MGM - Earnings call transcript Q3 2019 | MGM Resorts International

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Operator

Good afternoon and welcome to the MGM Resorts International Third 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; Grant Bowie, CEO and Executive Director of MGM China Holdings Limited.

Participants are in 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

would Aaron A. I like to to over call the Fischer. turn Now, Please ahead. go

Aaron Fischer

quarter Good Internet the you. we Resorts call afternoon, welcome being XXXX release third is to This earnings our live at also investors.mgmresorts.com the Thank on SEC. broadcast call. Form furnished the to and have International on MGM press and X-K

differ Harbor materially call, On those Actual forward-looking provisions Safe of make the Law. the we’ll these this results in under may from contemplated statements. Securities Federal statements

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

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

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

recorded. Finally, this presentation is being

I’ll now over Murren. Jim turn to it

Jim Murren

you, special thank for on thank a sure her and I’d to Japan who to out see is getting in listening in is like son but for Park today. Bowie do maternity Macau Cathy afternoon, Aaron. early, early everyone. a with in now am Grant to up Bill right getting shout to up beautiful I Bill how you also and to Hornbuckle give Good Well, we

in. dive let's So,

with successful busy expectations. another had that quarter and results line were We our solid in with

XXXX market and of properties. and the execution financial given ramp we Looking continued healthy our for fourth about conditions MGM the our feel forward, XXXX ongoing newer quarter good the the of year plan,

estate January back into we've Since our that in real I recall that the non-core began work in continued was get of align our our step was strengths. with that XXXX investing in real start formed our maximize the want of do and complement process I a value not we to If assets. to results, we estate formation assets assets the we when another in of committee that the actually committee. begin then, own with to while MGT to strategy Before shred

of results model. and fact advisors transition to in light our accelerates management with asset supports work and an the The committee's business

it's For to the MGM, a means to of light of The moment recently agreement. return high that Blackstone separating spend opportunities. focusing that intensive and Mr. I asset capital important capital are recycling Bellagio’s lower to ownership Ruffen milestones to think Circus end. important real ROI Circus on sales Bellagio and announced estate assets into And

the That transaction real value but was with would agreements steps that ever the deal analysis company just world's has of transactions the product entered while on minimizing developing for a by rather that leading into, our the times, of of we've partnership a sale of it that a one done and the means These our The process our property, base spent one of represents time but a end many led this to received wasn't shareholders, the has structure estate key most no of were and investors. sophisticated friction journey. costs. exhaustive asset Bellagio significant maximize

financial deal. Bellagio a future. transaction blueprint to estate than a The more real us likely the represents smart provides for It

Las the Grand sharing before that the with you we underway, to process monetize more a real of related this and Vegas well is fact, anticipate now estate year. In to MGM end on

in evaluate of the and stake lease for stake benchmark to MGM sales MGP, gaming We're will confident Grand. ways us the that new sets Springfield, of also course in our XX.X% We our a net deliver and help MGM for maximize the best possible XX% transactions value Bellagio will outcome would CityCenter.

now. in that After own really see We’re we're not anticipated real estate does excited sheet MGM our of in assets. meaningful capital and return, state simultaneously real need a allow phase work, be, future we very Monetization our leverage what Resorts will can lot shareholders. of the to balance end about with to a estate and investing high while core growth that low initiatives achieve assets returning us will to significant fortress

and as leading This brands, to flow concepts, to with flexible manager more restaurant, allows of a asset MGM transaction concerts lower leading gaming operator gaming of in better we're and positioned customer and core transition hundreds in cash capitalize that share, and and meaningfully and free confident on With that light shareholders structure portfolio MGM a entertainment should higher growth. result financial unmatched of shows, is managing continued its our per database properties. leverage competencies expertise developer, reward

Between estimated million other expected to transaction $XXX $XXX Bellagio costs. debt cash and Las and to Vegas costs the $XXX $X.X cash transactions, we Circus the billion breakage and taxes million net expect of Circus about about of proceeds reflecting approximately receive of million

to proceeds with of expect We from remaining reduction we returns given $XXX buyback outstanding our market initial authorization remainder capital transactions current debt majority for expect the the these and conditions, promptly to million use this for the of quarter. the utilize

talk now let's So, results. our about

and million. EBITDA to third year-over-year The revenues in with as $XXX consolidated X% up came quarter expected net adjusted up XX%

exception were across with the results Vegas of all East Las by solid demand baccarat. driven of strong our Far segments in Here

domestic table robust, in also Gaming non-gaming business XX% up. due softness X.X% business convention ongoing declined somewhat was Far revenues This in baccarat table with East X% exceptionally to revenue increased remains was revenues game by increased slot X% with games up offset down by volumes. which X% by Our our RevPAR which

was on increased to Our and X% year-over-year $XXX hold to X% million. adjusted EBITDA a up $XXX by million basis, EBITDA Strip Strip

year-over-year. EBITDA quarter Strip XX.X%, up third Our margins XX basis points were

during up the with Our with the the quarter of market up XX% regional majority properties continue of regional in revenues positions Empire results delivered to from and perform the every Borgata about in. Springfield, well strong just both and EBITDA quarter. City third once market proud XX%, our very Northfield we're MGM Park, with the And growth leading net inclusion National portfolio in we're again, Harbor of and

$XXX revenues million net up This performance disruptions and $XXX the China's million marketplace. various believe XX% to due grew property EBITDA given represents to Cotai. the MGM XX% we that in MGM of was excellent continued ramping adjusted by

By million property, in quarter. increase EBITDA, Macau the MGM XX% ramp achieved EBITDA reflects market. of continued Cotai weakness million, the the its million $XXX of XX% to a second which compared $XX in year-over-year MGM with $XX down

ramping Mansion very nicely. product Our is up

market, resilient significant as and your to and in line there answer to will always cash be our of remains The continues have VIP on portion some we but which Grant segment very of course does market flows share a mass not represent challenges questions. the gained

the plan XXXX savings We continue progress excellent accelerated our and make some of enhancements, an targeted quarter our of all on on achieving to basis. which revenue MGM during were

and MGM initiatives, approximately quarter. revenue to able savings initiatives cost of XXXX million result were $XX during the achieve we a As of

EBITDA year that the uplift We will continue increasingly to be beat we meet on of $XXX confident in our million or track uplift year. to by goal million next this EBITDA hit end and adjusted $XXX adjusted

detail here is Of course provide Corey any around that. to

all the fundamental of we and Las backdrop Looking nearly healthy out encouraging in demand see further, Vegas our remains business segments. in

convention shape citywide on the and on full fourth XX% Our are room Vegas down this up XXXX to continue despite we being convention convention for hit of in actually to quarter. bookings nights Las year track mix a nicely nights in year of the record

also convention is that of are will always be as to this XXXX legacy first see naturally and And Las the windows time. favorable the shorter, the favorable booking CON/AGG particularly particularly we also hosting trends citywide in draft excited which there support a while our year such NFL strong leisure XXXX, we're for Vegas course expected be for business given city in rotations properties. And

fourth to prior The challenge Vegas. continues Luxor. Far du in extremely we're And opening Park and also Lady of with but comparable about of of quarter Cirque the Theater our years’ our entertainment return quarter were excited from volumes and latest in Soleil course strong at here a show remains remain of we strong East when Las the run at baccarat live the business calendar Aerosmith Gaga face tough course, the a

strong UFC the course Alvarez the Raider of Golden XXX. fight sports the And PBR the next our with Stadium South the Mandalay current of to NFL season also be Vegas World which calendar opening two underway, with getting weekend, a Strip notably we're events Bay and plus will this a Finals Wilder catalyst up year, the closer coming games, for Luis one and Luxor. We properties positive Knights and fight Deontay have and boxing very

X consolidated times By basis leverage basis, X light intend to on of our leverage leased net excluding of a MGP. between to be times. execution of we have On X times approximately the expect XXXX continued X strategy, a financial domestic we end to through adjusted and asset

driven ongoing our consolidated our strategy. track on newly of be and the EBITDA the and MGM of allocation ramp regional of year. properties, achieve market $X.XX to $X.X by stated billion Las Vegas billion We plan next of by free our think to This will our in properties, of goals adjusted remain share cash per conditions and I end also healthy flow the adjusted disciplined $X.X benefits in opened XXXX capital

believe will and dramatically accelerating all cash shareholder discussing, in value We on As create and And free result lower that will accordingly, flow. have betting opportunities sports projects the better continuing unlock major focused our we never value transactions long-term evaluate resorts we our condition. capital in by remain our been that Japan, is been CapEx to complete real and estate. execute have on including are of our of which

we partnership a Just excited yesterday, Yahoo were Sports. to announce with

the creating and the with Our very joint betting is which is sports with sports By operations in Yahoo's GVC, sports a interactive in dominant fantasy and combining partnership. betting comprehensive of and have venture the industry. our digital MGM network, are we goal retail content most to Roar, platform

everyone able two of properties Vegas ultimate you you increased as Yahoo We're they be Resorts content, believe XX and on when from And experience is consume opportunity is into MGM and to MGM all similar that. best to world-class and now have I our such visitation what regarding about. mentioned of bet regional sports-related who just motivated be user strategy the brands We an watch, online. our part and people experience to Yahoo's to the when driving create And users philosophies sports sports Las benefit our them combine content, experience. bringing million share will sports will will properties. both that

turn our it with And to the I'd operator for like over that, to Q&A.

Operator

Thank you.

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

Joseph Greff

talk touch about the, well I recent as at about, touched estate sizable Good I first on everybody. was taking the on committee longer Jim you outside question activities? that the you of why about of My Grand. afternoon real or question estate maybe guess the wanted is the kind MGM looking Can of to monetizing real

from about on you proactively maybe for that And seeking then value the you can of X and the of monetizing additional deck? of the talk some presentation other timeline referenced real then estate earnings the slide

Jim Murren

Joe. Sure,

exclusive frankly constructively Grand, of focus of rent our and MGM that very than together but the on on were time year Bellagio, year, earlier once, inconceivable organization forward a way the accomplish execution achieve even on got to precise management the alone we trying felt we most evaluating here this all with very a valuable at way we was to was particularly into at let asset. rather board the Blackstone everything to with on to work that and ago. First an felt them, that best all was create same to best MGM multiple strongly when able were forward phase We

trade we our Las on to XX.XX you best As $XXX shareholders last Vegas with prime XX.X. because turns, MGM That's at we and more of million the Estate the of asset Joe, times three possible counterparty. know, was achieved that’s Real value focused

profit a turned of valuable, And premier sights that. and a we've Las one set the five Vegas, felt for so blueprint MGM equally no would top in Grand our transactions benchmark is And now, we here a assets that decade. for the performer a strongly that over doubt which provide for to

And work the lot last because work done on of and for Bellagio, several a the months MGM it the quicker makes timing easier. and we've streams over the

equally which And one importantly, deliberacy to tackle best we've and more we the a that or execution and that proceeds at this to with of these so, was form time led gross proceeds projects achieved. has believe net importantly,

Springfield, we stake, So on course. MGM of Grand EBITDAR decided that's moving etcetera course, now into MGP our and Bellagio why be we'll OP units, evaluating due and we're in our MGM

what was repeat question on The – Joe? second half is your that, the could you

Joseph Greff

timetable the about talk MGM Maybe the beyond for Grand. items

Jim Murren

Oh.

to of year. Circus transaction quarter close real the Bellagio end So, and the by Las Circus, estate this expect Vegas we this

that going how to will before of Grand you expect able any transaction XXXX to the to tell Vegas about we'll going be to would that which able all early likely we’ll We we're you end expect transact MGM we to Real be Estate, talk into to, be you year, Las obviously to this how we're completed bring by there. the be most

mutually exclusive not real work committee doing. it's is the And the and management estate that to doing other related is

months So, XXXX. more early in expect of coming come to over part the

Joseph Greff

of and kind it’s you're about conjunction then [indiscernible] a acquiring market And makes you're of that and sense. neutral, this might be in maybe with this there. currently my leverage follow could in a things other just lot get out that if in it's to Great. discuss real Maybe estate to up Jim and activities appetite counter you talking geographically your if particularly in but

Jim Murren

are of on not M&A I in not themselves not Sure. now present think really anyone operations. anyone a our any our time the Joe. right time best time we the near over they us any or in board's over We're use focused of believe and We're of front at but things at company. what's term. else’s interested look would that's but We're that right We’ll time as looking we're that to dynamic in want acquiring We now. this else's at engaged assets point anyone in

Joseph Greff

Great. Thank you.

Operator

be Grambling will go with ahead. question Please Sachs. from next The Stephen Goldman

Stephen Grambling

prioritizing asset I guess on about the renovations? think thanks. those you're up investment how the Hi you at expenditures are follow property level changing sales, one or – capital and how

Jim Murren

No. all. at Not

properties because triple as get these As themselves the you will make financial properties. and us decisions straightforward out these transactions estate the are a within once we with the is the that easy we control for spend the capital will capital very assets real our is worked operator The transactions. and of into of consistent that go over – deployed actually relatively net the the have be leases history that

of since something amount back our Bellagio, Bellagio with XXXX. given That very the that investment with comfortable Bellagio with put Resorts acquired way in got was obviously in MGM we've of Mirage counterparty connection into May

its years we over about of life, the of of operator Bellagio for operator lease on its of be years been most So, we've of it to based the and they're time somebody going they’re and whether to XX the owned it, a continue XX are XX here life And for years whether they're at going we'll a that invest earlier, to in leased I else. likely said to most or properties party. be to as leased properties wholly whoever's third

Stephen Grambling

how impact looks Helpful. might that a will that ramp as like any you Thanks. as any But ramp maybe the to And situation quarter, changing it you progresses? year to how Kong in nice maybe Macau, over in see then you're gears Cotai. seeing the Hong the can from talk cadence dictate

Jim Murren

Hong impact. of but is obviously, haven't it’s bit Thanks. think independent us situation Actually seen we Kong any confusing somewhat little I a direct the

are their I starting strategies. travel think change visitors to

out So, our of out those come got we make promote we get [indiscernible] valuable sure and keep in and separate can a keep that of, just sure to allow in destination things to effectively. our, and and unfortunately customers make we Macau

there. nothing So, really

Stephen Grambling

I'll back queue. the Thanks, jump in

Operator

Thomas Allen Morgan with ahead. Our next question comes from go Please Stanley.

Thomas Allen

Hey.

– taking Can methodology a through like your down So, balancing of buybacks billion. obviously, Thank strategy leverage. you. asset you bringing over or the us allocation, your just proceeds you're about with starting capital on so sales in tell say $X lot

Jim Murren

Sure.

believe next to it that be reiterate will assets is what state – we how I is will the state going think over end because our two. here continue to we Resorts can it's – continue the it’s to end – it’s year all properties light. that and we is are actually important is or in going which properties, The asset in we operate. state are the that see end MGM to invest to invest happen First the It

investments real and it simply technology on on estate properties higher will and bricks not we make on believe an will on be gaming it investments And and investment in but more mortar with basis but return than will into done static into global areas sports, emphasis non-gaming only hotels, be technology a also on that operate a our of we on entertainment. owning on

So, the state. end that's

experienced in properly sports etcetera. that's to shareholders, for reduce, a and know MGM there why are leverage. In there's we We terms that that do should large of significantly best financial tackling actually we out believe Resorts reduce our Japan, entertainment these you certainly of is and in not areas economy believe competitors, important our

overarching times of it's And so, get priority next down an to financial X core that leverage by leverage, the year. to end that

we But capital shares more our can economic and And dividend repurchasing being been on investing in on and returning stages doing have sure of financial investing flexibility it as and at means that actually holistically. and all otherwise. flexibility, believe we look form We we reduction, it joint focused in but through Japan do disciplined ventures very less making the financial sports have the particularly that expansion. that share allocation, in of while focusing capital in this dividends we in later shareholders we're because repurchase, debt have and don't on

grow reduced the impact flow. base, shares, we accelerating of our number have cash a free will over as of And earnings our it

future over be effectively the for holistically very look to have on have, achieve both announced and we based have transactions, months. to that we're we've the we next the what blueprint we given we we announced, at to able assets XX what but in so, that achieved XX it going And that believe

Thomas Allen

talk million row on And and had color. fourth respecting EBITDA just in Helpful $XXX for a you've how EBITDA there. CityCenter, can high update and grow you're generating just mean kind I of did that Jim. been us that's the thinking you that hold, then pretty you you on quarter Thanks, that what's success? strong about, where driving Thanks. the you EBITDA property, Can about too,

Jim Murren

Vdara, opened its month And the time. it's XXth Well, next ARIA anniversary. in right worst celebrating course, and all CityCenter of now possible

in dismissive out the a that came be So, Las years out XX were of Vegas, ago, one property profitable recession to profitability continue and will we had believe people before. it, been continue where accelerate of we great and now we of we it’s reinvest in gaps in lot and a to of resorts have it's and counted its the most new, fact, because so in investing areas

did restaurant product convention that changing We enough and ideas other we there, have been just its We've right space. up. success. very not the expanded great did we which drive convention dramatically the with revenue. We We when have will to capabilities meetings space have opened not increase dramatically

but show we driving performing And through on poor brand having and ARIA now a to consistently an the have improved called casino we better the and of frankly, of business and been T-Mobile benefit have we've a it have Vdara we without awareness from, had We have ARIA. brand campus. driving, Theater, lot Park program that and Arena entertainment new brand loyalty

casino it new business, the because and particularly lot be our quarters, more vis-à-vis our work ARIA still As more talking the of of some our loyalty, we could the Bellagio benefit of that you will and end. all evolve properties, in to into it's about or accrue MGM digital say in high Strip that investing not does coming properties relatively gain think we'll we a particularly to on

at any properties. from believe yes but delta is cash happening proud ARIA than we most room more perspective probably our so, grow to of there we're of there And flows what's that a

Thomas Allen

you. Thank Helpful.

Operator

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

Shaun Kelly

this everyone. afternoon, later I to your component. maybe promptly authorization maybe the remarks the to believe buyback Jim Good about in stick start quarter. outstanding prepared said Hi. on with something just allocation capital in you using

think share quarter. with or bit in was it Bellagio right the rate? little the us Obviously some around this million of I proceeds it can in come maybe some Circus? of color? that just a actually pretty you run sort substantial and repurchase Is accelerate there quarter Could $XXX were when this more give close you the the on

Jim Murren

think will accelerate. I it

Shaun Kelly

a then And more probably great. for follow is one second up Okay, but Corey. a for

XXXX approximately prepared the being the kind Just for a the million I rate quarter mentioned in digging contribution already believe in of around of the there. remarks plan, about at into run the $XX in was you

or you least have us Vegas. bridge maybe Could we they with bit or more expenses lower on could a core a in as because look that thought been timing help little we run at operating have sort of rate at kind Las the think would I little like year-over-year of

but You did of bit easy up fairly expansion little margin see a a against comp.

you be on Thanks. helpful. color can any would So, give us that

Jim Murren

Sure mind the by expansion, impacted play. East on was Shaun margin the Far definitely it in leap

that, XX If about you exclude basis points. that was

Strip. they're The really are We’re margin. basis up business, straight points about core where X.X this the there's less away. properties Comparable on because it in up noise almost you're seeing on XXX

happy with hotel, through have going of because perspective, So, the that. that of is food really beverage Strip and expansion and the we're restaurants will Keep MGM of and which is. mind really opening in expense Park distort where the the full to the the from increased flow

in excluding about X,XXX it FTEs a down particular, look at Park MGM we're the we When Strip. on

at we're that. And savings confident the we're labor on pretty least on so, seeing

– – we quarter like we into seeing recognizable Jim $XX As fourth And million mentioned going what mentioned his we prepared we of sorry. remarks, third we’re the had see in as quarter. in the savings

strong. – fixed found start have you'll through That's so monthly, components will technology seeing. labor process, other are come some going in in side the that is and purchasing scheduling we've opportunities also forecasting. variable in labor We The and nailed, pieces pretty including the the

increases start in the fourth of quarter be than you'll better ramp in some there. seeing would we As expect I And million. up to those $XX the areas, some

Shaun Kelly

Thank you.

Operator

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

Felicia Hendrix

remain ownership just ownership, or reducing asset you time I'm you've over that your a you that talked the low just we get a you you light on Hi. would would can strategy MGP, treat and there. a would mechanically Thanks you about that capitalized the divest if like majority back about that? go on lot. to as – have how think wondering how lot books your rent Jim, would

Jim Murren

Sure.

it let's Corey talk we too. So me, capitalized, turn and Aaron, something with I'll or start could about lease I to first MGP, it the then do maybe or or can

First, created MGP few ago, focused were on we years that quality. we and disciplined we when around tenant quality a very asset were ensuring

remember, brought down done And strategy that $XX a of a broken proud and we're as it's you we stuff public, to I tenant out degrading its most think it someplace But is share, quality. and going stuck of well. of what it’s buying was bunch core its pretty not

going that, favor between it mutually James Andy transaction if lasered only to on. down encourage in Resorts party characteristics and believe Clearly, lot going is are we're to focused MGM but and MGM race. that's there's I a MGP portfolio. to financial Stewart a continue on And not of to beneficial to And a and be we Resorts a can to quality do very always third MGP, the grow incented to MGP MGP, of is came very MGP in and MGP. close its the

look it the as equity long other for to so, to efficient will as our over was assets reduce to it done time continues some opportunities MGP but and continues access of in stake assets, will manner. doing only acquire as would so markets also capital do As a in our stake monetize quality MGP. in capital We it

any be at MGM under wedded is ownership goal least near-term, is to particular Resorts state. of that not get the stated XX% MGP. our in but that We've to near won't the end term

less that far than going basis. a own likely on MGP very forward will We of

so, is And has it a would look strategy. at the I way, I think MGM Resorts

itself. real It even quality being become It the Las The the estate anyone stage where here well owns was kind in predicted with and higher executed strategy assume and you wholly-owned Bellagio. given real MGP and the anybody to more a which multiple any very MGP up one jointly-owned asset multiple discount sets at us other work than on Bellagio than the has Vegas MGP on estate of of include real have certainly on trade that could transactions, announced Strip at estate, is it's else mismarked portfolio. just marketplace between Bellagio if light.

currently would We as never would you never as assume is. would it be it – wide

future so, is view no believe lot and whether of at we Resorts that any owns MGP on for it pre-disposed much MGM all. a And there owns how it has or

joint proves a third think Blackstone the with a ownership new also Blackstone MGM We point in where the to ownership. equity important lease negotiated very deal MGM than X% happy very is because the transact on is it as as highly that more lease someone out with that We’ll sophisticated party venture. has in have little terms of joint venture

we third or capital of do even operations, other be that to forward the are resorts we believe long MGP any dominant. we not as party control can the all of going a the expenditures, or as majority view even how should we own at the is and that anything illustrative marketing think landlord I the of And own have control

the our we ownership and we on end continue push share consolidate with we it long presentation. over to the as XX% golden financial there, type own consolidation remain as drops [ph] then still below EBITDAR would And statements. MGP up we on If

Felicia Hendrix

have also the leverage on you it's you but your not – then financial have – And that but Right. balance sheet. leverage

delevering just rectifying I'm of wondering kind that, story? was towards going more how So, you're

Jim Murren

core on at operational times. we we still about talked as X the X stuff, general to consolidated, focus leverage still and We're time focused we're in look between X the

that's our to in still continue As MGP long targets. consolidate as we

Bill Hornbuckle

Jim agencies Freeman focus exceeds, Corey targets. And, both preexisting either and that constant or leverage Yeah. adjusted we've meet our course, leverage, has and lease of on the to consolidated financial we'll improves been contact in that continue rating with

doing that everything we’re is So that. for

Felicia Hendrix

of kind that we out still adjusted and to X leverage reduced of figure how having we thinking we about kind if so scenarios use the future significantly things Just but and as variety should financial in model that times total. a were leased look leverage, X like, could

Jim Murren

That's correct.

Felicia Hendrix

debt provisions, bonds cost as make And have wondering Okay. of to transactions? so pretty looking pricey if foregone paydown, just with some any a longer dated then I'm at that whole just your the you're

Jim Murren

what now. on do you to costs are gave premiums anticipated in that the markets we're debt lower. have We also and be the near-term maturities And we’d going where focusing friction with the just debt we obviously, the

Felicia Hendrix

so, all of down maybe into use so assume? just that think you of to that assume wait. Okay. longer you because so that that people But might dated pay there stuff the fair some was if likely getting to – were another you're some you might would I transaction Is again, kind debt.

Jim Murren

everything We're and at it's going on to don't think the to I out for lay our us strategy call. prudent look

Felicia Hendrix

you. finally I'm not – be would be Japan, Okay. JV, And mean would that appreciate just be I would assuming but I Thank a not that that then on asset that. light.

Jim Murren

Not initially, no.

Felicia Hendrix

you. Thank Okay.

Operator

with Carlo comes The Please from question next ahead. go Bank. Deutsche Santarelli

Carlo Santarelli

Hey, guys. at the representation guys fair corporate. assume it I in you of think Is know terms call bit that the Thank XX% XX% talked I a and XQ? fair $XX to Is the it million kind in million. about of about regionals last you little talked you. on in Corey, the in just the$XX of XX% Vegas,

Jim Murren

say are regionals think around would Yeah, about probably XX%. I I

up You're at end getting ends that going up Center. X% about to City

So, XX% the that it's in . market Vegas about actually impacts total

Carlo Santarelli

the little billion. around about for I kind and year was that Jim time bit the Strip, Got And then were at this you the think $X.X on Okay. you about talked number a of call, last it. consensus obviously a talking

little of that well-articulated things end obviously a fourth been of out that's called Far high as quarter play You tailwinds, VIP kind a a well beneficial kind continued some of as headwind. in bit or East are some the

As you pretty outlook? term into and we with still comfortable about the overall XQ the XQ think near are

Jim Murren

are. We

with comfortable the are consensus. We Las Vegas

– But thing as as have a We think $XX hold whole the I about less control. comfortable to than only had about the think we've yes, hold negative where million we're beyond is. street Year-to-date, our impact.

Aaron? $X.X street billion I is think the around

Bill Hornbuckle

$X.X billion, yes.

Jim Murren

Yeah.

Carlo Santarelli

And then…

Jim Murren

business fourth we comfortable quarter. is reason what quarter quarter. we're business We're the into And with quarters that, – this convention The looks we're solid it. the in why very fourth obviously, entertainment like in just see three our and the

our that As plan, ongoing by XXXX just offset weakness the mentioned play. that up that comfortable us we're makes will all Far that – within East and so any Corey ramping control that's MGM

Carlo Santarelli

release And a that I methodology you an element helpful. I changed in methodology XQ levels. Great, in in additional think and to was are is it guys the change and adjusting actually, noticed seems that's be the just, hold the like how like maybe your XQ. to baccarat seems looks or of in then It your there presentation for

went holistically. of kind could through thinking? you the Just talk what into

Jim Murren

Sure.

business of between competitors mix we that our and competitors, also to look at the look at our better non-baccarat, at and think we at look we and felt business was it As and it probably way. baccarat look way our a this there

with XX% The out XX% about we've normalized baccarat range which done being on what around So, is between to XX baccarat in to we’ve starting in is QX, midpoint normal broken there non-bacc, and normalized is XX%. the we're would the non-baccarat. the – and range XX% XX% be

past, more competitors on our the used in with way. is consistent hold we've and that a rate so blended biggest Strip. compared And We the or think just

Carlo Santarelli

Great. Thank you very much.

Jim Murren

that's gotten have some we good you. feedback Yeah, of a lot actually from

move. we the that's So, why made

Carlo Santarelli

Jim. Yeah, Thanks, for Corey. Thank you, sure.

Jim Murren

Yeah.

Operator

is Harry question Instinet. ahead. with next Our go from Please Curtis

Harry Curtis

to Hi, Vegas. start in good afternoon. Wanted

PGP it you got think it, a sustainable? get back you've for XXX and around what's XXXX, lift. You're Going of half to got level margin can after is least what Vegas a is to MGM of implementation is, reasonable is a that close you starting pretty so, to from and PGP, basis it the question and XXXX? was XX% from is And higher point reasonable it, your expectation at the

Jim Murren

at the that level, – points to basis XXX higher easier as are first about XX% we lot a as properties. seeing getting so point Yeah, think Harry do the I that core what we’re believe was mentioned but I've is I your comparison we at

with with believe costs get that goal increase the union Our to and we increases. that's and our should that based program even we on XX% able be to and labor

feel number. So, with that we comfortable pretty

Harry Curtis

Very good.

Jim Murren

just were to which achieve investments technology. of marketing, we investments a making higher And XX able loyalty, is much that around back than ago, add think X digital are what maybe are margin Harry to – I lot to Yeah. I think, investments I think years we the particularly now Corey’s we're

bricks we drive – just asset intensity to our mortar bricks and as we it's and this end our and actually believe it's the human our what not So, move revenue light into reducing state mortar human increasing of capital accelerating be to margins. higher

investing operating we buildings So, where plan of change higher was which at utility its it's and is we and can believe on increase model cost margins not way. we cutting the drive so focus the like much operate plan revenue core. and a that a PGP an that a This

Harry Curtis

wanted good. I to a Very question. Grant ask

with mass amount what You premium of customer, share challenges particularly are a trial of reasonable the premium mass my getting guess and gained met revenue trial? share, question is I the sequentially

Your in your is EBITDA the properties, about is year which XX% $XXX below between run million rate and around target. this somewhere two

overcome you dollar get me to billion target. to that walk the Thanks. So, through how challenges

Jim Murren

we and the the all to that Thanks, first And now positive is really that. online The as that's for mentioned And of villas segment that getting allowed able in and Harry. are penetrate. Well, think Mansion us need – running. before, to that to I move up now responses thing another going to get now is everything available; adding not really well. we've is value progress into been we've actually the segment

in attributed like for not huge as before. excess getting new directly of the seems Mansion We're the business, quarter, trial of business to XX%

to for really basically Harry On that's pitch one you've every component. So, got it critical the that point us. to

we're also of and we're something to the that's areas ahead very our other about careful also terms ourselves right balance up In about. not getting of trying reinvestment it

getting it of start the main continued starting the fourth to premium build terms run summit rate the once into on coming that In in though to you strength follow and to start quarter. just comment, see we're business from mass

on reinvestment costs. give be at the us all up right, a same on at looking business ourselves balancing time but But moment. making of clearly, market big we some mass that's sure out of lift for really transitioning products the one the what growth. the but would what that the is There's that VIP still business focused that's target us we're to the And would some some thing are all

see I we're in getting point to back, these to So, the testing of think that sometime $X back the through to billion to number tied real that the we're market. and during the some market growth going XXXX, challenging all ultimately get that see is looking critical we few once growth and it’s course months now,

Harry Curtis

you of last or to think or think rail stuff? going Just operation expect you sentence. beginning to [ph] Do Hanshin that how the down you rail much of there's from follow-up that a speed of quick high impact be light do then positive on the the a would expansion and the

Jim Murren

don't about pressure keeping and Macau levers the of are become incremental all to think that any we're of there. market. Harry. in I to I've not is think to sure was the a impact, market and the we opportunities arise. control just I underpenetrated of just that all take one advantage a strong, said China it’s those well but a things the people question number characteristics our Yes, applying all event more now, – starting significant all of of time, in having a the costs mature there's of still single making just the And that still of it's

Harry Curtis

Thanks, it. everyone. Appreciate

Operator

will The DeCree from with be Union Gaming. next John question ahead. Please go

John DeCree

real go question. popular Thanks wanted today, on most and just a strip market bit since potentially sale, number the of assets gone another and potentially back I through my Jim, discussion processes, everyone. for two afternoon, the estate one. you've a to little for potentially it's Good coming taking to

talk there to about of and lack the of just no curious in for you're get parties. your Bellagio interest wanted in you bit could Vegas thoughts a seeing sure assets that was the was type of I if demands interested number little Las the Strip on bound. I'm

And follow obviously if that in but other would term multiple a then little some Blackstone be, maybe the up paying deciding that other long than a the partner of about you for together? valuation Bellagio Blackstone put full factors talk bit you a could

Jim Murren

the two two The in XXXX. objectives thing light strategy. but Mandalay moving announced terms smaller the I'll first. Group the in you back way acquisition really part had of of accomplish take Circus one Circus Resort Sure. was we different know transactions as toward an asset same

account because are the but property performing proud to Circus Circus going then Resorts segment really to a property never great of to And already extremely hit and we it them women for. add the of was back that of that performance The well men and and brought be today recession a that doesn't we're strategic adequately customer very mightily. immensely there struggled MGM don't many high was there, level

do believe that was Circus. entire World, expansion, hopefully and, a to that will really He town. Ruffin the was ideas to and And we And so, to Resorts intending good the Drew land. us we very that he find future Vegas transacted Circus. has Circus course, And He's on plans with great Mr. with Circus. them sell because has including focus has and have home Ruffin. We convention invested the exciting respect we Mr. some high Circus Las the for That important for in of before. the were enterprise got degree the northern course lives with a here of of for Strip on in

really in was Real transaction Committee could what we some estate. key rights. different the to sense how in like didn't bringing a Blackstone contemplated, outright. options time retaining and decision look never and very friction spending were minimize we real costs, the that basis by to The still not only the what but property, we’d lease tax the was transact understand, our We Bellagio selling And contemplate had could this together our legal while want the and what at never Estate with

it estate only of zeroed the sophisticated, Blackstone we counterparty net very certainly pretty half to. owners. was equity its We first subsidiary where in wide we to ownership landed was dozen it of XX% The this of so is X% Bellagio, estate a concept a kind, real Blackstone. talked to innovative, of the not extremely or which, on in and course, of joint well-known, deep-pocketed a retain a will venture selling real

to on best get the course the action that concluded we to was of to try execution. But focus precise most Blackstone

themselves a for but having most like the is I Las we predicted the done Las create time course only the own other blueprint estate. in also of and And Las continued transactions. estate real companies We that And Vegas which to interested that. is real think we’ve Vegas Blackstone outcome including Grand really be estate, quality Vegas Blackstone Las MGM quality of took to on real Vegas.

So, print be think of proud we the one, blue it adapted. can we're and it,

would that taking has interested. our by markets capital counterparties of number also – also of work done rates to access from increases be and interest We've benefited low we've which which time increasingly a valuation. are high there And Secondly, a lot already.

assets. looking So in not time interested acquiring monetize looking we and else's own either we other to not point at assets. this fashion And any jointly assets whole. and We're are assets. to that I in We're the – acquire anyone think now that MGM well blueprint going relatively you're and established prompt in perhaps on use or blueprint is other us the to deliberate, that a see

John DeCree

Jim. Thanks,

I answers think Appreciate that all questions. it. my

Operator

Next David question go with Katz will Jefferies. ahead. Please from be

David Katz

my evening for question. Hi. taking and thanks Good

is MGM's buying a stake to is, lowering than equity? and MGP going something and markets MGP question raise path the in about and stake, using out the to there thinking my capital other that Just follow-up

think triggers that And earlier. within at obviously a below that well, model. a to was is would MGM – said a like. what like picture And this occur then – Paint us Felicia if I that things of entity what be the were different then? what Should looks get getting number sheet look XX% balance it I you you deconsolidated of think Corey and the where does

Jim Murren

than of part you gave. answer are kind give we enough I is what to we inputs just don't Corey have that I I'll first unless better be to satisfying answer to determined. second share a the and prepared answer has tackle kind the Well, think of to – a that

the we would markets only we well received and would which point the we clear the be pipeline we of capital very important and looking that be transactions for if be – we will could the markets, make reduce to done the and there know is they're MGP because stake. think at done we believe own able of productively accretively that be and I on scenario therefore our for that would a horizon MGP, foresee. to that's That's, MGP by see access less so we believe will what's this

and estate, with on reducing In of on talked our would possible, to state terms of of that deconsolidated equity real on right jointly of ways executing I post end like now in MGP could theirs we're about, what Grand don't monetization of transaction, our or participate other other in is not look reduction on monetization owned we've of like Circus MGP, other our who MGM, give lead basis. Circus MGP. stake which there our the Blackstone, of part MGM an a executing prepared think focus than what is fact real are ways in other sheet the to But whether of our or transactions but entity entirely the to knows a they would entities or ownership which our Blackstone be state balance transaction, other more likely, therefore

Bill Hornbuckle

even down China, consolidated with sheet they're expect right not now is us, obviously leverage What they operation there leverage and times US to we the highest in ratio one I are we go obviously would balance if have would rate and say our where given our further.

Jim Murren

go sorry, ahead. Even with --

David Katz

would you I all you would MGP think potentially part debt, was it what where Even, some sense the Felicia I that now a right. likelihood deconsolidated be headed lease and but was then with replacing is obligation in mean MGP consolidate of

Jim Murren

think simply near-term form low leases. debt and bonds with reduce, And bank in we're the maturities, yes. about of cost Yes, eliminating capital kind we’ll long-term of replacing it it

stage strategy of right else financial in Just, be very that if we're we the but that now. smart did a to seems nothing the given economy

redeploying company's on we're and three, focusing balance a the we've by and consolidated and our all we believe better fashion. But lease leverage which about sheet return adjusted capital actually in leverage strengthening reducing talked financial leverage

David Katz

Got much you it. I it. appreciate very Thank

Jim Murren

Okay.

on a the sum the to satisfying just saying I time thank third seeing being call. quarter. for that think I had is by want up a We you past, bit

line I in expectations. As our it's said with

convention Las will Vegas strong the and of into the in was be of business, quarter driver year. in Our quarter third a strong health fourth next us key the for

of progress Cotai. stronger XXXX. on great made We've operating team's Grant We're and MGM our the delivering we're proud ramp targets. And in on

on current have cash share that leverage. we've We free targets mentioned a the to and per the EBITDA, positive hit quarter. outlook for XXXX for track We're flow

our We're also delivering targets. on financial

questions. the to cash have growth estate. I our in continue ability excellent as be will make And you execute Thank to real per free positive our for our around flow our know you. and progress share on they for initiatives. we'll We dialing and sheet, We balance on with thank always want impact targeted on that our

Operator

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

You now disconnect. may

MGM Resorts International (MGM) 30 Oct 192019 Q3 Earnings call transcript