Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial
results for the second quarter ended June 30, 2015.
Net revenues for the second quarter of 2015 were $1,040.5
million, compared to $1,412.1 million in the second quarter of
2014. The decline was the result of a 35.8% net revenue decrease
from our Macau Operations and a 6.2% decrease in net revenues from
our Las Vegas Operations. Adjusted property EBITDA (1) was
$295.4 million for the second quarter of 2015, a 36.8% decrease
from $467.4 million in the second quarter of 2014.
On a US GAAP basis, net income attributable to Wynn
Resorts, Limited for the second quarter of 2015 was $56.5 million,
or $0.56 per diluted share, compared to net income attributable to
Wynn Resorts, Limited of $203.9 million, or $2.00 per diluted
share, in the second quarter of 2014.
Adjusted net income attributable to Wynn Resorts, Limited
(2) in the second quarter of 2015 was $75.0 million, or $0.74
per diluted share (adjusted EPS), compared to an adjusted net
income attributable to Wynn Resorts, Limited of $215.1 million, or
$2.11 per diluted share, in the second quarter of 2014.
Wynn Resorts, Limited also announced today that the Company has
approved a cash dividend of $0.50 per common share. This dividend
will be payable on August 20, 2015, to stockholders of record on
August 11, 2015.
Macau Operations
In the second quarter of 2015, net revenues were $617.0 million,
a 35.8% decrease from the $960.6 million generated in the second
quarter of 2014. Adjusted property EBITDA in the second quarter of
2015 was $173.4 million, down 43.5% from $307.0 million in the
second quarter of 2014, due primarily to weakness in the gaming
segment.
Table games turnover in the VIP segment was $15.5 billion for
the second quarter of 2015, a 41.1% decrease from $26.4 billion in
the second quarter of 2014. VIP table games win as a percentage of
turnover (calculated before commissions) for the quarter was 2.92%,
within the expected range of 2.7% to 3.0% and flat compared to the
2.93% experienced in the second quarter of 2014. The average number
of VIP tables decreased to 247 units in the second quarter of 2015
from 263 units in the prior year's second quarter.
The Company has determined that it will now include the amount
of cash that is deposited in a gaming table's drop box plus cash
chips purchased at the casino cage in the calculation of table drop
in accordance with standard Macau industry practice. Table drop in
the mass market segment was $1.2 billion in the second quarter of
2015, down 16.5% from the 2014 second quarter. Table games win in
the mass market segment decreased by 32.9% to $208.6 million in the
second quarter of 2015. The mass market win percentage of 17.5% in
the second quarter of 2015 was below the 21.8% in the second
quarter of 2014 and below the 20.5% over the trailing twelve months
ended June 30, 2015.
Slot machine handle for the second quarter of 2015 declined
29.5% from the 2014 period to $1,027.6 million, and slot win
decreased by 22.5%.
For the second quarter of 2015, total non-casino revenues,
before promotional allowances, decreased 22.3% during the quarter
to $78.1 million. We achieved an average daily rate (ADR) of $321,
down 3.9% compared to the $334 reported in the 2014 second quarter.
Occupancy at Wynn Macau of 96.4% compares to 98.4% in the
prior-year period. Revenue per available room (REVPAR) decreased
5.8% to $310 in the 2015 quarter from $329 in last year’s second
quarter.
Las Vegas Operations
For the quarter ended June 30, 2015, net revenues were
$423.5 million, a 6.2% decrease from $451.4 million in the second
quarter of 2014. Adjusted property EBITDA was $122.0 million, down
23.9% compared to the prior year.
Net casino revenues in the second quarter of 2015 were $134.7
million, a 26.2% decrease from the second quarter of 2014. Table
games drop of $509.3 million was down 19.0% from $629.0 million in
the 2014 quarter. Table games win percentage was 19.5%, outside the
property’s expected range of 21% to 24% and below the 27.4%
reported in the 2014 quarter. Slot machine handle of $712.1 million
was 0.7% above the $706.9 million in the comparable period of 2014,
and net slot win was up 10.6%.
For the second quarter of 2015, total non-casino revenues,
before promotional allowances, increased 5.3% from the second
quarter of 2014 to $330.3 million.
Room revenues increased 0.9% to $108.8 million during the
quarter, versus $107.9 million in the second quarter of 2014.
Occupancy was flat at 88.4% and ADR increased 2.1% to $289 from
$283. REVPAR was $255 in the 2015 second quarter, 1.6% above the
$251 reported in the prior-year quarter.
Food and beverage revenues in the second quarter of 2015 were
$162.0 million, up 8.7% compared to the 2014 second quarter.
Entertainment, retail and other revenues improved 4.8% from last
year’s quarter to $59.4 million.
Wynn Palace Project in Macau
The Company is currently constructing Wynn Palace, an integrated
resort containing a 1,700-room hotel, a performance lake, meeting
space, a casino, a 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 costs. The total project budget, including
construction costs, capitalized interest, pre-opening expenses,
land costs and financing fees, is approximately $4.1 billion. We
expect to open our resort on Cotai in the first half of 2016.
During the second quarter of 2015, we invested approximately
$431.4 million in our Cotai project, taking the total investment to
$2.7 billion through June 30, 2015.
Wynn Project in Massachusetts
In November 2014, we were awarded a gaming license to develop
and construct an integrated resort in Everett, Massachusetts,
outside of Boston. On January 2, 2015, we purchased 33 acres of
land in Everett, along the Mystic River. On this land, we intend to
develop and construct an integrated resort containing a hotel, a
waterfront boardwalk, meeting space, a casino, a spa, retail
offerings, and food-and-beverage outlets.
Balance Sheet and Other
Our cash and cash equivalents, restricted cash and investment
securities at June 30, 2015 was $1.8 billion. Total debt
outstanding at the end of the quarter was $8.1 billion, including
$3.3 billion of Wynn Las Vegas debt, $2.9 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, 2015 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, 2014 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 net income before interest,
taxes, depreciation, amortization, pre-opening costs, property
charges and other, management and license fees, corporate expenses
and other, intercompany golf course and water rights leases,
stock-based compensation, loss on extinguishment of debt, change in
interest rate swap 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. 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, loss on extinguishment of
debt, change in interest rate swap fair value, property charges and
other, net of noncontrolling interest and taxes in respective
jurisdictions. Adjusted net income attributable to Wynn Resorts,
Limited and adjusted net income attributable to Wynn Resorts,
Limited per diluted share (“adjusted EPS”) are presented as
supplemental disclosures 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 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 diluted share may be
different from the calculation methods used by other companies and,
therefore, comparability may be limited. Adjusted net income
attributable to Wynn Resorts, Limited for the six months ended June
30, 2015 reflects a revision to the effective tax rate previously
applied to the loss on extinguishment of debt, net for the three
months ended March 31, 2015 to reflect the same assumed
effective U.S. tax rate applied to other adjustments to net
income.
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 to adjusted property
EBITDA, and (iii) 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, 2015 2014
2015 2014 Operating revenues: Casino $ 714,208
$ 1,091,595 $ 1,540,307 $ 2,317,728 Rooms 139,912 141,355 271,967
277,831 Food and beverage 181,016 174,308 317,029 316,145
Entertainment, retail and other 87,459 98,635 177,835
205,495 Gross revenues 1,122,595 1,505,893 2,307,138
3,117,199 Less: promotional allowances (82,137 ) (93,830 ) (174,442
) (191,523 ) Net revenues 1,040,458 1,412,063
2,132,696 2,925,676 Operating costs and expenses:
Casino 466,535 681,236 990,588 1,464,970 Rooms 37,584 37,659 74,270
73,004 Food and beverage 110,952 100,686 187,358 175,639
Entertainment, retail and other 38,997 39,878 79,291 84,413 General
and administrative 113,707 128,520 235,907 239,797 Provision
(benefit) for doubtful accounts 4,302 (2,710 ) 10,381 (5,438 )
Pre-opening costs 16,875 5,001 32,966 8,074 Depreciation and
amortization 81,913 78,351 164,779 155,010 Property charges and
other 472 2,100 2,976 12,034 Total
operating costs and expenses 871,337 1,070,721
1,778,516 2,207,503 Operating income 169,121
341,342 354,180 718,173 Other income
(expense): Interest income 1,498 5,505 3,190 10,258 Interest
expense, net of amounts capitalized (75,236 ) (81,765 ) (153,219 )
(157,021 ) Decrease in swap fair value (1,114 ) (4,653 ) (5,723 )
(3,811 ) Loss on extinguishment of debt (3,839 ) (2,254 ) (120,033
) (3,783 ) Equity in income (loss) from unconsolidated affiliates
(127 ) 298 70 606 Other 198 693 1,331 396
Other income (expense), net (78,620 ) (82,176 ) (274,384 )
(153,355 ) Income before income taxes 90,501 259,166 79,796 564,818
Provision for income taxes (13,298 ) (764 ) (16,495 ) (3,373 ) Net
income 77,203 258,402 63,301 561,445 Less: net income attributable
to noncontrolling interest (20,743 ) (54,496 ) (51,442 ) (130,643 )
Net income attributable to Wynn Resorts, Limited $ 56,460 $
203,906 $ 11,859 $ 430,802 Basic and diluted
income per common share: Net income attributable to Wynn Resorts,
Limited: Basic $ 0.56 $ 2.02 $ 0.12 $ 4.27 Diluted $ 0.56 $ 2.00 $
0.12 $ 4.22 Weighted average common shares outstanding: Basic
101,157 100,915 101,146 100,869 Diluted 101,710 102,018 101,795
101,979 Dividends declared per common share: $ 0.50 $ 1.25 $ 2.00 $
2.50
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 June 30,
Six Months Ended June 30, 2015
2014 2015 2014 Net income attributable
to Wynn Resorts, Limited $ 56,460 $ 203,906 $ 11,859 $ 430,802
Pre-opening costs, net 13,804 3,615 27,251 5,837 Loss on
extinguishment of debt, net 3,839 2,254 120,033 3,783 Decrease in
swap fair value, net 804 3,831 4,131 2,754 Property charges and
other, net 65 1,536 2,505 8,650 Adjusted net
income attributable to Wynn Resorts, Limited (2) $ 74,972 $
215,142 $ 165,779 $ 451,826 Adjusted net income
attributable to Wynn Resorts, Limited per diluted share $ 0.74
$ 2.11 $ 1.63 $ 4.43 Weighted average
common shares outstanding - diluted 101,710 102,018 101,795 101,979
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, 2015
MacauOperations Las
VegasOperations Corporateand Other
Total Operating income $ 93,347 $ 58,502 $ 17,272 $
169,121 Pre-opening costs 11,041 — 5,834 16,875 Depreciation and
amortization 34,357 45,249 2,307 81,913 Property charges and other
1,461 (922 ) (67 ) 472 Management and license fees 23,876 13,323
(37,199 ) — Corporate expense and other 5,291 5,135 6,412 16,838
Stock-based compensation 4,018 808 5,510 10,336 Equity in loss from
unconsolidated affiliates — (58 ) (69 ) (127 ) Adjusted
Property EBITDA(1) $ 173,391 $ 122,037 $ — $
295,428
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 license
fees 37,620 6,777 (44,397 ) — Corporate expense 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, 2015 2014 Adjusted Property
EBITDA(1) $ 295,428 $ 467,425 Pre-opening costs (16,875 ) (5,001 )
Depreciation and amortization (81,913 ) (78,351 ) Property charges
and other (472 ) (2,100 ) Corporate expenses and other (16,838 )
(31,909 ) Stock-based compensation (10,336 ) (8,424 ) Interest
income 1,498 5,505 Interest expense, net of amounts capitalized
(75,236 ) (81,765 ) Decrease in swap fair value (1,114 ) (4,653 )
Loss on extinguishment of debt (3,839 ) (2,254 ) Other 198 693
Provision for income taxes (13,298 ) (764 ) Net income 77,203
258,402 Less: net income attributable to noncontrolling interests
(20,743 ) (54,496 ) Net income attributable to Wynn Resorts,
Limited $ 56,460 $ 203,906
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, 2015
MacauOperations Las
VegasOperations Corporateand Other
Total Operating income $ 224,293 $ 106,102 $ 23,785 $
354,180 Pre-opening costs 20,540 — 12,426 32,966 Depreciation and
amortization 68,558 91,489 4,732 164,779 Property charges and other
1,695 1,109 172 2,976 Management and license fees 50,933 21,454
(72,387 ) — Corporate expense and other 11,279 11,098 20,103 42,480
Stock-based compensation 8,435 1,472 11,089 20,996 Equity in income
(loss) from unconsolidated affiliates — (10 ) 80 70
Adjusted Property EBITDA(1) $ 385,733 $ 232,714
$ — $ 618,447
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 license fees 82,375 12,496
(94,871 ) — Corporate expense 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, 2015 2014 Adjusted Property EBITDA(1) $
618,447 $ 962,041 Pre-opening costs (32,966 ) (8,074 ) Depreciation
and amortization (164,779 ) (155,010 ) Property charges and other
(2,976 ) (12,034 ) Corporate expenses and other (42,480 ) (55,799 )
Stock-based compensation (20,996 ) (12,345 ) Interest income 3,190
10,258 Interest expense, net of amounts capitalized (153,219 )
(157,021 ) Decrease in swap fair value (5,723 ) (3,811 ) Loss on
extinguishment of debt (120,033 ) (3,783 ) Other 1,331 396
Provision for income taxes (16,495 ) (3,373 ) Net income 63,301
561,445 Less: net income attributable to noncontrolling interests
(51,442 ) (130,643 ) Net income attributable to Wynn Resorts,
Limited $ 11,859 $ 430,802
WYNN RESORTS, LIMITED AND
SUBSIDIARIES
SUPPLEMENTAL DATA SCHEDULE
Three Months Ended June 30,
Six Months Ended June 30, 2015
2014 2015 2014 Macau Operations:
VIP Average number of table games 247 263 250 271 VIP
turnover $ 15,537,003
$
26,361,791 $ 32,664,669 $ 62,359,507 Table games win $ 453,203 $
771,152 $ 933,568 $ 1,774,388 VIP win as a % of turnover 2.92 %
2.93 % 2.86 % 2.85 % Table games win per unit per day (a) $ 20,177
$ 32,176 $ 20,665 $ 36,157
Mass market Average number of
table games 223 192 218 202 Table drop (b) $ 1,193,916 $ 1,429,987
$ 2,474,260 $ 2,799,783 Table games win $ 208,620 $ 311,049 $
488,180 $ 611,758 Table games win % 17.5 % 21.8 % 19.7 % 21.9 %
Table games win per unit per day (a) $ 10,274 $ 17,852 $ 12,339 $
16,722 Average number of slot machines 707 624 678 732 Slot
machine handle $ 1,027,557 $ 1,457,653 $ 2,067,172 $ 2,856,543 Slot
machine win $ 51,138 $ 65,983 $ 98,916 $ 135,420 Slot machine win
per unit per day (c) $ 795 $ 1,163 $ 806 $ 1,022
Room
statistics Occupancy 96.4 % 98.4 % 96.9 % 98.3 % ADR (d) $ 321
$ 334 $ 326 $ 336 REVPAR (e) $ 310 $ 329 $ 316 $ 330
Las
Vegas Operations: Average number of table games 235 233 236 232
Table drop (a) $ 509,309 $ 629,047 $ 1,082,921 $ 1,276,483 Table
games win $ 99,313 $ 172,054 $ 234,992 $ 305,788 Table games win %
19.5 % 27.4 % 21.7 % 24.0 % Table games win per unit per day (a) $
4,650 $ 8,130 $ 5,501 $ 7,281 Average number of slot
machines 1,868 1,837 1,861 1,851 Slot machine handle $ 712,147 $
706,870 $ 1,474,331 $ 1,450,668 Slot machine win $ 51,010 $ 46,131
$ 99,427 $ 91,632 Slot machine win per unit per day (c) $ 300 $ 276
$ 295 $ 274
Room statistics Occupancy 88.4 % 88.4 %
85.7 % 88.1 % ADR (d) $ 289 $ 283 $ 286 $ 279 REVPAR (e) $ 255 $
251 $ 245 $ 246 (a) Table games win per unit per day
is shown before discounts and commissions, as applicable. (b) In
Macau, table drop is the amount of cash that is deposited in a
gaming table’s drop box plus cash chips purchased at the casino
cage. In Las Vegas, table drop is the amount of cash and net
markers issued that are deposited in a gaming table’s drop box. (c)
Slot machine win per unit per day is calculated as gross slot win
minus progressive accruals and free play. (d) 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. (e)
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150729006598/en/
Wynn Resorts, LimitedMark Strawn,
702-770-7555investorrelations@wynnresorts.com
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