DOW JONES NEWSWIRES
MGM Mirage (MGM) swung to a second-quarter loss amid charges and
falling revenue as the debt-laden casino giant said demand is still
down but it has seen some signs of a pickup in bookings.
The company has been struggling to remain in compliance with its
debt covenants and has been considering selling off properties to
meet looming obligations. In May, it said it would pay back $825.6
million in debt under its senior credit facility after a stock and
bond offering. Those offerings led the company to remove a
bankruptcy concern statement from a filing in June, saying there is
no longer "substantial doubt" about its ability to remain
operational.
Dilution from the stock offering means the company is no longer
controlled by billionaire investor Kirk Kerkorian.
As of June 30, MGM Mirage had about $4.1 billion of borrowings
outstanding and its cash balance was about $411 million.
Chairman and Chief Executive Jim Murren on Monday called it a
"monumental quarter," citing the capital-markets deals and saying
the company saw a more stabilized, though still tough, operating
environment.
MGM Mirage, which has a big presence on the Las Vegas Strip,
posted a loss of $212.6 million, or 60 cents a share, compared with
year-earlier income of $113.1 million, or 40 cents a share. The
latest results included a net 45 cents in write-downs related to
MGM's investments in a convertible note and the redemption of
senior debt to permit its recent note issuances.
Revenue decreased 20% to $1.66 billion.
Analysts surveyed by Thomson Reuters expected a 9-cent loss on
revenue of $1.49 billion.
MGM Mirage, which has 16 casinos and 50% stakes in four others,
said casino revenue fell 12%. Room revenue dropped 29%, continuing
to be hurt by weakness in convention bookings and business travel,
while food and beverage declined 13%.
The company noted that occupancy at its Las Vegas Strip resorts
slid to 94% from 97%. The locale's revenue per available room, a
lodging-industry benchmark, fell 31%. Murren said the company has
seen some signs of improvement in future bookings.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com