|LAS VEGAS, May 10, 1999 - Mirage Resorts (NYSE: MIR)
announced today first quarter earnings of $0.28 per share before charges
associated with preopening and related promotional costs, an increase of
27% over the $0.22 per share earned before an extraordinary loss in the
prior-year period. Total revenues rose 73%, while operating cash flow (EBDIT)
According to the latest statistics available from the Nevada State Gaming
Control Board, gaming revenues on the Las Vegas Strip increased 21% in
the first two months of the quarter. The company's casinos located
on the Strip accounted for 58% of such growth. On an overall basis,
the company's gaming revenues increased by 64% in the first quarter while
its gross non-casino revenues increased 82%.
The growth in revenues and operating profit was attributable primarily
to the company's Bellagio resort, which opened on October 15, 1998 and
generated $282 million of total revenues in the first quarter. Mirage
Resorts believes this to be the highest quarterly revenues of any casino
in Nevada history. Its non-casino revenues in the quarter of $145 million
are thought to be the highest such revenues of any resort in history.
The company's Beau Rivage resort on the Mississippi Gulf Coast also opened
successfully on March 16, 1999 and contributed to the increase in revenues
for the quarter.
Results were also strong at the company's other resorts. The
operating income of such resorts on a combined basis, excluding the new
properties, increased by 2% in the face of the new competition and despite
an ongoing room refurbishment program at the company's Treasure Island
resort. Hotel occupancy of standard rooms at such resorts increased
slightly, from 98.1% to 98.4%, and their average room rate increased by
On a company-wide basis, occupancy of standard guestrooms was 98.1%
in both periods. The average rate for standard guestrooms increased
from $89 to $110, with Bellagio's higher room rates accounting for most
of this increase.
The company-wide table games win percentage was 20.2%, versus 19.8%.
Management believes both numbers to be relatively normal. Over the
past three calendar years, the company-wide win percentage has averaged
The company expensed substantial preopening and related promotional
costs during the quarter. There were two aspects to this. First,
a recently issued accounting pronouncement now requires preopening costs
to be expensed as incurred. The company had previously capitalized
such costs and amortized them over the 60-day period following the opening
of the related resort. At December 31, 1998 the company had $47.0
million of such capitalized costs,
including $24.7 million related to Beau Rivage and $22.3 million related
to development of its planned Atlantic City facilities. This resulted
in a cumulative effect related to the accounting change in the quarter
of $30.6 million, net of the applicable income tax benefit. Second,
the company incurred $31.5 million of additional preopening and related
promotional expense in the quarter, largely in connection with hiring and
training Beau Rivage's workforce. As a result of these factors and
an increase in interest expense, the company's net income for the quarter
was $1.5 million ($0.01 per share).
The company's interest cost rose significantly in the quarter due to
higher debt levels related to the investment in the new resorts.
The opening of such resorts also resulted in a lesser proportion of the
company's interest cost being capitalized during the 1999 first quarter.
This press release contains forward-looking statements which are subject
to change. Actual results may differ materially from those described
in any forward-looking statement. Additional information concerning
potential factors that could affect the company's future results is included
in the company's Annual Report on Form 10-K for the year ended December
31, 1998. This statement is provided as permitted by the Private Securities
Reform Act of 1995.