Record 1Q Adjusted Property EBITDAR for Las Vegas Strip Resorts up 41% YOY; seventh consecutive quarterly record - MGM China Adjusted Property EBITDAR of $169 million, 88% recovery vs 1Q19; net revenues up 130% YOY amid strong reopening trends
MGM Resorts International (NYSE: MGM) yesterday reported financial results for the quarter ended March 31, 2023.
"MGM Resorts is executing across all of its geographies and channels with record first quarter Las Vegas Strip Adjusted Property EBITDAR, consistently strong Regional Operations profit, MGM China's swift return to profitability, and BetMGM's anticipated positive earnings later this year," said Bill Hornbuckle, Chief Executive Officer and President of MGM Resorts. "Beyond our continued exceptional results, our future growth and expansion plans are promising. In April, we achieved the landmark approval of MGM's development plan in Osaka, Japan. The application process in New York is progressing and our global digital expansion plans remain a major focus as we continue to grow LeoVegas and the MGM digital brand worldwide."
"MGM Resorts achieved net cash flow provided by operating activities of $704 million and Free Cash Flow of $564 million during the first quarter," said Jonathan Halkyard, Chief Financial Officer and Treasurer of MGM Resorts. "Our balance sheet continues to improve as we received $450 million in gross cash proceeds from the sale of Gold Strike Tunica and repaid $1.25 billion in unsecured notes upon maturity during the quarter. With $4.5 billion of cash on the balance sheet, we expect to continue to return capital to our shareholders through ongoing stock repurchases and pursue long-term growth opportunities through international digital acquisitions and the development opportunities we have with Japan and New York."
First Quarter 2023 Financial Highlights:
Consolidated Results
- Consolidated net revenues of $3.9 billion, an increase of 36% compared to the prior year quarter. The current quarter benefited from the inclusion of the operating results of The Cosmopolitan of Las Vegas ("The Cosmopolitan"), which was acquired in May 2022, partially offset by the disposition of The Mirage and Gold Strike Tunica in December 2022 and February 2023, respectively. Additionally, results improved over the prior year quarter due to increased business volume and travel activity primarily at MGM China and Las Vegas Strip Resorts;
- Operating income was $731 million compared to $106 million in the prior year quarter due to a $398 million gain on the disposition of Gold Strike Tunica in the current quarter and the increase in net revenues discussed above, partially offset by an increase in rent expense related to the VICI and The Cosmopolitan leases, which commenced in April 2022 and May 2022, respectively;
- Net income attributable to MGM Resorts was $467 million, which was impacted by the items affecting operating income above, compared to net loss attributable to MGM Resorts of $18 million in the prior year quarter;
- Diluted income per share of $1.24 in the current quarter compared to diluted loss per share of $0.06 in the prior year quarter;
- Adjusted diluted earnings per share ("Adjusted EPS")(1) of $0.44 in the current quarter compared to $0.01 in the prior year quarter;
- Consolidated Adjusted EBITDAR(2) of $1.1 billion;
- Net cash flow provided by (used in) operating, investing, and financing activities was $704 million, $212 million, and ($2.4 billion), respectively; and
- Free Cash Flow(3) of $564 million.
Las Vegas Strip Resorts
- Net revenues of $2.2 billion in the current quarter compared to $1.7 billion in the prior year quarter, an increase of 31%. The current quarter benefited from the inclusion of The Cosmopolitan, an increase in business volume as the early part of the prior year quarter was negatively affected by the spread of the omicron variant, and an increase in REVPAR(4), partially offset by the disposition of The Mirage;
- Same-store net revenues (adjusted for acquisitions and dispositions) of $1.9 billion in the current quarter compared to $1.5 billion in the prior year quarter, an increase of 22%;
- Adjusted Property EBITDAR(2) of $836 million in the current quarter compared to $594 million in the prior year quarter, an increase of 41%;
- Same-Store Adjusted Property EBITDAR(2) of $706 million in the current quarter compared to $561 million in the prior year quarter, an increase of 26%; and
- Adjusted Property EBITDAR margin(2) of 38.4% in the current quarter compared to 35.7% in the prior year quarter, an increase of 271 basis points primarily due to an increase in rooms revenue, as discussed above.
Regional Operations
- Net revenues of $946 million in the current quarter compared to $891 million in the prior year quarter, an increase of 6%, due primarily to an increase in non-gaming business volume;
- Same-store net revenues (adjusted for dispositions) of $919 million in the current quarter compared to $833 million in the prior year quarter, an increase of 10%;
- Adjusted Property EBITDAR of $313 million, which was flat compared to the prior year quarter;
- Same-Store Adjusted Property EBITDAR of $302 million in the current quarter compared to $285 million in the prior year quarter, an increase of 6%; and
- Adjusted Property EBITDAR margin of 33.1% in the current quarter compared to 35.2% in the prior year quarter, a decrease of 206 basis points, due primarily to an increase in contribution from lower margin non-gaming revenue.
MGM China
- Net revenues of $618 million in the current quarter compared to $268 million in the prior year quarter, an increase of 130%, and a decrease of 16% compared to the first quarter of 2019. The current quarter was positively affected by the removal of COVID-19 related travel restrictions;
- Adjusted Property EBITDAR of $169 million in the current quarter compared to Adjusted Property EBITDAR loss of $26 million in the prior year quarter, which included a charge of $18 million related to litigation reserves, and a decrease of 12% compared to the first quarter of 2019; and
- Adjusted Property EBITDAR margin of 27.4% in the current quarter compared to 26.3% in the first quarter of 2019.
Adjusted EPS
The following table reconciles diluted earnings per share ("EPS") to Adjusted EPS (approximate EPS impact shown, per share; positive adjustments represent charges to income):
| Three Months Ended March 31, | 2023 | 2022 | |
| Diluted earnings per share | $ 1.24 | $ (0.06) | |
| Property transactions, net | (1.05) | 0.12 | |
| Non-operating items: | |||
| Gain related to debt and equity investments | (0.02) | (0.03) | |
| Foreign currency loss on MGM China senior notes | 0.03 | 0.02 | |
| Change in the fair value of unhedged MGP swaps | — | (0.03) | |
| Income tax impact on net income adjustments(1) | 0.24 | (0.01) | |
| Adjusted EPS | $ 0.44 | $ 0.01 |
| (1) | The income tax impact includes current and deferred income tax expense based upon the nature of the adjustment and the jurisdiction in which it occurs. |
Las Vegas Strip Resorts
The following table shows key gaming statistics for Las Vegas Strip Resorts:
| Three Months Ended March 31, | 2023 | 2022 | % Change | |
| (Dollars in millions) | ||||
| Casino revenue | $ 501 | $ 475 | 5 % | |
| Table games drop | $ 1,524 | $ 1,203 | 27 % | |
| Table games win | $ 346 | $ 296 | 17 % | |
| Table games win % | 22.7 % | 24.6 % | ||
| Slot handle | $ 5,759 | $ 4,607 | 25 % | |
| Slot win | $ 544 | $ 427 | 27 % | |
| Slot win % | 9.4 % | 9.3 % | ||
The following table shows key hotel statistics for Las Vegas Strip Resorts:
| Three Months Ended March 31, | 2023 | 2022 | % Change | |
| Room revenue (in millions) | $ 752 | $ 485 | 55 % | |
| Occupancy | 92 % | 78 % | ||
| Average daily rate (ADR) | $ 258 | $ 197 | 31 % | |
| Revenue per available room (REVPAR) | $ 239 | $ 154 | 56 % |
Regional Operations
The following table shows key gaming statistics for Regional Operations:
| Three Months Ended March 31, | 2023 | 2022 | % Change | |
| (Dollars in millions) | ||||
| Casino revenue | $ 717 | $ 704 | 2 % | |
| Table games drop | $ 1,013 | $ 1,021 | (1) % | |
| Table games win | $ 214 | $ 216 | (1) % | |
| Table games win % | 21.1 % | 21.2 % | ||
| Slot handle | $ 6,999 | $ 6,662 | 5 % | |
| Slot win | $ 670 | $ 638 | 5 % | |
| Slot win % | 9.6 % | 9.6 % | ||
MGM China
The following table shows key gaming statistics for MGM China:
| Three Months Ended March 31, | 2023 | 2022 | % Change | |
| (Dollars in millions) | ||||
| Casino revenue | $ 555 | $ 231 | 140 % | |
| Main floor table games drop | $ 2,177 | $ 1,096 | 99 % | |
| Main floor table games win | $ 523 | $ 239 | 119 % | |
| Main floor table games win % | 24.0 % | 21.8 % | ||
Intercompany branding license fee expense was $11 million in the current quarter and $5 million in the prior year quarter.
Corporate Expense
Corporate expense, including share-based compensation for corporate employees, increased to $128 million in the first quarter of 2023, from $111 million in the prior year quarter, due primarily to an increase in payroll expense.
Unconsolidated Affiliates
The following table summarizes information related to the Company's share of operating loss from unconsolidated affiliates:
| Three Months Ended March 31, | 2023 | 2022 | |
| (In thousands) | |||
| MGP BREIT Venture | $ — | $ 38,936 | |
| BetMGM | (81,872) | (91,993) | |
| Other | 6,873 | 6,219 | |
| $ (74,999) | $ (46,838) | ||
MGM Resorts Share Repurchases
During the first quarter of 2023, the Company repurchased approximately 12 million shares of its common stock for an aggregate amount of $487 million, pursuant to its repurchase plans. The remaining availability under the February 2023 repurchase plan was approximately $2.0 billion as of March 31, 2023. All shares repurchased under the Company's repurchase plans have been retired.
| MGM RESORTS INTERNATIONAL AND SUBSIDIARIES | ||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
| (In thousands, except per share data) | ||||||
| (Unaudited) | ||||||
| Three Months Ended | ||||||
| March 31, | March 31, | |||||
| 2023 | 2022 | |||||
| Revenues: | ||||||
| Casino | $ | 1,882,428 | $ | 1,420,910 | ||
| Rooms | 848,488 | 557,073 | ||||
| Food and beverage | 722,131 | 492,854 | ||||
| Entertainment, retail and other | 409,578 | 371,566 | ||||
| Reimbursed costs | 10,671 | 11,906 | ||||
| 3,873,296 | 2,854,309 | |||||
| Expenses: | ||||||
| Casino | 990,890 | 674,365 | ||||
| Rooms | 240,114 | 196,113 | ||||
| Food and beverage | 511,592 | 368,662 | ||||
| Entertainment, retail and other | 243,528 | 218,749 | ||||
| Reimbursed costs | 10,671 | 11,906 | ||||
| General and administrative | 1,135,540 | 776,837 | ||||
| Corporate expense | 127,559 | 111,241 | ||||
| Preopening and start-up expenses | 139 | 434 | ||||
| Property transactions, net | (396,076) | 54,738 | ||||
| Depreciation and amortization | 203,501 | 288,638 | ||||
| 3,067,458 | 2,701,683 | |||||
| Loss from unconsolidated affiliates | (74,999) | (46,838) | ||||
| Operating income | 730,839 | 105,788 | ||||
| Non-operating income (expense): | ||||||
| Interest expense, net of amounts capitalized | (130,300) | (196,091) | ||||
| Non-operating items from unconsolidated affiliates | (1,184) | (15,133) | ||||
| Other, net | 46,307 | 34,302 | ||||
| (85,177) | (176,922) | |||||
| Income (loss) before income taxes | 645,662 | (71,134) | ||||
| Benefit (provision) for income taxes | (165,779) | 36,341 | ||||
| Net income (loss) | 479,883 | (34,793) | ||||
| Less: Net (Income) loss attributable to noncontrolling interests | (13,076) | 16,777 | ||||
| Net income (loss) attributable to MGM Resorts International | $ | 466,807 | $ | (18,016) | ||
| Earnings (loss) per share: | ||||||
| Basic | $ | 1.25 | $ | (0.06) | ||
| Diluted | $ | 1.24 | $ | (0.06) | ||
| Weighted average common shares outstanding: | ||||||
| Basic | 374,085 | 442,916 | ||||
| Diluted | 378,095 | 442,916 | ||||
| MGM RESORTS INTERNATIONAL AND SUBSIDIARIES | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (In thousands, except share data) | |||||||
| (Unaudited) | |||||||
| March 31, | December 31, | ||||||
| 2023 | 2022 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 4,505,318 | $ | 5,911,893 | |||
| Accounts receivable, net | 752,965 | 852,149 | |||||
| Inventories | 128,732 | 126,065 | |||||
| Income tax receivable | 2,061 | 73,016 | |||||
| Prepaid expenses and other | 842,028 | 583,132 | |||||
| Assets held for sale | - | 608,437 | |||||
| Total current assets | 6,231,104 | 8,154,692 | |||||
| Property and equipment, net | 5,140,662 | 5,223,928 | |||||
| Other assets: | |||||||
| Investments in and advances to unconsolidated affiliates | 153,856 | 173,039 | |||||
| Goodwill | 5,024,905 | 5,029,312 | |||||
| Other intangible assets, net | 1,756,151 | 1,551,252 | |||||
| Operating lease right-of-use assets, net | 24,403,384 | 24,530,929 | |||||
| Other long-term assets, net | 832,167 | 1,029,054 | |||||
| Total other assets | 32,170,463 | 32,313,586 | |||||
| $ | 43,542,229 | $ | 45,692,206 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts and construction payable | $ | 347,344 | $ | 369,817 | |||
| Income taxes payable | 65,992 | - | |||||
| Current portion of long-term debt | 36,492 | 1,286,473 | |||||
| Accrued interest on long-term debt | 114,382 | 83,451 | |||||
| Other accrued liabilities | 2,280,217 | 2,236,323 | |||||
| Liabilities related to assets held for sale | - | 539,828 | |||||
| Total current liabilities | 2,844,427 | 4,515,892 | |||||
| Deferred income taxes, net | 3,008,742 | 2,969,443 | |||||
| Long-term debt, net | 6,841,483 | 7,432,817 | |||||
| Operating lease liabilities | 25,145,321 | 25,149,299 | |||||
| Other long-term obligations | 470,495 | 256,282 | |||||
| Redeemable noncontrolling interests | 9,658 | 158,350 | |||||
| Stockholders' equity: | |||||||
| Common stock, $.01 par value: authorized 1,000,000,000 shares, | |||||||
| issued and outstanding 367,241,030 and 379,087,524 shares | 3,672 | 3,791 | |||||
| Capital in excess of par value | - | - | |||||
| Retained earnings | 4,799,178 | 4,794,239 | |||||
| Accumulated other comprehensive income | 36,808 | 33,499 | |||||
| Total MGM Resorts International stockholders' equity | 4,839,658 | 4,831,529 | |||||
| Noncontrolling interests | 382,445 | 378,594 | |||||
| Total stockholders' equity | 5,222,103 | 5,210,123 | |||||
| $ | 43,542,229 | $ | 45,692,206 | ||||
| MGM RESORTS INTERNATIONAL AND SUBSIDIARIES | ||||||
| SUPPLEMENTAL DATA - NET REVENUES | ||||||
| (In thousands) | ||||||
| (Unaudited) | ||||||
| Three Months Ended | ||||||
| March 31, | March 31, | |||||
| 2023 | 2022 | |||||
| Las Vegas Strip Resorts | $ | 2,176,152 | $ | 1,662,892 | ||
| Regional Operations | 945,843 | 890,829 | ||||
| MGM China | 617,592 | 268,375 | ||||
| Management and other operations | 133,709 | 32,213 | ||||
| $ | 3,873,296 | $ | 2,854,309 | |||
| MGM RESORTS INTERNATIONAL AND SUBSIDIARIES | ||||||
| SUPPLEMENTAL DATA - ADJUSTED PROPERTY EBITDAR and ADJUSTED EBITDAR | ||||||
| (In thousands) | ||||||
| (Unaudited) | ||||||
| Three Months Ended | ||||||
| March 31, | March 31, | |||||
| 2023 | 2022 | |||||
| Las Vegas Strip Resorts | $ | 835,809 | $ | 593,634 | ||
| Regional Operations | 313,175 | 313,279 | ||||
| MGM China | 168,948 | (25,656) | ||||
| Unconsolidated affiliates (1) | (77,694) | (88,484) | ||||
| Management and other operations | 529 | (3,601) | ||||
| Stock compensation | (23,890) | (23,344) | ||||
| Corporate (2) | (110,614) | (95,424) | ||||
| $ | 1,106,263 | |||||
| (1) Represents the Company's share of operating income (loss) excluding investments in real estate ventures, adjusted for the effect of certain basis differences. | ||||||
| (2) Three months ended March 31, 2023 includes amounts related to MGM China of $8 million, global development of $7 million, and transaction costs of $2 million. Three months ended March 31, 2022 includes amounts related to MGM China of $4 million, global development of $4 million, and transaction costs of $9 million. | ||||||
| MGM RESORTS INTERNATIONAL AND SUBSIDIARIES | ||||||
| RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO MGM RESORTS INTERNATIONAL TO ADJUSTED EBITDAR | ||||||
| (In thousands) | ||||||
| (Unaudited) | ||||||
| Three Months Ended | ||||||
| March 31, | March 31, | |||||
| 2023 | 2022 | |||||
| Net income (loss) attributable to MGM Resorts International | $ | 466,807 | $ | (18,016) | ||
| Plus: Net income (loss) attributable to noncontrolling interests | 13,076 | (16,777) | ||||
| Net income (loss) | 479,883 | (34,793) | ||||
| (Benefit) provision for income taxes | 165,779 | (36,341) | ||||
| Income (loss) before income taxes | 645,662 | (71,134) | ||||
| Non-operating (income) expense: | ||||||
| Interest expense, net of amounts capitalized | 130,300 | 196,091 | ||||
| Other, net | (45,123) | (19,169) | ||||
| 85,177 | 176,922 | |||||
| Operating income | 730,839 | 105,788 | ||||
| Preopening and start-up expenses | 139 | 434 | ||||
| Property transactions, net | (396,076) | 54,738 | ||||
| Depreciation and amortization | 203,501 | 288,638 | ||||
| Triple net operating lease and ground lease rent expense | 570,555 | 262,452 | ||||
| Income from unconsolidated affiliates related to real estate ventures | (2,695) | (41,646) | ||||
| Adjusted EBITDAR | $ | 1,106,263 | ||||
| MGM RESORTS INTERNATIONAL AND SUBSIDIARIES | |||||
| RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | |||||
| (In thousands) | |||||
| (Unaudited) | |||||
| Three Months Ended | |||||
| March 31, | |||||
| 2023 | |||||
| Net cash provided by operating activities | $ | 704,053 | |||
| Less: Capital expenditures | (139,820) | ||||
| Free Cash Flow | $ | 564,233 | |||
| MGM RESORTS INTERNATIONAL AND SUBSIDIARIES | |||||
| RECONCILIATIONS OF LAS VEGAS STRIP RESORTS NET REVENUES TO LAS VEGAS STRIP RESORTS SAME-STORE NET | |||||
| REVENUES AND LAS VEGAS STRIP RESORTS ADJUSTED PROPERTY EBITDAR TO LAS VEGAS STRIP RESORTS SAME-STORE ADJUSTED PROPERTY EBITDAR | |||||
| (In thousands) | |||||
| (Unaudited) | |||||
| Three Months Ended | |||||
| March 31, | March 31, | ||||
| 2023 | 2022 | ||||
| Las Vegas Strip Resorts net revenues | $ | 2,176,152 | $ | 1,662,892 | |
| Acquisitions (1) | (308,168) | - | |||
| Dispositions (2) | - | (127,797) | |||
| Las Vegas Strip Resorts same-store net revenues | $ | 1,867,984 | $ | 1,535,095 | |
| Las Vegas Strip Resorts Adjusted Property EBITDAR | $ | 835,809 | $ | 593,634 | |
| Acquisitions (1) | (129,854) | - | |||
| Dispositions (2) | - | (32,892) | |||
| Las Vegas Strip Resorts Same-Store Adjusted Property EBITDAR | $ | 705,955 | $ | 560,742 | |
| (1) Excludes the net revenues and Adjusted Property EBITDAR of The Cosmopolitan. | |||||
| (2) Excludes the net revenues and Adjusted Property EBITDAR of The Mirage. | |||||
| MGM RESORTS INTERNATIONAL AND SUBSIDIARIES | |||||
| RECONCILIATIONS OF REGIONAL OPERATIONS NET REVENUES TO REGIONAL OPERATIONS SAME-STORE NET REVENUES | |||||
| AND REGIONAL OPERATIONS ADJUSTED PROPERTY EBITDAR TO REGIONAL OPERATIONS SAME-STORE ADJUSTED PROPERTY EBITDAR | |||||
| (In thousands) | |||||
| (Unaudited) | |||||
| Three Months Ended | |||||
| March 31, | March 31, | ||||
| 2023 | 2022 | ||||
| Regional Operations net revenues | $ | 945,843 | $ | 890,829 | |
| Dispositions (1) | (26,967) | (58,073) | |||
| Regional Operations same-store net revenues | $ | 918,876 | $ | 832,756 | |
| Regional Operations Adjusted Property EBITDAR | $ | 313,175 | $ | 313,279 | |
| Dispositions (1) | (11,073) | (28,611) | |||
| Regional Operations Same-Store Adjusted Property EBITDAR | $ | 302,102 | $ | 284,668 | |
| (1) Excludes the net revenues and Adjusted Property EBITDAR of Gold Strike Tunica. | |||||
SOURCE MGM Resorts International