MGM YOUTUBE

In preparation for MGM's Q4 earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.

DIAOYUTAI MGM HOSPITALITY AND SUNING REAL ESTATE ANNOUNCE SHANGHAI BUND PROJECT (2/21/2012)

• MGM's JV, Diaoyutai MGM Hospitality Limited, has entered into an agreement with Suning Real Estate Group, a subsidiary of Suning Group, for the Suning Bellagio Shanghai Bund hotel as a part of a strategic relationship between the companies for the development of hotels within the People's Republic of China.
• The hotel will feature approximately 200 rooms and world-class retail and entertainment amenities, which is expected to be completed in 2015.

CITYCENTER HOLDINGS, LLC ANNOUNCES CLOSING OF $240 MILLION SENIOR SECURED NOTES OFFERING (2/17/2012)

• CityCenter Holdings and CityCenter Finance Corp announced that they have completed their issuance of $240 million in aggregate principal amount of senior secured first lien notes in a private placement.  The notes were priced at 104.75% of par and are additional notes constituting a part of the same series as the $900 million in aggregate principal amount of 7.625% senior secured first lien notes due 2016 issued on January 21, 2011.  CityCenter will use the net proceeds from the offering, together with cash from its balance sheet, to repay $300 million of the outstanding borrowings under its $375 million senior credit facility. 

MGM RESORTS INTERNATIONAL AND AMERISTAR CASINOS CREATE STRATEGIC MARKETING RELATIONSHIP TO EXPAND MEMBER BENEFITS (2/15/2012)

• MGM and ASCA announced a strategic marketing relationship for the companies' rewards programs – MGM Resorts' M Life and Ameristar's Star Awards/Plateau Players Club.  Beginning in mid-March, the strategic agreement allows targeted MGM Resorts' M life members to receive offers and benefits at Ameristar casinos and Ameristar's Star Awards/Plateau Players Club members to receive offers and benefits at MGM Resorts' properties in Las Vegas.

MGM RESORTS INTERNATIONAL ANNOUNCES LAUNCH OF CREDIT FACILITY AMENDMENT AND EXTENSION TRANSACTION (2/2/2012)

• MGM Resorts International  announced the launch of a proposed amendment to its aggregate $3.5 billion senior credit facilities which will extend the maturity of consenting lenders from February 21, 2014 to February 23, 2015. The Company has asked lenders to approve the amendment by February 16, 2012. Lenders approving the amendment will receive 20% reductions of their existing credit exposures.
• Extending Lenders' loans will be subject to a pricing grid that decreases interest rates by as much as 250 basis points based upon collateral coverage levels. In addition, the LIBOR floor on extended loans will be reduced from 200 basis points to 100 basis points.  Lenders approving the extension will receive amendment and extension fees totaling 50 basis points times their reduced exposures. The transaction also includes covenant modifications and other amendments. 

MGM RESORTS INTERNATIONAL PRICES $850 MILLION IN SENIOR NOTES- 8K (1/11/2012)

• Issued $850 million in aggregate principal amount of its 8.625% Senior Notes due 2019
• Net proceeds of approximately $836.1 million (after giving effect to discounts, commissions and offering expenses)
• The Notes will mature on February 1, 2019. The Company will pay interest on the Notes on February 1 and August 1 of each year, commencing on August 1, 2012.  Interest on the Notes will accrue at a rate of 8.625% per annum and be payable in cash.

YOUTUBE FROM Q3 CONFERENCE CALL

Vegas 

• “Bookings and current asking rates are up. In fact, the convention business is particularly strong. September was one of our highest convention booking production months ever, and I think that emphasizes the fact that our group business for 2012 and beyond remains quite robust.”
• “October was the best profit month we have had all year here in Las Vegas.”
• “86% of Crystals is currently under lease.  Dolce & Gabbana's men's and women's stores... are scheduled to open early next year.”
• "Quite a few things are going on in this fourth quarter, which we think will benefit us. A number of events, ... an Eagles concert this weekend, another one coming up. We have the Pacquiao fight in a week. We have a number of special events and some exciting activities going on for the balance of the quarter, particularly leading up to New Year's Eve when two new big nightclubs open up for us, Hyde Lounge here at Bellagio and Mirage."
• “We feel comfortable giving a forecast of a RevPAR increase of 10% here in the fourth quarter, with the best gains actually coming in the highly important FIT market. We're also doing quite well in leisure as well… Up 10% for Aria as well in the fourth quarter.”
• [2012 Group bookings] “The first quarter has a tough comp with CONEXPO year-over-year, so that's a difficult comp when you look at the citywides at 140,000, but overall, we're projecting our convention room mix in 2012 based on our pace to be at or slightly higher where we were forecasting 2011.  So, we are making good headway. The pace is continuing to pick up. September was strong, and we think from an overall mix standpoint, we'll be at or slightly better than where we finish up 2011.”
• “The same is true with 2013, and in both cases, the rates are higher.”
• “So, the key for us for at the moment is focusing on getting the absolute yield in terms of EBITDA yield and recognizing that there is going to be some variation.  What we have seen now coming through and with the record on October, we saw that across all the revenue streams, and that did deliver really solid yield performance and EBITDA performance in that mid-20s range.”
• [MGM Grand remodel] “It's starting literally now. That's $160 million remodel program. It's a much larger room base; that's 4,300 rooms. At that point, there'll be about 700 rooms out of service at any given time. And if early indications are correct, we're going to get probably not a $30 increase, but we'll get $10, $20 increase in ADR at MGM based on that.”
• “MGM's also been one of the benefactors of the demand in leisure and FIT. And especially in the summer periods, they have a lot of high demand because of their pool. I think they had a pretty decent convention mix also.”
• “Maybe 1% or 2% (growth) at most in terms of expenses [in 2012].  If we get the revenue growth that we expect, we should have significant flow-through and margin improvement.”
• “I can say a few comments about October. It was extraordinarily broadly based. We had a really wonderful month in terms of room revenue and profits. We had strong casino play. The core properties, which we've mentioned before, were the ones that have been increasing year-over-year the most continue to do extremely well. October I think in the city was a good month, and that, of course, benefits the mid-market properties particularly. Bellagio is really on fire in terms of its revenue growth. It's the leader here, the best property, and it's setting a tone for the luxury properties that we have, MGM and Mirage and Aria, as well.”
• “In terms of the mix, convention mix in the third quarter was about 12.5% of this year. It's going to be higher in the fourth quarter, probably around 14%. That'll bring the year-end at 14.5%. And we'll be higher next year. We'll be closer to 15% next year…. And Aria will be about 16.5%.”
• [Leisure mix at 40% in 2011] “And it will be around there next year also. We continue to move that around, but we're shrinking the spread between the FIT and leisure.”
• “We've just completed exercise – the exercise of master planning the casino floors, in particular, at Luxor and Excalibur and New York-New York. So, we have lots of work going into 2012 and 2013 in the mid-tier properties, much of it in the public areas….. SKYTOWER will be next year…. We have some more work to do at Luxor and Excalibur. We started those room remodel programs. The Hotel at Mandalay Bay – but there's a schedule, so we can pace out the capital; we can pace out minimizing the amount of rooms out of service at any given time, but expect that this will be going on, you know, on a continual basis.”

Macau

• “We continue to make operational improvements and believe we still have additional room for further growth, both in terms of the utilization of our table games and, more importantly, some of the work that Grant and his team have been undertaking over the past several months, which include the recent opening of our Platinum Gaming Lounge, a high-end main table floor offering that opened up in stages in both August and September here in the quarter.”
• “Work continues on our new in-house VIP gaming area, scheduled to be completed in late November and open in early December. And so we've had a little bit of disruption as we gave up our real estate, as you'll recall, to our VIP in-house gaming space earlier in the year to one of our junket room operators. So, that comes online in December, and we look forward to that.”

Other

• “We expect to spend approximately $275 million in capital in this year, which includes completion of the room remodel activity at Bellagio and the start of the room remodel program at MGM Grand here in October. But this $275 million does not include the capital being expended by MGM China.”
• “We have plenty of liquidity to get us through most of 2013 today. And so right now it's all about being opportunistic and bringing down this cost of capital. And you should see us doing that, both here in the U.S. with our U.S. credit facility and financing activities, as well as Macau. Macau is an opportunity there that I think throughout the course of this year and into early next year, our highest priorities in this category are those two credit facilities, the domestic one and the Macau facility.”
• “So, it's – 2012, '13, '14 we believe will be a story of dramatic reduction in our overall interest because the debt's coming down and the cost of capital is coming down, as well.”