Consolidating Condensed Financial Information | NOTE 20 — CONSOLIDATING CONDENSED FINANCIAL INFORMATION As of December 31, 2016, all of the Company’s principal debt arrangements are guaranteed by each of its material domestic subsidiaries, other than MGP and the Operating Partnership, MGM Grand Detroit, LLC, MGM National Harbor, LLC and Blue Tarp reDevelopment, LLC (the company that will own and operate the Company’s proposed casino in Springfield, Massachusetts), and each of their respective subsidiaries. The Company’s international subsidiaries, including MGM China and its subsidiaries, are not guarantors of such indebtedness. Separate condensed financial statement information for the subsidiary guarantors and non-guarantors as of December 31, 2016 and 2015 and for the years ended December 31, 2016, 2015 and 2014, are presented below. Within the Condensed Consolidating Statements of Cash Flows for the periods ending December 31, 2016 and 2015, the Company has presented net changes in intercompany accounts as investing activities if the applicable entities have a net asset in intercompany accounts and as a financing activity if the applicable entities have a net intercompany liability balance. Certain of the Company’s subsidiaries (“OPCOs”) collectively own 76.3% of the Operating Partnership units as of December 31, 2016, and each subsidiary accounts for its respective investment under the equity method within the condensed consolidating financial information presented below. At these subsidiaries, such investment constitutes continuing involvement, and accordingly, the contribution and leaseback of the real estate assets do not qualify for sale-leaseback accounting. The real estate assets that were contributed to and owned by the Operating Partnership in connection with the IPO, along with the related transactions, are reflected in the balance sheets of the MGM subsidiaries that contributed such assets. In addition, such subsidiaries recognized finance liabilities within “Other long-term obligations” related to rent payments due under the Master Lease and recognized the related interest expense component of such payments. These real estate assets are also reflected on the balance sheet of the MGP subsidiary that received such assets in connection with the contribution. The condensed consolidating financial information presented below therefore includes the accounting for such activity within the respective columns presented and in the elimination column. For all periods prior to the commencement of the Master Lease arrangement, the condensed consolidating financial information set forth herein has been retrospectively adjusted to conform prior periods to the current presentation, as the transactions occurred between entities, which are considered businesses under common control. Accordingly, the real estate assets and associated operations in all periods prior to the IPO date were reclassified to conform to the current organizational structure, and are reflected in the MGP subsidiary that currently has legal title to such assets. CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION December 31, 2016 Non-Guarantor Subsidiaries Parent Guarantor Subsidiaries MGP Other Elimination Consolidated (In thousands) Current assets $ 103,934 $ 981,705 $ 368,622 $ 783,920 $ (8,594 ) $ 2,229,587 Property and equipment, net — 13,599,127 9,079,678 4,837,868 (9,091,650 ) 18,425,023 Investments in subsidiaries 18,907,988 3,338,752 — — (22,246,740 ) — Investments in the MGP Operating Partnership — 3,553,840 — 636,268 (4,190,108 ) — Investments in and advances to unconsolidated affiliates — 1,189,590 — 5,853 25,000 1,220,443 Intercompany accounts — 4,796,713 — — (4,796,713 ) — Other non-current assets 50,741 934,836 58,440 5,302,132 (47,901 ) 6,298,248 $ 19,062,663 $ 28,394,563 $ 9,506,740 $ 11,566,041 $ (40,356,706 ) $ 28,173,301 Current liabilities $ 184,281 $ 1,301,423 $ 139,099 $ 837,844 $ (169,226 ) $ 2,293,421 Intercompany accounts 3,406,699 — 166 1,389,848 (4,796,713 ) — Deferred income taxes, net 2,202,809 — 25,368 348,419 (25,368 ) 2,551,228 Long-term debt 7,019,745 2,835 3,613,567 2,343,073 — 12,979,220 Other long-term obligations 28,949 7,360,887 120,279 1,051,754 (8,235,888 ) 325,981 Total liabilities 12,842,483 8,665,145 3,898,479 5,970,938 (13,227,195 ) 18,149,850 Redeemable noncontrolling interests — — — 54,139 — 54,139 MGM Resorts International stockholders' equity 6,220,180 19,729,418 4,274,444 3,125,649 (27,129,511 ) 6,220,180 Noncontrolling interests — — 1,333,817 2,415,315 — 3,749,132 Total stockholders' equity 6,220,180 19,729,418 5,608,261 5,540,964 (27,129,511 ) 9,969,312 $ 19,062,663 $ 28,394,563 $ 9,506,740 $ 11,566,041 $ (40,356,706 ) $ 28,173,301 December 31, 2015 Non-Guarantor Subsidiaries Parent Guarantor Subsidiaries MGP Other Elimination Consolidated (In thousands) Current assets $ 561,310 $ 932,374 $ — $ 915,979 $ (914 ) $ 2,408,749 Property and equipment, net — 5,089,726 7,793,639 2,500,401 (11,971 ) 15,371,795 Investments in subsidiaries 18,491,578 2,956,404 — — (21,447,982 ) — Investments in and advances to unconsolidated affiliates — 1,460,084 — 6,413 25,000 1,491,497 Intercompany accounts — 3,234,271 — — (3,234,271 ) — Other non-current assets 38,577 444,333 — 5,460,227 — 5,943,137 $ 19,091,465 $ 14,117,192 $ 7,793,639 $ 8,883,020 $ (24,670,138 ) $ 25,215,178 Current liabilities $ 536,165 $ 994,570 $ — $ 708,130 $ (914 ) $ 2,237,951 Intercompany accounts 2,390,461 — — 843,810 (3,234,271 ) — Deferred income taxes, net 631,763 — 1,734,680 314,133 — 2,680,576 Long-term debt 10,393,197 4,837 — 1,970,277 — 12,368,311 Other long-term obligations 19,952 67,212 — 70,499 — 157,663 Total liabilities 13,971,538 1,066,619 1,734,680 3,906,849 (3,235,185 ) 17,444,501 Redeemable noncontrolling interests — — — 6,250 — 6,250 MGM Resorts International stockholders' equity 5,119,927 13,050,573 6,058,959 2,325,421 (21,434,953 ) 5,119,927 Noncontrolling interests — — — 2,644,500 — 2,644,500 Total stockholders' equity 5,119,927 13,050,573 6,058,959 4,969,921 (21,434,953 ) 7,764,427 $ 19,091,465 $ 14,117,192 $ 7,793,639 $ 8,883,020 $ (24,670,138 ) $ 25,215,178 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION Year Ended December 31, 2016 Non-Guarantor Subsidiaries Parent Guarantor Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 6,918,748 $ 467,548 $ 2,539,794 $ (470,967 ) $ 9,455,123 Equity in subsidiaries' earnings 1,780,707 175,729 — — (1,956,436 ) — Expenses Casino and hotel operations 9,063 3,894,478 — 1,595,542 (3,419 ) 5,495,664 General and administrative 6,834 1,137,110 68,063 214,839 (48,229 ) 1,378,617 Corporate expense 131,938 160,956 20,360 (194 ) (286 ) 312,774 NV Energy exit expense — 139,335 — — — 139,335 Preopening and start-up expenses — 8,775 — 131,300 — 140,075 Property transactions, net — 16,449 4,684 (246 ) (3,809 ) 17,078 Gain on Borgata transaction — (430,118 ) — — — (430,118 ) Depreciation and amortization — 524,123 220,667 261,730 (156,993 ) 849,527 147,835 5,451,108 313,774 2,202,971 (212,736 ) 7,902,952 Income (loss) from unconsolidated affiliates — 527,934 — (318 ) — 527,616 Operating income (loss) 1,632,872 2,171,303 153,774 336,505 (2,214,667 ) 2,079,787 Interest expense, net of amounts capitalized (562,536 ) (1,500 ) (115,438 ) (15,299 ) — (694,773 ) Other, net (7,864 ) (324,141 ) (726 ) (93,145 ) 300,039 (125,837 ) Income (loss) before income taxes 1,062,472 1,845,662 37,610 228,061 (1,914,628 ) 1,259,177 Benefit (provision) for income taxes 38,968 (22,579 ) (2,264 ) (36,424 ) — (22,299 ) Net income (loss) 1,101,440 1,823,083 35,346 191,637 (1,914,628 ) 1,236,878 Less: Net income attributable to noncontrolling interests — — (29,938 ) (105,500 ) — (135,438 ) Net income (loss) attributable to MGM Resorts International $ 1,101,440 $ 1,823,083 $ 5,408 $ 86,137 $ (1,914,628 ) $ 1,101,440 Net income (loss) $ 1,101,440 $ 1,823,083 $ 35,346 $ 191,637 $ (1,914,628 ) $ 1,236,878 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (1,477 ) (1,477 ) — (2,680 ) 2,954 (2,680 ) Unrealized gain (loss) on cash flow hedges 1,434 — 1,879 — (1,434 ) 1,879 Other comprehensive income (loss) (43 ) (1,477 ) 1,879 (2,680 ) 1,520 (801 ) Comprehensive income (loss) 1,101,397 1,821,606 37,225 188,957 (1,913,108 ) 1,236,077 Less: Comprehensive income attributable to noncontrolling interests — — (30,383 ) (104,297 ) — (134,680 ) Comprehensive income (loss) attributable to MGM Resorts International $ 1,101,397 $ 1,821,606 $ 6,842 $ 84,660 $ (1,913,108 ) $ 1,101,397 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION Year Ended December 31, 2016 Non-Guarantor Subsidiaries Parent Guarantor Subsidiaries MGP Other Elimination Consolidated (In thousands) Cash flows from operating activities Net cash provided by (used in) operating activities $ (603,136 ) $ 1,312,165 $ 297,781 $ 527,162 $ — $ 1,533,972 Cash flows from investing activities Capital expenditures, net of construction payable — (290,455 ) (138,987 ) (1,833,031 ) — (2,262,473 ) Dispositions of property and equipment — 1,940 — 2,004 — 3,944 Proceeds from partial disposition of investment in unconsolidated affiliates — 15,000 — — — 15,000 Acquisition of Borgata, net of cash acquired — (559,443 ) — — — (559,443 ) Investments in and advances to unconsolidated affiliates — (3,633 ) — — — (3,633 ) Distributions from unconsolidated affiliates in excess of cumulative earnings — 542,097 — — — 542,097 Intercompany accounts — (1,562,442 ) — — 1,562,442 — Other — (7,651 ) — (4,045 ) — (11,696 ) Net cash provided by (used in) investing activities — (1,864,587 ) (138,987 ) (1,835,072 ) 1,562,442 (2,276,204 ) Cash flows from financing activities Net borrowings (repayments) under bank credit facilities - maturities of 90 days or less (2,016,000 ) 4,094,850 (2,411,600 ) 823,782 — 491,032 Borrowings under bank credit facilities - maturities longer than 90 days 1,845,375 — — — — 1,845,375 Repayments under bank credit facilities - maturities longer than 90 days (1,845,375 ) — — — — (1,845,375 ) Issuance of long-term debt 500,000 — 1,550,000 — — 2,050,000 Retirement of senior notes (2,255,392 ) (2,661 ) — — — (2,258,053 ) Repayment of Borgata credit facility — (583,598 ) — — — (583,598 ) Debt issuance costs (29,871 ) — (77,163 ) (32,550 ) — (139,584 ) Issuance of MGM Growth Properties common stock in public offering — — 1,207,500 — — 1,207,500 MGM Growth Properties Class A share issuance costs — — (75,032 ) — — (75,032 ) Acquisition of MGM China shares (100,000 ) — — — — (100,000 ) MGP dividends paid to consolidated subsidiaries — — (113,414 ) — 113,414 — Distributions to noncontrolling interest owners — — (37,415 ) (65,952 ) — (103,367 ) Excess tax benefit from exercise of stock options 13,277 — — — — 13,277 Intercompany accounts 4,082,303 (2,952,624 ) 158,822 387,355 (1,675,856 ) — Proceeds from issuance of redeemable noncontrolling interests — — — 47,325 — 47,325 Other (30,042 ) — — (36 ) — (30,078 ) Net cash provided by (used in) financing activities 164,275 555,967 201,698 1,159,924 (1,562,442 ) 519,422 Effect of exchange rate on cash — — — (921 ) — (921 ) Cash and cash equivalents Net increase (decrease) for the period (438,861 ) 3,545 360,492 (148,907 ) — (223,731 ) Balance, beginning of period 538,856 304,168 — 827,288 — 1,670,312 Balance, end of period $ 99,995 $ 307,713 $ 360,492 $ 678,381 $ — $ 1,446,581 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION Year Ended December 31, 2015 Non-Guarantor Subsidiaries Parent Guarantor Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 6,429,103 $ — $ 2,763,862 $ (2,897 ) $ 9,190,068 Equity in subsidiaries' earnings 376,074 (566,270 ) — — 190,196 — Expenses Casino and hotel operations 6,717 3,807,569 — 1,813,987 (2,897 ) 5,625,376 General and administrative 4,959 1,038,053 58,473 207,619 — 1,309,104 Corporate expense 120,615 154,424 — (488 ) — 274,551 Preopening and start-up expenses — 4,973 — 66,354 — 71,327 Property transactions, net — 24,688 6,665 1,472,589 — 1,503,942 Depreciation and amortization — 348,159 196,816 274,908 — 819,883 132,291 5,377,866 261,954 3,834,969 (2,897 ) 9,604,183 Income (loss) from unconsolidated affiliates — 259,002 — (1,119 ) — 257,883 Operating income (loss) 243,783 743,969 (261,954 ) (1,072,226 ) 190,196 (156,232 ) Interest expense, net of amounts capitalized (762,529 ) (1,057 ) — (33,993 ) — (797,579 ) Other, net 49,497 (84,958 ) — (56,971 ) — (92,432 ) Income (loss) before income taxes (469,249 ) 657,954 (261,954 ) (1,163,190 ) 190,196 (1,046,243 ) Benefit (provision) for income taxes 21,529 (7,125 ) — (7,810 ) — 6,594 Net income (loss) (447,720 ) 650,829 (261,954 ) (1,171,000 ) 190,196 (1,039,649 ) Less: Net loss attributable to noncontrolling interests — — — 591,929 — 591,929 Net income (loss) attributable to MGM Resorts International $ (447,720 ) $ 650,829 $ (261,954 ) $ (579,071 ) $ 190,196 $ (447,720 ) Net income (loss) $ (447,720 ) $ 650,829 $ (261,954 ) $ (1,171,000 ) $ 190,196 $ (1,039,649 ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustment 1,703 1,703 — 3,727 (3,406 ) 3,727 Other (672 ) (672 ) — — 672 (672 ) Other comprehensive income (loss) 1,031 1,031 — 3,727 (2,734 ) 3,055 Comprehensive income (loss) (446,689 ) 651,860 (261,954 ) (1,167,273 ) 187,462 (1,036,594 ) Less: Comprehensive loss attributable to noncontrolling interests — — — 589,905 — 589,905 Comprehensive income (loss) attributable to MGM Resorts International $ (446,689 ) $ 651,860 $ (261,954 ) $ (577,368 ) $ 187,462 $ (446,689 ) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION Year Ended December 31, 2015 Non-Guarantor Subsidiaries Parent Guarantor Subsidiaries MGP Other Elimination Consolidated (In thousands) Cash flows from operating activities Net cash provided by (used in) operating activities $ (776,996 ) $ 1,375,703 $ (58,473 ) $ 464,845 $ — $ 1,005,079 Cash flows from investing activities Capital expenditures, net of construction payable — (353,245 ) (129,308 ) (984,266 ) — (1,466,819 ) Dispositions of property and equipment — 7,901 — 131 — 8,032 Proceeds from sale of business units and investment in unconsolidated affiliates — 92,207 — — — 92,207 Investments in and advances to unconsolidated affiliates (141,390 ) (54,672 ) — — — (196,062 ) Distributions from unconsolidated affiliates in excess of cumulative earnings — 201,612 — — — 201,612 Investments in cash deposits - maturities longer than 90 days (200,205 ) — — — — (200,205 ) Proceeds from cash deposits - maturities longer than 90 days 770,205 — — — — 770,205 Intercompany accounts — (1,059,181 ) — — 1,059,181 — Other — (7,516 ) — 3,488 — (4,028 ) Net cash provided by (used in) investing activities 428,610 (1,172,894 ) (129,308 ) (980,647 ) 1,059,181 (795,058 ) Cash flows from financing activities Net borrowings (repayments) under bank credit facilities - maturities of 90 days or less (28,000 ) — — 1,005,275 — 977,275 Borrowings under bank credit facilities - maturities longer than 90 days 3,768,750 — — 1,350,000 — 5,118,750 Repayments under bank credit facilities - maturities longer than 90 days (3,768,750 ) — — (1,350,000 ) — (5,118,750 ) Retirement of senior notes (875,504 ) — — — — (875,504 ) Debt issuance costs — — — (46,170 ) — (46,170 ) Intercompany accounts 1,003,750 (157,958 ) 187,781 25,608 (1,059,181 ) — Distributions to noncontrolling interest owners — — — (307,227 ) — (307,227 ) Excess tax benefits from exercise of stock options 12,369 — — — — 12,369 Proceeds from issuance of redeemable noncontrolling interests — — — 6,250 — 6,250 Other (24,881 ) — — 9 — (24,872 ) Net cash provided by (used in) financing activities 87,734 (157,958 ) 187,781 683,745 (1,059,181 ) (257,879 ) Effect of exchange rate on cash — — — 793 — 793 Cash and cash equivalents Net increase (decrease) for the period (260,652 ) 44,851 — 168,736 — (47,065 ) Change in cash related to assets held for sale — 3,662 — — — 3,662 Balance, beginning of period 799,508 255,655 — 658,552 — 1,713,715 Balance, end of period $ 538,856 $ 304,168 $ — $ 827,288 $ — $ 1,670,312 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME INFORMATION Year Ended December 31, 2014 Non-Guarantor Subsidiaries Parent Guarantor Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 6,270,708 $ — $ 3,813,736 $ (2,460 ) $ 10,081,984 Equity in subsidiaries' earnings 938,712 339,312 — — (1,278,024 ) — Expenses Casino and hotel operations 5,482 3,810,711 — 2,554,965 (2,460 ) 6,368,698 General and administrative 4,743 1,046,803 59,980 207,223 — 1,318,749 Corporate expense 72,116 150,938 — 15,757 — 238,811 Preopening and start-up expenses — 5,384 — 33,873 — 39,257 Property transactions, net — 36,612 — 4,390 — 41,002 Depreciation and amortization — 329,589 186,262 299,914 — 815,765 82,341 5,380,037 246,242 3,116,122 (2,460 ) 8,822,282 Income (loss) from unconsolidated affiliates — 64,014 — (178 ) — 63,836 Operating income (loss) 856,371 1,293,997 (246,242 ) 697,436 (1,278,024 ) 1,323,538 Interest expense, net of amounts capitalized (794,826 ) (574 ) — (21,661 ) — (817,061 ) Other, net 50,793 (90,679 ) — (55,705 ) — (95,591 ) Income (loss) before income taxes 112,338 1,202,744 (246,242 ) 620,070 (1,278,024 ) 410,886 Provision for income taxes (262,211 ) (20,735 ) — (762 ) — (283,708 ) Net income (loss) (149,873 ) 1,182,009 (246,242 ) 619,308 (1,278,024 ) 127,178 Less: Net income attributable to noncontrolling interests — — — (277,051 ) — (277,051 ) Net income (loss) attributable to MGM Resorts International $ (149,873 ) $ 1,182,009 $ (246,242 ) $ 342,257 $ (1,278,024 ) $ (149,873 ) Net income (loss) $ (149,873 ) $ 1,182,009 $ (246,242 ) $ 619,308 $ (1,278,024 ) $ 127,178 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (762 ) (762 ) — (1,293 ) 1,524 (1,293 ) Other 1,250 1,250 — — (1,250 ) 1,250 Other comprehensive income (loss) 488 488 — (1,293 ) 274 (43 ) Comprehensive income (loss) (149,385 ) 1,182,497 (246,242 ) 618,015 (1,277,750 ) 127,135 Less: Comprehensive income attributable to noncontrolling interests — — — (276,520 ) — (276,520 ) Comprehensive income (loss) attributable to MGM Resorts International $ (149,385 ) $ 1,182,497 $ (246,242 ) $ 341,495 $ (1,277,750 ) $ (149,385 ) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION Year Ended December 31, 2014 Non-Guarantor Subsidiaries Parent Guarantor Subsidiaries MGP Other Elimination Consolidated (In thousands) Cash flows from operating activities Net cash provided by (used in) operating activities $ (718,756 ) $ 1,163,402 $ (59,980 ) $ 721,004 $ 25,000 $ 1,130,670 Cash flows from investing activities Capital expenditures, net of construction payable — (289,431 ) (90,504 ) (492,106 ) — (872,041 ) Dispositions of property and equipment — 6,631 — 1,020 — 7,651 Investments in and advances to unconsolidated affiliates (31,400 ) (46,640 ) — — (25,000 ) (103,040 ) Distributions from unconsolidated affiliates in excess of cumulative earnings — 132 — — — 132 Investments in treasury securities - maturities longer than 90 days — (123,133 ) — — — (123,133 ) Proceeds from treasury securities - maturities longer than 90 days — 210,300 — — — 210,300 Investments in cash deposits - original maturities longer than 90 days (570,000 ) — — — — (570,000 ) Intercompany accounts — (704,785 ) — — 704,785 — Payments for gaming licenses — — — (85,000 ) — (85,000 ) Other — 10,981 — — — 10,981 Net cash provided by (used in) investing activities (601,400 ) (935,945 ) (90,504 ) (576,086 ) 679,785 (1,524,150 ) Cash flows from financing activities Net repayments under bank credit facilities - maturities of 90 days or less (28,000 ) — — — — (28,000 ) Borrowings under bank credit facilities - maturities longer than 90 days 3,821,250 — — 1,350,000 — 5,171,250 Repayments under bank credit facilities - maturities longer than 90 days (3,821,250 ) — — (1,350,000 ) — (5,171,250 ) Issuance of long-term debt 1,250,750 — — — — 1,250,750 Retirement of senior notes (508,900 ) — — — — (508,900 ) Debt issuance costs (13,681 ) — — — — (13,681 ) Intercompany accounts 1,045,048 (204,794 ) 150,484 (285,953 ) (704,785 ) — Distributions to noncontrolling interest owners — — — (386,709 ) — (386,709 ) Other (4,213 ) (803 ) — (367 ) — (5,383 ) Net cash provided by (used in) financing activities 1,741,004 (205,597 ) 150,484 (673,029 ) (704,785 ) 308,077 Effect of exchange rate on cash — — — (889 ) — (889 ) Cash and cash equivalents — Net increase (decrease) for the period 420,848 21,860 — (529,000 ) — (86,292 ) Change in cash related to assets held for sale — (3,662 ) — — — (3,662 ) Balance, beginning of period 378,660 237,457 — 1,187,552 — 1,803,669 Balance, end of period $ 799,508 $ 255,655 $ — $ 658,552 $ — $ 1,713,715 1 |