• 25-JUL-2017

Wynn Resorts, Limited Reports Second Quarter 2017 Results

Wynn Macau Exterior by Barbara Kraft
LAS VEGAS, July 25, 2017 — Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the second quarter ended June 30, 2017.

Net revenues were $1.53 billion for the second quarter of 2017, an increase of 44.5%, or $470.9 million, from $1.06 billion for the same period of 2016. The increase was the result of $414.7 million from Wynn Palace, which opened in the third quarter of 2016, and increases of $43.4 million and $12.9 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 $74.9 million, or $0.73 per diluted share, for the second quarter of 2017, an increase of 6.4%, or $4.5 million, from $70.4 million, or $0.69 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, partially offset by an increase in interest expense as the Company is no longer capitalizing interest on Wynn Palace, losses on extinguishment of debt and an increase in the Redemption Note fair value. Adjusted net income attributable to Wynn Resorts, Limited (1) was $120.9 million, or $1.18 per diluted share, for the second quarter of 2017, compared to $108.7 million, or $1.07 per diluted share, for the same period of 2016.

Adjusted Property EBITDA (2) was $430.0 million for the second quarter of 2017, an increase of 37.5%, or $117.3 million, from $312.7 million for the same period of 2016, primarily as a result of $87.4 million from Wynn Palace and increases of $20.0 million and $9.9 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 $0.50 per share, payable on August 22, 2017 to stockholders of record as of August 10, 2017.

Wynn Macau

Net revenues from Wynn Macau were $682.7 million for the second quarter of 2017, a 6.8% increase from $639.3 million for the same period of 2016. Adjusted Property EBITDA from Wynn Macau was $210.4 million for the second quarter of 2017, a 10.5% increase from $190.4 million for the same period of 2016.

Casino revenues from Wynn Macau were $654.7 million for the second quarter of 2017, a 7.4% increase from $609.8 million for the same period of 2016. Table games turnover in VIP operations was $16.02 billion, a 35.3% increase from $11.84 billion for the second quarter of 2016. VIP table games win as a percentage of turnover (calculated before commissions) was 3.53%, above the expected range of 2.7% to 3.0% and below the 3.98% experienced in the second quarter of 2016. Table drop in mass market operations was $1.07 billion, a 9.0% decrease from $1.17 billion for the second quarter of 2016. Table games win in mass market operations was $221.6 million, a 5.8% decrease from $235.2 million for the second quarter of 2016. Table games win percentage in mass market operations was 20.8%, above the 20.0% experienced in the second quarter of 2016. Slot machine handle was $867.9 million, a 7.6% increase from $806.5 million for the second quarter of 2016, while slot machine win increased 18.6% to $39.5 million.


Non-casino revenues before promotional allowances from Wynn Macau were $60.8 million for the second quarter of 2017, a 10.8% decrease from $68.1 million for the same period of 2016. Room revenues decreased 12.4%, to $25.7 million for the second quarter of 2017, from $29.3 million for the same period of 2016. Average daily rate ("ADR") was $258, a 19.6% decrease from $321 for the second quarter of 2016. Occupancy increased to 97.5% for the second quarter of 2017, from 91.5% for the same period of 2016. Revenue per available room ("REVPAR") was $252, a 14.3% decrease from $294 for the second quarter of 2016.

Wynn Palace

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

Net revenues and Adjusted Property EBITDA from Wynn Palace were $414.7 million and $87.4 million, respectively, for the second quarter of 2017.

Casino revenues from Wynn Palace were $372.2 million for the second quarter of 2017. Table games turnover in VIP operations was $11.60 billion and table games win as a percentage of turnover (calculated before commissions) was 2.18%, below the expected range of 2.7% to 3.0%. Table drop in mass market operations was $729.0 million, table games win in mass market operations was $168.7 million and table games win percentage was 23.1%. Slot machine handle was $657.9 million and slot machine win was $34.8 million for the second quarter of 2017.

Non-casino revenues before promotional allowances from Wynn Palace were $79.5 million for the second quarter of 2017. Room revenues were $35.4 million with an ADR of $232, occupancy of 96.2% and REVPAR of $224.

Las Vegas Operations

Net revenues from our Las Vegas Operations were $431.9 million for the second quarter of 2017, a 3.1% increase from $419.1 million for the same period of 2016. Adjusted Property EBITDA from our Las Vegas Operations was $132.2 million, an 8.1% increase from $122.3 million for the second quarter of 2016.

Casino revenues from our Las Vegas Operations were $139.3 million for the second quarter of 2017, a 4.8% increase from $132.9 million for the same period of 2016. Table games drop was $419.3 million, a 1.9% decrease from $427.4 million for the second quarter of 2016. Table games win was $101.3 million, a 5.4% increase from $96.1 million for the second quarter of 2016. Table games win percentage was 24.2%, within the property’s expected range of 21% to 25% and above the 22.5% experienced in the second quarter of 2016. Slot machine handle was $764.8 million, a 1.9% increase from $750.4 million for the second quarter of 2016, while slot machine win increased 8.8% to $53.0 million.

Non-casino revenues before promotional allowances from our Las Vegas Operations were $332.2 million for the second quarter of 2017, a 1.5% increase from $327.4 million for the same period of 2016. Room revenues increased 1.4%, to $115.1 million for the second quarter of 2017, from $113.6 million for the same period of 2016. ADR was $302, a 1.9% decrease from $308 for the second quarter of 2016. Occupancy increased to 88.7% for the second quarter of 2017, from the 85.3% experienced in the same period of 2016. REVPAR was $268, a 1.9% increase from $263 for the second quarter of 2016. Food and beverage revenues increased 4.0%, to $160.1 million for the second quarter of 2017, compared to the same period of 2016. Entertainment, retail and other revenues decreased 4.9%, to $57.0 million for the second 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 June 30, 2017, we have incurred $771.8 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 June 30, 2017 were $2.80 billion.

Total debt outstanding at the end of the quarter was $9.81 billion, including $3.82 billion of Macau related debt, $3.16 billion of Wynn Las Vegas debt and $2.83 billion at the parent company and other.

During the quarter, Wynn Las Vegas, LLC completed a cash tender offer and subsequent redemption of the $900 million 5 3/8% First Mortgage Notes due 2022 (the "2022 Notes"). In connection with this transaction, Wynn Las Vegas, LLC issued $900 million 5 1/4% Senior Notes due 2027 and used the net proceeds to cover the cost of extinguishing the 2022 Notes. As a result of these transactions, the Company recorded a $20.8 million loss on extinguishment of debt.

Conference Call Information

The Company will hold a conference call to discuss its results including the results of Wynn Las Vegas, LLC on July 25, 2017 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 14, 2017, the Company will make Wynn Las Vegas, LLC financial information for the quarter ended June
30, 2017 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, our dependence on Stephen A. Wynn, 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, extensive regulation of our business, pending or future legal proceedings, 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, 2016 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 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 r eported 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.