Vegas still stabilizing



"We continue to see the Las Vegas market stabilizing, Aria's operating performance is ramping up, and MGM Macau reported a record quarter. We have made significant progress on our financial position this year and have deployed several programs to better position our portfolio of resorts to benefit from a broader economic recovery going forward."


- Jim Murren, Chairman and CEO of MGM



  • Citycenter
    • CC net rev: $413MM; Aria net rev: $219MM; Aria EBITDA: $41MM
    • Aria's occ % was 82%; ADR was $175, resulting in REVPAR of $142
    • "$93 million impairment charge related to its residential inventory due to an increase in estimated final costs of the residential components"
    • "$279 million impairment charge related to its Harmon Hotel & Spa component due to CityCenter's conclusion that it is unlikely the Harmon will be completed using the building as it now stands.  The Harmon impairment did not affect the Company's loss from unconsolidated affiliates because the Company's 50% share of the impairment charge had been previously recognized by the Company in connection with prior impairments of its investment balance."
    • "Increase of $232 million in its total net obligation under its CityCenter completion guarantee and a corresponding increase in its investment in CityCenter"
    • Pre-tax impairment charges:
      • $182 million related to the Company's investment in CC
      • $46 million related to CityCenter's residential real estate inventory 
  • Casino revs down 9% YoY; Slot revs down 3% YoY; Table vol ex. bacc down 7% YoY; Bacc vol down 6% YoY
  • 3Q hold above midpoint of 18%-22%
  • "Rooms revenue decreased 3% from the prior year. The Company achieved 93% occupancy compared to 95% in the prior year quarter with consistent ADR, which led to a 2% decrease in Las Vegas Strip REVPAR."
  • "The Company used a portion of the net proceeds from the equity offering (40.9 MM shares) and all of the proceeds of the debt offering (10% 2016 Notes) to effectuate the extension its senior credit facility to February 2014.  Revolving commitments and term loans were reduced by $1.2 billion, leaving $3.6 billion of total commitments."
  • "Subsequent to quarter end, we have reduced our debt from $12.9 billion to $12.3 billion.  We have current availability under our senior credit facility to cover debt maturities into 2013."


  • 665-room MGM Grand hotel to open in Sanya, China in just over a year
  • Loyalty program revamped; has 60MM customers
    • Was behind the curve but catching up
    • Customers in MS and Detroit moving up the tiers
  • Market share in MS and Detroit have improved; Detroit market share was 42.5% in 3Q.
  • "Finally seen pockets of strength in Vegas"
    • customers coming out to shows
    • international and high end business doing well
    • restaurant spend per cover is up YoY
  • Significant increase in convention business and mix for 1Q 2011
    • luxury properties continue to outperform in October and for Q4; Bellagio REVPAR very strong
    • Mid-tier properties continue to struggle
  • Convention
    • continues to improve, particularly after Labor Day
    • mix improved in 3Q; October was great--November is decent too.
    • bookings in the high-teens
  • 1Q 2011: Room nights on the books up 30% YoY; convention revs up 40%; mix will be up to the mid-high teens.
  • Macau EBITDA: $83MM-- 23% EBITDA margin
    • mass table vol: up 25% YoY; slot vol: up 38% YoY; vip turnover: up 39% YoY
    • October was record month in terms EBITDA and margins
  • Quiet period with HK Exchange on Macau IPO
  • In compliance with convenants
  • City Center: $1.85BN credit facility
    • actively pursuing refinancing
  • 4Q stock comp: 9-10MM
  • 4Q depreciation: 155-160MM
  • 3Q gross interest expense: 285MM (261MM was cash interest) no capitalized interest
  • 4Q: interest expense: 270-280MM (no cap interest)
  • 2010 capex: ~200MM; spent 129MM thru Sept
  • Plan to refresh Bellagio and MGM Grand rooms next year
  • CityCenter: adjusted EBITDA 52.4 MM; Aria EBITDA 41.4; Crystals EBITDA: 2.4 MM; Vdara lost 600,000 and Mandarin lost 3.6 MM . Other components of CityCenter were 13MM net--26.1MM in residences income and administration costs of 13MM--primarily legal fees.
  • Aria
    • Net casino rev: 125.5 MM
    • High limit slot area closed in July; reopened in October
    • Non-casino rev: 94MM
    • Has 136k rooms nights on books for 2011--74% of total room nights for 2011
    • 50,000 room nights booked for Q1
    • FTE down 3% QoQ
    • Vdara: 70% occ; $129 ADR; occupied room nights flat QoQ; $10.9 net revenues in 3Q
  • Oriental: 7.2 MM rev; 3.6MM loss in EBITDA
  • Crystals: 70% occupied by end of 3Q; 80% occupied by year end
  • City-center residential: in September 2010, commenced CC leasing program
    • 200 units in the program; have leased 27 of those units

Q & A

  • Resort fee: $20MM in revs; by end of year, all wholly-owned properties will have a resort fee; if including resort fee in REVPAR, it would be positive. REVPAR is up in October. No change from previous guidance
  • Casino revs in 3Q:
    • Bellagio: table revs up
    • Mandalay Bay: table revs up
  • CC refinancing:
    • Hopefully get something done by end of year
    • No equity offering needed
  • CC 4Q should be profitable
    • Aria: 88% in 4Q; gaming volumes are strong in Oct; bacc market share tied with Bellagio; CC weekend occupancy 76% in Q1; 93% in Q2; 95% in Q3
  • Harmon infrastructure improvements will benefit Aria
  • Gaming tax proposal in Vegas: doesn't see any increase
  • May continue to have monthly distributions from Macau
  • Macau debt: 800MM
  • Marketing program: Wanted to be better on customer analytics; will see decreased promotional spending as they market better to their customers.
  • Have 400 condos for sale

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