MGM Resorts International | August 06, 2021

LAS VEGAS – August 6, 2021 – MGM Resorts International (“MGM Resorts” or the “Company”) today 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.”

 

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.

 

View full results here.