Melco Announces Unaudited Second Quarter 2020 Earnings
08/20/2020 - 07:53 AM
MACAU, Aug. 20, 2020 (GLOBE NEWSWIRE) -- 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 second quarter of 2020.
Total operating revenues for the second quarter of 2020 were US$0.18 billion , representing a decrease of approximately 88% from US$1.46 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 second quarter of 2020.
Operating loss for the second quarter of 2020 was US$370.8 million , compared with operating income of US$208.0 million in the second quarter of 2019.
Melco generated negative Adjusted Property EBITDA(1) of US$156.3 million in the second quarter of 2020, compared with Adjusted Property EBITDA of US$448.0 million in the second quarter of 2019.
Net loss attributable to Melco Resorts & Entertainment Limited for the second quarter of 2020 was US$368.1 million , or US$0.77 per ADS, compared with net income attributable to Melco Resorts & Entertainment Limited of US$101.8 million , or US$0.21 per ADS, in the second quarter of 2019. The net loss attributable to noncontrolling interests during the second quarters of 2020 and 2019 were US$58.7 million and US$2.5 million , respectively, 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 and quarantine requirements have significantly impacted our second quarter operating and financial performance. To help mitigate the impact from COVID-19, we have been quick to formulate strategies to preserve liquidity and improve the Company’s balance sheet. In April, we bolstered our balance sheet by entering into a new senior facilities agreement and by selling the shares we held in Crown Resorts Limited. In May, the board suspended the Company’s quarterly dividend program.
“To further enhance our balance sheet, our subsidiary, Melco Resorts Finance Limited, recently accessed the capital markets and issued US$850 million aggregate principal amount of 5.750% senior notes due 2028.
“In addition, in relation to our Studio City project, Studio City Finance Limited, a wholly-owned subsidiary of Studio City International Holdings Limited (“SCIHL”), issued US$500 million aggregate principal amount of 6.00% senior notes due 2025, and US$500 million aggregate principal amount of 6.50% senior notes due 2028 in July. In August, SCIHL also completed a series of private placements of its Class A ordinary shares and American depositary shares to certain existing shareholders, including Melco, which resulted in gross proceeds to SCIHL of approximately US$500 million . Proceeds from the Studio City transactions significantly strengthen SCIHL’s balance sheet and its ability to fund the Phase 2 expansion of Studio City.
“Melco continues to manage its balance sheet in a prudent manner. As of June 30, 2020, we had cash on hand of approximately US$1.2 billion , and undrawn revolver facilities of approximately US$1.6 billion . Proforma for the issuance of the new senior notes and the Studio City private share placements (but excluding Melco’s subscription therein of approximately US$280 million ), Melco’s cash on hand as of June 30, 2020 was approximately US$2.0 billion , while the undrawn revolver facilities in Macau and Manila were approximately US$2.0 billion .
“Despite the current economic uncertainty, sustainability remains a high priority in Melco’s operations. We published our 2019 Sustainability Report, in June, highlighting our progress made in the last twelve months, which includes: 1) receiving an A- and “Best First Time Performer” accolade from CDP, one of the world’s most respected and long-standing environmental disclosure systems, 2) diverting 712 tons of waste from disposal to recycling and composting, and 3) installing solar panels at City of Dreams Manila with the potential to generate 100,000 kWh of electricity per month. In July, Melco became a signatory to the Global Tourism Plastics Initiative led by the UN Environment Programme and the World Tourism Organisation in collaboration with the Ellen MacArthur Foundation.
“Melco remains committed to its global development program. Construction on the expansion of Studio City is progressing. Upon completion, it 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, culture of exceptional guest service, and commitment to employee development puts Melco in a strong position to help Japan realize the vision of developing a world-leading IR with a unique, Japanese touch.
“Lastly, we are excited to see some early signs of returning to normal operations in our integrated resorts. In mid-June, operations at Cyprus Casinos have partially resumed. In addition, commencing from July 15, 2020, certain travelers entering Guangdong from Macau were no longer subject to mandatory quarantine. The issuance of IVS visas was reinstated for Zhuhai residents on August 12, 2020, while the nationwide resumption of IVS visa issuance is expected to commence on September 23, 2020. We are hopeful these announcements signal the eventual resumption of the pre-COVID travel between Macau and Mainland China. 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.”
City of Dreams Second Quarter Results
For the quarter ended June 30, 2020, total operating revenues at City of Dreams were US$105.4 million , compared to US$790.8 million in the second quarter of 2019. City of Dreams generated negative Adjusted EBITDA of US$70.3 million in the second quarter of 2020, compared with Adjusted EBITDA of US$250.8 million in the second 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$2.03 billion for the second quarter of 2020 versus US$14.90 billion in the second quarter of 2019. The rolling chip win rate was 6.13% in the second quarter of 2020 versus 3.16% in the second quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15% .
Mass market table games drop decreased to US$41.4 million in the second quarter of 2020, compared with US$1.37 billion in the second quarter of 2019. The mass market table games hold percentage was 31.5% in the second quarter of 2020 compared to 31.6% in the second quarter of 2019.
Gaming machine handle for the second quarter of 2020 was US$82.5 million , compared with US$1.04 billion in the second quarter of 2019. The gaming machine win rate was 1.8% in the second quarter of 2020 versus 3.8% in the second quarter of 2019.
Total non-gaming revenue at City of Dreams in the second quarter of 2020 was US$12.8 million , compared with US$98.4 million in the second quarter of 2019.
Altira Macau Second Quarter Results
For the quarter ended June 30, 2020, total operating revenues at Altira Macau were US$17.0 million , compared to US$104.3 million in the second quarter of 2019. Altira Macau generated negative Adjusted EBITDA of US$19.4 million in the second quarter of 2020, compared with Adjusted EBITDA of US$8.5 million in the second 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$0.37 billion in the second quarter of 2020 versus US$4.36 billion in the second quarter of 2019. The rolling chip win rate was 6.19% in the second quarter of 2020 versus 2.95% in the second quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15% .
In the mass market table games segment, drop was US$14.5 million in the second quarter of 2020 versus US$150.0 million in the second quarter of 2019. The mass market table games hold percentage was 11.3% in the second quarter of 2020, compared with 22.5% in the second quarter of 2019.$43.4 million , compared with US$83.5 million in the second quarter of 2019. The gaming machine win rate was 3.5% in the second quarter of 2020 versus 4.4% in the second quarter of 2019.
Total non-gaming revenue at Altira Macau in the second quarter of 2020 was US$1.4 million , compared with US$6.6 million in the second quarter of 2019.
Mocha Clubs Second Quarter Results
Total operating revenues from Mocha Clubs were US$23.2 million in the second quarter of 2020, compared to US$28.9 million in the second quarter of 2019. Mocha Clubs generated US$4.4 million of Adjusted EBITDA in the second quarter of 2020, compared with US$5.3 million in the same period in 2019.
Gaming machine handle for the second quarter of 2020 was US$496.2 million , compared with US$609.4 million in the second quarter of 2019. The gaming machine win rate was 4.7% in the second quarter of 2020 versus 4.8% in the second quarter of 2019.
Studio City Second Quarter Results
For the quarter ended June 30, 2020, total operating revenues at Studio City were US$10.9 million , compared to US$328.9 million in the second quarter of 2019. Studio City generated negative Adjusted EBITDA of US$42.3 million in the second quarter of 2020, compared with Adjusted EBITDA of US$94.8 million in the second 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$0.23 billion in the second quarter of 2020 versus US$3.10 billion in the second quarter of 2019. The rolling chip win rate was 0.17% in the second quarter of 2020 versus 2.76% in the second quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15% .
Mass market table games drop decreased to US$20.1 million in the second quarter of 2020, compared with US$877.0 million in the second quarter of 2019. The mass market table games hold percentage was 22.2% in the second quarter of 2020, compared to 29.2% in the second quarter of 2019.
Gaming machine handle for the second quarter of 2020 was US$67.6 million , compared with US$630.9 million in the second quarter of 2019. The gaming machine win rate was 2.7% in the second quarter of 2020 versus 3.2% in the second quarter of 2019.
Total non-gaming revenue at Studio City in the second quarter of 2020 was US$7.6 million , compared with US$36.9 million in the second quarter of 2019.
City of Dreams Manila Second Quarter Results
For the quarter ended June 30, 2020, total operating revenues at City of Dreams Manila were US$7.2 million , compared to US$176.1 million in the second quarter of 2019. City of Dreams Manila generated negative Adjusted EBITDA of US$22.6 million in the second quarter of 2020, compared with Adjusted EBITDA of US$82.8 million in the comparable period of 2019. The year-over-year decrease in Adjusted EBITDA was primarily a result of the government-mandated casino closure for all of the second quarter of 2020 (other than the limited dry/trial run for a limited period during the quarter as permitted by the Philippine Amusement and Gaming Corporation (“PAGCOR”)).
City of Dreams Manila’s rolling chip volume was US$0.15 billion in the second quarter of 2020 versus US$1.90 billion in the second quarter of 2019. The rolling chip win rate was 3.38% in the second quarter of 2020 versus 5.21% in the second quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15% .
Mass market table games drop decreased to US$7.5 million for the second quarter of 2020, compared with US$192.8 million in the second quarter of 2019. The mass market table games hold percentage was 24.3% in the second quarter of 2020, compared to 30.4% in the second quarter of 2019.
Gaming machine handle for the second quarter of 2020 was US$30.4 million , compared with US$945.1 million in the second quarter of 2019. The gaming machine win rate was 6.6% in the second quarter of 2020 versus 5.4% in the second quarter of 2019.
Total non-gaming revenue at City of Dreams Manila in the second quarter of 2020 was US$1.4 million , compared with US$31.8 million in the second quarter of 2019.
Cyprus Operations Second 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 June 30, 2020, total operating revenues at Cyprus Casinos were US$3.5 million , compared to US$22.1 million in the second quarter of 2019. Cyprus Casinos generated negative Adjusted EBITDA of US$6.0 million in the second quarter of 2020, compared with Adjusted EBITDA of US$5.8 million in the second quarter of 2019. The year-over-year decrease in Adjusted EBITDA was primarily a result of government-mandated casino closures in the second quarter of 2020.
No rolling chip gross gaming revenue was generated in the second quarter 2020. Rolling chip volume totaled US$0.2 million with a rolling chip win rate of negative 23.12% in the second quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15% .
Mass market table games drop was US$4.1 million in the second quarter of 2020 versus US$35.3 million in the second quarter of 2019. The mass market table games hold percentage was 11.1% in the second quarter of 2020, compared to 21.1% in the second quarter of 2019.
Gaming machine handle for the second quarter of 2020 was US$57.2 million , compared with US$271.7 million in the second quarter of 2019. The gaming machine win rate was 5.2% in the second quarter of 2020 versus 5.4% in the second quarter of 2019.
Other Factors Affecting Earnings
Total net non-operating expenses for the second quarter of 2020 were US$57.9 million , which mainly included interest expenses, net of amounts capitalized of US$80.3 million , partially offset by other net non-operating income of US$27.6 million , which was primarily attributable to the fair value gain from the investment in shares of Crown Resorts Limited during the second quarter of 2020.
Depreciation and amortization costs of US$155.2 million were recorded in the second 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.
The negative Adjusted EBITDA for Studio City for the three months ended June 30, 2020 referred to in this press release is US$8.7 million less than the negative Adjusted EBITDA of Studio City contained in the earnings release for SCIHL dated August 20, 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 costs related to the table games operations at Studio City Casino.
Financial Position and Capital Expenditures
Total cash and bank balances as of June 30, 2020 aggregated to US$1.17 billion , including US$25.0 million of restricted cash, which was primarily related to Studio City. Total debt, net of unamortized deferred financing costs and original issue premiums, was US$4.75 billion at the end of the second quarter of 2020.
Capital expenditures for the second quarter of 2020 were US$82.5 million , which primarily related to various projects at City of Dreams and Studio City Phase 2 construction.
Recent Developments
The COVID-19 outbreak continues to have a material effect on our operations, financial position, and prospects during the third quarter of 2020.
Commencing from July 15, 2020, certain travelers entering Guangdong from Macau were no longer subject to mandatory quarantine. On August 12, 2020, the Chinese authorities resumed the issuance of IVS visas for Zhuhai residents. According to the National Immigration Administration, issuance of IVS visas for Guangdong residents will resume on August 26, 2020, while the nationwide resumption of IVS visa issuance will commence 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. Additionally, health-related precautionary measures remain in place at our properties in Macau, which could continue to impact visitation and customer spending.
Our Philippines casino gaming operations were closed due to the enhanced community quarantine for the entire island of Luzon, including Metro Manila, which began on March 16, 2020 and was extended to July 31, 2020. However, during the quarter, City of Dreams Manila was allowed by PAGCOR to undertake a dry run/trial run of its gaming and hospitality operations for a limited period with only 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 aimed to address all potential operational concerns to achieve a seamless reopening for City of Dreams Manila.
The COVID-19 outbreak has also impacted the construction of the Studio City Phase 2 project and the progress of construction works 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 second quarter 2020 financial results on Thursday, August 20, 2020 at 8:30 a.m. Eastern Time (or 8:30 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 7753658
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 7753658
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.
Non-GAAP Financial Measures
(1) “Adjusted EBITDA” is earnings before interest, taxes, depreciation, amortization, pre-opening costs, development costs, property charges and other, share-based compensation, payments to the Philippine parties under the cooperative arrangement (the “Philippine Parties”), land rent to Belle Corporation and other non-operating income and expenses. “Adjusted Property EBITDA” is earnings before interest, taxes, depreciation, amortization, pre-opening costs, development costs, property charges and other, share-based compensation, payments to the Philippine Parties, land rent to Belle Corporation, Corporate and Other expenses and other non-operating income and expenses. Adjusted EBITDA and Adjusted Property EBITDA are presented exclusively as supplemental disclosures because management believes they are widely used to measure the performance, and as a basis for valuation, of gaming companies. Management uses Adjusted EBITDA and Adjusted Property EBITDA as measures of the operating performance of its segments and to compare the operating performance of its properties with those of its competitors. The Company also presents Adjusted EBITDA and Adjusted Property EBITDA because they are used by some investors as ways to measure a company’s ability to incur and service debt, make capital expenditures, and meet working capital requirements. Gaming companies have historically reported Adjusted EBITDA and Adjusted Property EBITDA as supplements to financial measures in accordance with U.S. GAAP. However, Adjusted EBITDA and Adjusted Property EBITDA should not be considered as alternatives to operating income/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 net 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.
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 www.cityofdreamsmacau.com www.mochaclubs.com www.studiocity-macau.com www.cityofdreamsmanila.com www.cityofdreamsmed.com.cy 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: richardlshuang@melco-resorts.com
For media enquiries, please contact: chimmyleung@melco-resorts.com
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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 (As adjusted)(3) (As adjusted)(3) Operating revenues: Casino $ 147,584 $ 1,287,674 $ 860,139 $ 2,485,578 Rooms 7,223 86,411 52,044 170,480 Food and beverage 5,719 57,465 34,662 113,664 Entertainment, retail and other 15,324 32,847 40,180 77,782 Total operating revenues 175,850 1,464,397 987,025 2,847,504 Operating costs and expenses: Casino (215,789 ) (818,247 ) (779,630 ) (1,600,071 ) Rooms (8,383 ) (21,845 ) (26,324 ) (44,338 ) Food and beverage (15,430 ) (43,585 ) (47,660 ) (88,486 ) Entertainment, retail and other (15,213 ) (26,433 ) (35,537 ) (48,247 ) General and administrative (113,932 ) (146,407 ) (245,229 ) (277,877 ) Payments to the Philippine Parties 2,771 (23,203 ) (4,935 ) (37,255 ) Pre-opening costs (226 ) (603 ) (621 ) (4,113 ) Development costs (6,372 ) (3,920 ) (19,802 ) (9,440 ) Amortization of gaming subconcession (14,363 ) (14,209 ) (28,686 ) (28,395 ) Amortization of land use rights (5,726 ) (5,664 ) (11,435 ) (11,319 ) Depreciation and amortization (135,085 ) (142,544 ) (277,318 ) (281,722 ) Property charges and other (18,892 ) (9,774 ) (30,564 ) (17,206 ) Total operating costs and expenses (546,640 ) (1,256,434 ) (1,507,741 ) (2,448,469 ) Operating (loss) income (370,790 ) 207,963 (520,716 ) 399,035 Non-operating income (expenses): Interest income 1,153 1,448 2,295 3,572 Interest expenses, net of amounts capitalized (80,269 ) (75,922 ) (158,424 ) (145,545 ) Loan commitment fees (1,929 ) (507 ) (3,173 ) (790 ) Foreign exchange losses, net (2,907 ) (9,316 ) (6,218 ) (9,330 ) Other income (expenses), net 27,590 (23,078 ) (151,807 ) (16,351 ) Loss on extinguishment of debt (1,236 ) - (1,236 ) (3,721 ) Costs associated with debt modification (310 ) - (310 ) (579 ) Total non-operating expenses, net (57,908 ) (107,375 ) (318,873 ) (172,744 ) (Loss) income before income tax (428,698 ) 100,588 (839,589 ) 226,291 Income tax credit (expense) 1,886 (1,298 ) 6,726 (4,989 ) Net (loss) income (426,812 ) 99,290 (832,863 ) 221,302 Net loss attributable to noncontrolling interests 58,683 2,490 100,686 542 Net (loss) income attributable to Melco Resorts & Entertainment Limited $ (368,129 ) $ 101,780 $ (732,177 ) $ 221,844 Net (loss) income attributable to Melco Resorts & Entertainment Limited per share: Basic $ (0.257 ) $ 0.071 $ (0.511 ) $ 0.154 Diluted $ (0.257 ) $ 0.070 $ (0.511 ) $ 0.154 Net (loss) income attributable to Melco Resorts & Entertainment Limited per ADS: Basic $ (0.772 ) $ 0.213 $ (1.533 ) $ 0.463 Diluted $ (0.772 ) $ 0.211 $ (1.533 ) $ 0.461 Weighted average shares outstanding used in net (loss) income attributable to Melco Resorts & Entertainment Limited per share calculation: Basic 1,430,748,936 1,436,695,517 1,433,255,599 1,436,127,426 Diluted 1,430,748,936 1,444,897,243 1,433,255,599 1,443,357,571
(3) In connection with the Company's acquisition of a 75% interest in ICR Cyprus Holdings Limited ("ICR Cyprus") from its parent company, Melco International Development Limited, on July 31, 2019, the prior period amounts presented in these unaudited condensed consolidated financial statements have been adjusted to include the financial results of the ICR Cyprus group in accordance with applicable accounting standards.
Melco Resorts & Entertainment Limited and Subsidiaries Condensed Consolidated Balance Sheets (In thousands of U.S. dollars, except share and per share data) June 30, December 31, 2020 2019 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,144,673 $ 1,394,982 Investment securities 24,494 49,369 Restricted cash 24,589 37,390 Accounts receivable, net 176,547 284,333 Amounts due from affiliated companies 334 442 Inventories 41,126 43,959 Prepaid expenses and other current assets 110,093 84,197 Total current assets 1,521,856 1,894,672 Property and equipment, net 5,656,967 5,723,909 Gaming subconcession, net 113,412 141,440 Intangible assets, net 30,523 31,628 Goodwill 86,568 95,620 Long-term prepayments, deposits and other assets 209,848 176,478 Investment securities - 568,936 Restricted cash 406 130 Deferred tax assets 6,285 3,558 Operating lease right-of-use assets 100,538 111,043 Land use rights, net 733,216 741,008 Total assets $ 8,459,619 $ 9,488,422 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 9,254 $ 21,882 Accrued expenses and other current liabilities 993,166 1,420,516 Income tax payable 7,704 8,516 Operating lease liabilities, current 28,431 33,152 Finance lease liabilities, current 53,264 39,725 Current portion of long-term debt, net - 146 Amounts due to affiliated companies 1,822 1,523 Total current liabilities 1,093,641 1,525,460 Long-term debt, net 4,750,712 4,393,985 Other long-term liabilities 21,403 18,773 Deferred tax liabilities, net 49,329 56,677 Operating lease liabilities, non-current 80,106 88,259 Finance lease liabilities, non-current 263,659 262,040 Total liabilities 6,258,850 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; 1,430,797,219 and 1,437,328,096 shares outstanding, respectively 14,565 14,565 Treasury shares, at cost; 25,750,723 and 19,219,846 shares, respectively (121,821 ) (90,585 ) Additional paid-in capital 3,185,874 3,178,579 Accumulated other comprehensive losses (33,604 ) (18,803 ) Accumulated losses (1,456,081 ) (644,788 ) Total Melco Resorts & Entertainment Limited shareholders’ equity 1,588,933 2,438,968 Noncontrolling interests 611,836 704,260 Total shareholders' equity 2,200,769 3,143,228 Total liabilities and shareholders' equity $ 8,459,619 $ 9,488,422
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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 (As adjusted)(3) (As adjusted)(3) Net (loss) income attributable to Melco Resorts & Entertainment Limited $ (368,129 ) $ 101,780 $ (732,177 ) $ 221,844 Pre-opening costs 226 603 621 4,113 Development costs 6,372 3,920 19,802 9,440 Property charges and other 18,892 9,774 30,564 17,206 Loss on extinguishment of debt 1,236 - 1,236 3,721 Costs associated with debt modification 310 - 310 579 Income tax impact on adjustments (1,491 ) (1,213 ) (3,823 ) (2,282 ) Noncontrolling interests impact on adjustments (129 ) (3,939 ) (2,356 ) (7,084 ) Adjusted net (loss) income attributable to Melco Resorts & Entertainment Limited $ (342,713 ) $ 110,925 $ (685,823 ) $ 247,537 Adjusted net (loss) income attributable to Melco Resorts & Entertainment Limited per share: Basic $ (0.240 ) $ 0.077 $ (0.479 ) $ 0.172 Diluted $ (0.240 ) $ 0.077 $ (0.479 ) $ 0.171 Adjusted net (loss) income attributable to Melco Resorts & Entertainment Limited per ADS: Basic $ (0.719 ) $ 0.232 $ (1.436 ) $ 0.517 Diluted $ (0.719 ) $ 0.230 $ (1.436 ) $ 0.514 Weighted average shares outstanding used in adjusted net (loss) income attributable to Melco Resorts & Entertainment Limited per share calculation: Basic 1,430,748,936 1,436,695,517 1,433,255,599 1,436,127,426 Diluted 1,430,748,936 1,444,897,243 1,433,255,599 1,443,357,571
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 June 30, 2020 Altira Macau Mocha City of Dreams Studio City City of Dreams Manila Cyprus Operations Corporate and Other Total Operating (loss) income $ (25,382 ) $ 2,543 $ (141,229 ) $ (86,621 ) $ (37,539 ) $ (9,213 ) $ (73,349 ) $ (370,790 ) Payments to the Philippine Parties - - - - (2,771 ) - - (2,771 ) Land rent to Belle Corporation - - - - 785 - - 785 Pre-opening costs - - (50 ) 28 - 248 - 226 Development costs - - - - - - 6,372 6,372 Depreciation and amortization 5,269 1,833 63,159 43,811 16,354 2,821 21,927 155,174 Share-based compensation 111 36 1,391 539 408 22 9,969 12,476 Property charges and other 564 - 6,387 (99 ) 203 132 11,705 18,892 Adjusted EBITDA (19,438 ) 4,412 (70,342 ) (42,342 ) (22,560 ) (5,990 ) (23,376 ) (179,636 ) Corporate and Other expenses - - - - - - 23,376 23,376 Adjusted Property EBITDA $ (19,438 ) $ 4,412 $ (70,342 ) $ (42,342 ) $ (22,560 ) $ (5,990 ) $ - $ (156,260 ) Three Months Ended June 30, 2019 Altira Macau Mocha City of Dreams Studio City City of Dreams Manila Cyprus Operations Corporate and Other Total (As adjusted)(3) (As adjusted)(3) (As adjusted)(3) Operating income (loss) $ 2,484 $ 3,650 $ 183,527 $ 39,185 $ 39,451 $ 2,590 $ (62,924 ) $ 207,963 Payments to the Philippine Parties - - - - 23,203 - - 23,203 Land rent to Belle Corporation - - - - 762 - - 762 Pre-opening costs - - (46 ) 60 (7 ) 596 - 603 Development costs - - - - - - 3,920 3,920 Depreciation and amortization 5,883 1,989 66,293 46,610 19,023 2,589 20,030 162,417 Share-based compensation 104 38 1,065 508 348 51 6,142 8,256 Property charges and other 15 (389 ) (66 ) 8,413 51 - 1,750 9,774 Adjusted EBITDA 8,486 5,288 250,773 94,776 82,831 5,826 (31,082 ) 416,898 Corporate and Other expenses - - - - - - 31,082 31,082 Adjusted Property EBITDA $ 8,486 $ 5,288 $ 250,773 $ 94,776 $ 82,831 $ 5,826 $ - $ 447,980
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) Six Months Ended June 30, 2020 Altira Macau Mocha City of Dreams Studio City City of Dreams Manila Cyprus Operations Corporate and Other Total Operating (loss) income $ (40,082 ) $ 852 $ (148,106 ) $ (143,731 ) $ (33,251 ) $ (9,255 ) $ (147,143 ) $ (520,716 ) Payments to the Philippine Parties - - - - 4,935 - - 4,935 Land rent to Belle Corporation - - - - 1,562 - - 1,562 Pre-opening costs 37 - (50 ) 56 - 578 - 621 Development costs - - - - - - 19,802 19,802 Depreciation and amortization 10,679 3,609 126,510 86,644 32,820 5,658 51,519 317,439 Share-based compensation 226 5 2,448 932 726 101 16,646 21,084 Property charges and other 636 26 9,808 4,343 203 132 15,416 30,564 Adjusted EBITDA (28,504 ) 4,492 (9,390 ) (51,756 ) 6,995 (2,786 ) (43,760 ) (124,709 ) Corporate and Other expenses - - - - - - 43,760 43,760 Adjusted Property EBITDA $ (28,504 ) $ 4,492 $ (9,390 ) $ (51,756 ) $ 6,995 $ (2,786 ) $ - $ (80,949 ) Six Months Ended June 30, 2019 Altira Macau Mocha City of Dreams Studio City City of Dreams Manila Cyprus Operations Corporate and Other Total (As adjusted)(3) (As adjusted)(3) (As adjusted)(3) Operating income (loss) $ 12,188 $ 7,566 $ 341,747 $ 87,664 $ 62,456 $ 5,693 $ (118,279 ) $ 399,035 Payments to the Philippine Parties - - - - 37,255 - - 37,255 Land rent to Belle Corporation - - - - 1,518 - - 1,518 Pre-opening costs 25 - 5 2,549 (7 ) 1,541 - 4,113 Development costs - - - - - - 9,440 9,440 Depreciation and amortization 11,307 3,991 131,995 91,769 38,150 5,265 38,959 321,436 Share-based compensation 204 81 1,711 692 630 76 11,285 14,679 Property charges and other 42 (361 ) 3,877 8,542 3,356 - 1,750 17,206 Adjusted EBITDA 23,766 11,277 479,335 191,216 143,358 12,575 (56,845 ) 804,682 Corporate and Other expenses - - - - - - 56,845 56,845 Adjusted Property EBITDA $ 23,766 $ 11,277 $ 479,335 $ 191,216 $ 143,358 $ 12,575 $ - $ 861,527
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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 (As adjusted)(3) (As adjusted)(3) Net (loss) income attributable to Melco Resorts & Entertainment Limited $ (368,129 ) $ 101,780 $ (732,177 ) $ 221,844 Net loss attributable to noncontrolling interests (58,683 ) (2,490 ) (100,686 ) (542 ) Net (loss) income (426,812 ) 99,290 (832,863 ) 221,302 Income tax (credit) expense (1,886 ) 1,298 (6,726 ) 4,989 Interest and other non-operating expenses, net 57,908 107,375 318,873 172,744 Property charges and other 18,892 9,774 30,564 17,206 Share-based compensation 12,476 8,256 21,084 14,679 Depreciation and amortization 155,174 162,417 317,439 321,436 Development costs 6,372 3,920 19,802 9,440 Pre-opening costs 226 603 621 4,113 Land rent to Belle Corporation 785 762 1,562 1,518 Payments to the Philippine Parties (2,771 ) 23,203 4,935 37,255 Adjusted EBITDA (179,636 ) 416,898 (124,709 ) 804,682 Corporate and Other expenses 23,376 31,082 43,760 56,845 Adjusted Property EBITDA $ (156,260 ) $ 447,980 $ (80,949 ) $ 861,527
Melco Resorts & Entertainment Limited and Subsidiaries Supplemental Data Schedule Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Room Statistics (4) : Altira Macau Average daily rate (5) $ 165 $ 177 $ 176 $ 178 Occupancy per available room 21 % 99 % 39 % 99 % Revenue per available room (6) $ 35 $ 176 $ 69 $ 177 City of Dreams Average daily rate (5) $ 279 $ 206 $ 236 $ 206 Occupancy per available room 6 % 98 % 28 % 98 % Revenue per available room (6) $ 18 $ 202 $ 66 $ 201 Studio City Average daily rate (5) $ 160 $ 132 $ 139 $ 133 Occupancy per available room 5 % 100 % 24 % 100 % Revenue per available room (6) $ 8 $ 132 $ 34 $ 133 City of Dreams Manila Average daily rate (5) $ 314 $ 182 $ 204 $ 173 Occupancy per available room 26 % 98 % 85 % 98 % Revenue per available room (6) $ 81 $ 178 $ 174 $ 170 Other Information (7) : Altira Macau Average number of table games 101 104 94 104 Average number of gaming machines 91 171 114 170 Table games win per unit per day (8) $ 2,654 $ 17,125 $ 6,881 $ 20,209 Gaming machines win per unit per day (9) $ 186 $ 235 $ 133 $ 220 City of Dreams Average number of table games 515 518 475 518 Average number of gaming machines 398 823 473 822 Table games win per unit per day (8) $ 2,936 $ 19,184 $ 8,594 $ 17,812 Gaming machines win per unit per day (9) $ 40 $ 528 $ 268 $ 528 Studio City Average number of table games 291 293 273 293 Average number of gaming machines 419 985 570 980 Table games win per unit per day (8) $ 183 $ 12,812 $ 3,086 $ 12,660 Gaming machines win per unit per day (9) $ 48 $ 225 $ 124 $ 218 City of Dreams Manila Average number of table games 301 306 299 304 Average number of gaming machines 2,273 2,271 2,289 2,256 Table games win per unit per day (8) $ 1,506 $ 5,672 $ 3,795 $ 5,218 Gaming machines win per unit per day (9) $ 59 $ 248 $ 183 $ 255 Cyprus Operations Average number of table games 25 38 35 38 Average number of gaming machines 281 357 419 264 Table games win per unit per day (8) $ 1,008 $ 2,136 $ 1,800 $ 2,211 Gaming machines win per unit per day (9) $ 594 $ 451 $ 423 $ 441
(4) Room statistics exclude rooms that were temporarily closed or provided to staff members during the three and six months ended June 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 six months ended June 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
