Condensed Consolidating Financial Information | NOTE 11 — CONDENSED CONSOLIDATING FINANCIAL INFORMATION As of June 30, 2018, 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 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 June 30, 2018 and December 31, 2017, and for the three and six months ended June 30, 2018 and 2017 are presented below. Within the Condensed Consolidating Statements of Cash Flows, 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 Operating Partnership units 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 are reflected in the balance sheets of the applicable MGM subsidiaries. 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. 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, 2018 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Current assets $ 81,185 $ 945,675 $ 294,979 $ 765,156 $ (3,879 ) $ 2,083,116 Property and equipment, net — 13,539,895 9,880,658 6,334,519 (9,891,994 ) 19,863,078 Investments in subsidiaries 21,713,553 3,403,939 — — (25,117,492 ) — Investments in the MGP Operating Partnership — 3,503,564 — 847,376 (4,350,940 ) — Investments in and advances to unconsolidated affiliates — 852,698 — 5,242 25,000 882,940 Intercompany accounts — 6,514,427 — — (6,514,427 ) — Other non-current assets 58,616 974,909 94,428 5,063,874 (43,801 ) 6,148,026 $ 21,853,354 $ 29,735,107 $ 10,270,065 $ 13,016,167 $ (45,897,533 ) $ 28,977,160 Current liabilities $ 142,431 $ 1,425,041 $ 149,275 $ 1,568,900 $ (220,854 ) $ 3,064,793 Intercompany accounts 6,351,967 — 147 162,313 (6,514,427 ) — Deferred income taxes, net 940,949 — 28,544 285,448 (28,544 ) 1,226,397 Long-term debt, net 7,532,585 570 3,923,224 2,056,962 — 13,513,341 Other long-term obligations 38,280 7,235,916 194,572 2,259,167 (9,482,215 ) 245,720 Total liabilities 15,006,212 8,661,527 4,295,762 6,332,790 (16,246,040 ) 18,050,251 Redeemable noncontrolling interests — — — 86,968 — 86,968 MGM Resorts International stockholders' equity 6,847,142 21,073,580 4,374,317 4,203,596 (29,651,493 ) 6,847,142 Noncontrolling interests — — 1,599,986 2,392,813 — 3,992,799 Total stockholders' equity 6,847,142 21,073,580 5,974,303 6,596,409 (29,651,493 ) 10,839,941 $ 21,853,354 $ 29,735,107 $ 10,270,065 $ 13,016,167 $ (45,897,533 ) $ 28,977,160 At December 31, 2017 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Current assets $ 78,909 $ 1,015,802 $ 266,627 $ 1,022,340 $ (7,323 ) $ 2,376,355 Property and equipment, net — 13,521,221 10,021,938 6,125,722 (10,033,422 ) 19,635,459 Investments in subsidiaries 21,040,147 3,304,768 — — (24,344,915 ) — Investments in the MGP Operating Partnership — 3,549,063 — 862,037 (4,411,100 ) — Investments in and advances to unconsolidated affiliates — 1,002,903 — 5,394 25,000 1,033,297 Intercompany accounts — 5,998,499 — — (5,998,499 ) — Other non-current assets 49,142 913,602 62,555 5,134,220 (44,588 ) 6,114,931 $ 21,168,198 $ 29,305,858 $ 10,351,120 $ 13,149,713 $ (44,814,847 ) $ 29,160,042 Current liabilities $ 153,159 $ 1,445,031 $ 144,537 $ 1,609,110 $ (213,540 ) $ 3,138,297 Intercompany accounts 5,783,578 — 962 213,959 (5,998,499 ) — Deferred income taxes, net 934,966 — 28,544 360,409 (28,544 ) 1,295,375 Long-term debt, net 6,682,574 2,835 3,934,628 2,131,015 — 12,751,052 Other long-term obligations 36,860 7,268,664 174,710 2,305,353 (9,501,171 ) 284,416 Total liabilities 13,591,137 8,716,530 4,283,381 6,619,846 (15,741,754 ) 17,469,140 Redeemable noncontrolling interests — — — 79,778 — 79,778 MGM Resorts International stockholders' equity 7,577,061 20,589,328 4,443,089 4,040,676 (29,073,093 ) 7,577,061 Noncontrolling interests — — 1,624,650 2,409,413 — 4,034,063 Total stockholders' equity 7,577,061 20,589,328 6,067,739 6,450,089 (29,073,093 ) 11,611,124 $ 21,168,198 $ 29,305,858 $ 10,351,120 $ 13,149,713 $ (44,814,847 ) $ 29,160,042 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) INFORMATION Three Months Ended June 30, 2018 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Revenues $ — $ 1,937,394 $ 220,390 $ 921,382 $ (220,471 ) $ 2,858,695 Equity in subsidiaries' earnings 309,334 22,519 — — (331,853 ) — Expenses Casino and hotel operations 2,562 1,094,872 — 572,061 (81 ) 1,669,414 General and administrative 2,408 315,659 27,219 120,386 (27,219 ) 438,453 Corporate expense 39,707 53,652 10,746 5,192 (5,859 ) 103,438 Preopening and start-up expenses — 1,937 — 17,140 — 19,077 Property transactions, net — 17,083 14,426 (113 ) (14,426 ) 16,970 Depreciation and amortization — 158,753 67,474 137,440 (67,459 ) 296,208 44,677 1,641,956 119,865 852,106 (115,044 ) 2,543,560 Income (loss) from unconsolidated affiliates — 48,294 — (354 ) — 47,940 Operating income 264,657 366,251 100,525 68,922 (437,280 ) 363,075 Interest expense, net of amounts capitalized (115,531 ) (156 ) (49,276 ) (16,530 ) — (181,493 ) Other, net 15,356 (118,368 ) (1,927 ) (49,288 ) 136,778 (17,449 ) Income before income taxes 164,482 247,727 49,322 3,104 (300,502 ) 164,133 Benefit (provision) for income taxes (40,705 ) — (1,263 ) 18,258 — (23,710 ) Net income 123,777 247,727 48,059 21,362 (300,502 ) 140,423 Less: Net income attributable to noncontrolling interests — — (13,146 ) (3,500 ) — (16,646 ) Net income attributable to MGM Resorts International $ 123,777 $ 247,727 $ 34,913 $ 17,862 $ (300,502 ) $ 123,777 Net income $ 123,777 $ 247,727 $ 48,059 $ 21,362 $ (300,502 ) $ 140,423 Other comprehensive income, net of tax: Foreign currency translation adjustment 583 583 — 1,400 (1,166 ) 1,400 Unrealized gain on cash flow hedges 3,660 — 6,281 — (4,606 ) 5,335 Other comprehensive income 4,243 583 6,281 1,400 (5,772 ) 6,735 Comprehensive income 128,020 248,310 54,340 22,762 (306,274 ) 147,158 Less: Comprehensive income attributable to noncontrolling interests — — (14,821 ) (4,317 ) — (19,138 ) Comprehensive income attributable to MGM Resorts International $ 128,020 $ 248,310 $ 39,519 $ 18,445 $ (306,274 ) $ 128,020 Six Months Ended June 30, 2018 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Revenues $ — $ 3,827,187 $ 436,229 $ 1,854,329 $ (436,813 ) $ 5,680,932 Equity in subsidiaries' earnings 637,601 67,054 — — (704,655 ) — Expenses Casino and hotel operations 5,277 2,144,891 — 1,155,040 (584 ) 3,304,624 General and administrative 4,758 626,509 49,718 225,076 (49,718 ) 856,343 Corporate expense 79,008 104,059 21,227 10,544 (11,891 ) 202,947 Preopening and start-up expenses — 8,679 — 77,315 — 85,994 Property transactions, net — 22,225 18,512 643 (18,512 ) 22,868 Depreciation and amortization — 315,400 136,465 249,588 (136,423 ) 565,030 89,043 3,221,763 225,922 1,718,206 (217,128 ) 5,037,806 Income (loss) from unconsolidated affiliates — 79,926 — (220 ) — 79,706 Operating income 548,558 752,404 210,307 135,903 (924,340 ) 722,832 Interest expense, net of amounts capitalized (225,089 ) (293 ) (98,506 ) (25,514 ) — (349,402 ) Other, net 31,128 (226,318 ) (3,079 ) (95,975 ) 265,869 (28,375 ) Income before income taxes 354,597 525,793 108,722 14,414 (658,471 ) 345,055 Benefit (provision) for income taxes (7,376 ) — (2,494 ) 71,539 — 61,669 Net income 347,221 525,793 106,228 85,953 (658,471 ) 406,724 Less: Net income attributable to noncontrolling interests — — (28,976 ) (30,527 ) — (59,503 ) Net income attributable to MGM Resorts International $ 347,221 $ 525,793 $ 77,252 $ 55,426 $ (658,471 ) $ 347,221 Net income $ 347,221 $ 525,793 $ 106,228 $ 85,953 $ (658,471 ) $ 406,724 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (12,785 ) (12,785 ) — (22,752 ) 25,570 (22,752 ) Unrealized gain on cash flow hedges 13,158 — 22,636 — (16,603 ) 19,191 Other comprehensive income (loss) 373 (12,785 ) 22,636 (22,752 ) 8,967 (3,561 ) Comprehensive income 347,594 513,008 128,864 63,201 (649,504 ) 403,163 Less: Comprehensive income attributable to noncontrolling interests — — (35,009 ) (20,560 ) — (55,569 ) Comprehensive income attributable to MGM Resorts International $ 347,594 $ 513,008 $ 93,855 $ 42,641 $ (649,504 ) $ 347,594 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION Six Months Ended June 30, 2018 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 $ (224,359 ) $ 624,484 $ 284,333 $ 408,693 $ — $ 1,093,151 Cash flows from investing activities Capital expenditures, net of construction payable — (367,713 ) (190 ) (493,858 ) — (861,761 ) Dispositions of property and equipment — 435 — 5 — 440 Investments in unconsolidated affiliates — (2,503 ) — — — (2,503 ) Distributions from unconsolidated affiliates in excess of cumulative earnings — 200,000 — — — 200,000 Intercompany accounts — (515,927 ) — — 515,927 — Other — (9,916 ) — (5,693 ) — (15,609 ) Net cash used in investing activities — (695,624 ) (190 ) (499,546 ) 515,927 (679,433 ) Cash flows from financing activities Net borrowings (repayments) under bank credit facilities – maturities of 90 days or less (141,250 ) — (13,000 ) (206,624 ) — (360,874 ) Issuance of long-term debt 1,000,000 — — — — 1,000,000 Debt issuance costs (14,414 ) — (17,490 ) (32,873 ) — (64,777 ) Dividends paid to common shareholders (133,334 ) — — — — (133,334 ) Distributions to noncontrolling interest owners — — (59,553 ) (41,854 ) — (101,407 ) MGP dividends paid to consolidated subsidiaries — — (163,913 ) — 163,913 — Purchases of common stock (957,264 ) — — — — (957,264 ) Retirement of debentures — (2,265 ) — — — (2,265 ) Intercompany accounts 505,289 48,052 — 126,499 (679,840 ) — Other (9,393 ) (4,200 ) — (4,637 ) — (18,230 ) Net cash provided by (used in) financing activities 249,634 41,587 (253,956 ) (159,489 ) (515,927 ) (638,151 ) Effect of exchange rate on cash — — — (2,690 ) — (2,690 ) Cash and cash equivalents Net increase (decrease) for the period 25,275 (29,553 ) 30,187 (253,032 ) — (227,123 ) Balance, beginning of period 26,870 311,043 259,722 902,360 — 1,499,995 Balance, end of period $ 52,145 $ 281,490 $ 289,909 $ 649,328 $ — $ 1,272,872 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) Revenues $ — $ 1,907,756 $ 184,456 $ 745,312 $ (185,391 ) $ 2,652,133 Equity in subsidiaries' earnings 424,981 36,260 — — (461,241 ) — Expenses Casino and hotel operations 2,616 1,063,046 — 455,889 (935 ) 1,520,616 General and administrative 2,131 265,778 20,642 86,440 (20,642 ) 354,349 Corporate expense 31,488 45,347 2,833 (48 ) (172 ) 79,448 Preopening and start-up expenses — 2,131 — 18,962 — 21,093 Property transactions, net — 13,060 10,587 3,097 (13,501 ) 13,243 NV Energy exit expense — (40,629 ) — — — (40,629 ) Depreciation and amortization — 160,402 60,227 84,352 (60,227 ) 244,754 36,235 1,509,135 94,289 648,692 (95,477 ) 2,192,874 Income (loss) from unconsolidated affiliates — 40,652 — (13 ) — 40,639 Operating income 388,746 475,533 90,167 96,607 (551,155 ) 499,898 Interest expense, net of amounts capitalized (122,942 ) (176 ) (44,818 ) (6,122 ) — (174,058 ) Other, net 13,389 (119,693 ) (297 ) (27,857 ) 123,151 (11,307 ) Income before income taxes 279,193 355,664 45,052 62,628 (428,004 ) 314,533 Provision for income taxes (69,329 ) — (1,177 ) (3,154 ) — (73,660 ) Net income 209,864 355,664 43,875 59,474 (428,004 ) 240,873 Less: Net income attributable to noncontrolling interests — — (10,680 ) (20,329 ) — (31,009 ) Net income attributable to MGM Resorts International $ 209,864 $ 355,664 $ 33,195 $ 39,145 $ (428,004 ) $ 209,864 Net income $ 209,864 $ 355,664 $ 43,875 $ 59,474 $ (428,004 ) $ 240,873 Other comprehensive loss, net of tax: Foreign currency translation adjustment (14,018 ) (14,018 ) — (25,376 ) 28,036 (25,376 ) Unrealized loss on cash flow hedges (2,347 ) — (4,112 ) — 3,136 (3,323 ) Other comprehensive loss (16,365 ) (14,018 ) (4,112 ) (25,376 ) 31,172 (28,699 ) Comprehensive income 193,499 341,646 39,763 34,098 (396,832 ) 212,174 Less: Comprehensive income attributable to noncontrolling interests — — (9,705 ) (8,970 ) — (18,675 ) Comprehensive income attributable to MGM Resorts International $ 193,499 $ 341,646 $ 30,058 $ 25,128 $ (396,832 ) $ 193,499 Six Months Ended June 30, 2017 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Revenues $ — $ 3,833,174 $ 368,355 $ 1,538,375 $ (370,205 ) $ 5,369,699 Equity in subsidiaries' earnings 827,050 88,418 — — (915,468 ) — Expenses Casino and hotel operations 5,125 2,114,466 — 935,244 (1,849 ) 3,052,986 General and administrative 4,113 563,979 41,129 175,045 (41,129 ) 743,137 Corporate expense 54,881 92,598 5,684 (240 ) (343 ) 152,580 Preopening and start-up expenses — 2,775 — 33,384 — 36,159 Property transactions, net — 14,607 17,442 3,246 (20,356 ) 14,939 NV Energy exit expense — (40,629 ) — — — (40,629 ) Depreciation and amortization — 323,101 121,911 171,422 (121,911 ) 494,523 64,119 3,070,897 186,166 1,318,101 (185,588 ) 4,453,695 Income (loss) from unconsolidated affiliates — 80,499 — (94 ) — 80,405 Operating income 762,931 931,194 182,189 220,180 (1,100,085 ) 996,409 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 before income taxes 544,109 702,373 92,982 150,994 (861,211 ) 629,247 Provision for income taxes (127,833 ) — (2,415 ) (5,552 ) — (135,800 ) Net income 416,276 702,373 90,567 145,442 (861,211 ) 493,447 Less: Net income attributable to noncontrolling interests — — (22,028 ) (55,143 ) — (77,171 ) Net income attributable to MGM Resorts International $ 416,276 $ 702,373 $ 68,539 $ 90,299 $ (861,211 ) $ 416,276 Net income $ 416,276 $ 702,373 $ 90,567 $ 145,442 $ (861,211 ) $ 493,447 Other comprehensive loss, net of tax: Foreign currency translation adjustment (21,370 ) (21,370 ) — (38,309 ) 42,740 (38,309 ) Unrealized loss on cash flow hedges (2,831 ) — (4,746 ) — 3,620 (3,957 ) Other comprehensive loss (24,201 ) (21,370 ) (4,746 ) (38,309 ) 46,360 (42,266 ) Comprehensive income 392,075 681,003 85,821 107,133 (814,851 ) 451,181 Less: Comprehensive income attributable to noncontrolling interests — — (20,903 ) (38,203 ) — (59,106 ) Comprehensive income attributable to MGM Resorts International $ 392,075 $ 681,003 $ 64,918 $ 68,930 $ (814,851 ) $ 392,075 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 ) $ 656,632 $ 230,718 $ 436,363 $ — $ 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 unconsolidated affiliates — (4,773 ) — — — (4,773 ) Distributions from unconsolidated affiliates in excess of cumulative earnings — 300,000 — — — 300,000 Intercompany accounts — (886,611 ) — — 886,611 — Other — (6,560 ) — (9,128 ) — (15,688 ) Net cash used in investing activities — (742,203 ) — (737,186 ) 886,611 (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 Debt issuance costs — — (1,024 ) (4,379 ) — (5,403 ) Dividends paid to common shareholders (126,429 ) — — — — (126,429 ) Distributions to noncontrolling interest owners — — (44,564 ) (45,308 ) — (89,872 ) MGP dividends paid to consolidated subsidiaries — — (143,655 ) — 143,655 — Intercompany accounts 924,157 58,984 — 47,125 (1,030,266 ) — Other (11,702 ) — — (4,391 ) — (16,093 ) Net cash provided by (used in) financing activities 779,776 58,984 (214,368 ) 229,274 (886,611 ) (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 |