Takeaway: Not as bad as the headline number. Margins a worry although some of the higher cost related to employee retention


  • Challenging period for Macau
  • Gained market share in rolling chip
  • Repositioning in larger, higher quality junkets for CoD and Altira
  • MSC will open in 3Q 2015
  • Property margin:  25.1% in 4Q 2014, 28.5% in 4Q 2013. 27.5% in 3Q 2014
  • Luck-adjusted: $290m (25.8% margins) 
  • 85% of luck-adjusted EBITDA came from CoD
  • Employee retention program in 4Q:  required to increase retention by $5m (was not included in guidance)
  • CoD Manila:  from 1Q 2015, they will provide key operating metrics
  • 1Q 2015 guidance: 
    • D&A: $110-115m
    • Corp expense: $30m
    • net interest expense $40 ($11m Manila cost, $30 of capitalized interest)


  • Why margins down so much:  $5m incremental retention costs, operating leverage, lower mass market hold rates, lower entertainment revenues due to seasonality (more darker days)
  • Mass market hold rate decline:  need more time to do more research.  Hold rate may have been influenced by length of play, which was hurt by smoking ban.
  • Hit record levels in market share in mass and rolling chip volume share
  • CoD:  in terms of unit customers, was stable in 3Q and 4Q
  • New macau govt review:  non-gaming investment - MPEL feels very comfortable where they are.  
  • MSC hiring:  started mass recruitment recently
  • 2015 Macau GGR:  revised down to 'slight negative YoY'
  • CoD Manila:  strong domestic market 
  • Mocha clubs:  revenue decline due to smoking ban
  • Concerned about full smoking ban in 2016
  • Underutilized table capacity: continue to optimize table mix; happy to accept 200-300 new tables
  • Studio City has capacity for 500 tables:  MPEL believes they need 400 tables 'to make casino busy'.
  • Altira:  have created some of the nicest looking junket rooms. Will open 2 nice rooms before CNY 2015.  January did well, particularly in Rolling Chip. Has 3 out of the biggest 4 junket operators in Macau.
  • Smoking dispute:  100% comply with law
  • VIP Table productivity difference between Altira and CoD: at this point, it is quite close as Altira's has improved.  
  • Mass table productivity has also closed between the two properties
  • Promotional environment:  reinvestment in existing players has been similar in Q4 and Q3, from MPEL's perspective
  • MSC:  will attract daytrippers

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