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Wynn Resorts Reports 4Q and Year End ‘13 Results

Friday, January 31, 2014
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Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the fourth quarter and year ended December 31, 2013.

Net revenues for the fourth quarter of 2013 were $1,519.9 million, compared to $1,289.1 million in the fourth quarter of 2012. The growth was driven by a 24.6% revenue increase from our Macau operations and 2.4% higher net revenues from our Las Vegas operations. Adjusted property EBITDA (1) was $498.4 million for the fourth quarter of 2013, a 25.1% increase from $398.5 million in the fourth quarter of 2012.

For the full year, net revenues were $5,620.9 million in 2013, up 9.1% from $5,154.3 million in 2012. Adjusted property EBITDA grew 14.9% to reach an annual record of $1,810.8 million in 2013, a result of record annual performances at both Wynn Macau and Wynn Las Vegas. For 2013, adjusted property EBITDA at Wynn Macau rose 13.4% to $1,324.1 million and increased 19.1% to $486.7 million at Wynn Las Vegas.

On a US GAAP basis, net income attributable to Wynn Resorts for the fourth quarter of 2013 was $213.9 million, or $2.10 per diluted share, compared to a net income attributable to Wynn Resorts of $111.4 million, or $1.10 per diluted share, in the fourth quarter of 2012. Such figures for the full year were $728.7 million, or $7.17 per diluted share, in 2013 and $502.0 million, or $4.82 per diluted share, in 2012.

Adjusted net income attributable to Wynn Resorts (2) in the fourth quarter of 2013 was $231.2 million, or $2.27 per diluted share (adjusted EPS), compared to an adjusted net income attributable to Wynn Resorts of $118.2 million, or $1.17 per diluted share, in the fourth quarter of 2012. For the full year, adjusted net income attributable to Wynn Resorts rose significantly in 2013 to $776.8 million, or $7.64 per diluted share. This amount compares to $558.4 million, or $5.36 per diluted share, in 2012.

Wynn Resorts also announced today that the Company has approved a cash dividend for the quarter of $1.25 per common share. This dividend will be payable on February 27, 2014, to stockholders of record on February 13, 2014.

Macau Operations
In the fourth quarter of 2013, net revenues were $1,119.9 million, a 24.6% increase from the $898.7 million generated in the fourth quarter of 2012. Adjusted property EBITDA in the fourth quarter of 2013 reached a record $374.2 million, up 32.1% from $283.2 million in the fourth quarter of 2012.

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 $34.4 billion for the fourth quarter of 2013, a 23.9% increase from $27.7 billion in the fourth quarter of 2012. VIP table games win as a percentage of turnover (calculated before commissions) for the quarter was 2.92%, within the expected range of 2.7% to 3.0% and below the 2.96% experienced in the fourth quarter of 2012.

Table games win in the mass market segment increased by 34.6% in the fourth quarter to $292.9 million. Mass market table games win per unit per day increased by 22.5% to $14,552 from $11,875 in the fourth quarter of 2012. Drop in the mass market segment was $691.8 million in the fourth quarter of 2013, down 1.1% from the December 2012 quarter, while the segment's win percentage of 42.3% compares to 31.1% in last year's fourth quarter and sequentially to 38.0% in the third quarter of 2013. Note that customers purchase mass market gaming chips at either the gaming tables or the casino cage. Chips purchased at the casino cage are excluded from table games drop and will increase the expected win percentage. With the increased purchases at the casino cage, we believe the relevant indicator of volumes in the mass market segment should be table games win.

Slot machine handle of $1.4 billion for the fourth quarter of 2013 was 28.3% above the prior-year quarter, and slot win increased 26.8% compared to the prior-year period. Win per unit per day was 38.5% higher at $879, compared to $635 in the fourth quarter of 2012. The average number of slots in the 2013 fourth quarter declined by 81 machines versus the 2012 period due to various changes designed to enhance the comfort of the casino floor.

As of January 26, 2014, we have 513 tables (283 VIP tables, 220 mass market tables and 10 poker tables) and 866 slot machines at Wynn Macau.

For the fourth quarter of 2013, we achieved an average daily rate (ADR) of $315, modestly above the $314 reported in the 2012 fourth quarter. Occupancy at Wynn Macau of 96.7% compares to 96.5% in the prior-year period, and revenue per available room (REVPAR) rose 0.6% to $304 in the 2013 quarter from $303 in last year's fourth quarter. Gross non-casino revenues increased 3.9% during the quarter to $108.5 million.

During the first half of 2013, we began a renovation of the approximately 600 guestrooms in the original Wynn Macau tower, resulting in an approximate 3% reduction in the number of available room-nights in the 2013 fourth quarter versus the prior-year period. We completed the guestroom renovation in mid-December.

Wynn Palace Project in Macau
The Company is currently constructing Wynn Palace, a full-scale integrated resort containing a 1,700-room hotel, performance lake, meeting space, casino, spa, retail offerings, and food and beverage outlets on Cotai in Macau. In July 2013, we signed a $2.6 billion guaranteed maximum price (GMP) contract for the project's construction. The total project budget, including construction costs, capitalized interest, pre-opening expenses, land costs and financing fees, is $4.0 billion. We expect to open our resort on Cotai in the first half of 2016.

During the fourth quarter of 2013, we invested approximately $184.9 million in our Cotai project, taking the total investment to date to $704 million.

Las Vegas Operations
For the quarter ended December 31, 2013, net revenues were $400.0 million, a 2.4% increase from $390.4 million in the fourth quarter of 2012. Adjusted property EBITDA was $124.2 million, up 7.7% from the $115.3 million generated in the comparable period in 2012. EBITDA margin on net revenues rose to 31.0% in the fourth quarter of 2013, from 29.5% in the fourth quarter of 2012.

Net casino revenues in the fourth quarter of 2013 were $202.3 million, a 12.1% increase from the fourth quarter of 2012. Table games drop of $724.4 million was up 6.6% compared to $679.4 million in the 2012 quarter. Table games win percentage was 28.8%, above both the property's expected range of 21% to 24% and the 26.8% reported in the 2012 quarter. Slot machine handle of $731.9 million was 3.5% below the $758.4 million in the comparable period of 2012, while net slot win was down 6.3% due in part to lower hold in the 2013 quarter.

Room revenues were up 2.3% to $89.8 million during the quarter, versus $87.8 million in the fourth quarter of 2012. Average daily rate (ADR) modestly improved to $256 from $254, and occupancy increased to 80.8% from 79.2% in the fourth quarter of 2012. Revenue per available room (REVPAR) was $207 in the 2013 fourth quarter, 3.0% above the $201 reported in the prior-year quarter.

Food and beverage revenues in the fourth quarter of 2013 were $98.1 million, down 11.7% from the 2012 fourth quarter primarily due to declines in nightclub and catering revenues. Retail revenues improved 6.9% from last year's quarter to $23.6 million, a result of reconfigurations to our retail area in the first half of 2013. Entertainment revenues declined to $18.0 million in the 2013 fourth quarter from $21.0 million due to a show that ended its run at the Encore Theater in November 2012.

Balance Sheet and Other
Our total cash and investments balance at December 31, 2013 was $2.9 billion. Total debt outstanding at the end of the quarter was $6.6 billion, including $3.1 billion of Wynn Las Vegas debt, $1.5 billion of Wynn Macau debt and $1.9 billion at the parent company. Note that, during the 2013 fourth quarter, Wynn Macau, Limited issued $600.0 million of new 5.25% senior notes due in 2021. Additionally, Wynn Las Vegas, LLC redeemed the remaining $225.3 million of its 7.875% first mortgage notes due in 2017.

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