David Katz: I understand. I appreciate it. I hope you can allow me to ask it. Thanks.
William Hornbuckle: Thank you.
Operator: The next question comes from Stephen Grambling with Morgan Stanley. Please go ahead.
Stephen Grambling: Hi. Just thinking about Vegas into 2024, do you generally think of this year as being more of a lodging and F&B year versus a gaming year? And in that context, how should we think about OpEx per day growth in Vegas specifically in the year? What are the major puts and takes to think through?
Jonathan Halkyard: Yes. Actually, I think that’s probably a good way to characterize it. When we look at the drivers of growth this year, and we’ve talked about a few of them already, a lot of it relates to yielding, pricing, of course, growing demand through this new Marriott partnership and so on.
William Hornbuckle: Conventions.
Jonathan Halkyard: Yes, and the conventions business. Thank you, Bill. So those are going to be the main drivers of top line growth. As it relates to OpEx, while, of course, we don’t provide guidance for either the top line or the bottom line, we are looking at increases, the main increases associated with our new labor agreement here in Las Vegas with a culinary union. So that will be at least a year-over-year factor for the first half of the year, not really in the back half of the year, since we already incurred that in the last six months of the year. That will be the main issue for us. We’ll be able to offset that in part through some work we’re doing around productivity as well as improvement in cost of sales through leverage procurement activities. But I think kind of a low to mid-single-digit OpEx growth rate, I wouldn’t be surprised if we incur that this year.
Stephen Grambling: And then maybe one other follow-up just on the buyback, I guess, how do you think through the pace that we should be anticipating this year? And what’s kind of the upper bound in terms of leverage that you should be thinking through?
Jonathan Halkyard: The upper bound of leverage would be 4.5 times lease-adjusted leverage, and we’re a full turn below that right now. I think I mentioned in the prepared remarks, we retired 14% of our outstanding shares last year. It may have been our largest share repurchase year-to-date. I wouldn’t anticipate continuing at that pace this year. But we’re still active in the market. We still think that the shares are attractively valued. And we still have a fair amount of dry powder, just augmented with our revolving credit increase, to enable us to do that. So I would say it’s likely going to be less than it was in 2023, but we’re still being aggressive.
Stephen Grambling: Great. Thanks so much. Best of luck.
Jonathan Halkyard: Thanks.
Operator: The next question is from Dan Politzer with Wells Fargo. Please go ahead.
Daniel Politzer: Hey, good afternoon, everyone, and thanks for taking my questions. First, I wanted to drill in a little bit just in the fourth quarter in Las Vegas. I think your same-store revenues were up about 10%, margins down a couple of hundred basis points. I know there’s a lot of moving pieces in there in accruals and maybe some cyber impact and hold, but hoping maybe you could just parse that out as it would be helpful for us to think about that 2024 OpEx guide you mentioned.
Jonathan Halkyard: Sure. When we kind of parse it out, accounting for unusual items or things that we wouldn’t expect to recur, we think that the margin in the fourth quarter in Las Vegas was maybe benefited by about 100 basis points. So that still puts us right in the mid-30s, which is where we’ve kind of expected the margins to be for some time. That’s where we expect them to be for 2024.
Daniel Politzer: Got it. That’s helpful. And then I guess, more broadly on Las Vegas, as we think about kind of the remainder of the year, I think March, you have CON/AGG rolling off, March Madness, but you have group, as you mentioned, kind of pacing better. How should we think about kind of baking it all in, in terms of an expectation for growth, or any major tent-pole events to kind of call out for the remainder of the year that we should get excited about?
William Hornbuckle: We’ve got just top line, off the top of my head, Madonna’s coming, Springsteen’s coming, The Stones are coming, to name three. We’ve got a great football kickoff with USC, LSU coming. To your point, obviously, March Madness is always a big deal around here. And then Formula 1 rolls back around again. We are going to miss the Pac-12 championship next year. No, we’ve got one more year, I take that back, so we won’t miss that. And so we all must admit, 2023, and if you think about the recent stretch we’ve just been through, was an amazing year and an amazing stretch. So replicating that won’t be easy. But having said that, we still have plenty of content and activity case that kind of fill the void and fill the dates.
Corey Sanders: And from a city perspective, I think the Sphere has been a great addition. The T-Mobile will be programmed more than it was last year. So all-in-all, I think it’s going to be a really strong year. As you think about March, it won’t only be CON/AGG, we also have Easter ending in March. So that will have a slight impact in March on the convention business but will be picked up in April.
Daniel Politzer: Got it. Thanks so much for all the help.
Operator: The next question comes from Shaun Kelley with Bank of America. Please go ahead.
Shaun Kelley: Hi. Good afternoon , everyone. Thanks for taking my questions. Maybe just sticking with Las Vegas for a moment, Bill, you called out a lot of great commentary and color around the high end, just wondering if you could give us a little bit more color on maybe those core properties kind of outside the high end. What are you seeing on the customer behavior side? What’s going to take to drive some growth and improvement at some of those properties as you look out to 2024?
William Hornbuckle: Well, I’ll tell you one thing and Corey can pick this up. But the flow-through, or the spill-off, I should say, from the 100,000 more room nights principally at Mandalay for conference and convention business does flow into Luxor with setup crews, pieces and parts of these various groups, even in the Excalibur. So I think that’s an opportunistic thing. Obviously, whether it’s resort fees on through, we’ve gone through with a pricing exercise. We’ll continue to do that to try to recapture, particularly the culinary increase, which we all know this year is going to be an extensive one. Then it falls off and basically flattens out for the balance of the 4.5 years. So Corey, anything?
Corey Sanders: Yes, the legacy properties, the growth is going to be a little bit limited there. It’s a small percent of our Vegas revenue. As Bill mentioned, the convention mix, not just here but in town, in citywide, will help some overflow there. But it definitely won’t have the same benefits that the luxury properties are and will see.
Shaun Kelley: Great. Thanks. And just as my follow-up, I think it was called out in the prepared remarks, but $1 billion earmarked across a variety of things, including international, digital, just help us think through what some of the criteria would be there. I mean, again, I know a lot of eyeballs are focused on something more transformative with your partner. But it sounds like this is more along the lines of what you’ve done with LeoVegas. So maybe just give us some parameters of what could check some boxes for you in terms of that opportunity looking out for this year or next?
William Hornbuckle: Sure. We contemplated four key pillars to getting and setting up our own shop, if you will. And so we bought LeoVegas with that in mind. We’ve obviously now gone and bought Push Gaming, which is a content studio. By the way, their first game, MGM Millions, or MGM Money Millions, whatever it’s called, number one game on our network, number one, first game out, branded with MGM. We are on the heels of buying Sports Technology. We want to obviously be in our own sports betting business with our own technology. And over time, we have Kambi that we use for LeoVegas. We are on the heels of a deal for Live Dealer where we’ve talked about and had a vision of broadcasting live games from Las Vegas to rest of world with some celebrities and entertainment tied to them, and we’re on the heels of that.
I’m heading down to South America next week or the week after to look at a large JV. Brazil is going to put Internet gaming in play for both casino and sports betting, and we plan to be there when that launches. And so we’re focused on building that business at its core into a real business. We’ve taken BetMGM U.K., as we’ve talked about. We’ve got well over 100,000 first-time depositors already in the 4.5 short months. And we’re looking at another country already to do the same thing. And so we’re going to grow the business. And if we ultimately acquire something else, time to tell, but for now staying focused on that is paramount to us.
Shaun Kelley: Thank you.
