MGM Resorts International Reports Second Quarter 2014 Financial Results
August 5, 2014 12:16pm
Consolidated Adjusted EBITDA Increased 8%, Led By 10% Growth In Wholly Owned Domestic Resorts
MGM China Declares $136 Million Dividend
LAS VEGAS, Aug. 5, 2014 -- MGM Resorts International (NYSE: MGM) today reported financial results for the quarter ended June 30, 2014. Diluted earnings per share for the second quarter of 2014 was $0.21 compared to diluted loss per share of $0.19 in the prior year second quarter.
"I am pleased to report another solid quarter of growth at MGM Resorts," said Jim Murren, Chairman and CEO. "Our domestic business was very strong with 12% EBITDA growth in Las Vegas driven by strong performance in both our room and casino segments. CityCenter resort operations continue to improve while in Macau we grew cash flow and margins due to a higher contribution of revenues from our main floor business. These results clearly reflect the success of our investments and strategies in our existing properties, while we are building MGM Cotai and beginning construction on MGM National Harbor."
Key results for the second quarter of 2014 include the following:
Certain Items Affecting Second Quarter Results
The following table lists items that affect the comparability of the current and prior year quarterly results (approximate EPS impact shown, net of tax, per share; negative amounts represent charges to income):
The current year second quarter and prior year second quarter results were affected by non-cash impairment charges of $29 million and $37 million, respectively, related to the Company's joint venture investment in Grand Victoria. In addition, the Company recorded an impairment charge of $45 million in the prior year second quarter related to corporate buildings located on the land underlying the Company's planned Las Vegas arena project, which were removed from service in 2014.
The current year second quarter income tax provision was affected by a $31 million benefit resulting from the settlement of the Company's 2005-2009 IRS audits during the quarter. In addition to the items in the table above, the current year second quarter income tax provision was favorably impacted by a net benefit recorded for foreign tax credits generated by MGM China, while the prior year second quarter income tax provision was unfavorably impacted by a valuation allowance provided on U.S. deferred tax assets.
Wholly Owned Domestic Resorts
Casino revenue related to wholly owned domestic resorts increased 6% compared to the prior year quarter due to an increase in both table games volume and hold percentage. Table games hold percentage in the second quarter of 2014 was 21.3% compared to 18.1% in the prior year quarter. Slots revenue decreased 1% compared to the prior year quarter.
Rooms revenue increased 6% with Las Vegas Strip REVPAR up 6%. The following table shows key hotel statistics for the Company's Las Vegas Strip resorts:
Food and beverage revenue increased 5% as a result of increased convention and banquet business and the opening of several new outlets. Operating income for the Company's wholly owned domestic resorts increased 23% for the second quarter of 2014 compared to the prior year quarter due to a 7% increase in net revenues and improved operating margins.
On August 5, 2014, MGM China's Board of Directors announced a dividend of $136 million, which will be paid to shareholders of record as of August 25, 2014 and distributed on or about September 1, 2014. MGM Resorts International will receive $69 million, representing its 51% share of the dividend.
Key second quarter results for MGM China include the following:
Income from Unconsolidated Affiliates
The following table summarizes information related to the Company's share of income from unconsolidated affiliates:
Results for CityCenter Holdings, LLC for the second quarter of 2014 include the following (see schedules accompanying this release for further detail on CityCenter's second quarter results):
"Over the next year we expect free cash flow growth, dividends from MGM China and the anticipated conversion of $1.45 billion of outstanding convertible notes to dramatically improve our balance sheet," said Dan D'Arrigo, Executive Vice President, CFO and Treasurer. "In July, we capitalized on CityCenter's improved credit profile with under 5x leverage to reduce the annual interest rate on its senior credit facility by 75 basis points. We believe CityCenter is positioned to generate significant free cash flow going forward."
The Company's cash balance at June 30, 2014 was $1.4 billion, which included $658 million at MGM China. At June 30, 2014 the Company had $2.8 billion of borrowings outstanding under its $4.0 billion senior secured credit facility and $554 million outstanding under the $2.0 billion MGM China credit facility.
To view all corresponding tables associated with this release please visit:
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q2 2014 results
MGM Resorts International (NYSE: MGM) is one of the world's leading global hospitality companies, operating a portfolio of destination resort brands including Bellagio, MGM Grand, Mandalay Bay and The Mirage. The Company also owns 51% of MGM China Holdings Limited, which owns the MGM Macau resort and casino and is in the process of developing a gaming resort in Cotai, and 50% of CityCenter in Las Vegas, which features ARIA resort and casino. For more information about MGM Resorts International, visit the Company's website at www.mgmresorts.com.
Contact: Sarah Rogers, Vice President Investor Relations
Contact: for media: Clark Dumont, Senior Vice President of Corporate Communications
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