Table of Contents

 

 

FORM 6-K

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a–16 OR 15d–16

OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of October 2019

Commission File Number: 001-33178

 

 

MELCO RESORTS & ENTERTAINMENT LIMITED

 

 

36th Floor, The Centrium

60 Wyndham Street

Central

Hong Kong

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20–F or Form 40–F. Form 20-F  ☒ Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3–2(b) under the Securities Exchange Act of 1934. Yes  ☐ No  ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3–2(b): 82– N/A

 

 

 


Table of Contents

MELCO RESORTS & ENTERTAINMENT LIMITED

Form 6–K

TABLE OF CONTENTS

 

Signature

     3  

Exhibit 99.1

  


Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

MELCO RESORTS & ENTERTAINMENT

LIMITED

By:   /s/ Geoffrey Davis
Name:   Geoffrey Davis, CFA
Title:   Chief Financial Officer

Date: October 30, 2019

 

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EXHIBIT INDEX

 

Exhibit No.

  

Description

Exhibit 99.1    Unaudited Results for Third Quarter of 2019 and Quarterly Dividend Declaration
Unaudited Results for Thrid Quarter of 2019 and Quarterly Dividend Declaration

Exhibit 99.1

 

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FOR IMMEDIATE RELEASE

Melco Announces Unaudited Third Quarter 2019 Earnings and Declares Quarterly Dividend

Macau, Wednesday, October 30, 2019 – Melco Resorts & Entertainment Limited (Nasdaq: MLCO) (“Melco” or the “Company”), a developer, owner and operator of casino gaming and entertainment casino resort facilities in Asia and Europe, today reported its unaudited financial results for the third quarter of 2019.

In connection with the Company’s acquisition of a 75% interest in ICR Cyprus Holdings Limited (“ICR Cyprus”) from its parent company, Melco International Development Limited, on July 31, 2019, all periods presented in this press release have been restated to include the assets and liabilities and financial results of the ICR Cyprus group in accordance with applicable accounting standards.

Total operating revenues for the third quarter of 2019 were US$1.44 billion, representing an increase of approximately 16% from US$1.24 billion for the comparable period in 2018. The increase in total operating revenues was primarily attributable to better performance in the rolling chip and mass market table games segments.

Operating income for the third quarter of 2019 was US$175.2 million, compared with operating income of US$85.9 million in the third quarter of 2018, representing an increase of 104%.

Adjusted Property EBITDA(1) was US$418.2 million for the third quarter of 2019 compared to Adjusted Property EBITDA of US$301.4 million in the third quarter of 2018, representing an increase of 39%.

Net income attributable to Melco Resorts & Entertainment Limited for the third quarter of 2019 was US$83.2 million, or US$0.17 per ADS, compared with US$11.3 million, or US$0.02 per ADS, in the third quarter of 2018. The net income attributable to noncontrolling interests during the third quarter of 2019 was US$8.9 million and the net loss attributable to noncontrolling interests during the third quarter of 2018 was US$1.8 million, all of which related to Studio City, City of Dreams Manila and the Cyprus Operations.

Mr. Lawrence Ho, our Chairman and Chief Executive Officer, commented, “During the third quarter of 2019, all of Melco’s Macau integrated resorts continued to deliver strong mass table games revenue growth, which drove group-wide Property EBITDA to expand approximately 39% year-over-year to US$418 million.

MELCO RESORTS & ENTERTAINMENT LIMITED

Incorporated in the Cayman Islands with limited liability

新濠博亞娛樂有限公司

於開曼群島註冊成立的有限公司

 

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“During the third quarter of 2019, Melco’s mass market table games drop and gaming machine handle both reached all-time-record-highs. The third quarter of 2019 also marked the 16th consecutive quarter of positive year-over-year growth in mass market table games drop, highlighting the strength in Macau’s mass gaming market and Melco’s leadership position in the city’s mass and premium mass gaming segments.

“Melco’s portfolio of award-winning integrated resorts, commitment to excellence, and determination to push boundaries have been widely recognized, most recently by National Geographic Traveller with Morpheus being named as the winner of the Design Den category of the 2019 Big Sleep Awards.

“At Studio City, we continue to enhance our entertainment offerings with a series of property upgrades, which include the opening of the ‘Show House’ Night Club in February, the ‘Flip Out’ Trampoline Park in May, and the newly opened 50,000 square foot Legend Heroes VR Park in August.

“The Board has, after evaluating the Company’s current liquidity position and future expected capital needs, decided to declare another quarterly dividend of US$0.16512 per ADS.

“Melco remains committed to managing its balance sheet in a prudent manner. As of September 30, 2019, net debt to last twelve months EBITDA remained modest at approximately 2x, enabling us to continue with our regular dividend program, while retaining ample financial flexibility to reinvest in our existing properties and to pursue new development opportunities.

“Lastly, Japan continues to be a core focus for us. Melco has been a long-time supporter of Yokohama’s suitability to host one of Japan’s first integrated resorts. We have demonstrated our commitment and support to Yokohama through a series of local events across the city throughout 2019 and signed a lease on our Yokohama office late last year.

“In July, we announced our partnership with the Yokohama F. Marinos and the Manchester City Football Club. In September, we announced our ‘Yokohama First’ policy as we focus our Japan team on bringing to Yokohama the best IR the world has ever seen. We believe our focus on the Asian premium segment, a portfolio of high-quality assets, devotion to craftsmanship, dedication to world-class entertainment offerings, market-leading social safeguard systems, established track record of successful partnerships, culture of exceptional guest service, and commitment to employee development puts Melco in a strong position to help Yokohama realize the vision of developing a world-leading IR with a unique, Japanese touch.”

 

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City of Dreams Third Quarter Results

For the quarter ended September 30, 2019, total operating revenues at City of Dreams were US$787.3 million compared to US$600.9 million in the third quarter of 2018. City of Dreams generated Adjusted EBITDA of US$233.0 million in the third quarter of 2019 compared with Adjusted EBITDA of US$147.1 million in the third quarter of 2018. The year-over-year increase in Adjusted EBITDA was primarily a result of better performances in the rolling chip and mass market table games segments.

Rolling chip volume aggregated US$17.2 billion for the third quarter of 2019 versus US$12.3 billion in the third quarter of 2018. The rolling chip win rate was 2.69% in the third quarter of 2019 versus 2.45% in the third quarter of 2018. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop increased to US$1.41 billion in the third quarter of 2019 compared with US$1.34 billion in the third quarter of 2018. The mass market table games hold percentage was 33.2% in the third quarter of 2019 compared to 27.8% in the third quarter of 2018.

Gaming machine handle for the third quarter of 2019 was US$1.21 billion, compared with US$1.12 billion in the third quarter of 2018. The gaming machine win rate was 3.1% in the third quarter of 2019 versus 4.3% in the third quarter of 2018.

Total non-gaming revenue at City of Dreams in the third quarter of 2019 was US$104.2 million, compared with US$98.9 million in the third quarter of 2018.

Altira Macau Third Quarter Results

For the quarter ended September 30, 2019, total operating revenues at Altira Macau were US$113.9 million compared to US$90.2 million in the third quarter of 2018. Altira Macau generated Adjusted EBITDA of US$14.1 million in the third quarter of 2019 compared with negative Adjusted EBITDA of US$1.0 million in the third quarter of 2018. The year-over-year increase in Adjusted EBITDA was primarily a result of better performance in all gaming segments.

 

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Rolling chip volume totaled US$4.05 billion in the third quarter of 2019 versus US$5.48 billion in the third quarter of 2018. The rolling chip win rate was 3.62% in the third quarter of 2019 versus 2.39% in the third quarter of 2018. The expected rolling chip win rate range is 2.85% - 3.15%.

In the mass market table games segment, drop aggregated US$154.2 million in the third quarter of 2019 versus US$130.8 million in the third quarter of 2018. The mass market table games hold percentage was 21.6% in the third quarter of 2019 compared with 18.2% in the third quarter of 2018.

Gaming machine handle for the third quarter of 2019 was US$79.4 million, compared with US$33.7 million in the third quarter of 2018. The increase was primarily due to an increase in the average number of gaming machines to 178 in the third quarter of 2019, compared to 128 in the third quarter of 2018. The gaming machine win rate was 4.2% in the third quarter of 2019 versus 5.6% in the third quarter of 2018.

Total non-gaming revenue at Altira Macau in the third quarter of 2019 was US$6.8 million, compared with US$6.9 million in the third quarter of 2018.

Mocha Clubs Third Quarter Results

Total operating revenues from Mocha Clubs totaled US$29.5 million in the third quarter of 2019 compared to US$28.5 million in the third quarter of 2018. Mocha Clubs generated US$6.3 million of Adjusted EBITDA in the third quarter of 2019 compared with US$4.6 million in the same period in 2018.

Gaming machine handle for the third quarter of 2019 was US$633.6 million, compared with US$616.9 million in the third quarter of 2018. The gaming machine win rate was 4.7% for both quarters ended September 30, 2019 and 2018.

Studio City Third Quarter Results

For the quarter ended September 30, 2019, total operating revenues at Studio City were US$337.7 million compared to US$345.2 million in the third quarter of 2018. Studio City generated Adjusted EBITDA of US$106.4 million in the third quarter of 2019 compared with Adjusted EBITDA of US$89.4 million in the third quarter of 2018. The year-over-year increase in Adjusted EBITDA was primarily a result of better performance in the mass market table games segment, partially offset by a softer performance in the rolling chip segment.

 

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Studio City’s rolling chip volume aggregated US$2.77 billion in the third quarter of 2019 versus US$5.09 billion in the third quarter of 2018. The rolling chip win rate was 2.71% in the third quarter of 2019 versus 3.12% in the third quarter of 2018. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop increased to US$880.6 million in the third quarter of 2019 compared with US$807.9 million in the third quarter of 2018. The mass market table games hold percentage was 28.4% in the third quarter of 2019 compared to 27.2% in the third quarter of 2018.

Gaming machine handle for the third quarter of 2019 was US$711.2 million, compared with US$641.6 million in the third quarter of 2018. The gaming machine win rate was 2.8% in the third quarter of 2019 versus 2.9% in the third quarter of 2018.

Total non-gaming revenue at Studio City in the third quarter of 2019 was US$49.4 million, compared with US$50.1 million in the third quarter of 2018.

City of Dreams Manila Third Quarter Results

For the quarter ended September 30, 2019, total operating revenues at City of Dreams Manila were US$130.5 million compared to US$141.7 million in the third quarter of 2018. City of Dreams Manila generated Adjusted EBITDA of US$49.9 million in the third quarter of 2019 compared to US$55.2 million in the comparable period of 2018.

With increased competition in the market, City of Dreams Manila’s rolling chip volume aggregated US$2.44 billion in the third quarter of 2019 versus US$2.98 billion in the third quarter of 2018. The rolling chip win rate was 0.89% in the third quarter of 2019 versus 2.67% in the third quarter of 2018. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop decreased to US$202.1 million for the third quarter of 2019, compared with US$204.9 million in the third quarter of 2018. The mass market table games hold percentage was 31.3% in the third quarter of 2019 compared to 32.4% in the third quarter of 2018.

 

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Gaming machine handle for the third quarter of 2019 was US$1.02 billion, compared with US$0.93 billion in the third quarter of 2018. The gaming machine win rate was 5.3% for both quarters ended September 30, 2019 and 2018.

Total non-gaming revenue at City of Dreams Manila in the third quarter of 2019 was US$32.3 million, compared with US$28.9 million in the third quarter of 2018.

Cyprus Operations Third Quarter Results

The Company is currently operating a temporary casino, the first casino in the Republic of Cyprus, and three satellite casinos with a fourth satellite casino scheduled to open in the coming months (“Cyprus Casinos”). Upon the opening of City of Dreams Mediterranean in 2021, the Company will also continue to operate the four satellite casinos while operation of the temporary casino will cease.

For the quarter ended September 30, 2019, total operating revenues at Cyprus Casinos were US$26.7 million compared to US$16.9 million in the third quarter of 2018. Cyprus Casinos generated Adjusted EBITDA of US$8.5 million in the third quarter of 2019 compared with Adjusted EBITDA of US$6.0 million in the third quarter of 2018.

Rolling chip volume totaled US$38.9 million for the third quarter of 2019. The rolling chip win rate was 8.66% in the third quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop aggregated US$36.2 million in the third quarter of 2019 versus US$37.9 million in the third quarter of 2018. The mass market table games hold percentage was 21.9% in the third quarter of 2019 compared to 21.2% in the third quarter of 2018.

Gaming machine handle for the third quarter of 2019 was US$311.5 million, compared with US$158.8 million in the third quarter of 2018. The gaming machine win rate was 5.0% in the third quarter of 2019 versus 5.6% in the third quarter of 2018.

Other Factors Affecting Earnings

Total net non-operating expenses for the third quarter of 2019 were US$81.3 million, which mainly included interest expenses of US$80.1 million.

 

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Depreciation and amortization costs of US$160.5 million were recorded in the third quarter of 2019 of which US$14.2 million was related to the amortization expense for our gaming subconcession and US$5.7 million was related to the amortization expense for the land use rights.

The Adjusted EBITDA for Studio City for the three months ended September 30, 2019 referred to in this press release is US$15.5 million more than the Adjusted EBITDA of Studio City contained in the earnings release for Studio City International Holdings Limited (“SCIHL”) dated October 30, 2019 (the “Studio City earnings release”). The Adjusted EBITDA of Studio City contained in the Studio City earnings release includes certain intercompany charges that are not included in the Adjusted EBITDA for Studio City contained in this press release. Such intercompany charges include, among other items, fees and shared service charges billed between SCIHL and its subsidiaries and certain subsidiaries of Melco. Additionally, Adjusted EBITDA of Studio City included in this press release does not reflect certain costs related to the VIP operations at Studio City Casino.

Financial Position and Capital Expenditures

Total cash and bank balances as of September 30, 2019 aggregated US$1.74 billion, including US$66.2 million of restricted cash, which was primarily related to Studio City. Total debt, net of unamortized deferred financing costs at the end of the third quarter of 2019 was US$4.74 billion.

Capital expenditures for the third quarter of 2019 were US$79.3 million, which primarily related to various projects at City of Dreams, City of Dreams Manila and Studio City as well as developments at City of Dreams Mediterranean.

Dividend Declaration

On October 30, 2019, our Board considered and approved the declaration and payment of a quarterly dividend of US$0.05504 per ordinary share (equivalent to US$0.16512 per ADS) for the third quarter of 2019 (the “Quarterly Dividend”). The Quarterly Dividend will be paid on or about November 22, 2019 to our shareholders whose names appear on the register of members of the Company at the close of business on November 12, 2019, being the record date for determination of entitlements to the Quarterly Dividend.

 

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Conference Call Information

Melco Resorts & Entertainment Limited will hold a conference call to discuss its third quarter 2019 financial results on Wednesday, October 30, 2019 at 8:30 a.m. Eastern Time (8:30 p.m. Hong Kong Time). To join the conference call, please use the dial-in details below:

 

US Toll Free

   1 866 519 4004

US Toll / International

   1 845 675 0437

HK Toll

   852 3018 6771

HK Toll Free

   800 906 601

Japan Toll

   81 3 4503 6012

Japan Toll Free

   012 092 5376

UK Toll Free

   080 8234 6646

Australia Toll

   61 290 833 212

Australia Toll Free

   1 800 411 623

Philippines Toll Free

   1 800 1612 0306

Passcode

   MLCO

An audio webcast will also be available at http://www.melco-resorts.com.

To access the replay, please use the dial-in details below:

 

US Toll Free

   1 855 452 5696

US Toll / International

   1 646 254 3697

HK Toll Free

   800 963 117

Japan Toll

   81 3 4580 6717

Japan Toll Free

   012 095 9034

Philippines Toll Free

   1 800 1612 0166

Conference ID

   3988122

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Melco Resorts & Entertainment Limited (the “Company”) may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. These factors include, but are not limited to, (i) growth of the gaming market and visitations in Macau, the Philippines and the Republic of Cyprus, (ii) capital and credit market volatility, (iii) local and global economic conditions, (iv) our anticipated growth strategies, (v) gaming authority and other governmental approvals and regulations, and (vi) our future business development, results of operations and financial condition. In some cases, forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “anticipate”, “target”, “aim”, “estimate”, “intend”, “plan”, “believe”, “potential”, “continue”, “is/are likely to” or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company undertakes no duty to update such information, except as required under applicable law.

 

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Non-GAAP Financial Measures

 

(1)

“Adjusted EBITDA” is earnings before interest, taxes, depreciation, amortization, pre-opening costs, development costs, property charges and other, share-based compensation, payments to the Philippine parties under the cooperative arrangement (the “Philippine Parties”), land rent to Belle Corporation and other non-operating income and expenses. “Adjusted Property EBITDA” is earnings before interest, taxes, depreciation, amortization, pre-opening costs, development costs, property charges and other, share-based compensation, payments to the Philippine Parties, land rent to Belle Corporation, Corporate and Other expenses and other non-operating income and expenses. Adjusted EBITDA and Adjusted Property EBITDA are presented exclusively as supplemental disclosures because management believes they are widely used to measure the performance, and as a basis for valuation, of gaming companies. Management uses Adjusted EBITDA and Adjusted Property EBITDA as measures of the operating performance of its segments and to compare the operating performance of its properties with those of its competitors. The Company also presents Adjusted EBITDA and Adjusted Property EBITDA because they are used by some investors as ways to measure a company’s ability to incur and service debt, make capital expenditures, and meet working capital requirements. Gaming companies have historically reported Adjusted EBITDA and Adjusted Property EBITDA as supplements to financial measures in accordance with U.S. GAAP. However, Adjusted EBITDA and Adjusted Property EBITDA should not be considered as alternatives to operating income as indicators of the Company’s performance, as alternatives to cash flows from operating activities as measures of liquidity, or as alternatives to any other measure determined in accordance with U.S. GAAP. Unlike net income, Adjusted EBITDA and Adjusted Property EBITDA do not include depreciation and amortization or interest expense and, therefore, do not reflect current or future capital expenditures or the cost of capital. The Company compensates for these limitations by using Adjusted EBITDA and Adjusted Property EBITDA as only two of several comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance.

Such U.S. GAAP measurements include operating income, net income, cash flows from operations and cash flow data. The Company has significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other recurring and nonrecurring charges, which are not reflected in Adjusted EBITDA or Adjusted Property EBITDA. Also, the Company’s calculation of Adjusted EBITDA and Adjusted Property EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited. Reconciliations of adjusted EBITDA and Adjusted Property EBITDA with the most comparable financial measures calculated and presented in accordance with U.S. GAAP are provided herein immediately following the financial statements included in this press release.

 

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(2)

“Adjusted net income” is net income before pre-opening costs, development costs, property charges and other, loss on extinguishment of debt and costs associated with debt modification, net of noncontrolling interests and taxes calculated using specific tax treatments applicable to the adjustments based on their respective jurisdictions. Adjusted net income attributable to Melco Resorts & Entertainment Limited and adjusted net income attributable to Melco Resorts & Entertainment Limited per share (“EPS”) are presented as supplemental disclosures because management believes they are widely used to measure the performance, and as a basis for valuation, of gaming companies. These measures are used by management and/or evaluated by some investors, in addition to income and EPS computed in accordance with U.S. GAAP, as an additional basis for assessing period-to-period results of our business. Adjusted net income attributable to Melco Resorts & Entertainment Limited and adjusted net income attributable to Melco Resorts & Entertainment Limited per share may be different from the calculation methods used by other companies and, therefore, comparability may be limited. Reconciliations of adjusted net income attributable to Melco Resorts & Entertainment Limited with the most comparable financial measures calculated and presented in accordance with U.S. GAAP are provided herein immediately following the financial statements included in this press release.

About Melco Resorts & Entertainment Limited

The Company, with its American depositary shares listed on the NASDAQ Global Select Market (NASDAQ: MLCO), is a developer, owner and operator of casino gaming and entertainment casino resort facilities in Asia and Europe. The Company currently operates Altira Macau (www.altiramacau.com), a casino hotel located at Taipa, Macau and City of Dreams (www.cityofdreamsmacau.com), an integrated urban casino resort located in Cotai, Macau. Its business also includes the Mocha Clubs (www.mochaclubs.com), which comprise the largest non-casino based operations of electronic gaming machines in Macau. The Company also majority owns and operates Studio City (www.studiocity-macau.com), a cinematically-themed integrated entertainment, retail and gaming resort in Cotai, Macau. In the Philippines, a Philippine subsidiary of the Company currently operates and manages City of Dreams Manila (www.cityofdreamsmanila.com), a casino, hotel, retail and entertainment integrated resort in the Entertainment City complex in Manila. In Europe, the Company is currently developing City of Dreams Mediterranean (www.cityofdreamsmed.com.cy) in the Republic of Cyprus, which is scheduled to open in 2021 and expected to be the largest and premier integrated destination resort in Europe. The Company is currently operating a temporary casino, the first casino in the Republic of Cyprus, and three satellite casinos with a fourth satellite casino scheduled to open in the coming months (“Cyprus Casinos”). Upon the opening of City of Dreams Mediterranean, the Company will also continue to operate the four satellite casinos while operation of the temporary casino will cease. The Company also holds equity interests in Crown Resorts Limited (“Crown”), a company listed on the Australian Securities Exchange and which operates two of Australia’s leading integrated resorts, Crown Melbourne Entertainment Complex and Crown Perth Entertainment Complex. In the United Kingdom, Crown operates Crown Aspinalls, a high-end licensed casino in London. Crown’s development projects include the Crown Sydney Hotel Resort at Barangaroo on Sydney Harbour. Crown also holds equity interests in the Aspers Group and Nobu and has interests in various digital businesses. For more information about the Company, please visit www.melco-resorts.com.

 

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The Company is strongly supported by its single largest shareholder, Melco International Development Limited, a company listed on the Main Board of The Stock Exchange of Hong Kong Limited and is substantially owned and led by Mr. Lawrence Ho, who is the Chairman, Executive Director and Chief Executive Officer of the Company.

For investment community, please contact:

Richard Huang

Director, Investor Relations

Tel: +852 2598 3619

Email: richardlshuang@melco-resorts.com

For media enquiries, please contact:

Chimmy Leung

Executive Director, Corporate Communications

Tel: +852 3151 3765

Email: chimmyleung@melco-resorts.com

 

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Melco Resorts & Entertainment Limited and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands of U.S. dollars, except share and per share data)

 

     Three Months Ended     Nine Months Ended  
     September 30,     September 30,  
     2019     2018     2019     2018  
     (Unaudited)     (Restated)(3)     (Unaudited)     (Restated)(3)  

OPERATING REVENUES

        

Casino

   $ 1,242,192     $ 1,046,723     $ 3,727,770     $ 3,270,432  

Rooms

     88,438       86,149       258,918       221,515  

Food and beverage

     59,081       53,284       172,745       148,114  

Entertainment, retail and other

     48,945       50,181       126,727       136,895  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating revenues

     1,438,656       1,236,337       4,286,160       3,776,956  
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING COSTS AND EXPENSES

        

Casino

     (823,115     (731,600     (2,423,186     (2,196,464

Rooms

     (22,887     (22,819     (67,225     (55,787

Food and beverage

     (44,966     (42,938     (133,452     (116,994

Entertainment, retail and other

     (24,792     (25,470     (73,039     (70,836

General and administrative

     (145,123     (148,589     (423,000     (381,898

Payments to the Philippine Parties

     (8,740     (10,754     (45,995     (45,748

Pre-opening costs

     (525     (4,078     (4,638     (50,392

Development costs

     (30,433     (4,821     (39,873     (11,728

Amortization of gaming subconcession

     (14,206     (14,309     (42,601     (42,928

Amortization of land use rights

     (5,663     (5,704     (16,982     (17,112

Depreciation and amortization

     (140,640     (134,559     (422,362     (355,993

Property charges and other

     (2,372     (4,774     (19,578     (20,957
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (1,263,462     (1,150,415     (3,711,931     (3,366,837
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING INCOME

     175,194       85,922       574,229       410,119  
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-OPERATING INCOME (EXPENSES)

        

Interest income

     3,597       1,354       7,169       4,049  

Interest expenses, net of capitalized interest

     (80,123     (70,769     (225,668     (190,888

Other finance costs

     (883     (1,299     (1,673     (4,066

Foreign exchange losses, net

     (79     (5,736     (9,409     (5,674

Other (expenses) income, net

     (3,815     1,561       (20,166     3,012  

Loss on extinguishment of debt

     —         (213     (3,721     (213

Costs associated with debt modification

     —         —         (579      
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating expenses, net

     (81,303     (75,102     (254,047     (193,780
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME BEFORE INCOME TAX

     93,891       10,820       320,182       216,339  

INCOME TAX EXPENSE

     (1,788     (1,319     (6,777     (5,715
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME

     92,103       9,501       313,405       210,624  

NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

     (8,913     1,806       (8,371     3,092  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO MELCO RESORTS & ENTERTAINMENT LIMITED

   $ 83,190     $ 11,307     $ 305,034     $ 213,716  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO MELCO RESORTS & ENTERTAINMENT LIMITED PER SHARE:

        

Basic

   $ 0.058     $ 0.007     $ 0.212     $ 0.140  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.058     $ 0.007     $ 0.211     $ 0.139  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO MELCO RESORTS & ENTERTAINMENT LIMITED PER ADS:

        

Basic

   $ 0.174     $ 0.022     $ 0.637     $ 0.421  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.173     $ 0.022     $ 0.634     $ 0.417  
  

 

 

   

 

 

   

 

 

   

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING USED IN NET INCOME ATTRIBUTABLE TO MELCO RESORTS & ENTERTAINMENT LIMITED PER SHARE CALCULATION:

        

Basic

     1,436,810,952       1,514,412,109       1,436,357,772       1,524,031,084  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     1,443,031,676       1,521,685,031       1,443,251,443       1,535,501,155  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(3) 

In connection with the Company’s acquisition of a 75% interest in ICR Cyprus Holdings Limited (“ICR Cyprus”) from its parent company, Melco International Development Limited, on July 31, 2019, all periods presented in these financial statements have been restated to include the assets and liabilities and financial results of the ICR Cyprus group in accordance with applicable accounting standards.

 

12


Melco Resorts & Entertainment Limited and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands of U.S. dollars)

 

     September 30,     December 31,  
     2019     2018  
     (Unaudited)     (Restated)(3)  

ASSETS

    

CURRENT ASSETS

    

Cash and cash equivalents

   $ 1,669,309     $ 1,472,423  

Investment securities

     74,107       91,598  

Restricted cash

     66,037       48,037  

Accounts receivable, net

     319,935       242,089  

Amounts due from affiliated companies

     409       87,394  

Inventories

     42,239       41,093  

Prepaid expenses and other current assets

     89,273       95,176  
  

 

 

   

 

 

 

Total current assets

     2,261,309       2,077,810  
  

 

 

   

 

 

 

PROPERTY AND EQUIPMENT, NET

     5,695,451       5,784,343  

GAMING SUBCONCESSION, NET

     154,701       197,533  

INTANGIBLE ASSETS, NET

     32,380       31,454  

GOODWILL

     81,278       81,376  

LONG-TERM PREPAYMENTS, DEPOSITS AND OTHER ASSETS

     180,303       186,708  

INVESTMENT SECURITIES

     551,551       —    

RESTRICTED CASH

     129       129  

DEFERRED TAX ASSETS

     4,580       2,992  

OPERATING LEASE RIGHT-OF-USE ASSETS

     145,500       —    

LAND USE RIGHTS, NET

     741,756       759,651  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 9,848,938     $ 9,121,996  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

CURRENT LIABILITIES

    

Accounts payable

   $ 25,161     $ 25,003  

Accrued expenses and other current liabilities

     1,485,735       1,671,630  

Income tax payable

     7,552       4,903  

Operating lease liabilities, current

     36,812       —    

Finance lease liabilities, current

     37,706       34,659  

Current portion of long-term debt, net

     933,756       395,547  

Amounts due to affiliated companies

     6,368       15,186  
  

 

 

   

 

 

 

Total current liabilities

     2,533,090       2,146,928  
  

 

 

   

 

 

 

LONG-TERM DEBT, NET

     3,804,089       3,665,370  

OTHER LONG-TERM LIABILITIES

     17,068       29,286  

DEFERRED TAX LIABILITIES

     57,266       54,746  

OPERATING LEASE LIABILITIES, NON-CURRENT

     125,308       —    

FINANCE LEASE LIABILITIES, NON-CURRENT

     255,494       253,374  
  

 

 

   

 

 

 

TOTAL LIABILITIES

     6,792,315       6,149,704  
  

 

 

   

 

 

 

SHAREHOLDERS’ EQUITY

    

Ordinary shares

     14,565       15,385  

Treasury shares

     (91,413     (657,389

Additional paid-in capital

     3,169,623       3,715,579  

Accumulated other comprehensive losses

     (81,557     (59,332

Accumulated losses

     (633,825     (716,966
  

 

 

   

 

 

 

Total Melco Resorts & Entertainment Limited shareholders’ equity

     2,377,393       2,297,277  

Noncontrolling interests

     679,230       675,015  
  

 

 

   

 

 

 

Total equity

     3,056,623       2,972,292  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 9,848,938     $ 9,121,996  
  

 

 

   

 

 

 

 

13


Melco Resorts & Entertainment Limited and Subsidiaries

Reconciliation of Net Income Attributable to Melco Resorts & Entertainment Limited to

Adjusted Net Income Attributable to Melco Resorts & Entertainment Limited

(In thousands of U.S. dollars, except share and per share data)

 

    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2019     2018     2019     2018  
    (Unaudited)     (Restated)(3)     (Unaudited)     (Restated)(3)  

Net Income Attributable to Melco Resorts & Entertainment Limited

  $ 83,190     $ 11,307     $ 305,034     $ 213,716  

Pre-opening Costs

    525       4,078       4,638       50,392  

Development Costs

    30,433       4,821       39,873       11,728  

Property Charges and Other

    2,372       4,774       19,578       20,957  

Loss on Extinguishment of Debt

    —         213       3,721       213  

Costs Associated with Debt Modification

    —         —         579       —    

Income Tax Impact on Adjustments

    (1,934     —         (4,216     (179

Noncontrolling Interests Impact on Adjustments

    (99     (956     (7,183     (6,196
 

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income Attributable to Melco Resorts & Entertainment Limited

  $ 114,487     $ 24,237     $ 362,024     $ 290,631  
 

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED NET INCOME ATTRIBUTABLE TO MELCO RESORTS & ENTERTAINMENT LIMITED PER SHARE:

       

Basic

  $ 0.080     $ 0.016     $ 0.252     $ 0.191  
 

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

  $ 0.079     $ 0.016     $ 0.251     $ 0.189  
 

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED NET INCOME ATTRIBUTABLE TO MELCO RESORTS & ENTERTAINMENT LIMITED PER ADS:

       

Basic

  $ 0.239     $ 0.048     $ 0.756     $ 0.572  
 

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

  $ 0.238     $ 0.048     $ 0.752     $ 0.567  
 

 

 

   

 

 

   

 

 

   

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING USED IN ADJUSTED NET INCOME ATTRIBUTABLE TO MELCO RESORTS & ENTERTAINMENT LIMITED PER SHARE CALCULATION:

       

Basic

    1,436,810,952       1,514,412,109       1,436,357,772       1,524,031,084  
 

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

    1,443,031,676       1,521,685,031       1,443,251,443       1,535,501,155  
 

 

 

   

 

 

   

 

 

   

 

 

 

 

14


Melco Resorts & Entertainment Limited and Subsidiaries

Reconciliation of Operating Income (Loss) to Adjusted EBITDA and Adjusted Property EBITDA

(In thousands of U.S. dollars)

 

    Three Months Ended September 30, 2019  
    Altira
Macau
    Mocha     City of
Dreams
    Studio
City
    City of
Dreams
Manila
    Cyprus
Operations
    Corporate
and Other
    Total  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Operating Income (Loss)

  $ 7,797     $ 4,584     $ 167,828     $ 60,424     $ 19,788     $ 5,452     $ (90,679   $ 175,194  

Payments to the Philippine Parties

    —         —         —         —         8,740       —         —         8,740  

Land Rent to Belle Corporation

    —         —         —         —         765       —         —         765  

Pre-opening Costs

    —         —         24       6       —         495       —         525  

Development Costs

    —         —         —         —         —         —         30,433       30,433  

Depreciation and Amortization

    6,173       1,618       63,135       45,592       19,381       2,541       22,069       160,509  

Share-based Compensation

    54       39       1,124       421       371       52       5,774       7,835  

Property Charges and Other

    31       33       889       (7     826       —         600       2,372  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

    14,055       6,274       233,000       106,436       49,871       8,540       (31,803     386,373  

Corporate and Other Expenses

    —         —         —         —         —         —         31,803       31,803  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

  $ 14,055     $ 6,274     $ 233,000     $ 106,436     $ 49,871     $ 8,540     $ —       $ 418,176  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Three Months Ended September 30, 2018  
    Altira
Macau
    Mocha     City of
Dreams
    Studio
City
    City of
Dreams
Manila
    Cyprus
Operations
    Corporate
and Other
    Total  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Restated)(3)     (Restated)(3)     (Restated)(3)  

Operating Income (Loss)

  $ (5,993   $ 2,445     $ 76,044     $ 43,153     $ 24,760     $ 2,254     $ (56,741   $ 85,922  

Payments to the Philippine Parties

    —         —         —         —         10,754       —         —         10,754  

Land Rent to Belle Corporation

    —         —         —         —         739       —         —         739  

Pre-opening Costs

    —         —         1,597       357       20       2,104       —         4,078  

Development Costs

    —         —         —         —         —         —         4,821       4,821  

Depreciation and Amortization

    4,951       2,124       63,624       44,892       18,618       1,633       18,730       154,572  

Share-based Compensation

    107       36       903       388       342       26       5,237       7,039  

Property Charges and Other

    (21     —         4,975       563       —         —         (743     4,774  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

    (956     4,605       147,143       89,353       55,233       6,017       (28,696     272,699  

Corporate and Other Expenses

    —         —         —         —         —         —         28,696       28,696  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

  $ (956   $ 4,605     $ 147,143     $ 89,353     $ 55,233     $ 6,017     $ —       $ 301,395  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

15


Melco Resorts & Entertainment Limited and Subsidiaries

Reconciliation of Operating Income (Loss) to Adjusted EBITDA and Adjusted Property EBITDA

(In thousands of U.S. dollars)

 

    Nine Months Ended September 30, 2019  
    Altira
Macau
    Mocha     City of
Dreams
    Studio
City
    City of
Dreams
Manila
    Cyprus
Operations
    Corporate
and Other
    Total  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Operating Income (Loss)

  $ 19,985     $ 12,150     $ 509,575     $ 148,088     $ 82,244     $ 11,145     $ (208,958   $ 574,229  

Payments to the Philippine Parties

    —         —         —         —         45,995       —         —         45,995  

Land Rent to Belle Corporation

    —         —         —         —         2,283       —         —         2,283  

Pre-opening Costs

    25       —         29       2,555       (7     2,036       —         4,638  

Development Costs

    —         —         —         —         —         —         39,873       39,873  

Depreciation and Amortization

    17,480       5,609       195,130       137,361       57,531       7,806       61,028       481,945  

Share-based Compensation

    258       120       2,835       1,113       1,001       128       17,059       22,514  

Property Charges and Other

    73       (328     4,766       8,535       4,182       —         2,350       19,578  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

    37,821       17,551       712,335       297,652       193,229       21,115       (88,648     1,191,055  

Corporate and Other Expenses

    —         —         —         —         —         —         88,648       88,648  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

  $ 37,821     $ 17,551     $ 712,335     $ 297,652     $ 193,229     $ 21,115     $ —       $ 1,279,703  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Nine Months Ended September 30, 2018  
    Altira
Macau
    Mocha     City of
Dreams
    Studio
City
    City of
Dreams
Manila
    Cyprus
Operations
    Corporate
and Other
    Total  
    (Unaudited)     (Unaudited)     (Restated)(3)     (Unaudited)     (Unaudited)     (Restated)(3)     (Restated)(3)     (Restated)(3)  

Operating Income (Loss)

  $ 20,198     $ 10,847     $ 334,414     $ 132,510     $ 97,084     $ (12,791   $ (172,143   $ 410,119  

Payments to the Philippine Parties

    —         —         —         —         45,748       —         —         45,748  

Land Rent to Belle Corporation

    —         —         —         —         2,254       —         —         2,254  

Pre-opening Costs

    —         —         32,657       410       20       17,305       —         50,392  

Development Costs

    —         —         —         —         —         —         11,728       11,728  

Depreciation and Amortization

    14,470       6,232       146,447       134,437       56,594       1,633       56,220       416,033  

Share-based Compensation

    278       111       2,599       1,154       (399     53       14,422       18,218  

Property Charges and Other

    440       (432     10,517       4,094       28       —         6,310       20,957  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

    35,386       16,758       526,634       272,605       201,329       6,200       (83,463     975,449  

Corporate and Other Expenses

    —         —         —         —         —         —         83,463       83,463  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

  $ 35,386     $ 16,758     $ 526,634     $ 272,605     $ 201,329     $ 6,200     $ —       $ 1,058,912  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

16


Melco Resorts & Entertainment Limited and Subsidiaries

Reconciliation of Net Income Attributable to Melco Resorts & Entertainment Limited to

Adjusted EBITDA and Adjusted Property EBITDA

(In thousands of U.S. dollars)

 

     Three Months Ended     Nine Months Ended  
     September 30,     September 30,  
     2019      2018     2019      2018  
     (Unaudited)      (Restated)(3)     (Unaudited)      (Restated)(3)  

Net Income Attributable to Melco Resorts & Entertainment Limited

   $ 83,190      $ 11,307     $ 305,034      $ 213,716  

Net Income (Loss) Attributable to Noncontrolling Interests

     8,913        (1,806     8,371        (3,092
  

 

 

    

 

 

   

 

 

    

 

 

 

Net Income

     92,103        9,501       313,405        210,624  

Income Tax Expense

     1,788        1,319       6,777        5,715  

Interest and Other Non-Operating Expenses, Net

     81,303        75,102       254,047        193,780  

Property Charges and Other

     2,372        4,774       19,578        20,957  

Share-based Compensation

     7,835        7,039       22,514        18,218  

Depreciation and Amortization

     160,509        154,572       481,945        416,033  

Development Costs

     30,433        4,821       39,873        11,728  

Pre-opening Costs

     525        4,078       4,638        50,392  

Land Rent to Belle Corporation

     765        739       2,283        2,254  

Payments to the Philippine Parties

     8,740        10,754       45,995        45,748  
  

 

 

    

 

 

   

 

 

    

 

 

 

Adjusted EBITDA

     386,373        272,699       1,191,055        975,449  

Corporate and Other Expenses

     31,803        28,696       88,648        83,463  
  

 

 

    

 

 

   

 

 

    

 

 

 

Adjusted Property EBITDA

   $ 418,176      $ 301,395     $ 1,279,703      $ 1,058,912  
  

 

 

    

 

 

   

 

 

    

 

 

 

 

17


Melco Resorts & Entertainment Limited and Subsidiaries

Supplemental Data Schedule

 

    

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 
     2019     2018     2019     2018  

Room Statistics:

        

Altira Macau

        

Average daily rate (4)

   $ 175     $ 187     $ 177     $ 190  

Occupancy per available room

     99     99     99     99

Revenue per available room (5)

   $ 173     $ 186     $ 175     $ 188  

City of Dreams

        

Average daily rate (4)

   $ 208     $ 215     $ 207     $ 208  

Occupancy per available room

     98     96     98     97

Revenue per available room (5)

   $ 204     $ 208     $ 202     $ 202  

Studio City

        

Average daily rate (4)

   $ 135     $ 141     $ 134     $ 138  

Occupancy per available room

     100     100     100     100

Revenue per available room (5)

   $ 135     $ 141     $ 134     $ 138  

City of Dreams Manila

        

Average daily rate (4)

   $ 179     $ 158     $ 175     $ 158  

Occupancy per available room

     98     98     98     98

Revenue per available room (5)

   $ 176     $ 155     $ 172     $ 155  

Other Information:

        

Altira Macau

        

Average number of table games

     102       106       104       104  

Average number of gaming machines

     178       128       173       127  

Table games win per unit per day (6)

   $  19,152     $  15,873     $  19,858     $  19,440  

Gaming machines win per unit per day (7)

   $ 202     $ 160     $ 214     $ 150  

City of Dreams

        

Average number of table games

     517       467       517       476  

Average number of gaming machines

     863       765       836       707  

Table games win per unit per day (6)

   $ 19,520     $ 15,678     $ 18,387     $ 15,605  

Gaming machines win per unit per day (7)

   $ 478     $ 691     $ 511     $ 807  

Studio City

        

Average number of table games

     292       288       293       292  

Average number of gaming machines

     896       938       952       947  

Table games win per unit per day (6)

   $ 12,126     $ 14,287     $ 12,481     $ 14,361  

Gaming machines win per unit per day (7)

   $ 243     $ 219     $ 226     $ 235  

City of Dreams Manila

        

Average number of table games

     311       307       306       300  

Average number of gaming machines

     2,267       1,920       2,260       1,885  

Table games win per unit per day (6)

   $ 2,975     $ 5,165     $ 4,451     $ 5,579  

Gaming machines win per unit per day (7)

   $ 259     $ 280     $ 256     $ 284  

Cyprus Operations

        

Average number of table games

     38       33       38       33  

Average number of gaming machines

     409       254       372       254  

Table games win per unit per day (6)

   $ 3,256     $ 2,649     $ 2,562     $ 2,626  

Gaming machines win per unit per day (7)

   $ 416     $ 380     $ 432     $ 379  

 

(4)

Average daily rate is calculated by dividing total room revenues including complimentary rooms (less service charges, if any) by total occupied rooms including complimentary rooms

(5)

Revenue per available room is calculated by dividing total room revenues including complimentary rooms (less service charges, if any) by total rooms available

(6)

Table games win per unit per day is shown before discounts, commissions, non-discretionary incentives (including our point-loyalty programs) and allocating casino revenues related to goods and services provided to gaming patrons on a complimentary basis

(7)

Gaming machines win per unit per day is shown before non-discretionary incentives (including our point-loyalty programs) and allocating casino revenues related to goods and services provided to gaming patrons on a complimentary basis

 

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