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Wynn Resorts, Limited Reports Second Quarter Results

LAS VEGAS, Aug 01, 2005 (BUSINESS WIRE) -- Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the second quarter ended June 30, 2005. Second quarter results include Wynn Las Vegas' first 64 days of operations.

Adjusted earnings (excluding $43.4 million in pre-opening expenses for Wynn Las Vegas, Wynn Macau, and Encore) were $8.2 million, or $0.08 per diluted share (Adjusted EPS) (1). On a US GAAP (Generally Accepted Accounting Principles) basis, net loss was $35.2 million, or a net loss of $0.36 per diluted share.

Wynn Las Vegas

On June 2, 2005, Wynn Resorts reported operating results for Wynn Las Vegas' first 34 days of operations. The property continued to perform strongly throughout June. For the first 64 days of operations, Wynn Las Vegas generated Net Revenues of $201.1 million.

Net gaming revenues for the period were $98.7 million. The slot segment produced net revenues of $34.2 million, with win per unit per day of $273. The table games segment generated net revenues of $62.0 million, representing win per table per day of $7,117 for the period. Table games win percentage was 21.1% (before discounts), which is within the property's expected range of 18 to 22%.

Since opening on April 28, 2005, Wynn Las Vegas' average daily rate (ADR) per room was $284 and occupancy of available guestrooms was 90.1%, generating revenue per available room (REVPAR) of $255 for the period. Gross non-gaming revenues for the period were $127.3 million and net non-gaming revenues were $102.4 million. The food and beverage, retail and entertainment operations generated gross revenues of $48.1 million, $16.9 million and $9.6 respectively.

Wynn Las Vegas generated adjusted EBITDA (2) of $58.7 million during the quarter, representing a 29.2% margin on net revenues. The adjusted EBITDA margin reflects high staffing levels and other costs related to the opening of Wynn Las Vegas. Wynn Las Vegas' pre-opening costs during the quarter were $36.9 million, including expenses associated with hiring and training employees, marketing expenses, and various other costs incurred prior to the property's opening on April 28, 2005. The pre-opening costs associated with the opening of Wynn Las Vegas are included in the $2.7-$2.75 billion project budget.

Steve Wynn, Chairman and Chief Executive Officer of Wynn Resorts commented, "The initial response from customers and employees has been very gratifying. In our first two months of operations, we achieved outstanding revenue numbers in various departments including slots, tables and retail. We deliberately and substantially overstaffed in order to offset our expected initial disadvantages in productivity: we had more than 9,000 employees working with approximately 58 newly integrated operating systems. In the upcoming months, our main focus will be on raising margins through increased operational efficiencies."

Wynn Macau

The Company broke ground for Wynn Macau in June 2004 and expects to open to the public in September 2006. Construction of Wynn Macau is progressing on schedule and within budget. Detailed interior design work continues, with the majority of architectural and structural design work now complete. Superstructure works are well underway with the hotel tower reaching the 23rd floor level. As of June 30, 2005, the Company had funded approximately $205.7 million of project costs and estimates that approximately $498.3 million will be spent to complete Wynn Macau.

Plans are also underway for a $345.0 million expansion. The Company expects construction of the expansion to commence in the third quarter of 2005, with completion slated for the first half of 2007. An increase in Wynn Macau's credit facilities to fund the development and construction of the expansion is expected to close in the third quarter of 2005.

Other Factors Affecting Earnings

Interest expense net of $10.5 million in capitalized interest was $26.3 million for the second quarter of 2005. Depreciation and amortization expenses were $26.1 million and pre-opening expenses totaled $43.4 million during the quarter, of which $4.1 million were related to Wynn Macau. Corporate expense in the quarter was $5.0 million.

Balance Sheet and Capital Expenditures

Unrestricted cash balances at June 30, 2005 were $485.8 million, while restricted cash balances were $592.0 million. Total debt outstanding at the end of the quarter was $2.0 billion, of which $250 million is our Convertible Debentures. Capital expenditures during the second quarter of 2005 totaled $268.2 million.

Forward-looking Statements

This release contains forward-looking statements regarding operating trends and future results of operations. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by us. The risks and uncertainties include, but are not limited to, competition in the casino/hotel and resorts industry, the Company's brief operating history, the Company's dependence on existing management, levels of travel, leisure and casino spending, general domestic or international economic conditions, and changes in gaming laws or regulations. Additional information concerning potential factors that could affect the Company's financial results are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2004 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 its forward-looking statements as a result of new information, future events or otherwise.

Non-GAAP financial measures

(1) Adjusted earnings (and Adjusted EPS) is presented exclusively as a supplemental disclosure because management believes that it is widely used to measure performance of, and a principal basis for valuation of gaming companies. This measure is considered by many to be a better indicator on which to base expectations of future results than income computed in accordance with generally accepted accounting principles ("GAAP"). Reconciliations of net loss and net loss per share to adjusted earnings and adjusted EPS per share are included in the financial schedules accompanying this release.

(2) Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, pre-opening and corporate expenses, losses on sales of assets, losses from incidental operations, and other non operating income and expenses. Management uses adjusted EBITDA as the primary measure of the operating performance of Wynn Las Vegas and Wynn Macau, and to compare the operating performance of its properties with those of its competitors.

This information should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States, such as operating income, net income, or net cash provided by operating activities.

Wynn Resorts, Limited's calculation of adjusted earnings, adjusted EPS and adjusted EBITDA 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: (1) reconcile EBITDA to operating income and net income; and (2) reconcile net income to adjusted net income.

WYNN RESORTS, LIMITED AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            (In thousands, except share and per share data)
                              (Unaudited)

                                Three Months Ended   Six Months Ended
                                     June 30,            June 30,
                               ------------------- -------------------
                                 2005      2004      2005      2004
                               --------- --------- --------- ---------
Operating revenues:
   Casino                      $ 98,715  $      -  $ 98,715  $      -
   Rooms                         44,632         -    44,632         -
   Food and beverage             48,056         -    48,056         -
   Entertainment, retail and
    other                        34,651        59    34,659       194
                               --------- --------- --------- ---------
      Gross revenues            226,054        59   226,062       194
   Less promotional allowances  (24,934)        -   (24,934)        -
                               --------- --------- --------- ---------
      Net revenues              201,120        59   201,128       194

Operating costs and expenses:
   Casino                        42,280         -    42,280         -
   Rooms                         11,780         -    11,780         -
   Food and beverage             33,706         -    33,706         -
   Entertainment, retail and
    other                        20,262       143    20,266       368
   General and administrative    31,010         -    31,014         -
   Provision for doubtful
    accounts                      8,599         -     8,599         -
   Pre-opening costs             43,365    16,466    81,469    31,016
   Depreciation and
    amortization                 26,125     1,042    29,619     1,824
   Loss on sale of assets            16       520         5       512
   Loss from incidental
    operations                       32         -       105         -
                               --------- --------- --------- ---------
      Total operating costs
       and expenses             217,175    18,171   258,843    33,720

Equity in income from
 unconsolidated affiliates          251         -       251         -
                               --------- --------- --------- ---------

Operating loss                  (15,804)  (18,112)  (57,464)  (33,526)
                               --------- --------- --------- ---------

Other income/(expense):
   Interest income                6,983     1,511    13,165     3,130
   Interest expense, net        (26,341)      (94)  (28,490)     (197)
   Loss on early
    extinguishment of debt            -   (25,628)        -   (25,628)
                               --------- --------- --------- ---------
      Other income
       (expense), net           (19,358)  (24,211)  (15,325)  (22,695)
                               --------- --------- --------- ---------

Minority interest                     -       404         -     1,054
                               --------- --------- --------- ---------

Net loss                        (35,162)  (41,919)  (72,789)  (55,167)

Change in fair value of
 interest rate swaps             (5,814)   18,190     1,887     6,286
                               --------- --------- --------- ---------

Comprehensive loss             $(40,976) $(23,729) $(70,902) $(48,881)
                               ========= ========= ========= =========

Basic and diluted earnings per
 common share:
   Net loss:
      Basic                      $(0.36)   $(0.49)   $(0.74)   $(0.67)
      Diluted                    $(0.36)   $(0.49)   $(0.74)   $(0.67)
   Weighted average common
    shares outstanding:
      Basic                      98,203    84,687    98,132    82,764
      Diluted                    98,203    84,687    98,132    82,764
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF NET LOSS AND NET LOSS PER SHARE TO ADJUSTED EARNINGS
                    AND ADJUSTED EARNINGS PER SHARE
                              (Unaudited)

                                Three Months Ended   Six Months Ended
                                     June 30,            June 30,
                               ------------------- -------------------
                                  2005      2004      2005      2004
                               --------- --------- --------- ---------

Net loss                       $(35,162) $(41,919) $(72,789) $(55,167)
Pre-opening costs                43,365    16,466    81,469    31,016
Adjusted net income               8,203   (25,453)    8,680   (24,151)

Per diluted share of common
 stock:
Net loss                       $  (0.36) $  (0.49) $  (0.74) $  (0.67)
Pre-opening expenses               0.44      0.19      0.83      0.37
Adjusted net income                0.08     (0.30)     0.09     (0.29)

Weighted average common shares
 outstanding:
Net loss
  Basic                          98,203    84,687    98,132    82,764
  Diluted                        98,203    84,687    98,132    82,764
Adjusted net income
  Basic                          98,203    84,687    98,132    82,764
  Diluted                       101,705    84,687   101,634    82,764
WYNN RESORTS, LIMITED AND SUBSIDIARIES
             RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
                 (In thousands, except per share data)
                              (Unaudited)

                             Three Months Ended     Six Months Ended
                                  June 30,               June 30,
                            --------------------  --------------------
                               2005       2004       2005       2004
                            ---------  ---------  ---------  ---------

Net loss                    $(35,162)  $(41,919)  $(72,789)  $(55,167)

  Add/(Deduct):
    Minority interest              -       (404)         -     (1,054)

    Interest income           (6,983)    (1,511)   (13,165)    (3,130)
    Interest expense, net     26,341         94     28,490        197
    Loss on early
     extinguishment of debt        -     25,628          -     25,628
                            ---------  ---------  ---------  ---------

      Total                   19,358     24,211     15,325     22,695
                            ---------  ---------  ---------  ---------

Operating loss               (15,804)   (18,112)   (57,464)   (33,526)

  Add/(Deduct):
  Preopening expenses:
    Wynn Las Vegas            36,900      8,756     65,137     15,877
    Wynn Macau                 4,124      2,254      6,598      4,532
    Corporate and other        2,341      5,456      9,734     10,608
  Depreciation and
   amortization:
    Wynn Las Vegas            23,376        285     24,260        443
    Wynn Macau                 1,469        140      2,934        140
    Corporate and other        1,280        617      2,425      1,241
  Corporate expenses and
   other                       5,049        602      5,111        683
                            ---------  ---------  ---------  ---------

    Total                     74,539     18,110    116,199     33,524
                            ---------  ---------  ---------  ---------

Wynn Las Vegas adjusted
 EBITDA (1)                  $58,735        $(2)   $58,735        $(2)
                            =========  =========  =========  =========
WYNN RESORTS, LIMITED AND SUBSIDIARIES
                      SUPPLEMENTAL DATA SCHEDULE

                                              Three Months Ended
                                               June 30, 2005 (1)
                                           ------------------------

Room Statistics for Wynn Las Vegas:
     Occupancy %                                     90.1%
     Average Daily Room Rate (ADR)(2)                 $284
     Average Paying Rate (APR)(3)                     $267
     Revenue per available room (REVPAR)(4)           $255

Other information:
     Table games win per unit per day (5)           $7,117
     Table Hold %                                    21.1%
     Slot Machine win per unit per day (6)            $273
     Average number of table games                     136
     Average number of slot machines                 1,960

(1) Reflects the period from April 28, 2005 to June 30, 2005.
(2) ADR is Average Daily Rate and is calculated by dividing total
    room revenue by total rooms occupied.
(3) APR is Average Paying Rate and is calculated by dividing cash
    room revenue by cash rooms occupied.
(4) REVPAR is Revenue per Available Room and is calculated by
    dividing total room revenue by total rooms available.
(5) Table games win per unit per day net of customer discounts.
(6) Slot machine win per unit per day shown net of participation
    fees, free play and progressive accruals.

SOURCE: Wynn Resorts, Limited

Wynn Resorts, Limited, Las Vegas
Samanta Stewart, 702-770-7555
investorrelations@wynnresorts.com
www.wynnresorts.com
www.wynnlasvegas.com