Wynn Resorts Q3 2010 Earnings Call Transcript

Wynn Resorts (WYNN)

Q3 2010 Earnings Call

November 02, 2010 4:30 pm ET

Executives

Stephen Wynn - Founder, Chairman, Chief Executive Officer, Chairman of Wynn Macau Limited and Chief Executive Officer of Wynn Macau Limited

Andrew Pascal - President of Wynn Las Vegas LLC

Linda Chen - Director, President of Wynn International Marketing Ltd and Chief Operating Officer of Wynn Resorts Macau

Marc Schorr - Chief Operating Officer, Director, Member of Gaming Compliance Committee and Director of Wynn Macau Ltd.

Matt Maddox - Chief Financial Officer, Principal Accounting Officer and Treasurer

Analysts

Shaun Kelley - BofA Merrill Lynch

Carlo Santarelli - Wells Fargo Securities, LLC

David Katz - Jefferies & Company, Inc.

Janet Brashear - Bernstein Research

Cameron McKnight - Buckingham Research Group, Inc.

Thomas Marsico

Mark Strawn - Morgan Stanley

Joseph Greff - JP Morgan Chase & Co

Jon Oh - CLSA Limited

Grant Chum - UBS Investment Bank

Presentation

Operator

Compare to:
Previous Statements by WYNN
» Wynn Resorts Q2 2010 Earnings Call Transcript
» Wynn Resorts Ltd. Q1 2010 Earnings Call Transcript
» Wynn Resorts, Limited Q4 2009 Earnings Call Transcript

Good afternoon, and welcome to the Wynn Resorts Third Quarter 2010 Earnings Call. Joining the call on behalf of the company today are Steve Wynn; Marc Schorr; John Strzemp; Matt Maddox; Andrew Pascal; Scott Peterson, and on the phone, Ian Coughlan, President of Wynn Macau; and Robert Gansmo, CFO of Wynn Macau. [Operator Instructions] Now I would like to turn the call over to Mr. Maddox. Please go ahead, sir.

Matt Maddox

Thank you, and good afternoon, everyone. I just like to remind everybody that we will be making forward-looking statements under the Safe Harbor Federal Securities laws, and with that, I'm going to turn it over to Steve Wynn for opening comments.

Stephen Wynn

Okay, so we had a nice quarter. Made a couple of $100 million [ph] in Macau and not bad in Las Vegas either. This is the first time on the conference call that I'm going to say I believe that we've seen the bottom in Las Vegas and I don't know how fast it's going to get better, but I don't think it's going to get any worse and we had a really nice October too, and we had a record-breaking October in China. So business is pretty good actually all the way around. I think with two months to go, we're over $900 million of EBITDA, so speaking after my 40-odd years, first year we're going to go well over $1 billion in profit, in EBITDA at least. Although I stress again that this EBITDA number, which is what everybody likes to flash around is sort of a fake number because you have to pay your interest so lots got to do with what you make as how much money you owe. And depreciation isn't something that can be discarded. The more hotels you have, the more depreciation you've got. And the more money you have to spend taking care of these places, which reminds me that our remodeling and upgrading of the whole Las Vegas facility, the Wynn Las Vegas facility is proceeding greatly and the public is receiving it well. It's caused our room rates to go up in the newly remodeled and refurbished rooms. Our baccarat is closed until Christmas, it's being re-configured and we opened a restaurant a few days ago in Las Vegas called the Lakeside Grill, which is jumping and doing big business for us. And our night clubs continue to be as a group, probably the most successful on the planet. We're going to do $150 million or $160 million in Nightclub business in Las Vegas and make 45% profit or something.

So generally speaking, we like the way we're configured and we're happy that things aren't going to get worse. I think the election today is a great moment in stabilizing what has been overwhelming uncertainty and fear of this administration by businessmen around the country. And I think that the message that the American people are sending to Washington tonight is clear, decisive rejection of the policies that have put us in this position lately. And so I think that we're going to see a more positive, a more consumer confidence after tonight, as the administration sort of gets put in its place about overwhelming government control and ridiculous spending and stuff like that. We were damaged as a company by the healthcare bill. We have been the victim of 8% escalation of healthcare costs and our insurance program and we self-insure. We are healthcare provider. And we have never touched the benefits to our employees or raised their costs of their contributions in co-pay and such. Since we opened this hotel five years ago, we've just taken the hit on 8% a year. As a result of this ridiculous 2700-page fiasco that this Congress passed, our escalation of healthcare cost is going to close to 11% or 12%. Thank you very much, Congress, for all the help. They made it tougher on large businesses, small businesses, they've made it tougher on unions. In many cases, the culinary union contract with us, for example, and calls for a fixed contribution or cost of living escalation every year to be put into healthcare or wages whichever the union wants. And when it all goes to healthcare, their wages can't be increased. Or put in even a worse situation that the amount of money that we can give the union to cover their healthcare escalation doesn't equal what the union has to pay out in its policy to our employees. So the healthcare bill was a fiasco across the Board. We can only hope that maybe when the new legislation reconvenes, they will somehow undo the damage that has been done by this ill-conceived piece of legislation, which is very important to companies like ourselves, which employ and ensure tens of thousands of people. So I think that the elections have very positive moment and maybe we'll get some relief from the government in the months ahead.

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