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Wynn Resorts, Limited Reports First Quarter Results

2011-04-20

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Wynn Resorts Net revenues for the first quarter of 2011 were $1,260.3 million, compared to $908.9 million in the first quarter of 2010. The revenue increase was driven by a 46.6% increase in revenues at Wynn Macau and a 24.0% revenue increase from our Las Vegas operations.

Wynn Resorts, Limited (Nasdaq: WYNN) reported financial results for the first quarter ended March 31, 2011.

Net revenues for the first quarter of 2011 were $1,260.3 million, compared to $908.9 million in the first quarter of 2010. The revenue increase was driven by a 46.6% increase in revenues at Wynn Macau and a 24.0% revenue increase from our Las Vegas operations. Adjusted property EBITDA(1) was $405.0 million for the first quarter of 2011, compared to $241.9 million in the first quarter of 2010.

On a US GAAP (Generally Accepted Accounting Principles) basis, net income attributable to Wynn Resorts for the first quarter of 2011 was $173.8 million, or $1.39 per diluted share, compared to a net income attributable to Wynn Resorts of $27.0 million, or $0.22 per diluted share in the first quarter of 2010. Adjusted net income attributable to Wynn Resorts in the first quarter of 2011 was $173.4 million, or $1.38 per diluted share (adjusted EPS)(2) compared to an adjusted net income attributable to Wynn Resorts of $33.8 million, or $0.27 per diluted share in the first quarter of 2010.

Wynn Resorts also announced today that its Board of Directors has approved a cash dividend for the quarter of $0.50 per common share. This dividend will be payable on May 17, 2011 to stockholders of record on May 3, 2011.

Wynn Macau First Quarter Results

In the first quarter of 2011 net revenues were $865.7 million compared to $590.6 million in the first quarter of 2010. Adjusted property EBITDA in the first quarter of 2011 was $272.8 million, up 50.2% from $181.6 million in the first quarter of 2010.

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 $29.3 billion for the first quarter of 2011, a 44.7% increase from $20.2 billion in the first quarter of 2010. VIP table games win as a percentage of turnover (calculated before discounts and commissions) for the quarter was 2.69%, slightly below the expected range of 2.7% to 3.0% and the 2.70% experienced in the first quarter of 2010.

Table games drop in the mass market category was $682.5 million during the period, a 29.2% increase from $528.2 million in the first quarter of 2010. Mass market table games win percentage (calculated before discounts) of 27.9% was above our expected range of 21% to 23% and above the 22.2% generated in the 2010 quarter.

Slot machine handle increased 59.2% to $1.5 billion as compared to the prior year quarter. Win per unit per day was 78.1% higher at $803, compared to $451 in the first quarter of 2010.

Wynn Macau achieved an Average Daily Rate (ADR) of $307 for the first quarter of 2011, compared to $282 in the 2010 quarter. The 2011 results include the addition of 414 rooms and villas with the opening of Encore on April 21, 2010. The property’s occupancy was 88.6%, compared to 90.7% during the prior year period and revenue per available room (REVPAR) was $272 in the 2011 quarter, 6.3% above the $256 reported in the prior year quarter.

Gross non-casino revenues at Wynn Macau increased 50.2% during the quarter to $94.2 million, driven by strong performance from all non-casino segments. Room revenues increased 79.1% as a result of the addition of the Encore rooms and retail revenues were up 37.7% due to strong same-store sales growth and the addition of three new boutiques at Encore.

Including Encore, we currently have 499 tables (263 VIP tables, 225 mass market tables and 11 poker tables) and 1,015 slot machines at Wynn Macau.

Wynn Las Vegas First Quarter Results

For the first quarter ended March 31, 2011, net revenues for our Las Vegas operations were $394.6 million, which was 24.0% higher than in the first quarter of 2010. Adjusted property EBITDA of $132.1 million (with a 33.5% EBITDA margin on net revenue) was up 119.1% versus the $60.3 million generated in the comparable period in 2010.

Net casino revenues in the first quarter of 2011 were $194.2 million, up 39.2% from the first quarter of 2010. Table games drop was $634.0 million, compared to drop of $556.9 million in the 2010 quarter and table games win percentage of 30.4% was above the property’s expected range of 21% to 24% and the 23.2% reported in the 2010 quarter. Slot machine handle of $718.7 million was 6.6% above the comparable period of 2010, and net slot win was up 18.1%.

Gross non-casino revenues for the quarter were $249.0 million, a 10.8% increase from the first quarter of 2010, driven by higher revenues across all non-gaming segments.

Room revenues were up 13.4% to $88.0 million during the quarter, versus $77.6 million in the first quarter of 2010. Average Daily Rate (ADR) was up 18.2% to $240 and occupancy of 87.9% was slightly below the 89.4% for the first quarter of 2010. During the quarter, we had 2.3% of our total rooms unavailable due to the remodel, which is expected to be completed in the second quarter of 2011.

Food and beverage revenues increased 10.6% to $106.1 million in the quarter as we opened the new Surrender nightclub in May 2010. Retail revenues were $19.6 million in the quarter, 5.4% above last year’s levels. Entertainment revenues increased 13.7% to $20.7 million from the first quarter of 2010.

Balance Sheet and Capital Expenditures

Our total cash balances at March 31, 2011 were $1.4 billion. Total debt outstanding at the end of the quarter was $3.2 billion, including $2.6 billion of Wynn Las Vegas debt and $551 million of Wynn Macau debt.

WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share data)
(unaudited)

	Three Months Ended
	March 31,
	2011			2010

Operating revenues:
Casino	$	1,006,305		$	691,588
Rooms		115,381			92,907
Food and beverage		128,864			111,774
Entertainment, retail and other		98,954			82,847
Gross revenues		1,349,504			979,116
Less: promotional allowances		(89,232	)		(70,198	)
Net revenues		1,260,272			908,918

Operating costs and expenses:
Casino		624,355			448,191
Rooms		30,572			31,143
Food and beverage		65,997			61,836
Entertainment, retail and other		56,275			50,124
General and administrative		87,661			87,001
Provision for doubtful accounts		10,161			7,018
Pre-opening costs		-			2,311
Depreciation and amortization		101,347			104,565
Property charges and other		3,348			1,881
Total operating costs and expenses		979,716			794,070

Operating income		280,556			114,848

Other income (expense):
Interest income		399			288
Interest expense, net of capitalized interest		(58,263	)		(49,261	)
Increase (decrease) in swap fair value		4,230			(3,602	)
Equity in income from unconsolidated affiliates		602			391
Other		917			264
Other income (expense), net		(52,115	)		(51,920	)

Income before income taxes		228,441			62,928

Provision for income taxes		(2,106	)		(5,069	)

Net income		226,335			57,859

Less: Net income attributable to noncontrolling interests		(52,531	)		(30,871	)

Net income attributable to Wynn Resorts, Limited	$	173,804		$	26,988

Basic and diluted income per common share:
Net income attributable to Wynn Resorts, Limited:
Basic	$	1.40		$	0.22
Diluted	$	1.39		$	0.22
Weighted average common shares outstanding:
Basic		123,757			122,411
Diluted		125,371			122,982


WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED
TO ADJUSTED NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED
(amounts in thousands, except per share data)
(unaudited)

	Three Months Ended
	March 31,
	2011			2010

Net income attributable to Wynn Resorts, Limited	$	173,804		$	26,988
Pre-opening costs		-			2,311
(Increase) decrease in swap fair value		(4,230	)		3,602
Property charges and other		3,348			1,881
Adjustment for noncontrolling interest		436			(1,031	)
Adjusted net income attributable to Wynn Resorts, Limited(2)	$	173,358		$	33,751

Adjusted net income attributable to Wynn Resorts, Limited per diluted share	$	1.38		$	0.27


WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA
AND ADJUSTED PROPERTY EBITDA TO NET INCOME
(amounts in thousands)
(unaudited)

	Three Months Ended March 31, 2011
	Wynn Las Vegas			Wynn Macau, Ltd.		Corporate and Other			Total

Operating income	$	49,174		$	194,402	$	36,980		$	280,556

Depreciation and amortization		65,796			34,933		618			101,347
Property charges and other		2,030			1,318		-			3,348
Management and royalty fees		5,928			34,494		(40,422	)		-
Corporate expense and other		6,178			6,291		(109	)		12,360
Stock-based compensation		2,865			1,393		2,487			6,745
Equity in income from
unconsolidated affiliate		156			-		446			602

Adjusted Property EBITDA ⁽¹⁾	$	132,127		$	272,831	$	-		$	404,958

	Three Months Ended March 31, 2010
	Wynn Las Vegas			Wynn Macau, Ltd.		Corporate and Other			Total

Operating income (loss)	$	(34,485	)	$	125,018	$	24,315		$	114,848

Pre-opening costs		379			1,932		-			2,311
Depreciation and amortization		78,926			24,871		768			104,565
Property charges and other		1,254			463		164			1,881
Management and royalty fees		4,774			23,269		(28,043	)		-
Corporate expense and other		6,453			4,794		(275	)		10,972
Stock-based compensation		2,948			1,243		2,736			6,927
Equity in income from
unconsolidated affiliate		56			-		335			391

Adjusted Property EBITDA ⁽¹⁾	$	60,305		$	181,590	$	-		$	241,895

						Three Months Ended
						March 31,
						2011			2010
Adjusted Property EBITDA ⁽¹⁾						$	404,958		$	241,895

Pre-opening costs							-			(2,311	)
Depreciation and amortization							(101,347	)		(104,565	)
Property charges and other							(3,348	)		(1,881	)
Corporate expenses and other							(12,360	)		(10,972	)
Stock-based compensation							(6,745	)		(6,927	)
Interest income							399			288
Interest expense, net of capitalized interest							(58,263	)		(49,261	)
Increase (decrease) in swap fair value							4,230			(3,602	)
Other							917			264
Provision for income taxes							(2,106	)		(5,069	)

Net income							226,335			57,859

Less: Net income attributable to noncontrolling interests							(52,531	)		(30,871	)

Net income attributable to Wynn Resorts, Limited						$	173,804		$	26,988


WYNN RESORTS, LIMITED AND SUBSIDIARIES SUPPLEMENTAL DATA SCHEDULE

	Three Months Ended
	March 31, 2011	March 31, 2010
Room Statistics for Las Vegas operations:
Occupancy %	87.9%	89.4%
Average Daily Rate (ADR)¹	$240	$203
Revenue per available room (REVPAR)²	$211	$181

Other information for Las Vegas operations:
Table games win per unit per day³	$9,544	$6,459
Table Win %	30.4%	23.2%
Slot machine win per unit per day⁴	$186	$154
Average number of table games	224	222
Average number of slot machines	2,597	2,658

Room Statistics for Macau:
Occupancy %	88.6%	90.7%
Average Daily Rate (ADR)¹	$307	$282
Revenue per available room (REVPAR)²	$272	$256

Other information for Macau:
Table games win per unit per day³	$23,255	$18,767
Slot machine win per unit per day⁴	$803	$451
Average number of table games	468	392
Average number of slot machines	1,012	1,175