MGM Resorts International (MGM) Q4 2015 Earnings Report, Transcript and Summary

Good morning and welcome to the MGM Resorts International Fourth Quarter and Full Year 2015 Earnings Conference Call. Joining the call from the company today are Jim Murren, Chairman and Chief Executive Officer; Dan D'Arrigo, Executive Vice President, Chief Financial Officer and Treasurer; Bill Hornbuckle, President; Corey Sanders, Chief Operating Officer; Grant Bowie, CEO and Executive Director of MGM China Holdings Limited. Participants are in a listen-only mode. After the company's remarks, there will be a question-and-answer session. Please note, this call is being recorded. I would now like to turn the conference over to Mr. Dan D'Arrigo. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Well, thank you, Keith. And good morning and welcome to MGM Resorts fourth quarter and full year 2015 earnings call. This call is being broadcast live on the Internet at www.mgmresorts.com and a replay of the call will be made available on our website. We furnished our press release this morning on a Form 8-K to the SEC. And on this call, we will make forward-looking statements under the Safe Harbor provisions of the federal securities laws. Actual results might differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements are contained in today's press release and in our periodic filings with the SEC, including our most recent Form 10-K and Form 10-Q. During the call, we will also discuss non-GAAP financial measures in talking about the company's performance. You can find a reconciliation of these measures to GAAP financial measures in our press release, which is available on our website. Finally, please note that this presentation is being recorded. And with that, I'll turn it over to Jim. James Joseph Murren - Chairman & Chief Executive Officer: Well, thank you, Dan, and good morning, everyone. We hope to have a robust call today and answer any questions that you have and clear if any confusion, because we had a great quarter here at MGM in the fourth quarter and for the year. As you saw, our cash flows were up 15% above consensus year-over-year, that's actually three straight quarters of double-digit EBITDA growth and that also by the way represents the best fourth quarter we have had since our record quarter back in 2007 and the best cash flow year that we've had since 2008. Our fourth quarter margins on the wholly-owneds were up really remarkable 330 basis points in the quarter. CityCenter continues to shine. It had record cash flow in the quarter and for the year and our regional resorts also produced excellent cash flows in the fourth quarter and each had their best fourth quarter cash flows on record. Over Macau, Grant will talk about our achievements there shortly, but I have to say that I'm proud of the team's ability to really work through the market, enhance our operations and maximize the efficiencies there and you can see that, that has led to continued margin improvement. And through those efforts, we believe MGM China is really well positioned when the markets improve, but as you've seen before, we hold up pretty darn well during turbulent times there. On the Profit Growth Plan we talked about last year, I'm very pleased to say that we are ahead of schedule. We're now six months into it. We've made many accomplishments already thus far. I'm very, very proud of the incredibly difficult but excellent work that has been done internally here and they pour their hearts and minds into this program. In the back half of 2015, we really evaluated and thoughtfully initiated many ideas across every department within MGM Resorts, casino, food and beverage, hotel, and that means all of our domestic resorts. And as we've said before, we're going to be very transparent to you on our progress on this important initiative. So, I can say with pride that our PGP resulted in over $35 million of realized benefit to our property cash flows in the fourth quarter alone. That means, we've achieved over a $65 million in that short period of 2015 as a whole. We're very pleased to report that we're ahead of this plan, because as you recall, we previously guided to achieving about 10% or 15% of the $300 million of total cash flow by last year's yearend. We're very committed to this, and in fact, engaged and inspired by it. And we believe that our goal is very achievable, which is to realize about $200 million of the $300 million of cash flow by yearend this year, and to get the full $300 million, hitting the bottom-line in 2017. This, we believe, will help us achieve our 30% target for property cash flow margins by 2017. And as I said, we're well on our way to achieving that, and we're very confident in our ability to do it. Here at home in Las Vegas, we continue to see strength in the market, which of course MGM is both a contributor to that strength, and the single largest beneficiary. The Las Vegas Visitors and Convention Authority reported new record, as you know in visitation of over 42 million visitors that beat last year's record by 3%. By the way, that is an additional 6 million annual visitors on to the market since 2009. We expect the visitation to continue to grow this year in the marketplace and the hotel KPIs are all up. McCarran saw its fifth year of consecutive year-over-year passenger increases and we've seen seat capacity continues to rise this year and in fact, it's going to be up about 6% plus in the first quarter alone. With all the success Las Vegas has only recently enjoyed, it's very important to note that we are still below our prior peak levels as a city. The city is 9% below its prior ADR. It's 12% below its prior peak in RevPAR. MGM's wholly-owned Strip resorts are also below its peak levels by 7% and 10% in ADR and RevPAR, respectively. We clearly have more room to grow. In a country where many cities have not only met, but have significantly exceeded their prior peak RevPARs, it's Las Vegas' turn to take center stage. And of course, MGM is the best positioned, most leveraged company, in order to participate in that. And why will that happen? It's because we have literally no new supply growth in the near-term, unlike many major markets here in the U.S., and that of course helps the home team and MGM is the home team. We have solidified our position here in Las Vegas as the destination choice for large scale meetings and conventions. You know that citywide convention attendance grew dramatically last year up 13%, and I can tell you fortunately, we continue to see great strength in 2016 and 2017 and 2018. I think Dan will talk to that specifically, but suffice to say that when we completed our expansion to the Mandalay Convention Center, which really fully was only done this year. We had hoped for significant increase in our convention bookings for Mandalay. We're well ahead of what we had hoped for in terms of bookings into that very important convention center. That was preemptive on our part. We saw that the convention business was coming back to Las Vegas. We wanted to keep ahead of demand and I can tell you that we are very confident in our ability to fill and in fact outgrow that space over the next couple of years, which is why last year, late last year in December, we announced our plans to expand the ARIA's convention center. Demand there is remarkable, vastly exceeding the capacity that we have at ARIA. And because ARIA has been so well received and is literally the most sought-after conference facility in Las Vegas, we're adding 200,000 square feet to it and it will be very technologically advanced, it will be highly flexible, it will be the state-of-the-art in this marketplace, and it will be completed next year in early 2018 (09:44). I think that when you see this, you will know that ARIA with over 500,000 square feet of convention space, when it opens in 2018, I should say early 2018, we believe that you'll find a significant increase in ARIA's convention business as well. And of course, ARIA had a record in terms of cash flows in the quarter and the year. From a standpoint of what do we see in the market, people ask us this quite a bit, and so, we need to give you a couple of data points before we get into your questions. It's about creating experience this year, creating reasons to come to Las Vegas again and again. We've been at the forefront of that as well, of course. And before we report our next quarter earnings, many of you will be out here, because on April 4, we're going to debut the park that we've been building, which is spectacular, and we're going to be debuting the new arena. The new arena, with AEG, I think is the most highly anticipated project that we've seen in Las Vegas in over a decade. The response here has been incredibly overwhelming, not only from the public, but from the performers that are literally fighting one another to get gigs, dates into the new arena. Looking at a list of concerts that we are going to have this year, ranging from The Killers, to Garth Brooks, to George Strait, Guns N' Roses – that's for Corey, Janet Jackson – that's for Dan. We got a lot of sports events coming, because we're doing a bunch of fights, UFC contests, a lot more concerts, college basketball, et cetera, et cetera. And in fact, if you're wondering whether we can fill these facilities, you look to no sooner than the very first weekend, when we open up the new arena, when on that weekend, we'll have major events at both the new T-Mobile Arena, the MGM Grand Garden, and the Mandalay Events Center. And we're going to have over 50,000 guests, fully occupying those events, those arenas in one weekend alone. We think it's really the great time for us to leverage our strengths here in Las Vegas. We've been waiting for the market to be as robust as it is right now. We've been a bit jealous about the great strengths in cities like Orlando and Miami, Miami and Chicago. Las Vegas is pulling ahead now of many of those markets in terms of its growth, and we think that our ability as a leader in this market to meet and exceed the macro trends here, because of our capital investments is very, very high. We're excited about this Profit Growth Plan, which will enhance margins, yes, but also add to the overall profitability of our company as we continue to grow our portfolio outside of Las Vegas. And we are extremely pleased with the progress that we have made through maximizing our shareholder values, through the creation of MGM Growth Properties. On that front, we've made a lot of progress since we chatted with you last. We announced our all star team from the investment banking world, James Stewart and Andy Chien, they came in from Greenhill, they're the CEO and CFO, Wall Street veterans, deal junkies, really smart folks that are going to run MGM Growth Properties for us. James and Andy are perfect candidates to run this enterprise, given their backgrounds, their enthusiasm and we're proud to say that they and their families are moving from California, the tax state of America to Nevada, the state of business. We also announced our independent board members last week, that's important as well. We're very deliberate in finding folks that will be independent, be additive and be very knowledgeable in the field of real estate, which is why we brought in Tom Roberts, because of his governance background, Mike Rietbrock, who many of you know on this call, who consistently outshined me when I was an analyst on Wall Street and we've brought in an internal candidate that is tremendously knowledgeable in the REIT space, in the hotel space. Elisa is our Chief Analytics Officer. She came from Host Marriott and where she spent many years there literally, driving analytics and strategy for that company. They are going to be very instrumental in guiding the path of this soon-to-be birthed New York Stock Exchange public company. This is an exciting time for us. We are prepared to launch this company soon. We're not going to rush into anything, nor do we have to, but we certainly are getting ready and we believe it's going to be exciting for our shareholders at MGM Resorts, when they see the opportunities. Really on that last point, I'd have to say that though the transaction merits should be obvious, we look at this in terms of MGP, as truly an opportunity to grow that enterprise through acquisition, through the opportunities to acquire assets, either from MGM Resorts or from third-parties. We are noting with very great pleasure that trading multiples in the triple-net lease space have held up well. And I think that confirms our strategic thought process, when we went down this path last year. And we'll have more to talk about that in the coming months, but suffice to say, we're well on track. And with that, I'll turn it over to Dan. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Thanks, Jim. Looking at our fourth quarter and full year results, our fourth quarter was led by continued strength across our portfolio of domestic resorts. In Las Vegas, we achieved 2% and 14% year-over-year growth in fourth quarter net revenues and EBITDA respectively, primarily due to the outperformance of our non-luxury Strip resorts in the quarter. Fourth quarter wholly-owned non-luxury Strip cash flows were up 47% year-over-year. Our fourth quarter wholly-owned Strip margins increased 286 basis points as a result of strong hotel results as well as the positive impact from our Profit Growth Plan. These quarterly results are quite impressive, considering our table game revenue was negatively impacted by a lower hold percentage year-over-year. This impacted our wholly-owned Strip EBITDA by approximately $20 million in the fourth quarter versus last year, with most of that being felt at the Mirage, which was most impacted, which was roughly $14 million of the $20 million alone. Our non-gaming offerings remain a key driver of growth, particularly in our hotel business, as we continue to see strong demand from both convention and leisure segments. Our wholly-owned Strip properties achieved 12% RevPAR growth in the fourth quarter, exceeding our previous guidance. This was driven by an 18% increase in RevPAR, at our non-luxury resorts, and a 9% increase at our luxury resorts. Our convention mix as a percentage of total occupied room nights was an all-time fourth quarter best for our company. And for the full year, we were able to beat last year's record of slightly over 17%, as we achieved a record of about 18.5% in our convention room night mix. As you recall, we started the year with a goal to meet or exceed our previous 17% record. And throughout the year, our sales and yield teams have done an outstanding job of maximizing our convention space to reach this all-time record high in convention occupied room nights. And I think they're just getting started. Looking ahead, the demand for our resort portfolio continues to be strong. Our contracted forward bookings for 2016 are already approaching 100% of our goal. And we continue to be encouraged by the quality of the convention customers and the growing lead volumes. With this backdrop, we believe we're well positioned to beat last year's record high mix, while continuing to grow rate. We also anticipate wholly-owned Strip RevPAR growth of 6% in the first quarter. Our regional properties, as Jim mentioned, had another great quarter. Net revenue and EBITDA grew by 6% and 23% respectively, led by increased table game volume and hold with a backdrop of the improving domestic customer, property margins grew by over 400 basis points. Moving over to CityCenter, all four segments of CityCenter resort operations showed a year-over-year growth. ARIA led the way with the increase in EBITDA of 43% over the prior year, driven by higher table game volumes as well as hold and a 7% increase in RevPAR. Vdara cash flows were up 23% for the quarter, driven by a 13% increase in RevPAR. And as you saw in this morning's release, with the anticipated conversion of the theatre and the additional meeting space at ARIA, that resulted in about $20 million acceleration of deprecation in the fourth quarter. That $20 million will continue each month at CityCenter for the first four months of the year, until we take the theatre out of service. So, that will impact what MGM Resorts will pick up, in terms of that depreciation on your EPS modeling going forward of about $10 million a month for the first four months of this year. Looking at corporate expense in the quarter, it was approximately $15 million higher than we had previously guided, primarily due to costs incurred to accelerate some of the initiatives related to our Profit Growth Plan, as well as some expenses related to the relocation of certain entertainment shows. As we incur some addition costs on the corporate line item over the next couple of quarters, related to PGP and our MGM Growth Properties transaction, we expect our corporate expense to be roughly $70 million in the first quarter. Switching over to give you some guidance with respect to CapEx both in the quarter and for 2016, during the fourth quarter, we invested approximately $177 million in CapEx related to our existing domestic operations, bringing the full year total to roughly $490 million. On the development front, we invested $113 million at National Harbor and a couple of million – $2 million at MGM Springfield during the quarter, bringing full year CapEx on these developments to approximately $360 million for National Harbor and $35 million for MGM Springfield. During the fourth quarter, MGM China spent approximately $174 million, of which $171 million was related to MGM Cotai. That brings the full year spend at MGM Cotai to approximately $543 million for 2015. So, to help with your modeling for 2016, we expect our CapEx to be as follows: our wholly-owned domestic resorts will be approximately $440 million for maintenance and growth at our existing properties, as well as some corporate and also includes the expenditures to complete The Park, The Monte Carlo theater and the new Excalibur parking garage, to name a few. Our development projects in National Harbor, as we aim to bring that property online by the end of this year, we'll have roughly $670 million of spending there; in Springfield, as we begin to ramp up those construction efforts, will be approximately $125 million. Not to be outdone, Grant is going to spend some money as well, and he is looking at $1.6 billion to continue the construction efforts for MGM Cotai, and about $75 million of that number is related to MGM Macau. With that, I'll turn it over to Grant for his comments. Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: Thank you, Dan. Good evening, good morning. These calls come around pretty quickly. So, as we look at the past quarter, MGM China has consistently operated with agility and delivered through challenging market conditions and certainly, this quarter has been no exception. In the fourth quarter, MGM China recorded net revenue of $499 million, and an adjusted EBITDA of $140 million before license fees. This is a 2% increase sequentially quarter-to-quarter. We're able to grow our margins by a full 2 percentage points from the prior quarter, driven by cost discipline, and increased business mix from our main floor operation. In fact, our main floor business accounted for (24:14) in the fourth quarter, a record. We are seeing some stabilization in the market led by the mass segment and Macau mass – GGI has shown improvement for two consecutive quarters. Meanwhile, MGM has focused on continuing our growth and yielding our database and its efforts have driven an increase in the main floor player accounts for the quarter. The MGM China board today also announced that we are recommending a final dividend of $46 million and this is subject to shareholders' approval at the annual general meeting. As mentioned in our press release, for MGM Cotai, we've made a strategic decision to move the opening of the property. And this is based on current market conditions, the timing of other property openings. We now expect to celebrate the opening in Macau by the end of the first quarter of 2017 and importantly, there is no change in the current budget of $3 billion. We are working closely with our contracted China site and are confident we'll be able to deliver this quality property. This extra time is also important as it will allow us to further fine tune the offerings in what is a very rapidly evolving marketplace and ensure that we're able to capture all the efficiencies that are possible, while at the same time, presenting a spectacular product, offering what we all know of the unique MGM experiences to this market. I'd also like to conclude by saying that, as a Macau-based business, we recognize that our long-term success depends on our commitment to the whole community. Therefore, we have continued our focus on training and developing the local team, while our volunteer team in 2015 contributed 5,800 hours of community service and this is a record for our company. And while we've always been committed to buying locally, with more than 80% of our purchases from local businesses, in 2015, we took this to another level by taking the initiative to establish our MGM Small and Medium sized Enterprises committee, which is made up of local business owners and professional, to help us develop new and innovative ways to engage and work with the local small and medium-sized enterprises. We are very proud to be a Macau-China business and we look forward to further contributing to the development of Macau. And with that, I'd like to hand back to Jim. Thank you. James Joseph Murren - Chairman & Chief Executive Officer: Well, thank you, Grant. I'd just say a couple of brief things and I want to get to your questions. We had obviously a busy year last year. The converted CityCenter started paying its first dividends. We announced a PGP plan, and as I said, it's tracking really well. And we of course announced a very transformational transaction when we announced MGP. Those actions last year, we believe set MGM up for another great year in 2016; got a lot to look forward to. We're off to a very good start in the first quarter. In the second quarter, we opened up the arena, The Park. Later that year, we're opening up a theatre at Monte Carlo. We have the opening at the end of the year of MGM National Harbor, which will be stunning. And moving into next year, of course, we have Grant's project in Macau, followed by MGM Springfield in 2018. We are well ahead of our plans as it relates to Profit Growth Plan, and we're dedicated to this being a way-of-life at MGM, improving margins, increasing efficiencies, driving revenue and cash flows, not only restoring the profitability that we had in 2007, but exceeding it because of the growth of our company, the scale and the way we operate. We're excited about MGM Growth Properties. We're going to have a lot more to talk about in the coming months. And with that, I'd like to turn it over to the operator, so we can get to your questions.

Yes, thank you. We will now begin the question-and-answer session. And the first question comes from Harry Curtis with Nomura.

Hi, guys. And good morning, Jim. Normally, it's your custom to give some sense of what to look for as far as pricing both in the near-term and then, for the year. Can you give a sense of what you're seeing so far on the RevPAR front in Vegas? James Joseph Murren - Chairman & Chief Executive Officer: Well, maybe I'll start that since you called me out Harry, and then I'll turn to my left and my right. Dan gave a concept of RevPAR I think in the first quarter, didn't you, Dan, up 6%. That would be better than the RevPAR growth we had in the first quarter of the prior year, and it's because we were off to a very good start. CES was outstanding for us. We did well as a market. MGM I think picked up some share there. It set the tone for the first quarter on the convention side. We had tremendous bookings in 2015, in fact, this is a fun fact, I think. We booked an all-time record of a $0.5 billion of business last year for this year, next year, and that is pretty remarkable. 98% of this year is already on the books, as it relates to our convention business. So, booking in the year for the year will mean that we're going to have to be creative and move people around, and if anything that will add to RevPARs in that segment. We're seeing some good strength in the second half. We typically don't give guidance outside of the current quarter, but just because you asked, we're seeing good growth on the convention side in the second half of this year. Rooms are up significantly, ADR is projected to be up, revenue overall up. And a lot of that are corporates and over half of it for sure. The financials, tech, those are leading sectors, but pharma and the biomed industry we're seeing a lot of activity there as well. So, from the standpoint of what we can discuss, typically, it's mostly on the convention side, as I said we're off to a good start, we beat what we thought we could do last year on the convention side both in terms of revenue and mix. We're off to a good start here in 2016, and because of the remarkable progress of bookings last year, we feel more confident than we typically do, given some thought in terms of the back half of the year. Anyone want to add to that? Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: What I would add, Harry, we saw the pricing strength especially during the big conferences like CES, we had a record day for the entire company. On the first quarter, the big challenge there is Easter comes at the end of March, which is usually a slower period of time especially on the convention side. So, to show our mid-single-digit RevPAR growth for the first quarter, I think, is pretty strong with – especially when you look at our last year's RevPAR growth.

Corey, just a quick follow-up. When you consider the business that's been done so far. Can you give us a sense of attendance, cancellations compared to history? Is there anything to indicate any softness?

The – just looking at the fourth quarter, our attrition was 9%, which is usually lower than normal. Depending on what's convention, I would say the majority of them have showed increased attendance, there are a few that are flat, but in general if CES for example is an example, there is a nice little increase there.

So, Corey, just attrition, I didn't understand the answer on that part. Was attrition 9%, is that good or bad?

That's great. Our usual trend is about 10%, we've been running about 12%. So, 9% is excellent for us.

Okay. Okay. Thanks, guys. James Joseph Murren - Chairman & Chief Executive Officer: Thanks, Harry.

Thank you. And the next question comes from Carlo Santarelli with Deutsche Bank.

Hey, thanks guys. Dan, you provided a little bit of color on the table situation in the 4Q, in terms of the $20 million EBITDA impact. In the press release, you guys talked a little bit about slot revenue decreasing 3% in 4Q. The market I believe just from a GGR perspective was up like 6.5% or 7% in the 4Q. So, I'm wondering, if maybe you could reconcile some of the commentary in the press release regarding the accrual for slot points and how that might have made things a little bit distorted. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Sure, Carlo. I'll take that. The – our actual slot win in the quarter was up about 1%. And when you look at the year-over-year comparison on the revenue line item, we're actually down because of that prior year accrual adjustment to our slot revenue numbers. So, our win was actually up marginally, but for the revenue side of the equation, from an accounting standpoint, the tough comparison was really in the contra revenue account for slots.

And what I would add, Carlo, is a few things, one, we had fewer events in the Grand Garden from the year before and at Mandalay Bay. Two, I think with our bigger convention mix, we were – the year before, we probably pump that area a lot, especially the lower end casino side, which is probably not a great margin business. So, we were – we thought about not doing that in the fourth quarter this year. And then finally, if you look at some of our competitors' numbers, they obviously pumped up some of their rooms, which they didn't – haven't had in the past, which would improve the market's growth in the – in Las Vegas. James Joseph Murren - Chairman & Chief Executive Officer: So, right. I think just to summarize that last point. So, I think what we're saying is that we had more slot promo activity in the fourth quarter of 2014. We did that to fill rooms in the fourth quarter of 2014 with much more convention business in the fourth quarter of 2015, which meant we pulled back on some of our slot marketing programs. And as a result, our slot margins and our profits were actually higher in the quarter.

Great. Thanks, everyone. And then, Jim, if I could just ask a follow-up bigger picture, as you think about the company structure today, obviously several JVs and that will expand a little bit. Have you thought just bigger picture more strategically about anything that you might want to do going forward with some of the joint ventures, obviously some of which are levered, lower than the overall company that maybe it'll get full credit for et cetera. Have you thought anything along the lines of maybe the best way to address that as we're looking ahead? James Joseph Murren - Chairman & Chief Executive Officer: Well, we have – I think we view this as a marathon and we have a few legs, maybe it's a decathlon, because we have a few legs of this race. Number one, we need to be assured that we're making the right decision here with creating this triple-net lease REIT and we believe we are making the right decision. It's required a lot of our corporate finance, legal accounting work. We've made a lot of regulatory progress on this, and we feel like that is a priority to properly birth this new company, this UPREIT this year and make sure it's on a strong footing. And by the way, you'd have a great fourth quarter if you were to pull out MGP's properties in a great year. Its RevPARs, in fact, better than rest of the company. Its RevPARs in the fourth quarter up 12%, cash flow was up 17% year-over-year in the fourth quarter. For the year, MGP properties were up 7% in RevPAR, up 14% in cash flow. So, first order of business I think is to do that. The second, and this is on a parallel path, is to look at our portfolio to determine where we can provide value to the shareholders through a corporate finance transaction. And obviously Crystals would be front and center on that given the very low cap rates, and the high attractiveness of that asset. And suffice to say there'll be more to discuss on that, sooner rather than later. The third point to answer your question would be do our joint ventures change their capital structure, do they dividend out more money? Certainly possible, given the low leverage in a couple of our joint ventures. Do they change their capital structure, because we get little or no credit for the actual ownership of many of those joint ventures, because the way you all value companies from an enterprise value to EBITDA perspective. Certainly worth discussing, do they become opportunities for the new company, MGP going forward? Obviously, part of the discussion, and how do we continue to fulfill the promises that we've made in terms of deliberate deleveraging of MGM Resorts International, and deliberate growth in our cash flows. And I have to say that, we have a lot of tools at our disposal to do that. But we're very focused here, we have a – not a large corporate finance team, but a mighty one and we have a clear vision of what we should do over the next year or two years. And if we execute on our internal vision, we think everyone is going to be well rewarded including the shareholder employees like the people in this room that are working at the company.

That's great. Thank you very much. James Joseph Murren - Chairman & Chief Executive Officer: Thanks, Carlo.

Thank you. And the next question comes from Joe Greff with JPMorgan.

I have two questions. One on PGP, and then, one on MGP, and I'm tired of initials here. On PGP, the $35 million of EBITDA contribution in the 4Q is certainly more than we – I think most were expecting. And I ask this question maybe in the context of maybe sort of expectations getting or not getting ahead of expectations. But, would you look at the quarterly contribution throughout 2016, to the quarterly contribution that you saw in the 4Q? How do we think about that or how are you thinking about that, Jim? James Joseph Murren - Chairman & Chief Executive Officer: Okay. You want to have – we're going to ask couple of people answer that, because maybe, Dan, you can start on the quarterly, just to get a sense of pace on that. But we have a special guest star in Chris Nordling, who is running that program for us, and he could give you a little more color on why we're confident about our ability to perform there. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: So, Joe, you're right. And as Jim mentioned, we are ahead of where we thought we would initially be. We got out of the gate pretty quickly under Chris' leadership and the rest of the project management team's leadership. We were able to achieve in certain areas faster and quicker than we originally thought. Probably about half of the $35 million impact was from revenue ideas and initiatives, and the remainder were on the cost side of the equation. So, we think those are some of the quicker, easier-to-market initiatives that we're benefiting right now. I think what you'll see is that, that creates the baseline for us on a quarterly basis to kind of grow as some of the larger, more complicated initiatives that we've been working on, will start to roll out either late in 2015 or start to roll out here in 2016 and gain more traction throughout the upcoming months here in 2016. And so, I think we're ahead of pace from that standpoint. I think some of the more complicated larger initiatives will start impacting the 2015 first couple quarters here. Christopher W. Nordling - CFO, CAO & Executive Vice President, CityCenter Holdings LLC: And so, Joe, this is Chris Nordling. You might remember when we first talked about Profit Growth Plan, it's 400 ideas or 500 ideas as a group company-wide. As we got it organized, and set up our PMO office and our change management office, and got control of exactly what we're doing. The top 50 ideas represent a little over $300 million to $350 million. We actually implemented about two-thirds of those ideas in implementation stage by year end, which was a little bit ahead of our pace. And as Dan mentioned, those last 18 ideas or 19 ideas are coming in this 2016, are the most complicated ones. Some of them requiring technology changes to fully implement them and get those. But the progress to-date has been overwhelming for our teams as they push through that. The commitment at the operating company level between our operating presidents and our CFOs and our general staff top to bottom is unbelievably excited about pushing through. And you'll see, as we move through 2016, you'll see PGP kind of winning away (43:20) and continuous improvement becomes the talk of the day, because this is embedded in the core fabric of the business going forward, and that's really what we're after long-term. And Joe, the other thing I would add, those PGP amounts we're talking about are specific initiatives that we can identify, but the mindset in the operations is definitely there. For example, in the fourth quarter, we're down a 1,000 FTs, and the PGP initiatives have touched very little FTs. So, it's flowing through the whole operation.

Okay. And then, my question on MGP. Jim, you had mentioned, it's a vehicle to grow the acquisitions, whether it's MGM or others. That comment intrigued me or others part comment intrigued me. I know, it's early days, but is there a pipeline related to other acquisitions or non-MGM related assets that you guys might be looking at? James Joseph Murren - Chairman & Chief Executive Officer: Well, I'm getting like a stare down from my lawyer across the table here. So, if I get muzzled, it's because of somebody else, but I'll give it a shot. Look, we could have dusted somebody off the shelf and inserted them in as a CEO of MGP, I could have done that, could have found someone we like that we know well, that have had a fine career in gaming, and given him a job and found some CFO that looking for work or something. These – those two hires should be very illustrative, very illuminating to you and to everybody. We were deliberate in our search. We looked at people in the triple-net lease space, we looked to people in the hotel REIT space, we looked at hotel operator space, we looked at former gaming people and the resumes of James and Andy speak for themselves in terms of their experience, transactional experience in gaming, lodging, hospitality, entertainment. They're in the prime in their careers and they're not sitting around waiting for the phone to ring. The Board that we put together, very deliberate in terms of a premier corporate governance person, a highly regarded Wall Street person, a highly experienced and regarded REIT executives now working for us. MGP is not going to be in my opinion in after thought some captive subsidiary of MGM Resorts. It will be, its own company with its own governance, with its own flight path. And we hope to see it grow rapidly because, no one benefits more from MGP's success than MGM Resorts. No one benefits more from its ability to grow internally, as it did with the properties in the fourth quarter and for the year. Its ability to execute transactions, to continue to grow, its ability to be a counterparty, potentially to transactions that we enter into with them, because of the (46:59) that MGP has on our projects at National Harbor and in Springfield, and its ability to grow outside of anything that MGM Resorts has cooked up or has got in mind. The gaming landscape is very diverse, and there are many assets out there, that could be very appealing. And I can't speak for that company, it's only not now in this state. But I think it would be pretty obvious to say that there will be lots of opportunities for that enterprise, whether or not MGM Resorts manages anything that ends up making an investment in. So, we're very, very deliberate in this, and very excited about its potential for the MGM Resorts shareholders, because of its ability to diversify and its ability to really – I think ones and for all answer a question of what are our assets worth at MGM Resorts. What are the physical assets as well as our operating brand assets worth and I think the market will determine this, once there are two separate companies.

Thanks, guys. I appreciate it. James Joseph Murren - Chairman & Chief Executive Officer: Thanks, Joe.

Thank you. And the next question comes from Thomas Allen with Morgan Stanley. Thomas G. Allen - Morgan Stanley & Co. LLC: Hey. Good morning. Can you give any color on year-to-date gaming trends both in Macau and in Vegas? Obviously, we had Chinese New Year and we've had a couple of months behind us. So, any color would be helpful. Thank you. James Joseph Murren - Chairman & Chief Executive Officer: Well, I'll take Las Vegas, while Grant has another super quality. What time is there, Grant? Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: Just coming up 1 AM. James Joseph Murren - Chairman & Chief Executive Officer: Oh, lovely. The things you do for our company, Grant, thank you again. The first quarter as I mentioned, not only off to a good start from a convention perspective, but we had the Super Bowl and I could say that we had a record sports book volume, during that period of time and we're in the midst of Chinese New Year now. So, it's really premature to give you an update except to say that we got a lot of people still in town. I'm not sure about the volumes, it might be down a bit, volume wise, but as I said, lots of people in town. Going into the year, we have a bunch of activities that are gaming related, a good fight coming up, when is the Canelo fight? Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: May. James Joseph Murren - Chairman & Chief Executive Officer: In May. We got a Pacquiao fight, he made some news, didn't he? We got a Pacquiao fight in April. We've got all the arena events. We have a young lady singing, I've never heard of. What's her name? Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Ellie Goulding. James Joseph Murren - Chairman & Chief Executive Officer: What?

Ellie Goulding. James Joseph Murren - Chairman & Chief Executive Officer: Okay. But I hear she's great. So we have a lot of casino events. Yeah. I think it's – the colleagues here who have daughters made a point on that. So I would say that given the activity that we've seen at least early days really super early days in Las Vegas as it relates to Super Bowl which is a really good indicator of national play being – having that kind of national play was very rewarding, seeing what's going on in terms of our activities, I'd have to say that that's a positive. We know that our Chinese business has been down so we anticipated sluggish volumes during Chinese New Year's, but as I say we win and lose every day in that, so it's really early days on that part, but I have to say we're pretty pleased about how the year is beginning. So, I'll turn it over to Grant. Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: So, thanks, Jim. So, let's pick up probably from the start of the year, so I will pickup in January. We started to see some positive signs. I don't want to get carried away with it, but if you take in in even say our premium mass business, we were looking at like a 12% quarter-on-quarter growth. Historically what happens in the early part of Chinese New Year is quiet and it was particularly quiet but then we did see a big surge where we were seeing traffic comps that were 30% to 40% above than regular weekends which is a good sign because I don't think it's possible anymore just a method against previous Chinese New Year period. This Chinese New Year period even in Macau has actually seemed to extend a little longer for us. We probably got an extra three or four days and strangely enough some of that appears to be because businesses in China are actually took longer holidays, and people were travelling. So, particularly in the mass area, not just Chinese New Year, but January and for the prior two quarters, we are quietly optimistic that we can see some performance improvements. I don't want to get carried away and suggest that this is going to be the start of anything huge, but it is important to us. And when you put it in the context with the quarter that we had where we did a 28% margin, and as we've seen business moving from the VIP into towards the mass business that's really very solid. So, the critical point to remember is when you see the mass grow, it actually has a significant positive impact in the overall performance of the businesses, and so that's where I think you're going to see the trends moving forward, that's where we've always focused. So, not wanting to get carried away, but quietly optimistic that we can see some performance improvements moving forward. Starting to see some signs of some growth, getting some incremental traffic, getting some new and positive indications in terms of new player signups, they're all good signs to suggest that we've got some opportunities moving forward. And that's really important, because we understand, we've got to grow significantly through Cotai. Is that helpful? Is that sort of enough color for you, or is there anything I also can help you with, Thomas? Thomas G. Allen - Morgan Stanley & Co. LLC: That's great color. As a quick follow-up, do you expect MGM Cotai to open before or after Parisian? Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: I'm no longer in the position to understand how anybody opens. So, I think the critical point for us is, we've made a decision when we think is the best time for us to open. So we're actually just focused on ourselves, and that's why we made this decision now, because it's really important that we wanted to be in control of this decision, rather than trying to dance around other people's decision. So that's where we're at. I would suspect that they would open before us from what we're being told, but it doesn't really affect us because we're focused on the plan that we've set for ourselves. Thomas G. Allen - Morgan Stanley & Co. LLC: Very helpful. Thanks Grant. Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: Thank you.

Thank you. And the next question comes from Felicia Hendrix of Barclays.

Hi, there. Just wondering, and I'll throw this out for all or any of you. When we think about your performance for next year, just how should we think about the relative performance at the core properties versus the luxury properties? Do you expect both segments to contribute equally? We've seen some really strong nice recovery in the core kind of end of your portfolio. So just wondering how you're thinking about that for next year or this year I mean? Sorry. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: You want me to take that or you'd jump in? James Joseph Murren - Chairman & Chief Executive Officer: We expect that to continue. I think it's important to – I have to take a step back because its stocks down, which we don't understand. The breathless headlines of losses in Macau are absurd. We wrote up MGM China by $3.5 billion in 2011, and we reversed some of that this year. And the other part of the mix was simply purely tax. On every other basis, we obviously exceeded anyone's expectations and the reason why I bring that up, is when you look at what even happened in the fourth quarter, it should be illustrative of what's happening. In the fourth quarter, we had a great fourth quarter here in Las Vegas. And even properties that didn't do as well as they did a year ago in many cases were well ahead of their budget. I mean I'm looking at the MGM Grand, crushed its budget in the fourth quarter by over $20 million. What's happening here in the first quarter is nothing but spectacular from a standpoint of looking forward into 2016. Our RevPARs are growing. I don't remember a time when we talked about the second half of the year here in February, but because we see such strong convention business, which accrues to the benefit of all 42,000 rooms, but particularly to the core properties, as evidenced in the past, I would have to say that the core properties are off to a great start and also have a lot of runway here for 2016 on the revenue side. On the profit side, to have over 300 basis point improvement in margins, company-wide, think about what the margin potential is for the core properties and the luxuries, but really the cores which were devastated by the recession. And look at their peak to trough margins and how we are very determined to bring those back to peak margins and with PGP, I think we'll get there. As it relates to the luxury properties, ARIA had a record, Bellagio had a monster quarter, and we're off to a good start from the standpoint of the activities that we see in the year. And so, setting ourselves up for 2016 is as exciting for us as in any year that I can recall. So, I just wanted to make that – put that in context is that we have now put ourselves in the catbird seat as a market, relative to other markets in the United States because of the literally no supply and surging demand for Las Vegas as a product. We, at MGM, will beat the market as we have in the past; because of the capital investments that we are making, we'll beat the market I believe on the revenue side and certainly, we'll be able to drive that revenue down to higher margins and higher profitability from a cash flow side. And I think no property – I could tell you in the budget that was just approved by the board, no properties looking to be down year-over-year. Many of them are looking to be up substantially, and it's because of the capital investments that we've made and because of what we see on the books already.

Keith, we'll take the final question.

Yes. Thank you. And that comes from Robin Farley with UBS.

Great. Thank you. A couple of things just to clarify, and there were some overlapping calls. So I apologize if you said this in the first few minutes, but you'd previously talked about the MGM Growth Properties IPO being a Q1 event, is it still something that we can expect in Q1? James Joseph Murren - Chairman & Chief Executive Officer: We didn't give a timetable. We said we're on track. So, which means that from the major points that we needed to get across – to get accomplished, I should say, one would be regulatory, made great progress there, not that there was as much to do for us as other companies. Second was with the SEC, tremendous progress there. The third was to work with our underwriters and our bankers to setup the capital structure and I think Dan and Jim Freeman and the team have done a really great job with very strong demand from our commercial bank partners. So we feel very, very good about the capital structure. And now it's a matter of working – finishing up the S-11, making that a public document, establishing a roadshow schedule, establishing teach-ins, none of which we can discuss with you today in terms of the timing, but nothing we said last November I guess when we talked about this has changed in terms of our timetable.

Okay. That's great. Thanks. And a follow-up question about the Cotai opening being moved to the end of Q1, I know you said that or Grant said that, you weren't as worried about kind of when others are opening. Does that mean, if another property also got pushed to the very end of 2016, would you be comfortable opening within the same month or two as another property? Or would you think potentially, if there are delays in some of the other projects that are scheduled to open in 2016? Would it make sense to even push back past Q1 of 2017? James Joseph Murren - Chairman & Chief Executive Officer: Well, you want to take that? I'll maybe start, Grant, and then, you can jump in. We took this decision internally as just a smart financial decision. We didn't have to push this off a few months. We did so because we feel like it's in the best interest of the MGM China and the MGM Resort shareholders. It certainly benefits 2016 from a standpoint of less pre-opening expense in the back half of the year. It certainly allows us to reduce the amount of over time that we would have to incur, to rush to a deadline. And it certainly allows us to make sure that we have the best possible product when we open. There's no way of us knowing when the other guys are going to open and there's no way we're going to pace an opening based on somebody else's opening. That would set false precision, because we don't have their internal dialogue or timetable, they're not going to share it with us and if they did, it might not be correct because people have certainly missed published deadlines multiple times in the past. I think what's important from our standpoint is that we keep to our budget, which I'm proud that we're doing, that we produced a great product, that we open it when we believe it's ready. We open it from a standpoint of making sure that we thought about where the market is and what's happening and we don't open too soon because that would incur an awful lot of needless costs. And so, I think that brings you to our timetable and really the thought process to why it is the Board of MGM China felt that this was in the best interest of the shareholders.

Great. That's helpful. Thank you. Just my last quick one is, I heard the comments on Q1 RevPAR and that it's maybe not as big of an increase just because of the holiday shift which makes sense. Did you kind of give color on what full-year RevPAR, I guess we can assume it would be higher than 6%, but I don't know if you've said a number? James Joseph Murren - Chairman & Chief Executive Officer: You want to tackle that, Corey?

Sure. Yeah. I mean, if you look at what we did last year, last year first quarter, we did about 1.1%. It's usually one of our tougher quarters and with March flowing in there this year, makes it – I mean, with Easter flowing in there this year, it makes it a little bit harder. As we continue to press rates and continue to enhance our strategies, I would hope that we would continue to be able to grow RevPAR greater than that 6%. James Joseph Murren - Chairman & Chief Executive Officer: Yeah. So...

Great. Thanks. James Joseph Murren - Chairman & Chief Executive Officer: What was our RevPAR last year in the first quarter, it's only like 1.5% or something.

1.1% on the strip. James Joseph Murren - Chairman & Chief Executive Officer: Okay. So, on the strip, we're only up little over 1%. The fact that we think we're going to up 6% this year and you saw what we did for the year, it certainly gives us some really good momentum going into balance of this year. That combined with the bookings that I talked about earlier in the call and the fact that we literally are almost completely booked out for 2016, which would require us literally because we know we're going to get in the year for the year, and we always do. It's going to mean that we're going to be able to move some people around and be more creative on our spaces, and that will have an impact. And really in the second half of the year, as we build momentum, is why we were able to feel comfortable giving you some second half guidance as well.

Okay. Great. Thank you very much. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Great. Well, thank you all for participating. We've run over a little bit, so we apologize for that, but we appreciate your participation today and we'll be around all day for any follow-up questions. So, thank you and have a great day.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.