UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as Amended
Date of Report (Date of earliest event reported): April 24, 2017
WYNN RESORTS, LIMITED
(Exact name of registrant as specified in its charter)
Nevada | 000-50028 | 46-0484987 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
3131 Las Vegas Boulevard South Las Vegas, Nevada | 89109 | |
(Address of principal executive offices) | (Zip Code) | |
(702) 770-7555
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 7.01. | Regulation FD Disclosure. |
On April 24, 2017, Wynn Macau, Limited (“WML”), an indirect subsidiary of Wynn Resorts, Limited (the “Registrant”) with ordinary shares of its common stock listed on The Stock Exchange of Hong Kong Limited, filed its annual report in respect of the year ended December 31, 2016 (the “Annual Report”) with The Stock Exchange of Hong Kong Limited. The Registrant owns approximately 72% of WML’s ordinary shares of common stock. The Annual Report is furnished herewith as Exhibit 99.1. The information in this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. | Description |
99.1 | Annual Report of Wynn Macau, Limited in respect of the year ended December 31, 2016. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
WYNN RESORTS, LIMITED | ||||||
Date: April 24, 2017 | By: | /s/ Craig S. Billings | ||||
Name: | Craig S. Billings | |||||
Title: | Chief Financial Officer and Treasurer | |||||
(Principal Financial and Accounting Officer) | ||||||
EXHIBIT INDEX
Exhibit No. | Description |
99.1 | Annual Report of Wynn Macau, Limited in respect of the year ended December 31, 2016. |
201
6
Annual Repor
t
年度報告
2016 Annual Report 年度報告
2 Corporate Information
4 Highlights
5 Management Discussion and Analysis
32 Directors and Senior Management
47 Environmental, Social and
Governance Report
60 Report of the Directors
93 Corporate Governance Report
108 Independent Auditor’s Report
118 Financial Statements
207 Financial Summary
208 Definitions
215 Glossary
Contents
2 Wynn Macau, Limited
Corporate Information
BOARD OF DIRECTORS
Executive Directors
Mr. Stephen A. Wynn (Chairman of the Board)
Ms. Linda Chen
Mr. Ian Michael Coughlan
Non-Executive Directors
Mr. Matthew O. Maddox
Ms. Kim Sinatra (appointed on 1 April 2017)
Independent Non-Executive Directors
Dr. Allan Zeman, GBM, GBS, JP
(Vice-chairman of the Board)
Mr. Jeffrey Kin-fung Lam, GBS, JP
Mr. Bruce Rockowitz
Mr. Nicholas Sallnow-Smith
AUDIT AND RISK COMMITTEE
Mr. Nicholas Sallnow-Smith (Chairman)
Mr. Bruce Rockowitz
Dr. Allan Zeman, GBM, GBS, JP
REMUNERATION COMMITTEE
Mr. Nicholas Sallnow-Smith (Chairman)
Mr. Jeffrey Kin-fung Lam, GBS, JP
Mr. Matthew O. Maddox
Mr. Bruce Rockowitz
NOMINATION AND CORPORATE
GOVERNANCE COMMITTEE
Mr. Jeffrey Kin-fung Lam, GBS, JP (Chairman)
Mr. Nicholas Sallnow-Smith
Dr. Allan Zeman, GBM, GBS, JP
COMPANY SECRETARY
Ms. Ho Wing Tsz Wendy, FCIS, FCS
AUTHORIZED REPRESENTATIVES
Dr. Allan Zeman, GBM, GBS, JP
Ms. Ho Wing Tsz Wendy, FCIS, FCS
(Mrs. Seng Sze Ka Mee, Natalia as alternate)
AUDITOR
Ernst & Young
Certified Public Accountants
LEGAL ADVISORS
As to Hong Kong and U.S. laws:
Skadden, Arps, Slate, Meagher & Flom
As to Hong Kong law:
Mayer Brown JSM
As to Macau law:
Alexandre Correia da Silva
As to Cayman Islands law:
Maples and Calder
3Annual Report 2016
Corporate Information
REGISTERED OFFICE
P.O. Box 309
Ugland House
Grand Cayman
KY1-1104
Cayman Islands
HEADQUARTERS IN MACAU
Rua Cidade de Sintra
NAPE, Macau SAR
PRINCIPAL PLACE OF BUSINESS IN
HONG KONG
Level 54, Hopewell Centre
183 Queen’s Road East
Hong Kong
PRINCIPAL SHARE REGISTRAR AND
TRANSFER OFFICE
Estera Trust (Cayman) Limited
(formerly named “Appleby Trust (Cayman)
Limited”)
HONG KONG SHARE REGISTRAR
Computershare Hong Kong Investor
Services Limited
STOCK CODE
1128
COMPANY WEBSITE
www.wynnmacaulimited.com
4 Wynn Macau, Limited
Highlights
FINANCIAL HIGHLIGHTS
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands,
except per share amounts
or otherwise stated)
Casino revenues 20,552,497 17,887,237
Other revenues 1,546,981 1,209,128
Adjusted EBITDA 5,105,424 4,681,249
Profit attributable to owners 1,435,532 2,410,398
Earnings per Share – basic and diluted (HK$) 0.28 0.46
KEY SHAREHOLDER DATES FOR 2017
Annual general meeting June 2017
Release of announcement of interim results in respect of
the six months ending 30 June 2017
August 2017
Release of interim report in respect of the six months ending 30 June 2017 September 2017
5Annual Report 2016
Management Discussion and Analysis
OVERVIEW
We are a developer, owner and operator of two integrated destination casino resorts in Macau,
Wynn Macau and Wynn Palace.
On 12 August 2016, WRM received notification from The Gaming Inspection and Coordination
Bureau of Macau (“DICJ”) that Wynn Palace was approved to commence operations on 22 August
2016. DICJ authorized 100 new table games for operation at Wynn Palace effective 22 August 2016,
25 new table games for operation effective 1 January 2017 and 25 new table games for operation
effective 1 January 2018 for a total of 150 new table games in the aggregate. DICJ also approved
1,145 slot machines for operation at Wynn Palace effective 22 August 2016. We have transferred
and we will continue to transfer table games between Wynn Macau and Wynn Palace to optimize our
casino operations.
Our aim is to operate appropriately scaled integrated resorts that attract a wide range of customer
segments and generate strong financial results. To attract and retain our customers, we design
and continually make enhancements and refinements to refresh and improve our resorts and to
create unique customer experiences across a wide range of gaming and non-gaming amenities.
Our emphasis on human resources and staff training underscores our commitment to providing
our customers with superior levels of luxury service and guest experience. We also leverage Wynn
International Marketing, Ltd.’s international branch offices located in Macau, Hong Kong, Singapore,
Taiwan, Japan and the United States to attract international customers.
Wynn Macau
Wynn Macau opened to the public on 6 September 2006 at the center of casino activities on the
urban Macau peninsula. We completed expansion works at Wynn Macau in December 2007 and
November 2009, adding more gaming space and additional food and beverage and retail amenities.
Encore at Wynn Macau, a further expansion of Wynn Macau that added hotel accommodations and a
range of gaming and non-gaming amenities, opened in April 2010.
Wynn Macau features:
• Approximately 284,000 square feet of casino space, offering 24-hour gaming and a full range of
games, including private gaming salons, sky casinos and a poker pit;
• Two luxury hotel towers with a total of 1,008 spacious rooms and suites;
6 Wynn Macau, Limited
Management Discussion and Analysis
• Casual and fine dining in eight restaurants;
• Approximately 57,000 square feet of high-end, brand-name retail shopping;
• Recreation and leisure facilities, including two health clubs and spas, a salon and a pool;
• A rotunda show featuring a Chinese zodiac-inspired ceiling along with gold “prosperity tree”
and a “dragon of fortune” attractions; and
• Approximately 31,000 square feet of meeting and convention space.
The following table presents the number of casino games available at Wynn Macau, excluding 20
tables that were in the process of transfer from Wynn Palace as at 31 December 2016:
As at 31 December
2016 2015
VIP table games 82 190
Mass market table games 190 246
Slot machines 804 794
Poker tables 13 13
Wynn Palace
On 22 August 2016, we opened Wynn Palace in the thriving Cotai area of Macau.
On 28 October 2016, the Company and Leighton Contractors (Asia) Limited (“LCAL”), the general
contractor for the construction of Wynn Palace, reached final agreement to resolve certain
differences in relation to the construction of Wynn Palace. Among other things, the Company
agreed to an increase of the guaranteed maximum price (“GMP”) under the GMP contract to
HK$23.1 billion and LCAL agreed to complete all outstanding work necessary to achieve final
completion and use the additional payments due from the Company to discharge its liabilities to its
sub-contractors, suppliers and vendors. The Company’s right to make warranty claims in the future is
unaffected by the agreement. Accordingly, we had invested approximately HK$34.4 billion to open
up Wynn Palace.
7Annual Report 2016
Management Discussion and Analysis
Wynn Palace features:
• Approximately 420,000 square feet of casino space, offering 24-hour gaming and a full range of
games, including private gaming salons, sky casinos and a poker pit;
• A luxury hotel with a total of 1,706 spacious rooms, suites and villas;
• Casual and fine dining in ten food and beverage outlets;
• Approximately 105,000 square feet of high-end, brand-name retail shopping;
• Recreation and leisure facilities, including a cable car (“Sky Cab”) ride, health club, spa, salon
and pool;
• Approximately 40,000 square feet of meeting and convention space; and
• Public attractions including an 8-acre performance lake and floral art displays.
The following table presents the number of casino games available at Wynn Palace, excluding 20
tables that were in the process of transfer to Wynn Macau as at 31 December 2016:
As at 31 December
2016 2015
VIP table games 88 –
Mass market table games 202 –
Slot machines 906 –
Poker tables 6 –
8 Wynn Macau, Limited
Management Discussion and Analysis
FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Macau
Macau, which was a territory under Portuguese administration for approximately 450 years, was
transferred from Portuguese to Chinese political control in December 1999. Macau is governed
as a special administrative region of China and is located approximately 37 miles southwest of,
and approximately one hour away via ferry from, Hong Kong. Macau, which has been a casino
destination for more than 50 years, consists principally of a peninsula on mainland China, and two
neighboring islands, Taipa and Coloane, between which the Cotai area is located. We believe that
Macau is located in one of the world’s largest concentrations of potential gaming customers. Since
the introduction of new casinos starting in 2004, the Macau market has experienced a significant
increase in annual gaming revenue from the HK$21.5 billion generated in 2002. According to Macau
statistical information, casinos in Macau generated approximately HK$216.7 billion in gaming
revenue during the year ended 31 December 2016, making Macau the largest gaming market in the
world despite a decline in gaming revenue since 2014, including a year-over-year decline of 3.3%
during 2016 as compared to 2015.
Tourism
The levels of tourism and overall gaming activities in Macau are key drivers of our business. Both
the Macau gaming market and visitation to Macau grew significantly until 2014. However, beginning
in 2014, the Macau gaming market experienced its first year-over-year decline in annual gaming
revenues since liberalization in 2002. Commencing from the fourth quarter of 2014, tourist arrivals
to Macau also experienced a downward trend. However, statistics for 2016 reflect a slight year-over-
year increase of 0.8% with 31.0 million tourist arrivals to Macau. A decline in gaming activities by
tourists has contributed to the further reduction in gaming revenues in Macau during 2016, despite
the slight increase in tourist arrivals to Macau.
The Macau market has experienced tremendous growth in capacity since the opening of Wynn
Macau in 2006. As at 31 December 2016, there were 36,300 hotel rooms, 6,287 table games and
13,826 slots in Macau, compared to 12,978 hotel rooms, 2,762 table games and 6,546 slots as at 31
December 2006.
Gaming customers traveling to Macau typically come from nearby destinations in Asia, including
mainland China, Hong Kong, Taiwan, South Korea and Japan. According to the Macau Statistics and
Census Service Monthly Bulletin of Statistics, approximately 90.3% of visitors to Macau for the year
ended 31 December 2016 were from mainland China, Hong Kong and Taiwan.
9Annual Report 2016
Management Discussion and Analysis
Tourism levels in Macau are affected by a number of factors, all of which are beyond our control. Key
factors affecting tourism levels in Macau may include, among others:
• Prevailing economic conditions in mainland China and Asia;
• Restrictions, conditions or other factors which affect visitation by citizens of mainland China to
Macau;
• Various countries’ policies on currency exchange controls and currency export restrictions, for
example on the Renminbi, the currency of the PRC, and the issuance of travel visas that may be
in place from time to time;
• Competition from other destinations which offer gaming and/or leisure activities;
• Occurrence of natural disasters and disruption of travel; and
• Possible outbreaks of infectious disease.
Economic and Operating Environment
A significant number of our gaming customers come from mainland China. Economic disruption,
contraction or uncertainty in China impacts the number of patrons visiting our properties or the
amount they may be willing to spend. In addition, policies adopted from time to time by the
Chinese government, including any travel restrictions imposed by China on its citizens, such as
restrictions imposed on exit visas granted to residents of mainland China for travel to Macau,
could disrupt the number of visitors from mainland China to our resorts. It is not known when, or if,
policies restricting visitation by mainland Chinese citizens to Macau and Hong Kong will be put in
place and travel policies may be adjusted, without notice, in the future. Furthermore, the Chinese
government’s ongoing anti-corruption campaign has influenced the behavior of Chinese consumers
and their spending patterns both domestically and abroad. The campaign has specifically led to
tighter monetary transfer regulations, including real time monitoring of certain financial channels and
limitations on cash withdrawals from ATM machines, which has affected and may continue to impact
the number of visitors and the amount of money they bring from mainland China to Macau. The
overall effect of the campaign and monetary transfer restrictions may continue to negatively affect
our revenues and results of operations.
10 Wynn Macau, Limited
Management Discussion and Analysis
Competition
Since the liberalization of Macau’s gaming industry in 2002, there has been a significant increase in
the number of casino properties in Macau. There are six gaming operators in Macau, including WRM.
The three concessionaires are WRM, SJM, and Galaxy. The three subconcessionaires are Melco
Crown, MGM Macau, and Venetian Macau. As at 31 December 2016, there were approximately 38
casinos in Macau, including 20 operated by SJM. Each of the current six operators has operating
casinos and several have expansion plans underway. The Macau government has had the ability
to grant additional gaming concessions since April 2009. If the Macau government were to
allow additional competitors to operate in Macau through the grant of additional concessions or
subconcessions, we would face additional competition, which could have a material adverse effect
on our business, financial condition, results of operations and cash flows. During 2016, several
new resorts have opened in the Cotai area of Macau, including Wynn Palace. Several more resorts
from our competitors are expected to open in 2017 and 2018. These Cotai facilities are expected
to increase total hotel room inventory by approximately 12.3% from the current inventory and
significantly increase other gaming and non-gaming offerings in Macau.
Wynn Macau and Wynn Palace also face competition from casinos located in Singapore, the
Philippines and Malaysia. Our resorts also encounter competition from other major gaming centers
located around the world, including Australia and Las Vegas, cruise ships in Asia that offer gaming
and other casinos throughout Asia. Further, if current efforts to legalize gaming in other Asian
countries, such as Japan, are successful, our resorts will face additional regional competition.
Gaming Promoters
A significant amount of our casino play is brought to us by gaming promoters. Gaming promoters
have historically played a critical role in the Macau gaming market and are important to our casino
business.
11Annual Report 2016
Management Discussion and Analysis
Gaming promoters introduce premium VIP players to Wynn Macau and Wynn Palace and often assist
those players with their travel and entertainment arrangements. In addition, gaming promoters
often grant credit to their players. In exchange for their services, Wynn Macau and Wynn Palace
pay the gaming promoters a commission which is a percentage of the gross gaming win generated
by each gaming promoter. Approximately 80% of these commissions are netted against casino
revenues, because such commissions approximate the amount of the commission returned to the
VIP players by the gaming promoters, and approximately 20% of these commissions are included
in other operating expenses, which approximate the amount of the commission ultimately retained
by the gaming promoters as compensation. The total amount of commissions paid to gaming
promoters and netted against casino revenues was HK$4.1 billion and HK$3.5 billion for the years
ended 31 December 2016 and 2015, respectively. Commissions increased 16.3% for the year ended
31 December 2016 compared to the year ended 31 December 2015 as VIP gross table games win
increased primarily due to the opening of Wynn Palace.
We typically advance commissions to certain selected gaming promoters with strong operational
performance history at the beginning of each month to facilitate their working capital requirements.
These advances are provided to a gaming promoter and are offset by the commissions earned
by such gaming promoter during the applicable month. The aggregate amounts of exposure to
our gaming promoters, which is the difference between commissions advanced to each individual
gaming promoter, and the commissions payable to each such gaming promoter, declined
substantially in part due to our tightening of advance policies and in part due to reduced business
volumes to HK$37.0 million as at 31 December 2016 from HK$91.0 million as at 31 December 2015.
At the end of each month, any commissions outstanding are cleared no later than the fifth business
day of the succeeding month and prior to the advancement of any further funds to a gaming
promoter. We believe we have developed strong relationships with our gaming promoters. Our
commission percentages have remained stable throughout our operating history.
In addition to commissions, gaming promoters each receive a monthly complimentary allowance
based on a percentage of the turnover its clients generate. The allowance is available for room, food
and beverage and other products and services for discretionary use with the gaming promoter’s
clients.
12 Wynn Macau, Limited
Management Discussion and Analysis
Given present market conditions in Macau and certain economic and other factors, including the
Chinese government’s ongoing anti-corruption campaign, gaming promoters continue to experience
certain difficulties in their Macau operations, including intensified competition in attracting patrons
to come to Macau. Gaming promoters continue to face a decrease in liquidity, limiting their ability
to grant credit to their patrons, and difficulties in collecting credit they extended previously. Given
these operational challenges, certain gaming promoters have expanded, or have plans to expand,
their operations to other jurisdictions in the region in order to diversify their revenue stream. Some
gaming promoters have ceased operations in Macau.
Premium Credit Play
We selectively extend credit to our VIP players contingent upon our marketing team’s knowledge of
the players, their financial background and payment history. We follow a series of credit procedures
and require various signed documents from each credit recipient that are intended to ensure
that, among other things, if permitted by applicable law, the debt can be legally enforced in the
jurisdiction where the player resides. In the event the player does not reside in a jurisdiction where
gaming debts are legally enforceable, we can attempt to assert jurisdiction over assets the player
maintains in jurisdictions where gaming debts are recognized. In addition, we typically require a
check in the amount of the applicable credit line from credit players, collateralizing the credit we
grant.
Number and Mix of Table Games and Slot Machines
The mix of VIP table games, mass table games and slot machines in operation at our resorts changes
from time to time as a result of marketing and operating strategies in response to changing market
demand and industry competition. The shift in the mix of our games will affect casino profitability.
ADJUSTED EBITDA
Adjusted EBITDA is earnings before finance costs, finance revenues, net foreign currency differences,
change in fair value of interest rate swaps, taxes, depreciation and amortization, pre-opening costs,
property charges and other, share-based payments, Wynn Macau, Limited corporate expenses,
and other non-operating income and expenses. Adjusted EBITDA is presented exclusively as
a supplemental disclosure because our Directors believe that it is widely used to measure the
performance, and as a basis for valuation, of gaming companies. Our Adjusted EBITDA presented
herein also differs from the Adjusted Property EBITDA presented by Wynn Resorts, Limited for its
Macau segment in its filings with the SEC, primarily due to the inclusion of license fees, adjustments
for IFRS differences with U.S. GAAP, corporate support and other support services in arriving at
operating profit.
13Annual Report 2016
Management Discussion and Analysis
The following table sets forth a quantitative reconciliation of Adjusted EBITDA to its most directly
comparable IFRS measurement and operating profit.
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Operating profit 2,264,532 3,032,059
Add
Depreciation and amortization 1,591,397 1,000,373
Pre-opening costs 1,003,521 425,223
Property charges and other 24,814 11,599
Share-based payments 117,894 128,031
Wynn Macau, Limited corporate expenses 103,266 83,964
Adjusted EBITDA 5,105,424 4,681,249
14 Wynn Macau, Limited
Management Discussion and Analysis
REVIEW OF HISTORICAL OPERATING RESULTS
Summary Breakdown Table
The following table presents certain selected consolidated statement of profit or loss and other
comprehensive income line items and certain other data.
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands,
except for averages,
daily win figures and number
of tables and slot machines)
Wynn Macau:
Casino revenues(1) 16,525,870 17,887,237
Rooms(2) 123,919 122,790
Food and beverage(2) 210,194 221,872
Retail and other(2) 711,513 864,466
Wynn Palace(5):
Casino revenues(1) 4,026,627 –
Rooms(2) 122,639 –
Food and beverage(2) 119,518 –
Retail and other(2) 259,198 –
Total operating revenues 22,099,478 19,096,365
15Annual Report 2016
Management Discussion and Analysis
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands,
except for averages,
daily win figures and number
of tables and slot machines)
Wynn Macau:
VIP table games turnover 365,211,608 449,024,510
VIP gross table games win(1) 12,010,418 12,867,822
VIP gross table games win as a percentage of turnover
(calculated before commission) 3.3% 2.9%
Mass market table drop 35,591,412 37,661,198
Mass market gross table games win(1) 6,810,648 7,345,574
Mass market gross table games win percentage 19.1% 19.5%
Slot machine handle 26,293,116 30,708,952
Slot machine win(1) 1,116,655 1,468,038
Average number of gaming tables(3) 366 458
Daily gross win per gaming table(4) 140,633 120,951
Average number of slots(3) 802 708
Average daily win per slot(4) 3,806 5,680
Wynn Palace(5):
VIP table games turnover 112,318,663 –
VIP gross table games win(1) 3,079,131 –
VIP gross table games win as a percentage of turnover
(calculated before commission) 2.7% –
16 Wynn Macau, Limited
Management Discussion and Analysis
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands,
except for averages,
daily win figures and number
of tables and slot machines)
Mass market table drop 7,763,673 —
Mass market gross table games win(1) 1,633,411 —
Mass market gross table games win percentage 21.0% —
Slot machine handle 5,731,600 —
Slot machine win(1) 313,851 —
Average number of gaming tables(3) 326 —
Daily gross win per gaming table(4) 109,396 —
Average number of slots(3) 962 —
Average daily win per slot(4) 2,473 —
Notes:
(1) Total casino revenues do not equal the sum of “VIP gross table games win”, “mass market gross table games
win” and “slot machine win” because casino revenues are reported net of the relevant commissions. The
following table presents a reconciliation of the sum of “VIP gross table games win”, “mass market gross table
games win” and “slot machine win” to total casino revenues.
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
VIP gross table games win 15,089,549 12,867,822
Mass market gross table games win 8,444,059 7,345,574
Slot machine win 1,430,506 1,468,038
Poker revenues 146,669 161,510
Commissions (4,558,286) (3,955,707)
Total casino revenues 20,552,497 17,887,237
17Annual Report 2016
Management Discussion and Analysis
(2) Promotional allowances are excluded from revenues in the accompanying consolidated statement of profit or
loss and other comprehensive income prepared in accordance with IFRS. Management also evaluates non-casino
revenues on an adjusted basis.
The following table presents a reconciliation of net non-casino revenues as reported in our consolidated
statement of profit or loss and other comprehensive income to gross non-casino revenues calculated on the
adjusted basis. The adjusted non-casino revenues as presented below are used for management reporting
purposes and are not representative of revenues as determined under IAS 18.
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Room revenues 246,558 122,790
Promotional allowances 1,046,785 848,987
Adjusted room revenues 1,293,343 971,777
Food and beverage revenues 329,712 221,872
Promotional allowances 394,199 374,255
Adjusted food and beverage revenues 723,911 596,127
Retail and other revenues 970,711 864,466
Promotional allowances 62,831 42,553
Adjusted retail and other revenues 1,033,542 907,019
(3) For purposes of this table, we calculate average number of gaming tables and average number of slots as the
average numbers of gaming tables and slot machines in service on each day in the year.
(4) Daily gross win per gaming table and daily win per slot are presented in this table on the basis of the average
number of gaming tables and average number of slots, respectively, over the number of days Wynn Macau,
Encore and Wynn Palace were open in the applicable year. In addition, the total table games win figures
used herein do not correspond to casino revenues figures in our financial statements, because figures in our
financial statements are calculated net of commissions and the total table games win herein is calculated before
commissions.
(5) Wynn Palace opened on 22 August 2016.
18 Wynn Macau, Limited
Management Discussion and Analysis
Discussion of Results of Operations
Financial results for the year ended 31 December 2016 compared to financial results for the year
ended 31 December 2015
Operating Revenues
Total operating revenues increased by 15.7% from HK$19.1 billion in 2015 to HK$22.1 billion in
2016. This increase was primarily due to the new operations associated with the opening of Wynn
Palace and partially offset by a decrease of 8.0% from Wynn Macau driven by a continued reduction
in business volumes at Wynn Macau during 2016 compared to 2015. The decrease was as a result of
the continued impact from the current economic and political conditions in Macau and China, as well
as competition from recent resort openings in the Cotai area of Macau, including Wynn Palace.
Casino Revenues
Casino revenues increased by 14.9%, from HK$17.9 billion (93.7% of total operating revenues) in
2015 to HK$20.6 billion (93.0% of total operating revenues) in 2016. The components and reasons
are as follows:
VIP casino gaming operations. VIP gross table games win increased by 17.3%, from HK$12.9 billion
in 2015 to HK$15.1 billion in 2016. The increase is due to VIP gross table games win of HK$3.1
billion from Wynn Palace, partially offset by a HK$0.9 billion decrease from Wynn Macau. The decline
in Wynn Macau VIP gross table games win was primarily driven by a decrease in business volumes,
with VIP table games turnover down 18.7%, partially offset by an increase of Wynn Macau VIP gross
table games win as a percentage of turnover (calculated before commissions) from 2.9% in 2015
to 3.3% in 2016, which was above our expected range of 2.7% to 3.0%. VIP table games turnover
increased by 6.3%, from HK$449.0 billion in 2015 to HK$477.5 billion in 2016. The increase is due to
VIP table games turnover of HK$112.3 billion from Wynn Palace, partially offset by a HK$83.8 billion
decrease from Wynn Macau. Wynn Palace VIP gross table games win as a percentage of turnover
(calculated before commissions) was 2.7% in 2016, which was within our expected range of 2.7% to
3.0%.
Mass market casino gaming operations. Mass market gross table games win increased by 15.0%,
from HK$7.3 billion in 2015 to HK$8.4 billion in 2016. The increase is due to mass market gross
table win of HK$1.6 billion from Wynn Palace, partially offset by a HK$0.5 billion decrease at Wynn
Macau. The decline in Wynn Macau mass market gross table win was driven by a decrease in mass
market table drop from HK$37.7 billion in 2015 to HK$35.6 billion in 2016 and a decrease in the
mass market gross table games win percentage from 19.5% in 2015 to 19.1% in 2016. Wynn Palace
mass market table drop was HK$7.8 billion and its mass market gross table games win percentage
was 21.0% in 2016.
19Annual Report 2016
Management Discussion and Analysis
Slot machine gaming operations. Slot machine win remained essentially flat from HK$1.5 billion
in 2015 to HK$1.4 billion in 2016 as Wynn Palace slot machine win of HK$0.3 billion was offset by
a HK$0.4 billion decrease at Wynn Macau. Wynn Macau slot machine handle decreased by 14.4%,
from HK$30.7 billion in 2015 to HK$26.3 billion in 2016. Slot machine win per unit per day of Wynn
Macau decreased by 33.0% from HK$5,680 in 2015 to HK$3,806 in 2016. Slot machine win, slot
machine handle and slot machine win per unit per day of Wynn Macau decreased primarily due to
decreased business volumes. Wynn Palace slot machine handle was HK$5.7 billion and slot machine
win per unit per day was HK$2,473 in 2016.
Non-casino Revenues
Net non-casino revenues, which include room, food and beverage and retail and other revenues,
increased by 27.9% from HK$1.2 billion (6.3% of total operating revenues) in 2015 to HK$1.5 billion
(7.0% of total operating revenues) in 2016. The increase in non-casino revenues was largely due to
the opening of Wynn Palace on 22 August 2016.
Rooms. Our room revenues, which exclude promotional allowances in our consolidated statement
of profit or loss and other comprehensive income, increased by 100.8% from HK$122.8 million in
2015 to HK$246.6 million in 2016, primarily attributable to HK$122.6 million in room revenue at
Wynn Palace.
Management also evaluates room revenues on an adjusted basis which include promotional
allowances. Adjusted room revenues including promotional allowances increased by 33.1% from
HK$971.8 million in 2015 to HK$1.3 billion in 2016.
20 Wynn Macau, Limited
Management Discussion and Analysis
The following table presents additional information about our adjusted room revenues for Wynn
Macau and Wynn Palace (which include promotional allowances):
Adjusted room revenues information
For the year ended
31 December
2016 2015
Wynn Macau:
Adjusted Average Daily Rate (includes promotional allowances
of HK$1,957 in 2016 and HK$2,193 in 2015) HK$2,277 HK$2,503
Occupancy 94.4% 96.5%
Adjusted REVPAR (includes promotional allowances
of HK$1,848 in 2016 and HK$2,117 in 2015) HK$2,150 HK$2,416
Wynn Palace#:
Adjusted Average Daily Rate (includes promotional
allowances of HK$1,522 in 2016 and nil in 2015) HK$2,139 –
Occupancy 83.2% –
Adjusted REVPAR (includes promotional allowances
of HK$1,267 in 2016 and nil in 2015) HK$1,780 –
# Wynn Palace opened on 22 August 2016.
Food and beverage. Food and beverage revenues, which exclude promotional allowances in our
consolidated statement of profit or loss and other comprehensive income, increased by 48.6% from
HK$221.9 million in 2015 to HK$329.7 million in 2016, primarily due to HK$119.5 million generated
at Wynn Palace, partially offset by a decrease of HK$11.7 million at Wynn Macau.
Management also evaluates food and beverage revenues on an adjusted basis including promotional
allowances. Food and beverage revenues adjusted to include these promotional allowances
increased by 21.4% from HK$596.1 million in 2015 to HK$723.9 million in 2016.
21Annual Report 2016
Management Discussion and Analysis
Retail and other. Our retail and other revenues, which exclude promotional allowances in our
consolidated statement of profit or loss and other comprehensive income increased by 12.3% from
HK$864.5 million in 2015 to HK$970.7 million in 2016. The increase was primarily due to HK$259.2
million in revenue at Wynn Palace, partially offset by a HK$153.0 million decrease at Wynn Macau.
Management also evaluates retail and other revenues on an adjusted basis which includes
promotional allowances. Adjusted retail and other revenues including promotional allowances
increased by 13.9% from HK$907.0 million in 2015 to HK$1.0 billion in 2016.
Operating Costs and Expenses
Gaming taxes and premiums. Gaming taxes and premiums increased by 15.1%, from HK$8.7 billion
for the year ended 31 December 2015 to HK$10.0 billion for the same period of 2016. This increase
from 2015 to 2016 was due primarily to gross gaming win generated after the opening of Wynn
Palace. The increase was commensurate with 14.9% increase in casino revenues. WRM is subject to
a 35% gaming tax on gross gaming win. In addition, WRM is also required to pay 4% of its gross
gaming win as contributions for public development and social facilities.
Staff costs. Staff costs increased by 26.5%, from HK$3.1 billion for the year ended 31 December
2015 to HK$3.9 billion for the same period of 2016. The increase was due to increased headcount for
the pre-opening and operation of Wynn Palace.
Other operating expenses. Other operating expenses increased by 31.8%, from HK$3.2 billion
for the year ended 31 December 2015 to HK$4.3 billion for the same period of 2016, driven mainly
by increase in business volume related expenses such as gaming promoters’ commissions, license
fees, advertising and promotion expenditures, cost of sales and other expenses, all primarily due to
the opening of Wynn Palace. The increase of business volume related expenses was partially offset
by a HK$54.9 million decrease of provision for doubtful accounts. The change in the provision was
primarily due to increased collections of casino accounts receivable at Wynn Macau.
Depreciation and amortization. Depreciation and amortization increased from HK$1.0 billion for
the year ended 31 December 2015 to HK$1.6 billion for the same period of 2016. The increase
was attributable to a HK$705.7 million increase at Wynn Palace, primarily from the opening and
associated buildings and improvements and furniture, fixtures and equipment placed in service,
partially offset by a decrease of HK$114.4 million at Wynn Macau. The majority of the Wynn Macau
decrease was due to a change in estimated useful lives of buildings and improvements, which was
effective 1 September 2015, to more accurately reflect the estimated periods during which these
assets are expected to remain in service.
22 Wynn Macau, Limited
Management Discussion and Analysis
Property charges and other. Property charges and other increased from HK$11.6 million for the
year ended 31 December 2015 to HK$24.8 million for the same period of 2016. Amounts in each
period represent the gain/loss on the sale of equipment and other assets as well as costs related to
assets retired or abandoned as a result of renovating certain assets of the Company in response to
customer preferences and changes in market demand.
As a result of the foregoing, total operating costs and expenses increased by 23.5%, from HK$16.1
billion in 2015 to HK$19.8 billion in 2016.
Finance Revenues
Finance revenues decreased from HK$31.2 million in 2015 to HK$24.2 million in 2016. The decrease
was primarily due to holding lower average cash balances in 2016 compared to 2015. During 2016
and 2015, our short-term investment strategy has been to preserve capital while retaining sufficient
liquidity. The majority of our short-term investments were primarily in time deposits and fixed
deposits with a maturity of three months or less.
Finance Costs
Finance costs increased by 40.7% from HK$595.6 million in 2015 to HK$838.1 million in 2016. The
increase is due to an increase in amounts outstanding under the Wynn Macau Credit Facilities and
was partially offset by the increase in capitalized interest related to the construction of Wynn Palace.
Interest Rate Swaps
As required under the terms of the Wynn Macau Credit Facilities, we have entered into agreements
which swap a portion of the interest on our loans from floating to fixed rates. These transactions do
not qualify for hedge accounting.
Changes in the fair value of our interest rate swaps are recorded as an increase or decrease in swap
fair value during each year. We recorded a loss of HK$41.1 million in 2015 compared to a gain of
HK$3.4 million for 2016, respectively, resulting from the movement in the fair value of our interest
rate swaps.
Income Tax Expense
In 2016, our income tax expense was HK$12.4 million, compared to HK$6.5 million for 2015.
Our income tax expense for 2016 primarily relates to the current tax expense recorded by our
subsidiaries owning WRM’s shares under the WRM Shareholder Dividend Tax Agreement. In 2015,
our income tax expense relates to the current tax expense recorded by our subsidiaries owning
WRM’s shares under the WRM Shareholder Dividend Tax Agreement and a deferred tax benefit
resulting from a decrease in deferred tax liability for property and equipment.
23Annual Report 2016
Management Discussion and Analysis
Net Profit Attributable to Owners of the Company
As a result of the foregoing, net profit attributable to owners of the Company decreased by 40.4%,
from HK$2.4 billion in 2015 to HK$1.4 billion in 2016.
LIQUIDITY AND CAPITAL RESOURCES
Capital Resources
Since the opening of Wynn Macau and Wynn Palace on 6 September 2006 and 22 August 2016,
respectively, we have generally funded our working capital and recurring expenses as well as capital
expenditures from cash flow from operations and cash on hand.
Our cash balances as at 31 December 2016 were approximately HK$2.6 billion. This cash is available
for operations and enhancements to Wynn Macau and Wynn Palace.
On 30 September 2015, WRM expanded its availability under its senior secured bank facility to
approximately HK$23.7 billion consisting of an approximately HK$17.9 billion fully funded senior
secured term loan facility and an approximately HK$5.8 billion senior secured revolving credit facility.
WRM also has the ability to upsize the total senior secured facilities by approximately an additional
HK$7.8 billion equivalent (US$1.0 billion) pursuant to the terms and provisions of the agreement for
the Wynn Macau Credit Facilities. As at 31 December 2016, the Group had approximately HK$3.2
billion of available borrowing capacity under the Wynn Macau Credit Facilities.
The Company has issued 5.25% fixed rate unsecured senior notes due 2021 with an aggregate
principal amount of US$1.35 billion (approximately HK$10.5 billion) for working capital requirements
and general corporate purposes.
On 18 July 2016, WMLF entered into an agreement as the borrower for a revolving credit facility
for initially up to HK$1.5 billion (approximately US$199.7 million) with Bank of China Limited, Macau
Branch as the lender. The WMLF Revolving Credit Facility matures in July 2018, at which time any
outstanding borrowings must be repaid.
On 25 October 2016, the WMLF Revolving Credit Facility was amended and upsized, increasing
the available borrowing capacity to HK$3.9 billion (approximately US$499.0 million). As at 31
December 2016, the Group had HK$2.4 billion available borrowing capacity under the amended
WMLF Revolving Credit Facility. Subsequent to 31 December 2016, the Group repaid all outstanding
borrowings of HK$1.5 billion under the WMLF Revolving Credit Facility.
24 Wynn Macau, Limited
Management Discussion and Analysis
Gearing Ratio
The gearing ratio is a key indicator of our Group’s capital structure. The gearing ratio is net debt
divided by total capital plus net debt. The table below presents the calculation of our gearing ratio.
As at 31 December
2016 2015
HK$ HK$
(in thousands,
except for percentages)
Interest-bearing borrowings 32,169,888 31,317,919
Accounts payable 525,501 345,594
Land premiums payable – 124,015
Construction and retentions payables 1,168,326 1,658,854
Other payables and accruals 6,191,037 4,384,242
Amounts due to related companies 202,298 128,920
Other liabilities 222,932 205,799
Less: cash and cash equivalents (2,591,442) (6,731,356)
restricted cash and cash equivalents (22,109) (15,968)
Net debt 37,866,431 31,418,019
Equity 2,453,064 4,102,279
Total capital 2,453,064 4,102,279
Capital and net debt 40,319,495 35,520,298
Gearing ratio 93.9% 88.5%
25Annual Report 2016
Management Discussion and Analysis
Cash Flows
The following table presents a summary of the Group’s cash flows.
For the year ended
31 December
2016 2015
HK$ HK$
(in millions)
Net cash generated from operating activities 5,843.2 2,480.3
Net cash used in investing activities (6,757.1) (12,668.2)
Net cash (used in)/generated from financing activities (3,229.3) 6,126.4
Net decrease in cash and cash equivalents (4,143.2) (4,061.5)
Cash and cash equivalents at beginning of year 6,731.4 10,789.9
Effect of foreign exchange rate changes, net 3.2 3.0
Cash and cash equivalents at end of year 2,591.4 6,731.4
Net cash generated from operating activities
Our net cash generated from operating activities is primarily affected by changes in our working
capital and operating profit generated by our Macau Operations. Net cash from operating activities
was HK$5.8 billion in 2016 compared to HK$2.5 billion in 2015. Operating profit was HK$2.3 billion
in 2016 compared to HK$3.0 billion in 2015. The increase in net cash generated from operating
activities was primarily attributable to the changes in working capital.
Net cash used in investing activities
Net cash used in investing activities was HK$6.8 billion in 2016, compared to HK$12.7 billion in 2015.
Major expenditures made in 2016 included capital expenditures of HK$6.5 billion for both Wynn
Palace construction and renovations to enhance and refine our Wynn Macau operations, and fine arts
acquisition cost of HK$278.8 million. Major expenditures made in 2015 included capital expenditures
of HK$12.7 billion related to construction costs for Wynn Palace and renovations to enhance and
refine our Wynn Macau operations.
26 Wynn Macau, Limited
Management Discussion and Analysis
Net cash used in financing activities
Net cash used in financing activities was HK$3.2 billion during 2016 compared to HK$6.1 billion
net cash generated from financing activities during 2015. During 2016, net cash used in financing
activities was primarily due to a HK$3.1 billion special dividend payment made in April 2016, a
HK$3.0 billion repayment for the senior revolving credit facility of the Wynn Macau Credit Facilities,
HK$685.7 million interest payments and a HK$124.0 million payment for land premiums, partially
offset by HK$2.3 billion proceeds from the senior revolving credit facility and HK$1.5 billion net
proceeds from the WMLF Revolving Credit Facility. During 2015, net cash generated from financing
activities was primarily due to HK$12.3 billion net proceeds from the refinancing of the Wynn Macau
Credit Facilities in September 2015, partially offset by a HK$5.4 billion special dividend payment
made in March 2015, a HK$489.1 million interest payment and a HK$239.0 million payment for land
premiums.
Indebtedness
The following table presents a summary of our indebtedness.
Indebtedness information
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Bank loans 22,003,178 21,225,648
Senior notes 10,498,819 10,498,488
Less: debt financing costs, net (332,109) (406,217)
Total interest-bearing borrowings 32,169,888 31,317,919
Wynn Macau Credit Facilities
Overview
As at 31 December 2016, the Wynn Macau Credit Facilities consisted of approximately HK$23.7
billion equivalent in a combination of Hong Kong dollar and U.S. dollar facilities, including an
approximately HK$17.9 billion equivalent fully funded senior term loan facility and an approximately
HK$5.8 billion equivalent senior revolving credit facility.
27Annual Report 2016
Management Discussion and Analysis
There is also an option to upsize the total senior secured credit facilities by approximately an
additional HK$7.8 billion equivalent (US$1.0 billion) under the Wynn Macau Credit Facilities and
related agreements upon the satisfaction of various conditions. The borrowings under the Wynn
Macau Credit Facilities were used to refinance WRM’s indebtedness in September 2015 and the
balance was used for a variety of purposes, including to fund the construction and development of
Wynn Palace and for general corporate purposes.
The HK$17.9 billion equivalent term loan facility is repayable in graduating installments of between
2.50% to 7.33% of the principal amount on a quarterly basis commencing December 2018, with a
final installment of 50% of the principal amount repayable in September 2021. The final maturity of
any outstanding borrowings from the revolving credit facility is September 2020, by which time any
outstanding borrowings from the revolving loans must be repaid.
The borrowings under the Wynn Macau Credit Facilities bear interest at LIBOR or HIBOR plus a
margin of 1.50% to 2.25% per annum based on WRM’s leverage ratio. Customary fees and expenses
were paid by WRM in connection with the Wynn Macau Credit Facilities.
Security and Guarantees
Borrowings under the Wynn Macau Credit Facilities are guaranteed by Palo and by certain
subsidiaries of the Company that own equity interests in WRM, and are secured by substantially all of
the assets of, and equity interests in WRM and Palo. With respect to the Concession Agreement and
WRM’s land concession agreement, the WRM lenders have certain cure rights and consultation rights
with the Macau government in the event of an enforcement action by the lenders.
Second Ranking Lender
WRM is also a party to a bank guarantee reimbursement agreement with Banco National Ultramarino
S.A. to secure a guarantee in favor of the Macau government as required under the Concession
Agreement. The amount of this guarantee is MOP300 million (approximately HK$291.3 million) and
it lasts until 180 days after the end of the term of the Concession Agreement. The guarantee assures
WRM’s performance under the Concession Agreement, including the payment of certain premiums,
fines and indemnities for breach. The guarantee is secured by a second priority security interest in
the same collateral package securing the Wynn Macau Credit Facilities.
28 Wynn Macau, Limited
Management Discussion and Analysis
Other Terms
The Wynn Macau Credit Facilities contain representations, warranties, covenants and events of
default customary for casino development financings in Macau. The Directors confirm that there is
no non-compliance with the financial covenants or general covenants contained in the Wynn Macau
Credit Facilities.
The Company is not a party to the credit facilities agreement and related agreements and has no
rights or obligations thereunder.
The Group had approximately HK$3.2 billion available to draw under the revolving credit facility of
the Wynn Macau Credit Facilities as at 31 December 2016.
WML 2021 Notes
The Company issued 5.25% fixed rate unsecured senior notes due on 15 October 2021 with an
aggregate principal amount of US$1.35 billion (approximately HK$10.5 billion). The Company used
the net proceeds from the offering of the WML 2021 Notes for working capital requirements and
general corporate purposes. The WML 2021 Notes are listed on the Hong Kong Stock Exchange.
WMLF Revolving Credit Facility
On 18 July 2016, WMLF entered into an agreement as the borrower for a revolving credit facility
for initially up to HK$1.5 billion (approximately US$199.7 million) with Bank of China Limited, Macau
Branch as the lender.
Borrowings under the WMLF Revolving Credit Facility are secured by pledged US$ deposits of
initially up to US$200.0 million (approximately HK$1.6 billion) placed by WRL in a pledged account at
Bank of China Limited, Macau Branch.
Borrowings under the WMLF Revolving Credit Facility are used for working capital requirements and
general corporate purposes.
The final maturity of any outstanding borrowings under the WMLF Revolving Credit Facility is 18 July
2018, by which time any outstanding borrowings must be repaid in full.
The borrowings under the WMLF Revolving Credit Facility bear interest initially at 1.50% per annum,
such rate calculated as the interest rate paid by Bank of China Limited, Macau Branch to WRL in
respect of the US$ deposits in the pledged account at Bank of China Limited, Macau Branch plus
a margin of 0.40%. Under the terms of the agreement, mandatory repayment is required upon a
change in control or material adverse effect (as defined in the agreement).
29Annual Report 2016
Management Discussion and Analysis
On 25 October 2016, the WMLF Revolving Credit Facility was amended and upsized, increasing
the available borrowing capacity to HK$3.9 billion (approximately US$499.0 million). The terms of
borrowing for the increased principal amount under the amendment are equivalent to the terms
of the original credit agreement, including the requirement for cash collateral to be deposited and
pledged with the lender, and interest borne at the same rate as described above.
As at 31 December 2016, the Group had HK$2.4 billion available borrowing capacity under the
amended WMLF Revolving Credit Facility. Subsequent to 31 December 2016, the Group repaid all
outstanding borrowings of HK$1.5 billion under the WMLF Revolving Credit Facility.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Market risk is the risk of loss arising from adverse changes in market rates and conditions, such as
interest rates, and foreign currency exchange rates.
Foreign Currency Exchange Risks
The financial statements of foreign operations are translated into Hong Kong dollars, the Company’s
functional and presentation currency, for incorporation into the consolidated financial statements.
The majority of our assets and liabilities are denominated in U.S. dollars, Hong Kong dollars and
Macau patacas, and there are no significant assets and liabilities denominated in other currencies.
Assets and liabilities are translated at the prevailing foreign exchange rates in effect at the end of
the reporting period. Income, expenditures and cash flow items are measured at the actual foreign
exchange rates or average foreign exchange rates for the period. The Hong Kong dollar is linked to
the U.S. dollar and the exchange rate between these two currencies has remained relatively stable
over the past several years. The Macau pataca is pegged to the Hong Kong dollar, and in many cases
the two currencies are used interchangeably in Macau. However, the exchange linkages of the Hong
Kong dollar and the Macau pataca, and the Hong Kong dollar and the U.S. dollar, are subject to
potential changes due to, among other things, changes in governmental policies and international
economic and political developments.
We attempt to manage exposure to foreign currency exchange risks associated with future
scheduled interest payments through the use of foreign currency forward contracts. These contracts
involve the exchange of one currency for a second currency at a future date and are with a counter-
party, which is a major international financial institution.
30 Wynn Macau, Limited
Management Discussion and Analysis
Interest Rate Risks
One of our primary exposures to market risk is interest rate risk associated with our credit facilities,
which bear interest based on floating rates. We attempt to manage interest rate risk by managing
the mix of long-term fixed rate borrowings and variable rate borrowings supplemented by hedging
activities as considered necessary. We cannot assure you that these risk management strategies will
have the desired effect, and interest rate fluctuations could have a negative impact on our results of
operations.
As at 31 December 2016, the Group had three interest rate swap agreements intended to manage
a portion of the underlying interest rate risk on borrowings under the Wynn Macau Credit Facilities.
Under two swap agreements, the Group pays a fixed interest rate of 0.73% on borrowings of
approximately HK$3.95 billion incurred under the Wynn Macau Credit Facilities in exchange for
receipts on the same amount at a variable interest rate based on the applicable HIBOR at the time
of payment. These interest rate swaps fix the all-in interest rate on approximately HK$3.95 billion of
borrowings under the Wynn Macau Credit Facilities at 2.23% to 2.98% and expire in July 2017.
Under the third swap agreement, the Group pays a fixed interest rate of 0.6763% on borrowing of
US$243.8 million (approximately HK$1.8 billion) incurred under the Wynn Macau Credit Facilities in
exchange for receipts on the same amount at a variable interest rate based on the applicable LIBOR
at the time of payment. This interest rate swap fixes the all-in interest rate on US$243.8 million
(approximately HK$1.8 billion) of borrowings under the Wynn Macau Credit Facilities at 2.18% to
2.93% and expires in July 2017.
The carrying value of these interest rate swaps on the consolidated statement of financial position
approximates its fair value. The fair value approximates the amount the Group would pay or receive
if these contracts were settled at the respective valuation dates. Fair value is estimated based upon
current, and predictions of future interest rate levels along a yield curve, the remaining duration
of the instruments and other market conditions and, therefore, is subject to significant estimation
and a high degree of variability of fluctuation between periods. We adjust this amount by applying
a non-performance valuation, considering our creditworthiness or the creditworthiness of our
counterparties at each settlement date, as applicable. These transactions do not qualify for hedge
accounting. Accordingly, changes in the fair values during the years ended 31 December 2016
and 2015, were charged to the consolidated statement of profit or loss and other comprehensive
income.
To the extent there are any liabilities of the Group under the swap agreement, such liabilities are
secured by the same collateral package securing the Wynn Macau Credit Facilities.
31Annual Report 2016
Management Discussion and Analysis
OFF BALANCE SHEET ARRANGEMENTS
We have not entered into any transactions with special purpose entities nor do we engage
in any transactions involving derivatives except for interest rate swap and foreign currency
forward contracts. We do not have any retained or contingent interest in assets transferred to an
unconsolidated entity.
OTHER LIQUIDITY MATTERS
We expect to fund our operations and capital expenditure requirements from operating cash
flows, cash on hand and availability under our credit facilities. However, we cannot be sure that
operating cash flows will be sufficient for those purposes. We may refinance all or a portion of our
indebtedness on or before maturity. We cannot be sure that we will be able to refinance any of the
indebtedness on acceptable terms or at all.
New business developments or other unforeseen events may occur, resulting in the need to raise
additional funds. There can be no assurances regarding the business prospects with respect to any
other opportunity. Any other development would require us to obtain additional financing.
In the ordinary course of business, in response to market demands and client preferences, and in
order to increase revenues, we have made and will continue to make enhancements and refinements
to our resorts. We have incurred and will continue to incur capital expenditures related to these
enhancements and refinements.
Taking into consideration our financial resources, including our cash and cash equivalents, internally
generated funds and availability under our credit facilities, we believe that we have sufficient liquid
assets to meet our current and anticipated working capital and operating requirements.
RELATED PARTY TRANSACTIONS
For details of the related party transactions, see note 27 to the Financial Statements. Our Directors
confirm that all related party transactions has been conducted on normal commercial terms, and that
their terms are fair and reasonable.
32 Wynn Macau, Limited
Directors and Senior Management
OUR DIRECTORS
The following table presents certain information in respect of the members of our Board.
Name Age Position
Date of Appointment
as a Director
Stephen A. Wynn 75 Chairman of the Board,
Executive Director and
Chief Executive Officer
16 September 2009
Ian Michael Coughlan 57 Executive Director and
President
16 September 2009
Linda Chen 50 Executive Director and
Chief Operating Officer
16 September 2009
Matthew O. Maddox 41 Non-executive Director 28 March 2013
Kim Sinatra 56 Non-executive Director 1 April 2017
Allan Zeman, GBM, GBS, JP 68 Vice-chairman of the Board
and Independent
Non-executive Director
16 September 2009
Jeffrey Kin-fung Lam, GBS, JP 65 Independent
Non-executive Director
16 September 2009
Bruce Rockowitz 58 Independent
Non-executive Director
16 September 2009
Nicholas Sallnow-Smith 67 Independent
Non-executive Director
16 September 2009
33Annual Report 2016
Directors and Senior Management
The biography of each Director is set out below:
Executive Directors
Mr. Stephen A. Wynn, aged 75, has been a Director of the Company since its inception and
an executive Director, the Chairman of the Board of Directors and Chief Executive Officer of
the Company since 16 September 2009. Mr. Wynn was also the President of the Company from
September 2009 to January 2014. Mr. Wynn has served as Director, Chairman and Chief Executive
Officer of WRM since October 2001. Mr. Wynn has also served as Chairman and Chief Executive
Officer of Wynn Resorts, Limited since June 2002. Mr. Wynn has over 40 years of experience in the
gaming casino industry. Mr. Wynn also serves as an officer and/or director of several subsidiaries of
Wynn Resorts, Limited. During his time as Chairman, Chief Executive Officer and President of Mirage
Resorts, Mr. Wynn developed, opened and operated The Mirage, Treasure Island and Bellagio in
1989, 1993 and 1998, respectively. In 2011, Barron’s ranked Mr. Wynn as one of the world’s 30 best
CEOs. In Februrary 2017, Mr. Wynn was named the Finance Chairman of the Republican National
Committee.
Mr. Ian Michael Coughlan, aged 57, has been the President of the Company since 30 September
2016 and an executive Director of the Company since 16 September 2009. Mr. Coughlan has also
been the President of WRM since July 2007. Mr. Coughlan is responsible for the entire operation
and development of both Wynn Macau and Wynn Palace. Prior to these roles, Mr. Coughlan was
Director of Hotel Operations — Worldwide for Wynn Resorts, Limited. Mr. Coughlan has over 35
years of hospitality experience with leading hotels across Asia, Europe and the United States. Before
joining Wynn Resorts, Limited, he spent ten years with The Peninsula Group, including posts as
General Manager of The Peninsula Hong Kong from September 2004 to January 2007, and General
Manager of The Peninsula Bangkok from September 1999 to August 2004. His previous assignments
include senior management positions at The Oriental Singapore, and a number of Ritz-Carlton
properties in the United States. Mr. Coughlan holds a Diploma from Shannon College of Hotel
Management, Ireland.
34 Wynn Macau, Limited
Directors and Senior Management
Ms. Linda Chen, aged 50, has been an executive Director and the Chief Operating Officer of the
Company since 16 September 2009 and Chief Operating Officer of WRM since June 2002. Ms. Chen
is also the Executive Director of WRM. Ms. Chen is responsible for the marketing and strategic
development of WRM. Ms. Chen served as a director of Wynn Resorts, Limited from October 2007
to December 2012 and is the President of WIML. In these positions, she is responsible for the set-
up of international marketing operations of Wynn Resorts, Limited. Prior to joining the Group, Ms.
Chen was Executive Vice President — International Marketing at MGM Mirage, a role she held
from June 2000 until May 2002, and was responsible for the international marketing operations for
MGM Grand, Bellagio and The Mirage. Prior to this position, Ms. Chen served as the Executive Vice
President of International Marketing for Bellagio and was involved with its opening in 1998. She
was also involved in the opening of the MGM Grand in 1993 and The Mirage in 1989. Ms. Chen is
also a member of the Nanjing Committee of the Chinese People’s Political Consultative Conference
(Macau). Ms. Chen holds a Bachelor of Science Degree in Hotel Administration from Cornell
University in 1989 and completed the Stanford Graduate School of Business Executive Development
Program in 1997.
Non-executive Directors
Mr. Matthew O. Maddox, aged 41, was appointed as a non-executive Director of the Company and
a member of the Remuneration Committee on 28 March 2013. Since November 2013, he has served
as the President of Wynn Resorts, Limited. From March 2008 to May 2014, Mr. Maddox was the
Chief Financial Officer of Wynn Resorts, Limited. Since joining Wynn Resorts in 2002, Mr. Maddox
has served as Wynn Resorts’ Senior Vice President of Business Development and Treasurer, as the
Senior Vice President of Business Development for Wynn Las Vegas, LLC, as the Chief Financial
Officer of WRM, and as Wynn Resorts’ Treasurer and Vice President-Investor Relations. Mr. Maddox
also serves as an officer of several subsidiaries of Wynn Resorts, Limited. Prior to joining Wynn
Resorts, Limited in 2002, Mr. Maddox worked in Corporate Finance for Caesars Entertainment, Inc.
(formerly Park Place Entertainment, Inc.). Before joining Park Place Entertainment, Mr. Maddox
worked as an investment banker for Bank of America Securities in the Mergers and Acquisitions
Department.
Ms. Kim Sinatra, aged 56, was appointed as a non-executive Director of the Company on 1 April
2017. Ms. Sinatra is the Executive Vice President, General Counsel and Secretary of Wynn Resorts,
Limited, a position she has held since February 2006. She joined Wynn Resorts, Limited in January
2004 as Senior Vice President and General Counsel of its development activities. She also serves as
an officer of several of Wynn Resorts, Limited’s subsidiaries. From 2000 to 2003, Ms. Sinatra served
as Executive Vice President and Chief Legal Officer of Caesars Entertainment, Inc. (formerly Park
Place Entertainment, Inc.). She has also served as General Counsel for The Griffin Group, Inc., Merv
Griffin’s investment management company, and as a partner in the New York office of the law firm
Gibson, Dunn & Crutcher LLP.
35Annual Report 2016
Directors and Senior Management
Independent non-executive Directors
Dr. Allan Zeman, GBM, GBS, JP, aged 68, has been a Director of the Company since its inception
and a non-executive Director of the Company since 16 September 2009 and is the Vice Chairman
of the Company. Effective from 29 March 2014, Dr. Zeman became an independent non-executive
Director of the Company. He was also a non-executive director of Wynn Resorts, Limited, from
October 2002 to December 2012. Dr. Zeman founded The Colby International Group in 1975 to
source and export fashion apparel to North America. In late 2000, The Colby International Group
merged with Li & Fung Limited. Dr. Zeman is the Chairman of Lan Kwai Fong Holdings Limited. He is
also the owner of Paradise Properties Group, a property developer in Thailand.
Dr. Zeman is the Vice Patron of Hong Kong Community Chest, and serves as a director of the “Star”
Ferry Company, Limited. Dr. Zeman also serves as an independent non-executive director of Pacific
Century Premium Developments Limited, Sino Land Company Limited, Tsim Sha Tsui Properties
Limited, Television Broadcasts Limited (TVB) and Global Brands Group Holding Limited, all of which
are listed on the Hong Kong Stock Exchange.
Having lived in Hong Kong for over 45 years, Dr. Zeman has been very involved in government
services as well as community activities. Besides having been the Chairman of Hong Kong Ocean
Park, a major theme park in Hong Kong, from July 2003 to June 2014 and is now a honorary advisor,
he is also a member of the General Committee of the Hong Kong General Chamber of Commerce
and Hong Kong China’s representative to the Asia-Pacific Economic Cooperation (APEC) Business
Advisory Council (“ABAC HK Members”). Dr. Zeman is a member of the board of Governors of
The Canadian Chamber of Commerce in Hong Kong. Dr. Zeman was a member of the Board of
West Kowloon Cultural District Authority, and the chairman of its Performing Arts Committee
from 2008 to 2016 and is now a honorary advisor. He is also the member of the Economic
Development Commission Working Group on Convention and Exhibition Industries and Tourism
of the Government of Hong Kong. In September 2014, Dr. Zeman was invited by former HKSAR
Chief Executive Mr. CH Tung to be a Special Advisor to his Our Hong Kong Foundation, which is
dedicated to promoting the long-term and overall interests of Hong Kong. In June 2015, Dr. Zeman
was appointed as a Board Member of the Airport Authority of Hong Kong. In November 2015, Dr.
Zeman was appointed to the board of directors of The Hong Kong Entrepreneurs Fund launched by
Alibaba Group.
In 2001, Dr. Zeman was appointed as a Justice of the Peace in Hong Kong. He was awarded the
Gold Bauhinia Star in 2004 and the Grand Bauhinia Medal in 2011. In 2008, Dr. Zeman was awarded
Business Person of the Year by the Hong Kong Business Award. In 2012, he was awarded Honorary
Doctorate Degrees of Business Administration from City University of Hong Kong and University of
Science and Technology of Hong Kong.
36 Wynn Macau, Limited
Directors and Senior Management
Mr. Jeffrey Kin-fung Lam, GBS, JP, aged 65, has been an independent non-executive Director
of the Company since 16 September 2009. Mr. Lam was appointed as a non-official member of
the Executive Council of Hong Kong in October 2012. Mr. Lam is also a member of the National
Committee of the Chinese People’s Political Consultative Conference and a member of the
Legislative Council of Hong Kong. He is the Chairman of the Mega Events Fund Assessment
Committee, the Independent Commission Against Corruption (ICAC) Complaints Committee and
Aviation Security Company Limited. He is also a member of the board of Airport Authority Hong
Kong and a member of the Fight Crime Committee in Hong Kong. In April 2016, Mr. Lam was
appointed as a director of the Hong Kong Mortgage Corporation Limited (HKMC). Mr. Lam is
also a General Committee Member of the Hong Kong General Chamber of Commerce and the
Vice-Chairman of The Hong Kong Shippers’ Council. In addition, Mr. Lam is an independent non-
executive director of CC Land Holdings Limited, China Overseas Grand Oceans Group Limited,
Chow Tai Fook Jewellery Group Limited and HNA Holding Group Co. Limited (formerly known as
HNA International Investment Holdings Limited), all of which are listed on the Hong Kong Stock
Exchange. He has served as the director on the board of Heifer International — Hong Kong since
January 2016. Mr. Lam was also an independent non-executive director of Hsin Chong Construction
Group Ltd. from August 2002 to May 2014 and Bracell Limited (formerly known as Sateri Holdings
Limited) until November 2016.
In 1996, Mr. Lam was appointed Justice of the Peace in Hong Kong and became a member of
the Most Excellent Order of the British Empire. He was awarded the honor of the Gold Bauhinia
Star in July 2011 and the Silver Bauhinia Star in 2004. Mr. Lam was conferred University Fellow of
Tufts University in the United States and Hong Kong Polytechnic University in 1997 and in 2000,
respectively.
37Annual Report 2016
Directors and Senior Management
Mr. Bruce Rockowitz, aged 58, has been an independent non-executive Director of the Company
since 16 September 2009. Mr. Rockowitz has been appointed as the Chief Executive Officer, Vice
Chairman and Executive Director of Global Brands Group Holding Limited, a company spun off from
Li & Fung Limited and listed on the Hong Kong Stock Exchange in July 2014. Mr. Rockowitz joined
Li & Fung Limited as Executive Director in 2001 until June 2014. He was the President of the Li &
Fung Group from 2004 to 2011, and Group President and Chief Executive Officer from 2011 to June
2014. He was also the co-founder and Chief Executive Officer of Colby International Limited, a large
Hong Kong buying agent, prior to its acquisition by Li & Fung in 2000. In addition to his positions at
Li & Fung and Global Brands Group, Mr. Rockowitz is the non-executive director of The Pure Group,
a lifestyle, fitness and yoga group operating in Hong Kong, Singapore, Taiwan and mainland China.
He is a member of the Advisory Board for the Wharton School’s Jay H Baker Retailing Center, an
industry research center for retail at the University of Pennsylvania. He is also a board member of
the Education Foundation for Fashion Industries, the private fund-raising arm of the Fashion Institute
of Technology, New York. In March 2012, he became a member of the Global Advisory Council
of the Women’s Tennis Association (WTA). In 2008, Mr. Rockowitz was ranked first by Institutional
Investor for Asia’s Best CEOs in the consumer category. In the years 2010 and 2011, he was also
ranked as one of the world’s 30 best CEOs by Barron’s. In 2011, he was presented with the Alumni
Achievement Award by the University of Vermont. In 2012, Mr. Rockowitz was named Asia’s Best
CEO at Corporate Governance Asia’s Excellence Recognition Awards, and he was also presented
with an Asian Corporate Director Recognition Award by the same organization in 2012 and 2013.
38 Wynn Macau, Limited
Directors and Senior Management
Mr. Nicholas Sallnow-Smith, aged 67, has been an independent non-executive Director of
the Company since 16 September 2009. Mr. Sallnow-Smith also served as the Chairman and
an independent non-executive director of Link Asset Management Limited (formerly The Link
Management Limited) between April 2007 and March 2016, when he also served as Chairman of
Link Asset Management Limited’s Finance and Investment, and Nominations Committees. Link Asset
Management Limited is the manager to Link Real Estate Investment Trust (formerly The Link Real
Estate Investment Trust), which is listed on the Hong Kong Stock Exchange. Mr. Sallnow-Smith is
also a non-executive director of UCP Plc, which was listed on the London Stock Exchange, and Aviva
Life Insurance Company Limited in Hong Kong. Prior to joining Link, Mr. Sallnow-Smith was Chief
Executive of Hongkong Land Holdings Limited from February 2000 to March 2007. He has a wide
ranging finance background in Asia and the United Kingdom for over 30 years, including his roles as
Finance Director of Hongkong Land Holdings Limited from 1998 to 2000 and as Group Treasurer of
Jardine Matheson Limited from 1993 to 1998.
Mr. Sallnow-Smith’s early career was spent in the British Civil Service, where he worked for Her
Majesty’s Treasury in Whitehall, London from 1975 to 1985. During that time, he was seconded
for two years to Manufacturers Hanover London, working in export finance and in their merchant
banking division, Manufacturers Hanover Limited. He left the Civil Service in 1985, following a period
working in the International Finance section of H. M. Treasury on Paris Club and other international
debt policy matters, and spent two years with Lloyds Merchant Bank before moving into the
corporate sector in 1987. Mr. Sallnow-Smith served as the Convenor of the Hong Kong Association
of Corporate Treasurers from 1996 to 2000, as Chairman of the Matilda Child Development Centre
in 1994 and 1995 and as Chairman of the Matilda International Hospital from 2003 to 2005.
He is an Executive Committee member of the Hong Kong Youth Arts Foundation, a member of
the Council of the Treasury Markets Association (Hong Kong Association of Corporate Treasurers
Representative), and a member of the Board of Governors of Hong Kong Philharmonic Society Ltd.
He was the Chairman of Manpower Committee of the Hong Kong General Chamber of Commerce
from 2014 to 2016. He was previously the Chairman of the General Committee of The British
Chamber of Commerce in Hong Kong from 2012 to 2014. He is also a director of The East Asian
History of Science Foundation, and a Councillor of the Foundation for the Arts and Music in Asia
Limited. He has been a member of the Financial Reporting Council of Hong Kong since December
2012. Mr. Sallnow-Smith was educated at Gonville & Caius College, Cambridge, and the University
of Leicester and is a Fellow of the Association of Corporate Treasurers. He holds M.A. (Cantab) and
M.A. (Soc. of Ed.) Degrees.
39Annual Report 2016
Directors and Senior Management
OUR SENIOR MANAGEMENT
The following table presents certain information concerning the senior management personnel of the
Group (other than our executive Directors).
Wynn Resorts (Macau) S.A.
Name Age Position
Frank Xiao 49 President — Marketing
Jay M. Schall 43 Senior Vice President and General Counsel#,
Senior Vice President — Legal
Wynn Macau
Name Age Position
Ciarán Pearse Carruthers 48 Chief Operating Officer
Charlie Ward* 67 Executive Vice President — Casino Operations
Frank Anthony Cassella 39 Senior Vice President — Chief Financial Officer
Mao Ling Yeung 45 Senior Vice President — Human Resources
Elizabeth Doherty 58 Assistant Vice President — Main Floor Gaming
Craig Arthur Raymond
Mitchell
55 Assistant Vice President — Slot Operations
Elsie Guerrero 60 Assistant Vice President — Wynn Club Gaming
Rory McGregor Forbes 47 Executive Director — Security Operations
Wynn Palace
Name Age Position
Frederic Jean-Luc Luvisutto 45 Chief Operating Officer
Robert Alexander Gansmo 47 Senior Vice President — Chief Financial Officer
Michael Francis Clifford 54 Senior Vice President — Casino Operations
Mo Yin Mok 55 Senior Vice President — Human Resources#
Peter James Barnes 57 Senior Vice President — Security & Corporate
Investigation
Dianne Fiona Dennehy 61 Senior Vice President — Main Floor Gaming
Dennis Hudson 57 Vice President — Wynn Club Gaming
Notes:
# Position held in the Company.
* Retired in February 2017.
40 Wynn Macau, Limited
Directors and Senior Management
The biography of each member of the senior management team (other than our executive Directors)
is set out below:
Mr. Frank Xiao, aged 49, is the President — Marketing of WRM, a position he has held since
October 2012. Prior to this position, Mr. Xiao was the Senior Executive Vice President — Premier
Marketing between August 2006 and October 2012. Mr. Xiao is responsible for providing leadership
and guidance to the marketing team and staff, developing business for and promoting Wynn Macau.
Prior to this position, Mr. Xiao was the Senior Executive Vice President — China Marketing for WIML
and Worldwide Wynn between 2005 until 2006. Prior to joining the Group, Mr. Xiao was the Senior
Vice President of Far East Marketing at MGM Grand Hotel. During his 12 years at the MGM Grand
Hotel, he was promoted several times from his first position as Far East Marketing Executive in 1993.
Mr. Xiao holds a Bachelor of Science Degree in Hotel Administration and a Master’s Degree in Hotel
Administration from the University of Nevada, Las Vegas.
Mr. Jay M. Schall, aged 43, is the Senior Vice President and General Counsel of the Company and
Senior Vice President — Legal of WRM. He has held senior legal positions with WRM since May
2006. Mr. Schall has over 17 years of experience in the legal field, including over 13 years in Macau
and Hong Kong. Prior to joining the Group, Mr. Schall practiced United States law at a major law firm
in the United States and in Hong Kong. Mr. Schall is a member of the State Bar of Texas. Mr. Schall
holds a Bachelor of Arts Degree from Colorado College, an MBA from Tulane University, Freeman
School of Business and a Juris Doctor (magna cum laude, Order of the Coif) from Tulane University
School of Law.
Mr. Ciarán Pearse Carruthers, aged 48, is the Wynn Macau Chief Operating Officer, a position he
has held since January 2017. Mr. Carruthers is responsible for overseeing all operations at Wynn
Macau, including gaming operations. Prior to this position, Mr. Carruthers was the Senior Vice
President and Director of the Venetian and Plaza Operations of Venetian Macau. Mr. Carruthers has
been in gaming industry for 30 years and in Asia Pacific region since 1991 and Macau since 2002.
Among others, Mr. Carruthers held positions as President & CEO of Asia Pacific Gaming and Chief
Operating Officer of StarWorld at Galaxy Entertainment Group Limited. He has also held a number
of senior operational roles at casino resorts in South East Asia, the Philippines and the US Pacific
Islands.
41Annual Report 2016
Directors and Senior Management
Mr. Charlie Ward, aged 67, was the Wynn Macau Executive Vice President — Casino Operations
until his retirement in February 2017. Mr. Ward was responsible for providing leadership and
operational direction for Wynn Macau gaming operations. Mr. Ward has more than 40 years of
experience in the gaming industry, having served at gaming companies including MGM and Wynn.
Over his career Mr. Ward has gained experience in a wide range of assignments including customer/
VIP relations, game protection and casino set up, opening and operations. Prior to this position,
Mr. Ward held the position of Vice President of Table Games at Wynn | Encore Las Vegas between
2008 and 2012. Prior to this position, Mr. Ward was at MGM Grand Hotel and Casino for 14 years
and in 2007 was promoted to the pre-opening team of MGM Grand Macau as Vice President of VIP
Gaming.
Mr. Frank Anthony Cassella, aged 39, is the Wynn Macau Senior Vice President — Chief Financial
Officer, a position he has held since January 2014. Mr. Cassella is responsible for the management
and administration of Wynn Macau finance division. Prior to this position, Mr. Cassella worked at
Wynn Resorts, Limited since 2006, most recently as the Executive-Director of Financial Reporting.
Prior to joining Wynn Resorts, Limited, Mr. Cassella practiced as a certified public accountant with
firms in Las Vegas and New York, including PricewaterhouseCoopers and KPMG. Mr. Cassella
graduated from the Pennsylvania State University, where he obtained a Bachelor of Science Degree
in Accounting.
Ms. Mao Ling Yeung, aged 45, is the Wynn Macau Senior Vice President – Human Resources, a
position she has held since January 2017. Prior to this position, Ms. Yeung was the Wynn Palace
Senior Vice President — Human Resources from June 2015 to December 2016. Ms. Yeung has over
20 years of all-round human resources and organization development experience in various sectors
including hospitality, luxury retail, and property within the Asia Pacific region. Prior to joining the
Group, Ms. Yeung was the Regional Director of Human Resources at SSP Asia Pacific Limited,
and before that, she had also held various strategic human resources leadership positions in such
multinational organizations as Swire Properties Limited, Swire Hotels, Louis Vuitton Asia Pacific, Four
Seasons and Shangri-La.
Ms. Yeung holds a Bachelor’s Degree in Hospitality Management and a Master’s Degree in Business
Administration. She is also an alumni of the Advanced Management Program from INSEAD,
Fontainebleau.
42 Wynn Macau, Limited
Directors and Senior Management
Ms. Elizabeth Doherty, aged 58, is the Wynn Macau Assistant Vice President — Main Floor
Gaming, a position she has held since January 2015. Ms. Doherty is responsible for leading and
overseeing the Main Floor Gaming operations. Prior to this position, she was Director of Workforce
Administration at Wynn Macau from November 2007 to December 2014. She joined Wynn Macau
pre-opening as a Casino Manager in June 2006. Before joining Wynn Macau, Ms. Doherty held a
variety of gaming and service leadership roles in Australasia and Europe. She has over 25 years
of experience in the gaming and services industry covering a broad spectrum of responsibilities
including gaming operations, training and development, along with project management, safety and
security.
Mr. Craig Arthur Raymond Mitchell, aged 55, is the Wynn Macau Assistant Vice President —
Slot Operations, a position he has held since June 2011. Mr. Mitchell is responsible for providing
leadership and guidance to the slot department management team and staff. This includes
establishing the operational structure, instituting departmental policies and procedures, developing
slot merchandising strategies, and projecting and evaluating the revenues and expenses of the
department. Prior to this position, Mr. Mitchell was the Director — Slot Operations between June
2008 and May 2011 and a Shift Manager of Slots between June 2006 and May 2008. Mr. Mitchell
held management roles in various hospitality-related businesses prior to joining the Group including
Gaming Manager at a Rugby Super League Club in Sydney which had 300 slot machines. From
1989, he was Operations Manager and Duty Manager at Balmain Leagues Club (Tigers), Australia.
Mr. Mitchell has attended the Gaming Executive Development Program at the University of Nevada,
United States.
Ms. Elsie Guerrero, aged 60, is the Wynn Macau Assistant Vice President — Wynn Club Gaming,
a position she has held since July 2015. Ms. Guerrero is responsible for overseeing Wynn Club
Gaming operations, expansion projects, staffing and training, budgeting and business operation
for Wynn Macau. Prior to this position, she was the Casino Manager at Wynn Las Vegas from April
2008 to June 2015. Ms. Guerrero started her gaming career as a Dealer at the former MGM Grand
Hotel (now Bally’s) in Las Vegas in 1980, and has amassed over 35 years of experience in the casino
industry. Prior to joining Wynn Las Vegas, she held the position as a Baccarat Manager at Caesar
Palace Las Vegas from April 2000 to June 2007 and was part of the pre-opening team in MGM
Grand Macau as a Casino Shift Manager from July 2007 to March 2008.
43Annual Report 2016
Directors and Senior Management
Mr. Rory McGregor Forbes, aged 47, is the Wynn Macau Executive Director — Security Operations,
a position he has held since 10 July 2014. Mr. Forbes is responsible for all aspects of WRM’s security.
Prior to joining the Group, Mr. Forbes served in the Royal Hong Kong Police Force, where he
enjoyed a decorated 13-year career, rising to the rank of Senior Inspector. He then spent four and
a half years with The HALO Trust which specializes in mine clearance and destruction of explosive
ordnance in conflict zones. Immediately prior to joining Wynn Macau, Mr. Forbes was Associate
Director of Security at Venetian Macau. Mr. Forbes speaks five languages and has professional
experience in executive and VIP security, crowd management and public order control. Mr. Forbes
holds a Bachelor Degree in Modern Chinese and Business Studies and a Master of Science Degree
in Public Policy and Management. Mr. Forbes also completed the Chinese Public Security Bureau
University course in Beijing, China and the Senior Police Administration Course in Ottawa, Canada.
Mr. Frederic Jean-Luc Luvisutto, aged 45, is the Wynn Palace Chief Operating Officer, a position
he has held since January 2014. Mr. Luvisutto is responsible for overseeing all operations at Wynn
Palace. Prior to this position, Mr. Luvisutto was the Managing Director of the Star Resort and Casino
in Sydney, Australia. Before this he was the Managing Director of Jupiters Resort and Casino, Gold
Coast, Australia. Mr. Luvisutto’s hospitality and gaming career spans 20 years and also includes
appointments as Vice President of The Signature at MGM Grand in Las Vegas and Vice President —
Hotel Operations at Monte Carlo Resort and Casino in Las Vegas. Mr. Luvisutto graduated from the
Lausanne Hotel Management School, Switzerland.
Mr. Robert Alexander Gansmo, aged 47, is the Wynn Palace Senior Vice President — Chief
Financial Officer, a position he has held since January 2014. Prior to this position, Mr. Gansmo was
the Senior Vice President — Chief Financial Officer of Wynn Macau from April 2009 to January 2014,
and the Director — Finance of Wynn Macau, a position he assumed in January 2007. Mr. Gansmo is
responsible for the management and administration of Wynn Palace’s finance division. Before joining
WRM, Mr. Gansmo worked at Wynn Resorts, Limited, where he served as the Director of Financial
Reporting from November 2002. Prior to joining the Wynn Resorts, Limited, Mr. Gansmo practiced
as a certified public accountant with firms in Las Vegas, Washington and California, including KPMG
Peat Marwick, Arthur Andersen, and Deloitte and Touche. Mr. Gansmo graduated in 1993 from
California State University, Chico, where he obtained a Bachelor of Science Degree in Business
Administration with a focus on accounting.
44 Wynn Macau, Limited
Directors and Senior Management
Mr. Michael Francis Clifford, aged 54, is the Wynn Palace Senior Vice President — Casino
Operations. Mr. Clifford is responsible for providing leadership and operational direction for
Wynn Palace gaming operations. Mr. Clifford has nearly 25 years of experience in the gaming
industry. Over his career, Mr. Clifford has gained experience in a wide range of assignments from
International Marketing to Table Games, being steadily promoted into a variety of leadership
positions in baccarat and main floor operations. Prior to his position, Mr. Clifford held the position
of Vice President of Table Games at MGM Macau, managing 427 tables and 2,500 employees. Prior
to moving to Macau, Mr. Clifford was Vice President of International Marketing at MGM Resorts
International.
Ms. Mo Yin Mok, aged 55, is the Senior Vice President — Human Resources of the Company, a
position she has held since January 2017. Ms. Mok is responsible for overseeing and leading the
human resources function of the Company. She joined Wynn Macau in June 2008 as Vice President
— Human Resources and was promoted as Wynn Macau Senior Vice President — Human Resources
in June 2014. Ms. Mok has an extensive 20-year background in hospitality and human resources,
primarily in the luxury hotel sector at The Regent Four Seasons Hong Kong and The Peninsula Hong
Kong. Prior to joining the Group, she led The Peninsula Group’s worldwide human resources team
and, in her position, supported eight Peninsula hotels with more than 5,000 staff, and orchestrated
human resources activities for the opening of The Peninsula Tokyo. Ms. Mok also served at the front
lines of the hospitality industry as the Director of Rooms Division at The Peninsula Hong Kong with
responsibility for front office, housekeeping, security and spa departments. Ms. Mok currently serves
on the Future Studies and Placement Advisory Committee and the Centre for Continuing Education
Advisory Board of the University of Macau and is a panel member of the Hong Kong Council for
Accreditation of Academic and Vocational Qualifications.
Ms. Mok holds a Bachelor of Science Degree in Hospitality Management from Florida International
University in the United States, where she received a Rotary International Ambassadorial Scholarship.
She also obtained an MBA from the Chinese University of Hong Kong.
45Annual Report 2016
Directors and Senior Management
Mr. Peter James Barnes, aged 57, is the Wynn Palace Senior Vice President — Security and
Corporate Investigation, a position he has held since May 2015. Mr. Barnes is responsible for all
aspects of security and corporate investigations. Mr. Barnes also served as Executive Director —
Security & Corporate Investigations of WRM between July 2008 and June 2012. Between July 2012
and April 2015, Mr. Barnes was Vice President Corporate Security at Galaxy Entertainment Group
Limited. Mr. Barnes has 30 years of experience in the Hong Kong Police Force and has held various
managerial positions involving serious crimes, homicide, organized crime and anti-riot operations.
Mr. Barnes’ experience includes serving as the Divisional Commander in charge of uniformed and
criminal investigation department officers in Tsimshatsui, Hong Kong, a position he held from 2004
until 2005 when he was promoted to the rank of Detective Senior Superintendent of Police in the
Kowloon East region. Mr. Barnes has professional qualifications which cover security design, financial
investigations, intermediate and senior command, criminal intelligence and surveillance operations.
Mr. Barnes completed the 205th Session of the Federal Bureau of Investigation’s National Academy
Program in Quantico, Virginia, United States. Mr. Barnes was awarded the Commanding Officer’s
Commendations in 1983 and 1997.
Ms. Dianne Fiona Dennehy, aged 61, is the Wynn Palace Senior Vice President — Main Floor
Gaming, a position she has held since January 2015. Ms. Dennehy is responsible for leading and
overseeing Wynn Palace’s Main Floor Gaming division. Prior to this position, she was the Vice
President — Main Floor Gaming from September 2011 to December 2014, from September 2010 to
August 2011 she was the Assistant Vice President — Main Floor Gaming, and from September 2005
through August 2010 she was the Director — Main Floor Gaming. Ms. Dennehy was responsible
for the overall operations of Wynn Macau main floor table games operation. Ms. Dennehy has
over 40 years of experience in the casino industry and has experience in such areas as table games
operations, card room operations, cash desk, slots, VIP, guest relations, human resources, and
training and development. Prior to joining the Group, Ms. Dennehy was involved in the opening of a
number of the casino properties in Australia, and has also opened properties in Sri Lanka, Yugoslavia
and Egypt. She also has six years of experience in human resources, which she gained as the Human
Resources Operations Manager at Star City, Sydney, Australia.
46 Wynn Macau, Limited
Directors and Senior Management
Mr. Dennis Hudson, aged 57, is the Wynn Palace Vice President — Wynn Club Gaming, a
position he has held since July 2015. Mr. Hudson is responsible for overseeing Wynn Club Gaming
operations, expansion projects, staffing and training, budgeting and business operation for Wynn
Palace. Prior to this position, he was Wynn Macau Vice President — Wynn Club Gaming from April
2012 to June 2015 and he was a Shift Manager — Wynn Club from joining Wynn Macau in April 2006
through March 2012. Mr. Hudson started his gaming career at the Playboy Victoria Sporting Club
on Edgeware Road in London in 1979, and has amassed over 35 years of experience in the casino
industry, including senior management positions. Among others, he was a Casino Manager for Star
Cruises, where he was responsible for shipboard casino operations on cruises throughout Asia from
2000 to April 2006 and he was the Director of Gaming for VIP Clubs in the Czech Republic from 1995
to 2000.
OUR COMPANY SECRETARY
Ms. Ho Wing Tsz, Wendy, aged 47, has been appointed as the company secretary of the Company
with effect from 28 February 2013. She is a Director of Corporate Services Division at Tricor Services
Limited, a global professional service provider specialized in integrated business, corporate and
investor services. Ms. Ho is a Chartered Secretary and a Fellow of both The Hong Kong Institute of
Chartered Secretaries (“HKICS”) and The Institute of Chartered Secretaries and Administrators in
the United Kingdom. She has over 20 years of experience in a diversified range of corporate services
and has been providing professional secretarial services to a number of listed companies, a real
estate investment trust listed on the Hong Kong Stock Exchange as well as multinational, private and
offshore companies. She is a holder of the Practitioner’s Endorsement from HKICS.
47Annual Report 2016
Environmental, Social and Governance Report
OVERVIEW
Guided by our leadership and core values, we strive to create shared sustainable value with
our stakeholders from an economic, social and environmental perspective. Our commitment to
environmental and social responsibility is built into our sustainability strategy with the focus of
providing unrivaled workplace practices for our employees, significantly and positively impacting
the communities in which we operate and balancing environmental responsibility with our luxury
offerings.
SCOPE OF REPORTING
In this section we address the general disclosures set out in the Hong Kong Stock Exchange’s
Environmental, Social and Governance Reporting Guide (“HKEx ESG Guide”) in respect of WRM’s
core operations and activities at Wynn Macau and Wynn Palace. The core operations and activities
at Wynn Macau and Wynn Palace include the casino, hotel, food & beverage, retail, spa, meeting,
entertainment and recreational offerings. The scope of our environmental, social and governance
(“ESG”) reporting was reviewed by the Board.
ESG GOVERNANCE AND MANAGEMENT
The Board has overall responsibility over our ESG strategy and reporting and, in this regard, is
primarily assisted and advised by the Committees of the Board and senior management. Senior
management in turn collaborates with various departments and committees to drive implementation
and receive progress reports. Each department, in conjunction with the legal and compliance
departments, is responsible for monitoring compliance with relevant laws and regulations, and
compliance with company policy as is relevant to their area of responsibility. Our management’s
efforts are also augmented by the support of The Wynn Green Team and The Wynn Employee (WE)
Volunteer Team.
48 Wynn Macau, Limited
Environmental, Social and Governance Report
STAKEHOLDER ENGAGEMENT AND MATERIAL SUSTAINABILITY ISSUES
We have identified our key stakeholders (set out in alphabetical order) as our employees,
government bodies, our guests, the Macau community, non-governmental organizations, our
Shareholders and our suppliers. We consider our internal and external stakeholders as valued
partners and have set up strategic, collaborative business relationships to better understand the
ever-evolving needs of those impacted by the activities and decisions of our organization. Through
our collaboration and the strategic communication channels in which we engage, we enhance our
understanding of the views and expectations of our stakeholders, enabling us to better assess and
manage the impact of our activities. Going forward, through our continuous engagement, we will be
able to continuously refine our sustainability initiative. Outlined below are our key stakeholders and
our methods of engagement.
Employees
Orientation of new staff
Back-of-house concierge
Back-of-house roadshows
Wynn Stories (reward program)
Government Bodies
Meetings
Briefings
Regulatory filings
Public and private forums
Guests
Customer service
Marketing host and loyalty programs
In-room customer feedback questionnaire
Shareholders
Earnings releases
Parent company conference calls
Investor days
Bank analyst meetings
Non-Governmental Organizations
Media communications channels
Public and private forums
Briefings and meetings
Regular volunteering events
Suppliers
Business relationships and partnerships
Small-and-medium local enterprise
partnerships (SMEs)
Macau Community
Volunteering events
Fund raising
Charitable giving
Material Sustainability Issues Identified
Governance
Economic Performance
Energy Efficiency
Water Usage
Emissions
Waste
Workforce Diversity
Training & Development
Workplace Practices
Supply Chain Responsibility
Privacy & Confidentiality
Anti-Corruption
Responsible Gaming
Community Involvement
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Employment and Labor Practices
Our talented and dedicated employees play an integral role in our overall success. In recognition of
the importance of our employees to our business, we place great emphasis on creating a collegiate
and conducive environment for our employees to excel and advance. Our desire is to have our
employees achieve their highest potential, both as professionals and as individuals. To this end, our
senior management is committed to providing the highest level of compassionate leadership.
We respect and adhere to all applicable
employment and labor related laws and
regulations. In 2016, there were no incidents
of non-compliance or material grievances
confirmed in relation to employment and
labor laws and regulations that have a
significant impact on us. We also adhere
to laws and regulations that relate to
the prevention of child and forced labor.
There have not been any actual or alleged
incidents of non-compliance in connection
with laws preventing child and forced labor
in the history of our operations.
OUR CORE VALUES
• Care about everyone and everything
• Show never-ending attention to detail
• Take responsibility; don’t leave it to others
• Always strive to be better
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Employment and Labor Practices (continued)
Employment
In conjunction with the employment contracts maintained with employees, we have established
policies and practices in place to govern the terms of employment, including with regard to
compensation, overtime compensation (if applicable), dismissal or termination, working hours and
rest periods. Upon joining us, employees participate in an orientation program and are provided
with a Team Member Guidebook containing information about our superior service standards, core
values, policies and practices, rules and regulations and other relevant information.
Benefits and Welfare
Certain benefits our employees may enjoy are highlighted below:
• Eligibility for matching contributions from us to the employee’s provident fund account.
• Eligibility for share awards under our employee ownership scheme, which is further described
on pages 81 to 83 of this Annual Report.
• Discretionary performance bonuses.
• Coverage under a comprehensive medical and dental plan.
• Access to an in-house medical center.
• Potential top-up insurance coverage for the employee or their family at a competitive rate.
• Work-shift meals are provided in our celebrated employee dining room.
• Discounts and special offers through our Employee Privilege Program at participating vendors
in Macau.
We also offer an Employee Assistance Program. Under this program, employees experiencing
personal issues affecting work performance, family or other aspects of life may seek free confidential
counseling services provided by an independent and reputable holistic health center. The counseling
sessions are provided through online messenger, a toll-free hotline or in person at the election of the
employee.
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Employment and Labor Practices (continued)
Employment (continued)
Benefits and Welfare (continued)
We also encourage our employees to participate in sports, competitions, charity or community
events and other activities organized or endorsed by us such as singing contests, basketball
tournaments, soccer competitions, dragon boat races, Macau’s annual Walk for a Million charity walk
and seminars on health and wellbeing.
Recruitment, Promotion, Equal Opportunity, Diversity and Non-Discrimination
Naturally, we seek to recruit and promote the most competent, reliable and suitable candidates for
every role. When a position becomes available, we prefer to promote from within (where possible)
before expanding our search outside. Our recruitment and promotion practices adhere to the Macau
government’s initiatives.
We are also committed to equal opportunity for employment, advancement and training to qualified
individuals regardless of race, color, religion, gender, age, national origin, mental or physical
disability, marital status, sexual orientation and pregnancy. Over 30 nationalities are represented by
our employees.
Certain recruitment programs and activities in 2016 are highlighted below:
• Frequent career days and fairs are held at Wynn Macau, Wynn Palace and at other off-site
locations.
• Participation in career fairs organized by various tertiary education institutes in Macau.
• Collaboration with various secondary and tertiary education institutes to provide internship
programs to local students.
• Providing career exploratory activities and learning opportunities to secondary and tertiary
school students who wish to join the hospitality industry.
• The development of a Career Advancement Program to accelerate fresh graduates’
preparedness into supervisory roles in Front Desk Services and Housekeeping divisions.
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Employment and Labor Practices (continued)
Employment (continued)
Employee Retention
We celebrated Wynn Macau’s 10th Anniversary in 2016. Over one third of our original pre-opening
team employees were with us to celebrate this milestone. We hosted a special event as a gesture of
our gratitude to, and in honor of more than 2,200 employees for their decade of loyal service.
Dismissal
We have established policies and practices relating to employee dismissal and discipline. One of the
key objectives for such policies and practices is to ensure that such matters are handled in a fair,
confidential, lawful and non-discriminatory manner.
Health and Safety
We have practices and guidelines in place that help us ensure that our employees have a
safe working environment and are adequately protected from any occupational hazards that
may exist. The code of personal conduct that our employees adhere to sets out the expected
standard of conduct in all areas, including with respect to health and safety matters. Our long-
established Security department-led Health and Safety Committee, composed of a cross-section
of management, meets regularly to review and make decisions on the adequacy of our health and
safety related practices and guidelines. We also promote awareness of health and safety issues
through a variety of communication channels, including our intranet “The Wire”, posters in back-of-
house areas, activity workshops and seminars.
We respect and adhere to all applicable health and safety related laws and regulations. In 2016,
there were no major incidents of non-compliance or grievances confirmed in relation to health and
safety laws and regulations that have a significant impact on us.
Development and Training
Our Learning and Advancement department is dedicated to facilitating our mission of nurturing
and enriching the lives of our employees by providing training and learning programs and other
opportunities for personal and professional advancement. In addition to providing training
in fundamental skills and in the areas of service, leadership and wellbeing, our Learning and
Advancement team also seeks to inspire, challenge and coach our employees to help them
accomplish their career aspirations.
In 2007, we established the Wynn Academy, which offers innovative and tailor-made programs to
assess and harness the potential growth of our employees. In 2010, we launched the Food and
Beverage Academy, which proactively trains employees who want to excel in the food and beverage
industry.
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Employment and Labor Practices (continued)
Development and Training (continued)
As part of our culture, our employees are encouraged to share their experiences of the wonderful
things that happen at the workplace. In 2014, we launched the Wynn Stories Program to share Wynn
Stories. Our stories celebrate “heroes” who excel at living and breathing our core values. We have
developed convenient ways for our employees to submit their Wynn Stories, which are shared on our
intranet ‘The WIRE’, Story Cards, and in-person through Story Champions.
We have the Star Program in place to promote and support our employees in their pursuit of
continued excellence and development. Each month, employees who perform exceptionally well
are nominated to be Star Nominees. The Star Nominees are rewarded with gifts, recognition and a
special luncheon in their honor and the Star Winner is congratulated with special recognition as the
Star of the Month.
Separately, Diamond Awards are awarded each quarter to outstanding supervisors and managers
who show exceptional leadership talent under the Diamond Award Program. We also award
Certificates of Achievement to employees for their dedication and exemplary service under the
Certificate of Achievement Program as a gesture of our appreciation of the special accomplishment.
Listed below are highlights for 2016 from our Learning and Advancement team:
• Approximately 20,000 hours of skills training were provided to our employees.
• More than 140 service improvement training sessions were organized.
• More than 16,500 learning hours were completed in our e-Learning Lab.
• A number of employees completed one-year Career Advancement Programs and gained
management positions in Hotel Operations and Food and Beverage.
• A number of pit managers and supervisors were fully sponsored for Gaming Diploma Programs
at the University of Macau.
• Sixteen Personal Enrichment Programs provided nearly 400 hours of learning.
We make a concerted effort to recruit Macau citizens. As a responsible employer, and also in line
with the government’s mandate to accelerate the development of the local workforce, we invest in
developing our local talent to help them rise to management positions. Since opening in 2006, our
percentage of local talent management has increased by 17.8%.
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SOCIAL (CONTINUED)
Operating Practices
Supply Chain Management
We have developed relationships with an extensive network of suppliers in an effort to ensure that
we satisfy our procurement needs on competitive terms that meet our quality standards. We have
established an approval process for our suppliers. Information about the supplier is collected and
presented to the relevant departments and senior management for consideration and approval. The
Procurement team works with prospective suppliers to gain an understanding about their business
practices and our Corporate Investigations department conducts additional due diligence as deemed
appropriate in each given case.
A significant proportion of our suppliers are local suppliers from Macau or Hong Kong, which
has helped us minimize our environmental impact in various ways. We also support the Macau
government’s initiatives to promote the cultivation and development of local small and medium
enterprises (“SMEs”), as we recognize that locally owned SMEs play a crucial role in both boosting
and diversifying Macau’s economy and ultimately to pursue a mutually beneficial business
partnership for both us and the SMEs. We actively seek qualified locally owned enterprises that can
provide competitive and high-quality products and services, and aim to find opportunities to assist
in the development and competitiveness of local SMEs through instruction, mentoring, and other
outreach activities.
Product Responsibility
We have policies, practices and strict standards to ensure that our products and services meet our
quality standards. In 2016, there were no confirmed material incidents of non-compliance with any
material laws and regulations concerning the provision of our products or services, including but
not limited to, health and safety, product and service information, marketing communications and
advertising, and privacy matters.
Responsible Gaming
We recognize the importance of responsible gaming and we are committed to supporting the Macau
government’s responsible gaming initiatives. As a result, we work closely with the Macau Gaming
Inspection and Coordination Bureau, the Macau Social Welfare Bureau, the Institute for the Study of
Commercial Gaming of the University of Macau and non-governmental organizations to formulate
and implement our best practices for promoting responsible gaming. We promote responsible
gaming in a variety of ways, including:
• Maintaining a Responsible Gaming Kiosk at Wynn Macau and Wynn Palace to provide a
convenient and comprehensive way for our guests to access information about responsible
gaming.
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Operating Practices (continued)
Product Responsibility (continued)
Responsible Gaming (continued)
• Posting written materials in gaming and cage areas with our responsible gaming commitments
and information of responsible gaming counseling services.
• Providing our employees with training on responsible gaming as part of their orientation and
requiring mandatory refresher training to be completed by our employees periodically.
• Providing in-depth training for a responsible gaming team that is formed by dedicated
representatives of each involved department.
• Placing responsible gaming posters at a designated area of the back of house.
• Assisting our customers to obtain information about responsible gaming.
• Providing counseling services to affected employees.
• Working together with non-governmental organizations to promote responsible gaming, such
as having responsible gaming road shows at the back of house area regularly.
Anti-Corruption
We have extensive policies, procedures and practices to ensure that our business operations
comply with all relevant laws and regulations with respect to anti-corruption, anti-money laundering
(“AML”), extortion, fraud and combating the financing of terrorism (“CFT”). It is our policy to
conduct business ethically to prohibit the bribery of government officials in connection with the
conduct of our business. We conduct background checks on all prospective employees prior to their
employment. Our employees are also required to adhere to our Code of Conduct and Ethics, which
requires, among other things, that they act with integrity and honesty.
Our senior management works closely with relevant departments such as Legal, Finance,
Compliance, Security and Learning and Advancement to ensure substantial and up to date training
on compliance and regulatory matters (including anti-corruption, AML and CFT) is provided to our
employees. The work of our Board, the Committees of the Board and the Internal Audit department
as described in the Corporate Governance Report of this Annual Report also contribute to our
compliance efforts.
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SOCIAL (CONTINUED)
Anti-Corruption (continued)
Our Compliance Committee, which was established before our operations commenced in 2006
and meets regularly, oversees our compliance and regulatory related programs. We comply
with applicable record keeping and anti-corruption laws. We have also established focused sub-
committees to specifically review and manage specific compliance and regulatory matters such
as AML/know-your-client matters and CFT matters, and to examine the probity of our gaming
promoters on a regular basis. These sub-committees are comprised of relevant senior management
and employees and meet on a regular basis to ensure that our operation teams properly implement
all compliance and regulatory procedures in accordance with our own policies and applicable laws
and regulations.
An integrity hotline and dedicated email are hosted by an independent third party to facilitate the
anonymous reporting of any suspected illegal, criminal or inappropriate activity.
Community
Giving back to the community in which we operate is part of who we are. We believe that donating
our time, talents, skills and resources with compassion to worthy causes is a meaningful and effective
way of giving back to the community. We value being a part of the Macau community and cherish
the positive impact we can make on the development of Macau and its community. We frequently
engage the local Macau community through a range of activities, including volunteer work, fund-
raising activities and general dialog with community organizations. Some of our community programs
and efforts are described below.
The WE (Wynn Employee) Volunteer Team
The WE (Wynn Employee) Volunteer Team was established in 2010 as a means to harness the collective
efforts of our employees to give back to the community. Through The WE Volunteer Team, we
organize and participate in a wide range of events and activities, with particular focus on outreach
programs concerning the elderly, children, people recovering from mental illness and vulnerable
animals. The WE Volunteer Team now has over 860 members from a variety of departments. In 2016,
The WE Volunteer Team organized and participated in over 46 community events and activities.
Education and the Community
We are dedicated to supporting the education of the people of Macau. In addition to our donations
to the University of Macau Development Foundation and other Macau educational institutions, we
sponsor scholarships in Macau universities in a bid to nurture local talents.
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Community (continued)
Charitable Giving
Each year, we donate money and goods to a wide variety of charities and non-profit organizations
that support worthy causes such as local education promotion, children’s charities, disaster relief, the
elderly and infirm, the abused, the underprivileged, the mentally or physically disabled, vulnerable
animals and those in various forms of rehabilitation. During the year ended 31 December 2016 and
2015, we contributed HK$86.7 million and HK$87.3 million in direct cash donations, respectively.
ENVIRONMENTAL
We seek to minimize our impact on the environment and natural resources by using our resources
efficiently, and by monitoring and minimizing our energy consumption, thereby reducing our
emissions. Our leadership naturally promotes the efficient use of resources, including energy,
water and paper, and encourages greener solutions in all aspects of our business provided that our
superior service standards and unrivaled guest experience aren’t compromised.
We have developed and implemented programs, both in our guest offerings and our operational
systems, to enhance the environmental sustainability of our business. Innovations that improve
efficiencies are also regularly tested and implemented at Wynn Macau and Wynn Palace. In 2016,
there were no confirmed incidents of non-compliance or grievances confirmed in relation to
environmental protection laws or regulations that have a significant impact on us.
In preparation for the 2017 Hong Kong Stock Exchange’s reporting requirements over key
performance indicators, we aim to prepare our disclosure on greenhouse gas emissions with
reference to the standards of the Greenhouse Gas Protocol. We are committed to monitoring and
minimizing our greenhouse gas emissions through many of our green initiatives.
Certain green initiatives and programs are highlighted below:
Energy and Water
• Energy and water consumption are monitored and analyzed on a regular basis to identify
opportunities for preservation.
• Energy-efficient lights, machinery, equipment and appliances are preferred and extensively
used.
• “Smart” technologies and systems using timers, motion sensors and water or electricity
restrictors have been installed and implemented to minimize energy wasted.
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ENVIRONMENTAL (CONTINUED)
Energy and Water (continued)
• Our Wynn Macau Lighting Project, as further described below.
• Water from the performance lake is reused to cool off the nearby air-conditioning system.
• We require our guest buses to satisfy the Euro IV emission standard.
• We have installed water aerators in back-of-house faucets.
• Participation in environmental campaigns such as the Macau Energy Saving Week and “Earth
Hour” organized by the World Wide Fund for Nature (WWF).
Wynn Macau Lighting Project
The recent advancements in LED and low energy fluorescent lighting technology offered us the
option of switching from incandescent lighting to LED and low energy fluorescent lighting at Wynn
Macau without compromising on our superior standards or guest experience. We studied the
opportunity and realized the significant electricity savings potential. Starting in 2016, we began the
project of replacing selected lighting and have experienced a reduction of our electricity usage as a
result.
Waste and Recycling
• We recycle paper, newspapers, magazines, cardboard, packaging materials, aluminum cans,
plastic and scrap iron through our recycling partner.
• We recycle discarded soap from our resorts through Clean the World’s soap recycling program.
Clean the World is a non-profit foundation that protects the environment and saves lives by
giving recycled soap products to people in-need to help prevent hygiene related illness.
• Environmentally friendly laundry processes using biodegradable products.
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ENVIRONMENTAL (CONTINUED)
Paper Usage
Our IT department monitors the use of paper through our printing service provider. The monthly
usage reporting is detailed by department, location and user. Several initiatives have been
implemented to limit our usage. In 2016, we implemented a card scanner and monitoring system on
the majority of our staff printers. Based on this initiative we have experienced a reduction in paper
usage. The process helps to limit the printing of unnecessary documents and promotes a more
electronic office environment.
Education, Awareness and Participation
We established The Wynn Green Team, a team of employees passionate about environmental issues
and protection, to, among other things, assist in raising awareness of environmental issues, promote
the adherence to the principle of Reducing, Reusing and Recycling and encourage the adoption of
environmentally-friendly practices. Our employees are encouraged to participate in green initiatives
and training and we are supportive of efforts to enhance our environmental sustainability.
Our green initiatives and programs have resulted in measurable improvements in energy
consumption, emissions, water use, waste generation and recycling over the years. We will continue
to improve our environmental efforts and work toward even greater sustainability.
60 Wynn Macau, Limited
Report of the Directors
The Directors present their report together with the audited financial statements for the year ended
31 December 2016.
PRINCIPAL ACTIVITIES AND SUBSIDIARIES
The Company and the Group are a leading developer, owner and operator of integrated destination
casino resorts in Macau. The Company is a holding company and our main operating subsidiary,
WRM, owns and operates the destination casino resorts “Wynn Macau” in the Macau peninsula and
“Wynn Palace” in the Cotai area of Macau. A list of the Company’s subsidiaries, together with their
places of incorporation, principal activities and particulars of their issued share/registered capital, is
set out in note 1 to the Financial Statements.
FINANCIAL RESULTS
The results of the Group for the year ended 31 December 2016 are set out in the consolidated
statement of profit or loss and other comprehensive income on page 118 to page 119 of this Annual
Report. The financial highlights for the Group for the most recent five years are set out on page 207
of this Annual Report.
BUSINESS REVIEW
The business review of the Group for the year ended 31 December 2016 is set out in the
Management Discussion and Analysis and the Environmental, Social and Governance Report of this
Annual Report, which forms part of this report, and the paragraphs below.
Environmental Sustainability
As an enthusiastic supporter of being environmentally friendly, the Group is committed to being
environmentally responsible, all while providing superior levels of customer service at our five-star
luxury resorts. We have developed and implemented programs, both in our guest offerings and our
operational systems, to enhance the environmental sustainability of our operations. Innovations that
improve efficiencies are also regularly tested and implemented at Wynn Macau and Wynn Palace.
Further information about environmental sustainability can be found in the Environmental, Social and
Governance Report of this Annual Report.
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BUSINESS REVIEW (CONTINUED)
Compliance with Laws and Regulations
Our senior management works closely with relevant departments such as Legal, Finance,
Compliance, Security, Human Resources and Learning and Advancement to ensure that substantial
and up to date training on compliance and regulatory matters is provided to our employees.
The work of our Board, the Board committees and the Internal Audit department as described
in the Corporate Governance Report of this Annual Report also contributes to our commitment
to compliance efforts. In addition to our Compliance Committee which was established before
our operations commenced in 2006 and meets regularly, we have also established focused sub-
committees to specifically review and manage specific compliance and regulatory matters including
anti-money laundering/know-your-client matters, anti-corruption matters and to examine the probity
of our gaming promoters on a regular basis. These sub-committees are comprised of relevant senior
management and employees and meet on a regular basis.
As far as the Company is aware, we have complied, in all material respects, with all relevant laws and
regulations to which the business and operation of the Group are subject.
Relationship with our Employees
Our talented and dedicated employees collectively play an integral role in the overall success of the
Group. In recognition of the importance of our employees to our business, we place great emphasis
on creating a collegiate and conducive environment for our employees to excel and advance.
Our desire is to have our employees achieve their highest potential, both as professionals and as
individuals. To this end, the Group’s senior management is committed to providing the highest level
of compassionate leadership. As part of our culture, our employees are encouraged to share their
experiences of the wonderful things that happen at the workplace. We invest significantly in the
health and wellbeing and learning and advancement of our employees, as further described in the
Environmental, Social and Governance Report of this Annual Report.
Our employees also benefit from our employee ownership scheme, which is described on pages
81 to 83 of this Annual Report. As of 31 December 2016, we had approximately 11,400 full-time
equivalent employees.
62 Wynn Macau, Limited
Report of the Directors
BUSINESS REVIEW (CONTINUED)
Relationship with the Community
Giving back to the community in which we operate is part of who we are. We believe that donating
our time, talents, skills and resources with compassion to worthy causes and dedicating ourselves
for the benefit of those in need are meaningful and effective ways of giving back to the community.
We value being a part of the Macau community and cherish the positive impact we can make on
the development of Macau and its community. Some of our community programs and efforts are
described in the Environmental, Social and Governance Report of this Annual Report.
Donations
Each year, we donate money and goods to a wide variety of charities and non-profit organizations
that support worthy causes such as local education promotion, children’s charities, disaster relief, the
elderly and infirm, the abused, the underprivileged, the mentally or physically disabled, vulnerable
animals and those in various forms of rehabilitation. During the year ended 31 December 2016, we
contributed HK$86.7 million in direct cash donations.
Relationship with our Customers
The Group believes in providing all our customers with unique and superior customer experiences
in all our offerings at our integrated luxury resort. Our gaming and non-gaming offerings are
thoughtfully designed, tailored and refined for the enjoyment of our discerning customers, who
can also expect the highest standard of service from our experienced and dedicated employees. In
our continuous efforts to supplement our knowledge and understanding of our customers’ needs,
preferences, expectations and desires, we gather customer feedback through a variety of methods
including, but not limited to, direct interaction and the use of dedicated hotlines, inquiry email and
guest comment cards. Further information about our relationship with our customers can be found
in the section headed “Management Discussion and Analysis – Factors Affecting our Results of
Operations and Financial Condition” of this Annual Report.
Relationship with our Gaming Promoters
The reputation and integrity of gaming promoters with whom we engage in business activities
with are important to our own reputation and ability to continue to operate in compliance with the
Concession Agreement and Macau gaming laws. For this reason, we frequently gather information
and intelligence about, and review our relationship with, each of our gaming promoters.
Further information about our relationship with our gaming promoters can be found in the section
headed “Management Discussion and Analysis – Factors Affecting our Results of Operations and
Financial Condition — Gaming Promoters” of this Annual Report.
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BUSINESS REVIEW (CONTINUED)
Relationship with our Suppliers
We have developed relationships with an extensive network of suppliers in an effort to ensure that
we satisfy our procurement needs on competitive terms that meet our high standards. We support
the Macau government’s initiatives to promote the cultivation and development of local small and
medium enterprises (“SMEs”) as we recognize that locally owned SMEs play a crucial role in both
boosting and diversifying Macau’s economy and ultimately to pursue a mutually beneficial business
partnership for both us and suppliers. We actively seek qualified locally owned enterprises that can
provide competitive and high-quality products and services, and aim to find opportunities to assist
in the development and competitiveness of local SMEs through instruction, mentoring, and other
outreach activities.
RESERVES
Details of the movements in the reserves of the Company and reserves available for distribution
to Shareholders as at 31 December 2016 are set out in note 30 to the Financial Statements. The
distributable reserves of the Company as at 31 December 2016 are HK$9.9 billion. Movements in the
reserves of the Group are reflected in the consolidated statement of changes in equity.
DIVIDENDS
On 30 March 2016, the Board declared a special dividend of HK$0.60 per Share which was paid on
27 April 2016.
The Board has recommended that a final dividend of HK$0.42 per Share in respect of the year ended
31 December 2016, which is subject to Shareholders’ approval at the forthcoming annual general
meeting of the Company.
SHARE CAPITAL
Details of the movements in share capital of the Company are set out in note 21 to the Financial
Statements.
64 Wynn Macau, Limited
Report of the Directors
DIRECTORS
Directors during the Year Ended 31 December 2016
Executive Directors:
Mr. Stephen A. Wynn (also our Chairman and Chief Executive Officer)
Mr. Ian Michael Coughlan
Mr. Gamal Mohammed Abdelaziz (resigned from the Board effective 30 September 2016)
Ms. Linda Chen
Non-executive Directors:
Mr. Matthew O. Maddox
Ms. Kim Sinatra (appointed on 1 April 2017)
Independent non-executive Directors:
Dr. Allan Zeman (also our Vice-chairman)
Mr. Jeffrey Kin-fung Lam
Mr. Bruce Rockowitz
Mr. Nicholas Sallnow-Smith
Re-election of Directors
In accordance with article 17.18 of the Company’s articles of association, one third of our Board will
retire from office by rotation at the forthcoming annual general meeting. The three directors who
will retire by rotation are Mr. Ian Michael Coughlan, an executive Director, and Dr. Allan Zeman
and Mr. Nicholas Sallnow-Smith, each an independent non-executive Director. All retiring Directors,
being eligible, will offer themselves for re-election at the forthcoming annual general meeting. In
accordance with article 17.2 of the Company’s articles of association, Ms. Kim Sinatra having been
appointed by the Board as a non-executive Director effective from 1 April 2017 and being eligible,
will offer herself for re-election at the forthcoming annual general meeting.
Directors’ Service Contracts
None of the Directors proposed for re-election at the forthcoming annual general meeting has
a service contract with the Company which is not determinable by the Company within one year
without payment of compensation, other than statutory compensation.
Directors’ Emoluments
Details of the remuneration of the Directors are set out in note 25 to the Financial Statements. None
of the Directors waived or agreed to waive any emoluments during the year ended 31 December
2016.
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DIRECTORS (CONTINUED)
Directors’ Interests in Transactions, Arrangements or Contracts and Competing Businesses
To the knowledge of the Board, there were no transactions, arrangements or contracts of
significance in relation to the Group’s business subsisting at the end of the year or during the year
ended 31 December 2016 in which any member of the Group was a party and in which a Director or
his/her connected entity, was materially interested.
To the knowledge of the Board, none of our Directors had any interest in any business in Macau
which competed with our Company’s business during the year ended 31 December 2016.
CONNECTED TRANSACTIONS
During the year ended 31 December 2016, the Group engaged in certain transactions with Wynn
Resorts, Limited (its controlling shareholder) and Wynn Resorts, Limited’s subsidiaries (excluding
the Group) (together, the “WRL Group”) which constitute connected transactions under the Listing
Rules.
Wynn Resorts, Limited is considered a “connected person” under the Listing Rules by virtue of it
being the holding company (an “associate” as defined in the Listing Rules) of WM Cayman Holdings
Limited I (which, holding more than 10% of the Company’s share capital, is a substantial shareholder
and “connected person” of the Group). Pursuant to the Listing Rules, any member of the WRL Group
is also considered an “associate” of WM Cayman Holdings Limited I and a “connected person” of
the Group. Any transaction between the Group and the WRL Group is accordingly a connected
transaction.
Purchase of “Tulips” sculpture and “Amphora III”
On 29 June 2016, WRM entered into a purchase agreement with Wynn Design & Development
to purchase “Tulips” and “Amphora III” for US$33,682,500 (approximately HK$262.3 million) and
US$103,945 (approximately HK$0.8 million), respectively. The purchase price was funded from
available cash and internal resources of the Group. The purchase of the artworks was completed on
29 June 2016.
“Tulips” is a sculptural masterpiece created by renowned artists Jeff Koons. “Amphora III” is a
colorful, impressive clay vessel crafted by late ceramist Viola Frey. Both “Tulips” and “Amphora
III” are currently displayed at Wynn Palace for the enjoyment of our guests and visitors. For further
information, please refer to the Company’s announcement made on 29 June 2016.
66 Wynn Macau, Limited
Report of the Directors
CONNECTED TRANSACTIONS (CONTINUED)
Continuing Connected Transactions
During the year ended 31 December 2016, the following non-exempt connected transactions were
in effect between the Group and the WRL Group, such transactions being subject to disclosure
requirements (including disclosure in this Annual Report) under the Listing Rules:
Worldwide Wynn Employment Framework Agreements
Nature and purpose of transaction. On 19 September 2009, the Company and WRM each entered
into an employment framework agreement with Worldwide Wynn, a wholly-owned subsidiary of
Wynn Resorts, Limited, under which Worldwide Wynn provides certain U.S. residents based in or
to be based in Macau (“U.S. Resident Staff”) to the Group through secondment arrangements. The
U.S. Resident Staff have formal employment arrangements with the Group through the secondment
arrangements. The secondment arrangements were put in place to ensure that each U.S. Resident
Staff is, in addition to the provision of his or her services to the Group, employed by a U.S.-
incorporated entity in order to allow such person to continue to enjoy certain benefits relating to
pension, personal income tax and health and life insurance. The secondment arrangements benefit
the Group by allowing the Group to attract and retain U.S. Resident Staff.
Pricing. Under the employment framework agreements, Worldwide Wynn is to be reimbursed
for the cost of the secondments (including salaries and benefits of the seconded employee) and is
entitled to receive a fee of 5% of the aggregate cost of the secondment of the employee during the
secondment period, for its role in the arrangement. Approximately HK$241.5 million was charged to
the Group by Worldwide Wynn under this arrangement during the year ended 31 December 2016.
Term. The employment framework agreements had an initial term which expired on 31 December
2011 and were automatically extended for a subsequent period of three years from 1 January
2012 to 31 December 2014. Pursuant to the terms therein, unless terminated by either party to
the agreements by giving one month’s written notice in advance to the other party, and subject to
compliance with the Listing Rules requirements, or, alternatively, any waivers obtained from strict
compliance with such requirements, upon expiration of the initial term or subsequent renewal term,
the agreements are automatically renewed for a further term of three years each time (or for such
other period as may be permitted under the Listing Rules). In compliance with the Listing Rules, the
Company announced on 4 December 2014 the renewal of these agreements for a further term of
three years from 1 January 2015 to 31 December 2017 and the respective annual caps set for the
years ended 31 December 2015 and 2016 and the year ending 31 December 2017.
67Annual Report 2016
Report of the Directors
CONNECTED TRANSACTIONS (CONTINUED)
Continuing Connected Transactions (continued)
Marketing and Secondment Services Framework Agreements
Nature and purpose of transaction. On 19 September 2009, the Company and WRM each entered
into a marketing and secondment service framework agreement with WIML, an affiliate of Wynn
Resorts, Limited. Pursuant to the agreements, WIML will (1) provide, directly and through its
authorized agents, marketing services to WRM, including the development, implementation and
operation of an international promotional and marketing plan for WRM’s casino resorts, and (2)
provide certain non-Macau residents based in or to be based in Macau (“Foreign Resident Staff”)
to the Group through secondment arrangements. Marketing efforts conducted through a uniform
marketing plan for all casino resorts bearing the “WYNN” brand name ensure that a consistent
image and style is and will be adopted globally. The secondment arrangements were put in place
to ensure that each Foreign Resident Staff is, in addition to the provision of his or her services to
the Group, employed by an appropriate offshore entity in order to allow such person to continue to
enjoy certain benefits relating to pension, personal income tax and health and life insurance.
Pricing. Under the marketing and secondment service framework agreements, the fee for the
services provided by WIML is based on a cost and expense reimbursement basis plus a fee of
5% of the aggregate costs and expenses incurred by WIML in the performance of its services.
Approximately HK$27.6 million was charged to the Group by WIML under this arrangement during
the year ended 31 December 2016.
Term. The marketing and secondment services framework agreements had an initial term which
expired on 31 December 2011 and were automatically extended for a subsequent period of
three years from 1 January 2012 to 31 December 2014. Pursuant to the terms therein, unless
terminated by either party to the agreements by giving one month’s written notice in advance to
the other party, and subject to compliance with the Listing Rules requirements, or, alternatively,
any waivers obtained from strict compliance with such requirements, upon expiration of the initial
term or subsequent renewal term, the agreements are automatically renewed for a further term
of three years each time (or for such other period as may be permitted under the Listing Rules). In
compliance with the Listing Rules, the Company announced on 4 December 2014 the renewal of
these agreements for a further term of three years from 1 January 2015 to 31 December 2017 and
the respective annual caps set for the years ended 31 December 2015 and 2016 and the year ending
31 December 2017.
68 Wynn Macau, Limited
Report of the Directors
CONNECTED TRANSACTIONS (CONTINUED)
Continuing Connected Transactions (continued)
Design Services Framework Agreement
Nature and purpose of transaction. On 19 September 2009, WRM entered into a design services
framework agreement with Wynn Design & Development, a subsidiary of Wynn Resorts, Limited,
under which Wynn Design & Development would provide certain design services for WRM’s projects
in Macau, including the development, design and construction oversight of Wynn Palace and
enhancement and renovation works at Wynn Macau and Encore.
Pricing. Under the design services framework agreement, the fee for the services provided by
Wynn Design & Development is based on a cost and expense reimbursement basis incurred by
Wynn Design & Development for the provision of its service. Approximately HK$19.5 million was
charged to WRM by Wynn Design & Development under this arrangement during the year ended 31
December 2016.
Term. The design services framework agreement had an initial term which expired on 31 December
2011 and was automatically extended for a subsequent period of three years from 1 January 2012
to 31 December 2014. Pursuant to the terms therein, unless terminated by either party to the
agreements by giving one month’s written notice in advance to the other party, and subject to
compliance with the Listing Rules requirements, or, alternatively, any waivers obtained from strict
compliance with such requirements, upon expiration of the initial term or subsequent renewal term,
the agreement is automatically renewed for a further term of three years each time (or for such
other period as may be permitted under the Listing Rules). In compliance with the Listing Rules, the
Company announced on 4 December 2014 the renewal of the agreement for a further term of three
years from 1 January 2015 to 31 December 2017 and the respective annual caps set for the years
ended 31 December 2015 and 2016 and the year ending 31 December 2017.
69Annual Report 2016
Report of the Directors
CONNECTED TRANSACTIONS (CONTINUED)
Continuing Connected Transactions (continued)
Corporate Allocation Agreements
Nature and purpose of transaction. On 19 September 2009, the Company and WRM entered into
a corporate allocation agreement and an amended and restated corporate allocation agreement,
respectively, with Wynn Resorts, Limited. Under the respective agreements, Wynn Resorts,
Limited: (1) provides the Company and WRM with access to its employees in a number of non-
gaming departments, including corporate treasury, legal, financial accounting and audit, corporate
risk management and information systems, for the purposes of ensuring that the Company and
WRM each complies with the reporting, legal, tax, accounting and disclosure requirements that
are applicable to NASDAQ-listed Wynn Resorts, Limited and Wynn Resorts, Limited’s subsidiaries
(including the Group), and (2) allows the Company and WRM to use aircraft assets owned by Wynn
Resorts, Limited or Wynn Resorts, Limited’s subsidiaries (other than the Group). Similarly, the
Company and WRM had reciprocal arrangements to allow Wynn Resorts, Limited or Wynn Resorts,
Limited’s subsidiaries (other than the Group) to use any aircraft assets that they could own in the
future and to have access to the services of any of its respective employees provided that such
services do not materially interfere with such employee’s obligations to and responsibilities with the
Group. No aircraft assets are currently owned by the Company or WRM.
Pricing. Under the corporate allocation agreements, the annual fee for the services (other than
for the use of the aircraft assets) provided by Wynn Resorts, Limited is based on an allocation of
the actual proportion of Wynn Resorts, Limited’s annual corporate departments’ costs (including
salaries and benefits for such employees during the period in which such services are rendered)
and overhead expense related to the provision of the services, and in any event, such annual fee
shall not exceed 50% of the aggregate annual corporate departments’ costs and overhead expense
incurred by Wynn Resorts, Limited during any financial year. For services provided by employees of
the Company and WRM, Wynn Resorts, Limited shall pay for the services based on a cost (including
salaries and benefits for such employees during the period when such services are being rendered)
and expense reimbursement basis.
Approximately HK$129.7 million was charged to WRM by Wynn Resorts, Limited during the year
ended 31 December 2016 for Wynn Resorts, Limited’s services. Approximately HK$23.7 million
was charged to the Group by Wynn Resorts, Limited during the year ended 31 December 2016
for the use of aircraft assets. For the same periods, Wynn Resorts, Limited or Wynn Resorts,
Limited’s subsidiaries (other than the Group) did not require WRM’s services under the reciprocal
arrangement.
70 Wynn Macau, Limited
Report of the Directors
CONNECTED TRANSACTIONS (CONTINUED)
Continuing Connected Transactions (continued)
Corporate Allocation Agreements (continued)
Term. The corporate allocation agreements entered into by each of the Company and WRM with
Wynn Resorts, Limited expire on 31 December 2017. A waiver from the announcement requirements,
as required under the Listing Rules, for the initial term of the agreements, which will expire on 31
December 2017, has been granted by the Hong Kong Stock Exchange. Subject to compliance with
the Listing Rules requirements or, alternatively, any waivers obtained from strict compliance with
such requirements, upon expiration of the initial term or subsequent renewal term, each agreement
is automatically renewed for a three-year term (or such other period permitted under the Listing
Rules).
Intellectual Property License Agreements
Nature and purpose of transaction. On 19 September 2009, the Company and WRM entered
into an intellectual property license agreement and an amended and restated intellectual property
license agreement, respectively, with Wynn Resorts, Limited and Wynn Resorts Holdings, LLC, a
subsidiary of Wynn Resorts, Limited. Under the respective agreements, Wynn Resorts, Limited and
Wynn Resorts Holdings, LLC grant the Company and WRM the license to use certain intellectual
property, including certain trademarks, domain names, “WYNN” related trademarks, copyrights
and service marks in connection with a variety of goods and services. These marks include “WYNN
MACAU”, “ENCORE” and “WYNN PALACE” as well as trademarks of the Chinese characters
representing “WYNN.”
Pricing. Under the intellectual property license agreements, the license fee payable to Wynn
Resorts Holdings, LLC equals the greater of (1) 3% of the intellectual property gross monthly
revenues, or (2) US$1.5 million (approximately HK$11.6 million) per month. License fees payable to
Wynn Resorts Holdings, LLC were calculated based on 3% of intellectual property gross monthly
revenues given such revenues justified payments in excess of US$1.5 million (approximately HK$11.6
million) per month. Gross revenues for the year ended 31 December 2016 were HK$28.2 billion
and approximately HK$846.5 million was charged by Wynn Resorts, Limited to WRM under this
arrangement during the year ended 31 December 2016.
71Annual Report 2016
Report of the Directors
CONNECTED TRANSACTIONS (CONTINUED)
Continuing Connected Transactions (continued)
Intellectual Property License Agreements (continued)
Term. The intellectual property license agreements entered into by each of the Company and WRM
with Wynn Resorts, Limited and Wynn Resorts Holdings, LLC have a perpetual term but may be
terminated in the following circumstances:
(1) Wynn Resorts, Limited ceases to hold or have the right to exercise more than 50% of the voting
rights to the Shares in the Company or WRM;
(2) there is a material breach of, or non-compliance with the terms of, the relevant intellectual
property license agreement by the Company, WRM or any relevant members of the Group that
are authorized to use the licensed intellectual property rights (“Relevant Subsidiaries”); or
(3) (I)(i) there is a suspension or revocation of privileged gaming licenses issued by governmental
authorities, or (ii) Wynn Resorts Holdings, LLC, in good faith, deems that the acts of the
Company, WRM or any Relevant Subsidiary jeopardizes any such privileged gaming licenses or
gaming business activities of Wynn Resorts, Limited, Wynn Resorts Holdings, LLC or its affiliates
(in each case, a “Relevant Event”); and (II) the Relevant Event continues for 30 consecutive days
after written notice of the occurrence of the Relevant Event has been provided to the Company,
WRM or the Relevant Subsidiaries, as the case may be. Prior written consent of the Company,
WRM or the Relevant Subsidiaries, as the case may be, is required if Wynn Resorts, Limited
or Wynn Resorts Holdings, LLC seeks to terminate any agreement that grants Wynn Resorts
Holdings, LLC the intellectual property rights.
A waiver from the announcement and independent shareholders’ approval requirements, as
required under the Listing Rules, for the initial term of the agreements, which will expire on 26
June 2022, has been granted by the Hong Kong Stock Exchange.
72 Wynn Macau, Limited
Report of the Directors
CONNECTED TRANSACTIONS (CONTINUED)
Continuing Connected Transactions (continued)
Summary
The aggregate amount paid by the Group during the year ended 31 December 2016, the annual
caps for the year ended 31 December 2016, and the annual caps for the year ending 31 December
2017, in respect of the disclosable continuing connected transactions are set out in detail below.
Annual Cap Tables
Discloseable continuing
connected transactions
Aggregate
amount paid to
counter party for
the year ended
31 December
Annual Cap for
the year ended
31 December
Annual Cap for
the year ending
31 December(1)
2016 2016 2017
HK$ US$ HK$ US$ HK$ US$
(in millions)
1. Worldwide Wynn Employment
Framework Agreements 241.5 31.1 246.5 31.8 254.7 32.8
2. Marketing and Secondment Services
Framework Agreements 27.6 3.6 55.8 7.2 59.8 7.7
3. Design Services Framework
Agreement 19.5 2.5 177.7 22.9 171.9 22.1
Note:
(1) The applicable annual cap will be the higher of the US$ limit and the HK$ limit.
73Annual Report 2016
Report of the Directors
CONNECTED TRANSACTIONS (CONTINUED)
Continuing Connected Transactions (continued)
Summary (continued)
Annual Cap Tables (continued)
Disclosable continuing
connected transactions
Aggregate
amount paid to
counter party for
the year ended
31 December
Annual Cap for
the year ended
31 December
Annual Cap for
the year ending
31 December(1)
2016 2016 2017
HK$ US$ HK$ US$ HK$ US$
(in millions)
4. Corporate Allocation Agreements
* Wynn Resorts, Limited
providing the services to us 153.4 19.8 263.8 34.0 276.8 35.7
* Our Group providing the
services to Wynn Resorts,
Limited — — 18.6 2.4 18.6 2.4
5. Intellectual Property License
Agreements
846.5 109.1 846.5 109.1
The higher of
(1) 3% of the
intellectual
property
gross monthly
revenues; or
(2) US$1.5
million per
month.
Note:
(1) The applicable annual cap will be the higher of the US$ limit and the HK$ limit.
Under Chapter 14A of the Listing Rules, the above transactions constitute non-exempt continuing
connected transactions of the Group and require disclosure in the annual report of the Company.
74 Wynn Macau, Limited
Report of the Directors
CONNECTED TRANSACTIONS (CONTINUED)
Continuing Connected Transactions (continued)
Summary (continued)
Ernst & Young, the Company’s auditor, were engaged to report on the Group’s continuing
connected transactions in accordance with Hong Kong Standard on Assurance Engagements
3000 (Revised) Assurance Engagements Other Than Audits or Reviews of Historical Financial
Information and with reference to Practice Note 740 Auditor’s Letter on Continuing Connected
Transactions under the Hong Kong Listing Rules issued by the Hong Kong Institute of Certified
Public Accountants. Ernst & Young have issued their unqualified letter containing their findings and
conclusions in respect of the continuing connected transactions disclosed above by the Group in
accordance with Rule 14A.56 of the Listing Rules. A copy of the auditor’s letter has been provided
by the Company to the Hong Kong Stock Exchange. In addition, all of the non-exempt continuing
connected transactions of the Company disclosed herein constitute related party transactions set out
in note 27 to the Financial Statements.
The independent non-executive Directors of the Company have reviewed these transactions and the
independent auditor’s report, and confirmed that the non-exempt continuing connected transactions
have been entered into:
(a) in the ordinary and usual course of business of the Company;
(b) on normal commercial terms or better; and
(c) according to the relevant agreements on terms that are fair and reasonable and in the interests
of the Shareholders of the Company as a whole.
The Directors confirm that the Company has complied with the requirements of Chapter 14A of the
Listing Rules in respect of all of its continuing connected transactions.
75Annual Report 2016
Report of the Directors
MANAGEMENT CONTRACTS
No contracts concerning the management and administration of the whole or any substantial part of
the business of the Company were entered into or existed for the year ended 31 December 2016.
MAJOR CLIENTS AND SUPPLIERS
Our clients are individual players and our five largest clients, together, generate substantially less
than 30% of the Group’s total operating revenues for the year ended 31 December 2016.
We depend on our suppliers to provide us with products and services such as security and
surveillance systems, retail goods, gaming equipment and accessories, ferry tickets, food and
beverage products and construction and other administrative services. In 2016, our five largest
suppliers were Leighton Contractors (Asia) Limited, Companhia de Electricidade de Macau — CEM,
S.A., CTM, Companhia De Engenharia De Construcao Novo Weng Seng, Limitada and Aristocrat
(Macau) Pty Ltd which accounted for approximately 41%, 4%, 3%, 2%, and 2% of our total purchases,
respectively.
Save as disclosed above, to the knowledge of the Board, none of our Directors, their respective
associates or any of our Shareholders (which to the knowledge of the Directors own more than 5% of
the Company’s issued share capital) had any material interest in any of our top five suppliers in 2016.
76 Wynn Macau, Limited
Report of the Directors
DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN THE
SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY AND ANY
ASSOCIATED CORPORATION
As at 31 December 2016, the interests and short positions of each Director and the chief executive
of the Company (being Mr. Stephen A. Wynn) in the Shares, underlying Shares and debentures of
the Company or any of its associated corporations within the meaning of Part XV of the SFO which
(a) were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to
Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which the Director
or chief executive is taken or deemed to have under such provisions of the SFO); (b) were required,
pursuant to section 352 of the SFO, to be entered in the register maintained by the Company
referred to therein; (c) were required, pursuant to the Model Code contained in the Listing Rules, to
be notified to the Company and the Hong Kong Stock Exchange; or (d) were disclosed according to
the knowledge of the Directors of the Company were as follows:
(a) Interests in the Company
Name of Director
Personal
Interest
Family
Interest
Corporate
Interest
Other
Interest
Total
Number
of Shares
Approximate
Percentage of
Shareholding
Allan Zeman 1,701,000
(Long Position)
(Note 1)
— — — 1,701,000
(Long Position)
(Note 1)
—
Nicholas Sallnow-Smith — 10,000
(Long Position)
(Note 2)
— 276,000
(Long Position)
(Note 2)
286,000
(Long Position)
(Note 2)
0.01%
1,425,000
(Long Position)
(Note 2)
— — — 1,425,000
(Long Position)
(Note 2)
—
Bruce Rockowitz 238,000
(Long Position)
(Note 3)
— — — 238,000
(Long Position)
(Note 3)
0.00%
1,463,000
(Long Position)
(Note 3)
— — — 1,463,000
(Long Position)
(Note 3)
—
Jeffrey Kin-fung Lam 1,701,000
(Long Position)
(Note 4)
— — — 1,701,000
(Long Position)
(Note 4)
—
77Annual Report 2016
Report of the Directors
DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN THE
SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY AND ANY
ASSOCIATED CORPORATION (CONTINUED)
(a) Interests in the Company (continued)
Notes:
(1) Pursuant to the Company’s share option scheme, Dr. Allan Zeman holds share options for 1,701,000 Shares, of
which share options for 749,800 Shares have vested as at 30 March 2017.
(2) Mr. Nicholas Sallnow-Smith is deemed to hold 276,000 Shares jointly with his spouse, Ms. Lora Sallnow-Smith.
Ms. Lora Sallnow-Smith was interested in 10,000 Shares. Mr. Sallnow-Smith is deemed to be interested in the
10,000 Shares held by his spouse under the SFO. Pursuant to the Company’s share option scheme, Mr. Sallnow-
Smith holds share options for 1,425,000 Shares, of which share options for 473,800 Shares have vested as at 30
March 2017.
(3) Mr. Bruce Rockowitz holds 238,000 Shares in his personal capacity. Pursuant to the Company’s share option
scheme, Mr. Rockowitz holds share options for 1,463,000 Shares, of which share options for 511,800 Shares have
vested as at 30 March 2017.
(4) Pursuant to the Company’s share option scheme, Mr. Jeffrey Kin-fung Lam holds share options for 1,701,000
Shares, of which share options for 749,800 Shares have vested as at 30 March 2017.
78 Wynn Macau, Limited
Report of the Directors
DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN THE
SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY AND ANY
ASSOCIATED CORPORATION (CONTINUED)
(b) Interests in associated corporations — Wynn Resorts, Limited
Name of Director
Personal
Interest
Family
Interest
Corporate
Interest
Other
Interest
Total
Number
of Shares
Approximate
Percentage of
Shareholding
Stephen A. Wynn — 10,500
(Long Position)
(Note 1)
— 12,000,000
(Long Position)
(Note 1)
12,010,500
(Long Position)
(Note 1)
11.80%
Ian Michael Coughlan 79,856
(Long Position)
(Note 2)
— — — 79,856
(Long Position)
(Note 2)
0.08%
50,000
(Long Position)
(Note 2)
— — — 50,000
(Long Position)
(Note 2)
—
Linda Chen 76,627
(Long Position)
(Note 3)
— — — 76,627
(Long Position)
(Note 3)
0.08%
365,000
(Long Position)
(Note 3)
— — — 365,000
(Long Position)
(Note 3)
—
Matthew O. Maddox 85,319
(Long Position)
(Note 4)
— — — 85,319
(Long Position)
(Note 4)
0.08%
325,000
(Long Position)
(Note 4)
— — — 325,000
(Long Position)
(Note 4)
—
79Annual Report 2016
Report of the Directors
DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN THE
SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY AND ANY
ASSOCIATED CORPORATION (CONTINUED)
(b) Interests in associated corporations — Wynn Resorts, Limited (continued)
Notes:
(1) Mr. Stephen A. Wynn is deemed interested in 12,000,000 shares in the common stock of Wynn Resorts, Limited
(“WRL Shares”) held by Wynn Family Limited Partnership (Delaware, U.S.A.). Mr. Wynn, in his capacity as trustee
of the Stephen A. Wynn Revocable Trust U/D/T dated 24 June 2010, is the sole manager of Wynn GP, LLC
(Delaware, U.S.A.), which is the general partner of Wynn Family Limited Partnership. Mr. Wynn’s spouse was
interested in 10,500 WRL Shares, Mr. Wynn has disclaimed his interest in these shares but is deemed to be
interested in them under the SFO. On 20 January 2017, an additional 79,800 WRL Shares were acquired by Wynn
Family Limited Partnership. Mr. Wynn was interested in approximately 11.8% of outstanding WRL Shares as at 30
March 2017.
(2) Mr. Ian Michael Coughlan held (i) 29,856 WRL Shares; (ii) 50,000 non-vested WRL Shares; and (iii) exercisable
stock options for 50,000 WRL Shares. On 20 January 2017, Mr. Coughlan was granted 12,372 vested WRL Shares
under the WRL Omnibus Plan and disposed of 780 vested WRL Shares.
(3) Ms. Linda Chen held (i) 76,627 WRL Shares; and (ii) 365,000 stock options for WRL Shares, of which share options
for 275,000 WRL Shares are exercisable. On 20 January 2017, Ms. Chen was granted 16,496 vested WRL Shares
under the WRL Omnibus Plan and disposed of 6,920 vested WRL Shares. In March 2017, Ms. Chen disposed of
30,000 WRL Shares.
(4) Mr. Matthew O. Maddox held (i) 85,319 WRL Shares; and (ii) 325,000 stock options for WRL Shares of which
share options for 235,000 WRL Shares are exercisable. On 20 January 2017, Mr. Maddox was granted 16,496
vested WRL Shares under the WRL Omnibus Plan and disposed of 6,920 vested WRL Shares. On 1 March 2017,
Mr. Maddox was granted 200,000 non-vested WRL shares.
80 Wynn Macau, Limited
Report of the Directors
SUBSTANTIAL SHAREHOLDERS’ INTERESTS AND SHORT POSITIONS IN THE SHARES
AND UNDERLYING SHARES OF THE COMPANY
As at 31 December 2016, the Company had been notified of the following substantial shareholders’
interests and short positions in the Shares and underlying Shares of the Company, which have been
recorded in the register of substantial shareholders required to be kept by the Company pursuant to
section 336 of Part XV of the SFO. These interests are in addition to those disclosed above in respect
of the Directors and chief executives of the Company.
Shares of HK$0.001 each in the Company
Name Capacity/Nature of Interest Number of Shares
Percentage of
the issued share
capital of the
Company
WM Cayman Holdings Limited I
(Note 1)
Beneficial interest 3,750,000,000
(Long Position)
72.18%
Wynn Group Asia, Inc. (Note 1) Interest of a controlled
corporation
3,750,000,000
(Long Position)
72.18%
Wynn Resorts, Limited (Note 1) Interest of a controlled
corporation
3,750,000,000
(Long Position)
72.18%
The Capital Group Companies, Inc.
(Note 2)
Interest of a controlled
corporation
310,433,232
(Long Position)
5.98%
Notes:
(1) WM Cayman Holdings Limited I is a wholly-owned subsidiary of Wynn Group Asia, Inc., which in turn is wholly-
owned by Wynn Resorts, Limited. Therefore, Wynn Group Asia, Inc. and Wynn Resorts, Limited are deemed or
taken to be interested in 3,750,000,000 Shares which are beneficially owned by WM Cayman Holdings Limited I.
(2) The Capital Group Companies, Inc. is deemed to be interested in 310,433,232 Shares, comprised of (i)
160,996,039 Shares held by a wholly-owned subsidiary, Capital Research and Management Company, and (ii)
149,437,193 Shares through Capital Group International, Inc., a wholly-owned subsidiary of Capital Research
and Management Company, which is deemed interested in 47,980,193 Shares held by Capital Guardian Trust
Company, 56,549,300 Shares held by Capital International, Inc., 7,727,100 Shares held by Capital International
Limited and 37,180,600 Shares held by Capital International Sarl, each being a wholly-owned subsidiary of
Capital Group International, Inc.
Save as disclosed above, according to the register kept by the Company under Section 336 of the
SFO, there was no other person who had a substantial interest or short positions in the Shares or
underlying Shares of the Company as at 31 December 2016.
81Annual Report 2016
Report of the Directors
REMUNERATION POLICY
As at 31 December 2016, the Group had approximately 11,400 full-time equivalent employees.
Employees of the Group are selected, remunerated and promoted on the basis of their merit,
qualifications, competence and contribution to the Group.
Compensation of key executives of the Group is determined by the Company’s remuneration
committee which reviews and determines executives’ compensation based on the Group’s
performance and the executives’ respective contributions to the Group.
The Company also has a provident fund set up for its employees, an employee ownership scheme
and a share option scheme. Further details on the Company’s employee ownership scheme and
share option scheme are set out below.
EMPLOYEE OWNERSHIP SCHEME
On 30 June 2014, the Company adopted the employee ownership scheme with the purpose of
aligning employees’ interests with those of the Group, and encouraging and retaining them to make
contributions to the long-term growth and profits of the Group. The resolutions to, among other
things, approve and adopt the employee ownership scheme and grant an employee ownership
scheme mandate to the Directors of the Company to allot, issue, procure the transfer of and
otherwise deal with up to 50,000,000 Shares in connection with the employee ownership scheme
during the relevant period (as defined in the Company’s circular dated 9 April 2014) were passed
at the Company’s annual general meeting in May 2014. Further resolutions were passed at the
Company’s annual general meeting in May 2016 to, among other things, effectively extend the
aforementioned relevant period until the conclusion of the Company’s upcoming annual general
meeting in 2017.
82 Wynn Macau, Limited
Report of the Directors
EMPLOYEE OWNERSHIP SCHEME (continued)
Shares will be acquired by an independent trustee at the cost of the Company or Shares will be
allotted to the independent trustee under the employee ownership scheme mandate granted or
to be granted by the Shareholders of the Company at general meetings from time to time and be
held in trust for the awarded persons (“Selected Participant”), other than a connected person of
the Company or an associate of a connected person of the Company, until the end of each vesting
period. A summary of the terms of the employee ownership scheme is set out below:
Number of Shares Available under the Employee Ownership Scheme
The Company can allot, issue, procure the transfer of and otherwise deal with a maximum of
50,000,000 Shares in connection with the employee ownership scheme. As at the date of this Annual
Report, there were 14,872,725 Award Shares outstanding under with the employee ownership
scheme, representing approximately 29.75% of the maximum Shares available under the employee
ownership scheme. 35,127,275 Shares remain available for future Awards under the employee
ownership scheme, representing approximately 0.68% of the total number of issued Shares of the
Company as at the date of this Annual Report.
Maximum Entitlement of Participant
The total number of non-vested Shares awarded to a Selected Participant under the employee
ownership scheme shall not exceed 0.5% of the total number of issued Shares from time to time.
Duration and Termination
The employee ownership scheme is valid and effective unless and until terminated on the earlier of:
(i) the 10th anniversary date of the adoption date of the scheme (the “Award Period”); and (ii) such
date of early termination as determined by the Board provided that such termination does not affect
any subsisting rights of any Selected Participant.
Operation
The Board shall select any Eligible Person to be a Selected Participant and award non-vested Shares
during the Award Period. The Company shall, as soon as reasonably practicable from the grant of
award date, for the purposes of satisfying the Awards, issue and allot Shares to the Trustee and/
or transfer to the Trust the necessary funds and instruct the Trustee to acquire Shares through on-
market transactions at the prevailing market price.
83Annual Report 2016
Report of the Directors
EMPLOYEE OWNERSHIP SCHEME (continued)
Restrictions
No award may be made to the Selected Participants and no direction or recommendation shall be
given to the Trustee with respect to a grant of an Award under the employee ownership scheme:
(i) where any director of the Company is in possession of unpublished inside information in relation
to the Company or where dealings by directors of the Company are prohibited under any code or
requirement of the Listing Rules or any applicable laws, rules or regulations; (ii) during the period of
60 days immediately preceding the publication date of the annual results or, if shorter, the period
from the end of the relevant financial year up to the publication date of the results; and (iii) during
the period of 30 days immediately preceding the publication date of the half-year results or, if
shorter, the period from the end of the relevant half-year period up to the publication date of the
results.
Vesting and Lapse
The Award to be vested is subject to vesting criteria and conditions or periods to be determined
by the Board from time to time, subject to all applicable law. In the event a Selected Participant
ceases to be an Eligible Person on or prior to the relevant vesting date and the Award in respect of
the relevant vesting date shall lapse or be forfeited pursuant to the employee ownership scheme,
such Award shall not vest on the relevant vesting date and the Selected Participant shall have no
claims against the Company or the Trustee, unless the Board determines otherwise at its absolute
discretion.
Voting Rights
The Trustee shall not exercise the voting rights in respect of any Shares held under the Trust
(including but not limited to the Award Shares, the returned Shares, any bonus Shares and any scrip
Shares).
Share Awards Grants
During the year ended 31 December 2016, the Company had awarded a total of 6,599,024 non-
vested Shares to Eligible Persons under the employee ownership scheme. The awards were satisfied
by the Trustee acquiring Shares on-market or by returned Shares.
Subsequent to 31 December 2016, the Company awarded a total of 1,295,097 non-vested Shares to
Eligible Persons under the employee ownership scheme. The awards were satisfied by the Trustee
acquiring Shares on-market or by returned Shares. Other details of the scheme are disclosed in note
23 to the Financial Statements.
84 Wynn Macau, Limited
Report of the Directors
SHARE OPTION SCHEME
The Company approved the adoption of a share option scheme on 16 September 2009 with its
implementation conditional on the Company’s Listing on the Hong Kong Stock Exchange. The
purpose of the share option scheme is to reward participants, which may include Directors and
employees of the Group, who have contributed to the Group and to encourage them to work
towards enhancing the value of the Company and its Shares for the benefit of the Company and its
Shareholders as a whole. The options granted under the share option scheme do not give immediate
ownership of the underlying Shares as they require payment of a subscription price which is based
on the then prevailing market price of the Shares. During the year ended 31 December 2016, share
options for a total of 1,932,000 Shares were granted (2015: options for a total of 1,268,000 Shares).
A summary of the terms of the share option scheme is set out below:
Number of Shares Available for Issue under the Share Option Scheme
A maximum of 518,750,000 Shares are available for issuance under the share option scheme
pursuant to a shareholders’ resolution passed at the 2010 annual general meeting, representing
approximately 9.98% of the total number of issued Shares of the Company as at the date of this
Annual Report. Since the passing of the relevant shareholders’ resolution at the 2010 annual general
meeting, options for up to 5,804,000 Shares have been granted under the share option scheme,
representing approximately 1.12% of the maximum Shares available under the share option scheme
and 0.11% of the total number of issued Shares of the Company as at the date of this Annual Report.
Maximum Entitlement of Participant
The maximum number of Shares issued and to be issued upon exercise of the share options granted
to each participant under the share option scheme (including both exercised and outstanding share
options) in any 12-month period shall not (when aggregated with any Shares subject to share options
granted during such period under any other share option schemes of the Company other than
those share options granted pursuant to specific approval by the Shareholders in a general meeting)
exceed one percent of the Shares in issue for the time being.
Where any further grant of share options to a participant would result in the Shares issued and to
be issued upon exercise of all share options granted and to be granted to such person (including
exercised, cancelled and outstanding share options) in the 12-month period up to and including the
date of such further grant representing in aggregate over one percent of the Shares in issue, such
further grant must be separately approved by Shareholders in general meeting with such participant
and his associates abstaining from voting.
85Annual Report 2016
Report of the Directors
SHARE OPTION SCHEME (CONTINUED)
Exercise Period
Subject to any restrictions applicable under the Listing Rules and notwithstanding the terms of grant
thereof, a share option may be exercised by the grantee in accordance with the terms of the share
option scheme at any time during the period to be determined and notified by the Board to each
grantee at the time of making an offer of the grant of a share option which shall not expire later than
10 years from the date on which it is granted. The minimum period in which a share option must be
held before it can be exercised is determined and notified by the Board to each grantee.
Payment on Acceptance of Share Option
An amount of HK$1.00 must be paid as consideration for the grant of a share option and such
payment must be made within 28 days from the date the share option grant offer is made by the
Board.
Determination of Exercise Price
The exercise price is determined by the Board in its absolute discretion but in any event shall not be
less than the highest of:
(i) the closing price of the Shares as stated in the daily quotations sheets issued by the Hong Kong
Stock Exchange on the date of the granting of the share option which must be a business day in
Hong Kong;
(ii) the average closing price of the Shares as stated in the daily quotations sheets issued by the
Hong Kong Stock Exchange for the five business days immediately preceding the date of the
granting of the share option; and
(iii) the nominal value of the Shares.
Life of the Share Option Scheme
The Company’s share option scheme is effective for a period of 10 years from 16 September 2009.
86 Wynn Macau, Limited
Report of the Directors
SHARE OPTION SCHEME (CONTINUED)
2016 Share Option Grants
The following table discloses movements in the Company’s share options outstanding during the
year ended 31 December 2016. Other details of the scheme are disclosed in note 23 to the Financial
Statements.
Number of share options
Name of Director
Date of grant
of share
options(1)
As at
1 January
2016
Granted
during the
year(2)
Exercised
during the
year
Expired/
lapsed/
canceled
during
the year
As at 31
December
2016
Exercise period of
share options
Exercise
price of
share
options
per Share
(HK$)
Dr. Allan Zeman 25 March 2010 250,000 — — — 250,000 25 March 2011 to
24 March 2020
10.92
17 May 2011 100,000 — — — 100,000 17 May 2012 to
16 May 2021
25.96
5 June 2012 190,000 — — — 190,000 5 June 2013 to
4 June 2022
19.04
16 May 2013 200,000 — — — 200,000 16 May 2014 to
15 May 2023
24.87
15 May 2014 161,000 — — — 161,000 15 May 2015 to
14 May 2024
31.05
21 May 2015 317,000 — — — 317,000 21 May 2016 to
20 May 2025
15.46
25 May 2016 — 483,000 — — 483,000 25 May 2017 to
24 May 2026
11.58
Mr. Nicholas
Sallnow-Smith
25 March 2010 50,000 — — — 50,000 25 March 2011 to
24 March 2020
10.92
17 May 2011 100,000 — — — 100,000 17 May 2012 to
16 May 2021
25.96
5 June 2012 114,000 — — — 114,000 5 June 2013 to
4 June 2022
19.04
16 May 2013 200,000 — — — 200,000 16 May 2014 to
15 May 2023
24.87
15 May 2014 161,000 — — — 161,000 15 May 2015 to
14 May 2024
31.05
21 May 2015 317,000 — — — 317,000 21 May 2016 to
20 May 2025
15.46
25 May 2016 — 483,000 — — 483,000 25 May 2017 to
24 May 2026
11.58
87Annual Report 2016
Report of the Directors
SHARE OPTION SCHEME (CONTINUED)
2016 Share Option Grants (continued)
Number of share options
Name of Director
Date of grant
of share
options(1)
As at
1 January
2016
Granted
during the
year(2)
Exercised
during the
year
Expired/
lapsed/
canceled
during
the year
As at 31
December
2016
Exercise period of
share options
Exercise
price of
share
options
per Share
(HK$)
Mr. Bruce Rockowitz 25 March 2010 50,000 — — — 50,000 25 March 2011 to
24 March 2020
10.92
17 May 2011 100,000 — — — 100,000 17 May 2012 to
16 May 2021
25.96
5 June 2012 152,000 — — — 152,000 5 June 2013 to
4 June 2022
19.04
16 May 2013 200,000 — — — 200,000 16 May 2014 to
15 May 2023
24.87
15 May 2014 161,000 — — — 161,000 15 May 2015 to
14 May 2024
31.05
21 May 2015 317,000 — — — 317,000 21 May 2016 to
20 May 2025
15.46
25 May 2016 — 483,000 — — 483,000 25 May 2017 to
24 May 2026
11.58
Mr. Jeffrey
Kin-fung Lam
25 March 2010 250,000 — — — 250,000 25 March 2011 to
24 March 2020
10.92
17 May 2011 100,000 — — — 100,000 17 May 2012 to
16 May 2021
25.96
5 June 2012 190,000 — — — 190,000 5 June 2013 to
4 June 2022
19.04
16 May 2013 200,000 — — — 200,000 16 May 2014 to
15 May 2023
24.87
15 May 2014 161,000 — — — 161,000 15 May 2015 to
14 May 2024
31.05
21 May 2015 317,000 — — — 317,000 21 May 2016 to
20 May 2025
15.46
25 May 2016 — 483,000 — — 483,000 25 May 2017 to
24 May 2026
11.58
Total 4,358,000 1,932,000 — — 6,290,000
The vesting periods of the above share options are 20% vesting on each of the anniversary date of
the date of grant.
88 Wynn Macau, Limited
Report of the Directors
SHARE OPTION SCHEME (CONTINUED)
2016 Share Option Grants (continued)
Notes:
(1) Share options granted pursuant to the Company’s share option scheme.
(2) The closing price of the Company’s Shares immediately before the date on which the options were granted
during the period was HK$11.30.
PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES
Neither the Company, nor any of its subsidiaries purchased, sold or redeemed any of the Group’s
listed securities during the year ended 31 December 2016.
SUFFICIENCY OF PUBLIC FLOAT
Based on the information available to the Company and within the knowledge of the Directors, as
at the date of this Annual Report, the Company maintained the prescribed public float under the
Listing Rules.
PRE-EMPTIVE RIGHTS
There are no provisions for pre-emptive rights under the laws of the Cayman Islands or under the
Company’s articles of association that require the Company to offer new Shares on a pro-rata basis
to its existing Shareholders.
AUDITOR
Our external auditor, Ernst & Young, will retire and a resolution for their reappointment as auditor of
the Company will be proposed at the forthcoming annual general meeting of the Company.
LITIGATION
The Group did not have any material litigation outstanding as at 31 December 2016. The litigation
matters set out below are disclosed on a voluntary basis and as with all litigation, no assurances can
be provided as to the outcome thereof.
89Annual Report 2016
Report of the Directors
LITIGATION (CONTINUED)
Macau Litigation Related to Okada
WRM and certain individuals who are or were directors of WRM and/or the Company (collectively,
the “Wynn Macau Parties”) have been named as defendants in a lawsuit filed in the Court of
First Instance of Macau (the “Macau Court”) by Mr. Kazuo Okada (“Okada”) and two of Okada’s
controlled companies, Aruze USA, Inc. and Universal Entertainment Corp. (collectively, the “Okada
Parties”). The principal allegations in the lawsuit are that the redemption of the Okada Parties’
shares in WRL was improper and undervalued, that the previously disclosed payment by WRM to
an unrelated third party in consideration of relinquishment by that party of certain rights in and to
any future development on the land in Cotai where Wynn Palace is located was unlawful and that
the Company’s previously disclosed donation by WRM to the University of Macau Development
Foundation was unlawful. The Okada Parties seek the dissolution of WRM and compensatory
damages.
The Company made a voluntary announcement in respect of this lawsuit on 3 July 2015. The
Company has sought advice from counsel in Macau, and based on such advice, the Company
believes that the claims are devoid of merit and are unfounded. The Company intends to vigorously
defend WRM and the other defendants in the lawsuit. The Macau Court has served the complaint on
all of the defendants and the Wynn Macau Parties filed their response in May 2016. The lawsuit is in
the early phases of litigation.
Macau Litigation Related to Dore
WRM has been named as a defendant in several lawsuits filed in the Macau Court of First Instance
by individuals who claim to be investors in or persons with credit in accounts maintained by Dore
Entertainment Company Limited (“Dore”), an independent, Macau registered and licensed company
that operates a gaming promoter business at Wynn Macau. In connection with the alleged theft,
embezzlement, fraud and/or other crime(s) perpetrated by a former employee of Dore (the “Dore
Incident”), the plaintiffs of the lawsuits allege that Dore failed to honor withdrawal of funds requests
that allegedly has resulted in certain losses for these individuals. The principal allegations common
to the lawsuits are that WRM, as a gaming concessionaire, should be held responsible for Dore’s
conduct on the basis that WRM is responsible for the supervision of Dore’s activities at Wynn Macau
that resulted in the purported losses.
The Company made a voluntary announcement in connection with the Dore Incident on 14
September 2015. The Company has sought advice from counsel in Macau, and based on such advice,
the Company believes the claims are devoid of merit and are unfounded. The Company intends to
vigorously defend WRM in the lawsuits. The lawsuits are in the early phases of litigation.
90 Wynn Macau, Limited
Report of the Directors
PERMITTED INDEMNITY PROVISION
Pursuant to the Company’s articles of association, every Director shall be entitled to be indemnified
out of the assets of the Company against all losses or liabilities incurred or sustained by him as a
Director in defending any proceedings, whether civil or criminal, in which judgment is given in his
favor, or in which he is acquitted. The Company has arranged appropriate directors’ and officers’
liability insurance for the Directors and officers of the Group to the extent permitted by law. Such
permitted indemnity provisions were in force during the course of the financial year ended 31
December 2016 and remained in force as of the date of this Annual Report.
WRM EXECUTIVE DIRECTOR
WRM, as a gaming concessionaire, is required by Macau law to have an executive director serving on
its board of directors who is a Macau permanent resident and holds at least 10% of the voting shares
and capital in WRM. The appointment of the executive director and of any successor is ineffective
without the approval of the Macau government. Ms. Linda Chen meets the aforementioned
requirements and currently serves as WRM’s Executive Director. The WRM shares held by Ms. Linda
Chen provide in aggregate a nominal preferential annual dividend and capital distribution rights of
up to one Macau pataca. To facilitate the appointment of the executive director, WRM indemnifies
the executive director to the extent permitted by law against any and all actions, suits, proceedings,
claims, demands, costs and expenses which may be made against, incurred or payable by the
executive director in connection with the executive director’s position as a member of the board
of directors of WRM and shareholder of WRM, and the executive director’s service in such capacity
under applicable agreements.
EQUITY-LINKED AGREEMENTS
Other than the employee ownership scheme and the share option scheme as disclosed above, no
equity-linked agreements were entered into by the Company during the year or subsisted at the end
of the financial year ended 31 December 2016.
91Annual Report 2016
Report of the Directors
CONTINUING DISCLOSURE PURSUANT TO LISTING RULES 13.18 AND 13.21
Under the terms of the Wynn Macau Credit Facilities, it is an event of default if Wynn Resorts,
Limited, the Company’s Controlling Shareholder, ceases to own directly or indirectly at least 51%
of the voting rights or issued capital of WRM or ceases to retain the ability or the right to direct
or procure the direction of the management and policies of WRM. Upon an event of default, the
lenders are entitled to exercise certain remedies including acceleration of the indebtedness under
the senior secured credit facilities.
In addition, the terms of the WML 2021 Notes contain a change of control provision that would, if
triggered, give rise to a right in favor of the holders of the WML 2021 Notes to require the Company
to repurchase such notes. The circumstances that will constitute a change of control include:
(1) the consummation of any transaction that results in any party other than Mr. Stephen A.
Wynn and his related parties becoming the direct or indirect owner of more than 50% of the
outstanding voting stock of WRL;
(2) the first day on which a majority of the members of the board of directors of either the
Company or WRL are not directors who were on the board at the date of issuance of the WML
2021 Notes, or directors who were nominated, elected, or appointed by a majority of the
directors who were on the board at the date of issuance of the WML 2021 Notes;
(3) the first day on which WRL ceases to own, directly or indirectly, a majority of the outstanding
issued share capital (including warrants, options or other rights convertible into share capital) of
the Company; and
(4) WRL consolidates with, or merges with or into, any other party or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of its assets to any party, or any
party consolidates with, or merges with or into, WRL in any such event pursuant to a transaction
in which any of the outstanding voting stock of WRL is converted into or exchanged for cash,
securities or other property, other than any such transaction where the voting stock of WRL
outstanding immediately prior to such transaction is converted into or exchanged for voting
stock that results in WRL holding a majority of the voting stock of the transferee or surviving
party.
Save as disclosed above, our Company does not have any other disclosure obligations under Rules
13.18 and 13.21 of the Listing Rules.
92 Wynn Macau, Limited
Report of the Directors
COOPERATION WITH THE CCAC
In July 2014, the Company was contacted by the Commission Against Corruption of Macau (the
“CCAC”) requesting certain information related to the Company’s land in the Cotai area of Macau.
The Company is cooperating with the CCAC’s request.
CHANGES IN INFORMATION OF DIRECTORS
Pursuant to Rule 13.51(B)(1) of the Listing Rules, the changes in information of Directors of the
Company are set out below:
(a) In February 2017, Mr. Stephen A. Wynn was named the Finance Chairman of the Republican
National Committee.
(b) Mr. Ian Michael Coughlan was appointed as President of the Company on 30 September 2016.
(c) Mr. Gamal Mohammed Abdelaziz resigned as President and executive Director of the Company
effective 30 September 2016.
(d) Mr. Jeffrey Kin-fung Lam resigned as an independent non-executive director of Bracell Limited
(formerly known as Sateri Holdings Limited) effective 1 November 2016.
(e) Dr. Allan Zeman ceased to be a board member to the West Kowloon Cultural District Authority
and the chairman of its Performing Arts Committee since October 2016. Dr. Allan Zeman is now
a honorary advisor of the Performing Arts Committee of the West Kowloon Cultural District
Authority.
(f) Ms. Kim Sinatra was appointed by the Board as a non-executive Director of the Company
effective from 1 April 2017.
On behalf of the Board
Stephen A. Wynn
Chairman
Hong Kong, 30 March 2017
93Annual Report 2016
Corporate Governance Report
CORPORATE GOVERNANCE PRACTICES
Our commitment to integrity and dedication to maintaining and ensuring high standards of
corporate governance are fundamental to our ability to conduct our business and sustain the respect
of the investment community and the people who regulate our industry. The Company’s corporate
governance practices are based on the principles, code provisions and certain recommended best
practices as set out in the Code and are regularly reviewed and developed in the interests of the
Company, its Shareholders and other stakeholders.
The Company has complied with the code provisions in the Code for the year ended 31 December
2016 except for the following deviation from provision A.2.1 and E.1.2 of the Code.
Mr. Stephen A. Wynn as our Chairman and Chief Executive Officer
Under code provision A.2.1 of the Code, the roles of chairman and chief executive officer should be
separate and should not be performed by the same individual. The Company does not at present
separate the roles of the chairman and chief executive officer.
Mr. Wynn, the founder of the Company and WRM, serves as the Chairman and Chief Executive
Officer of the Company. The Board has determined that the combination of these roles held
singularly by Mr. Wynn is in the best interest of the Company and all Shareholders. The Board
believes that the issue of whether to combine or separate the offices of Chairman of the Board and
Chief Executive Officer is part of the succession planning process and that it is in the best interests
of the Company for the Board to make a determination whether to combine or separate the roles
based upon the circumstances. The Board has given careful consideration to separating the roles of
Chairman and Chief Executive Officer and has determined that the Company and its Shareholders
are best served by the current structure. Mr. Wynn’s combined role promotes unified leadership
and direction for the Board and executive management and allows for a single, clear focus for the
Company’s operational and strategic efforts.
The combined role of Mr. Wynn as both Chairman and Chief Executive Officer is balanced by the
Company’s governance structure, policies and controls. All major decisions are made in consultation
with members of the Board and the relevant Board committees. The Company has three Board
committees, namely the audit and risk committee, remuneration committee, and nomination and
corporate governance committee. Each Board committee comprises non-executive Directors only
and is chaired by an independent non-executive Director. In addition, there are four independent
non-executive Directors on the Board offering independent perspectives.
This structure encourages independent and effective oversight of the Company’s operations and
prudent management of risk.
94 Wynn Macau, Limited
Corporate Governance Report
CORPORATE GOVERNANCE PRACTICES (CONTINUED)
For the reasons stated above and as a result of the structure, policies and procedures outlined
above, and in light of the historical success of Mr. Wynn’s leadership, the Board has concluded that
the current Board leadership structure is in the best interests of the Company and its Shareholders.
Annual General Meeting
Under code provision E.1.2, the chairman of the board should attend the annual general meetings of
the Company. Mr. Wynn, our Chairman, was unable to travel internationally to attend the Company’s
annual general meeting held on 25 May 2016 as he was recuperating from back surgery.
MODEL CODE
The Company adopted the Model Code on 16 September 2009 as its code of conduct for securities
transactions by Directors. On 23 March 2010, the Company adopted its own code of conduct for
securities transactions, which was most recently updated in March 2017. The terms of such code
are no less exacting than those set out in the Model Code. Having made specific enquiry of the
Directors, all Directors have confirmed that they have complied with the required standard of
dealings and code of conduct regarding securities dealings by directors as set out in the Model
Code and the Company’s own code of conduct for the year ended 31 December 2016.
QUARTERLY REPORTING BY WYNN RESORTS, LIMITED
Our ultimate controlling shareholder, Wynn Resorts, Limited, is listed on the NASDAQ Stock
Market and is a reporting company under the United States Securities Exchange Act of 1934
which is required to file quarterly reports with the SEC. Each quarter, Wynn Resorts, Limited issues
press releases in the United States relating to its quarterly financial information (including financial
information about the Macau segments of Wynn Resorts, Limited, which are operated by the
Company). Such information will be presented in accordance with U.S. GAAP.
At the same time as Wynn Resorts, Limited releases its quarterly press releases, the Company
makes an announcement on the Hong Kong Stock Exchange pursuant to Rule 13.09 and 37.47B
of the Listing Rules and Part XIVA of the SFO by extracting the key highlights of the press release
pertaining to the Group. Such announcement will also include a quarterly income statement for the
Group presented in accordance with IFRS.
In addition to the quarterly press release, Wynn Resorts, Limited also files quarterly reports with the
SEC. Simultaneously with the filing of such report in the United States, the Company also makes an
announcement on the Hong Kong Stock Exchange pursuant to Rule 13.09 and 37.47B of the Listing
Rules and Part XIVA of the SFO by extracting the key highlights of the quarterly report pertaining to
the Group.
95Annual Report 2016
Corporate Governance Report
BOARD OF DIRECTORS
Role of the Board
The Board governs the Company and is responsible for overall leadership of the Group. The
Board works to promote the success of the Group through oversight and direction of the Group’s
business dealings and has delegated the general day-to-day operations of the Group’s business
to the executive Directors and management team. The Board determines the overall strategic
priorities for the Company, reviews and approves budgetary affairs and oversees and monitors the
overall performance of management. The Board is provided with all necessary resources including
the advice of external auditor, external attorneys and other independent professional advisors as
needed.
Board Composition
The Company has a Board with a balanced composition of executive and non-executive Directors
(including independent non-executive Directors).
The Board is currently composed as follows:
• Executive Directors: Mr. Stephen A. Wynn (who is also Chief Executive Officer), Mr. Ian Michael
Coughlan, and Ms. Linda Chen;
• Non-executive Directors: Mr. Matthew O. Maddox and Ms. Kim Sinatra (effective from 1 April
2017); and
• Independent non-executive Directors: Dr. Allan Zeman, Mr. Jeffrey Kin-fung Lam, Mr. Bruce
Rockowitz and Mr. Nicholas Sallnow-Smith.
Mr. Stephen A. Wynn is our Chairman and Dr. Allan Zeman is our Vice-chairman.
There is no particular relationship (including financial, business, family or other material or relevant
relationship) between members of the Board.
96 Wynn Macau, Limited
Corporate Governance Report
BOARD OF DIRECTORS (CONTINUED)
Board Meetings and the General Meeting Held in 2016
In 2016, the Company convened four regular Board meetings. The attendance record of the
Directors at these meetings is set out below.
Name of Director
Number of
meetings
attended/held
during 2016 Attendance rate
EXECUTIVE DIRECTORS
Mr. Stephen A. Wynn# 3/4 75%
Mr. Ian Michael Coughlan* 4/4 100%
Ms. Linda Chen* 4/4 100%
Mr. Gamal Mohammed Abdelaziz*^ 3/3 100%
NON-EXECUTIVE DIRECTOR
Mr. Matthew O. Maddox* 4/4 100%
INDEPENDENT NON-EXECUTIVE DIRECTORS
Dr. Allan Zeman* 4/4 100%
Mr. Jeffrey Kin-fung Lam* 4/4 100%
Mr. Bruce Rockowitz* 4/4 100%
Mr. Nicholas Sallnow-Smith* 4/4 100%
# In addition, Mr. Wynn’s proxy attended one meeting on his behalf.
* Attended the Company’s annual general meeting held on 25 May 2016.
^ Mr. Abdelaziz resigned from the Board on 30 September 2016.
At least four regular board meetings are convened each year.
In accordance with code provision A.2.7 of the Code, apart from the regular board meetings
above, the Chairman of the Board also held meetings with the non-executive Directors (including
independent non-executive Directors) without the presence of executive Directors during the year.
97Annual Report 2016
Corporate Governance Report
BOARD OF DIRECTORS (CONTINUED)
Independent non-executive Directors
The Company has received from each of the independent non-executive Directors an annual
confirmation of his independence pursuant to Rule 3.13 of the Listing Rules and considers each of
them to be independent. Each of the independent non-executive Directors was appointed for a two
year term effective 1 April 2016.
Non-executive Directors
Mr. Matthew O. Maddox has been appointed as a non-executive Director for a three year term
effective 1 April 2016.
Ms. Kim Sinatra has been appointed as a non-executive Director for a three year term effective 1
April 2017.
Appointment and Re-election of Directors
Please refer to information in “Nomination and Corporate Governance Committee” as set below
regarding the process of appointment of Directors in the Company.
In addition to the aforesaid term of appointment of directors in the Company, all the Directors are
subject to retirement by rotation at least once every three years and any new Director appointed to
fill a casual vacancy or as an addition to the Board shall be re-elected at the next following annual
general meeting after appointment.
Continuous Professional Development of Directors
Each Director has kept abreast of his or her responsibilities as a director of the Company and of the
conduct, business activities and development of the Company.
The Company acknowledges the importance of Directors participating in appropriate continuous
professional development to develop and refresh their knowledge and skills to ensure that their
contribution to the Board remains informed and relevant. Internally-facilitated briefings for Directors
have been arranged and reading material on relevant topics have been issued to the Directors,
where appropriate.
98 Wynn Macau, Limited
Corporate Governance Report
BOARD OF DIRECTORS (CONTINUED)
Continuous Professional Development of Directors (continued)
The Company organized various briefings conducted by Mr. Jay M. Schall, the Senior Vice President
and General Counsel of the Company, for all Directors on relevant topics such as directors’ duties
and responsibilities, corporate governance and amendments to the Listing Rules. In addition, some
Directors attended seminars and training sessions presented by professional institutions. During the
year ended 31 December 2016, training on the following topics were offered to the Directors:
1. Directors’ duties and responsibilities
2. Corporate governance
3. Update on Hong Kong Listing Rules amendments
4. Corporate laws, compliance laws and regulations
5. Anti-bribery/corruption
Directors
Topics of
Training
Attended
Executive Directors
Mr. Stephen A. Wynn 1, 2, 3, 4 and 5
Mr. Ian Michael Coughlan 1, 2, 3, 4 and 5
Ms. Linda Chen 1, 2, 3, 4 and 5
Mr. Gamal Mohammed Abdelaziz^ 1, 2, 3, 4 and 5
Non-Executive Director
Mr. Matthew O. Maddox 1, 2, 3, 4 and 5
Independent Non-Executive Directors
Dr. Allan Zeman 1, 2, 3, 4, and 5
Mr. Jeffrey Kin-fung Lam 1, 2, 3, 4 and 5
Mr. Bruce Rockowitz 1, 2, 3, 4 and 5
Mr. Nicholas Sallnow-Smith 1, 2, 3, 4 and 5
^ Mr. Abdelaziz resigned from the Board on 30 September 2016.
99Annual Report 2016
Corporate Governance Report
BOARD COMMITTEES
The Board has received appropriate delegation of its functions and powers and has established
appropriate Board committees, with specific written terms of reference in order to manage and
monitor specific aspects of the Group’s affairs. The terms of reference of the Board Committees are
posted on the websites of the Company and the Hong Kong Stock Exchange and are available to the
Shareholders upon request. The Board and the Board committees are provided with all necessary
resources including the advice of external auditor, external attorneys and other independent
professional advisors as needed.
Audit and Risk Committee
The Company has set up an audit and risk committee in compliance with Rule 3.21 of the Listing
Rules, the primary duties of which are to review and supervise the financial reporting process,
internal control system and risk management system of the Group, maintain an appropriate
relationship with the Company’s auditor, review and approve connected transactions, and provide
advice and comments to the Board.
The audit and risk committee consists of three members: Mr. Nicholas Sallnow-Smith, Mr. Bruce
Rockowitz and Dr. Allan Zeman, all of whom are independent non-executive Directors. Mr. Nicholas
Sallnow-Smith is the chairman of the audit and risk committee.
The audit and risk committee held three meetings during the year ended 31 December 2016. The
attendance record of these meetings is set out below.
Name of committee member
Number of
meetings
attended/held
during 2016 Attendance rate
Mr. Bruce Rockowitz 3/3 100%
Mr. Nicholas Sallnow-Smith 3/3 100%
Dr. Allan Zeman 3/3 100%
100 Wynn Macau, Limited
Corporate Governance Report
BOARD COMMITTEES (CONTINUED)
Audit and Risk Committee (continued)
During the meetings, the audit and risk committee met with the external auditor, the internal audit
department and senior management, reviewed the financial statements, results announcements
and reports for the year ended 31 December 2015 and for the six months ended 30 June 2016, the
accounting principles and practices adopted by the Group and the relevant audit findings, reviewed
and discussed with the auditor of a report on the adequacy and effectiveness of the Company’s
financial reporting system, internal control system and risk management system and associated
procedures and considered the internal audit plan and report and reviewed and adopted new terms
of the audit and risk committee.
There are no material uncertainties relating to events or conditions that may cast significant doubt
on the Company’s ability to continue as a going concern. There is no disagreement between the
Board and the audit and risk committee regarding the selection and appointment of external
auditor.
Remuneration Committee
The Company has set up a remuneration committee, the primary duties of which are to assist the
Board in determining the policy and structure for the remuneration of Directors, evaluating the
performance of Directors and senior management, reviewing incentive schemes and Directors’
service contracts and fixing the remuneration packages for all Directors and senior management.
Pursuant to the delegated authority of the Board, the remuneration packages of Directors and
senior management may be determined by the remuneration committee in accordance with the
committee’s written terms of reference. Determination of such matters is based on the Group’s
performance and the Directors’ and senior management members’ respective contributions to the
Group.
The remuneration committee consists of four members: Mr. Matthew O. Maddox, a non-executive
Director, and Mr. Nicholas Sallnow-Smith, Mr. Bruce Rockowitz and Mr. Jeffrey Kin-fung Lam, all of
whom are independent non-executive Directors. Mr. Nicholas Sallnow-Smith is the chairman of the
remuneration committee.
101Annual Report 2016
Corporate Governance Report
BOARD COMMITTEES (CONTINUED)
Remuneration Committee (continued)
The remuneration committee held two meetings during the year ended 31 December 2016. The
attendance record of these meetings is set out below.
Name of committee member
Number of
meetings
attended/held
during 2016 Attendance rate
Mr. Jeffrey Kin-fung Lam 2/2 100%
Mr. Bruce Rockowitz 2/2 100%
Mr. Nicholas Sallnow-Smith 2/2 100%
Mr. Matthew O. Maddox 2/2 100%
During the meetings, the remuneration committee made recommendations of the performance-
based remuneration and bonuses to the senior management of the Group.
Details of the remuneration of each Director of the Company for the year ended 31 December 2016
are set out in note 25 to the financial statements contained in this Annual Report.
The remuneration of the members of senior management by band for the year ended 31 December
2016 is set out below:
Number of
members of
senior
management
HK$1,000,001 to HK$5,000,000 10
HK$5,000,001 to HK$10,000,000 4
HK$10,000,001 to HK$15,000,000 1
HK$25,000,001 to HK$30,000,000 1
Total 16
102 Wynn Macau, Limited
Corporate Governance Report
BOARD COMMITTEES (CONTINUED)
Nomination and Corporate Governance Committee
The Company has set up a nomination and corporate governance committee, the primary duties
of which are to identify, screen and recommend to the Board appropriate candidates to serve as
directors of the Company, to oversee the process for evaluating the performance of the Board,
to develop and recommend to the Board nomination guidelines for the Company, to review the
training and continuous professional development of Directors and senior management, to review
and monitor the Company’s policies and practices on compliance with legal and regulatory matters,
to develop a set of corporate governance principles for the Company, which shall be consistent with
any applicable laws, regulations and listing standards and to review the Company’s compliance with
the Code. In reviewing the composition of the Board, the nomination and corporate governance
committee considers the skills, knowledge and experience and also the desirability of maintaining
a balanced composition of executive and non-executive Directors (including independent non-
executive Directors).
The nomination and corporate governance committee consists of three members: Mr. Nicholas
Sallnow-Smith, Mr. Jeffrey Kin-fung Lam and Dr. Allan Zeman, all of whom are independent non-
executive Directors. Mr. Jeffrey Kin-fung Lam is the chairman of the nomination and corporate
governance committee.
The nomination and corporate governance committee held one meeting during the year ended 31
December 2016. The attendance record of the said meeting is set out below.
Name of committee member
Number of
meetings
attended/held
during 2016 Attendance rate
Mr. Jeffrey Kin-fung Lam 1/1 100%
Mr. Nicholas Sallnow-Smith 1/1 100%
Dr. Allan Zeman 1/1 100%
103Annual Report 2016
Corporate Governance Report
BOARD COMMITTEES (CONTINUED)
Nomination and Corporate Governance Committee (continued)
The nomination and corporate governance committee has assessed the independence of the
existing independent non-executive Directors and recommended the re-appointment of the retiring
Directors at the annual general meeting for the year ended 31 December 2016 of the Company.
The nomination and corporate governance committee also reviewed and agreed on measurable
objectives for implementing diversity on the Board. The measurable objectives identified by the
nomination and corporate governance committee include: a material number of members of
the Board should have gaming industry experience; certain members of the Board should have
experience with companies with an international presence and exposure; and certain members of the
Board should have experience with conducting businesses in the Asia Pacific region. The nomination
and corporate governance committee is satisfied that the composition of the Board is sufficiently
diverse. The nomination and corporate governance committee also reviewed the structure, size
and composition of the Board as well as the Company’s policies and practices on compliance with
corporate governance practices under the legal and regulatory requirements.
In accordance with article 17.18 of the Company’s articles of association, one third of our Board will
retire from office by rotation at the forthcoming annual general meeting. The three directors who will
retire by rotation are Mr. Ian Michael Coughlan, one of our executive Directors and Dr. Allan Zeman
and Mr. Nicholas Sallow-Smith, each an independent non-executive Director. All retiring Directors,
being eligible, will offer themselves for re-election at the forthcoming annual general meeting. In
accordance with article 17.2 of the Company’s articles of association, Ms. Kim Sinatra having been
appointed by the Board as a non-executive Director effective from 1 April 2017 and being eligible,
will offer herself for re-election at the forthcoming annual general meeting.
FINANCIAL REPORTING
Directors’ Responsibility
The Directors acknowledge their responsibility for the preparation and true and fair presentation
of the Financial Statements in accordance with International Financial Reporting Standards and the
disclosure requirements of the Hong Kong Companies Ordinance.
This responsibility includes designing, implementing and maintaining internal control relevant to the
preparation and the true and fair presentation of the Financial Statements that are free from material
misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies;
and making accounting estimates that are reasonable in the circumstances. The Directors are not
aware of any material uncertainties relating to events or conditions that may cast significant doubt
upon the Company’s ability to continue as a going concern as at 31 December 2016. Accordingly,
the Directors have prepared the Financial Statements for the year ended 31 December 2016 on a
going concern basis.
104 Wynn Macau, Limited
Corporate Governance Report
FINANCIAL REPORTING (CONTINUED)
Auditor’s Responsibility
A statement by the external auditor of the Company, Ernst & Young, is included in the Independent
Auditor’s Report on pages 108 to 117 of this Annual Report.
Auditor’s Remuneration
Fees for auditing services provided by our external auditor, Ernst & Young, for the year ended 31
December 2016 are included in note 3.2 to the Financial Statements. There were no non-auditing
services provided by our external auditor for the year ended 31 December 2016.
RISK MANAGEMENT AND INTERNAL CONTROLS
The Board has overall responsibility for overseeing the risk management and internal control systems
of the Group and ensuring the effectiveness of these systems, which are designed to provide
reasonable, but not absolute, assurance against material misstatement or loss, and to manage rather
than eliminate risks of failure in achieving our objectives.
As an integral part of the Board’s function and strategic decision making process, the Board
evaluates the risks faced by the Group and determines the risk exposure acceptable to the Group
for the purposes of achieving its objectives. Management is responsible for designing, implementing
and monitoring appropriate risk management and internal control systems. The processes for
developing the framework for our risk management and internal control systems involve the
collaborative efforts of management which possess a wide range of skills, knowledge and experience
as a result of the diverse nature of risk. Such risks include financial risk, political risk, market risk,
compliance risk and operational risk. As part of this framework, management periodically reports to
the audit and risk committee and the Board on market trends, business operations and performance,
corporate activities, developments and other relevant information. Management has been trained to
identify and handle information which may be considered material inside information. In accordance
with our policies and practices, which comply with the relevant legal and regulatory requirements,
such information is reported to the audit and risk committee and the Board in a timely manner
to facilitate the formulation of the appropriate response. Furthermore, procedures including pre-
clearance on dealing in the Group’s securities by designated members of management, notification
of regular blackout and securities dealing restrictions to relevant Directors and employees and
dissemination of information on a need-to-know basis have been implemented by the Group to
help ensure proper handling of inside information within the Group. Supporting this framework
is the Company’s internal audit department, which was established and functioning prior to the
commencement of operations of the Group.
105Annual Report 2016
Corporate Governance Report
RISK MANAGEMENT AND INTERNAL CONTROLS (CONTINUED)
The internal audit department is responsible for conducting independent reviews of the adequacy
and effectiveness of the risk management and internal controls systems of the Group. The internal
audit department prepares an annual audit plan based on applicable regulatory requirements and
risk assessments for the consideration and approval of the audit and risk committee. Upon approval,
audit work and testing is performed during the course of the year in accordance with the audit plan.
The internal audit department communicates the audit findings and recommendations for remedial
action (if any) with relevant management and performs follow-up work (as necessary) to confirm that
adequate remedial action has been taken. The internal audit department reports its findings and
conclusions, typically on a quarterly basis, to the audit and risk committee, which in turn provides
feedback to management, the internal audit department and the Board as appropriate.
During the year ended 31 December 2016, no material internal control deficiency that might have
an adverse impact on the financial position or operations of the Group was detected. In respect of
the year ended 31 December 2016, the Board reviewed the scope and quality of management’s risk
management and internal control systems, and through the review and findings of the audit and
risk committee and the internal audit department, considered that (i) the Group’s risk management
and internal control systems were effective and the Group had complied with the provisions on risk
management and internal controls as set forth in the Code; and (ii) the resources, staff qualifications
and experience, training programs and budget of the Group’s accounting, internal audit and
financial reporting functions were adequate.
DIRECTORS’ AND OFFICERS’ INSURANCE
The Company has arranged for appropriate insurance cover in respect of legal actions against our
Directors and officers acting in such a capacity on behalf of the Company.
COMPANY SECRETARY
Ms. Ho Wing Tsz Wendy of Tricor Services Limited (“Tricor”), our external service provider of
company secretarial services, is company secretary and authorized representative of the Company.
Tricor’s primary contact person at the Company is Mr. Jay M. Schall, Senior Vice President and
General Counsel of the Company. For the year ended 31 December 2016 and up to the date of this
Annual Report, Ms. Ho Wing Tsz Wendy has taken no less than 15 hours of relevant professional
training to update her skills and knowledge.
106 Wynn Macau, Limited
Corporate Governance Report
SHAREHOLDERS’ RIGHTS
Convening of Extraordinary General Meeting by Shareholders
Pursuant to article 13.3 of the Company’s articles of association, the Board may, whenever it
thinks fit, convene an extraordinary general meeting. Extraordinary general meetings shall also be
convened by two or more Shareholders depositing a written requisition at the principal office of
the Company in Hong Kong or, in the event the Company ceases to have such a principal office,
the registered office, specifying the objects of the meeting and signed by the requisitionists. The
requisitionists should hold as at the date of deposit of the requisition not less than one-tenth of the
paid up capital of the Company which carries the right of voting at general meetings.
General meetings may also be convened on the written requisition of a Shareholder which is a
recognized clearing house (or its nominee(s)) deposited at the principal office of the Company in
Hong Kong or, in the event the Company ceases to have such a principal office, the registered office
specifying the objects of the meeting and signed by the requisitionist. The requisitionist should
hold as at the date of deposit of the requisition not less than one-tenth of the paid up capital of the
Company which carries the right of voting at general meetings.
If the Board does not within 21 days from the date of deposit of the requisition proceed to convene
the meeting to be held within a further 21 days, the requisitionist(s) themselves or any of them
representing more than one-half of the total voting rights of all of them, may convene the general
meeting in the same manner, as nearly as possible, as that in which meetings may be convened by
the Board provided that any meeting so convened shall not be held after the expiration of three
months from the date of deposit of the requisition, and all reasonable expenses incurred by the
requisitionist(s) as a result of the failure of the Board shall be reimbursed to them by the Company.
Procedures for Shareholders to propose a person for election as a Director of the Company
The procedures for Shareholders to propose a person for election as a Director of the Company
were reviewed and recommended by the nomination and corporate governance committee, and
approved and adopted by the Board on 27 March 2012. The procedures are available for viewing on
our Company’s website at www.wynnmacaulimited.com.
INVESTOR RELATIONS
Shareholders’ Enquiries and Proposals
Enquiries from Shareholders for the Board or the Company, or proposals from Shareholders for
consideration at shareholders’ meetings may be directed to Wynn Macau Investor Relations:
By post: Wynn Macau, Investor Relations, Rua Cidade de Sintra, NAPE, Macau
By fax: (853) 2832 9966
By e-mail: inquiries@wynnmacau.com
107Annual Report 2016
Corporate Governance Report
INVESTOR RELATIONS (CONTINUED)
Shareholders’ Enquiries and Proposals (continued)
The enquiries and proposals received by the Company are handled on a case-by-case basis after due
consideration by the investors relations team, relevant management and the Board, as appropriate.
Changes to the contact details above will be communicated through our Company’s website at
www.wynnmacaulimited.com, which also contains information and updates on the Company’s
business developments and operations, as well as press releases and financial information.
Shareholders’ Communication Policy
The Company’s shareholders’ communication policy was reviewed and recommended by the
nomination and corporate governance committee, and approved and adopted by the Board on 27
March 2012. The shareholders’ communication policy is available for viewing on our Company’s
website at www.wynnmacaulimited.com.
Changes in Articles of Association
The Company’s current articles of association were conditionally adopted on 16 September 2009,
effective on the Company’s Listing, and are available for viewing on the websites of the Company
and the Hong Kong Stock Exchange. There have been no changes in the Company’s articles of
association since the Listing.
Shareholder Meetings
The Company held its annual general meeting for the year ended 31 December 2015 in the Grand
Ballroom at Wynn Macau on 25 May 2016. The resolutions for consideration at the said meeting
were voted by poll pursuant to the Listing Rules and the poll results were posted on the websites of
the Hong Kong Stock Exchange and the Company shortly after the said meeting.
Key Shareholder Dates
Key shareholder dates for 2017 are:
• June 2017: annual general meeting;
• August 2017: release of announcement of interim results in respect of the six months ending 30
June 2017; and
• September 2017: release of interim report in respect of the six months ending 30 June 2017.
108 Wynn Macau, Limited
Independent Auditor’s Report
To the shareholders of Wynn Macau, Limited
(Incorporated in the Cayman Islands with limited liability)
OPINION
We have audited the consolidated financial statements of Wynn Macau, Limited (the “Company”)
and its subsidiaries (the “Group”) set out on pages 118 to 206, which comprise the consolidated
statement of financial position as at 31 December 2016, and the consolidated statement of profit
or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the consolidated
financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements give a true and fair view of
the consolidated financial position of the Group as at 31 December 2016, and of its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance
with International Financial Reporting Standards (“IFRSs”) and have been properly prepared in
compliance with the disclosure requirements of the Hong Kong Companies Ordinance.
BASIS FOR OPINION
We conducted our audit in accordance with Hong Kong Standards on Auditing (“HKSAs”) issued
by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the
consolidated financial statements section of our report. We are independent of the Group in
accordance with the HKICPA’s Code of Ethics for Professional Accountants (the “Code”), and we
have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
109Annual Report 2016
Independent Auditor’s Report
To the shareholders of Wynn Macau, Limited
(Incorporated in the Cayman Islands with limited liability)
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the consolidated financial statements of the current period. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. For each
matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report, including in relation to these matters.
Accordingly, our audit included the performance of procedures designed to respond to our
assessment of the risks of material misstatement of the consolidated financial statements. The results
of our audit procedures, including the procedures performed to address the matters below, provide
the basis for our audit opinion on the accompanying consolidated financial statements.
110 Wynn Macau, Limited
Independent Auditor’s Report
To the shareholders of Wynn Macau, Limited
(Incorporated in the Cayman Islands with limited liability)
KEY AUDIT MATTERS (CONTINUED)
Key audit matter How our audit addressed the key audit matter
Allowance for doubtful accounts
Referring to note 2.5 to the Group’s
consolidated financial statements for significant
accounting judgments and estimates, an
estimated allowance for doubtful accounts is
maintained to reduce the Group’s receivables
to their carrying amount, which approximates
their fair value. Management evaluates the
estimated allowance based on specific reviews
of customer accounts as well as experience
with collection trends in the casino industry
and current economic and business conditions.
Management’s continued refinement of the
allowance for doubtful accounts based on
known customer information and changes
in a region’s economy or legal systems can
provide significant change in the estimate
between periods. Further disclosure on the
Group’s trade receivables and allowance for
doubtful accounts is disclosed in note 14 to the
consolidated financial statements.
We evaluated and tested the design and
operating effectiveness of the controls over the
accounting process of allowance for doubtful
accounts. We evaluated management’s
assumption and judgment by comparing to
the historical collection trends. We considered
the support for credits granted to gaming
patrons and/or their subsequent settlement
when performing analysis of receivables’
aging brackets and write-offs as a percentage
of gross trade receivables. In addition, we
corroborated management’s representations
with the source data for specific reserves made
for certain casino patrons, performed ratio
analysis on the Group’s allowance for doubtful
accounts; and re-calculated the allowance for
doubtful accounts using management’s model
and considered the adequacy of the provision.
We assessed the adequacy of the Group’s
disclosure regarding allowance for doubtful
accounts.
111Annual Report 2016
Independent Auditor’s Report
Key audit matter How our audit addressed the key audit matter
Classification of gaming promoters’ commission
Referring to notes 2.5 and 3.2 to the Group’s
consolidated financial statements for significant
accounting judgments and estimates, gaming
promoters introduce premium VIP casino
players to the Group’s resorts. In exchange
for their services, the Group pays the gaming
promoters a percentage of the gross gaming
win generated by each gaming promoter as
commissions. Significant management judgment
was involved in determining the classification of
commissions between the portion returned to
the VIP casino player by the gaming promoters,
which are netted against casino revenue, and
the portion used by the gaming promoter for
operations of their business, which are included
in other operating expenses.
We evaluated and tested the design and
operating effectiveness of the controls over
the classification for the commission paid
to the gaming promoters. We tested the
underlying data, including VIP win percentage
and commission rate. We also considered the
practice in the same industry. We re-calculated
the amount of commissions netted against
casino revenue and included in operating
expense using the Group’s methodology.
We assessed the adequacy of the Group’s
disclosure regarding the classification of
gaming promoters’ commission.
To the shareholders of Wynn Macau, Limited
(Incorporated in the Cayman Islands with limited liability)
KEY AUDIT MATTERS (CONTINUED)
112 Wynn Macau, Limited
Independent Auditor’s Report
Key audit matter How our audit addressed the key audit matter
Development and Construction of Integrated Resort — Wynn Palace
During the year, the Group capitalized
HK$3.1 billion to construction in progress and
substantially all of the capitalization was related
to the development of Wynn Palace. Wynn
Palace is the Group’s second resort and is
located on 52 acres of land in the Cotai area of
Macau. Wynn Palace commenced operations on
22 August 2016. The relevant disclosure on the
construction of Wynn Palace is set out in notes
8 and 9 to the Group’s consolidated financial
statements.
We evaluated and tested the design and
operating effectiveness of the controls over
the accounting process of construction in
progress. We evaluated the significant additions
of construction in progress in accordance with
the Group’s capitalization policy and tested
addition of construction costs and expenses
in relation to the construction project by
examining invoices and payments; we also
considered third-party surveyor’s report on
the project’s progress and compared the
completed construction in progress to the
project budget.
To the shareholders of Wynn Macau, Limited
(Incorporated in the Cayman Islands with limited liability)
KEY AUDIT MATTERS (CONTINUED)
113Annual Report 2016
Independent Auditor’s Report
Key audit matter How our audit addressed the key audit matter
Transfer of construction in process (“CIP”) to depreciable property and equipment accounts
and the relevant useful lives and depreciation
The Group’s CIP balance during the year
primarily related to construction of Wynn
Palace. During the year, the Group transferred
HK$27.7 billion from CIP to respective property
and equipment accounts and substantially all
of the transfer was related to the opening of
Wynn Palace on 22 August 2016. The details
of financial disclosure are set out in notes 2.5
and 9 to the Group’s consolidated financial
statements.
We evaluated and tested the design and
operating effectiveness of the controls over
the accounting process of depreciation. We
evaluated the management’s classifications
of the CIP balances to the different classes of
property and equipment. We compared the
depreciation policy adopted by these assets to
that of the group’s policy; we independently
calculated a range of depreciation charge
and compared to the Group’s depreciation
charge, and we assessed the adequacy of the
Group’s disclosure regarding the classification
of construction in process and property and
equipment.
OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT
The directors of the Company are responsible for the other information. The other information
comprises the information included in the Annual Report, other than the consolidated financial
statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
To the shareholders of Wynn Macau, Limited
(Incorporated in the Cayman Islands with limited liability)
KEY AUDIT MATTERS (CONTINUED)
114 Wynn Macau, Limited
Independent Auditor’s Report
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We
have nothing to report in this regard.
RESPONSIBILITIES OF THE DIRECTORS FOR THE CONSOLIDATED FINANCIAL
STATEMENTS
The directors of the Company are responsible for the preparation of the consolidated financial
statements that give a true and fair view in accordance with IFRSs and disclosure requirement of
the Hong Kong Companies Ordinance, and for such internal control as the directors determine is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors of the Company are responsible
for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the directors of the
Company either intend to liquidate the Group or to cease operations or have no realistic alternative
but to do so.
The directors of the Company are assisted by the Audit Committee in discharging their
responsibilities for overseeing the Group’s financial reporting process.
To the shareholders of Wynn Macau, Limited
(Incorporated in the Cayman Islands with limited liability)
OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT (CONTINUED)
115Annual Report 2016
Independent Auditor’s Report
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Our report is made solely to you, as a body,
and for no other purpose. We do not assume responsibility towards or accept liability to any other
person for the contents of this report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with HKSAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with HKSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
To the shareholders of Wynn Macau, Limited
(Incorporated in the Cayman Islands with limited liability)
116 Wynn Macau, Limited
Independent Auditor’s Report
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the Group’s ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
To the shareholders of Wynn Macau, Limited
(Incorporated in the Cayman Islands with limited liability)
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)
117Annual Report 2016
Independent Auditor’s Report
From the matters communicated with the Audit Committee, we determine those matters that were
of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Chow Chiu
Mei, Loletta.
Ernst & Young
Certified Public Accountants
Hong Kong
30 March 2017
To the shareholders of Wynn Macau, Limited
(Incorporated in the Cayman Islands with limited liability)
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)
118 Wynn Macau, Limited
Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended
31 December
2016 2015
HK$ HK$
Notes (in thousands)
Operating revenues
Casino 20,552,497 17,887,237
Rooms 246,558 122,790
Food and beverage 329,712 221,872
Retail and other 970,711 864,466
22,099,478 19,096,365
Operating costs and expenses
Gaming taxes and premiums 10,013,231 8,700,935
Staff costs 3.1 3,947,835 3,121,416
Other operating expenses 3.2 4,257,669 3,229,983
Depreciation and amortization 3.3 1,591,397 1,000,373
Property charges and other 3.4 24,814 11,599
19,834,946 16,064,306
Operating profit 2,264,532 3,032,059
Finance revenues 3.5 24,174 31,199
Finance costs 3.6 (838,055) (595,628)
Net foreign currency differences (6,051) 12,853
Changes in fair value of interest rate swaps 4 3,359 (41,078)
Loss on extinguishment of debt — (22,545)
(816,573) (615,199)
Profit before tax 1,447,959 2,416,860
Income tax expense 5 12,427 6,462
Net profit attributable to owners of the Company 1,435,532 2,410,398
119Annual Report 2016
Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended
31 December
2016 2015
HK$ HK$
Notes (in thousands)
Other comprehensive income
Other comprehensive income to be reclassified
to profit or loss in subsequent periods:
Currency translation reserve 480 —
Other comprehensive income for the year 480 —
Total comprehensive income attributable to owners
of the Company 1,436,012 2,410,398
Basic and diluted earnings per Share 7 HK$0.28 HK$0.46
120 Wynn Macau, Limited
Financial Statements
Consolidated Statement of Financial Position
As at 31 December
2016 2015
HK$ HK$
Notes (in thousands)
Non-current assets
Property and equipment and construction in progress 9 35,858,056 31,071,898
Leasehold interests in land 10 1,782,623 1,878,794
Goodwill 11 398,345 398,345
Deposits for acquisition of property and equipment 18,342 308,579
Interest rate swaps 4 — 5,631
Other non-current assets 12 910,186 576,658
Restricted cash and cash equivalents 16 9,842 13,973
Total non-current assets 38,977,394 34,253,878
Current assets
Inventories 13 338,023 179,825
Trade and other receivables 14 733,001 457,728
Prepayments and other current assets 15 128,596 98,673
Interest rate swaps 4 8,189 —
Amounts due from related companies 27 156,561 560,052
Restricted cash and cash equivalents 16 12,267 1,995
Cash and cash equivalents 17 2,591,442 6,731,356
Total current assets 3,968,079 8,029,629
Current liabilities
Accounts payable 18 525,501 345,594
Construction and retentions payables 1,167,082 1,258,868
Land premiums payable — 124,015
Other payables and accruals 19 5,866,015 4,003,064
Amounts due to related companies 27 202,298 128,920
Income tax payables 12,427 15,049
Other current liabilities 55,763 33,277
Total current liabilities 7,829,086 5,908,787
Net current (liabilities)/assets (3,861,007) 2,120,842
Total assets less current liabilities 35,116,387 36,374,720
121Annual Report 2016
Financial Statements
Consolidated Statement of Financial Position
As at 31 December
2016 2015
HK$ HK$
Notes (in thousands)
Non-current liabilities
Interest-bearing borrowings 20 32,169,888 31,317,919
Construction retentions payable 1,244 399,986
Other payables and accruals 19 325,022 381,178
Interest rate swaps 4 — 836
Other long-term liabilities 167,169 172,522
Total non-current liabilities 32,663,323 32,272,441
Net assets 2,453,064 4,102,279
Equity
Equity attributable to owners of the Company
Issued capital 21 5,196 5,196
Share premium account 22 161,746 161,746
Shares held for employee ownership scheme 21 (109,000) (50,184)
Reserves 22 2,395,122 3,985,521
Total equity 2,453,064 4,102,279
Approved and authorized for issue by the Board on 30 March 2017.
Stephen A. Wynn Matthew O. Maddox
Director Director
122 Wynn Macau, Limited
Financial Statements
Consolidated Statement of Changes in Equity
Attributable to owners of the Company
Issued
Capital
Share
Premium
Account
Shares Held
for Employee
Ownership
Scheme
Share
Option
Reserve*
Other
Reserves*#
Statutory
Reserve*
Retained
Earnings*
Currency
Translation
Reserve*
Total
Equity
HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$
(Note 22) (Note 22)
Notes (in thousands)
As at 1 January 2015 5,196 161,746 (16,154) 394,267 554,740 48,568 5,878,522 16,828 7,043,713
Net profit for the year — — — — — — 2,410,398 — 2,410,398
Total comprehensive income
for the year — — — — — — 2,410,398 — 2,410,398
Share-based payments 23 — — — 128,659 — — — — 128,659
Shares purchased for employee
ownership scheme 21 — — (34,030) — — — — — (34,030)
Special dividend declared and paid 6 — — — — — — (5,446,461) — (5,446,461)
As at 31 December 2015 and
1 January 2016 5,196 161,746 (50,184) 522,926 554,740 48,568 2,842,459 16,828 4,102,279
Net profit for the year — — — — — — 1,435,532 — 1,435,532
Changes in currency translation
reserve — — — — — — — 480 480
Total comprehensive income
for the year — — — — — — 1,435,532 480 1,436,012
Share-based payments 23 — — — 100,525 — — — — 100,525
Shares purchased for employee
ownership scheme 21 — — (58,816) — — — — — (58,816)
Dividend payable for employee
ownership scheme — — — — — — (17,673) — (17,673)
Special dividend declared and paid 6 — — — — — — (3,109,263) — (3,109,263)
As at 31 December 2016 5,196 161,746 (109,000) 623,451 554,740 48,568 1,151,055 17,308 2,453,064
* These reserve accounts comprise the consolidated reserves of HK$2.4 billion and HK$4.0 billion in the
consolidated statements of financial position as at 31 December 2016 and 2015, respectively.
# “Other reserves” as at 1 January 2016 is composed of HK$194.3 million of issued capital of WRM and HK$360.4
million of issued capital of Wynn Resorts International, Ltd.
123Annual Report 2016
Financial Statements
Consolidated Statement of Cash Flows
For the year ended 31 December
2016 2015
HK$ HK$
Notes (in thousands)
Operating activities
Profit before tax 1,447,959 2,416,860
Adjustments to reconcile profit before tax to net cash flows
from operating activities:
Depreciation of property and equipment 3.3 1,496,067 905,043
Amortization of leasehold interest in land 3.3 95,330 95,330
Property charges and other 3.4 24,814 11,599
Provision for doubtful accounts, net 3.2 8,486 63,419
Share-based payment expense 3.1 117,894 128,031
Changes in fair value of interest rate swaps (3,359) 41,078
Finance revenues 3.5 (24,174) (31,199)
Finance costs 3.6 838,055 595,628
Loss on extinguishment of debt — 22,545
Net foreign currency differences 6,051 (12,853)
Working capital adjustments:
(Increase)/decrease in inventories (158,194) 6,093
(Increase)/decrease in trade and other receivables (286,498) 46,974
Increase in prepayments and other assets (140,588) (151,440)
Increase/(decrease) in accounts payable 236,846 (445,905)
Increase/(decrease) in other payables, accruals and other liabilities 1,782,889 (988,717)
Decrease/(increase) in net amounts due from related companies 416,683 (207,115)
Income taxes paid (15,049) (15,049)
Net cash flows generated from operating activities 5,843,212 2,480,322
Investing activities
Purchase of property and equipment and other assets,
net of construction and retentions payables (6,789,643) (12,710,134)
Proceeds from sale of property and equipment and other assets 5,691 8,259
Interest received 26,899 33,680
Net cash flows used in investing activities (6,757,053) (12,668,195)
Financing activities
Increase in restricted cash and cash equivalents (6,141) (8,388)
Proceeds from borrowings 3,883,272 26,519,638
Repayment of borrowings (3,110,156) (13,710,435)
Payment of debt financing costs (18,503) (465,794)
Shares purchased for employee ownership scheme 21 (58,816) (34,030)
Payment of land premiums (124,015) (239,029)
Interest paid (685,732) (489,133)
Dividend paid 6 (3,109,263) (5,446,461)
Net cash flows (used in)/generated from financing activities (3,229,354) 6,126,368
Net decrease in cash and cash equivalents (4,143,195) (4,061,505)
Cash and cash equivalents as at 1 January 6,731,356 10,789,890
Effect of foreign exchange rate changes, net 3,281 2,971
Cash and cash equivalents as at 31 December 17 2,591,442 6,731,356
124 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
1. CORPORATE AND GROUP INFORMATION
The Company was incorporated in the Cayman Islands as an exempted company with limited
liability on 4 September 2009. The Company’s Shares were listed on the Main Board of the
Hong Kong Stock Exchange on 9 October 2009. The Company’s registered office address is
P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place
as the Directors may from time to time decide.
The Group owns and operates hotel and casino resorts in Macau, namely Wynn Macau and
Wynn Palace. WRM conducts gaming activities in our casinos in Macau under a concession
contract signed with the Macau government on 24 June 2002. The 20-year concession period
commenced on 27 June 2002 and will expire on 26 June 2022.
The Group also owns a land concession for approximately 51 acres of land in the Cotai area
of Macau (the “Cotai Land”) for a term of 25 years from May 2012. The Group opened Wynn
Palace, an integrated resort, situated on the Cotai Land on 22 August 2016.
WM Cayman Holdings Limited I owns approximately 72% of the Company and approximately
28% of the Company is owned by public shareholders. The ultimate parent company of Wynn
Macau, Limited is Wynn Resorts, Limited, a publicly-traded company incorporated in the United
States of America.
125Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
1. CORPORATE AND GROUP INFORMATION (CONTINUED)
Information about subsidiaries
The following is a list of subsidiaries of the Company as at 31 December 2016:
Name
Place of
Incorporation/
Operation
Principal
Activities
Nominal Value of
Issued Share/
Registered Capital Interest Held
WM Cayman Holdings
Limited II
Cayman Islands Investment holding Ordinary shares
— US$1
100%
Wynn Resorts
International, Ltd.
Isle of Man Investment holding Ordinary shares
— GBP2
100%
Wynn Resorts (Macau)
Holdings, Ltd.
Isle of Man Investment holding Ordinary shares
— Class A shares:
GBP343
— Class B shares:
GBP657
100%
Wynn Resorts (Macau),
Limited
Hong Kong Investment holding Ordinary shares
— HK$100
100%
Wynn Resorts (Macau) S.A. Macau Operator of hotel casino and
related gaming businesses
Share capital
— MOP200,100,000
100%**
Palo Real Estate Company
Limited
Macau Development, design and
preconstruction activities
Share capital
— MOP1,000,000
100%
WML Finance I Limited Cayman Islands Entity facilitates
lending within the
Group
Ordinary shares
— US$1
100%
WML Corp. Ltd. Cayman Islands Investment holding Ordinary shares
— US$1
100%*
126 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
1. CORPORATE AND GROUP INFORMATION (CONTINUED)
Information about subsidiaries (continued)
* Shares directly held by the Company
** 10% of the shares were held by a Macau-resident investor which entitle the holder to 10% of the voting
and social rights and the rights to maximum dividend or payment upon dissolution of one MOP. The
remaining 90% of the shares held by the Group are entitled to 90% of the voting rights and 100% of the
profit participation or economic interest.
None of the subsidiaries had any debt securities outstanding at the end of the year or at any
time during the year.
Contribution to Trust
The Company has consolidated an operating entity within the Group without any legal interests.
Due to the implementation of the employee ownership scheme of the Group mentioned in note
23, the Company has set up a structured entity, Trust, and its particulars are as follows:
Structured Entity Principal Activities
Trust Administering and holding the Company’s Shares acquired
for the employee ownership scheme, which is set up for the
benefits of eligible persons of the scheme
127Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.1 BASIS OF PREPARATION
These financial statements have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board
(“IASB”). These financial statements also comply with the accounting principles generally
accepted in Hong Kong and disclosure requirements of the Hong Kong Companies Ordinance
relating to the preparation of financial statements. They have been prepared on a historical
cost basis, except for derivative financial instruments, which have been measured at fair value
as further explained in note 2.2. These financial statements are presented in Hong Kong dollars
and all values are rounded to the nearest thousand (HK$’000) except when otherwise indicated.
As at 31 December 2016, the Group had cash and cash equivalents of HK$2.6 billion. These
cash and cash equivalents have not been earmarked for any specific use other than for general
corporate purposes, the development of Wynn Palace and repayments on the Group’s debt
obligations.
As at 31 December 2016, the Group had a net current liability position of HK$3.9 billion. The
Group expects it will generate positive cash flows in the coming twelve months and may obtain
or renew its bank loan facilities and, or seek other sources of funding, wherever needed, to
meet its financial liabilities as and when they fall due. The Group believes it has sufficient
working capital to finance its operations and financial obligations.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and
its subsidiaries for the year ended 31 December 2016. A subsidiary is an entity (including a
structured entity), directly or indirectly, controlled by the Company. Control is achieved when
the Group is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee (i.e., existing
rights that give the Group the current ability to direct the relevant activities of the investee).
The subsidiaries are fully consolidated from the date on which control is transferred to the
Group, and will continue to be consolidated until the date that such control ceases. The
financial statements of the subsidiaries are prepared for the same reporting period as the
parent company, using consistent accounting policies.
128 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.1 BASIS OF PREPARATION (CONTINUED)
Basis of consolidation (continued)
On 15 May 2014, the Board of Directors approved an employee ownership scheme under
which shares may be awarded to employees of the Group in accordance with the related terms
and conditions. Pursuant to the rules of the employee ownership scheme, the Group has set
up a Trust for the purpose of administering the employee ownership scheme and holding the
awarded shares before they vest. As the Group has control over the Trust, the Directors of the
Company consider that it is appropriate to consolidate the Trust.
Transactions, balances, dividends and unrealized gains on transactions between group
companies are eliminated in full on consolidation. Unrealized losses are also eliminated unless
the transaction provides evidence of an impairment of the asset transferred.
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fair value measurement
The Group measures its derivative financial instruments at the end of each reporting period.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either in the principal market for the asset or liability, or in the absence of
a principal market, in the most advantageous market for the asset or liability. The principal or
the most advantageous market must be accessible by the Group. The fair value of an asset or a
liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s
ability to generate economic benefits by using the asset in its highest and best use or by selling
it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data is available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
129Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fair value measurement (continued)
All assets and liabilities for which fair value is measured or disclosed in the financial statements
are categorized within the fair value hierarchy, described as follows, based on the lowest level
input that is significant to the fair value measurement as a whole:
Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or
liabilities
Level 2 — based on valuation techniques for which the lowest level input that is significant
to the fair value measurement is observable, either directly or indirectly
Level 3 — based on valuation techniques for which the lowest level input that is significant
to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis,
the Group determines whether transfers have occurred between levels in the hierarchy by
reassessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
Goodwill
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred, the amount recognized for non-controlling interests and any fair value of the
Group’s previously held equity interests in the acquiree over the identifiable net assets acquired
and liabilities assumed. If the sum of this consideration and other items is lower than the
fair value of the net assets of the subsidiary acquired, the difference is, after reassessment,
recognized in the consolidated statement of profit or loss and other comprehensive income as a
gain on bargain purchase.
Goodwill arising on acquisition is recognized in the consolidated statement of financial position
as an asset, initially measured at cost and subsequently at cost less any accumulated impairment
losses.
Goodwill is tested for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired. The Group performs its
annual impairment test of goodwill as at 31 December. For the purpose of impairment testing,
goodwill acquired in a business combination is, from the acquisition date, allocated to each
cash-generating unit (“CGU”) of the Group or groups of CGUs, that are expected to benefit
from the synergies of the combination, irrespective of whether other assets or liabilities of the
Group are assigned to those units or groups of units.
130 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Goodwill (continued)
Impairment is determined by assessing the recoverable amount of the CGU or the group of
CGUs to which the goodwill relates. Where the recoverable amount of the CGU or the group
of CGUs is less than the carrying amount, an impairment loss is recognized. An impairment loss
recognized for goodwill is not reversed in a subsequent period.
Where goodwill has been allocated to a CGU or a group of CGUs and part of the operation
within that unit is disposed of, the goodwill associated with the operation disposed of is
included in the carrying amount of the operation when determining the gain or loss on disposal
of the operation. Goodwill disposed of in this circumstance is measured based on the relative
values of the operation disposed of and the portion of the CGU retained.
Foreign currencies
These financial statements are presented in Hong Kong dollars, which is the Company’s
functional and presentation currency. Each entity in the Group determines its own functional
currency and items included in the financial statements of each entity are measured using that
functional currency. Foreign currency transactions recorded by the entities in the Group are
initially recorded using their respective functional currency rates prevailing at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies are translated at
the functional currency rates of exchange ruling at the end of the reporting period. Differences
arising on settlement or translation of monetary items are recognized in the consolidated
statement of profit or loss and other comprehensive income. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated using the exchange
rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a
foreign currency are translated using the exchange rates at the dates when the fair values were
measured. The gain or loss arising on retranslation of a non-monetary item is treated in line with
the recognition of the gain or loss on change in fair value of the item.
The functional currencies of subsidiaries are currencies other than the Hong Kong dollar. As
at the end of the reporting period, the assets and liabilities of these entities are translated
into Hong Kong dollars at the exchange rates prevailing at the end of the reporting period
and their statement of profit or loss are translated into Hong Kong dollars at the weighted
average exchange rates for the year. The resulting exchange differences are recognized in other
comprehensive income and accumulated in the currency translation reserve.
131Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the
Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity of the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary
or fellow subsidiary of the other entity);
(iii) the entity of the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the
third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the
Group or an entity related to the Group;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of
the key management personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of which it is a part, provides key management
personnel services to the Group or to the parent of the Group.
132 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property and equipment
Property and equipment are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. The cost of an item of property and equipment comprises its purchase
price and any directly attributable costs of bringing the asset to its working condition and
location for its intended use. Expenditures incurred after items of property and equipment
have been put into operation, such as repair and maintenance costs, are recognized in the
consolidated statement of profit or loss and other comprehensive income in the period in
which they are incurred. When significant parts of property and equipment are required to be
replaced at intervals, the Group recognizes such parts as individual assets with specific useful
lives and depreciates them accordingly. Likewise, when a major inspection is performed, its
cost is recognized in the carrying amount of the equipment as a replacement if the recognition
criteria are satisfied. The present value of the expected cost for the decommissioning of an
asset after its use is included in the cost of the asset if the recognition criteria for a provision are
met.
Depreciation is calculated on the straight-line basis to write off the cost of each item of
property and equipment to its residual value over its estimated useful life. The estimated useful
lives used are as follows:
Buildings and improvements 10 to 45 years
Furniture, fixtures and equipment 3 to 5 years
Leasehold improvements (shorter of remaining lease period and
estimated useful life)
1 to 5 years
An item of property and equipment is derecognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of an
asset (calculated as the difference between the net disposal proceeds and the carrying amount
of the asset) is included in the consolidated statement of profit or loss and other comprehensive
income when the asset is derecognized.
Residual values, useful lives and methods of depreciation are reviewed at least at each financial
year end and adjusted prospectively, if appropriate.
Construction in progress represents assets under development or construction, which are stated
at cost less any impairment losses, and are not depreciated. Cost comprises the direct costs of
construction and capitalized borrowing costs on related borrowed funds during the period of
construction. Construction in progress is reclassified to the appropriate category of property
and equipment when completed and ready for use.
133Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Leasehold interests in land
Leasehold interests in land under operating leases are payments made on entering into
or acquiring land-use rights over extended periods of time. The total lease payments are
amortized on a straight-line basis over the lease terms in accordance with the expected pattern
of consumption of the economic benefits embodied in the land-use right.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an
asset that necessarily takes a substantial period of time to get ready for its intended use are
capitalized as part of the cost of the respective assets. The capitalization of such borrowing
costs ceases when the assets are substantially ready for their intended use. All other borrowing
costs are expensed in the period in which they are incurred. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing of funds.
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may
be impaired. If any such indication exists, or when annual impairment testing for an asset is
required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount
is the higher of an asset’s or a CGU’s fair value less costs of disposal and its value in use and is
determined by individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. When the carrying amount of an
asset or a CGU exceeds its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value
using pre-tax discount rates that reflect current market assessments of the time value of money
and the risks specific to the asset. In determining fair value less costs of disposal, recent market
transactions are taken into account, if available. If no such transactions can be identified, an
appropriate valuation model is used. These calculations are corroborated by valuation multiples,
quoted share prices for publicly traded companies or other available fair value indicators.
The Group bases its impairment calculations on detailed budgets and forecast calculations,
which are prepared separately for each of the Group’s CGUs to which the individual assets are
allocated. These budgets and forecast calculations generally cover a period of five years. For
longer periods, a long-term growth rate is calculated and applied to projected future cash flows
after the fifth year.
134 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Impairment of non-financial assets (continued)
Impairment losses are recognized in the consolidated statement of profit or loss and other
comprehensive income in those expense categories consistent with the function of the impaired
assets.
For assets excluding goodwill, an assessment is made at each reporting date as to whether
there is any indication that previously recognized impairment losses may no longer exist or
may have decreased. If such an indication exists, the Group estimates the asset’s or CGU’s
recoverable amount. A previously recognized impairment loss is reversed only if there has
been a change in the estimates used to determine the asset’s recoverable amount since the
last impairment loss was recognized. The reversal is limited so that the carrying amount of the
asset does not exceed its recoverable amount, nor exceed the carrying amount that would have
been determined, net of depreciation, had no impairment losses been recognized for the asset
in prior years. Such reversal is recognized in the consolidated statement of profit or loss and
other comprehensive income unless the asset is carried at a revalued amount, in which case the
reversal is treated as a revaluation increase.
Investments and other financial assets
Financial assets are classified, at initial recognition, as financial assets at fair value through profit
or loss or loans and receivables, as appropriate. When financial assets are recognized initially,
they are measured at fair value plus transaction costs that are attributable to the acquisition of
the financial assets, except in the case of financial assets recorded at fair value through profit or
loss.
The Group determines the classification of its financial assets on initial recognition and, where
allowed and appropriate, re-evaluates this designation at each financial year end.
All regular way purchases and sales of financial assets are recognized on the trade date, which
is the date that the Group commits to purchase or sell the asset. Regular way purchases or
sales are purchases or sales of financial assets that require delivery of assets within the period
generally established by regulation or convention in the marketplace.
135Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Investments and other financial assets (continued)
Subsequent measurement of loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. After initial measurement, loans and receivables
(including trade and other receivables, deposits, amounts due from related companies and cash
and cash equivalents) are subsequently measured at amortized cost using the effective interest
rate method (“EIR”) less any allowances for impairments. Gains and losses are recognized in the
consolidated statement of profit or loss and other comprehensive income when the loans and
receivables are derecognized or impaired, as well as through the amortization process.
Impairment of financial assets
The Group assesses at each statement of financial position date whether there is objective
evidence that a financial asset or a group of financial assets is impaired.
Assets carried at amortized cost
If there is objective evidence that an impairment loss on assets carried at amortized cost
has been incurred, the amount of the loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows (excluding future
expected credit losses that have not been incurred) discounted at the financial asset’s original
effective interest rate (i.e. the effective interest rate computed at initial recognition). The
carrying amount of the asset is reduced through use of an allowance account and the loss is
recognized in the consolidated statement of profit or loss and other comprehensive income.
If, in a subsequent period, the amount of the estimated impairment loss increases or decreases
because of an event occurring after the impairment was recognized, the previously recognized
impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later
recovered, the recovery is credited to other expenses in the consolidated statement of profit or
loss and other comprehensive income.
In relation to trade receivables, a provision for impairment is made when there is objective
evidence (such as the probability of insolvency or significant financial difficulties of the debtor)
that the Group will not be able to collect all of the amounts due under the original terms of the
transaction. The carrying amount of the receivables is reduced through the use of an allowance
account. Impaired debts are derecognized when they are assessed as uncollectible.
136 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Inventories
Inventories are valued at the lower of cost and net realizable value. Cost is determined on
the first-in, first-out, weighted average or specific identification methods as appropriate. Net
realizable value is based on estimated selling prices less estimated costs to be incurred on
completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of financial position and the
consolidated statement of cash flows comprise cash at banks and on hand and short term
deposits with an original maturity of three months or less, which are not restricted as to use.
Financial liabilities
The Group’s financial liabilities are classified as financial liabilities at fair value through profit
or loss and as other financial liabilities, which include accounts payable, construction and
retentions payables, other payables, amounts due to related companies, interest-bearing
borrowings, and other current and long-term liabilities and are subsequently measured at
amortized cost, using EIR unless the effect of discounting would be immaterial, in which case
they are stated at cost.
Interest-bearing loans and borrowings
All loans and borrowings are initially recognized at fair value less directly attributable
transaction costs, and have not been designated as “fair value through profit or loss”.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortized cost, using the EIR.
Gains and losses are recognized in the consolidated statement of profit or loss and other
comprehensive income when the liabilities are derecognized as well as through the EIR
amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The EIR amortization is included in finance
costs in the consolidated statement of profit or loss and other comprehensive income.
137Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Derivative financial instruments
The Group uses derivative financial instruments, such as interest rate swaps and foreign
currency forward contracts, to manage interest rate and foreign currency risks, respectively.
Such derivative financial instruments are initially recognized at fair value on the date a derivative
contract is entered into and are subsequently remeasured at fair value. Fair value is estimated
based upon current, and predictions of future interest rate levels along a yield curve, the
remaining duration of the instrument and other market conditions and, therefore, is subject
to significant estimation and a high degree of variability of fluctuation between periods.
The Group adjusts this amount by applying a non-performance valuation after considering
the Group’s creditworthiness or the creditworthiness of the Group’s counterparties at each
settlement date. Derivatives are carried as assets when the fair value is positive and as
liabilities when the fair value is negative. All gains or losses arising from changes in fair value
on derivatives are taken directly to the consolidated statement of profit or loss and other
comprehensive income as none of the derivatives qualify for hedge accounting.
The fair value of interest rate swap contracts and foreign currency forward contracts are
determined by using appropriate valuation techniques.
Current versus non-current classification
Derivative instruments that are not designated as effective hedging instruments are classified
as current or non-current or separated into current and non-current portions based on an
assessment of the facts and circumstances (i.e., the underlying contracted cash flows).
138 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Derecognition of financial assets and liabilities
Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognized (i.e., removed from the Group’s consolidated
statement of financial position) when:
• the rights to receive cash flows from the asset have expired; or
• the Group has transferred its rights to receive cash flows from the asset or has assumed
an obligation to pay cash flow receipts in full without material delay to a third party under
a “pass-through” arrangement; and either (a) the Group has transferred substantially all
the risks and rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and
rewards of ownership of the asset. When it has neither transferred nor retained substantially
all the risks and rewards of the asset nor transferred control of the asset, the Group continues
to recognize the transferred asset to the extent of the Group’s continuing involvement. In that
case, the Group also recognizes an associated liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights and obligations that the Group has
retained. Continuing involvement that takes the form of a guarantee over the transferred asset
is measured at the lower of the original carrying amount of the asset and the maximum amount
of consideration that the Group could be required to repay.
Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or
cancelled, or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability
and the recognition of a new liability, and the difference in the respective carrying amounts is
recognized in the consolidated statement of profit or loss and other comprehensive income.
139Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the
consolidated statement of financial position if there is a currently enforceable legal right to
offset the recognized amounts and there is an intention to settle on a net basis, or to realize the
assets and settle the liabilities simultaneously.
Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount
of the obligation. When the Group expects some or all of a provision to be reimbursed, for
example, under an insurance contract, the reimbursement is recognized as a separate asset
but only when the reimbursement is virtually certain. The expense relating to any provision
is presented in the consolidated statement of profit or loss and other comprehensive income
net of any reimbursement. If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to
the liability. Where discounting is used, the increase in the provision due to the passage of
time is recognized as a finance cost in the consolidated statement of profit or loss and other
comprehensive income.
Pensions and other post employment benefits
The Group operates a defined contribution retirement benefit scheme (the “Scheme”). The
Scheme allows eligible employees to contribute 5% of their salary to the Scheme and the Group
matches the contributions with an equal amount. The assets of the Scheme are held separately
from those of the Group in an independently administered fund. The Group’s matching
contributions vest to the employees at 10% per year with full vesting in ten years. Forfeitures
of unvested contributions are used to reduce the Group’s liability for its contributions payable
under the Scheme. The contributions are charged to the consolidated statement of profit or loss
and other comprehensive income as they become payable in accordance with the rules of the
Scheme.
140 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Share-based payments
Employees (including senior executives and directors) of the Group receive remuneration in
the form of share-based payments; whereby, employees render services as consideration for
equity instruments in the form of common shares or options to purchase common shares of the
ultimate parent company, Wynn Resorts and beginning in September 2009, the Company.
In situations where equity instruments are issued and some or all of the goods or services
received by the entity as consideration cannot be specifically identified, they are measured
as the difference between the fair value of the share-based payment transactions and the fair
value of any identifiable goods or services received at the grant date. This is then capitalized or
expensed as appropriate.
Equity-settled transactions
The cost of equity-settled transactions with employees, for awards granted after 7 November
2002, is measured by reference to the fair value at the date on which they are granted. The fair
value is determined by using an appropriate pricing model, further details of which are given in
note 23.
The cost of equity-settled transactions is recognized in employee benefit expense, together
with a corresponding increase in equity, over the period in which the performance and/or
service conditions are fulfilled, ending on the date on which the relevant employees become
fully entitled to the award (the “vesting date”). The cumulative expense recognized for equity-
settled transactions at each reporting date until the vesting date reflects the extent to which the
vesting period has expired and the Group’s best estimate of the number of equity instruments
that will ultimately vest. The charge or credit to the consolidated statement of profit or loss
and other comprehensive income for a period represents the movement in cumulative expense
recognized as of the beginning and end of that period and is recognized in staff costs.
Service and non-market performance conditions are not taken into account when determining
the grant date fair value of awards, but the likelihood of the conditions being met is assessed
as part of the Group’s best estimate of the number of equity instruments that will ultimately
vest. Market performance conditions are reflected within the grant date fair value. Any other
conditions attached to an award, but without an associated service requirement, are considered
to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an
award and lead to an immediate expensing of an award unless there are also service and/or
performance conditions.
141Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Share-based payments (continued)
Equity-settled transactions (continued)
For awards that do not ultimately vest because non-market performance and/or service
conditions have not been met, no expense is recognized. When awards include a market or
non-vesting condition, the transactions are treated as vesting irrespective of whether the
market or non-vesting condition is satisfied, provided that all other performance and/or service
conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is
recognized as if the terms had not been modified, if the original terms of the award are met.
In addition, an expense is recognized for any modification that increases the total fair value of
the share-based payment, or is otherwise beneficial to the employee as measured at the date of
modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognized for the award is recognized immediately.
This includes any award where non-vesting conditions within the control of either the entity
or the employee are not met. However, if a new award is substituted for the cancelled award,
and designated as a replacement award on the date that it is granted, the cancelled and new
awards are treated as if they were a modification of the original award, as described in the
previous paragraph. All cancellations of equity-settled transaction awards are treated equally.
The dilutive effect of outstanding options and non-vested shares are reflected as additional
share dilution in the computation of diluted earnings per share.
As disclosed in note 23 to the financial statements, the Group has set up the Trust for the
employee ownership scheme, where the Trust purchases Shares issued by the Group and the
consideration paid by the Company, including any directly attributable incremental costs, is
presented as “Shares held for employee ownership scheme” and deducted from the Group’s
equity.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance
of the arrangement at its inception and whether the fulfillment of the arrangement is dependent
on the use of a specific asset or the arrangement conveys a right to use the asset.
142 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Leases (continued)
Group as a lessee
Leases where substantially all the risks and benefits of ownership of the asset are not transferred
to the Group and remain with the lessor are classified as operating leases. Operating lease
payments are recognized as an operating expense in the consolidated statement of profit or
loss and other comprehensive income on the straight-line basis over the lease terms.
Group as a lessor
When an asset is leased out under an operating lease, the asset is included in the consolidated
statement of financial position based on the nature of the asset. Initial direct costs incurred
in negotiating an operating lease are added to the carrying amount of the leased asset and
recognized over the lease term on the same basis as rental income. Contingent rents are
recognized as revenue in the period in which they are earned.
Revenue recognition
Revenue is recognized to the extent that it is probable the economic benefits will flow to the
Group and the revenue can be reliably measured, regardless of when the payment is being
made. Revenue is measured at the fair value of the consideration received or receivable, taking
into account contractually defined terms of payment and excluding taxes or duties.
Casino revenues are measured by the aggregate net difference between gaming wins and
losses. Revenues are recognized net of certain sales incentives. Accordingly, the Group’s casino
revenues are reduced by commissions and points earned in customer loyalty programs.
Rooms, food and beverage, retail and other operating revenues are recognized when services
are performed or the retail goods are sold. Deposits received from customers in advance
on rooms or other services are recorded as liabilities until the services are provided to the
customers.
143Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue recognition (continued)
The retail value of accommodation, food and beverage, and other services furnished to guests
without charge is excluded from total operating revenues in the accompanying consolidated
statement of profit or loss and other comprehensive income. The amounts of such promotional
allowances excluded from total operating revenues are as follows:
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Rooms 1,046,785 848,987
Food and beverage 394,199 374,255
Retail and other 62,831 42,553
1,503,815 1,265,795
Retail and other revenue includes rental income which is recognized on a time proportion basis
over the lease terms. Contingent rental income is recognized when the right to receive such
rental income is established according to the lease agreements.
Finance revenue is accrued on a time basis by reference to the principal outstanding and at the
applicable interest rates.
144 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Taxes
Current income tax
Current income tax assets and liabilities are measured at the amounts expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted by the end of the reporting period, taking
into consideration interpretations and practices prevailing in the countries in which the Group
operates.
Deferred income tax
Deferred income tax is provided using the liability method on temporary differences at the end
of the reporting period between the tax basis of assets and liabilities and their carrying amounts
for financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of
an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries,
when the timing of the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable future.
145Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Taxes (continued)
Deferred income tax (continued)
Deferred income tax assets are recognized for all deductible temporary differences, the
carry forward of unused tax credits and any unused tax losses. Deferred tax assets are only
recognized to the extent that it is probable that taxable profits will be available against which
the deductible temporary differences and the carry forward of unused tax credits and unused
tax losses can be utilized, except:
• when the deferred income tax asset relating to the deductible temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and
• in respect of deductible temporary differences associated with investments in subsidiaries,
deferred income tax assets are recognized only to the extent it is probable the temporary
differences will reverse in the foreseeable future and taxable profits will be available
against which the temporary differences can be utilized.
The carrying amount of deferred income tax assets is reviewed at the end of each reporting
period and reduced to the extent that it is no longer probable that sufficient taxable profits will
be available to allow all or part of the deferred income tax asset to be utilized. Unrecognized
deferred income tax assets are reassessed at the end of each reporting period and are
recognized to the extent it has become probable that future taxable profits will allow the
deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to
apply in the year when the asset is realized or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted at the end of the reporting period.
Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable
right exists to set off current tax assets against current income tax liabilities and the deferred
income taxes relate to the same taxable entity and the same taxation authority.
146 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Gaming taxes and premiums
According to the Concession Agreement granted by the Macau government and the relevant
legislation, the Group is required to pay a 35% gaming tax on gross gaming win. The Group is
also required to pay an additional 4% of gross gaming win as public development and social
related contributions. The Group also makes certain variable and fixed payments to the Macau
government based on the number of slot machines and table games in operation on a monthly
and yearly basis, respectively. These expenses are reported as “gaming taxes and premiums” in
the consolidated statement of profit or loss and other comprehensive income.
Fine art
The Group’s fine art is stated at cost less any accumulated impairment. Any fine art impairment
is assessed based on the CGU to which it belongs. No impairment has been recognized for the
years ended 31 December 2016 and 2015.
Fine art is derecognized upon disposal. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of
the asset) is included in the consolidated statement of profit or loss and other comprehensive
income when the asset is derecognized.
Dividends
Final dividends are recognized as a liability when they are approved by the shareholders in a
general meeting.
Interim/special dividends are simultaneously proposed and declared because the Company’s
memorandum and articles of association grant the Directors the authority to declare interim/
special dividends. Consequently, interim/special dividends are recognized immediately as a
liability when they are proposed and declared.
Statutory reserve
In accordance with the provisions of the Macau Commercial Code, Wynn Macau, Limited’s
subsidiaries incorporated in Macau are required to transfer a minimum of 10% of their annual
net profit to a legal reserve until that reserve equals 25% of their issued capital. This reserve is
not distributable to shareholders.
147Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.3 IMPACT OF NEW AND REVISED IFRSs
The Group has adopted the following revised IFRSs for the first time for the current year’s
financial statements.
Amendments to IFRS 10,
IFRS 12 and IAS 28
Investment Entities: Applying the Consolidation
Exception
Amendments to IFRS 11 Accounting for Acquisitions of Interests in
Joint Operations
Amendments to IAS 1 Disclosure Initiative
Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of
Depreciation and Amortization
Amendments to IAS 27 Equity Method in Separate Financial Statements
Annual Improvements
2012–2014 Cycle
Amendments to a number of IFRSs
The adoption of the above revised standards has no significant financial effect on these financial
statements.
148 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.4 ISSUED BUT NOT YET EFFECTIVE IFRSs
The Group has not applied the following new and revised IFRSs, that have been issued but are
not yet effective, in these financial statements.
Amendments to IFRS 2 Classification and Measurement of Share-based
Payment Transactions2
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with
IFRS 4 Insurance Contracts2
IFRS 9 Financial Instruments2
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between
an Investor and its Associate or Joint Venture4
IFRS 15 Revenue from Contracts with Customers2
Amendments to IFRS 15 Clarifications to IFRS 15 Revenue from Contracts with
Customers2
IFRS 16 Leases3
Amendments to IAS 7 Disclosure Initiative1
Amendments to IAS 12 Recognition of Deferred Tax Assets for
Unrealized Losses1
IFRIC Interpretation 22 Foreign Currency Translations and
Advance Consideration2
Annual Improvements
2014–2016 Cycle
Amendments to a number of IFRSs1
1 Effective for annual periods beginning on or after 1 January 2017
2 Effective for annual periods beginning on or after 1 January 2018
3 Effective for annual periods beginning on or after 1 January 2019
4 No mandatory effective date yet determined but available for adoption
Further information about those IFRSs that are expected to be applicable to the Group is as
follows:
In July 2014, the IASB issued the final version of IFRS 9, bringing together all phases of the
financial instruments project to replace IAS 39 and all previous versions of IFRS 9. The standard
introduces new requirements for classification and measurement, impairment and hedge
accounting. The Group expects to adopt IFRS 9 from 1 January 2018. The Group is currently
assessing the impact of the standard.
149Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.4 ISSUED BUT NOT YET EFFECTIVE IFRSs (CONTINUED)
IFRS 15 establishes a new five-step model to account for revenue arising from contracts with
customers. Under IFRS 15, revenue is recognized at an amount that reflects the consideration
to which an entity expects to be entitled in exchange for transferring goods or services to a
customer. The principles in IFRS 15 provide a more structured approach for measuring and
recognizing revenue. The standard also introduces extensive qualitative and quantitative
disclosure requirements, including disaggregation of total revenue, information about
performance obligations, changes in contract asset and liability account balances between
periods and key judgements and estimates. The standard will supersede all current revenue
recognition requirements under IFRSs. In April 2016, the IASB issued amendments to IFRS 15 to
address the implementation issues on identifying performance obligations, application guidance
on principal versus agent and licences of intellectual property, and transition. The Group
expects to adopt IFRS 15 on 1 January 2018 and is currently assessing the impact of IFRS 15
upon adoption.
IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure
of leases and requires lessees to recognize assets and liabilities for most leases. The standard
includes two recognition exemptions for lessees — leases of low-value assets and short-term
leases. At the commencement date of a lease, a lessee will recognize a liability to make lease
payments (i.e., the lease liability) and an asset representing the right to use the underlying
asset during the lease term (i.e., the right-of-use asset). The right-of-use asset is subsequently
measured at cost less accumulated depreciation and any impairment losses unless the right-
of-use asset meets the definition of investment property in IAS 40. The lease liability is
subsequently increased to reflect the interest on the lease liability and reduced for the lease
payments. Lessees will be required to separately recognize the interest expense on the lease
liability and the depreciation expense on the right-of-use asset. Lessees will also be required to
remeasure the lease liability upon the occurrence of certain events, such as change in the lease
term and change in future lease payments resulting from a change in an index or rate used to
determine those payments. Lessees will generally recognize the amount of the remeasurement
of the lease liability as an adjustment to the right-of-use asset. Lessor accounting under IFRS 16
is substantially unchanged from the accounting under IAS 17. Lessors will continue to classify
all leases using the same classification principle as in IAS 17 and distinguish between operating
leases and finance leases. The Group expects to adopt IFRS 16 on 1 January 2019 and is
currently assessing the impact of IFRS 16 upon adoption.
150 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.5 SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES
The preparation of the Group’s consolidated financial statements requires management to
make judgments, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and their accompanying disclosures and the disclosure of
contingent liabilities. Uncertainty about these assumptions and estimates may result in
outcomes that may require a material adjustment to the carrying amount of the asset or liability
affected in the future. Key sources of estimation uncertainty and critical judgments in applying
the Group’s accounting policies, which have a significant effect on the financial statements are
set out below.
Useful lives of property and equipment
The useful lives of assets are based on management’s estimations. Management considers the
impact of changes in technology, customer service requirements, availability of capital funding
and the required return on assets and equity to determine the optimum useful life expectation
for each of the individual categories of property and equipment. The estimations of residual
values of assets are also based on management’s judgments as to whether the assets will
be sold or used to the end of their useful lives and what their condition will be like at that
time. Depreciation is calculated on the straight-line basis to write off the cost of each item
of property and equipment to its residual value over its estimated useful life. Management’s
periodic reviews on the estimations made could result in changes in depreciable lives and,
therefore, depreciation expense in future periods.
Impairment of non-financial assets
Management is required to make judgments concerning the cause, timing and amount
of impairments. In the identification of impairment indicators, management considers the
impact of changes in current competitive conditions, cost of capital, availability of funding,
technological obsolescence, discontinuance of services and other circumstances that could
indicate that an impairment exists. The Group applies the impairment assessments to its
separate CGUs. This requires management to make significant judgments concerning the
existence of impairment indicators, identification of separate CGUs’ remaining useful lives of
assets and estimates of projected cash flows and fair values less costs of disposal. For non-
financial assets other than goodwill, management’s judgments are also required when assessing
whether a previously recognized impairment loss should be reversed. Where impairment
indicators exist, the determination of the recoverable amount of a CGU requires management
to make assumptions to determine the fair value less costs of disposal and value in use. In
addition, for goodwill, the recoverable amount is estimated annually whether or not there is any
indication of impairment.
151Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.5 SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (CONTINUED)
Impairment of non-financial assets (continued)
Key assumptions on which management has based its determinations of fair values less costs of
disposal include the existence of binding sale agreements, and for the determination of values
in use include projected revenues, gross margins, and average revenue per asset component,
capital expenditures, expected customer base and market share. Management is also required
to choose suitable discount rates in order to calculate the present values of those cash flows.
Changes in key assumptions on which the recoverable amounts of assets are based could
significantly affect the Group’s financial condition and results of operations.
Impairment of accounts receivable
Management evaluates the reserve for bad debts based on specific reviews of customer
accounts as well as experience with collection trends in the casino industry and current
economic and business conditions. As customer payment experience evolves, management will
continue to refine the estimated reserve for bad debts. Accordingly, the associated charge for
provision for doubtful accounts may fluctuate. Because individual customer account balances
can be significant, the reserve and the provision can change significantly between periods, as
customer information becomes known or as changes in a region’s economy or legal systems
occur. Refer to note 14 for the carrying amount of the allowances for accounts receivables as at
the respective year ends.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision-makers, who are responsible for allocating resources and assessing
performance of the operating segments and making strategic decisions. For management
purposes, during the year ended 31 December 2016, the Group reviews Wynn Macau and Wynn
Palace as two reportable segments.
Fair value estimation — financial assets and liabilities
Financial assets and liabilities are recognized or disclosed at fair values. The fair values of
financial instruments traded in active markets are based on quoted market prices. In assessing
the fair values of non-traded instruments, discounted cash flows or market assessments
are used. The nominal values less any estimated credit realizable value adjustments for
financial assets and liabilities with a maturity of less than one year, including trade and other
receivables, other payables or current borrowings, are assumed to approximate their fair values.
Management determines these assumptions by reviewing current market rates, making industry
comparisons and reviewing conditions relevant to the Group.
152 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
2.5 SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (CONTINUED)
Fair value estimation — Black-Scholes pricing model
The Group uses the Black-Scholes pricing model to value Wynn Resorts, Limited’s and Wynn
Macau, Limited’s grants of options issued. The Black-Scholes pricing model uses assumptions
of expected volatility, risk-free interest rates, the expected terms of options granted, and
expected rates of dividends. Changes in these assumptions could materially affect the
estimated fair values. Expected volatility is based on implied and historical factors related to
Wynn Resorts, Limited’s and Wynn Macau, Limited’s common stock. Expected term represents
the weighted average time between the option’s grant date and its exercise date. The risk-free
interest rate used is equal to the U.S. Treasury yield curve and the Hong Kong Exchange Fund
Bills for the WRL Omnibus Plan and Wynn Macau, Limited’s share option scheme, respectively,
at the time of grant for the period equal to the expected term.
Income taxes
Income taxes represent the sum of income taxes currently payable and any deferred taxes. The
calculation of deferred income taxes and any associated tax reserve is subject to a significant
amount of judgment. The Group’s income tax returns may be examined by governmental
authorities. Accordingly, the Group reviews any potentially unfavorable tax outcome and,
when an unfavorable outcome is identified as probable and can be reasonably estimated, a tax
reserve is established.
Gaming promoters’ commission allocation
A significant amount of the Group’s casino play is brought to the Group by gaming promoters,
as gaming promoters introduce premium VIP casino players to the Group’s resorts. In exchange
for the gaming promoters’ services, the Group pays the gaming promoters a commission, which
is a percentage of the gross gaming win generated by each gaming promoter.
Management is required to make judgments concerning the classification of commissions
between the portion returned to the VIP casino players by the gaming promoters, which are
netted against the Group’s casino revenue, and the portion used by the gaming promoters for
operations of their businesses, which are included in the Group’s other operating expenses.
In determining the allocation percentage between the profit or loss accounts, management
considers the commissions paid to gaming promoters, historical VIP table games win and
inquiries made to the gaming promoters by management regarding their commissions returned
to VIP players. Accordingly, management reviews the estimate of such allocation percentages
annually. Further details of the total amount of commissions paid to gaming promoters that are
included in other operating expenses are given in note 3.2.
153Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
3. OTHER REVENUES AND EXPENSES
3.1 Staff costs
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Wages and salaries 3,297,689 2,557,286
Other costs and benefits 372,728 302,847
Expense of share-based payments 117,894 128,031
Retirement plan contributions 101,211 87,515
Employee relations and training 46,059 35,722
Social security costs 12,254 10,015
3,947,835 3,121,416
“Other costs and benefits” includes residential rental expense for operating staff of
approximately HK$65.2 million for the year ended 31 December 2016 (2015: HK$32.4
million).
154 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
3. OTHER REVENUES AND EXPENSES (CONTINUED)
3.2 Other operating expenses
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Gaming promoters’ commissions 1,025,887 881,883
License fees 846,486 730,890
Advertising and promotions 363,029 212,462
Cost of sales 339,008 299,810
Operating supplies and equipment 290,489 155,121
Utilities and fuel 280,002 192,323
Repairs and maintenance 276,576 189,652
Corporate support services and other 140,803 82,634
Operating rental expenses 63,770 60,077
Other support services 40,210 50,629
Provision for doubtful accounts, net 8,486 63,419
Auditor’s remuneration 6,949 5,574
Other expenses 575,974 305,509
4,257,669 3,229,983
155Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
3. OTHER REVENUES AND EXPENSES (CONTINUED)
3.3 Depreciation and amortization
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Depreciation of property and equipment 1,496,067 905,043
Amortization of leasehold interest in land 95,330 95,330
1,591,397 1,000,373
Depreciation and amortization expenses of approximately HK$3,423,000 and HK$841,000,
respectively, for the year ended 31 December 2016 (2015: HK$3,423,000 and HK$841,000,
respectively) are excluded from the table above and are classified as staff costs and
included in other costs and benefits in note 3.1 to the financial statements. Such balances
are related to a home purchased by WRM for use by one of the Group’s executives as
described in note 27 to the financial statements.
3.4 Property charges and other
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Loss on disposals and abandonment of assets, net 24,814 11,599
3.5 Finance revenues
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Interest income from cash at banks 24,174 31,199
156 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
3. OTHER REVENUES AND EXPENSES (CONTINUED)
3.6 Finance costs
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Interest expense 1,128,575 884,056
Amortization of debt financing costs 130,625 94,232
Bank fees for unused facilities 11,786 43,361
Less: capitalized interest (432,931) (426,021)
838,055 595,628
The interest was capitalized using a weighted average rate of 2.90% for the year ended 31
December 2016 (2015: 3.17%).
4. INTEREST RATE SWAPS
As at 31 December 2016, the Group had three interest rate swap agreements. Under two of
the swap agreements, the Group paid a fixed interest rate of 0.73% on total Hong Kong dollar
borrowings of approximately HK$3.95 billion incurred under the Wynn Macau Credit Facilities
in exchange for receipts on the same amount at a variable interest rate based on the applicable
HIBOR at the time of payment. As at 31 December 2016, these two interest rate swaps fixed
the interest rate on approximately HK$3.95 billion of borrowings under the Wynn Macau Credit
Facilities at 2.23% to 2.98% (2015: 2.23% to 2.98%).
Under the third swap agreement, the Group paid a fixed interest rate of 0.6763% on U.S. dollar
borrowings of US$243.8 million (approximately HK$1.8 billion) incurred under the Wynn Macau
Credit Facilities in exchange for receipts on the same amount at a variable interest rate based
on the applicable LIBOR at the time of payment. As at 31 December 2016, this interest rate
swap fixed the interest rate on US$243.8 million (approximately HK$1.8 billion) of borrowings
under the Wynn Macau Credit Facilities at 2.18% to 2.93% (2015: 2.18% to 2.93%).
All three of the above swap agreements will expire in July 2017.
157Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
4. INTEREST RATE SWAPS (CONTINUED)
The carrying value of the interest rate swaps on the consolidated statement of financial position
approximates their fair value. The fair value approximates the amount that the Group would
pay or receive if these contracts were settled at the respective valuation dates. Fair value
is estimated based upon current and predictions of future interest rate levels along a yield
curve, the remaining duration of the instrument and other market conditions and, therefore,
is subject to significant estimation and a high degree of variability of fluctuation between
periods. The Group adjusts this amount by applying a non-performance valuation, considering
its creditworthiness or the creditworthiness of its counterparties at the settlement dates, as
applicable. These transactions do not qualify for hedge accounting and accordingly, changes in
fair value are charged to the consolidated statement of profit or loss and other comprehensive
income.
The Group’s liabilities under the swap agreements are secured by the same collateral package
securing the Wynn Macau Credit Facilities.
5. INCOME TAX EXPENSE
The major components of the income tax expense for the years ended 31 December 2016 and
2015 were:
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Income tax expense:
Current — overseas 12,427 15,049
Deferred — overseas — (8,587)
12,427 6,462
No provision for Hong Kong profits tax for the year ended 31 December 2016 has been made
as there was no assessable profit generated in Hong Kong (2015: nil). Taxation for overseas
jurisdictions is charged at the appropriate prevailing rates ruling in the respective jurisdictions
and the maximum rate is 12% (2015: 12%).
158 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
5. INCOME TAX EXPENSE (CONTINUED)
The tax position for the years ended 31 December 2016 and 2015 reconciles to profit before tax
as follows:
For the year ended 31 December
2016 2015
HK$ % HK$ %
(in thousands, except for percentages)
Profit before tax 1,447,959 2,416,860
Tax at the applicable
income tax rate 173,755 12.0 290,023 12.0
Income not subject to tax (545,982) (37.7) (554,543) (22.9)
Macau dividend tax 12,427 0.9 15,049 0.6
Deferred tax
not recognized 276,334 19.1 166,845 6.9
Others 95,893 6.6 89,088 3.7
Effective tax expense
for the year 12,427 0.9 6,462 0.3
159Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
5. INCOME TAX EXPENSE (CONTINUED)
Deferred income tax as at 31 December 2016 and 2015 relates to the following:
Consolidated Statement of
Financial Position as at
31 December
Consolidated Statement of
Profit or Loss and
Other Comprehensive Income
for the Year Ended
31 December
2016 2015 2016 2015
HK$ HK$ HK$ HK$
(in thousands)
Deferred tax liabilities:
Property, equipment and
other (87,716) (59,534) 28,182 39,748
Interest rate swap market
value adjustment (983) (581) 402 (4,929)
(88,699) (60,115)
Deferred income tax assets:
Pre-opening costs and
other 103,569 110,176 6,607 (50,990)
University of Macau
Development
Foundation contribution 10,085 11,491 1,406 1,338
Tax losses carried forward 492,693 272,030 (220,663) (39,627)
Executive compensation 2,427 2,055 (372) (373)
Property, equipment and
other 237,468 219,518 (17,950) (38,820)
Share-based payment plan 11,792 10,646 (1,146) (3,214)
Less: allowances (769,335) (565,801) 203,534 88,280
88,699 60,115
Deferred income tax
benefit — (8,587)
Deferred tax liability, net — —
160 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
5. INCOME TAX EXPENSE (CONTINUED)
The Group incurred Macau tax losses of approximately HK$2.4 billion, HK$964.6 million and
HK$699.5 million during the tax years ended 31 December 2016, 2015 and 2014, respectively.
These tax losses will expire in 2019, 2018 and 2017, respectively. As at 31 December 2016, the
Group’s deferred tax assets relating to the pre-opening costs and other, University of Macau
Development Foundation contribution, share-based payment plan, executive compensation,
fixed assets and tax loss carryforwards amounting to HK$769.3 million (2015: HK$565.8 million)
were not recognized as the Group determined it was not probable that future taxable profits
will be available against which the deferred tax assets could be utilized.
On 30 November 2010, WRM received a 5-year exemption from Macau’s 12% Complementary
Tax on casino gaming profits (the “Tax Holiday”) effective through 31 December 2015. On
15 October 2015, WRM received an additional 5-year exemption effective from 1 January
2016 through 31 December 2020. Accordingly, the Group was exempted from the payment
of approximately HK$211.1 million in such tax for the year ended 31 December 2016
(2015: HK$321.0 million). The Group’s non-gaming profits remain subject to the Macau
Complementary Tax and its casino winnings remain subject to the Macau special gaming tax
and other levies in accordance with its Concession Agreement.
In August 2011, WRM renewed the WRM Shareholder Dividend Tax Agreement with the Macau
government that provided for annual payments of MOP15.5 million (approximately HK$15.0
million) to the Macau government in lieu of Complementary Tax on dividend distributions to
its shareholders from gaming profits for each of the years 2011 through 2015. In August 2016,
the 5-year extension was granted with an annual payment of MOP12.8 million (approximately
HK$12.4 million) due to the Macau government for each of the years 2016 through 2020.
161Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
5. INCOME TAX EXPENSE (CONTINUED)
The Group is exempted from income tax in the Isle of Man and the Cayman Islands. The
Group’s subsidiaries file income tax returns in Macau and various foreign jurisdictions as
required by law. The Group’s income tax returns are subject to examination by tax authorities in
the locations where it operates. The Group’s 2012 to 2015 Macau Complementary Tax returns
remain subject to examination by the Financial Services Bureau of the Macau government
(the “Financial Services Bureau”). In June 2015, the Financial Services Bureau commenced an
examination of the 2012 Macau Complementary Tax returns for WRM and in November 2015,
the Financial Services Bureau issued its tax assessment for the year 2012. While no additional
tax was due, adjustments were made to WRM’s tax loss carryforwards. In April 2016, the
Financial Services Bureau examined the 2011 and 2012 Macau Complementary Tax returns of
Palo. In June 2016, the Financial Services Bureau issued its final tax assessments for Palo for the
years 2011 and 2012 and the examination resulted in no change to the tax returns.
Quarterly, the Group undertakes reviews for any potentially unfavorable tax outcomes and
when an unfavorable outcome is identified as being probable and can be reasonably estimated,
the Group then establishes a tax reserve for such possible unfavorable outcome. Estimating
potential tax outcomes for any uncertain tax issues is highly judgmental and may not be
indicative of the ultimate settlement with the tax authorities.
As at 31 December 2016, the Group had unrecognized tax losses of HK$4.1 billion (2015:
HK$2.2 billion) and the Group believes that these unrecognized tax losses are adequate to
offset any adjustments that might be proposed by the Macau tax authorities. The Group
believes that it has adequately provided reasonable reserves for prudent and foreseeable
outcomes related to uncertain tax matters.
162 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
6. DIVIDENDS
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Special dividend of HK$0.60 per Share for 2015
(2014: HK$1.05 per Share) 3,109,263 5,446,461
The Board has recommended that a final dividend of HK$0.42 per Share in respect of the year
ended 31 December 2016, which is subject to Shareholders’ approval at the forthcoming annual
general meeting of the Company.
7. EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY
The calculation of basic earnings per Share for the year ended 31 December 2016 is based
on the consolidated net profit attributable to owners of the Company and on the weighted
average number of Shares in issue of 5,180,191,705 during the year (2015: 5,186,778,378),
excluding Shares reserved and purchased for the Company’s employee ownership scheme.
Shares of 5,500,800 (2015: Shares of 3,091,000) were purchased and none of Shares (2015: nil)
were issued and reserved for the Company’s employee ownership scheme during the year.
The calculation of diluted earnings per Share for the year ended 31 December 2016 is based
on the consolidated net profit attributable to owners of the Company and on the weighted
average number of Shares of 5,181,398,605 (2015: 5,186,943,827) including the weighted
average number of Shares in issue of 5,180,191,705 during the year (2015: 5,186,778,378) plus
the weighted average number of potential Shares of 1,206,900 (2015: 165,449) arising from
the deemed exercise of share options and deemed vesting of awards under the Company’s
employee ownership scheme (see also note 23).
163Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
8. SEGMENT INFORMATION
The Group’s principal operating activities occur in Macau, which is the sole geographic area
in which the Group is domiciled. The Group reviews the results of operations for each of
its operating segments. Wynn Macau and Encore at Wynn Macau are managed as a single
integrated resort and are aggregated as one operating segment, which is also a reportable
segment (“Wynn Macau”). Wynn Palace, which opened on 22 August 2016, is managed as an
operating segment and a separate reportable segment. The Group identifies each integrated
resort as a reportable segment considering operations within each integrated resort have
similar economic characteristics, type of customers, types of services and products, the
regulatory environment of the operations and the Group’s organizational and management
reporting structure. Other Macau primarily represents cash held at the Company.
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Net Revenue
Wynn Macau 17,571,496 19,096,365
Wynn Palace 4,527,982 —
Total 22,099,478 19,096,365
164 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
8. SEGMENT INFORMATION (CONTINUED)
For the year ended
31 December
2016 2015
HK$ HK$
Notes (in thousands)
Adjusted EBITDA
Wynn Macau 4,521,787 4,681,249
Wynn Palace 583,637 —
5,105,424 4,681,249
Other operating costs and expenses
Depreciation and amortization 3.3 1,591,397 1,000,373
Pre-opening costs# 1,003,521 425,223
Property charges and other 3.4 24,814 11,599
Share-based payments 3.1 117,894 128,031
Wynn Macau, Limited corporate expenses 103,266 83,964
Operating profit 2,264,532 3,032,059
Non-operating income and expenses
Finance revenues 3.5 24,174 31,199
Finance costs 3.6 (838,055) (595,628)
Net foreign currency differences (6,051) 12,853
Change in fair value of interest rate swaps 4 3,359 (41,078)
Loss on extinguishment of debt — (22,545)
Profit before tax 1,447,959 2,416,860
Income tax expense 5 12,427 6,462
Net profit attributable to owners of the Company 1,435,532 2,410,398
# Pre-opening costs represent personnel and other costs incurred prior to the opening of Wynn Palace and
are expensed as incurred. Wynn Palace opened on 22 August 2016.
165Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
8. SEGMENT INFORMATION (CONTINUED)
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Capital expenditures
Wynn Palace 6,553,333 12,153,005
Wynn Macau 236,310 555,487
Other Macau — 1,642
Total 6,789,643 12,710,134
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Total assets
Wynn Palace 33,320,609 26,618,462
Wynn Macau 9,537,765 11,398,086
Other Macau 87,099 4,266,959
Total 42,945,473 42,283,507
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Non-current assets
Macau 38,964,048 34,235,520
Foreign countries 13,346 18,358
Total 38,977,394 34,253,878
166 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
9. PROPERTY AND EQUIPMENT AND CONSTRUCTION IN PROGRESS
A summary of the property and equipment and construction in progress is set forth below.
Buildings and
Improvements
Furniture
Fixtures and
Equipment
Leasehold
Improvements
Construction
in Progress
Total
Property and
Equipment
HK$ HK$ HK$ HK$ HK$
(in thousands)
Cost:
As at 1 January 2015 9,611,197 2,570,255 76,446 12,890,783 25,148,681
Additions 21,039 142,938 4,169 12,637,222 12,805,368
Transfers 712,475 189,177 930 (902,582) —
Abandonments/disposals (33,875) (67,287) — (3,670) (104,832)
As at 31 December 2015 and
1 January 2016 10,310,836 2,835,083 81,545 24,621,753 37,849,217
Additions 2,844,954 354,286 — 3,116,917 6,316,157
Transfers 25,156,182 2,513,448 1,051 (27,670,681) —
Abandonments/disposals (68,796) (79,288) (55,244) (5,118) (208,446)
As at 31 December 2016 38,243,176 5,623,529 27,352 62,871 43,956,928
Depreciation:
As at 1 January 2015 3,794,366 2,128,745 30,716 — 5,953,827
Depreciation charged for the year 691,502 188,372 28,592 — 908,466
Abandonments/disposals (18,914) (66,060) — — (84,974)
As at 31 December 2015 and
1 January 2016 4,466,954 2,251,057 59,308 — 6,777,319
Depreciation charged for the year 1,067,823 416,401 15,266 — 1,499,490
Abandonments/disposals (46,320) (76,554) (55,063) — (177,937)
As at 31 December 2016 5,488,457 2,590,904 19,511 — 8,098,872
Net carrying amount:
As at 31 December 2016 32,754,719 3,032,625 7,841 62,871 35,858,056
As at 31 December 2015 5,843,882 584,026 22,237 24,621,753 31,071,898
As at 1 January 2015 5,816,831 441,510 45,730 12,890,783 19,194,854
167Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
10. LEASEHOLD INTERESTS IN LAND
The Group has the leasing rights for certain land in Macau peninsula under a 25-year
concession, which will expire in August 2029, granted by the Macau government in return for
the payment of a premium, all installments of which were paid before 31 December 2009.
In 2011, the Group formally accepted the draft terms and conditions of a 25-year land
concession from the Macau government for the Cotai Land. The land premium of MOP1.55
billion (approximately HK$1.50 billion) comprises a down payment of MOP500.0 million
(approximately HK$485.4 million), made in December 2011, and eight additional semi-annual
payments of MOP130.9 million (approximately HK$127.1 million) each, including 5% interest
as required by the Macau government. The first of the eight semi-annual payments was paid
in November 2012, six months after the publication of the Cotai Land concession in the official
gazette of Macau and the final payment was made in April 2016. With the completion of Wynn
Palace on 22 August 2016, the Group is required to make annual lease payments of MOP 8.6
million (approximately HK$8.4 million).
Land concessions in Macau are generally renewable for additional periods, subject to applicable
legislation.
Leasehold interests in land which recognize the premiums and other capitalized costs are set
forth below.
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Cost:
At beginning and end of the year 2,384,022 2,384,022
Amortization:
At beginning of the year 505,228 409,057
Amortization charge for the year 96,171 96,171
At end of the year 601,399 505,228
Net carrying amount 1,782,623 1,878,794
168 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
11. GOODWILL
In September 2004, the Group acquired all of the 17.5% indirect ownership interests in WRM
held by third parties, in exchange for 1,333,333 shares of Wynn Resorts, Limited’s common
stock. As a result of the acquisition, WRM became an indirectly wholly owned subsidiary of the
Group.
In accordance with the Group’s accounting policy for the acquisition of non-controlling
interests, the assets and liabilities of WRM were not restated to reflect their fair values at the
date of the acquisition. The difference between the purchase price and the non-controlling
share of the assets and liabilities reflected within the consolidated statement of financial
position of HK$398.3 million at the date of the acquisition was recorded as goodwill.
The recoverable amount of a CGU has been determined based on value-in-use calculations.
These calculations use pre-tax cash flow projections based on financial budgets approved
by management covering a five-year period. Cash flows beyond the five-year period are
extrapolated using an estimated weighted average growth rate of 3% that is determined based
on past performance and expectations for market development. The weighted average growth
rate used is consistent with the forecasts used in the industry. The discount rate applied to
the cash flow projections is 7.60% (2015: 8.66%). The discount rate used is pre-tax and reflects
specific risks relating to the Group.
During the year ended 31 December 2016, there was no impairment of any of its CGUs
containing goodwill with indefinite useful lives (2015: nil).
169Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
12. OTHER NON-CURRENT ASSETS
Other non-current assets consisted of the following as at 31 December 2016 and 2015:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Fine art 387,565 108,764
China, glass, silverware and other 278,070 111,207
Prepayment and deposits 243,531 355,667
Memberships 1,020 1,020
910,186 576,658
13. INVENTORIES
Inventories consisted of the following as at 31 December 2016 and 2015:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Operating supplies 133,671 78,407
Retail merchandise 133,134 60,143
Food and beverage 71,218 41,275
338,023 179,825
170 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
14. TRADE AND OTHER RECEIVABLES
Trade and other receivables consisted of the following as at 31 December 2016 and 2015:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Casino 806,824 570,244
Retail leases and other 91,155 102,493
Hotel 30,309 5,014
928,288 677,751
Less: allowance for doubtful accounts (195,287) (220,023)
Total trade and other receivables, net 733,001 457,728
An aged analysis of trade and other receivables is as follows:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Within 30 days 241,472 143,849
31 to 60 days 121,638 80,666
61 to 90 days 90,837 17,080
Over 90 days 474,341 436,156
928,288 677,751
Less: allowance for doubtful accounts (195,287) (220,023)
Net trade and other receivables 733,001 457,728
171Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
14. TRADE AND OTHER RECEIVABLES (CONTINUED)
The advanced commissions are on terms requiring settlement within five business days of
the month following the advance. Except for the advanced commission, the trade and other
receivables are generally repayable within 14 days.
As at 31 December 2016, trade and other receivables with a gross value of HK$928.3 million
(2015: HK$677.8 million) were partially impaired and provided for. Movements in the provision
for impairment of receivables of the Group, which were collectively impaired, are as follows:
HK$
(In thousands)
As at 1 January 2015 154,753
Charge for the year, net 63,419
Reversal of amounts written off, net 1,851
As at 31 December 2015 and 1 January 2016 220,023
Charge for the year, net 8,486
Amounts written off, net (33,222)
As at 31 December 2016 195,287
172 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
15. PREPAYMENTS AND OTHER CURRENT ASSETS
Prepayments and other current assets consisted of the following as at 31 December 2016 and
2015:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Prepayments 97,682 79,952
Deposits 30,914 18,721
128,596 98,673
None of the above assets are either past due or impaired. The financial assets included in the
above balances relate to deposits for which there have been no recent histories of defaults.
16. RESTRICTED CASH AND CASH EQUIVALENTS
As at 31 December 2016, the Group had total restricted cash and cash equivalents of HK$22.1
million (2015: HK$16.0 million) reserved at the Trust to fund the WML employee ownership
scheme.
17. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consisted of the following as at 31 December 2016 and 2015:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Cash at banks and short-term deposits 1,613,935 6,137,383
Cash on hand 977,507 593,973
2,591,442 6,731,356
173Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
17. CASH AND CASH EQUIVALENTS (CONTINUED)
The cash and cash equivalents are denominated in the following currencies:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
HK$ 1,969,899 2,801,478
US$ 549,706 3,890,054
MOP 64,649 27,088
Renminbi 2,827 803
Euro 1,800 5,371
Singapore Dollar 1,663 6,141
Other 898 421
2,591,442 6,731,356
Cash deposited at banks earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and three months,
depending on the immediate cash requirements of the Group, and earn interest at the
respective short-term deposit rates.
18. ACCOUNTS PAYABLE
During 2016 and 2015, the Group normally received credit terms of 30 days. An aged analysis
of accounts payable as at 31 December 2016 and 2015, based on invoice dates, is as follows:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Within 30 days 391,409 243,083
31 to 60 days 44,384 31,597
61 to 90 days 30,352 20,308
Over 90 days 59,356 50,606
525,501 345,594
174 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
19. OTHER PAYABLES AND ACCRUALS
Other payables and accruals consisted of the following as at 31 December 2016 and 2015:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Current:
Outstanding chip liabilities 2,102,057 1,737,443
Customer deposits 1,758,819 959,910
Gaming taxes payable 1,175,553 673,937
Donation payable 77,670 77,670
Others 751,916 554,104
5,866,015 4,003,064
Non-current:
Donation payable 325,022 381,178
Total 6,191,037 4,384,242
20. INTEREST-BEARING BORROWINGS
As at 31 December
2016 2015
Notes HK$ HK$
(in thousands)
Bank loans, secured (a) 22,003,178 21,225,648
Senior notes, unsecured (b) 10,498,819 10,498,488
32,501,997 31,724,136
Less: debt financing costs, net (332,109) (406,217)
Total interest-bearing borrowings 32,169,888 31,317,919
175Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
20. INTEREST-BEARING BORROWINGS (CONTINUED)
The borrowings are repayable as follows:
As at 31 December
2016 2015
Notes HK$ HK$
(in thousands)
Bank loans: (a)
In the second to fifth years, inclusive 22,003,178 9,660,861
After the fifth year — 11,564,787
22,003,178 21,225,648
Less: debt financing costs, net (250,622) (310,215)
21,752,556 20,915,433
Senior notes: (b)
In the second to fifth years, inclusive 10,498,819 —
After the fifth year — 10,498,488
Less: debt financing costs, net (81,487) (96,002)
10,417,332 10,402,486
Notes:
(a) Bank loans, secured
Wynn Macau Credit Facilities
As at 31 December 2016, the Wynn Macau Credit Facilities consisted of approximately HK$23.7 billion
equivalent in a combination of Hong Kong dollar and U.S. dollar facilities, including an approximately
HK$17.9 billion equivalent fully funded senior term loan facility and an approximately HK$5.8 billion
equivalent senior revolving credit facility.
The borrowings under the Wynn Macau Credit Facilities were used to refinance WRM’s indebtedness in
September 2015 and the balance was used for a variety of purposes, including to fund the construction and
development of Wynn Palace and for general corporate purposes.
176 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
20. INTEREST-BEARING BORROWINGS (CONTINUED)
Notes: (continued)
(a) Bank loans, secured (continued)
Wynn Macau Credit Facilities (continued)
The HK$17.9 billion equivalent term loan facility is repayable in graduating installments of between 2.50%
to 7.33% of the principal amount on a quarterly basis commencing December 2018, with a final installment
of 50% of the principal amount repayable in September 2021. The final maturity of any outstanding
borrowings from the revolving credit facility is September 2020, by which time any outstanding borrowings
from the revolving loans must be repaid.
The borrowings under the Wynn Macau Credit Facilities bear interest at LIBOR or HIBOR plus a margin of
1.50% to 2.25% per annum based on WRM’s leverage ratio. Customary fees and expenses were paid by
WRM in connection with the Wynn Macau Credit Facilities.
Borrowings under the Wynn Macau Credit Facilities are guaranteed by Palo and by certain subsidiaries of
the Company that own equity interests in WRM, and are secured by substantially all of the assets of, and
equity interests in WRM and Palo.
The Wynn Macau Credit Facilities contain representations, warranties, covenants and events of default
customary for casino development financings in Macau.
The Company is not a party to the credit facilities agreement and related agreements and has no rights or
obligations thereunder.
In connection with the initial financing of the Wynn Macau project, the Group entered into a bank
guarantee reimbursement agreement with Banco Nacional Ultramarino, S.A. (“BNU”) to secure a guarantee
currently in the amount of MOP300 million (approximately HK$291.3 million) until 180 days after the end of
the term of the Concession Agreement. This guarantee, which is for the benefit of the Macau government,
assures certain aspects of the Group’s performance under the Concession Agreement, including the
payment of premiums, fines and indemnities for any material failures to perform under the terms of the
Concession Agreement. BNU, as issuer of the guarantee, is currently secured by a second priority security
interest in the senior lender collateral package. After repayment of all indebtedness under the WRM’s
credit facilities, the Group is obligated to promptly, upon demand by BNU, repay any claims made on the
guarantee by the Macau government. The Group paid an annual fee to BNU of approximately MOP2.3
million (approximately HK$2.2 million) for the guarantee during 2016.
As at 31 December 2016, the Group had HK$3.2 billion in funding available under the revolving credit
facility of the Wynn Macau Credit Facilities.
177Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
20. INTEREST-BEARING BORROWINGS (CONTINUED)
Notes: (continued)
(a) Bank loans, secured (continued)
WMLF Revolving Credit Facility
On 18 July 2016, WMLF entered into an agreement as the borrower for a revolving credit facility for
initially up to HK$1.5 billion (approximately US$199.7 million) with Bank of China Limited, Macau Branch as
the lender.
Borrowings under the WMLF Revolving Credit Facility are secured by pledged US$ deposits of initially up
to US$200.0 million (approximately HK$1.6 billion) placed by WRL in a pledged account at Bank of China
Limited, Macau Branch.
Borrowings under the WMLF Revolving Credit Facility are used for working capital requirements and
general corporate purposes.
The final maturity of any outstanding borrowings under the WMLF Revolving Credit Facility is 18 July 2018,
by which time any outstanding borrowings must be repaid in full.
The borrowings under the WMLF Revolving Credit Facility bear interest initially at 1.50% per annum, such
rate calculated as the interest rate paid by Bank of China Limited, Macau Branch to WRL in respect of the
US$ deposits in the pledged account at Bank of China Limited, Macau Branch plus a margin of 0.40%.
Under the terms of the agreement, mandatory repayment is required upon a change in control or material
adverse effect (as defined in the agreement).
On 25 October 2016, the WMLF Revolving Credit Facility was amended and upsized, increasing the
available borrowing capacity to HK$3.9 billion (approximately US$499.0 million). The terms of borrowing
for the increased principal amount under the amendment are equivalent to the terms of the original credit
agreement, including the requirement for cash collateral to be deposited and pledged with the lender, and
interest borne at the same rate as described above.
As at the 31 December 2016, the Group had HK$2.4 billion available borrowing capacity under the
amended WMLF Revolving Credit Facility. Subsequent to 31 December 2016, the Group repaid all
outstanding borrowings of HK$1.5 billion under the WMLF Revolving Credit Facility.
178 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
20. INTEREST-BEARING BORROWINGS (CONTINUED)
Notes: (continued)
(b) Senior notes, unsecured
The Company issued 5.25% fixed rate, unsecured senior notes due 15 October 2021 for an aggregate
principal amount of US$1.35 billion (approximately HK$10.5 billion). The Company used the net proceeds
from the offering of the WML 2021 Notes for working capital requirements and general corporate
purposes. The WML 2021 Notes are listed on the Hong Kong Stock Exchange.
21. ISSUED CAPITAL AND SHARES HELD FOR EMPLOYEE OWNERSHIP SCHEME
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Authorized:
20,000,000,000 Shares of HK$0.001 each 20,000 20,000
Issued and fully paid:
5,195,525,000 (2015: 5,195,525,000) Shares of
HK$0.001 each 5,196 5,196
As at 31 December 2016, the total number of issued Shares included 7,511,000 Shares (2015:
7,511,000) held under the employee ownership scheme (note 23).
During the year ended 31 December 2016, the Trust acquired 5,500,800 Shares (2015:
3,091,000 Shares) for HK$58.8 million (2015: HK$34.0 million), which was deducted from
shareholders’ equity.
179Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
22. SHARE PREMIUM ACCOUNT AND RESERVES
The Group’s share premium account mainly represents the difference between the nominal
value of the shares of the subsidiaries acquired pursuant to the Group Reorganization prior to
the Listing of the Company’s Shares, over the nominal value of the Company’s Shares issued in
exchange therefore with adjustments arising from the Group Reorganization.
The amount of the Group’s reserves and the movements therein for the current and prior years
are presented in the consolidated statement of changes in equity on page 122 of the financial
statements.
In accordance with the provisions of the Macau Commercial Code, the Company’s subsidiaries
incorporated in Macau are required to transfer a minimum of 10% of the annual net profit to a
legal reserve until that reserve equals 25% of their issued capital. The Company’s subsidiaries
met this statutory requirement and WRM continues to maintain the required reserve of HK$48.6
million in “statutory reserve”. This reserve is not distributable to the respective shareholders.
23. SHARE-BASED PAYMENT PLAN
The Company’s share option scheme
The Company established a share option scheme on 16 September 2009 for the purpose of
rewarding participants, which may include Directors and employees of the Group who have
contributed to the Group and to encourage them to work towards enhancing the value of the
Company and its Shares for the benefit of the Company and its Shareholders as a whole. Under
the rules of the share option scheme, the maximum number of Shares which can be issued upon
exercise of all options granted under the share option scheme and of the Company shall not,
in the absence of Shareholders’ approval, in aggregate exceed 10% in nominal amount of the
aggregate of Shares in issue on the date of the listing of the Shares on the Hong Kong Stock
Exchange (the “Scheme Mandate Limit”); and the Scheme Mandate Limit may be renewed
subject to Shareholders’ approval. A maximum of 518.8 million Shares (2015: 518.8 million
Shares) have been reserved for issuance under the share option scheme. The options granted
under the share option scheme do not give immediate ownership of the underlying Shares as
they require payment of a subscription price, which is based on the then prevailing market price
of the Shares on the respective grant date.
180 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
23. SHARE-BASED PAYMENT PLAN (CONTINUED)
The Company’s share option scheme (continued)
The following share options were outstanding under the share option scheme during the year:
Number of
options
Weighted
average
exercise price
Weighted
average
exercise term
(HK$) (Years)
Outstanding as at 1 January 2015 3,090,000 22.37 7.5
Granted during the year 1,268,000 15.46 9.4
Outstanding as at 31 December 2015 and
1 January 2016 4,358,000 20.36 7.3
Granted during the year 1,932,000 11.58 9.4
Outstanding as at 31 December 2016 6,290,000 17.66 7.3
Shares exercisable as at
31 December 2016 2,485,200 20.20 5.4
Shares exercisable as at 31 December 2015 1,710,800 19.48 5.8
The fair value of the share options granted during the year was estimated at HK$2.41 per
option (2015: HK$3.68 per option) based on the Black-Scholes pricing model. The following
table lists the significant inputs used in estimating the fair value per option on the date of grant.
2016 2015
Expected dividend yield 6.3% 5.0%
Expected stock price volatility 42.6% 41.3%
Risk-free interest rate 1.0% 1.3%
Expected average life of options (years) 6.5 6.5
Share price on the date of grant (HK$ per Share) 11.58 15.46
Exercise price (HK$ per Share) 11.58 15.46
Changes in subjective input assumptions could materially affect the fair value estimate.
181Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
23. SHARE-BASED PAYMENT PLAN (CONTINUED)
The Company’s employee ownership scheme
On 30 June 2014, the Company approved and adopted the employee ownership scheme.
The employee ownership scheme allows for the grant of non-vested Shares of the Company’s
common stock to eligible employees. The employee ownership scheme is administered by
the Company’s Board of Directors and has been mandated under the plan to allot, issue and
procure the transfer of a maximum of 50,000,000 Shares. The Board of Directors has discretion
on the vesting and service requirements, exercise price and other conditions, subject to certain
limits. The fair value of the awarded non-vested Shares was calculated based on the market
price of the Company’s Shares at the respective grant date.
Number of
Shares
Weighted
Average
Grant Date
Fair Value
(HK$)
Non-vested as at 1 January 2015 7,743,000 29.53
Granted during the year 1,353,082 15.13
Forfeited during the year (649,244) 26.89
Non-vested as at 31 December 2015 and 1 January 2016 8,446,838 27.43
Granted during the year 6,599,024 10.74
Forfeited during the year (1,036,728) 18.70
Non-vested as at 31 December 2016 14,009,134 20.21
As at 31 December 2016, no awarded Shares have vested under the Company’s employee
ownership scheme.
182 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
23. SHARE-BASED PAYMENT PLAN (CONTINUED)
WRL Omnibus Plan
On 16 May 2014, Wynn Resorts, Limited adopted the Wynn Resorts, Limited 2014 omnibus
incentive plan (the “WRL Omnibus Plan”) after approval from its stockholders. The WRL
Omnibus Plan allows for the grant of stock options, restricted stock, restricted stock units, stock
appreciation rights, performance awards and other share-based awards to the same eligible
participants as the WRL’s 2002 stock incentive plan, as amended and restated (the “WRL 2002
Plan”). Under the approval of the WRL Omnibus Plan, no new awards may be made under
the WRL 2002 Plan. Under the WRL 2002 Plan, a maximum of 12,750,000 shares of the WRL’s
common stock was reserved for issuance. The outstanding awards under the WRL 2002 Plan
were transferred to the WRL Omnibus Plan and will remain pursuant to their existing terms and
related award agreements. WRL reserved 4,409,390 shares of its common stock for issuance
under the WRL Omnibus Plan. These shares were transferred from the remaining available
amount under the WRL 2002 Plan. As at the date of this Annual Report, 3,344,030 shares
remain available for the grant of stock options or non-vested shares of WRL’s common stock.
The WRL Omnibus Plan is administered by the compensation committee of WRL’s board of
directors. The compensation committee has discretion under the WRL Omnibus Plan regarding
which type of awards to grant, the vesting and service requirements, exercise price and other
conditions, in all cases subject to certain limits. For stock options, the exercise price of stock
options must be at least equal to the fair market value of the stock on the date of grant and the
maximum term of such an award is ten years.
183Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
23. SHARE-BASED PAYMENT PLAN (CONTINUED)
WRL Omnibus Plan (continued)
A summary of option activity under the plan as at 31 December 2016 and 2015 and the changes
during the years then ended as it relates to the Group are presented below:
Number of
options
Weighted
average
exercise price
Weighted
average
exercise term
(HK$) (Years)
Outstanding as at 1 January 2015 426,493 602 3.8
Transferred during 2015 3,220 614
Exercised during 2015 (3,333) 422
Outstanding as at 31 December 2015 and
1 January 2016 426,380 603 2.9
Transferred during 2016 (7,245) 614
Outstanding as at 31 December 2016 419,135 603 1.8
Shares exercisable as at 31 December 2016 345,875 654 1.7
Shares exercisable as at 31 December 2015 112,240 369 3.4
Since no options were granted under the WRL Omnibus Plan for the years ended 31 December
2016 and 2015, the disclosures of the weighted average fair value of options granted at the
measurement date and, in turn, the significant inputs used in estimating the fair value per
option are not applicable.
There were no options exercised during the year ended 31 December 2016. The total intrinsic
value of the options exercised for the year ended 31 December 2015 was HK$1.1 million.
184 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
23. SHARE-BASED PAYMENT PLAN (CONTINUED)
Non-vested shares under the WRL Omnibus Plan
A summary of the status of the WRL Omnibus Plan’s non-vested shares as at 31 December 2016
and 2015 and changes during the years then ended as it relates to the Group is set out below:
Number
of Shares
Weighted
Average
Grant Date
Fair Value
(HK$)
Non-vested as at 1 January 2015 217,700 899
Vested during the year (25,000) 879
Transferred during the year 900 837
Non-vested as at 31 December 2015 and 1 January 2016 193,600 893
Granted during the year 115,890 592
Forfeited during the year (60,000) 964
Vested during the year (197,465) 727
Transferred during the year (2,025) 837
Non-vested as at 31 December 2016 50,000 770
24. PENSIONS AND OTHER POST-EMPLOYMENT BENEFIT PLANS
In April 2005, the Group established a defined contribution retirement benefit scheme. The
Scheme allows eligible employees to contribute 5% of their salary to the Scheme and the Group
matches the contributions with an equal amount. The assets of the Scheme are held separately
from those of the Group in an independently administered fund. The Group’s matching
contributions vest with the employees at 10% per year with full vesting in ten years. Forfeitures
of unvested contributions are used to reduce the Group’s liability for its contributions
payable under the Scheme. Forfeited unvested contributions totaling HK$7.8 million (2015:
HK$6.5 million) were utilized during the year. The Group recorded an expense for matching
contributions of approximately HK$101.2 million for the year ended 31 December 2016 (2015:
HK$87.5 million). As at 31 December 2016, contributions of approximately HK$21.1 million
(2015: HK$16.1 million) due had not been paid. The amounts were paid subsequent to the end
of the reporting periods.
185Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
25. DIRECTORS’ AND CHIEF EXECUTIVE’S REMUNERATION AND FIVE HIGHEST PAID
INDIVIDUALS
Directors’ and Chief Executive’s Emoluments
Directors’ and chief executive’s emoluments for the years ended 31 December 2016 and 2015
disclosed pursuant to the Listing Rules, section 383(1)(a), (b), (c), and (f) of the Hong Kong
Companies Ordinance and Part 2 of the Companies (Disclosure of Information about Benefits of
Directors) Regulation, is as follows:
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Salaries 55,362 29,096
Share-based payments 48,012 67,474
Discretionary bonus 18,221 20,862
Fees 4,525 4,525
Contributions to retirement plan 437 388
Other 12,870 13,290
Total emoluments 139,427 135,635
186 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
25. DIRECTORS’ AND CHIEF EXECUTIVE’S REMUNERATION AND FIVE HIGHEST PAID
INDIVIDUALS (CONTINUED)
Directors’ and Chief Executive’s Emoluments (continued)
Fees Salary
Discretionary
Bonus
Share-based
Payments
Contributions
to Retirement
Plan Other Total
HK$ HK$ HK$ HK$ HK$ HK$ HK$
(in thousands)
2016
Executive Directors:
Stephen A. Wynn — — — — — — —
Linda Chen — 9,483 9,483 38,817 — 6,375 64,158
Ian Michael Coughlan — 8,732 8,738 10,275 437 2,584 30,766
Gamal Mohammed
Abdelaziz* — 37,147 — (5,684) — 3,911 35,374
Non-executive Director:
Matthew O. Maddox — — — — — — —
Independent
non-executive
Directors:
Jeffrey Kin-fung Lam 1,050 — — 1,151 — — 2,201
Bruce Rockowitz 1,075 — — 1,151 — — 2,226
Nicholas Sallnow-Smith 1,325 — — 1,151 — — 2,476
Allan Zeman 1,075 — — 1,151 — — 2,226
4,525 55,362 18,221 48,012 437 12,870 139,427
2015
Executive Directors:
Stephen A. Wynn — — — — — — —
Gamal Mohammed
Abdelaziz* — 11,650 8,155 24,967 — 4,337 49,109
Linda Chen — 9,693 7,270 32,536 — 6,484 55,983
Ian Michael Coughlan — 7,753 5,437 5,427 388 2,469 21,474
Non-executive Director:
Matthew O. Maddox — — — — — — —
Independent
non-executive
Directors:
Jeffrey Kin-fung Lam 1,050 — — 1,136 — — 2,186
Bruce Rockowitz 1,075 — — 1,136 — — 2,211
Nicholas Sallnow-Smith 1,325 — — 1,136 — — 2,461
Allan Zeman 1,075 — — 1,136 — — 2,211
4,525 29,096 20,862 67,474 388 13,290 135,635
* Mr. Abdelaziz resigned from the position as an executive Director of the Company effective 30 September
2016.
187Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
25. DIRECTORS’ AND CHIEF EXECUTIVE’S REMUNERATION AND FIVE HIGHEST PAID
INDIVIDUALS (CONTINUED)
Directors’ and Chief Executive’s Emoluments (continued)
In addition to the directors’ emoluments disclosed in the above tables, emoluments for Mr.
Stephen A. Wynn and Mr. Matthew O. Maddox were charged to the Group, through the
corporate allocation agreement, amounting to HK$56.0 million and HK$30.5 million for the year
ended 31 December 2016, respectively (2015: HK$33.5 million and HK$11.8 million,
respectively).
Five highest paid individuals’ emoluments
During the year ended 31 December 2016, the five individuals whose emoluments were the
highest in the Group included two (2015: three) Directors and a resigned Director whose
emoluments were reflected in the analysis presented above. Details of the emoluments payable
to the remaining two (2015: two) highest paid individuals for each of the years ended 31
December 2016 and 2015 are as follows:
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Salaries and other benefits 18,477 18,722
Discretionary bonus 11,705 8,865
Share-based payments 10,102 8,186
Contributions to retirement plan 3 3
Total emoluments 40,287 35,776
188 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
25. DIRECTORS’ AND CHIEF EXECUTIVE’S REMUNERATION AND FIVE HIGHEST PAID
INDIVIDUALS (CONTINUED)
Five highest paid individuals’ emoluments (continued)
The emoluments were within the following bands:
For the year ended
31 December
2016 2015
Number of
Individuals
Number of
Individuals
HK$10,500,001 to HK$11,000,000 — 1
HK$12,500,001 to HK$13,000,000 1 —
HK$24,500,001 to HK$25,000,000 — 1
HK$27,500,001 to HK$28,000,000 1 —
Total 2 2
The emoluments of certain individuals have been apportioned on a basis that is considered
to be reasonable estimates of the utilization of service provided or the benefit received by
the Group. The apportioned emoluments of these individuals are included in the expense
allocations charged by Wynn Resorts, Limited and the Group’s fellow subsidiaries for the years
ended 31 December 2016 and 2015 (See note 27 “Related Party Disclosures”).
During the year, no emoluments were paid by the Group to any of the Directors or the five
highest paid individuals as an inducement to join or upon joining the Group or as compensation
for loss of office as a director of any member of the Group or in connection with the
management of the affairs of any members of the Group. None of the Directors waived any
emoluments during the years.
189Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
26. COMMITMENTS AND CONTINGENCIES
Operating lease commitments — as lessee
The Group has entered into leases for administrative offices, warehouse facilities, apartment
units for executives and staff, dormitories for imported labor, and for certain office equipment
in Macau. These leases typically contain renewal or continuation clauses.
In addition to the leases described above, the Group pays rent for the use of the land sites on
which Wynn Macau and Wynn Palace are situated.
As at 31 December 2016 and 2015, outstanding commitments for future minimum lease
payments under non-cancellable operating leases are as follows:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Within one year 118,125 106,803
After one year but not more than five years 335,386 380,726
More than five years 365,425 425,695
818,936 913,224
Operating lease commitments — as lessor
The Group has entered into leases for space with many high-end retailers. These non-cancelable
leases typically contain provisions for minimum rentals plus additional rent based upon the net
sales of the retailers. The Group recorded contingent rental income under operating leases
of approximately HK$222.6 million for the year ended 31 December 2016 (2015: HK$323.7
million). As the future sales of these retailers cannot be estimated reliably, only the minimum
lease commitments, and not the contingent rents, have been included in the table below.
190 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
26. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Operating lease commitments — as lessor (continued)
Future minimum rents to be received as at 31 December 2016 and 2015 are as follows:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Within one year 728,526 533,267
After one year but not more than five years 2,020,754 2,474,504
More than five years 34,936 99,422
2,784,216 3,107,193
Capital commitments
As at 31 December 2016 and 2015, the Group had the following capital commitments under
construction contracts, construction-related consulting and other agreements and purchase
orders which have not been provided for in the Group’s statement of financial position:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Contracted, but not provided for 176,462 2,115,249
191Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
26. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Gaming premium commitment
Pursuant to the Concession Agreement signed with the Macau government, the Group has
committed to pay an annual premium of MOP30.0 million (approximately HK$29.1 million)
plus a variable annual premium which is equal to MOP300,000 (approximately HK$291,000)
per gaming table reserved exclusively for certain kinds of games or players, MOP150,000
(approximately HK$146,000) per gaming table not so reserved and MOP1,000 (approximately
HK$970) per electrical or mechanical gaming machine, including slot machines, subject to an
annual minimum of MOP45.0 million (approximately HK$43.7 million).
Other services commitments
The Group has service agreements for signage in China, Macau and Hong Kong. Furthermore,
the Group is obligated under several agreements for shuttle-bus services running from the
People’s Republic of China’s border to Wynn Macau, Wynn Palace and within Macau and under
various agreements for maintenance, printing and other services. With the opening of Wynn
Palace, the Group has also entered into various agreements for operations and maintenance of
the SkyCab, hotel and other facilities. Under these agreements, the Group is obligated to make
the following future payments as at 31 December 2016 and 2015:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Within one year 337,946 337,898
After one year but not more than five years 738,535 574,308
After five years — 922
1,076,481 913,128
As at 31 December 2016, the Group was committed to purchases of operating supplies totaling
HK$128.0 million (2015: HK$71.7 million).
As at 31 December 2016, in addition to the MOP300 million (approximately HK$291.3 million)
bank guarantee issued for the Concession Agreement as described in note 20, banks granted
guarantees to the Group for other purposes totalling HK$38.8 million (2015: HK$32.9 million).
192 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
26. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Employment agreements
The Group has entered into employment agreements with several executive officers, other
members of management and certain key employees. These agreements generally have
two- to ten-year terms and typically indicate a base salary and often contain provisions for a
discretionary bonus. Certain executives are also entitled to a separation payment if terminated
without “cause” or upon voluntary termination of employment for “good reason” following a
“change of control” (as these terms are defined in the employment contracts).
Litigation
The Group did not have any material litigation outstanding as at 31 December 2016. The
litigation matters set out below are disclosed on a voluntary basis and, as with all litigation, no
assurances can be provided as to the outcome thereof.
Macau litigation related to Okada
WRM and certain individuals who are or were directors of WRM and/or the Company
(collectively, the “Wynn Macau Parties”) have been named as defendants in a lawsuit filed in the
Court of First Instance of Macau (the “Macau Court”) by Mr. Kazuo Okada (“Okada”) and two of
Okada’s controlled companies, Aruze USA, Inc. and Universal Entertainment Corp. (collectively,
the “Okada Parties”). The principal allegations in the lawsuit are that the redemption of the
Okada Parties’ shares in WRL was improper and undervalued, that the previously disclosed
payment by WRM to an unrelated third party in consideration of relinquishment by that party
of certain rights in and to any future development on the land in Cotai where Wynn Palace
is located was unlawful and that the Company’s previously disclosed donation by WRM to
the University of Macau Development Foundation was unlawful. The Okada Parties seek the
dissolution of WRM and compensatory damages.
The Company made a voluntary announcement in respect of this lawsuit on 3 July 2015. The
Company has sought advice from counsel in Macau, and based on such advice, the Company
believes that the claims are devoid of merit and are unfounded. The Company intends to
vigorously defend WRM and the other defendants in the lawsuit. The Macau Court has served
the complaint on all of the defendants and the Wynn Macau Parties filed their response in May
2016. The lawsuit is in the early phases of litigation.
193Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
26. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Litigation (continued)
Macau litigation related to Dore
WRM has been named as a defendant in several lawsuits filed in the Macau Court of First
Instance by individuals who claim to be investors in or persons with credit in accounts
maintained by Dore Entertainment Company Limited (“Dore”), an independent, Macau
registered and licensed company that operates a gaming promoter business at Wynn Macau.
In connection with the alleged theft, embezzlement, fraud and/or other crime(s) perpetrated
by a former employee of Dore (the “Dore Incident”), the plaintiffs of the lawsuits allege
that Dore failed to honor withdrawal of funds requests that allegedly has resulted in certain
losses for these individuals. The principal allegations common to the lawsuits are that WRM,
as a gaming concessionaire, should be held responsible for Dore’s conduct on the basis that
WRM is responsible for the supervision of Dore’s activities at Wynn Macau that resulted in the
purported losses.
The Company made a voluntary announcement in connection with the Dore Incident on 14
September 2015. The Company has sought advice from counsel in Macau, and based on such
advice, the Company believes the claims are devoid of merit and are unfounded. The Company
intends to vigorously defend WRM in the lawsuits. The lawsuits are in the early phases of
litigation.
194 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
27. RELATED PARTY DISCLOSURES
As at 31 December 2016 and 2015, the outstanding balances between the Group and the
related companies were as follows:
As at 31 December
Name of related
companies
Relation to
the Company
2016 2015
HK$ HK$
(in thousands)
Due from related
companies — current
WIML Subsidiary of Wynn
Resorts, Limited 110,185 536,080
Palo Marketing Services
Limited
Subsidiary of Wynn
Resorts, Limited 42,040 381
Worldwide Wynn Subsidiary of Wynn
Resorts, Limited 4,039 —
Wynn Manpower Limited Subsidiary of Wynn
Resorts, Limited 291 291
Wynn Hotel Sales &
Marketing, LLC
Subsidiary of Wynn
Resorts, Limited 3 3
Wynn MA, LLC Subsidiary of Wynn
Resorts, Limited 3 15
Wynn Resort Development,
LLC
Subsidiary of Wynn
Resorts, Limited — 460
Wynn Design & Development Subsidiary of Wynn
Resorts, Limited — 22,822
156,561 560,052
Due to related
companies — current
Wynn Resorts, Limited Ultimate parent
company 140,848 58,018
Wynn Las Vegas, LLC Subsidiary of Wynn
Resorts, Limited 55,381 56,734
Wynn Design & Development Subsidiary of Wynn
Resorts, Limited 6,069 —
Worldwide Wynn Subsidiary of Wynn
Resorts, Limited — 12,017
Las Vegas Jet, LLC Subsidiary of Wynn
Resorts, Limited — 2,151
202,298 128,920
195Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
27. RELATED PARTY DISCLOSURES (CONTINUED)
The amounts disclosed in the above table are unsecured, interest-free and repayable on
demand.
The Group had the following material connected transactions with related companies during the
year:
For the year ended
31 December
Name of related
companies
Relation to the
Company
Primary nature
of transactions
2016 2015
HK$ HK$
(in thousands)
Wynn Resorts, Limited Ultimate parent
company
License fees (i)
846,486 730,890
Wynn Resorts, Limited Ultimate parent
company
Corporate
support
services (ii) 129,709 76,881
Wynn Resorts, Limited Ultimate parent
company
Share-based
payment
expenses 54,383 70,927
Las Vegas Jet, LLC Subsidiary of
Wynn Resorts,
Limited
Airplane usage
charges (ii)
23,656 13,108
WIML Subsidiary of
Wynn Resorts,
Limited
International
marketing
expenses (iii) 27,623 38,769
Worldwide Wynn Subsidiary of
Wynn Resorts,
Limited
Staff secondment
payroll
charges (iv) 241,496 225,475
Wynn Design &
Development
Subsidiary of
Wynn Resorts,
Limited
Design/
development
payroll (v) 19,532 50,674
Wynn Design &
Development
Subsidiary of
Wynn Resorts,
Limited
Acquisition of
artworks (vi)
263,118 —
Except for the share-based payment expenses incurred with Wynn Resorts, Limited and the
acquisition of artworks from Wynn Design & Development, all of the above transactions are
noted as continuing connected transactions.
196 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
27. RELATED PARTY DISCLOSURES (CONTINUED)
Notes:
(i) License fees
The license fees payable to Wynn Resorts, Limited equals the greater of (1) 3% of the gross monthly
revenues of the intellectual property, and (2) US$1.5 million (approximately HK$11.6 million) per month.
(ii) Corporate support services
The annual fees for the services provided by Wynn Resorts are based on an allocation of the actual
proportion of Wynn Resorts’ annual corporate departments’ costs (including salaries and benefits for such
employees during the period in which such services are rendered) and overhead expense related to the
provision of such services, and in any event, such annual fees shall not exceed 50% of the aggregate annual
corporate departments’ costs and overhead expenses incurred by Wynn Resorts during any financial year.
Wynn Resorts allows the Company and its employees to use aircraft assets owned by Wynn Resorts and its
subsidiaries (other than the Group) at hourly rates set by Las Vegas Jet, LLC, a subsidiary of Wynn Resorts.
(iii) International marketing expenses
These administrative, promotional and marketing services are provided through branch offices located in
various cities around the world under the direction and supervision provided by WIML. For the services
provided under this arrangement, WIML charges a service fee equal to the total costs it incurs in rendering
the services plus 5%.
(iv) Staff secondment payroll charges
Worldwide Wynn, a subsidiary of Wynn Resorts, is responsible for supplying management personnel
to WRM for pre-determined lengths of time through secondment arrangements. Worldwide Wynn is
compensated for these services of the seconded employees during the periods of secondment to WRM
with a service fee equal to its aggregate costs plus 5%.
(v) Design/development payroll
Wynn Design & Development provides design and development services to the Group in connection with
the construction of Wynn Palace and renovation works at Wynn Macau and Encore. A service fee is charged
at the costs incurred by Wynn Design & Development to the Group for the services provided.
(vi) Acquisition of artworks
On 29 June 2016, WRM entered into a purchase agreement with Wynn Design & Development to purchase
“Tulips” by Jeff Koons and “Amphora III” by Viola Frey for US$33,682,500 (approximately HK$262.3
million) and US$103,945 (approximately HK$0.8 million), respectively.
The above transactions were carried out on terms mutually agreed between the Group and the
related companies. There were no significant charges from the Group to the related companies
during the year ended 31 December 2016 and 2015. In the opinion of the Directors, the related
party transactions were conducted in the ordinary and usual course of the Group’s business.
All outstanding balances between the Group and the related companies are deemed to be
trade in nature.
197Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
27. RELATED PARTY DISCLOSURES (CONTINUED)
Home purchase
In May 2010, Worldwide Wynn entered into an employment agreement with Ms. Linda Chen,
who is also a director of the Company. Under the terms of the employment agreement,
Worldwide Wynn caused WRM to purchase a house in Macau for use by Ms. Chen. As at 31
December 2016, the net carrying amount of the house together with improvements and its land
lease right was HK$51.0 million (2015: HK$55.3 million).
WMLF Revolving Credit Facility
In connection with the WMLF Revolving Credit Facility, WRL pledged in favor of Bank of China
Limited, Macau Branch on 18 July 2016, its US$ deposits of initially up to US$200 million
(approximately HK$1.6 billion) in a pledged account at Bank of China Limited, Macau Branch.
On 25 October 2016, the WMLF Revolving Credit Facility was amended and upsized, increasing
the available borrowing capacity to HK$3.9 billion (approximately US$499.0 million). For further
details, refer to note 20 to the financial statements.
Compensation of senior/key management personnel of the Group
For the year ended
31 December
2016 2015
HK$ HK$
(in thousands)
Salaries, bonuses, allowances and benefits in kind 172,655 143,871
Share-based payments 54,856 71,978
Retirement benefits 1,133 1,180
Total compensation paid to senior/
key management personnel 228,644 217,029
Further details of Directors’ emoluments are included in note 25 to the financial statements.
198 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
28. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS
Management has assessed that the fair values of cash and cash equivalents, restricted cash and
cash equivalents, trade and other receivables, deposits and other assets, accounts payable,
construction and retentions payables, balances with related companies and the current portion
of financial liabilities included in other payables and accruals, other liabilities and land premium
payables approximate their carrying amounts largely due to the short term maturities of these
instruments.
The fair values of the non-current portion of interest-bearing bank loans have been calculated
by discounting the expected future cash flows using rates currently available for instruments
with similar terms, credit risks and remaining maturities. The non-current portion of financial
liabilities included in other payables and accruals, other liabilities and construction retentions
payable were not discounted as the discounting factors were considered by management to be
insignificant.
29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial liabilities comprise bank loans, accounts payable, amounts due
to related companies and other payables. The main purpose of these financial liabilities is to
finance the Group’s construction activities and its operations. The Group has various financial
assets such as trade receivables and cash and cash equivalents, which arise directly from its
operations.
The Group also enters into derivative transactions comprised primarily of interest rate swap
contracts and foreign currency forward contracts. The purpose is to manage the interest
rate risks and foreign currency risks arising from the Group’s borrowings. It is, and has been
throughout 2016 and 2015, the Group’s policy that no trading in derivatives should be
undertaken.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign
currency risk, credit risk and liquidity risk. The Board of Directors reviews and agrees on the
policies for managing each of these risks, which are summarized below.
199Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Interest rate risk
The Group’s primary exposure is changes in market interest rates associated with its bank loans
that bear interest based on variable rates. The Group attempts to manage interest rate risk
through interest rate swap arrangements. These risk management strategies may not always
have the desired effect, and interest rate fluctuations could have a negative impact on the
results of operations.
As at 31 December 2016, the interest-bearing bank loans of HK$20.5 billion (as at 31 December
2015: HK$21.2 billion) were variable rate borrowings based on LIBOR or HIBOR plus a margin.
However, the Group has entered into interest rate swaps that effectively fix the interest rate
for approximately 28% of the variable rate borrowings as at 31 December 2016 (2015: 28%).
Based on borrowings as at 31 December 2016, an assumed 1% change in the variable rates
would cause the annual interest expense without adjusting for any amounts to be capitalized, to
change by HK$146.9 million (2015: HK$153.9 million).
Foreign currency risk
The financial statements of foreign operations are translated into Hong Kong dollars, the
Company’s and the Group’s presentation currency, for incorporation into the consolidated
financial statements. Some of the Group’s entities were denominated in currencies other than
the functional currencies of the entities making the activities (primarily US$). The Hong Kong
dollar is linked to the U.S. dollar and the exchange rate between these two currencies has
remained relatively stable over the past several years. However, the exchange linkages of the
Hong Kong dollar and the Macau pataca, and the Hong Kong dollar and the U.S. dollar, are
subject to potential changes due to, among other things, changes in governmental policies and
international economic and political developments.
The Group manages exposure to foreign currency risks associated with future scheduled
interest payments through the use of foreign currency forward contracts. These contracts
involve the exchange of one currency for a second currency at a future date and are with a
counter-party, which is a major international financial institution.
Based on the financial position as at 31 December 2016, an assumed 1% increase or decrease in
the value of the Hong Kong dollar against the U.S. dollar would cause the Group to recognize a
gain or loss of HK$219.0 million (2015: HK$181.1 million).
200 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Credit risk
Financial instruments that potentially subject the Group to concentrations of credit risk consist
principally of casino accounts receivable.
The Group issues credit in the form of markers to approved casino customers following
investigations of creditworthiness. The Group maintains strict control over the issuance of
markers and aggressively pursues collection from those customers who fail to pay their marker
balances on a timely basis. These collection efforts may include the mailing of statements and
delinquency notices, personal contacts, the use of outside collection agencies, and litigation.
Markers are generally legally enforceable instruments in Macau, however, markers are not
legally enforceable instruments in some other countries. The collectability of markers given to
foreign customers is affected by a number of factors including changes in currency exchange
rates and economic conditions in the customers’ home countries.
Further quantitative data in respect of the Group’s exposure to credit risk arising from trade
and other receivables are disclosed in note 14 to the financial statements.
Liquidity risk
The Group measures and monitors its liquidity structure based on the overall assets, liabilities
and debt in conjunction with its expected cash flows to ensure the capability to meet any
unexpected and material cash requirements in the ordinary course of business. In addition, the
Group’s senior bank facilities’ governing documents contain capital spending restrictions and
other affirmative and negative covenants that require the maintenance of certain financial ratios.
As at 31 December 2016, the Group held three interest rate swaps at fair values with assets
measured at fair value for level 2 of HK$8.2 million (2015: the Group held two interest rate
swaps at fair values with assets measured at fair value for level 2 of HK$5.6 million and one
interest rate swap at fair value with liability measured at fair value for level 2 of HK$0.8 million),
and the Group measured its outstanding debt instruments at fair value for level 2 of HK$32.3
billion (2015: HK$30.5 billion). The Group did not hold any assets or liabilities measured at fair
value for levels 1 and 3 during the years 2016 and 2015. Level 1 fair values are those measured
using quoted prices (unadjusted) in active markets for identical financial instruments, level 2 fair
values measured using quoted prices in active markets for similar financial instruments, or using
valuation techniques in which all significant inputs are directly or indirectly based on observable
market data and level 3 fair values are those measured using valuation techniques in which any
significant input is not based on observable market data.
201Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Liquidity risk (continued)
The table below analyzes the Group’s financial liabilities into relevant maturity groupings
based on the remaining period to the contractual maturity date as at 31 December 2016
and 2015. The amounts disclosed are based on the contractual undiscounted cash flows of
financial liabilities that include principal and interest payments. The maturities are calculated
assuming the effect of interest rate swap arrangements and interest rates with respect to
variable rate financial liabilities remain constant as at the respective year ends and there are
no changes in the aggregate principal amount of financial liabilities other than repayments at
scheduled maturities as reflected in the table below.
Interest rates
Within
one year
Between
one and
two years
Between
two and
five years
Over
five years Total
HK$ HK$ HK$ HK$ HK$
(in thousands)
As at 31 December 2016
Interest-bearing borrowings 1.50%–5.25% 1,157,933 3,067,286 33,315,031 — 37,540,250
Construction and
retentions payables 1,167,082 1,244 — — 1,168,326
Accounts payable 525,501 — — — 525,501
Amounts due to related
companies 202,298 — — — 202,298
Other payables 3,961,627 77,670 233,010 77,670 4,349,977
Other liabilities 26,573 13,461 115,430 — 155,464
As at 31 December 2015
Interest-bearing borrowings 0.25%–5.25% 1,029,815 1,019,392 12,554,112 22,621,723 37,225,042
Land premiums payable 5% 127,115 — — — 127,115
Construction and
retentions payables 1,258,868 399,986 — — 1,658,854
Accounts payable 345,594 — — — 345,594
Amounts due to related
companies 128,920 — — — 128,920
Other payables 2,792,311 77,670 233,010 155,340 3,258,331
Other liabilities 8,732 13,718 11,857 97,693 132,000
Interest rate swaps — 836 — — 836
202 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Liquidity risk (continued)
“Other payables” are mainly comprised of outstanding chip liabilities, customer deposits,
donation payable, and other miscellaneous payables, excluding tax liabilities, incurred as at 31
December 2016 and 2015.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong
credit rating in order to support its business and maximize shareholder value.
The Group manages its capital structure and makes adjustments to it as economic conditions
change i.e., interest rates and equity markets. To maintain a strong capital structure and in
response to changes in economic conditions, the Group may modify debt instruments to
obtain more favorable interest rates, obtain additional debt financing, and may adjust dividend
payments to shareholders as conditions require.
203Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Capital management (continued)
The gearing ratio is a key indicator of the Group’s capital structure. The gearing ratio is net
debt divided by total capital plus net debt.
As at 31 December
2016 2015
HK$ HK$
(in thousands, except for
percentages)
Interest-bearing borrowings 32,169,888 31,317,919
Accounts payable 525,501 345,594
Land premiums payable — 124,015
Construction and retentions payables 1,168,326 1,658,854
Other payables and accruals 6,191,037 4,384,242
Amounts due to related companies 202,298 128,920
Other liabilities 222,932 205,799
Less: cash and cash equivalents (2,591,442) (6,731,356)
restricted cash and cash equivalents (22,109) (15,968)
Net debt 37,866,431 31,418,019
Equity 2,453,064 4,102,279
Total capital 2,453,064 4,102,279
Capital and net debt 40,319,495 35,520,298
Gearing ratio 93.9% 88.5%
204 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
30. STATEMENT OF FINANCIAL POSITION OF THE COMPANY
Information about the statement of financial position of the Company is set forth below:
As at 31 December
2016 2015
HK$ HK$
(in thousands)
Non-current assets
Financial assets 17,448,859 17,439,466
Investment in a subsidiary 89,136 29,390
Contribution to Trust 113,585 53,744
Property and equipment 2,564 3,616
Deposits 764 764
Total non-current assets 17,654,908 17,526,980
Current assets
Prepayments 870 702
Amounts due from related companies 1,159,663 777,595
Other receivables 1,524,712 339,705
Cash and cash equivalents 60,336 4,242,729
Total current assets 2,745,581 5,360,731
Current liabilities
Other payables and accruals 119,104 120,265
Amounts due to related companies 6,177 5,604
Total current liabilities 125,281 125,869
Net current assets 2,620,300 5,234,862
Total assets less current liabilities 20,275,208 22,761,842
Non-current liabilities
Interest-bearing borrowings 10,417,332 10,402,486
Net assets 9,857,876 12,359,356
Equity
Issued capital 5,196 5,196
Share premium account# 12,722,941 12,722,941
Reserves (2,870,261) (368,781)
Total equity 9,857,876 12,359,356
205Annual Report 2016
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
30. STATEMENT OF FINANCIAL POSITION OF THE COMPANY (CONTINUED)
#
As at 31 December
2016 2015
HK$ HK$
(in thousands)
The Company’s share premium account 12,722,941 12,722,941
Adjustment arising from the Group Reorganization (12,561,195) (12,561,195)
Consolidated share premium account 161,746 161,746
Information about the statement of equity of the Company is set forth below:
Issued
Capital
Share
Premium
Account
Share
Option
Reserve
Retained
Earnings/
(Accumulated
Losses)
Total
Equity
HK$ HK$ HK$ HK$ HK$
(in thousands)
As at 1 January 2015 5,196 12,722,941 47,656 (1,338,659) 11,437,134
Net income for the year — — — 6,262,279 6,262,279
Total comprehensive income
for the year — — — 6,262,279 6,262,279
Share-based payments — — 113,835 — 113,835
Special dividend declared
and paid — — — (5,453,892) (5,453,892)
As at 31 December 2015 and
1 January 2016 5,196 12,722,941 161,491 (530,272) 12,359,356
Net income for the year — — — 554,304 554,304
Total comprehensive income
for the year — — — 554,304 554,304
Share-based payments — — 58,680 — 58,680
Special dividend declared
and paid — — — (3,114,464) (3,114,464)
As at 31 December 2016 5,196 12,722,941 220,171 (3,090,432) 9,857,876
206 Wynn Macau, Limited
Financial Statements
Notes to Financial Statements
For the year ended 31 December 2016
30. STATEMENT OF FINANCIAL POSITION OF THE COMPANY (CONTINUED)
The Company’s reserves available for distribution represent the share premium account, share
option reserve and retained earnings/accumulated losses. Under the Companies Law (Revised)
Chapter 22 of the Cayman Islands, the share premium of the Company is available for paying
distributions or dividends to shareholders subject to the provisions of its Memorandum or
Articles of Association and provided that immediately following the distribution of a dividend,
the Company is able to pay its debts as they fall due in the ordinary course of business.
Accordingly, the Company’s reserves available for distribution to shareholders as at 31
December 2016 amounted to approximately HK$9.9 billion (2015: HK$12.4 billion).
31. COMPARATIVE AMOUNTS
Certain comparative amounts have been reclassified to conform with the current year’s
presentation.
207Annual Report 2016
Financial Summary
A summary of the published results and assets and liabilities of the Group for the last five years
prepared on the basis as set out herein, is set forth below.
Year ended 31 December
2016 2015 2014 2013 2012
HK$ HK$ HK$ HK$ HK$
(in thousands)
Results
Operating revenues 22,099,478 19,096,365 29,444,855 31,340,854 28,542,224
Profit before tax 1,447,959 2,416,860 6,469,071 7,715,954 6,454,742
Profit for the year 1,435,532 2,410,398 6,445,435 7,700,905 6,439,693
As at 31 December
2016 2015 2014 2013 2012
HK$ HK$ HK$ HK$ HK$
(in thousands)
Assets and liabilities
Total assets 42,945,473 42,283,507 34,149,799 30,908,943 23,615,969
Total liabilities 40,492,409 38,181,228 27,106,086 21,696,101 13,115,299
Net assets 2,453,064 4,102,279 7,043,713 9,212,842 10,500,670
The consolidated results of the Group for the years ended 31 December 2012, 2013, 2014, 2015 and
2016 and the consolidated assets and liabilities of the Group as at 31 December 2012, 2013, 2014,
2015 and 2016 are those set out in the audited financial statements.
The summary above does not form part of the audited financial statements.
208 Wynn Macau, Limited
Definitions
“Award” an award granted by the Board to a Selected Participant, which
may vest in the form of Award Shares or the Actual Selling Price
of the Award Shares in cash, as the Board may determine in
accordance with the terms of the Scheme Rules
“Award Shares” the Shares granted to a Selected Participant in an Award
“Actual Selling Price” the actual price at which the Award Shares are sold (net
of brokerage, Hong Kong Stock Exchange trading fee, the
Securities and Futures Commission of Hong Kong transaction
levy and any other applicable costs) on vesting of an Award
pursuant to the employee ownership scheme or in the case
of a vesting when there is an event of change in control or
privatization of the Company, the consideration receivable
under the related scheme or offer
“Board of Directors” or “Board” the Board of Directors of our Company
“Code” the Corporate Governance Code and Corporate Governance
Report set out in Appendix 14 to the Listing Rules as applicable
on 31 December 2016
“Company” or “our Company” Wynn Macau, Limited, a company incorporated on 4 September
2009 as an exempted company with limited liability under the
laws of the Cayman Islands and an indirect subsidiary of Wynn
Resorts, Limited
“Concession Agreement” the Concession Contract for the Operation of Games of Chance
or Other Games in Casinos in the Macau Special Administrative
Region entered into between WRM and the Macau government
on 24 June 2002
“Cotai Land Concession
Agreement”
the land concession contract entered into between WRM, Palo
and the Macau government for approximately 51 acres of land
in the Cotai area of Macau, and for which formal approval from
the Macau government was published in the official gazette of
Macau on 2 May 2012
209Annual Report 2016
Definitions
“Director(s)” the director(s) of our Company
“Eligible Person” any individual, being an employee or officer of any member of
the Group (other than a connected person of the Company or
an associate of a connected person of the Company); however,
no individual who is resident in a place where the grant,
acceptance or vesting of an Award pursuant to the employee
ownership scheme is not permitted under the laws and
regulations of such place or where, in the view of the Board,
compliance with applicable laws and regulations in such place
makes it necessary or expedient to exclude such individual, shall
be entitled to participate in the employee ownership scheme
and such individual shall therefore be excluded from the term
Eligible Person
“Encore” or “Encore at
Wynn Macau”
a casino resort located in Macau, connected to and fully
integrated with Wynn Macau, owned and operated directly by
WRM, and that opened on 21 April 2010
“Galaxy” Galaxy Casino, S.A., one of the six gaming operators in Macau
and one of the three concessionaires
“Group”, “we”, “us” or “our“ our Company and its subsidiaries, or any of them, and the
businesses carried on by such subsidiaries, except where the
context makes it clear that the reference is only to the Company
itself and not to the Group
“Group Reorganization” the reorganization undertaken by the Group, as described in
the section headed “History and Corporate Structure — IPO
Reorganization” of the IPO Prospectus
“HIBOR” Hong Kong Interbank Offered Rate
“HK$” Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
210 Wynn Macau, Limited
Definitions
“Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited
“IFRS” International Financial Reporting Standards
“IPO Prospectus” the IPO Prospectus of the Company published on 24 September
2009 in connection with the Listing
“Las Vegas Jet, LLC” Las Vegas Jet, LLC, a company formed under the laws of the
State of Nevada, United States and a wholly-owned subsidiary
of Wynn Resorts, Limited
“LIBOR” London Interbank Offered Rate
“Listing” the initial listing of the Shares on the Main Board of the Hong
Kong Stock Exchange on 9 October 2009
“Listing Rules” the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (as amended from time to
time)
“Macau” or “Macau Special
Administrative Region”
the Macau Special Administrative Region of the PRC
“Macau Operations” the integrated Wynn Macau and Encore at Wynn Macau and
Wynn Palace
“Melco Crown” Melco Crown Gaming (Macau) Limited, one of the six gaming
operators in Macau and one of the three sub-concessionaires
“MGM Macau” MGM Grand Paradise Limited, one of the six gaming operators
in Macau and one of the three sub-concessionaires
“Model Code” the Model Code for Securities Transactions by Directors of
Listed Issuers set out in Appendix 10 of the Listing Rules
“MOP” or “pataca” Macau pataca, the lawful currency of Macau
211Annual Report 2016
Definitions
“NASDAQ” or “NASDAQ Stock
Market”
National Association by Securities Dealers Automated
Quotations
“Palo Real Estate Company
Limited” or “Palo”
Palo Real Estate Company Limited, a limited liability company
incorporated under the laws of Macau, subject to Ms. Linda
Chen 10% social and voting interest and MOP1.00 economic
interest in WRM, an indirect wholly-owned subsidiary of the
Company
“PRC”, “China” or
“mainland China”
the People’s Republic of China and, except where the context
requires and only for the purpose of this annual report,
references in this annual report to the PRC or China do not
include Taiwan, Hong Kong or Macau; the term “Chinese” has a
correlatives meaning
“Scheme Rules” the rules relating to the employee ownership scheme
“SEC” the U.S. Securities and Exchange Commission
“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws
of Hong Kong)
“Share(s)” ordinary share(s) with a nominal value of HK$0.001 each in the
share capital of our Company
“Shareholder(s)” holder(s) of Share(s) of the Company from time to time
“SJM” Sociedade de Jogos de Macau S.A., one of the six gaming
operators in Macau and one of the three concessionaires
“Trust” the trust constituted by the Trust Deed to service the employee
ownership scheme
“Trust Deed” the trust deed entered into between the Company and the
Trustee (as may be restated, supplemented and amended from
time to time) on 30 June 2014
212 Wynn Macau, Limited
Definitions
“Trustee” the trustee appointed by the Company for the purpose of the
Trust, and as at the date of this Annual Report, Computershare
Hong Kong Trustees Limited, a company incorporated in Hong
Kong and having its registered office at 46th Floor, Hopewell
Centre, 183 Queen’s Road East, Wanchai, Hong Kong
“US$” United States dollars, the lawful currency of the United States
“U.S. GAAP” the Generally Accepted Accounting Principles of the United
States
“Venetian Macau” Venetian Macau S.A., one of the six gaming operators in Macau
and one of the three sub-concessionaires
“WM Cayman Holdings
Limited I”
WM Cayman Holdings Limited I, a company incorporated on 7
July 2009 as an exempted company with limited liability under
the laws of the Cayman Islands and a wholly-owned subsidiary
of Wynn Group Asia, Inc.
“WM Cayman Holdings
Limited II”
WM Cayman Holdings Limited II, a company incorporated on 8
September 2009 as an exempted company with limited liability
under the laws of the Cayman Islands and a wholly-owned
subsidiary of the Company
“WML 2021 Notes” the US$600 million (approximately HK$4.7 billion) 5.25% senior
notes due 2021 issued by the Company in October 2013 and
the additional US$750 million (approximately HK$5.9 billion)
5.25% senior notes due 2021 issued by the Company on 20
March 2014 (Debt Stock Code: 5983), which were consolidated
and form a single series of notes
“WMLF” WML Finance I Limited, a limited liability company incorporated
under the laws of the Cayman Islands and an indirect wholly-
owned subsidiary of the Company
213Annual Report 2016
Definitions
“WMLF Revolving Credit Facility” the HK$1.5 billion (approximately US$199.7 million) revolving
credit facility extended to WMLF on 18 July 2016 and the
principal amount was subsequently increased to HK$3.9 billion
(approximately US$499.0 million) on 25 October 2016
“Worldwide Wynn” Worldwide Wynn, LLC, a company formed under the laws of the
State of Nevada, United States and a wholly-owned subsidiary
of Wynn Resorts, Limited
“WRL Group” Wynn Resorts, Limited and its subsidiaries (other than the
Group)
“WRM” Wynn Resorts (Macau) S.A., a company incorporated under the
laws of Macau and a wholly-owned subsidiary of the Company
“WRM Shareholder Dividend
Tax Agreement”
the agreements, entered into during June 2009, August
2011 and August 2016, each for a term of five years between
WRM and the Macau Special Administrative Region, effective
retroactively to 2006, that provide for an annual payment to the
Macau Special Administrative Region of MOP7.2 million in years
2006 through 2010, MOP15.5 million in years 2011 through
2015 and MOP12.8 million in years 2016 through 2020 in lieu
of Complementary Tax otherwise due by WRM shareholders on
dividend distributions to them from gaming profits earned in
those years
“Wynn Design & Development” Wynn Design & Development, LLC, a company formed under
the laws of the State of Nevada, United States and a wholly-
owned subsidiary of Wynn Resorts, Limited
“Wynn Group Asia, Inc.” Wynn Group Asia, Inc, a company formed under the laws of the
State of Nevada, United States and a wholly-owned subsidiary
of Wynn Resorts, Limited
“Wynn International Marketing,
Ltd.” or “WIML”
Wynn International Marketing, Ltd., a company incorporated
under the laws of Isle of Man and a wholly-owned subsidiary of
Wynn Resorts, Limited
214 Wynn Macau, Limited
Definitions
“Wynn Las Vegas, LLC” Wynn Las Vegas, LLC, a company formed under the laws of the
State of Nevada, United States and a wholly-owned subsidiary
of Wynn Resorts, Limited
“Wynn Macau” a casino hotel resort located in Macau, owned and operated
directly by WRM, which opened on 6 September 2006, and
where appropriate, the term also includes Encore at Wynn
Macau
“Wynn Macau Credit Facilities” together, the HK$17.9 billion (equivalent) fully-funded senior
term loan facilities and the HK$5.8 billion (equivalent) senior
revolving credit facilities extended to WRM on 30 September
2015
“Wynn Palace” an integrated resort situated on approximately 51 acres of land
in the Cotai area of Macau in accordance with the terms of the
Cotai Land Concession Agreement, which is operated by WRM
and opened on 22 August 2016
“Wynn Resorts Holdings, LLC” Wynn Resorts Holdings, LLC, a company formed under the
laws of the State of Nevada, United States and a wholly-owned
subsidiary of Wynn Resorts, Limited
“Wynn Resorts International,
Ltd.”
Wynn Resorts International, Ltd., a company incorporated under
the laws of the Isle of Man and a wholly-owned subsidiary of the
Company
“Wynn Resorts, Limited”,
“Wynn Resorts” or “WRL”
Wynn Resorts, Limited, a company formed under the laws of the
State of Nevada, United States, and our controlling shareholder
(as defined in the Listing Rules)
215Annual Report 2016
Glossary
“Adjusted Average Daily Rate” adjusted average daily rate which is calculated by dividing
total room revenues including the retail value of promotional
allowances (less service charges, if any) by total rooms occupied
including complimentary rooms
“Adjusted REVPAR” adjusted revenue per available room which is calculated by
dividing total room revenues including the retail value of
promotional allowances (less service charges, if any) by total
rooms available
“casino revenue” revenue from casino gaming activities (gross table games win
and gross slot win), calculated net of a portion of commissions
and in accordance with IFRS
“chip(s)” a token; usually in the form of plastic disc(s) or plaque(s) issued
by a casino to customers in exchange for cash or credit, which
must be used (in lieu of cash) to place bets on gaming tables
“daily gross win per
gaming table”
gross gaming win for table games divided by number of tables
divided by the number of days in the applicable period
“gaming promoters” individuals or companies licensed by and registered with the
Macau government to promote games of fortune and chance
or other casino games to patrons, through the arrangement
of certain services, including transportation, accommodation,
dining and entertainment, whose activity is regulated by Macau
Administrative Regulation no. 6/2002
“gross gaming win” the total win generated by all casino gaming activities
combined, calculated before deduction of commissions
“gross slot win” the amount of handle (representing the total amount wagered)
that is retained as winnings. We record this amount and
gross table games win as casino revenue after deduction of
progressive jackpot liabilities and a portion of commissions
216 Wynn Macau, Limited
Glossary
“gross table games win” the amount of drop (in our general casino segment) or turnover
(in our VIP casino segment) that is retained as winnings. We
record this amount and gross slot win as casino revenue after
deduction of a portion of commissions
“In-house VIP Program” an internal marketing program wherein we directly market
our casino resorts to gaming clients, including to high-end
or premium players in the greater Asia region. These players
are invited to qualify for a variety of gaming rebate programs
whereby they earn cash commissions and room, food and
beverage and other complimentary allowances based on their
turnover level. We often extend credit to these players based
upon knowledge of the players, their financial background and
payment history
“promotional allowance” the retail value of rooms, food and beverage and retail and
other services furnished to guests (typically VIP clients) without
charge
“Rolling Chip” physically identifiable chip that is used to track VIP wagering
volume for purposes of calculating commissions and other
allowances payable to gaming promoters and Wynn Macau’s
individual VIP players
“table drop” the amount of cash deposited in a gaming table drop box that
serves as a repository for cash, plus cash chips purchased at the
casino cage
“turnover” the sum of all losing Rolling Chip wagers within the VIP program
“VIP client” or “VIP player” client, patron or player who participates in Wynn Macau’s In-
house VIP Program or in the VIP program of any of our gaming
promoters
“VIP table games turnover” turnover resulting from VIP table games only
201
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Annual Repor
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年度報告
2016 Annual Report 年度報告