Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial
results for the first quarter ended March 31, 2014.
Net revenues for the first quarter of 2014 were $1,513.6
million, compared to $1,378.7 million in the first quarter of 2013.
The growth was driven by a 14.2% revenue increase from our Macau
operations, modestly offset by a 1.5% decline in net revenues from
our Las Vegas operations. Adjusted property EBITDA (1) was
$494.6 million for the first quarter of 2014, a 9.7% increase from
$451.1 million in the first quarter of 2013.
On a US GAAP basis, net income attributable to Wynn Resorts
for the first quarter of 2014 was $226.9 million, or $2.22 per
diluted share, compared to net income attributable to Wynn Resorts
of $203.0 million, or $2.00 per diluted share, in the first quarter
of 2013.
Adjusted net income attributable to Wynn Resorts (2) in the
first quarter of 2014 was $236.7 million, or $2.32 per diluted
share (adjusted EPS), compared to an adjusted net income
attributable to Wynn Resorts of $205.6 million, or $2.03 per
diluted share, in the first quarter of 2013.
Wynn Resorts also announced today that the Company has approved
a cash dividend for the quarter of $1.25 per common
share. This dividend will be payable on May 29, 2014, to
stockholders of record on May 15, 2014.
Macau Operations
In the first quarter of 2014, net revenues were $1,132.7
million, a 14.2% increase from the $992.1 million generated in the
first quarter of 2013. Adjusted property EBITDA in the first
quarter of 2014 reached a record $384.3 million, up 16.2% from
$330.7 million in the first quarter of 2013.
Table games results in Macau are segregated into two distinct
reporting categories, the VIP segment and the mass market
segment.
Table games turnover in the VIP segment was $36.0 billion for
the first quarter of 2014, a 26.7% increase from $28.4 billion in
the first quarter of 2013. VIP table games win as a percentage of
turnover (calculated before commissions) for the quarter was 2.79%,
within the expected range of 2.7% to 3.0% and significantly below
the 3.14% experienced in the first quarter of 2013.
Table games win in the mass market segment increased by 23.7% to
$300.7 million in the first quarter of 2014. Mass market table
games win per unit per day increased by 19.1% to $15,695 from
$13,180 in the first quarter of 2013. Drop in the mass market
segment was $692.5 million in the first quarter of 2014, up 1.1%
from the 2013 first quarter, while the segment’s win percentage of
43.4% compares to 35.5% in last year’s first quarter and
sequentially to 42.3% in the fourth quarter of 2013. Note that
customers purchase mass market gaming chips at either the gaming
tables or the casino cage. Chips purchased at the casino cage are
excluded from table games drop and will increase the expected win
percentage. With the increased purchases at the casino cage, we
believe the relevant indicator of volumes in the mass market
segment should be table games win.
Slot machine handle of $1.4 billion for the first quarter of
2014 was 25.3% above the prior-year quarter, and slot win increased
13.1% compared to the prior-year period. Win per unit per day was
13.3% higher at $917, compared to $809 in the first quarter of
2013.
For the first quarter of 2014, we achieved an average daily rate
(ADR) of $338, 7.3% above the $315 reported in the 2013 first
quarter. Occupancy at Wynn Macau of 98.1% compares to 93.8% in the
prior-year period, and revenue per available room (REVPAR) rose
11.8% to $331 in the 2014 quarter from $296 in last year’s first
quarter. Gross non-casino revenues increased 7.3% during the
quarter to $113.0 million.
Wynn Palace Project in Macau
The Company is currently constructing Wynn Palace, a fully
integrated resort containing a 1,700-room hotel, performance lake,
meeting space, casino, spa, retail offerings, and food and beverage
outlets on Cotai in Macau. In July 2013, we signed a $2.6 billion
guaranteed maximum price (GMP) contract for the project’s
construction. The total project budget, including construction
costs, capitalized interest, pre-opening expenses, land costs and
financing fees, is $4.0 billion. We expect to open our resort on
Cotai in the first half of 2016.
During the first quarter of 2014, we invested approximately
$163.1 million in our Cotai project, taking the total investment to
date to $866.7 million.
Las Vegas Operations
For the quarter ended March 31, 2014, net revenues were
$380.9 million, a 1.5% decrease from $386.6 million in the first
quarter of 2013. Adjusted property EBITDA was $110.3 million, down
8.4% from $120.4 million generated in the comparable period in
2013, mainly the result of a 6.0 percentage point decline in table
games win percentage.
Net casino revenues in the first quarter of 2014 were $155.3
million, an 11.9% decrease from the first quarter of 2013. Table
games drop of $647.4 million was down 3.2% compared to $668.9
million in the 2013 quarter. Table games win percentage was 20.7%,
below both the property’s expected range of 21% to 24% and the
26.7% reported in the 2013 quarter. Slot machine handle of $743.8
million was 6.8% above the $696.6 million in the comparable period
of 2013, and net slot win was up 7.6%.
Room revenues were up 12.6% to $103.1 million during the
quarter, versus $91.5 million in the first quarter of 2013. Average
daily rate (ADR) increased 6.2% to $275 from $259, and occupancy
increased to 87.8% from 82.8% in the first quarter of 2013. Revenue
per available room (REVPAR) was $241 in the 2014 first quarter,
12.6% above the $214 reported in the prior-year quarter.
Food and beverage revenues in the first quarter of 2014 were
$115.0 million, approximately flat from the 2013 first quarter.
Retail, entertainment and other revenues improved 9.4% from last
year’s quarter to $54.1 million, driven by increases from Wynn Las
Vegas retail shops, spa and other event services.
Balance Sheet and Other
Our total cash and investments balance at March 31, 2014
was $3.5 billion. Total debt outstanding at the end of the quarter
was $7.3 billion, including $3.1 billion of Wynn Las Vegas debt,
$2.3 billion of Wynn Macau debt and $1.9 billion at the parent
company. Note that, during the 2014 first quarter, Wynn Macau,
Limited issued $750.0 million of new 5.25% senior notes due in
2021.
Conference Call Information
The Company will hold a conference call to discuss its results
on May 1, 2014 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.
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 existing
management, results of regulatory or enforcement actions and
probity investigations, pending or future legal proceedings,
uncertainties over the development and success of new gaming and
resort properties, adverse tourism trends, general global
macroeconomic conditions, changes in gaming laws or regulations,
volatility and weakness in world-wide credit and financial markets,
and our substantial indebtedness and leverage. 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, 2013 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 earnings before interest,
taxes, depreciation, amortization, pre-opening costs, property
charges and other, corporate expenses, intercompany golf course and
water rights leases, 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.
(2) "Adjusted net income attributable to Wynn Resorts, Limited"
is net income before pre-opening costs, property charges and other,
and certain other non-operating income and expenses. Adjusted net
income attributable to Wynn Resorts, Limited and adjusted net
income per share attributable to Wynn Resorts, Limited (“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
attributable to Wynn Resorts, Limited and adjusted net income
attributable to Wynn Resorts, Limited per 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 attributable to
Wynn Resorts, Limited to adjusted net income attributable to Wynn
Resorts, Limited, and (ii) operating income to adjusted
property EBITDA and adjusted property EBITDA to net income
attributable to Wynn Resorts, Limited.
WYNN RESORTS, LIMITED AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(in thousands, except per share
data)
(unaudited)
Three Months Ended March 31, 2014
2013 Operating revenues: Casino $
1,226,133 $ 1,106,503 Rooms 136,476 120,480 Food and beverage
141,837 139,701 Entertainment, retail and other 106,860
101,548 Gross revenues 1,611,306 1,468,232 Less: promotional
allowances (97,693 ) (89,578 ) Net revenues 1,513,613
1,378,654 Operating costs and expenses: Casino 783,734
697,188 Rooms 35,345 33,390 Food and beverage 74,953 73,873
Entertainment, retail and other 44,535 40,326 General and
administrative 111,277 94,909 (Benefit) provision for doubtful
accounts (2,728 ) 7,004 Pre-opening costs 3,073 452 Depreciation
and amortization 76,659 92,518 Property charges and other 9,934
5,346 Total operating costs and expenses 1,136,782
1,045,006 Operating income 376,831 333,648
Other income (expense): Interest income 4,753 4,222 Interest
expense, net of capitalized interest (75,256 ) (75,377 ) Increase
in swap fair value 842 3,144 Loss on extinguishment of debt (1,529
) — Equity in income from unconsolidated affiliates 308 200 Other
(297 ) 1,165 Other income (expense), net (71,179 ) (66,646 )
Income before income taxes 305,652 267,002 (Provision) benefit for
income taxes (2,609 ) 5,142 Net income 303,043 272,144 Less:
net income attributable to noncontrolling interests (76,147 )
(69,181 ) Net income attributable to Wynn Resorts, Limited $
226,896 $ 202,963 Basic and diluted income per common
share: Net income attributable to Wynn Resorts, Limited: Basic $
2.25 $ 2.02 Diluted $ 2.22 $ 2.00 Weighted average common shares
outstanding: Basic 100,822 100,237 Diluted 102,009 101,373
Dividends declared per common share $ 1.25 $ 1.00
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, 2014
2013 Net income attributable to Wynn
Resorts, Limited $ 226,896 $ 202,963 Pre-opening costs 3,073 452
Loss on extinguishment of debt 1,529 — Increase in swap fair value
(842 ) (3,144 ) Property charges and other 9,934 5,346 Adjustment
for noncontrolling interest (3,906 ) 20 Adjusted net income
attributable to Wynn Resorts, Limited (2) $ 236,684 $
205,637 Adjusted net income attributable to Wynn Resorts,
Limited per diluted share $ 2.32 $ 2.03
WYNN RESORTS, LIMITED AND
SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO
ADJUSTED PROPERTY EBITDA
AND ADJUSTED PROPERTY EBITDA TO NET
INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED
(in thousands)
(unaudited)
Three Months Ended March 31, 2014
MacauOperations
Las VegasOperations
Corporateand Other
Total Operating income $ 284,930 $ 51,514 $
40,387 $ 376,831 Pre-opening costs 3,073 — — 3,073 Depreciation and
amortization 31,159 43,990 1,510 76,659 Property charges and other
10,180 (246 ) — 9,934 Management and royalty fees 44,755 5,719
(50,474 ) — Corporate expenses and other 8,921 8,191 6,778 23,890
Stock-based compensation 1,310 1,026 1,585 3,921 Equity in income
from unconsolidated affiliates — 94 214 308
Adjusted Property EBITDA(1) $ 384,328 $ 110,288
$ — $ 494,616
Three Months Ended
March 31, 2013
MacauOperations
Las VegasOperations
Corporateand Other
Total Operating income $ 251,526 $ 40,419 $ 41,703 $ 333,648
Pre-opening costs 452 — — 452 Depreciation and amortization 29,297
61,610 1,611 92,518 Property charges and other 2,619 2,754 (27 )
5,346 Management and royalty fees 39,196 5,795 (44,991 ) —
Corporate expenses and other 6,618 7,603 3,561 17,782 Stock-based
compensation 1,003 2,227 (2,108 ) 1,122 Equity in (loss) income
from unconsolidated affiliates — (51 ) 251 200
Adjusted Property EBITDA(1) $ 330,711 $ 120,357 $ —
$ 451,068
Three Months Ended March 31,
2014 2013 Adjusted Property EBITDA(1) $
494,616 $ 451,068 Pre-opening costs (3,073 ) (452 ) Depreciation
and amortization (76,659 ) (92,518 ) Property charges and other
(9,934 ) (5,346 ) Corporate expenses and other (23,890 ) (17,782 )
Stock-based compensation (3,921 ) (1,122 ) Interest income 4,753
4,222 Interest expense, net of capitalized interest (75,256 )
(75,377 ) Increase in swap fair value 842 3,144 Loss on
extinguishment of debt (1,529 ) — Other (297 ) 1,165 (Provision)
benefit for income taxes (2,609 ) 5,142 Net income 303,043
272,144 Less: Net income attributable to noncontrolling interests
(76,147 ) (69,181 ) Net income attributable to Wynn Resorts,
Limited $ 226,896 $ 202,963
WYNN RESORTS, LIMITED AND
SUBSIDIARIES
SUPPLEMENTAL DATA SCHEDULE
Three Months Ended March 31, 2014
2013 Room Statistics for Macau
operations: Occupancy % 98.1 % 93.8 % Average Daily Rate (ADR)(a) $
338 $ 315 Revenue per available room (REVPAR)(b) $ 331 $ 296 Other
information for Macau operations: Table games win per unit per
day(c) $ 29,457 $ 25,550 Slot machine win per unit per day(d) $ 917
$ 809 Average number of table games 492 494 Average number of slot
machines 842 843 Room Statistics for Las Vegas operations:
Occupancy % 87.8 % 82.8 % Average Daily Rate (ADR)(a) $ 275 $ 259
Revenue per available room (REVPAR)(b) $ 241 $ 214 Other
information for Las Vegas operations: Table games win per unit per
day(c) $ 6,419 $ 8,519 Table Win % 20.7 % 26.7 % Slot machine win
per unit per day(d) $ 271 $ 215 Average number of table games 231
233 Average number of slot machines 1,866 2,187
(a)
ADR is Average Daily Rate and is
calculated by dividing total room revenue including the retail
value of promotional allowances (less service charges, if any) by
total rooms occupied including complimentary rooms.
(b)
REVPAR is Revenue per Available Room and
is calculated by dividing total room revenue including the retail
value of promotional allowances (less service charges, if any) by
total rooms available.
(c)
Table games win per unit per day is shown
before discounts and commissions, as applicable.
(d)
Slot machine win per unit per day is
calculated as gross slot win minus progressive accruals and free
play.
Wynn Resorts, LimitedLewis Fanger, 702-770-7555Vice
Presidentinvestorrelations@wynnresorts.com
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