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MGM Resorts International – ‘8-K’ for 10/29/15 – ‘EX-99.1’

On:  Thursday, 10/29/15, at 7:18am ET   ·   For:  10/29/15   ·   Accession #:  1193125-15-357041   ·   File #:  1-10362

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

10/29/15  MGM Resorts International         8-K:2,9    10/29/15    2:730K                                   Donnelley … Solutions/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                      HTML     14K 
 2: EX-99.1     Miscellaneous Exhibit                               HTML    476K 

Exhibit 99.1

MGM RESORTS INTERNATIONAL REPORTS THIRD QUARTER FINANCIAL RESULTS

Wholly Owned Domestic Resorts Adjusted Property EBITDA Increased 25%

Las Vegas Strip REVPAR Increased 8%

Las Vegas, Nevada, October 29, 2015 — MGM Resorts International (NYSE: MGM) today reported financial results for the quarter ended September 30, 2015.

“Our strong third quarter results exemplify the power of our portfolio of assets and brands as we continue to drive growth in our Las Vegas and regional resorts. Our Profit Growth Plan is beginning to see initial success with the initiatives launched to date, and we expect these efforts to further enhance our already improving profits and margins, as we roll out many more opportunities in the coming months,” said Jim Murren, Chairman & CEO of MGM Resorts International. “We are continuing to make positive strides with respect to our development pipeline and look forward to an exciting 2016 as we anticipate welcoming the new Las Vegas Arena and The Park next spring and both MGM National Harbor and MGM Cotai in late 2016. Our strategic investments are allowing us to solidify our leadership in the marketplace and further position the Company for growth.”

Key results for the third quarter of 2015 include the following:

Third Quarter Consolidated Results

Diluted earnings per share for the third quarter of 2015 was $0.12 compared to a diluted loss per share of $0.04 in the prior year quarter.

The following table lists certain 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):

Corporate expense increased $12 million compared to the prior year quarter, and reflected costs incurred to implement initiatives related to the Profit Growth Plan and costs associated with the Company’s strategic review totaling $18 million.

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Wholly Owned Domestic Resorts

Casino revenue related to wholly owned domestic resorts increased 4% compared to the prior year quarter due primarily to a 2% increase in slots volume. Table games volume decreased 1% and table games hold percentage in the third quarter of 2015 was 20.3% compared to 19.8% in the prior year quarter.

Rooms revenue increased 8% compared to the prior year quarter with Las Vegas Strip REVPAR up 8%. The following table shows key hotel statistics for the Company’s Las Vegas Strip resorts:

Higher convention room mix in the current quarter compared to the prior year quarter resulted in increased catering business which led to a 1% increase in food and beverage revenue. Entertainment revenue decreased 4% due to a decline in the revenue generated from in-house shows compared to the prior year quarter. Operating income for the Company’s wholly owned domestic resorts increased 42% to $290 million compared to $204 million in the prior year quarter. Operating income in the prior year quarter was negatively affected by largely nonrecurring employee benefit expenses as well as the cost and near-term revenue impacts associated with the launch of the Delano and the new Las Vegas Strip-facing food and beverage venues at Monte Carlo.

MGM China

Key third quarter results for MGM China include the following:

MGM China paid a $76 million interim dividend in August 2015, of which $39 million was distributed to MGM Resorts and $37 million was distributed to noncontrolling interests.

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Income from Unconsolidated Affiliates

The following table summarizes information related to the Company’s share of income from unconsolidated affiliates:

The Company’s income from unconsolidated affiliates related to Borgata for the third quarter of 2015 increased 42% compared to the prior year quarter due to record operating results at the property driven by increases in casino revenue.

Results for CityCenter for the third quarter of 2015 include the following (see schedules accompanying this release for further detail on CityCenter’s third quarter results):

CityCenter’s operating income of $12 million in the current year quarter represents a $49 million increase from the prior year quarter, benefiting from an increase in casino revenue and rooms revenue, an $8 million decrease in general and administrative expense related to legal and professional fees and a decrease in depreciation expense of $27 million as a result of certain furniture and equipment becoming fully depreciated in December 2014. In addition, property transactions, net declined by $4 million compared to the prior year quarter.

Financial Position

“We continue to remain focused on deleveraging our balance sheet through a combination of reducing debt and increasing cash flows,” said Dan D’Arrigo, Executive Vice President, CFO and Treasurer of MGM Resorts International. “We believe that our improving profitability, future dividends from MGM China as well as CityCenter and our other unconsolidated affiliates, along with upcoming development projects, will further allow us to enhance our financial position and provide long-term value to our shareholders.”

The Company’s cash and cash equivalents at September 30, 2015 was $1.8 billion, which included $808 million at MGM China. At September 30, 2015, the Company had $2.7 billion of borrowings outstanding under its $3.9 billion senior secured credit facility and $1.6 billion outstanding under the $3.0 billion MGM China credit facility. In July 2015, the Company repaid its $875 million 6.625% senior notes at maturity with cash on hand.

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Conference Call Details

MGM Resorts International will host a conference call at 8:00 a.m. Eastern Time today which will include a brief discussion of these results followed by a question and answer period. The call will be accessible via the Internet through www.mgmresorts.com under the Investors section or by calling 1-888-317-6003 for domestic callers and 1-412-317-6061 for international callers. The conference call access code is 7547909. A replay of the call will be available through Friday, November 6, 2015. The replay may be accessed by dialing 1-877-344-7529 or 1-412-317-0088. The replay access code is 10075413. The call will be archived at www.mgmresorts.com.

1            REVPAR is hotel revenue per available room.

2            “Adjusted EBITDA” is earnings before interest and other non-operating income (expense), taxes, depreciation and amortization, preopening and start-up expenses and property transactions, net. “Adjusted Property EBITDA” is Adjusted EBITDA before corporate expense and stock compensation expense related to the MGM Resorts stock option plan, which is not allocated to each property. MGM China recognizes stock compensation expense related to its stock compensation plan which is included in the calculation of Adjusted EBITDA for MGM China. Adjusted EBITDA and Adjusted Property EBITDA information is presented solely as a supplemental disclosure to reported GAAP measures because management believes these measures are 1) widely used measures of operating performance in the gaming industry, and 2) a principal basis for valuation of gaming companies.

Management believes that while items excluded from Adjusted EBITDA and Adjusted Property EBITDA may be recurring in nature and should not be disregarded in evaluation of the Company’s earnings performance, it is useful to exclude such items when analyzing current results and trends compared to other periods because these items can vary significantly depending on specific underlying transactions or events that may not be comparable between the periods being presented. Also, management believes excluded items may not relate specifically to current operating trends or be indicative of future results. For example, preopening and start-up expenses will be significantly different in periods when the Company is developing and constructing a major expansion project and will depend on where the current period lies within the development cycle, as well as the size and scope of the project(s). Property transactions, net includes normal recurring disposals, gains and losses on sales of assets related to specific assets within the Company’s resorts, but also includes gains or losses on sales of an entire operating resort or a group of resorts and impairment charges on entire asset groups or investments in unconsolidated affiliates, which may not be comparable period over period.

In addition, capital allocation, tax planning, financing and stock compensation awards are all managed at the corporate level. Therefore, management uses Adjusted Property EBITDA as the primary measure of the Company’s operating resorts’ performance.

Reconciliations of GAAP net income (loss) to Adjusted EBITDA and GAAP operating income (loss) to Adjusted Property EBITDA are included in the financial schedules in this release.

*     *     *

About MGM Resorts International

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 is in the process of developing MGM National Harbor in Maryland and MGM Springfield in Massachusetts. The Company also owns 51 percent of MGM China Holdings Limited, which owns the MGM Macau resort and casino and is developing a gaming resort in Cotai, and 50 percent of CityCenter in Las Vegas, which features ARIA Resort & Casino. For more information about MGM Resorts International, visit the Company’s website at www.mgmresorts.com.

Statements in this release that are not historical facts are forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and/or uncertainties, including those described in the Company’s public filings with the Securities and Exchange Commission. The Company has based forward-looking statements on management’s current expectations and assumptions and not on historical facts. Examples of these statements include, but are not limited to, the Company’s ability to generate future cash flow growth and to execute on future development and other projects, such as the Profit Growth Plan, and the expected results of the Profit Growth Plan. These forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include effects of economic conditions and market conditions in the markets in which the Company operates and competition with other destination travel locations throughout the United States and the world, the design, timing and costs of expansion projects, risks relating to international operations, permits, licenses, financings, approvals and other contingencies in connection with growth in new or existing jurisdictions and additional risks and uncertainties described in the Company’s Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports). In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements.

Page 4 of 13

Page 5 of 13

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Page 6 of 13

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

Page 7 of 13

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

SUPPLEMENTAL DATA - NET REVENUES

(In thousands)

(Unaudited)

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

SUPPLEMENTAL DATA - ADJUSTED PROPERTY EBITDA

(In thousands)

(Unaudited)

Page 8 of 13

MGM RESORTS INTERNATIONAL AND SUBSIDIARIES

RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA AND ADJUSTED EBITDA

(In thousands)

(Unaudited)

Three Months Ended September 30, 2015