UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2023
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File No. 000-50028
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) (Zip Code)
(702 ) 770-7555
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| 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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
| Class | Outstanding at August 1, 2023 | |||||||
| Common stock, par value $0.01 | ||||||||
WYNN RESORTS, LIMITED AND SUBSIDIARIES
FORM 10-Q
INDEX
| Part I. | Financial Information | |||||||
| Part II. | Other Information | |||||||
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| June 30, 2023 | December 31, 2022 | ||||||||||
| (unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Investment securities | |||||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses and other | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Restricted cash | |||||||||||
| Goodwill and intangible assets, net | |||||||||||
| Operating lease assets | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||||
| Current liabilities: | |||||||||||
| Accounts and construction payables | $ | $ | |||||||||
| Customer deposits | |||||||||||
| Gaming taxes payable | |||||||||||
| Accrued compensation and benefits | |||||||||||
| Accrued interest | |||||||||||
| Current portion of long-term debt | |||||||||||
| Other accrued liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 16) | |||||||||||
| Stockholders' deficit: | |||||||||||
Preferred stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
Treasury stock, at cost; | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive income (loss) | ( | ||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total Wynn Resorts, Limited stockholders' deficit | ( | ( | |||||||||
| Noncontrolling interests | ( | ( | |||||||||
| Total stockholders' deficit | ( | ( | |||||||||
| Total liabilities and stockholders' deficit | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Operating revenues: | |||||||||||||||||||||||
| Casino | $ | $ | $ | $ | |||||||||||||||||||
| Rooms | |||||||||||||||||||||||
| Food and beverage | |||||||||||||||||||||||
| Entertainment, retail and other | |||||||||||||||||||||||
| Total operating revenues | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Casino | |||||||||||||||||||||||
| Rooms | |||||||||||||||||||||||
| Food and beverage | |||||||||||||||||||||||
| Entertainment, retail and other | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Provision for credit losses | ( | ( | ( | ( | |||||||||||||||||||
| Pre-opening | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Property charges and other | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Operating income (loss) | ( | ( | |||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Interest expense, net of amounts capitalized | ( | ( | ( | ( | |||||||||||||||||||
| Change in derivatives fair value | |||||||||||||||||||||||
| Loss on debt financing transactions | ( | ( | |||||||||||||||||||||
| Other | ( | ( | ( | ||||||||||||||||||||
| Other income (expense), net | ( | ( | ( | ( | |||||||||||||||||||
| Income (loss) before income taxes | ( | ( | |||||||||||||||||||||
| Provision for income taxes | ( | ( | ( | ( | |||||||||||||||||||
| Net income (loss) | ( | ( | |||||||||||||||||||||
| Less: net (income) loss attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
| Net income (loss) attributable to Wynn Resorts, Limited | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Basic and diluted net income (loss) per common share: | |||||||||||||||||||||||
| Net income (loss) attributable to Wynn Resorts, Limited: | |||||||||||||||||||||||
| Basic | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Foreign currency translation adjustments, before and after tax | ( | ||||||||||||||||||||||
| Total comprehensive income (loss) | ( | ( | |||||||||||||||||||||
| Less: comprehensive (income) loss attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
| Comprehensive income (loss) attributable to Wynn Resorts, Limited | $ | $ | ( | $ | $ | ( | |||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(in thousands, except share data)
(unaudited)
| For the three months ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares outstanding | Par value | Treasury stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit | Total Wynn Resorts, Ltd. stockholders' deficit | Noncontrolling interests | Total stockholders' deficit | |||||||||||||||||||||||||||||||||||||||||||||
| Balances, April 1, 2023 | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Cancellation of restricted stock | ( | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Shares repurchased by the Company and held as treasury shares | ( | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends declared | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | ( | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2023 | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||
| For the three months ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares outstanding | Par value | Treasury stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit | Total Wynn Resorts, Ltd. stockholders' deficit | Noncontrolling interests | Total stockholders' deficit | |||||||||||||||||||||||||||||||||||||||||||||
| Balances, April 1, 2022 | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Cancellation of restricted stock | ( | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Shares repurchased by the Company and held as treasury shares | ( | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Transactions with subsidiary minority shareholders | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2022 | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(in thousands, except share data)
(unaudited)
| For the six months ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares outstanding | Par value | Treasury stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit | Total Wynn Resorts, Ltd. stockholders' deficit | Noncontrolling interests | Total stockholders' deficit | |||||||||||||||||||||||||||||||||||||||||||||
| Balances, January 1, 2023 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cancellation of restricted stock | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares repurchased by the Company and held as treasury shares | ( | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends declared | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | ( | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Transactions with subsidiary minority shareholders | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2023 | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||
| For the six months ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares outstanding | Par value | Treasury stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit | Total Wynn Resorts, Ltd. stockholders' deficit | Noncontrolling interests | Total stockholders' deficit | |||||||||||||||||||||||||||||||||||||||||||||
| Balances, January 1, 2022 | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cancellation of restricted stock | ( | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Shares repurchased by the Company and held as treasury shares | ( | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Contribution from noncontrolling interest | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Transaction with subsidiary minority shareholders | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2022 | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Six Months Ended June 30, | |||||||||||
| 2023 | 2022 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Deferred income taxes | ( | ||||||||||
| Stock-based compensation expense | |||||||||||
| Amortization of debt issuance costs | |||||||||||
| Loss on debt financing transactions | |||||||||||
| Provision for credit losses | ( | ( | |||||||||
| Change in derivatives fair value | ( | ( | |||||||||
| Property charges and other | |||||||||||
| Increase (decrease) in cash from changes in: | |||||||||||
| Receivables, net | ( | ||||||||||
| Inventories, prepaid expenses and other | ( | ( | |||||||||
| Customer deposits | ( | ( | |||||||||
| Accounts payable and accrued expenses | ( | ||||||||||
| Net cash provided by (used in) operating activities | ( | ||||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures, net of construction payables and retention | ( | ( | |||||||||
| Purchase of investment securities | ( | ||||||||||
| Purchase of intangible and other assets | ( | ( | |||||||||
| Proceeds from sale of assets and other | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from issuance of long-term debt | |||||||||||
| Repayments of long-term debt | ( | ( | |||||||||
| Repurchase of common stock | ( | ( | |||||||||
| Proceeds from exercise of stock options | |||||||||||
| Proceeds from issuance of subsidiary common stock | |||||||||||
| Proceeds from sale of noncontrolling interest in subsidiary | |||||||||||
| Distribution to noncontrolling interest | ( | ( | |||||||||
| Dividends paid | ( | ( | |||||||||
| Finance lease payments | ( | ( | |||||||||
| Payments for financing costs | ( | ( | |||||||||
| Other | ( | ||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate on cash, cash equivalents and restricted cash | ( | ( | |||||||||
| Cash, cash equivalents and restricted cash: | |||||||||||
| Decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
| Balance, beginning of period | |||||||||||
| Balance, end of period | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 - Organization
Note 2 - Basis of Presentation and Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures herein are adequate to make the information presented not misleading. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to a fair presentation of the results for the interim periods presented. The results for the three and six months ended June 30, 2023 are not necessarily indicative of results to be expected for any other interim period or the full fiscal year ending December 31, 2023. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries, and entities the Company identifies as variable interest entities ("VIEs") of which the Company is determined to be the primary beneficiary. For information on the Company's VIEs, see Note 17, "Retail Joint Venture." All significant intercompany accounts and transactions have been eliminated.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the financial statements relate to and include, but are not limited to, inputs into the Company's estimated allowance for credit losses, estimates regarding the useful lives and recoverability of long-lived and intangible assets, valuations of derivatives, and litigation and contingency estimates.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Investment Securities
Investment securities consist of short-term investments in United States treasury bills. Short-term investments have a maturity date of less than one year. Adjustments are made for amortization of premiums and accretion of discounts to maturity computed under the effective interest method. Such amortization is included in interest income together with realized gains and losses and the stated interest on such securities.
As of June 30, 2023, the Company had $288.2 million in investment securities, recorded at amortized cost. The estimated fair value of the Company's investment securities as of June 30, 2023 was approximately $286.9 million and the gross unrecognized holding loss was $1.3 million. As of June 30, 2023, the Company had $1.7 million in accrued interest, recorded in Investment securities on the Condensed Consolidated Balance Sheets.
As of December 31, 2022, the Company had no
Recently Issued Accounting Standards
The Company’s management has evaluated the recently issued, but not yet effective, accounting standards that have been issued or proposed by the Financial Accounting Standards Board or other standards-setting bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements will have a material effect on the Company’s financial position, results of operations and cash flows.
Note 3 - Cash, Cash Equivalents and Restricted Cash
| June 30, 2023 | December 31, 2022 | ||||||||||
| Cash and cash equivalents: | |||||||||||
Cash (1) | $ | $ | |||||||||
Cash equivalents (2) | |||||||||||
| Total cash and cash equivalents | |||||||||||
Restricted cash (3) | |||||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | |||||||||
(1) Cash consists of cash on hand and bank deposits. (2) Cash equivalents consist of bank time deposits and money market funds. (3) Restricted cash consists of cash subject to certain contractual restrictions, cash collateral associated with obligations and cash held in a trust in accordance with WML's share award plan, and as of June 30, 2023 and December 31, 2022 included $ | |||||||||||
The following table presents the supplemental cash flow disclosures of the Company (in thousands):
| Six Months Ended June 30, | |||||||||||
| 2023 | 2022 | ||||||||||
| Cash paid for interest, net of amounts capitalized | $ | $ | |||||||||
| Liability settled with shares of common stock | $ | $ | |||||||||
| Accounts and construction payables related to property and equipment | $ | $ | |||||||||
Other liabilities related to intangible assets (1) | $ | $ | |||||||||
| Finance lease liabilities arising from obtaining finance lease assets | $ | $ | |||||||||
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 4 - Receivables, net
Accounts Receivable and Credit Risk
| June 30, 2023 | December 31, 2022 | ||||||||||
| Casino | $ | $ | |||||||||
| Hotel | |||||||||||
| Other | |||||||||||
| Less: allowance for credit losses | ( | ( | |||||||||
| $ | $ | ||||||||||
As of June 30, 2023 and December 31, 2022, approximately 64.2 % and 57.6 %, respectively, of the Company's markers were due from customers residing outside the United States, primarily in Asia. Business or economic conditions or other significant events in the countries in which the Company's customers reside could affect the collectability of such receivables.
The Company’s allowance for casino credit losses was 33.2 % and 43.2 % of gross casino receivables as of June 30, 2023 and December 31, 2022, respectively. Although the Company believes that its allowance is adequate, it is possible the estimated amounts of cash collections with respect to receivables could change. The Company’s allowance for credit losses from its hotel and other receivables is not material.
The following table shows the movement in the Company's allowance for credit losses recognized for receivables that occurred during the periods presented (in thousands):
| June 30, | |||||||||||
| 2023 | 2022 | ||||||||||
| Balance at beginning of year | $ | $ | |||||||||
| Provision for credit losses | ( | ( | |||||||||
| Write-offs | ( | ( | |||||||||
| Recoveries of receivables previously written off | |||||||||||
| Effect of exchange rate | ( | ( | |||||||||
| Balance at end of period | $ | $ | |||||||||
Note 5 - Property and Equipment, net
Property and equipment, net consisted of the following (in thousands):
| June 30, 2023 | December 31, 2022 | ||||||||||
| Buildings and improvements | $ | $ | |||||||||
| Land and improvements | |||||||||||
| Furniture, fixtures and equipment | |||||||||||
| Airplanes | |||||||||||
| Construction in progress | |||||||||||
| Less: accumulated depreciation | ( | ( | |||||||||
| $ | $ | ||||||||||
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 6 - Goodwill and Intangible Assets, net
The following table shows the movement in the Company's goodwill and intangible assets balances that occurred during the periods presented (in thousands):
| June 30, 2023 | December 31, 2022 | ||||||||||
| Finite-lived intangible assets: | |||||||||||
| Macau gaming concession | $ | $ | |||||||||
| Less: accumulated amortization | ( | ( | |||||||||
| Massachusetts gaming license | |||||||||||
| Less: accumulated amortization | ( | ( | |||||||||
| Other finite-lived intangible assets | |||||||||||
| Less: accumulated amortization | ( | ( | |||||||||
| Total finite-lived intangible assets | |||||||||||
| Indefinite-lived intangible assets: | |||||||||||
| Water rights and other | |||||||||||
| Total indefinite-lived intangible assets | |||||||||||
| Goodwill: | |||||||||||
| Balance at beginning of year | |||||||||||
| Foreign currency translation | ( | ||||||||||
| Impairment | ( | ||||||||||
| Balance at end of period | |||||||||||
| Total goodwill and intangible assets, net | $ | $ | |||||||||
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Macau Gaming Concession
In December 2022, Wynn Resorts (Macau) S.A. ("Wynn Macau SA"), an indirect subsidiary of Wynn Resorts, Limited, entered into a definitive gaming concession contract (the "Gaming Concession Contract") with the Macau government, pursuant to which Wynn Macau SA was granted a 10 -year gaming concession commencing on January 1, 2023 and expiring on December 31, 2032, to operate games of chance at Wynn Palace and Wynn Macau. Under the terms of the Gaming Concession Contract, Wynn Macau SA is required to pay the Macau government an annual gaming premium consisting of a fixed and a variable portion. The fixed portion of the premium is composed of an annual amount equal to MOP30.0 million (approximately $3.7 million). The variable portion is composed of an annual amount equal to MOP300,000 (approximately $37 thousand) per gaming table located in special gaming halls reserved exclusively to particular games or players, MOP150,000 (approximately $19 thousand) per gaming table that is not reserved exclusively to particular games or players, and MOP1,000 (approximately $124 ) per gaming machine, including slot machines, operated by Wynn Macau SA.
In December 2022, in accordance with the requirements of the Macau Gaming Law, Wynn Macau SA and Palo Real Estate Company Limited ("Palo"), a subsidiary of Wynn Macau SA, entered into agreements (collectively, the "Property Transfer Agreements") with the Macau government, pursuant to which Wynn Macau SA and Palo transferred the casino areas and gaming equipment of the Company's Macau Operations to the Macau government without compensation on December 31, 2022, and the Macau government agreed to transfer such casino areas and gaming equipment back to Wynn Macau SA as of January 1, 2023, for its use in the operation of games of chance at Wynn Macau and Wynn Palace as permitted under the Gaming Concession Contract through December 31, 2032. As the Company expects to continue to operate the casino areas and gaming equipment at its Macau Operations in the same manner as under the previous concession, obtain substantially all of the economic benefits, and bear all of the risks arising from the use of these assets, the Company will continue to recognize the casino areas and gaming equipment as property and equipment over their remaining estimated useful lives. In exchange for the use of such assets, Wynn Macau SA has agreed to make annual payments to the Macau government of MOP53.1 million (approximately $6.6 million) during each of the years ending December 31, 2023, 2024, and 2025, and an annual payment of MOP177.0 million (approximately $21.9 million) during each of the remaining years of the term of the Gaming Concession Contract through December 31, 2032, subject to adjustment in each year based on the average price index in Macau. Pursuant to the Gaming Concession Contract, Wynn Macau SA will revert to the Macau government the casino areas and gaming equipment, without compensation and free of encumbrance upon the rescission or termination of the gaming concession on December 31, 2032.
On January 1, 2023, the Company recognized an intangible asset and financial liability of MOP1.68 billion (approximately $208.3 million), representing the right to operate games of chance at Wynn Palace and Wynn Macau and the unconditional obligation to make payments under the Gaming Concession Contract. This intangible asset comprises the contractually obligated annual payments of fixed and variable premiums, as well as fees associated with the above-described Property Transfer Agreements. The contractually obligated annual variable premium payments associated with the intangible asset was determined using the total number of gaming tables and gaming machines that Wynn Macau SA is currently approved to operate by the Macau government. In the accompanying condensed consolidated balance sheets, the noncurrent portion of the financial liability is included in "Other long-term liabilities" and the current portion is included in "Other accrued liabilities." The intangible asset is being amortized on a straight-line basis over the 10 -year term of the Gaming Concession Contract. The Company expects that amortization of the Macau Gaming Concession will be $10.4 million in the six months ending December 31, 2023, and $20.9 million each year from 2024 to 2032.
Wynn Interactive Goodwill
During the three months ended June 30, 2022, as a result of management's decision to cease the operations of Betbull Limited ("BetBull"), a subsidiary of Wynn Interactive, the Company impaired its trademark and customer list totaling $10.3 million and impaired the remaining balance of goodwill related to the BetBull reporting unit totaling $7.5 million.
During the three months ended March 31, 2022, as a result of changes in forecasts and other industry-specific factors, the Company identified interim indicators of impairment related to the goodwill assigned to the reporting units comprising Wynn Interactive. After revisiting the estimated fair value of those reporting units based on a combination of the income and market approaches, the Company recognized impairment of $30.3 million. Impairment of goodwill and intangible assets is recorded in Property charges and other in the accompanying Condensed Consolidated Statements of Operations.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 7 - Long-Term Debt
Long-term debt consisted of the following (in thousands):
| June 30, 2023 | December 31, 2022 | ||||||||||
| Macau Related: | |||||||||||
WM Cayman II Revolver, due 2025 (1) | $ | $ | |||||||||
| WML 4 7/8% Senior Notes, due 2024 | |||||||||||
| WML 5 1/2% Senior Notes, due 2026 | |||||||||||
| WML 5 1/2% Senior Notes, due 2027 | |||||||||||
| WML 5 5/8% Senior Notes, due 2028 | |||||||||||
| WML 5 1/8% Senior Notes, due 2029 | |||||||||||
WML 4 1/2% Convertible Bonds, due 2029 (2) | |||||||||||
| U.S. and Corporate Related: | |||||||||||
WRF Credit Facilities (3): | |||||||||||
| WRF Term Loan, due 2024 | |||||||||||
| WRF Term Loan, due 2027 | |||||||||||
| WLV 4 1/4% Senior Notes, due 2023 | |||||||||||
| WLV 5 1/2% Senior Notes, due 2025 | |||||||||||
| WLV 5 1/4% Senior Notes, due 2027 | |||||||||||
| WRF 7 3/4% Senior Notes, due 2025 | |||||||||||
| WRF 5 1/8% Senior Notes, due 2029 | |||||||||||
| WRF 7 1/8% Senior Notes, due 2031 | |||||||||||
Retail Term Loan, due 2025 (4) | |||||||||||
| WML Convertible Bond Conversion Option Derivative | |||||||||||
| Less: Unamortized debt issuance costs and original issue discounts and premium, net | ( | ( | |||||||||
| Less: Current portion of long-term debt | ( | ( | |||||||||
| Total long-term debt, net of current portion | $ | $ | |||||||||
(1) As of June 30, 2023, the borrowings under the WM Cayman II Revolver bear interest at LIBOR or HIBOR plus a margin of 1.875 % to 2.875 % per annum based on WM Cayman II’s leverage ratio on a consolidated basis, subject to a floor on the interest rate margin of 2.625 % per annum. Approximately $312.5 million and $1.18 billion of the WM Cayman II Revolver bears interest at a rate of LIBOR plus 2.875 % per year and HIBOR plus 2.875 % per year, respectively. As of June 30, 2023, the weighted average interest rate was approximately 7.81 %. As of June 30, 2023, the WM Cayman II Revolver was fully drawn. Due to the global phase out of LIBOR, on June 27, 2023, WM Cayman II entered into an amended and restated facility agreement to, among other things, transition the base rate applicable to U.S. dollar-denominated loans made under the WM Cayman II Revolver from LIBOR to the term secured overnight financing rate ("Term SOFR"). The new Term SOFR base rate became effective July 4, 2023.
(2) As of June 30, 2023, the net carrying amount of the WML Convertible Bonds was $470.7 million, with unamortized debt discount and debt issuance costs of $129.3 million. The Company recorded contractual interest expense of $6.8 million and $8.6 million and amortization of discounts and issuance costs of $4.3 million and $5.4 million during the three and six months ended June 30, 2023, respectively.
(3) The WRF Credit Facilities bear interest at a rate of Term SOFR plus 1.85 % per year. As of June 30, 2023, the weighted average interest rate was approximately 6.95 %. Additionally, as of June 30, 2023, the available borrowing capacity under the WRF Revolver was $737.0 million, net of $13.0 million in outstanding letters of credit.
WM Cayman II Revolver Facility Agreement Amendment
Due to the global phase out of LIBOR, on June 27, 2023, WM Cayman Holdings Limited II, as borrower ("WM Cayman II"), and WML, as guarantor, entered into an Amended and Restated Facility Agreement with Bank of China Limited, Macau Branch, as agent for the syndicate of lenders (as amended and restated, the "Facility Agreement"), to transition the base rate applicable to loans denominated in U.S. dollars made pursuant to the revolving credit facility provided thereunder (the "WM
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Cayman II Revolver") from the London Interbank Offered Rate ("LIBOR") to Term SOFR. The new Term SOFR base rate became effective July 4, 2023.
The WM Cayman II Revolver consists of a U.S. dollar tranche in an amount of $312.5 million ("Facility A") and a Hong Kong dollar tranche in an amount of HK$9.26 billion (equivalent to $1.18 billion) ("Facility B"). Pursuant to the Facility Agreement, loans provided under Facility A bear interest at a variable rate per annum equal to: (a) Term SOFR, plus 0.10 % (subject to a minimum floor of 0.00 %), plus (b) a margin of 1.875 % to 2.875 % based on the consolidated leverage ratio of WM Cayman II and its subsidiaries (as calculated pursuant to the Facility Agreement), and loans provided under Facility B bear interest at a variable rate per annum equal to: (i) the Hong Kong Interbank Offered Rate, plus (ii) a margin of 1.875 % to 2.875 % based on the consolidated leverage ratio of WM Cayman II and its subsidiaries (as calculated pursuant to the Facility Agreement).
WML 4 1/2% Convertible Bonds, due 2029
On March 7, 2023, WML completed an offering (the "Offering") of $600 million 4.50 % convertible bonds due 2029 (the "WML Convertible Bonds"). The WML Convertible Bonds are governed by a trust deed dated March 7, 2023 (the "Trust Deed"), between WML and DB Trustees (Hong Kong) Limited, as trustee. WML, DB Trustees (Hong Kong) Limited, as trustee, and Deutsche Bank Trust Company Americas entered into an agency agreement, appointing Deutsche Bank Trust Company Americas as the principal paying agent, principal conversion agent, transfer agent and registrar in relation to the WML Convertible Bonds. The net proceeds from the Offering, after deduction of commissions and other related expenses, were $585.9 million. WML intends to use the net proceeds for general corporate purposes.
The WML Convertible Bonds bear interest on their outstanding principal amount from and including March 7, 2023 at the rate of 4.50 % per annum, payable semi-annually in arrears on March 7 and September 7 of each year. At any time on or after April 17, 2023, the WML Convertible Bonds are convertible at the option of the holder thereof into fully paid ordinary shares of WML, each with a nominal value of HK$0.001 per share ("Ordinary Shares"), at the initial conversion price of approximately HK$10.24 (equivalent to approximately $1.31 ) per share, subject to and upon compliance with the terms and conditions of the WML Convertible Bonds (the "Terms and Conditions," and such right, the "Conversion Right"). The conversion price is at the fixed exchange rate of HK$7.8497 per $1.00, subject to standard adjustments for certain dilutive events as described in the Terms and Conditions. WML has the option upon conversion by a bondholder to pay an amount of cash equivalent described in the Terms and Conditions in order to satisfy such Conversion Right in whole or in part.
Holders of the WML Convertible Bonds have the option to require WML to redeem all or some only of such holder’s WML Convertible Bonds (i) on March 7, 2027 at their principal amount together with interest accrued but unpaid to, but excluding, the date fixed for redemption; or (ii) on the Relevant Event Redemption Date (as defined in the Terms and Conditions) at their principal amount together with interest accrued but unpaid to, but excluding, such date, following the occurrence of (a) when the Ordinary Shares cease to be listed or admitted to trading or are suspended from trading for a period equal to or exceeding 10 consecutive trading days on the Stock Exchange of Hong Kong Limited, or if applicable, the alternative stock exchange, (b) when there is a Change of Control (as defined in the Terms and Conditions), or (c) when less than 25% of WML’s total number of issued Ordinary Shares are held by the public (as interpreted under Rule 8.24 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited).
The WML Convertible Bonds may also be redeemed at the option of WML under certain circumstances specified in the Terms and Conditions, in whole, but not in part, at any time after March 7, 2027, but prior to March 7, 2029, upon giving notice to the bondholders in accordance with the Terms and Conditions. The WML Convertible Bonds constitute direct, unsubordinated, unconditional and, subject to the Terms and Conditions, unsecured obligations of WML and rank pari passu and without any preference or priority among themselves. The Ordinary Shares to be issued upon exercise of Conversion Right will be fully-paid and will in all respects rank pari passu with the fully-paid Ordinary Shares in issue on the relevant registration date set forth in the Terms and Conditions.
The Trust Deed contains covenants limiting WML's and all of its subsidiaries' ability to, among other things, create, permit to subsist or arise or have outstanding any mortgage, charge, pledge, lien or other encumbrance or certain security interest; consolidate or merge with or into another company; and sell, assign, transfer, convey or otherwise dispose of all or substantially all of its and its subsidiaries’ properties or assets, with certain exceptions. The Trust Deed also contains customary events of default.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The Company determined that the conversion feature contained within the WML Convertible Bonds is required to be bifurcated from the debt host contract and accounted for as a free-standing derivative (the "WML Convertible Bond Conversion Option Derivative"). In accordance with applicable accounting standards, the WML Convertible Bond Conversion Option Derivative will be reported at fair value as of the end of each reporting period, with changes recognized in the statement of operations. For more information, see "Note 8 - WML Convertible Bond Conversion Option Derivative." As a result, the Company recognized a debt discount of $123.5 million within Long-term debt, representing the estimated fair value of the holders' conversion option upon completion of the Offering. The debt discount will be amortized to interest expense over the term of the WML Convertible Bonds using the effective interest method. As of June 30, 2023, the estimated fair value of the WML Convertible Bond Conversion Option Derivative was a liability of $77.0 million, recorded within Long-term debt within the accompanying Condensed Consolidated Balance Sheet.
WRF Credit Facility Agreement Amendment
On May 17, 2023, Wynn Resorts Finance, LLC ("WRF") and certain of its subsidiaries entered into an amendment (the "WRF Credit Facility Agreement Amendment") to its existing credit agreement (the "WRF Credit Facility Agreement") among Deutsche Bank AG New York Branch, as administrative agent and collateral agent, and the other lenders party thereto.
The WRF Credit Facility Agreement Amendment amends the WRF Credit Facility Agreement to: (i) transition the benchmark rate from LIBOR to Term SOFR and to make conforming changes, (ii) reduce the aggregate principal amount of revolving commitments under the revolving credit facility by $100.0 million, from $850.0 million to $750.0 million, (iii) extend the stated maturity date for lenders electing to extend their revolving commitments in an amount equal to approximately $681.3 million from September 20, 2024 to September 20, 2027, and (iv) extend the stated maturity date for lenders electing to extend their term loan commitments in an amount equal to approximately $749.4 million from September 20, 2024 to September 20, 2027. Lenders who elected not to extend their revolving commitments in an amount equal to approximately $68.7 million will remain subject to a stated maturity date of September 20, 2024, and lenders who elected not to extend their term loan commitments in an amount equal to approximately $75.6 million will remain subject to a stated maturity date of September 20, 2024. In connection with the WRF Credit Facility Agreement Amendment, the Company recognized a loss on debt financing transactions of $1.2 million within the accompanying Condensed Consolidated Statement of Operations, and the Company recorded debt issuance costs of $5.1 million, within the Condensed Consolidated Balance Sheet.
WRF 7 1/8% Senior Notes, due 2031 and WRF 7 3/4% Senior Notes, due 2025
On February 16, 2023, WRF and its subsidiary Wynn Resorts Capital Corp. (together with WRF, the "WRF Issuers"), each an indirect wholly owned subsidiary of the Company, issued $600.0 million aggregate principal amount of 7 1/8% Senior Notes due 2031 (the "2031 WRF Senior Notes") pursuant to an indenture among the WRF Issuers, the guarantors party thereto, and U.S. Bank Trust Company, National Association, as trustee, in a private offering. The 2031 WRF Senior Notes were issued at par, for proceeds of $596.2 million, net of $3.8 million of related fees and expenses. Also on February 16, 2023, the WRF Issuers completed a cash tender offer for any and all of the outstanding principal amount of the 7 3/4% Senior Notes due 2025 (the "2025 WRF Senior Notes") and accepted for purchase valid tenders with respect to $506.4 million principal amount and paid a tender premium of $12.4 million to the holders of such tendered 2025 WRF Senior Notes. The Company used a portion of the net proceeds from the issuance of the 2031 WRF Senior Notes to purchase such tendered 2025 WRF Senior Notes and to pay the tender premium and related fees and expenses.
In April 2023, WRF repurchased all of the outstanding 2025 WRF Senior Notes using the remaining net proceeds from the issuance of the 2031 WRF Senior Notes and cash held by WRF, at a price equal to 101.938 % of the principal amount plus accrued interest under the terms of its indenture.
In connection with the issuance of the 2031 WRF Senior Notes and purchase of the 2025 WRF Senior Notes, the Company recognized a loss on debt financing transactions of $10.6 million within the accompanying Condensed Consolidated Statement of Operations, and the Company recorded debt issuance costs of $11.4 million within the accompanying Condensed Consolidated Balance Sheet.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
WLV 4 1/4% Senior Notes, due 2023
In March 2023, the Company repurchased all of its outstanding Wynn Las Vegas 4 1/4% Senior Notes due 2023, representing an aggregate principal amount of $500.0 million, using cash held by WRF, at a price equal to 100 % of the principal amount plus accrued interest under the terms of its indenture. The Company recognized a loss on early extinguishment of debt of $1.0 million.
Retail Term Loan Second Amendment
On June 2, 2023, Wynn/CA Plaza Property Owner, LLC and Wynn/CA Property Owner, LLC (collectively, the "Borrowers") entered into a second amendment (the "Retail Term Loan Second Amendment") to their existing term loan agreement (the "Retail Term Loan Agreement"). The Retail Term Loan Second Amendment, which is effective as of July 3, 2023, amends the Retail Term Loan Agreement to transition the benchmark interest rate applicable to the secured loan in an aggregate principal amount of $615.0 million issued to the Borrowers thereunder from LIBOR to SOFR and to make related conforming changes to the Retail Term Loan Agreement.
Debt Covenant Compliance
As of June 30, 2023, management believes the Company was in compliance with all debt covenants.
Fair Value of Long-Term Debt
Note 8 - WML Convertible Bond Conversion Option Derivative
An embedded derivative is a feature contained within a contract that affects some or all of the cash flows or the value of other exchanges required by the contract in a manner similar to a derivative instrument. Embedded derivatives are required to be bifurcated and accounted for separately from the host contract and carried at fair value when: (a) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract; and (b) a separate, freestanding instrument with the same terms would qualify as a derivative instrument. The Company determined that the conversion feature contained within the WML Convertible Bonds is not indexed to WML's equity and, as such, is required to be bifurcated from the debt host contract and accounted for as a free-standing derivative. In accordance with applicable accounting standards, the WML Convertible Bond Conversion Option Derivative will be reported at fair value as of the end of each reporting period, with changes recognized in the statement of operations.
The Company used a binomial lattice model in order to estimate the fair value of the embedded derivative in the WML Convertible Bonds. Inherent in a binomial options pricing model are unobservable (Level 3) inputs and assumptions related to expected share-price volatility, risk-free interest rate, expected term, and dividend yield. The Company estimates the volatility of shares of WML common stock based on historical volatility that matches the expected remaining term to maturity of the WML Convertible Bonds. The risk-free interest rate is based on the Hong Kong and United States benchmark yield curves on the valuation date for a maturity similar to the expected remaining term of the WML Convertible Bonds. The expected life of the WML Convertible Bonds is assumed to be equivalent to their remaining term to maturity. The dividend yield is based on the historical WML dividend rate over the last several years.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The following table sets forth the inputs to the lattice models that were used to value the embedded derivatives:
| June 30, 2023 | March 2, 2023 (Pricing date) | ||||||||||
| WML stock price | HK$ | HK$ | |||||||||
| Estimated volatility | % | % | |||||||||
| Risk-free interest rate | % | % | |||||||||
| Expected term (years) | |||||||||||
| Dividend yield | % | % | |||||||||
In connection with the completion of the Offering on March 7, 2023, the Company recognized a debt discount and a corresponding liability for the embedded derivative, based on an estimated fair value of $123.5 million. The debt discount will be amortized to interest expense over the term of the WML Convertible Bonds using the effective interest method. As of June 30, 2023, the estimated fair value of the embedded derivative was a liability of $77.0 million, recorded within Long-term debt within the accompanying Condensed Consolidated Balance Sheet. In connection with the change in fair value, the Company recorded a $21.6 million and $46.5 million gain within Change in derivatives fair value in the accompanying Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2023, respectively.
Note 9 - Stockholders' Deficit
Dividends
On June 6, 2023, the Company paid a cash dividend of $0.25 per share and recorded $28.5 million as a reduction of accumulated deficit.
On August 9, 2023, the Company announced a cash dividend of $0.25 per share, payable on August 31, 2023 to stockholders of record as of August 21, 2023.
Noncontrolling Interests
Retail Joint Venture
During the six months ended June 30, 2023 and 2022, the Retail Joint Venture made aggregate distributions of approximately $8.9 million and $16.5 million, respectively, to its non-controlling interest holder. For more information on the Retail Joint Venture, see Note 17, "Retail Joint Venture."
During the three months ended March 31, 2022, in exchange for cash consideration of $50.0 million, the Company sold to Crown Acquisitions Inc. ("Crown") a 49.9 % interest in certain additional retail space contributed by the Company to the Retail Joint Venture. In connection with this transaction, the Company recorded $48.6 million of additional paid-in capital and $1.5 million of noncontrolling interest, within Contribution from noncontrolling interest in the accompanying Condensed Consolidated Statement of Stockholders' Deficit for the three months ended March 31, 2022.
WML Securities Lending Agreement
In connection with the WML Convertible Bonds Offering, WM Cayman Holdings I Limited ("WM Cayman I"), a wholly owned subsidiary of the Company and holder of our approximately 72 % ownership interest in WML, entered into a stock borrowing and lending agreement with Goldman Sachs International (the "WML Stock Borrower") on March 2, 2023 (as amended on March 30, 2023, the "Securities Lending Agreement"), pursuant to which WM Cayman I has agreed to lend to the WML Stock Borrower up to 459,774,985 of its ordinary share holdings in WML, upon and subject to the terms and conditions in the Securities Lending Agreement. WM Cayman I may, at its sole discretion, terminate any stock loan by giving the WML Stock Borrower no less than five business days' notice. The Securities Lending Agreement terminates on the date on which the WML Convertible Bonds have been redeemed, or converted in full, whichever is the earlier. On March 6, 2023, the WML Stock Borrower borrowed 459,774,985 ordinary shares of WML under the Securities Lending Agreement and on April 3, 2023 returned 280,000,000 of such shares to WM Cayman I. As of the date of this report, the WML Stock Borrower held 179,774,985 WML shares under the Securities Lending Agreement.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 10 - Fair Value Measurements
The following tables present assets and liabilities carried at fair value (in thousands):
| Fair Value Measurements Using: | |||||||||||||||||||||||
| June 30, 2023 | Quoted Market Prices in Active Markets (Level 1) | Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash equivalents | $ | ||||||||||||||||||||||