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WYNN Wynn Resorts

Participants
Craig Billings President, CFO & Treasurer
Matthew Maddox CEO & Director
Marilyn Spiegel President
Brian Gullbrants President, Encore Boston Harbor
Ian Coughlan President & Executive Director, Wynn Macau Limited
Carlo Santarelli Deutsche Bank
David Katz Jefferies
Joseph Greff JPMorgan Chase & Co.
Felicia Hendrix Barclays Bank
Shaun Kelley Bank of America Merrill Lynch
Thomas Allen Morgan Stanley
Stephen Grambling Goldman Sachs Group
Call transcript
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Operator

Welcome to the Wynn Resorts Second Quarter 2020 Earnings Call. [Operator Instructions]. I will now turn the line over to Craig Billings, President and Chief Financial Officer. Sir, you may begin.

Craig Billings

Thank you, operator, and good afternoon, everyone.

me Vegas. Matt with Spiegel and call Las in the today Maddox; are Marilyn On the are on Luvisutto; Also line and Carruthers; Chen; Brian Frederic Ciaran Gullbrants. Ian Coughlan; Linda forward-looking laws, and statements remind we you I come may those safe want securities may may to make federal harbor statements not that true. or under turn over to now will I Matt. the call

Matthew Maddox

today. Craig, thank Thanks, and you, everybody, for joining

that in decision were what As occurred in facilities invest a back going made we One a and the closure in we our know going industry. that to at our long has believe, brands culture. back end and look what our of became March hospitality is we we did in closed and us gold Because over our this and When our lead are to XXXX, we that continue in of brand in I the through members benefits us out will March lead the in to that, industry. Las their health this guidelines decided Vegas Macau, team and and we term, comprehensive in the wages during the culture thing Boston fact, closure, borders and allow the to in restricted to also full XX,XXX developed standard through were we pay the is safety all we May. in

we're during go When of when June, we going knew month expense been our days made so customers live your on of the Vegas, of to and staff, test immediately of couple is of developed the made XXX these reopen surveil walk what cameras the normalized before performed we tracers back proud response you we've on people of from XXX through were XX UV all day." and of tests, began positive the and talking I'm as going only The go team staffing University, cash. an particularly protocols home technology a that our we interview to we're preparing doing. an imperative, the in sanitization process, randomly contacted But they we now outside demand and XXX going we the did And as week, but with roughly extensive Of our spray basis, we be to. her were exposed everyone negative. we we same Not to XX staff contact us, test our brand. Georgetown in and and employees have electrostatic that those that of we that million to that her course, We I've perspective, brand that's who tough we our tracers and opened. to Pandemic $X to outside safest your thermal And just have place Each numbers, employees the has we part that along, is through our XX,XXX take probably clear is algorithm but "Wynn in-house. things XX% XX% our weeks, June decisions, Security efforts that our where of testing one contact Wynn. in temperatures. X our started, about capability. very put I Las every in Global to we last our and To were and That's some and our and come everything rightsizing and Research sit at all of opened. That's Las since were Health of talk culture EBITDA. them week, head in structure XXX people and Vegas, roughly And was, are, all up

keep and is but culture here focus intact, brand our keep our also continue Our that our we cash. keep to

in reduced sitting after in going was our third And quarter, our XX-odd were key weeks. in at over money. our making reservations, June. We're in days Vegas, a to here that managing staffed would pent-up the on We are the be million. notice into $X of Arizona, is here drive end did reservations X,XXX we particular July. business to And saw upcoming day XX% demand, markets based focus spread in receiving and there we to demand. virus spike California Xth roughly in And day appropriately. roughly Las in or we then began that We some We opened a Wynn the EBITDA even breaking roughly downtick from every on continue the as California as X

during drive to closure of the So expenses, Las Vegas and and the bookings occupancy of It's markets. month weekends experiencing making impossible or quite end of the every is million mid-XX% it out the will short-term because these And a on visibility outside is $X day key our predict our whether we're million our month. restriction Wynn $XX times really on drive-in hands XXs really markets. in that a focused going be it's We're on the what's murky and from during week. in and

what in And the Encore experiencing They're to place. fact disproportionately Table Harbor regional significantly around We Slot July off of units. volumes probably on is are that Encore the the mid-July, quarter. are we up last actually. Boston very and on property other reduced jurisdictions relative XX restrictions to in experiencing are Massachusetts on volumes actually because are year Harbor tight in casinos not some in country. over in quite Moving good. that many second Massachusetts. Boston in were Clearly, opened open

we the still with closely limited and do the safe side. craps to roulette how open. the way. are example, show can MGC in on We're very an number working are a physicians that not of As table And

quarter. restrictions. So is In second good table current like feels is games more travel similar first our Macau, and for quarter than And the just in I do what limited markets demand our Macau there, there about of the was is by think direction supply to the progress. really it's local

and that watching the then visas, bubble to and notice the issued X eliminating restrictions, to was whether be continued month people So you beginning call travel visas a between all province will this as tourist Macau, allowing begin. it going are talk individual visa in nontourist for there's every I'm Macau, the Guangdong this the when and sure restrictions traveler quarantine reduction Guangdong for that Macau and among weeks, the of slight various of the province about on scheme,

And are seems to new, happening we that that and While bubble step travel small we will do forward. be week, business. when on are And Macau that, going begins in that each back dates incremental issued, there a XXXX. tourist have start, being not is be will confident in open visas to any once to be

we the So color maintaining our want brand, that before it to I our be in cash. to I going hand focused back on stress quarter, to leading our culture on and give maintaining just to industry, over maintaining more are Craig our

that be the we when make there and So want winners that losers available have out and out, And will sure to come of come over, this we we is capital this. ahead people our I'll have to we for over thoughts. care in and go additional Craig to place our turn of the grow, and With customers. it culture take to and that,

Craig Billings

the and through everyone earnings entire release closure remind I the Matt. Harbor Boston of to for in the of X results June closure our that quarter. presented reflect Las you, Thank Wynn Vegas Encore the want

adjustments handle weakened weighted in Matt business to operating light forecasted a year-over-year, volumes. up trends As per Las of at approximately that reopening generated the has business day to drop heavily the lower with a X% down including noted, current EBITDA from million in absence is number casino, we operating due to business the was to second to visitor of while $X year-over-year, occupancy. table reopening, key subsequent per Wynn the Vegas, Las slot to our primarily of resilient of subsequent day has staffing. normalized been XX% Vegas quarter In business segments, and team baccarat made In

QX Las million to declined result, levels, gaming per XXXX our a in $X.X in approximately day OpEx As taxes have XX% July. daily Vegas, from excluding

expect few closure. over are of cash in on daily with experienced place. And improvement a the Boston, over we noted, restrictions slightly Las We early be we reopened EBITDA number focused next substantial safety-related rate In we to Matt the in during a as to burn positive the July months, cash generation operating Vegas. breakeven in

Our to trends particularly XX% in Vegas, remained reopening approximately we've daily of the plan operating adjustments, weekdays. volumes there taxes support to up due made amenities including of with a was gaming in handle in in Similar XXXX. the the July. subdued focused resulting Overall, encouraging approximately restrictions most number XXXX quarter hotel per place on opening reopening casino, of reduction we versus that only Macau, those per operating X% QX Las in seen the closure In of in day the slots from staffing on throughout and travel excluding day region. post QX the OpEx, a $XXX,XXX to ongoing business casino,

with to fixed have of costs. on await visitation focus the the return we OpEx certain we market, a While made adjustments nonlabor

anticipate volumes. anticipate we that result, we at to million $X.X of a even day. point, approximately gradually daily XX% a QX XXXX of million improving As burn we EBITDA $X Until gaming that will per break

of billion pandemic. with with Friday, we And of last In $X.X to position U.S., providing weather we U.S.-based reopening lower the XX, was to over July cash approximately had burn total daily our and billion subsequent significant as $X.X liquidity $X.X our liquidity of a available of of as substantially liquidity properties. us global July As the July billion, had of Macau, in cash XX. XX, runway available domestic the

the million. in was quarter CapEx $XX Our

quarter, highest we our the are and of proceeding plans CapEx only hold, with projects. remain last noted our As majority on priority vast

like of second X amount in our million the pay first OpEx team OpEx to we Lastly, and this from $XX.X of members with XXXX. everyone in our quarter and benefits prior through was of the XX, I'd XXXX, not May accrued full to in domestic wages thus, quarter April commitment remind included associated that

benefited a net company the in turn call the close received from a expense the to of the in derivative after settlement to litigation will the With $XX.X corporate now million that, quarter. that gain Additionally, we quarter Q&A. relation over

Operator

[Operator Santarelli Bank. Instructions]. Deutsche Carlo from

Carlo Santarelli

of in to at XX% presumably out any in were Guangdong, bit travel point a two? the of easy potential we and somewhat required. of kind XQ your coming XX% that XXX of were looking a could and trend policies, comments earlier about kind that of points you for remarks see every is your fourth the investments, continue or with just more mentioned week month just if but or to level of quarter, taken would that that you've in year free the breakeven Matt, basis at we a GGR Craig, of be loosening requirement that the relative X this the there if little for Macau out even

Matthew Maddox

that that discuss and hopeful That's we're quarter, fourth about be we XXXX what level. we is in how internally to the at think

Carlo Santarelli

Great. in said point revenue current Okay. then, And to Craig, run levels current million terms the correct? that a million of clarification day OpEx at the on burn that per for Is is $X.X the Macau, $X rate you just rate. of

Craig Billings

million we would Yes. be a in in revenue $X.X how this all the a based situation but environment. in would be revenue $X discussed modest zero ad that's that points time. about million at a visa -- have very moment it's been it fluid environment, We on think nauseam, and

Operator

next question from Katz And from comes our David Jefferies.

David Katz

mix Macau evolves? side, and at of improves. suggests what as the those generating the about in Vegas terms the your respect near Vegas Matt, the thought you With around to term demand we and are Las of with Las or are it strategies where there, commentary recovery have respect But demand world the we in properties changing to as

Matthew Maddox

So model. different a it's effectively right certainly regional We're casino now. a very business super

large nightclub the the the super regional. we've become shows, without without base, So convention crowd, without

really we're Arizona, often to frequency and spend we have so more. of focused promos, lots come So more California to We're offers, basically with try to worth and on on from things here JetSuiteX. to doing partnerships people get

obviously. And down for is database now, business. of more So Non-gaming focused revenue and is that And on our very X/X by revenue. casino X/X. our the was we're market right us promotional driving

in a here drive-in beds frequent we So really we're heads on focused of on get hotel more how doing everything we our and in can to basis. more market get can the

David Katz

some prepare or far what for normal, for new come the to there'll and hard respect Understood. start have to kinds and, are make, that out But meeting And groups with of come to when group may so fact obviously, changes that up in? to need to that you be if restrictions getting planners planners can to you evolving know. or to I at about what talk team planned there groups are done least follow to your

Matthew Maddox

sure. Yes,

I the predict think that now. no future one can right

'XX changes at And year that technologies for exciting if game testing on we all off pooling, -- most have it people kind a the like which time because what of a time Emergency happen I provides point-of-care can that with groups to their There's Use the So X-minute into those you to they moving that I'm is are doing, peers, can under we half of point-of-care really holding turnaround looks we and are I a a groups. the think than in EUA, thing on-site forward. are what's Authorization, get late line One decide that, spring XX need. believe if back FDA, do until meaning testing. lot couple of our going that is of of next spending probably different we're

So can to you're year, this walking mid-next if have until space point-of-care waiting actually into that show maybe the everyone not is you COVID-free. testing

groups. coming I stuff that, especially by tests those much yet, by has down our are cost, approved don't not approved are accelerate, the some but FDA, but smaller that And That pooling significantly. moving yet point-of-care think not could they're ramp-up -- fast. months, the with know, how of the of been I

before is I knows, as a and we and into complicated and a get implemented, So be belief in requires I the those sort need by out my that the vaccine. think think time. of the place bridge a people approved time Because that lot to are of that's things everyone to together lot to that's rolled of we're take

to to safe a to addition that So our do measures those talking are about social groups the experience. the in distancing and provide types all we're of we things everything really

coming ongoing, is, are we think, conversations say I when back too groups the knew start early. so to it's And that but could

Operator

Our next comes question from from Joe JPMorgan. Greff

Joseph Greff

theoretical of from Hong maybe is question of and but whatever into what ways take how are to restored, for a that maybe [Technical play GGR travel to to sense there issues no perspective, percentage the to theme get market. the is maybe Macau, good back is market there ask a and account shut Kong fully Kong like If IDS Kong, of taking a Macau reason, comes Hong I'd a Hong to kind important important through Macau Difficulty].

Matthew Maddox

that I'm going Yes, one. sure. to let take Ian

Ian Coughlan

closure So We locally, if GGR or customers. you bubble Joe, it is XX%, being year's benefit into XX% last of Hong year. Hong think tourist from closed once with Kong, we Hong at and visitation Macau, between Kong, from mainland for And PRC look get Chinese the travelers visas XX% GGR. perspective, Kong a actually X% probably represents of of the opens fully with the will Guangdong to last

is Kong XX we from the Hong for are market in but Guangdong. So Guangdong. a comes power us, of good XX really cities IVS the believe

lift business will believe So that significantly. our that, once that we up, opens

Joseph Greff

Las Great. And then, Vegas. Craig, back to

July Is not an after some is OpEx was said you $X.X changes run labor rate staffing OpEx in staffing the of that day with staffing a the a recently, per You average differential made monthly or changes more million. there? daily full sort that of of with amount the

Craig Billings

It's now. the based on have the in of what latest is former, Joe. right state place play we It

Operator

Hendrix And Felicia with our question next from Barclays. comes

Felicia Hendrix

you thing. room tough thinking of have before, to price unveil kind to kind really that environment help in wondering just XXXX, trying also, groups terms it's you you just how of could versus the levers about sort property, Las of the forth. But maintaining just of have where property. of and in in and you're I of Vegas. normal Matt, the just is, how you're a terms us the how of understand because you're as terms the occupancy is on you integrity And managing And what of you then touched you'd there? visitations so don't it if nights now [indiscernible], convention And So if in could were percentage sticking all upon yield spend this benefit know drive

Matthew Maddox

Sure.

power, Felicia, right pricing it's very you're about So complicated.

at to day so the day every market fact, we In the short because and all at the move is price is have yielding looking every ability tough. quite trends a meeting, term XX:XX,

choosing are yield when on to stays attempting of into price. booking lot there's We're last-minute customers coming particular weekends in, So for X-day going Saturdays. a in on

And really where see the very market -- are so online, you go is if Midweek, those pricing. tough. you can opportunities. very, It's a the

-- the best Marilyn, convention XXXX are for means bit choosing you midweek the little a us mix to it what now? and as and want really on so attempting And as about can. it's the to customers weekends we yield and talk we're

Marilyn Spiegel

now, books for XXXX. not are much clearly, we're groups refill. And for left there's Well, that to trying there on small the

having, advantage of one, two, a very the relationships convention and; long-term have great sales We facility our with folks.

in So successful them. very rebooking we've been

You'll is see that half 'XX. second going the to be very 'XX, 'XX strong, of

that. So coming and they're people seeing are

going a groups The about of about there's that and out. on first see April, XXXX, first and we other quarter to the Clearly, CES But second with year every is are this, quarters. falling of are quarter what's market. the 'XX firmness by the some best lot how ahead be quarter in going

we up we it's a question that business. it's do the for but too way of by of rest time And addition shows the April the tell early and all the an this firmness the any missed see to to -- quarter XXXX rest mark year, first in And going if so XXXX, through year. because the there's is comes,

Felicia Hendrix

And normally... then just

Matthew Maddox

around convention. was X/X, This

Marilyn Spiegel

Correct.

Felicia Hendrix

Okay.

in you see do think that able would Macau? And gets my of the tomorrow. hypothetically, being follow-up, lag as just, to come Ian, traffic just IVS you to What to is period when then terms reinstated Okay. start the

Ian Coughlan

for a there's meaningful that weeks. visa we see will some and to it going of start clamor visas clear within offices be jammed So to we're up, but traffic a will And we'll get over weeks. of couple the X imagine hoping

Operator

from next comes Kelley Our with Shaun Bank question America. of

Shaun Kelley

wanted of on kind super regional Las lot rate get idea a little around run of your sort the the questions of Vegas. on we And follow margins. the Just comments up of is some Matt, comment on on to a comparison Vegas' interesting.

I are know that markets think well. the regional all performing we quite

any right little on what's on rate can curious the Just there extrapolate move Is bit, can a learning like? of there? fly into component customers operating might expense about of going undoubtedly you you've of kind the -- thought I of lowered your what margin on just the you thoughts early and operate a you're Las what do and structure how now Do kind and the that ton on appreciate it's buildings. wildly run now? think your but process look theoretical, Vegas's you future in

Matthew Maddox

our Yes, regional, X/X our that's is percent. know, you meant markets. from as what sure. our are nongaming, customers revenue, And like by I was are down by business when revenues XX-plus coming super of said that a drive-in and But revenue. When market regional I our not

spend though and absolutely okay, to So can't you margins we're getting is company. -- brand even culture and gaming without cut better your your destroying way

You not our market, it going to. can't and in we're do

EBITDA down focused long because and we're for So term. almost want -- our make who XX%, flow cash expenses preserving while we cash, and on our are preserving not we're on to making we the margin we're we sure are we're

Shaun Kelley

right? other the profile that idea shockingly Got good maybe think Boston, phase, it as we I mean numbers property really around. seen our was there. helpful. about been this a really hard But around regional relates have a ramp-up get arms And of margin similar markets, in it. That's to broader have sort we so as then to just

possible per you of gets sense OpEx of $XXX,XXX get Or out of need of does more that types where kind pencil around property where volume? breakeven numbers to? any you these that or as EBITDA potential Is or to positive do kind you Just day targeting there? on

Matthew Maddox

color let provide possible. I'll some Yes, customers take our sure. on And That's then that and Craig there. Brian

Craig Billings

Sure. Shaun. right, Yes, you're

Today, OpEx. we $X.X If about million about to in back look $XXX,XXX. you it's QX 'XX, had

we mentioned down that significantly QX. pretty If you down happening drop versus positions. XX%, was XX% handle what's about the we're of terms slot think but in in is up about Table business, about

back, environment only EBITDA. obviously can OpEx will as reductions this that breakeven comes volume So we've in with we the And we not anticipate meaningful we table done. generate that that pretty

what expenses of But of not come will chunk open done in amenity more and is Some nature, back. going we're any it's unless good a permanent those to we've accretive.

Shaun Kelley

Great. That's helpful.

Craig Billings

have anything you to you Brian, that? add do would

Brian Gullbrants

said. Well No.

Operator

And Allen from our next Thomas question with Stanley. Morgan comes

Thomas Allen

Can update casino us latest your a on operating you Japan? on in views just

Matthew Maddox

Sure.

have Japan being in you as So monitoring following have as us, more the that I been our over to active. think opposed of last most really decade efforts been

that for there's just going in regulations It have really monitoring we about market. that are what right situation world like, that ago. over is pretty years been interested look company. the the on the business the now, look months clarity our We much and back years. there, efforts. X to a is until years not for and what It what like they not and that did that We going we're more And doesn't decided to it's our focus ceasing in means were mean March,

Thomas Allen

just progress interest state in budgets, that in view in helpful, that? with see some think hitting markets COVID York, expanding like U.S., may terms Any the And New That's that to there's you Matt. in of Georgia. legalization, potentially a then in I potentially more

Matthew Maddox

say that agreements would seeing for rate, now. tax right that required, are be one right I clearly, is do. I each would of surrounding environment, community under there have right be right -- that Atlanta regulatory would the any those take think what under us I We market to something market, New or would But we at. the a we -- York attractive the look support would be what think the can't the without able to under

Craig Billings

question. With that, last take our we'll

Operator

that Goldman Grambling Sachs. Stephen And comes with from

Stephen Grambling

driving characterize customers VIP other to a up once about credit junkets you lift? would restrictions recovery attract direct how Macau, investors for any be financial in ramping thinking the begin and marketing should On health to and additional of the and how relevance

Matthew Maddox

we don't that talk quite fun sure. Yes, take topic about a bit internally. Ian, you one? A why

Ian Coughlan

the question, the I of part broke. first missed the line

Matthew Maddox

Junket health.

Ian Coughlan

of we've junket the health. operators Palace. largest a Wynn handful Junket Macau Wynn at Well, and got

they've their And bigger together. and capitalized, ourselves, outside, from tourist teams with waiting resuming the breath deal for we kept of they the they're operators. So with well the bated like, visas. They're, look

believe So their aligned will business. we business that build our with

Stephen Grambling

And we the other mean, just -- that the support, your broader is on assuming second some terms do or group being from part, you of should generally either in across direct of credit be I VIP restrictions form there promotional anticipating ramping just marketing extended as lift? -- or

Ian Coughlan

general operators huge I the hoping and each we're The increase expenses. expenses. to don't be we'll believe activity the to about in Everybody's a throats. we're is among sentiment going locally of And visas for marketing reasonable tourist back not that once cut come going marketing lots see other's

Matthew Maddox

Well, thank talking you. Thank us to right. to All you, next everybody, today. you joining look for quarter. forward We

Craig Billings

Thank you.

Operator

call. conference today's concludes This you. thank And

disconnect may ahead time. and this You at go