Net revenues for the second quarter of 2009 were $723.3 million, compared to $825.2 million in the second quarter of 2008.
Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the quarter ended June 30, 2009.
Net revenues for the second quarter of 2009 were $723.3 million, compared to $825.2 million in the second quarter of 2008.
Consolidated adjusted property EBITDA (1) decreased 18.7% to $192.7 million for the second quarter of 2009, compared to $237.0 million in the second quarter of 2008.
On a US GAAP (Generally Accepted Accounting Principles) basis, net income for the quarter was $25.5 million, or $0.21 per diluted share, compared to net income of $272.0 million, or $2.42 per diluted share in 2008. Adjusted net income in the second quarter of 2009 was $11.5 million, or $0.09 per diluted share (adjusted EPS)(2) compared to an adjusted net income of $124.3 million, or $1.11 per diluted share in the second quarter of 2008.
Las Vegas Second Quarter Results
Our results of operations for the periods presented are not comparable as the three months ended June 30, 2009 includes Encore at Wynn Las Vegas, which opened on December 22, 2008. The prior year quarter includes only Wynn Las Vegas.
For the quarter ended June 30, 2009, our Las Vegas operations generated adjusted property EBITDA of $75.5 million, with a 24.1% EBITDA margin on net revenue, compared to $81.8 million in the second quarter of 2008. The EBITDA decline was primarily driven by higher operating expenses associated with the opening of Encore.
Net casino revenues in the second quarter of 2009 were $124.3 million, compared to $120.7 million for the second quarter of 2008. Table games drop was $494.8 million, with win per table per day (before discounts) of $5,007, compared to drop of $493.6 million and win per table per day of $7,742 in the second quarter of 2008. Table games win percentage of 20.7% was slightly below the property's expected range of 21% to 24%. Slot machine handle of $836.8 million was 1.8% below the comparable period of 2008 and win per unit per day was $155, compared to a win per unit per day of $232 in the second quarter of 2008. The reduction in win per table and win per unit is due primarily to the addition of 82 tables and 812 slot machines with the opening of Encore.
Gross non-casino revenues for the quarter were $231.9 million, a 9.4% increase from the second quarter of 2008, driven primarily by higher hotel and food and beverage revenues resulting from the opening of Encore. Hotel revenues were up 12.9% to $81.5 million during the quarter, versus $72.1 million in the second quarter of 2008 due to the addition of 2,034 suites at Encore. Our Las Vegas operations achieved an Average Daily Rate (ADR) of $218 for the quarter, compared to $302 in the 2008 quarter. Our occupancy was 86.6%, compared to 96.5% during the prior year period, generating revenue per available room (REVPAR) of $188 in the 2009 period (35.4% below the second quarter of 2008 of $292).
Food and beverage revenues increased 18.6% to $99.9 million in the quarter as a result of the additional 12 food and beverage outlets located in the Encore expansion. Retail revenues were $22.1 million in the quarter, flat with last year's levels. Entertainment revenues decreased $6.6 million (34.9%) from the second quarter of 2008.
Macau Second Quarter Results
In the second quarter of 2009, net revenues were $410.4 million compared to $529.9 million in the second quarter of 2008. Wynn Macau generated adjusted property EBITDA of $117.2 million, compared to $155.2 million in the second quarter of 2008.
Table games turnover in the VIP segment was $12.6 billion for the period, compared to $16.3 billion for the second quarter of 2008. VIP table games win as a percentage of turnover (calculated before discounts and commissions) for the second quarter of 2009 was 2.7%, at the lower end of the expected range of 2.7% to 3.0% and below the 3.0% experienced in the 2008 quarter.
Table games drop in the mass market category was approximately $481 million during the period, a 23.3% decrease from $626.9 million in the second quarter of 2008. Mass market table games win percentage (calculated before discounts) of 21.5% was above our expected range of 18% to 20% and higher than the 18.9% experienced in the second quarter of 2008.
Slot machine win increased 3.2% compared to the second quarter of 2008 and win per unit per day was $383, 6.6% higher than in the second quarter of 2008.
Wynn Macau achieved an Average Daily Rate (ADR) of $263 for the second quarter of 2009, compared to $277 in the 2008 quarter. The property's occupancy was 86.7%, compared to 87.9% during the prior year period, generating revenue per available room (REVPAR) of $228 in the 2009 period, 6.6% below 2008 levels of $244.
Encore at Wynn Macau
Construction continues on a further expansion of Wynn Macau. Encore at Wynn Macau is expected to open in the first half of 2010, adding a fully-integrated resort hotel to Wynn Macau with approximately 400 luxury suites and four villas, along with additional gaming spaces, food and beverage and retail amenities. The current project budget is approximately $650 million.
As of June 30, 2009, we have incurred $309.5 million associated with the construction of Encore at Wynn Macau.
Other Factors Affecting Earnings
Interest expense, net of $2.3 million in capitalized interest, was $53.7 million for the second quarter of 2009. Depreciation and amortization expenses were $102.7 million. Corporate expense and other was $13.1 million in the second quarter, including $6.4 million in stock based compensation. Property charges and other were a credit of $5.9 million primarily related to the refund of an aircraft purchase deposit.
Balance Sheet and Capital Expenditures
Our total cash balances on June 30, 2009 were $1.1 billion. Total debt outstanding at the end of the quarter was $4.1 billion, including approximately $2.6 billion of Wynn Las Vegas debt and $1.5 billion of Wynn Macau debt.
Capital expenditures during the second quarter of 2009 of approximately $125 million included the payment of certain construction payables and retention associated with Encore at Wynn Las Vegas and ongoing construction of Encore at Wynn Macau.
During the quarter, we repaid the remaining $375 million under the Wynn Resorts Term Loan Facility at a discounted price of 97.25% and recognized an $8.8 million gain on early retirement of debt. We also purchased $26.5 million face amount of the Wynn Las Vegas 6 5/8% First Mortgage Notes due 2014 at a discount. This transaction resulted in a gain on early extinguishment of debt of $3.1 million.
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