Wynn misses at both properties. Low VIP hold in Macau was known, high Mass hold was not.




  • Business in Macau was fine.  They haven't felt any impact from competition. If they normalized hold they would have had an extra $15-18MM of EBITDA
  • They had a very difficult hold comparison in Vegas 
  • They expect to break ground in Cotai in a few weeks.  He is in final negotiations with contractors
  • No new Okada legal issues



  • Timetable for Cotai: 36-42 months until the opening of Cotai. Spent 28 months designing the property
    • Going down 90+ meters for pilings. It's going to take a few months to pile and lay foundation.  After that things will move quickly
    • There is also a lot going on in China and the Department of Public Works.  So labor is an issue.  However, once the government gives you the land concession they are helpful in getting you off the ground
  • March Junket RC volumes increased over Jan/Feb?
    • Nothing changed. Volumes are simply up YoY and customers may be coming back to "mama" now that they have sampled the competition
  • Special dividends are special. They do have very strong cash flow and a long lead time until construction spend gets expensive
  • Mass revs barely up - they transitioned a lot of their tables from Mass to VIP - they're just yielding their floor.
  • Increase in expenses in Macau: bad debt expense was up $8MM - all due to Macau. Had a few large account that went past 150 days due. They are 55% reserved right now
  • Cost pressures at Wynn Macau? 
    • Gave their employees a cost of living raise
    • Also approaching their 6th year of operations so they are doing some upgrading
  • Occupancy in Vegas is a bit low.  They are trying to hold the line on price/push price. They had non-gaming revenues grow despite have 24,000 less room nights. Had 2 conventions fall out that hurt them
    • Learned to live with a little less occupancy to get their right people their rooms
  • Their competition in Macau has raised the bar. They have taken that into their design of their project in Cotai. Will have pictures on their next call most likely. Prefers not to tip their hand to MGM and SJM but it's likely that they will get a peak at Wynn's design before getting their concessions announced or see what they have in mind
  • Galaxy has already started construction of Ph2. The other guys will do something sooner or later. Doesn't know when they will get their concessions.  It took 7 months from the time that Wynn entered into a contract and paid a deposit to the time they got gazetted. Doesn't mean it will take that long for everyone though. That's just the way it worked for them
  • 25-40% of the project will be equity financed.  They will get the rest of the package in place later this year.
  • Think that their competitor's free bees and giveaways attract more of the lower end of the market that they are interested in. Their Cotai property will have a convention component that is more sizable than what they can currently accommodate. They will also have a lot more rooms
  • Okada: Has no idea about Mr. Okada's desires on process. Mr. Okada's counter-suit is frivolous in his opinion. They have also instituted their own lawsuit based on his behavior while on the Board. They will prosecute their case of breaches in fiduciary duty and conflict of interest until its settled.  Their actions taken were really not optional according to their legal counsel. So they did what they had to do knowing that there would be a counter-suite. 
  • No updates on Japan. Progress on legalization has been stuccado at best
  • They are looking for a maximum price guarantee on the Cotai project
  • Their customers in China are sanguine. They seem to be enjoying their disposable income with the same gusto as before. Did over $1BN of sales in 50k SQFT of retail space and yields. LVMH just doubled their retail space. They did $150MM of sales last year
  • What you are seeing in China is people experiencing wealth for the first generation and they want to enjoy it - see the "good life"
  • They also wouldn't do a project for less than a 20% cash on cash ROI.  They would do 2 projects at once. Back when Singapore was in play he couldn't only had LV and a ton of debt


  • Wynn continues to work on the final Cotai project scope, timeline and budget. The land concession granted on May 2, was for 25 years.
  • Macau VIP win was low at 2.59% but mass held high at 30.3% vs. a normal range of 26-28%
    • Wynn Macau's historical hold rate has been 2.96%, excluding this quarter.  If we use their historical rate then hold impacted net revenue and EBITDA by approx. $87MM and $22MM, respectively
    • Using 27.5% as a normal hold rate for mass, we estimate Wynn Macau's revenue would have been $20MM lower and EBITDA would have been $12MM lower
    • On the net, low hold hurt Wynn Macau by $10MM - by our math
  • Las Vegas table hold was 22.8% (normal) but faced a difficult 30.4% comp in 1Q11
  • $0.50 cash dividend was approved today, payable on June 4th to holders of record on May 21
  • "Wynn Las Vegas, LLC issued $900 million in 5⅜% first mortgage notes due 2022, repaid all amounts outstanding under the term loan facilities totaling $370.9 million, reduced its revolving commitments to $100 million and Wynn Resorts issued a $1.94 billion, 2% promissory note associated with the redemption of the Aruze USA shares."
  • "Total cash balance at March 31, 2012 was $1.9 billion. Total debt outstanding at the end of the quarter was $5.5 billion, including $3.1 billion of Wynn Las Vegas debt, $440 million of Wynn Macau debt and a $1.94 billion promissory note at the parent company."
  • "Corporate expense was up approximately $12 million during the quarter, primarily resulting from expenses associated with the redemption of the Aruze USA shares."

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