MGM, Boyd Gaming Rack Up Fourth-quarter Gains
By Rachel Wimberly -- Tradeshow Week, 3/5/2007
Valentine's Day was sweet for MGM Mirage, with the announcement of record fourth-quarter and full-year results for 2006.
A combined 13-percent increase in gaming revenue and 8-percent increase in hotel revenue from MGM's Las Vegas Strip properties and its Beau Rivage Hotel in Biloxi, Miss., led to an overall 11-percent increase in the fourth quarter for the company, from $1.66 billion in 2005 to $1.85 billion in 2006.
"Our strong fourth-quarter performance validates our disciplined approach to reinvesting in our core assets and providing world-class, unmatched experiences to our customers," said Terri Lanni, MGM Mirage chairman and CEO. "Our plans to expand our operations, both in the United States and overseas, are designed to leverage our tremendous brands into new markets."
Those plans include the following:
- developing a second resort in Macau
- taking reservations for CityCenter residential units in Las Vegas
- finalizing agreements to expand Foxwoods property
- making progress with partners on non-gaming properties in the Middle East and China
Led by strong returns on investments in the company's resorts, revenue reached a record high. Fourth-quarter results also benefited from a full quarter of operations at Beau Rivage, profits from Tower 2 condominium units in the Signature at MGM Grand and pre-tax income of $86 million from Hurricane Katrina insurance recoveries.
For the full year, revenues were $7.8 billion, an increase of more than 17 percent over 2005, largely because 2006 was the first full year the company's results included Mandalay Bay Resort & Casino.
Meanwhile, MGM competitor Boyd Gaming announced its fourth-quarter earnings on Feb. 20 and, while the quarter saw gains compared with 2005, net income for the year was down.
Boyd's fourth-quarter income more than doubled to $56.3 million from $22.9 million in the year-ago quarter. The company attributed the gain in net income to lower expenses and a hurricane-related insurance settlement. Revenue was $520.8 million, down 4 percent from 2005.
Boyd reported strength in its Las Vegas properties, which generated revenue of $69.1 million and an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $17.1 million for the fourth quarter 2006.
The company said it has further expansion plans for the Borgata Hotel Casino & Spa in Atlantic City, as well as sites in Indiana and Florida. Construction on the $3.3 billion 5,000-room Echelon Place in downtown Las Vegas is slated to begin in the second quarter of this year and be completed in the third quarter of 2010.
