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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