<PAGE>
UNITED STATES
SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
-------------------------------------------------
[_] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition period from - -
------------------- to -----------------------
Commission File Number: 0-16760
--------------------------------------------------------
MGM GRAND, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 88-0215232
- ----------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3799 Las Vegas Boulevard South, Las Vegas, Nevada 89109
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(702) 891-3333
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at November 3, 1997
- ------------------------------ --------------------------------
Common Stock, $.01 par value 57,980,645 shares
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
FORM 10-Q
I N D E X
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of
Operations for the Three Months and Nine Months Ended
September 30, 1997 and September 30, 1996............ 1
Condensed Consolidated Balance Sheets
at September 30, 1997 and December 31, 1996.......... 2
Condensed Consolidated Statements of
Cash Flows for the Nine Months Ended
September 30, 1997 and September 30, 1996............ 3
Notes to Condensed Consolidated Financial
Statements........................................... 4-9
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations..... 10-15
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on 8K........................... 16
Signatures........................................... 17
</TABLE>
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ---------------------
1997 1996 1997 1996
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Revenues:
Casino $115,192 $117,672 $335,396 $352,109
Room 40,999 43,463 127,420 130,888
Food and beverage 23,915 19,264 69,342 58,799
Entertainment, retail and other 30,492 31,619 86,723 93,730
Income from unconsolidated affiliate 12,923 - 42,351 -
-------- -------- -------- --------
223,521 212,018 661,232 635,526
Less: promotional allowances 15,122 14,630 46,250 40,905
-------- -------- -------- --------
208,399 197,388 614,982 594,621
-------- -------- -------- --------
Expenses:
Casino 52,948 55,005 164,480 161,151
Room 11,942 11,797 34,770 35,571
Food and beverage 14,695 11,593 40,949 35,832
Entertainment, retail and other 20,379 21,485 59,981 63,965
Provision for doubtful
accounts and discounts 8,405 9,035 22,735 29,202
General and administrative 27,377 26,667 77,616 75,740
Depreciation and amortization 16,234 15,544 47,626 46,186
-------- -------- -------- --------
151,980 151,126 448,157 447,647
Operating Profit Before Master Plan
Asset Disposition and Corporate Expense 56,419 46,262 166,825 146,974
Master Plan asset disposition 28,566 49,401 28,566 49,401
Corporate (income) expense (3,466) 1,669 1,312 4,543
-------- -------- -------- --------
Operating Income (Loss) 31,319 (4,808) 136,947 93,030
-------- -------- -------- --------
Other Income (Expense):
Interest income 381 451 961 3,873
Interest expense, net - (2,269) (1,242) (34,008)
Interest expense from
unconsolidated affiliate (2,511) - (7,519) -
Other, net (205) (178) (649) (840)
-------- -------- -------- --------
(2,335) (1,996) (8,449) (30,975)
-------- -------- -------- --------
Income (Loss) Before Income Taxes and
Extraordinary Item 28,984 (6,804) 128,498 62,055
(Provision) benefit for income taxes (10,290) 2,127 (46,655) (11,569)
-------- -------- -------- --------
Net Income (Loss) Before Extraordinary Item 18,694 (4,677) 81,843 50,486
Loss on early extinguishment of debt, net
of income tax benefits of $2,333
and $17,710 (4,238) (30,811) (4,238) (30,811)
-------- -------- -------- ---------
Net Income (Loss) $ 14,456 $(35,488) $ 77,605 $ 19,675
======== ======== ======== ========
Per Share of Common Stock:
Net income (loss) before
extraordinary item $.32 $(.08) $1.39 $.96
Extraordinary item, net (.07) (.53) (.07) (.59)
-------- -------- -------- --------
Net income (loss) $.25 $(.61) $1.32 $.37
======== ======== ======== ========
Weighted Average Shares
Outstanding (000's) 58,812 58,461 58,778 52,637
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements
-1-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
1997 1996
------------- ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 58,993 $ 61,412
Accounts receivable, net 44,838 80,529
Prepaid expenses 10,686 13,208
Inventories 15,910 13,520
Deferred tax asset 40,046 58,039
---------- ----------
Total Current Assets 170,473 226,708
---------- ----------
Property and Equipment, Net 938,809 884,750
Other Assets:
Investments in unconsolidated affiliates 101,750 72,896
Deposits 357 15,255
Excess of purchase price over fair
market value of net assets
acquired, net 38,854 39,622
Other assets, net 47,805 48,458
---------- ----------
Total Other Assets 188,766 176,231
---------- ----------
$1,298,048 $1,287,689
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 18,181 $ 32,995
Income taxes payable 7,531 23,653
Current obligation, capital leases 5,182 2,769
Current obligation, long term debt 11,767 12,906
Other accrued liabilities 84,402 118,448
---------- ----------
Total Current Liabilities 127,063 190,771
---------- ----------
Deferred Revenues 5,735 6,712
Deferred Income Taxes 42,857 38,477
Long Term Obligation, Capital Leases 6,073 7,862
Long Term Debt 55,439 70,485
Commitments and Contingencies
Stockholders' Equity:
Common stock ($.01 par value,
75,000,000 shares authorized,
57,973,602 and 57,883,766 shares issued) 580 579
Capital in excess of par value 966,182 963,688
Retained earnings 90,826 13,221
Currency translation adjustment 3,293 (4,106)
---------- ----------
Total Stockholders' Equity 1,060,881 973,382
---------- ----------
$1,298,048 $1,287,689
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements
-2-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
---------------------
1997 1996
--------- ---------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 77,605 $ 19,675
Adjustments to reconcile net income to
net cash from operating activities:
Master Plan asset disposition 28,566 49,401
Loss on early extinguishment of debt 6,571 48,521
Depreciation and amortization 47,731 46,278
Amortization of debt offering costs 960 1,761
Provision for doubtful accounts and discounts 22,735 29,202
Income from unconsolidated affiliate, net (34,832) -
Change in assets and liabilities:
Accounts receivable 12,956 2,799
Inventories (3,210) (221)
Prepaid expenses 2,522 212
Income taxes payable and deferred
income taxes 6,251 (19,762)
Accounts payable, accrued
liabilities and other (53,145) (9,426)
Currency translation adjustment 407 199
--------- ---------
Net cash from operating activities 115,117 168,639
--------- ---------
Cash Flows from Investing Activities:
Purchases of property and equipment (118,998) (63,054)
Disposition of property and equipment, net 130 278
Investments in unconsolidated affiliates (7,183) -
Distributions from unconsolidated affiliate 12,620 -
Deposits and other assets, net 2,593 (20,370)
--------- ---------
Net cash from investing activities (110,838) (83,146)
--------- ---------
Cash Flows from Financing Activities:
Defeasance of First Mortgage Notes - (523,231)
Repayments on long term debt (32,192) (21,000)
Borrowings from long term debt 23,000 61,000
Repayments on bank line of credit - (2,294)
Borrowings from bank line of credit - 4,262
Issuance of common stock 2,494 348,770
--------- ---------
Net cash from financing activities (6,698) (132,493)
--------- ---------
Net Decrease in Cash and Cash Equivalents (2,419) (47,000)
Cash and Cash Equivalents at Beginning
of Period 61,412 110,017
--------- ---------
Cash and Cash Equivalents at End of Period $ 58,993 $ 63,017
</TABLE> ========= =========
The accompanying notes are an integral part of these condensed consolidated
financial statements
-3-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION
MGM Grand, Inc. (the "Company") is a Delaware corporation,
incorporated on January 29, 1986. As of September 30, 1997, approximately 62.5%
of the outstanding shares of the Company's common stock were owned by Kirk
Kerkorian and Tracinda Corporation ("Tracinda"), a Nevada corporation wholly-
owned by Kirk Kerkorian.
Through its wholly-owned subsidiary, MGM Grand Hotel, Inc., the
Company owns and operates the MGM Grand Hotel/Casino ("MGM Grand Las Vegas"), a
hotel/casino and entertainment complex in Las Vegas, Nevada. MGM Grand Hotel
Finance Corp. ("MGM Finance"), a wholly-owned subsidiary of the Company, was
formed to issue First Mortgage Notes to the public, to incur bank debt and to
lend the aggregate proceeds thereof to MGM Grand Hotel, Inc. to finance the
construction and opening of MGM Grand Las Vegas. See Note 3 regarding
defeasance of MGM Finance First Mortgage Notes.
Through its wholly-owned subsidiary, MGM Grand Australia Pty Ltd., the
Company owns and operates the MGM Grand Hotel/Casino ("MGM Grand Australia"), a
hotel/casino resort in Darwin, Australia. MGM Grand Australia was acquired and
commenced operations on September 7, 1995.
The Company and Primadonna Resorts, Inc. ("Primadonna") each owns 50%
of New York-New York Hotel and Casino, LLC ("NYNY LLC"), which completed
development of the $460.0 million themed destination resort called New York-New
York Hotel and Casino ("NYNY") in Las Vegas, Nevada in December 1996. NYNY
commenced operations on January 3, 1997. NYNY is located on approximately 20
acres at the northwest corner of Tropicana Avenue and Las Vegas Boulevard,
across from MGM Grand Las Vegas.
Through its wholly-owned subsidiary, MGM Grand South Africa, Inc., the
Company manages a casino in Nelspruit, which began operations on October 15,
1997, in the Mpumalanga Province of the Republic of South Africa. The Company
will receive development and management fees from its joint venture partner,
Tsogo Sun Gaming & Entertainment. Tsogo Sun will provide all project costs.
Through its wholly-owned subsidiary, MGM Grand Atlantic City, Inc.,
the Company intends to construct and operate a destination resort hotel/casino,
entertainment and retail facility in Atlantic City, New Jersey, at a minimum
approximate cost of $700.0 million, on approximately 35 acres of land on the
Atlantic City Boardwalk. Construction of the project is subject to the receipt
of various governmental approvals. On July 24, 1996, the Company was found
suitable for licensing by the New Jersey Casino Control Commission.
Certain information and footnote disclosures normally included in the
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included or incorporated by reference in
the Company's 1996 Annual Report on Form 10-K.
In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial position
as of September 30, 1997, and the results of operations for the three month and
nine month periods ended September 30, 1997 and 1996. The results of operations
for such periods are not necessarily indicative of the results to be expected
for the full year.
Certain reclassifications have been made to prior period financial
statements to conform with the 1997 presentation.
-4-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
NOTE 2. STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1997 and 1996, cash payments
made for interest were $6.2 million and $44.9 million, respectively.
Cash payments made for state and federal taxes for the nine months
ended September 30, 1997 and 1996 were $36.1 million and $3.0 million,
respectively.
NOTE 3. LONG TERM DEBT AND NOTES PAYABLE
Long term debt consisted of the following (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
-------------- -------------
<S> <C> <C>
Australian Hotel/Casino Loan $ 67,206 $ 83,391
Less: Current Maturities (11,767) (12,906)
-------- --------
$ 55,439 $ 70,485
======== ========
</TABLE>
Total interest incurred for the first nine months of 1997 and 1996 was
$7.1 million and $37.9 million, respectively, of which $5.9 million and $3.9
million was capitalized in the 1997 and 1996 periods, respectively. During the
first nine months of 1997, the Company recognized interest expense from its
unconsolidated affiliate of $7.5 million.
On July 3, 1996, the Company deposited $523.2 million (the "Defeasance
Deposit") with the Trustee, U.S. Trust of California, to fund the defeasance of
MGM Finance First Mortgage Notes ("FMN") in accordance with the terms of the
bond indenture. The Defeasance Deposit was made in the form of U.S. Government
securities and was used to fund interest payments on the FMN through May 1,
1997, at which date the 11-3/4% and 12% FMN were called at 101.958% and 105.333%
of their outstanding principal, respectively. On October 29, 1996, the liens on
the assets of MGM Grand Hotel, Inc. were released and accordingly, the
defeasance was finalized. The early extinguishment of the FMN resulted in an
extraordinary loss of approximately $30.8 million, net of tax benefits.
On July 1, 1996, the Company secured a $500.0 million Senior Reducing
Revolving Credit Facility with BA Securities (the "Facility"), an affiliate of
Bank of America NT&SA. In August 1996, the Facility was increased to $600.0
million. In July 1997, the Facility was amended, extended and increased to
$1.25 billion (the "New Facility"), with provisions to allow an increase of the
New Facility to $1.5 billion as well as to allow additional pari passu debt
financing up to $500.0 million. As a result of the New Facility, the Company
recognized an extraordinary loss of approximately $4.2 million, net of tax
benefits, of unamortized debt costs from the Facility during the third quarter
of 1997. The New Facility contains various restrictive covenants on the Company
which include the maintenance of certain financial ratios and limitations on
additional debt, dividends, capital expenditures and disposition of assets. The
New Facility also restricts certain acquisitions and similar transactions.
Interest on the New Facility is based on the bank reference rate or Eurodollar
rate. The New Facility matures in December 2002, with the opportunity to extend
the maturity for successive one year periods. During the nine months ended
September 30, 1997, $15.0 million was drawn down and repaid against the
Facility, and $8.0 million was drawn down and repaid against the New Facility
and no amounts remained outstanding as of September 30, 1997.
The Company previously filed a Shelf Registration Statement with the
Securities and Exchange Commission which became effective on August 4, 1997.
The Shelf Registration Statement allows the Company to issue up to $600.0
million of debt and equity securities on terms and conditions to be determined
at the time of sale. Such securities will be offered only by means of a
prospectus which will set forth in detail the terms of the securities to be
sold.
-5-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
NOTE 3. LONG TERM DEBT AND NOTES PAYABLE (CONT.)
The Australian bank facility originally provided a total availability
of approximately $76.0 million (AUD $105.0 million), which was reduced by
principal payments totaling $9.2 million (AUD $12.2 million) made in accordance
with the terms of the bank facility, and as of September 30, 1997, $67.2 million
(AUD $92.8 million) remained outstanding. The bank facility includes funding for
general corporate purposes. Interest on the bank facility is based on the
Australian Bank Bill rate. The bank facility loan agreement contains various
restrictive covenants on MGM Grand Australia, including limitations on
additional debt, dividends, and disposition of assets. The bank facility loan
agreement also restricts certain acquisitions and similar transactions. The
indebtedness, which matures in December 2000, has been wholly guaranteed by the
Company.
MGM Grand Australia has a $14.5 million (AUD $20.0 million)
uncommitted standby line of credit, with a funding period of 91 days for working
capital purposes. No amount was outstanding during the nine months ended
September 30, 1997, and $4.3 million (AUD $5.4 million) was borrowed with $2.3
million (AUD $2.9 million) repaid during the nine months ended September 30,
1996 and $2.0 million (AUD $2.5 million) remained outstanding under the line of
credit at September 30, 1996.
Upon commencement of operations of NYNY on January 3, 1997 (see Note
1), the $285.0 million non-revolving construction line of credit converted to a
five-year reducing revolver. The Company and Primadonna (the "Partners") have
executed a joint and several unlimited Keep-Well Agreement, which provides that
in the event of insufficient cash flow from NYNY to comply with financial
covenants, the Partners will make cash infusions which are sufficient to bring
NYNY LLC into compliance with the financial covenants. During the first nine
months of 1997, $26.0 million in voluntary principal repayments were made by
NYNY LLC. As of September 30, 1997 and December 31, 1996, a total of $259.0
million and $285.0 million was outstanding, respectively. On January 21, 1997,
NYNY LLC completed an additional $20.0 million equipment financing with a
financial institution. As of September 30, 1997, $18.2 million remained
outstanding related to the equipment financing.
NOTE 4. ISSUANCE OF COMMON STOCK
On May 7, 1996, the Company made a commitment to grant 15 shares of
Company Common Stock to each of its employees in exchange for continued active
employment through the one year anniversary date of the commitment. As a result
of the stock grant commitment, deferred compensation was charged to
stockholders' equity and amortized monthly to compensation expense over the one
year commitment period. On May 7, 1997, 99,045 shares were issued to employees
as a result of the commitment. Over the life of the commitment, approximately
$4.0 million was amortized to expense, of which $1.1 million and $1.9 million of
such expense were recognized during the nine months ended September 30, 1997 and
1996, respectively.
On May 24, 1995, as amended on November 27, 1995, the Company and MGM
Grand Hotel, Inc. entered into a Promotion Agreement with Don King Productions,
Inc. ("DKP"), pursuant to which, among other things, MGM Grand Las Vegas had the
exclusive right to present six of Mike Tyson's fights. In addition, MGM Grand
Hotel, Inc. made a non-interest bearing working capital advance of $15.0 million
to DKP which called for repayment on January 25, 1998, and the Company sold DKP
618,557 treasury shares of the Company's Common Stock (the "Shares") for $15.0
million in exchange for a non-interest bearing promissory note. Through
September 30, 1997, five fights occurred pursuant to the agreement, and the
stock promissory note was repaid. The original agreement was amended by a Trust
Agreement dated October 23, 1996, in which the Shares were placed in the name
of, and held by, an independent trustee, pending disposition at the direction of
the Company. The Trust Agreement extended the payment date of the working
capital advance and the guaranteed share price of $48.50 to March 31, 1998. As a
result of the revocation of Mike Tyson's Nevada boxing license, the Company and
DKP reached an agreement whereby the Company would not present a sixth Mike
Tyson event, the Promotion
-6-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
NOTE 4. ISSUANCE OF COMMON STOCK (CONT.)
Agreement and guarantee would be terminated, and the working capital advance
would be due and payable. On September 25, 1997, after solicitation of
competitive bids, the 618,557 shares held by the Trustee were sold to Tracinda
at the price of $44.50 per share for an aggregate consideration of $27.5
million, the Company was then repaid the $15.0 million working capital advance,
the price guarantee to DKP was terminated, and the remaining consideration in
the amount of $12.5 million was paid to DKP. As a result of this transaction,
the Company reversed approximately $5.9 million of previously expensed stock
price guarantee amortization during the 1997 third quarter.
On July 2, 1996, the Company completed a public offering (the
"Offering") of 8.6 million shares of common stock (including underwriter's over
allotment option to purchase 1.1 million shares of common stock). Based upon the
Offering price of $39.50 per share and associated costs incurred, the net
proceeds received by the Company were approximately $327.0 million. The net
proceeds from the Offering were used to fund the defeasance of the MGM Finance
FMN (see Note 3).
NOTE 5. EARNINGS PER SHARE
The Company calculates earnings per share ("EPS") in accordance with
Accounting Principles Board Opinion 15, "Earnings per Share" ("APB 15").
Earnings per share is based on the weighted average number of shares of common
stock and common stock equivalents, if dilutive, outstanding during each period.
Such amounts were approximately 58.8 million and 58.5 million shares for the
three month periods ended September 30, 1997 and 1996, respectively, and 58.8
million and 52.6 million shares for the nine month periods ended September 30,
1997 and 1996, respectively.
In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS
128"), which upon adoption will supersede APB 15 and is intended to simplify and
harmonize the EPS calculations in the United States with those common in other
countries and to present two EPS calculations: (i) basic earnings per common
share which is computed by dividing net income by the weighted average number of
shares of common stock outstanding during the periods presented, and (ii)
diluted earnings per common share which is determined on the assumptions that
options issued to employees are exercised and repurchased at the average price
for the periods presented. SFAS 128 is effective for financial statements for
the year ended December 31, 1997, and although early application is prohibited,
the following reflects the expected effect of SFAS 128 for the periods presented
(in thousands except per share amounts):
-7-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 5. EARNINGS PER SHARE (CONT.)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
1997 1996 1997 1996
------- -------- ------- -------
<S> <C> <C> <C> <C>
Net Income $14,456 $(35,488) $77,605 $19,675
======= ======== ======= =======
Weighted Average Basic Shares 57,973 56,960 57,912 51,286
======= ======== ======= =======
Basic Earnings per Share $ .25 $ (.62) $ 1.34 $ .38
======= ======== ======= =======
Weighted Average Diluted Shares 58,812 58,490 58,799 52,648
======= ======== ======= =======
Diluted Earnings per Share $ .25 $ (.62) $ 1.32 $ .37
======= ======== ======= =======
</TABLE>
Weighted average diluted shares include the following: options to
purchase approximately 839,000 and 1,039,000 shares issued to employees for the
three month periods ended September 30, 1997 and 1996, respectively, and
approximately 848,000 and 979,000 for the nine month periods ended September 30,
1997 and 1996, respectively; employee grant shares (see Note 4) of approximately
29,000 for the three month period ended September 30, 1996, and approximately
39,000 and 11,000 for the nine month periods ended September 30, 1997 and 1996,
respectively; and DKP shares (see Note 4) of approximately 462,000 for the three
months ended September 30, 1996, and 372,000 for the nine months ended September
30, 1996.
NOTE 6. INVESTMENT IN UNCONSOLIDATED AFFILIATE
On December 28, 1994, the Company and Primadonna formed a joint
venture to construct, own and operate the New York-New York Hotel and Casino
(see Note 1). The hotel/casino opened to the public on January 3, 1997. The
Company holds a 50% interest in the joint venture. As of September 30, 1997, the
Company has contributed land on which the property is located and cash totaling
$70.7 million which includes $7.0 million in capital contributions made in the
1997 period. During the nine months ended September 30, 1997, the Company
received distributions of $12.6 million from the joint venture to pay taxes on
its allocated share of income. The joint venture secured bank financing of
$285.0 million and term loan financing of $20.0 million (see Note 3), and the
joint venture Partners executed Keep-Well Agreements in conjunction with the
financing.
-8-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6. INVESTMENT IN UNCONSOLIDATED AFFILIATE (CONT.)
Summary condensed financial information for the joint venture is as follows
(in thousands):
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
September 30, September 30,
1997 1997
------------- -------------
<S> <C> <C>
Net Revenues $ 61,709 $196,978
======== ========
Operating Income $ 25,998 $ 84,833
======== ========
Interest Expense, net $ 5,023 $ 15,039
======== ========
Net Income $ 20,976 $ 69,794
======== ========
</TABLE>
<TABLE>
<CAPTION>
As of As of
September 30, December 31,
1997 1996
------------- ------------
<S> <C> <C>
Total Assets $472,016 $457,091
======== ========
Long-term Debt $236,193 $285,829
======== ========
Members' Equity $170,217 $111,664
======== ========
</TABLE>
NOTE 7. MASTER PLAN ASSET DISPOSITION
During September 1996, the Company determined to write off various
assets with a net book value of $49.4 million (pre-tax) as a result of the MGM
Grand Las Vegas property construction enhancements associated with the
transformation of the facility into "The City of Entertainment." The affected
areas included certain assets related to the theme park which totaled
approximately $39.6 million to make way for a 380,000 square foot conference
center and 6.6 acre Shangri-La pool and spa complex; approximately $8.6 million
related to the removal of the lion entrance and Emerald City to be replaced with
a new mezzanine entry, a Rainforest Cafe, and a remodeled entertainment casino
among other attractions; and approximately $1.2 million representing certain
food court and midway/arcade areas which have been transformed into the Studio
Walk, a replica of a sound stage featuring Hollywood landmarks. During the 1997
third quarter, the Company wrote off assets with a net book value of $28.6
million (pre-tax) which included the original swimming pool facility, to be
replaced by the Mansion at the MGM Grand consisting of 30 exclusive suites and
villas, and certain theme park assets to make way for a 500 room Ritz-Carlton
Hotel.
-9-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company, through its wholly-owned subsidiaries, owns and operates
MGM Grand Las Vegas and MGM Grand Australia (see Note 1). The Company also owns
50% of New York-New York Hotel and Casino, which commenced operations on January
3, 1997 (see Note 1).
<TABLE>
<CAPTION>
(in thousands)
--------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
1997 1996 1997 1996
----------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Net Revenues:
MGM Grand Las Vegas $185,754 $188,164 $546,972 $568,296
MGM Grand Australia 9,814 9,419 26,336 26,791
Income from unconsolidated affiliate 12,923 - 42,351 -
Eliminations and other (92) (195) (677) (466)
-------- -------- -------- --------
$208,399 $197,388 $614,982 $594,621
======== ======== ======== ========
Operating Profit (Loss):
MGM Grand Las Vegas $ 41,595 $ 44,978 $121,915 $148,861
MGM Grand Australia 1,901 1,284 2,559 (1,887)
Income from unconsolidated affiliate 12,923 - 42,351 -
-------- -------- -------- --------
56,419 46,262 166,825 146,974
Master Plan asset disposition 28,566 49,401 28,566 49,401
Corporate (income) expense (3,466) 1,669 1,312 4,543
-------- -------- -------- --------
Operating Income (Loss) 31,319 (4,808) 136,947 93,030
Interest income 381 451 961 3,873
Interest expense, net of amounts
capitalized - (2,269) (1,242) (34,008)
Interest expense from unconsolidated
affiliate (2,511) - (7,519) -
Other, net (205) (178) (649) (840)
-------- -------- -------- --------
Income (Loss) Before Provision for
Income Taxes and Extraordinary Item 28,984 (6,804) 128,498 62,055
(Provision) Benefit for Income Taxes (10,290) 2,127 (46,655) (11,569)
-------- -------- -------- --------
Net Income (Loss) Before Extraordinary
Item 18,694 (4,677) 81,843 50,486
Extraordinary item, net (4,238) (30,811) (4,238) (30,811)
-------- -------- -------- --------
Net Income (Loss) $ 14,456 $(35,488) $ 77,605 $ 19,675
======== ======== ======== ========
</TABLE>
-10-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
QUARTER VERSUS QUARTER
Net revenues for the third quarter of 1997 were $208.4 million,
representing an increase of $11.0 million (5.6%) when compared with $197.4
million during the same period last year. The increase in net revenues was
largely due to income from the Company's 50% ownership in NYNY (see Note 1) and
higher food and beverage revenues in the 1997 period.
Consolidated casino revenues for the third quarter of 1997 were $115.2
million, representing a decrease of $2.5 million (2.1%) when compared with
$117.7 million during the same period in the prior year. MGM GRAND LAS VEGAS
casino revenues were $107.6 million, representing a decrease of $2.9 million
(2.6%) when compared with $110.5 million during the same period in the prior
year. The decrease in casino revenues at MGM Grand Las Vegas was a result of
lower volume and win during the 1997 period when compared with the 1996 period.
Additionally, a heavyweight championship boxing event was held in the prior
year's quarter which improved the casino volume and win. MGM GRAND AUSTRALIA
reported casino revenues of $7.6 million in the third quarter of 1997, which
were 5.6% higher than the $7.2 million reported in the third quarter of 1996.
Consolidated room revenues were $41.0 million for the third quarter of
1997 compared with $43.5 million in the prior year's third quarter, representing
a decrease of $2.5 million (5.7%). MGM GRAND LAS VEGAS room revenues were $40.3
million representing a decrease of $2.5 million (5.8%) when compared with $42.8
million in the same period of the prior year. The decrease was primarily due to
a lower average daily rate ("ADR") in the 1997 period of $90 compared with $96
in the prior year, which was partially offset by higher occupancy of 99.0% for
the third quarter of 1997 when compared with 97.6% in the same period of the
prior year. MGM GRAND AUSTRALIA room revenues were consistent quarter over
quarter.
Consolidated food and beverage revenues were $23.9 million in the
third quarter of 1997, representing an increase of $4.6 million (23.8%) when
compared with $19.3 million in the third quarter of the prior year. The
increase was attributable to MGM GRAND LAS VEGAS which had food and beverage
revenues of $22.2 million during the third quarter of 1997, an increase of $4.8
million (27.6%) when compared with $17.4 million in the third quarter of 1996.
This increase mainly resulted from the Company's decision to operate the Studio
Cafe coffee shop, which had been a leased facility during the 1996 period. MGM
GRAND AUSTRALIA reported food and beverage revenues of $1.7 million,
representing a decrease of $.2 million (10.5%) when compared with $1.9 million
during the same period in the prior year.
Consolidated entertainment, retail and other revenues decreased $1.1
million (3.5%) from $31.6 million in the 1996 period to $30.5 million in the
1997 period. The decrease was attributable to MGM GRAND LAS VEGAS yielding lower
theme park and midway/arcade revenues due to downsizing of the facilities. These
decreases were partially offset by increases in EFX revenues, MGM Grand Garden
Arena revenues and increased revenues from the SkyScreamer thrill ride which
opened in September 1996.
Income from unconsolidated affiliate was $12.9 million for the third
quarter of 1997, representing the Company's 50% share of NYNY's operating
income. The operating results from NYNY were not consolidated with those of the
Company since consolidation is required only with greater than 50% ownership
(see Note 1).
Consolidated operating expenses (before Master Plan asset disposition
and Corporate expense/income) were $152.0 million in the third quarter of 1997,
which were consistent when compared with $151.1 million for the same period last
year. The overall increase was attributable to MGM GRAND LAS VEGAS which had
increased
-11-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
QUARTER VERSUS QUARTER (CONTINUED)
food and beverage expenses as a result of the Company's operation of the
previously leased Studio Cafe coffee shop, and higher room expenses due to
higher occupancy. The increase was offset by lower casino and marketing expenses
in this year's quarter which did not include a heavyweight championship boxing
event as in the prior year's quarter. Additionally, the provision for doubtful
accounts and discounts decreased due to lower casino revenues, and retail and
other expenses were lower due to decreased volume when compared with the prior
quarter. MGM GRAND AUSTRALIA operating expenses were slightly lower for the 1997
quarter versus the 1996 quarter as a result of management's continuing cost
containment efforts.
Master Plan asset disposition relates to the write-off of various
assets related to the transformation of MGM Grand Las Vegas into "The City of
Entertainment." The current quarter's write-off of $28.6 million (pre-tax) is
the result of management's decision to enhance and expand the Master Plan
project from $250.0 million to over $700.0 million compared with the prior year
third quarter write-off of $49.4 million (pre-tax) which related to the original
$250.0 million Master Plan (see Note 7).
Corporate income was $3.5 million in the third quarter of 1997
compared with expense of $1.7 million in the same period of 1996. The current
quarter includes a reversal of the previously expensed amortization related to
the DKP Promotion Agreement totaling $5.9 million (pre-tax) (see Note 4).
Interest income remained flat quarter over quarter, reflecting lower
invested cash balances at MGM Grand Las Vegas.
All interest expense for the current quarter has been capitalized to
ongoing construction and development projects compared with $2.3 million of
net interest expense in the prior year's quarter. Also, the Company recognized
interest expense from its unconsolidated affiliate of $2.5 million in the
current quarter.
Income tax provision of $10.3 million has been recorded at a rate of
35.5% for the three months ended September 30, 1997, compared with a tax benefit
of $2.1 million at a rate of 31.3% in the prior year.
Extraordinary loss in the current quarter of $4.2 million, net of
income tax benefit, reflects the write-off of unamortized debt costs from the
previous $600.0 million credit facility (see Note 3). The extraordinary loss of
$30.8 million, net of income tax benefit, in the prior year's quarter represents
the loss on defeasance of the MGM Finance FMN (see Note 3).
NINE MONTHS VERSUS NINE MONTHS
Net revenues for the nine months ended September 30, 1997 were $615.0
million representing an increase of $20.4 million (3.4%) when compared with
$594.6 million during the same period last year. The increase in net revenues
was largely due to income from the Company's 50% ownership in NYNY (see Note 1)
and higher food and beverage revenues, partially offset by decreased casino,
room, entertainment, retail and other revenues.
Consolidated casino revenues for the nine months ended September 30,
1997 were $335.4 million representing a decrease of $16.7 million (4.7%) when
compared with $352.1 million during the same period in the prior year. MGM
GRAND LAS VEGAS casino revenues were $315.0 million, representing a decrease of
$15.8 million (4.8%) when compared with $330.8 million during the same period in
the prior
-12-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
NINE MONTHS VERSUS NINE MONTHS (CONTINUED)
year. The reduction in casino revenues at MGM Grand Las Vegas was a result of
lower table games win percentages, and lower slot volume and win percentage.
MGM GRAND AUSTRALIA reported casino revenues of $20.4 million which decreased
$.9 million (4.2%) when compared with $21.3 million during the same period in
the prior year, primarily attributable to lower baccarat volume and win
partially offset by an increase in slot volume and win along with Northern
Territory Keno which was not operational in the prior year's nine months.
Consolidated room revenues for the period were $127.4 million compared
with $130.9 million for the same period in 1996, representing a decrease of $3.5
million (2.7%). MGM GRAND LAS VEGAS room revenues were $125.8 million
representing a decrease of $3.5 million (2.7%) when compared with $129.3 million
in the same period of the prior year. The decrease was due to a lower occupancy
of 95.4% for the 1997 period when compared with 96.8% in the same period of the
prior year. The ADR for the 1997 period of $98 was consistent with the 1996
period. MGM GRAND AUSTRALIA room revenues were $1.8 million for the nine
months ended September 30, 1997 representing an increase of $.2 million (12.5%)
when compared with $1.6 million for the prior year period due mainly to the room
renovation in the prior year.
Consolidated food and beverage revenues for the period were $69.3
million representing an increase of $10.5 million (17.9%) when compared with
$58.8 million for the same period of the prior year. The increase was
attributable to MGM GRAND LAS VEGAS which had food and beverage revenues of
$64.3 million during the current period, an increase of $10.2 million (18.9%)
when compared with $54.1 million in the same period of 1996. This increase
reflects the Company's decision to operate the previously leased Studio Cafe
coffee shop. MGM GRAND AUSTRALIA reported food and beverage revenues of $5.2
million, representing an increase of $.5 million (10.6%) when compared with $4.7
million during the same period in the prior year.
Consolidated entertainment, retail and other revenues decreased $7.0
million (7.5%) from $93.7 million in the 1996 period to $86.7 million in the
1997 period. The decrease was attributable to MGM GRAND LAS VEGAS which had
lower theme park and midway/arcade revenues due to downsizing the facilities, as
well as lower EFX revenues. These decreases were partially offset by increases
in MGM Grand Garden Arena revenues and increased revenues from the SkyScreamer
thrill ride which became operational in September 1996.
Income from unconsolidated affiliate was $42.4 million for the nine
months ended September 30, 1997, representing the Company's 50% share of NYNY's
operating income. The operating results from NYNY were not consolidated with
those of the Company, since consolidation is required only with greater than 50%
ownership (see Note 1).
Consolidated operating expenses (before Master Plan asset disposition
and Corporate expense/income) for the 1997 period were $448.2 million, which
were consistent when compared with $447.6 million for the same period last year.
The increase was attributable to MGM Grand Las Vegas, offset by decreases at MGM
Grand Australia. The increases at MGM GRAND LAS VEGAS were due primarily to
increased casino, food and beverage, and advertising expenses offset by lower
expenses related to EFX and midway/arcade operations. Additionally, the
provision for doubtful accounts and discounts decreased by $6.5 million at MGM
Grand Las Vegas as a result of reduced casino revenues, changes in anticipated
collectibility, and collections made on previously reserved receivable balances.
MGM GRAND AUSTRALIA operating expenses decreased $4.9 million (17.1%) from
$28.7 million in the 1996 period to $23.8 million in the 1997 period as a result
of continuing cost containment efforts.
-13-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
NINE MONTHS VERSUS NINE MONTHS (CONTINUED)
Master Plan asset disposition relates to the write-off of various
assets related to the transformation of MGM Grand Las Vegas into the "The City
of Entertainment." The prior year charge of $49.4 million (pre-tax) was
recognized when the plan was announced, and the current year charge of $28.6
million (pre-tax) resulted from the increase in the transformation scope from
$250.0 million to over $700.0 million (see Note 7).
Interest income of $1.0 million for the period ended September 30,
1997, decreased by $2.9 million from $3.9 million in the same period of 1996.
The decrease was attributable to lower invested cash balances at MGM Grand Las
Vegas during the 1997 period.
Interest expense for the nine months ended September 30, 1997 of $1.2
million (net of amounts capitalized) decreased by $32.8 million when compared
with $34.0 million in the same period of 1996. The decrease in the 1997 period
was primarily due to the defeasance of the MGM Finance FMN (see Note 3) in the
1996 period, along with greater capitalization of interest in the current year
from continuing construction and development projects. Also, the Company
recognized interest expense from its unconsolidated affiliate of $7.5 million
during the 1997 period.
Income tax provision of $46.7 million has been recorded at a rate of
36.3% for the nine months ended September 30, 1997, compared with $11.6 million
in 1996 at a rate of 18.6%. The 1996 rate was lower than 1997, reflecting no
provision in the first quarter due to the benefit resulting from the reduction
of the valuation allowance.
Extraordinary loss of $4.2 million, net of income tax benefit,
reflects the write-off of unamortized debt costs from the previous $600.0
million credit facility (see Note 3) in the 1997 period. The extraordinary loss
of $30.8 million, net of income tax benefit, in the prior year represented the
loss on defeasance of the MGM Finance FMN (see Note 3).
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1997 and December 31, 1996, the Company held cash
and cash equivalents of $59.0 million and $61.4 million, respectively. Cash
provided by operating activities for the first nine months of 1997 was $115.1
million compared with $168.6 million for the same period of 1996.
On May 6, 1996, MGM Grand Las Vegas announced details of a 30-month,
$250.0 million Master Plan designed to transform the facility into "The City of
Entertainment." The Master Plan, which on June 3, 1997 was enhanced and
increased to more than $700.0 million, calls for a new 1,500-room "Marriott
Grand"; expansion of the resort's casino capacity by nearly 20 percent to more
than 200,000 square feet; a "Mansion at the MGM Grand" offering 30 exclusive
suites and villas; a 380,000 square foot state-of-the-art conference center; a
6.6-acre Shangri-La pool and spa complex; significantly expanded and improved
parking facilities; and an approximately 50-foot tall new polished bronze lion
sculpture on a 25-foot pedestal, which will be the resort's signature, adjoining
a re-themed entertainment casino that will include a Rainforest Cafe and Studio
54 nightclub. The Company also announced that by the year 2000, it plans to
begin construction of a 500-room Ritz-Carlton Hotel at MGM Grand Las Vegas.
Approximately $189.3 million is expected to be expended during 1997 related to
the Master Plan, of which $73.0 million has been expended through September 30,
1997.
-14-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Capital expenditures during the first nine months of 1997 were $119.0
million, consisting primarily of $28.8 million related to MGM Grand Las Vegas
for general property improvements, $73.0 million for the Master Plan project,
$1.9 million at MGM Grand Australia for general property improvements and $15.3
million for MGM Grand Atlantic City land acquisition costs and pre-construction
activities. Anticipated capital expenditures remaining for 1997 are
approximately $133.6 million, consisting of approximately $116.3 million related
to the Master Plan, approximately $8.2 million related to general property
improvements for MGM Grand Las Vegas, approximately $8.3 million related to land
acquisitions and pre-construction activities for MGM Grand Atlantic City, and
approximately $.8 million for MGM Grand Australia.
The Company made a capital contribution of $7.0 million to NYNY LLC
during the first nine months of 1997. As a lender requirement for the project
financing, both the Company and Primadonna were required to enter into a joint
and several Keep-Well Agreement (see Note 3). The Company also received $12.6
million in distributions from NYNY LLC during the nine months ended September
30, 1997 to pay taxes on its allocated share of income.
The Company expects to finance operations and capital expenditures
through cash flow from operations, cash on hand, the bank lines of credit, and
the Shelf Registration statement (see Note 3).
SAFE HARBOR PROVISION
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
report contains statements that are forward-looking, such as statements relating
to plans for future expansion and other business development activities, as well
as other capital spending, financing sources, the effects of regulation
(including gaming and tax regulations) and competition. Such forward-looking
information involves important risks and uncertainties that could significantly
affect anticipated results in the future and, accordingly, such results may
differ from those expressed in any forward-looking statements made by or on
behalf of the Company. These risks and uncertainties include, but are not
limited to, those relating to development and construction activities,
dependence on existing management, leverage and debt service (including
sensitivity to fluctuations in interest rates), domestic or global economic
conditions (including sensitivity to fluctuations in foreign currencies),
changes in federal or state tax laws or the administration of such laws, changes
in gaming laws or regulations (including the legalization of gaming in certain
jurisdictions) and application for licenses and approvals under applicable
jurisdictional laws and regulations (including gaming laws and regulations).
-15-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Items 1 through 5 of Part II are not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
Amended and Restated Credit Agreement dated as of July 17, 1997,
between MGM Grand, Inc., as Borrower, MGM Grand Atlantic City,
Inc., as Co-Borrower, and Bank of America NT&SA, as
administrative agent, and the banks named therein (incorporated
by reference to Exhibit 10 to the Company's Report on Form 8-K
filed with the Securities Exchange Commission on August 1,
1997).
(B) Reports on Form 8-K
Bank of America Senior Secured $1.25 billion Credit Facility
dated July 17, 1997. A report on Form 8-K dated July 23, 1997
was filed with respect to the amended, restated and extended
$1.25 billion Senior Secured Bank Credit Facility.
-16-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MGM GRAND, INC.
-----------------------------------
(Registrant)
Date: November 3, 1997 /s/ ALEJANDRO YEMENIDJIAN
-----------------------------------
Alejandro Yemenidjian
President, Chief Operating
Officer, and Chief Financial Officer
Date: November 3, 1997 /s/ SCOTT LANGSNER
-----------------------------------
Scott Langsner
Secretary/Treasurer
(principal accounting officer)
-17-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MGM GRAND,
INC. 10Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-START> JUL-01-1997 JAN-01-1997
<PERIOD-END> SEP-30-1997 SEP-30-1997
<CASH> 0 58,993
<SECURITIES> 0 0
<RECEIVABLES> 0 70,423
<ALLOWANCES> 0 (25,626)
<INVENTORY> 0 10,686
<CURRENT-ASSETS> 0 170,473
<PP&E> 0 1,114,781
<DEPRECIATION> 0 (175,972)
<TOTAL-ASSETS> 0 1,298,048
<CURRENT-LIABILITIES> 0 127,063
<BONDS> 0 0
0 0
0 0
<COMMON> 0 580
<OTHER-SE> 0 1,060,301
<TOTAL-LIABILITY-AND-EQUITY> 0 1,298,048
<SALES> 223,521 661,232
<TOTAL-REVENUES> 208,399 614,982
<CGS> 0 0
<TOTAL-COSTS> 180,546 476,723
<OTHER-EXPENSES> (3,466) 1,312
<LOSS-PROVISION> 8,405 22,735
<INTEREST-EXPENSE> 2,511 8,716
<INCOME-PRETAX> 28,984 128,498
<INCOME-TAX> 10,290 46,655
<INCOME-CONTINUING> 18,694 81,843
<DISCONTINUED> 0 0
<EXTRAORDINARY> 4,238 4,238
<CHANGES> 0 0
<NET-INCOME> 14,456 77,605
<EPS-PRIMARY> .25 1.32
<EPS-DILUTED> 0 0
</TABLE>
