MGM Mirage Predicts $11 Million First Quarter Operating Loss

MGM Mirage, announcing preliminary expectations of financial results for the first quarter, said it expects a diluted loss per share of approximately 22 cents compared to earnings of 38 cents per share in the prior year first quarter. Net revenue for the first quarter of 2010 is expected to be approximately $1.46 billion.

Operating loss for the first quarter of 2010 is expected to be approximately $11 million (which included the company’s share of the CityCenter residential impairment charge), compared to operating income of $355 million in the 2009 quarter.

The prior year results include the $190 million pre-tax gain on the TI sale as well as $15 million of Monte Carlo business interruption insurance recovery income (recorded as a reduction to general and administrative expense) and $7 million of Monte Carlo property damage insurance recovery income (recorded as property transactions, net).

Adjusted property EBITDA is expected to be approximately $187 million in the 2010 quarter and was negatively impacted by the CityCenter residential impairment charge. Adjusted EBITDA is estimated to be approximately $156 million.

Excluding reimbursed costs revenue mainly related to the company’s management of CityCenter (approximately $93 million in the 2010 first quarter and $14 million in the 2009 first quarter), net revenue is expected to be approximately $1.36 billion, a decrease of 4 percent from 2009. Reimbursed costs revenue represents reimbursement of costs, primarily payroll-related, incurred by the company in connection with the provision of management services.

Adjusted property EBITDA attributable to wholly owned operations is expected to be approximately $267 million in the 2010 quarter, down 19 percent excluding insurance recoveries related to the Monte Carlo fire in the prior year.

Las Vegas Strip RevPAR decreased by 8 percent to $94 for the first quarter of 2010, compared to $103 in the first quarter of 2009, with occupancy of 85 percent and an average daily rate of $111 in the 2010 first quarter.

MGM Grand Macau operating income is expected to be $49 million in the first quarter of 2010, which included depreciation expense of $22 million, a significant improvement compared to an operating loss of $5 million in the 2009 first quarter, which included depreciation expense of $21 million.

CityCenter is expected to report an operating loss of $255 million in the first quarter of 2010, which includes an approximately $171 million non-cash impairment charge related to its residential inventory, depreciation expense of $69 million, and preopening expenses of $6 million. CityCenter results benefited from revenues of $24 million related to forfeited residential deposits. Aria reported an operating loss of $66 million, which included a depreciation expense of $54 million. Occupancy percentage at Aria was 63 percent with an average daily rate of $194.