MGM YOUTUBE

In preparation for MGM's 4Q earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.

MGM RESORTS' COTAI LAND CONCESSION GAZETTED (Jan 9)

CITYCENTER RESIDENTIAL ANNOUNCES $119 MILLION BULK SALE OF 427 CONDOMINIUM UNITS AT VEER TOWERS (DEC 21)

  • Veer Towers 98% sold-out at deal closing

MGM RESORTS INTERNATIONAL COMPLETES LANDMARK REFINANCING TRANSACTIONS (DEC 20)

  • Entered into a $4.0 billion amended and restated credit facility, comprised of a $1.2 billion revolver, a $1.05 billion term loan A facility and a $1.75 billion term loan B facility
  • Issued $1.25 billion of 6.625% senior unsecured notes due 2021

YOUTUBE FROM 4Q CONFERENCE CALL

  • "We are managing our costs where we can and FTEs were down about 2% during the quarter."
  • "In Cotai, we have formally signed the land concession contract and have closed on a $2 billion credit facility, which along with our strong balance sheet and free cash flow, will give us the financial flexibility to expand in that region, strategically invest in our current resort and continue to maximize shareholder value."
  • "While our occupancy remained high at over 90%, our food, beverage, retail and entertainment were affected by the fact that we had over 100,000 less occupied room nights this year versus last year. These segments were also impacted by certain of the remodels and transitions in several of our buildings, and we expect that to turn as we bring these new amenities online in the upcoming quarters."
  • "We do expect our corporate expense to be higher here in the fourth quarter driven by the referendum expenses we're incurring and that'll be up in the fourth quarter in a range in kind of the mid $60 million level for corporate expense before our stock comp expense."
  • "We expect our stock compensation in the fourth quarter to be approximately $10 million to $11 million. Depreciation expense in the fourth quarter is estimated to be about $230 million to $235 million. Our interest expense in the third quarter was $276 million, including about $6 million from MGM China and about $17 million in non-cash amortization. And we estimate that our gross interest expense in the fourth quarter will be approximately $285 million."
  • "Viva ELVIS officially ends its run on August 31 and we're looking forward to the opening of Zarkana in November. The theater has been modified for the new show and the artists are completing their final rehearsals in anticipation of the opening November 9. We expect this new show will turn what was a loss to our business into significant profits, while also driving up ancillary business."
  • "Looking at the fourth quarter, we have some good things coming up. Great product offerings are coming online. Zarkana, the new Cirque show at ARIA opens next Friday. Blue Man Group is coming back to our family, opening up at Monte Carlo the following week. We will now have all of our rooms back at the MGM Grand and they're all online as that remodel program was completed in late September. We're still in the progress of remodeling the Bellagio Spa tower, which will be completed in mid-December, and we'll have more rooms in service in the fourth quarter. Despite having more rooms available, we are seeing a somewhat better rate environment, and expect that RevPAR in the fourth quarter will be flat to slightly up for the year. Of course, we are watching closely the impact of storm Sandy on these numbers, but we are optimistic with that forecast for the quarter."
  • "Looking out into 2013, we're very encouraged to see that convention bookings, our pace is up over 10% year-over-year with rate up. Although it's early, 2014 pace is even stronger. We're currently pacing to have about 15% more arena events between the Mandalay Event Center and the MGM Grand Garden Arena next year versus this year. We believe that the new restaurant, night club and entertainment offerings that we have underway will continue to not only enhance the customer experience, but drive increased profitability throughout our Strip properties."
  • [Macau] "The mass market continues to grow strongly. We are confident there. VIP market is consistent, but it certainly slowed up and what we're looking at is probably numbers of growth going forward more consistent with the GDP growth of China rather than some of these accelerated growth rates that we've seen over the last two or three years.... We're looking at moderating the growth rates around that 8% to 10% while that the mass market we would expect to grow somewhat faster than that."
  • "You still have a fragile consumer out there and they're continuing to kind of pick their spots. We are seeing, particularly in the third quarter, we saw more reliance on leisure customers, which is a lower spend overall type of customer that we needed to dip into a little heavier than we did last third quarter and that is a lower spending customer. Going forward, we think we'll see an increase in international travelers."
  • [Sandy impact]: "We're going to lose about 4,000 room nights. It's approximately about – close to $1 million of revenue." 
  • [Macau costs] "I guess just the general overriding market pressures that everybody's aware of labor and the potential for increases in labor cost going forward. So that would probably be the only significant issue as far as I see it....labor is 5.4% of overall costs."