WYNN 4Q11 CONF CALL NOTES

Soft quarter and boring conference call.  Can't remember when we've said that about WYNN.

 

 

CONF CALL NOTES

  • Really? Opening with their new website...We couldn't even find the webcast on the new site.
  • Operating expense in Macau increased due to a large increase in bad debt expense and some increase in payroll expenses
  • They do feel a lot of competitive pressure in Macau.  Their competitors have really stepped up their game.
  • They are still working hard on their plans in Cotai
  • Cash split is about 50/50
  • CNY levels were a little lower in Vegas than last year partly because of the calendar shift.  According to Steve, people had less vacation time this year.  There was also more choice for their Asian customers so business was spread a bit thinner.
  • Their strategy in Vegas is to identify lodgers that will stay and spend at the property.  $110MM of the EBITDA increase at the Vegas property came from the hotel.
  • They are adjusting their table mix and junket mix to compete better in Macau
  • Galaxy spend a lot of money on the property since opening to improve the property
  • Sands also spent hundreds of millions to make their properties better
  • They are constantly tweaking Macau, but no material capex
  • They call their special dividend special because they are not necessarily recurring
  • Bad debt provision was flat YoY and they are still well north of 50% reserved on their receivables.  Bad debt as a % of receivables are flat.  They are seeing no credit issues in Macau.  They do not use credit as a marketing tool. They give credit out in appropriate amounts to appropriate parties. 
  • The increase in doubtful accounts this year is mostly due to higher levels of play in Las Vegas.  Macau is actually flat.
  • "We've enjoyed Mr Okada's participation for 12 years." They had a sharp disagreement over the Philippines project. Wynn feels like it is not an appropriate investment for Wynn and this created a problem for Okada and stress in their relationship.  Wynn has no interest in doing business in the Philippines.
  • Hope that 2012 comes in at the same level for convention business in Las Vegas.  They are getting a little more rate in the 1st Q but they are worried about the summer time and fear deep discounts there.  Looking forward to a flat year on the convention side.  They are going to be pushing transient rate in 2012. 
  • Tax rate for next year? 
    • Somewhere between 2010 and 2011
  • What is a collection trip? Linda is basically asking their customers to pay up what they owe. Not rocket science Steve Kent.
  • Market share in January?  They are around 13% of the market - and the market has gotten a lot bigger.  They focus on their fair share.
  • Had robust growth in January because of CNY calendar shift.  Not sure about the rest of the quarter.  Last year, they made $62MM in Vegas in February so it's a really tough comparison
  • Their Chinese business connections feel confident in the continuation of the healthy Chinese economy.
  • The Macanese government is ok with inflation as long as there is full employment in the market.  The government suggests annual wage increases to deal with the issue. 

 

HIGHLIGHTS FROM THE RELEASE

  • Net revenues of $1,344M and adjusted property level EBITDA of $402MM, both a little short of consensus.
    • Macau: Net revenue of $995.5MM and Adjusted EBITDA of $313.1MM
      • Net revenues were 1% ahead of Street while EBITDA was 2% below
      • Benefited from high hold of 3.18%
    • Vegas: $348.4MM of net revenue and $89.1MM of Adjusted EBITDA, 3% and 9% below the street, respectively
      • 1% of rooms were out due to renovations
  • Cash: $1.3BN; $3.2BN of debt ($2.6BN at Wynn Las Vegas and $628MM at Wynn Macau)
  • "Approved a cash dividend for the quarter of $0.50... payable on March 1, 2012, to stockholders of record on February 16, 2012."

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