MGM 1Q REPORT CARD

In an effort to evaluate performance and as a follow up to our YouTube, we compare how the quarter measured up to previous management commentary and guidance.



OVERALL:  WORSE - While RevPAR was better than MGM's guidance, EBITDA missed the mark due to higher expense growth.  We would normally give companies credit for hold issues, however, since hold was actually 1% higher than last year across their portfolio YoY, it's a bit of a tough argument to make.  MGM China hold was also high and contributed more than $25m to the property.


  • 1Q LAS VEGAS ADR
    • BETTER: Despite the tough comp RevPAR for 1Q came in at 4% better than the 2-3% guidance.  However, most analysts had higher RevPAR in their estimates.
  • 2Q AND 2012 LAS VEGAS REVPAR
    • SLIGHTLY WORSE:  MGM now expects 2Q RevPAR to be up "mid-single digits" with a "strong forecast for the year." On the last call they said that "second quarter looks particularly strong and we think our RevPAR is going to grow nicely throughout the year" with mid to high single digit RevPAR growth achievable.  We don't think that investors were hoping for mid-single digit growth. MGM did qualify their guidance in that they think that if close-in bookings come in better than expected that they can exceed their guidance.
  • CONVENTION MIX IN 2012 (VEGAS)
    • SAME:  Convention room nights on the books will be same as 2011, however, since the some of the MGM Grand rooms are out of service, convention mix should be slightly better than 2011
  • ARIA OUTLOOK
    • SAME:  MGM is optimistic about the higher level of group bookings YoY, the opening of Zharkana in 4Q,and modifications to Crystals which should provide easier pedestrian access to Aria
  • IMPACT OF SCC
    • SAME:  Unclear if there is an impact from SCC but it's really too early to tell. If there any impact " it’s around the 3% to 5% in traffic, but is not necessarily showing up in play."
  • MA OPPORTUNITY
    • SAME:  They are still excited to be pursing potential development sites in the western part of the state
  • CORPORATE EXPENSE
    • SAME:  Corporate expense ex stock comp came in at $37MM, just a tad above the moderate increase to "mid $30 millionish" that was guided to
  • STOCK COMP
    • LITTLE BETTER:  Stock comp was $9.3MM vs. guidance of $10MM
  • D&A
    • SAME:  D&A was $237MM vs. guidance of $235 million to $240 million
  • INTEREST EXPENSE
    • SAME:  Interest expense was $284MM vs. guidance of $285MM

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