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October 21, 2017

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Wynn says he has ‘most precious piece of real estate’ in Las Vegas

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Steve Marcus

Steve Wynn, chairman and CEO of Wynn Resorts, gives a keynote address during the annual Electronics for Imaging users conference Tuesday, Jan. 19, 2016, at Wynn Las Vegas.

Company: Wynn Resorts, Limited (NASDAQ: WYNN)

Revenue: Net revenues (gross revenues minus promotional allowances) for Wynn were $1.53 billion in the second quarter of 2017, a 44.5 percent, or $470.9 million, increase from $1.06 billion for the same period last year.

Income: For the second quarter of 2017, net income was $74.9 million, a 6.4 percent, or $4.5 million, increase from $70.4 million for the second quarter of 2016.

Income per share: Income per diluted share was 73 cents in the second quarter of 2017 compared to 69 cents per diluted share for the second quarter of 2016.

Takeaways: Wynn Resorts is talking with other companies to develop land behind the lagoon project planned just east of Wynn Las Vegas and Encore, CEO Steve Wynn said in a conference call with gaming analysts today.

During the call, held to discuss Wynn Resorts’ second-quarter earnings, Wynn said he has received “expressions of interest from companies that want to come on to that property and participate in joint ventures or ground leases. Those are very exciting and give me a lot of confidence in how we’re going to take advantage of that asset in next four to five years.”

Wynn called the land, which runs along Paradise Road not far from the Las Vegas Convention Center, “the most powerful latent asset this company owns” and said integrating it with the lagoon and meeting space he plans to build “makes that piece of real estate without any possibility of debate the most precious piece of real estate in the resort industry in Las Vegas.”

Most of the questions from analysts concerned the results from Wynn Resort’s properties in Macau, including the Wynn Palace, which, Wynn said, continues to see growth despite the construction projects that surround the resort on almost all sides.

However, gamblers at the company’s other resort in Macau, the Wynn Macau, were extremely lucky early in the quarter Wynn said.

“At Wynn Macau, we had a most unique statistical anomaly, one that I’ve never seen in my 50 years doing this,” he said. “Even with enormous volume, one of our leading outlets lost money for an entire month ... In April the bottom fell out and all the players won millions of dollars.”

Overall, however, Wynn said he is pleased with the company’s performance and has plans to add to its room inventory in China as soon as possible.

“As soon as the government lets us, we’ll build more new and beautiful hotel rooms,” he said. “We have property on both sides of our current land concession and we have already built connections to both sides of it, so we can build rooms when we want. We will erect beautiful hotel towers with convention and meeting space the minute we’re allowed to do it.”

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