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    MARKET EDGES

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Unlike most quarters, the news here is that we are not far off from consensus:  7% above on Macau EBITDA and 1% higher on Vegas.

Wynn’s Q3 shouldn’t be the huge beat we’ve seen in recent quarters.  Market share losses in Macau should prevent outsized outperformance but the quarter should still be solid.  We think Wynn’s market share remains disappointing post the Encore opening but strong Macau market growth makes the market share argument fairly weak, until it’s not.  Here are the details in our model:

3Q2010 Detail:

We project Wynn Macau & Encore to report $205MM of EBITDA on net revenues of $686MM

  • Net casino revenue of $640MM
    • RC volume of $21BN at a hold of 2.9%, producing gross VIP table revenue of $623MM
    • We assume a 84bps rebate rate and a 40.6% revenue share commission rate
    • Mass table win of $138MM and slot win of $60MM
  • $46MM of non-gaming revenues net of comps
  • $366MM of variable expenses comprised of taxes, gaming premium, junket commissions in excess of rebates, and bad debt
  • $21MM of recorded non-gaming expenses
  • $95MM of fixed expenses

We expect Wynn Las Vegas & Encore to report $65MM of EBITDA on net revenues of $327MM

  • Net casino revenue of $134MM and expenses of $70MM (up 3% YoY and $1MM QoQ)
    • Table drop of $579MM and hold of 19% for total table win of $108MM
    • Slot win of $765MM and revenues of $46MM
    • Discounts of 13% or $20MM
  • $77MM of room revenue and expenses of $30MM
    • 90% occupancy and ADR of $195
  • $107MM of F&B and $54MM of entertainment, retail and other revenue
  • $44MM of promotional expenses
  • $61MM of SG&A

Other stuff:

  • D&A:  $105MM
  • Net interest expense:  $54MM
  • MI:  $34MM