Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results
for the second quarter ended June 30, 2018. The results reflect the
Company’s adoption of the new revenue recognition standard (“ASC 606”),
effective January 1, 2018. Certain prior period amounts have been
adjusted to reflect the full retrospective adoption of ASC 606, with no
impact on operating income, net income or Adjusted Property EBITDA (1).
Operating revenues were $1.61 billion for the second quarter of 2018, an
increase of 9.0%, or $132.5 million, from $1.47 billion for the same
period of 2017. Operating revenues from Wynn Palace and our Las Vegas
Operations increased $224.2 million and $3.5 million, respectively,
compared to the same period of 2017. These increases were offset by a
decrease of $95.2 million from Wynn Macau.
On a U.S. generally accepted accounting principles (“GAAP”) basis, net
income attributable to Wynn Resorts, Limited was $155.8 million, or
$1.44 per diluted share, for the second quarter of 2018, compared to
$74.9 million, or $0.73 per diluted share, for the same period of 2017.
The increase in net income attributable to Wynn Resorts, Limited was
primarily due to an increase in operating income from Wynn Palace.
Adjusted net income attributable to Wynn Resorts, Limited (2) was $166.2
million, or $1.53 per diluted share, for the second quarter of 2018,
compared to $129.4 million, or $1.26 per diluted share, for the same
period of 2017.
Adjusted Property EBITDA was $476.4 million for the second quarter of
2018, an increase of 10.8%, or $46.3 million, from $430.0 million for
the same period of 2017. Adjusted Property EBITDA from Wynn Palace
increased $91.9 million compared to the same period of 2017. This
increase was offset by decreases of $37.5 million and $8.1 million from
Wynn Macau and our Las Vegas Operations, respectively.
Wynn Resorts, Limited also announced today that the Company has approved
a cash dividend of $0.75 per share, payable on August 28, 2018 to
stockholders of record as of August 16, 2018.
Macau Operations
Wynn Macau
Operating revenues from Wynn Macau were $543.3 million for the second
quarter of 2018, a 14.9% decrease from $638.5 million for the same
period of 2017. Adjusted Property EBITDA from Wynn Macau was $172.9
million for the second quarter of 2018, a 17.8% decrease from $210.4
million for the same period of 2017.
Casino revenues from Wynn Macau were $473.3 million for the second
quarter of 2018, an 18.1% decrease from $578.1 million for the same
period of 2017. Table games turnover in VIP operations was $13.93
billion, a 13.1% decrease from $16.02 billion for the same period of
2017. VIP table games win as a percentage of turnover was 2.56%, below
the expected range of 2.7% to 3.0% and the 3.53% experienced in the
second quarter of 2017. Table drop in mass market operations was $1.29
billion, a 21.1% increase from $1.07 billion for the second quarter of
2017. Table games win in mass market operations was $252.0 million, a
13.8% increase from $221.6 million for the second quarter of 2017. Table
games win percentage in mass market operations was 19.5%, below the
20.8% experienced in the second quarter of 2017. Slot machine handle was
$963.6 million, an 11.0% increase from $867.9 million for the second
quarter of 2017, while slot machine win increased 2.3% to $40.4 million.
Non-casino revenues from Wynn Macau were $70.0 million for the second
quarter of 2018, a 15.9% increase from $60.4 million for the same period
of 2017. Room revenues were $27.1 million for the second quarter of
2018, a 16.0% increase from $23.3 million for the same period of 2017.
Average daily rate (“ADR”) was $272, a 15.7% increase from $235 for the
second quarter of 2017. Occupancy increased to 99.4% for the second
quarter of 2018, from 97.5% for the same period of 2017. Revenue per
available room (“REVPAR”) was $271, an 18.3% increase from $229 for the
second quarter of 2017.
Wynn Palace
Operating revenues from Wynn Palace were $620.6 million for the second
quarter of 2018, a 56.6% increase from $396.4 million for the same
period of 2017. Adjusted Property EBITDA from Wynn Palace was $179.3
million for the second quarter of 2018, a 105.1% increase from $87.4
million for the same period of 2017.
Casino revenues from Wynn Palace were $525.0 million for the second
quarter of 2018, a 62.4% increase from $323.3 million for the same
period of 2017. Table games turnover in VIP operations was $14.03
billion, a 20.9% increase from $11.60 billion for the second quarter of
2017. VIP table games win as a percentage of turnover was 3.00%, within
the expected range of 2.7% to 3.0% and above the 2.18% experienced in
the second quarter of 2017. Table drop in mass market operations was
$1.22 billion, a 67.2% increase from $729.0 million for the second
quarter of 2017. Table games win in mass market operations was $280.6
million, a 66.3% increase from $168.7 million for the second quarter of
2017. Table games win percentage in mass market operations was 23.0%,
slightly below the 23.1% experienced in the second quarter of 2017. Slot
machine handle was $941.0 million, a 43.0% increase from $657.9 million
for the second quarter of 2017, while slot machine win increased 26.9%
to $44.2 million for the second quarter of 2018.
Non-casino revenues from Wynn Palace were $95.6 million for the second
quarter of 2018, a 30.6% increase from $73.1 million for the same period
of 2017. Room revenues were $40.7 million for the second quarter of
2018, a 46.2% increase from $27.9 million for the same period of 2017.
ADR was $254, a 36.6% increase from $186 for the second quarter of 2017.
Occupancy was flat at 96.2% for the second quarter of 2018, compared to
the same period of 2017. REVPAR was $245, a 37.6% increase from $178 for
the second quarter of 2017.
Las Vegas Operations
Operating revenues from our Las Vegas Operations were $441.6 million for
the second quarter of 2018, a 0.8% increase from $438.0 million for the
same period of 2017. Adjusted Property EBITDA from our Las Vegas
Operations was $124.2 million, a 6.1% decrease from $132.2 million for
the second quarter of 2017.
Casino revenues from our Las Vegas Operations were $101.7 million for
the second quarter of 2018, a 1.2% increase from $100.5 million for the
same period of 2017. Table games drop was $403.7 million, a 3.7%
decrease from $419.3 million for the second quarter of 2017. Table games
win was flat at $101.0 million for the second quarter of 2018, compared
to the same period of 2017. Table games win percentage was 25.0%, within
the expected range of 22% to 26% and above the 24.2% experienced in the
second quarter of 2017. Slot machine handle was $778.4 million, a 1.8%
increase from $764.8 million for the second quarter of 2017, while slot
machine win decreased 6.8% to $49.4 million.
Non-casino revenues from our Las Vegas Operations were $339.8 million
for the second quarter of 2018, a 0.7% increase from $337.5 million for
the same period of 2017. Room revenues were $118.3 million for the
second quarter of 2018, a 4.0% increase from $113.7 million for the same
period of 2017. ADR was $313, a 5.0% increase from $298 for the second
quarter of 2017. Occupancy decreased to 87.7% for the second quarter of
2018, from 88.7% for the same period of 2017. REVPAR was $274, a 3.4%
increase from $265 for the second quarter of 2017. Food and beverage
revenues increased 2.3%, to $170.9 million for the second quarter of
2018, compared to the same period of 2017. Entertainment, retail and
other revenues decreased 10.7%, to $50.7 million for the second quarter
of 2018, compared to the same period of 2017.
Encore Boston Harbor Project in Massachusetts
The Company is currently constructing Encore Boston Harbor, an
integrated resort in Everett, Massachusetts, located adjacent to Boston
along the Mystic River. The resort will contain a hotel, a waterfront
boardwalk, meeting and convention space, casino space, a spa, retail
offerings and food and beverage outlets. The total project budget,
including gaming license fees, construction costs, capitalized interest,
pre-opening expenses and land costs, is estimated to be approximately
$2.5 billion. As of June 30, 2018, we have incurred $1.64 billion in
total project costs. We expect to open Encore Boston Harbor in mid-2019.
Balance Sheet
Our cash and cash equivalents, restricted cash and investment securities
as of June 30, 2018 were $1.58 billion.
Total debt outstanding at the end of the quarter was $8.31 billion,
including $4.23 billion of Macau related debt, $3.10 billion of Wynn Las
Vegas debt and $985.9 million at the parent company and other.
On July 25, 2018, certain subsidiaries in the Company’s retail joint
venture (the “Borrowers”) entered into a $615.0 million term loan
agreement (the “Retail Term Loan”). The Borrowers own approximately
162,000 square feet of retail space at Wynn Las Vegas, and each of the
Borrowers is a 50.1%-owned subsidiary of the Company, with the other
49.9% owned by Crown Acquisitions Inc. The Retail Term Loan matures in
July 2025 and bears interest at LIBOR plus 1.70% per annum. The
Borrowers distributed approximately $589 million of the net proceeds of
the Retail Term Loan to their members. The Company intends to use its
portion of the net proceeds for the construction of Encore Boston Harbor
and for other general corporate purposes.
Conference Call and Other Information
The Company will hold a conference call to discuss its results,
including the results of Wynn Las Vegas, LLC, on August 1, 2018 at 1:30
p.m. PT (4:30 p.m. ET). Interested parties are invited to join the call
by accessing a live audio webcast at http://www.wynnresorts.com.
On August 8, 2018, the Company will make Wynn Las Vegas, LLC financial
information for the quarter ended June 30, 2018 available to
noteholders, prospective investors, broker-dealers and securities
analysts. Please contact our investor relations office at 702-770-7555
or at investorrelations@wynnresorts.com,
to obtain access to such financial information.
Forward-looking Statements
This release contains forward-looking statements regarding operating
trends and future results of operations. Such forward-looking statements
are subject to a number of risks and uncertainties that could cause
actual results to differ materially from those we express in these
forward-looking statements, including, but not limited to, controversy,
regulatory action, litigation and investigations related to Stephen A.
Wynn and his separation from the Company, extensive regulation of our
business, pending or future claims and legal proceedings, ability to
maintain gaming licenses and concessions, dependence on key employees,
general global political and economic conditions, adverse tourism
trends, dependence on a limited number of resorts, competition in the
casino/hotel and resort industries, uncertainties over the development
and success of new gaming and resort properties, construction risks,
cybersecurity risk and our leverage and debt service. Additional
information concerning potential factors that could affect the Company’s
financial results is included in the Company’s Annual Report on Form
10-K for the year ended December 31, 2017 and the Company’s other
periodic reports filed with the Securities and Exchange Commission. The
Company is under no obligation to (and expressly disclaims any such
obligation to) update or revise its forward-looking statements as a
result of new information, future events or otherwise.
Non-GAAP Financial Measures
(1) “Adjusted Property EBITDA” is net income before interest, income
taxes, depreciation and amortization, litigation settlement expense,
pre-opening expenses, property charges and other, management and license
fees, corporate expenses and other (including intercompany golf course
and water rights leases), stock-based compensation, gain (loss) on
extinguishment of debt, change in interest rate swap fair value, change
in Redemption Note fair value and other non-operating income and
expenses. Adjusted Property EBITDA is presented exclusively as a
supplemental disclosure because management believes that it is widely
used to measure the performance, and as a basis for valuation, of gaming
companies. Management uses Adjusted Property EBITDA as a measure of the
operating performance of its segments and to compare the operating
performance of its properties with those of its competitors, as well as
a basis for determining certain incentive compensation. The Company also
presents Adjusted Property EBITDA because it is used by some investors
as a way to measure a company’s ability to incur and service debt, make
capital expenditures and meet working capital requirements. Gaming
companies have historically reported EBITDA as a supplement to GAAP. In
order to view the operations of their casinos on a more stand-alone
basis, gaming companies, including Wynn Resorts, Limited, have
historically excluded from their EBITDA calculations pre-opening
expenses, property charges, corporate expenses and stock-based
compensation, that do not relate to the management of specific casino
properties. However, Adjusted Property EBITDA should not be considered
as an alternative to operating income as an indicator of the Company’s
performance, as an alternative to cash flows from operating activities
as a measure of liquidity, or as an alternative to any other measure
determined in accordance with GAAP. Unlike net income, Adjusted Property
EBITDA does not include depreciation or interest expense and therefore
does not reflect current or future capital expenditures or the cost of
capital. The Company has significant uses of cash flows, including
capital expenditures, interest payments, debt principal repayments,
income taxes and other non-recurring charges, which are not reflected in
Adjusted Property EBITDA. Also, Wynn Resorts’ calculation of Adjusted
Property EBITDA may be different from the calculation methods used by
other companies and, therefore, comparability may be limited.
(2) “Adjusted net income attributable to Wynn Resorts, Limited” is net
income (loss) attributable to Wynn Resorts, Limited before litigation
settlement expense, pre-opening expenses, property charges and other,
change in interest rate swap fair value, change in Redemption Note fair
value, gain (loss) on extinguishment of debt, foreign currency
remeasurement loss, net of noncontrolling interests and income taxes
calculated using the specific tax treatment applicable to the
adjustments based on their respective jurisdictions. Adjusted net income
attributable to Wynn Resorts, Limited and adjusted net income
attributable to Wynn Resorts, Limited per diluted share are presented as
supplemental disclosures to financial measures in accordance with GAAP
because management believes that these non-GAAP financial measures are
widely used to measure the performance, and as a principal basis for
valuation, of gaming companies. These measures are used by management
and/or evaluated by some investors, in addition to net income (loss) and
earnings (loss) per share computed in accordance with GAAP, as an
additional basis for assessing period-to-period results of our business.
Adjusted net income attributable to Wynn Resorts, Limited and adjusted
net income attributable to Wynn Resorts, Limited per diluted share may
be different from the calculation methods used by other companies and,
therefore, comparability may be limited.
The Company has included schedules in the tables that accompany this
release that reconcile (i) net income (loss) attributable to Wynn
Resorts, Limited to adjusted net income attributable to Wynn Resorts,
Limited, (ii) operating income (loss) to Adjusted Property EBITDA, and
(iii) net income (loss) attributable to Wynn Resorts, Limited to
Adjusted Property EBITDA.
WYNN RESORTS, LIMITED AND SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands,
except per share data)(unaudited)
WYNN RESORTS, LIMITED AND SUBSIDIARIESRECONCILIATION
OF NET INCOME (LOSS) ATTRIBUTABLE TO WYNN RESORTS, LIMITEDTO
ADJUSTED NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED(in
thousands, except per share data)(unaudited)
WYNN RESORTS, LIMITED AND SUBSIDIARIESRECONCILIATION
OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA(in
thousands)(unaudited)
Operatingincome(loss)
Pre-openingexpenses
Depreciationandamortization
Propertycharges andother
Managementand licensefees
Corporateexpense andother
Stock-basedcompensation
AdjustedPropertyEBITDA
Operatingincome(loss)
Pre-openingexpenses
Depreciationandamortization
Propertycharges andother
Managementand licensefees
Corporateexpense andother
Stock-basedcompensation
AdjustedPropertyEBITDA
WYNN RESORTS, LIMITED AND SUBSIDIARIESRECONCILIATION
OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA(in
thousands) (unaudited)(continued)
Operatingincome(loss)
Pre-openingexpenses
Depreciationandamortization
Propertycharges andother
Managementand licensefees
Corporateexpense andother
Stock-basedcompensation
AdjustedPropertyEBITDA
Operatingincome(loss)
Pre-openingexpenses
Depreciationandamortization
Propertycharges andother
Managementand licensefees
Corporateexpense andother
Stock-basedcompensation
AdjustedPropertyEBITDA
WYNN RESORTS, LIMITED AND SUBSIDIARIESRECONCILIATION
OF NET INCOME (LOSS) ATTRIBUTABLE TO WYNN RESORTS, LIMITED TOADJUSTED
PROPERTY EBITDA(in thousands)(unaudited)
WYNN RESORTS, LIMITED AND SUBSIDIARIESSUPPLEMENTAL
DATA SCHEDULE(dollars in thousands, except for win
per unit per day, ADR and REVPAR)(unaudited)
WYNN RESORTS, LIMITED AND SUBSIDIARIESSUPPLEMENTAL
DATA SCHEDULE(dollars in thousands, except for win
per unit per day, ADR and REVPAR)(continued)
(unaudited)
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