Executive Overview

Our primary business is the ownership and operation of casino resorts, which includes offering gaming, hotel, convention, dining, entertainment, retail and other resort amenities. We believe that we own and invest in several of the premier casino resorts in the world and have continually reinvested in our resorts to maintain our competitive advantage. Most of our revenue is cash-based, through customers wagering with cash or paying for non-gaming services with cash or credit cards. We rely heavily on the ability of our resorts to generate operating cash flow to repay debt financings, fund capital expenditures and provide excess cash flow for future development. We have historically made significant investments in our resorts through the addition of new restaurants, entertainment, nightlife offerings as well as other new features and amenities. In addition, we have made regular capital investments to maintain the quality of our hotel rooms and public spaces.

Cash flows generated by our wholly-owned domestic resorts in 2012 improved compared to 2011 and 2010 and we expect that trend to continue in 2013 despite continued economic uncertainty. Visitation to Las Vegas was up 2% in 2012 and room inventory has peaked with limited new rooms supply planned in the near term.

In Macau, cash flows from operations improved significantly in 2012 led by strong gaming volumes. Despite continued concerns about economic instability in China and the implementation of new smoking restrictions in Macau, we expect the Macau market to continue to grow. In 2012, the pace of growth slowed down, but casino revenues for the Macau market still grew 14% over 2011 with a significant increase in main floor volumes.

Our results of operations are also affected by decisions we make related to our capital allocation, our access to capital and our cost of capital. During 2012, we executed a number of transactions which have greatly improved our cost of capital, extended our debt maturities and provided capital for future growth projects. See "Principal Debt Arrangements" for further discussion of our debt agreements and related covenants and "Contractual Obligations" for debt maturities and interest obligations as of December 31, 2012. In 2012, we completed the following transactions:

º •
º In January, we issued $850 million of 8.625% senior notes due 2019 for net proceeds of approximately $836 million; º •
º In February, we amended and restated our senior credit facility, which reduced LIBOR spread and LIBOR floor for extending loans, as well as extended maturities to 2015; º •
º In March, MGM China Limited ("MGM China") paid an approximately $400 million dividend, of which we received approximately $204 million and approximately $196 million was distributed to noncontrolling interests; º •
º Also in March, we issued $1.0 billion of 7.75% senior notes due 2022 for net proceeds of approximately $986 million; º •
º In September, we issued $1.0 billion of 6.75% senior notes due 2020 for net proceeds of approximately $986 million; º •
º In October, MGM China and MGM Grand Paradise, S.A. ("MGM Grand Paradise") as co-borrowers, amended and extended their credit facility and increased the facility's capacity to $2.0 billion, which will be used for the development of the proposed Cotai resort and for general corporate purposes; and º •
º In December, we completed a transaction which included the amendment and restatement of our senior credit facility, which increased its capacity to $4.0 billion and extended its maturity, and the issuance of $1.25 billion of 6.625% senior notes due 2021 for net proceeds of approximately $1.23 billion. We used the proceeds from these transactions, together with cash on hand, to complete the tender offers and redemption and satisfaction and discharge of all of our outstanding

In addition, in February 2013, MGM China's Board of Directors declared a special dividend of approximately $500 million which will be paid to shareholders of record as of March 11, 2013, and distributed on or about March 18, 2013. We will receive approximately $255 million, representing 51% of such dividend.

While we are focused on continuing to improve our financial position and lower our interest costs, we are also dedicated to capitalizing on development opportunities. In Macau, we plan to spend approximately $2.6 billion, excluding land and capitalized interest, to develop a resort and casino featuring approximately 1,600 hotel rooms, 500 gaming tables, and 2,500 slots built on an approximately 17.8 acre site in Cotai, Macau. In addition, we have been actively pursuing development opportunities in markets such as Maryland, Massachusetts and Toronto.

We have two reportable segments that are based on the regions in which we operate: wholly owned domestic resorts and MGM China. We currently operate 15 wholly owned resorts in the United States. MGM China's operations consist of the MGM Macau resort and casino ("MGM Macau") and the potential development of a gaming resort in Cotai. We have additional business activities including investments in unconsolidated affiliates, our MGM Hospitality operations and certain other corporate and management operations. CityCenter is our most significant unconsolidated affiliate, which we also manage for a fee. Our operations that are not segregated into separate reportable segments are reported as "corporate and other" operations in our reconciliations of segment results to consolidated results.

Wholly owned domestic resorts. At December 31, 2012, our wholly owned domestic resorts consisted of the following casino resorts:

  Las Vegas,    Bellagio, MGM Grand Las Vegas (including The Signature), Mandalay
  Nevada:       Bay, The Mirage, Luxor, New York-New York, Excalibur, Monte Carlo
                and Circus Circus Las Vegas.
  Other:        MGM Grand Detroit in Detroit, Michigan; Beau Rivage in Biloxi,
                Mississippi; Gold Strike Tunica in Tunica, Mississippi; Circus
                Circus Reno in Reno, Nevada; Gold Strike in Jean, Nevada; and
                Railroad Pass in Henderson, Nevada.

Over half of the net revenue from our wholly owned domestic resorts is derived from non-gaming operations including hotel, food and beverage, entertainment and other non-gaming amenities. We utilize our significant convention and meeting facilities to maximize hotel occupancy and customer volumes during off-peak times such as mid-week or during traditionally slower leisure travel periods, which also leads to better labor utilization. Our operating results are highly dependent on the volume of customers at our resorts, which in turn affects the price we can charge for our hotel rooms and other amenities. We market to different customer groups to manage our hotel occupancy, such as targeting large conventions to increase mid-week occupancy. As a result of our leveraged business model, our operating results are significantly affected by our ability to generate operating revenues. Also, we generate a significant portion of our revenue from our wholly owned domestic resorts in Las Vegas, Nevada, which exposes us to certain risks, such as increased competition from new or expanded Las Vegas resorts, and from the expansion of gaming in the United States generally.

º •
º Gaming revenue indicators: table games drop and slots handle (volume indicators); "win" or "hold" percentage, which is not fully controllable by us. Our normal table games hold percentage is in the range of 19% to 22% of table games drop and our normal slots hold percentage is in the range of 7.5% to 8.5% of slots handle; and º •
º Hotel revenue indicators - hotel occupancy (a volume indicator); average daily rate ("ADR," a price indicator); and revenue per available room ("REVPAR," a summary measure of hotel results, combining ADR and occupancy rate). Our calculation of ADR, which is the average price of occupied rooms per day, includes the impact of complimentary rooms. Complimentary room rates are determined based on an analysis of retail or "cash" rates for each customer segment and each type of room product to estimate complimentary rates which are consistent with retail rates. Complimentary rates are reviewed at least annually and on an interim basis if there are significant changes in market conditions. Because the mix of rooms provided on a complimentary basis, particularly to casino customers, includes a disproportionate suite component, the composite ADR including complimentary rooms is slightly higher than the ADR for cash rooms, reflecting the higher retail value of suites.

MGM China. On June 3, 2011, we and Ms. Ho, Pansy Catilina Chiu King ("Ms. Pansy Ho") completed a reorganization of the capital structure and the initial public offering of 760 million shares of MGM China on The Stock Exchange of Hong Kong Limited (the "IPO"), representing 20% of the post issuance base capital stock of MGM China, at an offer price of HKD 15.34 per share. Pursuant to this reorganization, we acquired, through a wholly owned subsidiary, an additional 1% of the overall capital stock of MGM China for HKD 15.34 per share, or approximately $75 million, and thereby became the owner of 51% of MGM China. Following the IPO, the underwriters exercised their overallotment rights with respect to 59 million shares. MGM China owns MGM Grand Paradise, the Macau company that owns the MGM Macau and the related gaming subconcession and land concessions and is in the process of developing a gaming resort in Cotai. See below for additional information about the Cotai development project.

Through the acquisition of the additional 1% interest of MGM China, we obtained a controlling interest and were required to consolidate MGM China as of June 3, 2011. Prior to the IPO, we held a 50% interest in MGM Grand Paradise, which was accounted for under the equity method. The acquisition of the controlling financial interest was accounted for as a business combination and we recognized 100% of the assets, liabilities and noncontrolling interests of MGM China at fair value at the date of acquisition. The fair value of the equity of MGM China was determined by the IPO transaction price and equaled approximately $7.5 billion. The carrying value of our equity method investment was significantly less than our share of the fair value of MGM China, resulting in a $3.5 billion gain on the acquisition.

We believe our investment in MGM China plays an important role in extending our reach internationally and will foster future growth and profitability. Asia is the fastest-growing gaming market in the world and Macau is the world's largest gaming destination in terms of revenue, and has continued to grow over the past few years despite the global economic downturn.

On October 18, 2012, MGM Grand Paradise formally accepted the terms and conditions of a land concession contract from the government for its planned development on Cotai. The land concession contract became effective on January 9, 2013 when the Macau government published it in the Official Gazette of Macau and has an initial term of 25 years. The land premium payable to the Macau government for the land concession contract is approximately $161 million and is composed of a down payment and eight additional semi-annual payments. In October 2012, MGM China paid approximately $56 million as the initial down payment of the contract premium. Including interest on the eight semi-annual payments, MGM China has approximately $118 million remaining payable for the land concession contract. In addition, MGM Grand Paradise is required to pay the Macau government approximately $269,000 per year

Our current MGM China operations consist of MGM Macau and the development of the new gaming resort in Cotai. Revenues at MGM Macau are generated primarily from gaming operations made up of two distinct market segments: main floor and high-end ("VIP"). MGM Macau main floor operations consist of both table games and slot machines offered to the public, which usually consists of walk-in and day trip visitors. VIP players play mostly in dedicated VIP rooms or designated gaming areas. VIP customers can be further divided into customers sourced by in-house VIP programs and those sourced through gaming promoters. A significant portion of our VIP volume is generated through the use of gaming promoters, also known as junket operators. These operators introduce VIP gaming players to MGM Macau, assist these customers with travel arrangements, and extend gaming credit to these players.

VIP gaming at MGM Macau is conducted by the use of special purpose nonnegotiable gaming chips called "rolling chips." Gaming promoters purchase these rolling chips from MGM Macau and in turn they sell these chips to their players. The rolling chips allow MGM Macau to track the amount of wagering conducted by each gaming promoters' clients in order to determine VIP gaming play. In exchange for the gaming promoters' services, MGM Macau pays them either through rolling chip turnover-based commissions or through revenue-sharing arrangements. The estimated portion of the gaming promoter payments that represent amounts passed through to VIP customers is recorded net against casino revenue, and the estimated portion retained by the gaming promoter for its compensation is recorded to casino expense.

In addition to the key performance indicators used by our wholly owned domestic resorts, MGM Macau utilizes "turnover," which is the sum of rolling chip wagers won by MGM Macau (rolling chips purchased plus rolling chips exchanged less rolling chips returned). Turnover provides a basis for measuring VIP casino win percentage. Normal win for VIP gaming operations at MGM Macau is in the range of 2.7% to 3.0% of turnover. MGM Macau's main floor normal table games hold percentage is in the range of 20% to 30% of table games drop. Normal slots hold percentage at MGM Macau is in the range of 5.5% to 7.5% of slots handle.

Corporate and other. Corporate and other includes our investments in unconsolidated affiliates, MGM Hospitality and certain management and other operations.

CityCenter. We own 50% of CityCenter. The other 50% of CityCenter is owned by Infinity World Development Corp ("Infinity World"), a wholly owned subsidiary of Dubai World, a Dubai, United Arab Emirates government decree entity. CityCenter consists of Aria, a casino resort; Mandarin Oriental Las Vegas, a non-gaming boutique hotel; Crystals, a retail and entertainment district; and Vdara, a luxury condominium-hotel. In addition, CityCenter includes residential units in the Residences at Mandarin Oriental and Veer. We receive a management fee of 2% of revenues for the management of Aria and Vdara, and 5% of EBITDA (as defined in the agreements governing our management of Aria and Vdara). In addition, we receive an annual fee of $3 million for the management of Crystals.

Other unconsolidated affiliates. We also own 50% interests in Grand Victoria and Silver Legacy. Grand Victoria is a riverboat casino in Elgin, Illinois; an affiliate of Hyatt Gaming owns the other 50% of Grand Victoria and also operates the resort. Silver Legacy is located in Reno, adjacent to Circus Circus Reno, and the other 50% is owned by Eldorado LLC, which operates the resort.

MGM Hospitality. MGM Hospitality seeks to leverage our management expertise and well-recognized brands through strategic partnerships and international expansion opportunities. MGM Hospitality entered into management agreements for hotels in the Middle East, North Africa, India and, through its

Borgata. We have a 50% economic interest in Borgata Hotel Casino & Spa ("Borgata") located on Renaissance Pointe in the Marina area of Atlantic City, New Jersey. Boyd Gaming Corporation ("Boyd") owns the other 50% of Borgata and also operates the resort. Our interest is held in trust and was offered for sale pursuant to our amended settlement agreement with the New Jersey Division of Gaming Enforcement ("DGE") and approved by the New Jersey Casino Control Commission ("CCC"). The terms of the amended settlement agreement previously mandated the sale by March 2014. We had the right to direct the sale through March 2013 (the "divesture period"), subject to approval of the CCC, and the trustee was responsible for selling the trust property during the following 12-month period (the "terminal sale period"). On February 13, 2013, the settlement agreement was further amended to allow us to re-apply to the CCC for licensure in New Jersey and to defer expiration of these periods pending the outcome of the licensure process. If the CCC denies our licensure request, then the divestiture period will immediately end, and the terminal sale period will immediately begin, which will result in our Borgata interest being disposed of by the trustee pursuant to the terms of the settlement agreement.

We consolidate the trust because we are the sole economic beneficiary and we account for our interest in Borgata under the cost method. We review our investment carrying value whenever indicators of impairment exist and accordingly have recorded impairment charges in each of the years ended December 31, 2012, 2011 and 2010. See "Operating Results - Details of Certain Charges" for further discussion.

As of December 31, 2012, the trust had $135 million of cash and investments, of which $120 million is held in U.S. treasury securities with maturities greater than three months but less than one year, and is recorded within "Prepaid expenses and other." For the year ended December 31, 2012, $52 million was withdrawn from the trust account for the payment of property taxes and interest on our senior credit facility, as authorized in accordance with the terms of the trust agreement. As of December 31, 2011, the trust had $188 million of cash and investments, of which $150 million is held in U.S. treasury securities with maturities greater than three months but less than one year.

Results of Operations

The following discussion is based on our consolidated financial statements for the years ended December 31, 2012, 2011 and 2010.

The following table summarizes our financial results:

                                                 Year Ended December 31,
                                            2012          2011           2010
                                                     (In thousands)
       Net revenues                     $  9,160,844   $ 7,849,312   $  6,056,001
       Operating income (loss)                80,526     4,057,146     (1,158,931 )
       Net income (loss)                  (1,616,912 )   3,234,944     (1,437,397 )
       Net income (loss) attributable
       MGM Resorts International          (1,767,691 )   3,114,637     (1,437,397 )

Our results of operations include the results of MGM China on a consolidated basis following the June 3, 2011 date of acquisition. Prior to that date, results of operations of MGM Macau were reflected under the equity method of accounting - see "Operating Results - Income (Loss) from Unconsolidated Affiliates."

Operating income in 2012 benefited from a full year of operations at MGM China, as well as improved operating results at our wholly owned domestic resorts. Comparability between periods was

Operating income in 2011 benefited from improved results at MGM Macau, CityCenter and our wholly owned domestic resorts and included operating income at MGM China of $137 million from June 3, 2011 through December 31, 2011. As noted above, operating income in 2011 was affected by the MGM China gain, our share of CityCenter residential inventory impairment charges of $26 million and $179 million of property transactions. In 2010, we recognized $166 million for our share of CityCenter residential inventory impairment charges and property transactions were $1.5 billion in 2010 including $1.3 billion of impairment charges related to our CityCenter investment and $128 million related to an impairment for Borgata. For additional detail related to property transactions and residential inventory impairment charges, see "Operating Results - Income
(Loss) from Unconsolidated Affiliates" and "Operating Results - Detail of Certain Charges." In addition, corporate expense increased 41% in 2011 primarily as a result of costs associated with our MGM China transaction, transition expenses related to the outsourcing of information systems, additional legal and development costs associated with future development initiatives, costs associated with the implementation of our new loyalty program, as well as additional costs associated with community involvement. Depreciation and amortization in 2011 increased from 2010 primarily as a result of the consolidation of MGM China. Of the $221 million of depreciation and amortization expense at MGM China in 2011, $181 million related to amortization of intangible assets recognized in the acquisition.

     Operating Results - Detailed Segment Information

    The following table presents a detail by segment of consolidated net revenue
and Adjusted EBITDA. Management uses Adjusted Property EBITDA as the primary
profit measure for its reportable segments. See "Non-GAAP Measures" for
additional information:

                                                       Year Ended December 31,
                                                  2012          2011          2010
                                                           (In thousands)
 Net revenue:
 Wholly owned domestic resorts                 $ 5,932,791   $ 5,892,902   $ 5,634,350
 MGM China                                       2,807,676     1,534,963             -

 Reportable segment net revenue                  8,740,467     7,427,865     5,634,350
 Corporate and other                               420,377       421,447       421,651

                                               $ 9,160,844   $ 7,849,312   $ 6,056,001

 Adjusted EBITDA:
 Wholly owned domestic resorts                 $ 1,325,220   $ 1,298,116   $ 1,165,413
 MGM China                                         679,345       359,686             -

 Reportable segment Adjusted Property EBITDA     2,004,565     1,657,802     1,165,413
 Corporate and other                              (286,166 )    (101,233 )    (235,200 )

                                               $ 1,718,399   $ 1,556,569   $   930,213

Wholly owned domestic resorts. The following table presents detailed net revenue at our wholly owned domestic resorts:

                                               Year Ended December 31,
                                        Percentage                 Percentage
                             2012         Change        2011         Change        2010
                                                   (In thousands)
Casino revenue, net:
Table games               $   821,737       3%       $   800,216      (3%)      $   827,274
Slots                       1,666,482       3%         1,625,420       3%         1,577,506
Other                          65,450      (2%)           66,836     (11%)           74,915

Casino revenue, net         2,553,669       2%         2,492,472       1%         2,479,695

Non-casino revenue:
Rooms                       1,531,829       1%         1,513,789      10%         1,370,054
Food and beverage           1,393,141       1%         1,374,614       3%         1,331,357
Entertainment, retail
and other                   1,097,220      (4%)        1,139,139       5%         1,086,469

Non-casino revenue          4,022,190       0%         4,027,542       6%         3,787,880

                            6,575,859       1%         6,520,014       4%         6,267,575
Less: Promotional
allowances                   (643,068 )     3%          (627,112 )    (1%)         (633,225 )

                          $ 5,932,791       1%       $ 5,892,902       5%       $ 5,634,350

Net revenue in 2012 related to wholly owned domestic resorts increased 1% compared to 2011 primarily as a result of an increase in gaming revenue and a 2% increase in REVPAR at our Las Vegas Strip resorts. Net revenue related to wholly owned domestic resorts increased 5% in 2011 compared to 2010, driven by a 13% increase in REVPAR at our Las Vegas Strip resorts.

Table games revenue in 2012 increased 3% compared to 2011. The table games hold percentage for 2012 was 19.7% compared to 19.6% in 2011. Slot revenue in 2012 increased 3% compared to 2011, due to an increase in both volume and hold percentage. Table games revenue in 2011 decreased 3% compared to 2010 and was negatively affected by a lower baccarat hold percentage, as well as a 3% decrease in total table games volume. Slots revenue increased 3% overall and 4% at our Las Vegas Strip resorts in 2011 compared to 2010.

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