<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 JUNE 30, 1998
-------------------------------------------
[ ] 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 August 10, 1998
- ------------------------------------- ----------------------------------
Common Stock, $.01 par value 58,033,094 shares
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
FORM 10-Q
I N D E X
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of
Operations for the Three Months and Six Months
Ended June 30, 1998 and June 30, 1997 .................................... 1
Condensed Consolidated Balance Sheets
at June 30, 1998 and December 31, 1997 ................................... 2
Condensed Consolidated Statements of
Cash Flows for the Six Months Ended
June 30, 1998 and June 30, 1997 ........................................... 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 1. Legal Proceedings.......................................................... 16
Item 4. Submission of Matters to a Vote of Security Holders
at the Annual Shareholder Meeting Held on May 5, 1998 ..................... 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 Six Months Ended
June 30, June 30,
--------------------- ----------------------
1998 1997 1998 1997
------- -------- --------- --------
<S> <C> <C> <C> <C>
REVENUES:
Casino $ 96,427 $113,108 $ 192,149 $ 220,204
Room 43,344 43,085 84,093 86,421
Food and beverage 23,560 23,858 48,543 45,427
Entertainment, retail
and other 27,413 30,357 51,360 56,231
Income from
unconsolidated affiliate 9,468 14,706 19,677 29,428
-------- -------- --------- ---------
200,212 225,114 395,822 437,711
Less promotional
allowances 14,847 16,029 30,610 31,128
-------- -------- --------- ---------
185,365 209,085 365,212 406,583
-------- -------- --------- ---------
EXPENSES:
Casino 54,641 58,375 109,241 111,532
Room 12,428 11,712 23,801 22,828
Food and beverage 14,987 14,015 30,520 26,254
Entertainment, retail
and other 18,657 20,960 36,774 39,602
Provision for doubtful
accounts and discounts 9,586 5,917 17,773 14,330
General and administrative 26,186 24,804 50,710 50,239
Depreciation and
amortization 18,840 15,934 35,744 31,392
-------- -------- -------- --------
155,325 151,717 304,563 296,177
-------- -------- -------- --------
OPERATING PROFIT BEFORE
CORPORATE EXPENSE 30,040 57,368 60,649 110,406
Corporate expense (2,937) (3,289) (5,388) (4,778)
-------- -------- -------- --------
OPERATING INCOME 27,103 54,079 55,261 105,628
-------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest income 5,413 381 9,210 580
Interest expense, net of
amounts capitalized (6,272) (268) (10,044) (1,242)
Interest expense from
unconsolidated affiliate (2,185) (2,543) (4,356) (5,008)
Other, net (544) (212) (1,147) (444)
-------- -------- -------- --------
(3,588) (2,642) (6,337) (6,114)
-------- -------- -------- --------
INCOME BEFORE PROVISION
FOR INCOME TAXES 23,515 51,437 48,924 99,514
Provision for income taxes (9,116) (18,438) (18,263) (36,365)
-------- -------- -------- --------
NET INCOME $ 14,399 $ 32,999 $ 30,661 $ 63,149
======== ======== ======== ========
PER SHARE OF COMMON STOCK:
Basic:
Net income per share $ 0.25 $ 0.57 $ 0.53 $ 1.09
======== ======== ======== ========
Weighted Average
Shares Outstanding
(000's) 58,001 57,927 57,995 57,882
======== ======== ======== ========
Diluted:
Net income per share $ 0.25 $ 0.56 $ 0.52 $ 1.07
======== ======== ======== ========
Weighted Average Shares
Outstanding (000's) 58,613 58,808 58,697 58,791
======== ======== ======== ========
</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)
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
-------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 368,205 $ 34,606
Accounts receivable, net 59,099 78,977
Prepaid expenses and other 10,413 10,452
Inventories 14,584 16,462
Deferred tax asset 28,620 30,294
---------- ---------
Total current assets 480,921 170,791
---------- ---------
PROPERTY AND EQUIPMENT, NET 1,209,961 1,032,708
OTHER ASSETS:
Investments in unconsoidated affiliates 118,910 108,121
Excess of purchase prie over fair market
value of net assets acquired, net 38,086 38,598
Deposits and other assets, net 58,056 48,156
---------- ----------
Total other assets 215,052 194,875
---------- ----------
$1,905,934 $1,398,374
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 16,967 $ 20,484
Construction payable 22,476 33,376
Current obligation, capital leases 5,616 6,088
Current obligation, long term debt 11,610 10,589
Accrued interest on long term debt 14,188 -
Other accrued liabilities 87,952 110,953
---------- ----------
Total current liabilities 158,809 181,490
---------- ----------
DEFERRED REVENUES 5,210 4,743
DEFERRED INCOME TAXES 64,290 58,831
LONG TERM OBLIGATION, CAPITAL LEASES 3,570 4,447
LONG TERM DEBT 538,313 47,241
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock ($.01 par value,
75,000,000 shares authorized,
58,001,480 and 57,984,873 shares issued
and outstanding) 580 580
Capital in excess of par value 966,983 966,487
Retained earnings 154,900 124,239
Other comprehensive income 13,279 10,316
---------- ----------
Total stockholders' equity 1,135,742 1,101,622
---------- ----------
$1,905,934 $1,398,374
========== ==========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------------
1998 1997
-------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 30,661 $ 63,149
Adjustments to reconcile net income to net cash from
operating activities:
Depreciation and amortization 35,819 31,462
Amortization of debt offering costs 868 842
Provision for doubtful accounts and discounts 17,773 14,330
Earnings in excess of distributions-unconsolidated affiliate (11,201) (17,700)
Change in assets and liabilities:
Accounts receivable 2,106 5,163
Inventories 1,256 (3,285)
Prepaid expenses and other 39 2,124
Income taxes payable and deferred income taxes 7,133 1,184
Accounts payable, accrued liabilities and other (13,214) (20,816)
Currency translation adjustment 266 263
--------- ---------
Net cash from operating activities 71,506 76,716
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (208,247) (70,651)
Disposition of property and equipment, net 446 123
Investments in unconsolidated affiliates - (7,183)
Change in construction payable (10,900) 29
Change in deposits and other assets, net (14,493) (9,134)
--------- ---------
Net cash from investing activities (233,194) (86,816)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments to banks and others (5,210) (6,251)
Issuance of long term debt 500,000 -
Borrowings under bank line of credit 31,000 15,000
Repayments of bank line of credit (31,000) (15,000)
Issuance of common stock 497 2,352
--------- ---------
Net cash from financing activities 495,287 (3,899)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 333,599 (13,999)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 34,606 61,412
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 368,205 $ 47,413
========= =========
</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 June 30, 1998, 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 MGM Grand Hotel/Casino ("MGM Grand Las Vegas"),
a hotel/casino and entertainment complex in Las Vegas, Nevada.
Through its wholly-owned subsidiary, MGM Grand Australia Pty Ltd., the
Company owns and operates the MGM Grand Hotel/Casino in Darwin, Australia
("MGM Grand Australia").
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 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, and 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 two casinos in the Mpumalanga Province of the Republic of
South Africa. The casino in Nelspruit began operations on October 15,
1997, while the casino in Witbank began operations on March 10, 1998. The
Company receives development and management fees from its partner, Tsogo
Sun Gaming & Entertainment, which is responsible for providing all project
costs.
Through its wholly-owned subsidiary, MGM Grand Detroit, Inc., the
Company and its local partners in Detroit, Michigan, formed MGM Grand
Detroit, LLC ("MGM Grand Detroit") to develop a hotel/casino and
entertainment complex at an approximate cost of $750 million. On November
20, 1997, MGM Grand Detroit was chosen as a finalist for a development
agreement to construct, own and operate one of Detroit's three new casinos.
On April 9, 1998, the Detroit City Council approved MGM Grand Detroit's
development agreement with the City of Detroit. Construction of the project
is subject to the receipt of various governmental approvals. The plans for
the permanent facility call for an 800-room hotel, a 100,000 square-foot
casino, signature restaurants and retail outlets, a showroom and other
entertainment venues. On July 22, 1998, the Michigan Gaming Control Board
adopted a resolution that it will issue casino licenses to conduct gaming
operations in temporary facilities. Upon receipt of a license, MGM Grand
Detroit intends to open a temporary gaming facility in the second quarter
of 1999.
Through its wholly-owned subsidiary, MGM Grand Atlantic City, Inc.,
the Company intends to construct, own and operate a destination resort
hotel/casino, entertainment and retail facility in Atlantic City, New
Jersey, at an approximate cost of $700 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 in the 1997
Annual Report included on Form 10-K.
-4-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
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 June 30, 1998, and the results of operations for
the three month and six month periods ended June 30, 1998 and 1997. The
results of operations for such periods are not necessarily indicative of
the results to be expected for the full year.
Recently issued Statement of Position - In April 1998, the American
Institute of Certified Public Accountants issued SOP 98-5, "Reporting on
the Costs of Start-up Activities." The new standard requires that all
companies expense costs of start-up activities as those costs are incurred.
The term "start-up" includes pre-opening, pre-operating and organization
activities. Previously, the Company had capitalized these items until the
development of the property was substantially complete and ready to open,
at which time the cumulative costs were expensed. As of June 30, 1998, the
Company capitalized "start-up" costs of $.7 million related to Atlantic
City and $.5 million related to Detroit. The Company will adopt SOP 98-5
in the first quarter of fiscal year 1999.
Certain reclassifications have been made to prior period financial
statements to conform with the 1998 presentation, which have no effect on
previously reported net income.
NOTE 2. STATEMENTS OF CASH FLOWS
For the six months ended June 30, 1998 and 1997, cash payments made
for interest were $3.1 million and $4.1 million, respectively.
Cash payments made for state and federal taxes for the six months
ended June 30, 1998 and 1997 were $7.1 million and $36.1 million,
respectively.
NOTE 3. LONG TERM DEBT AND NOTES PAYABLE
Long term debt consisted of the following (in thousands):
<TABLE>
<CAPTION> June 30, December 31,
1998 1997
--------------- ---------------
<S> <C> <C>
Australian Hotel/Casino Loan, due December 1, 2000 $ 49,923 $ 57,830
6.95% Senior Collateralized Notes, due February 1, 2005 300,000 -
6.875% Senior Collateralized Notes, due February 6, 2008 200,000 -
--------------- ---------------
549,923 57,830
Less: Current Maturities (11,610) (10,589)
--------------- ---------------
$ 538,313 $ 47,241
=============== ===============
</TABLE>
Total interest incurred for the first six months of 1998 was $18.2
million of which $8.2 million was capitalized, and $4.9 million was
incurred for the first six months of 1997 of which $3.7 million was
capitalized. During the first six months of 1998 and 1997, the Company
recognized interest expense from its unconsolidated affiliate of $4.4
million and $5 million, respectively.
-5-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 3. LONG TERM DEBT AND NOTES PAYABLE (CONTINUED)
On July 1, 1996, the Company secured a $500 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 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 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 six months ended June 30, 1998, $31 million was drawn down and repaid
against the New Facility, and no amounts remained outstanding as of June
30, 1998.
The Company 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 million of
debt and equity securities. On February 2 and February 6, 1998, the Company
completed public offerings totaling $500 million of Senior Collateralized
Notes in tranches of 7 and 10 years. The 7-year tranche of $300 million
carries a coupon of 6.95%, while the 10-year tranche of $200 million
carries a coupon of 6.875%. Both tranches are initially secured equally and
ratably with the New Facility, and the security may be removed equally with
the New Facility at the Company's option upon the occurrence of certain
events, including the maintenance of investment grade ratings.
The Australian bank facility originally provided a total availability
of approximately $65 million (AUD $105 million), which has been reduced
by principal payments totaling $17 million (AUD $24.4 million) made in
accordance with the terms of the bank facility, including $5.2 million (AUD
$8.1 million) during the six months ended June 30, 1998. As of June 30,
1998, $49.9 million (AUD $80.6 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 indebtedness,
which matures in December 2000, has been wholly guaranteed by the Company.
MGM Grand Australia has a $12.4 million (AUD $20 million) uncommitted
standby line of credit, with a funding period of 91 days for working
capital purposes. No amount was outstanding during the six months ended
June 30, 1998.
Upon commencement of operations of NYNY on January 3, 1997 (see Note
1), the $285 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 six months of 1998, $27 million
-6-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 3. LONG TERM DEBT AND NOTES PAYABLE (CONTINUED)
in principal repayments were made by NYNY LLC. As of June 30, 1998 and
December 31, 1997, a total of $218.1 million and $245.1 million was
outstanding, respectively. On January 21, 1997, NYNY LLC completed an
additional $20 million equipment financing with a financial institution.
As of June 30, 1998 and December 31, 1997, $15.9 million and $17.5 million
were outstanding related to the equipment financing, respectively.
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 million was amortized to expense, of which
$1.1 million of such expense was recognized during the six months ended
June 30, 1997.
In 1995, the Company entered into an agreement with Don King
Productions, Inc. ("DKP"), to present six of Mike Tyson's fights. Pursuant
to the agreement, the Company made a non-interest bearing working capital
advance of $15 million to DKP, sold to DKP 618,557 treasury shares of the
Company's Common Stock (the "Shares") for $15 million, and provided a
guaranteed future share price. The original agreement was amended during
1996 and the Shares were placed in the name of, and held by, an independent
trustee, pending disposition at the direction of the Company. The Company
and DKP determined to terminate the agreement, and on September 25, 1997,
after solicitation of competitive bids, the 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 repaid the $15 million
working capital advance 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 1997.
On June 23, 1998, the Company announced a $35.00 per share cash tender
offer for up to 6 million shares of Company common stock as part of a 12
million share repurchase program. The offer commenced on July 2, 1998 and
expired on July 31, 1998. Based upon the final results, an excess of 6
million shares of the Company's common stock were tendered, and
accordingly, the shares will be prorated. The total acquisition cost of the
tendered shares is approximately $210 million. The Company anticipates
that, depending on market conditions, the remaining 6 million shares in the
repurchase program may be acquired in the open market, in private
transactions, through a tender offer or offers or otherwise.
NOTE 5. COMPREHENSIVE INCOME
Statement of Financial Accounting Standards No. 130, ("SFAS 130")
Reporting Comprehensive Income, requires that the Company disclose
comprehensive income and its components. The objective of SFAS 130 is to
report a measure of all changes in equity of a company that result from
transactions and other economic events of the period other than
transactions with stockholders. Comprehensive income is the total of net
income and all other non-stockholder changes in equity ("Other
Comprehensive Income").
-7-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 5. COMPREHENSIVE INCOME (CONTINUED)
The Company has recorded currency translation adjustments as Other
Comprehensive Income in the accompanying financial statements.
Comprehensive income is calculated as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------- -------------------------------
1998 1997 1998 1997
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Net Income $14,399 $32,999 $30,661 $63,149
Currency translation adjustment 4,065 3,702 2,963 4,835
------- ------- ------- -------
Comprehensive income $18,464 $36,701 $33,624 $67,984
======= ======= ======= =======
</TABLE>
NOTE 6. EARNINGS PER SHARE
The Company calculates earnings per share ("EPS") in accordance with
the Statement of Financial Accounting Standards No. 128, "Earnings per
Share" ("SFAS 128"). SFAS 128 presents 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
(in thousands except per share amounts):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------- -------------------------------
1998 1997 1998 1997
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Net Income $14,399 $32,999 $30,661 $63,149
======= ======= ======= =======
Weighted Average Basic Shares 58,001 57,927 57,995 57,882
======= ======= ======= =======
Basic Earnings per Share $ 0.25 $ 0.57 $ 0.53 $ 1.09
======= ======= ======= =======
Weighted Average Diluted Shares 58,613 58,808 58,697 58,791
======= ======= ======= =======
Diluted Earnings per Share $ 0.25 $ 0.56 $ 0.52 $ 1.07
======= ======= ======= =======
</TABLE>
Weighted average diluted shares include the following: options to purchase
612,000 and 844,000 shares issued to employees for the three month periods
ended June 30, 1998 and 1997, respectively, and 702,000 and 852,000 for the
six month periods ended June 30, 1998 and 1997, respectively; employee
grant shares (see Note 4) of 37,000 for the three month period ended June
30, 1997 and 57,000 for the six month period ended June 30, 1997.
NOTE 7. INVESTMENT IN UNCONSOLIDATED AFFILIATE
The Company and Primadonna each hold a 50% interest in a joint venture
which owns and operates NYNY (see Note 1). The hotel/casino opened to the
public on January 3, 1997. The Company contributed land on which the
property is located and cash totaling $70.7 million. The joint venture
initially secured bank financing of $285 million and term loan financing of
$20 million (see Note 3), and the joint venture Partners executed a Keep-
Well Agreement in conjunction with the financing.
-8-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 7. INVESTMENT IN UNCONSOLIDATED AFFILIATE (CONTINUED)
Summary condensed financial information for NY NY LLC, is as follows (in
thousands):
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1998 1997 1998 1997
----------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net Revenues $ 54,698 $ 67,401 $108,733 $135,269
======== ======== ======== ========
Operating Income $ 18,930 $ 29,573 $ 39,337 $ 58,834
======== ======== ======== ========
Interest Expense, net $ 4,369 $ 5,086 $ 8,711 $ 10,016
======== ======== ======== ========
Net Income $ 14,561 $ 24,487 $ 30,626 $ 48,818
======== ======== ======== ========
<CAPTION>
As of As of
June 30, 1998 December 31, 1997
----------------- -----------------
<S> <C> <C>
Total Assets $460,761 $470,252
======== ========
Long term Debt $229,746 $246,403
======== ========
Members' Equity $205,736 $183,350
======== ========
</TABLE>
-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) (in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------- --------------------------------
1998 1997 1998 1997
-------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
Net Revenues:
MGM Grand Las Vegas $167,262 $185,832 $328,881 $361,219
MGM Grand Australia 8,280 8,756 15,805 16,522
MGM Grand South Africa 587 - 1,259 -
Income from unconsolidated affiliate 9,468 14,706 19,677 29,428
Eliminations and other (232) (209) (410) (586)
--------- --------- ---------- ----------
$185,365 $209,085 $365,212 $406,583
========= ========= ========== ==========
Operating Profit (Loss):
MGM Grand Las Vegas $ 18,541 $ 41,747 $ 37,426 $ 80,321
MGM Grand Australia 1,747 915 2,980 657
MGM Grand South Africa 284 - 566 -
Income from unconsolidated affiliate 9,468 14,706 19,677 29,428
--------- --------- ---------- ----------
30,040 57,368 60,649 110,406
Corporate expense (2,937) (3,289) (5,388) (4,778)
--------- --------- ---------- ----------
Operating income 27,103 54,079 55,261 105,628
Interest income 5,413 381 9,210 580
Interest expense, net of amounts capitalized (6,272) (268) (10,044) (1,242)
Interest expense from unconsolidated affiliate (2,185) (2,543) (4,356) (5,008)
Other net (544) (212) (1,147) (444)
--------- --------- ---------- ----------
Income before provision for income taxes 23,515 51,437 48,924 99,514
Provision for income taxes (9,116) (18,438) (18,263) (36,365)
--------- --------- ---------- ----------
Net income $ 14,399 $ 32,999 $ 30,661 $ 63,149
========= ========= ========== ==========
</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 second quarter of 1998 were $185.4 million,
representing a decrease of $23.7 million (11.3%) when compared with $209.1
million during the same period last year. The decrease in net revenues was
largely due to lower casino and entertainment revenues, and lower earnings from
the Company's 50% ownership in NYNY (see Note 1).
Consolidated casino revenues for the second quarter of 1998 were $96.4
million, representing a decrease of $16.7 million (14.8%) when compared with
$113.1 million during the same period in the prior year. MGM GRAND LAS VEGAS
casino revenues were $89.8 million, representing a decrease of $16.6 million
(15.6%) when compared with $106.4 million during the same period in the prior
year. The reduction in casino revenues at MGM Grand Las Vegas was a result of
lower than average table games win percentage and lower table games volume. The
lower table games volume in the current quarter reflects the championship boxing
event which was held in the prior year's quarter. MGM GRAND AUSTRALIA reported
casino revenues of $6.6 million which was flat when compared with the same
period in the prior year, and which was comprised of lower casino volume offset
by higher win percentages.
Consolidated room revenues were $43.3 million for the second quarter of
1998 compared with $43.1 million in the prior year's second quarter,
representing an increase of $.2 million (.5%). MGM GRAND LAS VEGAS room revenues
were $42.9 million, representing an increase of $.3 million (.7%) when compared
with $42.6 million in the same period of the prior year. The increase was
primarily due to a higher occupancy of 98% for the second quarter of 1998 when
compared with 95.2% in the same period of the prior year. The increase was
partially offset by a decrease in the average room rate for the 1998 second
quarter to $97 from $101 for the 1997 second quarter. MGM GRAND AUSTRALIA room
revenues decreased $.1 million (16.7%) from $.6 million in 1997 to $.5 million
in 1998 due to lower room rates, which was somewhat offset by higher occupancy.
Consolidated food and beverage revenues were $23.6 million in the second
quarter of 1998, representing a decrease of $.3 million (1.3%) when compared
with $23.9 million in the second quarter of the prior year. MGM GRAND LAS VEGAS
had food and beverage revenues of $22.2 million during the second quarter of
1998, representing an increase of $.1 million (.5%) when compared with $22.1
million in the second quarter of 1997. This increase resulted from the banquet
revenue generated from the Conference Center which opened April 16, 1998, and
the operation of the Studio 54 night club. The increases in revenue were offset
by the closure of the MGM Grand Buffet for remodeling during the majority of the
1998 second quarter. The consolidated decrease was attributable to MGM GRAND
AUSTRALIA which had food and beverage revenues of $1.4 million, representing a
decrease of $.5 million (26.3%) when compared with $1.9 million during the same
period in the prior year due to lower food covers.
Consolidated entertainment, retail and other revenues decreased $3 million
(9.9%) from $30.4 million in the 1997 period to $27.4 million in the 1998
period. The decrease in entertainment, retail and other revenues is primarily a
result of lower MGM GRAND LAS VEGAS retail revenues and the downsizing of the
spa to a temporary facility. These decreases were partially offset by increases
in entertainment revenues from events in the Grand Garden Arena, increased EFX
attendance, increased convention entertainment revenue, and the addition of
management fees from MGM Grand South Africa.
Income from unconsolidated affiliate was $9.5 million for the second
quarter of 1998, compared with $14.7 million in 1997, representing the Company's
50% share of NYNY's operating income. The reduction of earnings from NYNY is a
result of the unprecedented public response in the prior (first) year of
operations.
-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)
Consolidated operating expenses (before Corporate expenses) were
$155.3 million in the second quarter of 1998, representing an increase of
$3.6 million (2.4%) when compared with $151.7 million for the same period
last year. The overall increase was attributable to MGM GRAND LAS VEGAS
which included a higher provision for doubtful accounts due to changes in
anticipated collectability of receivables and uncertain economic conditions
in Asia, increased depreciation expense due to Master Plan assets placed in
service, and increased operating expense for the Master Plan new
facilities. The increases were somewhat offset by decreases in casino
expense in the current year's quarter which did not include a championship
boxing event, and decreased retail sales expense corresponding with the
lower retail revenue. MGM GRAND AUSTRALIA operating expenses decreased
from $7.8 million in the 1997 period to $6.5 million in the 1998 period as
a result of continuing cost containment efforts.
Corporate expense for 1998 was $2.9 million compared with $3.3 million
in 1997, a decrease of $.4 million. The decrease is a result of the stock
price guarantee amortization in the prior year (see Note 4).
Interest income of $5.4 million for the three months ended June 30,
1998 increased by $5 million from $.4 million in the second quarter of
1997. The increase was attributable to higher invested cash balances
primarily from the proceeds of the Senior Collateralized Notes (see Note
3).
Interest expense in the second quarter of 1998 of $6.3 million (net of
amounts capitalized) increased by $6 million when compared with $.3 million
in the same period of 1997, reflecting the issuance of the Senior
Collateralized Notes (see Note 3). Also, the Company recognized interest
expense from unconsolidated affiliate of $2.2 million during the 1998
period compared with $2.5 million in 1997, reflecting a reduced outstanding
balance on the NYNY facility (see Note 3).
SIX MONTHS VERSUS SIX MONTHS
Net revenues for the six months ended June 30, 1998 were $365.2
million, representing a decrease of $41.4 million (10.2%) when compared
with $406.6 million during the same period last year. The decrease in net
revenues was largely due to lower casino and retail revenue, and lower
earnings from the Company's 50% ownership in NYNY (see Note 1).
Consolidated casino revenues for the six months ended June 30, 1998
were $192.1 million, representing a decrease of $28.1 million (12.8%) when
compared with $220.2 million during the same period in the prior year.
MGM GRAND LAS VEGAS casino revenues were $179.4 million, representing a
decrease of $28 million (13.5%) when compared with $207.4 million during
the same period in the prior year. The reduction in casino revenues at MGM
Grand Las Vegas was a result of lower table game volume and win
percentages. MGM GRAND AUSTRALIA reported casino revenues of $12.7 million
which was $.1 million lower than the same period in the prior year,
primarily reflecting lower casino volume, somewhat offset by an increase in
slot win percentage.
Consolidated room revenues for the period were $84.1 million compared
with $86.4 million for the same period in 1997, representing a decrease of
$2.3 million (2.7%). MGM GRAND LAS VEGAS room revenues were $83.4 million,
representing a decrease of $2.1 million (2.5%) when compared with $85.5
million in the same period of the prior year. The decrease was primarily
due to a lower average room rate for the 1998 period of $99 compared with
$103 in
-12-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
SIX MONTHS VERSUS SIX MONTHS (CONTINUED)
1997, partially offset by an increase in occupancy to 94.2% for the 1998
period when compared with 93.6% in the same period of the prior year. MGM
GRAND AUSTRALIA room revenues were $.8 million for the six months ended
June 30, 1998, representing a decrease of $.2 million (20.0%) when compared
with $1 million for the prior year period, due to lower room rates
partially offset by higher occupancy.
Consolidated food and beverage revenues for the period were $48.5
million, representing an increase of $3.1 million (6.8%) when compared with
$45.4 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
$45.9 million during the current period, representing an increase of $3.8
million (9.0%) when compared with $42.1 million in the same period of 1997.
This increase resulted from the Company's decision to operate the Studio
Cafe coffee shop which during the 1997 period had been a leased facility
until March 1997, the opening of the Studio 54 night club in late December
1997, and banquets from the Conference Center which opened in April 1998.
MGM GRAND AUSTRALIA reported food and beverage revenues of $2.7 million,
representing a decrease of $.7 million (20.6%) when compared with $3.4
million during the same period in the prior year as a result of reduced
food covers.
Consolidated entertainment, retail and other revenues decreased $4.8
million (8.5%) from $56.2 million in the 1997 period to $51.4 million in
the 1998 period. The decrease in entertainment, retail and other revenues
is a result of lower MGM GRAND LAS VEGAS theme park revenues, lower retail
revenues, and the downsizing of the spa to a smaller facility. These
decreases were partially offset by increases in entertainment revenues from
events in the Grand Garden Arena, increased EFX attendance, increased
convention entertainment /audio visual revenue, and the addition of
management fees from MGM Grand South Africa.
Income from unconsolidated affiliate was $19.7 million for the six
months ended June 30, 1998, compared with $29.4 million in 1997,
representing the Company's 50% share of NYNY's operating income. The
reduction of earnings from NYNY is a result of the unprecedented public
response in the prior (first) year of operations.
Consolidated operating expenses (before Corporate expenses) for the
1998 period were $304.6 million, representing an increase of $8.4 million
(2.8%) when compared with $296.2 million for the same period last year.
The overall increase was attributable to MGM GRAND LAS VEGAS which had
higher operating expenses in the 1998 period as a result of higher food and
beverage expenses associated with the addition of Studio 54 and the longer
operating period for the Studio Cafe, higher provisions for doubtful
accounts due to changes in anticipated collectability of receivables and
uncertain economic conditions in Asia, and higher depreciation expense due
to Master Plan assets placed in service. These increases were partially
offset by lower casino expenses due to lower casino taxes and the lack of a
championship boxing event, when compared with the prior year, as well as
lower retail expenses relating to the lower retail revenue. MGM GRAND
AUSTRALIA operating expenses decreased $3.1 million (19.5%) from $15.9
million in the 1997 period to $12.8 million in the 1998 period as a result
of continuing cost containment efforts.
Corporate expense for the 1998 period was $5.4 million compared with
$4.8 million in 1997, representing an increase of $.6 million (12.5%) due
to higher operating expenses in the current year.
-13-
<PAGE>
MGM GRAND, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
SIX MONTHS VERSUS SIX MONTHS (CONTINUED)
Interest income of $9.2 million for the period ended June 30, 1998
increased by $8.6 million from $.6 million in the same period of 1997. The
increase was attributable to higher invested cash balances primarily from
the proceeds of the Senior Collateralized Notes (see Note 3).
Interest expense for the six months ended June 30, 1998 of $10 million
(net of amount capitalized) increased by $8.8 million when compared with
$1.2 million (net of amount capitalized) in the same period of 1997. The
increase in the 1998 period was primarily due to the issuance of the Senior
Collateralized Notes (see Note 3). Also, the Company recognized interest
expense from unconsolidated affiliate of $4.4 million during the 1998
period compared with $5 million in 1997, reflecting a reduced outstanding
balance on the NYNY facility (see Note 3).
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1998 and December 31, 1997, the Company held cash and
cash equivalents of $368.2 million and $34.6 million, respectively. Cash
provided by operating activities for the first six months of 1998 was $71.5
million compared with $76.7 million for the same period of 1997.
On May 6, 1996, MGM Grand Las Vegas announced details of a 30-month,
$250 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 million, calls for a new 1,500-room
"Marriott Marquis"; expansion of the resort's casino capacity by nearly 20
percent to more than 200,000 square feet; and a "Mansion at the MGM Grand"
offering 29 exclusive suites and villas. The Company's 380,000 square foot
state-of-the-art conference center opened in April 1998, and the 50 foot
tall polished bronze lion sculpture along with the "Entertainment Casino"
(previously known as the Emerald City casino) were completed during the
first quarter of 1998. Additionally, the new pool and spa complex was
completed and opened for operations in July 1998. Approximately $347
million is anticipated to be expended during 1998 related to the Master
Plan, of which $181.9 million had been expended through June 30, 1998.
Capital expenditures during the first six months of 1998 were $208.2
million, consisting primarily of $12.2 million related to MGM Grand Las
Vegas for general property improvements, $181.9 million for the Master Plan
project, $10.1 million related to the purchase of a Company airplane, $1.1
million at MGM Grand Australia for general property improvements and $2.9
million for MGM Grand Atlantic City land acquisition costs and pre-
construction activities. Anticipated capital expenditures remaining for
1998 are approximately $255.8 million, consisting of approximately $170.6
million related to the Master Plan, approximately $40.3 million related to
general property improvements for MGM Grand Las Vegas, approximately $40
million for MGM Grand Detroit, approximately $3 million related to land
acquisitions and pre-construction activities for MGM Grand Atlantic City,
$1.5 million for Company airplane and approximately $.4 million for MGM
Grand Australia.
On June 23, 1998, the Company announced a $35.00 per share cash tender
offer for up to 6 million shares of Company common stock as part of a 12
million share repurchase program. The offer commenced on July 2, 1998 and
expired on July 31, 1998. Based upon the final results, an excess of 6
million shares of the Company's common stock were tendered, and
accordingly, the shares will be prorated. The total acquisition cost of the
tendered shares is approximately $210 million. The Company anticipates
that, depending on market conditions, the remaining 6 million shares in the
repurchase program may be acquired in the open market, in private
transactions, through a tender offer or offers or otherwise.
-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)
The Company expects to finance operations and capital expenditures
through cash flow from operations, cash on hand, and the bank lines of
credit.
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 2, 3, 5 and 6 of Part II are not applicable.
ITEM 1. LEGAL PROCEEDINGS
On July 22, 1998, MGM Dist., Inc. (formerly MGM Grand Desert Inn, Inc.
and a subsidiary of the Company ) was granted a dismissal in an adversary
proceeding in the United States Bankruptcy Court for the Central District
of California, in which the plaintiff sought to collect funds previously
paid to the Company in settlement of gaming activities. The plaintiff
subsequently filed a motion for reconsideration which is pending judicial
consideration.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS AT THE
ANNUAL SHAREHOLDER MEETING HELD ON MAY 5, 1998.
<TABLE>
<CAPTION>
(A) The following persons were elected Directors: Share Voting Results
----------------------------------
For Withheld/Not Voted
------------ ------------------
<S> <C> <C>
James D. Aljian 49,961,696 29,096
Fred Benninger 49,960,331 30,461
Terry Christensen 49,962,811 27,981
Glenn A. Cramer 49,961,146 29,646
Willie D. Davis 49,962,620 28,172
Alexander M. Haig, Jr. 49,767,490 223,302
Kirk Kerkorian 49,960,315 30,477
J. Terrence Lanni 49,943,316 47,476
Jim Murren 49,961,826 28,966
Walter M. Sharp 49,960,016 30,776
Alex Yemenidjian 49,961,686 29,106
Jerome B. York 49,962,091 28,701
(B) Approval for an amendment to the Company's Nonqualified Stock Option and
Incentive Stock Option Plans.
Share Voting Results:
For 49,787,424
Against 175,142
Abstain 28,226
(C) Ratification of the selection of Arthur Andersen LLP as independent auditors.
Share Voting Results:
For 49,960,661
Against 20,805
Abstain 9,326
</TABLE>
-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: August 10, 1998 /s/ ALEJANDRO YEMENIDJIAN
-----------------------------------------
Alejandro Yemenidjian
President and
Chief Operating Officer
Date: August 10, 1998 /s/ JAMES J. MURREN
----------------------------------------
James J. Murren
Executive Vice President
and Chief Financial Officer
(principal accounting officer)
-17-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> APR-01-1998 JAN-01-1998
<PERIOD-END> JUN-30-1998 JUN-30-1998
<CASH> 0 368,205
<SECURITIES> 0 0
<RECEIVABLES> 0 89,441
<ALLOWANCES> 0 (30,342)
<INVENTORY> 0 14,584
<CURRENT-ASSETS> 0 480,921
<PP&E> 0 1,430,116
<DEPRECIATION> 0 (220,155)
<TOTAL-ASSETS> 0 1,905,934
<CURRENT-LIABILITIES> 0 158,809
<BONDS> 0 0
0 0
0 0
<COMMON> 0 580
<OTHER-SE> 0 1,135,742
<TOTAL-LIABILITY-AND-EQUITY> 0 1,905,934
<SALES> 200,212 395,822
<TOTAL-REVENUES> 185,365 365,212
<CGS> 0 0
<TOTAL-COSTS> 145,739 286,790
<OTHER-EXPENSES> 2,937 5,388
<LOSS-PROVISION> 9,586 17,773
<INTEREST-EXPENSE> 8,457 14,400
<INCOME-PRETAX> 23,515 48,924
<INCOME-TAX> 9,116 18,263
<INCOME-CONTINUING> 14,399 30,661
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 14,399 30,661
<EPS-PRIMARY> .25 .53
<EPS-DILUTED> .25 .52
</TABLE>
