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Melco Resorts & Entertainment Limited$17.78($.27)(1.50%)

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 Melco Announces Unaudited Fourth Quarter 2017 Earnings and a 50% Increase in Quarterly Dividend to US$0.135 per ADS
   Thursday, February 08, 2018 8:08:52 AM ET

Melco Resorts & Entertainment Limited (MLCO ) ("Melco" or the "Company"), a developer, owner and operator of casino gaming and entertainment casino resort facilities in Asia, today reported its unaudited financial results for the fourth quarter and full year ended December 31, 2017.

Net revenue for the fourth quarter of 2017 was US$1,332.6 million, representing an increase of approximately 12% from US$1,192.9 million for the comparable period in 2016. The increase in net revenue was primarily attributable to higher rolling chip revenues across all properties and higher mass market table games revenues in Studio City and City of Dreams Manila, partially offset by lower mass market table games revenues in City of Dreams in Macau.

Operating income for the fourth quarter of 2017 was US$129.0 million, compared with operating income of US$116.0 million in the fourth quarter of 2016, representing an increase of 11%.

Adjusted property EBITDA was US$339.8 million for the fourth quarter of 2017, as compared to Adjusted property EBITDA of US$304.3 million in the fourth quarter of 2016, representing an increase of 12%. The year-on-year improvement in Adjusted property EBITDA was mainly attributable to the higher contribution from Studio City and Altira Macau driven by increased casino revenues, partially offset by lower contribution from City of Dreams in Macau.

Net income attributable to Melco Resorts & Entertainment Limited for the fourth quarter of 2017 was US$81.2 million, or US$0.17 per ADS, compared with US$43.3 million, or US$0.09 per ADS, in the fourth quarter of 2016. The net loss attributable to noncontrolling interests during the fourth quarter of 2017 of US$9.8 million was related to Studio City and City of Dreams Manila.

Mr. Lawrence Ho, our Chairman and Chief Executive Officer, commented, "After three consecutive years of decline, Macau’s gaming revenue rebounded strongly in 2017 with approximately 20% growth compared to 2016 on a year-on-year basis. In 2018, we expect another year of robust growth for Macau, as the market benefits from the improving demand environment, the anticipated completion of the Hong Kong-Zhuhai-Macau Bridge, and the ongoing build-out of Cotai.

"Mass and Premium Mass gaming should remain the primary drivers of Macau’s future growth, which is consistent with our long-held vision for the evolution of the market. Our first mover advantage and our strong determination to offer the best integrated resort experience have enabled City of Dreams to remain a leader in Macau’s premium mass gaming market, despite multiple new resorts opening. To further solidify our leadership position in this important market segment, we have executed on an extensive upgrade to our flagship property, City of Dreams, which includes the announced launch of the Forbes 5-star "NUWA" hotel, the rebranding and redevelopment of The Count:Down, and the eagerly awaited opening of Morpheus, the cornerstone of the final phase of development for City of Dreams, which is set to be a true landmark for all of Macau.

"At Studio City, we are embarking on a series of property upgrades to refine the entertainment offerings and improve accessibility into the resort, which we believe will facilitate the continuing ramp up that Studio City has experienced over the past several quarters. We will also continue to explore the phase 2 expansion of Studio City which we believe will augment the existing room inventory and entertainment offerings and contribute to the continued growth and development of this property.

"In The Philippines, City of Dreams Manila delivered another strong quarter with all gaming segments continuing to enjoy robust year-on-year growth, despite new supply within Entertainment City.

"Aiming at optimizing our operating excellence, we have announced the redeployment of our senior operating management with David Sisk appointed as the Property President of City of Dreams Macau and Geoff Andres appointed as Property President of Studio City. Both of them have demonstrated their innovative spirit and their expertise in delivering strong growth. We believe the cross-pollination of new ideas and management initiatives will provide an opportunity for all our integrated resorts to benefit from performance improvements.

"The board has, after evaluating the company’s current liquidity position and future expected capital needs, decided to increase the quarterly cash dividend by 50% to US$0.045 per ordinary share, which is equivalent to US$0.135 per ADS, from the previous quarterly dividend of US$0.03 per ordinary share.

"Lastly, Japan continues to be a core focus of ours. With the passage of the Integrated Resorts (IR) implementation bill, the country will take a major step forward toward the development of the next generation of integrated resorts that will operate in this incredibly exciting, yet currently underpenetrated, tourism destination. With our high quality assets, dedication to world-class entertainment offerings, market-leading social safeguards and compliance culture, and commitment to being an ideal partner to local governments and communities alike, we believe Melco is in a strong position to help Japan realize the vision for integrated resort development with unique Japanese touch."

City of Dreams Fourth Quarter Results

For the quarter ended December 31, 2017, net revenue at City of Dreams was US$612.6 million compared to US$661.1 million in the fourth quarter of 2016. City of Dreams generated Adjusted EBITDA of US$169.7 million in the fourth quarter of 2017 compared with Adjusted EBITDA of US$188.7 million in the fourth quarter of 2016. The year-on-year decrease in Adjusted EBITDA was primarily a result of lower mass market table games revenues, partially offset by higher rolling chip revenues and recovery of previously provided doubtful debt.

Rolling chip volume totaled US$11.4 billion for the fourth quarter of 2017 versus US$11.1 billion in the fourth quarter of 2016. The rolling chip win rate was 2.7% in the fourth quarter of 2017 versus 2.6% in the fourth quarter of 2016. The expected rolling chip win rate range is 2.7%-3.0%.

Mass market table games drop increased to US$1,226.0 million compared with US$1,109.9 million in the fourth quarter of 2016. The mass market table games hold percentage was 28.6% in the fourth quarter of 2017 compared to 36.3% in the fourth quarter of 2016.

Gaming machine handle for the fourth quarter of 2017 was US$1,122.0 million, compared with US$1,051.8 million in the fourth quarter of 2016. The gaming machine win rate was 4.2% in the fourth quarter of 2017 versus 3.9% in the fourth quarter of 2016.

Total non-gaming revenue at City of Dreams in the fourth quarter of 2017 was US$71.9 million, compared with US$79.2 million in the fourth quarter of 2016.

Altira Macau Fourth Quarter Results

For the quarter ended December 31, 2017, net revenue at Altira Macau was US$140.2 million compared to US$103.3 million in the fourth quarter of 2016. Altira Macau generated Adjusted EBITDA of US$17.5 million in the fourth quarter of 2017 compared with Adjusted EBITDA of US$3.3 million in the fourth quarter of 2016. The year-on-year increase in Adjusted EBITDA was primarily a result of higher rolling chip revenues and recovery of previously provided doubtful debt.

Rolling chip volume totaled US$4.9 billion in the fourth quarter of 2017 versus US$4.4 billion in the fourth quarter of 2016. The rolling chip win rate was 3.3% in the fourth quarter of 2017 versus 2.7% in the fourth quarter of 2016. The expected rolling chip win rate range is 2.7%-3.0%.

In the mass market table games segment, drop totaled US$125.2 million in the fourth quarter of 2017, representing an increase from US$112.8 million generated in the comparable period in 2016. The mass market table games hold percentage was 18.4% in the fourth quarter of 2017 compared with 19.2% in the fourth quarter of 2016.

Gaming machine handle for the fourth quarter of 2017 was US$20.6 million, compared with US$7.9 million in the fourth quarter of 2016. The gaming machine win rate was 6.0% in the fourth quarter of 2017 versus 6.8% in the fourth quarter of 2016.

Total non-gaming revenue at Altira Macau in the fourth quarter of 2017 was US$7.0 million compared with US$7.1 million in the fourth quarter of 2016.

Mocha Clubs Fourth Quarter Results

Net revenue from Mocha Clubs totaled US$30.7 million in the fourth quarter of 2017 as compared to US$28.9 million in the fourth quarter of 2016. Mocha Clubs generated US$7.4 million of Adjusted EBITDA in the fourth quarter of 2017 compared with US$5.4 million in the same period in 2016.

Gaming machine handle for the fourth quarter of 2017 was US$622.7 million, compared with US$614.4 million in the fourth quarter of 2016. The gaming machine win rate was 4.8% in the fourth quarter of 2017 versus 4.6% in the fourth quarter of 2016.

Studio City Fourth Quarter Results

For the quarter ended December 31, 2017, net revenue at Studio City was US$369.0 million compared to US$246.2 million in the fourth quarter of 2016. Studio City generated Adjusted EBITDA of US$91.5 million in the fourth quarter of 2017 compared with Adjusted EBITDA of US$56.7 million in the fourth quarter of 2016. The year-on-year improvement in Adjusted EBITDA was primarily a result of the commencement of rolling chip operations in November 2016 and better performance in the mass market table games segment.

Rolling chip volume totaled US$5.7 billion for the fourth quarter of 2017 versus US$1.3 billion in the fourth quarter of 2016. The rolling chip win rate was 2.8% in the fourth quarter of 2017 versus 1.4% in the fourth quarter of 2016. The expected rolling chip win rate range is 2.7%-3.0%.

Mass market table games drop increased to US$848.2 million compared with US$683.2 million in the fourth quarter of 2016. The mass market table games hold percentage was 26.1% in the fourth quarter of 2017 compared to 26.9% in the fourth quarter of 2016.

Gaming machine handle for the fourth quarter of 2017 was US$539.0 million, compared with US$519.3 million in the fourth quarter of 2016. The gaming machine win rate was 4.1% in the fourth quarter of 2017 versus 3.9% in the fourth quarter of 2016.

Total non-gaming revenue at Studio City in the fourth quarter of 2017 was US$52.2 million, compared with US$53.3 million in the fourth quarter of 2016.

City of Dreams Manila Fourth Quarter Results

For the quarter ended December 31, 2017, net revenue at City of Dreams Manila was US$167.5 million compared to US$144.7 million in the fourth quarter of 2016. City of Dreams Manila generated Adjusted EBITDA of US$53.8 million in the fourth quarter of 2017 compared to US$50.2 million in the comparable period of 2016.

Rolling chip volume totaled US$2.9 billion for the fourth quarter of 2017 versus US$2.1 billion in the fourth quarter of 2016. The rolling chip win rate was 3.1% in the fourth quarter of 2017 versus 3.5% in the fourth quarter of 2016. The expected rolling chip win rate range is 2.7%-3.0%.

Mass market table games drop increased to US$189.2 million for the fourth quarter of 2017, compared with US$149.0 million in the fourth quarter of 2016. The mass market table games hold percentage was 30.9% in the fourth quarter of 2017 compared to 27.8% in the fourth quarter of 2016.

Gaming machine handle for the fourth quarter of 2017 was US$793.3 million, compared with US$671.3 million in the fourth quarter of 2016. The gaming machine win rate was 5.5% in the fourth quarter of 2017 versus 5.9% in the fourth quarter of 2016.

Total non-gaming revenue at City of Dreams Manila in the fourth quarter of 2017 was US$31.4 million, compared with US$28.1 million in the fourth quarter of 2016.

Other Factors Affecting Earnings

Total net non-operating expenses for the fourth quarter of 2017 were US$58.5 million, which mainly included interest expenses, net of capitalized interest, of US$54.7 million and other finance costs of US$7.5 million. We recorded US$10.5 million of capitalized interest during the fourth quarter of 2017 relating to the development of Morpheus at City of Dreams.

The year-on-year decrease of US$36.8 million in net non-operating expenses was primarily a result of the loss on extinguishment of debt and costs associated with debt modification arising from the refinancing of the Studio City project facility in the fourth quarter of 2016, as well as lower other finance costs in the fourth quarter of 2017.

Depreciation and amortization costs of US$133.5 million were recorded in the fourth quarter of 2017 of which US$14.3 million was related to the amortization of our gaming subconcession and US$5.7 million was related to the amortization of land use rights.

Financial Position and Capital Expenditure

Total cash and bank balances as of December 31, 2017 were US$1.5 billion, including US$9.9 million of bank deposits with original maturities over three months and US$45.5 million of restricted cash, primarily related to Studio City. Total debt, net of unamortized deferred financing costs at the end of the fourth quarter of 2017, was US$3.6 billion.

Capital expenditures for the fourth quarter of 2017 were US$167.8 million, which predominantly related to Morpheus and other various projects at City of Dreams. In January 2018, the development period of the land on which City of Dreams is located was extended to June 11, 2018.

Full Year Results

For the year ended December 31, 2017, Melco Resorts & Entertainment Limited reported net revenue of US$5.3 billion versus $4.5 billion in the prior year. The year-on-year increase in net revenue was primarily attributable to better group-wide performance in all gaming segments, especially the performance in rolling chip segment including the fully-operating rolling chip operations in Studio City in the current year.

Operating income for 2017 was US$607.6 million, compared with operating income of US$363.1 million for 2016, representing an increase of 67%.

Adjusted property EBITDA for the year ended December 31, 2017 was US$1,422.8 million, as compared to Adjusted property EBITDA of US$1,087.5 million in 2016, representing an increase of 31%. The year-on-year improvement in Adjusted property EBITDA was mainly attributable to better group-wide performance in all gaming segments.

Net income attributable to Melco Resorts & Entertainment Limited for 2017 was US$347.0 million, or US$0.71 per ADS, compared with US$175.9 million, or US$0.35 per ADS, for 2016. The net loss attributable to noncontrolling interests for 2017 of US$31.7 million was related to Studio City and City of Dreams Manila.

Amendment of Dividend Policy

To reaffirm Melco’s commitment to returning surplus capital to shareholders, our Board, after evaluating Melco’s current liquidity position and future expected capital needs, has amended our quarterly dividend policy from one targeting a quarterly cash dividend payment of US$0.03 per ordinary share (equivalent to US$0.09 per ADS, each representing three ordinary shares) of the Company, to one targeting a quarterly cash dividend payment of US$0.045 per ordinary share (equivalent to US$0.135 per ADS) of the Company.

The new dividend policy will take effect beginning with any dividends declared by our Board for the fourth quarter of 2017 and continue until amended or otherwise determined by our Board. Distribution of dividends under this new dividend policy is subject to the Company’s accumulated and future earnings, cash availability and future commitments.

Our Board will continue to review from time to time our dividend policy as part of our commitment to maximizing shareholder value, taking into consideration our financial performance and market conditions.

Dividend Declaration

On February 8, 2018, our Board considered and approved the declaration and payment of a quarterly dividend of US$0.045 per ordinary share (equivalent to US$0.135 per ADS) for the fourth quarter of 2017 (the "Quarterly Dividend"). The Quarterly Dividend will be paid on or about March 7, 2018 to our shareholders whose names appear on the register of members of the Company at the close of business on February 20, 2018, being the record date for determination of entitlements to the Quarterly Dividend.

Conference Call Information

Melco Resorts & Entertainment Limited will hold a conference call to discuss its fourth quarter 2017 financial results on Thursday, February 8, 2018 at 8:30 a.m. Eastern Time (9:30 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 1651 0607
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           2589138

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 and the Philippines, (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.

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, net gain on disposal of property and equipment 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, net gain on disposal of property and equipment to Belle Corporation, Corporate and Others 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.

(2) "Adjusted net income" is net income before net gain on disposal of property and equipment to Belle Corporation, 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 (MLCO ), is a developer, owner and operator of casino gaming and entertainment casino resort facilities in Asia. 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.cityofdreams.com.ph), a casino, hotel, retail and entertainment integrated resort in the Entertainment City complex in Manila. 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 investment community, please contact:

Ross Dunwoody

Vice President, Development & Investor Relations

Tel: +853 8868 7575 or +852 2598 3689

Email: rossdunwoody@melco-resorts.com

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

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                                   Year Ended
                                               December 31,                                         December 31,
                                               2017                          2016                   2017                   2016
                                               (Unaudited)                   (Unaudited)            (Unaudited)            (Audited)
OPERATING REVENUES
Casino                                         $            1,249,513        $   1,099,844          $   4,937,597          $   4,176,667
Rooms                                                       71,164               69,338                 271,500                265,289
Food and beverage                                           51,273               47,904                 184,979                177,515
Entertainment, retail and other                             43,924               51,893                 203,763                197,011
Gross revenues                                              1,415,874            1,268,979              5,597,839              4,816,482
Less: promotional allowances                                (83,318       )      (76,101       )        (313,016      )        (297,086      )
Net revenues                                                1,332,556            1,192,878              5,284,823              4,519,396
OPERATING COSTS AND EXPENSES
Casino                                                      (865,064      )      (750,898      )        (3,374,013    )        (2,904,922    )
Rooms                                                       (8,389        )      (8,260        )        (32,641       )        (33,218       )
Food and beverage                                           (16,056       )      (18,212       )        (57,927       )        (65,781       )
Entertainment, retail and other                             (21,612       )      (27,326       )        (88,268       )        (109,817      )
General and administrative                                  (122,616      )      (120,510      )        (467,121      )        (446,591      )
Payments to the Philippine Parties                          (9,112        )      (9,928        )        (51,661       )        (34,403       )
Pre-opening costs                                           (1,097        )      (1,671        )        (2,274        )        (3,883        )
Development costs                                           (12,976       )      (88           )        (31,115       )        (95           )
Amortization of gaming subconcession                        (14,309       )      (14,309       )        (57,237       )        (57,237       )
Amortization of land use rights                             (5,705        )      (5,704        )        (22,817       )        (22,816       )
Depreciation and amortization                               (113,451      )      (117,515      )        (460,521      )        (472,219      )
Property charges and other                                  (13,215       )      (2,489        )        (31,616       )        (5,298        )
Total operating costs and expenses                          (1,203,602    )      (1,076,910    )        (4,677,211    )        (4,156,280    )
OPERATING INCOME                                            128,954              115,968                607,612                363,116
NON-OPERATING INCOME (EXPENSES)
Interest income                                             1,082                1,738                  3,579                  5,951
Interest expenses, net of capitalized interest              (54,733       )      (56,170       )        (229,582      )        (223,567      )
Other finance costs                                         (7,533        )      (13,344       )        (32,261       )        (55,796       )
Foreign exchange gains (losses), net                        592                  (2,919        )        12,783                 7,356
Other income, net                                           3,024                936                    5,282                  3,572
Loss on extinguishment of debt                              (939          )      (17,435       )        (49,337       )        (17,435       )
Costs associated with debt modification                     -                    (8,101        )        (2,793        )        (8,101        )
Total non-operating expenses, net                           (58,507       )      (95,295       )        (292,329      )        (288,020      )
INCOME BEFORE INCOME TAX                                    70,447               20,673                 315,283                75,096
INCOME TAX CREDIT (EXPENSE)                                 945                  (4,162        )        10                     (8,178        )
NET INCOME                                                  71,392               16,511                 315,293                66,918
NET LOSS ATTRIBUTABLE TO
NONCONTROLLING INTERESTS                                    9,780                26,765                 31,709                 108,988
NET INCOME ATTRIBUTABLE TO
MELCO RESORTS & ENTERTAINMENT LIMITED          $            81,172           $   43,276             $   347,002            $   175,906
NET INCOME ATTRIBUTABLE TO
MELCO RESORTS & ENTERTAINMENT LIMITED PER SHARE:
Basic                                          $            0.055            $   0.030              $   0.236              $   0.116
Diluted                                        $            0.055            $   0.029              $   0.235              $   0.115
NET INCOME ATTRIBUTABLE TO
MELCO RESORTS & ENTERTAINMENT LIMITED PER ADS:
Basic                                          $            0.166            $   0.089              $   0.709              $   0.348
Diluted                                        $            0.164            $   0.088              $   0.704              $   0.346
WEIGHTED AVERAGE SHARES OUTSTANDING
USED IN NET INCOME ATTRIBUTABLE TO
MELCO RESORTS & ENTERTAINMENT LIMITED
PER SHARE CALCULATION:
Basic                                                       1,469,344,163        1,463,660,679          1,467,653,209          1,516,714,277
Diluted                                                     1,482,030,219        1,473,600,609          1,479,342,209          1,525,284,272
Melco Resorts & Entertainment Limited and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands of U.S. dollars)
                                                                 December 31,        December 31,
                                                                 2017                2016
                                                                 (Unaudited)         (Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents                                        $      1,408,211    $      1,702,310
Investment securities                                                   89,874              -
Bank deposits with original maturities over three months                9,884               210,840
Restricted cash                                                         45,412              39,152
Accounts receivable, net                                                176,544             225,438
Amounts due from affiliated companies                                   2,377               1,103
Inventories                                                             34,988              32,600
Prepaid expenses and other current assets                               77,503              68,111
Total current assets                                                    1,844,793           2,279,554
PROPERTY AND EQUIPMENT, NET                                             5,730,760           5,655,823
GAMING SUBCONCESSION, NET                                               256,083             313,320
INTANGIBLE ASSETS                                                       4,220               4,220
GOODWILL                                                                81,915              81,915
LONG-TERM PREPAYMENTS, DEPOSITS AND OTHER ASSETS                        189,645             194,911
RESTRICTED CASH                                                         130                 130
DEFERRED TAX ASSETS                                                     11                  152
LAND USE RIGHTS, NET                                                    787,499             810,316
TOTAL ASSETS                                                     $      8,895,056    $      9,340,341
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable                                                 $      16,041       $      17,434
Accrued expenses and other current liabilities                          1,563,585           1,369,943
Income tax payable                                                      3,179               7,422
Capital lease obligations, due within one year                          33,387              30,730
Current portion of long-term debt, net                                  51,032              50,583
Amounts due to affiliated companies                                     16,790              3,028
Total current liabilities                                               1,684,014           1,479,140
LONG-TERM DEBT, NET                                                     3,506,530           3,669,692
OTHER LONG-TERM LIABILITIES                                             48,087              49,287
DEFERRED TAX LIABILITIES                                                53,994              56,451
CAPITAL LEASE OBLIGATIONS, DUE AFTER ONE YEAR                           265,896             262,357
AMOUNT DUE TO AN AFFILIATED COMPANY                                     919                 -
SHAREHOLDERS’ EQUITY
Ordinary shares                                                         14,784              14,759
Treasury shares                                                         (90       )         (108      )
Additional paid-in capital                                              3,671,805           2,783,062
Accumulated other comprehensive losses                                  (26,610   )         (24,768   )
(Accumulated losses) retained earnings                                  (772,338  )         570,925
Total Melco Resorts & Entertainment Limited shareholders’ equity        2,887,551           3,343,870
Noncontrolling interests                                                448,065             479,544
Total equity                                                            3,335,616           3,823,414
TOTAL LIABILITIES AND EQUITY                                     $      8,895,056    $      9,340,341
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                                   Year Ended
                                               December 31,                                         December 31,
                                               2017                          2016                   2017                   2016
                                               (Unaudited)                   (Unaudited)            (Unaudited)            (Unaudited)
Net Income Attributable to
Melco Resorts & Entertainment Limited          $            81,172           $     43,276           $     347,002          $     175,906
Net Gain on Disposal of Property and Equipment
to Belle Corporation                                        -                      -                      -                      (8,134        )
Pre-opening Costs                                           1,097                  1,671                  2,274                  3,883
Development Costs                                           12,976                 88                     31,115                 95
Property Charges and Other                                  13,215                 2,489                  31,616                 5,298
Loss on Extinguishment of Debt                              939                    17,435                 49,337                 17,435
Costs Associated with Debt Modification                     -                      8,101                  2,793                  8,101
Income Tax Impact on Adjustments                            (98           )        392                    (360          )        378
Noncontrolling Interests Impact on Adjustments              (7,932        )        (10,291       )        (10,606       )        (9,947        )
Adjusted Net Income Attributable to
Melco Resorts & Entertainment Limited          $            101,369          $     63,161           $     453,171          $     193,015
ADJUSTED NET INCOME ATTRIBUTABLE TO
MELCO RESORTS & ENTERTAINMENT LIMITED PER SHARE:
Basic                                          $            0.069            $     0.043            $     0.309            $     0.127
Diluted                                        $            0.068            $     0.043            $     0.306            $     0.127
ADJUSTED NET INCOME ATTRIBUTABLE TO
MELCO RESORTS & ENTERTAINMENT LIMITED PER ADS:
Basic                                          $            0.207            $     0.129            $     0.926            $     0.382
Diluted                                        $            0.205            $     0.129            $     0.919            $     0.380
WEIGHTED AVERAGE SHARES OUTSTANDING
USED IN ADJUSTED NET INCOME ATTRIBUTABLE TO
MELCO RESORTS & ENTERTAINMENT LIMITED
PER SHARE CALCULATION:
Basic                                                       1,469,344,163          1,463,660,679          1,467,653,209          1,516,714,277
Diluted                                                     1,482,030,219          1,473,600,609          1,479,342,209          1,525,284,272
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 December 31, 2017
                                   Altira Macau      Mocha          City of Dreams     Studio City   City of         Corporate        Total
                                                                                                     Dreams          and Others
                                                                                                     Manila
                                   (Unaudited)       (Unaudited)    (Unaudited)        (Unaudited)   (Unaudited)     (Unaudited)      (Unaudited)
Operating Income (Loss)            $    13,039       $   5,114      $    132,793       $     28,915  $   19,972      $   (70,879 )    $     128,954
Payments to the Philippine Parties      -                -               -                   -           9,112           -                  9,112
Land Rent to Belle Corporation          -                -               -                   -           782             -                  782
Pre-opening Costs                       -                -               966                 131         -               -                  1,097
Development Costs                       -                -               -                   -           -               12,976             12,976
Depreciation and Amortization           4,975            2,090           40,782              46,081      21,042          18,495             133,465
Share-based Compensation                54               (73   )         828                 367         247             3,787              5,210
Property Charges and Other              (611   )         305             (5,692  )           15,981      2,638           594                13,215
Adjusted EBITDA                         17,457           7,436           169,677             91,475      53,793          (35,027 )          304,811
Corporate and Others Expenses           -                -               -                   -           -               35,027             35,027
Adjusted Property EBITDA           $    17,457       $   7,436      $    169,677       $     91,475  $   53,793      $   -            $     339,838
                                   Three Months Ended December 31, 2016
                                   Altira Macau      Mocha          City of Dreams     Studio City   City of         Corporate        Total
                                                                                                     Dreams          and Others
                                                                                                     Manila
                                   (Unaudited)       (Unaudited)    (Unaudited)        (Unaudited)   (Unaudited)     (Unaudited)      (Unaudited)
Operating (Loss) Income            $    (2,410 )     $   2,593      $    139,279       $     9,373   $   19,917      $   (52,784 )    $     115,968
Payments to the Philippine Parties      -                -               -                   -           9,928           -                  9,928
Land Rent to Belle Corporation          -                -               -                   -           803             -                  803
Pre-opening Costs                       -                -               1,047               624         -               -                  1,671
Development Costs                       -                -               -                   -           -               88                 88
Depreciation and Amortization           5,652            2,797           44,505              45,646      21,443          17,485             137,528
Share-based Compensation                45               45              601                 80          117             2,851              3,739
Property Charges and Other              -                -               3,245               931         (2,008 )        321                2,489
Adjusted EBITDA                         3,287            5,435           188,677             56,654      50,200          (32,039 )          272,214
Corporate and Others Expenses           -                -               -                   -           -               32,039             32,039
Adjusted Property EBITDA           $    3,287        $   5,435      $    188,677       $     56,654  $   50,200      $   -            $     304,253
Melco Resorts & Entertainment Limited and Subsidiaries
Reconciliation of Operating Income (Loss) to
Adjusted EBITDA and Adjusted Property EBITDA
(In thousands of U.S. dollars)
                                   Year Ended December 31, 2017
                                   Altira Macau               Mocha         City of Dreams   Studio City      City of          Corporate         Total
                                                                                                              Dreams           and Others
                                                                                                              Manila
                                   (Unaudited)                (Unaudited)   (Unaudited)      (Unaudited)      (Unaudited)      (Unaudited)       (Unaudited)
Operating (Loss) Income            $           (149        )  $     18,206  $       625,766  $   126,247      $   92,636       $   (255,094 )    $   607,612
Payments to the Philippine Parties             -                    -               -            -                51,661           -                 51,661
Land Rent to Belle Corporation                 -                    -               -            -                3,143            -                 3,143
Pre-opening Costs                              -                    -               1,933        116              225              -                 2,274
Development Costs                              -                    -               -            -                -                31,115            31,115
Depreciation and Amortization                  20,973               8,312           171,216      184,456          84,200           71,418            540,575
Share-based Compensation                       204                  24              2,934        1,294            516              12,333            17,305
Property Charges and Other                     (357        )        97              3,023        23,455           2,638            2,760             31,616
Adjusted EBITDA                                20,671               26,639          804,872      335,568          235,019          (137,468 )        1,285,301
Corporate and Others Expenses                  -                    -               -            -                -                137,468           137,468
Adjusted Property EBITDA           $           20,671         $     26,639  $       804,872  $   335,568      $   235,019      $   -             $   1,422,769
                                   Year Ended December 31, 2016
                                   Altira Macau               Mocha         City of Dreams   Studio City      City of          Corporate         Total
                                                                                                              Dreams           and Others
                                                                                                              Manila
                                   (Unaudited)                (Unaudited)   (Unaudited)      (Unaudited)      (Unaudited)      (Unaudited)       (Unaudited)
Operating (Loss) Income            $           (18,091     )  $     11,694  $       559,470  $   (29,099 )    $   38,705       $   (199,563 )    $   363,116
Payments to the Philippine Parties             -                    -               -            -                34,403           -                 34,403
Land Rent to Belle Corporation                 -                    -               -            -                3,327            -                 3,327
Net Gain on Disposal of Property and Equipment
to Belle Corporation                           -                    -               -            -                (8,134  )        -                 (8,134    )
Pre-opening Costs                              -                    -               1,355        2,528            -                -                 3,883
Development Costs                              -                    -               -            -                -                95                95
Depreciation and Amortization                  22,950               11,921          175,676      179,905          91,389           70,431            552,272
Share-based Compensation                       60                   174             2,354        826              2,087            12,986            18,487
Property Charges and Other                     197                  -               3,436        1,825            (1,441  )        1,281             5,298
Adjusted EBITDA                                5,116                23,789          742,291      155,985          160,336          (114,770 )        972,747
Corporate and Others Expenses                  -                    -               -            -                -                114,770           114,770
Adjusted Property EBITDA           $           5,116          $     23,789  $       742,291  $   155,985      $   160,336      $   -             $   1,087,517
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                Year Ended
                                                                 December 31,                      December 31,
                                                                 2017             2016             2017               2016
                                                                 (Unaudited)      (Unaudited)      (Unaudited)        (Unaudited)
Net Income Attributable to Melco Resorts & Entertainment Limited $     81,172     $     43,276     $     347,002      $     175,906
Net Loss Attributable to Noncontrolling Interests                      (9,780  )        (26,765 )        (31,709   )        (108,988  )
Net Income                                                             71,392           16,511           315,293            66,918
Income Tax (Credit) Expense                                            (945    )        4,162            (10       )        8,178
Interest and Other Non-Operating Expenses, Net                         58,507           95,295           292,329            288,020
Property Charges and Other                                             13,215           2,489            31,616             5,298
Share-based Compensation                                               5,210            3,739            17,305             18,487
Depreciation and Amortization                                          133,465          137,528          540,575            552,272
Development Costs                                                      12,976           88               31,115             95
Pre-opening Costs                                                      1,097            1,671            2,274              3,883
Net Gain on Disposal of Property and Equipment
to Belle Corporation                                                   -                -                -                  (8,134    )
Land Rent to Belle Corporation                                         782              803              3,143              3,327
Payments to the Philippine Parties                                     9,112            9,928            51,661             34,403
Adjusted EBITDA                                                        304,811          272,214          1,285,301          972,747
Corporate and Others Expenses                                          35,027           32,039           137,468            114,770
Adjusted Property EBITDA                                         $     339,838    $     304,253    $     1,422,769    $     1,087,517
Melco Resorts & Entertainment Limited and Subsidiaries
Supplemental Data Schedule
                                                     Three Months Ended                        Year Ended
                                                     December 31,                              December 31,
                                                     2017                 2016                 2017                 2016
Room Statistics:
       Altira Macau
               Average daily rate                    $        209         $        210         $        204         $        205
               Occupancy per available room                   99       %           94       %           96       %           94       %
               Revenue per available room            $        207         $        197         $        196         $        193
       City of Dreams
               Average daily rate                    $        209         $        205         $        202         $        200
               Occupancy per available room                   97       %           98       %           97       %           96       %
               Revenue per available room            $        202         $        199         $        196         $        192
       Studio City
               Average daily rate                    $        145         $        138         $        140         $        136
               Occupancy per available room                   99       %           99       %           99       %           98       %
               Revenue per available room            $        144         $        137         $        138         $        133
       City of Dreams Manila
               Average daily rate                    $        163         $        156         $        158         $        159
               Occupancy per available room                   97       %           96       %           96       %           91       %
               Revenue per available room            $        158         $        149         $        152         $        145
Other Information:
       Altira Macau
               Average number of table games                  103                  114                  107                  121
               Average number of gaming machines              120                  62                   73                   62
               Table games win per unit per day      $        19,358      $        13,447      $        15,478      $        13,448
               Gaming machines win per unit per day  $        112         $        94          $        106         $        93
       City of Dreams
               Average number of table games                  479                  488                  479                  494
               Average number of gaming machines              712                  956                  746                  1,029
               Table games win per unit per day      $        15,013      $        15,319      $        16,408      $        15,027
               Gaming machines win per unit per day  $        726         $        466         $        557         $        381
       Studio City
               Average number of table games                  293                  266                  288                  251
               Average number of gaming machines              883                  1,103                951                  1,097
               Table games win per unit per day      $        14,123      $        8,282       $        12,932      $        6,871
               Gaming machines win per unit per day  $        272         $        200         $        225         $        189
       City of Dreams Manila
               Average number of table games                  291                  272                  283                  270
               Average number of gaming machines              1,800                1,686                1,786                1,656
               Table games win per unit per day      $        5,473       $        4,576       $        5,432       $        3,939
               Gaming machines win per unit per day  $        265         $        255         $        271         $        217
               Average daily rate is calculated by dividing total room revenue including the retail value of promotional allowances by total occupied rooms including complimentary rooms
               Revenue per available room is calculated by dividing total room revenue including the retail value of promotional allowances by total rooms available
               Table games win per unit per day is shown before discounts and commissions
               Gaming machines win per unit per day is shown before deducting cost for slot points

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