SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 1, 1999
MIRAGE RESORTS, INCORPORATED
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(Exact name of Registrant as specified in its charter)
Nevada 01-6697 88-0058016
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(State or other juris- (Commission (IRS Employer
diction of incorporation) File No.) Identification No.)
3600 Las Vegas Boulevard South, Las Vegas, Nevada 89109
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(702)693-7111
N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events.
The Registrant is filing this Current Report on
Form 8-K solely for the purpose of filing the
Exhibit listed in Item 7(c) below.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99. Press Release of the Registrant dated July 1, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
MIRAGE RESORTS, INCORPORATED
(Registrant)
Date: July 1, 1999 By: BRUCE A. LEVIN
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Bruce A. Levin
Vice President and General Counsel
2
PRESS RELEASE
Contact: Mirage Resorts, Incorporated
Alan Feldman
702-693-7147
MIRAGE RESORTS INDICATES SECOND-QUARTER EARNINGS LIKELY TO BE IN THE RANGE
OF $0.07 to $0.10 PER SHARE
Las Vegas, Nevada, July 1, 1999 - Mirage Resorts, Incorporated (NYSE:MIR)
today announced that it expects to report second quarter earnings of
approximately $0.07 to $0.10 per share. The Company reported earnings of
$0.18 per share in the second quarter of 1998.
Total revenues are expected to have risen approximately 82% in the quarter,
reflecting the openings of the Bellagio resort on October 15, 1998 and Beau
Rivage on March 16, 1999. Each resort is now believed to be the highest-
grossing hotel-casino in its respective market.
The Company noted several factors pertinent to the earnings, including an
unusually low Company-wide table games win percentage; the opening of Beau
Rivage in Biloxi, Mississippi; a major room refurbishment project at its
Treasure Island resort; and the opening of two new competitors in the Las
Vegas market.
"It has been our practice to open our hotels with extra payroll and other
expenses to ensure a favorable guest experience in the new property,"
stated Stephen A. Wynn, Chairman of the Board and CEO of the Company.
"This is part of the reason why, in the past, our new hotels have generally
had higher profits in their second years than in their first years. This
focus on establishing the long-term positioning of our hotels was clearly a
factor in the recent quarter."
The Company-wide occupancy rate for standard rooms was 97% in the quarter,
versus 99%, and the Company-wide average rate for standard rooms rose
approximately 15%. The increase in average rate and slight decrease in
occupancy was principally attributable to the new properties.
Operating cash flow (EBDIT) in the second quarter is expected to be
approximately $113 million, an increase of approximately 51% over the prior-
year period. With Bellagio and Beau Rivage now complete, the Company is
capitalizing very little of its interest cost. Additionally, the Company's
depreciation charge is expected to be approximately $53 million in the
quarter, versus $22.5 million in the prior-year period. Because of the low
win percentage, opening of the Biloxi property and competitive market
conditions in Las Vegas, the increase in operating cash flow was less than
the increase in fixed charges.
Because of the new resorts, depreciation and interest expense are more
meaningful components of the Company's income statement. As a result,
fluctuations in win percentages and other factors affecting operating cash
flow had a larger percentage impact on the Company's earnings than in the
year-ago period. The higher interest expense will be mitigated in part by
the Company's issuance of 16.6 million shares of stock on May 11, 1999, the
proceeds from which (approximately $416 million) were used to repay debt.
EXHIBIT 99
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earnings/...2
Management estimates that as of June 30, 1999 the book value of the
Company's equity and the Company's indebtedness each were approximately
$2.1 billion.
TABLE GAMES WIN PERCENTAGE
The Company-wide table games win percentage of approximately 16.7% was
sharply below the Company's historical average, and compares with the
similarly lower-than-normal win percentage of 16.8% in the prior-year
period. Based on historical results of the past three calendar years and
the mix of table games business at the Company's new properties, management
estimates that the Company's expected table games win percentage should
have been approximately 20%. The Company's table games drop (which
approximates the amount of money exchanged by customers for gaming chips)
rose approximately 70% to approximately $750 million. The Company
estimates that the differential in win percentage from the expected norm
affected second-quarter earnings by approximately $0.06 per share.
BEAU RIVAGE OPENING
This was the first full quarter of operations for the Company's Beau Rivage
resort in Biloxi, Mississippi. As is common for many resort hotels,
guestroom occupancy started low and has increased gradually. Occupancy of
Beau Rivage's standard guestrooms was 76%, 81% and 94% in April, May and
June, respectively. The earnings contribution from Beau Rivage has also
been constrained by additional payroll, advertising and other costs related
to the Company's efforts to establish this property's long-term position as
the market's leading resort.
As part of its effort to increase tourism to the Mississippi Gulf Coast,
the Company entered into an agreement in the first quarter with AirTran
Airways to provide additional air service to the region. Like Beau
Rivage's hotel occupancy, the popularity of the AirTran service has
increased each month. The overall load factors on the new flights averaged
38%, 52% and 53% in April, May and June, respectively.
LAS VEGAS
In Las Vegas, the Company is refurbishing all of the guestrooms at its
Treasure Island resort. This $60 million program, which began in February
and is scheduled to be completed in October, resulted in approximately 9%
fewer available room-nights at this property than in last year's second
quarter. When completed, Treasure Island will have 33 additional suites
(replacing 65 standard guestrooms) and the furnishings of its 2,614
standard guestrooms will be considerably higher in quality than they were
previously.
In addition to the effect of the low table games win percentage and the
Treasure Island refurbishment program, the Company's Las Vegas facilities
have been impacted by a more competitive market environment. A major
competing resort opened on March 2 on the Las Vegas Strip and another major
resort has been opening in stages directly across the Strip from The Mirage
and Treasure Island.
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earnings/...3
OTHER FACTORS
The quarter also was affected by a recently issued accounting statement
that requires preopening costs to be expensed as incurred, rather than
capitalized and expensed after the opening of the new property. The
Company expects to have incurred approximately $4 million, or $0.01 per
share after tax, of preopening costs in the second quarter relating
principally to the planning and design of its major new resort complex in
Atlantic City, New Jersey.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WHICH ARE SUBJECT TO
CHANGE. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE DESCRIBED IN ANY
FORWARD-LOOKING STATEMENT. ADDITIONAL INFORMATION CONCERNING POTENTIAL
FACTORS THAT COULD AFFECT THE COMPANY'S FUTURE RESULTS IS INCLUDED IN THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998.
THIS STATEMENT IS PROVIDED AS PERMITTED BY THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995.
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