Grows to $97.8 million Compared with $74.9 million a Year Ago
|LAS VEGAS, Feb. 23, 2006 - MGM MIRAGE (NYSE: MGM) today reported record
fourth quarter and full year 2005 financial results, highlighted by impressive
revenue growth in all operating areas.
Adjusted earnings from continuing operations per diluted share ("Adjusted
EPS") was $0.35 in 2005, representing the Company's best fourth quarter
performance ever, and an increase of 25% over the $0.28 earned in the 2004
quarter(1,2). The Company continues to benefit from the addition of the
resorts acquired in the Mandalay Resort Group ("Mandalay") merger, as well
as strong operating trends at existing resorts. The fourth quarter results
punctuate a record year for MGM MIRAGE, with full year Adjusted EPS of
$1.62 versus $1.28 in 2004.
Non-gaming revenues also increased significantly, with same-store hotel revenues up 20% and same-store food and beverage revenues up 17%. REVPAR (revenue per available room) at the Company's Las Vegas Strip Resorts increased 8% on both a same-store and pro forma (including Mandalay for both periods) basis.
The top-line growth carried through to the profit line, with same-store property-level EBITDA(4) up 11% to $359 million. Total property-level EBITDA for the quarter was a record $562 million, and property-level EBITDA margins remained solid at 33%.
The Company achieved these impressive financial results in spite of the negative impact of the following items:
For the full year, GAAP diluted earnings per share from continuing operations increased to $1.50 in 2005 from $1.21 in 2004. GAAP diluted earnings per share, including the results of discontinued operations, was $1.50 versus $1.43 in 2004. The 2004 results included pre-tax gains of $74 million on the sale of MGM Grand Australia and $8 million on the sale of the Golden Nugget Subsidiaries, as well as the operations of these resorts prior to their sales.
"2005 was clearly a landmark year for MGM MIRAGE," said Terry Lanni, MGM MIRAGE's Chairman and CEO. "I am particularly impressed by the performance of our entire family of employees, who continue to ensure that our resorts are the finest in the world, as evidenced by the impressive public response and financial returns generated by new restaurants, hotel rooms and nightclubs at our resorts. We look forward to continuing our operating success in 2006, and we are already off to a strong start, as we hosted a record number of guests during the Chinese New Year period and are seeing continued strength in both gaming and non-gaming revenues," Mr. Lanni said.
Fourth Quarter Company Highlights
The following table shows key financial results for the fourth quarter and full year:
Three months ended Year
Except where noted, all references in this release to operating results, including statistical information, exclude the results of Golden Nugget Las Vegas, Golden Nugget Laughlin and MGM Grand Australia for all periods presented. The results of these operations are classified as discontinued operations.
Net revenue in the fourth quarter increased 65% from prior year and 11% on a same-store basis. Hotel results, as well as results in other non-gaming areas, were strong as visitor volumes and the Company's market-leading resort amenities continue to drive revenue growth across all business lines.
Casino revenue increased 39% in the 2005 quarter and 3% on a same-store basis. Slot revenue in the quarter was up an impressive 11% from 2004 on a same-store basis, on top of a 9% year-over-year increase in the 2004 fourth quarter, driven in part by the success of our Players Club loyalty program and targeted marketing events. Bellagio's slot revenue increased 35% to an all- time quarterly record, as the resort continues to benefit from increased volume following the Spa Tower expansion. MGM Grand Las Vegas had its highest ever quarterly slot revenue, up 16% over prior year.
On a same-store basis, table games volume, including baccarat, was up 2%, against a strong prior year comparison, a 14% increase in the 2004 quarter over 2003. These results were driven by several major entertainment events in the quarter, as well as strong New Year's visitation. Table games hold percentages were near the low end of the Company's normal range (18%-22%) for the 2005 period, and were approximately 200 basis points lower than the prior-year quarter (approximately 130 basis points lower on a same-store basis).
Non-casino revenue was up 95% in the quarter and 19% on a same-store basis. Hotel revenue increased 111% (20% on a same-store basis), as market trends and the quality of our resorts continue to lead to increased room rates. The following table shows key hotel statistics for the Company's Las Vegas Strip resorts on a same-store and pro forma basis (pro forma statistics include Mandalay and Monte Carlo for both periods):
Three Months Ended
Pro forma basis:
On a same-store basis, the Company had 11% (160,000) more room nights available on the Las Vegas Strip in the current year period due to the Bellagio expansion and remodeled Skylofts and West Wing rooms at MGM Grand Las Vegas, which are achieving higher rates than before the remodel. The 8% increase in same-store Las Vegas Strip REVPAR comes on top of a 13% year-over-year increase in the 2004 quarter.
Mr. Lanni noted, "As it relates to Mandalay, we have successfully executed on our strategy to increase occupancy at these resorts. This has led not only to strong increases in room revenues, but has driven increased customer volumes at restaurants, entertainment venues and on the gaming floor, and our strategy has clearly led to enhanced financial performance at these resorts."
Food and beverage revenue increased 78% (17% on a same-store basis),
resulting from new restaurants and lounges added since last year, particularly
at MGM Grand Las Vegas and The Mirage, as well as additional volume generated
by the Spa Tower addition at Bellagio.
Property-level EBITDA increased 59% for the quarter (11% on a same-store basis) and the same-store property-level EBITDA margin of 33% was consistent with the 2004 quarter, despite the lower table games hold percentage. Operating income increased 62% over prior year as a result of the trends described above.
Fourth quarter 2005 Adjusted Earnings increased by 25% compared to 2004 due primarily to the higher operating income, offset by higher interest expense as a result of the Mandalay merger. For the fourth quarter of 2005, Adjusted Earnings excluded $7.9 million ($4.1 million, net of tax) of items as follows:
The Company generated significant operating cash flow in the fourth quarter as a result of its positive operating results and the addition of Mandalay. The Company utilized available cash flow to make capital investments in its resorts and development projects as well as repurchase its common stock, without significantly increasing net borrowings. During the fourth quarter, the Company repurchased 3.5 million shares of its common stock for $132 million. Fourth quarter capital investments totaled $323 million, which included expenditures for the theatre for the Beatles/Cirque du Soleil production show at The Mirage, new restaurants and the Jet nightclub at The Mirage, continued design work for Project CityCenter, construction of the permanent casino at MGM Grand Detroit, rebuilding efforts at Beau Rivage, and other routine capital expenditures.
"Our strategy of making targeted capital expenditures in our resorts continues to be validated by our resorts' outstanding financial performance," said Jim Murren, MGM MIRAGE President, CFO and Treasurer. "We will continue to strategically invest in high-return projects that generate increased operating income at our resorts. We will also be making continued investments in key domestic and international growth projects which will enhance our overall growth rate for years to come. Our strong cash flow and superior access to low-cost debt financing will allow us to maintain our financial strength even while growing the company significantly."
The Company expects its eleventh consecutive quarter of increased Las Vegas Strip REVPAR (on a pro forma basis, including Mandalay for both periods), driven in part by increased occupancy, particularly at Mandalay resorts, which will also drive increased revenues in all operating areas.
"Once again, we expect a year-over-year increase in first quarter earnings,
with Adjusted EPS expected to be up almost 30% to approximately $0.55 per
share compared to record first quarter earnings of $0.43 per share last
year," Mr. Murren said. "This is despite the continued closure of Beau
Rivage, which contributed approximately $0.03 per share in the 2005 first
quarter." The Company noted that stock compensation expense of approximately
$0.05 per share will be excluded from Adjusted EPS when first quarter results
MGM MIRAGE (NYSE: MGM), one of the world's leading and most respected hotel and gaming companies, owns and operates 23 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. 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.
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.
|Also See:||MGM Mirage Reports Lower 4th Qtr Net Income of $67.9 million, Down from $91.7 million the Year Earlier / 2004 Most Profitable Year Ever, Driven by Record Operating performances at Bellagio, MGM Grand Las Vegas and Beau Rivage / February 2005|
|MGM Reports 4th Quarter Earnings of $39 million Compared with $23.7 million a Year Ago Despite a Slow New Year's Holiday / Hotel Statistics / Jan 2003|
|Despite a Tough Fourth-quarter, MGM Mirage Revenues Grew to $4.01 billion, up 29% for the Year / Property Operating Results / Jan 2002|