If you are an MGM Resorts International shareholder (MGM), current CEO Jim Murren's decision to build the $9.5 billion City Center resort has been a complete disaster. Even worse, the idea that the project will eventually yield any kind of positive return on invested capital in the near future is at best far fetched. Let's do the analysis to see why.
MGM CityCenter
The CityCenter is a project on the south side of the Las Vegas Strip and is comprised of the Aria Resort and Casino, the Vdara Hotel & Spa, the Mandarin Hotel & Luxury Residence complex, and Crystals Shopping, Dining, and Entertainment mall.
Based on MGM's 2011 Annual Report filed 2/29/2012, MGM resorts currently carries the MGM CityCenter property on the balance sheet at a value of approximately $9.5 billion. The $9.5 billion is broken down in the following manner:
Equity: $6.6 billion
Long-Term Debt: $2.5 billion
Current Liabilities: $.4 billion
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