MGM Resorts International(MGM) - 2024 Q1 - Quarterly Report

Financial Performance - Consolidated net revenues increased by 13% to $4,383,470,000 for the three months ended March 31, 2024, compared to$3,873,296,000 in the prior year quarter, driven by a 71% increase at MGM China and a 4% increase at Las Vegas Strip Resorts[93]. - Operating income decreased by 37% to $458,378,000 for the three months ended March 31, 2024, compared to$730,839,000 in the prior year quarter, primarily due to a $398 million gain in the prior year related to the sale of Gold Strike Tunica[94]. - MGM China net revenues increased by 71$1,056,017,000 for the three months ended March 31, 2024, compared to $617,592,000 in the prior year quarter, mainly due to a 66$827,253,000 for the three months ended March 31, 2024, compared to $751,691,000 in the prior year quarter, attributed to an increase in average daily rate (ADR) due to the Super Bowl[98]. - Regional Operations net revenues decreased by 4$909,479,000 for the three months ended March 31, 2024, compared to $945,843,000 in the prior year quarter, primarily due to the disposition of Gold Strike Tunica[101]. - For the three months ended March 31, 2024, the company reported net income attributable to MGM Resorts International of$217.5 million, a decrease of 53.5% compared to $466.8 million in the same period of 2023[124]. - Adjusted EBITDAR for the three months ended March 31, 2024, was$1.23 billion, reflecting a significant decline from the previous year's $1.36 billion[124]. Revenue and Expenses - Cash provided by operating activities decreased to$549 million in Q1 2024 from $704 million in Q1 2023, primarily due to a decrease in working capital[129]. - Capital expenditures for the three months ended March 31, 2024, totaled$172 million, compared to $140 million in the same period of 2023[132][133]. - Corporate and other revenue increased to$162,945,000 for the three months ended March 31, 2024, compared to $133,709,000 in the prior year quarter, reflecting growth in LeoVegas and other corporate operations[106]. Tax and Debt Management - The effective income tax rate for the three months ended March 31, 2024, was 12.7$629 million in Q1 2024, a significant reduction from $2.4 billion in Q1 2023[134]. - The company made net repayments of debt totaling$77 million during the three months ended March 31, 2024, compared to $1.8 billion in the same period of 2023[135][136]. - The company amended its senior secured credit facility to increase it to$2.3 billion and extended the maturity date to February 2029[141]. - In April 2024, the company issued $750 million in senior notes due 2032, using the proceeds to redeem$750 million in senior notes due 2025[141]. Assets and Cash Flow - As of March 31, 2024, current assets were $3.4 billion, down from$3.8 billion as of December 31, 2023[128]. - As of March 31, 2024, the company had cash and cash equivalents of $2.7 billion, with$622 million held by MGM China, and total indebtedness of $6.3 billion[140]. - Expected cash interest payments over the next twelve months are approximately$345 million to $355 million on a consolidated basis, which includes MGM China[142]. - The company is required to make annual cash rent payments of$1.8 billion over the next twelve months under triple-net lease agreements[143]. Future Plans and Investments - Planned capital expenditures for the remainder of 2024 are expected to be approximately $675 million to$725 million domestically, and $150 million to$200 million at MGM China[145]. - The company is exploring a commercial gaming facility in New York, with an estimated project cost of approximately $2 billion, including a$500 million license fee[146]. - The company expects to fund its share of the Osaka IR KK development project in Japan, estimated at 306 billion yen (approximately $2.0 billion), over the next five years[146]. Shareholder Returns and Dividends - MGM China's Board of Directors declared a special dividend of$51 million for 2023, with the company receiving approximately $29 million[147]. - The company has suspended regular dividend payments to stockholders and may not resume them in the foreseeable future[154]. Risks and Challenges - Significant competition in destination travel locations and the impact of economic conditions on business operations are noted as risks[154]. - The company faces substantial indebtedness and financial commitments, which could adversely affect development options and financial results[154]. - The cybersecurity issue from September 2023 has raised concerns regarding operational impacts and potential legal proceedings[156]. - Future construction and expansion projects are subject to significant development and construction risks, which could impact operational success[155]. - The company emphasizes the importance of maintaining the integrity of information systems to protect customer data and avoid reputational harm[155].