Still a lot of post Q1 uncertainty
CONF CALL NOTES
- 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
