First Quarter 2016 Earnings Presentation May 5, 2016
Forward-Looking Statements Statements in this presentation that are not historical facts are forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and/or uncertainties, including those described in the Company's public filings with the Securities and Exchange Commission. The Company 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, the Company s 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, the realization of any benefits from the MGP transactions and the Company s ability to execute its strategic plan and improve its financial flexibility. 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 the Company 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 the Company s Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports). In providing forward-looking statements, the Company 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 the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forwardlooking 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. 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 on slide 34 and in our earnings releases that have been furnished with the SEC and are available on our website at www.mgmresorts.com.. 2
Key Company Highlights MGM Resorts reported outstanding results for 1Q 2016 Profit Growth Plan is ahead of plan Approximately $59 million of Adjusted EBITDA benefit realized in 1Q16 1 Successful completion of MGM Growth Properties initial public offering and debt financings CityCenter completed $1.1 billion sale of The Shops at Crystals CityCenter announced $1.1 billion dividend to owners The Park and T-Mobile Arena debuted on the Las Vegas Strip MGM Resorts strengthens its financial position Received $1.6 billion cash from the MGP IPO and distributions from the sale of The Shops at Crystals, which will be dedicated to debt reduction 1 Includes Adjusted EBITDA impact contributed by wholly owned domestic resorts plus 50% of CityCenter 3
Quarter Items At A Glance Non-recurring items that impact 1Q 2016 Diluted EPS of $0.12 1Q 2016 included a tax provision of $21 million vs. a tax benefit of $56 million in 1Q 2015 Notable items from prior year (1Q 2015) CityCenter s results included a $160 million gain 1 related to proceeds received pursuant to a global settlement agreement with Perini Building Company, Inc. ( Perini ) and the remaining Perini subcontractors, relating to the Harmon Hotel and Spa 1Q 2015 Diluted EPS of $0.33 included a $0.09 gain related to CityCenter s global settlement with Perini (as discussed above) 1 MGM s 50% economic share was impacted in Income From Unconsolidated Affiliates 4
1Q 2016 Financial Highlights Wholly Owned Domestic 1 (YoY) Adjusted Property EBITDA $ $485 million 24% Adjusted Property EBITDA Margin 30% 520 bps Wholly Owned Strip Adjusted Property EBITDA $ $409 million 26% Adjusted Property EBITDA Margin 30% 510 bps RevPAR 2 $147 8% Regionals 1 Adjusted Property EBITDA $ $76 million 18% Adjusted Property EBITDA Margin 28% 570 bps Net Revenue growth of 3%, or 4% excluding Circus Circus Reno, Railroad Pass, and the Company s properties in Jean Nevada, which were sold during 2015 Strong convention base allowing for effective yield management resulting in 8% RevPAR growth on the Strip, exceeding our +6% guidance Strong Adjusted Property EBITDA growth across Las Vegas & Regional properties with the strongest first quarter margin since 2007, up 520 bps to 30% 1 1 Year over year comparison includes Circus Circus Reno, Railroad Pass, and the Company s properties in Jean Nevada, which were sold during 2015 2 RevPAR is hotel revenue per available room 5
1Q 2016 Financial Highlights CityCenter Resort Operations 1 (YoY) 50% owned by MGM Resorts Adjusted EBITDA $ $92 million 30% Adjusted EBITDA Margin 31% 570 bps Net Revenue growth of +6% Highest first quarter Adjusted EBITDA 1 on record Record RevPAR at Aria and Vdara Leverage 2 : ~3.8x Recent Announcements In April 2016, CityCenter closed the sale of The Shops at Crystals for approximately $1.1 billion The CityCenter Board of Directors approved a $1.08 billion dividend, consisting of a $990M special dividend in connection with the sale and a $90M dividend as part of its annual dividend policy 1 Excludes The Shops at Crystals 2 Leverage ratio is calculated as Long-Term Debt over Adjusted EBITDA from Resort Operations 6
1Q 2016 Financial Highlights MGM China 1 (YoY) 51% owned by MGM Resorts Adjusted EBITDA $ $122 million 23% Adjusted EBITDA Margin 26% 80 bps Adjusted EBITDA 1 margin was impacted by lower table games hold in In- House VIP and mass table games Adjusted EBITDA 1 margin normalized for hold would have been flat sequentially at 28% Macau 1Q 2016 Market Trends: Visitation +0.6% YoY Total GGR -13% YoY VIP Table Games GGR -19% YoY Mass Table Games GGR -5% YoY 1 Before licensing fee 7
1Q 2016 EBITDA Growth Drivers ($ in millions) $525 Wholly Owned Domestic Resorts $500 $475 $54 $485 $450 $425 $20 $21 $400 $390 $375 $350 Q1-15 Hold Impact Normal Growth PGP Q1-16 Growth % 5% 5% 14% 57% of Wholly Owned Domestic Adj. Property EBITDA growth was driven by the Profit Growth Plan, with the balance due to normal growth and hold impact 8
Profit Growth Plan MGM s Profit Growth Plan was created to challenge, reinvigorate and empower our Company to take a smarter, more innovative approach to the way we operate our business... with the ultimate goal of creating an embedded culture of operational excellence and continuous improvement Key Objectives Realize $300 million of incremental Adjusted EBITDA 1 by 2017 Wholly owned domestic Adjusted Property EBITDA 1 margins back to 30% Path to Achieving We ve identified roughly 500 ideas to implement across all segments of the business, including gaming, hotel, entertainment and F&B One-third from revenue generating ideas; Two-thirds from cost savings Year end 2016 targets: Fully implement identified initiatives Realize $200 million of the $300 million 1 Wholly owned domestic resorts plus 50% of CityCenter 9
Profit Growth Plan Is Ahead Of Pace ADJUSTED EBITDA 1 IMPACT - IMPROVEMENT OVER 2014 BASELINE 2015 impact: $71 million 2016 impact goal: $200 million 2017 impact goal: $300 million MGM Launches Profit Growth Plan $33 million $38 million $59 million 1Q16 annualizedrate is ahead of plan Exceed 30% Adjusted EBITDA margins Q2-15 Q3-15 Q4-15 Q1-16 1 Wholly owned domestic resorts plus 50% of CityCenter 10
MGM Growth Properties Key Criteria for MGM Resorts Maximizes shareholder value Highlights the significant inherent value of our real estate Strengthens MGM s financial profile Enhances ability to execute growth strategy Minimize friction costs Key Highlights Priced at $21/ share, the top of the $18-21 range MGP s $1.2 billion IPO was the third largest REIT IPO ever, with meaningful support from a new class of investors $3.8 billion capital raised with a blended cost of debt of approximately 4.5% Over $800 million in liquidity, including an undrawn $600 million revolver MGM will participate in distributions through ~73% ownership of the operating partnership 11
Capital Structure Enhancement: Consolidated Net Leverage Actual 3/31/2016 Notes Paydown CityCenter Dividend MGP Transaction Pro Forma 3/31/16 Total Cash 1 $1,665 ($243) $540 $505 $2,467 LTM Adjusted EBITDA related to: Wholly owned domestic resorts $1,785 $-- $-- $-- $1,785 Management and other operations 25 -- -- -- 25 MGM China 506 -- -- -- 506 Corporate (excld. stock-based compensation) (274) -- -- (13) (287) $2,042 $-- $-- ($13) $2,029 Dividends and distributions received by MGM 2 34 -- 45 -- 79 $2,076 $-- $45 ($13) $2,108 Total Principal Amount of Debt related to: MGM Resorts Borrower Group 3 $11,255 ($243) $-- ($3,692) 4 $7,321 MGM National Harbor 250 -- -- -- 250 MGM China 1,559 -- -- -- 1,559 MGM Growth Properties -- -- -- 3,200 3,200 $13,064 ($243) $-- ($492) $12,329 Net Leverage Ratio 5.5x 4.7x 1 Includes $595 million of cash at MGM China 2 Represents ordinary dividends (excluding special dividends) and other regular cash distributions actually received by MGM from CityCenter, Borgata and Grand Victoria. Pro forma adjustments reflect MGM's share of the $90 million dividend paid by CityCenter in May 2016 as part of its annual dividend policy 3 Based on Borrower Group total debt as defined in the Company s Credit Agreement 4 Includes the pending redemption of MGM Resorts 10% senior notes due 2016 and its 7.5% senior notes due 2016 12
Enhanced U.S. Debt Maturity Profile As of 3/31/16 1 ($ in millions) Senior secured Senior unsecured Through the MGP transactions, MGM will address almost 70% of its US maturities through 2019 MGM U.S. maturities through 2019: $6.25 billion $1,476 Post-MGP Transaction 1,2 ($ in millions) $1,759 $475 $2,543 2016 2017 2018 2019 MGM U.S. maturities through 2019: $2.07 billion $0 $743 $475 $850 2016 2017 2018 2019 1 Excludes amortization 2 Pro forma for events subsequent to 3/31/16 including the MGM Growth Properties IPO and related debt financings, the pending redemption of MGM Resorts 10% senior notes due 2016 and its 7.5% senior notes due 2016, and the repayment of MGM s 6.875% notes due April 2016. 13
1Q 2016 Capital Expenditures Domestic Operations: $78 million Includes The Park, Mandalay Bay room remodels and convention center expansion, theater at Monte Carlo, and general maintenance and growth U.S. Development Projects: $143 million MGM National Harbor: $132 million MGM Springfield: $11 million MGM China: $188 million MGM Cotai: $180 million MGM Macau: $8 million Excludes capitalized interest. 14
2016 At A Glance 2Q 2016 2H 2016 CityCenter Related 1 : Continued contribution from Profit Growth Plan $20 million of accelerated depreciation at Aria due to the closure of the Zarkana theatre $400 million gain from the sale of The Shops at Crystals Corporate expense: $80-85 million, including Notable items from 4Q 2015 MGM China s $1.5 billion non-cash goodwill impairment charge Las Vegas Strip: $20 million negative hold impact ~$15 million related to the MGP transactions CityCenter Depreciation: $20 million increase ~$3 million related to MGP corporate expense ~$6 million related to Profit Growth Plan related to accelerated depreciation due to closure of the Zarkana theatre Preopening expense: $25-30 million Loss on debt retirements related to MGP transactions: Approximately $50 million Notable items from the year prior: Mayweather/Pacquiao fight in May 2015 1 MGM s economic share will be impacted in Income from unconsolidated Affiliates 15
T-Mobile Arena & The Park Opened April 2016 16
Development MGM National Harbor Expected To Open 4Q 2016 Rendering Construction as of 4/20/16 17
Development MGM Cotai Expected To Open 1Q 2017 Rendering Front Exterior Construction as of 4/25/16 Front Exterior 18
Development MGM Springfield Expected To Open Late 2018 Rendering Aerial Rendering Front Exterior 19
Appendix APPENDIX AGENDA Las Vegas Market Position Profit Growth Plan Supplemental Data 20
Las Vegas Positioned to Outperform The Las Vegas market is positioned to outperform over the next several years As the leading Entertainment Company of Las Vegas, MGM Resorts International will be the primary benefactor of this growth Strong visitation trends Las Vegas is positioned to continue to regain RevPAR share Limited supply growth expected in the near-term Continued diversification defining Las Vegas as a leading U.S. entertainment destination which drives incremental domestic and international demand Meetings and convention business trends continue to improve 21
Las Vegas Visitation Strong visitation trends 2007 to 2015 Trend Year-to-date March 43,000 42,000 41,000 Las Vegas Visitation is 8% ahead of 2007's peak 42,312 40,000 39,000 39,197 38,000 37,000 36,000 36,351 35,000 34,000 33,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 Las Vegas Visitation ('000) Mar-15 YTD Mar-16 YTD Las Vegas visitation trends continue to improve 2015 is significantly ahead of 2007 s peak This positive trend continues into 2016 * Source: LVCVA 22
Las Vegas vs. U.S. Room Supply (Indexed) Las Vegas will have limited supply growth over the next several years 125 120 2007-2015 CAGR Las Vegas 1.5% U.S 1.3% 115 110 105 100 95 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F Las Vegas Supply U.S. Supply 2015-2018F CAGR Las Vegas 0.4% U.S 2.2% Over the next several years Las Vegas is expected to have limited supply growth while U.S. lodging supply is expected to continue to expand This will be an additional contributing factor that will allow Las Vegas to grow its RevPAR share premium to the U.S. over the next several years * Source: U.S. historical data Smith Travel Research, U.S. Forecast PKF; Las Vegas data LVCVA (Resort World 50% 2018 based on current probability of completion) 23
Revenue Mix Diversification of market into a leading entertainment destination Las Vegas Strip Market (Fiscal Year Ended 6/30) MGM Las Vegas Properties 1 70% 2006 60% 2015 65% 2006 60% 50% 40% 2006 40% 2015 35% Gaming 35% Non- Gaming 65% Hotel 28% Food & Beverage 20% Other 17% 30% 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 Gaming Revenue Non-Gaming Revenue 2015 The Las Vegas market continues to diversify from primarily a gaming market to a major U.S. entertainment destination MGM Resorts increased diversification has solidified its place as a leading destination for world-class entertainment and food & beverage venues Gaming 29% Non- Gaming 71% Hotel 29% Food & Beverage 23% Other 19% Source: Nevada Gaming Control Board; MGM includes wholly-owned LV properties 1 Based on gross revenues 24
Attendee & Group Trends (Indexed) Group business continues to improve, MGM significantly outperforms 120 110 MGM 12% ahead of 2007 U.S. 3% ahead of 2007 LV (5)% behind 2007 100 90 80 70 60 MGM Implements new group sales strategy 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 MGM Las Vegas Group Room Nights U.S. Group Room Nights Las Vegas Convention Attendees MGM Resorts has outperformed after the implementation of several key initiatives that successfully shifted group mix to over 18%, an all-time record high. o o o Optimization of group placement across a portfolio-wide meeting space platform Global Sales Team to better leverage key accounts on an enterprise-wide basis Citywide group sales department one-stop shop for all MGM properties * Source: Las Vegas Attendees - Nevada Gaming Control Board, U.S. group room nights - Smith Travel Research, Luxury & Upper Upscale Hotels, MGM - Wholly-Owned Las Vegas Properties 25
Appendix APPENDIX AGENDA Las Vegas Market Position Profit Growth Plan Supplemental Data 26
MGM s Profit Growth Plan The Profit Growth Plan provides a strategic, structured approach that embeds a culture of continuous improvement aimed at driving sustainable value to our customers, shareholders and employees. Improve Guest Experience Leverage Size & Scale Operate More Efficiently Operate More Effectively Generate Incremental Revenue & Cash Flow Creating a Long-Term Competitive Advantage 27
Improve Guest Experience Technology utilized to improve service and reduce wait times o Introducing mobile point of sale systems at pools o Launching a mobile check-in solution o Installing guidance systems in parking garages Increased offerings and ease of booking Upgrading facilities and amenities Standardizing service across the organization Aligning staffing levels to meet customer demand 28
Leverage Size & Scale Renegotiating with existing partners to enhance value of relationships Identifying opportunities to standardize purchases across the organization o Wine o Linens and terry o Guest room amenities and supplies Increasing spend under management through centralized sourcing Developing new products at scale, that best fit the needs of our properties and customers Leveraging our buying power with new partner companies to drive value 29
Operate More Efficiently Consolidation of similar functions into Centralized Centers of Excellence Various HR functions Analytics Food and Beverage production Investing in new aircraft to reduce fuel and maintenance costs, deliver exceptional experiences, and increase the number of eligible customers Utilizing technology and advanced analytics to better manage staffing levels Identifying and eliminating processes that are not value added Adjusting work schedules and staggering shifts to better align with demand 30
Operate More Effectively Rethinking how our departments operate o Moving to a preventive maintenance model within our facilities o Standardizing menu rotations in employee dining rooms to reduce waste o Staggering shifts to best meet guest needs Migrating to an upgraded, modern, source to pay system Consolidating brand agencies to more effectively promote the company and properties Aligning to a single customer value matrix to provide more effective and consistent offers 31
Incremental Revenue & Cash Flow Offering new gaming options and enhancements to increase player participation More precisely identifying and managing the utilization of various room types Consolidation of marketing functions to ensure we are providing the right offers to our customers at the right time Better training staff to engage, enhance, and upgrade our customer experiences at various touch-points o Employee training and coaching on situational selling skills o Incentivizing employees to promote service enhancement behaviors o Utilizing technology to provide consistent offerings to customers 32
Appendix APPENDIX AGENDA Las Vegas Market Position Profit Growth Plan Supplemental Data 33
Supplemental Data: Non-GAAP Financial Measures MGM RESORTS INTERNATIONAL AND SUBSIDIARIES SUPPLEMENTAL DATA - ADJUSTED PROPERTY EBITDA and ADJUSTED EBITDA (In thousands) (Unaudited) Twelve Months Twelve Months Three Months Ended Ended Ended (1) March 31, 2016 March 31, 2015 December 31, 2015 March 31, 2016 Bellagio $ 116,651 $ 89,167 $ 395,385 $ 422,869 MGM Grand Las Vegas 80,894 65,206 280,266 295,954 Mandalay Bay 58,122 53,988 203,474 207,608 The Mirage 38,330 30,520 112,475 120,285 Luxor 25,391 17,299 87,169 95,261 New York-New York 30,903 24,593 106,457 112,767 Excalibur 23,877 16,542 82,247 89,582 Monte Carlo 21,300 20,056 85,962 87,206 Circus Circus Las Vegas 13,293 7,833 43,245 48,705 MGM Grand Detroit 40,042 33,612 154,979 161,409 Beau Rivage 22,799 18,390 88,843 93,252 Gold Strike Tunica 13,329 11,550 46,023 47,802 Other resort operations (2) - 1,123 3,441 2,318 Wholly owned domestic resorts 484,931 389,879 1,689,966 1,785,018 MGM China 114,123 148,456 539,881 505,548 Unconsolidated resorts (3) 14,702 117,381 257,883 155,204 Management and other operations 4,115 16,317 37,419 25,217 617,871 672,033 2,525,149 2,470,987 Stock compensation (9,869) (7,579) (32,125) (34,415) Corporate (65,118) (45,478) (254,104) (273,744) $ 542,884 $ 618,976 $ 2,238,920 $ 2,162,828 (1) The last twelve months financial data for the period ending March 31, 2016 has been calculated by subtracting the data for the three months ended March 31, 2015 from the data for the year ended December 31, 2015 and adding the data for the three months ended March 31, 2016. (2) Sold in 2015. (3) Represents the Company's share of operating income (loss), adjusted for the effect of certain basis differences. 34