Wynn 4Q15 Earnings Call Notes

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Steve Wynn

January in Macau was our best month in a long time

“what is interesting is to say that January in Macau, if I can anticipate some of the questions, was our best month in a long time. Happy to say so. And Chinese New Year is in progress, but early in the week, a little too soon to say, the mass component clearly looks a little stronger than in the past.”

Business is pretty good in the US

“With regard to Las Vegas, January was terrific and Super Bowl and February are off to a roaring start. And between that and President’s weekend, Las Vegas is an apple pie shape up through the 15th which will be Monday. The question in Las Vegas will be how is the last 14 days. But as of now business is pretty good in the United States and holding its own in Macau.”

You can judge the impact of a devaluation by what it did in our economy after QE 1, 2, 3

“Yes. Like any devaluation, if you are buying domestic products, you don’t feel it. If you are buying and you are trading internationally, you do feel it. If you are an exporter and a businessman in China and you are one of our customers, and they are, then devaluing the currency increases your ability to sell your products outside China. So a devaluation, which is of course a methodology of supporting the economy, tends to make our customers have more liquidity. And when we talk about devaluation, QE 1, 2 and 3 took the US dollar down by 18% or 20%. So you can judge what a devalued currency impact has on people by taking a look at what happened right here in the United States where we did precisely that with our federal reserve interventions in QE 1, 2 and 3.”

We have a high end customer in Vegas

” we are holding high and we have got this very privileged kind of patronage. It is one of the advantages — there are advantages and disadvantages of having a high end super quality resort. For example, your average customer tends to be a little wealthier, a little better able to afford more expensive food and wine and hotel rates.”

We focus on the bottom line more than the top line

“We tend to be very fastidious about having all of our games be profitable. We don’t pay so much attention to the top line as we do to the bottom line. So when we evaluate the casino, we don’t evaluate the handle or the Wynn, we evaluate the contribution to EBITDA of our games. And we try to maximize every foot of the casino with one metric in mind, contribution of EBITDA per foot.”

If there’s a recession then we’ll be affected like everyone else

“if there is a recession in America, and it is hard to see why there won’t be if we keep going the way we are, then Las Vegas will ultimately reflect whatever is going on in the rest of the United States. It always has. There’s sometimes been a delay if conventions are booked and things like that, but at the end we always seem to be just like anybody else, part of America and a big reflection of it. So I don’t want you to construe my remarks about a healthy January and a promising February to mean that we’re running counter to anything else you’re seeing. We’re just lucky, that’s all. Just luck, we’re holding high. I don’t want to make too much of it.”

The customers aren’t going to change

“We’re going to do what we have always done. We are going to keep trying to make it better in every way. And that, look, the customers aren’t going to change. There are people who come to Las Vegas and Macau to live big and have fun. And whoever gives them that product consistently and fully wins the race to the top, I guess is the way to put it, or ends up in first position.’

We know who our customers are and we know what they want

“We know who our customers are, we know what they want. And we’re going to try and figure out a better way to give it to them. That’s my ace in the hole. That is my secret.”

Matt Maddox

Chinese macro data is confusing, but it feels like our Macau business has been stabilizing

“Well, we’ve focused on our retail volumes and we are noticing that some of our retailers are starting to stabilize a little bit more compared to last year and the previous quarters. Our hotel occupancies are remaining about the same as they have been and we are seeing some pick up there. And then, Steve, you track all the visitation just like we do from each region. And the visitation also feels like it is stabilizing. So, all the China macro data is confusing for the moment, but what we see in our building and visitation to Macau feels like it has been stabilizing since November. And I think you’d hear that from all the operators.”