Wynn Resorts Ltd WYNN
Q1 2013 Earnings Call Transcript
Transcript Call Date 04/25/2013

Operator: Good afternoon and welcome to the Wynn Resorts First Quarter 2013 Earnings Call. Joining the call on behalf of the Company today are Steve Wynn, Marc Schorr, John Strzemp, Matt Maddox, Kim Sinatra, Gamal Aziz, Maurice Wooden, Scott Peterson, and on the phone, Ian Coughlan, President of Wynn Macau and Robert Gansmo, CFO of Wynn Macau.

My name is Amy and I'll be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

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

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

With that, I'm going to turn it over to Steve for some opening comments.

Stephen A. Wynn - Chairman and CEO: Well, we have these calls every 90 days and usually everybody who is on the call have seen the numbers. It was our best quarter ever in China at $330 million and we did okay in Las Vegas at $120 million. Construction in Macau is at full speed on our Cotai project which is our third hotel. The budget is still just under $4 billion and 6 million feet. We're very pleased with all of the things that have taken us two years to design.

We're in a very competitive market in China as well as Las Vegas. But in Macau we're in a situation where the licensees, the holders of those concessions, the three major concessions and the three sub-concessions are all very smart people with very intelligent organizations who are learning from one another, making sure that competition doesn't get to jump on each one and the quality of the competition has been steadily ticking upward the past several years since we opened in '06. We had certain advantages that were related to our experience, the industry, and our brand. We have fought diligently to maintain that advantage and we will continue to do so. It came to bear especially in the conception and the design of Wynn Cotai, which took two years before we would have positioned to break ground of.

We waited for our final approvals, but there wasn't a week or a day that didn't go by that we weren't bearing down, concentrating bringing to bear all of our experience and expertise of our design teams to come up with a place that would be irresistible when it opens, hopefully, for Chinese New Year in '16. Our contracts with Leighton and our builders include those dates and we believe we'll meet them.

As you know, we are competing for a license in Philadelphia and one is Boston metropolitan area, Massachusetts. Those processes are underway and we are again bringing our best game to the table. How it plays out, we will not know probably until the fourth quarter of this year and maybe a little beyond the Massachusetts, but we are making progress. We have completed preliminary designs of those new properties and we believe that the Urban Wynn in big cities give us the opportunity to introduce to those metropolitan areas new and very glamorous hotels that would otherwise not be profitable in view of today's average hotel rates, the Internet and the cost of construction. However, with the addition of the gaming room that is separate but adjacent to such beautiful hotels, food and beverage, entertainment, shopping facilities, and convention facilities, the existence of a casino room makes a new hotel in a city like Philadelphia and Boston and hopefully someday in Toronto and New York or wherever a chance for a new hotel that would otherwise not be economically feasible. We call this notion the Urban Wynn. In a complicated world full of change, things like Internet gambling, which almost defy analysis month to month, the rules, the regulations, the laws, the absence of laws, all of this makes digital gaming a little bit murky to us, but the idea of having the best hotel in Philadelphia, the best hotel in Boston, that's not murky to me or my colleagues. That's something we understand. The best hotel in major cities has a great future. Tomorrow is better than today and the day after tomorrow is better than tomorrow. We build those kinds of institutions, those brands by delivering on the promise. Our company has been well known for that for many, many years and that again is what we're bringing to bear in our applications in Philadelphia and Massachusetts.

I think without tooting our own horn, that's really basically the way we're looking at things these days and we'll be glad to take questions. I want to remind you that the senior management of China and Las Vegas is here in order to give color and depth to any of your questions. Go ahead and start.

Transcript Call Date 04/25/2013

Operator: Carlo Santarelli, Deutsche Bank.

Carlo Santarelli - Deutsche Bank: Steve, if I could just follow-up, as you talked a little bit about Urban Wynn and obviously the Massachusetts project, could you talk a little bit about how you guys are thinking about allocation of capital in the event that maybe these urban projects don't come to fruition?

Stephen A. Wynn - Chairman and CEO: Well, you know we build our places with modest lending. We try and keep an equity to debt ratio on our properties that allows us to maintain our investment grade rating on our subsidiary non-recourse debt. I think we’re the only company that does enjoy that at the moment, at least the last time I checked. That allows us for – that use of our capital as we approach each project allows us to protect our service levels and our employee base in spite of economic vicissitudes. If there is no Philadelphia and Boston, then we're going to be in the fortunate position of having excess capital and what we would do with it is something that the Board of Directors would take up at the time, but right now our dividend policy, which is $1 a quarter and is basically scheduled to be the kind of a dividend policy that could continue while we build the new projects in Cotai. We did borrow money last summer. Matt was particularly successful in borrowing the money that we need to Cotai at LIBOR plus 1.75%. Most of that money was in a revolver, a third of it or little less than a fourth of it was in a term loan, which we locked up at under 2.5% for the period. So we're very happy with our interest rates and our maturities. So, we go forward trying to take advantage of opportunities that present themselves and your question is very interesting. I don't know how to quite answer it, except to say we'll take one step at a time.

Carlo Santarelli - Deutsche Bank: That's great, that's very helpful. Ian, if you're on the line if I could. Obviously, the property enjoyed a solid quarter and you guys actually surprised to the upside on the margins and granted some of that's from (holding) in both the mass and the VIP, but also the commission number seems to be down a little bit. Is that best interpreted as having a little bit more fortune with your direct players relative to your junket players, or is there anything else that's maybe changed on that side or on the margin or the expense structure as a whole?

Ian M. Coughlan - President, Wynn Resorts (Macau), S.A.: You're correct. That's pretty much what it is.

Operator: Shaun Kelley, Bank of America.

Shaun Kelley - Bank of America Merrill Lynch: Probably another one for Ian over in Macau, but just wanted to ask a little bit about what you guys are seeing in the premium mass segment? We noticed from the release that obviously drop was actually down a little bit, but your hold ratio was up materially as far as what we can calculate, so you guys gave a little bit of explanation, but could you talk to us just about what behavior you saw over the course of the quarter that drove such a high hold ratio, and if you think that this is kind of the new pattern or relationship going forward?

Stephen A. Wynn - Chairman and CEO: Hold on, Ian, just one second before you chime in. There is something in Matt's release that I would like to draw everybody's attention to, because it's significant and critical that you take note of it. What's happened in Macau is something that we've never seen in Las Vegas, but as a growing pattern and it should effect all the analysis that most of you are doing, but what's happened is the customers are buying the chips at the cage, which does not enter into the drop. So the whole percentage in the mass market and our diamond club, our premium mass market is irrelevant number you should disregard that number now and pay only attention to the amount of the win, because this absence of the chips purchased at the cage and they handle, they skewed the numbers and make it look like we're holding an abnormal amount of money. There was one part of our casino in Encore, which look it held the 100% or more. So our advice now to observers of the industry and our investors disregard the whole percentage in Macau in the mass market. It is now an irrelevant number, because of the particular nature of the behavior of the customers. Ian you can pick it up from there.

Ian M. Coughlan - President, Wynn Resorts (Macau), S.A.: Just that the high limits mass table games and high limits slot market that had a lot of attention over the last six, nine months as our competitors cut off with what we did with Encore and nobody is quite matched Encore at this point and we continue to upgrade our high limit areas, we just opened few high limits slots area as Phase 1, put 96 slot machines and we’re opening up our Phase 2 with another 50 machines this week and then time for the May holiday. In general terms, everybody shown their cards and the customers are now left, they decide about where they prefer. So there has been a lot of ramp up in activity with generous giveaways and people can continue to sustain that. We've chosen to just take good care of our players without giving anything too much away and I believe that the playing field would level over the next 12 months. Our mass business overall is very healthy, our high-end business remains strong and we are pretty confident going forward.

Shaun Kelley - Bank of America Merrill Lynch: That's great and then just one follow-up on the VIP side there, obviously volumes were down a little bit, but that could have been driven by how well you held, could you just talk us through what you guys saw in terms of VIP activity throughout the quarter. We have heard a little bit about lending maybe coming back from some of the junkets, so what are some of your junkets partners saying?

Ian M. Coughlan - President, Wynn Resorts (Macau), S.A.: There is a lot more confidence over the last four or five months than there was in the summer of last year and business grows organically and nicely, our direct program is growing nicely and our junkets partners are doing well. We opened a new junkets space on property for Chinese New Year next year, that's the next big junket event for us, but I think people are generally pleased with the market.

Operator: Joe Greff, JPMorgan.

Joseph Greff - JPMorgan: Steve, thank you for your commentary on maybe the decreasing relevancy of mass drop, but the mass revenue, the mass Wynn was a great result, can you talk about what marketing changes you may be making on mass, the premium mass side? Whether there was anything to know within the quarter on the mass side, whether average bed size or number of players in that segment, you can share with us and maybe talk to the degree of volume versus that wager per player?

Stephen A. Wynn - Chairman and CEO: There is – myself here in Las Vegas with my job title and then there is the kids that are running the hotel in Macau. I think probably you mean to hear from both of us on that question Joe, but for me, I think – I take this approach, there is really nothing left to do in our industry, except the basics is better. The idea of a runaway building of preemptive over the moon structure, I think when everybody has virtually all the capital they need to build any structure in Macau, that the building budgets aren't really very important any more. Nobody has an advantage over anyone else. None of us – none of the six of us are short of money. The market justifies massive investment. So, therefore, you get back to saying, well, who are our customers, what do they really care about and how can we best serve those needs. How do we address ourselves to the fundamentals of our business? So that's why my answer to that question is sort of a macro answer and there is nothing left for us except to do the basics better. That's why Ian Coughlan is there, why he left Peninsula and came to work for us. Linda; Linda are you there?

Unidentified Company Speaker: No she is not.

Stephen A. Wynn - Chairman and CEO: She is not. She is on the road.

Unidentified Company Speaker: Yes.

Stephen A. Wynn - Chairman and CEO: Marc – Marc Schorr is here. Then come over with – we're using a common speaker phone.

Marc D. Schorr - COO: We identified who our customer is. Our goal was to take care of that customer's need as you said, just go back to basics. So we...

Stephen A. Wynn - Chairman and CEO: We really didn't do anything extraordinary at all. We just relied – we go to our strength, which is the fact that based upon many, many years of experience, having developed the best hotels over and over again and dominated every market we've ever been in .If you take any single property whether it's downtown Las Vegas, Atlantic City, the strip in Las Vegas, we've never ever not had the best hotel in each market that we've been in for the past 30 years. Now, the reason that's been true is because we really focus on the fundamentals. I think that's all we're doing and there's a lot of smart guys in Macau and they are getting smarter by the year. I really have to complement the competition in Macau. I find that the offerings that are being made are keeping us all on our toes. I happen to love that incidentally because it stimulates us. If we go and see a poorly done job, it disappoints us, even if it's our competitors. When we see a good job, like we see so often with our competitors now, both MGM and the Sands, the (indiscernible) kids from Melco. I had a coffee the other day with Jamie Packer in Los Angeles. All these guys are on their game. The people at SJM, Stanley Ho's company, Angela and Ambrose So and Louis Ng, these are all triple smart people and they're on their game. And so, it's keeping us on our game. I wish I could tell you that we had pulled a rabbit out of our hat, but there is not rabbit and there is no hat.

Joseph Greff - JPMorgan: Matt, a few other questions here. I noticed on the P&L the provision for doubtful accounts was down year-over-year sizably. Can you just comment on that? It looks like it was a collectible on Macau.

Matt Maddox - CFO and Treasurer: Yes, you're right. What I'd tell you is, the provision for doubtful is, this is about the appropriate run rate, this – maybe a little more going forward. So, it fluctuates as we get large collections in Macau that are fully reserved and we feel pretty good with this run rate.

Stephen A. Wynn - Chairman and CEO: As you know, we've never ever exceeded our reserve in my history either at Mirage Resorts or at Wynn. We're very conservative about credit.

Joseph Greff - JPMorgan: Then Matt, if you can give us the cash balance at Macau at the end of the first quarter and if you can – if you adjust for normal hold in Las Vegas, what the hold-adjusted EBITDA result would have been?

Matt Maddox - CFO and Treasurer: Sure. So we have roughly $2 billion of cash invested not in the cages, but in bank accounts and 75% of that is overseas. We did announce an $830 million dividend out of our subsidiary. Then once that's approved by the shareholders that will be paid out and so you'd see $600 million of that coming back at the parent company over the next two months.

Stephen A. Wynn - Chairman and CEO: The Annual Meeting is on May 15th in Macau. May 7th here.

Matt Maddox - CFO and Treasurer: So Joe, that's the answer on the cash.

Stephen A. Wynn - Chairman and CEO: Sorry, it's May 16th. Marc corrected me. Here is 7, they are week apart.

Matt Maddox - CFO and Treasurer: Joe, what was the other question?

Joseph Greff - JPMorgan: The other question was EBITDA in Las Vegas adjusted for normal table hold?

Matt Maddox - CFO and Treasurer: It's in the neighborhood of a $105 million to $108 million depending on how you normalize. And just so, you know Macau is closer probably 315, because we're adjusting mass.

Stephen A. Wynn - Chairman and CEO: Which would have – 315 normalized would have been our best month. 330 put us over the top, since we built the place.

Operator: Felicia Hendrix, Barclays Capital.

Felicia Hendrix - Barclays Capital: I wanted to stick on this phenomenon of the mass players purchasing much of the cage that's suddenly affecting the mass drop number. I am just trying to figure out what happened in the quarter that might change prior behavior because you guys have had a superior premium mass product since you've opened and you've been servicing the higher rate in mass customers for some time now, so it's now like you suddenly had a new customer?

Matt Maddox - CFO and Treasurer: I mean let me put it in perspective, if you look at the growth in mass market in our casino, the Encore mass market casino revenues grew by 40% and that is almost all premium customers that are not buying in its tables. The growth – the 40% growth was in the Encore side, and then our main floor grew less. So that’s really what you're seeing is a shift in the mix.

Stephen A. Wynn - Chairman and CEO: Do you understand his answer or maybe I can…?

Felicia Hendrix - Barclays Capital: No. I understand it. That’s actually pretty impressive given, Steve, you talked about the competition in the market and we can all see what the table yields have done.

Stephen A. Wynn - Chairman and CEO: We are lucky. I mean, someone asked me on the last call, are you concerned about the kind of places that are built in Cotai, as I concern I am frightened to death. I mean there are very tough guys. Even though they are friends and we have dinner together and all that, these people – I mean the game is being played at a very high level than Macau at the moment, very high level. Very smart people and paying close attention to their business. I have to say, I am thrilled that we are able to hold our own there. I have great gratitude and respect for Ian and Linda, Robert Gansmo, Frankie, the group there is fabulous management team. They'll do a good job in Cotai too.

Felicia Hendrix - Barclays Capital: We can't wait to see that. Speaking of Cotai, you provided us with some nice updates in the release and in some of your prepared remarks. Just wondering, now that your foundation work is underway, if you could share with us any learnings you might have from that and any updates to the design?

Stephen A. Wynn - Chairman and CEO: No. The design is finished of course. We are way past being able to (flow) with that. We took a long time; the longest ever. We usually take about 15 to 16 months to do a design development before we can break ground. We took 24 this time. Mainly is reflecting the respect we have for our competitors that you in Macau right now if you don't mind, we have this wonderful piece of real estate in downtown Macau on the Peninsula that is between – we’re across the street from four hotels. The Star World, Star World SJM, both the Lisboa and the Grand Lisboa face us; on our right is the Star World and the Arc; and then behind us – so we’re surrounded on three sides – is MGM and fabulous shopping. As a result, we’re sort of in the cross traffic. So to some extent, which I can't quantify, I don't know whether it's 10% of our business or 25% of our business, but we are definitely the beneficiary of people that can just walk across the street and change their luck. Since the junket operators are common to most every hotel there, they are like a service, there are like an ATM machine, they are available and they have rooms in each hotel; the players go and just change their luck. The Wynn and Encore of Macau benefit from its strategic central location. We have the 100% location on the Peninsula. Everybody surrounds us. In Cotai, as dramatic and as ambitious as these buildings are, there is a lot of what you’d call walk-in. They are separated and the weather is warm. The people move around in jitneys and public transportation. So we said to ourselves, well, we may not be able to enjoy that geographic position that we have downtown, so let's design our Cotai hotel so that it is a must see attraction. We are also benefited in Cotai by the fact that the new light rail or monorail system, we are the first stop coming from the boat dock, the ferry terminal and the airport. We're adjacent to the airport and the transportation link – the light-rail goes around two sides of our property. It makes a 90-degree turn, very much the way the monorail in Las Vegas goes around the desert and golf course, the Wynn Golf Course. So we wanted to make sure that people riding the light-rail arriving in Cotai and business more and more goes to Cotai as the developments increase in their stature. We want to make sure that when people looked at our lake, our fountains, that they saw something that was irresistible for them to get off the light, the light-rail stop is right in the middle of the front of our property and they get off the light-rail and they go down the escalator off the monorail. They go down the escalator and they are right smack without taking another step on our gondolas and we have these gondolas that Doppelmayr of Austria built, and the gondolas have music and color and air-conditioning and they go through the fountains. They go around the lake and through the fountains and into the building. We created an e-ride to get into the place. It's a lot of fun. It was great to do because I am trying to create walk-in business or let's put it this way, ride-in business. So, all of these new ideas are coming to play in the new hotel. The towers where the turnbuckles are for the gondolas, which are on the main drag there are shaped like dragons and as you ride by in the gondola car, smoke and red light make it look like the dragons are puffing; all kinds of fantasy and the kind of public entertainment that we're famous for. Everything about Cotai is about entertainment. So that's how we're going to meet up with our friends who are our competitors and try again to hold our own against tough guys. Is that helpful?

Felicia Hendrix - Barclays Capital: That is super helpful. Just finally, in your prior comments you had said that you thought that online gaming was murky. So I was just wondering if you could elaborate a little bit more on your thoughts there. You had a partner once that didn’t work out for obvious reason. Just going forward what do you think?

Stephen A. Wynn - Chairman and CEO: I’ll let Matt to take about that. When I say, murky, that’s a Steve Wynn comment. I have often thought this whole subject of online gaming was getting everybody all jazzed up a little bit ahead of themselves in my view. First of all, I don’t think – I think it's probably the most unsympathetic tax target on the planet Earth will be online gaming where every best can be measured by the government, both state and federal governments that have an insatiable appetite for new revenue these days. Another thing is that it’s very difficult to distinguish yourself online. We still experience in our buildings and that's a long and difficult assignment, but we have experienced, we know how to do that. I don't know how to make the experience on a computer screen 17 inches in diameter particularly unforgettable. We’re going to learn how to do it because we’re not going to be left behind in this matter and we've turned this over to the capable hands of Mr. Maddox who will give you his view of the subject.

Matt Maddox - CFO and Treasurer: I agree with Steve. It's murky. We’re looking at all the opportunities around the world and talking to the various partners, but we're moving consciously and we're really more in monitoring mode right now.

Stephen A. Wynn - Chairman and CEO: But we’ll have our oar in the water.

Matt Maddox - CFO and Treasurer: Yes.

Stephen A. Wynn - Chairman and CEO: As we should on behalf of our shareholders and we'll take a ride on the railroad and go through the learning curve and bring common sense and hopefully intelligent judgment to the task. But right now, if anybody on this call can tell me what's going to happen with internet gaming in America, I'm dying to hear it, I have trouble predicting the outcome here.

Operator: Steven Kent, Goldman Sachs.

Steven Kent - Goldman Sachs: A couple questions, first, maybe you could just give us a little bit more and tell us when you are going to start to show the images for Wynn Cotai and you just described it very effectively Steve, but I can see images for the proposals in Boston and in Philly, but I don't see anything yet for Cotai so…?

Stephen A. Wynn - Chairman and CEO: We have – we are building a model and it's almost finished, is it not Marc?

Marc D. Schorr - COO: I think you'll get it in 30 days…

Stephen A. Wynn - Chairman and CEO: In the next month or so we are going to have the model and we will be photographing it, we've got extensive interior studies, computer generated. I mean we've built a building next door that's 32,000 square feet, right next to our employee garage on Koval Lane here in Las Vegas and it's got glass walls and in it, our each of the room types, the corridors and 5,000 square feet of the casino, full scale, you can walk in it. Now I want to do a video of that in the next month or so. When we get through with that video you'll think the hotel is already built. You'll be able to walk down the corridor and there is mirrors at the end of the corridor to make it extend lengthwise. You can walk in all of our room types, complete and finished, that's our practice, we spend a lot of money on modeling, because we want to experience our job before our guests do. So that if we've made a mistake, we can correct it before we cast it in permanent concrete and we've been doing all this for months and months and months and it's all been done. We haven't had a chance to share it with everybody because we had so many other things on our plate with Philadelphia and Boston that had very definite impressing schedules as to the calendar, but we are finished with the model and we'll be showing Cotai to everybody that cares to see it. If you come out, we'll take you next door. If you want it, you can see it, any of you as long as you're an investor as opposed to our competitors.

Steven Kent - Goldman Sachs: Separately just on these, either Philadelphia or Boston, basically an Urban Wynn concept, how are you differentiating it from a regular regional casinos that you can get the superior returns you've been getting in some of the other markets without overspending and given the declining returns we're seeing in some of the other regional casino markets here in the U.S.?

Stephen A. Wynn - Chairman and CEO: I love that question. How do we compare to the other regional casinos? Hear me, there is no comparison. Regional casinos are boxes of slots. Period, end of sentence. We are building very lovely integrated hotels. Now they don't have 3,000 rooms, they have got 300 or 500 or whatever, but they have beautiful restaurants. They have atriums. They have convention facilities, meeting rooms that are delicious and better than any hotel in any city that we're going into. They have spas that are wonderful. These hotels are great places to go for a weekend and you don't ever have to get near a slot machine or a blackjack table or a baccarat table in one of our places. Down the hall, the way a convention meeting room might be separate. So then in each of our cities, visitors who are not predisposed to gamble, families with children can go into our hotels and enjoy fanciful restaurants and shopping and our other experiences that are associated with hospitality. And remember this, in our industry there has been a simple truth. Slot machines and blackjack tables in and of themselves have no power at all. You create a legalized casino in a city and they open up, a box of slots opens up and the first year there is a big puff of tax revenue and a big puff of earnings and then they flatten out because basically they deal only to the neighborhood. Unless you bring people from outside the region into the region, you do have a future growth pattern. We are building buildings that will grow and be the places where people from out of town come to stay, little destination resort hotels in beautiful cities, like where I went to school in Philadelphia or where my family is from in Boston. My mom and dad were born there. So, we have no comparison whatsoever to any local casino. They are all boxes of slots by my lights. Now, that's all that they needed in those days. Harris did a very good job building this network around the world. Harrah's did a very good job of building this network around the world and I admire what they did. Their progressive bonus program has been a very successful one. But make no mistake, what we are building is not a box of slots. We're building hotels that just happen to have a gaming room of back with its own garage and its own access. But two separate concepts. The Urban Wynn idea will undoubtedly be copied as we go forward because we usually get copied. But there isn't a model for what we're doing anywhere.

Marc D. Schorr - COO: This goes back to the Golden Nugget and the Horseshoe from 30 years ago.

Stephen A. Wynn - Chairman and CEO: Yeah, let's take – Marc has made a good example. There was Freemont Street 30 years ago and then there was a Golden Nugget. Everybody said Freemont Street has a personality and a profile and a revenue profile and we built the Golden Nugget and it was just a little casino, we added the rooms, we've rebuilt the place, we made a 2,000 room hotel out of it, broaden entertainment and shopping and we made more money in the Golden Nugget on Fremont Street than the entire Fremont Street complex total by a substantial margin. We have 58% of the profits downtown. So, you change the game by what you offer to the public and we know what the public wants, is it a question of giving it to them, that’s it.

Operator: Tom Marsico, Marsico Capital.

Tom Marsico - Marsico Capital: Steve, I was wondering if you could give us any insight as to the economic conditions that you are seeing from your customers as you talk to them in Macau. There are differentiation that you are seeing now versus six months ago when the new administration was being put in versus what you are seeing today?

Stephen A. Wynn - Chairman and CEO: You asked a good question; Tom and we're very interested in answer to that question. So, we're probing and asking that question constantly. Because of our relationships with our customers directly and through our junket operators, we are talking to a wide ranging, very diverse population of businessmen from Peoples Republic of China, not just Guangdong Province, not just Guangzhou and Shenzhen, Dongguan, but far away in Fujian and Chengdu and Chiang Dao every place. And what we are getting universally is a statement of confidence and equanimity and the feelings that these men and women have about the leadership of the PRC. They think it's stable. They think it's sophisticated, and very, very switched on to what China needs. There's an awful lot of confidence that we're hearing from our customer base about the leadership of the PRC. There is a lot of confidence about the leadership in Macau. It is different in here in the sense that there's a mixture of social consciousness and business hassle, business aggressiveness. This is fascinating. The government of the People's Republic of China and Macau have come to the conclusion that the only important way to improve their country and keep social peace and happiness is by the creation of jobs; and everything in the PRC is about the creation of jobs and that takes a backseat to everything else. So they're very supportive of things that create jobs. They manage to balance that with social consciousness in a way that makes life there predictable and easy. I've been, I don't know, criticized or people have commented on the fact that I – in these conference calls I often talk about the difference between leadership in American and Washington and leadership in China. I’m going to say it again, because it's only the truth that there is a clarity that job creation is the only path to a better life for the citizens in China and that does not seem to have been cleared up in America. Job creation is still not the priority in this country based upon the policies that we're dealing with or the paralysis in Washington, and when they do act, they have acted in ways that are not constructive to job creation. We don't see any of that in Macau. What we see instead is a spirit contrary – that’s the exact opposite that comes from Beijing and filters through to the SARs, the Special Administrative Regions of Hong Kong and Macau, both of which are enjoying unprecedented success under the leadership of the Central Government in Beijing. So that's what I'm seeing, Tom and it's coupled with a lot of confidence about the new administration in Beijing.

Tom Marsico - Marsico Capital: Was there a time during this change in administration in China of the leadership that you did see a pause as far as confidence was concerned, because of the uncertainties that Xi might bring to the new leadership position?

Stephen A. Wynn - Chairman and CEO: In the sense that there was a pause, not a negative pause. What there is every five years a normal moment in which everybody is wondering what is going to be the lineup on the Standing Committee or the Central Committee of the Communist Party. We say the Communist Party you know as if this was a cold war days. Communist Party is a term that means an entirely different thing today in China. But until everybody knew who was going to be who on the Standing Committee. You know, Xi, they knew he was going to be the boss, but there is much more to it than just the one man in China. There's the other members and power has been consolidated, you know that it's the amount of the committee members have been dropped down by two, that may climb back up between the second five years as everybody starts to take care of everybody else, but this is clearly a settled issue. And where everybody was a little curious before those names and the identities of the Standing Committee members and what their responsibilities would be, that period is passed. So I think the pause may be the right word. Everybody was curious about who is going to be who? There is a big packing order over there.

Tom Marsico - Marsico Capital: As far as the U.S. is concerned, and the major companies that you do business with, with special conventions and trips that they're offering for their employees, are you starting to see more confidence among decision-maker CEOs and such as far as implementing those programs again? I go back to the days when Wells Fargo was told not to go to Las Vegas. Are those types of programs being re-implemented and you're starting to see a pick-up in that area, hotels in Las Vegas?

Stephen A. Wynn - Chairman and CEO: Maurice Wooden is here with me, the President of the hotel and I think it may be good for him to answer that one.

Maurice Wooden - President, Wynn Las Vegas, LLC: Actually we've – let me just move over, so I can get over. We've been very fortunate to enjoy this year where we've seen a great pickup in that segment. In fact as we start to look at the first quarter, we had a 6% – actually a 7% increase in rooms and also a 7% increase in revenues, but looking out over the rest of the year, we also see that, that's a pattern that we feel confident that is going to continue to repeat itself. Then if we're looking out to grow out into 2014, which we've always talked about as where we felt the best as far as where we knew the room contribution was really going to bounce back in that segment, 2014 is way ahead of pace where we actually thought it would be.

Tom Marsico - Marsico Capital: So are you back to the pace that you were in '07?

Stephen A. Wynn - Chairman and CEO: No.

Maurice Wooden - President, Wynn Las Vegas, LLC: I wouldn't say it's exactly the same pace as '07. However, it's much more robust than it was, especially over several years.

Tom Marsico - Marsico Capital: Then if I could ask one last question. I was just wondering from other jurisdictions, if you're talking to any of the decision-makers in Singapore and other areas – if they're pleased or if they think that you could see maybe an additional opportunity in Singapore that's not being addressed by the current hotels that are operating there. Is there any new way that you could see new contracts being let?

Stephen A. Wynn - Chairman and CEO: I don't know Tom. I'm not in a position to comment on that intelligently. That's a good question for Sheldon.

Tom Marsico - Marsico Capital: The same is true in Japan?

Stephen A. Wynn - Chairman and CEO: In Japan. Japan moves around the current prime minister is pro-gaming, the party that is most likely to favor this is in control, but things changed in Japan rather quickly, but we're all watching that and that will be (joust) if it happens. I think that they'll be (joust) there'll be a serious effort made in Toronto, decides this spring if they want to have a private label operated casino. Everybody sort to thinks that market heavily Chinese as it is would be a good one. It's a destination world-class destination city. There is non-stop flights from every major world capital to Toronto. You don't have to change planes. So I don't know about Singapore, but I know that there is a very spirited debate at the moment in Toronto and Gamal Aziz is on the call and Gamal – this is his business, this expansion of our Company, he's doing that with me. Gamal, what do you think about this, about Canada?

Gamal Aziz - President and COO, Wynn Resorts Development: Steve, I think that, well Toronto we will know City Council votes on May 7th and we will know if they will accept it in Toronto itself. If not, it may go to other neighboring jurisdictions like (Marcon), Mississauga or (Von). So we'll wait-and-see, but yes, it will be a great market for us. Japan, I think as you said Steve, the new Prime Minister is pro-gaming. For the first time, cabinet members are speaking openly about gaming and the benefits of having integrated resorts, though, we think that for the first time there is hope that they will approve the promotional bill, which proceeds the implementation bill. So we think there is movement in Japan and we will know by the end of the year, but this is probably a friendly government towards gaming.

Tom Marsico - Marsico Capital: I'd just like to comment and thank Marc Schorr for his great commitment to the Wynn shareholders.

Stephen A. Wynn - Chairman and CEO: Tom, Marc is going to continue in a partial role until the opening of Cotai, because of his experience in building Treasure Island and Encore. So he is going to have a – he is going to spend a little bit more time with his family, because that's what he wants to do, but he is also going to continue making regular trips to China in his role in getting that place built and open. So his retirement was probably a little bit of an exaggerated term.

Tom Marsico - Marsico Capital: Marc, I still want to thank you very much for all you've done.

Marc D. Schorr - COO: Thanks.

Operator: Thomas Allen, Morgan Stanley.

Thomas Allen - Morgan Stanley: So on Los Vegas, we've heard from some regional operators that January and February were soft and then you saw a significant pick up in business in March. Did you experience something similar in Vegas and both on your personal level and then on the market in general would be helpful.

Matt Maddox - CFO and Treasurer: No I mean we didn't see anything different in March than we saw in January and February. We were pretty consistent month-to-month as far as our business.

Stephen A. Wynn - Chairman and CEO: Yeah, but I want to point out. We had a good time. But in our take, we have the largest amount of gaming win in the State of Nevada for one single property. We've been the – we've held at record since I opened Bellagio and then we exceeded Bellagio in '07 with $724 million in win and then we exceeded it last year and this year at $770 million in this hotel. So having said that we have the largest component of gaming revenue of any Nevada casino, I must point out that of the $600 million in table win, 70% of it is in roulette and baccarat, which our business, that is primarily Latin American, European and Asian. Without the international market, we would be in an entirely different position. But we are among in addition to a few other properties on the script the hotel of choice for well-to-do international travelers. This hotel has an enormous component every single night of the week of people with foreign passports. It'd be the equivalent of 300 or 400-room hotel in another city being a 100% occupied every night of the year by people who were from another country and these are all gamblers. So, we don't really run with the pack so to speak in Las Vegas. We've got this international brand that works for us. So, when you ask that question and you related it to regional casinos, we're so completely different that I think it's not a comparable situation and we intend to do exactly that in Philadelphia and Boston, exactly that and Toronto if we get the chance. Show us a major city and we'll build them a beautiful destination hotel that could be called a resort by any definition. And therefore, we get into a different category. We get people from outside the region to come into the region. We get people from over there to come here. That's the secret of gaming. That's the only reason they have gaming to get people to come from over there to here wherever here is compared to over there. I tried to make that point in my presentation in Philadelphia recently. And when you decide to bring people from over there to over here, you do that by having something here that's better than there, which means more money for construction, more jobs and in the end, more tax revenue.

Thomas Allen - Morgan Stanley: That actually brings me to an interesting second question. Are you able to estimate what percentage of your Las Vegas revenues comes from Chinese customers? I mean, just thinking if there is some kind of issue that could stop them from travelling, how would that impact your Vegas property also?

Stephen A. Wynn - Chairman and CEO: If anything interfered with Chinese traveled in the United States, would it impact our property? Roughly the equivalent of the building is falling down. Yeah, nothing serious, just a catastrophe, that's all. If you want to have anxiety about potential scenarios that could cause problems, you will just pick one right there. I don't think that we're not having an anxiety attack on that point nor have we worried about it for the past 30 or 40 years. The Chinese are on the move. The Japanese are on the move. The Taiwanese are on the move. The Latin America, Brazil, Chile, Colombia, those are all – we have a big business this first quarter from Chile, Colombia, Brazil, Mexico, Taiwan, Japan, Singapore, Malaysia, Indonesia and the People's Republic of China. That's our business. That's who we are.

Operator: This concludes the call.

Stephen A. Wynn - Chairman and CEO: Thank you everybody.