These results reflect a substantial decline in business volumes at the Company's hotel and casino resorts immediately after the terrorist attacks of September 11, 2001. The Company's hotels on the Las Vegas Strip averaged an unprecedented low 64% occupancy level from September 11th through September 30th. This reduction in customer traffic also resulted in lower casino, food and beverage and retail revenue. Mid-week occupancy levels have now significantly improved, and weekend occupancy has nearly returned to pre-attack levels, albeit at reduced rates. Accordingly, casino and non-casino revenue continue to rebound.
"Prior to the events of September 11th, our Company was on track to achieve another strong quarterly operating performance. Obviously the result of the terrorist attacks had a profound impact on the hotel and travel industry and our business," said Terry Lanni, Chairman and Chief Executive Officer of MGM MIRAGE. "Our management team undertook a detailed analysis of our current operations in terms of the impact of September 11th. To respond to these historic challenges, we implemented cost containment strategies which included a significant reduction in payroll and a refocusing of several of our marketing programs. The objective of this approach is to rebuild revenue and profitability in order to bring back as many of our displaced employees as possible. Current trends indicate our initiatives are working, as we are once again profitable and we have recalled many of our employees. We expect to be profitable throughout the fourth quarter, the degree of which will depend on business volumes which have continued to improve since late September. Based on early indications, we are optimistic that this recovery will accelerate into 2002."
Layoffs and terminations related to the payroll deductions resulted in an after-tax restructuring charge of $12.9 million (8 cents per share). The Company has achieved reductions in most operating expense categories, including payroll and purchasing, and has restructured several corporate functions. Management also reassessed the carrying value of certain assets and accordingly recognized an after-tax impairment loss of $30.8 million (19 cents per share) for the three months ended September 30, 2001. Including these nonrecurring items, the Company reported a loss of 9 cents per share for the three months ended September 30, 2001 compared with earnings of 42 cents per share during the prior year's quarter.
During the three months ended September 30, 2001, the Company's free cash flow enabled it to reduce debt by $103 million. Since the acquisition of Mirage Resorts on May 31, 2000, the Company has reduced its outstanding debt balance by $947 million.
"Despite the events of September 11th, our Company remains financially strong. We currently have over $730 million of available liquidity with no public debt maturities until 2005. During the quarter we utilized free cash flow to repurchase approximately 2.2 million shares under our 10 million share repurchase program at an average cost of $20.47 per share," said Jim Murren, President and CFO of MGM MIRAGE. "The Company has completed several important cost saving programs and has significant flexibility in its capital requirements over the next few years. Our overall business objectives remain the same. We will continue to grow our business, manage our cost structure and maximize free cash flow for debt reductions, internal growth, acquisitions and share repurchases."
MGM MIRAGE is an entertainment, hotel and gaming company headquartered in Las Vegas, Nevada, which owns and/or operates through subsidiaries 19 casino properties on three continents. Its U.S. holdings include: Bellagio, the MGM Grand Hotel and Casino - The City of Entertainment, The Mirage, Treasure Island, New York - New York Hotel and Casino, the Boardwalk Hotel and Casino and 50% of Monte Carlo, all located on the Las Vegas Strip; the Golden Nugget in Downtown Las Vegas; Whiskey Pete's, Buffalo Bill's, the Primm Valley Resort and two championship golf courses at the California/Nevada state line; the exclusive Shadow Creek golf course in North Las Vegas; the Golden Nugget in Laughlin, Nevada; the Beau Rivage resort on the Mississippi Gulf Coast; and the MGM Grand Detroit Casino in Detroit, Michigan. The Company is a joint venture partner on Borgata at Renaissance Pointe, a resort under development in Atlantic City, New Jersey and also controls several development sites in the ocean-front resort community. Internationally, MGM MIRAGE owns and operates the MGM Grand Hotel and Casino in Darwin, Australia and manages casinos in Nelspruit, Witbank, Johannesburg and East London, Republic of South Africa.
For more information on MGM MIRAGE and its operating subsidiaries, visit our website at 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2001 2000 2001 2000
Revenues:
Casino $551,698 $571,529 $1,676,131 $1,211,839
Rooms 196,243 210,693 662,612 398,341
Food and beverage 174,272 182,600 556,386 332,816
Entertainment, retail and
other 164,310 176,233 496,959 305,882
Income from unconsolidated
affiliate 8,909 9,014 30,269 11,754
1,095,432 1,150,069 3,422,357 2,260,632
Less: promotional
allowances 102,543 101,373 309,020 185,141
992,889 1,048,696 3,113,337 2,075,491
Expenses:
Casino 288,049 268,549 859,608 566,373
Rooms 61,237 63,783 186,348 122,202
Food and beverage 105,742 110,376 319,939 196,370
Entertainment, retail and
other 117,225 111,088 328,963 188,809
Provision for doubtful
accounts 27,008 10,666 58,745 23,907
General and administrative 157,127 148,277 454,796 298,080
Preopening expenses and
other 1,091 1,609 3,071 3,808
Restructuring costs 19,896 -- 19,896 23,519
Write-Downs and Impairments 47,384 -- 47,384 102,225
Depreciation and
amortization 98,697 97,576 292,034 197,096
923,456 811,924 2,570,784 1,722,389
Operating Profit 69,433 236,772 542,553 353,102
Corporate Expense 8,408 11,949 29,607 24,635
Operating Income 61,025 224,823 512,946 328,467
Non-Operating Income (Expense):
Interest income 1,408 2,553 5,188 10,278
Interest expense, net (84,185) (104,876) (274,197) (174,336)
Interest expense from
unconsolidated affiliate (482) (921) (1,992) (1,194)
Other, net (1,440) (182) (2,911) (694)
(84,699) (103,426) (273,912) (165,946)
Income (Loss) Before Income
Taxes and Extraordinary Item (23,674) 121,397 239,034 162,521
Benefit (Provision) for
income taxes 9,321 (49,283) (92,129) (64,363)
Income (Loss) Before
Extraordinary Item (14,353) 72,114 146,905 98,158
Extraordinary Item:
Loss on Early Extinguishment
of Debt, net -- (4,683) (778) (5,416)
Net Income (Loss) $(14,353) $ 67,431 $ 146,127 $ 92,742
Income Before Preopening and
Other, Restructuring,
Write-Downs and Impairments
and Extraordinary Item $ 30,088 $ 73,160 $ 192,633 $ 182,367
MGM MIRAGE AND SUBSIDIARIES
PER SHARE OF COMMON STOCK
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2001 2000 2001 2000
Per Share Of Common Stock:
Basic:
Income (Loss) Before
Extraordinary Item $(0.09) $0.45 $0.92 $0.70
Extraordinary Item, net -- (0.03) -- (0.04)
Net Income (Loss) Per Share $(0.09) $0.42 $0.92 $0.66
Weighted Average Shares
Outstanding (000's) 159,198 158,848 159,255 140,649
Diluted:
Income (Loss) Before
Extraordinary Item $(0.09) $0.45 $0.91 $0.69
Extraordinary Item, net -- (0.03) -- (0.04)
Net Income (Loss) Per Share $(0.09) $0.42 $0.91 $0.65
Weighted Average Shares
Outstanding (000's) 159,198 162,367 161,424 143,326
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA PER SHARE OF COMMON STOCK
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2001 2000 2001 2000
Per Share Of Common Stock:
Basic:
Income Before Preopening and other,
Restructuring, Write-Downs and
Impairments and
Extraordinary Item $ 0.19 $ 0.45 $ 1.21 $1.30
Preopening expenses and Other, net (0.01) -- (0.02) (0.02)
Restructuring costs, net (0.08) -- (0.08) (0.11)
Write-Downs and Impairments, net (0.19) -- (0.19) (0.47)
Extraordinary Item, net -- (0.03) -- (0.04)
Net Income (Loss) Per Share $(0.09) $ 0.42 $ 0.92 $0.66
Weighted Average Shares
Outstanding (000's) 159,198 158,848 159,255 140,649
Diluted:
Income Before Preopening and other,
Restructuring, Write-Downs and
Impairments and
Extraordinary Item $ 0.19 $0.45 $1.19 $1.27
Preopening expenses and Other, net (0.01) -- (0.01) (0.02)
Restructuring costs, net (0.08) -- (0.08) (0.10)
Write-Downs and Impairments, net (0.19) -- (0.19) (0.46)
Extraordinary Item, net -- (0.03) -- (0.04)
Net Income (Loss) Per Share $(0.09) $0.42 $0.91 $0.65
Weighted Average Shares
Outstanding (000's) 159,198 162,367 161,424 143,326
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA - PROPERTY OPERATING RESULTS
(in thousands)
Three Months Ended Nine Months Ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2001 2000 2001 2000
NET REVENUES:
Bellagio (1) $ 233,390 $ 248,007 $ 734,096 $ 314,626
MGM Grand Las Vegas 171,334 178,997 558,314 566,059
The Mirage (1) 144,842 151,210 478,286 199,423
Treasure Island (1) 86,274 94,194 276,940 122,752
New York-New York 53,141 55,342 161,952 163,184
Primm Properties 54,702 63,084 159,756 186,539
Golden Nugget Las Vegas(1) 40,081 42,412 133,209 56,006
Golden Nugget Laughlin (1) 11,463 10,844 35,722 14,307
MGM Grand Detroit 87,351 103,496 264,040 302,580
Beau Rivage (1) 83,312 80,986 227,168 106,136
Income from Unconsolidated
Affiliate (1) 8,909 9,014 30,269 11,754
Boardwalk (1) 8,356 -- 26,669
MGM Grand Australia 8,635 9,830 23,428 28,077
MGM Grand South Africa 1,099 1,280 3,488 4,048
$992,889 $1,048,696 $3,113,337 $2,075,491
EBITDA:
Bellagio (1) $ 62,334 $ 86,711 $ 232,166 $ 103,689
MGM Grand Las Vegas 30,779 50,275 138,879 167,339
The Mirage (1) 26,855 40,429 129,068 52,678
Treasure Island (1) 18,541 27,831 77,086 35,582
New York-New York 18,000 24,543 65,276 73,774
Primm Properties 11,245 19,737 34,137 60,411
Golden Nugget Las Vegas (1) 3,981 7,481 25,108 9,700
Golden Nugget Laughlin (1) 82 908 2,909 1,267
MGM Grand Detroit 33,201 43,147 103,928 122,574
Beau Rivage (1) 16,866 20,277 48,561 25,685
Income from Unconsolidated
Affiliate (1) 8,909 9,014 30,269 11,754
Boardwalk (1) 859 -- 4,232
MGM Grand Australia 3,766 4,346 9,877 11,323
MGM Grand South Africa 1,083 1,258 3,442 3,974
$ 236,501 $ 335,957 $ 904,938 $ 679,750
Note:
(1) The Company acquired Mirage Resorts, Incorporated on May 31, 2000,
thereby acquiring the Mirage Properties and 50% ownership in the
Monte Carlo Resort & Casino.
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL DATA - PRO FORMA PROPERTY OPERATING RESULTS
(in thousands)
Three Months Ended Nine Months Ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2001 2000(1) 2001 2000(1)
NET REVENUES:
Bellagio $ 233,390 $ 248,007 $ 734,096 $ 703,742
MGM Grand Las Vegas 171,334 178,997 558,314 566,059
The Mirage 144,842 151,210 478,286 468,173
Treasure Island 86,274 94,194 276,940 280,282
New York-New York 53,141 55,342 161,952 163,184
Primm Properties 54,702 63,084 159,756 186,539
Golden Nugget Las Vegas 40,081 42,412 133,209 132,337
Golden Nugget Laughlin 11,463 10,844 35,722 35,032
MGM Grand Detroit 87,351 103,496 264,040 302,580
Beau Rivage 83,312 80,986 227,168 233,959
Income from Unconsolidated
Affiliate 8,909 9,014 30,269 28,316
Boardwalk 8,356 9,612 26,669 28,895
MGM Grand Australia 8,635 9,830 23,428 28,077
MGM Grand South Africa 1,099 1,280 3,488 4,048
$992,889 $1,058,308 $3,113,337 $3,161,223
EBITDA:
Bellagio $ 62,334 $ 86,711 $ 232,166 $ 206,527
MGM Grand Las Vegas 30,779 50,275 138,879 167,339
The Mirage 26,855 40,429 129,068 131,862
Treasure Island 18,541 27,831 77,086 83,332
New York-New York 18,000 24,543 65,276 73,774
Primm Properties 11,245 19,737 34,137 60,411
Golden Nugget Las Vegas 3,981 7,481 25,108 27,045
Golden Nugget Laughlin 82 908 2,909 5,146
MGM Grand Detroit 33,201 43,147 103,928 122,574
Beau Rivage 16,866 20,277 48,561 55,679
Income from Unconsolidated
Affiliate 8,909 9,014 30,269 28,316
Boardwalk 859 1,559 4,232 5,071
MGM Grand Australia 3,766 4,346 9,877 11,323
MGM Grand South Africa 1,083 1,258 3,442 3,974
$236,501 $ 337,516 $ 904,938 $ 982,373
Note:
(1) Pro forma amounts for 2000 include Mirage results for the period
prior to the acquisition.
MGM MIRAGE AND SUBSIDIARIES
SUPPLEMENTAL STATISTICAL INFORMATION
Three Months Ended Nine Months Ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2001 2000 2001 2000
ROOM STATISTICS:
Bellagio (1) (3,005 Rooms)
Occupancy % 90.0% 98.8% 95.0% 98.7%
Average Daily Rate (ADR) $159 $157 $179 $166
Revenue per Available Room
(REVPAR) $143 $155 $170 $164
MGM Grand Las Vegas
(5,034 Rooms)
Occupancy % 90.0% 99.2% 94.5% 98.5%
Average Daily Rate (ADR) $105 $103 $114 $108
Revenue per Available Room
(REVPAR) $ 94 $103 $108 $106
The Mirage (1) (3,044 Rooms)
Occupancy % 91.7% 98.7% 95.7% 97.8%
Average Daily Rate (ADR) $109 $112 $123 $117
Revenue per Available Room
(REVPAR) $100 $110 $118 $114
Treasure Island (1) (2,885 Rooms)
Occupancy % 92.5% 99.3% 95.6% 99.3%
Average Daily Rate (ADR) $ 88 $ 88 $ 99 $ 94
Revenue per Available Room
(REVPAR) $ 81 $ 88 $ 95 $ 93
New York-New York (2,024 Rooms)
Occupancy % 92.2% 98.6% 96.2% 97.3%
Average Daily Rate (ADR) $ 80 $ 84 $ 87 $ 87
Revenue per Available Room
(REVPAR) $ 73 $ 83 $ 84 $ 85
Primm Properties (2,642 Rooms)
Occupancy % 62.0% 65.3% 60.2% 66.0%
Average Daily Rate (ADR) $ 38 $ 39 $ 38 $ 38
Revenue per Available Room
(REVPAR) $ 24 $ 26 $ 23 $ 25
Golden Nugget Las Vegas (1)
(1,907 Rooms)
Occupancy % 92.0% 98.2% 96.4% 98.0%
Average Daily Rate (ADR) $ 59 $ 54 $ 62 $ 57
Revenue per Available Room
(REVPAR) $ 54 $ 53 $ 60 $ 56
Golden Nugget Laughlin (1)
(300 Rooms)
Occupancy % 92.3% 91.9% 94.0% 93.9%
Average Daily Rate (ADR) $ 34 $ 35 $ 33 $ 36
Revenue per Available Room
(REVPAR) $ 32 $ 32 $ 31 $ 33
Beau Rivage (1) (1,780 Rooms)
Occupancy % 95.2% 98.5% 95.5% 97.5%
Average Daily Rate (ADR) $ 85 $ 89 $ 81 $ 84
Revenue per Available Room
(REVPAR) $ 81 $ 88 $ 78 $ 82
Boardwalk (1) (654 Rooms)
Occupancy % 81.4% 93.3% 87.7% 92.7%
Average Daily Rate (ADR) $ 59 $ 62 $ 65 $ 65
Revenue per Available Room
(REVPAR) $ 48 $ 58 $ 57 $ 61
MGM Grand Australia (96 Rooms)
Occupancy % 91.0% 92.2% 75.0% 81.6%
Average Daily Rate (ADR) $ 62 $ 66 $ 59 $ 64
Revenue per Available Room
(REVPAR) $ 56 $ 61 $ 44 $ 52
Note:
(1) The Company acquired Mirage Resorts, Incorporated on May 31, 2000
thereby acquiring the Mirage Properties and 50% ownership in the
Monte Carlo Resort & Casino. Information for 2000 includes Mirage
results for the period prior to the acquisition.
MGM MIRAGE AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
ASSETS
September 30, December 31,
2001 2000
CURRENT ASSETS:
Cash and cash equivalents $ 133,440 $ 227,968
Accounts receivable, net 145,103 236,650
Inventories 87,756 86,279
Income tax receivable 22,151 11,264
Deferred income taxes 146,677 162,934
Prepaid expenses 81,127 70,549
Total current assets 616,254 795,644
PROPERTY AND EQUIPMENT, NET 8,892,797 9,064,233
OTHER ASSETS:
Investment in unconsolidated affiliates 603,927 522,422
Excess of purchase price over fair market
value of net assets acquired, net 102,922 54,281
Deposits and other assets, net 214,587 298,021
Total other assets 921,436 874,724
$10,430,487 $10,734,601
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 66,038 $ 65,317
Current portion of long-term debt 142,946 521,308
Accrued interest on long-term debt 60,685 77,738
Other accrued liabilities 564,216 568,842
Total current liabilities 833,885 1,233,205
DEFERRED INCOME TAXES 1,737,845 1,730,158
LONG-TERM DEBT 5,331,899 5,348,320
OTHER LONG-TERM OBLIGATIONS 43,910 40,473
STOCKHOLDERS' EQUITY:
Common stock ($.01 par value: authorized
300,000,000 shares, issued 163,578,954
and 163,189,205 shares and outstanding
157,289,254 and 159,130,205 shares) 1,636 1,632
Capital in excess of par value 2,047,779 2,041,820
Treasury stock, at cost
(6,289,700 and 4,059,000 shares) (129,399) (83,683)
Retained earnings 574,083 427,956
Other comprehensive loss (11,151) (5,280)
Total stockholders' equity 2,482,948 2,382,445
$10,430,487 $10,734,601
