Hotel Online 
News for the Hospitality Executive


advertisement

 
Wynn Resorts Reports 2nd Quarter 2012 Net Income of $138.1 million
Compared to $122 million Same Quarter 2011; Revenues for 2nd Quarter
Declined by 7.1% in Macau Operations and 11.6% in Las Vegas Operations

LAS VEGAS--July 17, 2012--Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the second quarter ended June 30, 2012.

Net revenues for the second quarter of 2012 were $1,253.2 million, compared to $1,367.4 million in the second quarter of 2011. The revenue decline resulted from a 7.1% decrease in revenues from our Macau Operations and an 11.6% decline in our revenues in Las Vegas, as both properties were negatively impacted by lower hold in the 2012 quarter. Adjusted property EBITDA (1) was $384.1 million for the second quarter of 2012, compared to $447.0 million in the second quarter of 2011.

On a US GAAP basis, net income attributable to Wynn Resorts for the second quarter of 2012 was $138.1 million, or $1.37 per diluted share, compared to a net income attributable to Wynn Resorts of $122.0 million, or $0.97 per diluted share in the second quarter of 2011. 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.

Adjusted net income (2) attributable to Wynn Resorts in the second quarter of 2012 was $139.0 million, or $1.38 per diluted share (adjusted EPS) compared to an adjusted net income attributable to Wynn Resorts of $200.8 million, or $1.60 per diluted share in the second quarter of 2011. In the second quarter of 2012, we had 101.0 million diluted shares outstanding compared to 125.7 million diluted shares outstanding in the second quarter of 2011, largely due to the redemption of Aruze USA’s 24.5 million shares on February 18, 2012.

Wynn Resorts 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 August 14, 2012, to stockholders of record on July 31, 2012.

Macau Operations

In the second quarter of 2012, net revenues were $907.6 million, a 7.1% decrease from the $976.5 million generated in the second quarter of 2011. Adjusted property EBITDA in the second quarter of 2012 was $302.2 million, down 3.9% from $314.3 million in the second quarter of 2011.

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 $30.3 billion for the second quarter of 2012, a 7.2% decline from $32.7 billion in the second quarter of 2011. VIP table games win as a percentage of turnover (calculated before discounts and commissions) for the quarter was 2.79%, which was at the lower end of the expected range of 2.7% to 3.0% and lower than the 2.89% experienced in the second quarter of 2011.

Despite a 10.0% decrease in the number of mass market table games, drop in the mass market segment was down only 2.7%, from $690.3 million in the second quarter of 2011 to $671.8 million in the June 2012 quarter. Mass market table games win percentage (calculated before discounts) of 29.8% was higher than our expected range of 26% to 28% and above the 27.8% generated in the 2011 quarter.

Slot machine handle declined 22.1% to $1.2 billion as compared to the prior year quarter. Win per unit per day was 4.9% lower at $752, compared to $791 in the second quarter of 2011 as slot count went down by 114 machines.

We achieved an Average Daily Rate (ADR) of $317 for the second quarter of 2012, 1.0% above the $314 reported in the 2011 quarter. The property’s occupancy was 90.0%, compared to 90.5% during the prior year period, and revenue per available room (REVPAR) was $286 in the 2012 quarter, 0.4% above the $284 reported in the prior year quarter. Gross non-casino revenues increased 2.2% during the quarter to $96.7 million.

We currently have 504 tables (290 VIP tables, 203 mass market tables and 11 poker tables) and 939 slot machines.

On May 2, 2012, Wynn Macau’s land concession contract was published in the official gazette of Macau. This concession contract has an initial term of 25 years with the right to renew it for additional successive periods, subject to government approval. The Company anticipates constructing a full scale integrated resort containing a casino, approximately 2,000 rooms and suites, convention, retail, entertainment and food and beverage offerings on this land. The Company currently estimates the project budget to be in the range of $3.5 billion to $4.0 billion.

Las Vegas Operations

For the second quarter ended June 30, 2012, net revenues were $345.6 million, an 11.6% decline from the second quarter of 2011. Adjusted property EBITDA of $81.9 million was down 38.3% versus the $132.7 million generated in the comparable period in 2011. EBITDA margin on net revenues was 23.7% in the second quarter of 2012 compared to 34.0% in the second quarter of 2011.

Net casino revenues in the second quarter of 2012 were $98.6 million, down 37.7% from the second quarter of 2011. Table games drop of $575.6 million was up 7.6% compared to $534.7 million in the 2011 quarter and table games win percentage of 15.0% was significantly below the property’s expected range of 21% to 24% and the 27.6% reported in the 2011 quarter. Slot machine handle of $707.8 million was 3.2% above the $685.6 million in the comparable period of 2011 and net slot win was flat due to lower hold in the 2012 quarter.

Gross non-casino revenues for the quarter were $290.7 million, 5.5% higher than in the second quarter of 2011 due to increases in the hotel and food and beverage segments, which were partially offset by lower retail and entertainment revenues.

Room revenues were up 5.6% to $96.2 million during the quarter, versus $91.1 million in the second quarter of 2011. Average Daily Rate (ADR) was up 5.6% to $254 while occupancy of 87.6% was below the 89.2% experienced in the second quarter of 2011. Revenue per available room (REVPAR) was $222 in the 2012 quarter, 3.8% above the $214 reported in the prior year quarter. During the second quarter of 2012, we had all rooms available for sale while 1.7% of the rooms in the second quarter of 2011 were out due to renovations.

Food and beverage revenues increased 9.8% to $138.4 million primarily due to the strength in the nightclub business. Retail revenues were $21.0 million in the quarter, down 8.0% from last year as we reconfigured the Encore retail area and are in the process of rebranding several retail outlets. Entertainment revenues declined 4.9% to $18.1 million from the second quarter of 2011.

Balance Sheet and other

During the quarter ended June 30, 2012, the company recorded an adjustment to its reserve estimates for casino accounts receivable based on the results of historical collection patterns and current collection trends. This change in estimate was the primary factor that resulted in a $17.3 million credit to the provision for doubtful accounts for the quarter ended June 30, 2012.

Total cash balance at June 30, 2012 was $1.9 billion. Total debt outstanding at the end of the quarter was $5.5 billion, including $3.1 billion of Wynn Las Vegas debt, $403.5 million of Wynn Macau debt and $1.96 billion at the parent company.

Conference Call Information

The Company will hold a conference call to discuss its results on Tuesday, July 17, 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, 2011 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/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 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 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 Ended




Six Months Ended





June 30,




June 30,





2012


2011




2012


2011




















Operating revenues:


















Casino


$ 953,390



$ 1,082,043





$ 2,002,669



$ 2,088,348

Rooms



124,880




119,998






242,383




235,379

Food and beverage



161,137




147,787






296,277




276,651

Entertainment, retail and other



101,402




102,416






207,311




201,370

Gross revenues



1,340,809




1,452,244






2,748,640




2,801,748

Less: promotional allowances



(87,602 )



(84,891 )





(181,935 )



(174,123 )

Net revenues



1,253,207




1,367,353






2,566,705




2,627,625




















Operating costs and expenses:


















Casino



645,688




684,505






1,320,344




1,308,860

Rooms



33,265




31,887






63,249




62,459

Food and beverage



84,522




74,956






154,918




140,953

Entertainment, retail and other



46,108




54,164






97,766




110,439

General and administrative



99,777




91,912






205,727




179,573

Provision for doubtful accounts



(17,279 )



3,784






785




13,945

Depreciation and amortization



93,463




102,052






185,868




203,399

Property charges and other



3,540




111,060






13,826




114,408

Total operating costs and expenses



989,084




1,154,320






2,042,483




2,134,036




















Operating income



264,123




213,033






524,222




493,589




















Other income (expense):


















Interest income



2,483




1,577






4,048




1,976

Interest expense, net of capitalized interest



(73,874 )



(58,231 )





(135,935 )



(116,494 )

Increase in swap fair value



2,646




3,135






4,930




7,365

Loss on retirement of debt



-




-






(4,828 )



-

Equity in income from unconsolidated affiliates



256




264






721




866

Other



(1,081 )



784






(313 )



1,701

Other income (expense), net



(69,570 )



(52,471 )





(131,377 )



(104,586 )




















Income before income taxes



194,553




160,562






392,845




389,003





















Benefit (provision) for income taxes



4,740




(5,231 )





4,857




(7,337 )




















Net income



199,293




155,331






397,702




381,666





















Less: Net income attributable to noncontrolling interest



(61,229 )



(33,300 )





(119,074 )



(85,831 )




















Net income attributable to Wynn Resorts, Limited


$ 138,064



$ 122,031





$ 278,628



$ 295,835




















Basic and diluted income per common share:


















Net income attributable to Wynn Resorts, Limited:


















Basic


$ 1.38



$ 0.98





$ 2.62



$ 2.39

Diluted


$ 1.37



$ 0.97





$ 2.59



$ 2.36

Weighted average common shares outstanding:


















Basic



99,782




123,970






106,243





123,864

Diluted



101,010




125,729






107,508




125,567




















Dividends declared per common share:


$ 0.50



$ 0.50





$ 1.00



$ 0.50

























































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, except per share data)
(unaudited)

























Three Months Ended




Six Months Ended





June 30,




June 30,





2012


2011




2012


2011




















Net income attributable to Wynn Resorts, Limited


$ 138,064



$ 122,031





$ 278,628



$ 295,835

Increase in swap fair value



(2,646 )



(3,135 )





(4,930 )



(7,365 )

Property charges and other



3,540




111,060






13,826




114,408

Loss on retirement of debt



-




-






4,828




-

Adjustment for noncontrolling interest



(4 )



(29,204 )





(1,459 )



(28,769 )
Adjusted net income attributable to Wynn Resorts, Limited (2)


$ 138,954



$ 200,752





$ 290,893



$ 374,109








































Adjusted net income attributable to Wynn Resorts, Limited per diluted share


$ 1.38



$ 1.60





$ 2.71



$ 2.98























































WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO ADJUSTED PROPERTY EBITDA
AND ADJUSTED PROPERTY EBITDA TO NET INCOME
(amounts in thousands)
(unaudited)

























Three Months Ended June 30, 2012






Las Vegas

Operations




Macau

Operations




Corporate

and Other




Total



















Operating income


$ 3,538


$ 225,548


$ 35,037



$ 264,123





















Depreciation and amortization



62,776



29,985



702




93,463


Property charges and other



2,174



1,366



-




3,540


Management and royalty fees



5,189



36,374



(41,563 )



-


Corporate expenses and other



6,809



7,840



2,892




17,541


Stock-based compensation



1,328



1,097



2,781




5,206


Equity in income from unconsolidated affiliates





105



-



151




256



















Adjusted Property EBITDA (1)


$ 81,919


$ 302,210


$ -



$ 384,129












































Three Months Ended June 30, 2011






Las Vegas

Operations




Macau

Operations




Corporate

and Other




Total



















Operating income


$ 48,609


$ 123,737


$ 40,687



$ 213,033





















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 expenses 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,














2012


2011
Adjusted Property EBITDA (1)










$ 384,129



$ 447,041





















Depreciation and amortization











(93,463 )



(102,052 )


Property charges and other











(3,540 )



(111,060 )


Corporate expenses and other











(17,541 )



(14,701 )


Stock-based compensation











(5,206 )



(5,931 )


Interest income











2,483




1,577


Interest expense, net of capitalized interest











(73,874 )



(58,231 )


Increase in swap fair value











2,646




3,135


Other











(1,081 )



784


Benefit (provision) for income taxes











4,740




(5,231 )



















Net income











199,293




155,331





















Less: Net income attributable to noncontrolling interest











(61,229 )



(33,300 )



















Net income attributable to Wynn Resorts, Limited










$ 138,064



$ 122,031



















































WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME TO ADJUSTED PROPERTY EBITDA
AND ADJUSTED PROPERTY EBITDA TO NET INCOME
(amounts in thousands)
(unaudited)

























Six Months Ended June 30, 2012






Las Vegas

Operations




Macau

Operations




Corporate

and Other




Total



















Operating income


$ 23,964


$ 437,271



$ 62,987



$ 524,222





















Depreciation and amortization



126,194



58,273




1,401




185,868


Property charges and other



5,892



7,934




-




13,826


Management and royalty fees



10,640



74,433




(85,073 )



-


Corporate expenses and other



13,196



14,388




14,711




42,295


Stock-based compensation



2,699



(316 )



5,471




7,854


Equity in income from unconsolidated affiliates





218



-




503




721



















Adjusted Property EBITDA (1)


$ 182,803


$ 591,983



$ -



$ 774,786












































Six Months Ended June 30, 2011






Las Vegas

Operations




Macau

Operations




Corporate

and Other




Total



















Operating income


$ 97,783


$ 318,139



$ 77,667



$ 493,589





















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 expenses 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,














2012


2011
Adjusted Property EBITDA (1)










$ 774,786



$ 851,999





















Depreciation and amortization











(185,868 )



(203,399 )


Property charges and other











(13,826 )



(114,408 )


Corporate expenses and other











(42,295 )



(27,061 )


Stock-based compensation











(7,854 )



(12,676 )


Interest income











4,048




1,976


Interest expense, net of capitalized interest











(135,935 )



(116,494 )


Increase in swap fair value











4,930




7,365


Loss on retirement of debt











(4,828 )



-


Other











(313 )



1,701


Benefit (provision) for income taxes











4,857




(7,337 )



















Net income











397,702




381,666





















Less: Net income attributable to noncontrolling interest











(119,074 )



(85,831 )



















Net income attributable to Wynn Resorts, Limited










$ 278,628



$ 295,835











































WYNN RESORTS, LIMITED AND SUBSIDIARIES

SUPPLEMENTAL DATA SCHEDULE














Three Months Ended


Six Months Ended




June 30,

2012




June 30,

2011




June 30,

2012




June 30,

2011

Room Statistics for Las Vegas operations:















Occupancy %



87.6 %



89.2 %



83.5 %



88.5 %
Average Daily Rate (ADR)1


$ 254



$ 240



$ 254



$ 240
Revenue per available room (REVPAR)2


$ 222



$ 214



$ 212



$ 212

















Other information for Las Vegas operations:















Table games win per unit per day3


$ 4,384



$ 7,062



$ 5,923



$ 8,283
Table Win %



15.0 %



27.6 %



19.2 %



29.1 %
Slot machine win per unit per day4


$ 186



$ 172



$ 192



$ 179
Average number of table games



217




229




219




227
Average number of slot machines



2,398




2,593




2,394




2,595

















Room Statistics for Macau:















Occupancy %



90.0 %



90.5 %



90.7 %



89.6 %
Average Daily Rate (ADR)1


$ 317



$ 314



$ 321



$ 311
Revenue per available room (REVPAR)2


$ 286



$ 284



$ 291



$ 278

















Other information for Macau:















Table games win per unit per day3


$ 23,479



$ 25,872



$ 23,908



$ 24,591
Slot machine win per unit per day4


$ 752



$ 791



$ 812



$ 797
Average number of table games



490




482




490




475
Average number of slot machines



926




1,040




927




1,026

















(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.





Contact:

Wynn Resorts, Limited
Samanta Stewart, 702-770-7555
investorrelations@wynnresorts.com
 

Receive Your Hospitality Industry Headlines via Email for Free! Subscribe Here

To Learn More About Your News Being Published on Hotel-Online Inquire Here


To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch

Home | Welcome | Hospitality News
| Industry Resources

Please contact Hotel.Online with your comments and suggestions.