Condensed Consolidating Financial Information | NOTE 12 — CONDENSED CONSOLIDATING FINANCIAL INFORMATION As of March 31, 2017, 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, 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 consolidating financial information for the subsidiary guarantors and non-guarantors as of March 31, 2017 and December 31, 2016, and for the three months ended March 31, 2017 and 2016 are presented below. Within the Condensed Consolidating Statements of Cash Flows for the three months ended March 31, 2017 and 2016, 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 collectively own 76.3% of the Operating Partnership units as of March 31, 2017, and each subsidiary accounts for its respective investment under the equity method within the condensed consolidating financial information presented below. For 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, 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. CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION At March 31, 2017 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Current assets $ 80,646 $ 953,785 $ 370,717 $ 770,014 $ (2,444 ) $ 2,172,718 Property and equipment, net — 13,525,048 9,019,620 5,106,590 (9,031,592 ) 18,619,666 Investments in subsidiaries 20,161,450 3,354,103 — — (23,515,553 ) — Investments in MGP Operating Partnership — 3,529,177 — 631,867 (4,161,044 ) — Investments in and advances to unconsolidated affiliates — 1,221,579 — 5,853 25,000 1,252,432 Intercompany accounts — 5,017,773 — — (5,017,773 ) — Other non-current assets 50,677 931,390 59,115 5,265,278 (48,184 ) 6,258,276 $ 20,292,773 $ 28,532,855 $ 9,449,452 $ 11,779,602 $ (41,751,590 ) $ 28,303,092 Current liabilities $ 180,593 $ 1,153,934 $ 124,431 $ 831,958 $ (166,152 ) $ 2,124,764 Intercompany accounts 4,442,724 — 816 574,233 (5,017,773 ) — Deferred income taxes, net 2,191,758 — 25,368 349,988 (25,368 ) 2,541,746 Long-term debt 7,070,275 2,835 3,606,973 2,419,107 — 13,099,190 Other long-term obligations 30,928 7,363,077 129,827 1,051,706 (8,234,632 ) 340,906 Total liabilities 13,916,278 8,519,846 3,887,415 5,226,992 (13,443,925 ) 18,106,606 Redeemable noncontrolling interest — — — 55,769 — 55,769 MGM Resorts International stockholders' equity 6,376,495 20,013,009 4,239,164 4,055,492 (28,307,665 ) 6,376,495 Noncontrolling interests — — 1,322,873 2,441,349 — 3,764,222 Total stockholders' equity 6,376,495 20,013,009 5,562,037 6,496,841 (28,307,665 ) 10,140,717 $ 20,292,773 $ 28,532,855 $ 9,449,452 $ 11,779,602 $ (41,751,590 ) $ 28,303,092 At December 31, 2016 Guarantor Non-Guarantor Subsidiaries Parent 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 interest — — — 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 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) INFORMATION Three Months Ended March 31, 2017 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 1,889,279 $ 183,899 $ 819,815 $ (184,814 ) $ 2,708,179 Equity in subsidiaries' earnings 402,740 52,942 — — (455,682 ) — Expenses Casino and hotel operations 2,509 1,015,519 — 505,048 (914 ) 1,522,162 General and administrative 1,982 298,248 20,487 88,605 (20,487 ) 388,835 Corporate expense 23,393 47,292 2,851 (192 ) (171 ) 73,173 Preopening and start-up expenses — 644 — 14,422 — 15,066 Property transactions, net — 1,547 6,855 149 (6,855 ) 1,696 Depreciation and amortization — 162,699 61,684 87,070 (61,684 ) 249,769 27,884 1,525,949 91,877 695,102 (90,111 ) 2,250,701 Income (loss) from unconsolidated affiliates — 39,784 — (81 ) — 39,703 Operating income (loss) 374,856 456,056 92,022 124,632 (550,385 ) 497,181 Interest expense, net of amounts capitalized (123,356 ) (458 ) (44,636 ) (5,609 ) — (174,059 ) Other, net 14,086 (108,494 ) 544 (29,597 ) 115,723 (7,738 ) Income (loss) before income taxes 265,586 347,104 47,930 89,426 (434,662 ) 315,384 Provision for income taxes (58,739 ) — (1,238 ) (2,398 ) — (62,375 ) Net income (loss) 206,847 347,104 46,692 87,028 (434,662 ) 253,009 Less: Net income attributable to noncontrolling interests — — (11,348 ) (34,814 ) — (46,162 ) Net income (loss) attributable to MGM Resorts International $ 206,847 $ 347,104 $ 35,344 $ 52,214 $ (434,662 ) $ 206,847 Net income (loss) $ 206,847 $ 347,104 $ 46,692 $ 87,028 $ (434,662 ) $ 253,009 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (7,352 ) (7,352 ) — (12,933 ) 14,704 (12,933 ) Unrealized gain (loss) on cash flow hedges (484 ) — (634 ) — 484 (634 ) Other comprehensive income (loss) (7,836 ) (7,352 ) (634 ) (12,933 ) 15,188 (13,567 ) Comprehensive income (loss) 199,011 339,752 46,058 74,095 (419,474 ) 239,442 Less: Comprehensive income attributable to noncontrolling interests — — (11,198 ) (29,233 ) — (40,431 ) Comprehensive income (loss) attributable to MGM Resorts International $ 199,011 $ 339,752 $ 34,860 $ 44,862 $ (419,474 ) $ 199,011 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION Three Months Ended March 31, 2017 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Cash flows from operating activities Net cash provided by (used in) operating activities $ (172,712 ) $ 227,779 $ 119,191 $ 231,177 $ — $ 405,435 Cash flows from investing activities Capital expenditures, net of construction payable — (79,464 ) — (376,611 ) — (456,075 ) Dispositions of property and equipment — 89 — 91 — 180 Investments in and advances to unconsolidated affiliates — (3,500 ) — — — (3,500 ) Intercompany accounts — (221,059 ) — — 221,059 — Other — (3,710 ) — (2,844 ) — (6,554 ) Net cash provided by (used in) investing activities — (307,644 ) — (379,364 ) 221,059 (465,949 ) Cash flows from financing activities Net borrowings (repayments) under bank credit facilities - maturities of 90 days or less 46,875 — (16,750 ) 77,355 — 107,480 Dividends paid (63,182 ) — — — — (63,182 ) Debt issuance costs — — (526 ) (4,379 ) — (4,905 ) MGP Operating Partnership distributions paid to consolidated subsidiaries — — (71,827 ) — 71,827 — Distributions to noncontrolling interest owners — — (22,282 ) (2,561 ) — (24,843 ) Intercompany accounts 165,879 59,310 — 67,697 (292,886 ) — Other (4,077 ) — — (7 ) — (4,084 ) Net cash provided by (used in) financing activities 145,495 59,310 (111,385 ) 138,105 (221,059 ) 10,466 Effect of exchange rate on cash — — — (1,089 ) — (1,089 ) Cash and cash equivalents Net increase (decrease) for the period (27,217 ) (20,555 ) 7,806 (11,171 ) — (51,137 ) Balance, beginning of period 99,995 307,713 360,492 678,381 — 1,446,581 Balance, end of period $ 72,778 $ 287,158 $ 368,298 $ 667,210 $ — $ 1,395,444 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) INFORMATION Three Months Ended March 31, 2016 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 1,600,525 $ — $ 610,009 $ (848 ) $ 2,209,686 Equity in subsidiaries' earnings 286,193 41,311 — — (327,504 ) — Expenses Casino and hotel operations 2,122 904,060 — 396,379 (848 ) 1,301,713 General and administrative 1,613 241,843 15,620 49,467 — 308,543 Corporate expense 34,556 36,543 — 149 — 71,248 Preopening and start-up expenses — 3,446 — 18,514 — 21,960 Property transactions, net — 4,267 874 (10 ) — 5,131 Depreciation and amortization — 85,405 51,476 62,958 — 199,839 38,291 1,275,564 67,970 527,457 (848 ) 1,908,434 Income (loss) from unconsolidated affiliates — 14,790 — (88 ) — 14,702 Operating income (loss) 247,902 381,062 (67,970 ) 82,464 (327,504 ) 315,954 Interest expense, net of amounts capitalized (175,694 ) (195 ) — (8,780 ) — (184,669 ) Other, net 13,874 (19,536 ) — (13,115 ) — (18,777 ) Income (loss) before income taxes 86,082 361,331 (67,970 ) 60,569 (327,504 ) 112,508 Benefit (provision) for income taxes (19,283 ) (3,719 ) — 1,692 — (21,310 ) Net income (loss) 66,799 357,612 (67,970 ) 62,261 (327,504 ) 91,198 Less: Net income attributable to noncontrolling interests — — — (24,399 ) — (24,399 ) Net income (loss) attributable to MGM Resorts International $ 66,799 $ 357,612 $ (67,970 ) $ 37,862 $ (327,504 ) $ 66,799 Net income (loss) $ 66,799 $ 357,612 $ (67,970 ) $ 62,261 $ (327,504 ) $ 91,198 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (2,400 ) (2,400 ) — (4,765 ) 4,800 (4,765 ) Other comprehensive income (loss) (2,400 ) (2,400 ) — (4,765 ) 4,800 (4,765 ) Comprehensive income (loss) 64,399 355,212 (67,970 ) 57,496 (322,704 ) 86,433 Less: Comprehensive income attributable to noncontrolling interests — — — (22,034 ) — (22,034 ) Comprehensive income (loss) attributable to MGM Resorts International $ 64,399 $ 355,212 $ (67,970 ) $ 35,462 $ (322,704 ) $ 64,399 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION Three Months Ended March 31, 2016 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Cash flows from operating activities Net cash provided by (used in) operating activities $ (206,511 ) $ 314,090 $ (15,620 ) $ 132,637 $ — $ 224,596 Cash flows from investing activities Capital expenditures, net of construction payable — 32,701 (111,241 ) (348,959 ) — (427,499 ) Dispositions of property and equipment — 89 — 138 — 227 Investments in and advances to unconsolidated affiliates — (1,555 ) — — — (1,555 ) Distributions from unconsolidated affiliates in excess of cumulative earnings — 1,629 — — — 1,629 Intercompany accounts — (266,482 ) — — 266,482 — Other — (1,988 ) — (838 ) — (2,826 ) Net cash provided by (used in) investing activities — (235,606 ) (111,241 ) (349,659 ) 266,482 (430,024 ) Cash flows from financing activities Net borrowings (repayments) under bank credit facilities - maturities of 90 days or less (7,000 ) — — 250,000 — 243,000 Retirement of senior notes — (2,661 ) — — — (2,661 ) Debt issuance costs (27 ) — — (32,550 ) — (32,577 ) Intercompany accounts 199,554 (123,101 ) 126,861 63,168 (266,482 ) — Distributions to noncontrolling interest owners — — — (2,267 ) — (2,267 ) Other (1,414 ) 2,073 — (5,192 ) — (4,533 ) Net cash provided by (used in) financing activities 191,113 (123,689 ) 126,861 273,159 (266,482 ) 200,962 Effect of exchange rate on cash — — — (941 ) — (941 ) Cash and cash equivalents Net increase (decrease) for the period (15,398 ) (45,205 ) — 55,196 — (5,407 ) Balance, beginning of period 538,856 304,168 — 827,288 — 1,670,312 Balance, end of period $ 523,458 $ 258,963 $ — $ 882,484 $ — $ 1,664,905 |