Headline miss but actually not a bad Q. July commentary was positive.
CONF CALL
- WYNN COTAI
- Maximum Cotai project cost (all-in including pre-open and cap int of $500m): $4 billion, could be a little less
- Projected to open CNY 2016
- Ex credit adjustment in 2Q 2012, Macau would have been up a little bit YoY
- Little behind in slot (hold, not coin-in)
- Mass win: July up 22% YoY and up 13% sequentially
- EBITDA share: 16%
Q & A
- Concession renewals: comfortable being in Macau
- Macau VIP margins: held less than 2% in direct play, held high on junkets. mix negatively impacted margins
- Mass: hold issues in slots and mass tables in June; that has corrected in July
- Half of cash investments is in Macau
- International Vegas breakout: table win - 52% Asian, 24% Latin, 24% domestic; $25-30MM of the $177Mm slot win is international
- Vegas: Upside to margins due to increasing international exposure
- Macau Premium-mass segment: hyper competitive; not competing in the high discounting/promotional environment
- Mild construction impact in Macau; 600 room refurbishment in Wynn Tower - will be finished in late October
- Capital allocation: $1 in dividend per quarter; if excess CF, board will decide. Cotai project: $200MM accordian structure Libor +175bps
- Philly/Boston: 5-6 applicants in Philly; MA - ongoing suitability investigations
- Investments: Philly $900MM ($300-400MM equity): Boston $500-550MM ($300MM equity)
- High-end slot limit rooms: very-well received; catching up to competition
- Missing out on rising table minimums in Cotai? Not much impact. Average bet at WYNN is pretty high.
- Non-gaming will drive Vegas business; can withstand the competition; MGM throws plenty of money at customers
- Vegas recovery? Vegas doing better YoY but wouldn't say a recovery yet. Additional capacity that came online during recession was badly timed.
- Not having a 'real recovery' in the US
- China macro impact: very cautious with credit and collections but have not seen the impact
- Sees visitation pick up in Guangdong areas; getting more people to stay longer
- Cotai capex contribution: $300MM to date; expect another $300MM for rest of 2013; $1 billion in 2014; vast majority of rest in 2015/2016 - will utilize 30% of FCF
- Cotai Features: Wynn Palace - name of hotel; lake/fountains similar to Bellagio; capture light-rail traffic through gondola
- Japan: no comments; interested in Tokyo and Osaka