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Press release from Business Wire

Wynn Resorts, Limited Reports Fourth Quarter and Year End 2011 Results

Thursday, February 02, 2012

Wynn Resorts, Limited Reports Fourth Quarter and Year End 2011 Results16:01 EST Thursday, February 02, 2012 LAS VEGAS (Business Wire) -- Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the fourth quarter and year ended December 31, 2011. Net revenues for the year ended 2011 increased 25.9% to $5,269.8 million, compared to $4,184.7 million in 2010. The revenue increase was driven by a 31.2% increase in revenues from our Macau Operations and a 14.2% revenue increase from our Las Vegas Operations. Adjusted property EBITDA (1) in 2011 increased 40.6% to $1,635.3 million, compared to $1,163.0 million for the year ended 2010. The EBITDA increase was driven by a 34.0% increase in EBITDA from our Macau Operations and a 62.4% increase from our Las Vegas Operations. Net revenues for the fourth quarter of 2011 were $1,343.9 million, compared to $1,237.2 million in the fourth quarter of 2010. The revenue increase was driven by a 9.1% increase in revenues from our Macau Operations and a 7.2% revenue increase from our Las Vegas Operations. Adjusted property EBITDA was $402.2 million for the fourth quarter of 2011, compared to $365.2 million in the fourth quarter of 2010. The EBITDA increase was driven by a 5.5% increase from our Macau Operations and a 30.3% increase from our Las Vegas Operations. On a US GAAP (Generally Accepted Accounting Principles) basis, net income attributable to Wynn Resorts for the year ended 2011 was $613.4 million, or $4.88 per diluted share, compared to net income attributable to Wynn Resorts of $160.1 million, or $1.29 per diluted share in 2010. Adjusted net income attributable to Wynn Resorts in 2011 was $701.1 million, or $5.58 per diluted share (adjusted EPS)(2) compared to an adjusted net income attributable to Wynn Resorts of $261.0 million, or $2.11 per diluted share in 2010. On a US GAAP basis, net income attributable to Wynn Resorts for the fourth quarter of 2011 was $190.5 million, or $1.52 per diluted share, compared to a net income attributable to Wynn Resorts of $114.2 million, or $0.91 per diluted share in the fourth quarter of 2010. Adjusted net income attributable to Wynn Resorts in the fourth quarter of 2011 was $194.4 million, or $1.55 per diluted share (adjusted EPS) compared to an adjusted net income attributable to Wynn Resorts of $113.7 million, or $0.91 per diluted share in the fourth 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 March 1, 2012, to stockholders of record on February 16, 2012. Macau Operations In the fourth quarter of 2011, net revenues were $995.5 million, a 9.1% increase from the $912.1 million generated in the fourth quarter of 2010. Adjusted property EBITDA in the fourth quarter of 2011 was $313.1 million, up 5.5% from $296.8 million in the fourth 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 $29.7 billion for the fourth quarter of 2011, a 7.3% increase from $27.7 billion in the fourth quarter of 2010. VIP table games win as a percentage of turnover (calculated before discounts and commissions) for the quarter was 3.18%, above the expected range of 2.7% to 3.0% and slightly higher than the 3.15% experienced in the fourth quarter of 2010. Table games drop in the mass market category was $692.3 million during the period, a 4.4% increase from $663.3 million in the fourth quarter of 2010. Mass market table games win percentage (calculated before discounts) of 30.4% was higher than our revised range of 26% to 28% and above the 26.0% generated in the 2010 quarter. Slot machine handle increased 12.2% to $1.3 billion as compared to the prior year quarter. Win per unit per day was 23.2% higher at $749, compared to $608 in the fourth quarter of 2010. We achieved an Average Daily Rate (ADR) of $322 for the fourth quarter of 2011, 6.3% above the $303 reported in the 2010 quarter. The property's occupancy was 94.2%, compared to 92.3% during the prior year period, and revenue per available room (REVPAR) was $304 in the 2011 quarter, 8.6% above the $280 reported in the prior year quarter. Gross non-casino revenues increased 14.6% during the quarter to $106.0 million, driven by strong performance from all non-casino segments. We currently have 504 tables (295 VIP tables, 198 mass market tables and 11 poker tables) and 930 slot machines. We continue to work on the final project scope, timeline and budget for our Cotai project. Las Vegas Operations For the fourth quarter ended December 31, 2011, net revenues were $348.4 million, 7.2% higher than in the fourth quarter of 2010. Adjusted property EBITDA of $89.1 million was up 30.3% versus the $68.3 million generated in the comparable period in 2010. EBITDA margin on net revenues was 25.6% in the fourth quarter of 2011 compared to 21.0% in the fourth quarter of 2010. Net casino revenues in the fourth quarter of 2011 were $145.8 million, up 4.7% from the fourth quarter of 2010. Table games drop was $594.5 million, compared to drop of $564.8 million in the 2010 quarter and table games win percentage of 23.3% was within the property's expected range of 21% to 24% and higher than the 22.5% reported in the 2010 quarter. Slot machine handle of $660.1 million was 5.4% below the comparable period of 2010, however net slot win was up 0.9% due to better hold in the 2011 quarter. Gross non-casino revenues for the quarter were $246.6 million, a 6.8% increase from the fourth quarter of 2010, driven by higher revenues across all non-gaming segments. Room revenues were up 11.7% to $85.3 million during the quarter, versus $76.4 million in the fourth quarter of 2010. Average Daily Rate (ADR) was up 6.3% to $250 while occupancy of 79.1% was below the 81.8% experienced in the fourth quarter of 2010. Revenue per available room (REVPAR) was $197 in the 2011 quarter, 2.6% above the $192 reported in the prior year quarter. During the fourth quarter of 2011, we had 1.0% of the rooms out due to renovations while we had 9.0% of the rooms out due to renovations in the fourth quarter of 2010. Food and beverage revenues increased 5.3% to $103.2 million, retail revenues were $22.3 million in the quarter, 1.7% above last year's levels, and entertainment revenues increased 2.5% to $20.7 million from the fourth quarter of 2010. Balance Sheet and other Our total cash balance at December 31, 2011 was $1.3 billion. Total debt outstanding at the end of the year was $3.2 billion, including $2.6 billion of Wynn Las Vegas debt and $628 million of Wynn Macau debt. For the three months and the year ended December 31, 2011, we recorded an income tax benefit. Such benefit primarily resulted from an increase in our U.S. deferred tax asset related to foreign tax credits and a decrease in our liability for uncertain foreign tax positions as the result of the statute of limitations lapse. Conference Call Information The Company will hold a conference call to discuss its results on Thursday, February 2, 2012 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 EndedYear EndedDecember 31,December 31,   2011     2010     2011     2010     Operating revenues: Casino $ 1,081,954 $ 998,920 $ 4,190,507 $ 3,245,104 Rooms 116,582 105,306 472,074 400,291 Food and beverage 128,193 119,512 547,735 488,108 Entertainment, retail and other   107,886     98,524     414,786     354,332   Gross revenues 1,434,615 1,322,262 5,625,102 4,487,835 Less: promotional allowances   (90,752 )   (85,074 )   (355,310 )   (303,137 ) Net revenues   1,343,863     1,237,188     5,269,792     4,184,698     Operating costs and expenses: Casino 698,033 632,551 2,686,372 2,100,050 Rooms 31,692 28,897 125,286 122,260 Food and beverage 69,737 65,993 283,940 272,747 Entertainment, retail and other 51,844 56,739 214,435 204,558 General and administrative 101,545 105,555 389,053 391,254 Provision for doubtful accounts 15,509 13,575 33,778 28,304 Pre-opening costs - 425 - 9,496 Depreciation and amortization 94,118 100,299 398,039 405,558 Property charges and other   6,579     2,845     130,649     25,219   Total operating costs and expenses 1,069,057 1,006,879 4,261,552 3,559,446   Operating income   274,806     230,309     1,008,240     625,252     Other income (expense): Interest income 3,015 686 7,654 2,498 Interest expense, net of capitalized interest (55,962 ) (59,663 ) (229,918 ) (222,863 ) Increase (decrease) in swap fair value 2,668 4,749 14,151 (880 ) Loss on extinguishment of debt/exchange offer - (623 ) - (67,990 ) Equity in income from unconsolidated affiliates 230 183 1,472 801 Other   2,352     671     3,968     225   Other income (expense), net   (47,697 )   (53,997 )   (202,673 )   (288,209 )   Income before income taxes 227,109 176,312 805,567 337,043   Benefit (provision) for income taxes   31,153     (4,438 )   19,546     (20,447 )   Net income 258,262 171,874 825,113 316,596   Less: Net income attributable to noncontrolling interests   (67,789 )   (57,632 )   (211,742 )   (156,469 )   Net income attributable to Wynn Resorts, Limited $ 190,473   $ 114,242   $ 613,371   $ 160,127     Basic and diluted income per common share: Net income attributable to Wynn Resorts, Limited:   Basic $ 1.53 $ 0.93 $ 4.94 $ 1.30 Diluted $ 1.52 $ 0.91 $ 4.88 $ 1.29 Weighted average common shares outstanding: Basic 124,247 123,436 124,039   122,787 Diluted 125,606 124,899 125,667 123,939   Dividends declared per common share $ 5.50 $ 8.00 $ 6.50 $ 8.50   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) (unaudited)                                         Three Months EndedYear EndedDecember 31,December 31,   2011     2010     2011     2010     Net income attributable to Wynn Resorts, Limited $ 190,473 $ 114,242 $ 613,371 $ 160,127 Pre-opening costs - 425 - 9,496 Loss on extinguishment of debt/exchange offer - 623 - 67,990 (Increase) decrease in swap fair value (2,668 ) (4,749 ) (14,151 ) 880 Property charges and other 6,579 2,845 130,649 25,219 Adjustment for noncontrolling interest   39     276     (28,735 )   (2,689 ) Adjusted net income attributable to Wynn Resorts, Limited(2) $ 194,423   $ 113,662   $ 701,134   $ 261,023       Adjusted net income attributable to Wynn Resorts, Limited per diluted share $ 1.55   $ 0.91   $ 5.58   $ 2.11     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)                                       Three Months Ended December 31, 2011Las Vegas OperationsMacau OperationsCorporate and OtherTotal   Operating income $ 3,951 $ 233,909 $ 36,946 $ 274,806   Depreciation and amortization 65,045 28,377 696 94,118 Property charges and other 5,387 1,192 - 6,579 Management and royalty fees 5,225 39,913 (45,138 ) - Corporate expense and other 8,094 8,191 4,594 20,879 Stock-based compensation 1,395 1,511 2,657 5,563 Equity in income/(loss) from unconsolidated affiliates (15 ) - 245 230         Adjusted Property EBITDA (1) $ 89,082   $ 313,093 $ -   $ 402,175     Three Months Ended December 31, 2010Las Vegas OperationsMacau OperationsCorporate 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 EndedDecember 31,   2011     2010   Adjusted Property EBITDA (1) $ 402,175 $ 365,187   Pre-opening costs - (425 ) Depreciation and amortization (94,118 ) (100,299 ) Property charges and other (6,579 ) (2,845 ) Corporate expenses and other (20,879 ) (24,679 ) Stock-based compensation (5,563 ) (6,447 ) Interest income 3,015 686 Interest expense, net of capitalized interest (55,962 ) (59,663 ) Increase in swap fair value 2,668 4,749 Loss on extinguishment of debt - (623 ) Other 2,352 671 Benefit (provision) for income taxes   31,153     (4,438 )   Net income 258,262 171,874   Less: Net income attributable to noncontrolling interests   (67,789 )   (57,632 )   Net income attributable to Wynn Resorts, Limited $ 190,473   $ 114,242       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, 2011Las Vegas OperationsMacau OperationsCorporate and OtherTotal   Operating income $ 101,319 $ 765,142 $ 141,779 $ 1,008,240   Depreciation and amortization 263,639 131,706 2,694 398,039 Property charges and other 16,623 114,020 6 130,649 Management and royalty fees 22,229 152,463 (174,692 ) - Corporate expense and other 27,493 27,119 18,375 72,987 Stock-based compensation 7,437 5,782 10,662 23,881 Equity in income from unconsolidated affiliates 296 - 1,176 1,472         Adjusted Property EBITDA (1) $ 439,036   $ 1,196,232 $ -   $ 1,635,268     Year Ended December 31, 2010Las Vegas OperationsMacau OperationsCorporate and OtherTotal   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 EndedDecember 31,   2011     2010   Adjusted Property EBITDA (1) $ 1,635,268 $ 1,162,985   Pre-opening costs - (9,496 ) Depreciation and amortization (398,039 ) (405,558 ) Property charges and other (130,649 ) (25,219 ) Corporate expense and other (72,987 ) (69,491 ) Stock-based compensation (23,881 ) (27,168 ) Interest income 7,654 2,498 Interest expense, net of capitalized interest (229,918 ) (222,863 ) Increase (decrease) in swap fair value 14,151 (880 ) Loss on extinguishment of debt - (67,990 ) Other 3,968 225 Benefit (provision) for income taxes   19,546     (20,447 )   Net income 825,113 316,596   Less: Net income attributable to noncontrolling interests   (211,742 )   (156,469 )   Net income attributable to Wynn Resorts, Limited $ 613,371   $ 160,127         WYNN RESORTS, LIMITED AND SUBSIDIARIES SUPPLEMENTAL DATA SCHEDULE                       Three Months Ended               Year EndedDecember 31, 2011               December 31, 2010               December 31, 2011               December 31, 2010 Room Statistics for Las Vegas Operations:                             Occupancy % 79.1 % 81.8 % 86.1 % 88.0 % Average Daily Rate (ADR)1 $ 250 $ 235 $ 242 $ 210 Revenue per available room (REVPAR)2 $ 197 $ 192 $ 208 $ 185   Other information for Las Vegas Operations: Table games win per unit per day3 $ 6,963 $ 6,585 $ 7,188 $ 5,846 Table Win % 23.3 % 22.5 % 24.9 % 22.2 % Slot machine win per unit per day4 $ 191 $ 179 $ 184 $ 164 Average number of table games 216 210 225 224 Average number of slot machines 2,441 2,585 2,536 2,649   Room Statistics for Macau Operations: Occupancy % 94.2 % 92.3 % 91.8 % 87.8 % Average Daily Rate (ADR)1 $ 322 $ 303 $ 315 $ 291 Revenue per available room (REVPAR)2 $ 304 $ 280 $ 289 $ 256   Other information for Macau Operations: Table games win per unit per day3 $ 25,769 $ 24,769 $ 25,030 $ 20,563 Slot machine win per unit per day4 $ 749 $ 608 $ 760 $ 513 Average number of table games 487 459 481 439 Average number of slot machines 938 1,127 999 1,167   (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 is calculated as gross slot win minus progressive accruals and free play. Wynn Resorts, LimitedSamanta Stewart, 702-770-7555investorrelations@wynnresorts.com