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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
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(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 1-6697
MIRAGE RESORTS, INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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NEVADA 88-0058016
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
3400 LAS VEGAS BOULEVARD SOUTH 89109
LAS VEGAS, NEVADA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (702) 791-7111
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common Stock ($.008 par value per share) New York Stock Exchange
Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K: _X_
The aggregate market value of the Registrant's Common Stock held by
non-affiliates (all persons other than executive officers or directors) of the
Registrant on March 1, 1995 (based on the closing price per share on the New
York Stock Exchange on that date) was $1,892,404,006.
The Registrant's Common Stock outstanding at March 1, 1995 was 91,100,283
shares.
Portions of the Registrant's definitive Proxy Statement for its May 25, 1995
Annual Meeting of Stockholders (which has not been filed as of the date of this
filing) are incorporated by reference into Part III.
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PART I
ITEM 1. BUSINESS
GENERAL
Mirage Resorts, Incorporated (the "Registrant" or the "Company"), through
wholly owned subsidiaries, owns and operates (i) The Mirage, a hotel-casino and
destination resort on the Las Vegas Strip, (ii) Treasure Island at The Mirage
("Treasure Island"), a hotel-casino resort adjacent to The Mirage, (iii) the
Golden Nugget, a hotel-casino in downtown Las Vegas and (iv) the Golden Nugget-
Laughlin, a hotel-casino in Laughlin, Nevada. The Registrant, through a wholly
owned subsidiary, owns the approximately 164-acre site of the former Dunes
Hotel, Casino and Country Club (the "Dunes") on the Las Vegas Strip and has
announced plans for construction of extensive new hotel, casino and resort
facilities on the property. The Registrant was incorporated in Nevada in 1949.
THE MIRAGE
The Registrant's wholly owned subsidiary, THE MIRAGE CASINO-HOTEL ("MCH"),
owns and operates The Mirage, which opened in 1989. The Mirage shares with
Treasure Island an approximately 116-acre site at the center of the Las Vegas
Strip.
The Mirage is a luxurious, tropically themed destination resort containing
approximately 2.7 million square feet in a 29-story Y-shaped hotel tower and an
expansive low-rise complex. The Mirage features a 95,500-square foot casino,
3,030 hotel rooms (including 265 suites), 14 villa and lanai suites,
approximately 82,000 square feet of meeting, convention and banquet space, a
parking garage with space for approximately 2,200 vehicles, a valet parking
garage with space for approximately 1,830 vehicles shared with Treasure Island,
surface parking for approximately 1,650 vehicles, a 1,500-seat showroom
featuring top-name entertainment (showcasing the world-famous illusionists
Siegfried & Roy), five international restaurants, a California-style pizza
restaurant, a coffee shop, a buffet, four bars (two of which feature live
entertainment), two snack/liquor bars, an ice cream parlor, a health spa and
beauty salon, a swimming pool and cabana area, a white tiger display and
extensive retail facilities. The exterior of the resort is landscaped with palm
trees, abundant foliage and more than four acres of lagoons and other water
features, centered around a 40-foot simulated volcano and waterfall. Each
evening, the volcano erupts at 15-minute intervals, spectacularly illuminating
the front of the resort. Inside the front entrance is an atrium with a tropical
garden and additional water features capped by a 150-foot glass dome. The atrium
has an advanced environmental control system and creative lighting and other
special effects designed to replicate the sights, sounds and fragrances of the
South Seas. Located at the rear of the hotel, adjacent to the swimming pool
area, is a dolphin habitat with adjoining food, beverage and retail facilities.
As of March 1, 1995, The Mirage's casino offered 119 table games (including
blackjack, craps, roulette, baccarat, mini-baccarat, pai gow, pai gow poker,
Caribbean stud poker and big six), keno, poker, a race and sports book and
approximately 2,255 slot machines and other coin-operated devices.
TREASURE ISLAND
The Registrant, through Treasure Island Corp. ("TI Corp."), a wholly owned
subsidiary of MCH, owns and operates Treasure Island, a pirate-themed
hotel-casino resort located on the same 116-acre site as The Mirage.
Construction of Treasure Island commenced in March 1992, and the facility opened
on October 26, 1993.
Treasure Island features a 75,000-square foot casino, 2,900 hotel rooms
(including 212 suites), a steak and seafood restaurant, a contemporary
Continental restaurant, an Italian specialties grill, a coffee shop, a buffet,
three snack bars, an ice cream parlor, five bars (two of which feature live
entertainment), a 1,500-seat showroom featuring an all-new production,
"Mystere," developed by the creators of the world-renowned Cirque du Soleil, and
an 18,000-square foot amusement arcade. Treasure Island also offers extensive
retail facilities, approximately 18,000 square feet of meeting and banquet
space, two wedding chapels, a swimming pool with a 230-foot mountain water
slide, a parking garage with space for approximately 2,400 vehicles and the
valet parking garage shared with The Mirage. The facade of Treasure Island,
fronting on the Las Vegas Strip, is an elaborate pirate village in which
full-scale replicas of a pirate ship and a British frigate periodically engage
in a pyrotechnic and
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special effects sea battle, culminating with the sinking of the frigate.
Management believes that the pirate-themed features of Treasure Island and its
proximity to The Mirage make it a "must see" attraction for Las Vegas visitors
and local residents.
As of March 1, 1995, Treasure Island's casino offered 79 table games
(including blackjack, craps, roulette, baccarat, mini-baccarat, let it ride, pai
gow, pai gow poker, Caribbean stud poker and big six), keno, poker, a race and
sports book and approximately 2,240 slot machines and other coin-operated
devices.
GOLDEN NUGGET
The Registrant's wholly owned subsidiary, GNLV, CORP. ("GNLV"), owns and
operates the Golden Nugget, a hotel-casino which, together with parking
facilities, occupies approximately two and one-half square blocks in downtown
Las Vegas. The Golden Nugget features a 38,000-square foot casino, 1,907 hotel
rooms (including 102 suites), two international restaurants, a California-style
pizza restaurant, a coffee shop, a buffet, a snack bar, three bars, an
entertainment lounge, a ballroom/ showroom, approximately 23,000 square feet of
meeting and banquet space, two gift and retail shops, two hotel lobbies with
guest registration facilities, a swimming pool and lounge area, a health spa, a
beauty salon and two parking garages with space for approximately 1,050
vehicles.
As of March 1, 1995, the Golden Nugget's casino offered 69 table games
(including blackjack, craps, roulette, baccarat, mini-baccarat, pai gow poker,
Caribbean stud poker, red dog and big six), keno, a race and sports book and
approximately 1,305 slot machines and other coin-operated devices.
GOLDEN NUGGET-LAUGHLIN
The Registrant's wholly owned subsidiary, GNL, CORP. ("GNL"), owns and
operates the Golden Nugget-Laughlin, a hotel-casino in Laughlin, Nevada. The
hotel-casino is located on approximately 13 acres with approximately 600 feet of
Colorado River frontage near the center of Laughlin's hotel-casino facilities.
The Golden Nugget-Laughlin includes a two-story low-rise featuring a
32,000-square foot casino, three restaurants, three bars, an entertainment
lounge, a deli and a gift and retail shop. The hotel is a four-story structure
located adjacent to the low-rise containing 296 standard rooms and four suites.
Other facilities at the Golden Nugget-Laughlin include a swimming pool, a
parking garage with space for approximately 1,585 vehicles and approximately
four and one-half acres of surface parking for recreational vehicles. The hotel
and a 50% expansion of the casino were completed in December 1992. GNL also owns
and operates a 78-room motel in Bullhead City, Arizona, across the Colorado
River from Laughlin.
As of March 1, 1995, the Golden Nugget-Laughlin's casino offered 20 table
games (including blackjack, craps, roulette, let it ride, pai gow poker and
Caribbean stud poker), approximately 1,215 slot machines and other coin-operated
devices, keno and a race and sports book.
IGUAZU FALLS, ARGENTINA JOINT VENTURE
The Registrant, through a wholly owned subsidiary, owns a 50% equity
interest in Mirage Universal de Misiones S.A., an Argentine corporation
("MUMSA"). In February 1994, MUMSA was awarded a 15-year concession by the
Province of Misiones, Argentina to develop, own and operate a casino near Iguazu
Falls, Argentina, one of South America's leading tourist attractions. The
Registrant's total investment in the venture of $4 million was contributed in
January 1994.
The new facility, named "Casino Iguazu," opened on July 6, 1994 and includes
an approximately 12,000-square foot casino, a restaurant, two bars and parking
for approximately 200 vehicles. As of March 1, 1995, the casino offered 26 table
games (including blackjack, roulette, baccarat and oasis stud poker) and
approximately 175 slot machines and other coin-operated devices.
FUTURE EXPANSION
In January 1993, the Registrant, through a wholly owned subsidiary,
purchased the approximately 164 acres on the Las Vegas Strip between Flamingo
Road and Tropicana Avenue formerly occupied by the Dunes. The Registrant
reopened the Dunes golf course to the public in February 1993
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as "The Mirage Golf Club" and operated it as an 18-hole championship course
until February 1995. Since that time, the Registrant has operated The Mirage
Golf Club as a nine-hole course in order to accommodate construction of the
Victoria Partners project discussed below. It intends to continue to operate the
nine-hole course until the commencement of construction of Beau Rivage discussed
below. Net profits from operation of The Mirage Golf Club are being recorded as
a reduction in the carrying value of the Dunes site.
The Registrant is planning to construct a major new luxury casino-based
entertainment resort, to be named "Beau Rivage," on the northern portion of the
Dunes property at the corner of Flamingo Road and the Strip. Beau Rivage is
expected to be the most ambitious and complex facility that the Registrant has
ever developed. Management is determined to infuse the project with
extraordinary originality and creativity. Management is also determined to
design the facility so that it can be constructed for less than $1 billion. The
Registrant preliminarily intends to break ground on Beau Rivage in the second
half of 1995, perhaps in the third quarter, and anticipates a construction
schedule of approximately 30 months. The Registrant's design and planning of
this complex project is anticipated to be completed within the next few months,
when a more definitive budget and construction schedule should be available. The
Registrant expects that the project will be financed by borrowings under its
bank credit facility and internally generated funds.
The Registrant, through a wholly owned subsidiary, owns a 50% equity
interest in Victoria Partners, a joint venture partnership which is planning to
construct a new themed hotel-casino resort on approximately 44 acres on the
southern portion of the Dunes property near Tropicana Avenue. As presently
planned, the resort will feature approximately 3,000 guest rooms and an
88,000-square foot casino. The resort will be designed and marketed to appeal to
the value-minded Las Vegas visitor. The Registrant's partner in the venture is a
partnership composed principally of the owners of the Gold Strike, Nevada
Landing and Railroad Pass hotel-casinos in Jean and Henderson, Nevada, which
have entered into an agreement to be acquired by Circus Circus Enterprises, Inc.
The Registrant's partner will supervise the design and construction and will
manage the resort without fee.
Site development for the project has recently begun and the project is
expected to be completed by the fall of 1996. Based on preliminary estimates,
the total cost of the project is anticipated to be between $250 million and $275
million. This amount excludes the value of the land, which the Registrant is
contributing as equity to Victoria Partners.
Victoria Partners 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 partnership and is non-recourse to the
Registrant. The balance of the project costs will be provided primarily by an
equity contribution from the Registrant's partner and by an equity contribution
from the Registrant of up to $20 million.
As with any major construction effort, the Beau Rivage and Victoria Partners
projects will involve many risks, including shortages of materials and labor,
work stoppages, labor disputes, weather interference, unforeseen engineering,
environmental or geological problems and unanticipated cost increases, any of
which could give rise to delays or cost overruns. Construction, equipment or
staffing problems or difficulties in obtaining any of the requisite licenses,
permits, allocations and authorizations from regulatory authorities could
increase the cost or delay the construction or opening of the facilities or
otherwise affect their design and features. The anticipated project costs and
construction schedules are based on preliminary budgets, conceptual design
documents and estimates prepared by the Registrant's design, purchasing and
construction management subsidiary and the Registrant's partner in Victoria
Partners. However, the existing budgets and construction plans for the projects
may be changed and the scope and cost of the projects may vary significantly
from that which are currently anticipated. Accordingly, there can be no
assurance that the projects will be completed within the time periods or budgets
which are currently contemplated.
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The Registrant regularly evaluates and pursues potential expansion and
acquisition opportunities in both the domestic and international markets. Such
opportunities may include the ownership, management and operation of gaming and
other entertainment facilities in states other than Nevada or outside of the
United States, either alone or with joint venture partners. Development and
operation of any gaming facility in a new jurisdiction is subject to numerous
contingencies, several of which are outside of the Registrant's control and may
include the enactment of appropriate gaming legislation, the issuance of
requisite permits, licenses and approvals, the availability of appropriate
financing and the satisfaction of other conditions. There can be no assurance
that the Registrant will elect or be able to consummate any such acquisition or
expansion opportunity.
In January 1995, the Registrant, through a wholly owned subsidiary, entered
into a limited partnership agreement with a joint venture partner with respect
to the development, ownership and operation of a hotel-casino and entertainment
complex in Bridgeport, Connecticut. In February 1995, the Registrant entered
into a preliminary joint venture agreement with a partner in Detroit, Michigan
with respect to the development, ownership and operation of a hotel-casino and
entertainment complex in that city. In each case, development of the proposed
projects is subject to the enactment of appropriate state casino enabling
legislation and regulations and local ordinances, the receipt of state gaming
licenses and extensive governmental approvals and other contingencies, including
acquisition of project sites and the availability of suitable financing.
Accordingly, there can be no assurance that the Registrant will determine or be
able to proceed with either project.
In January 1995, the Registrant filed an application with the New Jersey
Casino Control Commission for requalification as a holding company of a New
Jersey casino licensee. A wholly owned subsidiary of the Registrant was the
developer and operator of the former Golden Nugget hotel-casino on the Atlantic
City Boardwalk, which opened in December 1980 and was sold by the Registrant in
March 1987. If the application is granted, a subsidiary of the Registrant could
apply for a license as the owner and operator of a hotel-casino in Atlantic
City. The Registrant has owned approximately 14 1/2 acres of unimproved land in
the Marina area of Atlantic City for many years and has had recent discussions
with the New Jersey gaming authorities and the City of Atlantic City with
respect to the acquisition of additional property. Although it has filed the
application, the Registrant is still in the process of evaluating the potential
profitability of an investment in Atlantic City. Accordingly, there can be no
assurance that such a project will ultimately be developed.
MARKETING
Operations at the Registrant's hotel-casinos are conducted 24 hours a day,
every day of the year. The Registrant does not consider its business to be
highly seasonal.
The Registrant's revenues and operating income depend primarily upon the
level of gaming activity at its casinos, although the Registrant also seeks to
maximize revenues from food and beverage, lodging, entertainment and retail
operations. Therefore, the primary goal of the Registrant's marketing efforts is
to attract gaming customers to its casinos.
The principal segments of the Nevada gaming market are tour and travel,
leisure travel, high-level wagerers and conventions (including small meetings
and corporate incentive programs). The Registrant believes that The Mirage's
hotel occupancy and gaming revenues can be maximized through a balanced
marketing approach addressing each market segment. The Registrant's marketing
strategy for Treasure Island and the Golden Nugget is aimed at attracting
middle- to upper-middle-income wagerers, largely from the leisure travel and
tour and travel segments. The Registrant believes that the success of its
hotel-casinos is also affected by the level of walk-in customers and,
accordingly, has designed its facilities to maximize their attraction to these
patrons.
The tour and travel segment consists of gaming customers who take advantage
of travel "packages" produced by wholesale operators. The Registrant has
relationships with wholesalers selected on
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the basis of market penetration, reputation and commitment. Tour and travel
trade emphasizes mid-week occupancy, as compared with the regionally based
leisure travel segment, which is primarily weekend-oriented.
The leisure travel segment is largely composed of individuals traveling to
Las Vegas from the regional market, primarily Southern California and the
Southwest, by automobile and, to a lesser extent, by airplane. This segment
represents a significant portion of the customers for the Registrant's
facilities. As with the tour and travel business, The Mirage aims to attract the
upper-middle and higher-income strata of this segment, while the focus of
Treasure Island and the Golden Nugget is on the middle- to upper-middle-income
strata of the leisure travel segment.
The Registrant markets to the high-level-wagerer segment primarily through
direct sales, using its marketing offices located in a number of major domestic
and foreign cities. Special entertainment and other events and programs,
including golf privileges at Shadow Creek as discussed below, together with the
provision of complimentary rooms, food and beverage and air transportation and
the extension of gaming credit, are offered to attract high-level wagerers. The
Registrant employs several marketing executives who have extensive customer
relationships in certain areas of Asia, Latin America and Canada, as well as
casino hosts from many of the countries to which international marketing efforts
are directed.
Convention business, like the tour and travel segment, is mid-week oriented,
and is a major target for The Mirage, with its 82,000 square feet of meeting,
convention and banquet space. The Mirage seeks those conventions whose
participants have the best gaming profile. Treasure Island's and a portion of
The Mirage's convention business is derived from small corporate meetings and
corporate incentive programs (travel packages produced by independent "incentive
houses" for companies desiring to motivate their employees and reward them for
superior performance).
As discussed under "Future Expansion," the Registrant operates The Mirage
Golf Club at the Dunes site and plans to continue to do so until the
commencement of construction of Beau Rivage. The Registrant makes reduced green
fees and preferential tee times at The Mirage Golf Club available to guests of
its hotels. Management believes that The Mirage Golf Club has been beneficial to
the Registrant's marketing efforts.
The Golden Nugget-Laughlin appeals primarily to patrons from the
middle-income strata of the gaming populace. Many of the Golden
Nugget-Laughlin's customers are older and retired individuals who are attracted
by lodging, food and beverage and entertainment prices that are generally lower
than those offered by the major Las Vegas hotel-casinos. The predominant portion
of the Golden Nugget-Laughlin's casino revenues (87% in 1994) is derived from
slot machine play.
The Registrant, through a wholly owned subsidiary of MCH, owns approximately
305 acres of property located approximately 10 miles from The Mirage and
Treasure Island and five miles from the Golden Nugget. The Registrant has
developed an exclusive world-class golf course and related facilities known as
"Shadow Creek" on approximately 80% of such property. In connection with its
marketing activities, the Registrant makes the course and related facilities
available for use, by invitation only, by high-level-wagerer patrons.
CREDIT
Credit play represents a significant portion of the table games volume at
The Mirage. The Registrant's other facilities do not emphasize credit play to
the same extent as The Mirage, although credit is made available.
The Registrant maintains strict controls over the issuance of credit and
aggressively pursues collection of its customer receivables. These collection
efforts parallel those procedures commonly followed by most large corporations,
including the mailing of statements and delinquency notices, personal contacts,
the use of outside collection agencies and civil litigation. Nevada gaming debts
evidenced by credit instruments are enforceable under the laws of Nevada. All
other states are
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required to enforce a judgment on a gaming debt entered in Nevada pursuant to
the Full Faith and Credit Clause of the United States Constitution. Although
gaming debts are not legally enforceable in some foreign countries, the United
States assets of foreign debtors may be reached to satisfy a judgment entered in
the United States.
SUPERVISION OF GAMING ACTIVITIES
In connection with the supervision of gaming activities at its casinos, the
Registrant maintains stringent controls on the recording of all receipts and
disbursements. These audit and cash controls include the following: locked cash
boxes; personnel independent of casino operations to perform the daily cash and
coin counts; floor observation of the gaming area; observation of gaming and
certain other areas through the use of closed-circuit television; computer
tabulation of receipts and disbursements for each of the slot machines and table
games; and timely analysis of discrepancies or deviations from normal
performance.
INSURANCE AND FIRE SAFETY MEASURES
The Registrant maintains extensive property damage, business interruption
and general liability insurance. Safety and protection have been, and continue
to be, of maximum concern in the construction and expansion of the Registrant's
facilities. The Mirage, Treasure Island, the high-rise towers of the Golden
Nugget and the Golden Nugget-Laughlin were constructed pursuant to modern
stringent fire codes, and generally exceed such codes. The Mirage, Treasure
Island and the Golden Nugget is each rated by insurance companies as a "highly
protected risk."
COMPETITION
The Mirage, Treasure Island and the Golden Nugget each competes with a
number of other hotel-casinos in Las Vegas. Currently, there are approximately
26 major hotel-casinos located on or near the Las Vegas Strip, nine major
hotel-casinos located in the downtown area and several major facilities located
elsewhere in the Las Vegas area. During 1993 and 1994 (principally during the
1993 fourth quarter), Las Vegas hotel and motel room capacity increased by
approximately 12,000 rooms, to a total of approximately 85,400 rooms. This
increase includes the effect of the opening of Treasure Island and two other
major Strip hotel-casinos in the 1993 fourth quarter.
Management believes that the primary competition for The Mirage comes from
other large hotel-casinos located on or near the Strip that offer amenities and
marketing programs that appeal to the upper-middle and higher-income strata of
the gaming populace. The Mirage competes on the basis of the elegance and
excitement offered by the facility, the desirability of its location, the
quality and relative value of its hotel rooms and restaurants, its top-name
entertainment, customer service, its balanced marketing strategy and special
marketing and promotional programs.
Management believes that Treasure Island primarily competes with other large
hotel-casinos located on or near the Strip that offer amenities and marketing
programs that appeal to the middle- to upper-middle-income strata of the gaming
populace. Treasure Island competes on the basis of the entertainment and
excitement offered by the facility, the desirability of its location (including
its proximity to The Mirage), the affordability of its hotel rooms, the variety,
quality and attractive pricing of its food and beverage outlets, its unique
showroom and innovative amusement arcade, customer service and its marketing and
promotional programs.
Management believes that the Golden Nugget primarily competes with the large
hotel-casinos located on or near the Strip, particularly those offering
amenities and marketing programs that appeal primarily to the middle- and
upper-middle-income strata of the gaming populace. The Golden Nugget competes
for gaming customers primarily on the basis of the elegance, intimacy and
excitement offered by the facility, the quality and relative value of its hotel
rooms and restaurants, customer service and its marketing and promotional
programs. In order to compete more effectively with the Strip hotel-casinos, a
coalition of several major downtown Las Vegas hotel-casinos (including the
Golden Nugget), in conjunction with the City of Las Vegas, is constructing the
"Fremont Street Experience," a major tourist attraction in the downtown area.
This public/private-sector development
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project will tie together the casinos on Fremont Street with a pedestrian mall
topped with a "celestial vault." The Fremont Street Experience will also include
retail facilities and a large parking garage, which is much needed in downtown
Las Vegas. The project is scheduled to be completed in late 1995.
The Golden Nugget-Laughlin competes with eight nearby hotel-casinos in
Laughlin, as well as with hotel-casinos in Las Vegas, Jean and Stateline, Nevada
and a growing number of casinos on Indian reservations in Laughlin's regional
market. During 1993 and 1994, the number of available hotel rooms in Laughlin
increased by approximately 1,800 rooms, to a total of approximately 11,100
rooms.
The Registrant's facilities also compete for gaming customers with
hotel-casino operations located in other areas of Nevada, Atlantic City and
other parts of the world. They also compete for vacationers with non-gaming
tourist destinations such as Hawaii and Florida. The Registrant's hotel-casinos
compete to a lesser extent with state-sponsored lotteries, off-track wagering,
card parlors, riverboat and Indian gaming ventures and other forms of legalized
gaming in the United States, as well as with gaming on cruise ships. Certain
states have recently legalized, and several other states are currently
considering legalizing, casino gaming. Management does not believe that such
legalization of casino gaming in those jurisdictions will have a material
adverse impact on the Registrant's operations. However, management believes that
the legalization of large-scale land-based casino gaming in or near certain
major metropolitan areas, particularly in California, could have a material
adverse effect on the Las Vegas market.
EMPLOYEES AND LABOR RELATIONS
As of March 1, 1995, the Registrant and its subsidiaries had approximately
14,500 full-time and 2,300 part-time employees. At that date, the Registrant had
collective bargaining contracts with unions covering approximately 7,100 of its
Las Vegas employees, which expire in May 1997. Although unions have been active
in Las Vegas, management considers its employee relations to be excellent.
REGULATION AND LICENSING
The ownership and operation of casino gaming facilities in Nevada are
subject to (i) the Nevada Gaming Control Act and the regulations promulgated
thereunder (collectively, the "Nevada Act") and (ii) various local ordinances
and regulations. The Registrant's gaming operations are subject to the licensing
and regulatory control of the Nevada Gaming Commission (the "Nevada
Commission"), the Nevada State Gaming Control Board (the "Nevada Board"), the
City of Las Vegas and the Clark County Liquor and Gaming Licensing Board (the
"Clark County Board"). The Nevada Commission, the Nevada Board, the City of Las
Vegas and the Clark County Board are collectively referred to as the "Nevada
Gaming Authorities." To the best knowledge of management, the Registrant and its
subsidiaries are presently in material compliance with all applicable laws,
regulations and supervisory procedures described herein.
The laws, regulations and supervisory procedures of the Nevada Gaming
Authorities are based upon declarations of public policy which are concerned
with, among other things: (i) the prevention of unsavory or unsuitable persons
from having a direct or indirect involvement with gaming at any time or in any
capacity; (ii) the establishment and maintenance of responsible accounting
practices and procedures; (iii) the maintenance of effective controls over the
financial practices of licensees, including the establishment of minimum
procedures for internal fiscal affairs and the safeguarding of assets and
revenues, providing reliable record keeping and requiring the filing of periodic
reports with the Nevada Gaming Authorities; (iv) the prevention of cheating and
fraudulent practices; and (v) providing a source of state and local revenues
through taxation and licensing fees. Change in such laws, regulations and
procedures could have an adverse effect on the Registrant's gaming operations.
The Registrant's direct and indirect subsidiaries that conduct gaming
operations are required to be licensed by the Nevada Gaming Authorities. The
gaming licenses require the periodic payment of fees and taxes and are not
transferable. MCH is registered as an intermediary company and has been found
suitable to own the stock of TI Corp. MCH has also been licensed to conduct
nonrestricted
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gaming operations at The Mirage. TI Corp. has been licensed to conduct
nonrestricted gaming operations at Treasure Island. GNLV has been registered as
an intermediary company and has been found suitable to own the stock of Golden
Nugget Manufacturing Corp. ("GNMC"), its inactive subsidiary which is licensed
as a manufacturer and distributor of gaming devices. GNLV has also been licensed
to conduct nonrestricted gaming operations at the Golden Nugget. GNL has been
licensed to conduct nonrestricted gaming operations at the Golden
Nugget-Laughlin. Beau Rivage, the Registrant's subsidiary which owns the Dunes
site, has been licensed to conduct restricted gaming operations (i.e., 15 or
fewer slot machines) at The Mirage Golf Club. The Registrant is registered by
the Nevada Commission as a publicly traded corporation (a "Registered
Corporation") and has been found suitable to own the stock of MCH, GNLV, GNL and
Beau Rivage, each of which, together with TI Corp. and GNMC, is a corporate
licensee (individually, a "Gaming Subsidiary" and collectively, the "Gaming
Subsidiaries") under the Nevada Act.
As a Registered Corporation, the Registrant is required periodically to
submit detailed financial and operating reports to the Nevada Commission and
furnish any other information which the Nevada Commission may require. No person
may become a stockholder of, or receive any percentage of profits from, the
Gaming Subsidiaries without first obtaining licenses and approvals from the
Nevada Gaming Authorities. The Registrant and the Gaming Subsidiaries have
obtained from the Nevada Gaming Authorities the various registrations, findings
of suitability, approvals, permits and licenses required in order to engage in
gaming activities in Nevada. The Nevada Gaming Authorities may investigate any
individual who has a material relationship to, or material involvement with, the
Registrant or the Gaming Subsidiaries in order to determine whether such
individual is suitable or should be licensed as a business associate of a gaming
licensee. Officers, directors and certain key employees of the Gaming
Subsidiaries must file applications with the Nevada Gaming Authorities and may
be required to be licensed or found suitable by the Nevada Gaming Authorities.
Officers, directors and key employees of the Registrant who are actively and
directly involved in gaming activities of the Gaming Subsidiaries may be
required to be licensed or found suitable by the Nevada Gaming Authorities. The
Nevada Gaming Authorities may deny an application for licensing for any cause
which they deem reasonable. A finding of suitability is comparable to licensing,
and both require submission of detailed personal and financial information
followed by a thorough investigation. The applicant for licensing or a finding
of suitability must pay all the costs of the investigation. Changes in licensed
positions must be reported to the Nevada Gaming Authorities, and in addition to
their authority to deny an application for a finding of suitability or
licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a
change in a corporate position.
If the Nevada Gaming Authorities were to find an officer, director or key
employee unsuitable for licensing or unsuitable to continue having a
relationship with the Registrant or the Gaming Subsidiaries, the companies
involved would have to sever all relationships with such person. In addition,
the Nevada Commission may require the Registrant or the Gaming Subsidiaries to
terminate the employment of any person who refuses to file appropriate
applications. Determinations of suitability or of questions pertaining to
licensing are not subject to judicial review in Nevada.
The Registrant, MCH, GNLV, GNL and TI Corp. are required to submit detailed
financial and operating reports to the Nevada Commission. Substantially all
material loans, leases, sales of securities and similar financing transactions
entered into by MCH, GNLV, GNL or TI Corp. must be reported to or approved by
the Nevada Commission.
If it were determined that the Nevada Act was violated by a Gaming
Subsidiary, the licenses it holds could be limited, conditioned, suspended or
revoked, subject to compliance with certain statutory and regulatory procedures.
In addition, the Registrant, the Gaming Subsidiaries and the persons involved
could be subject to substantial fines for each separate violation of the Nevada
Act at the discretion of the Nevada Commission. Further, a supervisor could be
appointed by the Nevada Commission to operate The Mirage, Treasure Island, the
Golden Nugget and the Golden Nugget-Laughlin and, under certain circumstances,
earnings generated during the supervisor's appointment (except for the
reasonable rental value of the casino) could be forfeited to the State of
Nevada.
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<PAGE>
Limitation, conditioning or suspension of the gaming license of a Gaming
Subsidiary or the appointment of a supervisor could (and revocation of any
gaming license would) materially adversely affect the Registrant's gaming
operations.
Any beneficial holder of the Registrant's voting securities, regardless of
the number of shares owned, may be required to file an application, be
investigated and have his suitability as a beneficial holder of the Registrant's
voting securities determined if the Nevada Commission has reason to believe that
such ownership would be inconsistent with the declared policies of the State of
Nevada. The applicant must pay all costs of investigation incurred by the Nevada
Gaming Authorities in conducting any such investigation.
The Nevada Act requires any person who acquires more than 5% of a Registered
Corporation's voting securities to report the acquisition to the Nevada
Commission. The Nevada Act requires that beneficial owners of more than 10% of a
Registered Corporation's voting securities apply to the Nevada Commission for a
finding of suitability within 30 days after the Chairman of the Nevada Board
mails a written notice requiring such filing. Under certain circumstances, an
"institutional investor," as defined in the Nevada Act, which acquires more than
10%, but not more than 15%, of a Registered Corporation's voting securities may
apply to the Nevada Commission for a waiver of such finding of suitability
requirement if such institutional investor holds the voting securities for
investment purposes only. An institutional investor shall not be deemed to hold
voting securities for investment purposes unless the voting securities were
acquired and are held in the ordinary course of business as an institutional
investor and not for the purpose of causing, directly or indirectly, the
election of a majority of the members of the board of directors of the
Registered Corporation, any change in the corporate charter, bylaws, management,
policies or operations of the Registered Corporation or any of its gaming
affiliates or any other action which the Nevada Commission finds to be
inconsistent with holding the Registered Corporation's voting securities for
investment purposes only. Activities which are not deemed to be inconsistent
with holding voting securities for investment purposes only include: (i) voting
on all matters voted on by stockholders; (ii) making financial and other
inquiries of management of the type normally made by securities analysts for
informational purposes and not to cause a change in its management, policies or
operations; and (iii) such other activities as the Nevada Commission may
determine to be consistent with such investment intent. The City of Las Vegas
requires 10% stockholders to be licensed. If the beneficial holder of voting
securities who must be found suitable is a corporation, partnership or trust, it
must submit detailed business and financial information, including a list of
beneficial owners. The applicant is required to pay all costs of investigation.
Any person who fails or refuses to apply for a finding of suitability or a
license within 30 days after being ordered to do so by the Nevada Commission or
the Chairman of the Nevada Board may be found unsuitable. The same restrictions
apply to a record owner if the record owner, after request, fails to identify
the beneficial owner. Any stockholder found unsuitable who holds, directly or
indirectly, any beneficial ownership of the common stock beyond such period of
time as may be prescribed by the Nevada Commission may be guilty of a criminal
offense. The Registrant is subject to disciplinary action if, after it receives
notice that a person is unsuitable to be a stockholder or to have any other
relationship with the Registrant or the Gaming Subsidiaries, the Registrant (i)
pays such person any dividend or interest upon voting securities of the
Registrant, (ii) allows such person to exercise, directly or indirectly, any
voting right conferred through securities held by that person, (iii) pays
remuneration in any form to such person for services rendered or otherwise or
(iv) fails to pursue all lawful efforts to require such person to relinquish his
voting securities including, if necessary, the immediate purchase of the voting
securities for cash at fair market value. Additionally, the Clark County Board
has the authority to approve all persons owning or controlling the stock of any
corporation controlling a gaming licensee.
The Nevada Commission may, in its discretion, require the holder of any debt
security of a Registered Corporation to file applications, be investigated and
be found suitable to own the debt security. If the Nevada Commission determines
that a person is unsuitable to own such security, then
9
<PAGE>
pursuant to the Nevada Act, the Registered Corporation can be sanctioned,
including the loss of its approvals, if without the prior approval of the Nevada
Commission, it: (i) pays to the unsuitable person any dividend, interest or any
distribution whatsoever; (ii) recognizes any voting right by such unsuitable
person in connection with such securities; (iii) pays the unsuitable person
remuneration in any form; or (iv) makes any payment to the unsuitable person by
way of principal, redemption, conversion, exchange, liquidation or similar
transaction.
The Registrant is required to maintain a current stock ledger in Nevada
which may be examined by the Nevada Gaming Authorities at any time. If any
securities are held in trust by an agent or nominee, the record holder may be
required to disclose the identity of the beneficial owner to the Nevada Gaming
Authorities. A failure to make such disclosure may be grounds for finding the
record holder unsuitable. The Registrant is also required to render maximum
assistance in determining the identity of the beneficial owner. The Nevada
Commission has the power to require the Registrant's stock certificates to bear
a legend indicating that the securities are subject to the Nevada Act. To date,
the Nevada Commission has not imposed such a requirement on the Registrant.
The Registrant may not make a public offering of its securities without the
prior approval of the Nevada Commission if the securities or proceeds therefrom
are intended to be used to construct, acquire or finance gaming facilities in
Nevada or to retire or extend obligations incurred for such purposes. In May
1994, the Nevada Commission granted the Registrant prior approval to make public
offerings for a period of one year, subject to certain conditions (the "Shelf
Approval"). However, the Shelf Approval may be rescinded for good cause without
prior notice upon the issuance of an interlocutory stop order by the Chairman of
the Nevada Board. The Shelf Approval also applies to any affiliated company
wholly owned by the Registrant (an "Affiliate") which is a publicly traded
corporation or would thereby become a publicly traded corporation pursuant to a
public offering. The Shelf Approval also includes approval for the Gaming
Subsidiaries to guarantee any security issued by, or to hypothecate their assets
to secure the payment or performance of any obligations issued by, the
Registrant or an Affiliate in a public offering under the Shelf Approval. The
Shelf Approval does not constitute a finding, recommendation or approval by the
Nevada Commission or the Nevada Board as to the accuracy or adequacy of the
prospectus or the investment merits of the securities offered. Any
representation to the contrary is unlawful. The Registrant has filed an
application for a renewal of the Shelf Approval, which it anticipates will be
considered by the Nevada Board and the Nevada Commission in May 1995.
Changes in control of the Registrant through merger, consolidation, stock or
asset acquisitions, management or consulting agreements or any act or conduct by
a person whereby he obtains control may not occur without the prior approval of
the Nevada Commission. Entities seeking to acquire control of a Registered
Corporation must satisfy the Nevada Board and Nevada Commission with respect to
a variety of stringent standards prior to assuming control of such Registered
Corporation. The Nevada Commission may also require controlling stockholders,
officers, directors and other persons having a material relationship or
involvement with the entity proposing to acquire control to be investigated and
licensed as part of the approval process relating to the transaction.
The Nevada Legislature has declared that some corporate acquisitions opposed
by management, repurchases of voting securities and corporate defensive tactics
affecting Nevada corporate gaming licensees, and Registered Corporations that
are affiliated with those operations, may be injurious to stable and productive
corporate gaming. The Nevada Commission has established a regulatory scheme to
ameliorate the potentially adverse effects of these business practices upon
Nevada's gaming industry and to further Nevada's policy to: (i) assure the
financial stability of corporate gaming licensees and their affiliates; (ii)
preserve the beneficial aspects of conducting business in the corporate form;
and (iii) promote a neutral environment for the orderly governance of corporate
affairs. Approvals are, in certain circumstances, required from the Nevada
Commission before the Registered Corporation can make exceptional repurchases of
voting securities above the current market price thereof and before a corporate
acquisition opposed by management can be consummated. The Nevada
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<PAGE>
Act also requires prior approval of a plan of recapitalization proposed by the
Registered Corporation's board of directors in response to a tender offer made
directly to the Registered Corporation's stockholders for the purpose of
acquiring control of the Registered Corporation.
License fees and taxes, computed in various ways depending on the type of
gaming or activity involved, are payable to the State of Nevada and to Clark
County and the City of Las Vegas, in which the Gaming Subsidiaries' respective
operations are conducted. Depending upon the particular fee or tax involved,
these fees and taxes are payable either monthly, quarterly or annually and are
based upon either: (i) a percentage of the gross revenues received; (ii) the
number of gaming devices operated; or (iii) the number of table games operated.
A casino entertainment tax is also paid by casino operations where entertainment
is furnished in connection with the selling of food or refreshments. Nevada
licensees that hold a manufacturer's or distributor's license, such as GNMC,
also pay certain fees to the State of Nevada.
Any person who is licensed, required to be licensed, registered, required to
be registered or is under common control with such persons (collectively,
"Licensees"), and who proposes to become involved in a gaming venture outside of
Nevada, is required to deposit with the Nevada Board, and thereafter maintain, a
revolving fund in the amount of $10,000 to pay the expenses of investigation by
the Nevada Board of its participation in such foreign gaming. The revolving fund
is subject to increase or decrease at the discretion of the Nevada Commission.
Thereafter, Licensees are required to comply with certain reporting requirements
imposed by the Nevada Act. Licensees are also subject to disciplinary action by
the Nevada Commission if they knowingly violate any laws of the foreign
jurisdiction pertaining to the foreign gaming operation, fail to conduct the
foreign gaming operation in accordance with the standards of honesty and
integrity required of Nevada gaming operations, engage in activities that are
harmful to the State of Nevada or its ability to collect gaming taxes and fees
or employ a person in the foreign operation who has been denied a license or
finding of suitability in Nevada on the ground of personal unsuitability.
The sale of alcoholic beverages at The Mirage, Treasure Island, the Golden
Nugget-Laughlin and The Mirage Golf Club, and the sale of alcoholic beverages at
the Golden Nugget, are subject to licensing, control and regulation by the Clark
County Board and the City of Las Vegas, respectively. All licenses are revocable
and are not transferable. The agencies involved have full power to limit,
condition, suspend or revoke any such license, and any such disciplinary action
could (and revocation would) have a material adverse effect on the operations of
the Gaming Subsidiaries.
ITEM 2. PROPERTIES
The Mirage and Treasure Island share an approximately 116-acre site owned by
the Registrant on the Las Vegas Strip. At March 1, 1995, both The Mirage and
Treasure Island were subject to aggregate encumbrances approximating $221.6
million, including amounts based upon the accreted value of zero coupon first
mortgage notes. Such amount also includes the approximately $126.0 million
principal amount of 9 7/8% first mortgage notes which were called for redemption
on March 13, 1995 and will be redeemed on April 12, 1995.
The Golden Nugget, including parking facilities, occupies approximately
seven and one-half acres in downtown Las Vegas. The improvements and
approximately 90% of the underlying land are owned by the Registrant, with the
remaining land being held under three separate ground leases that expire (after
giving effect to renewal options) on dates ranging from 2025 to 2046.
The Golden Nugget-Laughlin, including adjacent parking facilities, and GNL's
motel in Bullhead City, Arizona, occupy an aggregate of approximately 15 1/2
acres. All of the property is owned by the Registrant.
The Dunes site comprises approximately 164 acres owned by the Registrant on
the Las Vegas Strip. The Dunes site is subject to a blanket encumbrance
collateralizing the Registrant's $525 million bank credit facility. At March 1,
1995, there were no borrowings outstanding under the facility.
11
<PAGE>
The Registrant owns approximately 305 acres of land in North Las Vegas.
Shadow Creek occupies approximately 80% of such property. Shadow Creek is
subject to the blanket encumbrance collateralizing the Registrant's bank credit
facility.
The Registrant also owns or leases various improved and unimproved property,
and holds options to purchase or lease property, in Las Vegas, Atlantic City and
other locations in the United States and certain foreign countries.
ITEM 3. LEGAL PROCEEDINGS
On April 26, 1994, a purported class action lawsuit was filed in the United
States District Court for the Middle District of Florida against 41
manufacturers, distributors and casino operators of video poker and electronic
slot machines, including the Registrant and most of the other major hotel-casino
companies. On May 10, 1994, a purported class action lawsuit alleging
substantially identical claims was filed by another plaintiff in the same court
against 48 defendants, including the Registrant. The two lawsuits have been
consolidated into a single action and transferred to the United States District
Court for the District of Nevada. The consolidated case alleges that the
defendants have engaged in a course of fraudulent and misleading conduct
intended to induce persons to play video poker and electronic slot machines by
collectively misrepresenting how the gaming machines operate, as well as the
extent to which there is an opportunity to win. The case alleges violations of
the Racketeer Influenced and Corrupt Organizations Act, as well as claims of
common law fraud, unjust enrichment and negligent misrepresentation, and seeks
unspecified compensatory and punitive damages. The Registrant and other
defendants have moved to dismiss the complaint for failure to state a claim. No
hearing has been set on this motion. Management believes that the claims are
without merit and intends to defend the case vigorously.
The Registrant (including its subsidiaries) is also a defendant in various
other lawsuits, most of which relate to routine matters incidental to its
business. Management does not believe that the outcome of such pending
litigation, in the aggregate, will have a material adverse effect on the
Registrant.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
fourth quarter of 1994.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Registrant's common stock is traded on the New York and Pacific Stock
Exchanges under the symbol MIR. The following table sets forth, for the calendar
quarters indicated, the high and low sale prices of the common stock on the New
York Stock Exchange.
<TABLE>
<CAPTION>
1994 1993
-------------------- --------------------
HIGH LOW HIGH LOW
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
First quarter................................................... 27 19 3/8 17 3/8 13 1/8
Second quarter.................................................. 21 3/4 16 3/4 19 13 1/4
Third quarter................................................... 22 5/8 17 1/2 23 7/8 16 1/8
Fourth quarter.................................................. 23 1/2 18 1/8 25 20 3/8
</TABLE>
The Registrant paid no dividends in 1994 or 1993. There were approximately
12,500 record holders of the Registrant's common stock as of March 15, 1995.
The Registrant's bank credit agreement contains a covenant restricting the
ability of the Registrant to pay cash dividends on or repurchase shares of its
common stock. At March 15, 1995, pursuant to such covenant, the Registrant was
permitted to expend a total of $75 million. Refer to Exhibit 10(rr) to this Form
10-K, and Note 5 of Notes to Consolidated Financial Statements referred to in
Item 14(a)(1) of this Form 10-K.
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<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------------------------
1994 1993 (A) 1992 1991 1990
---------- ---------- ---------- ---------- ----------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
OPERATING RESULTS
Gross revenues.................................... $ 1,370.9 $ 1,053.4 $ 920.6 $ 901.6 $ 991.5
Promotional allowances............................ (116.7) (100.1) (87.6) (78.7) (82.5)
Net revenues...................................... 1,254.2 953.3 833.0 822.9 909.0
Operating income.................................. 237.8 131.7 125.8 163.5 151.6
Income before extraordinary item and cumulative
effect of change in accounting principle (b)..... 124.7 48.1 36.9 44.5 28.7
Net income........................................ 114.3 29.2 28.4 46.8 29.7
Income per share before extraordinary item and
cumulative effect of change in accounting
principle (b).................................... $ 1.32 $ .58 $ .53 $ .80 $ .61
Net income per share.............................. $ 1.21 $ .35 $ .41 $ .84 $ .63
Pro forma amounts assuming new method of
accounting for preopening costs is applied
retroactively (c)
Operating income................................ $ 141.7
Net income...................................... 23.2
Net income per share............................ $ .49
OTHER DATA
Interest expense, net............................. $ 39.1 $ 58.2 $ 84.9 $ 95.0 $ 110.6
Cash provided by operating activities............. 286.8 180.8 84.6 155.0 111.7
Capital expenditures.............................. 69.1 432.4 220.8 66.1 128.5
YEAR-END STATUS
Total assets...................................... $ 1,641.4 $ 1,705.3 $ 1,594.9 $ 1,327.0 $ 1,327.0
Long-term debt.................................... 359.6 535.0 831.2 797.8 1,008.8
Stockholders' equity (d).......................... 1,030.9 910.9 553.6 300.6 122.1
Shares outstanding................................ 91.0 90.6 74.6 54.9 41.7
<FN>
------------------------
(a) Treasure Island opened on October 26, 1993.
(b) Before extraordinary gains and losses on early retirements of debt and a
one-time credit of $3.6 million in 1992 for the cumulative effect of a
change in method of accounting for income taxes.
(c) Effective January 1, 1992, the Company changed its method of accounting for
preopening costs associated with developing and opening new hotel-casinos.
As a result of this change, preopening costs, which were previously charged
to expense as incurred, are now capitalized and charged to expense over a
60-day period following the commencement of operations. The pro forma
amounts shown above for 1990 have been adjusted to give effect to
retroactive application of this new accounting method, including related
income taxes, on the preopening costs incurred in connection with the
development of The Mirage, which opened on November 22, 1989.
(d) The Company paid no dividends during the five-year period ended December
31, 1994.
</TABLE>
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<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
The significant improvement in the Company's operating results principally
reflects the October 26, 1993 opening of Treasure Island.
During 1994, its first full year of operations, Treasure Island contributed
net revenues and operating income of $343.0 million and $69.7 million,
respectively. The components of Treasure Island's net revenues in 1994 include
casino revenues of $152.5 million and non-casino revenues of $190.5 million.
The combined net revenues and operating income of The Mirage and the
Company's two Golden Nugget properties increased 2% and 11%, respectively,
during 1994. Combined casino revenues of the three properties increased $19.4
million, or 3%, primarily resulting from a 5% improvement in table games
activity at The Mirage. Combined slot revenue of the three properties was up
$9.2 million, or 4%. Management attributes the improvement in part to the
completion in mid-1994 of a program to install new upgraded slot machines at the
three facilities.
Cirque du Soleil, the world-renowned performance troupe, performed in a
temporary tent facility at The Mirage from November 1992 through November 1993.
In December 1993, Cirque du Soleil began appearing in an all-new show,
"Mystere," at Treasure Island. Additionally, Siegfried & Roy completed
approximately 16% fewer performances at The Mirage during 1994 due to knee
surgery required by one of the principal performers. Nevertheless, net
non-casino revenues, excluding Treasure Island, were relatively unchanged in
1994.
Despite a 55% increase in the Company's available standard guest rooms with
the addition of Treasure Island, Company-wide occupancy of standard guest rooms
(including occupancy on a complimentary basis) was 98% in 1994, versus
approximately 97% in 1993 and 95% in 1992.
During its 66 days of operations in 1993, Treasure Island contributed net
revenues of $59.0 million and operating income, before preopening and related
promotional expense, of $8.5 million. The components of Treasure Island's net
revenues during this partial 1993 period include casino revenues of $30.6
million and non-casino revenues of $28.4 million.
During 1993, the combined net revenues and operating income of The Mirage
and the two Golden Nugget properties increased 7% and 21%, respectively.
Combined casino and net non-casino revenues of the three properties increased 4%
and 13%, respectively, during 1993.
Table games revenues at The Mirage increased 9% in 1993, rebounding from a
sharp decline experienced during 1992, when the world-wide recession and other
factors, particularly in Japan, contributed to a significant reduction in gaming
activity. Net non-casino revenues at The Mirage were assisted by an improvement
in both hotel occupancy and the average room rate, as well as by the additional
revenues from Cirque du Soleil, as discussed above.
Operations at the two Golden Nugget properties in 1993 benefited from
enhancement and expansion projects completed during 1992. At the Golden
Nugget-Laughlin, virtually all of the public areas were refurbished, the size of
the casino was increased from 22,000 to 32,000 square feet and the facility's
first 300 guest rooms were opened. At the Golden Nugget in Las Vegas, the
Company completed the refurbishment of most of the facility's standard guest
rooms in mid-1992.
OTHER FACTORS AFFECTING EARNINGS
Corporate expense increased 19% in both 1993 and 1994. Such increases were
primarily due to the Company's evaluation and pursuit of opportunities in new
gaming jurisdictions. Each jurisdiction has unique demographic, regulatory,
political and tax characteristics pertinent to any significant investment.
Frequently, extensive evaluation and submittals are necessary to determine if
there is a potential profit opportunity. Proposals have been made in several
jurisdictions, some of which remain
14
<PAGE>
outstanding. The Company also evaluated and continues to evaluate other
potential jurisdictions that have not yet warranted or required specific
proposals. Although management believes that these efforts have the potential to
produce significant future income, the Company's policy is to expense as
incurred all costs (except for land acquisition costs) associated with such
ventures until the likelihood of construction is relatively certain. New
jurisdiction expenses in 1994 totaled approximately $13.0 million, versus
approximately $9.6 million in 1993 and $6.5 million in 1992.
In December 1994, management finalized plans to materially enhance the 2,765
standard guest rooms and 61 of the 279 suites at The Mirage. The room
enhancement program, which commenced in late February 1995, is expected to cost
approximately $55 million and be completed by mid-August 1995. The program will
result in approximately 9% fewer available room-nights at The Mirage in 1995
than in 1994, which will impact the Company's 1995 results of operations. In
connection with the room enhancement program, the Company recorded an $11.0
million abandonment loss in December 1994, representing the estimated book value
of the furniture and fixtures that are being replaced, net of depreciation
charges through the date they are expected to be removed from service and net of
estimated salvage value.
Interest expense declined by 36% from 1992 to 1993, and further declined by
30% in 1994. Such declines reflect a combination of lower outstanding
borrowings, lower interest rates and variations in the amount of interest
capitalized, as discussed under "Liquidity and Capital Resources."
The Company's effective tax rate on income before extraordinary losses rose
from 19.0% in 1992 to 33.5% in 1993 and 36.4% in 1994. The 1992 tax provision
included a $7.0 million reduction relating to the completion by the Internal
Revenue Service of its examination of the Company's tax returns for the years
1985 through 1990. Without such reduction, the effective rate for 1992 would
have been 34.3%.
The Company had an average of 94.7 million common and dilutive common
equivalent shares outstanding during 1994, versus 83.4 million in 1993 and 69.9
million in 1992. These increases are primarily due to the issuance in
underwritten public offerings of 13.75 million shares at $22.80 per share in
November 1993 and 12.5 million shares at $14.20 per share in April 1992, as well
as shares issued in connection with the Company's stock option programs.
REGULATION AND TAXES
The Company is subject to extensive regulation by the Nevada gaming
authorities and will be subject to regulation, which may or may not be similar
to that in Nevada, by the appropriate authorities in any other jurisdiction in
which it may conduct gaming activities in the future. Changes in applicable laws
or regulations could have an adverse effect on the Company's operations.
The gaming industry represents a significant source of tax revenues,
particularly to the State of Nevada and its counties and municipalities. From
time to time, various state and federal legislators and officials have proposed
changes in tax law, or in the administration of such law, affecting the gaming
industry. Recent proposals have included a federal gaming tax and increases in
state or local gaming taxes. They have also included limitations on the federal
income tax deductibility of the costs of providing meals to employees and of the
costs of furnishing complimentary promotional items to customers, as well as
various measures which would require withholding on amounts won by customers or
on negotiated discounts provided to customers on amounts owed to the Company.
Management believes that the Company's recorded tax balances are adequate.
However, it is not possible to determine with certainty the likelihood of
possible changes in tax law or in the administration of such law. Such changes,
if adopted, could have a material adverse effect on the Company's operating
results.
15
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity is excellent. At December 31, 1994, the Company had
$505.0 million available under its $525 million revolving bank credit facility,
in addition to $47.1 million in cash and cash equivalents. The Company expects
to amend the bank credit facility in April 1995 to increase the total
availability to $1 billion. Principal maturities of debt are relatively minor
through 1997.
Management believes in maintaining the Company's facilities in first-class
condition. Annual maintenance capital spending for its four operating properties
is anticipated to approximate $30 million.
During 1992 and 1993, the Company's capital expenditures totaled $220.8
million and $432.4 million, respectively. Of these amounts, approximately $139.6
million in 1992 and $307.4 million in 1993 related to the construction of
Treasure Island, while $70.0 million in 1993 related to the purchase of the
Dunes. In 1994, total capital expenditures were $69.1 million, including
approximately $13.1 million related to Treasure Island and $7.8 million of
capitalized interest related principally to the Dunes site. The Company also
spent approximately $16.6 million on new slot machines for its other three
properties.
The Company's level of capital spending will accelerate in 1995. As noted,
the Company plans to spend approximately $55 million to significantly upgrade
the quality of the guest rooms at The Mirage. The Company also preliminarily
expects to break ground on Beau Rivage during 1995. The total construction cost
of this project is currently expected to be less than $1 billion. As is typical
of major construction projects, expenditures for Beau Rivage should be
disproportionately small early in the construction period.
During 1994, the Company was designing Beau Rivage and evaluating other
expansion opportunities, and did not have any major new facilities under
construction. As discussed above, capital spending was lower than in recent
years, when Treasure Island was under construction, and lower than it is likely
to be in future years, when Beau Rivage will be under construction. Accordingly,
management chose to repay outstanding debt in 1994, thereby achieving a
significant reduction in interest cost, while relying on the Company's
internally generated cash flows and its available credit line to finance future
growth, including Beau Rivage.
The Company's most expensive outstanding debt is the zero coupon first
mortgage notes due 1998, which are the only remaining notes issued as part of
the original construction financing for The Mirage. These notes accrete at 11%
per annum and are not redeemable prior to maturity. During 1994, the Company
repurchased the $10.3 million accreted amount held by one of the only two
holders of the notes. The Company acquired the notes at a premium over accreted
value, but at a price that results in a favorable return for the Company.
The Company's next most expensive outstanding debt is the 9 7/8% first
mortgage notes due 2000, in the original principal amount of $300 million, that
were issued to fund a portion of the construction cost of Treasure Island.
During 1994, the Company repurchased $174.0 million principal amount of these
notes in the open market, paying more than the principal amount but less than
the initial April 1, 1995 redemption price. The remaining $126.0 million
principal amount of the notes were called for redemption on March 13, 1995 and
will be redeemed on April 12, 1995 at the stated redemption price of 106.5% of
the principal amount.
The Company undertook similar repurchases and redemptions of $356.3 million
principal amount of its debt in 1993 and $327.3 million in 1992.
Management believes that it was financially advantageous for the Company to
retire this outstanding debt prior to its scheduled maturity, even though the
Company was required to pay premiums in order to do so. Such premiums, as well
as the unamortized portion of the cost of issuing such debt, resulted in
extraordinary charges in all three years.
16
<PAGE>
As a result of these debt retirements, the Company's interest cost has
declined significantly. In 1992, the Company's interest cost was over $100
million. In 1994, it was $52.0 million -- nearly a 50% decline in two years. The
Company's total debt was 36% lower at the beginning of 1995 than at the
beginning of 1994, and management expects interest cost to decline again in
1995.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and Notes to Consolidated Financial
Statements of Mirage Resorts, Incorporated and Subsidiaries, referred to in Item
14(a)(1) of this Form 10-K, are included at pages 23 to 40.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
There is incorporated by reference the information appearing in the section
entitled "Directors and Executive Officers" in the Registrant's definitive Proxy
Statement to be filed with the Securities and Exchange Commission.
ITEM 11. EXECUTIVE COMPENSATION
There is incorporated by reference the information appearing in the section
entitled "Executive Compensation" in the Registrant's definitive Proxy Statement
to be filed with the Securities and Exchange Commission.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There is incorporated by reference the information appearing in the section
entitled "Stock Ownership of Major Stockholders and Management" in the
Registrant's definitive Proxy Statement to be filed with the Securities and
Exchange Commission.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is incorporated by reference the information appearing in the sections
entitled "Certain Transactions" and "Compensation Committee Interlocks and
Insider Participation" in the Registrant's definitive Proxy Statement to be
filed with the Securities and Exchange Commission.
17
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1). FINANCIAL STATEMENTS.
Included in Part II of this Report:
Reports of Independent Public Accountants
Consolidated Balance Sheets -- December 31, 1994 and 1993
Years ended December 31, 1994, 1993 and 1992
Consolidated Statements of Income
Consolidated Statements of Stockholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
(a)(2). FINANCIAL STATEMENT SCHEDULES.
Included in Part IV of this Report:
For the years ended December 31, 1994, 1993 and 1992
Schedule II -- Valuation and Qualifying Accounts
Schedules other than that listed above are omitted because they are not
required or are not applicable, or the required information is shown in the
financial statements or notes to the financial statements.
(a)(3). EXHIBITS.
3(i)(a) Restated Articles of Incorporation of Registrant. Incorporated by
reference to Exhibit 3(i) to Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 1993.
3(i)(b) Amended and Restated Certificate of Division of Shares into Smaller
Denominations Pursuant to N.R.S. Section 78.207 of Registrant.
Incorporated by reference to Exhibit 2.2 to Amendment No. 3 to
Registrant's Registration Statement on Form 8-A dated October 19,
1993.
3(ii) Amended and Restated Bylaws of Registrant. Incorporated by reference
to Exhibit 99 to Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1994.
4(a) Indenture, dated as of March 15, 1988, with respect to GNS FINANCE
CORP.'s ("Finance") Zero Coupon First Mortgage Notes Due March 15,
1998, together with exhibits (the "Zero Coupon Notes Indenture").
Incorporated by reference to Exhibit 4(c) to the Registration
Statement filed by Finance and MCH on Form S-1 under the Securities
Act of 1933 (No. 33-22369) (the "MCH Form S-1").
4(b) First Supplemental Indenture, dated as of August 1, 1988, to the Zero
Coupon Notes Indenture. Incorporated by reference to Exhibit 4(f) to
Amendment No. 1 to the MCH Form S-1.
4(c) Second Supplemental Indenture, dated as of January 15, 1990, to the
Zero Coupon Notes Indenture. Incorporated by reference to Exhibit 4(q)
to Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989 (the "1989 Form 10-K").
4(d) Third Supplemental Indenture, dated as of October 15, 1990, to the
Zero Coupon Notes Indenture. Incorporated by reference to Exhibit 4(r)
to Amendment No. 1 to the Annual Report on Form 10-K of Finance for
the fiscal year ended December 31, 1990.
18
<PAGE>
4(e) Indenture, dated as of March 15, 1992, with respect to Treasure Island
Finance Corp.'s 9 7/8% First Mortgage Notes Due October 1, 2000,
together with exhibits. Incorporated by reference to Exhibit 4(u) to
the Annual Report on Form 10-K of Finance for the fiscal year ended
December 31, 1991 (the "Finance 1991 Form 10-K").
4(f) Fourth Supplemental Indenture, dated as of June 15, 1992, to the Zero
Coupon Notes Indenture. Incorporated by reference to Exhibit 19.4 to
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1992.
4(g) Indenture, dated as of March 31, 1993, with respect to Finance's
9 1/4% Senior Subordinated Notes Due March 15, 2003, together with
exhibits. Incorporated by reference to Exhibit 4 to Registrant's
Current Report on Form 8-K dated March 31, 1993.
10(a)* Forms of Incentive Stock Option Agreement and Non-Qualified Stock
Option Agreement. Incorporated by reference to Exhibit 10(b) to the
1989 Form 10-K.
10(b) Management Agreement, dated as of January 1, 1988, between Registrant
and MCH. Incorporated by reference to Exhibit 10(i) to the MCH Form
S-1.
10(c) Tax Allocation Agreement, dated as of January 1, 1988, between
Registrant and MCH. Incorporated by reference to Exhibit 10(h) to the
MCH Form S-1.
10(d) Tax Allocation Agreement, dated as of March 9, 1988, between
Registrant and Finance. Incorporated by reference to Exhibit 10(g) to
the MCH Form S-1.
10(e)* 1983 Stock Option and Stock Appreciation Rights Plan, as amended.
Incorporated by reference to Exhibit 4.3 to the Registration Statement
filed by Registrant on Form S-8 under the Securities Act of 1933 (No.
33-16037) (the "Form S-8").
10(f)* 1984 Stock Option and Stock Appreciation Rights Plan, as amended.
Incorporated by reference to Exhibit 4.2 to the Form S-8.
10(g) Management Agreement, dated as of January 1, 1985, between Registrant
and GNLV. Incorporated by reference to Exhibit 10(g) to Amendment No.
2 to the Registration Statement filed by GNLV FINANCE CORP. ("GNLV
Finance") and GNLV on Form S-1 under the Securities Act of 1933 (No.
33-5694) (the "GNLV Form S-1").
10(h) Tax Allocation Agreement, dated as of January 1, 1985, between
Registrant and GNLV. Incorporated by reference to Exhibit 10(h) to the
GNLV Form S-1.
10(i) Tax Allocation Agreement, dated as of May 13, 1986, between Registrant
and GNLV Finance. Incorporated by reference to Exhibit 10(f) to
Amendment No. 2 to the GNLV Form S-1.
10(j)* 1986 Stock Option and Stock Appreciation Rights Plan, as amended.
Incorporated by reference to Exhibit 4.1 to the Form S-8.
10(k)* 1992 Stock Option and Stock Appreciation Rights Plan. Incorporated by
reference to Exhibit 10(n) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1991 (the "1991 Form 10-K").
10(l)* 1993 Stock Option and Stock Appreciation Rights Plan. Incorporated by
reference to Exhibit 10(m) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992 (the "1992 Form 10-K").
10(m)* Executive Retirement Plan Agreement, dated as of December 1, 1986,
between Registrant and Kenneth R. Wynn. Incorporated by reference to
Exhibit 10(hh) to Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1986 (the "1986 Form 10-K").
10(n)* Executive Retirement Plan Agreement, dated as of December 1, 1986,
between Registrant and James E. Pettis. Incorporated by reference to
Exhibit 10(mm) to the 1986 Form 10-K.
10(o)* 1992 Non-Employee Director Stock Option Plan. Incorporated by
reference to Exhibit 10(t) to the 1991 Form 10-K.
19
<PAGE>
10(p) Management Agreement, dated as of January 1, 1992, between Registrant
and TI Corp. Incorporated by reference to Exhibit 10(oo) to Amendment
No. 2 to the Registration Statement filed by Treasure Island Finance
Corp., TI Corp. and MCH on Form S-1 under the Securities Act of 1933
(No. 33-45415) (the "TI Corp. Form S-1").
10(q) Deed of Trust, Assignment of Rents and Security Agreement, dated as of
March 23, 1988, from MCH in favor of First Interstate Bank of Nevada,
N.A. ("FIBN"), as trustee. Incorporated by reference to Exhibit 10(xx)
to Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1987.
10(r) Tax Allocation Agreement, dated as of January 1, 1992, between
Registrant and Treasure Island Finance Corp. Incorporated by reference
to Exhibit 10(qq) to Amendment No. 2 to the TI Corp. Form S-1.
10(s) Tax Allocation Agreement, dated as of January 1, 1992, between
Registrant and TI Corp. Incorporated by reference to Exhibit 10(pp) to
Amendment No. 2 to the TI Corp. Form S-1.
10(t) Management Agreement, dated as of September 30, 1988, between
Registrant and GNL. Incorporated by reference to Exhibit 10(yy) to the
1989 Form 10-K.
10(u) Tax Allocation Agreement, dated as of September 30, 1988, between
Registrant and GNL. Incorporated by reference to Exhibit 10(zz) to the
1989 Form 10-K.
10(v) Ground Lease, dated as of March 1, 1992, between MCH and TI Corp.
Incorporated by reference to Exhibit 10(nn) to Amendment No. 2 to the
TI Corp. Form S-1.
10(w) Amendment Agreement, dated as of October 4, 1990, between MCH, as
trustor, and FIBN, as beneficiary. Incorporated by reference to
Exhibit 4.12 to Registrant's Current Report on Form 8-K dated October
4, 1990.
10(x) Easement, dated December 28, 1990, from MH, INC. ("MH") in favor of
Stephen A. Wynn. Incorporated by reference to Exhibit 10(ll) to
Amendment No. 1 to the Registration Statement filed by Finance and MCH
on Form S-1 under the Securities Act of 1933 (No. 33-38496).
10(y) Deed of Trust, Assignment of Rents and Security Agreement, dated as of
March 25, 1992, from MCH in favor of Valley Bank of Nevada ("VBN"), as
trustee. Incorporated by reference to Exhibit 10(dd) to the Finance
1991 Form 10-K.
10(z) Leasehold Deeds of Trust, Assignments of Rents and Security
Agreements, each dated as of March 25, 1992, from TI Corp. in favor of
each of FIBN and VBN, as trustees. Incorporated by reference to
Exhibit 10(cc) to the Finance 1991 Form 10-K.
10(aa) Loan and Aircraft Chattel Mortgage Agreement (G-IV), dated as of
October 22, 1992, between Golden Nugget Aviation Corp. ("GNAV") and
The CIT Group/Equipment Financing, Inc. ("CIT"), together with
exhibits. Incorporated by reference to Exhibit 19.2 to Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended September
30, 1992 (the "September 1992 Form 10-Q").
10(bb) Loan and Aircraft Chattel Mortgage Agreement (G-II), dated as of
October 22, 1992, between GNAV and CIT, together with exhibits.
Incorporated by reference to Exhibit 19.3 to the September 1992 Form
10-Q.
10(cc)* Employment Agreement, dated as of August 18, 1992, between Registrant
and Frank Visconti. Incorporated by reference to Exhibit 19.4 to the
September 1992 Form 10-Q.
10(dd)* Employment Agreement, dated October 20, 1992, between Registrant and
James E. Pettis. Incorporated by reference to Exhibit 19.5 to the
September 1992 Form 10-Q.
10(ee)* Employment Agreement, dated December 16, 1992, between Registrant and
Stephen A. Wynn. Incorporated by reference to Exhibit 10(zz) to the
1992 Form 10-K.
10(ff) Amendment Agreement, dated as of November 24, 1992, between MCH, as
trustor, and FIBN, as beneficiary. Incorporated by reference to
Exhibit 10(ddd) to the 1992 Form 10-K.
20
<PAGE>
10(gg) Agreement for the Sale of Gulfstream III Aircraft Serial Number 311
and Gulfstream III Refurbishment Agreement, each dated March 24, 1994,
between Gulfstream Aerospace Corp. and GNAV. Incorporated by reference
to Exhibit 10(b) to Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1994.
10(hh) First Amendment to Ground Lease, dated as of March 1, 1993, between
MCH and TI Corp. Incorporated by reference to Exhibit 10(ggg) to the
1992 Form 10-K.
10(ii) Second Amendment to Deed of Trust, dated as of February 21, 1992,
between MCH, as trustor, and FIBN, as beneficiary. Incorporated by
reference to Exhibit 10(z) to the Finance 1991 Form 10-K.
10(jj) Lease, dated September 4, 1962, and Agreement, dated March 25, 1975,
between the Trustees of the Fraternal Order of Eagles and Registrant.
Incorporated by reference to Exhibit 10(c) to the GNLV Form S-1.
10(kk) Lease, dated July 1, 1973, and Amendment to Lease, dated February 27,
1979, between First National Bank of Nevada, Trustee, and Registrant.
Incorporated by reference to Exhibit 10(d) to the GNLV Form S-1.
10(ll) Lease, dated April 30, 1976, between Elizabeth Zahn, Trustee, and
Registrant. Incorporated by reference to Exhibit 10(e) to the GNLV
Form S-1.
10(mm) Land Sales Contract, dated March 26, 1993, between MH and Stephen A.
Wynn, together with exhibits. Incorporated by reference to Exhibit
10(yy) to the Registration Statement filed by Finance and MCH on Form
S-4 under the Securities Act of 1933 (No. 33-62514).
10(nn) Second Amendment to Ground Lease, dated as of October 26, 1993,
between MCH and TI Corp. Incorporated by reference to Exhibit 10(bbb)
to Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 (the "1993 Form 10-K").
10(oo)* First Amendment to Executive Retirement Plan Agreement, dated as of
December 1, 1993, between Registrant and Kenneth R. Wynn. Incorporated
by reference to Exhibit 10(ccc) to the 1993 Form 10-K.
10(pp) Stockholders' Agreement, dated as of January 4, 1994, among MUMSA,
Mirage Argentina, Inc., Universal Casino Consultants (HK) Ltd. and
Berjaya Universal Casino Management (HK) Ltd. Incorporated by
reference to Exhibit 10(fff) to the 1993 Form 10-K.
10(qq)* Amended and Restated 1994 Cash Bonus Plan.
10(rr) Reducing Revolving Loan Agreement, dated as of May 25, 1994, among
Registrant, MCH, TI Corp., MR Realty, MH, each bank party thereto,
Bank of America National Trust and Savings Association, Bankers Trust
Company, 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 Co-Agent (without Schedules
or Exhibits). Incorporated by reference to Exhibit 99 to Registrant's
Current Report on Form 8-K dated May 25, 1994.
10(ss) Joint Venture Agreement, dated as of December 9, 1994, among MRGS
Corp., Gold Strike L.V. and Registrant (without Exhibit). Incorporated
by reference to Exhibit 99.1 to Registrant's Current Report on Form
8-K dated December 9, 1994 (the "December 1994 Form 8-K").
10(tt) Reducing Revolving Loan Agreement, dated as of December 21, 1994,
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 Schedules or Exhibits) (the "Victoria
Partners Loan Agreement"). Incorporated by reference to Exhibit 99.2
to Amendment No. 1 to the December 1994 Form 8-K on Form 8-K/A.
21
<PAGE>
10(uu) Amendment No. 1 to the Victoria Partners Loan Agreement, dated as of
January 31, 1995.
11 Computation of net income per share of common stock.
21 List of subsidiaries of Registrant.
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of Coopers & Lybrand L.L.P.
27 Financial Data Schedule.
------------------------
*Constitutes an executive compensation plan or agreement.
(b). REPORTS ON FORM 8-K.
The Registrant filed no reports on Form 8-K during the three-month
period ended December 31, 1994.
22
<PAGE>
MIRAGE RESORTS, INCORPORATED
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Directors and Stockholders
of Mirage Resorts, Incorporated
We have audited the accompanying consolidated balance sheet of Mirage
Resorts, Incorporated and subsidiaries (the "Company") as of December 31, 1994,
and the related consolidated statements of income, stockholders' equity, and
cash flows for the year then ended. These consolidated financial statements and
the schedule referred to below are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements and schedule based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Mirage Resorts,
Incorporated and subsidiaries as of December 31, 1994, and the consolidated
results of their operations and their cash flows for the year then ended in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The financial statement schedule for the
year ended December 31, 1994 listed in Item 14(a)(2) is presented for purposes
of complying with the Securities and Exchange Commission's rules and is not part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
February 8, 1995 (except
for Note 5, as to which the
date is March 13, 1995).
23
<PAGE>
MIRAGE RESORTS, INCORPORATED
REPORT OF INDEPENDENT ACCOUNTANTS
To the Directors and Stockholders
of Mirage Resorts, Incorporated
Las Vegas, Nevada
We have audited the consolidated balance sheet of Mirage Resorts,
Incorporated and subsidiaries as of December 31, 1993 and the related
consolidated statements of income, stockholders' equity and cash flows for the
years ended December 31, 1993 and 1992. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Mirage Resorts,
Incorporated and subsidiaries as of December 31, 1993 and the consolidated
results of their operations and their cash flows for the years ended December
31, 1993 and 1992 in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The financial statement schedule listed
in Item 14(a)(2) is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. The
information included in the schedule for the years ended December 31, 1993 and
1992 has been subjected to the auditing procedures applied in the audit of the
basic financial statements and, in our opinion, when considered in relation to
the basic financial statements taken as a whole, presents fairly, in all
material respects, the information required to be included therein.
COOPERS & LYBRAND
Los Angeles, California
February 11, 1994
24
<PAGE>
MIRAGE RESORTS, INCORPORATED
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
AT DECEMBER 31
-----------------------
1994 1993
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents....................... $ 47,142 $ 57,462
Receivables, net................................ 60,192 58,182
Inventories..................................... 26,374 30,374
Deferred income taxes........................... 27,906 26,756
Prepaid expenses and other...................... 17,901 24,656
---------- ----------
Total current assets.......................... 179,515 197,430
Property and equipment, net....................... 1,374,992 1,421,366
Other assets, net................................. 86,932 86,462
---------- ----------
$1,641,439 $1,705,258
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable................................ $ 74,361 $ 76,811
Accrued expenses................................ 73,744 82,922
Current maturities of long-term debt............ 3,986 31,617
---------- ----------
Total current liabilities..................... 152,091 191,350
Long-term debt, net of current maturities......... 359,584 535,025
Other liabilities, including deferred income taxes
of $90,400 and $60,115........................... 98,842 68,019
---------- ----------
Total liabilities............................. 610,517 794,394
---------- ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, par value $0.008: authorized
562,500,000 shares; issued 117,573,825 shares;
outstanding 90,995,638 and 90,606,608 shares... 940 940
Additional paid-in capital...................... 699,116 695,587
Retained earnings............................... 487,007 372,683
Treasury stock, at cost: 26,578,187 and
26,967,217 shares.............................. (156,141) (158,346)
---------- ----------
Total stockholders' equity.................... 1,030,922 910,864
---------- ----------
$1,641,439 $1,705,258
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
25
<PAGE>
MIRAGE RESORTS, INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------
1994 1993 1992
---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
REVENUES
Casino.................................................................... $ 727,648 $ 586,403 $ 533,580
Rooms..................................................................... 256,711 180,936 147,151
Food and beverage......................................................... 206,128 158,889 137,407
Retail.................................................................... 67,016 48,151 40,069
Entertainment and other................................................... 113,438 79,034 62,369
---------- ---------- ----------
1,370,941 1,053,413 920,576
Less -- promotional allowances............................................ (116,764) (100,111) (87,552)
---------- ---------- ----------
1,254,177 953,302 833,024
---------- ---------- ----------
COSTS AND EXPENSES
Casino.................................................................... 361,421 300,377 278,111
Rooms..................................................................... 81,322 55,586 46,663
Food and beverage......................................................... 136,925 103,541 87,777
Retail.................................................................... 42,773 32,292 27,973
Entertainment and other................................................... 88,013 61,063 53,834
Provision for losses on receivables....................................... 20,520 19,819 20,246
General and administrative................................................ 156,314 114,957 104,314
Depreciation and amortization............................................. 93,441 74,147 63,028
Corporate expense......................................................... 35,609 29,999 25,303
Preopening and related promotional expense................................ -- 29,793 --
---------- ---------- ----------
1,016,338 821,574 707,249
---------- ---------- ----------
OPERATING INCOME............................................................ 237,839 131,728 125,775
---------- ---------- ----------
OTHER INCOME AND (EXPENSES)
Interest and other income................................................. 5,117 5,299 14,334
Interest cost............................................................. (52,030) (88,545) (103,404)
Interest capitalized...................................................... 7,815 25,080 4,158
Other, net................................................................ (2,737) (1,259) 4,720
---------- ---------- ----------
(41,835) (59,425) (80,192)
---------- ---------- ----------
INCOME BEFORE INCOME TAXES, EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE............................................. 196,004 72,303 45,583
Provision for income taxes................................................ (71,265) (24,234) (8,638)
---------- ---------- ----------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE....................................................... 124,739 48,069 36,945
Extraordinary item -- loss on early retirements of debt, net of applicable
income tax benefit....................................................... (10,415) (18,837) (12,158)
Cumulative effect (to January 1, 1992) of reduction of deferred tax
liability due to change in accounting principle.......................... -- -- 3,632
---------- ---------- ----------
NET INCOME.................................................................. $ 114,324 $ 29,232 $ 28,419
---------- ---------- ----------
---------- ---------- ----------
INCOME PER SHARE OF COMMON STOCK
Income before extraordinary item and cumulative effect of change in
accounting principle..................................................... $ 1.32 $ .58 $ .53
Extraordinary item -- loss on early retirements of debt, net of applicable
income tax benefit....................................................... (.11) (.23) (.17)
Cumulative effect (to January 1, 1992) of reduction of deferred tax
liability due to change in accounting principle.......................... -- -- .05
---------- ---------- ----------
NET INCOME PER SHARE OF COMMON STOCK........................................ $ 1.21 $ .35 $ .41
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
26
<PAGE>
MIRAGE RESORTS, INCORPORATED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON STOCK
------------------------ ADDITIONAL TREASURY STOCK
SHARES PAID-IN RETAINED ----------------------
OUTSTANDING AMOUNT CAPITAL EARNINGS SHARES AMOUNT TOTAL
----------- ----------- ----------- --------- ----------- --------- ----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCES, JANUARY 1, 1992.................. 54,928,375 $ 940 $ 327,764 $ 315,032 62,645,450 $(343,143) $ 300,593
Issuance of common stock................. 12,500,000 -- 110,762 -- (12,500,000) 60,875 171,637
Exercise of common stock options......... 7,192,582 -- (9,016) -- (7,192,582) 38,088 29,072
Tax benefit from stock option
exercises............................... -- -- 21,782 -- -- -- 21,782
Purchase of common stock................. (21,137) -- -- -- 21,137 (266) (266)
Recognition of the vesting of restricted
common stock and nonqualified stock
options................................. -- -- 2,375 -- -- -- 2,375
Other.................................... (175) -- (1) -- 175 -- (1)
Net income for the year.................. -- -- -- 28,419 -- -- 28,419
----------- ----- ----------- --------- ----------- --------- ----------
BALANCES, DECEMBER 31, 1992................ 74,599,645 940 453,666 343,451 42,974,180 (244,446) 553,611
Issuance of common stock................. 13,750,000 -- 229,575 -- (13,750,000) 74,020 303,595
Exercise of common stock options......... 2,098,208 -- 2,082 -- (2,098,208) 11,470 13,552
Tax benefit from stock option
exercises............................... -- -- 9,147 -- -- -- 9,147
Issuance of restricted common stock in
satisfaction of deferred compensation
obligations............................. 182,191 -- 695 -- (182,191) 1,052 1,747
Purchase of common stock................. (23,436) -- -- -- 23,436 (442) (442)
Recognition of the vesting of restricted
common stock and nonqualified stock
options................................. -- -- 422 -- -- -- 422
Net income for the year.................. -- -- -- 29,232 -- -- 29,232
----------- ----- ----------- --------- ----------- --------- ----------
BALANCES, DECEMBER 31, 1993................ 90,606,608 940 695,587 372,683 26,967,217 (158,346) 910,864
Exercise of common stock options......... 392,751 -- 291 -- (392,751) 2,296 2,587
Tax benefit from stock option
exercises............................... -- -- 2,234 -- -- -- 2,234
Purchase of common stock................. (4,351) -- -- -- 4,351 (95) (95)
Recognition of the vesting of restricted
common stock and nonqualified stock
options................................. -- -- 1,003 -- -- -- 1,003
Other.................................... 630 -- 1 -- (630) 4 5
Net income for the year.................. -- -- -- 114,324 -- -- 114,324
----------- ----- ----------- --------- ----------- --------- ----------
BALANCES, DECEMBER 31, 1994................ 90,995,638 $ 940 $ 699,116 $ 487,007 26,578,187 $(156,141) $1,030,922
----------- ----- ----------- --------- ----------- --------- ----------
----------- ----- ----------- --------- ----------- --------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
27
<PAGE>
MIRAGE RESORTS, INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------
1994 1993 1992
----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income............................................................... $ 114,324 $ 29,232 $ 28,419
Adjustments to reconcile net income to net cash provided by operating
activities
Provision for losses on receivables.................................... 20,520 19,819 20,246
Depreciation and amortization of property and equipment, including
amounts reported as corporate expense................................. 97,178 76,965 64,816
Amortization of debt discount and issuance costs....................... 13,280 13,745 12,404
Other amortization..................................................... 4,540 4,034 5,651
Loss on disposal and abandonment of property and equipment............. 13,635 347 2,003
Loss on early retirements of debt...................................... 16,024 28,980 18,421
Deferred income taxes, including cumulative effect of change in
accounting principle in 1992.......................................... 29,135 2,337 (20,432)
Changes in assets and liabilities
Increase in receivables, net of write-offs........................... (22,530) (9,435) (34,273)
(Increase) decrease in inventories and other current assets.......... 10,755 (7,032) (18,801)
Increase (decrease) in trade accounts payable and accrued expenses... (9,831) 27,488 3,911
Other, net............................................................. (269) (5,655) 2,200
----------- ----------- -----------
Net cash provided by operating activities.......................... 286,761 180,825 84,565
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of property and equipment......................... 4,672 1,171 15,143
Capital expenditures..................................................... (69,111) (432,388) (220,844)
Net (increase) decrease in non-current cash equivalents restricted for
construction............................................................ -- 157,196 (135,494)
Joint venture and other equity investments............................... (22,810) (1,877) --
Proceeds from sales of investments....................................... 21,321 -- 5,925
Increase (decrease) in construction accounts payable..................... (1,797) (20,043) 16,771
Other, net............................................................... (4,399) 8,002 (12,014)
----------- ----------- -----------
Net cash used for investing activities............................... (72,124) (287,939) (330,513)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Early retirements of debt................................................ (193,990) (377,698) (340,840)
Proceeds from issuance of long-term debt................................. -- 97,500 291,922
Borrowings under bank credit facilities.................................. 225,000 125,000 89,000
Repayments of borrowings under bank credit facilities.................... (222,000) (153,000) (44,000)
Other additions to (reductions in) debt, net............................. (32,217) 4,904 (19,136)
Proceeds from issuance of common stock................................... -- 303,595 171,637
Exercise of common stock options, including related income tax benefit... 4,821 22,699 50,854
Other, net............................................................... (6,571) (1,407) (4,906)
----------- ----------- -----------
Net cash provided by (used for) financing activities................. (224,957) 21,593 194,531
----------- ----------- -----------
CASH AND CASH EQUIVALENTS
Decrease for the year.................................................... (10,320) (85,521) (51,417)
Balance, beginning of year............................................... 57,462 142,983 194,400
----------- ----------- -----------
Balance, end of year..................................................... $ 47,142 $ 57,462 $ 142,983
----------- ----------- -----------
----------- ----------- -----------
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid, net of amounts capitalized................................ $ 34,818 $ 60,923 $ 91,837
Income taxes paid (refunded), net........................................ 31,500 (6,080) 19,143
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
28
<PAGE>
MIRAGE RESORTS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 facilities 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. In January 1993, the Company
purchased the assets of the former Dunes Hotel, Casino and Country Club on the
Las Vegas Strip and has announced plans for construction of extensive new hotel,
casino and resort facilities on the property.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany balances and transactions
have been eliminated.
CASINO REVENUES AND PROMOTIONAL ALLOWANCES
The Company recognizes as casino revenues the net win from gaming
activities, which is the difference between gaming wins and losses. Revenues
include the estimated retail value of rooms, food and beverage and other goods
and services provided to customers on a complimentary basis as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------
1994 1993 1992
----------- ----------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Rooms................................................... $ 49,900 $ 45,153 $ 37,684
Food and beverage....................................... 61,389 49,701 44,263
Other................................................... 5,475 5,257 5,605
----------- ----------- ---------
$ 116,764 $ 100,111 $ 87,552
----------- ----------- ---------
----------- ----------- ---------
</TABLE>
Such amounts are then deducted as promotional allowances. The estimated
costs of providing these promotional allowances of $83,227,000 in 1994,
$69,449,000 in 1993 and $62,177,000 in 1992 have been classified primarily as
casino costs and expenses.
CASH AND CASH EQUIVALENTS
The Company classifies all highly liquid debt instruments purchased with an
original maturity of three months or less as cash equivalents. Cash equivalents
are carried at cost which approximates fair value.
CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially could subject the Company to
concentrations of credit risk consist principally of short-term investments and
receivables.
The Company's short-term investments typically consist of U.S.
Government-backed repurchase agreements with maturities of 30 days or less. Such
investments are made with financial institutions having a high credit quality
and the Company limits the amount of its credit exposure to any one financial
institution. Due to the short-term nature of the instruments, the Company does
not take possession of the securities, which are instead held in a custodial
account.
The Company extends credit to a limited number of casino patrons, but only
following background checks and investigations of creditworthiness. At December
31, 1994, a substantial portion of the receivables was due from foreign
customers. The collectibility of these receivables could be
29
<PAGE>
MIRAGE RESORTS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
affected by future business or economic trends or other significant events in
the countries in which such customers reside. At December 31, 1994, no
individual customer accounted for more than five percent of the Company's total
receivables.
The Company maintains an allowance for doubtful accounts to reduce its
receivables to their carrying amount, which approximates fair value. Management
believes that as of December 31, 1994, no significant concentrations of credit
risk existed for which an allowance had not already been determined and
recorded.
INVENTORIES
Inventories are stated at the lower of cost or market value. Cost is
determined by the first-in, first-out and specific identification methods.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost and include interest capitalized
during the development period. Depreciation is computed using the straight-line
method for financial reporting purposes and accelerated methods for income tax
purposes.
Significant replacements and improvements are capitalized; other maintenance
and repairs are expensed. The cost and accumulated depreciation of assets
retired or otherwise disposed of are eliminated from the accounts and any
resulting gain or loss is credited or charged to income, as appropriate.
DEBT DISCOUNT AND ISSUANCE COSTS
Debt discount and issuance costs incurred in connection with long-term debt
are capitalized and amortized to expense based on the terms of the related debt
agreements using the effective interest method or a method which approximates
the effective interest method.
CORPORATE EXPENSE
Corporate expense represents unallocated payroll costs, professional fees,
costs associated with operating and maintaining the Company's jet aircraft and
various other expenses not directly related to operating the Company's
hotel-casinos. Corporate expense includes the costs associated with the
Company's evaluation and pursuit of potential opportunities in new and emerging
gaming jurisdictions.
PREOPENING AND RELATED PROMOTIONAL EXPENSE
Preopening and related promotional expense primarily represents direct
personnel and other operating costs incurred prior to the opening of new
hotel-casinos. These costs are capitalized and amortized to expense on a
straight-line basis over management's estimate of the period of economic benefit
associated with such costs. Management believes that such period with respect to
major hotel-casinos is approximately 60 days. As a result, the capitalized
preopening costs associated with the development of Treasure Island were fully
amortized to expense during 1993 following the October 26 commencement of
operations.
INCOME PER SHARE OF COMMON STOCK
Income per share of common stock is computed based on the weighted average
number of shares of common stock and dilutive common stock equivalents
outstanding during the period. Common stock equivalents included in the
computation consist of those shares issuable upon the assumed exercise of
dilutive common stock options as determined under the treasury stock method. The
number of shares used in the computation of income per share of common stock was
94,695,036 in 1994, 83,409,411 in 1993 and 69,949,015 in 1992.
30
<PAGE>
MIRAGE RESORTS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fully diluted per share amounts are substantially the same as primary per
share amounts for the periods presented.
RECLASSIFICATIONS
Certain amounts in the 1993 and 1992 consolidated financial statements have
been reclassified to conform with the 1994 presentation. These reclassifications
had no effect on the Company's net income.
NOTE 2 -- RECEIVABLES
Receivables consisted of the following:
<TABLE>
<CAPTION>
AT DECEMBER 31
----------------------------
1994 1993
------------- -------------
(IN THOUSANDS)
<S> <C> <C>
Casino.......................................................... $ 88,179 $ 74,237
Hotel........................................................... 9,950 10,821
------------- -------------
98,129 85,058
Less allowance for doubtful accounts............................ (37,937) (26,876)
------------- -------------
$ 60,192 $ 58,182
------------- -------------
------------- -------------
</TABLE>
NOTE 3 -- PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
AT DECEMBER 31
----------------------------
1994 1993
------------- -------------
(IN THOUSANDS)
<S> <C> <C>
Land............................................................ $ 201,590 $ 191,176
Land improvements............................................... 120,775 117,348
Buildings....................................................... 871,980 866,921
Furniture, fixtures and equipment............................... 560,299 553,006
Construction in progress........................................ 25,313 24,661
------------- -------------
1,779,957 1,753,112
Less accumulated depreciation................................... (404,965) (331,746)
------------- -------------
$ 1,374,992 $ 1,421,366
------------- -------------
------------- -------------
</TABLE>
NOTE 4 -- ACCRUED EXPENSES
Accrued expenses consisted of the following:
<TABLE>
<CAPTION>
AT DECEMBER 31
----------------------------
1994 1993
------------- -------------
(IN THOUSANDS)
<S> <C> <C>
Payroll......................................................... $ 29,782 $ 30,518
Interest........................................................ 6,526 10,409
Gaming taxes.................................................... 6,375 6,136
Entertainers' fees.............................................. 2,090 9,899
Other........................................................... 28,971 25,960
------------- -------------
$ 73,744 $ 82,922
------------- -------------
------------- -------------
</TABLE>
31
<PAGE>
MIRAGE RESORTS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 5 -- LONG-TERM DEBT
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
AT DECEMBER 31
------------------------
1994 1993
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
9 7/8% first mortgage notes, called for redemption on March 13,
1995............................................................... $ 125,991 $ 300,000
Zero coupon first mortgage notes (effective interest rate of 11%),
due March 1998..................................................... 93,935 93,781
9 1/4% senior subordinated notes, due March 2003.................... 100,000 100,000
Amount due under bank credit facilities at a floating interest rate
(7.313% at December 31, 1994), due May 1999........................ 20,000 17,000
Floating rate aircraft loan (7.838% at December 31, 1994), due
December 1996...................................................... 22,134 25,951
Floating rate first mortgage notes, matured March 1994.............. -- 27,000
Other notes bearing interest at rates between 7% and 12% at December
31, 1994, maturities to September 2007............................. 1,510 2,910
----------- -----------
363,570 566,642
Less current maturities............................................. (3,986) (31,617)
----------- -----------
$ 359,584 $ 535,025
----------- -----------
----------- -----------
</TABLE>
The following notes are collateralized on a PARI PASSU basis by first liens
on The Mirage and Treasure Island:
- The 9 7/8% first mortgage notes. The notes were issued in March 1992 by
Treasure Island Finance Corp., an indirect wholly owned subsidiary of the
Company, and are guaranteed by The Mirage and Treasure Island operating
subsidiaries. The indenture governing the notes limited the use of the
net proceeds from the offering to fund a portion of the cost of the
development and construction of Treasure Island. The notes (originally
scheduled to mature in October 2000) were called for redemption on March
13, 1995 and will be redeemed on April 12, 1995 at a redemption price of
106.5% of the principal amount. The extraordinary loss on the redemption
of approximately $6.8 million, net of applicable income tax benefits of
approximately $3.6 million, will be reflected in the Company's 1995 first
quarter results. The cost of the redemption will be provided by
borrowings under the bank credit facility discussed below and internal
cash flows.
- The zero coupon first mortgage notes. The notes were issued in March 1988
by GNS FINANCE CORP. ("Finance"), a wholly owned subsidiary of the
Company, and are guaranteed by The Mirage operating subsidiary. The net
proceeds from the offering were used to fund a portion of the cost of the
development and construction of The Mirage. The notes are shown in the
above table at their accreted value rather than their face amount, as the
holders of the notes are not entitled to the face amount upon default or
other accelerated maturity, but only to the accreted value, an amount
which approximates the face amount less the unamortized debt discount.
The unamortized debt discount was $39,065,000 and $54,219,000 at December
31, 1994 and 1993, respectively.
32
<PAGE>
MIRAGE RESORTS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 5 -- LONG-TERM DEBT (CONTINUED)
The 9 1/4% senior subordinated notes were issued by Finance in March 1993.
As required by the indenture governing the notes, the net proceeds from the
offering were used to retire senior indebtedness related to The Mirage and
Treasure Island. The notes are guaranteed by The Mirage operating subsidiary and
are redeemable at the option of the Company, in whole or in part, on or after
March 15, 1998 at prices set forth in the indenture.
On May 25, 1994, the Company obtained a $525 million revolving credit
facility from a group of commercial banks (the "New Facility"), replacing its
previous $150 million bank credit facility. Borrowings under the New 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 senior indebtedness. Effective February 15,
1995, the premium was 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 New Facility, which is also based on the Company's Annualized
Funded Debt Ratio and the rating of its senior indebtedness. Effective February
15, 1995, the commitment fee was 0.35% per annum.
The Company and most of its significant subsidiaries, excluding the
subsidiaries which own and operate the Golden Nugget and the Golden
Nugget-Laughlin and certain other subsidiaries (the "Excluded Subsidiaries"),
are directly liable for or have guaranteed the repayment of borrowings under the
New Facility. Borrowings under the New Facility are collateralized by first
deeds of trust on the Dunes site and the Company's Shadow Creek Golf Course.
The credit agreement governing the New Facility contains financial covenants
requiring the Company and most of its subsidiaries (other than the Excluded
Subsidiaries) to maintain a specified tangible net worth and to meet certain
financial ratios. The credit agreement also contains covenants that impose
various restrictions (subject to permitted amounts) on the ability of the
Company and most of 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. At December 31, 1994,
the credit agreement limited dividend payments on and repurchases of the
Company's common stock to $75 million.
The floating rate aircraft loan was obtained in October 1992 and is
guaranteed by the Company and collateralized by first liens on the Company's jet
aircraft. The loan bears interest, at the Company's option, at a fixed rate
equal to the three-year Treasury rate plus 3.05% or at a floating rate equal to
the one-month LIBOR plus 2.4%. In February 1995, the Company prepaid $14,583,000
principal amount of the loan. The remaining $6,915,000 principal balance is
payable in equal monthly payments, plus interest, calculated to retire
$2,305,000 principal amount through the December 1996 maturity date.
33
<PAGE>
MIRAGE RESORTS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 5 -- LONG-TERM DEBT (CONTINUED)
During the three years ended December 31, 1994, the Company retired, prior
to scheduled maturities, certain of the publicly held debt securities issued by
its wholly owned subsidiaries. The debt securities and respective principal
amounts retired, and the resulting aggregate extraordinary loss, were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------
1994 1993 1992
----------- ----------- --------------
<S> <C> <C> <C>
(IN THOUSANDS)
NOTES ASSOCIATED WITH
THE MIRAGE AND TREASURE ISLAND
13 3/4% first mortgage notes...................... $ -- $ 100,000 $ --
11% first mortgage notes.......................... -- -- 92,500
Zero coupon first mortgage notes (A).............. 10,320 -- --
9 7/8% first mortgage notes....................... 174,009 -- --
12% second mortgage notes......................... -- 33,350 107,125
13 3/4% uncollateralized notes.................... -- -- 118,900
NOTES ASSOCIATED WITH
THE GOLDEN NUGGET-LAS VEGAS
11 1/4% first mortgage notes...................... -- 110,050 7,700
12 3/4% uncollateralized notes.................... -- 112,941 1,064
----------- ----------- --------------
Total principal amount.......................... $ 184,329 $ 356,341 $ 327,289
----------- ----------- --------------
----------- ----------- --------------
EXTRAORDINARY LOSS
Gross extraordinary loss.......................... $ (13,028) $ (28,980) $ (18,421)
Income tax benefit................................ 4,560 10,143 6,263
----------- ----------- --------------
Net extraordinary loss.......................... $ (8,468) $ (18,837) $ (12,158)
----------- ----------- --------------
----------- ----------- --------------
<FN>
------------------------
(A) Represents the accreted value of the notes on the date of
retirement. The face amount of the notes retired was $15.0 million.
</TABLE>
During 1994, the Company incurred an additional extraordinary loss of
$1,947,000, net of applicable income tax benefit of $1,049,000, in connection
with the write-off of the unamortized deferred financing costs associated with
the $150 million bank credit facility.
Maturities of the Company's long-term debt during the next five years are as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 (IN THOUSANDS)
------------------------------------------------------------------------------ --------------
<S> <C>
1995.......................................................................... $ 3,986
1996.......................................................................... 18,425
1997.......................................................................... 114
1998.......................................................................... 133,120
1999.......................................................................... 20,127
</TABLE>
The maturity amounts shown in the above table do not give effect to the
February 1995 prepayment of $14,583,000 principal amount of the floating rate
aircraft loan or the March 13, 1995 call for redemption of the 9 7/8% first
mortgage notes.
The estimated fair value of the Company's long-term debt at December 31,
1994 was approximately $373 million, versus its book value of approximately $364
million. At December 31, 1993, the estimated fair value of the Company's
long-term debt was approximately $610 million, versus its book
34
<PAGE>
MIRAGE RESORTS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 5 -- LONG-TERM DEBT (CONTINUED)
value of approximately $567 million. The estimated fair value amounts were based
on quoted market prices on or about December 31, 1994 and 1993 for the Company's
debt securities that are traded. For the debt securities that are not traded,
fair value was estimated based on the quoted market prices for similar issues or
on the current rates offered to the Company for debt having the same remaining
maturities.
NOTE 6 -- INCOME TAXES
Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards No. 109, ACCOUNTING FOR INCOME TAXES. The cumulative effect
on prior years of this change in accounting principle was an increase in the
Company's 1992 net income of $3,632,000 ($.05 per share), and is reported
separately in the 1992 Consolidated Statement of Income.
The provision for income taxes for financial reporting purposes consisted of
the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------
1994 1993 1992
--------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Income from continuing operations........................ $ 71,265 $ 24,234 $ 8,638
Tax benefit from extraordinary losses on early
retirements of debt..................................... (5,609) (10,143) (6,263)
--------- ---------- ----------
$ 65,656 $ 14,091 $ 2,375
--------- ---------- ----------
--------- ---------- ----------
</TABLE>
The provision for income taxes attributable to income from continuing
operations consisted of the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------
1994 1993 1992
--------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
CURRENT
Federal................................................ $ 39,538 $ 17,054 $ 22,665
State.................................................. 188 1 177
--------- ---------- ----------
39,726 17,055 22,842
DEFERRED
Federal................................................ 31,539 7,179 (14,204)
--------- ---------- ----------
$ 71,265 $ 24,234 $ 8,638
--------- ---------- ----------
--------- ---------- ----------
</TABLE>
The provision for income taxes attributable to income from continuing
operations differs from the amount computed at the federal income tax statutory
rate as a result of the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------
1994 1993 1992
--------- ---------- ----------
<S> <C> <C> <C>
Federal income tax statutory rate........................ 35% 35% 34%
--------- ---------- ----------
(IN THOUSANDS)
Amount at statutory rate................................. $ 68,601 $ 25,306 $ 15,498
Settlement of examinations............................... -- (1,336) (7,000)
Change in statutory rate................................. -- 1,386 --
Other, net............................................... 2,664 (1,122) 140
--------- ---------- ----------
$ 71,265 $ 24,234 $ 8,638
--------- ---------- ----------
--------- ---------- ----------
</TABLE>
35
<PAGE>
MIRAGE RESORTS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6 -- INCOME TAXES (CONTINUED)
The Internal Revenue Service has completed examinations of the Company's
federal income tax returns through 1990, and all issues relating to the
examinations have been resolved. An examination of the years 1991 and 1992 is
currently in process. In the opinion of management, any tax liability arising
from the current examination will not have a material adverse effect on the
Company's financial position or results of operations.
The Company increased its 1993 income tax provision and deferred tax
liability as a result of legislation enacted on August 10, 1993 which increased
the federal income tax statutory rate from 34% to 35% effective January 1, 1993.
The components of the deferred tax liability consisted of the following:
<TABLE>
<CAPTION>
AT DECEMBER 31
------------------------
1994 1993
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
DEFERRED TAX LIABILITIES
Temporary differences related to property and equipment........... $ 129,092 $ 103,927
Other temporary differences....................................... 16,199 12,492
----------- -----------
Gross deferred tax liabilities.................................. 145,291 116,419
----------- -----------
DEFERRED TAX ASSETS
Alternative minimum tax credit (a)................................ 42,769 29,309
Provision for losses on receivables............................... 13,278 9,407
Preopening and related promotional expense, net of amortization... 5,733 10,826
Deferred compensation............................................. 4,406 3,861
Net operating loss carryforward................................... -- 19,179
Other temporary differences....................................... 16,611 10,478
----------- -----------
Gross deferred tax assets....................................... 82,797 83,060
----------- -----------
Net deferred tax liabilities.................................... $ 62,494 $ 33,359
----------- -----------
----------- -----------
<FN>
------------------------
(a) The excess of the alternative minimum tax over the regular federal
income tax is a tax credit which can be carried forward indefinitely
to reduce future federal income tax liabilities.
</TABLE>
NOTE 7 -- EMPLOYEE BENEFIT PLANS
Employees of the Company who are members of various unions are covered by
union-sponsored, collectively bargained, multi-employer health and welfare and
defined benefit pension plans. The Company recorded an expense of $25,692,000 in
1994, $24,223,000 in 1993 and $20,195,000 in 1992 under such plans. Sufficient
information is not available from the plans' sponsors to permit the Company to
determine its share of unfunded vested benefits, if any.
The Company has a retirement savings plan under Section 401(k) of the
Internal Revenue Code covering its non-union employees. The plan allows
employees to defer up to the lesser of the Internal Revenue Code-prescribed
maximum amount ($9,240 for 1994) or 15% of their income on a pre-tax
36
<PAGE>
MIRAGE RESORTS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 7 -- EMPLOYEE BENEFIT PLANS (CONTINUED)
basis through contributions to the plan. The Company matches 50% of eligible
employees' contributions up to a maximum of 4% of their individual earnings
(provided that, for such purpose, earnings may not exceed $150,000 per year).
The Company recorded charges for matching contributions of $2,583,000 in 1994,
$2,458,000 in 1993 and $2,060,000 in 1992.
The Company also has a deferred compensation plan for the benefit of certain
of its key executives. Under the terms of the plan, each executive will be
entitled to a retirement benefit payable in 120 equal monthly installments
commencing in the month following the vesting date. Vesting is based upon age
and years of service. The amount of the annual benefit payable to each executive
will be equal to his annual salary on the date he entered the plan increased by
8% per year from the later of the effective date or the date the executive has
completed 10 years of full-time service to the vesting date, or the date payment
commences if the executive remains employed on a full-time basis by the Company
and elects to defer payment. Benefits payable under the plan represent unfunded
and unsecured liabilities of the Company, and the present value of such benefits
is being charged ratably to expense over the respective vesting period of each
executive.
The Company has entered into amendments to the original plan agreements with
certain of the executives. Pursuant to certain of the amendments, executives
received restricted shares of the Company's common stock in lieu of future
monthly cash payments. During the vesting period, the shares may not be
transferred or encumbered, except in limited circumstances, and are subject to
risk of forfeiture. The number of shares issued to each executive was based upon
the estimated value of the executive's interest in the plan and the value of the
shares on the date of amendment, taking into account the transferability and
forfeiture restrictions on the shares. The Company issued 182,191 restricted
shares of common stock in 1993 pursuant to the amendments. Deferred compensation
expense based upon the difference between the market price of the common stock
on the date of amendment and the amount previously accrued for the executive's
original retirement benefit is being recorded on a straight-line basis over the
respective vesting period of each executive.
The total expense for the plan was $2,751,000 in 1994, $1,830,000 in 1993
and $3,355,000 in 1992.
NOTE 8 -- COMMITMENTS AND CONTINGENCIES
LEASES
The Company leases real estate and various equipment under operating lease
arrangements. Certain real estate leases provide for escalation of rent based
upon a specified price index. Future minimum lease commitments in effect at
December 31, 1994 were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 (IN THOUSANDS)
------------------------------------------------------------------------------ --------------
<S> <C>
1995.......................................................................... $ 3,255
1996.......................................................................... 2,505
1997.......................................................................... 2,165
1998.......................................................................... 1,309
1999.......................................................................... 1,249
Thereafter.................................................................... 16,696
--------------
$ 27,179
--------------
--------------
</TABLE>
Aggregate rent expense was $3,223,000 in 1994, $3,207,000 in 1993 and
$3,164,000 in 1992.
ENTERTAINMENT SERVICES
The Company has entered into two agreements for major productions appearing
in the showrooms at The Mirage and Treasure Island which expire in 1998 and
1999, respectively. Under the
37
<PAGE>
MIRAGE RESORTS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 8 -- COMMITMENTS AND CONTINGENCIES (CONTINUED)
terms of the agreements, the Company is required to pay the producers of the
shows a total of approximately $27 million per year and a percentage of show
revenues in excess of a specified amount or a percentage of show profits. The
producers are responsible for paying the talent and most other costs of
presenting the shows. Future minimum payments remaining under the agreements at
December 31, 1994 total approximately $118 million. However, such payments are
contingent upon the actual performance of shows and under certain conditions,
including failure of the respective show to achieve specified financial results,
the Company may terminate the agreements without material financial obligation.
The Company made payments pursuant to the agreements and a previous agreement
totaling approximately $46.8 million in 1994, $31.6 million in 1993 and $21.4
million in 1992. The agreements can be extended at the Company's option until
2001 for the production at The Mirage and until 2004 for the production at
Treasure Island.
ROOM ENHANCEMENT PROGRAM
In December 1994, the Company finalized plans to materially enhance the
2,765 standard guest rooms and 61 of the 279 suites at The Mirage. The program,
which commenced in late February 1995, is expected to cost approximately $55
million and be completed by mid-August 1995. The room enhancement program will
result in approximately 9% fewer available room-nights at The Mirage in 1995
than in 1994.
The Company recorded an $11.0 million abandonment loss in December 1994 in
connection with the room enhancement program. The loss is included in "General
and administrative" costs and expenses in the Consolidated Statement of Income
and reflects the estimated book value of the furniture and fixtures that are
being replaced, net of depreciation charges through the date they are expected
to be removed from service and net of estimated salvage value.
LITIGATION
The Company is a party to various legal proceedings, most of which relate to
routine matters incidental to its business. Management does not believe that the
outcome of such proceedings will have a material adverse effect on the Company's
financial position or results of operations.
NOTE 9 -- STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The Company has various stock option and stock appreciation rights plans
under which stock options and stock appreciation rights ("SARs") may be granted
to officers, directors, employees, agents or independent contractors of the
Company. Options granted under the plans may be either nonqualified or incentive
stock options. Stock options may be exercised using cash or the Company's common
stock. SARs may be exercised for cash or the Company's common stock. The terms
governing the exercise of options and SARs granted under the plans are
determined by the Company's Board of Directors or its designated committee. At
December 31, 1994, no SARs had been granted under the plans.
The Company also has a non-employee director stock option plan providing for
the grant of 12,500 stock options to each non-employee director of the Company
upon completion of 36 consecutive calendar months of service with the Company
and an additional 2,500 stock options in each succeeding year in which such
person continues to serve as a director. Stock options granted under the plan
have an exercise price equal to the market value of the Company's common stock
on the date of grant and become exercisable three years thereafter. An aggregate
of 250,000 stock options may be granted under the plan.
38
<PAGE>
MIRAGE RESORTS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 9 -- STOCK OPTIONS AND STOCK APPRECIATION RIGHTS (CONTINUED)
Summarized information for the stock option plans is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------------
1994 1993 1992
------------- ------------- -------------
<S> <C> <C> <C>
Options outstanding, beginning of year........... 13,013,335 13,743,043 14,483,125
Granted.......................................... 52,500 1,446,000 6,740,000
Exercised........................................ (392,751) (2,098,208) (7,192,582)
Terminated....................................... (43,750) (77,500) (287,500)
------------- ------------- -------------
Options outstanding, end of year................. 12,629,334 13,013,335 13,743,043
------------- ------------- -------------
------------- ------------- -------------
Options and SARs available for grant at end of
year............................................ 5,045,250 5,059,707 6,437,583
Options exercisable at end of year............... 7,376,666 6,817,331 8,032,208
Average exercise price of options exercised
during the year................................. $6.59 $6.46 $4.00
Average exercise price of options outstanding at
end of year..................................... $11.39 $11.20 $9.89
</TABLE>
NOTE 10 -- CAPITAL STOCK
In April 1992, the Company completed an underwritten public offering of
12,500,000 shares of its common stock at $14.20 per share, generating net
proceeds of approximately $171.6 million.
In September 1993, the Board of Directors declared a five-for-two split of
the Company's common stock which was distributed October 29, 1993 to holders of
record on October 15, 1993. All references to share and per share data herein
have been adjusted retroactively to give effect to the stock split.
In November 1993, the Company completed an underwritten public offering of
13,750,000 shares of its common stock at $22.80 per share, generating net
proceeds of approximately $303.6 million.
In July 1994, the Company's Board of Directors approved a program to
repurchase up to 5,000,000 shares of the Company's common stock from time to
time in the open market. At December 31, 1994, no shares had been repurchased
pursuant to this program. The timing and amount of share repurchases, if any,
will depend on various factors, including market conditions, available
alternative investments and the Company's financial position.
The Company's articles of incorporation authorize 5,000,000 shares of
preferred stock, none of which has been issued.
NOTE 11 -- OTHER INCOME AND EXPENSES
In April 1992, the Company received $5,125,000 in connection with the
settlement of a dispute involving certain leasehold interests that it once owned
in London, England. Such amount is included in "Other, net" in the 1992
Consolidated Statement of Income.
39
<PAGE>
MIRAGE RESORTS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 12 -- QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH TOTAL
----------- ----------- ----------- ----------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
1994
Gross revenues.............................. $ 331,074 $ 333,959 $ 365,769 $ 340,139 $ 1,370,941
Promotional allowances...................... (30,620) (27,546) (29,424) (29,174) (116,764)
Net revenues................................ 300,454 306,413 336,345 310,965 1,254,177
Operating income............................ 48,267 56,873 74,929 57,770 237,839
Other expenses, net......................... (11,357) (9,463) (13,054) (7,961) (41,835)
Income before extraordinary item............ 23,348 30,162 39,505 31,724 124,739
Extraordinary loss on early retirements of
debt....................................... -- (4,564) (2,773) (3,078) (10,415)
Net income.................................. 23,348 25,598 36,732 28,646 114,324
Income per share before extraordinary
item....................................... .24 .32 .42 .34 1.32
Extraordinary loss per share................ -- (.05) (.03) (.04) (.11)
Net income per share........................ .24 .27 .39 .30 1.21
1993
Gross revenues.............................. $ 237,883 $ 254,025 $ 252,424 $ 309,081 $ 1,053,413
Promotional allowances...................... (23,110) (22,919) (24,292) (29,790) (100,111)
Net revenues................................ 214,773 231,106 228,132 279,291 953,302
Operating income............................ 31,252 41,692 40,988 17,796 131,728
Other expenses, net......................... (15,902) (15,085) (14,329) (14,109) (59,425)
Income before extraordinary item............ 10,396 17,981 17,289 2,403 48,069
Extraordinary loss on early retirements of
debt....................................... (806) (1,298) (6,915) (9,818) (18,837)
Net income (loss)........................... 9,590 16,683 10,374 (7,415) 29,232
Income per share before extraordinary
item....................................... .13 .22 .21 .03 .58
Extraordinary loss per share................ (.01) (.01) (.08) (.11) (.23)
Net income (loss) per share................. .12 .21 .13 (.08) .35
</TABLE>
Because income (loss) per share amounts are calculated using the weighted
average number of common and dilutive common equivalent shares outstanding
during each quarter, the sum of the per share amounts for the four quarters may
not equal the total income (loss) per share amounts for the year.
40
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
By: /s/ STEPHEN A. WYNN
-----------------------------------
Stephen A. Wynn, President
Dated: March 30, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------------------------------------------- ---------------------------------------------- ------------------
<C> <S> <C>
Chairman of the Board, President and Chief
/s/STEPHEN A. WYNN Executive Officer (Principal Executive March 30, 1995
Stephen A. Wynn Officer)
Senior Vice President -- Finance and
/s/DANIEL R. LEE Development, Chief Financial Officer and March 30, 1995
Daniel R. Lee Treasurer (Principal Financial Officer)
/s/HENRY M. APPLEGATE III Senior Vice President and Controller
Henry M. Applegate III (Principal Accounting Officer) March 30, 1995
/s/ELAINE P. WYNN
Elaine P. Wynn Director March 30, 1995
/s/GEORGE J. MASON
George J. Mason Director March 30, 1995
/s/MELVIN B. WOLZINGER
Melvin B. Wolzinger Director March 30, 1995
/s/RONALD M. POPEIL
Ronald M. Popeil Director March 30, 1995
/s/DANIEL B. WAYSON
Daniel B. Wayson Director March 30, 1995
/s/RICHARD D. BRONSON
Richard D. Bronson Director March 30, 1995
</TABLE>
41
<PAGE>
SCHEDULE II
MIRAGE RESORTS, INCORPORATED AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
ADDITIONS
BALANCE -------------------------
AT CHARGED TO CHARGED BALANCE
BEGINNING COSTS AND TO OTHER AT END
DESCRIPTION OF YEAR EXPENSES ACCOUNTS (A) DEDUCTIONS (B) OF YEAR
------------------------------------------------ --------- ----------- ------------ -------------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Allowance for doubtful accounts
Year Ended December 31, 1994.................. $ 26,876 $ 20,520 $ 1,314 $ 10,773 $ 37,937
Year Ended December 31, 1993.................. $ 34,915 $ 19,819 $ 1,327 $ 29,185 $ 26,876
Year Ended December 31, 1992.................. $ 26,906 $ 20,246 $ 1,708 $ 13,945 $ 34,915
<FN>
------------------------
(a) Recoveries of accounts previously charged off.
(b) Accounts charged off.
</TABLE>
S-1
<PAGE>
EXHIBIT 10(QQ)
MIRAGE RESORTS, INCORPORATED
AMENDED AND RESTATED 1994 CASH BONUS PLAN
1. PURPOSE.
This 1994 Cash Bonus Plan (the "Plan") is intended to advance the interests
of Mirage Resorts, Incorporated (the "Company"), its stockholders and its
subsidiaries by establishing specific performance-based goals for the award of
cash bonuses to the Company's executive officers, upon whose judgment,
initiative and effort the Company is largely dependent for the successful
conduct of its business.
2. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Board of Directors of the Company (the
"Board") or by a committee consisting of not less than two "outside" directors
as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder (the "Committee"); provided, however,
that if all members of the Board are not "outside" directors within the meaning
of such definition, the Board shall appoint such a Committee. The Board may from
time to time remove members from the Committee, fill all vacancies in the
Committee, however caused, and may select one of the members of the Committee as
its chairman.
The Committee shall hold its meetings at such times and places as it may
determine, shall keep minutes of its meetings and, except as provided in
Paragraph 6, shall adopt, amend and revoke such rules or procedures as it may
deem proper; provided, however, that it may take action only upon the agreement
of a majority of the whole Committee. Any action that the Committee shall take
through a written instrument signed by a majority of its members shall be as
effective as though it had been taken at a meeting duly called and held. The
Committee shall report all actions taken by it to the Board.
The Committee shall have full and final authority in its discretion, subject
to the provisions of the Plan, to grant cash bonuses pursuant to the Plan, to
construe and interpret the Plan and to make all other determinations and take
all other actions deemed necessary or advisable for the proper administration of
the Plan. All such actions and determinations shall be conclusively binding for
all purposes and upon all persons.
3. MAXIMUM AMOUNT OF BONUSES.
The maximum aggregate amount of cash bonuses to be awarded for each fiscal
year under the Plan shall be five percent (5%) of the excess of the Company's
consolidated earnings before depreciation, interest and taxes ("EBDIT") for such
fiscal year over $200,000,000, except that if the Company shall have not
completed the spin-off of the stock of GNLV, CORP. and related subsidiaries
prior to the end of such fiscal year, the maximum aggregate amount of cash
bonuses for such fiscal year shall be five percent (5%) of the excess of EBDIT
for such fiscal year over $250,000,000. The maximum cash bonus to be awarded for
each fiscal year under the Plan to any executive officer shall not exceed fifty
percent (50%) of such executive officer's annual base salary in effect on the
Effective Date of the Plan.
4. PROCEDURE FOR AWARD OF BONUSES.
No bonus awarded pursuant to the Plan may be paid prior to December 15 of
the fiscal year for which such bonus is awarded. Any bonus awarded pursuant to
the Plan shall be reflected in approved minutes of a Committee meeting.
5. PARTICIPANTS.
Cash bonuses may be awarded under the Plan only to the Company's executive
officers.
6. AMENDMENT, SUSPENSION AND TERMINATION OF THE PLAN.
The Committee may at any time suspend or terminate the Plan or may amend it
from time to time in such respects as the Committee may deem advisable so that
bonuses awarded under the Plan conform to any changes in the law or in any other
respect which the Committee may deem to be in the best interests of the Company;
provided, however, that without approval of a majority of the shares voting on
the matter in a vote by the stockholders of the Company, no such amendment shall
increase the maximum annual bonus payable to any participant, accelerate the
time for the payment of any bonus or change the class of eligible participants.
Unless the Plan shall previously have been terminated by the Committee or as
provided in Paragraph 7, the Plan shall terminate five years after the Effective
Date.
7. EFFECTIVE DATE OF THE PLAN AND STOCKHOLDER APPROVAL.
The Effective Date of the Plan shall be March 31, 1994, the date of its
adoption by the Committee, subject however to its approval by the stockholders
of the Company representing a majority of the shares voting on the matter at the
first stockholders' meeting after the Effective Date.
<PAGE>
EXHIBIT 10(uu)
AMENDMENT NO. 1 TO REDUCING REVOLVING LOAN AGREEMENT
This Amendment No. 1 to Reducing Revolving Loan Agreement (this
"Amendment") dated as of January 31, 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 (the "Loan
Agreement").
1. AMENDMENT TO SECTION 1.1 - DEFINITIONS. Section 1.1 of the Loan
Agreement is amended so that the following definitions set forth therein read in
full as follows:
"'ATTRIBUTED LAND VALUE' means (a) as of the Closing Date,
$30,000,000, and (b) as of each subsequent date of determination, an amount
which is equal to the total permanent cash equity Investment of GSP and
MRGS in Borrower."
"'EBITDA' means, for any fiscal period, the SUM of (a) Net Income for
that period, PLUS (b) any extraordinary loss reflected in such Net Income,
MINUS (c) any extraordinary gain reflected in such Net Income, PLUS
(d) Interest Expense for that period, PLUS (e) the aggregate amount of
federal and state taxes on or measured by income of Borrower and its
Subsidiaries for that period (whether or not payable during that period),
PLUS (f) depreciation, amortization and all other non-cash expenses for
that period, PLUS (g) all pre-opening expenses, if any, incurred during
that period, in each case determined in accordance with Generally Accepted
Accounting Principles and, in the case of items (d), (e), and (g), only to
the extent deducted in the determination of Net Income for that period."
"'EURODOLLAR PERIOD' means, as to each Eurodollar Rate Loan, the
period commencing on the date specified by Borrower pursuant to
Section 2.1(b) and ending on any date which is not more than six months
thereafter (without the requirement that any such period be an integral
number of months), as specified by Borrower in the applicable Request for
Loan; PROVIDED that:
(a) The first day of any Eurodollar Period shall be a Eurodollar
Banking Day;
(b) Any Eurodollar Period that would otherwise end on a day that
is not a Eurodollar Banking Day
<PAGE>
shall be extended to the next succeeding Eurodollar Banking Day unless
such Eurodollar Banking Day falls in another calendar month, in which
case such Eurodollar Period shall end on the next preceding Eurodollar
Banking Day;
(c) No Eurodollar Period shall extend beyond any Quarterly
Payment Date unless the aggregate principal amount of all Eurodollar
Rate Loans with a Eurodollar Period ending on or after that Quarterly
Payment Date is no more than the Commitment which will be in effect on
that Quarterly Payment Date (after giving effect to any reductions
thereto scheduled for that Quarterly Payment Date); and
(d) No Eurodollar Period shall extend beyond the Maturity Date."
"'FUNDED DEBT' means, as of any date of determination, without
duplication, the SUM of (a) all principal Indebtedness of Borrower and its
Subsidiaries for borrowed money on that date (INCLUDING debt securities
issued by Borrower or any of its Subsidiaries), MINUS (b) the principal
Indebtedness of Borrower pursuant to the Partner Subordinated Notes on that
date, PLUS (c) the aggregate amount of all Capital Lease Obligations of
Borrower and its Subsidiaries on that date."
"'PERMITTED TAX DISTRIBUTIONS' means Distributions made by Borrower to
the partners of Borrower in an aggregate amount not exceeding the combined
federal and state income tax then payable (INCLUDING estimated income taxes
then payable) under then applicable Laws with respect to the taxable income
of Borrower attributable to the ultimate tax-paying Persons directly or
indirectly owning Borrower (INCLUDING their distributive shares of any
components or tax attributes thereof), assuming:
(i) that the tax rate payable by each such Person with respect thereto
is the highest statutory individual or corporate tax rate (whichever
is higher) then in effect with respect to any such Person;
(ii) that such Persons have no other taxable income, loss, deductions
or other tax attributes; and
(iii) that any net operating loss carryforward attributable to
Borrower if it were a tax-paying entity would be available in such
Fiscal Year to such Persons;
-2-
<PAGE>
all as set forth in calculations in reasonable detail attached to a
Certificate of a Responsible Official of Borrower furnished to the
Administrative Agent not later than five (5) days prior to any such
Distribution."
2. AMENDMENT TO SECTIONS 3.1(b) AND (c). Sections 3.1(b) and 3.1(c)
of the Loan Agreement are hereby amended to read in full as follows:
"(b) Interest accrued on each Alternate Base Rate Loan on the
first Banking Day of each calendar month, and on the date of any prepayment
of the Notes pursuant to Section 3.1(f), shall be due and payable on that
day. EXCEPT as otherwise provided in Section 3.9, the unpaid principal
amount of any Alternate Base Rate Loan shall bear interest at a fluctuating
rate per annum equal to the Alternate Base Rate PLUS the Applicable
Alternate Base Rate Margin. Each change in the interest rate under this
Section 3.1(b) due to a change in the Alternate Base Rate shall take effect
simultaneously with the corresponding change in the Alternate Base Rate.
"(c) Interest accrued on each Eurodollar Rate Loan on the first
Banking Day of each calendar month, and on the date of any prepayment of
the Notes pursuant to Section 3.1(f), shall be due and payable on that day.
EXCEPT as otherwise provided in Sections 3.1(d) and 3.9, the unpaid
principal amount of any Eurodollar Rate Loan shall bear interest at a rate
per annum equal to the Eurodollar Rate for that Eurodollar Rate Loan PLUS
the Applicable Eurodollar Rate Margin."
3. AMENDMENT TO SECTION 3.4. Section 3.4 of the Loan Agreement is
hereby amended to read in full as follows:
"3.4 COMMITMENT FEES. From November 1, 1994, Borrower shall pay to
the Administrative Agent, for the ratable accounts of the Banks pro rata
according to their Pro Rata Share of the Commitment, a commitment fee equal
to the Applicable Commitment Fee Rate per annum TIMES the average daily
amount by which the Commitment exceeds the aggregate principal Indebtedness
outstanding under the Notes. The commitment fee shall be payable monthly
in arrears on the first Banking Day of each calendar month and on the
Maturity Date."
4. AMENDMENT TO SECTION 7.1(b). Section 7.1(b) of the Loan
Agreement is hereby amended to read in full as follows:
"(b) As soon as practicable, and in any event within 30 days after
the end of each calendar month, (i) the
-3-
<PAGE>
consolidated balance sheet of Borrower and its Subsidiaries as at the end
of such calendar month and the consolidated statement of operations for
such calendar month, and (ii) the consolidating balance sheets and
statements of operations as at and for the portion of the Fiscal Year ended
with such calendar month, all in reasonable detail. Such financial
statements shall be certified by the Chief Financial Officer or Treasurer
of Borrower as fairly presenting the financial condition and results of
operations of Borrower and its Subsidiaries in accordance with Generally
Accepted Accounting Principles (other than footnote disclosures),
consistently applied, as at such date and for such periods, subject only to
normal year-end accruals and audit adjustments;"
5. 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.
6. 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: /s/ Glenn Schaeffer
----------------------------------------
Title: Partner
-------------------------------------
By: MRGS Corp., a Nevada corporation,
general partner
By: /s/ Daniel R. Lee
----------------------------------------
Daniel R. Lee, Chief Financial
Officer and Treasurer
-4-
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative
Agent
By: /s/ Peggy A. Fujimoto
----------------------------------------
Peggy A. Fujimoto, Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
By: /s/ Jon Varnell
----------------------------------------
Jon Varnell, Vice President
BANK OF AMERICA NEVADA, as a Bank and
as Swing Line Bank
By: /s/ Alan P. Gordon
----------------------------------------
Alan F. Gordon, Vice President
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY, as Co-Agent
and a Bank
By: /s/ Motokazu Uematsu
----------------------------------------
Motokazu Uematsu, Deputy General Manager
----------------------------------------
[Printed Name & Title]
SOCIETE GENERALE, as Co-Agent and a
Bank
By: /s/ Donald L. Schubert
----------------------------------------
Donald L. Schubert, Vice President
FIRST SECURITY BANK OF IDAHO, N.A. as
a Bank
By: /s/ Victor W. Gillett
----------------------------------------
Victor W. Gillett, Vice President
-5-
<PAGE>
FIRST SECURITY BANK OF UTAH, N.A., as
a Bank
By: /s/ David P. Williams
----------------------------------------
David P. Williams, Vice President
BANK OF SCOTLAND, as a Bank
By: /s/ Catherine M. Oniffrey
----------------------------------------
Catherine M. Oniffrey,
Vice President
MIDLANTIC BANK, N.A. as a Bank
By: /s/ Denise D. Killen
----------------------------------------
Denise D. Killen, Vice President
U.S. BANK OF NEVADA, as a Bank
By: /s/ Amy Ethridge
----------------------------------------
Amy Ethridge, Vice President
The undersigned consents to the foregoing:
GOLDSTRIKE FINANCE, INC.
By: /s/ Michael S. Ensign
---------------------------
Title: President/Partner
------------------------
<PAGE>
EXHIBIT 11
MIRAGE RESORTS, INCORPORATED AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER SHARE OF COMMON STOCK
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
------------------------------------------------
1994 1993 (A) 1992 (A)
---------------- -------------- --------------
<S> <C> <C> <C>
Weighted-average shares outstanding............................ 90,873,657 77,790,406 65,341,820
Common stock equivalents (b)................................... 3,821,379 5,619,005 4,607,195
---------------- -------------- --------------
Weighted-average shares outstanding and common stock
equivalents used in the computation of primary earnings per
share......................................................... 94,695,036 83,409,411 69,949,015
Additional shares for fully diluted calculation (c)............ 98,686 1,544,679 2,069,145
---------------- -------------- --------------
Total shares outstanding assuming full dilution................ 94,793,722 84,954,090 72,018,160
---------------- -------------- --------------
---------------- -------------- --------------
Net income..................................................... $ 114,324,000 $ 29,232,000 $ 28,419,000
---------------- -------------- --------------
---------------- -------------- --------------
Primary earnings per share..................................... $ 1.21 $ 0.35 $ 0.41
---------------- -------------- --------------
---------------- -------------- --------------
Fully diluted earnings per share............................... $ 1.21 $ 0.34 $ 0.39
---------------- -------------- --------------
---------------- -------------- --------------
<FN>
------------------------
(a) The 1993 and 1992 share and option data has been adjusted retroactively to
give effect to the five-for-two split of the Registrant's common stock
effective October 15, 1993.
(b) Shares issuable upon the assumed exercise of dilutive stock options, less
the number of treasury shares assumed to be purchased, at average market
price, from the proceeds of such exercises.
(c) Increase in net shares assumed to be issued upon the exercise of dilutive
stock options, based on the use of period-end market price in the
calculation of treasury shares assumed to be purchased.
</TABLE>
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF MIRAGE RESORTS, INCORPORATED
GOLDEN NUGGET, INC.
a New Jersey corporation
AC HOLDING CORP.
a Nevada corporation
AC HOLDING CORP. II
a Nevada corporation
ATLANDIA DESIGN AND FURNISHINGS, INC.
a New Jersey corporation
THE MIRAGE CASINO-HOTEL
a Nevada corporation
dba The Mirage
GNS FINANCE CORP.
a Nevada corporation
CAL INVESTMENTS, INC.
a Nevada corporation
GNLV, CORP.
a Nevada corporation
dba Golden Nugget
GNLV FINANCE CORP.
a Nevada corporation
THE MIRAGE-GOLDEN NUGGET LATIN AMERICA, LTD.
a Nevada corporation
GNRM, CORP.
a Nevada corporation
GOLDEN NUGGET (ASIA) LTD.
a Nevada corporation
THE MIRAGE-GOLDEN NUGGET HONG KONG, LTD.
a Nevada corporation
GOLDEN NUGGET AVIATION CORP.
a Nevada corporation
GOLDEN NUGGET MANUFACTURING CORP.*
a Nevada corporation
GNL, CORP.
a Nevada corporation
dba Golden Nugget-Laughlin
MIRAGE HAWAII MARKETING CORP.
a Nevada corporation
MIRAGE INDONESIA MARKETING CORP., LTD.
a Nevada corporation
TREASURE ISLAND CORP.**
a Nevada corporation
dba Treasure Island at The Mirage
SHADOW CREEK
a Nevada corporation
SNAK, CORP.
a Nevada corporation
GOLDEN NUGGET MARKETING CORP.
a Mississippi corporation
GOLDEN NUGGET MARKETING CORP.
a Georgia corporation
MIRAGE NORTHWEST, INC.
a Nevada corporation
GNLV MARKETING CORP. -- CANADA
a Nevada corporation
M.I.R. TRAVEL
a Nevada corporation
THE MIRAGE-GOLDEN NUGGET SINGAPORE, LTD.
a Nevada corporation
GOLDEN NUGGET MARKETING CORP.
a California corporation
GOLDEN NUGGET MARKETING CORP.
a Louisiana corporation
GN MARKETING CORP.
a New York corporation
GOLDEN NUGGET MARKETING CORP.
a Pennsylvania corporation
GOLDEN NUGGET MARKETING CORP.
a Texas corporation
GOLDEN NUGGET MARKETING CORP. -- ILLINOIS
a Nevada corporation
TYOH ADVERTISING, INC.
a Nevada corporation
MH, INC.**
a Nevada corporation
dba Shadow Creek
SEE SAW SIGN CORP. ***
a Nevada corporation
MIRAGE SPORTS
a Nevada corporation
THE MIRAGE-GOLDEN NUGGET TAIWAN, LTD.
a Nevada corporation
GOLDEN NUGGET FINANCE CORP.
a Nevada corporation
MIRAGE MIDWEST, INC.
a Nevada corporation
TREASURE ISLAND FINANCE CORP.****
a Nevada corporation
MIRAGE RIVERBOATS OF ILLINOIS, INC.
an Illinois corporation
MCH HOLDING CORP. **
a Nevada corporation
GNLV HOLDING CORP.*
a Nevada corporation
BEAU RIVAGE
a Nevada corporation
dba The Mirage Golf Club
MIRAGE LAUNDRY SERVICES CORP.
a Nevada corporation
MIRAGE CONNECTICUT, INC.
a Connecticut corporation
MIRAGE ARGENTINA, INC.
a Nevada corporation
TREASURE ISLAND PRODUCTIONS, INC.*****
a Nevada corporation
GOLDEN NUGGET EXPERIENCE CORP.*
a Nevada corporation
EGARIM, INC.
an Alabama corporation
MIRAGE RIVERBOATS OF INDIANA, INC.
an Indiana corporation
MIRAGE BUENOS AIRES, INC.
a Nevada corporation
GOLDEN NUGGET LAWRENCEBURG, INC.
an Indiana corporation
THREE RIVERS PLANNING CORP.
a Pennsylvania corporation
SHCR CORP.
a Texas corporation
1086868 ONTARIO LIMITED
an Ontario corporation
MRGS CORP.******
a Nevada corporation
MIRAGE BRIDGEPORT, INC.
a Connecticut corporation
MIRAGE FLORIDA, INC.
a Florida corporation
------------------------------
* 100% of the voting securities are owned by GNLV, CORP.
** 100% of the voting securities are owned by THE MIRAGE CASINO-HOTEL.
*** 100% of the voting securities are owned by TYOH ADVERTISING, INC.
**** 100% of the voting securities are owned by GNS FINANCE CORP.
***** 100% of the voting securities are owned by Treasure Island Corp.
****** 100% of the voting securities are owned by Beau Rivage.
<PAGE>
EXHIBIT 23(A)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report dated February 8, 1995, except for Note 5, as to which the date is
March 13, 1995, included in this Form 10-K, into Mirage Resorts, Incorporated
and subsidiaries' previously filed registration statements on Form S-3 (File No.
2-87138), on Form S-3 (File No. 2-92051), on Form S-3 (File No. 2-96534), on
Form S-3 (File No. 33-5693), on Form S-8 (File No. 33-16037), on Form S-3 (File
No. 33-16572), on Form S-8 (File No. 33-48394), on Form S-8 (File No. 33-63804)
and on Form S-3 (File No. 33-50559).
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
March 30, 1995
<PAGE>
EXHIBIT 23(B)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statements
of Mirage Resorts, Incorporated on Form S-3 (File No. 2-87138), on Form S-3
(File No. 2-92051), on Form S-3 (File No. 2-96534), on Form S-3 (File No.
33-5693), on Form S-8 (File No. 33-16037), on Form S-3 (File No. 33-16572), on
Form S-8 (File No. 33-48394), on Form S-8 (File No. 33-63804) and on Form S-3
(File No. 33-50559) of our report dated February 11, 1994 on our audits of the
consolidated financial statements and financial statement schedule of Mirage
Resorts, Incorporated as of December 31, 1993, and for the years ended December
31, 1993 and 1992, which report is included in this Form 10-K.
COOPERS & LYBRAND L.L.P.
Los Angeles, California
March 29, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S CONSOLIDATED BALANCE SHEET, STATEMENT OF INCOME AND NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1994
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND
NOTES TO FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 47,142
<SECURITIES> 0
<RECEIVABLES> 98,129
<ALLOWANCES> 37,937
<INVENTORY> 26,374
<CURRENT-ASSETS> 179,515
<PP&E> 1,779,957
<DEPRECIATION> 404,965
<TOTAL-ASSETS> 1,641,439
<CURRENT-LIABILITIES> 152,091
<BONDS> 359,584
<COMMON> 940
0
0
<OTHER-SE> 1,029,982
<TOTAL-LIABILITY-AND-EQUITY> 1,641,439
<SALES> 211,755
<TOTAL-REVENUES> 1,254,177
<CGS> 179,698
<TOTAL-COSTS> 710,454
<OTHER-EXPENSES> 93,441
<LOSS-PROVISION> 20,520
<INTEREST-EXPENSE> 44,215
<INCOME-PRETAX> 196,004
<INCOME-TAX> 71,265
<INCOME-CONTINUING> 124,739
<DISCONTINUED> 0
<EXTRAORDINARY> (10,415)
<CHANGES> 0
<NET-INCOME> 114,324
<EPS-PRIMARY> 1.21
<EPS-DILUTED> 0
</TABLE>
