MGM Resorts International (MGM) — Q1 2017 Earnings Call Transcript

Thank you, Jamie. And good morning and welcome everyone to the MGM Resorts International first quarter 2017 earnings call. This call is being broadcast live on the Internet at www.mgmresorts.com, and we have furnished our press release on Form 8-K to the SEC this morning. 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 the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from these forward-looking statements is contained in today's press release and in our periodic filings with the SEC. 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 the press release, which is also available on our website. Please note that our supplemental earnings deck is posted on our website, which we hope you will continue to find helpful. Finally, this presentation is being recorded. And with that, I'll turn it over to Mr. Jim Murren.

Well, thank you, Dan, and good morning, everyone. We started the year in 2017 very well, and I think that the first quarter results further demonstrate the power of the MGM platform and the strategies which we talked about and have executed upon. Also, the strength of the markets in which we operate and many of the investments that we have made. I'm really pleased to announce that these earnings on an earnings per share basis tripled in the first quarter. And our net revenue and adjusted EBITDA grew 23% and 36%, respectively. On a same-store basis, our domestic resorts grew net revenue and EBITDA by 6% and 15% respectively, driven primarily by continued strength here in Las Vegas. Borgata, which we consolidated into our portfolio last year, had an excellent quarter, and National Harbor is off to a great start in its first full quarter of operations. In Macau, MGM China's strong results continued to demonstrate our ability there to consistently outperform our fair share in that very dynamic market. First, here at home, in the first quarter in Las Vegas, we achieved Strip revenue and EBITDA growth of 7% and 17%, respectively. We really are executing across all segments of our business including hotel, casino, food and beverage and entertainment. The quarter, of course, was aided by a strong convention business calendar and a favorable Easter calendar shift. But we also continued to drive margin improvement while delivering consistent quality experiences to our customers. In the first quarter, Strip margins grew 290 basis points to 33%, driven in part by strong revenue growth and our company-wide continuous improvement efforts to maximize the profitability of our business. Table game hold was modestly above our normal range. Our normal range is between 21% and 25%. Also in the first quarter, if you recall, we guided to a 7% Strip RevPAR. We ultimately achieved 8.6%. Clearly, the quarter benefited from CON/AGG and that calendar shift. However, even excluding these benefits, we would have grown RevPAR by approximately 4% in the first quarter. And this is due to the execution of the strategies we've discussed building a very strong convention base and maximizing all our other channels including a good mix shift into FIT in the quarter. CityCenter had an exceptional quarter. Both Aria and Vdara produced an all-time record quarter in revenue, EBITDA and margins. Aria ended the quarter just shy of $100 of EBITDA and margins of 36%, and they're nipping at Bellagio's heels. Bellagio had margins of 38%, so, of course, it's nice to say that Bellagio and Aria are clearly the market leaders here in terms of efficiency, margin, productivity, and Aria and Bellagio obviously continue to be top-performing assets within Las Vegas. This year the CityCenter board capitalized on these strong operating results to execute a dividend refinancing of the property. In April, CityCenter distributed a total of $600 million of ordinary and special dividends to its sponsors. To put this in perspective, over the past three years, CityCenter has paid out over $2 billion of dividends to its shareholders and remains very well capitalized with very prudent leverage and attractive free cash flow. We're looking for further opportunities to grow and further opportunities to use our product offerings to maximize our ability to drive guest experiences. We're obviously ahead of the curve when we expanded the Mandalay Bay Convention Center. That's already delivered significant returns to us and have allowed us to grow our group business. Aria is slated to open its 200,000-square-foot convention space expansion by early next year. And we're now in a position to begin working toward expanding MGM Grand's conference space. We're actually also looking at exploring some space here at Bellagio as well. And work is progressing with the Sydell Group on the transformation of Monte Carlo to Park MGM and NoMad. We took our first step in December when we opened our 5,200 seat park theater and we will continue to rollout these new guest experiences and amenities, including a completely remodeled room product throughout this year and next. We've also been working to work with our partners to find the best and most profitable outcomes for our results. We did this recently with Topgolf bringing an innovative and complementary entertainment concept to MGM Grand and the city, and we're going to do this again with an experience with Allied Esports in converting Luxor's nightclub space into the first Esports arena on the Strip. Partnerships are not new to us. It's something we actually excel at and none is better evidenced in my mind than when we teamed up with AEG to create T-Mobile Arena. We just celebrated its first anniversary and it has already set new standards for not only venue design and amenities, but it is one of the busiest arenas in the world, validating our investment and our partnership with AEG. In fact, we just recently announced a long-term content deal with UFC and we're all looking forward to welcoming the city's first professional sports team, The Vegas Golden Knights, this fall. Entertainment continues to be a key driver for our company and the primary reason people visit our resorts. And our forward calendar this year is shaping up well across all of our larger scale venues in the United States. And with T-Mobile and the new Park Theater, we're on track to more than double the number of shows hosted in our large scale events this year versus last year. Over on the East Coast, MGM National Harbor completed its first full quarter of operations and we are very pleased with how the property is performing overall. We finished the quarter as the market leader, commanding a 30% share in the region and the only property in the region with a fair share of premium. Our table games are performing very well, with a win per unit per day of over $5,800, and poker is also running ahead of our expectations. Slots are doing well as well, with a $261 win per unit per day in the first quarter. And we believe that there's substantial opportunity to grow this as we optimize our slot floor and leverage our targeted marketing efforts. And like any new property, it takes time to ramp up that floor and build our database. But that said, we are pleased that we have added over 240,000 new members to our M life Rewards program. And we're very encouraged by the consistent pace of the sign-ups we continue to see. We know that we're off to a good start there, but we see opportunities to continue at National Harbor to grow revenue, grow margins and grow cash flows and we intend to do so. Over in Atlantic City, Borgata posted another great quarter and is the undisputed leader in the market. In fact, they had a record March in slot revenue and continue to post strong top-line numbers. We're extremely pleased with how the acquisition has worked out for MGM Resorts and MGP. And our team at Borgata has done an outstanding job. That team and our teams across our company have been working seamlessly on the transition to our M life loyalty program which will be done this summer. And we believe that will positively impact both Borgata and the Las Vegas properties with cross-property play. There may be some downtime because of the transition to the current rewards – from the current reward system to M life. But we've done this before and we expect to be able to minimize that disruption to our customers. In Macau, MGM China reported a great first quarter with revenues increasing by 7% year-over-year and EBITDA increasing 25%. MGM Macau continues to capture more than our fair share despite the new competition in this very rapidly changing marketplace. We continue to see growth and opportunity in our mass business supported by premium mass. And we remain optimistic about the market's recent uptick in VIP. Grant's on the line, and of course, he'll be available to talk about that. We're progressing on the construction of MGM Cotai as we look forward to the opening of that second resort, our second resort in Macau, which we will open later this year. It will have roughly 1,400 hotel rooms and suites, great meeting space, spas, retail offerings, a very diverse lineup of F&B and Asia's first-of-its-kind theater. The entertainment component alone, we believe, will help drive greater diversification in the market and bring Macau further into this diversification of hospitality and global tourism. So, looking ahead into the current quarter, our second quarter, this as we've been saying for a while, will be one of the toughest comparisons we have this year given the Easter calendar shift in April, and that's going to impact convention room nights. Our second quarter of 2016 also benefited from higher-than-normal table games hold. It was specifically 25.6%. And as a result of those two factors, we believe our Strip revenues will be about flat, relatively consistent with the second quarter of last year, with casino revenues likely being down slightly and non-gaming revenues being up. And we're projecting Strip RevPAR to be up 1.5% to 2.5% against that tough comp. And margins will probably be essentially flat from a year ago. We continue to expect our full-year targets to remain, as we've said, unchanged. We expect that we can achieve Las Vegas Strip revenue growth of the low to mid-single digits. We think that our RevPAR will grow 4% or 5% for the year. We expect margin improvement this year of 50 basis points to 100 basis points versus where we ended up in 2016. And the macro picture here in Las Vegas, fortunately, continues to bode favorably for everyone here especially given the limited expected supply growth, the very healthy convention and leisure demand, and the overall strength in the U.S. consumer. We've had a clear vision for this company since I became the CEO. And with the execution of those strategies over the past many years, this vision has come to fruition. We are the premier owner operator of some of the best entertainment assets in the world. We have transformed this company from the inside-out to fully embrace a one company, one culture mindset to leverage our scale and the high standards for excellence and to continuously elevate our business. We have developed the culture of continuous improvement that has allowed us to provide growth opportunities to the best talent we have in our company and to become the employer of choice in this industry for newly recruited talent, and we have developed talent from within. We have a very deep bench of highly experienced people that have been promoted and are driving innovation. And we constantly strive to optimize our company structure with these long-term sustainable benefits in mind. We're very excited about the fact that our free cash flow prospects this year and beyond are so favorable. We're moving out of a development stage and into this operation stage, and we believe that will substantially increase our free cash flow. We're going to maintain a strong balance sheet. We are disciplined in terms of capital allocation and returning value to our shareholders will continue to be the top of the board and the management's priorities. Every decision that we make is deliberate and centered around this vision. And we will continue to do so going forward as we build upon this organization and build upon our competitive advantages in Las Vegas, Macau, our regional markets, or anywhere else across the globe where we will call home. And with that, operator, I'd like to turn it back over to you, so we can get to the Q&A.

Hey. Good morning, everyone. There are a lot of places where we could begin, but I wanted to start with Cotai. A question we get often is what's behind the delay. And is it systems? Is it construction? Are you reconfiguring it in one way, shape or form, particularly given how the VIP numbers have started to lift? Grant, if you could just give us some sense of where this is going, particularly on the marketing side, as you open?

Okay. Well, I think, everyone understands building anywhere in the world is complicated, and I think everyone has seen from all the other operators it's probably just as complicated in Macau. We're very, very committed to making sure we do something different. We need to be bringing something unique into the market, and that's really the crux that – the key aspect for us. And we've said it quarter-after-quarter, it's about getting it right. Picking up on your point, Harry, about the VIP, yes, it's starting to move, that seems to be positive. There is an uptick with civil operators, and I think we've consistently heard that. I just want to reiterate though that in terms of our mass business, ours is continuing to be very strong, very important for us that we manage that portfolio. With only one operating business unit at the moment, that does put us into something of an advantage. But the critical point is that we are starting to build out the combined business unit strategy between Macau and Cotai. And we will be launching in the not too distant future, a very significant marketing program that starts reinforcing and building on that brand value that Jim was talking about in the presentation.

That's very helpful. It's – there'll probably be some additional questions on that. But I wanted to move over to Dan. I had a question on a new slide that you presented, page 24, when you discussed free cash flow. And, Dan, can you give us a sense of as we get deeper into this year, your perspective of how your domestic free cash flow is likely to evolve?

Well, sure, Harry. Look, what we tried to do at 24 is give the investment community, kind of the building blocks of that domestic profile and look of how all of the pieces are coming together to give you better perspective of that sources and uses more or less. So, that's what 24 really gives folks. It isolates the domestic group apart from MGP and MGM China. And I think as we continue to move throughout the year, as Jim mentioned earlier, and move beyond our development cycle here with the close-out of National Harbor, obviously, we'll be finishing this year and next year, Springfield, and getting that opened by September of next year, we'll be heavily out of that capital intensive development cycle and see our cash flow – free cash flow continuing to improve and grow as not only we grow operationally and maximize our profitability at our existing properties. We bring on Borgata for the full year, continue to ramp-up National Harbor and the lowering of the development capital will just have a profound impact on growing our free cash flow profile starting this year and into next year.

But can you – I guess, as a follow-up, can you discuss the timing or the pacing of how your CapEx actually winds down this year and next?

Well, sure. I mean, obviously, we've laid out what our capital plans are in terms of not only our maintenance and our same-store property growth capital, but our project plan. So, I think we have about another $80 million-ish to close out National Harbor's construction cost. We'll spend about $240 million, $250 million this year in total for Springfield and a little less next year in completing that property. I think it's around $230 million, $240 million for Springfield next year. But those are really the only two remaining large pieces of capital. And then, of course, from time to time, you're going to see kind of us pulling on the various levers and opportunities we have much like you saw here in April with our ability to bring $300 million back into this restricted group from CityCenter.

And Dan – maybe just to add to that, Harry, I think you're just focused on CapEx. So, just if you looked out the last – next three years or four years, our CapEx is $400 million, $500 million a year.

Yes. I think this year – for our properties, it's about $540 million this year which is inclusive of the Park MGM and NoMad construction which is probably a couple hundred million in that number, this year alone.

And I mean if you were going to model out over the next three – I mean, if you're doing like a three year or four year model, you're going to figure CapEx is no more than $500 million a year.

Right. Yeah.

And we have no projects of any material nature like Springfield or National Harbor on the horizon.

Beyond 2018, that's right.

So, we have – and in that $400 million, $500 million a year is all our room remodels, all the refreshes, expansions to convention centers. All the areas that we spend money on to continue to grow our market share and our market. So, that's what I was trying to allude to, Harry, is that we just had a major capital finish at National Harbor that's tailing out right now. We're going to finish Springfield, and there's no new project down the horizon in the United States and we like what we own. And so, we believe with our operating revenues and cash flows growing and our CapEx to be completely controlled by ourselves and very definable, that's where you lead to – even before dividends, that's where you lead to rapidly accelerating operating free cash flow.

That's great. Thanks, guys. Appreciate it.

Thanks, Harry.

Good morning, everybody.

Hey, Joe.

Maybe this is a question for Corey, but whoever wants to answer it. Can you talk about how next year's convention room night on the Las Vegas Strip look? And if you want to talk about it in terms of pacing versus a year ago, and maybe you can talk about it both with and without the impact of this year's CON/AGG CONEXPO?

Sure, Joe. It looks pretty big and similar to few years ago when CONEXPO rotated out. We actually are in a similar spot to where we are this year. We're a little bit behind in the first quarter, but we're really comfortable that we'll be able to fill that spot there for CONEXPO. But in general, the rest of the quarters are actually looking very comparable to where we are today.

And the pricing for those room nights versus this year?

Yeah. Pricing – we continue to be able to raise prices in this segment, so it's up.

Yeah. And, in fact, Joe, I mean, right now, we have NAB, of course, in town, right? Corey and Bill, Dan? It's performing extremely well for the market. Well, I could say it's performing extremely well for us and probably for the market. So, here we are in the second quarter. That's doing well. I was with the CEO of a very, very large tech company yesterday, and he's looking to move more business to Las Vegas from another state in the United States. So, there's a lot of untapped potential for the market, which will benefit our competitors, ourselves, and the convention center at large.

Great. Thank you. And then maybe this is a question for you, Jim, and Grant, over in Asia. Obviously, we're not seeing it so much in the 1Q here but – and I asked this question last night on another gaming conference call. Are you starting to see any signs of the Chinese consumer returning to Las Vegas, and do you think what's going on maybe some of the dynamics in China and Macau are actually encouraging those players to stay closer to home in Macau? Thank you.

You want to tackle that, Grant?

Sure. I'll start. I think, Joe, what we're seeing, let's start to talk about China itself. If you start looking at consumer trends in China, there is clearly momentum building in the consumer products market. If you look at some of the areas that the Chinese use as their own indicators, they're starting to improve. There's starting to be some momentum. We're clearly starting to see it coming into Macau, and that's all very positive for us. And I think to your point about geopolitical issues, I think that hopefully that those people within China will play within China. But I think, if they're going to travel, and obviously that's probably something that Jim and Corey and Dan, etc. can have a view on, but they're also seeing the United States as a positive destination, too. So, all of the indicators at the moment within China are positive.

And, Joe, here in Las Vegas, as we pointed out, I think it was last fall, we started to see players coming back into the market. The most recent data point is really around Chinese New Year. So we had a really good showing around Chinese New Year with our customers in terms of numbers and volume up this Chinese New Year versus last year. And as you recall, the last couple of Chinese New Year's periods, we're actually down and we were down double-digits against each of the prior years. So, we have seen that pick up recently with respect to play coming out of China and Asia, broadly speaking, which is a good sign.

And I would say, Joe, on our bigger customers, the people like 50,000 and above, the number of trips are actually up in the first quarter for that region.

Great. Thank you, guys.

Thanks, Joe.

Hey, guys. Thanks. Good morning. Jim, I think you laid out pretty clearly the second quarter and some of the challenges there. I wanted to talk a little bit about what is actually the toughest comp quarter of the year, the 3Q? And maybe, Corey, if you could help better frame or help us better understand the influence of having that Microsoft business in the quarter? And in a period with a lot less visibility, what it's like to have 4% or 5% of your room nights, kind of on the books already with that, and what it may allow you to do with pricing?

Hey, Corey, do you want me to start?

Yeah.

You know, it's – when we were more concerned about the third quarter that was before we had the Microsoft business on the books. That clearly helps us profoundly in the quarter in terms of not only the business itself but, as you suggest, how we can plan around the rest of the market. We had a very, very strong third quarter, that's why it is a challenging quarter. But we're seeing, and I was with Mike Dominguez yesterday with this very large tech CEO, and he's seeing some business coming into the third quarter, not only because Microsoft is going to be here, we're getting some ancillary business that's being booked, but also just general in the quarter, in the year, for the year for the quarter. So, yeah, tough quarter, tough comp but we did better than we thought in the first quarter, as I said, that April here, NAB is better than we predicted, it's sort of good bellwether even though there's a tough comp this quarter, we are seeing good growth and we're just going to do our best. We've been outperforming our expectations, and we're just going to do our best in terms of the convention side. One thing I alluded to, and maybe Corey can get in more specifically, is our mix shift, one of the things that helped us in the current quarter, right, Corey, is shift out of leisure into FIT?

That's right.

So, how that's going to look, Corey?

Over the last few quarters, we've been really focused on that. We actually shifted probably about 2% into that FIT channel. We haven't talked about this in a long time but, actually, the premium in that channel compared to the leisure channel, could be anywhere from $30 to $60 depending on the season of the year. So, with the convention base, it allows us to do it. When you look at Microsoft has done for us now in the third quarter, we're actually ahead of convention room nights on the books compared to the prior year now with that. So, it's allowed us to solidify our base. Our convention rate actually is a little higher now which should hopefully allow us to yield our rates up a little better than normal. Just as a reminder, summer times are – there's peak times when there's decent convention business, and where there's not, it's a – we'll always fill the rooms but the rate's always a little bit of a challenge.

Right. Great. That's very helpful. Thank you, guys. And then if I could just one follow-up, Jim, you talked a little bit earlier about capital returns and, obviously, as you look at the free cash flow profile over the next 12 months, 18 months, 24 months, there is clearly going to be a lot of discretion with your cash going forward as you – especially once Cotai is open. How do we or how do you guys right now – if you look at it right now, 24 months out, how are you kind of thinking about the buyback? Obviously, dividend in place as of last quarter and other kind of capital returns, or capital needs for things that maybe haven't necessarily come to fruition yet in terms of projects or expansions?

Sure. We spend probably, Dan what – I would say the majority of the discussions we have at the board level is that over the past several years, we've been good forecasters internally of our business. We've laid out a rolling five-year plan to our board over the past many years. And fortunately for us, we've been executing on that five-year plan. So the board is – this is not a new discussion to the board. We've discussed what we're going to do and how we evolve our investment decisions as we go from 2014 to 2015, 2015 to 2016, 2016 to 2017 and beyond. And it is the board's belief that we have high confidence in where our numbers are going over the next three years. We see our competitive position in our marketplace. We think we have a better understanding than most of the macro dynamics within the markets in which we currently operate. We are very confident in our property positioning. We have no looming capital needs, no deferred maintenance, no projects that we put on hold that need to be jumpstarted. Our capital spend is very well defined, and will be very, very highly scrutinized by our board over the next several years. We have no interest in building for growth's sake, and we have no interest in expanding for expansion's sake. We like what we own. We like the markets that we're in. And in order for us to get attracted to anything else it has to be outsized in terms of its potential return to shareholders. So, with that in mind, if we know where we are in a market – in all our markets, and we know very clearly what we believe our capital expenditures will be, and we have this stated goal of being in the 3 to 4 times leverage range, which we're knocking on that door, then the logical discussion evolves to what you do with that excess free cash. And we concluded that the first best use of that was to institute the quarterly dividend and expect that that dividend will grow over time. But share repurchase clearly has been something we've discussed at the board level for three years. It is not a matter of if we are going to do that, it's a matter of when we do it. And I would say that a board as engaged as ours, that spends as much time on this as our board does, that meets us often as we do a year, about eight times a year, we will have constant updates for you. As of right now, here in April, we believe that our path is well-understood and that we are using the cash that we have appropriately. And that share repurchase today, this day, is not the right idea. But, we do believe that it is our job to return the capital that we are generating to our owners. And that's going to be making sure that we grow our revenues and cash flow. Making sure our competitive advantages are there. Making sure that we have a fortress balance sheet that will protect us against any unforeseen event. And making sure that we have the ability to return the capital in the form of dividends and share repurchase in the future.

That was very thorough. Thank you very much, Jim. Thank you.

Thanks, Carlos.

Hey. Good morning. Just on the regional properties, I was impressed by the flow through at both Detroit and Borgata. I'm wondering, are you starting to roll out programs there? Are you just starting to roll out programs there? And then on National Harbor, is there an opportunity on margins there?

So, on Detroit, they've been rolling out programs consistently with our PGP initiatives. And there's still some opportunities there. They're probably a little bit behind. With the Borgata acquisition, we've matched up all our initiatives with what they could potentially achieve. And yes, we are seeing results from those in the first quarter. And we expect to see results from them throughout the year.

National Harbor.

National Harbor – margins?

On National Harbor margins, yeah, we think there's a lot of opportunities there to improve them, stabilize. The workforce is stabilized now which is a positive thing now. It's matching forecasts with volumes and implementing some PGP initiatives there that we probably delayed for their opening to make sure that they could execute for their opening.

Helpful, thanks. And just as my follow-up. It was helpful, the new slide you put in showing the hold adjustments. But one thing that stood out was that you had five quarters in a row of high hold. Did you think about thinking of maybe increasing the theoretical hold?

Well, Thomas, this is Dan. We've looked at it and we studied it and obviously it'll be something we continually look at. We feel comfortable that 21% to 25% is the right range. And obviously, it'd be something we continue to evaluate. A lot of the initiatives and a lot of the approach that we've taken over the past 18 months to 24 months with respect to how we drive profitability in our table games business is driving some of that increase, and we'll continue to monitor that, but based on the work that we've done thus far looking at the past couple of years, 21% to 25% seems to be the right range in terms of that hold percentage.

Yeah. If you went back five years, you would say, you shouldn't change the range.

Yes. Yes.

So, we get the point. We're going to watch it, quarter-to-quarter, but we did a lot of work on this and we've gone back over the last three years to five years, and that's a right amount of range. We might be able to tighten it up and, hopefully, move it up at some point.

Great. Thank you.

Thank you.

Hi. Thanks. So, guys, so realizing that your 2017 EBITDA guidance provided at the Investor Day is old news, given everything that's happened since then. I was just hoping you could frame for us how you're thinking about full-year EBITDA now year-over-year? Should we expect to see growth year-over-year? I just think it would be helpful if you could give us a bridge as we think about that particularly given that the second quarter could be kind of flattish and then there was also the gain on sale on assets which makes for a tougher comp?

Well, sure, Felicia. I think when you look at our full year, and the guidance and color we've given, we do believe that for the full year, we'll be able to grow low to mid-single digits on the top line and improve our margins by 50 basis points to 100 basis points. So, that would put us in kind of the 30% to 31% range overall in terms of our margins. That's adjusting for some of the ins and outs from the prior year as well as really kind of normalizing the hold overall as we look at our Strip performance and the guidance we've given for 2017. Probably one of the bigger deltas from the Investor Day is really the timing of MGM Cotai as when we're putting those models together last year for the Investor Day, Cotai was still on target for an early 2017 opening. And, obviously, with the later opening, that pushed that timing out and that impact to the model. That's probably the biggest singular change. As always, ins and outs and odds and ends. But we feel pretty good that here in Las Vegas, we'll be able to continue to grow and maximize the opportunity here, the regionals as well. And, obviously, you've seen the power of Detroit, Borgata and our ability to ramp with National Harbor coming online this year. So, we feel good about directionally where we're heading overall for 2017.

Thanks. I think just to be clear because I might not have been clear, I was really more talking about second half because you gave the guidance in the deck, I saw that, but you guys – you had the upside in the first quarter, flattish in the second quarter. So, I just wanted to kind of confirm that you do actually see growth in the second half.

Yes, we do.

We do. Yeah. The biggest change from that deck is the shift of the opening of Cotai, Felicia. But operationally, we remain on track.

Okay. Great. And then you completed your PGP program ahead of plan. So, I was just wondering if you could talk about what drove the acceleration. And then as you think about the next several years, how should we think about profitability drivers with that program being completed?

Well, do you want me to do it, or Corey, you want to do it.

You start and I'll...

I'll start. So, the way we were able to upsize it and get it done so quickly is to create top-down focus in this whole organization. It wasn't an initiative that was sidelined by a handful of people, it was pervasive throughout the entire organization. And there's no one here at this company that is not acutely aware of what we've been doing, now I'm talking tens of thousands of people. So, it takes a very coordinated effort, it also takes a very focused effort in the project management office, that has since its inception been led by Jeff Gebben, who is a rock star. And – so, we went into this with good guidance from other companies that are Fortune 100 companies that really helped us a lot. We went in this with good guidance with Bain as our consultant. And we have really taken it on-board as a change of our lifestyle here. And it has led to not only what you saw financially, but it has led to a morale accelerator here and really a cultural boost. And so, we believe that this is a program that's now just part of our life. As it relates to what it means for the future, we – as we said, we think we understand our business quite well and we're expecting 50 basis points to 100 basis points increase in our margins against a pretty good year in 2016. And we don't think we're going to end there. We expect and would be disappointed if we can't grow margins every year over the next three years or four years because we continuously find ways to do our business better. And so, I don't know where this journey is going to end, but it's not going to end this year and I expect continued leadership in our industry in terms of margin, in terms of the absolute margin, and the growth of the margin.

And what I would add is continuous improvement is now part of our culture, and it's actually part of our compensation plans and everything else. All of our executives are bonused on it. We have a list of initiatives we could constantly and continue to work on that have some pretty good size. And with the change in technology and the advancement in analytics and eventually AI, there's probably numerous opportunities out there to constantly find new ways to make additional EBITDA. The great thing about the PMO office is it gives us the structure to sustain what we have already achieved, but also continue then look for new opportunities which some we could accelerate because they're easier, and some are a little bit harder, but there's still opportunities out there.

Okay. That's helpful. Thanks. Dan, just a quickie, on the hold impact this quarter, how much did it benefit and were there specific properties that had higher holds that you want to call out?

Mirage held exceptionally well. Bellagio was a benefactor of that hold, and I would say MGM Grand was not a benefactor of hold in the quarter, if I was to look at the highs and lows in the quarter.

That's right.

And the total net was?

I think we said in the appendix of the deck.

$16 million.

But that is the normalized, the midpoint of the normal range.

$16 million.

Yes. And that was about mid-teens, right? Mid-teens millions?

In EBITDA.

Yeah. Yeah. 16.

16.

Okay.

Thanks so much. Thanks, Felicia.