MGM Mirage reports strong results

2 Aug 2007

LAS VEGAS, Nevada -- (PRESS RELEASE) -- MGM MIRAGE (NYSE:MGM) today reported its second quarter 2007 financial results, achieving the Company's highest ever second quarter diluted earnings per share from continuing operations of $0.62, a 27% increase over the $0.49 per share earned in 2006. Earnings benefited from strong revenue trends, solid operating margins, and profits from sales of Tower 3 of The Signature at MGM Grand.

Net income per share on a diluted basis, including discontinued operations, was $1.22 per share compared to $0.50 per share in 2006. During the second quarter, the Company recognized a pre-tax gain of $201 million on the sale of Primm Valley Resorts and a pre-tax gain of $63 million on the sale of its Laughlin Properties -- Colorado Belle and Edgewater.

Net revenues for the second quarter increased 10% to $1.9 billion, an all-time record quarter for the Company. In addition to the incremental revenue from Beau Rivage, which reopened in August 2006, the Company benefited from strong hotel revenues and the impact of new amenities at many of its Las Vegas Strip resorts.


    Key results from the quarter include:

    -- Las Vegas Strip REVPAR(1) increased 7%, which represents the sixteenth
       consecutive quarter of year-over-year REVPAR increases for these
       resorts;
    -- Occupancy at the Company's Las Vegas Strip resorts was 97.8%, the
       highest occupancy level achieved since 2000;
    -- Property EBITDA(2) of $686 million was also a record for the second
       quarter, and represented a 9% increase over the prior year;
    -- MGM Grand Las Vegas earned Property EBITDA of $108 million, a 43%
       increase over prior year second quarter and its best quarter ever. TI
       and Excalibur also earned all-time record Property EBITDA of $34
       million and $38 million, respectively;
    -- The Mirage achieved record Property EBITDA for the second quarter of
       $59 million, a 41% increase over prior year. New York-New York also had
       a record second quarter Property EBITDA performance, earning $37
       million;
    -- Non-gaming revenues increased 13%, 10% excluding Beau Rivage, with
       continued strong results from non-gaming amenities;
    -- Gaming revenues increased 5%, but decreased 5% excluding Beau Rivage
       due to a lower table games hold percentage. Slot revenues increased 4%
       at the Company's Las Vegas Strip resorts;
    -- Beau Rivage, which was closed in the prior year quarter, earned
       Property EBITDA of $23 million;(3)
    -- Earned $63 million of profit from closings on units of Tower 3 at The
       Signature at MGM Grand;
    -- Successfully issued $750 million of 7.5% senior notes maturing in 2016.

In June, the Company signed a letter of intent with Kerzner International to form a 50/50 joint venture to develop a multi-billion dollar integrated resort to be located on the corner of Las Vegas Boulevard and Sahara Avenue. The Company will provide 40 acres of land, which is being valued at $20 million per acre, and Kerzner International and one of its financial partners will contribute cash equity.

The following table lists significant items which affect the comparability of the current year and prior year results (EPS impact shown, net of tax, per diluted share; negative amounts represent charges to income):



    Three months ended June 30,                     2007           2006
    --------------------------------------------------------------------
    Profits from The Signature at MGM Grand      $  0.14        $  0.06
    Preopening and start-up expenses               (0.03)         (0.03)
    Property transactions, net                     (0.01)         (0.03)

"Our targeted capital investments, particularly in our non-gaming operations, have led to strong returns and record earnings," said Terry Lanni, MGM MIRAGE's Chairman and CEO. "The opening of MGM Grand Detroit and MGM Grand Macau later this year, and our recently announced joint venture project with Kerzner International, further illustrate the powerful momentum created by our accelerated growth platform."

Net revenues increased 10%; excluding Beau Rivage, net revenues were up 4%. As a result of its continued commitment to reinvest in its resorts, the Company generated significant increases in revenues from its non-gaming operations.

Recent and continuing upgrades at Mandalay Bay, including fully remodeled standard rooms, are expected to further enhance that property's results. In addition, the Company continues to make investments across its portfolio of resorts, most notably at Luxor and Monte Carlo, targeted at driving increased customer visitation. The Company believes that these enhancements will positively impact the Company's results in future periods.

The new MGM Grand Detroit is expected to open in October 2007 featuring Detroit's most luxurious hotel and casino with 400 rooms. The new resort will have a larger casino, with 4,500 slot machines compared to 2,840 in the current interim casino and 98 table games (including an eight-table poker room) versus 72. MGM Grand Detroit will include a variety of exciting food and beverage and entertainment amenities, including restaurants from world-famous chefs Wolfgang Puck and Michael Mina.

Gaming revenues increased 5%, but decreased 5% excluding Beau Rivage. Slot revenues at the Company's Las Vegas Strip resorts increased 4% with double-digit increases at Bellagio and MGM Grand Las Vegas. MGM Grand Detroit experienced a 4% decrease in slot revenues, as a competitor recently opened its expanded casino facility.

Table games volume excluding baccarat increased 15%, 5% excluding Beau Rivage. Baccarat volume decreased 13% against a tough prior year comparison -- 2006 results were up 19% on same store basis over the 2005 quarter. The overall table games hold percentage was within the normal 18-22% range in both periods, but was near the low end of the range in the current year versus the high end of the range in the 2006 quarter. In particular, Bellagio and Mandalay Bay experienced hold percentages below the Company's normal range in the current quarter.

Rooms revenues increased 9%, 5% excluding Beau Rivage, despite having 60,000 less available rooms due to room remodeling at Mandalay Bay and the closing of Nevada Landing in March 2007. Average room rates increased 5% at the Company's Las Vegas Strip resorts. Las Vegas Strip REVPAR increased 7%, led by double-digit percentage increases at MGM Grand Las Vegas, Excalibur, and TI. The following table shows key hotel statistics for the Company's Las Vegas Strip resorts:



                                                   Three Months Ended
                                                 ----------------------
                                                 June 30,      June 30,
                                                   2007          2006
                                                 ----------   ---------
       Occupancy %                                  98%           97%
       Average Daily Rate (ADR)                  $  162        $  154
       Revenue per Available Room (REVPAR)       $  159        $  148

The Company's operating income increased 12% to $469 million, which includes $63 million of profit from closings on units of Tower 3 of The Signature at MGM Grand and $11 million of operating income from Beau Rivage. The prior year quarter included $28 million of income from Tower 1 of The Signature at MGM Grand. Excluding these items, operating income increased slightly from prior year with a margin of 22% in both quarters. Property EBITDA increased 9% to a record $686 million; excluding the above items, Property EBITDA increased slightly compared to the prior year quarter with a 33% margin, slightly below the 34% margin in the 2006 quarter.

Detailed Discussion of Certain Charges

In the second quarter of 2007 the company had minimal property transactions. In the 2006 period, net property transactions of $13 million largely related to the write-off of assets in connection with expansion projects at MGM Grand Las Vegas and Mandalay Bay and the write-off of Luxor's investment in the Hairspray show.

Preopening and start-up expenses of $14 million in 2007 primarily related to CityCenter, MGM Grand Detroit, and MGM Grand Macau. Preopening and start-up expenses of $15 million in the 2006 quarter related primarily to CityCenter, the Love show at The Mirage, The Signature at MGM Grand, and our share of preopening related to the Borgata expansion.

Financial Position

Second quarter capital investments totaled $1.3 billion, which included $441 million for CityCenter, $81 million for the permanent MGM Grand Detroit resort, and $23 million for trailing payments on the construction of Beau Rivage. Also during the quarter, the Company purchased 34 acres of land north of Circus Circus Las Vegas for $580 million, 26 acres of which are part of the land to be contributed to the joint venture with Kerzner International. Remaining capital expenditures included spending of $54 million on room and suite remodel projects, primarily at Mandalay Bay, expenditures for corporate aircraft of $27 million, and $90 million of other routine capital expenditures on various new and upgraded amenities at the Company's resorts.

During the quarter the Company received an additional $19 million of insurance recoveries related to Hurricane Katrina. These amounts were not recognized as income pending the final settlement of the Company's insurance claim. At June 30, 2007, the Company had $2.0 billion of available borrowings under its senior credit facility.

"Our operating results this quarter once again prove the power of our portfolio to generate consistent cash flows," said Jim Murren, MGM MIRAGE President, CFO and Treasurer. "More exciting is the pace of future growth. We will continue to develop strategic relationships designed to create additional value from our significant real estate portfolio. Of course, CityCenter is at the heart of our growth strategy; we are very pleased with the quality of the development and the pace of residential sales, and we continue on track for a late 2009 opening."

Language: English Location: Currency: > edit my preferences Home Online Slots Live Dealer Games Online Casinos Online Poker Online Bingo Games Lotteries Sports & Racebooks Fantasy Sports Forex Betting Exchanges Spread Betting Binary Options Exclusive Bonuses Weekly Newsletter Online Gaming News Payment Methods Gaming Software Gaming Site Owners Gaming Jurisdictions		Bonuses! New games! Gossip! And all the player news you can handle. Sign up NOW! View the current issue
	MGM Mirage reports strong results 2 Aug 2007 <a href='https://ad.casinocity.com/adclick.php?n=a21efcd1'><img src='https://ad.casinocity.com/adview.php?what=-site:vendors/width:250/RON&n=a21efcd1' border='0' alt='' /></a> LAS VEGAS, Nevada -- (PRESS RELEASE) -- MGM MIRAGE (NYSE:MGM) today reported its second quarter 2007 financial results, achieving the Company's highest ever second quarter diluted earnings per share from continuing operations of $0.62, a 27% increase over the $0.49 per share earned in 2006. Earnings benefited from strong revenue trends, solid operating margins, and profits from sales of Tower 3 of The Signature at MGM Grand. Net income per share on a diluted basis, including discontinued operations, was $1.22 per share compared to $0.50 per share in 2006. During the second quarter, the Company recognized a pre-tax gain of $201 million on the sale of Primm Valley Resorts and a pre-tax gain of $63 million on the sale of its Laughlin Properties -- Colorado Belle and Edgewater. Net revenues for the second quarter increased 10% to $1.9 billion, an all-time record quarter for the Company. In addition to the incremental revenue from Beau Rivage, which reopened in August 2006, the Company benefited from strong hotel revenues and the impact of new amenities at many of its Las Vegas Strip resorts. Key results from the quarter include: -- Las Vegas Strip REVPAR(1) increased 7%, which represents the sixteenth consecutive quarter of year-over-year REVPAR increases for these resorts; -- Occupancy at the Company's Las Vegas Strip resorts was 97.8%, the highest occupancy level achieved since 2000; -- Property EBITDA(2) of $686 million was also a record for the second quarter, and represented a 9% increase over the prior year; -- MGM Grand Las Vegas earned Property EBITDA of $108 million, a 43% increase over prior year second quarter and its best quarter ever. TI and Excalibur also earned all-time record Property EBITDA of $34 million and $38 million, respectively; -- The Mirage achieved record Property EBITDA for the second quarter of $59 million, a 41% increase over prior year. New York-New York also had a record second quarter Property EBITDA performance, earning $37 million; -- Non-gaming revenues increased 13%, 10% excluding Beau Rivage, with continued strong results from non-gaming amenities; -- Gaming revenues increased 5%, but decreased 5% excluding Beau Rivage due to a lower table games hold percentage. Slot revenues increased 4% at the Company's Las Vegas Strip resorts; -- Beau Rivage, which was closed in the prior year quarter, earned Property EBITDA of $23 million;(3) -- Earned $63 million of profit from closings on units of Tower 3 at The Signature at MGM Grand; -- Successfully issued $750 million of 7.5% senior notes maturing in 2016. In June, the Company signed a letter of intent with Kerzner International to form a 50/50 joint venture to develop a multi-billion dollar integrated resort to be located on the corner of Las Vegas Boulevard and Sahara Avenue. The Company will provide 40 acres of land, which is being valued at $20 million per acre, and Kerzner International and one of its financial partners will contribute cash equity. The following table lists significant items which affect the comparability of the current year and prior year results (EPS impact shown, net of tax, per diluted share; negative amounts represent charges to income): Three months ended June 30, 2007 2006 -------------------------------------------------------------------- Profits from The Signature at MGM Grand $ 0.14 $ 0.06 Preopening and start-up expenses (0.03) (0.03) Property transactions, net (0.01) (0.03) "Our targeted capital investments, particularly in our non-gaming operations, have led to strong returns and record earnings," said Terry Lanni, MGM MIRAGE's Chairman and CEO. "The opening of MGM Grand Detroit and MGM Grand Macau later this year, and our recently announced joint venture project with Kerzner International, further illustrate the powerful momentum created by our accelerated growth platform." Net revenues increased 10%; excluding Beau Rivage, net revenues were up 4%. As a result of its continued commitment to reinvest in its resorts, the Company generated significant increases in revenues from its non-gaming operations. Recent and continuing upgrades at Mandalay Bay, including fully remodeled standard rooms, are expected to further enhance that property's results. In addition, the Company continues to make investments across its portfolio of resorts, most notably at Luxor and Monte Carlo, targeted at driving increased customer visitation. The Company believes that these enhancements will positively impact the Company's results in future periods. The new MGM Grand Detroit is expected to open in October 2007 featuring Detroit's most luxurious hotel and casino with 400 rooms. The new resort will have a larger casino, with 4,500 slot machines compared to 2,840 in the current interim casino and 98 table games (including an eight-table poker room) versus 72. MGM Grand Detroit will include a variety of exciting food and beverage and entertainment amenities, including restaurants from world-famous chefs Wolfgang Puck and Michael Mina. Gaming revenues increased 5%, but decreased 5% excluding Beau Rivage. Slot revenues at the Company's Las Vegas Strip resorts increased 4% with double-digit increases at Bellagio and MGM Grand Las Vegas. MGM Grand Detroit experienced a 4% decrease in slot revenues, as a competitor recently opened its expanded casino facility. Table games volume excluding baccarat increased 15%, 5% excluding Beau Rivage. Baccarat volume decreased 13% against a tough prior year comparison -- 2006 results were up 19% on same store basis over the 2005 quarter. The overall table games hold percentage was within the normal 18-22% range in both periods, but was near the low end of the range in the current year versus the high end of the range in the 2006 quarter. In particular, Bellagio and Mandalay Bay experienced hold percentages below the Company's normal range in the current quarter. Rooms revenues increased 9%, 5% excluding Beau Rivage, despite having 60,000 less available rooms due to room remodeling at Mandalay Bay and the closing of Nevada Landing in March 2007. Average room rates increased 5% at the Company's Las Vegas Strip resorts. Las Vegas Strip REVPAR increased 7%, led by double-digit percentage increases at MGM Grand Las Vegas, Excalibur, and TI. The following table shows key hotel statistics for the Company's Las Vegas Strip resorts: Three Months Ended ---------------------- June 30, June 30, 2007 2006 ---------- --------- Occupancy % 98% 97% Average Daily Rate (ADR) $ 162 $ 154 Revenue per Available Room (REVPAR) $ 159 $ 148 The Company's operating income increased 12% to $469 million, which includes $63 million of profit from closings on units of Tower 3 of The Signature at MGM Grand and $11 million of operating income from Beau Rivage. The prior year quarter included $28 million of income from Tower 1 of The Signature at MGM Grand. Excluding these items, operating income increased slightly from prior year with a margin of 22% in both quarters. Property EBITDA increased 9% to a record $686 million; excluding the above items, Property EBITDA increased slightly compared to the prior year quarter with a 33% margin, slightly below the 34% margin in the 2006 quarter. Detailed Discussion of Certain Charges In the second quarter of 2007 the company had minimal property transactions. In the 2006 period, net property transactions of $13 million largely related to the write-off of assets in connection with expansion projects at MGM Grand Las Vegas and Mandalay Bay and the write-off of Luxor's investment in the Hairspray show. Preopening and start-up expenses of $14 million in 2007 primarily related to CityCenter, MGM Grand Detroit, and MGM Grand Macau. Preopening and start-up expenses of $15 million in the 2006 quarter related primarily to CityCenter, the Love show at The Mirage, The Signature at MGM Grand, and our share of preopening related to the Borgata expansion. Financial Position Second quarter capital investments totaled $1.3 billion, which included $441 million for CityCenter, $81 million for the permanent MGM Grand Detroit resort, and $23 million for trailing payments on the construction of Beau Rivage. Also during the quarter, the Company purchased 34 acres of land north of Circus Circus Las Vegas for $580 million, 26 acres of which are part of the land to be contributed to the joint venture with Kerzner International. Remaining capital expenditures included spending of $54 million on room and suite remodel projects, primarily at Mandalay Bay, expenditures for corporate aircraft of $27 million, and $90 million of other routine capital expenditures on various new and upgraded amenities at the Company's resorts. During the quarter the Company received an additional $19 million of insurance recoveries related to Hurricane Katrina. These amounts were not recognized as income pending the final settlement of the Company's insurance claim. At June 30, 2007, the Company had $2.0 billion of available borrowings under its senior credit facility. "Our operating results this quarter once again prove the power of our portfolio to generate consistent cash flows," said Jim Murren, MGM MIRAGE President, CFO and Treasurer. "More exciting is the pace of future growth. We will continue to develop strategic relationships designed to create additional value from our significant real estate portfolio. Of course, CityCenter is at the heart of our growth strategy; we are very pleased with the quality of the development and the pace of residential sales, and we continue on track for a late 2009 opening."