Melco Announces Unaudited Fourth Quarter 2017 Earnings and a 50% Increase in Quarterly Dividend to US$0.135 per ADS

|GlobeNewswire|About: MLCO

MACAU, Feb. 08, 2018 (GLOBE NEWSWIRE) -- 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(1) 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 “NÜWA” 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 (NASDAQ: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 (TSRMF) 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
Dreams
Manila
  Corporate
and Others
  Total
  (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
Dreams
Manila
  Corporate
and Others
  Total
  (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
Dreams
Manila
  Corporate
and Others
  Total
  (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
Dreams
Manila
  Corporate
and Others
  Total
  (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 (3)     $ 209     $ 210     $ 204     $ 205  
                         
    Occupancy per available room       99 %     94 %     96 %     94 %
                         
    Revenue per available room (4)     $ 207     $ 197     $ 196     $ 193  
                         
  City of Dreams                    
                         
    Average daily rate (3)     $ 209     $ 205     $ 202     $ 200  
                                                                             
    Occupancy per available room       97 %     98 %     97 %     96 %
                         
    Revenue per available room (4)     $ 202     $ 199     $ 196     $ 192  
                         
                         
  Studio City                    
                         
    Average daily rate (3)     $ 145     $ 138     $ 140     $ 136  
                         
    Occupancy per available room       99 %     99 %     99 %     98 %
                         
    Revenue per available room (4)     $ 144     $ 137     $ 138     $ 133  
                         
                         
  City of Dreams Manila                  
                         
    Average daily rate (3)     $ 163     $ 156     $ 158     $ 159  
                         
    Occupancy per available room       97 %     96 %     96 %     91 %
                         
    Revenue per available room (4)     $ 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 (5)   $ 19,358     $ 13,447     $ 15,478     $ 13,448  
                         
    Gaming machines win per unit per day (6)   $ 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 (5)   $ 15,013     $ 15,319     $ 16,408     $ 15,027  
                         
    Gaming machines win per unit per day (6)   $ 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 (5)   $ 14,123     $ 8,282     $ 12,932     $ 6,871  
                         
    Gaming machines win per unit per day (6)   $ 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)   $ 5,473     $ 4,576     $ 5,432     $ 3,939  
                         
    Gaming machines win per unit per day (6)   $ 265     $ 255     $ 271     $ 217  
                         
                         
    (3) Average daily rate is calculated by dividing total room revenue including the retail value of promotional allowances by total occupied rooms including complimentary rooms
    (4) Revenue per available room is calculated by dividing total room revenue including the retail value of promotional allowances by total rooms available
    (5) Table games win per unit per day is shown before discounts and commissions
    (6) Gaming machines win per unit per day is shown before deducting cost for slot points

 

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Source: Melco Resorts & Entertainment Limited 2018 GlobeNewswire, Inc.