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INCOME TAXES | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The Company recognizes deferred income tax assets, net of applicable reserves, related to net operating losses, tax credit carryforwards and certain temporary differences. The Company recognizes future tax benefits to the extent that realization of such benefit is more likely than not. Otherwise, a valuation allowance is applied. Income (loss) before income taxes for domestic and foreign operations consisted of the following:
|  | Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
|  | (In thousands)
Domestic operations |  | $ | 1,214,888 |  |  | $ | 4,251,418 |  |  | $ | 2,094,324 |
Foreign operations |  | 257,875 |  |  | (3,347,619) |  |  | (632,520) |
|  | $ | 1,472,763 |  |  | $ | 903,799 |  |  | $ | 1,461,804 |
The benefit (provision) for income taxes attributable to income (loss) before income taxes is as follows:
|  | Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
Federal: |  | (In thousands)
Current |  | $ | (259,128) |  |  | $ | (206,426) |  |  | $ | (8,984) |
Deferred (excluding separate components) |  | (48,363) |  |  | (678,371) |  |  | (189,657) |
Deferred – valuation allowance change |  | 153,768 |  |  | 5,346 |  |  | (14,967) |
Other noncurrent |  | 10,969 |  |  | 18,326 |  |  | (14,262) |
Provision for federal income taxes |  | (142,754) |  |  | (861,125) |  |  | (227,870) |
State: |  |  |  |  |  |
Current |  | (24,931) |  |  | (10,389) |  |  | 5 |
Deferred (excluding separate components) |  | 11,206 |  |  | (33,878) |  |  | (28,068) |
Deferred – operating loss carryforward |  | (12,219) |  |  | (15,442) |  |  | (27,936) |
Deferred – valuation allowance change |  | (2,140) |  |  | (2,345) |  |  | (601) |
Other noncurrent |  | — |  |  | — |  |  | 13,260 |
Provision for state income taxes |  | (28,084) |  |  | (62,054) |  |  | (43,340) |
Foreign: |  |  |  |  |  |
Current |  | 223 |  |  | (2,259) |  |  | (3,717) |
Deferred (excluding separate components) |  | 5,611 |  |  | 311,614 |  |  | 8,943 |
Deferred – operating loss carryforward |  | (57,485) |  |  | 6,331 |  |  | 5,793 |
Deferred – valuation allowance change |  | 64,650 |  |  | (89,575) |  |  | 6,776 |
Benefit for foreign income taxes |  | 12,999 |  |  | 226,111 |  |  | 17,795 |
|  | $ | (157,839) |  |  | $ | (697,068) |  |  | $ | (253,415) |
A reconciliation of the federal income tax statutory rate and the Company’s effective tax rate is as follows:
|  | Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
Federal income tax statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Noncontrolling interest |  | (0.1) |  |  | (2.4) |  |  | (3.2) |
Foreign income/losses taxed at other than U.S. statutory rate |  | (3.6) |  |  | 53.3 |  |  | 8.2 |
Federal valuation allowance |  | (10.4) |  |  | (0.6) |  |  | 1.0 |
State taxes, net |  | 1.5 |  |  | 5.5 |  |  | 2.3 |
Gain on consolidation of CityCenter, net |  | — |  |  | — |  |  | (10.1) |
General business credits |  | (1.2) |  |  | (1.5) |  |  | (0.3) |
Incremental U.S. tax on foreign earnings |  | 2.4 |  |  | — |  |  | — |
Permanent and other items |  | 1.1 |  |  | 1.8 |  |  | (1.6) |
|  | 10.7 | % |  | 77.1 | % |  | 17.3 | %
The tax-effected components of the Company’s net deferred tax liability are as follows:
|  | December 31,
|  | 2023 |  | 2022
Deferred tax assets – federal and state: |  | (In thousands)
Net operating loss carryforward |  | $ | 13,498 |  |  | $ | 23,151 |
Accruals, reserves and other |  | 52,854 |  |  | 9,481 |
Lease liabilities |  | 5,703,953 |  |  | 5,830,582 |
Tax credits |  | 1,788,001 |  |  | 2,764,266 |
|  | 7,558,306 |  |  | 8,627,480 |
Less: Valuation allowance |  | (1,598,291) |  |  | (2,641,770) |
|  | 5,960,015 |  |  | 5,985,710 |
Deferred tax assets – foreign: |  |  |  |
Net operating loss carryforward |  | 141,201 |  |  | 198,686 |
Accruals, reserves and other |  | 9,266 |  |  | 12,315 |
Property and equipment |  | 33,944 |  |  | 32,585 |
Lease liabilities |  | 1,270 |  |  | 1,219 |
|  | 185,681 |  |  | 244,805 |
Less: Valuation allowance |  | (180,155) |  |  | (244,805) |
|  | 5,526 |  |  | — |
Total deferred tax assets |  | $ | 5,965,541 |  |  | $ | 5,985,710 |
Deferred tax liabilities – federal and state: |  |  |  |
Property and equipment |  | $ | (389,854) |  |  | $ | (330,857) |
Investments in unconsolidated affiliates |  | (584,448) |  |  | (585,275) |
Investment in equity securities |  | (2,234,754) |  |  | (2,236,093) |
ROU assets |  | (5,390,561) |  |  | (5,612,241) |
Intangibles |  | (197,893) |  |  | (160,991) |
|  | (8,797,510) |  |  | (8,925,457) |
Deferred tax liabilities – foreign: |  |  |  |
Intangibles |  | (29,028) |  |  | (29,696) |
|  | (29,028) |  |  | (29,696) |
Total deferred tax liability |  | (8,826,538) |  |  | (8,955,153) |
Net deferred tax liability |  | $ | (2,860,997) |  |  | $ | (2,969,443) |
Deferred income tax valuation allowance consisted of the following:
|  | Balance at Beginning of Period |  | Increase |  | Decrease |  | Balance at End of Period
Deferred income tax valuation allowance: |  | (In thousands)
Year Ended December 31, 2023 |  | $ | 2,886,575 |  |  | $ | — |  |  | $ | (1,108,129) |  |  | $ | 1,778,446 |
Year Ended December 31, 2022 |  | 2,884,262 |  |  | 2,313 |  |  | — |  |  | 2,886,575 |
Year Ended December 31, 2021 |  | 2,875,595 |  |  | 8,667 |  |  | — |  |  | 2,884,262 |
The Company has recorded a valuation allowance of $1.6 billion on its foreign tax credit (“FTC”) carryover of $1.8 billion as of December 31, 2023, resulting in an FTC net deferred tax asset of approximately $200 million. The FTCs are attributable to the Macau Special Gaming Tax, which is 35% of gross gaming revenue in Macau. The Company believes payment of the Macau Special Gaming Tax qualifies as a tax paid in lieu of an income tax that is creditable against U.S. taxes. While the Company generally does not expect to generate new FTC carryovers after the year ended December 31, 2017, it will be able to utilize its existing FTC carryovers only to the extent it has active foreign source income during the applicable 10-year FTC carryforward period. Such foreign source income includes the recapture of overall domestic losses, which were fully utilized as of December 31, 2023. The Company relies on future U.S.-source operating income in assessing, future FTC realization during the applicable 10-year FTC carryover period. The FTC carryovers will expire if not utilized as follows: $780 million in 2024; $674 million in 2025; $134 million in 2026; and $200 million in 2027. The Company’s assessment of the realization of its FTC deferred tax asset is based on available evidence, including assumptions concerning future U.S. operating profits and foreign source income. As a result, significant judgment is required in assessing the possible need for a valuation allowance and changes to such assumptions could result in a material change in the valuation allowance with a corresponding impact on the provision for income taxes in the period including such change. Through the year ended December 31, 2022, MGM Grand Paradise was granted an extension of its exemption from the Macau 12% complementary tax on gaming profits (“Complementary Tax Exemption”). On January 29, 2024, MGM Grand Paradise was granted an extension of its Complementary Tax Exemption for the period of January 1, 2023 through December 31, 2027. The measurement of Macau deferred tax assets and liabilities as of December 31, 2023 was based on enacted law as of that date and assumed MGM Grand Paradise would pay the complementary tax on gaming profits for all periods beyond December 31, 2022. The impact of the retroactive Complementary Tax Exemption will be reflected in future periods. At December 31, 2023, gross foreign net operating loss carryforwards consisted primarily of a complementary tax net operating loss (“NOL”) carryforward of $1.1 billion at MGM Grand Paradise resulting from non-gaming operations that will expire if not utilized in years 2024 through 2026. The NOL carryforward is likely to increase by $0.4 billion as a result of the retroactive Complementary Tax Exemption. As of December 31, 2023, there is a $180 million valuation allowance on certain foreign deferred tax assets, which relates primarily to MGM Grand Paradise’s NOLs. The valuation allowance is likely to increase by approximately $50 million as a result of the retroactive Complementary Tax Exemption. The Company has gross NOLs in some of the states in which it operates that total $209 million as of December 31, 2023, which equates to deferred tax assets of $13 million after federal tax effect and before valuation allowance. The NOL carryforwards in most of the states will expire, if not utilized, between 2025 through 2042. Otherwise, the NOL carryforward can be carried forward indefinitely. The Company has provided a valuation allowance of $10 million on some of its state deferred tax assets for the NOLs described above. A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits is as follows:
|  | Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
|  | (In thousands)
Gross unrecognized tax benefits at January 1 |  | $ | 6,885 |  |  | $ | 19,568 |  |  | $ | 35,617 |
Gross increases - prior period tax positions |  | 710 |  |  | — |  |  | 12,949 |
Gross decreases - prior period tax positions |  | — |  |  | (12,968) |  |  | (13,388) |
Gross increases - current period tax positions |  | 996 |  |  | 285 |  |  | 654 |
Settlements with Taxing Authorities |  | — |  |  | — |  |  | (16,264) |
Gross unrecognized tax benefits at December 31 |  | $ | 8,591 |  |  | $ | 6,885 |  |  | $ | 19,568 |
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $9 million and $7 million at December 31, 2023 and 2022, respectively. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense, which were not material for each of the periods presented. The Company does not anticipate that the total amounts of unrecognized tax benefits at December 31, 2023 will change materially within the next twelve months. The Company files income tax returns in the U.S. federal jurisdiction, various state and local jurisdictions, and foreign jurisdictions, although the income taxes paid in foreign jurisdictions are not material. As of December 31, 2023, other than adjustments resulting from the federal and state income tax audits discussed herein, the federal, state, and local tax jurisdictions in which the Company files tax returns generally cannot assess tax with respect to years ended prior to 2019. However, NOLs generated or utilized in earlier years may be subject to adjustment. The Company's 2015 through 2019 U.S. consolidated federal income tax returns are currently under examination by the IRS. Such examination is expected to close during 2024, and the Company does not anticipate any material adjustments upon resolution of the examination. In 2022, the Company filed a complaint with the Michigan Court of Claims appealing some of the adjustments from the Michigan examination of tax years 2014 through 2018. In 2023, the state of Michigan commenced an examination of the Company's unitary income tax returns filed in the state for tax years 2019 through 2021. The Company does not anticipate any material adjustments upon resolution of these examinations.

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