Las Vegas Sun

March 28, 2024

MGM Mirage to take $1.2 billion charge in quarter

Casino operator MGM Mirage said Friday it will take a charge of about $1.2 billion for the fourth quarter to write off "substantially all" of the goodwill it recognized in the 2005 acquisition of Mandalay Resort Group.

MGM Mirage paid $4.8 billion for Mandalay, a deal that made it the world's second-largest gambling operator.

The company said in a Securities and Exchange Commission filing that the charge resulted from lower values for gambling assets, turmoil in credit and equity markets, and current cash-flow forecasts for its resorts.

It didn't offer details about the cash-flow forecasts.

The company said in the filing that its goodwill balance included the $1.2 billion related to the Mandalay deal and $47 million related to acquiring Mirage Resorts Inc. in 2000.

Goodwill is the amount exceeding fair market value that is paid for an acquisition.`

The company assigned the goodwill from the Mandalay deal mostly to its Mandalay Bay, Luxor, Excalibur and Gold Strike Tunica businesses, and goodwill from the Mirage deal was assigned to Bellagio, The Mirage and TI.

Las Vegas-based MGM Mirage said it had an indefinite-lived intangible assets balance of $345 million that includes trademarks and trade names of $228 million from the Mandalay purchase.

MGM Mirage grew from a single casino to one of the giants of the gambling industry. It runs 10 casinos on the Las Vegas Strip and is developing a $9.2 billion casino complex there.

Shares of MGM Mirage fell 91 cents, or 6.4 percent, to close at $13.39 Friday.

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