Wynn Resorts Results

Wynn Resorts Reports 47.9 Percent Revenue Growth for First Quarter 2017

Net revenues were $1.48 billion for the first quarter of 2017, an increase of 47.9%, or $478.0 million, from $997.7 million for the same period of 2016. The increase was the result of $475.8 million from Wynn Palace and an increase of $23.4 million from our Las Vegas Operations, partially offset by a decrease of $21.2 million from Wynn Macau.

Wynn Resorts

Wynn Resorts, Limited (Nasdaq: WYNN) yesterday reported financial results for the first quarter ended March 31, 2017.

Net revenues were $1.48 billion for the first quarter of 2017, an increase of 47.9%, or $478.0 million, from $997.7 million for the same period of 2016. The increase was the result of $475.8 million from Wynn Palace and an increase of $23.4 million from our Las Vegas Operations, partially offset by a decrease of $21.2 million from Wynn Macau.

On a U.S. generally accepted accounting principles ("GAAP") basis, net income attributable to Wynn Resorts, Limited was $100.8 million, or $0.99 per diluted share, for the first quarter of 2017, an increase of 34.0%, or $25.6 million, from $75.2 million, or $0.74 per diluted share, for the same period of 2016. The increase in net income attributable to Wynn Resorts, Limited was primarily the result of income from Wynn Palace, which opened in the third quarter of 2016, and from increased income from our Las Vegas Operations, partially offset by increased interest expense. The increase in interest expense was partially the result of a $25.6 million out-of-period adjustment recorded in the first quarter of 2016 related to capitalized interest that reduced interest expense. Adjusted net income attributable to Wynn Resorts, Limited (1) was $126.5 million, or $1.24 per diluted share, for the first quarter of 2017, compared to $108.8 million, or $1.07 per diluted share, for the same period of 2016.

Adjusted Property EBITDA (2) was $427.5 million for the first quarter of 2017, an increase of 42.4%, or $127.3 million, from $300.3 million for the same period of 2016, primarily as a result of $111.9 million from Wynn Palace and an increase of $25.6 million from our Las Vegas Operations, partially offset by a decrease of $10.1 million from Wynn Macau.

Wynn Resorts, Limited also announced today that the Company has approved a cash dividend of $0.50 per share, payable on May 23, 2017 to stockholders of record as of May 11, 2017.

Wynn Macau

Net revenues from Wynn Macau were $587.0 million for the first quarter of 2017, a 3.5% decrease from $608.2 million for the same period of 2016. Adjusted Property EBITDA from Wynn Macau was $181.1 million for the first quarter of 2017, a 5.3% decrease from $191.2 million for the same period of 2016.

Casino revenues from Wynn Macau were $554.9 million for the first quarter of 2017, a 2.9% decrease from $571.8 million for the same period of 2016. Table games turnover in VIP operations was $13.28 billion, a 1.4% decrease from $13.47 billion for the first quarter of 2016. VIP table games win as a percentage of turnover (calculated before commissions) was 3.30%, above the expected range of 2.7% to 3.0% and the 2.81% experienced in the first quarter of 2016. Table drop in mass market operations was $1.14 billion, a 6.0% decrease from $1.21 billion for the first quarter of 2016. Table games win in mass market operations was $212.9 million, a 14.0% decrease from $247.5 million for the first quarter of 2016. Table games win percentage in mass market operations was 18.7%, below the 20.5% experienced in the first quarter of 2016. Slot machine handle was $856.7 million, a 21.9% decrease from $1.10 billion for the first quarter of 2016, while slot machine win decreased 23.6% to $38.6 million.

Non-casino revenues before promotional allowances from Wynn Macau were $64.9 million for the first quarter of 2017, a 15.5% decrease from $76.7 million for the same period of 2016. Room revenues decreased 16.1%, to $25.5 million for the first quarter of 2017, from $30.5 million for the same period of 2016. Average daily rate ("ADR") was $265, an 18.2% decrease from $324 for the first quarter of 2016. Occupancy increased to 95.7% for the first quarter of 2017, from 94.8% for the same period of 2016. Revenue per available room ("REVPAR") was $254, a 17.3% decrease from $307 for the first quarter of 2016.

Wynn Palace

The Company opened Wynn Palace on August 22, 2016, with the first quarter of 2017 representing the second full quarter of operations for the resort.

Net revenues and Adjusted Property EBITDA from Wynn Palace were $475.8 million and $111.9 million, respectively, for the first quarter of 2017.

Casino revenues from Wynn Palace were $430.0 million for the first quarter of 2017. Table games turnover in VIP operations was $11.04 billion and table games win as a percentage of turnover (calculated before commissions) was 3.03%, slightly outside the expected range of 2.7% to 3.0%. Table drop in mass market operations was $770.0 million, table games win in mass market operations was $167.6 million and table games win percentage was 21.8%. Slot machine handle was $657.6 million and slot machine win was $33.9 million for the first quarter of 2017.

Non-casino revenues before promotional allowances from Wynn Palace were $85.6 million for the first quarter of 2017. Room revenues were $39.8 million with an ADR of $258, occupancy of 95.6% and REVPAR of $246.

Las Vegas Operations

Net revenues from our Las Vegas Operations were $412.9 million for the first quarter of 2017, a 6.0% increase from $389.4 million for the same period of 2016. Adjusted Property EBITDA from our Las Vegas Operations was $134.6 million, a 23.4% increase from $109.0 million for the first quarter of 2016.

Casino revenues from our Las Vegas Operations were $166.3 million for the first quarter of 2017, a 3.3% increase from $161.0 million for the same period of 2016. Table games drop was $458.6 million, a 3.5% decrease from $475.2 million for the first quarter of 2016. Table games win was $130.8 million, a 4.6% increase from $125.0 million for the first quarter of 2016. Table games win percentage was 28.5%, above the property’s expected range of 21% to 25% and above the 26.3% experienced in the first quarter of 2016. Slot machine handle was $765.9 million, a 6.8% increase from $717.5 million for the first quarter of 2016, while slot machine win was relatively flat at $49.7 million.

Non-casino revenues before promotional allowances from our Las Vegas Operations were $285.5 million for the first quarter of 2017, a 5.2% increase from $271.3 million for the same period of 2016. Room revenues increased 9.3%, to $115.0 million for the first quarter of 2017, from $105.1 million for the same period of 2016. ADR was $315, a 5.7% increase from $298 for the first quarter of 2016. Occupancy increased to 85.5% for the first quarter of 2017, from the 81.7% experienced in the same period of 2016. REVPAR was $269, a 10.7% increase from $243 for the first quarter of 2016. Food and beverage revenues increased 5.9%, to $117.4 million for the first quarter of 2017, compared to the same period of 2016. Entertainment, retail and other revenues decreased 3.8%, to $53.1 million for the first quarter of 2017, compared to the same period of 2016.

Wynn Boston Harbor Project in Massachusetts

The Company is currently constructing Wynn 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 $2.4 billion. As of March 31, 2017, we have incurred $606.9 million in total project costs. We expect to open Wynn Boston Harbor in mid-2019.

Balance Sheet

Our cash and cash equivalents, restricted cash and investment securities at March 31, 2017 were $2.84 billion.

Total debt outstanding at the end of the quarter was $9.81 billion, including $3.82 billion of Macau related debt, $3.17 billion of Wynn Las Vegas debt and $2.82 billion at the parent company and other.

On April 24, 2017, the Company amended the Wynn America credit facilities to, among other things, extend the maturity of portions of the credit facilities. Pursuant to the amendment, (i) the maturity date with respect to $333.0 million in aggregate principal amount of the $375 million senior secured revolving credit facility was extended from November 20, 2019 to December 31, 2021; (ii) the maturity date with respect to $805.4 million in aggregate principal amount of the $875 million senior secured term loan I facility was extended from November 20, 2020 to December 31, 2021, with repayment in quarterly installments of $20.1 million commencing on March 31, 2020 and a final installment of $664.5 million on December 31, 2021; and (iii) the maturity date with respect to the $125 million senior secured term loan II was extended from November 20, 2020 to December 31, 2021, with no required scheduled repayments until maturity on December 31, 2021.

Non-GAAP Financial Measures

(1) “Adjusted net income attributable to Wynn Resorts, Limited” is net income attributable to Wynn Resorts, Limited before pre-opening expenses, property charges and other, change in interest rate swap fair value, change in Redemption Note fair value, loss on extinguishment of debt, net of noncontrolling interests and 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 income and earnings 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.

(2) “Adjusted Property EBITDA” is net income before interest, taxes, depreciation and amortization, 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, 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, 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, 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, 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 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 attributable to Wynn Resorts, Limited to Adjusted Property EBITDA.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)

   
Three Months Ended March 31,
2017     2016
Operating revenues:
Casino $ 1,151,224 $ 732,730
Rooms 180,267 135,592
Food and beverage 152,840 130,444
Entertainment, retail and other 102,905   81,995  
Gross revenues 1,587,236 1,080,761
Less: promotional allowances (111,556 ) (83,083 )
Net revenues 1,475,680   997,678  
Operating expenses:
Casino 740,216 452,540
Rooms 44,506 37,709
Food and beverage 93,378 79,420
Entertainment, retail and other 43,219 38,299
General and administrative 159,962 117,445
(Benefit) provision for doubtful accounts (4,166 ) 706
Pre-opening 5,779 33,769
Depreciation and amortization 139,820 77,971
Property charges and other 3,036   1,521  
Total operating expenses 1,225,750   839,380  
Operating income 249,930   158,298  
Other income (expense):
Interest income 6,471 3,479
Interest expense, net of amounts capitalized (98,262 ) (44,772 )
Change in interest rate swap fair value (771 ) (1,825 )
Change in Redemption Note fair value (15,847 ) (5,003 )
Equity in income from unconsolidated affiliates 16
Other (6,106 ) (483 )
Other income (expense), net (114,515 ) (48,588 )
Income before income taxes 135,415 109,710
Provision for income taxes (2,890 ) (3,918 )
Net income 132,525 105,792
Net income attributable to noncontrolling interests (31,709 ) (30,571 )
Net income attributable to Wynn Resorts, Limited $ 100,816   $ 75,221  
Basic and diluted income per common share:
Net income attributable to Wynn Resorts, Limited:
Basic $ 0.99 $ 0.74
Diluted $ 0.99 $ 0.74
Weighted average common shares outstanding:
Basic 101,753 101,392
Diluted 102,069 101,686
Dividends declared per common share: $ 0.50 $ 0.50
 
 

WYNN RESORTS, LIMITED AND SUBSIDIARIES

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED

TO ADJUSTED NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED

(in thousands, except per share data)

(unaudited)

   
Three Months Ended March 31,
2017     2016
Net income attributable to Wynn Resorts, Limited $ 100,816 $ 75,221
Pre-opening expenses 5,779 33,769
Property charges and other 3,036 1,521
Change in interest rate swap fair value 771 1,825
Change in Redemption Note fair value 15,847 5,003
Income tax impact on adjustments 668 (386 )
Noncontrolling interests impact on adjustments (441 ) (8,193 )
Adjusted net income attributable to Wynn Resorts, Limited $ 126,476   $ 108,760  
Adjusted net income attributable to Wynn Resorts, Limited per diluted share $ 1.24   $ 1.07  
 
Weighted average common shares outstanding - diluted 102,069 101,686
 
 

WYNN RESORTS, LIMITED AND SUBSIDIARIES

RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA

(in thousands)

(unaudited)

   
Three Months Ended March 31, 2017

Operating

income

(loss)

   

Pre-opening

expenses

   

Depreciation

and

amortization

   

Property

charges and

other

   

Management

and license

fees

 

Corporate

expense

and other

   

Stock-based

compensation

   

Adjusted

Property

EBITDA

Macau Operations:
Wynn Macau $ 128,141 $ $ 24,709 $ 715 $ 22,810 $ 2,858 $ 1,873 $ 181,106
Wynn Palace 24,871 64,595 98 18,671 2,385 1,236 111,856
Other Macau (2,968 )   1,131       1,677   160  
Total Macau Operations 150,044 90,435 813 41,481 6,920 3,269 292,962
Las Vegas Operations 67,466 239 46,857 1,727 12,470 5,347 471 134,577
Corporate and Other 32,420   5,540   2,528   496   (53,951 ) 8,500   4,467  
Total $ 249,930   $ 5,779   $

139,820

  $ 3,036   $   $ 20,767   $ 8,207   $ 427,539
 
    Three Months Ended March 31, 2016

Operating

income

(loss)

   

Pre-opening

expenses

   

Depreciation

and

amortization

   

Property

charges and

other (1)

   

Management

and license

fees

   

Corporate

expense

and other

   

Stock-based

compensation

   

Adjusted

Property

EBITDA

Macau Operations:
Wynn Macau $ 136,182 $ $ 24,774 $ 1,366 $ 22,763 $ 3,251 $ 2,909 $ 191,245
Wynn Palace (30,539 ) 26,258 4,281
Other Macau (5,091 )   755       3,152   1,184  
Total Macau Operations 100,552 26,258 29,810 1,366 22,763 6,403 4,093 191,245
Las Vegas Operations 45,012 706 45,194 171 12,325 4,838 778 109,024
Corporate and Other 12,734   6,805   2,967     (35,088 ) 6,942   5,640  
Total $ 158,298   $ 33,769   $ 77,971   $ 1,537   $   $ 18,183   $ 10,511   $ 300,269

WYNN RESORTS, LIMITED AND SUBSIDIARIES

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED TO ADJUSTED PROPERTY EBITDA

(in thousands)

(unaudited)

   
Three Months Ended March 31,
2017     2016
Net income attributable to Wynn Resorts, Limited $ 100,816 $ 75,221
Net income attributable to noncontrolling interests 31,709 30,571
Pre-opening expenses 5,779 33,769
Depreciation and amortization 139,820 77,971
Property charges and other 3,036 1,521
Corporate expense and other 20,767 18,183
Stock-based compensation 8,207 10,511
Interest income (6,471 ) (3,479 )
Interest expense, net of amounts capitalized 98,262 44,772
Change in interest rate swap fair value 771 1,825
Change in Redemption Note fair value 15,847 5,003
Other expenses 6,106 483
Provision for income taxes 2,890   3,918  
Adjusted Property EBITDA $ 427,539   $ 300,269  
 
 

WYNN RESORTS, LIMITED AND SUBSIDIARIES

SUPPLEMENTAL DATA SCHEDULE

(dollars in thousands, except for win per unit per day, ADR and REVPAR)

(unaudited)

 

   
Three Months Ended March 31,
2017     2016
Macau Operations:
Wynn Macau:
VIP:
Average number of table games 87 189
VIP turnover $ 13,284,764 $ 13,469,939
VIP table games win $ 438,912 $ 378,652
VIP table games win as a % of turnover 3.30 % 2.81 %
Table games win per unit per day (1) $ 56,041 $ 21,967
Mass market:
Average number of table games 204 245
Table drop (2) $ 1,136,896 $ 1,210,100
Table games win $ 212,905 $ 247,500
Table games win % 18.7 % 20.5 %
Table games win per unit per day (1) $ 11,604 $ 11,092
Average number of slot machines 886 781
Slot machine handle $ 856,683 $ 1,096,337
Slot machine win $ 38,554 $ 50,440
Slot machine win per unit per day (3) $ 484 $ 710
Room statistics:
Occupancy 95.7 % 94.8 %
ADR (4) $ 265 $ 324
REVPAR (5) $ 254 $ 307
 
Wynn Palace (6):
VIP:
Average number of table games 91
VIP turnover $ 11,041,682 $
VIP table games win $ 334,742 $
VIP table games win as a % of turnover 3.03 % %
Table games win per unit per day (1) $ 40,797 $
Mass market:
Average number of table games 211
Table drop (2) $ 770,018 $
Table games win $ 167,627 $
Table games win % 21.8 % %
Table games win per unit per day (1) $ 8,840 $
Average number of slot machines 997
Slot machine handle $ 657,579 $
Slot machine win $ 33,933 $
Slot machine win per unit per day (3) $ 378 $
Room statistics:
Occupancy 95.6 % %
ADR (4) $ 258 $
REVPAR (5) $ 246 $
 
 

WYNN RESORTS, LIMITED AND SUBSIDIARIES

SUPPLEMENTAL DATA SCHEDULE

(dollars in thousands, except for win per unit per day, ADR and REVPAR)

(continued) (unaudited)

   
Three Months Ended March 31,
2017     2016
Las Vegas Operations:
Average number of table games 236 237
Table drop (2) $ 458,596 $ 475,162
Table games win $ 130,846 $ 125,046
Table games win % 28.5 % 26.3 %
Table games win per unit per day (1) $ 6,149 $ 5,792
Average number of slot machines 1,906 1,889
Slot machine handle $ 765,914 $ 717,460
Slot machine win $ 49,718 $ 49,584
Slot machine win per unit per day (3) $ 290 $ 289
Room statistics:
Occupancy 85.5 % 81.7 %
ADR (4) $ 315 $ 298
REVPAR (5) $ 269 $ 243



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