Condensed Consolidating Financial Information | NOTE 12 — CONDENSED CONSOLIDATING FINANCIAL INFORMATION As of September 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, MGM National Harbor, MGM Springfield, 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 September 30, 2018 and December 31, 2017, and for the three and nine months ended September 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 September 30, 2018 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Current assets $ 70,531 $ 1,012,704 $ 65,249 $ 1,065,314 $ (5,774 ) $ 2,208,024 Property and equipment, net — 13,518,819 10,592,450 6,436,901 (9,814,789 ) 20,733,381 Investments in subsidiaries 22,171,696 3,408,952 — — (25,580,648 ) — Investments in the MGP Operating Partnership — 3,486,529 — 843,219 (4,329,748 ) — Investments in and advances to unconsolidated affiliates — 636,544 — 4,666 25,000 666,210 Intercompany accounts — 6,991,345 — — (6,991,345 ) — Other non-current assets 58,703 972,334 366,521 5,011,749 (43,407 ) 6,365,900 $ 22,300,930 $ 30,027,227 $ 11,024,220 $ 13,361,849 $ (46,740,711 ) $ 29,973,515 Current liabilities $ 139,794 $ 1,480,122 $ 188,396 $ 1,398,040 $ (228,762 ) $ 2,977,590 Intercompany accounts 6,833,245 — 402 157,698 (6,991,345 ) — Deferred income taxes, net 981,445 — 31,392 259,591 (31,392 ) 1,241,036 Long-term debt, net 7,532,769 570 4,684,717 2,445,916 — 14,663,972 Other long-term obligations 40,319 7,225,214 204,110 2,251,797 (9,470,041 ) 251,399 Total liabilities 15,527,572 8,705,906 5,109,017 6,513,042 (16,721,540 ) 19,133,997 Redeemable noncontrolling interests — — — 93,339 — 93,339 MGM Resorts International stockholders' equity 6,773,358 21,321,321 4,330,767 4,367,083 (30,019,171 ) 6,773,358 Noncontrolling interests — — 1,584,436 2,388,385 — 3,972,821 Total stockholders' equity 6,773,358 21,321,321 5,915,203 6,755,468 (30,019,171 ) 10,746,179 $ 22,300,930 $ 30,027,227 $ 11,024,220 $ 13,361,849 $ (46,740,711 ) $ 29,973,515 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 September 30, 2018 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Revenues $ — $ 1,966,842 $ 282,221 $ 996,987 $ (216,748 ) $ 3,029,302 Equity in subsidiaries' earnings 332,621 27,390 — — (360,011 ) — Expenses Casino and hotel operations 2,602 1,122,145 43,331 629,205 (9,857 ) 1,787,426 General and administrative 2,417 323,253 23,481 127,980 (13,714 ) 463,417 Corporate expense 33,767 51,545 13,703 4,933 (5,859 ) 98,089 Preopening and start-up expenses — 3,212 — 43,678 — 46,890 Property transactions, net — (42,345 ) 339 (55 ) (339 ) (42,400 ) Depreciation and amortization — 156,116 66,578 138,951 (61,173 ) 300,472 38,786 1,613,926 147,432 944,692 (90,942 ) 2,653,894 Income (loss) from unconsolidated affiliates — 35,925 — (430 ) — 35,495 Operating income 293,835 416,231 134,789 51,865 (485,817 ) 410,903 Interest expense, net of amounts capitalized (125,234 ) (95 ) (58,743 ) (21,501 ) — (205,573 ) Other, net 16,179 (104,534 ) (857 ) (44,919 ) 119,257 (14,874 ) Income (loss) before income taxes 184,780 311,602 75,189 (14,555 ) (366,560 ) 190,456 Benefit (provision) for income taxes (41,902 ) — (5,266 ) 26,033 2,089 (19,046 ) Net income 142,878 311,602 69,923 11,478 (364,471 ) 171,410 Less: Net income attributable to noncontrolling interests — — (19,484 ) (9,048 ) — (28,532 ) Net income attributable to MGM Resorts International $ 142,878 $ 311,602 $ 50,439 $ 2,430 $ (364,471 ) $ 142,878 Net income $ 142,878 $ 311,602 $ 69,923 $ 11,478 $ (364,471 ) $ 171,410 Other comprehensive income, net of tax: Foreign currency translation adjustment 6,706 6,706 — 12,210 (13,412 ) 12,210 Unrealized gain on cash flow hedges 2,765 — 4,736 — (3,473 ) 4,028 Other comprehensive income 9,471 6,706 4,736 12,210 (16,885 ) 16,238 Comprehensive income 152,349 318,308 74,659 23,688 (381,356 ) 187,648 Less: Comprehensive income attributable to noncontrolling interests — — (20,747 ) (14,552 ) — (35,299 ) Comprehensive income attributable to MGM Resorts International $ 152,349 $ 318,308 $ 53,912 $ 9,136 $ (381,356 ) $ 152,349 Nine Months Ended September 30, 2018 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Revenues $ — $ 5,794,029 $ 718,450 $ 2,851,316 $ (653,561 ) $ 8,710,234 Equity in subsidiaries' earnings 970,222 94,444 — — (1,064,666 ) — Expenses Casino and hotel operations 7,879 3,267,036 43,331 1,784,245 (10,441 ) 5,092,050 General and administrative 7,175 949,762 73,199 353,056 (63,432 ) 1,319,760 Corporate expense 112,775 155,604 34,930 15,477 (17,750 ) 301,036 Preopening and start-up expenses — 11,891 — 120,993 — 132,884 Property transactions, net — (20,120 ) 18,851 588 (18,851 ) (19,532 ) Depreciation and amortization — 471,516 203,043 388,539 (197,596 ) 865,502 127,829 4,835,689 373,354 2,662,898 (308,070 ) 7,691,700 Income (loss) from unconsolidated affiliates — 115,851 — (650 ) — 115,201 Operating income 842,393 1,168,635 345,096 187,768 (1,410,157 ) 1,133,735 Interest expense, net of amounts capitalized (350,323 ) (388 ) (157,249 ) (47,015 ) — (554,975 ) Other, net 47,307 (330,852 ) (3,936 ) (140,894 ) 385,126 (43,249 ) Income (loss) before income taxes 539,377 837,395 183,911 (141 ) (1,025,031 ) 535,511 Benefit (provision) for income taxes (49,278 ) — (7,760 ) 97,572 2,089 42,623 Net income 490,099 837,395 176,151 97,431 (1,022,942 ) 578,134 Less: Net income attributable to noncontrolling interests — — (48,460 ) (39,575 ) — (88,035 ) Net income attributable to MGM Resorts International $ 490,099 $ 837,395 $ 127,691 $ 57,856 $ (1,022,942 ) $ 490,099 Net income $ 490,099 $ 837,395 $ 176,151 $ 97,431 $ (1,022,942 ) $ 578,134 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (6,079 ) (6,079 ) — (10,542 ) 12,158 (10,542 ) Unrealized gain on cash flow hedges 15,923 — 27,372 — (20,076 ) 23,219 Other comprehensive income (loss) 9,844 (6,079 ) 27,372 (10,542 ) (7,918 ) 12,677 Comprehensive income 499,943 831,316 203,523 86,889 (1,030,860 ) 590,811 Less: Comprehensive income attributable to noncontrolling interests — — (55,756 ) (35,112 ) — (90,868 ) Comprehensive income attributable to MGM Resorts International $ 499,943 $ 831,316 $ 147,767 $ 51,777 $ (1,030,860 ) $ 499,943 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION Nine Months Ended September 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 $ (338,197 ) $ 945,295 $ 433,087 $ 355,281 $ — $ 1,395,466 Cash flows from investing activities Capital expenditures, net of construction payable — (540,289 ) (795 ) (682,840 ) — (1,223,924 ) Dispositions of property and equipment — 477 — 98 — 575 Proceeds from sale of business units and investment in unconsolidated affiliate — 163,616 — — — 163,616 Acquisition of Northfield Park, net of cash acquired — — (1,034,534 ) — — (1,034,534 ) Investments in unconsolidated affiliates — (2,503 ) — — — (2,503 ) Distributions from unconsolidated affiliates in excess of cumulative earnings — 320,287 — — — 320,287 Intercompany accounts — (992,845 ) — — 992,845 — Other — (13,416 ) — (8,793 ) — (22,209 ) Net cash used in investing activities — (1,064,673 ) (1,035,329 ) (691,535 ) 992,845 (1,798,692 ) Cash flows from financing activities Net borrowings (repayments) under bank credit facilities – maturities of 90 days or less (144,375 ) — 747,375 175,101 — 778,101 Issuance of long-term debt 1,000,000 — — — — 1,000,000 Debt issuance costs (14,414 ) — (17,490 ) (32,904 ) — (64,808 ) Dividends paid to common shareholders (197,295 ) — — — — (197,295 ) Distributions to noncontrolling interest owners — — (90,045 ) (59,481 ) — (149,526 ) MGP dividends paid to consolidated subsidiaries — — (247,820 ) — 247,820 — Purchases of common stock (1,133,334 ) — — — — (1,133,334 ) Retirement of debentures — (2,265 ) — — — (2,265 ) Intercompany accounts 859,461 124,252 — 256,952 (1,240,665 ) — Other (11,594 ) (5,714 ) — (6,168 ) — (23,476 ) Net cash provided by financing activities 358,449 116,273 392,020 333,500 (992,845 ) 207,397 Effect of exchange rate on cash — — — (1,489 ) — (1,489 ) Cash and cash equivalents Net increase (decrease) for the period 20,252 (3,105 ) (210,222 ) (4,243 ) — (197,318 ) Balance, beginning of period 26,870 311,043 259,722 902,360 — 1,499,995 Balance, end of period $ 47,122 $ 307,938 $ 49,500 $ 898,117 $ — $ 1,302,677 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) INFORMATION Three Months Ended September 30, 2017 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Revenues $ — $ 2,067,543 $ 182,798 $ 763,605 $ (183,771 ) $ 2,830,175 Equity in subsidiaries' earnings 417,895 33,317 — — (451,212 ) — Expenses Casino and hotel operations 2,656 1,125,455 — 470,935 (974 ) 1,598,072 General and administrative 2,210 310,308 18,983 89,505 (18,983 ) 402,023 Corporate expense 31,352 53,287 4,113 (75 ) (171 ) 88,506 Preopening and start-up expenses — 1,856 — 27,493 — 29,349 Property transactions, net — 6,855 1,662 (2,058 ) 1,252 7,711 Depreciation and amortization — 163,880 68,662 85,720 (68,662 ) 249,600 36,218 1,661,641 93,420 671,520 (87,538 ) 2,375,261 Income (loss) from unconsolidated affiliates — 38,640 — (850 ) — 37,790 Operating income 381,677 477,859 89,378 91,235 (547,445 ) 492,704 Interest expense, net of amounts capitalized (112,061 ) (178 ) (45,544 ) (5,504 ) — (163,287 ) Other, net (16,170 ) (59,478 ) 1,354 (19,931 ) 55,262 (38,963 ) Income before income taxes 253,446 418,203 45,188 65,800 (492,183 ) 290,454 Provision for income taxes (105,083 ) — (1,488 ) (8,139 ) — (114,710 ) Net income 148,363 418,203 43,700 57,661 (492,183 ) 175,744 Less: Net income attributable to noncontrolling interests — — (11,025 ) (16,356 ) — (27,381 ) Net income attributable to MGM Resorts International $ 148,363 $ 418,203 $ 32,675 $ 41,305 $ (492,183 ) $ 148,363 Net income $ 148,363 $ 418,203 $ 43,700 $ 57,661 $ (492,183 ) $ 175,744 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (1,635 ) (1,635 ) — (3,004 ) 3,270 (3,004 ) Unrealized gain on cash flow hedges 833 — 1,754 — (1,271 ) 1,316 Other comprehensive income (loss) (802 ) (1,635 ) 1,754 (3,004 ) 1,999 (1,688 ) Comprehensive income 147,561 416,568 45,454 54,657 (490,184 ) 174,056 Less: Comprehensive income attributable to noncontrolling interests — — (11,506 ) (14,989 ) — (26,495 ) Comprehensive income attributable to MGM Resorts International $ 147,561 $ 416,568 $ 33,948 $ 39,668 $ (490,184 ) $ 147,561 Nine Months Ended September 30, 2017 Guarantor Non-Guarantor Subsidiaries Parent Subsidiaries MGP Other Elimination Consolidated (In thousands) Revenues $ — $ 5,900,717 $ 551,153 $ 2,301,980 $ (553,976 ) $ 8,199,874 Equity in subsidiaries' earnings 1,244,945 121,735 — — (1,366,680 ) — Expenses Casino and hotel operations 7,781 3,239,921 — 1,406,179 (2,823 ) 4,651,058 General and administrative 6,323 874,287 60,112 264,550 (60,112 ) 1,145,160 Corporate expense 86,233 145,885 9,797 (315 ) (514 ) 241,086 Preopening and start-up expenses — 4,631 — 60,877 — 65,508 Property transactions, net — 21,462 19,104 1,188 (19,104 ) 22,650 NV Energy exit expense — (40,629 ) — — — (40,629 ) Depreciation and amortization — 486,981 190,573 257,142 (190,573 ) 744,123 100,337 4,732,538 279,586 1,989,621 (273,126 ) 6,828,956 Income (loss) from unconsolidated affiliates — 119,139 — (944 ) — 118,195 Operating income 1,144,608 1,409,053 271,567 311,415 (1,647,530 ) 1,489,113 Interest expense, net of amounts capitalized (358,359 ) (812 ) (134,998 ) (17,235 ) — (511,404 ) Other, net 11,306 (287,665 ) 1,601 (77,386 ) 294,136 (58,008 ) Income before income taxes 797,555 1,120,576 138,170 216,794 (1,353,394 ) 919,701 Provision for income taxes (232,916 ) — (3,903 ) (13,691 ) — (250,510 ) Net income 564,639 1,120,576 134,267 203,103 (1,353,394 ) 669,191 Less: Net income attributable to noncontrolling interests — — (33,053 ) (71,499 ) — (104,552 ) Net income attributable to MGM Resorts International $ 564,639 $ 1,120,576 $ 101,214 $ 131,604 $ (1,353,394 ) $ 564,639 Net income $ 564,639 $ 1,120,576 $ 134,267 $ 203,103 $ (1,353,394 ) $ 669,191 Other comprehensive loss, net of tax: Foreign currency translation adjustment (23,005 ) (23,005 ) — (41,313 ) 46,010 (41,313 ) Unrealized loss on cash flow hedges (1,997 ) — (2,992 ) — 2,348 (2,641 ) Other comprehensive loss (25,002 ) (23,005 ) (2,992 ) (41,313 ) 48,358 (43,954 ) Comprehensive income 539,637 1,097,571 131,275 161,790 (1,305,036 ) 625,237 Less: Comprehensive income attributable to noncontrolling interests — — (32,409 ) (53,191 ) — (85,600 ) Comprehensive income attributable to MGM Resorts International $ 539,637 $ 1,097,571 $ 98,866 $ 108,599 $ (1,305,036 ) $ 539,637 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION Nine Months Ended September 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 $ (492,009 ) $ 1,064,548 $ 363,855 $ 575,515 $ — $ 1,511,909 Cash flows from investing activities Capital expenditures, net of construction payable — (308,738 ) — (1,090,540 ) — (1,399,278 ) Dispositions of property and equipment — 174 — 197 — 371 Investments in unconsolidated affiliates — (5,921 ) — — — (5,921 ) Distributions from unconsolidated affiliates in excess of cumulative earnings — 300,000 — — — 300,000 Intercompany accounts — (1,158,429 ) — — 1,158,429 — Other — (9,982 ) — (11,804 ) — (21,786 ) Net cash used in investing activities — (1,182,896 ) — (1,102,147 ) 1,158,429 (1,126,614 ) Cash flows from financing activities Net borrowings (repayments) under bank credit facilities - maturities of 90 days or less 290,625 — (33,500 ) 361,609 — 618,734 Issuance of long-term debt — — 350,000 — — 350,000 Debt issuance costs — — (5,381 ) (4,379 ) — (9,760 ) Issuance of MGP common stock in public offering — — 404,685 — — 404,685 MGM Growth Properties Class A share issurance costs — — (17,137 ) — — (17,137 ) Dividends paid to common shareholders (189,726 ) — — — — (189,726 ) Distributions to noncontrolling interest owners — — (67,340 ) (72,330 ) — (139,670 ) MGP dividends paid to consolidated subsidiaries — — (216,873 ) — 216,873 — Intercompany accounts 1,165,419 102,635 — 107,248 (1,375,302 ) — Purchases of common stock (327,500 ) — — — — (327,500 ) Retirement of debentures (502,669 ) — — — — (502,669 ) Other (20,354 ) — — (8,583 ) — (28,937 ) Net cash provided by financing activities 415,795 102,635 414,454 383,565 (1,158,429 ) 158,020 Effect of exchange rate on cash — — — (3,208 ) — (3,208 ) Cash and cash equivalents Net increase (decrease) for the period (76,214 ) (15,713 ) 778,309 (146,275 ) — 540,107 Balance, beginning of period 99,995 307,713 360,492 678,381 — 1,446,581 Balance, end of period $ 23,781 $ 292,000 $ 1,138,801 $ 532,106 $ — $ 1,986,688 |