Exhibit 99
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FOR IMMEDIATE RELEASE
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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 SECOND QUARTER RESULTS
Las Vegas, Nevada, July 21, 2004— MGM MIRAGE (NYSE: MGG) today reported its second quarter 2004 financial results. Adjusted earnings from continuing operations per diluted share (“Adjusted EPS”) rose 72% to $0.74 in the second quarter of 2004 from $0.43 in the 2003 quarter. These results represent an all-time record for Adjusted EPS in the Company’s history, exceeding the previous record of $0.70 set in the first quarter of this year. Current quarter results benefited from the Company’s capital investment and marketing programs which are driving increased visitation and customer spending company-wide. Casino revenues grew an impressive 8% in the quarter, while hotel revenues also posted a stellar 9% increase. REVPAR (revenue per available room) increased 12% at the Company’s Las Vegas Strip resorts in the quarter. Current quarter results also benefited from strong collections of casino receivables resulting in a lower bad debt provision compared to prior year, which equates to a benefit of approximately $0.04 per diluted share in the current quarter.
Adjusted EPS (and Adjusted Earnings) excludes discontinued operations, preopening and start-up expenses, restructuring costs, net property transactions and loss on early retirement of debt1. On a GAAP (Generally Accepted Accounting Principles) basis, diluted earnings per share from continuing operations increased to $0.70 for the second quarter of 2004 from $0.36 in the 2003 quarter. GAAP diluted EPS, including the results of discontinued operations, was $0.72 in the 2004 period versus $0.35 in 2003.
“We continue to reap the rewards of our steady and targeted investments in our capital assets and enhanced marketing and technology programs for our guests,” said Terry Lanni, MGM MIRAGE’s Chairman and CEO. “The announced acquisition of Mandalay Resort Group accelerates our growth initiatives and will add to the ranks of our management and employee talent, enhance our portfolio of resorts, and provide additional amenities to our customers. Las Vegas is becoming one of the world’s leading business and leisure travel destinations, and we believe MGM MIRAGE is uniquely positioned to benefit from that success.”
1
Second Quarter Company Highlights
| • | | Generated net revenues of $1.07 billion, up almost $100 million, or 10%, over 2003; |
| • | | Company-wide REVPAR of $123, up 11% over prior year’s quarter; |
| • | | Produced property-level EBITDA2 of $384 million, up 25% over the 2003 quarter, and an all-time record for the Company for any quarter. Operating income was up 52% over the prior year, to $261 million. The Company’s property-level EBITDA margin was 36%, the highest quarterly margin since the Mirage acquisition in 2000; |
| • | | Opened several new restaurants and entertainment venues at several resorts, including Cravings, the ultimate buffet dining experience atThe Mirage; Fix, the newest restaurant atBellagio; Isla Mexican Kitchen and Tequila Bar atTI, Tangerine atTI, an indoor/outdoor nightclub and lounge experience unlike any other in Las Vegas; and Shibuya and Diego atMGM Grand Las Vegas, redefining Japanese and Mexican cuisines in Las Vegas; |
| • | | Invested $165 million of capital in the Company’s properties, including continued construction of theBellagioexpansion and the theatre for the new Cirque du Soleil show at theMGM Grand Las Vegas; |
| • | | Entered into an agreement to acquire Mandalay Resort Group for $71 per share, plus the assumption of debt, bringing total consideration to approximately $8 billion, including transaction costs. |
| • | | Announced a joint venture agreement with Pansy Ho Chiu-king to develop, build and operate a major hotel-casino resort in Macau S.A.R.; |
| • | | Launched the MGM MIRAGE Rewards VisaTM Card, with BankOne, allowing customers to earn exclusive privileges at MGM MIRAGE resorts when they use their MGM MIRAGE Rewards VisaTM Card; |
| • | | Repurchased 5 million shares of Company common stock for $223 million in the quarter. |
Detailed Financial Results
The following table shows key financial results on a Company-wide basis for the second quarter and year to date.
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| | | Three months ended | | Six months ended |
| | | June 30,
| | June 30,
|
| | | 2004
| | 2003
| | 2004
| | 2003
|
| | | (In millions) |
| Casino revenue, net | | $ | 551.7 | | | $ | 508.9 | | | $ | 1,110.4 | | | $ | 1,005.2 | |
| Non-casino revenue, net | | | 520.8 | | | | 465.2 | | | | 1,028.6 | | | | 920.8 | |
| Net revenue | | | 1,072.5 | | | | 974.1 | | | | 2,139.0 | | | | 1,926.0 | |
| Operating income | | | 260.6 | | | | 171.6 | | | | 515.3 | | | | 331.0 | |
| Income from continuing operations | | | 101.7 | | | | 54.5 | | | | 198.8 | | | | 103.2 | |
| Discontinued operations, net | | | 3.0 | | | | (0.7 | ) | | | 11.8 | | | | 1.6 | |
| Net income | | | 104.7 | | | | 53.8 | | | | 210.6 | | | | 104.8 | |
|
Property-level EBITDA2 | | $ | 384.0 | | | $ | 306.2 | | | $ | 754.5 | | | $ | 593.9 | |
EBITDA (after corporate expense)2 | | | 365.5 | | | | 291.1 | | | | 720.3 | | | | 565.1 | |
| Adjusted Earnings | | | 106.5 | | | | 66.5 | | | | 208.9 | | | | 124.4 | |
2
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 and MGM MIRAGE Online for all periods presented. The results of these operations are classified as discontinued operations.
Net revenue in the second quarter increased 10% from the 2003 second quarter. This increase was due to strong casino and hotel volumes, increased room pricing and increased spending by our customers in all areas of our resorts.
Casino revenue increased by 8% in the 2004 quarter. Table games volume, including baccarat, was up 8% from the prior year’s quarter, with strength in both national and international play, primarily atMGM Grand Las Vegas, where the Company held a baccarat tournament in April for its premium customers. Table games hold percentages were within a normal range for both periods and the hold percentage in 2004 was in line with the hold percentage in 2003. Company-wide slot revenue in the quarter was up 10% from 2003. Several resorts experienced double-digit increases in slot revenues, includingNew York-New York,The MirageandMGM Grand Detroit.
Non-casino revenue was up 12% in the quarter. Hotel revenue was up 9%, with higher occupancy of 94% in the second quarter of 2004 versus 92% in 2003, and a higher average daily room rate (“ADR”) of $131 versus $121 in 2003. As a result, revenue per available room (“REVPAR”) was $123, an increase of 11% over 2003. REVPAR at the Company’s Las Vegas Strip resorts was up 12% over prior year.
Food and beverage, entertainment, retail and other revenues were up 12% in the 2004 quarter. These increases resulted primarily from the increases in hotel volumes, as well as the addition ofZumanityatNew York-New Yorkand other new restaurant and entertainment amenities at our resorts.
Other revenue includes business interruption proceeds of $6 million for the Bellagio power outage. Based on information from the Company’s insurance provider, this amount is a reasonable estimate of the minimum amount the Company should receive upon final settlement of the claim. Therefore, the Company expects that further recoveries may be recorded in future periods.
Consolidated EBITDA increased 26% for the quarter, reflecting the strong revenue results and operating leverage inherent with higher hotel room rates, which largely flow through to operating profit, as evidenced by an increase in EBITDA margins. The property-level EBITDA margin was 36% in 2004, up from 31% in the prior year quarter and the highest quarterly margin since the Mirage Resorts acquisition. Additionally, the Company benefited from the contribution ofBorgata, which was not open in the prior-year quarter, resulting in higher income from unconsolidated affiliates. Operating income increased 52% due to the increased property-level EBITDA and lower preopening expenses in the current year.
Second quarter Adjusted Earnings increased by 60% compared to 2003 due to the increase in operating income described above. Net interest expense increased due to higher average borrowings and the cessation of interest capitalization on the Company’s investment inBorgata.
3
For the second quarter of 2004, Adjusted Earnings excluded a net $7.5 million ($4.8 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 atMGM Grand Las Vegas; |
| • | | Restructuring costs of $3.9 million ($2.5 million, net of tax), including $3.0 million for the termination of a restaurant management agreement atBellagioand $0.9 million for the buyout of an operating lease atMGM Grand Las Vegas; |
| • | | Net property transactions of $2.0 million ($1.3 million, net of tax), including $2.8 million of demolition costs related to the theme park land atMGM Grand Las Vegas, in preparation for The Residences at MGM Grand. Offsetting these costs were net recoveries, in excess of carrying amount, of $1.1 million related to equipment damaged in the power outage atBellagio. |
In the second quarter of 2003, items excluded in the determination of Adjusted Earnings totaled $18.5 million ($12.0 million, net of tax) and included preopening and start-up expenses of $14.9 million ($9.7 million, net of tax), primarily related toBorgataandNew York-New York; minor amounts of restructuring; and property transactions, net of $3.1 million ($2.0 million, net of tax).
Income (loss) 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 $5 million, including the allocation of $1 million of interest expense, in the 2004 second quarter compared to a loss of $6 million, including $3 million of allocated interest and a loss on disposal of $7 million related to MGM MIRAGE Online, in the 2003 period.
Financial Position
The Company generated significant operating cash flow in the second quarter. This cash flow was partially re-invested in the Company’s resorts. Second quarter capital investments of $165 million included $73 million for theBellagioexpansion, $10 million for construction of the new theatre for Cirque du Soleil atMGM Grand Las Vegas, and other routine capital expenditures, including new restaurants atThe MirageandMGM Grand Las Vegas, and continued work on the standard room remodel project atNew York-New York.
The Company also repurchased 5 million shares of its common stock for a total cost of $223 million in the second quarter, bringing year-to-date repurchases to 7.9 million shares at a total cost of $344 million, and effectively completing the Company’s existing authorization. In July 2004, the Company’s Board of Directors approved a new 10 million share repurchase program.
As of June 30, 2004, the Company had approximately $1.4 billion of available borrowings under its senior credit facilities.
4
“Our exceptional 2004 operating results have allowed us to continue to invest in our world-class resorts — these investments are already generating strong returns and will further enhance the appeal of our resorts,” said MGM MIRAGE President, CFO and Treasurer Jim Murren. “In addition, we have strengthened our balance sheet to a point where we have the lowest leverage ratio at any time since the Mirage Resorts acquisition. This strength allows us access to sufficient sources of capital to finance our announced acquisition of Mandalay while providing the financial strength to execute our long-term growth strategy,” Mr. Murren said.
Outlook
“We believe the current earnings estimate consensus of 53 cents for the third quarter, as reported on First Call on July 20, 2004, is reasonable,” Mr. Murren said. “This represents a 56% increase over the prior-year quarter, and takes into account our expectation for percentage REVPAR growth over prior year in the 6-8% range.”
MGM MIRAGE will hold a conference call to discuss its earnings results and outlook for the third 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 12 casino resorts located in Nevada, Mississippi, Michigan and Australia, 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. The Company has entered an agreement to sell MGM Grand Australia in Darwin, Australia, pending finalization. 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)
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| | | Three Months Ended
| | Six Months Ended
|
| | | June 30, | | June 30, | | June 30, | | June 30, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
Revenues: | | | | | | | | | | | | | | | | |
Casino | | $ | 551,691 | | | $ | 508,944 | | | $ | 1,110,414 | | | $ | 1,005,165 | |
Rooms | | | 232,304 | | | | 212,689 | | | | 467,265 | | | | 425,987 | |
Food and beverage | | | 212,040 | | | | 189,424 | | | | 429,804 | | | | 377,501 | |
Entertainment | | | 65,971 | | | | 59,485 | | | | 133,213 | | | | 124,628 | |
Retail | | | 48,072 | | | | 46,304 | | | | 93,170 | | | | 87,394 | |
Other | | | 66,015 | | | | 55,008 | | | | 117,101 | | | | 107,357 | |
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| | | |
| | | |
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| |
| | | | 1,176,093 | | | | 1,071,854 | | | | 2,350,967 | | | | 2,128,032 | |
Less: Promotional allowances | | | (103,568 | ) | | | (97,737 | ) | | | (212,006 | ) | | | (202,041 | ) |
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| | | |
| | | |
| | | |
| |
| | | | 1,072,525 | | | | 974,117 | | | | 2,138,961 | | | | 1,925,991 | |
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Expenses: | | | | | | | | | | | | | | | | |
Casino | | | 269,518 | | | | 251,812 | | | | 547,121 | | | | 513,828 | |
Rooms | | | 62,468 | | | | 58,910 | | | | 124,300 | | | | 116,816 | |
Food and beverage | | | 121,138 | | | | 106,694 | | | | 240,687 | | | | 211,946 | |
Entertainment | | | 47,548 | | | | 43,377 | | | | 94,127 | | | | 90,110 | |
Retail | | | 30,566 | | | | 29,262 | | | | 59,078 | | | | 55,848 | |
Other | | | 38,328 | | | | 33,284 | | | | 71,212 | | | | 63,769 | |
Provision for doubtful accounts | | | (2,915 | ) | | | 6,784 | | | | 3,962 | | | | 14,420 | |
General and administrative | | | 151,420 | | | | 146,377 | | | | 297,701 | | | | 284,677 | |
Corporate expense | | | 18,458 | | | | 15,022 | | | | 34,196 | | | | 28,768 | |
Preopening and start-up expenses | | | 1,619 | | | | 14,896 | | | | 2,000 | | | | 21,443 | |
Restructuring costs | | | 3,900 | | | | 548 | | | | 4,314 | | | | 1,153 | |
Property transactions, net | | | 1,938 | | | | 3,094 | | | | 3,677 | | | | 9,910 | |
Depreciation and amortization | | | 97,484 | | | | 101,044 | | | | 195,037 | | | | 201,594 | |
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| | | | 841,470 | | | | 811,104 | | | | 1,677,412 | | | | 1,614,282 | |
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Income from unconsolidated affiliates | | | 29,542 | | | | 8,547 | | | | 53,714 | | | | 19,336 | |
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Operating income | | | 260,597 | | | | 171,560 | | | | 515,263 | | | | 331,045 | |
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Non-operating income (expense): | | | | | | | | | | | | | | | | |
Interest income | | | 1,116 | | | | 734 | | | | 2,019 | | | | 2,442 | |
Interest expense, net | | | (92,622 | ) | | | (80,181 | ) | | | (182,432 | ) | | | (162,979 | ) |
Non-operating items from unconsolidated affiliates | | | (6,690 | ) | | | (73 | ) | | | (12,895 | ) | | | (224 | ) |
Other, net | | | (2,573 | ) | | | (5,561 | ) | | | (9,727 | ) | | | (4,793 | ) |
| | | |
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| | | | (100,769 | ) | | | (85,081 | ) | | | (203,035 | ) | | | (165,554 | ) |
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Income from continuing operations before income taxes | | | 159,828 | | | | 86,479 | | | | 312,228 | | | | 165,491 | |
Provision for income taxes | | | (58,165 | ) | | | (32,023 | ) | | | (113,425 | ) | | | (62,259 | ) |
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Income from continuing operations | | | 101,663 | | | | 54,456 | | | | 198,803 | | | | 103,232 | |
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Discontinued operations | | | | | | | | | | | | | | | | |
Income (loss) from discontinued operations, including gain (loss) on disposal of $8,186 (six months 2004) and ($7,357) (three and six months 2003) | | | 4,809 | | | | (6,321 | ) | | | 18,678 | | | | (1,589 | ) |
Benefit (provision) for income taxes | | | (1,755 | ) | | | 5,615 | | | | (6,916 | ) | | | 3,110 | |
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| | | | 3,054 | | | | (706 | ) | | | 11,762 | | | | 1,521 | |
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Net income | | $ | 104,717 | | | $ | 53,750 | | | $ | 210,565 | | | $ | 104,753 | |
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Per share of common stock: | | | | | | | | | | | | | | | | |
Basic: | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ | 0.73 | | | $ | 0.36 | | | $ | 1.41 | | | $ | 0.68 | |
Discontinued operations | | | 0.02 | | | | — | | | | 0.08 | | | | 0.01 | |
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| |
Net income per share | | $ | 0.75 | | | $ | 0.36 | | | $ | 1.49 | | | $ | 0.69 | |
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Weighted average shares outstanding | | | 139,904 | | | | 150,721 | | | | 141,018 | | | | 151,412 | |
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Diluted: | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ | 0.70 | | | $ | 0.36 | | | $ | 1.36 | | | $ | 0.67 | |
Discontinued operations | | | 0.02 | | | | (0.01 | ) | | | 0.08 | | | | 0.01 | |
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Net income per share | | $ | 0.72 | | | $ | 0.35 | | | $ | 1.44 | | | $ | 0.68 | |
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| |
Weighted average shares outstanding | | | 144,748 | | | | 153,052 | | | | 145,806 | | | | 153,241 | |
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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
| | Six Months Ended
|
| | | June 30, | | June 30, | | June 30, | | June 30, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
Income from continuing operations | | $ | 101,663 | | | $ | 54,456 | | | $ | 198,803 | | | $ | 103,232 | |
Preopening and start-up expenses, net | | | 1,052 | | | | 9,683 | | | | 1,300 | | | | 13,938 | |
Restructuring costs, net | | | 2,535 | | | | 356 | | | | 2,804 | | | | 749 | |
Property transactions, net | | | 1,260 | | | | 2,011 | | | | 2,390 | | | | 6,442 | |
Loss on debt retirements, net | | | — | | | | — | | | | 3,593 | | | | — | |
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| | | |
| | | |
| |
Adjusted earnings | | $ | 106,510 | | | $ | 66,506 | | | $ | 208,890 | | | $ | 124,361 | |
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Per diluted share of common stock: | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ | 0.70 | | | $ | 0.36 | | | $ | 1.36 | | | $ | 0.67 | |
Preopening and start-up expenses, net | | | 0.01 | | | | 0.06 | | | | 0.01 | | | | 0.09 | |
Restructuring costs, net | | | 0.02 | | | | — | | | | 0.02 | | | | 0.01 | |
Property transactions, net | | | 0.01 | | | | 0.01 | | | | 0.02 | | | | 0.04 | |
Loss on debt retirements, net | | | — | | | | — | | | | 0.02 | | | | — | |
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Adjusted EPS | | $ | 0.74 | | | $ | 0.43 | | | $ | 1.43 | | | $ | 0.81 | |
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Weighted average diluted shares outstanding | | | 144,748 | | | | 153,052 | | | | 145,806 | | | | 153,241 | |
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MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF CONSOLIDATED EBITDA TO INCOME FROM CONTINUING OPERATIONS
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | Six Months Ended
|
| | | June 30, | | June 30, | | June 30, | | June 30, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
EBITDA | | $ | 365,538 | | | $ | 291,142 | | | $ | 720,291 | | | $ | 565,145 | |
Preopening and start-up expenses | | | (1,619 | ) | | | (14,896 | ) | | | (2,000 | ) | | | (21,443 | ) |
Restructuring costs | | | (3,900 | ) | | | (548 | ) | | | (4,314 | ) | | | (1,153 | ) |
Property transactions, net | | | (1,938 | ) | | | (3,094 | ) | | | (3,677 | ) | | | (9,910 | ) |
Depreciation and amortization | | | (97,484 | ) | | | (101,044 | ) | | | (195,037 | ) | | | (201,594 | ) |
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| | | |
| | | |
| |
Operating income | | | 260,597 | | | | 171,560 | | | | 515,263 | | | | 331,045 | |
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| | | |
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| |
Non-operating income (expense): | | | | | | | | | | | | | | | | |
Interest expense, net | | | (92,622 | ) | | | (80,181 | ) | | | (182,432 | ) | | | (162,979 | ) |
Other | | | (8,147 | ) | | | (4,900 | ) | | | (20,603 | ) | | | (2,575 | ) |
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| | | | (100,769 | ) | | | (85,081 | ) | | | (203,035 | ) | | | (165,554 | ) |
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| |
Income from continuing operations before income taxes | | | 159,828 | | | | 86,479 | | | | 312,228 | | | | 165,491 | |
Provision for income taxes | | | (58,165 | ) | | | (32,023 | ) | | | (113,425 | ) | | | (62,259 | ) |
| | | |
| | | |
| | | |
| | | |
| |
Income from continuing operations | | $ | 101,663 | | | $ | 54,456 | | | $ | 198,803 | | | $ | 103,232 | |
| | | |
| | | |
| | | |
| | | |
| |
8
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA — NET REVENUES BY RESORT
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | Six Months Ended
|
| | | June 30, | | June 30, | | June 30, | | June 30, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
Bellagio | | $ | 261,857 | | | $ | 260,176 | | | $ | 540,491 | | | $ | 500,540 | |
MGM Grand Las Vegas | | | 217,398 | | | | 180,333 | | | | 440,418 | | | | 364,476 | |
The Mirage | | | 149,204 | | | | 145,268 | | | | 288,258 | | | | 295,375 | |
Treasure Island | | | 95,128 | | | | 86,951 | | | | 194,924 | | | | 176,893 | |
New York-New York | | | 82,748 | | | | 59,762 | | | | 165,541 | | | | 121,673 | |
MGM Grand Detroit | | | 112,067 | | | | 102,478 | | | | 215,984 | | | | 197,247 | |
Beau Rivage | | | 82,192 | | | | 76,862 | | | | 155,178 | | | | 147,273 | |
Other operations | | | 71,931 | | | | 62,287 | | | | 138,167 | | | | 122,514 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 1,072,525 | | | $ | 974,117 | | | $ | 2,138,961 | | | $ | 1,925,991 | |
| | | |
| | | |
| | | |
| | | |
| |
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA — EBITDA BY RESORT
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | Six Months Ended
|
| | | June 30, | | June 30, | | June 30, | | June 30, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
Bellagio | | $ | 82,716 | | | $ | 93,505 | | | $ | 181,735 | | | $ | 161,668 | |
MGM Grand Las Vegas | | | 83,075 | | | | 51,327 | | | | 158,904 | | | | 105,341 | |
The Mirage | | | 51,041 | | | | 37,387 | | | | 91,169 | | | | 79,747 | |
Treasure Island | | | 26,312 | | | | 23,119 | | | | 57,615 | | | | 49,342 | |
New York-New York | | | 31,248 | | | | 22,782 | | | | 63,372 | | | | 48,297 | |
MGM Grand Detroit | | | 44,404 | | | | 39,623 | | | | 82,966 | | | | 76,557 | |
Beau Rivage | | | 22,079 | | | | 19,748 | | | | 38,868 | | | | 34,597 | |
Other operations | | | 13,579 | | | | 10,126 | | | | 26,144 | | | | 19,028 | |
Income from unconsolidated affiliates | | | 29,542 | | | | 8,547 | | | | 53,714 | | | | 19,336 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 383,996 | | | $ | 306,164 | | | $ | 754,487 | | | $ | 593,913 | |
| | | |
| | | |
| | | |
| | | |
| |
9
MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO EBITDA BY RESORT
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, 2004
|
| | | | | | | Depreciation | | Preopening | | | | | | Property | | |
| | | Operating | | and | | and start-up | | Restructuring | | transactions, | | |
| | | income
| | amortization
| | expenses
| | costs
| | net
| | EBITDA
|
Bellagio | | $ | 58,232 | | | $ | 22,004 | | | $ | — | | | $ | 3,000 | | | $ | (520 | ) | | $ | 82,716 | |
MGM Grand Las Vegas | | | 55,752 | | | | 22,170 | | | | 1,501 | | | | 900 | | | | 2,752 | | | | 83,075 | |
The Mirage | | | 38,149 | | | | 12,903 | | | | — | | | | — | | | | (11 | ) | | | 51,041 | |
Treasure Island | | | 17,312 | | | | 8,886 | | | | 118 | | | | — | | | | (4 | ) | | | 26,312 | |
New York-New York | | | 23,192 | | | | 8,011 | | | | — | | | | — | | | | 45 | | | | 31,248 | |
MGM Grand Detroit | | | 37,074 | | | | 7,373 | | | | — | | | | — | | | | (43 | ) | | | 44,404 | |
Beau Rivage | | | 16,669 | | | | 5,242 | | | | — | | | | — | | | | 168 | | | | 22,079 | |
Other operations | | | 7,237 | | | | 5,804 | | | | — | | | | — | | | | 538 | | | | 13,579 | |
Unconsolidated affiliates | | | 29,542 | | | | — | | | | — | | | | — | | | | — | | | | 29,542 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 283,159 | | | | 92,393 | | | | 1,619 | | | | 3,900 | | | | 2,925 | | | | 383,996 | |
Corporate and other | | | (22,562 | ) | | | 5,091 | | | | — | | | | — | | | | (987 | ) | | | (18,458 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 260,597 | | | $ | 97,484 | | | $ | 1,619 | | | $ | 3,900 | | | $ | 1,938 | | | $ | 365,538 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, 2003
|
| | | | | | | Depreciation | | Preopening | | | | | | Property | | |
| | | Operating | | and | | and start-up | | Restructuring | | transactions, | | |
| | | income
| | amortization
| | expenses
| | costs
| | net
| | EBITDA
|
Bellagio | | $ | 66,267 | | | $ | 27,143 | | | $ | — | | | $ | — | | | $ | 95 | | | $ | 93,505 | |
MGM Grand Las Vegas | | | 28,339 | | | | 20,540 | | | | 300 | | | | — | | | | 2,148 | | | | 51,327 | |
The Mirage | | | 25,131 | | | | 12,332 | | | | — | | | | — | | | | (76 | ) | | | 37,387 | |
Treasure Island | | | 14,397 | | | | 8,600 | | | | — | | | | 178 | | | | (56 | ) | | | 23,119 | |
New York-New York | | | 14,847 | | | | 5,938 | | | | 2,015 | | | | — | | | | (18 | ) | | | 22,782 | |
MGM Grand Detroit | | | 30,480 | | | | 8,543 | | | | 300 | | | | — | | | | 300 | | | | 39,623 | |
Beau Rivage | | | 14,171 | | | | 4,762 | | | | — | | | | — | | | | 815 | | | | 19,748 | |
Other operations | | | 5,483 | | | | 4,783 | | | | — | | | | — | | | | (140 | ) | | | 10,126 | |
Unconsolidated affiliates | | | (3,281 | ) | | | — | | | | 11,828 | | | | — | | | | — | | | | 8,547 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 195,834 | | | | 92,641 | | | | 14,443 | | | | 178 | | | | 3,068 | | | | 306,164 | |
Corporate and other | | | (24,274 | ) | | | 8,403 | | | | 453 | | | | 370 | | | | 26 | | | | (15,022 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 171,560 | | | $ | 101,044 | | | $ | 14,896 | | | $ | 548 | | | $ | 3,094 | | | $ | 291,142 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
10
MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO EBITDA BY RESORT — continued
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended June 30, 2004
|
| | | | | | | Depreciation | | Preopening | | | | | | Property | | |
| | | Operating | | and | | and start-up | | Restructuring | | transactions, | | |
| | | income
| | amortization
| | expenses
| | costs
| | net
| | EBITDA
|
Bellagio | | $ | 135,323 | | | $ | 42,356 | | | $ | — | | | $ | 3,000 | | | $ | 1,056 | | | $ | 181,735 | |
MGM Grand Las Vegas | | | 107,729 | | | | 45,688 | | | | 1,839 | | | | 900 | | | | 2,748 | | | | 158,904 | |
The Mirage | | | 65,560 | | | | 25,560 | | | | — | | | | — | | | | 49 | | | | 91,169 | |
Treasure Island | | | 39,963 | | | | 17,546 | | | | 118 | | | | — | | | | (12 | ) | | | 57,615 | |
New York-New York | | | 47,949 | | | | 15,464 | | | | (86 | ) | | | — | | | | 45 | | | | 63,372 | |
MGM Grand Detroit | | | 67,773 | | | | 14,847 | | | | — | | | | — | | | | 346 | | | | 82,966 | |
Beau Rivage | | | 28,343 | | | | 10,546 | | | | — | | | | — | | | | (21 | ) | | | 38,868 | |
Other operations | | | 15,502 | | | | 10,189 | | | | — | | | | — | | | | 453 | | | | 26,144 | |
Unconsolidated affiliates | | | 53,714 | | | | — | | | | — | | | | — | | | | — | | | | 53,714 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 561,856 | | | | 182,196 | | | | 1,871 | | | | 3,900 | | | | 4,664 | | | | 754,487 | |
Corporate and other | | | (46,593 | ) | | | 12,841 | | | | 129 | | | | 414 | | | | (987 | ) | | | (34,196 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 515,263 | | | $ | 195,037 | | | $ | 2,000 | | | $ | 4,314 | | | $ | 3,677 | | | $ | 720,291 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended June 30, 2003
|
| | | | | | | Depreciation | | Preopening | | | | | | Property | | |
| | | Operating | | and | | and start-up | | Restructuring | | transactions, | | |
| | | income
| | amortization
| | expenses
| | costs
| | net
| | EBITDA
|
Bellagio | | $ | 106,548 | | | $ | 55,015 | | | $ | — | | | $ | — | | | $ | 105 | | | $ | 161,668 | |
MGM Grand Las Vegas | | | 55,218 | | | | 40,728 | | | | 891 | | | | 25 | | | | 8,479 | | | | 105,341 | |
The Mirage | | | 54,825 | | | | 24,767 | | | | — | | | | 300 | | | | (145 | ) | | | 79,747 | |
Treasure Island | | | 32,478 | | | | 16,819 | | | | — | | | | 178 | | | | (133 | ) | | | 49,342 | |
New York-New York | | | 34,318 | | | | 11,888 | | | | 2,067 | | | | — | | | | 24 | | | | 48,297 | |
MGM Grand Detroit | | | 58,677 | | | | 17,124 | | | | 300 | | | | — | | | | 456 | | | | 76,557 | |
Beau Rivage | | | 24,173 | | | | 9,403 | | | | — | | | | — | | | | 1,021 | | | | 34,597 | |
Other operations | | | 9,388 | | | | 9,780 | | | | — | | | | — | | | | (140 | ) | | | 19,028 | |
Unconsolidated affiliates | | | 3,435 | | | | — | | | | 15,901 | | | | — | | | | — | | | | 19,336 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 379,060 | | | | 185,524 | | | | 19,159 | | | | 503 | | | | 9,667 | | | | 593,913 | |
Corporate and other | | | (48,015 | ) | | | 16,070 | | | | 2,284 | | | | 650 | | | | 243 | | | | (28,768 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 331,045 | | | $ | 201,594 | | | $ | 21,443 | | | $ | 1,153 | | | $ | 9,910 | | | $ | 565,145 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
11
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA — HOTEL STATISTICS
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | Six Months Ended
|
| | | June 30, | | June 30, | | June 30, | | June 30, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
Bellagio | | | | | | | | | | | | | | | | |
Occupancy % | | | 96.4 | % | | | 96.3 | % | | | 95.9 | % | | | 94.5 | % |
Average daily rate (ADR) | | $ | 240 | | | $ | 229 | | | $ | 247 | | | $ | 234 | |
Revenue per available room (REVPAR) | | $ | 231 | | | $ | 221 | | | $ | 237 | | | $ | 221 | |
MGM Grand Las Vegas | | | | | | | | | | | | | | | | |
Occupancy % | | | 95.0 | % | | | 94.9 | % | | | 93.6 | % | | | 93.8 | % |
Average daily rate (ADR) | | $ | 131 | | | $ | 114 | | | $ | 135 | | | $ | 117 | |
Revenue per available room (REVPAR) | | $ | 124 | | | $ | 109 | | | $ | 126 | | | $ | 110 | |
The Mirage | | | | | | | | | | | | | | | | |
Occupancy % | | | 98.6 | % | | | 96.9 | % | | | 96.4 | % | | | 94.7 | % |
Average daily rate (ADR) | | $ | 150 | | | $ | 134 | | | $ | 153 | | | $ | 141 | |
Revenue per available room (REVPAR) | | $ | 148 | | | $ | 130 | | | $ | 148 | | | $ | 134 | |
Treasure Island | | | | | | | | | | | | | | | | |
Occupancy % | | | 99.0 | % | | | 98.2 | % | | | 97.8 | % | | | 97.1 | % |
Average daily rate (ADR) | | $ | 115 | | | $ | 99 | | | $ | 119 | | | $ | 104 | |
Revenue per available room (REVPAR) | | $ | 113 | | | $ | 97 | | | $ | 116 | | | $ | 101 | |
New York-New York | | | | | | | | | | | | | | | | |
Occupancy % | | | 98.6 | % | | | 98.8 | % | | | 98.0 | % | | | 98.6 | % |
Average daily rate (ADR) | | $ | 116 | | | $ | 95 | | | $ | 118 | | | $ | 99 | |
Revenue per available room (REVPAR) | | $ | 115 | | | $ | 94 | | | $ | 115 | | | $ | 97 | |
Beau Rivage | | | | | | | | | | | | | | | | |
Occupancy % | | | 94.9 | % | | | 94.7 | % | | | 90.5 | % | | | 92.9 | % |
Average daily rate (ADR) | | $ | 98 | | | $ | 98 | | | $ | 95 | | | $ | 93 | |
Revenue per available room (REVPAR) | | $ | 93 | | | $ | 93 | | | $ | 86 | | | $ | 86 | |
Other operations | | | | | | | | | | | | | | | | |
Occupancy % | | | 75.5 | % | | | 68.3 | % | | | 72.3 | % | | | 68.6 | % |
Average daily rate (ADR) | | $ | 41 | | | $ | 42 | | | $ | 42 | | | $ | 43 | |
Revenue per available room (REVPAR) | | $ | 31 | | | $ | 29 | | | $ | 30 | | | $ | 30 | |
12
MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| | | | | | | | | |
| | | June 30, | | December 31, |
| | | 2004
| | 2003
|
ASSETS
|
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 185,793 | | | $ | 178,047 | |
Accounts receivable, net | | | 166,166 | | | | 139,475 | |
Inventories | | | 64,110 | | | | 65,189 | |
Income tax receivable | | | — | | | | 9,901 | |
Deferred income taxes | | | 48,458 | | | | 49,286 | |
Prepaid expenses and other | | | 77,189 | | | | 89,641 | |
Assets held for sale | | | 81,907 | | | | 226,082 | |
| | | |
| | | |
| |
Total current assets | | | 623,623 | | | | 757,621 | |
| | | |
| | | |
| |
Property and equipment, net | | | 8,790,673 | | | | 8,681,339 | |
Other assets: | | | | | | | | |
Investments in unconsolidated affiliates | | | 791,812 | | | | 756,012 | |
Goodwill and other intangible assets, net | | | 232,353 | | | | 267,668 | |
Deposits and other assets, net | | | 265,747 | | | | 247,070 | |
| | | |
| | | |
| |
Total other assets | | | 1,289,912 | | | | 1,270,750 | |
| | | |
| | | |
| |
| | | $ | 10,704,208 | | | $ | 10,709,710 | |
| | | |
| | | |
| |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 127,650 | | | $ | 85,439 | |
Income taxes payable | | | 38,118 | | | | — | |
Current portion of long-term debt | | | 6,802 | | | | 9,008 | |
Accrued interest on long-term debt | | | 95,629 | | | | 87,711 | |
Other accrued liabilities | | | 512,764 | | | | 559,445 | |
Liabilities related to assets held for sale | | | 7,207 | | | | 23,456 | |
| | | |
| | | |
| |
Total current liabilities | | | 788,170 | | | | 765,059 | |
| | | |
| | | |
| |
Deferred income taxes | | | 1,731,916 | | | | 1,765,426 | |
Long-term debt | | | 5,526,728 | | | | 5,521,890 | |
Other long-term obligations | | | 148,054 | | | | 123,547 | |
Stockholders’ equity: | | | | | | | | |
Common stock ($.01 par value: authorized 300,000,000 shares, issued 171,762,565 and 168,268,213 shares and outstanding 138,684,079 and 143,096,213 shares) | | | 1,718 | | | | 1,683 | |
Capital in excess of par value | | | 2,280,366 | | | | 2,171,625 | |
Deferred compensation | | | (14,871 | ) | | | (19,174 | ) |
Treasury stock, at cost (33,078,486 and 25,172,000 shares) | | | (1,105,189 | ) | | | (760,594 | ) |
Retained earnings | | | 1,344,468 | | | | 1,133,903 | |
Accumulated other comprehensive income | | | 2,848 | | | | 6,345 | |
| | | |
| | | |
| |
Total stockholders’ equity | | | 2,509,340 | | | | 2,533,788 | |
| | | |
| | | |
| |
| | | $ | 10,704,208 | | | $ | 10,709,710 | |
| | | |
| | | |
| |
13
