Wynn Resorts, Limited Reports Second Quarter 2022 Results

·15 min read

LAS VEGAS, August 09, 2022--(BUSINESS WIRE)--Wynn Resorts, Limited (NASDAQ: WYNN) (the "Company") today reported financial results for the second quarter ended June 30, 2022.

Operating revenues were $908.8 million for the second quarter of 2022, a decrease of $81.3 million, from $990.1 million for the second quarter of 2021. Net loss attributable to Wynn Resorts, Limited was $130.1 million, or $1.14 per diluted share, for the second quarter of 2022, compared to net loss attributable to Wynn Resorts, Limited of $131.4 million, or $1.15 per diluted share, in the second quarter of 2021. Adjusted Property EBITDA(1) was $179.2 million for the second quarter of 2022, compared to Adjusted Property EBITDA of $206.9 million in the second quarter of 2021.

"Our second quarter financial results reflect continued strength at both Wynn Las Vegas and Encore Boston Harbor. Our teams' ongoing focus on five-star hospitality and new experiences at our market-leading properties combined with very strong customer demand drove a new all-time quarterly record for Adjusted Property EBITDA at Wynn Las Vegas and a second quarter record at Encore Boston Harbor," said Craig Billings, CEO of Wynn Resorts, Limited. "In Macau, while COVID-related travel restrictions continued to impact our results, we remain confident that the market will benefit from the return of visitation over time."

Consolidated Results

Operating revenues were $908.8 million for the second quarter of 2022, a decrease of $81.3 million, from $990.1 million for the second quarter of 2021. For the second quarter of 2022, operating revenues increased $206.0 million and $44.9 million at our Las Vegas Operations and Encore Boston Harbor, respectively, and decreased $211.7 million and $125.4 million at Wynn Palace and Wynn Macau, respectively, from the second quarter of 2021.

Net loss attributable to Wynn Resorts, Limited was $130.1 million, or $1.14 per diluted share, for the second quarter of 2022, compared to net loss attributable to Wynn Resorts, Limited of $131.4 million, or $1.15 per diluted share, in the second quarter of 2021. Adjusted net loss attributable to Wynn Resorts, Limited(2) was $93.7 million, or $0.82 per diluted share, for the second quarter of 2022, compared to adjusted net loss attributable to Wynn Resorts, Limited of $128.7 million, or $1.12 per diluted share, for the second quarter of 2021.

Adjusted Property EBITDA was $179.2 million for the second quarter of 2022, compared to Adjusted Property EBITDA of $206.9 million in the second quarter of 2021. For the second quarter of 2022, Adjusted Property EBITDA increased $93.5 million and $16.8 million at our Las Vegas Operations and Encore Boston Harbor, respectively, and decreased $103.5 million and $54.5 million at Wynn Palace and Wynn Macau, respectively, from the second quarter of 2021.

Property Results

Macau Operations

The results of operations of our Macau Operations for the second quarter of 2022 continued to be negatively impacted by certain travel-related restrictions and conditions, including COVID-19 testing and other mitigation procedures, related to the COVID-19 pandemic.

Wynn Palace

Operating revenues from Wynn Palace were $58.7 million for the second quarter of 2022, a decrease of $211.7 million from $270.4 million for the second quarter of 2021. Adjusted Property EBITDA from Wynn Palace was $(50.0) million for the second quarter of 2022, compared to $53.6 million for the second quarter of 2021. VIP table games loss as a percentage of turnover was (1.94)%, below the property's expected range of 3.1% to 3.4% and below the 3.95% experienced in the second quarter of 2021. Table games win percentage in mass market operations was 19.7%, below the 23.1% experienced in the second quarter of 2021.

Wynn Macau

Operating revenues from Wynn Macau were $58.6 million for the second quarter of 2022, a decrease of $125.4 million from $184.0 million for the second quarter of 2021. Adjusted Property EBITDA from Wynn Macau was $(40.4) million for the second quarter of 2022, compared to $14.1 million for the second quarter of 2021. VIP table games win as a percentage of turnover was 4.79%, above the property's expected range of 3.1% to 3.4% and above the 2.64% experienced in the second quarter of 2021. Table games win percentage in mass market operations was 14.1%, below the 19.2% experienced in the second quarter of 2021.

Las Vegas Operations

Operating revenues from our Las Vegas Operations were $561.1 million for the second quarter of 2022, an increase of $206.0 million from $355.1 million for the second quarter of 2021. Adjusted Property EBITDA from our Las Vegas Operations for the second quarter of 2022 was $226.7 million, compared to $133.2 million for the second quarter of 2021. Table games win percentage for the second quarter of 2022 was 24.6%, within the property's expected range of 22% to 26% and above the 23.2% experienced in the second quarter of 2021.

Encore Boston Harbor

Operating revenues from Encore Boston Harbor were $210.2 million for the second quarter of 2022, an increase of $44.9 million from $165.2 million for the second quarter of 2021. Adjusted Property EBITDA from Encore Boston Harbor for the second quarter of 2022 was $63.7 million, compared to $46.9 million for the second quarter of 2021. Table games win percentage for the second quarter of 2022 was 21.9%, within the property's expected range of 18% to 22% and above the 21.2% experienced in the second quarter of 2021.

Balance Sheet

Our cash and cash equivalents as of June 30, 2022 totaled $2.01 billion, comprised of approximately $1.11 billion held by Wynn Macau, Limited ("WML") and subsidiaries, approximately $419.6 million held by Wynn Resorts Finance excluding WML and subsidiaries, and approximately $488.2 million at Corporate and other.

As of June 30, 2022, the available borrowing capacity under the Wynn Resorts Finance Revolver and WM Cayman II Revolver was $835.6 million and $211.5 million, respectively.

Total current and long-term debt outstanding at June 30, 2022 was $11.91 billion, comprised of $5.97 billion of Macau related debt, $3.13 billion of Wynn Las Vegas debt, $2.20 billion of Wynn Resorts Finance debt, and $613.2 million of debt held by the retail joint venture which we consolidate.

In the second quarter of 2022, the Company repurchased 2,381,928 shares of its common stock at an average price of $57.70 per share, for an aggregate cost of $137.4 million.

In the first quarter of 2022, the Company entered into a sale-leaseback arrangement with respect to certain real estate assets related to Encore Boston Harbor. Upon closing of the related transactions, currently expected to take place in the fourth quarter of 2022 subject to regulatory approvals and customary closing conditions, we expect to receive cash consideration of approximately $1.7 billion and to concurrently enter into a lease agreement for the purpose of continuing to operate the Encore Boston Harbor property. We expect to use the cash proceeds from the sale of the real estate assets for general corporate purposes, which may include the repayment of certain debt obligations.

Conference Call and Other Information

The Company will hold a conference call to discuss its results, including the results of Wynn Resorts Finance, LLC and Wynn Las Vegas, LLC, on August 9, 2022 at 2:00 p.m. PT (5:00 p.m. ET). Interested parties are invited to join the call by accessing a live audio webcast at http://www.wynnresorts.com.

On or before August 12, 2022, the Company will make Wynn Resorts Finance, LLC and Wynn Las Vegas, LLC financial information for the quarter ended June 30, 2022 available to noteholders, prospective investors, broker-dealers and securities analysts. Please contact our investor relations office at 702-770-7555 or at investorrelations@wynnresorts.com, to obtain access to such financial information.

Forward-looking Statements

This release contains forward-looking statements regarding operating trends and future results of operations. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those we express in these forward-looking statements, including, but not limited to, the COVID-19 pandemic, and the continued impact of its consequences, extensive regulation of our business, pending or future legal proceedings, ability to maintain gaming licenses and concessions (including with respect to our ability to extend or renew our gaming concession in Macau, which expires on December 31, 2022, and the amendments to the Macau gaming law), dependence on key employees, general global political and economic conditions, adverse tourism trends, dependence on a limited number of resorts, competition in the casino/hotel and resort industries, uncertainties over the development and success of new gaming and resort properties, construction risks, cybersecurity risk and our leverage and debt service. 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, 2021 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 or revise its forward-looking statements as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures

(1) "Adjusted Property EBITDA" is net loss before interest, income taxes, depreciation and amortization, pre-opening expenses, property charges and other, management and license fees, corporate expenses and other (including intercompany golf course, meeting and convention, and water rights leases), stock-based compensation, change in derivatives fair value, loss on extinguishment of debt, and other non-operating income and expenses. We use Adjusted Property EBITDA to manage the operating results of our segments. 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, as well as a basis for determining certain incentive compensation. We also present Adjusted Property EBITDA because it is used by some investors 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 GAAP. In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including us, have historically excluded from their EBITDA calculations preopening 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 our 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 loss, 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. We have significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, income taxes and other non-recurring charges, which are not reflected in Adjusted Property EBITDA. Also, our 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 loss attributable to Wynn Resorts, Limited" is net loss attributable to Wynn Resorts, Limited before pre-opening expenses, property charges and other, change in derivatives fair value, loss on extinguishment of debt, and foreign currency remeasurement and other, net of noncontrolling interests. Adjusted net loss attributable to Wynn Resorts, Limited and adjusted net loss attributable to Wynn Resorts, Limited per diluted share are presented as supplemental disclosures to financial measures in accordance with GAAP because management believes that these non-GAAP 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 net loss and loss per share computed in accordance with GAAP, as an additional basis for assessing period-to-period results of our business. Adjusted net loss attributable to Wynn Resorts, Limited and adjusted net loss attributable to Wynn Resorts, Limited per diluted 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 loss attributable to Wynn Resorts, Limited to adjusted net loss attributable to Wynn Resorts, Limited, (ii) operating income (loss) to Adjusted Property EBITDA, and (iii) net loss attributable to Wynn Resorts, Limited to Adjusted Property EBITDA.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2022

2021

2022

2021

Operating revenues:

Casino

$

359,585

$

602,746

$

849,447

$

1,118,964

Rooms

201,298

137,765

371,674

213,955

Food and beverage

229,816

149,142

403,836

217,651

Entertainment, retail and other

118,133

100,460

237,209

176,225

Total operating revenues

908,832

990,113

1,862,166

1,726,795

Operating expenses:

Casino

244,064

381,615

568,143

733,581

Rooms

65,070

50,552

123,785

84,087

Food and beverage

185,471

117,106

332,127

191,054

Entertainment, retail and other

74,985

80,922

163,889

154,381

General and administrative

200,378

197,545

397,158

377,319

Provision for credit losses

(3,487

)

441

(3,145

)

7,808

Pre-opening

4,502

2,495

6,949

4,122

Depreciation and amortization

162,968

183,307

347,524

368,428

Property charges and other

26,909

5,651

72,629

11,268

Total operating expenses

960,860

1,019,634

2,009,059

1,932,048

Operating loss

(52,028

)

(29,521

)

(146,893

)

(205,253

)

Other income (expense):

Interest income

2,691

720

3,971

1,624

Interest expense, net of amounts capitalized

(154,830

)

(150,424

)

(306,988

)

(303,276

)

Change in derivatives fair value

1,562

972

8,962

5,381

Loss on extinguishment of debt

(1,322

)

Other

(10,099

)

5,553

(25,226

)

(5,540

)

Other income (expense), net

(160,676

)

(143,179

)

(319,281

)

(303,133

)

Loss before income taxes

(212,704

)

(172,700

)

(466,174

)

(508,386

)

Provision for income taxes

(718

)

(697

)

(1,858

)

(1,190

)

Net loss

(213,422

)

(173,397

)

(468,032

)

(509,576

)

Less: net loss attributable to noncontrolling interests

83,371

42,028

154,657

97,229

Net loss attributable to Wynn Resorts, Limited

$

(130,051

)

$

(131,369

)

$

(313,375

)

$

(412,347

)

Basic and diluted net loss per common share:

Net loss attributable to Wynn Resorts, Limited:

Basic

$

(1.14

)

$

(1.15

)

$

(2.73

)

$

(3.66

)

Diluted

$

(1.14

)

$

(1.15

)

$

(2.73

)

$

(3.66

)

Weighted average common shares outstanding:

Basic

114,471

114,545

114,749

112,792

Diluted

114,471

114,545

114,749

112,792

WYNN RESORTS, LIMITED AND SUBSIDIARIES

RECONCILIATION OF NET LOSS ATTRIBUTABLE TO WYNN RESORTS, LIMITED

TO ADJUSTED NET LOSS ATTRIBUTABLE TO WYNN RESORTS, LIMITED

(in thousands, except per share data)

(unaudited)

Three Months Ended
June 30,

Six Months Ended
June 30,

2022

2021

2022

2021

Net loss attributable to Wynn Resorts, Limited

$

(130,051

)

$

(131,369

)

$

(313,375

)

$

(412,347

)

Pre-opening expenses

4,502

2,495

6,949

4,122

Property charges and other

26,909

5,651

72,629

11,268

Change in derivatives fair value

(1,562

)

(972

)

(8,962

)

(5,381

)

Loss on extinguishment of debt

1,322

Foreign currency remeasurement and other

10,099

(5,553

)

25,226

5,540

Income tax impact on adjustments

(8

)

(72

)

(8

)

(72

)

Noncontrolling interests impact on adjustments

(3,618

)

1,090

(15,807

)

(1,178

)

Adjusted net loss attributable to Wynn Resorts, Limited

$

(93,729

)

$

(128,730

)

$

(233,348

)

$

(396,726

)

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

$

(0.82

)

$

(1.12

)

$

(2.03

)

$

(3.52

)

Weighted average common shares outstanding - diluted

114,471

114,545

114,749

112,792

WYNN RESORTS, LIMITED AND SUBSIDIARIES

RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA

(in thousands)

(unaudited)

Three Months Ended June 30, 2022

Operating income (loss)

Pre-opening expenses

Depreciation and amortization

Property charges and other

Management and license fees

Corporate expenses and other

Stock-based compensation

Adjusted Property EBITDA

Macau Operations:

Wynn Palace

$

(107,742

)

$

$

51,606

$

313

$

2,258

$

1,587

$

2,028

$

(49,950

)

Wynn Macau

(73,479

)

19,556

6,478

2,272

1,612

3,171

(40,390

)

Other Macau

(4,103

)

971

4

2,547

581

Total Macau Operations

(185,324

)

72,133

6,795

4,530

5,746

5,780

(90,340

)

Las Vegas Operations

142,826

3,547

45,750

955

26,349

5,576

1,703

226,706

Encore Boston Harbor

13,760

37,432

19

10,164

1,941

430

63,746

Wynn Interactive

(57,321

)

955

5,373

26,395

2,426

1,219

(20,953

)

Corporate and other

34,031

2,280

(7,255

)

(41,043

)

6,524

5,463

Total

$

(52,028

)