Company Results

MGM Resorts International Reports Fourth Quarter and Full Year 2013 Results

Loss per share for the fourth quarter of 2013 was $(0.08), an improvement compared to a loss per share of ($2.50) in the prior year fourth quarter.

MGM Resorts International (NYSE: MGM) today reported financial results for the fourth quarter and full year ended December 31, 2013.  Loss per share for the fourth quarter of 2013 was $(0.08), an improvement compared to a loss per share of ($2.50) in the prior year fourth quarter.  Comparability of the current and prior year consolidated results was affected by certain items discussed further below.

"In 2013 we achieved our best operating performance since the recession.  The fourth quarter finished strong, with 6% Adjusted EBITDA growth at our wholly owned domestic resorts and record quarters at MGM China and CityCenter," said Jim Murren, Chairman and CEO.  "In 2014, we expect our Las Vegas properties to continue to improve, driven by a strong convention calendar and the completion of several capital initiatives on the Las Vegas Strip. In Macau, we continue to yield our existing resort and are well underway in more than doubling our footprint in the world's largest gaming market with MGM Cotai set to open early 2016."

Key results for the fourth quarter of 2013 include the following:

  • Consolidated net revenue was $2.5 billion, a 10% increase over the prior year fourth quarter;
  • Consolidated casino revenue increased 13% compared to the prior year quarter;
  • Rooms revenue at wholly owned domestic resorts increased 3% with a 1% increase in REVPAR(1) at the Company's Las Vegas Strip resorts;
  • Adjusted Property EBITDA(2) was $609 million compared to $505 million, a 21% increase compared to the prior year quarter;
  • The Company's wholly owned domestic resorts earned Adjusted Property EBITDA of $356 million, a 6% increase compared to the prior year quarter;
  • MGM China's Adjusted EBITDA was a record $238 million, a 35% increase compared to the prior year quarter;
  • CityCenter's Adjusted EBITDA related to resort operations was a record $93 million, a 36% increase compared to the prior year quarter; and
  • Consolidated operating income was $330 million compared to an operating loss of $425 million, which included significant impairment charges in the fourth quarter of 2012.

Certain Items Affecting Fourth 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):

Three months ended December 31,

2013

2012

Property transactions, net

$

$

(0.78)

Non-operating items from unconsolidated affiliates:

    CityCenter loss on retirement of long-term debt

(0.09)

    Silver Legacy gain on retirement of long-term debt

0.02

Other non-operating expense:

    SJTA bond impairment

(0.06)

    Loss on retirement of long-term debt

(0.67)

Tax adjustments

(0.12)

(0.76)

 

In the fourth quarter of 2013, non-operating items from unconsolidated affiliates included $70 million related to the Company's share of a loss on retirement of long-term debt in connection with CityCenter's early redemption of its first and second lien senior secured notes in October 2013 and $12 million related to the Company's share of a gain on retirement of long-term debt related to Silver Legacy's early redemption of its second lien notes in December 2013.

In the fourth quarter of 2012, property transactions, net included an impairment charge of $65 million related to the Company's investment in Borgata, a $366 million impairment charge related to certain of the Company's land holdings on the north end of the Las Vegas Strip, and a $167 million impairment charge related to the Company's land holdings in Atlantic City. Other non-operating expense in the fourth quarter of 2012 included a $47 million write-off related to the Company's holding of South Jersey Transportation Authority ("SJTA") road development special revenue bonds and a loss of $505 million related to the Company'sDecember 2012 refinancing transactions.

The current year fourth quarter income tax provision was affected by $57 million of tax adjustments, primarily related to valuation allowance on U.S. deferred tax assets, including a valuation allowance related to net tax benefit reflected in other items in the above table, compared to $372 million in the prior year fourth quarter.

In addition, corporate expense in the fourth quarter of 2013 included $8 million associated with the Company's development efforts in Maryland and Massachusetts compared to $34 million during the 2012 fourth quarter. Corporate expense in the current year quarter also reflected a $4 million reduction in accrued payroll liabilities due to a change in the Company's employee paid time off policy.

Wholly Owned Domestic Resorts

Casino revenue related to wholly owned domestic resorts decreased 2% compared to the prior year quarter. The overall table games hold percentage in the fourth quarter of 2013 was 20.2% compared to 21.9% for the prior year quarter. Slots revenue increased 3% compared to the prior year quarter at the Company's Las Vegas Strip resorts, offset by decreased slots revenue at the Company's other wholly owned domestic resorts.

Rooms revenue increased 3% with Las Vegas Strip REVPAR up 1%.  The following table shows key hotel statistics for the Company's Las Vegas Strip resorts:

Three months ended December 31,

2013

2012

Occupancy %

85%

86%

Average Daily Rate (ADR)

$

133

$

130

Revenue per Available Room (REVPAR)

$

114

$

112

 

Operating income for the Company's wholly owned domestic resorts increased 16% for the fourth quarter of 2013 compared to the prior year quarter and benefited from a decrease of $10 million in property transactions, net and an $8 million reduction in accrued payroll liabilities due to a change in the Company's employee paid time off policy.

MGM China

On February 19, 2014, as part of its regular dividend policy, MGM China's Board of Directors announced it will recommend a final dividend for 2013 of $128 million to MGM China shareholders subject to approval at the 2014 annual shareholders meeting. If approved, MGM Resorts International will receive $65 million, its 51% share of this dividend. In addition, MGM China's Board of Directors announced a special dividend of $500 million, which will be paid to shareholders of record as of March 10, 2014 and distributed on or about March 17, 2014.  MGM Resorts International will receive $255 million, its 51% share of the special dividend.

Key fourth quarter results for MGM China include the following:

  • MGM China earned net revenue of $926 million, a 27% increase compared to the prior year quarter;
  • VIP table games turnover increased 32% from the prior year quarter, while hold percentage was 2.8% in the current year quarter compared to 2.9% in the prior year quarter;
  • Main floor table games revenue and slots revenue increased 18% and 4% compared to the prior year quarter, respectively, both primarily due to strong increases in volume; and
  • MGM China's Adjusted EBITDA was $238 million, a 35% increase compared to the prior year quarter and operating income was $162 million compared to $83 million in the prior year quarter.

The MGM Cotai development continues to be on schedule to open in early 2016. MGM China spent approximately $204 million in 2013 on the MGM Cotai development. We expect the project cost will be approximately $2.9 billion, excluding development fees eliminated in consolidation, land costs and capitalized interest.

Income (Loss) from Unconsolidated Affiliates

The following table summarizes information related to the Company's share of income (loss) from unconsolidated affiliates:

Three months ended December 31,

2013

2012

(In thousands)

CityCenter

$

12,037

$

(7,461)

Other

4,069

6,345

$

16,106

$

(1,116)

 

Results for CityCenter Holdings, LLC for the fourth quarter of 2013 include the following (see schedules accompanying this release for further detail on CityCenter's fourth quarter results):

  • Net revenue from resort operations increased by 11% to $301 million compared to $272 million in the prior year quarter;
  • Adjusted EBITDA from resort operations was $93 million, an increase of 36% compared to the prior year quarter;
  • Aria's table games hold percentage was 26.0% in the current year quarter compared to 23.9% in the prior year quarter; and
  • Aria's occupancy percentage was 85% and its ADR was $212, resulting in REVPAR of $181, a  4% increase compared to the prior year quarter;

CityCenter's operating income increased to $26 million for the fourth quarter of 2013 and included $26 million of income related to property transactions, net, primarily related to a $33 million gain associated with the settlement of insurance claims for errors and omissions with respect to the original construction of CityCenter. The net impact of CityCenter's property transactions to the Company's income from unconsolidated affiliates for the fourth quarter was not significant due to equity method accounting adjustments.

In addition, CityCenter entered into a $1.775 billion senior secured credit facility in the fourth quarter of 2013 and redeemed its 7.625% senior secured first lien notes and 10.75% senior secured second lien PIK toggle notes. CityCenter recognized a loss on early retirement of long-term debt of $140 million in connection with these transactions.

Full Year 2013 Results

Net revenue for 2013 was $9.8 billion, a 7% increase over 2012, and Adjusted Property EBITDA increased 18% compared to the prior year. Net revenue from wholly owned domestic resorts was $6.1 billion, a 2% increase compared to 2012.  Adjusted Property EBITDA from wholly owned domestic resorts increased 9% to $1.4 billion for 2013.

MGM China reported record results for 2013 with net revenues of $3.3 billion and Adjusted EBITDA of $814 million.  Excluding branding fees of $36 million in 2013 and $30 million in 2012, Adjusted EBITDA increased by 20% year over year. 

CityCenter reported net revenue from resort operations of $1.2 billion, a 10% increase compared to the prior year, and Adjusted EBITDA related to resort operations of $316 million, a 37% increase compared to the prior year.

Loss per share attributable to MGM Resorts International for 2013 was $(0.32) compared to loss per share of ($3.62) in 2012. The following table lists items that affect the comparability of the current year and prior year annual results (approximate EPS impact shown, net of tax, per share; negative amounts represent charges to income):

Year ended December 31,

2013

2012

Preopening and start-up expenses

$

(0.02)

$

Property transactions, net

(0.17)

(0.91)

Income (loss) from unconsolidated affiliates:

    CityCenter residential impairment

(0.02)

    CityCenter Harmon demolition cost

(0.02)

Non-operating items from unconsolidated affiliates:

    CityCenter loss on retirement of long-term debt

(0.09)

(0.01)

    Silver Legacy gain on retirement of long-term debt

0.02

Other non-operating expense:

    SJTA bond impairment

(0.06)

    Loss on retirement of long-term debt

(0.74)

Tax adjustments

(0.30)

(1.17)

 

Financial Position

"We accomplished many financial goals in 2013.  We reduced debt and by issuing the lowest interest rate senior unsecured notes in the history of our Company, we pre-funded our only scheduled 2014 debt maturity. With CityCenter's debt now refinanced, we have lowered its annual cash interest expense by approximately $80 million, further enhancing CityCenter's future cash flow potential," said Dan D'Arrigo, Executive Vice President, CFO and Treasurer.  "We remain focused on further deleveraging our balance sheet in 2014 by maximizing operating cash flows and from anticipated dividends received from MGM China."

The Company's cash balance at December 31, 2013 was $1.8 billion, which included $1.0 billion at MGM China.  At December 31, 2013 the Company had $2.8 billion of borrowings outstanding under its $4.0 billion senior credit facility and $553 millionoutstanding under the $2.0 billion MGM China credit facility.

About MGM Resorts International

MGM Resorts International (NYSE: MGM) is one of the world's leading global hospitality companies, operating a peerless portfolio of destination resort brands, including Bellagio, MGM Grand, Mandalay Bay and The Mirage.  In addition to its 51% interest in MGM China Holdings, Limited, which owns the MGM Macau resort and casino and is in the process of developing a gaming resort in Cotai, the Company has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in three other properties in Nevada and Illinois. One of those investments is CityCenter, an unprecedented urban resort destination on the Las Vegas Strip featuring its centerpiece ARIA Resort & Casino. Leveraging MGM Resorts' unmatched amenities, the M life loyalty program delivers one-of-a-kind experiences, insider privileges and personalized rewards for guests at the Company's renowned properties nationwide. Through its hospitality management subsidiary, the Company holds a growing number of development and management agreements for casino and non-casino resort projects around the world. MGM Resorts International supports responsible gaming and has implemented the American Gaming Association's Code of Conduct for Responsible Gaming at its gaming properties. The Company has been honored with numerous awards and recognitions for its industry-leading Diversity Initiative, its community philanthropy programs and the Company's commitment to sustainable development and operations. 

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

December 31,

December 31,

2013

2012

2013

2012

Revenues:

Casino

$

1,570,905

$

1,390,941

$

5,875,782

$

5,319,489

Rooms

394,283

383,329

1,646,303

1,588,770

Food and beverage

348,465

346,286

1,469,582

1,472,382

Entertainment

142,257

119,469

522,911

483,946

Retail

44,996

47,017

194,602

196,938

Other

115,429

108,957

490,349

482,547

Reimbursed costs

89,649

88,438

364,664

357,597

2,705,984

2,484,437

10,564,193

9,901,669

Less: Promotional allowances

(192,771)

(189,926)

(754,530)

(740,825)

2,513,213

2,294,511

9,809,663

9,160,844

Expenses:

Casino

979,620

876,995

3,684,810

3,396,752

Rooms

122,509

123,258

516,605

507,856

Food and beverage

199,312

200,737

844,431

844,629

Entertainment

104,648

86,699

386,252

356,934

Retail

25,365

26,844

107,249

112,732

Other

84,072

81,109

354,705

344,782

Reimbursed costs

89,649

88,438

364,664

357,597

General and administrative

317,378

307,901

1,278,450

1,239,774

Corporate expense

63,567

87,215

216,745

235,007

Preopening and start-up expenses 

3,383

1,362

13,314

2,127

Property transactions, net

2,012

610,862

124,761

708,049

Depreciation and amortization

207,474

226,831

849,225

927,697

2,198,989

2,718,251

8,741,211

9,033,936

Income (loss) from unconsolidated affiliates

16,106

(1,116)

43,060

(46,382)

Operating income (loss)

330,330

(424,856)

1,111,512

80,526

Non-operating income (expense):

Interest expense, net of amounts capitalized

(208,461)

(279,922)

(857,347)

(1,116,358)

Non-operating items from unconsolidated affiliates

(73,722)

(21,417)

(157,338)

(90,020)

Other, net

(2,153)

(552,843)

(9,062)

(608,361)

(284,336)

(854,182)

(1,023,747)

(1,814,739)

Income (loss) before income taxes

45,994

(1,279,038)

87,765

(1,734,213)

Benefit (provision) for income taxes

(5,117)

90,541

(31,263)

117,301

Net income (loss)

40,877

(1,188,497)

56,502

(1,616,912)

Less: Net income attributable to noncontrolling interests

(79,212)

(35,330)

(213,108)

(150,779)

Net loss attributable to MGM Resorts International

$

(38,335)

$

(1,223,827)

$

(156,606)

$

(1,767,691)

Per share of common stock:

Basic:

Net loss attributable to MGM Resorts International

$

(0.08)

$

(2.50)

$

(0.32)

$

(3.62)

Weighted average shares outstanding

490,185

489,211

489,661

488,988

Diluted:

Net loss attributable to MGM Resorts International

$

(0.08)

$

(2.50)

$

(0.32)

$

(3.62)

Weighted average shares outstanding

490,185

489,211

489,661

488,988

 

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

December 31,

December 31,

2013

2012

ASSETS

Current assets:

Cash and cash equivalents

$

1,803,669

$

1,543,509

Accounts receivable, net

488,217

443,677

Inventories

107,907

107,577

Deferred income taxes, net

80,989

179,431

Prepaid expenses and other

238,657

232,898

Total current assets

2,719,439

2,507,092

Property and equipment, net

14,055,212

14,194,652

Other assets:

Investments in and advances to unconsolidated affiliates

1,374,836

1,444,547

Goodwill 

2,897,442

2,902,847

Other intangible assets, net

4,511,861

4,737,833

Other long-term assets, net

551,395

497,767

Total other assets

9,335,534

9,582,994

$

26,110,185

$

26,284,738

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

241,192

$

199,620

Income taxes payable

14,813

1,350

Accrued interest on long-term debt

188,522

206,736

Other accrued liabilities

1,770,801

1,517,965

Total current liabilities

2,215,328

1,925,671

Deferred income taxes 

2,430,414

2,473,889

Long-term debt

13,447,230

13,589,283

Other long-term obligations

141,590

179,879

Stockholders' equity:

Common stock, $.01 par value: authorized 1,000,000,000 shares,

   issued and outstanding 490,360,628 and 489,234,401 shares 

4,904

4,892

Capital in excess of par value

4,156,680

4,132,655

Retained earnings 

57,092

213,698

Accumulated other comprehensive income 

12,503

14,303

Total MGM Resorts International stockholders' equity

4,231,179

4,365,548

Noncontrolling interests

3,644,444

3,750,468

Total stockholders' equity

7,875,623

8,116,016

$

26,110,185

$

26,284,738

 

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

SUPPLEMENTAL DATA - NET REVENUES

(In thousands)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

December 31,

December 31,

2013

2012

2013

2012

Bellagio

$

298,759

$

307,254

$

1,177,402

$

1,147,487

MGM Grand Las Vegas

249,765

258,657

1,038,346

961,246

Mandalay Bay

197,174

161,642

792,282

717,499

The Mirage 

143,347

142,806

576,573

600,194

Luxor

78,503

74,356

325,578

322,342

New York-New York 

66,749

67,838

271,572

274,645

Excalibur

60,879

60,333

260,462

258,141

Monte Carlo

62,539

63,216

262,901

259,004

Circus Circus Las Vegas

45,658

45,158

197,885

203,764

MGM Grand Detroit

130,769

137,045

537,994

568,721

Beau Rivage

81,977

81,076

340,814

346,330

Gold Strike Tunica

36,219

34,764

149,186

150,561

Other resort operations

27,009

27,665

121,649

122,857

  Wholly owned domestic resorts

1,479,347

1,461,810

6,052,644

5,932,791

MGM China

925,751

731,216

3,316,928

2,807,676

Management and other operations

108,115

101,485

440,091

420,377

$

2,513,213

$

2,294,511

$

9,809,663

$

9,160,844

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

SUPPLEMENTAL DATA - ADJUSTED PROPERTY EBITDA

(In thousands)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

December 31,

December 31,

2013

2012

2013

2012

Bellagio

$

99,547

$

94,925

$

358,759

$

302,854

MGM Grand Las Vegas

58,394

65,991

236,132

180,726

Mandalay Bay

36,346

26,156

167,154

146,761

The Mirage 

32,960

25,625

117,424

117,618

Luxor

12,414

11,834

61,561

63,260

New York-New York 

21,400

21,576

89,181

90,505

Excalibur

13,286

13,090

63,502

61,788

Monte Carlo

16,327

14,127

68,941

58,681

Circus Circus Las Vegas

908

2,461

16,609



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