LAS VEGAS, Aug. 4, 2015 /PRNewswire/ -- MGM Resorts International (NYSE: MGM) today reported financial results for the quarter ended June 30, 2015.

"We are continuing to drive increased profits at MGM Resorts with second quarter wholly owned Adjusted Property EBITDA up 11% driven by growth at our Las Vegas and regional resorts. These resorts are continuing to gain operating momentum while we continue to make significant progress on our development pipeline in Cotai, Maryland, and Massachusetts," said Jim Murren, Chairman & CEO of MGM Resorts International. "We are focused on positioning the Company for future growth, and are pleased to announce the implementation of our Profit Growth Plan to further enhance our business practices and profitability."

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

• Net revenue at the Company's wholly owned domestic resorts was $1.7 billion, an increase of 4% compared to the prior year quarter;
• Rooms revenue at wholly owned domestic resorts increased 6% with a 6% increase in REVPAR(1) at the Company's Las Vegas Strip resorts compared to the prior year quarter;
• The Company's wholly owned domestic resorts earned Adjusted Property EBITDA(2) of $458 million, an 11% increase compared to the prior year quarter;
• Adjusted Property EBITDA margin for wholly owned domestic resorts increased 158 basis points to 26.9% in the current year quarter;
• MGM China's net revenue was $557 million and Adjusted EBITDA was $132 million, decreases of 33% and 37%, respectively, compared to the prior year quarter; and
• CityCenter's Adjusted EBITDA related to resort operations was $84 million, a 4% increase compared to the prior year quarter.

Second Quarter Consolidated Results

Diluted earnings per share for the second quarter of 2015 was $0.17 compared to diluted earnings per share of $0.22 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):

The prior year second quarter results were affected by a non-cash impairment charge of $29 million related to the Company's joint venture investment in Grand Victoria. Additionally, the prior 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.

Wholly Owned Domestic Resorts

Casino revenue related to wholly owned domestic resorts increased 5% compared to the prior year quarter due to a 4% increase in table games volume and a 7% increase in slots volume. Table games hold percentage in the second quarter of 2015 was 21.4% compared to 21.3% in the prior year quarter.

Rooms revenue increased 6% compared to the prior year quarter 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 grew 3% as a result of increased catering business related to a higher convention room mix in the quarter, the opening of several new outlets and closed circuit viewing parties for the Mayweather vs. Pacquiao fight. Entertainment revenue decreased 3% due to a decrease in the number of in-house shows compared to the prior year quarter. Operating income for the Company's wholly owned domestic resorts increased 15% to $338 million compared to $294 million in the prior year quarter.

Profit Growth Plan

The Company has announced the Profit Growth Plan today for sustained growth and margin enhancement. The Profit Growth Plan's initiatives are focused on the following:

• Improve business process – continue to optimize MGM's scale for greater efficiency and lower cost throughout our business; and
• Drive revenue generation – identify areas of opportunity to organically drive incremental revenue growth.

The Profit Growth Plan includes a significant number of opportunities to enhance our business operations. The plan is expected to result in $300 million of annualized Adjusted EBITDA benefit. The Profit Growth Plan commenced in July 2015 and it is expected to begin to show results as early as the second half of 2015 and be fully realized by the end of 2017.

"The Profit Growth Plan represents a further advancement in how we conduct business at MGM Resorts, with greater focus on streamlining business process, leveraging our size and scale to reduce costs and drive market share, and innovations in customer service. This plan will redefine the way we operate in critical areas and position MGM Resorts for future growth, for the benefit of our Company as a whole and our shareholders," said Mr. Murren.

MGM China

On August 4, 2015, MGM China's Board of Directors announced an interim dividend of $77 million, which will be paid to shareholders of record as of August 24, 2015 and distributed on or about August 31, 2015. MGM Resorts International will receive $39 million, representing its 51% share of the dividend.

Key second quarter results for MGM China include the following:

• MGM China earned net revenue of $557 million, a 33% decrease compared to the prior year quarter;
• Main floor table games revenue decreased 23% compared to the prior year quarter;
• VIP table games revenue decreased 43% due to a decrease in VIP table games turnover of 54% compared to the prior year quarter, while hold percentage increased to 3.2% in the current year quarter compared to 2.7% in the prior year quarter;
• MGM China's Adjusted EBITDA was $132 million, a decrease of 37% compared to the prior year quarter, including $10 million of license fee expense in the current year quarter compared to $14 million in the prior year quarter;
• Adjusted EBITDA margin declined 168 basis points to 23.7% in the current year quarter; and
• Operating income was $58 million compared to $134 million in the prior year quarter.

MGM China paid a $120 million final dividend in June 2015, of which $61 million was distributed to MGM Resorts and $59 million was distributed to noncontrolling interests.

Income from Unconsolidated Affiliates

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

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

• Net revenue from resort operations increased by 3% to $312 million compared to $304 million in the prior year quarter;
• Adjusted EBITDA from resort operations was $84 million, an increase of 4% compared to the prior year quarter;
• Aria's table games hold percentage was 21.5% compared to 23.4% in the prior year quarter;
• Slots revenue at Aria decreased 4% compared to the prior year quarter;
• Aria's REVPAR was a record $222, an 8% increase compared to the prior year quarter;
• Vdara reported record second quarter Adjusted EBITDA of $8 million, a 10% increase compared to the prior year quarter, led by record REVPAR of $179; and
• Crystals reported Adjusted EBITDA of $12 million, an increase of 5% from the prior year quarter.

CityCenter's operating income of $22 million in the current year quarter represents a $47 million increase from the prior year quarter, benefiting from a decrease in depreciation expense of $24 million. In addition, property transactions, net was $1 million compared to $16 million in the prior year quarter.

Financial Position

"We continue to focus on improving MGM Resorts' balance sheet, having reduced total debt by $2.3 billion since the beginning of the year, including the repayment of the $875 million senior notes that matured in July," said Dan D'Arrigo, Executive Vice President, CFO and Treasurer of MGM Resorts International. "During the second quarter, MGM China strengthened its financial flexibility by increasing its senior credit facility from $2 billion to $3 billion. This facility, along with MGM China's free cash flow, has allowed it to continue to invest in its existing operations as well as future growth opportunities, while at the same time returning value to its shareholders."

The Company's cash and cash equivalents and cash deposits at June 30, 2015 was $2.5 billion, which included $522 million at MGM China. At June 30, 2015, the Company had $2.7 billion of borrowings outstanding under its $3.9 billion senior secured credit facility and $1.2 billion outstanding under the $3.0 billion MGM China credit facility. On April 15, 2015, 99.97% of the Company's $1.45 billion 4.25% convertible senior notes were converted into approximately 72 million shares of the Company's common stock, net of shares received upon settlement of the capped call transactions entered into in connection with the issuance of such notes. In June 2015, MGM China amended and restated its senior credit facility which increased its total capacity to $3.0 billion and extended the term for an eighteen month period ending in April 2019.

Conference Call Details

MGM Resorts International will host a conference call at 11:00 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 0575269. A replay of the call will be available through Tuesday, August 11, 2015. The replay may be accessed by dialing 1-877-344-7529 or 1-412-317-0088. The replay access code is 10069000. 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, the expected results of the Profit Growth Plan and dividends the Company will receive from MGM China. 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.

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SOURCE MGM Resorts International