MGM Resorts Conference Call Highlights

MGM Resorts

reported its third quarter earnings on Thursday. Shares of the company are up 1%. Below are some key highlights from its conference call: Financial Progress: • In the third quarter, MGM grew its revenues by 1% and its adjusted EBITDA by 2%. • The reason for this is that we had a very robust mass market growth at MGM China and an increase in its EBITDA of 12%. • In the quarter we achieved top line growth with assured revenues up 3% despite a lower year-over-year hold on our tables games business. • RevPAR growth up 6% exceeded our guidance of 5%, and this was our eighth consecutive quarter of RevPAR growth. • In Las Vegas our EBITDA for the quarter was negatively impacted by approximately $40 million relating to lower table games hold. • We, along with our partners AEG secured the $200 million bank facility to fund the development and construction of our new 20,000 sea arena. • On the regional development front, the construction of MGM National Harbor in Maryland is progressing and remains on track for a fall 2016 opening. • On the hotel side, our RevPAR growth up 6% exceeded our guidance of 5%, and this was our eighth consecutive quarter of RevPAR growth. • We were able to grow our convention mix by three percentage points during the period and looking at the fourth quarter we expect to increase convention mix by about two percentage points, which will bring our full-year convention mix to an all-time record of approximately 17%. • Based on these current trends we expect fourth quarter RevPAR to be approximately up 5%. • CityCenter cash at the end of the quarter is approximately $404 million, which included about $157 million of restricted cash. • Total debt at CityCenter at the end of the quarter was roughly $1.5 billion. • During the quarter we spent approximately $103 million in CapEx related to our wholly owned domestic operations and an additional $46 million related to National Harbor and our Springfield efforts. • MGM China net revenues was $794 million. • This was a decrease of 2% year-over-year due to the decrease in our VIP games revenue. • However, EBITDA increased by 14% year-over-year to $226 million before our branding fee of $12 million. • Very pleasingly EBITDA margin increased by 330 basis points year-over-year to • 26.9%. • Our increased profit was driven primarily by our main floor table games. • MGM China's main floor table games increased by 34% year-over-year. • This is a significant over performance versus the market growth of 16%. • Our continued strength in this segment is driven by the appeal of the MGM brand, our property and our quality services. • It's consistent with the market trend. • Our overall hold was 2.7% compared with 2.8% last year. • Slot handle increased by 5% but our slot revenues decreased by 7% year-over-year due to lower hold. • We believe Las Vegas is extremely well positioned. • It's hard to believe now after being in 2009 and 2010, but year-to-date our visitation is up 4% for Las Vegas. • McCarran's Airport passengers are growing and importantly, the international passengers are up 12% year-over-year. • The Convention business is strong and building.