Wynn Resorts, Limited

name is Ronnie, and I'll be your conference operator today.

[Operator Instructions]

I would now like to turn the conference over to Steve Cootey,

Chief Financial Officer. Please go ahead.

Thank you, and good afternoon. Joining the call on behalf of the

company today are Steve Wynn, Matt Maddox, Maurice Wooden and

myself here in Las Vegas. Also on the phone are the operational

management teams from our Las Vegas, Macau and Boston properties.

Before we get started, I just want to remind everyone that we

will be making forward-looking statements under the safe harbor

federal securities laws, and those statements may or may not come true.

And with that, I'm going to turn the call over to Mr. Wynn.

Very nice to have this call. You've seen our numbers, up.

I have

a couple of comments. We opened the Palace in Macau on August

22nd. We opened the Wynn Macau on Labor Day of 2006.

It took us

about a year to get that property to produce operating profits of $1 million a day. We were able in the -- in September, October,

November, December to get to over $800,000 a day. And the way we

operate, we tend to ramp up and put very little marketing

pressure on a property to find out what its baseline strength is.

I've said this before, but it's worth repeating because I'm happy

to say that since the 1st of the year -- and during that period,

the Macau and Encore properties maintained their levels of

revenue without being negatively or adversely affected by the new

hotel in Cotai and so that revenue was additive.

However, in -- since the 1st of the year, without Chinese New

Year, which is going to begin today, we were able to have the

Wynn Palace come up to a $1.6 million a day, and Wynn in Macau in

$1.4 million a day. So the 2 hotels have been throwing off about

$3 million a day, and I'm very glad. It means that our situation

is right on target, right on schedule. As a matter of fact, we're

a little ahead now, with our hotel occupancy at the Palace, ahead

of our predictions. We're running in the 90s at rate, and we're

pushing rates upwards in our occupancy, which has caused us to

have very good mass market success in Cotai.

We're still barricaded on 4 sides by construction by both by the

city's light rail system and by construction on 2 sides, by SJM

and MGM. And at this point, we're not really clear on when those

properties will open. But we are pretty clear that the light rail

and our barricades, that have interfered with foot traffic, will

be relieved by the spring.

So I think if you're planning and looking at our operation in

Cotai, you can pretty much figure that we're going to be

barricade-free by the second half of this year, sometime during

the second quarter. So the fact that we're experiencing this good

mass market activity is a function of our high occupancy at

Cotai, which produces a higher end customer consistent with our

position in the market, both in the Macau original downtown area

and the Cotai area.

Our fourth quarter was satisfactory in Las Vegas, and January is

operating ahead of last year as we head into Chinese New Year,

which kicks in pretty much tonight, tomorrow and this weekend. So

we expect a happy ending or at least a vigorous ending in terms

of casino activity at the end of January going into Super Bowl in

February and the holidays in the first quarter.

That's pretty much my take as an overlook on our operations.

We've been in construction since July in Boston. Bob DeSalvio is

on the telephone. One of the most unusual parts about our

business is that our 2 Chinese op -- our Chinese operations are

run by 2 Irishmen. And Ciarán and Ian are both on the call.

And

Matt and I are here with Maurice Wooden, who runs America, to

answer any of your questions. And we'd be happy to take them now.

Questions? Ma'am, you can begin to take questions on this call if

I'm still on it. Does nobody have any questions today?

So the color you just gave us in the opening remarks were very

helpful, where Wynn Palace has ramped to on EBITDA per day. And I

was just wondering if you could just talk to us about what has

happened to that property since the last quarter to get there?

Has it been more tweaking the product, more proactive marketing?

Has it benefited from the growth in the market? All of the above?

I just think it would be helpful to get some details around what

has been driving that. And then in line with that, regarding the

margins that you're generating at the property, the EBITDA

margins, like, have you gotten to above 20%? How long does it

take to get to normalized margins at the property?

You know what? I think that Ian is perfect.

He is -- he got up at

30 in the morning to talk to you, and I think we ought to let

him do so.

Felicia, we've done a significant amount of work at Wynn Palace

after the property opened. We completely reconfigured our main

casino floor, and that's driven much greater animation and

excitement. We've added 2 themes, slot sections, a high promotion

-- high-energy promotions area, a new poker area. We've also

increased accessibility to our high-limits area. We're

constructing a new noodle restaurant on the floor, which has made

the casino smaller and also helps with the energy. We have

increased our marketing activity both from an awareness

perspective and also with general players that are visiting. And we have increased headcount.

We've become a member of the much-

fabled Cotai Connection, which is bringing in just over 1,000

extra people a day. And the ramp-up in occupancy from the low 70s to mid-90s has been a big help in animating the property.

And just generally, we're finding after you get through the chaos of the first 6 to 8 weeks, a property settles and the true players in Cotai are finding our property and discovering it and visiting

us. We were very much helped by exposure over the October Golden

Week. And particularly, Christmas and New Year was a very busy

period for us. So people are experiencing the property, the right

type of players are coming and they're finding it to be their

home. There has also been a very, very active program of

reenergizing inactive players, players that had either split

their play from Wynn Macau into the new properties in Cotai or

had moved over to Cotai completely. And we've reenergized a lot

of those players and they're coming to our property. So we've

been helped by a lift in the market also, but it's pretty much

everything that Steve covered earlier.

One of the things that is being demonstrated, once again, it's

not the amount of tables, it's whose active, and we're probably a

perfect example of that. Wouldn't you say so, Ian?

Yes.

Yes, I don't know what our market share is going to show, but I

suspect that it will climb from the last quarter.

Chinese New Year is a great exposure opportunity for us as well.

It's the first prolonged holiday period. So we expect very, very

high visitation from people that would normally attend other

properties.

And if we did our quick math correctly, it looks like VIP versus

mass mix is roughly 60/40. Where do you want that property to end

up?

What about that Ian?

I mean, we're growing all segments of the business. We've seen --

the interesting thing in the split between Wynn Macau downtown

and Wynn Palace is the strength of our junkets and also the fact

that our mass play downtown hasn't been affected a drop. So we're

continuing to grow all segments at Wynn Palace. But where the

split works out, we'll see. But I think it will be healthy and

pretty similar to our operation downtown.

Right. And it could -- I should add this.

Because we get such big

play, volatility plays a role month-to-month in that sort of

thing, probably more so with us than with some of our neighbors,

and that's also true in Las Vegas. But having mentioned that,

volatility is a factor when you look at our company compared to

our colleagues up and down the street here and abroad. But

remember, that volatility factor does have a concomitant benefit.

We always, year-in and year-out, run a higher hold percentage

than our neighbors. And that's a historical fact, and it has to

do with the kind of people that come to a place that is geared

toward the top end of the market. Even though we have more

volatility, we still settle at a higher level than everybody

else.

And just on the EBITDA -- the margin question?

30% in Las Vegas. And Matt, what is it China?

Very close?

Yes. I mean, it's -- Wynn Macau has always been in that 30% range.

And your question was when can we get Wynn Palace ramped up over 20%?

I think that is certainly going in that direction right now. So

we're seeing [indiscernible] on everything.

Yes, that's what I was asking. Like so -- are you over 20% now?

Not

in the quarter, but through this?

Yes, yes, yes.

Yes, we're on our way there. So...

Matt, just quickly in terms of Peninsula low mass hold, high VIP

hold, looked a little lower on VIP at Palace. The net effect of

all of that stuff with respect to EBITDA, any kind of guidance on

that?

It's about -- this is Steve. About $6 million light.

6 -- we're $6 million light. We just had another $6 million.

Would have been another $6 million. Okay, great.

And then, Steve,

on your comments regarding kind of October, November, December, I

think $840 million a day was the EBITDA at Palace. You said over

$800,000 a day for -- was that for each of the 3 months?

I -- Ian, is that -- is it? I didn't look at that, that way, or

at least I had forgotten. Matt, [indiscernible]

It's around...

In consecutive months.

Great. Okay.

That's helpful. And then, Ian or Ciarán, and just

whoever wants to opine. But in terms of what you guys are seeing

in the market right now, and I'm speaking more so towards the VIP side. Clearly from the DICJ results for the fourth quarter, VIP has meaningfully changed.

What is your opinion on that as we look out to 2017? And do you think we're at the beginning of a

sustained rally in that market?

It's been fits and starts throughout 2016. People talked about a

VIP recovery, but we really have seen a recovery over the last

2.5, 3 months. There's a lot more confidence.

There appears to be more liquidity in the market, particularly with the junkets, and it's being sustained. So the outlook is pretty promising.

I have said this before and I want to repeat it again. It is very

important to keep a long view of China. The leadership of that

country, and this is also true of Macau, it is a meritocracy and

there are smart people running the government. They don't move as fast as we do in the United States, especially these days with our new administration, but there is a steady program afoot.

Xi Jinping decided that it was a priority of his administration to

eliminate the perception of corruption that was held by the

people with regard to government. And that effort was vigorous

and protracted and it did have an effect. But it seemed to be the right thing to do for the right reasons, and it had an effect on luxury brands and -- such as gaming and Louis Vuitton and Chanel and Mercedes-Benz and that sort of thing.

But the long-term thrust of China is inexorable and undeniable. And that's why we build what we built, and we're going to build more in the future

because we have real estate to do it. We have a very, very

bullish, bullish attitude about China long term for our company.

And as we manage our properties, we -- in anticipation of that

kind of movement in the general economy, we're being rewarded.

And I think it's probably a sound way of looking at China and our business long term.

Great. And then, if I could, just one follow-up.

I know you

mentioned Bob's on the phone. It looks as if costs for Boston are up maybe $300 million at the midpoint.

Could you talk a little bit about maybe what that relates to?

Yes, the -- this is Matt Maddox. So we're working through our GMP right now.

The previous budget had been in there for a number of years. We put a fairly conservative estimate out of -- in our

current earnings release. And I think over the next 90 days,

we'll have much more clarity as we nail our -- as we finalize our

guaranteed maximum price contract.

But it's moving along. I mean, they're proceeding at pace.

We've

been in construction since July, and we're satisfied with the

progress.

It's -- we've spent about $467 million to date.

Just a question on Wynn Palace. I think it was Ian who mentioned

about some of the physical changes that you guys are making to

the property. Amongst some other things that you're doing is

maybe marketing differently or to different customers. Can you

talk about marketing expenses? Are they elevated relative to what

you think might be a normalized level? And to what extent do you

think they might normalize over time over what time frame?

That's an interesting question. Ian, do you want to take a crack

at that? You or Ciarán?

Or [indiscernible]

Sure. Linked with the opening and marketing expenses were in the

range that we anticipated, but they were slightly higher than

what we'll have as a run rate for the remainder of the year.

We've already seen the marketing expenses start to come down. So

they're within the Cotai range. It's a different market place

than downtown. Marketing reinvestment is generally higher than

Cotai, but it's where we anticipated it to be.

Great. And, Ciarán, welcome to the fun conference calls here.

Maybe you can talk about, since you're new, where you see the

opportunities for Wynn Palace to improve? And Steve Wynn, maybe,

Steve, you can talk a little bit about maybe some of the

opportunities that are more obvious now that were less obvious

upon the opening in terms of ways to improve revenue and

profitability there from here.

Go ahead.

Go ahead, Ciarán.

Thank you for the welcome. I'll let Ian talk to the opportunities

there for Wynn Palace as my fault as now is going to be to

continue to maintain the position and the performance of the

downtown Wynn Macau property. Obviously, the Peninsula remains a

very solid proposition for the very core market of high-level

game as they're coming into Macau. And I think the performance in

Q4 is solid as that has been despite the opening of Wynn Palace,

despite the opening of some of the other new properties on Cotai.

All is very well moving forward into future. Obviously, work to

be done to continue to maintain that position and maintain the

service planners and so on. It's been incredibly welcome and

enjoying the property and seeing just how much commitment there

has been, both from Las Vegas in terms of the spend to maintain

the physical property and also the commitment and the hard work

of the team of professionals that are there and -- that provide just

excellent service. We've just got to continue to build on that.

Look, the way to look at us and that'll give you the insight to

project us, we have a very definite approach to this whole notion

of the gaming business and integrated resorts. And our approach

is based upon 2 solid truths. Number one, better customers.

People who have the money to choose, who engage in visiting

hotels and facilities of this type have a common thread that is

undeniable. And that is they go where they're treated the best

and where the facilities are superior. If you are a player who

attends these places, you have a choice and you always go -- in

the long run, always go with the rooms are better, where the

facility is immaculately maintained and where the staff has had

invested in it tremendous amount of energy for training and

personal attention to the guest. That is to say, we're very

customized in the way we treat our people and the way we present

our facilities. In the long run, that garners the strongest

possible clientele. And again, I point out, it's who's in the

building, who's sleeping in the rooms that determines the

results, both in gaming and non-gaming results. It is true that

there is a second approach to this business, which is more akin

to Walmart and the mass approach. And the Sands and the Galaxy

and the Melco people do that beautifully. We come to these people

with a different message, that if you have the money and the

inclination to visit such places, ours offers the most luxurious

environment and the best service and the best food. And in the

end -- and our shops are catered to the kind of people we expect

to be staying in the rooms. That's to say that our facility is,

at the end of the day, truly integrated, but it's integrated with

a philosophy that's integrated. And that tells you our story.

That's the Wynn story plain and simple. It's never been any

different, whether it was the Golden Nugget downtown, the Golden

Nugget of Atlantic City, Beau Rivage in Mississippi, the Wynn and

the Encore in the central part of Macau or the new Palace at

Cotai. And that will be exactly what happens in Boston.

And

that's going to be our story, and it won't change. And you've got

a long history of our operations from Rivage and Bellagio and the

Golden Nugget to the buildings that we're operating today. There

is nothing mysterious or secretive or in a certain sense,

particularly cunning, about what we do. It's very

straightforward, right out in the open where everybody can see

it. Our competitors choose to approach their challenge in a

slightly different way, and it's certainly valid based upon the

earnings and the results of those places, but we slot in

somewhere else. And in the long run, it gives us tremendous

stability and performance that a room for room, foot by foot in

any building that we built, they tend to over-perform. And we're

comfortable doing this. I would say that we probably -- our

management team is a collection of men and women who are

attracted to the pursuit of excellence. We share a common

understanding of who we are and what we present to our guests. So

we're at least consistent, but we're definitely different in our

approach than some of the other places. And that's not to say

that their approach is less valid than ours. But ours is well-

defined and historically consistent.

Steve, can you give us the latest update on Paradise Park and the

developments on the golf course?

Well, that takes up most of my time. And we're very close to

having our choices settled in. And we are adding significantly to

our non-casino revenue, both in the building of the lagoon and

everything that surround that lake. It's a 1,000-feet x 1,000-

feet in general terms, close to 20 acres of -- 20 or 23 acres of

space, surrounded by a 4,400-foot long boardwalk, that's 18-feet

wide and which is ringed with retail food and beverage and an

additional hotel rooms, convention and meeting space and various

attractions for the 800,000 people a week that come here. And it

includes a new big theater, a new tower of rooms, substantial

expansion of our convention and meeting space and related

entertainment attractions and customer activities that we think

will appeal to a broad range of folks. And having the ability to

have a perimeter that's white sand beaches and a boardwalk seems

to us to be pretty fetching in the middle of the Southern Nevada

desert. We have a unique...

What are you thinking in terms of the timetable?

I hope to take -- Matt and I hope to take the business plan to

our Board of Directors in the second quarter and therefore, be in

a position to begin work in the fourth quarter of this year. I

say that, but we have to have our prices and our business plan

all locked down before I go to my board to get their permission

to proceed. We keep the board apprised in every meeting and on

every telephone call of our latest nuance in that development.

But the incredible amount of options that were available on this

130 acres with a 1,000-acre feet of private water, the choices

were numerous. And my challenge and my design team that had been

with me for over 35 years has been to make sure that we make the

right choices. And there have been so many of them, it's been

dizzying. But I think that we've nailed it down.

We've wrestled

it to the ground. And Maurice, Matt, all of us have a tremendous

amount of confidence that it's the only way forward. I mentioned

that last September -- for example, very interesting. Last

September, there were 30 days in Las Vegas, for example. We won a

$1,870,000 a day in the -- in gaming, and that had to be the

biggest number in America or anywhere but Singapore and Macau in

the world. And as good as that was, $1,870,000 a day, and that

was net of any discounts or promotion allowances, our non-casino

revenue was $3,340,000 a day net of comps. That tells you about

this causal relationship between non-casino revenue and an

integrated resort and casino revenue. It's the non-casino things

that bring the folks and determine their choices of where to play

the games. And so, when we approach the design of the golf course

property, which sits on our books at a cost of 0, that whole

parcel, it's -- has been written off in prior development. We

think that we want to take our non-casino revenue to enormously

high levels because we think that the probability of this 800,000

people a week in this city remaining the same and growing is

almost a certainty. And that's the fundamental assumption about

Las Vegas that leads us to wade in to the convention and non-

casino end of the business with a high degree of confidence and

entertainment as well.

Two quick questions, and welcome, Ciarán. I am -- I wanted to

focus on the growth in VIP in the fourth quarter versus

sequentially from the third quarter just in the market as a

whole. Yet at the same time, the overall trend in mass was flat.

And the -- and I'm -- I would have thought that there would be an

inverse relationship 3 or 4 months ago. So I wanted you guys why

you thought, particularly mass was -- has yet or is slow to take

off given the openings.

Do you understand that question, Matt?

Yes, I do. I think that if you look back over our history, Harry,

when new properties open, the junkets ramp up much faster than

mass. They get quick injections of liquidity and hit the ground

running. The mass market customers with new openings tend to not

come right away and then find their way to the market more in --

a little more slowly. But junkets pretty much come out of the

gate at 100%. So that's what -- I think what you saw in the

fourth quarter was VIP revenue at $4.1 billion compared to $3.5

billion for the market. In the third quarter, you saw the new

properties really powering the VIP market.

And then again, with mass, we're still hamstrung, Matt, don't you

think by the barriers that surround our property?

We are, we are, and in areas from out the market overall. Mass

was -- it was pretty much flat from the third quarter, but that

has always, when I look at the data, ramped up more slowly than

VIPs with new properties opening for the -- due to what the

junket operators, how they inject the liquidity straight into the

market.

Does that get you, Harry? Is that your -- does that answer?

It does. And, Steve, a question for you.

You commented about how

bullish you were about making incremental investments in Macau

and China. If you could put that comment into context versus the

-- kind of the rhetoric that's been going on between our new

administration and Xi Jinping's Beijing administration, it's been

strained. What do you think the implications are for Wynn

development in China, given this, at least, initial saber

rattling?

I think that's probably a good word for it. I'm of the mind and I

have a reason to believe that this position is shared in

Washington. As you know, I am acquainted with the administration.

Several of us in my -- in our business, were sitting within 30-

feet of President Trump when he took his oath of office on the

platform last Friday. We all believe and I mean, all of us, that

the most overwhelmingly important event geopolitically for the

next 50 years is liaison, a constructive liaison between the

People's Republic of China and the United States of America. That

truth is undeniable. That dynamic is unquestioned.

Now, there are

issues that are real between 2 dynamic economies like China and

the United States, undeniably. And there's a difference between

free trade and predatory trade. The government in China

understands that it has to do a better job with intellectual

property rights. They do the best they can in China to create

jobs and take people out of poverty, and that makes them very

dynamic in the management of their economy with that single goal

in mind. It affects everything from the way they treat energy, to

create plants and factories, to how they manage the currency and

the movement of currency and their trade policy. The United

States has its own point of view on that subject, and the

President has been really clear during the campaign that he wants

to protect American jobs. Well, that's what they want to do in

China as well. So there's going to have to be a reproach --

there's going to have to be an adjustment. But we basically do

have intelligent people on both sides dealing with this. My own

feeling is that it will resolve itself intelligently. You can

make all kinds of examples. I mean, China controls its currency,

but during QE1, 2 and 3, we devalued the U.S. dollar by close to

20%. So when the Fed in financing a deficit of close to $2

billion a day increases the money supply, well, that's the same

sort of thing, we just do it differently than they do in a

centrally-controlled government like Beijing. But a lot of the

same things are happening on both sides of the ocean, and they're

being done to protect the citizens of those 2 countries. Yet,

there isn't a leader in America or a leader in China that doesn't

understand that when the United States and the People's Republic

of China come together on an intelligent basis, the world is a

better place. I'm in a position to know that, that opinion is

held in Washington and Beijing. And it gives me long-term

confidence in spite of what happens short-term verbally. We

mustn't confuse long-term United States policy with the short-

term conversations that lead to its development. Do I sound like

a politician? That's what happens.

That's what happens. We just

spent 4 days in Washington and you get brainwashed. It's a

sickness but it's fascinating and the fact that America is going

through a change is probably the greatest thing that's happened

in my lifetime because we were so on the wrong track for the past

8 years. And I've made no secret about that, and I think we're in

for better times for sure.

To rein this back in towards -- or back towards Wynn in China,

with -- despite these -- the somewhat strained verbal sparring,

you feel confident that additional investment in Macau is coming?

Absolutely.

So focusing on Macau in the fourth quarter, I'm comparing the

Wynn Macau property to Wynn Palace. Your VIP turnover was

comparable but your mass drop at Wynn Palace was about 35% lower

than Wynn Macau. As you continue to ramp up Palace, how do you

think that should change?

Directly related to the physical barriers that surround our

properties, and that only gets better with each passing week and

month this spring. That's my answer about that.

There's an awful

lot of people a few hundred yards from our property, but they

can't quite get there, and they will, they positively will, just

like they did in the past. Watch it change.

I tell you that it

will change. You can believe me or not believe me, but it's as

simple as that.

It's also due to Wynn Macau having had 10 years to build up an

incredibly high stable of high-limit players, particularly in

Encore and it will take time to build that at Wynn Palace. Seeing

is believing. It gets better every week.

We're seeing a buildup

in our high-limit players and that will continue to grow over the

coming months.

All right. And then just, Stephen, December you sold some of your

Vegas retail to Crown Acquisitions, can you just talk about the

rationale there?

Matt did that deal which was absolutely perfectly timed for us

and I'll let him describe it.

So we looked at it for multiple reasons. #1, the people that we

partnered with are long-time retailers and in the business. And

so we wanted to continue to control our retail. We sold a

minority stake. We thought it was a good capital raise at a

multiple that double where we trade on the market. And so not

only was it the ability to raise capital to fund future projects

at a really high multiple, but we brought in partners with a lot

of experience in the luxury retail space to complement what we

already do. So for us, it was really a win-win, and we still

control it and consolidate the profits of the retail space

because we have over 50% of the ownership.

And Haim Chera and his father, Stanley and his -- that whole

Chera family that makes up the Crown organization, they taught us

a few things right off the bat. They gave us a few pointers in

the nuance of how we do our leases that immediately increased our

profitability.

Yes.

I wanted to ask about -- you talked about how Palace is going to

ramp up. At your Analyst Day last year, I think you talked about

a range of kind 6.30% to 8.50% which is a wide range. Is that

still where you're thinking it will ramp? And then similarly, I

think you had talked about Wynn Macau, that you were maybe

factoring in, that it would be sort of 20% or 25%

cannibalization. Is that still -- also, do you think that you

will maybe sort of ramp to that on the downside at Wynn Macau? I

know this quarter was obviously -- it was only down 7% in EBITDA,

but just thinking about what your expectations were originally.

We don't think there's much cannibalization. That 25%, where did

that come from?

That was our analyst presentation showing the Wynn Palace, Wynn

Macau market study of over a year ago, back about in April.

Do you still believe it?

No. What we've seen is Wynn Macau has held up better than we

anticipated due to all the reasons we just talked about, the

stickiness of the clientele and the 10 years of history. And the

ramp-up of Wynn Palace, as we talked about in our last call, is

taking longer. We actually didn't anticipate all of the

artificial barriers, the construction, not being on the Cotai

Connection, et cetera. So getting to the $600-plus million in

2017, it's going to take longer to ramp just -- than that just

like we said on our last call, but Wynn Macau is actually

performing better than we expected.

Oh yes. No, and I wasn't suggesting that, that would be the '17.

I understand that the property opened later and the ramp-up

issues. I'm just wondering if that is still the range where you

think it will ultimately ramp. And then similarly, do you think

that as that ramps, the Wynn Macau will maybe get a little bit

more cannibalization along the lines of what you had originally

thought as well?

Well, Robin, with regard to the cannibalization, as Macau -- as

the Palace has ramped up, we haven't experienced a

cannibalization downtown. So what we thought before but what

we're seeing now are slightly different in a better way. So the

only way that we can really know, Robin, is to watch the ramp-up

of the Palace and to continually monitor the performance of the

Encore Wynn facility in Macau. You're asking an interesting

question. We are pretty much as you are, an observer of this.

So

far, it's been good news. But the biggest thing we're looking

forward to, as these barriers and these obstructions come away,

is the ramp up of our mass business. I would have thought, Robin,

that the cannibalization would have occurred with the junket

operators and that's -- because that's where we thought it would

show up, and it didn't as yet. So if the mass market ramps up in

Cotai, I don't think it's going to affect the mass market of

downtown. That would be -- that would have been our -- that would

have been where we looked for at the least. We would have looked

for at the most in the junkets. And as you see, that's not what's

happening. I think that there's more good news in the mass market

in Cotai for sure because of all these other things we've talked

about, and I'm encouraged by what we're seeing with the junkets.

But I think that the Wynn Palace will get where it's supposed to

get. I think Wynn Macau may stay better than we thought.

Great. That's helpful.

And then…

Is that response...

Yes, that's just -- so I think what you're saying is that you do

still expect that -- that range that you talked about 9 months

ago, it's still the range ultimately that you'll get to...

With one exception. With the exemption that we may not experience

the cannibalization levels we mentioned earlier.

Right. Right.

No, that's great. And then last thing, just

quickly, what percent of rooms are sold for cash at the Cotai

property?

What about that, Ian?

So what we've experienced is very similar to the Cotai model.

We're doing around 60% of our rooms are casino -- directly casino

related, more comp-related and 40% are tour and travel, FIT and

wholesale.

I just wanted to go back to some of the sequential ramp-up you

guys are starting to see into Q1. From our seat, it's always

getting a little harder to get a sense of what's going on with

the market, kind of on a monthly basis. So I guess my question is

in terms of that big ramp-up that you're continuing to see so far

this year, how much of that would you characterize as the market

versus Palace and your properties continuing to take share?

Ian, do you have a feel for that question?

Well, we've -- there was a very pleasant surprise at the end of

the last year and earlier into this year. We had a very strong

Christmas and New Year as a market, a lot of holiday travel, a

lot of holiday travel out of China, and revenues were excellent.

And the sentiment about Chinese New Year is particularly strong.

Last year, Chinese New Year, people were pretty duller entering

it, not expecting much, but this year, at all levels of the

business, people are anticipating a very, very strong Chinese New

Year.

We are as well in Las Vegas. Maurice is here, and he can address

the -- this next few weeks.

So we've actually continued to see a great trend that we saw at

the end of last quarter or the last month of last year, into the

earlier part of this year. And our parties and our events are

full. And as far as the amount of credit coming in, it's been

pretty robust. So we're pretty confident that we've seen the kind

of activity that makes us feel comfortable that we've got the

kind of business flow that we've been looking and anticipating

for this year.

Great, and maybe just to switch gears for a follow-up. Now that

Palace seems to have stabilized a little bit and the ramp-up's

looking pretty secure, could you maybe talk to us how you're

thinking about leverage targets kind of into 2017 and how that

might filter through to possibly looking at the dividend policy

again, how that's sort of fits in your pecking order versus kind

of growth capital?

Well, Shaun, it's Matt. If you look at our balance sheet, we have

significant cash on the balance sheet. We have projects underway.

So I would expect debt to remain fairly constant over the next

couple of years, but EBITDA is growing. So we're not really

interested in paying down a lot of debt right now. At the rate

our EBITDA is growing, leverage is very comfortable, and we have

lots of cash on the balance sheet for future projects.

So Matt, does that mean that, I guess, to the extent you're

generating positive operating cash flow, there is room to bump

the dividend? Or would it be more fair to kind of think about

being conservative right now, given just all -- just capital

budgets and things that can tend to shift around?

Well, we have only 100 million shares outstanding, so bumping the

dividend conservatively is not a -- doesn't really change our

financial posture. We're doing $0.50 a quarter and I suppose it's

possible we could go to $0.75 or something, but we haven't

a, working on our

Macau operation and getting it stabilized; b, finishing what

we're doing here in planning in Las Vegas; and c, putting final

touches on everything that Bob DeSalvio is running in Boston. The

gaming market in America is subject to change. Things happen and

opportunities present themselves. I think that we probably want

to take a look in the next few months and see how all that plays

out before we tinker with any of the kinds of things you're

talking about, like a dividend or anything like that. The

market's moving, opportunities may present themselves and then

that would have to be folded into our planning financially. I

don't think there's just a hell of a lot more to say than that.

I think that's right.

Given that you have meaningful operations on both the Peninsula

and in Cotai, I'm interested in your thoughts on how the opening

of the PacOn ferry terminal may affect visitation trends in

Macau?

What do you thing about that, Ian?

I think any infrastructure that comes online is going to be good

for Macau. It allows more visitation.

It'll certainly the

Peninsula, the current ferry terminal and -- excuse me, it will

help Cotai. The current ferry terminal in Cotai is very temporary

in nature and not a good arrival experience. So we're looking

forward to the opening of it.

Great, that's helpful. And as a follow-up, based on some recent

filings, it looks like there were some small changes made to the

Wynn Boston Harbor floor plans. Can you comment on those changes

and maybe the thinking there?

DeSalvio, you haven't said anything today. Why don't you chime

in?

Sure. Yes, we actually got some -- I think we got some very good

learning off of the opening of Palace, and we've been making

shifts in terms of lightening up a little bit on the retail,

increasing some food and beverage and meeting space opportunities

because we thought that would be the right mix for the property.

So we made those adjustments and they're going through final

drawings, and we think it was the right move.

I wanted to just -- I know it's been asked from a couple of

different angles, but I wanted to ask about the VIP business and

the degree to which there is market lift. And specifically, how

sustainable you believe the -- I think Ian used the word

excellent in describing the trends. How sustainable you expect

those to be versus how much is the trajectory of ramp-up in that

business because you are now open?

Good question. And I understand why you ask it again.

So there's

market trajectory and then there's our trajectory. We have an

advantage. You remember a few moments ago, Ian used the word

sticky, meaning the customer base was sticky at Wynn Macau. They

like it there and it's hard to pull them out of that place

because it appeals to them on many levels. And what happens is

our trajectory is very much linked to the discovery that

customers make of the superiority of our rooms, of the whole

place and how much fun it is to stay there. So we tend to get

stickier with better players with each passing month. And so, I

have to say that we only make money by paying attention to our

own business. What the market does is very important, of course,

because we're part of it, but we're working on our own trajectory

and we have a definite way of thinking about that and addressing

it. If I understand your question correctly, there's my view.

In other words, you're comfortable with where your trajectory is

headed and the market helps to some degree, but it's like...

Well, sure because we spent $4.4 billion making sure that we

could feel comfortable. We didn't really leave this to

salesmanship or verbalization by a CEO or any of the other senior

people in the company. We did this by putting our money where our

mouth is, and letting the property speak for itself. And as

people discover it, the property speaks with a very loud,

affirmative voice and says -- and beckons to people. When they

discover our rooms, when they see the facility, they say, "Wow, I

could stay here." Now, it takes a while for them to do that but

they do it. They always have done it, in Nevada, in Mississippi,

in New Jersey. They'll do it in Boston.

It's always been the

same. The history of our operations is a straight-line story,

very much like the one that I keep repeating on these calls. And

it's the only thing we understand.

Understood. If I can just ask one more about the construction

disruption that you discussed at the beginning. MGM is on one

side and the degree to which they may be having an impact with

construction disruption today versus when they open which is now

later than what was anticipated. If you can just share some

thoughts about sort of how you see that impact or lack thereof

evolving over the remainder of the year, that would be helpful.

Okay. You bet I'd like to comment on that.

In 1986, I bought the

property that is now known as the Mirage, and I built -- and it

was big enough to hold Treasure Island and the Mirage over a

period of time. But we built the hotel right up against the

Caesars Palace borderline, on the south end of that assembly

because we wanted to be near our neighbors. We thrive in a

competitive environment. We do much better when there is more

people around us, not less because there's a certain percentage

of the people that go to these other hotels to which -- to whom

we appeal in particular. It doesn't do us any good to be alone or

isolated. We want to be snug up against our neighbors because the

more rooms that surround us, the more people, the better chance

we have of attracting them. So we anxiously await the arrival of

SJM and MGM. The reason that the Wynn Macau was such an

overwhelming whopping success was because of its proximity to SJM

to the Arc, to -- what's the other place, Matt, something world?

StarWorld.

StarWorld. We're surrounded downtown by these people and it

allows us to have an extraordinary, outrageous return on capital.

I think we spent $750 million on the Wynn Macau, and we made like

$100 million dollars a month at one point there. It's because of

our proximity to our neighbors, it's because we're in the midst

of so many visitors that we have the opportunity to exploit our

competitive advantages of facility and service. So we're dying

for MGM to open and SJM to get up and running. We welcome our

neighbors. We're willing to build bridges between the properties,

easy access. And that's one of the reasons why the Sands

experiences such terrific results. It's because of their

connectivity and their proximity to one another. And right now,

we're not enjoying that but we will, I hope, in 2017 at some

point, have the benefit of active, dynamic, well-constructed

neighbors who each brings something to the world of visitors that

makes Macau more powerful. That's the beauty of this development.

Las Vegas and Macau prosper because of the development, not in

spite of it. And we ride that wave like a surfer.

So we're

hopeful that they get open in the fourth quarter or the third,

whenever. We haven't anything lately, maybe you have.

I haven't

heard when SJM is supposed to open. Does anybody in my team know

what SJM's announcements are? It's a mystery.

Hopefully, maybe

when they issue their earnings, they'll talk about it or the

investment community will ask them. Does anybody on this call

know when SJM is supposed to be finished? Do you sir?

I do not.

Yes. Ian, do you know what the latest completion dates are on our

neighbors?

Sometime in 2018 for the Lisboa Palace and all therein. And for

MGM, they announce the second half of this year.

But it's '18 for SJM?

Yes.

Well, they're on our south border. That's the least...

What's going to be interesting is we're going to have a quartet

of quality on the west side of Cotai, Steve. You'll have

ourselves, MGM and SJM, and then with City of Dreams across the

road with their new Morpheus Tower, you have 4 high-quality

projects all within walking distance of each other. So that would

become its own hub in Cotai; the first stop on the light rail

after the new PacOn ferry terminal in the airport. So the

future's very bright for West Cotai.

I wish it was true in Las Vegas, across the street from us, where

Packard [ph] was going to build and what I think the Malaysian

folks are going to do it. We love having neighbors.

The SJM

facility is on the south side of our property and that's not

where the light rail is. The biggest interference we've got is on

the west side which is where Melco and MGM and our front door is, our lake and our gondola and all of our other access points. So we get our biggest slug of reliefs when MGM opens and when they

take down the barricades on the west side in front of our gondola

and our -- in front of our presentation. SJM opening in 2018

probably is -- their construction is the least impactful of the

problem that we've dealt with this year in terms of the

barricades. It's the west side of the property that really is

important to us and that's where we're looking for good news in

the second half or sooner.

Thank you, everybody. Look forward to talking to you in 3 months,

and we'll have maybe more interesting stuff to talk about then.

Meantime, have a nice time.