Aug. 08, 2011--With its stock price hammered along with the rest of the stock market Monday, potential further economic turmoil was the elephant in the room during MGM Resorts International's earnings conference call.

Chairman and CEO Jim Murren acknowledged the concern, but said that so far the company hasn't been affected by the United States losing its AAA credit rating, at least according to Standard & Poor's, and the Dow Jones Industrial Average falling in recent days -- including a 5.55 percent drop on Monday.

MGM Resorts' stock wasn't spared in Monday's selloff, falling 8.85 percent to $11.54.

"The weekend was packed here," Murren said, explaining this has been a continuation of business picking up in Las Vegas. For the first time since the economic downturn, MGM Resorts delivered two sequential quarters of operational improvements, he said.

"There has been one discernible change," Murren acknowledged, reporting that at the company gym on Monday morning, "Everyone was watching CNBC and Bloomberg."

"Honestly, we've been looking at this very carefully. We've seen zero impact to our call center. We've had no change in our cancellation activity at all. We're having a very strong August in terms of occupancy and great weekend trends," Murren said. "In the real world watching people come to Las Vegas, there's been no change at all."

Earlier Monday, MGM Resorts posted a hefty second quarter profit thanks to a one-time gain related to its acquiring a controlling stake in its Macau subsidiary.

The casino operator earned $3.45 billion or $6.22 per share vs. a loss in the year-ago quarter of $883 million or $2 per share.

The 2011 results included a gain of $3.496 billion from the Macau initial public offering transaction. The 2010 results were affected by a $1.12 billion charge for the impairment of the company's interest in the CityCenter joint venture.

Net revenue of $1.8 billion in the latest quarter was up from $1.547 billion, thanks in part to the deal in China and from stronger business in Las Vegas leading to higher hotel room rates.

The company said the average daily rate for its Strip resorts was $126, up from $115.

These room rate trends compare to those reported earlier for the second quarter by Wynn Resorts Ltd. and Las Vegas Sands Corp.

At Wynn Las Vegas and its sister property Encore, the average rate in the quarter was $240, up from $197 in 2010's second quarter.

Las Vegas Sands, in the meantime, said the average rate at the Venetian and the Palazzo in Las Vegas was $200, up from $192.

For MGM Resorts International, factoring out many of the one-time items led to Adjusted EBITDA of $366 million in the 2011 second quarter, a 51 percent increase from $243 million in the 2010 quarter.

EBITDA -- earnings before interest, taxes, depreciation and amortization -- is a key measure of profitability and MGM Resorts on Monday attributed the increase to "strong performances at the company's Las Vegas resorts and MGM Macau."

"We have shown growth in year over year cash flows throughout the first half and expect those trends will continue. We believe the foundation of the Las Vegas recovery is solid and our business is building," Murren said in a statement. "MGM Macau had another record quarter and the acquisition of a controlling interest in MGM China marks an important step in expanding our global operations and profitability."

Murren told analysts on a conference call that EBITDA would have come in at $422 million, but was reduced by a low hold percentage in which certain casinos played unlucky; the Gold Strike property in Tunica, Miss., being temporarily closed by flooding and CityCenter writing down the value of its residential condominium inventory.

Murren said hotel room bookings and projected revenue looked strong for the rest of the year in Las Vegas.

"We're seeing great occupancy," he said.

MGM Resorts' share of CityCenter's loss in the quarter was $32.483 million, down from $55.6 million in the 2010 quarter. With condominium sales described as "slow," MGM Resorts' share of residential inventory impairment charges at CityCenter was $26 million, down from a charge of $29 million in the year-ago quarter.

Having opened in 2009 during the worst recession in memory, CityCenter's nonresidential business continued to pick up steam in the second quarter, with the Aria casino-hotel running at 90 percent occupancy.

CityCenter Holdings LLC, half owned by MGM Resorts, produced net revenue from resort operations of $275 million, up 50 percent from the 2010 quarter. Aria alone generated net revenue of $233 million, up 48 percent, with an average daily rate of $202. The high-end Crystals shopping center contributed EBITDA of $6 million, up from $2 million.

Earlier Monday, New Jersey regulators gave MGM Resorts International another 18 months to sell its stake in the Borgata resort in Atlantic City.

Murren started Monday's conference call with a moment remembering Terry Lanni, the company's former chairman and CEO who died last month.

"Terry was an iconic leader of our company, the community and the industry; and a wonderful man. We're going to miss him very much. He was a personal friend of mine and we wish his family all of our best wishes," Murren said.

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