Exhibit 99
| | |
| PRESS RELEASE | | FOR IMMEDIATE RELEASE |
| | | |
| Contacts: | | |
| Investment Community | | News Media |
| | | |
| JAMES J. MURREN | | ALAN M. FELDMAN |
| President, Chief Financial Officer & | | Senior Vice President |
| Treasurer | | Public Affairs |
| (702) 693-8877 | | (702) 891-7147 |
MGM MIRAGE REPORTS RECORD SECOND QUARTER RESULTS
Mandalay Merger Immediately Accretive, Strong Operating Trends Continue
Las Vegas, Nevada, July 28, 2005— MGM MIRAGE (NYSE: MGM) today reported its second quarter 2005 financial results. Adjusted earnings from continuing operations per diluted share (“Adjusted EPS”) increased to $0.46 in the second quarter of 2005, the Company’s highest quarterly Adjusted EPS ever, and significantly better than the $0.37 earned in the second quarter of 2004.1 The strong earnings reflect the April 25, 2005 addition of Mandalay Resort Group’s (“Mandalay”) portfolio of resorts, which had an immediate positive impact on earnings, and continued strength in core hotel and gaming operations. Net revenues increased 60% to $1.7 billion for the quarter. Same-store net revenues were $1.2 billion for the quarter, up 11% over prior year. References in this release to “same-store” results reflect the Company’s operations excluding the newly acquired Mandalay resorts.
Second quarter REVPAR (revenue per available room) at the Company’s Las Vegas Strip resorts increased 15% over the prior year on a same-store basis, marking the sixth straight quarter of double-digit REVPAR growth. On a same-store basis, table games volume, including baccarat, increased 3% in the quarter and slot revenue increased 7%.
Adjusted EPS (and Adjusted Earnings) excludes discontinued operations, preopening and start-up expenses, restructuring costs, property transactions, tax adjustments and gains or losses on early retirement of debt.2 On a GAAP (Generally Accepted Accounting Principles) basis, diluted earnings per share from continuing operations increased to $0.48 in the 2005 quarter from $0.35 in the second quarter of 2004. GAAP diluted EPS, including the results of discontinued operations, was $0.48 in the 2005 period versus $0.36 in 2004.
“We are very pleased with the early results from the Mandalay resorts and the continued positive momentum across all of our operations,” said Terry Lanni, MGM MIRAGE’s Chairman and CEO. “We continue to work on integration initiatives and growth plans for our resorts, all with the intent of continuing the revenue and profit growth trends we’ve experienced over the past several quarters.”
1
Second Quarter 2005 Company Highlights
| • | | Generated net revenues of $1.7 billion; on a same-store basis, net revenues were $1.2 billion, up 11% from 2004; |
| |
| • | | Produced property-level EBITDA3 of $567 million, an all-time Company record for any quarter; on a same-store basis, property-level EBITDA (excludingMonte Carlowhen 50%-owned) was $394 million, up 6% over prior year; operating income was $378 million in the quarter versus $261 million in 2004; |
| |
| • | | Closed the Mandalay merger on April 25, 2005, with total consideration of $7.3 billion; |
| |
| • | | Reduced debt by $513 million since the close of the Mandalay merger; |
| |
| • | | Invested $121 million of capital in the Company’s resorts; |
| |
| • | | Invested an additional $177 million in MGM Grand Paradise, of which the Company owns 50%, which broke ground on the $975 million MGM Grand Macau hotel and casino; |
| |
| • | | Entered into a definitive management agreement with the New York Racing Association (“NYRA”) under which the Company will develop and manage a 4,500-unit video lottery terminal (“VLT”) facility at NYRA’s Aqueduct racetrack; |
| |
| • | | Completed a 2-for-1 stock split, effected in the form of a 100% stock dividend, in May 2005. |
Detailed Financial Results
The following table shows key financial results for the second quarter and year-to-date:
| | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Six months ended | |
| | | June 30, | | | June 30, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| | | | | | | (In millions) | | | | | | | | | |
| Casino revenue, net | | $ | 764.4 | | | $ | 551.7 | | | $ | 1,379.2 | | | $ | 1,110.4 | |
| Non-casino revenue, net | | | 951.6 | | | | 520.8 | | | | 1,540.9 | | | | 1,028.6 | |
| Net revenue | | | 1,716.0 | | | | 1,072.5 | | | | 2,920.1 | | | | 2,139.0 | |
| Operating income | | | 377.9 | | | | 260.6 | | | | 671.1 | | | | 515.3 | |
| Income from continuing operations | | | 141.2 | | | | 101.7 | | | | 252.2 | | | | 198.8 | |
| Discontinued operations, net | | | — | | | | 3.0 | | | | — | | | | 11.8 | |
| Net income | | | 141.2 | | | | 104.7 | | | | 252.2 | | | | 210.6 | |
| |
Property-level EBITDA3 | | $ | 566.9 | | | $ | 384.0 | | | $ | 1,004.1 | | | $ | 754.5 | |
EBITDA (after corporate expense)3 | | | 535.3 | | | | 365.5 | | | | 945.6 | | | | 720.3 | |
Adjusted Earnings2 | | | 137.4 | | | | 106.5 | | | | 265.5 | | | | 208.9 | |
Net revenue in the second quarter increased 60% from prior year, and 11% on a same-store basis. Results were strong across all operating departments. Both casino and hotel volumes continued their positive trends in the quarter.
2
Casino revenue increased 39% in the 2005 quarter, and 4% on a same-store basis. On a same-store basis, table games volume, including baccarat, was up 3% from the prior year’s quarter, and table games hold percentages were near the mid-point of the Company’s normal range for both the 2005 and 2004 periods, though almost 100 basis points lower on a same-store basis in the current year. Slot revenue in the quarter was up 7% from 2004 on a same-store basis, on top of a 10% increase in 2004 over 2003.Bellagio’s slot revenue increased over 30%, driven in large part by additional customers from the Spa Tower expansion.MGM Grand Las Vegas’ slot revenue increased 13%, largely from increased visitor traffic generated by KÀ and other new amenities. Other strong performances were turned in atBeau RivageandTI.
Non-casino revenue was up 83% in the quarter, and 19% on a same-store basis. Hotel revenue increased 96% (23% on a same-store basis). The overall increase resulted from several factors, including significantly more rooms available with the addition of Mandalay and theBellagio expansion, as well as the immediate implementation of strategies to increase occupancy at Mandalay resorts. The same-store increase was the result of theBellagioexpansion and continued strong year-over-year increases in room rates. Same-store REVPAR increased 16%, on top of an 11% increase in 2004 over 2003. The following table shows key hotel statistics on a same-store basis for the quarter:
| | | | | | | | | |
| | | Three Months Ended | |
| | | June 30, 2005 | | | June 30, 2004 | |
| Same-store basis | | | | | | | | |
| Occupancy % | | | 93 | % | | | 94 | % |
| Average Daily Rate (ADR) | | $ | 153 | | | $ | 131 | |
| Revenue per Available Room (REVPAR) | | $ | 142 | | | $ | 123 | |
Food and beverage revenue increased 66% (15% on a same-store basis), as the addition of several new restaurants and lounges and overall strong customer volumes generated increased utilization at our restaurants, lounges and nightclubs. Entertainment revenues were up significantly, 38% on a same-store basis, over the prior year quarter as a result of the contribution from KÀ atMGM Grand Las Vegas.
EBITDA increased 46% for the quarter, reflecting the operating trends described above and the addition of Mandalay. The Company’s property-level EBITDA margin was 33% in 2005 (in total and on a same-store basis) versus 36% in the 2004 second quarter, which was the Company’s all-time record for any quarter. The current quarter’s margin was negatively impacted by the lower table games hold percentage described above, additional expense of $10 million in 2005 resulting from the re-evaluation of workers compensation reserves, and a lower than normal provision for bad debts in the prior year. Operating income increased 45% over prior year as a result of the trends described above.
Second quarter 2005 Adjusted Earnings increased by 29% compared to 2004 due primarily to the higher operating income, offset by higher interest expense as a result of the Mandalay merger. For the second quarter of 2005, Adjusted Earnings excluded the net positive impact to earnings of $3.1 million ($3.8 million, net of tax) of items as follows:
3
| • | | Net property transactions of $1.8 million ($1.2 million, net of tax), primarily consisting of demolition costs atMGM Grand Las Vegasin connection with room remodel activity and atThe Miragein connection with the showroom remodel; |
| |
| • | | Preopening and start-up expenses of $3.9 million ($3.4 million, net of tax), including $2.3 million related toMGM Grand Macau, $0.9 million related toProject CityCenter, and $0.3 million related toThe Residences at MGM Grand; |
| |
| • | | Positive tax adjustments of $7.4 million, consisting of the $10.7 million benefit realized upon repatriating the proceeds from the sale of MGM Grand Australia, offset by $5.1 million ($3.3 million, net of Federal tax benefit) of Illinois state deferred income taxes resulting from the Mandalay merger; |
| |
| • | | Gain on early retirement of debt of $1.4 million ($0.9 million, net of tax) related to the post-merger early redemption of certain of Mandalay’s senior notes, classified as “Other, net”. |
In the second quarter of 2004, items excluded in the determination of Adjusted Earnings included minor amounts of preopening and start-up expenses and property transactions, and $3.9 million of restructuring costs ($2.5 million, net of tax) related to the termination of a restaurant management agreement and a lease buyout.
Financial Position
The Company generated significant operating cash flow in the second quarter as a result of its positive operating results and the addition of Mandalay. In addition, the Company repatriated $127 million from Australia, which represented the remaining proceeds from the sale of MGM Grand Australia in 2004. The Company utilized available cash flow in part to repay $513 million of net debt after the closing of the Mandalay merger. Capital investments for the quarter consisted of $121 million in capital expenditures at operating resorts and $177 million of additional investment inMGM Grand Macau.
Second quarter capital investments included construction of the theatre for the Beatles/Cirque du Soleil production show atThe Mirage, the new golf course atBeau Rivage, room remodel and casino expansion activity atMGM Grand Las Vegasand other routine capital expenditures.
“Our financial strategy continues to focus on utilizing cash flow from operations and our access to low-cost borrowings to fund high return, targeted projects,” said Jim Murren, MGM MIRAGE President, CFO and Treasurer. “We plan on addressing the capital needs at Mandalay prudently, starting with high return projects like ticket-in, ticket-out slot technology. And we will continue to focus on the strength of our balance sheet over the next several quarters.”
Outlook
The Company expects Las Vegas Strip REVPAR growth (on a pro forma basis, including Mandalay for both periods) of approximately 8% for the third quarter. “We continue to have good visibility of future room trends, and we are rapidly realizing the benefits of integrating the Mandalay resorts, both from an expense reduction and revenue enhancement perspective. We believe we are on target for at least $100 million of annualized merger-related benefits,” Mr. Murren said. “These factors will result in an increase in earnings over the 2004 quarter, in which we earned $0.28 per share on an adjusted basis. We believe the current analysts’ consensus expectation of $0.42 per share, as reported on First Call on July 27, 2005, is reasonable.”
4
MGM MIRAGE will hold a conference call to discuss its earnings results and outlook for the third quarter of 2005 at 11:00 a.m. Eastern Daylight Time today. The call can be accessed live atwww.companyboardroom.com orwww.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 atwww.mgmmirage.com. Supplemental detailed earnings information will also be available on the Company’s website, along with certain comparative historical information for the Mandalay resorts.
1 All share and per share amounts in this release and accompanying tables have been adjusted to reflect a 2-for-1 stock split effected in the form of a 100% stock dividend in May 2005.
2 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.
3 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:MGM), one of the world’s leading and most respected hotel and gaming company, owns and operates 24 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey, and the United Kingdom. MGM MIRAGE has also announced plans to develop Project CityCenter, a multi-billion dollar mixed-use urban development project in the heart of Las Vegas and has a 50% interest in the MGM Grand Macau, a development project in Macau S.A.R. MGM MIRAGE supports responsible gaming and has implemented the American Gaming Association’s Code of Conduct for Responsible Gaming at its properties. MGM MIRAGE also has been the recipient of numerous awards and recognitions for its industry-leading Diversity Initiative and its community philanthropy programs. For more information about MGM MIRAGE, please visit the company’s website at http://www.mgmmirage.com.
Statements in this release which are not historical facts are “forward looking” statements and “safe harbor statements” under the Private Securities Litigation Reform Act of 1995 that involve risks and/or uncertainties, including risks and/or uncertainties as described in the company’s public filings with the Securities and Exchange Commission.
5
MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | | | June 30, | | | June 30, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | |
Casino | | $ | 764,378 | | | $ | 551,691 | | | $ | 1,379,191 | | | $ | 1,110,414 | |
Rooms | | | 455,761 | | | | 232,304 | | | | 729,815 | | | | 467,265 | |
Food and beverage | | | 352,184 | | | | 212,040 | | | | 595,662 | | | | 429,804 | |
Entertainment | | | 115,711 | | | | 65,971 | | | | 203,858 | | | | 133,213 | |
Retail | | | 69,463 | | | | 48,072 | | | | 114,342 | | | | 93,170 | |
Other | | | 106,973 | | | | 66,015 | | | | 167,808 | | | | 117,101 | |
| | | | | | | | | | | | | |
| | | | 1,864,470 | | | | 1,176,093 | | | | 3,190,676 | | | | 2,350,967 | |
Less: Promotional allowances | | | (148,514 | ) | | | (103,568 | ) | | | (270,585 | ) | | | (212,006 | ) |
| | | | | | | | | | | | | |
| | | | 1,715,956 | | | | 1,072,525 | | | | 2,920,091 | | | | 2,138,961 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | |
Casino | | | 389,767 | | | | 266,677 | | | | 700,556 | | | | 550,597 | |
Rooms | | | 125,405 | | | | 62,774 | | | | 194,884 | | | | 124,985 | |
Food and beverage | | | 220,466 | | | | 120,709 | | | | 354,777 | | | | 240,329 | |
Entertainment | | | 84,801 | | | | 47,580 | | | | 144,866 | | | | 94,213 | |
Retail | | | 45,233 | | | | 30,593 | | | | 74,817 | | | | 59,139 | |
Other | | | 64,517 | | | | 38,335 | | | | 103,982 | | | | 71,224 | |
General and administrative | | | 249,713 | | | | 151,403 | | | | 408,077 | | | | 297,701 | |
Corporate expense | | | 31,651 | | | | 18,458 | | | | 58,442 | | | | 34,196 | |
Preopening and start-up expenses | | | 3,897 | | | | 1,619 | | | | 6,421 | | | | 2,000 | |
Restructuring costs (credit) | | | (4 | ) | | | 3,900 | | | | (70 | ) | | | 4,314 | |
Property transactions, net | | | 1,793 | | | | 1,938 | | | | 5,996 | | | | 3,677 | |
Depreciation and amortization | | | 151,673 | | | | 97,484 | | | | 262,168 | | | | 195,037 | |
| | | | | | | | | | | | | |
| | | | 1,368,912 | | | | 841,470 | | | | 2,314,916 | | | | 1,677,412 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Income from unconsolidated affiliates | | | 30,885 | | | | 29,542 | | | | 65,930 | | | | 53,714 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Operating income | | | 377,929 | | | | 260,597 | | | | 671,105 | | | | 515,263 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Non-operating income (expense): | | | | | | | | | | | | | | | | |
Interest income | | | 5,319 | | | | 1,116 | | | | 7,016 | | | | 2,019 | |
Interest expense, net | | | (167,348 | ) | | | (92,622 | ) | | | (268,816 | ) | | | (182,432 | ) |
Non-operating items from unconsolidated affiliates | | | (4,404 | ) | | | (6,690 | ) | | | (7,191 | ) | | | (12,895 | ) |
Other, net | | | (1,781 | ) | | | (2,573 | ) | | | (17,472 | ) | | | (9,727 | ) |
| | | | | | | | | | | | | |
| | | | (168,214 | ) | | | (100,769 | ) | | | (286,463 | ) | | | (203,035 | ) |
| | | | | | | | | | | | | |
Income from continuing operations before income taxes | | | 209,715 | | | | 159,828 | | | | 384,642 | | | | 312,228 | |
Provision for income taxes | | | (68,547 | ) | | | (58,165 | ) | | | (132,395 | ) | | | (113,425 | ) |
| | | | | | | | | | | | | |
Income from continuing operations | | | 141,168 | | | | 101,663 | | | | 252,247 | | | | 198,803 | |
| | | | | | | | | | | | | |
Discontinued operations | | | | | | | | | | | | | | | | |
Income from discontinued operations, including gain on disposal of $8,186 (six months 2004) | | | — | | | | 4,809 | | | | — | | | | 18,678 | |
Provision for income taxes | | | — | | | | (1,755 | ) | | | — | | | | (6,916 | ) |
| | | | | | | | | | | | | |
| | | | — | | | | 3,054 | | | | — | | | | 11,762 | |
| | | | | | | | | | | | | |
Net income | | $ | 141,168 | | | $ | 104,717 | | | $ | 252,247 | | | $ | 210,565 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Per share of common stock: | | | | | | | | | | | | | | | | |
Basic: | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ | 0.49 | | | $ | 0.36 | | | $ | 0.89 | | | $ | 0.71 | |
Discontinued operations | | | — | | | | 0.01 | | | | — | | | | 0.04 | |
| | | | | | | | | | | | | |
Net income per share | | $ | 0.49 | | | $ | 0.37 | | | $ | 0.89 | | | $ | 0.75 | |
| | | | | | | | | | | | | |
Weighted average shares outstanding | | | 285,546 | | | | 279,809 | | | | 284,031 | | | | 282,035 | |
| | | | | | | | | | | | | |
Diluted: | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ | 0.48 | | | $ | 0.35 | | | $ | 0.85 | | | $ | 0.68 | |
Discontinued operations | | | — | | | | 0.01 | | | | — | | | | 0.04 | |
| | | | | | | | | | | | | |
Net income per share | | $ | 0.48 | | | $ | 0.36 | | | $ | 0.85 | | | $ | 0.72 | |
| | | | | | | | | | | | | |
Weighted average shares outstanding | | | 296,725 | | | | 289,497 | | | | 295,685 | | | | 291,611 | |
| | | | | | | | | | | | | |
6
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, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
Income from continuing operations | | $ | 141,168 | | | $ | 101,663 | | | $ | 252,247 | | | $ | 198,803 | |
Preopening and start-up expenses, net | | | 3,375 | | | | 1,052 | | | | 5,016 | | | | 1,300 | |
Restructuring costs (credit), net | | | (3 | ) | | | 2,535 | | | | (46 | ) | | | 2,804 | |
Property transactions, net | | | 1,165 | | | | 1,260 | | | | 3,897 | | | | 2,390 | |
Tax adjustments | | | (7,405 | ) | | | — | | | | (7,405 | ) | | | — | |
(Gain) loss on debt retirements, net | | | (885 | ) | | | — | | | | 11,790 | | | | 3,593 | |
| | | | | | | | | | | | | |
Adjusted earnings | | $ | 137,415 | | | $ | 106,510 | | | $ | 265,499 | | | $ | 208,890 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Per diluted share of common stock: | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ | 0.48 | | | $ | 0.35 | | | $ | 0.85 | | | $ | 0.68 | |
Preopening and start-up expenses, net | | | 0.01 | | | | — | | | | 0.02 | | | | 0.01 | |
Restructuring costs (credit), net | | | — | | | | 0.01 | | | | — | | | | 0.01 | |
Property transactions, net | | | — | | | | 0.01 | | | | 0.01 | | | | 0.01 | |
Tax adjustments | | | (0.03 | ) | | | — | | | | (0.02 | ) | | | — | |
(Gain) loss on debt retirements, net | | | — | | | | — | | | | 0.04 | | | | 0.01 | |
| | | | | | | | | | | | | |
Adjusted EPS | | $ | 0.46 | | | $ | 0.37 | | | $ | 0.90 | | | $ | 0.72 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Weighted average diluted shares outstanding | | | 296,725 | | | | 289,497 | | | | 295,685 | | | | 291,611 | |
| | | | | | | | | | | | | |
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, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| | | | | | | | | | | | | | | | | |
EBITDA | | $ | 535,288 | | | $ | 365,538 | | | $ | 945,620 | | | $ | 720,291 | |
Preopening and start-up expenses | | | (3,897 | ) | | | (1,619 | ) | | | (6,421 | ) | | | (2,000 | ) |
Restructuring costs (credit) | | | 4 | | | | (3,900 | ) | | | 70 | | | | (4,314 | ) |
Property transactions, net | | | (1,793 | ) | | | (1,938 | ) | | | (5,996 | ) | | | (3,677 | ) |
Depreciation and amortization | | | (151,673 | ) | | | (97,484 | ) | | | (262,168 | ) | | | (195,037 | ) |
| | | | | | | | | | | | | |
Operating income | | | 377,929 | | | | 260,597 | | | | 671,105 | | | | 515,263 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Non-operating income (expense): | | | | | | | | | | | | | | | | |
Interest expense, net | | | (167,348 | ) | | | (92,622 | ) | | | (268,816 | ) | | | (182,432 | ) |
Other | | | (866 | ) | | | (8,147 | ) | | | (17,647 | ) | | | (20,603 | ) |
| | | | | | | | | | | | | |
| | | | (168,214 | ) | | | (100,769 | ) | | | (286,463 | ) | | | (203,035 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes | | | 209,715 | | | | 159,828 | | | | 384,642 | | | | 312,228 | |
Provision for income taxes | | | (68,547 | ) | | | (58,165 | ) | | | (132,395 | ) | | | (113,425 | ) |
| | | | | | | | | | | | | |
Income from continuing operations | | $ | 141,168 | | | $ | 101,663 | | | $ | 252,247 | | | $ | 198,803 | |
| | | | | | | | | | | | | |
7
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA — NET REVENUES
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | | | June 30, | | | June 30, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
Las Vegas Strip | | $ | 1,363,856 | | | $ | 817,340 | | | $ | 2,314,084 | | | $ | 1,651,195 | |
Other Nevada | | | 129,141 | | | | 60,926 | | | | 189,872 | | | | 116,604 | |
MGM Grand Detroit | | | 109,702 | | | | 112,067 | | | | 223,402 | | | | 215,984 | |
Mississippi | | | 113,257 | | | | 82,192 | | | | 192,733 | | | | 155,178 | |
| | | | | | | | | | | | | |
| | | $ | 1,715,956 | | | $ | 1,072,525 | | | $ | 2,920,091 | | | $ | 2,138,961 | |
| | | | | | | | | | | | | |
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA — PROPERTY EBITDA
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | | | June 30, | | | June 30, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
Las Vegas Strip | | $ | 443,864 | | | $ | 277,244 | | | $ | 777,361 | | | $ | 558,472 | |
Other Nevada | | | 21,678 | | | | 10,727 | | | | 30,676 | | | | 20,467 | |
MGM Grand Detroit | | | 39,058 | | | | 44,404 | | | | 77,940 | | | | 82,966 | |
Mississippi | | | 31,454 | | | | 22,079 | | | | 52,155 | | | | 38,868 | |
Unconsolidated affiliates | | | 30,885 | | | | 29,542 | | | | 65,930 | | | | 53,714 | |
| | | | | | | | | | | | | |
| | | $ | 566,939 | | | $ | 383,996 | | | $ | 1,004,062 | | | $ | 754,487 | |
| | | | | | | | | | | | | |
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA — HOTEL STATISTICS
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | June 30, | | June 30, | | June 30, | | June 30, |
| | | 2005 | | 2004 | | 2005 | | 2004 |
Las Vegas Strip | | | | | | | | | | | | | | | | |
Occupancy % | | | 96.7 | % | | | 97.1 | % | | | 96.7 | % | | | 95.7 | % |
Average daily rate (ADR) | | $ | 149 | | | $ | 146 | | | $ | 157 | | | $ | 150 | |
Revenue per available room (REVPAR) | | $ | 144 | | | $ | 142 | | | $ | 152 | | | $ | 144 | |
| | | | | | | | | | | | | | | | | |
Other | | | | | | | | | | | | | | | | |
Occupancy % | | | 74.6 | % | | | 80.1 | % | | | 74.7 | % | | | 76.7 | % |
ADR | | $ | 58 | | | $ | 63 | | | $ | 61 | | | $ | 62 | |
REVPAR | | $ | 43 | | | $ | 51 | | | $ | 45 | | | $ | 47 | |
| | | | | | | | | | | | | | | | | |
Company-wide | | | | | | | | | | | | | | | | |
Occupancy % | | | 91.8 | % | | | 93.5 | % | | | 91.9 | % | | | 91.6 | % |
ADR | | $ | 133 | | | $ | 131 | | | $ | 140 | | | $ | 135 | |
REVPAR | | $ | 122 | | | $ | 123 | | | $ | 129 | | | $ | 123 | |
8
MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO EBITDA
(In thousands)
(Unaudited)
Three Months Ended June 30, 2005
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Depreciation and | | | Preopening and | | | Restructuring costs | | | Property | | | | |
| | | Operating income | | | amortization | | | start-up expenses | | | (credit) | | | transactions, net | | | EBITDA | |
Las Vegas Strip | | $ | 319,743 | | | $ | 121,890 | | | $ | 583 | | | $ | (4 | ) | | $ | 1,652 | | | $ | 443,864 | |
Other Nevada | | | 12,542 | | | | 9,138 | | | | — | | | | — | | | | (2 | ) | | | 21,678 | |
MGM Grand Detroit | | | 32,359 | | | | 6,397 | | | | — | | | | — | | | | 302 | | | | 39,058 | |
Mississippi | | | 24,104 | | | | 7,315 | | | | 62 | | | | — | | | | (27 | ) | | | 31,454 | |
Unconsolidated affiliates | | | 28,547 | | | | — | | | | 2,338 | | | | — | | | | — | | | | 30,885 | |
| | | | | | | | | | | | | | | | | | | |
| | | | 417,295 | | | | 144,740 | | | | 2,983 | | | | (4 | ) | | | 1,925 | | | | 566,939 | |
Corporate and other | | | (39,366 | ) | | | 6,933 | | | | 914 | | | | — | | | | (132 | ) | | | (31,651 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | $ | 377,929 | | | $ | 151,673 | | | $ | 3,897 | | | $ | (4 | ) | | $ | 1,793 | | | $ | 535,288 | |
| | | | | | | | | | | | | | | | | | | |
Three Months Ended June 30, 2004
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Depreciation and | | | Preopening and | | | | | | | Property | | | | |
| | | Operating income | | | amortization | | | start-up expenses | | | Restructuring costs | | | transactions, net | | | EBITDA | |
Las Vegas Strip | | $ | 195,320 | | | $ | 74,143 | | | $ | 1,619 | | | $ | 3,900 | | | $ | 2,262 | | | $ | 277,244 | |
Other Nevada | | | 4,554 | | | | 5,635 | | | | — | | | | — | | | | 538 | | | | 10,727 | |
MGM Grand Detroit | | | 37,074 | | | | 7,373 | | | | — | | | | — | | | | (43 | ) | | | 44,404 | |
Mississippi | | | 16,669 | | | | 5,242 | | | | — | | | | — | | | | 168 | | | | 22,079 | |
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 | |
| | | | | | | | | | | | | | | | | | | |
Six Months Ended June 30, 2005
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Depreciation and | | | Preopening and | | | Restructuring costs | | | Property | | | | |
| | | Operating income | | | amortization | | | start-up expenses | | | (credit) | | | transactions, net | | | EBITDA | |
Las Vegas Strip | | $ | 560,978 | | | $ | 208,042 | | | $ | 2,919 | | | $ | (4 | ) | | $ | 5,426 | | | $ | 777,361 | |
Other Nevada | | | 15,655 | | | | 15,084 | | | | — | | | | — | | | | (63 | ) | | | 30,676 | |
MGM Grand Detroit | | | 64,224 | | | | 13,412 | | | | — | | | | — | | | | 304 | | | | 77,940 | |
Mississippi | | | 39,412 | | | | 12,628 | | | | 75 | | | | — | | | | 40 | | | | 52,155 | |
Unconsolidated affiliates | | | 63,523 | | | | — | | | | 2,407 | | | | — | | | | — | | | | 65,930 | |
| | | | | | | | | | | | | | | | | | | |
| | | | 743,792 | | | | 249,166 | | | | 5,401 | | | | (4 | ) | | | 5,707 | | | | 1,004,062 | |
Corporate and other | | | (72,687 | ) | | | 13,002 | | | | 1,020 | | | | (66 | ) | | | 289 | | | | (58,442 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | $ | 671,105 | | | $ | 262,168 | | | $ | 6,421 | | | $ | (70 | ) | | $ | 5,996 | | | $ | 945,620 | |
| | | | | | | | | | | | | | | | | | | |
Six Months Ended June 30, 2004
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Depreciation and | | | Preopening and | | | | | | | Property | | | | |
| | | Operating income | | | amortization | | | start-up expenses | | | Restructuring costs | | | transactions, net | | | EBITDA | |
Las Vegas Strip | | $ | 401,863 | | | $ | 146,952 | | | $ | 1,871 | | | $ | 3,900 | | | $ | 3,886 | | | $ | 558,472 | |
Other Nevada | | | 10,163 | | | | 9,851 | | | | — | | | | — | | | | 453 | | | | 20,467 | |
MGM Grand Detroit | | | 67,773 | | | | 14,847 | | | | — | | | | — | | | | 346 | | | | 82,966 | |
Mississippi | | | 28,343 | | | | 10,546 | | | | — | | | | — | | | | (21 | ) | | | 38,868 | |
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 | |
| | | | | | | | | | | | | | | | | | | |
9
MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| | | | | | | | | |
| | | June 30, | | | December 31, | |
| | | 2005 | | | 2004 | |
ASSETS
|
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 306,495 | | | $ | 435,128 | |
Accounts receivable, net | | | 301,919 | | | | 204,151 | |
Inventories | | | 114,451 | | | | 70,333 | |
Deferred income taxes | | | 115,878 | | | | 28,928 | |
Prepaid expenses and other | | | 203,455 | | | | 81,662 | |
| | | | | | | |
Total current assets | | | 1,042,198 | | | | 820,202 | |
| | | | | | | |
| | | | | | | | | |
Property and equipment, net | | | 16,538,104 | | | | 8,914,142 | |
| | | | | | | | | |
Other assets: | | | | | | | | |
Investments in unconsolidated affiliates | | | 886,301 | | | | 842,640 | |
Goodwill and other intangible assets, net | | | 1,664,867 | | | | 233,335 | |
Deposits and other assets, net | | | 375,145 | | | | 304,710 | |
| | | | | | | |
Total other assets | | | 2,926,313 | | | | 1,380,685 | |
| | | | | | | |
| | | $ | 20,506,615 | | | $ | 11,115,029 | |
| | | | | | | |
| | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 182,930 | | | $ | 198,050 | |
Income taxes payable | | | 168,470 | | | | 4,991 | |
Current portion of long-term debt | | | 14 | | | | 14 | |
Accrued interest on long-term debt | | | 199,985 | | | | 116,997 | |
Other accrued liabilities | | | 961,867 | | | | 607,925 | |
| | | | | | | |
Total current liabilities | | | 1,513,266 | | | | 927,977 | |
| | | | | | | |
| | | | | | | | | |
Deferred income taxes | | | 3,365,146 | | | | 1,802,008 | |
Long-term debt | | | 12,268,883 | | | | 5,458,848 | |
Other long-term obligations | | | 183,306 | | | | 154,492 | |
Stockholders’ equity: | | | | | | | | |
Common stock ($.01 par value: authorized 600,000,000 shares, issued 353,938,925 and 347,147,868 shares and outstanding 287,273,210 and 280,739,868 shares) | | | 3,539 | | | | 3,472 | |
Capital in excess of par value | | | 2,504,680 | | | | 2,346,329 | |
Deferred compensation | | | (7,079 | ) | | | (10,878 | ) |
Treasury stock, at cost (66,665,715 and 66,408,000 shares) | | | (1,120,528 | ) | | | (1,110,551 | ) |
Retained earnings | | | 1,796,716 | | | | 1,544,499 | |
Accumulated other comprehensive loss | | | (1,314 | ) | | | (1,167 | ) |
| | | | | | | |
Total stockholders’ equity | | | 3,176,014 | | | | 2,771,704 | |
| | | | | | | |
| | | $ | 20,506,615 | | | $ | 11,115,029 | |
| | | | | | | |
10
