MGM Resorts International

Good afternoon and welcome to the MGM Resorts International fourth quarter and full year 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 Halkiard, Chief Financial Officer and Treasurer, Kenneth Fang, President and Executive Director of MGM China, and Andrew Chapman, Director of Investor Relations. Participants are in 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.

Good afternoon and welcome to the MGM Resorts International fourth quarter and full year 2023 earnings call. This call is being broadcast live on the internet at investors.mgmresorts.com. We've also furnished our press release in 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. That is 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 when talking about our performance. You can find the reconciliation to GAAP financial measures in our press release and in Mr. 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. MGM Resorts achieved outstanding results in 2023, delivering all-time high adjusted property EBITDA in Las Vegas and at MGM China. Notably, seven of our domestic properties set individual records for adjusted property EBITDA for the full year. These outstanding accomplishments underscore the resilience and the agility of our team in navigating a complex operating year. In fact, our employees earned record NPS scores from our customers throughout 2023. I want to thank all of our dedicated employees who consistently strive to deliver on world-class service to our guests. The strength and resiliency of Las Vegas market has been particularly impressive. Strategically, you've heard me talk a lot last year about the evolution of Las Vegas as the new sports and entertainment capital of the world. You saw that fact proven out again Sunday as the city proudly hosted Super Bowl 58 right in our own backyard. The game was another strong hotel and casino event for us with ADRs near 1,000 and posting three of the top five room revenue days ever recorded and near record event gaming volumes. The game weekend is typically a strong event for MGM Resorts, but having the game in town amplified those results dramatically. The game on Sunday followed our inaugural Formula One race in November, which was also an incredible success as the largest city event in our history. Additionally, we gleaned valuable insights from the event and specifically on how to better price and program all of our resorts and streamline the preparation work for future years. With both F1 and Super Bowl, our brand was on full display. Our proximity to Allegiant Stadium, the F1 track, and of course T-Mobile Arena afford us the opportunity to expand our reach during these citywide events. We also have officially launched our partnership with Marriott with impressive early results. Marriott Bonvoy customers can now seamlessly book rooms at select MGM properties in Las Vegas with 16 brands set to be introduced by the end of Q1. In Macau, we ended 2023 with an all-time record adjusted EBITDA for the quarter and the full year. A robust market share was comfortably in the mid-teens and continued its upward trend in January. The strategic addition of 200 table games, coupled with the agile operations of our team and the reinvestment into many amenities have collectively driven these exceptional results. In digital, BetMGM made it full-year 2023 targets in both net revenue and second-half profitability. They also made significant strides in the technology roadmap with the launching of a new app design and with single-account, single-wallet capabilities being available now in most states. Looking ahead, our outlook remains strong. We're encouraged by the metrics we've seen in our business, including room and rates on the books and in the year group attendance and future bookings, as well as a robust event calendar for the city. Our Las Vegas operations would represent within 70% of our U.S. brick and mortar adjusted property EBITDA in 2023. We'll benefit from a number of key initiatives in 24. For example, our transient segment will grow as a result of the Marriott Relationship which will bring a new customer base that will be acquired at lower acquisition costs, higher rates, and more spend on property. On the group side, the Mandalay Bay Convention Center refreshes nearly complete, and we're poised to benefit from an increased 100,000-plus group room nights on the Strip. With MGM's casino segment, we will drive growth from the return of Far East Baccarat play, which is still below 2019 levels. We will leverage our branch office network to drive customers to our resorts in Las Vegas, and expect to see further recovery of international inbound flights, which are still only 75% recovered from Asia. Later this week, we will host our annual Chinese New Year celebration at Bellagio and Aria, which is already seeing stronger gaming demand than last year. Our 2024 regional outlook anticipates demand to remain stable. That being said, we are committed to consistently improving our operational model, sustain margins, and foster a steady generation of free cash flow. Our regional portfolio has historically proven to be highly defensive thanks to the exceptional high-quality assets we operate, the diverse set of non-gaming amenities we offer, our strong market share positioning, and overall customer loyalty. Looking ahead in Macau, our exceptional results for 2023 have carried into the first 45 days of 2024 driven by successful events, including a Bruno Mars concert at the MGM Kothai, driving strong visitation to our properties. The mandate of our properties for Chinese New Year's, which is also going on now, is also very strong. As we look further into the year, the Macau government has set a target of attracting 33 million visitors in 2024, reflecting a 17% increase year over year. This is a testament to our team's continuous innovation in crafting compelling experiences for our predominantly premium mass clientele. Our focus is on the New Year in Macau remain on three priorities. implementing strategic adjustments to our casino floor and existing room offerings to optimize yield, prioritizing the needs of our mass and premium mass customers, and actively driving international tourism. Turning to BetMGM in 2024, we will soon be live in 29 markets with the launch of North Carolina next month. We had a noteworthy technology achievement in January with the approval and subsequent migration of the Entain platform in Nevada. This sets the stage for integration of single account, single wallet in Nevada later this spring, which is critical to our omni-channel thesis and will fully unlock one of the key differentiators for BetMGM by fully leveraging our Las Vegas properties. Within our international digital space in the UK, Leo Vegas, BetMGM's KPIs have exceeded our initial projections, demonstrating again the strength of MGM's brand. In fact, by leveraging the MGM Resorts balance sheet, we now offer the highest jackpot payouts amongst all competitors in the U.S., making our offers even that much more compelling. Turning to our development pipeline, in Osaka we successfully began liquefaction countermeasures in the fourth quarter, maintaining our trajectory to commence preparatory construction efforts in 2025 on time for 2030 opening. Additionally, in New York, the request for proposal process is currently underway. We anticipate submitting our full application to the government by the middle of this year with a decision expected shortly thereafter. Putting it all together, our company is in a great position to generate free cash flow through 2028. We'll deploy this free cash strategically into development projects such as Japan and New York. We'll reinvest in our existing portfolio through maintenance and growth CapEx, which we are specifically focused on enhancing and expanding our luxury-oriented offerings and the repurchase of shares at attractive levels an investment which we believe will still continue to generate strong returns. Jonathan, over to you.