WYNN 1Q13 CONF CALL NOTES

Takeaway: In-line quarter on a hold adjusted basis

In-line quarter on a hold adjusted basis

 

 

CONF CALL NOTES

  • Best quarter ever in China.  Did ok in Las Vegas.
    • Cotai budget just under $4.0 billion
  • Quality of competition has ticked upward in Macau

Q&A

  • LV hold-adjusted EBITDA: $105-108MM vs $120MM actual
  • Macau hold-adjusted EBITDA: $315MM vs $331Mm actual
  • Capital allocation if Philly/Boston bids don't come to fruition?  Want to maintain investment grade on non-recourse debt.  Dividend policy of $1/quarter can continue.  New Cotai debt borrowed at LIBOR + 1.75%.
  • Commisions in Macau were down because of higher hold with direct players relative to junket players
  • Customers buy money at cage which do not factor into drop;  should disregard Mass hold % in Macau; should only pay attention to win
  • Opened Phase 1 of high-limit slot space with 96 slots; will open 50 additional slots in time for May holidays
  • Believe mass business is healthy 
  • Direct VIP is doing well
  • 1Q provision of doubtful accounts is a good run rate
  • Annual meeting is May 16 in Macau and May 7 in LV
  • Afraid of the competition
  • Cotai:  design is finished; 1st stop from ferry terminal
  • WYNN will not get behind on US online gaming; currently, the future is 'murky' and WYNN is monitoring it
  • In the next month, there will be WYNN Cotai model photos and walk through video
  • WYNN Philly/Boston design:  No comparison to regional casinos (slot boxes)
  • Saw pickup in more corporate/convention trips 
    • 7% increase in rooms and revenues
    • 2014 bookings 'way ahead of pace' - much more robust compared with the last several years
  • Toronto/Japan: watching it closely
    • Toronto City Council votes on May 7
    • Japan PM is pro-gaming, along with several senators
  • Las Vegas trends:  Jan/Feb/March was similar
    • $600MM in table win: 70% is in roulette/baccarat (Latin America/European/Asian customers)

 

HIGHLIGHTS FROM THE RELEASE

  • Approved a cash dividend for the quarter of $1.00 per common share. This dividend will be payable on May 23, 2013, to stockholders of record on May 9, 2013.
  • Macau: Net revenues were $992MM and Adjusted property EBITDA was $331MM
    • Turnover in the VIP: $28.4BN, down 15.3% YoY
    • Hold: 3.14%
    • Mass table win was $243MM on hold of 35.5%
      • Chips purchased at the casino cage are excluded from table games drop and will increase the expected win percentage.
    • Slot machine handle was $1.1BN, down 23.4% YoY
    • RevPAR was flat YoY
    • 503 tables (288 VIP tables, 205 mass market tables and 10 poker tables) and 834 slot machines
  • Cotai Update: 
    • Project budget to be in the range of $3.5 billion to $4.0 billion. 
    • WYNN expects to enter into a guaranteed maximum price contract for the project construction costs in the first half of 2013. 
    • Started foundation work in February 2013 and expect to open our resort in Cotai during the first half of 2016.
    • In 1Q13, we spent approximately $76.3 million on our Cotai project
  • Las Vegas:  Net revenues were $387MM and Adjusted property EBITDA of $120MM
    • Table games drop: $669MM was up 2.2% YoY and hold was 26.7%, higher than the property’s expected range of 21% to 24%
    • Gross non-casino revenues were 1.6% YoY due to increases in hotel and food and beverage, which were partially offset by lower entertainment revenues.
      • Room revenues were up 4.8% on a 6% RevPAR increase
      • F&B revenues increased 6.0%... primarily due to the strength in our restaurant, night club and beach club businesses. Retail revenues were down 0.9%. Entertainment revenues were down 28.3% due to a show that ended its run at the Encore theater in November 2012
  • Cash:  $2.3 BN
  • Debt: $5.8 BN ($3.1BN Wynn LV, $749MM Wynn Macau, and $1.9 BN parent)
  • Corporate expense was down $7.0 million as WYNN incurred significant expenses associated with the redemption of the Aruze USA, Inc.'s shares during 1Q 2012


Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more