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Press release from Business Wire

Wynn Resorts, Limited Reports First Quarter Results

Tuesday, April 19, 2011

Wynn Resorts, Limited Reports First Quarter Results16:01 EDT Tuesday, April 19, 2011 LAS VEGAS (Business Wire) -- Wynn Resorts, Limited (Nasdaq: WYNN) today 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. Conference Call Information The Company will hold a conference call to discuss its results on Tuesday, April 19, 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, 2010 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. (2) Adjusted net income 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. The Company has included schedules in the tables that accompany this release that reconcile (i) net income 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 attributable to Wynn Resorts. WYNN RESORTS, LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (amounts in thousands, except per share data) (unaudited)     Three Months EndedMarch 31,20112010   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 EndedMarch 31,20112010   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, 2011WynnLas VegasWynnMacau, Ltd.Corporate andOtherTotal   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, 2010WynnLas VegasWynnMacau, Ltd.Corporate andOtherTotal   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 EndedMarch 31,20112010Adjusted 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 EndedMarch 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 (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