WYNN 3Q09 CONF CALL TRANSCRIPT

3Q09 CONF CALL

Steve's commentary

• "It hasn't been too bad this quarter"
• 1Q09 confirmed their worst fears for LV, 2Q09 wasn't much better, and in the summer things began to pick up
• If things continue as they are they will beat the 08' results in Vegas this year and in Macau
• If rate at Encore was $350 then annual EBITDA would have been $150MM higher
• Room rates are still down because midweek rates are weak given lower business/convention travel
• People that come to Vegas are spending less on everything 
• Get the benefit of some Asian spill over
• Capital structure (ie low debt) protects their franchise until the economy improves
• You can always buy revenues, its the bottom line that matters - D&A is real (meaning capex) and so is interest expense
• "Bigger is not better - better is better"... love the Sheldon shot
• It's not about market share it's about the free cash flow and ROI - basically he's saying that his equipment is most productive and he runs his casinos most efficiently in terms of maximizing ROI per gaming position
• Encore in Macau is completely budgeted and under control.  Opened some parts already will be 100% open by April
• Prettiest and most beautiful thing they've ever built
• Building was built to meet the needs of the VIP business in Macau... "in a hundred cunning ways it will ingratiate itself with the customers"

Q&A

• Domestic high end business - is that improving? 
  • International has held up well, but the high end domestic business has just not returned yet
• How does the group convention calendar look for 2010/2011?
  
  • Booking window is still very compressed.  Hearing that people will start spending their budgets, but that won't happen until 2Q2010 ...as they wait for things to stabilize
  • Had two large cancellations last week... I love how honest Steve is... he thinks that there is still political stigma coming to Las Vegas
• Response to City Center?
  
  • Focusing on the fundamentals, employee morale and good service
  • They know that a lot of people will go and check it out... nothing they can do about that.  The experience they have at CC will determine whether they come back to Wynn....
  • If CityCenter cuts prices it will hurt them
• Increases in expenses can be attributed to utilities/etc rest was seasonal and revenue driving (ie variable as a result of higher revenue)
• What they expect in additional costs when Encore Macau opens?
  • They are very room constrained, more rooms will allow them to capture more mass market shares
• What will they do with the IPO proceeds?
  • Protect himself from a dollar that is getting creamed... he's very worried about the depreciating dollar ... will hedge the weakening dollar.
    He sounds like Keith McCullough and the Burning Buck
• Klatzin asks the question again... in a different way ... Hey Steve will you buy anything with all that cash?
  • Asia seems to be a better bet now.  Uncertainty in the US economy is devastating, and that impacts all of their decisions
• Visa restrictions in Macau?
  • All the talk of about visa restrictions is becoming quite irritating, all media hype and noise
  • 50% of their visitors are from mainland china
  • Oct holiday was very strong and the period post holiday was seasonally slower as usual. Oct was good
  • "We don't feel uncertainty in Macau"
• What about Singapore?
  • If the central government thought that Singapore was a threat to their gaming enclave, they change visa restrictions (and taxes)
  • Doesn't think that they lower tax rate in Singapore, and hence the ability of junkets to give higher incentives, will not be a threat to Macau
    • We are worried about Singapore... I wish someone asked the question on what % of Wynn's visitors come from SE Asia 
• Cotai?
  • They are working on the project but won't discuss it until they are ready to
  • When I was there at the end of Sept there was nothing going on at the site
• No comment on Acqueduct
• Any changes to the government policy in Macau?
  • Use the visa program to balance quality of life for people living and working in Macau and the business well being in Macau
• Corporate expense - little lower than where its been running? Comment
  
  • Yeah and SG&A was higher - which more than offset that decrease... can you say re-allocation?
  • Payroll cuts and cost control efforts - don't assume that that is a good run rate either
• Dollar commentary and desire to get less exposure to that... what is he implying?
  • In the past they have converted all their foreign profits into USD ... re-evaluating that
• Lots of projects/ land available in Las Vegas - any interest?
  • Until there is more certainty in the US they will not be expanding in the US
• How much of the cost reductions we saw earlier this year will be sustainable
  • Garth Brooks in the 4Q09 - big deal
  • Bought him a jet so that he can come and go
  • First 20 shows are sold out, attracting a lot of people to Las Vegas that haven't come in a long time
  • Entertainment has been the trickiest thing to get right in this business... so bottom line they spent a lot of money on that
  • Other than that things should trend flat from here 
• Accounting question about WYNN Macau 
  • NI attributable to non-controlling holders right below the NI line
  • Don't you wish that sell-side analysts understood basic accounting?
• What will become of Fontainebleau?
  • Disconcerting to have half complete projects all around them
  • Another shot at Sheldon - sites 5 & 6
• "Cosmopolitan is another pending disaster"