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, 2016

Commission File Number: 001-33178

 

 

MELCO CROWN 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  x    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):  ¨

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3–2(b) under the Securities Exchange Act of 1934.    Yes  ¨    No  x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3–2(b): 82– N/A

 

 

 


Table of Contents

MELCO CROWN ENTERTAINMENT LIMITED

Form 6–K

TABLE OF CONTENTS

Signature

 

Exhibit 99.1    


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 CROWN ENTERTAINMENT LIMITED
By:  

/s/ Geoffrey Davis

Name:   Geoffrey Davis, CFA
Title:   Chief Financial Officer

Date: November 3, 2016

 

3


Table of Contents

EXHIBIT INDEX

 

Exhibit No.

 

Description

Exhibit 99.1

  Unaudited Third Quarter 2016 Earnings and Quarterly Dividend
Unaudited Third Quarter 2016 Earnings and Quarterly Dividend

Exhibit 99.1

 

LOGO

FOR IMMEDIATE RELEASE

Melco Crown Entertainment Announces Unaudited Third Quarter 2016 Earnings and Declares Quarterly Dividend

Macau, Thursday, November 3, 2016 – Melco Crown Entertainment Limited (Nasdaq: MPEL) (“Melco Crown Entertainment” or the “Company” or “we”), a developer, owner and operator of casino gaming and entertainment casino resort facilities in Asia, today reported its unaudited financial results for the third quarter of 2016.

Net revenue for the third quarter of 2016 was US$1,152.6 million, representing an increase of approximately 22% from US$945.7 million for the comparable period in 2015. The increase in net revenue was primarily attributable to the net revenue generated by Studio City, which started operations in October 2015, and the increase in casino revenues at City of Dreams Manila, partially offset by lower casino revenues at City of Dreams in Macau and Altira Macau.

On a U.S. GAAP basis, operating income for the third quarter of 2016 was US$108.9 million, compared with operating income of US$34.1 million in the third quarter of 2015, representing an increase of 220%.

Adjusted property EBITDA(1) was US$289.2 million for the third quarter of 2016, as compared to Adjusted property EBITDA of US$237.3 million in the third quarter of 2015, representing an increase of 22%. The 22% year-over-year improvement in Adjusted property EBITDA was mainly attributable to the contribution from Studio City and City of Dreams Manila, partially offset by lower contribution from City of Dreams in Macau.

On a U.S. GAAP basis, net income attributable to Melco Crown Entertainment for the third quarter of 2016 was US$62.0 million, or US$0.13 per ADS, compared with net income attributable to Melco Crown Entertainment of US$33.2 million, or US$0.06 per ADS, in the third quarter of 2015. The net loss attributable to noncontrolling interests during the third quarter of 2016 of US$18.3 million was related to Studio City and City of Dreams Manila.

 

Melco Crown Entertainment Limited LOGO

Incorporated in the Cayman Islands with limited liability

LOGO

 

1


Mr. Lawrence Ho, Chairman and Chief Executive Officer of Melco Crown Entertainment, commented, “We delivered a 22% year-over-year increase in Adjusted property EBITDA during the third quarter of 2016, driven by greater contributions from Studio City and City of Dreams Manila.

“Studio City, which opened in October 2015, delivered a sequential increase of over 24% in mass table gross gaming revenues and over 110% in Adjusted property EBITDA, leveraging its unique non-gaming offerings to attract an increasingly Cotai-based mass market customer who are seeking a diverse and multi-faceted entertainment proposition.

“As trends stablize in Macau, Melco Crown Entertainment is positioned to benefit from Macau’s evolution into a mass-focused, multi-day stay destination. Our company continues to demonstrate its ongoing commitment to lead Macau in its transformation to the integrated resort model and away from the traditional gaming model through the development of diversified, mass-focused integrated resorts that deliver world-class entertainment and other non-gaming amenities which cater to a broad spectrum of customers.

“City of Dreams Manila delivered improvements in all gaming segments which, together with our company-wide focus on managing reinvestment costs and other operating expenses, resulted in an increase in Adjusted property EBITDA of approximately 85% on a year-over-year basis. City of Dreams Manila provides us with a diversified earnings stream which complements our operations in Macau.

“We believe that the Philippines gaming market will continue to show robust growth as the country’s economy rapidly expands, infrastructure continues to improve and the Philippine government retains its strong commitment to supporting domestic and international tourism.”

 

2


City of Dreams Third Quarter Results

For the quarter ended September 30, 2016, net revenue at City of Dreams was US$621.2 million compared to US$665.6 million in the third quarter of 2015. City of Dreams generated Adjusted EBITDA of US$170.4 million in the third quarter of 2016, representing a decrease of 11% compared to US$191.5 million in the comparable period of 2015. The decline in Adjusted EBITDA was primarily a result of lower mass market table games revenues and gaming machine revenues.

Rolling chip volume totaled US$10.6 billion for the third quarter of 2016 versus US$9.3 billion in the third quarter of 2015. The rolling chip win rate was 2.6% in the third quarter of 2016 versus 2.9% in the third quarter of 2015. The expected rolling chip win rate range is 2.7%-3.0%.

Mass market table games drop decreased to US$1,096.5 million compared with US$1,190.3 million in the third quarter of 2015. The mass market table games hold percentage was 34.5% in the third quarter of 2016 compared to 35.1% in the third quarter of 2015.

Gaming machine handle for the third quarter of 2016 was US$1,002.5 million, compared with US$1,211.3 million in the third quarter of 2015. The gaming machine win rate was 3.5% in the third quarter of 2016 versus 3.6% in the third quarter of 2015.

Total non-gaming revenue at City of Dreams in the third quarter of 2016 was US$75.6 million, compared with US$66.8 million in the third quarter of 2015.

Altira Macau Third Quarter Results

For the quarter ended September 30, 2016, net revenue at Altira Macau was US$128.8 million compared to US$140.3 million in the third quarter of 2015. Altira Macau generated Adjusted EBITDA of US$14.0 million in the third quarter of 2016 compared with Adjusted EBITDA of US$13.3 million in the third quarter of 2015.

Rolling chip volume totaled US$4.5 billion in the third quarter of 2016 versus US$5.2 billion in the third quarter of 2015. The rolling chip win rate was 3.2% in the third quarter of 2016 versus 3.0% in the third quarter of 2015. The expected rolling chip win rate range is 2.7%-3.0%.

In the mass market table games segment, drop totaled US$122.6 million in the third quarter of 2016, a decrease from US$156.7 million generated in the comparable period in 2015. The mass market table games hold percentage was 19.8% in the third quarter of 2016 compared with 19.4% in the third quarter of 2015.

Gaming machine handle for the third quarter of 2016 was US$8.5 million, compared with US$11.2 million in the third quarter of 2015. The gaming machine win rate was 6.9% in the third quarter of 2016 versus 5.9% in the third quarter of 2015.

Total non-gaming revenue at Altira Macau in the third quarter of 2016 was US$7.3 million compared with US$8.1 million in the third quarter of 2015.

 

3


Mocha Clubs Third Quarter Results

Net revenue from Mocha Clubs totaled US$31.8 million in the third quarter of 2016 as compared to US$36.1 million in the third quarter of 2015. Mocha Clubs generated US$7.0 million of Adjusted EBITDA in the third quarter of 2016 compared with US$8.5 million in the same period in 2015.

Gaming machine handle for the third quarter of 2016 was US$673.4 million, compared with US$724.2 million in the third quarter of 2015. The gaming machine win rate was 4.6% in the third quarter of 2016 versus 4.9% in the third quarter of 2015.

Studio City Third Quarter Results

Studio City started operations on October 27, 2015. For the quarter ended September 30, 2016, net revenue at Studio City was US$229.5 million. Studio City generated Adjusted EBITDA of US$52.7 million in the third quarter of 2016. This Adjusted EBITDA for Studio City operations is different from “Consolidated EBITDA” as defined in the US$1.4 billion Studio City senior secured facility agreement (“Studio City Loan Agreement”) for financial covenant testing purposes. For reference, in the second quarter of 2016, the Adjusted EBITDA for Studio City operations was US$24.6 million and the Consolidated EBITDA (as defined in the Studio City Loan Agreement) was US$17.8 million.

The Studio City Loan Agreement requires compliance with various minimum financial condition requirements, all of which are based on the Consolidated EBITDA or Cashflow (both as defined in the Studio City Loan Agreement). The first period for which compliance with these minimum financial conditions will be tested is the twelve-month period ending on March 31, 2017. In order for Studio City Company Limited, the borrower under the Studio City Loan Agreement, to meet such financial condition requirements for the twelve-month period ending on March 31, 2017, the ramp-up of Studio City operations must be significantly accelerated by March 31, 2017. The Company is not a guarantor under the Studio City Loan Agreement or the 8.50% senior notes due 2020 issued by Studio City Finance Limited.

Mass market table games drop was US$657.6 million and the mass market table games hold percentage was 25.5% in the third quarter of 2016.

Gaming machine handle was US$587.9 million and the gaming machine win rate was 3.9% in the third quarter of 2016.

Total non-gaming revenue at Studio City in the third quarter of 2016 was US$58.5 million.

City of Dreams Manila Third Quarter Results

For the quarter ended September 30, 2016, net revenue at City of Dreams Manila was US$131.0 million compared to US$91.7 million in the third quarter of 2015. City of Dreams Manila generated Adjusted EBITDA of US$45.0 million in the third quarter of 2016 compared to US$24.4 million in the comparable period of 2015. The year-over-year improvement in Adjusted EBITDA was primarily a result of increased casino revenues.

Rolling chip volume totaled US$1.6 billion for the third quarter of 2016 versus US$1.2 billion in the third quarter of 2015. The rolling chip win rate was 4.0% in the third quarter of 2016 versus 2.9% in the third quarter of 2015. The expected rolling chip win rate range is 2.7%-3.0%.

Mass market table games drop increased to US$146.8 million for the third quarter of 2016, compared with US$116.7 million in the third quarter of 2015. The mass market table games hold percentage was 26.9% in the third quarter of 2016 compared to 27.0% in the third quarter of 2015.

Gaming machine handle for the third quarter of 2016 was US$597.0 million, compared with US$508.4 million in the third quarter of 2015. The gaming machine win rate was 5.8% in the third quarter of 2016 versus 5.7% in the third quarter of 2015.

Total non-gaming revenue at City of Dreams Manila in the third quarter of 2016 was US$26.3 million, compared with US$26.4 million in the third quarter of 2015.

 

4


Other Factors Affecting Earnings

Total net non-operating expenses for the third quarter of 2016 were US$63.6 million, which mainly included interest expenses, net of capitalized interest, of US$56.4 million, other finance costs of US$14.5 million and net foreign exchange gain of US$5.2 million. We recorded US$6.6 million of capitalized interest during the third quarter of 2016, primarily relating to the development of the fifth hotel tower at City of Dreams.

The year-on-year increase of US$29.0 million in net non-operating expenses was primarily due to lower capitalized interest and capitalized amortization of deferred financing costs, partially offset by the net foreign exchange gain in the current quarter.

Depreciation and amortization costs of US$137.1 million were recorded in the third quarter of 2016, of which US$14.3 million was related to the amortization of our gaming subconcession and US$5.7 million was related to the amortization of land use rights.

Financial Position and Capital Expenditure

Total cash and bank balances as of September 30, 2016 totaled US$1.9 billion, including US$92.8 million of bank deposits with original maturity over three months and US$202.6 million of restricted cash, primarily related to Studio City. Total debt, net of unamortized deferred financing costs at the end of the third quarter of 2016, was US$3.8 billion.

Capital expenditures for the third quarter of 2016 were US$108.5 million, which predominantly related to various projects at City of Dreams, including the fifth hotel tower development.

Shareholders and potential investors of Melco Crown Entertainment are advised not to place undue reliance on the unaudited earnings and financial information of the Company for the third quarter of 2016. Shareholders and potential investors of the Company are advised to exercise caution in dealing in the securities of the Company.

 

5


Dividend Declaration

On November 3, 2016, our Board considered and approved the declaration and payment of a quarterly dividend of US$0.0126 per share (equivalent to US$0.0378 per ADS) for the third quarter of 2016 (the “Quarterly Dividend”). The Quarterly Dividend will be paid on or about Wednesday, November 30, 2016 to our shareholders whose names appear on the register of members of the Company at the close of business on Tuesday, November 15, 2016, being the record date for determination of entitlements to the Quarterly Dividend.

Other Information

In relation to the additional development project at Studio City, in October 2016, we filed an application with the Macau government requesting an extension of the development period under Studio City’s land concession contract. The application is currently under review by the Macau government.

 

6


Conference Call Information

Melco Crown Entertainment will hold a conference call to discuss its third quarter 2016 financial results on Thursday, November 3, 2016 at 8:30 a.m. Eastern Time (8:30 p.m. Hong Kong Time). To join the conference call, please use the dial-in details below:

 

US Toll Free

   1 866 519 4004

US Toll / International

   1 845 675 0437

HK Toll

   852 3018 6771

HK Toll Free

   800 906 601

UK Toll Free

   080 8234 6646

Australia Toll

   61 290 833 212

Australia Toll Free

   1 800 411 623

Philippines Toll Free

   1 800 1651 0607

Passcode

   MPEL

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

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

 

US Toll Free

   1 855 452 5696

US Toll / International

   1 646 254 3697

HK Toll Free

   800 963 117

Philippines Toll Free

   1 800 1612 0166

Conference ID

   1587898

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

 

7


Non-GAAP Financial Measures

 

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

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

 

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

 

8


About Melco Crown Entertainment Limited

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

Melco Crown Entertainment is strongly supported by its single largest shareholder, Melco International Development Limited (“Melco”) and its other major shareholder, Crown Resorts Limited (“Crown”). Melco is a listed company 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 Melco Crown Entertainment. Crown is a top-100 company listed on the Australian Securities Exchange and led by Mr. James Packer, who is the Deputy Chairman and a Non-executive Director of Melco Crown Entertainment.

For investment community, please contact:

Ross Dunwoody

Vice President, Investor Relations

Tel: +853 8868 7575 or +852 2598 3689

Email: rossdunwoody@melco-crown.com

For media enquiries, please contact:

Maggie Ma

Senior Vice President, Corporate Communications and Public Relations

Tel: +853 8868 3767 or +852 3151 3767

Email: maggiema@melco-crown.com

 

9


Melco Crown Entertainment Limited and Subsidiaries

Condensed Consolidated Statements of Operations

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

 

     Three Months Ended     Nine Months Ended  
     September 30,     September 30,  
     2016     2015     2016     2015  
     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

OPERATING REVENUES

        

Casino

   $ 1,060,035      $ 900,468      $ 3,076,823      $ 2,786,170   

Rooms

     68,082        45,577        195,951        138,591   

Food and beverage

     47,240        30,324        129,611        89,213   

Entertainment, retail and others

     54,063        28,360        145,118        76,063   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross revenues

     1,229,420        1,004,729        3,547,503        3,090,037   

Less: promotional allowances

     (76,867     (58,999     (220,985     (173,267
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     1,152,553        945,730        3,326,518        2,916,770   
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING COSTS AND EXPENSES

        

Casino

     (733,997     (621,333     (2,154,024     (1,962,154

Rooms

     (8,537     (5,475     (24,958     (15,341

Food and beverage

     (13,074     (8,339     (47,569     (24,024

Entertainment, retail and others

     (27,865     (18,237     (82,491     (51,528

General and administrative

     (112,065     (91,373     (326,081     (273,733

Payments to the Philippine Parties

     (9,066     (4,721     (24,475     (11,994

Pre-opening costs

     (1,489     (46,388     (2,212     (115,671

Development costs

     —          (36     (7     (57

Amortization of gaming subconcession

     (14,309     (14,309     (42,928     (42,928

Amortization of land use rights

     (5,704     (16,117     (17,112     (48,353

Depreciation and amortization

     (117,059     (83,833     (354,704     (249,400

Property charges and others

     (451     (1,500     (2,809     (5,339
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (1,043,616     (911,661     (3,079,370     (2,800,522
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING INCOME

     108,937        34,069        247,148        116,248   
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-OPERATING INCOME (EXPENSES)

        

Interest income

     1,210        4,237        4,213        10,771   

Interest expenses, net of capitalized interest

     (56,378     (23,244     (167,397     (74,214

Other finance costs

     (14,549     (9,547     (42,452     (31,839

Foreign exchange gain (loss), net

     5,245        (6,456     10,275        (3,537

Other income, net

     917        501        2,636        1,582   

Loss on extinguishment of debt

     —          —          —          (481

Costs associated with debt modification

     —          (47     —          (592
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating expenses, net

     (63,555     (34,556     (192,725     (98,310
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) BEFORE INCOME TAX

     45,382        (487     54,423        17,938   

INCOME TAX EXPENSE

     (1,662     (387     (4,016     (765
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

     43,720        (874     50,407        17,173   

NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

     18,323        34,077        82,223        100,913   
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO MELCO CROWN
ENTERTAINMENT LIMITED

   $ 62,043      $ 33,203      $ 132,630      $ 118,086   
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO MELCO CROWN
ENTERTAINMENT LIMITED PER SHARE:

        

Basic

   $ 0.042      $ 0.021      $ 0.086      $ 0.073   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.042      $ 0.020      $ 0.086      $ 0.073   
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO MELCO CROWN
ENTERTAINMENT LIMITED PER ADS:

        

Basic

   $ 0.127      $ 0.062      $ 0.259      $ 0.219   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.126      $ 0.061      $ 0.258      $ 0.218   
  

 

 

   

 

 

   

 

 

   

 

 

 

WEIGHTED AVERAGE SHARES USED IN NET INCOME
ATTRIBUTABLE TO MELCO CROWN ENTERTAINMENT LIMITED
PER SHARE CALCULATION:

        

Basic

     1,463,450,519        1,617,905,348        1,534,527,893        1,617,033,893   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     1,471,515,182        1,627,096,350        1,542,641,243        1,627,249,911   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

10


Melco Crown Entertainment Limited and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands of U.S. dollars)

 

                                                     
     September 30,
2016
    December 31,
2015
 
     (Unaudited)     (Note)  

ASSETS

    

CURRENT ASSETS

    

Cash and cash equivalents

   $ 1,631,447      $ 1,611,026   

Bank deposits with original maturity over three months

     92,819        724,736   

Restricted cash

     202,600        317,118   

Accounts receivable, net

     189,307        271,627   

Amounts due from affiliated companies

     1,394        1,175   

Amount due from a shareholder

     164        —     

Deferred tax assets

     —          19   

Income tax receivable

     —          62   

Inventories

     33,667        33,074   

Prepaid expenses and other current assets

     69,507        61,324   
  

 

 

   

 

 

 

Total current assets

     2,220,905        3,020,161   
  

 

 

   

 

 

 

PROPERTY AND EQUIPMENT, NET

     5,714,021        5,760,229   

GAMING SUBCONCESSION, NET

     327,629        370,557   

INTANGIBLE ASSETS

     4,220        4,220   

GOODWILL

     81,915        81,915   

LONG-TERM PREPAYMENTS, DEPOSITS AND OTHER ASSETS

     170,027        192,012   

DEFERRED TAX ASSETS

     121        83   

LAND USE RIGHTS, NET

     816,020        833,132   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 9,334,858      $ 10,262,309   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

CURRENT LIABILITIES

    

Accounts payable

   $ 17,783      $ 15,588   

Accrued expenses and other current liabilities

     1,299,913        1,056,850   

Income tax payable

     5,242        3,487   

Capital lease obligations, due within one year

     31,036        29,792   

Current portion of long-term debt, net

     201,911        102,836   

Amount due to ultimate holding company

     20        —     

Amounts due to affiliated companies

     2,770        2,464   
  

 

 

   

 

 

 

Total current liabilities

     1,558,675        1,211,017   
  

 

 

   

 

 

 

LONG-TERM DEBT, NET

     3,583,260        3,712,396   

OTHER LONG-TERM LIABILITIES

     46,868        80,962   

DEFERRED TAX LIABILITIES

     54,934        55,598   

CAPITAL LEASE OBLIGATIONS, DUE AFTER ONE YEAR

     269,112        270,477   

SHAREHOLDERS’ EQUITY

    

Ordinary shares

     14,759        16,309   

Treasury shares

     (124     (275

Additional paid-in capital

     2,776,599        3,075,459   

Accumulated other comprehensive losses

     (23,248     (21,934

Retained earnings

     546,090        1,270,074   
  

 

 

   

 

 

 

Total Melco Crown Entertainment Limited shareholders’ equity

     3,314,076        4,339,633   

Noncontrolling interests

     507,933        592,226   
  

 

 

   

 

 

 

Total equity

     3,822,009        4,931,859   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 9,334,858      $ 10,262,309   
  

 

 

   

 

 

 

 

Note:   The Company adopted the new guidance on simplifying the presentation of debt issuance costs issued by Financial Accounting Standards Board on a retrospective basis. As a result, debt issuance costs of $143,804 related to the Company’s non-current portion of long-term debt (excluding revolving credit facilities) were reclassified from deferred financing costs, net to a direct reduction of the long-term debt, net; debt issuance costs of $3,669 related to the Company’s current portion of long-term debt (excluding revolving credit facilities) were reclassified from deferred financing costs, net to a direct reduction of the current portion of long-term debt, net; and debt issuance costs of $32,335 related to the Company’s revolving credit facilities were reclassified from deferred financing costs, net to long-term prepayments, deposits and other assets in the accompanying condensed consolidated balance sheet as of December 31, 2015.

 

11


Melco Crown Entertainment Limited and Subsidiaries

Reconciliation of Net Income Attributable to Melco Crown Entertainment Limited to

Adjusted Net Income Attributable to Melco Crown Entertainment Limited

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

 

    

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 
     2016     2015     2016     2015  
     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Net Income Attributable to Melco Crown Entertainment Limited

   $ 62,043      $ 33,203      $ 132,630      $ 118,086   

Net Gain on Disposal of Property and Equipment to Belle Corporation

     —          —          (8,134     —     

Pre-opening Costs

     1,489        46,388        2,212        115,671   

Development Costs

     —          36        7        57   

Property Charges and Others

     451        1,500        2,809        5,339   

Loss on Extinguishment of Debt

     —          —          —          481   

Costs Associated with Debt Modification

     —          47        —          592   

Income Tax Impact on Adjustments

     —          (79     (14     (250

Noncontrolling Interests Impact on Adjustments

     (1,181     (21,165     344        (48,874
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income Attributable to Melco Crown Entertainment Limited

   $ 62,802      $ 59,930      $ 129,854      $ 191,102   
  

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED NET INCOME ATTRIBUTABLE TO
MELCO CROWN ENTERTAINMENT
LIMITED PER SHARE:

        

Basic

   $ 0.043      $ 0.037      $ 0.085      $ 0.118   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.043      $ 0.037      $ 0.084      $ 0.117   
  

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED NET INCOME ATTRIBUTABLE TO
MELCO CROWN ENTERTAINMENT
LIMITED PER ADS:

        

Basic

   $ 0.129      $ 0.111      $ 0.254      $ 0.355   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.128      $ 0.110      $ 0.253      $ 0.352   
  

 

 

   

 

 

   

 

 

   

 

 

 

WEIGHTED AVERAGE SHARES USED IN
ADJUSTED NET INCOME ATTRIBUTABLE
TO MELCO CROWN ENTERTAINMENT
LIMITED PER SHARE CALCULATION:

        

Basic

     1,463,450,519        1,617,905,348        1,534,527,893        1,617,033,893   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     1,471,515,182        1,627,096,350        1,542,641,243        1,627,249,911   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

12


Melco Crown Entertainment Limited and Subsidiaries

Reconciliation of Operating Income (Loss) to

Adjusted EBITDA and Adjusted Property EBITDA

(In thousands of U.S. dollars)

 

    Three Months Ended September 30, 2016  
    Altira
Macau
    Mocha     City of
Dreams
    Studio
City
    City of
Dreams
Manila
    Corporate
and Others
    Total  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Operating Income (Loss)

  $ 8,284      $ 3,948      $ 125,753      $ 5,913      $ 13,098      $ (48,059   $ 108,937   

Payments to the Philippine Parties

    —          —          —          —          9,066        —          9,066   

Land Rent to Belle Corporation

    —          —          —          —          838        —          838   

Pre-opening Costs

    —          —          6        1,483        —          —          1,489   

Depreciation and Amortization

    5,718        3,038        43,888        44,794        22,038        17,596        137,072   

Share-based Compensation

    45        47        712        304        (61     3,417        4,464   

Property Charges and Others

    —          —          —          212        33        206        451   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

    14,047        7,033        170,359        52,706        45,012        (26,840     262,317   

Corporate and Others Expenses

    —          —          —          —          —          26,840        26,840   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

  $ 14,047      $ 7,033      $ 170,359      $ 52,706      $ 45,012      $ —        $ 289,157   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Three Months Ended September 30, 2015  
    Altira
Macau
    Mocha     City of
Dreams
    Studio
City
    City of
Dreams
Manila
    Corporate
and Others
    Total  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Operating Income (Loss)

  $ 5,654      $ 5,423      $ 139,444      $ (57,785   $ (7,129   $ (51,538   $ 34,069   

Payments to the Philippine Parties

    —          —          —          —          4,721        —          4,721   

Land Rent to Belle Corporation

    —          —          —          —          854        —          854   

Pre-opening Costs

    —          —          9        45,395        (145     1,129        46,388   

Development Costs

    —          —          —          —          —          36        36   

Depreciation and Amortization

    7,608        3,036        51,491        10,946        24,173        17,005        114,259   

Share-based Compensation

    29        22        546        101        1,900        3,245        5,843   

Property Charges and Others

    —          —          —          1,016        —          484        1,500   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

    13,291        8,481        191,490        (327     24,374        (29,639     207,670   

Corporate and Others Expenses

    —          —          —          —          —          29,639        29,639   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

  $ 13,291      $ 8,481      $ 191,490      $ (327   $ 24,374      $ —        $ 237,309   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

13


Melco Crown Entertainment Limited and Subsidiaries

Reconciliation of Adjusted EBITDA and Adjusted Property EBITDA to

Net Income Attributable to Melco Crown Entertainment Limited

(In thousands of U.S. dollars)

 

     Three Months Ended
September 30,
 
     2016     2015  
     (Unaudited)     (Unaudited)  

Adjusted Property EBITDA

   $ 289,157      $ 237,309   

Corporate and Others Expenses

     (26,840     (29,639
  

 

 

   

 

 

 

Adjusted EBITDA

     262,317        207,670   

Payments to the Philippine Parties

     (9,066     (4,721

Land Rent to Belle Corporation

     (838     (854

Pre-opening Costs

     (1,489     (46,388

Development Costs

     —          (36

Depreciation and Amortization

     (137,072     (114,259

Share-based Compensation

     (4,464     (5,843

Property Charges and Others

     (451     (1,500

Interest and Other Non-Operating Expenses, Net

     (63,555     (34,556

Income Tax Expense

     (1,662     (387
  

 

 

   

 

 

 

Net Income (Loss)

     43,720        (874

Net Loss Attributable to Noncontrolling Interests

     18,323        34,077   
  

 

 

   

 

 

 

Net Income Attributable to Melco Crown Entertainment Limited

   $ 62,043      $ 33,203   
  

 

 

   

 

 

 

 

14


Melco Crown Entertainment Limited and Subsidiaries

Reconciliation of Operating Income (Loss) to

Adjusted EBITDA and Adjusted Property EBITDA

(In thousands of U.S. dollars)

 

     Nine Months Ended September 30, 2016  
     Altira
Macau
    Mocha      City of
Dreams
     Studio
City
    City of
Dreams
Manila
    Corporate
and Others
    Total  
     (Unaudited)     (Unaudited)      (Unaudited)      (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Operating (Loss) Income

   $ (15,681   $ 9,101       $ 420,191       $ (38,472   $ 18,788      $ (146,779   $ 247,148   

Payments to the Philippine Parties

     —          —           —           —          24,475        —          24,475   

Land Rent to Belle Corporation

     —          —           —           —          2,524        —          2,524   

Net Gain on Disposal of Property and Equipment to
Belle Corporation

     —          —           —           —          (8,134     —          (8,134

Pre-opening Costs

     —          —           308         1,904        —          —          2,212   

Development Costs

     —          —           —           —          —          7        7   

Depreciation and Amortization

     17,298        9,124         131,171         134,259        69,946        52,946        414,744   

Share-based Compensation

     15        129         1,753         746        1,970        10,135        14,748   

Property Charges and Others

     197        —           191         894        567        960        2,809   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     1,829        18,354         553,614         99,331        110,136        (82,731     700,533   

Corporate and Others Expenses

     —          —           —           —          —          82,731        82,731   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

   $ 1,829      $ 18,354       $ 553,614       $ 99,331      $ 110,136      $ —        $ 783,264   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
     Nine Months Ended September 30, 2015  
     Altira
Macau
    Mocha      City of
Dreams
     Studio
City
    City of
Dreams
Manila
    Corporate
and Others
    Total  
     (Unaudited)     (Unaudited)      (Unaudited)      (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Operating Income (Loss)

   $ 4,308      $ 14,474       $ 448,937       $ (114,284   $ (78,826   $ (158,361   $ 116,248   

Payments to the Philippine Parties

     —          —           —           —          11,994        —          11,994   

Land Rent to Belle Corporation

     —          —           —           —          2,634        —          2,634   

Pre-opening Costs

     —          —           388         79,285        27,907        8,091        115,671   

Development Costs

     —          —           —           —          —          57        57   

Depreciation and Amortization

     22,196        9,312         155,232         32,738        70,893        50,310        340,681   

Share-based Compensation

     88        64         1,414         203        5,284        8,571        15,624   

Property Charges and Others

     —          —           301         1,016        —          4,022        5,339   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     26,592        23,850         606,272         (1,042     39,886        (87,310     608,248   

Corporate and Others Expenses

     —          —           —           —          —          87,310        87,310   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Property EBITDA

   $ 26,592      $ 23,850       $ 606,272       $ (1,042   $ 39,886      $ —        $ 695,558   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

15


Melco Crown Entertainment Limited and Subsidiaries

Reconciliation of Adjusted EBITDA and Adjusted Property EBITDA to

Net Income Attributable to Melco Crown Entertainment Limited

(In thousands of U.S. dollars)

 

     Nine Months Ended
September 30,
 
     2016     2015  
     (Unaudited)     (Unaudited)  

Adjusted Property EBITDA

   $ 783,264      $ 695,558   

Corporate and Others Expenses

     (82,731     (87,310
  

 

 

   

 

 

 

Adjusted EBITDA

     700,533        608,248   

Payments to the Philippine Parties

     (24,475     (11,994

Land Rent to Belle Corporation

     (2,524     (2,634

Net Gain on Disposal of Property and Equipment to Belle Corporation

     8,134        —     

Pre-opening Costs

     (2,212     (115,671

Development Costs

     (7     (57

Depreciation and Amortization

     (414,744     (340,681

Share-based Compensation

     (14,748     (15,624

Property Charges and Others

     (2,809     (5,339

Interest and Other Non-Operating Expenses, Net

     (192,725     (98,310

Income Tax Expense

     (4,016     (765
  

 

 

   

 

 

 

Net Income

     50,407        17,173   

Net Loss Attributable to Noncontrolling Interests

     82,223        100,913   
  

 

 

   

 

 

 

Net Income Attributable to Melco Crown Entertainment Limited

   $ 132,630      $ 118,086   
  

 

 

   

 

 

 

 

16


Melco Crown Entertainment Limited and Subsidiaries

Supplemental Data Schedule

 

     Three Months
Ended September 30,
    Nine Months Ended
September 30,
 
     2016     2015     2016     2015  

Room Statistics:

        

Altira Macau

        

Average daily rate (3)

   $ 200      $ 200      $ 204      $ 212   

Occupancy per available room

     96     99     94     99

Revenue per available room (4)

   $ 192      $ 197      $ 192      $ 209   

City of Dreams

        

Average daily rate (3)

   $ 199      $ 196      $ 198      $ 200   

Occupancy per available room

     97     99     95     99

Revenue per available room (4)

   $ 193      $ 195      $ 189      $ 198   

Studio City

        

Average daily rate (3)

   $ 137        N/A      $ 135        N/A   

Occupancy per available room

     99     N/A        97     N/A   

Revenue per available room (4)

   $ 136        N/A      $ 131        N/A   

City of Dreams Manila

        

Average daily rate (3)

   $ 158      $ 168      $ 161      $ 200   

Occupancy per available room

     92     88     90     85

Revenue per available room (4)

   $ 146      $ 148      $ 144      $ 170   

Other Information:

        

Altira Macau

        

Average number of table games

     117        127        123        124   

Average number of gaming machines

     61        53        62        56   

Table games win per unit per day (5)

   $ 15,745      $ 15,796      $ 13,448      $ 17,685   

Gaming machines win per unit per day (6)

   $ 104      $ 136      $ 93      $ 101   

City of Dreams

        

Average number of table games

     489        493        496        498   

Average number of gaming machines

     1,037        1,147        1,054        1,164   

Table games win per unit per day (5)

   $ 14,471      $ 15,041      $ 14,931      $ 16,424   

Gaming machines win per unit per day (6)

   $ 363      $ 417      $ 355      $ 417   

Studio City

        

Average number of table games

     245        N/A        245        N/A   

Average number of gaming machines

     1,098        N/A        1,095        N/A   

Table games win per unit per day (5)

   $ 7,446        N/A      $ 6,358        N/A   

Gaming machines win per unit per day (6)

   $ 229        N/A      $ 186        N/A   

City of Dreams Manila

        

Average number of table games

     262        276        269        258   

Average number of gaming machines

     1,656        1,721        1,646        1,726   

Table games win per unit per day (5)

   $ 4,237      $ 2,646      $ 3,723      $ 1,946   

Gaming machines win per unit per day (6)

   $ 226      $ 184      $ 204      $ 171   

 

(3) Average daily rate is calculated by dividing total room revenue including the retail value of promotional allowances by total occupied rooms including complimentary rooms
(4) Revenue per available room is calculated by dividing total room revenue including the retail value of promotional allowances by total rooms available
(5) Table games win per unit per day is shown before discounts and commissions
(6) Gaming machines win per unit per day is shown before deducting cost for slot points

 

17