MGM - Earnings call transcript Q2 2018 | MGM Resorts International

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Operator

Good morning and welcome to the MGM Resorts International Second Quarter 2018 Earnings Conference Call.

Joining the call from the company today are Jim Murren, Chairman and Chief Executive Officer; Dan D'Arrigo, Executive Vice President and Chief Financial Officer; Corey Sanders, Chief Operating Officer; Grant Bowie, CEO and Executive Director of MGM China Holdings Limited. Participants are in listen-only mode. After the company's remarks, there will be a question-and-answer session. In fairness to all participants, please limit yourself to one question and one follow-up. is event this note being recorded. Please

would Mr. Dan I like to to over call the D'Arrigo. turn Now,

Daniel J. D'Arrigo

Well, thank on This you, the Kate, furnished morning. Internet and good morning we and to International broadcast on have quarter the at being this www.mgmresorts.com MGM press and second earnings X-K is call. release call our live the Form Resorts welcome to SEC

differ will Harbor laws. call, we make from may provisions Actual the the under Safe forward-looking in On the contemplated securities of federal results these materially those statements statements.

no differ cause our Additional as statements in statements these factors law, otherwise. the today's of obligation that result information as a undertake contained filings periodic concerning actual information, to could results is update Except updates in to or materially by SEC. from these press new with and release required forward-looking we

also will performance. financial we call, in our the discuss talking about non-GAAP During measures

financial our reconciliation can now Jim press on available to over GAAP find Murren. release, the also Mr. measures You website. the in call is the of turn I'd which

James Joseph Murren

both up guidance. want and Dan, revenues Well, I Well, are first, The reported say X%, quarter we morning, obviously up RevPAR everyone. you, and solid was strip our good that second thank consistent to with results. X.X%,

XX Las down in basis and Park points. a Our Vegas expected. MGM, came were excluding year-over-year our little than margins EBITDA, increased X% They bit better

margins Excluding MGM, were Park at just flat about XX%.

an respectively, EBITDA margins properties, fact, our in and and all-time had EBITDA XX% over at We each see second the million quarter. quarter luxury Bellagio in were performance continue record in the and strong to XX%, already of $XXX Aria quarter produced

of we MGM negatively July. almost and property, month in National MGM ended Harbor. main which there We our there, $XXX $XX the held regionals was Macau, our had impacted was star low in Our results the the floor VIP, million. EBITDA in both just Unfortunately, a and million performance quarter. Over again solid China's newest by

been XX% up Fortunately, we've And gaming World our property XX% and year-over-year on in has Cup. what's implementing seen pickup our we same we're since up a at strategies new new basis. happening offerings to initiatives there. July across beautiful Macau after the MGM time, in over property our fine-tuning marketplace. the team whole the in a And the soon capturing strong brings Cotai, those our which in yield gross nearly grow Macau to us opened revenues opportunities portfolio, and business, were and month-to-month

Cotai's mass be are is an we then, The coming the quarter. premium high-end New It's with later in MGM a opened weeks theater rooms which exclusive junket course, coming gaming along both show. the also come. launched October's online amenities They're Golden resident before will this is up to months of our open room customers. be VIP in the Club, And it's area fourth Destiny Week. going to debut called product, and President's our and year. to expected to for have going Mansion,

on any your and Grant's answer always, can questions. phone, the he of As

second the lot quarter. Obviously, of of So, look there's that's a good a disclosure.

us that, have you know. please any questions let on If

strong the in last Looking that fact quarter specifically last the very that particular – to into here course, in the third Las due – that and highlighted, the we in calendar third comparisons Vegas, convention had quarter, as you had call difficult we mix first, a in citywides year. of recall MGM quarter. some That's, third

had we that two fights hosted. course, the Of we

In to to the thought We conventions however, up or third they were like. what going quarter, knew the in knew going knew But look going that the fourth The over the quarter. Day, we idea year so also We nights than Investor in the be range. we XXX,XXX some those a for we knew did May, with gaps citywide was fruition. held then in year pockets to the around business, rate come to room year. looked in also preview above you more we're the convention lot. market our the of XX,XXX We was discrete we lower citywide seeing that by the some done prior third be down room mix. pressure. That's not quarter We saw normal to fill driven we nights. had That convention when was had

summer are quarter, to these As third of months. where leisure booking have very tough, side, over windows are rely And particularly the you generally more on on became the the competitive last we the and months the channels. know, short, quarter, convention that's channels couple

would the here X% between revenues That RevPAR would X%. the year that business believe small quarter, Las down mean And means our our dragging FIT made would are is and have and margins or The in the sense, would That be in get for XX%. our We foregone here would and as MGM the margins, all in not longer-term blocks the our did less it we're in in I exclude forego between in have XX%. MGM, quarter, occupancy in didn't margins other the properties the prices say, you where quarter whenever and in did to whenever we coming expected channels quarter if casino not. our we're down mean block, which third be to group will than this occupancy our pricing. around seeing third and expected. that be it combination convention of we came comparison around So, Vegas the X% in current adjusted in the minimum though, going Park come that XX%. and

EBITDA that EBITDA decrease balance near-term we on simply the the margins to to both expect So, our XX% exclude conservatism level be around be mix talking you of comparison if the shift and by is for down year, low-single-digits and of seeing games driven that. the on the of by Park now half we're what based XX% Park mainly or and this revenues the size strip table is About a rest strong let's MGM. tough about. our driven been dynamic MGM, and hotel we've Based

early to of later we Now, into, particularly we're it's the side. part been building starting as get we very have pace better base fourth trends on can And the out which XXXX, group see but solid business. we quarter, into look a of convention much

now, In some a for the also in production fact, up of periods destination future see quarter in looking our very demand. we healthy digits double driving backdrop was group and our second

in we've think, United We very on some, MGM you dominate has this Resorts went we've proposition I significant recently been And the understanding of made an many where New into from likely advancements. sports back been York busy know, to States. As sports. that opportunity betting we've

We we have best in were to that betting needed We experience, world United market which joint and the this it partner business a experience proprietary, share the outstanding to found knew best we was how speed does announce we we have throughout venture. gaming a not with market have course, needed proud have have to build brands, to We What the have market. exist here we're we looking best that for the to does scalable. the help GVC. we We and race us for provide this that knew could the customer. technology, partner people, in-game the to in needed of States to in the but,

the do opportunity to go we'll MGM our in that where we that and provides simply We every operate we not Boyd on in be States at today, also which us. the every people in. sports market so do to in deals platform operates other partners know Boyd that consumer in calling a and states United need This we been Gaming. state can access in to in friends turned market the have And with gamble and our

proud everything, the the We which we knew and integrity is that is we're data with tantamount receiver official success, also unique we the of data the the data and the now the why gaming and NBA, WNBA. particularly forged is trust in sponsor partnership where and NBA of are just to

be is of a in business. experience Mobile casino, only Jersey the is betting, social, not our I this is poker, it Just as a Mississippi And going interactive will that in it bricks-and-mortar to New believe going help and for launched around days, coming we market sports large is not if in world, that think total hours. vehicle yesterday. forward and

going we turbulence. of of Before efficiency operating it here clarify, us of questions, to can of one, and do our resorts, regardless turn just the at MGM wanted to times maximize think, have on we existing are everything I we to in I short-term will that continue over strategies market Number the to I all in crystallize markets. what's to remember guide which, particularly important Resorts the

the to the proud less sell path opportunistically be or condition we're outstanding allocate will than to to changing this that. to going yield flows We're in to overall believe, technology and interactive an investments, of asset-light, the peer over operating without experience with drive that better technology continue the that. Growth are our that in $X. company. operate very look speak mix we competitors the everywhere management leadership real The continue margins continue industry best going MGM We're spending able technology share our means going to estate its the – owned Resorts cash of assets to we're Properties. next activities and CapEx guest assets be to we week leveraging to market the own maintain path more Resorts. regional the MGM years Obviously, our our transform and businesses. and CapEx the future than have we Because digital, we by few We an MGM our properties will their will of leads group, to And portfolio. what of higher for margin, to capital-intensive be by innovation increasing higher

with out years. enterprise want an ROFO and to expect next to from likely interest help MGP. through Resorts of to growth see we our three of of healthy and within MGM assets transactions MGP going be to want MGP the we're the reduce of and future most at under economic We ownership We that XX%

to are National working and worked year. conclude like Harbor. all that finished well of We we T-Mobile going The will have hard that been projects capital successfully yet so be have so finished ones that this be and our to have on

authorization. between a then that a to and achieve expect target per guidance We quarter the Day. million of goal flow during $XXX benefit second maintain in the billion growth. our $X.X We're XXXX, of and cash means of four consolidated which we repurchased And the going to we're flow you going flow today: shareholders. is we flow use cash to through remaining that have under affirming of net to gave cash are current XXXX free on generate we're to leverage cash Investor $X.XX three the and We we free times, share setting

and We opportunistically have are million target we to and XXXX. markets XXX sports leveraging by relationships and shares to access our our new and under diluted brands partnerships expertise. our for get interactive our a by And going

look last not progress if is opportunity Japan. pursuing talked regional quarter. development do we And, gaming it. remain we've to any want I And since the of sports, there. fact, order to in believe arena the acquisitions made be We like on only access we market great are you deals We'll to in we in for laser-focused

over so turn get And to can to that, to like I'd it we operator so, the questions. with

Operator

Instinet. is Curtis Harry of go question first ahead. from Please The

Harry C. Curtis

Hey, everyone. good morning,

these Vegas And Vegas. you greater you year now us Jim, think being Vegas that on you behind that. become attention of consistently Just the group Do as softness that What you meeting more do demand, entertainment cities? in can what's that Las so of wanted pockets? and a don't Caesars in if to we have in by group look somewhat the competitive balance collectively sit has this given your at other given give bringing could less to and perspective air and in the start

James Joseph Murren

Harry. Sure,

of record always the know It You're Las citywide years. over XXXX. about couple The quarter only was the been conventions volatile is Vegas. the that one so you am, as all-time third that's hasn't in I old as in last

year. was The last second record

these fill record, The rooms The has mix in of get, as challenge couple third their around acceleration small quarter. that not we there hoped, against the for can of this last up to be several incredible decent. the in pretty remember, group started convention an in we years, year, been two It's the And the differently. it's did holes that comps years. not a since third But last because understood to it's year. the of were I whole business context we of market the will bad that, scrambling fully This quarter. just

expect people in properties. in doing little and see the around mid-market quarter this that approach Now, because But that the properties business luxury on we've Bellagio, in of reason their last it couple year. does don't to Aria, stay, over our properties, We shifting have unusually otherwise. third the the the very higher-end was anything the We decisions impact no that when happening of that see. balance slow conservative But – it do we quarter. fourth to the the base fact of a given trouble think did taken the there's months, are to

marketplace business of is bit The – to where over now, we're what the turn in strength. been so I'll would I that the little We And made in for moved say, it some saw to Corey, it has sense. year of place. And deterioration and the a starting in see then around we a year.

Corey I. Sanders

on record have year. And, off We lot conventions even that quarter's quarters of that convention and of where mix Harry, we're taken day ago, shape come the mix any understand went. years this Yeah. overall we've those of the market, we a expecting, would the third four two

of them especially rotational, are the citywides. some And

as could We Caesars see books softness the the experience think other the XXXX, no because create Is in and ones. we out no had there competition on now, that few of even a that it. and can cities? I market don't city us, other we're there Vegas. But Vegas, also but can an other big for Las Wynn with rotational this geared house look conventions and coming scale. we especially what's Las Absolutely, to more city up convention XXXX And can that our in

Harry C. Curtis

to consistent in the base leaders air pricing I that the is for two guess, in on and least more there you and don't have – to the term? have that my is city proactive channels killing any with OTA the question, way more become near so though, to are pockets, these rely city the really at a

Corey I. Sanders

to traditionally, event even events and a but has I market. little Usually, that. years, the challenging been years definitely challenge. that. just a been others, We think general to But, for on like address how summers strategize less – our unfavorable ways a do we, here on and transient we reliant probably it's tiny that. bit on our it's get think with at quarter, on we a XX reliant we bit and creating calendar have to I've components at to something had in XX about. always work one customers This been general, own try MGM, around little going have is in leisure bit create third will constantly But than more that. And to we're look always but it's to the –

James Joseph Murren

phenomena. addressing going last content We a to continue address to the Las Aces, night. And It And we quarter third been again, I third it way been quarter the bring to the is have Vegas. is would and phenomenon. to Vegas Las just a say, this brought has game we're

finish we Summer people no if content need the the is We year. degrading That The are the won't to working. do that, can do sponsoring cause has are customer do we when when more even experience be to there been as event these and Raiders because XXXX. League, pockets, on is which we next then We're back. going lot going awful come have without going strategy last year to What the to bigger is was change the an it we best to to bring this in an than much was There's it T-Mobile. going month. stadium

Harry C. Curtis

good. question you Very wanted a outlook look? up ramp Can some to just I the on us quick to how Grant of expectations or ramping ask junkets to on should then Cotai. related that give on

Grant R. Bowie

as currently will with to balance we're them operators looks September October. in be two to try So, – the opening as period the – them agreements on early now, up, operating to be an a operating sit we few to stand that to And starting it balance and we opening. it's give it going in just right tranches prior like

speak here, open those up and operators weeks we they're operators. from we're only as seeing the bigger So, probably four away

is us everything the So, moment. for at going positively

Harry C. Curtis

for That's me. Thanks, Okay. it everyone.

Corey I. Sanders

Thank you.

James Joseph Murren

Thank you, Harry.

Operator

The of next question from is Greff Joe go JPMorgan. ahead. Please

Joseph R. Greff

guys. morning, Good

broad means you September? planning Just, then Jim, to certainly, a higher-end versus discrete have But And pockets why is when when Las it how that would in Vegas talked first in and that the like of persistent how sense at opportunity on and that emerge? you stock? do you comments of? you is then the about $XXX front July, an kind of rate the both you're did pockets it? then lower-end the you Is worth outlook perhaps what you these stock of And about about would properties I'm it or buy what did August discrete talk better in in million broad-based? rate pressure, XQ can give anticipating pressure of exactly. seeing a of that presuming, buy properties, it, see to And

James Joseph Murren

so get God's just few about you It's unreal. up sake, For worked guys weeks. a

a concern? the again. The about our will did thought fourth to it we with Do of we May, good continue that going cash happen what's saw we in Vegas we answer starts free We which month. what back that see because those in in we think flow. Las because stock smaller on quarter, going start the we is anything would no, stock us our back buy of stock And undervalued. some In talked to allocation wanted bought We business. a about happening. would. group we there's Let's holes not. to think ridiculously quarter structurally with We cause is fill We and is

a So that the knowing If to period of us but fourth front in I be we the concern, share going I data couple time. going I and into around of guess, XXXX. have appreciate in we're concern, month tell the benefit you, that having of I the quarter would stronger

we that pressure and did city And there not know around September into see to everywhere. is companies we we going the what just was know, So pressure October. abating what everywhere, do

Corey I. Sanders

that really is And would biggest the pressure, say, what window. I is Joe, on booking short-term really,

we're that like channels other FIT window real the that the has booking are impact. and actually the the It's way and also. of in So, world, People are book, that pretty casino short-term we've less healthy, past our of they're channels been see very we question, answer them the up to seeing To are booking our challenging. an trading before they're seen that Bellagios the seeing channels.

So, properties get into impact lower you pressures are properties pricing the the core core and like of Excaliburs the biggest probably these end when the the Circuses. and probably the

Joseph R. Greff

Thank you.

Operator

The Bank next Shaun Please of of is go Kelley from question America. ahead.

Shaun C. Kelley

this a are moving basis and It's the to Hi. at quarterly seasonality shifts since the in it, just this not pricing and convention and imprinted look growth CON/AGG QX, worst worst how have way that right? going know here's includes out. stay RevPAR don't you Good look position imprinted morning, guys. guidance it for margin that environment I sort I It's at the topic. the everyone, but help like, guys have number with since hard you to number to XXXX. of and is the to XXXX. And When guys we on rate

with more may in that the something of competitive gain short-term do this coming not or been now at that period? with given landscape exacerbating else bigger it's Caesars there, how out of maybe bankruptcy, have question is the And So, competition look I very in is, there to really in we issues can guess, we have that people visibility seem business? the the the that we're confidence kind seeing something

James Joseph Murren

Well, the your that – on we're lowest it's against comps year-over-year assumption margin the we're RevPAR, at going to but which look talking about. yes,

last Our gone over margins years. several the dramatically have up

So possibly it can't be...

Shaun C. Kelley

The Jim. year-over-year performance,

the be XXX aside since be points would number – would minor down again, we've tweaks lowest Just seen basis XQ – XXXX.

James Joseph Murren

much what, higher. is, itself margin the But Okay.

Shaun C. Kelley

Of course.

James Joseph Murren

Right.

on profit. I mean, and the on we're margin So, running company

So what in What that we've talked that. are the pressure we seen is seeing not short-term about. fourth is we quarter

your year we it's we structure affect you that profit, So, going to want to the yes, against service that. did your is a the last are had where go almost cost to when declines, point unless RevPAR dramatically because RevPAR to and not down, going margins do comps all reduce

Shaun C. Kelley

that's things a would important, consider to I a Understood. could just what level at within additional you make sense gears, on MGP hard very those Okay. updates reducing can to you strategic lot to path probably being prepared about, of mean, give three along the of remarks, ownership reduction M&A MGP? in involve XX% to that talk shift able you And would that high being us for kind be potentially completely I under in gave a you to and talk, your obviously, selling mean, Jim, in you were one that just years. Could but just the shares or of distributing of

James Joseph Murren

have third-party We space. we've put management on the best have that a but consider acquisitions with the in it's of we everything. We prospects they MGP. own the going we team. believe know perimeter several to premier should now We it is operators less know the grow. of MGP triple-net they're best think working for know we have We We them. around We and said,

will happen. that So,

ownership properly, further, transact Secondly, sale we in MGM in equity that through units. the if MGP to with MGP would be And MGP. reduce has would more done probably price, reduce equity right at our OP than thirdly, ownership to the our in of willing, ways the opportunity

think our shareholding from to two, number there's there; is number we arbitrage expanded very valued an would think reduce we equity value, because So But I great MGP benefit believe one, that, the the on ownership everything's base. goal table. and

Shaun C. Kelley

very you much. Thank

Operator

Felicia from The is Please question next of Hendrix Barclays. ahead. go

Felicia Hendrix

there. Hi,

quarter. a the guidance fourth RevPAR year wide for low-single-digits kind range the your So, of your Jim, implies on full guidance, for down

You quarter. optimistic fourth the more sound do for

Will quarter be was it guidance, So negative, be be given it RevPAR the could positive. could just it wondering, positive? I fourth

James Joseph Murren

It'll be positive.

Felicia Hendrix

lot are so Okay. by And to and and I'm you think very a people is frustrated – what just how wondering, explained this I is what getting – guidance, clearly. of you is

guidance what on then. previously base think, You May, were gave what's how get, in trying is a But, half didn't happened business second what be have in a based or convention group knowing I would guidance you business happened since frustrating that yet April, but could you summer challenge. to

address you maybe process thought there. So, can the

Corey I. Sanders

answer, Felicia. always I'll want the the rooms books, plan can on forecast we the way I sales what fruition year. Yeah. think mean, only the up is didn't and we team because It what's make but we to just not this way. we right work our filling we with sure we to come we're on

what probably latest we conservative more just year. so because is and been you're it this pulled have out the seeing most guidance And of come in that on to side our fruition didn't

Felicia Hendrix

just that hopefully, and conservatism, continues of and these because to of I And helpful it put kind your kind that's give of situations. gets to that that the into probability sorts guidance uncertainty Yeah. appreciate practice think seems into I not you in of think –

James Joseph Murren

are talking we we but flow of about. to everyone of frustrated were talking a in weary profitability. measure we is specific here. because metric going But and ourselves guidance, wants loud We're from weary I RevPAR, about, getting the which about talk very and Street. not we about little talked and what as it's future. cash RevPAR And because yes, on the but those we use know the we're we message on we're the hear to ourselves measure conservatism tremendous will down the It factors as getting you in clear metrics of

Felicia Hendrix

I'm I understand quieter mean, Corey, attractions, and amenities, things during you periods? hopefully – if people of less wondering ebbs to company the And, demand year are can there's kind to adding the slower reactive the will I any the in improvement be in different flows of and systems But the in helpful employ additive. bring very be is internally also help I of to the – future there know times or

Corey I. Sanders

our forecast expenses is seven-day very to Well, as and here But for our able flows, that. and before I've the fight when challenge that ebbs it's our business we're here short-term summer, just our degrees long XXX labor that convention outside, get adjust tied period. to in the we everything way way and and for so especially it's through for especially labor forecast, forecast, we three-month the our these was been period, much that as a –

We looking the travel. in may the certain at some are summer how creatively repackage at we for things summer, competition of looking

As different for and looking are we we at, do constantly it's industries cities, you or ways business. different that look whether looking at maybe better our to package how

Felicia Hendrix

Okay. Thanks.

Operator

question Please Carlo from Santarelli next The ahead. is Deutsche Bank. of go

Carlo Santarelli

and what imagine would it of domestic that keeping forward some the that mentioned. that you As the seeing I booking relate flat, fill. way that is kind is lot roughly little bigger performance, seems is is what cetera, window that has FIT, close a visibility some question. the et Hey, this – taking that just business – holes and my leisure, to revisions, not about think just it firming year is that think When think to mix morning you do have of you for broadly, guys. But despite when Corey is that Good should. this And guys bit as thanks you lodging, the U.S. having convention businesses, about of subdued? I believe, business guidance more to picture, shorter it up with to if a for macro, more recall, I

from? softness So, some it think you what core of is is that that customer stemming domestic of kind

Corey I. Sanders

Hi, Carlo.

also more city hanging are well. at probably a are little pretty its last in trends was are really channels macro the channels FIT the had It's actually components down a look convention that mix. if attendees a Our think But by you in here, similar bit OTA year, challenging. be everyone's X.X little over million to XXX,XXX. which we'll If us, the record I

you're XXX,XXX in XXX,XXX, to have extra be sold channel. at rooms that So, looking that probably

probably because think about supply, on extra of looking this trying for the add you're that of the rooms that has market were You I room just sold are XXX,XXX rooms and order, probably slightly, in get being put which out to year. increased

this seeing year are from because less similar that's we're for think rooms the that on that books and books, will there next year what reliance our convention trends we're having what of experience on hearing be I channel. on with competitors the what's

Carlo Santarelli

if My of OP consequences sorry, Jim, the purchasing terms then, And about is in kind selling, that. in a response do ability to you. manner? related tax anything recollection units ownership. net could Thank a just tax-efficient question in mentioned changed You up? there down to are of that potentially some follow Great. earlier that to to MGP Has I that or

James Joseph Murren

We one of brought Dan? as take the to them, I ownership. options order reduce lot Do up to have a many have want in you options to our of that us. we it available

Daniel J. D'Arrigo

the will Strip for terms I mean, basis assets and Carlo, of National contributed there's of basis assets basis during OP went of a when some those and some they transactions like in that have us in and upon on depending units Harbor of things in Obviously, versus units higher higher formation. lower Borgata in basis the original a the still the those others a low the were venture. into

long it take too from to So makes it issues look we will consideration. don't tax a let ago of And do work much wag in the value, to learned but into sense we at is some and Kerkorian tail Mr. the perspective. we then shareholder that the there of tax through, tax from kind maximizing if kind dog that

Carlo Santarelli

Great. much, you right. All guys. Thank very

Operator

ahead. Thomas The Allen is Stanley. Please Morgan next question of go from

Thomas G. Allen

morning. Good Hey.

on of year? So, Thanks. of impact shooting last the experiences we're a the anniversary that it maybe the Is time that and X. just having some coming given from year anniversary terrible disproportionate is October up on to

James Joseph Murren

first, You do want to tackle that want you to...? Corey, or

Daniel J. D'Arrigo

Hey, to the being strong Thomas, around is of very be see recovering softness it's of base pretty October, probably property September, the is fully but event Mandalay we timetable. We group, it kind of We do of event see a calendar-driven, which and yet. supportive as little but still have not do do in in supportive. is Dan. back a some around is continue well that bit loyal timetable Mandalay a at some and will is as

little bit And the in terms do fall a see we as quite – its is period Mandalay to time longer property that's So, but term. – that property the good see into of for up for of weakness itself summer pace. around nicely a later XXXX

Thomas G. Allen

Thanks, Dan.

James Joseph Murren

Yeah. I would say the...

Thomas G. Allen

Sorry.

James Joseph Murren

...the pretty the is portfolio rest about back of is XX% probably back. and much Mandalay

Thomas G. Allen

it's you. on thinking far just the then how new obviously just that into you're and you the property? market. Thank frame how gone – Can to coming or Can so been frame competition? the impact you're And has new there Helpful. competition modeling how about Borgata, there's you Thank you.

Daniel J. D'Arrigo

and couple a been a the XX%, in obviously, Yeah. But recovered, has we just those probably we business of we impact for time increased that XX% in the capacity competition of weeks, did it's performing new after the There with bit, we're few will Borgata and new Borgata, now, the bit impact. And well. of the of just we range roughly. long of metrics. first come market days has that the seeing the you saw but couple some expect, thus been little kind because clearly coming covers, looking the early be down a the little obviously, in I maybe far, do but and looking at two We're to can a that's first property's weeks. by volume market back. properties mile lot watching And actually miles. leader start Their a initial been at capacity the of has a market, think think But some that in right tell online.

the but a are product, has property and like Borgata is great that new the of kind needs. out realizing still testing people all So, amenities looks it

do we is So well. just the because expect up impact but Borgata capacity the some in market, holding of

Corey I. Sanders

Hard first we'll one watch really and both actually lot Rock Borgata had July, over their month, a was to The and at lot I – a activity there's with of thing there, want the concerts anniversary. XX-year of

ship lot well-positioned is where goes Borgata have maintain that works a out, there. activity as share very but away, So, see to the to its of we'll market

Thomas G. Allen

Perfect. Thank you.

Operator

question Robin go Farley UBS. of Please ahead. next from The is

Robin M. Farley

Hi. Thanks.

sort a guidance fewer called it Just the group talked is well. QX basis as like of XXX better you as phenomenon and points down bit about you QX it sort little RevPAR to of the least looks but events, understand implied at

QX? beyond the in I for took swing responsible it the mentioned like a So of out business Is it's RevPAR basis and comping the that QX. XXX outlook seasonality seems this like you coming point smaller in time. the group something just you difficult mean, assumption about closer that in to

Corey I. Sanders

you not very have we I basis No, don't forecast in where trends the on know. that the get now. will Do to QX. think been I'm point, sure XXX forecasted seeing our those QX put that's we conservative how but we we're but continue?

Daniel J. D'Arrigo

to showing level the numbers And Yeah. be decline. quarter. show in our of up RevPAR actually that fourth We're our don't

Robin M. Farley

meant versus point your what XXX had suggested. I the guidance decline basis previous

words, flat have maybe positive. in again closer now you're still So, of of sort mid-single-digits other and something saying previous implied to and guidance would

in that So I couple being your just meant that change delta, points. the outlook hundred basis

level driven that that outlook? in business group change the is that by of So, smaller that

Daniel J. D'Arrigo

the looks group deeper as see conservative, Our being fourth now. And just But right get little environment and and those a good. the the business Corey the we into in more current as into bit quarter, we're in fourth trends we're we said, quarter changing. given pretty trends

is our at calendar Our fourth in event the particularly quarter, Arenas. stronger

will that in But of So, growth the the hopefully, what right like. standpoint bit to there's from upside we of little just a number. now, conservatism built look

James Joseph Murren

granular miss of we've our And take we it's says very Yeah. that, deal. years, And big when what quarter. going to that's anymore. meet on everyone RevPAR when add big be And type And Robin. not just we we're that like it, is disaster. fine, Over every trying going it to to many been be hit forecasting to it, exceed just or a I'll

we've So, give that that. We're not do. right the improve others. But idea We're happening in now, that this And going of to that guidance. that's what We're our with And fourth add seen see right because Do be is we we'll is. what we we going able business than very now. be environment cushion predict with coming information the the in would we the number pricing a We're fourth that we're what And predict. to in conservative. to guidance? off guiding lot do expect it this quarter. are marketplace including going to do reflected going what to in this quarter in conservative it cannot we more to, Yes, to that's tough of continue we with summer, predict now. the what we're RevPAR and going to to that's right very we're going going be

Robin M. Farley

follow-up. And just I appreciate the color. Maybe one

XXXX this that like the can convention group and on in visibility better know you're kind the significant early thinking on for by XXXX? the outlook. on and, on delta What on in you be I Because about meetings, a the You – don't year it's you'd I would it's it's large XXXX not that about XXXX that I in that that? Were books. soft, maybe XXXX sounds talking at forward you I the the sort outlook seems mix for least guess, stronger, it it make or are less you like up have of word pretty used the books already, those think XXXX? caused some that group the you convention of a were grow convention the view – said in the but conventions of guess, and of and implying visibility XXXX kind something. like again given if were year have margin, be here implying that small does terms difference much small But will the would

Corey I. Sanders

that. So, I'll take

miss adjustment RevPAR base was And XX% focused actual package. land that was. package. The of the I and it that's convention think to in that biggest the on is land everyone's biggest in where the

However, XXXX, on how books, pretty how even this, so, the XXXX. calendar lot dates good in favorable the holidays talk a in looking and I mentioned, like we more up But we are what's XX%. in fall convention are fall but about pretty at and almost don't

favorable. end the extra That on one little a For book. November, week gives bit XX. to is more Thanksgiving example, of at The holidays are us

Jewish of are the Some on holidays. them weekends,

So, that gives a us days more few book. to

positive. all year, those back New last which So, Year's. CES, going week are right after out of floated things a is

All of we to try our as will that RevPAR. drive help

James Joseph Murren

I would that. And just Yeah. to add

we strong. some we third business getting. the one, been business, tried we So, quarter Two, said, small to group convention as has in weren't which fill

the the land was impacted where package. the So we land was RevPAR. went in to package and the our pricing It land package

of into for business whether as the obviously, we XXXX see pace large convention better of said, mix the conventions small XXXX. in Looking quarter, or a we and our fourth versus they're up are

that, know because business we're going it. XXXX into we as up quarter, business get lowered with land be and we we third we to what was were year. as to that's what But coming if the expect next small going even so, took had suggest the when And all to in veered happening it on And that the cut wasn't small out in compression. fourth to where we quarter the down of when a Corey we've don't business, trying we that's the group rate says,

Daniel J. D'Arrigo

I just to want And Robin, clarify something.

forecasting year for to Our just flat. up, the were is but it's it We year year-over-year. the actually in flat be

our grow So, as in just were the clear, year-on-year. short on. mix little is was fell a kind We we the CON/AGG pacing a of piece to Obviously, anticipating to But that it little year. in bit. exactly of be last the year And of that. will that the down overall kind business a bit our for be part a little just that's year just plays big year last in part

Robin M. Farley

you. Thank Great. Okay.

Operator

Gaming. John is next The Please of go Union from DeCree ahead. question

John DeCree

sports you Thanks kind where or initiative it think last we're not could relates that something or you before or running as everyone. whether gaming markets communication yet have of bit. of partner shift betting. there in interactive gears with passed? I to on folks is free have Is Jim, nature kind quite your an sports And you One, and over start your announcements that the for a question. get legislation. even spending type legislation some my don't customer, up week little Good questions. it's two Wanted sports and of of engage taking had to play is opportunity to betting with morning, big to I authorized pretty made two

James Joseph Murren

good a That's question. Yes.

on the So, next And, roll modeling own out legislative New York be we're because year Empire. we'll some we opportunity legislative Springfield be are and this, that states property process and probably we a GVC. standpoint that gaming course, the a with From active the a first, and of but that going probably doing to like working there's activity access of their with on states at couple slower, would close we Massachusetts others. when will very everyone of expect – forefront as and is social high-population our in you states cannot of

able So, we'll than very more because be we than we be otherwise to simply going able talk a more provider, different to we're BXB to, to omni-channel states they're believe, customers a supplier, robustly – could. in

John DeCree

in think like the as high-population and state to digital the early Massachusetts Jim, the a channel to think life about the question, relates dense If database next Las how should how off-peak to I an over on going forward? coming or kind incremental opportunity follow demand could I it demand portfolio, Springfield do season. about that, about if on you Vegas in Yonkers I then of call, for on With that see filling shoulder up Program think months, Vegas earlier that's that in the important in horizon Loyalty M that you, generating is and and that the the expansion Las now you XX-plus in opening

James Joseph Murren

it will think I help.

to the interactive more and, our town basis side bring of help the to have next to seen. will, on able us. Bringing an ourselves, year will competitors to content going incremental town are are more on we I've think opportunities we well-positioned anyway. being otherwise that as I I think, we I to course, it's – but benefit certainly said, for think what outside be But

league put number the going year So, to: managing our with working The space. generate idea leagues, deck; and interactive. resorts, into profitability throughout into with our whether leading professional the existing grasp other fully higher channels. we Summer that the continue XX% it's States the amplifying through areas working physical but our as EBITDA two, I the interactive working assets number on maximize opportunistically is for large sports be goal the with and here to United itself, buildings just e-sports sell the margins in one, for other on some the think to margin can we interactive will becoming existing in interactive that and three, We're The the our have what that we all not can over asset-light expenses, and League we what the deck, other operate sports next in is them. of very the more and of space; several can of space digital in and or the we don't NBA potential do activities the our the be as years, a vehicle going

Corey I. Sanders

right open. And, And Borgata to mentioned, I John, also Springfield lot now. going Still that do and are M to going to to a just it's going actually healthy Yonkers, think be on also our as with but pretty competitors National casino below Harbor. is has not blocks I life our

interactive those to the our healthy. the our side, mentioned are interactive deals on convert And I of So as all think are customer expand into buildings. database to our partners and Jim our with brick-and-mortar

John DeCree

Jim. Corey. color, the for Thanks Thanks,

James Joseph Murren

you. Thank

Operator

Sachs. Goldman of The next Please question is from Grambling ahead. Stephen go

Stephen Grambling

thanks. Hey,

of on up that follow to questions Just and answers. line

dollars the other the can in the then is downtimes during perhaps As trend and online and locals data local you your perspective you leisure markets? of tie the strategy frames how words, see dissect across reallocating markets, your regional And into longer betting In response your consumers how that markets? Strip just are softer to that term? if manifesting customer and on sports leisure all itself

Corey I. Sanders

quarter the at share. a had customer, market pretty markets one the quarter. of had second look healthy. look the they at – had revenue, ever. the has regionals, see just which drivers, Borgata second the are and the just volumes the second National literally market big – Harbor, the best and to best is in obviously, record So, those share, of everything things slot was quarter we And in we Detroit that their particular, slot health as

Vegas we're for alternative what consumers for think seeing here is I are in looking places entertainment.

And look, that there's so, consumer, them. it's not alternative options a necessarily there's – weaker there's but for

of replace some So we that have option. to

in XX% just they of Borgata good. book say, there's our Europe about – month. there. the We Europe, this in we doing to a are company's understand to went adjust Let's been general, to a travel total we're an believe sports – regionals about idea where trying of to lot is volume give you which that's year, But,

we would that seeing think there impact indicate anything And we're sports. that that so, not it would

James Joseph Murren

Jersey, to online we see fact customer in properties be days I will able quickly that data And, so we to pretty gaming or Yeah. other regional – be access, are going we're big operate to operate states away in And New mean, we'll the from market in adding that, that through quickly. properties. Boyd's very

– I a into think know up in our I the second company, was but share of share, market And market continue which and RevPAR we hotel Strip every it big and market going cash metric: quarter also are we our why what's – in driver share. to profitability. frustrated is to table Baccarat we're expect our a important next the share, grow, that's slot flows year, on on all gaming market

we've knowns did in seeing we than had of and just discussed model, strategy those this into not we're like length because And calls not, we took like was we've couple had will that lower the to we forever so, which we I conservative through last period going at the months, it don't prices seen expect holes, this. hoped, as do could and quarter; which that we are more, what starting then which of But put because to the we at the where we trying of to the fourth approach, very improve fill a land-based it and we improve.

saw It's not are see our is what for to because there's how continue It's we not in anything going And to It's was doing guidance see the we quarter happen not what so, where no for we in ago. year. a to fourth three business. going We we be RevPAR in came other dominate. It had the Vegas than books the thought, we citywides. worse run upside we conservative that. really than but on Las us on least next in in happening months what the we quarter third foreshadowed at tough

cash information just revenues And in Vegas. drive coming future to see for no for that of our see for to in year everywhere, to merit in is in our So, We're see in up going fourth we which unusual the going case because not continue the We there hotel Macau one We're to much quarter believe, in quarter in with XXXX, to about in products books year flow almost is the We're be harvest pace the and to forecasting every in the accelerate use global probably to to on forecast build $X.XX We that going citywides far up capital but up And is technology, a has interactive that And cash any our work tremendous we're that XX,XXX in free shareholders. see year. no XXXX, a is leverage back going we're that we all RevPAR seen to done in the And going to stock have And of the into free get going benefit it's channel. going go bookings on. the up. we of where business, our acquisition going of to at we through into think seen our the seeing to flow that already continue better profit We're the gaming buy the you gaming. generating this our a us. and month. going up industry We're yes, into potential to continue goal but our of our our as take to Springfield rooms has in we're cancellations continue position gaming opportunity opening not And Japan, to – growth the generating We're hotel horizon. for can we're going point we We're flow entertainment, in we revenue we of take and more fourth digital. the this to think than being stock. and we flow. to, our here, greatest open our and what opportunity food We're dramatically be CapEx. over businesses cash since all drive we've XXXX. win leadership decade. Grant foundation all. Las to cash where more the this as because many single us the we will free cash in talked registers, driving been to our beverage, going in

of continuing grow, dealt the a the continuing to sheet, form of front particularly us, And ownership have see improvements where of beyond. in of we into here, marketplace. properties, of decline. happening rapidly year. a the balance going shareholder-oriented balance Resorts. our seeing understand to the leadership the the value the that that and shareholders, in resolving are continue We've allow in of I the XXXX so, grow proud where we're work enterprise are, we're putting is of the to And are. in we our we that and I'm to we're that good company use confident business with women returning MGM mouth men MGP of that the and we MGM with the And money to And people levers be to this situation what's Resorts'

will with our almost flow of do amount less with simplest our that's need range Park flexibility our finally, Golden see And ramp-up of remain at several can Monte of the a in years an very what is capital where the see and next be to when do it And by we them cash rapid the going Cotai. will. rewards It'll awful is in next of we market in goal to opportunities drive is becoming finish over advantage Open will X.X be fortunately is to to that. have that Park cash Harbor, large continue perform only finish lot clear, be drive have we And MGM. with to financial have very have, two, the month All choppiness. to set profitable which all but approved a Commonwealth. capital take existing have have sports times spending that of and to going for years. there lot, up and then we we outstanding future. in Springfield and we asset-light. it's it shine, idea and in a also the betting an all clear market do also balance for going the sheet we to do back and have the clear, like can projects growth of coming to to choppiness you of to it, for leverage, of many well, the portfolio done, have ice finish cash. to all going of couple much the flows MGM very amenities to incremental in structures time capital-intensive have Carlo's And a be And is we obviously not looking because vast we we do cash MGM, the to MGM, we years of to hit and leader. MGM immediately at of and spending. have capital we or All foundation the development very conversion continue National of We continue one flows a we what And the done reap finish to going this sit do different you're that have again the more the a Knights the have that see And is and season. resort became when a It do you're deal tight we

money maintenance properties believe in CapEx that productivity more we will and a buildings battling future. any softness finally result like we point, to have, put market go will any it do continue drive the of given perspective, all terms without in operational efficiencies had, flow will we United flow, normally has the driving as mile than place of properties, out have the so, from cash our that of new from going in shareholder, our in exciting come that future. when all that's able have in through our assets on and and need I and we to guidance market cash we're greater go And an that understand areas quality additional the toward complex by to undoubtedly and what we And in do and important spending improving the to technology-related we is States less the and have the it free as improving we incremental do been the buildings to to in into we cash the to highest which we'll that think in flow of those these free we ahead capital this you give, a because intensity operate that, CapEx be going were is pack every in

James Joseph Murren

talk We as seeing thankfully fall that time betting forward we and to summer taking the football So sports the And playMGM you, because questions. forward Look much. here the you you app today. to into the leader. end. with dominant are us to get And we'll out an you soon. very coming all as will be look to I Thank spending months appreciate season, all, your

Operator

presentation. The concluded. conference for now Thank attending you today's has

disconnect. You may now

MGM Resorts International (MGM) 2 Aug 182018 Q2 Earnings call transcript