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 November 2020

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):  ☐

 

 

 


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: November 5, 2020

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Table of Contents

EXHIBIT INDEX

 

Exhibit No.

  

Description

Exhibit 99.1    Unaudited Results for Third Quarter of 2020
Unaudited Results for Third Quarter of 2020

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

Melco Announces Unaudited Third Quarter 2020 Earnings

Macau, Thursday, November 5, 2020 – Melco Resorts & Entertainment Limited (Nasdaq: MLCO) (“Melco” or the “Company”), a developer, owner, and operator of integrated resort facilities in Asia and Europe, today reported its unaudited financial results for the third quarter of 2020.

Total operating revenues for the third quarter of 2020 were US$0.21 billion, representing a decrease of approximately 85% from US$1.44 billion for the comparable period in 2019. The decrease in total operating revenues was primarily attributable to softer performance in all gaming segments and non-gaming operations as a result of the COVID-19 pandemic, which resulted in a significant decline in inbound tourism in the third quarter of 2020.

Operating loss for the third quarter of 2020 was US$275.0 million, compared with operating income of US$175.2 million in the third quarter of 2019.

Melco generated negative Adjusted Property EBITDA(1) of US$76.7 million in the third quarter of 2020, compared with Adjusted Property EBITDA of US$418.2 million in the third quarter of 2019.

Net loss attributable to Melco Resorts & Entertainment Limited for the third quarter of 2020 was US$331.6 million, or US$0.70 per ADS, compared with net income attributable to Melco Resorts & Entertainment Limited of US$83.2 million, or US$0.17 per ADS, in the third quarter of 2019. The net loss attributable to noncontrolling interests during the third quarter of 2020 was US$55.3 million and the net income attributable to noncontrolling interests during the third quarter of 2019 was US$8.9 million, all of which were related to Studio City, City of Dreams Manila, and the Cyprus Operations.

Mr. Lawrence Ho, our Chairman and Chief Executive Officer, commented, “COVID-19 and the subsequent travel restrictions continue to have a significant negative impact on our operating and financial performance. Despite that, our integrated resorts experienced a moderate recovery in business levels during the third quarter, benefiting from the partial resumption of casino operations in Cyprus and Manila, as well as the gradual resumption of visa issuances by the Mainland Chinese authorities under the Individual Visit Scheme (IVS).

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

 

1


 

“While we are encouraged by the recent positive developments, ensuring the safety and well-being of our colleagues, customers and communities in which we operate remains our highest priority. Melco also fully supports the Macau SAR government’s newly launched scheme for tourists from Mainland China with the aim to expand the number of visitors, boost the economy and protect local jobs. In support of the scheme, Melco strives to continue prioritizing epidemic prevention measures by working hand-in-hand with local small and medium enterprise (SME) partners, while contributing collaboratively to the city’s sustainable development and economic recovery.

“We continue to prudently manage our balance sheet. Aided by the issuance of a series of new senior notes and the Studio City private share placements (but excluding Melco’s subscription therein of approximately US$280 million), as of September 30, 2020, we had cash on hand of approximately US$1.9 billion and undrawn revolver capacities of approximately US$1.7 billion.

“Melco remains committed to its global development program. Construction on the expansion of Studio City is progressing. Upon completion, Studio City will offer approximately 900 additional luxury hotel rooms and suites, one of the world’s largest indoor/outdoor water parks, a Cineplex, fine-dining restaurants and state-of-the-art MICE space. In Europe, we are developing City of Dreams Mediterranean which, upon completion, will be Europe’s largest integrated resort with approximately 500 luxury hotel rooms, a 1,500-seat amphitheater, and approximately 10,000 square meters of MICE space.

“Turning to Japan, I want to highlight our unwavering commitment to bring to the country 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, a culture of exceptional guest service, and a continuing commitment to employee development puts Melco in a strong position to help Japan realize the vision of developing a world-leading IR with unique Japanese touch. The process in Japan has been substantially delayed and remains complex. We will continue to be patient as we evaluate the landscape to ensure that Melco pursues the right opportunity that takes advantage of Melco’s core strengths to drive strong value creation.”

 

2


 

City of Dreams Third Quarter Results

For the quarter ended September 30, 2020, total operating revenues at City of Dreams were US$91.4 million, compared to US$787.3 million in the third quarter of 2019. City of Dreams generated negative Adjusted EBITDA of US$49.2 million in the third quarter of 2020, compared with Adjusted EBITDA of US$233.0 million in the third quarter of 2019. The year-over-year decrease in Adjusted EBITDA was primarily a result of softer performance in all gaming segments and lower non-gaming revenue, as well as a higher provision for credit losses.

Rolling chip volume was US$1.86 billion for the third quarter of 2020 versus US$17.18 billion in the third quarter of 2019. The rolling chip win rate was 3.34% in the third quarter of 2020, versus 2.69% in the third quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop decreased to US$90.1 million in the third quarter of 2020, compared with US$1.41 billion in the third quarter of 2019. The mass market table games hold percentage was 38.1% in the third quarter of 2020, compared to 33.2% in the third quarter of 2019.

Gaming machine handle for the third quarter of 2020 was US$0.11 billion, compared with US$1.21 billion in the third quarter of 2019. The gaming machine win rate was 3.4% in the third quarter of 2020, versus 3.1% in the third quarter of 2019.

Total non-gaming revenue at City of Dreams in the third quarter of 2020 was US$18.0 million, compared with US$104.2 million in the third quarter of 2019.

Altira Macau Third Quarter Results

For the quarter ended September 30, 2020, total operating revenues at Altira Macau were US$11.0 million, compared to US$113.9 million in the third quarter of 2019. Altira Macau generated negative Adjusted EBITDA of US$16.8 million in the third quarter of 2020, compared with Adjusted EBITDA of US$14.1 million in the third quarter of 2019. The year-over-year decrease in Adjusted EBITDA was primarily a result of softer performance in all gaming segments.

Rolling chip volume was US$0.34 billion in the third quarter of 2020 versus US$4.05 billion in the third quarter of 2019. The rolling chip win rate was 3.06% in the third quarter of 2020, versus 3.62% in the third quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15%.

 

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In the mass market table games segment, drop was US$15.7 million in the third quarter of 2020, versus US$154.2 million in the third quarter of 2019. The mass market table games hold percentage was 16.9% in the third quarter of 2020, compared with 21.6% in the third quarter of 2019.

Gaming machine handle for the third quarter of 2020 was US$42.6 million, compared with US$79.4 million in the third quarter of 2019. The gaming machine win rate was 2.3% in the third quarter of 2020, versus 4.2% in the third quarter of 2019.

Total non-gaming revenue at Altira Macau in the third quarter of 2020 was US$2.2 million, compared with US$6.8 million in the third quarter of 2019.

Mocha Clubs Third Quarter Results

Total operating revenues from Mocha Clubs were US$11.3 million in the third quarter of 2020, compared to US$29.5 million in the third quarter of 2019. Mocha Clubs generated negative Adjusted EBITDA of US$0.5 million in the third quarter of 2020, compared with Adjusted EBITDA of US$6.3 million in the same period in 2019.

Gaming machine handle for the third quarter of 2020 was US$279.6 million, compared with US$633.6 million in the third quarter of 2019. The gaming machine win rate was 4.0% in the third quarter of 2020, versus 4.7% in the third quarter of 2019.

Studio City Third Quarter Results

For the quarter ended September 30, 2020, total operating revenues at Studio City were US$30.8 million, compared to US$337.7 million in the third quarter of 2019. Studio City generated negative Adjusted EBITDA of US$21.7 million in the third quarter of 2020, compared with Adjusted EBITDA of US$106.4 million in the third quarter of 2019. The year-over-year decrease in Adjusted EBITDA was primarily a result of softer performance in all gaming segments and lower non-gaming revenue.

Studio City’s rolling chip volume was US$0.15 billion in the third quarter of 2020, versus US$2.77 billion in the third quarter of 2019. The rolling chip win rate was 3.41% in the third quarter of 2020, versus 2.71% in the third quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15%.

 

4


 

Mass market table games drop decreased to US$49.7 million in the third quarter of 2020, compared with US$880.6 million in the third quarter of 2019. The mass market table games hold percentage was 31.5% in the third quarter of 2020, compared to 28.4% in the third quarter of 2019.

Gaming machine handle for the third quarter of 2020 was US$99.2 million, compared with US$711.2 million in the third quarter of 2019. The gaming machine win rate was 2.7% in the third quarter of 2020, versus 2.8% in the third quarter of 2019.

Total non-gaming revenue at Studio City in the third quarter of 2020 was US$11.5 million, compared with US$49.4 million in the third quarter of 2019.

City of Dreams Manila Third Quarter Results

For the quarter ended September 30, 2020, total operating revenues at City of Dreams Manila were US$43.4 million, compared to US$130.5 million in the third quarter of 2019. City of Dreams Manila generated Adjusted EBITDA of US$5.2 million in the third quarter of 2020, compared with Adjusted EBITDA of US$49.9 million in the comparable period of 2019. The year-over-year decrease in Adjusted EBITDA was primarily a result of softer performance in all gaming segments and lower non-gaming revenue.

City of Dreams Manila’s rolling chip volume was US$0.56 billion in the third quarter of 2020, versus US$2.44 billion in the third quarter of 2019. The rolling chip win rate was 2.68% in the third quarter of 2020, versus 0.89% in the third quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop decreased to US$63.8 million for the third quarter of 2020, compared with US$202.1 million in the third quarter of 2019. The mass market table games hold percentage was 29.0% in the third quarter of 2020, compared to 31.3% in the third quarter of 2019.

Gaming machine handle for the third quarter of 2020 was US$0.29 billion, compared with US$1.02 billion in the third quarter of 2019. The gaming machine win rate was 5.8% in the third quarter of 2020, versus 5.3% in the third quarter of 2019.

Total non-gaming revenue at City of Dreams Manila in the third quarter of 2020 was US$8.7 million, compared with US$32.3 million in the third quarter of 2019.

 

5


 

Cyprus Operations Third Quarter Results

The Company is currently operating a temporary casino, the first casino in the Republic of Cyprus, and is licensed to operate four satellite casinos. Upon the completion and opening of City of Dreams Mediterranean, the Company will continue to operate the satellite casinos while operation of the temporary casino will cease.

For the quarter ended September 30, 2020, total operating revenues at Cyprus Casinos were US$20.5 million, compared to US$26.7 million in the third quarter of 2019. Cyprus Casinos generated Adjusted EBITDA of US$6.3 million in the third quarter of 2020, compared with US$8.5 million in the third quarter of 2019. The year-over-year decrease in Adjusted EBITDA was primarily a result of softer performance in the rolling chip and mass market table games segments.

Rolling chip volume was US$0.2 million for the third quarter of 2020, versus US$38.9 million in the third quarter of 2019. The rolling chip win rate was negative 36.03% in the third quarter of 2020, versus 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 was US$23.3 million in the third quarter of 2020, versus US$36.2 million in the third quarter of 2019. The mass market table games hold percentage was 20.6% in the third quarter of 2020, compared to 21.9% in the third quarter of 2019.

Gaming machine handle for the third quarter of 2020 was US$307.5 million, compared with US$311.5 million in the third quarter of 2019. The gaming machine win rate was 5.1% in the third quarter of 2020, versus 5.0% in the third quarter of 2019.

Other Factors Affecting Earnings

Total net non-operating expenses for the third quarter of 2020 were US$110.3 million, which mainly included interest expenses, net of amounts capitalized of US$91.9 million and loss on extinguishment of debt of US$18.5 million.

Depreciation and amortization costs of US$153.5 million were recorded in the third quarter of 2020, of which US$14.4 million related to the amortization expense for our gaming subconcession and US$5.7 million related to the amortization expense for the land use rights.

 

6


 

The negative Adjusted EBITDA for Studio City for the three months ended September 30, 2020 referred to in this press release was US$8.5 million less than the negative Adjusted EBITDA of Studio City contained in the earnings release for Studio City International Holdings Limited (“SCIHL”) dated November 5, 2020 (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 intercompany costs related to the table games operations at Studio City Casino.

Financial Position and Capital Expenditures

Total cash and bank balances as of September 30, 2020 aggregated to US$1.90 billion, including US$150.0 million for a bank deposit with an original maturity over three months and US$9.9 million of restricted cash. Total debt, net of unamortized deferred financing costs and original issue premiums, was US$5.64 billion at the end of the third quarter of 2020.

Capital expenditures for the third quarter of 2020 were US$116.8 million, which primarily related to various projects at City of Dreams, Studio City Phase 2 and City of Dreams Mediterranean construction.

Recent Developments

The COVID-19 outbreak continues to have a material effect on our operations, financial position, and prospects during the fourth quarter of 2020.

Commencing from July 15, 2020, certain travelers entering Guangdong from Macau were no longer subject to mandatory quarantine, while from August 12, 2020, those entering China from Macau were generally no longer subject to mandatory quarantine. On August 26, 2020, the Chinese authorities resumed the issuance of IVS visas for Guangdong residents, while the nationwide resumption of IVS visa issuance commenced on September 23, 2020. Despite these developments, our operations continue to be impacted by significant travel bans, restrictions, and quarantine requirements imposed by the governments in Macau, Hong Kong, and certain provinces in China on visitors traveling to and from Macau, and such bans, restrictions and requirements have been, and may continue to be, modified by the relevant authorities from time to time as COVID-19 developments unfold. Additionally, health-related precautionary measures remain in place at our properties in Macau, which could continue to impact visitation and customer spending.

 

7


 

Our Philippines casino gaming operations were closed due to the community quarantine for the entire island of Luzon, including Metro Manila, which began on March 16, 2020 and was extended to November 30, 2020. However, as permitted by PAGCOR, since June 19, 2020, City of Dreams Manila has conducted a dry run/trial run of its gaming and hospitality operations with a limited number of participants strictly adhering to the new guidelines on social distancing and hygiene and sanitation procedures imposed by the government of the Philippines. The PAGCOR-sanctioned dry run/trial run, which aims to address all potential operational concerns to achieve a seamless re-opening for City of Dreams Manila, is expected to continue until such time that PAGCOR provides formal notice that City of Dreams Manila can resume operations again on a regular basis in the future.

In Cyprus, commencing from October 23, 2020, the cities of Limassol and Paphos became subject to a 11 p.m. to 5 a.m. curfew. On November 4, 2020, the Cyprus government announced the curfew would be extended throughout the rest of Cyprus commencing from November 5, 2020 and the curfew is currently expected to be in place through November 30, 2020. As a result, our operations in Cyprus are required to be closed during those hours while the curfew remains in place.

The COVID-19 outbreak has also impacted the construction of the Studio City Phase 2 project and the progress of construction work at the City of Dreams Mediterranean project. We currently expect additional time will be needed to complete the construction of these projects.

As the disruptions from the COVID-19 outbreak are ongoing, any recovery from such disruptions will depend on future developments, such as the duration of travel and visa restrictions and customer sentiment and behavior, including the length of time before customers resume traveling and participating in entertainment and leisure activities at high-density venues and the impact of potential higher unemployment rates, declines in income levels and loss of personal wealth resulting from the COVID-19 outbreak on consumer behavior related to discretionary spending and traveling, all of which are highly uncertain.

Conference Call Information

Melco Resorts & Entertainment Limited will hold a conference call to discuss its third quarter 2020 financial results on Thursday, November 5, 2020 at 8:30 a.m. Eastern Time (or 9:30 p.m. Hong Kong Time). To join the conference call, please use the dial-in details below:

 

US Toll Free    1 844 760 0770
US Toll / International                1 347 549 4094
HK Toll    852 3018 8307
HK Toll Free    800 906 613
Japan Toll    81 3 4503 6004
Japan Toll Free    012 092 5482
UK Toll Free    080 0051 4241
Australia Toll    61 290 833 216
Australia Toll Free    1 800 754 642
Philippines Toll Free    1 800 1612 0312
Passcode    5797219

 

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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    852 3051 2780
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    5797219

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) the recent global pandemic of COVID-19, caused by a novel strain of the coronavirus, and the continued impact of its consequences on our business, our industry and the global economy, (ii) growth of the gaming market and visitations in Macau, the Philippines and the Republic of Cyprus, (iii) capital and credit market volatility, (iv) local and global economic conditions, (v) our anticipated growth strategies, (vi) gaming authority and other governmental approvals and regulations, and (vii) 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.

 

9


 

Non-GAAP Financial Measures

 

(1)

“Adjusted EBITDA” is net income/loss 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 net income/loss 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/loss 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/loss, 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/loss, net income/loss, 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.

 

(2)

“Adjusted net income/loss” is net income/loss 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/loss attributable to Melco Resorts & Entertainment Limited and adjusted net income/loss 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/loss 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/loss attributable to Melco Resorts & Entertainment Limited and adjusted net income/loss 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/loss 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.

 

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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 integrated resort facilities in Asia and Europe. The Company currently operates Altira Macau (www.altiramacau.com), an integrated resort located at Taipa, Macau and City of Dreams (www.cityofdreamsmacau.com), an integrated 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 resort in Cotai, Macau. In the Philippines, a Philippine subsidiary of the Company currently operates and manages City of Dreams Manila (www.cityofdreamsmanila.com), an 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 expected to be the largest and premier integrated destination resort in Europe. The Company is currently operating a temporary casino, the first authorized casino in the Republic of Cyprus, and is licensed to operate four satellite casinos (“Cyprus Casinos”). Upon the opening of City of Dreams Mediterranean, the Company will continue to operate the satellite casinos while operation of the temporary casino will cease. For more information about the Company, please visit www.melco-resorts.com.

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 the 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 (Unaudited)

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

 

    

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 
     2020     2019     2020     2019  

Operating revenues:

        

Casino

   $ 170,775     $ 1,242,192     $ 1,030,914     $ 3,727,770  

Rooms

     15,184       88,438       67,228       258,918  

Food and beverage

     13,385       59,081       48,047       172,745  

Entertainment, retail and other

     13,552       48,945       53,732       126,727  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating revenues

     212,896       1,438,656       1,199,921       4,286,160  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Casino

     (207,188     (823,115     (986,818     (2,423,186

Rooms

     (8,573     (22,887     (34,897     (67,225

Food and beverage

     (14,822     (44,966     (62,482     (133,452

Entertainment, retail and other

     (9,378     (24,792     (44,915     (73,039

General and administrative

     (80,985     (145,123     (326,214     (423,000

Payments to the Philippine Parties

     (2,743     (8,740     (7,678     (45,995

Pre-opening costs

     (428     (525     (1,049     (4,638

Development costs

     (2,831     (30,433     (22,633     (39,873

Amortization of gaming subconcession

     (14,364     (14,206     (43,050     (42,601

Amortization of land use rights

     (5,726     (5,663     (17,161     (16,982

Depreciation and amortization

     (133,439     (140,640     (410,757     (422,362

Property charges and other

     (7,426     (2,372     (37,990     (19,578
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (487,903     (1,263,462     (1,995,644     (3,711,931
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income

     (275,007     175,194       (795,723     574,229  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-operating income (expenses):

        

Interest income

     1,437       3,597       3,732       7,169  

Interest expenses, net of amounts capitalized

     (91,864     (80,123     (250,288     (225,668

Loan commitment fees

     (2,471     (883     (5,644     (1,673

Foreign exchange gains (losses), net

     1,101       (79     (5,117     (9,409

Other expenses, net

     (50     (3,815     (151,857     (20,166

Loss on extinguishment of debt

     (18,497     —         (19,733     (3,721

Costs associated with debt modification

     —         —         (310     (579
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating expenses, net

     (110,344     (81,303     (429,217     (254,047
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before income tax

     (385,351     93,891       (1,224,940     320,182  

Income tax (expense) credit

     (1,560     (1,788     5,166       (6,777
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

     (386,911     92,103       (1,219,774     313,405  

Net loss (income) attributable to noncontrolling interests

     55,330       (8,913     156,016       (8,371
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to Melco Resorts & Entertainment Limited

   $ (331,581   $ 83,190     $ (1,063,758   $ 305,034  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to Melco Resorts & Entertainment Limited per share:

        

Basic

   $ (0.232   $ 0.058     $ (0.743   $ 0.212  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.232   $ 0.058     $ (0.743   $ 0.211  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to Melco Resorts & Entertainment Limited per ADS:

        

Basic

   $ (0.695   $ 0.174     $ (2.228   $ 0.637  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.696   $ 0.173     $ (2.230   $ 0.634  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding used in net (loss) income attributable to Melco Resorts & Entertainment Limited per share calculation:

        

Basic

     1,430,817,899       1,436,810,952       1,432,437,101       1,436,357,772  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     1,430,817,899       1,443,031,676       1,432,437,101       1,443,251,443  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

12


Melco Resorts & Entertainment Limited and Subsidiaries

Condensed Consolidated Balance Sheets

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

 

     September 30,
2020
    December 31,
2019
 
     (Unaudited)        

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 1,743,183     $ 1,394,982  

Investment securities

     25,003       49,369  

Bank deposit with an original maturity over three months

     150,000       —    

Restricted cash

     9,487       37,390  

Accounts receivable, net

     142,417       284,333  

Amounts due from affiliated companies

     403       442  

Inventories

     39,152       43,959  

Prepaid expenses and other current assets

     84,137       84,197  
  

 

 

   

 

 

 

Total current assets

     2,193,782       1,894,672  
  

 

 

   

 

 

 

Property and equipment, net

     5,658,837       5,723,909  

Gaming subconcession, net

     99,058       141,440  

Intangible assets, net

     30,288       31,628  

Goodwill

     86,576       95,620  

Long-term prepayments, deposits and other assets

     267,047       176,478  

Investment securities

     —         568,936  

Restricted cash

     406       130  

Deferred tax assets

     6,794       3,558  

Operating lease right-of-use assets

     97,708       111,043  

Land use rights, net

     727,558       741,008  
  

 

 

   

 

 

 

Total assets

   $ 9,168,054     $ 9,488,422  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 6,308     $ 21,882  

Accrued expenses and other current liabilities

     934,592       1,420,516  

Income tax payable

     8,474       8,516  

Operating lease liabilities, current

     27,811       33,152  

Finance lease liabilities, current

     67,099       39,725  

Current portion of long-term debt, net

     250,000       146  

Amounts due to affiliated companies

     1,706       1,523  
  

 

 

   

 

 

 

Total current liabilities

     1,295,990       1,525,460  
  

 

 

   

 

 

 

Long-term debt, net

     5,392,447       4,393,985  

Other long-term liabilities

     21,982       18,773  

Deferred tax liabilities, net

     49,980       56,677  

Operating lease liabilities, non-current

     79,453       88,259  

Finance lease liabilities, non-current

     269,500       262,040  
  

 

 

   

 

 

 

Total liabilities

     7,109,352       6,345,194  
  

 

 

   

 

 

 

Shareholders’ equity:

    

Ordinary shares, par value $0.01; 7,300,000,000 shares authorized; 1,456,547,942 and 1,456,547,942 shares issued; 1,430,857,414 and 1,437,328,096 shares outstanding, respectively

     14,565       14,565  

Treasury shares, at cost; 25,690,528 and 19,219,846 shares, respectively

     (121,537     (90,585

Additional paid-in capital

     3,196,685       3,178,579  

Accumulated other comprehensive losses

     (20,814     (18,803

Accumulated losses

     (1,787,662     (644,788
  

 

 

   

 

 

 

Total Melco Resorts & Entertainment Limited shareholders’ equity

     1,281,237       2,438,968  

Noncontrolling interests

     777,465       704,260  
  

 

 

   

 

 

 

Total shareholders’ equity

     2,058,702       3,143,228  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 9,168,054     $ 9,488,422  
  

 

 

   

 

 

 

 

13


Melco Resorts & Entertainment Limited and Subsidiaries

Reconciliation of Net (Loss) Income Attributable to Melco Resorts & Entertainment Limited to

Adjusted Net (Loss) Income Attributable to Melco Resorts & Entertainment Limited (Unaudited)

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

 

    

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 
     2020     2019     2020     2019  

Net (loss) income attributable to Melco Resorts & Entertainment Limited

   $ (331,581   $ 83,190     $ (1,063,758   $ 305,034  

Pre-opening costs

     428       525       1,049       4,638  

Development costs

     2,831       30,433       22,633       39,873  

Property charges and other

     7,426       2,372       37,990       19,578  

Loss on extinguishment of debt

     18,497       —         19,733       3,721  

Costs associated with debt modification

     —         —         310       579  

Income tax impact on adjustments

     (355     (1,934     (4,178     (4,216

Noncontrolling interests impact on adjustments

     (8,321     (99     (10,677     (7,183
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net (loss) income attributable to Melco Resorts & Entertainment Limited

   $ (311,075   $ 114,487     $ (996,898   $ 362,024  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net (loss) income attributable to Melco Resorts & Entertainment Limited per share:

        

Basic

   $ (0.217   $ 0.080     $ (0.696   $ 0.252  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.218   $ 0.079     $ (0.697   $ 0.251  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net (loss) income attributable to Melco Resorts & Entertainment Limited per ADS:

        

Basic

   $ (0.652   $ 0.239     $ (2.088   $ 0.756  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.654   $ 0.238     $ (2.091   $ 0.752  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding used in adjusted net (loss) income attributable to Melco Resorts & Entertainment Limited per share calculation:

        

Basic

     1,430,817,899       1,436,810,952       1,432,437,101       1,436,357,772  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     1,430,817,899       1,443,031,676       1,432,437,101       1,443,251,443  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

14


Melco Resorts & Entertainment Limited and Subsidiaries

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

(In thousands of U.S. dollars)

 

     Three Months Ended September 30, 2020  
     Altira
Macau
    Mocha     City of
Dreams
    Studio
City
    City of
Dreams
Manila
    Cyprus
Operations
    Corporate and
Other
    Total  

Operating (loss) income

   $ (22,653   $ (2,367   $ (111,994   $ (66,769   $ (20,982   $ 2,447     $ (52,689   $ (275,007

Payments to the Philippine Parties

     —         —         —         —         2,743       —         —         2,743  

Land rent to Belle Corporation

     —         —         —         —         812       —         —         812  

Pre-opening costs

     —         —         29       77       —         322       —         428  

Development costs

     —         —         —         —         —         —         2,831       2,831  

Depreciation and amortization

     5,407       1,850       59,743       44,399       16,733       3,470       21,927       153,529  

Share-based compensation

     140       36       1,512       484       340       54       8,526       11,092  

Property charges and other

     261       30       1,517       71       5,550       (3     —         7,426  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     (16,845     (451     (49,193     (21,738     5,196       6,290       (19,405     (96,146

Corporate and Other expenses

     —         —         —         —         —         —         19,405       19,405  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

   $ (16,845   $ (451   $ (49,193   $ (21,738   $ 5,196     $ 6,290     $ —       $ (76,741
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

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

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  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

15


Melco Resorts & Entertainment Limited and Subsidiaries

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

(In thousands of U.S. dollars)

 

     Nine Months Ended September 30, 2020  
     Altira
Macau
    Mocha     City of
Dreams
    Studio
City
    City of
Dreams
Manila
    Cyprus
Operations
    Corporate and
Other
    Total  

Operating loss

   $ (62,735   $ (1,515   $ (260,100   $ (210,500   $ (54,233   $ (6,808   $ (199,832   $ (795,723

Payments to the Philippine Parties

     —         —         —         —         7,678       —         —         7,678  

Land rent to Belle Corporation

     —         —         —         —         2,374       —         —         2,374  

Pre-opening costs

     37       —         (21     133       —         900       —         1,049  

Development costs

     —         —         —         —         —         —         22,633       22,633  

Depreciation and amortization

     16,086       5,459       186,253       131,043       49,553       9,128       73,446       470,968  

Share-based compensation

     366       41       3,960       1,416       1,066       155       25,172       32,176  

Property charges and other

     897       56       11,325       4,414       5,753       129       15,416       37,990  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     (45,349     4,041       (58,583     (73,494     12,191       3,504       (63,165     (220,855

Corporate and Other expenses

     —         —         —         —         —         —         63,165       63,165  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

   $ (45,349   $ 4,041     $ (58,583   $ (73,494   $ 12,191     $ 3,504     $ —       $ (157,690
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

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

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  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

16


Melco Resorts & Entertainment Limited and Subsidiaries

Reconciliation of Net (Loss) Income Attributable to Melco Resorts & Entertainment Limited to

Adjusted EBITDA and Adjusted Property EBITDA (Unaudited)

(In thousands of U.S. dollars)

 

     Three Months Ended      Nine Months Ended  
     September 30,      September 30,  
     2020     2019      2020     2019  

Net (loss) income attributable to Melco Resorts & Entertainment Limited

   $ (331,581   $ 83,190      $ (1,063,758   $ 305,034  

Net (loss) income attributable to noncontrolling interests

     (55,330     8,913        (156,016     8,371  
  

 

 

   

 

 

    

 

 

   

 

 

 

Net (loss) income

     (386,911     92,103        (1,219,774     313,405  

Income tax expense (credit)

     1,560       1,788        (5,166     6,777  

Interest and other non-operating expenses, net

     110,344       81,303        429,217       254,047  

Property charges and other

     7,426       2,372        37,990       19,578  

Share-based compensation

     11,092       7,835        32,176       22,514  

Depreciation and amortization

     153,529       160,509        470,968       481,945  

Development costs

     2,831       30,433        22,633       39,873  

Pre-opening costs

     428       525        1,049       4,638  

Land rent to Belle Corporation

     812       765        2,374       2,283  

Payments to the Philippine Parties

     2,743       8,740        7,678       45,995  
  

 

 

   

 

 

    

 

 

   

 

 

 

Adjusted EBITDA

     (96,146     386,373        (220,855     1,191,055  

Corporate and Other expenses

     19,405       31,803        63,165       88,648  
  

 

 

   

 

 

    

 

 

   

 

 

 

Adjusted Property EBITDA

   $ (76,741   $ 418,176      $ (157,690   $ 1,279,703  
  

 

 

   

 

 

    

 

 

   

 

 

 

 

17


Melco Resorts & Entertainment Limited and Subsidiaries

Supplemental Data Schedule

 

     Three Months Ended     Nine Months Ended  
     September 30,     September 30,  
     2020     2019     2020     2019  

Room Statistics(4):

        

Altira Macau

        

Average daily rate (5)

   $ 152     $ 175     $ 171     $ 177  

Occupancy per available room

     19     99     32     99

Revenue per available room (6)

   $ 29     $ 173     $ 54     $ 175  

City of Dreams

        

Average daily rate (5)

   $ 208     $ 208     $ 230     $ 207  

Occupancy per available room

     15     98     24     98

Revenue per available room (6)

   $ 31     $ 204     $ 54     $ 202  

Studio City

        

Average daily rate (5)

   $ 119     $ 135     $ 134     $ 134  

Occupancy per available room

     13     100     20     100

Revenue per available room (6)

   $ 16     $ 135     $ 27     $ 134  

City of Dreams Manila

        

Average daily rate (5)

   $ 291     $ 179     $ 222     $ 175  

Occupancy per available room

     26     98     58     98

Revenue per available room (6)

   $ 77     $ 176     $ 129     $ 172  

Other Information(7):

        

Altira Macau

        

Average number of table games

     101       102       96       104  

Average number of gaming machines

     101       178       109       173  

Table games win per unit per day (8)

   $ 1,390     $ 19,152     $ 4,813     $ 19,858  

Gaming machines win per unit per day (9)

   $ 104     $ 202     $ 123     $ 214  

City of Dreams

        

Average number of table games

     515       517       489       517  

Average number of gaming machines

     482       863       476       836  

Table games win per unit per day (8)

   $ 2,033     $ 19,520     $ 6,149     $ 18,387  

Gaming machines win per unit per day (9)

   $ 85     $ 478     $ 202     $ 511  

Studio City

        

Average number of table games

     291       292       279       293  

Average number of gaming machines

     595       896       579       952  

Table games win per unit per day (8)

   $ 774     $ 12,126     $ 2,234     $ 12,481  

Gaming machines win per unit per day (9)

   $ 48     $ 243     $ 96     $ 226  

City of Dreams Manila

        

Average number of table games

     301       311       300       306  

Average number of gaming machines

     2,256       2,267       2,274       2,260  

Table games win per unit per day (8)

   $ 1,450     $ 2,975     $ 2,712     $ 4,451  

Gaming machines win per unit per day (9)

   $ 96     $ 259     $ 143     $ 256  

Cyprus Operations

        

Average number of table games

     25       38       30       38  

Average number of gaming machines

     304       409       362       372  

Table games win per unit per day (8)

   $ 2,041     $ 3,256     $ 1,901     $ 2,562  

Gaming machines win per unit per day (9)

   $ 565     $ 416     $ 483     $ 432  

 

(4)

Room statistics exclude rooms that were temporarily closed or provided to staff members during the three and nine months ended September 30, 2020 due to the COVID-19 outbreak

(5)

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

(6)

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

(7)

Table games and gaming machines that were not in operation during the three and nine months ended September 30, 2020 due to government mandated closures or social distancing measures in relation to the COVID-19 outbreak have been excluded

(8)

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

(9)

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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