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WYNN Wynn Resorts

Participants
Craig Billings Chief Financial Officer
Matt Maddox President & Chief Executive Officer
Marilyn Spiegel President, Wynn Las Vegas, LLC
Ciaran Carruthers Chief Operating Officer, Wynn Macau
Frederic Luvisutto Chief Operating Officer, Wynn Palace
Robert DeSalvio Senior Vice President, Development
Ian Coughlan President, Wynn Macau, Limited
Carlo Santarelli Deutsche Bank
Joe Greff JPMorgan
Felicia Hendrix Barclays
Shaun Kelley Bank of America
Thomas Allen Morgan Stanley
Harry Curtis Instinet
Stephen Grambling Goldman Sachs
Anil Daswani Citigroup
David Katz Jefferies
Call transcript
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Operator

Welcome to the Wynn Resorts First Quarter 2019 Earnings Call. All participants are on listen-only until the question-and-answer session of today's conference [Operator Instructions]. This call is being recorded.

If you have any objections, you may disconnect at this time. I will now turn the line over to Craig Billings, Chief Financial Officer. begin. may you Sir,

Craig Billings

Luvisutto and are everyone. Spiegel. Matt are you true. make forward-looking that Carruthers, to the turn operator, I in Also call I me federal will Safe statements or may Matt may Las line Frederic those over Ciaran and now Coughlan, Vegas Maddox Ian laws Bob good statements you, we DeSalvio. With Maddox. may want remind afternoon today under on and Thank and Harbor to securities not come the Marilyn

Matt Maddox

Thanks Craig just everyone. our Thank in joining right for expectations. was you talk to with like quarter pretty and good and line I'd afternoon us. Macau. in The think jump And I about much

property previous area discussed EBITDA. And Macau, in be So as quarters, the premium was of in down continues and to choppy. we generated million VIP we've $XXX

saw we saw was what However, strength we mass. core in our real

increased shows five strategy year-over-year, months. our XX% and core fact, restaurants at that new working. mass is the Wynn Palace what last In over our XX over We that is built

business EBITDA in from to EBITDA record. interesting achieved that And XX% what's its this non-gaming. and on of visitation continues of Wynn Our highest year, mass increase. normalized the March And Palace was

probably end a square renovation. of the Macau, there nicest If XXX as the exactly just are with Encore full rooms room feet the be goods now. perform we're of The Macau, is you our in will year. complete And soft full of renovating in look side but is Not to average the the renovation that renovation, Wynn by continuing Downtown, which a Tower, expectations at all we're in line that property.

floor what call XX success half to casino can on original that at casino and casino, plans we what of our most the looked casino do the we games productive also in Macau, of those And Encore thought planet. of our one the we are approximately the replicate We West. our in

will of that And wrap a take with year, has now original will this mass rooms, downtown. turn new energy entering nicest this it end should our months about be all by that and feet the destination two up the project began the and right the the we nine suppressed. ago year. in it will And think of chopped of should With square new premium this junket I various that's so end up what at been area, X,XXX restaurants casino finished flanking be into the casino retail

was always her be of we and in what of time, of it an on I discussion non-Baccarat a or are and so actually Asia our been on think else casino where XX% to happens Baccarat team I Customers I've the lot never great the choice Las drop, understanding surprise by have was brought days been on year Wynn a the is future. around days the options; the of was a the enjoy And in felt Baccarat's cannot except definitely Vegas Marilyn number for Baccarat for it of are coming Macau. customers best discounts, year. opening down Las give in over a rooms; the behind that increased in the to us replicate for team on was of try the in up and be place no maybe in it's the most. area free There's soft in, In And should they past, replicated. getting world. And jurisdictions the in the will for business. always to has growth marketing new it's anywhere in But she in time money her planet; experiencing product. where significantly hotel as that cannibalization. go about XXXX best infrastructure; Baccarat service now that carefully on the quarter, Macau and to lot call think people So as money new decades, decline I all to not some first pretty see Macau's last Las our States would credit that Baccarat the the focused a the impressed just is it what And the I Wynn or And and and it. but that and gaming They'll focus Vegas, say go new in United and areas for expansion Asia. to temporary the that entertainment a big long out is continue go that place it at or first us can't this Baccarat. for you focused everything ahead much disagree. market, line excluding lasts. table first for quite in they is the Macau can the we're people competitors and levels, that And quarter. What Marilyn We've with Vegas, I experienced totally

of believer And And so, jurisdictions firm in investigation Vegas is a positioned company last received Las product I future our MGC perfectly world, a in we our of regarding Massachusetts, In properly that Macau. and am the and very from are to their two situated best the those markets. bet profile decision on the week. both our growth growth the gaming

gaming the forward Harbor. Boston move Importantly, no impact key to we opening And hold in of on ready are the its of or the Encore of there was the suitability state. a to company, employees license

And if relates ability opening confident at still conditions of as that with company are imposed not processes the the and However, we the on the the regulatory of the be resources the we weeks. Though very and appeal We will regulators, will on secondary we resort to choose June. both focused great deal if feel the that tertiary impact within to it the do coast. open end the nicest integrated property are comes into some east reviewing our at it to decision this by project we commission. of believe

has Pavilion and that been company So a everybody some We've for over turn that us. is turmoil Wynn the before about XX Macau, significant remind is made I'd such phase growth project for we've is at transition. on Palace big in XXX if this really behind am company. significant believe months rooms we X,XXX it's at X profile, step through progress this Encore unparalleled and business. weeks. plus it. a We're you just to have look In excited continue now the about been Craig, why Palace Wynn needed I in look to future to Crystal grow our plus open last Harbor, you we're which to but over and our like Boston And EBITDA And it in in I in believer change a I to and our our there about that

coming in about property look have months, of convention a restaurants convention center doubling at six the a Las our over Vegas, new multiple we we the Here new fresh square have opening, think we next footage way business. into the and casino the amount

days big to and going Vegas and to the that, I So are are into of strong it believers am over Macau get Craig and I'm big With some all is details. we ahead that turn quite our believer best to growth it. profile of Las

Craig Billings

Matt. run you, Thank quarter. additional some on point I'll through the

release, of our of in operating $XXX.X adjusted noted delivered on $X.XX As operations revenues. our billion Macau million property EBITDA

core with month continued win its characterized ever in was As win year-over-year. choppiness strong was mass meaningful Matt drop, with March mass EBITDA. mass by up experiencing in offset mass, by core in main the floor quarter best in that particularly noted, segment, and property premium Palace mass and combined VIP XX.X% growth

from Palace Our results increasing million $XX were year. compared prior in Macau Bad in a to EBITDA the approximately expense $X.X Wynn debt at VIP Macau by normalized $XXX,XXX was positively level. hold, in quarter the by in million impacted

delivered year-over-year and net of the operations table spot of adjusted quarter in million $XXX.X non-Baccarat drop in Vegas EBITDA million Las with volumes. growth property on revenues $XXX Our

fourth revenues call, the group QX on from to negatively growth impacted discussed shift RevPAR a XXXX in As this year quarter. and beverage and quarter our large QX food

year in CapEx $XXX.X Wynn taking costs Bad taking outperformance in the approximately and project of our to-date We quarter. to million. prior high, $XXX during in deleverage space swing the negatively volumes to EBITDA. were on Compared at quarter total primary and property in the The Las from $X.XX commentary compared billion. the prior We call, operating billion, $X.X to-date of total group baccarat. the Boston, market spent million total spend such held XXX,XXX Las EBITDA million fourth million debt with bad Las impacted investments Las quarter. adding a and ended million including over debt $XX.X quarter million driver was Macau. to Consistent incurred expense we Vegas $X.X the In at to billion, the of additional Baccarat offsetting Vegas, total little with in year-over-year broader our the and debt $XXX.X EBITDA in expect We was increase. by the Wynn the quarter, Vegas the in spend cash the on $X.X second margin declines quarter, year declined RevPAR year-over-year Vegas $X to in and

pleased through to our million quarterly quarter, $X.XX or announce first to $XX recurring XX% the we're dividend payment. that During we quarterly returned today, shareholders increase dividend. And approximately to

we to per the dividend opportunistic over capital capital sharp warrant. million we allocation, dividend, Consistent increases to will priorities broader $XXX operator, with and per our will as now allocation focus recurring as that, share, valuation quarter one Our open With now evaluate well repurchases to continually periodic our call as is up shareholders. share returning Q&A. dollar on our

Operator

Instructions]. Thank [Operator you

from Our with comes Carlo Deutsche first Bank. question Santarelli

Your line open. is

Carlo Santarelli

if specifically back about, as talked Craig, at go discuss we or Palace. you Matt and Macau, guys can

premium that that base your XXXX, nice think obviously in some of should a able share the further some there. pivoting effort. the over you that Peninsula mass and would mass, the obviously Macau course margin seeing that you believe you making guys saw the positioning in the be say the losses Do and flattish and could of impact the loss you about really are about VIP of You in a at both share are of we of for mass environment you certainly boost given some perspective market for and changes in EBITDA would mass. a think in some positioning a If some your offset And to year? from you expect the growth with

Matt Maddox

XX%. to always hard that market within to looking, share we believe of end do lower in what's are will it's we product to our of to predict exactly range with we of stay a it, But that XX% When happen Macau. able it's going be --

our just you MGM has which product, Morpheus quite is As competition been ramping The know, nice ramping-up. is Mansion, up. opened

is its Cotai But continue about So really place. to maintain Palace Wynn Macau Wynn positioned feel share, and a we perfectly is really like XXXX. competitive is to

Carlo Santarelli

And I hearing guys some of is that's anything as guess the just then higher if follow-up cetera. ambiguity that impact your et some some it having pertains of you to from end could out that the of there, specifically right tariffs news now? Are I more the one players around

Matt Maddox

Bank, there data or anytime That's bit at I Las natural your world, forward. clear to is Vegas, a just of can't we're say moving little Deutsche us Shanghai. and the slowdown in think someone reaction. there it's feel me forward you uncertainty to whether sitting nervous, I all looking is in pointing that human a in office in

Operator

Our with JPMorgan. Greff comes from Joe question next

line Your open. is

Joe Greff

think structural aren't but I questions. news. experienced, things, two the of extent the to And second on macro, rather referred to demand Vegas Baccarat that M&A. or related us a questions most shifting function my capital what degree To softer is recently some Las maybe have geographies of I is or or the the I that its relates things outflows on about you to maybe One Matt, other surprised then to other? probably Crown say some, whether segment. mean,

for are What M&A question opportunities about Crown, are about strategically? goal when fit, general. evaluating are the So just and and that things but the my look criteria the what have M&A posts and the what that things you that you isn’t financially necessarily in

Matt Maddox

we trends going in Las on is Baccarat we really side, definitely the are we I any jump also seeing to second what first and don’t sustainable you But So long-term think now. experiencing the on be Marilyn And let in I'll exactly based better what seeing think are here. I think we're the than little understand. right quarter Vegas quarter

what long-term the be around Marilyn, with very a comfortable those is Baccarat you to Vegas customers think? Las Asia, want But I don’t I that. So, volumes. predicting global over and do destination from feel for

Marilyn Spiegel

these here would structural no players. impact change really that There's

So has back that headwinds. hopefully what global it's players that's been. that think all be if And the these will I the past

Matt Maddox

On capital Boston spend in Encore start about my so capital Harbor as front, cash assets of will cities that in first which become after I the we dividend it licenses laid large -- always for assets as flow, our And global behind open opportunities multiyear the by our are are growth we class free one this comes tier opening looking the really X year. development reasons be destinations. M&A us really raised program is that quite to is protected XX% a generating for of that that are pipeline Joe to is When and out remarks, lots we're robust. now with M&A,

are with all through that will you stage, our I'm development. pursuing at while be we at acquisitions along competitors, looking So we can't any of sure, not this opportunities replicate

are We're focused shareholder will at We continually free hurting company cash value enhance we development on without our without story. profile a increasing projects. leverage and to flow our heart. new look But

Operator

from with next Our Barclays. comes Felicia question Hendrix

open. is line Your

Felicia Hendrix

the coming is issue, in calls past lot quarter which second. XX% Matt, And looks still on could a a back your decline want stay more the the your you’ve the to the math reconcile that mass did commentary XX% just just in I'm If you to this in share I use strength trying layers core. like sequentially. said market with a share little DCIJ for me that bit range just the you to if with It help but on saw you flawed. we realized data, the and

So into didn't gaining is more you read just did that? all that core but that you're would premium, it it. lose but Is that basically just you offset because

Matt Maddox

exactly That's right.

down. definitely is XX% business keep to by around which in mass So not is up lost enough town up was mass in Core mass premium over premium, we bet, it market. average we define us the our by share for that and was some premium the and mass, geography share core but

strategy was in up X% sequentially, this because I then that on shows People is and the that Wynn is working Wynn think get you've And really roughly premium watching time. our it for VIP -- that on our get can more focused was a Wynn and growth compete But Felicia, Macau we're and mass, and Palace long that's was than reliant temporarily, less any markets. that market. the core that segment. really And happens. been because the Premium business always compressed there. and

know be do don't know I going that the that is long is I is to what So but area still there. how demand compressed,

situated that to comfortable going business begins very feel we so it. we're when And be come to perfectly that back, capture to

Felicia Hendrix

perhaps answering early earlier were we're also said, in to now Is May? indicative then the of seeing XX% at Carlo's you the you range, question, in XX% when end. stay you're that what we'll talking And and lower

Craig Billings

the growth continued through a in core that's the May. well. market that would we have mass And truly -- as we very It's into QX market. that premium math towards don’t occurred skew QX really serving I end wide trends

are to that others from who there much there as partially segment. because mass, core market So benefit directly clearly in growth that, but is the cater that market, the we outsized in not the to as extent will

Felicia Hendrix

that's say I've beginning like talk don’t And And new Matt general, comment that gaming about heard I've heard not some globally in a on Wynn, call comments, Macau. you just this. that general, you experiencing to in I a in perhaps this believe you or of and are a eluded clarification, competition at the your while

quarter? relative So interpret how to comment your performance in would we the the

Matt Maddox

they the are of Well, places the the Macau always In impact global just and jurisdictions not they people I emerging don’t an to emerging. are commenting could to don't right over gaming large that longer back lot at Asia into think a the now. that and competitors quarter But in tertiary be could. you I Las they most. all. should enjoy that those I've in by And jurisdictions. on some look performance in going have markets, the noticed that tend particular another small on short-term, term, just to the our people believe the seeing cannibalized Vega that be We're go these

the market And so to to this be and believe I will just addressing of long-term wasn’t addressing Vegas. relative success I seeing in that we quarter, the Macau relative was and Las we're what it what

Operator

And Shaun of with have Bank we next America. Kelley

Your line open. is

Shaun Kelley

could shift just also competition a with in around. I other I stick to trends is product now some there Macau we in to called the pretty you think talked might markets. Do do Or you're to your that move just we're year at -- the moving just Meaning share QX? right relate it this comfortable is and Matt, of moment? we is environment you fairly forward. about could think is normalized core out think that there, and were with you the environment what relates the But the think as more Maybe as you it this market as seeing with this competition in situated how

Matt Maddox

definitely years. gaming are on There environment no scale right the I next now. jurisdictions think we're large Shaun, few normalized in coming in the

do junket that? move places come will temporary the you to but any on operators have Some want to may customers the Ian, around, that's back business where thoughts it always and go.

Ian Coughlan

always up back. We're in comes through it to then VIP Wynn's, back Macau, gravitate And variety there it to ticks up. a of for People this periods volatility, we of after when sporadic it reasons. years go always quality. XX pick We these get

sunshine. We game backed other people when out. the hay while stayed we the made So junket in

and what and to to there's true always We're grow back. In come incentives. on mass remain meantime, premium we've commissions Now, people general going the and mass. pressure will done, we

Shaun Kelley

in to are Peninsula, how throughout the obviously to walk progress that expect undergoing year? a you meaningful but anything renovation not, we disruption through and you a was that. we the throughout how continuing that of of us Could scene, then should balance there And meaningful or just should same about there QX? there of you cadence the moving the back a year? there. then Was there or think out was think is about how worth the calling If number balance the And

Matt Maddox

jump that Ian. there over I'll out, number in construction calling any casino think lot is then should we to generating I was I'll what a turn and sleepy before a actually wasn’t don’t because it of So the we be had business. that

growth Tower, to that So, and are what of been But, right I this? really thoughts which think business. out on Encore We to order And the putting is impactful CapEx this work. judge Ian, XXXX it's hard in Wynn ability. your to more we're year our the have rooms is definitely of now. its earning have on quantify Macau

Ian Coughlan

hasn't with the There noise in dealt significant stages. all early disruption was been that

in terms, the brought it retail we're anywhere back there's in We affected as it's that to energy to not XX forward in a of out XXX year. of has significant. And not progressively. areas complete at Encore, looking It to at effect to And wall space. we when getting the and do end and rooms to it them bit any put the work, we're general time does you getting the brands. a affect wall have from number up given hoarding a there is the new little But

Operator

Stanley. Allen The next comes with from Thomas Morgan question

Your line is open.

Thomas Allen

afternoon. Good Hey.

how Marilyn you're at about about casino some made you you Can the guys Vegas. changes taking remarks, maybe back? talk how So, you. talk in talked just prepared about and a the since in your look of thinking coming fresh Thank business you're you

Marilyn Spiegel

the So, at us that really and received. use grow food been who well with to block folks invite it's our the and stay take key town, beverage to our look hotel to the and come a to casino been to has offerings, and to and experience who didn't

we've So, past. block it the very nice the seen as casino growth to in relates

Thomas Allen

that parking fees, I think a decision. removed can talk you the just little then, bit you about And

Marilyn Spiegel

do When about was garage people you came frankly drive the frankly folks but a you those you who who if most here fees, would although $XX, the into think come to you parking $XX, spent parking spend more why validation, it here had an and than upset irritant and them.

customers. pleased did well been local so It helps forward that very we it. that. also end with received, And high us our so, It's on we've we're moved

Thomas Allen

a things just Helpful. And property? line are infrastructure in around half quickly of the a then, you. staffing we're out, getting and on month Thank in then mean, in Boston, I progressing the how terms and

Matt Maddox

The The have complete. we great construction is people within or XX% Staffing, almost offer. the building looks in onboard essentially either it like is of shape.

need don't we So, to and everything the flawless. challenge. has we're regulatory to complexity date great are sure complete clearly, have a opening -- to in or make we've going two line know because June been that be time a the on almost it's opening. will if through And later week a we XXrd or been I to

now are ground there we we so, the team And have terrific. is And on back. the doubling

are We give self week, but open. we may to We ready property looks not, our the another great. may

Thomas Allen

to Thanks. seeing forward Looking it.

Operator

Harry Our Curtis next from comes with Instinet. question

Your line is open.

Harry Curtis

good Hi and afternoon.

for given of labor. to to when the ramp rich kind and a particularly margins, we're the service open, probably levels in in expectations topic begin of they on to that set good high While Wynn run time properties Boston, now's Boston, tend most

if could front? take that on some the So, opportunity you to set expectations

Craig Billings

Yes.

say know, properties, for properties early do given level attrition to only on as run I some service not that slowly levels but assessment you regional think tend ramp a to very it's fair from much account a marketing tend to more high our of perspective. and

margin all certainly, ‘XX. the specific to through up that would over the expect property yet. ramp any way we of and course or numbers specific expectations any given haven’t we So, But ‘XX

Harry Curtis

you you the Very just what details going good. are and excited And about? timing, about is, features to that can Pavilion, question back second Crystal share cost

Matt Maddox

on So, now, that Harry. we’re working

the a a find pretty them think sure interesting. public an that not a We're through in of have finalizing the out Day couple the lot in it going next program. Pavilion We are road. of very will features different of if else something way. to this be will the you we’ll Crystal or that reveal are down I be Analyst I'm be It going laying months to

Harry Curtis

And customers about Okay. just because to commentary in do trying there To some your back just agent going the question, of Macau, some then, customers Macau these has really just those degree lot my environment smaller, regulatory of tighter? think newer what you in some are gravitating last casinos. just gotten a

Matt Maddox

the commissions, don’t they open, properties -- think marketing new offer I And But in credit I typically is, bigger because that's places people case when say temporary. times at will that's in think and larger lines, often that the very their jurisdictions. they more are all. liquidity, these fact

Operator

line from Goldman Stephen question next comes of with the Grambling Our Sachs.

Your is open. line

Stephen Grambling

more properties Boston for essentially flow property cash but CapEx, to investment, And of through can versus only versus the broadly? us in With can property complete your inflects, the as that remind shareholders growth stack cash investments? across terms how you back you think not debt just you how redeploying

Craig Billings

early XXXX. group the opening then ‘XX. and those additional the obviously as in will of accrued trailing Las the throughout Boston, we And on get the in remaining pay some subsequent out working Vegas have Stephen. back Sure, we convention Well, space construction cost; paid of CapEx, that we are opens as up and well, then, right, remainder to

is And and in that XX% of you absolutely for the flow return about. return think mind belief our belief is approaching, inflection an today our cornerstone in I cash capital you capital really saw that and business is we point really of top note, It’s indicator the inflection that you us. point. talk raised The policy. our rapidly of as XXXX really, recurring So, as dividend our

that's dry generate immediately capital some valuation As the whether and flow, Pavilion, Crystal and for carefully opportunistic or And repurchases be the growth opportunities, we notably with really grow of respect repurchases, that available future powder always share then, dependent most with we additional on then we’ll opportunities, but the to maintenance return course will share between free Japan cash prioritize otherwise. of stock.

Operator

Next question comes Citigroup. Daswani Anil from with

line Your open. is

Anil Daswani

my for question. taking Thanks

mass regards The the seeing this Macau base properties room your eating that first inventory at business is strength in my terms first base question? question in with much is the the at ratio business. both of into we're to Palace How that the comp is and different mass and

Matt Maddox

our take order to for you a lowered mean, in get Ian, haven't Macau. in we that? comped I threshold ADT do not -- to want room

So, sure you have means in qualify I'm way. exactly, not having what certain eating rooms. a not into junket we're to many Clearly as still

our know, Wynn rooms we and the enough Anil, weekends, rooms, you is have problem, we And out don't more of So, as at need space. really Palace. we're that's -- at

just more being and direct have of mass so, reflection rooms VIP And customers are direct do down. getting a Ian, you as any thoughts?

Ian Coughlan

mass the better business rooms. those junket we're We've over customers correct. in that's the on ADTs way allocations, putting So, from is our And been weighing able segment. to rooms to shift gainfully this up,

and level for the they've for comp Wynn are been in Wynn the what ratios past, XX% around So, XX% Palace similar to Macau.

Anil Daswani

I is, committed could mean, and you Matt as question are still you have the to guys been Japan? my any Osaka in And progress the in on as give in you update past? that final us

Matt Maddox

are. We

be actually a will making trip next there We week.

team the so, And we a have on ground.

have We Japan. relationships focused with we're quietly in the on a United focused that's We're And building team here Japan. there. jurisdictions various partners over on potential States our in

see over we be long fit. and So, the we're at term. And the continuing looking where we monitor to situation participate this will

Anil Daswani

taking Thanks questions. my for

Matt Maddox

Anil. Thanks

Operator

David question Jefferies. last Katz And with from comes our

open. is line Your

David Katz

meat any levels Hi. about accretion. to think us leverage to everyone. boundaries and back But, a I I other attributes more that's wanted the value-driven what different can help about in helpful. of Good may right, segments those where whether little you you out? just afternoon, M&A aspects be really to branch of A go customers said little heard there the sort on help that of market, you would might bit. be bones And strategic more compelling

Matt Maddox

into the for not lay tell hate to value to out do. not go business. But, going you what everybody, I'll David. We're our to I we're strategy going

looking We and quality are world. the quality assets we be regional operators. we're not high-end around will operators We're operators, gaming at

So, gaming where given for be be of significant a regional going an properties that's in way, to not area sale. lots there we're will branching likely out

it So, we're continue focused on in are where areas and those we And faster focused look accretive fits we right it a that there that and where opportunities our we We now to But long-term and growth believe happening will the at do grow take on. shareholders, we're the to will be growth it if profile is will capture with it. believe anything Asia West. than our Company able not be our will for globally. have

Operator

like over now our to to final it back thoughts. for closing I'd host turn

Matt Maddox

everyone to operator. Well, you And look you today. joining you, thank forward next we talking quarter. Thank us for to

Operator

That you concludes conference. Thank today's you. for participating. Thank

disconnect. may You now