MGM Resorts International (MGM) Q2 2016 Earnings Report, Transcript and Summary

Good morning, and welcome to the MGM Resorts International Second Quarter 2016 Earnings Conference Call. Joining the call from the company are Jim Murren, Chairman and Chief Executive Officer; Dan D'Arrigo, Executive Vice President and Chief Financial Officer; Bill Hornbuckle, President; Corey Sanders, Chief Operating Officer; James Stewart, CEO of MGM Growth Properties; 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 conference is being recorded. Now, I'd like to turn the conference over to Dan D'Arrigo. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Well, thank you, Keith, and good morning and welcome to the MGM Resorts and MGM Growth Properties' second quarter 2016 earnings call. This call is being broadcast live on the Internet at www.mgmresorts.com and at www.mgmgrowthproperties.com, a lot of Ws. Both MGM and MGP furnished their respective press releases on Form 8-K to the SEC this morning. On this call, we will make forward-looking statements under the Safe Harbor provisions under the federal securities laws. Actual results may 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 these forward-looking statements is contained in today's press releases and in the MGM and MGP periodic filings with the SEC. During the call, we will also discuss non-GAAP financial measures in talking about MGM and MGP's performance. You can find the reconciliation of these measures to GAAP financial measures in their respective press releases, which are also available on our websites. Finally, please note that this presentation is being recorded. And before turning it over to Jim, just one housekeeping item, as a result of the MGP transaction, we now refer to what we once called wholly owned domestic resorts as simply domestic resorts and wholly owned Las Vegas Strip resorts as Las Vegas Strip resorts. Any reference to domestic resorts and Las Vegas Strip resorts will continue to exclude CityCenter unless otherwise noted. I'd also like to remind everybody that our supplemental earnings deck is posted on both our websites which we hope you'll continue to find helpful. With that, I'll turn it over to Jim. James Joseph Murren - Chairman & Chief Executive Officer: Well, thank you, Dan, and good morning. When we last spoke to you, I think it was about a month and a half ago, at our first ever Investor Day, one of the key messages we had hoped everyone would take away was the strength and the depth of our talented management team and the transformation they are driving companywide through our Profit Growth Plan. It's been a year since we launched this plan, and looking back, it has and continues to leave a profound impression on this company. I'm proud that we have not only made tremendous progress to-date, but that the advancements we have made within this organization were achieved through innovation, teamwork and importantly with sustainability and perpetuity in mind. This plan was the stepping stone to inspiring a culture of continuous improvement here and where the concepts of the Profit Growth Plan are permanently embedded into the core philosophy of MGM. For those on the phone, from MGM, thank you very much for your participation, it's obviously been a tremendous success. We delivered a great quarter. Our domestic resorts cash flows increased 12% year-over-year, that's five consecutive quarters of double-digit EBITDA growth. Our Las Vegas Strip resorts cash flows increased 13%. EBITDA margins exceeded 30% at both the domestic and our Las Vegas Strip resorts. CityCenter resort operations EBITDA increased 6%. All three of our regional resorts produced record second quarter cash flows amazingly. Here in Las Vegas, as you already know, we had an extraordinary May last year, that included most notably the Mayweather-Pacquiao fight, we also had a couple of major music festivals, and of course it made for really tough second quarter comp. And despite that our Strip RevPAR grew 3.1%, which I know was below what we had guided, but frankly, in any growth over that quarter last year would have been in our opinion a great improvement and it was, particularly, as we built momentum throughout the June-July period, because that delta was really isolated simply and solely to the month of May. We had a good April, but even a stronger June and our third quarter is looking really terrific. You may have seen the earnings deck this morning, but have you not, I'm pleased to say we're forecasting our Las Vegas Strip resorts' RevPAR to grow by 7% in the third quarter. This we believe is an indication of the continued strength of Las Vegas markets certainly doing better than U.S. as a whole, and of course we're responsible for over 40,000 of the rooms here. The important thing is that our underlying business remains strong and the market here remains very healthy. I'm really happy to say we just finished July and I can tell you we are off to a great start here in the third quarter. We had our best July ever in our domestic resorts in terms of adjusted property cash flow. And we've seen broad-based strength across all of our business segments. We are also encouraged by the early indications of activity that we are picking up back from our Far East business. We're hosting some folks from the Far East, over the last several weeks, some of which we haven't seen in a while and others we've never seen before. Our leisure and convention group business continues to be strong. As a reminder, that's where the bulk of this city's hotel business lies. In the third quarter alone, we already have on the books, for MGM Resorts, 150,000 incremental convention room nights versus last year. This has, historically, as you know, been a shoulder period for group business and our sales team's efforts obviously are paying off. We're going to have the strongest convention mix in the third quarter in our history. The fourth quarter is going to be another tough comp. Remember that last year, we grew RevPAR at 12%, but because of the strength here in the third quarter and because of the bookings we are seeing, we still feel very strong for the rest of the year, and as we'll get into 2017 is also pacing well and remember, CON/AGG is returning in the first quarter. Of course, we continue to execute on our Profit Growth Plan. Remember during the Investor Day, we increased our Profit Growth Plan target to $400 million from the previous target of $300 million and I am very pleased to report that we are tracking well against this increased target. In the second quarter, we achieved $73 million of incremental EBITDA as a part of that plan and that includes contributions from our 50% economic share of CityCenter. And at the Investor Day, you heard straight from the men and women that are leading this effort to optimize our business across all the segments. And I heard a lot of feedback from you all, talking about the depth and strength of our management team, of which we are very proud. This effort is bearing fruit, and we remain committed to exceeding 30% full year EBITDA margins by 2017. Obviously, the numbers speak for themselves here, we're clearly proving out our ability to achieve this goal. Over in Macau, MGM China's cash flows, pre the license fee, grew quarter-to-quarter by 4%. And that was lead by growth in the premium mass segment. Despite lower hold in both mass and VIP, adjusted EBITDA margins remained healthy due to the strength in the mass and our continued cost efficiency efforts, led ably by Grant and his team there. And as you know, Grant will be available for any questions, but as I'm speaking, I could say that we continue to see very positive signs of health in that mass market, led by the premium mass. We believe that's the segment of the market that we focus on, and that has stabilized. We're entering into the final stages of our construction of MGM Cotai. We've been working really well and closely with our contractor, China State Construction, to get this one over the finish line. We are going to be absolutely sure we make this resort the best it possibly can be, and it will meet our high standards and the high standards of China State. We're going to get it right the first time. And working with China State, we now have great clarity as to exactly when we can open, and as a result of that, we have decided to push out the opening date a bit for MGM Cotai into the second quarter of next year. Recall that we'd said, we are looking for March. This will give us just a little bit more time. It does increase the budget slightly by 1% to $3.1 billion, but we think the time is worth it and both MGM and China State are committed and working well toward that timeframe. Grant could speak to it, but we're really excited about what exactly would be MGM Cotai, what it will look like, and how it will feel from a standpoint of technology and entertainment offerings. We know it will bring first-in-class, first-in-market in many of these offerings, and as we get closer to the opening, we'll be announcing many of those very unique amenities. And finally, our newest child, MGM Growth Properties. We have, of course, James Stewart here. MGP had its very first report since its IPO in April, and James is going to speak to the quarter. I got to say that James and the team are off to a running start over the last few months. Congratulations, James, on the acquisition of Borgata. You own a bouncing baby Borgata, and that just closed a couple of days ago. We think that starting next quarter, James and his team will host a separate call for MGP, and so what we'll likely do, starting next quarter, is MGM will have a call, and then back-to-back, with an MGP call, so as to give investors an opportunity to talk more in-depth to both companies. But for now, we're together, and so, I'll hand it over to James Stewart.

Thank you, Jim. First, I would like to officially welcome all of our new investors to the MGP family. A few months ago in April, MGM Growth Properties completed its IPO, issuing 57.5 million shares at $21 a share, the top of the price range. This includes 7.5 million shares issued as part of the greenshoe and was the largest triple-net REIT IPO of all time. It was a fantastic transaction and I couldn't be more proud and thankful for all the hard work of the many people involved in achieving this highly successful outcome. After completion of the IPO, the team went to work immediately, and just a month later, announced the acquisition of the real property of the Borgata, which as Jim mentioned, closed on Monday. With this transaction, we've added another premier asset to our portfolio and increased our rent by $100 million to $650 million on an annual basis. Pro forma for the acquisition, our net leverage remains within our target range of five times to 5.5 times EBITDA, and we expect the deal to be accretive to AFFO. As a result of this accretion, we will announce an increase in our annual dividend of $0.12 a share, starting in the third quarter, which we're all very excited about. We look forward to continuing to grow profitably and to becoming one of the leading publicly-traded REITs in the United States. With that, I'll turn it back to Jim for his closing remarks. James Joseph Murren - Chairman & Chief Executive Officer: Well, thank you, James, and before we get into Q&A, just a couple of added points. I want to emphasize that we're well on pace with this aggressive plan on profitability and our long-term financial strength. We obviously have a tremendous portfolio and that is growing with the addition of Borgata and we're excited to invite and add the 6,000 new employees to the MGM Resorts family, literally this week. But we're growing beyond that as well. As you know, we're opening National Harbor at the end of this year, Springfield in a couple of years. And we do know that beyond just creating economic benefit for those local communities which is significant, it also cements our position as the clear and dominant leader in these markets as we integrate those new properties into our family. We've been working really hard on the balance sheet. We have made tremendous strides there. We are committed to be once again an investment-grade company and we're marching towards that goal and as we become that, as we develop more and more free cash flow and cash from our dividend-paying enterprises, we are expecting that over time we'll be able to return that cash as well to our shareholders. MGM is not just a holding company, or even a gaming company, it's not even a hospitality company. The fact is we operate at the very intersection of hospitality of art, of dinning, shopping, gaming, live entertainment. We create amazing entertainment experiences for guests from every walk of life. We are the first movers on many fronts, both in the way we build and the way we run our business, both in terms of the leadership, and the fact that people want to work for us and our deep commitment to the responsibility of corporate, social good, and our communities. It's really a great time to be a part of MGM and we look forward to sharing more with our owners, our stakeholders in the future as we continue to grow, continue to improve, and continue to make money, return value to the owners of MGM, our shareholders. And with that, I'd like to turn it over to the operator for Q&A.

Okay. Thank you. We will now begin the question-and-answer session. And the first question comes from Carlo Santarelli with Deutsche Bank.

Hey, everyone, and thanks for taking my question. Jim, you spoke a little bit about, obviously, the tough comparison in the fourth quarter and noted that you feel pretty good about it and then some incremental strength in 2017. Would you be able to maybe put some framework, A, around the 2017 comment, talk a little bit about the group booking pace, convention mix, et cetera, as well as possibly put some color around the fourth quarter and how that's shaping up right now all relative to kind of the 6% RevPAR for the year? James Joseph Murren - Chairman & Chief Executive Officer: Sure, I'll give a start and then anyone can jump in. So, first, yes, I think we pleasantly surprised people in terms of our RevPAR guidance for the current quarter, 7%. We feel very comfortable with that number. We are certainly well ahead of that already. We had a double-digit increase just in the month of July alone. And a lot of it has to do with this group business that we are seeing in the current quarter, but we think will continue into the fourth quarter. I think, our all-time record room mix in the third quarter is about 14%. This year, it'd be like 18%, which is really a tremendous achievement on the group side. A lot of that will carry over into the fourth quarter, but as we said, the comp is difficult in the fourth quarter. It really will depend on the continuation of the sales teams efforts for the in the year, for the year. And we've seen a lot of recent business activity that's being booked, even as short-term as in a couple of weeks, let alone in the fourth quarter. So, we think on RevPAR, we'll be up in the fourth quarter. We are not prepared to give a number against that 12% comp, but we think it will be a healthy increase. As it gets into next year, again, we think we're going to have a record in terms of our group business. I don't think we had more in the year, for the year for next year, Corey?

Yes, we're up about 8% in case of our group room nights year-over-year at the same time. James Joseph Murren - Chairman & Chief Executive Officer: So, did you hear that? We're up...

Yes, yes. James Joseph Murren - Chairman & Chief Executive Officer: Okay. And so, I got to believe that we're going to do better on the group side in 2017 than we are this year, and we're having a good year this year. In addition, recall, that we open up The Park Theater at the end of this year. If we've learned anything about Las Vegas and how different it is from the rest of the United States, is that special events and entertainment activity drives RevPAR growth and the very fact that we had two Rock in Rio concerts, and the Mayweather-Pacquiao fight to compete against showed you the difficulty in the second quarter. Once we open Park MGM Theater, that opens in December, we'll have a lot more business and entertainment activity that quarter and – I'm sorry, that year, and of course also with our entertainment events at T-Mobile and MGM and Mandalay.

Great. Thank you. And then, Grant, if you're available, would you be able to comment a little bit obviously that the mass side seems to certainly be stabilizing and that's showing up in the numbers, on kind of July-to-date if you're seeing any... Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: No.

...change in trend from your 2Q levels? Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: Actually, July was very, very solid, continue to show that strengthening. And I think the critical point is that, it's also deepening in terms of the quality of the customer and the new signups in the performance, and that's I guess, what's really pleasing to us is, we're seeing returning frequency of non-customers, but we're starting to see some significant incremental new customers coming into the mix, so that's really a good sign.

Great. Thank you, guys.

Thank you. And the next question comes from Joe Greff with JPMorgan. Just one moment. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Hello? Joe, are you there?

Okay. I'm sorry. And the next question comes from Harry Curtis with Nomura.

Good morning. Let me, Corey, just ask you a follow-up question on the update percent pace for next year. If you back out ConAgra, which only comes in every three years, what do you think that pace might look like?

Yes. I think we'd still be up, Harry, because a lot of the – the way the ConAgra and the citywide is booked, not all the rooms are necessarily on the books right now. So, I don't have those numbers in front of me, but I feel pretty comfortable that we'd be up still.

Okay. And then, Jim, a follow-up question on the cash flow. You had mentioned that you're beginning to generate free cash flow and if you could give us a little bit more color on how much free cash flow you expect to generate in the second half, where is that likely to be directed, and then how that changes in the first half once National Harbor opens? I am just trying to get a better feel for what you'd do with your free cash flow now and what you'll likely do with it in 2017? James Joseph Murren - Chairman & Chief Executive Officer: Okay. I'll give you what I can, Harry. Yes, we're spending money today, building National Harbor, Cotai, obviously and a big project here in Las Vegas is that Park Theatre, which opens up in December. But yet still we're throwing off free cash. Once we get into 2017, we get a big boost from the opening of National Harbor, the completion and cash flow generation of The Park Theatre. And then, of course, we have the opening of Cotai. It's our expectation at MGM Resorts that our operating free cash flow will accelerate. And on top of that acceleration, we'll be accelerating our ability to dividend back to MGM Resorts through our joint ventures, like CityCenter and our investments in MGM China, post the opening of Cotai. And as that occurs, our leverage declines. The rating agencies have already indicated that they have increased our ratings several times. And as we continue to improve our ratings, you'll see a higher degree of receptivity at MGM to start dividending money back to its shareholders. So, I would guess, as we approach investment-grade, you'll be hearing more from us about what'd we do with our excess cash, and our inclination at this point in time is to establish a regular dividend, when it's appropriate and dividending money back to the owners of MGM Resorts, as we are today with MGM China and MGP.

That's helpful. And then, I have one quick one for Grant. This morning, we heard from MPEL that they're encouraged also by the trends in mass. Although, what was interesting is that their mass at City of Dreams was down sequentially from the first quarter to the second quarter. And you seem to be to have held up better, and if you could give us some color on the dynamics of why some operators are just simply outperforming in Macau? Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: I guess, I'll just focus on ourselves, because I think that's probably the one I know best about. I guess from our perspective is that we just really and continued and being focused for a long time, Harry, on understanding that it's about the way we manage the metrics and the way we actually work the database. And I think it's about maintaining the relationship, maintaining the service levels and ensuring that you continue to offer something. It's not just about the gaming. We're very, very aware and as you heard earlier from Jim, we're a leader in all facets of our business and that's absolutely true here in Macau as we diversify. It's one thing to keep on adding these non-gaming facilities, but they're actually going to be adding to the overall experience for our customers and I think that's what we're really being able to do. The recruitment and the signups and the retention of our customers, has always been our focus. We've always been really strong with that and we've retained those customers, we maintain relationships with them and despite the fact that there may be new products and new offers coming into the marketplace, they've chosen to stay with us because of the overall package that we're providing. We know that's critical for us moving into Cotai and it's about now building the base and deepening the market segmentation as I said earlier, and we're starting to see some of that positive indicators. I think all the operators in Macau are chasing the same business, but I think, we've worked really hard over many years now to put the systems in place to sustain ourselves. As the smallest in the market, we just have to do everything better, harder and faster than anybody else and I'm really proud of the team for that.

Thanks, everybody.

Harry, one other quick follow-up, excluding the first quarter, we're up 5% in pace for 2017, so that's another way to look at it.

Okay. Thanks, Corey.

The way things look now.

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

Can you guys hear me now? James Joseph Murren - Chairman & Chief Executive Officer: Yes, we can, Joe. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Hey, Joe. Welcome back.

Thanks. Good morning, again. Jim, in your prepared remarks, when you were talking about the strength that you saw in July, I think, you used the word, best July ever, record cash flows. Within that, you talked about strength in the Far East, customers coming into Las Vegas, I believe that's how I interpreted your comments. And you've obviously talked about double-digit RevPAR growth in July. Can you talk about how broad-based that consumer spend is outside of the room? And if you can maybe amplify the comments about the Far East business as well, that's intriguing to us. Thank you. James Joseph Murren - Chairman & Chief Executive Officer: Sure. It's been a really remarkable summer out here, Joe. We haven't seen this level of activity, in terms of people in the resorts, up and down the Strip ever. And I've heard some ideas, why that might be? People are travelling more to U.S. destinations like Las Vegas, there's a lot of activity here. But the fact is that, up and down our 10 resorts here, we're seeing more consumer activities than we've ever seen in a summer. And that has resulted in a very good spending across the entire portfolio of what we have to offer, food and beverage, entertainment, hotel and gaming. So that has driven a really remarkable month and so far a really good quarter in RevPAR. Layered on top of that and equally significantly I think is the fact that we are seeing a resurgence in high-end gaming business to Las Vegas, during a time when it's a non-traditional time to see these customers, and we saw a lot of customers coming from Asia, both Mainland China, and a variety of other markets in the Far East, coming to Las Vegas. We've had great gaming volumes throughout the quarter and as I said, some of these customers we didn't even know and others we haven't seen in a number of years and we've asked some of them, the ones, we do know well, what's up and they were like, they have said, look, we are on the road, we want to spend time, we want to have fun, and there has been somewhat of a pent-up, I think, level of demand. I got to say this, we happen to be hosting this conference at Bellagio. Bellagio opened up in October of 1998, Tim?

Yes. James Joseph Murren - Chairman & Chief Executive Officer: Bellagio just had the best EBITDA month it has ever had in the month of July. So we are seeing incredibly strong numbers on the gaming side at our high-end properties, incredibly strong for given the time of year that we are in, and we are seeing broad-based growth in our mass, I guess you'd call it our retail business. And I think it's significant to note, because some of the hotel companies have struggled a little bit with their transient business activity. We don't have a lot of that. We have very little. And so, our business activity is primarily convention business. And the convention business is doing extremely well for us here in the market in Las Vegas.

Great. And then, I've a follow-up for James Stewart. I don't want him to feel ignored on this call. But, James, maybe you can talk a little bit about your acquisition pipeline? How fertile that is, any progress you're making, both with respect to MGM and non-MGM real estate? And that's all from me. Thanks.

Sure. So, we are actively involved in a number of different dialogues. I think they are very interesting, people seem receptive and we're working hard to move them forward.

Thank you. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Thanks, Joe.

Thank you. And the next question comes from Steve Sakwa with Evercore.

Thanks. I guess, Jim, could you just talk maybe about National Harbor, kind of the timing? Remind us the opening? And how do we think about, ultimately, MGM's decision to potentially sell that asset and drop it into the REIT? James Joseph Murren - Chairman & Chief Executive Officer: Sure. Well, the development is quite spectacular. There are a few pictures that we've put on the Investor deck. Those are even out of date. We already now have the Marquee has been almost fully encased, that's at the front of the resort. And Whiting-Turner is our general contractor there. They're doing a tremendous job, some of the best work, finished work we've ever seen in a resort. So inside and out, it's quite spectacular. We're right on pace and we will open up in December. Most of the finished goods are already going in, they are literally placing slot machines on the floor already, the carpeting is down, the ceiling treatments are done, the entertainment venue is going to be really spectacular, that's completely enclosed, they are energizing the building, all the glazing is in, they're not only drywalling, but painting all the guest rooms, and it really is quite spectacular. It will open up, as I said, in December with quite a lineup of entertainment similar to what we did at T-Mobile, where we hit the market with kind of a splash, with a lot of great entertainment out here. And we're going to do the same thing, and we're going to make sure that the people in the Mid-Atlantic region know exactly what it's all about to be a part of an MGM Resorts' property, and what they have been missing all these years with the mediocre casinos that they have been going to for so many years. Now, what happens with MGP, the great success of Borgata, I think is a very illustrative example here, Steve. And we worked on acquiring, putting together that transaction, worked back to back with James Stewart on coming up with what both companies believe was a fair valuation and it obviously is working out terrifically well at Borgata. We'd like to build upon that success, really as soon as it is logical. So, I would say that my guess is that either James calls me or I call James, sometime in the middle of next year, once we have a quarter or two quarters under our belt, we can underwrite what it is. We think that MGM National Harbor is cash flowing. And I could tell you from an MGM Resorts' perspective, we're highly motivated to contract with MGP on a transaction very similar to what we did with Borgata.

Okay. Thanks very much. I appreciate it. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Thank you.

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

Hi, good morning. James Joseph Murren - Chairman & Chief Executive Officer: Good morning.

Jim, you laid out a bunch of times why you're so optimistic about your group business for the next few years and the (33:42) look really strong. And it's also really noteworthy how much your business contrasts with what we're seeing from the lodging companies, where group pace is up next year, but slowing. In some companies, we've even seen group cancellations. So, while you laid out the drivers for group in Vegas, like entertainment. I'm just wondering if you think this broader lodging kind of slowdown that we're seeing could be a leading indicator and also are you seeing any group cancellations at all? James Joseph Murren - Chairman & Chief Executive Officer: So, I'll start that and then turn over to folks here. I noted that a lot of the RevPAR guidance in the hotel-only sector has come down a bit, and it's attributed to a slowdown in GDP. And the commentary I've read from you and your compatriots is that, that business activity – the transient business activity have slowed down. We haven't seen that nor do we get much of it anyway. So, even if that were to be occurring, we haven't seen that. Now, on the group side we've seen little to no change in attrition at all. So, I'll turn it over to Corey, if you have some views on whether or not that what you're seeing in the hotel sector is a leading indicator to us, I don't know. It doesn't appear to be the case since we continue to build business from other markets and expand the conventions that are already coming.

Our group business is solid and majority of it continues to be in corporate. We're close to 60% of our business being corporate. And what's different is, there are 1,000 plus groups, very strong in this, particularly (35:35) financial are our main groups. There have been small cancellations, but we've been able to offset them with in the year, for the year bookings. So, we've been reading the same material, we just don't see it. We feel pretty comfortable when we talk to our sales people constantly just to get a barometer on their – they continue to increase their bookings, so that's what we're seeing here. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: And, Felicia, I would just add a couple of points, so I think, one is and you will know better than I, but I think one is, some of the hotel companies are sector-specific in certain markets, that's really impacting them. And energy is a good example. We don't do much in the energy business. We have very little, if not nil, in energy. So, as Corey pointed out, the sectors where our bread and butter are thriving and doing well right now, and that's benefiting us. The second factor I'd point out is the markets that are starting to slow are starting to have significant supply, and we don't have any supply coming on here in Las Vegas. So, as people want to be in our properties, and want to be here in Las Vegas Strip, whether with us or our competitors because of what we offer, there's not a supply issue here to be dealing with and that's helping us bolster the shoulder periods that Jim spoke about earlier.

That's really helpful and I agree. Now, on the flip side, and this might be early to see this and this might be too creative of a question, but I'm just wondering if you think you could benefit or if you're seeing any benefit from Zika at all as people might not want to travel to places like Miami or just altering their travel in particular? And then also I apologize if you said this, but what is your visibility into 2018 with group? James Joseph Murren - Chairman & Chief Executive Officer: Sure. One of the interesting notes I got this week was comments from JetBlue that they're seeing a pickup in passenger activity to Las Vegas and maybe a slowdown to Florida. JetBlue is not a large airline here in Las Vegas, I think, it's about 3%, is that right?

Yes. James Joseph Murren - Chairman & Chief Executive Officer: 3% or so of the lift here. But there is no doubt that there – I have to believe there are variety of factors as to why Las Vegas is seeing a strong air activity and we're seeing strong drive in activity from the Southwest. And that really is helping everybody in town, not just the MGM portfolio but everyone else. So as sad as that situation is in Florida, I certainly don't want to benefit from it as a result of that, but I can say that we're seeing a pickup in air traffic and in driving traffic even in the last couple of months.

Even on 2018, we're really comfortable where we are from a pace perspective. We're actually a little bit down from the same time last year, but to a point where we're actually comfortable what's on the books right now, really it's one-year to two-year booking period. When you look at 2018, 2019, in total, we're actually up in those years. So I think, long-term, we're pretty comfortable what we're seeing on the book.

Thank you. And just, Grant, quick question for you. I was just wondering, did Wynn's comments about their table allocation change how you're thinking about the table allocation at your properties at all? Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: I think the critical point is, is that we're in conversations and we'll continue to be with the government, and I think, we are working hard to make sure that we put everything in place and meet all of their requirements and objectives and therefore, we are still positive and we are still confident that we can deliver the outcomes that we are looking for. But I think it's premature for us to stop talking, we've got a lot of things to do and got a lot of hurdles to jump, but we are pretty positive that we have put all the right steps and all the right components in place.

Okay. Thank you. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Thank you, Felicia.

Thank you. And the next question comes from Thomas Allen with Morgan Stanley. Thomas G. Allen - Morgan Stanley & Co. LLC: Hey, can you help us think about the seasonality of the Profit Growth Plan? You've realized $140 million of savings in the first half of the year and your goal for the year is $275 million, so I just want post those numbers. Thank you. James Joseph Murren - Chairman & Chief Executive Officer: We'll pass it over to Chris Nordling, who is running the whole thing. Thomas G. Allen - Morgan Stanley & Co. LLC: Yes. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Hey, Chris.

Hey. James Joseph Murren - Chairman & Chief Executive Officer: Thank you. As a shareholder, thank you, Chris.

Very welcome, and there is more to come. As we get into the third quarter and fourth quarter, you're going to see the comparison of the growth slowdown, because we're going to be comparing savings against last year. Our original goal was $300 million against the baseline of 2014. You will see that continue to grow in the third quarter and fourth quarter and then in the first quarter of 2017. James Joseph Murren - Chairman & Chief Executive Officer: And, hey, Grant, could you put your phone on mute? Well, I think we are getting some feedback. Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: We are on mute. James Joseph Murren - Chairman & Chief Executive Officer: Okay, well. It's coming from somewhere else then. I'm sorry, okay. Does that answer your question, Thomas? Thomas G. Allen - Morgan Stanley & Co. LLC: It does, it does. And then when I think – just on the Borgata, I know you just closed on the deal, but any incremental thoughts on potential upside, now that you own it and then any thoughts on having to invest some lobbying dollars for the North New Jersey referendum. Thank you. James Joseph Murren - Chairman & Chief Executive Officer: Sure. We have the Borgata team here. They've been here a last couple of days, working on marketing integration within MGM Resorts. There are multiple opportunities to drive revenue at Borgata, both in terms of the intersection of our database. This was remarkable to me, I don't know if – I know, we were all surprised a bit, when we took together the MGM database and the Borgata database, there was only a 5% overlap between those two large databases. So, we have a tremendous amount of incremental data of people that live in the Borgata region that will now benefit from MGM's ownership of Borgata and the same will be true for the Borgatic customer base, being able to go to Beau Rivage in Detroit, and out here in Las Vegas. So that's one area. The second area is we have a very robust charter air business in our regional properties, as does Borgata. And we do know that there is a lot of opportunity to integrate our charter business to drive more revenue. Third, would be on entertainment. It obviously is the market and entertainment leader, but with our contacts and relationships we can drive more entertainment which thus drives more gaming revenue and overall revenue. So, we see a tremendous a job as Borgata has done. We see upside in terms of revenue and certainly upside in terms of cost reductions as they come on to larger platforms. And I think that, that is something that we are most gratified about.

And the other thing I would add, we will take our PGP initiatives and we've already actually given them to them. And some of those of our initiatives will be implemented also. And talking to the Borgata guys, because they've been here, this is the one tool they've been missing in their mind was in order to compete – I mean, they compete well obviously in Atlantic City, but can compete against Caesars, they never had that Las Vegas presence. And so they really needed this as a huge tool for them. James Joseph Murren - Chairman & Chief Executive Officer: Yes. And then in terms of the referendum, we've been on the sidelines on this. Our challenge is though we would certainly be the leading contender to win one of those potential $1 billion resort opportunities in North New Jersey, given our presence in New Jersey already, our licensing there and the dominance that Borgata has, we would be no doubt the lead horse. The issue for us is, we don't know enough, we don't know what the tax rate would be, we don't know what the enabling legislation would look like. And it's really the referendum challenge for us as it puts the cart before the horse, we don't have enough facts right now. We are taking a look at it though and looking at how does that potential fit within the strategic goals of MGM Resorts going forward? We're going to have an unbelievable resort in the D.C. area with National Harbor. We've got our Mississippi Gulf Coast property. Now, we have the dominant position in Atlantic City and soon to have a very successful casino in Western Mass. How does Northern New Jersey or other parts of the region, for example, New York State, fit within the growth plans of MGM? And frankly, we haven't made that determination yet. The referendum is going to be close. I couldn't pick it right now, it's polling to fail currently, but who knows, what happens in November, and we're going to evaluate this and probably make a decision of whether we're positive, neutral or negative within the next few weeks. Thomas G. Allen - Morgan Stanley & Co. LLC: Very helpful. Thank you.

Thank you. And the next question comes from Shaun Kelley with Bank of America.

Hey, good morning, guys. Maybe I just wanted to start with the gaming side, I mean, Jim, you made a lot of positive commentary about what you are seeing on the high end side. Was wondering, so far in July, at least, but as we look back over the last – let's call it six months to 12 months to 24 months, gaming has kind of continued to lag a little bit of what we might consider a normal growth rate. So, I'm kind of curious for your thoughts of excluding the volatility around high end. What do you think the core sort of run rate, slot and table game trajectory for revenue growth is in the market right now? James Joseph Murren - Chairman & Chief Executive Officer: Well, I think a lot of what you've seen has been an evolution of how operators are developing game relationships with customers both on the table side and on the slot side to find ways to not only drive some revenue, but more importantly drive profitability. And for example our table games margins are probably the highest in the industry because we have been focusing on at least at our luxury properties. We've been focusing on table profitability and margin. The same would be true on the slot side, where we have been more thoughtful in terms of how to develop a slot product that results in better profitability for us. I think underlying trends and, Corey or Dan, correct me, if I'm wrong, it's a low single-digit type of growth here in the market. You get the fluctuations withhold obviously and also events. But I think the underlying business, setting aside, this really fortunate experience in the last month or so of high-end business, setting aside that. Just looking at the core business, of core table and slot performance, we would expect to see low single-digit growth in the market and MGM should do at least as well as that, we would expect better, because we expect a lot of ourselves, and because we are investing a lot in entertainment, which drives a lot of that entertainment – drives a lot of that gaming revenue.

But I guess, is it fair to say that, at the moment, given some of the mix changes you guys are implementing probably as part of the PGP, that you're sacrificing a little bit of top line for bottom line, the way that works, because I imagine players sense, when odds move, at least from your more kind of regular players can sense when odds move and maybe tweak their play accordingly? James Joseph Murren - Chairman & Chief Executive Officer: Yes. That would be fair.

And what I would add, I mean there's some players that we may not want to deal to anymore. James Joseph Murren - Chairman & Chief Executive Officer: Yes.

They may win a little bit, but between their cost structure and everything and they may drive a lot of volume, we would probably change the way we deal with those customers. James Joseph Murren - Chairman & Chief Executive Officer: Yes. We disinvited quite a few customers of that nature, but to be clear on this point is that, what it's resulted in for the vast majority of our customers is a far better experience, they're being recognized in a more wholesome way for their play. What it has done is, it has discouraged some of the lower margin players that are professional from playing with us and encouraged the recreational gamer to play and get compensated and rewarded for their play.

Okay. That's great. Very clear. And my second question would be for Grant, over Macau, but could you just remind us of, how much labor do you think you're holding on to at the moment probably in head count terms that you think can move or transition over to Cotai when you open? That would be really helpful for modeling. Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: We're still going through the details of that as we keep on adjusting, but we're in the numbers of about 500 to 550.

The extra table count – or, sorry extra head count? Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: Of head count that we're carrying at the moment particularly in table games that will move to Cotai. Yes.

Excellent. And then just your overall staffing level at Macau and Cotai if you could? Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: So, for the current property, we're just sitting at about 5,800 and in the first phase for Cotai, because we'll be gearing up over a period of time, it's basically a similar number.

Great. Thank you very much.

Thank you. And the next question comes from Robin Farley with UBS.

Great. Thanks. For your RevPAR guidance for Vegas, are you still guiding to full year at that plus 6%? That would kind of imply Q4 being up around 6% or 7%, which I think it sounded like you're thinking maybe – you're putting a number yet that would be positive, but maybe not as high as that level, so just trying to think about how full your RevPAR shapes up in Vegas? Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Yes, I think, Robin, for the full year or kind of just the way the math works with the second quarter is kind of around that 5% to 6% level for the full year.

Okay. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: And it doesn't change our view on the back half, it's just the way the second quarter falls out. James Joseph Murren - Chairman & Chief Executive Officer: Right. We'll be clarifying that when we get a little bit further in, but with 7%, we'll see how we do. If we'd see 7%, then we still got a good shot at that for the full year. If we come in at 7%, it's going to be tough to make the full year guidance because of the hole we had in May.

Okay, great. And then, I don't know if you would give kind of RevPAR by month in Q2, just as it sounds like it was, May was very different than April and June, just to get a sense of what those two months look like? Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Yes, I think the only thing I would say, I don't want to get into monthly, but both April and June were up nicely and May was just down, and down a little bit more than our expectations that May would have been down, and it's all around that weekend around the fight. James Joseph Murren - Chairman & Chief Executive Officer: Yes. June was up double digits. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Yes. James Joseph Murren - Chairman & Chief Executive Officer: June was up double digits, I can't remember what April was up, but... Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: It's pretty close to double digits.

Close to the double digits. James Joseph Murren - Chairman & Chief Executive Officer: Yes. So, it really was the May over May. So, we had a really good June. Obviously, we've talked about how strong July was.

Okay, great. And then, my last question is just for Macau, and looking at table allocations, and I know it's too early to know what they may be. But can you quantify how many tables you have banked at The Peninsula? In other words, how many you have that could be moved over to Cotai, if your initial allocation isn't as high as you might like? Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: I wouldn't say that we've banked any tables, but in terms of maximizing the utilization, we're probably in the order of 100, 150.

I'm sorry, 100 to 150 in (53:10). Grant R. Bowie - Chief Executive Officer & Executive Director, MGM China Holdings Ltd.: (53:10) depending on we could move capacity because we still have some utilization that we can build here, but we're actually trying to find more locations to put more tables on that floor, and so we continue to do that. But if we have to be reallocating tables, we could probably do that.

Okay, great. Thank you very much. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Thank you, Robin.

Thank you. And the next question comes from John DeCree from Union Gaming.

Hey, everyone. Thank you for the questions. Great color so far. So just wanted to maybe, Dan, ask for a couple of housekeeping items. I was wondering, if you could let us know how much is left to spend on Cotai and National Harbor for the rest of the year? And then maybe a little bit more detail about the NV Energy exit expense and what you're thinking about kind of saving on a run rate basis from there? Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Sure, John. In National Harbor, we'll spend about $450 million through the back half of 2016, and the total remaining is about $550 million, so we'll have about a $100 million tail into early 2017. In Cotai, we're just shy of about the half way point and as far as our spend to-date, we'll spend about another $900 million in 2016, with the remainder obviously in 2017. And then Springfield has started its demo and site and garage, parking work. We'll spend about $100 million in Springfield in the back half of this year. James Joseph Murren - Chairman & Chief Executive Officer: NV Energy? Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Oh, and then on the NV Energy front, as we've talked about previously and it has been published, we have notified the PUC and Nevada Energy that we will leave the grid effective October 1. The third quarter, we will incur a couple of charges with respect to leaving the grid in totality the range from about $160 million to $190 million. There's two components. There is the impact fee for leaving the system, that's about $87 million. And then, as we paid today, and as we will continue to pay going forward, there will be a second charge for an accrual for some non-bypassable rate charges. That will be about another $70 million to $100 million charge in the third quarter. Those relate to charges from the time period of today going forward to contracts that exist through 2040. And that we'll accrue upfront. So once we have the charges behind us, we believe that we'll probably save on a go forward basis of the P&L kind of $20 million to $30 million annually and really control our destiny in terms of open market purchases and moving more of our energy to sustainable efforts and really take control of that overall process for ourselves.

Great, thank you. Very helpful.

And, Keith, we'll take our last question.

Yes. Thank you. And our last question comes from David Katz with Telsey Group.

Hi, good morning. Made it under the wire. I just wanted to ask, when and this maybe a little bit early days, but you talked about your free cash flow ramping up and sort of you talked about dividends, and I was curious how you thought about the determination between dividends versus share repurchases and are they both on the table or would there be some reason to choose, I think, you mentioned dividends but not repurchases? James Joseph Murren - Chairman & Chief Executive Officer: I did, David. This is Jim. This of course would be fully discussed, debated, vetted by the board. So I'm just sharing with you my view is at this point in time. I've been here 19 years, we've done both. We've bought back a lot of stock, we've paid special dividends, we've paid an annual dividend and it's my bias toward a regular dividend, because I'd like to establish a recurring disciplined approach toward returning cash to shareholders. But I might get voted by Dan and the board might – we'll talk about it. So, my inclination is, and our emphasis at MGM is to continue to improve our balance sheet, continue to show demonstrable progress to the rating agencies, continue to see a path to investment-grade which we think is within our grasp. And as that occurs, we develop additional discipline of developing a plan of returning cash to shareholders. It may result in share repurchases, it may be special dividends, but my inclination at this point in time knowing what I know about our business and this industry would be to establish and perpetuate a regular quarterly dividend.

Right. Both would be fine too, but I appreciate the answer. Thanks very much. James Joseph Murren - Chairman & Chief Executive Officer: You're welcome. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: Thank you, David. Daniel J. D'Arrigo - Chief Financial Officer, Treasurer & Executive VP: And thank you all for joining us this morning. We're obviously around both at the MGM and the MGP offices to answer any follow-up questions and we greatly appreciate you joining us this morning. Thank you. James Joseph Murren - Chairman & Chief Executive Officer: Thank you.

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