UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                 

Commission File No. 000-50028

 WYNN RESORTS, LIMITED

(Exact name of registrant as specified in its charter)

Nevada	46-0484987
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3131 Las Vegas Boulevard South - Las Vegas, Nevada 89109

(Address of principal executive offices) (Zip Code)

(702) 770-7555

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01	WYNN	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    Yes ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐    No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class	Outstanding at August 2, 2022
Common stock, par value $0.01	113,729,619

WYNN RESORTS, LIMITED AND SUBSIDIARIES

FORM 10-Q

INDEX

 

Part I.	Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets - June 30, 2022 (unaudited) and December 31, 2021	3
	Condensed Consolidated Statements of Operations (unaudited) - Three and Six Months Ended June 30, 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Loss (unaudited) - Three and Six Months Ended June 30, 2022 and 2021	5
	Condensed Consolidated Statements of Stockholders’ Deficit (unaudited) - Three and Six Months Ended June 30, 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows (unaudited) - Six Months Ended June 30, 2022 and 2021	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48
Part II.	Other Information
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Default Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	50
Signature		51

2

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	June 30, 2022		December 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,014,898	$	2,522,530
Restricted cash	5,605		4,896
Accounts receivable, net of allowance for credit losses of $92,579 and $111,319	186,380		199,463
Inventories	69,075		69,967
Prepaid expenses and other	95,256		79,061
Total current assets	2,371,214		2,875,917
Property and equipment, net	8,596,653		8,765,308
Restricted cash	3,233		3,641
Goodwill and intangible assets, net	256,519		307,578
Operating lease assets	356,828		371,365
Other assets	204,084		207,017
Total assets	$	11,788,531	$	12,530,826
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts and construction payables	$	153,816	$	170,542
Customer deposits	412,594		436,388
Gaming taxes payable	24,986		73,173
Accrued compensation and benefits	161,801		206,225
Accrued interest	132,888		132,877
Current portion of long-term debt	544,632		50,000
Other accrued liabilities	186,552		218,675
Total current liabilities	1,617,269		1,287,880
Long-term debt	11,367,861		11,884,546
Long-term operating lease liabilities	109,641		115,187
Other long-term liabilities	68,014		79,428
Total liabilities	13,162,785		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; 131,964,542 and 131,449,806 shares issued; 113,707,642 and 115,714,943 shares outstanding, respectively	1,320		1,314
Treasury stock, at cost; 18,256,900 and 15,734,863 shares, respectively	(1,585,678)		(1,436,373)
Additional paid-in capital	3,566,498		3,502,715
Accumulated other comprehensive income	9,829		6,004
Accumulated deficit	(2,601,331)		(2,288,078)
Total Wynn Resorts, Limited stockholders' deficit	(609,362)		(214,418)
Noncontrolling interests	(764,892)		(621,797)
Total stockholders' deficit	(1,374,254)		(836,215)
Total liabilities and stockholders' deficit	$	11,788,531	$	12,530,826

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating revenues:
Casino	$	359,585	$	602,746	$	849,447	$	1,118,964
Rooms	201,298		137,765		371,674		213,955
Food and beverage	229,816		149,142		403,836		217,651
Entertainment, retail and other	118,133		100,460		237,209		176,225
Total operating revenues	908,832		990,113		1,862,166		1,726,795
Operating expenses:
Casino	244,064		381,615		568,143		733,581
Rooms	65,070		50,552		123,785		84,087
Food and beverage	185,471		117,106		332,127		191,054
Entertainment, retail and other	74,985		80,922		163,889		154,381
General and administrative	200,378		197,545		397,158		377,319
Provision for credit losses	(3,487)		441		(3,145)		7,808
Pre-opening	4,502		2,495		6,949		4,122
Depreciation and amortization	162,968		183,307		347,524		368,428
Property charges and other	26,909		5,651		72,629		11,268
Total operating expenses	960,860		1,019,634		2,009,059		1,932,048
Operating loss	(52,028)		(29,521)		(146,893)		(205,253)
Other income (expense):
Interest income	2,691		720		3,971		1,624
Interest expense, net of amounts capitalized	(154,830)		(150,424)		(306,988)		(303,276)
Change in derivatives fair value	1,562		972		8,962		5,381
Loss on extinguishment of debt	—		—		—		(1,322)
Other	(10,099)		5,553		(25,226)		(5,540)
Other income (expense), net	(160,676)		(143,179)		(319,281)		(303,133)
Loss before income taxes	(212,704)		(172,700)		(466,174)		(508,386)
Provision for income taxes	(718)		(697)		(1,858)		(1,190)
Net loss	(213,422)		(173,397)		(468,032)		(509,576)
Less: net loss attributable to noncontrolling interests	83,371		42,028		154,657		97,229
Net loss attributable to Wynn Resorts, Limited	$	(130,051)	$	(131,369)	$	(313,375)	$	(412,347)
Basic and diluted net loss per common share:
Net loss attributable to Wynn Resorts, Limited:
Basic	$	(1.14)	$	(1.15)	$	(2.73)	$	(3.66)
Diluted	$	(1.14)	$	(1.15)	$	(2.73)	$	(3.66)
Weighted average common shares outstanding:
Basic	114,471		114,545		114,749		112,792
Diluted	114,471		114,545		114,749		112,792

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)

 

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021			2022		2021
Net loss	$	(213,422)	$	(173,397)		$	(468,032)	$	(509,576)
Other comprehensive income:
Foreign currency translation adjustments, before and after tax	884		(290)			5,481		3,742
Total comprehensive loss	(212,538)		(173,687)			(462,551)		(505,834)
Less: comprehensive loss attributable to noncontrolling interests	83,015		42,110			153,001		96,176
Comprehensive loss attributable to Wynn Resorts, Limited	$	(129,523)	$	(131,577)		$	(309,550)	$	(409,658)

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

(in thousands, except share data)

(unaudited)

	For the Three Months Ended June 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, April 1, 2022	115,917,961	$	1,318	$	(1,448,040)	$	3,571,666	$	9,301	$	(2,471,285)	$	(337,040)	$	(696,219)	$	(1,033,259)
Net loss	—	—		—		—		—		(130,051)		(130,051)		(83,371)		(213,422)
Currency translation adjustment	—	—		—		—		528		—		528		356		884
Issuance of restricted stock	178,038	2		—		(2)		—		—		—		—		—
Cancellation of restricted stock	(3,405)	—		—		—		—		—		—		—		—
Shares repurchased by the Company and held as treasury shares	(2,384,952)	—		(137,638)		—		—		—		(137,638)		—		(137,638)
Distribution to noncontrolling interest	—	—		—		—		—		—		—		(7,244)		(7,244)
Subsidiary equity issuance	—	—		—		(16,750)		—		—		(16,750)		19,646		2,896
Stock-based compensation	—	—		—		11,584		—		5		11,589		1,940		13,529
Balances, June 30, 2022	113,707,642	$	1,320	$	(1,585,678)	$	3,566,498	$	9,829	$	(2,601,331)	$	(609,362)	$	(764,892)	$	(1,374,254)

	For the Three Months Ended June 30, 2021
	Common stock
	Shares outstanding	Par value		Treasury stock		Additional paid-in capital		Accumulated other comprehensive income		Accumulated deficit		Total Wynn Resorts, Ltd. stockholders' equity (deficit)		Noncontrolling interests		Total stockholders' deficit
Balances, April 1, 2021	115,647,328	$	1,313	$	(1,426,887)	$	3,466,073	$	6,501	$	(1,813,317)	$	233,683	$	(436,622)	$	(202,939)
Net loss	—	—		—		—		—		(131,369)		(131,369)		(42,028)		(173,397)
Currency translation adjustment	—	—		—		—		(208)		—		(208)		(82)		(290)
Issuance of restricted stock	44,686	—		—		—		—		—		—		—		—
Cancellation of restricted stock	(6,435)	—		—		—		—		18		18		6		24
Shares repurchased by the Company and held as treasury shares	(1,596)	—		(207)		—		—		—		(207)		—		(207)
Distribution to noncontrolling interest	—	—		—		—		—		—		—		(6,479)		(6,479)
Subsidiary equity issuance	—	—		—		(20,211)		—		—		(20,211)		25,371		5,160
Stock-based compensation	—	—		—		21,046		—		—		21,046		3,243		24,289
Balances, June 30, 2021	115,683,983	$	1,313	$	(1,427,094)	$	3,466,908	$	6,293	$	(1,944,668)	$	102,752	$	(456,591)	$	(353,839)

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

(in thousands, except share data)

(unaudited)

	For the Six Months Ended June 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	—	—		—		—		—		(313,375)		(313,375)		(154,657)		(468,032)
Currency translation adjustment	—	—		—		—		3,825		—		3,825		1,656		5,481
Issuance of restricted stock	597,236	7		—		9,281		—		—		9,288		—		9,288
Cancellation of restricted stock	(82,500)	(1)		—		1		—		—		—		—		—
Shares repurchased by the Company and held as treasury shares	(2,522,037)	—		(149,305)		—		—		—		(149,305)		—		(149,305)
Distribution to noncontrolling interest	—	—		—		—		—		—		—		(16,523)		(16,523)
Contribution from noncontrolling interest	—	—		—		48,559		—		—		48,559		1,474		50,033
Subsidiary equity issuance	—	—		—		(16,750)		—		—		(16,750)		19,646		2,896
Stock-based compensation	—	—		—		22,692		—		122		22,814		5,309		28,123
Balances, June 30, 2022	113,707,642	$	1,320	$	(1,585,678)	$	3,566,498	$	9,829	$	(2,601,331)	$	(609,362)	$	(764,892)	$	(1,374,254)

	For the Six Months Ended June 30, 2021
	Common stock
	Shares outstanding	Par value		Treasury stock		Additional paid-in capital		Accumulated other comprehensive income		Accumulated deficit		Total Wynn Resorts, Ltd. stockholders' equity (deficit)		Noncontrolling interests		Total stockholders' deficit
Balances, January 1, 2021	107,888,336	$	1,235	$	(1,422,531)	$	2,598,115	$	3,604	$	(1,532,420)	$	(351,997)	$	(385,320)	$	(737,317)
Net loss	—	—		—		—		—		(412,347)		(412,347)		(97,229)		(509,576)
Currency translation adjustment	—	—		—		—		2,689		—		2,689		1,053		3,742
Issuance of common stock, net of $17.7 million underwriter discounts, commissions and other expenses	7,475,000	75		—		841,821		—		—		841,896		—		841,896
Issuance of restricted stock	379,971	3		—		5,899		—		—		5,902		370		6,272
Cancellation of restricted stock	(19,534)	—		—		—		—		99		99		15		114
Shares repurchased by the Company and held as treasury shares	(39,790)	—		(4,563)		—		—		—		(4,563)		—		(4,563)
Distribution to noncontrolling interest	—	—		—		—		—		—		—		(6,479)		(6,479)
Subsidiary equity issuance	—	—		—		(20,211)		—		—		(20,211)		25,371		5,160
Stock-based compensation	—	—		—		41,284		—		—		41,284		5,628		46,912
Balances, June 30, 2021	115,683,983	$	1,313	$	(1,427,094)	$	3,466,908	$	6,293	$	(1,944,668)	$	102,752	$	(456,591)	$	(353,839)

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(468,032)	$	(509,576)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	347,524		368,428
Deferred income taxes	429		(767)
Stock-based compensation expense	28,495		49,453
Amortization of debt issuance costs	14,588		13,241
Loss on extinguishment of debt	—		1,322
Provision for credit losses	(3,145)		7,808
Change in derivatives fair value	(8,962)		(5,381)
Property charges and other	97,855		16,808
Increase (decrease) in cash from changes in:
Receivables, net	15,833		(53,799)
Inventories, prepaid expenses and other	(10,450)		(35,819)
Customer deposits	(21,949)		(144,407)
Accounts payable and accrued expenses	(149,637)		65,882
Net cash used in operating activities	(157,451)		(226,807)
Cash flows from investing activities:
Capital expenditures, net of construction payables and retention	(186,038)		(110,045)
Purchase of intangible and other assets	(9,375)		(15,741)
Proceeds from sale of assets and other	29		3,502
Net cash used in investing activities	(195,384)		(122,284)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	—		50,058
Repayments of long-term debt	(25,000)		(1,205,099)
Proceeds from issuance of Wynn Resorts, Limited common stock	—		841,896
Repurchase of common stock	(149,305)		(4,563)
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	(16,523)		(6,479)
Dividends paid	(1,291)		(388)
Finance lease payments	(8,602)		(7,784)
Payments for financing costs	(3,113)		(2,152)
Net cash used in financing activities	(150,906)		(329,849)
Effect of exchange rate on cash, cash equivalents and restricted cash	(3,590)		1,641
Cash, cash equivalents and restricted cash:
Decrease in cash, cash equivalents and restricted cash	(507,331)		(677,299)
Balance, beginning of period	2,531,067		3,486,384
Balance, end of period	$	2,023,736	$	2,809,085
Supplemental cash flow disclosures:
Cash paid for interest, net of amounts capitalized	$	292,218	$	294,011
Liability settled with shares of common stock	$	9,287	$	6,272
Accounts and construction payables related to property and equipment	$	47,305	$	66,701
Other liabilities related to intangible assets	$	5,586	$	13,796
Finance lease liabilities arising from obtaining finance lease assets	$	4,135	$	7,423

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

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 conditions 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, including the closures of casino operations in full as well as all non-essential business 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, casino operations at Wynn Palace and Wynn Macau resumed on a limited basis, and remain limited at the present time due to severely reduced visitation to Macau as a result of enhanced border controls. On August 2, 2022, the Macau government lifted most of the remaining enhanced COVID-19 restrictions which went into effect in June and July and limited non-gaming operations at Wynn Palace and Wynn Macau began to resume. Certain enhanced COVID-19 protective measures remain in effect at the present time with respect to gaming and non-gaming operations. 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 June 30, 2022, the Company had total cash and cash equivalents, excluding restricted cash, of $2.01 billion, and had access to $835.6 million of available borrowing capacity from the WRF Revolver and $211.5 million of available borrowing capacity from the WM Cayman II Revolver. 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 June 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 December 31, 2022. Under the Concession Extension Agreement, WRM paid the Macau

9

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

government MOP47.0 million (approximately $6.0 million) as a contract premium for the extension, and by no later than September 23, 2022 will provide a first demand bank guarantee of not less than MOP1,210.0 million (approximately $150.0 million) in favor of the Macau government for securing the fulfillment of its labor liabilities upon the expiration of the Concession Extension Agreement.

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 the 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 MOP5.0 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. The Macau government also published the administrative regulations and related documents in relation to a public tender for the awarding of new gaming concessions in July 2022. Upon the publication and entry into force of the revised gaming law on June 23, 2022, the Company is monitoring developments with respect to the Macau government's public tender process, including the adoption of additional administrative regulations, instructions, dispatches, and further adaptations to the current legal and regulatory system, and at this time 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 six months ended June 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. 

10

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

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. Certain amounts in the condensed consolidated financial statements for the second quarter of 2021 have been reclassified to be consistent with the current quarter presentation. These reclassifications had no effect on the previously reported net loss or operating loss.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the financial statements relate to and include, but are not limited to, inputs into the Company's estimated allowance for credit losses, estimates regarding the useful lives and recoverability of the cost of long-lived assets, fair value estimates of intangible assets and their estimated useful lives, and litigation and contingency estimates.

Gaming Taxes

The Company is subject to taxes based on gross gaming revenues in the jurisdictions in which it operates, subject to applicable jurisdictional adjustments. These gaming taxes are recorded as casino expenses in the accompanying Condensed Consolidated Statements of Operations. These taxes totaled $106.3 million and $234.2 million for the three months ended June 30, 2022 and 2021, respectively, and $283.2 million and $449.2 million for the six months ended June 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. The Company is currently assessing the impact the adoption of the new guidance will have on its consolidated financial statements.

Note 3 -    Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consisted of the following (in thousands):

	June 30, 2022		December 31, 2021
Cash and cash equivalents:
Cash (1)	$	1,298,200	$	2,021,553
Cash equivalents (2)	716,698		500,977
Total cash and cash equivalents	2,014,898		2,522,530
Restricted cash (3)	8,838		8,537
Total cash, cash equivalents and restricted cash	$	2,023,736	$	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 and cash held in a trust in accordance with WML's share award plan.

11

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):

	June 30, 2022		December 31, 2021
Casino	$	182,687	$	199,030
Hotel	31,719		36,749
Other	64,553		75,003
	278,959		310,782
Less: allowance for credit losses	(92,579)		(111,319)
	$	186,380	$	199,463

As of June 30, 2022 and December 31, 2021, approximately 63.9% 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 48.7% and 53.7% of gross casino receivables as of June 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): 

	June 30,
	2022		2021
Balance at beginning of year	$	111,319	$	100,329
Provision for credit losses	(3,145)