What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-02-23 compared with 2023-02-27 · 184 added, 154 removed, 387 unchanged (47% of the section changed)

10 unchanged sentences

We also hold an approximately 97% interest in, and consolidate, Wynn Interactive Ltd.

("Wynn Interactive"), through which we operate WynnBet, our digital sports betting and casino gaming business.

On December 1, 2022, we closed on our sale-leaseback arrangement with respect to certain real estate assets related to Encore Boston Harbor (the "EBH Transaction").

Upon closing of the related transactions, we received cash proceeds of approximately $1.70 billion in exchange for the sale of such real estate assets, and concurrently entered into a lease agreement for the purpose of continuing to operate the Encore Boston Harbor integrated resort.

The lease agreement provides for an initial annual minimum base rent of $100.0 million for an initial term of 30 years, subject to certain annual rent escalations and renewal provisions, and obligates the Company to continue paying certain payments in lieu of property taxes.

We expect to use the proceeds from the EBH Transaction in accordance with the reinvestment and asset sale provisions of our senior secured credit facilities.

Recent Developments

COVID-19 Update

Since the outbreak of COVID-19, visitation to Macau has fallen significantly, 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, periods of mandatory closure of certain businesses and facilities, including gaming operations, and the suspension or reduced accessibility of transportation to and from Macau.

Over the course of December 2022 and January 2023, Macau authorities relaxed or eliminated most COVID-19 related protective measures, and as of February 27, 2023, there are no remaining entry restrictions or mandatory quarantine requirements in place for travelers to Macau, and testing requirements for inbound travelers from the PRC, Hong Kong, and Taiwan have been discontinued.

Nevertheless, given the inherent uncertainty around the likelihood, extent, and timing of a potential reimposition of restrictions on the general public, travel, or certain activities, management is unable to reasonably predict whether such restrictions would impact our properties in the future, or the extent such restrictions, if reimposed, would impact our results of operations, cash flows, or financial condition.

("Wynn Interactive"), through which we operate online sports betting, gaming, and social casino businesses.

Additionally, the Company has a 40% equity interest in Island 3 AMI FZ-LLC, an unconsolidated affiliate, which is currently constructing an integrated resort property ("Wynn Al Marjan Island") in Ras Al Khaimah, United Arab Emirates.

Key Operating Measures

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Below is a discussion of the methodologies used to calculate win percentages at our resorts.

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 our VIP operations in Macau, customers primarily purchase rolling chips from the casino cage and can only use them to make wagers.

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We typically expect our win as a percentage of turnover from these operations to be within the range of 3.1% to 3.4%.

however, reduced gaming volumes as a result of COVID-19 containment measures implemented in Macau may cause volatility in our Macau Operations’ VIP win percentages.

In our mass market operations in Macau, customers may purchase cash chips at either the gaming tables or at the casino cage.

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.

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Operating revenues $ 6,531,897 $ 3,756,825 $ 2,775,072 73.9

Net loss attributable to Wynn Resorts, Limited (423,856) (755,786) (331,930) (43.9)

Diluted net loss per share (3.73) (6.64) (2.91) (43.8)

The decrease in operating revenues for the year ended December 31, 2022 was primarily driven by decreases of $472.7 million and $314.8 million at Wynn Palace and Wynn Macau, respectively, resulting from decreased gaming volumes due to certain travel-related restrictions and conditions, including COVID-19 testing and other procedures related to the COVID-19 pandemic.

The decrease in operating revenues was partially offset by increases in operating revenues of $628.5 million and $139.6 million from our Las Vegas Operations and Encore Boston Harbor, respectively, as a result of increased gaming volumes as well as increases in hotel occupancy and covers at restaurants.

The decrease in net loss attributable to Wynn Resorts, Limited for the year ended December 31, 2022 was primarily related to a gain recognized upon closing of the EBH Transaction and decreased marketing costs at Wynn Interactive.

Net income (loss) attributable to Wynn Resorts, Limited 729,994 (423,856) 1,153,850 NM

Diluted net income (loss) per share 6.32 (3.73) 10.05 NM

Not meaningful.

The increase in operating revenues for the year ended December 31, 2023 was primarily driven by increases of $1.48 billion, $902.3 million, and $348.5 million from Wynn Palace, Wynn Macau, and our Las Vegas Operations, respectively, resulting from an increase in gaming volumes, hotel occupancy, and covers at restaurants.

The results of our Macau Operations for the year ended December 31, 2022 were negatively impacted by certain travel-related restrictions and conditions, including COVID-19 testing, entry restrictions, and other mitigation procedures, related to the COVID-19 pandemic.

Over the course of December 2022 and January 2023, Macau authorities eliminated these COVID-19 related protective measures, which resulted in increased business volumes at our Macau Operations for the year ended December 31, 2023.

The increase in net income attributable to Wynn Resorts, Limited for the year ended December 31, 2023 was primarily related to increased operating revenues at our Macau Operations and our Las Vegas Operations, as well as an income tax benefit related to the release of valuation allowance on certain deferred tax assets as a result of achieving sustained profitability in the U.S., partially offset by increased operating expenses, and impairment losses for goodwill and intangible assets related to the Wynn Interactive reportable segment.

Financial results for the year ended December 31, 2023 compared to the year ended December 31, 2022.

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$ 6,531,897 $ 3,756,825 $ 2,775,072 73.9

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The following table presents our casino and non-casino operating revenues (dollars in thousands):

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$ 6,531,897 $ 3,756,825 $ 2,775,072 73.9

Casino revenues for the year ended December 31, 2022 were 43.5% of operating revenues, compared to 56.7% for the same period of 2021.

Casino revenues for the year ended December 31, 2023 were 56.9% of operating revenues, compared to 43.5% for the year ended December 31, 2022.

Non-casino revenues for the year ended December 31, 2023 were 43.1% of operating revenues, compared to 56.5% for the year ended December 31, 2022.

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Casino revenues

Casino revenues decreased as a result of lower gaming volumes at our Macau Operations due to pandemic-related travel restrictions, offset by higher gaming volumes at our Las Vegas Operations and Encore Boston Harbor.

Casino revenues increased primarily due to higher gaming volumes at our Macau Operations following the discontinuation of pandemic-related travel restrictions in Macau in late 2022 and early 2023.

The table below sets forth our casino revenues and associated key operating measures (dollars in thousands, except for win per unit per day):

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VIP turnover $ 11,363,248 $ 2,641,321 $ 8,721,927 330.2

VIP table games win $ 23,471 $ 253,767 $ (230,296) (90.8)

VIP table games win $ 383,384 $ 23,471 $ 359,913 NM

VIP win as a % of turnover 3.37 % 0.89 % 2.48

Table games win per unit per day $ 1,259 $ 7,443 $ (6,184) (83.1)

Table games win per unit per day $ 18,744 $ 1,259 $ 17,485 NM

Average number of table games 242 229 13 5.7

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Slot machine win per unit per day $ 355 $ 139 $ 216 155.4

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Poker rake $ 18,266 $ 357 $ 17,909 NM

Year Ended December 31,

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Slot machine win per unit per day $ 452 $ 406 $ 46 11.3

Poker rake $ 9,476 $ — $ 9,476 NM

Poker rake $ 21,505 $ 9,476 $ 12,029 126.9

NM - Not meaningful.

(1) The results of our Macau Operations for the years ended December 31, 2022 and 2021 were negatively impacted by the closure of our casino operations in Macau for a 12-day period in July 2022 and certain travel-related restrictions and conditions, including COVID-19 testing and other mitigation procedures, related to the COVID-19 pandemic.

(2) On January 25, 2021, Encore Boston Harbor restored 24-hour casino operations and reopened its hotel tower on a Thursday through Sunday weekly schedule.

The property reopened its hotel tower to seven days per week as of September 1, 2021.

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Non-casino revenues

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REVPAR $ 370 $ 349 $ 21 6.0

(1) Encore Boston Harbor room statistics have been computed based on 250 days of operation in the year ended December 31, 2021, representing the number of nights hotel rooms were offered for sale to the public.

The property reopened its hotel tower to seven days per week as of September 1, 2021.

Room revenues increased $209.6 million, primarily due to higher occupancy and ADR at our Las Vegas Operations and Encore Boston Harbor.

Food and beverage revenues increased $212.3 million, primarily due to increased restaurant covers and nightlife revenues at our Las Vegas Operations.

Entertainment, retail and other revenues increased $72.2 million, primarily due to increased convention sales, retail revenues from our owned and leased outlets, and entertainment venue sales, including tickets sales for the exclusive production Awakening which premiered in November 2022, all at our Las Vegas Operations.

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Room revenues increased $383.5 million, primarily due to higher occupancy and ADR at our Macau Operations and our Las Vegas Operations.

Food and beverage revenues increased $182.4 million, primarily due to increased restaurant covers at our Las Vegas Operations and our Macau Operations.

Entertainment, retail and other revenues increased $123.3 million, primarily due to higher business volumes across our properties, including an increase in revenues of $34.8 million from entertainment, convention, and special event-related sales and $9.6 million from other outlets such as the spa, salon, and golf course at our Las Vegas Operations, and an increase in revenues of $29.7 million and $9.8 million from our leased retail outlets at our Macau Operations and our Las Vegas Operations, respectively.

Operating expenses

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Gain on EBH Transaction, net — (181,989) 181,989 NM

Impairment of goodwill and intangible assets 94,490 48,036 46,454 96.7

Property charges and other 130,877 65,116 65,761 101.0

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NM - Not meaningful.

Total operating expenses decreased $300.7 million compared to the year ended December 31, 2021, due to decreased casino expenses and the gain recorded in connection with the EBH Transaction.

Casino expenses decreased $231.9 million and $150.8 million at Wynn Palace and Wynn Macau, respectively.

These decreases were primarily due to reductions in gaming tax expense driven by the declines in casino revenues at each of Wynn Palace and Wynn Macau, resulting from pandemic-related travel restrictions, partially offset by increased casino expenses of $45.5 million and $42.9 million at our Las Vegas Operations and Encore Boston Harbor, respectively, primarily due to increased operating costs, including gaming tax expense, driven by the increase in casino revenues.

Room expenses increased $49.4 million and $19.2 million at our Las Vegas Operations and Encore Boston Harbor, respectively.

These increases were primarily a result of higher operating costs related to the increase in occupancy.

Food and beverage expenses increased $173.9 million and $19.8 million at our Las Vegas Operations and Encore Boston Harbor, respectively.

These increases were primarily a result of higher operating costs related to the increase in food and beverage revenues as well as higher nightlife entertainment costs associated with increased business volumes at our Las Vegas Operations' nightlife venues.

Entertainment, retail and other expenses decreased $165.6 million at Wynn Interactive, primarily due to decreased marketing costs, partially offset by an increase of $48.3 million at our Las Vegas operations, primarily due to higher operating costs associated with increased levels of business.

General and administrative expenses increased primarily due to increases of $44.5 million and $30.4 million at our Las Vegas Operations and Encore Boston Harbor, respectively.

These increases were attributable to increased payroll and operating costs resulting from higher business volumes, partially offset by decreased general and administrative expenses of $19.1 million and $17.3 million at Wynn Palace and Wynn Macau, respectively, due to decreased payroll and operating costs attributable to lower business volumes.

The provision for credit losses decreased $17.3 million, $14.0 million, and $5.9 million at Wynn Palace, Wynn Macau, 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.

For the year ended December 31, 2022, pre-opening expenses totaled $20.6 million, which primarily related to reconfiguring the theater space at Wynn Las Vegas to host an all-new, exclusive theatrical production, Awakening , which

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premiered in November 2022.

For the year ended December 31, 2021, pre-opening expenses totaled $6.8 million, which primarily related to restaurant remodels at our Las Vegas Operations.

Depreciation and amortization decreased $37.8 million at Wynn Palace, primarily due to certain furniture, fixture and equipment assets reaching the end of their useful lives in the first quarter of 2022.

The increase in total operating expenses was primarily due to increased operating costs associated with higher business volumes at each of our properties, an increase in impairment of goodwill and intangible assets and property charges at Wynn Interactive, as a result of our decision to close its online sports betting and iGaming platform, WynnBET, in certain jurisdictions, and the gain recorded in 2022 in connection with the closing on a sale-leaseback arrangement with respect to certain real estate assets related to Encore Boston Harbor (the "EBH Transaction").

Casino expenses increased $686.7 million and $396.5 million at Wynn Palace and Wynn Macau, respectively.

These increases resulted from higher operating costs, including increases of $642.3 million and $381.4 million in incremental gaming tax expense at Wynn Palace and Wynn Macau, respectively, driven by the increase in casino revenues.

Room expenses increased $28.8 million and $9.7 million at our Las Vegas Operations and Wynn Palace, respectively.

These increases resulted from higher operating costs related to an increase in room revenues at our Las Vegas Operations and Wynn Palace.

Food and beverage expenses increased $69.4 million, $31.5 million, and $17.2 million at our Las Vegas Operations, Wynn Palace, and Wynn Macau, respectively.

These increases resulted from higher operating costs related to an increase in food and beverage revenues at our Las Vegas Operations, Wynn Palace, and Wynn Macau, respectively.

Entertainment, retail and other expenses increased $35.5 million at our Las Vegas Operations as a result of higher operating costs associated with live and theatrical entertainment.

Entertainment, retail and other expenses also increased $19.2 million at our Macau Operations as a result of higher operating costs associated with increased business volumes.

These increases were partially offset by a decrease in marketing and other operational costs of $45.4 million at Wynn Interactive.

General and administrative expenses increased primarily due to triple-net operating lease expense of $139.8 million at Encore Boston Harbor following the sale-leaseback transaction in December 2022, an increase of $29.4 million at our Las Vegas Operations attributable to payroll and other general and administrative expenses required to support higher business volumes, and increased corporate and other general and administrative expenses of $52.3 million, primarily due to development costs.

For the year ended December 31, 2023, pre-opening expenses totaled $9.5 million, which primarily related to the launch of sports betting operations in Massachusetts.

For the year ended December 31, 2022, pre-opening expenses totaled $20.6 million, which primarily related to reconfiguring the theater space at Wynn Las Vegas.

We recorded a gain of $182.0 million related to the closing of the EBH Transaction in December 2022.

Property charges and other expenses for the year ended December 31, 2022 consisted primarily of restructuring costs incurred by Wynn Interactive, including contract termination costs of $32.8 million and impairment of goodwill and other finite-lived intangible assets of $37.8 million and $10.3 million, respectively.

In addition, we incurred asset abandonments of $3.3 million, $22.6 million, and $1.3 million at our Las Vegas Operations, Wynn Palace, and Wynn Macau, respectively.

Our property charges and other expenses for the year ended December 31, 2021 consisted primarily of advocacy-related expenses of $12.5 million and impairment of goodwill of $10.3 million at Wynn Interactive, asset abandonments of $9.7 million, $4.2 million, $2.3 million, and $1.8 million at our Las Vegas Operations, Wynn Palace, Encore Boston Harbor, and Wynn Macau, respectively, and other contingency expenses of $8.7 million at Wynn Macau.

Interest expense, net of capitalized interest

The following table summarizes information related to interest expense (dollars in thousands):

Year Ended December 31,

2022 2021 Increase/ (Decrease) Percent Change

Interest expense

Interest cost, including amortization of debt issuance costs and original issue discount and premium $ 650,885 $ 605,562 $ 45,323 7.5

Weighted average total debt balance $ 12,135,627 $ 12,195,881

Weighted average interest rate 5.36 % 4.96 %

Interest costs increased primarily due to an increase in the weighted average interest rate.

During the year ended December 31, 2023, the Company recognized impairment of goodwill and other finite-lived intangible assets of $72.1 million and $22.4 million, respectively, as a result of our decision to close Wynn Interactive's online sports betting and iGaming platform, WynnBET, in certain jurisdictions.

During the year ended December 31, 2022, the Company recognized impairment of goodwill and other intangible assets of $37.8 million and $10.3 million, respectively, as a result of changes in forecasts and other industry-specific factors and our decision to cease Wynn Interactive's BetBull operations.

Property charges and other expenses for the year ended December 31, 2023 consisted primarily of contract termination and other expenses of $94.6 million, as a result of our decision to close Wynn Interactive's online sports betting and iGaming platform, WynnBET, in certain jurisdictions.

Property charges and other expenses for the year ended December 31, 2023 also included other contract terminations of $8.7 million at Wynn Macau, and asset abandonments of $12.7 million and $8.0 million at Wynn Palace and our Las Vegas Operations, respectively.

Property charges and other expenses for the year ended December 31, 2022 consisted primarily of restructuring costs incurred by Wynn Interactive, including contract termination costs of $32.8 million and asset abandonments of $3.3 million, $22.6 million, and $1.3 million at our Las Vegas Operations, Wynn Palace, and Wynn Macau, respectively.

Other non-operating income and expenses

We incurred a foreign currency remeasurement gain of $5.8 million and a loss of $23.9 million for the years ended December 31, 2022 and 2021, respectively.

Interest expense, net of capitalized interest, increased $100.6 million primarily due to an increase in the weighted average interest rate to 6.07% for the year ended December 31, 2023, from 5.36% for the year ended December 31, 2022.

We recorded interest income of $175.8 million for the year ended December 31, 2023, primarily related to interest earned on cash and cash equivalents held at financial institutions.

We incurred a foreign currency remeasurement loss of $11.5 million and a gain of $5.8 million for the years ended December 31, 2023 and 2022, respectively.

The impact of the exchange rate fluctuation of the Macau pataca, in relation to the U.S.

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We recorded a gain of $45.1 million and $16.0 million for the years ended December 31, 2023 and 2022, respectively, from change in derivatives fair value.

We recorded a $2.1 million loss on extinguishment of debt for the year ended December 31, 2021 related to full prepayments of the Wynn Macau Credit Facilities.

For the years ended December 31, 2022 and 2021, we recorded an income tax expense of $9.3 million and $0.5 million, respectively.

The change in derivatives fair value for the year ended December 31, 2023 included a gain of $49.7 million recorded in relation to the conversion feature of the WML Convertible Bonds.

We recorded a $12.7 million loss on debt financing transactions for the year ended December 31, 2023, primarily related to the issuance of the 2031 WRF Senior Notes and the repurchase of the tendered 2025 WRF Senior Notes.

For the years ended December 31, 2023 and 2022, we recorded an income tax benefit of $496.8 million and an expense of $9.3 million, respectively.

The 2023 income tax benefit primarily relates to the release of valuation allowance on certain deferred tax assets.

The 2022 income tax expense primarily relates to U.S.

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deferred taxes.

The 2021 income tax expense primarily relates to the Macau dividend tax agreement that provides for an annual payment of MOP 12.8 million (approximately $1.6 million) as complementary tax otherwise due by stockholders of Wynn Macau SA partially offset by a decrease in foreign deferred tax liabilities related to intangibles.

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In March 2021, the Company received an extension of its Macau dividend tax agreement, providing for a payment of MOP 12.8 million (approximately $1.6 million) for 2021 and MOP 6.3 million (approximately $0.8 million) for the period ending June 26, 2022.

In December 2022, the Company applied for an extension of this agreement from June 27, 2022 through December 31, 2022 , the date Concession Extension Agreement expired.

The extension is subject to approval.

In April 2020, Wynn Macau SA received an extension of the exemption from Macau's 12% Complementary Tax on casino gaming profits earned from January 1, 2021 to June 26, 2022.

In September 2022, Wynn Macau SA received an extension of the exemption from the Complementary Tax on casino gaming profits through December 31, 2022.

For the years ended December 31, 2022 and 2021, we did not have any casino gaming profits exempt from the Macau Complementary Tax.

Our non-gaming profits remain subject to the Macau Complementary Tax and casino winnings remain subject to the Macau special gaming tax and other levies together totaling 39% in accordance with our concession agreement.

In December 2022, the Company applied for an exemption from Complementary Tax on casino gaming profits commencing January 1, 2023.

The application is subject to approval.

Net loss attributable to noncontrolling interests

Net loss attributable to noncontrolling interests was $285.5 million for the year ended December 31, 2022, compared to net loss of $256.2 million for the year ended December 31, 2021.

These amounts are primarily related to the noncontrolling interests' share of net loss from WML.

In 2024, Wynn Macau SA received an exemption from Macau’s 12% Complementary Tax on casino gaming profits from January 1, 2023 through December 31, 2027.

Our non-gaming profits remain subject to the Macau Complementary Tax and casino winnings remain subject to the Macau special gaming tax and other levies in accordance with our concession agreement.

Net income (loss) attributable to noncontrolling interests

Net income attributable to noncontrolling interests was $52.2 million for the year ended December 31, 2023, compared to net loss of $285.5 million for the year ended December 31, 2022.

These amounts are primarily related to the noncontrolling interests' share of net income (loss) from WML.

Segment Information

As further described in Item 8—"Financial Statements and Supplementary Data," Note 20, "Segment Information," we use Adjusted Property EBITDAR to manage the operating results of our segments.

Adjusted Property EBITDAR is net income (loss) before interest, income taxes, depreciation and amortization, pre-opening expenses, gain on EBH Transaction, net, property charges and other, triple-net operating lease rent expense related to Encore Boston Harbor, 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 EBITDAR is net income (loss) before interest, income taxes, depreciation and amortization, pre-opening expenses, impairment of goodwill and intangible assets, property charges and other, triple-net operating lease rent expense related to Encore Boston Harbor, 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 debt financing transactions, and other non-operating income and expenses.

Adjusted Property EBITDAR 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.

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Gaming companies have historically reported EBITDAR 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 EBITDAR calculations preopening expenses, property charges, corporate expenses and stock-based compensation, that do not relate to the management of specific casino properties.

In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including us, have historically excluded from their EBITDAR 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 EBITDAR should not be considered as an alternative to operating income (loss) 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.

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Also, our calculation of Adjusted Property EBITDAR may be different from the calculation methods used by other companies and, therefore, comparability may be limited.

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The following table summarizes Adjusted Property EBITDAR (in thousands) for Wynn Palace, Wynn Macau, Las Vegas Operations, and Encore Boston Harbor as reviewed by management and summarized in Item 8—"Financial Statements and Supplementary Data," Note 19, "Segment Information." That footnote also presents a reconciliation of Adjusted Property EBITDAR to net loss attributable to Wynn Resorts, Limited.

The following table summarizes Adjusted Property EBITDAR (in thousands) for Wynn Palace, Wynn Macau, Las Vegas Operations, Encore Boston Harbor, and Wynn Interactive as reviewed by management and summarized in Item 8—"Financial Statements and Supplementary Data," Note 20, "Segment Information." That footnote also presents a reconciliation of Adjusted Property EBITDAR to net income (loss) attributable to Wynn Resorts, Limited.

Year Ended December 31,

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Wynn Interactive (42,646) (98,490) 55,844

Adjusted Property EBITDAR at Wynn Palace and Wynn Macau decreased $188.2 million and $128.3 million for the year ended December 31, 2022, respectively, primarily due to a decrease in operating revenues, partially offset by a decrease in operating expenses.

Our Macau Operations for the year ended December 31, 2022 continued to be negatively impacted by certain travel-related restrictions and conditions, including COVID-19 testing and other procedures related to the COVID-19 pandemic.

Adjusted Property EBITDAR at our Las Vegas Operations increased $270.2 million for the year ended December 31, 2022, primarily due to an increase in revenues from hotel and food and beverage operations.

Adjusted Property EBITDAR at Encore Boston Harbor increased $33.3 million for the year ended December 31, 2022, primarily due to an increase in revenues from casino and hotel operations, partially offset by increased operating expenses.

Adjusted Property EBITDAR at Wynn Interactive increased $168.9 million for the year ended December 31, 2022, primarily due to decreased marketing and promotional expenses.

Adjusted Property EBITDAR at Wynn Palace and Wynn Macau increased $712.4 million and $462.1 million for the year ended December 31, 2023, respectively, primarily due to an increase in operating revenues of $1.48 billion and $902.3 million for the year ended December 31, 2023, respectively, partially offset by an increase in operating expenses.

Our Macau Operations for the year ended December 31, 2022 were negatively impacted by certain travel-related restrictions and conditions related to the COVID-19 pandemic.

Over the course of December 2022 and January 2023, the Macau authorities relaxed or eliminated COVID-19 related protective measures, which resulted in increased business volumes at our Macau Operations for the year ended December 31, 2023.

Adjusted Property EBITDAR at our Las Vegas Operations increased $145.1 million for the year ended December 31, 2023, primarily due to an increase in revenues from room and casino operations of $133.1 million and $92.9 million, respectively, partially offset by an increase in operating expenses.

Adjusted Property EBITDAR at Encore Boston Harbor increased $14.0 million for the year ended December 31, 2023, primarily due to an increase in revenues from casino operations of $23.9 million, partially offset by increased operating expenses.

Adjusted Property EBITDAR at Wynn Interactive increased $55.8 million for the year ended December 31, 2023, primarily due to a decrease in marketing and promotional expense of $45.4 million and an increase in operating revenues of $13.0 million.

Refer to the discussions above regarding the specific details of our results of operations.

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Liquidity and Capital Resources

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Cash Flows - Summary 2023 2022

Net cash used in operating activities $ (71,272) $ (222,591)

Net cash provided by (used in) investing activities:

Net cash provided by (used in) operating activities $ 1,247,879 $ (71,272)

Net cash (used in) provided by investing activities:

Capital expenditures, net of construction payables and retention (442,793) (300,127)

Purchase of investments (836,519) —

Purchase of intangible and other assets (64,383) (52,377)

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Proceeds from sale of assets and other 1,162 1,471

Net cash provided by (used in) investing activities 1,348,967 (342,423)

Net cash (used in) provided by investing activities (1,342,533) 1,348,967

Net cash used in financing activities:

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Repayments of long-term debt (1,533,124) (50,000)

Proceeds from issuance of Wynn Resorts, Limited common stock — 841,896

Repurchase of common stock (212,455) (187,499)

Proceeds from exercise of stock options 1,965 —

Proceeds from issuance of subsidiary common stock — 2,895

Proceeds from sale of noncontrolling interest in subsidiary — 50,033

Payments to acquire ownership interest in subsidiary — (5,433)

Distribution to noncontrolling interest (22,579) (27,744)

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Payments for financing costs (41,240) (3,165)

Other (7,773) —

Net cash used in financing activities (719,206) (23,678)

Effect of exchange rate on cash, cash equivalents and restricted cash 282 (2,094)

Increase (decrease) in cash, cash equivalents and restricted cash $ 1,251,923 $ (955,317)

(Decrease) increase in cash, cash equivalents and restricted cash $ (813,578) $ 1,251,923

Operating Activities

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Accordingly, operating cash flows will be impacted by changes in operating income and accounts receivable, net.

During the year ended December 31, 2023, the increase in cash flows from operating activities was primarily due to increased revenues from our Macau Operations and our Las Vegas Operations, which was partially offset by an increase in operating expenses associated with higher business volumes.

During the year ended December 31, 2022, the decrease in net cash used in operating activities was primarily due to a decrease in marketing expenses related to Wynn Interactive and an increase in customer deposits.

During the year ended December 31, 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, including a decrease in customer deposits primarily due to withdrawals by gaming promoters.

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Investing Activities

Our investing activities primarily consist of project capital expenditures and maintenance capital expenditures associated with maintaining and continually refining our world-class integrated resort properties.

During the year ended December 31, 2023, we incurred capital expenditures of $187.2 million at our Las Vegas Operations, $70.6 million at Encore Boston Harbor, and $25.6 million at Wynn Macau primarily related to various renovations and maintenance capital expenditures;

$66.3 million at Wynn Palace primarily due to non-gaming related capital projects;

and $93.2 million at Corporate and other primarily related to future development projects, including $34.6 million related to an expansion project adjacent to Encore Boston Harbor.

In addition, during the year ended December 31, 2023, we purchased $836.5 million in investments, comprised of United States treasury bills and fixed deposits maturing in less than one year.

During the year ended December 31, 2022, we incurred capital expenditures of $226.4 million at our Las Vegas Operations primarily related to the Wynn Las Vegas room remodel and theater reconfiguration, and $20.2 million at Encore Boston Harbor, $31.9 million at Wynn Palace, and $13.0 million at Wynn Macau primarily related to maintenance capital expenditures.

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In addition, we made a $40.2 million investment in an unconsolidated affiliate.

During the year ended December 31, 2021, we incurred capital expenditures of $168.8 million at our Las Vegas Operations primarily related to the Wynn Las Vegas room remodel, and $38.7 million at Encore Boston Harbor, $37.2 million at Wynn Palace, and $25.2 million at Wynn Macau primarily related to maintenance capital expenditures.

Financing Activities

During the year ended December 31, 2022, we repurchased 2,956,331 shares of our common stock for approximately $171.3 million under our equity repurchase program.

The below table presents proceeds from the issuance, repayments, and repurchases of the specified debt instruments during the year ended December 31, 2023 (in thousands):

Proceeds from issuance Repayments and repurchases

WRF 7 1/8% Senior Notes, due 2031 $ 600,000 $ —

WML 4 1/2% Convertible Bonds, due 2029 600,000 —

WRF 7 3/4% Senior Notes, due 2025 — 600,000

WLV 4 1/4% Senior Notes, due 2023

WLV 5 1/2% Senior Notes, due 2025 — 399,999

WRF Term Loan, due 2024 — 33,125

Total $ 1,200,000 $ 1,533,124

In addition, during the year ended December 31, 2023, we repurchased 2,206,573 shares of our common stock for $195.5 million.

We also made dividend payments of $84.7 million, paid $41.2 million for financing costs related to the financing activities above and used cash of $22.6 million for distributions to noncontrolling interest holders of the Retail Joint Venture.

During the year ended December 31, 2022, we repurchased 2,956,331 shares of our common stock for $171.3 million under our equity repurchase program.

We also borrowed $211.4 million under the WM Cayman II Revolver and made quarterly amortization payments under the WRF Term Loan totaling $50.0 million.

In addition, we received a $50.0 million contribution from a noncontrolling interest holder in exchange for a 49.9% interest in certain retail space contributed by the Company to the Retail Joint Venture and used cash of $27.7 million for distributions to noncontrolling interest holders of the Retail Joint Venture.

During the year ended December 31, 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.

We also paid $464.7 million of outstanding principal owed under the Wynn Macau Term Loan and prepaid the outstanding $1.26 billion of borrowings under the Wynn Macau Credit Facilities along with related financing costs, using proceeds from the borrowing of $1.09 billion under the WM Cayman II Revolver along with $200.0 million of cash.

In addition, we borrowed $200.4 million under the WM Cayman II Revolver, and made quarterly amortization payments under the WRF Term Loan totaling $50.0 million.

Capital Resources

The COVID-19 pandemic has materially impacted and may continue to materially impact our Macau Operations' business, financial condition, and results of operations.

While as of February 27, 2023, there are no remaining entry restrictions or mandatory quarantine requirements in place for travelers to Macau or elsewhere that directly impact visitation to our other properties, and we believe our unrestricted cash, cash flows from operations and revolver borrowing capacity will enable us to fund our current obligations for the next twelve months and beyond.

Refer to Item 8—"Financial Statements and Supplementary Data," Note 7, "Long-Term Debt" in the accompanying consolidated financial statements for more information regarding each of the Company's debt agreements.

The following table summarizes our unrestricted cash and cash equivalents and available revolver borrowing capacity, excluding capacity under intercompany loan agreements, presented by significant financing entity as of December 31, 2022 (in thousands):

Total Cash and Cash Equivalents Revolver Borrowing Capacity

The following table summarizes our unrestricted cash and cash equivalents, investments, and available revolver borrowing capacity, excluding capacity under intercompany loan agreements, presented by significant financing entity as of December 31, 2023 (in thousands):

Total Cash and Cash Equivalents Investments (1)

Revolver Borrowing Capacity

Wynn Macau, Limited and subsidiaries $ 1,317,744 $ 697,908 $ —

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Total $ 2,879,186 $ 845,192 $ 736,451

(1) Investments consist of investments in United States treasury bills and fixed deposits maturing in less than one year.

(2) Excluding Wynn Macau, Limited and subsidiaries.

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Wynn Macau, Limited and subsidiaries .

WML generates cash from our Macau Operations and may utilize proceeds from the WM Cayman II Revolver and its intercompany revolving loan facility with Wynn Resorts, Limited to fund working capital requirements as needed.

We expect to use this cash to fund working capital and capital expenditure requirements at WML and our Macau Operations, and to service our WML Senior Notes and WM Cayman II Revolver.

WML generates cash from our Macau Operations to fund working capital requirements as needed.

We expect to use this cash to fund working capital and capital expenditure requirements at WML and our Macau Operations, and to service our WML Senior Notes, WM Cayman II Revolver, and WML Convertible Bonds.

WML paid no dividends during 2023 or 2022.

The borrowings under the WM Cayman II Revolver bear interest at LIBOR or HIBOR plus a margin of 2.625% per annum until June 30, 2022, the date from which the margin will be 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.

The final maturity of all outstanding loans under the Revolving Facility is September 16, 2025.

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;

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.

In 2024, Wynn Macau SA renewed its agreement with the Macau government that provides for a payment in lieu of complementary tax on dividend distributions which would otherwise be borne by stockholders of Wynn Macau SA from January 1, 2023 through December 31, 2025.

The payment is $5.5 million for the year ended December 31, 2023.

Pursuant to the amended and restated facility agreement dated June 27, 2023, the base rate applicable to loans denominated in U.S.

dollars made pursuant to the WM Cayman II Revolver transitioned to the term secured overnight financing rate ("Term SOFR"), plus a credit adjustment spread of 0.10%, plus (b) a margin of 1.875% to 2.875% per annum based on WM Cayman II’s leverage ratio on a consolidated basis.

The new Term SOFR base rate became effective July 4, 2023.

The loans denominated in Hong Kong dollars under the WM Cayman II Revolver bear interest at HIBOR plus a margin of 1.875% to 2.875% per annum based on WM Cayman II's leverage ratio on consolidated basis.

The final maturity of all outstanding loans under the Revolving Facility remains unchanged at September 16, 2025.

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.

On March 7, 2023, WML completed an offering (the "Offering") of $600.0 million 4.50% convertible bonds due 2029 (the "WML Convertible Bonds").

The WML Convertible Bonds are governed by a trust deed dated March 7, 2023 (the "Trust Deed").

The net proceeds from the Offering, after deduction of commission and other related expenses, were $585.9 million.

WML intends to use the proceeds for general corporate purposes.

The WML Convertible Bonds bear interest on their outstanding principal amount from and including March 7, 2023 at the rate of 4.50% per annum.

The WML Convertible Bonds are convertible at the option of the holder thereof into fully paid ordinary shares of WML, at the initial conversion price of approximately HK$10.24 (equivalent to approximately $1.31) per share, subject to and upon compliance with the terms and conditions of the WML Convertible Bonds (the "Terms and Conditions," and such right, the "Conversion Right").

The conversion price is at the fixed rate of HK$7.8497 (equivalent to US$1.00), subject to standard adjustments for certain dilutive events as described in the Terms and Conditions.

WML has the option, in its sole discretion, to pay to the relevant bondholder an amount of cash equivalent in order to satisfy the Conversion Right in whole or in part.

The holders of the WML Convertible Bonds have the option to require WML to redeem all or some only of such holder’s Bonds (i) on March 7, 2027 at their principal amount together with interest accrued but unpaid to (but excluding) the date fixed for redemption;

or (ii) on the Relevant Event Redemption Date (as defined in the Terms and Conditions) at their principal amount together with interest accrued but unpaid to, but excluding such date, following the occurrence of (a) when the Ordinary Shares cease to be listed or admitted to trading or are suspended from trading for a period equal to or exceeding 10 consecutive trading days on the Stock Exchange of Hong Kong Limited, or if applicable, the alternative stock exchange, (b) when there is a Change of Control (as defined in the Terms and Conditions), or (c) when less than 25% of WML’s total number of issued Ordinary Shares are held by the public (as interpreted under Rule 8.24 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited).

The WML Convertible Bonds may also be redeemed at the option of WML in whole, but not in part, at any time after March 7, 2027, but prior to March 7, 2029, upon giving notice to the bondholders in accordance with the Terms and Conditions, under certain circumstances specified in the Trust Deed.

If our portion of our cash and cash equivalents were repatriated to the U.S.

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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.

In June 2022, Wynn Las Vegas completed its hotel room remodel for total project costs of approximately $215 million.

In October 2022, Wynn Las Vegas completed its theater reconfiguration for total project costs of approximately $110 million.

The specially redesigned theater was custom designed to host an all-new, exclusive theatrical production, Awakening , which premiered in November 2022.

Upon closing of the EBH Transaction in December 2022, we received cash proceeds of approximately $1.70 billion in exchange for the sale of certain real estate assets related to Encore Boston Harbor, and concurrently entered into a lease agreement for the purpose of continuing to operate the Encore Boston Harbor integrated resort.

The triple-net lease agreement provides for an initial annual minimum base rent of $100.0 million for an initial term of 30 years, subject to certain annual rent escalations and renewal provisions, and obligates the Company to continue paying certain payments in lieu of property taxes.

We expect to use the proceeds from the EBH Transaction in accordance with the reinvestment and asset sale provisions of our senior secured credit facilities.

On February 16, 2023, WRF issued $600.0 million aggregate principal amount of 7 1/8% Senior Notes due 2031 (the "2031 WRF Senior Notes") in a private offering.

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Also on February 16, 2023, WRF completed a cash tender offer for any and all of the outstanding principal amount of the 2025 WRF Senior Notes, and accepted for purchase valid tenders with respect to $506.4 million and paid a tender premium of $12.4 million.

We used a portion of the net proceeds from the offering of the 2031 WRF Senior Notes to purchase such tendered 2025 WRF Senior Notes and to pay related fees and expenses, and intend to use the remaining net proceeds for general corporate purposes.

We intend to redeem the remaining outstanding 2025 WRF Senior Notes using cash held by WRF on or after April 15, 2023, when such senior notes are redeemable at a price equal to 101.938% of the principal amount plus accrued interest under the terms of their indenture.

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We intend to repurchase or redeem all of the outstanding Wynn Las Vegas 4.25% Senior Notes due 2023 using cash held by WRF during or after March 2023, when such senior notes are redeemable at a price equal to 100% of the principal amount plus accrued interest under the terms of their indenture.

We used a portion of the net proceeds from the offering of the 2031 WRF Senior Notes to purchase such tendered 2025 WRF Senior Notes and to pay related fees and expenses.

In March 2023, we repurchased all of the outstanding Wynn Las Vegas 4.25% Senior Notes due 2023 of $500.0 million using cash held by WRF, at a price equal to 100% of the principal amount plus accrued interest under the terms of their indenture.

In April 2023, we repurchased the remaining outstanding 2025 WRF Senior Notes using the remaining net proceeds from the issuance of the 2031 WRF Senior Notes and cash held by WRF, at a price equal to 101.938% of the principal amount plus accrued interest under the terms of its indenture.

In May 2023, WRF and certain of its subsidiaries entered into an amendment (the "WRF Credit Agreement Amendment") to its existing credit agreement (the "WRF Credit Agreement").

The WRF Credit Agreement Amendment amends the WRF Credit Agreement to:

(i) transition the benchmark rate from LIBOR to Term SOFR and to make conforming changes, (ii) reduce the aggregate principal amount of revolving commitments under the revolving credit facility by $100.0 million, from $850.0 million to $750.0 million, (iii) extend the stated maturity date for lenders electing to extend their revolving commitments in an amount equal to approximately $681.3 million from September 20, 2024 to September 20, 2027, and (iv) extend the stated maturity date for lenders electing to extend their term loan commitments in an amount equal to approximately $749.4 million from September 20, 2024 to September 20, 2027.

Lenders who elected not to extend their revolving commitments in an amount equal to approximately $68.7 million will remain subject to a stated maturity date of September 20, 2024, and lenders who elected not to extend their term loan commitments in an amount equal to approximately $75.6 million will remain subject to a stated maturity date of September 20, 2024.

In August 2023, Wynn Las Vegas repurchased $400.0 million aggregate principal amount of its 5 1/2% Senior Notes due 2025 ("2025 WLV Senior Notes"), at a price equal to 94% of the principal amount, plus accrued interest and an early tender premium of $20.0 million and the related fees and expenses, using cash held by Wynn Resorts.

In February 2024, WRF issued an additional $400.0 million aggregate principal amount of 7 1/8% Senior Notes due 2031 (the "2031 WRF Add-On Senior Notes") in a private offering.

The 2031 WRF Add-On Senior Notes were issued at a price equal to 103.0% of the principal amount, for net proceeds of approximately $409 million.

Also, in February 2024, Wynn Las Vegas repurchased $678.0 million aggregate principal amount of its 2025 WLV Senior Notes, at a price equal to 97.2% of the principal amount, plus accrued interest and an early tender premium of $20.3 million to the holders of validly tendered 2025 WLV Senior Notes.

The Company used the net proceeds from the 2031 WRF Add-On Senior Notes and cash held by Wynn Resorts to purchase such validly tendered 2025 WLV Senior Notes and to pay the tender premium and related fees and expenses.

Wynn Resorts, Limited and other subsidiaries.

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Fees payable by Wynn Macau SA to Wynn Resorts, Limited under its intellectual property license agreement are capped at $140.0 million for the year ended December 31, 2024.

We expect to use cash held by Wynn Resorts, Limited and other to service our Retail Term Loan, to fund working capital needs of our subsidiaries, and for general corporate purposes.

We expect to use cash held by Wynn Resorts, Limited and other to service our Retail Term Loan, to fund working capital needs of our subsidiaries, pay dividends, make required capital contributions to the entity which owns the Wynn Al Marjan Island development, and for general corporate purposes.

The Company is currently constructing a phased development adjacent to Encore Boston Harbor, which will include a theater, entertainment venues, gaming facilities, food and beverage facilities, and a parking garage.

We expect to incur between $375.0 million and $400.0 million of remaining project costs related to this development, which we expect to complete during the first quarter of 2026.

On June 2, 2023, the Company entered into a second amendment to the existing term loan agreement (the "Retail Term Loan Amendment") which transitions the benchmark interest rate of the Retail Term Loan from LIBOR to the adjusted daily simple secured overnight financing rate ("SOFR") and to make related conforming changes, effective July 3, 2023.

The Company paid a cash dividend of $0.25 per share in each of the quarters ended June 30, 2023, September 30, 2023, and December 31, 2023 and recorded $28.5 million, $28.2 million and $28.4 million respectively, against accumulated deficit.

On February 7, 2024, the Company declared a cash dividend of $0.25 per share, payable on February 29, 2024 to stockholders of record as of February 20, 2024.

Other Factors Affecting Liquidity

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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.

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Contractual Commitments

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Total contractual commitments $ 1,978,346 $ 6,062,597 $ 4,561,442 $ 7,280,804 $ 19,883,189

(1) Amounts for all periods represent our estimated future interest payments on our debt facilities based upon amounts outstanding and LIBOR or HIBOR rates as of December 31, 2022.

(1) Amounts for all periods represent our estimated future interest payments on our debt facilities based upon amounts outstanding and SOFR or HIBOR rates as of December 31, 2023.

Actual rates will vary.

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Due to the inherent uncertainty of the underlying tax positions, it is not practicable to assign this liability to any particular year and therefore it is not included in the table above as of December 31, 2023.

Gaming Concession Contract

On December 16, 2022, Wynn Macau SA entered into a definitive gaming concession contract (the "Gaming Concession Contract") with the government of Macau, pursuant to which Wynn Macau SA was granted a 10-year gaming concession commencing on January 1, 2023 and expiring on December 31, 2032, to operate games of chance at Wynn Palace and Wynn Macau.

In addition to the Macau gaming premium and Property Transfer Agreements payment commitments included in the table above, Wynn Macau SA committed to pay a gaming tax assessed at the rate of 35% of gross gaming revenues, plus additional special levies equal to 5% of gross gaming revenues, throughout the term of the Gaming Concession Contract.

Wynn Macau SA also committed to make certain non-gaming and gaming investments in the amount of MOP17.73 billion (approximately $2.21 billion) over the course of the ten-year term of the Gaming Concession Contract.

In addition to the Macau gaming premium and Property Transfer Agreements payment commitments included in the table above, Wynn Macau SA committed to make certain non-gaming and gaming investments in the amount of MOP17.73 billion (approximately $2.20 billion) over the course of the ten-year term of the Gaming Concession Contract.

MOP16.50 billion (approximately $2.05 billion) of the committed investment will be used for non-gaming capital projects and event programming in connection with, among others, attraction of foreign tourists, conventions and exhibitions, entertainment performances, sports events, culture and art, health and wellness, themed amusement, gastronomy, community tourism and maritime tourism.

Wynn Macau SA will be required to increase its investment in non-gaming projects by 20% in the following year if market-wide gross gaming revenues increase to MOP180.00 billion (approximately $22.41 billion) in any one year (the "Trigger Event").

The required increase will be reduced to 16%, 12%, 8%, 4% or 0%, respectively, if the Trigger Event occurs during the sixth, seventh, eighth, ninth or tenth year of the concession period, respectively.

Wynn Macau SA agreed, as part of its commitment for its Gaming Concession Contract, to increase its investment in non-gaming projects (original commitment of MOP16.50 billion (approximately $2.05 billion) by 20% once market-wide gross gaming revenues reached MOP180.00 billion (approximately $22.36 billion) in any one year (the "Trigger Event").

As market-wide gross gaming revenue exceeded MOP180.00 billion (approximately $22.36 billion) in 2023, the Trigger Event occurred at the end of 2023 and each gaming concessionaire is now required to increase its original committed investment amount in non-gaming projects by 20%.

Wynn Macau SA will comply with its further investment commitment by investing MOP3.30 billion

(approximately $409.9 million) over the course of the remaining 9 years of the Gaming Concession Contract in non-gaming capital projects.

The scope, nature and timing of the additional investment in non-gaming capital projects will be mutually agreed between Wynn Macau SA and the Macau SAR Government in due course and according to the terms of the Gaming Concession Contract.

See Item 8—"Financial Statements and Supplementary Data," Note 18, "Commitments and Contingencies," for additional information regarding the amounts owed under the Gaming Concession Contract and Macau gaming law.

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Wynn Al Marjan Island Funding Commitment

Pursuant to the shareholders' agreement governing Island 3 AMI FZ-LLC, the unconsolidated entity in which the Company has a 40% ownership interest and which owns the Wynn Al Marjan Island integrated resort development project in Ras Al Khaimah, United Arab Emirates, the Company, and the entity's other shareholders, have committed to fund the development of the project through capital contributions in an amount up to its pro rata share of at least 20% of the project budget.

The amount and timing of such contributions are subject to approval by the entity's shareholders.

Critical Accounting Policies and Estimates

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However, by their nature, judgments are subject to an inherent degree of uncertainty, and therefore actual results could differ from our estimates.

WML Convertible Bond Conversion Option Derivative

On March 7, 2023, WML completed the Offering of the WML Convertible Bonds.

The Company determined that the conversion feature contained within the WML Convertible Bonds is not indexed to WML's equity and, as such, is required to be bifurcated from the debt host contract and accounted for as a free-standing derivative (the "WML Convertible Bonds Conversion Option Derivative").

In accordance with applicable accounting standards, the WML Convertible Bond Conversion Option Derivative will be reported at fair value as of the end of each reporting period, with changes recognized in the statements of operations.

The Company used a binomial lattice model in order to estimate the fair value of the embedded derivative in the WML Convertible Bonds.

Inherent in a binomial options pricing model are unobservable (Level 3) inputs and assumptions related to expected share-price volatility, risk-free interest rate, expected term, and dividend yield.

The Company estimates the volatility of shares of WML common stock based on historical volatility that matches the expected remaining term to maturity of the WML Convertible Bonds.

The risk-free interest rate is based on the Hong Kong and United States benchmark yield curves on the valuation date for a maturity similar to the expected remaining term of the WML Convertible Bonds.

The expected life of the WML Convertible Bonds is assumed to be equivalent to their remaining term to maturity.

The dividend yield is based on the historical WML dividend rate over the last several years.

The output of the lattice model can be highly sensitive to fluctuations in its inputs.

Sale-leaseback Transaction

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In determining the fair value of the underlying assets, we use a combination of the income, market, and cost approaches, which include inputs such as estimated future cash flows, the selection of recently sold comparable properties, and estimated cost to construct a comparable asset.

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Allowance for Credit Losses

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If the undiscounted cash flows do not exceed the carrying value, an impairment is recorded based on the fair value of the asset, typically measured using a discounted cash flow model.

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an asset is still under development, future cash flows include remaining construction costs.

If an asset is still under development, future cash flows include remaining construction costs.

All recognized impairment losses, whether for assets to be disposed of or assets to be held and used, are recorded as operating expenses.

During the year ended December 31, 2022, Wynn Palace and Wynn Macau continued to experience disruptions to their respective businesses as a result of the COVID-19 pandemic as noted in Note 1, "Organization and Business." As a result, we concluded that a triggering event occurred at each of these asset groups.

We tested our asset groups for recoverability as of December 31, 2022, and concluded no impairment existed at that date as the estimated undiscounted future cash flows exceeded the net carrying amount for each of the asset groups.

The tests for recoverability include estimates of future cash flows and the useful lives of our primary assets.

These estimates are subjective and may change should the COVID-19 pandemic, including travel restrictions and operating capacity limitations, persist longer than expected.

Unfavorable changes in the Company's estimates could require an impairment charge in the future.

The Company tests goodwill for impairment annually, or more frequently if events or changes in circumstances indicate that this asset may be impaired.

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However, if the fair value of the reporting unit is less than its carrying amount, goodwill impairment is recorded equal to the difference between the carrying amount of the reporting unit and its fair value, not to exceed the carrying amount of goodwill.

Most of the Company’s goodwill balance as of December 31, 2022 and 2021 was the result of an acquisition during the fourth quarter of 2020.

During the year ended December 31, 2023, as a result of the Company's decision to cease operating Wynn Interactive's online sports betting and iGaming platform in certain jurisdictions, the Company identified interim indicators of impairment related to the goodwill assigned to the WynnBET reporting unit within the Wynn Interactive reportable segment.

As a result, the Company performed an impairment test as of December 31, 2023, and determined that the carrying value of its goodwill exceeded the estimated fair value of that reporting unit based on a combination of the income and cost approaches, causing the Company to recognize a goodwill impairment loss of $72.1 million.

As of December 31, 2023, the Company had no remaining goodwill recorded related to the acquisition of BetBull Limited ("BetBull"), a subsidiary of Wynn Interactive.

The Company also recognized impairment of other finite-lived intangible assets related to Wynn Interactive's closed operations totaling $22.4 million during the year ended December 31, 2023.

During the year ended December 31, 2022, as a result of changes in forecasts and other industry-specific factors and management's decision to cease the operations of Betbull Limited ("BetBull"), a subsidiary of Wynn Interactive, the Company recognized impairment of goodwill and other finite-lived intangible assets of $37.8 million and $10.3 million, respectively.

On November 12, 2021, Wynn Resorts announced the termination of a previously announced agreement and plan of merger which contemplated the combination of Wynn Interactive and a special purpose acquisition company.

The Company concluded that the termination of the agreement constituted a potential indicator of impairment, and as a result of revisiting its estimated fair value of the reporting units comprising Wynn Interactive based on a combination of the income and market approaches, recognized goodwill impairment of $10.3 million during the year ended December 31, 2021.

Litigation and Contingency Estimates

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We include the accruals associated with any contingent matters in other accrued liabilities on the Consolidated Balance Sheets.

We are subject to income taxes in the United States and other foreign jurisdictions where we operate.

Accounting standards require the recognition of deferred tax assets, net of applicable reserves, and liabilities for the estimated future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

The effect of a change in tax rates on the income tax provision and deferred tax assets and liabilities generally is recognized in the results of operations in the period that includes the enactment date.

Accounting standards require recognition of a future tax benefit to the extent that realization of such benefit is more likely than not.

Otherwise, a valuation allowance is applied.

As of December 31, 2023, we had deferred tax assets of $2.20 billion, including a foreign tax credit ("FTC") carryforward of $1.20 billion and deferred tax assets related to interest expense carryforwards of $156.2 million and net operating loss carryforwards of $239.6 million.

In assessing the need for a valuation allowance, the Company considers whether it is more likely than not that the deferred tax assets will be realized.

In this assessment, appropriate consideration was given to all positive and negative evidence including recent operating profitability, forecasts of future earnings, ability to carryback, the reversal of net taxable temporary differences, the duration of statutory carryforward periods, and tax planning strategies.

In 2023, we considered both the achievement of sustained profitability and cumulative income as well as forecasted income and tax planning strategies to be significant forms of positive evidence.

We determined that the positive evidence outweighed the negative evidence and supported a release of a portion of the valuation allowance.

Therefore, we recorded a $1.10 billion net decrease to valuation allowances, including a $971.7 million decrease to the valuation allowance on FTC carryforwards.

Of the $971.7 million decrease, $97.5 million relates to current year utilization and $572.6 million relates to expirations of FTCs in 2023.

The remaining $301.6 million represents FTCs more likely than not to be realized based on future taxable income and tax planning strategies.

We also recorded a $158.0 million decrease in valuation allowance on disallowed interest expense carryforward.

The need for valuation allowances against deferred tax assets will be reassessed on a continuous basis in future periods and, as a result, the allowance may increase or decrease based on changes in facts and circumstances.

As of December 31, 2022, we relied solely on the reversal of net taxable temporary differences in assessing the need for a valuation allowance.

Our income tax returns are subject to examination by the IRS and other tax authorities in the locations where we operate.

We assess potentially unfavorable outcomes of such examinations based on accounting standards for uncertain income taxes.

The accounting standards prescribe a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements.

Uncertain tax position accounting standards apply to all tax positions related to income taxes.

These accounting standards utilize a two-step approach for evaluating tax positions.

The tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon settlement.

As applicable, we recognize accrued penalties and interest related to unrecognized tax benefits in the provision for income taxes.

Recommendations made by the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting 2.0 ("BEPS 2.0") project have the potential to lead to changes in the tax laws in numerous countries, including the implementation of a global minimum tax.

Several countries around the world have enacted or proposed changes to their

existing tax laws based on these recommendations.

We are monitoring the potential changes in tax laws resulting from the Organization for Economic Cooperation and Development’s multi-jurisdictional plan of action to address base erosion and profit shifting, which could impact our effective tax rate.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis