Condensed Consolidating Financial Information | NOTE 12 — CONDENSED CONSOLIDATING FINANCIAL INFORMATION As of June 30, 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 June 30, 2017 and December 31, 2016, and for the three and six months ended June 30, 2017 and 2016 are presented below. Within the Condensed Consolidating Statements of Cash Flows for the six months ended June 30, 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 June 30, 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 June 30, 2017 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Current assets $ 507,444 $ 898,642 $ 381,556 $ 701,990 $ (4,501 ) $ 2,485,131 Property and equipment, net — 13,454,612 8,957,622 5,451,359 (8,966,681 ) 18,896,912 Investments in subsidiaries 20,434,429 3,311,187 — — (23,745,616 ) — Investments in MGP Operating Partnership — 3,494,306 — 625,876 (4,120,182 ) — Investments in and advances to unconsolidated affiliates — 949,906 — 5,979 25,000 980,885 Intercompany accounts — 5,681,914 — — (5,681,914 ) — Other non-current assets 50,184 919,706 53,645 5,202,011 (45,543 ) 6,180,003 $ 20,992,057 $ 28,710,273 $ 9,392,823 $ 11,987,215 $ (42,539,437 ) $ 28,542,931 Current liabilities $ 627,916 $ 1,189,813 $ 119,008 $ 915,913 $ (173,082 ) $ 2,679,568 Intercompany accounts 5,063,987 — 233 617,694 (5,681,914 ) — Deferred income taxes, net 2,208,622 — 25,368 351,505 (25,368 ) 2,560,127 Long-term debt, net 6,548,236 2,835 3,601,214 2,572,983 — 12,725,268 Other long-term obligations 31,888 7,299,191 139,656 1,048,723 (8,229,828 ) 289,630 Total liabilities 14,480,649 8,491,839 3,885,479 5,506,818 (14,110,192 ) 18,254,593 Redeemable noncontrolling interest — — — 57,341 — 57,341 MGM Resorts International stockholders' equity 6,511,408 20,218,434 4,194,568 4,016,243 (28,429,245 ) 6,511,408 Noncontrolling interests — — 1,312,776 2,406,813 — 3,719,589 Total stockholders' equity 6,511,408 20,218,434 5,507,344 6,423,056 (28,429,245 ) 10,230,997 $ 20,992,057 $ 28,710,273 $ 9,392,823 $ 11,987,215 $ (42,539,437 ) $ 28,542,931 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, net 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 June 30, 2017 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 1,873,063 $ 184,456 $ 769,609 $ (185,391 ) $ 2,641,737 Equity in subsidiaries' earnings 426,128 36,490 — — (462,618 ) — Expenses Casino and hotel operations 2,616 1,027,426 — 479,835 (935 ) 1,508,942 General and administrative 2,131 265,892 20,642 86,440 (20,642 ) 354,463 Corporate expense 31,488 45,307 2,833 (48 ) (172 ) 79,408 NV Energy exit expense — (40,629 ) — — — (40,629 ) Preopening and start-up expenses — 2,131 — 18,962 — 21,093 Property transactions, net — 13,060 10,587 3,097 (13,501 ) 13,243 Depreciation and amortization — 160,402 60,227 84,352 (60,227 ) 244,754 36,235 1,473,589 94,289 672,638 (95,477 ) 2,181,274 Income (loss) from unconsolidated affiliates — 40,596 — (13 ) — 40,583 Operating income (loss) 389,893 476,560 90,167 96,958 (552,532 ) 501,046 Interest expense, net of amounts capitalized (122,942 ) (176 ) (44,818 ) (6,122 ) — (174,058 ) Other, net 13,390 (119,693 ) (297 ) (27,858 ) 123,151 (11,307 ) Income (loss) before income taxes 280,341 356,691 45,052 62,978 (429,381 ) 315,681 Provision for income taxes (69,730 ) — (1,177 ) (3,154 ) — (74,061 ) Net income (loss) 210,611 356,691 43,875 59,824 (429,381 ) 241,620 Less: Net income attributable to noncontrolling interests — — (10,680 ) (20,329 ) — (31,009 ) Net income (loss) attributable to MGM Resorts International $ 210,611 $ 356,691 $ 33,195 $ 39,495 $ (429,381 ) $ 210,611 Net income (loss) $ 210,611 $ 356,691 $ 43,875 $ 59,824 $ (429,381 ) $ 241,620 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (14,018 ) (14,018 ) — (25,376 ) 28,036 (25,376 ) Unrealized gain (loss) on cash flow hedges (2,347 ) — (4,112 ) — 3,136 (3,323 ) Other comprehensive income (loss) (16,365 ) (14,018 ) (4,112 ) (25,376 ) 31,172 (28,699 ) Comprehensive income (loss) 194,246 342,673 39,763 34,448 (398,209 ) 212,921 Less: Comprehensive income attributable to noncontrolling interests — — (9,705 ) (8,970 ) — (18,675 ) Comprehensive income (loss) attributable to MGM Resorts International $ 194,246 $ 342,673 $ 30,058 $ 25,478 $ (398,209 ) $ 194,246 Six Months Ended June 30, 2017 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 3,762,342 $ 368,355 $ 1,589,424 $ (370,205 ) $ 5,349,916 Equity in subsidiaries' earnings 828,868 89,432 — — (918,300 ) — Expenses Casino and hotel operations 5,125 2,042,945 — 984,883 (1,849 ) 3,031,104 General and administrative 4,113 564,140 41,129 175,045 (41,129 ) 743,298 Corporate expense 54,881 92,599 5,684 (240 ) (343 ) 152,581 NV Energy exit expense — (40,629 ) — — — (40,629 ) Preopening and start-up expenses — 2,775 — 33,384 — 36,159 Property transactions, net — 14,607 17,442 3,246 (20,356 ) 14,939 Depreciation and amortization — 323,101 121,911 171,422 (121,911 ) 494,523 64,119 2,999,538 186,166 1,367,740 (185,588 ) 4,431,975 Income (loss) from unconsolidated affiliates — 80,380 — (94 ) — 80,286 Operating income (loss) 764,749 932,616 182,189 221,590 (1,102,917 ) 998,227 Interest expense, net of amounts capitalized (246,298 ) (634 ) (89,454 ) (11,731 ) — (348,117 ) Other, net 27,476 (228,187 ) 247 (57,455 ) 238,874 (19,045 ) Income (loss) before income taxes 545,927 703,795 92,982 152,404 (864,043 ) 631,065 Provision for income taxes (128,469 ) — (2,415 ) (5,552 ) — (136,436 ) Net income (loss) 417,458 703,795 90,567 146,852 (864,043 ) 494,629 Less: Net income attributable to noncontrolling interests — — (22,028 ) (55,143 ) — (77,171 ) Net income (loss) attributable to MGM Resorts International $ 417,458 $ 703,795 $ 68,539 $ 91,709 $ (864,043 ) $ 417,458 Net income (loss) $ 417,458 $ 703,795 $ 90,567 $ 146,852 $ (864,043 ) $ 494,629 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (21,370 ) (21,370 ) — (38,309 ) 42,740 (38,309 ) Unrealized gain (loss) on cash flow hedges (2,831 ) — (4,746 ) — 3,620 (3,957 ) Other comprehensive income (loss) (24,201 ) (21,370 ) (4,746 ) (38,309 ) 46,360 (42,266 ) Comprehensive income (loss) 393,257 682,425 85,821 108,543 (817,683 ) 452,363 Less: Comprehensive income attributable to noncontrolling interests — — (20,903 ) (38,203 ) — (59,106 ) Comprehensive income (loss) attributable to MGM Resorts International $ 393,257 $ 682,425 $ 64,918 $ 70,340 $ (817,683 ) $ 393,257 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION Six Months Ended June 30, 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 $ (384,587 ) $ 655,617 $ 230,718 $ 437,378 $ — $ 939,126 Cash flows from investing activities Capital expenditures, net of construction payable — (144,433 ) — (728,177 ) — (872,610 ) Dispositions of property and equipment — 174 — 119 — 293 Investments in and advances to unconsolidated affiliates — (4,773 ) — — — (4,773 ) Intercompany accounts — (885,200 ) — — 885,200 — Distributions from unconsolidated affiliates in excess of cumulative earnings — 300,000 — — — 300,000 Other — (6,560 ) — (9,128 ) — (15,688 ) Net cash provided by (used in) investing activities — (740,792 ) — (737,186 ) 885,200 (592,778 ) Cash flows from financing activities Net borrowings (repayments) under bank credit facilities - maturities of 90 days or less (6,250 ) — (25,125 ) 236,227 — 204,852 Dividends paid (126,429 ) — — — — (126,429 ) Debt issuance costs — — (1,024 ) (4,379 ) — (5,403 ) MGP Operating Partnership distributions paid to consolidated subsidiaries — — (143,655 ) — 143,655 — Distributions to noncontrolling interest owners — — (44,564 ) (45,308 ) — (89,872 ) Intercompany accounts 924,157 58,588 — 46,110 (1,028,855 ) — Other (11,702 ) — — (4,391 ) — (16,093 ) Net cash provided by (used in) financing activities 779,776 58,588 (214,368 ) 228,259 (885,200 ) (32,945 ) Effect of exchange rate on cash — — — (2,922 ) — (2,922 ) Cash and cash equivalents Net increase (decrease) for the period 395,189 (26,587 ) 16,350 (74,471 ) — 310,481 Balance, beginning of period 99,995 307,713 360,492 678,381 — 1,446,581 Balance, end of period $ 495,184 $ 281,126 $ 376,842 $ 603,910 $ — $ 1,757,062 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) INFORMATION Three Months Ended June 30, 2016 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 1,676,913 $ 110,903 $ 593,454 $ (111,768 ) $ 2,269,502 Equity in subsidiaries' earnings 693,687 35,663 — — (729,350 ) — Expenses Casino and hotel operations 1,941 940,373 — 371,520 (865 ) 1,312,969 General and administrative 1,588 258,392 13,864 47,563 — 321,407 Corporate expense 41,424 45,947 4,388 (306 ) (9,650 ) 81,803 Preopening and start-up expenses — 2,781 — 22,043 — 24,824 Property transactions, net — (427 ) 335 1,281 (335 ) 854 Depreciation and amortization — 132,627 53,123 62,075 (40,926 ) 206,899 44,953 1,379,693 71,710 504,176 (51,776 ) 1,948,756 Income (loss) from unconsolidated affiliates — 448,399 — (90 ) — 448,309 Operating income (loss) 648,734 781,282 39,193 89,188 (789,342 ) 769,055 Interest expense, net of amounts capitalized (147,728 ) (163 ) (29,475 ) (2,986 ) — (180,352 ) Other, net (34,592 ) (88,932 ) (72 ) (24,668 ) 82,539 (65,725 ) Income (loss) before income taxes 466,414 692,187 9,646 61,534 (706,803 ) 522,978 Benefit (provision) for income taxes 7,939 (17,196 ) — 777 — (8,480 ) Net income (loss) 474,353 674,991 9,646 62,311 (706,803 ) 514,498 Less: Net income attributable to noncontrolling interests — — (6,953 ) (33,192 ) — (40,145 ) Net income (loss) attributable to MGM Resorts International $ 474,353 $ 674,991 $ 2,693 $ 29,119 $ (706,803 ) $ 474,353 Net income (loss) $ 474,353 $ 674,991 $ 9,646 $ 62,311 $ (706,803 ) $ 514,498 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (813 ) (813 ) — (1,370 ) 1,626 (1,370 ) Other comprehensive income (loss) (813 ) (813 ) — (1,370 ) 1,626 (1,370 ) Comprehensive income (loss) 473,540 674,178 9,646 60,941 (705,177 ) 513,128 Less: Comprehensive income attributable to noncontrolling interests — — (6,953 ) (32,635 ) — (39,588 ) Comprehensive income (loss) attributable to MGM Resorts International $ 473,540 $ 674,178 $ 2,693 $ 28,306 $ (705,177 ) $ 473,540 Six Months Ended June 30, 2016 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Net revenues $ — $ 3,277,438 $ 110,903 $ 1,203,463 $ (112,616 ) $ 4,479,188 Equity in subsidiaries' earnings 979,880 76,974 — — (1,056,854 ) — Expenses Casino and hotel operations 4,063 1,844,433 — 767,899 (1,713 ) 2,614,682 General and administrative 3,201 496,536 29,484 100,729 — 629,950 Corporate expense 75,980 82,490 4,388 (157 ) (9,650 ) 153,051 Preopening and start-up expenses — 6,227 — 40,557 — 46,784 Property transactions, net — 3,840 1,209 1,271 (335 ) 5,985 Depreciation and amortization — 215,216 104,600 127,848 (40,926 ) 406,738 83,244 2,648,742 139,681 1,038,147 (52,624 ) 3,857,190 Income (loss) from unconsolidated affiliates — 463,189 — (178 ) — 463,011 Operating income (loss) 896,636 1,168,859 (28,778 ) 165,138 (1,116,846 ) 1,085,009 Interest expense, net of amounts capitalized (323,422 ) (358 ) (29,475 ) (11,766 ) — (365,021 ) Other, net (20,718 ) (108,468 ) (72 ) (37,783 ) 82,539 (84,502 ) Income (loss) before income taxes 552,496 1,060,033 (58,325 ) 115,589 (1,034,307 ) 635,486 Benefit (provision) for income taxes (11,344 ) (20,915 ) — 2,469 — (29,790 ) Net income (loss) 541,152 1,039,118 (58,325 ) 118,058 (1,034,307 ) 605,696 Less: Net income attributable to noncontrolling interests — — (6,953 ) (57,591 ) — (64,544 ) Net income (loss) attributable to MGM Resorts International $ 541,152 $ 1,039,118 $ (65,278 ) $ 60,467 $ (1,034,307 ) $ 541,152 Net income (loss) $ 541,152 $ 1,039,118 $ (58,325 ) $ 118,058 $ (1,034,307 ) $ 605,696 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (3,213 ) (3,213 ) — (6,135 ) 6,426 (6,135 ) Other comprehensive income (loss) (3,213 ) (3,213 ) — (6,135 ) 6,426 (6,135 ) Comprehensive income (loss) 537,939 1,035,905 (58,325 ) 111,923 (1,027,881 ) 599,561 Less: Comprehensive income attributable to noncontrolling interests — — (6,953 ) (54,669 ) — (61,622 ) Comprehensive income (loss) attributable to MGM Resorts International $ 537,939 $ 1,035,905 $ (65,278 ) $ 57,254 $ (1,027,881 ) $ 537,939 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION Six Months Ended June 30, 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 $ (390,377 ) $ 738,453 $ 62,313 $ 203,257 $ — $ 613,646 Cash flows from investing activities Capital expenditures, net of construction payable — (23,912 ) (138,987 ) (807,672 ) — (970,571 ) Dispositions of property and equipment — 1,295 — 364 — 1,659 Investments in and advances to unconsolidated affiliates — (1,555 ) — — — (1,555 ) Distributions from unconsolidated affiliates in excess of cumulative earnings — 543,437 — — — 543,437 Intercompany accounts — (1,026,829 ) — — 1,026,829 — Other — (3,986 ) — (1,210 ) — (5,196 ) Net cash provided by (used in) investing activities — (511,550 ) (138,987 ) (808,518 ) 1,026,829 (432,226 ) Cash flows from financing activities Net borrowings (repayments) under bank credit facilities - maturities of 90 days or less (3,861,375 ) 3,550,000 (1,858,375 ) 453,064 — (1,716,686 ) Borrowings under bank credit facilities - maturities longer than 90 days 1,845,375 — — — — 1,845,375 Issuance of long-term debt — — 1,050,000 — — 1,050,000 Retirement of senior notes (1,496,187 ) (2,661 ) — — — (1,498,848 ) Debt issuance costs (20,974 ) (1,530 ) (68,207 ) (32,550 ) — (123,261 ) Issuance of MGM Growth Properties common stock in public offering — — 1,207,500 — — 1,207,500 MGM Growth Properties common stock issuance costs — — (75,032 ) — — (75,032 ) Intercompany accounts 4,514,805 (3,819,728 ) 158,822 172,930 (1,026,829 ) — Distributions to noncontrolling interest owners — — — (32,798 ) — (32,798 ) Other (3,603 ) (3 ) — — — (3,606 ) Net cash provided by (used in) financing activities 978,041 (273,922 ) 414,708 560,646 (1,026,829 ) 652,644 Effect of exchange rate on cash — — — (1,121 ) — (1,121 ) Cash and cash equivalents Net increase (decrease) for the period 587,664 (47,019 ) 338,034 (45,736 ) — 832,943 Balance, beginning of period 538,856 304,168 — 827,288 — 1,670,312 Balance, end of period $ 1,126,520 $ 257,149 $ 338,034 $ 781,552 $ — $ 2,503,255 |