Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the third quarter ended September 30, 2012.
Net revenues for the third quarter of 2012 were $1,298.5 million, compared to $1,298.3 million in the third quarter of 2011. Adjusted property EBITDA (1) was $402.6 million for the third quarter of 2012, compared to $381.1 million in the third quarter last year, as Wynn Las Vegas’ EBITDA increased $25.3 million.
On a US GAAP basis, net income attributable to Wynn Resorts for the third quarter of 2012 was $112.0 million, or $1.11 per diluted share, compared to a net income attributable to Wynn Resorts of $127.1 million, or $1.01 per diluted share in the third quarter of 2011.
Adjusted net income (2) attributable to Wynn Resorts in the third quarter of 2012 was $149.2 million, or $1.48 per diluted share (adjusted EPS) compared to an adjusted net income attributable to Wynn Resorts of $132.6 million, or $1.05 per diluted share in the third quarter of 2011. In the third quarter of 2012, we had 100.9 million diluted shares outstanding compared to 125.9 million diluted shares outstanding in the third 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 an $8.00 cash dividend, which includes the $0.50 per common share quarterly dividend. This dividend will be payable on November 20, 2012, to stockholders of record on November 7, 2012 and the stock will begin to trade ex-dividend on November 5, 2012.
Additionally, the Company plans on increasing its quarterly dividend to $1.00 per share in 2013.
Macau Operations
In the third quarter of 2012, net revenues were $910.5 million, a 4.3% decrease from the $951.4 million generated in the third quarter of 2011. Adjusted property EBITDA in the third quarter of 2012 was $292.2 million, down 1.3% from $296.0 million in the third quarter of 2011. EBITDA margin on net revenues was 32.1% in the third quarter of 2012 compared to 31.1% in the third 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 $27.6 billion for the third quarter of 2012, a 12.1% decline from $31.4 billion in the third quarter of 2011. VIP table games win as a percentage of turnover (calculated before discounts and commissions) for the quarter was 3.08%, above the expected range of 2.7% to 3.0% and the 2.95% experienced in the third quarter of 2011.
Mass market table games revenue increased 8.3% to $211.3 million in the third quarter 2012 while mass market table games drop decreased 2.6% to $686.1 million for the quarter. Mass market table games win percentage (calculated before discounts) of 30.8% was above our revised range of 28% to 30% and above the 27.7% generated in the 2011 quarter.
Slot machine handle declined 13.2% to $983.7 million as compared to the prior year quarter. Win per unit per day was 10.9% lower at $620, compared to $696 in the third quarter of 2011.
We achieved an Average Daily Rate (ADR) of $307 for the third quarter of 2012, 2.5% below the $315 reported in the 2011 quarter. The property’s occupancy was 94.2%, compared to 93.7% during the prior year period, and revenue per available room (REVPAR) was $289 in the 2012 quarter, 2.0% below the $295 reported in the prior year quarter. Gross non-casino revenues decreased 5.3% during the quarter to $97.2 million, primarily due to an 8.5% decline in retail revenues resulting from lower sales in some of our watch stores.
We currently have 492 tables (286 VIP tables, 196 mass market tables and 10 poker tables) and 891 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, hotel, 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. The Company expects to establish a guaranteed maximum price for the project construction costs in the first half of 2013.
Las Vegas Operations
For the third quarter ended September 30, 2012, net revenues were $388.0 million, an 11.8% increase from the third quarter of 2011. Adjusted property EBITDA of $110.4 million was up 29.7% versus the $85.1 million generated in the comparable period in 2011. EBITDA margin on net revenues was 28.4% in the third quarter of 2012 compared to 24.5% in the third quarter of 2011.
Net casino revenues in the third quarter of 2012 were $155.6 million, up 22.6% from the third quarter of 2011. Table games drop of $682.3 million was up 13.1% compared to $603.5 million in the 2011 quarter and table games win percentage of 21.9% was within the property’s expected range of 21% to 24% and above the 18.3% reported in the 2011 quarter. Slot machine handle of $723.5 million was 7.4% above the $673.8 million in the comparable period of 2011 and net slot win was up 7.3% to $46.3 million.
Gross non-casino revenues for the quarter were $280.1 million, 5.3% higher than in the third quarter of 2011 due to increases in hotel and food and beverage revenues, which were partially offset by lower retail and entertainment revenues.
Room revenues were up 1.4% to $91.0 million during the quarter, versus $89.7 million in the third quarter of 2011. Average Daily Rate (ADR) was up 1.9% to $244 while occupancy of 85.7% was below the 88.3% experienced in the third quarter of 2011. Revenue per available room (REVPAR) was $209 in the 2012 quarter, 1.2% below the $212 reported in the prior year quarter.
Food and beverage revenues increased 11.1% to $132.6 million primarily due to the strength in the nightclub business. Retail revenues were $21.4 million in the quarter, only down 0.2% despite the reduction in retail square footage from the reconfiguration of the Encore retail area. Entertainment revenues declined 1.4% to $21.6 million from the third quarter of 2011.
Balance Sheet and other
Total cash and investments as of September 30, 2012 were $2.7 billion. Total debt outstanding at the end of the quarter was $5.8 billion, including $3.1 billion of Wynn Las Vegas debt, $749 million of Wynn Macau debt and $1.9 billion at the parent company.
On July 31, 2012, Wynn Macau amended and restated its credit facilities and increased the availability under its bank facility to approximately $2.3 billion, consisting of an approximately $750 million term loan facility and an approximately $1.55 billion revolving credit facility. On September 17, 2012, Wynn Las Vegas terminated its credit agreement.
In connection with amending the Wynn Macau credit facilities and the termination of the Wynn Las Vegas credit agreement, we expensed $19.7 million of deferred financing costs and third party fees during the September quarter.
During the third quarter of 2012, we spent approximately $24.0 million on our Cotai Project.
