Segment Information

9 Months Ended

Sep. 30, 2013

Segment Information

17. Segment Information

The Company monitors its operations and evaluates earnings by reviewing the assets and operations of its Macau Operations and its Las Vegas Operations. The Company’s total assets by segment are as follows (amounts in thousands):

	September 30, 2013		December 31, 2012
Assets
Macau Operations	$	3,022,863	$	3,004,658
Las Vegas Operations		3,824,517		3,669,881
Corporate and other		1,222,248		602,055
	$	8,069,628	$	7,276,594

The Company’s segment information for its results of operations are as follows (amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Net revenues
Macau Operations	$	997,635		$	910,451		$	2,920,591		$	2,768,795
Las Vegas Operations		392,477			388,044			1,180,448			1,096,405
Total	$	1,390,112		$	1,298,495		$	4,101,039		$	3,865,200
Adjusted Property EBITDA (1)
Macau Operations	$	329,106		$	292,161		$	949,905		$	884,144
Las Vegas Operations		106,515			110,390			362,529			293,193
Total		435,621			402,551			1,312,434			1,177,337
Other operating costs and expenses
Pre-opening costs		706			—			1,592			—
Depreciation and amortization		93,325			94,274			279,061			280,142
Property charges and other		2,613			22,721			13,571			36,547
Corporate expenses and other		24,711			38,274			95,681			88,423
Equity in income from unconsolidated affiliates		288			190			879			911
Total		121,643			155,459			390,784			406,023
Operating income		313,978			247,092			921,650			771,314
Non-operating costs and expenses
Interest income		3,215			3,759			11,595			7,807
Interest expense, net of capitalized interest		(73,549	)		(75,082	)		(222,690	)		(211,017	)
(Decrease) increase in swap fair value		(3,525	)		—			13,131			4,930
Loss on extinguishment of debt		—			(19,663	)		(26,578	)		(24,491	)
Equity in income from unconsolidated affiliates		288			190			879			911
Other		1,123			1,249			4,385			936
Total		(72,448	)		(89,547	)		(219,278	)		(220,924	)
Income before income taxes		241,530			157,545			702,372			550,390
Benefit for income taxes		7,281			7,626			11,299			12,483
Net income	$	248,811		$	165,171		$	713,671		$	562,873

(1) “Adjusted Property EBITDA” is earnings before interest, taxes, depreciation, amortization, pre-opening costs, property charges and other, corporate expenses, intercompany golf course and water rights leases, stock-based compensation, and other non-operating income and expenses and includes equity in income from unconsolidated affiliates. Adjusted Property EBITDA is presented exclusively as a supplemental disclosure because management believes that it is widely used to measure the performance, and as a basis for valuation, of gaming companies. Management uses Adjusted Property EBITDA as a measure 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 Property EBITDA because it is used by some investors as a way to measure a company’s ability to incur and service debt, make capital expenditures and meet working capital requirements. Gaming companies have historically reported EBITDA as a supplement to financial measures in accordance with U.S. generally accepted accounting principles (“GAAP”). In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including Wynn Resorts, Limited, have historically excluded from their EBITDA calculations pre-opening expenses, property charges, corporate expenses and stock-based compensation that do not relate to the management of specific casino properties. However, Adjusted Property EBITDA should not be considered as an alternative to operating income as an indicator of the Company’s performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. Unlike net income, Adjusted Property EBITDA does not include depreciation or interest expense and therefore does not reflect current or future capital expenditures or the cost of capital. The Company has significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other non-recurring charges, which are not reflected in Adjusted Property EBITDA. Also, Wynn Resorts’ calculation of Adjusted Property EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited.