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

2012-02-06

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Wynn Resorts 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.

Wynn Resorts, Limited (Nasdaq: WYNN) 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.

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 Ended						Year Ended
		December 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 Ended						Year Ended
		December 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, 2011
		Las Vegas Operations			Macau Operations		Corporate and Other			Total

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, 2010
		Las Vegas Operations			Macau Operations		Corporate and Other			Total

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 Ended
							December 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, 2011
		Las Vegas Operations		Macau Operations		Corporate and Other			Total

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, 2010