WYNN 1Q 2014 CONFERENCE CALL NOTES

Q1 almost exactly in line with our property level EBITDA estimate and nicely above the Street. Positive forward commentary

WYNN 1Q 2014 CONFERENCE CALL NOTES - wynn

CONF CALL NOTES

  • Construction of Wynn Palace on schedule, will open 6 quarters from now (552 tables).  Still want to open up in 1Q 2016 before CNY.
  • LV hotel occu +12.6%, REVPAR up 12.7%; ADR; most profitable hotel in Nevada
  • Low hold impacted LV by $10MM.  Hotel room pace for 2014 is going well.
  • LV 2Q:  6-7% higher than previous year
  • Steve Wynn thinks LV is growing into additional capacity that was added in the past and feels good about it, finally
  • Wynn Macau:
    • No hold impact in 1Q; junket margins stable
    • Flow through very very strong
    • Moving poor performing mass tables into premium table games (62 premium mass tables games); 492 total tables
    • April mass revenues up 55%; April: VIP up 10% (outpaced the market)
      • This translates into US$122m in mass revenues and US$257m in VIP revenues
      • We think Wynn gained mass share in April and possibly VIP share as well if the VIP market was flat or worse.
    • Slot win outpacing market 
    • EBITDA per position trending 35/40% higher than nearest competitor
  • Wynn Palace:  no trouble finding construction workers.  Have 2,000 workers on site; will have 3,000 people by October.  
  • Other Cotai sites under construction look more disoriented
  • In 60 months, Macau/Henqian Island will be most robust tourist destination in the world, competing with Orlando, Los Angeles, etc.

Q & A

  • Macau:  213 average mass tables in 1Q; converting some of junket space into premium mass business
  • $5MM receivable credit in Macau:  collected receivables that were 100% reserved
  • % of EBITDA coming from Mass:  not buying the business
  • Table win per unit
  • LV:  when customers get lucky, drop goes down.  When win is down, credit is also down.
    • Handle:  credit slips with markers and cash
    • Do not have 'table drop' until the customer loses
  • No construction disruption on mass business
  • Table mix at Wynn Palace will be similar to Wynn Macau
  • In the past few weeks, have migrated some VIP tables to premium mass tables. 
  • Wynn Palace:  Hotel Cash room:  700 sq ft; majority of rooms will be +900 sq ft
  • Do not advance VIP credit for more than 30 days.  WYNN settles at end of every month.  Not worried about VIP credit.
  • Thinks Venetian Macau cannibalized Sands Macau
  • Wynn Macau earnings went up, even with all the new casino openings; has held their market share; believes market share will hold its own at Peninsula when Palace opens.
  • China:  Corporate credit is very different from consumer credit
  • Finished financing recently.  Last tranche: $750MM bond at 5.09% with no covenants, non-recourse.
  • Total Cotai financing at $3.85bn at average cost of 3.3%
  • Capital structure is in 'nirvana' - low interest rates, long maturities, low covenants
  • Highly confidence in getting the 552 tables for Palace
  • Want to do the basics better in Macau
  • Most successful largest grossing casino on Gulf Coast is Beau Rivage.
  • Japan:  Diet will discuss study bill in May.  Tokyo, Osaka, Okinawa - potential sites.
  • More optimistic than ever on Japan