MGM RESORTS INTERNATIONAL REPORTS SECOND QUARTER 2021 FINANCIAL AND OPERATING RESULTS

MGM Resorts International reported financial results for the quarter ended June 30, 2021.

“We delivered a strong second quarter, driven by robust demand and productivity efforts across our domestic portfolio. Our Las Vegas Strip and Regional Operations Adjusted Property EBITDAR margins reached all-time records and our Regional Operations also delivered an all-time quarterly record in Adjusted Property EBITDAR. Our U.S. sports betting and iGaming venture, BetMGM, continues to outperform as the number two operator nationwide,” said Bill Hornbuckle, Chief Executive Officer and President of MGM Resorts International. “We also recently announced several strategic transactions that furthered our goal of becoming a more streamlined, focused organization with stronger liquidity. We continued to advance that goal today with our announced agreement with VICI and MGM Growth Properties to monetize our MGP Operating Partnership units for $4.4 billion in cash. I’m grateful for the tremendous work that our MGM Resorts teams continue to put into positioning this Company for future growth and success.”

“Our robust liquidity position provides us with significant flexibility as our business continues to improve and stabilize. As such, we have returned capital to shareholders through share repurchases during the second quarter and expect to remain programmatic in our approach through the rest of the year,” said Jonathan Halkyard, Chief Financial Officer and Treasurer of MGM Resorts. “As we navigate future uses of our capital, we will remain disciplined in maintaining a strong balance sheet, pursuing targeted growth opportunities and returning cash to shareholders.”

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Second Quarter 2021 Financial Highlights:

Consolidated Results

• Consolidated net revenues of $2.3 billion, an increase of 683% compared to the prior year quarter. While the current quarter benefited from the easing of operational and capacity restrictions and an increase in travel, the prior year quarter was negatively affected by temporary closures at our properties due to the COVID-19 pandemic;
• Consolidated operating income was $264 million compared to consolidated operating loss of $1.0 billion in the prior year quarter;
• Net income attributable to MGM Resorts of $105 million compared to net loss attributable to MGM Resorts of $857 million in the prior year quarter;
• Diluted earnings per share of $0.14 in the current quarter compared to diluted loss per share of $1.67 in the prior year quarter;
• Adjusted diluted earnings per share (“Adjusted EPS”)⁽¹⁾ was a loss per share of $0.13 in the current quarter compared to an Adjusted EPS loss per share of $1.52 in the prior year quarter; and
• Consolidated Adjusted EBITDAR⁽²⁾ of $617 million in the current quarter.

Financial Position   & Liquidity

• Cash and cash equivalents balance as of June 30, 2021 was $5.6 billion, which included $298 million at the MGP Operating Partnership and $331 million at MGM China;
• Total liquidity at June 30, 2021 was $9.9 billion, which included $1.6 billion at the MGP Operating Partnership and $1.8 billion at MGM China, which was comprised of cash and cash equivalents and capacity under the revolving credit facilities at the Company, MGP Operating Partnership and MGM China; and
• At June 30, 2021, principal amount of indebtedness was $12.7 billion, including $4.2 billion at the MGP Operating Partnership and $3.0 billion at MGM China.

Las Vegas Strip Resorts

• Net revenues of $1.0 billion, an increase of 566% compared to the prior year quarter and a decrease of 31% compared to the second quarter of 2019. While the current quarter benefited from the easing of operational and capacity restrictions and an increase in travel, the prior year quarter was negatively affected by temporary property closures;
• Table Games Hold Adjusted Las Vegas Strip Resorts Net Revenues⁽³⁾ of $1 billion, an increase of 613% compared to the prior year quarter and a decrease of 32% compared to the second quarter of 2019;
• Adjusted Property EBITDAR⁽²⁾  of $397 million compared to a loss of $104 million in the prior year quarter, and a decrease of 5% compared to the second quarter of 2019;
• Adjusted Property EBITDAR margin⁽²⁾ of 39.5% in the current quarter, an increase of 1,097 basis points compared to the second quarter of 2019 due primarily to realized benefits of the Company’s cost savings initiatives; and
• Table Games Hold Adjusted Las Vegas Strip Resorts Adjusted Property EBITDAR⁽²⁾ of $403 million compared to a loss of $112 million in the prior year quarter, and a decrease of 6% compared to the second quarter of 2019.

Regional Operations

• Net revenues of $856 million, an increase of 859% compared to the prior year quarter and a decrease of 6% compared to the second quarter of 2019. While the current quarter benefited from the easing of operational and capacity restrictions and an increase in travel, the prior year quarter was negatively affected by temporary property closures;
• Adjusted Property EBITDAR of $318 million compared to a loss of $112 million in the prior year quarter, and an increase of 22% compared to the second quarter of 2019; and
• Adjusted Property EBITDAR margin of 37% in the current quarter, an increase of 855 basis points compared to the second quarter of 2019 due primarily to realized benefits of the Company’s costs savings initiatives.

MGM China

• Net revenues of  $311 million, an increase of 836% compared to the prior year quarter and a decrease of 56% compared to the second quarter of 2019. The prior year quarter was more significantly impacted by travel and entry restrictions in Macau as well as other operational restrictions related to the pandemic than in the current quarter;
• VIP Table Games Hold Adjusted MGM China Net Revenues⁽³⁾ of $317 million, an increase of 895% compared to the prior year quarter and a decrease of 57% compared to the second quarter of 2019;
• Adjusted Property EBITDAR of $9 million compared to a loss of $116 million in the prior year quarter, and a decrease of 95% compared to the second quarter of 2019; and
• VIP Table Games Hold Adjusted MGM China Adjusted Property EBITDAR⁽²⁾ of $13 million compared to a loss of $118 million in the prior year quarter, and a decrease of 93% compared to the second quarter of 2019.

Recent Developments

In August 2021, the Company entered into an agreement with VICI Properties, Inc. (“VICI”) and MGP whereby VICI will acquire MGP.  Pursuant to the agreement, MGP Class A shareholders will receive 1.366x shares of newly issued VICI stock in exchange for each Class A share of MGP.  The fixed exchange ratio represents an agreed upon price of $43 per share of MGP Class A share to the five-day volume weighted average price of VICI stock as of the close of business on July 30, 2021. A majority of the Company’s Operating Partnership units will be redeemed for $43 per unit, for cash consideration of approximately $4.4 billion, and the Company will retain an approximate $370 million ownership interest in the VICI operating partnership. As part of the transaction, the Company will enter into an amended and restated master lease with VICI.  The new master lease will have an initial term of 25 years, with three ten-year renewals, and initial annual rent of $860 million, escalating at a rate of 2.0% per annum for the first 10 years and thereafter at the greater of 2.0% per annum or the consumer price index, subject to a 3.0% cap.  The other terms are largely consistent with the existing master lease.  The transaction is expected to close in the first half of 2022, subject to regulatory approvals and approval by VICI stockholders.

In June 2021, the Company entered into an agreement pursuant to which the Company will purchase the 50% ownership interest in CityCenter held by Infinity World Development Corp for cash consideration of $2.125 billion. The transaction is expected to close in the third quarter of 2021, subject to certain closing conditions. Upon close of the transaction, the Company will own 100% of CityCenter and, accordingly, will consolidate CityCenter in its financial statements. The Company also entered into an agreement pursuant to which a fund managed by Blackstone Group Inc. will acquire the real estate assets of Aria and Vdara from the Company for cash consideration of $3.89 billion and lease it back to a subsidiary of the Company pursuant to a lease agreement. The Aria and Vdara lease will have an initial term of 30 years and initial annual base cash rent of $215 million. The transaction is expected to close in the third quarter of 2021, subject to certain closing conditions, which include the requisite closing of the equity interest purchase of CityCenter, discussed above.

In May 2021, the Company entered into an agreement with MGP whereby MGP will acquire the real estate assets of MGM Springfield from the Company for $400 million of cash consideration. MGM Springfield will be added to the master lease between the Company and MGP. Following the closing of the transaction, the annual rent payment to MGP will increase by $30 million. The transaction is expected to close in the fourth quarter of 2021, upon receipt of interim regulatory approvals from the Massachusetts Gaming Commission and the satisfaction of other customary closing conditions.

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Adjusted Diluted Earnings Per Share

The following table reconciles diluted earnings (loss) per share (“EPS”) to Adjusted EPS (approximate EPS impact shown, per share; positive adjustments represent charges to income):

Three Months Ended June 30,		2021						2020 Advertisement
Diluted earnings (loss) per share		$	0.14					$	(1.67) Advertisement
Property transactions, net			(0.06)						0.05
October 1 litigation settlement			— Advertisement						0.10
Restructuring			—						0.04
Non-operating items: Advertisement
Gain related to equity instrument			(0.17)						—
Change in fair value of MGP swaps			0.01 Advertisement						—
Unconsolidated affiliate items:
Gain related to sale of Harmon land			(0.10)						— Advertisement
Income tax impact on net income adjustments (1)			0.05						(0.04)
Adjusted diluted loss per share		$ Advertisement	(0.13)					$	(1.52)

(1) Advertisement

The income tax impact includes current and deferred income tax expense based upon the nature of the adjustment and the jurisdiction in which it occurs.

Las Vegas Strip Resorts

Casino revenue was $353 million for the second quarter of 2021 compared to $63 million in the prior year quarter, an increase of 461%, due primarily to the impact of COVID-19 in the prior year period.

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

Three Months Ended June 30, Advertisement		2021			2020
		(Dollars in millions)
Table Games Drop		$ Advertisement	777		$	149
Table Games Win		$ Advertisement	173		$	48
Table Games Win %		22.3% Advertisement			32.5%
Slots Handle		$	3,641		$ Advertisement	524
Slots Win		$	351		$ Advertisement	49
Slots Win %		9.6%			9.3%

Rooms revenue was $299 million for the second quarter of 2021 compared to $26 million in the prior year quarter, an increase of 1,044% due primarily to an increase in REVPAR⁽⁴⁾ as a result of increased occupancy at our properties due to the easing of capacity restrictions and increased travel in the current quarter.

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

Three Months Ended June 30,		2021			2020
Occupancy %(1) Advertisement		77%			43%
Average Daily Rate (ADR)		$	149 Advertisement		$	154
Revenue per Available Room (REVPAR)(1)		$	115 Advertisement		$	66

(1)	Rooms that were out of service during the three months ended June 30, 2020 due to the COVID-19 pandemic were excluded from the available room count when calculating hotel occupancy and REVPAR. Advertisement

Regional Operations

Casino revenue was $708 million compared to $77 million in the prior year quarter, an increase of 817% due primarily to the impact of COVID-19 in the prior year period.

The following table shows key gaming statistics for Regional Operations:

Three Months Ended June 30,		2021 Advertisement			2020
		(Dollars in millions)
Table Games Drop		$	972 Advertisement		$	58
Table Games Win		$	203 Advertisement		$	13
Table Games Win %		20.9%			21.9% Advertisement
Slots Handle		$	6,514		$	485 Advertisement
Slots Win		$	622		$	48 Advertisement
Slots Win %		9.6%			10.0%

MGM China

Key second quarter results for MGM China include:

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• Net revenues of  $311 million, an increase of 836% compared to the prior year quarter and a decrease of 56% compared to the second quarter of 2019;
• Main floor table games win of $252 million compared to $12 million, an increase of 2,093% compared to the prior year quarter;
• VIP table games win of $71 million compared to $12 million, an increase of 505% compared to the prior year quarter; and
• Adjusted Property EBITDAR of $9 million compared to a loss of $116 million in the prior year quarter. License fee expense was $5 million in the current quarter and $1 million in the prior year quarter.

The following table shows key gaming statistics for MGM China:

Three Months Ended June 30,		2021			2020
		(Dollars in millions)
VIP Table Games Turnover Advertisement		$	2,590		$	450
VIP Table Games Win Advertisement		$	71		$	12
VIP Table Games Win % Advertisement		2.7%			2.6%
Main Floor Table Games Drop		$	1,258 Advertisement		$	66
Main floor Table Games Win		$	252 Advertisement		$	12
Main Floor Table Games Win %		20.1%			17.5% Advertisement

Corporate Expense

Corporate expense, including share-based compensation for corporate employees, decreased to $97 million in the second quarter of 2021, from $143 million in the prior year quarter. The current quarter included $6 million in transaction costs, while the prior year quarter included $49 million in October 1 litigation settlement expense, $5 million in restructuring costs, and $9 million in corporate initiative costs.

Unconsolidated Affiliates

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

Three Months Ended June 30, Advertisement		2021				2020
		(In thousands)
CityCenter		$ Advertisement	90,212			$	(39,113)
MGP BREIT Venture			38,954 Advertisement				38,861
BetMGM			(45,979)				(5,241)
Other Advertisement			151				(2,860)
		$	83,338			$ Advertisement	(8,353)

On June 8, 2021, CityCenter Holdings, LLC (“CityCenter”) closed the sale of its Harmon land for $80 million on which it recorded a $30 million gain. MGM Resorts recorded a $50 million gain, which included $15 million representing its 50% share of the gain recorded by CityCenter and $35 million representing the reversal of certain basis differences.

For the three months ended June 30, 2021, CityCenter’s net income was $79 million and Adjusted EBITDA⁽⁵⁾  was $120 million compared to net loss of  $112 million and Adjusted EBITDA loss of $37 million in the prior year quarter. While the current quarter benefited from the easing of operational and capacity restrictions and an increase in travel, the prior year quarter was negatively affected by temporary property closures.

MGM Growth Properties

During the second quarter of 2021, the Company made rent payments to MGM Growth Properties Operating Partnership LP (“MGP Operating Partnership”) in the amount of $211 million and received distributions of $55 million from the MGP Operating Partnership. In June 2021, the Board of Directors of MGM Growth Properties LLC (“MGP”) approved a quarterly dividend of $0.5150 per Class A share which represents a dividend of $2.06 per share on an annualized basis totaling $81 million, which was paid on July 15, 2021 to holders of record on June 30, 2021. The Company concurrently received a $57 million distribution attributable to its ownership of MGP Operating Partnership units.

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MGM Resorts Dividend and Share Repurchases

On August 4, 2021, the Company’s Board of Directors approved a quarterly dividend of $0.0025 per share. The dividend will be payable on September 15, 2021 to holders of record on September 10, 2021.

During the second quarter of 2021, the Company repurchased approximately 5.6 million shares of its common stock at an average price of $39.48 per share for an aggregate amount of $220 million, pursuant to the February 2020 $3.0 billion stock repurchase plan. The remaining availability under the February 2020 $3.0 billion stock repurchase program was $2.7 billion as of June 30, 2021. All shares repurchased under the Company’s program have been retired.