Consensus estimates, management guidance and commentary, and questions for management in preparation for the earnings release/call tomorrow.




• Total revenues:  $3,299 million

o Owned, Leased:  $232 million

o Franchise Fees:  $167 million

o Base Mgmt Fees: $158 million

o Incentive Mgmt Fees:  $69 million

• Adjusted EBITDA:  $326 million

• EPS:  $0.51/share



Q1 2014:

  • Comparable systemwide RevPAR on a constant dollar basis:
    • North America: +4% to +6%
    • Outside North America: +3% to +5%
    • Worldwide: +4% to +6%
  • Total fee revenue: $380-$395 million
  • D&A: approx. $30 million
  • G&A and other: $155-$160 million
  • Operating income: $235-$255 million
  • Gains & other income: approx. $5 million
  • Net interest expense (net of interest income): approx. $30 million
  • EPS: $0.47-$0.52

FY 2014

  • Comparable systemwide RevPAR on a constant dollar basis:
    • North America: +4% to +6%
    • Outside North America: +3% to +5%
    • Worldwide: +4% to +6%
  • Adjusted EBITDA in the range of $1.425B to $1.495B.
  • Total fee revenue: $1,650-$1,700 million
  • D&A: approx. $120 million
  • G&A and other: $640-$650 million
  • Operating income: $1,090-$1,160 million
  • Gains & other income: approx. $10 million
  • Net interest expense (net of interest income): approx. $110 million
  • EPS: $2.29-$2.45
  • Tax Rate: 32%


  1. Views on share repurchases given stock strong performance?
  2. Where are inflation pressures negatively impacting margins?
  3. Update regarding Gaylord booking, acceptance into the MAR group bookings channel?
  4. How is Gaylord performing relative to expectations?
  5. What insight from the Protea acquisition during the first four weeks of integration and operation?
  6. Which part of your business is trending below plan and why?
  7. How is Europe looking for this coming summer?
  8. Which parts of the World are experiencing weakness?
  9. Recent commentary from Delta Air Lines indicated strong price taking in April, May and June of this year, also MGM indicated ITYFTY is their friend in 2014, how does that compare with what the company is seeing for transient or ITYFTY bookings?



Financial statement adjustments

  • Beginning in the first quarter of 2014, the company will reclassify depreciation and amortization expense from “Owned, leased and corporate housing -direct” and “General and administrative and other” and present it as a separate line item on its Consolidated Statements of Income for all periods presented.

Protea Acquisition

  • April 1, 2014, completed the acquisition of Protea Hospitality Group covering 116 hotels and 10,148 rooms in seven African countries.
  • The company paid approximately $200 million at roughly 10 times anticipated pro forma 2014 calendar year EBITDA
  • Marriott now manages approximately 45 percent of Protea's rooms, franchises approximately 39 percent, and leases approximately 16 percent.
  • Protea's pipeline is more than 65 hotels and 14,300 rooms, including more than 20 hotels and 3,000 rooms in Sub-Saharan Africa
  • Protea Hospitality Group created an independent property ownership company that retained ownership of the hotels PHG formerly owned, and entered into long-term management and lease agreements with Marriott for those hotels. 
  • The property ownership company also retained a number of minority interests in other Protea hotels.


  • Transient business comes back more quickly than group and transient has rebounded in a very similar way in this lodging recovery as prior cycles


  • Group REVPAR at the Marriott brand rose over 4% in Q4 compared to the year ago quarter, with group room rates up nearly 3%
  • Future group business looks even brighter
  • Group booking pace for the Marriott brand for 2014 is up over 4%, about the same as we reported in September and corporate group pace is up nearly 10%
  • Record levels of group business confirmed and booked in December 2013 - and that gives us further bullishness that group is doing what it should do as the economic cycle matures and that is, it’s coming back. Hopefully, we’ll see those trend lines continue in early 2014.
  • Corporate demand is quite short-term, the trend is very encouraging for 2014
  • 60% of 2014 group business is already on the books
  • Expect system-wide RevPAR at North American hotels will likely increase at a 4% to 6% rate in 2014, with the improvement largely coming from rate.

Washington DC

  • Washington suffered from, well, being Washington


  • Signs of improved economic growth


  • REVPAR growth was strong in Kuwait and Dubai, but we saw significant REVPAR declines in Egypt

Caribbean/ Lating America

  • Good leisure business and group demand drove results in the Caribbean and Cancun reported double-digit REVPAR growth
  • Panama continues to report lower REVPAR due to oversupply

Asia Pacific

  • Expect mid-single-digit constant-dollar REVPAR in 2014, constrained a bit by recent supply growth
  • Government austerity measures intensified in Beijing, reducing food and beverage revenue


  • In 2014, expect G&A to be flat to down 2% YoY
  • In 2014, we are going to be more maniacally focused on managing G&A dollars

Capital Allocation

  • Approx $1.25 billion to $1.5 billion could be returned to shareholders through share repurchases and dividends and we expect to continue to repurchase shares in 2014.
  • As of February 18, 2014, Marriott repurchased 5.0 million shares of its stock for $246 million.
  • On February 14, 2014, the board of directors increased the company’s authorization to repurchase shares by 25.0 million shares for a total authorization of 34.3 million shares as of February 19, 2014.

Investment Spending

  • Investment spending in 2014 will total approximately $800 million to $1.0 billion, including approximately $150 million for maintenance capital spending
  • New mezzanine financing and mortgage notes, contract acquisition costs (including the approximately $200 million payment associated with the Protea transaction)


  • At year-end 2013, MAR’s worldwide development pipeline increased to over 195,000 rooms, including nearly 30,000 rooms approved, but not yet subject to signed contracts
  • The company anticipates gross room additions of 6% worldwide for the full year 2014 including the Protea hotels.
  • Net of deletions, the company expects its portfolio of rooms will increase by approximately 5% by year-end 2014.

Asset Sales

  • January 3, 2014: total purchase price for the three EDITION hotels ( sold the London EDITION, and signed binding agreements for the sale of two other company-owned EDITION hotels currently under development in Miami Beach and Manhattan) is approximately $815 million, roughly equal to the aggregate estimated total development costs of all three hotels. The hotels will each be operated by Marriott under long-term management contracts with their new owners, which are companies ultimately owned by the Abu Dhabi Investment Authority. Marriott expects to convey each hotel individually to the new owner after construction is complete. he residential component of the Miami Beach EDITION was not included in this transaction. Marriott will retain ownership of the residential units pending their sale to individual purchasers.
  • January 30, 2014: sold its leasehold interests in the Renaissance Barcelona Hotel to an affiliate of the Qatar Armed Forces Investment Portfolio (QAFIP) for approximately €78 million including €45 million ($62 million) cash and the assumption of €33 million ($45 million) of related obligations.  The hotel will continue to be operated by Marriott under a long-term management contract.


Consensus estimates, management guidance and commentary, and questions for management in preparation for the earnings release/call tomorrow.




  • BETTER - Strong Q1 2014 results slightly exceeded our Consensus high projection slightly. We're less optimistic about the rest of the year but trends should remain positive on the Strip and especially in Macau. 



    • Q1 RevPAR Strip RevPAR 14% based on +200 bps occupancy and +12% ADR, but expect Q2 RevPAR +5%.  Q2 Aria RevPAR +14%, Vdara RevPAR +21%.
    • January RevPAR +9%, February RevPAR +10% versus Q1 results.  
    • ITYFTY is a friend in 2014
  • PREVIOUSLY:  1Q REVPAR expected to be up ~10% YoY, feel good about the remainder of the year, most of the REVPAR growth will come from rate.

Slot business:

  • SAME: U.S. business improving as seen in slot handle and slot win (non Bacc table revenues and market share both increasing)
  • PREVIOUSLY: Slot business here in Las Vegas is actually up when the market has been actually down.  Overall slot numbers are down because of the regional properties

Strip development:

    • The Park, AEG Arena, Delano targeted Sept completion, NYNY retail reconfiguration targeted for December completion, Mandalay Bay Convention Center expansion, "City of Rock" music venue.
    • More projects aimed at stimulating demand and improving the guest experience and thus driving incremental interest and demand by corporate groups, leisure and FIT sectors.
  • PREVIOUSLY: Strip frontage at New York-New York and Monte Carlo will be completed in the first half of this year.  New park will be completed in 2016.  Remodel of THEhotel into the Delano will begin in April and expected to be completed by September.

MGM Cotai:

  • SAME: MGM Cotai - well underway, 2016 opening.
  • PREVIOUSLY: Increased project cost from $2.6b to $2.9b, open in early 2016

MGM National Harbor:

  • SAME: break ground in a few months, focused on design, development and programming, no change to the $1 billion budget, most profitable non Las Vegas casino development in the US and expect to open summer 2016
  • PREVIOUSLY: Ground break in the summer and opening in 2016


  • SAME: go before Commission in June 2014, monitoring referendum while also waiting for "appeal" referendum; Supreme Court must rule before July 9th to make November ballot; awaiting Commission license award.  However, gaming is polling favorable across MA with voters
  • PREVIOUSLY: Remain very excited about the opportunity for a downtown revitalization project in Springfield.  Await a decision and awarding of that license this year.

Convention market:

  • SAME: CY 2014 total room nights will be 16% from convention mix
  • PREVIOUSLY: Strong convention market in Las Vegas in 2014 with improving corporate business.  Expect 1Q convention mix to be ~22%, near peak levels for any 1Q prior  FY 2014:  expect convention mix to increase to 15.5-16%, which is beginning to approach prior peak levels.
  • SAME: Up double digit pace in 2014 vs. 2013 and 2015 vs. 2014.
  • PREVIOUSLY: Convention pace for 2015, 2016, 2017, all look above where they were prior year for the previous years.

Strip flowthrough:

  • SAME: Flow through was 55% vs. 50-60% expectation
  • Flow through was a bit better than expectations due to strong collection efforts which have been consistent throughout the year, continued refinements to our M life program, and a change to the employee vacation policy and accrual.  As a result, Strip flow through was approximately 70% in 4Q, above 50% to 60% target.


  • PREVIOUSLY: Added a few more tenants and look forward to bring on a few more in current calendar year

Luxury vs Core

  • SAME: Luxury is 18-20% below 2007 peak cash floor.   "Core" is down >30% off peak (other half of portfolio).
  • PREVIOUSLY:  Luxury properties continue to see a pretty good customer and continue to hope to see them improve their spending. By comparison core properties, they continue to be challenged on consumer spend.  The correlation between the ADR and spend is definitely there.

2014 non-operating guidance

  • SAME:
    • Domestic CapEx spend - $425 million, includes MGM contribution to AEG Arena
    • During Q1: 
      • US CapEx $72m
      • MGM China $121m with
      • $14m spend at MGM Macau and
      • $107m on Cotai development
    • Capex at wholly owned domestic resorts:  $350m
    • JV LV arena: $75m on MGM's share of investment
    • National Harbor: $170m on development costs
    • MGM Macau: $70m
    • MGM Cotai: $500m


Consensus estimates, management guidance and commentary, and questions for management in preparation for the earnings release/call tomorrow.




  • Total revenues:  $159 million
  • Adjusted EBITDA:  $107 million
  • FFO:  $0.68/share
  • AFFO:  $0.71/share


Q1 2014:

  • Total Rental Income:  $477 million with ~$421 million from PENN, ~$13 million from Casino Queen, ~$46 million to account for property taxes paid by PENN, and reduced by ~$3 million to account for non-assigned land lease payments made by PENN
  • Net Revenue:  $158.1 million
  • Adjusted EBITDA:  $106.6 million
  • Net Income:  $44.1 million
  • Real Estate Depreciation:  ~$23 million
  • Non-real estate deprecation: ~$3.5 million
  • Funds From Operation:  $67.1 million
  • Adjusted Funds From Operation:  $74.2 million
  • Net Income, per diluted common share: $0.72
  • AFFO, per diluted common share:  $0.71

FY 2014:

  • Net Revenue:  $630.8 million
  • Adjusted EBITDA:  $432.6 million
  • Net Income:  $181.1 million
  • Real Estate Depreciation:  ~$92 million
  • Non-real estate deprecation: ~$14 million
  • Funds From Operation:  $272.8 million
  • Adjusted Funds From Operation:  $301.8 million
  • Net Income, per diluted common share:  $1.59
  • AFFO, per diluted common share:  $2.65



  • Argosy Casino Sioux Falls
    • Given IRGC ruling the property is to closed by July 1, how should revenue and expense assumptions be revised? 
    • Why did GLPI guidance include a full year of operation for Argosy Sioux City when the GLPI S-1A indicated:  "GLPI also includes rental income of $5.2 million for the entire period related to Penn's Sioux City casino which, based on recent events, may be forced to close as early as July 2014"
  • If the acquisition pipeline is so vast ($10 billion by some reports) and the company has little competition for transactions, why have we not see press releases announcing acquisitions?  And, if the pipeline is so full, why the need to hire a SVP of Corporate Development, who has corporate finance/investment banking history?
  • Would the company consider a large portfolio/transformative acquisition that would require a concurrent issuance of equity either to the seller or into the open market? 
  • Discuss the current valuation gap between potential sellers and buyers of gaming assets?
  • Thoughts on diversifying tenants.  Would you consider sale/leasebacks with BYD, PNK, or even an MGM?
  • With weak regional trends, are you comfortable with maintaining the current levels of rental payments.



Development Pipeline

  • Mahoning Valley Race Track - Hollywood themed facility with up to 1,000 video lottery terminals as well as various restaurants and amenities. To be managed by Penn National Gaming, with expected opening in the fall of 2014.   Planned budget $100 million, $25.9 million expended as of 12/31/2013
  • Dayton Raceway - Hollywood themed facility with
    up to 1,500 video lottery terminals as well as various
    restaurants and amenities. To be managed by Penn
    National Gaming, with expected opening in the fall
    of 2014. Planned budget $89.5 million, $26.2 million expended as of 12/31/2012


  • During January, the Company completed the acquisition of Casino Queen in East St. Louis, Illinois for $140 million. GLPI also provided Casino Queen with a $43 million, five year term loan at 7% interest, pre-payable at any time, which, together with the sale proceeds, completely refinanced and retired all of Casino Queen's outstanding long-term debt obligations. GLPI leased the property back to Casino Queen on a triple net basis for approximately $14 million in rent per year.

Balance Sheet

  • The Company had $285.2 million of unrestricted cash on hand
  • No balance outstanding under the $700 million unsecured credit facility revolver


  • The Company owned the real estate associated with 21 casino facilities, including two facilities currently under development in Dayton and Youngstown, Ohio and leases, or expects to lease with respect to Dayton and Youngstown, 19 of these facilities to Penn. Two of the gaming facilities, located in Baton Rouge, Louisiana and Perryville, Maryland, are owned and operated by a subsidiary (GLP Holdings, LLC) of GLPI.

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Consensus estimates, management guidance and commentary, and questions for management in preparation for the earnings release/call tomorrow.




  • EBITDA:  $151 million
  • Revenues: $548 million
  • EPS: $0.41


  • Q2 trends relative to weather adjusted Q1.
  • What are the important macro variables contributing to regional gaming weakness?
  • How much of an impact is demographics playing in the soft trends? 
  • Breakdown of weakness across casino segments.
  • Have you been able to quantify the impact of the rewards sharing program with MGM?
  • What is causing the recent weakness in Louisiana?
  • Competitive environment for Belterra Park
  • Additional comments on Orange Capital's REIT push
  • What can be done to revive the lower spending segments?
  • Progress on Ameristar synergies
  • Update on Vietnam - hidden asset?



Integration revenue synergies:

  • Have moved quickly to put the infrastructure in place so that we can begin to realize revenue synergies during the first half of 2014.

Business Trends:

  • Similar to 2013, trip frequencies continued to decline with people visiting less often, while spend patterns have remained relatively stable.  Trip declines are particularly pronounced in the less than $100 average daily theoretical segment and end markets with new competition.

Marketing Spend:

  • Continue to be very focused on driving profitable revenue and applying a rational approach to marketing spend. Reinvestment declined both in terms of dollars and as a percentage of gaming revenue, down 240 basis points year-over-year.

L'Auberge Baton Rouge:

  • Market share increased 420 basis points from prior year with healthy growth from both the local and regional play
  • Hotel also continues to be a very good story with this property achieving the second highest RevPAR in the company.

River City:

  • Continues to outperform the market with a 230 basis point improvement in market share during the fourth quarter.


  • Performed pretty well in the face of a challenging environment, as our margins in the Midwest also improved despite a 4% decrease in net revenues.


  • Feel very confident in ability to meaningfully exceed the target of $40 million of annualized merger synergies.  In fact, PNK expects to exceed this $40 million number of implemented synergies by the end of 1Q 2014, with more to come. 
  • The loyalty program will launch in April, so haven't seen any impact at the Ameristar properties along those lines. VIP marketing, house coding our branch offices, all of those efforts are very early in the execution stage. Some are still in the planning stage, but we are beginning to execute most of our revenue synergies in the first and second quarter of this year.

New Orleans hotel:

  • The project remains on budget and is expected to open early summer.

<$100 segment:

  • Decline in the less than $100 segment was driven in part by the elimination of unprofitable programming that PNK had in place in Q4 2012.  And some was driven, as you've seen across our sector just by macroeconomic issues that are affecting the lower risk segments in our business.

Database integration spend:

  • Expect this year to have roughly about $10 million or so that will be spent on that in 2014. It'll be largely done by the end of this year.

Non-operating guidance:

  • Corp expense:  continue to trend down towards $20m
  • D&A:  The real operating number should end up being in the mid-50s or so, with this player list depreciation putting it in the call it $60 million to $65 million.
  • Cash taxes:  $10m


In an effort to evaluate performance, we compare how the quarter measured up to previous management commentary and guidance




  • MIXED:  A larger than expected share repurchase program and better fuel management offset weaker yield guidance. NCL may be out of the woods until competition heats up with RCL's Quantum in Q4. 



Bookings outlook:

  • BETTER:  Bookings have picked up since Triumph lap in mid-Feb.  Here is the bookings outlook by geography:
    • Europe (Baltic/Canary Islands/Med): highly favorable
    • Hawaii:  on par 
    • Canada/New England:  heavily booked 
    • Caribbean:  low; still has opportunity
  • PREVIOUSLY:  Thinks they lost a little bit of ground but not anything to be concerned.  Is comfortable with each of the quarters.

Capital allocation:

  • BETTER:  While the repurchase program was not really a surprise, the magnitude was.  A $500m share repurchase program accounts for 7% of outstanding shares.  Will they buy Genting shares?
  • PREVIOUSLY:  Shorter-term solution or answer would be to do some stock acquisition.  If the selling shareholders are still in the puzzle,could marry with that at the appropriate discounts or whatever. And then, at some point, start a dividend (probably would be at least a year later than the first step with the share repurchase).


  • WORSE:  Aggressive pricing is overpowering improved bookings.  Cautiously optimistic on the Caribbean in 2015 as capacity growth will be minimal.
    • There's a lot of capacity in Miami, but it's no different than anything else
    • More focused today on Bermuda and optimizing that opportunity in that premium itinerary.


  • WORSE:  Higher promotional environment led to a reduction in net yield guidance
  • PREVIOUSLY:  Environment has remained in a promotional state


  • BETTER:  Continued improvements in fuel efficiencies (saved $5-6m).  Premiums over core fleet remain in double digits, although at the expense of lower prices across the fleet.
  • PREVIOUSLY:  We've been having a consistent performance in the Miami market


  • SAME:  Alaska pricing is growing in the low single digits
  • PREVIOUSLY:  Some softness in Alaska where the introduction of a third ship for the first time since 2009 was coupled with a unique itinerary
    • Feel pretty good about Alaska


  • BETTER:  Pricing is up double digits and significantly higher loads in Europe.  But mgmt attribute it to very easy comps.
  • PREVIOUSLY:  Feel pretty good about Europe

Fuel efficiency: 

  • BETTER:  Fuel expenses and consumption beat in 1Q.  Fuel expenses were lowered by almost $20m for the year.
    • Expect consumption savings to increase as further energy saving initiatives are implemented and NCLH take delivery of newer more fuel-efficient ships.
    • Have received exemptions from the appropriate regulatory agencies to burn high-filter bunker fuel until installed. These scrubbers carry a very attractive return on investment and reduce our sulfur emissions to comply with the upcoming eco fuel Standards.

Cost cuts:

  • SAME:  Marketing G & A as a % of gross revenue fell 3.6% points to 12.6%.
  • PREVIOUSLY:  Leveraging SG&A, with bringing on these additional ships and their being roughly double the size of NCLH's existing fleet.

Organic pricing/ comp fleet:

  • WORSE:  Core fleet pricing in the Caribbean fell more than mgmt expected
  • PREVIOUSLY:  Very positive

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