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Melco Announces Unaudited Second Quarter 2018 Earnings and Increase in Quarterly Dividend to US$0.14505 per ADS

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MACAU, July 24, 2018 (GLOBE NEWSWIRE) -- Melco Resorts & Entertainment Limited (NASDAQ:MLCO) ("Melco" or the "Company"), a developer, owner and operator of casino gaming and entertainment casino resort facilities in Asia, today reported its unaudited financial results for the second quarter of 2018.

Net revenue for the second quarter of 2018 was US$1,228.6 million, representing a decrease of approximately 5% from US$1,298.2 million reported for the comparable period in 2017. The decrease in net revenue was primarily attributable to higher commissions reported as a reduction in revenue upon the Company's adoption of a new revenue recognition standard issued by the Financial Accounting Standards Board (the "New Revenue Standard"), partially offset by higher group-wide gross gaming revenues. The Company adopted the New Revenue Standard using the modified retrospective method from January 1, 2018. Results for the periods beginning on or after January 1, 2018 are presented under the New Revenue Standard, while prior year amounts are not adjusted and continue to be reported in accordance with the previous basis. Under the previous basis, before the adoption of the New Revenue Standard, net revenue for the second quarter of 2018 would have been US$1,337.4 million, which would have represented an increase of approximately 3% from the US$1,298.2 million for the comparable period in 2017. 

Operating income for the second quarter of 2018 was US$118.1 million, compared with operating income of US$127.4 million in the second quarter of 2017, representing a decrease of 7%.  

Adjusted property EBITDA(1) was US$355.5 million for the second quarter of 2018, as compared to Adjusted property EBITDA of US$329.5 million in the second quarter of 2017, representing an increase of 8%. The year-on-year improvement in Adjusted property EBITDA was mainly attributable to the higher contribution from City of Dreams Manila and Altira Macau.

Net income attributable to Melco Resorts & Entertainment Limited for the second quarter of 2018 was US$57.3 million, or US$0.12 per ADS, compared with US$36.5 million, or US$0.08 per ADS, in the second quarter of 2017. The net loss attributable to noncontrolling interests during the second quarters of 2018 and 2017 were US$4.1 million and US$8.0 million, respectively, which were related to Studio City and City of Dreams Manila.

Mr. Lawrence Ho, our Chairman and Chief Executive Officer, commented, "I am delighted to announce the recent successful opening of Morpheus, which we believe is the most luxurious integrated resort in the world. Named after the Greek god of dreams, this US$1.1 billion iconic building is the latest addition to the Phase III development of City of Dreams, exemplifying Melco's position as a pioneer and innovator in premium travel, leisure and entertainment.

"Morpheus is the world's first ever free-form exoskeleton high-rise, designed by legendary architect - the late Dame Zaha Hadid. With a total of 772 guest rooms, suites and villas, a sky pool situated 130 meters above ground, the world's most fashion-forward brands and retail options, an in-house Spa Butler concept, as well as VIP gaming and VIP villas on the top floors, Morpheus offers guests world-class experiences that exceed 5-star hotel standards.

"Morpheus offers best-of-the-best dining options including Alain Ducasse at Morpheus and Voyages by Alain Ducasse, the legendary French chef's restaurant inspired by his travels. Taste buds will also be awakened by Yi, which offers regional Chinese cuisine served omakase-style, while the king of modern patisserie, Pierre Hermé, has created a sleek lounge serving the finest delicacies never seen before in Asia.  Lastly, Morpheus also features a living gallery with original contemporary art by internationally renowned artists KAWS, Jean-Michel Othoniel and Thilo Heinzmann.

"The opening of Morpheus marks a new beginning for City of Dreams. Our premium portfolio now includes the sleek, modern Morpheus; the chic, classic Chinese Nüwa; and the upcoming hotel Libertine, the funky rebel, which starts development in the second half of 2019. They all offer guests premium and luxury experiences but each has its own distinctive style and design while maintaining the same focus on quality and attention to detail.

"At Studio City, we are embarking on a series of property upgrades to refine the entertainment offerings, which include an incredible new stunt show created with our new partner Stufish, a London-based world-renowned entertainment architect, Asia's largest Virtual Reality zone and a fantastic new street of food and beverage.

"The Board has, after evaluating the Company's current liquidity position and future expected capital needs, decided to increase the quarterly cash dividend by 7%.

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

For the quarter ended June 30, 2018, net revenue at City of Dreams was US$577.8 million compared to US$644.6 million in the second quarter of 2017. City of Dreams generated Adjusted EBITDA of US$171.5 million in the second quarter of 2018 compared with Adjusted EBITDA of US$175.3 million in the second quarter of 2017.

Rolling chip volume totaled US$10.5 billion for the second quarter of 2018 versus US$12.2 billion in the second quarter of 2017. The rolling chip win rate was 2.9% for both quarters ended June 30, 2018 and 2017. The expected rolling chip win rate range is 2.7%-3.0%.

Mass market table games drop increased to US$1,182.4 million in the second quarter of 2018 compared with US$1,073.2 million in the second quarter of 2017. The mass market table games hold percentage was 28.4% in the second quarter of 2018 compared to 32.4% in the second quarter of 2017.

Gaming machine handle for the second quarter of 2018 was US$1,116.9 million, compared with US$937.9 million in the second quarter of 2017. The gaming machine win rate was 5.1% in the second quarter of 2018 versus 4.0% in the second quarter of 2017.

Total non-gaming revenue at City of Dreams in the second quarter of 2018 was US$77.0 million, compared with US$74.6 million in the second quarter of 2017.

Altira Macau Second Quarter Results

For the quarter ended June 30, 2018, net revenue at Altira Macau was US$123.1 million compared to US$107.6 million in the second quarter of 2017. Altira Macau generated Adjusted EBITDA of US$18.3 million in the second quarter of 2018 compared with Adjusted EBITDA of US$5.1 million in the second quarter of 2017. The year-on-year increase in Adjusted EBITDA was primarily a result of better performance in all gaming segments.

Rolling chip volume totaled US$4.8 billion in the second quarter of 2018 versus US$4.0 billion in the second quarter of 2017. The rolling chip win rate was 3.6% in the second quarter of 2018 versus 3.3% in the second quarter of 2017. The expected rolling chip win rate range is 2.7%-3.0%.

In the mass market table games segment, drop totaled US$131.9 million in the second quarter of 2018, representing an increase from US$91.9 million generated in the comparable period in 2017. The mass market table games hold percentage was 19.7% in the second quarter of 2018 compared with 15.2% in the second quarter of 2017.

Gaming machine handle for the second quarter of 2018 was US$30.0 million, compared with US$7.6 million in the second quarter of 2017. The increase was primarily due to an increase in average number of gaming machines to 129 in the second quarter of 2018, compared to 56 in the second quarter of 2017. The gaming machine win rate was 6.3% in the second quarter of 2018 versus 6.0% in the second quarter of 2017.

Total non-gaming revenue at Altira Macau in the second quarter of 2018 was US$6.7 million, compared with US$6.1 million in the second quarter of 2017.

Mocha Clubs Second Quarter Results

Net revenue from Mocha Clubs totaled US$28.0 million in the second quarter of 2018 as compared to US$29.3 million in the second quarter of 2017. Mocha Clubs generated US$5.2 million of Adjusted EBITDA in the second quarter of 2018 compared with US$5.6 million in the same period in 2017.

Gaming machine handle for the second quarter of 2018 was US$618.5 million, compared with US$592.4 million in the second quarter of 2017. The gaming machine win rate was 4.5% in the second quarter of 2018 versus 4.8% in the second quarter of 2017.

Studio City Second Quarter Results

For the quarter ended June 30, 2018, net revenue at Studio City was US$314.1 million compared to US$332.1 million in the second quarter of 2017. Studio City generated Adjusted EBITDA of US$73.2 million in the second quarter of 2018 compared with Adjusted EBITDA of US$80.7 million in the second quarter of 2017. The decline in Adjusted EBITDA was primarily a result of poorer performance in the rolling chip segment and lower non-gaming revenue, partially offset by better performance in the mass market table games segment.

Rolling chip volume totaled US$6.1 billion for the second quarter of 2018 versus US$4.7 billion in the second quarter of 2017. The rolling chip win rate was 2.7% in the second quarter of 2018 versus 3.3% in the second quarter of 2017. The expected rolling chip win rate range is 2.7%-3.0%.

Mass market table games drop increased to US$814.3 million in the second quarter of 2018 compared with US$661.4 million in the second quarter of 2017. The mass market table games hold percentage was 24.5% in the second quarter of 2018 compared to 26.8% in the second quarter of 2017.

Gaming machine handle for the second quarter of 2018 was US$614.9 million, compared with US$502.9 million in the second quarter of 2017. The gaming machine win rate was 3.4% in the second quarter of 2018 versus 3.7% in the second quarter of 2017.

Total non-gaming revenue at Studio City in the second quarter of 2018 was US$44.3 million, compared with US$48.6 million in the second quarter of 2017.

City of Dreams Manila Second Quarter Results

For the quarter ended June 30, 2018, net revenue at City of Dreams Manila was US$173.9 million compared to US$176.2 million in the second quarter of 2017. City of Dreams Manila generated Adjusted EBITDA of US$87.3 million in the second quarter of 2018 compared to US$62.8 million in the comparable period of 2017. The year-on-year increase in Adjusted EBITDA was primarily a result of better performance in all gaming segments.

Rolling chip volume totaled US$3.0 billion for the second quarter of 2018 versus US$3.2 billion in the second quarter of 2017. The rolling chip win rate was 3.7% in the second quarter of 2018 versus 3.5% in the second quarter of 2017. The expected rolling chip win rate range is 2.7%-3.0%.

Mass market table games drop increased to US$196.9 million for the second quarter of 2018, compared with US$169.8 million in the second quarter of 2017. The mass market table games hold percentage was 29.4% in the second quarter of 2018 compared to 28.5% in the second quarter of 2017.

Gaming machine handle for the second quarter of 2018 was US$855.9 million, compared with US$759.0 million in the second quarter of 2017. The gaming machine win rate was 5.9% for both quarters ended June 30, 2018 and 2017.

Total non-gaming revenue at City of Dreams Manila in the second quarter of 2018 was US$29.2 million, compared with US$28.1 million in the second quarter of 2017.
     
Other Factors Affecting Earnings

Total net non-operating expenses for the second quarter of 2018 were US$62.5 million, which mainly included interest expenses, net of capitalized interest, of US$61.4 million. We recorded US$10.0 million of capitalized interest during the second quarter of 2018 relating to the development of Morpheus at City of Dreams.

Depreciation and amortization costs of US$131.8 million were recorded in the second quarter of 2018 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 Expenditures

Total cash and bank balances as of June 30, 2018 were US$1.5 billion, including US$25.0 million of bank deposits with original maturities over three months and US$47.6 million of restricted cash, primarily related to Studio City. Total debt, net of unamortized deferred financing costs at the end of the second quarter of 2018, was US$3.5 billion.

Capital expenditures for the second quarter of 2018 were US$165.5 million, which predominantly related to Morpheus and other various projects at City of Dreams.

Amendment of Dividend Policy

To reaffirm Melco's commitment to returning surplus capital to shareholders, our Board, after evaluating Melco's current liquidity position and future expected capital needs, has amended its quarterly dividend policy from one targeting a quarterly cash dividend payment of US$0.045 per ordinary share (equivalent to US$0.135 per ADS, each representing three ordinary shares) of the Company, to one targeting a quarterly cash dividend payment of US$0.04835 per ordinary share (equivalent to US$0.14505 per ADS) of the Company.

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

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

Dividend Declaration

On July 24, 2018, our Board considered and approved the declaration and payment of a quarterly dividend of US$0.04835 per ordinary share (equivalent to US$0.14505 per ADS) for the second quarter of 2018 (the "Quarterly Dividend"). The Quarterly Dividend will be paid on or about August 15, 2018 to our shareholders whose names appear on the register of members of the Company at the close of business on August 6, 2018, being the record date for determination of entitlements to the Quarterly Dividend.

Conference Call Information

Melco Resorts & Entertainment Limited will hold a conference call to discuss its second quarter 2018 financial results on Tuesday, July 24, 2018 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
Japan Toll 81 3 4503 6012
Japan Toll Free 012 092 5376
UK Toll Free 080 8234 6646
Australia Toll 61 290 833 212
Australia Toll Free 1 800 411 623
Philippines Toll Free 1 800 1612 0306
   
Passcode MLCO

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

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

US Toll Free 1 855 452 5696
US Toll / International  1 646 254 3697
HK Toll Free 800 963 117
Japan Toll 81 3 4580 6717
Japan Toll Free 012 095 9034
Philippines Toll Free 1 800 1612 0166
   
Conference ID 2498084

Safe Harbor Statement

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

Non-GAAP Financial Measures

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

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

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

About Melco Resorts & Entertainment Limited

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

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

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

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

                           
Melco Resorts & Entertainment Limited and Subsidiaries    
Condensed Consolidated Statements of Operations    
(In thousands of U.S. dollars, except share and per share data)    
                           
  Three Months Ended   Six Months Ended    
  June 30,   June 30,    
  2018    2017    2018    2017     
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)    
                           
OPERATING REVENUES                          
Casino  $    1,069,525      $    1,213,968      $    2,223,278      $    2,402,977      
Rooms     67,795         65,589         135,366         132,026      
Food and beverage     46,582         43,684         94,830         88,510      
Entertainment, retail and other     44,728         49,600         88,304         102,482      
Gross revenues     1,228,630         1,372,841         2,541,778         2,725,995      
Less: promotional allowances     -          (74,621 )       -          (150,555 )    
Net revenues     1,228,630         1,298,220         2,541,778         2,575,440      
                           
OPERATING COSTS AND EXPENSES                          
Casino     (710,665 )       (844,698 )       (1,464,714 )       (1,647,431 )    
Rooms     (17,142 )       (8,025 )       (32,968 )       (16,215 )    
Food and beverage     (36,950 )       (13,622 )       (74,037 )       (28,242 )    
Entertainment, retail and other     (22,404 )       (21,644 )       (45,366 )       (44,052 )    
General and administrative     (126,591 )       (122,786 )       (234,817 )       (233,581 )    
Payments to the Philippine Parties     (23,617 )       (13,822 )       (34,994 )       (29,261 )    
Pre-opening costs     (28,765 )       (525 )       (31,113 )       (1,000 )    
Development costs     (3,018 )       (3,068 )       (6,907 )       (4,085 )    
Amortization of gaming subconcession     (14,310 )       (14,309 )       (28,619 )       (28,618 )    
Amortization of land use rights     (5,704 )       (5,704 )       (11,408 )       (11,408 )    
Depreciation and amortization     (111,747 )       (115,510 )       (221,434 )       (233,079 )    
Property charges and other     (9,637 )       (7,063 )       (16,183 )       (12,527 )    
Total operating costs and expenses     (1,110,550 )       (1,170,776 )       (2,202,560 )       (2,289,499 )    
OPERATING INCOME     118,080         127,444         339,218         285,941      
NON-OPERATING INCOME (EXPENSES)                          
Interest income     1,286         915         2,695         1,472      
Interest expenses, net of capitalized interest     (61,383 )       (65,377 )       (120,119 )       (131,220 )    
Other finance costs     (1,390 )       (1,436 )       (2,767 )       (2,937 )    
Foreign exchange (losses) gains, net     (4,253 )       689         371         9,398      
Other income, net     3,257         729         1,451         1,388      
Loss on extinguishment of debt     -          (31,459 )       -          (31,459 )    
Costs associated with debt modification     -          (1,912 )       -          (1,912 )    
Total non-operating expenses, net     (62,483 )       (97,851 )       (118,369 )       (155,270 )    
INCOME BEFORE INCOME TAX     55,597         29,593         220,849         130,671      
INCOME TAX (EXPENSE) CREDIT      (2,458 )       (1,136 )       (4,396 )       617      
NET INCOME     53,139         28,457         216,453         131,288      
NET LOSS (INCOME) ATTRIBUTABLE TO                           
  NONCONTROLLING INTERESTS     4,134         8,020         (2,547 )       18,635      
NET INCOME ATTRIBUTABLE TO                           
  MELCO RESORTS & ENTERTAINMENT LIMITED  $    57,273      $    36,477      $    213,906      $    149,923      
                           
NET INCOME ATTRIBUTABLE TO                           
  MELCO RESORTS & ENTERTAINMENT LIMITED PER SHARE:                          
  Basic  $   0.039     $   0.025     $   0.145     $   0.102      
  Diluted $   0.038     $   0.025     $   0.144     $   0.101      
                           
NET INCOME ATTRIBUTABLE TO                           
  MELCO RESORTS & ENTERTAINMENT LIMITED PER ADS:                          
  Basic  $   0.117     $   0.075     $   0.436     $   0.307      
  Diluted $   0.115     $   0.074     $   0.432     $   0.304      
                           
WEIGHTED AVERAGE SHARES OUTSTANDING                           
  USED IN NET INCOME ATTRIBUTABLE TO                           
  MELCO RESORTS & ENTERTAINMENT LIMITED                          
  PER SHARE CALCULATION:                          
  Basic      1,472,695,529         1,467,501,531         1,471,225,884         1,466,468,014      
  Diluted     1,485,815,747         1,479,331,486         1,484,794,529         1,477,811,276      
                           
                           
Note The Company adopted the New Revenue Standard using the modified retrospective method from January 1, 2018. Results for the periods beginning on or after January 1, 2018 are presented under the New Revenue Standard, while prior year amounts are not adjusted and continue to be reported in accordance with the previous basis.   
                   


               
Melco Resorts & Entertainment Limited and Subsidiaries    
Condensed Consolidated Balance Sheets    
(In thousands of U.S. dollars)    
               
               
  June 30,   December 31,    
  2018   2017    
    (Unaudited)     (Audited)    
               
ASSETS              
               
CURRENT ASSETS              
Cash and cash equivalents  $    1,387,519      $    1,408,211      
Investment securities     92,334         89,874      
Bank deposits with original maturities over three months     24,987         9,884      
Restricted cash     47,470         45,412      
Accounts receivable, net     188,323         176,544      
Amounts due from affiliated companies     5,766         2,377      
Inventories     36,002         34,988      
Prepaid expenses and other current assets     73,999         77,503      
Total current assets     1,856,400         1,844,793      
               
PROPERTY AND EQUIPMENT, NET     5,736,756         5,730,760      
GAMING SUBCONCESSION, NET     227,464         256,083      
INTANGIBLE ASSETS     4,220         4,220      
GOODWILL     81,915         81,915      
LONG-TERM PREPAYMENTS, DEPOSITS AND OTHER ASSETS     187,567         189,645      
RESTRICTED CASH     130         130      
DEFERRED TAX ASSETS     81         11      
LAND USE RIGHTS, NET     776,091         787,499      
TOTAL ASSETS  $    8,870,624      $    8,895,056      
               
LIABILITIES AND SHAREHOLDERS' EQUITY              
               
CURRENT LIABILITIES              
Accounts payable  $    21,953      $    16,041      
Accrued expenses and other current liabilities     1,522,002         1,563,585      
Income tax payable     6,512         3,179      
Capital lease obligations, due within one year      32,625         33,387      
Current portion of long-term debt, net     191,147         51,032      
Amounts due to affiliated companies     14,026         16,790      
Total current liabilities     1,788,265         1,684,014      
               
LONG-TERM DEBT, NET     3,337,943         3,506,530      
OTHER LONG-TERM LIABILITIES     27,674         48,087      
DEFERRED TAX LIABILITIES     54,781         53,994      
CAPITAL LEASE OBLIGATIONS, DUE AFTER ONE YEAR     248,772         265,896      
AMOUNTS DUE TO AFFILIATED COMPANIES     -          919      
               
SHAREHOLDERS' EQUITY              
Ordinary shares     14,830         14,784      
Treasury shares     (74 )       (90 )    
Additional paid-in capital     3,686,664         3,671,805      
Accumulated other comprehensive losses      (29,955 )       (26,610 )    
Accumulated losses     (703,256 )       (772,338 )    
Total Melco Resorts & Entertainment Limited shareholders' equity     2,968,209         2,887,551      
Noncontrolling interests     444,980         448,065      
Total equity     3,413,189         3,335,616      
TOTAL LIABILITIES AND EQUITY  $    8,870,624     $   8,895,056      
               


                         
Melco Resorts & Entertainment Limited and Subsidiaries  
Reconciliation of Net Income Attributable to Melco Resorts & Entertainment Limited to   
Adjusted Net Income Attributable to Melco Resorts & Entertainment Limited  
(In thousands of U.S. dollars, except share and per share data)  
                         
  Three Months Ended   Six Months Ended  
  June 30,   June 30,  
  2018   2017   2018   2017  
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
                         
Net Income Attributable to                         
  Melco Resorts & Entertainment Limited $   57,273     $   36,477     $   213,906     $   149,923    
Pre-opening Costs     28,765         525         31,113         1,000    
  Development Costs     3,018         3,068         6,907         4,085    
Property Charges and Other     9,637         7,063         16,183         12,527    
  Loss on Extinguishment of Debt     -          31,459         -          31,459    
  Costs Associated with Debt Modification     -          1,912         -          1,912    
  Income Tax Impact on Adjustments     (179 )       (89 )       (179 )       (348 )  
Noncontrolling Interests Impact on Adjustments     (478 )       (1,760 )       (1,440 )       (1,752 )  
Adjusted Net Income Attributable to                         
  Melco Resorts & Entertainment Limited $   98,036     $   78,655     $   266,490     $   198,806    
                         
ADJUSTED NET INCOME ATTRIBUTABLE TO                        
  MELCO RESORTS & ENTERTAINMENT LIMITED PER SHARE:                    
  Basic  $   0.067     $   0.054     $   0.181     $   0.136    
  Diluted $   0.066     $   0.053     $   0.179     $   0.135    
                         
ADJUSTED NET INCOME ATTRIBUTABLE TO                        
  MELCO RESORTS & ENTERTAINMENT LIMITED PER ADS:                        
  Basic  $   0.200     $   0.161     $   0.543     $   0.407    
  Diluted $   0.198     $   0.160     $   0.538     $   0.404    
                         
WEIGHTED AVERAGE SHARES OUTSTANDING                         
  USED IN ADJUSTED NET INCOME ATTRIBUTABLE TO                         
  MELCO RESORTS & ENTERTAINMENT LIMITED                        
  PER SHARE CALCULATION:                        
  Basic      1,472,695,529         1,467,501,531         1,471,225,884         1,466,468,014    
  Diluted     1,485,815,747         1,479,331,486         1,484,794,529         1,477,811,276    
                         


                                           
Melco Resorts & Entertainment Limited and Subsidiaries  
Reconciliation of Operating Income (Loss) to Adjusted EBITDA and Adjusted Property EBITDA  
(In thousands of U.S. dollars)  
                                           
                                           
  Three Months Ended June 30, 2018  
  Altira Macau   Mocha   City of Dreams   Studio City   City of
Dreams
Manila
  Corporate
and Other
  Total  
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
                                           
Operating Income (Loss)  $   13,542     $   3,082   $   96,426   $   26,593     $   44,217     $   (65,780 )   $   118,080  
                                           
  Payments to the Philippine Parties     -          -        -        -          23,617         -          23,617  
  Land Rent to Belle Corporation     -          -        -        -          751         -          751  
  Pre-opening Costs     -          -        28,754       11         -          -          28,765  
  Development Costs     -          -        -        -          -          3,018         3,018  
  Depreciation and Amortization     4,673         2,025       42,660       45,004         18,803         18,596         131,761  
  Share-based Compensation     100         48       838       430         (131 )       5,376         6,661  
  Property Charges and Other     -          58       2,801       1,164         28         5,586         9,637  
Adjusted EBITDA     18,315         5,213       171,479       73,202         87,285         (33,204 )       322,290  
  Corporate and Other Expenses     -          -        -        -          -          33,204         33,204  
Adjusted Property EBITDA $   18,315      $    5,213    $    171,479    $    73,202      $    87,285      $    -       $    355,494  
                                           
                                           
  Three Months Ended June 30, 2017  
  Altira Macau   Mocha   City of Dreams   Studio City   City of
Dreams
Manila
  Corporate
and Other
  Total  
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
                                           
Operating (Loss) Income  $   (142 )   $   3,477   $   127,845   $   29,771     $   26,901     $   (60,408 )   $ 127,444  
                                           
  Payments to the Philippine Parties     -          -        -        -          13,822         -          13,822  
  Land Rent to Belle Corporation     -          -        -        -          792         -          792  
  Pre-opening Costs     -          -        321       (21 )       225         -        525  
  Development Costs     -          -        -        -          -          3,068         3,068  
  Depreciation and Amortization     5,208         2,045       43,573       46,322         20,938         17,437       135,523  
  Share-based Compensation     40         54       758       319         160         3,903       5,234  
  Property Charges and Other     -          -        2,786       4,267         -          10         7,063  
Adjusted EBITDA     5,106         5,576       175,283       80,658         62,838         (35,990 )       293,471  
  Corporate and Other Expenses     -          -        -        -          -          35,990         35,990  
Adjusted Property EBITDA $   5,106      $    5,576    $    175,283    $    80,658      $    62,838      $    -       $    329,461  
                                           


                                           
Melco Resorts & Entertainment Limited and Subsidiaries  
Reconciliation of Operating Income (Loss) to Adjusted EBITDA and Adjusted Property EBITDA  
(In thousands of U.S. dollars)  
                                           
                                           
  Six Months Ended June 30, 2018  
  Altira Macau   Mocha   City of Dreams   Studio City   City of
Dreams
Manila
  Corporate
and Other
  Total  
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
                                           
Operating Income (Loss)  $   26,191     $   8,402     $   258,373   $   89,357     $   72,324     $   (115,429 )   $   339,218  
                                           
  Payments to the Philippine Parties     -          -          -        -          34,994         -          34,994  
  Land Rent to Belle Corporation     -          -          -        -          1,515         -          1,515  
  Pre-opening Costs     -          -          31,060       53         -          -          31,113  
  Development Costs     -          -          -        -          -          6,907         6,907  
  Depreciation and Amortization     9,519         4,108         82,823       89,545         37,976         37,490         261,461  
  Share-based Compensation     171         75         1,696       766         (741 )       9,212         11,179  
  Property Charges and Other     461         (432 )       5,542       3,531         28         7,053         16,183  
Adjusted EBITDA     36,342         12,153         379,494       183,252         146,096         (54,767 )       702,570  
  Corporate and Other Expenses     -          -          -        -          -          54,767         54,767  
Adjusted Property EBITDA $   36,342      $    12,153      $    379,494    $    183,252      $    146,096      $    -       $    757,337  
                                           
                                           
  Six Months Ended June 30, 2017  
  Altira Macau   Mocha   City of Dreams   Studio City   City of
Dreams
Manila
  Corporate
and Other
  Total  
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
                                           
Operating (Loss) Income $   (2,215 )   $   8,340     $   292,244   $   51,326     $   50,398     $   (114,152 )   $   285,941  
                                           
  Payments to the Philippine Parties     -          -          -        -          29,261         -          29,261  
  Land Rent to Belle Corporation     -          -          -        -          1,583         -          1,583  
  Pre-opening Costs     -          -          815       (40 )       225         -          1,000  
  Development Costs     -          -          -        -          -          4,085         4,085  
  Depreciation and Amortization     10,897         4,232         88,352       92,298         42,436         34,890         273,105  
  Share-based Compensation     82         48         1,284       605         73         4,729         6,821  
  Property Charges and Other     57         62         6,129       4,267         -          2,012         12,527  
Adjusted EBITDA     8,821         12,682         388,824       148,456         123,976         (68,436 )       614,323  
  Corporate and Other Expenses     -          -          -        -          -          68,436         68,436  
Adjusted Property EBITDA $   8,821      $    12,682      $    388,824    $    148,456      $    123,976      $    -       $    682,759  
                                           


                         
Melco Resorts & Entertainment Limited and Subsidiaries  
Reconciliation of Net Income Attributable to Melco Resorts & Entertainment Limited to  
Adjusted EBITDA and Adjusted Property EBITDA  
(In thousands of U.S. dollars)  
                         
  Three Months Ended   Six Months Ended  
  June 30,   June 30,  
  2018   2017   2018 2017  
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
                         
Net Income Attributable to Melco Resorts & Entertainment Limited $   57,273     $ 36,477     $   213,906   $   149,923    
Net (Loss) Income Attributable to Noncontrolling Interests     (4,134 )       (8,020 )       2,547       (18,635 )  
Net Income     53,139         28,457         216,453       131,288    
Income Tax Expense (Credit)     2,458         1,136         4,396       (617 )  
Interest and Other Non-Operating Expenses, Net     62,483         97,851         118,369       155,270    
Property Charges and Other     9,637         7,063         16,183       12,527    
Share-based Compensation     6,661         5,234         11,179       6,821    
Depreciation and Amortization     131,761         135,523         261,461       273,105    
Development Costs     3,018         3,068         6,907       4,085    
Pre-opening Costs     28,765         525         31,113       1,000    
Land Rent to Belle Corporation     751         792         1,515       1,583    
Payments to the Philippine Parties     23,617         13,822         34,994       29,261    
Adjusted EBITDA     322,290         293,471         702,570       614,323    
Corporate and Other Expenses   33,204       35,990         54,767       68,436    
Adjusted Property EBITDA $   355,494     $   329,461     $   757,337   $   682,759    
                         


                   
  Melco Resorts & Entertainment Limited and Subsidiaries
  Supplemental Data Schedule
                   
      Three Months Ended   Six Months Ended
      June 30,   June 30,
       2018     2017     2018     2017 
Room Statistics:              
  Altira Macau              
    Average daily rate (3) $   187     $   200     $   191     $   204  
    Occupancy per available room   99 %     95 %     99 %     93 %
    Revenue per available room (4) $   185     $   190     $   189     $   190  
                   
  City of Dreams              
    Average daily rate (3) $   201     $   199     $   203     $   199  
    Occupancy per available room   97 %     96 %     98 %     97 %
    Revenue per available room (4) $   196     $   192     $   198     $   193  
                   
  Studio City              
    Average daily rate (3) $   135     $   135     $   137     $   137  
    Occupancy per available room   100 %     98 %     100 %     99 %
    Revenue per available room (4) $   135     $   133     $   137     $   135  
                   
  City of Dreams Manila              
    Average daily rate (3) $   157     $   156     $   158     $   155  
    Occupancy per available room   98 %     95 %     98 %     96 %
    Revenue per available room (4) $   154     $   149     $   155     $   149  
                   
Other Information:              
  Altira Macau              
    Average number of table games     103         108         103         111  
    Average number of gaming machines     129         56         126         56  
    Table games win per unit per day (5) $   21,491     $   14,633     $   21,306     $   14,465  
    Gaming machines win per unit per day (6) $   160     $   89     $   145     $   91  
                   
  City of Dreams              
    Average number of table games     483         480         481         480  
    Average number of gaming machines     690         762         678         800  
    Table games win per unit per day (5) $   14,542     $   16,172     $   15,568     $   16,585  
    Gaming machines win per unit per day (6) $   912     $   541     $   873     $   503  
                   
  Studio City              
    Average number of table games     293         287         293         284  
    Average number of gaming machines     959         981         951         976  
    Table games win per unit per day (5) $   13,509     $   12,729     $   14,399     $   11,472  
    Gaming machines win per unit per day (6) $   237     $   208     $   244     $   210  
                   
  City of Dreams Manila              
    Average number of table games     299         278         297         274  
    Average number of gaming machines     1,900         1,777         1,868         1,775  
    Table games win per unit per day (5) $   6,165     $   6,383     $   5,797     $   5,800  
    Gaming machines win per unit per day (6) $   291     $   277     $   286     $   281  
                   
    (3) Average daily rate is calculated by dividing total room revenues including the retail value of complimentary rooms (less service charges, if any) by total occupied rooms including complimentary rooms
    (4) Revenue per available room is calculated by dividing total room revenues including the retail value of complimentary rooms (less service charges, if any) by total rooms available
    (5) Table games win per unit per day is shown before discounts and commissions        
    (6) Gaming machines win per unit per day is shown before deducting cost for slot points      

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