WYNN - Earnings call transcript Q4 2019

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Operator

Welcome to the Wynn Resorts Fourth Quarter 2019 Earnings Call. All participants are in listen-only until the question-and-answer session of today’s conference. [Operator Instructions] This call is being recorded.

If you have any objections, you may disconnect at this time.

I will now turn the call over to Craig Billings, President and Chief Financial Officer. begin. may you Sir,

Craig Billings

and Good under Matt With not Also Maddox Ian and may may Frederic line operator. remind statements want Las that those Harbor you on today true. Federal Vegas come are we Luvisutto Carruthers, Ciaran are and forward-looking Coughlan, may Gullbrants. afternoon, you, I me to statements everyone. make in the Brian Safe Thank or Marilyn Laws Spiegel. Securities

the I over call will Maddox. Matt turn now to

Matt Maddox

to fourth to quarter everyone, today. welcome, kick it like call and I’d To start Craig, Thanks, our conference off, Macau. in

currently almost take right of and the China, contain in the are Macau we they to in the quick So, and the to coronavirus. our Macau and and large at like focused government now health of and the for safety that community customers continue fact, Macau. on action our take decisive employees, to I’d solely commend

terrific they of us Macau. conversations the been safety been everyone It’s daily with we on as have government. in We’re the focus transparent partners in extremely and with

closely In worked at casino in at to our February the government all X the midnight, Macau cease we Macau operators February on fact, X. midnight operations of of on and with

is roughly our comprised to Macau. controlled organized while casino restaurants a in and largely a guests XX,XXX operating million the of open remaining We the couple for casino. But burn is still was It $X.X and time, this rate million are that of our have employees. closure during do our hotel the few to And a closed, $X.X payroll of that’s day. expense

of core segment. past we fourth with in mass the experienced quarter, quick VIP million EBITDA. like And the in to quarters, the back coupled compression growth we generated Looking $XXX.X

see back China EBITDA As we to XX, quarter, million on of But Macau just the like celebration a strong, reported day. the market. was a to the we generating October began leading XXth third year deceleration up handover entire over quite little of $X to actually on December

notice a XX, somewhat that on it’s jumped while did January the December in time, properties normal basis. on a a we right our back a normalized million beginning However, operating between environment, X EBITDA business XX short through period $X to day of in

a Vegas, Moving in in in negative And our quarter. hold $XX Las EBITDA XXXX, we to that were made decline to year-over-year. with perspective, just On than XXXX more a in of put million down during million EBITDA full $XX compared XXXX. impact year, contributed $XX baccarat all million to XX% a in roughly volumes the to

up in retail Our the domestic our quarter over continues business double-digits. and revenues in up up RevPAR non-gaming. to in be were fourth the and X% casino was

excited about XXXX We’re Vegas. in Las

XXX,XXX square great in foot center weeks convention a have to that’s We fanfare. opening

social that be dining that more X be throughout We XXXX. will will and restaurants energy high have opening new focused

we’ll XXXX. And and in rooms here the the summer of the end year remodel begin of this before X,XXX the Wynn completing Vegas, of Las

monitor feel Vegas. to the we segment on of it Vegas all So to we a of really the our and good as Far Las relates lot have in going segments Las continue business about East as

at doubled we to quarter million. $XX the Looking Encore fourth quarter the Boston our EBITDA Harbor, from to third

tiered is it in rewards Wynn all the continues games place And that healthy, healthy, table we America, a table the remains launched actually. program to strong putting a is for program. which us win, is and be in slot which Our for business games grow our reopened and card quite North to programs first and we’re

We’re those starting at Boston Encore work to Harbor. things see

continuing third to XX% floor. the growth quarter, compared we’re In to fact, up our a win and slot on over per unit was incremental slot see the the on little

our with match we’re and continuing on customers. XXXX, our food concepts beverage focused to In

ramping our we’re So quick visitors destination dining options there the hotel for and visitors. providing serve daily more business as for overnight the

we to property the as good Boston Encore we Harbor making about progress that So we’re throughout ramp that XXXX. at continue feel

With that, I’ll turn it over to Craig.

Craig Billings

Thank you, Matt.

$XXX.X operations noted our was $X.X million by on The As adjusted of up mass our revenues. segment, with year-over-year. strength quarter property billion X% EBITDA in in of operating release, characterized Macau combined in delivered mass the win

$XX.X in team impacted more great normalized Macau job increased Macau Our level $XX.X of results impact has in weighted the direct at both done by costs were by higher from heavily percentage, normal win than Macau hold a properties. with approximately EBITDA hold which million. positively approximately The VIP controlling at a to million

down EBITDA year-over-year At margin pressure wide. a expense incremental Wynn which staff Casino. our increase flat was taxes to compared basis and Palace, OpEx the expenses, Lakeside excluding both At drove QX, point and experienced market despite XX sequentially, payroll Macau, sequentially, operating year-over-year despite top-line to up incurred were normalized Wynn in the

strong to the leverage We to drive operating when are well prepared market returns normal.

quarter, third $XXX.X Vegas revenue produced Las of EBITDA Our $XX.X on million of operations million. in operating the adjusted

impacted baccarat table by hold were and in negatively as of Our domestic $XX both Matt lower about us costing mentioned. tables, results EBITDA games million

year-over-year drop we baccarat slot in saw and on a growth tough handle. was comp, soft X% While non-baccarat table

did $X.X side, approximately with X% face an million comparable the slightly in Vegas year-over-year. year-over-year in year also in controlling Bad million excluding prior compared pressure debt quarter, down RevPAR increased upward expenses to revenue. hotel excellent bad million hotel operating and in us $XXX expense Las debt of million in tax costs of on the job EBITDA. the $X Las The to Vegas driving team On payroll, $XXX.X costing was $X

in Wynn to the Construction is Harbor spend $XXX.X slated $XXX to revenue. produced open in million. group approximately date a in costs is was in at on Boston Las operating $XX.X spent now our hold complete, range. and We $XX roughly million few the Encore project weeks. taking to Games Table of Vegas QX XXXX, in expansion the in a normal million EBITDA space million

fruit Boston of course play XXXX. designed initiatives to initiatives expect drive Matt growth a in will we the in number have revenue we and As mentioned, over bear of those

We’ve We investments additional expense our in there the But to managed in Boston approximately and throughout expect excluding quantify relatively modest. they initiatives yet those the expenses be budget for will are base property gaming particularly making and in operating tax ready anticipate food also XX% the we beverage. we year, were down carefully not quarter-over-quarter.

Turning to the balance sheet.

a During the the term long-term from in we to billion of XX-year senior loans offering use from with We support the in to quarter, Macau successfully Macau. Asia-based completed intend our notes $X strong proceeds offering repay portion notes investors.

total while billion, $X inclusive reduce As an maturity recently billion rate. quarter issued of of profile a will our Macau attractive at ended the debt our of $XX.X senior the result, debt this ratio, leverage with and extending related secured bonds. We

Macau had and company-wide $X.XX investments billion. cash total also revolver of billion of We $X.X of approximately $X.XX including total and billion capacity Wynn

particularly Our Macau very position, liquidity strong. is in

open quarterly Finally, through that, now during the quarter, payment. we to million returned will our dividend the to we With Q&A. shareholders over Operator? call up $XXX

Operator

Thank you. Bank. first Carlo Deutsche Our Instructions] [Operator question Santarelli comes from from

line now Your open. is

Carlo Santarelli

and And of most are things you the closure. foresee of terms the hate big to the if What during here generic after day general, cost guys, the for guys on what you picture, the about how look on kind I the present? but near-term? kind hearing potential more in be of this? there color, per importantly, certainly, window? Matt, and of do appreciate do think you reopen Hey, do comments. How the over in thanks the can, you at backend And here to things X-week just

Matt Maddox

So, Carlo, to try exactly we reopen. little I will it’s think a early when to say

will working with ground again, is – the watching team any be and of basis daily the if outbreaks on there the the are carefully continued We a on government virus. very

far, carefully. we feel just so things are contained fairly we’re And and it like watching very well

rail in rail think the speed was coming look and extraordinary investment with infrastructure just it way fruition for to excited there’s In up launching, quite terms light the the been was at were it Macau it. the much and in we XXXX. quite and set is, all coming of a We that the really so about I Macau into high region new general,

to operations They will be back will not I’m eventually. normal. don’t to be – predict want So I when

We’re this, want in Macau that get and first up was normal. of sure when, people great things and to rebound. to not Tourism get around out like rebound back really but set was for move exactly events because one a the

So contained. the completely virus feel long-term about good as soon we aspects is do the of Macau as

Carlo Santarelli

very you much. Thank Great.

Operator

Our comes Greff question JPMorgan. next Joe from from

is open. line Your now

Joseph Greff

has a as different with this that time, your Macau what that Good in you’re maybe afternoon, into Vegas? you of us challenged everybody. you of from of as Year, you I a Las your to mean, New there Can is this and been past and times spend I on seeing call? Chinese a Can player couple segment a on while for share alluded experience bit little it. going East Far comments lot uncertainty appreciate

Marilyn Spiegel

So so far what we We a in. but mid-quarter comment really so during come had don’t quarter, Far good. party. you We had East know really our on the happens

We who to East, The can’t have Far back taken are town, in precautions. China. appropriate they get

location from And one are to travelling location. they another so

you gone choppy they based if the they first, to But quarter, another expect so, still from they continue And casino a clearly, were play. it’s results, here to can very we them have come upon to may as fourth the market. see and back

Joseph Greff

I the this with you to other your this some buildouts refresh room expectations and for then, Last summer. Las convention of the Vegas. room sticking Vegas, be might guess, maybe also which impacted some year, And remind us, of pricing in amenity can center by

is for price, looking longer how Thank on at multi-year that’s ramp all much me. the for occupancy X And Vegas you. that of you think How Las in pricing both on about a are it and and room term? when you boxes

Marilyn Spiegel

day, mean, our street occupancy reception is right? product. our very so, Vegas, We feel great the room and fight every Las there solid. is Joe, I in a to business And pricing convention Yeah,

beginning will be eliminate But casino of experiencing leveraged often quarter. you’re hotel revenue. to domestic June from to the rooms growth that be for to that going are that sure the the We in that low-end have the The depress will our seeing. third of market out order November we leisure hotel comes through you’re rooms or business

written. planned so, end will terms rate, with, was to up time with be And what particular for a really occupancy that’s we that it in story of or

Matt Maddox

lots been X and interest people And, get the it of still into is now. target Joe, convention seeing points when of are booking quite we’ve year as in for to about as saying that as the XXXX. is stabilized, the fast, XXXX touring, we’re as occupancy center incremental late we – the focused and X That still we’re it a into

the ended roughly XX% X low-XX%s to at we now. the year from we months occupancy. in think want I be And

Joseph Greff

much. Great. Thank you very

Operator

question comes Felicia next Barclays. from Our Hendrix from

is now open. Your line

Felicia Hendrix

so Thank much. you there. Hi,

was I curious, you, at the did of West up the for open year? Ian, the renovation So, just Casino end

Ian Coughlan

did exceptionally was a incremental and lifted The and operations tables point. It forward marketing we And New opened XX well, premium well to did done up Wynn Year. Macau. it. Chinese in great mid-November, team were business to very It for had mass launching job that great up looking

facility for quarter. And first the And so we we’re elements the still to encouraged. open in have of future, the

X board, have restaurants support outlets areas. we on So coming retail fixed and

it’s exciting after all we Plus, renovation. for room Macau. So have Encore back their development an our

Operator

comes question from Shaun next from Our Kelley Bank America. of

now Your open. line is

Shaun Kelley

for Ian. Maybe Matt afternoon. good Hi, or

Just might was really some of your the going? kind kind of sense think, are wanted on maybe implications term? that but on There initial kind for President’s disrupted relations then – on the any maybe little I how how Executive have on view market get of in And those the some, was of think that positive were December, of new and of I near picture Macau curious visit. reads medium the some given in reads meant your obviously, those about what the a – of some or bigger to just I kind Chief visit,

Matt Maddox

Sure.

before, But said it set a So Ian, in. I’ll really was can great And off. kick we thought chime XXXX. you up Macau for then as I

Executive lauded done all great We’re direction President place. the has very the Chief a infrastructure feel throughout Xi is about he X in the job that’s country wildly in the and around with about coming as Macau We systems. really by visit X that China all new good optimistic and December Clearly, the Macau. was taking

you do So feel on Ian, that. any really Macau’s forward. thoughts we good about going position have

Ian Coughlan

with President was in when – level, Macau move one Area the the of years at making It’s this a has in he Macau X his remarkable, after also a now community, in with it’s Greater virus first government for the in Xi’s having quite Bay We as dialog the few huge sat We’ve as with Executive, decision and amazing secondly, been has Bay the carriages Macau leading seat ago, governmental VIP Greater clear discussed Chief being daily in which he business his weeks. community. pragmatic new that the and on seat in barely and visit. maelstrom. was Area he concise forward business. and his wonderful is role, quite He’s in and communication described done been And everybody being the positioned

Operator

Allen next question Thomas Morgan Our comes Stanley. from from

now Your open. line is

Thomas Allen

thanks. Hey,

couple questions business more interruption there a that? covenants, then insurance given? you of cost little how going them, work? a under well just to with talk you. the really finally, containment able concessions be achieve So a Thank how impressive. then to obviously, is you’ve cash. Can And on But also I will Macau, have bit know, been was you about and ton of And you’re

Craig Billings

I’ll talk Craig. It’s latter. Thomas. the X, first we the and about then can take Sure,

insurance that some obviously caused physical business so to speaking, or generally type That business So interruption, event here. case interruption storm of isn’t a damage. the must the a relate

we business So material from expect interruption coronavirus don’t event. the proceeds coverage,

the To Macau. to extended, the the with The suspect maintenance EBITDA. no be volumes U.S. your stack shutdown covenant facilities headroom covenants. the does maintenance is facility And several of And bank it to as extent The period of is business very debt extended. facility do suppressed game in in have a our covenants, maintenance majority plan is already than question concessionaires we place unsecured has have comprised long-dated covenant a more vast sustain covenants. to that of to would ample a that sensitive do, have but bonds X that Macau have manage prolonged quite to Macau I on

pointed more period for in And – last that’s as we revolver and to on really between of than closure. we and any have of of kind liquidity, availability would a billion out, controls? couple ton OpEx the Ian, you have rightly dollars you of cash Macau you comments of sufficient did a

Ian Coughlan

to a just It’s variable bring headcounts Sure. expenses. team to at able were look collectively effort down. We

and a teams of of good hurting hiring but parsing have and We not quality expenses freeze product place. facility. the service the a and And the did in quality job

Operator

Instinet. Our next comes question from from Harry Curtis

is line open. Your now

Harry Curtis

be your to was any Hi, My afternoon. properties? operation yeah, about not goes light-rail long an transporting that the to comments it visitors of or good it sense you the more to question made back Was enough – system. get whether effective would

Ian Coughlan

transfer through So, with weeks for early is movement, too terms cetera. to And but outside Harry, mode. tell it this property, It’s it’s had been right only great X Ian. et in operation X for us and of vehicle testing in traffic stations still a situation our going

Operator

comes Jefferies. question next Katz Our from from David

open. now is line Your

David Katz

one Hi, If detail. I ask afternoon. back to just on you can go

you costs? may show vacation a encouraging a impact? do some You you cost some mention of and and did that you make evidence talk levers some mitigate Can of those Are can things cost specificity what with sorts good what any around more bit of containment. about more bit or

wanted a the about And sort over period you. to you’re talk bit change that. a to Encore Boston, time ramp Thank envisioning how I updated of just then get might and and payback and what a subject view about be your secondly,

Matt Maddox

Sure.

is So Matt. this

smart a doing not – on we’ve environment, in cutting efficient. we in a of Macau, payroll, the to all and looking day million and roughly operating side million all. the For costs at normal now very that I been in think, our focusing job of $X.X on the properties, containment are $X.X cost Right at good being

cause short-term you any Now don’t something hurt the do culture your distraction. will is in people, you that time when the or invest

we’re this in community think we So right will temporary, because long-term now it’s that be the know right we the investment. and investing

For program, Encore Analyst and about period. we softer Boston side. we ramp Harbor, to Admittedly, when X-year talked the when slot has it we opened on particularly we laid launched the a out Day, than thought,

work. we thing quite What a the doing food It’s customer. for right around we’re didn’t same realized so Wynn Red Palace, third particular we the restaurants restaurants that beverage quick program was, in when opened, closed went actually and at daytime more of we And immediately of in we slot lot casino. And We the we through the have we built X, meantime. a we needed quick-serve Wynn built new X in realized Palace. the we serve

And so we we’re very going fast Encore see through because that Harbor, in Boston when process a it. we way problem, at fix a

X-year think up I ramp still we’re that in So mode.

Operator

in your today’s Thank conference. participation you for

this time. at may You disconnect

Wynn Resorts, Limited (WYNN) 6 Feb 202019 Q4 Earnings call transcript