MGM MIRAGE Reports Record First Quarter Revenue, Cash Flow and Net Income

April 19, 2001
PRNewswire
LAS VEGAS

MGM MIRAGE (NYSE: MGG) today reported record earnings of 52 cents per diluted share for the 2001 first quarter, compared with 38 cents per diluted share in the 2000 quarter. Excluding nonrecurring expenses, the Company reported a 26% increase in earnings per share to an all-time record high of 53 cents per share for the three months ended March 31, 2001, up from 42 cents per share in the prior year's quarter.

Net income before nonrecurring expenses grew 76% to $85.2 million in the 2001 quarter from $48.5 million in the prior year's quarter. These results reflect the continued strong performance from the Company's casino and hotel operations and the impact of the historic acquisition of Mirage Resorts, Incorporated ("Mirage Resorts") on May 31, 2000. Revenue and operating cash flow ("EBITDA") soared 152% and 137%, respectively, representing the ninth consecutive quarterly increase in revenue and EBITDA on a year-over-year basis.

On a pro forma basis to account for the Mirage Resorts acquisition in both periods, revenue was relatively flat at $1.07 billion while EBITDA increased 3% to $343.6 million in the 2001 first quarter.

"These strong results continue to confirm the tremendous value of combining two powerful companies creating a diverse portfolio of properties," said Terry Lanni, Chairman and Chief Executive Officer of MGM MIRAGE. "Our overall earnings, which reflected a normal table games hold percentage, exceeded expectations despite various challenges such as higher energy prices, the national economic slowdown and stock market volatility. Our major Las Vegas properties all experienced significant room revenue growth in the quarter and current booking trends remain positive. The capital and operational strategies already underway are intended to continue this positive momentum."

                     First Quarter Company Highlights

  -- Experienced strong increases in revenue per available room ("REVPAR")
     at every major Las Vegas property
  -- Produced significant free cash flow at all operating properties
  -- Sold $12 million in non-strategic assets during the quarter, bringing
     the total assets sold since the Mirage acquisition to $241 million
  -- Reduced debt by $123 million during the quarter, resulting in total
     debt reduction of $652 million since the acquisition of Mirage Resorts
  -- Construction of Borgata, our 50% owned resort, is on track and the
     design phase for a second wholly-owned resort in Atlantic City is
     underway
  -- Issued $400 million of Senior Subordinated Notes, maturing on
     February 1, 2011
  -- Extinguished the balance of the $1.3 billion Term Loan with proceeds
     from the note offering and free cash flow

                      Company-Wide Operating Results

For the three months ended March 31, 2001, the Company reported consolidated net revenue of $1.07 billion, up 152% from the prior year's quarter of $424 million. The increase in net revenue was largely due to the acquisition of Mirage Resorts. EBITDA grew 137% to $343.6 million from $144.7 million in the 2000 quarter. EBITDA also benefited from a full quarter contribution by the Mirage Resorts properties. The Company recorded a 32% overall EBITDA margin during the 2001 first quarter.

"We continue to meaningfully improve operating efficiency as evidenced by our margins which again improved in the quarter and consistently lead the industry," said Jim Murren, President and CFO of MGM MIRAGE. "We are deploying our substantial free cash flow in our existing resorts and new projects to sustain growth while our balance sheet continues to improve. Our business volumes are already benefiting from the early phase of our marketing and technology investments."

Bellagio

Bellagio achieved EBITDA of $93.5 million on net revenue of $260.2 million for the three months ended March 31, 2001, easily surpassing the resort's previous quarterly EBITDA record of $88.1 million achieved in the fourth quarter of 2000. EBITDA and net revenue for the first quarter of 2000 were $64.6 million and $238.7 million, respectively. Quarterly EBITDA margin of 36% was also a record, and represented a nine percentage point increase over the 27% reported in the first quarter of 2000. Bellagio has reached successive new highs in EBITDA margin in each full quarter since the Mirage Resorts acquisition. Significant increases were achieved in both casino and non-casino revenue, while operating expenses were reduced by nearly 4%. Casino revenue benefited from an increase in table games hold percentage, while double-digit increases in average daily room rate ("ADR") and REVPAR contributed to the increase in non-casino revenue.

MGM Grand Las Vegas - The City of Entertainment

MGM Grand Las Vegas - The City of Entertainment recorded net revenue of $189.4 million and EBITDA of $48 million for the three months ended March 31, 2001, versus $200 million and $61 million, respectively during the prior year's quarter. Net revenue and EBITDA during the 2001 first quarter was affected by lower casino revenue due to a lower baccarat hold percentage when compared with the prior year. Despite the lower hold percentage, The City of Entertainment was able to achieve several milestones. Table game volume (excluding baccarat) in the quarter was an all-time record high, while slot volume was the highest of any first quarter in this property's history. Net non-casino revenue rose 9% as a result of all-time record highs in both room revenue and food and beverage revenue. Room revenue benefited from an 11% increase in ADR to $122 (an all-time record high) and a $9 increase in REVPAR to $116 in the 2001 first quarter.

The Mirage

The Mirage recorded net revenue of $169.6 million, versus $166.7 million reported in the first quarter of 2000. EBITDA of $54.6 million was the second highest quarterly total in the last three years, surpassed only by the $56.0 million achieved in the first quarter of 2000. Net non-casino revenue increased by $11.9 million versus the first quarter of 2000, more than offsetting a $9.0 million decrease in casino revenue. The decline in casino revenue was primarily attributable to a decline in table games hold percentage. All areas of non-casino revenue showed improvement over the prior year. Particularly noteworthy was the continuing strength in room revenue, as ADR and REVPAR each increased by 14% versus the prior-year quarter.

Treasure Island

Treasure Island produced net revenue of $97.4 million, an all-time record for the resort, and EBITDA of $31.0 million for the first quarter of 2001, versus $94.4 million and $28.6 million, respectively, in the prior-year quarter. This was Treasure Island's best quarterly EBITDA performance in five years, and the second best in the resort's history. Net non-casino revenue increased by $5.0 million versus the first quarter of 2000, more than offsetting a $2.0 million decrease in casino revenue. The decline in casino revenue was due to decreases in table games and slot volume. Room revenue benefited from double-digit increases in ADR and REVPAR, while increased entertainment revenue reflected an increase in ticket pricing, as well as a December 2000 increase in showroom capacity.

New York - New York

New York - New York recorded net revenue of $54.5 million and EBITDA of $23.5 million during the 2001 first quarter when compared to $53.0 million and $23.4 million, respectively, in the prior year's quarter. EBITDA margin remained an impressive 43% during the 2001 period. New York - New York benefited from an 11% increase in net non-casino revenue while casino revenue remained relatively flat. Net non-casino revenue increased as a result of increases in both room and food and beverage revenue. Room revenue increased due to a three percentage point increase in occupancy to 98.3%, a 9% increase in ADR, and 12% REVPAR growth.

Primm Properties

The Primm Properties, located in Primm, Nevada, produced net revenue for the 2001 first quarter of $51.2 million and EBITDA of $11.4 million. This compares with net revenue of $60.8 million and EBITDA of $19.8 million during the 2000 first quarter. These resorts have been negatively impacted by lower traffic counts on Interstate 15 as a result of increased competition from Native American casinos, as well as higher gas and utility costs in California.

Golden Nugget Properties

The Golden Nugget in downtown Las Vegas produced net revenue of $48.4 million and EBITDA of $11.9 million during the first quarter of 2001, representing increases of $2.1 million and $1.2 million, respectively, versus the amounts achieved in the 2000 first quarter. These were the best quarterly results for the Golden Nugget since 1996, the first year of operation for the Fremont Street Experience. The improved results were primarily attributable to non-casino operations, where all significant revenue categories showed strong improvement. EBITDA at the Golden Nugget Laughlin fell to $1.5 million from the $2.6 million reported in the 2000 first quarter, as the Laughlin market continues to face difficult competitive conditions similar to those experienced at the Primm Properties.

MGM Grand Detroit

MGM Grand Detroit produced net revenue of $88.6 million and EBITDA of $36.6 million for the three months ended March 31, 2001 when compared with net revenue and EBITDA of $99.8 million and $35.8 million, respectively, for the 2000 first quarter. Despite the lower revenue MGM Grand Detroit continued to focus on maximizing its profitability as evidenced by the increase in EBITDA margin from 36% in the 2000 period to 41% during the 2001 quarter.

Beau Rivage

Beau Rivage reported net revenue of $68.8 million and EBITDA of $14.5 million for the three months ended March 31, 2001, versus $75.4 million and $17.4 million, respectively, in the prior-year period. Casino and non-casino operations were affected by construction associated with the expansion of the resort's buffet and slot floor. The buffet expansion will increase seating capacity by 75%, while the newly configured slot floor will add approximately 370 new machines. The expanded buffet and slot offerings are scheduled to be completed during the second quarter of 2001.

Other Operations

Monte Carlo reported net revenue of $69.5 million and EBITDA of $24.7 million compared with $68.4 million and $24.7 million, respectively, for the first quarter of 2000. The Company's 50% share of this joint venture's results contributed $11.6 million to EBITDA for the three months ended March 31, 2001.

The Holiday Inn® Casino Boardwalk ("Boardwalk") reported net revenue of $9.1 million and EBITDA of $1.7 million during the first quarter of 2001, versus $9.5 million and $1.9 million, respectively, recorded in the prior-year quarter.

For the three months ended March 31, 2001, MGM Grand Australia reported net revenue of $7.1 million and EBITDA of $3.0 million compared with net revenue of $9.1 million and EBITDA of $3.4 million in the prior year period. Reported results were adversely affected by currency translation. MGM Grand Australia's EBITDA margin grew from 37% in the 2000 period to an impressive 42% in the 2001 quarter.

MGM MIRAGE is an entertainment, hotel and gaming company headquartered in Las Vegas, Nevada, which owns and/or operates through subsidiaries 18 casino properties on three continents. Its U.S. holdings include: Bellagio, the MGM Grand Hotel and Casino - The City of Entertainment, The Mirage, Treasure Island, New York - New York Hotel and Casino, the Boardwalk Hotel and Casino and 50% of Monte Carlo, all located on the Las Vegas Strip; the Golden Nugget in Downtown Las Vegas; Whiskey Pete's, Buffalo Bill's and the Primm Valley Resort in Primm, Nevada as well as two championship golf courses at the California/Nevada state line; the Golden Nugget in Laughlin, Nevada; the Beau Rivage resort on the Mississippi Gulf Coast; and the MGM Grand Detroit Casino in Detroit, Michigan. The Company is a joint venture partner on Borgata, a resort under development in Atlantic City, New Jersey and also controls several development sites in the ocean-front resort community. Internationally, MGM MIRAGE owns and operates the MGM Grand Hotel and Casino in Darwin, Australia and manages casinos in Nelspruit, Witbank and Johannesburg, Republic of South Africa.

For more information on MGM MIRAGE and its operating subsidiaries, visit our 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
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (in thousands)
                                 (Unaudited)

                                                     Three Months Ended
                                                  March 31,      March 31,
                                                    2001           2000
  Revenues:
    Casino                                      $  575,395     $  285,578
    Rooms                                          236,983         71,763
    Food and beverage                              185,956         51,004
    Entertainment, retail and other                167,271         48,962
    Income from unconsolidated affiliate            11,551             --
                                                 1,177,156        457,307
    Less: promotional allowances                   107,649         33,294
                                                 1,069,507        424,013
  Expenses:
    Casino                                         309,501        139,129
    Rooms                                           56,616         21,636
    Food and beverage                              102,126         28,017
    Entertainment, retail and other                101,811         26,948
    Provision for doubtful accounts                 14,649          5,273
    General and administrative                     141,194         58,318
    Preopening expenses and other                      875          2,348
    Restructuring costs                                 --          4,140
    Depreciation and amortization                   95,943         40,183
                                                   822,715        325,992

  Operating Profit                                 246,792         98,021

  Corporate Expense                                 10,824          5,579
  Operating Income                                 235,968         92,442

  Non-Operating Income (Expense):
    Interest income                                  2,032            763
    Interest expense, net                          (97,536)       (22,091)
    Interest expense from unconsolidated affiliate    (817)            --
    Other, net                                      (1,145)          (162)
                                                   (97,466)       (21,490)

  Income Before Income Taxes and
   Extraordinary Item                              138,502         70,952
    Provision for income taxes                     (53,830)       (26,647)

  Income Before Extraordinary Item                  84,672         44,305

  Extraordinary Item:
    Loss on Early Extinguishment of Debt, net         (778)            --

  Net Income                                    $   83,894     $   44,305

  Income Before Preopening and Other,
   Restructuring, and Extraordinary Item        $   85,241     $   48,522


                         MGM MIRAGE AND SUBSIDIARIES
                          PER SHARE OF COMMON STOCK
                                 (Unaudited)

                                                     Three Months Ended
                                                  March 31,      March 31,
                                                     2001           2000
  Per Share Of Common Stock:
    Basic:
    Income Before Extraordinary Item            $     0.54     $     0.39
    Extraordinary Item, net                          (0.01)            --
    Net Income Per Share                        $     0.53     $     0.39

    Weighted Average Shares Outstanding (000's)    159,219        112,819

    Diluted:
    Income Before Extraordinary Item            $     0.53     $     0.38
    Extraordinary Item, net                          (0.01)            --
    Net Income Per Share                        $     0.52     $     0.38

    Weighted Average Shares Outstanding (000's)    161,320        115,438


                       MGM MIRAGE AND SUBSIDIARIES
               SUPPLEMENTAL DATA PER SHARE OF COMMON STOCK
                               (Unaudited)

                                                     Three Months Ended
                                                  March 31,      March 31,
                                                    2001            2000
  Per Share Of Common Stock:
    Basic:
    Income Before Preopening and other,
     Restructuring, and Extraordinary Item      $     0.54     $     0.43
    Preopening expenses and Other, net                  --          (0.01)
    Restructuring costs, net                            --          (0.03)
    Extraordinary Item, net                          (0.01)            --
    Net Income Per Share                        $     0.53     $     0.39

    Weighted Average Shares Outstanding (000's)    159,219        112,819

    Diluted:
    Income Before Preopening and other,
     Restructuring, and Extraordinary Item      $     0.53     $     0.42
    Preopening expenses and Other, net                  --          (0.01)
    Restructuring costs, net                            --          (0.03)
    Extraordinary Item, net                          (0.01)            --
    Net Income Per Share                        $     0.52     $     0.38

    Weighted Average Shares Outstanding (000's)    161,320        115,438


                         MGM MIRAGE AND SUBSIDIARIES
                SUPPLEMENTAL DATA - PROPERTY OPERATING RESULTS
                                (in thousands)

                                                     Three Months Ended
                                                  March 31,      March 31,
                                                    2001           2000
  NET REVENUES:
    Bellagio (1)                                $  260,240     $       --
    MGM Grand Las Vegas                            189,431        200,031
    The Mirage (1)                                 169,550             --
    Treasure Island (1)                             97,366             --
    New York-New York                               54,506         52,963
    Primm Properties                                51,197         60,833
    Golden Nugget Las Vegas (1)                     48,448             --
    Golden Nugget Laughlin (1)                      12,467             --
    MGM Grand Detroit                               88,645         99,827
    Beau Rivage (1)                                 68,813             --
    Income from Unconsolidated Affiliate (1)        11,551             --
    Boardwalk (1)                                    9,115             --
    MGM Grand Australia                              7,145          9,104
    MGM Grand South Africa                           1,033          1,255
                                                $1,069,507     $  424,013

  EBITDA:
    Bellagio (1)                                $   93,515     $       --
    MGM Grand Las Vegas                             47,996         61,016
    The Mirage (1)                                  54,558             --
    Treasure Island (1)                             31,005             --
    New York-New York                               23,456         23,418
    Primm Properties                                11,395         19,810
    Golden Nugget Las Vegas (1)                     11,868             --
    Golden Nugget Laughlin (1)                       1,496             --
    MGM Grand Detroit                               36,597         35,830
    Beau Rivage (1)                                 14,489             --
    Income from Unconsolidated Affiliate (1)        11,551             --
    Boardwalk (1)                                    1,700             --
    MGM Grand Australia                              2,969          3,382
    MGM Grand South Africa                           1,015          1,236
                                                $  343,610     $  144,692

  Note:
  (1) The Company acquired Mirage Resorts, Incorporated on May 31, 2000,
      thereby acquiring the Mirage Properties and 50% ownership in the Monte
      Carlo Resort & Casino.


                         MGM MIRAGE AND SUBSIDIARIES
           SUPPLEMENTAL DATA - PRO FORMA PROPERTY OPERATING RESULTS
                                (in thousands)

                                                     Three Months Ended
                                                  March 31,      March 31,
                                                    2001         2000 (1)
  NET REVENUES:
    Bellagio                                   $   260,240    $   238,687
    MGM Grand Las Vegas                            189,431        200,031
    The Mirage                                     169,550        166,692
    Treasure Island                                 97,366         94,447
    New York-New York                               54,506         52,963
    Primm Properties                                51,197         60,833
    Golden Nugget Las Vegas                         48,448         46,307
    Golden Nugget Laughlin                          12,467         12,867
    MGM Grand Detroit                               88,645         99,827
    Beau Rivage                                     68,813         75,380
    Income from Unconsolidated Affiliate            11,551          8,374
    Boardwalk                                        9,115          9,498
    MGM Grand Australia                              7,145          9,104
    MGM Grand South Africa                           1,033          1,255
                                               $ 1,069,507    $ 1,076,265

  EBITDA:
    Bellagio                                   $    93,515    $    64,569
    MGM Grand Las Vegas                             47,996         61,016
    The Mirage                                      54,558         56,025
    Treasure Island                                 31,005         28,610
    New York-New York                               23,456         23,418
    Primm Properties                                11,395         19,810
    Golden Nugget Las Vegas                         11,868         10,658
    Golden Nugget Laughlin                           1,496          2,553
    MGM Grand Detroit                               36,597         35,830
    Beau Rivage                                     14,489         17,396
    Income from Unconsolidated Affiliate            11,551          8,374
    Boardwalk                                        1,700          1,866
    MGM Grand Australia                              2,969          3,382
    MGM Grand South Africa                           1,015          1,236
                                               $   343,610    $   334,743

  Note:
  (1)Pro forma amounts for 2000 include Mirage results for the period prior
      to the acquisition.


                       MGM MIRAGE AND SUBSIDIARIES
                   SUPPLEMENTAL STATISTICAL INFORMATION

                                                      Three Months Ended
                                                    March 31,     March 31,
                                                      2001           2000
  ROOM STATISTICS:
    Bellagio (1)  (3,005 Rooms)
      Occupancy %                                    96.7%          98.8%
      Average Daily Rate (ADR)                        $195           $171
      Revenue per Available Room (REVPAR)             $189           $169

    MGM Grand Las Vegas  (5,034 Rooms)
      Occupancy %                                    94.9%          97.2%
      Average Daily Rate (ADR)                        $122           $110
      Revenue per Available Room (REVPAR)             $116           $107

    The Mirage (1)  (3,044 Rooms)
      Occupancy %                                    97.1%          97.2%
      Average Daily Rate (ADR)                        $133           $117
      Revenue per Available Room (REVPAR)             $129           $113

    Treasure Island (1)  (2,885 Rooms)
      Occupancy %                                    95.2%          98.9%
      Average Daily Rate (ADR)                        $109            $94
      Revenue per Available Room (REVPAR)             $103            $93

    New York-New York  (2,024 Rooms)
      Occupancy %                                    98.3%          95.2%
      Average Daily Rate (ADR)                         $93            $85
      Revenue per Available Room (REVPAR)              $91            $81

    Primm Properties  (2,642 Rooms)
      Occupancy %                                    59.3%          64.8%
      Average Daily Rate (ADR)                         $39            $37
      Revenue per Available Room (REVPAR)              $23            $24

    Golden Nugget Las Vegas (1)  (1,907 Rooms)
      Occupancy %                                    98.4%          97.0%
      Average Daily Rate (ADR)                         $65            $61
      Revenue per Available Room (REVPAR)              $64            $59

    Golden Nugget Laughlin (1)  (300 Rooms)
      Occupancy %                                    96.1%          97.1%
      Average Daily Rate (ADR)                         $28            $33
      Revenue per Available Room (REVPAR)              $27            $32

    Beau Rivage (1)  (1,780 Rooms)
      Occupancy %                                    94.1%          94.8%
      Average Daily Rate (ADR)                         $72            $74
      Revenue per Available Room (REVPAR)              $68            $70

    Boardwalk (1)  (654 Rooms)
      Occupancy %                                    89.8%          90.3%
      Average Daily Rate (ADR)                         $70            $67
      Revenue per Available Room (REVPAR)              $63            $61

    MGM Grand Australia  (96 Rooms)
      Occupancy %                                    55.0%          67.6%
      Average Daily Rate (ADR)                         $56            $60
      Revenue per Available Room (REVPAR)              $31            $40

  Note:
  (1) The Company acquired Mirage Resorts, Incorporated on May 31, 2000
      thereby acquiring the Mirage Properties and 50% ownership in the
      Monte Carlo Resort & Casino.  Information for 2000 includes Mirage
      results for the period prior to the acquisition.


                       MGM MIRAGE AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                    (in thousands, except share data)
                               (Unaudited)

                                  ASSETS
                                                  March 31,    December 31,
                                                    2001           2000

  CURRENT ASSETS:
    Cash and cash equivalents                 $    259,382   $    227,968
    Accounts receivable, net                       208,786        236,650
    Inventories                                     86,333         86,279
    Income tax receivable                               --         11,264
    Deferred income taxes                          146,679        162,934
    Prepaid expenses                                67,283         70,549
      Total current assets                         768,463        795,644

  PROPERTY AND EQUIPMENT, NET                    9,034,577      9,064,233

  OTHER ASSETS:
    Investment in unconsolidated affiliates        524,360        522,422
    Excess of purchase price over fair market
     value of net assets acquired, net              50,650         54,281
    Deposits and other assets, net                 280,526        298,021
      Total other assets                           855,536        874,724
                                              $ 10,658,576   $ 10,734,601


                     LIABILITIES AND STOCKHOLDERS' EQUITY

  CURRENT LIABILITIES:
    Accounts payable                          $     59,013   $     65,317
    Income taxes payable                             3,170             --
    Current obligation, capital leases               1,251          4,099
    Current portion of long-term debt              413,044        521,308
    Accrued interest on long-term debt              68,122         77,738
    Other accrued liabilities                      533,687        564,743
      Total current liabilities                  1,078,287      1,233,205

  DEFERRED INCOME TAXES                          1,743,500      1,730,158
  LONG-TERM OBLIGATION, CAPITAL LEASES               1,974          7,092
  LONG-TERM DEBT                                 5,337,470      5,348,320
  OTHER LONG-TERM OBLIGATIONS                       33,232         33,381
  STOCKHOLDERS' EQUITY:
    Common stock ($.01 par value: authorized
     300,000,000 shares, outstanding
     159,255,533 and 159,130,205 shares)             1,633          1,632
    Capital in excess of par value               2,042,803      2,041,820
    Treasury stock, at cost
     (4,059,000 and 4,059,000 shares)              (83,683)       (83,683)
    Retained earnings                              511,850        427,956
    Other comprehensive loss                        (8,490)        (5,280)
      Total stockholders' equity                 2,464,113      2,382,445
                                              $ 10,658,576   $ 10,734,601

SOURCE: MGM MIRAGE

Contact: Investment Community, James J. Murren, President and Chief
Financial Officer, 702-693-8877, or Media, Alan Feldman, Vice President,
Public Affairs, 702-693-7147, both of MGM MIRAGE

Website: http://www.mgmmirage.com/

Company News On-Call: http://www.prnewswire.com/comp/000725.html or fax,
800-758-5804, ext. 000725