Politics Not an Issue with Macau
Joseph Greff – JPMorgan: A big picture question for you on account, perhaps Linda if you can chime in, on the recent Macau gaming revenue deceleration, obviously we’ve seen a number of Mainland China economic measures like GDP growth slow and that’s certainly a reason for the recent market-wide performance. I guess my question is this, to what extent is the recent performance driven by non-economic factors, say political ones, such as wealthy VIP patrons maybe visiting Macau less and waiting for the government changeover later in the year, is that a factor, how big of one, what are your players or junkets telling you in this regard?
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Stephen A. Wynn – Chairman and CEO: Nothing in regard to that, Joe, unless Linda has something to say, I don’t think we sell that kind of – Linda, am I wrong or would you take that.
Linda Chen – President, Wynn International Marketing, Ltd: You’re correct, yes. I definitely don’t think any of the slowdown is caused by any of the political or other issues. Outside, like you said, outside of the economic issue, I think some of its intentional too, the junkets are being responsible by controlling credit and so are we. So, part of the slowdown back I think very healthy controlled growth. I don’t know if we can really expect 20% growth year-to-year to be reasonable. Macau is growing at 7 to 8 percentages comparable to the China GDP growth.
Joseph Greff – JPMorgan: Has there been a mix shift between direct and junket in the VIP segment in the second quarter?
Linda Chen – President, Wynn International Marketing, Ltd: No, I don’t think there is much of a change between direct and junket. There is actually a growth in the mass market, if you will, mass compared to VIP, because we do have more mass that shortly got opened in the second quarter.
Joseph Greff – JPMorgan: Matt, I have a couple of quick modeling questions. How much of the cash balance is Macau?
Matt Maddox – CFO and Treasurer: Of the $1.9 billion, around $500 million is at (baccarat) and $600 million in Macau, and the rest is in Las Vegas from the bond yield.
Joseph Greff – JPMorgan: Then, how much CapEx in the second half of this year related to the Cotai development?
Matt Maddox – CFO and Treasurer: In the second half of this year? It looks like it will probably spin somewhere in the neighborhood of $150 million on foundations over the next nine months or so.
Stephen A. Wynn – Chairman and CEO: Lot of land remediation as we mentioned last time Joe, as we drive that property out and start to sink foundations.
Matt Maddox – CFO and Treasurer: In the second quarter, we spent $58 million in Cotai, $58 million of which was land related, and we spent about $140 million total on Cotai so far. $112 million of that has been related to the land and another $27 million on the land remediation, and there’s probably $150 million to go over the next nine to 12 months.
Shaun Kelley – Bank of America Merrill Lynch: Matt, just a follow-up on two more housekeeping questions for you. We were kind of calculating something like $30 million to $35 million of EBITDA impact from kind of hold swing to tend to normalize it in Vegas. Any chance we can get you to comment on that? Sometimes I know you like to or not like to?
Matt Maddox – CFO and Treasurer: Yes. I will this quarter, because we only held 9% in the second quarter in baccarat which is almost 18 or 19 points lower than it should have been. If you normalize everything including the adjustments, this quarter would have come in around $116 million because of the baccarat, baccarat as Steve pointed out (indiscernible).
Stephen A. Wynn – Chairman and CEO: In April for the first time in 45 years I saw baccarat go minus for a month. We never saw that before. But on the other hand last year I saw 37% hold. If I was a customer I might have asked for an investigation. But those are the kind of swings that can take place. I guess April this year was an answer to April last year – June or July last year where all we did was win. Actually that makes me uncomfortable because I really don’t like the customers that want to bump into such terrible bad luck, after all this business is about amusement, self-indulgence on a very special level. So basically the people that come here and do these things they are here because they like that more than they like the money. They like the game. It’s their hobby so to speak. It’s an indulgence. Like some people buy bottles of wine for $20,000. I mean there are people that like to gamble, and what’s best for them is to have the normal ups and downs and normal swings. They don’t expect to win but they like to get lucky once in a while and have fun with the house’s money. The last few months it’s been extreme in that regard but last year was extreme in the other regard in the first six months of the year. So I really don’t like it when we win too much money from the players. We get way ahead of the statistics. It has a stultifying effect on the psychology of our customers.
Shaun Kelley – Bank of America Merrill Lynch: Then I guess, the second housekeeping one I had was just on the credit provision or the benefit that you guys had did that fall all in Macau, Matt or kind of where did that show up, did it hit the P&L?
Matt Maddox – CFO and Treasurer: It was two-thirds Macau, one-third Las Vegas. So, after the first quarter, we did a full hindsight analysis of all of our collection history since opening and determined that we were over reserved and need to change our estimates. So, the good news is our collection trends have been quite strong.
Shaun Kelley – Bank of America Merrill Lynch: That is benefiting the property level EBITDA numbers that we’re seeing in the quarter.
Matt Maddox – CFO and Treasurer: Yes.
Shaun Kelley – Bank of America Merrill Lynch: Then, kind of the big strategic question I had was, and Steve you hit on this in your prepared remarks. Just the promotional activity as the gaming revenue growth has really kind of flattened out here, I guess the question is, has that gotten really any worse quarter-on-quarter? So have you seen both at the opening Cotai Central and then probably more importantly what you saw in May and June when we really started to see gaming revenues decelerating the market? Did you see kind of real significant increases or changes in behavior by some of the other operators whether they are on Cotai or just around the market and just kind of how do you characterize that environment?
Stephen A. Wynn – Chairman and CEO: The answer in a word is yes, we did. When they opened the Cotai Central you can imagine that the folks that operate those places had to develop strategies that would justify revenue for all of their places, and so they got more aggressive than usual. I’m not criticizing them by any means, but you asked the question, are we seeing more aggressive activity, and the answer is positively yes, and does it affect us, sure. Do we have to react? You bet. The choices that we have, there are choices that we have but I don’t think one of them is simply to increase the discounts or to increase the incentive payments to junket operators because when we look at that number, in a common sense and straightforward way, we cannot justify by an expectation of increased revenue any increase in the discounts or the promotional allowances of participation given to the junket operators. If we could share more money with the junket operators intelligently we would do that because they are in fact an important part of our business. So, we go out to the red line so to speak. Now if our competitors see that line somewhere else, all the more power to them, but we are paying attention to the numbers and we don’t agree that we can go higher, so we don’t. Linda Chen spends all of her waking hours worrying about such things and if she has something to add to this, I think she should.
Linda Chen – President, Wynn International Marketing, Ltd: No. I think you said it and the difference also is not just the VIP business, actually price really has (indiscernible) industry to mass and the job market. I think we always focus on how much junket commission that’s given out, but we are actually giving them a lot more incentives. Now, in shops and mass markets should also buy that business.
Stephen A. Wynn – Chairman and CEO: To me in this room, Linda’s voice is muffled. I’d like to ask the person to ask me the question. Could you understand her okay?
Shaun Kelley – Bank of America Merrill Lynch: We can understand, we also get a little static but we can understand it.
Stephen A. Wynn – Chairman and CEO: I’d like to repeat what Linda said because I knew what she was going to say because of the numbers that we study. The aggressiveness of our competitors have spilled over into the slot machines and they are being very aggressive in slot promotional allowances to the players. They have also built very beautiful rooms that are attractive and cleverly designed. So everything gets stepped up. Competition has made everybody sharpen their knives. It’s healthy in the long run, challenging the short run. We understand this. We have only been in competitive markets all of my 45 years and most everybody in this room has been with me a long time and so we understand this. We don’t overreact. So we wait till we see something real and then we deal with it, which maybe makes us a little slower sometimes but we are not sleepy we are just careful.