MGM Mirage Reports Loss for Q4, Full Year 2009

MGM Mirage reported a fourth quarter diluted loss per share of $0.98, which includes the impact of a pre-tax non-cash impairment charge totaling $548 million, or $0.73 loss per diluted share net of tax, related to the company’s undeveloped land holdings in Atlantic City.

For the same quarter in 2008, MGM Mirage reported a diluted loss per share of $4.15, which included a non-cash goodwill and indefinite-lived intangible asset impairment charge of $1.2 billion, or $4.25 per diluted share net of tax, and a gain on repurchased debt of $87 million or $0.21 per diluted share net of tax.

For the fourth quarter net revenue decreased 6 percent to $1.5 billion, compared to a 9 percent year-over-year decrease in the third quarter of 2009; casino revenue decreased 7 percent, partially offset by strong baccarat results during the quarter with baccarat volume up 44 percent; Las Vegas Strip revenue per available room (RevPAR) decreased 16 percent compared to the prior year quarter versus a 23 percent year-over-year decrease in the third quarter of 2009; and adjusted property EBITDA was $307 million, or down 8 percent.

In other key results reported by the company, MGM Grand Macau earned operating income of $22 million and had depreciation expense of $24 million during the fourth quarter of 2009, compared to an operating loss of $2 million and depreciation expense of $19 million in the same quarter in 2008. CityCenter opened in December 2009 with Aria, the centerpiece casino resort, earning operating income of $7 million in 15 days of operations, with depreciation and amortization of $9 million.

In other results from the fourth quarter, casino revenue declined 7 percent, with table games revenue down 7 percent and slots revenue down 6 percent. The company’s table games volume was up 2 percent in the quarter, including a 44 percent increase in baccarat volume. The overall table games hold percentage was near the mid-point of the company’s normal 18 percent to 22 percent range in both the current and prior year.

Room revenue decreased 14 percent while Las Vegas Strip RevPAR decreased 16 percent. Anticipated weakness in convention traffic led to lower room rates; however, increased leisure and casino business allowed the company to maintain occupancy in line with prior periods.

Occupancy was 86 percent in the fourth quarter, compared to 85 percent in the same quarter in 2008. But average daily rate (ADR) was $111 in the fourth quarter, compared to $135 in the same quarter the previous year. RevPAR in the fourth quarter was $95, compared to $114 in the same 2008 quarter.

Income from unconsolidated affiliates increased to $25 million from $7 million in the prior year fourth quarter, primarily as a result of continued year-over-year improvement in operating results at MGM Grand Macau. MGM Grand Macau earned operating income of $22 million during the fourth quarter compared to an operating loss of $2 million for the same quarter in the prior year. Included in income from unconsolidated affiliates is a $2 million loss related to the company’s share of CityCenter’s consolidated operating results in the fourth quarter 2009 compared to a $9 million loss for the same quarter in 2008.

Operating loss for the fourth quarter was $487 million, which included the Atlantic City land impairment charge recorded during the quarter. Adjusted Property EBITDA was $307 million, down 8 percent excluding results for TI from the prior year fourth quarter, with a margin of 21 percent in the current year quarter compared to 22 percent in the prior year fourth quarter. Adjusted EBITDA was $256 million, down 15 percent from the 2008 fourth quarter excluding results for TI.

For the full year 2009, MGM Mirage’s net revenues decreased 13 percent to $5.9 billion. Las Vegas Strip RevPAR decreased 25 percent for the full year compared to 2008, with quarter-over-quarter percentage decreases in RevPAR improving sequentially throughout the year. Adjusted property EBITDA was $1.3 billion for the full year of 2009. EPS from continuing operations for the full year was a loss of $3.41 per diluted share compared to a loss of $3.06 per diluted share in 2008.