MGM Mirage Loses $1.15 bil in 4th Qtr

Company Enters into an Amendment to Senior Credit Facility Providing a Waiver of Financial Covenants

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. March 18, 2009

LAS VEGAS, NV, March 17, 2009 - MGM MIRAGE (NYSE: MGM) today reported its 2008 fourth quarter and full year financial results and provided details of a waiver and amendment of its senior credit facility.

Summary of Fourth Quarter Operating Results

The Company reported a fourth quarter diluted loss per share from continuing operations of $4.15, including a non-cash goodwill and indefinite-lived intangible asset impairment charge of $1.2 billion, or $4.25 per share, compared to earnings per share of $2.85 in the prior year quarter, which included a $1.03 billion, or $2.23 per share, gain on the CityCenter transaction. The Company notes that fourth quarter results were impacted by global economic conditions and market trends, and that these trends have continued into the first quarter. The Company earned net revenues of $1.6 billion and Property EBITDA(2) of $327 million in the fourth quarter of 2008, which included $27 million of preopening and start-up expenses and net property transactions.

The non-cash impairment charge, which is included in "Property transactions, net," relates to goodwill and other indefinite-lived intangible assets recognized in the 2005 acquisition of Mandalay Resort Group. Goodwill was assigned primarily to Mandalay Bay, Luxor, Excalibur, and Gold Strike Tunica; this impairment charge represents substantially all of the goodwill recognized at the time of the Mandalay acquisition and a minor portion of the value of trade names related to the Mandalay resorts. The charge resulted from several factors: 1) lower market valuation multiples for gaming assets; 2) higher discount rates resulting from turmoil in the credit markets; and 3) reduced cash flow forecasts for the affected resorts based on current market conditions.

The following table lists significant items which affect the comparability of the current and prior year quarterly results (EPS impact shown, net of tax, per diluted share; negative amounts represent charges to income).

Summary of Senior Credit Facility Waiver and Amendment

On March 17, 2009, the Company obtained from the lenders under its senior credit facility a waiver of the requirement that the Company comply with the senior credit facility's financial covenants through May 15, 2009. Under the terms of the amendment, the Company repaid $300 million of the outstanding borrowings under its senior revolving credit facility. The amendment provides for a 100 basis point increase to the interest rate under the senior credit facility, prohibits the Company from prepaying or repurchasing any debt or disposing of assets, and allows the Company to continue to make its required equity contributions to CityCenter through May 15, 2009.

"We are pleased to have obtained this waiver and amendment of our senior credit facility. While there is still work to be done, this is a positive step that provides us with the opportunity to continue to work with our financial advisors and our bank group in addressing the Company's current financial position," said Jim Murren, Chairman and Chief Executive Officer of MGM MIRAGE. "The current economic climate remains challenging, but we are still driving high occupancy at our resorts, which are in terrific shape. We continue to provide our guests with world-class customer service and a renewed value proposition."

Detailed Discussion of Fourth Quarter Operating Results

Gaming revenues decreased 17% for the fourth quarter. The Company's total table games volume (including baccarat) decreased 17% in the quarter, with the overall table games hold percentage near the midpoint of the Company's normal 18% to 22% range in the 2008 period, lower than the 2007 period when the hold percentage was near the top end of the range. Slots revenues decreased 12% company-wide.

Rooms revenue decreased 21% as market conditions impacted rates and occupancy leading to a 21% decrease in Las Vegas Strip REVPAR(1). Average room rates decreased 15% at the Company's Las Vegas Strip resorts and occupancy decreased from 93% to 85%.

The Company's non-gaming revenues excluding rooms decreased 9%. Such revenues were impacted by the decreased customer spending and lower occupancy at the Company's resorts. The Company continues to generate a significant portion of its revenue from its non-gaming businesses by providing new and exciting experiences for its guests. For example, the Company recently opened the Terry Fator show at The Mirage and, in conjunction with its partners at Disney Theatrical Productions, plans to open the Broadway sensation The Lion King at Mandalay Bay in May 2009.

Corporate expense decreased to $26 million compared to $53 million in the prior year quarter as a result of cost reduction efforts throughout the year. The Company continues to implement new cost saving programs to maximize its margins and cash flows.

MGM Grand Macau, which opened in December 2007, earned Property EBITDA of $17 million during the 2008 quarter and Property EBITDA of $119 million for the full year. The Company recognized its share of MGM Grand Macau's fourth quarter results as follows: $2 million of expense in the "Income from unconsolidated affiliates" line and $4 million of expense in "Non-operating items from unconsolidated affiliates."

Operating income decreased 60% on a comparable basis to the prior year quarter, excluding the non-cash goodwill and indefinite-lived intangible asset impairment charge in 2008, the CityCenter gain in 2007, property transactions, insurance recoveries, profits from The Signature at MGM Grand, and preopening and start-up expenses.

Property EBITDA of $327 million was also impacted by certain of the items discussed above and was down 41% on a comparable basis to the prior year quarter with a margin of 22% compared to 31%. The following table lists the items that impacted comparability of Property EBITDA (income/ (expense).

Liquidity and Financial Position

During the fourth quarter of 2008, the following items were relevant to the Company's liquidity and financial position:

Issued $750 million of 13% senior secured notes due 2013 at a discount to yield 15%, with net proceeds to the Company of $687 million.

Repurchased $345 million of face amount of outstanding senior notes at a purchase price of $263 million. A substantial portion of the repurchased notes were from the October 2009 and September 2010 maturities of senior notes.

Redeemed $149 million of senior subordinated notes assumed in the Mandalay acquisition as a result of a one-time put option by the bondholders.

Announced that the Company's 50% owned venture CityCenter closed on a $1.8 billion senior secured bank credit facility. Under the terms of the credit facility, at March 16, 2009 the Company and Dubai World were each required to fund remaining construction costs of up to $494 million; such amounts may be reduced by any additional financing obtained by CityCenter. In addition, the Company and Dubai World have each provided partial completion guarantees up to $600 million.

Entered into an agreement to sell Treasure Island for $775 million, or $755 million if the amount is paid in full by April 30, 2009; the sale is expected to close by March 31, 2009.

In the fourth quarter of 2008 capital expenditures totaled approximately $120 million.

At December 31, 2008, the Company had approximately $13.5 billion of total long-term debt. In late February 2009, the Company borrowed $842 million under its senior credit facility, which amount represented - after giving effect to $93 million in outstanding letters of credit - the total amount of unused borrowing capacity available under its $7.0 billion senior credit facility. In connection with the waiver and amendment discussed above, the Company repaid $300 million under the senior revolving credit facility, which amount is not available for re-borrowing without the consent of the lenders.

The Company was in compliance with its financial covenants under its senior credit facility at December 31, 2008. However, if the recent adverse conditions in the economy in general - and the gaming industry in particular - continue, the Company believes that it will not be in compliance with those financial covenants during 2009. In fact, given these conditions and the recent borrowing under its senior credit facility, the Company does not expect to be in compliance with these financial covenants at March 31, 2009. As a result, on March 17, 2009 the Company obtained an amendment to the senior credit facility, as discussed above, which included a waiver of the requirement to comply with such financial covenants through May 15, 2009. Following expiration of the waiver on May 15, 2009, the Company will be subject to an event of default related to the expected noncompliance with financial covenants under the senior credit facility at March 31, 2009.

The Company intends to work with its lenders to obtain additional waivers or amendments prior to that time to address future noncompliance with the senior credit facility; however, the Company provided no assurance that it will be able to secure such waivers or amendments. The lenders holding at least a majority of the principal amount under the Company's senior credit facility could, among other actions, accelerate the obligation to repay borrowings under our senior credit facility in such an event of default. As a result of such event of default, under certain circumstances, cross defaults could occur under the Company's indentures and the CityCenter $1.8 billion senior secured credit facility, which could accelerate the obligation to repay amounts outstanding under such indentures and the CityCenter credit facility and could result in termination of the unfunded commitments under the CityCenter credit facility. As a result of the conditions described above, the report of the Company's independent registered public accounting firm on the Company's consolidated financial statements for the year ended December 31, 2008 contains an explanatory paragraph with respect to the Company's ability to continue as a going concern. The Company has included additional information about its liquidity and financial position in its recently filed Form 10-K, including a detailed discussion of the impact of the matters described above.

"We view the recently executed waiver and amendment as a strong show of support by our long-term relationship banks," said Executive Vice President and Chief Financial Officer of MGM MIRAGE, Dan D'Arrigo. "We look forward to further dialog with our lenders as we consider all viable options to improve our capital structure, which may include asset dispositions, raising additional debt and/or equity capital, and modifying or extending our outstanding debt."