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 November 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):  ☐

 

 

 


Table of Contents

MELCO RESORTS & ENTERTAINMENT LIMITED

Form 6–K

TABLE OF CONTENTS

 

Signature

     3  

Exhibit 99.1

     1  


Table of Contents

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: November 10, 2021

 

 

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Table of Contents

EXHIBIT INDEX

 

Exhibit No.

  

Description

Exhibit 99.1   

Unaudited Results for Third Quarter of 2021

Unaudited Results for Third Quarter of 2021

Exhibit 99.1

 

LOGO

Melco Announces Unaudited Third Quarter 2021 Earnings

MACAU, Nov. 09, 2021 (GLOBE NEWSWIRE) –

Melco Resorts & Entertainment Limited (Nasdaq: MLCO) (“Melco” or the “Company”), a developer, owner, and operator of integrated resort facilities in Asia and Europe, today reported its unaudited financial results for the third quarter of 2021.

Total operating revenues for the third quarter of 2021 were US$446.4 million, representing an increase of approximately 110% from US$212.9 million for the comparable period in 2020. The increase in total operating revenues was primarily attributable to improved performance in all gaming segments and non-gaming operations as a result of a year-over-year increase in inbound tourism in Macau.

Operating loss for the third quarter of 2021 was US$182.2 million, compared with operating loss of US$275.0 million in the third quarter of 2020.

Melco generated Adjusted Property EBITDA(1) of US$31.9 million in the third quarter of 2021, compared with negative Adjusted Property EBITDA of US$76.7 million in the third quarter of 2020.

Net loss attributable to Melco Resorts & Entertainment Limited for the third quarter of 2021 was US$233.2 million, or US$0.49 per ADS, compared with net loss attributable to Melco Resorts & Entertainment Limited of US$331.6 million, or US$0.70 per ADS, in the third quarter of 2020. The net loss attributable to noncontrolling interests was US$35.3 million and US$55.3 million during the third quarters of 2021 and 2020, respectively, all of which were related to Studio City, City of Dreams Manila, and the Cyprus Operations.

Mr. Lawrence Ho, our Chairman and Chief Executive Officer, commented, “Continued travel restrictions and quarantine measures in Macau and the region negatively impacted our third quarter operating and financial performance. To preserve our cash and liquidity, we continue to enforce strong cost control discipline in respect to both operating expenses and capital expenditures.

“Macau remains one of the safest regions in the world thanks to the government’s careful handling of the global pandemic, and we applaud the government’s effort to further increase vaccination rates towards the goal of increasing immunity in Macau. At Melco, we continue to encourage vaccination uptake as a key company objective that will help to ensure a safe environment for colleagues, guests, and the community at large. Thanks to strong participation in our “Get the Jab” vaccination incentive campaign, Melco’s vaccination rate in Macau has reached close to 95%. We look forward to further travel integration between mainland China and Macau, once Macau achieves an acceptable vaccination rate, and we remain fully committed to doing our part for the betterment of the community.

“Looking forward, we remain confident that pent-up demand for Macau remains intact and strong.

“Meanwhile, Melco remains steadfast to its investment commitments in Macau, where we are a leader in driving the growth and diversification of the Macau economy. The construction of Studio City Phase 2 is progressing on track for completion before December 27, 2022. This expansion will offer approximately 900 additional luxury hotel rooms and suites, an additional indoor/outdoor water park which is expected to be one of the largest in the world, a Cineplex, multiple fine-dining restaurants, and state-of-the-art MICE space.

“In Europe, the development of City of Dreams Mediterranean continues and is on track with our target opening date in the second half of 2022. The project represents Europe’s largest integrated resort with approximately 500 luxury hotel rooms, approximately 100,000 square feet of MICE space, an outdoor amphitheater, a family adventure park, a variety of fine-dining outlets, and luxury retail.

“We have discontinued our pursuit of an integrated resort development in Japan and will close our offices there in the coming months.

“Additionally, we have recently repurchased approximately 3.1 million ADSs for approximately US$31 million. These share repurchases reflect the confidence we have in our company, our long-term strategy, and our future growth prospects.

“Last, we are proud of our achievements in sustainability at Melco. In the third quarter, we were awarded the PATA Gold Awards 2021 in the “Climate Change Initiative” category, while International Gaming Awards 2021 named us “Sustainable Resort of the Year” in City of Dreams Macau. Through our initiatives, we have significantly reduced food waste, greenhouse gas emissions, the usage of harmful chemicals, and the consumption of single use plastics across our properties.”

City of Dreams Third Quarter Results

For the quarter ended September 30, 2021, total operating revenues at City of Dreams were US$252.0 million, compared to US$91.4 million in the third quarter of 2020. City of Dreams generated Adjusted EBITDA of US$32.7 million in the third quarter of 2021, compared with negative Adjusted EBITDA of US$49.2 million in the third quarter of 2020. The year-over-year increase in Adjusted EBITDA was primarily a result of better performance in all gaming segments and non-gaming operations.

 

1


Rolling chip volume was US$2.79 billion for the third quarter of 2021 versus US$1.86 billion in the third quarter of 2020. The rolling chip win rate was 3.46% in the third quarter of 2021 versus 3.34% in the third quarter of 2020. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop increased to US$617.7 million in the third quarter of 2021, compared with US$90.1 million in the third quarter of 2020. The mass market table games hold percentage was 28.6% in the third quarter of 2021, compared to 38.1% in the third quarter of 2020.

Gaming machine handle for the third quarter of 2021 was US$376.9 million, compared with US$109.7 million in the third quarter of 2020.

The gaming machine win rate was 3.1% in the third quarter of 2021 versus 3.4% in the third quarter of 2020.

Total non-gaming revenue at City of Dreams in the third quarter of 2021 was US$39.5 million, compared with US$18.0 million in the third quarter of 2020.

Altira Macau Third Quarter Results

For the quarter ended September 30, 2021, total operating revenues at Altira Macau were US$10.2 million, compared to US$11.0 million in the third quarter of 2020. Altira Macau generated negative Adjusted EBITDA of US$6.9 million in the third quarter of 2021, compared with negative Adjusted EBITDA of US$16.8 million in the third quarter of 2020.

Starting in the third quarter of 2021, Altira Macau has strategically repositioned to cater to the premium mass segment and has shut down VIP operations. In the third quarter of 2020, rolling chip volume was US$335.8 million and the rolling chip win rate was 3.06%. The expected rolling chip win rate range is 2.85% - 3.15%.

In the mass market table games segment, drop was US$28.7 million in the third quarter of 2021 versus US$15.7 million in the third quarter of 2020. The mass market table games hold percentage was 25.8% in the third quarter of 2021, compared with 16.9% in the third quarter of 2020.

Gaming machine handle for the third quarter of 2021 was US$59.1 million, compared with US$42.6 million in the third quarter of 2020. The gaming machine win rate was 3.6% in the third quarter of 2021 versus 2.3% in the third quarter of 2020.

Total non-gaming revenue at Altira Macau in the third quarter of 2021 was US$2.0 million, compared with US$2.2 million in the third quarter of 2020.

Mocha Clubs Third Quarter Results

Total operating revenues from Mocha Clubs were US$22.2 million in the third quarter of 2021, compared to US$11.3 million in the third quarter of 2020. Mocha Clubs generated Adjusted EBITDA of US$4.8 million in the third quarter of 2021, compared with negative Adjusted EBITDA of US$0.5 million in the same period in 2020.

Gaming machine handle for the third quarter of 2021 was US$491.3 million, compared with US$279.6 million in the third quarter of 2020. The gaming machine win rate was 4.5% in the third quarter of 2021 versus 4.0% in the third quarter of 2020.

Studio City Third Quarter Results

For the quarter ended September 30, 2021, total operating revenues at Studio City were US$81.8 million, compared to US$30.8 million in the third quarter of 2020. Studio City generated negative Adjusted EBITDA of US$14.0 million in the third quarter of 2021, compared with negative Adjusted EBITDA of US$21.7 million in the third quarter of 2020. The year-over-year change in Adjusted EBITDA was primarily a result of better performance in overall gaming and non-gaming operations.

Studio City’s rolling chip volume was US$472.4 million in the third quarter of 2021 versus US$148.8 million in the third quarter of 2020. The rolling chip win rate was 2.35% in the third quarter of 2021 versus 3.41% in the third quarter of 2020. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop increased to US$250.5 million in the third quarter of 2021, compared with US$49.7 million in the third quarter of 2020. The mass market table games hold percentage was 26.4% in the third quarter of 2021, compared to 31.5% in the third quarter of 2020.

Gaming machine handle for the third quarter of 2021 was US$271.5 million, compared with US$99.2 million in the third quarter of 2020. The gaming machine win rate was 2.9% in the third quarter of 2021, compared to 2.7% in the third quarter of 2020.

Total non-gaming revenue at Studio City in the third quarter of 2021 was US$19.6 million, compared with US$11.5 million in the third quarter of 2020.

 

2


City of Dreams Manila Third Quarter Results

For the quarter ended September 30, 2021, total operating revenues at City of Dreams Manila were US$52.5 million, compared to US$43.4 million in the third quarter of 2020. City of Dreams Manila generated Adjusted EBITDA of US$11.7 million in the third quarter of 2021, compared with Adjusted EBITDA of US$5.2 million in the comparable period of 2020. The year-over-year increase in Adjusted EBITDA was primarily due to better performance in the mass market table games and gaming machine segments, partially offset by softer performance in the rolling chip segment.

City of Dreams Manila’s rolling chip volume was US$25.3 million in the third quarter of 2021 versus US$561.3 million in the third quarter of 2020. The rolling chip win rate was 6.75% in the third quarter of 2021 versus 2.68% in the third quarter of 2020. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop increased to US$82.0 million in the third quarter of 2021, compared with US$63.8 million in the third quarter of 2020. The mass market table games hold percentage was 28.1% in the third quarter of 2021, compared to 29.0% in the third quarter of 2020.

Gaming machine handle for the third quarter of 2021 was US$527.8 million, compared with US$287.9 million in the third quarter of 2020. The gaming machine win rate was 5.5% in the third quarter of 2021 versus 5.8% in the third quarter of 2020.

Total non-gaming revenue at City of Dreams Manila in the third quarter of 2021 was US$9.8 million, compared with US$8.7 million in the third quarter of 2020.

Cyprus Operations Third Quarter Results

The Company is licensed to operate a temporary casino, the first casino in the Republic of Cyprus, and four satellite casinos. Upon the completion and opening of City of Dreams Mediterranean, the Company will continue to operate the satellite casinos while operation of the temporary casino will cease.

For the quarter ended September 30, 2021, total operating revenues at Cyprus Casinos were US$20.2 million, compared to US$20.5 million in the third quarter of 2020. Cyprus Casinos generated Adjusted EBITDA of US$3.6 million in the third quarter of 2021, compared with Adjusted EBITDA of US$6.3 million in the third quarter of 2020.

Rolling chip volume was US$2.7 million for the third quarter of 2021 versus US$0.2 million in the third quarter of 2020. The rolling chip win rate was 22.33% in the third quarter of 2021 versus negative 36.03% in the third quarter of 2020. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop was US$31.3 million in the third quarter of 2021, compared with US$23.3 million in the third quarter of 2020. The mass market table games hold percentage was 17.0% in the third quarter of 2021, compared to 20.6% in the third quarter of 2020.

Gaming machine handle for the third quarter of 2021 was US$293.1 million, compared with US$307.5 million in the third quarter of 2020. The gaming machine win rate was 5.0% in the third quarter of 2021 versus 5.1% in the third quarter of 2020.

Other Factors Affecting Earnings

Total net non-operating expenses for the third quarter of 2021 were US$87.1 million, which mainly included interest expenses of US$87.4 million, net of amounts capitalized.

Depreciation and amortization costs of US$147.7 million were recorded in the third quarter of 2021, of which US$14.3 million related to the amortization expense for our gaming subconcession and US$5.7 million related to the amortization expense for the land use rights.

The negative Adjusted EBITDA for Studio City for the three months ended September 30, 2021 referred to above was US$9.1 million less than the negative Adjusted EBITDA of Studio City contained in the earnings release for Studio City International Holdings Limited (“SCIHL”) dated November 9, 2021 (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 press release. Such intercompany charges include, among other items, fees and shared service charges billed between SCIHL and its subsidiaries and certain subsidiaries of Melco. Additionally, Adjusted EBITDA of Studio City included in this press release does not reflect certain intercompany costs related to the table games operations at Studio City Casino.

Financial Position and Capital Expenditures

Total cash and bank balances as of September 30, 2021 aggregated to US$1.52 billion, including US$0.4 million of restricted cash. Total debt, net of unamortized deferred financing costs and original issue premiums, was US$6.16 billion at the end of the third quarter of 2021.

Capital expenditures for the third quarter of 2021 were US$221.3 million, which primarily related to various construction projects at Studio City Phase 2 and City of Dreams Mediterranean.

 

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On November 5, 2021, MCO Nominee One Limited (“MCO Nominee One”), a subsidiary of Melco, received confirmation that the majority of lenders of the senior facilities agreement dated April 29, 2020, entered into between, among others, 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$1.92 billion) in a revolving credit facility for a term of five years (the “2020 Credit Facilities”) have consented and agreed to a waiver extension of the following financial condition covenants contained in the revolving credit facility under the 2020 Credit Facilities (the “Facility Agreement”): (i) meet or exceed the interest cover ratio (ratio of consolidated EBITDA to consolidated net finance charges as such terms are defined in the Facility Agreement) of 2.50 to 1.00; (ii) not exceed the senior leverage ratio (ratio of consolidated total debt to consolidated EBITDA as such terms are defined in the Facility Agreement) of 3.50 to 1.00; and (iii) not exceed the total leverage ratio (ratio of consolidated total debt to consolidated EBITDA as such terms are defined in the Facility Agreement) of 4.50 to 1.00, in each case in respect of the relevant periods ending on the following applicable test dates: (a) March 31, 2022; (b) June 30, 2022; (c) September 30, 2022; and (d) December 31, 2022. MCO Nominee One has paid a customary fee to all consenting lenders in relation to such consent and such consent has become effective upon receipt of the consent fee by the facility agent of the lenders to the 2020 Credit Facilities.

Recent Developments

COVID-19 outbreaks continue to have a material effect on our operations, financial position, and future prospects in the fourth quarter of 2021.

In Macau, our operations have been impacted by on-and-off travel restrictions and quarantine requirements as imposed by the governments of Macau, Hong Kong, and China in response to isolated cases. The appearance of COVID-19 cases in early August 2021 led to city-wide mandatory testing, mandatory closure of most entertainment and leisure venues (casinos and gaming areas excluded), and strict travel restrictions and requirements being implemented to enter and exit Macau. Similarly in late September 2021, the identification of additional COVID-19 cases again led to a repeat of testing, closure, and travel restrictions, which led to reduced turnout for October Golden Week holiday. Since October 19, 2021, authorities have eased pandemic prevention measures such that travelers no longer require a 14-day quarantine on arrival in Zhuhai, and the validity of negative nucleic acid tests were extended from 24 hours to 48 hours or seven days. As a result, our visitation has been gradually recovering.

In the Philippines, City of Dreams Manilla was operating at limited capacity since the beginning of the quarter until August 5, 2021, when Manila was put into lockdown on August 6, 2021 due to a surge in COVID-19 cases. On September 17, 2021, City of Dreams Manila reopened operations with capacity limited at 50% under the new Alert Level 4 classification. Hotels were not open to the general public, but indoor F&B operations were allowed to take customers who had been vaccinated. On October 16, 2021, the Philippines downgraded to Alert Level 3, allowing hotels to take vaccinated local guests on staycation packages. Most recently in the fourth quarter, this was further downgraded to Alert Level 2 on November 5, 2021 allowing hotels to take leisure guests. Meanwhile, from a business development front, City of Dreams Manila commenced operating online gaming, namely, live-dealer table games on August 10, 2021 and slot machines on September 15, 2021 after receiving the required approvals from PAGCOR. Such online gaming offerings are only available to registered patrons of City of Dreams Manila inside the Philippines.

In Cyprus, our casinos were fully opened throughout the third quarter and we saw sequential improvement versus the second quarter thanks to progressively higher permitted capacities and increased visitation over the summer months, although with permitted capacity limited at 50%. Certain other COVID-19 restrictions continue to remain in force, such as wearing of masks on the casino floor and smoking only in designated areas.

The pace of recovery from COVID-19 will depend on future events, including duration of travel and visa restrictions, the pace of vaccination progress, development of new medicine for COVID-19, the impact of potentially higher unemployment rates, declines in income levels, and loss of personal wealth resulting from the COVID-19 outbreak affecting discretionary spending and travel, all of which remain highly uncertain.

Conference Call Information

Melco Resorts & Entertainment Limited will hold a conference call to discuss its third quarter 2021 financial results on Tuesday, November 9, 2021 at 8:30 a.m. Eastern Time (or 9:30 p.m. Hong Kong Time). To join the conference call, please use the dial-in details below:

 

US Toll Free    1 833 239 5575
US Toll / International    1 332 208 9458
HK Toll    852 3018 8307
HK Toll Free    800 906 613
Japan Toll    81 3 4577 4717
Japan Toll Free    012 092 5482
UK Toll Free    080 0279 8053
Australia Toll    61 290 833 216
Australia Toll Free    1 800 754 642
Philippines Toll Free    1 800 1888 0892
Passcode    9266657

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

 

4


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    852 3051 2780
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    9266657

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 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) 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, the Philippines and the Republic of Cyprus, (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. 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 net income/loss 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 net income/loss 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/loss 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/loss, 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/loss, net income/loss, 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.

 

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(2) “Adjusted net income/loss” is net income/loss 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/loss attributable to Melco Resorts & Entertainment Limited and adjusted net income/loss 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/loss 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/loss attributable to Melco Resorts & Entertainment Limited and adjusted net income/loss 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/loss 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 integrated resort facilities in Asia and Europe. The Company currently operates Altira Macau (www.altiramacau.com), an integrated resort located at Taipa, Macau and City of Dreams (www.cityofdreamsmacau.com), an integrated 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 resort in Cotai, Macau. In the Philippines, a Philippine subsidiary of the Company currently operates and manages City of Dreams Manila (www.cityofdreamsmanila.com), an integrated resort in the Entertainment City complex in Manila. In Europe, the Company is currently developing City of Dreams Mediterranean (www.cityofdreamsmed.com.cy) in the Republic of Cyprus, which is expected to be the largest and premier integrated destination resort in Europe. The Company is currently operating a temporary casino, the first authorized casino in the Republic of Cyprus, and is licensed to operate four satellite casinos (“Cyprus Casinos”). Upon the opening of City of Dreams Mediterranean, the Company will continue to operate the satellite casinos while operation of the temporary casino will cease. 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 the investment community, please contact:

Robin Yuen

Director, Investor Relations

Tel: +852 2598 3619

Email: robinyuen@melco-resorts.com

For media enquiries, please contact:

Chimmy Leung

Executive Director, Corporate Communications

Tel: +852 3151 3765

Email: chimmyleung@melco-resorts.com

 

6


Melco Resorts & Entertainment Limited and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

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

 

     Three Months Ended September 30,     Nine Months Ended September 30,  
     2021     2020     2021     2020  

Operating revenues:

        

Casino

   $ 373,170     $ 170,775     $ 1,285,604     $ 1,030,914  

Rooms

     33,428       15,184       112,835       67,228  

Food and beverage

     20,529       13,385       72,024       48,047  

Entertainment, retail and other

     19,259       13,552       61,285       53,732  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating revenues

     446,386       212,896       1,531,748       1,199,921  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Casino

     (297,847     (207,188     (1,034,602     (986,818

Rooms

     (11,592     (8,573     (37,270     (34,897

Food and beverage

     (20,967     (14,822     (68,775     (62,482

Entertainment, retail and other

     (7,110     (9,378     (23,108     (44,915

General and administrative

     (112,011     (80,985     (326,401     (326,214

Payments to the Philippine Parties

     (3,176     (2,743     (20,269     (7,678

Pre-opening costs

     (650     (428     (2,774     (1,049

Development costs

     (24,648     (2,831     (31,979     (22,633

Amortization of gaming subconcession

     (14,307     (14,364     (42,990     (43,050

Amortization of land use rights

     (5,703     (5,726     (17,137     (17,161

Depreciation and amortization

     (127,663     (133,439     (375,592     (410,757

Property charges and other

     (2,945     (7,426     (23,937     (37,990
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (628,619     (487,903     (2,004,834     (1,995,644
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

     (182,233     (275,007     (473,086     (795,723
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-operating income (expenses):

        

Interest income

     1,580       1,437       5,161       3,732  

Interest expenses, net of amounts capitalized

     (87,387     (91,864     (265,096     (250,288

Other financing costs

     (3,473     (2,471     (9,953     (5,644

Foreign exchange gains (losses), net

     1,441       1,101       3,050       (5,117

Other income (expenses), net

     741       (50     2,372       (151,857

Loss on extinguishment of debt

     —         (18,497     (28,817     (19,733

Costs associated with debt modification

     —         —         —         (310
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating expenses, net

     (87,098     (110,344     (293,283     (429,217
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income tax

     (269,331     (385,351     (766,369     (1,224,940

Income tax credit (expense)

     837       (1,560     (154     5,166  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (268,494     (386,911     (766,523     (1,219,774

Net loss attributable to noncontrolling interests

     35,273       55,330       114,709       156,016  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to Melco Resorts & Entertainment Limited

   $ (233,221   $ (331,581   $ (651,814   $ (1,063,758
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to Melco Resorts & Entertainment Limited per share:

        

Basic

   $ (0.162   $ (0.232   $ (0.454   $ (0.743
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.162   $ (0.232   $ (0.454   $ (0.743
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to Melco Resorts & Entertainment Limited per ADS:

        

Basic

   $ (0.487   $ (0.695   $ (1.362   $ (2.228
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.487   $ (0.696   $ (1.362   $ (2.230
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding used in net loss attributable to Melco Resorts & Entertainment Limited per share calculation:

        

Basic

     1,437,651,448       1,430,817,899       1,435,941,037       1,432,437,101  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     1,437,651,448       1,430,817,899       1,435,941,037       1,432,437,101  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

7


Melco Resorts & Entertainment Limited and Subsidiaries

Condensed Consolidated Balance Sheets

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

 

     September 30,
2021
    December 31,
2020
 
     (Unaudited)        

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 1,521,562     $ 1,755,351  

Restricted cash

     274       13  

Accounts receivable, net

     52,168       129,619  

Amounts due from affiliated companies

     280       765  

Inventories

     35,572       37,277  

Prepaid expenses and other current assets

     119,019       85,798  

Assets held for sales

     3,287       —    
  

 

 

   

 

 

 

Total current assets

     1,732,162       2,008,823  
  

 

 

   

 

 

 

Property and equipment, net

     5,821,612       5,681,268  

Gaming subconcession, net

     41,409       84,663  

Intangible assets, net

     53,782       58,833  

Goodwill

     81,858       82,203  

Long-term prepayments, deposits and other assets

     187,424       284,608  

Restricted cash

     131       406  

Deferred tax assets, net

     6,701       6,376  

Operating lease right-of-use assets

     74,527       92,213  

Land use rights, net

     701,442       721,574  
  

 

 

   

 

 

 

Total assets

   $ 8,701,048     $ 9,020,967  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 6,882     $ 9,483  

Accrued expenses and other current liabilities

     914,616       983,865  

Income tax payable

     12,847       14,164  

Operating lease liabilities, current

     21,107       27,066  

Finance lease liabilities, current

     41,120       80,004  

Current portion of long-term debt, net

     128       —    

Amounts due to affiliated companies

     1,443       1,668  
  

 

 

   

 

 

 

Total current liabilities

     998,143       1,116,250  
  

 

 

   

 

 

 

Long-term debt, net

     6,157,476       5,645,391  

Other long-term liabilities

     41,750       29,213  

Deferred tax liabilities, net

     44,450       45,952  

Operating lease liabilities, non-current

     64,480       75,867  

Finance lease liabilities, non-current

     351,456       270,223  
  

 

 

   

 

 

 

Total liabilities

     7,657,755       7,182,896  
  

 

 

   

 

 

 

Shareholders’ equity:

    

Ordinary shares, par value $0.01; 7,300,000,000 shares authorized; 1,456,547,942 and 1,456,547,942 shares issued; 1,431,608,590 and 1,430,965,312 shares outstanding, respectively

     14,565       14,565  

Treasury shares, at cost; 24,939,352 and 25,582,630 shares, respectively

     (109,184     (121,028

Additional paid-in capital

     3,227,235       3,207,312  

Accumulated other comprehensive losses

     (59,399     (11,332

Accumulated losses

     (2,639,276     (1,987,396
  

 

 

   

 

 

 

Total Melco Resorts & Entertainment Limited shareholders’ equity

     433,941       1,102,121  

Noncontrolling interests

     609,352       735,950  
  

 

 

   

 

 

 

Total shareholders’ equity

     1,043,293       1,838,071  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 8,701,048     $ 9,020,967  
  

 

 

   

 

 

 

 

8


Melco Resorts & Entertainment Limited and Subsidiaries

Reconciliation of Net Loss Attributable to Melco Resorts & Entertainment Limited to

Adjusted Net Loss Attributable to Melco Resorts & Entertainment Limited (Unaudited)

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

 

     Three Months Ended September 30,     Nine Months Ended September 30,  
     2021     2020     2021     2020  

Net loss attributable to Melco Resorts & Entertainment Limited

   $ (233,221   $ (331,581   $ (651,814   $ (1,063,758

Pre-opening costs

     650       428       2,774       1,049  

Development costs

     24,648       2,831       31,979       22,633  

Property charges and other

     2,945       7,426       23,937       37,990  

Loss on extinguishment of debt

     —         18,497       28,817       19,733  

Costs associated with debt modification

     —         —         —         310  

Income tax impact on adjustments

     (739     (355     (2,133     (4,178

Noncontrolling interests impact on adjustments

     (440     (8,321     (16,185     (10,677
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net loss attributable to Melco Resorts & Entertainment Limited

   $ (206,157   $ (311,075   $ (582,625   $ (996,898
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net loss attributable to Melco Resorts & Entertainment Limited per share:

        

Basic

   $ (0.143   $ (0.217   $ (0.406   $ (0.696
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.143   $ (0.218   $ (0.406   $ (0.697
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net loss attributable to Melco Resorts & Entertainment Limited per ADS:

        

Basic

   $ (0.430   $ (0.652   $ (1.217   $ (2.088
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.430   $ (0.654   $ (1.217   $ (2.091
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding used in adjusted net loss attributable to Melco Resorts & Entertainment Limited per share calculation:

        

Basic

     1,437,651,448       1,430,817,899       1,435,941,037       1,432,437,101  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     1,437,651,448       1,430,817,899       1,435,941,037       1,432,437,101  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

9


Melco Resorts & Entertainment Limited and Subsidiaries

Reconciliation of Operating Loss to Adjusted EBITDA and Adjusted Property EBITDA (Unaudited)

(In thousands of U.S. dollars)

 

     Three Months Ended September 30, 2021  
     Altira
Macau
    Mocha     City of
Dreams
    Studio
City
    City of
Dreams
Manila
    Cyprus
Operations
    Corporate
and Other
    Total  

Operating (loss) income

   $ (12,725   $ 3,296     $ (35,542   $ (49,810   $ (12,639   $ 541     $ (75,354   $ (182,233

Payments to the Philippine Parties

     —         —         —         —         3,176       —         —         3,176  

Land rent to Belle Corporation

     —         —         —         —         672       —         —         672  

Pre-opening costs

     —         —         —         6       —         644       —         650  

Development costs

     —         —         —         —         —         —         24,648       24,648  

Depreciation and amortization

     5,542       1,420       62,736       34,327       19,844       2,205       21,599       147,673  

Share-based compensation

     365       115       4,307       1,137       517       238       10,840       17,519  

Property charges and other

     (128     15       1,212       347       130       —         1,369       2,945  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     (6,946     4,846       32,713       (13,993     11,700       3,628       (16,898     15,050  

Corporate and Other expenses

     —         —         —         —         —         —         16,898       16,898  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

   $ (6,946   $ 4,846     $ 32,713     $ (13,993   $ 11,700     $ 3,628     $ —         $ 31,948  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended September 30, 2020  
     Altira
Macau
    Mocha     City of
Dreams
    Studio
City
    City of
Dreams
Manila
    Cyprus
Operations
    Corporate
and Other
    Total  

Operating (loss) income

   $ (22,653   $ (2,367   $ (111,994   $ (66,769   $ (20,982   $ 2,447     $ (52,689   $ (275,007

Payments to the Philippine Parties

     —         —         —         —         2,743       —         —         2,743  

Land rent to Belle Corporation

     —         —         —         —         812       —         —         812  

Pre-opening costs

     —         —         29       77       —         322       —         428  

Development costs

     —         —         —         —         —         —         2,831       2,831  

Depreciation and amortization

     5,407       1,850       59,743       44,399       16,733       3,470       21,927       153,529  

Share-based compensation

     140       36       1,512       484       340       54       8,526       11,092  

Property charges and other

     261       30       1,517       71       5,550       (3     —         7,426  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     (16,845     (451     (49,193     (21,738     5,196       6,290       (19,405     (96,146

Corporate and Other expenses

     —         —         —         —         —         —         19,405       19,405  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

   $ (16,845   $ (451   $ (49,193   $ (21,738   $ 5,196     $ 6,290     $ —         $ (76,741
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

10


Melco Resorts & Entertainment Limited and Subsidiaries

Reconciliation of Operating Loss to Adjusted EBITDA and Adjusted Property EBITDA (Unaudited)

(In thousands of U.S. dollars)

 

     Nine Months Ended September 30, 2021  
     Altira
Macau
    Mocha     City of
Dreams
    Studio
City
    City of
Dreams
Manila
    Cyprus
Operations
    Corporate
and Other
    Total  

Operating (loss) income

   $ (72,608   $ 7,241     $ (52,024   $ (129,172   $ (28,303   $ (14,375   $ (183,845   $ (473,086

Payments to the Philippine Parties

     —         —         —         —         20,269       —         —         20,269  

Land rent to Belle Corporation

     —         —         —         —         2,179       —         —         2,179  

Pre-opening costs

     —         —         195       739       —         1,840       —         2,774  

Development costs

     —         —         —         —         —         —         31,979       31,979  

Depreciation and amortization

     16,518       4,641       186,130       101,893       53,187       8,586       64,764       435,719  

Share-based compensation

     618       187       7,217       1,974       1,298       350       28,262       39,906  

Property charges and other

     1,630       203       10,769       4,212       5,732       —         1,391       23,937  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     (53,842     12,272       152,287       (20,354     54,362       (3,599     (57,449     83,677  

Corporate and Other expenses

     —         —         —         —         —         —         57,449       57,449  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

   $ (53,842   $ 12,272     $ 152,287     $ (20,354   $ 54,362     $ (3,599   $ —       $ 141,126  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Nine Months Ended September 30, 2020  
     Altira
Macau
    Mocha     City of
Dreams
    Studio
City
    City of
Dreams
Manila
    Cyprus
Operations
    Corporate
and Other
    Total  

Operating (loss) income

   $ (62,735   $ (1,515   $ (260,100   $ (210,500   $ (54,233   $ (6,808   $ (199,832   $ (795,723

Payments to the Philippine Parties

     —         —         —         —         7,678       —         —         7,678  

Land rent to Belle Corporation

     —         —         —         —         2,374       —         —         2,374  

Pre-opening costs

     37       —         (21     133       —         900       —         1,049  

Development costs

     —         —         —         —         —         —         22,633       22,633  

Depreciation and amortization

     16,086       5,459       186,253       131,043       49,553       9,128       73,446       470,968  

Share-based compensation

     366       41       3,960       1,416       1,066       155       25,172       32,176  

Property charges and other

     897       56       11,325       4,414       5,753       129       15,416       37,990  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     (45,349     4,041       (58,583     (73,494     12,191       3,504       (63,165     (220,855

Corporate and Other expenses

     —         —         —         —         —         —         63,165       63,165  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

   $ (45,349   $ 4,041     $ (58,583   $ (73,494   $ 12,191     $ 3,504     $ —       $ (157,690
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

11


Melco Resorts & Entertainment Limited and Subsidiaries

Reconciliation of Net Loss Attributable to Melco Resorts & Entertainment Limited to

Adjusted EBITDA and Adjusted Property EBITDA (Unaudited)

(In thousands of U.S. dollars)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2021     2020     2021     2020  

Net loss attributable to Melco Resorts & Entertainment Limited

   $ (233,221   $ (331,581   $ (651,814   $ (1,063,758

Net loss attributable to noncontrolling interests

     (35,273     (55,330     (114,709     (156,016
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (268,494     (386,911     (766,523     (1,219,774

Income tax (credit) expense

     (837     1,560       154       (5,166

Interest and other non-operating expenses, net

     87,098       110,344       293,283       429,217  

Property charges and other

     2,945       7,426       23,937       37,990  

Share-based compensation

     17,519       11,092       39,906       32,176  

Depreciation and amortization

     147,673       153,529       435,719       470,968  

Development costs

     24,648       2,831       31,979       22,633  

Pre-opening costs

     650       428       2,774       1,049  

Land rent to Belle Corporation

     672       812       2,179       2,374  

Payments to the Philippine Parties

     3,176       2,743       20,269       7,678  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     15,050       (96,146     83,677       (220,855

Corporate and Other expenses

     16,898       19,405       57,449       63,165  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

   $ 31,948     $ (76,741   $ 141,126     $ (157,690
  

 

 

   

 

 

   

 

 

   

 

 

 

 

12


Melco Resorts & Entertainment Limited and Subsidiaries

Supplemental Data Schedule

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2021     2020     2021     2020  

Room Statistics(3):

        

Altira Macau

        

Average daily rate (4)

   $ 104     $ 152     $ 110     $ 171  

Occupancy per available room

     46     19     51     32

Revenue per available room (5)

   $ 48     $ 29     $ 56     $ 54  

City of Dreams

        

Average daily rate (4)

   $ 211     $ 208     $ 203     $ 230  

Occupancy per available room

     46     15     55     24

Revenue per available room (5)

   $ 96     $ 31     $ 113     $ 54  

Studio City

        

Average daily rate (4)

   $ 123     $ 119     $ 122     $ 134  

Occupancy per available room

     52     13     54     20

Revenue per available room (5)

   $ 64     $ 16     $ 66     $ 27  

City of Dreams Manila

        

Average daily rate (4)

   $ 117     $ 291     $ 110     $ 222  

Occupancy per available room

     75     26     69     58

Revenue per available room (5)

   $ 88     $ 77     $ 76     $ 129  

Other Information(6):

        

Altira Macau

        

Average number of table games

     100       101       101       96  

Average number of gaming machines

     128       101       119       109  

Table games win per unit per day (7)

   $ 804     $ 1,390     $ 2,188     $ 4,813  

Gaming machines win per unit per day (8)

   $ 181     $ 104     $ 202     $ 123  

City of Dreams

        

Average number of table games

     514       515       511       489  

Average number of gaming machines

     607       482       536       476  

Table games win per unit per day (7)

   $ 5,782     $ 2,033     $ 7,090     $ 6,149  

Gaming machines win per unit per day (8)

   $ 212     $ 85     $ 297     $ 202  

Studio City

        

Average number of table games

     291       291       291       279  

Average number of gaming machines

     656       595       623       579  

Table games win per unit per day (7)

   $ 2,883     $ 774     $ 3,354     $ 2,234  

Gaming machines win per unit per day (8)

   $ 131     $ 48     $ 135     $ 96  

City of Dreams Manila

        

Average number of table games

     302       301       297       300  

Average number of gaming machines

     2,377       2,256       2,304       2,274  

Table games win per unit per day (7)

   $ 1,638     $ 1,450     $ 1,926     $ 2,712  

Gaming machines win per unit per day (8)

   $ 251     $ 96     $ 190     $ 143  

Cyprus Operations

        

Average number of table games

     32       25       32       30  

Average number of gaming machines

     457       304       440       362  

Table games win per unit per day (7)

   $ 2,007     $ 2,041     $ 1,844     $ 1,901  

Gaming machines win per unit per day (8)

   $ 346     $ 565     $ 372     $ 483  

 

(3) 

Room statistics exclude rooms that were temporarily closed or provided to staff members due to the COVID-19 outbreak

(4) 

Average daily rate is calculated by dividing total room revenues including complimentary rooms (less service charges, if any) by total occupied rooms including complimentary rooms

(5) 

Revenue per available room is calculated by dividing total room revenues including complimentary rooms (less service charges, if any) by total rooms available

(6) 

Table games and gaming machines that were not in operation due to government mandated closures or social distancing measures in relation to the COVID-19 outbreak have been excluded

(7) 

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

(8) 

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

 

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