永利渡假村 (WYNN) 2009 Q1 法說會逐字稿

Good morning, and welcome to the Wynn Resorts, Limited first quarter 2009 earnings conference call.

Joining the call on behalf of the Company today are Steve Wynn, Marc Schorr, John Strezmp, Matt Maddox, Andrew Pascal, President of Wynn Las Vegas; and on the phone, Ian Coughlan, President of Wynn Macau.

(Operator Instructions).

Now I would like to turn the call over to Mr.

Maddox.

Please go ahead, sir.

Thank you, and good morning, everyone.

Before I turn it over to Steve, I just need to remind everybody that we will be making forward-looking statements under the Safe Harbor provision of Federal Securities laws, and those statements may or may not come true.

So with that, I am going to go ahead and turn it over to Steve for opening remarks.

I am going to let Andy Pascal talk about Las Vegas operations in a minute, and we will do the same thing separately in Macau.

Generally speaking, I know that the most important question on everybody's mind must certainly be, well, how long is the -- is this retarded revenue and squeeze on Las Vegas going to last?

Do we see any change?

I know that MGM in their call were (inaudible) yesterday.

I think that I'm still going to be a little reticent to go -- in that sense.

I think that the economy is bouncing around.

I'm not quite sure whether the stimulus package has been effective yet or if it's in effect.

So I'm cautiously optimistic that maybe we have seen the bottom.

One of the things that that has marked this extreme recession in Las Vegas since September has been that the booking window, normally around 70 to 90 days, shortened dramatically down into the thirty-day range, or even some cases last fall.

We notice that as a mark of the times.

And during April, we saw the bookings window stretch back towards the 60 to 90 day range.

Now that -- and that meant that our occupancy would be strengthening; our advanced bookings strengthened.

It allowed us to have a little bit more running room in adjusting rates.

We are still substantially -- if you look at our numbers, we are still below what we were a year ago; but we are back in the 90s, and that's with additional room inventory of over 2,000 extra rooms, so -- in the Las Vegas center.

So I'm glad about that.

And the controls we have put on costs have finally started to kick in this quarter, and we've avoided the more dramatic layoffs that our competitors have used and instead have adopted a slower -- but I think in the long run more intelligent -- approach in terms of taking care of our employees, and what I think myself and Warren Buffet -- because I heard him say it at the Berkshire Hathaway meeting this weekend -- the "share the pain" approach, which means that we go to 32-hour weeks, we do all -- early outs and things like that in order that people can -- jobs can be protected to the greatest extent possible and they keep their insurance and their paycheck, even if it's been reduced.

And we cut salaries and eliminated bonuses and did a whole bunch of things like that, and took 75 or 100 million out of the operating expenses.

So we are happy about that, and it's showing up in the current period.

As to how long I think it's going to last, I have this general observation about human nature, which has always been consistent with the behavior of people, even if they came to Las Vegas; and that is folks tend to want to return to their normal habitual behavior -- their preferences that they had before a crisis or an interruption.

And if I can invent sort of a metaphor, if it takes negative energy or bad news of a quantity "x" to deflect people from their normal behavior for a year, then -- and you want to deflect people in a similar way for two years -- the energy can't remain the same.

You would have to increase it by fivefold.

People will resist change and want to go back to their normal behavior; and unemployment in America is climbing, and the administration has got to deal with that.

But there is still a lot of people that do have their jobs and they come to Las Vegas, and we are seeing that now.

And they want to do what they always did.

So I think the perfect example of that would be the bombing of London during World War II.

During the first six months, people ran for the air raid shelters when they heard the buzz bombs coming over.

But by the end of the first year, people were in the bars and the pubs listening to the sound of the bombs until they heard the noise stop, and if they calculated it was close they ducked under a table and made sure not to spill their beer.

So folks -- and that seemed to have been repeated in Bagdad.

It was repeated in Tel Aviv with suicide bombers and -- we are certainly seeing a robust activity.

This past weekend in Macau and Las Vegas were some of the strongest weekends I've ever seen in my life.

I mean, we had a (inaudible) tournament this weekend.

We had huge business -- which is not to say that that will continue every day, but we've been noticing that the weekends are getting very strong again, and midweek -- convention business was impacted, no question about it.

And as soon as the chief executives in the businesses in America stop being intimidated by the administration and their comments, I think -- and I'm hoping that the president will address tourism and travel; because frankly speaking, the people that voted in the democratic party for the main part work in the tourism and travel industry work as cooks and waiters and housekeepers all over America.

And this recession has very much affected all the restaurant employees, hotel employees, people that by and large are earning between 30 and $40,000 a year and have children to support, and they are being hit very hard, not only by this recession, but by Federal policy that has discouraged travel for the most part.

It's been very schizophrenic.

And I have criticized this in the past and I am doing it again, because I think that the administration has not been mindful, nor is the Congress, of the negative impact impact on so many people that voted democratically in the last election.

So that's my overview.

I think that China has been less affected than the United States.

The junket operators are being careful.

They lent an awful lot of money last year, and they got a tremendous amount of cash out in the form of loans; and I think they are being more conservative this year in giving out money so that they will be sure not to get stung by non-pays.

We've noted -- that's a good sign, though, that they are being conservative.

People who stay in the gambling business long enough stop trying to use credit as a marketing tool.

They stop giving money to people who are unlike to pay.

That's an earmark of the inexperienced casino executive.

And as time goes by, if the people who have these positions survive and don't get fired or thrown out, they tend to behave in a predictable and responsible way.

And I'm glad to see that the junket operators, at least ours, are doing that.

We don't have very much money outstanding.

We don't let the junket operators get ahead of us.

Our other competitors in Macau have enormous amounts of money out that exceed the commissions that the junket operators receive in one month.

That's a very dangerous position.

We don't do that.

At the end of every month, they owe us nothing and we owe them nothing, and we keep that it way.

So those are the general overviews.

I think that Las Vegas is going to survive all this.

I think a lot depends on government spending and whether it's really focused at job creation or whether it's scattered and unfocused.

I think that we are going to see -- across the country, but mostly in Las Vegas -- we are going to see return to consumer confidence, which really affects Las Vegas, when and if the American public believed that Washington is spending these huge amounts of their money wisely and in a way that does produce a return to a decreasing unemployment number.

That's the one that's going to have the most impact on Las Vegas, believe it or not.

To the extent that the administration can show that the job creation is enough to stem the increasing tsunami of unemployment as it climbs past ten, that's when I think the recovery in America and that's when Las Vegas will see -- consumer confidence is a very important factor in what happens in Las Vegas in the way people plan trips, in the way they plan meetings and any other convocations that have to do with exchange of information and the demonstration of products.

As long as people are frightened, the money stays on the side and it can't be spent on meetings and conventions and other intelligent activities.

With that, I think I will have Andy talk about Las Vegas in more detail.

Okay.

So at the risk of being redundant here, the first quarter really had three key areas of focus for us.

I mean, the first part of the quarter in January we were focused on launching Encore and understanding how to operate it and integrate it into Wynn Las Vegas and how to just optimize its overall performance.

Once we got past kind of the initial opening, we then turned our attention to refocusing and bearing down on our operating expenses and refining our overall cost structure.

Most of those measures we kind of touched upon, and were implemented in the latter part of February and in through March, and then March saw us shift our focus to really optimizing the composition of business that we are bringing in.

We absorbed over 2,000 rooms and a whole lot of additional capacity in a very challenging market, and so we trialed a bunch of different things through the early part of the quarter, which then gave us an opportunity to start evaluating each of them -- which of those strategies and tactics made sense and which of them didn't -- so we could refine our approach and really start to improve the composition of the people that we were accommodating.

And so I think that the performance in March started to reflect what we think is more in line with what we think our go-forward performance will be.

So with that said --

So I think if you normalize a whole percentage and get rid of the non-recurring special expenses, we would be in the 70s in Las Vegas.

We probably would have made a little more than -- low 70s, which would have put us up there with equal performance, or perhaps better than most anybody in town.

And we would have actually done a little better than last year, incredibly.

But -- (multiple speakers) -- and considering we added another hotel here, that's the least of what we should be doing.

We didn't see that in December and January.

And now we are getting ready to adjust the Company so we get a proper return in our investment in Encore.

Ian, are you on the phone, my boy?

Yes, I'm in D.C.

There's Ian Coughlan in Macau.

You want to talk about Macau, tell me what you think?

Sure.

Since the turn of the year, our volumes have stabilized.

It's still a defined weak -- very weak end market.

Visa restrictions remain in place.

What we've known as the GAAP on a month-to-month basis between visitors' arrival last year and this year is narrowing.

And (inaudible) are trending up in terms of volumes -- our headcount and foot count -- and our slot program here continues to go from strength to strength.

Non-gaming revenues are steady.

And April has traditionally been a softer month, but we have had reasonable business levels, and we're looking forward to a strong May.

We have two holiday periods and five weekends.

We've also introduced a series of cost efficiencies which we will start to see the benefit of in this quarter, and we are being conservative in credit issuance, which you've already described; and overall, things are pretty steady here.

Ian, I am going to ask Linda Chen, who is the ahead of Wynn International, Chief Operating Officer in Macau, and who's here in Las Vegas today because we are going to have our annual meeting of stockholders in two hours.

Linda, you have probably as much insight into the high-end part of China.

You opened Mirage in 1989.

You opened Bellagio.

You opened MGM.

You came back to us from Bellagio.

You are the senior person in this Company with international marketing, and the operation of all of our marketing in China.

What are you seeing?

How do you feel about this?

I think the first quarter in '09, of course, volume was down partly by the economy, but a big part is by design, because we do want to be more careful with credit.

You say by design.

Yes, by our --

By your design.

Our design and the junket operator being very careful and responsible with credit, and everyone -- even customer-wise -- they want to be more careful on what they spend on gambling money, discretionary income.

See, we have high end players in both America and in the People's Republic of China, and these are people by and large who still have money --

Right.

-- and haven't lost their jobs.

That's the good news and the bad news in our Company.

But -- and what that means is they are smart people; and as far as I know, most everybody who is intelligent has kept their cash in their pocket more than they would ordinarily to be cautious and be careful; and to not behave in such away would be reckless and really mysterious behavior if you were watching what was going on in the world in the past four, five months, and you didn't pull in your -- if you didn't pull in your lines, you were a dope as near as I can tell.

Scott Peterson, our Chief Financial Officer from Macau, has returned home in the last month, we're happy to say, and has taken up his position back in America.

And, Scottie, you and Linda regulated the credit in China and you dealt with all of these major -- we have the best junket operators.

The other hotel opens have good ones -- in many cases they are the same -- but we have a very wonderful group of people that we have partnered with.

It's a family affair in China for us.

What's your thinking about this situation in China from your perspective, Scott?

I mean, I agree with Linda.

We were all very cautious at first and watching both our customers' behavior, as well as the world's, and we adjusted our policies together.

I mean -- and the volumes did go down, but I think now they are starting to come back.

And as the -- as we cautiously view the world and discussions with the six family members we have, then we've been slowly coming back to what we were before, but it's still a slow process.

Steve, Marc Schorr.

What I've seen is very interesting.

In China, the customer themselves -- especially in our high-end play -- are still coming.

Our headcounts are exactly what they were a year ago.

The difference is is that they are much more cautious in the size of their bet.

True.

They are still coming every single night, every single weekend.

They are playing ,but they are very careful of their gambling spend, spreading it out.

Andy, would you saying that sort of fits the description of our big customers, too?

Yes.

If you look at our high-end business, they are still coming and they are playing; but yes, they are a bit more cautious.

So -- and it's reflected itself in whole percentage, the length of play has shrunk.

I'm happy to say not in May, but we've noticed it.

So more and more you see that Las Vegas isn't so much different than the rest of the world at the end of the day.

I know we don't have scripted meetings in this Company, and we don't have scripted calls.

So having -- asking my colleagues questions and sharing it with those of you who are listening, both our competitors and our investors, is -- I still think -- a healthy thing to do.

The exchange of information in the industry leads to intelligent -- competitive, intelligent management and operational decisions.

There is nothing wrong with that.

And we have an open dialogue with most of our colleagues in the other companies, as we all try and deal with a problem.

After all, whether in Las Vegas or Macau, you are in Las Vegas, and it is a community of resorts that are very interdependent.

Whether we admit it openly or not, if Bellagio or Caesar's Palace or the Venetian is in trouble, you can bet we are two.

I'm not talking about capital structure now; those are strategic decisions that are independent.

But I'm talking about revenue levels and the way we handle credit.

If somebody is being reckless, it's bad for all of us.

It chills the whole system.

This whole interdependency depends upon exchange of information in central credit; it depends upon standards of discounting -- not price fixing, but a recognition of reality -- that there's a Monday morning, that there's gravity to all this.

So you can't just go around free swinging.

So we tend to talk to one another; and these calls once every 90 days have let the digital world accelerate that, because I'm sure that the boys from MGM and Sands are listening, and Harrah's, because of the Las Vegas scene and because of China, and that's a good thing.

And I think they are all behaving -- we are all acting and seeing very much the same thing.

Now depending on what we are doing our capital structure, some of us are a little bit more optimistic and a little more aggressive in our speech than others; but basically, we live in the same world, and if Jim (Inaudible) and Bobby Baldwin think that we are bottoming out, maybe it's true.

I hope so.

You think it's bottoming out?

Do you think we have seen a bottom, Andrew?

Slow answer.

It's a slow answer.

I mean, I want to be -- it's hard to say.

I mean, clearly the rate of decline has slowed down.

I mean, things have been stable for the last six weeks.

So -- there's not enough data to kind of draw that conclusion.

Let's make a forward-looking statement.

As you and Tom Breitling look at reservations, how does it feel to you for June, July?

I'm still a little uncomfortable.

The booking window is clearly still year over year is much shorter than it was, which makes it a lot more difficult to kind of predict how the summer is going to shape up.

But it's longer than it was before?

A little bit.

Not materially.

You don't think materially?

No, I don't.

So -- I mean, we really look at it and break it down by segment.

It's still significantly shorter than it was for the same period last year.

And all that does, it means that we have less visibility, and that's been the case now for the last four, five months.

So clearly things -- the fundamentals have improved over the last six weeks and we hope that that continues going forward through the summer and that we have significant --

Tom told me that the booking window had stretched a little.

Tom here?

Yes, I am.

Tommy, did I misunderstand you?

Well, certain segments have, Steve.

So like, we have -- what you have, I think you have the deal-seeking customer, and so the once that are buying packages are definitely following the similar trend of booking further out.

But in general, like the --

So it's shoppers that are booking out?

That's right.

It is, it is.

There's another -- the industry has certainly been impacted by the internet age.

More and more of our reservations are coming through the internet, whether it's our own website or people like Travelocity and Hotels.com, and Expedia, of course -- and they are shopping.

The internet is a giant buyer's cartel.

Maybe it will get regulated by the government one day.

I think we should just start taking questions.

Well you want to -- maybe you want to bring an update on Macau Encore?

Oh, yes.

On Macau Encore, we've been told that we will receive the building on April 30.

And we were going to open a part of the building earlier, and then the rest during the spring.

I made a decision to do it all at once for two reasons.

First of all, to have a bigger impact -- to have a kind of a moment where we revealed Encore the same way we revealed this one, which gifts its best moment.

In this business of opening new hotels, you really have to do it right if you want to give them the best opportunity for success.

And so I extended the opening to the -- to April 30.

So we are going to get the building on April 30.

It will allow us to open it with a few practice weeks right the beginning of May.

So we are exactly 12 months out on Encore.

And it's looking -- I think it's the most beautiful thing we've ever done.

I think it's going to be very well-received.

It's 404 or 5, all suites.

The smallest rooms 1,000 square feet.

It's a completely separate -- I mean, a completely self-contained place.

It has its restaurants, it's spa.

It has general casino, retail.

It has VIP rooms of a very extraordinary nature; and we are excited about it, and we think that that's the amount of incremental business that we should have.

We don't want to overexpand Macau.

We have a special niche there and we want to keep it.

And Encore was designed to augment and increase our leverage at the top ends of the market.

So these -- it will take us to 1,000 rooms, but it will also give us the finest rooms in Asia, without exception.

They are all quite extraordinary.

And I think that brings us up to date on stuff that I could overview.

Now time for questions.

(Operator Instructions).

Your first question comes from the line of Joe Greff of JPMorgan.

Good morning, everyone.

Hi.

Steve, your comment about adjusting for hold and non-recurring items in the first quarter for Las Vegas that that would kind of put you in the vicinity of a low 70 million EBITDA range.

72.

72.

So that basic is adjusting hold normal, applying sort of a margin structure or applying an operating expense structure relating to the changes you guys made in February and March.

No.

Andrew, why don't you explain this.

I mean, that's really just applied -- normalizing our whole percentage and then taking out extraordinary expenses related to the opening.

So advertising and launch events, and some of the --

We had a campaign for the opening -- campaign carried through the first quarter.

That's correct.

That was a non-recurring item.

That's what I meant.

Got you.

Okay.

That's helpful.

And then, Matt, maybe you can help us out in terms of what the hold impact was to EBITDA in Macau in the quarter?

Yes, there was a hold impact -- I mean, we state our range as between 275 and 300.

We held 3.6%.

So you can do the math.

It's all there, with 10.6 billion of turnover.

What I would say is almost all of that was in the junket program, which is, as everyone knows, a much lower margin business.

So the numbers are pretty public, and if you just take the high point of the range at 3% and apply the junket margin, you're there.

Got you, that's helpful.

And then my last question for you, Steve, I know you recently have talked about potential acquisitions, and maybe it's kind of a non-event at this point; but how do you view acquisitions right now and what would sort of be reasonable for you to kind of consider doing?

And then perhaps, how do you view sort of a -- maybe a new side business in terms of not owning, but just managing casino resorts?

Well, I think that as a result of the position we are in in terms of our capital structure, our cash, our interest rates and our maturities -- which are all what I would generally describe as beneficial in allowing us enormous freedom -- I wouldn't describe us as aggressive shoppers.

I would describe the attitude of my colleagues and myself and the Board of Directors as being available to enter into a transaction that was advantageous to the shareholders.

If it was clearly advantageous to the shareholders, we'd have the kind of reach that would allow us to step up to the plate; and if we could by something at a reasonable price and we thought that it would be -- it would fit with us -- and that really describes -- either it's a Wynn resort, which means it has to be the top ends stuff, because we only have one speed in our current Company which, and that is full-on top shelf service.

Or it has to be something that is completely non-competitive with our existing business.

What we do have is an extraordinary amount of depth in management.

We've never been quite as deep as we are now.

I think there are five or six former presidents in this Company in operational mode, not to mention to mention Tom Breitling and Tim Poster.

We have a lot of big bench here, and -- the best I've ever had in my 40 years.

And that's another thing that says to us, let's be opportunistic -- but it's about value.

I had the pleasure of going to the Berkshire Hathaway stockholders' meeting on Saturday, and having dinner and breakfast with Mr.

Buffet and listening to Charlie Monger and he and his colleagues, and talked to the guy that runs Geico.

And we -- and I think Warren's answer to a similar question was the right one.

We don't necessarily say that we catch the bottom on anything.

I don't know that anybody knows what the bottom is.

What's important is value.

And if there was something that looked like value and it was also something that fit into the strategy of one of the existing companies -- like MGM, for example, which is what's on everybody's mind at the moment -- then of course, I think we enter into a conversation and try and do something that was beneficial for both parties.

It happened between myself and Kirk Kerkorian in the year 2000.

I wanted to increase my ownership.

Kirk wanted to do use his words to fix a problem at MGM, and we struck a deal for them to buy Mirage resorts.

I think that was probably one of the best deals that Kirk ever made.

It was certainly the best deal for me.

I made more money in five years than I had in 27 years, and I had already made arrangements to buy the Desert Inn.

So this kind of stuff comes up when and if it works for a seller and a buyer.

And it's not just MGM we are talking about.

We are talking about companies in China and companies in Las Vegas and elsewhere.

We are open for business.

We don't think that we are on fire to buy something at the moment.

But we do know what's going on in the industry, and we keep our eyes open and we have got a lot of flexibility, Joe.

That's pretty much our attitude.

I was asked a question at the Milken conference.

Someone said, " Would you buy Bellagio?" And I answered the way I just did; and then the press being what they did, the next thing you read was that I was buying Bellagio.

So we have to be very careful in our language -- and the story got exaggerated.

I don't know that Bellagio is for sale, and I don't know that if it were for sale that the price would be right or that it would fit with us.

All I know is that we are in really good shape.

We've got a really deep bench; and if the opportunity is right, the stars lineup, we might be an acquirer.

Something I have never done before, but might possibly happen now.

Do I have a deal cooking?

No, I don't.

And if I did, there would be an appropriate moment to make an announcement and we would, as soon as there was anything substantial to talk about.

There is nothing of that sort as of this moment, and I'm saying so on the conference call.

Next question, please.

Joe, I hope that answers your question.

That's great.

Thanks, Steve.

Sure.

Your next question comes from the line of Steve Kent of Goldman Sachs.

Hi, good morning.

A couple things.

First off, if you just look at Encore on its own, could you tell us whether it was in fact positive cash flow this quarter?

And how are you looking at it on an ongoing basis?

We made -- we had a lot of discussion about this last fall, and we decided to do follow a system that we think is better for the Company.

We are going to treat Nevada operations as group, and we are going to treat Chinese operations as a group.

And we are going to leave it there.

And I guess on April trends, Steve, have RevPARs for the hotel -- have they improved relative to Q1 for Las Vegas?

And then also, I'm not sure who was speaking, but earlier somebody said that you -- on room rate or room programs that you seem to be fine-tuning that on some of the marketing programs.

Could you just give some examples of how that's evolved over the past four months, because it's been pretty quick?

Good, I have two people I would like to introduce into this conversation.

The first question about RevPAR will be Andrew, who runs the Nevada operations; and then I'd like Tom Breitling to talk about the room detail.

And, Tom, get near a microphone so that you can be clearly heard.

So RevPAR is essentially flat.

There's no material change in RevPAR in April relative to what we saw in the month preceding it.

So I think that addresses your first question.

However, this whole notion of optimizing the composition or the mix of our business is something that we really have looked at closely, because it's not just about what you command in terms of the price of your room, but it's how much those people are going to spend throughout the rest of the facility.

And so that's where we tended to focus a lot of our energies.

And so when I spoke about how we tried a number of different things, really across just about every single channel of our business -- the leisure segment, transient, convention, casino -- we've structured different types of promotions and offers and ways of communicating with our customers, and then after the fact, we really dug in to evaluate the real profit contribution that we are able to generate (inaudible), understand one of the things that we are doing that makes sense and I think that we should continue to do it.

and so there's a bunch of things that we said, "You know what?

We are not going to continue to do that going forward." And there's a bunch of things that were definitely worthwhile that we intended to a lot more of.

So that's kind of what we focused on as far as combining our strategies in a way that we've (inaudible).

Tom, you want to talk about that?

Well, I think if -- there's a couple of things I think get looked at.

One is weekend, and once the weekend starts selling out, I think you are starting to see a sign of thing coming back; and I think the last few weekends have been very good.

The other thing is the (inaudible) convention business in the (inaudible), and I don't think we are going to see that until towards the end of the year or beginning the next year.

That will show you (inaudible) is coming back.

So like Andrew said, we are going through every segment and saying, "Okay, how do we fine-tune this to bring in the most profitable customers?" And you can't tell people to travel, but once you start seeing them travel on the weekends -- and we just had a very busy weekends with a lot of different events -- the visibility has come back a little.

But I would say that those are two things that I think are interesting to look at in terms of seeing the market come back and really how we are fine-tuning our business.

And believe me, we are doing everything possible to bring in (inaudible) to some of this bigger group (inaudible).

What was interesting for us is that we have not really seen -- until just the last few weeks -- what happened with what our new machines with 4,800 rooms goes to full power.

And what that achieved the kind of levels that we thought it should.

And this is the first time we have seen -- when the Nevada operation goes full power -- what kind of reach it has, and it's quite impressive.

That makes those of us who are watching the place very closely on short term very happy, because it shows us that when we get the right people (inaudible), it's pretty fancy -- better than we hoped.

And that makes us feel good, but it isn't the kind of financial information that makes for a public celebration, because it's only been a few weekends.

So it's interesting to talk about it for a second, but it's very important to issue the caveat that we are looking at this thing with a microscope, and that's not how you run a business.

It's the way executives get back in confirmation, and I know that we have a very closely held Company.

Some on this call own the place as much as I do and Mr.

(Inaudible) does.

So I'm sharing this information openly in a candid way; but when you ask these penetrating questions and you get these kind of people in the room, they can't help themselves.

They are very close to the picture, and I want to constantly reminds the people who listen to thus -- and especially those of you who write about it -- don't get carried away with short term news.

Circumspect.

Look at the history of Las Vegas.

Keep your focus on the big picture.

Use short term information, even current information, for what it's worth.

Momentary indicators.

We are in a very unusual time.

I think the government in the United States is more a player in all of our lives than it ever has been before.

The Obama administration is spending money at a rate.

In terms of rapid response, the administration has to get an A-plus.

In terms of focus of the rapid response, like most rapid responses it tends to be a little helter-skelter.

And I'm not thinking this moment at the maximum amount has been done to create jobs; and I think that's the key ingredient to the recovery, and return to consumer confidence will happen when the administration can cause a reversal in the publicized numbers of unemployment in America.

That means they've got to think about America as one country, not two countries -- the businessmen and the (expletive) with them; and working class, where we are coming to save you.

You have got to have a government and administration that goes back to thinking of this as one country and recognizes that it functions as a unit.

The employers are the ones that create the jobs.

If you don't identify with the employers, you will not get a recovery in America because you try and fix a bunch of bridges.

That won't work.

That's not where the people are out of work.

And so we need to get a focused central government policy for job creation in America.

Next question.

Our next question comes from the line of Dennis Forst of KeyBanc.

Good morning.

I just wanted to understand the Macau hold percentages better.

With the shortened play and gambler being somewhat more circumspect with how much they spend, I was pleasantly surprised at the high holds in both the mass market and in the junket play.

Do you just play lucky, is that the --

That's all.

That's all.

That's all.

It was as simple of that.

That's the beginning and end of that conversation.

We got lucky.

It happens.

You have good months and bad months in terms of the flip of the cards.

Okay, and then I think some news out of Macau for April had your market share down.

Did you just play unlucky, or was there anything unique about April.

The explanation of the market share is that our junket operators are being careful.

Okay.

And also, we've (inaudible).

We held the low end in April.

Okay, and then on the taxes --

And good luck in the first quarter.

And you'll see good luck in the first quarter, less luck in April.

First part of May is rip roaring for three days.

You know, it's a bouncing ball.

Got you.

And then --

We'll have a big market share the first week of May.

So what?

What?

We already have it.

It came out.

Pardon me?

It came out today.

Oh, it came out today?

What was it today?

20%.

20%.

So 13, 20.

This is a Ping-Pong ball.

The end of the year, we've been pretty consistent around 16, 17% -- which is pretty good for one casino; and per table, we are off the charts better than the other guy.

Okay, and then just on the taxes, Matt, is there any way to give us a gauge on where taxes are going?

It doesn't affect EBITDA, obviously, but does have an impact on the EPS number.

On the take-home pay.

Yes.

We -- again this quarter, we recorded another valuation allowance against our foreign tax credits as a conservative measure, just --

Hello?

Mr.

Forst?

Yes, hello?

Did I get disconnected?

Please hold.

Why?

(Technical Difficulties).

Hello?

Can you hear us now, Dennis?

Yes, now I can.

Okay.

So what I said was this quarter we took an additional valuation allowance against foreign tax credits.

Going forward, we are not anticipating the need to do that, so it should be more based on the pretax income -- whether it's -- if you have a domestic loss, you will you have a benefit, and if you have income will you have income tax.

It will be based on the domestic?

It will be closer.

Yes.

Any concerns about the federal government doing something about closing some of these tax deferrals you have internationally?

We are monitoring everything that's going on.

The President went on television yesterday.

He thought it was important enough -- with all the other things going on in this country, the President thought it was important enough to go on national television to call upon Congress to put an end to people who are evading their taxes in places like the Caribbean and offshore accounts, and if there's tax evaders in those offshore accounts, then of course there's federal law that will put them in jail already.

But then in one of those typical Washington leapfrogs, he then addressed all the companies that were outside America that weren't paying their taxes -- another example of gross misunderstanding by the administration.

Companies are making money offshore and bringing the money home to invest it in America.

And they are entitled to the tax credits.

When they pay taxes abroad, that tax counts as a credit against America.

If the administration would double tax everybody outside America, it would create more unemployment, more stagnation, more bad news, and this is what happens when you have inexperienced people in government.

That was an -- I happened to see that on the plane coming back from Washington yesterday, and that's the kind of lack of focus, populous rhetoric, that has characterized, unfortunately, some of the comments from the administration, which led to companies that did not take TARP funds, cancelling conventions and trips to cities in Orlando and New Orleans and Dallas and Chicago and Las Vegas, putting people out of work in the hospitality industry; and we need a government that knows what it's doing and it has some people in it that have some managerial understanding of how our country works.

Well said.

Thank you.

Your next question comes from the line of Cory Gilchrist of [Marsico] Capital.

Hi, this is Tom Marsico for Cory.

Hi, Tom.

Hey, how are you doing, Steve?

We got the big boss.

Hey, I was wondering -- since I don't get the chance often to have Linda available -- if she can talk about the success of the stimulus program in China so we can see how a command economy is dealing with the problems with the worldwide economy?

And then maybe just mention a little bit about the leadership in Macau and the changes that might happen with Edmund Ho leaving.

Well, just before Linda does what you'd like, Tom, it's nice to have a major owner of a company on the call in person.

And Linda, would you talk to Tom's question?

So I'm sure you guys all know about China's stimulus; and I think the difference between China and perhaps United States is they put the plan much faster in action.

If they put a stimulus plan in, they can get it in action probably within a few months, while it takes us most of a year.

It's a lot on, I would say, infrastructure, which creates jobs, which is good for overall picture.

China also looks at what you probably read, that Hong Kong has opened up RNB, which is a China currency trade settlement for trades that are done in China, which is also a boost for the Hong Kong bank industry.

And so things like that are more in line for Chinese government to stabilize, I guess, the economy, and then also create more employment, which is a long-term solution.

Linda, have you noticed in talking to your customers -- the customers that run a lot of these businesses -- if they are more confident as a result of the stimulus programs that have been enacted?

And then maybe talk a link about what you are seeing in Guangdong province, where the manufacturing end of -- the low end manufacturing in China has been more consolidated, and what's happening there?

And then a little bit about the Visa program through Hong Kong and how that's potentially helping Macau or not having an impact on Macau .

First off, there's one tier -- the lower tier of manufacturers in Guangdong were hurt.

I mean, we all know that.

There are tons of factories that were closed the very beginning, in fact.

However, the ones -- the bigger players have sustained and they are coming back.

We just saw yesterday the first time the trade numbers was up in China.

So those are coming back because I believe people have used up their inventory.

They are starting to reorder again, which is good for the whole export industry.

And as far as visitors and Visa in China, there is not a formal relaxation of policy.

However, we have experienced that there's no shortage to people coming.

If you come to Macau (Inaudible) on a Monday or a Friday evening, the lines could take you hours to go through if you are not a local resident.

So there's definitely enough people that are coming through the border, regardless of whether they have formally relaxed the policy or not.

There has been a formal relaxation between Hong Kong and (Inaudible), which is the similarity of Macau to (Inaudible).

So not to speculate; however, if Hong Kong --

Could you say that again?

There has been a relaxation between (Inaudible) and Hong Kong --

Right.

-- which is a neighboring city in Guangdong province just as (Inaudible) is a neighboring city to Macau.

I just wanted to say that so that people listening would know what Linda meant.

Right.

So of course, it's not just to speculate that between (Inaudible) and Macau will loosen up; however, it's the same analogy where the relaxation of Visa could be coming.

However, like I said, right now whether there is a formal policy now, we've experienced more visitors -- they are coming back.

And as far as the change in administration, I think so far there is one or two leading candidates that by the end -- close to end of summer we will know who is running; and however, the government is very stable.

We have the full central government support on Macau, so I don't think there will be a major change to any policy regarding to our industry.

If I can add to that, Tom, we are familiar with the personalities involved in this process, and I think that it would be safe to say the transition will be seamless.

And that is, since 1979 in December when (Inaudible) Ping took over as Chairman of the Standing Committee or the Central Committee of the Communist party, that has been true in the People's Republic of China now for 30-odd years, and it will definitely be true in Macau.

I don't think that those of us who are invested in China should consider the change in administration from Edmund Ho to the next chief executive as a material event.

It will be one of great public interest; but the men and the most likely candidates who will prevail represent a seamless transfer, and I'm very confident in that statement.

I do think that in China, the response of the government is very intelligent, very focused as compared to the United States, for example.

All of us who have been there for the last seven or eight years have increasing respect for the intelligence and the thoughtfulness that goes into the public policy in China.

It's very considerate.

Even though we -- there has been much written about the change in Visa policy, it was -- there was a tremendous overheating of the economy in Macau when those restrictions or when those tightenings took place.

The cost of living was going up much faster than wages, and the citizens of Macau were suffering.

Our employees, all of them.

You know that last year we had to give a 10% cost of living raise to our base line employees, voluntarily?

The government made no suggestions, but we saw that their rents were going up faster than any of their wages.

There was suffering in the midst of all this prosperity and fancy earnings by companies -- Chinese and American -- in South China.

Living standards were not improving, and they did what they thought they should do, and it turned out to be intelligent.

It had some negative effects on the more aggressive developers in the marketplace, but I'm sure that those effects were temporary; but it was the right thing to do in terms of public policy.

They are very smart over there, and they don't flop around and waste energy.

Very cool.

We are very comfortable being in business there, as well as being grateful.

Thanks very much.

Sure.

Your next question comes from the line of David Katz of Oppenheimer.

Hi, good morning.

Can I just take a moment and ask about your financial strategy going forward?

You've done a couple of equity offerings and obviously put that to good use.

But if you could talk about how you think about the timing of those from the perspective that you could, perhaps, look and say, "Well, we raised some money at $19, and here we are at some higher level." You could also argue it the other way and say, "We are at this higher level in part because we went ahead and raised some money." If you could just share with us --

I agree that's true.

We are at these higher levels because of the shape we are in.

I think you can pay for capital structure these days as opposed to how few shares you have outstanding.

And David, if I could just address that, our focus -- and I've been saying this for nine months -- is maturities.

It's not yield, it's debt maturities.

So what we have effectively done over the last four months, is take in -- we have $1.3 billion of debt maturing between now and 2011.

We've pushed out 900 million of that to 2013.

We've relaxed all of our covenants so that our pure focus is on operating the business; and we raised equity two times, once in November and once in March, at an average price in the mid-30s to make sure that our balance sheet was rock solid, and that there are no questions about Wynn and its financial flexibility.

And what it's basically done is it's set us up to focus our efforts on a number of thing, and the balance sheet is not going to prohibit us from doing anything -- unlike most of our competitors.

You have got to keep your eye on the maturities.

Matt mentioned that.

We are so short term focused, and Wall Street is as usual, so myopic that you want to send them to the optometrist.

Maturities.

Maturities.

It doesn't matter what happens week to week.

You got to take a look at the companies on this street here and say, "What are their maturities like and what are their financial capacities?" That's the way you evaluate these companies in this environment if you've got a brain in your head.

And you have got to be able look before 2000 and you have got to be able to go past next month.

You've got to actually be able to contemplate and to visualize 2012, for example.

So if I -- I'm sorry -- if I may just follow that up in that context, then, with some of the oncoming supply, which is intended at the high-end customers coming to Las Vegas, I know you've made some earlier comments about it, but if you could talk about some of your strategies heading out into next year -- if that's far enough -- and if you want to go to 2012, that would be great too.

Okay, so we are talking about [Auria]?

That's the competitor that's upcoming that they are going to open in City center, right?

Yes.

Let's call a spade a spade.

There's old Bellagio, Caesar's Palace and Venetian or Palazzo, and then there's [Auria].

I'm not sure what (inaudible) is yet or when it's coming on ,line but [Auria] has been announced by MGM to be the most beautiful thing that anybody has ever seen -- a dramatic hotel.

Bobby told me that it was -- Bobby Baldwin -- that it was going to be the prettiest thing in town.

Let's take the man at his word.

There's nothing that we could have done in my 40 years of experience to build a pretty hotel at Wynn in a lovely place at -- in my view, even almost even prettier at Encore.

It's got bigger rooms, they're all mini-suites.

We did everything that we (inaudible) 40 years of experience could make do you to create a place physically that had everything it needed; and then we recruited and interviewed 160,000 people to create the workforce we've got here, and we train them constantly because the only thing that matter is guest experience.

All this talk about capital investment and the structures and the architects, all that, I'm going to tell you in a word, is baloney.

It's 10% of the franchise.

What matters here is customer experience, and this Company has done everything in its power to make sure that customer experience -- even in hard times -- is not compromised.

And that will determine our future.

It's what we do in this building that is where we make our money.

We don't care about Bellagio.

We don't care about [Auria] We don't care about any of that stuff.

We care about what happens to people in this building.

Now, I've been building these hotels for the past 40 years against the stiffest competition.

People thought that Caesar's Palace was untouchable.

Well, nobody ever went over 300 million except Caesar's.

It was a glass ceiling.

Bellagio went 400 million out of the box.

Everybody says, well 400 million was a miracle in the 90s because of Japan.

Bellagio came out of the box at 500 million in casino revenue.

Nobody could go past 500 million.

We came out of the box in '06 with 600-odd million in the casino and in 700 million at Wynn, with 2,700 rooms.

Does that tell you what our attitude is towards competition?

It's not that we are disdainful.

We respect our competitors.

But we recognize that the only way we make money is by taking care of people in our own building.

I don't give a (expletive) what the (expletive) goes on up and down the street.

I only care about what happens in my building.

And all of our strategies boil down to two words: Customer experience.

And that is fundamentally human resource engineering in this property.

Because it's people that give people a good experience -- not carpets, handwoven fabrics or fancy marble or crystal chandeliers -- and we've got our share of all that stuff.

And so do our competitors.

Anybody can buy that junk, and they can even have good taste.

If they don't have it themselves, they can rent it with a good designer.

The question is, what you can't rent is customer experience.

You have got to have an organization that delivers that, day in and day out, 24 hours a day.

Now if any of you listening to this phone call want to know what our competitive posture is, get on an airplane, come out to Las Vegas, go visit the other hotels and then do your own little market survey and walk through this building, engage any employee that works here and see what happens.

Come to your own conclusions.

The only the market survey that means -- that's worth a (expletive) is the one you do yourself when you take the time to go look for yourself.

And that's the way it's going to be tomorrow, and the day after tomorrow, and next year and the year after.

Period, end of speech.

Thank you very much.

Ladies and gentlemen, I apologize.

We have reached the allotted time for questions and answers.

I will now return the call to management for closing remarks.

Matt?

Now, that will conclude the earnings call.

Tom Breitling, Andy, John Strezmp?

Marc Schorr?

Linda?

Anybody else?

Scott?

No, we've told you everything we know, actually.

Our competitors would be happy to know that we are now exhausted.

Bye, everybody.

See you in 90 days.

Thank you.

That does conclude today's Wynn Resorts, Limited, first quarter 2009 earnings conference call.

You may now disconnect.