MGM Resorts International (MGM) is a global entertainment company. Its national and international locations provide hotels and casinos, meeting and conference spaces, live and theatrical entertainment, and a broad range of restaurant, nightlife, and retail services. The company’s resort and casino properties are located in Las Vegas, various other cities throughout the U.S., and two locations in the Chinese special administrative region of Macau.

MGM competes with other entertainment companies as well as companies operating within the travel and tourism industry. Competitors include casinos, resorts, and hotels. Some of the company’s biggest rivals are Caesars Entertainment Inc. (CZR), Las Vegas Sands Corp. (LVS), Marriott International Inc. (MAR), Wynn Resorts Ltd. (WYNN), and Hilton Worldwide Holdings Inc. (HLT).

MGM’s Financials

MGM announced in early August financial results for Q2 of its 2021 fiscal year (FY), the three-month period ended June 30, 2021. The company reported net income attributable to its shareholders of $104.8 million, a significant improvement from the net loss of $857.3 million reported in the year-ago quarter. Revenue rose 682.6% year over year (YOY) to $2.3 billion. Casino revenue comprised the largest share of total revenue at 59%, while rooms, food and beverage, entertainment, retail, and other, and reimbursed costs comprised the remaining 41%.

MGM reports adjusted property EBITDAR as its GAAP earnings measure for its three reportable segments. EBITDAR is generally defined as earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs. MGM’s definition of EBITDAR includes preopening and start-up expenses, gains on REIT transactions, accelerated stock compensation expense, and certain consulting fees. MGM’s consolidated adjusted property EBITDAR improved to $723.7 million in Q2 compared to -$332.8 million in the year-ago quarter.

MGM has rebounded from the worst effects of the COVID-19 pandemic last year. That’s reflected in the shift from a net loss in the same quarter a year ago to net income in the most recent quarter, as well as rapid revenue expansion. The company temporarily closed all of its U.S. properties in March 2020 in response to government restrictions imposed to limit the spread of the coronavirus. Those properties gradually reopened throughout the second and third quarters of 2020, but in a limited capacity. Easing of restrictions through the first half of 2021 have allowed MGM to increase capacity and occupancy limits.

MGM’s properties in Macau were temporarily closed for several weeks in February 2020. In early August 2020, four new COVID-19 cases reported in Macau prompted the government to cancel certain events and close certain entertainment and leisure facilities, but hotel operations were allowed to remain open.

MGM’s Business Segments

MGM Resorts operates three reportable segments: Las Vegas Strip Resorts; Regional Operations; and MGM China. It provides a breakdown of revenue and adjusted property EBITDAR for each of its segments. The company generated $96.5 million in corporate and other revenue in Q2 FY 2021 that is not attributable to any of its business segments. Excluding this corporate and other revenue, total revenue for the three business segments was $2.2 billion. This amount was used to calculate the percentages below and in the pie charts above.

Las Vegas Strip Resorts

MGM’s Las Vegas Strip Resorts segment includes the following casino resorts: Bellagio; MGM Grand Las Vegas; Mandalay Bay; The Mirage; Luxor; New York-New York; Excalibur; and Park MGM. The segment’s revenue rose 566.1% to $1.0 billion in Q2 FY 2021, comprising about 46% of total revenue across all segments. Adjusted property EBITDAR was $396.8 million compared to -$104.4 million in the year-ago quarter. It accounted for nearly 55% of the total.

Regional Operations

The Regional Operations segment includes the following casino resorts: MGM Grand Detroit in Michigan; Beau Rivage in Mississippi; Gold Strike Tunica in Mississippi; Borgata in New Jersey; MGM National Harbor in Maryland; MGM Springfield in Massachusetts; Empire City in New York; and MGM Northfield Park in Ohio. In Q2 FY 2021, the segment’s revenue grew 859.3% YOY to $856.3 million, accounting for 39% of total segment revenue. Adjusted property EBITDAR improved to $318.3 million compared to -$112.1 million in the year-ago quarter. It accounted for about 44% of the total.

MGM China

The MGM China segment includes MGM Macau and MGM Cotai. The segment’s revenue expanded 835.7% YOY to $310.6 million in Q2 FY 2021, comprising 14% of total segment revenue. Adjusted property EBITDAR for the quarter was $8.6 million, an improvement from -$116.3 million posted in the year-ago quarter. It accounted for about 1% of adjusted property EBITDAR across all segments.

MGM’s Recent Developments

On Sept. 28, 2021, MGM Resorts announced that it completed its previously announced acquisition of Infinity World Development Corp.’s 50% interest in CityCenter Holdings LLC for approximately $2.1 billion. In the same announcement, MGM said that it closed the previously announced sale-leaseback agreement with Blackstone Inc. (BX) whereby Blackstone will acquire the real estate assets of Aria and Vdara for approximately $3.9 billion.

On Sept. 27, 2021, MGM Resorts announced that it agreed to acquire the operations of The Cosmopolitan of Las Vegas for approximately $1.6 billion from Blackstone. The Cosmopolitan is a luxury resort and casino located on the Las Vegas Strip. Following the close of the transaction, MGM Resorts will enter into a 30-year lease agreement with a partnership between Stonepeak Partners, Cherng Family Trust, and Blackstone Real Estate Income Trust Inc., which will acquire the real estate assets of The Cosmopolitan. The transaction is expected to close during the first half of 2022.