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Wynn Resorts Ltd WYNN
Q4 2009 Earnings Call Transcript

Transcript Call Date 02/25/2010

Operator: Good afternoon and welcome to the Wynn Resorts Fourth Quarter and Year Ended 2009 Earnings Conference Call. Joining the call on behalf of the Company today are Steve Wynn; Marc Schorr; John Strzemp; Matt Maddox; Andrew Pascal, President of Wynn Las Vegas and on the phone Ian Coughlan, President of Wynn Macau.

All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions).

Thank you. Now, I would like to turn the call over to Mr. Matt Maddox. Please go ahead, sir.

Matt Maddox - CFO and Treasurer: Thank you, and good afternoon, everyone. Before we get started, I just need to remind everybody, we will be making forward-looking statements under the Safe Harbor federal securities laws and those may or may not come true.

With that, I am going to turn it over to Steve Wynn for opening comments.

Stephen A. Wynn - Chairman and CEO: Hello to our investors and analysts and hi to our competitors. What we have to say I think is going to be very brief, because I think these numbers speak for themselves. We had a wonderful year in China. We always want to point out that the most important thing to recognize when looking at numbers in our business is not so much market share per se; that’s a measurement of sort of casino revenue. What really is important is to look at the yield per table and the profitability per table.

And I am very happy to see that again for the second or third consecutive year the profitability and the efficiency of our tables in Macau have continued to climb in spite of the existence of some very fanciful competition that appeared this year. The Macau market is beginning to show some maturity. There are fine buildings that have been opened and are being operated, and as market conditions have improved I think that the rest of the construction that was started and temporarily halted will now continue. That’s all good news as we go forward in having that market be mature.

We’ve happily established a niche for ourselves and I think our EBITDA was over $0.5 billion last year, and although I don’t make forward-looking statements as a rule, we’re tracking substantially ahead of that the first two months of the year, and we haven’t even opened Encore, which is about 60 or 90 days away, I think, due in April 24th on a Wednesday. I think Linda decided that we’ll do it in April 24th, and that is the most beautiful thing we’ve ever done. And when that kicks in, we’re going to have another little boost in our ability to understand and serve the specific needs of our customers, and our customers are admittedly the top end.

This building, Encore in Macau, and I’m taking just an extra minute or two to comment on it, is a building that was designed after we had two years of experience to understand the needs of our particular guests that gamble and visit Macau. When we built Wynn Macau and opened it in ‘06, we had done our very best in pre-opening research and design to have a building that would appeal to what we understood to be that market. And I am happy to say that we weren’t very far off the mark and the success that we have enjoyed is a direct reflection of the fact that we were able to get it right, especially in the wonderful employees that we were able to attract to come work for us.

The workforce in Macau is totally delicious. I mean, the people that have come to work for us from Macau, from Mainland China, from the Philippines have the most wonderful desire to be trained and to improve and be successful in their jobs. That’s probably been our main asset is the people that work for us, which is why we never cut back on salaries, or the 13th month, or why we never do any of the other things that some of our competitors have done, because whether it’s in Macau or Las Vegas, our principal asset are our employees, period.

And the ones we have now in China are just absolutely over the moon, wonderful as far as we’re concerned. And we have the organization that’s going to be in place to open Encore, I am happy to say, in a few months. And I think when everybody gets a whiff of that place, they are going to realize that we’ve set a new standard in hospitality facilities and the way we present our product. It is by far the best thing that I’ve been part of and I’ve been doing this for 40-odd years. It’s 414 rooms and suites and I’m very excited about April’s opening and can’t wait to share it with everybody. So much for Macau. We look forward to a very healthy and exciting 2010 and beyond.

I wish I could say the same thing about Las Vegas, but I am still, as we have been in the past, unlike some of our competitors who have seen all kinds of glitter and wonderment just around the corner, I think everybody sort of come clean now that we don’t see that. The policies of Washington, the policies of government have taken a terrible toll on the working people in America that come to Las Vegas and the corporations that book conventions and meetings in Las Vegas, I am afraid to say that I think the outlook for 2010 is very conservative, at least.

I don’t see any major change in the future. I don’t see it getting worse per se, but I do think that unless there is some signal from Washington that they can control the deficits, that not only Las Vegas but the country faces dire problems, and I don’t see any reason whatsoever to have a speck of confidence in the Congress or the administration that’s there now. And in the end, Las Vegas is almost a perfect reflection of the national mood. So I am conservative and guarded about the future of Las Vegas.

And I think political leadership is now come home to roost as part of every businessman’s conference calls. I mean imagine that it would be necessary for someone in my position with my job to talk to a group of investors and analysts and have to refer to policies in Washington, when discussing the relevance of the quarters that lie ahead. But if anybody has got a speck of sophistication that’s listening to my voice now, they’ll recognize if that is in fact true.

I will take questions, and so will my colleagues who are sitting around the table.

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