Business context and reporting period
Wynn Resorts, Limited’s Form 10-K covers the fiscal year ended December 31, 2023; it is an annual report, not a standalone fourth-quarter filing. The company operates Wynn Palace and Wynn Macau, Wynn Las Vegas and Encore, and Encore Boston Harbor; it also consolidates Wynn Interactive and owns a 40% interest in the Wynn Al Marjan Island development.
Key financial metrics
| Metric | FY 2023 | FY 2022 |
|---|---|---|
| Operating revenue | $6.532 billion | $3.757 billion |
| Operating income (loss) | $840.2 million | $(100.7) million |
| Operating margin | 12.9% | (2.7)% |
| Net income (loss) attributable to Wynn Resorts | $730.0 million | $(423.9) million |
| Diluted EPS | $6.32 | $(3.73) |
| Net cash from operating activities | $1.248 billion | $(71.3) million |
| Capital expenditures | $442.8 million | $300.1 million |
| Gross debt at year-end | $11.827 billion | $12.163 billion |
Year-end cash and cash equivalents were $2.879 billion, with a further $845.2 million in short-term investments. WRF had $736.5 million of available revolving capacity, net of letters of credit. Current assets were $4.242 billion and current liabilities were $2.200 billion. Interest expense, net of capitalized interest, was $751.5 million; the weighted-average interest rate increased to 6.07% from 5.36%.
Adjusted Property EBITDAR, a non-GAAP supplemental measure, was $2.115 billion versus $725.4 million. The filing cautions that this measure excludes significant costs, including interest, capital expenditures and Encore Boston Harbor lease rent, and is not a substitute for GAAP results or operating cash flow.
Material changes versus the prior comparable period
- Revenue rose 73.9%, led by Macau: Wynn Palace revenue increased 359.9% to $1.887 billion and Wynn Macau increased 289.9% to $1.214 billion. Macau’s recovery followed the removal of pandemic-related travel restrictions in late 2022 and early 2023.
- Las Vegas revenue grew 16.3% to $2.481 billion; Encore Boston Harbor revenue grew 4.2% to $865.8 million. Casino revenue increased 127.8% overall, while non-casino revenue increased 32.4%.
- The company returned to GAAP profitability, but results included a $496.8 million income tax benefit, primarily from a $1.10 billion net reduction in deferred-tax valuation allowances. The allowance release depended on management’s assessment of sustained profitability, future taxable income and tax planning; the auditor identified deferred-tax-asset valuation as a critical audit matter.
- Operating cash flow improved to $1.248 billion. Cash and cash equivalents declined by $771.3 million, while the company purchased $836.5 million of short-term investments and repaid $1.533 billion of debt.
- Debt declined by approximately $336 million. The company issued $600 million of 7.125% notes due 2031 and $600 million of Wynn Macau convertible bonds due 2029, while retiring or repurchasing several nearer-dated notes. Approximately 75% of long-term debt was fixed-rate.
- Encore Boston Harbor’s 2022 sale-leaseback generated $1.70 billion of proceeds and a $182.0 million gain in 2022; the associated 30-year triple-net lease added substantial ongoing costs. In 2023, related lease expense was $141.7 million.
Fourth-quarter information
Unaudited Q4 2023 revenue was $1.840 billion and operating income was $357.7 million. Net income attributable to Wynn Resorts was $729.2 million, including the year’s significant tax benefit; Q4 diluted EPS was $6.19. Quarterly results are not a substitute for the full-year figures.
Outlook, risks, contingencies and unusual items
- The filing provides no consolidated earnings or revenue guidance. It expects the Wynn Al Marjan Island resort in the UAE to open in 2027 and the phased development adjacent to Encore Boston Harbor to open in 2026; $375–$400 million of Boston project costs remained at year-end.
- Under Macau’s 10-year concession through 2032, Wynn Macau SA committed approximately $2.20 billion to gaming and non-gaming investment. Following a market-revenue trigger in 2023, it must add approximately $409.9 million of non-gaming investment over the remaining nine years. Macau gaming revenues are subject to a 35% special gaming tax and other levies.
- WynnBET closures were announced in multiple jurisdictions; in February 2024, the company agreed to transfer Michigan market-access rights to Caesars and sell its U.S. operating subsidiary, including its New York license, to Penn, subject to closing conditions. WynnBET recorded $94.5 million of goodwill and intangible-asset impairment and contract termination and other costs in 2023.
- Material risks include dependence on a limited number of resort markets, gaming-license and concession compliance, Macau demand and geopolitical or travel restrictions, premium-player volatility and credit collection, competition, labor, cybersecurity, foreign exchange, interest rates, and high leverage. A 100-basis-point change in variable rates was estimated to change annual interest expense by $23.0 million.
- Notable contingencies include ongoing U.S. anti-money-laundering inquiries relating to Wynn Las Vegas; a securities class action proceeding through discovery, for which the company could not estimate a possible loss; and Dore-related Macau lawsuits, for which the company recorded provisions but cannot assure the outcome. The filing also reports contamination at and near the Everett property and says remediation costs have exceeded initial estimates.
- Debt covenants were reported in compliance at December 31, 2023. The 10-K reports unqualified audit opinions on the financial statements and internal control over financial reporting, and management assessed disclosure controls as effective.
Most important facts for investors to verify
- How much of 2023’s reported earnings depends on the deferred-tax valuation-allowance release, and whether taxable income supports realization of the remaining deferred tax assets.
- Macau recovery sustainability, gaming win-rate volatility, and the scale and timing of concession-required investment, including the additional non-gaming commitment.
- Debt maturities, refinancing and covenant capacity, variable-rate exposure, and the cash available within each financing subsidiary; consolidated liquidity may not be freely transferable.
- Actual remaining costs and schedule for the Boston expansion and UAE resort, and the company’s eventual funding obligations for Wynn Al Marjan Island.
- Closing and financial effects of the WynnBET transactions, and developments in the AML inquiry, Dore claims, securities litigation and Everett environmental remediation.