Wynn Resorts Results

Wynn Resorts Year End 2015 Net Revenues Down 25 Percent

Net revenues for the fourth quarter of 2015 were $946.9 million, compared to $1,138.0 million in the fourth quarter of 2014.

Wynn Resorts

Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the fourth quarter and year ended December 31, 2015.

Net revenues for the fourth quarter of 2015 were $946.9 million, compared to $1,138.0 million in the fourth quarter of 2014. The decline was the result of a 27.0% net revenue decrease from our Macau Operations, partially offset by a 3.8% increase in net revenues from our Las Vegas Operations. Adjusted property EBITDA (1) was $287.5 million for the fourth quarter of 2015, an 18.4% decrease from $352.5 million in the fourth quarter of 2014.

For the full year, net revenues were $4,075.9 million in 2015, down 25.0% from $5,433.7 million in 2014. Adjusted property EBITDA declined 33.1% to $1,185.8 million in 2015. Adjusted property EBITDA in 2015 decreased 43.7% to $708.6 million at our Macau Operations and 7.4% to $477.2 million at our Las Vegas Operations.

On a US GAAP basis, net income attributable to Wynn Resorts, Limited for the fourth quarter of 2015 was $87.2 million, or $0.86 per diluted share, compared to $109.3 million, or $1.07 per diluted share, in the fourth quarter of 2014.

Adjusted net income attributable to Wynn Resorts, Limited (2) in the fourth quarter of 2015 was $104.1 million, or $1.03 per diluted share, compared to $122.4 million, or $1.20 per diluted share, in the fourth quarter of 2014.

Wynn Resorts, Limited also announced today that the Company has approved a cash dividend for the quarter of $0.50 per common share. This dividend will be payable on March 2, 2016, to stockholders of record on February 23, 2016.

Macau Operations

In the fourth quarter of 2015, net revenues were $555.7 million, a 27.0% decrease from the $761.2 million generated in the fourth quarter of 2014. Adjusted property EBITDA in the fourth quarter of 2015 was $160.1 million, down 33.6% from $241.2 million in the fourth quarter of 2014.

Table games turnover in the VIP segment was $13.0 billion for the fourth quarter of 2015, a 36.9% decrease from $20.7 billion in the fourth quarter of 2014. VIP table games win as a percentage of turnover (calculated before commissions) for the quarter was 2.60%, below the expected range of 2.7% to 3.0% and below the 2.80% experienced in the fourth quarter of 2014. The average number of VIP tables decreased to 192 units in the fourth quarter of 2015 from 244 units in the prior year's fourth quarter.

Commencing in the second quarter of 2015, the Company included 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 $1,185.5 million in the fourth quarter of 2015, down 10.9% from the 2014 fourth quarter. Table games win in the mass market segment decreased by 8.2% to $228.6 million in the fourth quarter of 2015. The mass market win percentage of 19.3% in the fourth quarter of 2015 increased from the 18.7% experienced in the fourth quarter of 2014.

Slot machine handle for the fourth quarter of 2015 declined 4.7% from the 2014 period to $1,069.3 million, and slot win decreased by 9.8% to $50.4 million.

For the fourth quarter of 2015, total non-casino revenues, before promotional allowances, decreased 21.2% during the quarter to $75.6 million. We achieved an average daily rate ("ADR") of $323, down 2.7% compared to the $332 in the 2014 fourth quarter. Occupancy at Wynn Macau was 96.3%, down from 98.6% in the prior-year period. Revenue per available room ("REVPAR") decreased 5.2% to $311 in the 2015 quarter from $328 in last year’s fourth quarter.

Las Vegas Operations

In the fourth quarter of 2015, net revenues were $391.2 million, a 3.8% increase from $376.8 million in the fourth quarter of 2014. Adjusted property EBITDA in the fourth quarter of 2015 was $127.4 million, up 14.5% from $111.2 million in the fourth quarter of 2014.

Net casino revenues in the fourth quarter of 2015 were flat at $170.9 million, compared to the fourth quarter of 2014 at $171.0 million. Table games drop of $485.7 million was down 24.0% from $639.0 million in the 2014 quarter. Table games win percentage was 28.7%, above the property’s expected range of 21% to 25% and above the 24.0% in the 2014 quarter. Slot machine handle of $730.7 million was 5.1% below the $769.8 million in the comparable period of 2014, and slot win was up 11.0% to $52.6 million.

For the fourth quarter of 2015, total non-casino revenues, before promotional allowances, increased 2.7% from the fourth quarter of 2014 to $263.0 million.

Room revenues increased 6.7% to $101.9 million during the quarter, versus $95.5 million in the fourth quarter of 2014. Occupancy decreased to 81.1% from 82.1% and ADR increased 7.7% to $292 from $271. REVPAR was $237 in the 2015 fourth quarter, 6.8% above the $222 reported in the prior-year quarter.

Food and beverage revenues in the fourth quarter of 2015 were $101.1 million, down 2.1% compared to the 2014 fourth quarter. Entertainment, retail and other revenues increased 4.5% to $60.0 million.

Wynn Palace Project in Macau

The Company is currently constructing Wynn Palace, a fully integrated resort featuring a 1,700-room hotel, a performance lake, and a wide range of amenities, including meeting, retail, food-and-beverage, and gaming space, 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.

During the fourth quarter of 2015, we invested approximately $433.4 million in our Cotai project, taking the total investment to date to $3.5 billion.

Wynn Project in Massachusetts

In November 2014, we were awarded a gaming license to develop and construct an integrated resort in Everett, Massachusetts, adjacent to Boston. The resort will be located on a 33-acre site along the Mystic River. The resort will contain a hotel, a waterfront boardwalk, meeting space, a casino, a spa, retail offerings, and food-and-beverage outlets. During the fourth quarter of 2015, we began site remediation, site preparation and pre-construction activities.

Balance Sheet and Other

Our cash and cash equivalents and investment securities at December 31, 2015 totaled $2.3 billion.

Total debt outstanding at the end of the quarter was $9.2 billion, including $4.1 billion of Wynn Macau debt, $3.2 billion of Wynn Las Vegas debt and $1.9 billion of debt at the parent company and other.

During the 2015 year-end close process, the Company identified a $33.8 million decrease in the fair value of the Redemption Note, resulting in an increase to net income attributable to Wynn Resorts, Limited of $22.4 million that should have been recorded during the three months ended September 30, 2015. While the Company determined these amounts were immaterial, considering both quantitative and qualitative factors, it has elected to revise the amounts in the three months ended September 30, 2015, and will include disclosure of the adjustments in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. These non-cash amounts do not affect the Consolidated Statements of Operations for the year ended December 31, 2015 or adjusted property EBITDA, adjusted net income attributable to Wynn Resorts, Limited or adjusted net income per diluted share for the three months ended September 30, 2015 and December 31, 2015.

Non-GAAP Financial Measures

(1) “Adjusted property EBITDA” is net income before interest, taxes, depreciation and 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, change in Redemption Note 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, change in Redemption Note fair value, and 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.

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

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)

 
      Three Months Ended December 31,   Twelve Months Ended December 31,

 

2015   2014 2015   2014
Operating revenues:
Casino $ 692,098 $ 884,664 $ 2,932,419 $ 4,274,221
Rooms 133,073 129,197 538,500 542,762
Food and beverage 119,768 128,025 597,080 604,701
Entertainment, retail and other 85,779   94,770   350,622   401,181  
Gross revenues 1,030,718 1,236,656 4,418,621 5,822,865
Less: promotional allowances (83,816 ) (98,681 ) (342,738 ) (389,204 )
Net revenues 946,902   1,137,975   4,075,883   5,433,661  
Operating costs and expenses:
Casino 426,932 554,583 1,862,687 2,667,013
Rooms 37,446 36,099 149,009 148,338
Food and beverage 72,727 70,353 361,246 337,206
Entertainment, retail and other 38,878 38,729 157,432 163,754
General and administrative 112,247 125,833 464,793 492,464
Provision (benefit) for doubtful accounts (2,151 ) 4,649 11,115 3,906
Pre-opening costs 25,190 15,354 77,623 30,146
Depreciation and amortization 77,201 80,082 322,629 314,119
Property charges and other 6,572   (3,237 ) 10,535   10,437  

Total operating costs and expenses

795,042   922,445   3,417,069   4,167,383  
Operating income 151,860   215,530   658,814   1,266,278  
Other income (expense):
Interest income 2,574 4,369 7,229 20,441
Interest expense, net of capitalized interest (73,608 ) (78,993 ) (300,906 ) (315,062 )
Change in swap fair value 1,710 (2,942 ) (5,300 ) (4,393 )
Decrease in Redemption Note fair value 4,553 52,041
Loss on extinguishment of debt (2,213 ) (126,004 ) (9,569 )
Equity in income from unconsolidated affiliates 1,755 176 1,823 1,349
Other (240 ) 223   1,550   (182 )
Other income (expense), net (63,256 ) (79,380 ) (369,567 ) (307,416 )
Income before income taxes 88,604 136,150 289,247 958,862
Benefit (provision) for income taxes 16,190   12,043   (7,723 ) 3,782  
Net income 104,794 148,193 281,524 962,644

Less: net income attributable to noncontrolling interests

(17,573 ) (38,847 ) (86,234 ) (231,090 )
Net income attributable to Wynn Resorts, Limited $ 87,221   $ 109,346   $ 195,290   $ 731,554  
Basic and diluted income per common share:
Net income attributable to Wynn Resorts, Limited:
Basic $ 0.86 $ 1.08 $ 1.93 $ 7.25
Diluted $ 0.86 $ 1.07 $ 1.92 $ 7.18
Weighted average common shares outstanding:
Basic 101,200 101,010 101,163 100,927
Diluted 101,459 101,935 101,671 101,931
Dividends declared per common share $ 0.50 $ 2.50 $ 3.00 $ 6.25
 
 

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 December 31,   Twelve Months Ended December 31,
2015   2014 2015   2014
Net income attributable to Wynn Resorts, Limited $ 87,221 $ 109,346 $ 195,290 $ 731,554
Pre-opening costs, net 19,395 11,927 62,305 22,613
Loss on extinguishment of debt, net 1,826 125,434 7,894
Change in swap fair value, net (1,234 ) 2,124 3,826 3,175
Decrease in Redemption Note fair value, net (3,756 ) (42,934 )
Property charges and other, net 2,458   (2,778 ) 5,701   7,039
Adjusted net income attributable to Wynn Resorts, Limited (2) $ 104,084   $ 122,445   $ 349,622   $ 772,275
Adjusted net income attributable to Wynn Resorts, Limited per diluted share $ 1.03   $ 1.20   $ 3.44   $ 7.58
 
Weighted average common shares outstanding - diluted 101,459 101,935 101,671 101,931
 
 

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 December 31, 2015

Macau

Operations

 

Las Vegas

Operations

 

Corporate

and Other

 

Total

Operating income $ 78,912 $ 60,072 $ 12,876 $ 151,860
Pre-opening costs 20,830 4,360 25,190
Depreciation and amortization 29,064 45,277 2,860 77,201
Property charges and other 1,983 2,260 2,329 6,572
Management and license fees 20,970 12,377 (33,347 )
Corporate expenses and other 4,755 4,922 7,116 16,793
Stock-based compensation 3,554 720 3,806 8,080
Equity in income from unconsolidated affiliates   1,755     1,755  
Adjusted Property EBITDA(1) $ 160,068   $ 127,383   $   $ 287,451  
 
Three Months Ended December 31, 2014

Macau

Operations

Las Vegas

Operations

Corporate

and Other

Total
Operating income $ 157,608 $ 51,619 $ 6,303 $ 215,530
Pre-opening costs 7,164 4,250 3,940 15,354
Depreciation and amortization 32,814 45,530 1,738 80,082
Property charges and other 1,042 (4,279 ) (3,237 )
Management and license fees 29,576 5,660 (35,236 )
Corporate expenses and other 6,936 6,862 14,315 28,113
Stock-based compensation 6,084 1,569 8,787 16,440
Equity in income from unconsolidated affiliates   23   153   176  
Adjusted Property EBITDA(1) $ 241,224   $ 111,234   $   $ 352,458  
 
Three Months Ended December 31,
2015 2014
Adjusted Property EBITDA(1) $ 287,451 $ 352,458
Pre-opening costs (25,190 ) (15,354 )
Depreciation and amortization (77,201 ) (80,082 )
Property charges and other (6,572 ) 3,237
Corporate expenses and other (16,793 ) (28,113 )
Stock-based compensation (8,080 ) (16,440 )
Interest income 2,574 4,369
Interest expense, net of capitalized interest (73,608 ) (78,993 )
Change in swap fair value 1,710 (2,942 )
Decrease in Redemption Note fair value 4,553
Loss on extinguishment of debt (2,213 )
Other (240 ) 223
Benefit for income taxes 16,190   12,043  
Net income 104,794 148,193
Less: net income attributable to noncontrolling interests (17,573 ) (38,847 )
Net income attributable to Wynn Resorts, Limited $ 87,221   $ 109,346  
 
 

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)

 
      Twelve Months Ended December 31, 2015

Macau

Operations

 

Las Vegas

Operations

 

Corporate

and Other

  Total
Operating income $ 386,255 $ 218,866 $ 53,693 $ 658,814
Pre-opening costs 55,058 22,565 77,623
Depreciation and amortization 130,565 181,981 10,083 322,629
Property charges and other 4,568 3,480 2,487 10,535
Management and license fees 94,271 46,835 (141,106 )
Corporate expenses and other 22,206 21,469 32,404 76,079
Stock-based compensation 15,700 2,792 19,794 38,286
Equity in income from unconsolidated affiliates   1,743   80   1,823  
Adjusted Property EBITDA(1) $ 708,623   $ 477,166   $   $ 1,185,789  
 
Twelve Months Ended December 31, 2014
 

Macau

Operations

Las Vegas

Operations

Corporate

and Other

Total
Operating income $ 895,176 $ 270,489 $ 100,613 $ 1,266,278
Pre-opening costs 21,956 4,250 3,940 30,146
Depreciation and amortization 128,428 179,394 6,297 314,119
Property charges and other 15,352 (4,915 ) 10,437
Management and license fees 148,039 24,580 (172,619 )
Corporate expenses and other 36,207 36,621 38,967 111,795
Stock-based compensation 12,924 4,342 21,888 39,154
Equity in income from unconsolidated affiliates   435   914   1,349  
Adjusted Property EBITDA(1) $ 1,258,082   $ 515,196   $   $ 1,773,278  
 
Twelve Months Ended December 31,
2015 2014
Adjusted Property EBITDA(1) $ 1,185,789 $ 1,773,278
Pre-opening costs (77,623 ) (30,146 )
Depreciation and amortization (322,629 ) (314,119 )
Property charges and other (10,535 ) (10,437 )
Corporate expenses and other (76,079 ) (111,795 )
Stock-based compensation (38,286 ) (39,154 )
Interest income 7,229 20,441
Interest expense, net of capitalized interest (300,906 ) (315,062 )
Change in swap fair value (5,300 ) (4,393 )
Decrease in Redemption Note fair value 52,041
Loss on extinguishment of debt (126,004 ) (9,569 )
Other 1,550 (182 )
Benefit (provision) for income taxes (7,723 ) 3,782  
Net income 281,524 962,644
Less: net income attributable to noncontrolling interests (86,234 ) (231,090 )
Net income attributable to Wynn Resorts, Limited $ 195,290   $ 731,554  
 
 

WYNN RESORTS, LIMITED AND SUBSIDIARIES

SUPPLEMENTAL DATA SCHEDULE

(dollars in thousands, except for win per unit per day, ADR and REVPAR)

 
      Three Months Ended December 31,   Twelve Months Ended December 31,
2015   2014 2015   2014
Macau Operations:
VIP
Average number of table games 192 244 230 259
VIP turnover $ 13,033,946 $ 20,653,190 $ 57,917,060 $ 108,077,342
Table games win $ 339,033 $ 578,898 $ 1,659,683 $ 3,051,046
VIP win as a % of turnover 2.60 % 2.80 % 2.87 % 2.82 %
Table games win per unit per day (a) $ 19,159 $ 25,807 $ 19,785 $ 32,258
Mass market
Average number of table games 249 202 228 202
Table drop (b) $ 1,185,535 $ 1,330,694 $ 4,857,804 $ 5,517,382
Table games win $ 228,581 $ 249,021 $ 951,458 $ 1,187,997
Table games win % 19.3 % 18.7 % 19.6 % 21.5 %
Table games win per unit per day (a) $ 9,965 $ 13,434 $ 11,431 $ 16,154
 
Average number of slot machines 737 666 708 679
Slot machine handle $ 1,069,297 $ 1,122,510 $ 3,961,115 $ 5,415,127
Slot machine win $ 50,373 $ 55,860 $ 191,164 $ 264,763
Slot machine win per unit per day (c) $ 743 $ 912 $ 740 $ 1,068
 
Room statistics
Occupancy 96.3 % 98.6 % 96.5 % 98.4 %
ADR (d) $ 323 $ 332 $ 323 $ 333
REVPAR (e) $ 311 $ 328 $ 312 $ 327
 
Las Vegas Operations:
Average number of table games 228 231 232 232
Table drop (b) $ 485,652 $ 639,028 $ 2,060,189 $ 2,556,452
Table games win $ 139,273 $ 153,247 $ 490,920 $ 623,968
Table games win % 28.7 % 24.0 % 23.8 % 24.4 %
Table games win per unit per day (a) $ 6,651 $ 7,226 $ 5,786 $ 7,354
 
Average number of slot machines 1,882 1,864 1,866 1,858
Slot machine handle $ 730,733 $ 769,765 $ 2,969,327 $ 3,008,563
Slot machine win $ 52,585 $ 47,380 $ 206,626 $ 186,458
Slot machine win per unit per day (c) $ 304 $ 276 $ 303 $ 275
 
Room statistics
Occupancy 81.1 % 82.1 % 85.2 % 86.9 %
ADR (d) $ 292 $ 271 $ 285 $ 274
REVPAR (e) $ 237 $ 222 $ 243 $ 238



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