MGM MIRAGE Reports Record First Quarter Results

April 19, 2005
PRNewswire-FirstCall
LAS VEGAS

MGM MIRAGE (NYSE: MGG) today reported its first quarter 2005 financial results. Adjusted earnings from continuing operations per diluted share ("Adjusted EPS") increased to an all-time record $0.87 in the first quarter of 2005, eclipsing the Company's previous best of $0.74 earned in the second quarter of 2004; the Company earned $0.70 in the 2004 first quarter. The strong earnings resulted from several positive factors, including strong gaming volumes and continued strength in hotel and other non-gaming results, driven by a strong convention calendar and increased room rates as well as new amenities at several resorts.

REVPAR (revenue per available room) at the Company's Las Vegas Strip resorts was $167, an impressive year-over-year increase of 15%, on top of last year's 11% first quarter increase over 2003. Table games volume, including baccarat, increased 9% in the quarter and slot revenue increased 13%.

Adjusted EPS (and Adjusted Earnings) excludes discontinued operations, preopening and start-up expenses, restructuring costs, property transactions, and loss on early retirement of debt.(1) On a GAAP (Generally Accepted Accounting Principles) basis, diluted earnings per share from continuing operations increased to $0.75 in the 2005 quarter from $0.66 in the first quarter of 2004. GAAP diluted EPS, including the results of discontinued operations, was $0.75 in the 2005 period versus $0.72 in 2004.

"The excellent operating results of the first quarter continue to demonstrate the power of our focused strategy, and we continue to build momentum leading up to the combination with Mandalay Resort Group," said Terry Lanni, MGM MIRAGE's Chairman and CEO. "Our ongoing investments in our premium portfolio of resorts will allow us to further raise the bar when it comes to generating superior results among gaming companies, and the addition of Mandalay's properties and people will further solidify our competitive position."

                  First Quarter 2005 Company Highlights

   *  Generated net revenues of $1.2 billion, up 13% from 2004;

   *  Produced property-level EBITDA(2) of $437 million, up 18% over prior
      year and an all-time Company record for any quarter; operating income
      of $293 million was up 15% over 2004;

   *  The addition of the Spa Tower at Bellagio propelled that resort to
      an all-time record quarterly profit;

   *  MGM Grand Las Vegas reported record results on several fronts as it
      successfully continued its repositioning of the resort, debuting the
      West Wing, newly renovated rooms offering modern style and amenities;

   *  Invested $105 million of capital in the Company's resorts, with new
      amenities including a poker room, a relocated race and sports book and
      a lounge -- Centrifuge -- at MGM Grand Las Vegas and the world-famous
      Carnegie Deli at The Mirage;

   *  Reduced debt by $124 million;

   *  Announced the sale of Mandalay's interest in MotorCity Casino in
      Detroit;

   *  Announced a 2-for-1 stock split, subject to stockholder approval of an
      increase in the number of authorized shares at the Company's annual
      meeting of stockholders on May 3, 2005.

                        Detailed Financial Results

The following table shows key financial results on a Company-wide basis for the first quarter:

                                                   Three months ended
                                                        March 31,
                                                -------------------------
                                                2005                 2004
                                                ----                 ----
                                                      (In millions)
   Casino revenue                          $   614.8             $   558.7
   Non-casino revenue, net                     589.3                 507.7
   Net revenue                               1,204.1               1,066.4
   Operating income                            293.2                 254.7
   Income from continuing operations           111.1                  97.1
   Discontinued operations, net                   --                   8.7
   Net income                                  111.1                 105.8

   ------------------------------------------------------------------------

   Property-level EBITDA(2)                $   437.1             $   370.5
   EBITDA (after corporate expense)(2)         410.3                 354.8
   Adjusted Earnings                           128.1                 102.4



Except where noted, all references in this release to operating results, including statistical information, exclude the results of Golden Nugget Las Vegas, Golden Nugget Laughlin and MGM Grand Australia for all periods presented. The results of these operations are classified as discontinued operations.

Net revenue in the first quarter increased 13% from prior year. Results were strong in all operating departments. A solid convention calendar and increased visitation to Las Vegas yielded significant gains in room rates and the Company experienced excellent levels of customer play during the key Super Bowl and Chinese New Year periods.

Casino revenue increased 10% in the 2005 quarter. Table games volume, including baccarat, was up 9% from the prior year's quarter, with a 39% increase in baccarat volume, continuing the trend from the latter half of 2004. Table games hold percentages were at the mid-point of the Company's normal range for both the 2005 and 2004 first quarters. Company-wide slot revenue in the quarter was up 13% from 2004, on top of a 10% increase in 2004 over 2003. Bellagio's slot revenue increased over 30% due to the additional customers from the Spa Tower expansion, and other strong performances were turned in at Beau Rivage, MGM Grand Detroit and New York-New York.

Non-casino revenue was up 16% in the quarter. Hotel revenue was up 17%, with occupancy of 92% in the first quarter of 2005, versus 90% in 2004, and a higher average daily room rate ("ADR") of $155 versus $138 in 2004. This is the highest quarterly ADR in the Company's history. As a result, REVPAR was $143, up 15% over REVPAR of $124 in 2004. We had significantly more rooms available with the Bellagio expansion and a full complement of rooms available at New York-New York, which was remodeling its rooms in the prior year, partially offset by room remodel activity at MGM Grand Las Vegas.

Food and beverage revenue increased 12%, as the addition of several restaurants and lounges since the first quarter of 2004 as well as overall strong customer volumes generated increased utilization at our restaurants, lounges and nightclubs. The addition of the Spa Tower led to an 18% increase in food and beverage revenue at Bellagio. Entertainment revenues were up significantly, 31%, over the prior year quarter as a result of the contribution from KA.

EBITDA increased 16% for the quarter, reflecting the operating trends described above and the benefit of the results from Borgata, which led to a 45% increase in income from unconsolidated affiliates. The Company's property-level EBITDA margin was 36% in 2005 versus 35% in the 2004 first quarter, a record margin for the Company. Operating income increased 15% over prior year.

First quarter 2005 Adjusted Earnings increased by 25% compared to 2004 due primarily to the higher operating income, offset by higher interest expense from fixed rate borrowings. Non-operating income (expense) includes a $19.5 million ($0.09 per share, net of tax) loss on early retirement of debt, which is excluded from Adjusted Earnings, and $6.7 million ($0.03 per share, net of tax) of income from the favorable resolution of a pre-acquisition contingency related to the Mirage Resorts acquisition, which is included in Adjusted Earnings. For the first quarter of 2005, Adjusted Earnings excluded $26.2 million ($17.0 million, net of tax) of items as follows:

   *  Net property transactions of $4.2 million ($2.7 million, net of tax),
      including $3.1 million of demolition costs, primarily at MGM Grand
      Las Vegas in connection with room remodel activity and at The Mirage
      in connection with the showroom remodel, and other net losses on
      disposal of assets;

   *  Preopening and start-up expenses of $2.5 million ($1.6 million, net of
      tax), related to the Spa Tower, Residences at MGM Grand and other
      projects at MGM Grand Las Vegas, such as the new poker room and new
      restaurants;

   *  Loss on early retirement of debt of $19.5 million ($12.7 million, net
      of tax) related to the early redemption of the Company's 6.875% Senior
      Notes due February 2008, classified within "Other, net."

In the first quarter of 2004, items excluded in the determination of Adjusted Earnings included minor amounts of preopening and start-up expenses and restructuring costs, property transactions of $1.7 million ($1.1 million, net of tax) related primarily to the Bellagio expansion and room remodel projects, and a loss on early retirement of debt of $5.5 million ($3.6 million, net of tax) related to the repurchase and retirement of the Company's publicly-traded debt securities.

Income from discontinued operations includes the results of Golden Nugget Las Vegas, Golden Nugget Laughlin and MGM Grand Australia. Pretax income from discontinued operations was $14 million in the 2004 first quarter which included the $8 million gain on the sale of the Golden Nugget resorts.

Financial Position

The Company generated significant operating cash flow in the first quarter as a result of its positive operating results. The Company utilized available cash flow in part to repay $124 million of net debt and invest $105 million in capital projects.

First quarter capital investments included the costs for the completion of the Bellagio expansion, construction of the new theatre for Cirque du Soleil at The Mirage, the new golf course at Beau Rivage, room remodel and casino expansion activity at MGM Grand Las Vegas and other routine capital expenditures.

"We expect that tremendous cash flow generated by our resorts, along with the addition of Mandalay Resort Group, will fuel significant debt reduction through the remainder of 2005," said Jim Murren, MGM MIRAGE President, CFO and Treasurer. "We are also planning on continuing our targeted capital investments, with plans for several new restaurants and other amenities at The Mirage and MGM Grand Las Vegas, and we are working at a rapid pace on the design phase of Project CityCenter."

Outlook

The Company expects same-store REVPAR growth of approximately 10% for the second quarter, after an 11% increase in the prior year. "Our trends remain vibrant and strong room pricing should once again lead to a year-over-year increase in EBITDA," Mr. Murren said. "We believe our Adjusted Earnings, on a same store basis, will be in the range of $0.70 to $0.75 per share, excluding any impact from the Mandalay merger and before adjusting for our proposed 2-for-1 stock split."

MGM MIRAGE will hold a conference call to discuss its earnings results and outlook for the second quarter of 2005 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). A complete replay of the conference call will be made available at www.mgmmirage.com.

   (1) Adjusted Earnings (and Adjusted EPS) is presented solely as a
       supplemental disclosure because management believes that it is 1) a
       widely used measure of performance, and 2) a principal basis for
       valuation of gaming companies, as this measure is considered by many
       to be a better measure on which to base expectations of future
       results than income from continuing operations computed in accordance
       with generally accepted accounting principles ("GAAP").
       Reconciliations of GAAP income from continuing operations and EPS to
       Adjusted Earnings and EPS are included in the financial schedules
       accompanying this release.

   (2) EBITDA is earnings before interest and other non-operating income
       (expense), taxes, depreciation and amortization, restructuring,
       preopening and start-up expenses, and property transactions, net.
       EBITDA 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.  Management uses property-level EBITDA
       (EBITDA before corporate expense) 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 operating
       income to EBITDA are included in the financial schedules accompanying
       this release.

                             *      *      *

MGM MIRAGE (NYSE: MGG), headquartered in Las Vegas, Nevada, is one of the world's leading and most respected hotel and gaming companies. The Company owns and operates 11 casino resorts located in Nevada, Mississippi and Michigan, and has investments in three other casino resorts in Nevada, New Jersey and the United Kingdom. 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,
                                                    2005           2004
   Revenues:
      Casino                                   $   614,813    $   558,723
      Rooms                                        274,054        234,961
      Food and beverage                            243,478        217,764
      Entertainment                                 88,147         67,242
      Retail                                        44,879         45,098
      Other                                         60,835         51,086
                                                 1,326,206      1,174,874
      Less: Promotional allowances                (122,071)      (108,438)
                                                 1,204,135      1,066,436
   Expenses:
      Casino                                       310,789        283,920
      Rooms                                         69,479         62,211
      Food and beverage                            134,311        119,620
      Entertainment                                 60,065         46,633
      Retail                                        29,584         28,546
      Other                                         39,465         32,889
      General and administrative                   158,364        146,298
      Corporate expense                             26,791         15,738
      Preopening and start-up expenses               2,524            381
      Restructuring costs (credit)                     (66)           414
      Property transactions, net                     4,203          1,739
      Depreciation and amortization                110,495         97,553
                                                   946,004        835,942

   Income from unconsolidated affiliates            35,045         24,172

   Operating income                                293,176        254,666

   Non-operating income (expense):
      Interest income                                1,697            903
      Interest expense, net                       (101,468)       (89,810)
      Non-operating items from
       unconsolidated affiliates                    (2,787)        (6,205)
      Other, net                                   (15,691)        (7,154)
                                                  (118,249)      (102,266)

   Income from continuing operations
    before income taxes                            174,927        152,400
      Provision for income taxes                   (63,848)       (55,260)
   Income from continuing operations               111,079         97,140

   Discontinued operations
      Income from discontinued operations,
       including gain on disposal of $8,186
       (three months 2004)                              --         13,869
      Provision for income taxes                        --         (5,161)
                                                        --          8,708

   Net income                                  $   111,079    $   105,848


   Per share of common stock:
      Basic:
      Income from continuing operations        $      0.79    $      0.68
      Discontinued operations                           --           0.06
      Net income per share                     $      0.79    $      0.74

      Weighted average shares outstanding          141,258        142,115

      Diluted:
      Income from continuing operations        $      0.75    $      0.66
      Discontinued operations                           --           0.06
      Net income per share                     $      0.75    $      0.72

      Weighted average shares outstanding          147,323        146,847



                       MGM MIRAGE AND SUBSIDIARIES
         RECONCILIATION OF GAAP INCOME FROM CONTINUING OPERATIONS
                   AND EPS TO ADJUSTED EARNINGS AND EPS
                  (In thousands, except per share data)
                               (Unaudited)

                                                    Three Months Ended
                                                  March 31,      March 31,
                                                    2005           2004
   Income from continuing operations           $   111,079    $    97,140
   Preopening and start-up expenses, net             1,641            248
   Restructuring costs (credit), net                   (43)           269
   Property transactions, net                        2,732          1,130
   Loss on debt retirements, net                    12,675          3,593
   Adjusted earnings                           $   128,084    $   102,380

   Per diluted share of common stock:
      Income from continuing operations        $      0.75    $      0.66
      Preopening and start-up expenses, net           0.01             --
      Restructuring costs (credit), net                 --             --
      Property transactions, net                      0.02           0.01
      Loss on debt retirements, net                   0.09           0.03
      Adjusted EPS                             $      0.87    $      0.70

      Weighted average diluted shares outstanding  147,323        146,847



                       MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF CONSOLIDATED EBITDA TO INCOME FROM CONTINUING OPERATIONS
                              (In thousands)
                               (Unaudited)

                                                    Three Months Ended
                                                  March 31,      March 31,
                                                    2005           2004

   EBITDA                                      $   410,332    $   354,753
    Preopening and start-up expenses                (2,524)          (381)
    Restructuring costs (credit)                        66           (414)
    Property transactions, net                      (4,203)        (1,739)
    Depreciation and amortization                 (110,495)       (97,553)
   Operating income                                293,176        254,666

   Non-operating income (expense):
    Interest expense, net                         (101,468)       (89,810)
    Other                                          (16,781)       (12,456)
                                                  (118,249)      (102,266)

   Income from continuing operations
    before income taxes                            174,927        152,400
     Provision for income taxes                    (63,848)       (55,260)
   Income from continuing operations           $   111,079    $    97,140



                       MGM MIRAGE AND SUBSIDIARIES
                SUPPLEMENTAL DATA - NET REVENUES BY RESORT
                              (In thousands)
                               (Unaudited)

                                                    Three Months Ended
                                                  March 31,      March 31,
                                                    2005           2004
   Bellagio                                    $   331,861    $   278,634
   MGM Grand Las Vegas                             254,242        223,020
   The Mirage                                      160,912        139,054
   Treasure Island                                 100,337         99,796
   New York-New York                                91,148         82,793
   MGM Grand Detroit                               113,700        103,917
   Beau Rivage                                      79,476         72,986
   Other operations                                 72,459         66,236
                                               $ 1,204,135    $ 1,066,436



                       MGM MIRAGE AND SUBSIDIARIES
                   SUPPLEMENTAL DATA - EBITDA BY RESORT
                              (In thousands)
                               (Unaudited)

                                                    Three Months Ended
                                                  March 31,      March 31,
                                                    2005           2004
   Bellagio                                    $   118,019    $    99,019
   MGM Grand Las Vegas                              88,317         75,829
   The Mirage                                       54,977         40,128
   Treasure Island                                  30,331         31,303
   New York-New York                                38,554         32,124
   MGM Grand Detroit                                38,882         38,562
   Beau Rivage                                      20,701         16,789
   Other operations                                 12,297         12,565
   Income from unconsolidated affiliates            35,045         24,172
                                               $   437,123    $   370,491



                       MGM MIRAGE AND SUBSIDIARIES
          RECONCILIATION OF OPERATING INCOME TO EBITDA BY RESORT
                              (In thousands)
                               (Unaudited)

                    Three Months Ended March 31, 2005

                              Depreci-   Pre-
                               ation   opening  Restruc-  Property
                                and      and     turing    trans-
                   Operating  amorti-  start-up   costs   actions,
                     income   zation   expenses (credit)    net     EBITDA
   Bellagio       $  85,175  $ 31,443  $  665    $  --   $   736  $ 118,019
   MGM Grand
    Las Vegas        60,182    25,196   1,609       --     1,330     88,317
   The Mirage        40,673    12,533      62       --     1,709     54,977
   Treasure Island   22,332     8,000      --       --        (1)    30,331
   New York-New York 29,945     8,609      --       --        --     38,554
   MGM Grand Detroit 31,865     7,015      --       --         2     38,882
   Beau Rivage       15,308     5,313      13       --        67     20,701
   Other operations   6,041     6,317      --       --       (61)    12,297
   Unconsolidated
    affiliates       34,976        --      69       --        --     35,045
                    326,497   104,426   2,418       --     3,782    437,123
   Corporate and
    other           (33,321)    6,069     106      (66)      421    (26,791)
                  $ 293,176 $ 110,495 $ 2,524    $ (66)  $ 4,203  $ 410,332

                    Three Months Ended March 31, 2004

                              Depreci-   Pre-
                               ation   opening             Property
                                and      and     Restruc-   trans-
                   Operating  amorti-  start-up   turing   actions,
                     income   zation   expenses    costs     net    EBITDA

   Bellagio       $  77,091  $ 20,352  $   --    $  --   $ 1,576  $  99,019
   MGM Grand
    Las Vegas        51,977    23,518     338       --        (4)    75,829
   The Mirage        27,411    12,657      --       --        60     40,128
   Treasure Island   22,651     8,660      --       --        (8)    31,303
   New York-New York 24,757     7,453     (86)      --        --     32,124
   MGM Grand Detroit 30,699     7,474      --       --       389     38,562
   Beau Rivage       11,674     5,304      --       --      (189)    16,789
   Other operations   8,265     4,385      --       --       (85)    12,565
   Unconsolidated
    affiliates       24,172        --      --       --        --     24,172
                    278,697    89,803     252       --     1,739    370,491
   Corporate and
    other           (24,031)    7,750     129      414        --    (15,738)
                  $ 254,666  $ 97,553  $  381    $ 414   $ 1,739  $ 354,753



                       MGM MIRAGE AND SUBSIDIARIES
                   SUPPLEMENTAL DATA - HOTEL STATISTICS
                               (Unaudited)

                                                    Three Months Ended
                                                  March 31,      March 31,
                                                    2005           2004
   Bellagio
    Occupancy %                                      96.1%          95.4%
    Average daily rate (ADR)                          $247           $255
    Revenue per available room (REVPAR)               $237           $243

   MGM Grand Las Vegas
    Occupancy %                                      95.2%          92.2%
    Average daily rate (ADR)                          $159           $139
    Revenue per available room (REVPAR)               $152           $128

   The Mirage
    Occupancy %                                      97.9%          94.2%
    Average daily rate (ADR)                          $170           $156
    Revenue per available room (REVPAR)               $167           $147

   Treasure Island
    Occupancy %                                      98.2%          96.5%
    Average daily rate (ADR)                          $136           $123
    Revenue per available room (REVPAR)               $134           $118

   New York-New York
    Occupancy %                                      99.2%          97.5%
    Average daily rate (ADR)                          $140           $119
    Revenue per available room (REVPAR)               $139           $116

   Beau Rivage
    Occupancy %                                      89.2%          86.1%
    Average daily rate (ADR)                           $99            $91
    Revenue per available room (REVPAR)                $88            $78

   Other operations
    Occupancy %                                      70.3%          69.2%
    Average daily rate (ADR)                           $50            $43
    Revenue per available room (REVPAR)                $35            $30



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

                                                  March 31,    December 31,
                                                    2005           2004

                                  ASSETS
   Current assets:
        Cash and cash equivalents             $    395,746   $    435,128
        Accounts receivable, net                   218,360        204,151
        Inventories                                 70,553         70,333
        Deferred income taxes                       39,670         28,928
        Prepaid expenses and other                  85,299         81,662
               Total current assets                809,628        820,202

   Property and equipment, net                   8,909,721      8,914,142

   Other assets:
        Investments in unconsolidated
         affiliates                                856,241        842,640
        Goodwill and other intangible
         assets, net                               232,902        233,335
        Deposits and other assets, net             322,806        304,710
               Total other assets                1,411,949      1,380,685
                                             $  11,131,298  $  11,115,029



                   LIABILITIES AND STOCKHOLDERS' EQUITY

   Current liabilities:
        Accounts payable                      $    123,342   $    198,050
        Income taxes payable                        15,762          4,991
        Current portion of long-term debt               14             14
        Accrued interest on long-term debt          82,828        116,997
        Other accrued liabilities                  586,340        607,925
               Total current liabilities           808,286        927,977

   Deferred income taxes                         1,802,297      1,802,008
   Long-term debt                                5,334,650      5,458,848
   Other long-term obligations                     163,269        154,492
   Stockholders' equity:
        Common stock ($.01 par value:
         authorized 300,000,000 shares,
         issued 176,606,918 and 173,573,934
         shares and outstanding 143,402,918
         and 140,369,934 shares)                     1,766          1,736
        Capital in excess of par value           2,484,121      2,346,329
        Deferred compensation                       (8,978)       (10,878)
        Treasury stock, at cost
         (33,204,000 and 33,204,000 shares)     (1,110,551)    (1,110,551)
        Retained earnings                        1,657,314      1,546,235
        Accumulated other comprehensive loss          (876)        (1,167)
               Total stockholders' equity        3,022,796      2,771,704
                                             $  11,131,298  $  11,115,029

SOURCE: MGM MIRAGE

CONTACT: Investment Community, James J. Murren, President, Chief
Financial Officer and Treasurer, +1-702-693-8877, or Media, Alan Feldman,
Senior Vice President, Public Affairs, +1-702-891-7147, both of MGM MIRAGE

Web site: http://www.mgmmirage.com/