Wynn Resorts Ltd (NASDAQ:WYNN) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
Macau Changes Outlook
Joseph Greff – JPMorgan: I’ll start off with a broad brushed question here. The Macau media of late has been reporting on the government potentially looking at concessions, of concession renewal discussions, starting perhaps as early as 2015. Can you talk about your expectations or views on what if any changes they may be looking to place around the renewals, and I’ll leave it as broad as that?
Stephen A. Wynn – Chairman and CEO: Well, I was in fact in such conversations today, and I feel very comfortable being in Macau. I think I certainly don’t have an intuitive specifics of the government’s final decision, but I know that the matter is to be addressed in ’15. And speaking for myself after 12 years in Macau, I feel sanguine and comfortable about being here and plan on being here a lot longer. I think that probably answers your question.
Joseph Greff – JPMorgan: Then, maybe this is for you, Matt. The margins in Macau were about 210 bps below what we were looking for. Volumes were basically right in line. Were there in any adverse mix shifts in VIP between direct and junket, or maybe even in mass between premium versus non-premium mass that would’ve accounted for some of that?
Matt Maddox – CFO and Treasurer: Yeah, Joe, that’s exactly right. We held less than 2% in our direct program, and as you know, in the direct program the margins are higher. So while our overall junket although it’s 2.94, we held high on the junket space and really low in our direct, and that was the reason.
Joseph Greff – JPMorgan: Was there anything weird on the mass side overall?
Matt Maddox – CFO and Treasurer: No, only in June. So, the number that everyone was focused on, there were some hold issues in June in both slots and mass tables, but overall it was pretty normal…
Stephen A. Wynn – Chairman and CEO: And it’s been corrected. I mean, it’s corrected itself in July.
Matt Maddox – CFO and Treasurer: Yeah.
Joseph Greff – JPMorgan: And that 22% number, Steve, that you mentioned, that’s a sequential number, or is it a year-over-year number?
Matt Maddox – CFO and Treasurer: That’s year-over-year, but it’s up sequentially too in double-digit.
Stephen A. Wynn – Chairman and CEO: (Indiscernible) what does sequential look like?
Matt Maddox – CFO and Treasurer: Sequential is up about 13%.
Stephen A. Wynn – Chairman and CEO: Plus 13%, Joe.
Matt Maddox – CFO and Treasurer: I’m sorry, 22% up year-over-year and our run rate is probably about flat with Q1, which is our best mass gaming quarter and up 13% over Q2.
Joseph Greff – JPMorgan: My last question Matt of the $2.5 billion of cash and investments, how much of that is Macau related?
Matt Maddox – CFO and Treasurer: Half. It’s right at half, between Macau and the Asian subsidiary.
Stephen A. Wynn – Chairman and CEO: Incidentally I forgot to add. We had another nice quarter in Las Vegas at a $130 million. Just thought I’d mention it.
Las Vegas Cost Initiatives
Felicia Hendrix – Barclays Capital: Steve, since you mentioned Vegas, I’ll ask. The margins were actually much better than we were looking for. I was just wondering if you could discuss some of the initiatives you might be taking on the cost side there.
Stephen A. Wynn – Chairman and CEO: Well, you know what happens, because of our sort of a premium niche that we have here in Macau and that customer base makes its way to our place in Las Vegas, and the same thing is true Brazil, Chile, Colombia and Mexico. Last year, we won about $600 million at the tables, another $177 million in slot machines. 52% of that is Asian, 24% is Latin and 24% is domestic, and in slot machines, I think $25 million or $30 million of the $170 million is international. So, we – our brand because of the market segment we cater to tends to benefit from the international market and, these emerging markets, a lot of people are enjoying success outside the United States and they make their way to Las Vegas; and I think that we’re one of the first choices for that kind of visitation. And you know, we cater to that business aggressively. That would be my comment. It does introduce volatility to our business but we’ve got so much of it we can afford to deal high. Because at any given moment, we have a handful of people playing, 100,000 or 200,000 a card in games. So we’re benefiting from that, and I think that’s probably the most – that’s probably the most relevant I could give as to our margins. International, we’re not dependent upon the United States primarily, but from outside the United States.
Matt Maddox – CFO and Treasurer: For instance you will notice in the press release, we talked about the $12.2 million credit in the quarter, as we every June do a historical analysis of our collections in Las Vegas.
Felicia Hendrix – Barclays Capital: Ian, in Macau, you guys talked a bit and that was very helpful – I think Steve mentioned about what’s going in the mass side. Obviously, everybody there is now trying to go after the premium mass customer. So I was just wondering if you could talk about how competitive that environment is. Obviously people are sampling new products as you talked to some of your customers who might be sampling – what are they saying? And are they eventually coming back to you guys?
Ian M. Coughlan – President, Wynn Resorts (Macau), S.A.: The mass market (indiscernible) inside is hyper-competitive, remains hyper-competitive, and we’ve just been focusing on taking care of our customers delivering high quality service; and try not to get into the heavy discounting promotional battles that’s in the marketplace. A number of our competitors have corrected mistakes they’ve made in the past. They’ve also built new facilities and they are ramping up the business. We’re maintaining a very nice quality level of business. We opened Encore and it was a success from the first day we opened. It continues to be the mass market high limit area in the marketplace and our customers are very satisfied; people do shop around; people will move for discounting. But clearly as all those gravitate back to quality and service consistency is where (that for) Macau and that’s what we’ve been focusing on.
Felicia Hendrix – Barclays Capital: Just quickly, Ian, do you expect any construction disruption from the hotel renovation?
Ian M. Coughlan – President, Wynn Resorts (Macau), S.A.: There is mild disruption. We are not doing heavy renovation. We are refurbishing our guest rooms. We are doing all 600 keys in our Wynn tower. We are just over 7 years old. They have been incredibly well received. We have taken the pallet from Wynn Las Vegas tower suites and rooms and so far the reaction has been excellent. We have done five floors so far, it will be finished by late November. So, very little disruption. We have 100 keys left to sell each evening, so there might be mild impact from that on the gaming side. But overall, it’s being very well received and very few complaints.
Stephen A. Wynn – Chairman and CEO: But we are out of order with the portion of our…
Ian M. Coughlan – President, Wynn Resorts (Macau), S.A.: A 100 rooms approximately.
Stephen A. Wynn – Chairman and CEO: Yeah, about one sixth of our rooms. So, we are operating a little bit of a deficit, especially since we have such a high utilization of our rooms by VIP customers. It is very, very difficult for us to sell rooms for straight cash here because we have such a large component of high-rollers and better players to justify complementary services we have only 1,000 rooms either and they are used all the time.