Good morning, I'm Ricardo Chinchilla. I'm Deutsche Bank's Gaming, Lodging, and Leisure analyst. Thank you so much for joining us today. We have here today, Jonathan Halkyard. He is the CFO from MGM Resorts. We are gonna host him for a small fireside chat, and, you know, hopefully, this add value to you guys. Jonathan, thank you so much for coming. Thank you. Very good to be here. Good morning, everyone. Before we start, you know, with, you know, MGM-specific topics, I would like to ask you if you have seen a difference in casino patrons' visitation and spending patterns over the last three months. Also, if you could provide some color on the performance of the different segments of the business, more specifically, if you're seeing any material difference between the high end and the low end, that would be very helpful. Sure. You know, the visitation patterns are always changing in a place like Las Vegas, particularly when you look at just a three-month time period. We certainly started out the quarter, Las Vegas did, with a pretty difficult July. Everybody saw the gaming revenue numbers that came out from the state, with gaming revenues down about 15% in July. Now, there were a number of reasons for that, including some calendar issues, as well as some hold issues, and we certainly experienced that, like others in the market. I would say that, you know, visitation to the market has been stable. Of course, the types of segments that are coming to the market really depend in many ways on what the circumstances are in the market in terms of special events and sporting events and the opportunity for businesses to come to Las Vegas. And over the past several months, you know, those visitation habits have been pretty stable. Occupancy remains strong in Las Vegas, and it's just one of the benefits of the market, that it appeals to so many different segments. And a company like MGM Resorts, we appeal to all the segments as well, and so if we have weakness in one, we can migrate demand to our other segments. Got it. I'll, Lewis, I'm sorry. I neglected to mention. You mentioned luxury versus- Correct ... others. You know, our company's growth has certainly been driven in Las Vegas over the past couple of years from the luxury segment. Now, part of this is because that's where we've devoted our resources. We've invested capital into growth projects in our luxury properties. We've, of course, acquired the Cosmopolitan in Las Vegas. You know, but I would say over the past six months or so, there really hasn't been a huge differentiation between the growth in luxury versus what we call legacy or more of the economy properties that we have. I want to continue with BetMGM before I take you on a tour to all the jurisdictions in which you guys operate. The company has characterized 2024 as an additional investment year for that entity, and 2025 as the year to focus on profitability. Can you please provide some color on the product improvement that BetMGM has introduced this year, and any potential additional investments from MGM to the JV, if it needs to be, and maybe the puts and takes to achieve profitability next year? Sure. That's quite a question. There's a lot going on with BetMGM. Now, you know, BetMGM in 2023, 2022 and 2023, was really about building the business, expanding into new states as they legalized online sports betting, in particular, acquiring some new technologies, and, in this case, Entain acquiring Angstrom. We demonstrated the company was able to deliver profitability late last year, but we also saw some market share declines, which were a bit concerning to the management team at BetMGM. So 2024 is, as you noted, really a year of investment for BetMGM. Investment in technology, which I'll come back to in a second, and also investment in customer acquisition and retention. We've made great progress this year at BetMGM on all of those fronts. Just at the end of August, we launched what we call Single Account, Single Wallet. This is a really important technology, and basically, it enables BetMGM customers to have one account with their funds in that account, and use it across multiple jurisdictions. The reason that's important for BetMGM is because, unlike most of our competitors, we have a meaningful presence in Nevada. We have 12 million room nights occupied a year in our resorts in Nevada, and this is a really important customer acquisition tool for BetMGM. And now with Single Account, Single Wallet, it means that when you open an account and deposit funds at our resorts in Nevada, you can then go back to your home in Denver or in Indiana and continue to engage with BetMGM. So it's really leveraging that customer acquisition outlet that we have in Nevada with Single Account, Single Wallet. The other technology advancement the company's made is integrating this Angstrom technology, which is essentially pricing, the ability to price single-game parlays and other parlay products for our customers. It's something that they like. It's important business for BetMGM, and that is really. It was really introduced into our stream back in May, and now with football season, is a pretty important part of the product offering. So twenty. Going through 2024, we do hope to stabilize market share, perhaps grow market share, and then in 2025 and into 2026, see BetMGM return to profitability. ... Got it. Let's start a journey through the different jurisdictions in which you guys are operating or that you are, you know, that you want to operate. In Macau, you know, the company continues to deliver very good results, and you guys have a very solid market share. Are you seeing an uptick on an already promotional market in terms of, you know, with regards to your competitors seeking to regain share? Is the promotional activity impacting your flow-through, or is it more related to, you know, concession-related OpEx that it's, you know, that has hurt your flow-through in the past? Well, you know, MGM China, our two Macau properties, I think have just had exceptional performance in the last couple of years since we've come out of the pandemic. Maybe I shouldn't say exceptional, because it's certainly much better than before the pandemic, but it is the kind of performance that we've come to expect from that business now. Despite the fact that we only have about 12.5% of the tables in the market and under 10% of the suites in the market, these businesses have pretty consistently delivered market share in the mid-teens, and we expect to see that continue, and margins in the high twenties. That's without the benefit of some of the intense high-end retail that some of our competitors have that operate at very high margins. Actually, first of all, I just consider that right now, our businesses in Macau are performing at a very high level. We have not seen any real uptick in promotional activities, nor have we engaged in that, other than what I consider to be some pretty smart moves by our local management team there to introduce offers and products that our customers really like, that are not particularly expensive, but keep them visiting us and on property. I think our market share in the mid-teens, margins in the high twenties will continue. Your other question about retendering related OpEx. Really what we're experiencing and investing is our capital investment commitments that we made in connection with the retendering. So these are nongaming generally. And we have over $200 million of CapEx approved for this year in investments that are designed to meet the commitments that we made when we secured the retendered license. And so that will continue on into 2025, perhaps not quite at that level, but that's, you know, that's probably been the most impactful, you know, consequence of the retendering is on the CapEx side, not the OpEx side. Perfect. You know, moving to Japan, you recently mentioned that the construction is still expected to start in the summer of 2025, this part of the World Expo, that completing the property's foundation will take three years, and that the resort will be completed by 2030. Given the elongated construction timeline, can you please provide us with some color on the company's financing strategy for the $2 billion equity contribution to the project? And, you know, perhaps some color on when the funds will be contributed, given this timeline. Sure. Well, this is a really good question because I was in Japan last week at our site. I hadn't been there in almost two years, and it was an important time to go. We'll talk about the financing in a second, but we did complete our bank financing back in March, and I wanted to make sure that I, along with our local team, remained in good touch with our banking partners there. But I had been there two years ago, and at this time, the site where our property is being built, there wasn't a lot going on there, including preparation for the 2025 World Expo, which is in Osaka, and land adjacent to where our integrated resort would be. Now, I'm sure there was a lot of work going on that was not visible to the eye, but at that point, there wasn't much visible to the eye. Well, I went last week, and I can tell you that is not a concern anymore. The World Expo is a massive, beautiful project that is going up right next to where our integrated resort will be. It opens in the spring, and it'll be there for six months. And it's important because that project provides the World Expo, that is, some of the infrastructure that will be important for our integrated resort, transportation and site improvements and the like. You're right, we are going to officially break ground next May, but the work has already begun on the site for various site preparation. You'll, you know, if you were to go there, you'd see our general contractors on-site, beginning to do the work. You asked about the financing. We do have a JPY 530 billion credit facility with Japanese banks. Very attractive pricing that we completed back in March. Our equity commitments have. Our equity investments have already begun with almost $200 million this year. Over the course of the next four and a half years, we'll be investing just over $2 billion into the project, together with our partners, ORIX and minority investors. At that point, we'll begin to draw on the credit facility, and that'll be in 2028, 2029, through the completion of the project and opening in 2030. I'm trying to see if I got all of your questions. Is that sufficient? That's perfect. Thank you. Yes. Let's move- I will just- Mm-hmm ... Note, I think this project we think represents the single best development opportunity in gaming globally right now. It is a massive market with 30 million people within a three-hour rail trip to Osaka. There's already a multi-billion-dollar pachinko racing and gaming market in the Osaka area. It's also an area that's closer to Northern China, Beijing, and Shanghai than is Macau. And of course, we have a very strong business in all of those areas. So, and we have the right partners in ORIX and a very supportive local regulatory structure. So while it's a few years off, there's, I think, no better opportunity. It's a generational opportunity, in our opinion, for an integrated resort. There ends my commercial. Going back to New York for, you know, just a bit. Can you please provide your updated thoughts on the timing of the process of the licensing awarding process, and remind us, you know, how much is the company going to spend in the expansion? Sure. I'm sure the folks here are probably familiar with our company, but we're already in business in the State of New York with our Empire City Casino up in Yonkers. It's a very successful property, and we're enthusiastic about expanding that property for a number of reasons. It has been frustrating how this process has unfolded and been extended. If you had seen my long-range capital plan back in mid-2021, you would have seen a license fee for New York coming the following year, maybe early 2023. It's gotten pushed and pushed, and right now, you know, for our planning purposes, we're expecting licenses to be granted toward the end of 2025. Assuming we prevail in that process, then we'd be investing in 2026 and 2027. The magnitude of our investment would be approximately $1.5 billion, and plus, we presume, about a $500 million license fee. Now, that, that's a significant investment, no doubt. But one important thing to remember is we could expand our current facility well, not even expand, repurpose our current facility very quickly to accommodate table games while we're under construction, to expand the facility, build a parking garage, expanded casino, a theater, et cetera. Assuming that, you know, New York allowed us to do that. But the fact that we already have a large facility, that we're in business, we have a large business, great access, we could, we could be in the table game business very quickly, even while we're under construction. And I think the returns on this incremental investment of $2 billion will be in the mid-teens. And in terms of financing, I think we have a number of opportunities to do so, including potentially, maybe I should speak to David Kieske, he's here, potentially VICI or other, you know, or other ways of financing this expansion. Perfect. You know, MGM is advising Wasl Hospitality and Leisure on the development of an entertainment destination in the UAE, and has recently filed its casino license application in Abu Dhabi. Can you please comment on the opportunity that the UAE represents for MGM? We think it could be a very good opportunity for our company. As you noted, we have a project under construction with Wasl in Dubai right now. Now, it's a non-gaming project, but it features three MGM-branded hotels, an MGM Grand, Aria and Bellagio. It's under construction right now and is moving very swiftly. And that development does have roughly 200,000 sq ft podium reserved for retail or convention or meetings, or conceivably gaming, if gaming is legalized there. So it's a huge potential market. It's one where our brands resonate. We have very good relationships and partners in the UAE. So, you know, we're watching it closely, and if there's an opportunity there, I think you can count on MGM Resorts being involved in some way, or at least attempting to. Perfect. You know, MGM and Grupo Globo recently announced the formation of a new venture to seek sports betting and iGaming license in Brazil. Can you please provide some commentary on whether you expect the license to be awarded? And, you know, the potential investment into this JV and perhaps even, you know, quantify the size of the opportunity for MGM to be in Brazil. Sure. And, you know, I just, as you were reading the question, sorry, I did want to clarify that this project I described in Dubai for MGM Resorts, that's a management deal. So there's no capital required by MGM for that multi hotel brand development I described. So Grupo Globo is a very important media company in Brazil, and we have partnered with them to enter the Brazilian iGaming market, and we think they're perfect partners. It's interesting, this partnership is in a way a bit the opposite of the partnership we have with Entain for BetMGM. In that, in the JV with Grupo Globo, it is, it's MGM that's providing the technology, and Grupo Globo, who is providing the customer acquisition, basically, the funnel and the brands, and so on. This is a, you know, it's already a multibillion-dollar market. We've filed our license applications. We expect those to be awarded in January. It will be a competitive market, no doubt, but it will be a huge market. And we think that with Grupo Globo, with Globo, they're the perfect partners to introduce our, you know, our product to customers down there. The investment will actually be very modest, as compared to really any of the other deals that we've done in the digital space. Our investment in BetMGM, our acquisition of LeoVegas, and Push Gaming, and Tipico, those will all be much greater than I expect our commitment will be to the Globo JV. So it's already formed. We're recruiting the management team. We've filed our licenses. We expect to be granted those in early 2025, and then with our technology and their customer relationships, we'll be off to the races, so to speak. Perfect. You know that regulators will remove my gaming analyst license if I don't ask you about M&A, so apologies for that. That said, can you please comment if there has been any change in the M&A environment, and if the company has changed its view on a potential larger scale M&A in the digital space, given the strength of the company's balance sheet? Well, I hope you wouldn't lose your gaming license if you, or your research license, I guess, you were going to ask that. I, you know, not too much has changed, except really just developments with the company, so for example, on the digital front, you know, we set out two years ago to build our own wholly owned digital business in addition to our U.S. joint venture with Entain. And we knew that that would require distribution, product, and technology, creative game design, basically, and through the acquisitions of LeoVegas and subsequent investment in LeoVegas to enter other markets, with the acquisition of Push Gaming, which is a content studio, and then finally, the Tipico technology platform for sports betting, we think we've really done that now. We've built the important component parts for a wholly owned digital business. I'm recognizing that will all be for operation outside the United States, augmented by things like the Globo JV, et cetera. So I don't think, to your question, there is going to be a large scale digital M&A action for the company for a while. Because right now, we're very busy with LeoVegas doing the, you know, their market expansions, eventually integrating the Tipico technology. It's LeoVegas that's actually kind of doing the Globo JV, so we're using that company as kind of the vehicle for our growth in this area. So, and then on the domestic front, you know, we've acquired the Cosmopolitan, we sold The Mirage. We had a really attractive opportunity to sell the Gold Strike in Tunica. There's really, I don't think, much additional supply that we... Or product that we need in Las Vegas. And as it relates to the regional markets, you know, there are not many regional assets that would meet important criteria for M&A for us, meaning they would have to be in a new market. It would have to be a sufficient level of quality for our brands, and it would just have to be big enough to make a difference. And there's just not that many U.S. businesses that meet those three criteria. So I doubt there's going to be much acquisition activity by MGM Resorts in the U.S. Our, you know, capital allocation really going into the future, will be oriented towards digital and, of course, our international IRs. You just mentioned, you know, that the company has done the acquisition of the Cosmopolitan, but also they have, you know, sold The Mirage and the Gold Strike. Is there anything else that you're looking at across the board in your regional portfolio that you would consider non-core? Any regions where you potentially would like to, you know, perhaps get the portfolio a little bit more tailored? It's possible, but you know, our regional properties are virtually all market leaders. They are large businesses that represent our brand well, and while not really the hub and spoke system that I worked with years ago when I was at Caesars, where the regional properties really fed the Las Vegas properties, you know, these businesses in the regional markets are all really important contributors in their own right. That being said, if we had an opportunity like we did in Tunica, to sell a property at a very accretive multiples compared to our trading multiple, and redeploy that capital into digital investment or share repurchases or debt retirement, you know, we would certainly look at doing that. Perfect. Management recently mentioned that the company's financial policy comprises a minimum liquidity threshold and lease-adjusted leverage to be below four and a half times. How much incremental leverage would you guys consider, you know, in case the companies handle an opportunity to, you know, do some transformative M&A? Or if, you know, you guys get a new development opportunity, maybe Thailand, for instance. You're right. We do have a financial policy that we presented to our board and we revisit from time to time with them for ratification, and it has a number of elements, but two important ones are our minimum liquidity threshold of $3 billion, including our revolving credit facility and a maximum lease-adjusted leverage of 4.5 x, so right now, we're well within both of those constraints. The reason for the liquidity cushion is because, you know, our company does have a significant lease structure, having sold the vast majority of the company's real estate to Blackstone and VICI and others. I think it's important for us to have a bit more liquidity on hand than we might otherwise, since some of the tools are not available to us that might be available to other issuers. In terms of your question about how much additional leverage we would take on, that really depends upon the use. If it's for a, you know, immediate cash-generating M&A deal, for example, where we thought there was synergy or ability to grow, you know, we would take on additional leverage for that. I don't think we'd need to go above four and a half x, or certainly not for long, because a full turn of leverage by that definition for us is $4 billion of debt. So we... But if it were, on the other hand, for a development project that would require investment with cash flows to come well into the future, I think we'd be more cautious in that regard. And as it relates to Thailand specifically, our current thinking now is that we'll actually we would if we do a Thailand development, that would actually be done on the MGM China balance sheet. MGM China, some of you may be familiar and even invested in those bonds, but that's a business that, because of its performance, is rapidly delevering and has, you know, will have, I think, additional debt capacity in the next few years. And so that's our current thinking as to how we might approach a Thailand development. Perfect. Does MGM aspire to achieve IG rating at some point? I doubt it. Aspire, sure, but I don't think that that's in the cards for MGM Resorts. We speak to the rating agencies frequently. That's the way I learned twenty years ago, and those are relationships that are very important and we maintain those. I also think that due to the lease liability that we have on our balance sheet, that it's unlikely that even in what I think is a pristine situation right now, with net debt of only $1.2 billion and the liquidity that we have, I just think with that lease liability, it's unlikely that we would meet their criteria for Investment Grade. Got it. You know, turning to the company's capital structure, do you see the mix between fixed and variable debt changing in the medium or long term for the company? In a way, but not much. I mean, as we, you know, we have only fixed rate debt. We have an undrawn revolving credit facility, which is floating rate debt. So it could, to the extent we draw down on our revolving credit. Also, as we begin, eventually, as we take down the facility on the Japan project, that will be floating rate. We'll fix some of that. But no, I think, you know, I think this is a business with a pretty straightforward capital structure, and that it is the vast majority of the debt is fixed rate, and the rest of our financial obligations are our lease payments, which have escalators capped at 2%. It is, you know, a pretty predictable capital structure, I guess, is what I'd say. Perfect. I think that we are running out of time. I really appreciate you, you know, coming to the conference and speaking with us. It has been great, and I'm pretty sure that the investors are as grateful as I, as I am. Thank you, Lewis. I appreciate it, and I thank you for everybody's attention.