LAS VEGAS, May 6 /PRNewswire-FirstCall/ -- MGM MIRAGE (NYSE: MGM) today
reported its first quarter 2008 financial results. The Company earned $0.40
per diluted share from continuing operations in the first quarter, compared
to $0.55 in the prior year. The Company experienced low-single digit
percentage decreases in both gaming and non-gaming revenues on a
quarter-over-quarter basis, while earnings were also negatively impacted by
the temporary closure of Monte Carlo and ramp-up costs related to the
recent opening of two major resorts.
Key results for the quarter:
-- Net revenue decreased 2% to $1.9 billion;
-- Las Vegas Strip REVPAR(1) decreased 4%;
-- Casino revenue decreased 3%, mainly as result of lower table games
volume at the Company's Las Vegas Strip resorts;
-- Property EBITDA(2) was $575 million, a 12% decrease from the
2007 quarter;
-- Monte Carlo earned Property EBITDA of $14 million compared to
$34 million in prior year quarter; the resort was closed from
January 25, 2008 through February 14, 2008 due to a rooftop fire, and
approximately 20% of its rooms and suites remained out of service at
quarter-end;
-- Completed a joint tender offer with Dubai World for the purchase of
15 million shares of common stock, of which the Company purchased
8.5 million shares at a total cost of $680 million;
-- Repurchased an additional 7 million shares of common stock in the open
market for $427 million.
The following table lists certain items which affect the comparability
of the current year and prior year quarterly results (earnings per share
impact shown, net of tax, per diluted share; negative amounts represent
charges to income):
Three months ended March 31, 2008 2007
Profits from The Signature at MGM Grand........ $- $0.02
Preopening and start-up expenses............... (0.01) (0.03)
"Our business should be evaluated in the context of the state of the
economy," said Terry Lanni, MGM MIRAGE's Chairman and CEO. "The gaming
industry and our company have seen considerable growth within the last
several years, and even with near-term weaker economic conditions our
resorts are still attracting premium customers and generating tremendous
cash flow. We are focused on our fundamental strategies which have
consistently produced positive results."
Detailed Discussion of First Quarter Operating Results
Casino revenue decreased 3%, mainly due to a decrease in table games
volume of 4%. The overall table games hold percentage was near the high-end
of the normal 18% to 22% range in the current quarter and slightly higher
than in the 2007 quarter. Slots revenue decreased 1% compared to the prior
year. Several of the Company's Las Vegas Strip resorts reported increases
in slots revenue including Bellagio, The Mirage, and Mandalay Bay, which
all reported mid-single digit percentage increases. Excluding Monte Carlo,
Las Vegas Strip slots revenue was consistent with the prior year.
Additionally, slots revenue at MGM Grand Detroit increased 9% as a result
of increased capacity in the permanent casino.
Rooms revenue decreased 6%, with a 4% decrease in Las Vegas Strip
REVPAR. Average room rates were down 2% at the Company's Las Vegas Strip
resorts. Las Vegas Strip occupancy also decreased, and the Company had
approximately 60,000 less rooms available, mainly due to the Monte Carlo
fire. The following table shows key hotel statistics for the Company's Las
Vegas Strip resorts:
Three months ended March 31, 2008 2007
Occupancy %............................. 93% 96%
Average Daily Rate (ADR)................ $165 $169
Revenue per Available Room (REVPAR)..... $155 $162
Food and beverage revenue decreased 4% as the Company's restaurants and
nightclubs were also impacted by the decrease in occupancy and the slowdown
in consumer spending. Entertainment revenues held steady, despite fewer
concerts and sporting events, led by strength in the Company's Cirque du
Soleil production shows.
The Monte Carlo was closed from January 25, 2008 through February 14,
2008 due to a rooftop fire and a significant portion of its rooms and
suites remained out of service through the end of the quarter. The Company
maintains substantial property and business interruption insurance and to
date has received a total of $50 million of insurance recoveries, including
$22 million received as of the end of the first quarter. The Company
recorded recoveries of costs incurred during the period, but will not
record recoveries for lost profits until all contingencies with the
insurance claim have been resolved. Monte Carlo earned Property EBITDA of
$14 million compared to $34 million in the prior year quarter.
MGM Grand Macau, of which the Company owns 50%, was open for its first
full quarter of operations and produced Property EBITDA of $43 million and
operating income of $23 million. The Company recognized its share of MGM
Grand Macau's results as follows: $10 million of income in the "Income from
unconsolidated affiliates" line, and $5 million of expense in the
"Non-operating items from unconsolidated affiliates" line for the Company's
share of MGM Grand Macau's interest expense and other non-operating
expenses.
Operating income decreased 23% for the quarter to $341 million as a
result of the decrease in revenue described above, and the increased costs
of operating the larger MGM Grand Detroit. The Company's operating margin
was 18% and Property EBITDA margin was 31% in the quarter versus 23% and
34%, respectively, in the 2007 quarter. Preopening and start-up expenses
were lower during the current quarter and mainly related to the Company's
share of preopening expenses at CityCenter. Additionally, the prior year
quarter included $8 million of profit from closings on units of The
Signature at MGM Grand Las Vegas.
"We must continue to concentrate on our customers and the celebrated
experiences we provide at our resorts," said Jim Murren, MGM MIRAGE
President and Chief Operating Officer. "Additionally, we have always been
committed to operating our resorts at maximum efficiency. Over the past
several months we have been implementing various new revenue enhancement
and cost savings initiatives. We will continue to make substantial
long-term investments in our people and resorts."
Financial Position
First quarter capital investments totaled $236 million which included
$61 million on room and suite remodel projects, primarily at The Mirage,
TI, and Excalibur; expenditures of $10 million for remediation efforts at
Monte Carlo; $19 million of trailing payments for MGM Grand Detroit; and
$28 million for corporate aircraft. The remaining $118 million was for
other routine capital expenditures and various new and upgraded amenities
at the Company's resorts.
During the quarter, the Company repaid $180 million of its senior notes
at maturity, and the Company and Dubai World each funded $200 million of
construction costs for CityCenter. The Company and Dubai World are
currently in discussions with several financial institutions with regard to
bank financing for the project.
The Company purchased 8.5 million shares upon completion of its joint
tender offer with Dubai World for a total cost of $680 million.
Additionally, the Company repurchased 7 million shares in the open market
for $427 million during the first quarter, leaving 2.6 million shares
available under the Company's share repurchase authorization. Available
borrowing capacity under the Company's senior credit facility was $1.9
billion as of March 31, 2008.
"Our company continues to generate strong cash flow and has significant
debt capacity under our credit facilities," said Dan D'Arrigo, MGM MIRAGE
Executive Vice President and Chief Financial Officer. "This combination
provides ample capital flexibility to meet all of our strategic growth
initiatives and maintain our strategic focus during a difficult time in the
credit markets."
MGM MIRAGE will hold a conference call to discuss its first quarter
earnings results and outlook for the second quarter of 2008 at 11:00 a.m.
Eastern Daylight Time today. The call can be accessed live at
http://www.companyboardroom.com or http://www.mgmmirage.com, or by calling
1-800-526-8531 (domestic) or 1-706-634-6528 (international). Until Tuesday,
May 13, 2008, a complete replay of the conference call can be accessed by
dialing 1-706-645-9291, access code 42415451. A complete replay of the call
will also be made available at http://www.mgmmirage.com. Supplemental
detailed earnings information will also be available on the Company's
website.
(1) REVPAR is hotel Revenue per Available Room.
(2) "EBITDA" is earnings before interest and other non-operating income
(expense), taxes, depreciation and amortization. "Property EBITDA" is
EBITDA before corporate expense and stock compensation expense.
EBITDA information is presented solely as a supplemental disclosure
because management believes that it is 1) a widely used measure of
operating performance in the gaming industry, and 2) a principal basis
for valuation of gaming companies. In addition, capital allocation,
tax planning, financing and stock compensation awards are all managed
at the corporate level. Management uses Property EBITDA as the primary
measure of the Company's operating resorts' performance, including the
evaluation of operating personnel. EBITDA should not be construed as
an alternative to operating income, as an indicator of the Company's
operating performance; or as an alternative to cash flows from
operating activities, as a measure of liquidity; or as any other
measure determined in accordance with generally accepted accounting
principles. The Company has significant uses of cash flows, including
capital expenditures, interest payments, taxes and debt principal
repayments, which are not reflected in EBITDA. Also, other gaming
companies that report EBITDA information may calculate EBITDA in a
different manner than the Company. Reconciliations of consolidated
EBITDA to net income and of operating income to Property EBITDA are
included in the financial schedules accompanying this release.
* * *
MGM MIRAGE (NYSE: MGM), one of the world's leading and most respected
development companies with significant holdings in gaming, hospitality and
entertainment, owns and operates 17 properties located in Nevada,
Mississippi and Michigan, and has 50% investments in four other properties
in Nevada, New Jersey, Illinois and Macau. MGM MIRAGE is developing major
casino and non-casino resorts, separately and with partners in Las Vegas,
Atlantic City, the People's Republic of China and Abu Dhabi, U.A.E. MGM
MIRAGE supports responsible gaming and has implemented the American Gaming
Association's Code of Conduct for Responsible Gaming at its properties. MGM
MIRAGE has received numerous awards and recognitions for its
industry-leading Diversity Initiative and its community philanthropy
programs. For more information about MGM MIRAGE, please visit the company's
website at http://www.mgmmirage.com.
Statements in this release which are not historical facts are "forward
looking" statements and "safe harbor statements" under the Private
Securities Litigation Reform Act of 1995 that involve risks and/or
uncertainties, including risks and/or uncertainties as described in the
company's public filings with the Securities and Exchange Commission.
MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
------------------------------
March 31, March 31,
2008 2007
------------------------------
Revenues:
Casino $ 790,464 $ 811,939
Rooms 518,741 549,004
Food and beverage 402,392 417,449
Entertainment 134,838 134,248
Retail 64,037 68,250
Other 147,973 122,070
----------- -----------
2,058,445 2,102,960
Less: Promotional allowances (174,812) (173,525)
----------- -----------
1,883,633 1,929,435
----------- -----------
Expenses:
Casino 416,563 411,792
Rooms 136,797 135,185
Food and beverage 236,272 235,704
Entertainment 95,664 97,243
Retail 43,164 43,744
Other 92,564 68,808
General and administrative 320,374 311,674
Corporate expense 32,450 33,955
Preopening and start-up expenses 5,164 14,276
Restructuring costs 329 -
Property transactions, net 2,776 5,019
Depreciation and amortization 194,339 168,277
----------- -----------
1,576,456 1,525,677
----------- -----------
Income from unconsolidated affiliates 34,111 41,375
----------- -----------
Operating income 341,288 445,133
----------- -----------
Non-operating income (expense):
Interest income 3,466 2,657
Interest expense, net (149,789) (184,011)
Non-operating items from
unconsolidated affiliates (9,891) (5,106)
Other, net 230 (2,728)
----------- -----------
(155,984) (189,188)
----------- -----------
Income from continuing operations
before income taxes 185,304 255,945
Provision for income taxes (66,958) (92,935)
----------- -----------
Income from continuing operations 118,346 163,010
----------- -----------
Discontinued operations:
Income from discontinued operations - 7,846
Provision for income taxes - (2,683)
----------- -----------
- 5,163
----------- -----------
Net income $ 118,346 $ 168,173
=========== ===========
Per share of common stock:
Basic:
Income from continuing operations $ 0.41 $ 0.57
Discontinued operations - 0.02
----------- -----------
Net income per share $ 0.41 $ 0.59
=========== ===========
Weighted average shares outstanding 288,943 284,021
=========== ===========
Diluted:
Income from continuing operations $ 0.40 $ 0.55
Discontinued operations - 0.02
----------- -----------
Net income per share $ 0.40 $ 0.57
=========== ===========
Weighted average shares outstanding 298,400 295,577
=========== ===========
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA - NET REVENUES
(In thousands)
(Unaudited)
Three Months Ended
------------------------
March 31, March 31,
2008 2007
----------- -----------
Las Vegas Strip $1,548,057 $1,626,343
Other Nevada 36,850 44,432
MGM Grand Detroit 144,780 116,134
Mississippi 134,222 142,526
Other 19,724 -
----------- -----------
$1,883,633 $1,929,435
=========== ===========
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA - PROPERTY
EBITDA
(In thousands)
(Unaudited)
Three Months Ended
------------------------
March 31, March 31,
2008 2007
----------- -----------
Las Vegas Strip $ 479,496 $ 548,842
Other Nevada (685) (1,996)
MGM Grand Detroit 34,412 34,826
Mississippi 27,370 35,403
Other 4,579 -
Unconsolidated resorts 29,367 38,142
----------- -----------
$ 574,539 $ 655,217
=========== ===========
MGM MIRAGE AND SUBSIDIARIES
DETAIL OF CERTAIN CHARGES
AFFECTING PROPERTY EBITDA and
EBITDA
(In thousands)
(Unaudited)
Three Months Ended March 31, 2008
---------------------------------
Preopening
and Property
start-up Restructuring transactions,
expenses costs net Total
----------- ------------- ------------- ---------
Las Vegas Strip $ 226 $ 329 $ 2,789 $ 3,344
Other Nevada - - - -
MGM Grand Detroit 194 - 8 202
Mississippi - - 5 5
Unconsolidated resorts 4,744 - - 4,744
----------- ------------- ------------- ---------
5,164 329 2,802 8,295
Corporate and other - - (26) (26)
----------- ------------- ------------- ---------
$ 5,164 $ 329 $ 2,776 $ 8,269
=========== ============= ============= =========
Three Months Ended March 31, 2007
----------------------------------
Preopening
and Property
start-up Restructuring transactions,
expenses costs net Total
----------- ------------- ------------- ---------
Las Vegas Strip $ 8,472 $ - $ 278 $ 8,750
Other Nevada - - 4,630 4,630
MGM Grand Detroit 2,379 - - 2,379
Mississippi - - (2) (2)
Unconsolidated resorts 3,233 - - 3,233
----------- ------------- ------------- ---------
14,084 - 4,906 18,990
Corporate and other 192 - 113 305
----------- ------------- ------------- ---------
$ 14,276 $ - $ 5,019 $ 19,295
=========== ============= ============= =========
MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF CONSOLIDATED EBITDA TO INCOME FROM CONTINUING OPERATIONS
(In thousands)
(Unaudited)
Three Months Ended
-------------------------
March 31, March 31,
2008 2007
----------- ------------
EBITDA $ 535,627 $ 613,410
Depreciation and amortization (194,339) (168,277)
----------- ------------
Operating income 341,288 445,133
----------- ------------
Non-operating income (expense):
Interest expense, net (149,789) (184,011)
Other (6,195) (5,177)
----------- ------------
(155,984) (189,188)
----------- ------------
Income from continuing operations
before income taxes 185,304 255,945
Provision for income taxes (66,958) (92,935)
----------- ------------
Income from continuing operations $ 118,346 $ 163,010
=========== ============
MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO
PROPERTY EBITDA
(In thousands)
(Unaudited)
Three Months Ended March 31, 2008
---------------------------------
Depreciation
Operating and
income amortization EBITDA
----------- ------------ ----------
Las Vegas Strip $ 333,297 $ 146,199 $ 479,496
Other Nevada (2,186) 1,501 (685)
MGM Grand Detroit 20,061 14,351 34,412
Mississippi 11,813 15,557 27,370
Other 2,581 1,998 4,579
Unconsolidated resorts 29,367 - 29,367
----------- ------------ ----------
394,933 179,606 574,539
Stock compensation (11,203)
Corporate and other (27,709)
----------
$ 535,627
==========
Three Months Ended March 31, 2007
---------------------------------
Depreciation
Operating and
income amortization EBITDA
----------- ------------ ----------
Las Vegas Strip $ 414,945 $ 133,897 $ 548,842
Other Nevada (3,871) 1,875 (1,996)
MGM Grand Detroit 28,864 5,962 34,826
Mississippi 20,237 15,166 35,403
Unconsolidated resorts 38,142 - 38,142
----------- ------------ ----------
498,317 156,900 655,217
Stock compensation (13,580)
Corporate and other (28,227)
----------
$ 613,410
==========
MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
March 31, December 31,
2008 2007
-------------- ---------------
ASSETS
Current assets:
Cash and cash equivalents $ 327,745 $ 412,390
Accounts receivable, net 390,452 412,345
Inventories 124,190 126,116
Deferred income taxes 56,464 63,453
Prepaid expenses and other 135,269 105,412
Assets held for sale 54,435 55,670
-------------- ---------------
Total current assets 1,088,555 1,175,386
-------------- ---------------
Property and equipment, net 16,845,320 16,823,704
Other assets:
Investments in unconsolidated
affiliates 2,487,363 2,482,727
Goodwill 1,262,922 1,262,922
Other intangible assets, net 358,987 359,770
Deposits and other assets, net 852,732 623,177
-------------- ---------------
Total other assets 4,962,004 4,728,596
-------------- ---------------
$ 22,895,879 $ 22,727,686
============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 169,419 $ 219,556
Construction payable 67,546 76,524
Income taxes payable 20,034 284,075
Accrued interest on long-term debt 152,096 211,228
Other accrued liabilities 855,067 929,424
Liabilities related to assets
held for sale 3,761 3,880
-------------- ---------------
Total current liabilities 1,267,923 1,724,687
-------------- ---------------
Deferred income taxes 3,406,120 3,416,660
Long-term debt 12,777,215 11,175,229
Other long-term obligations 348,903 350,407
Stockholders' equity:
Common stock, $.01 par value:
authorized 600,000,000 shares, issued
368,865,942 and 368,395,926 shares and
outstanding 278,721,429 and 293,768,899
shares 3,689 3,684
Capital in excess of par value 3,978,213 3,951,162
Treasury stock, at cost:
90,144,513 and 74,627,027 shares (3,222,272) (2,115,107)
Retained earnings 4,338,754 4,220,408
Accumulated other comprehensive
income (loss) (2,666) 556
-------------- ---------------
Total stockholders' equity 5,095,718 6,060,703
-------------- ---------------
$ 22,895,879 $ 22,727,686
============== ===============
SOURCE MGM MIRAGE
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Related links:
http://www.mgmmirage.com
CONTACT:
Investment Community, DANIEL J. D'ARRIGO,
Executive Vice President, Chief Financial Officer,
+1-702-693-8895, or News Media, ALAN M. FELDMAN, Senior Vice
President, Public Affairs, +1-702-650-6947, both of MGM MIRAGE
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