Inside Asian Gaming

May 2010 | INSIDE ASIAN GAMING 47 Briefs increase in net income and a nearly 5% jump in quarterly revenues. For the quarter that ended March 31, IGT reported net income of US$35.9 million, or 12 cents per share. For the same quarter a year ago, the company reported net income of $33.6 million, or 11 cents per share. The quarter was affected by restructuring charges of $16.1 million and a write-down of $1.9 million for obsolete equipment. The $18 million charges cost 6 cents per share. Add in the costs of almost $7 million to close the Japan facilities, and the second quarter would have shown net income of $60.6 million, or 20 cents per share. The company said it benefited from casinos that decided to replace aging slot machines with new games. IGT said its revenues in the quarter were $497.7 million, up from $475.7 million in the same quarter last year. IGT said it generated 57% of its revenues from operations where it shares in the slot machine revenues with customers. The other 43% of the company’s revenues, $213.1 million, came from product sales. “An improvement in replacement units shipped, an increase in gaming operations yields and a decline in costs all reflect IGT’s continued efforts to navigate our business through an operating environment which remains challenging,” IGT Chief Executive Officer Patti Hart said in a statement. Roth Capital Markets gaming analyst Todd Eilers said IGT probably benefited from large casino openings in St. Louis and Oklahoma. Combined, the two casinos total 5,000 slot machines from all manufacturers. “IGT typically gets a larger market share of new openings than on replacement sales,” Eilers said. MGM Mirage reports net loss of $96.7 million MGM Mirage lost US$96.7 million in the first quarter of 2010— news that came as no surprise to Wall Street after the company pre- announced earnings last month. The casino giant, which operates 10 Strip resorts, said this morning the net loss translated into a loss of 22 cents per share for the quarter that ended March 31. A year ago, MGM Mirage reported a net income of $105.2 million, or 38 cents a share. Companywide revenues were $1.46 billion, down from $1.5 billion a year ago. MGM Mirage confirmed that the $8.5 billion CityCenter development—owned and operated in a 50-50 joint venture with Dubai World—that opened in December, suffered an operating loss of $255 million in the quarter, which included a $171 million non- cash impairment charge related to its residential inventory and other expenses totaling $75 million. CityCenter reported net revenues of $260 million. MGM Mirage. Aria, CityCenter’s centerpiece 4,004-room hotel casino, reported net revenue of $160 million and an operating loss of $66 million, which included depreciation expense of $54 million. Aria’s hotel occupancy percentage was 63% with an average daily room rate of $194. In a statement, MGMMirageChairman andChief ExecutiveOfficer JimMurren said CityCenter’s results were affected by weakness in the Las Vegas convention market. However, Murren is optimistic about the rest of the year. “We see signs of improvement in the Las Vegas market and expect those to accelerate in the second half of the year and into 2011,” Murren said. “Our forward bookings continue to improve as our convention bookings continue to gain traction.” Murren said MGM Mirage is unveiling a comprehensive new marketing effort for Aria in the coming weeks and he expects Aria’s occupancy to improve over the balance of the year. MGMMirage pointed toward improved results at the MGMGrand Macau. The resort reported operating income of $49 million in the first quarter of 2010 compared to an operating loss of $5 million in the same quarter of 2009. Meanwhile, MGM Mirage is asking shareholders to allow the company to change its name to MGM Resorts International. But company officials were quick to point out today that the proposed name change does not mean The Mirage is on the market. The Strip casino giant told shareholders the proposed name reflects the company’s current vision and futuregrowth. MGMMirage, through its MGM Hospitality Division, has plans for nongaming hotel brands in several international markets, including China, India and the Middle East. The company’s first international venture was the MGM Grand Macau, which opened in December 2007. “MGM Resorts International better represents our company’s growing global presence,” Jim Murren explained. “As a truly international company, our name should clearly reflect that. “This is a significant step and we don’t take it lightly,”Murren said. The company, originally known as MGM Grand Inc., became MGM Mirage in 2000 after its $5.4 billion purchase of Mirage Resorts, which gave the company ownership of such properties as The Mirage, Bellagio and the Beau Rivage in Biloxi, Miss. MGM Mirage briefly put The Mirage on the market in 2009 as the company dealt with internal corporate financial issues. However, the hotel-casino, which celebrated its 20th anniversary last year, is no longer for sale, said company spokesman Alan Feldman. MGMMirage spent more than $100 million to refurbish the resort prior to its anniversary celebration. In 2005, the company spent $7.9 billion to acquire Mandalay Resort Group, which gave MGM Mirage ownership of the Mandalay Bay, Luxor and Excalibur resorts. The Bellagio