GM Resorts blamed much of the loss for the quarter, which ended June 30, on a pre-tax, non-cash impairment charge of approximately us$ 1.12 billion related to the investment in CityCenter, the us$ 8.5 billion Strip development that opened in December. There was a separate us$ 29 million non-cash charge due to an impairment of CityCenter's 2,400-unit residential inventory.
MGM Resorts owns CityCenter in a 50-50 joint venture with Dubai World, the investment arm of the Persian Gulf emirate. Despite the results, MGM Resorts Chairman and Chief Executive Officer Jim Murren said CityCenter is seeing improved business activity. Aria, the development's centerpiece 4,004-room hotel casino, saw occupancy increase in the quarter and grew non-casino revenues.
"The Las Vegas operating environment remains difficult, but as we expected, we are seeing a gradual recovery," Murren said. "Our adjusted (cash flows) improved compared to the first quarter, despite low hold percentages."
Company wide net revenue grew in the quarter to us$ 1.54 billion, compared with us$ 1.46 billion in the first quarter of 2010. CityCenter reported net revenues of us$ 401 million in the second quarter, which included us$ 218 million related to sales of condominium units at Vdara, Mandarin Oriental and Veer Towers. Part of the residential revenues included us$ 56 million in forfeited residential deposits.
CityCenter had a total operating loss of us$ 128 million. Aria reported net revenue of us$ 157 million and an adjusted cash flow loss of us$ 17 million. Aria's results were hurt by a low table games hold percentage. Aria had a room occupancy percentage of 80 % in the quarter and average daily room rates of us$ 178.
The figures resulted in a "significant" improvement from the first quarter in revenue per available room, a non-traditional measurement Wall Street uses to gage profitability. At MGM Resorts' 10 Strip hotel-casinos including Aria, occupancy was 93 % during the quarter, down 1 percentage point from a year ago.
"We maintained strong occupancy and improved our convention mix over the prior year second quarter, leading to sequential improvement in Las Vegas Strip (revenue per available room)," Murren added. "We expect continued progress in our business trends driven by strong forward convention bookings."
One sign of improvement was the results from the MGM Grand Macau, the company's 50-percent resort in China. MGM Grand Macau earned operating income of us$ 40 million in the quarter, including depreciation expense of us$ 21 million. A year ago, the resort reported an operating loss of us$ 8 million, which included depreciation expense of us$ 22 million.