LAS VEGAS (AP) — Casino operator MGM Mirage Inc. reported Tuesday that its fortunes shifted dramatically in the fourth quarter, when it lost $1.15 billion.
Including a $1.18 billion charge related to the declining value of several recent acquisitions, which it bought in 2005, the Las Vegas-based company’s loss amounted to $4.15 per share.
In the same period a year earlier, MGM Mirage earned $2.85 per share.
Revenue fell to $1.6 billion in the quarter that ended Dec. 31, from $1.93 billion a year earlier.
Analysts polled by Thomson Reuters, who typically exclude one-time items like the charge, forecast earnings of 14 cents per share on revenue of $1.71 billion.
MGM Mirage said lower market values, room rates and cash flow forecast for the Mandalay Resort Group led the company to write down the 2005 investment’s value by $1.17 billion.
Other charges relate to the value of the Mirage Resorts, which the company bought in 2000, and to the value of intangible assets such as MGM Mirage’s trademark.
MGM Mirage officials said in a conference call with investors Tuesday that the company repaid $300 million to its lenders in exchange for relief from its obligations through May 15.
Shares of MGM Mirage were trading at $2.95 after hours Tuesday, down 8 cents or 2.6 percent from the closing of regular trading at $3.03.
The company said it lost $855 million for all of 2008, compared with a profit of $1.58 billion in 2007. The fourth-quarter loss was the first for MGM Mirage in 2008, though its profit declined in the first three quarters.
That was before the gambling industry took a nosedive as the general economy started eroding.
MGM Mirage officials said this month that they were worried the company may default on its debt as it finishes its largest casino project ever, the $8.6 billion CityCenter complex on the Las Vegas Strip.
The company said it will break its loan agreements this year unless the economy turns around and more people start gambling again.
The company delayed filing its annual report from last month while it assessed its financial position. Its decision to tap $842 million of its $4.5 billion senior revolving credit agreement to cover general expenses played into the delay, the company said.
MGM Mirage said on Tuesday that its debt totaled $13.47 billion as of Dec. 31.
Many U.S. casino companies borrowed huge sums in recent years to develop resorts around the world. Several are having trouble making payments on that debt because their revenue has fallen sharply as fewer patrons have spent less money on gambling and related services the companies offer.
MGM Mirage has been trying to secure $1.2 billion to finish CityCenter, which Chief Executive Jim Murren has called the company’s top priority.
MGM Mirage modified the 67-acre development by CityCenter Holdings LLC, a partnership between MGM Mirage and Dubai World subsidiary Infinity World Development Corp., when it announced construction problems in January. The top 22 stories of the Harmon Hotel and Spa, where there were to have been 200 condominiums, will not be built, and the remaining 25 stories’ interior will be delayed.
The company has been considering several options to help its balance sheet, including selling casinos and licensing its name in deals around the world.
It sold the Treasure Island casino on the Strip to Kansas billionaire Phil Ruffin for $775 million late last year and has since been shopping other properties, including nearly 300 acres of land in Nevada and Atlantic City, N.J., and two airplanes.
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