filings.toolsItem 1. Financial Statements
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Item 1. Financial Statements
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| March 31, 2024 | December 31, 2023 | ||||||||||
| (unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 2,420,203 | $ | 2,879,186 | |||||||
| Restricted cash | — | 18 | |||||||||
| Investments | 848,732 | 845,192 | |||||||||
| Accounts receivable, net of allowance for credit losses of $40,622 and $40,075, respectively | 297,192 | 341,712 | |||||||||
| Inventories | 73,686 | 75,552 | |||||||||
| Prepaid expenses and other | 131,099 | 99,961 | |||||||||
| Total current assets | 3,770,912 | 4,241,621 | |||||||||
| Property and equipment, net | 6,606,525 | 6,688,479 | |||||||||
| Restricted cash | 90,146 | 90,208 | |||||||||
| Goodwill and intangible assets, net | 317,945 | 329,708 | |||||||||
| Operating lease assets | 1,823,043 | 1,832,896 | |||||||||
| Deferred income taxes, net | 484,103 | 500,877 | |||||||||
| Other assets | 378,062 | 312,434 | |||||||||
| Total assets | $ | 13,470,736 | $ | 13,996,223 | |||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||||
| Current liabilities: | |||||||||||
| Accounts and construction payables | $ | 176,420 | $ | 208,263 | |||||||
| Customer deposits | 489,866 | 543,288 | |||||||||
| Gaming taxes payable | 183,741 | 172,832 | |||||||||
| Accrued compensation and benefits | 154,540 | 212,645 | |||||||||
| Accrued interest | 125,872 | 141,902 | |||||||||
| Current portion of long-term debt | 1,291,488 | 709,593 | |||||||||
| Other accrued liabilities | 211,193 | 211,931 | |||||||||
| Total current liabilities | 2,633,120 | 2,200,454 | |||||||||
| Long-term debt | 9,920,130 | 11,028,744 | |||||||||
| Long-term operating lease liabilities | 1,635,035 | 1,631,749 | |||||||||
| Other long-term liabilities | 228,831 | 236,210 | |||||||||
| Total liabilities | 14,417,116 | 15,097,157 | |||||||||
| Commitments and contingencies (Note 15) | |||||||||||
| Stockholders' deficit: | |||||||||||
| Preferred stock, par value $0.01; 40,000,000 shares authorized; zero shares issued and outstanding | — | — | |||||||||
| Common stock, par value $0.01; 400,000,000 shares authorized; 133,451,655 and 132,998,916 shares issued; 112,071,149 and 111,737,245 shares outstanding, respectively | 1,335 | 1,330 | |||||||||
| Treasury stock, at cost; 21,380,506 and 21,261,671 shares, respectively | (1,849,172) | (1,836,326) | |||||||||
| Additional paid-in capital | 3,656,809 | 3,647,161 | |||||||||
| Accumulated other comprehensive income | 4,830 | 3,406 | |||||||||
| Accumulated deficit | (1,950,755) | (2,066,953) | |||||||||
| Total Wynn Resorts, Limited stockholders' deficit | (136,953) | (251,382) | |||||||||
| Noncontrolling interests | (809,427) | (849,552) | |||||||||
| Total stockholders' deficit | (946,380) | (1,100,934) | |||||||||
| Total liabilities and stockholders' deficit | $ | 13,470,736 | $ | 13,996,223 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Operating revenues: | |||||||||||
| Casino | $ | 1,121,466 | $ | 766,992 | |||||||
| Rooms | 327,414 | 272,529 | |||||||||
| Food and beverage | 266,938 | 232,611 | |||||||||
| Entertainment, retail and other | 147,091 | 151,547 | |||||||||
| Total operating revenues | 1,862,909 | 1,423,679 | |||||||||
| Operating expenses: | |||||||||||
| Casino | 675,439 | 473,385 | |||||||||
| Rooms | 82,077 | 72,702 | |||||||||
| Food and beverage | 205,821 | 180,619 | |||||||||
| Entertainment, retail and other | 71,012 | 92,482 | |||||||||
| General and administrative | 271,616 | 259,772 | |||||||||
| Provision for credit losses | 87 | (544) | |||||||||
| Pre-opening | 2,035 | 4,478 | |||||||||
| Depreciation and amortization | 174,933 | 168,812 | |||||||||
| Property charges and other | 16,948 | 2,458 | |||||||||
| Total operating expenses | 1,499,968 | 1,254,164 | |||||||||
| Operating income | 362,941 | 169,515 | |||||||||
| Other income (expense): | |||||||||||
| Interest income | 40,172 | 40,193 | |||||||||
| Interest expense, net of amounts capitalized | (182,404) | (187,740) | |||||||||
| Change in derivatives fair value | (17,914) | 23,046 | |||||||||
| Loss on debt financing transactions | (1,561) | (12,236) | |||||||||
| Other | (4,722) | (30,614) | |||||||||
| Other income (expense), net | (166,429) | (167,351) | |||||||||
| Income before income taxes | 196,512 | 2,164 | |||||||||
| Provision for income taxes | (20,014) | (1,018) | |||||||||
| Net income | 176,498 | 1,146 | |||||||||
| Less: net (income) loss attributable to noncontrolling interests | (32,282) | 11,186 | |||||||||
| Net income attributable to Wynn Resorts, Limited | $ | 144,216 | $ | 12,332 | |||||||
| Basic and diluted net income (loss) per common share: | |||||||||||
| Net income (loss) attributable to Wynn Resorts, Limited: | |||||||||||
| Basic | $ | 1.30 | $ | 0.11 | |||||||
| Diluted | $ | 1.30 | $ | (0.02) | |||||||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 111,023 | 112,753 | |||||||||
| Diluted | 111,333 | 113,116 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Net income | $ | 176,498 | $ | 1,146 | |||||||
| Other comprehensive income: | |||||||||||
| Foreign currency translation adjustments, before and after tax | 1,989 | 15,163 | |||||||||
| Total comprehensive income | 178,487 | 16,309 | |||||||||
| Less: comprehensive (income) loss attributable to noncontrolling interests | (32,847) | 6,902 | |||||||||
| Comprehensive income attributable to Wynn Resorts, Limited | $ | 145,640 | $ | 23,211 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(in thousands, except share data)
(unaudited)
| For the Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares outstanding | Par value | Treasury stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit | Total Wynn Resorts, Ltd. stockholders' deficit | Noncontrolling interests | Total stockholders' deficit | |||||||||||||||||||||||||||||||||||||||||||||
| Balances, January 1, 2024 | 111,737,245 | $ | 1,330 | $ | (1,836,326) | $ | 3,647,161 | $ | 3,406 | $ | (2,066,953) | $ | (251,382) | $ | (849,552) | $ | (1,100,934) | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 144,216 | 144,216 | 32,282 | 176,498 | ||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | 1,424 | — | 1,424 | 565 | 1,989 | ||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | 17,285 | — | — | 1,017 | — | — | 1,017 | — | 1,017 | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | 439,668 | 5 | — | 8,010 | — | — | 8,015 | — | 8,015 | ||||||||||||||||||||||||||||||||||||||||||||
| Cancellation of restricted stock | (4,214) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Shares repurchased by the Company and held as treasury shares | (118,835) | — | (12,846) | — | — | — | (12,846) | — | (12,846) | ||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends declared | — | — | — | — | — | (28,018) | (28,018) | — | (28,018) | ||||||||||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | — | — | — | — | (5,996) | (5,996) | ||||||||||||||||||||||||||||||||||||||||||||
| Transactions with subsidiary minority shareholders | — | — | — | (11,873) | — | — | (11,873) | 11,873 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | 12,494 | — | — | 12,494 | 1,401 | 13,895 | ||||||||||||||||||||||||||||||||||||||||||||
| Balances, March 31, 2024 | 112,071,149 | $ | 1,335 | $ | (1,849,172) | $ | 3,656,809 | $ | 4,830 | $ | (1,950,755) | $ | (136,953) | $ | (809,427) | $ | (946,380) |
| For the Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares outstanding | Par value | Treasury stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit | Total Wynn Resorts, Ltd. stockholders' deficit | Noncontrolling interests | Total stockholders' deficit | |||||||||||||||||||||||||||||||||||||||||||||
| Balances, January 1, 2023 | 113,369,439 | $ | 1,323 | $ | (1,623,872) | $ | 3,583,923 | $ | (404) | $ | (2,711,808) | $ | (750,838) | $ | (889,527) | $ | (1,640,365) | ||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | 12,332 | 12,332 | (11,186) | 1,146 | ||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | 10,879 | — | 10,879 | 4,284 | 15,163 | ||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | 25,284 | — | — | 1,488 | — | — | 1,488 | — | 1,488 | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | 520,773 | 5 | — | 6,634 | — | — | 6,639 | — | 6,639 | ||||||||||||||||||||||||||||||||||||||||||||
| Cancellation of restricted stock | (6,380) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Shares repurchased by the Company and held as treasury shares | (107,181) | — | (10,834) | — | — | — | (10,834) | — | (10,834) | ||||||||||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | — | — | — | — | (4,502) | (4,502) | ||||||||||||||||||||||||||||||||||||||||||||
| Transactions with subsidiary minority shareholders | 6,109 | — | — | (754) | — | — | (754) | 754 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | 13,654 | — | — | 13,654 | 1,241 | 14,895 | ||||||||||||||||||||||||||||||||||||||||||||
| Balances, March 31, 2023 | 113,808,044 | $ | 1,328 | $ | (1,634,706) | $ | 3,604,945 | $ | 10,475 | $ | (2,699,476) | $ | (717,434) | $ | (898,936) | $ | (1,616,370) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 176,498 | $ | 1,146 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 174,933 | 168,812 | |||||||||
| Deferred income taxes | 16,774 | (162) | |||||||||
| Stock-based compensation expense | 14,369 | 14,710 | |||||||||
| Amortization of debt issuance costs | 10,350 | 8,763 | |||||||||
| Loss on debt financing transactions | 1,561 | 12,236 | |||||||||
| Provision for credit losses | 87 | (544) | |||||||||
| Change in derivatives fair value | 17,914 | (23,046) | |||||||||
| Property charges and other | 19,261 | 33,072 | |||||||||
| Increase (decrease) in cash from changes in: | |||||||||||
| Receivables, net | 44,352 | (11,048) | |||||||||
| Inventories, prepaid expenses and other | (21,728) | (7,288) | |||||||||
| Customer deposits | (53,147) | (13,316) | |||||||||
| Accounts payable and accrued expenses | (86,130) | (13,844) | |||||||||
| Net cash provided by operating activities | 315,094 | 169,491 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures, net of construction payables and retention | (97,702) | (124,466) | |||||||||
| Investments in unconsolidated affiliate | (69,928) | — | |||||||||
| Purchase of intangible and other assets | (15) | (7,741) | |||||||||
| Proceeds from sale of assets and other | 226 | 257 | |||||||||
| Net cash used in investing activities | (167,419) | (131,950) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from issuance of long-term debt | 412,000 | 1,200,000 | |||||||||
| Repayments of long-term debt | (956,666) | (1,018,973) | |||||||||
| Repurchase of common stock | (11,374) | (10,834) | |||||||||
| Proceeds from exercise of stock options | 1,017 | — | |||||||||
| Distribution to noncontrolling interest | (5,996) | (4,502) | |||||||||
| Dividends paid | (27,959) | (175) | |||||||||
| Finance lease payments | (5,056) | (5,410) | |||||||||
| Payments for financing costs | (5,843) | (31,330) | |||||||||
| Other | (4,486) | (7,773) | |||||||||
| Net cash (used in) provided by financing activities | (604,363) | 121,003 | |||||||||
| Effect of exchange rate on cash, cash equivalents and restricted cash | (2,375) | (2,567) | |||||||||
| Cash, cash equivalents and restricted cash: | |||||||||||
| (Decrease) increase in cash, cash equivalents and restricted cash | (459,063) | 155,977 | |||||||||
| Balance, beginning of period | 2,969,412 | 3,782,990 | |||||||||
| Balance, end of period | $ | 2,510,349 | $ | 3,938,967 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 - Organization
Wynn Resorts, Limited, a Nevada corporation (together with its subsidiaries, "Wynn Resorts" or the "Company"), is a designer, developer, and operator of integrated resorts featuring luxury hotel rooms, high-end retail space, an array of dining and entertainment options, meeting and convention facilities, and gaming.
In the Macau Special Administrative Region of the People's Republic of China ("Macau"), the Company owns approximately 72% of Wynn Macau, Limited ("WML"), which includes the operations of the Wynn Palace and Wynn Macau resorts. The Company refers to Wynn Palace and Wynn Macau as its Macau Operations. In Las Vegas, Nevada, the Company operates and, with the exception of certain retail space, owns 100% of Wynn Las Vegas. The Company is a 50.1% owner and managing member of a joint venture that owns and leases certain retail space at Wynn Las Vegas (the "Retail Joint Venture"). The Company refers to Wynn Las Vegas, Encore, an expansion at Wynn Las Vegas, and the Retail Joint Venture as its Las Vegas Operations. In Everett, Massachusetts, the Company operates Encore Boston Harbor, an integrated resort.
The Company has a 40% equity interest in Island 3 AMI FZ-LLC, an unconsolidated affiliate, which is constructing an integrated resort property ("Wynn Al Marjan Island") in Ras Al Khaimah, United Arab Emirates, currently expected to open in 2027.
Note 2 - Basis of Presentation and Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures herein are adequate to make the information presented not misleading. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to a fair presentation of the results for the interim periods presented. The results for the three months ended March 31, 2024 are not necessarily indicative of results to be expected for any other interim period or the full fiscal year ending December 31, 2024. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries, and entities the Company identifies as variable interest entities ("VIEs") of which the Company is determined to be the primary beneficiary. For information on the Company's VIEs, see Note 16, "Retail Joint Venture." If the entity does not qualify for consolidation and the Company has significant influence over the operating and financial decisions of the entity, the Company accounts for the entity under the equity method. All significant intercompany accounts and transactions have been eliminated. During the three months ended March 31, 2024, Wynn Interactive Ltd. no longer met the requirements for a reportable segment. As a result, its assets and results of operations are presented in Corporate and other and previous period amounts have been reclassified to be consistent with the current period presentation of the Company's reportable segments. These reclassifications had no effect on the previously reported net income or operating income (loss). For information on the Company's reportable segments, see Note 17, "Segment Information."
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the financial statements relate to and include, but are not limited to, inputs into the Company's estimated allowance for deferred tax assets and credit losses, estimates regarding the useful lives and recoverability of long-lived and intangible assets, valuations of derivatives, and litigation and contingency estimates.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Gaming Taxes
The Company is subject to taxes based on gross gaming revenues in the jurisdictions in which it operates, subject to applicable jurisdictional adjustments. These gaming taxes are recorded as casino expenses in the accompanying Condensed Consolidated Statements of Income. These taxes totaled $488.8 million and $310.4 million for the three months ended March 31, 2024 and 2023, respectively.
Investments
As of March 31, 2024, the Company held $550.0 million in fixed deposits, recorded at fair value, and $298.7 million in debt securities, recorded at amortized cost within Investments on the Condensed Consolidated Balance Sheets. The estimated fair value of the Company's debt securities as of March 31, 2024 was approximately $298.6 million and the gross unrecognized holding loss was $0.1 million. As of March 31, 2024, the Company had $12.2 million in accrued interest on its debt securities, recorded in Investments on the Condensed Consolidated Balance Sheets.
As of December 31, 2023, the Company held $550.0 million in fixed deposits, recorded at fair value, and $295.2 million in debt securities, recorded at amortized cost within Investments on the Condensed Consolidated Balance Sheets. The estimated fair value of the Company's debt securities as of December 31, 2023 was approximately $294.8 million and the gross unrecognized holding loss was $0.4 million. As of December 31, 2023, the Company had $8.7 million in accrued interest on its debt securities, recorded in Investments on the Condensed Consolidated Balance Sheets.
As of the balance sheet date, the Company evaluates whether the unrealized losses are attributable to credit losses or other factors. The Company considers the severity of the decline in value, creditworthiness of the issuer and other relevant factors and records an allowance for credit losses, limited to the excess of amortized cost over fair value, with a corresponding charge to earnings. The allowance may be subsequently increased or decreased based on the prevailing facts and circumstances. During the three months ended March 31, 2024 and 2023, no impairment was recognized.
Goodwill
Goodwill represents the excess of the purchase price in a business combination over the fair value of the tangible and intangible assets acquired and the liabilities assumed. Goodwill is not amortized, but rather is subject to impairment testing annually, or more frequently if events or changes in circumstances indicate that this asset may be impaired. As of March 31, 2024 and December 31, 2023, the Company had a goodwill balance of $18.5 million, recorded in Goodwill and intangible assets, net on the Condensed Consolidated Balance Sheets. During the three months ended March 31, 2024, no impairment was recognized.
Recently Issued Accounting Standards
The Company’s management has evaluated the recently issued, but not yet effective, accounting standards that have been issued or proposed by the Financial Accounting Standards Board or other standard-setting bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements will have a material effect on the Company’s financial position, results of operations and cash flows.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 3 - Cash, Cash Equivalents and Restricted Cash
Cash, cash equivalents and restricted cash consisted of the following (in thousands):
| March 31, 2024 | December 31, 2023 | ||||||||||
| Cash and cash equivalents: | |||||||||||
| Cash (1) | $ | 1,218,328 | $ | 1,076,474 | |||||||
| Cash equivalents (2) | 1,201,875 | 1,802,712 | |||||||||
| Total cash and cash equivalents | 2,420,203 | 2,879,186 | |||||||||
| Restricted cash (3) | 90,146 | 90,226 | |||||||||
| Total cash, cash equivalents and restricted cash | $ | 2,510,349 | $ | 2,969,412 | |||||||
| (1) Cash consists of cash on hand and bank deposits. (2) Cash equivalents consist of bank time deposits and money market funds. (3) Restricted cash consists of cash subject to certain contractual restrictions, cash collateral associated with obligations, cash held in a trust in accordance with WML's share award plan, and as of March 31, 2024 and December 31, 2023 included $86.9 million and $87.0 million, respectively, in the form of a first demand bank guarantee in favor of the Macau government to support the legal and contractual obligations of Wynn Resorts (Macau) S.A. ("Wynn Macau SA") through the term of Wynn Macau SA's gaming concession contract. |
The following table presents the supplemental cash flow disclosures of the Company (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash paid for interest, net of amounts capitalized | $ | 183,812 | $ | 181,667 | |||||||
| Liability settled with shares of common stock | $ | 8,015 | $ | 6,639 | |||||||
| Accounts and construction payables related to property and equipment | $ | 58,096 | $ | 42,911 | |||||||
| Other liabilities related to intangible assets (1) | $ | 199,807 | $ | 203,926 | |||||||
| Finance lease liabilities arising from obtaining finance lease assets | $ | 3,333 | $ | 400 | |||||||
| Financing costs included in accounts payable and other liabilities | $ | 850 | $ | 1,804 |
(1) For the three months ended March 31, 2024 and 2023, included $196.9 million and $199.6 million related to the Macau gaming premium in connection with Wynn Macau SA's gaming concession contract.
Note 4 - Receivables, net
Accounts Receivable and Credit Risk
Receivables, net consisted of the following (in thousands):
| March 31, 2024 | December 31, 2023 | ||||||||||
| Casino | $ | 172,491 | $ | 218,694 | |||||||
| Hotel | 54,795 | 54,596 | |||||||||
| Other | 110,528 | 108,497 | |||||||||
| 337,814 | 381,787 | ||||||||||
| Less: allowance for credit losses | (40,622) | (40,075) | |||||||||
| $ | 297,192 | $ | 341,712 |
As of March 31, 2024 and December 31, 2023, approximately 68.4% and 68.2%, respectively, of the Company's markers were due from customers residing outside the United States, primarily in Asia. Business or economic conditions or other significant events in the countries in which the Company's customers reside could affect the collectability of such receivables.
The Company’s allowance for casino credit losses was 20.7% and 15.9% of gross casino receivables as of March 31, 2024 and December 31, 2023, respectively. Although the Company believes that its allowance is adequate, it is possible the estimated amounts of cash collections with respect to receivables could change. The Company’s allowance for credit losses from its hotel and other receivables is not material.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The following table shows the movement in the Company's allowance for credit losses recognized for receivables that occurred during the periods presented (in thousands):
| March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Balance at beginning of year | $ | 40,075 | $ | 78,842 | |||||||
| Provision for credit losses | 87 | (544) | |||||||||
| Write-offs | (2,519) | (22,220) | |||||||||
| Recoveries of receivables previously written off | 2,987 | 1,294 | |||||||||
| Effect of exchange rate | (8) | (236) | |||||||||
| Balance at end of period | $ | 40,622 | $ | 57,136 |
Note 5 - Property and Equipment, net
Property and equipment, net consisted of the following (in thousands):
| March 31, 2024 | December 31, 2023 | ||||||||||
| Buildings and improvements | $ | 8,457,299 | $ | 8,459,085 | |||||||
| Land and improvements | 1,229,729 | 1,228,652 | |||||||||
| Furniture, fixtures and equipment | 3,347,883 | 3,311,478 | |||||||||
| Airplanes | 110,623 | 110,623 | |||||||||
| Construction in progress | 188,842 | 162,592 | |||||||||
| 13,334,376 | 13,272,430 | ||||||||||
| Less: accumulated depreciation | (6,727,851) | (6,583,951) | |||||||||
| $ | 6,606,525 | $ | 6,688,479 |
As of March 31, 2024 and December 31, 2023, construction in progress consisted primarily of costs capitalized for various capital enhancements at the Company's properties.
Depreciation expense for the three months ended March 31, 2024 and 2023 was $158.1 million and $154.1 million, respectively.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 6 - Long-Term Debt
Long-term debt consisted of the following (in thousands):
| March 31, 2024 | December 31, 2023 | ||||||||||
| Macau Related: | |||||||||||
| WM Cayman II Revolver, due 2025 (1) | $ | 1,346,764 | $ | 1,497,610 | |||||||
| WML 4 7/8% Senior Notes, due 2024 | 600,000 | 600,000 | |||||||||
| WML 5 1/2% Senior Notes, due 2026 | 1,000,000 | 1,000,000 | |||||||||
| WML 5 1/2% Senior Notes, due 2027 | 750,000 | 750,000 | |||||||||
| WML 5 5/8% Senior Notes, due 2028 | 1,350,000 | 1,350,000 | |||||||||
| WML 5 1/8% Senior Notes, due 2029 | 1,000,000 | 1,000,000 | |||||||||
| WML 4 1/2% Convertible Bonds, due 2029 (2) | 600,000 | 600,000 | |||||||||
| U.S. and Corporate Related: | |||||||||||
| WRF Credit Facilities (3): | |||||||||||
| WRF Term Loan, due 2024 | 72,739 | 73,683 | |||||||||
| WRF Term Loan, due 2027 | 721,324 | 730,692 | |||||||||
| WLV 5 1/2% Senior Notes, due 2025 | 583,310 | 1,380,001 | |||||||||
| WLV 5 1/4% Senior Notes, due 2027 | 880,000 | 880,000 | |||||||||
| WRF 5 1/8% Senior Notes, due 2029 | 750,000 | 750,000 | |||||||||
| WRF 7 1/8% Senior Notes, due 2031 | 1,000,000 | 600,000 | |||||||||
| Retail Term Loan, due 2025 (4) | 615,000 | 615,000 | |||||||||
| 11,269,137 | 11,826,986 | ||||||||||
| WML Convertible Bond Conversion Option Derivative | 90,025 | 73,744 | |||||||||
| Less: Unamortized debt issuance costs and original issue discounts and premium, net | (147,544) | (162,393) | |||||||||
| 11,211,618 | 11,738,337 | ||||||||||
| Less: Current portion of long-term debt | (1,291,488) | (709,593) | |||||||||
| Total long-term debt, net of current portion | $ | 9,920,130 | $ | 11,028,744 |
(1) As of March 31, 2024, the borrowings under the WM Cayman II Revolver bear interest at the term secured overnight financing rate ("Term SOFR") plus a credit adjustment spread of 0.10% or HIBOR, in each case plus a margin of 1.875% to 2.875% per annum based on WM Cayman II’s leverage ratio on a consolidated basis. Approximately $281.3 million and $1.07 billion of the WM Cayman II Revolver bears interest at a rate of Term SOFR plus 1.975% per year and HIBOR plus 1.875% per year, respectively. As of March 31, 2024, the weighted average interest rate was approximately 6.80%. As of March 31, 2024, the available borrowing capacity under the WM Cayman II Revolver was $149.6 million.
(2) As of March 31, 2024, the net carrying amount of the WML Convertible Bonds was $484.1 million, with unamortized debt discount and debt issuance costs of $115.9 million. The Company recorded contractual interest expense of $6.8 million and $1.8 million and amortization of discounts and issuance costs of $4.6 million and $1.1 million during the three months ended March 31, 2024 and 2023, respectively.
(3) The WRF Credit Facilities bear interest at a rate of Term SOFR plus 1.85% per year. As of March 31, 2024, the weighted average interest rate was approximately 7.18%. Additionally, as of March 31, 2024, the available borrowing capacity under the WRF Revolver was $737.2 million, net of $12.8 million in outstanding letters of credit.
(4) The Retail Term Loan bears interest at a rate of adjusted daily simple secured overnight financing rate ("SOFR") plus 1.80% per year. As of March 31, 2024, the interest rate was 5.47%.
WRF Senior Notes
In February 2024, Wynn Resorts Finance, LLC ("WRF") and its subsidiary, Wynn Resorts Capital Corp., issued an additional $400.0 million aggregate principal amount of 7 1/8% Senior Notes due 2031 (the "2031 WRF Add-On Senior Notes," and collectively with the 7 1/8% Senior Notes due 2031 (the "2031 WRF Senior Notes") and 5 1/8% Senior Notes due 2029 (the "2029 WRF Senior Notes"), the "WRF Senior Notes") pursuant to a supplemental indenture to the 2031 Senior Notes indenture dated as of February 16, 2023. The 2031 WRF Add-On Senior Notes were issued at a price equal to 103.00% of the principal amount plus accrued interest, resulting in net proceeds of $409.5 million. The net proceeds from the 2031 WRF Add-On Senior Notes, together with cash held by Wynn Resorts, were used to repurchase an aggregate $796.7 million of the outstanding principal amount of the 2025 WLV Senior Notes (as defined below) and to pay the applicable tender premium and related fees and expenses.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
In connection with the issuance of the 2031 WRF Add-On Senior Notes and the repurchase of the 2025 WLV Senior Notes (as further discussed below), the Company recognized a loss on debt financing transactions of $1.6 million within the accompanying Condensed Consolidated Statements of Income, and the Company recorded debt issuance costs of $5.6 million within the accompanying Condensed Consolidated Balance Sheet.
WLV Senior Notes
In February and March 2024, Wynn Las Vegas repurchased $800.0 million aggregate principal amount of its 5 1/2% Senior Notes due 2025 (the "2025 WLV Senior Notes"), which consisted of i) $681.0 million validly tendered notes repurchased at a price equal to 97.2% of the principal amount, plus accrued interest and an early tender premium of $20.3 million and ii) $119.0 million of notes repurchased on a pro-rata basis at a price equal of 100% of the principal amount plus accrued interest under the terms of its indenture. Included in the $119.0 million repurchase was $3.3 million of 2025 WLV Senior Notes held by Wynn Resorts. The Company used the net proceeds from the 2031 WRF Add-On Senior Notes and cash held by WRF, to purchase such validly tendered 2025 WLV Senior Notes and to pay the tender premium and related fees and expenses.
Debt Covenant Compliance
As of March 31, 2024, management believes the Company was in compliance with all debt covenants.
Fair Value of Long-Term Debt
The estimated fair value of the Company's long-term debt as of March 31, 2024 and December 31, 2023, was approximately $11.04 billion and $11.49 billion, respectively, compared to its carrying value, excluding debt issuance costs and original issue discount and premium, of $11.27 billion and $11.83 billion, respectively. The estimated fair value of the Company's long-term debt is based on recent trades, if available, and indicative pricing from market information (Level 2 inputs).
Note 7 - WML Convertible Bond Conversion Option Derivative
The conversion feature contained within the WML Convertible Bonds (the "WML Convertible Bond Conversion Option Derivative") is not indexed to WML's equity and, as such, is required to be bifurcated from the debt host contract and accounted for as a free-standing derivative, reported at fair value as of the end of each reporting period, with changes recognized in the Condensed Consolidated Statements of Income. The following table sets forth the inputs to the lattice models that were used to value the WML Convertible Bond Conversion Option Derivative:
| March 31, 2024 | December 31, 2023 | ||||||||||
| WML stock price | HK$ | 6.99 | HK$ | 6.43 | |||||||
| Estimated volatility | 34.8 | % | 34.0 | % | |||||||
| Risk-free interest rate | 3.9 | % | 3.3 | % | |||||||
| Expected term (years) | 4.9 | 5.2 | |||||||||
| Dividend yield | 0.0 | % | 0.0 | % |
As of March 31, 2024 and December 31, 2023, the estimated fair value of the embedded derivative was a liability of $90.0 million and $73.7 million, respectively, recorded within Long-term debt within the accompanying Condensed Consolidated Balance Sheets. In connection with the change in fair value, the Company recorded a loss of $16.3 million and a gain of $24.9 million within Change in derivatives fair value in the accompanying Condensed Consolidated Statements of Income for the three months ended March 31, 2024 and 2023, respectively.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 8 - Stockholders' Deficit
Dividends
The Company paid a cash dividend of $0.25 per share on its common stock during the three months ended March 31, 2024 and recorded $28.0 million against accumulated deficit.
On May 7, 2024, the Company's Board of Directors declared a cash dividend of $0.25 per share on its common stock, payable on May 31, 2024 to stockholders of record as of May 20, 2024.
Noncontrolling Interests
Wynn Macau, Limited
The WML Board of Directors has recommended the payment of a final dividend of HK$0.075 per share on its common stock, for a total U.S. dollar equivalent of approximately $50.3 million, in respect of the year ended December 31, 2023. The payment of the final dividend is conditional upon shareholder approval at WML's 2024 Annual General Meeting to be held on May 30, 2024.
WML Securities Lending Agreement
In connection with the offering of the WML Convertible Bonds, WM Cayman Holdings I Limited ("WM Cayman I"), a wholly owned subsidiary of the Company and holder of our approximate 72% ownership interest in WML, entered into a stock borrowing and lending agreement with Goldman Sachs International (the "WML Stock Borrower") on March 2, 2023 (as amended on March 30, 2023, the "Securities Lending Agreement"), pursuant to which WM Cayman I has agreed to lend to the WML Stock Borrower up to 459,774,985 of its ordinary share holdings in WML, upon and subject to the terms and conditions in the Securities Lending Agreement. WM Cayman I may, at its sole discretion, terminate any stock loan by giving the WML Stock Borrower no less than five business days' notice. The Securities Lending Agreement terminates on the date on which the WML Convertible Bonds have been redeemed, or converted in full, whichever is the earlier. As of the date of this report, the WML Stock Borrower held 179,774,985 WML shares under the Securities Lending Agreement.
Retail Joint Venture
During the three months ended March 31, 2024 and 2023, the Retail Joint Venture made aggregate distributions of approximately $6.0 million and $4.5 million, respectively, to its non-controlling interest holder. For more information on the Retail Joint Venture, see Note 16, "Retail Joint Venture."
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 9 - Fair Value Measurements
The following tables present assets and liabilities carried at fair value (in thousands):
| Fair Value Measurements Using: | |||||||||||||||||||||||
| March 31, 2024 | Quoted Market Prices in Active Markets (Level 1) | Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash equivalents | $ | 1,201,875 | $ | — | $ | 1,201,875 | $ | — | |||||||||||||||
| Restricted cash | $ | 90,146 | $ | 2,178 | $ | 87,968 | $ | — | |||||||||||||||
| Fixed deposits | $ | 550,000 | $ | — | $ | 550,000 | $ | — | |||||||||||||||
| Interest rate collar | $ | 4,136 | $ | — | $ | 4,136 | $ | — | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| WML Convertible Bond Conversion Option Derivative (see Note 7) | $ | 90,025 | $ | — | $ | — | $ | 90,025 | |||||||||||||||
| Fair Value Measurements Using: | |||||||||||||||||||||||
| December 31, 2023 | Quoted Market Prices in Active Markets (Level 1) | Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash equivalents | $ | 1,802,712 | $ | — | $ | 1,802,712 | $ | — | |||||||||||||||
| Restricted cash | $ | 90,226 | $ | 2,170 | $ | 88,056 | $ | — | |||||||||||||||
| Fixed deposits | $ | 550,000 | $ | — | $ | 550,000 | $ | — | |||||||||||||||
| Interest rate collar | $ | 5,769 | $ | — | $ | 5,769 | $ | — | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| WML Convertible Bond Conversion Option Derivative (see Note 7) | $ | 73,744 | $ | — | $ | — | $ | 73,744 |
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 10 - Customer Contract Liabilities
In providing goods and services to its customers, there is often a timing difference between the Company receiving cash and the Company recording revenue for providing services or holding events.
The Company's primary liabilities associated with customer contracts are as follows (in thousands):
| March 31, 2024 | December 31, 2023 | Increase / (decrease) | March 31, 2023 | December 31, 2022 | Increase / (decrease) | ||||||||||||||||||||||||||||||
| Casino outstanding chips and front money deposits (1) | $ | 393,603 | $ | 433,269 | $ | (39,666) | $ | 376,911 | $ | 390,531 | $ | (13,620) | |||||||||||||||||||||||
| Advance room deposits and ticket sales (2) | 82,097 | 89,640 | (7,543) | 80,419 | 85,019 | (4,600) | |||||||||||||||||||||||||||||
| Other gaming-related liabilities (3) | 20,526 | 24,964 | (4,438) | 33,452 | 31,265 | 2,187 | |||||||||||||||||||||||||||||
| Loyalty program and related liabilities (4) | 28,747 | 31,106 | (2,359) | 37,524 | 35,083 | 2,441 | |||||||||||||||||||||||||||||
| $ | 524,973 | $ | 578,979 | $ | (54,006) | $ | 528,306 | $ | 541,898 | $ | (13,592) |
(1) Casino outstanding chips generally represent amounts owed to gaming promoters and customers for chips in their possession, and casino front money deposits represent funds deposited by customers before gaming play occurs. These amounts are included in customer deposits on the Condensed Consolidated Balance Sheets and may be recognized as revenue or redeemed for cash in the future.
(2) Advance room deposits and ticket sales represent cash received in advance for goods or services to be provided in the future. These amounts are included in customer deposits on the Condensed Consolidated Balance Sheets and will be recognized as revenue when the goods or services are provided or the events are held. Decreases in this balance generally represent the recognition of revenue and increases in the balance represent additional deposits made by customers. The deposits are expected to primarily be recognized as revenue within one year.
(3) Other gaming-related liabilities generally represent unpaid wagers primarily in the form of unredeemed slot, race and sportsbook tickets or wagers for future sporting events. The amounts are included in other accrued liabilities on the Condensed Consolidated Balance Sheets.
(4) Loyalty program and related liabilities represent the deferral of revenue until the loyalty points or other complimentaries are redeemed. The amounts are included in other accrued liabilities on the Condensed Consolidated Balance Sheets and are expected to be recognized as revenue within one year of being earned by customers.
Note 11 - Stock-Based Compensation
The total compensation cost for stock-based compensation plans was recorded as follows (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Casino | $ | 675 | $ | 477 | |||||||
| Rooms | 228 | 206 | |||||||||
| Food and beverage | 412 | 409 | |||||||||
| Entertainment, retail and other | 746 | 2,633 | |||||||||
| General and administrative | 12,308 | 10,985 | |||||||||
| Total stock-based compensation expense | 14,369 | 14,710 | |||||||||
| Total stock-based compensation capitalized | 1,302 | 766 | |||||||||
| Total stock-based compensation costs | $ | 15,671 | $ | 15,476 |
Note 12 - Income Taxes
The Company recorded an income tax expense of $20.0 million and $1.0 million for the three months ended March 31, 2024 and 2023, respectively, primarily related to its U.S.-based operating profits.
The difference between the statutory tax rate of 21% and the effective tax rate of 10.2% is due to the exemption from Macau’s 12% Complementary Tax on casino gaming profits that Wynn Macau SA received.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 13 - Earnings Per Share
Basic earnings per share ("EPS") is computed by dividing net income (loss) attributable to Wynn Resorts by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) attributable to Wynn Resorts, adjusted for the potential dilutive impact assuming that the conversion of the WML Convertible Bonds occurred at the later of the date of issuance or beginning of the period presented under the if-converted method, by the weighted average number of common shares outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potential dilutive securities had been issued, to the extent such impact is not anti-dilutive. Other potentially dilutive securities include outstanding stock options and unvested restricted stock.
The weighted average number of common and common equivalent shares used in the calculation of basic and diluted EPS consisted of the following (in thousands, except per share amounts):
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Numerator: | |||||||||||
| Net income attributable to Wynn Resorts, Limited - basic | $ | 144,216 | $ | 12,332 | |||||||
| Effect of dilutive securities of Wynn Resorts, Limited subsidiaries: | |||||||||||
| Assumed conversion of WML Convertible Bonds | — | (14,566) | |||||||||
| Net income (loss) attributable to Wynn Resorts, Limited - diluted | $ | 144,216 | $ | (2,234) | |||||||
| Denominator: | |||||||||||
| Weighted average common shares outstanding | 111,023 | 112,753 | |||||||||
| Potential dilutive effect of stock options, nonvested, and performance nonvested shares | 310 | 363 | |||||||||
| Weighted average common and common equivalent shares outstanding | 111,333 | 113,116 | |||||||||
| Net income attributable to Wynn Resorts, Limited per common share, basic | $ | 1.30 | $ | 0.11 | |||||||
| Net income (loss) attributable to Wynn Resorts, Limited per common share, diluted | $ | 1.30 | $ | (0.02) | |||||||
| Anti-dilutive stock options, nonvested, and performance nonvested shares excluded from the calculation of diluted net income per share | 281 | 38 |
Note 14 - Leases
Lessor Arrangements
The following table presents the minimum and contingent operating lease income for the periods presented (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Minimum rental income | $ | 34,170 | $ | 33,838 | |||||||
| Contingent rental income | 20,639 | 28,764 | |||||||||
| Total rental income | $ | 54,809 | $ | 62,602 |
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 15 - Commitments and Contingencies
Litigation
In addition to the actions noted below, the Company and its affiliates are involved in litigation arising in the normal course of business. In the opinion of management, such litigation is not expected to have a material effect on the Company's financial condition, results of operations, and cash flows.
Securities Class Action
On February 20, 2018, a putative securities class action was filed against the Company and certain current and former officers of the Company in the United States District Court, Southern District of New York (which was subsequently transferred to the United States District Court, District of Nevada) by John V. Ferris and Joann M. Ferris on behalf of all persons who purchased the Company's common stock between February 28, 2014 and January 25, 2018. The complaint alleges, among other things, certain violations of federal securities laws and seeks to recover unspecified damages as well as attorneys' fees, costs and related expenses for the plaintiffs. On April 15, 2019, the Company filed a motion to dismiss, which the court granted on May 27, 2020, with leave to amend. On July 1, 2020, the plaintiffs filed an amended complaint. On August 14, 2020, the Company filed a motion to dismiss the amended complaint. On July 28, 2021, the court granted in part, and denied in part, the Company's motion to dismiss the amended complaint, dismissing certain of plaintiffs' claims, including all claims against current CEO Craig Billings and the individual directors, and allowing other claims to proceed against the Company and several of the Company's former executive officers, including Matthew Maddox, Stephen A. Wynn, Kimmarie Sinatra, and Steven Cootey. On March 2, 2023, the court granted the plaintiffs' motion for class certification and appointed lead counsel. The parties are now proceeding with discovery.
The defendants in this action intend to vigorously defend against the claims pleaded against them and believe that the claims are without merit. This action is in the preliminary stages and the Company has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of these actions or reasonably estimate the range of possible loss, if any.
Federal Investigation
From time to time, the Company receives regulatory inquiries about compliance with anti-money laundering laws. The Company received requests for information from the U.S. Attorney’s Office for the Southern District of California relating to its anti-money laundering policies and procedures, and beginning in 2020 received several grand jury subpoenas regarding various transactions at Wynn Las Vegas relating to certain patrons and agents who reside or operate in foreign jurisdictions. The Company continues to cooperate with the U.S. Attorney's Office in its investigation, which remains ongoing. Because no charges or claims have been brought, the Company is unable to predict the outcome of the investigation, the extent of the materiality of the outcome, or reasonably estimate the possible range of loss, if any, which could be associated with the resolution of any possible charges or claims that may be brought against the Company.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 16 - Retail Joint Venture
As of March 31, 2024 and December 31, 2023, the Retail Joint Venture had total assets of $100.4 million and $102.5 million, respectively, and total liabilities of $622.3 million and $621.9 million, respectively. As of March 31, 2024 and December 31, 2023, the Retail Joint Venture's liabilities included long-term debt of $614.2 million and $614.1 million, respectively, net of debt issuance costs, related to the outstanding borrowings under the Retail Term Loan.
Note 17 - Segment Information
The Company has identified its reportable segments based on factors such as geography, regulatory environment, the information reviewed by its chief operating decision maker, and the Company's organizational and management reporting structure.
The Company has identified the following reportable segments: (i) Wynn Macau, representing the aggregate of Wynn Macau and Encore, an expansion at Wynn Macau, which are managed as a single integrated resort; (ii) Wynn Palace; (iii) Las Vegas Operations, representing the aggregate of Wynn Las Vegas, Encore, an expansion at Wynn Las Vegas, and the Retail Joint Venture, which are managed as a single integrated resort; and (iv) Encore Boston Harbor. For geographical reporting purposes, Wynn Macau, Wynn Palace, and Other Macau (which represents the assets of the Company's Macau holding company and other ancillary entities) have been aggregated into Macau Operations. The assets and results of operations of Wynn Interactive are presented in Corporate and other.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The following tables present the Company's segment information (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Operating revenues | |||||||||||
| Macau Operations: | |||||||||||
| Wynn Palace | |||||||||||
| Casino | $ | 473,781 | $ | 270,687 | |||||||
| Rooms | 53,936 | 46,910 | |||||||||
| Food and beverage | 32,070 | 23,553 | |||||||||
| Entertainment, retail and other (1) | 27,114 | 28,213 | |||||||||
| 586,901 | 369,363 | ||||||||||
| Wynn Macau | |||||||||||
| Casino | 346,353 | 176,383 | |||||||||
| Rooms | 28,619 | 21,971 | |||||||||
| Food and beverage | 21,019 | 14,302 | |||||||||
| Entertainment, retail and other (1) | 15,753 | 18,070 | |||||||||
| 411,744 | 230,726 | ||||||||||
| Total Macau Operations | 998,645 | 600,089 | |||||||||
| Las Vegas Operations: | |||||||||||
| Casino | 135,163 | 154,530 | |||||||||
| Rooms | 224,076 | 185,109 | |||||||||
| Food and beverage | 193,610 | 172,483 | |||||||||
| Entertainment, retail and other (1) | 83,699 | 74,642 | |||||||||
| Total Las Vegas Operations | 636,548 | 586,764 | |||||||||
| Encore Boston Harbor: | |||||||||||
| Casino | 166,169 | 165,392 | |||||||||
| Rooms | 20,783 | 18,539 | |||||||||
| Food and beverage | 20,239 | 22,273 | |||||||||
| Entertainment, retail and other (1) | 10,593 | 10,102 | |||||||||
| Total Encore Boston Harbor | 217,784 | 216,306 | |||||||||
| Corporate and other: | |||||||||||
| Entertainment, retail and other | 9,932 | 20,520 | |||||||||
| Total Corporate and other | 9,932 | 20,520 | |||||||||
| Total operating revenues | $ | 1,862,909 | $ | 1,423,679 |
(1) Includes lease revenue accounted for under lease accounting guidance. For more information on leases, see Note 14, "Leases."
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Adjusted Property EBITDAR (1) | |||||||||||
| Macau Operations: | |||||||||||
| Wynn Palace | $ | 202,370 | $ | 111,058 | |||||||
| Wynn Macau | 137,186 | 44,745 | |||||||||
| Total Macau Operations | 339,556 | 155,803 | |||||||||
| Las Vegas Operations | 246,262 | 231,597 | |||||||||
| Encore Boston Harbor | 63,135 | 63,414 | |||||||||
| Corporate and other | (2,418) | (21,068) | |||||||||
| Total | 646,535 | 429,746 | |||||||||
| Other operating expenses | |||||||||||
| Pre-opening | 2,035 | 4,478 | |||||||||
| Depreciation and amortization | 174,933 | 168,812 | |||||||||
| Property charges and other | 16,948 | 2,458 | |||||||||
| Corporate expenses and other | 39,905 | 34,490 | |||||||||
| Stock-based compensation | 14,369 | 14,710 | |||||||||
| Triple-net operating lease rent expense | 35,404 | 35,283 | |||||||||
| Total other operating expenses | 283,594 | 260,231 | |||||||||
| Operating income | 362,941 | 169,515 | |||||||||
| Other non-operating income and expenses | |||||||||||
| Interest income | 40,172 | 40,193 | |||||||||
| Interest expense, net of amounts capitalized | (182,404) | (187,740) | |||||||||
| Change in derivatives fair value | (17,914) | 23,046 | |||||||||
| Loss on debt financing transactions | (1,561) | (12,236) | |||||||||
| Other | (4,722) | (30,614) | |||||||||
| Total other non-operating income and expenses | (166,429) | (167,351) | |||||||||
| Income before income taxes | 196,512 | 2,164 | |||||||||
| Provision for income taxes | (20,014) | (1,018) | |||||||||
| Net income | 176,498 | 1,146 | |||||||||
| Net (income) loss attributable to noncontrolling interests | (32,282) | 11,186 | |||||||||
| Net income attributable to Wynn Resorts, Limited | $ | 144,216 | $ | 12,332 |
(1) "Adjusted Property EBITDAR" is net income before interest, income taxes, depreciation and amortization, pre-opening expenses, property charges and other, triple-net operating lease rent expense related to Encore Boston Harbor, 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 debt financing transactions, and other non-operating income and expenses. Adjusted Property EBITDAR 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 EBITDAR 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. The Company also presents Adjusted Property EBITDAR 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 EBITDAR 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 EBITDAR 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 EBITDAR 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 EBITDAR 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, triple-net operating lease rent expense related to Encore Boston Harbor, interest payments, debt principal repayments, income taxes and other non-recurring charges, which are not reflected in Adjusted Property EBITDAR. Also, the Company's calculation of Adjusted Property EBITDAR may be different from the calculation methods used by other companies and, therefore, comparability may be limited.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
| March 31, 2024 | December 31, 2023 | ||||||||||
| Assets | |||||||||||
| Macau Operations: | |||||||||||
| Wynn Palace | $ | 2,866,726 | $ | 2,936,264 | |||||||
| Wynn Macau | 1,883,289 | 1,864,211 | |||||||||
| Other Macau | 846,476 | 886,175 | |||||||||
| Total Macau Operations | 5,596,491 | 5,686,650 | |||||||||
| Las Vegas Operations | 3,105,432 | 3,173,247 | |||||||||
| Encore Boston Harbor | 1,982,407 | 2,006,565 | |||||||||
| Corporate and other | 2,786,406 | 3,129,761 | |||||||||
| Total | $ | 13,470,736 | $ | 13,996,223 |
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