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Mgm Resorts International Reports Third Quarter Financial Results

The following excerpt is from the company's SEC filing.

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 profi ts 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:

Net revenue at the Companys wholly owned domestic resorts was $1.6 billion, an increase of 4% compared to the prior year quarter;

Rooms revenue at wholly owned domestic resorts increased 8% with an 8% increase in REVPAR

at the Companys Las Vegas Strip resorts compared to the prior year quarter;

The Companys wholly owned domestic resorts earned Adjusted Property EBITDA

of $411 million, a 25% increase compared to the prior year quarter;

Adjusted Property EBITDA margin for wholly owned domestic resorts increased 435 basis points to 25.1% in the current year quarter;

MGM Chinas net revenue was $529 million and Adjusted EBITDA was $128 million, decreases of 33% and 40%, respectively, compared to the prior year quarter; and

CityCenters Adjusted EBITDA related to resort operations was $76 million, a 20% increase compared to the prior year quarter.

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):

Three months ended September 30,

Preopening and start-up expenses

Property transactions, net

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 Companys strategic review totaling $18 million.

Page 1 of 13

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 Companys Las Vegas Strip resorts:

Occupancy %

Average Daily Rate (ADR)

Revenue per Available Room (REVPAR)

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 Companys 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 earned net revenue of $529 million, a 33% decrease compared to the prior year quarter;

Main floor table games revenue decreased 30% compared to the prior year quarter;

VIP table games revenue decreased 39% due to a decrease in VIP table games turnover of 55% compared to the prior year quarter, while hold percentage increased to 3.7% in the current year quarter compared to 2.7% in the prior year quarter;

MGM Chinas Adjusted EBITDA was $128 million, a decrease of 40% compared to the prior year quarter, including $9 million of license fee expense in the current year quarter compared to $12 million in the prior year quarter;

Adjusted EBITDA margin declined 268 basis points to 24.2% in the current year quarter; and

Operating income was $63 million compared to $140 million in the prior year quarter.

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 Companys share of income from unconsolidated affiliates:

(In thousands)

Borgata

31,784

22,397

16,459

(6,719

57,350

23,003

The Companys 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 CityCenters third quarter results):

Net revenue from resort operations increased by 4% to $293 million compared to $280 million in the prior year quarter;

Adjusted EBITDA from resort operations was $76 million, an increase of 20% compared to the prior year quarter;

Arias table games hold percentage was 22.6% compared to 21.7% in the prior year quarter;

Slots revenue at Aria increased 5% compared to the prior year quarter;

Arias REVPAR was $207, a 7% increase compared to the prior year quarter;

Vdara reported Adjusted EBITDA of $7 million, a 30% increase compared to the prior year quarter, led by a 7% increase in REVPAR; and

Crystals reported Adjusted EBITDA of $11 million, an increase of 2% from the prior year quarter.

CityCenters 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...


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