Q2 2024 MGM Resorts International Earnings Call
But more exciting.
Good afternoon, everyone and welcome to the MGM Resorts International second quarter 2024 earnings Conference call.
Joining the call from the company today are Bill Hornbuckle, Chief Executive Officer and President.
Corey Sanders Chief operating officer.
Jonathan I'll Kerr, Chief Financial Officer and Treasurer.
Gary Fritz President of N G M interactive.
And at the same executive director and President of MGM, China Holdings Hubert.
Speaker Change: Hubert why CLO and President of MGM, China Holdings, and Andrew Chapman Director of Investor Relations.
Participants are in a listen only mode.
After the company's remarks, there will be a question and answer session.
In fairness to all participants we do ask you to please limit yourselves to one question and one follow up.
Speaker Change: Please also note todays conference is being recorded.
Speaker Change: At this time I'd like to turn the floor over to Andrew Chapman.
Good afternoon, and welcome to the MGM resorts International second quarter 2024 earnings call. This call is being broadcast live on the Internet at investors on MGM resorts Dot Com. We have also furnished our press release on form 8-K to the SEC on.
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.
As required by law, we undertake no obligation to update these statements as a result of new information or otherwise during.
During the call. We will also discuss non-GAAP financial measures when talking about our performance.
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 rewarded and now I'll turn it over to Jonathan.
Thanks, Andrew and good afternoon, everyone before I get into our quarterly results I would like to congratulate and thank all of our employees for another great quarter across all of our businesses.
Jonathan: Their high level of execution is clearly evident in our results and I couldn't be more proud of the team for our performance this quarter.
Turning to our second quarter results in Las Vegas, we achieved both top and bottom line growth year over year against a strong comparison net.
Net revenues grew 3% driven by both higher rate and occupancy our strategic relationship with Marriott contributed to our performance. This quarter now with over 410000 rooms room nights booked room nights booked.
The future for hotel bookings in Las Vegas, as bright looking ahead at our pace room rates on the books in Las Vegas are up year over year for every month in the third quarter and group rooms on the books are pacing up mid single digits for the rest of 'twenty 'twenty, four and 'twenty 'twenty five.
Our success in the quarter was underpinned by our luxury resorts, which are responsible for the vast majority of our topline growth in Las Vegas, we invest meaningfully in our strip luxury offerings and this is where we see the most opportunity for profitable growth in fact, 75% of our 2024 domestic property capital budget will be folk.
Just on these properties. This includes room Remodels, which are underway now at the MGM Grand and sweet updates across our Las Vegas portfolio on the technology side. We've now completed the integration of the cosmopolitan of Las Vegas into our M. G. M rewards program, which will now allow our M. G M rewards members.
Jonathan: To enjoy the full benefits of the cosmopolitan and vice versa.
In the regions net revenues remained stable driven by relatively flat year over year handle with our market share holding steady across each of our markets. We also have seen a full recovery at MGM Detroit.
Speaker Change: We all know it faced headwinds since midway through last year.
Speaker Change: Margins were within our targeted range of the low thirties, as we remain vigilant on improving our variable labor effectiveness and executing on revenue initiatives such as our expanded air Charter program just one of many examples.
Speaker Change: In Macau MGM, China's net revenues grew 37% year over year, achieving a market share of 16%.
Speaker Change: Adjusted property EBITDAR reached $294 million for the quarter, marking a 40% increase with margins at 29%.
Speaker Change: During the quarter, we strengthened MGM China's balance sheet by extending our maturity profile with the issuance of a new $500 million seven and eight notes due 2031. The proceeds of this offering were used to pay down outstanding borrowings under the revolving credit facility.
Speaker Change: And generating a growing dividend from MGM China.
Speaker Change: Next we anticipate generating free cash flow from our digital businesses in the coming years as Beth M. G. M reaches an inflection point and Leo Vegas delivers on its numerous market entries will also be investing for long term growth in Japan, and other markets, where our development expertise and brand awareness provide a distinct advantage.
Speaker Change: Lee will repurchase our own shares through our strategy of using excess cash for share repurchases. Our share count has decreased to around 300 million shares from close to $500 million and approximately 40% reduction in our float in just three years taken together the increase in free cash flow and reduction in share count.
Speaker Change: Would result in a mid teens free cash flow per share compound annual growth rate by 2028, even without the contribution from M. G M. Japan Bill over to you. Thanks.
Speaker Change: Thanks, Jonathan and good afternoon, everybody I'd like to start by doubling down on Jonathan's comments on congratulating all of our employees. The continued attention to detail and guest service has been amazing and it continues to show through in our NPS scores and also just take a second to identify and thank our management teams into a.
Speaker Change: <unk> wage inflation environment, I think you've seen through our margins they've all done a great job managing their way through the first part of 'twenty 'twenty, four and I'll remind everybody that most of those increases now lapse as we go into the second half of this year.
Speaker Change: Turning to the quarter, we had excellent results against a strong 23 comparison.
Speaker Change: We see continued strength as Johnson mentioned in Las Vegas, driven by transient and group demand. The married integration is going exceptionally well and Mandalay Bay is fully leveraging on its updated space MGM, China continues to hold its market share and margins against the very competitive and evolving market and our regions continue to hold top line.
Speaker Change: And operating efficiency and it's great seeing Detroit finally returned to its earlier, our prowess in that marketplace post strike and Oh cyber last year.
Speaker Change: In Las Vegas.
Speaker Change: We believe Las Vegas growth can continue its topline and maintain margins in the mid thirties group pace as mentioned is up in 'twenty four 'twenty five anchored again by the refresh space at Mandalay benefits from the Marriott program will only continue to increase particularly on the group side unique to M. G. M. We have a favorable supply dynamic with the close.
Speaker Change: <unk> of the Mirage and Tropicana, taking approximately 1.5 million room nights off of the circuit.
Speaker Change: Again, we will see lower years, two through five labor contract increases and organic same store growth driven by further database optimization is just stepping in particularly now with the integration of the cosmopolitan, which we finally got on yesterday. So we're very excited by that noting in the third quarter I think all of you know this but.
Speaker Change: <unk> back we had the cyber attack last year in the third quarter and that should.
Speaker Change: Proved to be.
Speaker Change: Successful forest, however, in the fourth quarter and I think many of you see this through our room rates a formula one is showing some softness we.
Speaker Change: We are hoping and believing that this race will continue to pace up but I think you can see that and so we're a little focused I'm trying to make that the best event that it can be but that presents a potential headwind in the fourth quarter overall, though given where we are to think about our records into the second quarter of Las Vegas at this point is pretty.
Speaker Change: Compelling and pretty exciting for all of us to the region's business remained stable with margins holding at 30% plus against an established and a consistent promotional environment and we continue to have best in class properties with leading market share, providing a real steady free cash flow generation.
Speaker Change: Macao story continues without standing performance and the drivers of strength in that market, starting I believe with our leadership team, we have Kenny and Hubert on the bone Pansy has clearly leaned in on many things that impact the property in our market and ultimately our market share and so we're thankful for that.
Speaker Change: And there are many tactics that they deploy I think the thing that's most compelling as a truly understand our customer our customer base and their wants and needs and without any real capital enhancements from where we left this market in 2019, we're obviously outperforming.
Speaker Change: MGM Macau is now the top producer in the peninsula side something in a position something we're proud of them in a position we'd like to keep and so we're going to continue to invest into that property and ultimately an overall remembering that the market is only returned to 80% recovery well M. G. M is well above that we still see opportunity not only for <unk>.
Speaker Change: And the market, but ultimately for us to steel additional share.
Speaker Change: Before I turn this over to Gary Fred Suite, you've not yet Matt to talk more about MGM interactive I'd like to comment on any change recent announcements and bad Mgm's domestic business.
Speaker Change: First I'm excited by the relationship that we've created with stellar David as the interim CEO and now the chair I'm equally excited by the progress that's been made by the team in bed Mgm's product enhancements with a key focus by the <unk> group and now. The recent addition of gave them Gavin Isaacs of C. O is comforting someone MGM and I am not alone for.
Speaker Change: A long time have a great relationship and think he'll do wonders for that business and ultimately the market.
Speaker Change: Also like to make a general comment on that Mgm's Monday reliefs, and some promising green shoots reported by competitors in the space.
Speaker Change: We have stated the 'twenty 'twenty four it would be an investment year recognizing that we've lost shares in sports and then it was impacting our leading market position and I gaming, we righteously decided to invest heavily into our sports product and continue to invest in customer acquisition for I gaming. So long as we saw both market growth and overall market share growth for the <unk>.
Speaker Change: But MGM was also profitable in the second quarter of 24, driven by our I gaming business, which annually contributes about $400 million to the overall business.
Speaker Change: The second piece is improving our sports product, we've made substantial steps with angstrom and will deploy a whole variety of new products into the football season.
Speaker Change: As well as single account single wallet in Nevada, establishing customers that carry a wallet with funds back to their home state. We think it's a big deal for the business and for our Omni channel efforts and so we will obviously invest into the fall with these new product offerings trying to win back customers on sports.
Gary: And the Big picture, we love with bet MGM has done for our brand we love the long term prospects and we enjoy having a partner during this development stage that is equally focused on the business. We are patient and have a strong belief in the growth of this business now and long into the future I want to turn it over to Gary Gary is going to talk a little bit about bet MGM, but really focus.
Gary: On Mgm's other interactive activities and the rest of the World Gary.
Gary: Thanks Bill.
Gary: Beginning a couple of years ago, we embarked on a journey with the vision of creating our own proprietary I gaming and sports betting platforms. The goal is to develop a differentiated product capable of capturing market share in both established and emerging markets.
Gary: The crux of this strategy is based on four pillars and I'll walk through them.
Gary: The first pillar was for MGM to own its tech ecosystem. So that we were not reliant on third parties a tech ecosystem that is scalable and cloud based we achieved this in 2022 through our acquisition of Leo Vegas, not only did we buy the technology, but we acquired an exceptional management team with an <unk>.
Gary: <unk> strategic plan that we have been executing we also recognize the importance of having an owned sports betting platform to further highlight our brands and generate more cross sell opportunities.
Gary: We took a large step forward to achieving.
Gary: Technical independence with the purchase of typically U S sports betting platform.
Gary: <unk> will close soon and drive important synergies.
Gary: The second pillar of our strategy was to own our proprietary I gaming content with unique intellectual property. We found this through our acquisition of push gaming in 2023, our strategy with push is to develop games that are not only exclusive to our owned and operated platforms, but also to create titles that can be.
Gary: Market it to other operators since our acquisition M. G. M resort branded games have been our highest performing titles in the push ecosystem the.
Gary: The third pillar of our strategy is to target organic growth in attractive regulated markets with the bet MGM brand <unk>.
Gary: Just a reminder, we own the bet MGM brand and can use it anywhere in the world outside of the territories that the JV operates in.
Speaker Change: When you do this using our Leo Vegas proprietary Tech stack, we've already launched the brand in the United Kingdom, and the Netherlands with Great early results and we plan soon to enter Latin America.
Gary: The final component of our strategy is our live dealer product enabled by our recently announced strategic relationship with Playtech, making us the only U S. Operator to offer live casino content for international markets directly from the Las Vegas strip, we've already launched at Bellagio and MGM Grand and our three.
Gary: Filled with the positive response, both from our live and online customers. The next phase involves constructing a dedicated space at MGM Grand featuring table games and in the future game shows from well known third party brands. We believe the synergy among all of these pillars will yield significant long term returns starting with a <unk>.
Speaker Change: Digits stabilized return by 2027, and the near term after two years of investment we see the core businesses at Leo Vegas, and push gaming beginning to show positive momentum over the next few years, we will focus on expanding our sports platform and making further investments in our new.
Gary: Owned and operated fully owned and operated bet MGM markets back to you Bill. Thanks, Gary obviously excited by all the progress and we look to scaling this business.
Bill: Particularly the live dealer piece here in Nevada, I think is interesting and unique to us and exciting format now before I turn this open to Q&A.
Speaker Change: Just a couple of overviews again, I think we enjoy a magnificent positioned in Las Vegas, we have made significant capital investment in our luxury we've put over $1 billion into our properties in the last three years.
Gary: Principally focused on the building we're in Bellagio all of our rooms and suites now had been redone amongst many other new amenities were also continuing to explore ways to further connect the heart of Las Vegas strip, meaning bellagio ARIA and the cosmopolitan together. Some of you may have seen over the last couple of weeks a set of plans.
Gary: That was submitted to the county here.
Gary: We are in the midst of trying to create something that we believe will be unique and special to Belive, Joe something deserving something that will have an experiential component entertainment component must see as well as retail and ultimately.
Gary: Life components to begin to marry itself up with some of the other things we have here that bring nightlife back to <unk> in the long run. So we're excited by that we'll have more of those plans are for the next quarter or two announced in terms of content and pricing, but we're excited about launching that product hopefully over the next several months here.
Gary: As I think about our regional properties again I want to reiterate they are stable in their free cash flow generating and we're excited to have the properties that we do within our portfolio. Many of them as you know we're market leading.
Gary: We have shown and demonstrated now I think in Macau are growing EBITDAR prowess and our ability to have set a whole new plateau of economic performance.
Speaker Change: We are excited and I am by the idea of omni channel for the football this coming season for Beth M. G. M. I think you'd finally unlocks our database that enables people to take their wallets and go home to places like Colorado and still have funds that they can share.
Speaker Change: I am equally excited by the overall digital strategy that Gary has laid out.
Speaker Change: I, just recently returned from Japan, and that's moving along nicely we.
Speaker Change: We are in the ground as we speak and we hope to start pylons by May or June of next year with a target states still are middle of 'twenty 30 for opening I think we are if I think about expansion I think about the UAE and New York I think in our project in Dubai of note. We're ideally situated in UAE.
Speaker Change: And there has finally been some progress in New York at least by the end of 2025, we all have to make our submissions and move that along and I love our position in Yonkers, and what we've been able to accomplish with the local community. There I think and I know we're in good standing as of this date, so I look forward to that.
Speaker Change: And ultimately look forward to additional markets next month myself and Pansy Ho will be in Thailand looking at that opportunity that is adventure that we're interested in and if we do do that we will do it through MGM, China Holdings, and then finally I'm excited by some of the news are not news, but some of the information Johnson consistently provides I think we have an amazing.
Speaker Change: Sheep with low net debt with excess cash still able to deploy whether it's into things here or against some of Gary's propositions and I think we ultimately have a pipeline of short middle and long term value creators.
Speaker Change: With that operator, I will turn this over to questions.
Gary: Yeah.
Speaker Change: Ladies and gentlemen, well now begin the question and answer session. As a reminder, in all fairness. Please limit yourselves to one question and one follow up.
Speaker Change: Our first question today comes from Joe Greff from JP Morgan. Please go ahead with your question.
Joseph Richard Greff: Good afternoon, everyone.
Speaker Change: No, Jonathan and Bill I'd like to start off in Las Vegas.
Speaker Change: Realize the marriage strategic partnerships beyond Las Vegas, and it also relates to the region.
Joseph Richard Greff: Was hoping maybe you can give us a little bit more more meat on the bone with respect to the contribution from from the Marriott connectivity I think Jonathan you mentioned at the outset. The quarter 410000 rooms were room nights were buttons to make sure that was for the quarter or is that sort of.
Speaker Change: The inception of the property, but I.
Speaker Change: I guess, what I'm trying to go to that Hey, I know you kept the contribution at steady state piece instead of annual EBITDA level of 65 to 75.
Speaker Change: Slide deck.
Speaker Change: Does that timeline in which you know.
Speaker Change: Thank you could hit that has that changed given that you've had a number of months of experience and then as a follow up Bill you mentioned that that Formula one had some softness when.
Bill: When we think about the year over year Delta related to the formula one softness shouldn't that be more than offset by the benefits of the Marriott connectivity and that's all for me.
Speaker Change: A quick question, Jeff go ahead and go first.
Jeff: So first of all just a couple of just to clarify a few of the facts regarding the production, we're seeing out of Marriott that 410000.
Speaker Change: Book room nights numbers for the year to date as of a couple of days ago.
Speaker Change: And of that.
Speaker Change: Maybe 60% or so.
Speaker Change: Stayed here the remainder our reservations for nights over the next few months.
Speaker Change: But we measure it by production.
Speaker Change: And so so that's that's the production level. It is in terms of the incremental benefit. It comes from two places one the rate at which Marriott customers are paying.
Speaker Change: As compared to those room nights that were displacing you know we were already operating at 96% occupancy. This was not about growing occupancy was about growing yield. The second is the increased spend by those customers while on property.
Speaker Change: Roughly a $100 of the benefit of room night comes from the the rate premium and about $50 comes from the increased daily spend that we measure through charges to the folio. So it's not a perfect measure but it is.
Speaker Change: Pretty good proxy and together those are the incremental benefit from Marriott rooms.
Speaker Change: In terms of the timeline, we got started a little bit later on this because of the cyber incident, we didn't start until February for most of our properties when we originally.
Speaker Change: We anticipated starting the end of 2023.
Speaker Change: So I think it's still a good estimate for the benefit for calendar 2024, even though we started a bit late.
Speaker Change: And then Joe as it relates to F. One.
Joseph Richard Greff: I get the principal point, although we could argue that that revenue goes against labor increases or insurance and as you know a bunch of other things I think the real issue with Formula. One is it's off to a soft start as compared to last year. When we had a lot of advanced pre bookings I think you can see some of our a D. Ours are down if you look at what we're charging a 50 person.
Speaker Change: Give or take I think the good news is we have an NFL game. So the south end of the strip that only ran in the sixties last year I think we anticipate filling that up.
Joseph Richard Greff: But the actual event itself feels soft it doesn't feel soft in gaming it does which is the most important piece well one of the more important pieces.
Joseph Richard Greff: Doesn't room rates at the big three meaning in this case already at Cosmo and Bellagio.
Joseph Richard Greff: So the overall impact we'll see I'm, hoping it feels later and we can yield back up again I'm sure. It will but I think it's worthy enough and were concerned enough to make a point of distinction between this year versus last.
Joseph Richard Greff: Okay.
Speaker Change: Great. Thank you.
Speaker Change: Our next question comes from Shaun Kelley from Bank of America. Please go ahead with your question.
Shaun Clisby Kelley: Hi, good afternoon, everyone and thank you for taking my questions.
Shaun Clisby Kelley: I also wanted to ask a little bit about Las Vegas, and then maybe follow up on digital but my question on Las Vegas would be.
Shaun Clisby Kelley: I think just kind of the second quarter in a row, where we've seen some of the kind of core gaming metrics down a little bit, but obviously the non room revenue side could you just kind of drive the story in the narrative as you just talked about with Marriott. So can you just give us an update on kind of what youre seeing out of the core gaming customer at this point so what some of the pros.
Speaker Change: It might be about where youre kind of targeting your focus around the strip at the moment in terms to drive that gaming customer moving forward. Thanks.
Shaun Clisby Kelley: Or you want to take this sure Sean the core gaming customers still pretty solid I, probably did the change in the revenue on the slot side in particular is mid week and tied to the shift in our convention mix, but we continue to see our high end perform extremely.
Shaun Clisby Kelley: Well our database perform extremely well.
Shaun Clisby Kelley: And our focus continues to be on maximizing the REIT customer in the room, especially during the weekends, where we think theres opportunities to yield up to the better customer.
Speaker Change: Great. Thank you and then maybe to follow up on digital for or whoever is appropriate or Gary if you want to take it would be.
Speaker Change: Thank you for kind of the overview on sort of where you are taking a strategy where I was kind of curious was well if we think about net investment. So let's exclude some of the acquisition dollars that you spent but as we as we can.
Speaker Change: And I think about these ventures in total.
Speaker Change: Excluding what's going on with MGM, where we have sort of a core kpis like is the is the rest of the digital venture here largely self funding meeting your eight you're cash positive in some areas are able to reinvest.
Speaker Change: Is there any kind of need to further invest or push especially when we think about new market launches maybe like Brazil.
Speaker Change: Sure. Thanks for the question.
Speaker Change: I would say, we definitely have portions of the portfolio, especially in our core businesses at Leo Vegas pushed Bush gaming, which are definitely profitable.
Speaker Change: I would say, it's a modest level of investment is what we have to make around individual market launches, but sort of nothing at the scale of what we've done here a bet MGM in the U S.
Speaker Change: Thank you very much.
Speaker Change: Our next question comes from Carlo Santarelli from Deutsche Bank. Please go ahead with your question.
Carlo Santarelli: Oh, Hey, guys. Thanks, good afternoon.
Speaker Change: Jonathan previously you'd talked about EBITDA growth in 2024.
Speaker Change: Three Q, obviously sets a favorably you your commentary around the bookings for each of the months, obviously resonates favorably coupled with some of the commentary around formula One I guess.
Speaker Change: I wanted to revisit that statement and kind of see.
Speaker Change: How you feel is the dynamic between <unk> and <unk> as we kind of look ahead for the back half of the year.
Speaker Change: Sure.
Speaker Change: Two quarters are quite different from one another in terms of but really the comparables.
Speaker Change: Okay.
Speaker Change: The most important distinction third quarter as I noted you know our outlook on the room revenues is pretty strong in and everybody knows what we experienced last year in the third quarter.
Speaker Change: The fourth quarter.
Speaker Change: It depends greatly on ultimately the our performance during F. One it's not the only thing going on there's a lot of things driving the business in the fourth quarter, but but that was an important driver of our performance last year and so I would say.
Speaker Change: RV ing out that risk for.
Speaker Change: For the moment, we feel very good about the third and the fourth quarter and their ability to grow, but but just realistically the fourth quarter does depend upon the performance of the U F. One of that.
Speaker Change: Okay, Great and then just if I could circle back on on bet MGM.
Speaker Change: When you guys think about kind of the balance of this year and into next year.
Speaker Change: I know that you know in the release that that was out earlier in the week kind of talked about.
Speaker Change: Debt funding some of the developments in the investments and whatnot is there anything else that we should be mindful of looking forward in terms of contributions to the entity.
Speaker Change: No.
Carlo Santarelli: Carlo No I don't think so I think what we've put out in our releases frankly more than sufficient [laughter] and what do we pay it with data we do something else.
Speaker Change: You know time to tell them, what's important for us we need to continue to be mindful of expenses, but what's important to us is that we don't lose I gaming share because of its precious and that we had properly relaunch. The products, we were talking about earlier and we spend effectively and appropriately into it now that's an estimate.
Speaker Change: Let's see how it plays itself out but the bigger question of are we going to invest even more money into that I think what we've identified is plenty of money and I do not anticipate that.
Speaker Change #106: Understood. Thank you very much guys I appreciate it.
Speaker Change: Yeah.
Speaker Change: Our next question comes from David Katz from Jefferies. Please go ahead with your question.
David Brian Katz: Hi afternoon, Thanks for taking my question.
David Brian Katz: I wanted to just.
David Brian Katz: Understand better or or hear you talk more about.
Speaker Change: The digital strategy from a holistic perspective.
Speaker Change: You know better I'm, Jim is sort of on its own path REIT with its own issues shot.
Speaker Change: While the rest of the world is.
Speaker Change: To some degree doing its own thing.
Speaker Change: Some of which have the same brand how did they converge one day right or is that even a possibility and you know to that end.
David Brian Katz: Capturing the most value in your stock for all of it right does that necessarily.
David Brian Katz: Require having them converge one day.
David Brian Katz: Hi, David.
David Brian Katz: David I'll, obviously that kind of leads into the conversation of what's the relationship and what to do within Jane and I. You know, we're just not going to comment on that in broad stroke.
Speaker Change: We enjoy where we are with them. We are very hopeful for what will come this fall and frankly, it's pivotal to the business and to our ability to regain share.
Speaker Change: That said.
Speaker Change: We understand the exercise we understand the long term.
Gary: Gary and his team have worked diligently in markets. We think the guys at Lille Vegas was an exceptional find there a very strong team with what we've launched Netherlands with great success, We've launched U K, obviously, we have our eyes on South America and Brazil.
Speaker Change: And so there's real up huge there and real money to be made in an organization that is already making money.
Speaker Change: So excited about that and I'm excited by the opportunity to play here with the notion of live dealer.
Speaker Change #100: 15% of all of the beds that MGM or live dealer.
Speaker Change: And to the extent, we could make it real from emanating from these places we think is compelling long term and we think we can actually have some real fun with that down the road with tying celebrity to it but I get the longer term question.
Speaker Change: I'm just not in a position to want to answer it right now.
Speaker Change: I think that's fair enough. Thanks, a lot.
Speaker Change: Okay.
Speaker Change: Our next question comes from Stephen Grambling from Morgan Stanley. Please go ahead with your question.
Stephen White Grambling: Hey, just a follow up on the bed M. G M invest our investment commentary I guess, we get a lot of questions on how the cost structure here compares to some of your peers. So would love to get any color you have on the composition of the operating expenses there as we think about marketing in promos versus perhaps product and then think about what the flow.
Speaker Change: Who could look like longer term.
Speaker Change: Sure. So look I think that what we're looking for with the product deliveries in towards the end of this year at bet MGM are certainly designed especially with the extension of angstrom and that product into more markets and more.
Speaker Change: Sports.
Speaker Change: It's something that should have a positive impact on <unk>.
Speaker Change: Gross gaming.
Speaker Change: Gross gaming margins.
Speaker Change: And certainly that then has a.
Speaker Change: Trickle down impact on the rest of the P&L.
Speaker Change: And the cost structure itself, because youre, having significantly higher hold at the top of the funnel against handle so that is a.
Speaker Change: Huge portion of.
Speaker Change: The rationale behind.
Speaker Change: The product releases that were going to see coming here at the beginning of football season.
Speaker Change: Got it and maybe one other quick follow up just on the bank loan and maybe I missed this but I guess where is that being financed out of is that being guaranteed by either parent.
Speaker Change: That would be a and again this is kind of still underway, but it would be a facility at the bet MGM level and any any amounts or.
Speaker Change: Major of credit support from the from the parents is still under discussion, but it would be at the bet MGM level their own credit facility.
Speaker Change: Got it thank you.
Speaker Change: Yeah.
Speaker Change: Our next question comes from Brandon <unk> from Barclays. Please go ahead with your question.
Brandon: Hey, good evening and good afternoon, everybody and thanks for taking my question.
Brandon: So the first question is on.
Brandon: Las Vegas, Bill you mentioned in your prepared remarks.
Speaker Change: Supply coming out of this trip across the two properties that.
Speaker Change: That's well known I am curious if you could just walk us through you know what.
Speaker Change: Where are you seeing it it group versus leisure.
Speaker Change: Is it proximity versus price point, what what sort of got you excited enough to mention it.
Cory: Cory I can follow up on this but I it looks not as much group, particularly when you talk about the Tropicana I think there it's a pure leisure play on that corner. It was clearly a value proposition. We also have several there with Luxor, Excalibur and New York, New York and so we think it's a pure leisure play there there was some at group activity.
Speaker Change: Mirage, but not extensive I.
Speaker Change: I think we've seen maybe a couple of good pop up at M. G M or one of the other facilities I think MGM.
Speaker Change: But again I think if you think about those leisure room nights anything about other places to go in the interim I think our MGM portfolio M. G. M Park, MGM and we have a lot of stuff in mid market.
Speaker Change: Lead into that and I think we're ideally positioned particularly given that we know those customers remember we retained part of that database and so.
Speaker Change: Leaning into them and being able to move them over as we think is meaningful and and just generally inventory.
Speaker Change: As we understand hard Rocco probably after three years tropicana's completely undefined at this point and so it's a substantive period of time I know, we've you know we've.
Speaker Change: We've gone into the teeth of the inverse with Fontainebleau.
Speaker Change: But it's nice to go the other way for once.
Speaker Change: That's helpful. Thanks for that and then a question on MGM China.
Speaker Change: The market.
Speaker Change #103: Slowed down but by by many measures in India to Q slightly and even your unit production for mass took a slight step back and yet you guys hit a high watermark for margins.
Speaker Change: Just curious what you can call out there. It just you know I'm, assuming your hotels are full and your yield managing but but is there anything else to see through just for that performance.
Brandon: Kenny or you want to comment please.
Speaker Change: Yeah I think.
Speaker Change #100: When we talk about <unk>.
Brandon: Yeah.
Speaker Change: Visa is that economy scale and the population side there are many dimension to merit.
Speaker Change: Oh, we at MGM China.
Speaker Change: We're focusing on what we should be doing.
Speaker Change: Basically we are focusing on the innovative.
Speaker Change: And yet customers thinking investment both.
Speaker Change: Capex and Opex.
Speaker Change: In July we basically all visitation to our property is consistently leads.
Speaker Change: The previous quarters.
Speaker Change: And yet our revenue share.
Speaker Change: It maintains that mid teens EBITDA.
Speaker Change: EBITDA margin is still in high twenties.
Speaker Change: I think that way.
Speaker Change: Where we are right now.
Speaker Change: And you bring any color on the reason for the margins I mean, I think I know, but go ahead.
Speaker Change: On the margin I think that first of all I think.
Speaker Change #136: <unk> disciplined approach towards the the reinvestment and the.
Speaker Change #102: Mass component of the revenue mix also increase and Thats helped with the margin increments as well.
Speaker Change: Perfect. Thanks, everyone.
Speaker Change: Thanks.
Speaker Change: Our next question comes from Dan Pulitzer from Wells Fargo. Please go ahead with your question.
Dan Pulitzer: Hey, good afternoon, everyone on Vegas, the last couple of quarters, we've seen room revenues.
Dan Pulitzer: Growing high single low double digit percentages, whereas the F&B entertainment.
Dan Pulitzer: Group and all of that that piece of the business has been growing more slowly can you can you maybe unpack that a bit are there any trends in ancillary spend that you're seeing kind of under the surface as it relates to the different growth in it in these buckets.
Dan Pulitzer: Look I'll set it up and then Corie I turn it over to you I think the conversation around Marriott and our ability to yield off of that is proven and driving our room rates the REIT.
Corie: Turning to our convention marketplace to former highs driving those room rates.
Corie: You know other side of the coin is <unk>.
Speaker Change: Leisure is more prevalent over transient and I think when you look at total spend starting with entertainment and then some food and beverage food and beverage all time high but catering and banquet is driving and when you look at the actual restaurants, four 5% down on coverage.
Speaker Change #104: No, 2%, yeah, Okay, yeah, and so and so yeah I think underlying is its never been the store Las Vegas has always been the story people will come. It's a story is when they come what do they do and how much can you extract and so I think it's fair to assume that when it comes to entertainment food and beverage single digit, but we've seen some source.
Speaker Change: <unk>.
Dan Pulitzer: But for now and I think into the foreseeable future based on what we've set up room rates will overcome most of that if not all of it yeah, Dan what I would add what we're definitely feeling more mouse, it's just where they're being fed whether its convention halls, and restaurants are the food and beverage side, so a little bit misleading from that perspective, the entertainment challenges there.
Speaker Change #101: There is a lot of supply out there and you know with the superior and their 18000 seats in their three shows a day. It just puts a lot of pressure on a on a market that probably has a lot of supply. So it's you know we're really focused on making sure. We have the REIT acts in our buildings and are able to attract the customers that.
Speaker Change #101: Are looking for those performances.
Jonathan: Got it that's helpful. And then in terms of the buybacks I think you have an excess cash balance of 800 million and about 1.3 billion remaining on the repo I know you've been pretty prolific here in repurchasing shares, but as we kind of think about where we go over the next kind of year or two and you know Jonathan laid out that.
Jonathan: Free cash flow yield as you know in the growing in the mid teens.
Speaker Change #110: Is there a scenario, where you would be willing to add debt to finance the share repurchases or should we kind of think about this kind of tapering down overtime.
Speaker Change #109: Well I'll offer a couple of thoughts first of all at these values. We still believe our shares are very attractive.
al: Al you I mean, just looking on.
Speaker Change: On the screen, probably our stake in MGM, China is worth 10 or $11 per share and so it's a very appealing free cash flow yield when you look at the.
Speaker Change #119: Kind of the value of just the operating businesses not to mention bet MGM and our digital investments that being said you're right.
Speaker Change: We called out about $800 million in excess cash right now, but that grows with the free cash flow generation and when we put out things to the end of 'twenty five like like like a potential license.
Speaker Change: License fee for our New York expansion It does open up the.
Speaker Change: Possibility for additional share repurchases. So I do think over time, it tapers off a bit but you know whose values. We're still we'll still be aggressive purchasers and finally.
Speaker Change: We would consider additional.
Speaker Change: Financial leverage to fund these repurchases are our lease coverage is growing nicely.
Speaker Change: And as Bill noted in the opening remarks.
Bill: Net debt is.
Bill: Still close to zero, so were well below our leverage.
Bill: <unk> limits.
Speaker Change #120: Consider doing that but we don't have to right now.
Speaker Change #118: Got it thanks, so much.
Speaker Change: Our next question comes from Barry Jonas from <unk> Securities. Please go ahead with your question.
Barry Jonathan Jonas: Hey, guys wanted to just follow up on that one given last year was so high and focused and we've heard plans to hopefully make this year a little more balanced do you see a chance for better performance at some of the non luxury properties or are you just concerned that might not be enough to make up for the softness.
Speaker Change #105: Today at the top three properties.
Speaker Change #129: The answer is yes, I don't know if you heard my comment earlier.
Speaker Change #122: We've got the Raiders are in town with a game that weekend and that'll tremendously support the south end of the strip and we've already seen that we've already seen that occurring what's the schedule as announced.
Speaker Change #122: Last year I think we did an amazing job scaring the hell lot of people in terms of traffic. Obviously there was during the actual event. It was fast thing they're trying there was no traffic and so the idea of bringing people back to town focusing them on some of the values that are still here is critical and I think particularly driven by the game, you'll see the south end of the strip come to <unk>.
Speaker Change #123: I want to put it in quantum two in terms of what's at stake here.
Speaker Change #108: You know I'm talking 30 million ish, plus or minus so when we think about the comment and we think about what's at stake and you look at the overall aggregate of the company for the quarter, let's all keep it in perspective.
Speaker Change #108: But having said that well.
Speaker Change #108: We're far from giving up I, just I'm signaling as it sits today.
Speaker Change #125: Ticket sales are soft and therefore room sales are soft.
Speaker Change #108: Okay.
Speaker Change #121: I would say as we've heard from other markets, it's fairly consistent year, one there's a lot of hype for it.
Speaker Change #121: This will be a good weekend for us compared to an average normal weekend just in comparison to F. One last year was so substantial especially on the rates had them at the luxury properties.
Speaker Change #135: Got it got it and then just wanted to follow up for the regionals and kind of ask what you're seeing across the database segments of non rated play we continue to hear about some softness at the low end are underrated, but obviously you guys are more luxury focus thanks.
Speaker Change #112: Yeah, you know the regionals.
Speaker Change #117: I had an interesting start April was a little bit more challenging than it had one less weekend day and then we saw May and June come back pretty strong.
Speaker Change #128: You know the majority of the customers the middle land to high end are still pretty strong still visiting quite a bit the lower end of the database has seen a little bit of softening and then on the what we would call. The unrated play that's downhill slightly also by a lot of that was driven in.
Speaker Change #108: April by that one extra a weekend day.
Speaker Change #141: Got it thanks, so much.
Speaker Change #108: Our next question comes from John Decree from C. B R. E. Please go ahead with your question.
John G. DeCree: Hi, everyone. Thanks for taking my questions.
Speaker Change #113: Maybe to shift the conversation to your development pipeline first on the UAE, We got some guidelines from the GCG are a recently about the licensing process and so.
Speaker Change #131: Realizing there's probably not a lot of detail you can elaborate on so a high level question is there.
Speaker Change #139: Bill anything that that you've seen or learned over the last couple of weeks or months for new information that changed your level of enthusiasm one way or another for that perspective opportunity and then the follow up specifically would be there was quite a bit of discussion those guidelines about online gaming and so most of our conversation with you.
Speaker Change #114: You and others have been around potential IR opportunity. So curious with your international digital business would.
Speaker Change #132: Gaming of that market the.
Speaker Change #107: Interesting for MGM is that something that youre looking at and if that opportunity were to come up.
Speaker Change #145: Yeah. Thanks, John for the question.
Speaker Change #126: The UAE I think the great news is now that they've announced a lottery, which is something that they said they would do.
Speaker Change #127: <unk> that the rest of this will rollout as defined now timing is still unknown.
Speaker Change #107: It kind of keeps moving around but I can't imagine by end of this quarter into early next we won't know with some specificity around what it means from Derby and then potentially what the umbrella language is as it relates to all of the other Emirates.
Speaker Change #137: We're excited by it we're excited about obviously the fishing in Dubai, I think I've mentioned on several calls that we and our partner have an amazing facility property there under construction as we speak by the way, we're driving pylons right now.
Speaker Change #137: And that facility has an accommodation for large scale casino, so theres a lot of opportunities throughout the region.
Speaker Change #107: The probably the initial license is going to be spoken for I believe.
Speaker Change #107: But I would suggest that each emirate will have its own opportunity to wish you a license.
Speaker Change #107: So I know Gary you spend a couple minutes on that and we will continue to follow that closely particularly for Dubai.
Speaker Change #130: As a.
Speaker Change #130: Workplace to emanate from.
Speaker Change #107: Yeah.
Gary: Thanks, that's helpful I forgot I stop two or three in there so I'll hop into the back of the queue. Thank you.
Speaker Change #107: Our next question comes from Robin Farley from UBS. Please go ahead with your question.
Robin Margaret Farley: Oh, great. Thanks, just wanted to circle back here.
Speaker Change #124: Some of the comments, you're making about kind of new.
Robin Margaret Farley: Hi, Lo and different consumers I know Vegas has a lot of puts and takes at the easy comps in Q3 tougher in Q4, but when you look at gaming revenues declining in Q2, and then in the regional markets. Some of the stuff that you've talked about is there in your view to put on your economist hat here.
Speaker Change #152: The macro factors that you think could change that or may change that over time or do you think it's just <unk>.
Speaker Change #140: Getting back to some kind of pre pandemic.
Robin Margaret Farley: Elevation.
Speaker Change #146: You know before things would return to growth or kind of what you think.
Speaker Change #138: Picture when you when you look at the trends thanks.
Jonathan: Sure Robyn it's Jonathan.
Speaker Change #134: I guess I would disagree a bit with the premise of the question, which is that we are.
Speaker Change #148: We're seeing some strength out of the customers I mean to take a couple of examples the second quarter was a record drop in table games in Las Vegas for us in the quarter, we were down a little bit in slot handle that's for sure but.
Speaker Change #134: But much of that was due to a shift in mix from casino customers.
Speaker Change #134: Those casino room nights were down a couple of points because groom night group room nights were up about.
Speaker Change #134: 10% so.
Robin Margaret Farley: That mix contributes a lot to it on the on the regional side.
Speaker Change #155: You know are a rated.
Robin Margaret Farley: Or are they operate a day so the customers we know best our most loyal customers was up four 5% during the quarter. So we did see we did see some consistency and strength.
Speaker Change #149: For myself I don't see any macro factors that would really.
Speaker Change #149: That could really kind of dislodge the growth that we're seeing in gaming.
Robin Margaret Farley: You know our customers have seen a fair amount over the past 18 months in terms of increased interest rates and higher hotel rates and the rest and yet have.
Robin Margaret Farley: We have continued to to show show nice growth. So that's that's I guess the way out.
Robin Margaret Farley: Question.
Speaker Change #144: Thank you.
Speaker Change #144: Our next question comes from Chad Beynon from Macquarie. Please go ahead with your question.
Chad C. Beynon: Afternoon, Thanks for taking my question.
Speaker Change #143: You guys have laid out a number of different items and Las Vegas and the.
Chad C. Beynon: The growth, particularly on the non gaming side food and beverage room rates et cetera, maybe offsetting some of the stability and the and the gaming business. So is there anything changed in terms of how we should think about Las Vegas margins I guess in the near term or beyond as maybe that non gaming piece grows.
Speaker Change #150: And then asked maybe separately what are you seeing just in terms of the the expense side of the business, particularly in labor is that now under you know kind of core inflation and manageable to kind of hold margins.
Speaker Change #159: If non gaming is growing thank you.
Chad: Broadly thanks, Chad broadly speaking.
Speaker Change #154: You know, we're comfortable with where margins are in our Las Vegas operations, where they've been in the last couple of quarters was to call. It the mid thirties.
Chad C. Beynon: We have experienced.
Chad C. Beynon: Increases in.
Chad C. Beynon: In unit labor costs over the past three or four quarters, how much of that due to our collective bargaining agreements I think our team has done a fantastic job in managing our labor expenses, particularly this last quarter Ftes were down a couple of points in Las Vegas, a couple of points.
Chad C. Beynon: And the regional markets and about 7% in the corporate office.
Speaker Change #160: I think we've done a good job in offsetting those increases going forward those increases in unit labor costs will be lower than they've been over the past few quarters as bill mentioned in his remarks, we're lapping now some of those are increases that we that we incurred due to those new labor agreements and not just in la.
Robin Margaret Farley: Yes.
Bill: So that's why we're comfortable that we can maintain margins in this area.
Speaker Change #169: Okay. Thank you and then in terms of the Vegas portfolio and kind of where it stands just from.
Speaker Change #153: A customer facing standpoint with blush Yo complete you mentioned Mandalay Bay are there any other projects that you're contemplating maybe in the next 12 to 18 months or given the the.
Speaker Change #151: The current situation with some room capacity coming out of the market and you guys running in the mid Ninety's does it makes sense to you know maybe for.
Bill: Bill outside of what you were talking about with La show maybe differ some core renovations that you would otherwise think about doing at this time.
Speaker Change #173: Yeah, I think that look.
Speaker Change #151: It's something we always look at we challenge ourselves with our capital allocation and particularly our maintenance capital because it's just that that said.
Speaker Change #151: Because of you know and this goes back a ways I think our average room remodel now is under 10 years finally.
Speaker Change #151: But <unk> has not been touched in a while we're doing M. G. M. As we spoke so we own those goods. So that process starts next year.
Speaker Change #151: <unk> excuse me later this year in earnest.
Speaker Change #151: And so those are the two big ones to come.
Speaker Change #151: I think as it relates to the rest of the inventory I hear you and don't disagree we're gonna get creative with Excalibur, we're transferring furnishings under the M. G M. There and so we continue to do creative things, but.
Speaker Change #151: One of the challenges that if you don't continue to renovate those rooms on proper cycle you wake up one day and then you are where you are.
Speaker Change #151: And so I wouldn't anticipate us coming much off of those levels. You know I think it will come down some six 700 million of year going down the road in terms of true maintenance cap, but.
Speaker Change #151: And I think our room remodels are spaced out enough, where we minimize disruption and displacement and make sure that we're able to push some of that business into the REIT buildings that will also enhance those buildings.
Speaker Change #151: Yeah.
Speaker Change #168: Thanks appreciate the color.
Speaker Change #168: Our next question comes from Mr. Keith.
Keith: With Stifel. Please go ahead with your question.
Keith: Hey, guys. Good afternoon, so I want to stay on the biggest real quick.
Speaker Change #151: Jonathan in your prepared remarks, you noted you guys expect to take.
Keith: The market share in Vegas, moving forward given your continued investment and these are properties, which you guys just talked about there.
Speaker Change #163: But want to understand that comment a little bit better than does does that mean, taking share as mirage. The trop come out of service or does that comment mean do you think there's further share to take beyond.
Speaker Change #175: Those assets essentially shutting down.
Speaker Change #165: Yeah, I'll make the headline comment I think theres further share to take.
Speaker Change #158: A high end retail nightlife scene that I'd like to see US go after more aggressively.
Speaker Change #167: Thank you know some of the club scene has lost some of its.
Speaker Change #167: Luster and I don't mean, just ours I mean in general.
Speaker Change #167: And so I think there's things to do particularly again in this building I think there's things to do next door and cosmopolitan and ARIA of note.
Speaker Change #151: As we think about ways to enhance the properties and just you know convince folks that that the.
Speaker Change #151: The idea of staying within this compound is impressive and compelling with the amenities that you know there's no reason to go anywhere and so we're going to continue to drive on that and I also believe as we continue to perfect and get better at personalization of data and all of the things that that program is beginning to yield I think we can do more of what we've got but by making sure.
Speaker Change #151: Sure, we keep folks in our buildings.
Speaker Change #151: I would add the investments, we're making are really aimed at the luxury customer and gaining.
Robin Margaret Farley: A portion of that market share I think achieves the goal that Jonathan mentioned previously so as we look at Bellagio and look what the competition is out there and if we can.
Robin Margaret Farley: Additional wallet or an additional trip, but we'll be able to regain that market share we're talking about.
Speaker Change #156: Okay Gotcha, and then second question Bill if we switch over to digital real quick real quick and I'll ask this in a way that IDE.
Speaker Change #161: Might get an answer out of you and I'm not trying to be offensive here, but.
Speaker Change #166: Is there a point.
Speaker Change #180: At some point in the future, where if you arent getting the results that you want out of the digital segment, you would make the tough decision to essentially.
Speaker Change #162: Keep it away from investing there and instead get more aggressive with the core business, which seems like to us that it's pretty undervalued at this point I hope that makes sense.
Speaker Change #165: Yeah, Yeah, I understand the point and look at yeah at some point it of course, I would never say never at some point.
Speaker Change #147: You know how hard do you Chase sports versus writing high gaming flow how much is I gaming grow unto itself, but I think you know look at both of those businesses. You know we're past the major investment scale I mean relative scheme of things you know we've we've invested.
Speaker Change #170: Call It 650 ish give or take and bet MGM at this point.
Gary: Nothing of that Ilk, and Gary's. So four 1 billion five all in between Leo Vegas, and some of the other acquisitions that would be a lot.
Speaker Change #170: And we're not anticipating any of that going forward. This is more about yielding off of what we've created.
Speaker Change #147: And hopefully doing that but I understand the core question I, just we're not giving up on digital by any stretch we still believe it's a key component of growth not only within our company, but within the industry.
Speaker Change #147: And I think it's been proven out in several different places.
Speaker Change #147: And so we just we're gonna be patient with it for a while.
Speaker Change #147: Understood. Thanks for the color Bill appreciate it.
Speaker Change #147: And our next question comes from Jordan Bender from citizens JMP. Please go ahead with your question.
Jordan Maxwell Bender: Great. Thank you it was sort of touched on Jonathan a big point when you came to the company several years back with they want to improve the cross sell between your assets by sending players to other properties in Vegas can you maybe just frame that progress you've seen in recent years and just the future opportunities not in place today that you can help.
Speaker Change #147: Further drive that.
Speaker Change #171: And if you're talking about well first of all I. Appreciate the question and if you are talking about the the I guess capturing in market share of our customers' spend while.
Speaker Change #171: While they're here in Las Vegas.
Speaker Change #157: I've I've never been more optimistic about our ability to do that for both internal and external reasons internally, we have we've invested capital.
Speaker Change #157: To connect our properties, particularly here in the center strip.
Speaker Change #157: Of course, our acquisition of the Cosmopolitan and disposition of the Mirage made much of that possible.
Speaker Change #157: Culturally our casino marketing teams and our convention sales teams.
Speaker Change #157: Work as one presenting the entire portfolio to our customers and encouraging them in many ways to stay within the portfolio.
Speaker Change #157: And there are many other things we've done internally to drive that externally just our positioning geographically in Las Vegas in the center and South scrip is where so much of the investment and activity is going on there.
Speaker Change #157: Whether it would be NFL or or T mobile or or even ask one theres really no matter, what or the A's no better place to be than in within our portfolio. So for all of those reasons and this comes back to my optimism about our ability to gain share.
Speaker Change #157: Over the coming years I think we are in a great position to do that and we've already been been doing that you can see that in our results.
Speaker Change #182: Great. Thank you and just for the follow up for online last quarter, you talked about the path forward, but that MGM and just some of the long term targets and the confidence around hitting those targets with the announcement the other day and just kind of a slight step back just given that further investment is there is there anything to it.
Speaker Change #184: Pie and on in terms of what changed in that outlook from back in April to today, whether it's competitive from a competitive perspective or an integration perspective. Thank you.
Speaker Change #183: I think what changed in the outlook to the extent it was understood what it would take to get.
Speaker Change #174: With the REIT product back in front of people and begin to gain back share for sports and so those are estimates.
Speaker Change #181: Frankly, it's not working but we're going to pull back it doesn't you know it's not a J.
Speaker Change #176: Just curious the bucket of money and go guys.
Speaker Change #176: And so you know we're going to watch that very closely and very diligently each and every day.
Speaker Change #176: Make sure those investments are paying off so I I sense and I understand the concern we all share it.
Speaker Change #176: And it's it's a key time for the business and for the company in the next six to seven months to see bet MGM begin to perform into that space.
Speaker Change #185: Great. Thank you very much.
Speaker Change #176: Ladies and gentlemen, with that we'll be concluding today's question and answer session I'd like to turn the floor back over to Bill Hornbuckle for any closing remarks.
William Joseph Hornbuckle: Thank you operator, and thank you all for joining us today, I won't kind of and where we started it's still compelling and I hope to all of you.
William Joseph Hornbuckle: To think about Las Vegas to think about the company and to think that several records continue to be broken.
Speaker Change #176: Proud of the activity case, we're proud of what we're doing here like every business. We have some challenges in this environment and I think we're meeting and maximizing on most of those.
Speaker Change #179: Either by word Gary's going digitally in the longer term of all of that and so with that said I think you all have a great evening.
Speaker Change #187: Ladies and gentlemen, with that we'll conclude today's conference call and presentation. We thank you for joining you may now disconnect your lines.