Good afternoon, and welcome to the MGM Resorts International Fourth Quarter and Full Year 2022 Earnings Conference Call. Joining the call from the company today are Bill Hornbuckle, Chief Executive Officer and President; Corey Sanders, Chief Operating Officer; Jonathan Halkyard, Chief Financial Officer and Treasurer; Hubert Wang, President and Chief Operating Officer of MGM China; and Andrew Chapman, Director of Investor Relations. Please note, this conference is being recorded. Now I would like to turn the call over to Andrew Chapman. Please go ahead.

Good afternoon, and welcome to the MGM Resorts International fourth quarter and full year 2022 earnings call. This call is being broadcast live on the internet at investors.mgmresorts.com. We've also furnished our press release on Form 8-K to the SEC. On this call, we will make forward-looking statements under the safe harbor provisions of the federal securities laws. Actual results may differ materially from those contemplated in these statements. Additional information concerning factors that could cause actual results to differ from these forward-looking statements is contained in today's press release and in our periodic filings with the SEC. Except as required by law, we undertake no obligation to update these statements as a result of new information or otherwise. During the call, we will also discuss non-GAAP financial measures in talking about our performance. You can find the reconciliation to GAAP financial measures in our press release and investor presentation, which are available on our website. Finally, this presentation is being recorded. I will now turn it over to Bill Hornbuckle.

Thank you, Andrew, and thank you all for joining us today. I'm proud to announce that MGM Resorts International drove record fourth quarter adjusted property EBITDAR for Las Vegas and regional resorts. What's more, our full year Las Vegas Strip adjusted property EBITDAR increased by more than 80% year-over-year. These outstanding results are evidence of our focus on optimizing growth in our business and operations as well as our strategic vision of becoming the world's premier gaming entertainment company. These outcomes are also a testament to our employees who go above and beyond every day to take care of our guests and create amazing experiences, which drive loyalty among our customers. Our employees are true heroes of this story, and we need to celebrate them. I couldn't be prouder of them for delivering these financial results alongside the steadily improving guest and record employee satisfaction scores we are enjoying. As we look forward, we expect many of the drivers for our 2022 performance to continue into 2023. Importantly, we are well positioned to weather a variety of environments, given the inherent long-term benefits of MGM's diverse portfolio. In fact, we have the most diverse offerings in the gaming space. And as such, we are a well-balanced organization that benefits from both scale and a host of premier brand offerings. This distinction, the distinct pieces of our business that create this diversification include our nine Las Vegas Strip and eight regional domestic properties in the U.S. that cater to all market segments and produce consistently strong profitability; our two integrated resorts in Macau, which pre-pandemic generated EBITDAR of over $700 million and are just now beginning to see a very real return to profitability; our digital strategy with 50% ownership of BetMGM, one of the leading U.S. digital sports betting and gaming operators. BetMGM is the leader in what is financially the most important segment in the nation, iGaming, and is making overall progress towards its profitability; and our ownership of LeoVegas, which we're using to grow our digital business internationally and extend both MGM's brand and content reach. Ultimately, our balance sheet allows significant flexibility to invest in areas with the highest return on capital, including New York, Japan, further expanding our digital footprint via LeoVegas and other substantive international opportunities we're pursuing in that space, as well as funding and continued share repurchases. In fact, as you know, we have just announced that our Board approved another $2 billion repurchase program. Looking ahead, we see multiple opportunities for growth and momentum in our business, coupling these opportunities with a relentless focus on free cash flow per share, our operating model, margin control and disciplined expense management, which we believe gives us great confidence that our best days are ahead of us. Let me walk through the business case for 2023, starting with our U.S. properties. First, we are encouraged by the early success of The Cosmopolitan of Las Vegas as we integrate the business into MGM Resorts infrastructure. On an annualized basis, we have double-digit growth in revenue and EBITDAR compared to the reported 12-month period prior to the acquisition. We are already beginning to produce cross-property play with hundreds of high-end players from The Cosmopolitan database attending MGM Resorts customer events and driving millions in win at our other sister properties. This is a trend that we expect to continue for the Lunar New Year celebration at our properties in Las Vegas, and we anticipate expanding to the mass market as we integrate MGM Rewards into The Cosmopolitan system. Next, we have a strong event calendar in Las Vegas. CES had 115,000 attendees last month, up from 45,000 in 2022. CONEXPO and CON/AGG next month are setting up to be the best ever, and March Madness, Sweet Sixteen and Elite 8 games are coming to Las Vegas. Together, the calendar in March is positioned to be the best hotel revenue month in our history. Additionally, Formula 1 is expected to bring $1 billion in economic value to the city, which we believe we are best positioned to take advantage of. Las Vegas also has Allegiant Stadium, which hosted 40 events and over 1.5 million visitors in 2022 and is expected to bring even more visitors and higher quality events in 2023, driving significant spend, particularly at our South end properties. Another tailwind is the ongoing growth in visitation. The LVCVA expects domestic flight growth capacity to reach 120% of 2019 in the first quarter of 2023, and international recovery to reach 80% of 2019 available seats. Harry Reid Airport hosted a record 52.6 million passengers in 2022. Outside of our domestic business, we also see tremendous opportunities for growth. Starting with China, Macau is back. As you well know, COVID restrictions impacted our Macau operations in 2022, causing an operational loss that negatively impacted our overall results. However, we are experiencing a rebound in 2023 as our guests are returning in force just as they did in Las Vegas when restrictions were lifted here. In fact, quarter-to-date, we are excited to report that MGM China's combined properties are the highest earning businesses within our company. As part of the concession renewal process, we committed to bringing nongaming entertainment events to Macau. Those events were strong drivers of visitation to our property during the Lunar New Year and at the end of January. We see these early results as confirming our confidence in Macau's market recovery and the long-term viability upon which we are retendering commitments. Unique to MGM China, we have secured 200 additional tables as part of our new gaming concession, which combined with our premier mass positioning, should allow us to drive market share into the low to mid-teens. In fact, during January, our market share was 16%, compared to high single-digit market shares pre-pandemic. This outstanding performance was driven by the MGM Chinese team, strategic focus on delivering a fully renovated gaming floor, a complete hotel product mix for our targeted customers, various marketing efforts in producing strong nongaming events, shows and promotions, plus our team's improvement in service levels and operational efficiencies. These collective efforts position us for a long-term growth story in Macau. We've also reason to be optimistic about the growth prospects of our business well into the remainder of this decade, especially in light of the two new gaming licenses that we hope to receive in the near future. We expect to submit our RFA in New York in the first half of this year, and we hope for a response in the near future. One advantage we have over the competition in this market is our ability to add tables to our existing casino floor and thus generate incremental tax revenue for the state almost instantly once approved for license. We expect to spend about $2 billion in New York, inclusive of the license fee. We will refine our program and planning. But right now, we expect extensive property improvements such as a significant entertainment offering, new food and beverage opportunities, covered parking, and an overall increase in casino floor space. As you may recall, we submitted our RFP in Japan for an integrated resort license to operate in Osaka approximately 10 months ago. Unfortunately, we're still waiting for the response from the government, but we are being patient and believe we will hear soon. MGM Resorts has presented a compelling offer with our partner, ORIX, to develop an integrated resort, which will enhance international tourism and growth in that region. We're extremely excited about the ROI opportunity in a market where we may be the sole operator for some time in the future. Each of the projects I just mentioned are expected to generate returns well above our current free cash flow yield. These are all future capital investment decisions we weigh upon that same standard. In closing, 2022 was a phenomenal year for MGM Resorts, and we're confident we will see progress into 2023 and beyond. With that, I'll turn it over to Jon for more detail on the fourth quarter and the year.

Thanks very much, Bill. Before I dig into the financial results, let me also thank my colleagues here at MGM Resorts for an outstanding quarter and a truly amazing year. Now I will share some of the exceptional financial results we achieved. Las Vegas Strip same-store revenues, excluding The Cosmopolitan and The Mirage, grew 11% and adjusted property EBITDAR grew 6% in the fourth quarter compared with last year. Fourth quarter occupancy of 91% was up 500 basis points year-over-year and ADR was $260 in the fourth quarter, which grew 30% over last year. Several volume metrics for us set records as well as our Las Vegas slot handle set its seventh consecutive quarterly record in the fourth quarter. Demand in Las Vegas remains strong across all segments, driven by our exceptional entertainment offerings and other customer demand drivers. The strength continued into January, where occupancy was 90% and rooms booked during the month were on record pace with rates up double digits compared to last year. In the regions, fourth quarter revenues grew 10% and adjusted property EBITDAR grew 3% year-over-year. While EBITDAR was down 1% versus the third quarter, this sequential decline is in line with normal seasonality for the fourth quarter. Importantly, labor expense as a percentage of revenues was flat sequentially and our current headcount remains approximately 20% below 2019 levels, all while we achieved historic highs in NPS and other indicative customer satisfaction. In the fourth quarter, corporate expense, excluding stock compensation, was $113 million, which includes $5 million related to MGM China, global development costs of $6 million and transaction costs of $2 million. Going forward, we expect corporate expense for the full year 2023 to be approximately $380 million to $400 million, a decrease of approximately $30 million to $50 million from 2022. Included in MGM's corporate expense this year is $44 million for MGM China and approximately $37 million in anticipated development expense related to Japan and New York. We intend to invest approximately $800 million in domestic CapEx in 2023, compared to the $727 million in CapEx invested in 2022. Maintenance capital will be approximately $600 million of this spend this year. This year, it includes room remodels in the Bellagio Spa Tower, Borgata's Water Club, and the completion of our New York-New York room renovation. Since 2019, we've reduced the average age of our rooms since renovation by roughly 3.5 years, and our room age will continue to decrease over the coming years as we refresh our room offerings. The remaining CapEx in 2023 is growth capital, projects that include the Mandalay Bay Convention Center remodel, a new pedestrian bridge connecting The Cosmopolitan to Vdara, and investments in technology to drive better customer experience, ease, and engagement. Finally, on the development front, we expect to contribute $70 million to $75 million to BetMGM in 2023, and the only material investment in New York this year will be the $500 million license fee, depending upon the timing of the license awards. I'll conclude with just a few comments on our strategy for capital allocation. First and foremost, we'll maintain a strong balance sheet by sustaining adequate liquidity for our enterprise. And as you can see in the presentation posted today, we concluded 2022 with $5.3 billion of domestic cash against domestic debt of $4.5 billion. Our resources this year were bolstered by the disposition of The Mirage in December for $850 million in net cash proceeds after tax. Next week, we expect to close on the sale of Gold Strike in Tunica, which will bring in $350 million in net proceeds after tax. Next, we'll prioritize capital investment to deliver the highest return for our shareholders. Our acquisition of The Cosmopolitan of Las Vegas expanded our reach into the high end of the Las Vegas market. Our acquisition of LeoVegas jump-started our international iGaming strategy. Our new President of Interactive, Gary Fritz and his team are evaluating a number of opportunities in this area, and our shareholders should expect that we'll be deploying more capital to grow the MGM brand internationally in iGaming and in digital content development. Finally, we're going to return capital to shareholders. During 2022, we repurchased 76 million shares for $2.8 billion. Since the beginning of 2021 through yesterday, we've repurchased $124 million for a total of $4.7 billion and have reduced our share count to 375 million shares. We are not done. As Bill mentioned, our Board of Directors approved an additional $2 billion share repurchase program yesterday. In evaluating our share repurchase strategy, I consider several factors, including the liquidity profile of the company as well as the development and M&A opportunities that are before us. I also consider the free cash flow yield available in our own shares. So as I conclude, consider the following: adjusted property EBITDAR from Las Vegas last year was approximately $3.1 billion and from our regional operations was $1.3 billion. From that, we had adjusted domestic corporate expense of $400 million and cash rent of $1.7 billion on an annualized basis. Consolidated cash interest was $574 million, including $205 million related to MGM China. Cash taxes and domestic CapEx totaled about $750 million. Our company also has significant reservoirs of value that did not contribute cash earnings in 2022. This includes excess cash of over $2.5 billion, our ownership position in MGM China, which yesterday had an approximate value of $2.6 billion, and of course, our stake in BetMGM. It's a lot of numbers, but when taking all of this into account, I see a double-digit yield opportunity in our shares, which is why I see share repurchases as a responsible and accretive use of our capital. Bill, back to you.

Thanks, Jonathan. I hope the comments you've conveyed reveal the excitement that we all have towards our business this year and ultimately beyond. In all my time with the company, I've never been more excited about our present and future as I am right now. I think we're stronger, more agile, more focused, and more determined than ever to win. And with that, we're happy to take your questions.

And our first question will come from Joe Greff from JPMorgan. Our next question will be from Shaun Kelley from Bank of America.

Thank you for all the detail and color. So a lot of different places we could start, but I want to begin with a high-level, strategic question. Jonathan, you ended on walking through a really robust liquidity position, still a lot of cash on the balance sheet that’s either collecting interest at a better yield than before, but not a huge yield. So the question we get all the time remains kind of that ownership interest in upping the stake in maybe one of those areas that you discussed, BetMGM being the big one. We know there's a partner there, but if you could give us your latest thoughts around the strategic value there and how you fold that in with your comments about maybe a more organic or stand-alone international online expansion?

Thanks, Shaun, for the question. I'll just step in and give the first part of it because I think it's time to provide some clarity and direction. The simple answer on Entain is no, we've moved on. While we remain highly focused on BetMGM's business through our partnership with Entain and ensuring that business continues to grow, we see great potential in LeoVegas's expansion capabilities. I've said before, we like their technology platform and their leadership team. We're also interested in the content studio business; we think there's a real play there. We've seen that proven effective with brands when we combine great product with our brands at BetMGM. Over time, we like the live dealer business and the expansion of other global markets directly under our own purview. So for now, the answer is no, not within Entain. We're going to go down our own path, and we begin to allocate capital. We think Gary Fritz has the right motive, drive, and vision to help us lead this forward. We value the relationship with Entain and we value BetMGM, but regarding the rest of the world, we're moving forward with a different proposition.

And Shaun, just a couple of comments regarding capital allocation as we look forward. We do have a $1.25 billion maturity in March at 6%. The current plan is to redeem those bonds, which will capture about $75 million of free cash flow for the business. We were active in share repurchases just in the past three quarters. We spent almost $2 billion at a price of about $33 to $34 per share. We'll continue to repurchase shares, but we will moderate that depending on market conditions. And then, of course, we will fund what Bill described, which is our interactive ambitions predominantly through M&A, but we're reserving a significant amount of capital for those activities as well.

I don’t want to be greedy with my time here, but just a follow-up to stay on the same theme. Jonathan, you directly referenced M&A. Could you just give us some parameters around are we thinking more bolt-on options? Or are there still platform-level investments that could be made to drive up and expand that opportunity to be meaningful to the base business?

It's a combination of both. When you talk about the studio business or even live dealer, the technology aspect of that is relatively minor for our scale. When you're discussing stepping up to other marketplaces, whether it's South America or the rest of Europe, we will need to take a different view on that as these opportunities unfold. But for now, it's more bolt-on and relatively smaller investments.

And for the next question, we'll move back to the line of Joe Greff from JPMorgan.

Can you hear me okay now?

Hi, Joe.

Alright. Nice speaking with you. In Las Vegas, can you talk about how you're thinking about FTE count and payroll expenses and how they'll trend this year? Maybe you could break it up between both sort of on a same FTE basis as well as just wages. And what kind of revenue growth do you need to offset wage expense growth in Las Vegas? I’ve got another one.

I will open it and kick it to Corey. If you go back and you look at FTEs, particularly in Las Vegas against 2019, we're down anywhere from 12% to 15%, depending on the property. Obviously, wage inflation since '19 has crept up, and just so we're all on the same page, looking forward, we have substantive labor negotiations later this year with about 28,000 of our colleagues, which we're going to have to contend with.

From the standpoint of levels of FTEs, from a fixed cost perspective, there will be no increases; it will all be on a variable basis. Additional catering and banquet business would match that revenue component. But I think we're comfortable that we could service our properties and guests at the levels we have today. Jonathan, do you want to take the revenue point?

Yes, I think on the revenue growth side, if we're running now with occupancies that are basically full on the weekends. There's a bit of room during the weekdays. So revenue will need to come through pricing, rather than occupancy gains largely in Las Vegas. I think if that's in the low single digits, we should be able to adequately cover any increases in payroll.

Overall, we believe our margins will sustain, which is really the guide.

And then Bill, we're dealing with another earnings call and release today as well, so I want to make sure I understood your prepared comments; you talked about Macau being back that in the month of January, it led the company in profitability or something along those lines. Can you just explain that? Or give a little bit more detail on that?

Yes, I can provide a little color around it, and then we have Hubert on the line; these guys have worked hard at this for three years. So I'll let him talk a little bit about the business. The rebound was rather instant; on January 8, I think we peaked during Chinese New Year, making a little over $5 million per day. I mentioned in my prepared comments that we achieved a 16% market share. Our mass piece volumes were 100% over our '19 levels. Now, we're only talking about a 30-day period here. But for the company, particularly from where we have come from, we activated 150 to 200 new tables we have. We're very excited about what's happened in the first 30 days. And so Hubert, maybe any additional color would be helpful.

Sure. Thanks, Bill. Thanks, Joe, for the question. Since the beginning of the year, I think the market has been growing back and has exceeded the expectations of many participants and observers. For us, in January, on the gaming side, we have seen very healthy growth, above the market average recovery in both mass and direct VIP segments. For the month of January, as Bill has mentioned, our market share reached 16%, which is a record high for us. Our daily mass GGR was on par with the 2019 level for January during Chinese New Year, significantly exceeding last year's Chinese New Year level. We are also encouraged to see that the direct VIP segment in terms of rolling volume far exceeded the 2019 level as well. It is also very encouraging to see that the January run rate extended into the first week of February. Overall, we are very confident in a solid and sustainable recovery of Macau's market this year and beyond.

The next question will be from David Katz from Jefferies.

This is Cassandra on David's behalf. I want to expand on Macau's margins longer-term. As we think about the shift in VIP mix from junket to direct, I believe your competitors have also called out increased labor costs, some labor shortages, and increased utilities. So how should we think about the margins in Macau longer-term?

I'll pass this to you, but my initial comment is that everyone knows the junket business had a 20% margin. While it generated a lot of volume and contributed positively, it did not actually improve the margin. Hubert, would you like to share your thoughts on what might happen moving forward?

Yes. I think that in terms of margins, we expect this year and beyond to be at the high end of the 20s, but in the higher side of the 20s. In terms of the shift from junkets to direct, certainly, there are some conversions in that space, but it's too early to give you any concrete numbers. However, we are confident in the growth of the direct business, particularly given the extensive network of MGM Resorts in terms of global reach for high-end customers.

Great. And for the follow-up, if I may shift here on Las Vegas. There were a lot of very bullish or favorable comments. The ADR has been substantially higher than pre-COVID levels. Do you think that is sustainable? And looking beyond 2023, especially if we're considering a recession, how resilient do you think that ADR should be?

Yes, this is Corey. Yes, I think it's sustainable. As we look at the event calendars on weekends and our forward-looking pacing, as well as what we're booking rates at now, we have pretty good visibility further out. In the midweek, we see not only our convention business improving, but the whole city's convention business getting better. Thus, the pricing we're seeing today, we should be able to sustain, given where the economy is currently.

The next question is from Carlo Santarelli from Deutsche Bank.

Just looking at some of the disclosure in Las Vegas and trying to decipher what is kind of the delta between gaming revenue and your net casino revenue has widened in the last few quarters. I'm assuming that is kind of all mix related with Cosmo coming online? And is that kind of a range, that delta, that you think will hold firm moving forward?

Yes, Carlo, the answer to your question is yes. We had to go through COVID because obviously, the group segment of note went away. We are very active with our casino market, entertained marketing database, personalization, and other initiatives, and we've sustained it. Therefore, it's helped tremendously. Now, convention business is going to come back and carryout 18% to 19% of our mix this year. But I believe this is sustainable is the best way to think about the business.

Great. And then, Corey, just on that, on the topic of convention mix, you made a comment earlier that the bookings were done at double digits. If you consider the entirety of the group business on the books or the targeted group business from a pricing perspective, what does it look like year-over-year or relative to 2019?

Many of those contracts were in place over 2019 and 2020, and they probably feature price escalators. It’s probably an area of opportunity for us in the future as we look at future convention bookings. Just as a reminder, convention business accounts for 18% of our overall business. The new business is getting booked based on where rates are today.

Okay. Do you believe, when you consider it overall, that taking pricing aside, considering the visibility it provides, do you think looking through 2023 that, all things equal economically and from a macro perspective, there should be pricing power year-over-year on a same-store basis?

Yes, I believe there should be some pricing power based on the amounts we have on the books and the foundation we have in our bookings.

And remember, one thing we have strategically decided to do is push more business from weekends into midweek. That impacts overall ADR. While it may bring down the convention ADR, it raises the company's overall ADR since we have more opportunities where we see upside, particularly in the luxury segment across Cosmo, MGM, Mandalay, Aria, and Bellagio.

The next question is from Stephen Grambling from Morgan Stanley.

Maybe turning to Japan, that was another subject you referenced. You’re still awaiting some approvals, but still looking for a return that’s above, it sounds like your free cash flow yield. Please elaborate on any of your updated expectations for that market and anything that’s either changed regarding the transaction terms or timing of when construction could commence.

Yes, we need to be cautious as some of this information is confidential with the government. We had anticipated receiving feedback in October, but now it's February and we haven't heard anything. The current status is with MLIT, the government agency that is asking us about the project and the contract with the government of Osaka. It's uncertain if we can navigate through this efficiently in the next 30 days, but we remain hopeful. Additionally, I want to highlight the broader market outlook. I'm excited about the chance to be the sole player in the market, which opens up access to a much larger population than just 19 million people. It takes only 2.5 hours by high-speed train from Tokyo, which enhances our potential. Unlike other regions, inflation has not significantly affected Japan, and the fluctuating yen value is advantageous for us. Nonetheless, we are still looking at a $10 billion project that is expected to yield a cash flow return of 15% or more, but the project needs to progress. We originally aimed for a specific timeline, but we are now facing challenges to open the property before the end of the decade in 2029 if we don't hear back soon. However, we believe there is a path forward to achieve that.

That's helpful. Maybe a follow-up regarding BetMGM, just to ensure I understand your position correctly. Are you anticipating any additional capital being put into that JV beyond this year, given the targets for profitability or stand-alone at this point?

No, none substantively. If BetMGM gets into the M&A business for some particular product, perhaps. Generally, no. It’s approximately $50 million collectively, but call it our $35 million or $45 million we've identified. It gives us every reason to believe it should hit its target this year, perhaps beginning to reach profitability in the second half of the year. We must also act rationally in this regard. There is potential for growth, with six additional states identified for entry. However, there are no large-scale capital investments planned. The business is expected to stabilize and sustain itself.

Next question is from Chad Beynon from Macquarie.

Bill, Jonathan, another question on Vegas. Given your diverse portfolio, can you help us think about how these segments compare against each other in 2022? Bill, I believe you said a lot of group events and the city-wides in '23 should help with the luxury segment, but I’m curious which segment is growing more noticeably?

I think Corey, you’re best suited to answer that.

Yes. In 2022, the majority of the growth here in Las Vegas was driven by the Bellagio, Aria, Cosmopolitan, and the MGM Grand. Mandalay Bay had a fantastic year as they capitalized on returning group business to Las Vegas. For example, in Q4, our group room nights were up about 50% compared to the fourth quarter of 2021. So the growth is skewed towards luxury properties. However, from a portfolio strategy perspective, all of these properties have key roles; we have invested capital in Luxor over the last year. We are currently renovating rooms in New York-New York. We expect these businesses to be solid cash flow generators for the next several years, but it's clear the luxury segment is leading growth.

Can you elaborate on the omnichannel opportunities with driving your players from BetMGM back to Las Vegas, given it's likely one of the more important years for your players wanting to come out and enjoy some of the events? Where does that stand now, and how should it progress in '23?

The short answer is more. When I say that, it’s now becoming thousands of players that have touched both brands. Interestingly, the combination of the two leads to the players spending about 40% more. While this seems intuitive, 40% more is notable. Additionally, many players attending sporting events are below 49 years old. This network and combination attract a younger demographic who already demonstrate greater spending when combined with both the brick-and-mortar and digital activities. We are now reaching thousands of these guests. We’ve established an elaborate CRM system, both at BetMGM and ultimately, a hosting program here that caters to our VIP players’ needs and desires. We find that treating this network like we would any of our branch offices means when the phone rings and they have someone significant reaching out, we’re set up to accommodate them. We're excited by it. In the long term, we need to automate further to ensure true connectivity between the BetMGM and the MGM Rewards system. However, for now, we’re focused on the high end concerning spend, use, and numbers, which all look promising.

The next question is from Robin Farley from UBS.

I wanted to ask a little bit about the breakdown of same-store gaming revenue in Vegas being down about 10%. I believe it was down slightly in Q3 as well. I wonder if you could offer some context regarding the gaming consumer over the last two quarters. Is that due to fewer trips year-over-year because there are more options in the world? Or is it just lower spending per trip? Or what might be driving this behavior?

We've seen same-store handle and drop and win grow modestly in Las Vegas. Although the majority of the growth that we've seen on a same-store basis has been on the hotel side. The gaming customer remains healthy here in Las Vegas; it's driven primarily by our higher-value gaming customers, but remains strong.

Are you suggesting that the declines are coming from the higher-end gaming players, or are you referring to a wider market player with the same-store decline?

What I'm referring to is that our slot handle and table game drop and win are increasing on a same-store basis.

I was relying on your slide showing casino revenues down 10% on a same-store basis in Q4. I recognize there were some adjustments in properties, but I used the slide's figure.

Some of that will be on a net basis after accounting for the cost of hotel rooms that are comped against those players. That impacts what we’ve described as gaming revenue. But regarding the health of the gaming customer, I believe it's best described by the volume metrics and gross gaming revenue, which are growing on a same-store basis. Does that make sense?

Okay. That clarifies things; it’s helpful. I was just curious, given the strength of your liquidity and cash position, and what you have occurring, why did you suspend the dividend? I realize it was only a small amount remaining at this point, but I’m curious why you suspended that when liquidity isn't an issue?

Yes, it’s not a liquidity issue. It was mostly an administrative aspect. It was burdensome and complex. Given the size of the dividend itself, which was minimal in comparison to how much capital we've returned and continue returning in the form of share repurchases. We determined it was a practice we did not need to continue. That doesn't mean we wouldn't reconsider it or our Board wouldn't reconsider it at some future point. If that happens, we would aim to make it a more substantial dividend than a nominal amount, but it was mostly an administrative fix.

The next question is from John DeCree from CBRE.

Maybe just a quick follow-up on Robin's question regarding casino revenues. Just to clarify, with the higher ADR now essentially, the dollar amount that you need to net against casino revenue is what's driving that accounting decline?

Yes. That indeed is the major issue driving this topic and our discussions here. It's not just the ADR, but also the size of the casino segment overall.

Understood. Thank you for that clarity. For a follow-up question, bigger picture, I've recognized the growth targets are clearly defined; you target digital international, all while you’ve successfully upgraded the asset base in Las Vegas and divested Gold Strike. I’m curious how you feel about the domestic portfolio currently, both regionally and in Las Vegas. Are there potential opportunities you might consider on the M&A side? We’re aware of plans in New York and if other major markets were to open. But regarding M&A, whether buying or selling, is there anything you may consider or that makes sense?

Let me take the lead. We have genuinely enjoyed the portfolio we have, particularly in Las Vegas, where we own approximately 40% of the market; we love our properties and their positioning. The developments at the south end of the strip, particularly via Allegiant, have been productive. In terms of our regional efforts, we are in a different arena, where markets such as Detroit, Atlantic City, and Mississippi are dominating. We aim to tie our product offerings from integrated resort to integrated resort to attract the right customers to Las Vegas. I wouldn't say no to any M&A acquisition opportunity; there’s always a potential asset of interest. However, I don’t believe we have immediate plans or designs for any substantial acquisition today. Our growth is likely to come from the development opportunities we’ve identified and the digital opportunities that we've established for the future. Yes, we've always kept an eye on the market, but there’s nothing specific to report at this moment.

Fair enough. Thank you for your engaged strategy; I appreciate it.

And the next question is from Barry Jonas from Truist.

Given the strong strip outlook for 2023, is the high end of the 400 to 600 basis point margin expansion the right place to suggest how the year could unfold? Or could we increase further? Also, can you remind me what the starting point is here? Is it the reported pre-COVID 2019 number or based on a pro forma portfolio?

When we reference that 400 to 600 basis points sustainable margin improvement, we're referencing the 2019 year. We're confident that across all of our domestic properties, we can be within that range or potentially exceed it. Any exceedance will likely be driven primarily by our pricing environment, but we’re comfortable within this range, which references the 2019 data.

Great and a follow-up. Regarding iGaming, we're observing a more significant push from the industry. Can you discuss the impact of iGaming on land-based gaming? Not sure if you can quantify what you've seen recently in Michigan, but can you help us understand the dynamics involving potential cannibalization?

Sure. Michigan is the best example where we separate market-leading brick-and-mortar and digital segments. The digital business has outperformed brick-and-mortar by about 25%. Both segments are doing well above $300 million GGR; the digital approach is nearing $400 million in GGR. The scenario is interesting here as it has dealt with the smoking and nonsmoking preferences. While there were early worries concerning the middling last year, we have seen allocations for smoking and some smoking opportunities for those customers since the significant COVID restrictions have been lifted. Our numbers have not only stabilized but have grown in Detroit. While there's certainly a subset of play occurring in the digital, the chance to connect that with brick-and-mortar and ultimately ensuring reward recognition is critical. Aspects like bonusing or jackpots left at home can be picked up in our brick-and-mortar locations, facilitating a continuous experience for our players. We believe it is advantageous for us and feel confident in translating this approach to any other states.

The next question will be from Steven Wieczynski from Stifel.

I want to discuss your regional assets. There is concern in the investment world that consumer activity could slow down. However, we heard from peers there has been no noticeable softness. I’d like to understand whether you've experienced the same fundamentals—no real weakening? Finally, margins were affected by the inclusion of nongaming amenities in the quarter. To what extent could potential margin pressure arise back in the digest?

Let me address that. We have varied regional properties, and so Michigan had an all-time record this year. It surpassed our expectations, and it was tremendous. We always envision that property would exceed $300 million, and it did! I may receive some dirty looks from some of my staff, but it’s worth noting. Atlantic City has faced stiff competition, and the return of Hard Rock and what happened to Ocean made for a competitive atmosphere, yet we’re holding our ground there. The property continues to generate cash flows consistent with historical trends despite the competitive rejuvenation. Detroit, as mentioned, is thriving. We experienced slight softness with Empire in the wake of COVID. Springfield has continued to enhance. Naturally, we anticipate that the first area to reveal signs of recession would be our regional properties. However, especially through January, we haven’t seen any weakness to date.

Yes, on different regional properties—primarily in the third quarter, we augmented our nongaming amenities. I believe we are positioned such that we are comfortable with what we offer our guests. Thus, additional margin pressures are not anticipated in relation to that. Indeed, December had a slight dip as Bill mentioned, but what we’re seeing in January and February thus far is that all regional markets are performing remarkably well.

That’s great to hear! If I may pivot back to Macau—Bill, I believe you indicated you made approximately $5 million per day during Chinese New Year. Was that statement accurate?

Yes, I stated we had around $5 million daily during Chinese New Year, but that was exclusive to that occasion. However, we found that our operational results post-holiday have also been very positive. But Chinese New Year remains a unique event that occurs once a year.

Thanks for the clarity, guys.

Our next question will be from Dan Politzer from Wells Fargo.

First question, just on Macau. This is a two-part inquiry. The 16% share you referenced, to what extent do you feel that is sustainable? If you could parse that out and describe how much of that step-up stemmed from growth in mass, premium mass, or direct VIP compared to pre-COVID levels? Additionally, your comment on MGM China properties being the highest-earning business in the company—should I interpret this as them pacing over $100 million of EBITDA in the first quarter?

No, that was for the month, not the quarter. So if we combined them, they would represent the highest EBITDA property for the month within our system—just a way to think about it. Hubert, you can address the sustainability of market share.

Yes, regarding market share—it is too early to provide a definitive answer about sustainability. However, we have several factors favoring us; we secured 200 new gaming tables as part of our updated gaming concession and are currently in the process of deploying those alongside some graphics updates to our casino floor. We plan to fully deploy all these tables by the end of the first quarter. Additionally, as part of our retendering commitment, we have numerous investment projects expected to generate significant returns. Also, our performance in terms of nongaming revenue for Chinese New Year was impressive—our hotel occupancy approached 100%, and our restaurant output exceeded our 2019 levels, thanks to various events and concerts driving increased visitors. The length of customer stays has also improved. We believe these investments in nongaming amenities will assist with sustaining our market share moving forward.

Got it. And for my follow-up, this is for Jon. On the buyback pace, you have the new $2 billion authorization; trends look stable, if not outright encouraging. To what extent would you feel comfortable disclosing a quarterly buyback rate? I recall that in the last quarter or perhaps a couple of quarters back, you mentioned a decelerating pace of buybacks. Given the outlook on Vegas, is there a run rate to consider here?

I don't want to provide a specific quarterly pace. You can examine our pace over the previous four quarters; we did implement a more aggressive buyback in the fourth quarter compared to the third. I believe I communicated during my remarks the value we see in the shares. Despite the various opportunities before us, the company's liquidity position will allow us to remain active in share repurchases. Beyond that, Dan, I prefer not to set any specific outlook.

And our final question will be from Jordan Bender from JMP Securities.

Can you discuss the contribution from Far East play during the quarter in Las Vegas? Additionally, what do bookings from Far East play look like for this point this year?

I can provide clarity on the Chinese New Year numbers effectively. Last year, we booked about $35 million from Chinese New Year; this year, just under $100 million. The opportunity this year was approximately three times that of last year. Although still not at '19 levels, it is significant.

Regarding Far East play, it increased by approximately one-third compared to Q4 of 2021, which contributed almost all of the growth in our international play during Q4. This trend is very promising.

Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Bill Hornbuckle for any closing remarks.

Thank you, operator. I want to extend my gratitude to everyone for joining us today, especially given the late hour on the East Coast. Just a couple of thoughts: We continue to showcase organic growth in Las Vegas, particularly in our premium product and luxury brands. The Aria and Bellagio properties generated over $1.2 billion in cash flow last year, and we hope to maintain that momentum. Our Macau performance is improving, with the addition of 200 gaming tables this year expected to make a difference. Lastly, we have our development pipeline and both our brick-and-mortar and digital ventures. I would convey that, without disparaging comments toward competitors, we see ourselves as the most well-balanced and prepared for growth compared to others. We hold no net debt, and our cash liquidity stands at approximately $5.3 billion. Jonathan and I have purchased over 25% of our company shares since taking on senior roles. All of this is due to the incredible team we've developed over many decades across various jurisdictions. To say I'm excited about our future would be an understatement. I appreciate your attention and support. Thank you.

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