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MGM Resorts To Significantly Cut Expenses To Reduce COVID-19 Impact

MGM Resorts International (MGM) said it is undertaking a thorough review to significantly minimize domestic property level operating expenses, through the implementation of hiring freezes, furloughs and other headcount reductions. The company is also actively reviewing its fixed property level operating expenses and corporate expenses. MGM Resorts is also evaluating all capital spend projects and expects to defer at least 33% of planned 2020 domestic capital expenditures.

Since March 16, 2020, all of the company's domestic properties have been temporarily closed to the public. The company has experienced very high group cancellations. While the company's Macau properties are now open, visitation remains at low levels.

For the first two months of 2020: consolidated net income attributable to MGM Resorts was approximately $1.3 billion, up significantly from approximately $27 million, a year ago. This was primarily driven by an approximately $1.5 billion pre-tax gain related to the MGM Grand/Mandalay real estate transaction. Consolidated net revenues were down 10% for the period.

As of March 26, 2020, the company, excluding MGM China and MGM Growth Properties LLC, had operating cash and cash investment balances of approximately $3.9 billion, including approximately $1.5 billion drawn under its revolving credit facility. MGM Resorts Domestic Operations has no debt maturing prior to 2022.

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