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LEASES
 6 Months Ended
Jun. 30, 2023
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 properties 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 June 30, 2023.

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 subsidiaries of VICI. 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 fourth lease year that commenced on March 1, 2023 increased to $310 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 The Blackstone Group, Inc. 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, 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, thereby reducing the annual cash rent payments to $770 million. 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, thereby reducing the annual cash rent payments to $730 million. 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 $507 million of net operating lease ROU and $516 million of lease liabilities allocable to Gold Strike Tunica were derecognized (see Note 3). Annual cash rent payments for the second lease year that commenced on May 1, 2023 increased to $745 million as a result of the 2% fixed annual escalator.

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 Blackstone Real Estate Investment Trust, Inc. 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 second lease year that commenced on June 1, 2023 was $204 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.

Other information. Components of lease costs and other information related to the Company’s leases are:
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2023202220232022
 (In thousands)
Operating lease cost, primarily classified within “General and administrative”(1)
$575,472 $488,987 $1,156,460 $760,836 
Finance lease costs
Interest expense$3,107 $1,811 $4,521 $2,704 
Amortization expense17,313 19,493 34,839 39,650 
Total finance lease costs$20,420 $21,304 $39,360 $42,354 
(1)Operating lease cost includes $83 million for each of the three months ended June 30, 2023 and 2022 and $166 million for each of the six months ended June 30, 2023 and 2022 related to the Bellagio lease, which is held with a related party.

 June 30,
2023		December 31,
2022
(In thousands)
Operating leases
Operating lease ROU assets, net(1)
$24,276,784 $24,530,929 
Operating lease liabilities - current, classified within “Other accrued liabilities”
$63,281 $53,981 
Operating lease liabilities - long-term(2)
25,136,719 25,149,299 
Total operating lease liabilities$25,200,000 $25,203,280 
Finance leases
Finance lease ROU assets, net classified within “Property and equipment, net”
$116,239 $150,571 
Finance lease liabilities - current, classified within “Other accrued liabilities”
$41,124 $72,420 
Finance lease liabilities - long-term, classified within “Other long-term obligations”
87,296 88,181 
Total finance lease liabilities$128,420 $160,601 
Weighted average remaining lease term (years)
Operating leases2626
Finance leases1714
Weighted average discount rate (%)
Operating leases7 7 
Finance leases6 5 
(1)As of June 30, 2023 and December 31, 2022, operating lease right-of-use assets, net included $3.5 billion related to the Bellagio lease.
(2)As of June 30, 2023 and December 31, 2022, operating lease liabilities – long-term included $3.8 billion related to the Bellagio lease.
 Six Months Ended
June 30,
 20232022
Cash paid for amounts included in the measurement of lease liabilities(In thousands)
Operating cash outflows from operating leases$904,726 $588,690 
Operating cash outflows from finance leases3,395 2,686 
Financing cash outflows from finance leases(1)
34,773 43,628 
ROU assets obtained in exchange for new lease liabilities
Operating leases$11,245 $15,528,718 
Finance leases518 87,840 
(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 (excluding the six months ended June 30, 2023)$899,947 $42,714 
20241,829,804 8,881 
20251,858,056 8,379 
20261,884,704 7,144 
2027839,670 7,116 
Thereafter51,958,061 135,230 
Total future minimum lease payments59,270,242 209,464 
Less: Amount of lease payments representing interest(34,070,242)(81,044)
Present value of future minimum lease payments25,200,000 128,420 
Less: Current portion(63,281)(41,124)
Long-term portion of lease liabilities$25,136,719 $87,296