Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial
results for the second quarter ended June 30, 2014.
Net revenues for the second quarter of 2014 were $1,412.1
million, compared to $1,332.3 million in the second quarter of
2013. The growth was the result of a 12.5% increase in net revenues
from our Las Vegas Operations and a 3.2% net revenue increase from
our Macau Operations. Adjusted property EBITDA (1) was $467.4
million for the second quarter of 2014, a 9.8% increase from $425.7
million in the second quarter of 2013.
On a US GAAP basis, net income attributable to Wynn Resorts
for the second quarter of 2014 was $203.9 million, or $2.00 per
diluted share, compared to net income attributable to Wynn Resorts
of $129.8 million, or $1.28 per diluted share, in the second
quarter of 2013.
Adjusted net income attributable to Wynn Resorts, Limited
(2) in the second quarter of 2014 was $215.1 million, or $2.11
per diluted share (adjusted EPS), compared to an adjusted net
income attributable to Wynn Resorts of $152.9 million, or $1.51 per
diluted share, in the second 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 August 26, 2014, to
stockholders of record on August 12, 2014.
Macau Operations
In the second quarter of 2014, net revenues were $960.6 million,
a 3.2% increase from the $930.9 million generated in the second
quarter of 2013. Adjusted property EBITDA in the second quarter of
2014 rose to $307.0 million, up 5.8% from $290.1 million in the
second 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 $26.4 billion for
the second quarter of 2014, an 11.7% decrease from $29.9 billion in
the second quarter of 2013. VIP table games win as a percentage of
turnover (calculated before commissions) for the quarter was 2.93%,
within the expected range of 2.7% to 3.0% and in-line with the
2.94% experienced in the second quarter of 2013.
Table games win in the mass market segment increased by 43.3% to
$311.0 million in the second quarter of 2014. Mass market table
games win per unit per day increased by 53.0% to $17,852 from
$11,671 in the second quarter of 2013. Drop in the mass market
segment was $682.3 million in the second quarter of 2014, up 8.9%
from the 2013 second quarter, while the segment’s win percentage of
45.6% compares to 34.6% in last year’s second quarter and
sequentially to 43.4% in the first quarter of 2014. 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 $1.5 billion for the second quarter of
2014 was 24.4% above the prior-year quarter, and slot win increased
14.1% compared to the prior-year period. Win per unit per day was
59.1% higher at $1,163, compared to $731 in the second quarter of
2013.
For the second quarter of 2014, we achieved an average daily
rate (ADR) of $334, 6.4% above the $314 reported in the 2013 second
quarter. Occupancy at Wynn Macau of 98.4% compares to 95.5% in the
prior-year period, and revenue per available room (REVPAR) rose
9.7% to $329 in the 2014 quarter from $300 in last year’s second
quarter. Gross non-casino revenues increased 0.7% during the
quarter to $100.6 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 in the Cotai area of 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 second quarter of 2014, we invested approximately
$249.7 million in our Cotai project, taking the total investment to
date to $1.1 billion.
Las Vegas Operations
For the quarter ended June 30, 2014, net revenues were
$451.4 million, a 12.5% increase from $401.4 million in the second
quarter of 2013. Adjusted property EBITDA reached a quarterly
record of $160.4 million, up 18.3% from $135.7 million generated in
the comparable period in 2013, the result of both a 5.9 percentage
point increase in table games win percentage and a 7.3% increase in
room revenues.
Net casino revenues in the second quarter of 2014 were $182.5
million, a 28.0% increase from the second quarter of 2013. Table
games drop of $629.0 million was up 14.8% compared to $548.0
million in the 2013 quarter. Table games win percentage was 27.4%,
above both the property’s expected range of 21% to 24% and the
21.5% reported in the 2013 quarter. Slot machine handle of $706.9
million was 0.8% below the $712.6 million in the comparable period
of 2013, while net slot win was up 3.2% due to an increase in
hold.
Room revenues were up 7.3% to $107.9 million during the quarter,
versus $100.6 million in the second quarter of 2013. ADR increased
5.6% to $283 from $268, and occupancy improved to 88.4% from 86.9%
in the second quarter of 2013. REVPAR was $251 in the 2014 second
quarter, 7.7% above the $233 reported in the prior-year
quarter.
Food and beverage revenues in the second quarter of 2014 were
$149.1 million, up 1.8% from the 2013 second quarter. Retail,
entertainment and other revenues improved 3.1% from last year’s
quarter to $56.7 million.
Balance Sheet and Other
Our total unrestricted cash and investment securities balance at
June 30, 2014 was $3.3 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.
Conference Call Information
The Company will hold a conference call to discuss its results
on July 29, 2014 at 5:30 a.m. PT (8:30 a.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 June 30, Six months ended June
30, 2014 2013
2014 2013 Operating
revenues: Casino $ 1,091,595 $ 1,016,148 $ 2,317,728 $ 2,122,651
Rooms 141,355 129,373 277,831 249,853 Food and beverage 174,308
169,555 316,145 309,256 Entertainment, retail and other 98,635
103,046 205,495 204,594 Gross revenues
1,505,893 1,418,122 3,117,199 2,886,354 Less: promotional
allowances (93,830 ) (85,849 ) (191,523 ) (175,427 ) Net revenues
1,412,063 1,332,273 2,925,676 2,710,927
Operating costs and expenses: Casino 681,236 665,422 1,464,970
1,362,610 Rooms 37,659 33,984 73,004 67,374 Food and beverage
100,686 95,467 175,639 169,340 Entertainment, retail and other
39,878 42,956 84,413 83,282 General and administrative 128,520
132,381 239,797 227,290 Benefit for doubtful accounts (2,710 )
(11,225 ) (5,438 ) (4,221 ) Pre-opening costs 5,001 434 8,074 886
Depreciation and amortization 78,351 93,218 155,010 185,736
Property charges and other 2,100 5,612 12,034
10,958 Total operating costs and expenses 1,070,721
1,058,249 2,207,503 2,103,255 Operating income
341,342 274,024 718,173 607,672 Other
income (expense): Interest income 5,505 4,158 10,258 8,380 Interest
expense, net of capitalized interest (81,765 ) (73,764 ) (157,021 )
(149,141 ) (Decrease) increase in swap fair value (4,653 ) 13,512
(3,811 ) 16,656 Loss on extinguishment of debt (2,254 ) (26,578 )
(3,783 ) (26,578 ) Equity in income from unconsolidated affiliates
298 391 606 591 Other 693 2,097 396 3,262
Other income (expense), net (82,176 ) (80,184 ) (153,355 )
(146,830 ) Income before income taxes 259,166 193,840 564,818
460,842 (Provision) benefit for income taxes (764 ) (1,124 ) (3,373
) 4,018 Net income 258,402 192,716 561,445 464,860 Less: net
income attributable to noncontrolling interests (54,496 ) (62,931 )
(130,643 ) (132,112 ) Net income attributable to Wynn Resorts,
Limited $ 203,906 $ 129,785 $ 430,802 $
332,748 Basic and diluted income per common share: Net
income attributable to Wynn Resorts, Limited: Basic $ 2.02 $ 1.29 $
4.27 $ 3.32 Diluted $ 2.00 $ 1.28 $ 4.22 $ 3.28 Weighted average
common shares outstanding: Basic 100,915 100,484 100,869 100,361
Diluted 102,018 101,549 101,979 101,493 Dividends declared per
common share $ 1.25 $ 1.00 $ 2.50 $ 2.00
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 June 30, Six months ended June
30, 2014 2013
2014 2013 Net income
attributable to Wynn Resorts, Limited $ 203,906 $ 129,785 $ 430,802
$ 332,748 Pre-opening costs 5,001 434 8,074 886 Loss on
extinguishment of debt 2,254 26,578 3,783 26,578 Decrease
(increase) in swap fair value 4,653 (13,512 ) 3,811 (16,656 )
Property charges and other 2,100 5,612 12,034 10,958 Adjustment for
noncontrolling interest (2,772 ) 4,027 (6,678 ) 4,047
Adjusted net income attributable to Wynn Resorts, Limited (2) $
215,142 $ 152,924 $ 451,826 $ 358,561
Adjusted net income attributable to Wynn Resorts, Limited per
diluted share $ 2.11 $ 1.51 $ 4.43 $ 3.53
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 June 30, 2014
MacauOperations
Las VegasOperations
Corporateand Other
Total Operating income $ 217,710 $ 97,424 $
26,208 $ 341,342 Pre-opening costs 5,001 — — 5,001 Depreciation and
amortization 32,107 44,726 1,518 78,351 Property charges and other
2,033 67 — 2,100 Management and royalty fees 37,620 6,777 (44,397 )
— Corporate expenses and other 10,946 10,379 10,584 31,909
Stock-based compensation 1,584 909 5,931 8,424 Equity in income
from unconsolidated affiliates — 142 156 298
Adjusted Property EBITDA(1) $ 307,001 $ 160,424
$ — $ 467,425
Three Months Ended
June 30, 2013
MacauOperations
Las VegasOperations
Corporateand Other
Total Operating income $ 216,236 $ 49,551 $ 8,237 $ 274,024
Pre-opening costs 434 — — 434 Depreciation and amortization 29,526
62,095 1,597 93,218 Property charges and other (1,453 ) 7,065 —
5,612 Management and royalty fees 37,680 6,033 (43,713 ) —
Corporate expenses and other 6,528 8,427 8,365 23,320 Stock-based
compensation 1,137 2,253 25,356 28,746 Equity in income from
unconsolidated affiliates — 233 158 391
Adjusted Property EBITDA(1) $ 290,088 $ 135,657 $ —
$ 425,745
Three months ended June 30,
2014 2013 Adjusted Property EBITDA(1) $
467,425 $ 425,745 Pre-opening costs (5,001 ) (434 ) Depreciation
and amortization (78,351 ) (93,218 ) Property charges and other
(2,100 ) (5,612 ) Corporate expenses and other (31,909 ) (23,320 )
Stock-based compensation (8,424 ) (28,746 ) Interest income 5,505
4,158 Interest expense, net of capitalized interest (81,765 )
(73,764 ) (Decrease) increase in swap fair value (4,653 ) 13,512
Loss on extinguishment of debt (2,254 ) (26,578 ) Other 693 2,097
Provision for income taxes (764 ) (1,124 ) Net income 258,402
192,716 Less: Net income attributable to noncontrolling interests
(54,496 ) (62,931 ) Net income attributable to Wynn Resorts,
Limited $ 203,906 $ 129,785
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)
Six Months Ended June 30, 2014
MacauOperations
Las VegasOperations
Corporateand Other
Total Operating income $ 502,640 $ 148,938 $
66,595 $ 718,173 Pre-opening costs 8,074 — — 8,074 Depreciation and
amortization 63,266 88,716 3,028 155,010 Property charges and other
12,213 (179 ) — 12,034 Management and royalty fees 82,375 12,496
(94,871 ) — Corporate expenses and other 19,867 18,570 17,362
55,799 Stock-based compensation 2,894 1,935 7,516 12,345 Equity in
income from unconsolidated affiliates — 236 370
606 Adjusted Property EBITDA(1) $ 691,329 $
270,712 $ — $ 962,041
Six Months
Ended June 30, 2013
MacauOperations
Las VegasOperations
Corporateand Other
Total Operating income $ 467,762 $ 89,970 $ 49,940 $ 607,672
Pre-opening costs 886 — — 886 Depreciation and amortization 58,823
123,705 3,208 185,736 Property charges and other 1,166 9,819 (27 )
10,958 Management and royalty fees 76,876 11,828 (88,704 ) —
Corporate expenses and other 13,146 16,030 11,926 41,102
Stock-based compensation 2,140 4,480 23,248 29,868 Equity in income
from unconsolidated affiliates — 182 409 591
Adjusted Property EBITDA(1) $ 620,799 $ 256,014
$ — $ 876,813
Six months ended June
30, 2014 2013 Adjusted Property
EBITDA(1) $ 962,041 $ 876,813 Pre-opening costs (8,074 ) (886 )
Depreciation and amortization (155,010 ) (185,736 ) Property
charges and other (12,034 ) (10,958 ) Corporate expenses and other
(55,799 ) (41,102 ) Stock-based compensation (12,345 ) (29,868 )
Interest income 10,258 8,380 Interest expense, net of capitalized
interest (157,021 ) (149,141 ) (Decrease) increase in swap fair
value (3,811 ) 16,656 Loss on extinguishment of debt (3,783 )
(26,578 ) Other 396 3,262 (Provision) benefit for income taxes
(3,373 ) 4,018 Net income 561,445 464,860 Less: Net income
attributable to noncontrolling interests (130,643 ) (132,112 ) Net
income attributable to Wynn Resorts, Limited $ 430,802 $
332,748
WYNN RESORTS, LIMITED AND
SUBSIDIARIES
SUPPLEMENTAL DATA SCHEDULE
Three months ended June 30, Six
months ended June 30, 2014
2013 2014 2013
Room statistics for Macau operations: Occupancy 98.4 % 95.5
% 98.3 % 94.7 % Average daily rate (ADR)(a) $ 334 $ 314 $ 336 $ 315
Revenue per available room (REVPAR)(b) $ 329 $ 300 $ 330 $ 298
Other information for Macau operations: Table games win per unit
per day(c) $ 26,146 $ 24,571 $ 27,857 $ 25,060 Slot machine win per
unit per day(d) $ 1,163 $ 731 $ 1,022 $ 769 Average number of table
games 455 489 473 492 Average number of slot machines 624 869 732
856 Room statistics for Las Vegas operations: Occupancy 88.4 % 86.9
% 88.1 % 84.9 % Average daily rate (ADR)(a) $ 283 $ 268 $ 279 $ 263
Revenue per available room (REVPAR)(b) $ 251 $ 233 $ 246 $ 224
Other information for Las Vegas operations: Table games win per
unit per day(c) $ 8,130 $ 5,548 $ 7,281 $ 7,025 Table games win %
27.4 % 21.5 % 24.0 % 24.4 % Slot machine win per unit per day(d) $
276 $ 231 $ 274 $ 223 Average number of table games 233 233 232 233
Average number of slot machines 1,837 2,126 1,851 2,157
(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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