WYNN RESORTS LTD 10-Q

Item 1. Financial Statements WYNN RESORTS, LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) June 30, 2021 December 31, 2020 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 2,802,716 $ 3,482,032 Restricted cash 2,577 — Accounts receivable, net of allowance for credit losses of $ 98,043 and $ 100,329 245,959 200,158 Inventories 66,100 66,285 Prepaid expenses and other 97,737 64,672 Total current assets 3,215,089 3,813,147 Property and equipment, net 8,925,386 9,196,644 Restricted cash 3,792 4,352 Goodwill and intangible assets, net 291,510 278,195 Operating lease assets 386,501 398,594 Other assets 200,387 178,615 Total assets $ 13,022,665 $ 13,869,547 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts and construction payables $ 168,143 $ 148,478 Customer deposits 501,652 646,856 Gaming taxes payable 60,617 66,346 Accrued compensation and benefits 163,169 126,846 Accrued interest 132,220 136,421 Current portion of long-term debt 1,308,353 596,408 Other accrued liabilities 204,148 159,533 Total current liabilities 2,538,302 1,880,888 Long-term debt 10,612,560 12,469,362 Long-term operating lease liabilities 119,471 123,124 Other long-term liabilities 106,171 133,490 Total liabilities 13,376,504 14,606,864 Commitments and contingencies (Note 15) Stockholders' equity (deficit): Preferred stock, par value $ 0.01 ; 40,000,000 shares authorized; zero shares issued and outstanding — — Common stock, par value $ 0.01 ; 400,000,000 shares authorized; 131,318,273 and 123,482,836 shares issued; 115,683,983 and 107,888,336 shares outstanding, respectively 1,313 1,235 Treasury stock, at cost; 15,634,290 and 15,594,500 shares, respectively ( 1,427,094 ) ( 1,422,531 ) Additional paid-in capital 3,466,908 2,598,115 Accumulated other comprehensive income 6,293 3,604 Accumulated deficit ( 1,944,668 ) ( 1,532,420 ) Total Wynn Resorts, Limited stockholders' equity (deficit) 102,752 ( 351,997 ) Noncontrolling interests ( 456,591 ) ( 385,320 ) Total stockholders' deficit ( 353,839 ) ( 737,317 ) Total liabilities and stockholders' deficit $ 13,022,665 $ 13,869,547 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Operating revenues: Casino $ 602,746 $ 9,413 $ 1,118,964 $ 580,202 Rooms 137,765 17,415 213,955 170,096 Food and beverage 149,142 24,007 217,651 173,421 Entertainment, retail and other 100,460 34,863 176,225 115,695 Total operating revenues 990,113 85,698 1,726,795 1,039,414 Operating expenses: Casino 381,615 131,138 733,581 573,828 Rooms 50,552 30,367 84,087 103,847 Food and beverage 117,106 61,889 191,054 237,799 Entertainment, retail and other 80,922 16,873 154,381 62,453 General and administrative 197,545 152,081 377,319 386,409 Provision for credit losses 441 28,347 7,808 48,960 Pre-opening 2,495 2,186 4,122 4,737 Depreciation and amortization 183,307 179,266 368,428 358,012 Property charges and other 5,651 6,567 11,268 33,796 Total operating expenses 1,019,634 608,714 1,932,048 1,809,841 Operating loss ( 29,521 ) ( 523,016 ) ( 205,253 ) ( 770,427 ) Other income (expense): Interest income 720 3,983 1,624 11,936 Interest expense, net of amounts capitalized ( 150,424 ) ( 133,218 ) ( 303,276 ) ( 262,045 ) Change in derivatives fair value 972 ( 3,294 ) 5,381 ( 18,954 ) Loss on extinguishment of debt — ( 619 ) ( 1,322 ) ( 1,462 ) Other 5,553 2,233 ( 5,540 ) 12,568 Other income (expense), net ( 143,179 ) ( 130,915 ) ( 303,133 ) ( 257,957 ) Loss before income taxes ( 172,700 ) ( 653,931 ) ( 508,386 ) ( 1,028,384 ) Provision for income taxes ( 697 ) ( 80,938 ) ( 1,190 ) ( 156,738 ) Net loss ( 173,397 ) ( 734,869 ) ( 509,576 ) ( 1,185,122 ) Less: net loss attributable to noncontrolling interests 42,028 97,305 97,229 145,521 Net loss attributable to Wynn Resorts, Limited $ ( 131,369 ) $ ( 637,564 ) $ ( 412,347 ) $ ( 1,039,601 ) Basic and diluted net loss per common share: Net loss attributable to Wynn Resorts, Limited: Basic $ ( 1.15 ) $ ( 5.97 ) $ ( 3.66 ) $ ( 9.74 ) Diluted $ ( 1.15 ) $ ( 5.97 ) $ ( 3.66 ) $ ( 9.74 ) Weighted average common shares outstanding: Basic 114,545 106,713 112,792 106,688 Diluted 114,545 106,713 112,792 106,688 Dividends declared per common share $ — $ — $ — $ 1.00 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net loss $ ( 173,397 ) $ ( 734,869 ) $ ( 509,576 ) $ ( 1,185,122 ) Other comprehensive (loss) income: Foreign currency translation adjustments, before and after tax ( 290 ) 53 3,742 1,068 Total comprehensive loss ( 173,687 ) ( 734,816 ) ( 505,834 ) ( 1,184,054 ) Less: comprehensive loss attributable to noncontrolling interests 42,110 97,291 96,176 145,224 Comprehensive loss attributable to Wynn Resorts, Limited $ ( 131,577 ) $ ( 637,525 ) $ ( 409,658 ) $ ( 1,038,830 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (in thousands, except share data) (unaudited) For the Three Months Ended June 30, 2021 Common stock Shares outstanding Par value Treasury stock Additional paid-in capital Accumulated other comprehensive income Accumulated deficit Total Wynn Resorts, Ltd. stockholders' equity Noncontrolling interests Total stockholders' deficit Balances, April 1, 2021 115,647,328 $ 1,313 $ ( 1,426,887 ) $ 3,466,073 $ 6,501 $ ( 1,813,317 ) $ 233,683 $ ( 436,622 ) $ ( 202,939 ) Net loss — — — — — ( 131,369 ) ( 131,369 ) ( 42,028 ) ( 173,397 ) Currency translation adjustment — — — — ( 208 ) — ( 208 ) ( 82 ) ( 290 ) Issuance of restricted stock 44,686 — — — — — — — — Cancellation of restricted stock ( 6,435 ) — — — — 18 18 6 24 Shares repurchased by the Company and held as treasury shares ( 1,596 ) — ( 207 ) — — — ( 207 ) — ( 207 ) Distribution to noncontrolling interest — — — — — — — ( 6,479 ) ( 6,479 ) Subsidiary equity issuance — — — ( 20,211 ) — — ( 20,211 ) 25,371 5,160 Stock-based compensation — — — 21,046 — — 21,046 3,243 24,289 Balances, June 30, 2021 115,683,983 $ 1,313 $ ( 1,427,094 ) $ 3,466,908 $ 6,293 $ ( 1,944,668 ) $ 102,752 $ ( 456,591 ) $ ( 353,839 ) For the Three Months Ended June 30, 2020 Common stock Shares outstanding Par value Treasury stock Additional paid-in capital Accumulated other comprehensive loss Retained earnings (accumulated deficit) Total Wynn Resorts, Ltd. stockholders' equity Noncontrolling interests Total stockholders' equity Balances, April 1, 2020 107,884,163 $ 1,234 $ ( 1,416,525 ) $ 2,526,062 $ ( 947 ) $ 132,266 $ 1,242,090 $ ( 249,610 ) $ 992,480 Net loss — — — — — ( 637,564 ) ( 637,564 ) ( 97,305 ) ( 734,869 ) Currency translation adjustment — — — — 39 — 39 14 53 Issuance of restricted stock 40,270 — — 617 — — 617 189 806 Cancellation of restricted stock ( 17,477 ) — — — — — — — — Shares repurchased by the Company and held as treasury shares ( 37,091 ) — ( 2,910 ) — — — ( 2,910 ) 141 ( 2,769 ) Cash dividends declared — — — — — 208 208 16 224 Stock-based compensation — — — 17,039 — — 17,039 1,234 18,273 Balances, June 30, 2020 107,869,865 $ 1,234 $ ( 1,419,435 ) $ 2,543,718 $ ( 908 ) $ ( 505,090 ) $ 619,519 $ ( 345,321 ) $ 274,198 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (continued) (in thousands, except share data) (unaudited) For the Six Months Ended June 30, 2021 Common stock Shares outstanding Par value Treasury stock Additional paid-in capital Accumulated other comprehensive income Accumulated deficit Total Wynn Resorts, Ltd. stockholders' equity (deficit) Noncontrolling interests Total stockholders' deficit Balances, January 1, 2021 107,888,336 $ 1,235 $ ( 1,422,531 ) $ 2,598,115 $ 3,604 $ ( 1,532,420 ) $ ( 351,997 ) $ ( 385,320 ) $ ( 737,317 ) Net loss — — — — — ( 412,347 ) ( 412,347 ) ( 97,229 ) ( 509,576 ) Currency translation adjustment — — — — 2,689 — 2,689 1,053 3,742 Issuance of common stock, net of $ 17.7 million underwriter discounts, commissions and other expenses 7,475,000 75 — 841,821 — — 841,896 — 841,896 Issuance of restricted stock 379,971 3 — 5,899 — — 5,902 370 6,272 Cancellation of restricted stock ( 19,534 ) — — — — 99 99 15 114 Shares repurchased by the Company and held as treasury shares ( 39,790 ) — ( 4,563 ) — — — ( 4,563 ) — ( 4,563 ) Distribution to noncontrolling interest — — — — — — — ( 6,479 ) ( 6,479 ) Subsidiary equity issuance — — — ( 20,211 ) — — ( 20,211 ) 25,371 5,160 Stock-based compensation — — — 41,284 — — 41,284 5,628 46,912 Balances, June 30, 2021 115,683,983 $ 1,313 $ ( 1,427,094 ) $ 3,466,908 $ 6,293 $ ( 1,944,668 ) $ 102,752 $ ( 456,591 ) $ ( 353,839 ) For the Six Months Ended June 30, 2020 Common stock Shares outstanding Par value Treasury stock Additional paid-in capital Accumulated other comprehensive loss Retained earnings (accumulated deficit) Total Wynn Resorts, Ltd. stockholders' equity Noncontrolling interests Total stockholders' equity Balances, January 1, 2020 107,363,943 $ 1,228 $ ( 1,410,998 ) $ 2,512,676 $ ( 1,679 ) $ 641,818 $ 1,743,045 $ ( 201,573 ) $ 1,541,472 Net loss — — — — — ( 1,039,601 ) ( 1,039,601 ) ( 145,521 ) ( 1,185,122 ) Currency translation adjustment — — — — 771 — 771 297 1,068 Issuance of restricted stock 661,015 6 — 6,703 — — 6,709 818 7,527 Cancellation of restricted stock ( 73,047 ) — — — — — — — — Shares repurchased by the Company and held as treasury shares ( 82,046 ) — ( 8,437 ) — — — ( 8,437 ) 141 ( 8,296 ) Cash dividends declared — — — — — ( 107,307 ) ( 107,307 ) 30 ( 107,277 ) Distribution to noncontrolling interest — — — — — — — ( 998 ) ( 998 ) Stock-based compensation — — — 24,339 — — 24,339 1,485 25,824 Balances, June 30, 2020 107,869,865 $ 1,234 $ ( 1,419,435 ) $ 2,543,718 $ ( 908 ) $ ( 505,090 ) $ 619,519 $ ( 345,321 ) $ 274,198 The accompanying notes are an integral part of these condensed consolidated financial statements. 7 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Six Months Ended June 30, 2021 2020 Cash flows from operating activities: Net loss $ ( 509,576 ) $ ( 1,185,122 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 368,428 358,012 Deferred income taxes ( 767 ) 155,316 Stock-based compensation expense 49,453 30,448 Amortization of debt issuance costs 13,241 14,155 Loss on extinguishment of debt 1,322 1,462 Provision for credit losses 7,808 48,960 Change in derivatives fair value ( 5,381 ) 18,954 Property charges and other 16,808 21,228 Increase (decrease) in cash from changes in: Receivables, net ( 53,799 ) ( 39 ) Inventories, prepaid expenses and other ( 35,819 ) 15,579 Customer deposits ( 144,407 ) 111,967 Accounts payable and accrued expenses 65,882 ( 198,907 ) Net cash used in operating activities ( 226,807 ) ( 607,987 ) Cash flows from investing activities: Capital expenditures, net of construction payables and retention ( 110,045 ) ( 191,682 ) Purchase of intangible and other assets ( 15,741 ) — Proceeds from sale of assets and other 3,502 3,733 Net cash used in investing activities ( 122,284 ) ( 187,949 ) Cash flows from financing activities: Proceeds from issuance of long-term debt 50,058 2,894,134 Repayments of long-term debt ( 1,205,099 ) ( 527,535 ) Proceeds from issuance of Wynn Resorts, Limited common stock 841,896 — Repurchase of common stock ( 4,563 ) ( 8,437 ) Finance lease payments ( 7,784 ) ( 74 ) Proceeds from exercise of stock options — 70 Dividends paid ( 388 ) ( 108,074 ) Distribution to noncontrolling interest ( 6,479 ) ( 998 ) Proceeds from issuance of subsidiary common stock 4,662 — Payments for financing costs ( 2,152 ) ( 13,196 ) Net cash (used in) provided by financing activities ( 329,849 ) 2,235,890 Effect of exchange rate on cash, cash equivalents and restricted cash 1,641 4,341 Cash, cash equivalents and restricted cash: (Decrease) increase in cash, cash equivalents and restricted cash ( 677,299 ) 1,444,295 Balance, beginning of period 3,486,384 2,358,292 Balance, end of period $ 2,809,085 $ 3,802,587 Supplemental cash flow disclosures: Cash paid for interest, net of amounts capitalized $ 294,011 $ 238,044 Liability settled with shares of common stock $ 6,272 $ 6,720 Accounts and construction payables related to property and equipment $ 66,701 $ 127,674 Other liabilities related to intangible assets $ 13,796 $ 14,088 Finance lease liabilities arising from obtaining finance lease assets $ 7,423 $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 8 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1 - Organization Organization Wynn Resorts, Limited, a Nevada corporation (together with its subsidiaries, "Wynn Resorts" or the "Company"), is a designer, developer, and operator of integrated resorts featuring luxury hotel rooms, high-end retail space, an array of dining and entertainment options, meeting and convention facilities, and gaming. In the Macau Special Administrative Region of the People's Republic of China ("Macau"), the Company owns approximately 72 % of Wynn Macau, Limited ("WML"), which includes the operations of the Wynn Palace and Wynn Macau resorts. The Company refers to Wynn Palace and Wynn Macau as its Macau Operations. In Las Vegas, Nevada, the Company operates and, with the exception of certain retail space, owns 100 % of Wynn Las Vegas. Additionally, the Company is a 50.1 % owner and managing member of a joint venture that owns and leases certain retail space at Wynn Las Vegas (the "Retail Joint Venture"). The Company refers to Wynn Las Vegas, Encore, an expansion at Wynn Las Vegas, and the Retail Joint Venture as its Las Vegas Operations. On June 23, 2019, the Company opened Encore Boston Harbor, an integrated resort in Everett, Massachusetts, that is owned 100 % by the Company. In October 2020, Wynn Interactive Ltd. ("Wynn Interactive") was formed through the merger of the Company's U.S. online sports betting and gaming business, social casino business, and Wynn Resorts' strategic partner, BetBull Limited ("BetBull"). Wynn Resorts holds an approximately 74 % interest in, and consolidates, Wynn Interactive. The results of Wynn Interactive's operations are presented within Corporate and other in the accompanying condensed consolidated financial statements, except where otherwise noted. Recent Developments Related to COVID-19 Since the outbreak of COVID-19 in early 2020, steps have been taken by various countries, including those in which the Company operates, 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. As part of the immediate response to the initial outbreak of COVID-19, each of the Company's properties was subject to partial or full closure for varying lengths of time during 2020, and have all since reopened. Several vaccines have been granted authorization in numerous countries and are being rolled out to citizens based on availability and priority of need. There can be no assurance as to when a sufficient number of individuals will be vaccinated, permitting travel restrictions to be fully lifted. Macau Operations Visitation to Macau has fallen significantly since the outbreak of COVID-19, driven by the strong deterrent effect of the COVID-19 pandemic on travel and social activities, quarantine measures in Macau and elsewhere, travel and entry restrictions and conditions in Macau, the PRC, Hong Kong and Taiwan involving COVID-19 testing, among other things, and the suspension or reduced accessibility of transportation to and from Macau. Beginning in June 2020 certain restrictions and conditions have eased to allow for visitation to Macau as certain regions recover from the COVID-19 pandemic. Quarantine-free travel, subject to COVID-19 safeguards such as testing and the usual visa requirements, has been reintroduced between Macau and most areas and cities within the PRC, and in September 2020, PRC authorities fully resumed the IVS exit visa program, which permits individual PRC citizens from nearly 50 PRC cities to travel to Macau for tourism purposes. On August 3, 2021, in response to a risk of a community outbreak, the government of Macau has announced enhanced measures including tighter border control and strict mandatory COVID-19 testing requirements. Las Vegas Operations and Encore Boston Harbor The Company’s Las Vegas Operations and Encore Boston Harbor had each implemented certain COVID-19 specific protective measures, 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. On April 8, 2021, Encore at Wynn Las Vegas resumed full operations. On May 3, 2021, the Company's Las Vegas Operations were permitted by the Nevada Gaming Control Board to reopen all gaming areas to 100 % of capacity, with no continuing table game or slot machine spacing restrictions. On July 27, 2021, the Governor of Nevada issued an emergency directive, in accordance with new recommendations from the Centers for Disease Control, re-imposing mask protection requirements in all public indoor areas effective July 30, 2021. At Encore Boston Harbor, on January 25, 2021, limitations on operating hours that had been in place since November 2020 were lifted, and the property restored certain operations and reopened its hotel tower on a Thursday through Sunday schedule. On April 27, 2021, the Governor of Massachusetts announced a phased plan for further reopening and on May 28, 2021 signed an 9 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) executive order rescinding the COVID-19 related restrictions and limitations on businesses as of May 29, 2021. The property continues to operate its hotel tower Thursday through Sunday. Summary The COVID-19 pandemic has had and will continue to have an adverse effect on the Company's results of operations. Notwithstanding the easing of certain COVID-19 protective measures by authorities throughout the world, certain travel restrictions, quarantine measures, testing requirements, and capacity limitations remain in effect at our Macau Operations, and the Company is currently unable to determine when protective measures and the suspension of certain offerings in effect at our Macau Operations will be lifted. 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, management cannot reasonably estimate the impact to the Company's future results of operations, cash flows, or financial condition. As of June 30, 2021, the Company had total cash and cash equivalents, excluding restricted cash, of $ 2.80 billion, and had access to $ 834.2 million of available borrowing capacity from the WRF Revolving Facility and $ 293.2 million of available borrowing capacity from the Wynn Macau Revolving Facility. The Company has suspended its dividend program. Given the Company's liquidity position at June 30, 2021, the Company believes it is able to support continuing operations and respond to the current COVID-19 pandemic challenges. Macau Gaming Concession The term of the Company's concession agreement with the Macau government ends on June 26, 2022. If the term of this concession agreement is not extended or renewed or is not replaced by a new gaming concession, all of the Company's gaming operations and related equipment in Macau will be automatically transferred to the Macau government without compensation on that date and the Company will cease to generate gaming revenues from its Macau Operations. In addition, under the indentures governing the Company's $ 4.7 billion aggregate principal amount of WML Senior Notes, upon the occurrence of any event after which none of WML or any of its subsidiaries own or manage casino or gaming areas or operate casino games of fortune and chance in Macau in substantially the same manner as they are owning or managing casino or gaming areas or operating casino games as of the issue date of the respective senior notes, for a period of 10 consecutive days or more, and such event has a material adverse effect on the financial condition, business, properties or results of operations of WML and its subsidiaries, taken as a whole, holders of the WML Senior Notes can require the Company to repurchase all or any part of the WML Senior Notes at par, plus any accrued and unpaid interest (the "Special Put Option"). The Macau government has publicly commented that it is studying the process by which concessions and subconcessions may be renewed, extended or issued. The Company is monitoring developments with respect to the Macau government's concession renewal or extension process, and at this time believes that its concession will be renewed or extended beyond June 26, 2022. The failure to extend or renew the Company's concession or obtain a new concession and the resulting ability of the WML Senior Note holders to exercise the Special Put Option would have a material adverse effect on the Company's business, financial condition, results of operations, and cash flows. Business Combination Agreement On May 10, 2021, Wynn Interactive entered into a business combination agreement (the "Business Combination Agreement") with Austerlitz Acquisition Corporation I, a Cayman Islands exempted company ("Austerlitz I"), and Wave Merger Sub Limited, an exempted company limited by shares incorporated in Bermuda and a direct, wholly owned subsidiary of Austerlitz I ("Merger Sub"). The Business Combination Agreement provides for, among other things, the consummation of the following transactions: (i) Austerlitz I will transfer by way of continuation from the Cayman Islands to Bermuda and change its name to "Wynn Interactive, Limited"; and (ii) Merger Sub will merge with and into Wynn Interactive (the "Merger"), with Wynn Interactive being the surviving company of the Merger and direct, wholly owned subsidiary of Austerlitz I. Upon closing of the transaction, assuming no share redemptions by the public stockholders of Austerlitz I, the Company is expected to retain an approximately 58 % equity interest (and approximately 72 % voting interest) in Wynn Interactive. The proposed business combination is expected to close by the end of 2021, subject to approval by Austerlitz I's stockholders, gaming regulatory approval and other customary closing conditions. 10 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Note 2 - Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures herein are adequate to make the information presented not misleading. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to a fair presentation of the results for the interim periods presented. The results for the three and six months ended June 30, 2021 are not necessarily indicative of results to be expected for the full fiscal year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and entities the Company identifies as variable interest entities ("VIEs") of which the Company is determined to be the primary beneficiary. For information on the Company's VIEs, see Note 16, "Retail Joint Venture." All significant intercompany accounts and transactions have been eliminated. Certain amounts in the condensed consolidated financial statements for the first quarter of 2021 have been reclassified to be consistent with the current quarter presentation. These reclassifications had no effect on the previously reported net loss or operating loss. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the financial statements relate to and include, but are not limited to, inputs into the Company's estimated allowance for credit losses, estimates regarding the useful lives and recoverability of the cost of long-lived assets, fair value estimates of intangible assets and their estimated useful lives, and litigation and contingency estimates. Gaming Taxes The Company is subject to taxes based on gross gaming revenues in the jurisdictions in which it operates, subject to applicable jurisdictional adjustments. These gaming taxes are recorded as casino expenses in the accompanying Condensed Consolidated Statements of Operations. These taxes totaled $ 234.2 million and $ 12.5 million for the three months ended June 30, 2021 and 2020, respectively, and $ 449.2 million and $ 266.4 million for the six months ended June 30, 2021 and 2020, respectively. Recently Issued Accounting Standards In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04"). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of the London Interbank Offered Rate (referred to as "LIBOR"), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. ASU 2020-04 also provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. ASU 2020-04 can be adopted no later than December 1, 2022 with early adoption permitted. The Company is currently assessing the impact the adoption of the new guidance will have on its consolidated financial statements. 11 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Note 3 - Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash consisted of the following (in thousands): June 30, 2021 December 31, 2020 Cash and cash equivalents: Cash (1) $ 2,437,127 $ 2,501,452 Cash equivalents (2) 365,589 980,580 Total cash and cash equivalents 2,802,716 3,482,032 Restricted cash (3) 6,369 4,352 Total cash, cash equivalents and restricted cash $ 2,809,085 $ 3,486,384 (1) Cash consists of cash on hand and bank deposits. (2) Cash equivalents consist of bank time deposits and money market funds. (3) Restricted cash consists of cash subject to certain contractual restrictions, cash collateral associated with obligations and cash held in a trust in accordance with WML's share award plan. Note 4 - Receivables, net Accounts Receivable and Credit Risk Receivables, net consisted of the following (in thousands): June 30, 2021 December 31, 2020 Casino $ 243,489 $ 207,823 Hotel 15,039 7,075 Other 85,474 85,589 344,002 300,487 Less: allowance for credit losses ( 98,043 ) ( 100,329 ) $ 245,959 $ 200,158 As of June 30, 2021 and December 31, 2020, approximately 68.7 % and 77.3 %, respectively, of the Company's markers were due from customers residing outside the United States, primarily in Asia. Business or economic conditions or other significant events in the countries in which the Company's customers reside could affect the collectability of such receivables. The Company’s allowance for casino credit losses was 39.3 % and 47.2 % of gross casino receivables as of June 30, 2021 and December 31, 2020, respectively. Although the Company believes that its allowance is adequate, it is possible the estimated amounts of cash collections with respect to receivables could change. The Company’s allowance for credit losses from its hotel and other receivables is not material. The following table shows the movement in the Company's allowance for credit losses recognized for receivables that occurred during the period (in thousands): June 30, 2021 June 30, 2020 Balance at beginning of year $ 100,329 $ 39,317 Provision for credit losses 7,808 48,960 Write-offs ( 10,490 ) ( 144 ) Recoveries of receivables previously written off 462 60 Effect of exchange rate ( 66 ) 126 Balance at end of period $ 98,043 $ 88,319 12 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Note 5 - Property and Equipment, net Property and equipment, net consisted of the following (in thousands): June 30, 2021 December 31, 2020 Buildings and improvements $ 9,745,976 $ 9,758,846 Land and improvements 1,276,442 1,265,510 Furniture, fixtures and equipment 3,105,343 3,093,481 Airplanes 110,623 110,623 Construction in progress 181,264 136,390 14,419,648 14,364,850 Less: accumulated depreciation ( 5,494,262 ) ( 5,168,206 ) $ 8,925,386 $ 9,196,644 As of June 30, 2021 and December 31, 2020, construction in progress consisted primarily of costs capitalized for various capital enhancements at the Company's properties, including the Wynn Las Vegas room remodel. Depreciation expense for the three months ended June 30, 2021 and 2020 was $ 176.1 million and $ 172.8 million, respectively, and depreciation expense for the six months ended June 30, 2021 and 2020 was $ 353.9 million and $ 345.1 million, respectively. Note 6 - Goodwill The following table shows the movement in the Company's goodwill balance that occurred during the six-month period (in thousands): Balance as of January 1, 2021 $ 144,095 Foreign currency translation 1,084 Balance as of June 30, 2021 $ 145,179 13 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Note 7 - Long-Term Debt Long-term debt consisted of the following (in thousands): June 30, 2021 December 31, 2020 Macau Related: Wynn Macau Credit Facilities (1) : Wynn Macau Term Loan, due 2022 (2) $ 802,898 $ 1,268,106 Wynn Macau Revolver, due 2022 (3) 457,290 407,443 WML 4 7/8% Senior Notes, due 2024 600,000 600,000 WML 5 1/2% Senior Notes, due 2026 1,000,000 1,000,000 WML 5 1/2% Senior Notes, due 2027 750,000 750,000 WML 5 5/8% Senior Notes, due 2028 1,350,000 1,350,000 WML 5 1/8% Senior Notes, due 2029 1,000,000 1,000,000 U.S. and Corporate Related: WRF Credit Facilities (4) : WRF Term Loan, due 2024 912,500 937,500 WRF Revolver, due 2024 — 716,000 WLV 4 1/4% Senior Notes, due 2023 500,000 500,000 WLV 5 1/2% Senior Notes, due 2025 1,780,000 1,780,000 WLV 5 1/4% Senior Notes, due 2027 880,000 880,000 WRF 7 3/4% Senior Notes, due 2025 600,000 600,000 WRF 5 1/8% Senior Notes, due 2029 750,000 750,000 Retail Term Loan, due 2025 (5) 615,000 615,000 11,997,688 13,154,049 Less: Unamortized debt issuance costs and original issue discounts and premium, net ( 76,775 ) ( 88,279 ) 11,920,913 13,065,770 Less: Current portion of long-term debt ( 1,308,353 ) ( 596,408 ) Total long-term debt, net of current portion $ 10,612,560 $ 12,469,362 (1) The borrowings under the Wynn Macau Credit Facilities bear interest at LIBOR or HIBOR plus a margin of 1.50 % to 2.25 % per annum based on Wynn Resorts Macau S.A.’s leverage ratio. (2) Approximately $ 454.4 million and $ 348.5 million of the Wynn Macau Term Loan bears interest at a rate of LIBOR plus 2.25 % per year and HIBOR plus 2.25 % per year, respectively. As of June 30, 2021, the weighted average interest rate was approximately 2.35 %. In January 2021, the Company prepaid $ 412.5 million of the Wynn Macau Term Loan. (3) Approximately $ 260.2 million and $ 197.1 million of the Wynn Macau Revolver bears interest at a rate of LIBOR plus 2.25 % per year and HIBOR plus 2.25 % per year, respectively. As of June 30, 2021, the weighted average interest rate was approximately 2.34 %. As of June 30, 2021, the available borrowing capacity under the Wynn Macau Revolver was $ 293.2 million. (4) The WRF Credit Facilities bear interest at a rate of LIBOR plus 1.75 % per year. As of June 30, 2021, the weighted average interest rate was approximately 1.86 %. Additionally, as of June 30, 2021, the available borrowing capacity under the WRF Revolver was $ 834.2 million, net of $ 15.8 million in outstanding letters of credit. (5) The Retail Term Loan bears interest at a rate of LIBOR plus 1.70 % per year. As of June 30, 2021, the effective interest rate was 2.70 %. Wynn Macau Credit Facilities Refinancing Commitment In August 2021, a subsidiary of WML received lender commitments for a senior unsecured revolving credit facility in an aggregate principal amount of up to $ 1.50 billion with a final maturity four years from inception. The Company expects to enter into the facility during the third quarter of 2021, and to use a portion of the net proceeds from borrowings under the new facility to facilitate the repayment of the outstanding $ 1.26 billion of borrowings under the existing Wynn Macau Credit Facilities at closing. 14 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Debt Covenant Compliance As of June 30, 2021, management believes the Company was in compliance with all debt covenants. Fair Value of Long-Term Debt The estimated fair value of the Company's long-term debt as of June 30, 2021 and December 31, 2020, was approximately $ 12.41 billion and $ 13.35 billion, respectively, compared to its carrying value, excluding debt issuance costs and original issue discount and premium, of $ 12.00 billion and $ 13.15 billion, respectively. The estimated fair value of the Company's long-term debt is based on recent trades, if available, and indicative pricing from market information (Level 2 inputs). Note 8 - Stockholders' Equity (Deficit) Equity Offering On February 11, 2021, the Company completed a registered public offering of 7,475,000 newly issued shares of its common stock, par value $ 0.01 per share, at a price of $ 115.00 per share for proceeds of $ 841.9 million, net of $ 17.7 million in underwriting discounts, commissions, and other expenses. The Company used $ 716.0 million of the proceeds from the equity offering to repay the then outstanding borrowings under the WRF Revolver, and intends to use the remaining net proceeds for general corporate purposes. Dividends During the first quarter of 2020, the Company paid a cash dividend of $ 1.00 per share, and recorded $ 107.5 million as a reduction of retained earnings from cash dividends declared. On May 6, 2020, the Company announced that it had suspended its quarterly dividend program due to the financial impact of the COVID-19 pandemic. Noncontrolling Interests On April 16, 2021, Wynn Interactive issued a pre-emptive rights notice to its shareholders in connection with the proposed creation and issuance of new Class A shares. Upon the consummation of the share issuance in May 2021, Wynn Interactive issued 3,229 new Class A shares to noncontrolling interest holders in exchange for aggregate proceeds of $ 4.7 million. The WML board of directors concluded not to recommend the payment of a dividend with respect to either of the years ended December 31, 2020 or 2019 due to the financial impact of the COVID-19 pandemic. As such, WML paid no dividends during 2020 or the six months ended June 30, 2021. During the six months ended June 30, 2021 and 2020, the Retail Joint Venture made aggregate distributions of approximately $ 6.48 million and $ 1.0 million, respectively, to its noncontrolling interest holder. For more information on the Retail Joint Venture, see Note 16, "Retail Joint Venture". 15 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Note 9 - Fair Value Measurements The following tables present assets and liabilities carried at fair value (in thousands): Fair Value Measurements Using: June 30, 2021 Quoted Market Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Cash equivalents $ 365,589 $ — $ 365,589 — Restricted cash $ 6,369 $ 4,631 $ 1,738 — Liabilities: Interest rate collar $ 11,527 — $ 11,527 — Fair Value Measurements Using: December 31, 2020 Quoted Market Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Cash equivalents $ 980,580 $ 504,980 $ 475,600 — Restricted cash $ 4,352 $ 2,054 $ 2,298 — Liabilities: Interest rate collar $ 16,908 — $ 16,908 — Note 10 - Customer Contract Liabilities In providing goods and services to its customers, there is often a timing difference between the Company receiving cash and the Company recording revenue for providing services or holding events. The Company's primary liabilities associated with customer contracts are as follows (in thousands): June 30, 2021 December 31, 2020 Increase (decrease) June 30, 2020 December 31, 2019 Increase (decrease) Casino outstanding chips and front money deposits (1) $ 431,536 $ 596,463 $ ( 164,927 ) $ 904,792 $ 769,053 $ 135,739 Advance room deposits and ticket sales (2) 56,208 29,224 26,984 28,874 49,834 ( 20,960 ) Other gaming-related liabilities (3) 10,333 7,882 2,451 5,592 13,970 ( 8,378 ) Loyalty program and related liabilities (4) 29,260 22,736 6,524 21,566 21,148 418 $ 527,337 $ 656,305 $ ( 128,968 ) $ 960,824 $ 854,005 $ 106,819 (1) Casino outstanding chips generally represent amounts owed to gaming promoters and customers for chips in their possession, and casino front money deposits represent funds deposited by customers before gaming play occurs. These amounts are included in customer deposits on the Condensed Consolidated Balance Sheets and may be recognized as revenue or redeemed for cash in the future. (2) Advance room deposits and ticket sales represent cash received in advance for goods or services to be provided in the future. These amounts are included in customer deposits on the Condensed Consolidated Balance Sheets and will be recognized as revenue when the goods or services are provided or the events are held. Decreases in this balance generally represent the recognition of revenue and increases in the balance represent additional deposits made by customers. The deposits are expected to primarily be recognized as revenue within one year. (3) Other gaming-related liabilities generally represent unpaid wagers primarily in the form of unredeemed slot, race and sportsbook tickets or wagers for future sporting events. The amounts are included in other accrued liabilities on the Condensed Consolidated Balance Sheets. (4) Loyalty program and related liabilities represent the deferral of revenue until the loyalty points or other complimentaries are redeemed. The amounts are included in other accrued liabilities on the Condensed Consolidated Balance Sheets and are expected to be recognized as revenue within one year of being earned by customers. 16 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Note 11 - Stock-Based Compensation The total compensation cost for stock-based compensation plans was recorded as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Casino (1) $ 3,686 $ 3,196 $ 7,577 $ 2,300 Rooms 403 346 909 695 Food and beverage 822 666 1,972 1,303 Entertainment, retail and other (2) 4,921 84 9,221 157 General and administrative (3) 15,275 16,792 29,774 25,993 Total stock-based compensation expense 25,107 21,084 49,453 30,448 Total stock-based compensation capitalized 1,124 486 2,029 703 Total stock-based compensation costs $ 26,231 $ 21,570 $ 51,482 $ 31,151 (1) For the six months ended June 30, 2020, reflects the reversal of $ 3.3 million of compensation cost previously recognized for awards forfeited in connection with the departure of an employee. (2) For the three and six months ended June 30, 2021, reflects compensation cost of $ 1.4 million and $ 2.7 million, respectively, recognized in connection with the vesting of restricted stock performance awards. (3) For the three and six months ended June 30, 2020, reflects compensation cost of $ 4.4 million recognized in connection with the vesting of restricted stock performance awards. Note 12 - Income Taxes The Company recorded an income tax expense of $ 0.7 million and $ 80.9 million for the three months ended June 30, 2021 and 2020, respectively and an income tax expense of $ 1.2 million and $ 156.7 million for the six months ended June 30, 2021 and 2020, respectively. The 2021 income tax expense primarily related to an increase in valuation allowance for U.S deferred tax assets and to the Macau dividend tax agreement that provides for an annual payment of MOP 12.8 million (approximately $ 1.6 million) as complementary tax otherwise due by stockholders of Wynn Macau SA. The 2020 income tax expense primarily related to the increase in the valuation allowance for U.S. foreign tax credits. In March 2021, the Company received an extension of its Macau dividend tax agreement, providing for a payment of MOP 12.8 million (approximately $ 1.6 million) for 2021 and MOP 6.3 million (approximately $ 0.8 million) for the period ending June 26, 2022, the expiration date of the gaming concession agreement. The Company records valuation allowances on certain of its U.S. and foreign deferred tax assets. During the third quarter of 2020, the Company concluded it could no longer rely on forecasted future taxable income in assessing a valuation allowance on its deferred tax assets. This conclusion was reached due to cumulative operating losses incurred by the Company and tax legislation that reduced future sources of taxable income. As of June 30, 2021, the Company continues to rely solely on the reversal of net taxable temporary differences in assessing a need for a valuation allowance. In April 2020, Wynn Macau SA received an extension of the exemption from Macau’s 12 % Complementary Tax on casino gaming profits earned from January 1, 2021 to June 26, 2022, the expiration date of the gaming concession agreement. For the three and six months ended June 30, 2021 and 2020, the Company did not have any casino gaming profits exempt from the Macau Complementary Tax. The Company's non-gaming profits remain subject to the Macau Complementary Tax and its casino winnings remain subject to the Macau special gaming tax and other levies in accordance with its concession agreement. In March 2021, the Financial Services Bureau concluded its review of the 2017 and 2018 Macau income tax returns of Palo with no changes. 17 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Note 13 - Earnings Per Share Basic earnings per share ("EPS") is computed by dividing net loss attributable to Wynn Resorts by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net loss attributable to Wynn Resorts by the weighted average number of common shares outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potential dilutive securities had been issued, to the extent such impact is not anti-dilutive. Potentially dilutive securities include outstanding stock options and unvested restricted stock. The weighted average number of common and common equivalent shares used in the calculation of basic and diluted EPS consisted of the following (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Numerator: Net loss attributable to Wynn Resorts, Limited $ ( 131,369 ) $ ( 637,564 ) $ ( 412,347 ) $ ( 1,039,601 ) Denominator: Weighted average common shares outstanding 114,545 106,713 112,792 106,688 Potential dilutive effect of stock options, nonvested, and performance nonvested shares — — — — Weighted average common and common equivalent shares outstanding 114,545 106,713 112,792 106,688 Net loss attributable to Wynn Resorts, Limited per common share, basic $ ( 1.15 ) $ ( 5.97 ) $ ( 3.66 ) $ ( 9.74 ) Net loss attributable to Wynn Resorts, Limited per common share, diluted $ ( 1.15 ) $ ( 5.97 ) $ ( 3.66 ) $ ( 9.74 ) Anti-dilutive stock options, nonvested, and performance nonvested shares excluded from the calculation of diluted net income per share 1,129 1,127 1,129 1,127 Note 14 - Leases Lessor Arrangements The following table presents the minimum and contingent operating lease income for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Minimum rental income $ 25,218 $ 28,073 $ 47,957 $ 59,723 Contingent rental income 30,110 1,839 56,115 8,519 Total rental income $ 55,328 $ 29,912 $ 104,072 $ 68,242 18 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Note 15 - Commitments and Contingencies Litigation In addition to the actions noted below, the Company and its affiliates are involved in litigation arising in the normal course of business. In the opinion of management, such litigation is not expected to have a material effect on the Company's financial condition, results of operations, and cash flows. Massachusetts Gaming License Related Actions On September 17, 2014, the Massachusetts Gaming Commission ("MGC") designated Wynn MA the award winner of the Greater Boston (Region A) gaming license (the "Boston area license"). On November 7, 2014, the gaming license became effective. Revere Action On October 16, 2014, the City of Revere, the host community to the unsuccessful bidder for the Boston area license, the International Brotherhood of Electrical Workers, Local 103, and several individuals, filed a complaint against the MGC and its gaming commissioners in Suffolk Superior Court in Boston, Massachusetts (the "Revere Action"). Mohegan Sun ("Mohegan"), the other applicant for the Boston area license, joined the lawsuit and challenged the MGC's award of the Boston area license. On December 3, 2015, the court granted the MGC's motion to dismiss the claims asserted in the Revere Action and the court dismissed all claims except Mohegan's claim alleging procedural error by the MGC in granting the license to Wynn MA. The plaintiffs appealed. After multiple appeals and cross appeals, only two claims remained: (1) individual plaintiffs' claim for violation of the open meeting laws; and (2) Mohegan's claim for procedural error. On July 12, 2019, the Suffolk Superior Court granted the MGC's motion for summary judgment and dismissed the open meeting law claim, leaving only Mohegan's procedural claim for procedural error. On August 2, 2019, Mohegan filed a motion to file a second amended complaint, to add new claims related to the MGC's allegedly inadequate 2013 investigation. On October 15, 2019, the court granted Mohegan's motion to amend and allowed it to file a second amended intervenor's complaint. Wynn MA is not a party to and is not named in the Revere Action. Derivative Litigation A number of stockholder derivative actions were filed in state and federal court located in Clark County, Nevada against certain current and former members of the Company's Board of Directors and, in some cases, the Company's current and former officers. Each of the complaints alleged, among other things, breach of fiduciary duties in failing to detect, prevent and remedy alleged inappropriate personal conduct by Stephen A. Wynn in the workplace. The actions filed in the Eighth Judicial District Court of Clark County, Nevada were consolidated as In re Wynn Resorts, Ltd. Derivative Litigation ("State Derivative Case"). On June 3, 2019, a separate stockholder derivative action was filed in the Eighth Judicial District Court of Clark County, Nevada alleging substantially similar causes of action as the State Derivative Case with the additional allegation that various of the Company's attorneys committed professional malpractice, and certain current and former executives also breached fiduciary duties and aided and abetted the breach of fiduciary duties, in connection with the alleged inappropriate personal conduct by Stephen A. Wynn in the workplace. This case was consolidated in September 2019 into the State Derivative Case. On November 27, 2019, the State Derivative Case parties agreed to terms of a settlement agreement. The court approved the settlement agreement on February 12, 2020, and entered a written order approving the settlement on March 10, 2020. Following the Nevada Supreme Court’s dismissal of the only appeal, the settlement agreement became effective and final. Following the dismissal, the Company received net proceeds of $ 30.2 million, which has been recognized as a reduction of general and administrative expense within the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020. 19 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) In 2018, several actions filed in the United States District Court, District of Nevada were consolidated as In re Wynn Resorts, Ltd. Derivative Litigation ("Federal Derivative Case"), which also claim corporate waste and violation of Section 14(a) of the Exchange Act. In June 2018, the Company filed a motion to dismiss and a motion to stay pending resolution of the Securities Action (described below). On March 29, 2019, the Court granted the Company's request for a stay. On March 25, 2020, the parties stipulated to dismiss the Federal Derivative Case given the approved settlement in the State Derivative Case. On March 25, 2019, a separate stockholder derivative action was filed in the United States District Court, District of Nevada alleging similar causes of action as the Federal Derivative Case with the additional allegation that the Board of Directors improperly refused the stockholder's demand to commence litigation against the officers and directors of the Company. On April 30, 2020, the Company filed a motion for summary judgment, seeking dismissal of the claims given the approved settlement in the State Derivative Case. On January 12, 2021, the court granted the Company’s motion for summary judgment of this action and denied the stockholder’s request to vacate the parties' stipulation to dismiss the Federal Derivative Case. On February 11, 2021, the stockholder filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit. On May 12, 2021, the parties stipulated to dismiss the appeal. Each of the actions sought to recover for the Company unspecified damages, including restitution and disgorgement of profits, and also sought to recover attorneys' fees, costs and related expenses for the plaintiff. Securities Action On February 20, 2018, a putative securities class action was filed against the Company and certain current and former officers of the Company in the United States District Court, Southern District of New York (which was subsequently transferred to the United States District Court, District of Nevada) by John V. Ferris and Joann M. Ferris on behalf of all persons who purchased the Company's common stock between February 28, 2014 and January 25, 2018. The complaint alleges, among other things, certain violations of federal securities laws and seeks to recover unspecified damages as well as attorneys' fees, costs and related expenses for the plaintiffs. On April 15, 2019, the Company filed a motion to dismiss, which the court granted on May 27, 2020, with leave to amend. On July 1, 2020, the plaintiffs filed an amended complaint. On August 14, 2020, the Company filed a motion to dismiss the amended complaint. On July 28, 2021, the court granted in part, and denied in part, the Company's motion to dismiss the amended complaint, dismissing certain of plaintiffs' claims, including all claims against Mr. Billings and the individual directors, and allowing other claims to proceed against the Company and several of the Company's current and former executive officers, including Mr. Maddox, Stephen A. Wynn, Kimmarie Sinatra, and Steven Cootey. The defendants in these actions will vigorously defend against the claims pleaded against them. These actions are in preliminary stages and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of these actions or the range of reasonably possible loss, if any. Federal Investigation From time to time, the Company receives regulatory inquiries about compliance with anti-money laundering laws. The Company received requests for information from the U.S. Attorney’s Office for the Southern District of California relating to its anti-money laundering policies and procedures, and in the first half of 2020, received two grand jury subpoenas regarding various transactions at Wynn Las Vegas relating to certain patrons and agents who reside or operate in foreign jurisdictions. The Company continues to cooperate with the U.S. Attorney's Office in its investigation, which remains ongoing. Because no charges or claims have been brought, the Company is unable to predict the outcome of the investigation, the extent of the materiality of the outcome, or reasonably estimate the possible range of loss, if any, which could be associated with the resolution of any possible charges or claims that may be brought against the Company. Note 16 - Retail Joint Venture As of June 30, 2021 and December 31, 2020, the Retail Joint Venture had total assets of $ 101.2 million and $ 96.3 million, respectively, and total liabilities of $ 629.1 million and $ 633.5 million, respectively. As of June 30, 2021 and December 31, 2020, the Retail Joint Venture's liabilities included long-term debt of $ 612.6 million and $ 612.3 million, respectively, net of debt issuance costs, related to the outstanding borrowings under the Retail Term Loan. 20 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Note 17 - Segment Information The Company reviews the results of operations for each of its operating segments, and identifies reportable segments based upon factors such as geography, regulatory environment, and the Company's organizational and management reporting structure. Wynn Macau and Encore, an expansion at Wynn Macau, are managed as a single integrated resort and have been aggregated as one reportable segment ("Wynn Macau"). Wynn Palace is presented as a separate reportable segment and is combined with Wynn Macau for geographical presentation. Other Macau primarily represents the assets for the Company's Macau holding company. Wynn Las Vegas, Encore, an expansion at Wynn Las Vegas, and the Retail Joint Venture are managed as a single integrated resort and have been aggregated as one reportable segment ("Las Vegas Operations"). Encore Boston Harbor is presented as one reportable segment. The results of Wynn Interactive are presented within Corporate and other. 21 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) The following tables present the Company's segment information (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Operating revenues Macau Operations: Wynn Palace Casino $ 212,067 $ ( 11,428 ) $ 397,976 $ 196,148 Rooms 20,883 2,431 37,895 22,141 Food and beverage 13,805 4,231 25,477 17,529 Entertainment, retail and other (1) 23,616 13,484 46,349 32,413 270,371 8,718 507,697 268,231 Wynn Macau Casino 142,419 ( 3,524 ) 281,346 186,604 Rooms 13,427 2,631 28,129 18,542 Food and beverage 8,559 3,684 15,992 13,215 Entertainment, retail and other (1) 19,623 9,097 38,212 23,016 184,028 11,888 363,679 241,377 Total Macau Operations 454,399 20,606 871,376 509,608 Las Vegas Operations: Casino 112,775 24,365 192,678 95,660 Rooms 93,785 12,353 133,546 118,458 Food and beverage 112,858 16,092 152,935 122,071 Entertainment, retail and other (1) 35,648 12,076 54,623 52,521 Total Las Vegas Operations 355,066 64,886 533,782 388,710 Encore Boston Harbor: Casino 135,485 — 246,964 101,790 Rooms 9,670 — 14,385 10,955 Food and beverage 13,920 — 23,247 20,606 Entertainment, retail and other (1) 6,166 206 10,735 7,745 Total Encore Boston Harbor 165,241 206 295,331 141,096 Corporate and other: Entertainment, retail and other 15,407 — 26,306 — Total Corporate and other 15,407 — 26,306 — Total operating revenues $ 990,113 $ 85,698 $ 1,726,795 $ 1,039,414 22 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Adjusted Property EBITDA (2) Macau Operations: Wynn Palace $ 53,555 $ ( 110,908 ) $ 80,924 $ ( 100,732 ) Wynn Macau 14,086 ( 82,646 ) 30,642 ( 63,438 ) Total Macau Operations 67,641 ( 193,554 ) 111,566 ( 164,170 ) Las Vegas Operations (3) 133,222 ( 75,564 ) 161,303 ( 97,641 ) Encore Boston Harbor (4) 46,916 ( 53,779 ) 77,279 ( 66,415 ) Corporate and other ( 40,899 ) — ( 84,368 ) — Total 206,880 ( 322,897 ) 265,780 ( 328,226 ) Other operating expenses Pre-opening 2,495 2,186 4,122 4,737 Depreciation and amortization 183,307 179,266 368,428 358,012 Property charges and other 5,651 6,567 11,268 33,796 Corporate expenses and other (5) 19,841 ( 8,984 ) 37,762 15,208 Stock-based compensation 25,107 21,084 49,453 30,448 Total other operating expenses 236,401 200,119 471,033 442,201 Operating loss ( 29,521 ) ( 523,016 ) ( 205,253 ) ( 770,427 ) Other non-operating income and expenses Interest income 720 3,983 1,624 11,936 Interest expense, net of amounts capitalized ( 150,424 ) ( 133,218 ) ( 303,276 ) ( 262,045 ) Change in derivatives fair value 972 ( 3,294 ) 5,381 ( 18,954 ) Loss on extinguishment of debt — ( 619 ) ( 1,322 ) ( 1,462 ) Other 5,553 2,233 ( 5,540 ) 12,568 Total other non-operating income and expenses ( 143,179 ) ( 130,915 ) ( 303,133 ) ( 257,957 ) Loss before income taxes ( 172,700 ) ( 653,931 ) ( 508,386 ) ( 1,028,384 ) Provision for income taxes ( 697 ) ( 80,938 ) ( 1,190 ) ( 156,738 ) Net loss ( 173,397 ) ( 734,869 ) ( 509,576 ) ( 1,185,122 ) Net loss attributable to noncontrolling interests 42,028 97,305 97,229 145,521 Net loss attributable to Wynn Resorts, Limited $ ( 131,369 ) $ ( 637,564 ) $ ( 412,347 ) $ ( 1,039,601 ) (1) Includes lease revenue accounted for under lease accounting guidance. For more information on leases, see Note 14, "Leases". (2) "Adjusted Property EBITDA" is net 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, meeting and convention, 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. (3) For the three months ended June 30, 2020, excluded $ 56.4 million of expense accrued during the first quarter of 2020 related to the Company's commitment to pay salary, tips, and benefits continuation for all of its U.S. employees for the period from April 1 through May 15, 2020. (4) For the three months ended June 30, 2020, excluded $ 19.3 million of expense accrued during the first quarter of 2020 related to the Company's commitment to pay salary, tips, and benefits continuation for all of its U.S. employees for the period from April 1 through May 15, 2020. (5) For the three and six months ended June 30, 2020, included $ 27.7 million net gain recorded in relation to a derivative litigation settlement. 23 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) June 30, 2021 December 31, 2020 Assets Macau Operations: Wynn Palace $ 3,255,389 $ 3,393,790 Wynn Macau 1,013,148 1,202,709 Other Macau 1,475,563 2,026,098 Total Macau Operations 5,744,100 6,622,597 Las Vegas Operations 3,017,361 2,992,870 Encore Boston Harbor 2,257,729 2,300,016 Corporate and other 2,003,475 1,954,064 Total $ 13,022,665 $ 13,869,547 24 Table of Contents