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