Form 6-K
Table of Contents

 

 

FORM 6-K

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a–16 OR 15d–16

OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2021

Commission File Number: 001-33178

 

 

MELCO RESORTS & ENTERTAINMENT LIMITED

 

 

36th Floor, The Centrium

60 Wyndham Street

Central

Hong Kong

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20–F or Form 40–F. Form 20-F  ☒ Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


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MELCO RESORTS & ENTERTAINMENT LIMITED

Form 6–K

TABLE OF CONTENTS

 

Signature

     3  

Exhibit 99.1

  


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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

MELCO RESORTS & ENTERTAINMENT

LIMITED

By:   /s/ Geoffrey Davis
Name:   Geoffrey Davis, CFA
Title:   Chief Financial Officer

Date: May 28, 2021

 

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EXHIBIT INDEX

 

Exhibit No.

  

Description

Exhibit 99.1    Quarterly Report of Melco Resorts Finance Limited
QUARTERLY REPORT OF MELCO RESORTS FINANCE LIMITED
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Exhibit 99.1

Explanatory Note

Melco Resorts Finance Limited’s Quarterly Report

for the Three Months Ended March 31, 2021

This quarterly report provides Melco Resorts Finance Limited’s unaudited condensed consolidated financial statements, comprising condensed consolidated balance sheets, condensed consolidated statements of operations and condensed consolidated statements of cash flows, for the three months ended March 31, 2021, together with the related information.

 

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Melco Resorts Finance Limited

Report for the First Quarter of 2021

TABLE OF CONTENTS

 

INTRODUCTION

     3  

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     5  

GLOSSARY

     6  

EXCHANGE RATE INFORMATION

     8  

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     9  

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     F-1  

 

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INTRODUCTION

In this quarterly report, unless otherwise indicated:

 

   

“2015 Credit Facilities” refer to the HK$13.65 billion (equivalent to US$1.75 billion) senior secured credit facilities agreement dated June 19, 2015, entered into by Melco Resorts Macau, as borrower (originally comprising (i) a Hong Kong dollar term loan facility of HK$3.90 billion (equivalent to US$500 million) with a term of six years and (ii) a HK$9.75 billion (equivalent to approximately US$1.25 billion) revolving credit facility, and in respect of which, following the repayment on May 7, 2020 of all outstanding loan amounts (together with accrued interest and associated costs) other than the HK$1.0 million (equivalent to approximately US$129,000) which remained outstanding under the term loan facility and the HK$1.0 million (equivalent to approximately US$129,000) revolving credit facility commitment which remained available under the revolving credit facility, all other commitments were canceled), the maturity date of which was extended to June 2022 pursuant to a waiver letter executed on April 29, 2020;

 

   

“2020 Credit Facilities” refer to the senior facilities agreement dated April 29, 2020, entered into between, among others, our subsidiary MCO Nominee One Limited (“MCO Nominee One”), as borrower, and Bank of China Limited, Macau Branch, Bank of Communications Co., Ltd. Macau Branch and Morgan Stanley Senior Funding, Inc., as joint global coordinators, under which lenders have made available HK$14.85 billion (equivalent to US$1.91 billion) in a revolving credit facility for a term of five years;

 

   

“2025 Senior Notes” refer to the US$1.0 billion aggregate principal amount of 4.875% senior notes due 2025 we issued, of which US$650.0 million in aggregate principal amount was issued on June 6, 2017 (the “First 2025 Senior Notes”) and US$350.0 million in aggregate principal amount was issued on July 3, 2017 (the “Additional 2025 Senior Notes”);

 

   

“2026 Senior Notes” refer to the US$500.0 million aggregate principal amount of 5.250% senior notes due 2026 we issued on April 26, 2019;

 

   

“2027 Senior Notes” refer to the US$600.0 million aggregate principal amount of 5.625% senior notes due 2027 we issued on July 17, 2019;

 

   

“2028 Senior Notes” refer to the US$850.0 million aggregate principal amount of 5.750% senior notes due 2028 we issued, of which US$500.0 million in aggregate principal amount was issued on July 21, 2020 (the “First 2028 Senior Notes”) and US$350.0 million in aggregate principal amount was issued on August 11, 2020 (the “Additional 2028 Senior Notes”);

 

   

“2029 Senior Notes” refer to the US$1.15 billion aggregate principal amount of 5.375% senior notes due 2029 we issued, of which US$900.0 million in aggregate principal amount was issued on December 4, 2019 (the “First 2029 Senior Notes”) and US$250.0 million in aggregate principal amount was issued on January 21, 2021 (the “Additional 2029 Senior Notes”);

 

   

“Altira Macau” refers to an integrated resort located in Taipa, Macau, that caters to Asian VIP rolling chip customers;

 

   

“China” and “PRC” refer to the People’s Republic of China, excluding the Hong Kong Special Administrative Region of the PRC (Hong Kong), the Macau Special Administrative Region of the PRC (Macau) and Taiwan from a geographical point of view;

 

   

“City of Dreams” refers to an integrated resort located in Cotai, Macau, which currently features casino areas and four luxury hotels, including a collection of retail brands, a wet stage performance theater (temporarily closed since June 2020) and other entertainment venues;

 

   

“DICJ” refers to the Direcção de Inspecção e Coordenação de Jogos (the Gaming Inspection and Coordination Bureau), a department of the Public Administration of Macau;

 

   

“HK$” and “H.K. dollar(s)” refer to the legal currency of Hong Kong;

 

   

“Melco Resorts Macau” refers to our subsidiary, Melco Resorts (Macau) Limited, a Macau company and the holder of our gaming subconcession;

 

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“Mocha Clubs” refer to, collectively, our clubs with gaming machines, which are now the largest non-casino based operations of electronic gaming machines in Macau;

 

   

“our subconcession” and “our gaming subconcession” refer to the Macau gaming subconcession held by Melco Resorts Macau;

 

   

“Parent” and “Melco” refer to Melco Resorts & Entertainment Limited, a Cayman Islands exempted company with limited liability;

 

   

“Pataca(s)” or “MOP” refer to the legal currency of Macau;

 

   

“Services and Right to Use Arrangements” refers to the agreement entered into among, inter alia, Melco Resorts Macau and Studio City Entertainment, dated May 11, 2007 and amended on June 15, 2012, and any other agreements or arrangements entered into from time to time, which may amend, supplement or relate to the aforementioned agreements or arrangements;

 

   

“Studio City” refers to a cinematically-themed integrated resort in Cotai, an area of reclaimed land located between the islands of Taipa and Coloane in Macau;

 

   

“Studio City Casino” refers to the gaming areas being operated within Studio City;

 

   

“Studio City Entertainment” refers to our affiliate, Studio City Entertainment Limited, a Macau company which is a subsidiary of the Parent;

 

   

“US$” and “U.S. dollar(s)” refer to the legal currency of the United States;

 

   

“U.S. GAAP” refers to the U.S. generally accepted accounting principles; and

 

   

“we,” “us,” “our” and “our company” refer to Melco Resorts Finance Limited and, as the context requires, its predecessor entities and its consolidated subsidiaries.

This quarterly report includes our unaudited condensed consolidated financial statements for the three months ended March 31, 2021.

Any discrepancies in any table between totals and sums of amounts listed therein are due to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures preceding them.

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements that relate to future events, including our future operating results and conditions, our prospects and our future financial performance and condition, all of which are largely based on our current expectations and projections. Known and unknown risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. We operate in a heavily regulated and evolving industry, and have a highly leveraged business model. Moreover, we operate in Macau’s gaming sector, a market with intense competition, and therefore new risk factors may emerge from time to time. It is not possible for our management to predict all risk factors, nor can we assess the impact of these factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those expressed or implied in any forward-looking statement. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. These factors include, but are not limited to, (i) the global pandemic of COVID-19, caused by a novel strain of the coronavirus, and the continued impact of its consequences on our business, our industry and the global economy, (ii) growth of the gaming market and visitations in Macau, (iii) capital and credit market volatility, (iv) local and global economic conditions, (v) our anticipated growth strategies, (vi) gaming authority and other governmental approvals and regulations, and (vii) our future business development, results of operations and financial condition. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions.

The forward-looking statements made in this quarterly report relate only to events or information as of the date on which the statements are made in this quarterly report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this quarterly report with the understanding that our actual future results may be materially different from what we expect.

 

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GLOSSARY

 

“cage”    a secure room within a casino with a facility that allows patrons to carry out transactions required to participate in gaming activities, such as exchange of cash for chips and exchange of chips for cash or other chips
“chip”    round token that is used on casino gaming tables in lieu of cash
“concession”    a government grant for the operation of games of fortune and chance in casinos in Macau under an administrative contract pursuant to which a concessionaire, or the entity holding the concession, is authorized to operate games of fortune and chance in casinos in Macau
“drop”    the amount of cash to purchase gaming chips and promotional vouchers that is deposited in a gaming table’s drop box, plus gaming chips purchased at the casino cage
“drop box”    a box or container that serves as a repository for cash, chip purchase vouchers, credit markers and forms used to record movements in the chip inventory on each table game
“electronic gaming table”    table with an electronic or computerized wagering and payment system that allow players to place bets from multiple-player gaming seats
“gaming machine”   

slot machine and/or electronic gaming table

“gaming machine handle”    the total amount wagered in gaming machines
“gaming machine win rate”    gaming machine win (calculated 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) expressed as a percentage of gaming machine handle
“gaming promoter”    an individual or corporate entity who, for the purpose of promoting rolling chip and other gaming activities, arranges customer transportation and accommodation, provides credit in its sole discretion if authorized by a gaming operator and arranges food and beverage services and entertainment in exchange for commissions or other compensation from a gaming concessionaire or subconcessionaire
“integrated resort”    a resort which provides customers with a combination of hotel accommodations, casinos or gaming areas, retail and dining facilities, MICE space, entertainment venues and spas
“junket player”    a player sourced by gaming promoters to play in the VIP gaming rooms or areas
“marker”   

evidence of indebtedness by a player to the casino or gaming operator

“mass market patron”   

a customer who plays in the mass market segment

“mass market segment”    consists of both table games and gaming machines played by mass market players primarily for cash stakes
“mass market table games drop”    the amount of table games drop in the mass market table games segment
“mass market table games hold percentage”    mass market table games win (calculated 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) as a percentage of mass market table games drop
“mass market table games segment”    the mass market segment consisting of mass market patrons who play table games

 

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“MICE”    Meetings, Incentives, Conventions and Exhibitions, an acronym commonly used to refer to tourism involving large groups brought together for an event or specific purpose
“non-negotiable chip”    promotional casino chip that is not to be exchanged for cash
“premium direct player”    a rolling chip player who is a direct customer of the concessionaires or subconcessionaires and is attracted to the casino through marketing efforts of the gaming operator
“rolling chip” or “VIP rolling chip”    non-negotiable chip primarily used by rolling chip patrons to make wagers
“rolling chip patron”    a player who primarily plays on rolling chip or VIP rolling chip tables and typically plays for higher stakes than mass market gaming patrons
“rolling chip segment”    consists of table games played in private VIP gaming rooms or areas by rolling chip patrons who are either premium direct players or junket players
“rolling chip volume”    the amount of non-negotiable chips wagered and lost by the rolling chip market segment
“rolling chip win rate”    rolling chip table games win (calculated 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) as a percentage of rolling chip volume
“slot machine”    traditional slot or electronic gaming machine operated by a single player
“subconcession”    an agreement for the operation of games of fortune and chance in casinos between the entity holding the concession, or the concessionaire, and a subconcessionaire, pursuant to which the subconcessionaire is authorized to operate games of fortune and chance in casinos in Macau
“table games win”    the amount of wagers won net of wagers lost on gaming tables that is retained and recorded as casino revenues. Table games win is calculated 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
“VIP gaming room”    gaming rooms or areas that have restricted access to rolling chip patrons and typically offer more personalized service than the general mass market gaming areas

 

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EXCHANGE RATE INFORMATION

The majority of our current revenues are denominated in H.K. dollars, while our current expenses are denominated predominantly in Patacas and H.K. dollars, and in connection with a portion of our indebtedness and certain expenses, in U.S. dollars. The non-financial pages of this quarterly report include all translations from H.K. dollars to U.S. dollars and from U.S. dollars to H.K. dollars at a rate of HK$7.7760 to US$1.00, unless otherwise noted.

The H.K. dollar is freely convertible into other currencies (including the U.S. dollar). Since October 17, 1983, the H.K. dollar has been officially linked to the U.S. dollar at the rate of HK$7.80 to US$1.00. The market exchange rate has not deviated materially from the level of HK$7.80 to US$1.00 since the peg was first established. However, in May 2005, the Hong Kong Monetary Authority broadened the trading band from the original rate of HK$7.80 per U.S. dollar to a rate range of HK$7.75 to HK$7.85 per U.S. dollar. The Hong Kong government has stated its intention to maintain the link at that rate, and, acting through the Hong Kong Monetary Authority, has a number of means by which it may act to maintain exchange rate stability. However, no assurance can be given that the Hong Kong government will maintain the link at HK$7.75 to HK$7.85 per U.S. dollar or at all.

The noon buying rate on March 31, 2021 in New York City for cable transfers in H.K. dollars for U.S. dollars, provided in the H.10 weekly statistical release of the Federal Reserve Board of the United States as certified for customs purposes by the Federal Reserve Bank of New York, was HK$7.7746 to US$1.00. On May 21, 2021, the noon buying rate was HK$7.7640 to US$1.00. We make no representation that any H.K. dollar or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or H.K. dollars, as the case may be, at any particular rate or at all.

The Pataca is pegged to the H.K. dollar at a rate of HK$1.00 = MOP1.03. All translations from Pataca to U.S. dollar in the non-financial pages of this quarterly report were made at the exchange rate of MOP8.0093 = US$1.00. The Federal Reserve Bank of New York does not certify for customs purposes a noon buying rate for cable transfers in Pataca.

 

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in connection with our unaudited condensed consolidated financial statements included elsewhere in this quarterly report. Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2020. The historical results are not necessarily indicative of the results of operations to be expected in the future. Certain statements in this “Financial Condition and Results of Operations” are forward-looking statements.

Summary of Financial Results

For the first quarter of 2021, our total operating revenues were US$0.47 billion, a decrease of 34.9% from US$0.72 billion of total operating revenues for the first quarter of 2020. The decrease in the total operating revenues was primarily attributable to softer performance in the rolling chip segment at City of Dreams and Altira Macau, as well as decreased casino revenues generated from the operations of Studio City Casino by our subsidiary, Melco Resorts Macau, the gaming subconcessionaire. Such decreases resulted from a year-over-year decline in inbound tourism in the first quarter of 2021, compared to the first quarter of 2020, which was only partially impacted by the restrictions from the COVID-19 pandemic. Net income/loss from Studio City Casino gaming operations are reimbursed to/from Studio City Entertainment pursuant to the Services and Right to Use Arrangements. Such reimbursement is included in general and administrative expenses.

Net loss for the first quarter of 2021 was US$144.1 million, compared to net loss of US$168.4 million for the first quarter of 2020. The decrease in net loss was primarily attributable to lower net foreign exchange losses in the first quarter of 2021, partially offset by the softer performance at City of Dreams and Altira Macau mentioned above and higher interest expenses, net of amounts capitalized.

The following summarizes the results of our operations:

 

     Three Months Ended
March 31,
 
     2021      2020  
     (In thousands of US$)  

Total operating revenues

   $ 470,160      $ 722,154  

Total operating costs and expenses

   $ (552,362    $ (771,884

Operating loss

   $ (82,202    $ (49,730

Net loss

   $ (144,055    $ (168,420

Results of Operations

City of Dreams First Quarter Results

For the quarter ended March 31, 2021, the total operating revenues at City of Dreams were US$321.8 million, compared to US$497.8 million in the first quarter of 2020. The decrease in the total operating revenues was primarily a result of softer performance in the rolling chip segment.

Rolling chip volume was US$4.13 billion for the first quarter of 2021 versus US$8.65 billion in the first quarter of 2020. The rolling chip win rate was 2.36% in the first quarter of 2021 versus 4.11% in the first quarter of 2020. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop increased to US$0.73 billion in the first quarter of 2021, compared with US$0.57 billion in the first quarter of 2020. The mass market table games hold percentage was 31.7% in the first quarter of 2021, compared to 33.7% in the first quarter of 2020.

 

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Gaming machine handle for the first quarter of 2021 was US$510.2 million, compared with US$509.6 million in the first quarter of 2020. The gaming machine win rate was 3.3% in the first quarter of 2021 versus 3.9% in the first quarter of 2020.

Total non-gaming revenue at City of Dreams in the first quarter of 2021 was US$65.3 million, compared with US$76.1 million in the first quarter of 2020.

Altira Macau First Quarter Results

For the quarter ended March 31, 2021, the total operating revenues at Altira Macau were US$14.4 million, compared to US$52.9 million in the first quarter of 2020. The decrease in the total operating revenues was primarily a result of softer performance in the rolling chip and mass market table games segments.

Rolling chip volume was US$1.10 billion in the first quarter of 2021 versus US$1.38 billion in the first quarter of 2020. The rolling chip win rate was 1.60% in the first quarter of 2021 versus 4.48% in the first quarter of 2020. The expected rolling chip win rate range is 2.85% - 3.15%.

In the mass market table games segment, drop was US$51.4 million in the first quarter of 2021 versus US$64.4 million in the first quarter of 2020. The mass market table games hold percentage was 19.1% in the first quarter of 2021, compared with 30.4% in the first quarter of 2020.

Gaming machine handle for the first quarter of 2021 was US$60.2 million, compared with US$39.1 million in the first quarter of 2020. The gaming machine win rate was 3.9% in the first quarter of 2021 versus 2.5% in the first quarter of 2020.

Total non-gaming revenue at Altira Macau in the first quarter of 2021 was US$3.1 million, compared with US$3.0 million in the first quarter of 2020.

Mocha Clubs First Quarter Results

Total operating revenues from Mocha Clubs were US$17.8 million in the first quarter of 2021, compared to US$18.0 million in the first quarter of 2020.

Gaming machine handle for the first quarter of 2021 was US$415.2 million, compared with US$385.9 million in the first quarter of 2020. The gaming machine win rate was 4.3% in the first quarter of 2021 versus 4.7% in the first quarter of 2020.

Other Factors Affecting First Quarter Earnings

Total net non-operating expenses for the first quarter of 2021 were US$61.7 million, which mainly included interest expenses of US$57.7 million, net of amounts capitalized, compared to total net non-operating expenses of US$119.4 million for the first quarter of 2020, which mainly included interest expenses of US$42.3 million and net foreign exchange losses of US$76.2 million which mainly arose from the receivables from affiliated companies denominated in foreign currencies.

 

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Liquidity and Capital Resources

We have relied and intend to rely on cash generated from our operations and debt and equity financings to meet our financing needs and repay our indebtedness, as the case may be. We expect to have significant capital expenditures in the future as we continue to develop our properties. Any other future developments may be subject to further financing and a number of other factors, many of which are beyond our control.

As of March 31, 2021, we held cash and cash equivalents of US$772.0 million and restricted cash of US$0.3 million. Further, HK$14.85 billion (equivalent to US$1.91 billion) of the revolving credit facility under the 2020 Credit Facilities and HK$1.0 million (equivalent to US$0.1 million) of the revolving credit facility under the 2015 Credit Facilities were available for future drawdown, subject to satisfaction of certain conditions precedent.

Cash Flows

The following table sets forth a summary of our cash flows for the periods indicated:

 

     Three Months Ended
March 31,
 
     2021      2020  
     (In thousands of US$)  

Net cash used in operating activities

   $ (94,745    $ (317,532

Net cash used in investing activities

     (31,222      (45,894

Net cash provided by financing activities

     6,428        256,584  

Effect of exchange rate on cash, cash equivalents and restricted cash

     (2,669      2,937  
  

 

 

    

 

 

 

Decrease in cash, cash equivalents and restricted cash

     (122,208      (103,905

Cash, cash equivalents and restricted cash at beginning of period

     894,521        654,623  
  

 

 

    

 

 

 

Cash, cash equivalents and restricted cash at end of period

   $ 772,313      $ 550,718  
  

 

 

    

 

 

 

Operating Activities

Operating cash flows are generally affected by changes in operating income and accounts receivable related to VIP table games play and hotel operations conducted on a cash and credit basis and the remainder of the business, including mass market table games play, gaming machine play, food and beverage, and entertainment that are conducted primarily on a cash basis.

Net cash used in operating activities was US$94.7 million for the first quarter of 2021, compared to net cash used in operating activities of US$317.5 million. The change was primarily due to decreased working capital needed for operations.

Investing Activities

Net cash used in investing activities was US$31.2 million for the first quarter of 2021, compared to US$45.9 million for the first quarter of 2020. The change was primarily due to lower payments for acquisition of property and equipment.

Net cash used in investing activities of US$31.2 million for the first quarter of 2021 mainly included payments for acquisition of property and equipment of US$31.5 million.

Net cash used in investing activities of US$45.9 million for the first quarter of 2020 mainly included payments for acquisition of property and equipment of US$45.9 million.

 

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Our total payments for acquisition of property and equipment for the first quarter of 2021 were US$31.5 million, compared to US$45.9 million for the first quarter of 2020. Such expenditures for both periods were mainly associated with our development projects as well as enhancement to our integrated resort offerings.

Financing Activities

Net cash provided by financing activities amounted to US$6.4 million for the first quarter of 2021, which primarily represented the proceeds from the issuance of the Additional 2029 Senior Notes of US$258.1 million, which priced at 103.250% of the principal amount, partially offset by the repayment of the outstanding revolving credit facility under the 2020 Credit Facilities of US$249.9 million.

Net cash provided by financing activities amounted to US$256.6 million for the first quarter of 2020, which primarily represented the proceeds from the drawdown of the revolving credit facility under the 2015 Credit Facilities of US$251.5 million.

Indebtedness

The following table presents a summary of our gross indebtedness as of March 31, 2021:

 

     As of March 31,
2021
 
     (In thousands of US$)  

2025 Senior Notes

   $ 1,000,000  

2026 Senior Notes

   $ 500,000  

2027 Senior Notes

   $ 600,000  

2028 Senior Notes

   $ 850,000  

2029 Senior Notes

   $ 1,150,000  

2015 Credit Facilities

   $ 129  
  

 

 

 
   $ 4,100,129  
  

 

 

 

On January 21, 2021, we issued US$250.0 million in aggregate principal amount of the Additional 2029 Senior Notes.

On January 27, 2021, HK$1.94 billion (equivalent to US$249.9 million) in principal amount outstanding of the revolving credit facility under the 2020 Credit Facilities, together with accrued interest, was repaid with the proceeds from the Additional 2029 Senior Notes.

Recent Developments

The COVID-19 outbreak continues to have a material effect on our operations, financial position, and prospects during the second quarter of 2021.

Despite the nationwide resumption of issuance of Individual Visit Scheme visas by China in September 2020, our operations continue to be impacted by significant travel bans, restrictions, and quarantine requirements imposed by the governments in Macau, Hong Kong and China, and such bans, restrictions and requirements have been, and may continue to be, modified by the relevant authorities from time to time as COVID-19 developments unfold. Additionally, health-related precautionary measures remain in place at our properties, which continue to impact visitation and customer spending.

As the disruptions from the COVID-19 outbreak are ongoing, any recovery from such disruptions will depend on future events, such as the successful production, distribution and widespread acceptance of safe and effective vaccines, the development of effective treatments for COVID-19, including for new strains of COVID-19, the duration of travel and visa restrictions as well as customer sentiment and behavior, including the length of time before customers resume traveling and participating in entertainment and leisure activities at high-density venues and the impact of potential higher unemployment rates, declines in income levels and loss of personal wealth resulting from the COVID-19 outbreak on consumer behavior related to discretionary spending and traveling, all of which are highly uncertain.

 

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Melco Resorts Finance Limited

Index To Unaudited Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2021

 

     Page  

Condensed Consolidated Balance Sheets (Unaudited)

     F-2  

Condensed Consolidated Statements of Operations (Unaudited)

     F-3  

Condensed Consolidated Statements of Cash Flows (Unaudited)

     F-4  

 

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Melco Resorts Finance Limited

Condensed Consolidated Balance Sheets

(In thousands of U.S. dollars, except share and per share data)

 

     March 31, 2021     December 31, 2020  
     (Unaudited)        

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 772,039     $ 894,246  

Accounts receivable, net

     109,852       110,248  

Receivables from affiliated companies

     505,488       490,502  

Inventories

     19,824       19,852  

Prepaid expenses and other current assets

     49,247       54,827  
  

 

 

   

 

 

 

Total current assets

            1,456,450       1,569,675  
  

 

 

   

 

 

 

Property and equipment, net

     2,706,333       2,748,447  

Gaming subconcession, net

     70,093       84,663  

Intangible assets, net

     17,724       18,840  

Goodwill

     81,958       82,203  

Long-term prepayments, deposits and other assets

     83,485       88,404  

Restricted cash

     274       275  

Receivables from affiliated companies, non-current

     1,272,838       1,278,111  

Operating lease right-of-use assets

     38,395       33,601  

Land use rights, net

     300,375       304,001  
  

 

 

   

 

 

 

Total assets

   $ 6,027,925     $ 6,208,220  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDER’S EQUITY

    

Current liabilities:

    

Accounts payable

   $ 10,379     $ 8,057  

Accrued expenses and other current liabilities

     686,550       727,745  

Income tax payable

     1,244       3,375  

Operating lease liabilities, current

     20,279       13,533  

Payables to affiliated companies

     33,104       26,418  
  

 

 

   

 

 

 

Total current liabilities

     751,556       779,128  
  

 

 

   

 

 

 

Long-term debt, net

     4,067,835       4,060,731  

Other long-term liabilities

     2,919       854  

Deferred tax liabilities, net

     9,700       9,826  

Operating lease liabilities, non-current

     23,661       25,619  
  

 

 

   

 

 

 

Total liabilities

     4,855,671       4,876,158  
  

 

 

   

 

 

 

Shareholder’s equity:

    

Ordinary shares, par value $0.01; 5,000,000 shares authorized; 1,202 shares issued and outstanding

     —         —    

Additional paid-in capital

     1,849,785       1,849,785  

Accumulated other comprehensive income

     19,979       35,732  

Accumulated losses

     (697,510     (553,455
  

 

 

   

 

 

 

Total shareholder’s equity

     1,172,254       1,332,062  
  

 

 

   

 

 

 

Total liabilities and shareholder’s equity

   $ 6,027,925     $ 6,208,220  
  

 

 

   

 

 

 

 

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Table of Contents

Melco Resorts Finance Limited

Condensed Consolidated Statements of Operations (Unaudited)

(In thousands of U.S. dollars)

 

     Three Months Ended March 31,  
     2021     2020  

Operating revenues:

    

Casino

   $ 379,620     $ 618,664  

Rooms

     22,836       23,248  

Food and beverage

     14,326       11,905  

Entertainment, retail and other

     53,378       68,337  
  

 

 

   

 

 

 

Total operating revenues

     470,160       722,154  
  

 

 

   

 

 

 

Operating costs and expenses:

    

Casino

     (344,529     (512,216

Rooms

     (8,226     (11,275

Food and beverage

     (14,046     (17,168

Entertainment, retail and other

     (6,285     (16,872

General and administrative

     (96,286     (124,332

Pre-opening costs

     (193     (37

Amortization of gaming subconcession

     (14,342     (14,323

Amortization of land use rights

     (2,723     (2,719

Depreciation and amortization

     (64,264     (68,250

Property charges and other

     (1,468     (4,692
  

 

 

   

 

 

 

Total operating costs and expenses

     (552,362     (771,884
  

 

 

   

 

 

 

Operating loss

     (82,202     (49,730
  

 

 

   

 

 

 

Non-operating income (expenses):

    

Interest income

     958       239  

Interest expenses, net of amounts capitalized

     (57,725     (42,256

Other financing costs

     (2,383     (1,140

Foreign exchange losses, net

     (2,562     (76,206
  

 

 

   

 

 

 

Total non-operating expenses, net

     (61,712     (119,363
  

 

 

   

 

 

 

Loss before income tax

     (143,914     (169,093

Income tax (expense) credit

     (141     673  
  

 

 

   

 

 

 

Net loss

   $ (144,055   $ (168,420
  

 

 

   

 

 

 

 

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Table of Contents

Melco Resorts Finance Limited

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands of U.S. dollars)

 

     Three Months Ended March 31,  
     2021     2020  

Cash flows from operating activities:

    

Net cash used in operating activities

   $ (94,745   $ (317,532
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Acquisition of property and equipment

     (31,472     (45,930

Proceeds from sale of property and equipment

     250       36  
  

 

 

   

 

 

 

Net cash used in investing activities

     (31,222     (45,894
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Principal payments on long-term debt

     (249,887     (38

Payments of deferred financing costs

     (1,963     (1,518

Funds from an affiliated company

     153       6,664  

Proceeds from long-term debt

     258,125       251,476  
  

 

 

   

 

 

 

Net cash provided by financing activities

     6,428       256,584  
  

 

 

   

 

 

 

Effect of exchange rate on cash, cash equivalents and restricted cash

     (2,669     2,937  
  

 

 

   

 

 

 

Decrease in cash, cash equivalents and restricted cash

     (122,208     (103,905

Cash, cash equivalents and restricted cash at beginning of period

     894,521       654,623  
  

 

 

   

 

 

 

Cash, cash equivalents and restricted cash at end of period

   $     772,313     $     550,718  
  

 

 

   

 

 

 

Supplemental cash flow disclosures:

    

Cash paid for interest, net of amounts capitalized

   $ (41,825   $ (16,885

Cash paid for income taxes

   $ (2,367   $ (2,340

Cash paid for amounts included in the measurement of lease liabilities - operating cash flows from operating leases

   $ (3,838   $ (4,144

Change in operating lease liabilities arising from obtaining operating lease right-of-use assets and lease modification or other reassessment events

   $ 9,137     $ (4,653

Change in accrued expenses and other current liabilities related to acquisition of property and equipment

   $ 15,184     $ 18,517  

 

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:

 

    
     March 31,
2021
    December 31,
2020
 

Cash and cash equivalents

   $ 772,039     $ 894,246  

Non-current portion of restricted cash

     274       275  
  

 

 

   

 

 

 

Total cash, cash equivalents and restricted cash

   $     772,313     $     894,521  
  

 

 

   

 

 

 

 

F-4