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. Wynn Interactive In October 2020, Wynn Interactive, Ltd. ("Wynn Interactive") was formed through the merger of Wynn Resorts' digital gaming businesses and Wynn's strategic partner, BetBull Limited ("BetBull"). The merger was effected through a series of transactions which resulted in the Company contributing to BetBull its interests in WSI US, LLC and Wynn Social Gaming, LLC, which operate Wynn's existing U.S. online sports betting and gaming business and social casino business, respectively. Following the merger, Wynn Resorts holds an approximately 71% interest in Wynn Interactive, which Wynn Resorts will consolidate. 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 and requirements for negative COVID-19 tests before entering Macau, 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 suspension in late January 2020 of the Chinese government's visa and group tour schemes that allow mainland Chinese residents to travel to Macau, quarantine and testing measures in Macau and elsewhere, travel and entry requirements, restrictions, and bans in Macau, Hong Kong, Taiwan, and certain cities and regions in 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 90.5% and 85.9% in the three and nine months ended September 30, 2020, compared with 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, and quarantine requirements for those traveling 28 Table of Contents between Hong Kong and Macau have been announced to remain effective until at least December 31, 2020, at which time they may be lifted. 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 have eased as certain regions gradually recover 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. On September 23, 2020, mainland China authorities fully resumed the Individual Visit Scheme exit visa program, 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. Stringent health declarations, testing and other procedures remain in place, and all visitors seeking entry to Macau need to test negative for COVID-19 before entering Macau. 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. Beginning October 19, 2020, Encore at Wynn Las Vegas adjusted its operating schedule to five days/four nights each week due to currently reduced customer demand levels. 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 10, 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 were limited to Thursday through Sunday through the third quarter of 2020. On November 2, 2020, the Governor of Massachusetts issued a directive limiting the operating hours of certain businesses, including restaurants and casinos, effective November 6, 2020. Encore Boston Harbor has modified its hours of operation as a result of this directive. We are currently unable to determine when these measures will be lifted. The disruptions arising from the COVID-19 outbreak have had, during the three and nine months ended September 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 29 Table of Contents 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. • 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 18% to 22%. Results of Operations Summary of third quarter 2020 results The following table summarizes our financial results for the periods presented (in thousands, except per share data): 30 Table of Contents Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change 2020 2019 Increase/ (Decrease) Percent Change Operating revenues $ 370,452 $ 1,647,762 $ (1,277,310) (77.5) $ 1,409,866 $ 4,957,640 $ (3,547,774) (71.6) Net income (loss) attributable to Wynn Resorts, Limited (758,142) (3,496) (754,646) NM (1,797,743) 195,927 (1,993,670) NM Diluted net income (loss) per share (7.10) (0.03) (7.07) NM (16.85) 1.83 (18.68) NM Adjusted Property EBITDA (1) (65,860) 396,946 (462,806) (116.6) (394,086) 1,372,306 (1,766,392) (128.7) (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. NM - Not meaningful. The decrease in operating revenues for the three months ended September 30, 2020 was driven by decreases of $582.5 million, $422.9 million, $212.8 million, and $59.1 million from Wynn Palace, Wynn Macau, our Las Vegas Operations, and Encore Boston Harbor, respectively. These declines were precipitated by the continued adverse effects of the COVID-19 pandemic, including travel restrictions and capacity limitations at our Macau Operations, our Las Vegas Operations and Encore Boston Harbor. Encore Boston Harbor closed to the public on March 15, 2020, and reopened on July 10, 2020 on a reduced basis. The increase in net loss attributable to Wynn Resorts, Limited for the three months ended September 30, 2020 was primarily related to the adverse effects of the COVID-19 pandemic on the results of our operations. The decrease in Adjusted Property EBITDA for the three months ended September 30, 2020 was primarily driven by decreases of $239.8 million, $173.4 million, and $67.8 million from Wynn Palace, Wynn Macau, and our Las Vegas Operations, respectively. These decreases were offset by an increase of $18.2 million in Adjusted Property EBITDA from Encore Boston Harbor. Financial results for the three months ended September 30, 2020 compared to the three months ended September 30, 2019. Operating revenues The following table presents our operating revenues (in thousands): Three Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change Operating revenues Macau Operations: Wynn Palace $ 15,701 $ 598,171 $ (582,470) (97.4) Wynn Macau 51,368 474,281 (422,913) (89.2) Total Macau Operations 67,069 1,072,452 (1,005,383) (93.7) Las Vegas Operations 186,697 399,506 (212,809) (53.3) Encore Boston Harbor 116,686 175,804 (59,118) (33.6) $ 370,452 $ 1,647,762 $ (1,277,310) (77.5) The following table presents our casino and non-casino operating revenues (in thousands): 31 Table of Contents Three Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change Operating revenues Casino revenues $ 201,872 $ 1,108,364 $ (906,492) (81.8) Non-casino revenues: Rooms 61,144 205,876 (144,732) (70.3) Food and beverage 76,586 228,508 (151,922) (66.5) Entertainment, retail and other 30,850 105,014 (74,164) (70.6) Total non-casino revenues 168,580 539,398 (370,818) (68.7) $ 370,452 $ 1,647,762 $ (1,277,310) (77.5) Casino revenues for the three months ended September 30, 2020 were 54.5% of operating revenues, compared to 67.3% for the same period of 2019. Non-casino revenues for the three months ended September 30, 2020 were 45.5% of operating revenues, compared to 32.7% 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. In addition, Encore Boston Harbor closed to the public on March 15, 2020, and reopened on July 10, 2020 on a reduced basis. The table below sets forth our casino revenues and associated key operating measures (dollars in thousands, except for win per unit per day): 32 Table of Contents Three Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change Macau Operations: Wynn Palace: Total casino revenues $ 12,301 $ 497,657 $ (485,356) (97.5) VIP: Average number of table games 102 108 (6) (5.6) VIP turnover $ 311,676 $ 10,517,685 $ (10,206,009) (97.0) VIP table games win $ 3,244 $ 335,277 $ (332,033) (99.0) VIP win as a % of turnover 1.04 % 3.19 % (2.15) Table games win per unit per day $ 347 $ 33,595 $ (33,248) (99.0) Mass market: Average number of table games 223 216 7 3.2 Table drop $ 86,347 $ 1,298,827 $ (1,212,480) (93.4) Table games win $ 19,015 $ 324,177 $ (305,162) (94.1) Table games win % 22.0 % 25.0 % (3.0) Table games win per unit per day $ 929 $ 16,346 $ (15,417) (94.3) Average number of slot machines 569 1,087 (518) (47.7) Slot machine handle $ 78,580 $ 973,676 $ (895,096) (91.9) Slot machine win $ 3,995 $ 47,289 $ (43,294) (91.6) Slot machine win per unit per day $ 76 $ 473 $ (397) (83.9) Wynn Macau: Total casino revenues $ 27,154 $ 408,820 $ (381,666) (93.4) VIP: Average number of table games 91 104 (13) (12.5) VIP turnover $ 498,519 $ 8,024,990 $ (7,526,471) (93.8) VIP table games win $ 19,679 $ 221,097 $ (201,418) (91.1) VIP win as a % of turnover 3.95 % 2.76 % 1.19 Table games win per unit per day $ 2,351 $ 23,036 $ (20,685) (89.8) Mass market: Average number of table games 240 205 35 17.1 Table drop $ 133,006 $ 1,319,405 $ (1,186,399) (89.9) Table games win $ 24,898 $ 272,511 $ (247,613) (90.9) Table games win % 18.7 % 20.7 % (2.0) Table games win per unit per day $ 1,128 $ 14,440 $ (13,312) (92.2) Average number of slot machines 472 786 (314) (39.9) Slot machine handle $ 87,988 $ 999,985 $ (911,997) (91.2) Slot machine win $ 3,072 $ 46,981 $ (43,909) (93.5) Slot machine win per unit per day $ 71 $ 649 $ (578) (89.1) Poker rake $ — $ 4,703 $ (4,703) (100.0) 33 Table of Contents Three Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change Las Vegas Operations: Total casino revenues $ 65,694 $ 87,002 $ (21,308) (24.5) Average number of table games 223 237 (14) (5.9) Table drop $ 324,939 $ 430,837 $ (105,898) (24.6) Table games win $ 65,611 $ 85,738 $ (20,127) (23.5) Table games win % 20.2 % 19.9 % 0.3 Table games win per unit per day $ 3,191 $ 3,927 $ (736) (18.7) Average number of slot machines 1,738 1,783 (45) (2.5) Slot machine handle $ 739,291 $ 883,931 $ (144,640) (16.4) Slot machine win $ 48,267 $ 58,176 $ (9,909) (17.0) Slot machine win per unit per day $ 302 $ 355 $ (53) (14.9) Poker rake $ 10 $ 2,977 $ (2,967) (99.7) Encore Boston Harbor: Total casino revenues $ 96,723 $ 114,885 $ (18,162) (15.8) Average number of table games 186 145 41 28.3 Table drop 217,797 $ 379,626 $ (161,829) (42.6) Table games win $ 47,528 $ 74,882 $ (27,354) (36.5) Table games win % 21.8 % 19.7 % 2.1 Table games win per unit per day $ 3,079 $ 5,631 $ (2,552) (45.3) Average number of slot machines 1,877 3,101 (1,224) (39.5) Slot machine handle 813,435 $ 892,706 $ (79,271) (8.9) Slot machine win $ 63,458 $ 62,381 $ 1,077 1.7 Slot machine win per unit per day $ 407 $ 219 $ 188 85.8 Poker rake $ — $ 5,984 $ (5,984) (100.0) 34 Table of Contents Non-casino revenues The table below sets forth our room revenues and associated key operating measures: Three Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change Macau Operations: Wynn Palace : Total room revenues (dollars in thousands) $ 4,506 $ 44,884 $ (40,378) (90.0) Occupancy 11.6 % 97.2 % (85.6) ADR $ 225 $ 273 $ (48) (17.6) REVPAR $ 26 $ 265 $ (239) (90.2) Wynn Macau: Total room revenues (dollars in thousands) $ 4,938 $ 26,740 $ (21,802) (81.5) Occupancy 16.6 % 99.4 % (82.8) ADR $ 291 $ 283 $ 8 2.8 REVPAR $ 48 $ 281 $ (233) (82.9) Las Vegas Operations: Total room revenues (dollars in thousands) $ 44,961 $ 116,072 $ (71,111) (61.3) Occupancy 39.2 % 87.9 % (48.7) ADR $ 269 $ 306 $ (37) (12.1) REVPAR $ 105 $ 269 $ (164) (61.0) Encore Boston Harbor (1): Total room revenues (dollars in thousands) $ 6,739 $ 18,180 $ (11,441) (62.9) Occupancy 72.7 % 69.6 % 3.1 ADR $ 294 $ 465 $ (171) (36.8) REVPAR $ 214 $ 324 $ (110) (34.0) (1) Since reopening on July 10, 2020, hotel reservations at Encore Boston Harbor have been limited to Thursday through Sunday. Accordingly, Encore Boston Harbor's room key operating measures have been computed based on 47 days of operation for the three months ended September 30, 2020. Room revenues decreased $144.7 million, primarily due to lower occupancy at Wynn Palace, Wynn Macau, and our Las Vegas Operations resulting from the adverse effects of the COVID-19 pandemic. In addition, Encore Boston Harbor closed to the public on March 15, 2020 and reopened July 10, 2020, with hotel reservations limited to Thursday through Sunday during the remainder of the third quarter of 2020. Food and beverage revenues decreased $151.9 million, primarily due to decreased covers at our restaurants and the reduction of nightlife offerings at our Las Vegas Operations as a result of the adverse effects of the COVID-19 pandemic. In addition, Encore Boston Harbor closed to the public on March 15, 2020 and reopened July 10, 2020, with certain food and beverage outlets remaining closed. Entertainment, retail and other revenues decreased $74.2 million, primarily due to a decrease in visitation to our Macau Operations, our Las Vegas Operations, and Encore Boston Harbor resulting from the adverse effects of the COVID-19 pandemic. The closure of the La Reve show at our Las Vegas Operations and rent concessions provided to tenants at our Macau Operations also contributed to the decrease. 35 Table of Contents Operating expenses The table below presents operating expenses (in thousands): Three Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change Operating expenses: Casino $ 160,861 $ 722,692 $ (561,831) (77.7) Rooms 35,940 75,188 (39,248) (52.2) Food and beverage 76,536 196,661 (120,125) (61.1) Entertainment, retail and other 13,370 42,078 (28,708) (68.2) General and administrative 160,896 246,442 (85,546) (34.7) Provision for credit losses 11,588 4,036 7,552 187.1 Pre-opening 877 1,616 (739) (45.7) Depreciation and amortization 183,486 172,998 10,488 6.1 Property charges and other 9,905 8,216 1,689 20.6 Total operating expenses $ 653,459 $ 1,469,927 $ (816,468) (55.5) Total operating expenses decreased $816.5 million compared to the third quarter of 2019, primarily due to decreased expenses related to the impact of the COVID-19 pandemic on our resorts. Casino expenses decreased $301.0 million, $221.2 million, $17.2 million, and $22.3 million at Wynn Palace, Wynn Macau, our Las Vegas Operations, and Encore Boston Harbor, 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. Room expenses decreased $21.6 million, $7.8 million, $3.4 million, and $6.4 million at our Las Vegas Operations, Wynn Palace, Wynn Macau, and Encore Boston Harbor, respectively. The decreases were primarily a result of lower operating costs related to the declines in occupancy at our Las Vegas Operations and our Macau Operations resulting from the effects of the COVID-19 pandemic, as well as the limitation of hotel reservations to Thursday through Sunday at Encore Boston Harbor since reopening July 10, 2020, through the remainder of the third quarter of 2020. Food and beverage expenses decreased $71.9 million, $17.4 million, $9.1 million, and $21.8 million at our Las Vegas Operations, Wynn Palace, Wynn Macau, and Encore Boston Harbor, 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, as well as lower nightlife entertainment costs at our Las Vegas Operations. Entertainment, retail and other expenses decreased $22.5 million, $2.7 million, $1.7 million, and $1.8 million at our Las Vegas Operations, Wynn Palace, Wynn Macau, and Encore Boston Harbor, 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. General and administrative expenses decreased primarily due to decreases of $21.1 million, $13.3 million, $11.0 million, $25.8 million, and $14.4 million at Wynn Palace, Wynn Macau, our Las Vegas Operations, Encore Boston Harbor, and corporate and other, respectively. These decreases were primarily attributable to decreased payroll, operating costs, and general and administrative expenses as a result of the COVID-19 pandemic. Provision for credit losses increased primarily due to an increase of $8.1 million at Wynn Palace. The increase was 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. Depreciation and amortization increased primarily due to an increase of $7.1 million at our Las Vegas Operations associated with the opening of the meeting and convention expansion in February 2020. 36 Table of Contents Our property charges and other expenses for the quarter ended September 30, 2020 consisted primarily of asset abandonments of $6.2 million and $1.1 million at Encore Boston Harbor and our Las Vegas Operations, respectively. Interest expense, net of capitalized interest The following table summarizes information related to interest expense (dollars in thousands): Three Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change Interest expense Interest cost, including amortization of debt issuance costs and original issue discount and premium $ 145,142 $ 117,960 $ 27,182 23.0 Capitalized interest — (3,308) (3,308) (100.0) $ 145,142 $ 114,652 $ 30,490 26.6 Weighted average total debt balance $ 13,110,457 $ 9,261,889 Weighted average interest rate 4.42 % 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 the meeting and convention expansion in February 2020. Other non-operating income and expenses We incurred a foreign currency remeasurement gain of $0.4 million and a loss of $8.7 million for the three months ended September 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 gain of $4.7 million and a loss of $2.1 million for the three months ended September 30, 2020 and 2019, respectively, from change in derivatives fair value. We recorded a $3.1 million loss on extinguishment of debt for the three months ended September 30, 2020 related to the partial prepayment of the Wynn Macau Term Loan. We recorded a $12.2 million loss on extinguishment of debt for the three months ended September 30, 2019 in connection with refinancing our Wynn Resorts Finance (formerly Wynn America) credit facility and Wynn Resorts term loan. Income taxes We recorded an income tax expense of $407.4 million and $19.7 million for the three months ended September 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, U.S. loss carryforwards and other U.S. deferred tax assets. The 2019 income tax expense primarily related to the increase in the valuation allowances for U.S foreign tax credits. Net income (loss) attributable to noncontrolling interests Net loss attributable to noncontrolling interests was $73.4 million for the three months ended September 30, 2020, compared to net income of $30.4 million for the same period of 2019. These amounts are primarily related to the noncontrolling interests' share of net income (loss) from WML. 37 Table of Contents Financial results for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019. Operating revenues The following table presents our operating revenues (in thousands): Nine Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change Operating revenues Macau Operations: Wynn Palace $ 283,932 $ 1,953,709 $ (1,669,777) (85.5) Wynn Macau 292,745 1,544,646 (1,251,901) (81.0) Total Macau Operations 576,677 3,498,355 (2,921,678) (83.5) Las Vegas Operations 575,407 1,264,681 (689,274) (54.5) Encore Boston Harbor (1) 257,782 194,604 63,178 32.5 $ 1,409,866 $ 4,957,640 $ (3,547,774) (71.6) (1) Encore Boston commenced operations on June 23, 2019. The following table presents casino and non-casino operating revenues (in thousands): Nine Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change Operating revenues Casino revenues $ 782,074 $ 3,435,968 $ (2,653,894) (77.2) Non-casino revenues: Rooms 231,240 595,953 (364,713) (61.2) Food and beverage 250,007 619,749 (369,742) (59.7) Entertainment, retail and other 146,545 305,970 (159,425) (52.1) Total non-casino revenues 627,792 1,521,672 (893,880) (58.7) $ 1,409,866 $ 4,957,640 $ (3,547,774) (71.6) Casino revenues for the nine months ended September 30, 2020 were 55.5% of operating revenues, compared to 69.3% for the same period of 2019. Non-casino revenues for the nine months ended September 30, 2020 were 44.5% of operating revenues, compared to 30.7% for the same period of 2019. 38 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 closures of our Las Vegas Operations from March 17, 2020 until June 4, 2020, and Encore Boston Harbor from March 15, 2020 until July 10, 2020. The table below sets forth our casino revenues and associated key operating measures (dollars in thousands, except for win per unit per day): Nine Months Ended September 30, 2020 2019 Increase/(Decrease) Percent Change Macau Operations: Wynn Palace: Total casino revenues $ 208,449 $ 1,649,377 $ (1,440,928) (87.4) VIP: Average number of table games 97 111 (14) (12.6) VIP turnover $ 6,823,955 $ 36,533,594 $ (29,709,639) (81.3) VIP table games win $ 113,007 $ 1,232,870 $ (1,119,863) (90.8) VIP win as a % of turnover 1.66 % 3.37 % (1.71) Table games win per unit per day $ 4,458 $ 40,868 $ (36,410) (89.1) Mass market: Average number of table games 209 213 (4) (1.9) Table drop $ 583,599 $ 3,869,904 $ (3,286,305) (84.9) Table games win $ 156,897 $ 936,497 $ (779,600) (83.2) Table games win % 26.9 % 24.2 % 2.7 Table games win per unit per day $ 2,889 $ 16,071 $ (13,182) (82.0) Average number of slot machines 586 1,092 (506) (46.3) Slot machine handle $ 542,708 $ 2,886,566 $ (2,343,858) (81.2) Slot machine win $ 24,796 $ 142,257 $ (117,461) (82.6) Slot machine win per unit per day $ 163 $ 477 $ (314) (65.8) Wynn Macau: Total casino revenues $ 213,758 $ 1,340,266 $ (1,126,508) (84.1) VIP: Average number of table games 88 109 (21) (19.3) VIP turnover $ 4,069,809 $ 27,494,650 $ (23,424,841) (85.2) VIP table games win $ 130,143 $ 822,204 $ (692,061) (84.2) VIP win as a % of turnover 3.20 % 2.99 % 0.21 Table games win per unit per day $ 5,692 $ 27,634 $ (21,942) (79.4) Mass market: Average number of table games 219 205 14 6.8 Table drop $ 752,058 $ 4,018,533 $ (3,266,475) (81.3) Table games win $ 146,231 $ 816,180 $ (669,949) (82.1) Table games win % 19.4 % 20.3 % (0.9) Table games win per unit per day $ 2,564 $ 14,551 $ (11,987) (82.4) Average number of slot machines 509 813 (304) (37.4) Slot machine handle $ 516,537 $ 2,720,137 $ (2,203,600) (81.0) Slot machine win $ 18,993 $ 127,690 $ (108,697) (85.1) Slot machine win per unit per day $ 144 $ 575 $ (431) (75.0) Poker rake $ 2,083 $ 15,130 $ (13,047) (86.2) 39 Table of Contents Nine Months Ended September 30, 2020 2019 Increase/(Decrease) Percent Change Las Vegas Operations: Total casino revenues $ 161,354 $ 318,439 $ (157,085) (49.3) Average number of table games 228 238 (10) (4.2) Table drop $ 830,745 $ 1,275,676 $ (444,931) (34.9) Table games win $ 166,196 $ 323,503 $ (157,307) (48.6) Table games win % 20.0 % 25.4 % (5.4) Table games win per unit per day $ 3,711 $ 4,982 $ (1,271) (25.5) Average number of slot machines 1,751 1,793 (42) (2.3) Slot machine handle $ 1,650,517 $ 2,484,880 $ (834,363) (33.6) Slot machine win $ 112,464 $ 167,848 $ (55,384) (33.0) Slot machine win per unit per day $ 328 $ 343 $ (15) (4.4) Poker rake $ 2,185 $ 9,557 $ (7,372) (77.1) Encore Boston Harbor (1) : Total casino revenues $ 198,513 $ 127,886 $ 70,627 55.2 Average number of table games 174 144 30 20.8 Table drop $ 493,428 $ 416,202 $ 77,226 18.6 Table games win $ 104,814 $ 81,482 $ 23,332 28.6 Table games win % 21.2 % 19.6 % 1.6 Table games win per unit per day $ 3,839 $ 5,639 $ (1,800) (31.9) Average number of slot machines 2,330 3,105 (775) (25.0) Slot machine handle $ 1,581,174 $ 990,634 $ 590,540 59.6 Slot machine win $ 122,906 $ 70,880 $ 52,026 73.4 Slot machine win per unit per day $ 336 $ 228 $ 108 47.4 Poker rake $ 5,105 $ 6,664 $ (1,559) (23.4) (1) Encore Boston Harbor commenced operations on June 23, 2019. 40 Table of Contents Non-casino revenues The table below sets forth our room revenues and associated key operating measures: Nine Months Ended September 30, 2020 2019 Increase/(Decrease) Percent Change Macau Operations: Wynn Palace: Total room revenues (dollars in thousands) $ 26,647 $ 131,382 $ (104,735) (79.7) Occupancy 19.3 % 97.3 % (78.0) ADR $ 283 $ 270 $ 13 4.8 REVPAR $ 54 $ 262 $ (208) (79.4) Wynn Macau: Total room revenues (dollars in thousands) $ 23,480 $ 82,071 $ (58,591) (71.4) Occupancy 24.4 % 99.2 % (74.8) ADR $ 316 $ 285 $ 31 10.9 REVPAR $ 77 $ 282 $ (205) (72.7) Las Vegas Operations: Total room revenues (dollars in thousands) $ 163,419 $ 362,715 $ (199,296) (54.9) Occupancy 55.8 % 86.9 % (31.1) ADR $ 323 $ 325 $ (2) (0.6) REVPAR $ 180 $ 283 $ (103) (36.4) Encore Boston Harbor (1) (2) : Total room revenues (dollars in thousands) $ 17,694 $ 19,785 $ (2,091) (10.6) Occupancy 74.6 % 69.3 % 5.3 ADR $ 293 $ 493 $ (200) (40.6) REVPAR $ 218 $ 341 $ (123) (36.1) (1) Encore Boston Harbor commenced operations on June 23, 2019. (2) Encore Boston Harbor closed on March 15, 2020 and reopened July 10, 2020. Since reopening, hotel reservations at Encore Boston Harbor have been limited to Thursday through Sunday. Accordingly, Encore Boston Harbor's room key operating measures have been computed based on 121 days of operation for the nine months ended September 30, 2020. Room revenues decreased $364.7 million, primarily due to lower occupancy and the closure of our Las Vegas Operations resulting from the adverse effects of the COVID-19 pandemic. Food and beverage revenues decreased $369.7 million, primarily due to decreased covers at our restaurants and the reduction of nightlife offerings at our Las Vegas Operations as a result of the adverse effects of the COVID-19 pandemic. Entertainment, retail and other revenues decreased $159.4 million, primarily due to a decrease in visitation to our Macau Operations and temporary closures of our Las Vegas Operations and Encore Boston Harbor resulting from the adverse effects of the COVID-19 pandemic. The closure of the La Reve show at our Las Vegas Operations and rent concessions provided to tenants at our Macau Operations also contributed to the decrease. 41 Table of Contents Operating expenses The table below presents operating expenses (in thousands): Nine Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change Operating expenses: Casino $ 734,689 $ 2,197,750 $ (1,463,061) (66.6) Rooms 139,787 205,042 (65,255) (31.8) Food and beverage 314,335 527,502 (213,167) (40.4) Entertainment, retail and other 75,823 129,636 (53,813) (41.5) General and administrative 547,305 665,988 (118,683) (17.8) Provision for credit losses 60,548 13,039 47,509 364.4 Pre-opening 5,614 99,212 (93,598) (94.3) Depreciation and amortization 541,498 449,824 91,674 20.4 Property charges and other 43,701 17,920 25,781 143.9 Total operating expenses $ 2,463,300 $ 4,305,913 $ (1,842,613) (42.8) Total operating expenses decreased $1.84 billion compared to the nine months ended September 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 $848.5 million, $628.9 million, and $36.4 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 $50.7 million from Encore Boston Harbor. Room expenses decreased $46.9 million, $17.3 million. and $6.0 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 occupancy at our Las Vegas Operations and our Macau Operations resulting from the effects of the COVID-19 pandemic as well as the closure of our Las Vegas Operations, and were partially offset by increased room expenses of $4.9 million from Encore Boston Harbor. Food and beverage expenses decreased $159.4 million, $41.8 million, and $19.3 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 as well as lower nightlife entertainment costs at our Las Vegas Operations, and were partially offset by increased food and beverage expenses of $7.3 million at Encore Boston Harbor. Entertainment, retail and other expenses decreased primarily due to decreases of $39.7 million, $12.6 million and $6.3 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 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 $4.8 million at Encore Boston Harbor. General and administrative expenses decreased primarily due to decreases of $40.0 million, $20.9 million, and $12.5 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. In addition, corporate and other general and administrative expenses decreased $88.4 million, primarily due to a credit of $30.2 million for the net proceeds of a derivative action settlement recognized during the nine months ended September 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 $43.0 million of general and administrative expenses from Encore Boston Harbor due to the opening of the property in June 2019. 42 Table of Contents The provision for credit losses increased $17.4 million, $21.9 million, and $6.8 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 nine months ended September 30, 2020, pre-opening expenses totaled $5.6 million, which primarily related to restaurant remodels at our Las Vegas Operations. For the nine months ended September 30, 2019, pre-opening expenses totaled $99.2 million, which primarily related to the development of Encore Boston Harbor. Depreciation and amortization increased primarily due to an increase in depreciation expense of $69.9 million associated with the opening of Encore Boston Harbor and an increase of $13.9 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 nine months ended September 30, 2020 consisted primarily of asset disposals and abandonments of $23.4 million and $9.7 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): Nine Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change Interest expense Interest cost, including amortization of debt issuance costs and original issue discount and premium $ 408,439 $ 351,135 $ 57,304 16.3 Capitalized interest (1,252) (50,154) (48,902) (97.5) $ 407,187 $ 300,981 $ 106,206 35.3 Weighted average total debt balance $ 12,050,631 $ 9,277,142 Weighted average interest rate 4.51 % 5.00 % 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 primarily 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 $13.0 million and a loss of $3.3 million for the nine months ended September 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 $14.3 million and $6.9 million for the nine months ended September 30, 2020 and 2019, respectively, from change in derivatives fair value. We recorded a $4.6 million loss on extinguishment of debt for the nine months ended September 30, 2020 primarily related to the partial prepayment of the Wynn Macau Term Loan. We recorded a $12.2 million loss on extinguishment of debt for the nine months ended September 30, 2019 in connection with refinancing our Wynn Resorts Finance (formerly Wynn America) credit facility and Wynn Resorts term loan. Income taxes We recorded an income tax expense of $564.1 million and $19.4 million for the nine months ended September 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, U.S. loss carryforwards and other U.S. deferred tax assets. The 2019 income tax expense primarily related to the increase in the valuation allowance for U.S foreign tax credits. 43 Table of Contents Net income (loss) attributable to noncontrolling interests Net loss attributable to noncontrolling interests was $218.9 million for the nine months ended September 30, 2020, compared to net income of $132.9 million for the same period of 2019. These amounts are primarily related to the noncontrolling interests' share of net income (loss) from WML. 44 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 September 30, Nine Months Ended September 30, 2020 2019 Increase/ (Decrease) Percent Change 2020 2019 Increase/ (Decrease) Percent Change Wynn Palace $ (77,647) $ 162,167 $ (239,814) (147.9) $ (178,379) $ 551,918 $ (730,297) (132.3) Wynn Macau (34,457) 138,989 (173,446) (124.8) (97,895) 478,751 (576,646) (120.4) Las Vegas Operations 20,258 88,046 (67,788) (77.0) (77,383) 333,747 (411,130) (123.2) Encore Boston Harbor (1) 25,986 7,744 18,242 235.6 (40,429) 7,890 (48,319) NM (1) Encore Boston Harbor commenced operations on June 23, 2019. NM - Not meaningful. Adjusted Property EBITDA at Wynn Palace decreased $239.8 million and $730.3 million for the three and nine months ended September 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 nine months ended September 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 $173.4 million and $576.6 million for the three and nine months ended September 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 nine months ended September 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 $67.8 million and $411.1 million at our Las Vegas Operations, primarily due to the adverse effects of the COVID-19 pandemic during the three and nine months ended September 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 increased $18.2 million at Encore Boston Harbor primarily due the decrease in operating expenses during the three months ended September 30, 2020. Adjusted Property EBITDA from Encore Boston Harbor for the nine months ended September 30, 2020 was $(40.4) million. Encore Boston Harbor closed to the public on March 15, 2020 and reopened on July 10, 2020 on a reduced basis. Refer to the discussions above regarding the specific details of our results of operations. 45 Table of Contents Liquidity and Capital Resources Our cash flows were as follows (in thousands): Nine Months Ended September 30, Cash Flows - Summary 2020 2019 Net cash (used in) provided by operating activities $ (781,079) $ 779,885 Net cash used in investing activities: Capital expenditures, net of construction payables and retention (261,093) (878,335) Purchase of intangible and other assets — (6,000) Proceeds from sale of assets and other 3,733 592 Net cash used in investing activities (257,360) (883,743) Net cash provided by (used in) financing activities: Proceeds from issuance of long-term debt 3,919,377 2,549,072 Repayments of long-term debt (1,540,609) (2,443,367) Repurchase of common stock (9,537) (65,705) Finance lease payment (2,194) (36) Proceeds from exercise of stock options 70 14,696 Dividends paid (108,282) (460,139) Distribution to noncontrolling interest (1,996) (3,725) Payments for financing costs (20,350) (22,359) Net cash provided by (used) in financing activities 2,236,479 (431,563) Effect of exchange rate on cash, cash equivalents and restricted cash 3,412 (1,610) Increase (decrease) in cash, cash equivalents and restricted cash $ 1,201,452 $ (537,031) 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 nine months ended September 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 nine months ended September 30, 2019, the increase in net cash provided by operations was primarily driven by changes in our working capital accounts and an increase in deferred tax assets related to the settlement of the Redemption Note during the nine months ended September 30, 2018. 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 46 Table of Contents continuously monitoring the situation and conditions in the markets in which we operate, and will resume such project capital expenditures when conditions have stabilized. During the nine months ended September 30, 2020, we incurred capital expenditures of $56.2 million at Encore Boston Harbor primarily for the payment of construction retention and other payables related to its construction, $81.5 million at our Las Vegas Operations for restaurant remodels and maintenance capital expenditures, $41.3 million for the construction of the additional meeting and convention space at Wynn Las Vegas, and $38.5 million and $42.1 million at Wynn Palace and Wynn Macau, respectively, primarily related to maintenance capital expenditures. During the nine months ended September 30, 2019, we incurred capital expenditures of $421.4 million related to the construction of Encore Boston Harbor, $104.1 million at Wynn Macau primarily related to the room remodel and Lakeside Casino renovation, $47.2 million and $71.9 million at Wynn Palace and our Las Vegas Operations, respectively, primarily related to maintenance capital expenditures, and $166.4 million primarily 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 nine months ended September 30, 2020, we issued $1.0 billion aggregate principal amount of WML 5 1/2% Senior Notes due 2026, issued $600.0 million aggregate principal amount of WML 5 5/8% Senior Notes due 2028, issued $600.0 million aggregate principal amount of WRF 7 3/4% Senior Notes due 2025, borrowed $400.0 million, net of amounts repaid, under the Wynn Macau Revolver, borrowed $816.0 million under the WRF Revolver, paid $1.0 billion of outstanding principal owed under the Wynn Macau Term Loan, and made quarterly amortization payments under the WRF Term Loan totaling $37.5 million. In addition, we used cash of $108.3 million for the payment of dividends. During the nine months ended September 30, 2019, we borrowed an additional $250.0 million term loan under the Wynn Resorts Credit Agreement and repaid $991.3 million of outstanding principal under the Wynn America Credit Facilities and $746.3 million of outstanding principal under the Wynn Resorts Term Loan using proceeds from the borrowing of $1.03 billion under the WRF Credit Facilities and issuance of $750.0 million of WRF 2029 notes. We also repaid $174.7 million, net of amounts borrowed, on the Wynn Macau Senior Revolving Credit Facility. In addition, we used cash of $460.1 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 September 30, 2020 (in thousands): Total Cash and Cash Equivalents Revolver Borrowing Capacity Wynn Resorts (Macau) S.A. and subsidiaries $ 633,388 $ — Wynn Macau, Limited and subsidiaries (1) 1,647,826 — Wynn Resorts Finance, LLC (2) 391,807 15,950 Wynn Resorts, Limited and other 881,874 — Total cash and cash equivalents $ 3,554,895 $ 15,950 (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. 47 Table of Contents 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 September 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. 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. On August 26, 2020, WML issued $250.0 million aggregate principal amount of 5 1/2% Senior Notes due 2026 and $600.0 million aggregate principal amount of 5 5/8% Senior Notes due 2028. WML intends to use the net proceeds from the Existing 2026 WML Notes for general corporate purposes until WML's 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. WML used the net proceeds from the Additional 2026 and 2028 WML Notes to facilitate the prepayment of term loans outstanding under the Wynn Macau Credit Facilities in September 2020. If our portion of our cash and cash equivalents were repatriated to the U.S. on September 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. 48 Table of Contents 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. 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 September 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 September 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 nine months ended September 30, 2020. 49 Table of Contents 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. 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; • the tightened control of certain cross-border fund transfers from mainland China; • restrictions or conditions on visitation (caused by COVID-19 or otherwise) to Macau and the United States; • 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; • 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); 50 Table of Contents • 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.