WYNN RESORTS LTD 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with, and is qualified in its entirety by, the condensed consolidated financial statements and the notes thereto included elsewhere in this Form 10-Q and the consolidated financial statements appearing in our annual report on Form 10-K for the year ended December 31, 2019. Unless the context otherwise requires, all references herein to the "Company," "we," "us," or "our," or similar terms, refer to Wynn Resorts, Limited, a Nevada corporation, and its consolidated subsidiaries. This discussion and analysis contains forward-looking statements. Please refer to the section below entitled "Special Note Regarding Forward-Looking Statements." Overview We are 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, all supported by an unparalleled focus on our guests, our people, and our community. Through our approximately 72% ownership of WML, we operate two integrated resorts in the Macau Special Administrative Region of the People's Republic of China ("Macau"), Wynn Palace and Wynn Macau (collectively, our "Macau Operations"). In Las Vegas, Nevada, we operate and, with the exception of certain retail space, own 100% of Wynn Las Vegas, which we also refer to as our Las Vegas Operations. On June 23, 2019, we opened Encore Boston Harbor, an integrated resort in Everett, Massachusetts. Recent Developments Related to COVID-19 As previously disclosed, in January 2020, an outbreak of a new strain of coronavirus, COVID-19 ("COVID-19"), was identified. Since then, COVID-19 has spread around the world, and steps have been taken by various countries, including those in which we operate, to advise citizens to avoid non-essential travel, to restrict inbound international travel, to implement closures of non-essential operations, and to implement quarantines and lockdowns to contain the spread of the virus. Currently, no fully effective treatments or vaccines have been developed, and there can be no assurance as to if or when an effective treatment or vaccine will be discovered. Macau Operations In response to the COVID-19 pandemic, the Macau government announced on February 4, 2020 the closure of all casino operations in Macau, including those at Wynn Palace and Wynn Macau, for a period of 15 days. On February 20, 2020, casino operations at Wynn Palace and Wynn Macau reopened on a reduced basis and have since been fully restored; however, certain COVID-19 specific protective measures, such as traveler quarantines, limiting the number of seats per table game, slot machine spacing, temperature checks, mask protection, COVID-19 negative test results requirements for entry to gaming areas, and health declarations remain in effect at the present time. Visitation to Macau has fallen significantly since the outbreak of COVID-19, driven by the pandemic's strong deterrent effect on travel and social activities, the Chinese government's suspension of its visa and group tour schemes that allow mainland Chinese residents to travel to Macau, various quarantine measures in Macau and elsewhere, travel and entry restrictions in Macau, Hong Kong, Taiwan, and mainland China, and the suspension of ferry services to Macau from Hong Kong and mainland China and other modes of transportation within Macau. Total visitation from mainland China to Macau decreased by 99.3% and 83.7% in the three and six months ended June 30, 2020, compared to the same periods in 2019. Regionally, bans on entry or enhanced quarantine requirements, depending on the person’s residency and their recent travel history, for any Macau residents, PRC citizens, Hong Kong residents and Taiwan residents attempting to enter Macau are drastically impacting visitation. Persons who are not residents of the Greater China area are barred from entry to Macau at this time. While most of the foregoing travel restrictions and quarantine requirements continue to weigh on visitation to Macau, beginning in June 2020 certain of these restrictions are being eased as the region gradually recovers from the COVID-19 pandemic. In July 2020, Guangdong Province, a Chinese province adjacent to Macau, eased certain quarantine requirements for those traveling between Guangdong Province and Macau, subject to certain testing requirements and health declarations. Quarantine requirements for those traveling between Hong Kong and Macau have been announced to remain effective until at least September 7, 2020, at which time they may be lifted. In the initial phase of opening travel channels between Macau and other regions, it is expected that all visitors seeking entry to Macau will need to test negative for COVID-19 before entering Macau. Although Mainland China and Macau have recently announced several policies or changes to policies which relax certain visa issuance, border control and quarantine requirements, stringent health declarations, testing and other procedures 27 Table of Contents remain in place and the Individual Visitor Scheme which, prior to its suspension by the PRC government due to COVID-19 travel restrictions, permitted individual PRC citizens from nearly 50 PRC cities to travel to Macau for tourism purposes, has yet to restart. Las Vegas Operations and Encore Boston Harbor Wynn Las Vegas closed on March 17, 2020, and reopened on June 4, 2020 with certain COVID-19 specific protective measures in place, such as limiting the number of seats per table game, slot machine spacing, temperature checks, mask protection, and suspension of certain entertainment and nightlife offerings. Encore Boston Harbor commenced operations on June 23, 2019. In response to the COVID-19 pandemic, Encore Boston Harbor ceased all operations and closed to the public on March 15, 2020, for the remainder of the first and second quarters of 2020. On July 12, 2020, Encore Boston Harbor reopened with certain COVID-19 specific protective measures in place, such as limiting the number of seats per table game, slot machine spacing, temperature checks, and mask protection. In addition, certain food and beverage outlets remain closed and hotel reservations have been limited to Thursday through Sunday. The disruptions arising from the COVID-19 outbreak have had, during the three and six months ended June 30, 2020, and will continue to have an adverse effect on the Company's results of operations. Our operations are generating extremely limited revenue. Given the uncertainty around the extent and timing of the potential future spread or mitigation of COVID-19 and around the imposition or relaxation of protective measures, the impact on the Company’s consolidated results of operations, cash flows and financial condition in 2020 and potentially thereafter will be material, but cannot be reasonably estimated at this time as it is unknown when the COVID-19 pandemic will end, when or if our properties will return to pre-pandemic demand and pricing, when or how quickly the current travel restrictions will be modified or cease to be necessary and the resulting impact on the Company’s business. Key Operating Measures Certain key operating measures specific to the gaming industry are included in our discussion of our operational performance for the periods for which the Condensed Consolidated Statements of Operations are presented. These key operating measures are presented as supplemental disclosures because management and/or certain investors use these measures to better understand period-over-period fluctuations in our casino and hotel operating revenues. These key operating measures are defined below: • Table drop in mass market for our Macau Operations is the amount of cash that is deposited in a gaming table's drop box plus cash chips purchased at the casino cage. • Table drop for our Las Vegas Operations is the amount of cash and net markers issued that are deposited in a gaming table's drop box. • Table drop for Encore Boston Harbor is the amount of cash and gross markers issued that are deposited in a gaming table's drop box. • Rolling chips are non-negotiable identifiable chips that are used to track turnover for purposes of calculating incentives within our Macau Operations' VIP program. • Turnover is the sum of all losing rolling chip wagers within our Macau Operations' VIP program. • Table games win is the amount of table drop or turnover that is retained and recorded as casino revenues. Table games win is before discounts, commissions and the allocation of casino revenues to rooms, food and beverage and other revenues for services provided to casino customers on a complimentary basis. Table games win does not include poker rake. • Slot machine win is the amount of handle (representing the total amount wagered) that is retained by us and is recorded as casino revenues. Slot machine win is after adjustment for progressive accruals and free play, but before discounts and the allocation of casino revenues to rooms, food and beverage and other revenues for services provided to casino customers on a complimentary basis. • Poker rake is the portion of cash wagered by patrons in our poker rooms that is retained by the casino as a service fee, after adjustment for progressive accruals, but before the allocation of casino revenues to rooms, food and beverage and other revenues for services provided to casino customers on a complimentary basis. Poker tables are not included in our measure of average number of table games. • Average daily rate ("ADR") is calculated by dividing total room revenues, including complimentaries (less service charges, if any), by total rooms occupied. 28 Table of Contents • Revenue per available room ("REVPAR") is calculated by dividing total room revenues, including complimentaries (less service charges, if any), by total rooms available. • Occupancy is calculated by dividing total occupied rooms, including complimentary rooms, by the total rooms available. Below is a discussion of the methodologies used to calculate win percentages at our resorts. In our VIP operations in Macau, customers primarily purchase rolling chips from the casino cage and can only use them to make wagers. Winning wagers are paid in cash chips. The loss of the rolling chips in the VIP operations is recorded as turnover and provides a base for calculating VIP win percentage. It is customary in Macau to measure VIP play using this rolling chip method. We expect our win as a percentage of turnover from these operations to be within the range of 2.7% to 3.0%. In our mass market operations in Macau, customers may purchase cash chips at either the gaming tables or at the casino cage. The measurements from our VIP and mass market operations are not comparable as the measurement method used in our mass market operations tracks the initial purchase of chips at the table and at the casino cage, while the measurement method from our VIP operations tracks the sum of all losing wagers. Accordingly, the base measurement from the VIP operations is much larger than the base measurement from the mass market operations. As a result, the expected win percentage with the same amount of gaming win is lower in the VIP operations when compared to the mass market operations. In Las Vegas, customers purchase chips at the gaming tables in exchange for cash and markers. Customers may then redeem markers at the gaming tables or at the casino cage. The cash and markers, net of redemptions, used to purchase chips are deposited in the gaming table's drop box. This is the base of measurement that we use for calculating win percentage. Each type of table game has its own theoretical win percentage. Our expected table games win percentage is 22% to 26%. At Encore Boston Harbor, customers purchase chips at the gaming tables in exchange for cash and markers. Customers may then redeem markers only at the casino cage. The cash and gross markers used to purchase chips are deposited in the gaming table's drop box. This is the base of measurement that we use for calculating win percentage. Each type of table game has its own theoretical win percentage. Our expected table games win percentage is 16% to 20%. Results of Operations Summary of second quarter 2020 results The following table summarizes our financial results for the periods presented (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change 2020 2019 Increase/ (Decrease) Percent Change Operating revenues $ 85,698 $ 1,658,332 $ (1,572,634) (94.8) $ 1,039,414 $ 3,309,878 $ (2,270,464) (68.6) Net income (loss) attributable to Wynn Resorts, Limited (637,564) 94,551 (732,115) (774.3) (1,039,601) 199,423 (1,239,024) (621.3) Diluted net income (loss) per share (5.97) 0.88 (6.85) (778.4) (9.74) 1.86 (11.60) (623.7) Adjusted Property EBITDA (1) (322,897) 480,583 (803,480) (167.2) (328,226) 975,360 (1,303,586) (133.7) (1) See Item 1—"Financial Statements," Note 16, "Segment Information," for a reconciliation of Adjusted Property EBITDA to net income (loss) attributable to Wynn Resorts, Limited. The decrease in operating revenues for the three months ended June 30, 2020 was primarily driven by decreases of $620.2 million, $534.6 million, and $399.3 million from Wynn Palace, Wynn Macau, and our Las Vegas Operations, respectively. These declines were precipitated by the continued adverse effects of the COVID-19 pandemic, including travel restrictions and 29 Table of Contents capacity limitations which remain in effect in Macau and the closure of our Las Vegas Operations from March 17, 2020 until June 4, 2020. Encore Boston Harbor closed to the public on March 15, 2020 and remained closed until July 12, 2020. The decrease in net income (loss) attributable to Wynn Resorts, Limited for the three months ended June 30, 2020 was primarily related to the adverse effects of the COVID-19 pandemic on the results of our operations. Net income (loss) attributable to Wynn Resorts, Limited for the three months ended June 30, 2020 excludes the impact of $75.7 million of expense related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. The decrease in Adjusted Property EBITDA for the three months ended June 30, 2020 was driven by decreases of $278.1 million, $258.5 million, and $213.0 million from Wynn Palace, Wynn Macau, and our Las Vegas Operations, respectively. Adjusted Property EBITDA from Encore Boston Harbor was $(53.8) million. Financial results for the three months ended June 30, 2020 compared to the three months ended June 30, 2019. Operating revenues The following table presents our operating revenues (in thousands): Three Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change Operating revenues Macau Operations: Wynn Palace $ 8,718 $ 628,916 $ (620,198) (98.6) Wynn Macau 11,888 546,474 (534,586) (97.8) Total Macau Operations 20,606 1,175,390 (1,154,784) (98.2) Las Vegas Operations 64,886 464,142 (399,256) (86.0) Encore Boston Harbor (1) 206 18,800 (18,594) (98.9) $ 85,698 $ 1,658,332 $ (1,572,634) (94.8) (1) Encore Boston Harbor commenced operations on June 23, 2019. The following table presents our casino and non-casino operating revenues (in thousands): Three Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change Operating revenues Casino revenues $ 9,413 $ 1,142,503 $ (1,133,090) (99.2) Non-casino revenues: Rooms 17,415 198,807 (181,392) (91.2) Food and beverage 24,007 218,022 (194,015) (89.0) Entertainment, retail and other 34,863 99,000 (64,137) (64.8) Total non-casino revenues 76,285 515,829 (439,544) (85.2) $ 85,698 $ 1,658,332 $ (1,572,634) (94.8) Casino revenues for the three months ended June 30, 2020 were 11.0% of operating revenues, compared to 68.9% for the same period of 2019. Non-casino revenues for the three months ended June 30, 2020 were 89.0% of operating revenues, compared to 31.1% for the same period of 2019. Casino revenues Casino revenues decreased primarily due to the adverse effects of the COVID-19 pandemic, including widespread travel restrictions and capacity limitations and the closure of our Las Vegas Operations from March 17, 2020 until June 4, 2020. Encore Boston Harbor closed to the public on March 15, 2020, and remained closed through the second quarter. The table below sets forth our casino revenues and associated key operating measures (dollars in thousands, except for win per unit per day): 30 Table of Contents Three Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change Macau Operations: Wynn Palace: Total casino revenues $ (11,428) $ 528,545 $ (539,973) (102.2) VIP: Average number of table games 100 112 (12) (10.7) VIP turnover $ 1,719,825 $ 13,388,646 $ (11,668,821) (87.2) VIP table games win $ (29,806) $ 404,408 $ (434,214) (107.4) VIP win as a % of turnover (1.73) % 3.02 % (4.75) Table games win per unit per day $ (3,276) $ 39,827 $ (43,103) (108.2) Mass market: Average number of table games 221 214 7 3.3 Table drop $ 22,029 $ 1,267,153 $ (1,245,124) (98.3) Table games win $ 7,168 $ 296,852 $ (289,684) (97.6) Table games win % 32.5 % 23.4 % 9.1 Table games win per unit per day $ 357 $ 15,232 $ (14,875) (97.7) Average number of slot machines 480 1,099 (619) (56.3) Slot machine handle $ 39,415 $ 937,842 $ (898,427) (95.8) Slot machine win $ 2,395 $ 43,567 $ (41,172) (94.5) Slot machine win per unit per day $ 55 $ 436 $ (381) (87.4) Wynn Macau: Total casino revenues $ (3,524) $ 481,204 $ (484,728) (100.7) VIP: Average number of table games 91 110 (19) (17.3) VIP turnover $ 607,144 $ 9,275,628 $ (8,668,484) (93.5) VIP table games win $ (12,161) $ 305,809 $ (317,970) (104.0) VIP win as a % of turnover (2.00) % 3.30 % (5.30) Table games win per unit per day $ (1,471) $ 30,560 $ (32,031) (104.8) Mass market: Average number of table games 229 205 24 11.7 Table drop $ 40,817 $ 1,347,435 $ (1,306,618) (97.0) Table games win $ 3,391 $ 279,127 $ (275,736) (98.8) Table games win % 8.3 % 20.7 % (12.4) Table games win per unit per day $ 163 $ 14,929 $ (14,766) (98.9) Average number of slot machines 440 827 (387) (46.8) Slot machine handle $ 62,011 $ 925,784 $ (863,773) (93.3) Slot machine win $ 2,626 $ 42,815 $ (40,189) (93.9) Slot machine win per unit per day $ 66 $ 569 $ (503) (88.5) Poker rake $ — $ 4,674 $ (4,674) (100.0) 31 Table of Contents Three Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change Las Vegas Operations: Total casino revenues $ 24,365 $ 119,753 $ (95,388) (79.7) Average number of table games 221 238 (17) (7.1) Table drop $ 90,873 $ 440,766 $ (349,893) (79.4) Table games win $ 17,918 $ 126,395 $ (108,477) (85.8) Table games win % 19.7 % 28.7 % (9.0) Table games win per unit per day $ 2,998 $ 5,832 $ (2,834) (48.6) Average number of slot machines 1,752 1,789 (37) (2.1) Slot machine handle $ 246,393 $ 811,639 $ (565,246) (69.6) Slot machine win $ 17,523 $ 55,128 $ (37,605) (68.2) Slot machine win per unit per day $ 371 $ 339 $ 32 9.4 Poker rake $ — $ 4,119 $ (4,119) (100.0) Note: Encore Boston Harbor casino revenues and associated key operating measures have been omitted from the table. As a result of the COVID-19 pandemic, our operations at Encore Boston Harbor were closed throughout the second quarter in 2020. In addition, the results of the eight days of its operations during the second quarter of 2019 between its June 23, 2019 opening and June 30, 2019 are not considered material to our consolidated results of operations for the three months ended June 30, 2019. Non-casino revenues The table below sets forth our room revenues and associated key operating measures: Three Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change Macau Operations: Wynn Palace : Total room revenues (dollars in thousands) $ 2,431 $ 43,183 $ (40,752) (94.4) Occupancy 4.4 % 97.4 % (93.0) ADR $ 339 $ 265 $ 74 27.9 REVPAR $ 15 $ 258 $ (243) (94.2) Wynn Macau: Total room revenues (dollars in thousands) $ 2,631 $ 26,465 $ (23,834) (90.1) Occupancy 7.5 % 98.9 % (91.4) ADR $ 342 $ 281 $ 61 21.7 REVPAR $ 25 $ 278 $ (253) (91.0) Las Vegas Operations: Total room revenues (dollars in thousands) $ 12,353 $ 127,554 $ (115,201) (90.3) Occupancy 43.7 % 90.1 % (46.4) ADR $ 226 $ 333 $ (107) (32.1) REVPAR $ 99 $ 300 $ (201) (67.0) Note: Encore Boston Harbor room revenues and associated key operating measures have been omitted from the table. As a result of the COVID-19 pandemic, our operations at Encore Boston Harbor were closed throughout the second quarter in 2020. In addition, the results of the eight days of its operations during the second quarter of 2019 are not considered material to our consolidated results of operations for the three months ended June 30, 2019. Room revenues decreased $181.4 million, primarily due to lower occupancy at Wynn Palace and Wynn Macau and the closure of our Las Vegas Operations resulting from the adverse effects of the COVID-19 pandemic. 32 Table of Contents Food and beverage revenues decreased $194.0 million, primarily due to decreased covers at our restaurants at our Macau Operations and the closure of our Las Vegas Operations resulting from the adverse effects of the COVID-19 pandemic. Entertainment, retail and other revenues decreased $64.1 million, primarily due to a decrease in visitation to our Macau Operations and the closure of our Las Vegas Operations resulting from the adverse effects of the COVID-19 pandemic. Operating expenses The table below presents operating expenses (in thousands): Three Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change Operating expenses: Casino $ 131,138 $ 724,987 $ (593,849) (81.9) Rooms 30,367 66,148 (35,781) (54.1) Food and beverage 61,889 182,080 (120,191) (66.0) Entertainment, retail and other 16,873 43,514 (26,641) (61.2) General and administrative 152,081 202,224 (50,143) (24.8) Provision for credit losses 28,347 3,581 24,766 691.6 Pre-opening 2,186 69,883 (67,697) (96.9) Depreciation and amortization 179,266 140,269 38,997 27.8 Property charges and other 6,567 6,930 (363) (5.2) Total operating expenses $ 608,714 $ 1,439,616 $ (830,902) (57.7) Total operating expenses decreased $830.9 million compared to the second quarter of 2019, primarily due to decreased expenses related to the impact of the COVID-19 pandemic on our resorts, partially offset by increased operating expenses following the opening of Encore Boston Harbor in June 2019. Operating expenses for the second quarter of 2020 exclude $75.7 million of expense related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. Casino expenses decreased $311.8 million, $260.3 million, and $27.7 million at Wynn Palace, Wynn Macau, and our Las Vegas Operations, respectively. These decreases were primarily due to reductions in gaming tax expense commensurate with the declines in casino revenues at each property resulting from the effects of the COVID-19 pandemic. Casino expenses for the second quarter of 2020 exclude expense of $7.9 million from Encore Boston Harbor and $12.8 million from our Las Vegas Operations related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. Room expenses decreased $28.7 million, $6.6 million, and $2.1 million at our Las Vegas Operations, Wynn Palace, and Wynn Macau respectively. The decreases were primarily a result of lower operating costs related to the decline in occupancy at each property resulting from the effects of the COVID-19 pandemic. Room expenses for the second quarter of 2020 exclude expense of $1.5 million from Encore Boston Harbor and $8.3 million from our Las Vegas Operations related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. Food and beverage expenses decreased $100.5 million, $15.3 million, and $7.3 million at our Las Vegas Operations, Wynn Palace, and Wynn Macau, respectively. The decreases were primarily a result of lower operating costs related to the declines in food and beverage revenues at each property resulting from the effects of the COVID-19 pandemic. Food and beverage expenses for the second quarter of 2020 exclude expense of $20.8 million from our Las Vegas Operations and $4.8 million from Encore Boston Harbor related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. Entertainment, retail and other expenses decreased $20.5 million, $5.4 million, and $2.4 million at our Las Vegas Operations, Wynn Palace, and Wynn Macau, respectively. The decreases were primarily a result of lower operating costs related to the declines in entertainment, retail and other revenues at each property resulting from the effects of the COVID-19 pandemic. Entertainment, retail and other expenses exclude expense of $4.1 million from our Las Vegas Operations and 33 Table of Contents $0.7 million from Encore Boston Harbor related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. General and administrative expenses decreased primarily due to decreases of $14.6 million, $7.0 million and $14.6 million at Wynn Palace, Wynn Macau, and our Las Vegas Operations, respectively. These decreases were primarily attributable to the effects of the COVID-19 pandemic. General and administrative expenses exclude expense of $10.2 million from our Las Vegas Operations and $4.4 million from Encore Boston Harbor related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. In addition, corporate and other general and administrative expenses decreased $37.2 million, primarily due to a credit of $27.7 million for the net proceeds of a derivative action settlement recognized during the three months ended June 30, 2020. These decreases were partially offset by an increase of $23.3 million of general and administrative expenses from Encore Boston Harbor due to the opening of the property in June 2019. Provision for credit losses increased primarily due to increases of $6.4 million, $12.0 million and $5.6 million at our Las Vegas Operations, Wynn Palace, and Wynn Macau, respectively. The increases were primarily due to the impact of historical collection patterns and expectations of current and future collection trends in light of the COVID-19 pandemic, as well as the specific review of customer accounts, on our estimated credit loss for the respective periods. For the three months ended June 30, 2020, pre-opening expenses totaled $2.2 million, which primarily related to restaurant remodels at our Las Vegas Operations. For the three months ended June 30, 2019, pre-opening expenses totaled $69.9 million, which primarily related to the development of Encore Boston Harbor. Depreciation and amortization increased primarily due to additional depreciation expense of $36.9 million associated with the opening of Encore Boston Harbor in June 2019. Our property charges and other expenses for the quarter ended June 30, 2020 consisted primarily of asset disposals, abandonments and retirements of $3.6 million and $1.0 million at Encore Boston Harbor and Wynn Palace, respectively. Interest expense, net of capitalized interest The following table summarizes information related to interest expense (dollars in thousands): Three Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change Interest expense Interest cost, including amortization of debt issuance costs and original issue discount and premium $ 133,218 $ 117,276 $ 15,942 13.6 Capitalized interest — (24,127) (24,127) (100.0) $ 133,218 $ 93,149 $ 40,069 43.0 Weighted average total debt balance $ 12,143,644 $ 9,204,417 Weighted average interest rate 4.38 % 5.08 % Interest costs increased due to an increase in the weighted average debt balance, partially offset by a decrease in the weighted average interest rate. Capitalized interest decreased due to the completion of Encore Boston Harbor construction activities on June 23, 2019. Other non-operating income and expenses We incurred a foreign currency remeasurement gain of $2.2 million and $11.7 million for the three months ended June 30, 2020 and 2019, respectively. The impact of the exchange rate fluctuation of the Macau pataca, in relation to the U.S. dollar, on the remeasurements of U.S. dollar denominated debt and other obligations from our Macau-related entities drove the variability between periods. We recorded a loss of $3.3 million and $3.3 million for the three months ended June 30, 2020 and 2019, respectively, from change in derivatives fair value. 34 Table of Contents Income taxes We recorded an income tax expense of $80.9 million and an income tax benefit of $2.0 million for the three months ended June 30, 2020 and 2019, respectively. The 2020 income tax expense primarily related to the increase in the valuation allowances for U.S foreign tax credits and U.S. loss carryforwards. The 2019 income tax benefit primarily related to the decrease in the valuation allowance for U.S foreign tax credits. Net income (loss) attributable to noncontrolling interests Net loss attributable to noncontrolling interests was $97.3 million for the three months ended June 30, 2020, compared to net income of $47.7 million for the same period of 2019. These amounts are primarily related to the noncontrolling interests' share of net income (loss) from WML. 35 Table of Contents Financial results for the six months ended June 30, 2020 compared to the six months ended June 30, 2019. Operating revenues The following table presents our operating revenues (in thousands): Six Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change Operating revenues Macau Operations: Wynn Palace $ 268,231 $ 1,355,538 $ (1,087,307) (80.2) Wynn Macau 241,377 1,070,365 (828,988) (77.4) Total Macau Operations 509,608 2,425,903 (1,916,295) (79.0) Las Vegas Operations 388,710 865,175 (476,465) (55.1) Encore Boston Harbor (1) 141,096 18,800 122,296 650.5 $ 1,039,414 $ 3,309,878 $ (2,270,464) (68.6) (1) Encore Boston commenced operations on June 23, 2019. The following table presents casino and non-casino operating revenues (in thousands): Six Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change Operating revenues Casino revenues $ 580,202 $ 2,327,604 $ (1,747,402) (75.1) Non-casino revenues: Rooms 170,096 390,077 (219,981) (56.4) Food and beverage 173,421 391,241 (217,820) (55.7) Entertainment, retail and other 115,695 200,956 (85,261) (42.4) Total non-casino revenues 459,212 982,274 (523,062) (53.3) $ 1,039,414 $ 3,309,878 $ (2,270,464) (68.6) Casino revenues for the six months ended June 30, 2020 were 55.8% of operating revenues, compared to 70.3% for the same period of 2019. Non-casino revenues for the six months ended June 30, 2020 were 44.2% of operating revenues, compared to 29.7% for the same period of 2019. 36 Table of Contents Casino revenues Casino revenues decreased primarily due to the adverse effects of the COVID-19 pandemic, including the closure of our casino operations in Macau for a 15-day period in February and their subsequent reopening on a reduced basis, and the closure of our Las Vegas Operations from March 17, 2020 until June 4, 2020. Encore Boston Harbor closed to the public on March 15, 2020, and remained closed through the second quarter. The table below sets forth our casino revenues and associated key operating measures (dollars in thousands, except for win per unit per day): Six Months Ended June 30, 2020 2019 Increase/(Decrease) Percent Change Macau Operations: Wynn Palace: Total casino revenues $ 196,148 $ 1,151,720 $ (955,572) (83.0) VIP: Average number of table games 95 112 (17) (15.2) VIP turnover $ 6,512,279 $ 26,015,909 $ (19,503,630) (75.0) VIP table games win $ 109,763 $ 897,592 $ (787,829) (87.8) VIP win as a % of turnover 1.69 % 3.45 % (1.76) Table games win per unit per day $ 6,865 $ 44,464 $ (37,599) (84.6) Mass market: Average number of table games 201 212 (11) (5.2) Table drop $ 497,252 $ 2,571,076 $ (2,073,824) (80.7) Table games win $ 137,882 $ 612,320 $ (474,438) (77.5) Table games win % 27.7 % 23.8 % 3.9 Table games win per unit per day $ 4,075 $ 15,929 $ (11,854) (74.4) Average number of slot machines 596 1,095 (499) (45.6) Slot machine handle $ 464,129 $ 1,912,890 $ (1,448,761) (75.7) Slot machine win $ 20,800 $ 94,968 $ (74,168) (78.1) Slot machine win per unit per day $ 208 $ 479 $ (271) (56.6) Wynn Macau: Total casino revenues $ 186,604 $ 931,446 $ (744,842) (80.0) VIP: Average number of table games 86 111 (25) (22.5) VIP turnover $ 3,571,290 $ 19,469,660 $ (15,898,370) (81.7) VIP table games win $ 110,464 $ 601,107 $ (490,643) (81.6) VIP win as a % of turnover 3.09 % 3.09 % — Table games win per unit per day $ 7,623 $ 29,824 $ (22,201) (74.4) Mass market: Average number of table games 208 206 2 1.0 Table drop $ 619,052 $ 2,699,128 $ (2,080,076) (77.1) Table games win $ 121,333 $ 543,669 $ (422,336) (77.7) Table games win % 19.6 % 20.1 % (0.5) Table games win per unit per day $ 3,472 $ 14,608 $ (11,136) (76.2) Average number of slot machines 529 827 (298) (36.0) Slot machine handle $ 428,549 $ 1,720,151 $ (1,291,602) (75.1) Slot machine win $ 15,921 $ 80,709 $ (64,788) (80.3) Slot machine win per unit per day $ 179 $ 539 $ (360) (66.8) Poker rake $ 2,083 $ 10,426 $ (8,343) (80.0) 37 Table of Contents Six Months Ended June 30, 2020 2019 Increase/(Decrease) Percent Change Las Vegas Operations: Total casino revenues $ 95,660 $ 231,437 $ (135,777) (58.7) Average number of table games 233 238 (5) (2.1) Table drop $ 505,806 $ 844,839 $ (339,033) (40.1) Table games win $ 100,584 $ 237,765 $ (137,181) (57.7) Table games win % 19.9 % 28.1 % (8.2) Table games win per unit per day $ 4,152 $ 5,517 $ (1,365) (24.7) Average number of slot machines 1,762 1,798 (36) (2.0) Slot machine handle $ 911,226 $ 1,600,949 $ (689,723) (43.1) Slot machine win $ 64,197 $ 109,672 $ (45,475) (41.5) Slot machine win per unit per day $ 350 $ 337 $ 13 3.9 Poker rake $ 2,175 $ 6,579 $ (4,404) (66.9) Encore Boston Harbor (1) : Total casino revenues $ 101,790 $ 13,001 $ 88,789 — Average number of table games 160 — 160 — Table drop $ 275,631 $ — $ 275,631 — Table games win $ 57,286 $ — $ 57,286 — Table games win % 20.8 % — % 20.8 Table games win per unit per day $ 4,826 $ — $ 4,826 — Average number of slot machines 2,837 — 2,837 — Slot machine handle $ 767,739 $ — $ 767,739 — Slot machine win $ 59,448 $ — $ 59,448 — Slot machine win per unit per day $ 283 $ — $ 283 — Poker rake $ 5,105 $ — $ 5,105 — (1) Encore Boston Harbor opened on June 23, 2019. The results of the eight days of its operations during the second quarter of 2019 are not considered material to our consolidated results of operations for the six months ended June 30, 2019. Accordingly, Encore Boston Harbor key operating measures for the six months ended June 30, 2019 have been omitted from the table. 38 Table of Contents Non-casino revenues The table below sets forth our room revenues and associated key operating measures: Six Months Ended June 30, 2020 2019 Increase/(Decrease) Percent Change Macau Operations: Wynn Palace: Total room revenues (dollars in thousands) $ 22,141 $ 86,498 $ (64,357) (74.4) Occupancy 23.5 % 97.3 % (73.8) ADR $ 298 $ 268 $ 30 11.2 REVPAR $ 70 $ 261 $ (191) (73.2) Wynn Macau: Total room revenues (dollars in thousands) $ 18,542 $ 55,331 $ (36,789) (66.5) Occupancy 28.4 % 99.1 % (70.7) ADR $ 324 $ 285 $ 39 13.5 REVPAR $ 92 $ 283 $ (191) (67.5) Las Vegas Operations: Total room revenues (dollars in thousands) $ 118,458 $ 246,644 $ (128,186) (52.0) Occupancy 70.6 % 86.3 % (15.7) ADR $ 350 $ 335 $ 15 4.5 REVPAR $ 247 $ 290 $ (43) (14.8) Encore Boston Harbor (1) : Total room revenues (dollars in thousands) $ 10,955 $ 1,605 $ 9,350 — Occupancy 75.8 % — % 75.8 ADR $ 292 $ — $ 292 — REVPAR $ 222 $ — $ 222 — (1) Encore Boston Harbor opened on June 23, 2019. The results of the eight days of its operations during the second quarter of 2019 are not considered material to our consolidated results of operations for the six months ended June 30, 2019. Accordingly, Encore Boston Harbor key operating measures for the six months ended June 30, 2019 have been omitted from the table. Room revenues decreased $220.0 million, primarily due to lower occupancy at Wynn Palace and Wynn Macau and the closure of our Las Vegas Operations resulting from the adverse effects of the COVID-19 pandemic. Room revenues from Encore Boston Harbor were $11.0 million. Food and beverage revenues decreased $217.8 million, primarily due to decreased covers at our restaurants at our Macau Operations and closure of our Las Vegas Operations resulting from the adverse effects of the COVID-19 pandemic. Food and beverage revenues from Encore Boston Harbor were $20.6 million. Entertainment, retail and other revenues decreased $85.3 million, primarily due to a decrease in visitation to our Macau Operations and closure of our Las Vegas Operations resulting from the adverse effects of the COVID-19 pandemic. Entertainment, retail and other revenues from Encore Boston Harbor were $7.7 million. 39 Table of Contents Operating expenses The table below presents operating expenses (in thousands): Six Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change Operating expenses: Casino $ 573,828 $ 1,475,058 $ (901,230) (61.1) Rooms 103,847 129,854 (26,007) (20.0) Food and beverage 237,799 330,841 (93,042) (28.1) Entertainment, retail and other 62,453 87,558 (25,105) (28.7) General and administrative 386,409 419,546 (33,137) (7.9) Provision for credit losses 48,960 9,003 39,957 443.8 Pre-opening 4,737 97,596 (92,859) (95.1) Depreciation and amortization 358,012 276,826 81,186 29.3 Property charges and other 33,796 9,704 24,092 248.3 Total operating expenses $ 1,809,841 $ 2,835,986 $ (1,026,145) (36.2) Total operating expenses decreased $1.03 billion compared to the six months ended June 30, 2019, primarily due to decreased expenses related to the impact of the COVID-19 pandemic on our resorts, partially offset by increased operating expenses following the opening of Encore Boston Harbor in June 2019. Casino expenses decreased $547.4 million, $407.7 million, and $19.2 million at Wynn Palace, Wynn Macau, and our Las Vegas Operations, respectively. These decreases were primarily due to reductions in gaming tax expense commensurate with the declines in casino revenues at each property resulting from the effects of the COVID-19 pandemic, and were partially offset by increased casino expenses of $73.1 million from Encore Boston Harbor. Room expenses decreased $25.2 million, $9.4 million. and $2.6 million at our Las Vegas Operations, Wynn Palace, and Wynn Macau, respectively. The decreases were primarily a result of lower operating costs related to the decline in occupancy at each property resulting from the effects of the COVID-19 pandemic, and were partially offset by increased room expenses of $11.3 million from Encore Boston Harbor. Food and beverage expenses decreased $87.6 million, $24.4 million, and $10.2 million at our Las Vegas Operations, Wynn Palace, and Wynn Macau, respectively. The decreases were primarily a result of lower operating costs related to the declines in food and beverage revenues at each property resulting from the effects of the COVID-19 pandemic, and were partially offset by increased food and beverage expenses of $29.1 million at Encore Boston Harbor. Entertainment, retail and other expenses decreased primarily due to decreases of $17.3 million, $9.8 million and $4.6 million at our Las Vegas Operations, Wynn Palace, and Wynn Macau, respectively. The decreases were primarily a result of lower operating costs related to the declines in entertainment, retail and other revenues at each property resulting from the effects of the COVID-19 pandemic, and were partially offset by increased entertainment, retail and other expenses of $6.6 million at Encore Boston Harbor. General and administrative expenses decreased primarily due to decreases of $18.9 million and $7.6 million at Wynn Palace and Wynn Macau, respectively. These decreases were primarily attributable to the effects of the COVID-19 pandemic. In addition, corporate and other general and administrative expenses decreased $74.0 million, primarily due to a credit of $27.7 million for the net proceeds of a derivative action settlement recognized during the three months ended June 30, 2020, and a fine of $35.0 million assessed by the Massachusetts Gaming Commission which was incurred during the three months ended March 31, 2019. These decreases were partially offset by an increase of $68.9 million of general and administrative expenses from Encore Boston Harbor due to the opening of the property in June 2019. The provision for credit losses increased $18.0 million, $13.8 million and $6.5 million at our Las Vegas Operations, Wynn Palace, and Wynn Macau, respectively. The increases were primarily due to the impact of historical collection patterns and expectations of current and future collection trends in light of the COVID-19 pandemic, as well as the specific review of customer accounts, on our estimated credit loss for the respective periods. 40 Table of Contents For the six months ended June 30, 2020, pre-opening expenses totaled $4.7 million, which primarily related to restaurant remodels at our Las Vegas Operations. For the six months ended June 30, 2019, pre-opening expenses totaled $97.6 million, which primarily related to the development of Encore Boston Harbor. Depreciation and amortization increased primarily due to additional depreciation expense of $73.8 million associated with the opening of Encore Boston Harbor and an increase of $6.8 million at our Las Vegas Operations associated with the opening of the meeting and convention expansion in February 2020. Our property charges and other expenses for the six months ended June 30, 2020 consisted primarily of asset disposals, abandonments and retirements of $23.3 million and $3.9 million at Wynn Palace and Encore Boston Harbor, respectively. Interest expense, net of capitalized interest The following table summarizes information related to interest expense (dollars in thousands): Six Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change Interest expense Interest cost, including amortization of debt issuance costs and original issue discount and premium $ 263,297 $ 233,174 $ 30,123 12.9 Capitalized interest (1,252) (46,845) (45,593) (97.3) $ 262,045 $ 186,329 $ 75,716 40.6 Weighted average total debt balance $ 11,496,999 $ 9,209,480 Weighted average interest rate 4.57 % 5.05 % Interest costs increased due to an increase in the weighted average debt balance, partially offset by a decrease in the weighted average interest rate. Capitalized interest decreased due to the completion of Encore Boston Harbor construction activities on June 23, 2019. Other non-operating income and expenses We incurred a foreign currency remeasurement gain of $12.6 million and $5.4 million for the six months ended June 30, 2020 and 2019, respectively. The impact of the exchange rate fluctuation of the Macau pataca, in relation to the U.S. dollar, on the remeasurements of U.S. dollar denominated debt and other obligations from our Macau-related entities drove the variability between periods. We recorded a loss of $19.0 million and $4.8 million for the six months ended June 30, 2020 and 2019, respectively, from change in derivatives fair value. Income taxes We recorded an income tax expense of $156.7 million and an income tax benefit of $0.3 million for the six months ended June 30, 2020 and 2019, respectively. The 2020 income tax expense primarily related to the increase in the valuation allowances for U.S foreign tax credits and U.S. loss carryforwards. The 2019 income tax benefit primarily related to the decrease in the valuation allowance for U.S foreign tax credits. Net income (loss) attributable to noncontrolling interests Net loss attributable to noncontrolling interests was $145.5 million for the six months ended June 30, 2020, compared to net income of $102.5 million for the same period of 2019. These amounts are primarily related to the noncontrolling interests' share of net income (loss) from WML. 41 Table of Contents Adjusted Property EBITDA We use Adjusted Property EBITDA to manage the operating results of our segments. Adjusted Property EBITDA is net income (loss) before interest, income taxes, depreciation and amortization, pre-opening expenses, property charges and other, management and license fees, corporate expenses and other (including intercompany golf course and water rights leases), stock-based compensation, change in derivatives fair value, loss on extinguishment of debt, and other non-operating income and expenses. Adjusted Property EBITDA 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 EBITDA 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. We also present Adjusted Property EBITDA 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 EBITDA 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 EBITDA 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 EBITDA should not be considered as an alternative to operating income as an indicator of our 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 EBITDA does not include depreciation or interest expense and therefore does not reflect current or future capital expenditures or the cost of capital. We have significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, income taxes and other non-recurring charges, which are not reflected in Adjusted Property EBITDA. Also, our calculation of Adjusted Property EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited. The following table summarizes Adjusted Property EBITDA (in thousands) for Wynn Palace, Wynn Macau, Las Vegas Operations, and Encore Boston Harbor as reviewed by management and summarized in Item 1—"Notes to Condensed Consolidated Financial Statements," Note 16, "Segment Information." That footnote also presents a reconciliation of Adjusted Property EBITDA to net income (loss) attributable to Wynn Resorts, Limited. Three Months Ended June 30, Six Months Ended June 30, 2020 2019 Increase/ (Decrease) Percent Change 2020 2019 Increase/ (Decrease) Percent Change Wynn Palace $ (110,908) $ 167,165 $ (278,073) (166.3) $ (100,732) $ 389,751 $ (490,483) (125.8) Wynn Macau (82,646) 175,873 (258,519) (147.0) (63,438) 339,762 (403,200) (118.7) Las Vegas Operations (75,564) 137,399 (212,963) (155.0) (97,641) 245,701 (343,342) (139.7) Encore Boston Harbor (1) (53,779) 146 (53,925) NM (66,415) 146 (66,561) NM (1) Encore Boston Harbor opened on June 23, 2019. NM - Not meaningful. Adjusted Property EBITDA at Wynn Palace decreased $278.1 million and $490.5 million for the three and six months ended June 30, 2020, respectively, primarily du e to a decline in operating revenues precipitated by the adverse effects of the COVID-19 pandemic during the three and six months ended June 30, 2020, which include the closure of our casino operations in Macau for a 15-day period and their subsequent reopening on a reduced basis. Adjusted Property EBITDA at Wynn Macau decreased $258.5 million and $403.2 million for the three and six months ended June 30, 2020, respectively, primarily du e to a decline in operating revenues precipitated by the adverse effects of the COVID-19 pandemic during the three and six months ended June 30, 2020, which include the closure of our casino operations in Macau for a 15-day period and their subsequent reopening on a reduced basis. Adjusted Property EBITDA decreased $213.0 million and $343.3 million at our Las Vegas Operations, primarily due to the adverse effects of the COVID-19 pandemic during the three and six months ended June 30, 2020, including the closure of our Las Vegas Operation s on March 17, 2020 for a 79-day period and their subsequent reopening on a reduced basis. Adjusted Property EBITDA from Encore Boston Harbor for the three and six months ended June 30, 2020 was $(53.8) million and $(66.4) million, respectively. Encore Boston Harbor closed to the public on March 15, 2020, and remained closed through the second quarter. Refer to the discussions above regarding the specific details of our results of operations. 42 Table of Contents Liquidity and Capital Resources Our cash flows were as follows (in thousands): Six Months Ended June 30, Cash Flows - Summary 2020 2019 Net cash (used in) provided by operating activities $ (607,987) $ 509,444 Net cash used in investing activities: Capital expenditures, net of construction payables and retention (191,682) (636,002) Purchase of intangible and other assets — (1,000) Proceeds from sale of assets and other 3,733 441 Net cash used in investing activities (187,949) (636,561) Net cash provided by (used in) financing activities: Proceeds from issuance of long-term debt 2,894,134 324,754 Repayments of long-term debt (527,535) (603,857) Repurchase of common stock (8,437) (35,632) Finance lease payment (74) — Proceeds from exercise of stock options 70 12,545 Dividends paid (108,074) (270,490) Distribution to noncontrolling interest (998) (2,727) Payments for financing costs (13,196) (10,488) Net cash provided by (used) in financing activities 2,235,890 (585,895) Effect of exchange rate on cash, cash equivalents and restricted cash 4,341 56 Increase (decrease) in cash, cash equivalents and restricted cash $ 1,444,295 $ (712,956) Operating Activities Our operating cash flows primarily consist of operating income (excluding depreciation and amortization and other non-cash charges), interest paid and earned, and changes in working capital accounts such as receivables, inventories, prepaid expenses, and payables. Our table games play is a mix of cash play and credit play, while our slot machine play is conducted primarily on a cash basis. A significant portion of our table games revenue is attributable to the play of a limited number of premium international customers who gamble on credit. The ability to collect these gaming receivables may impact our operating cash flow for the period. Our rooms, food and beverage, and entertainment, retail and other revenue is conducted on a cash and credit basis. Accordingly, operating cash flows will be impacted by changes in operating income and accounts receivable, net. During the six months ended June 30, 2020, the decrease in net cash provided by operations was primarily due to the adverse effects of the COVID-19 pandemic on the results of our operations. During the six months ended June 30, 2019, the increase in net cash provided by operations was primarily driven by an increase in net income. Investing Activities Our investing activities primarily consist of project capital expenditures, such as the construction of Encore Boston Harbor, which opened in June 2019, and the construction of the meeting and convention expansion at Wynn Las Vegas, which opened in February 2020, as well as maintenance capital expenditures associated with maintaining and continually refining our world-class integrated resort properties. In light of the unprecedented COVID-19 pandemic and our focus on safeguarding the Company's operations and the well-being of our employees, we expect to temporarily postpone major project capital expenditures for the remainder of fiscal year 2020, including the Wynn Tower room remodel at Wynn Las Vegas. We will be continuously monitoring the situation and conditions in the markets in which we operate, and will resume such project capital expenditures when conditions have stabilized. 43 Table of Contents During the six months ended June 30, 2020, we incurred capital expenditures of $48.1 million at Encore Boston Harbor primarily for the payment of construction retention and other payables related to its construction, $57.5 million at our Las Vegas Operations for restaurant remodels and maintenance capital expenditures, $23.1 million for the construction of the additional meeting and convention space at Wynn Las Vegas, and $27.5 million and $32.5 million at Wynn Palace and Wynn Macau, respectively, primarily related to maintenance capital expenditures. During the six months ended June 30, 2019, we incurred capital expenditures of $335.9 million related to the construction of Encore Boston Harbor and $106.8 million related to the construction of the additional meeting and convention space at Wynn Las Vegas and the reconfiguration of the Wynn Las Vegas golf course. Financing Activities During the six months ended June 30, 2020, we issued $750.0 million aggregate principal amount of WML 5 1/2% Senior Notes due 2026, issued $600.0 million aggregate principal amount of WRF 7 3/4% Senior Notes due 2025, borrowed $376.0 million, net of amounts repaid, under the Wynn Macau Revolver, borrowed $816.0 million under the WRF Revolver, prepaid $150.2 million of outstanding principal owed under the Wynn Macau Term Loan, and made quarterly amortization payments under the WRF Term Loan totaling $25.0 million. In addition, we used cash of $108.1 million for the payment of dividends. During the six months ended June 30, 2019, we repaid $523.7 million, net of amounts borrowed, on the Wynn Macau Senior Revolving Credit Facility, borrowed an additional $250.0 million term loan under the Wynn Resorts Term Loan, and used cash of $270.5 million for the payment of dividends. Capital Resources The COVID-19 pandemic has caused, and is continuing to cause, significant disruption in the financial markets both globally and in the United States, and has impacted and will continue to impact, materially, our business, financial condition and results of operations. While we believe our strong liquidity position will enable us to fund our current obligations for the foreseeable future, COVID-19 has resulted in significant disruption, which has had and will continue to have a negative impact on our operating income and could have a negative impact on our ability to access capital in the future. We continue to monitor the rapidly evolving situation and guidance from international and domestic authorities. The following table summarizes our unrestricted cash and cash equivalents and available revolver borrowing capacity under the Company as of June 30, 2020 (in thousands): Total Cash and Cash Equivalents Revolver Borrowing Capacity Wynn Resorts (Macau) S.A. and subsidiaries $ 734,640 $ 24,066 Wynn Macau, Limited and subsidiaries (1) 1,698,726 — Wynn Resorts Finance, LLC (2) 403,378 15,950 Wynn Resorts, Limited and other 960,996 — Total cash and cash equivalents $ 3,797,740 $ 40,016 (1) Excluding Wynn Resorts (Macau) S.A. and subsidiaries. (2) Excluding Wynn Macau, Limited and subsidiaries. Wynn Resorts (Macau) S.A. and subsidiaries. Wynn Resorts (Macau) S.A. ("Wynn Macau SA") generates cash from our Macau Operations and utilizes its revolver to fund short term working capital requirements as needed. We expect to use this cash to service our existing Wynn Macau Credit Facilities, make distributions to WML, and fund working capital and capital expenditure requirements at our Macau Operations. The Wynn Macau Credit Facilities contain customary negative and financial covenants, including, but not limited to, leverage ratio and interest coverage ratio tests (as defined in the Wynn Macau Credit Facilities) that could restrict its ability to make distributions to WML and incur additional indebtedness. Wynn Macau SA is required to maintain a leverage ratio of not greater than 4.00 to 1 and an interest coverage ratio of not less than 2.00 to 1. Wynn Macau SA complied with these ratios for the three months ended June 30, 2020. Wynn Macau, Limited and subsidiaries. Wynn Macau, Limited ("WML") primarily generates cash through distributions from Wynn Macau SA. We expect to use WML's cash to service our existing WML Notes, pay dividends to shareholders of WML (of which we own approximately 72%), and fund working capital requirements at WML. 44 Table of Contents The board of directors of WML concluded not to recommend the payment of a dividend with respect to the year ended December 31, 2019, in light of the unprecedented COVID-19 pandemic and our focus on safeguarding the Company's Macau Operations and the well-being of our employees. The WML board of directors will be continuously monitoring the situation and market conditions in Macau and Greater China and may consider a special dividend in the future when such conditions have stabilized. On June 19, 2020, WML issued $750.0 million aggregate principal amount of 5 1/2% Senior Notes due 2026 (the "2026 WML Notes") pursuant to an indenture (the "2026 Indenture"). The 2026 WML Notes were issued at pa r. WML plans to use the net proceeds from the offering for general corporate purposes until our business recovers from the effects of the COVID-19 Pandemic, and then to facilitate the repayment of a portion of the amounts outstanding under the Wynn Macau Credit Facilities. If our portion of our cash and cash equivalents were repatriated to the U.S. on June 30, 2020, it would be subject to minimal U.S. taxes in the year of repatriation. Wynn Resorts Finance, LLC and subsidiaries. Wynn Resorts Finance, LLC ("WRF" or "Wynn Resorts Finance") generates cash from distributions from its subsidiaries, which include our Macau Operations, Wynn Las Vegas, and Encore Boston Harbor, and contributions from Wynn Resorts, as required. In addition, WRF may utilize its available revolving borrowing capacity as needed. We expect to use this cash to service our WRF Credit Facilities, 2025 WRF Notes (as defined below), 2029 WRF Notes, and WLV Notes, and to fund working capital and capital expenditure requirements as needed. In April 2020, WRF and its subsidiary, Wynn Resorts Capital Corp. (collectively with WRF, the "WRF Issuers"), each an indirect wholly-owned subsidiary of the Company, issued $600 million aggregate principal amount of 7 3/4% Senior Notes due 2025 (the "2025 WRF Notes") pursuant to an indenture (the "2025 Indenture") among the WRF Issuers, the guarantors party thereto and U.S. Bank National Association, as trustee (the "Trustee"), in a private offering. The 2025 WRF Notes were issued at par. WRF plans to use the net proceeds from the offering for general corporate purposes and to pay related fees and expenses. In April 2020, WRF and certain of its subsidiaries entered into an amendment (the "WRF Credit Agreement Amendment") to its existing credit agreement (the "WRF Credit Agreement"). The WRF Credit Agreement Amendment provides for a financial covenant relief period through April 1, 2021, during which the existing consolidated first lien net leverage ratio financial covenant is replaced by a requirement for WRF to maintain minimum liquidity of at least $300.0 million at all times. Following the financial covenant relief period, WRF is subject to a financial covenant increase period beginning on the first day after the expiration of the financial covenant relief period and ending on the first day of the fourth fiscal quarter after the expiration of the financial covenant relief period, during which WRF must maintain a consolidated first lien net leverage ratio no greater than 4.50 to 1 during the first quarter of the financial covenant increase period, no greater than 4.25 to 1 for the second fiscal quarter, no greater than 4.00 to 1 for the third fiscal quarter, and no greater than 3.75 to 1 for the fourth fiscal quarter of the financial covenant increase period and for each subsequent fiscal quarter thereafter. The WRF Credit Agreement Amendment also adds certain restrictions on restricted payments during the financial covenant relief period and the financial covenant increase period. WRF is a holding company and, as a result, its ability to pay dividends to Wynn Resorts is dependent on WRF receiving distributions from its subsidiaries, which include WML, Wynn Las Vegas, LLC, and Wynn MA, LLC (the owner and operator of Encore Boston Harbor). The WRF Credit Agreement contains customary negative and financial covenants, including, but not limited to, covenants that restrict WRF's ability to pay dividends or distributions and incur additional indebtedness. As previously disclosed, we are in the planning phase of a room remodel of the Wynn Tower at Wynn Las Vegas. We have concluded to temporarily postpone the remodel until conditions have stabilized (as discussed above within Investing Activities ). Accordingly, at this time we do not expect to incur significant capital expenditures associated with the Wynn Tower room remodel during the remainder of fiscal year 2020. Wynn Resorts, Limited and other subsidiaries. Wynn Resorts, Limited is a holding company and, as a result, our ability to pay dividends is dependent on our ability to obtain funds and our subsidiaries' ability to provide funds to us. Wynn Resorts, Limited and other primarily generates cash from royalty and management agreements with our resorts, dividends and distributions from our subsidiaries, and the operations of the Retail Joint Venture of which we own 50.1%. We expect to use this cash to service our Retail Term Loan and for general corporate purposes. 45 Table of Contents On May 5, 2020, certain subsidiaries of the Retail Joint Venture entered into an amendment to the existing retail term loan agreement to temporarily suspend the requirement to maintain certain financial ratios to avoid triggering excess cash sweep provisions from the first quarter of 2020 through the fourth quarter of 2021. On May 6, 2020, the Company announced that it has suspended its quarterly dividend program due to the financial impact of the COVID-19 pandemic. Other Factors Affecting Liquidity We may refinance all or a portion of our indebtedness on or before maturity. We cannot assure you that we will be able to refinance any of the indebtedness on acceptable terms or at all. Legal proceedings in which we are involved also may impact our liquidity. No assurance can be provided as to the outcome of such proceedings. In addition, litigation inherently involves significant costs. For information regarding legal proceedings, see Item 1—"Notes to Condensed Consolidated Financial Statements," Note 14, "Commitments and Contingencies." Our Board of Directors has authorized an equity repurchase program of up to $1.0 billion. Under the equity repurchase program, we may repurchase the Company's outstanding shares from time to time through open market purchases, in privately negotiated transactions, and under plans complying with Rules 10b5-1 and 10b-18 under the Exchange Act. As of June 30, 2020, we had $800.1 million in repurchase authority remaining under the program. We have in the past repurchased, and in the future, we may periodically consider repurchasing our outstanding notes for cash. The amount of any notes to be repurchased, as well as the timing of any repurchases, will be based on business, market and other conditions and factors, including price, contractual requirements or consents, and capital availability. New business developments or other unforeseen events may occur, resulting in the need to raise additional funds. We continue to explore opportunities to develop additional gaming or related businesses in domestic and international markets. There can be no assurances regarding the business prospects with respect to any other opportunity. Any new development may require us to obtain additional financing. We may decide to conduct any such development through Wynn Resorts, Limited or through subsidiaries separate from the Las Vegas, Boston or Macau-related entities. Off-Balance Sheet Arrangements We have not entered into any transactions with special purpose entities nor do we engage in any derivatives except for an interest rate collar associated with our Retail Term Loan. We do not have any retained or contingent interest in assets transferred to an unconsolidated entity. As of June 30, 2020, we had outstanding letters of credit totaling $18.1 million. Critical Accounting Policies and Estimates A description of our critical accounting policies is included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2019. There have been no significant changes to these policies for the six months ended June 30, 2020. Recently Adopted Accounting Standards and Accounting Standards Issued But Not Yet Adopted See related disclosure in Item 1—"Notes to Condensed Consolidated Financial Statements," Note 2, "Basis of Presentation and Significant Accounting Policies." Forward-Looking Statements We make forward-looking statements in this Annual Report on Form 10-K based upon the beliefs and assumptions of our management and on information currently available to us. Forward-looking statements include, but are not limited to, information about our business strategy, development activities, competition and possible or assumed future results of operations, throughout this report and are often preceded by, followed by or include the words "may," "will," "should," "would," "could," "believe," "expect," "anticipate," "estimate," "intend," "plan," "continue" or the negative of these terms or similar expressions. 46 Table of Contents Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those we express in these forward-looking statements, including the risks and uncertainties in Item 1A—"Risk Factors" and other factors we describe from time to time in our periodic filings with the SEC, such as: • the duration and severity of the COVID-19 pandemic, the adverse effects of the COVID-19 pandemic, including government-mandated property closures, travel restrictions or social distancing or quarantine measures, the macroeconomic conditions during and after the COVID-19 pandemic, including potential higher unemployment rates, declines in income levels and loss of personal wealth resulting from the COVID-19 pandemic and its impact on consumer behavior related to discretionary spending and traveling; • extensive regulation of our business and the cost of compliance or failure to comply with applicable laws and regulations; • pending or future claims and legal proceedings, regulatory or enforcement actions or probity investigations; • our ability to maintain our gaming licenses and concessions; • our dependence on key employees; • general global political and economic conditions, in the U.S. and China (including COVID-19 and the Chinese government's ongoing anti-corruption campaign), which may impact levels of travel, leisure, and consumer spending; • restrictions or conditions on visitation (caused by COVID-19 or otherwise) by citizens of mainland China to Macau; • the impact on the travel and leisure industry from factors such as an outbreak of an infectious disease, such as COVID-19, public incidents of violence, riots, demonstrations, extreme weather patterns or natural disasters, military conflicts, civil unrest, and any future security alerts and/or terrorist attacks; • doing business in foreign locations such as Macau; • our ability to maintain our customer relationships and collect and enforce gaming receivables; • our relationships with Macau gaming promoters; • our dependence on a limited number of resorts and locations for all of our cash flow and our subsidiaries' ability to pay us dividends and distributions; • competition in the casino/hotel and resort industries and actions taken by our competitors, including new development and construction activities of competitors; • factors affecting the development and success of new gaming and resort properties (including limited labor resources, government labor and gaming policies and transportation infrastructure in Macau; and cost increases, environmental regulation, and our ability to secure necessary permits and approvals); • construction risks (including disputes with and defaults by contractors and subcontractors; construction, equipment or staffing problems; shortages of materials or skilled labor; environment, health and safety issues; and unanticipated cost increases); • legalization and growth of gaming in other jurisdictions; • any violations by us of the anti-money laundering laws or Foreign Corrupt Practices Act; • adverse incidents or adverse publicity concerning our resorts or our corporate responsibilities; • changes in gaming laws or regulations; • changes in federal, foreign, or state tax laws or the administration of such laws; • continued compliance with all provisions in our debt agreements; • conditions precedent to funding under our credit facilities; • leverage and debt service (including sensitivity to fluctuations in interest rates); • cybersecurity risk, including cyber and physical security breaches, system failure, computer viruses, and negligent or intentional misuse by customers, company employees, or employees of third-party vendors; • our ability to protect our intellectual property rights; and • our current and future insurance coverage levels. Further information on potential factors that could affect our financial condition, results of operations and business are included in this report and our other filings with the SEC. You should not place undue reliance on any forward-looking statements, which are based only on information available to us at the time this statement is made. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.