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Wynn Resorts, Limited (WYNN) today reported financial results
for the second quarter ended June 30, 2010.
Net revenues for the second quarter of 2010 were $1.0 billion, compared
to $723.3 million in the second quarter of 2009, driven by a 74.1%
increase in net revenues at Wynn Macau. Adjusted property EBITDA (1)
increased 46.0% to $281.4 million for the second quarter of 2010,
compared to $192.7 million in the 2009 comparable period.
On a US GAAP (Generally Accepted Accounting Principles) basis, net
income attributable to Wynn Resorts for the second quarter of 2010 was
$52.4 million, or $0.42 per diluted share, compared to a net income
attributable to Wynn Resorts of $25.5 million, or $0.21 per diluted
share in the second quarter of 2009. Adjusted net income in the second
quarter of 2010 was $64.9 million, or $0.52 per diluted share (adjusted
EPS)(2) compared to an adjusted net income of $11.5 million, or $0.09
per diluted share in the second quarter of 2009.
Wynn Resorts also announced today that its Board of Directors has
approved a cash dividend for the quarter of $0.25 per common share. This
dividend will be payable on August 26, 2010 to stockholders of record on
August 12, 2010.
Encore at Wynn Macau
On April 21, 2010, we opened Encore at Wynn Macau, a further expansion
of Wynn Macau. Encore adds a fully-integrated resort hotel with 410
luxury suites and four villas along with restaurants, additional retail
space (including Chanel, Piaget and Cartier) and gaming space including
approximately 37 VIP tables, 24 mass market tables and 69 slot machines.
Including Encore, we currently have 474 tables (239 VIP tables, 224 mass
market tables and 11 poker tables) and 1,193 slot machines at Wynn Macau.
Total development and construction costs for Encore were approximately
$550 million. As of June 30, 2010, we had incurred approximately $537.3
million of these costs.
Wynn Macau and Encore Second Quarter Results
In the second quarter of 2010 net revenues were $714.4 million compared
to $410.4 million in the second quarter of 2009. Wynn Macau generated
adjusted property EBITDA of $216.2 million compared to $117.2 million in
the second quarter of 2009.
Table games results are segregated into two distinct reporting
categories, the VIP segment and the mass market segment.
Table games turnover in the VIP segment was $21.7 billion for the 2010
quarter, compared to $12.6 billion for the second quarter of 2009. VIP
table games win as a percentage of turnover (calculated before discounts
and commissions) for the quarter was 3.22%, above the expected range of
2.7% to 3.0% and the 2.66% experienced in the second quarter of 2009. In
November 2009 we added two new private gaming salons with 29 VIP tables
and on April 21, 2010 we added 37 VIP tables with the opening of Encore,
which helped drive some of the growth in our VIP segment in the second
quarter.
Table games drop in the mass market category was $548.1 million during
the period, a 14.0% increase from $481.0 million in the second quarter
of 2009. Mass market table games win percentage (calculated before
discounts) of 22.9% was above our expected range of 19% to 21% and above
the 21.5% generated in the 2009 quarter.
Slot machine handle increased 21.0% to $1.1 billion as compared to the
prior year quarter. Win per unit per day was 19.2% higher at $457
compared to $383 in the second quarter 2009.
Wynn Macau achieved an Average Daily Rate (ADR) of $287 for the second
quarter of 2010, compared to $263 in the 2009 quarter. The property’s
occupancy was 81.3%, compared to 86.7% during the prior year period as
we added 414 rooms and villas with the opening of Encore on April 21,
2010. Revenue per available room (REVPAR) was $234 in the 2010 quarter,
2.5% above 2009 levels of $228.
Gross non-gaming revenues at Wynn Macau increased 59.2% during the
quarter to $70.8 million, driven by hotel and retail revenues which were
up 57.9% and 75.5% respectively as a result of the addition of the
Encore rooms and the opening of several new retail outlets.
Wynn Las Vegas and Encore Second Quarter Results
For the quarter ended June 30, 2010, net revenues for our Las Vegas
operations were $318.2 million, 1.7% higher than in the second quarter
of 2009. Property EBITDA of $65.1 million (with a 20.5% EBITDA margin on
net revenue) was down 13.7% versus the $75.5 million generated in the
comparable period in 2009, primarily due to higher healthcare and other
employee benefit costs, customer acquisition expenses as well as repairs
and maintenance costs to preserve the property’s overall quality.
Net casino revenues in the second quarter of 2010 were $117.2 million,
down 5.8% from the second quarter of 2009. Table games drop was $485.9
million compared to drop of $494.8 million in the 2009 quarter and table
games win percentage of 20.0% was lower than the property’s expected
range of 21% to 24% and the 20.7% reported in the 2009 quarter. Slot
machine handle of $671.8 million was 19.7% below the comparable period
of 2009, however net slot win was down only 1.6%.
Gross non-casino revenues for the quarter were $244.2 million, a 5.3%
increase from the second quarter of 2009, driven primarily by higher
revenues from our nightclub operations and the recently opened Beach
Club.
Room revenues were down 3.2% to $78.8 million during the quarter, versus
$81.5 million in the second quarter of 2009 as Average Daily Rate (ADR)
decreased 9.6% to $197, compared to $218 in the 2009 quarter. Our
occupancy was 92.6%, up from the 86.6% generated in the prior year
period, generating revenue per available room (REVPAR) of $182 in the
2010 period compared to $188 in the second quarter of 2009.
Food and beverage revenues increased 11.5% to $111.5 million in the
quarter as we opened the new Encore Beach Club and Surrender nightclub
in May 2010. Retail revenues were $21.5 million in the quarter, 3.0%
below last year’s levels. Entertainment revenues increased 27.1% to
$15.6 million from the second quarter of 2009 primarily due to the Garth
Brooks performances (started in December 2009), as well as increased
revenue from our Le Reve show.
Other Factors Affecting Earnings
Interest expense, net of $1.8 million in capitalized interest, was $53.6
million for the second quarter of 2010. Depreciation and amortization
expense was $101.4 million during the quarter compared to $102.7 million
for the three months ended June 30, 2009. Depreciation decreased
modestly even with the opening of Encore at Wynn Macau (in April 2010)
and the Beach Club at Wynn Las Vegas (in May 2010) as Wynn Las Vegas’
depreciation decreased as a result of assets with a 5 year life being
fully depreciated as of April 2010.
Corporate expense and other was $22.1 million (including approximately
$7.0 million of stock based compensation) in the second quarter 2010, a
$9.0 million increase primarily due to higher spending associated with
corporate development activities.
Balance Sheet and Capital Expenditures
Our total cash balances at June 30, 2010 were $1.9 billion. Total debt
outstanding at the end of the quarter was $3.2 billion, including
approximately $2.5 billion of Wynn Las Vegas debt and $681 million of
Wynn Macau debt.
Capital expenditures during the second quarter of 2010, net of changes
in construction payables and retention, totaled approximately $105
million primarily related to Encore at Wynn Macau and the Encore Beach
Club at Wynn Las Vegas.
Conference Call Information
The Company will hold a conference call to discuss its results on
Thursday, July 29, 2010 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
(Investor Relations).
Forward-looking Statements
This release contains forward-looking statements regarding operating
trends and future results of operations. Such forward-looking
information involves important risks and uncertainties that could
significantly affect anticipated results in the future and, accordingly,
such results may differ from those expressed in any forward-looking
statements made by us. The risks and uncertainties include, but are not
limited to, competition in the casino/hotel and resorts industries, the
Company’s dependence on existing management, levels of travel, leisure
and casino spending, general economic conditions, and changes in gaming
laws or regulations. 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,
2009 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 its forward-looking
statements as a result of new information, future events or otherwise.
Non-GAAP financial measures
(1) "Adjusted property EBITDA" is earnings before interest, taxes,
depreciation, amortization, pre-opening costs, property charges and
other, corporate expenses, stock-based compensation, and other
non-operating income and expenses, and includes equity in income from
unconsolidated affiliates. 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. 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 financial measures in accordance with U.S. generally
accepted accounting principles ("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, 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.
The Company has included schedules in the tables that accompany this
release that reconcile (i) net income (loss) attributable to Wynn
Resorts to adjusted net income (loss) attributable to Wynn Resorts, and
(ii) operating income (loss) to adjusted property EBITDA and adjusted
property EBITDA to net income (loss) attributable to Wynn Resorts.
(2) Adjusted net income (loss) attributable to Wynn Resorts is net
income (loss) before pre-opening costs, property charges and other
non-cash non-operating income and expenses. Adjusted net income (loss)
attributable to Wynn Resorts and adjusted net income (loss) per share
attributable to Wynn Resorts ("EPS") are presented as supplemental
disclosures because management believes that these 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 income and EPS
computed in accordance with GAAP, as an additional basis for assessing
period-to-period results of our business. Adjusted net income (loss)
attributable to Wynn Resorts and adjusted net income (loss) attributable
to Wynn Resorts per share may be different from the calculation methods
used by other companies and, therefore, comparability may be limited.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------- ---------------------------------
2010 2009 2010 2009
---------------- -------------- ---------------- ----------------
Operating revenues:
Casino $ 789,205 $ 508,345 $ 1,480,793 $ 1,049,999
Rooms 100,528 95,185 193,435 193,591
Food and beverage 127,390 111,550 239,164 221,141
Entertainment, retail and other 87,016 69,472 169,863 132,604
--------- ------- --------- ---------
Gross revenues 1,104,139 784,552 2,083,255 1,597,335
Less: promotional allowances (71,496 ) (61,296 ) (141,694 ) (134,124 )
--------- -- ------- -- --------- -- --------- --
Net revenues 1,032,643 723,256 1,941,561 1,463,211
--------- ------- --------- ---------
Operating costs and expenses:
Casino 519,005 325,579 967,196 699,596
Rooms 31,648 27,258 62,791 54,447
Food and beverage 72,697 64,901 134,533 125,721
Entertainment, retail and other 47,633 40,022 97,757 76,043
General and administrative 95,668 81,930 182,669 174,842
Provision for doubtful accounts 6,852 3,935 13,870 7,829
Pre-opening costs 6,675 40 8,986 40
Depreciation and amortization 101,353 102,731 205,918 204,199
Property charges and other 2,966 (5,938 ) 4,847 10,547
--------- ------- -- --------- ---------
Total operating costs and expenses 884,497 640,458 1,678,567 1,353,264
Operating income 148,146 82,798 262,994 109,947
--------- ------- --------- ---------
Other income (expense):
Interest income 571 524 859 838
Interest expense, net of capitalized interest (53,598 ) (53,689 ) (102,859 ) (110,721 )
Increase (decrease) in swap fair value (1,675 ) 3,261 (5,277 ) 4,356
Gain (loss) on extinguishment of debt/exchange offer (3,152 ) 11,878 (3,152 ) 22,513
Equity in income (loss) from unconsolidated affiliates 115 (33 ) 506 (38 )
Other 431 287 695 211
--------- ------- --------- ---------
Other income (expense), net (57,308 ) (37,772 ) (109,228 ) (82,841 )
--------- -- ------- -- --------- -- --------- --
Income before income taxes 90,838 45,026 153,766 27,106
Provision for income taxes (1,921 ) (19,547 ) (6,990 ) (35,441 )
--------- -- ------- -- --------- -- --------- --
Net income (loss) 88,917 25,479 146,776 (8,335 )
Less: Net income attributable to noncontrolling interests (36,512 ) - (67,383 ) -
--------- -- ------- --------- -- ---------
Net income (loss) attributable to Wynn Resorts, Limited $ 52,405 $ 25,479 $ 79,393 $ (8,335 )
== ========= == ======= == ========= == ========= ==
Basic and diluted income (loss) per common share:
Net income (loss) attributable to Wynn Resorts, Limited:
Basic $ 0.43 $ 0.21 $ 0.65 $ (0.07 )
Diluted $ 0.42 $ 0.21 $ 0.64 $ (0.07 )
Weighted average common shares outstanding:
Basic 122,521 122,161 122,467 117,391
Diluted 123,816 122,386 123,387 117,391
Dividends declared per common share: $ 0.25 - $ 0.25 -
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS)
TO ADJUSTED NET INCOME (LOSS)
(amounts in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
2010 2009 2010 2009
------------- -------------- ------------- --------------
Net income (loss) attributable to Wynn Resorts, Limited $ 52,405 $ 25,479 $ 79,393 $ (8,335 )
Pre-opening costs 6,675 40 8,986 40
(Gain) loss on extinguishment of debt/exchange offer 3,152 (11,878 ) 3,152 (22,513 )
(Increase) decrease in swap fair value 1,675 (3,261 ) 5,277 (4,356 )
Property charges and other 2,966 (5,938 ) 4,847 10,547
Adjustment for income taxes - 7,047 - 6,050
Adjustment for noncontrolling interest (1,931 ) - (2,961 ) -
------ -- ------- ------ -- -------
Adjusted net income (loss) attributable to Wynn Resorts, Limited (2) $ 64,942 $ 11,489 $ 98,694 $ (18,567 )
== ====== == ======= == ====== == ======= ==
Adjusted net income (loss) attributable to Wynn Resorts, Limited per $ 0.52 $ 0.09 $ 0.80 $ (0.16 )
diluted share
== ====== == == ======= == == ====== == == ======= ==
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA
AND ADJUSTED PROPERTY EBITDA TO NET INCOME
(amounts in thousands)
(unaudited)
Three Months Ended June 30, 2010
-----------------------------------------------------------------------
Las Vegas Macau Corporate and Total
Other
-------------- ------------- ---------------- --------------
Operating income (loss) $ (17,222 ) $ 140,164 $ 25,204 $ 148,146
Pre-opening costs 1,590 5,085 - 6,675
Depreciation and amortization 67,583 33,005 765 101,353
Property charges and other 482 2,484 - 2,966
Management and royalty fees 4,787 28,445 (33,232 ) -
Corporate expense and other 4,852 5,843 4,385 15,080
Stock-based compensation 3,031 1,222 2,786 7,039
Equity in income from
unconsolidated affiliates 23 - 92 115
Adjusted Property EBITDA (1) $ 65,126 $ 216,248 $ - $ 281,374
====== ======= = ====== ======= ==== ======== ==== === ======== ===
Three Months Ended June 30, 2009
-----------------------------------------------------------------------
Las Vegas Macau Corporate and Total
Other
-------------- ------------- ---------------- --------------
Operating income (loss) $ (8,346 ) $ 73,660 $ 17,484 $ 82,798
Pre-opening costs - 40 - 40
Depreciation and amortization 78,425 23,462 844 102,731
Property charges and other (6,646 ) 703 5 (5,938 )
Management and royalty fees 4,703 15,895 (20,598 ) -
Corporate expense and other 5,162 2,182 (628 ) 6,716
Stock-based compensation 2,386 1,231 2,748 6,365
Equity in income/(loss) from
unconsolidated affiliates (178 ) - 145 (33 )
Adjusted Property EBITDA (1) $ 75,506 $ 117,173 $ - $ 192,679
====== ======= ====== ======= ==== ======== === ========
Three Months Ended
June 30,
-------------------------------------
2010 2009
------------------- -----------------
Adjusted Property EBITDA (1) $ 281,374 $ 192,679
Pre-opening costs (6,675 ) (40 )
Depreciation and amortization (101,353 ) (102,731 )
Property charges and other (2,966 ) 5,938
Corporate expenses and other (15,080 ) (6,716 )
Stock-based compensation (7,039 ) (6,365 )
Interest income 571 524
Interest expense, net of capitalized interest (53,598 ) (53,689 )
Increase (decrease) in swap fair value (1,675 ) 3,261
Gain (loss) on extinguishment of debt/exchange offer (3,152 ) 11,878
Other 431 287
Provision for income taxes (1,921 ) (19,547 )
Net income 88,917 25,479
Less: Net income attributable to noncontrolling interests (36,512 ) -
-------- ---- --------
Net income attributable to Wynn Resorts, Limited $ 52,405 $ 25,479
==== ======== === ========
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA
AND ADJUSTED PROPERTY EBITDA TO NET INCOME (LOSS)
(amounts in thousands)
(unaudited)
Six Months Ended June 30, 2010
-----------------------------------------------------------------------
Las Vegas Macau Corporate and Total
Other
-------------- ------------- ---------------- --------------
Operating income (loss) $ (51,707 ) $ 265,182 $ 49,519 $ 262,994
Pre-opening costs 1,969 7,017 - 8,986
Depreciation and amortization 146,509 57,876 1,533 205,918
Property charges and other 1,736 2,947 164 4,847
Management and royalty fees 9,561 51,714 (61,275 ) -
Corporate expense and other 11,306 10,638 4,108 26,052
Stock-based compensation 5,978 2,464 5,524 13,966
Equity in income from
unconsolidated affiliates 79 - 427 506
Adjusted Property EBITDA (1) $ 125,431 $ 397,838 $ - $ 523,269
====== ======= ====== ======= ==== ======== === ========
Six Months Ended June 30, 2009
-----------------------------------------------------------------------
Las Vegas Macau Corporate and Total
Other
-------------- ------------- ---------------- --------------
Operating income (loss) $ (66,730 ) $ 142,394 $ 34,283 $ 109,947
Pre-opening costs - 40 - 40
Depreciation and amortization 155,869 46,833 1,497 204,199
Property charges and other 7,294 1,748 1,505 10,547
Management and royalty fees 9,057 33,461 (42,518 ) -
Corporate expense and other 9,732 4,881 71 14,684
Stock-based compensation 4,564 2,459 4,771 11,794
Equity in income/(loss) from
unconsolidated affiliates (429 ) - 391 (38 )
Adjusted Property EBITDA (1) $ 119,357 $ 231,816 $ - $ 351,173
====== ======= ====== ======= ==== ======== === ========
Six Months Ended
June 30,
-------------------------------------
2010 2009
------------------- -----------------
Adjusted Property EBITDA (1) $ 523,269 $ 351,173
Pre-opening costs (8,986 ) (40 )
Depreciation and amortization (205,918 ) (204,199 )
Property charges and other (4,847 ) (10,547 )
Corporate expenses and other (26,052 ) (14,684 )
Stock-based compensation (13,966 ) (11,794 )
Interest income 859 838
Interest expense, net of capitalized interest (102,859 ) (110,721 )
Increase (decrease) in swap fair value (5,277 ) 4,356
Gain (loss) on extinguishment of debt/exchange offer (3,152 ) 22,513
Other 695 211
Provision for income taxes (6,990 ) (35,441 )
Net income (loss) 146,776 (8,335 )
Less: Net income attributable to noncontrolling interests (67,383 ) -
-------- ---- --------
Net income (loss) attributable to Wynn Resorts, Limited $ 79,393 $ (8,335 )
==== ======== === ======== ===
WYNN RESORTS, LIMITED AND SUBSIDIARIES
SUPPLEMENTAL DATA SCHEDULE
Three Months Ended Six Months Ended
--------------------------- ---------------------------
June 30, June 30, June 30, June 30,
2010 2009 2010 2009
---------- ---------- ---------- ----------
Room Statistics for Las Vegas operations:
Occupancy % 92.6% 86.6% 91.0% 88.0%
Average Daily Rate (ADR)(1) $ 197 $ 218 $ 200 $ 220
Revenue per available room (REVPAR)(2) $ 182 $ 188 $ 182 $ 194
Other information for Las Vegas operations:
Table games win per unit per day(3) $ 4,721 $ 5,007 $ 5,576 $ 4,702
Table Win % 20.0% 20.7% 21.7% 19.2%
Slot machine win per unit per day(4) $ 167 $ 164 $ 160 $ 177
Average number of table games 227 225 224 229
Average number of slot machines 2,688 2,780 2,673 2,781
Room Statistics for Macau:
Occupancy % 81.3% 86.7% 85.0% 85.0%
Average Daily Rate (ADR)(1) $ 287 $ 263 $ 285 $ 265
Revenue per available room (REVPAR)(2) $ 234 $ 228 $ 242 $ 225
Other information for Macau:
Table games win per unit per day(3) $ 20,497 $ 13,178 $ 19,688 $ 13,957
Slot machine win per unit per day(4) $ 457 $ 383 $ 454 $ 412
Average number of table games 442 367 417 368
Average number of slot machines 1,185 1,217 1,180 1,233
(1) ADR is Average Daily Rate and is calculated by dividing total
room revenue (less service charges, if any) by total rooms occupied.
(2) REVPAR is Revenue per Available Room and is calculated by
dividing total room revenue (less service charges, if any) by total
rooms available.
(3) Table games win per unit per day is shown before discounts and
commissions.
(4) Slot machine win per unit per day calculated as gross slot win
minus progressive accruals and free play.
SOURCE: Wynn Resorts, Limited
Wynn Resorts, Limited
Samanta Stewart, 702-770-7555
investorrelations@wynnresorts.com
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