MGM Resorts International

Good afternoon, and welcome to the MGM Resorts International first quarter 2022 earnings conference call. Joining the call from the company today are Bill Hornbuckle, Chief Executive Officer and President, Corey Sanders, Chief Operating Officer, Jonathan Halkyard, Chief Financial Officer and Treasurer, Hubert Wang, President and Chief Operating Officer of MGM China, and Andrew Chapman, Director of Investor Relations. Participants are in a listen-only mode. After the company's remarks, there will be a question and answer session. In fairness to all participants, please limit yourself to one question and one follow-up. Please note, this conference is being recorded. Now, I would like to turn the call over to Andrew Chapman. Please go ahead.

Good afternoon and welcome to the MGM Resorts International first quarter 2022 earnings call. This call is being broadcast live on the Internet at investors.mgmresorts.com. We've also furnished our press release on Form 8K to the SEC. On this call, we will make forward-looking statements under the safe harbor provisions of the federal securities laws. Actual results may differ materially from those contemplated in these statements. Additional information concerning factors that could cause actual results to differ from these forward-looking statements is contained in today's press release and in our periodic filings with the SEC. Except as required by law, we undertake no obligation to update these statements as a result of new information or otherwise. During this call, we will also discuss non-GAAP financial measures and talking about our performance. You can find the reconciliation of the GAAP financial measures in our press release and investor presentation, which are available on our website. Finally, this presentation is being recorded. I will now turn it over to Bill Hornbuckle.

Thank you, Andrew, and good afternoon, and thank you all for joining us today. I'd like to begin today's call by once again thanking our employees at MGM Resorts for the determination, agility, perseverance, and commitment to excellence that helped fuel another strong quarter for our company. We were challenged in January by the Omicron variant, but pivoted quickly into recovery mode, leading to multiple all-time EBIT dollar records at several of our Las Vegas and regional properties in March. These results showcase the strength of our talented team across the country, our focus on operational efficiency, and the continued strong demand for the service and experience we provide at MGM Resorts. Today, I want to acknowledge and thank our employees again for all that they do every day to take care of our guests and each other. As a company, we remain laser-focused on our strategic plan and our long-term vision to be the world's premier gaming entertainment company, As a reminder, our strategic plan consists of the following four priorities. Investing in our people and our planet, providing unique experiences to our guests by leveraging data-driven customer insights and digital capabilities, delivering operational excellence at every level, and allocating our capital responsibly to yield the highest return for our shareholders. Over the last several quarters, we've discussed the meaningful steps we've taken to simplify our corporate structure, and monetize our real estate assets to meaningfully bolster our domestic cash transition. We reached another important milestone in this journey, Friday, April 29th, when we closed the strategic transaction with MGM Growth Properties in Vichy. I'd like to thank James Stewart, Andy Chen, and the board and employees of MGP for all the support and for the great relationship we have built over the years. Our transaction with Vichy allowed us to fully deconsolidate MGP from our financial reporting, and it also meant that it was approximately 4.4 billion cash, which we will use to invest in our core business, will also lead to meaningful growth opportunities. One such opportunity is our announcement today of the tender for Leo Vegas. Our success with BetMGM United States gives us more conviction than ever about the potential for digital gaming and our ability to grow share in the exciting new marketplace. And with this conviction, we're expanding internationally with the team at Leo Vegas. Its strong technology platform and pipeline for growth present a compelling opportunity for our business to grow online. We'd like to thank the management team at Leo Vegas for the professionalism and support throughout the process, and we look forward to working with that team when the deal closes in the second half of this year. Another opportunity that we're quite excited about is the pursuit of a commercial gaming license in New York. The recently enacted fiscal year 23 budget includes provisions that will allow the issuance of up to three new licenses in the state. We'd like to thank Governor Hochul and the New York legislature for getting this important issue across the finish line. We're eager to begin the RFA process and share our vision for the future of the property in Yonkers, where if we receive a license, we plan to replace the existing VLTs with slot machines and add table games to our existing casino floor and construct new amenities on portions of our 97-acre site. Again, we're excited by this opportunity and look forward to investing this discipline in New York to create new jobs and foster economic growth in the region. Turning to our Las Vegas growth strategy, we made solid progress towards our acquisition of the operations of the Cosmopolitan of Las Vegas and are on track to close this quarter. The Cosmopolitan is an iconic brand of the loyal and complimentary customer base that will further enhance our Las Vegas Strip portfolio. We've met with key leaders at the Cosmopolitan over the last weeks and months and are impressed by the quality of their team as well as the culture and the brand that they have built. We look forward to welcoming all the co-stars of the Cosmopolitan to MGM Resorts and adding this existing property to our portfolio. We've also made progress on the sale of the operations of the Mirage to Hard Rock International, which we announced last year. We are working closely with regulators to ensure a smooth transition and expect this transaction to close in the second half of this year. Shifting to our international growth strategy, last week we submitted our area development plan to the government of Japan with our partners at Oryx and the city of Osaka. This is the final milestone before a license decision will be made hopefully in October of this year. We continue to work closely with the national government to obtain a license that will be hopefully awarded later this year. and bring a fully integrated resort into Japan. In the UAE, we continue to make progress in beginning the MGM brand family to Dubai, where we have a management agreement for an integrated resort being developed in partnership with WASL. The project has broken ground in the development process, and we remain diligent for opportunities to bring the MGM brand to other locales around the world. During the BED MGM, we are now live in 23 markets with New York, Illinois, Louisiana, in Puerto Rico coming online in the first quarter, and Ontario launching in early April. In February, BetMGM commended the 24% market share in active markets in both U.S. sports betting and iGaming, which put us in the number one position nationwide. BetMGM is the clear leader in iGaming, having reached 28% market share in February. The BetMGM management team will be able to provide more color on results and the strategy at their investor meeting on Thursday, May 12th. Finally, I'd like to spend a few minutes on our organic growth strategy. On February 1, we relaunched our loyalty program as MGM Rewards with the goal to, quote, target high-value non-gaming customers in addition to gaming customers, increase cross-property patronage and tier progression while motivating benefits, and further activate that MGM customers at our properties. We've seen solid results since the launch of MGM Rewards in Q1, particularly as it relates to our omni-channel growth strategy with BetMGM. In the first quarter, 57% of our MGM Rewards enrollments came via BetMGM, driven by the Super Bowl, compared to 39% for the full year in 21. We've committed to our strategy of building loyalty between our different channels and ultimately creating a seamless experience for our customers to play both online and in person. Before I turn this over to Jonathan, I'd like to hit a few highlights of our current trends and our future outlook. In Las Vegas, we maintained strong margins in the first quarter, a reflection of the sustainable operating learnings implemented from the pandemic. Strong weekend occupancies and ADR were driven by a robust event calendar, and we see that trend continuing into the second quarter. For the midweek, our occupancy is still behind 19, but an improving mix of business, and a growing group base will allow us to ramp in the remainder of the year. We continue to expect our convention room nights to reach 90% of 2019 levels in the back half of 2022. Importantly, we are seeing increased spend levels for our groups year to date, including catering and banquets. And to spotlight our international leisure trends, we're beginning to see positive indicators of the return of international flight capacity. In fact, by this summer, The LBCBA expects international flight capacity to return to 80% of pre-pandemic levels. Further highlight events in Las Vegas, we were honored to host the Grammys at MGM Grand Garden. We welcomed the BTS Army to our properties for four sold-out shows at Legion Stadium. This past weekend, we also hosted the NFL Draft, which activated the entire Las Vegas Strip. We also have big sporting events coming. the nc2a men's basketball regionals on tap for march of next year along with the first of a kind only one race in the las vegas strip in november of 23 and of course we'll host the super bowl in february of 24. all of these big events show the incredible progress the city has made as an entertainment and sports destination looking to our regional properties we had a very strong first quarter with competitive margins to 2021 and we are focused on driving strong rated gaming revenues by using our database with the highest value players. Finally, I want to touch briefly on our operations in Macau. We continue to see headwinds in the short term with public health policies impacting the ability for customers to enter Macau. Despite this, our 13% market share is higher than we have seen historically, and our properties are well positioned to capture premium mass business as volumes begin to return. Concession renewal process is underway, and we remain confident in the government's judicious and fair approach to this process. Macau is an important part of our future, and we will continue to work with the government to ultimately get our license renewed. We look forward to further promoting the long-term development of Macau's gaming industry and supporting the government's tourism and diversification goals for the region. With that, I'll turn it over to Jonathan to discuss the details of the quarter.