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Press release from Business Wire

Wynn Resorts, Limited Reports Fourth Quarter and Year End 2010 Results

Thursday, February 10, 2011

Wynn Resorts, Limited Reports Fourth Quarter and Year End 2010 Results16:01 EST Thursday, February 10, 2011 LAS VEGAS (Business Wire) -- Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the fourth quarter and year ended December 31, 2010. Net revenues for the year ended 2010 increased 37.4% to $4,184.7 million, compared to $3,045.6 million in 2009. The revenue increase was driven by a 59.1% increase in revenues at Wynn Macau and a 5.4% revenue increase from our Las Vegas operations. Adjusted property EBITDA (1) in 2010 increased 55.9% to $1,163.0 million, compared to $746.2 million for the year ended 2009. The EBITDA increase was driven by a 77.8% increase in EBITDA at Wynn Macau and a 10.7% EBITDA increase from our Las Vegas operations. Net revenues for the fourth quarter of 2010 were $1,237.2 million, compared to $809.3 million in the fourth quarter of 2009. The revenue increase was driven by a 79.4% increase in revenues at Wynn Macau and an 8.0% revenue increase from our Las Vegas operations. Adjusted property EBITDA was $365.2 million for the fourth quarter of 2010, compared to $196.8 million in the fourth quarter of 2009. On a US GAAP (Generally Accepted Accounting Principles) basis, net income attributable to Wynn Resorts for the year ended 2010 was $160.1 million, or $1.29 per diluted share, compared to net income attributable to Wynn Resorts of $20.7 million, or $0.17 per diluted share in 2009. Adjusted net income attributable to Wynn Resorts in 2010 was $261.0 million, or $2.11 per diluted share (adjusted EPS)(2) compared to an adjusted net income attributable to Wynn Resorts of $31.7 million, or $0.26 per diluted share in 2009. On a US GAAP basis, net income attributable to Wynn Resorts for the fourth quarter of 2010 was $114.2 million, or $0.91 per diluted share, compared to a net loss attributable to Wynn Resorts of $5.2 million, or ($0.04) per diluted share in the fourth quarter of 2009. Adjusted net income attributable to Wynn Resorts in the fourth quarter of 2010 was $113.7 million, or $0.91 per diluted share (adjusted EPS)(2) compared to an adjusted net income attributable to Wynn Resorts of $10.3 million, or $0.08 per diluted share in the fourth quarter of 2009. Wynn Macau Fourth Quarter Results In the fourth quarter of 2010 net revenues were $912.1 million compared to $508.4 million in the fourth quarter of 2009. EBITDA in the fourth quarter of 2010 was $296.8 million, up 108.9% from $142.1 million in the fourth quarter of 2009. 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 $27.7 billion for the 2010 quarter, a 63.7% increase from $16.9 billion in the fourth quarter of 2009. VIP table games win as a percentage of turnover (calculated before discounts and commissions) for the quarter was 3.15%, above the expected range of 2.7% to 3.0% and the 2.7% experienced in the fourth quarter of 2009. Table games drop in the mass market category was $663.3 million during the period, a 29.5% increase from $512.2 million in the fourth quarter of 2009. Mass market table games win percentage (calculated before discounts) of 26.0% was above our expected range of 19% to 21% and above the 22.9% generated in the 2009 quarter. Slot machine handle increased 37.3% to $1.2 billion as compared to the prior year quarter. Win per unit per day was 72.3% higher at $608, compared to $353 in the fourth quarter of 2009. Encore at Wynn Macau, with its intimate atmosphere and higher-limit tables, has been very well received by Wynn customers and has greatly contributed to the growth in revenues at Wynn Macau. Wynn Macau achieved an Average Daily Rate (ADR) of $303 for the fourth quarter of 2010, compared to $271 in the 2009 quarter. The 2010 results include the addition of 414 rooms and villas with the opening of Encore on April 21, 2010. The property's occupancy was 92.3%, compared to 90.6% during the prior year period and revenue per available room (REVPAR) was $280 in the 2010 quarter, 13.8% above 2009 levels of $246. Gross non-gaming revenues at Wynn Macau increased 58.6% during the quarter to $92.6 million, driven primarily by hotel and retail revenues which were up 92.7% and 41.8%, respectively. Room revenues increased as a result of the addition of the Encore rooms and retail revenues benefited from strong same-store sales growth and the addition of three new boutiques at Encore. Including Encore, we currently have 479 tables (243 VIP tables, 225 mass market tables and 11 poker tables) and 1,015 slot machines at Wynn Macau. Wynn Las Vegas Fourth Quarter Results For the fourth quarter ended December 31, 2010, net revenues for our Las Vegas operations were $325.1 million, which was 8.0% higher than in the fourth quarter of 2009. Property EBITDA of $68.3 million (with a 21.0% EBITDA margin on net revenue) was up 25.0% versus the $54.7 million generated in the comparable period in 2009, primarily due to higher gaming revenues. Net casino revenues in the fourth quarter of 2010 were $139.2 million, up 16.0% from the fourth quarter of 2009. Table games drop was $564.8 million, compared to drop of $548.5 million in the 2009 quarter and table games win percentage of 22.5% was within the property's expected range of 21% to 24% and above the 18.7% reported in the 2009 quarter. Slot machine handle of $698.1 million was 5.9% below the comparable period of 2009, however net slot win was up 2.1%. Gross non-casino revenues for the quarter were $230.9 million, a 2.6% increase from the fourth quarter of 2009, driven primarily by higher revenues from our nightclub operations, specifically, the recently opened Surrender. Room revenues were down 1.7% to $76.4 million during the quarter, versus $77.7 million in the fourth quarter of 2009. Even though Average Daily Rate (ADR) was up 7.1% to $235 and occupancy of 81.8% was slightly higher than the 81.0% for the fourth quarter of 2009, revenues declined as we had 9.0% fewer room nights available for sale during the quarter due to our remodel of the rooms at Wynn Las Vegas. This room remodel is expected to be completed in the second quarter of 2011. Food and beverage revenues increased 6.4% to $98.0 million in the quarter as we opened the new Surrender nightclub in May 2010. Retail revenues were $22.0 million in the quarter, 5.1% below last year's levels. Entertainment revenues increased 30.3% to $20.2 million from the fourth quarter of 2009 primarily due to the Garth Brooks performances (started in December 2009). Other Factors Affecting Earnings Interest expense was $59.7 million for the fourth quarter of 2010 compared to $50.5 million for the fourth quarter of 2009. Depreciation and amortization expense was $100.3 million during the quarter compared to $104.4 million for the three months ended December 31, 2009. Balance Sheet and Capital Expenditures Our total cash balances at December 31, 2010 were $1.3 billion. Total debt outstanding at the end of the quarter was $3.3 billion, including approximately $2.6 billion of Wynn Las Vegas debt and $651 million of Wynn Macau debt. Capital expenditures during the fourth quarter of 2010, net of changes in construction payables and retention, totaled approximately $55 million primarily related to the Wynn Las Vegas room remodel. Conference Call Information The Company will hold a conference call to discuss its results on Thursday, February 10, 2011 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 (Investor Relations). Forward-looking Statements This release contains forward-looking statements regarding operating trends and future results of operations. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by us. The risks and uncertainties include, but are not limited to, competition in the casino/hotel and resorts industries, the Company's dependence on existing management, levels of travel, leisure and casino spending, general economic conditions, and changes in gaming laws or regulations. 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, 2009 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 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, 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. The Company has included schedules in the tables that accompany this release that reconcile (i) net income (loss) attributable to Wynn Resorts to adjusted net income attributable to Wynn Resorts, and (ii) operating income (loss) to adjusted property EBITDA and adjusted property EBITDA to net income (loss) attributable to Wynn Resorts. (2) Adjusted net income (loss) attributable to Wynn Resorts is net income before pre-opening costs, property charges and other non-cash non-operating income and expenses. Adjusted net income attributable to Wynn Resorts and adjusted net income per share attributable to Wynn Resorts (“EPS”) are presented as supplemental disclosures because management believes that these 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/orevaluated 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 and adjusted net income attributable to Wynn Resorts per share may be different from the calculation methods used by other companies and, therefore, comparability may be limited.     WYNN RESORTS, LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (amounts in thousands, except per share data) (unaudited)   Three Months EndedYear EndedDecember 31,December 31,2010   20092010   2009   Operating revenues: Casino $ 998,920 $ 591,758 $ 3,245,104 $ 2,206,829 Rooms 105,306 92,748 400,291 377,520 Food and beverage 119,512 106,068 488,108 436,361 Entertainment, retail and other   98,524     84,328     354,332     288,432   Gross revenues 1,322,262 874,902 4,487,835 3,309,142 Less: promotional allowances   (85,074 )   (65,573 )   (303,137 )   (263,531 ) Net revenues   1,237,188     809,329     4,184,698     3,045,611     Operating costs and expenses: Casino 632,551 399,938 2,100,050 1,460,130 Rooms 28,897 28,891 122,260 111,596 Food and beverage 65,993 62,985 272,747 252,687 Entertainment, retail and other 56,739 46,954 204,558 166,636 General and administrative 105,555 101,242 391,254 365,070 Provision for doubtful accounts 13,575 727 28,304 13,707 Pre-opening costs 425 1,448 9,496 1,817 Depreciation and amortization 100,299 104,441 405,558 410,547 Property charges and other   2,845     17,186     25,219     28,458   Total operating costs and expenses 1,006,879 763,812 3,559,446 2,810,648   Operating income   230,309     45,517     625,252     234,963     Other income (expense): Interest income 686 495 2,498 1,740 Interest expense, net of capitalized interest (59,663 ) (50,524 ) (222,863 ) (211,385 ) Increase (decrease) in swap fair value 4,749 (1,270 ) (880 ) (2,258 ) Gain (loss) on extinguishment of debt/exchange offer (623 ) (3,779 ) (67,990 ) 18,734 Equity in income from unconsolidated affiliates 183 197 801 121 Other   671     (17 )   225     191   Other income (expense), net   (53,997 )   (54,898 )   (288,209 )   (192,857 )   Income (loss) before income taxes 176,312 (9,381 ) 337,043 42,106   (Provision) benefit for income taxes   (4,438 )   22,613     (20,447 )   (2,999 )   Net income 171,874 13,232 316,596 39,107   Less: Net income attributable to noncontrolling interests   (57,632 )   (18,453 )   (156,469 )   (18,453 )   Net income (loss) attributable to Wynn Resorts, Limited $ 114,242   $ (5,221 ) $ 160,127   $ 20,654     Basic and diluted income (loss) per common share: Net income (loss) attributable to Wynn Resorts, Limited: Basic $ 0.93 $ (0.04 ) $ 1.30 $ 0.17 Diluted $ 0.91 $ (0.04 ) $ 1.29 $ 0.17 Weighted average common shares outstanding: Basic 123,436 122,301 122,787 119,840 Diluted 124,899 122,301 123,939 120,185   Dividends declared per common share $ 8.00 $ 4.00 $ 8.50 $ 4.00         WYNN RESORTS, LIMITED AND SUBSIDIARIES RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO WYNN RESORTS, LIMITED TO ADJUSTED NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED (amounts in thousands) (unaudited)   Three Months EndedYear EndedDecember 31,December 31,2010200920102009   Net income (loss) attributable to Wynn Resorts, Limited $ 114,242 $ (5,221 ) $ 160,127 $ 20,654 Pre-opening costs 425 1,448 9,496 1,817 (Gain) loss on extinguishment of debt/exchange offer 623 3,779 67,990 (18,734 ) (Increase) decrease in swap fair value (4,749 ) 1,270 880 2,258 Property charges and other 2,845 17,186 25,219 28,458 Adjustment for taxes on above - (7,486 ) - (2,113 ) Adjustment for noncontrolling interest   276     (636 )   (2,689 )   (636 ) Adjusted net income attributable to Wynn Resorts, Limited(2) $ 113,662   $ 10,340   $ 261,023   $ 31,704       Adjusted net income attributable to Wynn Resorts, Limited per diluted share $ 0.91   $ 0.08   $ 2.11   $ 0.26       WYNN RESORTS, LIMITED AND SUBSIDIARIES RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA AND ADJUSTED PROPERTY EBITDA TO NET INCOME (LOSS) ATTRIBUTABLE TO WYNN RESORTS, LIMITED (amounts in thousands) (unaudited)   Three Months Ended December 31, 2010Wynn LasVegas   WynnMacau, Ltd.   Corporate and OtherTotal   Operating income (loss) $ (13,412 ) $ 214,515 $ 29,206 $ 230,309   Pre-opening costs 425 - - 425 Depreciation and amortization 64,466 35,237 596 100,299 Property charges and other 729 2,116 - 2,845 Management and royalty fees 4,878 36,142 (41,020 ) - Corporate expense and other 8,686 7,347 8,646 24,679 Stock-based compensation 2,478 1,484 2,485 6,447 Equity in income from unconsolidated affiliates 96 - 87 183         Adjusted Property EBITDA (1) $ 68,346   $ 296,841 $ -   $ 365,187     Three Months Ended December 31, 2009Wynn LasVegasWynnMacau, Ltd.Corporate andOtherTotal   Operating income (loss) $ (56,664 ) $ 89,403 $ 12,778 $ 45,517   Pre-opening costs 346 1,102 - 1,448 Depreciation and amortization 80,079 23,611 751 104,441 Property charges and other 17,015 169 2 17,186 Management and royalty fees 4,563 20,279 (24,842 ) - Corporate expense and other 8,076 6,265 7,993 22,334 Stock-based compensation 1,298 1,268 3,073 5,639 Equity in income/(loss) from unconsolidated affiliates (48 ) - 245 197         Adjusted Property EBITDA (1) $ 54,665   $ 142,097 $ -   $ 196,762     Three Months EndedDecember 31,20102009Adjusted Property EBITDA (1) $ 365,187 $ 196,762   Pre-opening costs (425 ) (1,448 ) Depreciation and amortization (100,299 ) (104,441 ) Property charges and other (2,845 ) (17,186 ) Corporate expenses and other (24,679 ) (22,334 ) Stock-based compensation (6,447 ) (5,639 ) Interest income 686 495 Interest expense, net of capitalized interest (59,663 ) (50,524 ) Increase (decrease) in swap fair value 4,749 (1,270 ) Loss on extinguishment of debt (623 ) (3,779 ) Other 671 (17 ) (Provision) benefit for income taxes   (4,438 )   22,613     Net income 171,874 13,232   Less: Net income attributable to noncontrolling interests   (57,632 )   (18,453 )   Net income (loss) attributable to Wynn Resorts, Limited $ 114,242   $ (5,221 )     WYNN RESORTS, LIMITED AND SUBSIDIARIES RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA AND ADJUSTED PROPERTY EBITDA TO NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED (amounts in thousands) (unaudited)   Year Ended December 31, 2010Wynn LasVegas   WynnMacau, Ltd.   Corporate andOtherTotal   Operating income (loss) $ (81,314 ) $ 604,443 $ 102,123 $ 625,252   Pre-opening costs 2,479 7,017 - 9,496 Depreciation and amortization 274,305 128,519 2,734 405,558 Property charges and other 19,017 6,038 164 25,219 Management and royalty fees 19,459 114,904 (134,363 ) - Corporate expense and other 24,766 26,668 18,057 69,491 Stock-based compensation 11,278 5,097 10,793 27,168 Equity in income from unconsolidated affiliates 309 - 492 801         Adjusted Property EBITDA (1) $ 270,299   $ 892,686 $ -   $ 1,162,985       Year Ended December 31, 2009Wynn LasVegasWynnMacau, Ltd.Corporate andOtherTotal   Operating income (loss) $ (144,279 ) $ 315,017 $ 64,225 $ 234,963   Pre-opening costs 346 1,471 - 1,817 Depreciation and amortization 313,759 93,794 2,994 410,547 Property charges and other 24,468 2,478 1,512 28,458 Management and royalty fees 18,434 71,538 (89,972 ) - Corporate expense and other 23,394 12,760 9,756 45,910 Stock-based compensation 8,370 5,029 10,937 24,336 Equity in income/(loss) from unconsolidated affiliates (427 ) - 548 121         Adjusted Property EBITDA (1) $ 244,065   $ 502,087 $ -   $ 746,152     Year EndedDecember 31,20102009Adjusted Property EBITDA (1) $ 1,162,985 $ 746,152   Pre-opening costs (9,496 ) (1,817 ) Depreciation and amortization (405,558 ) (410,547 ) Property charges and other (25,219 ) (28,458 ) Corporate expense and other (69,491 ) (45,910 ) Stock-based compensation (27,168 ) (24,336 ) Interest income 2,498 1,740 Interest expense, net of capitalized interest (222,863 ) (211,385 ) Decrease in swap fair value (880 ) (2,258 ) Gain (loss) on extinguishment of debt (67,990 ) 18,734 Other 225 191 Provision for income taxes   (20,447 )   (2,999 )   Net income 316,596 39,107   Less: Net income attributable to noncontrolling interests   (156,469 )   (18,453 )   Net income attributable to Wynn Resorts, Limited $ 160,127   $ 20,654       WYNN RESORTS, LIMITED AND SUBSIDIARIES SUPPLEMENTAL DATA SCHEDULE   Three Months Ended   Twelve Months EndedDecember31, 2010   December31, 2009   December31, 2010   December31, 2009 Room Statistics for Las Vegas operations:     Occupancy % 81.8% 81.0% 88.0% 85.2% Average Daily Rate (ADR)1 $ 235 $ 219 $ 210 $ 217 Revenue per available room (REVPAR)2 $ 192 $ 178 $ 185 $ 185   Other information for Las Vegas operations: Table games win per unit per day3 $ 6,585 $ 5,188 $ 5,846 $ 5,099 Table Win % 22.5% 18.7% 22.2% 20.2% Slot machine win per unit per day4 $ 179 $ 165 $ 164 $ 169 Average number of table games 210 215 224 226 Average number of slot machines 2,585 2,742 2,649 2,767   Room Statistics for Macau: Occupancy % 92.3% 90.6% 87.8% 87.5% Average Daily Rate (ADR)1 $ 303 $ 271 $ 291 $ 266 Revenue per available room (REVPAR)2 $ 280 $ 246 $ 256 $ 233   Other information for Macau: Table games win per unit per day3 $ 24,769 $ 16,379 $ 20,563 $ 14,846 Slot machine win per unit per day4 $ 608 $ 353 $ 513 $ 386 Average number of table games 459 383 439 371 Average number of slot machines 1,127 1,190 1,167 1,195 (1) ADR is Average Daily Rate and is calculated by dividing total room revenue (less service charges, if any) by total rooms occupied. (2) REVPAR is Revenue per Available Room and is calculated by dividing total room revenue (less service charges, if any) by total rooms available. (3) Table games win per unit per day is shown before discounts and commissions. (4) Slot machine win per unit per day calculated as gross slot win minus progressive accruals and free play. Wynn Resorts, LimitedSamanta Stewart, 702-770-7555investorrelations@wynnresorts.com