Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial
results for the third quarter ended September 30, 2014.
Net revenues for the third quarter of 2014 were $1,370.0
million, compared to $1,390.1 million in the third quarter of 2013.
The decline was the result of a 5.6% net revenue decrease from our
Macau Operations, partially offset by a 9.0% increase in net
revenues from our Las Vegas Operations. Adjusted property EBITDA
(1) was $458.8 million for the third quarter of 2014, a 5.3%
increase from $435.6 million in the third quarter of 2013.
On a US GAAP basis, net income attributable to Wynn Resorts
for the third quarter of 2014 was $191.4 million, or $1.88 per
diluted share, compared to net income attributable to Wynn Resorts
of $182.0 million, or $1.79 per diluted share, in the third quarter
of 2013.
Adjusted net income attributable to Wynn Resorts, Limited
(2) in the third quarter of 2014 was $199.2 million, or $1.95
per diluted share (adjusted EPS), compared to an adjusted net
income attributable to Wynn Resorts of $187.0 million, or $1.84 per
diluted share, in the third quarter of 2013.
Wynn Resorts also announced today that the Company has approved
a new quarterly cash dividend of $1.50 per common share, a 20%
increase from its previous regular dividend. The Company has also
approved an additional cash dividend of $1.00 per share. The total
dividend of $2.50 per share will be payable on November 25, 2014,
to stockholders of record on November 12, 2014.
Macau Operations
In the third quarter of 2014, net revenues were $942.3 million,
a 5.6% decrease from the $997.6 million generated in the third
quarter of 2013. Adjusted property EBITDA in the third quarter of
2014 was $325.5 million, down 1.1% from $329.1 million in the third
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 $25.1 billion for
the third quarter of 2014, a 17.4% decrease from $30.3 billion in
the third quarter of 2013. VIP table games win as a percentage of
turnover (calculated before commissions) for the quarter was 2.78%,
within the expected range of 2.7% to 3.0% and below the 3.04%
experienced in the third quarter of 2013.
Table games win in the mass market segment increased by 36.4% to
$327.2 million in the third quarter of 2014. Mass market table
games win per unit per day increased by 38.0% to $17,759 from
$12,872 in the third quarter of 2013. Drop in the mass market
segment was $641.2 million in the third quarter of 2014, up 1.7%
from the 2013 third quarter, while the segment’s win percentage of
51.0% compares to 38.0% in last year’s third quarter and
sequentially to 45.6% in the second quarter of 2014. 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 actual table games win rather than win
percentage.
Slot machine handle of $1.4 billion for the third quarter of
2014 was 23.2% above the prior-year quarter, and slot win increased
31.9% compared to the prior-year period. Win per unit per day was
97.1% higher at $1,358, compared to $689 in the third quarter of
2013, due in part to a reduction in the number of units on the
casino floor.
For the third quarter of 2014, we achieved an average daily rate
(ADR) of $327, 5.5% above the $310 reported in the 2013 third
quarter. Occupancy at Wynn Macau of 98.5% compares to 95.8% in the
prior-year period, and revenue per available room (REVPAR) rose
8.4% to $322 in the 2014 quarter from $297 in last year’s third
quarter. Non-casino revenues, before promotional allowances,
increased 1.4% during the quarter to $99.1 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 approximately $4.1 billion. We expect to open
our resort on Cotai in the first half of 2016.
During the third quarter of 2014, we invested approximately
$301.1 million in our Cotai project, taking the total investment to
date to $1.4 billion.
Las Vegas Operations
For the quarter ended September 30, 2014, net revenues were
$427.8 million, a 9.0% increase from $392.5 million in the third
quarter of 2013. Adjusted property EBITDA rose 25.1% to $133.3
million, up from $106.5 million generated in the comparable period
in 2013.
Net casino revenues in the third quarter of 2014 were $178.6
million, a 10.5% increase from the third quarter of 2013. Table
games drop of $640.9 million was down 5.2% from $676.3 million in
the 2013 quarter. Table games win percentage was 25.7%, above both
the property’s expected range of 21% to 24% and the 22.6% reported
in the 2013 quarter. Slot machine handle of $788.1 million was 7.4%
above the $733.5 million in the comparable period of 2013, and net
slot win was up 3.5%.
Room revenues were up 7.2% to $102.5 million during the quarter,
versus $95.7 million in the third quarter of 2013. ADR increased
6.8% to $267 from $250, and occupancy improved to 89.3% from 87.9%
in the third quarter of 2013. REVPAR was $238 in the 2014 third
quarter, 8.2% above the $220 reported in the prior-year
quarter.
Food and beverage revenues in the third quarter of 2014 were
$136.4 million, up 5.8% from the 2013 third quarter. Entertainment,
retail and other revenues improved 1.8% from last year’s quarter to
$59.1 million.
Balance Sheet and Other
Our total cash and investment securities balance at
September 30, 2014 was $3.1 billion. Total debt outstanding at
the end of the quarter was $7.3 billion, including $3.0 billion of
Wynn Las Vegas debt, $2.4 billion of Wynn Macau debt and $1.9
billion at the parent company.
Additionally, on September 17, 2014, the Massachusetts Gaming
Commission designated the Company the award winner of the Greater
Boston (Region A) gaming license. This license is reliant on the
outcome of a ballot vote on November 4, 2014, to uphold the state's
expanded gaming law.
Conference Call Information
The Company will hold a conference call to discuss its results
on October 28, 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 (“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 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 September
30,
Nine Months Ended September 30, 2014
2013 2014 2013 Operating
revenues: Casino $ 1,071,829 $ 1,105,595 $ 3,389,557 $ 3,228,246
Rooms 135,734 123,078 413,565 372,931 Food and beverage 160,531
152,218 476,676 461,474 Entertainment, retail and other 100,916
105,144 306,411 309,738 Gross revenues
1,469,010 1,486,035 4,586,209 4,372,389 Less: promotional
allowances (99,000 ) (95,923 ) (290,523 ) (271,350 ) Net revenues
1,370,010 1,390,112 4,295,686 4,101,039
Operating costs and expenses: Casino 647,460 699,897 2,112,430
2,062,507 Rooms 39,235 33,646 112,239 101,020 Food and beverage
91,214 84,118 266,853 253,458 Entertainment, retail and other
40,612 45,478 125,025 128,760 General and administrative 126,834
105,026 366,631 332,316 Provision (benefit) for doubtful accounts
4,695 11,325 (743 ) 7,104 Pre-opening costs 6,718 706 14,792 1,592
Depreciation and amortization 79,027 93,325 234,037 279,061
Property charges and other 1,640 2,613 13,674
13,571 Total operating costs and expenses 1,037,435
1,076,134 3,244,938 3,179,389 Operating income
332,575 313,978 1,050,748 921,650 Other
income (expense): Interest income 5,814 3,215 16,072 11,595
Interest expense, net of capitalized interest (79,048 ) (73,549 )
(236,069 ) (222,690 ) Increase (decrease) in swap fair value 2,360
(3,525 ) (1,451 ) 13,131 Loss on extinguishment of debt (3,573 ) —
(7,356 ) (26,578 ) Equity in income from unconsolidated affiliates
567 288 1,173 879 Other (801 ) 1,123 (405 ) 4,385
Other income (expense), net (74,681 ) (72,448 ) (228,036 ) (219,278
) Income before income taxes 257,894 241,530 822,712 702,372
(Provision) benefit for income taxes (4,888 ) 7,281 (8,261 )
11,299 Net income 253,006 248,811 814,451 713,671 Less: net
income attributable to noncontrolling interest (61,600 ) (66,791 )
(192,243 ) (198,903 ) Net income attributable to Wynn Resorts,
Limited $ 191,406 $ 182,020 $ 622,208 $
514,768 Basic and diluted income per common share: Net
income attributable to Wynn Resorts, Limited: Basic $ 1.90 $ 1.81 $
6.17 $ 5.12 Diluted $ 1.88 $ 1.79 $ 6.10 $ 5.07 Weighted average
common shares outstanding: Basic 100,959 100,685 100,899 100,470
Diluted 101,999 101,547 101,986 101,526 Dividends declared per
common share: $ 1.25 $ 1.00 $ 3.75 $ 3.00
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 September
30,
Nine Months Ended September 30, 2014
2013 2014 2013 Net income attributable
to Wynn Resorts, Limited $ 191,406 $ 182,020 $ 622,208 $ 514,768
Pre-opening costs
6,718 706 14,792 1,592 Loss on extinguishment of debt 3,573 — 7,356
26,578 (Increase) decrease in swap fair value (2,360 ) 3,525 1,451
(13,131 ) Property charges and other 1,640 2,613 13,674 13,571
Adjustment for noncontrolling interest (1,796 ) (1,820 ) (8,474 )
2,227 Adjusted net income attributable to Wynn Resorts,
Limited (2) $ 199,181 $ 187,044 $ 651,007 $
545,605 Adjusted net income attributable to Wynn Resorts,
Limited per diluted share $ 1.95 $ 1.84 $ 6.38
$ 5.37
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 September 30, 2014
MacauOperations
Las VegasOperations
Corporateand Other
Total
Operating income $ 234,928 $ 69,932 $ 27,715 $ 332,575 Pre-opening
costs 6,718 — — 6,718 Depreciation and amortization 32,348 45,148
1,531 79,027 Property charges and other 2,097 (457 ) — 1,640
Management and royalty fees 36,088 6,424 (42,512 ) — Corporate
expenses and other 9,404 11,189 7,290 27,883 Stock-based
compensation 3,946 838 5,585 10,369 Equity in income from
unconsolidated affiliates — 176 391 567
Adjusted Property EBITDA(1) $ 325,529 $ 133,250 $ —
$ 458,779
Three Months Ended September 30,
2013
MacauOperations
Las VegasOperations
Corporateand Other
Total Operating income $ 249,146 $ 29,099 $ 35,733 $ 313,978
Pre-opening costs 706 — — 706 Depreciation and amortization 30,012
61,720 1,593 93,325 Property charges and other 2,337 276 — 2,613
Management and royalty fees 39,602 5,892 (45,494 ) — Corporate
expenses and other 6,188 7,343 5,976 19,507 Stock-based
compensation 1,115 2,149 1,940 5,204 Equity in income from
unconsolidated affiliates — 36 252 288
Adjusted Property EBITDA(1) $ 329,106 $ 106,515 $ —
$ 435,621
Three months ended September
30, 2014 2013 Adjusted Property EBITDA(1) $
458,779 $ 435,621 Pre-opening costs (6,718 ) (706 ) Depreciation
and amortization (79,027 ) (93,325 ) Property charges and other
(1,640 ) (2,613 ) Corporate expenses and other (27,883 ) (19,507 )
Stock-based compensation (10,369 ) (5,204 ) Interest income 5,814
3,215 Interest expense, net of capitalized interest (79,048 )
(73,549 ) Increase (decrease) in swap fair value 2,360 (3,525 )
Loss on extinguishment of debt (3,573 ) — Other (801 ) 1,123
(Provision) benefit for income taxes (4,888 ) 7,281 Net
income 253,006 248,811 Less: Net income attributable to
noncontrolling interest (61,600 ) (66,791 ) Net income attributable
to Wynn Resorts, Limited $ 191,406 $ 182,020
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)
Nine Months Ended September 30,
2014
MacauOperations
Las VegasOperations
Corporateand Other
Total Operating income $ 737,568 $ 218,870 $ 94,310 $
1,050,748 Pre-opening costs 14,792 — — 14,792 Depreciation and
amortization 95,614 133,864 4,559 234,037 Property charges and
other 14,310 (636 ) — 13,674 Management and royalty fees 118,463
18,920 (137,383 ) — Corporate expenses and other 29,271 29,759
24,652 83,682 Stock-based compensation 6,840 2,773 13,101 22,714
Equity in income from unconsolidated affiliates — 412
761 1,173 Adjusted Property EBITDA(1) $ 1,016,858
$ 403,962 $ — $ 1,420,820
Nine Months Ended September 30, 2013
MacauOperations
Las VegasOperations
Corporateand Other
Total Operating income $ 716,908 $ 119,069 $ 85,673 $
921,650 Pre-opening costs 1,592 — — 1,592 Depreciation and
amortization 88,835 185,425 4,801 279,061 Property charges and
other 3,503 10,095 (27 ) 13,571 Management and royalty fees 116,478
17,720 (134,198 ) — Corporate expenses and other 19,334 23,373
17,902 60,609 Stock-based compensation 3,255 6,629 25,188 35,072
Equity in income from unconsolidated affiliates — 218
661 879 Adjusted Property EBITDA(1) $ 949,905
$ 362,529 $ — $ 1,312,434
Nine
months ended September 30, 2014 2013 Adjusted
Property EBITDA(1) $ 1,420,820 $ 1,312,434 Pre-opening costs
(14,792 ) (1,592 ) Depreciation and amortization (234,037 )
(279,061 ) Property charges and other (13,674 ) (13,571 ) Corporate
expenses and other (83,682 ) (60,609 ) Stock-based compensation
(22,714 ) (35,072 ) Interest income 16,072 11,595 Interest expense,
net of capitalized interest (236,069 ) (222,690 ) (Decrease)
increase in swap fair value (1,451 ) 13,131 Loss on extinguishment
of debt (7,356 ) (26,578 ) Other (405 ) 4,385 (Provision) benefit
for income taxes (8,261 ) 11,299 Net income 814,451 713,671
Less: Net income attributable to noncontrolling interest (192,243 )
(198,903 ) Net income attributable to Wynn Resorts, Limited $
622,208 $ 514,768
WYNN RESORTS, LIMITED AND
SUBSIDIARIES
SUPPLEMENTAL DATA SCHEDULE
Three Months Ended September
30,
Nine Months Ended September 30, 2014
2013 2014 2013 Room statistics for
Macau operations: Occupancy 98.5 % 95.8 % 98.3 % 95.0 % Average
daily rate (ADR)(a) $ 327 $ 310 $ 333 $ 313 Revenue per available
room (REVPAR)(b) $ 322 $ 297 $ 327 $ 297 Other information for
Macau operations: Table games win per unit per day(c) $ 24,696 $
25,927 $ 26,825 $ 25,351 Slot machine win per unit per day(d) $
1,358 $ 689 $ 1,120 $ 742 Average number of table games 451 487 466
490 Average number of slot machines 588 879 684 864 Room statistics
for Las Vegas operations: Occupancy 89.3 % 87.9 % 88.5 % 85.9 %
Average daily rate (ADR)(a) $ 267 $ 250 $ 275 $ 259 Revenue per
available room (REVPAR)(b) $ 238 $ 220 $ 243 $ 222 Other
information for Las Vegas operations: Table games win per unit per
day(c) $ 7,619 $ 7,031 $ 7,396 $ 7,027 Table games win % 25.7 %
22.6 % 24.5 % 23.7 % Slot machine win per unit per day(d) $ 277 $
258 $ 275 $ 234 Average number of table games 235 236 233 234
Average number of slot machines 1,864 1,935 1,855 2,082 (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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