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MGM Resorts International (



Q4 2011 Earnings Call

February 22, 2012 11:00 AM


Dan D’Arrigo – EVP and CFO

Jim Murren – Chairman and CEO

Bobby Baldwin – Chief Design and Construction Officer

Grant Bowie – CEO and Executive Director of MGM China Holdings Limited

Corey Sanders – COO


Felicia Hendrix

Harry Curtis

Steven Kent

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Mark Strawn – Morgan Stanley

Shaun Kelley – Bank of America

Joe Greff – JPMorgan



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Good morning, and welcome to the MGM Resorts International Fourth Quarter and Full Year 2011 Earnings Conference Call. Joining the call from the company today are Jim Murren, Chairman and Chief Executive Officer; Bobby Baldwin, Chief Design and Construction Officer of MGM Resorts International and President and CEO of CityCenter; Dan D’Arrigo, Executive Vice President, Chief Financial Officer and Treasurer; Grant Bowie, Chief Executive Officer 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.

Now, I would like to turn the call over to Mr. Dan D’Arrigo. You may begin your conference.

Dan D’Arrigo

Thank you, Rasiya (ph), and good morning, and welcome to MGM Resorts International fourth quarter and full year earnings call. This call is being broadcast live on the Internet at, and a replay of the call will be made available on the company’s website. This morning, we furnished our press release on Form 8-K to the SEC. And before we get started, I’d like to read our quick Safe Harbor disclosures.

On this call, we will make forward-looking statements under the Safe Harbor provisions of the Federal Securities Law, actual results might differ materially from those projected in the 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 release and in our periodic filings with the SEC, including our most recent Form 10-K and subsequent Form 10-Q filings.

During the call, we will also discuss non-GAAP financial measures in talking about the company’s performance. You can find the 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’d like to turn the call over to Jim.

Jim Murren

Well. Thank you, Dan, and good morning to everyone. 2011 was a rewarding year for MGM. Our net revenues and EBITDA were both up double digits and our margins were up over 100 basis points. MGM China and CityCenter had breakout years, both had significant growth and EBITDA year-over-year and we ended the year on a high note with fourth quarter RevPAR up 13% year-over-year. As a matter of fact, we beat our RevPAR guidance every quarter last year and that was driven by better than expected FIT and leisure bookings. EBITDA for the wholly owned MGM China and CityCenter enterprises were all up double digits in the fourth quarter.

Looking back on the year, I’d like to take a moment to highlight a few of the major accomplishments before we move forward. Over at CityCenter, we refinanced $2 billion of debt and we’ve already been in the market again this year partially refinancing it yet again at better rates. Of course at MGM China, we listed on the Hong Kong Stock Exchange at the same time MGM Resorts acquired 1% of the stock and consolidated therefore MGM China on to its balance sheet and financial statements that of course significantly improves our financial standing.

At the same time, we sold $300 million of convertible note to our partner Pansy Ho. Over on the online side, we partnered with Bwin.Party in what we believe to be a very important strategic franchise and this will jointly offer online poker in U.S. if it’s legalized and at M Life, we launched the addition of all of our non-gaming capabilities, both starting last year and with great progress here in 2012. And speaking of 2012, we’re off to a very, very solid start. I’m happy to say that we’re executing on many of the goals that we’ve set out to accomplish. We’ve been very busy even in the beginning of this year and improving our balance sheet and I know Dan is going to go into further detail on some of those steps in a moment. We have made that a priority, I’ve mentioned this before, but it’s my belief that as we improve the balance sheet of this company, and it’s a promise I made to the Board, we will be accruing great value to the owners of the company, the shareholders and that has been our goal and we’ve made much progress there.

Just last week, we officially launched M Life’s non-gaming program. We’re excited about this given the nature of our resorts because this will allow our customers to be rewarded for everything that they do with us, every dollar virtually they spend in our resorts, hotel, restaurants, entertainment attractions, spas, you name it. And in conjunction with that, we launched our new website, which is working out extraordinarily well and makes the booking experience for our resorts, not only more fun, but certainly more productive for us as people can literally crap their own vocations, bundling all their opportunities into one trip.

It’s a big step in driving casino play, in casino mix into particularly our Las Vegas properties, we know how valuable this can be to cash flows and to flow through and we think we’ll be able to report on a quarterly basis great strides in that area.

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