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

Q2 2014 CONSENSUS ESTIMATES

  • Total revenues:  $2.578 billion
  • Adjusted EBITDA:  $592 million
  • EPS:  $0.10/share

QUESTIONS FOR MANAGEMENT

  1. Strip casino demographics:  frequency of visits, spend per visit
  2. Q2 gaming trends look encouraging on the Strip. Can it be sustained heading into 2H 2014? Or will gaming spend under perform non-gaming?
  3. Convention rooms booking pace for 2015?
  4. What % of your chinese VIP player database do you cross market (e.g. Macau/Vegas)? Has VIP Chinese play picked up in Q2 - in either Las Vegas or Macau? Is there a correlation between Macau VIP and LVS?
  5. MGM Macau table revenue fell in 2 out of the 3 months in Q2, significantly underperforming the market due to VIP exposure.  How do you feel about the VIP customer in 2H 2014?  How is the performance of the new table initiatives?
  6. What factors attribute to the recent pick up in mass share at MGM Macau?
  7. How do you feel about your chances regarding the Massachusetts repeal referendum in November?
  8. Is the construction on MGM Cotai on track? Any labor issues?  What delays are you facing? Any permitting issues?
  9. Discuss early thoughts on how to address debt maturities in 2015 and 2016?

RECENT MANAGEMENT COMMENTARY

LAS VEGAS:

Overall

  • Market share is improving in a growing market
  • Control about half of the convention market

2Q REVPAR

  • Based on current trends, MGM expects second quarter RevPAR to grow by approximately 5%.

CityCenter

  • 1Q:  On the hotel side, ARIA was able to grow RevPAR by some 14% YoY, driven by both improvements in occupancy and ADR.  Vdara had a record quarter, with hotel occupancy of 89.5%, an increase of over 400bps, and ADR increased 16% to $185, driving RevPAR up 21% to $165 in the quarter. Crystals continues to gain more traction and it, too, recorded results with EBITDA increasing some 30% year-on-year compared to the prior quarter.
  • Expect a record year out of Crystals in 2014 and probably better yet in 2015

Gaming metrics

  • International gaming business remained strong, and domestic rate of play continues to improve.  MGM saw increases in volumes across each of our casino segments – baccarat, non-baccarat table games, and slot handle YoY.  Slot handle and non-baccarat market share continues to grow.

Convention mix 

  • Expect to be near our prior peak for the entire year at around 16% of our total room nights coming from convention.  And to continue to grow this mix beyond that peak, MGM ultimately need more space
    • Mandalay Bay is the place to do that. It has 1.7 million square feet of convention space today and MGM is expanding that to 2 million square feet and that will not only retain and grow MGM's existing groups but also to attract a wide array of new trade shows and corporate groups.  This will solidify MGM's trade-show business while allowing them to increase their high-margin corporate business. They expect great ROI from this in 2016.
  • Seasonality:  strongest in the first quarter, good in the second quarter, weakest in the third and then flat or up in the fourth.

Corporate mix

  • In terms of corporate mix last year, it was about 55% and that's picking up this year to closer to 60% in terms of bookings and that's higher margin particularly in the F&B side.

Interest Expense

  • Interest expense decreased by some $16 million YoY 1Q as a result of continued efforts to lower borrowing costs and reduce debt; MGM expects this trend to continue.

Monte Carlo

  • Strip frontage at Monte Carlo is near completion.  MGM has already opened up three restaurants and are already experiencing significant traffic increases on that side of the Strip.

New York New York

  • Opening up Hershey's next month, which will be a killer and drive a lot of traffic over to the NYNY facade and continue that traffic increase when MGM opens up Tom's Urban and Shake Shack in December 2014.

LV Arena

  • In between NYNY and Monte Carlo that be about 80,000 square feet of very high energy entertainment and food and beverage. 
  • All of that opens in early 2016, accruing to the benefit of those properties and the west side of the Strip and across the street at MGM.

Mandalay Bay - THEhotel Delano remodel

  • Expect to be done in September...expect a significant increase in RevPAR 

MGM National Harbor

  • On track for Summer 2016 opening

myVegas

  • Vastly exceeded expectations with over 850,000 average daily users on social gaming sites

Flowthrough

  • 1Q 2014 flowthrough was 55%, in-line with expected range of 50% to 60% despite a lower hold comparison in the quarter.

MGM MACAU

  • Looking at cross segment table yield improvement opportunities between the VIP and the mass as well as product upgrades to refine the MGM experience 
  • Sustained market share
  • Mass market is now getting to that point where it's anchoring most of the operator's EBITDA performance (70% of 1Q EBITDA). And MGM sees that as being strong growth.