- The health and safety of our employees, guests, and communities are our top priority
- The Company has proactively reduced its cash outflows to $270 million per month during closures, excluding MGM China and MGP, and is well-positioned given its strong liquidity and recent $750 million senior notes offering
- Sports Betting, Japan and Macau remain priority long-term strategic initiatives
LAS VEGAS, May 5, 2020 — MGM Resorts International (NYSE: MGM) (“MGM Resorts” or the “Company”) today reported financial results for the quarter ended March 31, 2020.
“The year started strong with results ahead of expectations, however the COVID-19 pandemic resulted in the closure of our properties which had a material negative impact on our first quarter results,” said Bill Hornbuckle, Acting CEO and President of MGM Resorts. “It is still premature to predict the opening dates of our domestic properties. In the meantime, we are collaborating with public health officials, experts in epidemiology and biosafety, and both state and federal government to come up with a set of protocols that will help deliver a safe, secure environment for our employees and guests. We are aggressively managing our cash outflows and strengthening our liquidity position to make certain that despite a lack of revenue, we are able to advance our longer term strategic initiatives such as a new integrated resort in Japan, growing our business in Macau, and establishing a leading presence in sports betting and on-line gaming. With premier assets in most of the markets in which we operate, we are confident we will emerge from the crisis in a strong position.”
First Quarter 2020 Financial Highlights:
Consolidated Results
- Consolidated net revenues decreased 29% compared to the prior year quarter to $2.3 billion, primarily driven by the temporary suspension of the Company’s domestic and Macau casino operations and continued travel restrictions which resulted in a 63% decrease in net revenues at MGM China;
- Consolidated operating income increased to $1.3 billion compared to $370 million in the prior year quarter. The current year quarter included a $1.5 billion gain related to the MGM Grand Las Vegas and Mandalay Bay real estate transaction;
- Net income attributable to MGM Resorts of $807 million, including the gain discussed above net of tax, compared to net income attributable to MGM Resorts of $31 million in the prior year quarter;
- Diluted earnings per share of $1.64 in the current quarter compared to diluted earnings per share of $0.05 in the prior year quarter;
- Adjusted diluted earnings per share (“Adjusted EPS”)(1) was a loss per share of $0.45 in the current quarter compared to Adjusted EPS of $0.14 in the prior year quarter; and
- Consolidated Adjusted EBITDAR(2) decreased 61% to $295 million in the current quarter compared to $748 million in the prior year quarter, primarily attributable to the temporary suspension of casino operations discussed above.
“During this unprecedented crisis MGM Resorts maintains a strong liquidity position. We have benefitted from the Bellagio, MGM Grand Las Vegas, and Circus Circus Las Vegas real estate transactions, which generated approximately $6.9 billion of cash. In addition to $4.6 billion of cash on the balance sheet as of March 31, 2020, excluding MGP and MGM China and adjusted for the recent bond offering, the Company also has access to $1.4 billion of additional liquidity upon the redemption of its operating partnership units in MGP. Furthermore, we have recently cut our dividend to maintain maximum flexibility and allow us to continue to invest in our business,” said Paul Salem, Chairman of MGM Resorts. “As I have watched Bill and the team move swiftly to address the challenges of the COVID-19 crisis, I have tremendous confidence in their ability to manage the Company through these challenging times. I look forward to working with management and the rest of the Board of Directors to create long term shareholder value by executing on our key strategic initiatives and increasing returns on investment through disciplined capital allocation.”
“We continue to implement an extensive number of initiatives to optimize our cash position, and currently estimate that while all of our properties are closed in the U.S., our domestic cash outflows, including interest, taxes, and rent (net of dividends received from MGP), are approximately $270 million per month,” said Corey Sanders, Chief Financial Officer and Treasurer of MGM Resorts. “After the quarter end, we accessed the debt capital markets to bolster our liquidity position and amended our credit agreement to provide for additional flexibility with respect to our financial covenants. As such, our balance sheet remains sound.”
