MGM - Earnings call transcript Q2 2019 | MGM Resorts International

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Operator

Good afternoon, and welcome to the MGM Resorts International Second Quarter 2019 Earnings Conference Call.

Joining the call from the company today are Jim Murren, Chairman and Chief executive Officer; Corey Sanders, Treasurer and Chief Financial Officer; Bill Hornbuckle, President and Chief Operating Officer; and Grant Bowie, CEO and Executive Director of MGM China Holdings Limited.

Participants are on a 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

now Catherine Park. would like to to over conference the Please turn I go ahead.

Catherine Park

Thank XXXX call from and International on you, welcome to our also investors.mgmresorts.com at the afternoon Chad. and press MGM the we Internet second earnings being is quarter This call. broadcast live furnished Good have Resorts Form make the the materially under provisions of contemplated forward-looking federal may X-K laws. those Safe the results On SEC. statements. to on these statements release this we’ll Actual securities call, in Harbor differ

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

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

GAAP and are in a find measures our financial can on release press available reconciliation You which presentation our to investor website.

is presentation being this Finally, recorded.

now Murren. it over I’ll to Jim turn

James Murren

and you, deviations minimal a had straightforward fairly another. thank everyone. We good with Well, way quarter or one afternoon, Cathy,

We’re on plan. extremely XXXX executing on our busy MGM

transition our as of us. headcount transition complete, operating part behind is is reductions now Our this model and

real We the back we to to coming estate you months. progress continue with hope make our in and committee to report

confidence, million us with alone. the benefiting as As an we our XXXX quarter earnings, the we into property this next improving and strong year tailwinds the from targets our look financial and This and next confidence ability Las of few MGM this in of XX to second the macro a future, benefit year, shares back bought we back hit expect quite Vegas trends us half to gives in in year. example to

We $XXX revenues X% pretty consolidated So adjusted came let’s in XX% our with with up million. into up year-over-year second much to net expectations line in and quarter. the get EBITDA

some business of one-time numbers add $XX items guess Strip to help power to properties going And together. lower probably I best at hold and the the million. about you’re that two earnings have We our those want totaled the understand

Vegas entertainment and were X% we across driving as expectations overall growth demand and food beverage our revenues. in Here in line results segments hotel, saw in Las with strong net

Our two-thirds games X%, non-gaming actually our driven were volume, up our demand by offsetting in driven both as led by overall one-third up strong actually and driven games flat gaming and and revenues up our handle this this slot X.X% rate, segments. by trends REVPAR declined which and non-bac hold Gaming were by table was of partially XX%, by all revenues baccarat occupancy stable roughly mass table were year-over-year. was was

to million of Our mostly Strip games EBITDA $XXX declined lower driven table XX%. hold normal than X% by

in a comping second was $XX XXXX. XX% we’re about against quarter reminder, a games EBITDA. million hold hold also impact the And of As X% the roughly percentage our table Strip of year-over-year that’s EBITDA

Far $XXX East volumes adjusted basis, The down year-over-year less that’s driven are was Strip up and still the play. million. to hold year-over-year X% On baccarat by actually EBITDA

X% the with Second X% or out about To our quarter Strip that’s and leveled about for EBITDA, volumes of size only the our have Strip Far of just X% baccarat consistent play our actually and quarter represents first level East from you, so of represents EBITDA. forecast. lower

slightly. were year-over-year, hold but XXX basis year-over-year XX.X% the actually margins was up have margins EBITDA EBITDA of variance, impact points Strip quarter baccarat would that been excluding second Our and down our

markets in XX%, in Park. operate. share XX% of Regional properties, of EBITDA many well and peer course, have the assets which gains market the properties the many premier our we of we us this profit Northfield were we drive up of across in the with Empire helps the from continue Springfield, are the to majority United And and original the the quarter, leader Turning inclusion our was our group. perform up to City And growth revenues over of second coming States

XX% benefit of increased sports properties from as product. quarter the Mississippi visitation our this for continued because more come increased to online during the and betting, encouraging is at with states that EBITDA us and

Over that’s quarter, hold China, about to $XX to have negatively did property million. weaker $XXX impacted was which than revenues of EBITDA MGM due ramping continued up $XXX Cotai. to to We MGM adjusted normal in VIP EBITDA XX% the grew million and a by XX% million

continues property, as And as I million, us but transitioning of Mass we had Macau were the XX% stable, said By to by up know over EBITDA all the mass strength. was though to rugged, $XXX volumes year-over-year. achieved by VIP junket business some somewhat VIP the MGM MGM impacted been for and Cotai. bit show there a market of rooms

with million ramp XXX% quarter. its continued million of EBITDA, over $XX Cotai year MGM up the prior $XXX –

and new is the And open, are seven allowing shortly. Grant mass XX more villas on already ramping, follow will Our attract are to us to questions. answer better your And these Mansion still always, as villas fairly line premium is customers.

Moving million. progress to year in achieve our of guidance uplift believe, MGM will EBITDA XXXX, prior million $XXX we’re We versus now we this $XX MGM happy XXXX. of with our

X of that guidance. thus our our it’s we end XXXX While, far confidence revise a the achieve of bit EBITDA million gives we XXXX. think us progress increased overall MGM The in by goal incremental phase will $XXX made early we’ve to

cost reduced earlier, is it’s have to cutting is labor, complete, As XXXX now I we operating work our while know exercise. just that MGM mentioned and important our fixed model not a

initiatives our for practices. ability giving position to to and key groundwork future and growth the laying scale the best properties creating efficiencies company the We’re

moment talk thinking. to about our it’s taking so And worth a

some the and with refining of on designed Excellence between land or spent relationships expert our management We model. collaborative properties. COEs, our of years to faster to structure consultants most the Models this Centers

properties. where case property preserved from to also the that set knowledge complementary COE MGM other, the at identity also each Further, property guidance leadership and this are we which level, especially offerings the key. physical strategies This at have ensure diligence portfolio minimizes the regional While COEs enforced due senior and thorough cannibalization. kept is is brand after presence know each and in market the we the is is at properties the level. of are

the well remain with customer and keenly centralizing and focused in presence our and roles functions responsibilities. clarifying Property engagement, COEs, employee on our as realigning strategic experience fact, portfolio by presidents the as

their attention focus enhancing can leaders full property the experience. customer Our to

a transformative internally, While worth repeating. this it’s been has change

day the customer not and We in distracted adversely have impacted. day been to our been has not operations experience

base numbers $XXX around savings. million headcount in supervisory with phase reduction It positions. nearly These all people approximately of office resulting let on of managerial X,XXX seeing was provide By of more were some the some positions X. off annualized heavier departments end we reduced So XX% me back X,XXX by or reductions. a the May,

labor, the components good revenue progress On variable on sourcing phase optimization. and making we’re X other

the implement of by to expect We majority year end. initiatives these

for our this so volumes This and remain the throughout out we’ve rest our reflects blocks building half for the And that XXXX, the is calls at business for we previous client Strip the current improving in looking the further majority the of levels year. feel where outlook year. of of consensuses comfortable as back highlighted

Vegas demand better nearly we The the see nicely we fundamental continue tracking of the And shape second backdrop actually sound, in robust half, expected our Las in all very very and Vegas to in in in are earlier year. and segments. convention business remains up than Las bookings

In convention near this fact, record year. a we’re expecting mix

next benefiting are We’re our rotations. year. helping expansions momentum drive favorable group Grand and from into a Aria couple And at MGM

the the the medium-term, right the the is the our progress are opportunistically in and also right need Las mix the business but booking business, helped group strategically summer to fill strong to. over we This base And center windows periods even by also customers Vegas drive is leisure to continue right hotels as expansion through months. at the expected And in improving lean especially always where we place our are current time, naturally city. leisure to while to to of more there, shorter, manage citywide convention we trends in

year second strongest the entertainment Our is company’s the one this the history. of of half in calendar in

We’re maximizing live and leadership in sports. our entertainment

its MGM new sold hit Resorts summer. of Of the heat dead just NBA out the and days Summer in two hosted course, records the first we attendance League were

in at also Mandalay home Aces the by are Vegas currently of Las its host the way Las recently Draft next Mandalay will the is year. one WNBA, Vegas the at also which the number Bay. hosted course The this coming to ceremony, weekend NFL Game and Awards All-Star NHL

Strip. the a the the excitingly, hosting home take to and to after the awesome Las the shift finally Las southern the the will of down center Mandalay Raiders end Bay before our for stadium. to of of resorts, catalyst experience Stadium especially its at Raiders by Stadium gravity the Vegas’ as of full all will And mid be advantage Vegas south location tailgating and we events of Strip most continues

EBITDA cash up Before we to like our key to of track to the $X.XX billion remain questions, XXXX. our few end touch by goals XXXX. drivers $X.X and We billion of The the our key remain and of per and objectives. between of turn project of consolidated long-term are our strategic on to properties newly ramp a opened strategy free over our adjusted flow of share MGM $X.X achieve committed on and growth I’d stated

dramatically and lower and our major is known. Our development projects complete are CapEx

no deferred accelerating as XXXX. worked on Our are CapEx, from are generate in to we’ve cash our done, properties this with such far and and free excellent shape expect flow, year while executing we all MGM we diligently

and well through gives us base model operating today more Our us control our this positions over cost cycle. far

end net between X capital running a of consolidated the is reducing to by X focused are on basis We XXXX. a on our strategy, times and allocation very disciplined which leverage

steady We aim back where buy our dividend and for to appropriate. growth shares in

opportunities value our to by in Japan, value and create maximizing Digital key being the estate. have We real Sports, further areas four long-term of

has let before so quickly our touch to committee, estate me Q&A, the which real on the been get lately. in news we And

been help with of January know you the working committee the has its back advisors. As formed diligently in was and

achieve optimistic right their very these owned will is worth and value. internal support flexibility per goals clear company’s sustainable guideposts streams financial the our fall. And MGM’s the in work real enhancing options share, of free committee’s Our timetable. are that early the value anticipate committee recommendation all with preserving the estate, increasingly on results must creating with goals exploring mind. maximizing It’s sharing I our and in track cash work am Any mentioning flow that shareholder of

that, Q&A. with for I’d to over so turn And it like

Operator

Thank you.

Joe We will question from with Greff Please session. Instructions] now begin JPMorgan. [Operator comes the The question-and-answer go first ahead.

Joseph Greff

cost, Jim, talk you And about $XX Can for more the MGM $XXX you And what $XXX year, more talk finding versus a uplift can million see it the we of million. $XX more with is just efficiency? then everybody. or timing and to relates this should prior than afternoon, the what issue XXXX respect geographically this that updated to? XXXX, million target from? to benefit within segments reportable Good EBITDA million the

James Murren

Sure, and is been else, Joe. charge results. Corey to here to Sanders, going women leading men a achieve very turn that over leading talented more these and who the really of to anyone better-than-expected has than I’m group

Corey Sanders

XXXX going million literally Hey, the upping number. operating to initiatives work, is we the $XX and felt is the XX around model initial from more about of was million which Joe. really different and it $XXX be the

impact some So same all that we the We just to exceeding in one we’re and other does. area that want that also. areas sure this initiatives exceeded have also make in the other

in So XXXX. but necessarily willing we’re as we to of and pretty feeling additional money bank, optimistic not think now, that about general, yet we’re it’s that confident is

impact And the second on was think each then, in your Was I correct? that area? question

Joseph Greff

right. or segments segments, geographic Right. Reportable

Corey Sanders

Yeah.

going probably impact So XX% is impact impact corporate. will XX% and to Strip, of regionals, it XX% will the

Joseph Greff

the ramp And Mansion Great. coming sense my just of half to in exit the quarter, a $XX sense then MGM million the more trying Grant, sort the for weighted June? that’s Cotai, maybe ramping? quarter out run trying The all how is good the XQ to of Grant, at with a the And quarterly was EBITDA sort in to Thank back you. was much Thanks. you. of of for just get get morning follow-up of of rate so And what towards for just me. the that of the that

Grant Bowie

the to Good the price we Joe. were And pretty actually obviously, of pleased increase. up see question. Thanks, ramp yes,

we’ve and well. earnings additional momentum and The half. actually So yes, with I we’re the seeing an think pretty critical The enhanced was is, point actually second we’re Mansion, there discussed in that as always growing building

quarter. of continuing the So seeing we’re that And growth pace the how I is I we’re it. would to see continuing would into – prefer third say that with pretty what we’re to happy

visitation. by is villas and And great, is all have end yield. return the seeing start run because starting and September, cranking into can online we most now we’re really the which to the we’re demand of positive, which importantly solid We’ll issues, really then

is good, but in-house reactivated also some returning pacing from the as primarily So mass, well. growth seeing really in VIP performance solid customers

Joseph Greff

Good job. guys. Thanks,

Operator

next Shaun with ahead. The America. Kelley will question be go of Bank from Please

Shaun Kelley

think clear kind us, guidance? is on sort But give of the So the think as you I today it’s top-line about any to out here. guess, kind broad months to XXXX of sort the that growth you stream? I baseline Just you’ve growth hard give margin? XX do of can of detail Jim you’re this on And start of – of your know, can thanks earnings really Can would you then on are the and just for sustain new expecting I clear. sort to you Corey, for your start as now basis started to hit do us what and months stride trying earnings think do how or we think steer your on of we investors based that fight? plan, want grow XX algorithm, this to the underlying or sort kind you portfolio how expect view to out portfolio from cost what you about of think

James Murren

million just first, reiterate So we’re number. to this stage, that at going $XXX

months in into we before about to the the If at revised number that we’re all. you X plan, back XX think, I recall PGP

So horsepower holistically here this talk gives I bit the happen of how early forward. to what period tackling a little the that confidence we’re we we’re through that us But to going institutional memory a say relative in that could lot plan. will have and of

properties. literally cutting I and down more from reengineering top way and have not not to to our that gaming reiterate it’s a in unique And be gives we plan the probably, to manage from basis are that talent is have industry was, strong is with industries. where company and I corporate really certainly, operating think our I using Disney perspective in that, a the more and good a because say, at of cost way our this, And more a we together a flexibility PGP And business would organizationally just marrying best oriented it’s to it have us expenses. example other time to the the companies people the this on very is the the akin real

Corey Sanders

we would the we all MGM I as offset inflationary mentioned, growth go sourcing our we of year should what and there line and than we’ve more to services, the bottom the there should think And Yeah. that and on could billion also of business, the margin phase take product we is here Shaun, spend on the what done even where And opportunities labor, XXXX anything increase there, company our X out Jim cost a bottom not organic we $X.X that on achieve do pure line. approximately goals. the but just in the costs side, the to add, on feel is

Shaun Kelley

that network about to that? very strategy Regional also Park, That’s you Thank it the me. it Vegas do has some it importance are then much. quarter guys as other so Borgata you’re just here, and big of between lot follow-up, cetera. Springfield, gaming. were positioned as alignment Las And and Regional database and a to the a you’re relates as with theme was out the just Vegas it how from there Maybe do you overall but feeding in of what significant Las done Great. for consolidation to the with has far gaming and et you’ve How thinking Northfield laying

James Murren

that, I’ll or Maybe part Sure. take Corey maybe of take the that. Bill then M&A and can

much didn’t look here, to we’re anything crystal else. trade to and the clear not Dorado in owning and Just at going We the them really what El be certainly like I’m we Caesars now. assets own, at interested we look before not

market. bricks-and-mortar businesses in opportunities be not at a own to simply other We’re looking to

As in we’ve shareholders’ bring resort, investing to just money entertainment don’t said, a we’re could if a leader bigger. we the be market be an interested component to believe we and not

it is perspective. is provide loyalty, going allocation good our believe is that to a betting example to continue itself, time, over a you’re more opportunity that our see other do over profitability the you, say the strong I goes in and that a to for sports Bill. from company, in going importantly that, not We and and Mississippi states resorts, of turn that, But to as more really And enhance the corporate only profoundly strategy of existing relates it really as to would time but I’ll by. to of

Bill Hornbuckle

now to now our Obviously, Thanks, access of been ramping our couple database. and took years and it’s look we Jim. is Springfield management of A now, at, to of with different Borgata, names obviously, growing, perspectives Regional Empire, with over strategy, since X.XX and of advent therefore, and a that a over we full added Park database. Northfield we’ve the to have couple

with is, what’s we that And so relevant do about what them.

quarter best Empire the since opening. second had before aqueduct the City Interestingly, ever, its right quarter,

and was about go has from year-ago. close a we’ve X.XX cross-play launched. it helped both Vegas. Park those play And encouraged and our by and also businesses we’re cross-regional so up to ability same been million encouraged of and by seen And when MGM out a sign of brand XX% about nights our over cross-traffic ups We’ve just had the to since we’re in that that. get our has new Las room

is the So I of strategy Northeast think in note working. the

forth price from as Las are into and off. pay Empire now to back Jersey, and starting Vegas import New from a ability to Springfield, people ultimately Our to Maryland,

Shaun Kelley

you much. Thank very

Operator

Hendrix question ahead. Barclays. next comes go The from Felicia Please with

Felicia Hendrix

Hi, you. Good thank afternoon.

So that been properties. very reiterated we in – your And in – EBITDA drivers your $XXX Jim following, something know MGM about of the you it’s you new million. million around for your there which Park which in earlier million well. the are suggested talked which of goals the the million that, slightly ramping and ramps below XXXX, prepared your are remarks, Macau, $XXX $XXX $XXX all included past, MGM could And in to look Springfield, properties new in like of

now, achievable? So just know still are if wondering seems I’m what that’s you wondering based on – you

James Murren

Yeah.

the by building property we you haven’t into gotten property As blocks. know,

part flow free setup see in about cash that but in and numbers continued for do so know reiterating the frankly, and have year next said than properties, last We the them. with even doing, do how those flow those here cash ramps we are that why of all numbers. reason those guidance, our And better is we of we’re a we we properties we Las are doing those know, macro talked And are Vegas year. late growth what

Vegas There at here believe, is half no we XXXX do better doubt we continue, and that XXXX. the into to doing is better, will and of back Las

at here look understand their they’re properties the at dynamic businesses and company. our Vegas, books the also the is of core growth very only multiple in convention have encouraging, channels. we margin think a business some but on that doing And leisure very This think encouraging where and now. Corey, on about how right, And not I mix, it’s right to look Las

ahead many we dug back and half the we this and is XXXX. diversified to accrue the places in someplace, to than And a XXXX we the half and first understanding behind are of of of and benefit Springfield, also, project very in other being into the frankly, have we year going this in like So that of discussed that’s value deeper behind initiative, if we’re company. good in very we’re

Felicia Hendrix

Okay. Peninsula, that. slightly a know on but That’s potential appreciate of talked which a call the for I outperformed helpful you’re optimistic also that about And ramp I the hello. I Grant, about the you’ve perspective. know, you’re bit – expectations. Cotai,

and of in in update terms that So Cotai about light you’re in then general? ramping, of just market just light if wondering, us in you the property of property could how the thinking

Grant Bowie

Okay.

don’t those if is we mass going has I to through Macau look any first, we’re patterns. market. Junket is customer positioned therefore, traffic see of are indicator to to growth Cotai, general we to in replace So see way and we’re correction, at On going market as we any that positive. we that focus we positive, the which ourselves. and for the that’s optimistic any in regard. market the there that regard, significant think in change and I always And still obviously is we’re And the shifted obviously, really share are significantly starting that in stabilized think

obviously Cotai going the area, if we’ve of and refurbishment we’ve of four to east the we of the the occur. effect not was working been the where And and which on last that, were Macau any see in continues, Now three, but to it casino months, significant. we – is going some, had

it We’re before the work get holiday. that October done accelerating to

we’re Macau. So [ph] positive really and [for the the from the cut] on just intensity focus momentum,

And good that so are got to they and dedicated management that’s solid, team property. a just

want about the premium us, performance on just in but terms not continues. positive. we’re for just the to step-up Sign-ups’ I looks The of continued in mass because It that really momentum consistently. that, that property a see area in keep Again, Mansion, that’s collective talking across we Cotai, reiterate to starting in

quarter focusing to is, to it been little market every increase undaunting, market and and we’re just keep but bit the a positive with share able becoming going still Our we’ve obviously but just bit more on. to increasingly that that’s quest more take more really is little as something we’re difficult, a

starting work performance we of to – now as sure growth obviously relative So property can Cotai make that we’re where to the through continued the we the right-size momentum and the mass, OpEx in well. that’s the in is also to

Felicia Hendrix

It’s very Appreciate helpful. Thank it. you.

Operator

ahead. comes from question go next with Curtis Please The Instinet. Harry

Harry Curtis

economies could in of talk margin you Hello, basis looks be Peninsula everyone. the roughly eventual scale in XXXX, least depending I XX%? Grant. within wanted you upside. mix several achieved quarter, of points XX% frame? get Can to you at even follow-up because the get you do first upon about it time might reasonable on XX% And there hundred beyond that second the like with The you, that, some

Grant Bowie

related question, a Harry. That’s

stabilized XX% really give range. period. them, crank we we see I able really think, Macau to on of margin XXs guidance that we’ve for were Yes, in but always sort out to to continued significant XX% higher in a the some

still I – think, a to will Cotai giving that always that we comfortable of some – going recognize will that we’re guidance the of but are is that strive we we the in that property, I’m pretty reinvestment the bigger to Cotai in course, we Yes, numbers, XX%. much higher. to rates at of But strive for be think those it’s last, can. get continue most sorts

Harry Curtis

there XXXX you Is to XXXX? that or aggressive it get think probably can by too to that is closer

Grant Bowie

we significant think if see to all Harry, things growth, were I market some are of those possible.

and I one price the of market pay the what’s the – upon to have of to is margin the those you revenue. strength dependent also think, generate

of market lot a that’s yes, that. I the probably trigger or getting you’re if suggest organic growth, that’s would for So trick the possible. But

Harry Curtis

And business? reliance the to convention I nature third-party to your portfolio. group and Is booking the quick portfolio the any encompasses the kind the M match of on particularly Jim, make the returning mix meeting the of just third-party shrinking as of of Vegas. actually size cyclical Very question Vegas the life? the follow-up booking of engines, good. And thought sense a really, the increasing that size Would then had and there engines. given size reducing that a of to efficiency of means

James Murren

our then having business And only over one the – our our here by our everything, We how we individually, at view manage we be start, the of not see And all in might of properties, do another. certainly we as more in. maybe than terms but do on property jump able So scale business, for Strip. one it managers. they what portfolio I’ll I’ll to look turn certainly Corey as to Bill in we leadership at or to look business

it’s outlier, I of them do fully that our our And others. Circus. of within is programs. in course, some MGM database has part of think not that integrated Circus been Circus our certainly The of noting worth M better Circus the most properties life in But than all life. portfolio. M are Resorts is not of

how Summer other very All and having have. properties of the do running example, properties League price But do company portfolio, at know, multiple a And convention certainly at was and a we good great a this we’re we our look side. week having that, a points and the is to even is multiple us. in-house benefit Microsoft great at in us as points to properties benefit before having price the

As it OTAs... relates to

Corey Sanders

drive Yes. decent manage And incremental because segment that especially has would need profitabilities our add, down now is we segment. than lot best it pretty had right gross even them. who a margin up EBITDA those What rooms a the fee they business per and Harry, other a think the I on investment toggling that and good we that we And all have profit putting used segments. and are understanding business associated of of OTA a have don’t we’ve years. balance more with on the have stellar of OTAs. and more the few we We that we in And probably our strategically as

James Murren

And said a is of what leisure good business, based I that. about example the on

Bill Hornbuckle

our I’ll our partners, Harry, a partners And business. as are OTA that important our final add, just to

that well. it collective, totality all. They and can And times, it, question managed it’s important we’ve balance, in on of but so be relatively we’re times, I they nature think at well, understand the we that at and are the demanding of the on great partners

Operator

Carlo with Santarelli from be Bank. will question Deutsche next The

Carlo Santarelli

personal little on a still a Corey wholly about kind balance kind are But model, opine of versus the and view? Jim, kind you the guys well propco? the estate to you think the that could thinking amount provides committee. through healthy your pertains between you, How financing of was MGP. I what Strip own wondering as that of kind then there’s if of indirectly are or guys own of as Clearly as bit EBITDAR opco, you is when it it ownership you balancing opco the about real

James Murren

our a months awful finance, Well, we’ve last to learned we’ve people financial, lot or advisors in us. both us, interesting And abundantly tax legal options with and X that that smartest as and clear corporate an creative things that of accounting for our few we and X in tax, the really lot options are over with us advisors, very of into of a work have front some the here, actually dug front of company.

estate the that that know in to MGM here That’s on assets traits all the from clear just also today, Bellagio. marketplace. around, are real misvalued speaking including at one the based is that owned you our we’re We has vis-à-vis happening

Thirdly, we’re full is aligned the enhancing which committee the economic the estate is of objectives, financial later stages to expansion. real that say, will to do in Board, our be that acutely because we particularly an with we’re anything completely aware

value MGM anything which with sell sense is if the under the we the operating assets think before. and we what And that do going diminish of we this in forward do makes the its is believe is properties sheet responsible will operating anything CapEx the key that that assets than of Anything is power. Resorts. we and of improve them. is its that earnings about an to asset terms company, all mix lighter company’s and do, for model, outlook, owning a be there privado, model which stronger financial both this Because between But balance won’t

have a we of done. we have work lot So

taken glad time. are we’ve the We

we’re toward knee-jerk educated We’re ever ideas later process the thrust say I hear this reaction is certainly before, we year upon you’ll that decision-making glad we today why that that we’re a any ago. more to our and And us end us that from of coming than and didn’t have were year.

Carlo Santarelli

then quick And helpful. very That’s follow-up. just one

You number were year, consensus to? that $X.X Strip couple dollars. that of I basis mentioned with referring you you million Strip take comfortable the give on for level, Las believe Vegas property a about is this or Is which billion were

James Murren

yes. That is,

Operator

comes The with Goldman next Grambling person from Sachs. Stephen

Stephen Grambling

quick follow-ups. Two

or seeing And about cannibalization yes, cadence? How starting ramp up properties on it? any like, even you investors the First MGM. expecting it’s halo It around Park again be thinking to in should looks benefits or the here. are

Bill Hornbuckle

full spectacular. to think, Steve, seen to Look, full NoMad, been exceptionally what get value, couple still tackle well. assets I literally company. has is performing absolutely Italy the will a with we’ve entertainment got XXXX is MPS of try ramp we’ve I’ll and that highest one. be has this in the through Bill. opening to, our score second

assets is unrated so doing play. Where on well. are and casino all those some need in of stickiness, And interestingly, the frankly we

we’re situated, X got we’re traffic at it; T-Mobile entertainment driving of and Theater, amounts note, We’re the world component grossing literally and the it. and look the focused midsized if arenas to on against are you’ve obviously, now, Of the Top theaters massive which Park right you – programming and in property.

relationship. Obviously, ultimately over benefit to full And so if take of the see driving I-XX, way Aria figuring you that And time, you’d that. marquee by Park against understand how that Theater we’re example. is of we showroom down leveraged today

got some benefit a full more it. we’ve pleased XXXX of see we’re assets overall, so you’ll with that through really couple board. ramp, on work do, the to it’s And to coming But there’s

Corey Sanders

is I definitely what then benefit the we’ve seen in neighborhood. would add And the

New month. York-New a had York tremendous

revenues a seeing quarter flow-through Aria, second close to peers is also basis. their even and outgrow the The continuing to And probably in its REVPAR which we’re quarter-by-quarter top EBITDA. are really on

Stephen Grambling

And once the bridge opened....

Bill Hornbuckle

of this sweet obviously, which, traffic the in Strip, great finishes bridge strip. West And those spot. one which the year, of pedestrian good is a elements October deal of the to is side a our That’s take eastbound over will Yes. of

Stephen Grambling

That’s I dependent is process the your you and clarity second on Cotai prioritizing next on the is how is few how helpful. but realize the are And years? even further And over next And still thought or reinvestment evaluating just renewal? on expansion follow-up there I guess, ramping, Macau. concession

James Murren

Grant, you do that? want tackle to

Grant Bowie

Sure.

So the front, on capital first.

a I very of Phase process built for we’re for X additional into preliminary design expansion suites the And time, what As the announced, tier on of tower. foundations deep we’ve same strategy. the actually we we also the is think top property, the south the already starting When at built we’re of expansion. completion at

its of Not that terms around see and XXXX, et working not investment likely now mix, We’re product through any in XXXX. significance product to until requirements, cetera.

insights elections no and lot the continue the and of through. provide she’s to will up, responsive same and always the to with a new we renewal, the we perform continue engagement, done, to diligently There’s able coming have of have lot on as On that. with continue to just way do is we exactly us we Pansy, be work onshore that just and – concession Executive Chief policy designed the had. Obviously, position

those to on, the other we’re to we strategy, making review through all things things that as well the now, know in looking build initiatives medium-sized as our came of right the processes, positioned that we all that working we’re sure and business. small continue localization sure we’re up well do so for make those to focused And businesses, midterm

So reason government. that decision we we the totally do this shouldn’t we’re understand is But a don’t positive, see for be Macau that still what any successful. –

Operator

next John The Union with DeCree Gaming. comes from question

John DeCree

One it up the guess of I sounds the if Corey, can back existing sales-driven was you bigger? that maybe group be it or on if year. half Just I high-level groups two business me. questions some picked for elaborate for getting like was in may you’ve wondering

in But Vegas, recap. little Jim, level, accurate, quarter, if program call, versus high in seeing on then because of last a some if time incremental sounds it sounds just last spoke of the the really, this labor the Las little driving more to but we of health optimistic right wanted of kind maybe sides we one when in other it MGM broad-based? non-gaming that that’s outlook. a bit and hearing quarter at a bit and it’s that confidence we’re of this of are kind of the Maybe like kind And what’s XXXX, of

about I again. think think I those throughout but little it talked views call, a the get to you’ve bit of kind important high-level it’s

James Murren

want first, do want Or you go to... Corey? to Do Sure.

Corey Sanders

the in Bay. MGM Sure. back bookings, Mandalay the of In year bit at year, a year in for the particular, the increase of is the the in majority

James Murren

seen in year. And non-gaming convention looking table just side, non-bac last of seeing of In the second than we entertainment of big difference. long an a very And on to hadn’t actualized Yes. seeing way, did convention very hadn’t that’s calendar more going is talking call, year. our year that at us expansions few the now. bookings have business, we’re And leisure news, what certainly we’ve the but the we’ve encouraging, The certainly awful time. into best about we’ve the anything think, The certainly half are even which before. I the lot which in fully at certainly in been quarter the seeing, helping talked than – year, And this front course, data a we yes, last stronger I’m a which facilities, is good of we’re the highly are challenging good in now, of we before the was things news. been what beginning summer, are the

thinking so in we’re on that now and now in events part to a more time information start the XXXX what to tailwinds AEG quite Las year constructive is about now booking more coming here to provide have this for when is – that over And are actually you going that year, we Vegas, be We of open And some changes of about. we’re XX very more Raiders there venue. a venue; going getting we next to Stadium into you think Las had we seeing expecting are year had here that Vegas into the more than point show year. up. data get and talked I view right. they’re

think just, it Bill, there’s Pac-XX? about was today, I the

Bill Hornbuckle

Las Yes, announced Pac-XX ‘XX obviously, tournament they ‘XX this here and in morning, Vegas. football

James Murren

obviously, exciting. the otherwise, of is reminding would, everyone pedestrian working on foot recall how Mandalay. again, how maximize in shut stadium, creating in Hacienda town literally because Excalibur of Mandalay backdoor the And up scale, the the we that down vehicular hole Bay, benefit in one things that do having that we really of a fill December, Bill maximize And for his the which is In is which and to in to are team the into traffic. you going this Luxor, they’re community traffic, our do footfall experience in that so it’s

walk congregate to going walk are into people back. our properties, across around stadium So the I-XX and

improvements are on infrastructure the benefiting The certainly entire community. other

say Las the the evermore in I convention is on So signs. of business, we’re all in non-bac XXXX ability now seeing effectively seeing that because more what table non-rated play and marketing Vegas on to positive would our regional side, And our cross into leisure what are we’re drawing table yield slots. acceleration, business the on play,

the cause one rooms, which is just whole us. for to maybe compression And symbol, notably I is other which going but great in town, guess,

weekend Our friends N at day. booked It in Day AG booked the first a Vegas, XX,XXX in called tickets festival X.X November.

draw this So the appeal still the community on incredible. of is pretty

will cause significant and amount compression obviously, of so, And folks XX,XXX that can. a we

but compression just did, will he can was coming. and that continued only not enthusiasm So buy the any we rates for stretch, drive

Bill Hornbuckle

tournament during Imagine, Pac-XX isn’t NFR? the

James Murren

year. this after right It’s

John DeCree

It the depends in year.

James Murren

Yes.

to on different amount going the entire regarding another so excited for looking be – is and by to incredible to and that’s invested benefit in to in many town, us. There’s going being the up. opening Vegas benefiting, of draw this that’s town infrastructure that’s Las parties lot sphere, World Resorts for going forward a mentions really and we’re there’s So certainly we’re good

John DeCree

quarter. the Congratulations on

Operator

question comes The Stanley. Allen Morgan of next from Thomas

Thomas Allen

about So just talking Macau.

down your do of think that and deck one of And their peers the of Grant, going reported to how go seeing premium So too? was yesterday, you mass how going up. rest and year-over-year, trend, were highlighted it’s mass kind revenues forward? you Are

Grant Bowie

no. Simply

positive. it is be pretty strong whether the still maybe the also to difficult solid We’re through would and the be others. pretty judge in summer. gaming a to building, seems grow slightly a bit continues But that mid-mass seeing acknowledge games premium But also in I we’re can to summer, to business coming this cycle mass different

principal in we’re the comfortable there’s that in. that we So running are both us, overall for segments there for us, growth

we’re So not seeing effect. that

Thomas Allen

to And then gears Vegas. shifting just Helpful.

going that and but the Q&A, been We’re that. to I’m REVPAR sure deep on in happy all you’re there questions ruin I’m firstly, has

how it Just you about business on quantify to your there REVPAR, REVPAR, fact a manifests focus way I manage that target that? Or would from has itself away shift be that better? been any And helpful? mean the helping is

Bill Hornbuckle

Bill. your we M rooms casino instances, our question the ultimately, lower to and database, most cash marketing, yielding money our in again, it about has yes, quadrants the Look, managed on at REVPAR totality Tom, make The and the we’re some us looking cash it’s helped life the answer business, think particularly occupied by business. basis. some on of the looking to of of the is

several points is whether up of always particularly collective. so which couple REVPAR, been in and And the couple we’re marketing, I we’re months casino X in how indicator think the to percentage think an over leisure, meaningful ultimately of bigger a doing ticks our expense basis or in this to I up hundred indicator, year, a X points last of is managed X, X, the the while we’ve betterment. somewhat in And

Operator

The will Katz David next question with Jefferies. be from

David Katz

financial from it’s I follow asset topics you wanted the on Congrats that the used around asset that fee opco we the to circles light and in quarter. one versus debate REIT, the is borne I perspective sort Jim, some of earlier And actively on can to one And and light, up up? refer term propco. servicing streams, term assets just are much it about still a issue the operator. the owned gaming you in of of but how by by since seen of wonder we that think what where the came have

James Murren

Sure.

we’re We the have management models certainly study not of a have lot different that studied relationships and with REITs. and company analyze, hotel you as a

the in guests. entertainment business are a is specific that experiences our We company entertainment that creates for

that expand our capital. to of as we in time good expertise by we expending is And revenue of lot over also without and using a and ways. think profit sports really will entertainment We drive betting brand our know a in happen I streams can noncapital-intensive use our example revenue what expertise our

use land also Vegas, through our people think or to what’s I they Las joint of us. help partner partnerships investments, us finding happening here people also will using where ventures in with through encouraging

are We better And than hotels. hotel company space that in no managing that’s the the in are non-gaming out developing business. also there we feel we and really in is there

where can in our elsewhere be that expertise are We’ll of doing that some knowledge. projects doing those capital-light and deploy as We’re we China. well, our of some

we that are of for We responsible operating. the CapEx are the properties

so downturn will a that future. model And the be wherewithal – in the with be that improving lens lighter pursuing our will the financial asset of used be will done through we’re there an expectations

MGM, we’re Fortunately far last today downturn. better for than we the prepared before were

specifically. know We built, projects manage our We decade capital no that we know to can we’re being were now be developments very ago. in that have what ‘XX, major We have we no than a we underway; is ‘XX. more nimble. we’re major CapEx going that know are ‘XX, We CapEx more because ‘XX, XXXX, of we know diversified MGM

to to economic changes global able more let or alone even changes. changes, react We’re regional

what And there. we owned do so operating of MGP, about that when do we are think with our units our the assets we part with assets, do

have are assets in equal. And the downturn. not equal assets are all you’re because And MGP they all have busy, certainly are accretively, I quality stages been We too, if not of they’ve later team. think, but the been very disciplined you’re very, acquiring assets acquiring been focused, terms of assets also assets of equal proud in a all are a certainly not really when in They, cycle.

happened saw markets during position where the one went property But we Borgata downturn hasn’t Atlantic last be in the but in in it not leadership Detroit, yet. It quality We happen Grand City whether had where it estate bankrupt real quality in the MGM gaming real the and Growth A commercial, the Class doesn’t Resorts owns estate, asset. that’s It In Properties classy mature well upon retail And of in they And only MGM depending B real areas estate. real that counts. view, market will because in investors. estate. residential, in Detroit. Class more differently will. to own MGM that or of value Detroit known space, our office,

best stability our Growth And improving all including resorts. we what so capital we lens can in our financial going Properties. just shareholders, value getting just own, as are understand MGM fully our the provider and We viewing all MGM the obligations of we’re we through we to that terms of the Resorts, wherewithal, the in our of financial maximize our this how feel for OP units

David Katz

up, to follow again back of to wanted [indiscernible]. to my be last. topics the as since just might And I other close go I one

subject of to are. the wanted clear what On the about boundaries M&A, I just be

acquiring more you or is of to general pursue think your where would inward sets could and you some – pass what expectation But the size? that’s focus I the is plate. too some be up, on meaningfully on property of have opportunity attractive a there set that much some circumstances

James Murren

brand pursuing. foresee hard something you’re were We and affinity. that major that we or a with we should year. of where we’re a me has take at city, look for asset presented this a very already would not It’s that did aware look to in would high quality It We strong earlier a something and a property as well be did. at, certainly MGM

And so wasn’t looked course, it, it end on of at something up nor actively something, we and we is But opportunity. passing and that anything else we’re pursuing.

earlier, what to believe we anywhere like we don’t betting maximize we we own As States I United to need what is And sports said opportunity. the any assets in have. our

that resort. vast Empire we with Empire diversify we strategies. opportunity And is think why capital we an or very reason as investment is a only is broad-based City of I good outsized the will City example whether there that. have we a therefore, over it return and fits allocation Certainly, a so believe believe our at not on that time can into something would within And look

And that so answers hope I question. the

David Katz

just but not all today. my for clear, them perfectly questions, frankly, of are answers The

James Murren

Thank it I found you all you today. to hope us informative. I you. want joining for And thank

couple are of we one Just want things, with satisfied to is recap on quarter. a second the

pleased We’re in and States the property balanced over both been, throughout how the really very United has with Macau. performance

We It throughout Resorts we the our as And you’ll a balance bearing have of been Plan. benefits has the is at are MGM of that into incredibly the amount of and and that to next see implemented year proud accelerate MGM fruit date year. women which tremendous here this speak. men XXXX work as

free conservative X a $X.XX targets Xx performance our and cash is, Bill, our any market as said, We’re share in increase a we that our us. year confident shareholders. financial we myself, as half our always targets, leverage XXXX. With a now for that, shares, that dividend capital billion $X.X while sets as have XXXX thank return really Corey, that of billion we’re up buybacks per under pleased and we’re that flow are around joining it And I to that it very positive allocation our hit to for EBITDA, entire you much to belt, you Las running Aaron, we for from strategy and a between of Vegas consolidated have. Cathy, macro that the always, well while going is for And perspective questions doing as $X.X

Operator

thank And conference for you now has The sir. you, presentation. today’s attending Thank concluded.

disconnect. now may You

MGM Resorts International (MGM) 25 Jul 192019 Q2 Earnings call transcript