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Melco Announces Record Adjusted Property EBITDA in the Fourth Quarter 2018, Share Repurchase and Increase in Quarterly Dividend to US$0.1551 per ADS

MACAU, Feb. 19, 2019 (GLOBE NEWSWIRE) -- Melco Resorts & Entertainment Limited (Nasdaq: MLCO) (“Melco” or the “Company”), a developer, owner and operator of casino gaming and entertainment casino resort facilities in Asia, today reported its unaudited financial results for the fourth quarter and full year ended December 31, 2018.

Net revenue for the fourth quarter of 2018 was US$1,396.5 million, representing an increase of approximately 5% from US$1,332.6 million for the comparable period in 2017. The increase in net revenue was primarily attributable to higher group-wide rolling chip and mass market table games gross gaming revenues, partially offset by higher commissions reported as a reduction in revenue upon the Company’s adoption of a new revenue recognition standard issued by the Financial Accounting Standards Board (the “New Revenue Standard”). The Company adopted the New Revenue Standard on January 1, 2018 under the modified retrospective method. Results for the periods beginning on or after January 1, 2018 are presented under the New Revenue Standard, while prior year amounts are not adjusted and continue to be reported in accordance with the previous basis. Under the previous basis, before the adoption of the New Revenue Standard, net revenue for the fourth quarter of 2018 would have been US$1,497.7 million, which would have represented an increase of approximately 12% from the US$1,332.6 million for the comparable period in 2017.

Operating income for the fourth quarter of 2018 was US$204.0 million, compared with operating income of US$129.0 million in the fourth quarter of 2017, representing an increase of 58%.

Adjusted property EBITDA(1) was US$425.2 million for the fourth quarter of 2018, as compared to Adjusted property EBITDA of US$339.8 million in the fourth quarter of 2017, representing an increase of 25%. The increase in Adjusted property EBITDA was mainly attributable to better performance in the group-wide rolling chip and mass market table games segments.

Net income attributable to Melco Resorts & Entertainment Limited for the fourth quarter of 2018 was US$128.0 million, or US$0.27 per ADS, compared with US$81.2 million, or US$0.17 per ADS, in the fourth quarter of 2017. The net income attributable to noncontrolling interests during the fourth quarter of 2018 was US$2.2 million and the net loss attributable to noncontrolling interests during the fourth quarter of 2017 was US$9.8 million, both of which were related to Studio City and City of Dreams Manila.

Mr. Lawrence Ho, our Chairman and Chief Executive Officer, commented, “Opening of the iconic, award-winning Morpheus, and the continued robust growth in Macau’s mass gaming market have allowed Melco to deliver record-level Property EBITDA despite the challenging macro environment.

“Melco’s dedication to excellence has been widely recognized, most recently by the Michelin Guide 2019 with the Company remaining as the leading integrated resort operator in the world with the most Michelin-starred restaurants. We are extremely proud to achieve a record-breaking milestone with six of Melco’s signature restaurants being awarded with a total of ten Michelin Stars. That includes Alain Ducasse at Morpheus, which was awarded with two Michelin Stars in less than six months after opening, and Jade Dragon in City of Dreams, which was awarded with three Michelin Stars.

“The opening of Morpheus only marks the beginning of the relaunch of City of Dreams. On top of that, we have recently unveiled the significantly upgraded VIP gaming spaces on the second floor of City of Dreams. Rolling refurbishment of Nüwa will also soon commence with the upgraded hotel rooms expected to come online over the next eighteen months.

“In January, the Macau government authorized Melco to operate 40 additional gaming tables at City of Dreams. We are sincerely thankful of the Macau government for its consideration and approval of our gaming table application.

“At Studio City, we continue to enhance the entertainment offerings with a series of property upgrades, which include the recent launch of the world’s most electrifying stunt show – Elekron. Earlier in January, we also opened the pop-up ‘Legend Heroes Park’, paving way for the opening of the permanent venue later in the year. Lastly, the ‘Flip Out’ Trampoline Park is expected to open in the first half of 2019.

“In the Philippines, City of Dreams Manila delivered another solid quarter underpinned by robust mass gaming revenue growth.

“The Board has, after evaluating the Company’s current liquidity position and future expected capital needs, decided to increase the quarterly cash dividend by 7% to US$0.0517 per ordinary share, which is equivalent to US$0.1551 per ADS, from the previous quarterly dividend of US$0.04835 per ordinary share. Since our third quarter results announcement, the Company has also repurchased approximately 10 million ADSs, worth approximately US$165 million, under the US$500 million share repurchase program the Company announced in November 2018.

“Lastly, Japan continues to be a core focus for us. We expect development of the next generation of integrated resorts to soon commence in this incredibly exciting, yet currently underpenetrated, tourism destination. With our focus on the Asian premium segment, high quality assets, dedication to world-class entertainment offerings, market-leading social safeguards and compliance culture, and our commitment to being an ideal partner to local governments and communities alike, we believe Melco is in a strong position to help Japan realize the vision for integrated resort development with a unique Japanese touch.”

City of Dreams Fourth Quarter Results

For the quarter ended December 31, 2018, net revenue at City of Dreams was US$724.5 million compared to US$612.6 million in the fourth quarter of 2017. City of Dreams generated Adjusted EBITDA of US$229.7 million in the fourth quarter of 2018 compared with Adjusted EBITDA of US$169.7 million in the fourth quarter of 2017. The year-on year increase in Adjusted EBITDA was primarily a result of better performances in the rolling chip and mass market table games segments.

Rolling chip volume totaled US$11.4 billion for both quarters ended December 31, 2018 and 2017. The rolling chip win rate was 3.2% in the fourth quarter of 2018 versus 2.7% in the fourth quarter of 2017. The expected rolling chip win rate range is 2.7%-3.0%.

Mass market table games drop increased to US$1,308.0 million in the fourth quarter of 2018 compared with US$1,226.0 million in the fourth quarter of 2017. The mass market table games hold percentage was 33.0% in the fourth quarter of 2018 compared to 28.6% in the fourth quarter of 2017.

Gaming machine handle for the fourth quarter of 2018 was US$1,051.8 million, compared with US$1,122.0 million in the fourth quarter of 2017. The gaming machine win rate was 3.7% in the fourth quarter of 2018 versus 4.2% in the fourth quarter of 2017.

Total non-gaming revenue at City of Dreams in the fourth quarter of 2018 was US$99.4 million, compared with US$71.9 million in the fourth quarter of 2017.

Altira Macau Fourth Quarter Results

For the quarter ended December 31, 2018, net revenue at Altira Macau was US$137.6 million compared to US$140.2 million in the fourth quarter of 2017. Altira Macau generated Adjusted EBITDA of US$20.2 million in the fourth quarter of 2018 compared with Adjusted EBITDA of US$17.5 million in the fourth quarter of 2017.

Rolling chip volume totaled US$6.5 billion in the fourth quarter of 2018 versus US$4.9 billion in the fourth quarter of 2017. The rolling chip win rate was 3.1% in the fourth quarter of 2018 versus 3.3% in the fourth quarter of 2017. The expected rolling chip win rate range is 2.7%-3.0%.

In the mass market table games segment, drop totaled US$127.1 million in the fourth quarter of 2018, representing an increase from US$125.2 million generated in the comparable period in 2017. The mass market table games hold percentage was 19.7% in the fourth quarter of 2018 compared with 18.4% in the fourth quarter of 2017.

Gaming machine handle for the fourth quarter of 2018 was US$29.9 million, compared with US$20.6 million in the fourth quarter of 2017. The gaming machine win rate was 4.3% in the fourth quarter of 2018 versus 6.0% in the fourth quarter of 2017.

Total non-gaming revenue at Altira Macau in the fourth quarter of 2018 was US$7.1 million, compared with US$7.0 million in the fourth quarter of 2017.

Mocha Clubs Fourth Quarter Results

Net revenue from Mocha Clubs totaled US$26.5 million in the fourth quarter of 2018 as compared to US$30.7 million in the fourth quarter of 2017. Mocha Clubs generated US$4.7 million of Adjusted EBITDA in the fourth quarter of 2018 compared with US$7.4 million in the same period in 2017.

Gaming machine handle for the fourth quarter of 2018 was US$593.9 million, compared with US$622.7 million in the fourth quarter of 2017. The gaming machine win rate was 4.5% in the fourth quarter of 2018 versus 4.8% in the fourth quarter of 2017.

Studio City Fourth Quarter Results

For the quarter ended December 31, 2018, net revenue at Studio City was US$340.7 million compared to US$369.0 million in the fourth quarter of 2017. Studio City generated Adjusted EBITDA of US$102.7 million in the fourth quarter of 2018 compared with Adjusted EBITDA of US$91.5 million in the fourth quarter of 2017.

Rolling chip volume totaled US$3.5 billion in the fourth quarter of 2018 versus US$5.7 billion in the fourth quarter of 2017. The rolling chip win rate was 3.8% in the fourth quarter of 2018 versus 2.8% in the fourth quarter of 2017. The expected rolling chip win rate range is 2.7%-3.0%.

Mass market table games drop decreased to US$825.4 million in the fourth quarter of 2018 compared with US$848.2 million in the fourth quarter of 2017. The mass market table games hold percentage was 27.0% in the fourth quarter of 2018 compared to 26.1% in the fourth quarter of 2017.

Gaming machine handle for the fourth quarter of 2018 was US$641.8 million, compared with US$539.0 million in the fourth quarter of 2017. The gaming machine win rate was 3.6% in the fourth quarter of 2018 versus 4.1% in the fourth quarter of 2017.

Total non-gaming revenue at Studio City in the fourth quarter of 2018 was US$46.4 million, compared with US$52.2 million in the fourth quarter of 2017.

City of Dreams Manila Fourth Quarter Results

For the quarter ended December 31, 2018, net revenue at City of Dreams Manila was US$155.2 million compared to US$167.5 million in the fourth quarter of 2017. City of Dreams Manila generated Adjusted EBITDA of US$67.9 million in the fourth quarter of 2018 compared to US$53.8 million in the comparable period of 2017. The year-on year increase in Adjusted EBITDA was mainly attributable to better performance in all gaming segments.

Rolling chip volume totaled US$2.4 billion in the fourth quarter of 2018 versus US$2.9 billion in the fourth quarter of 2017. The rolling chip win rate was 3.7% in the fourth quarter of 2018 versus 3.1% in the fourth quarter of 2017. The expected rolling chip win rate range is 2.7%-3.0%.

Mass market table games drop increased to US$197.3 million for the fourth quarter of 2018, compared with US$189.2 million in the fourth quarter of 2017. The mass market table games hold percentage was 31.4% in the fourth quarter of 2018 compared to 30.9% in the fourth quarter of 2017.

Gaming machine handle for the fourth quarter of 2018 was US$933.6 million, compared with US$793.3 million in the fourth quarter of 2017. The gaming machine win rate was 5.3% in the fourth quarter of 2018 versus 5.5% in the fourth quarter of 2017.

Total non-gaming revenue at City of Dreams Manila in the fourth quarter of 2018 was US$29.4 million, compared with US$31.4 million in the fourth quarter of 2017.
           
Other Factors Affecting Earnings

Total net non-operating expenses for the fourth quarter of 2018 were US$80.0 million, which mainly included interest expenses of US$74.0 million.

Depreciation and amortization costs of US$149.7 million were recorded in the fourth quarter of 2018 of which US$13.9 million was related to the amortization expense for our gaming subconcession and US$5.5 million was related to the amortization expense for the land use rights.

The Adjusted EBITDA for Studio City for the three months ended December 31, 2018 and year ended December 31, 2018 referred to in this report is US$17 million and US$61 million more, respectively, than the Adjusted EBITDA of Studio City contained in the earnings release for Studio City International Holdings Limited dated February 19, 2019 (the “Studio City earnings release”). The Adjusted EBITDA of Studio City contained in the Studio City earnings release includes certain intercompany charges that are not included in the Adjusted EBITDA for Studio City contained in this report. Such intercompany charges include, among other items, fees and shared service charges billed between Studio City International Holdings Limited and its subsidiaries and certain subsidiaries of Melco. Additionally, Adjusted EBITDA of Studio City included in this report does not reflect certain costs related to the VIP operations at Studio City Casino.

Financial Position and Capital Expenditures

Total cash and bank balances as of December 31, 2018 aggregated US$1.5 billion, including US$48.2 million of restricted cash, primarily related to Studio City. Total debt, net of unamortized deferred financing costs at the end of the fourth quarter of 2018, was US$4.1 billion.

Capital expenditures for the fourth quarter of 2018 were US$99.5 million, which predominantly related to various projects at City of Dreams and Studio City.

Full Year Results

For the year ended December 31, 2018, Melco Resorts & Entertainment Limited reported net revenue of US$5.2 billion versus US$5.3 billion in the prior year. The decrease in net revenue was primarily attributable to higher commissions reported as a reduction in revenue upon the Company’s adoption of the New Revenue Standard, partially offset by higher gross gaming revenues in all gaming segments. The Company adopted the New Revenue Standard on January 1, 2018 under the modified retrospective method. Results for the periods beginning on or after January 1, 2018 are presented under the New Revenue Standard, while prior year amounts are not adjusted and continue to be reported in accordance with the previous basis. Under the previous basis, before the adoption of the New Revenue Standard, net revenue for 2018 would have been US$5.6 billion, which would have represented an increase of approximately 5% from the US$5.3 billion for 2017.  

Operating income for 2018 was US$626.8 million, compared with operating income of US$607.6 million for 2017, representing an increase of 3%.

Adjusted property EBITDA for the year ended December 31, 2018 was US$1,477.9 million, as compared to Adjusted property EBITDA of US$1,422.8 million in 2017. The year-on-year improvement in Adjusted property EBITDA was mainly attributable to better group-wide performance in all gaming segments.

Net income attributable to Melco Resorts & Entertainment Limited for 2018 was US$351.5 million, or US$0.73 per ADS, compared with US$347.0 million, or US$0.71 per ADS, for 2017. The net income attributable to noncontrolling interests for 2018 was US$2.3 million and the net loss attributable to noncontrolling interests for 2017 was US$31.7 million, both of which were related to Studio City and City of Dreams Manila.

Amendment of Dividend Policy

To reaffirm Melco’s commitment to returning surplus capital to shareholders, our Board, after evaluating Melco’s current liquidity position and future expected capital needs, has amended its quarterly dividend policy from one targeting a quarterly cash dividend payment of US$0.04835 per ordinary share (equivalent to US$0.14505 per ADS, each representing three ordinary shares) of the Company to one targeting a quarterly cash dividend payment of US$0.0517 per ordinary share (equivalent to US$0.1551 per ADS) of the Company.

The new dividend policy will take effect beginning with any dividends declared by our Board for the fourth quarter of 2018 and continue until amended or otherwise determined by our Board. Distribution of dividends under this new dividend policy is subject to the Company’s accumulated and future earnings, cash availability and future commitments.

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

Dividend Declaration

On February 19, 2019, our Board considered and approved the declaration and payment of a quarterly dividend of US$0.0517 per ordinary share (equivalent to US$0.1551 per ADS) for the fourth quarter of 2018 (the “Quarterly Dividend”). The Quarterly Dividend will be paid on or about March 14, 2019 to our shareholders whose names appear on the register of members of the Company at the close of business on March 4, 2019, being the record date for determination of entitlements to the Quarterly Dividend.

Conference Call Information

Melco Resorts & Entertainment Limited will hold a conference call to discuss its fourth quarter 2018 financial results on Tuesday, February 19, 2019 at 8:30 a.m. Eastern Time (9:30 p.m. Hong Kong Time). To join the conference call, please use the dial-in details below:

US Toll Free  1 866 519 4004
US Toll / International 1 845 675 0437
HK Toll 852 3018 6771
HK Toll Free 800 906 601
Japan Toll  81 3 4503 6012
Japan Toll Free 012 092 5376
UK Toll Free 080 8234 6646
Australia Toll 61 290 833 212
Australia Toll Free 1 800 411 623
Philippines Toll Free  1 800 1612 0306
   
Passcode MLCO

An audio webcast will also be available at http://www.melco-resorts.com.

To access the replay, please use the dial-in details below:

US Toll Free  1 855 452 5696 
US Toll / International 1 646 254 3697
HK Toll Free  800 963 117
Japan Toll 81 3 4580 6717
Japan Toll Free 012 095 9034
Philippines Toll Free  1 800 1612 0166
   
Conference ID 3567003

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Melco Resorts & Entertainment Limited (the “Company”) may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. These factors include, but are not limited to, (i) growth of the gaming market and visitations in Macau and the Philippines, (ii) capital and credit market volatility, (iii) local and global economic conditions, (iv) our anticipated growth strategies, (v) gaming authority and other governmental approvals and regulations, and (vi) our future business development, results of operations and financial condition. In some cases, forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “anticipate”, “target”, “aim”, “estimate”, “intend”, “plan”, “believe”, “potential”, “continue”, “is/are likely to” or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company undertakes no duty to update such information, except as required under applicable law.

Non-GAAP Financial Measures

(1) “Adjusted EBITDA” is earnings before interest, taxes, depreciation, amortization, pre-opening costs, development costs, property charges and other, share-based compensation, payments to the Philippine parties under the cooperative arrangement (the “Philippine Parties”), land rent to Belle Corporation and other non-operating income and expenses. “Adjusted property EBITDA” is earnings before interest, taxes, depreciation, amortization, pre-opening costs, development costs, property charges and other, share-based compensation, payments to the Philippine Parties, land rent to Belle Corporation, Corporate and Other expenses and other non-operating income and expenses. Adjusted EBITDA and adjusted property EBITDA are presented exclusively as supplemental disclosures because management believes they are widely used to measure the performance, and as a basis for valuation, of gaming companies. Management uses adjusted EBITDA and adjusted property EBITDA as measures of the operating performance of its segments and to compare the operating performance of its properties with those of its competitors. The Company also presents adjusted EBITDA and adjusted property EBITDA because they are used by some investors as ways to measure a company’s ability to incur and service debt, make capital expenditures, and meet working capital requirements. Gaming companies have historically reported adjusted EBITDA and adjusted property EBITDA as supplements to financial measures in accordance with U.S. GAAP. However, adjusted EBITDA and adjusted property EBITDA should not be considered as alternatives to operating income as indicators of the Company’s performance, as alternatives to cash flows from operating activities as measures of liquidity, or as alternatives to any other measure determined in accordance with U.S. GAAP. Unlike net income, adjusted EBITDA and adjusted property EBITDA do not include depreciation and amortization or interest expense and, therefore, do not reflect current or future capital expenditures or the cost of capital. The Company compensates for these limitations by using adjusted EBITDA and adjusted property EBITDA as only two of several comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance.

Such U.S. GAAP measurements include operating income, net income, cash flows from operations and cash flow data. The Company has significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other recurring and nonrecurring charges, which are not reflected in adjusted EBITDA or adjusted property EBITDA. Also, the Company’s calculation of adjusted EBITDA and adjusted property EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited. Reconciliations of adjusted EBITDA and adjusted property EBITDA with the most comparable financial measures calculated and presented in accordance with U.S. GAAP are provided herein immediately following the financial statements included in this press release.

(2) “Adjusted net income” is net income before pre-opening costs, development costs, property charges and other, loss on extinguishment of debt and costs associated with debt modification, net of noncontrolling interests and taxes calculated using specific tax treatments applicable to the adjustments based on their respective jurisdictions. Adjusted net income attributable to Melco Resorts & Entertainment Limited and adjusted net income attributable to Melco Resorts & Entertainment Limited per share (“EPS”) are presented as supplemental disclosures because management believes they are widely used to measure the performance, and as a basis for valuation, of gaming companies. These measures are used by management and/or evaluated by some investors, in addition to income and EPS computed in accordance with U.S. GAAP, as an additional basis for assessing period-to-period results of our business. Adjusted net income attributable to Melco Resorts & Entertainment Limited and adjusted net income attributable to Melco Resorts & Entertainment Limited per share may be different from the calculation methods used by other companies and, therefore, comparability may be limited. Reconciliations of adjusted net income attributable to Melco Resorts & Entertainment Limited with the most comparable financial measures calculated and presented in accordance with U.S. GAAP are provided herein immediately following the financial statements included in this press release.

About Melco Resorts & Entertainment Limited

The Company, with its American depositary shares listed on the NASDAQ Global Select Market (NASDAQ: MLCO), is a developer, owner and operator of casino gaming and entertainment casino resort facilities in Asia. The Company currently operates Altira Macau (www.altiramacau.com), a casino hotel located at Taipa, Macau and City of Dreams (www.cityofdreamsmacau.com), an integrated urban casino resort located in Cotai, Macau. Its business also includes the Mocha Clubs (www.mochaclubs.com), which comprise the largest non-casino based operations of electronic gaming machines in Macau. The Company also majority owns and operates Studio City (www.studiocity-macau.com), a cinematically-themed integrated entertainment, retail and gaming resort in Cotai, Macau. In the Philippines, a Philippine subsidiary of the Company currently operates and manages City of Dreams Manila (www.cityofdreams.com.ph), a casino, hotel, retail and entertainment integrated resort in the Entertainment City complex in Manila. For more information about the Company, please visit www.melco-resorts.com.

The Company is strongly supported by its single largest shareholder, Melco International Development Limited, a company listed on the Main Board of The Stock Exchange of Hong Kong Limited and is substantially owned and led by Mr. Lawrence Ho, who is the Chairman, Executive Director and Chief Executive Officer of the Company.

For investment community, please contact:
Richard Huang
Director, Investor Relations
Tel: +852 2598 3619
Email: richardlshuang@melco-resorts.com

For media enquiries, please contact:

Chimmy Leung
Executive Director, Corporate Communications
Tel: +852 3151 3765
Email: chimmyleung@melco-resorts.com 

                           
Melco Resorts & Entertainment Limited and Subsidiaries    
Condensed Consolidated Statements of Operations    
(In thousands of U.S. dollars, except share and per share data)    
                           
  Three Months Ended   Year Ended    
  December 31,   December 31,    
  2018   2017   2018    2017     
   (Unaudited)    (Unaudited)    (Unaudited)    (Audited)    
                           
OPERATING REVENUES                          
Casino  $    1,210,565      $    1,249,513      $    4,463,704      $    4,937,597      
Rooms     89,513         71,164         311,028         271,500      
Food and beverage     56,059         51,273         204,171         184,979      
Entertainment, retail and other     40,317         43,924         179,606         203,763      
Gross revenues     1,396,454         1,415,874         5,158,509         5,597,839      
Less: promotional allowances     -          (83,318 )       -          (313,016 )    
Net revenues     1,396,454         1,332,556         5,158,509         5,284,823      
                           
OPERATING COSTS AND EXPENSES                          
Casino     (795,606 )       (865,064 )       (2,984,711 )       (3,374,013 )    
Rooms     (22,590 )       (8,389 )       (78,377 )       (32,641 )    
Food and beverage     (44,955 )       (16,056 )       (161,126 )       (57,927 )    
Entertainment, retail and other     (21,600 )       (21,612 )       (92,436 )       (88,268 )    
General and administrative     (119,248 )       (122,616 )       (500,624 )       (467,121 )    
Payments to the Philippine Parties     (15,030 )       (9,112 )       (60,778 )       (51,661 )    
Pre-opening costs     (4,282 )       (1,097 )       (37,369 )       (2,274 )    
Development costs     (11,301 )       (12,976 )       (23,029 )       (31,115 )    
Amortization of gaming subconcession     (13,881 )       (14,309 )       (56,809 )       (57,237 )    
Amortization of land use rights     (5,534 )       (5,705 )       (22,646 )       (22,817 )    
Depreciation and amortization     (130,261 )       (113,451 )       (484,621 )       (460,521 )    
Property charges and other     (8,190 )       (13,215 )       (29,147 )       (31,616 )    
Total operating costs and expenses     (1,192,478 )       (1,203,602 )       (4,531,673 )       (4,677,211 )    
OPERATING INCOME     203,976         128,954         626,836         607,612      
NON-OPERATING INCOME (EXPENSES)                          
Interest income     1,422         1,082         5,471         3,579      
Interest expenses, net of capitalized interest     (73,992 )       (60,691 )       (264,880 )       (255,764 )    
Other finance costs     (564 )       (1,575 )       (4,630 )       (6,079 )    
Foreign exchange (losses) gains, net     (4,253 )       592         (9,612 )       12,783      
Other income, net     670         3,024         3,682         5,282      
Loss on extinguishment of debt     (3,248 )       (939 )       (3,461 )       (49,337 )    
Costs associated with debt modification     -          -          -          (2,793 )    
Total non-operating expenses, net     (79,965 )       (58,507 )       (273,430 )       (292,329 )    
INCOME BEFORE INCOME TAX     124,011         70,447         353,406         315,283      
INCOME TAX CREDIT      6,160         945         445         10      
NET INCOME     130,171         71,392         353,851         315,293      
NET (INCOME) LOSS ATTRIBUTABLE TO                           
  NONCONTROLLING INTERESTS     (2,164 )       9,780         (2,336 )       31,709      
NET INCOME ATTRIBUTABLE TO                           
  MELCO RESORTS & ENTERTAINMENT LIMITED  $    128,007      $    81,172      $    351,515      $    347,002      
                           
NET INCOME ATTRIBUTABLE TO                           
  MELCO RESORTS & ENTERTAINMENT LIMITED PER SHARE:                          
   Basic  $   0.091     $   0.055     $   0.242     $   0.236      
   Diluted $   0.091     $   0.055     $   0.240     $   0.235      
                           
NET INCOME ATTRIBUTABLE TO                           
  MELCO RESORTS & ENTERTAINMENT LIMITED PER ADS:                          
   Basic  $   0.274     $   0.166     $   0.727     $   0.709      
   Diluted $   0.273     $   0.164     $   0.721     $   0.704      
                           
WEIGHTED AVERAGE SHARES OUTSTANDING                           
  USED IN NET INCOME ATTRIBUTABLE TO                           
  MELCO RESORTS & ENTERTAINMENT LIMITED                          
  PER SHARE CALCULATION:                          
   Basic      1,399,181,661         1,469,344,163         1,451,051,051         1,467,653,209      
   Diluted     1,404,204,538         1,482,030,219         1,460,909,324         1,479,342,209      
                           
Note: The Company adopted the New Revenue Standard on January 1, 2018 under the modified retrospective method. Results for the periods beginning on or after January 1, 2018 are presented under the New Revenue Standard, while prior year amounts are not adjusted and continue to be reported in accordance with the previous basis.   


               
Melco Resorts & Entertainment Limited and Subsidiaries    
Condensed Consolidated Balance Sheets    
(In thousands of U.S. dollars)    
               
               
  December 31,   December 31,    
  2018    2017     
   (Unaudited)    (Audited)    
               
ASSETS              
               
CURRENT ASSETS              
Cash and cash equivalents  $    1,436,558      $    1,408,211      
Investment securities     91,598         89,874      
Bank deposits with original maturities over three months     -          9,884      
Restricted cash     48,037         45,412      
Accounts receivable, net     242,089         176,544      
Amounts due from affiliated companies     7,603         2,377      
Inventories     40,828         34,988      
Prepaid expenses and other current assets     90,749         77,503      
Total current assets     1,957,462         1,844,793      
               
PROPERTY AND EQUIPMENT, NET     5,661,653         5,730,760      
GAMING SUBCONCESSION, NET     197,533         256,083      
INTANGIBLE ASSETS     30,072         4,220      
GOODWILL     81,376         81,915      
LONG-TERM PREPAYMENTS, DEPOSITS AND OTHER ASSETS     186,515         189,645      
RESTRICTED CASH     129         130      
DEFERRED TAX ASSETS     2,992         11      
LAND USE RIGHTS, NET     759,651         787,499      
TOTAL ASSETS  $    8,877,383      $    8,895,056      
               
LIABILITIES AND SHAREHOLDERS' EQUITY              
               
CURRENT LIABILITIES              
Accounts payable  $    24,879      $    16,041      
Accrued expenses and other current liabilities     1,658,550         1,563,585      
Income tax payable     4,903         3,179      
Capital lease obligations, due within one year      34,659         33,387      
Current portion of long-term debt, net     395,547         51,032      
Amounts due to affiliated companies     11,469         16,790      
Total current liabilities     2,130,007         1,684,014      
               
LONG-TERM DEBT, NET     3,665,370         3,506,530      
OTHER LONG-TERM LIABILITIES     28,866         48,087      
DEFERRED TAX LIABILITIES     54,063         53,994      
CAPITAL LEASE OBLIGATIONS, DUE AFTER ONE YEAR     253,374         265,896      
AMOUNTS DUE TO AFFILIATED COMPANIES     -          919      
               
SHAREHOLDERS' EQUITY              
Ordinary shares     14,830         14,784      
Treasury shares     (657,389 )       (90 )    
Additional paid-in capital     3,523,275         3,671,805      
Accumulated other comprehensive losses      (49,804 )       (26,610 )    
Accumulated losses     (703,576 )       (772,338 )    
Total Melco Resorts & Entertainment Limited shareholders’ equity     2,127,336         2,887,551      
Noncontrolling interests     618,367         448,065      
Total equity     2,745,703         3,335,616      
TOTAL LIABILITIES AND EQUITY  $    8,877,383     $   8,895,056      
               


Melco Resorts & Entertainment Limited and Subsidiaries  
Reconciliation of Net Income Attributable to Melco Resorts & Entertainment Limited to   
Adjusted Net Income Attributable to Melco Resorts & Entertainment Limited  
(In thousands of U.S. dollars, except share and per share data)  
                         
  Three Months Ended   Year Ended  
  December 31,   December 31,  
  2018    2017    2018    2017   
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
                         
Net Income Attributable to                         
  Melco Resorts & Entertainment Limited $   128,007     $   81,172     $   351,515     $   347,002    
Pre-opening Costs     4,282         1,097         37,369         2,274    
  Development Costs     11,301         12,976         23,029         31,115    
Property Charges and Other     8,190         13,215         29,147         31,616    
  Loss on Extinguishment of Debt     3,248         939         3,461         49,337    
  Costs Associated with Debt Modification     -          -          -          2,793    
  Income Tax Impact on Adjustments     (3,944 )       (98 )       (4,123 )       (360 )  
Noncontrolling Interests Impact on Adjustments     (3,871 )       (7,932 )       (5,741 )       (10,606 )  
Adjusted Net Income Attributable to                         
  Melco Resorts & Entertainment Limited $   147,213     $   101,369     $   434,657     $   453,171    
                         
ADJUSTED NET INCOME ATTRIBUTABLE TO                        
  MELCO RESORTS & ENTERTAINMENT LIMITED PER SHARE:                    
   Basic  $   0.105     $   0.069     $   0.300     $   0.309    
   Diluted $   0.105     $   0.068     $   0.297     $   0.306    
                         
ADJUSTED NET INCOME ATTRIBUTABLE TO                        
  MELCO RESORTS & ENTERTAINMENT LIMITED PER ADS:                        
   Basic  $   0.316     $   0.207     $   0.899     $   0.926    
   Diluted $   0.314     $   0.205     $   0.892     $   0.919    
                         
WEIGHTED AVERAGE SHARES OUTSTANDING                         
  USED IN ADJUSTED NET INCOME ATTRIBUTABLE TO                         
  MELCO RESORTS & ENTERTAINMENT LIMITED                        
  PER SHARE CALCULATION:                        
   Basic      1,399,181,661         1,469,344,163         1,451,051,051         1,467,653,209    
   Diluted     1,404,204,538         1,482,030,219         1,460,909,324         1,479,342,209    
                         


Melco Resorts & Entertainment Limited and Subsidiaries  
Reconciliation of Operating Income (Loss) to Adjusted EBITDA and Adjusted Property EBITDA  
(In thousands of U.S. dollars)  
                                           
                                           
  Three Months Ended December 31, 2018  
  Altira
Macau
  Mocha   City of
Dreams
  Studio
City
  City of
Dreams
Manila
  Corporate
and Other
  Total  
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
                                           
Operating Income (Loss)  $   14,591     $   2,050     $   165,786     $   56,174   $   25,825   $   (60,450 )   $   203,976  
                                           
  Payments to the Philippine Parties     -          -          -          -        15,030       -          15,030  
  Land Rent to Belle Corporation     -          -          -          -        747       -          747  
  Pre-opening Costs     37         -          (33 )       4,140       138       -          4,282  
  Development Costs     -          -          -          -        -        11,301         11,301  
  Depreciation and Amortization     5,185         2,181         63,175         41,569       18,680       18,886         149,676  
  Share-based Compensation     110         47         873         423       270       5,202         6,925  
  Property Charges and Other     238         454         (57 )       377       7,181       (3 )       8,190  
Adjusted EBITDA     20,161         4,732         229,744         102,683       67,871       (25,064 )       400,127  
  Corporate and Other Expenses     -          -          -          -        -        25,064         25,064  
Adjusted Property EBITDA $   20,161      $    4,732      $    229,744      $    102,683    $    67,871    $    -       $    425,191  
                                           
                                           
  Three Months Ended December 31, 2017  
  Altira
Macau
  Mocha   City of
Dreams
  Studio
City
  City of
Dreams
Manila
  Corporate
and Other
  Total  
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
                                           
Operating Income (Loss) $   13,039     $   5,114     $   132,793     $   28,915   $   19,972   $   (70,879 )   $ 128,954  
                                           
  Payments to the Philippine Parties     -          -          -          -        9,112       -          9,112  
  Land Rent to Belle Corporation     -          -          -          -        782       -          782  
  Pre-opening Costs     -          -          966         131       -        -        1,097  
  Development Costs     -          -          -          -        -        12,976         12,976  
  Depreciation and Amortization     4,975         2,090         40,782         46,081       21,042       18,495       133,465  
  Share-based Compensation     54         (73 )       828         367       247       3,787       5,210  
  Property Charges and Other     (611 )       305         (5,692 )       15,981       2,638       594         13,215  
Adjusted EBITDA     17,457         7,436         169,677         91,475       53,793       (35,027 )       304,811  
  Corporate and Other Expenses     -          -          -          -        -        35,027         35,027  
Adjusted Property EBITDA $   17,457      $    7,436      $    169,677      $    91,475    $    53,793    $    -       $    339,838  
                                           


Melco Resorts & Entertainment Limited and Subsidiaries  
Reconciliation of Operating Income (Loss) to Adjusted EBITDA and Adjusted Property EBITDA  
(In thousands of U.S. dollars)  
                                           
                                           
  Year Ended December 31, 2018  
  Altira
Macau
  Mocha   City of
Dreams
  Studio
City
  City of
Dreams
Manila
  Corporate
and Other
  Total  
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
                                           
Operating Income (Loss)  $   34,789     $   12,897   $   500,203   $   188,684   $   122,909     $   (232,646 )   $   626,836  
                                           
  Payments to the Philippine Parties     -          -        -        -        60,778         -          60,778  
  Land Rent to Belle Corporation     -          -        -        -        3,001         -          3,001  
  Pre-opening Costs     37         -        32,624       4,550       158         -          37,369  
  Development Costs     -          -        -        -        -          23,029         23,029  
  Depreciation and Amortization     19,655         8,413       209,622       176,006       75,274         75,106         564,076  
  Share-based Compensation     388         158       3,472       1,577       (129 )       19,677         25,143  
  Property Charges and Other     678         22       10,460       4,471       7,209         6,307         29,147  
Adjusted EBITDA     55,547         21,490       756,381       375,288       269,200         (108,527 )       1,369,379  
  Corporate and Other Expenses     -          -        -        -        -          108,527         108,527  
Adjusted Property EBITDA $   55,547      $    21,490    $    756,381    $    375,288    $    269,200      $    -       $    1,477,906  
                                           
                                           
  Year Ended December 31, 2017  
  Altira
Macau
  Mocha   City of
Dreams
  Studio
City
  City of
Dreams
Manila
  Corporate
and Other
  Total  
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
                                           
Operating Income (Loss)  $   (149 )   $   18,206   $   625,766   $   126,247   $   92,636     $   (255,094 )   $   607,612  
                                           
  Payments to the Philippine Parties     -          -        -        -        51,661         -          51,661  
  Land Rent to Belle Corporation     -          -        -        -        3,143         -          3,143  
  Pre-opening Costs     -          -        1,933       116       225         -          2,274  
  Development Costs     -          -        -        -        -          31,115         31,115  
  Depreciation and Amortization     20,973         8,312       171,216       184,456       84,200         71,418         540,575  
  Share-based Compensation     204         24       2,934       1,294       516         12,333         17,305  
  Property Charges and Other     (357 )       97       3,023       23,455       2,638         2,760         31,616  
Adjusted EBITDA     20,671         26,639       804,872       335,568       235,019         (137,468 )       1,285,301  
  Corporate and Other Expenses     -          -        -        -        -          137,468         137,468  
Adjusted Property EBITDA $   20,671      $    26,639    $    804,872    $    335,568    $    235,019      $    -       $    1,422,769  
                                           


Melco Resorts & Entertainment Limited and Subsidiaries  
Reconciliation of Net Income Attributable to Melco Resorts & Entertainment Limited to  
Adjusted EBITDA and Adjusted Property EBITDA  
(In thousands of U.S. dollars)  
                         
  Three Months Ended   Year Ended  
  December 31,   December 31,  
  2018    2017    2018    2017   
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
                         
Net Income Attributable to Melco Resorts & Entertainment Limited $   128,007     $ 81,172     $   351,515     $   347,002    
Net Income (Loss) Attributable to Noncontrolling Interests     2,164         (9,780 )       2,336         (31,709 )  
Net Income     130,171         71,392         353,851         315,293    
Income Tax Credit      (6,160 )       (945 )       (445 )       (10 )  
Interest and Other Non-Operating Expenses, Net     79,965         58,507         273,430         292,329    
Property Charges and Other     8,190         13,215         29,147         31,616    
Share-based Compensation     6,925         5,210         25,143         17,305    
Depreciation and Amortization     149,676         133,465         564,076         540,575    
Development Costs     11,301         12,976         23,029         31,115    
Pre-opening Costs     4,282         1,097         37,369         2,274    
Land Rent to Belle Corporation     747         782         3,001         3,143    
Payments to the Philippine Parties     15,030         9,112         60,778         51,661    
Adjusted EBITDA     400,127         304,811         1,369,379         1,285,301    
Corporate and Other Expenses   25,064       35,027         108,527         137,468    
Adjusted Property EBITDA $   425,191     $   339,838     $   1,477,906     $   1,422,769    
                         


                           
 Melco Resorts & Entertainment Limited and Subsidiaries
 
 Supplemental Data Schedule  
                           
            Three Months Ended   Year Ended  
            December 31,    December 31,   
              2018       2017       2018       2017    
Room Statistics:                      
  Altira Macau                      
    Average daily rate (3)     $   188     $   209     $   189     $   204    
    Occupancy per available room       100 %     99 %     99 %     96 %  
    Revenue per available room (4)     $   188     $   207     $   188     $   196    
                           
  City of Dreams                      
    Average daily rate (3)     $   222     $   209     $   212     $   202    
    Occupancy per available room       97 %     97 %     97 %     97 %  
    Revenue per available room (4)     $   216     $   202     $   206     $   196    
                           
  Studio City                      
    Average daily rate (3)     $   138     $   145     $   138     $   140    
    Occupancy per available room       100 %     99 %     100 %     99 %  
    Revenue per available room (4)     $   138     $   144     $   138     $   138    
                           
  City of Dreams Manila                    
    Average daily rate (3)     $   162     $   163     $   159     $   158    
    Occupancy per available room       98 %     97 %     98 %     96 %  
    Revenue per available room (4)     $   159     $   158     $   156     $   152    
                           
Other Information:                      
  Altira Macau                      
    Average number of table games       103         103         104         107    
    Average number of gaming machines       136         120         129         73    
    Table games win per unit per day (5)   $   23,849     $   19,358     $   20,546     $   15,478    
    Gaming machines win per unit per day (6)   $   102     $   112     $   137     $   106    
                           
  City of Dreams                      
    Average number of table games       477         479         476         479    
    Average number of gaming machines       774         712         724         746    
    Table games win per unit per day (5)   $   18,187     $   15,013     $   16,257     $   16,408    
    Gaming machines win per unit per day (6)   $   547     $   726     $   737     $   557    
                           
  Studio City                      
    Average number of table games       293         293         292         288    
    Average number of gaming machines       987         883         957         951    
    Table games win per unit per day (5)   $   13,233     $   14,123     $   14,076     $   12,932    
    Gaming machines win per unit per day (6)   $   254     $   272     $   240     $   225    
                           
  City of Dreams Manila                    
    Average number of table games       301         291         300         283    
    Average number of gaming machines       2,057         1,800         1,929         1,786    
    Table games win per unit per day (5)   $   5,408     $   5,473     $   5,536     $   5,432    
    Gaming machines win per unit per day (6)   $   261     $   265     $   278     $   271    
                           
    (3) Average daily rate is calculated by dividing total room revenues including the retail value of complimentary rooms (less service charges, if any) by total occupied rooms including complimentary rooms   
    (4) Revenue per available room is calculated by dividing total room revenues including the retail value of complimentary rooms (less service charges, if any) by total rooms available  
    (5) Table games win per unit per day is shown before discounts, commissions, non-discretionary incentives (including our point-loyalty programs) and allocating casino revenues related to goods and services provided to gaming patrons on a complimentary basis  
    (6) Gaming machines win per unit per day is shown before non-discretionary incentives (including our point-loyalty programs) and allocating casino revenues related to goods and services provided to gaming patrons on a complimentary basis  

01_Melco_Horizontal_S_RGB.jpg

Melco Resorts & Entertainment Limited