Still a lot of post Q1 uncertainty




  • Signficant operating leverage in the recovering economy
  • 2013 was a 'new era'
  • US wholly owned EBITDA:  best EBITDA in 5 years
  • Arena will be completed in 1H 2016, could be used for additional convention space
  • Hotel Delano remodel will be completed in Sept 2014
  • 80,000 players visited a MGM property in 2013
  • Completed deep piling on MGM Cotai; have been working on basement substructure; will increase scope/complexity on entertainment options; increased project cost from $2.6BN to $2.9BN; will open in early 2016
  • PG County:  will open in 2016
  • Will seek opportunities in S Korea and Japan
  • Very strong LV convention business in 1Q
  • Strip flow-through 70% (above 50-60% target) - if you adjust certain items, it is within that 50-60 range.
  • Strip REVPAR: +1%, slightly better than guidance; booked more in the quarter for the quarter 
  • 1Q convention mix:  22% (peak levels for any 1Q), almost fully occupied at convention space
  • 1Q:  expect REVPAR +10% YoY
  • 2014 convention mix: 15.5%-16% (approaching peak levels)
  • Aria:  $6MM higher hold benefited EBITDA; F&B increased 11% (higher banquet/buffet revenue)
  • Sold 11 units at Mandarin Oriental ($22MM revenues); 18 units closed in January
  • $1.2BN available liquidity RC; $1.45 BN at MGM China RC
  • 4Q $127MM domestic capex 
  • FY 2013 domestic capex: $324MM - in-line with guidance
  • 4Q other capex:  $4MM MGM Macau, $51MM MGM CHINA 
  • FY 2013 other capex:  $35MM MGM Macau; $204MM MGM Cotai
  • 2014 domestic capex:  $350MM ($75MM LV arena, $170MM PG MD) 
  • 2014 other capex:  $70MM (MGM MACAU) $500MM (MGM cotai)
  • MGM CHINA:  mass volume +12% YoY;  slot handle increased 16% YoY; continued remodel/refurbishments; 
  • CNY was very successful in Macau and Las Vegas
  • Great CES show; very strong month of conventions in January, another strong month in February, successful Super Bowl and March is looking good
  • Continue to focus on FCF


Q & A

  • Quality of convention mix is improving in 2014 - higher banquet/catering/restaurant spending
  • Are more comfortable for 2014 LV REVPAR than they did before; strong in the year, for the year business
  • 2014:  50-60% flow through target 
  • Domestic hold was down a touch in 4Q except for Aria
  • Casino license renewal process for 5 yrs?  Misunderstanding of the issue.  Gov't always had the power to review after 5 yrs.  Govt is comfortable with system in place.
  • Most of 2014 REVPAR growth will come from rate
  • 2015 REVPAR will be better than 2014
  • 2015/2016/2017 convention pace is higher than previous 5 years
  • Airlift also higher; McCarran passengers increased 2%
  • Westjet increased 18 flights to Las Vegas
  • Confident Group business in 2014 will be better than in 2013
  • Lower provisions in 4Q?  Yes.  Some reversals.  Does not expect changes in 2014.
  • Luxury properties had pretty good strength; core properties continue to be challenged by consumer spend.  Correlation between ADR and spend is there.
  • Mandalay Bay/Luxor will have renovations
  • Monte Carlo/NYNY will be positively impacted by Arena and Linq projects
  • MGM China dividend policy:  up to 35% of profits
  • MD/MA:  will own a substantial portion; will use corporate facility for construction spending; try to keep balance sheet relatively neutral
  • Asset sales?  Recently sold some land on outskirts of Strip.  May consider further sales.
  • Borgata license:  dialogue continuing. In 1H 2014, will be back in front of NJ DGE commission.  
  • Vacation accrual reversal:  $4MM
  • LV Strip slot business:  up when the market is actually down
  • Overall slot business down due to the regional properties

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more

McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

read more

Amazon's New 'Big Idea': Ignore It At Your Own Peril

"We all see another ‘big idea’ out of Amazon (or the press making one up) just about every day," writes Retail Sector Head Brian McGough. "But whatever you do, DON’T ignore this one!"

read more