MGM Mirage Reports Third Quarter Financial Results
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MGM Mirage Reports Third Quarter Financial Results
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Catégorie : Monde - Économie du secteur
- Chiffres et études
Ceci est un communiqué de presse sélectionné par notre comité éditorial et mis en ligne gratuitement le 06-11-2009
Operating Trends Continue to Improve; Credit Facility Amended to Provide Further Financial Flexibility
MGM MIRAGE (NYSE: MGM) today announced its financial results for the third quarter of 2009. The Company reported a third quarter diluted loss per share of $1.70 compared to income per share of $0.22 in the prior year third quarter. The current year results were impacted by non-cash impairment charges totaling $1.17 billion, or $1.72 loss per diluted share net of tax, including a pre-tax non-cash impairment charge of $956 million related to the Company's investment in CityCenter and a pre-tax non-cash charge of $203 million related to impairment of CityCenter's residential real estate under development.
The following table lists items which affect the comparability of the current and prior year quarterly results (EPS impact, net of tax, per diluted share; negative amounts represent charges to income):
Three months ended September 30, 2009 2008
-------------------------------------------------------------------------
Preopening and start-up expenses $ (0.01) $ (0.01)
Property transactions net:
Investment in CityCenter non-cash
impairment charge (1.40) -
Other property transactions, net (0.02) (0.08)
Income (loss) from unconsolidated affiliates:
CityCenter joint venture residential non-cash
impairment charge (0.30) -
Borgata joint venture insurance proceeds 0.02 -
The following key results for the quarter are presented on a "same store" basis excluding the results of TI in the prior year as the Company completed the sale of TI in March 2009:
-- Net revenue decreased 9% to $1.5 billion;
-- Casino revenue decreased 1% with strong baccarat results during the
quarter;
-- Las Vegas Strip REVPAR(1)1 decreased 23% compared to the prior year
quarter versus a 31% year-over-year decrease in the second quarter of
2009;
-- Property EBITDA(2) was $415 million excluding items outlined in the
detailed discussion below, or down 12%; and
-- MGM Grand Macau earned operating income of $50 million, including
depreciation expense of $23 million. The Company's 50% share of MGM
Grand Macau's operating results was approximately $24 million, which is
included in income (loss) from unconsolidated affiliates.
"We continue to show sequential improvement in our operating results over the course of 2009. Property EBITDA on a comparable basis increased from $379 million in the second quarter to $415 million in the third quarter with sequential improvement in our margins as well - 25% in the second quarter increasing to 27% in the third quarter," said Jim Murren, MGM MIRAGE Chairman and Chief Executive Officer. "We continue to earn occupancy through our superior assets and focus on the customer, resulting in increased market share. We expect CityCenter to grow our business significantly and we are extremely excited to open this tremendous asset, with Vdara opening in less than a month on December 1, followed by Crystals on December 3, Mandarin Oriental on December 4, and Aria Resort and Casino on December 16."
Detailed Discussion of Third Quarter Operating Results
(Results are presented on a same store basis excluding TI)
Casino revenue declined 1%, with table games revenue up 7% and slots revenue down 6%. The Company's table games volume was up 3% in the quarter, including a 75% increase in baccarat volume. The overall table games hold percentage was slightly above the Company's normal 18% to 22% range in the current year period; in the prior year quarter the hold percentage was near the top end of the range. The 6% decrease in slots revenue represents a sequential improvement from the 11% year-over-year decrease in the second quarter of 2009 and 13% year-over-year decrease in the first quarter of 2009.
Rooms revenue decreased 21% while Las Vegas Strip REVPAR decreased 23%. Anticipated weakness in convention traffic led to lower room rates, however increased leisure and casino business has led to sequential improvements in occupancy throughout 2009. The following table shows key hotel statistics for the Company's Las Vegas Strip resorts:
Three months ended September 30, 2009 2008
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Occupancy % 95% 95%
Average Daily Rate (ADR) $ 105 $ 136
Revenue per Available Room (REVPAR) $ 100 $ 129
Corporate expense increased to $32 million compared to $24 million in the 2008 third quarter. The prior year quarter included a $7 million reversal of bonus accruals.
The current quarter loss from unconsolidated affiliates of $133 million includes a $203 million non-cash charge related to the impairment of residential real estate under development at CityCenter. Excluding this item, income from unconsolidated affiliates increased 81% as a result of strong operating results at MGM Grand Macau and Borgata, as well as approximately $14 million for the Company's share of insurance proceeds recognized by Borgata.
Property EBITDA as reported was $203 million. On a comparable basis Property EBITDA was $415 million, down 12% from the prior year quarter with a margin of 27% compared to a 28% margin in the prior year quarter. The following table lists the items that impacted comparability of Property EBITDA (expense/(income)):
Three months ended September 30, 2009 2008
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(In thousands)
Preopening and start-up expenses $10,058 $5,451
2008 bonus accrual reversal - (14,325)
Property transactions, net 13,438 1,856
Income (loss) from unconsolidated affiliates:
CityCenter joint venture residential non-cash
impairment charge 202,559 -
Borgata joint venture insurance proceeds (14,367) -
Operating loss for the third quarter was $963 million. After adjusting for items affecting comparability, including a total company-wide bonus accrual reversal of $22 million in the prior year, operating income decreased 16% compared to prior year with a margin of 13% compared to a 14% margin in the prior year. The Company has continued to manage its cost structure with full-time equivalents down 12% for the third quarter compared to the 2008 quarter, despite achieving occupancy levels equal to prior year. Non-operating expense increased to $195 million in the current year quarter mainly due to higher interest costs associated with the Company's fixed rate senior note issuances in the fourth quarter of 2008 and during 2009 and higher interest rates on the Company's senior credit facility, which factors were partially offset by higher capitalized interest.
Financial Position
Effective November 4, the Company and its lenders amended its senior credit facility to permit the Company to:
-- Issue additional unsecured debt to refinance certain existing debt so
long as the maturity of the newly issued debt is not earlier than the
maturity of the debt being refinanced or six months after the date the
senior credit facility is set to mature.
-- Issue, in addition to any such refinancing debt, up to $1 billion of
other unsecured debt, provided that 50% of the net cash proceeds over
$250 million must be applied to permanently reduce outstanding senior
credit facility balances;
-- Issue additional equity securities, subject to compliance with the
certain provisions, provided that 50% of the net cash proceeds over $500
million must be applied to reduce outstanding senior credit facility
balances.
"This amendment restores our credit facility to normal operating terms in line with our past arrangements," said Dan D'Arrigo, MGM MIRAGE Executive Vice President and Chief Financial Offer. "Our uniquely strong relationship with our bank group provides us with confidence in our ability to further enhance our financial position."
At September 30, 2009, the Company had approximately $4.3 billion of borrowings outstanding under its senior credit facility with available borrowings of $1.4 billion. The Company's cash balance was $897 million at September 30, 2009, higher than normal due to net proceeds of approximately $451 million from its September issuance of $475 million 11.375% senior unsecured notes due 2018. In October, the Company used these proceeds to pay down the senior credit facility, including a permanent reduction in the facility of $226 million.
During the third quarter of 2009 the Company made capital investments of approximately $28 million related to various ongoing capital projects at its resorts and funded the remaining $89 million required pursuant to the Company's irrevocable letter of credit to CityCenter.
"Our $475 million unsecured senior notes due were issued at an attractive yield in September, and our recent bank amendment is another important step in our ongoing re-capitalization strategy," said Mr. D'Arrigo. "Net of proceeds from our senior notes issuance, debt at the end of the quarter was $12.5 billion and we will remain focused on strategically de-leveraging our balance sheet."
MGM MIRAGE will hold a conference call to discuss its third quarter results at 11:00 a.m. Eastern Standard 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 1-706-758-3659 (international). Until November 11, 2009, a complete replay of the conference call can be accessed by dialing 1-800-642-1687 or 1-706-645-9291, access code 35345375. A complete replay of the call will also be made available at www.mgmmirage.com. Supplemental detailed earnings information will also be available on the Company's website.
(1) REVPAR is hotel Revenue per Available Room.
(2) "EBITDA" is earnings before interest and other non-operating income (expense), taxes, depreciation and amortization. "Property EBITDA" is EBITDA before corporate expense and stock compensation expense. EBITDA information 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. In addition, capital allocation, tax planning, financing and stock compensation awards are all managed at the corporate level. Management uses Property EBITDA 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 consolidated EBITDA to net income and of operating income to Property EBITDA are included in the financial schedules accompanying this release.
MGM MIRAGE (NYSE: MGM), one of the world's leading and most respected companies with significant holdings in gaming, hospitality and entertainment, owns and operates 16 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, New Jersey, Illinois and Macau. CityCenter, an unprecedented urban metropolis on the Las Vegas Strip scheduled to open in late 2009, is a joint venture between MGM MIRAGE and Infinity World Development Corp, a subsidiary of Dubai World. MGM MIRAGE Hospitality has entered into management agreements for future casino and non-casino resorts throughout the world. MGM MIRAGE supports responsible gaming and has implemented the American Gaming Association's Code of Conduct for Responsible Gaming at its properties. MGM MIRAGE has received 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 Web site at http://www.mgmmirage.com.
Statements in this release which are not historical facts are "forward looking" statements and "safe harbor statements" under the Private Securities Litigation Reform Act of 1995 that involve risks and/or uncertainties, including risks and/or uncertainties as described in the company's public filings with the Securities and Exchange Commission.
MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
------------- ------------- ------------- -------------
Revenues:
Casino $ 699,806 $ 739,331 $ 1,990,103 $ 2,271,978
Rooms 340,165 458,051 1,045,504 1,500,322
Food and
beverage 344,284 395,090 1,040,540 1,229,045
Entertainment 128,568 135,673 369,998 408,541
Retail 54,525 69,205 156,785 202,060
Other 138,073 155,335 419,248 478,664
------------- ------------- ------------- -------------
1,705,421 1,952,685 5,022,178 6,090,610
Less:
Promotional
allowances (172,198) (167,154) (496,005) (506,355)
------------- ------------- ------------- -------------
1,533,223 1,785,531 4,526,173 5,584,255
------------- ------------- ------------- -------------
Expenses:
Casino 367,720 383,406 1,093,068 1,200,948
Rooms 108,273 136,313 325,247 412,846
Food and
beverage 196,778 237,130 590,137 720,201
Entertainment 91,422 94,667 267,786 288,617
Retail 33,684 42,411 99,760 128,070
Other 91,261 99,389 260,562 307,521
General and
administrative 290,766 326,831 825,130 971,016
Corporate
expense 31,928 24,466 99,295 83,537
Preopening and
start-up
expenses 10,058 5,505 27,539 17,626
Restructuring
costs - - 493 329
Property
transactions,
net 971,208 32,326 779,331 34,984
Depreciation
and
amortization 170,651 200,102 521,877 591,659
------------- ------------- ------------- -------------
2,363,749 1,582,546 4,890,225 4,757,354
------------- ------------- ------------- -------------
Income (loss)
from
unconsolidated
affiliates (132,893) 38,572 (113,169) 89,728
------------- ------------- ------------- -------------
Operating
income
(loss) (963,419) 241,557 (477,221) 916,629
------------- ------------- ------------- -------------
Non-operating
income
(expense):
Interest
income 857 5,910 11,535 13,056
Interest
expense,
net (181,899) (144,751) (554,822) (439,844)
Non-operating
items from
unconsolidated
affiliates (14,613) (9,552) (38,058) (26,731)
Other, net 826 2,125 (234,693) 791
------------- ------------- ------------- -------------
(194,829) (146,268) (816,038) (452,728)
------------- ------------- ------------- -------------
Income (loss)
before income
taxes (1,158,248) 95,289 (1,293,259) 463,901
Benefit
(provision)
for income
taxes 407,860 (34,011) 435,495 (171,176)
------------- ------------- ------------- -------------
Net income
(loss) $ (750,388) $ 61,278 $ (857,764) $ 292,725
============= ============= ============= =============
Per share of
common stock:
Basic:
Net income
(loss)
per share $ (1.70) $ 0.22 $ (2.40) $ 1.04
============= ============= ============= =============
Weighted
average
shares
outstanding 441,214 276,417 357,348 280,926
============= ============= ============= =============
Diluted:
Net income
(loss)
per share $ (1.70) $ 0.22 $ (2.40) $ 1.02
============= ============= ============= =============
Weighted
average
shares
outstanding 441,214 279,846 357,348 287,604
============= ============= ============= =============
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA - NET REVENUES
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
------------- ------------- ------------- -------------
Las Vegas Strip $ 1,224,563 $ 1,450,899 $ 3,603,099 $ 4,569,476
Other Nevada 33,070 41,334 94,845 117,005
MGM Grand
Detroit 124,753 139,859 389,365 430,067
Mississippi 125,463 135,357 369,667 408,980
Management
operations 25,374 18,082 69,197 58,727
------------- ------------- ------------- -------------
$ 1,533,223 $ 1,785,531 $ 4,526,173 $ 5,584,255
============= ============= ============= =============
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA - PROPERTY EBITDA
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
------------- ------------- ------------- -------------
Las Vegas Strip $ 286,731 $ 398,998 $ 867,405 $ 1,361,238
Other Nevada 1,704 3,226 3,406 1,806
MGM Grand
Detroit 26,823 33,849 100,992 106,785
Mississippi 29,580 26,208 89,713 82,194
Management
operations 1,874 5,066 10,785 13,815
Unconsolidated
resorts (143,379) 34,535 (139,984) 74,536
------------- ------------- ------------- -------------
$ 203,333 $ 501,882 $ 932,317 $ 1,640,374
============= ============= ============= =============
MGM MIRAGE AND SUBSIDIARIES
DETAIL OF CERTAIN CHARGES AFFECTING PROPERTY EBITDA and EBITDA
(In thousands)
(Unaudited)
Three Months Ended September 30, 2009
-------------------------------------
Preopening Property
and start-up Restructuring transactions,
expenses costs net Total
------------- ------------- ------------- -------------
Las Vegas Strip $ (614) $ - $ 5,059 $ 4,445
Other Nevada - - - -
MGM Grand
Detroit - - 5,906 5,906
Mississippi - - - -
Management
operations - - 2,473 2,473
Unconsolidated
resorts 10,672 - - 10,672
------------- ------------- ------------- -------------
10,058 - 13,438 23,496
Corporate and
other - - 957,770 957,770
------------- ------------- ------------- -------------
$ 10,058 $ - $ 971,208 $ 981,266
============= ============= ============= =============
Three Months Ended September 30, 2008
-------------------------------------
Preopening Property
and start-up Restructuring transactions,
expenses costs net Total
------------- ------------- ------------- -------------
Las Vegas Strip $ 1,494 $ - $ 1,765 $ 3,259
Other Nevada - - 20 20
MGM Grand
Detroit - - - -
Mississippi - - 71 71
Management
operations - - - -
Unconsolidated
resorts 3,957 - - 3,957
------------- ------------- ------------- -------------
5,451 - 1,856 7,307
Corporate and
other 54 - 30,470 30,524
------------- ------------- ------------- -------------
$ 5,505 $ - $ 32,326 $ 37,831
============= ============= ============= =============
MGM MIRAGE AND SUBSIDIARIES
DETAIL OF CERTAIN CHARGES AFFECTING PROPERTY EBITDA and EBITDA (continued)
(In thousands)
(Unaudited)
Nine Months Ended September 30, 2009
------------------------------------
Preopening Property
and start-up Restructuring transactions,
expenses costs net Total
------------- ------------- ------------- -------------
Las Vegas Strip $ 138 $ 493 $ (211) $ 420
Other Nevada - - 6 6
MGM Grand
Detroit - - 5,906 5,906
Mississippi - - 157 157
Management
operations - - 2,473 2,473
Unconsolidated
resorts 27,401 - - 27,401
------------- ------------- ------------- -------------
27,539 493 8,331 36,363
Corporate and
other - - 771,000 771,000
------------- ------------- ------------- -------------
$ 27,539 $ 493 $ 779,331 $ 807,363
============= ============= ============= =============
Nine Months Ended September 30, 2008
------------------------------------
Preopening Property
and start-up Restructuring transactions,
expenses costs net Total
------------- ------------- ------------- -------------
Las Vegas Strip $ 2,114 $ 329 $ 926 $ 3,369
Other Nevada - - 2,207 2,207
MGM Grand
Detroit 135 - 8 143
Mississippi - - 73 73
Management
operations - - - -
Unconsolidated
resorts 15,276 - - 15,276
------------- ------------- ------------- -------------
17,525 329 3,214 21,068
Corporate and
other 101 - 31,770 31,871
------------- ------------- ------------- -------------
$ 17,626 $ 329 $ 34,984 $ 52,939
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MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF CONSOLIDATED EBITDA TO NET INCOME (LOSS)
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
------------- ------------- ------------- -------------
EBITDA $ (792,768) $ 441,659 $ 44,656 $ 1,508,288
Depreciation
and
amortization (170,651) (200,102) (521,877) (591,659)
------------- ------------- ------------- -------------
Operating
income (loss) (963,419) 241,557 (477,221) 916,629
------------- ------------- ------------- -------------
Non-operating
income
(expense):
Interest
expense, net (181,899) (144,751) (554,822) (439,844)
Other (12,930) (1,517) (261,216) (12,884)
------------- ------------- ------------- -------------
(194,829) (146,268) (816,038) (452,728)
------------- ------------- ------------- -------------
Income (loss)
before income
taxes (1,158,248) 95,289 (1,293,259) 463,901
Benefit
(provision)
for income
taxes 407,860 (34,011) 435,495 (171,176)
------------- ------------- ------------- -------------
Net income
(loss) $ (750,388) $ 61,278 $ (857,764) $ 292,725
============= ============= ============= =============
MGM MIRAGE AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO PROPERTY EBITDA
(In thousands)
(Unaudited)
Three Months Ended September 30, 2009
-------------------------------------
Depreciation
Operating and
income (loss) amortization EBITDA
------------- ------------- -------------
Las Vegas Strip $ 158,274 $ 128,457 $ 286,731
Other Nevada 238 1,466 1,704
MGM Grand Detroit 17,889 8,934 26,823
Mississippi 13,593 15,987 29,580
Management operations 847 1,027 1,874
Unconsolidated resorts (143,379) - (143,379)
------------- ------------- -------------
47,462 155,871 203,333
Stock compensation (9,319)
Corporate and other (986,782)
-------------
$ (792,768)
=============
Three Months Ended September 30, 2008
-------------------------------------
Depreciation
Operating and
income (loss) amortization EBITDA
------------- ------------- -------------
Las Vegas Strip $ 249,481 $ 149,517 $ 398,998
Other Nevada 1,588 1,638 3,226
MGM Grand Detroit 19,587 14,262 33,849
Mississippi 10,480 15,728 26,208
Management operations 2,531 2,535 5,066
Unconsolidated resorts 34,535 - 34,535
------------- ------------- -------------
318,202 183,680 501,882
Stock compensation (8,870)
Corporate and other (51,353)
-------------
$ 441,659
=============
Nine Months Ended September 30, 2009
------------------------------------
Depreciation
Operating and
income (loss) amortization EBITDA
------------- ------------- -------------
Las Vegas Strip $ 482,115 $ 385,290 $ 867,405
Other Nevada (1,131) 4,537 3,406
MGM Grand Detroit 70,658 30,334 100,992
Mississippi 40,775 48,938 89,713
Management operations 4,699 6,086 10,785
Unconsolidated resorts (139,984) - (139,984)
------------- ------------- -------------
457,132 475,185 932,317
Stock compensation (27,076)
Corporate and other (860,585)
-------------
$ 44,656
=============
Nine Months Ended September 30, 2008
------------------------------------
Depreciation
Operating and
income (loss) amortization EBITDA
------------- ------------- -------------
Las Vegas Strip $ 917,235 $ 444,003 $ 1,361,238
Other Nevada (2,818) 4,624 1,806
MGM Grand Detroit 63,875 42,910 106,785
Mississippi 35,441 46,753 82,194
Management operations 7,203 6,612 13,815
Unconsolidated resorts 74,536 - 74,536
------------- ------------- -------------
1,095,472 544,902 1,640,374
Stock compensation (29,665)
Corporate and other (102,421)
-------------
$ 1,508,288
=============
MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
September 30, December 31,
2009 2008
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 896,990 $ 295,644
Accounts receivable, net 309,281 303,416
Inventories 98,121 111,505
Income tax receivable 166,907 64,685
Deferred income taxes 45,997 63,153
Prepaid expenses and other 107,169 155,652
Assets held for sale - 538,975
------------- -------------
Total current assets 1,624,465 1,533,030
------------- -------------
Property and equipment, net 15,751,056 16,289,154
Other assets:
Investments in and advances to
unconsolidated affiliates 3,544,425 4,642,865
Goodwill 86,353 86,353
Other intangible assets, net 344,976 347,209
Deposits and other assets, net 375,246 376,105
------------- -------------
Total other assets 4,351,000 5,452,532
------------- -------------
$ 21,726,521 $ 23,274,716
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 130,708 $ 142,693
Construction payable 13,208 45,103
Current portion of long-term debt - 1,047,614
Accrued interest on long-term debt 205,786 187,597
Other accrued liabilities 807,427 1,549,296
Liabilities related to assets held for
sale - 30,273
------------- -------------
Total current liabilities 1,157,129 3,002,576
------------- -------------
Deferred income taxes 3,142,220 3,441,198
Long-term debt 12,910,322 12,416,552
Other long-term obligations 221,707 440,029
Stockholders' equity:
Common stock, $.01 par value: authorized
600,000,000 shares, issued 441,163,787
and 369,283,995 shares and outstanding
441,163,787 and 276,506,968 shares 4,412 3,693
Capital in excess of par value 3,487,883 4,018,410
Treasury stock, at cost: 0 and 92,777,027
shares - (3,355,963)
Retained earnings 804,450 3,365,122
Accumulated other comprehensive loss (1,602) (56,901)
------------- -------------
Total stockholders' equity 4,295,143 3,974,361
------------- -------------
$ 21,726,521 $ 23,274,716
============= =============
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