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, 2020. 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 Wynn Macau, Limited ("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. Additionally, we are 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"). We refer to Wynn Las Vegas, Encore, an expansion at Wynn Las Vegas, and the Retail Joint Venture as our Las Vegas Operations. On June 23, 2019, we opened Encore Boston Harbor, an integrated resort in Everett, Massachusetts. In October 2020, Wynn Interactive Ltd. ("Wynn Interactive") was formed through the merger of our U.S. online sports betting and gaming business, social casino business, and our strategic partner, BetBull Limited ("BetBull"). Wynn Resorts holds an approximately 74% interest in, and consolidates, Wynn Interactive. The results of Wynn Interactive are presented within Corporate and other. 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. 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. Total visitation from PRC to Macau increased meaningfully in the six months ended June 30, 2021 compared to the same period in 2020. Total visitation decreased 75.1% compared to the same period in 2019. 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. Given the evolving conditions created by and in response to the COVID-19 pandemic, measures that have been lifted may be reintroduced if there are adverse developments in the COVID-19 situation in Macau and other regions with access to Macau. 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 25 Table of Contents 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 executive order rescinding the COVID-related restrictions and limitations on businesses as of May 29, 2021. The property continues to operate its hotel tower Thursday through Sunday. 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. 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. 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. 26 Table of Contents • Table games win is the amount of table drop or turnover that is retained and recorded as casino revenues. Table games win is before discounts, commissions and the allocation of casino revenues to rooms, food and beverage and other revenues for services provided to casino customers on a complimentary basis. Table games win does not include poker rake. • Slot machine win is the amount of handle (representing the total amount wagered) that is retained by us and is recorded as casino revenues. Slot machine win is after adjustment for progressive accruals and free play, but before discounts and the allocation of casino revenues to rooms, food and beverage and other revenues for services provided to casino customers on a complimentary basis. • Poker rake is the portion of cash wagered by patrons in our poker rooms that is retained by the casino as a service fee, after adjustment for progressive accruals, but before the allocation of casino revenues to rooms, food and beverage and other revenues for services provided to casino customers on a complimentary basis. Poker tables are not included in our measure of average number of table games. • Average daily rate ("ADR") is calculated by dividing total room revenues, including complimentaries (less service charges, if any), by total rooms occupied. • 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%. 27 Table of Contents Results of Operations Summary of second quarter 2021 results The following table summarizes our financial results for the periods presented (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change 2021 2020 Increase/ (Decrease) Percent Change Operating revenues $ 990,113 $ 85,698 $ 904,415 1,055.4 $ 1,726,795 $ 1,039,414 $ 687,381 66.1 Net loss attributable to Wynn Resorts, Limited (131,369) (637,564) 506,195 79.4 (412,347) (1,039,601) 627,254 60.3 Diluted net loss per share (1.15) (5.97) 4.82 80.7 (3.66) (9.74) 6.08 62.4 Adjusted Property EBITDA (1) 206,880 (322,897) 529,777 NM 265,780 (328,226) 594,006 NM NM - Not meaningful. (1) See Item 1—"Financial Statements," Note 17, "Segment Information," for a reconciliation of Adjusted Property EBITDA to net loss attributable to Wynn Resorts, Limited. The increase in operating revenues for the three months ended June 30, 2021 was primarily driven by increases of $261.7 million, $172.1 million, $290.2 million, and $165.0 million from Wynn Palace, Wynn Macau, our Las Vegas Operations, and Encore Boston Harbor, respectively, as a result of ongoing recovery from the effects of COVID-19. The decrease in net loss attributable to Wynn Resorts, Limited for the three months ended June 30, 2021 was primarily related to increased operating revenues at our integrated resort properties, partially offset by increased operating expenses. In addition, net loss attributable to Wynn Resorts, Limited for the second quarter of 2020 excluded the impact of $75.7 million of expense related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. The increase in Adjusted Property EBITDA for the three months ended June 30, 2021 was primarily driven by increased operating revenues at our integrated resort properties. Adjusted Property EBITDA increased $164.5 million, $96.7 million, $208.8 million, and $100.7 million at Wynn Palace, Wynn Macau, our Las Vegas Operations, and Encore Boston Harbor, respectively, and decreased $40.9 million at Corporate and other. In addition, Adjusted Property EBITDA for the second quarter of 2020 excluded the impact of $75.7 million of expense related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. 28 Table of Contents Financial results for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. Operating revenues The following table presents our operating revenues (in thousands): Three Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change Operating revenues Macau Operations: Wynn Palace $ 270,371 $ 8,718 $ 261,653 3,001.3 Wynn Macau 184,028 11,888 172,140 1,448.0 Total Macau Operations 454,399 20,606 433,793 2,105.2 Las Vegas Operations 355,066 64,886 290,180 447.2 Encore Boston Harbor 165,241 206 165,035 NM Corporate and other 15,407 — 15,407 NM $ 990,113 $ 85,698 $ 904,415 1,055.4 NM - Not meaningful. The following table presents our casino and non-casino operating revenues (in thousands): Three Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change Operating revenues Casino revenues $ 602,746 $ 9,413 $ 593,333 6,303.3 Non-casino revenues: Rooms 137,765 17,415 120,350 691.1 Food and beverage 149,142 24,007 125,135 521.2 Entertainment, retail and other 100,460 34,863 65,597 188.2 Total non-casino revenues 387,367 76,285 311,082 407.8 $ 990,113 $ 85,698 $ 904,415 1,055.4 Casino revenues for the three months ended June 30, 2021 were 60.9% of operating revenues, compared to 11.0% for the same period of 2020. Non-casino revenues for the three months ended June 30, 2021 were 39.1% of operating revenues, compared to 89.0% for the same period of 2020. Casino revenues Casino revenues increased primarily due to increased table drop, table games win and slot machine win at our Las Vegas Operations and increased VIP turnover and table games win and mass market table drop, table games win and slot machine win at our Macau Operations. The table games win and slot machine win at Encore Boston Harbor was $64.9 million and $89.6 million for the three months ended June 30, 2021, respectively. Our Las Vegas Operations were closed to the public from March 17, 2020 until June 4, 2020. Encore Boston Harbor closed to the public on March 15, 2020, and remained closed through the second quarter of 2020. 29 Table of Contents The table below sets forth our casino revenues and associated key operating measures (dollars in thousands, except for win per unit per day): Three Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change Macau Operations: Wynn Palace: Total casino revenues $ 212,067 $ (11,428) $ 223,495 NM VIP: Average number of table games 94 100 (6) (6.0) VIP turnover $ 1,811,381 $ 1,719,825 $ 91,556 5.3 VIP table games win $ 71,570 $ (29,806) $ 101,376 NM VIP win as a % of turnover 3.95 % (1.73) % 5.68 Table games win per unit per day $ 8,346 $ (3,276) $ 11,622 NM Mass market: Average number of table games 228 221 7 3.2 Table drop $ 707,494 $ 22,029 $ 685,465 3,111.6 Table games win $ 163,547 $ 7,168 $ 156,379 2,181.6 Table games win % 23.1 % 32.5 % (9.4) Table games win per unit per day $ 7,877 $ 357 $ 7,520 2,106.4 Average number of slot machines 726 480 246 51.3 Slot machine handle $ 421,269 $ 39,415 $ 381,854 968.8 Slot machine win $ 18,772 $ 2,395 $ 16,377 683.8 Slot machine win per unit per day $ 284 $ 55 $ 229 416.4 Wynn Macau: Total casino revenues $ 142,419 $ (3,524) $ 145,943 NM VIP: Average number of table games 85 91 (6) (6.6) VIP turnover $ 1,489,912 $ 607,144 $ 882,768 145.4 VIP table games win $ 39,388 $ (12,161) $ 51,549 NM VIP win as a % of turnover 2.64 % (2.00) % 4.64 Table games win per unit per day $ 5,111 $ (1,471) $ 6,582 NM Mass market: Average number of table games 240 229 11 4.8 Table drop $ 670,400 $ 40,817 $ 629,583 1,542.5 Table games win $ 128,921 $ 3,391 $ 125,530 3,701.9 Table games win % 19.2 % 8.3 % 10.9 Table games win per unit per day $ 5,903 $ 163 $ 5,740 3,521.5 Average number of slot machines 607 440 167 38.0 Slot machine handle $ 300,523 $ 62,011 $ 238,512 384.6 Slot machine win $ 9,223 $ 2,626 $ 6,597 251.2 Slot machine win per unit per day $ 167 $ 66 $ 101 153.0 NM - Not meaningful. 30 Table of Contents Three Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change Las Vegas Operations (1) : Total casino revenues $ 112,775 $ 24,365 $ 88,410 362.9 Average number of table games 218 221 (3) (1.4) Table drop $ 427,014 $ 90,873 $ 336,141 369.9 Table games win $ 99,021 $ 17,918 $ 81,103 452.6 Table games win % 23.2 % 19.7 % 3.5 Table games win per unit per day $ 4,997 $ 2,998 $ 1,999 66.7 Average number of slot machines 1,715 1,752 (37) (2.1) Slot machine handle $ 1,115,149 $ 246,393 $ 868,756 352.6 Slot machine win $ 78,890 $ 17,523 $ 61,367 350.2 Slot machine win per unit per day $ 506 $ 371 $ 135 36.4 Poker rake $ 3,927 $ — $ 3,927 100.0 Encore Boston Harbor (2) : Total casino revenues $ 135,485 Average number of table games 195 Table drop $ 306,070 Table games win $ 64,874 Table games win % 21.2 % Table games win per unit per day $ 3,654 Average number of slot machines 2,171 Slot machine handle $ 1,094,178 Slot machine win $ 89,560 Slot machine win per unit per day $ 453 Note: In response to the initial outbreak of COVID-19 in early 2020, each of our properties was subject to partial or full closure for varying lengths of time during 2020, and each has since reopened with certain COVID-19 specific protective measures in place. (1) Our Las Vegas Operations closed on March 17, 2020 and reopened on June 4, 2020. On October 19, 2020, Encore at Wynn Las Vegas adjusted its operating schedule to five days/four nights each week due to reduced customer demand levels. This adjusted operating schedule remained in effect through the first quarter of 2021, and on April 8, 2021, Encore at Wynn Las Vegas resumed full operations. (2) Encore Boston Harbor casino revenues and associated key operating measures for the second quarter of 2020 have been omitted from the table. As a result of the COVID-19 pandemic, our operations at Encore Boston Harbor were closed throughout the second quarter in 2020. 31 Table of Contents Non-casino revenues The table below sets forth our room revenues and associated key operating measures: Three Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change Macau Operations: Wynn Palace : Total room revenues (dollars in thousands) $ 20,883 $ 2,431 $ 18,452 759.0 Occupancy 70.6 % 4.4 % 66.2 ADR $ 180 $ 339 $ (159) (46.9) REVPAR $ 127 $ 15 $ 112 746.7 Wynn Macau: Total room revenues (dollars in thousands) $ 13,427 $ 2,631 $ 10,796 410.3 Occupancy 68.0 % 7.5 % 60.5 ADR $ 198 $ 342 $ (144) (42.1) REVPAR $ 135 $ 25 $ 110 440.0 Las Vegas Operations (1) : Total room revenues (dollars in thousands) $ 93,785 $ 12,353 $ 81,432 659.2 Occupancy 67.2 % 43.7 % 23.5 ADR $ 333 $ 226 $ 107 47.3 REVPAR $ 224 $ 99 $ 125 126.3 Encore Boston Harbor (2)(3) : Total room revenues (dollars in thousands) $ 9,670 Occupancy 87.8 % ADR $ 304 REVPAR $ 267 (1) Wynn Las Vegas closed on March 17, 2020 and reopened on June 4, 2020. (2) Encore Boston Harbor room revenues and associated key operating measures for the second quarter of 2020 have been omitted from the table. As a result of the COVID-19 pandemic, our operations at Encore Boston Harbor were closed throughout the second quarter in 2020. (3) Encore Boston Harbor room statistics have been computed based on 53 days of operation in three months ended June 30, 2021, representing the number of nights hotel rooms were offered for sale to the public. Room revenues increased $120.4 million, primarily due to higher occupancy at our Las Vegas Operations and our Macau Operations. Encore at Wynn Las Vegas operated on a limited basis with midweek closures throughout the first quarter of 2021 before fully reopening April 8, 2021. Room revenues from Encore Boston Harbor were $9.7 million. The hotel tower at Encore Boston Harbor was closed pursuant to a state directive from November 6, 2020 through January 25, 2021, when it restored certain operations and reopened its hotel tower on a Thursday through Sunday weekly schedule. Food and beverage revenues increased $125.1 million, primarily driven by increased covers at our Las Vegas Operations and our Macau Operations. Food and beverage revenues from Encore Boston Harbor were $13.9 million. Entertainment, retail and other revenues increased $65.6 million, primarily due to an increase in visitation at our Las Vegas Operations and our Macau Operations. Entertainment, retail and other revenues from Encore Boston Harbor were $6.2 million. 32 Table of Contents Operating expenses The table below presents operating expenses (in thousands): Three Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change Operating expenses: Casino $ 381,615 $ 131,138 $ 250,477 191.0 Rooms 50,552 30,367 20,185 66.5 Food and beverage 117,106 61,889 55,217 89.2 Entertainment, retail and other 80,922 16,873 64,049 379.6 General and administrative 197,545 152,081 45,464 29.9 Provision for credit losses 441 28,347 (27,906) (98.4) Pre-opening 2,495 2,186 309 14.1 Depreciation and amortization 183,307 179,266 4,041 2.3 Property charges and other 5,651 6,567 (916) (13.9) Total operating expenses $ 1,019,634 $ 608,714 $ 410,920 67.5 Total operating expenses increased $410.9 million compared to the second quarter of 2020, primarily due to increased casino, room, food and beverage, entertainment, retail and other, and general and administrative expenses associated with increased levels of business as our properties recover from the effects of the COVID-19 pandemic, partially offset by decreased provision for credit losses. Operating expenses for the second quarter of 2020 excluded $75.7 million of expense related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. Casino expenses increased $107.5 million, $74.8 million, $22.1 million, and $46.1 million at Wynn Palace, Wynn Macau, our Las Vegas Operations, and Encore Boston Harbor, respectively. These increases were primarily due to increased gaming tax expense commensurate with the increase in casino revenues at each property. Casino expenses for the second quarter of 2020 excluded expense of $7.9 million from Encore Boston Harbor and $12.8 million from our Las Vegas Operations related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. Room expenses increased $14.5 million and $2.7 million at our Las Vegas Operations and Encore Boston Harbor, respectively. The increases were primarily a result of higher operating costs related to the increase in occupancy at our Las Vegas Operations and Encore Boston Harbor. Room expenses for the second quarter of 2020 excluded expense of $1.5 million from Encore Boston Harbor and $8.3 million from our Las Vegas Operations related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. Food and beverage expenses increased $46.0 million and $4.4 million at our Las Vegas Operations and Encore Boston Harbor, respectively. The increases were primarily a result of higher operating costs related to the increase in food and beverage revenues at each property as well as higher nightlife entertainment costs at our Las Vegas Operations. Food and beverage expenses for the second quarter of 2020 excluded expense of $20.8 million from our Las Vegas Operations and $4.8 million from Encore Boston Harbor related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. Entertainment, retail and other expenses increased primarily due to marketing expenses incurred by Wynn Interactive. Entertainment, retail and other expenses for the second quarter of 2020 excluded expense of $4.1 million from our Las Vegas Operations and $0.7 million from Encore Boston Harbor related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. General and administrative expenses increased primarily due to increases of $10.8 million and $5.1 million at Encore Boston Harbor and our Las Vegas Operations, respectively. These increases were primarily attributable to increased payroll, operating costs, and general and administrative expenses. In addition, corporate and other general and administrative expenses 33 Table of Contents increased $27.3 million, primarily due to a credit of $27.7 million for the net proceeds of a derivative action settlement recognized during the three months ended June 30, 2020. General and administrative expenses for the second quarter of 2020 excluded expense of $10.2 million from our Las Vegas Operations and $4.4 million from Encore Boston Harbor related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. Provision for credit losses decreased $14.8 million and $8.8 million at Wynn Palace and our Las Vegas Operations, respectively. The decreases were primarily due to the impact of historical collection patterns and expectations of current and future collection trends, as well as the specific review of customer accounts, on our estimated credit loss for the respective periods. Our property charges and other expenses for the quarter ended June 30, 2021 consisted primarily of asset disposals, abandonments and retirements of $1.4 million, $1.2 million, and $1.0 million at our Las Vegas Operations, Wynn Macau, and Wynn Palace, respectively. Our property charges and other expenses for the quarter ended June 30, 2020 consisted primarily of asset disposals, abandonments and retirements of $3.6 million and $1.0 million at Encore Boston Harbor and Wynn Palace, respectively. Interest expense, net of capitalized interest The following table summarizes information related to interest expense (dollars in thousands): Three Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change Interest expense Interest cost, including amortization of debt issuance costs and original issue discount and premium $ 150,424 $ 133,218 $ 17,206 12.9 Weighted average total debt balance $ 12,105,755 $ 12,143,644 Weighted average interest rate 4.97 % 4.38 % Interest costs increased primarily due to an increase in the weighted average interest rate. Other non-operating income and expenses We incurred a foreign currency remeasurement gain of $5.6 million and $2.2 million for the three months ended June 30, 2021 and 2020, 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 $1.0 million and a loss of $3.3 million for the three months ended June 30, 2021 and 2020, respectively, from change in derivatives fair value. Income taxes We recorded an income tax expense of $0.7 million and $80.9 million for the three 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 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 allowances for U.S foreign tax credits and U.S. loss carryforwards. Net loss attributable to noncontrolling interests Net loss attributable to noncontrolling interests was $42.0 million and $97.3 million for the three months ended June 30, 2021 and 2020, respectively. These amounts are primarily related to the noncontrolling interests' share of net loss from WML. 34 Table of Contents Financial results for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. Operating revenues The following table presents our operating revenues (in thousands): Six Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change Operating revenues Macau Operations: Wynn Palace $ 507,697 $ 268,231 $ 239,466 89.3 Wynn Macau 363,679 241,377 122,302 50.7 Total Macau Operations 871,376 509,608 361,768 71.0 Las Vegas Operations 533,782 388,710 145,072 37.3 Encore Boston Harbor 295,331 141,096 154,235 109.3 Corporate and other 26,306 — 26,306 NM $ 1,726,795 $ 1,039,414 $ 687,381 66.1 NM - Not meaningful. The following table presents casino and non-casino operating revenues (in thousands): Six Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change Operating revenues Casino revenues $ 1,118,964 $ 580,202 $ 538,762 92.9 Non-casino revenues: Rooms 213,955 170,096 43,859 25.8 Food and beverage 217,651 173,421 44,230 25.5 Entertainment, retail and other 176,225 115,695 60,530 52.3 Total non-casino revenues 607,831 459,212 148,619 32.4 $ 1,726,795 $ 1,039,414 $ 687,381 66.1 Casino revenues for the six months ended June 30, 2021 were 64.8% of operating revenues, compared to 55.8% for the same period of 2020. Non-casino revenues for the six months ended June 30, 2021 were 35.2% of operating revenues, compared to 44.2% for the same period of 2020. 35 Table of Contents Casino revenues Casino revenues increased primarily due to increased table drop, table games win and slot machine win at our Las Vegas Operations and Encore Boston Harbor, respectively, and increased mass market table drop and table games win at our Macau Operations. Our Las Vegas Operations were closed to the public from March 17, 2020 until June 4, 2020. Encore Boston Harbor closed to the public on March 15, 2020, and remained closed through the second quarter. The table below sets forth our casino revenues and associated key operating measures (dollars in thousands, except for win per unit per day): Six Months Ended June 30, 2021 2020 Increase/(Decrease) Percent Change Macau Operations (1) : Wynn Palace: Total casino revenues $ 397,976 $ 196,148 $ 201,828 102.9 VIP: Average number of table games 99 95 4 4.2 VIP turnover $ 4,011,563 $ 6,512,279 $ (2,500,716) (38.4) VIP table games win $ 168,026 $ 109,763 $ 58,263 53.1 VIP win as a % of turnover 4.19 % 1.69 % 2.50 Table games win per unit per day $ 9,402 $ 6,865 $ 2,537 37.0 Mass market: Average number of table games 225 201 24 11.9 Table drop $ 1,315,012 $ 497,252 $ 817,760 164.5 Table games win $ 295,196 $ 137,882 $ 157,314 114.1 Table games win % 22.4 % 27.7 % (5.3) Table games win per unit per day $ 7,249 $ 4,075 $ 3,174 77.9 Average number of slot machines 707 596 111 18.6 Slot machine handle $ 780,041 $ 464,129 $ 315,912 68.1 Slot machine win $ 33,015 $ 20,800 $ 12,215 58.7 Slot machine win per unit per day $ 258 $ 208 $ 50 24.0 Wynn Macau: Total casino revenues $ 281,346 $ 186,604 $ 94,742 50.8 VIP: Average number of table games 87 86 1 1.2 VIP turnover $ 3,294,294 $ 3,571,290 $ (276,996) (7.8) VIP table games win $ 98,022 $ 110,464 $ (12,442) (11.3) VIP win as a % of turnover 2.98 % 3.09 % (0.11) Table games win per unit per day $ 6,201 $ 7,623 $ (1,422) (18.7) Mass market: Average number of table games 240 208 32 15.4 Table drop $ 1,261,290 $ 619,052 $ 642,238 103.7 Table games win $ 234,104 $ 121,333 $ 112,771 92.9 Table games win % 18.6 % 19.6 % (1.0) Table games win per unit per day $ 5,390 $ 3,472 $ 1,918 55.2 Average number of slot machines 588 529 59 11.2 Slot machine handle $ 601,794 $ 428,549 $ 173,245 40.4 Slot machine win $ 19,431 $ 15,921 $ 3,510 22.0 Slot machine win per unit per day $ 183 $ 179 $ 4 2.2 Poker rake $ — $ 2,083 $ (2,083) (100.0) 36 Table of Contents Six Months Ended June 30, 2021 2020 Increase/(Decrease) Percent Change Las Vegas Operations (2) : Total casino revenues $ 192,678 $ 95,660 $ 97,018 101.4 Average number of table games 195 233 (38) (16.3) Table drop $ 751,545 $ 505,806 $ 245,739 48.6 Table games win $ 175,674 $ 100,584 $ 75,090 74.7 Table games win % 23.4 % 19.9 % 3.5 Table games win per unit per day $ 4,979 $ 4,152 $ 827 19.9 Average number of slot machines 1,631 1,762 (131) (7.4) Slot machine handle $ 1,906,409 $ 911,226 $ 995,183 109.2 Slot machine win $ 129,379 $ 64,197 $ 65,182 101.5 Slot machine win per unit per day $ 438 $ 350 $ 88 25.1 Poker rake $ 5,794 $ 2,175 $ 3,619 166.4 Encore Boston Harbor (3) : Total casino revenues $ 246,964 $ 101,790 $ 145,174 142.6 Average number of table games 197 160 37 23.1 Table drop $ 540,632 $ 275,631 $ 265,001 96.1 Table games win $ 114,251 $ 57,286 $ 56,965 99.4 Table games win % 21.1 % 20.8 % 0.3 Table games win per unit per day $ 3,201 $ 4,826 $ (1,625) (33.7) Average number of slot machines 2,031 2,837 (806) (28.4) Slot machine handle $ 2,007,973 $ 767,739 $ 1,240,234 161.5 Slot machine win $ 164,380 $ 59,448 $ 104,932 176.5 Slot machine win per unit per day $ 447 $ 283 $ 164 58.0 Poker rake $ — $ 5,105 $ (5,105) (100.0) In response to the initial outbreak of COVID-19 in early 2020, each of our properties was subject to partial or full closure for varying lengths of time during 2020, and each has since reopened with certain COVID-19 specific protective measures in place. (1) Our casino operations in Macau were closed for a 15-day period in February 2020 and resumed operations on a reduced basis on February 20, 2020. (2) Our Las Vegas Operations closed on March 17, 2020 and reopened on June 4, 2020. On October 19, 2020, Encore at Wynn Las Vegas adjusted its operating schedule to five days/four nights each week due to reduced customer demand levels. This adjusted operating schedule remained in effect through the first quarter of 2021, and on April 8, 2021, Encore at Wynn Las Vegas resumed full operations. (3) Encore Boston Harbor closed on March 15, 2020 and reopened on July 10, 2020. In addition, on November 6, 2020, Encore Boston Harbor temporarily suspended hotel operations and overnight casino operations pursuant to a state directive limiting the operating hours of certain businesses, including restaurants and casinos. On January 25, 2021, the limitations on operating hours were lifted, and Encore Boston Harbor restored 24-hour casino operations and reopened its hotel tower on a Thursday through Sunday weekly schedule. 37 Table of Contents Non-casino revenues The table below sets forth our room revenues and associated key operating measures: Six Months Ended June 30, 2021 2020 Increase/(Decrease) Percent Change Macau Operations: Wynn Palace: Total room revenues (dollars in thousands) $ 37,895 $ 22,141 $ 15,754 71.2 Occupancy 65.6 % 23.5 % 42.1 ADR $ 179 $ 298 $ (119) (39.9) REVPAR $ 118 $ 70 $ 48 68.6 Wynn Macau: Total room revenues (dollars in thousands) $ 28,129 $ 18,542 $ 9,587 51.7 Occupancy 64.4 % 28.4 % 36.0 ADR $ 219 $ 324 $ (105) (32.4) REVPAR $ 141 $ 92 $ 49 53.3 Las Vegas Operations (1) : Total room revenues (dollars in thousands) $ 133,546 $ 118,458 $ 15,088 12.7 Occupancy 52.9 % 70.6 % (17.7) ADR $ 332 $ 350 $ (18) (5.1) REVPAR $ 176 $ 247 $ (71) (28.7) Encore Boston Harbor (2) (3) : Total room revenues (dollars in thousands) $ 14,385 $ 10,955 $ 3,430 31.3 Occupancy 81.1 % 75.8 % 5.3 ADR $ 294 $ 292 $ 2 0.7 REVPAR $ 238 $ 222 $ 16 7.2 (1) Wynn Las Vegas closed on March 17, 2020 and reopened on June 4, 2020. (2) Encore Boston Harbor closed on March 15, 2020 and reopened on July 10, 2020. (3) Encore Boston Harbor room statistics have been computed based on 89 days of operation in six months ended June 30, 2021 and 74 days of operation in six months ended June 30, 2020, representing the number of nights hotel rooms were offered for sale to the public. Room revenues increased $43.9 million, primarily due to higher occupancy at our Macau Operations and the closure of our Las Vegas Operations from March 17, 2020 until June 4, 2020, resulting from the adverse effects of the COVID-19 pandemic. Food and beverage revenues increased $44.2 million, primarily due to increased covers at our restaurants and an increase in nightlife offerings at our Las Vegas Operations as a result of ongoing recovery from the effects of COVID-19. Entertainment, retail and other revenues increased $60.5 million, primarily due to an increase in visitation to our Macau Operations as a result of ongoing recovery from the effects of COVID-19. 38 Table of Contents Operating expenses The table below presents operating expenses (in thousands): Six Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change Operating expenses: Casino $ 733,581 $ 573,828 $ 159,753 27.8 Rooms 84,087 103,847 (19,760) (19.0) Food and beverage 191,054 237,799 (46,745) (19.7) Entertainment, retail and other 154,381 62,453 91,928 147.2 General and administrative 377,319 386,409 (9,090) (2.4) Provision for credit losses 7,808 48,960 (41,152) (84.1) Pre-opening 4,122 4,737 (615) (13.0) Depreciation and amortization 368,428 358,012 10,416 2.9 Property charges and other 11,268 33,796 (22,528) (66.7) Total operating expenses $ 1,932,048 $ 1,809,841 $ 122,207 6.8 Total operating expenses increased $122.2 million compared to the six months ended June 30, 2020, primarily due to increased casino and entertainment, retail and other expenses, partially offset by decreased room, food and beverage, provision for credit losses, and property charges and other expenses. Casino expenses increased $87.5 million, $44.9 million, and $30.0 million at Wynn Palace, Wynn Macau, and Encore Boston Harbor, respectively, and decreased $2.6 million at our Las Vegas Operations. These increases were primarily due to increased gaming tax expense commensurate with the increase in casino revenues at each property, partially offset by lower payroll and operating costs at our Las Vegas Operations. Room expenses decreased $15.1 million and $4.0 million at our Las Vegas Operations and Encore Boston Harbor, respectively. The decreases were primarily a result of lower payroll and operating costs. Food and beverage expenses decreased $29.1 million and $14.4 million at our Las Vegas Operations and Encore Boston Harbor, respectively. The decreases were primarily a result of lower payroll and operating costs. Entertainment, retail and other expenses increased primarily due to marketing expenses incurred by Wynn Interactive. The increase was partially offset by a decrease in entertainment, retail and other expenses of $22.5 million at our Las Vegas Operations primarily as a result of lower operating costs. General and administrative expenses decreased primarily due to decreases of $8.3 million, $4.4 million, and $22.2 million at Wynn Palace, Wynn Macau, and our Las Vegas Operations, respectively. These decreases were primarily attributable to decreased payroll, operating costs, and general and administrative expenses as a result of the COVID-19 pandemic. These decreases were partially offset by an increase in corporate and other general and administrative expenses of $24.1 million, primarily due to a credit of $27.7 million for the net proceeds of a derivative action settlement recognized during the three months ended June 30, 2020. The provision for credit losses decreased $20.4 million, $15.2 million, and $3.5 million at our Las Vegas Operations, Wynn Palace, and Wynn Macau, respectively. The decreases were primarily due to the impact of historical collection patterns and expectations of current and future collection trends, as well as the specific review of customer accounts, on our estimated credit loss for the respective periods. For the six months ended June 30, 2021, pre-opening expenses totaled $4.1 million, which primarily related to restaurant remodels at our Las Vegas Operations. For the six months ended June 30, 2020, pre-opening expenses totaled $4.7 million, which primarily related to restaurant remodels at our Las Vegas Operations and the meeting and convention expansion at Wynn Las Vegas, which opened in February 2020. 39 Table of Contents Depreciation and amortization increased primarily due to increased depreciation and amortization expense incurred at Corporate and other and an increase in depreciation expense of $4.5 million at Encore Boston Harbor associated with equipment placed in service during the six months ended June 30, 2021. Our property charges and other expenses for the six months ended June 30, 2021 consisted primarily of asset abandonments of $3.5 million and $3.2 million at our Las Vegas Operations and Wynn Palace, respectively. Our property charges and other expenses for the six months ended June 30, 2020 consisted primarily of asset disposals, abandonments and retirements of $23.3 million and $3.9 million at Wynn Palace and Encore Boston Harbor, respectively. Interest expense, net of capitalized interest The following table summarizes information related to interest expense (dollars in thousands): Six Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change Interest expense Interest cost, including amortization of debt issuance costs and original issue discount and premium $ 303,276 $ 263,297 $ 39,979 15.2 Capitalized interest — (1,252) (1,252) (100.0) $ 303,276 $ 262,045 $ 41,231 15.7 Weighted average total debt balance $ 12,365,615 $ 11,496,999 Weighted average interest rate 4.90 % 4.57 % Interest costs increased primarily due to an increase in the weighted average debt balance and 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 loss of $5.5 million and a gain of $12.6 million for the six months ended June 30, 2021 and 2020, 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 $5.4 million and a loss of $19.0 million for the six months ended June 30, 2021 and 2020, respectively, from change in derivatives fair value. We recorded a $1.3 million loss on extinguishment of debt for the six months ended June 30, 2021 related to the partial prepayment of the Wynn Macau Term Loan. We recorded a $1.5 million loss on extinguishment of debt for the six months ended June 30, 2020 primarily related to the partial prepayment of the Wynn Macau Term Loan. Income taxes We recorded 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 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 allowances for U.S foreign tax credits and U.S. loss carryforwards. Net loss attributable to noncontrolling interests Net loss attributable to noncontrolling interests was $97.2 million and $145.5 million for the six months ended June 30, 2021 and 2020, respectively. These amounts are primarily related to the noncontrolling interests' share of net loss from WML. 40 Table of Contents Adjusted Property EBITDA We use Adjusted Property EBITDA to manage the operating results of our segments. 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. 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 17, "Segment Information." That footnote also presents a reconciliation of Adjusted Property EBITDA to net loss attributable to Wynn Resorts, Limited. Three Months Ended June 30, Six Months Ended June 30, 2021 2020 Increase/ (Decrease) Percent Change 2021 2020 Increase/ (Decrease) Percent Change Wynn Palace $ 53,555 $ (110,908) $ 164,463 NM $ 80,924 $ (100,732) $ 181,656 NM Wynn Macau 14,086 (82,646) 96,732 NM 30,642 (63,438) 94,080 NM Las Vegas Operations 133,222 (75,564) 208,786 NM 161,303 (97,641) 258,944 NM Encore Boston Harbor 46,916 (53,779) 100,695 NM 77,279 (66,415) 143,694 NM Corporate and other (40,899) — (40,899) NM (84,368) — (84,368) NM NM - Not meaningful. Adjusted Property EBITDA at Wynn Palace increased $164.5 million and $181.7 million for the three and six months ended June 30, 2021, respectively, primarily due to an increase in operating revenues, partially offset by an increase in operating expenses. Adjusted Property EBITDA at Wynn Macau increased $96.7 million and $94.1 million for the three and six months ended June 30, 2021, respectively, primarily due to an increase in operating revenues, partially offset by an increase in operating expenses. Adjusted Property EBITDA at our Las Vegas Operations increased $208.8 million for the three months ended June 30, 2021, primarily due to an increase in operating revenues, partially offset by an increase in operating expenses. Adjusted Property EBITDA at our Las Vegas Operations increased $258.9 million for the six months ended June 30, 2021, primarily due to an increase in operating revenues and a decrease in operating expenses. Our Las Vegas Operations closed to the public on March 17, 2020, and reopened on June 4, 2020 on a reduced basis. Adjusted Property EBITDA for our Las Vegas Operations for the second quarter of 2020 excluded the impact of $56.4 million of expense related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. 41 Table of Contents Adjusted Property EBITDA at Encore Boston Harbor increased $100.7 million and $143.7 million for the three and six months ended June 30, 2021, respectively, primarily due to an increase in operating revenues, partially offset by an increase in operating expenses. Encore Boston Harbor closed to the public on March 15, 2020, and remained closed through the second quarter of 2020. Adjusted Property EBITDA for Encore Boston Harbor for the second quarter of 2020 excluded the impact of $19.3 million of expense related to our commitment to pay salary, tips, and benefits continuation for all of our U.S. employees for the period from April 1 through May 15, 2020, which we accrued during the first quarter of 2020. Refer to the discussions above regarding the specific details of our results of operations. 42 Table of Contents Liquidity and Capital Resources Our cash flows were as follows (in thousands): Six Months Ended June 30, Cash Flows - Summary 2021 2020 Cash flows from 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 (Decrease) increase in cash, cash equivalents and restricted cash $ (677,299) $ 1,444,295 Operating Activities Our operating cash flows primarily consist of operating income (excluding depreciation and amortization and other non-cash charges), interest paid and earned, and changes in working capital accounts such as receivables, inventories, prepaid expenses, and payables. Our table games play is a mix of cash play and credit play, while our slot machine play is conducted primarily on a cash basis. A significant portion of our table games revenue is attributable to the play of a limited number of premium international customers who gamble on credit. The ability to collect these gaming receivables may impact our operating cash flow for the period. Our rooms, food and beverage, and entertainment, retail and other revenue is conducted on a cash and credit basis. Accordingly, operating cash flows will be impacted by changes in operating income and accounts receivable, net. During the six months ended June 30, 2021, the decrease in net cash used in operating activities was primarily due to increased operating revenues, partially offset by an increase in operating expenses and changes in working capital accounts. During the six months ended June 30, 2020, the decrease in net cash provided by operations was primarily due to the adverse effects of the COVID-19 pandemic on the results of our operations. Investing Activities Our investing activities primarily consist of project capital expenditures, such as the construction of the meeting and convention expansion at Wynn Las Vegas, which opened in February 2020, as well as maintenance capital expenditures 43 Table of Contents 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 temporarily postponed major project capital expenditures for 2020. During the six months ended June 30, 2021, we incurred capital expenditures of $54.6 million at our Las Vegas Operations primarily related to the Wynn Las Vegas room remodel, and $17.9 million at Encore Boston Harbor, $13.6 million at Wynn Palace, and $9.8 million at Wynn Macau primarily related to maintenance capital expenditures. During the six months ended June 30, 2020, we incurred capital expenditures of $48.1 million at Encore Boston Harbor primarily for the payment of construction retention and other payables related to its construction, $57.5 million at our Las Vegas Operations for restaurant remodels and maintenance capital expenditures, $23.1 million for the construction of the additional meeting and convention space at Wynn Las Vegas, and $27.5 million and $32.5 million at Wynn Palace and Wynn Macau, respectively, primarily related to maintenance capital expenditures. Financing Activities During the six months ended June 30, 2021, we received proceeds of $841.9 million from our February 2021 equity offering and used $716.0 million of the proceeds from the equity offering to repay the outstanding borrowings under the WRF Revolver. In addition, we borrowed $50.1 million under the Wynn Macau Revolver, paid $464.7 million of outstanding principal owed under the Wynn Macau Term Loan, and made quarterly amortization payments under the WRF Term Loan totaling $25.0 million. During the six months ended June 30, 2020, we issued $750.0 million aggregate principal amount of WML 5 1/2% Senior Notes due 2026, issued $600.0 million aggregate principal amount of WRF 7 3/4% Senior Notes due 2025, borrowed $376.0 million, net of amounts repaid, under the Wynn Macau Revolver, borrowed $816.0 million under the WRF Revolver, prepaid $150.2 million of outstanding principal owed under the Wynn Macau Term Loan, and made quarterly amortization payments under the WRF Term Loan totaling $25.0 million. In addition, we used cash of $108.1 million for the payment of dividends. Capital Resources The COVID-19 pandemic has impacted and will continue to impact, materially, our business, financial condition and results of operations. While we believe our strong liquidity position will enable us to fund our current obligations for the foreseeable future, COVID-19 has resulted in significant disruption, which has had and will continue to have a negative impact on our operating income and could have a negative impact on our ability to access capital in the future. We continue to monitor the rapidly evolving situation and guidance from international and domestic authorities. The following table summarizes our unrestricted cash and cash equivalents and available revolver borrowing capacity under the Company as of June 30, 2021 (in thousands): Total Cash and Cash Equivalents Revolver Borrowing Capacity Wynn Resorts (Macau) S.A. and subsidiaries $ 253,025 $ 293,211 Wynn Macau, Limited and subsidiaries (1) 1,469,212 — Wynn Resorts Finance, LLC (2) 272,277 834,195 Wynn Resorts, Limited and other 808,202 — Total $ 2,802,716 $ 1,127,406 (1) Excluding Wynn Resorts (Macau) S.A. and subsidiaries. (2) Excluding Wynn Macau, Limited and subsidiaries. Wynn Resorts (Macau) S.A. and subsidiaries. Wynn Resorts (Macau) S.A. ("Wynn Macau SA") generates cash from our Macau Operations and utilizes its revolver to fund short term working capital requirements as needed. We expect to use this cash to service our existing Wynn Macau Credit Facilities, make distributions to WML, and fund working capital and capital expenditure requirements at our Macau Operations. The Wynn Macau Credit Facilities contain customary negative and financial covenants, including, but not limited to, leverage ratio and interest coverage ratio tests (as defined in the Wynn Macau Credit Facilities) that could restrict its ability to 44 Table of Contents make distributions to WML and incur additional indebtedness. Wynn Macau SA is required to maintain a leverage ratio of not greater than 4.00 to 1 and an interest coverage ratio of not less than 2.00 to 1. Wynn Macau SA complied with these ratios for the three months ended June 30, 2021. In January 2021, Wynn Macau SA prepaid approximately $412.5 million of the term loan outstanding under the Wynn Macau Credit Facilities using proceeds from WML senior notes issuances. 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. The Company is currently designing the second phase of Wynn Palace. We do not expect to incur significant capital expenditures related to the construction of this project in 2021. 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 Senior Notes, pay dividends to shareholders of WML (of which we own approximately 72%), and fund working capital requirements at WML. WML paid no dividends during 2020 or the six months ended June 30, 2021. 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. If our portion of our cash and cash equivalents were repatriated to the U.S. on June 30, 2021, 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, 2029 WRF Notes, and WLV Notes, and to fund working capital and capital expenditure requirements as needed. 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. Wynn Las Vegas is currently undergoing its planned room remodel, which we temporarily postponed during 2020. We expect to incur between $150 million and $170 million of remaining project costs related to this remodel, which we expect to complete during the first quarter of 2022. The Company repaid $716.0 million of the outstanding borrowings under the WRF Revolver in February 2021, using proceeds from the February 2021 equity offering described below. 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 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 net proceeds from this equity offering to repay the outstanding borrowings under the WRF revolver in February 2021, and intends to use the remaining net proceeds for general corporate purposes. 45 Table of Contents 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 approximately 58% equity interest (and approximately 72% voting interest) in Wynn Interactive. We expect the assets of the combined business to include approximately $634.0 million of net cash currently held by Austerlitz I. 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. 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 Note 15, "Commitments and Contingencies." Our Board of Directors has authorized an equity repurchase program of up to $1.0 billion. Under the equity repurchase program, we may repurchase the Company's outstanding shares from time to time through open market purchases, in privately negotiated transactions, and under plans complying with Rules 10b5-1 and 10b-18 under the Exchange Act. As of June 30, 2021, we had $800.1 million in repurchase authority remaining under the program. We did not repurchase shares under the repurchase program during the six months ended June 30, 2021. 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, including related to COVID-19, may occur, resulting in the need to raise additional funds. We continue to explore opportunities to develop additional gaming or related businesses in domestic and international markets. There can be no assurances regarding the business prospects with respect to any other opportunity. Any new development may require us to obtain additional financing. We may decide to conduct any such development through Wynn Resorts, Limited or through subsidiaries separate from the Las Vegas, Boston or Macau-related entities. Off-Balance Sheet Arrangements We have not entered into any transactions with special purpose entities nor do we engage in any derivatives except for an interest rate collar associated with our Retail Term Loan. We do not have any retained or contingent interest in assets transferred to an unconsolidated entity. As of June 30, 2021, we had outstanding letters of credit totaling $15.8 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, 2020. There have been no significant changes to these policies for the six months ended June 30, 2021. Recently Adopted Accounting Standards and Accounting Standards Issued But Not Yet Adopted See related disclosure in Note 2, "Basis of Presentation and Significant Accounting Policies." 46 Table of Contents Forward-Looking Statements We make forward-looking statements in this Quarterly Report on Form 10-Q 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" of our Annual Report on Form 10-K for the year ended December 31, 2020 and other factors we describe from time to time in our periodic filings with the Securities and Exchange Commission ("SEC"), such as: • 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, including the renewal or extension of the concession in Macau that expires on June 26, 2022; • our dependence on key employees; • general global political and economic conditions, in the U.S. and China (including the Chinese government's ongoing anti-corruption campaign), which may impact levels of travel, leisure, and consumer spending; • restrictions or conditions on visitation by citizens of PRC to Macau; • the impact on the travel and leisure industry from factors such as an outbreak of an infectious disease, public incidents of violence, riots, demonstrations, extreme weather patterns or natural disasters, military conflicts, civil unrest, and any future security alerts and/or terrorist attacks; • doing business in foreign locations such as Macau; • our ability to maintain our customer relationships and collect and enforce gaming receivables; • our relationships with Macau gaming promoters; • our dependence on a limited number of resorts and locations for all of our cash flow and our subsidiaries' ability to pay us dividends and distributions; • competition in the casino/hotel and resort industries and actions taken by our competitors, including new development and construction activities of competitors; • factors affecting the development and success of new gaming and resort properties (including limited labor resources, government labor and gaming policies and transportation infrastructure in Macau; and cost increases, environmental regulation, and our ability to secure necessary permits and approvals in Everett, Massachusetts); • construction risks (including disputes with and defaults by contractors and subcontractors; construction, equipment or staffing problems; shortages of materials or skilled labor; environment, health and safety issues; and unanticipated cost increases); • legalization and growth of gaming in other jurisdictions; • any violations by us of the anti-money laundering laws or Foreign Corrupt Practices Act; • adverse incidents or adverse publicity concerning our resorts or our corporate responsibilities; • changes in gaming laws or regulations; • changes in federal, foreign, or state tax laws or the administration of such laws; • continued compliance with all provisions in our debt agreements; • conditions precedent to funding under our credit facilities; • leverage and debt service (including sensitivity to fluctuations in interest rates); • cybersecurity risk, including cyber and physical security breaches, system failure, computer viruses, and negligent or intentional misuse by customers, company employees, or employees of third-party vendors; • our ability to protect our intellectual property rights; and • our current and future insurance coverage levels. Further information on potential factors that could affect our financial condition, results of operations and business are included in this report and our other filings with the SEC. You should not place undue reliance on any forward-looking statements, which are based only on information available to us at the time this statement is made. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. 47 Table of Contents