MGM MIRAGE (NYSE: MGM) today reported its first quarter 2007 financial results, achieving the Company's highest ever first quarter diluted earnings per share from continuing operations of $0.55, a 15% increase over the $0.48 per share earned in 2006. Net income per share on a diluted basis, including the results of discontinued operations, was $0.57 per share compared to $0.49 per share in 2006. Net revenues for the first quarter increased 9% to $1.9 billion, an all-time record revenue performance for the Company in any quarter. First quarter revenues were positively impacted by strong room pricing at the Company's Las Vegas Strip resorts, the reopening of Beau Rivage in August 2006, and the continued impact of new restaurants, nightclubs and shows at several resorts. Earnings benefited from the strong revenue trends, solid operating margins, and profits from sales of the remaining units of Tower 2 of the Signature at MGM Grand.
Key results from the quarter include:
* Non-gaming revenues increased 12%, 10% excluding Beau Rivage,
validating the Company's strategic reinvestment in non-gaming
amenities;
* Las Vegas Strip REVPAR(1) increased 9%, which represents the fifteenth
consecutive quarter of year-over-year REVPAR increases for these
resorts;
* Gaming revenues increased 4% but decreased 6% excluding Beau Rivage.
Table games volume, including baccarat, decreased 7% excluding Beau
Rivage;
* Record first quarter Property EBITDA(2) of $655 million, a 7% increase
over the prior year; Property EBITDA margins remained strong at 34% in
the first quarter;
* All-time record Property EBITDA at several Las Vegas Strip resorts,
including Bellagio, MGM Grand Las Vegas, Mandalay Bay, Treasure Island
and Monte Carlo;
* Beau Rivage, which was closed in the prior year quarter, earned
Property EBITDA of $28 million, an all-time record for any quarter for
Beau Rivage(3);
* Repurchased 2.5 million shares for $175 million during the quarter.
Recent significant developments include:
* Signed a definitive agreement with Diaoyutai State Guesthouse. The
joint venture is initially targeting locations for non-gaming luxury
hotels in the People's Republic of China;
* Signed a definitive agreement with Mubadala Development Company, an
investment and development vehicle established and wholly owned by the
Government of the Emirate of Abu Dhabi, U.A.E.;
* Announced an increase to the CityCenter construction budget to
$7.4 billion and announced increased expected gross proceeds from sales
of residential units - $2.7 billion, up from $2.5 billion -- as a
result of the strong initial public reception of the residential
offerings. The current expected net cost of CityCenter is
$4.7 billion;
* Entered into agreements to acquire 34 acres on the Las Vegas Strip
adjacent to Circus Circus Las Vegas, which together with land already
owned creates a 78-acre site available for future development;
* Completed the sale of the Primm Valley Resorts and expect to close the
sale of the Laughlin Properties -- Colorado Belle and Edgewater --
during the second quarter;
* Entered into an agreement to invest in The M Resort, an 80-acre
mixed-use development located about ten miles south of Bellagio on Las
Vegas Blvd.
The following table lists significant items which affect the comparability of the current year and prior year results (EPS impact shown, net of tax, per diluted share; negative amounts represent charges to income):
Three months ended March 31, 2007 2006
---------------------------- -------- --------
Profits from The Signature at MGM Grand $ 0.02 $ --
Preopening and start-up expenses (0.03) (0.02)
Property transactions, net (0.01) (0.05)
"We remain focused on executing our vision for the Las Vegas Strip and expanding our brands globally as evidenced by our recent Las Vegas Strip land acquisitions and our strategic partnerships with first-class organizations that share our vision," said Terry Lanni, MGM MIRAGE's Chairman and CEO. "As leaders in shaping the future of Las Vegas and expanding markets world-wide, we and our partners are setting the bar for quality, design, and long-term sustainable growth."
Net revenues increased 9%; excluding Beau Rivage, net revenues were up 3%. The Company generated increased revenues from non-gaming operations due to strong room pricing, new and upgraded food and beverage outlets, and exclusive entertainment shows and events. As a part of the Company's efforts to continuously update its entertainment offerings, it will add a new Cirque du Soleil show starring Criss Angel at the Luxor in 2008 and is adding several new and exciting restaurants, nightclubs and other amenities at Luxor, Monte Carlo, Excalibur, New York-New York and Mandalay Bay.
Gaming revenues increased 4%, but decreased 6% excluding Beau Rivage. Table games volumes at the Company's Las Vegas Strip resorts decreased 7% compared to a robust prior year first quarter. Table games hold percentages were near the mid-point of the normal 18-22% range in both periods. Slot revenues at the Company's Las Vegas Strip resorts decreased 3% from the prior year first quarter.
Rooms revenues increased 8%, 5% excluding Beau Rivage despite having 98,000 less available rooms as a result of room remodel projects, primarily at Mandalay Bay and Excalibur. Average rates increased 8% at the Company's Las Vegas Strip resorts. Las Vegas Strip REVPAR increased 9%, led by double-digit percentage increases at Mandalay Bay, The Mirage, and TI. The following table shows key hotel statistics for the Company's Las Vegas Strip resorts:
Three Months Ended
------------------------
March 31, March 31,
2007 2006
---------- ----------
Occupancy % 96% 95%
Average Daily Rate (ADR) $ 169 $ 157
Revenue per Available Room (REVPAR) $ 162 $ 149
The Company's operating income increased 8% to $445 million, which includes $8 million of profit from closings on the final units of Tower 2 of the Signature at MGM Grand and $16 million of operating income from Beau Rivage. Excluding these items, operating income increased 2% from prior year with a margin of 23% in both quarters. EBITDA increased 3% and Property EBITDA increased 2%, also excluding these items, with comparable Property EBITDA margins of 34% in both periods.
Detailed Discussion of Certain Charges
In the first quarter of 2007, the Company incurred $5 million of net property transactions primarily related to the write-off of the net book value of the building assets of Nevada Landing, which closed in March. In the 2006 period, net property transactions of $23 million largely related to the write-off of the tram connecting Bellagio and Monte Carlo and the related tram station assets ($12 million at Bellagio and $10 million at Monte Carlo).
Preopening and start-up expenses of $14 million in 2007 primarily related to CityCenter, the Detroit permanent casino, and MGM Grand Macau. Preopening and start-up expenses of $6 million in the 2006 quarter related primarily to CityCenter, MGM Grand Macau, and The Signature at MGM Grand.
Financial Position
First quarter capital investments totaled $611 million, which included $300 million for CityCenter, $66 million for the permanent MGM Grand Detroit hotel and casino, and $40 million of trailing payments for Beau Rivage rebuilding. Remaining capital expenditures included spending of $65 million on room and suite remodel projects, primarily at Excalibur and Mandalay, expenditures for corporate aircraft of $55 million, and $85 million of other routine capital expenditures on various new and upgraded amenities at the Company's resorts.
During the quarter the Company received an additional $56 million of insurance recoveries related to Hurricane Katrina. These amounts were not recognized as income pending the final settlement of the Company's insurance claim.
During the first quarter of 2007, the Company repurchased 2.5 million shares of its common stock for $175 million, leaving 5.5 million shares available under the Company's current authorization. At March 31, 2007, the Company had $2.3 billion of available borrowings under its senior credit facility.
"We continue to generate significant operating cash flow from our existing resorts and reinvest strategically in those resorts," said Jim Murren, MGM MIRAGE President, CFO and Treasurer. "In addition, we are in the home stretch of construction in Macau and Detroit and look forward to adding significantly to our cash flow base when these resorts open in late 2007. Along with our significant available bank borrowings and ready access to the capital markets, our powerful cash flow generation will allow us to fund a pipeline of development projects for years to come."
MGM MIRAGE will hold a conference call to discuss its first quarter earnings results and outlook for the second quarter at 11:00 a.m. Eastern Daylight Time today. The call can be accessed live at www.companyboardroom.com or www.mgmmirage.com, or by calling 1-800-526-8531 (domestic) or 1-706-634-6528 (international). Until Thursday, May 10, 2007, a complete replay of the conference call can be accessed by dialing 1-706-645-9291, access code 7329695. A complete replay of the call will also be made available at 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.
(3) Beau Rivage earned operating income of $16 million in the first
quarter of 2007, with depreciation and amortization of $12 million.
Beau Rivage was closed during the prior year first quarter as a
result of Hurricane Katrina.
MGM MIRAGE (NYSE: MGM), one of the world's leading and most respected hotel and gaming companies, owns and operates 19 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. The Company has entered into an agreement to sell its Colorado Belle and Edgewater properties located in Laughlin, Nevada. In addition, the Company has major new developments under construction in Nevada, Michigan and Macau S.A.R. CityCenter is a multi-billion dollar mixed-use urban development in the heart of the Las Vegas Strip; a new MGM Grand hotel and casino complex is being built in downtown Detroit; and the Company has a 50% interest in MGM Grand Macau, a hotel-casino resort currently under construction in Macau S.A.R. MGM MIRAGE supports responsible gaming and has implemented the American Gaming Association's Code of Conduct for Responsible Gaming at its properties. MGM MIRAGE also has been the recipient of 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,
2007 2006
------------------------------
Revenues:
Casino $ 811,939 $ 780,258
Rooms 549,004 508,398
Food and beverage 417,449 369,044
Entertainment 134,248 98,980
Retail 68,250 64,486
Other 122,070 105,795
------------ ------------
2,102,960 1,926,961
Less: Promotional allowances (173,525) (152,593)
------------ ------------
1,929,435 1,774,368
------------ ------------
Expenses:
Casino 418,108 411,032
Rooms 141,774 132,700
Food and beverage 244,382 216,371
Entertainment 98,145 72,892
Retail 44,391 43,886
Other 72,245 55,022
General and administrative 285,105 250,111
Corporate expense 33,955 36,652
Preopening and start-up expenses 14,276 6,181
Restructuring costs - 804
Property transactions, net 5,019 23,485
Depreciation and amortization 168,277 147,433
------------ ------------
1,525,677 1,396,569
------------ ------------
Income from unconsolidated affiliates 41,375 35,554
------------ ------------
Operating income 445,133 413,353
------------ ------------
Non-operating income (expense):
Interest income 2,657 2,745
Interest expense, net (184,011) (192,849)
Non-operating items from
unconsolidated affiliates (5,106) (3,595)
Other, net (2,728) (3,044)
------------ ------------
(189,188) (196,743)
------------ ------------
Income from continuing operations
before income taxes 255,945 216,610
Provision for income taxes (92,935) (76,848)
------------ ------------
Income from continuing operations 163,010 139,762
------------ ------------
Discontinued operations:
Income from discontinued operations 7,846 6,482
Provision for income taxes (2,683) (2,207)
------------ ------------
5,163 4,275
------------ ------------
Net income $ 168,173 $ 144,037
============ ============
Per share of common stock:
Basic:
Income from continuing operations $ 0.57 $ 0.49
Discontinued operations 0.02 0.02
------------ ------------
Net income per share $ 0.59 $ 0.51
============ ============
Weighted average shares outstanding 284,021 284,200
============ ============
Diluted:
Income from continuing operations $ 0.55 $ 0.48
Discontinued operations 0.02 0.01
------------ ------------
Net income per share $ 0.57 $ 0.49
============ ============
Weighted average shares outstanding 295,577 292,783
============ ============
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA - NET REVENUES
(In thousands)
(Unaudited)
Three Months Ended
--------------------------------
March 31, March 31,
2007 2006
-------------- --------------
Las Vegas Strip $ 1,626,343 $ 1,571,604
Other Nevada 44,432 46,799
MGM Grand Detroit 116,134 115,093
Mississippi 142,526 40,872
-------------- --------------
$ 1,929,435 $ 1,774,368
============== ==============
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA - PROPERTY EBITDA
(In thousands)
(Unaudited)
Three Months Ended
--------------------------------
March 31, March 31,
2007 2006
-------------- --------------
Las Vegas Strip $ 548,842 $ 523,381
Other Nevada (1,996) 5,575
MGM Grand Detroit 34,826 37,100
Mississippi 35,403 9,359
Unconsolidated resorts 38,142 34,196
-------------- --------------
$ 655,217 $ 609,611
============== ==============
MGM MIRAGE AND SUBSIDIARIES
DETAIL OF CERTAIN CHARGES AFFECTING PROPERTY EBITDA and EBITDA
(In thousands)
(Unaudited)
Three Months Ended March 31, 2007
---------------------------------
Preopening Property
and 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
============= ============= ============= =============
Three Months Ended March 31, 2006
---------------------------------
Preopening Property
and start-up Restructuring transactions,
expenses costs net Total
------------- ------------- ------------- -------------
Las Vegas
Strip $ 3,208 $ 804 $ 23,493 $ 27,505
Other Nevada -- -- (3) (3)
MGM Grand
Detroit 593 -- (2) 591
Mississippi -- -- (3) (3)
Unconsolidated
resorts 2,221 -- -- 2,221
------------- ------------- ------------- -------------
6,022 804 23,485 30,311
Corporate and
other 159 -- -- 159
------------- ------------- ------------- -------------
$ 6,181 $ 804 $ 23,485 $ 30,470
============= ============= ============= =============
MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF CONSOLIDATED EBITDA TO INCOME FROM CONTINUING OPERATIONS
(In thousands)
(Unaudited)
Three Months Ended
--------------------------------
March 31, March 31,
2007 2006
-------------- --------------
EBITDA $ 613,410 $ 560,786
Depreciation and amortization (168,277) (147,433)
-------------- --------------
Operating income 445,133 413,353
-------------- --------------
Non-operating income (expense):
Interest expense, net (184,011) (192,849)
Other (5,177) (3,894)
-------------- --------------
(189,188) (196,743)
-------------- --------------
Income from continuing operations
before income taxes 255,945 216,610
Provision for income taxes (92,935) (76,848)
-------------- --------------
Income from continuing operations $ 163,010 $ 139,762
============== ==============
MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO PROPERTY EBITDA
(In thousands)
(Unaudited)
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
==============
Three Months Ended March 31, 2006
---------------------------------
Depreciation
Operating and
income amortization EBITDA
------------- --------------- --------------
Las Vegas
Strip $ 395,351 $ 128,030 $ 523,381
Other Nevada 3,219 2,356 5,575
MGM Grand
Detroit 34,183 2,917 37,100
Mississippi 3,859 5,500 9,359
Unconsolidated
resorts 34,196 -- 34,196
------------- --------------- --------------
470,808 138,803 609,611
Stock compensation (21,096)
Corporate and
other (27,729)
--------------
$ 560,786
==============
MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
March 31, December 31,
2007 2006
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 313,967 $ 452,944
Accounts receivable, net 373,391 362,921
Inventories 124,500 118,459
Income tax receivable -- 18,619
Deferred income taxes 70,405 68,046
Prepaid expenses and other 133,620 124,414
Assets held for sale 418,936 369,348
-------------- --------------
Total current assets 1,434,819 1,514,751
-------------- --------------
Real estate under development 244,520 188,433
Property and equipment, net 17,630,756 17,241,860
Other assets:
Investments in unconsolidated
affiliates 1,086,189 1,092,257
Goodwill 1,269,591 1,300,747
Other intangible assets, net 364,564 367,200
Deposits and other assets, net 527,330 440,990
-------------- --------------
Total other assets 3,247,674 3,201,194
-------------- --------------
$ 22,557,769 $ 22,146,238
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 157,022 $ 182,154
Construction payable 296,064 234,486
Income taxes payable 38,695 --
Accrued interest on long-term
debt 194,343 232,957
Other accrued liabilities 905,503 958,244
Liabilities related to assets
held for sale 43,325 40,259
-------------- --------------
Total current liabilities 1,634,952 1,648,100
-------------- --------------
Deferred income taxes 3,378,256 3,441,157
Long-term debt 13,240,315 12,994,869
Other long-term obligations 372,648 212,563
Stockholders' equity:
Common stock, $.01 par value:
authorized 600,000,000 shares,
issued 365,005,233 and
362,886,027 shares and
outstanding 283,528,206 and
283,909,000 shares 3,650 3,629
Capital in excess of par value 2,895,060 2,806,636
Treasury stock, at cost:
81,477,027 and 78,977,027 shares (1,771,707) (1,597,120)
Retained earnings 2,804,162 2,635,989
Accumulated other comprehensive
income 433 415
-------------- --------------
Total stockholders' equity 3,931,598 3,849,549
-------------- --------------
$ 22,557,769 $ 22,146,238
============== ==============
First Call Analyst:
FCMN Contact: dan_d'arrigo@mgmmirage.com
SOURCE: MGM MIRAGE
CONTACT: Investment Community, James J. Murren, President, Chief
Financial Officer & Treasurer, +1-702-693-8877, or News Media, Alan M.
Feldman, Senior Vice President, Public Affairs, +1-702-891-7147, both of MGM
MIRAGE
Web site: http://www.mgmmirage.com/