WYNN MACAU, LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
(incorporated in the Cayman Islands with limited liability)
(Stock Code: 1128)
This announcement is issued pursuant to Rule 13.09 of the Rules Governing the Listing of the Securities on The Stock Exchange of Hong Kong Limited and under Part XIVA of the Securities and Futures Ordinance (Cap. 571).
Our controlling shareholder, Wynn Resorts, Limited has, on or about 6 November 2015 (1:40 p.m., Las Vegas time), released its unaudited results for the third quarter ended 30 September 2015 and the first three quarters of fiscal 2015 ended 30 September 2015.
This announcement is issued by Wynn Macau, Limited ('we' or our 'Company') pursuant to Rule
13.09 of the Rules Governing the Listing of the Securities on The Stock Exchange of Hong Kong Limited and under Part XIVA of the Securities and Futures Ordinance (Cap. 571).
Our Company's controlling shareholder, Wynn Resorts, Limited, is a company listed on the National Association of Securities Dealers Automated Quotations ('NASDAQ') Global Select Market in the United States. As at the date of this announcement, Wynn Resorts, Limited beneficially owns approximately 72% of the issued share capital of our Company.
Reference is made to our announcement on 16 October 2015 (the 'WRL Earnings Release Announcement') in respect of the release by our controlling shareholder, Wynn Resorts, Limited, of its unaudited financial results for the third quarter ended 30 September 2015 and the first three quarters of fiscal 2015 ended 30 September 2015. Unless otherwise defined in this announcement, terms defined in the WRL Earnings Release Announcement have the same meaning when used in this announcement.
* For identification purposes only.
Further to the WRL Earnings Release Announcement, Wynn Resorts, Limited has, on or about 6 November 2015, 1:40 p.m., Las Vegas time, released its quarterly report with unaudited financial results for the third quarter ended 30 September 2015 and the first three quarters of fiscal 2015 ended 30 September 2015 (the 'WRL Quarterly Report'). If you wish to review the WRL Quarterly Report prepared by Wynn Resorts, Limited and as filed with the SEC, please visit https://www.sec.gov/Archives/edgar/data/1174922/000117492215000106/0001174922-15-000106-index.htm. The WRL Quarterly Report contains segment financial information about Wynn Resorts, Limited's Macau operations, which are owned by our Company. The WRL Quarterly Report is also available in the public domain.
The financial results of Wynn Resorts, Limited, including those contained in the WRL Quarterly Report, have been prepared in accordance with the Generally Accepted Accounting Principles of the United States ('US GAAP'), which are different from the International Financial Reporting Standards ('IFRS') that we use to prepare and present our financial information. As such, the financial information in the WRL Quarterly Report is not directly comparable to the financial results our Company discloses. In particular, Average Daily Rate ('ADR') and Revenue Per Available Room ('REVPAR') as presented in the WRL Quarterly Report are based on room revenues as reported under US GAAP, which include associated promotional allowances within room revenues. Under US GAAP, promotional allowances are deducted from gross revenues in presenting net revenue. Under IFRS, room revenues exclude such promotional allowances. Consequently, we offer no indication or assurance that the financial results of our Group for the third quarter ended 30 September 2015 and the first three quarters of fiscal 2015 ended 30 September 2015 will be the same as that presented in the WRL Quarterly Report. In the WRL Earnings Release Announcement, we announced our unaudited financial results for the third quarter ended 30 September 2015 prepared in accordance with IFRS.
To ensure that all shareholders and potential investors of our Company have equal and timely access to the information pertaining to our Company, set forth below are the key highlights of financial and other information published by Wynn Resorts, Limited in the WRL Quarterly Report that relate to our Company and our operations in Macau (unless otherwise provided, all dollar amounts in the WRL Quarterly Report are denominated in United States dollars), some of which may constitute material inside information about our Company:
'QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended September 30, 2015
Accounts Receivable and Credit Risk
The Company advances commissions to its games promoters in Macau. These were previously supported primarily by held checks and recognized as cash and cash equivalents ($153.4 million as of December 31, 2014). Market conditions in Macau and other regional economic factors have impacted the liquidity of certain games promoters. As a result, the Company's advanced commissions to games promoters now are supported primarily with signed promissory notes. The advanced commissions are on terms requiring settlement within five business days of the month following the advance. The Company recognized advanced commissions of $72.4 million as casino receivables in the accompanying Condensed Consolidated Balance Sheet as of September 30, 2015 and assesses these advanced commissions in connection with the Company's evaluation of its bad debt reserve for casino receivables. Additionally, the amount presented in the accompanying Condensed Consolidated Balance Sheet has been offset by related commissions payable to games promoters of $37.0 million as of September 30, 2015.
The Company reviews the remaining estimated useful lives of its property and equipment on an ongoing basis. For the review of estimated useful lives of buildings and improvements for Wynn Macau, the Company considers factors such as liberalization of the gaming industry in Macau, market expansion and actions taken by the Macau government regarding concession renewals. This review during the third quarter of 2015 indicated that the Company's estimated useful lives of buildings and improvements extend beyond the current expiration of the gaming concession in June 2022 and land concession in August 2029. As a result, effective September 1, 2015, the Company changed its estimate of remaining useful lives of buildings and improvements for Wynn Macau to better reflect the estimated periods during which these assets are expected to remain in service. The maximum useful life of buildings and improvements for Wynn Macau was increased to 45 years from the date placed in service. The effect of this change in estimate in the quarter ended September 30, 2015, was to reduce depreciation expense and increase net income by $1.8 million, and increase basic and diluted earnings per share by $0.01.
Note 8 - Long-Term DebtLong-term debt consisted of the following (in thousands):
Wynn Macau Credit Facilities:
Senior Term Loan Facility (as amended September 2015), due September 2021; interest at LIBOR or HIBOR plus 1.50%-2.25%, net of original
issue discount of $36,344 at September 30, 2015 $2,271,069 $ - Senior Term Loan Facility, due July 31, 2017 and
July 31, 2018; interest at LIBOR or HIBOR plus 1.75%-2.50%, net of original issue
discount of $3,830 at December 31, 2014 - 948,823 Senior Revolving Credit Facility, due July 31,
2017, interest at LIBOR or HIBOR plus
1.75%-2.50% at December 31, 2014 - 132,524
5 1/4% Senior Notes, due October 15, 2021, including original issue premium of $4,657 at September 30, 2015 and $5,141 at December 31,
2014 1,354,657 1,355,141
Wynn Macau Credit Facilities
On September 30, 2015, Wynn Resorts (Macau) S.A. ('Wynn Macau SA'), an indirect subsidiary of Wynn Macau, Limited, amended its senior secured credit facilities, dated July 30, 2012 (the 'Amended Wynn Macau Credit Facilities') to, among other things, increase borrowing capacity and extend maturity dates. Borrowings under the Amended Wynn Macau Credit Facilities consist of both United States dollar and Hong Kong dollar tranches and were used to refinance Wynn Macau SA's existing indebtedness, to fund the construction and development of Wynn Palace and for general corporate purposes.
The borrowing availability under the Amended Wynn Macau Credit Facilities was increased to
$3.05 billion equivalent, representing an increase of $550 million equivalent, consisting of a
$2.3 billion equivalent senior secured term loan facility (the 'Wynn Macau Senior Term Loan Facility') and a $750 million equivalent senior secured revolving credit facility. Wynn Macau SA has the ability to upsize the Amended Wynn Macau Credit Facilities by an additional $1.0 billion equivalent senior secured loans upon satisfaction of various conditions.
The senior secured term loan facility is repayable in graduating installments of between 2.5% to 7.33% of the principal amount on a quarterly basis commencing December 2018, with a final installment of 50% of the principal amount repayable in September 2021 (extended from July
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