Not good enough to declare a Las Vegas recovery. Q1 should be better and MGM will make the rounds to make sure everyone knows it.



“2010 has been a transformational year for MGM Resorts International from a balance sheet and liquidity perspective.  We have built the foundation needed to benefit from an economic recovery.... We are encouraged in early 2011 by the level of business activity we are seeing.  Our forward booking pace is currently ahead of last year led by a stronger convention mix which we believe will position our Company to have a better year than last.”

- Jim Murren, MGM Resorts International Chairman and CEO



  • Adjusted Wholly Owned Property level EBITDA of $267MM
  • MGM Macau EBITDA of $142MM
  • CityCenter Adjusted EBITDA of $36MM, however, if you exclude the condo revenues and forfeiture revenues the clean number is really only $16MM
  • "The Company received approximately $192 million from MGM Macau, which represents a full repayment of the Company’s interest and non-interest bearing notes to the joint venture."
  • "MGM Macau, which is 50% owned by the Company, entered into a new $950 million senior secured credit facility in August 2010"
  • "CityCenter Holdings LLC, which is also 50% owned by the Company, recently extended the maturity of $500 million of its credit facility and raised $1.5 billion of senior secured first lien and second lien notes."
  • "Slots revenue increasing 2% and table games revenue down 11%.  The Company’s table games volume decreased 13%.  The overall table games hold percentage was slightly lower in 2010 than the prior year quarter and was near the low end of the Company’s normal range."
  • "Rooms revenue decreased 5% from the prior year, excluding the impact of resort fees. Las Vegas Strip occupancy decreased from 86% to 84%, and ADR was $110, consistent with the prior year quarter; REVPAR (2) decreased 2%.  If resort fees were included, rooms revenue and REVPAR would have been up 1% and 2%, respectively."


  • Off to a good start in 2011
  • LVCVA is predicting a 3% increase in visitation and Murren believes that there is upside to that number given strength in convention bookings
  • CNY has seen very strong volumes. Flew about 15% more customers into Las Vegas. All of their suite product has been fully occupied over the last week with high value guests.
  • In Jan, they were able to improve their convention mix by 4%. Convention segment has a $50-70 ADR spread over leisure.
  • Have 1.6MM convention room nights on the books for 2011 which is a double digit lift over last year.
  • Expect to see their overall convention mix about 14% of the business in 2011
    • Mix of their luxury properties is north of 20% 
    • Believe that RevPAR will be up all year in 2011
    • Seeing improvement in customer spend per visit at luxury properties
  • January was a great month for City Center with strong profitability in all elements of the property
  • In Macau, they have more improvements to come in 2011. Main floor volumes were up 25% YoY, VIP volumes were up 80% and slot handle was up over 50%. Added some new junkets in the 4Q.
    • Expect to add more room operators in 2011
    • CNY volumes are up significantly YoY
  • Working on their proposed MGM Macau IPO - in their quiet period now but moving along
  • M Life was launched in Vegas in Jan and regionally in 4Q10. Already seeing a lift in business as a result. Will help them cross market better and increase frequency of visitation.
  • Borgata: NJ trust received $74MM of proceeds in 4Q, including the $71MM related to the sale of their long term land leases and real estate parcels. Trust balance is $188MM - $150MM of which is invested in treasuries and included in pre-paid assets on the balance sheet. Continuing to negotiate with purchaser on Borgata.
  • Believe that they will remain in compliance with their leverage covenants
  • Partners contributed $73MM of equity contributions - interest reserve of $150MM covering about 18 months of the financing for City Center first lein notes. No financial covenants during the interest reserve period.
  • 1Q2011 Guidance:
    • Stock comp: $9-10MM
    • D&A - $160-165MM
    • Gross interest expense: $260-270MM (No Cap Interest)
  • Gross interest expense: $249MM was cash interest in the 4Q
  • Will include resort revenues in 1Q in their ADRs - believe that RevPAR will be up at least 10%
  • Expect to spend $250-275MM in capex in 2011 - mostly refurbishments and slot upgrades. Spent $208MM in 2010. 4Q capex was $76MM
  • Aria update:
    • $99MM in 4Q casino revenues, $225MM in 2H2010 compared to $125MM in 1H2010
    • 23% of strip baccarat share
    • October, Aria introduced a remodel, high-limit slot area. As a result, Aria experienced the highest quarterly slot volume since opening
    • $139MM of non-casino revenue due to higher ADR at Aria in 4Q
    • 170k room nights on the books for 2011 - which should help them yield up their rates
    • Saw a noticeable increase in foot traffic since opening of Cosmo and the footbridge
    • FTEs at low of the year - 4% below the 3Q10
    • In March they are opening the Market Cafe in Vdara
    • By March 82% of the leasable space will be open at Crystals
    • 436 condos sold in total to date. In 4Q they closed on 26 units (including 1 at Mandarin) for $19MM 
      • 61 Mandarin
      • 219 Veer
      • 156 at Vdara
    • In September 2010 we commenced our CityCenter leasing program. To date we've leased 39 units at Mandarin Oriental and another 46 units in the Veer Towers.


  • Table game volumes down 13% in 4Q10
    • We're as active on the event side this quarter which will change this year
    • Hold impact also impacted them...
      • That makes no sense - hold doesn't really impact volume
  • Convention volumes were up 11% in January which led to a teens increase in RevPAR for them. Have several several large events coming up as well.
  • Trends in RevPAR by month and how about the second quarter?
    • Seasonally, they do better in 1Q than 2Q because 2Q isn't as strong of a convention quarter. But believe that they will have good pricing strength in 2Q - they will have good events and should have good FIT business
    • Resort fees are clearly working - instituted in late 2009. RevPAR would have been up 2% in 4Q if included
    • Operating leverage is significant with their number of rooms
  • Mix in 4Q10 - why was occupancy down (different from some of their competitors)?
    • October was a very strong month mix wise - drove good pricing. Nov & Dec they didn't have much convention business
  • Moving along with IPO in Macau but can't give details
  • The junket operators (Star888) didn't go out of business at MGM Macau. They were and are reserved for customers losses.
  • What would the YoY change in RevPAR be, ex resort fee?
    • Up at least in the high single digits
  • January detail on CC - was it great for everyone else?
    • All the enterprises made money - $18-19MM of profits.
  • M Life stats?
    • Had 700,000 enrollments since the launch - roughly 150k were re-engaged (i.e. not played in a year)
    • Seeing good casino spend in MS and Detroit
    • Early results in Vegas are just on the enrollment side but its really early. Effort on educating customers on M Life
  • Are able to keep their expenses in check - in the middle of union contract - so low single digit increases. Most expenses will rise low single digits ex FTE changes
  • Booking window is widening, but they are still getting a lot of in the year for the bookings in Las Vegas convention business. 
  • YoY margins are most of their properties were down?
    • Because revenues were down and rate was challenged
    • Promo expenses are down YoY
    • Primarily a hold related issue and other revenues are also struggling
  • Net Revenue in Macau?
    • $580MM net revenues, 24-25% margins; for the year, 22-23% margins
  • Convention forecast is 14.5% for Aria.. the 14% excludes Aria
  • IL - not sure what will happen in that market
  • Perini? They are under a stay by the Supreme Court - waiting final determination on a writ they have before the state Supreme Court.
  • Are the mid-tier properties core?
    • Clear to them that there is great potential to increase cross marketing between their regional properties and their properties in Las Vegas
    • Expect them to have a broader reach in the regional properties - through negotiating deals with other regional operators about increasing the reach of their database. Highly unlikely that they would divest those properties. This year, they will be able to announce several JV cross marketing deals to help their LV operations.
    • We think a deal with ASCA would make a lot of sense

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