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LEASES
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
LEASES LEASES
The Company leases real estate, land underlying certain of its properties, and various equipment under operating and, to a lesser extent, finance lease arrangements.

Real estate assets and land. The Company leases the real estate assets of its domestic resorts pursuant to triple-net lease agreements, which are classified as operating leases. The triple-net structure of the leases requires the Company to pay substantially all costs associated with each property, including real estate taxes, insurance, utilities and routine maintenance (with each lease obligating the Company to spend a specified percentage of net revenues at the properties on capital expenditures), in addition to the annual cash rent. Each of the leases also requires the Company to 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 6 months or 1 year of rent, as applicable to the circumstances, under the VICI lease, 1 year of rent under the Mandalay Bay and MGM Grand Las Vegas lease, the Aria and Vdara lease, and The Cosmopolitan lease, and 2 years of rent under the Bellagio lease. The Company was in compliance with its applicable covenants under its leases as of December 31, 2022.

Bellagio lease. The Company leases the real estate assets of Bellagio from Bellagio BREIT Venture. The Bellagio lease commenced November 15, 2019 and has an initial term of 30 years with two 10-year renewal periods, exercisable at the Company’s option, with a fixed 2% rent escalator for the first 10 years and, thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year, subject to a cap of 3% during the 11th through 20th years and 4% thereafter. Annual cash rent payments for the fourth lease year that commenced on December 1, 2022 increased to $260 million as a result of the 2% fixed annual escalator.

Mandalay Bay and MGM Grand Las Vegas lease. The Company leases the real estate assets of Mandalay Bay and MGM Grand Las Vegas from VICI BREIT Venture. The Mandalay Bay and MGM Grand Las Vegas lease commenced February 14, 2020 and has an initial term of 30 years with two 10-year renewal periods, exercisable at the Company’s option, with a fixed 2% rent escalator for the first 15 years and, thereafter, an escalator equal to the greater of 2% and the
CPI increase during the prior year, subject to a cap of 3%. Annual cash rent payments for the third lease year that commenced on March 1, 2022 increased to $304 million as a result of the 2% fixed annual escalator.

Aria and Vdara lease. The Company leases the real estate assets of Aria and Vdara from funds managed by Blackstone. The Aria and Vdara lease commenced September 28, 2021 and has an initial term of 30 years with three 10-year renewal periods, exercisable at the Company’s option, with a fixed 2% rent escalator for the first 15 years, and thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year, subject to a cap of 3%. Annual cash rent payments for the second lease year that commenced on October 1, 2022 increased to $219 million as a result of the 2% fixed annual escalator.

The VICI lease and ground subleases. The Company leases the real estate assets of Luxor, New York-New York, Park MGM, Excalibur, The Park, Gold Strike Tunica, MGM Grand Detroit, Beau Rivage, Borgata, Empire City, MGM National Harbor, MGM Northfield Park, and MGM Springfield from VICI. The VICI lease commenced April 29, 2022 and has an initial term of 25 years, with three 10-year renewal periods, exercisable at the Company’s option, with a fixed 2% rent escalator for the first 10 years, and thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year subject to a cap of 3%. Additionally, the VICI lease provides VICI with a right of first offer with respect to any further gaming development by the Company on the undeveloped land adjacent to Empire City, which VICI may exercise should the Company elect to sell the property. Annual cash rent payments for the first lease year that commenced on April 29, 2022 was $860 million. In December 2022, in connection with the sale of the operations of The Mirage, the VICI lease was amended to remove The Mirage and to reflect a $90 million reduction in annual cash rent. The modification resulted in a reassessment of the lease classification and remeasurement of the VICI lease, with the lease continuing to be accounted for as an operating lease and $1.3 billion of operating lease ROU and $1.3 billion lease liabilities allocable to The Mirage were derecognized (see Note 4). In February 2023, in connection with the sale of the operations of Gold Strike Tunica, the VICI lease was amended to remove Gold Strike Tunica and to reflect a $40 million reduction in annual cash rent. Refer to Note 4 for further discussion of the respective sales.

The Company is required to pay the rent payments under the ground leases of the Borgata, Beau Rivage, and National Harbor through the term of the VICI lease. The ground subleases of Beau Rivage and National Harbor are classified as operating leases and the ground sublease of Borgata is classified as a finance lease.

The Cosmopolitan lease. The Company leases the real estate assets of The Cosmopolitan from a subsidiary of BREIT. The Cosmopolitan lease commenced May 17, 2022 and has an initial term of 30 years with three 10-year renewal periods, exercisable at the Company’s option, with a fixed 2% rent escalator for the first 15 years, and thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year, subject to a cap of 3%. Annual cash rent payments for the first lease year that commenced on May 17, 2022 was $200 million.

MGM China land concessions. MGM Grand Paradise has MGM Macau and MGM Cotai land concession contracts with the government of Macau, each with an initial 25-year contract term ending in April 2031 and January 2038, respectively, with a right to renew for further consecutive periods of 10 years, at MGM Grand Paradise’s option. The land leases are classified as operating leases.

Components of lease costs and other information related to the Company’s leases are:
 
Year Ended December 31,
 2022 20212020
 (In thousands)
Operating lease cost, primarily classified within “General and administrative”(1)
$1,986,853 $870,779 $751,002 
 
Finance lease costs
Interest expense(2)
$9,233 $2,354 $(21,320)
Amortization expense76,039 73,475 70,476 
Total finance lease costs$85,272 $75,829 $49,156 
(1)The Bellagio lease is held with a related party, as further discussed in Note 18. Operating lease cost includes $331 million for each of the years ended December 31, 2022, 2021, and 2020, related to the Bellagio lease.
(2)For the years ended December 31, 2021 and 2020, interest expense includes the effect of COVID-19 related rent concessions, which was recognized as negative variable rent expense.
 December 31,
 20222021
(In thousands)
Operating leases  
Operating lease ROU assets, net(1)
$24,530,929$11,492,805
Operating lease liabilities - current, classified within “Other accrued liabilities”
$53,981$31,706
Operating lease liabilities - long-term(2)
25,149,29911,802,464
Total operating lease liabilities$25,203,280$11,834,170
 
Finance leases
Finance lease ROU assets, net, classified within “Property and equipment, net”
$150,571$151,909
Finance lease liabilities - current, classified within "Other accrued liabilities"
$72,420$87,665
Finance lease liabilities - long-term, classified within “Other long-term obligations”
88,18175,560
Total finance lease liabilities$160,601$163,225
 
Weighted average remaining lease term (years)
Operating leases2629
Finance leases142
 
Weighted average discount rate (%)
Operating leases7 7 
Finance leases5 3 
(1)As of December 31, 2022 and 2021, operating lease right-of-use assets, net included $3.5 billion and $3.6 billion related to the Bellagio lease, respectively.
(2)As of December 31, 2022 and 2021, operating lease liabilities – long-term included $3.8 billion related to the Bellagio lease for each of the respective periods.

 
Year Ended December 31,
 2022 20212020
Cash paid for amounts included in the measurement of lease liabilities(In thousands)
Operating cash outflows from operating leases$1,535,637 $669,681 $572,186 
Operating cash outflows from finance leases6,654 4,761 2,956 
Financing cash outflows from finance leases(1)
84,139 73,257 34,494 
 
ROU assets obtained in exchange for new lease liabilities
Operating leases$15,538,208 $3,388,120 $4,120,955 
Finance leases87,856 24,433 177,085 
(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)
2023$1,795,625 $78,710 
20241,825,986 8,763 
20251,856,204 8,258 
20261,883,099 7,021 
2027839,326 6,992 
Thereafter51,965,868 135,187 
Total future minimum lease payments60,166,108 244,931 
Less: Amount of lease payments representing interest(34,962,828)(84,330)
Present value of future minimum lease payments25,203,280 160,601 
Less: Current portion(53,981)(72,420)
Long-term portion of lease liabilities$25,149,299 $88,181 
LEASES LEASES
The Company leases real estate, land underlying certain of its properties, and various equipment under operating and, to a lesser extent, finance lease arrangements.

Real estate assets and land. The Company leases the real estate assets of its domestic resorts pursuant to triple-net lease agreements, which are classified as operating leases. The triple-net structure of the leases requires the Company to pay substantially all costs associated with each property, including real estate taxes, insurance, utilities and routine maintenance (with each lease obligating the Company to spend a specified percentage of net revenues at the properties on capital expenditures), in addition to the annual cash rent. Each of the leases also requires the Company to 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 6 months or 1 year of rent, as applicable to the circumstances, under the VICI lease, 1 year of rent under the Mandalay Bay and MGM Grand Las Vegas lease, the Aria and Vdara lease, and The Cosmopolitan lease, and 2 years of rent under the Bellagio lease. The Company was in compliance with its applicable covenants under its leases as of December 31, 2022.

Bellagio lease. The Company leases the real estate assets of Bellagio from Bellagio BREIT Venture. The Bellagio lease commenced November 15, 2019 and has an initial term of 30 years with two 10-year renewal periods, exercisable at the Company’s option, with a fixed 2% rent escalator for the first 10 years and, thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year, subject to a cap of 3% during the 11th through 20th years and 4% thereafter. Annual cash rent payments for the fourth lease year that commenced on December 1, 2022 increased to $260 million as a result of the 2% fixed annual escalator.

Mandalay Bay and MGM Grand Las Vegas lease. The Company leases the real estate assets of Mandalay Bay and MGM Grand Las Vegas from VICI BREIT Venture. The Mandalay Bay and MGM Grand Las Vegas lease commenced February 14, 2020 and has an initial term of 30 years with two 10-year renewal periods, exercisable at the Company’s option, with a fixed 2% rent escalator for the first 15 years and, thereafter, an escalator equal to the greater of 2% and the
CPI increase during the prior year, subject to a cap of 3%. Annual cash rent payments for the third lease year that commenced on March 1, 2022 increased to $304 million as a result of the 2% fixed annual escalator.

Aria and Vdara lease. The Company leases the real estate assets of Aria and Vdara from funds managed by Blackstone. The Aria and Vdara lease commenced September 28, 2021 and has an initial term of 30 years with three 10-year renewal periods, exercisable at the Company’s option, with a fixed 2% rent escalator for the first 15 years, and thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year, subject to a cap of 3%. Annual cash rent payments for the second lease year that commenced on October 1, 2022 increased to $219 million as a result of the 2% fixed annual escalator.

The VICI lease and ground subleases. The Company leases the real estate assets of Luxor, New York-New York, Park MGM, Excalibur, The Park, Gold Strike Tunica, MGM Grand Detroit, Beau Rivage, Borgata, Empire City, MGM National Harbor, MGM Northfield Park, and MGM Springfield from VICI. The VICI lease commenced April 29, 2022 and has an initial term of 25 years, with three 10-year renewal periods, exercisable at the Company’s option, with a fixed 2% rent escalator for the first 10 years, and thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year subject to a cap of 3%. Additionally, the VICI lease provides VICI with a right of first offer with respect to any further gaming development by the Company on the undeveloped land adjacent to Empire City, which VICI may exercise should the Company elect to sell the property. Annual cash rent payments for the first lease year that commenced on April 29, 2022 was $860 million. In December 2022, in connection with the sale of the operations of The Mirage, the VICI lease was amended to remove The Mirage and to reflect a $90 million reduction in annual cash rent. The modification resulted in a reassessment of the lease classification and remeasurement of the VICI lease, with the lease continuing to be accounted for as an operating lease and $1.3 billion of operating lease ROU and $1.3 billion lease liabilities allocable to The Mirage were derecognized (see Note 4). In February 2023, in connection with the sale of the operations of Gold Strike Tunica, the VICI lease was amended to remove Gold Strike Tunica and to reflect a $40 million reduction in annual cash rent. Refer to Note 4 for further discussion of the respective sales.

The Company is required to pay the rent payments under the ground leases of the Borgata, Beau Rivage, and National Harbor through the term of the VICI lease. The ground subleases of Beau Rivage and National Harbor are classified as operating leases and the ground sublease of Borgata is classified as a finance lease.

The Cosmopolitan lease. The Company leases the real estate assets of The Cosmopolitan from a subsidiary of BREIT. The Cosmopolitan lease commenced May 17, 2022 and has an initial term of 30 years with three 10-year renewal periods, exercisable at the Company’s option, with a fixed 2% rent escalator for the first 15 years, and thereafter, an escalator equal to the greater of 2% and the CPI increase during the prior year, subject to a cap of 3%. Annual cash rent payments for the first lease year that commenced on May 17, 2022 was $200 million.

MGM China land concessions. MGM Grand Paradise has MGM Macau and MGM Cotai land concession contracts with the government of Macau, each with an initial 25-year contract term ending in April 2031 and January 2038, respectively, with a right to renew for further consecutive periods of 10 years, at MGM Grand Paradise’s option. The land leases are classified as operating leases.

Components of lease costs and other information related to the Company’s leases are:
 
Year Ended December 31,
 2022 20212020
 (In thousands)
Operating lease cost, primarily classified within “General and administrative”(1)
$1,986,853 $870,779 $751,002 
 
Finance lease costs
Interest expense(2)
$9,233 $2,354 $(21,320)
Amortization expense76,039 73,475 70,476 
Total finance lease costs$85,272 $75,829 $49,156 
(1)The Bellagio lease is held with a related party, as further discussed in Note 18. Operating lease cost includes $331 million for each of the years ended December 31, 2022, 2021, and 2020, related to the Bellagio lease.
(2)For the years ended December 31, 2021 and 2020, interest expense includes the effect of COVID-19 related rent concessions, which was recognized as negative variable rent expense.
 December 31,
 20222021
(In thousands)
Operating leases  
Operating lease ROU assets, net(1)
$24,530,929$11,492,805
Operating lease liabilities - current, classified within “Other accrued liabilities”
$53,981$31,706
Operating lease liabilities - long-term(2)
25,149,29911,802,464
Total operating lease liabilities$25,203,280$11,834,170
 
Finance leases
Finance lease ROU assets, net, classified within “Property and equipment, net”
$150,571$151,909
Finance lease liabilities - current, classified within "Other accrued liabilities"
$72,420$87,665
Finance lease liabilities - long-term, classified within “Other long-term obligations”
88,18175,560
Total finance lease liabilities$160,601$163,225
 
Weighted average remaining lease term (years)
Operating leases2629
Finance leases142
 
Weighted average discount rate (%)
Operating leases7 7 
Finance leases5 3 
(1)As of December 31, 2022 and 2021, operating lease right-of-use assets, net included $3.5 billion and $3.6 billion related to the Bellagio lease, respectively.
(2)As of December 31, 2022 and 2021, operating lease liabilities – long-term included $3.8 billion related to the Bellagio lease for each of the respective periods.

 
Year Ended December 31,
 2022 20212020
Cash paid for amounts included in the measurement of lease liabilities(In thousands)
Operating cash outflows from operating leases$1,535,637 $669,681 $572,186 
Operating cash outflows from finance leases6,654 4,761 2,956 
Financing cash outflows from finance leases(1)
84,139 73,257 34,494 
 
ROU assets obtained in exchange for new lease liabilities
Operating leases$15,538,208 $3,388,120 $4,120,955 
Finance leases87,856 24,433 177,085 
(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)
2023$1,795,625 $78,710 
20241,825,986 8,763 
20251,856,204 8,258 
20261,883,099 7,021 
2027839,326 6,992 
Thereafter51,965,868 135,187 
Total future minimum lease payments60,166,108 244,931 
Less: Amount of lease payments representing interest(34,962,828)(84,330)
Present value of future minimum lease payments25,203,280 160,601 
Less: Current portion(53,981)(72,420)
Long-term portion of lease liabilities$25,149,299 $88,181