WYNN 2Q 2013 REPORT CARD

In an effort to evaluate performance and as a follow up to our YouTube, we compare how the quarter measured up to previous management commentary and guidance

 

 

 

OVERALL:  IN LINE

  • The headline was a miss from Consensus but the Street was too high in Macau given the monthly numbers.  Vegas performed very well even after excluding the $12m favorable adjustment to the receivable allowance.  July is off to a great start for Wynn despite lower market share.  While not a raging bull, overall we feel better about the WYNN story following the release and call.

 

PROVISION FOR DOUBTFUL ACCOUNTS

  • BETTER:  WYNN recorded credits to the provision for doubtful accounts in 2Q. The adjustment was $14.9MM, consisting of a $12.2MM credit at Wynn Las Vegas and a $2.7MM credit at Wynn Macau.
  • PREVIOUSLY:  "Provision for doubtful accounts, this is about the appropriate run rate. There's maybe a little more going forward. So it fluctuates as we get large collections in Macau that are fully reserved and we feel pretty good with this run rate."

LAS VEGAS ROOMS

  • BETTER:  REVPAR was $233, up 4.7% YoY.  WYNN continues to see non-gaming drive Vegas growth.
  • PREVIOUSLY:  "Looking out over the rest of the year, we also see that, that's a pattern that we feel confident that is going to continue to repeat itself. And then, if we're looking out to grow out into 2014, which we've always talked about as what we felt the best as far as where we knew the room contribution was really going to bounce back in that segment. 2014, its way ahead of pace of where we actually thought it would be."

COTAI BUDGET

  • SAME:  Maximum budget is $4 billion.  Projected to open by Chinese New Year 2016.
  • PREVIOUSLY:  "The budget is still just under $4 billion and 6 million feet."

WYNN ENCORE NEW AREA

  • SAME:  Well-received response to the new high-limit rooms
  • PREVIOUSLY:  "We continue to upgrade our high-limit areas. We just opened a new high-limit slots area as Phase 1, with 96 slot machines. And we're opening up our Phase 2 with another 50 machines this weekend, in time for the May holiday.

MASS

  • SAME:  Mass (table + slots) experienced low hold in June but that has been corrected in July.  WYNN sees July mass win up 22% YoY and 13% sequentially.
  • PREVIOUSLY:  "Our mass business overall is very healthy. Our high-limit (mass/slot) business remains strong, so we're pretty confident going forward."

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