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MarketScreener Homepage  >  Equities  >  Nyse  >  MGM Resorts International    MGM

MGM RESORTS INTERNATIONAL

(MGM)
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MGM RESORTS INTERNATIONAL - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations

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11/05/2019 | 06:06am EST
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, 2018, which were included in our Form 10-K, filed with the
Securities and Exchange Commission ("SEC") on February 27, 2019. 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."


Description of our business and key performance indicators




Our primary business is the ownership and operation of casino resorts which
offer gaming, hotel, convention, dining, entertainment, retail and other resort
amenities. We own or invest in several of the finest casino resorts in the world
and we continually reinvest in our resorts to maintain our competitive
advantage. Most of our revenue is cash-based, through customers wagering with
cash or paying for non-gaming services with cash or credit cards. We rely
heavily on the ability of our resorts to generate operating cash flow to fund
capital expenditures, provide excess cash flow for future development, repay
debt financings and return capital to our shareholders. We make significant
investments in our resorts through newly remodeled hotel rooms, restaurants,
entertainment and nightlife offerings, as well as other new features and
amenities.



In January 2019, we announced the implementation of a company-wide business
optimization initiative (the "MGM 2020 Plan") to further reduce costs, improve
efficiencies and position us for growth. We expect to deliver annualized
Adjusted EBITDA uplift of $300 million by the end of 2021. As part of the first
phase of the MGM 2020 Plan, which includes operating model changes to improve
operating efficiency, we targeted Adjusted EBITDA uplift of $200 million by the
end of 2020, and we currently anticipate achieving those first phase targets. As
part of the second phase, we plan to invest in our digital transformation to
drive revenue growth through a customer-centric strategy aimed at increasing
customer spend, increasing our wallet share, and attracting our most valuable
customers. We expect the second phase to provide Adjusted EBITDA uplift of $100
million by the end of 2021.



Also, in January 2019, we acquired the real property and operations associated
with Empire City in Yonkers, New York. Subsequently, MGP acquired the developed
real property associated with Empire City from us and leased the assets back to
us pursuant to an amendment to the existing master lease. In addition, pursuant
to the master lease amendment, we agreed to provide MGP a right of first offer
with respect to certain undeveloped land adjacent to the property to the extent
that we develop additional gaming facilities and choose to sell or transfer such
property in the future. See Note 3 and Note 12 in the accompanying consolidated
financial statements for information regarding this acquisition.



In March 2019, we entered into an amendment to the existing master lease with
respect to investments made by us related to improvements at Park MGM and NoMad
Las Vegas. Additionally, in April 2019, we completed the acquisition of the
membership interests of Northfield Park Associates, LLC, the entity that owned
the operating assets associated with Hard Rock Rocksino Northfield Park
("Northfield Park," subsequently rebranded to MGM Northfield Park), from MGP,
and MGP retained the real estate assets. MGM Northfield Park was added to the
existing master lease between the Company and MGP. See Note 12 in the
accompanying financial statements for information regarding these transactions
with MGP.



In October 2019, we entered into an agreement to sell Circus Circus Las Vegas
and adjacent land. The transaction is expected to close in the fourth quarter of
2019 subject to customary closing conditions, including receipt of necessary
regulatory approvals. In connection with our review of the carrying value of
assets to be sold due to the offer for sale received during the third quarter of
2019, we recorded a non-cash impairment charge of $219 million. See Note 1 and
Note 2 in the accompanying financial statements for information regarding this
transaction and the impairment recorded.



Also, in October 2019, we entered into an agreement to form a joint venture with
a subsidiary of Blackstone Real Estate Income Trust ("BREIT"). The joint venture
will acquire the Bellagio real estate assets from us and lease the assets back
to us pursuant to a lease agreement (the "Bellagio Sale-Leaseback
Transaction"). As consideration, we will receive a 5% equity interest in the
joint venture with the remaining consideration in cash. We will also provide a
guarantee of the debt of the joint venture. The transaction is expected to close
in the fourth quarter of 2019, subject to certain closing conditions. See Note 1
in the accompanying financial statements for information regarding this
transaction.



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Key performance indicators related to gaming and hotel revenue are:

• Gaming revenue indicators: table games drop and slots handle (volume

indicators); "win" or "hold" percentage, which is not fully controllable by

us. Our normal table games hold percentage at our Las Vegas Strip Resorts

       is in the range of 25.0% to 35.0% of table games drop for Baccarat and
       19.0% to 23.0% for non-Baccarat; and



• Hotel revenue indicators - hotel occupancy (a volume indicator); average

daily rate ("ADR," a price indicator); and revenue per available room

("REVPAR," a summary measure of hotel results, combining ADR and occupancy

rate). Our calculation of ADR, which is the average price of occupied rooms

per day, includes the impact of complimentary rooms. Complimentary room

rates are determined based on standalone selling price. Because the mix of

rooms provided on a complimentary basis, particularly to casino customers,

includes a disproportionate suite component, the composite ADR including

       complimentary rooms is slightly higher than the ADR for cash rooms,
       reflecting the higher retail value of suites.



Additional key performance indicators at MGM China are:

• Gaming revenue indicators - MGM China utilizes "turnover," which is the sum

of nonnegotiable chip wagers won by MGM China calculated as nonnegotiable

chips purchased plus nonnegotiable chips exchanged less nonnegotiable chips

returned. Turnover provides a basis for measuring VIP casino win

percentage. Win for VIP gaming operations at MGM China is typically in the

       range of 2.6% to 3.3% of turnover.




Results of Operations



Summary Financial Results


The following table summarizes our consolidated financial results for the three and nine months ended September 30, 2019 and 2018:



                                                 Three Months Ended               Nine Months Ended
                                                    September 30,                   September 30,
                                                2019            2018            2019            2018
                                                                   (In thousands)
Net revenues                                 $ 3,314,382$ 3,029,302$ 9,714,536$ 8,710,234
Operating income                                 238,381         410,903         980,126       1,133,735
Net income                                         6,104         171,410         148,430         578,134
Net income (loss) attributable to MGM
Resorts International                            (37,133 )       142,878          37,569         490,099




Summary Operating Results



Consolidated net revenues increased 9% for the quarter ended September 30, 2019
compared to the prior year quarter due primarily to the continued ramp up of
operations at MGM Cotai following its opening in February 2018, a full quarter
of operating results at MGM Springfield, which opened in August 2018, the
acquisition of Empire City in January 2019, and an increase in non-casino
revenues at our Las Vegas Strip Resorts, as discussed further below.



Consolidated operating income decreased 42% for the quarter ended September 30,
2019 compared to the prior year quarter, primarily driven by a $219 million
non-cash impairment charge related to the long-lived assets of Circus Circus Las
Vegas and the adjacent land, included in property transactions, net. The prior
year quarter included a $45 million gain related to the sale of Grand Victoria.
Corporate expense, including normal share-based compensation for corporate
employees, increased $10 million compared to the prior year quarter due
primarily to $7 million in costs incurred to implement the MGM 2020 Plan and $3
million in finance modernization initiative costs. Preopening and start-up
expenses decreased by $46 million compared to the prior year quarter due
primarily to the openings of MGM Springfield and MGM Cotai. Depreciation and
amortization expense, and general and administrative expense increased in the
current quarter compared to the prior year quarter due primarily to the
operations of MGM Cotai, MGM Springfield, and Empire City.



Consolidated net revenues increased 12% for the nine months ended September 30,
2019 compared to the prior year period due primarily to the continued ramp up of
operations at MGM Cotai, and the operating results of MGM Springfield, Empire
City, and MGM Northfield Park, which MGP acquired in July 2018, and an increase
in non-casino revenue at our Las Vegas Strip Resorts, as discussed further
below.



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Consolidated operating income decreased 14% for the nine months ended September
30, 2019 compared to the prior year period. The current year period included a
$219 million non-cash impairment charge, discussed above and $87 million in
restructuring costs related to severance, accelerated stock compensation expense
and consulting fees directly related to the operating model component of the MGM
2020 Plan. The prior year period included a $45 million gain related to the sale
of Grand Victoria, as discussed above. Corporate expense, including normal
share-based compensation for corporate employees, increased $45 million compared
to the prior year period. The current period included $20 million of Empire City
acquisition costs, primarily related to transfer taxes and advisory fees, $28
million in costs incurred to implement the MGM 2020 Plan, of which $12 million
is included in the restructuring costs discussed above, and $10 million in
finance modernization initiative costs. The prior year period included $25
million of corporate brand campaign expenses. Preopening and start-up expenses
decreased by $128 million compared to the prior year period due primarily to the
opening of MGM Springfield and MGM Cotai. Depreciation and amortization expense,
and general and administrative expense increased in the nine months ended
September 30, 2019 compared to the prior year period due primarily to the
operations of MGM Cotai, MGM Springfield, MGM Northfield Park and Empire City.



Net Revenues by Segment


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



                                     Three Months Ended               Nine Months Ended
                                        September 30,                   September 30,
                                    2019            2018            2019            2018
                                                       (In thousands)
Las Vegas Strip Resorts
Table games win                  $   203,882$   227,922$   606,333$   726,942
Slots win                            308,780         290,831         882,058         835,276
Other                                 14,573          14,009          48,866          45,712
Less: Incentives                    (190,973 )      (186,829 )      (568,108 )      (539,484 )
Casino revenue                       336,262         345,933         969,149       1,068,446
Rooms                                469,145         443,477       1,407,733       1,343,563
Food and beverage                    401,362         368,823       1,156,657       1,069,977
Entertainment, retail and other      300,679         296,123         868,441         858,988
Non-casino revenue                 1,171,186       1,108,423       3,432,831       3,272,528
                                   1,507,448       1,454,356       4,401,980       4,340,974
Regional Operations
Table games win                      219,542         204,365         620,788         568,530
Slots win                            627,325         515,675       1,757,386       1,436,603
Other                                 81,766          30,541         226,231          77,871
Less: Incentives                    (267,885 )      (224,540 )      (715,553 )      (605,381 )
Casino revenue                       660,748         526,041       1,888,852       1,477,623
Rooms                                 90,197          90,152         243,449         242,581
Food and beverage                    126,625         113,953         368,374         314,136
Entertainment, retail and other       57,448          46,965         149,241         117,828
Non-casino revenue                   274,270         251,070         761,064         674,545
                                     935,018         777,111       2,649,916       2,152,168
MGM China
VIP table games win                  317,824         303,924         947,414         873,878
Main floor table games win           500,411         339,898       1,402,575       1,005,799
Slots win                             73,102          70,858         212,984         208,697
Less: Commissions and incentives    (228,499 )      (178,030 )      (603,391 )      (504,234 )
Casino revenue                       662,838         536,650       1,959,582       1,584,140
Rooms                                 36,294          32,690         105,171          83,526
Food and beverage                     32,214          31,606          93,836          80,447
Entertainment, retail and other        6,409           5,068          19,459          15,112
Non-casino revenue                    74,917          69,364         218,466         179,085
                                     737,755         606,014       2,178,048       1,763,225
Reportable segment net revenues    3,180,221       2,837,481       9,229,944       8,256,367
Corporate and other                  134,161         191,821         484,592         453,867
                                 $ 3,314,382$ 3,029,302$ 9,714,536$ 8,710,234






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Las Vegas Strip ResortsLas Vegas Strip Resorts casino revenue decreased 3% for the quarter ended
September 30, 2019 compared to the prior year quarter due primarily to an 11%
decrease in tables games win primarily resulting from a 6% decrease in table
games drop, driven by baccarat, partially offset by a 6% increase in slots win.



Las Vegas Strip Resorts casino revenue decreased 9% for the nine months ended
September 30, 2019 compared to the prior year period due primarily to a 17%
decrease in table games win primarily resulting from a 7% decrease in table
games drop, driven by baccarat, and an increase in incentives, partially offset
by a 6% increase in slots win.



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



                    Three Months Ended          Nine Months Ended
                       September 30,              September 30,
                     2019          2018          2019         2018
                                (Dollars in millions)
Table Games Drop  $      842$   897$    2,661$ 2,848
Table Games Win %       24.2 %       25.4 %         22.8 %      25.5 %
Slots Handle      $    3,280$ 3,143$    9,458$ 9,226
Slots Hold %             9.4 %        9.3 %          9.3 %       9.1 %




Las Vegas Strip Resorts rooms revenue increased 6% and 5% for the three and nine
months ended September 30, 2019 compared to the prior year periods,
respectively, due primarily to a 4% and 3% increase in REVPAR, respectively, as
well as a 2% increase in available rooms in each period as a result of the
completion of the rebranding and repositioning of Park MGM.



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



                                       Three Months Ended           Nine Months Ended
                                          September 30,               September 30,
                                      2019            2018          2019           2018
Occupancy                                  92 %            93 %          92 %         92 %
Average Daily Rate (ADR)            $     164$     157$     167$  162
Revenue per Available Room (REVPAR) $     152$     146$     154$  149Las Vegas Strip Resorts food and beverage revenue increased 9% and 8% for the
three and nine months ended September 30, 2019 compared to the prior year
periods, respectively, due primarily to the opening of new outlets at Park MGM
and NoMad Las Vegas and an increase in catering and banquets revenue driven by
the completion of the expansion of MGM Grand's Conference Center in 2019.



Regional Operations



Regional Operations casino revenue increased 26% and 28% for the three and nine
months ended September 30, 2019 compared to the prior year periods,
respectively, due primarily to the inclusion of Empire City's video lottery
terminal revenue in other casino revenue, the acquisition of MGM Northfield
Park's operations from MGP, the opening of MGM Springfield, and increases in
slots win at MGM National Harbor.



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



                    Three Months Ended          Nine Months Ended
                       September 30,              September 30,
                     2019          2018         2019          2018
                                (Dollars in millions)
Table Games Drop  $    1,122$ 1,054$   3,158$  2,945
Table Games Win %       19.6 %       19.4 %        19.7 %       19.3 %
Slots Handle      $    6,666$ 5,755$  18,717$ 15,942
Slots Hold %             9.4 %        9.0 %         9.4 %        9.0 %


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Regional Operations food and beverage revenue increased 11% and 17% for the three and nine months ended September 30, 2019 compared to the prior year periods, respectively, primarily due to the opening of MGM Springfield, the acquisition of Empire City, and the acquisition of MGM Northfield Park's operations from MGP.


Regional Operations entertainment, retail and other revenue increased 22% and
27% for the three and nine months ended September 30, 2019 compared to the prior
year periods, respectively. The increase for both periods is due primarily to
entertainment events related to MGM Springfield, entertainment events at Center
Stage at MGM Northfield Park, and ATM fees from the operations of MGM
Springfield, Empire City, and MGM Northfield Park.



MGM China

The following table shows key gaming statistics for MGM China:



                               Three Months Ended          Nine Months Ended
                                  September 30,              September 30,
                                2019          2018         2019          2018
                                           (Dollars in millions)

VIP Table Games Turnover $ 8,646$ 9,419$ 29,619$ 29,618 VIP Table Games Win %

               3.7 %        3.2 %         3.2 %        3.0 %
Main Floor Table Games Drop  $    2,117$ 1,882$   6,147$  5,532
Main Floor Table Games Win %       23.6 %       18.1 %        22.8 %       18.2 %




MGM China net revenues increased 22% to $738 million for the quarter ended
September 30, 2019 compared to the prior year quarter primarily as a result of
the continued ramp up of operations at MGM Cotai and an increase in main floor
table games win percentage. Main floor table games win increased 47% compared to
the prior year quarter due to the addition of 25 new-to-market tables at MGM
Cotai in 2019 and a 559 basis point increase in win percentage. VIP table games
win increased 5% compared to the prior year quarter due to the opening of VIP
gaming areas at the end of the third quarter of 2018 at MGM Cotai and an
increase in the VIP table games win percentage.



MGM China net revenues increased 24% to $2.2 billion for the nine months ended
September 30, 2019 compared to the prior year period primarily as a result of
continued ramp up of operations at MGM Cotai and an increase in main floor table
games win percentage. Main floor table games win increased 39% compared to the
prior year period due to the addition of the new-to-market tables at MGM Cotai
in January 2019 and a 463 basis point increase in win percentage. VIP table
games win increased 8% compared to the prior year period due to the opening of
VIP gaming areas at the end of the third quarter of 2018 at MGM Cotai and an
increase in the VIP table games win percentage.



Corporate and other



Corporate and other revenue includes revenues from other corporate operations,
management services and reimbursed costs revenue primarily related to our
CityCenter management agreement. Corporate and other revenue for the three and
nine months ended September 30, 2019 included $0 and $68 million in net revenues
from MGP's Northfield casino, respectively, which represents revenues prior to
our acquisition of MGM Northfield Park's operations from MGP on April 1, 2019.
Corporate and other revenue for each of the three and nine months ended
September 30, 2018 included $66 million in net revenues from MGP's Northfield
casino. Reimbursed costs revenue represents reimbursement of costs, primarily
payroll-related, incurred by us in connection with the provision of management
services and was $108 million and $107 million for the three months ended
September 30, 2019 and 2018, respectively and $331 million and $315 million for
the nine months ended September 30, 2019 and 2018, respectively. See below for
additional discussion of our share of operating results from unconsolidated
affiliates.



                                       35
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Adjusted EBITDA


The following table presents a detail of Adjusted EBITDA. Management uses Adjusted Property EBITDA as the primary profit measure for its reportable segments. See "Non-GAAP Measures" for additional information.



                                               Three Months Ended             Nine Months Ended
                                                  September 30,                 September 30,
                                               2019          2018           2019            2018
                                                                 (In thousands)
Las Vegas Strip Resorts                      $ 441,155$ 419,699$ 1,262,879$ 1,304,758
Regional Operations                            263,616       207,249         725,343         564,277
MGM China                                      182,010       130,046         543,628         401,672
Reportable segment Adjusted Property EBITDA    886,781       756,994       2,531,850       2,270,707
Corporate and other                            (73,117 )     (41,129 )      (222,419 )      (158,118 )
Adjusted EBITDA                              $ 813,664$ 715,865$ 2,309,431$ 2,112,589Las Vegas Strip Resorts

Adjusted Property EBITDA at our Las Vegas Strip Resorts increased 5% and Adjusted Property EBITDA margin increased 41 basis points to 29.3% for the quarter ended September 30, 2019 compared to the prior year quarter primarily as a result of an increase in non-casino revenues, as discussed above.




Adjusted Property EBITDA at our Las Vegas Strip Resorts decreased 3% and
Adjusted Property EBITDA margin decreased 137 basis points to 28.7% for the nine
months ended September 30, 2019 compared to the prior year period due primarily
to a decrease in table games revenue, as discussed above, and an increase in
general and administrative expenses.



Regional Operations



Adjusted Property EBITDA at our Regional Operations increased 27% for the
quarter ended September 30, 2019 compared to the prior year quarter and
benefited from a full quarter of operations at MGM Springfield, the acquisition
of Empire City and the acquisition of MGM Northfield Park's operations from MGP.
Adjusted Property EBITDA margin increased by 152 basis points for the quarter
ended September 30, 2019 compared to the prior year quarter to 28.2%, primarily
as a result of the inclusion of Empire City and MGM Northfield Park, partially
offset by the continued ramp up of operations at MGM Springfield.



Adjusted Property EBITDA at our Regional Operations increased 29% for the nine
months ended September 30, 2019 compared to the prior year period and benefited
from the opening of MGM Springfield, the acquisition of Empire City and the
acquisition of MGM Northfield Park's operations from MGP. Adjusted Property
EBITDA margin increased by 115 basis points for the nine months ended September
30, 2019 compared to the prior year period to 27.4%, primarily as a result of
the inclusion of Empire City and MGM Northfield Park, partially offset by the
continued ramp up of operations at MGM Springfield.



MGM ChinaMGM China's Adjusted Property EBITDA increased 40% for the quarter ended
September 30, 2019 compared to the prior year quarter due primarily to the ramp
up of operations at MGM Cotai, and an increase in main floor table games win
percentage, as discussed above. Adjusted Property EBITDA margin was 24.7%, a 321
basis point increase compared to the prior year quarter due to the reasons
discussed above. Excluding intercompany license fees of $13 million and $11
million for the quarter ended September 30, 2019 and 2018, respectively,
Adjusted Property EBITDA increased 39% compared to the prior year quarter.



MGM China's Adjusted Property EBITDA increased 35% for the nine months ended
September 30, 2019 compared to the prior year period due primarily to the ramp
up of operations at MGM Cotai, and an increase in main floor table games win
percentage, as discussed above. Adjusted Property EBITDA margin was 25.0%, a 218
basis point increase compared to the prior year period due to the reasons
discussed above. Excluding intercompany license fees of $38 million and $31
million for the nine months ended September 30, 2019 and 2018, respectively,
Adjusted Property EBITDA increased 34% compared to the prior year period.



                                       36

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Corporate and other



Adjusted EBITDA related to corporate and other for the quarter ended September
30, 2019 decreased $32 million compared to the prior year quarter. The prior
year quarter included $22 million of Adjusted Property EBITDA related to MGM
Northfield Park's operating results, prior to our acquisition of the operations
from MGP on April 1, 2019. In addition, corporate expense increased, as
described in "Summary Operating Results."



Adjusted EBITDA related to corporate and other for the nine months ended
September 30, 2019 decreased $64 million compared to the prior year period
primarily due to $14 million of non-recurring charges including certain one-time
management termination fees and other fees, as well as an increase in corporate
expense, as described in "Summary Operating Results."





Operating Results - Income from Unconsolidated Affiliates

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




             Three Months Ended           Nine Months Ended
                September 30,               September 30,
              2019          2018         2019          2018
                             (In thousands)
CityCenter $   39,317$ 33,232$ 105,672$ 107,294
Other          (3,103 )      2,263        (3,705 )       7,907
           $   36,214$ 35,495$ 101,967$ 115,201




Our share of CityCenter's operating income, including certain basis difference
adjustments, for the quarter ended September 30, 2019 was $39 million compared
to $33 million in the prior year quarter due primarily to an increase in casino
and non-casino revenues. At Aria, casino revenues increased 24% for the quarter
ended September 30, 2019 compared to the prior year quarter due primarily to a
13% increase in each of table games win and slots win. CityCenter's non-casino
revenues increased 4% for the quarter ended September 30, 2019 compared to the
prior year quarter primarily related to an increase in food and beverage revenue
due to the opening of a new outlet and a 4% increase in rooms revenue due
primarily to a 4% increase in REVPAR at Aria.



Our share of CityCenter's operating income, including certain basis difference
adjustments, for the nine months ended September 30, 2019 was $106 million
compared to $107 million in the prior year period. The current period included
$12 million in charges related to restructuring costs and certain one-time
management agreement termination fees. At Aria, casino revenues increased 5% for
the nine months ended September 30, 2019 compared to the prior year period due
primarily to a 9% increase in slots win. CityCenter's non-casino revenues
increased 5% for the nine months ended September 30, 2019 compared to the prior
year period primarily related to increases in food and beverage revenue due to
the opening of a new outlet and an increase in catering and banquet revenue, and
a 4% increase in rooms revenue due primarily to a 5% increase in REVPAR at Aria.



Non-operating Results



Interest Expense



Gross interest expense was $216 million for both the three months ended
September 30, 2019 and 2018 as the decrease in average debt outstanding under
our senior credit facilities and decrease in the weighted average interest rate
related to our senior notes was offset by an increase in average debt
outstanding related to our senior notes, due to the issuance of notes during the
year. Gross interest expense increased $49 million for the nine months ended
September 30, 2019 compared to the prior year period due to an increase in the
average debt outstanding relating to our senior notes and an increase in the
weighted average interest rate related to our senior credit facilities, which
was partially offset by a decrease in the weighted average interest rate related
to our senior notes. Capitalized interest was $1 million and $4 million during
the three and nine months ended September 30, 2019, respectively, compared to
$11 million and $48 million during the three and nine months ended September 30,
2018, respectively. The decrease in capitalized interest was due primarily to
the completion of MGM Springfield, which opened in August 2018, and the
completion of MGM Cotai, which opened in February 2018. See Note 5 to the
accompanying consolidated financial statements for additional discussion on
long-term debt and see "Liquidity and Capital Resources" for additional
discussion on issuances and repayments of long-term debt and other sources and
uses of cash.



                                       37
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Other, net



Other expenses for the three months ended September 30, 2019 increased $6
million compared to the prior year quarter, primarily due to a $2 million loss
incurred on the early retirement of debt related to MGM China's senior secured
credit facility and a $7 million remeasurement loss on MGM China'sU.S.
dollar-denominated senior notes. Refer to note 5 for further discussion of our
long-term debt.



Other expenses for the nine months ended September 30, 2019 increased $42
million compared to the prior year period, primarily due to a $56 million loss
incurred on the early retirement of debt related to our senior notes and MGM
China's senior secured credit facility, partially offset by a $2 million
remeasurement gain on MGM China'sU.S. dollar-denominated senior notes. Refer to
Note 5 for further discussion on long-term debt.



Income Taxes



Our effective tax rate for the quarter ended September 30, 2019 was a benefit of
620.8% compared to a provision of 10.0% in the prior year quarter. Our effective
tax rate for the nine months ended September 30, 2019 was a provision of 33.9%
compared to a benefit of 8.0% in the prior year period. The net tax benefit for
the quarter ended September 30, 2019 was primarily due to tax benefit resulting
from the $219 million non-cash impairment charge related to Circus Circus Las
Vegas and adjacent land. The effective rate for the nine months ended September
30, 2019 was unfavorably impacted by the remeasurement of Macau deferred taxes
due to the extension of the subconcession agreement in Macau, the recording of
deferred state taxes resulting from the Empire City Acquisition and adjustments
to our foreign tax credit valuation allowance, partially offset by the tax
benefit resulting from the Circus Circus Las Vegas and adjacent land non-cash
impairment charge. The quarter ended September 30, 2018 was favorably impacted
by tax benefits related to changes in state income tax rates. The nine months
ended September 30, 2018 was favorably impacted by the reversal of Macau
shareholder dividend tax accrued prior to the extension of the current annual
fee arrangement, a measurement period tax benefit adjustment for U.S. Tax
Reform, and tax benefits related to changes in state income tax rates.



The annual effective tax rate calculation for all periods is impacted by assumptions made regarding projected foreign tax credit usage and valuation allowance. See Note 6 in the accompanying consolidated financial statements for further discussion.




Non-GAAP Measures

"Adjusted EBITDA" is earnings before interest and other non-operating income
(expense), taxes, depreciation and amortization, preopening and start-up
expenses, restructuring costs (which represents costs related to severance,
accelerated stock compensation expense, and consulting fees directly related to
the operating model component of the MGM 2020 Plan), and property transactions,
net. We utilize "Adjusted Property EBITDA" as the primary profit measures for
our reportable segments and underlying operating segments. Adjusted Property
EBITDA is a measure defined as Adjusted EBITDA before corporate expense and
stock compensation expense, which are not allocated to each operating segment,
and before rent expense related to the master lease with MGP that eliminates in
consolidation. "Adjusted Property EBITDA margin" is Adjusted Property EBITDA
divided by related segment net revenues.

Adjusted EBITDA information is presented solely as a supplemental disclosure to
reported GAAP measures because we believe these measures are 1) widely used
measures of operating performance in the gaming industry, and 2) a principal
basis for valuation of gaming companies. We believe that while items excluded
from Adjusted EBITDA, Adjusted Property EBITDA, and Adjusted Property EBITDA
margin may be recurring in nature and should not be disregarded in evaluation of
our earnings performance, it is useful to exclude such items when analyzing
current results and trends compared to other periods because these items can
vary significantly depending on specific underlying transactions or events that
may not be comparable between the periods being presented. Also, we believe
excluded items may not relate specifically to current operating 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, capital
allocation, tax planning, financing and stock compensation awards are all
managed at the corporate level. Therefore, we use Adjusted Property EBITDA as
the primary measure of our operating resorts' performance.

Adjusted EBITDA, Adjusted Property EBITDA or Adjusted Property EBITDA margin
should not be construed as alternatives to operating income or net income, as
indicators of our performance; or as alternatives to cash flows from operating
activities, as measures of liquidity; or as any other measure determined in
accordance with generally accepted accounting principles. We have significant
uses of cash flows, including capital expenditures, interest payments, taxes and
debt principal repayments, which are not reflected in Adjusted EBITDA, Adjusted
Property EBITDA or Adjusted Property EBITDA margin. Also, other companies in the
gaming and hospitality industries that report Adjusted EBITDA, Adjusted Property
EBITDA or Adjusted Property EBITDA margin information may calculate Adjusted
EBITDA, Adjusted Property EBITDA or Adjusted Property EBITDA margin in a
different manner.

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The following table presents a reconciliation of net income (loss) attributable to MGM Resorts International to Adjusted EBITDA:



                                               Three Months Ended             Nine Months Ended
                                                  September 30,                 September 30,
                                               2019          2018           2019            2018
                                                                 (In thousands)
Net income (loss) attributable to MGM
Resorts International                        $ (37,133 )$ 142,878$    37,569$   490,099
Plus: Net income attributable to
noncontrolling interests                        43,237        28,532         110,861          88,035
Net income                                       6,104       171,410         148,430         578,134
Provision (benefit) for income taxes            (7,276 )      19,046          75,969         (42,623 )
Income (loss) before income taxes               (1,172 )     190,456         224,399         535,511
Non-operating (income) expense
Interest expense, net of amounts capitalized   215,503       205,573         647,452         554,975
Non-operating items from unconsolidated
affiliates                                      14,669        11,583          54,311          31,661
Other, net                                       9,381         3,291          53,964          11,588
                                               239,553       220,447         755,727         598,224
Operating income                               238,381       410,903         980,126       1,133,735
Preopening and start-up expenses                   925        46,890           5,091         132,884
Property transactions, net                     249,858       (42,400 )       264,424         (19,532 )
Depreciation and amortization                  322,009       300,472         973,211         865,502
Restructuring                                    2,491             -          86,579               -
Adjusted EBITDA                              $ 813,664$ 715,865$ 2,309,431$ 2,112,589




                                       39
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The following table presents Adjusted Property EBITDA and Adjusted EBITDA:



                                  Three Months Ended             Nine Months Ended
                                     September 30,                 September 30,
                                  2019          2018           2019            2018
                                                    (In thousands)
Bellagio                        $ 117,589$ 104,715$   355,914$   371,716
MGM Grand Las Vegas                85,694       116,647         219,055         298,846
Mandalay Bay                       66,256        58,649         184,998         194,415
The Mirage                         41,186        27,098         119,153          99,715
Luxor                              32,560        31,985          94,201          94,530
New York-New York                  34,790        32,128         109,011         102,464
Excalibur                          29,576        28,478          86,960          84,106
Park MGM                           15,739         1,403          45,589           9,776
Circus Circus Las Vegas            17,765        18,596          47,998          49,190
Las Vegas Strip Resorts           441,155       419,699       1,262,879       1,304,758
MGM Grand Detroit                  45,569        48,440         145,254         146,966
Beau Rivage                        29,863        29,438          84,226          76,906
Gold Strike Tunica                 15,506        14,668          50,808          39,477
Borgata                            67,168        60,806         159,431         154,955
MGM National Harbor                52,879        46,253         150,978         138,329
MGM Springfield                     9,228         7,644          31,090           7,644
Empire City Casino                 19,980             -          56,333               -
MGM Northfield Park                23,423             -          47,223               -
Regional Operations               263,616       207,249         725,343         564,277
MGM Macau                         102,216       118,211         347,780         363,859
MGM Cotai                          79,794        11,835         195,848          37,813
MGM China                         182,010       130,046         543,628         401,672
Unconsolidated resorts             36,192        35,495         105,031         115,201

Management and other operations 2,232 27,978 24,279

     48,314
Stock compensation                (14,419 )     (16,618 )       (45,280 )       (49,521 )
Corporate                         (97,122 )     (87,984 )      (306,449 )      (272,112 )
                                $ 813,664$ 715,865$ 2,309,431$ 2,112,589

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, tax payments or
refunds, and distributions from unconsolidated affiliates. Cash provided by
operating activities was $1.36 billion in the nine months ended September 30,
2019 compared to cash provided by operating activities of $1.4 billion in the
nine months ended September 30, 2018. Operating cash flows decreased due to the
current year period being negatively affected by a change in working capital
primarily related to gaming deposits, as well as an increase in cash paid for
interest, as discussed in "Non-operating Results," and an increase in cash paid
for taxes, partially offset by increases in our operating results from MGM China
and our Regional Operations.



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.



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Cash used in investing activities decreased $769 million to $1.0 billion in the
nine months ended September 30, 2019 from $1.8 billion in the nine months ended
September 30, 2018. The change was due primarily to a decrease of $741 million
in capital expenditures and the inclusion of the $1.0 billion outflow for MGP's
acquisition of Northfield Park in 2018, partially offset by the $536 million
outflow for the acquisition of Empire City, $106 million of outflows related to
investments in unconsolidated affiliates and the extension of our subconcession
at MGM China, and a $221 million decrease in distributions from unconsolidated
affiliates. Distributions from unconsolidated affiliates in the nine months
ended September 30, 2019 included our $90 million share of a $180 million annual
dividend paid by CityCenter in 2019. Distributions from unconsolidated
affiliates for the nine months ended September 30, 2018 consisted of our $200
million share of a $400 million dividend paid by CityCenter in May 2018, our
$113 million share of a $225 million dividend paid by CityCenter in September
2018, and our $8 million share of distributions from other unconsolidated
affiliates during the period. The decrease in capital expenditures primarily
reflects substantial completion of our development projects at MGM Cotai, MGM
Springfield, and the rebranding at Park MGM, as discussed in further detail
below.



Capital Expenditures



We made capital expenditures of $483 million in the nine months ended September
30, 2019, of which $83 million related to MGM China. Capital expenditures at MGM
China included $63 million related to projects at MGM Cotai and $20 million
related to projects at MGM Macau. Capital expenditures at our Las Vegas Strip
Resorts, Regional Operations and corporate entities of $400 million included $43
million related to the construction of MGM Springfield, $43 million related to
the Park MGM rebranding project, as well as expenditures relating to information
technology, the expansion of the convention center at MGM Grand Las Vegas and
various room, restaurant, and entertainment venue remodels.



We made capital expenditures of $1.2 billion in the nine months ended September
30, 2018, of which $327 million related to MGM China, excluding development fees
and capitalized interest on development fees eliminated in consolidation.
Capital expenditures at MGM China included $299 million related to the
construction of MGM Cotai and $27 million related to projects at MGM Macau.
Capital expenditures at our Las Vegas Strip Resorts, Regional Operations and
corporate entities of $897 million included $318 million related to the
construction of MGM Springfield, $178 million related to the Park MGM rebranding
project, $58 million related to a deposit for the purchase of an airplane, as
well as expenditures relating to the expansion of the convention center at MGM
Grand Las Vegas and various room, restaurant, and entertainment venue remodels.



Financing activities. Cash used in financing activities was $620 million in the
nine months ended September 30, 2019 compared to cash provided by financing
activities of $207 million in the nine months ended September 30, 2018. The
change was due primarily to net debt repayments of $221 million in the nine
months ended September 30, 2019 compared to net debt borrowings of $1.8 billion
in the nine months ended September 30, 2018. Additionally, we had net proceeds
from MGP's issuances of Class A shares in 2019 of $700 million and a decrease of
$495 million in share repurchases.



Borrowings and Repayments of Long-term Debt




During the nine months ended September 30, 2019, we repaid net debt of $221
million which consisted of the repayment of our $850 million 8.625% notes due
2019, the repayment of an aggregate $872 million of our senior notes pursuant to
cash tender offers, $1.7 billion of net repayments on the previous MGM China
senior secured credit facility, and $567 million of net repayments on the
Operating Partnership's senior credit facility, partially offset by our issuance
of $1.0 billion of senior notes, the Operating Partnership's issuance of $750
million of senior notes, MGM China's issuance of $1.5 billion of senior notes,
and $510 million of net borrowings on our senior credit facility.



In April 2019, we issued $1.0 billion in aggregate principal amount of 5.50%
senior notes due 2027. We used the net proceeds from the offering to fund the
purchase of $639 million in aggregate principal amount of our outstanding 6.75%
senior notes due 2020 and $233 million in aggregate principal amount of our
outstanding 5.25% senior notes due 2020 through our cash tender offers.



In May 2019, MGM China issued $750 million in aggregate principal amount of
5.375% senior notes due 2024 and $750 million in aggregate principal amount of
5.875% senior notes due 2026 and used the proceeds to permanently repay
approximately $1.0 billion on its term loan facility with the remainder used to
pay down its revolving credit facility under its prior senior secured credit
facility. In August 2019, MGM China entered into a new $1.25 billion senior
unsecured revolving credit facility, on which it drew $776 million and used the
proceeds to fully repay the borrowings outstanding under its previous senior
secured credit facility.



The proceeds from the Operating Partnership's issuance of $750 million 5.75%
senior notes due 2027 along with the proceeds from MGP's Class A share issuance,
discussed above, were primarily used to finance MGP's acquisition of the real
property associated with Empire City, finance the Park MGM Lease Transaction,
and repay amounts drawn under the Operating Partnership's revolving credit
facility. The draws under our senior credit facility were primarily used to
repay our senior notes due 2019, partially finance our acquisition of Empire
City, pay dividends, and repurchase shares of our common stock. Additionally, we
paid $63 million

                                       41
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of debt issuance costs related to the issuance of the Operating Partnership's senior notes, our senior notes and MGM China's senior notes.


During the nine months ended September 30, 2018, we borrowed net debt of $1.8
billion which consisted of the issuance of $1.0 billion 5.750% senior notes due
2025, $175 million of net borrowings on the MGM China credit facility, $747
million of net borrowings on the Operating Partnership senior credit facility,
and $144 million of net repayments on the MGM senior credit facility.
Additionally, we paid $65 million of debt issuance costs related to amendments
of the Operating Partnership's senior credit facility in March and June 2018,
the amendment of MGM China's credit facility in June 2018 and the issuance of
the $1.0 billion 5.750% senior notes.



Dividends, Distributions to Noncontrolling Interest Owners and Share Repurchases




During the nine months ended September 30, 2019, we repurchased and retired $639
million of our common stock pursuant to our current $2.0 billion stock
repurchase plan. During the nine months ended September 30, 2018, we repurchased
and retired $1.1 billion of our common stock pursuant to our current and prior
stock repurchase plans. The remaining availability under our $2.0 billion stock
repurchase program was approximately $750 million as of September 30, 2019.



In June 2019, MGM China paid the final dividend for 2018 of $16 million, of
which we received $9 million and noncontrolling interests received $7 million.
In August 2019, MGM China paid an interim dividend for 2019 of $46 million, of
which we received $25 million and noncontrolling interests received $20 million.



During the nine months ended September 30, 2019 we paid dividends each quarter
of $0.13 per share, totaling $205 million, compared to dividends each quarter of
$0.12 per share, totaling $197 million, paid in the nine months ended September
30, 2018.


The Operating Partnership paid the following distributions to its partnership unit holders during the nine months ended September 30, 2019 and 2018:

$395 million of distributions paid in 2019, of which we received $278
       million and MGP received $117 million, which MGP concurrently paid as a
       dividend to its Class A shareholders; and

$454 million of distributions paid in 2018, of which we received $333

million and MGP received $121 million, which MGP concurrently paid as a

       dividend to its Class A shareholders.



Other Factors Affecting Liquidity




Anticipated uses of cash. We require a certain amount of cash on hand to operate
our resorts. 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 borrowings under our senior secured 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 senior secured credit facility
and Delaware law, as applicable. We have significant outstanding debt, interest
payments, and contractual obligations in addition to planned capital
expenditures.



We held cash and cash equivalents of $1.2 billion at September 30, 2019, of
which MGM China held $490 million and the Operating Partnership held $154
million. At September 30, 2019, we had $15.1 billion in principal amount of
indebtedness, including $1.3 billion of borrowings outstanding under our $2.25
billion senior secured credit facility, $2.3 billion outstanding under the $3.6
billionOperating Partnership credit facility, and $776 million outstanding
under the $1.25 billionMGM China revolving credit facility. We expect to meet
our debt maturities and planned capital expenditure requirements with future
anticipated operating cash flows, cash and cash equivalents, and available
borrowings under our credit facilities. We expect to make domestic capital
investments at our resorts and corporate entities of $175 million to $225
million, which includes $5 million of construction costs remaining to close out
MGM Springfield. Additionally, we expect to make capital investments at MGM
China of $105 million to $110 million, which includes approximately $85 million
of construction closeout costs at MGM Cotai and approximately $20 million to $25
million of maintenance capital expenditures.



In October 2019, we entered into an agreement for the sale of Circus Circus Las
Vegas and adjacent land for consideration of $825 million, consisting of $662.5
million paid in cash, and also entered into an agreement to sell the real estate
assets of Bellagio for $4.25 billion, consisting of approximately $4.2 billion
paid in cash, and lease the real estate assets back pursuant to the Bellagio
Sale-Leaseback Transaction. We expect to use the net cash proceeds from these
transactions to repay debt and repurchase shares. We also expect to pay rent and
other required cash outlays relating to the Bellagio Sale-Leaseback Transaction
with future anticipated operating cash flows. See Note 1 and Note 2 in the
accompanying financial statements for information regarding these transactions.

                                       42

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On October 30, 2019, our Board of Directors approved a quarterly dividend of
$0.13 per share that will be payable on December 16, 2019 to holders of record
on December 10, 2019.



In October 2019, the Operating Partnership paid $139 million of distributions to
its partnership unit holders, of which we received $94 million and MGP received
$45 million, which MGP concurrently paid as a dividend to its Class A
shareholders.



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, 2018. There have been no significant changes in our critical accounting policies and estimates since year end.




Market Risk

In addition to the inherent risks associated with our normal operations, we are
also exposed to additional market risks. Market risk is the risk of loss arising
from adverse changes in market rates and prices, such as interest rates and
foreign currency exchange rates. Our primary exposure to market risk is interest
rate risk associated with our variable rate long-term debt. We attempt to limit
our exposure to interest rate risk by managing the mix of our long-term fixed
rate borrowings and short-term borrowings under our bank credit facilities and
by utilizing interest rate swap agreements that provide for a fixed interest
payment on the Operating Partnership's term loan B facility. A change in
interest rates generally does not have an impact upon our future earnings and
cash flow for fixed-rate debt instruments. As fixed-rate debt matures, however,
and if additional debt is acquired to fund the debt repayment, future earnings
and cash flow may be affected by changes in interest rates. This effect would be
realized in the periods subsequent to the periods when the debt matures. We do
not hold or issue financial instruments for trading purposes and do not enter
into derivative transactions that would be considered speculative positions.

As of September 30, 2019, variable rate borrowings represented approximately 19%
of our total borrowings after giving effect to the $1.5 billion total notional
amount Operating Partnership interest rate swaps currently effective, on which
it pays a weighted average fixed rate of 1.707%. The following table provides
additional information about our gross long-term debt subject to changes in
interest rates excluding the effect of the Operating Partnership interest rate
swaps discussed above:



                                                                                                           Fair Value
                                                 Debt maturing in                                         September 30,
                2019        2020        2021        2022        2023        Thereafter       Total            2019
                                                             (In millions)
Fixed-rate     $     -     $   628$ 1,250$ 1,000$ 1,250$      6,651$ 10,779$        11,679
Average
interest rate      N/A         6.1 %       6.6 %       7.8 %       6.0 %            5.4 %        5.9 %
Variable rate  $     8$    68$    68$    68$ 1,595$      2,481$  4,288     $         4,287
Average
interest rate      4.0 %       4.0 %       4.0 %       4.0 %       4.0 %            4.1 %        4.1 %




In addition to the risk associated with our variable interest rate debt, we are
also exposed to risks related to changes in foreign currency exchange rates,
mainly related to MGM China and to our operations at MGM Macau and MGM Cotai.
While recent fluctuations in exchange rates have not been significant, potential
changes in policy by governments or fluctuations in the economies of the United
States, China, Macau or Hong Kong could cause variability in these exchange
rates. We cannot assure you that the Hong Kong dollar will continue to be pegged
to the U.S. dollar or the current peg rate for the Hong Kong dollar will remain
at the same level. The possible changes to the peg of the Hong Kong dollar may
result in severe fluctuations in the exchange rate thereof. For U.S. dollar
denominated debt incurred by MGM China, fluctuations in the exchange rates of
the Hong Kong dollar in relation to the U.S. dollar could have adverse effects
on our financial position and results of operations. As of September 30, 2019, a
1% weakening of the Hong Kong dollar (the functional currency of MGM China) to
the U.S. dollar would result in a foreign currency transaction loss of $15
million.



Cautionary Statement Concerning Forward-Looking Statements




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 our ability to generate
significant cash flow and execute on ongoing and future projects, such as our
MGM 2020 Plan, and the expected results of the MGM 2020 Plan, including our
ability to achieve our MGM 2020 Plan goals and targets, the closing of the
Bellagio Sale-Leaseback Transaction and the Circus Circus Las Vegas transaction,
the expected net cash proceeds from the Bellagio Sale-Leaseback Transaction and
the Circus Circus Las Vegas transaction, amounts we will spend in capital
expenditures and investments, and our expectations with respect to future cash
dividends on our common stock,

                                       43

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and dividends and distributions we will receive from MGM China, the Operating Partnership or CityCenter. The foregoing is not a complete list of all forward-looking statements we make.




Forward-looking statements are based on our current expectations and assumptions
regarding our business, the economy and other future conditions. Because
forward-looking statements relate to the future, they are subject to inherent
uncertainties, risks, and changes in circumstances that are difficult to
predict. Our actual results may differ materially from those contemplated by the
forward-looking statements. They are neither statements of historical fact nor
guarantees or assurances of future performance. Therefore, we caution you
against relying on any of these forward-looking statements. Important factors
that could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, regional, national
or global political, economic, business, competitive, market, and regulatory
conditions and the following:

• our substantial indebtedness and significant financial commitments,

including the fixed component of our rent payments to MGP, rent we will be

required to make in connection with the Bellagio lease, and guarantee we

will provide of the indebtedness of the BREIT venture could adversely

affect our development options and financial results and impact our ability

to satisfy our obligations;

• current and future economic, capital and credit market conditions could

adversely affect our ability to service or refinance our indebtedness and

to make planned expenditures;

• 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 fixed and percentage rent under the master lease, 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 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 impact on our business of economic and market conditions in the
       jurisdictions in which we operate and in the locations in which our
       customers reside;

• the possibility that we may not realize all of the anticipated benefits of

our MGM 2020 Plan or our asset light strategy;

• our ability to pay ongoing regular dividends is subject to the discretion

of our board of directors and certain other limitations;

• a significant number 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 MGP, as our sole lessor for a significant portion of

our properties, may adversely impair our operations;

• the fact that MGP has adopted a policy under which certain transactions

with us, including transactions involving consideration in excess of $25

million, must be approved in accordance with certain specified procedures;

• restrictions on our ability to have any interest or involvement in gaming

       businesses in China, Macau, Hong Kong and Taiwan, other than through MGM
       China;

• the ability of the Macau government to terminate MGM Grand Paradise's

subconcession under certain circumstances without compensating MGM Grand

Paradise, exercise its redemption right with respect to the subconcession,

or refuse to grant MGM Grand Paradise an extension of the subconcession in

       2022;


                                       44
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    •  the dependence of MGM Grand Paradise upon gaming promoters for a
       significant portion of gaming revenues in Macau;


  • changes to fiscal and tax policies;

• 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;

• extreme weather conditions or climate change may cause property damage or

interrupt business;

• the concentration of a majority 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 or acts of war or hostility;


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

• the fact that future construction, development, or expansion projects will

       be subject to significant development and construction risks;


    •  our transaction with BREIT to monetize the Bellagio real property is
       subject to certain closing conditions, which, if not satisfied, may delay
       or prevent the closing;


• 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 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;

• risks related to pending claims that have been, or future claims that may

       be brought against us;


    •  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 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 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;

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

operate; and

• the potential for conflicts of interest to arise because certain of our

directors and officers are also directors of MGM China, which is a publicly

       traded company listed on the Hong Kong Stock Exchange.


                                       45

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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.

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© Edgar Online, source Glimpses

Stocks mentioned in the article
ChangeLast1st jan.
MGM CHINA HOLDINGS LIMITED 0.34% 11.9 End-of-day quote.-9.85%
MGM GROWTH PROPERTIES LLC 0.91% 30.07 Delayed Quote.12.84%
MGM RESORTS INTERNATIONAL 0.44% 32 Delayed Quote.32.61%
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