MGM Resorts International

Good afternoon, and welcome to the MGM Resorts International second quarter 2023 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 currently in a listen-only mode. And after the company's prepared remarks, there will be a question and answer session. In fairness to all participants, please limit yourself to one question and one follow-up on today's call. Please also note that this event is being recorded. I would now like to turn the call over to Andrew Chapman.

Good afternoon and welcome to the MGM Resource International second quarter 2023 earnings call. This call is being broadcast live on the internet at investors.mgmresource.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. Since it's required by law, we undertake no obligation to update these statements as a result of new information or otherwise. During the call, we will also discuss non-GAAP financial measures and talking about our performance. You can find the reconciliation of 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 thank you all for joining us this afternoon. I'm happy to share that MGM Resorts posted an all-time record for consolidated net revenues in the second quarter. We achieved strong earnings across our domestic portfolio with near record second quarter adjusted property EBITDA results at MGM China and the first quarter of positive EBITDA at BetMGM. At a high level, we're seeing strong demand trends in Las Vegas, casino drop and handle up year over year alongside increasing hotel revenues with our fourth quarter hotel revenues forecasted to be the highest of all time. In our regional operations, we achieved year over year top line growth on a same store basis, taking into consideration the sale of the Gold Strike Tunica with profit margins in the range of prior quarters. We're continuing to evaluate our business and evolve our products to ensure that we're maximizing profit while maintaining great customer service levels. Our second quarter results are continued testament to our 75,000 plus employees and their commitment to offering world-class service and memories for our guests. Simply stated, our employees are the best in the business and I want to thank them for helping us deliver another outstanding quarter in Las Vegas in our regional locations, and ultimately in Macau. While we're certainly pleased with the results we've achieved in the first half of this year, we frankly are even more excited by what's to come on the back half, starting with the historic long-term agreement with Marriott International that we announced last month. As part of this agreement, we've created a new MGM collection with Marriott Bonvoy, allowing its more than 180 million members to book rooms and earn and redeem Marriott Bonvoy points at 17 MGM Resorts domestic properties. This agreement will enhance our profitability by driving lower customer acquisition costs and with a better mix in higher ADRs and on property spend. By 2025, our expectation is that the Marriott customer base will represent a meaningful segment of our hotel mix at premium rates. Jonathan will expand further on this business case in his section. I'd like to personally thank Tony Capuano and his team for their partnership and collaboration throughout this effort, and we can't wait to get started in the fall. Looking into the third quarter, we have great programming, including Black Cat at Mandalay Bay, Magic at the Convention Center, and Beyonce at Allegiant. Bookings are strengthening for the remainder of the year, and as we get close to the Formula One in November. We've also got a great fall home schedule for the Raiders, which will have fans flocking into Vegas and Green Bay, Pittsburgh, Kansas City, and New England, among other cities that all travel well. For Formula One, while still early, we already have twice the occupancy on the books and at four times the average rate compared to last year, and with more than 70% of our ticket inventory already committed. A portion of these tickets will go to our gaming customers, and early front money and credit data suggested Formula One is shaping up to be an all-time record casino event for the company. Our pace into the second quarter of 2024 is also setting up quite well, excuse me, the first quarter, highlighted by the Super Bowl at Allegiant Stadium in February. We're already seeing stronger rates in a typical Super Bowl weekend with exceptional early business from sponsors and media that has led to three to four times higher room rates on the books. Looking longer term, we're excited by the possibilities of welcoming the A's to Las Vegas, literally in our front yard at the current Tropicana site. The A's proposing a 30,000-seat stadium, representing an additional 2.4 million seats every year during the regular season. That should drive over 400,000 new tourists who are in the focus on midweek business. The Raiders and the Stanley Cup champion Golden Knights have shown that Las Vegas is the go-to destination for away fans seeking a fun and entertaining getaway to see their favorite teams play, and we think the A's will be no different. The A Stadium, Allegiant, and T-Mobile represent 100,000 seats holding three professional sports teams that are directly adjacent to one or more of our properties with a possibility for multiple events on the same day. It's clear that Las Vegas has become the world's premier sports and entertainment destination. Turning to Macau, we posted another outstanding quarter of performance at adjusted property EBITDA surpassing the second quarter of 2019. Margins were in the high 20s, a great story that we feel confident can be sustained for the long term. Our outsized performance in Macau was a result of exceptional execution by the team at MGM China, who has done an incredible job positioning our properties to main share in the mid-teens, and the market has seen significant increase in hotel supply during the quarter. Just a few weeks ago, we reconfigured and enhanced Pit 7 at MGM Macau. and the Lotus Room at MGM Cotai and expect to complete the deployment optimization in Q3 of our tables. In Macau, we are focused on four key priority, activating our incremental 200 tables, making optimistic changes to our casino floor to maximize yield, taking care of our premium mass customers, and driving international customers to our property through our global branch office network. We're committed to helping shape the future of Macau as a global tourism destination through our concession commitments with investments beginning this year. The Income Macau Capital will cover a wide range of opportunities, including investments in art and culture, entertainment, and the expansion of our international customer base. I'd like to thank the Macau SR government for their continued support. Turning now to BetMGM, as the team announced last week, we are on track for second half 2023 profitability, and we're pleased with the meaningful progress we've made towards single account, single wallet. In fact, this week we expect to be live with this feature in 14 markets, which cover more than 50% of our database. Our partners announced acquisition of Angstrom is also a positive step towards improving BetMGM's product and refining our pricing tools, both of which we expect to drive customer satisfaction and ultimately margins. One of the meaningful benefits that MGM Resorts brings to BetMGM is the 37,000 rooms in Las Vegas that import new customers nightly. All of our resort guests are exposed to BetMGM marketing throughout their stay, and on average, BetMGM acquires 30,000 customers monthly who have originated or had a prior relationship with MGM Resorts, with half of those coming from Nevada. Excuse me. As we roll out single account, single wallet across the country, BetMGM will be able to truly activate our unparalleled footprint in Las Vegas as part of our omni-channel strategy. We expect acquisition and engagement metrics to grow as players get to enjoy a seamless experience using the BetMGM app across state borders. We're also focused on growing our international digital business through Leo Vegas. And last quarter announced an acquisition of Push Gaming, a gaming content studio. That acquisition is scheduled to close later this fall. We developed our digital presence internationally through improved content, technology, and distribution. Now, lastly, on the development front, In New York, we hope to receive a license in the first half of 2024. In Japan, Next Step is entering into an implementation agreement with the central government, which we also expect in the fall. In closing, our agreement with Marriott, ongoing investments into our operations, and a fantastic sports and entertainment backdrop in Las Vegas position us well to create operating leverage by growing our EBITDA against our fixed rent escalators. The stability of our domestic business will be supplemented by outsized earnings opportunities in Macau as that business ramps in the beginning of profitability in BetMGM. We also have longer tail opportunities with our developments in Japan and New York and with our international digital strategy with Leo Vegas. When you connect each of these opportunities for cash flow generation together, add to it the strength of our balance sheet and with more cash than debt than excluding MGM China, then consider the fact that we reduced our share count by approximately 30% Since the beginning of 2021, we believe the company is tremendously positioned for growth as we accelerate our free cash flow yield. With that, I'll turn this over to Jonathan for more detail on the quarter. Jonathan?