GAMING INVESTMENT FORUM AT G2E September 26, 2016
Dan D Arrigo EVP & Chief Financial Officer MGM Resorts International
MGM RESORTS INTERNATIONAL Strong Domestic Operating Results Las Vegas Trends Maximizing Regional Market Share Executing Key Strategic Initiatives Continued Stabilization Of Macau Market Development Pipeline Nearing Completion
LAS VEGAS STRIP TRENDS Year-To-Date July 2016 Visitation +2% From Record 42.3 million visitors in 2015 McCarran Passengers +5% From Near Record in 2015 RevPAR +7% Average daily room rate +5% Strength in Meetings and Convention Business Citywide convention attendance +14% Gross gaming revenue +1%
MGM RESORTS - LAS VEGAS STRIP Year-To-Date June 30, 2016 Operating Results: Net Revenue +2% To $2.8 Billion Adjusted Property EBITDA +19% To $839 Million Margins +420 Basis Points To 30.4% Strong Convention Calendar Leader In Entertainment Opened T-Mobile Arena And The Park
Opened April 2016 T-MOBILE ARENA
Opening Late 2016 THE PARK THEATER
CITYCENTER Year-To-Date June 30, 2016 Operating Results 1 : Net Revenue +2% To $588 Million Adjusted EBITDA +18% To $170 Million Margins +407 Basis Points To 28.9% Completed $1.1 Billion Sale Of The Shops At Crystals Paid $1.1 Billion Dividend To Owners MGM Resorts Received $540 Million, Its 50% Share 1 Resort Operations and excludes The Shops at Crystals
U.S. REGIONALS Year-To-Date June 30, 2016 Operating Results - Adjusted Property EBITDA: MGM Grand Detroit +10% Beau Rivage +27% Gold Strike Tunica +15% Expanding East Coast Presence Acquired Remaining 50% Interest In Borgata Hotel Casino & Spa 1 1 Transaction closed August 1, 2016
PROFIT GROWTH PLAN: INCREASED TARGET TO $400 MILLION Adjusted EBITDA Impact Improvement Over 2014 Baseline Domestic Resorts + 50% Of CityCenter 2015 Impact: $71 Million 2016 Impact Goal: $200 Million 2017 Impact Goal: $300 Million MGM Launches 2016 Impact Goal: $275 Million 2017 Impact Goal: $400 Million Profit Growth Plan $67 Million $73 Million Exceed 30% $33 Million $38 Million Adjusted Property EBITDA Margins Q2-15 Q3-15 Q4-15 Q1-16 Q2-16
MGM RESORTS - U.S. DOMESTIC ($ in millions) 30% 24% 24% 26% 26% $1,690 Successful Execution Of Our Profit Growth $1,443 $1,518 Plan Has Driven $848 $1,000 Significant Margin Improvement At Our Domestic Resorts 2013 2014 2015 YTD 2Q15 YTD 2Q16 Adjusted Property EBITDA Margin Adjusted Property EBITDA Source: Company filings
MACAU MARKET DYNAMICS Year-To-Date June 2016 Total Gross Gaming Revenue -11% VIP Table Games -22% 1 Mass Table Games +1% 1 #1 Gaming Market In The World Room Supply Capacity Is Still Low Visitation Up, Driven By 8% Increase In Overnight Visitors Penetration Remains Low Infrastructure Projects 1 Based on Company earnings releases and filings
MGM CHINA Year-To-Date June 30, 2016 Operating Results: Net Revenue -4% Quarter Over Quarter To $921 Million Adjusted EBITDA +4% Quarter Over Quarter $249 Million 1 Margins Improved Both Year Over Year And Quarter Over Quarter To 27.1% 1, Led By Premium Mass Over 80% Profitability From Mass Segment Paid $46 Million Dividend MGM Resorts Received $23 Million, Its 51% Share 1 Before licensing fee
DEVELOPMENT PIPELINE MGM National Harbor: Opening In Late 2016 MGM Cotai: Opening In 2Q 2017 Park MGM / NoMad in Las Vegas: Opening In Late 2017/2018 MGM Springfield: Opening in Late 2018
MGM NATIONAL HARBOR Opening Late 2016
MGM NATIONAL HARBOR Opening Late 2016
Opening 2Q 2017 MGM COTAI
MGM COTAI Opening 2Q 2017
Opening Late 2018 MGM SPRINGFIELD
MGM SPRINGFIELD Opening Late 2018
RECENT STRATEGIC TRANSACTIONS MGM Growth Properties Successful $1.2 Billion Initial Public Offering The Shops At Crystals Completed Of $1.1 Billion Sale CityCenter Dividends Received $540 Million Dividend, MGM S 50% Share Borgata Hotel Casino & Spa Acquired Remaining 50% Interest, Sold Real Property To MGP MGM China Holdings Limited Increased Ownership +5% To 56%
POISED FOR CONTINUED BALANCE SHEET SUCCESS Enhanced capital structure and flexible balance sheet Creates foundation for strong long-term growth Lower cost of debt 1 Reduced from 7.7% to 5.7% since 2011 Reduced consolidated net leverage From 6.5x in 2011 to 4.8x at 6/30/16 PF 2 1 Based on weighted average cost of Consolidated MGM Resorts debt 2 Pro forma for events subsequent to 6/30/16 including the Borgata transaction
POSITIONED TO GENERATE MEANINGFUL FREE CASH FLOW Organic Growth Through Operational Excellence Profit Growth Plan Dominant Position In Key Markets Nearing Completion Of Significant Development Projects Over $4 Billion Of Projects Open By 2017 Newly Open Resorts Ramping Successfully Executing On Strategic Opportunities
PATH TO INVESTMENT GRADE Moody's S&P Fitch Aaa AAA AAA Aa1 AA+ AA+ Aa2 AA AA Aa3 AA- AA- A1 A+ A+ A2 A A A3 A- A- Baa1 BBB+ BBB+ Baa2 BBB BBB Baa3 BBB- BBB- Investment Grade Recent Upgrades: Moody s: Two Notch Upgrade On 4/26/16 To Ba3 S&P: One Notch Upgrade Current MGM Rating Trough MGM Rating Ba1 BB+ BB+ Ba2 BB BB Ba3 BB- BB- B1 B+ B+ B2 B B B3 B- B- Caa1 CCC+ CCC+ Caa2 CCC CCC Caa3 CCC- CCC- Ca CC CC C C C Non- Investment Grade On 8/4/16 To BB- Fitch: Two Notch Upgrade On 5/10/16 To BB
Q&A
SAFE HARBOR Forward-Looking Statements Statements in this presentation that are not historical facts are forward-looking statements and safe harbor statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and/or uncertainties, including those described in MGM Resorts International s ( MGM Resorts ) public filings with the Securities and Exchange Commission and the amendments thereto. MGM Resorts has based forward-looking statements on management s current expectations and assumptions and not on historical facts. Examples of these statements include, but are not limited to, MGM Resorts ability to generate future cash flow growth and to execute on future development and other projects, such as the Profit Growth Plan, the expected results of the Profit Growth Plan, MGM Resorts expectations regarding future financial results, the realization of any benefits from the MGP transactions and MGM Resorts ability to execute its strategic plan, improve its financial flexibility and achieve an investment grade rating. These forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include effects of economic conditions and market conditions in the markets in which MGM Resorts operates and competition with other destination travel locations throughout the United States and the world, the design, timing and costs of expansion projects, risks relating to international operations, permits, licenses, financings, approvals and other contingencies in connection with growth in new or existing jurisdictions and additional risks and uncertainties described in MGM Resorts Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports). In providing forward-looking statements, MGM Resorts is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If MGM Resorts updates one or more forwardlooking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements. Note Regarding Presentation of Non-GAAP Financial Measures The following presentation includes certain non-gaap financial measures as defined in Regulation G under the Securities Exchange Act of 1934, as amended, including Adjusted EBITDA and Adjusted Property EBITDA. MGM Resorts Adjusted EBITDA and Adjusted Property EBITDA measures have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of MGM Resorts results as reported under GAAP. Other companies in MGM Resorts industry may calculate these measures differently than MGM Resorts does, limiting their usefulness as comparative measures. Schedules that reconcile the non-gaap financial measures to the most directly comparable financial measures calculated and presented in accordance with Generally Accepted Accounting Principles in the United States are included in MGM Resorts earnings releases that have been furnished with the SEC and are available on MGM Resorts website at www.mgmresorts.com.