LEASES

3 Months Ended

Mar. 31, 2022

The Company leases the land underlying certain of its properties, real estate, and various equipment under operating and, to a lesser extent, finance lease arrangements. The MGP master lease, which is further discussed in Note 12, eliminates in consolidation and, accordingly, is not included within the disclosures below.

Land. As of March 31, 2022, the Company, through MGP, was a lessee of land underlying MGM National Harbor and a portion of the land underlying Borgata and Beau Rivage. MGP was obligated to make lease payments through the non-cancelable term of the ground leases, which is through 2051 for Beau Rivage, through 2070 for Borgata, and through 2082 for MGM National Harbor. Refer to Note 1 for discussion of the VICI Transaction.

Additionally, MGM Grand Paradise has MGM Macau and MGM Cotai land concession contracts, each with an initial 25-year contract term ending in April 2031 and January 2038, respectively. The land leases are classified as operating leases.

Real estate assets. The Company leases the real estate assets of Bellagio, Mandalay Bay, MGM Grand Las Vegas, and Aria (including Vdara) pursuant to triple-net lease agreements, which are classified as operating leases. Each of the leases obligates the Company to spend a specified percentage of net revenues at the properties on capital expenditures and that the Company comply with certain financial covenants, which, if not met, would require the Company to maintain cash security or provide one or more letters of credit in favor of the landlord in an amount equal to 1 year of rent under the Mandalay Bay and MGM Grand Las Vegas lease and Aria lease and 2 years of rent under the Bellagio lease. The Company was in compliance with its applicable covenants under its leases as of March 31, 2022.

Other information. Components of lease costs and other information related to the Company’s leases was:


	Three Months Ended March 31,
	2022		2021
	(In thousands)
Operating lease cost, primarily classified within "General and administrative"(1)	$	271,849	$	198,991

Finance lease costs
Interest expense(2)	$	893	$	(656)
Amortization expense	20,157		17,814
Total finance lease costs	$	21,050	$	17,158

(1)The Bellagio lease and the Mandalay Bay and MGM Grand Las Vegas lease are held with related parties, as further discussed in Note 12. Operating lease cost includes $83 million for each of the three months ended March 31, 2022 and 2021 related to the Bellagio lease. Operating lease cost includes $99 million for each of the three months ended March 31, 2022 and 2021 related to the Mandalay Bay and MGM Grand Las Vegas lease.

(2)For the three months ended March 31, 2021, interest expense includes the effect of COVID-19 related rent concessions which was recognized as negative variable rent expense.


	March 31, 2022		December 31, 2021
Supplemental balance sheet information	(In thousands)
Operating leases
Operating lease right-of-use assets, net(1)	$	11,438,442	$	11,492,805
Operating lease liabilities - current, classified within "Other accrued liabilities"	$	31,806	$	31,706
Operating lease liabilities - long-term(2)	11,810,047		11,802,464
Total operating lease liabilities	$	11,841,853	$	11,834,170

Finance leases
Finance lease right-of-use assets, net classified within "Property and equipment, net"	$	131,739	$	151,909
Finance lease liabilities - current, classified within "Other accrued liabilities"	$	82,975	$	87,665
Finance lease liabilities - long-term, classified within "Other long-term obligations"	57,534		75,560
Total finance lease liabilities	$	140,509	$	163,225

Weighted-average remaining lease term (years)
Operating leases	29		29
Finance leases	2		2

Weighted-average discount rate (%)
Operating leases	7		7
Finance leases	3		3

(1)As of March 31, 2022 and December 31, 2021, operating lease right-of-use assets, net included $3.6 billion related to the Bellagio lease for each of the respective periods, and $3.9 billion and $4.0 billion related to the Mandalay Bay and MGM Grand Las Vegas lease, respectively.

(2)As of March 31, 2022 and December 31, 2021, operating lease liabilities – long-term included $3.8 billion related to the Bellagio lease for each of the respective periods, and $4.2 billion related to the Mandalay Bay and MGM Grand Las Vegas lease for each of the respective periods.


	Three Months Ended March 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities	(In thousands)
Operating cash outflows from operating leases	$	211,326	$	154,504
Operating cash outflows from finance leases	945		1,456
Financing cash outflows from finance leases(1)	22,649		19,269

ROU assets obtained in exchange for new lease liabilities
Operating leases	$	4,480	$	—
Finance leases	—		—

(1)Included within “Other” within “Cash flows from financing activities” on the consolidated statements of cash flows.

Maturities of lease liabilities were as follows:


	Operating Leases		Finance Leases
Year ending December 31,	(In thousands)
2022 (excluding the three months ended March 31, 2022)	$	628,471	$	66,982
2023	852,445		73,564
2024	864,857		1,742
2025	876,986		1,250
2026	886,720		24
Thereafter	26,660,240		—
Total future minimum lease payments	30,769,719		143,562
Less: Amount of lease payments representing interest	(18,927,866)		(3,053)
Present value of future minimum lease payments	11,841,853		140,509
Less: Current portion	(31,806)		(82,975)
Long-term portion of lease liabilities	$	11,810,047	$	57,534