FOR IMMEDIATE RELEASE
| | | | | |
CONTACTS:
| | Investment Community
| | Media
|
| | James J. Murren | | Alan Feldman |
| | President, Chief Financial Officer | | Senior Vice President |
| | and Treasurer | | Public Affairs |
| | (702) 693-8877 | | (702) 891-7147 |
MGM MIRAGE REPORTS RECORD THIRD QUARTER RESULTS
Las Vegas, Nevada, October 20, 2004— MGM MIRAGE (NYSE: MGG) today reported its third quarter 2004 financial results. Adjusted earnings from continuing operations per diluted share (“Adjusted EPS”) rose 68% to $0.57 in the third quarter of 2004 from $0.34 in the 2003 quarter, representing the Company’s best third quarter performance in its history and continuing a strong trend of year-over-year increases in earnings during 2004. The Company’s targeted enhancements to its Las Vegas resorts led to increased customer spending, and Las Vegas visitation remains robust. REVPAR (revenue per available room) rose 10% at the Company’s Las Vegas resorts in the 2004 quarter, on top of an 8% increase in 2003 compared to 2002. Other factors affecting current period results included table games hold percentage toward the low end of the Company’s normal range, offset by the benefit of continued strong collections of casino receivables resulting in a lower bad debt provision than the prior year quarter. The lower bad debt provision equates to a benefit of approximately $0.07 per diluted share for the current quarter. Casino revenues increased 5% despite the low table games hold percentage, as slot revenues increased a solid 9%.
Adjusted EPS (and Adjusted Earnings) excludes discontinued operations, preopening and start-up expenses, restructuring costs, net property transactions, tax adjustments and loss on early retirement of debt1. On a GAAP (Generally Accepted Accounting Principles) basis, diluted earnings per share from continuing operations doubled to $0.54 for the third quarter of 2004 from $0.27 in the 2003 quarter. GAAP diluted EPS, including the results of discontinued operations, was $0.89 in the 2004 period versus $0.31 in 2003.
“All of our resorts continue to generate industry-leading results, with our success in the third quarter building upon the foundation we’ve established throughout 2004,” said Terry Lanni, MGM MIRAGE’s Chairman and CEO. “We believe these positive trends will continue into the fourth quarter and throughout 2005. All of our indicators point to continued success for the Las Vegas leisure and convention businesses in the foreseeable future, and our resorts are uniquely positioned to benefit from that success.”
1
Third Quarter Company Highlights
| • | | Generated net revenues of $1.04 billion, up 6% over 2003; |
| • | | Company-wide REVPAR of $117, up 9% over prior year’s quarter; |
| • | | Produced property-level EBITDA2 of $348 million, up 20% over the 2003 quarter. Operating income was up 40% over the prior year, to $222 million. The Company’s property-level EBITDA margin was 34%; |
| • | | Opened several new restaurants and entertainment venues, including the remodeled Todd English’s Olives and Michael Mina’s signature restaurant atBellagio, Shibuya atMGM Grand Las Vegas, and Tangerine, the new nightclub atTI; |
| • | | Invested $173 million of capital in the Company’s properties, including continued construction of theBellagioexpansion, continued enhancements atMGM Grand Las Vegasand the completion of the remodel of all the standard rooms atNew York-New York; |
| • | | Issued $1 billion of senior notes at favorable fixed interest rates in two separate transactions; |
| • | | Obtained commitments to increase the borrowing capacity of the Company’s senior credit facility to $7 billion, providing the necessary financing for the Mandalay acquisition at an attractive cost of capital. |
Detailed Financial Results
The following table shows key financial results on a Company-wide basis for the third quarter and year to date.
| | | | | | | | | | | | | | | | | |
| | | Three months ended | | Nine months ended |
| | | September 30,
| | September 30,
|
| | | 2004
| | 2003
| | 2004
| | 2003
|
| | | (In millions) |
| Casino revenue, net | | $ | 541.0 | | | $ | 514.0 | | | $ | 1,651.4 | | | $ | 1,519.2 | |
| Non-casino revenue, net | | | 495.4 | | | | 462.9 | | | | 1,524.0 | | | | 1,383.6 | |
| Net revenue | | | 1,036.4 | | | | 976.9 | | | | 3,175.4 | | | | 2,902.8 | |
| Operating income | | | 222.4 | | | | 158.5 | | | | 737.6 | | | | 489.6 | |
| Income from continuing operations | | | 76.2 | | | | 41.4 | | | | 275.0 | | | | 144.6 | |
| Discontinued operations, net | | | 50.7 | | | | 5.8 | | | | 62.4 | | | | 7.4 | |
| Net income | | | 126.9 | | | | 47.2 | | | | 337.4 | | | | 152.0 | |
|
Property-level EBITDA2 | | $ | 347.6 | | | $ | 289.4 | | | $ | 1,102.1 | | | $ | 883.3 | |
EBITDA (after corporate expense)2 | | | 328.5 | | | | 273.9 | | | | 1,048.7 | | | | 839.1 | |
| Adjusted Earnings | | | 81.0 | | | | 52.6 | | | | 289.9 | | | | 176.9 | |
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, MGM Grand Australia and MGM MIRAGE Online for all periods presented. The results of these operations are classified as discontinued operations.
Net revenue in the third quarter increased 6% from the 2003 third quarter. This increase was due to strong casino and hotel volumes, continued increases in room rates and higher spending by our customers throughout our resorts.
2
Casino revenue increased 5% in the 2004 quarter. Table games volume, including baccarat, was consistent with prior year levels. The Company’s table games hold percentage was toward the low end of the normal range in the September 2004 quarter, and was consistent with the hold percentage experienced in 2003. Company-wide slot revenue in the quarter was up 9% from 2003. Several resorts experienced double-digit increases in slot revenues, includingNew York-New York,TI,Beau Rivage,MGM Grand Detroit, andPrimm Valley Resorts.
Non-casino revenue was up 7% in the quarter. Hotel revenue was up 8%, with a higher occupancy rate of 93% in the third quarter of 2004 versus 92% in 2003, and a higher average daily room rate (“ADR”) of $125 versus $116 in 2003. As a result, revenue per available room (“REVPAR”) was $117, an increase of 9% over 2003. REVPAR at the Company’s Las Vegas resorts was up 10% over the prior year to $134.
Food and beverage, entertainment, retail and other revenues were up 5% in the 2004 quarter. The Company believes it is capturing a greater share of customer spending due to the exciting new restaurant, entertainment and other amenities introduced in the past year.
Consolidated EBITDA increased 20% for the quarter, reflecting the strong revenue results and operating leverage inherent with higher hotel room rates. The property-level EBITDA margin was 34% in 2004, up from 30% in the prior year quarter and the Company’s highest third quarter margin since the 2000 merger of MGM Grand and Mirage Resorts. Additionally, the Company benefited from the increased contribution ofBorgata, leading to an increase in income from unconsolidated affiliates of 75% over 2003. Operating income increased 40% due to the increased property-level EBITDA and lower preopening and restructuring expenses in the current year.
Third quarter Adjusted Earnings increased 54% compared to 2003 due to the increase in operating income described above. Net interest expense increased due to higher average borrowings, slightly higher variable market interest rates and the issuance of fixed rate debt in the quarter.
For the third quarter of 2004, Adjusted Earnings excluded a net $6.5 million ($4.7 million, net of tax) of items. These items included:
| • | | Preopening and start-up expenses of $1.6 million ($1.0 million, net of tax), primarily related to new restaurants and KÀ, the new Cirque du Soleil production scheduled to open in November 2004, atMGM Grand Las Vegas; |
| • | | Restructuring costs of $1.6 million ($1.0 million, net of tax), the result of staffing reductions atMGM Grand Detroitas a result of the recent gaming tax increase in Michigan; |
| • | | Net property transactions of $1.7 million ($1.1 million, net of tax), including demolition costs related to theBellagioexpansion, and other net losses on disposal of assets; |
| • | | Tax adjustments of $1.6 million, representing additional state deferred taxes related to capital investments in New Jersey, partially offset by the reversal of reserves for prior year tax issues as the statutes of limitations on those years expired. |
3
In the third quarter of 2003, items excluded in the determination of Adjusted Earnings totaled $17.1 million ($11.2 million, net of tax) and included preopening and start-up expenses of $7.3 million ($4.8 million, net of tax), primarily related toBorgataandNew York-New York; restructuring costs of $4.0 million ($2.6 million, net of tax), primarily related to the termination of an operating lease atMGM Grand Las Vegas; property transactions, net of $2.6 million ($1.7 million, net of tax), primarily related to demolition costs for theBellagioexpansion and the KÀ theatre atMGM Grand Las Vegas; and loss on early retirement of debt of $3.2 million ($2.1 million, net of tax).
The Company’s effective income tax rate was 37.4% in the third quarter versus 35.8% in the prior year’s quarter. The net tax adjustments described above caused a portion of the increase in the effective rate. Additionally, the Company incurred higher-than-normal non-deductible costs related to funding support of ballot initiatives in Michigan.
Income from discontinued operations includes the results of the Golden Nugget Las Vegas and Golden Nugget Laughlin resorts, MGM MIRAGE Online and MGM Grand Australia. Pretax income from discontinued operations was $76 million in the third quarter of 2004, including a $74 million gain ($51 million, net of tax) on the sale of MGM Grand Australia. This compares to income of $9 million, including $3 million of allocated interest, in the 2003 period.
Financial Position
Third quarter capital investments of $173 million included $79 million for theBellagioexpansion and $15 million related to the renovation of the Emerald Tower and the 29th floor suites atMGM Grand Las Vegas.Other expenditures related to continued enhancements to dining and entertainment venues, as well as the completion of the standard room remodel project atNew York-New York.
During the quarter, the Company issued $1.0 billion of fixed rate debt at favorable interest rates. In August 2004, the Company issued $550 million of 6 3/4% senior notes due 2012 at par and in September 2004, the Company issued $450 million of 6% Senior Notes due 2009 at a premium to yield 5.65%. Upon issuance, these proceeds were used to repay amounts outstanding under the Company’s senior credit facility.
In addition, the Company has received sufficient commitments from its lenders to increase the capacity of its senior credit facility to $7 billion, providing the necessary financing for the pending Mandalay acquisition.
As of September 30, 2004, the Company had approximately $2.3 billion of available borrowings under its existing senior credit facility.
“We have created the financial foundation for the upcoming merger with Mandalay Resort Group with the recent issuances of Senior Notes and our commitments on a new senior credit facility,” said MGM MIRAGE President, CFO and Treasurer, Jim Murren. “While the fixed rate issuances have a negative short-term impact on reported EPS, we believe our capital structure provides us the optimal post-acquisition financing at attractive rates. We expect to rapidly de-leverage our Company, utilizing the significant free cash flow generated by the combination of MGM MIRAGE and Mandalay,” Mr. Murren said.
4
Outlook
The Company expects REVPAR growth to be in the 8-10% range in the fourth quarter of 2004, on top of a 5% year-over-year increase in the 2003 fourth quarter. Property-level EBITDA is expected to increase over the prior year, benefiting from strong customer activity, offset by several factors including increased gaming taxes in Detroit and 3% fewer room nights available. For the full year 2004, the Company will earn over $1.4 billion in property-level EBITDA, an all-time record and well in excess of the Company’s original expectations. Taking into account the higher non-operating items, primarily higher interest expense, the Company expects to earn in the range of $0.35 to $0.45 in the fourth quarter on an Adjusted EPS basis, compared to $0.36 in the prior year.
“We are pleased with the continued positive REVPAR trends and ongoing strength across all operating areas, and expect such trends to continue into 2005,” Mr. Murren said. “A significant contributor to fourth quarter profits is the New Year’s holiday and the period leading up to New Year’s, and it is difficult for us to predict results for that period at this early stage.”
MGM MIRAGE will hold a conference call to discuss its earnings results and outlook for the fourth 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). 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 or income from continuing operations, 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 income from continuing operations and operating income to EBITDA by resort are included in the financial schedules accompanying this release. |
* * *
5
MGM MIRAGE (NYSE: MGG), one of the world’s leading and most respected hotel and gaming companies, owns and operates 11 casino resorts located in Nevada, Mississippi and Michigan, and has investments in two other casino resorts in Nevada and New Jersey. The company is headquartered in Las Vegas, Nevada, and offers an unmatched collection of casino resorts with a limitless range of choices for guests. Guest satisfaction is paramount, and the company has approximately 40,000 employees committed to that result. Its portfolio of brands include AAA Five Diamond award-winner Bellagio, MGM Grand Las Vegas - The City of Entertainment, The Mirage, Treasure Island (“TI”), New York - New York, Boardwalk Hotel and Casino and 50 percent of Monte Carlo, all located on the Las Vegas Strip; Whiskey Pete’s, Buffalo Bill’s, Primm Valley Resort and two championship golf courses at the California/Nevada state line; the exclusive Shadow Creek golf course in North Las Vegas; Beau Rivage on the Mississippi Gulf Coast; and MGM Grand Detroit Casino in Detroit, Michigan. The Company is a 50-percent owner of Borgata, a destination casino resort at Renaissance Pointe in Atlantic City, New Jersey. Internationally, MGM MIRAGE also owns a 25 percent interest in Triangle Casino, a local casino in Bristol, United Kingdom. MGM MIRAGE supports Responsible Gaming and complies with the American Gaming Association’s Code of Conduct for Responsible Gaming. 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.
6
MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | Nine Months Ended
|
| | | September 30, | | September 30, | | September 30, | | September 30, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
| Revenues: | | | | | | | | | | | | | | | | |
| Casino | | $ | 540,957 | | | $ | 513,994 | | | $ | 1,651,371 | | | $ | 1,519,159 | |
| Rooms | | | 223,001 | | | | 206,039 | | | | 690,266 | | | | 632,026 | |
| Food and beverage | | | 205,262 | | | | 190,126 | | | | 635,066 | | | | 567,627 | |
| Entertainment | | | 67,099 | | | | 71,014 | | | | 200,312 | | | | 195,642 | |
| Retail | | | 46,023 | | | | 48,257 | | | | 139,193 | | | | 135,651 | |
| Other | | | 63,006 | | | | 53,435 | | | | 180,107 | | | | 160,792 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 1,145,348 | | | | 1,082,865 | | | | 3,496,315 | | | | 3,210,897 | |
| Less: Promotional allowances | | | (108,952 | ) | | | (106,023 | ) | | | (320,958 | ) | | | (308,064 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 1,036,396 | | | | 976,842 | | | | 3,175,357 | | | | 2,902,833 | |
| | | |
| | | |
| | | |
| | | |
| |
| Expenses: | | | | | | | | | | | | | | | | |
| Casino | | | 274,230 | | | | 263,329 | | | | 821,351 | | | | 777,157 | |
| Rooms | | | 60,329 | | | | 59,702 | | | | 184,629 | | | | 176,518 | |
| Food and beverage | | | 120,156 | | | | 111,221 | | | | 360,843 | | | | 323,167 | |
| Entertainment | | | 48,142 | | | | 49,920 | | | | 142,269 | | | | 140,030 | |
| Retail | | | 29,867 | | | | 30,378 | | | | 88,945 | | | | 86,226 | |
| Other | | | 38,249 | | | | 34,046 | | | | 109,461 | | | | 97,815 | |
| Provision for doubtful accounts | | | (11,696 | ) | | | 3,847 | | | | (7,734 | ) | | | 18,267 | |
| General and administrative | | | 160,962 | | | | 153,019 | | | | 458,663 | | | | 437,696 | |
| Corporate expense | | | 19,183 | | | | 15,456 | | | | 53,379 | | | | 44,224 | |
| Preopening and start-up expenses | | | 1,584 | | | | 7,316 | | | | 3,584 | | | | 28,759 | |
| Restructuring costs | | | 1,587 | | | | 4,034 | | | | 5,901 | | | | 5,187 | |
| Property transactions, net | | | 1,677 | | | | 2,600 | | | | 5,354 | | | | 12,510 | |
| Depreciation and amortization | | | 101,245 | | | | 101,450 | | | | 296,282 | | | | 303,044 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 845,515 | | | | 836,318 | | | | 2,522,927 | | | | 2,450,600 | |
| | | |
| | | |
| | | |
| | | |
| |
| Income from unconsolidated affiliates | | | 31,476 | | | | 18,018 | | | | 85,190 | | | | 37,354 | |
| | | |
| | | |
| | | |
| | | |
| |
| Operating income | | | 222,357 | | | | 158,542 | | | | 737,620 | | | | 489,587 | |
| | | |
| | | |
| | | |
| | | |
| |
| Non-operating income (expense): | | | | | | | | | | | | | | | | |
| Interest income | | | 1,421 | | | | 790 | | | | 3,440 | | | | 3,232 | |
| Interest expense, net | | | (95,262 | ) | | | (85,210 | ) | | | (277,694 | ) | | | (248,189 | ) |
| Non-operating items from unconsolidated affiliates | | | (6,419 | ) | | | (3,998 | ) | | | (19,314 | ) | | | (4,222 | ) |
| Other, net | | | (435 | ) | | | (5,670 | ) | | | (10,162 | ) | | | (10,463 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| | | | (100,695 | ) | | | (94,088 | ) | | | (303,730 | ) | | | (259,642 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Income from continuing operations before income taxes | | | 121,662 | | | | 64,454 | | | | 433,890 | | | | 229,945 | |
| Provision for income taxes | | | (45,495 | ) | | | (23,079 | ) | | | (158,920 | ) | | | (85,338 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Income from continuing operations | | | 76,167 | | | | 41,375 | | | | 274,970 | | | | 144,607 | |
| | | |
| | | |
| | | |
| | | |
| |
| Discontinued operations | | | | | | | | | | | | | | | | |
| Income from discontinued operations, including gain (loss) on disposal of $74,352 (three months 2004), $82,538 (nine months 2004) and ($7,357) (nine months 2003) | | | 75,529 | | | | 8,679 | | | | 94,207 | | | | 7,090 | |
| Benefit (provision) for income taxes | | | (24,815 | ) | | | (2,845 | ) | | | (31,731 | ) | | | 265 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 50,714 | | | | 5,834 | | | | 62,476 | | | | 7,355 | |
| | | |
| | | |
| | | |
| | | |
| |
| Net income | | $ | 126,881 | | | $ | 47,209 | | | $ | 337,446 | | | $ | 151,962 | |
| | | |
| | | |
| | | |
| | | |
| |
| Per share of common stock: | | | | | | | | | | | | | | | | |
| Basic: | | | | | | | | | | | | | | | | |
| Income from continuing operations | | $ | 0.55 | | | $ | 0.28 | | | $ | 1.97 | | | $ | 0.96 | |
| Discontinued operations | | | 0.37 | | | | 0.04 | | | | 0.44 | | | | 0.05 | |
| | | |
| | | |
| | | |
| | | |
| |
| Net income per share | | $ | 0.92 | | | $ | 0.32 | | | $ | 2.41 | | | $ | 1.01 | |
| | | |
| | | |
| | | |
| | | |
| |
| Weighted average shares outstanding | | | 137,786 | | | | 149,051 | | | | 139,933 | | | | 150,616 | |
| | | |
| | | |
| | | |
| | | |
| |
| Diluted: | | | | | | | | | | | | | | | | |
| Income from continuing operations | | $ | 0.54 | | | $ | 0.27 | | | $ | 1.90 | | | $ | 0.95 | |
| Discontinued operations | | | 0.35 | | | | 0.04 | | | | 0.43 | | | | 0.04 | |
| | | |
| | | |
| | | |
| | | |
| |
| Net income per share | | $ | 0.89 | | | $ | 0.31 | | | $ | 2.33 | | | $ | 0.99 | |
| | | |
| | | |
| | | |
| | | |
| |
| Weighted average shares outstanding | | | 142,260 | | | | 152,740 | | | | 144,616 | | | | 152,994 | |
| | | |
| | | |
| | | |
| | | |
| |
7
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
| | Nine Months Ended
|
| | | September 30, | | September 30, | | September 30, | | September 30, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
| Income from continuing operations | | $ | 76,167 | | | $ | 41,375 | | | $ | 274,970 | | | $ | 144,607 | |
| Preopening and start-up expenses, net | | | 1,030 | | | | 4,755 | | | | 2,330 | | | | 18,693 | |
| Restructuring costs, net | | | 1,032 | | | | 2,623 | | | | 3,836 | | | | 3,372 | |
| Property transactions, net | | | 1,090 | | | | 1,690 | | | | 3,480 | | | | 8,132 | |
| Tax adjustments | | | 1,643 | | | | — | | | | 1,643 | | | | — | |
| Loss on debt retirements, net | | | — | | | | 2,109 | | | | 3,593 | | | | 2,109 | |
| | | |
| | | |
| | | |
| | | |
| |
| Adjusted earnings | | $ | 80,962 | | | $ | 52,552 | | | $ | 289,852 | | | $ | 176,913 | |
| | | |
| | | |
| | | |
| | | |
| |
| Per diluted share of common stock: | | | | | | | | | | | | | | | | |
| Income from continuing operations | | $ | 0.54 | | | $ | 0.27 | | | $ | 1.90 | | | $ | 0.95 | |
| Preopening and start-up expenses, net | | | — | | | | 0.03 | | | | 0.02 | | | | 0.13 | |
| Restructuring costs, net | | | 0.01 | | | | 0.02 | | | | 0.03 | | | | 0.02 | |
| Property transactions, net | | | 0.01 | | | | 0.01 | | | | 0.02 | | | | 0.05 | |
| Tax adjustments | | | 0.01 | | | | — | | | | 0.01 | | | | — | |
| Loss on debt retirements, net | | | — | | | | 0.01 | | | | 0.02 | | | | 0.01 | |
| | | |
| | | |
| | | |
| | | |
| |
| Adjusted EPS | | $ | 0.57 | | | $ | 0.34 | | | $ | 2.00 | | | $ | 1.16 | |
| | | |
| | | |
| | | |
| | | |
| |
| Weighted average diluted shares outstanding | | | 142,260 | | | | 152,740 | | | | 144,616 | | | | 152,994 | |
| | | |
| | | |
| | | |
| | | |
| |
MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF CONSOLIDATED EBITDA TO INCOME FROM CONTINUING OPERATIONS
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | Nine Months Ended
|
| | | September 30, | | September 30, | | September 30, | | September 30, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
| EBITDA | | $ | 328,450 | | | $ | 273,942 | | | $ | 1,048,741 | | | $ | 839,087 | |
| Preopening and start-up expenses | | | (1,584 | ) | | | (7,316 | ) | | | (3,584 | ) | | | (28,759 | ) |
| Restructuring costs | | | (1,587 | ) | | | (4,034 | ) | | | (5,901 | ) | | | (5,187 | ) |
| Property transactions, net | | | (1,677 | ) | | | (2,600 | ) | | | (5,354 | ) | | | (12,510 | ) |
| Depreciation and amortization | | | (101,245 | ) | | | (101,450 | ) | | | (296,282 | ) | | | (303,044 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Operating income | | | 222,357 | | | | 158,542 | | | | 737,620 | | | | 489,587 | |
| | | |
| | | |
| | | |
| | | |
| |
| Non-operating income (expense): | | | | | | | | | | | | | | | | |
| Interest expense, net | | | (95,262 | ) | | | (85,210 | ) | | | (277,694 | ) | | | (248,189 | ) |
| Other | | | (5,433 | ) | | | (8,878 | ) | | | (26,036 | ) | | | (11,453 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| | | | (100,695 | ) | | | (94,088 | ) | | | (303,730 | ) | | | (259,642 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Income from continuing operations before income taxes | | | 121,662 | | | | 64,454 | | | | 433,890 | | | | 229,945 | |
| Provision for income taxes | | | (45,495 | ) | | | (23,079 | ) | | | (158,920 | ) | | | (85,338 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Income from continuing operations | | $ | 76,167 | | | $ | 41,375 | | | $ | 274,970 | | | $ | 144,607 | |
| | | |
| | | |
| | | |
| | | |
| |
8
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA - NET REVENUES BY RESORT
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | Nine Months Ended
|
| | | September 30, | | September 30, | | September 30, | | September 30, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
| Bellagio | | $ | 247,745 | | | $ | 233,453 | | | $ | 788,236 | | | $ | 733,993 | |
| MGM Grand Las Vegas | | | 210,436 | | | | 194,502 | | | | 650,854 | | | | 558,978 | |
| The Mirage | | | 137,031 | | | | 148,481 | | | | 425,289 | | | | 443,856 | |
| Treasure Island | | | 92,997 | | | | 87,243 | | | | 287,921 | | | | 264,136 | |
| New York-New York | | | 86,094 | | | | 72,052 | | | | 251,635 | | | | 193,725 | |
| MGM Grand Detroit | | | 104,835 | | | | 97,752 | | | | 320,819 | | | | 294,999 | |
| Beau Rivage | | | 79,990 | | | | 79,081 | | | | 235,168 | | | | 226,354 | |
| Other operations | | | 77,268 | | | | 64,278 | | | | 215,435 | | | | 186,792 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 1,036,396 | | | $ | 976,842 | | | $ | 3,175,357 | | | $ | 2,902,833 | |
| | | |
| | | |
| | | |
| | | |
| |
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA - EBITDA BY RESORT
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | Nine Months Ended
|
| | | September 30, | | September 30, | | September 30, | | September 30, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
| Bellagio | | $ | 77,126 | | | $ | 62,004 | | | $ | 258,861 | | | $ | 223,672 | |
| MGM Grand Las Vegas | | | 69,483 | | | | 58,729 | | | | 228,387 | | | | 164,070 | |
| The Mirage | | | 39,043 | | | | 40,811 | | | | 130,212 | | | | 120,558 | |
| Treasure Island | | | 25,043 | | | | 18,981 | | | | 82,658 | | | | 68,323 | |
| New York-New York | | | 32,845 | | | | 26,014 | | | | 96,217 | | | | 74,311 | |
| MGM Grand Detroit | | | 35,604 | | | | 35,335 | | | | 118,570 | | | | 111,892 | |
| Beau Rivage | | | 22,846 | | | | 20,206 | | | | 61,714 | | | | 54,803 | |
| Other operations | | | 14,167 | | | | 9,300 | | | | 40,311 | | | | 28,328 | |
| Income from unconsolidated affiliates | | | 31,476 | | | | 18,018 | | | | 85,190 | | | | 37,354 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 347,633 | | | $ | 289,398 | | | $ | 1,102,120 | | | $ | 883,311 | |
| | | |
| | | |
| | | |
| | | |
| |
9
MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO EBITDA BY RESORT
(In thousands)
(Unaudited)
Three Months Ended September 30, 2004
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Depreciation | | Preopening | | | | | | Property | | |
| | | Operating | | and | | and start-up | | Restructuring | | transactions, | | |
| | | income
| | amortization
| | expenses
| | costs
| | net
| | EBITDA
|
| Bellagio | | $ | 53,041 | | | $ | 22,257 | | | $ | 288 | | | $ | — | | | $ | 1,540 | | | $ | 77,126 | |
| MGM Grand Las Vegas | | | 43,659 | | | | 25,130 | | | | 1,146 | | | | — | | | | (452 | ) | | | 69,483 | |
| The Mirage | | | 24,930 | | | | 13,423 | | | | — | | | | — | | | | 690 | | | | 39,043 | |
| Treasure Island | | | 17,097 | | | | 7,967 | | | | 143 | | | | — | | | | (164 | ) | | | 25,043 | |
| New York-New York | | | 24,252 | | | | 8,586 | | | | 7 | | | | — | | | | — | | | | 32,845 | |
| MGM Grand Detroit | | | 26,207 | | | | 7,810 | | | | — | | | | 1,587 | | | | — | | | | 35,604 | |
| Beau Rivage | | | 17,504 | | | | 5,219 | | | | — | | | | — | | | | 123 | | | | 22,846 | |
| Other operations | | | 8,540 | | | | 5,632 | | | | — | | | | — | | | | (5 | ) | | | 14,167 | |
| Unconsolidated affiliates | | | 31,476 | | | | — | | | | — | | | | — | | | | — | | | | 31,476 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 246,706 | | | | 96,024 | | | | 1,584 | | | | 1,587 | | | | 1,732 | | | | 347,633 | |
| Corporate and other | | | (24,349 | ) | | | 5,221 | | | | — | | | | — | | | | (55 | ) | | | (19,183 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 222,357 | | | $ | 101,245 | | | $ | 1,584 | | | $ | 1,587 | | | $ | 1,677 | | | $ | 328,450 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
Three Months Ended September 30, 2003
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Depreciation | | Preopening | | | | | | Property | | |
| | | Operating | | and | | and start-up | | Restructuring | | transactions, | | |
| | | income
| | amortization
| | expenses
| | costs
| | net
| | EBITDA
|
| Bellagio | | $ | 36,608 | | | $ | 24,613 | | | $ | — | | | $ | — | | | $ | 783 | | | $ | 62,004 | |
| MGM Grand Las Vegas | | | 30,414 | | | | 22,573 | | | | 675 | | | | 3,856 | | | | 1,211 | | | | 58,729 | |
| The Mirage | | | 27,928 | | | | 12,366 | | | | — | | | | — | | | | 517 | | | | 40,811 | |
| Treasure Island | | | 10,449 | | | | 8,521 | | | | — | | | | — | | | | 11 | | | | 18,981 | |
| New York-New York | | | 17,006 | | | | 6,534 | | | | 2,320 | | | | 178 | | | | (24 | ) | | | 26,014 | |
| MGM Grand Detroit | | | 27,441 | | | | 7,672 | | | | 150 | | | | — | | | | 72 | | | | 35,335 | |
| Beau Rivage | | | 14,815 | | | | 5,237 | | | | — | | | | — | | | | 154 | | | | 20,206 | |
| Other operations | | | 4,702 | | | | 4,723 | | | | — | | | | — | | | | (125 | ) | | | 9,300 | |
| Unconsolidated affiliates | | | 14,593 | | | | — | | | | 3,425 | | | | — | | | | — | | | | 18,018 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 183,956 | | | | 92,239 | | | | 6,570 | | | | 4,034 | | | | 2,599 | | | | 289,398 | |
| Corporate and other | | | (25,414 | ) | | | 9,211 | | | | 746 | | | | — | | | | 1 | | | | (15,456 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 158,542 | | | $ | 101,450 | | | $ | 7,316 | | | $ | 4,034 | | | $ | 2,600 | | | $ | 273,942 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
10
MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO EBITDA BY RESORT - continued
(In thousands)
(Unaudited)
Nine Months Ended September 30, 2004
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Preopening | | | | | | Property | | |
| | | Operating | | Depreciation and | | and start-up | | Restructuring | | transactions, | | |
| | | income
| | amortization
| | expenses
| | costs
| | net
| | EBITDA
|
| Bellagio | | $ | 188,364 | | | $ | 64,613 | | | $ | 288 | | | $ | 3,000 | | | $ | 2,596 | | | $ | 258,861 | |
| MGM Grand Las Vegas | | | 151,388 | | | | 70,818 | | | | 2,985 | | | | 900 | | | | 2,296 | | | | 228,387 | |
| The Mirage | | | 90,490 | | | | 38,983 | | | | — | | | | — | | | | 739 | | | | 130,212 | |
| Treasure Island | | | 57,060 | | | | 25,513 | | | | 261 | | | | — | | | | (176 | ) | | | 82,658 | |
| New York-New York | | | 72,201 | | | | 24,050 | | | | (79 | ) | | | — | | | | 45 | | | | 96,217 | |
| MGM Grand Detroit | | | 93,980 | | | | 22,657 | | | | — | | | | 1,587 | | | | 346 | | | | 118,570 | |
| Beau Rivage | | | 45,847 | | | | 15,765 | | | | — | | | | — | | | | 102 | | | | 61,714 | |
| Other operations | | | 24,042 | | | | 15,821 | | | | — | | | | — | | | | 448 | | | | 40,311 | |
| Unconsolidated affiliates | | | 85,190 | | | | — | | | | — | | | | — | | | | — | | | | 85,190 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 808,562 | | | | 278,220 | | | | 3,455 | | | | 5,487 | | | | 6,396 | | | | 1,102,120 | |
| Corporate and other | | | (70,942 | ) | | | 18,062 | | | | 129 | | | | 414 | | | | (1,042 | ) | | | (53,379 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 737,620 | | | $ | 296,282 | | | $ | 3,584 | | | $ | 5,901 | | | $ | 5,354 | | | $ | 1,048,741 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
Nine Months Ended September 30, 2003
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Depreciation | | Preopening | | | | | | Property | | |
| | | Operating | | and | | and start-up | | Restructuring | | transactions, | | |
| | | income
| | amortization
| | expenses
| | costs
| | net
| | EBITDA
|
| Bellagio | | $ | 143,156 | | | $ | 79,628 | | | $ | — | | | $ | — | | | $ | 888 | | | $ | 223,672 | |
| MGM Grand Las Vegas | | | 85,632 | | | | 63,301 | | | | 1,566 | | | | 3,881 | | | | 9,690 | | | | 164,070 | |
| The Mirage | | | 82,753 | | | | 37,133 | | | | — | | | | 300 | | | | 372 | | | | 120,558 | |
| Treasure Island | | | 42,927 | | | | 25,340 | | | | — | | | | 178 | | | | (122 | ) | | | 68,323 | |
| New York-New York | | | 51,324 | | | | 18,422 | | | | 4,387 | | | | 178 | | | | — | | | | 74,311 | |
| MGM Grand Detroit | | | 86,118 | | | | 24,796 | | | | 450 | | | | — | | | | 528 | | | | 111,892 | |
| Beau Rivage | | | 38,988 | | | | 14,640 | | | | — | | | | — | | | | 1,175 | | | | 54,803 | |
| Other operations | | | 14,090 | | | | 14,503 | | | | — | | | | — | | | | (265 | ) | | | 28,328 | |
| Unconsolidated affiliates | | | 18,028 | | | | — | | | | 19,326 | | | | — | | | | — | | | | 37,354 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 563,016 | | | | 277,763 | | | | 25,729 | | | | 4,537 | | | | 12,266 | | | | 883,311 | |
| Corporate and other | | | (73,429 | ) | | | 25,281 | | | | 3,030 | | | | 650 | | | | 244 | | | | (44,224 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 489,587 | | | $ | 303,044 | | | $ | 28,759 | | | $ | 5,187 | | | $ | 12,510 | | | $ | 839,087 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
11
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA - HOTEL STATISTICS
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | Nine Months Ended
|
| | | September 30, | | September 30, | | September 30, | | September 30, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
| Bellagio | | | | | | | | | | | | | | | | |
| Occupancy % | | | 97.3 | % | | | 96.7 | % | | | 96.4 | % | | | 95.2 | % |
| Average daily rate (ADR) | | $ | 224 | | | $ | 219 | | | $ | 239 | | | $ | 229 | |
| Revenue per available room (REVPAR) | | $ | 218 | | | $ | 212 | | | $ | 231 | | | $ | 218 | |
| MGM Grand Las Vegas | | | | | | | | | | | | | | | | |
| Occupancy % | | | 95.9 | % | | | 95.6 | % | | | 94.3 | % | | | 94.4 | % |
| Average daily rate (ADR) | | $ | 121 | | | $ | 112 | | | $ | 131 | | | $ | 115 | |
| Revenue per available room (REVPAR) | | $ | 116 | | | $ | 107 | | | $ | 123 | | | $ | 109 | |
| The Mirage | | | | | | | | | | | | | | | | |
| Occupancy % | | | 98.1 | % | | | 98.2 | % | | | 97.0 | % | | | 95.9 | % |
| Average daily rate (ADR) | | $ | 144 | | | $ | 129 | | | $ | 150 | | | $ | 137 | |
| Revenue per available room (REVPAR) | | $ | 142 | | | $ | 126 | | | $ | 146 | | | $ | 131 | |
| Treasure Island | | | | | | | | | | | | | | | | |
| Occupancy % | | | 98.2 | % | | | 97.8 | % | | | 97.9 | % | | | 97.4 | % |
| Average daily rate (ADR) | | $ | 109 | | | $ | 98 | | | $ | 115 | | | $ | 102 | |
| Revenue per available room (REVPAR) | | $ | 107 | | | $ | 96 | | | $ | 113 | | | $ | 100 | |
| New York-New York | | | | | | | | | | | | | | | | |
| Occupancy % | | | 98.5 | % | | | 98.4 | % | | | 98.2 | % | | | 98.5 | % |
| Average daily rate (ADR) | | $ | 109 | | | $ | 95 | | | $ | 115 | | | $ | 97 | |
| Revenue per available room (REVPAR) | | $ | 108 | | | $ | 93 | | | $ | 113 | | | $ | 96 | |
| Beau Rivage | | | | | | | | | | | | | | | | |
| Occupancy % | | | 92.6 | % | | | 94.0 | % | | | 91.2 | % | | | 93.3 | % |
| Average daily rate (ADR) | | $ | 100 | | | $ | 97 | | | $ | 96 | | | $ | 94 | |
| Revenue per available room (REVPAR) | | $ | 92 | | | $ | 91 | | | $ | 88 | | | $ | 88 | |
| Other operations | | | | | | | | | | | | | | | | |
| Occupancy % | | | 74.4 | % | | | 68.7 | % | | | 73.0 | % | | | 68.6 | % |
| Average daily rate (ADR) | | $ | 41 | | | $ | 42 | | | $ | 42 | | | $ | 43 | |
| Revenue per available room (REVPAR) | | $ | 31 | | | $ | 29 | | | $ | 31 | | | $ | 29 | |
12
MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| | | | | | | | | |
| | | September 30, | | December 31, |
| | | 2004
| | 2003
|
| ASSETS | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 355,632 | | | $ | 178,047 | |
| Accounts receivable, net | | | 172,408 | | | | 139,475 | |
| Inventories | | | 64,173 | | | | 65,189 | |
| Income tax receivable | | | — | | | | 9,901 | |
| Deferred income taxes | | | 38,337 | | | | 49,286 | |
| Prepaid expenses and other | | | 88,651 | | | | 89,641 | |
| Assets held for sale | | | — | | | | 226,082 | |
| | | |
| | | |
| |
| Total current assets | | | 719,201 | | | | 757,621 | |
| | | |
| | | |
| |
| Property and equipment, net | | | 8,862,740 | | | | 8,681,339 | |
| Other assets: | | | | | | | | |
| Investments in unconsolidated affiliates | | | 805,046 | | | | 756,012 | |
| Goodwill and other intangible assets, net | | | 233,059 | | | | 267,668 | |
| Deposits and other assets, net | | | 278,784 | | | | 247,070 | |
| | | |
| | | |
| |
| Total other assets | | | 1,316,889 | | | | 1,270,750 | |
| | | |
| | | |
| |
| | | $ | 10,898,830 | | | $ | 10,709,710 | |
| | | |
| | | |
| |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 101,584 | | | $ | 85,439 | |
| Income taxes payable | | | 46,572 | | | | — | |
| Current portion of long-term debt | | | 14 | | | | 9,008 | |
| Accrued interest on long-term debt | | | 77,632 | | | | 87,711 | |
| Other accrued liabilities | | | 557,681 | | | | 559,445 | |
| Liabilities related to assets held for sale | | | — | | | | 23,456 | |
| | | |
| | | |
| |
| Total current liabilities | | | 783,483 | | | | 765,059 | |
| | | |
| | | |
| |
| Deferred income taxes | | | 1,772,269 | | | | 1,765,426 | |
| Long-term debt | | | 5,569,768 | | | | 5,521,890 | |
| Other long-term obligations | | | 141,925 | | | | 123,547 | |
| Stockholders’ equity: | | | | | | | | |
| Common stock ($.01 par value: authorized 300,000,000 shares, issued 171,875,786 and 168,268,213 shares and outstanding 138,682,786 and 143,096,213 shares) | | | 1,719 | | | | 1,683 | |
| Capital in excess of par value | | | 2,284,353 | | | | 2,171,625 | |
| Deferred compensation | | | (12,947 | ) | | | (19,174 | ) |
| Treasury stock, at cost (33,193,000 and 25,172,000 shares) | | | (1,110,228 | ) | | | (760,594 | ) |
| Retained earnings | | | 1,471,349 | | | | 1,133,903 | |
| Accumulated other comprehensive income (loss) | | | (2,861 | ) | | | 6,345 | |
| | | |
| | | |
| |
| Total stockholders’ equity | | | 2,631,385 | | | | 2,533,788 | |
| | | |
| | | |
| |
| | | $ | 10,898,830 | | | $ | 10,709,710 | |
| | | |
| | | |
| |
13
