Wynn Resorts, Limited

Three Year Strategic Plan for 20092011

Kristin Cook Curtis Jacobs Ryan Melton Hope Wofford

Francis Marion University Florence, South Carolina

Presentation Outline
I. II.

III.

IV.

Introduction Mission/Vision Internal Assessment a. Financial Ratios b. Organizational Chart c. Market Positioning Map d. Marketing Strategy e. Value of the Firm f. Strengths/Weaknesses g. IFE External Assessment a. Competitor Analysis b. CPM c. Opportunities/Threats d. EFE

Strategy Formulation a. SWOT b. SPACE c. BCG d. IE e. GSM f. QSPM g. Recommendations VI. Strategy Implementation a. EPS/EBIT Analysis b. Pro-forma Statements and Ratios VII. Conclusion
V.

Company Overview
Formed

in 2002 by leading developer Stephen Wynn Currently has 3 casino resort destinations

Wynn Las Vegas: Opened April 28, 2005

2,716 Rooms 111,00 square foot casino 18-hole golf course on the Las Vegas Strip

Wynn Macau: Opened September 6, 2006

600 Rooms 205,000 square foot casino

Encore at Wynn Las Vegas

2,034 Suites 72,000 square foot casino

Vision Statement
Wynn Resorts, Limited strives to be the leading provider and choice of elite, luxurious casino and resort experiences worldwide.

Mission Statement
Wynn Resorts, Limited targets high net worth individuals by providing a variety of socioeconomic activities in the casino and resort industry. 1,2 With our resorts in Las Vegas and Macau (Peoples Republic of China), we aim to reach a global customer base. 3 We continually strive to provide and research new and innovative gaming and lodging amenities to our customers. 4 Wynn Resorts, Ltd. continuously seeks new ventures and opportunities for expansion in order to advance the Wynn brand and maximize shareholder wealth.5,6 We continue to provide the highest quality and unique gaming resort experience to our customers. 7 Investment in the social and environmental well being of communities in which we operate, such as Las Vegas and Macau, is a top priority. 8 Wynn encourages employee growth, training, and development in order to provide the most luxurious and hospitable environment possible for our customers. 9

Mission Statement of MGM

The resorts and casinos of MGM MIRAGE are some of the most famous in the world, widely credited for establishing a new generation of excitement in Las Vegas! Our 24 destinations are renowned for their winning combination of quality entertainment, luxurious facilities and exceptional customer service. Our dedicated staff of over 70,000 employees are committed to providing an unsurpassed experience for every one of our guests. We are actively expanding our presence globally, with potential developments in a number of domestic and international markets. At MGM MIRAGE, we are all striving together to deliver our enticing blend of entertainment to every corner of the world.

MGM Mission Statement Analysis

-Mission statement includes the majority of the 9 core components of a good mission statement

-Does not mention a concern for public image

-This statement gives a platform upon which MGM is able to make strategic decisions.

Financial Ratio Analysis

Ratio P/E (TTM) Quick Ratio (MRQ) Current Ratio (MRQ) LT Debt/Equity (MRQ) Total Debt/Equity (MRQ) Net Profit Margin (TTM) Return on Assets (TTM) Return on Investments (TTM) Return on Equity (TTM) Total Asset Turnover (TTM) Wynn Industry Sector 7.89 0.64 28.81 2.03 4.60 1.14 2.13 4.90 1.49 350.76 8.76 37.25 350.98 9.32 76.63 14.11 0.56 1.20 7.04 1.04 1.16 8.02 1.60 1.69 26.32 2.05 3.72 0.50 0.08 0.48

Current Organizational Chart

CEO & Chairman of the Board

CAO & Executive VP

COO

CFO & Treasurer

Senior VP & General Counsel & Secretary

COO Las Vegas

President Wynn International Marketing, Ltd.

President Wynn Macau

President Wynn Las Vegas

Senior VP & CFO Las Vegas

CFO Macau

Problems with Current Organizational Chart

-Dual titles of top executives, such as Chairman and CEO -Does not include some of the necessary functional business units, such as research and development -Executive titles are confusing and do not effectively describe the functional area of business of the position -Hard to distinguish a proper chain of command for the different geographic locations

Proposed Organizational Chart

CEO

CIO

CMO

CFO

COO

HRM

CLO

R&D

President of US Operations

President of Macau Operations

VP Casinos LV

VP Lodging LV

VP Food LV

VP Entertainment LV

VP Casinos Macau

VP Lodging Macau

VP Food Macau

VP Entertainment Macau

Organizational Chart Titles

-CEO- Chief Executive Officer

-COO- Chief Operating Officer

-CIO- Chief Information Officer -CFO- Chief Financial Officer -CMO- Chief Marketing Officer -HRM- Human Resource Manager

-CLO- Chief Legal Officer

-R&D- Research and Development

Organizational Chart Improvements

-Divisional Structure by geographic region

-Eliminates dual titles

-Clearly outlines the necessary functional business units -Executive titles more clearly defined and Presidents report only to the COO -Clearly defines reporting relationships -Gives Wynn Resorts a defined unity of command -Allows each geographic unit to adapt to regional trends independently of the other(s)

Succession Plan
Create a formal succession plan because currently we do not have a clearly defined or published plan of action in the event of a separation of Stephen Wynn from the company. We suggest the COO, or another top executive, should move up to the position of CEO. Then divisional presidents would move up to replace those individuals. The top executives in the company should have a retreat once a quarter over the next three years for leadership training.

Market Positioning Map

Wynn Las Vegas Sands

MGM Mirage

Market Positioning Map

Wynn

Las Vegas Sands

MGM Mirage

Current Marketing
-Reward system that offers discounted and complimentary meals, lodging, and entertainment -Use integrated database to target specific customers for promotions -Marketing executives located in Tokyo, Hong Kong, Macau, Singapore, Taiwan, Vancouver, and southern California -Types of Advertisement: -Television -Radio -Magazines -Internet -Direct mail -Billboards -Differentiated product from competitors by offering higher standards of luxury -Current Target Market- Premium gaming customers internationally

New Marketing Strategies

-Discontinue advertising expenditures on direct mailings and radio -Develop a resort stimulus package by offering $1000 gaming vouchers to our customers that live within driving distance of Wynn Las Vegas

-Increase online advertising on gaming websites such as PokerStars.net

-Increase marketing in India by 1.5% over the course of the next 3 years. India has the fastest growing number of high net worth individuals (those in our target market).

New Marketing Slogan

Luxury. Style. Elegance. The Wynn Experience.

Map of Operations

Las Vegas Macau

Map of Competitor Operations

Michigan Las Vegas Mississippi Louisiana Macau PA Illinois

Singapore

Website: Wynn Las Vegas

Website Analysis
Eye appealing A lot of Photographs Easy to find headings Click-able Links

Can only reserve 3 rooms at a time or up to 8 people Scrolling photo bar not user friendly Website requires fast user connection speeds to perform optimally

Website: MGM Mirage

Website Analysis
Wynn Las Vegas vs.

MGMs The Bellagio

Can be put in full screen for easier viewing Easier to navigate to other Wynn property sites More pictures of resorts

Can easily select another language Have show ticket prices listed on website were it is easy to find Includes air/hotel packages on the main page

Company Worth Analysis

Company Worth Analysis (Year-End 2008)

Stockholders Equity Net Income x 5 (Share Price/EPS) x Net Income Number of Shares Outstanding x Share Price 5 Method Average $ 1,948,159,000

$
$ $ $

1,051,030,000
4,579,023,485 4,581,322,080 3,039,883,641

Strengths
Occupancy rates at Wynn Las Vegas at 96% in 2007 Occupancy rates at Wynn Macau at 88.8% in 2007 Net income rose 92% in the first 3 quarters of 2008 The senior executive teams has on average approximately 25 years of experience. Wynn Resorts, Limited has over $1 billion in its cash account Wynn Resorts, Limited owns one of only six gaming concessions in Macau The only resort to receive the Mobil 5 Star Award Wynn Macau and Wynn Las Vegas table winnings per unit per day are 118% and 27% greater than the market average, respectively Wynn Macau and Wynn Las Vegas slot winnings per unit per day are 132% and 45% greater than the market average, respectively Wynn Resorts had 17% of the Market Share in Macau in the 3rd quarter of 2008 (8% greater than the fair share)

Weaknesses
Has outstanding debts of $3.5 billion Only have 3 locations providing cash flow Stephen Wynn has the power to select the board of directors Wynn Resorts relies heavily on the long-term tenure of Stephen Wynn as CEO for company survival 42% of currently outstanding stock is owned by 2 owners: Mr. Wynn and Azure USA The company has no published vision or mission statement Wynn Resorts, Limited has no resorts in Atlantic City, one of the highest revenue gaming areas in the world Shares of Wynn Resorts have fallen 66% since February 2008 The company has a Beta of 2.36 Occupancy rates dropped 4.2% in 2008 from 2007

Internal Factor Evaluation Matrix

Strengths Occupancy rates at Wynn Las Vegas at 96% in 2007 Occupancy rates at Wynn Macau at 88.8% in 2007 Net income rose 92% in the first 3 quarters of 2008 The senior executive teams has on average approximately 25 years of experience. Wynn Resorts, Limited has over $1 billion in its cash account Wynn Resorts, Limited owns one of only six gaming concessions in Macau
Weight Rating Raw Score

0.05 0.05 0.06 0.07 0.05 0.08

4 3 4 4 4 4

0.2 0.15 0.24 0.28 0.2 0.32

The only resort to receive the Mobil 5 Star Award

0.04

3
4 4 3

0.12
0.2 0.2 0.21

Wynn Macau and Wynn Las Vegas table winings per unit per day are 118% and 27% greater than the market average, respectively 0.05 Wynn Macau and Wynn Las Vegas slot winnings per unit per day are 132% and 45% greater than the market average, respectively 0.05 Wynn Resorts had 17% of the Market Share in Macau in the 3rd quarter of 2008 (8% greater than the fair share) 0.07

Internal Factor Evaluation Matrix (cont)

Weaknesses Has outstanding debts of $3.5 billion Only have 3 locations providing cash flow Stephen Wynn has the power to select the board of directors Wynn Resorts relies heavily on the long-term tenure of Stephen Wynn as CEO for company survival
Weight Rating Raw Score

0.04 0.05 0.04 0.06

2 1 2 1 2 1 2 2 2 2

0.08 0.05 0.08 0.06 0.06 0.05 0.08 0.1 0.08 0.06 2.82

42% of currently oustanding stock is owned by 2 owners: Mr. Wynn and Azure USA 0.03 The company has no published vision or mission statement Wynn Resorts, Limited has no resorts in Atlantic City, one of the highest revenue gaming areas in the world Shares of Wynn Resorts have fallen 66% since February 2008 The company has a Beta of 2.36 Occupancy rates dropped 4.2% in 2008 from 2007 Total 0.05 0.04 0.05 0.04 0.03 1

Competitive Profile Matrix--Wynn Resorts Limited Wynn Critical Success Factors Advertising Management Experience Customer Service Geographic Diversity Product Quality Market Share Price Competitiveness Property Ownership Breadth of Product Line Customer Mix Financial Position Total Weight Rating 0.085 0.1 0.15 0.085 0.15 0.08 0.075 0.09 0.085 0.05 0.05 1 2 4 4 1 4 2 1 3 3 2 4 Weighted Score 0.17 0.4 0.6 0.085 0.6 0.16 0.075 0.27 0.255 0.1 0.2 2.915 Las Vegas Sands Rating 1 3 3 4 3 3 2 2 1 3 1 Weighted Score 0.085 0.3 0.45 0.34 0.45 0.24 0.15 0.18 0.085 0.15 0.05 2.48 MGM Mirage Weighted Rating Score 3 2 2 3 2 4 3 4 2 4 3 0.255 0.2 0.3 0.255 0.3 0.32 0.225 0.36 0.17 0.2 0.15 2.735

Opportunities
60.4% of target market resides in areas where Wynn currently operates Atlantic City casino winnings are 390% greater than those in the state of Nevada Macau casino winnings up 46%, becoming the largest casino market in the world MGM Mirage facing possible bankruptcy due to possible default on debts Target market in China expected to increase to 180-200 million people over next 10 years Top competitor's merging create a wide pool of experienced executives India experienced 22.1% growth in individuals with $1 million or more in personal assets East coast U.S. casino and resort venues account for 40% of the top 5 casino market revenues Macau Chief Executive announced freeze on new gaming license to stabilize industry 63% of Americans believe gambling is morally acceptable Tourism to Macau increased by 23% between 2006-2007 States considering using the gaming industry to fund budget gaps

Threats
Macaun government has ability to nationalize all operations in the year 2017 Increase in legalization of casino gaming in or near metropolitan areas Average daily room rate dropped 7.7% in Las Vegas Vacancies are at a 20 year high in the U.S. hotel industry Occupancy rates in U.S. hotel industry dropped by 3.2% in 2008 Chinese governments reducing the amount of travel visas granted to Macau from 1/month to 1/3 months Las Vegas strip gaming revenue down 6.7% Airlines expected to decrease passenger capacities 10-15% in 2009 Profit margins expected to decrease 17-18% in 2009 Visitors to Las Vegas down 1.1% in 2008 Political legislation restricting gaming Construction costs for hotels are up 29% from August of 2007

External Factor Evaluation Matrix

Opportunities 60.4% of target market resides in areas where Wynn currently operates Atlantic City casino winnings are 390% greater than those in the state of Nevada Macau casino winnings up 46%, becoming the largest casino market in the world Weight Rating Raw Score 0.08 0.045 0.08 4 1 4 0.32 0.045 0.32

MGM Mirage facing possible bankruptcy due to possible default on debts Target market in China expected to increase to 180-200 million people over next 10 years
Top competitor's merging create a wide pool of experienced executives India experienced 22.1% growth in individuals with $1 million or more in personal assets East coast U.S. casino and resort venues account for 40% of the top 5 casino market revenues Macau Chief Executive announced freeze on new gaming licencse to stabilize industry

0.03
0.07 0.03 0.03 0.035 0.055

3
3 1 1 1 4

0.09
0.21 0.03 0.03 0.035 0.22

63% of Americans believe gambling is morally acceptable

Tourism to Macau increased by 23% between 2006-2007 States considering using the gaming industry to fund budget gaps

0.025
0.045 0.025

2
4 1

0.05
0.18 0.025

External Factor Evaluation Matrix (cont)

Threats Macaun government has ability to nationalize all operations in the year 2017 Increase in legalization of casino gaming in or near metropolitan areas Average daily room rate dropped 7.7% in Las Vegas Vacancies are at a 20 year high in the U.S. hotel industry Occupancy rates in U.S. hotel industry dropped by 3.2% in 2008 Weight Rating Raw Score 0.08 0.03 0.025 0.03 0.025 2 1 4 2 2 2 4 3 0.16 0.03 0.1 0.06 0.05 0.09 0.14 0.075

Chinese governments reducing the amount of travel visas granted to Macau from 1/month to 1/3 months 0.045 Las Vegas strip gaming revenue down 6.7% Airlines expected to decrease passenger capacities 10-15% in 2009 0.035 0.025

Profit margins expected to decrease 17-18% in 2009

Visitors to Las Vegas down 1.1% in 2008 Political legislation restricting gaming Construction costs for hotels are up 29% from August of 2007 Total

0.04
0.025 0.025 0.065 1

2
3 3 1

0.08
0.075 0.075 0.065 2.555

SWOT Matrix
SO Strategies ST Strategies

1) Decrease room rates in Macau by 10%. 1) Increase philanthropic giving in (S2, O11) Macau by 2%. (S3, T1)

2) Open 500 room VIP facility in Atlantic City. (S5, O2) 3) Develop a succession plan that capitalizes on available and experienced executives. (S4, O6) 4) Increase number of slot machines at Wynn Las Vegas and Macau by 10%. (S9, O10)

2) Lower room mates in Las Vegas by 10%. (S1, T3) 3) Host a celebrity poker tournament at Wynn Encore. (S7, O11) 4) Place AED Defibrillators at all locations. 1 per floor and 3 in each gaming area (S7, T5)

SWOT Matrix continued

WO Strategies 1) Develop a formalized succession plan in the event of a separation of Stephen Wynn and the company. (W4, O6) WT Strategies 1) Drop the room rates in the US by 10%. (W10,T3)

2) Pay off debts 5% annually for the next 3 years. 2) Open 500 room VIP facility in Atlantic (W1, O3) City. (W2, T7) 3) Increase the gaming space at Macau by 5%. (W10, O11) 3) Write a vision and mission statement that guides our company towards higher profitability. (W6, T 9) 4) Distribute $1000 resort stimulus package gaming voucher to our middle tier customers that live within driving distance of Wynn Las Vegas. (W10, T8)

4) Acquire the Borgata Resort and Casino in Atlantic City, NJ from MGM Mirage. (W7, O4)

SPACE Matrix Data

Financial Strength (FS) Return on Assets (ROA) Leverage Net Income Brand Name Inventory Turnover Financial Strength (FS) Average 4 3 4 6 Environmental Stability (ES) Rate of Inflation Technological Changes Price Elasticity of Demand Competitive Pressure Barriers to Entry into Market -4 -2 -5 -5

-4
-4.0

3.8 Environmental Stability (ES) Average

Competitive Advantage (CA) Market Share Product Quality Customer Loyalty Technological know-how Control over Suppliers and Distributors Competitive Advantage (CA) Average -2 -1 -2 -2 -3

Industry Strength (IS) Growth Potential Financial Stability Ease of Entry into Market Resource Utilization Profit Potential 5 3 3 5 6 4.4

-2.0 Industry Strength (IS) Average

SPACE Matrix
Conservative FS 6 5 4 3 2 1 CA IS Aggressive

-6

-5

-4

-3

-2

-1 -1 -2

X Plot 2.4

-3 -4 -5

Y Plot -0.2 Defensive

-6 ES Competitive

BCG Matrix Data

Division 1 2 3 4 Division Name Casinos Rooms Food and Beverage Entertainme nt, retail and other Less: Promotional Allowances Totals: Revenues $2,261,932 $326,655 $358,715 $270,065 % of Revenue 77% 10% 11% 9% Profits $771,005 $248,417 $151,434 $108,203 % of Profits 93% 8% 16% 7% RMSP IGR 0.6 0.33

0.16 0.11 0.2 0.13

0.17 0.18

-$230,043 $2,987,324

-7% 100%

-$230,043 $1,049,016

-25% 100%

0.28 0.19

RMSP
High 1.0
High +20

Medium .50

Low 0.0

Industry Growth Rate

1 2
(percentage)

3 5
Medium 0

Low - 20

IFE Matrix Data

Division 1 2 3 Division Name Casinos Rooms Food and Beverage Revenues $2,261,932 $326,655 $358,715 % of Revenue 77% 10% 11% Profits $771,005 $248,417 $151,434

% of EFE IFE Profits Scores Scores

93% 8% 16% 3 2.5 2.5 3.2 3 2.7

Entertainment, retail and other Less: Promotional Allowances

$270,065

9%

$108,203

7%

-$230,043

-7%

-$230,043

-25%

2.8

2.3

Totals:

$2,987,324

100%

$1,049,016

100%

Internal Factor Evaluation Matrix

Strong 3.0 to 4.0 3.00 4.00 High 3.0 to 4.0 I II Average 2.0 to 2.99 2.00 III Weak 1.0 to 1.99 1.00

EFE Total Weighted Scores

3.00 IV Medium 2.0 to 2.99 2.00 VII Low 1.0 to 1.99 1.00 2 1 3 V

VIII

VIII

IX

IFE Total Weighted Scores

Grand Strategy Matrix

Rapid Market Growth Quadrant II Quadrant I

Weak Competitive Position

Strong Competitive Position

Quadrant III Slow Market Growth

Quadrant IV

QSPM
Strengths 1 Occupancy rates at Wynn Las Vegas at 96% in 2007 2 Occupancy rates at Wynn Macau at 88.8% in 2007 3 Net income rose 92% in the first 3 quarters of 2008 4 The senior executive teams has on average approximately 25 years of experience. Wynn Resorts, Limited owns one of only six gaming concessions in Macau Weight 0.05 0.05 0.06 0.07 0.05 0.08 0.04 0.05 0.05 0.07

Strategy Strategy One Two Purchase Build new Atlantic City casino Casino from in Atlantic MGM City
AS TAS 0 0 0 3 2 0.21 0.1 0 2 0.08 0 0 0 AS TAS 0 0 0 4 0.28 3 0.15 0 4 0.16 0 0 0

5 Wynn Resorts, Limited has over $1 billion in its cash account 6

7 The only resort to receive the Mobil 5 Star Award Wynn Macau and Wynn Las Vegas table winings per unit per day are 118% and 27% greater than the market average, respectively Wynn Macau and Wynn Las Vegas slot winnings per unit per day 9 are 132% and 45% greater than the market average, respectively Wynn Resorts had 17% of the Market Share in Macau in the 3rd 10 quarter of 2008 (8% greater than the fair share) 8

QSPM Cont.
Weaknesses 1 Has outstanding debts of $3.5 billion
2 Only have 3 locations providing cash flow 3 Stephen Wynn has the power to select the board of directors Wynn Resorts relies heavily on the long-term tenure of Stephen Wynn as CEO for company survival 42% of currently oustanding stock is owned by 2 owners: Mr. 5 Wynn and Azure USA 4 6 The company has no published vision or mission statement 7 Wynn Resorts, Limited has no resorts in Atlantic City, one of the highest revenue gaming areas in the world

Weight AS
0.04 0.05 0.04 0.06 0.03 0.05

TAS
3 0.12 4 0.2 0 0 0 0

AS

TAS
2 0.08 3 0.15 0 0 0 0

0.04
0.05 0.04 0.03 1

4 0.16
0 0 3 0.09

3 0.12
0 0 2 0.06

8 Shares of Wynn Resorts have fallen 66% since February 2008

9 The company has a Beta of 2.36 10 Occupancy rates dropped 4.2% in 2008 from 2007

QSPM Cont.
Opportunities Weight AS TAS AS TAS 60.4% of target market resides in areas where Wynn currently 1 operates 0.08 4 0.32 3 0.24 Atlantic City casino winnings are 390% greater than those in the 0.13 2 state of Nevada 0.045 4 0.18 3 5 Macau casino winnings up 46%, becoming the largest casino market 3 in the world 0.08 0 0 MGM Mirage facing possible bankruptcy due to possible default on 4 debts 0.03 4 0.12 1 0.03 Target market in China expected to increase to 180-200 million 5 people over next 10 years 0.07 0 0 Top competitor's merging create a wide pool of experienced 6 executives 0.03 0 0 India experienced 22.1% growth in individuals with $1 million or 7 more in personal assets 0.03 0 0 East coast U.S. casino and resort veneus account for 40% of the top 8 5 casino market revenues 0.035 3 0.105 2 0.07 Macau Chief Executive announced freeze on new gaming licencse to 9 stabilize industry 0.055 0 0 10 63% of Americans believe gambling is morally acceptable 0.025 0 0 11 Tourism to Macau increased by 23% between 2006-2007 0.045 0 0 12 States considering using the gaming industry to fund budget gaps 0.025 0 0

QSPM Cont.
Threats 1 Macaun government has ability to nationalize all operations in the year 2017 2 Increase in legalization of casino gaming in or near metropolitan areas 3 Average daily room rate dropped 7.7% in Las Vegas 4 Vacancies are at a 20 year high in the U.S. hotel industry 5 Occupancy rates in U.S. hotel industry dropped by 3.2% in 2008 6 Weight 0.08 0.03 0.025 0.03 0.025 0.045 0.035 0.025 0.04 0.025 0.025 0.065 1 4 2 2 AS TAS 0 0 0 0.06 0.05 0 0 3 0.075 2 2 0.08 0.05 0 0.26 2.26 AS TAS 0 0 0 1 0.03 1 0.025 0 0 2 0.05 1 0.04 1 0.025 0 1 0.065 1.71

Chinese governments reducing the amount of travel visas granted to Macau from 1/month to 1/3 months

7 Las Vegas strip gaming revenue down 6.7% 8 Airlines expected to decrease passenger capacites 10-15% in 2009 9 Profit margins expected to decrease 17-18% in 2009 10 Visitors to Las Vegas down 1.1% in 2008

11 Political legislation restricting gaming

12 Construction costs for hotels are up 29% from August of 2007 TOTALS

Recommendations
Place AED Defibrillators at all locations. 1 per floor and 3 in each gaming area. Develop a formalized succession plan in the event of separation of Stephen Wynn from the company. Drop room rates in the US and Macau by 10%. Increase philanthropic giving in Macau by 2%. Purchase 4 ferry boats to run from the Chinese shore to Macau. Distribute $1000 "resort stimulus package" casino gaming vouchers to middle tier customers within driving distance of Wynn Las Vegas. Acquire Borgata Resort and Casino in Atlantic City, NJ from MGM Mirage Increase gaming space at Wynn Macau by 5% Host a celebrity poker tournament at Wynn Encore. Pay off debts 5% annually for the next 3 years.
$400,000 $700,000 $32,600,000 $36,919,500 $4,000,000 $2,500,000 $425,000,000 $5,000,000 $750,000 $175,000,000 $682,869,500

Total Cost

Timeline for Strategy Implementation

Place AED Defibrillators at all locations. 1 per floor and 3 in each gaming area.
Develop a formalized succession plan in the event of separation of Stephen Wynn from the company. Drop room rates in the US and Macau by 10%. Increase philanthropic giving in Macau by 2%. Purchase 4 ferry boats to run from the Chinese shore to Macau. Distribute $1000 "resort stimulus package" casino gaming vouchers to middle tier customers within driving distance of Wynn Las Vegas. Acquire Borgata Resort and Casino in Atlantic City, NJ from MGM Mirage Increase gaming space at Wynn Macau by 5%
2009
2009 2009 2009-2011 2010 2009 2010 2011 2009-2011 2009-2011

Host a celebrity poker tournament at Wynn Encore.

Pay off debts 5% annually for the next 3 years.

EPS/EBIT Analysis
Common Stock Financing EBIT Interest EBT Taxes EAT # Shares EPS Recession 300,000,000 0 300,000,000 120,000,000 180,000,000 150,812,443 1.19 Normal 450,000,000 0 450,000,000 180,000,000 270,000,000 150,812,443 1.79 Boom 600,000,000 0 600,000,000 240,000,000 360,000,000 150,812,443 2.39 Recession 300,000,000 34,143,475 265,856,525 106,342,610 159,513,915 112,013,040 1.42 Debt Financing Normal 450,000,000 34,143,475 415,856,525 166,342,610 249,513,915 112,013,040 2.23 Boom 600,000,000 34,143,475 565,856,525 226,342,610 339,513,915 112,013,040 3.03

EBIT Interest EBT Taxes EAT # Shares EPS

Recession 300,000,000 10,243,043 289,756,958 115,902,783 173,854,175 139,172,622 1.25

70 Percent Stock 30 Percent Debt Normal 450,000,000 10,243,043 439,756,958 175,902,783 263,854,175 139,172,622 1.90

Boom 600,000,000 10,243,043 589,756,958 235,902,783 353,854,175 139,172,622 2.54

Recession 300,000,000 23,900,433 276,099,568 110,439,827 165,659,741 123,652,861 1.34

70 Percent Debt 30 Percent Stock Normal 450,000,000 23,900,433 426,099,568 170,439,827 255,659,741 123,652,861 2.07

Boom 600,000,000 23,900,433 576,099,568 230,439,827 345,659,741 123,652,861 2.80

Projected Financial Statements

Wynn Resorts Projected Income Statement (FY 2008-2011) in Thousands 2008 Operating Revenues: Casino Rooms Food and Beverage Entertainment, retail and other Gross revenues Less: Promotional Allowances Net Revenues Operating Costs and Expenses: Casino Rooms Food and Beverage Entertainment, retail and other General & Administrative Provision for Doubtful Accounts Pre-opening costs Depreciation and Amortization Contract Termination Fee Property Charges and Other Total Operating Costs and Expenses Equity in income from unconsilidated affiliates Operating Income Other Income (Expense) Interest Income Interest Expense Distribution to convertible debenture holders Increase (decrease) in swap fair value Gain on sale of subconcession right, net Gain (loss) from extinguishment of debt Other Other Income (expense) net Income before income taxes Benefit (provision) for income taxes Net Income 2,261,932 326,655 358,715 270,065 3,217,367 (230,043) 2,987,324 2009 2,533,364 349,521 369,476 282,893 3,535,254 (257,648) 3,277,606 2010 3,420,041 454,377 461,846 339,472 4,675,736 (309,178) 4,366,558 2011 4,104,049 536,165 508,030 383,603 5,531,848 (352,463) 5,179,385 Increase due to opening of two new locations and recommendations.

1,490,927 78,238 207,281 161,862 319,303 49,405 72,375 262,848 32,584 2,674,823 1,353 313,854 21,517 (172,693) (31,485) 22,347 (4,257) (164,571) 149,283 60,923 210,206

1,669,838 83,714 213,498 169,549 350,330 54,081 36,188 288,390 35,726 2,901,313 1,484 377,777 22,593 (180,493) 58,333 (99,567) 278,210 (967) 277,243

2,254,282 108,828 266,873 203,459 466,724 72,048 72,375 384,205 47,595 3,876,388 1,978 492,147 23,722 (252,387) 58,333 (170,332) 321,815 (1,287) 320,528

2,705,138 128,417 293,560 229,909 553,604 85,460 455,724 56,455 4,508,266 Calculated as a % of Net Revenues. 2,346 673,465 24,909 (299,368) 70% of the total recommendation cost @ 5% IR over 3 years. 58,333 (216,127) 457,338 (1,829) Small tax amount due to interest expenses from debts. 455,509

Wynn Resorts, Limited Balance Sheet (FY 2008-2011) in Thousands (except per share amounts)
ASSETS Current assets: Cash and cash equivalents Receivables, net Inventories Deferred income taxes Prepaid expenses and other Total current assets Restricted cash Property and equipment, net Intangibles, net Deferred financing costs Deposits and other assets Investment in unconsolidated affiliates Total assets 2008 $ 1,133,904 $ 125,196 $ 120,944 $ 31,047 $ 1,411,091 $ 5,105,473 $ 49,049 $ 65,877 $ 106,429 $ 4,696 $ 6,742,615 2009 $ 1,159,202 $ 140,220 $ 124,572 $ 34,152 $ 1,458,146 $ 5,537,373 $ 49,282 $ 62,583 $ 138,358 $ 4,931 $ 7,250,672 2010 $ 1,330,394 $ 157,046 $ 128,309 $ 37,567 $ 1,653,316 $ 5,814,242 $ 49,515 $ 59,454 $ 179,865 $ 5,177 $ 7,761,569 2011 $ 1,670,241 Increase in cash attributed to new facilities and operation expansion $ 175,891 $ 132,159 $ 41,324 $ 2,019,615 $ 6,104,954 Increase due to Atlantic City acquisition and Encore Macau Opening $ 49,748 $ 56,481 $ 233,825 $ 5,436 $ 8,470,058

LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities: Accounts and construction payable Current portion of long-term debt Current portion of land concession obligation Income taxes payable Accrued interest Accrued compensation and benefits Gaming taxes payable Other accrued expenses Customer deposits and other liabilities Construction retention Deferred income taxes Total current liabilities Long-term debt Other long-term liabilities Long-term land concession obligation Deferred income taxes Construction retention Total liabilities Stockholders equity: Preferred stock, par value $0.01; 40,000,000 shares authorized; zero shares issued and outstanding Common stock, par value $0.01; 400,000,000 shares authorized; 124,817,994 and 116,259,411 shares issued; 112,013,040 and 114,370,090 shares outstanding Treasury stock, at cost; 12,804,954 and 1,889,321 shares Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings (deficit) Total stockholders equity Total liabilities and stockholders equity

$ $ $ $ $ $ $ $ $ $ $

232,136 2,685 6,068 1,283 21,485 85,803 66,954 15,820 209,906 78,599 3,036

$ $ $

$ $ $ $ $

266,956 2,670 6,068 967 22,559 83,229 76,001 17,402 230,897 82,529 -

$ $ $

$ $ $ $ $

307,000 2,765 6,068 1,287 23,687 80,732 102,601 19,142 253,986 16,755 -

$ $ $

$ $ $ $ $

353,050 Increase due to construction and renovation in Atlantic City and Macau 2,860 6,068 1,829 Carried over from income statement 24,872 78,310 123,121 21,056 279,385 10,500 -

$ 723,775 $ 4,290,424 $ 124,511 $ 4,433 $ 6,950 $ 5,150,093

$ 789,278 $ 4,449,424 $ 130,737 $ $ 4,433 $ 6,950 $ 5,380,821

$ 814,024 $ 4,608,424 $ 137,273 $ $ 4,433 $ 6,950 $ 5,571,104

$ 901,052 $ 4,767,424 Increase in long term debt b/c of 70% debt financing, $ 144,137 however, 5% being paid off annually, as noted in recommendations $ $ 4,433 $ 6,950 $ 5,823,996 Liability increase due to an increase in long term debt

1,248

1,334

1,420

1,508 Increase by 30% over 3 years b/c of stock financing

$(1,119,407) $(1,119,407) $ (1,119,407) $ (1,119,407) Continue purchases of Treasury Stock at same rates $ 2,640,667 $ 2,614 $ 67,400 $ 2,640,667 $ 2,614 $ 344,643 $ 2,640,667 $ 2,614 $ 665,171 $ 2,640,667 $ 2,614 $ 1,120,680 $ 2,646,062 $ 8,470,058

$ 1,592,522 $ 6,742,615

$ 1,869,851 $ 7,250,672

$ 2,190,465 $ 7,761,569

Projected Financial Ratios

Ratio Quick Ratio Current Ratio
Ratio Quick Ratio Current Ratio 2009 1.69 1.85 2.38 2.88 0.08 0.04 0.15 0.45 2.08

2009 1.69
1.87 2010 2011 2.09 2.24 1.80 2.20 0.09 0.05 0.17 0.61 3.02

2010 1.87 2.03 2.10 2.54 0.07 0.04 0.15 0.56 2.26

2011 2.09 2.24 1.80 2.20 0.09 0.05 0.17 0.61 3.02

1.85 2.03
2.10 2.38

Long Term Long Term Debt to Equity Debt to Equity

Total Debt to Equity Net Profit Margin Return on Assets Return on Equity

Total Debt to Equity Net Profit Margin Return on Assets Return on Equity Total Asset Turnover Earnings Per Share

2.88
0.07

2.54

0.08 0.04
0.15 0.04

0.15
2.26

0.56

Total Asset Turnover Earnings Per Share

0.45 2.08