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Wynn Resorts, Limited Reports Third Quarter 2017 Results

Wynn Resorts, Limited (Nasdaq: WYNN) yesterday reported financial results for the third quarter ended September 30, 2017.

Net revenues were $1.61 billion for the third quarter of 2017, an increase of 45.3%, or $502.5 million, from $1.11 billion for the same period of 2016. The increase was the result of an increase of $390.7 million from Wynn Palace, which opened in the third quarter of 2016, and increases of $79.3 million and $32.5 million from Wynn Macau and our Las Vegas Operations, respectively.

On a U.S. generally accepted accounting principles (“GAAP”) basis, net income attributable to Wynn Resorts, Limited was $79.8 million, or $0.78 per diluted share, for the third quarter of 2017, compared to a net loss attributable to Wynn Resorts, Limited of $17.4 million, or $0.17 per diluted share, for the same period of 2016. The increase in net income attributable to Wynn Resorts, Limited was primarily the result of a full quarter of income from Wynn Palace and increased operating income from Wynn Macau and Wynn Las Vegas, partially offset by a loss on extinguishment of debt, an increase in net income attributable to noncontrolling interests and an increase in property charges and other. Property charges and other during the third quarter of 2017 included $19.1 million of estimated costs primarily related to property damage caused by a typhoon that impacted Macau during the quarter. Adjusted net income attributable to Wynn Resorts, Limited (1) was $155.8 million, or $1.52 per diluted share, for the third quarter of 2017, compared to $75.5 million, or $0.74 per diluted share, for the same period of 2016.

Adjusted Property EBITDA (2) was $473.0 million for the third quarter of 2017, an increase of 54.8%, or $167.5 million, from $305.4 million for the same period of 2016, the result of increases of $112.7 million, $32.2 million and $22.6 million from Wynn Palace, Wynn Macau and our Las Vegas Operations, respectively.

Wynn Resorts, Limited also announced today that the Company has approved a cash dividend of $0.50 per share, payable on November 28, 2017 to stockholders of record as of November 16, 2017.

Wynn Macau

Net revenues from Wynn Macau were $597.4 million for the third quarter of 2017, a 15.3% increase from $518.1 million for the same period of 2016. Adjusted Property EBITDA from Wynn Macau was $183.2 million for the third quarter of 2017, a 21.3% increase from $151.0 million for the same period of 2016.

Casino revenues from Wynn Macau were $567.7 million for the third quarter of 2017, a 16.2% increase from $488.3 million for the same period of 2016. Table games turnover in VIP operations was $13.37 billion, a 22.2% increase from $10.94 billion for the third quarter of 2016. VIP table games win as a percentage of turnover (calculated before commissions) was 3.37%, above the expected range of 2.7% to 3.0% and the 3.34% experienced in the third quarter of 2016. Table drop in mass market operations was $1.07 billion, a 3.2% decrease from $1.11 billion for the third quarter of 2016. Table games win in mass market operations was $216.4 million, a 5.5% increase from $205.2 million for the third quarter of 2016. Table games win percentage in mass market operations was 20.2%, compared to 18.6% experienced in the third quarter of 2016. Slot machine handle was $864.6 million, a 26.9% increase from $681.6 million for the third quarter of 2016, while slot machine win increased 21.1% to $35.5 million.

Non-casino revenues before promotional allowances from Wynn Macau were $62.2 million for the third quarter of 2017, a 2.3% decrease from $63.7 million for the same period of 2016. Room revenues decreased 7.9%, to $24.1 million for the third quarter of 2017, from $26.2 million for the same period of 2016. Average daily rate (“ADR”) was $246, an 8.9% decrease from $270 for the third quarter of 2016. Occupancy increased to 97.3% for the third quarter of 2017, from 95.1% for the same period of 2016. Revenue per available room (“REVPAR”) was $240, a 6.6% decrease from $257 for the third quarter of 2016.

Wynn Palace

The reported financial results for the third quarter of 2016 include 40 days of operations of Wynn Palace, which opened on August 22, 2016.

Net revenues from Wynn Palace were $555.3 million for the third quarter of 2017, compared to $164.6 million for the same period of 2016. Adjusted Property EBITDA from Wynn Palace was $138.2 million for the third quarter of 2017, compared to $25.5 million for the same period of 2016.

Casino revenues from Wynn Palace were $514.5 million for the third quarter of 2017, compared to $146.7 million for the same period of 2016. Table games turnover in VIP operations was $13.69 billion, compared to $4.15 billion for the third quarter of 2016. VIP table games win as a percentage of turnover was 2.99%, within the expected range of 2.7% to 3.0% and above the 2.90% experienced in the third quarter of 2016. Table drop in mass market operations was $866.6 million, compared to $275.9 million for the third quarter of 2016. Table games win in mass market operations was $194.3 million, compared to $51.5 million for the third quarter of 2016. Table games win percentage in mass market operations was 22.4%, compared to 18.7% experienced in the third quarter of 2016. Slot machine handle was $817.5 million, compared to $204.5 million for the third quarter of 2016, while slot machine win increased from $12.6 million to $42.0 million in the third quarter of 2017.

Non-casino revenues before promotional allowances from Wynn Palace were $79.4 million for the third quarter of 2017, compared to $33.9 million for the same period of 2016. Room revenues were $32.9 million for the third quarter of 2017, compared to $14.2 million for the same period of 2016. ADR was $219, a 23.7% decrease from $287 for the third quarter of 2016. Occupancy increased to 96.1% for the third quarter of 2017, from 70.8% for the same period of 2016. REVPAR was $211, a 3.9% increase from $203 for the third quarter of 2016.

Las Vegas Operations

Net revenues from our Las Vegas Operations were $459.6 million for the third quarter of 2017, a 7.6% increase from $427.1 million for the same period of 2016. Adjusted Property EBITDA from our Las Vegas Operations was $151.5 million, a 17.6% increase from $128.9 million for the third quarter of 2016.

Casino revenues from our Las Vegas Operations were $174.4 million for the third quarter of 2017, a 13.9% increase from $153.2 million for the same period of 2016. Table games drop was $496.2 million, a 2.7% increase from $483.4 million for the third quarter of 2016. Table games win was $132.2 million, a 10.8% increase from $119.4 million for the third quarter of 2016. Table games win percentage was 26.6%, above the property’s expected range of 21% to 25% and the 24.7% experienced in the third quarter of 2016. Slot machine handle was $819.5 million, a 0.1% increase from $818.7 million for the third quarter of 2016, while slot machine win increased 13.6% to $59.6 million.

Non-casino revenues before promotional allowances from our Las Vegas Operations were $329.8 million for the third quarter of 2017, a 4.3% increase from $316.3 million for the same period of 2016. Room revenues increased 5.3%, to $118.1 million for the third quarter of 2017, from $112.2 million for the same period of 2016. ADR was $299, a 3.8% increase from $288 for the third quarter of 2016. Occupancy increased to 91.4% for the third quarter of 2017, from the 90.0% experienced in the same period of 2016. REVPAR was $273, a 5.4% increase from $259 for the third quarter of 2016. Food and beverage revenues increased 6.6%, to $154.8 million for the third quarter of 2017, compared to the same period of 2016. Entertainment, retail and other revenues decreased 3.3%, to $57.0 million for the third 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 September 30, 2017, we have incurred $935.6 million in total project costs. We expect to open Wynn Boston Harbor in mid-2019.

Balance Sheet

During the quarter, Wynn Macau, Limited completed a cash tender offer for $946.4 million principal amount of the $1.35 billion 5 1/4% Senior Notes due 2021 (the “2021 Notes”) and on October 20, 2017 redeemed the remaining untendered $403.6 million principal amount. In connection with these transactions, Wynn Macau, Limited issued $600 million 4 7/8% Senior Notes due 2024 and $750 million 5 1/2% Senior Notes due 2027, and used the net proceeds to cover the majority of the cost of extinguishing the 2021 Notes. As a result of these transactions, the Company recorded a $20.8 million loss on extinguishment of debt during the third quarter of 2017.

Our cash and cash equivalents, restricted cash and investment securities at September 30, 2017 were $3.26 billion and included $403.6 million that was used to redeem the remaining principal amount of the untendered 2021 Notes on October 20, 2017.

Total debt outstanding at the end of the quarter was $10.18 billion, including $4.15 billion of Macau related debt, $3.16 billion of Wynn Las Vegas debt and $2.87 billion at the parent company and other. Our Macau related debt at the end of the quarter includes the $403.6 million principal amount of untendered 2021 Notes that was redeemed on October 20, 2017.

           

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 
Three Months Ended September 30, Nine Months Ended September 30,
2017       2016 2017       2016
Operating revenues:
Casino $ 1,256,602 $ 788,219 $ 3,574,059 $ 2,263,608
Rooms 175,108 152,608 531,558 431,047
Food and beverage 190,854 167,997 537,807 469,072
Entertainment, retail and other 105,500   93,230   310,636   257,256  
Gross revenues 1,728,064 1,202,054 4,954,060 3,420,983
Less: promotional allowances (115,733 ) (92,232 ) (336,788 ) (255,119 )
Net revenues 1,612,331   1,109,822   4,617,272   3,165,864  
Operating expenses:
Casino 799,978 505,620 2,303,435 1,428,532
Rooms 44,070 40,188 134,394 115,937
Food and beverage 113,452 109,333 323,840 294,480
Entertainment, retail and other 44,159 40,153 129,986 116,126
General and administrative 178,506 144,206 502,637 381,156
(Benefit) provision for doubtful accounts 1,656 (2,368 ) (4,593 ) 816
Pre-opening 6,908 70,778 19,445 150,496
Depreciation and amortization 137,982 106,467 415,488 264,187
Property charges and other 28,293   18,514   38,494   31,366  
Total operating expenses 1,355,004   1,032,891   3,863,126   2,783,096  
Operating income 257,327   76,931   754,146   382,768  
Other income (expense):
Interest income 8,447 3,678 21,998 9,940
Interest expense, net of amounts capitalized (95,874 ) (79,669 ) (291,875 ) (193,698 )
Change in interest rate swap fair value (2 ) 1,168 (1,056 ) (1,693 )
Change in Redemption Note fair value (41,718 ) (22,218 ) (69,982 ) (19,239 )
Loss on extinguishment of debt (20,774 ) (43,061 )
Equity in income from unconsolidated affiliates 16
Other (1,894 ) 899   (19,840 ) (1,046 )
Other income (expense), net (151,815 ) (96,142 ) (403,816 ) (205,720 )
Income (loss) before income taxes 105,512 (19,211 ) 350,330 177,048
Benefit (provision) for income taxes 457   (120 ) (5,040 ) (1,145 )
Net income (loss) 105,969 (19,331 ) 345,290 175,903
Less: net (income) loss attributable to noncontrolling interests (26,202 ) 1,894   (89,791 ) (47,728 )
Net income (loss) attributable to Wynn Resorts, Limited $ 79,767   $ (17,437 ) $ 255,499   $ 128,175  
Basic and diluted income (loss) per common share:
Net income (loss) attributable to Wynn Resorts, Limited:
Basic $ 0.78 $ (0.17 ) $ 2.51 $ 1.26
Diluted $ 0.78 $ (0.17 ) $ 2.49 $ 1.26
Weighted average common shares outstanding:
Basic 102,173 101,439 101,960 101,423
Diluted 102,794 101,439 102,460 101,835
Dividends declared per common share: $ 0.50 $ 0.50 $ 1.50 $ 1.50
 
 
           

WYNN RESORTS, LIMITED AND SUBSIDIARIES

RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO WYNN RESORTS, LIMITED

TO ADJUSTED NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED

(in thousands, except per share data)

(unaudited)

 
Three Months Ended September 30, Nine Months Ended September 30,
2017       2016 2017       2016
Net income (loss) attributable to Wynn Resorts, Limited $ 79,767 $ (17,437 ) $ 255,499 $ 128,175
Pre-opening expenses 6,908 70,778 19,445 150,496
Property charges and other 28,293 18,514 38,494 31,366
Change in interest rate swap fair value 2 (1,168 ) 1,056 1,693
Change in Redemption Note fair value 41,718 22,218 69,982 19,239
Loss on extinguishment of debt 20,774 43,061
Foreign currency remeasurement (gain) loss 1,894 (899 ) 19,840 1,046
Income tax impact on adjustments (9,983 ) 1,681 (11,753 ) 1,598
Noncontrolling interests impact on adjustments (13,556 ) (18,153 ) (19,483 ) (38,472 )
Adjusted net income attributable to Wynn Resorts, Limited $ 155,817   $ 75,534   $ 416,141   $ 295,141  
Adjusted net income attributable to Wynn Resorts, Limited per diluted share $ 1.52   $ 0.74   $ 4.06   $ 2.90  
 
Weighted average common shares outstanding – diluted 102,794 101,917 102,460 101,835
 
 
     

WYNN RESORTS, LIMITED AND SUBSIDIARIES

RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA

(in thousands)

(unaudited)

 
Three Months Ended September 30, 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 $ 124,566 $ $ 24,734 $ 6,396 $ 23,099 $ 2,384 $ 2,040 $ 183,219
Wynn Palace 28,432 65,062 19,493 21,769 2,198 1,274 138,228
Other Macau (6,551 )   1,115   157     5,111   168  
Total Macau Operations 146,447 90,911 26,046 44,868 9,693 3,482 321,447
Las Vegas Operations 76,785 237 44,549 2,247 22,513 4,740 438 151,509
Corporate and Other 34,095   6,671   2,522     (67,381 ) 17,510   6,583  
Total $ 257,327   $ 6,908   $ 137,982   $ 28,293   $   $ 31,943   $ 10,503   $ 472,956
 
 
Three Months Ended September 30, 2016

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 $ 99,461 $ $ 24,687 $ 1,758 $ 20,018 $ 2,751 $ 2,334 $ 151,009
Wynn Palace (79,226 ) 65,548 31,561 8 6,554 847 255 25,547
Other Macau (4,884 )   902       5,186   (1,204 )
Total Macau Operations 15,351 65,548 57,150 1,766 26,572 8,784 1,385 176,556
Las Vegas Operations 46,960 64 46,403 16,748 13,441 4,634 629 128,879
Corporate and Other 14,620   5,166   2,914     (40,013 ) 11,279   6,034  
Total $ 76,931   $ 70,778   $ 106,467   $ 18,514   $   $ 24,697   $ 8,048   $ 305,435
 
 
     

WYNN RESORTS, LIMITED AND SUBSIDIARIES

RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA

(in thousands)

(unaudited)

 
Nine Months Ended September 30, 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 $ 406,418 $ $ 74,043 $ 7,932 $ 72,727 $ 7,586 $ 6,017 $ 574,723
Wynn Palace 56,443 193,749 20,253 56,520 6,744 3,778 337,487
Other Macau (12,515 )   3,376   163     8,480   496  
Total Macau Operations 450,346 271,168 28,348 129,247 22,810 10,291 912,210
Las Vegas Operations 205,119 748 136,561 9,657 47,246 17,583 1,382 418,296
Corporate and Other 98,681   18,697   7,759   489   (176,493 ) 33,250   17,617  
Total $ 754,146   $ 19,445   $ 415,488   $ 38,494   $   $ 73,643   $ 29,290   $ 1,330,506
 
 
Nine Months Ended September 30, 2016

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 $ 369,490 $ $ 74,530 $ 4,206 $ 67,154 $ 9,196 $ 8,067 $ 532,643
Wynn Palace (154,602 ) 131,144 41,162 187 6,554 847 255 25,547
Other Macau (14,022 )   2,379       10,667   976  
Total Macau Operations 200,866 131,144 118,071 4,393 73,708 20,710 9,298 558,190
Las Vegas Operations 138,333 2,199 137,349 26,989 38,963 14,324 2,036 360,193
Corporate and Other 43,569   17,153   8,767     (112,671 ) 25,660   17,522  
Total $ 382,768   $ 150,496   $ 264,187   $ 31,382   $   $ 60,694   $ 28,856   $ 918,383
 
 
           

WYNN RESORTS, LIMITED AND SUBSIDIARIES

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

(in thousands)

(unaudited)

 
Three Months Ended September 30, Nine Months Ended September 30,
2017       2016 2017       2016
Net income (loss) attributable to Wynn Resorts, Limited $ 79,767 $ (17,437 ) $ 255,499 $ 128,175
Net income (loss) attributable to noncontrolling interests 26,202 (1,894 ) 89,791 47,728
Pre-opening expenses 6,908 70,778 19,445 150,496
Depreciation and amortization 137,982 106,467 415,488 264,187
Property charges and other 28,293 18,514 38,494 31,366
Corporate expense and other 31,943 24,697 73,643 60,694
Stock-based compensation 10,503 8,048 29,290 28,856
Interest income (8,447 ) (3,678 ) (21,998 ) (9,940 )
Interest expense, net of amounts capitalized 95,874 79,669 291,875 193,698
Change in interest rate swap fair value 2 (1,168 ) 1,056 1,693
Change in Redemption Note fair value 41,718 22,218 69,982 19,239
Loss on extinguishment of debt 20,774 43,061
Other expenses 1,894 (899 ) 19,840 1,046
(Benefit) provision for income taxes (457 ) 120   5,040   1,145  
Adjusted Property EBITDA $ 472,956   $ 305,435   $ 1,330,506   $ 918,383  
 
 
           

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 September 30, Nine Months Ended September 30,
2017       2016 2017       2016
Macau Operations:
Wynn Macau:
VIP:
Average number of table games 96 142 93 171
VIP turnover $ 13,373,060 $ 10,941,100 $ 42,680,904 $ 36,252,239
VIP table games win $ 451,136 $ 365,047 $ 1,456,139 $ 1,214,675
VIP table games win as a % of turnover 3.37 % 3.34 % 3.41 % 3.35 %
Table games win per unit per day (1) $ 51,324 $ 28,003 $ 57,095 $ 25,871
Mass market:
Average number of table games 206 201 205 228
Table drop (2) $ 1,070,119 $ 1,105,938 $ 3,274,733 $ 3,489,272
Table games win $ 216,439 $ 205,179 $ 650,911 $ 687,876
Table games win % 20.2 % 18.6 % 19.9 % 19.7 %
Table games win per unit per day (1) $ 11,408 $ 11,089 $ 11,637 $ 11,008
Average number of slot machines 918 804 907 787
Slot machine handle $ 864,553 $ 681,552 $ 2,589,125 $ 2,584,342
Slot machine win $ 35,522 $ 29,327 $ 113,607 $ 113,098
Slot machine win per unit per day (3) $ 421 $ 396 $ 459 $ 524
Room statistics:
Occupancy 97.3 % 95.1 % 96.9 % 93.8 %
ADR (4) $ 246 $ 270 $ 256 $ 304
REVPAR (5) $ 240 $ 257 $ 248 $ 286
 
Wynn Palace (6):
VIP:
Average number of table games 106 72 101 72
VIP turnover $ 13,694,250 $ 4,150,448 $ 36,340,603 $ 4,150,448
VIP table games win $ 409,648 $ 120,455 $ 997,031 $ 120,455
VIP table games win as a % of turnover 2.99 % 2.90 % 2.74 % 2.90 %
Table games win per unit per day (1) $ 42,015 $ 42,117 $ 36,290 $ 42,117
Mass market:
Average number of table games 201 274 205 274
Table drop (2) $ 866,637 $ 275,898 $ 2,365,661 $ 275,898
Table games win $ 194,294 $ 51,525 $ 530,668 $ 51,525
Table games win % 22.4 % 18.7 % 22.4 % 18.7 %
Table games win per unit per day (1) $ 10,491 $ 4,702 $ 9,507 $ 4,702
Average number of slot machines 1,100 1,132 1,041 1,132
Slot machine handle $ 817,543 $ 204,515 $ 2,132,973 $ 204,515
Slot machine win $ 41,965 $ 12,610 $ 110,712 $ 12,610
Slot machine win per unit per day (3) $ 415 $ 279 $ 390 $ 279
Room statistics:
Occupancy 96.1 % 70.8 % 96.0 % 70.8 %
ADR (4) $ 219 $ 287 $ 237 $ 287
REVPAR (5) $ 211 $ 203 $ 227 $ 203
 
 
           

WYNN RESORTS, LIMITED AND SUBSIDIARIES

SUPPLEMENTAL DATA SCHEDULE

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

(unaudited)

(continued)

 
Three Months Ended September 30, Nine Months Ended September 30,
2017       2016 2017       2016
Las Vegas Operations:
Average number of table games 237 234 236 236
Table drop (2) $ 496,233 $ 483,382 $ 1,374,167 $ 1,385,963
Table games win $ 132,227 $ 119,388 $ 364,374 $ 340,572
Table games win % 26.6 % 24.7 % 26.5 % 24.6 %
Table games win per unit per day (1) $ 6,065 $ 5,552 $ 5,657 $ 5,264
Average number of slot machines 1,849 1,890 1,864 1,888
Slot machine handle $ 819,462 $ 818,719 $ 2,350,162 $ 2,286,559
Slot machine win $ 59,605 $ 52,460 $ 162,340 $ 150,786
Slot machine win per unit per day (3) $ 350 $ 302 $ 319 $ 291
Room statistics:
Occupancy 91.4 % 90.0 % 88.5 % 85.7 %
ADR (4) $ 299 $ 288 $ 305 $ 298
REVPAR (5) $ 273 $ 259 $ 270 $ 255
 

Posted by on October 27, 2017.

Categories: Financial

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