MGM Resorts International | November 04, 2021

LAS VEGAS – November 4, 2021 – MGM Resorts International (NYSE: MGM) (“MGM Resorts” or the “Company”) today reported financial results for the quarter ended September 30, 2021.

 

“We delivered another strong quarter led by our domestic operations resulting in new historical Adjusted Property EBITDAR records for our Las Vegas Strip and U.S. regional segments. These results demonstrate the continued robust demand for our gaming entertainment offerings across the U.S. and the effectiveness of our operating model,” said Bill Hornbuckle, Chief Executive Officer and President of MGM Resorts International. “The completion of our asset light strategy will allow us to simplify our corporate structure and bolster our liquidity. I am also excited about our long-term growth prospects, including: BetMGM, which continues to establish itself as a clear leader in U.S. sports betting and iGaming; our selection as Osaka’s partner to build and operate a large-scale integrated resort in Japan; and the announcement of our agreement to acquire the operations of The Cosmopolitan of Las Vegas. The Company remains focused on achieving our vision to be the world’s premier gaming entertainment company.”

 

“Our strong liquidity position, coupled with our confidence in the long-term recovery of our core business, has allowed us to continue to focus on maximizing long-term shareholder value. To that end, we continued to repurchase our stock in the third quarter, reaching over $1 billion of share repurchases since beginning the program this year,” said Jonathan Halkyard, Chief Financial Officer and Treasurer of MGM Resorts International. “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.”

 

Third Quarter 2021 Financial Highlights:

Consolidated Results

  • Consolidated net revenues of $2.7 billion, an increase of 140% compared to the prior year quarter. While the current quarter benefited from the removal of mandated operational and capacity restrictions as well as an increase in travel, the prior year quarter was negatively affected by temporary closures at certain properties and operational restrictions due to the COVID-19 pandemic;
  • Consolidated operating income was $1.9 billion compared to consolidated operating loss of $495 million in the prior year quarter;
  • Net income attributable to MGM Resorts of $1.4 billion compared to net loss attributable to MGM Resorts of $535 million in the prior year quarter;
  • Diluted earnings per share of $2.77 in the current quarter compared to diluted loss per share of $1.08 in the prior year quarter;
  • Adjusted diluted earnings per share (“Adjusted EPS”)(1) of $0.03 in the current quarter compared to an Adjusted EPS loss per share of $1.08 in the prior year quarter; and
  • Consolidated Adjusted EBITDAR(2) of $765 million in the current quarter.

 

Financial Position & Liquidity

  • Consolidated cash and cash equivalents balance as of September 30, 2021 was $5.6 billion, which included $320 million at the MGP Operating Partnership and $331 million at MGM China;
  • Total liquidity at September 30, 2021 was $9.8 billion, which included $1.7 billion at the MGP Operating Partnership and $1.7 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 September 30, 2021, principal amount of consolidated 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 $1.4 billion, an increase of 187% compared to the prior year quarter and a decrease of 8% compared to the third quarter of 2019. While the current quarter benefited from the removal of mandated operational and capacity restrictions as well as an increase in travel, the prior year quarter was negatively affected by temporary property closures at certain properties and operational restrictions;
  • Table Games Hold Adjusted Las Vegas Strip Resorts Net Revenues(3) of $1.4 billion, an increase of 178% compared to the prior year quarter and a decrease of 10% compared to the third quarter of 2019;
  • Adjusted Property EBITDAR(2) of $535 million compared to $15 million in the prior year quarter, and an increase of 21% compared to the third quarter of 2019;
  • Adjusted Property EBITDAR margin(2) of 38.7% in the current quarter, an increase of 943 basis points compared to the third quarter of 2019 due primarily to an increase in net revenues and realized benefits of the Company’s cost savings initiatives; and
  • Table Games Hold Adjusted Las Vegas Strip Resorts Adjusted Property EBITDAR(2) of $514 million compared to $21 million in the prior year quarter, and an increase of 17% compared to the third quarter of 2019.

 

Regional Operations

  • Net revenues of $925 million, an increase of 66% compared to the prior year quarter and a decrease of 1% compared to the third quarter of 2019. While the current quarter benefited from the removal of mandated operational and capacity restrictions as well as an increase in travel, the prior year quarter was negatively affected by temporary property closures at certain properties and operational restrictions;
  • Adjusted Property EBITDAR of $348 million, an increase of 139% compared to the prior year quarter, and an increase of 29% compared to the third quarter of 2019; and
  • Adjusted Property EBITDAR margin of 37.6% in the current quarter, an increase of 886 basis points compared to the third quarter of 2019 due primarily to an increase in revenues and realized benefits of the Company’s costs savings initiatives.

 

MGM China

  • Net revenues of $289 million, an increase of 517% compared to the prior year quarter and a decrease of 61% compared to the third 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 $272 million, an increase of 403% compared to the prior year quarter and a decrease of 61% compared to the third quarter of 2019;
  • Adjusted Property EBITDAR of $7 million compared to a loss of $96 million in the prior year quarter, and a decrease of 96% compared to the third quarter of 2019; and
  • VIP Table Games Hold Adjusted MGM China Adjusted Property EBITDAR(2) loss of $2 million compared to a loss of $93 million in the prior year quarter, and $170 million in the third quarter of 2019.

 

Recent Developments

On September 26, 2021, the Company entered into an agreement to acquire the operations of The Cosmopolitan of Las Vegas (“The Cosmopolitan”) for cash consideration of $1.625 billion, subject to customary working capital adjustments. Additionally, at closing, the Company will enter into a lease agreement for the real estate assets of The Cosmopolitan. The Cosmopolitan lease will have an initial term of 30 years with three subsequent ten-year renewal periods, exercisable at the Company’s option. The initial term of the lease provides for an initial annual cash rent of $200 million with a fixed 2% escalator for the first fifteen years, and thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year, subject to a cap of 3%. The transaction is expected to close in the first half of 2022, subject to regulatory approvals and other customary closing conditions.

 

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