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Press release from Business Wire

Wynn Resorts, Limited Reports Second Quarter Results

Monday, July 18, 2011

Wynn Resorts, Limited Reports Second Quarter Results16:02 EDT Monday, July 18, 2011 LAS VEGAS (Business Wire) -- Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the second quarter ended June 30, 2011. Net revenues for the second quarter of 2011 were $1,367.4 million, compared to $1,032.6 million in the second quarter of 2010. The revenue increase was driven by a 36.7% increase in revenues at Wynn Macau and a 22.8% revenue increase from our Las Vegas operations. Adjusted property EBITDA (1) was $447.0 million for the second quarter of 2011, 58.9% above the $281.4 million reported in the second quarter of 2010. On a US GAAP (Generally Accepted Accounting Principles) basis, net income attributable to Wynn Resorts for the second quarter of 2011 was $122.0 million, or $0.97 per diluted share, compared to a net income attributable to Wynn Resorts of $52.4 million, or $0.42 per diluted share in the second quarter of 2010. Net income for the second quarter of 2011 included a $107.5 million charge representing the present value of a charitable contribution made by Wynn Macau to the University of Macau Development Foundation. This contribution consists of a $25 million contribution made in May 2011, and a commitment for additional donations of $10 million each year for the calendar years 2012 through 2022 inclusive, for a total of $135 million. Adjusted net income attributable to Wynn Resorts in the second quarter of 2011 was $200.8 million, or $1.60 per diluted share (adjusted EPS)(2) compared to an adjusted net income attributable to Wynn Resorts of $64.9 million, or $0.52 per diluted share in the second 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 August 11, 2011, to stockholders of record on July 28, 2011. Wynn Macau Second Quarter Results In the second quarter of 2011, net revenues were $976.5 million, a 36.7% increase from the $714.4 million generated in the second quarter of 2010. Adjusted property EBITDA in the second quarter of 2011 was $314.3 million, up 45.4% from $216.2 million in the second 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 $32.7 billion for the second quarter of 2011, a 50.6% increase from $21.7 billion in the second quarter of 2010. VIP table games win as a percentage of turnover (calculated before discounts and commissions) for the quarter was 2.89%, in-line with the expected range of 2.7% to 3.0% and lower than the 3.22% experienced in the second quarter of 2010. Table games drop in the mass market category was $690.3 million during the period, a 25.9% increase from $548.1 million in the second quarter of 2010. Mass market table games win percentage (calculated before discounts) of 27.8% was in-line with our revised range and higher than the 22.9% generated in the 2010 quarter. We have increased our expected mass market range from 21%-23% to 26%-28% based on our experience since the opening of Encore. Slot machine handle increased 40.7% to $1.5 billion as compared to the prior year quarter. Win per unit per day was 73.2% higher at $791, compared to $457 in the second quarter of 2010. Wynn Macau achieved an Average Daily Rate (ADR) of $314 for the second quarter of 2011, 9.4% above the $287 reported in the 2010 quarter. The June 30, 2011 results include the full contribution from Encore, which added 414 rooms and villas and opened on April 21, 2010. The property's occupancy was 90.5%, compared to 81.3% during the prior year period and revenue per available room (REVPAR) was $284 in the 2011 quarter, 21.8% above the $234 reported in the prior year quarter. Gross non-casino revenues at Wynn Macau increased 33.6% during the quarter to $94.6 million, driven by strong performance from all non-casino segments. Including Encore, we currently have 493 tables (265 VIP tables, 217 mass market tables and 11 poker tables) and 1,053 slot machines at Wynn Macau. Wynn Las Vegas Second Quarter Results For the second quarter ended June 30, 2011, net revenues for our Las Vegas operations were $390.8 million, 22.8% higher than in the second quarter of 2010. Adjusted property EBITDA of $132.7 million (with a 34.0% EBITDA margin on net revenues) was up 103.7% versus the $65.1 million generated in the comparable period in 2010. Net casino revenues in the second quarter of 2011 were $158.3 million, up 35.1% from the second quarter of 2010. Table games drop was $534.7 million, compared to drop of $485.9 million in the 2010 quarter and table games win percentage of 27.6% was above the property's expected range of 21% to 24% and the 20.0% reported in the 2010 quarter. Slot machine handle of $685.6 million was 2.1% above the comparable period of 2010, and net slot win was down 0.7%. Gross non-casino revenues for the quarter were $275.6 million, a 12.9% increase from the second quarter of 2010, driven by higher revenues across all non-gaming segments. Room revenues were up 15.5% to $91.1 million during the quarter, versus $78.8 million in the second quarter of 2010. Average Daily Rate (ADR) was up 22.1% to $240 and occupancy of 89.2% was slightly below the 92.6% for the second quarter of 2010. Revenue per available room (REVPAR) was $214 in the 2011 quarter, 17.5% above the $182 reported in the prior year quarter. During the quarter, we had 1.7% of our total rooms unavailable due to the remodel, which was completed in May 2011. Food and beverage revenues increased 13.0% to $126.0 million primarily driven by higher nightclub revenues as well as strong catering and restaurant revenues. Retail revenues were $22.8 million in the quarter, 6.5% above last year's levels. Entertainment revenues increased 22.0% to $19.0 million from the second quarter of 2010, primarily due to increased revenues from Garth Brooks. Balance Sheet Our total cash balances at June 30, 2011 were $1.7 billion. Total debt outstanding at the end of the quarter was $3.1 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 Monday, July 18, 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, 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 EndedSix Months EndedJune 30,June 30,2011201020112010   Operating revenues: Casino $ 1,082,043 $ 789,205 $ 2,088,348 $ 1,480,793 Rooms 119,998 100,528 235,379 193,435 Food and beverage 147,787 127,390 276,651 239,164 Entertainment, retail and other   102,416     87,016     201,370     169,863   Gross revenues 1,452,244 1,104,139 2,801,748 2,083,255 Less: promotional allowances   (84,891 )   (71,496 )   (174,123 )   (141,694 ) Net revenues   1,367,353     1,032,643     2,627,625     1,941,561     Operating costs and expenses: Casino 684,505 519,005 1,308,860 967,196 Rooms 31,887 31,648 62,459 62,791 Food and beverage 74,956 72,697 140,953 134,533 Entertainment, retail and other 54,164 47,633 110,439 97,757 General and administrative 91,912 95,668 179,573 182,669 Provision for doubtful accounts 3,784 6,852 13,945 13,870 Pre-opening costs - 6,675 - 8,986 Depreciation and amortization 102,052 101,353 203,399 205,918 Property charges and other   111,060     2,966     114,408     4,847   Total operating costs and expenses 1,154,320 884,497 2,134,036 1,678,567   Operating income   213,033     148,146     493,589     262,994     Other income (expense): Interest income 1,577 571 1,976 859 Interest expense, net of capitalized interest (58,231 ) (53,598 ) (116,494 ) (102,859 ) Increase (decrease) in swap fair value 3,135 (1,675 ) 7,365 (5,277 ) Loss on extinguishment of debt/exchange offer - (3,152 ) - (3,152 ) Equity in income from unconsolidated affiliates 264 115 866 506 Other   784     431     1,701     695   Other income (expense), net   (52,471 )   (57,308 )   (104,586 )   (109,228 )   Income before income taxes 160,562 90,838 389,003 153,766   Provision for income taxes   (5,231 )   (1,921 )   (7,337 )   (6,990 )   Net income 155,331 88,917 381,666 146,776   Less: Net income attributable to noncontrolling interests   (33,300 )   (36,512 )   (85,831 )   (67,383 )   Net income attributable to Wynn Resorts, Limited $ 122,031   $ 52,405   $ 295,835   $ 79,393     Basic and diluted income per common share: Net income attributable to Wynn Resorts, Limited:   Basic $ 0.98 $ 0.43 $ 2.39 $ 0.65 Diluted $ 0.97 $ 0.42 $ 2.36 $ 0.64 Weighted average common shares outstanding: Basic 123,970 122,521 123,864   122,467 Diluted 125,729 123,816 125,567 123,387   Dividends declared per common share: $ 0.50 $ 0.25 $ 0.50 $ 0.25   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 EndedSix Months EndedJune 30,June 30,2011201020112010   Net income attributable to Wynn Resorts, Limited $ 122,031 $ 52,405 $ 295,835 $ 79,393 Pre-opening costs - 6,675 - 8,986 Loss on extinguishment of debt/exchange offer - 3,152 - 3,152 (Increase) decrease in swap fair value (3,135 ) 1,675 (7,365 ) 5,277 Property charges and other 111,060 2,966 114,408 4,847 Adjustment for noncontrolling interest   (29,204 )   (1,931 )   (28,769 )   (2,961 ) Adjusted net income attributable to Wynn Resorts, Limited (2) $ 200,752   $ 64,942   $ 374,109   $ 98,694       Adjusted net income attributable to Wynn Resorts, Limited per diluted share $ 1.60   $ 0.52   $ 2.98   $ 0.80     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 June 30, 2011Wynn Las Vegas   Wynn Macau, Limited   Corporate and Other   Total   Operating income $ 48,609 $ 123,737 $ 40,687 $ 213,033   Pre-opening costs - - - - Depreciation and amortization 66,253 35,101 698 102,052 Property charges and other 2,560 108,500 - 111,060 Management and royalty fees 5,867 39,280 (45,147 ) - Corporate expense and other 7,747 6,250 704 14,701 Stock-based compensation 1,559 1,480 2,892 5,931 Equity in income from unconsolidated affiliates 98 - 166 264         Adjusted Property EBITDA (1) $ 132,693   $ 314,348 $ -   $ 447,041     Three Months Ended June 30, 2010Wynn Las Vegas   Wynn Macau, Limited   Corporate and Other   Total   Operating income (loss) $ (17,222 ) $ 140,164 $ 25,204 $ 148,146   Pre-opening costs 1,590 5,085 - 6,675 Depreciation and amortization 67,583 33,005 765 101,353 Property charges and other 482 2,484 - 2,966 Management and royalty fees 4,787 28,445 (33,232 ) - Corporate expense and other 4,852 5,843 4,385 15,080 Stock-based compensation 3,031 1,222 2,786 7,039 Equity in income from unconsolidated affiliates 23 - 92 115         Adjusted Property EBITDA (1) $ 65,126   $ 216,248 $ -   $ 281,374     Three Months EndedJune 30,20112010Adjusted Property EBITDA (1) $ 447,041 $ 281,374   Pre-opening costs - (6,675 ) Depreciation and amortization (102,052 ) (101,353 ) Property charges and other (111,060 ) (2,966 ) Corporate expenses and other (14,701 ) (15,080 ) Stock-based compensation (5,931 ) (7,039 ) Interest income 1,577 571 Interest expense, net of capitalized interest (58,231 ) (53,598 ) Increase (decrease) in swap fair value 3,135 (1,675 ) Loss on extinguishment of debt/exchange offer - (3,152 ) Other 784 431 Provision for income taxes (5,231 ) (1,921 )     Net income 155,331 88,917   Less: Net income attributable to noncontrolling interests   (33,300 )   (36,512 )   Net income attributable to Wynn Resorts, Limited $ 122,031   $ 52,405   ` 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)             Six Months Ended June 30, 2011Wynn Las VegasWynn Macau, LimitedCorporate and OtherTotal   Operating income $ 97,783 $ 318,139 $ 77,667 $ 493,589   Pre-opening costs - - - - Depreciation and amortization 132,049 70,034 1,316 203,399 Property charges and other 4,590 109,818 - 114,408 Management and royalty fees 11,795 73,774 (85,569 ) - Corporate expense and other 13,925 12,541 595 27,061 Stock-based compensation 4,424 2,873 5,379 12,676 Equity in income from unconsolidated affiliates 254 - 612 866         Adjusted Property EBITDA (1) $ 264,820   $ 587,179 $ -   $ 851,999     Six Months Ended June 30, 2010Wynn Las VegasWynn Macau, LimitedCorporate and OtherTotal   Operating income (loss) $ (51,707 ) $ 265,182 $ 49,519 $ 262,994   Pre-opening costs 1,969 7,017 - 8,986 Depreciation and amortization 146,509 57,876 1,533 205,918 Property charges and other 1,736 2,947 164 4,847 Management and royalty fees 9,561 51,714 (61,275 ) - Corporate expense and other 11,306 10,638 4,108 26,052 Stock-based compensation 5,978 2,464 5,524 13,966 Equity in income from unconsolidated affiliates 79 - 427 506         Adjusted Property EBITDA (1) $ 125,431   $ 397,838 $ -   $ 523,269     Six Months EndedJune 30,20112010Adjusted Property EBITDA (1) $ 851,999 $ 523,269   Pre-opening costs - (8,986 ) Depreciation and amortization (203,399 ) (205,918 ) Property charges and other (114,408 ) (4,847 ) Corporate expenses and other (27,061 ) (26,052 ) Stock-based compensation (12,676 ) (13,966 ) Interest income 1,976 859 Interest expense, net of capitalized interest (116,494 ) (102,859 ) Increase (decrease) in swap fair value 7,365 (5,277 ) Loss on extinguishment of debt/exchange offer - (3,152 ) Other 1,701 695 Provision for income taxes (7,337 ) (6,990 )     Net income 381,666 146,776   Less: Net income attributable to noncontrolling interests   (85,831 )   (67,383 )   Net income attributable to Wynn Resorts, Limited $ 295,835   $ 79,393     WYNN RESORTS, LIMITED AND SUBSIDIARIES SUPPLEMENTAL DATA SCHEDULE     Three Months Ended   Six Months EndedJune 30,2011   June 30,2010   June 30,2011   June 30,2010 Room Statistics for Las Vegas operations:     Occupancy % 89.2% 92.6% 88.5% 91.0% Average Daily Rate (ADR)1 $ 240 $ 197 $ 240 $ 200 Revenue per available room (REVPAR)2 $ 214 $ 182 $ 212 $ 182   Other information for Las Vegas operations: Table games win per unit per day3 $ 7,062 $ 4,721 $ 8,283 $ 5,576 Table Win % 27.6% 20.0% 29.1% 21.7% Slot machine win per unit per day4 $ 172 $ 167 $ 179 $ 160 Average number of table games 229 227 227 224 Average number of slot machines 2,593 2,688 2,595 2,673   Room Statistics for Macau: Occupancy % 90.5% 81.3% 89.6% 85.0% Average Daily Rate (ADR)1 $ 314 $ 287 $ 311 $ 285 Revenue per available room (REVPAR)2 $ 284 $ 234 $ 278 $ 242   Other information for Macau: Table games win per unit per day3 $ 25,872 $ 20,497 $ 24,591 $ 19,688 Slot machine win per unit per day4 $ 791 $ 457 $ 797 $ 454 Average number of table games 482 442 475 417 Average number of slot machines 1,040 1,185 1,026 1,180 (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