions, net, gain on REIT transactions, net, rent expense related to triple-net operating leases and ground leases, income from unconsolidated affiliates related to investments in real estate ventures, and also excludes corporate expense and stock compensation expense, which are not allocated to each operating segment, and rent expense related to the master lease with MGP that eliminated
in consolidation.
22
iThe following tables present the Company’s segment information:
Triple-net
operating lease and ground lease rent expense
(i564,158)
(i483,454)
(i1,134,713)
(i745,906)
Income
from unconsolidated affiliates related to real estate ventures
i2,695
i14,826
i5,390
i56,472
Operating
income
i371,378
i2,381,451
i1,102,217
i2,487,239
Non-operating
income (expense)
Interest expense, net of amounts capitalized
(i111,945)
(i136,559)
(i242,245)
(i332,650)
Non-operating
items from unconsolidated affiliates
(i441)
(i6,120)
(i1,625)
(i21,253)
Other,
net
i23,693
(i43,308)
i70,000
(i9,006)
(i88,693)
(i185,987)
(i173,870)
(i362,909)
Income
before income taxes
i282,685
i2,195,464
i928,347
i2,124,330
Provision
for income taxes
(i39,141)
(i572,839)
(i204,920)
(i536,498)
Net
income
i243,544
i1,622,625
i723,427
i1,587,832
Less:
Net (income) loss attributable to noncontrolling interests
(i42,748)
i161,312
(i55,824)
i178,089
Net
income attributable to MGM Resorts International
$
i200,796
$
i1,783,937
$
i667,603
$
i1,765,921
NOTE
13 — iRELATED PARTY TRANSACTIONS
MGP. Prior to the closing of the VICI Transaction, the Company 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 pursuant to a master lease with MGP.
The
annual cash rent payments under the master lease with MGP for the seventh lease year, which commenced on April 1, 2022, increased to $i877 million from $i873 million, due to the sixth i2%
annual base rent escalator that went into effect on April 1, 2022, as the adjusted net revenue to rent ratio on which such escalator was contingent was met, which increased annual cash rent by $i16 million, partially offset by the percentage rent reset that went into effect on April 1, 2022, calculated based on the percentage of average actual annual net revenue of the leased properties during the preceding ifive
year period, which decreased annual cash rent by $i12 million.
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 was recognized as noncontrolling interests in the Company’s consolidated financial statements.
In
April 2022, the Company completed the VICI Transaction, which resulted in the deconsolidation of MGP. Refer to Note 3 for additional information on the VICI Transaction. As part of the transaction, the Company entered into an amended and restated master lease with VICI. Refer to Note 8 for further discussion on the master lease with VICI.
24
Item 2. 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 contain forward-looking statements that involve risks and uncertainties. Please see “Cautionary Statement Concerning Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions that may cause our actual results to differ materially from those discussed in the forward-looking statements. This discussion should be read in conjunction with our historical financial statements and related notes thereto and the other disclosures contained elsewhere in this Quarterly Report on Form 10-Q, the audited consolidated financial statements and notes for the fiscal year ended December 31, 2022, which were included in our Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on February 24, 2023. The results of operations for the periods reflected
herein are not necessarily indicative of results that may be expected for future periods. MGM Resorts International together with its subsidiaries may be referred to as “we,”“us” or “our.” MGM China Holdings Limited together with its subsidiaries is referred to as “MGM China.” MGM Growth Properties LLC together with its subsidiaries is referred to as “MGP.”
Overview of strategic business developments
In February 2023, we completed the sale of the operations of Gold Strike Tunica to CNE for cash consideration
of $450 million, or $474 million, net of purchase price adjustments and transaction costs. At closing, the master lease with VICI was amended to remove Gold Strike Tunica and reflect a $40 million reduction in annual cash rent. Refer to Note 3 in the accompanying consolidated financial statements for further discussion of this transaction.
In April 2023, the Japanese government officially certified the Area Development Plan (“ADP”) previously submitted by the city/prefecture of Osaka, Japan and our 50% owned venture.
In April 2023, LeoVegas entered into an agreement to acquire the majority ownership of digital gaming developer, Push Gaming Holding Limited. The transaction is subject to regulatory and customary approvals and is expected to close in the third quarter of 2023.
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 June 30, 2023, all of our properties were open and not subject to any COVID-19 related operating restrictions.
Key Performance Indicators
Key performance indicators related
to gaming and hotel revenue are:
•Gaming revenue indicators: table games drop and slot handle (volume indicators); “win” or “hold” percentage, which is not fully controllable by us. Our normal table games hold percentage at our Las Vegas Strip Resorts is in the range of 25.0% to 35.0% of table games drop for baccarat and 19.0% to 23.0% for non-baccarat; and
•Hotel revenue indicators (for Las Vegas Strip Resorts) – 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.
25
Results of Operations
Summary Operating Results
The following table summarizes our consolidated operating results:
Net
income attributable to MGM Resorts International
200,796
1,783,937
667,603
1,765,921
Consolidated net revenues increased 21% for the three months ended June 30, 2023 compared to the prior year quarter due primarily to a 418% increase at MGM China as a result of the removal of travel and entry restrictions in Macau, partially offset by a decrease at our Regional Operations of 3% due primarily to the disposition of Gold Strike Tunica. Net revenues
at our Las Vegas Strip Resorts were flat.
Consolidated operating income decreased 84% for the three months ended June 30, 2023 compared to the prior year quarter. The decrease was due to a $2.3 billion gain in the prior year quarter related to the VICI Transaction, an increase in rent expense recorded within general and administrative expense for the VICI and The Cosmopolitan leases, which commenced in April 2022 and May 2022, respectively, partially offset by the increase in net revenues, as discussed above, and a decrease in depreciation and amortization expense. Depreciation and amortization expense decreased $163 million compared to the prior year quarter, due primarily to the amortization in the prior year quarter related to the MGM Grand Paradise gaming subconcession, which became fully amortized as of December
31, 2022, and the deconsolidation of MGP in April 2022.
Consolidated net revenues increased 28% for the six months ended June 30, 2023 compared to the prior year period due primarily to a 230% increase at MGM China as a result of the removal of travel and entry restrictions in Macau, a 14% increase at our Las Vegas Strip Resorts as the current year period benefited from the inclusion of a full year of operating results of The Cosmopolitan, which was partially offset by the disposition of The Mirage, and a 1% increase at our Regional Operations as a result of increases in non-gaming revenues, partially offset by the disposition of Gold Strike Tunica.
Consolidated operating income decreased 56% for the six months ended June
30, 2023 compared to the prior year period. The decrease was due to a $2.3 billion gain in the prior year period related to the VICI Transaction and an increase in rent expense recorded within general and administrative expense for the VICI and The Cosmopolitan leases, partially offset by a $399 million gain in the current year period related to the sale of the operations of Gold Strike Tunica recorded in property transactions, net, the increase in net revenues, as discussed above, and a $248 million decrease in depreciation and amortization expense. Depreciation and amortization expense decreased compared to the prior year period due to the deconsolidation of MGP in April 2022 and due to the amortization in the prior year period related to the MGM Grand Paradise gaming subconcession.
26
Net
Revenues by Segment
The following table presents a detail by segment of net revenues:
Entertainment, retail and other, and reimbursed costs
58,250
48,567
107,933
88,465
926,100
959,669
1,871,943
1,850,498
MGM
China
Casino
669,658
120,948
1,224,930
352,151
Rooms
31,679
7,812
61,172
23,483
Food
and beverage
32,973
10,940
60,598
28,381
Entertainment, retail and other
6,645
3,312
11,847
7,372
740,955
143,012
1,358,547
411,387
Reportable
segment net revenues
3,813,705
3,239,857
7,553,292
6,061,953
Corporate and other
128,502
25,031
262,211
57,244
$
3,942,207
$
3,264,888
$
7,815,503
$
6,119,197
Las
Vegas Strip Resorts
Las Vegas Strip Resorts casino revenue decreased 1% for the three months ended June 30, 2023 compared to the prior year quarter due primarily to an increase in non-gaming incentives and increased 2% for the six months ended June 30, 2023 compared to the prior year period due primarily to an increase in table games drop and slot handle. Both the three and six months ended June 30, 2023 benefited from a full period of operating results of The Cosmopolitan, partially offset by the disposition of The Mirage.
The following table shows key gaming statistics for our Las Vegas Strip Resorts:
Las Vegas Strip Resorts rooms revenue increased 2% for the three months ended June 30, 2023 compared to the prior year quarter and increased 23% for the six months
ended June 30, 2023 compared to the prior year period due to an increase in RevPAR. The six months ended June 30, 2023 also benefited from a full period of operating results of The Cosmopolitan, partially offset by the disposition of The Mirage.
The following table shows key hotel statistics for our Las Vegas Strip Resorts:
Las
Vegas Strip Resorts food and beverage revenue increased 7% for the three months ended June 30, 2023 compared to the prior year quarter due primarily to a full quarter of operating results of The Cosmopolitan and an increase in catering and banquet revenue, partially offset by the disposition of The Mirage.
Las Vegas Strip Resorts entertainment, retail and other revenues decreased 9% for the three months ended June 30, 2023 compared to the prior year quarter due primarily to the disposition of The Mirage, partially offset by a full quarter of operating results of The Cosmopolitan.
Las Vegas Strip Resorts food and beverage revenue increased 25% for the six months ended June
30, 2023 compared to the prior year period due primarily to a full quarter of operating results of The Cosmopolitan and an increase in covers and catering and banquet revenue, partially offset by the disposition of The Mirage.
Las Vegas Strip Resorts entertainment, retail and other revenues decreased 1% for the six months ended June 30, 2023 compared to the prior year period due primarily to the disposition of The Mirage, partially offset by a full quarter of operating results of The Cosmopolitan and an increase in revenue from theater shows.
Regional Operations
Regional Operations casino revenue decreased 7% for the three months ended June
30, 2023 compared to the prior year quarter due primarily to the disposition of Gold Strike Tunica.
Regional Operations casino revenue decreased 3% for the six months ended June 30, 2023 compared to the prior year period due to the disposition of Gold Strike Tunica, partially offset by an increase in slot handle.
The following table shows key gaming statistics for our Regional Operations:
Regional Operations rooms revenue increased 8% for the three months ended June 30, 2023 compared to the prior year quarter and increased 14% for the six months ended June 30, 2023 compared to the prior year period due to an increase in RevPAR, partially offset by the disposition
of Gold Strike Tunica.
Regional Operations food and beverage revenue increased 5% for the three months ended June 30, 2023 compared to the prior year quarter and increased 13% for the six months ended June 30, 2023 compared to the prior year period.
28
Regional Operations entertainment, retail and other revenue increased 20% for the three months ended June 30, 2023 compared to the prior year quarter and increased 22% for the six months ended June 30, 2023 compared to the prior year period. The
changes were driven by an increase in covers as non-gaming amenities had not yet returned to pre-COVID-19 volumes in the comparative prior year periods, partially offset by the disposition of Gold Strike Tunica.
MGM China
The following table shows key gaming statistics for MGM China:
MGM
China casino revenues increased 454% for the three months ended June 30, 2023 compared to the prior year quarter and increased 248% for the six months ended June 30, 2023 compared to the prior year period due to the removal of COVID-19 related travel and entry restrictions in Macau.
Corporate and other
Corporate and other revenue primarily includes revenues from LeoVegas, other corporate operations, and management services. The increase in the three and six months ended June 30, 2023 compared to the comparative prior year periods is primarily due to the acquisition of LeoVegas in September 2022.
Adjusted
Property EBITDAR and Adjusted EBITDAR
The following table presents Adjusted Property EBITDAR and Adjusted EBITDAR. Adjusted Property EBITDAR is our reportable segment GAAP measure, which we utilize as the primary profit measure for our reportable segments. See Note 12 in the accompanying consolidated financial statements and “Reportable Segment GAAP measure” below for additional information. Adjusted EBITDAR is a non-GAAP measure, discussed within “Non-GAAP measures” below.
Las Vegas Strip Resorts Adjusted Property EBITDAR decreased 6% for the three months ended June 30, 2023 compared to the prior year quarter. Las Vegas Strip Resorts Adjusted Property EBITDAR margin decreased to 36.2% for the three months ended June 30, 2023 compared to 38.6% in the prior year quarter due primarily to an increase in payroll related expenses compared to the prior year quarter.
Las Vegas Strip Resorts Adjusted Property EBITDAR increased 14% for the six months ended June 30, 2023 compared to the prior year period. Las Vegas Strip Resorts Adjusted Property EBITDAR margin was 37.3% for the six months ended June
30, 2023, flat compared to the prior year period as the increase in rooms revenues discussed above was offset primarily by an increase in payroll related expenses.
29
Regional Operations
Regional Operations Adjusted Property EBITDAR decreased 14% for the three months ended June 30, 2023 compared to the prior year quarter. Regional Operations Adjusted Property EBITDAR margin decreased to 31.7% for the three months ended June 30, 2023 compared to 35.4% in the prior year quarter due primarily to the decrease in casino revenues and an increase in payroll
related expenses.
Regional Operations Adjusted Property EBITDAR decreased 7% for the six months ended June 30, 2023, compared to the prior year period. Regional Operations Adjusted Property EBITDAR margin decreased to 32.4% for the six months ended June 30, 2023 compared to 35.3% in the prior year period. The margin decreases were due primarily to the decrease in casino revenues and an increase in payroll related expenses.
MGM China
MGM China Adjusted Property EBITDAR was $209 million for the three months ended June 30, 2023 compared to Adjusted Property EBITDAR loss of
$52 million the prior year quarter due primarily to the increase in revenues, discussed above.
MGM China Adjusted Property EBITDAR was $378 million for the six months ended June 30, 2023 compared to Adjusted Property EBITDAR loss of $78 million in the prior year period. The increase was due primarily to the increase in revenues, discussed above, and the prior year period included an $18 million charge related to litigation reserves.
Supplemental Information - Same-store Results of Operations
The following table presents the financial results of Las Vegas Strip Resorts and Regional Operations on a same-store basis for the three and six months ended June 30,
2023 and 2022. Same-Store Adjusted Property EBITDAR is a non-GAAP measure, discussed within “Non-GAAP measures” below.
In
April 2022, we completed the VICI Transaction pursuant to which the assets and liabilities of MGP were derecognized, which included MGP OP’s investment in MGP BREIT Venture.
Non-operating Results
Interest Expense
Gross interest expense was $113 million and $137 million for the three months ended June 30, 2023 and 2022, respectively, and $243 million and $333 million for the six months ended June 30, 2023 and 2022,
respectively. The decrease from the prior year periods is due primarily to a decrease in debt outstanding as a result of the repayment of the $1.0 billion 7.75% senior notes in March 2022, the derecognition of MGP OP’s senior notes in connection with the deconsolidation of MGP in April 2022, and the repayment of the $1.25 billion 6% senior notes in March 2023, and the decrease in the debt outstanding under MGM China’s first revolving credit facility. See Note 6 to the accompanying consolidated financial statements for discussion on long-term debt and see “Liquidity and Capital Resources” for discussion on issuances and repayments of long-term debt and other sources and uses of cash.
Other, net
Other, net was income of $24 million and expense of $43 million for the three months ended June
30, 2023 and 2022, respectively. The change from the prior year quarter is primarily due to an increase in interest and dividend income of $28 million and a change in the gain/loss on the fair value of equity instruments of $29 million. Other, net was income of $70 million and expense of $9 million for the six months ended June 30, 2023 and 2022, respectively. The change from the prior year period is primarily due to an increase in interest and dividend income of $80 million.
Income Taxes
Our effective income tax rate was 13.8% and 22.1% for the three and six months ended June 30, 2023, respectively,
compared to 26.1% and 25.3% for the three and six months ended June 30, 2022, respectively. The effective rate for the
31
three and six months ended June 30, 2023 was favorably impacted by an increase in Macau income that was offset by expiring net operating losses from prior years subject to valuation allowances.The effective rate for the three and six months ended June 30, 2022 was driven primarily by tax expense recorded on the VICI Transaction and was unfavorably impacted by an increase in the valuation allowance for Macau deferred tax assets and by losses in Macau from which
we could not benefit, partially offset by the favorable impact of a decrease in state deferred tax liabilities as a result of the VICI Transaction.
Reportable segment GAAP measure
“Adjusted Property EBITDAR” is our reportable segment GAAP measure, which we utilize as the primary profit measure for our reportable segments and underlying operating segments. Adjusted Property EBITDAR is a measure defined as earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening and start-up expenses, gain on REIT transactions, net, property transactions, net, rent expense related to triple-net operating leases and ground leases, income from
unconsolidated affiliates related to investments in real estate ventures, and also excludes corporate expense and stock compensation expense, which are not allocated to each operating segment, and rent expense related to the master lease with MGP that eliminated in consolidation. “Adjusted Property EBITDAR margin” is Adjusted Property EBITDAR divided by related segment net revenues.
Non-GAAP measures
“Same-Store Adjusted Property EBITDAR” is Adjusted Property EBITDAR further adjusted to exclude the Adjusted Property EBITDAR of acquired operating segments from the date of acquisition through the end of the reporting period and to exclude the Adjusted Property EBITDAR of disposed
operating segments from the beginning of the reporting period through the date of disposition. Accordingly, for Las Vegas Strip Resorts, we have excluded the Adjusted Property EBITDAR of The Cosmopolitan for periods subsequent to its acquisition on May 17, 2022 and of The Mirage for the periods prior to its disposition on December 19, 2022, as applicable. For Regional Operations, we have excluded the Adjusted Property EBITDAR of Gold Strike Tunica for the periods prior to its disposition on February 15, 2023, as applicable.
Same-Store Adjusted Property EBITDAR is a non-GAAP measure and is presented solely as a supplemental disclosure to reported GAAP measures because management believes this measure is useful in providing meaningful period-to-period
comparisons of the results of our operations for operating segments that were consolidated for the full period presented to assist users of the financial statements in reviewing operating performance over time. Same-Store Adjusted Property EBITDAR should not be viewed as a measure of overall operating performance, considered in isolation, or as an alternative to our reportable segment GAAP measure or net income, or as an alternative to any other measure determined in accordance with generally accepted accounting principles, because this measure is not presented on a GAAP basis, and is provided for the limited purposes discussed herein. In addition, Same-Store Adjusted Property EBITDAR may not be defined in the same manner by all companies and, as a result, may not be comparable to similarly titled non-GAAP financial measures of other companies, and such differences may be material. A reconciliation of our reportable segment Adjusted Property EBITDAR GAAP measure to Same-Store
Adjusted Property EBITDAR is included herein.
“Adjusted EBITDAR” is earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening and start-up expenses, property transactions, net, gain on REIT transactions, net, rent expense related to triple-net operating leases and ground leases, and income from unconsolidated affiliates related to investments in real estate ventures.
Adjusted EBITDAR information is a non-GAAP measure that is a valuation metric, should not be used as an operating metric, and is presented solely as a supplemental disclosure to reported GAAP measures because we believe this measure is widely used by analysts, lenders, financial institutions, and investors as a principal basis for the valuation of gaming companies. We believe
that while items excluded from Adjusted EBITDAR may be recurring in nature and should not be disregarded in evaluation of our earnings performance, it is useful to exclude such items when analyzing current results and trends. Also, we believe excluded items may not relate specifically to current trends or be indicative of future results. 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, management excludes rent expense related to triple-net operating leases and ground leases. Management believes excluding rent expense related to triple-net operating leases and ground leases provides useful information to analysts, lenders, financial institutions, and investors when valuing the Company, as well as comparing the Company’s results to other gaming companies, without regard to differences in
32
capital structure and leasing arrangements since the operations of other gaming companies may or may not include triple-net operating leases or ground leases. However,
as discussed herein, Adjusted EBITDAR should not be viewed as a measure of overall operating performance, an indicator of our performance, considered in isolation, or construed as an alternative to operating income or net income, or as an alternative to cash flows from operating activities, as a measure of liquidity, or as an alternative to any other measure determined in accordance with generally accepted accounting principles because this measure is not presented on a GAAP basis and excludes certain expenses, including the rent expense related to triple-net operating leases and ground leases, and is provided for the limited purposes discussed herein. In addition, other companies in the gaming and hospitality industries that report Adjusted EBITDAR may calculate Adjusted EBITDAR in a different manner and such differences may be material. We have significant uses of cash flows, including capital expenditures, interest payments, taxes, real estate triple-net lease and
ground lease payments, and debt principal repayments, which are not reflected in Adjusted EBITDAR. A reconciliation of GAAP net income to Adjusted EBITDAR is included herein.
The following table presents a reconciliation of net income attributable to MGM Resorts International to Adjusted EBITDAR:
Net income attributable to MGM Resorts International
$
200,796
$
1,783,937
$
667,603
$
1,765,921
Plus:
Net income (loss) attributable to noncontrolling interests
42,748
(161,312)
55,824
(178,089)
Net income
243,544
1,622,625
723,427
1,587,832
Provision
for income taxes
39,141
572,839
204,920
536,498
Income before income taxes
282,685
2,195,464
928,347
2,124,330
Non-operating
(income) expense:
Interest expense, net of amounts capitalized
111,945
136,559
242,245
332,650
Non-operating items from unconsolidated affiliates
441
6,120
1,625
21,253
Other,
net
(23,693)
43,308
(70,000)
9,006
88,693
185,987
173,870
362,909
Operating income
371,378
2,381,451
1,102,217
2,487,239
Preopening
and start-up expenses
149
542
288
976
Property transactions, net
5,614
(19,395)
(390,462)
35,343
Depreciation
and amortization
203,503
366,255
407,004
654,893
Gain on REIT transactions, net
—
(2,277,747)
—
(2,277,747)
Triple-net
operating lease and ground lease rent expense
564,158
483,454
1,134,713
745,906
Income from unconsolidated affiliates related to real estate ventures
(2,695)
(14,826)
(5,390)
(56,472)
Adjusted
EBITDAR
$
1,142,107
$
2,248,370
Guarantor Financial Information
As of June 30, 2023, all of our principal debt arrangements are guaranteed by each of our wholly owned material domestic subsidiaries
that guarantee our senior credit facility. Our principal debt arrangements are not guaranteed by MGM Grand Detroit, MGM National Harbor, Blue Tarp reDevelopment, LLC (the entity that owns the operations of MGM Springfield), MGM Sports & Interactive Gaming, LLC (the entity that owns our 50% interest in BetMGM), and each of their respective subsidiaries. Our foreign subsidiaries, including LeoVegas, MGM China, and each of their respective subsidiaries, are also not guarantors of our principal debt arrangements. 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 indentures 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 relieved of any obligations under its subsidiary guarantee.
33
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. Assets held for sale and liabilities related to assets held for sale associated with Gold Strike Tunica are included within current assets and other current liabilities, respectively, within the summarized financial information
as of December 31, 2022.
Net income
attributable to MGM Resorts International
691,194
Liquidity and Capital Resources
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, and tax payments or refunds. Cash provided by operating activities was $1.3 billion in the six months ended June 30, 2023 compared to $933
million in the prior year period. The change from the prior year period was due primarily to the increase in Adjusted Property EBITDAR at our Las Vegas Strip Resorts and MGM China discussed within the Results of Operations section above, a decrease in working capital primarily related to collection of receivables, and a decrease in cash paid for interest, partially offset by an increase in triple-net lease rent payments and the change in cash paid (refunded) for taxes, net.
Investing activities. Our investing cash flows can fluctuate significantly from year to year depending on our decisions with respect to strategic capital investments in new or existing resorts, business acquisitions or dispositions, and the timing of maintenance capital expenditures to maintain the quality of our resorts. Capital expenditures related to regular investments in our existing resorts
can also vary depending on timing of larger remodel projects related to our public spaces and hotel rooms.
Cash used in investing activities was $59 million in the six months ended June 30, 2023 compared to cash provided by investing activities of $2.2 billion in the prior year period. In the six months ended June 30, 2023, we received $447 million in net cash related to the sale of the operations of Gold Strike Tunica, received $153 million in cash related to the principal portion of the Circus Circus Las Vegas note receivable that was repaid, made payments of $393 million in capital expenditures, as further discussed below, contributed $50 million to BetMGM, and made $216 million in net investments in debt securities. In comparison, in the prior year period we received $4.4 billion in
net cash proceeds related to the VICI
34
Transaction, which were partially offset by net cash paid of $1.6 billion to acquire The Cosmopolitan, payments of $237 million in capital expenditures, as further discussed below, and contributed $150 million to BetMGM.
Capital Expenditures
We made capital expenditures of $393 million in the six months ended June 30, 2023, of which $20 million related to MGM China and is inclusive of capital expenditures relating to the gaming concession investment. Capital expenditures at our Las Vegas Strip Resorts, Regional Operations, and
corporate and other entities of $373 million primarily related to expenditures in information technology, room remodels, and convention center remodels.
We made capital expenditures of $237 million in the six months ended June 30, 2022, of which $16 million related to MGM China. Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and corporate entities of $221 million primarily related to expenditures in information technology and room remodels.
Financing activities. Cash used in financing activities was $3.3 billion in the six months ended June 30, 2023 compared to $2.5 billion in the prior year period. In the six months ended June
30, 2023, we had net repayments of debt of $2.0 billion, as further discussed below, distributed $162 million to noncontrolling interest owners, and repurchased $1.1 billion of our common stock. In comparison, in the prior year period, we had net repayments of debt of $162 million, as further discussed below, distributed $206 million to noncontrolling interest owners, and repurchased $2.1 billion of our common stock.
Borrowings and Repayments of Long-term Debt
During the six months ended June 30, 2023, we had net repayments of debt of $2.0 billion, which consisted of the repayment of $1.25 billion of aggregate principal amount of our 6% senior notes due 2023 upon maturity and aggregate net repayments of $758 million on MGM
China’s revolving credit facilities.
During the six months ended June 30, 2022, we had net repayments of debt of $162 million, which consisted of the repayment of $1.0 billion of aggregate principal amount of our 7.75% senior notes due 2022, net draws of $40 million on MGP OP’s revolving credit facility, and net borrowings of $798 million on MGM China’s first revolving credit facility to fund an increase in share capital of MGM Grand Paradise pursuant to the capital requirements under the new Macau gaming law and for general corporate purposes.
Dividends, Distributions to Noncontrolling Interest Owners, and Share Repurchases
During the six months ended June
30, 2023, we paid $1.1 billion relating to repurchases of our common stock pursuant to our stock repurchase plans. See Note 11 for further information on the stock repurchases. In connection with those repurchases, the March 2022 $2.0 billion stock repurchase plan was completed. In February 2023, we announced that the Board of Directors authorized a $2.0 billion stock repurchase plan. The remaining availability under the February 2023 $2.0 billion stock repurchase plan was $1.4 billion as of June 30, 2023.
During the six months ended June 30, 2022, we repurchased and retired $2.1 billion of our common stock pursuant to our stock repurchase plans.
During the six months ended June
30, 2022, we paid dividends of $0.0025 per share in March and June 2022, totaling $2 million and MGP OP paid $283 million of distributions to its partnership unit holders, of which we received $117 million and MGP received $166 million, which MGP concurrently paid as a dividend to its Class A shareholders.
Other Factors Affecting Liquidity and Anticipated Uses of Cash
We require a certain amount of cash on hand to operate our businesses. In addition to required cash on hand for operations, we utilize corporate cash management procedures to minimize the amount of cash held on hand or in banks. 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 amounts drawn under our revolving credit facility.
In addition, from time to time we may use excess funds to repurchase our outstanding debt and equity securities subject to limitations in our revolving credit facility and Delaware law, as applicable. We have significant outstanding debt, interest payments, rent payments, and contractual obligations in addition to planned capital expenditures and commitments.
35
On February 8, 2023, we announced that the Board of Directors has determined to suspend the ongoing dividends in light of our current preferred method of returning value to shareholders through our share repurchase plan. To the extent we determine to reinstate the dividend in the future, determinations
regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our results of operations, financial condition, and other factors that our Board of Directors may deem relevant.
As of June 30, 2023, we had cash and cash equivalents of $3.8 billion, of which MGM China held $448 million, and we had $6.7 billion in principal amount of indebtedness, including $708 million outstanding under MGM China’s first revolving credit facility. No amounts were drawn on our revolving credit facility or MGM China’s second revolving credit facility. In June 2023, MGM China amended each of its first revolving credit facility and its second revolving credit facility, which extended the maturity date of each facility to May 2026, increased
the amount to which MGM China may upsize its second revolving credit facility, removed the requirement for the MGM China first revolving credit facility to be fully drawn prior to utilizing the MGM China second revolving credit facility, and extended the financial covenant waivers through December 31, 2024.
As of June 30, 2023, our expected cash interest payments over the next twelve months are approximately $180 million to $190 million, excluding MGM China, and approximately $395 million to $405 million on a consolidated basis, which includes MGM China.
We are required, as of June 30, 2023, to make annual cash rent payments of $1.7 billion over the next
twelve months under triple-net lease agreements, which triple-net leases are also subject to annual escalators and also require us to pay substantially all costs associated with the lease, including real estate taxes, ground lease payments, insurance, utilities and routine maintenance, in addition to the annual cash rent. See Note 8 for discussion of our leases and lease obligations.
We have planned capital expenditures expected over the remainder of 2023 of approximately $450 million to $460 million domestically, which is inclusive of the capital expenditures required under the triple-net lease agreements, each of which requires us to spend a specified percentage of net revenues at the respective domestic properties, and an estimate of approximately $50 million to $80 million at MGM China, which is inclusive of the estimated amount of
the gaming concession investment for 2023 that relates to capital projects.
We continue to explore potential development or investment opportunities, such as expanding our global online gaming presence and pursuing a commercial gaming facility in New York, which may require cash commitments in the future. Additionally, we expect to have cash commitments of $80 million to $100 million over the remainder of 2023 relating to our Japan venture’s planned integrated resort in Osaka for which the amount and timing is subject to change and will be dependent upon funding of the venture from noncontrolling interests and the timing and amount of financing received by the venture.
We also expect to continue to repurchase shares pursuant to our share repurchase plans. Subsequent to the quarter ended June 30,
2023, we repurchased approximately 2 million shares of our common stock for an aggregate amount of $88 million, excluding excise tax. Repurchased shares were retired.
Critical Accounting Policies and Estimates
A complete discussion of our critical accounting policies and estimates is included in our Form 10-K for the fiscal year ended December 31, 2022. There have been no significant changes in our critical accounting policies and estimates since year end.
Market
Risk
Our primary market exposures are to fluctuations in interest rates, foreign currency exchange rates, and equity market trading prices.
Interest rate risk.We are subject to 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. 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.
36
As of June 30, 2023, variable rate borrowings represented approximately 11% of our total borrowings. The following table provides additional information about our gross long-term debt subject to changes in interest rates:
Foreign currency risk.Our worldwide operations are
conducted in multiple foreign currencies, which primarily are the Hong Kong dollar and Macau pataca, but we report our financial results in U.S. dollars. We manage the foreign currency risk through normal operating activities and, when deemed appropriate, through the use of derivative instruments. We do not enter into derivative instruments for trading or speculative purposes.
MGM China holds U.S. dollar denominated debt, which may cause foreign currency transaction losses. The Macau pataca is pegged to the Hong Kong dollar and the Hong Kong dollar is pegged to the U.S. dollar, however, the current peg rates may not remain at the same level and possible changes to the peg rates may result in severe fluctuations in the exchange rate thereof. 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. As of June 30, 2023, a 1% adverse change in the exchange rate would result in a foreign currency transaction loss of $28 million.
We hold forward foreign exchange contracts to hedge certain portions of forecasted cash flows denominated in foreign currencies. As of June 30, 2023, the notional amount of the forward contracts was $316 million with a fair value of ($14 million) and a 10% adverse change in the exchange rate
would result in a foreign currency transaction loss of approximately $32 million.
Equity price risk.We have investments in equity securities of publicly traded companies that are subject to equity price volatility. As of June 30, 2023, a 10% adverse change in the quoted market prices would result in an impact to earnings of $47 million.
This Form 10-Q contains “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 impact of COVID-19 on our business, expectations regarding the impact of macroeconomic trends on our business, our ability to execute on ongoing and future strategic initiatives, including the development of an integrated resort in Japan, a commercial gaming facility in New York and investments we make in online sports betting and iGaming, the expansion of LeoVegas and the MGM digital brand, positioning BetMGM as a leader in sports betting and iGaming, the closing of the Push Gaming Holding Limited acquisition, amounts we will spend on capital expenditures and investments, our
expectations with respect to future share repurchases and cash dividends on our common stock, dividends and distributions we will receive from MGM China, amounts projected to be realized as deferred tax assets, and our ability to achieve our public social impact and sustainability goals. The foregoing is not a complete list of all forward-looking statements we make.
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:
37
•our substantial indebtedness and significant financial commitments, including the fixed component of our rent payments under our triple-net leases and guarantees we provide of the indebtedness of the landlords of Bellagio, Mandalay Bay, and MGM Grand Las Vegas could adversely affect our development options and financial results and impact our ability to satisfy our obligations;
•current
and future economic, capital and credit market conditions could adversely affect our ability to service our substantial indebtedness and significant financial commitments, including the fixed components of our rent payments, and to make planned expenditures;
•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;
•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;
•significant competition we face
with respect to destination travel locations generally and with respect to our peers in the industries in which we compete;
•the impact on our business of economic and market conditions in the jurisdictions in which we operate and in the locations in which our customers reside;
•the fact that we suspended our payment of ongoing regular dividends to our stockholders, and may not elect to resume paying dividends in the foreseeable future or at all;
•all of our domestic gaming facilities are leased and could experience risks associated with leased property, including risks relating to lease termination, lease extensions, charges and our relationship with the lessor, which could have a material adverse effect on our business, financial position or results of operations;
•financial,
operational, regulatory or other potential challenges that may arise with respect to landlords under our master leases may adversely impair our operations;
•the concentration of a significant number of our major gaming resorts on the Las Vegas Strip;
•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 potential occurrence of impairments to goodwill, indefinite-lived intangible assets or long-lived assets which could negatively affect future profits;
•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 co-investing in properties or businesses, including our investment in BetMGM, decreases our ability to manage risk;
•the fact that future construction, development, or expansion projects will be subject to significant development and construction risks;
•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 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 a significant portion of our labor force is covered by collective bargaining agreements;
•the sensitivity of our business to energy prices and a rise in energy prices could harm our operating results;
•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;
38
•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 potential reputational harm as a result of increased scrutiny related to our corporate social responsibility efforts;
•the possibility that we may not achieve our ESG related goals or that our ESG initiatives may not result in their intended or anticipated benefits;
•extreme weather conditions or climate change may cause property damage or interrupt business;
•water scarcity could negatively impact our operations;
•the fact that our businesses are subject to extensive regulation and
the cost of compliance or failure to comply with such regulations could adversely affect our business;
•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;
•increases in gaming taxes and fees in the jurisdictions in which we operate;
•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;
•changes to fiscal and tax policies;
•risks related to pending claims that have been, or future claims that
may be brought against us;
•disruptions in the availability of our computer systems, through cyber-attacks or otherwise, which could impact our ability to service our customers and adversely affect our sales and the results of operations;
•restrictions on our ability to have any interest or involvement in gaming businesses in mainland China, Macau, Hong Kong and Taiwan, other than through MGM China;
•the ability of the Macau government to (i) terminate MGM Grand Paradise’s concession under certain circumstances without compensating MGM Grand Paradise, (ii) from the eighth year of MGM Grand Paradise’s concession, redeem the concession by providing MGM Grand Paradise at least one year’s prior notice and subject to the payment of reasonable and fair damages or indemnity
to MGM Grand Paradise, or (iii) refuse to grant MGM Grand Paradise an extension of the concession in 2032; and
•the potential for conflicts of interest to arise because certain of our directors and officers are also directors of MGM China.
Any forward-looking statement made by us in this Form 10-Q 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.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We
incorporate by reference the information appearing under “Market Risk” in Part I, Item 2 of this Form 10-Q.
39
Item 4. 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 June 30, 2023 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 June 30, 2023, 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.
40
Part II. OTHER INFORMATION
Item 1. Legal
Proceedings
See discussion of legal proceedings in Note 9 – Commitments and Contingencies in the accompanying consolidated financial statements.
Item 1A. Risk Factors
A description of certain factors that may affect our future results and risk factors is set forth in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to those factors previously disclosed in our 2022 Annual Report on Form 10-K.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information about share repurchases of our common stock during the quarter ended June 30, 2023:
Total
Number of Shares Purchased
Average Price Paid per Share (1)
Total Number of Shares Purchased as Part of a Publicly Announced Program
Dollar Value of Shares that May Yet be Purchased Under the Program
(1)
Average price paid per share is calculated on a settlement basis and is inclusive of commissions and exclusive of excise tax
In February 2023, we announced that the Board of Directors had authorized a $2.0 billion stock repurchase plan. Under the stock repurchase plans, we 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 purchased when we 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 we repurchased during the quarter ended June 30,
2023 were purchased pursuant to our publicly announced stock repurchase plan and have been retired.
Item 5. Other Information
During the three months ended June 30, 2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) iiadopted/,
iiterminated/ or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended (the “Securities Act”).
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.
The cover page from this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, has been formatted in Inline XBRL.
Certain long-term debt instruments of our consolidated
subsidiaries, under which the total amount of securities authorized does not exceed 10 percent of our consolidated assets, are not filed as exhibits to this Quarterly Report on Form 10-Q. We will furnish a copy of these agreements to the SEC upon request.
In accordance with Rule 402 of Regulation S-T, the XBRL information included in Exhibit 101 and Exhibit 104 to this Form 10-Q 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 or the Exchange Act, except as shall be expressly set forth
by specific reference in such filing.
42
SIGNATURES
Pursuant to the requirements 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.
