UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 1-6697
Mirage Resorts, Incorporated
______________________________________________________
(Exact name of Registrant as specified in its charter)
Nevada 88-0058016
_______________________________ ____________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3400 Las Vegas Boulevard South, Las Vegas, Nevada 89109
________________________________________________________________________
(Address of principal executive offices - Zip Code)
(702) 791-7111
________________________________________________________________________
(Registrant's telephone number, including area code)
________________________________________________________________________
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
____ ____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date. Common
Stock, $0.008 par value, 91,143,710 shares outstanding as of August 4,
1995.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The unaudited condensed consolidated financial information as of June
30, 1995 and for the three-month and six-month periods ended June 30,
1995 and 1994 included in this report was reviewed by Arthur Andersen
LLP, independent public accountants, in accordance with the professional
standards and procedures established for such reviews by the American
Institute of Certified Public Accountants.
<PAGE>
REVIEW REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
______________________________________________
To the Directors and Stockholders
of Mirage Resorts, Incorporated
We have reviewed the accompanying condensed consolidated balance sheet
of Mirage Resorts, Incorporated and subsidiaries (the "Company") as of
June 30, 1995, and the related condensed consolidated statements of
income for the three-month and six-month periods ended June 30, 1995 and
1994 and the related condensed consolidated statements of cash flows for
the six-month periods ended June 30, 1995 and 1994. These consolidated
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Mirage Resorts,
Incorporated and subsidiaries as of December 31, 1994, and the related
consolidated statements of income, stockholders' equity and cash flows
for the year then ended (not presented herein), and, in our report dated
February 8, 1995 (except for Note 5, as to which the date is March 13,
1995), we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet of Mirage Resorts,
Incorporated and subsidiaries as of December 31, 1994, is fairly stated,
in all material respects, in relation to the consolidated balance sheet
from which it has been derived.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
August 11, 1995
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<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
BALANCE SHEETS
___________________________________________________________________________________
At June 30, At December 31,
1995 1994
___________________________________________________________________________________
(In thousands) (Unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 33,958 $ 47,142
Receivables, net of allowance for doubtful
accounts of $48,439 and $37,937 54,966 60,192
Inventories 24,589 26,374
Deferred income taxes 40,507 27,906
Prepaid expenses and other 15,647 17,901
___________________________________________________________________________________
Total current assets 169,667 179,515
Property and equipment, net of accumulated
depreciation of $430,662 and $404,965 1,366,032 1,374,992
Other assets, net 138,165 86,932
___________________________________________________________________________________
$1,673,864 $1,641,439
===================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 54,722 $ 74,361
Accrued expenses 77,196 73,744
Current maturities of long-term debt 1,443 3,986
___________________________________________________________________________________
Total current liabilities 133,361 152,091
Long-term debt, net of current maturities 298,344 359,584
Other liabilities, including deferred income taxes
of $124,020 and $90,400 133,078 98,842
___________________________________________________________________________________
Total liabilities 564,783 610,517
___________________________________________________________________________________
Commitments and contingencies
Stockholders' equity
Common stock: 91,144 and 90,996 shares outstanding 940 940
Additional paid-in capital and other 702,975 699,116
Retained earnings 560,501 487,007
Treasury stock, at cost: 26,430 and 26,578 shares (155,335) (156,141)
___________________________________________________________________________________
Total stockholders' equity 1,109,081 1,030,922
___________________________________________________________________________________
$1,673,864 $1,641,439
===================================================================================
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-3-
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
STATEMENTS OF INCOME (UNAUDITED)
_____________________________________________________________________________________________
Three Months Six Months
____________________ ____________________
For the periods ended June 30 1995 1994 1995 1994
_____________________________________________________________________________________________
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
Gross revenues $326,699 $333,959 $710,112 $665,033
Less-promotional allowances (27,569) (27,546) (58,044) (58,166)
_____________________________________________________________________________________________
299,130 306,413 652,068 606,867
_____________________________________________________________________________________________
Costs and expenses
Casino-hotel operations 180,412 181,023 380,511 366,446
General and administrative 37,666 36,728 75,476 72,121
Depreciation and amortization 21,251 23,239 42,292 46,752
Corporate expense 9,484 8,550 17,915 16,408
_____________________________________________________________________________________________
248,813 249,540 516,194 501,727
_____________________________________________________________________________________________
Operating income 50,317 56,873 135,874 105,140
_____________________________________________________________________________________________
Other income and (expenses)
Interest and other income 304 2,250 3,165 3,728
Interest cost (8,445) (13,741) (18,042) (28,040)
Interest capitalized 2,118 2,175 4,477 3,821
Other, net 230 (147) 240 (329)
_____________________________________________________________________________________________
(5,793) (9,463) (10,160) (20,820)
_____________________________________________________________________________________________
Income before income taxes and extra-
ordinary item 44,524 47,410 125,714 84,320
Provision for income taxes (15,906) (17,248) (45,435) (30,810)
_____________________________________________________________________________________________
Income before extraordinary item 28,618 30,162 80,279 53,510
Extraordinary item-loss on early retirements
of debt, net of applicable income tax benefit - (4,564) (6,785) (4,564)
_____________________________________________________________________________________________
Net income $ 28,618 $ 25,598 $ 73,494 $ 48,946
=============================================================================================
Income per share of common stock
Income before extraordinary item $ 0.30 $ 0.32 $ 0.84 $ 0.56
Extraordinary item-loss on early retirements
of debt, net of applicable income tax benefit - (0.05) (0.07) (0.04)
_____________________________________________________________________________________________
Net income per share of common stock $ 0.30 $ 0.27 $ 0.77 $ 0.52
=============================================================================================
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
STATEMENTS OF CASH FLOWS (UNAUDITED)
____________________________________________________________________________________________
Six months ended June 30 1995 1994
____________________________________________________________________________________________
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 73,494 $ 48,946
Adjustments to reconcile net income to net cash provided
by operating activities
Provision for losses on receivables 11,371 10,098
Depreciation and amortization of property and equipment,
including amounts reported as corporate expense 44,330 48,592
Amortization of debt discount and issuance costs 6,412 6,834
Other amortization 2,198 2,170
Loss on early retirements of debt 10,439 7,022
Deferred income taxes 21,019 9,126
Changes in assets and liabilities
Net (increase) decrease in receivables and other
current assets (2,106) 5,272
Net decrease in trade accounts payable and accrued expenses (15,231) (26,890)
Other, net (4,388) 1,303
____________________________________________________________________________________________
Net cash provided by operating activities 147,538 112,473
____________________________________________________________________________________________
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (60,538) (41,952)
Joint venture and other equity investments (19,167) (22,559)
Other, net (3,338) (1,884)
____________________________________________________________________________________________
Net cash used for investing activities (83,043) (66,395)
____________________________________________________________________________________________
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under bank credit facilities 149,000 123,000
Repayments of borrowings under bank credit facilities (76,300) (90,000)
Early retirements of public debt (134,180) (58,073)
Other principal payments on debt (15,729) (29,343)
Other, net (470) (2,394)
____________________________________________________________________________________________
Net cash used for financing activities (77,679) (56,810)
____________________________________________________________________________________________
CASH AND CASH EQUIVALENTS
Decrease for the period (13,184) (10,732)
Balance, beginning of period 47,142 57,462
____________________________________________________________________________________________
Balance, end of period $ 33,958 $ 46,730
============================================================================================
SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash paid during the period for
Interest, net of amounts capitalized $ 10,576 $ 18,815
Income taxes 22,500 9,500
Noncash investing activities
Contribution of land in exchange for partnership interest 23,170 -
____________________________________________________________________________________________
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-5-
<PAGE>
NOTES TO CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
FINANCIAL STATEMENTS (UNAUDITED)
_______________________________________________________________________
Note 1 - Basis of Presentation
Mirage Resorts, Incorporated (the "Company"), through wholly owned
Nevada subsidiaries, owns and operates some of the most successful
casino-based entertainment resorts in the world. These resorts
include The Mirage and Treasure Island on the Las Vegas Strip, the
Golden Nugget in downtown Las Vegas and the Golden Nugget-Laughlin in
Laughlin, Nevada. The Company also owns 120 acres formerly occupied by
the Dunes Hotel, Casino and Country Club on the Las Vegas Strip on which
it is planning to develop a major new luxury hotel, casino and resort
facility. Additionally, the Company is a 50% partner in a joint venture
which is currently constructing a 3,000-guest room, mid-priced resort
on 46 acres adjacent to its planned luxury resort.
The condensed consolidated financial statements have been prepared in
accordance with the accounting policies described in the Company's 1994
Annual Report on Form 10-K and should be read in conjunction with the
Notes to Consolidated Financial Statements which appear in that report.
The Condensed Consolidated Balance Sheet at December 31, 1994 was
derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the results
for the interim periods have been included. The interim results
reflected in the condensed consolidated financial statements are not
necessarily indicative of expected results for the full year.
Certain amounts in the 1994 condensed consolidated financial statements
have been reclassified to conform with the 1995 presentation. These
reclassifications had no effect on the Company's net income.
Note 2 - Long-Term Debt
EARLY RETIREMENT OF DEBT
On March 13, 1995, the Company called for redemption the remaining
$125,991,000 outstanding principal amount of the 9 7/8% first mortgage
notes collateralized by The Mirage and Treasure Island. The notes
(originally scheduled to mature on October 1, 2000) were redeemed on
April 12, 1995 at the initial stated redemption price of 106.5% of the
principal amount. The redemption premium and the write-off of the
unamortized debt issue costs resulted in an extraordinary loss of $6.8
million, net of applicable income tax benefits of $3.6 million. The
redemption was funded principally by borrowings under the Company's bank
credit facility discussed below.
BANK CREDIT FACILITY AMENDMENT
On April 6, 1995, the Company's $525 million revolving bank credit
facility maturing in May 1999 was amended to increase the total
availability to $1 billion (as so amended, the "Facility").
-6-
<PAGE>
NOTES TO CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
FINANCIAL STATEMENTS (UNAUDITED)
________________________________________________________________________
Note 2 - Long-Term Debt (Continued)
Borrowings under the Facility bear interest at a specified premium over,
at the Company's option, the prime rate or the one-, two-, three- or
six-month London Interbank Offered Rate ("LIBOR"). The premium is based
on the Company's Annualized Funded Debt Ratio (as defined) and the
rating of its zero coupon first mortgage notes. The premium is currently
zero for prime rate borrowings and one percentage point for LIBOR
borrowings. The Company incurs an annual commitment fee on the unused
portion of the Facility, which is also based on the Company's Annualized
Funded Debt Ratio and the rating of its first mortgage notes. The
commitment fee is currently 0.20% per annum.
The Company and its significant subsidiaries, excluding the subsidiary
which owns and operates the Golden Nugget-Laughlin and certain other
subsidiaries (the "Excluded Subsidiaries"), are directly liable for or
have guaranteed the repayment of borrowings under the Facility.
Borrowings under the Facility are currently uncollateralized. If the
Company's Leverage Ratio (as defined) were to exceed 2.75 to 1.0, or if
the rating of its first mortgage notes were to decline to below
investment grade, the banks would be granted a first lien on the
Company's Golden Nugget, Dunes and Shadow Creek Golf Course properties
and certain other assets, including The Mirage and Treasure Island
properties if the first mortgage notes are then no longer outstanding.
The Company has agreed, with certain limited exceptions, not to dispose
of or further encumber such properties and assets without the approval
of its bank group.
The credit agreement governing the Facility contains covenants requiring
the Company and its subsidiaries (other than the Excluded Subsidiaries)
to maintain a specified tangible net worth and certain financial ratios.
The credit agreement also contains covenants that restrict to
various permitted amounts the ability of the Company and its
subsidiaries (other than the Excluded Subsidiaries) to,
among other things, incur additional debt, commit funds to capital
expenditures or new business ventures, make investments, merge or sell
assets or pay dividends on or repurchase the Company's capital stock.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
COMPARISON OF OPERATING RESULTS FOR THE THREE-MONTH PERIODS ENDED JUNE
30, 1995 AND 1994
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
% Increase
Three months ended June 30 1995 1994 (Decrease)
__________________________________________________________________________________
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C>
Gross revenues
The Mirage $166,550 $179,394 (7.2)%
Treasure Island 96,666 89,225 8.3%
Golden Nugget 47,416 48,481 (2.2)%
Golden Nugget-Laughlin 16,067 16,859 (4.7)%
__________________________________________________________________________________
$326,699 $333,959 (2.2)%
__________________________________________________________________________________
Net revenues
The Mirage $151,304 $163,640 (7.5)%
Treasure Island 89,974 83,291 8.0%
Golden Nugget 43,298 44,130 (1.9)%
Golden Nugget-Laughlin 14,554 15,352 (5.2)%
__________________________________________________________________________________
$299,130 $306,413 (2.4)%
__________________________________________________________________________________
Operating income
The Mirage $ 29,119 $ 41,148 (29.2)%
Treasure Island 21,317 14,289 49.2%
Golden Nugget 7,092 7,813 (9.2)%
Golden Nugget-Laughlin 2,273 2,173 4.6%
Corporate expense (9,484) (8,550) 10.9%
__________________________________________________________________________________
$ 50,317 $ 56,873 (11.5)%
__________________________________________________________________________________
Operating margin (operating income/net revenues)
The Mirage 19.2% 25.1% (5.9)pts
Treasure Island 23.7% 17.2% 6.5pts
Golden Nugget 16.4% 17.7% (1.3)pts
Golden Nugget-Laughlin 15.6% 14.2% 1.4pts
Company-wide 16.8% 18.6% (1.8)pts
__________________________________________________________________________________
Income before extraordinary item $ 28,618 $ 30,162 (5.1)%
Net income $ 28,618 $ 25,598 11.8%
__________________________________________________________________________________
Income per share before extraordinary item $ 0.30 $ 0.32 (6.3)%
Net income per share $ 0.30 $ 0.27 11.1%
__________________________________________________________________________________
Company-wide table games win percentage 17.6% 18.6% (1.0)pts
Company-wide occupancy of standard guest rooms 98.8% 99.1% (0.3)pts
__________________________________________________________________________________
</TABLE>
The Company's net income of $0.30 per share during the 1995 second
quarter represents an 11.1% increase over the $0.27 per share reported
in the prior-year period. Before deducting the extraordinary loss
incurred in the 1994 quarter, earnings were approximately flat.
-8-
<PAGE>
The strong results of the 1995 second quarter were achieved
notwithstanding a lower than historical average table games win
percentage and extensive construction disruptions affecting operations
at both The Mirage and the Golden Nugget in Las Vegas. The Company's
overall table games win percentage was 17.6%, versus 18.6% in the prior-
year quarter and 18.8% for the full year 1994. For the six full
quarters since Treasure Island opened, the Company-wide table games win
percentage was 19.2%.
Operations at The Mirage were hampered during the entire 1995 second
quarter by the ongoing construction on the guest room enhancement
program. The program, which began in late February, involves
refurbishing and enhancing all 2,765 of the standard guest rooms and 61
of the 279 suites. Nearly all of the enhanced rooms are now completed
and have been very well received by the public. The construction,
however, resulted in approximately 20% fewer available room nights at
The Mirage in the 1995 second quarter versus the prior-year period.
Occupancy of those standard guest rooms that were available was nearly
100% during both quarters.
Despite accommodating almost 20% fewer hotel guests, table games
activity at The Mirage declined by only 1.9% and slot revenues were down
by only 1.4%. The Mirage's table games win percentage was lower
than its historical average. Coupled with the decline in activity, this
resulted in a $6.3 million, or 10.6%, reduction in table games revenues.
The introduction of the enhanced guest rooms, together with the
restricted guest room inventory, permitted a gradual increase in The
Mirage's average room rate. Nevertheless, total room revenues declined
by 9.3%, accounting for most of a $3.8 million decline in The Mirage's
gross non-casino revenues.
Treasure Island's results were particularly strong during the 1995
second quarter. The facility's gross revenues rose by 8.3%, while
operating income increased by 49.2%. The improvement was broad-based,
with casino and gross non-casino revenues increasing by $2.2 million and
$5.2 million, respectively. The growth in casino revenues principally
represents a 15.0% increase in table games revenues, with improvement
in both the activity levels and the win percentage. Slot revenues also
increased by 3.3%.
Total room revenues at Treasure Island grew by $2.6 million, or 12.4%,
primarily due to an increase in the average room rate. Treasure
Island's standard guest rooms were nearly 100% occupied during each
of the second quarters. The ongoing success of the popular show
"Mystere" also contributed to the improvement in gross non-casino
revenues.
Operating results were essentially flat at the Company's two Golden
Nugget properties. The Golden Nugget in downtown Las Vegas was impacted
throughout the 1995 second quarter by construction of the Fremont Street
Experience. This exciting new $70 million attraction is being built by
a public/private partnership between the City of Las Vegas and the major
downtown casino owners. Construction of the project began early in the
1994 third quarter and is scheduled to be completed in December of this
year. Despite the ongoing construction disruptions, the Golden Nugget
showed only a moderate decline in operating results principally
reflecting lower table games revenues caused by a reduction in both its
activity and its win percentage.
-9-
<PAGE>
The Golden Nugget-Laughlin continued to show stable results in a tough
competitive environment. Effective cost control measures resulted
in a modest increase in operating income.
OTHER FACTORS AFFECTING EARNINGS
During the 1994 second quarter, the Company received a substantial sum
of money in settlement of a lawsuit. The settlement, whose terms are
required to be kept confidential, was determined to be in the best
interest of the Company's stockholders. A portion of the proceeds from
the settlement was credited to corporate expense, while the remainder
was credited to interest and other income.
Interest cost, net of amounts capitalized, declined by $5.2 million, or
45.3%, primarily reflecting debt levels that on average were
approximately 41% lower than they were in the prior-year period.
In May 1994, the Company obtained a $525 million revolving credit
facility from a group of commercial banks, replacing its previous bank
credit facility. On April 6, 1995, the amount available under the
facility was increased to $1 billion. During the 1994 second quarter,
the Company also retired approximately $55.2 million principal
amount of the 9 7/8% first mortgage notes collateralized by The Mirage
and Treasure Island.
In connection with these retirements, and the write-off of the
unamortized financing costs associated with the previous bank credit
facility, the Company recorded an extraordinary charge of $4.6 million
during the 1994 second quarter. There were no similar extraordinary
charges during the 1995 quarter.
-10-
<PAGE>
COMPARISON OF OPERATING RESULTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30,
1995 AND 1994
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
% Increase
Six months ended June 30 1995 1994 (Decrease)
_________________________________________________________________________________
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C>
Gross revenues
The Mirage $382,105 $353,355 8.1%
Treasure Island 194,925 177,616 9.7%
Golden Nugget 100,113 99,662 0.5%
Golden Nugget-Laughlin 32,969 34,400 (4.2)%
_________________________________________________________________________________
$710,112 $665,033 6.8%
_________________________________________________________________________________
Net revenues
The Mirage $349,448 $319,407 9.4%
Treasure Island 181,421 165,445 9.7%
Golden Nugget 91,308 90,764 0.6%
Golden Nugget-Laughlin 29,891 31,251 (4.4)%
_________________________________________________________________________________
$652,068 $606,867 7.4%
_________________________________________________________________________________
Operating income
The Mirage $ 87,994 $ 70,260 25.2%
Treasure Island 43,970 29,347 49.8%
Golden Nugget 16,978 17,213 (1.4)%
Golden Nugget-Laughlin 4,847 4,728 2.5%
Corporate expense (17,915) (16,408) 9.2%
_________________________________________________________________________________
$135,874 $105,140 29.2%
_________________________________________________________________________________
Operating margin (operating income/net revenues)
The Mirage 25.2% 22.0% 3.2pts
Treasure Island 24.2% 17.7% 6.5pts
Golden Nugget 18.6% 19.0% (0.4)pts
Golden Nugget-Laughlin 16.2% 15.1% 1.1pts
Company-wide 20.8% 17.3% 3.5pts
_________________________________________________________________________________
Income before extraordinary item $ 80,279 $ 53,510 50.0%
Net income $ 73,494 $ 48,946 50.2%
_________________________________________________________________________________
Income per share before extraordinary item $ 0.84 $ 0.56 50.0%
Net income per share $ 0.77 $ 0.52 48.1%
_________________________________________________________________________________
Company-wide table games win percentage 20.2% 17.7% 2.5pts
Company-wide occupancy of standard guest rooms 98.6% 98.6% 0.0pts
_________________________________________________________________________________
</TABLE>
Assisted by record 1995 first quarter operating results, the Company
reported net income per share of $0.77 for the six-month period,
representing a 48.1% increase over the $0.52 achieved during the first
half of 1994. Before deducting extraordinary charges in both years,
earnings per share were $0.84, versus $0.56 in the 1994 six-month period.
-11-
<PAGE>
During the first half of 1995, the Company's operating results benefited
from a somewhat higher than historical average table games win
percentage. The Company-wide table games win percentage was 20.2%,
versus 17.7% in the prior-year period. As noted previously, for the six
full quarters since Treasure Island opened, the Company's overall table
games win percentage was 19.2%. Company-wide table games activity was
also up 4.4% over the 1994 six-month period.
Operating results at The Mirage showed improvement over the 1994 period,
despite the impact of the guest room enhancement program. This
improvement primarily represents a $30.0 million, or 25.5%, increase in
table games revenues reflecting an increase in both activity and the win
percentage. Slot revenues were also up $3.4 million, or 6.3%.
Notwithstanding having approximately 12% fewer available room nights,
The Mirage's gross non-casino revenues were down by only $2.5 million,
or 1.5%. The impact of the reduction in room inventory was
significantly lessened by a $2.8 million, or 12.7%, increase in gross
entertainment revenues. This improvement principally reflects
additional performances by the world-renowned Siegfried & Roy, as well
as an increase in the average ticket price for the show.
Treasure Island outpaced its 1994 operating results (its first full year
of operation) in both the first and second quarters of 1995. As a
result, for the first half of 1995, its gross revenues and operating
income were up by $17.3 million and $14.6 million, respectively.
The improvement in Treasure Island's revenues represents increases of
$5.8 million, or 7.8%, in casino revenues and $11.5 million, or 11.1%,
in gross non-casino revenues. The growth in casino revenues is mainly
due to a $5.2 million, or 18.5%, increase in table games revenues
reflecting an increase in both its activity and its win percentage. Room
revenues were up $5.8 million, or 14.4%, principally reflecting an
increase in the average room rate. The remainder of the improvement in
gross non-casino revenues is primarily attributable to increases in
occupancy, the number of performances and the average ticket price for
Mystere.
Similar to the second quarter, operating results at the two Golden
Nugget properties were relatively flat during the six-month period. At
the Golden Nugget in Las Vegas, a $1.4 million increase in gross non-
casino revenues was substantially offset by a decline of almost $1.0
million in casino revenues. The growth in non-casino revenues is
principally due to an entire six months of revenues from the new
country/western show "Country Fever," which opened in mid-June 1994.
Slot revenues grew by $3.2 million, or 8.6%, over the prior-year period.
However, this improvement was more than offset by a $3.6 million
decline in table games revenues caused by a reduction in both activity
and the win percentage.
The decline in the Golden Nugget-Laughlin's revenues primarily reflects
a $1.2 million, or 5.2%, decrease in slot revenues. A reduction in
payroll, promotional, advertising and various other costs and expenses
resulted in an improvement in the operating margin and a slight increase
in operating income.
-12-
<PAGE>
OTHER FACTORS AFFECTING EARNINGS
The factors discussed previously with respect to the three-month periods
had a similar effect on corporate expense, interest and other income and
interest cost when comparing the six-month periods.
The $6.8 million extraordinary charge incurred during the 1995 six-month
period relates to the April 12 redemption of the remaining $126.0
million principal amount of the 9 7/8% first mortgage notes
collateralized by The Mirage and Treasure Island.
CAPITAL RESOURCES AND LIQUIDITY
FUNDS FROM OPERATIONS
Principally reflecting the substantial improvement in the Company's net
income, net cash provided by operating activities (as shown in the
Condensed Consolidated Statements of Cash Flows) was $147.5 million
during the first six months of 1995. This represents a $35.1 million,
or 31.2%, increase over the $112.5 million generated in the prior-year
period.
During both the 1995 and 1994 six-month periods, cash flow from
operations was the Company's principal source of funds for capital
expenditures, investments, debt repayments and other corporate
requirements.
CAPITAL SPENDING
Capital expenditures during the 1995 six-month period totaled $60.5
million. Of this amount, approximately $35 million relates to the guest
room enhancement program at The Mirage. When completed in late August,
the total cost of the project is expected to be approximately $55
million.
A significant portion of the remaining capital expenditures during the
1995 period relates to the preliminary development of "Bellagio,"
formerly known as "Beau Rivage." The Company is planning to construct
this major new luxury casino-based entertainment resort on the portion
of the Dunes property at the corner of Flamingo Road and the Strip.
Bellagio is expected to be the most ambitious and complex facility that
the Company has ever developed. Construction of the new resort
is currently expected to be completed in late 1997 or early 1998.
Although the construction plans and budget have not yet been
finalized and are subject to change, the total cost of the project is
anticipated to be approximately $1 billion, exclusive of land costs.
Capital expenditures of $42.0 million during the 1994 period included
amounts expended to upgrade the Company's slot machines and to complete
certain projects at Treasure Island, which opened in October 1993.
Management believes in maintaining the Company's facilities in
first-class condition. Maintenance capital spending for its four
operating properties is anticipated to approximate $30 million per
year.
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<PAGE>
In early April 1995, a joint venture in which the Company is a 50%
partner began construction of a new value-oriented hotel-casino resort
on approximately 46 acres on the portion of the Dunes property
near Tropicana Avenue. The Victorian-themed facility will be named
"Monte Carlo" and offer 3,024 guest rooms and a 90,000-square foot
casino. The facility will also feature a theater which will showcase
the exceptional talent of illusionist Lance Burton. The Company's
partner in the venture, a subsidiary of Circus Circus Enterprises, Inc.,
is supervising the construction and will manage the resort without fee.
Monte Carlo is currently scheduled to open in the summer of 1996.
Based on the current budget, the total cost of the project is
anticipated to be approximately $280 million. This amount excludes the
estimated value of the 44 acres of land which the Company contributed as
equity to the venture.
The joint venture has obtained a $175 million reducing revolving credit
facility from a group of commercial banks to fund a substantial portion
of the construction costs. The credit facility is collateralized by a
first mortgage on all existing and future assets of the venture and is
non-recourse to the Company. Under the joint venture agreement, the
joint venture's debt is limited to the lesser of $200 million or 70% of
the project cost, inclusive of land. The balance of the construction
costs is being provided by equity contributions from the Company's
partner and by equity contributions from the Company of up to $20
million in cash, $5 million of which the Company previously contributed.
In response to a request for proposals, on July 14, 1995, the Company
submitted a proposal to the City of Atlantic City, New Jersey (the
"City") to construct a 2,000-room luxury hotel-casino resort on a 178-
acre site currently owned by the City. The Company's proposed resort
features a 115,000-square foot casino, a large variety of casual and
gourmet restaurants, shops and boutiques, nightclubs, theaters, a health
spa and beauty salon and several thousand square feet of meeting and
convention space. The construction cost and timing of the proposed
project have not yet been determined.
The Company's proposal also provides for the possibility of a second
2,000-room hotel-casino to be constructed on the site by another
developer. The two facilities would be separately owned and operated and
connected by an extensive retail and entertainment complex. The Company
and Circus Circus Enterprises, Inc. have announced that they are
pursuing the negotiation of a joint development agreement for the site
in the event that the City selects the Company as the successful bidder.
The City is expected to select the developer for the site in early
September. Separately, in June 1995, the New Jersey Casino Control
Commission found the Company suitable to hold the stock of a New Jersey
casino licensee.
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<PAGE>
On July 24, 1995, the Company entered into an agreement with a wholly
owned subsidiary of Capital Gaming International, Inc. to purchase the
stock of the subsidiary which owns a riverboat casino and related gaming
license in New Orleans, Louisiana. Under the terms of the agreement,
the total purchase price is $55 million plus the assumption of
equipment financing of up to $6.5 million. The casino has ceased
operating and, on July 28, 1995, the subsidiary became the debtor-in-
possession in a Chapter 11 bankruptcy proceeding. Closing of the
purchase is subject to numerous contingencies, including the receipt
of requisite licenses and other state and local approvals, approval of
creditors and the bankruptcy court and the acquisition of a site
suitable to the Company at which to operate the riverboat.
Accordingly, there is no assurance that the purchase will be
consummated. If the purchase is consummated, the Company currently
plans to move the riverboat to a site in Lake Charles, Louisiana.
FINANCING AND LIQUIDITY
During the first six months of 1995, the Company used existing cash
balances, operating cash flow and net borrowings under its bank credit
facility to further reduce its outstanding indebtedness. This reduction
principally consists of the redemption of the remaining $126.0 million
principal amount of 9 7/8% first mortgage notes and a $14.6 million
prepayment on its floating rate aircraft loan.
Principal payments on debt during the 1994 period primarily reflect the
retirement of $55.2 million of the 9 7/8% notes and the March 15
maturity of the remaining $27.0 million of floating rate first mortgage
notes also associated with The Mirage and Treasure Island.
At June 30, 1995, the Company had cash and cash equivalents of $34.0
million and net working capital of $36.3 million. Maturities of the
Company's debt are relatively minor through 1997. Management believes
that the Company's existing cash balances, anticipated operating cash
flow and amounts available under its bank credit facility will be
sufficient to meet its future debt obligations and projected capital
expenditure needs. However, should the Company determine to proceed
with a new project not currently contemplated, additional financing may
be required.
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<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Registrant's 1995 Annual Meeting of Stockholders (the
"Meeting") was held on May 25, 1995.
(c) At the Meeting, Stephen A. Wynn and Ronald M. Popeil were
elected to serve three-year terms as members of the Board of
Directors. The results of the voting were as follows: Mr.
Wynn-73,238,806 shares for and 241,676 shares withheld; Mr.
Popeil-73,239,794 shares for and 240,688 shares withheld.
Additionally, at the Meeting the stockholders voted to approve
the Registrant's 1995 Stock Option and Stock Appreciation Rights
Plan by a vote of 50,693,292 shares in favor and 22,532,344
shares opposed, with 254,846 shares abstaining.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
10.1 Amendment No. 2 to Reducing Revolving Loan Agreement, dated as of
June 30, 1995, among Victoria Partners, each bank party thereto,
The Long-Term Credit Bank of Japan, Ltd., Los Angeles Agency and
Societe Generale, as Co-Agents, and Bank of America National
Trust and Savings Association, as Administrative Agent (without
Exhibit).
10.2 Stock Purchase Agreement, dated July 24, 1995, among the
Registrant, Capital Gaming International, Inc. and Crescent City
Capital Development Corporation.
10.3 Amendment No. 3 to Reducing Revolving Loan Agreement, dated as of
July 28, 1995, among Victoria Partners, each bank party thereto,
The Long-Term Credit Bank of Japan, Ltd., Los Angeles Agency and
Societe Generale, as Co-Agents, and Bank of America National
Trust and Savings Association, as Administrative Agent.
11 Mirage Resorts, Incorporated - Computation of Net Income Per
Share of Common Stock for the three-month and six-month periods
ended June 30, 1995 and 1994.
15 Letter from independent public accountants acknowledging
awareness of the use of their report dated August 11, 1995 in
the Registrant's registration statements.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
On January 19, 1995 (subsequently amended on January 24, 1995),
the Registrant filed a Current Report on Form 8-K, dated December
9, 1994. The Registrant reported under Item 5 (i) the formation
of Victoria Partners, a joint venture in which the Registrant is
a 50% partner and (ii) that Victoria Partners had obtained a $175
million reducing revolving credit facility from a group of
commercial banks. The Registrant filed no reports on Form 8-K
during the three-month period ended June 30, 1995.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Mirage Resorts, Incorporated
August 11, 1995 by: DANIEL R. LEE
_______________ _____________________________________
Date Daniel R. Lee
Senior Vice President - Finance and
Development, Chief Financial Officer
and Treasurer (Principal Financial
Officer)
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AMENDMENT NO. 2 TO REDUCING REVOLVING LOAN AGREEMENT
This Amendment No. 2 to Reducing Revolving Loan Agreement (this
"Amendment") dated as of June 30, 1995 is entered into with reference to
the Reducing Revolving Loan Agreement dated as of December 21, 1994
among Victoria Partners, a Nevada general partnership (as "Borrower"),
the Banks listed on the signature pages of this Amendment, The Long-Term
Credit Bank of Japan, Ltd., Los Angeles Agency and Societe Generale (as
"Co-Agents"), and Bank of America National Trust and Savings
Association, as Administrative Agent, as amended by the Amendment No.1
to Reducing Revolving Loan Agreement dated as of January 31, 1995 (the
"Loan Agreement").
1. AMENDMENT TO SECTION 1.1 - DEFINITION. Section 1.1 of the
Loan Agreement is amended so that the following defined term therein
reads in full as follows:
"COMPLETION GUARANTOR" means (a) initially, Circus Circus
Enterprises, Inc., a Nevada corporation ("Circus Circus"), or (b)
in the event of any election by MRI to execute and deliver a
Completion Guaranty to replace that issued by Circus Circus, MRI.
The parties acknowledge that during the period from the
Contribution Date through and including the Construction
Termination Date, a Completion Guaranty must be in full force
and effect at all times, and MRI may issue or not issue a
Completion Guaranty in the exercise of its sole discretion."
2. AMENDMENT TO SECTION 8.2(a). Section 8.2(a) of the Loan
Agreement is hereby amended to read in full as follows:
"(a) the Contribution Date shall have occurred not later
than July 31, 1995."
3. AMENDMENT TO SECTION 8.2(c)(3). Section 8.2(c)(3) of the
Loan Agreement is hereby amended to read in full as follows:
"(3) the Completion Guaranty executed by Circus Circus and
attaching a Construction Schedule thereto as Exhibit A which is
reasonably acceptable to the Administrative Agent or the
Requisite Banks;"
4. AMENDMENT TO SECTION 8.2(e). Section 8.2(e) of the Loan
Agreement is hereby amended to read in full as follows:
"(e) Gold Strike shall have contributed not less than
$30,000,000 to Borrower as a permanent cash equity contribution
in accordance with the Joint Venture Agreement."
5. AMENDMENT TO SECTION 9.1(g). The text of Section 9.1(g) of
the Loan Agreement is hereby deleted in its entirety and Section 9.1(g)
is left intentionally blank.
6. AMENDMENT TO SECTION 9.1(t). Section 9.1(t) of the Loan
Agreement is hereby amended to read in full as follows:
"(t) Any of the events or circumstances described in clause
(h), (k) or (l) of this Section occurs with respect to Circus
Circus during such time as it is the Completion Guarantor, unless
within five Banking Days after notice by the Administrative Agent
to MRI of the same, MRI executes and delivers to the
Administrative Agent and the Banks a replacement Completion
Guaranty; or"
EXHIBIT 10.1
<PAGE>
7. AMENDMENT TO EXHIBIT. The form of Exhibit B to the Loan
Agreement (the Completion Guaranty) is amended as set forth in Exhibit B
to this Amendment.
8. REPRESENTATION AND WARRANTY. Borrower represents and
warrants to the Administrative Agent and the Banks that no Default or
Event of Default has occurred and remains continuing.
9. CONFIRMATION. In all other respects, the terms of the Loan
Agreement and the other Loan Documents are hereby confirmed.
IN WITNESS WHEREOF, Borrower, the Administrative Agent and the
Banks have executed this Amendment as of the date first written above by
their duly authorized representatives.
VICTORIA PARTNERS, a Nevada general partnership
By: Gold Strike L.V., managing general partner
By: M.S.E. Investments, Incorporated, its general
partner
MICHAEL S. ENSIGN
By: _____________________________________________
Michael S. Ensign, President
By: MRGS Corp., a Nevada corporation, general
partner
DANIEL R. LEE
By: ______________________________________________
Daniel R. Lee, Chief Financial
Officer and Treasurer
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative Agent
PEGGY A. FUJIMOTO
By: _____________________________________________
Peggy A. Fujimoto, Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
JON VARNELL
By: ____________________________________________
Jon Varnell, Managing Director
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<PAGE>
BANK OF AMERICA NEVADA, as a Bank and
as Swing Line Bank
ALAN F. GORDON
By: ___________________________________________
Alan F. Gordon, Vice President
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY, as Co-Agent and a Bank
MOTOKAZU UEMATSU
By: ___________________________________________
Motokazu Uematsu, Deputy General Manager
SOCIETE GENERALE, as Co-Agent and a Bank
DONALD L. SCHUBERT
By: ___________________________________________
Donald L. Schubert, Vice President
FIRST SECURITY BANK OF IDAHO, N.A. as a Bank
VICTOR W. GILLETT
By: ___________________________________________
Victor W. Gillett, Vice President
FIRST SECURITY BANK OF UTAH, N.A., as a Bank
DAVID P. WILLIAMS
By: ___________________________________________
David P. Williams, Vice President
BANK OF SCOTLAND, as a Bank
ELIZABETH WILSON
By: ___________________________________________
Elizabeth Wilson, Vice President & Branch
Manager
MIDLANTIC BANK, N.A. as a Bank
DENISE D. KILLEN
By: ___________________________________________
Denise D. Killen, Vice President
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<PAGE>
U.S. BANK OF NEVADA, as a Bank
AMY ETHRIDGE
By: ___________________________________________
Amy Ethridge, Vice President
The undersigned agrees and consents to
the foregoing:
CIRCUS CIRCUS ENTERPRISES, INC.
CLYDE T. TURNER
By: ___________________________________________
Chairman
Title:__________________________________________
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July 24, 1995
Capital Gaming International, Inc.
Bayport One, Suite 250
8025 Black Horse Pike
West Atlantic City, New Jersey 08232
Crescent City Capital Development Corporation
1400 Annunciation Street
New Orleans, Louisiana 70130
Re: STOCK PURCHASE AGREEMENT
Gentlemen:
This letter sets forth the agreement among Mirage Resorts,
Incorporated ("MRI"), a Nevada corporation, Capital Gaming
International, Inc. ("CGII"), a New Jersey corporation, and
Crescent City Capital Development Corporation ("CCCDC"), a
Louisiana corporation, with respect to the purchase by MRI of all
of the newly issued capital stock of the reorganized CCCDC, which
owns the Crescent City Queen riverboat currently docked in New
Orleans, Louisiana (the "Boat"), the associated Louisiana
riverboat gaming license (the "License") and certain related
assets.
1. PURCHASE AND SALE OF SHARES. Subject to the terms,
provisions and conditions contained in this agreement, MRI hereby
agrees to purchase, and CGII and CCCDC hereby agree to sell and
issue to MRI, 100% of the newly issued shares (the "Shares") of
capital stock of the reorganized CCCDC pursuant to an order of
the United States Bankruptcy Court (the "Bankruptcy Court") under
Chapter 11 of the United States Bankruptcy Code (the "Code"). The
Shares shall be issued to MRI at the Closing (as hereinafter
defined) by delivery of a certificate evidencing the Shares, free
and clear of any liens, claims, encumbrances or rights of others.
The Shares shall be duly and validly issued, fully paid and non-
assessable, and there shall not be outstanding any other equity
or voting interests in CCCDC or any options, warrants or other
rights to purchase or subscribe for equity or voting interests in
CCCDC or instruments which are convertible into or exchangeable
for equity or voting interests in CCCDC.
2. PURCHASE PRICE. The purchase price for the Shares (the
"Purchase Price") shall be $55,000,000, payable in cash at the
Closing, subject to Paragraphs 3 and 8 hereof.
3. PAYMENT OF PURCHASE PRICE. Within five business days
following the execution of this agreement, MRI shall deposit
$2,000,000 as a refundable good faith deposit (the "Deposit")
with First American Title Company, New Orleans, Louisiana, or
such other escrow agent as the parties may mutually agree, to be
held in an interest-bearing escrow account (the "Escrow"). The
Deposit, and any interest earned thereon, shall be refunded to
MRI in the event that the Closing does not occur within 90 days
following the execution of this agreement (as such period may be
extended as provided hereinbelow) for any reason other than as a
result of a breach of this agreement by MRI. At the Closing, the
Deposit and any interest earned thereon shall be paid to CGII and
credited against the Purchase Price. At the Closing, MRI
shall deposit the balance of the Purchase Price in Escrow to
be paid to CGII, subject to Paragraph 4 hereof. In the
EXHIBIT 10.2
<PAGE>
event that the Closing shall not have occurred within 90 days
following the execution of this agreement due to the failure to
satisfy all conditions to the Closing, any party shall have the
option to extend the 90-day period on a month-to-month basis for
up to 90 additional days by written notice to the other parties.
4. LIABILITIES; INDEMNIFICATION. It shall be a condition
to the Closing that, except as otherwise provided in Paragraph 5
hereof, CCCDC and its assets shall not be subject to any
liabilities, obligations or encumbrances, whether known or
unknown, fixed or contingent, liquidated or unliquidated,
including without limitation any ship mortgages against the Boat,
Form UCC-1 financing statements, claims relating to pending
litigation, claims of trade creditors, employees or governmental
entities or claims of bondholders or other creditors, including
liabilities or obligations associated with CCCDC's joint venture
with Grand Palais Riverboat, Inc. (the "Riverboat Joint
Venture"). MRI shall not be required to assume or become subject
to any liabilities or obligations, or acquire the Shares subject
to any liabilities or obligations of CCCDC, other than
liabilities or obligations which MRI may explicitly assume or
consent to in writing in its sole discretion. CGII shall
indemnify and hold harmless MRI and its officers, directors,
agents and affiliates from and against any and all liabilities,
obligations, claims, damages and expenses, including reasonable
attorneys' fees as incurred, which are discovered within 36
months after the Closing to the extent such arose prior to the
Closing, and MRI shall indemnify and hold harmless CGII, CCCDC
and their respective officers, directors, agents and affiliates
from and against any and all liabilities, obligations, claims,
damages and expenses, including reasonable attorneys' fees as
incurred, which are discovered within 36 months after the Closing
to the extent such arise after the Closing. At the Closing,
$2,500,000 shall be withheld from the Purchase Price and retained
in the Escrow for a period of 90 days following the Closing in
order to partially secure CGII's indemnification obligations
hereunder. At the end of such 90-day period, the $2,500,000,
together with interest earned thereon, less the amount of any
claims for indemnification made by MRI during such 90-day period,
shall be released from the Escrow and paid to CGII.
5. SLOT MACHINE EQUIPMENT. Notwithstanding Paragraph 4
hereof, MRI acknowledges that certain slot machines and other
coin-operated gaming devices (the "Machines") which were
purchased by CCCDC and manufactured and sold by Bally Gaming,
Inc. and International Game Technology (collectively, the
"Vendors") are subject to liabilities collateralized by security
interests in favor of the respective Vendors in an aggregate
amount not exceeding $6,500,000. At the Closing, MRI shall
assume the secured liabilities to the Vendors with respect to the
Machines and may satisfy such liabilities pursuant to separate
agreements with the Vendors. MRI also acknowledges that 33 slot
machines and other coin-operated gaming devices which were
purchased by CCCDC and manufactured and sold by Sigma Game Inc.,
and two which were manufactured and sold by Universal
Distributing, are subject to liabilities collateralized by
security interests in favor of such vendors, and that such
machines and devices may be disposed of separately by CCCDC prior
to the Closing.
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<PAGE>
6. CONDITIONS TO CLOSING. The obligation of each party to
consummate the purchase and sale of the Shares shall be subject
to the satisfaction or waiver of each of the following
conditions:
(a) The Shares to be conveyed to MRI shall be free and
clear of any liens, claims, encumbrances or rights of others;
(b) CCCDC and its assets shall not be subject to any
liabilities, obligations or encumbrances, whether known or
unknown, fixed or contingent, except as otherwise provided in
Paragraph 5 hereof;
(c) MRI, CGII and CCCDC shall have obtained all
licenses, permits, consents and approvals, free of any conditions
or restrictions which are not acceptable to MRI in its reasonable
discretion, from any court or governmental entity or authority
necessary to permit MRI to acquire the Shares, which shall
include ownership of the License, ownership of the Boat and the
right to operate the Boat pursuant to the License at a site in
the Lake Charles, Louisiana area or elsewhere in Louisiana
controlled by MRI and suitable to MRI in its sole discretion,
including without limitation licenses, permits, consents and
approvals from the Gaming Enforcement Division of the Louisiana
State Police, the Louisiana Riverboat Gaming Commission, the City
of Lake Charles, Calcasieu Parish, the Lake Charles Harbor and
Terminal District and any other governmental entity which has
authority over the operation, location or relocation of the Boat;
(d) CGII and CCCDC shall have obtained all requisite
consents and approvals from their respective Boards of Directors,
stockholders, partners and creditors to the transactions
contemplated hereby;
(e) except as provided in the last sentence of
Paragraph 5 hereof, CCCDC, including its assets, shall be in
substantially the same condition at the Closing as they exist on
the last day of the Initial Due Diligence Period (as hereinafter
defined), reasonable wear and tear excepted, except that prior to
the Closing, CCCDC shall dispose of its partnership interest in
the Riverboat Joint Venture;
(f) the parties shall have obtained any other
necessary governmental consents or approvals to the transactions
contemplated hereby, including without limitation clearance by
the Federal Trade Commission pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended;
(g) MRI shall have obtained the written resignations
of all of the existing officers and directors of CCCDC;
(h) the Bankruptcy Court shall have issued an order
(which order has not been stayed) confirming a plan of
reorganization of CCCDC pursuant to Chapter 11 of the Code which
shall provide for the consummation of the transactions
contemplated hereby in form and substance reasonably satisfactory
to MRI (the "Plan");
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<PAGE>
(i) MRI shall have received an opinion of counsel to
CGII and CCCDC, which counsel and opinion shall be satisfactory
to MRI, as to the validity and enforceability of this agreement,
the due authorization, execution and delivery of this agreement
by CGII and CCCDC, title to the Shares and the assets owned by
CCCDC, the receipt by CGII and CCCDC of all requisite licenses,
permits, consents and approvals and such other matters as MRI
shall reasonably request; and
(j) CGII and CCCDC shall have received an opinion of
counsel to MRI, which counsel and opinion shall be satisfactory
to CGII and CCCDC, as to the validity and enforceability of this
agreement and the due authorization, execution and delivery of
this agreement by MRI.
7. CLOSING. The closing of the purchase and sale of the
Shares hereunder (the "Closing") shall take place at a mutually
agreeable location in New Orleans, Louisiana on a mutually
acceptable date as soon as possible following the satisfaction or
waiver of each of the conditions set forth in Paragraph 6 hereof.
8. DEBTOR-IN-POSSESSION FINANCING. CCCDC has indicated
that it may request MRI to provide certain financing for its use
and benefit. At such time as CCCDC becomes a debtor-in-possession
under Chapter 11 of the Code, CCCDC may seek approval of the
Bankruptcy Court to obtain credit from MRI pursuant to Section
364(d) of the Code, in an amount not to exceed $2,000,000, with
interest at the rate of 1% per month, compounded monthly, secured
by a first priority lien on the Boat (the "DIP Financing"). The
principal of and all accrued interest on the DIP Financing shall
be due and payable at the Closing, by crediting such amount
against the balance of the Purchase Price; provided, however,
that if this agreement shall have been terminated for any reason
prior to the Closing, the principal of and all accrued interest
on the DIP Financing shall be due and payable upon the earlier of
(i) 60 days following termination of this agreement or (ii) the
effective date of a plan of reorganization of CCCDC pursuant to
Chapter 11 of the Code. CCCDC shall have the right to prepay the
DIP Financing in whole or in part without penalty or premium.
CCCDC shall prepare all materials required to obtain Bankruptcy
Court approval of the DIP Financing and to perfect the first
priority lien on the Boat in favor of MRI (the "DIP Financing
Documents"). MRI shall have the right to approve the terms and
conditions of the DIP Financing and the DIP Financing Documents.
At such time as the Bankruptcy Court issues an order (which
order has not been stayed) approving the DIP Financing and all
other regulatory approvals required for the DIP Financing have
been obtained, CCCDC and MRI shall execute and deliver the DIP
Financing Documents, and MRI shall provide the DIP Financing in
accordance with the DIP Financing Documents. Nothing contained
in this agreement shall prohibit CCCDC from seeking and obtaining
financing pursuant to Section 364(d) of the Code secured by a
first priority lien on the Boat from a person other than MRI in
an aggregate amount not to exceed $3,000,000, in lieu of the DIP
Financing from MRI.
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<PAGE>
9. COVENANT TO SATISFY CONDITIONS. MRI, CGII and CCCDC
and their respective agents and affiliates covenant and agree to
use their good faith best efforts in cooperation with each other
to file and prosecute all requisite applications and otherwise to
take all actions necessary or appropriate to obtain the
satisfaction of each of the conditions set forth in Paragraph 6
hereof as promptly as possible. Without limitation of the
foregoing, (a) MRI agrees to prosecute all appropriate appeals of
any denial of a license, permit, consent or approval required by
MRI in order to consummate the transactions contemplated hereby,
(b) CGII and CCCDC agree to render maximum assistance to MRI in
obtaining all requisite governmental approvals necessary to
transfer the License to MRI and to relocate the Boat to a site
designated by MRI, including without limitation making their
senior executives available to meet with and make presentations
to appropriate Louisiana governmental officials and (c) CGII and
CCCDC agree to use their good faith best efforts to obtain the
approval of the Plan by all requisite persons and confirmation of
the Plan by the Bankruptcy Court. A breach of the covenants
contained in this Paragraph 9 shall constitute a material breach
of this agreement.
10. OVERBIDS. Upon acceptance by CGII or CCCDC or a
trustee for CGII or CCCDC or final approval by the Bankruptcy
Court of an alternate bid to purchase the capital stock or assets
of CCCDC, CGII and CCCDC shall pay to MRI, as an overbid fee and
not as a penalty, the sum of $2,000,000. The parties acknowledge
and agree that in such event, MRI shall have incurred substantial
economic damages which are difficult to ascertain, and that the
foregoing sum is a reasonable estimate of MRI's damages. No
alternate bid which does not exceed the Purchase Price by at
least $3,000,000 shall be accepted or approved.
11. ASSIGNMENT. MRI shall have the right to assign all of
its rights and obligations hereunder, and to cause title to the
Shares to be taken by, any direct or indirect wholly owned
subsidiary of MRI which assumes MRI's obligations hereunder. In
the event of such an assignment, all references to MRI herein
shall be deemed to refer solely to such assignee, but MRI shall
remain liable for the assignee's obligation to pay the Purchase
Price hereunder.
12. EXPENSES. Each party will bear its own expenses in
connection with this agreement and the transactions contemplated
hereby, except as otherwise expressly provided herein.
13. AUTHORITY. MRI, CGII and CCCDC each hereby represent
and warrant to the others that it has all necessary corporate
authority to execute and deliver this agreement, perform its
obligations hereunder and consummate the transactions
contemplated hereby.
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<PAGE>
14. DUE DILIGENCE. From time to time during the period
from the execution of this agreement to the Closing, MRI shall be
permitted to make a thorough due diligence examination of CCCDC
and its assets and liabilities. In connection therewith, CGII
and CCCDC will promptly provide to MRI and its authorized
representatives such access and information concerning CCCDC and
its assets and liabilities as MRI requests to enable it to
complete such examination. Additionally, MRI may obtain, at its
own expense, such physical inspections, tests and surveys
concerning CCCDC and its assets as it deems appropriate. MRI
shall indemnify and hold harmless CGII and CCCDC from and against
any and all claims, damages and liabilities arising from or out
of such tests and inspections. MRI shall have the right, in its
sole discretion, to terminate this agreement for any reason
during the period ending 9:00 A.M., Louisiana time, on July 31,
1995 (the "Initial Due Diligence Period") without further
liability to CGII or CCCDC. Following the end of the Initial Due
Diligence Period, MRI shall not have the right to terminate this
agreement based on its due diligence examination except as
provided in Paragraph 15 hereof.
15. TERMINATION. In addition to any other termination
rights expressly provided in this agreement, any party shall have
the right to terminate this agreement by written notice to the
others upon the occurrence of any of the following events: (a)
failure of the Closing to take place within 90 days following the
execution of this agreement, as such date may be extended as
provided in Paragraph 3 hereof; (b) failure of MRI to obtain
control of a suitable site as provided in Paragraph 6(c) hereof
within 30 days following the execution hereof; (c) the denial by
any governmental entity or authority of any license, permit,
consent or approval set forth in Paragraph 6(c) hereof and the
failure of MRI to timely pursue, or the loss of, any
administrative appeal of such denial; or (d) any material breach
of this agreement by the other party (considering, for such
purpose, CGII and CCCDC to be one party). CGII and CCCDC shall
also have the right to terminate this agreement by written notice
to MRI in the event that MRI issues any press release indicating
that MRI has ceased to pursue either (i) the purchase of the
Shares, the Boat or the License or (ii) any license, permit,
consent or approval from any governmental entity or authority set
forth in Paragraph 6(c) hereof. Upon termination of this
agreement, the parties shall have no further liability to each
other, except as otherwise expressly provided in this agreement
or except in the event of a material breach of this agreement by
the nonterminating party.
16. USE OF "CRESCENT CITY" NAME. MRI shall not acquire any
rights hereunder to the use of the "Crescent City" trade name,
and prior to or at the Closing the parties shall cause CCCDC to
change its corporate name to a name that does not contain the
words "Crescent City" or any confusingly similar name.
17. FURTHER ASSURANCES. Each party agrees to execute and
deliver such further documents and instruments, including without
limitation stock powers, deeds, bills of sale, escrow
instructions, indemnities and officers' certificates, and to
perform all other acts, as may be reasonably necessary or
appropriate in order to consummate the transactions contemplated
hereby and to vest title to the Shares in MRI.
-6-
<PAGE>
18. CONFIDENTIALITY AGREEMENT. Upon the execution of this
agreement, the Confidentiality Agreement dated June 16, 1995
between MRI and each of CGII and Hemmeter Enterprises, Inc. shall
terminate and be of no further force or effect.
19. BINDING AGREEMENT; AMENDMENTS. This agreement
constitutes a binding agreement of the parties hereto and
supersedes all prior agreements and understandings, whether oral
or written. This agreement may not be amended except by a
writing signed by each of the parties.
20. COUNTERPARTS. This agreement may be executed in
counterparts, by the manual or facsimile signature of each party,
and all such counterparts shall be deemed to constitute one and
the same instrument.
21. ATTORNEYS' FEES. In the event of any action to enforce
this agreement, the prevailing party or parties in such action
shall be entitled to recover its reasonable attorneys' fees and
other expenses from the non-prevailing party or parties.
22. DEFINITIVE AGREEMENT. The parties contemplate that
this agreement will be replaced by a more definitive stock
purchase agreement containing customary terms and provisions
consistent with the terms and provisions hereof. The parties will
use their best efforts to execute a more definitive agreement
within 45 days following the execution of this agreement. In the
event that such more definitive agreement is executed, it shall
supersede this agreement in its entirety, and all references to
this agreement shall be deemed to refer to such more definitive
agreement. In the event that such more definitive agreement is
not executed, this agreement shall continue to constitute a
legally binding agreement.
-7-
<PAGE>
23. GOVERNING LAW. This agreement shall be governed by and
construed in accordance with the laws of the State of Louisiana.
This agreement is being delivered to each of you in
duplicate. Please execute, date and return one copy of this
letter, whereupon this letter will constitute a binding agreement
among us.
Very truly yours,
MIRAGE RESORTS, INCORPORATED
By: DANIEL R. LEE
_____________________________________
Daniel R. Lee
Chief Financial Officer and Treasurer
AGREED TO AND ACCEPTED:
CAPITAL GAMING INTERNATIONAL, INC.
By: EDWARD TRACY Date: 7/24/95
______________________________________
Edward Tracy, President, Chief
Executive Officer and Chief Operating
Officer
CRESCENT CITY CAPITAL DEVELOPMENT
CORPORATION
By: EDWARD TRACY Date: 7/24/95
______________________________________
Edward Tracy, President
-8-
AMENDMENT NO. 3 TO REDUCING REVOLVING LOAN AGREEMENT
This Amendment No. 3 to Reducing Revolving Loan
Agreement (this "Amendment") dated as of July 28, 1995 is
entered into with reference to the Reducing Revolving Loan
Agreement dated as of December 21, 1994 among Victoria
Partners, a Nevada general partnership (as "Borrower"), the
Banks listed on the signature pages of this Amendment, The
Long-Term Credit Bank of Japan, Ltd., Los Angeles Agency and
Societe Generale (as "Co-Agents"), and Bank of America National
Trust and Savings Association, as Administrative Agent, as
amended by the Amendment No. 1 to Reducing Revolving Loan
Agreement dated as of January 31, 1995 and Amendment No. 2 to
Reducing Revolving Loan Agreement dated as of June 30, 1995
(the "Loan Agreement").
1. Amendment to Section 8.2(a). Section 8.2(a) of
the Loan Agreement is hereby amended to read in full as
follows:
"(a) the Contribution Date shall have occurred not
later than August 15, 1995."
2. Representation and Warranty. Borrower
represents and warrants to the Administrative Agent and the
Banks that no Default or Event of Default has occurred and
remains continuing.
3. Confirmation. In all other respects, the terms
of the Loan Agreement and the other Loan Documents are hereby
confirmed.
IN WITNESS WHEREOF, Borrower, the Administrative
Agent and the Banks have executed this Amendment as of the date
first written above by their duly authorized representatives.
VICTORIA PARTNERS, a Nevada general partnership
By: Gold Strike L.V., managing general partner
By: Last Chance Investments, Incorporated,
general partner
By: WILLIAM RICHARDSON
__________________________________________
Title: President
__________________________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative Agent
By: PEGGY A. FUJIMOTO
__________________________________________
Peggy A. Fujimoto, Vice President
EXHIBIT 10.3
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
By: JON VARNELL
__________________________________________
Jon Varnell, Managing Director
BANK OF AMERICA NEVADA, as a Bank and as
Swing Line Bank
By: ALAN F. GORDON
__________________________________________
Alan F. Gordon, Vice President
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY, as Co-Agent and a Bank
By: MOTOKAZU UEMATSU
__________________________________________
Motokazu Uematsu, Deputy General Manager
__________________________________________
[Printed Name & Title]
SOCIETE GENERALE, as Co-Agent and a Bank
By: MAUREEN KELLY
_________________________________________
Maureen Kelly, Vice President
FIRST SECURITY BANK OF IDAHO, N.A. as a Bank
By: VICTOR W. GILLETT
_________________________________________
Victor W. Gillett, Vice President
FIRST SECURITY BANK OF UTAH, N.A., as a Bank
By: DAVID P. WILLIAMS
_________________________________________
David P. Williams, Vice President
BANK OF SCOTLAND, as a Bank
By: CATHERINE M. ONIFFREY
_________________________________________
Catherine M. Oniffrey, Vice President
MIDLANTIC BANK, N.A. as a Bank
-2-
<PAGE>
By: DOLORES KELLY
_________________________________________
Dolores Kelly, Banking Officer
U.S. BANK OF NEVADA, as a Bank
By: AMY ETHRIDGE ROBINSON
_________________________________________
Amy Ethridge, Vice President
The undersigned agrees and consents
to the foregoing:
CIRCUS CIRCUS ENTERPRISES, INC.
By: CLYDE T. TURNER
________________________________________
Title: Chairman / Chief Executive Officer
_________________________________________
-3-
<TABLE>
<CAPTION>
EXHIBIT 11
MIRAGE RESORTS, INCORPORATED
COMPUTATION OF NET INCOME PER SHARE
OF COMMON STOCK
Three Months Six Months
Ended June 30, Ended June 30,
________________________ ________________________
1995 1994 1995 1994
__________ __________ __________ __________
<S> <C> <C> <C> <C>
Weighted-average shares outstanding 91,142,587 90,844,460 91,112,018 90,784,838
Assumed exercise of options at
average market price 5,003,857 3,551,411 4,601,262 4,063,975
___________ ___________ ___________ ___________
Weighted-average shares outstanding
and common stock equivalents used
in the computation of primary
earnings per share 96,146,444 94,395,871 95,713,280 94,848,813
Additional shares issuable upon
the assumed exercise of options
at period-end market price 111,678 - 514,273 -
___________ ___________ ___________ ___________
Total shares outstanding assuming
full dilution 96,258,122 94,395,871 96,227,553 94,848,813
=========== =========== =========== ===========
Net income $28,618,000 $25,598,000 $73,494,000 $48,946,000
=========== =========== =========== ===========
Primary earnings per share $0.30 $0.27 $0.77 $0.52
===== ===== ===== =====
Fully diluted earnings per share $0.30 $0.27 $0.76 $0.52
===== ===== ===== =====
</TABLE>
EXHIBIT 15
August 11, 1995
To Mirage Resorts, Incorporated:
We are aware that Mirage Resorts, Incorporated has incorporated
by reference in its Registration Statements on Form S-8 (File No.
33-16037), on Form S-8 (File No. 33-48394), on Form S-8 (File No.
33-63804), and on Form S-8 (File No. 33-60183) its Form 10-Q for
the quarter ended June 30, 1995, which includes our report dated
August 11, 1995 covering the unaudited interim financial
information contained therein. Pursuant to Regulation C of the
Securities Act of 1933, that report is not considered a part of
these registration statements or a report prepared or certified
by our firm within the meaning of Sections 7 and 11 of the Act.
Very truly yours,
ARTHUR ANDERSEN LLP
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1995 AND THE
RELATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS FOR THE SIX
MONTHS ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 33,958
<SECURITIES> 0
<RECEIVABLES> 103,405
<ALLOWANCES> 48,439
<INVENTORY> 24,589
<CURRENT-ASSETS> 169,667
<PP&E> 1,796,694
<DEPRECIATION> 430,662
<TOTAL-ASSETS> 1,673,864
<CURRENT-LIABILITIES> 133,361
<BONDS> 298,344
<COMMON> 940
0
0
<OTHER-SE> 1,108,141
<TOTAL-LIABILITY-AND-EQUITY> 1,673,864
<SALES> 0
<TOTAL-REVENUES> 652,068
<CGS> 0
<TOTAL-COSTS> 369,140
<OTHER-EXPENSES> 42,292
<LOSS-PROVISION> 11,371
<INTEREST-EXPENSE> 13,565
<INCOME-PRETAX> 125,714
<INCOME-TAX> 45,435
<INCOME-CONTINUING> 80,279
<DISCONTINUED> 0
<EXTRAORDINARY> (6,785)
<CHANGES> 0
<NET-INCOME> 73,494
<EPS-PRIMARY> 0.77
<EPS-DILUTED> 0
</TABLE>
