WYNN RESORTS LTD 10-Q

Item 1. Financial Statements WYNN RESORTS, LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) September 30, 2022 December 31, 2021 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,943,505 $ 2,522,530 Restricted cash 5,036 4,896 Accounts receivable, net of allowance for credit losses of $ 81,208 and $ 111,319 210,032 199,463 Inventories 68,310 69,967 Prepaid expenses and other 96,524 79,061 Total current assets 2,323,407 2,875,917 Property and equipment, net 8,498,814 8,765,308 Restricted cash 154,125 3,641 Goodwill and intangible assets, net 250,901 307,578 Operating lease assets 347,902 371,365 Other assets 204,196 207,017 Total assets $ 11,779,345 $ 12,530,826 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts and construction payables $ 139,154 $ 170,542 Customer deposits 436,198 436,388 Gaming taxes payable 34,038 73,173 Accrued compensation and benefits 171,383 206,225 Accrued interest 145,268 132,877 Current portion of long-term debt 546,078 50,000 Other accrued liabilities 162,917 218,675 Total current liabilities 1,635,036 1,287,880 Long-term debt 11,570,438 11,884,546 Long-term operating lease liabilities 108,094 115,187 Other long-term liabilities 62,740 79,428 Total liabilities 13,376,308 13,367,041 Commitments and contingencies (Note 16) Stockholders' 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; 132,127,292 and 131,449,806 shares issued; 113,373,330 and 115,714,943 shares outstanding, respectively 1,321 1,314 Treasury stock, at cost; 18,753,871 and 15,734,863 shares, respectively ( 1,614,997 ) ( 1,436,373 ) Additional paid-in capital 3,584,357 3,502,715 Accumulated other comprehensive income 10,388 6,004 Accumulated deficit ( 2,744,222 ) ( 2,288,078 ) Total Wynn Resorts, Limited stockholders' deficit ( 763,153 ) ( 214,418 ) Noncontrolling interests ( 833,810 ) ( 621,797 ) Total stockholders' deficit ( 1,596,963 ) ( 836,215 ) Total liabilities and stockholders' deficit $ 11,779,345 $ 12,530,826 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating revenues: Casino $ 359,876 $ 496,264 $ 1,209,323 $ 1,615,228 Rooms 197,212 173,817 568,886 387,772 Food and beverage 224,730 217,501 628,566 435,152 Entertainment, retail and other 107,904 107,062 345,113 283,287 Total operating revenues 889,722 994,644 2,751,888 2,721,439 Operating expenses: Casino 239,901 315,316 808,044 1,048,897 Rooms 67,689 52,100 191,474 136,187 Food and beverage 185,388 163,655 517,515 354,709 Entertainment, retail and other 72,964 156,490 236,853 310,871 General and administrative 201,275 197,350 598,433 574,669 Provision for credit losses ( 8,186 ) ( 347 ) ( 11,331 ) 7,461 Pre-opening 6,447 1,333 13,396 5,455 Depreciation and amortization 172,502 177,110 520,026 545,538 Property charges and other 4,733 15,301 77,362 26,569 Total operating expenses 942,713 1,078,308 2,951,772 3,010,356 Operating loss ( 52,991 ) ( 83,664 ) ( 199,884 ) ( 288,917 ) Other income (expense): Interest income 6,892 507 10,863 2,131 Interest expense, net of amounts capitalized ( 165,277 ) ( 150,325 ) ( 472,265 ) ( 453,601 ) Change in derivatives fair value 5,839 1,176 14,801 6,557 Loss on extinguishment of debt — ( 738 ) — ( 2,060 ) Other ( 864 ) ( 11,784 ) ( 26,090 ) ( 17,324 ) Other income (expense), net ( 153,410 ) ( 161,164 ) ( 472,691 ) ( 464,297 ) Loss before income taxes ( 206,401 ) ( 244,828 ) ( 672,575 ) ( 753,214 ) Provision for income taxes ( 1,390 ) ( 1,155 ) ( 3,248 ) ( 2,345 ) Net loss ( 207,791 ) ( 245,983 ) ( 675,823 ) ( 755,559 ) Less: net loss attributable to noncontrolling interests 64,899 79,734 219,556 176,963 Net loss attributable to Wynn Resorts, Limited $ ( 142,892 ) $ ( 166,249 ) $ ( 456,267 ) $ ( 578,596 ) Basic and diluted net loss per common share: Net loss attributable to Wynn Resorts, Limited: Basic $ ( 1.27 ) $ ( 1.45 ) $ ( 4.00 ) $ ( 5.10 ) Diluted $ ( 1.27 ) $ ( 1.45 ) $ ( 4.00 ) $ ( 5.10 ) Weighted average common shares outstanding: Basic 112,709 114,655 114,061 113,420 Diluted 112,709 114,655 114,061 113,420 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net loss $ ( 207,791 ) $ ( 245,983 ) $ ( 675,823 ) $ ( 755,559 ) Other comprehensive income (loss): Foreign currency translation adjustments, before and after tax 732 ( 2,863 ) 6,213 879 Total comprehensive loss ( 207,059 ) ( 248,846 ) ( 669,610 ) ( 754,680 ) Less: comprehensive loss attributable to noncontrolling interests 64,726 80,423 217,727 176,599 Comprehensive loss attributable to Wynn Resorts, Limited $ ( 142,333 ) $ ( 168,423 ) $ ( 451,883 ) $ ( 578,081 ) 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' DEFICIT (in thousands, except share data) (unaudited) For the Three Months Ended September 30, 2022 Common stock Shares outstanding Par value Treasury stock Additional paid-in capital Accumulated other comprehensive income Accumulated deficit Total Wynn Resorts, Ltd. stockholders' deficit Noncontrolling interests Total stockholders' deficit Balances, July 1, 2022 113,707,642 $ 1,320 $ ( 1,585,678 ) $ 3,566,498 $ 9,829 $ ( 2,601,331 ) $ ( 609,362 ) $ ( 764,892 ) $ ( 1,374,254 ) Net loss — — — — — ( 142,892 ) ( 142,892 ) ( 64,899 ) ( 207,791 ) Currency translation adjustment — — — — 559 — 559 173 732 Issuance of restricted stock 166,424 1 — ( 1 ) — — — — — Cancellation of restricted stock ( 3,674 ) — — — — — — — — Shares repurchased by the Company and held as treasury shares ( 497,062 ) — ( 29,319 ) — — — ( 29,319 ) — ( 29,319 ) Distribution to noncontrolling interest — — — — — — — ( 4,982 ) ( 4,982 ) Subsidiary equity issuance — — — 1,627 — — 1,627 ( 1,627 ) — Stock-based compensation — — — 16,233 — 1 16,234 2,417 18,651 Balances, September 30, 2022 113,373,330 $ 1,321 $ ( 1,614,997 ) $ 3,584,357 $ 10,388 $ ( 2,744,222 ) $ ( 763,153 ) $ ( 833,810 ) $ ( 1,596,963 ) For the Three Months Ended September 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, July 1, 2021 115,683,983 $ 1,313 $ ( 1,427,094 ) $ 3,466,908 $ 6,293 $ ( 1,944,668 ) $ 102,752 $ ( 456,591 ) $ ( 353,839 ) Net loss — — — — — ( 166,249 ) ( 166,249 ) ( 79,734 ) ( 245,983 ) Currency translation adjustment — — — — ( 2,174 ) — ( 2,174 ) ( 689 ) ( 2,863 ) Issuance of restricted stock 48,435 1 — ( 1 ) — — — — — Cancellation of restricted stock ( 5,224 ) — — — — 22 22 4 26 Shares repurchased by the Company and held as treasury shares ( 68,376 ) — ( 6,441 ) — — — ( 6,441 ) — ( 6,441 ) Distribution to noncontrolling interest — — — — — — — ( 5,364 ) ( 5,364 ) Stock-based compensation — — — 18,852 — — 18,852 3,023 21,875 Balances, September 30, 2021 115,658,818 $ 1,314 $ ( 1,433,535 ) $ 3,485,759 $ 4,119 $ ( 2,110,895 ) $ ( 53,238 ) $ ( 539,351 ) $ ( 592,589 ) 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' DEFICIT (in thousands, except share data) (unaudited) For the Nine Months Ended September 30, 2022 Common stock Shares outstanding Par value Treasury stock Additional paid-in capital Accumulated other comprehensive income Accumulated deficit Total Wynn Resorts, Ltd. stockholders' deficit Noncontrolling interests Total stockholders' deficit Balances, January 1, 2022 115,714,943 $ 1,314 $ ( 1,436,373 ) $ 3,502,715 $ 6,004 $ ( 2,288,078 ) $ ( 214,418 ) $ ( 621,797 ) $ ( 836,215 ) Net loss — — — — — ( 456,267 ) ( 456,267 ) ( 219,556 ) ( 675,823 ) Currency translation adjustment — — — — 4,384 — 4,384 1,829 6,213 Issuance of restricted stock 763,660 8 — 9,280 — — 9,288 — 9,288 Cancellation of restricted stock ( 86,174 ) ( 1 ) — 1 — — — — — Shares repurchased by the Company and held as treasury shares ( 3,019,099 ) — ( 178,624 ) — — — ( 178,624 ) — ( 178,624 ) Distribution to noncontrolling interest — — — — — — — ( 21,505 ) ( 21,505 ) Contribution from noncontrolling interest — — — 48,559 — — 48,559 1,474 50,033 Subsidiary equity issuance — — — ( 15,123 ) — — ( 15,123 ) 18,019 2,896 Stock-based compensation — — — 38,925 — 123 39,048 7,726 46,774 Balances, September 30, 2022 113,373,330 $ 1,321 $ ( 1,614,997 ) $ 3,584,357 $ 10,388 $ ( 2,744,222 ) $ ( 763,153 ) $ ( 833,810 ) $ ( 1,596,963 ) For the Nine Months Ended September 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 — — — — — ( 578,596 ) ( 578,596 ) ( 176,963 ) ( 755,559 ) Currency translation adjustment — — — — 515 — 515 364 879 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 428,406 4 — 5,898 — — 5,902 370 6,272 Cancellation of restricted stock ( 24,758 ) — — — — 121 121 19 140 Shares repurchased by the Company and held as treasury shares ( 108,166 ) — ( 11,004 ) — — — ( 11,004 ) — ( 11,004 ) Distribution to noncontrolling interest — — — — — — — ( 11,843 ) ( 11,843 ) Subsidiary equity issuance — — — ( 20,211 ) — — ( 20,211 ) 25,371 5,160 Stock-based compensation — — — 60,136 — — 60,136 8,651 68,787 Balances, September 30, 2021 115,658,818 $ 1,314 $ ( 1,433,535 ) $ 3,485,759 $ 4,119 $ ( 2,110,895 ) $ ( 53,238 ) $ ( 539,351 ) $ ( 592,589 ) 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) Nine Months Ended September 30, 2022 2021 Cash flows from operating activities: Net loss $ ( 675,823 ) $ ( 755,559 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 520,026 545,538 Deferred income taxes 1,188 ( 527 ) Stock-based compensation expense 48,569 75,033 Amortization of debt issuance costs 21,859 19,891 Loss on extinguishment of debt — 2,060 Provision for credit losses ( 11,331 ) 7,461 Change in derivatives fair value ( 14,801 ) ( 6,557 ) Property charges and other 103,452 43,893 Increase (decrease) in cash from changes in: Receivables, net 341 ( 29,729 ) Inventories, prepaid expenses and other ( 7,199 ) ( 38,377 ) Customer deposits 1,731 ( 178,959 ) Accounts payable and accrued expenses ( 141,050 ) 99,000 Net cash used in operating activities ( 153,038 ) ( 216,832 ) Cash flows from investing activities: Capital expenditures, net of construction payables and retention ( 273,251 ) ( 213,088 ) Purchase of intangible and other assets ( 10,919 ) ( 19,741 ) Proceeds from sale of assets and other 485 3,689 Net cash used in investing activities ( 283,685 ) ( 229,140 ) Cash flows from financing activities: Proceeds from issuance of long-term debt 211,435 1,141,026 Repayments of long-term debt ( 37,500 ) ( 2,477,690 ) Proceeds from issuance of Wynn Resorts, Limited common stock — 841,896 Repurchase of common stock ( 178,624 ) ( 11,004 ) Proceeds from issuance of subsidiary common stock 2,895 4,662 Proceeds from sale of additional interest in joint venture 50,033 — Distribution to noncontrolling interest ( 21,505 ) ( 11,843 ) Dividends paid ( 1,316 ) ( 932 ) Finance lease payments ( 12,812 ) ( 11,709 ) Payments for financing costs ( 3,165 ) ( 29,975 ) Net cash provided by (used in) financing activities 9,441 ( 555,569 ) Effect of exchange rate on cash, cash equivalents and restricted cash ( 1,119 ) ( 1,689 ) Cash, cash equivalents and restricted cash: Decrease in cash, cash equivalents and restricted cash ( 428,401 ) ( 1,003,230 ) Balance, beginning of period 2,531,067 3,486,384 Balance, end of period $ 2,102,666 $ 2,483,154 Supplemental cash flow disclosures: Cash paid for interest, net of amounts capitalized $ 437,760 $ 426,462 Liability settled with shares of common stock $ 9,287 $ 6,272 Accounts and construction payables related to property and equipment $ 27,603 $ 70,844 Other liabilities related to intangible assets $ 4,163 $ 12,335 Finance lease liabilities arising from obtaining finance lease assets $ 4,778 $ 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 ("Macau") of the People's Republic of China ("PRC"), 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. In Everett, Massachusetts, the Company owns 100 % of and operates Encore Boston Harbor, an integrated resort. The Company also holds an approximately 85 % interest in, and consolidates, Wynn Interactive Ltd. ("Wynn Interactive"), through which it operates online sports betting, gaming, and social casino businesses. Recent Developments Related to COVID-19 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 put in place in Macau and elsewhere, travel and entry restrictions and conditions in Macau, the PRC, Hong Kong and Taiwan involving COVID-19 testing, and mandatory quarantine, among other things, and the suspension or reduced accessibility of transportation to and from Macau. Although there have been periods during which certain restrictions and conditions were eased by the Macau government to allow for greater visitation and quarantine-free travel to Macau, adverse and evolving conditions created by and in response to the COVID-19 pandemic may cause these restrictions and conditions to be reintroduced. For example, in response to an outbreak in Macau which initially commenced in mid-June 2022, the Macau government extended its COVID-19 containment measures, which included the closures of gaming operations in full as of July 11, 2022, and the closure and the limiting of the opening hours and/or operational capacity of various areas and facilities in Macau. On July 23, 2022, gaming operations at Wynn Palace and Wynn Macau resumed on a limited basis. Certain travel-related restrictions and conditions, which continue to reduce visitation and impact our financial results, remain in effect at the present time. 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 containment measures, management cannot predict whether future closures, in full or in part, will occur in our properties, and cannot reasonably estimate the impact to the Company's future results of operations, cash flows, or financial condition. Liquidity The COVID-19 pandemic has materially impacted and is likely to continue to materially impact our business, financial condition and results of operations. As of September 30, 2022, the Company had total cash and cash equivalents, excluding restricted cash, of $ 1.94 billion, and $ 835.6 million of available borrowing capacity under the WRF Revolver. As of September 30, 2022, the WM Cayman II Revolver was fully drawn. As a result of the negative impact the COVID-19 pandemic has had, and will likely continue to have, on our operating income, the Company has suspended its dividend program for the foreseeable future. Given the Company's liquidity position as of September 30, 2022, the Company believes it will be able to support continuing operations and respond to the continuing impact of the COVID-19 pandemic and related economic disruptions. Macau Gaming Concession On June 23, 2022, Wynn Resorts (Macau) S.A. ("WRM") and the Macau government entered into a concession extension agreement (the "Concession Extension Agreement"), pursuant to which the expiration date of WRM's gaming concession was extended from June 26, 2022 to Decem ber 31, 2022. Under the Concession Extension Agreement, WRM paid the Macau government MOP 47.0 million (approximately $ 6.0 million) as a contract premium for the extension, and in September 2022 provided a first demand bank guarantee of MOP 1,210.0 million (approximately $ 149.7 million) in favor of the Macau government for securing the fulfillment of its labor liabilities upon the expiration of the Concession Extension Agreement. 9 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) In order to enable WRM to fulfill the relevant requirements to become eligible to obtain a concession extension, each of WRM and Palo Real Estate Company Limited ("Palo") (the land concessionaires of Wynn Macau and Wynn Palace, respectively) entered into a letter of undertaking, pursuant to which each of WRM and Palo has undertaken, pursuant to Article 40 of the Macau gaming law and Clause 43 of the concession agreement, to revert to the Macau government relevant gaming equipment and gaming areas at Wynn Macau and Wynn Palace, without compensation and free of encumbrance upon the expiration of the concession agreement term, as amended by the Concession Extension Agreement. Under the indentures governing the Company’s $ 4.7 billion aggregate principal amount of WML Senior Notes and the facility agreement governing the WM Cayman II Revolver, upon the occurrence of any event after which the Company does not own or manage casino or gaming areas or operate casino games of fortune and chance in Macau in substantially the same manner and scope as of the issue date of the respective senior notes or the date of the facility agreement, for a period of 10 consecutive days or more in the case of the WML Senior Notes or a period of 30 consecutive days or more in the case of the WM Cayman II Revolver, 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"), and any amounts owed under the WM Cayman II Revolver may become immediately due and payable (the "Property Mandatory Prepayment Event"). In June 2022, the Macau government published amendments to the Macau gaming law approved by the Macau Legislative Assembly. These amendments include, for example, the awarding of up to six gaming concessions with a term up to ten years with a maximum three-year extension possible, and an increase in the minimum capital requirement applicable to concession holders to MOP 5.0 billion (approximately $ 625.0 million), an increase in the percentage of the share capital of the concessionaire that must be held by the local managing director to 15 % from 10 % and a prohibition on revenue sharing arrangements between gaming promoters and concession holders. On July 27, 2022, the Macau government officially launched the public tender process for the awarding of concessions for the operation of games of chance or other games in casinos. On September 13, 2022, WRM submitted its tender to the Macau government. At this time the Company believes that its concession agreement will be further extended, renewed or replaced by a new gaming concession agreement beyond December 31, 2022. However, it is possible the Macau government could further change or interpret the associated gaming laws in a manner that could negatively impact the Company. If the Company is unable to further extend or renew its concession agreement or obtain a new gaming concession agreement, an election by the WML Senior Notes holders to exercise the Special Put Option and the triggering of the Property Mandatory Prepayment Event would have a material adverse effect on the Company’s business, financial condition, results of operations, and cash flows. 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 nine months ended September 30, 2022 are not necessarily indicative of results to be expected for any other interim period or the full fiscal year ending December 31, 2022. 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, 2021. 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 17, "Retail Joint Venture." All significant intercompany accounts and transactions have been eliminated. 10 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) 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 $ 105.2 million and $ 188.7 million for the three months ended September 30, 2022 and 2021, respectively, and $ 388.4 million and $ 637.9 million for the nine months ended September 30, 2022 and 2021, 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 planned 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 must be adopted no later than December 1, 2022 with early adoption permitted. We plan to apply this guidance to applicable contracts and instruments if, and when, they are modified. Adoption of the new guidance is not expected to have a material effect on the Company's consolidated financial statements. Note 3 - Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash consisted of the following (in thousands): September 30, 2022 December 31, 2021 Cash and cash equivalents: Cash (1) $ 1,239,629 $ 2,021,553 Cash equivalents (2) 703,876 500,977 Total cash and cash equivalents 1,943,505 2,522,530 Restricted cash (3) 159,161 8,537 Total cash, cash equivalents and restricted cash $ 2,102,666 $ 2,531,067 (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, cash held in a trust in accordance with WML's share award plan, and as of September 30, 2022 includes $ 149.7 million in the form of a bank guarantee in favor of the Macau government for securing the fulfillment of its labor liabilities upon the expiration of the Concession Extension Agreement. 11 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Note 4 - Receivables, net Accounts Receivable and Credit Risk Receivables, net consisted of the following (in thousands): September 30, 2022 December 31, 2021 Casino $ 186,037 $ 199,030 Hotel 34,606 36,749 Other 70,597 75,003 291,240 310,782 Less: allowance for credit losses ( 81,208 ) ( 111,319 ) $ 210,032 $ 199,463 As of September 30, 2022 and December 31, 2021, approximately 65.6 % and 70.3 %, 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 41.7 % and 53.7 % of gross casino receivables as of September 30, 2022 and December 31, 2021, 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 periods presented (in thousands): September 30, 2022 2021 Balance at beginning of year $ 111,319 $ 100,329 Provision for credit losses ( 11,331 ) 7,461 Write-offs ( 22,507 ) ( 14,022 ) Recoveries of receivables previously written off 4,103 736 Effect of exchange rate ( 376 ) ( 195 ) Balance at end of period $ 81,208 $ 94,309 Note 5 - Property and Equipment, net Property and equipment, net consisted of the following (in thousands): September 30, 2022 December 31, 2021 Buildings and improvements $ 9,833,144 $ 9,785,514 Land and improvements 1,297,539 1,278,010 Furniture, fixtures and equipment 3,111,425 3,067,793 Airplanes 110,623 110,623 Construction in progress 224,521 250,378 14,577,252 14,492,318 Less: accumulated depreciation ( 6,078,438 ) ( 5,727,010 ) $ 8,498,814 $ 8,765,308 12 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) As of September 30, 2022, construction in progress consisted primarily of costs capitalized for various capital enhancements at the Company's properties, including reconfiguring the theater space at Wynn Las Vegas to host an all-new, exclusive theatrical production, Awakening , which premiered in November 2022. As of December 31, 2021, construction in progress consisted primarily of costs capitalized for various capital enhancements at the Company's properties, including the Wynn Las Vegas room remodel, which was placed in service during the second quarter of 2022. Depreciation expense for the three months ended September 30, 2022 and 2021 was $ 161.7 million and $ 169.7 million, respectively, and depreciation expense for the nine months ended September 30, 2022 and 2021 was $ 492.1 million and $ 523.6 million, respectively. Encore Boston Harbor Real Estate Sale and Leaseback On February 14, 2022, Wynn MA, LLC, the owner and operator of Encore Boston Harbor and an indirect, wholly owned subsidiary of WRL (“Wynn MA”), entered into a sale-leaseback arrangement with respect to certain real estate assets related to Encore Boston Harbor. Upon closing of the related transactions, which is currently expected to take place in the fourth quarter of 2022 subject to the receipt of required regulatory approvals and customary closing conditions, the Company expects to receive cash consideration of approximately $ 1.7 billion in exchange for the sale of such real estate assets to an unrelated third party, and to concurrently enter into a master lease agreement whereby Wynn MA and certain of its affiliates will lease such real estate assets for the purpose of continuing to operate the Encore Boston Harbor property. The master lease agreement provides for an initial annual rent of $ 100.0 million for a term of 30 years with one 30-year renewal option, subject to certain annual rent escalations. The Company expects to use the cash proceeds from the sale of the real estate assets for general corporate purposes, which may include the repayment of certain debt obligations. 13 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Note 6 - Goodwill and Intangible Assets, net The following table shows the movement in the Company's goodwill and intangible assets balances that occurred during the periods presented (in thousands): September 30, 2022 December 31, 2021 Finite-lived intangible assets: Macau gaming concession $ 5,964 $ 42,300 Less: accumulated amortization ( 2,982 ) ( 41,114 ) 2,982 1,186 Massachusetts gaming license 117,700 117,700 Less: accumulated amortization ( 25,676 ) ( 19,791 ) 92,024 97,909 Other finite-lived intangible assets 63,717 76,317 Less: accumulated amortization ( 6,738 ) ( 5,969 ) 56,979 70,348 Total finite-lived intangible assets 151,985 169,443 Indefinite-lived intangible assets: Water rights and other 8,397 8,397 Total indefinite-lived intangible assets 8,397 8,397 Goodwill: Balance at beginning of year 129,738 144,095 Foreign currency translation ( 1,458 ) ( 4,103 ) Impairment ( 37,761 ) ( 10,254 ) Balance at end of period 90,519 129,738 Total goodwill and intangible assets, net $ 250,901 $ 307,578 The finite-lived intangible asset pertaining to the Company's original Macau gaming concession was acquired in 2004 and was amortized over the 20 year life of the original concession, which expired on June 26, 2022. On June 23, 2022, a Concession Extension Agreement was entered into between the Macau Government and WRM, pursuant to which the gaming concession of WRM has been extended from June 26, 2022 to December 31, 2022, in exchange for a payment to the Macau government equivalent to $ 6.0 million. The Company expects that amortization of the Macau gaming concession will be $ 3.0 million for the fourth quarter of 2022. The Massachusetts gaming license is a finite-lived intangible asset that is being amortized over the 15 year life of the license. The Company expects that amortization of the Massachusetts gaming license will be $ 2.0 million for the fourth quarter of 2022, $ 7.8 million each year from 2023 through 2033, and $ 3.8 million in 2034. During the three months ended June 30, 2022, as a result of management's decision to cease the operations of Betbull Limited ("BetBull"), a subsidiary of Wynn Interactive, the Company impaired its trademark and customer list totaling $ 10.3 million and impaired the remaining balance of goodwill related to the BetBull reporting unit totaling $ 7.5 million. During the three months ended March 31, 2022, as a result of changes in forecasts and other industry-specific factors, the Company identified interim indicators of impairment related to the goodwill assigned to the reporting units comprising Wynn 14 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Interactive. After revisiting the estimated fair value of those reporting units based on a combination of the income and market approaches, the Company recognized impairment of $ 30.3 million. Impairment of goodwill and intangible assets is recorded in Property charges and other in the accompanying Condensed Consolidated Statements of Operations. Note 7 - Long-Term Debt Long-term debt consisted of the following (in thousands): September 30, 2022 December 31, 2021 Macau Related: WM Cayman II Revolver, due 2025 (1) $ 1,492,465 $ 1,287,766 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 (2) : WRF Term Loan, due 2024 850,000 887,500 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 (3) 615,000 615,000 12,167,465 12,000,266 Less: Unamortized debt issuance costs and original issue discounts and premium, net ( 50,949 ) ( 65,720 ) 12,116,516 11,934,546 Less: Current portion of long-term debt ( 546,078 ) ( 50,000 ) Total long-term debt, net of current portion $ 11,570,438 $ 11,884,546 (1) The borrowings under the WM Cayman II Revolver bear interest at LIBOR or HIBOR plus a margin of 1.875 % to 2.875 % per annum based on WM Cayman II’s leverage ratio on a consolidated basis, subject to a floor on the interest rate margin of 2.625 % per annum through June 30, 2023. Approximately $ 312.5 million and $ 1.18 billion of the WM Cayman II Revolver bears interest at a rate of LIBOR plus 2.875 % per year and HIBOR plus 2.875 % per year, respectively. As of September 30, 2022, the weighted average interest rate was approximately 5.51 %. As of September 30, 2022, the WM Cayman II Revolver was fully drawn. (2) The WRF Credit Facilities bear interest at a rate of LIBOR plus 1.75 % per year. As of September 30, 2022, the weighted average interest rate was approximately 4.87 %. Additionally, as of September 30, 2022, the available borrowing capacity under the WRF Revolver was $ 835.6 million, net of $ 14.4 million in outstanding letters of credit. (3) The Retail Term Loan bears interest at a rate of LIBOR plus 1.70 % per year. As of September 30, 2022, the interest rate was 4.26 %. WM Cayman II Revolver Amendment On May 5, 2022, WM Cayman II and its lenders agreed to waive certain financial covenants in the facility agreement under the WM Cayman II Revolver in respect of the relevant periods ending on the following applicable test dates: (a) June 30, 2022; (b) September 30, 2022; (c) December 31, 2022; and (d) March 31, 2023; and to provide for a floor on the interest rate margin of 2.625 % per annum through June 30, 2023. WML , as guarantor, may be subject to certain restrictions on payments of dividends or distributions to its shareholders, unless certain financial criteria have been satisfied through the facility agreement. Debt Covenant Compliance As of September 30, 2022, management believes the Company was in compliance with all debt covenants. 15 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Fair Value of Long-Term Debt The estimated fair value of the Company's long-term debt as of September 30, 2022 and December 31, 2021, was approximately $ 10.37 billion and $ 11.72 billion, respectively, compared to its carrying value, excluding debt issuance costs and original issue discount and premium, of $ 12.17 billion and $ 12.00 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' Deficit Equity Repurchase Program In April 2016, the Company's Board of Directors authorized an equity repurchase program of up to $ 1.0 billion, which may include repurchases by the Company of its common stock from time to time through open market purchases, privately negotiated transactions, and under plans complying with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. During the three and nine months ended September 30, 2022, the Company repurchased 491,503 and 2,873,431 shares of its common stock, respectively, at average prices of $ 58.95 and $ 57.91 per share, respectively, for an aggregate cost of $ 29.0 million and $ 166.4 million, respectively, under the equity repurchase program. Any shares repurchased pursuant to the equity repurchase program are held as treasury shares. During the three and nine months ended September 30, 2021, no repurchases were made under the equity repurchase program. As of September 30, 2022, the Company had $ 633.7 million in repurchase authority remaining under the program. 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 and commissions. The Company used the net proceeds from this equity offering for general corporate purposes, including the repayment of debt. Noncontrolling Interests Retail Joint Venture During the nine months ended September 30, 2022 and 2021, the Retail Joint Venture made aggregate distributions of approximately $ 21.5 million and $ 11.8 million, respectively, to its non-controlling interest holder. For more information on the Retail Joint Venture, see Note 17, "Retail Joint Venture". During the three months ended March 31, 2022, in exchange for cash consideration of $ 50.0 million, the Company sold to Crown Acquisitions Inc. ("Crown") a 49.9 % interest in certain additional retail space contributed by the Company to the Retail Joint Venture. In connection with this transaction, the Company recorded $ 48.6 million of additional paid-in capital and $ 1.5 million of noncontrolling interest, within Contribution from noncontrolling interest in the accompanying Condensed Consolidated Statement of Stockholders' Deficit for the nine months ended September 30, 2022 . 16 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: September 30, 2022 Quoted Market Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Cash equivalents $ 703,875 $ — $ 703,875 $ — Restricted cash $ 159,161 $ 7,096 $ 152,065 $ — Interest rate collar $ 9,254 $ — $ 9,254 $ — Fair Value Measurements Using: December 31, 2021 Quoted Market Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Cash equivalents $ 500,977 $ — $ 500,977 $ — Restricted cash $ 8,537 $ 6,950 $ 1,587 $ — Liabilities: Interest rate collar $ 5,548 $ — $ 5,548 $ — 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): September 30, 2022 December 31, 2021 Increase / (decrease) September 30, 2021 December 31, 2020 Increase / (decrease) Casino outstanding chips and front money deposits (1) $ 327,004 $ 352,830 $ ( 25,826 ) $ 380,442 $ 596,463 $ ( 216,021 ) Advance room deposits and ticket sales (2) 76,256 55,438 20,818 62,993 29,224 33,769 Other gaming-related liabilities (3) 30,610 26,515 4,095 21,217 7,882 13,335 Loyalty program and related liabilities (4) 38,323 34,695 3,628 33,440 22,736 10,704 $ 472,193 $ 469,478 $ 2,715 $ 498,092 $ 656,305 $ ( 158,213 ) (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. 17 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 September 30, Nine months ended September 30, 2022 2021 2022 2021 Casino $ 3,857 $ 3,423 $ 8,835 $ 11,000 Rooms 415 351 816 1,260 Food and beverage 774 737 1,547 2,709 Entertainment, retail and other 3,064 7,071 8,238 16,292 General and administrative 11,964 13,998 29,133 43,772 Total stock-based compensation expense 20,074 25,580 48,569 75,033 Total stock-based compensation capitalized 894 2,242 2,351 4,271 Total stock-based compensation costs $ 20,968 $ 27,822 $ 50,920 $ 79,304 Note 12 - Income Taxes The Company recorded an income tax expense of $ 1.4 million and $ 1.2 million for the three months ended September 30, 2022 and 2021, respectively and an income tax expense of $ 3.2 million and $ 2.3 million for the nine months ended September 30, 2022 and 2021, respectively. Income tax expense in 2022 primarily related to changes in U.S. deferred taxes. Income tax expense in 2021 primarily related to the Macau dividend tax agreement that provides for an annual payment as complementary tax otherwise due by stockholders of WRM. 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 ended June 26, 2022. The Company records valuation allowances on certain of its U.S. and foreign deferred tax assets. 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, WRM 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. In September 2022, WRM received an extension of the exemption from the Complementary Tax on casino gaming profits through December 31, 2022. For the three and nine months ended September 30, 2022 and 2021, 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 gaming concession agreement. In March 2021, the Financial Services Bureau concluded its review of the 2017 and 2018 Macau income tax returns of Palo Real Estate Company Limited, a subsidiary of WRM, with no changes. In January 2022, the Financial Services Bureau issued final tax assessments for WRM for the year 2017 and 2018, and no additional tax was due. In October 2022, the Financial Services Bureau issued final tax assessments for Palo’s 2019 and 2020 Macau Complementary Tax returns, and no additional tax was due. 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. 18 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) 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 September 30, Nine months ended September 30, 2022 2021 2022 2021 Numerator: Net loss attributable to Wynn Resorts, Limited $ ( 142,892 ) $ ( 166,249 ) $ ( 456,267 ) $ ( 578,596 ) Denominator: Weighted average common shares outstanding 112,709 114,655 114,061 113,420 Potential dilutive effect of stock options, nonvested, and performance nonvested shares — — — — Weighted average common and common equivalent shares outstanding 112,709 114,655 114,061 113,420 Net loss attributable to Wynn Resorts, Limited per common share, basic $ ( 1.27 ) $ ( 1.45 ) $ ( 4.00 ) $ ( 5.10 ) Net loss attributable to Wynn Resorts, Limited per common share, diluted $ ( 1.27 ) $ ( 1.45 ) $ ( 4.00 ) $ ( 5.10 ) Anti-dilutive stock options, nonvested, and performance nonvested shares excluded from the calculation of diluted net income per share 1,087 954 1,087 954 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 September 30, Nine months ended September 30, 2022 2021 2022 2021 Minimum rental income $ 31,962 $ 27,719 $ 93,796 $ 75,676 Contingent rental income 10,689 19,349 45,404 75,464 Total rental income $ 42,651 $ 47,068 $ 139,200 $ 151,140 Note 15 - Related Party Transactions Home Purchase In 2022, Linda Chen, President and Executive Director of WRM exercised an option to purchase a home provided by the Company for her use for no consideration, as provided by the terms of her employment agreement. Based on a third-party appraisal as of the date of option exercise, the estimated fair value of the home is $ 6.4 million. The home purchase closed during the third quarter of 2022. Note 16 - 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. 19 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Macau Litigation Related to Dore WRM has been named as a defendant in lawsuits filed in the Macau Court of First Instance by individuals who claim to be investors in, or persons with credit in accounts maintained by, Dore Entertainment Company Limited ("Dore"), an independent, Macau registered and licensed company that operated a gaming promoter business at Wynn Macau. In connection with the alleged theft, embezzlement, fraud and/or other crime(s) perpetrated by a former employee of Dore (the “Dore Incident”), the plaintiffs of the lawsuits allege that Dore failed to honor withdrawal of funds deposited with Dore as investments or gaming deposits that allegedly resulted in certain losses for these individuals. The principal allegations common to the lawsuits are that WRM, as a gaming concessionaire, should be held responsible for Dore’s conduct on the basis that WRM is responsible for the supervision of Dore’s activities at Wynn Macau that resulted in the purported losses. The Company believes these cases are without merit and unfounded and intends to vigorously defend against the remaining claims pleaded against WRM in these lawsuits. The Company has made estimates for potential litigation costs based upon its assessment of the likely outcome and has recorded provisions for such amounts in the accompanying condensed consolidated financial statements. No assurances can be provided as to the outcome of the pending Dore cases, and actual results may differ from these estimates. 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 former executive officers, including Mr. Maddox, Stephen A. Wynn, Kimmarie Sinatra, and Steven Cootey. The defendants in this action intend to vigorously defend against the claims pleaded against them. This action is in the 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 reasonably estimate the range of 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 beginning in 2020 received several 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 17 - Retail Joint Venture As of September 30, 2022 and December 31, 2021, the Retail Joint Venture had total assets of $ 103.6 million and $ 98.0 million, respectively, and total liabilities of $ 620.1 million and $ 624.4 million, respectively. As of September 30, 2022 and December 31, 2021, the Retail Joint Venture's liabilities included long-term debt of $ 613.3 million and $ 612.9 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 18 - Segment Information The Company has identified its reportable segments based on factors such as geography, regulatory environment, the information reviewed by its chief operating decision maker, and the Company's organizational and management reporting structure. The Company has identified the following reportable segments: (i) Wynn Macau, representing the aggregate of Wynn Macau and Encore, an expansion at Wynn Macau, which are managed as a single integrated resort; (ii) Wynn Palace; (iii) Las Vegas Operations, representing the aggregate of Wynn Las Vegas, Encore, an expansion at Wynn Las Vegas, and the Retail Joint Venture, which are managed as a single integrated resort; (iv) Encore Boston Harbor; and (v) Wynn Interactive. For geographical reporting purposes, Wynn Macau, Wynn Palace, and Other Macau (which represents the assets of the Company's Macau holding company and other ancillary entities) have been aggregated into Macau Operations. The following tables present the Company's segment information (in thousands): 21 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating revenues Macau Operations: Wynn Palace Casino $ 45,361 $ 134,064 $ 186,968 $ 532,040 Rooms 6,974 15,639 27,813 53,534 Food and beverage 5,727 10,952 24,027 36,429 Entertainment, retail and other (1) 17,186 20,668 58,416 67,017 75,248 181,323 297,224 689,020 Wynn Macau Casino 22,832 98,264 165,221 379,610 Rooms 4,395 10,896 18,547 39,025 Food and beverage 4,261 7,628 17,878 23,620 Entertainment, retail and other (1) 8,880 13,874 32,405 52,086 40,368 130,662 234,051 494,341 Total Macau Operations 115,616 311,985 531,275 1,183,361 Las Vegas Operations: Casino 134,314 112,575 393,930 305,253 Rooms 162,125 132,704 460,707 266,250 Food and beverage 193,733 180,455 526,389 333,390 Entertainment, retail and other (1) 54,217 50,269 165,618 104,892 Total Las Vegas Operations 544,389 476,003 1,546,644 1,009,785 Encore Boston Harbor: Casino 157,369 151,361 463,204 398,325 Rooms 23,718 14,578 61,819 28,963 Food and beverage 21,009 18,466 60,272 41,713 Entertainment, retail and other (1) 9,687 7,809 27,438 18,544 Total Encore Boston Harbor 211,783 192,214 612,733 487,545 Wynn Interactive: Entertainment, retail and other 17,934 14,442 61,236 40,748 Total Wynn Interactive 17,934 14,442 61,236 40,748 Total operating revenues $ 889,722 $ 994,644 $ 2,751,888 $ 2,721,439 22 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Adjusted Property EBITDA (2) Macau Operations: Wynn Palace $ ( 21,808 ) $ 12,112 $ ( 72,622 ) $ 93,036 Wynn Macau ( 43,806 ) ( 1,939 ) ( 88,878 ) 28,703 Total Macau Operations ( 65,614 ) 10,173 ( 161,500 ) 121,739 Las Vegas Operations 195,760 183,416 581,844 344,719 Encore Boston Harbor 61,136 64,565 180,132 141,844 Wynn Interactive ( 17,748 ) ( 103,593 ) ( 70,202 ) ( 187,961 ) Total 173,534 154,561 530,274 420,341 Other operating expenses Pre-opening 6,447 1,333 13,396 5,455 Depreciation and amortization 172,502 177,110 520,026 545,538 Property charges and other 4,733 15,301 77,362 26,569 Corporate expenses and other 22,769 18,901 70,805 56,663 Stock-based compensation 20,074 25,580 48,569 75,033 Total other operating expenses 226,525 238,225 730,158 709,258 Operating loss ( 52,991 ) ( 83,664 ) ( 199,884 ) ( 288,917 ) Other non-operating income and expenses Interest income 6,892 507 10,863 2,131 Interest expense, net of amounts capitalized ( 165,277 ) ( 150,325 ) ( 472,265 ) ( 453,601 ) Change in derivatives fair value 5,839 1,176 14,801 6,557 Loss on extinguishment of debt — ( 738 ) — ( 2,060 ) Other ( 864 ) ( 11,784 ) ( 26,090 ) ( 17,324 ) Total other non-operating income and expenses ( 153,410 ) ( 161,164 ) ( 472,691 ) ( 464,297 ) Loss before income taxes ( 206,401 ) ( 244,828 ) ( 672,575 ) ( 753,214 ) Provision for income taxes ( 1,390 ) ( 1,155 ) ( 3,248 ) ( 2,345 ) Net loss ( 207,791 ) ( 245,983 ) ( 675,823 ) ( 755,559 ) Net loss attributable to noncontrolling interests 64,899 79,734 219,556 176,963 Net loss attributable to Wynn Resorts, Limited $ ( 142,892 ) $ ( 166,249 ) $ ( 456,267 ) $ ( 578,596 ) (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. The Company uses Adjusted Property EBITDA to manage the operating results of its segments. 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. The Company also presents 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 pre-opening 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 the Company's 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 loss, 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. The Company has 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, the Company's calculation of Adjusted Property EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited. 23 Table of Contents WYNN RESORTS, LIMITED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) September 30, 2022 December 31, 2021 Assets Macau Operations: Wynn Palace $ 2,946,199 $ 3,122,424 Wynn Macau 739,488 1,032,521 Other Macau 1,054,392 1,173,913 Total Macau Operations 4,740,079 5,328,858 Las Vegas Operations 3,154,964 3,063,897 Encore Boston Harbor 2,088,418 2,193,117 Wynn Interactive 248,871 287,805 Corporate and other 1,547,013 1,657,149 Total $ 11,779,345 $ 12,530,826 24 Table of Contents