拉斯維加斯金沙集團 (LVS) 2006 Q2 法說會逐字稿

Good day everyone, and welcome to the Second Quarter 2006 Las Vegas Sands Corporation Earnings Conference Call.

My name is Shanique, and I will be your coordinate for today. [OPERATOR INSTRUCTIONS] I would now like to turn the presentation over to your host for today's call, Mr. Bill Weidner.

Please proceed.

Thank you and good afternoon everyone, and thank you all for joining us today, we appreciate your attendance.

We have a lot to talk about and again, we appreciate your joining us today.

With me today are Mr. Sheldon Adelson, our Chairman, Brad Stone, Executive Vice President, Rob Goldstein, Vice President of the Venetian here in Las Vegas, Scott Henry, our Senior Vice President, and Bob Rosak, our Chief Financial Officer.

Before we begin, I need to remind you that today's conference call contains forward-looking statements that we are making under the Safe Harbor provisions of the Federal Securities Laws.

I would also like to caution you that the Company's actual results could differ materially from the anticipated results in those forward-looking statements.

Please see today's press release under the caption Forward-Looking Statements for the discussion of the risks that may affect your results.

In addition we may discuss adjusted EBITDA, adjusted net income, adjusted EPS and adjusted property EBIDAR which are non-GAAP measures.

A definition and a reconciliation these measures to the most comparable GAAP financial measure is included in the press release and please note that this presentation is being recorded.

By now you should have received our press release detailing our financial results.

Before we address those results in greater detail I wanted to spend a few moments in two developments in the quarter that will be very important to the Company in the years ahead.

The first of them that I wanted to highlight the situation we see playing out in the marketplace in Macao.

Those of you who have followed the Company for statement may remember that as we opened the Sands Macao in 2004, the conventional wisdom of the day about the Macao marketplace was that a foreign operator could not successful there.

The incumbent Stanley Ho was too strong, he owned the ferries, dominated the VIP market, which we really couldn't compete in.

And with a clean well-lit casino, with friendly, customer-oriented staff, was bound to fail.

After all, Macao customers prefer low ceiling, smoking casinos.

So the product we envisioned would overshoot the market and intimidate the customer.

I would like to point out during the quarter we completed our second anniversary of the opening of the Sands, which over the life of the property has made over $700 million of EBITDA including a record $117 million this quarter.

You can't blame the observers of the market of 2004, as they had never seen a product like the Sands.

But I think it's fair to say that those widely held opinions, the conventional wisdom of that day, have now been laid to rest.

Let's now turn the clock forward to today's Macao, take a look at that conventional wisdom of today.

The success of the Sands has clearly changed many wildly held perceptions in the marketplace, in particular the value and the explosive growth of the mass market.

Market capacity, particularly pertaining to mass play, is now increasing at double digit rates and is expected to do so for some time.

While it's clear that those capacity increases will drive win per unit per table down for the market in total, we have long held the view that all capacity is not created equal.

We based our development plan on the view that the highest quality products in the marketplace will not only win market share from inferior product, but will also serve to expand the market to a new set of customers, a set of customers who either do not visit Macao at all today, or only visit infrequently.

The trends in our business today clearly support that view.

While table capacity in the Macao marketplace has increased 59% over last year, and the win per table per day as dropped 28% for the Macao market in total, our win per table per day at the Sands has actually increased over last year, despite the expansion of our table capacity at the Sands by almost 30%.

While slot capacity in the Macao market has increased 67% with market-wide win per unit per day decreasing by about 8%, our slot win per day at the Sands has increased 32% during that same time frame, despite 9% increase in slot capacity.

Conventional wisdom today also opines that Macao is a local's market, more like Atlantic City than Las Vegas.

Today's Macao observers have never seen a destination product in Macao because there isn't one, just as they had never seen a high quality gaming product aimed at the mass market when we opened any Sands in 2004.

The fact is Macao is both a locals market like Atlantic City, and a destination market like Las Vegas, only on steroids, three times the number of locals, six times the number of potential visitors within a five-hour flight time.

One can't blame the current Macao observer's conventional wisdom today, since they have never seen a Las Vegas-style destination product before, keep in mind that in 2004 we introduced a never seen before mass market product to the Macao market.

In 2007 we'll introduce a mega destination product at Macao market.

What they didn't see in 2004, they don't appear to see again today.

Even though right next door in Hong Kong, mainlanders are staying overnight shopping, dining and attending trade shows and conventions by the millions.

We remain unwaivering in our fundamental strategy, build the heart of the Las Vegas strip with multi-branded destination resorts, connected by air-conditioned walk-over bridges, mirroring the world's most successful destination, Las Vegas, on the doorstep of China.

So in Macao overall, we're feeling pretty good about both our strategy to target the market with the new kind of product, and our ability to take more than our fair share of both market that exist today and the incremental growth in the market in the years ahead.

Our momentum today bodes well for our near term future as we prepare to increase the capacity at the Sands by 30% next month and looking further ahead to about a year from today as we prepare to open the Venetian Macao, Macao's first true Las Vegas style mega-casino integrated resort.

Longer term the Cotai Strip will take its place as Asia an premier convention, vacation, and leisure destination.

So that's Macao.

The other big picture development I wanted to touch upon was our victory in Singapore.

We view the opportunity in Singapore as incredibly compelling for at least three important reasons.

First the projected economic growth in South Asia is predicted to be robust in the coming decades, as in this the case with an emerging China with GDP growth rate of 11% so far this year, driving and expanding North Asian economy, that growing Chinese economic engine, along with that of India, will bode well for the economies of South Asia.

The verging economies have already driven Singapore's 32,000 hotel room inventory to an 86% occupancy this year with average daily room rates increasing about 16%.

Second as we move deeper into what some economists have termed the Asia Century, we will look to use our huge footprint in Macao in North Asia, in concert with our complementary footprint in Singapore in South Asia, to build unrivaled relationship with international meeting organizers, junket and high rolling sales agents, tour groups organizers from China, India, Japan, Korea, Malaysia, and the remainder of the region and with international retail brands.

We will then use these relationships to bring real value to the jurisdictions in which we operate.

And third, the validation and the strengthening of our status as the world's number one convention based, integrated resort developer, will give us a real advantage as we seek to expand our integrated convention based resort business model in other jurisdictions in the world.

So the Singapore takeaway we believe is that success breeds success, and we feel we are uniquely positioned to capitalize on that success in the years ahead.

Turning to our operating highlights for the quarter.

Second quarter adjusted EBITDA for the Sands Macao came in at all all time record of 116.9 million, that's an crease of over 24% versus second quarter of '05.

Second quarter net revenues-- excuse me-- 44%.

Second quarter net revenues for the Company in total came in at 517 million, that's an increase of 30% over the second quarter of 2005.

Second quarter occupancy at the Venetian was a second quarter record of 99.5%.

Second quarter RevPAR was also a second quarter record of $241, up 5.7%.

Second quarter adjusted EBIDAR came in at 180 million, that's a 19% increase over second quarter of 2005.

We added depth to our management ranks as we execute our worldwide growth plans, including significantly expanding our development group in Asia and adding two world class senior executives to our management team.

We advanced on a number of target capital improvements at up operations both in Las Vegas and Macao, strengthening our long term strategic position.

We made significant progress in execution of the development of the Cotai Strip in Macao, which I'll talk about in greater detail a little later.

We completed a $2.5 billion credit facility, the largest of its kind ever in Asia, to fund our development plans on the Cotai Strip.

And finally we have continued our ongoing efforts to secure additional opportunities to supplement our growth pipeline around the globe.

Turning now to our detailed quarterly results, our second quarter of 2006 reflected a solid top line growth at both our Las Vegas and Macao properties.

In Las Vegas revenue,s were stronger overall as our convention based strategy drove revenue increases in our hotel, convention, and food and beverages businesses.

Casino revenues were down modestly compared to a year ago.

Table games volume was up slightly over the same quarter last, while hold came in at below our expected range at 17.6% and below last year's second quarter hold of 18.6%, our expected range for hold is between 20 and 22%.

Las Vegas EBIDAR came in at just over 63 million.

The recent expansion of our meeting facilities continues to provide us, excuse me, with greater capacity to book group business.

Increased group business lead the way to delivering a second quarter RevPAR increase of 5.7%, driven by an all time second quarter high occupancy rate of 99.5 and [INAUDIBLE] also increased to $242.

And if catering revenues are added to room revenues and divided by available rooms, the rooms and catering RevPAR grew from $271 second quarter of '05, to another record quarter $298 in second quarter of '06, an increase of about 10%.

The results highlight the sustained competitive advantage of our convention based business model and bodes well both for our ability to foster continued same-store RevPAR growth for the remainder of 2006 and in the years ahead.

And of course, the opening of the Palazzo in the third quarter of 2007 will allow an expansion and extension of that strategy to significant larger asset base.

While we successful increased the top line, our operating expenses were higher in the quarter as we bought on this new business.

While we anticipated some expense increases in the start-up phase, as we opened up new areas and expanded our offerings, a declining hold percentage coupled with overhead cost increases and greater than expected start-up inefficiencies in operating and marketing these new areas clearly impacted our results.

Expense increases year over year occurred principally in two categories.

First, our employer related overhead costs increased in the quarter.

Part of this increase related to an escalation in healthcare costs in general, while another portion related to a spike in unusual high dollar cases for which we were self-insured.

The recognition of on-cash stock compensation expense, which was not recognized in the second quarter last year, also contributed.

Second, we increased our head count by about 400 FTE's.

The head count increase is part of our strategy to broaden our product offering and invest in the property to enhance it's long-term competitiveness and profitability.

These additions include employees who are services our new 450,000 square foot meeting space, our new poker product offering, our expanded [Paiza] Club aimed at play and auxiliary support staff for our new entertainment offerings, Blue Man, Tao, and Phantom of the Opera.

As you can imagine management has been ripping those numbers apart, refocusing marketing efforts, challenging our initial assumptions relating to those investments, and reaching for additional operating efficiencies.

In future quarters we expect to increase revenues from these enhancements, and prove upon creating the proper mix of business to optimize profitability for more efficient optimized profitability, become more efficient at operating the product enhancements, and of course to a table hold percentage to return to expected levels.

Obviously improved top line, like kissing your sister, gets you nowhere.

We're focused on improving bottom line.

As we move toward the opening of Palazzo in 2007, we continue our strategy of strengthening and remerchandising the Venetian, construction continues on a third theater, adding 800 more entertainment seats to our offering, the theater is expected to open this fall with a show by the celebrated comedian and entertainer Gordy Brown.

This theater will have the capacity to double as broadcast venue for television -- for televised broadcast of poker tournaments.

Mario Batali, the award winning chef will open two new restaurants at the Venetian this year.

The restaurants will be modeled on his highly successful New York creations, Babbo and Lupa.

Phase 2 of our [INAUDIBLE] renovations now complete and our new Tao beach area will premier in spring of '07.

In terms of our room product we'll be renovating all of our all suite rooms in the Venetian Tower.

The renovation process will begin before the end of this year, and we'll update, improve, and contemporize our Venetian rooms while minimizing disruption to our business.

Construction of the Palazzo all suites resort remains on schedule for third quarter 2007 opening.

Our retail leasing activity in the Palazzo Mall continues to go well with 25 tenants now in lease, including Barnes, New York who will anchor the mall at the Palazzo.

These tenants represent approximately 60% of the retail space available at the shops at the Palazzo.

We anticipate the remainder of the space will be fully leased by spring 2007.

Turning now to our performance activity and activities in Asia, the Sands Macao turned in another record quarter, generating an all time high adjusted EBITDA of 117 million, up over 44% from the quarter one year ago.

We remain particularly pleased with the momentum in our mass casino business.

As I mentioned at think beginning of my clients our win per table per day, and win per machine per day have increased compared to the quarter one year ago.

Despite capacity increases in both the marketplace and at the Sands itself.

Mass table drop was 11.4 million per day in the quarter, that's up 20% from the 9.5 million per day in the second quarter of 2005.

Slot handle grew 57%, reaching 263 million, and producing a win per unit per day of $247 across all 895 units.

As I mentioned in my introductory comments, our win per table per day and slot per unit per day growth, despite large increases in capacity, support our belief by following our strategy we'll continue to see growth in both our mass table and slot businesses over the long term, despite the addition of new capacity in the marketplace.

On the VIP market side, rolling volume came in at a record 4.3 billion in the second, compared to 2 billion in the second quarter of '05.

We recently expanded our Paiza Club, which added 16 VIP tables in incremental capacities of 30%, to accommodate the needs of additional junket reps and sales agents.

We continue to bring additional VIP players to our high-end network and we'll continue to focus our Paiza marketing activities in Asia to directly support Macao and indirectly support Las Vegas.

Our strategy for growth and expansion in Macao remains clear.

The Sands Macao, the balance of our podium expansion, which will add over 250 mass tables and nearly 300 slot machines to our current capacity, remains on track to open later this month.

Upon completion of the expansion, we will expect to have a total capacity of over 700 tables, and over 1200 slot machines, over three times the initial capacity of the Wynn resort opening in September.

Capacity to meet the increasing importance of the mass market, which we believe will provide the lion's share of Macao's market growth in the years ahead.

Construction of The Venetian Macao, which will anchor the Cotai Strip, remains on schedule for a summer 2007 opening, and we have now topped off the building.

And on the remainder of the Cotai Strip, we're continuing to make significant progress in all aspects of development.

We've now reached agreement with Fairmont Holdings, Raffles International who have signed on to operate their brand on Site 8, the final site available in Phase 1 of our Cotai Strip development.

Along with Fairmont and Raffles brands we have entered into non-binding letters of intent with Four Seasons, Hilton, Conrad, Starwood, Sheridan, and St. Regis brands and expect to sign definitive agreements shortly.

We've already signed definitive agreements with Shangri-la, covering their Shangri-la and Traders brands.

With respect to construction, we have began construction on each of sites 2, 5, and 6, in addition, obviously to the Venetian Macao.

Additionally, we're now on the ground on both sites 7 and 8 and have received government approval to begin soils testing work on those sites.

We continue with design and planning activities on site 3.

We expect all of these developments to be completed by the end of 2008.

On the retail side we continue to make steady progress on leasing the malls on the Cotai Strip.

At our last update, a little over one month ago, we announced we had reached commercial terms with more than 200 premium retailers who combined will bring 250 branded stores to the Company's malls.

Today six weeks later I am pleased to report we have reached commercial terms with more than 315 retailers for 699,000 square feet of retail space.

That represents nearly 60% of the approximately 1.2 million square feet of available space at our Grand Canal shops and the adjoining mall at the Four Seasons in Macao.

Moving ahead with the definitive leasing document, we have now executed the first handful of them fully, and have signed leases in place.

We remain pleased with the enthusiasm our retail customers -- of the retail customers on the Cotai Strip, a number of whom have expressed interest in leasing additional space from us in the malls we plan to construct in conjunction with the remainder of the Strip.

The additional Cotai develop will add another 2 million square feet of retail place overall.

As we've related in earlier discussions of our mall leasing activities in Macao, we believe that steadily increasing sales per square foot reported by retailers of Hong Kong shopping malls, fueled largely by mainland Chinese visitors drawn by the approximate 30% tax advantage of purchasing luxury goods in China in the special administrative region of Hong Kong and in Macao, continues to validate our strategy of developing valuable non-core assets to both attract patrons to our properties and maximize returns on investment.

In addition, we're following closely the political debate taking place in Hong Kong, that would impose a goods and services tax on retail goods there, which if enacted would give Macao based retails an advantage over Hong Kong based retailers.

We certainly know that Hong Kong visitation has increased 11% this year, with mainland visitation up about 14%..

Year to date Hong Kong hotels ran 86% occupancy, with an [ADR] increase of 16.2% to an average daily rate across all Hong Kong hotels of $132, and this all occurring despite a 3.7% addition to room inventory.

As side note, relationships developed by [Earnhouse] Leasing Team have already borne fruit in our preliminary leasing activities in Singapore, where we have received expressions of interest from our tenants in the Grand Canal shot by the dozens.

Turning to the development of the Macao convention business, we are pleased to share we continue to make notable progress.

We have now signed binding contracts with ten-multi-year trade shows, representing more than 26 separate events, to host there at The Venetian Macao on the Cotai Strip beginning in September of 2007.

Again, our relationships with convention planners in Las Vegas and Macao give us a leg up on our pre-marketing activities from the 1.2 million square feet of convention space at our Singapore integrated resort.

Turning to entertainment offerings on the Cotai Strip, we advanced our plans with Cirque de Soleil to provide them a permanent home, their first in Asia at our Cirque de Soleil theater at The Venetian Macao on the Cotai Strip, and we continue to pursue other world-class entertainment talent to appeal specifically to our mainland Chinese, Hong Kong, and Pan-Asian customers in Macao.

We're making great progress with our Henjqin Island development.

For those of you are are familiar with Las Vegas, think of the Las Vegas Strip's complementary relationship with suburbs like Summerlin and Henderson.

The amenities there, particularly golf, support recreational visitation to Las Vegas, and are in themselves real estate value generators.

We think of the Cotai Strip and Henjqin Island in the same way both with the added value of the second home, vacation home market and incremental visits to the Cotai industry from buyers of those second homes.

Add boaters, tennis players, convention delegates to the golfers, and you have a complementary mix of non-core asset real estate value and ongoing visitor volume from second home visits, as well as enhanced visitors amenity, to making the combined destination a more compelling offer.

So there we are.

The authority -- so where are we?

The authority to execute the master plan for Henjqin Island has now been granted to [Quandong] Products.

That's happened just in the past few days.

Quandong's plan for all of Henjqin Island, of which our proposed plans are a component, will be agreed shortly.

The process is taking place through a committee that includes participation from the central government.

We are in dialogue with the committee and, as comments or questions on our portion of the proposal are received from that committee, we are responding and helpful to them in the process.

We expect the Quandong master plan for Henjqin Island will be decided by the end of this year.

In fact, the Macao Daily News reported this week that the Quandong development and reform commission is attempting to get approval from the central government within the second half of this year regarding the formation of their Henjqin Economic Cooperation government and to start construction by the end of the year.

Much remains to be finalized as a result -- as relates to things like planning issues, construction permits, construction negotiation and contract negotiations and so forth, and policy approvals like border crossing issues offshore currency trading preferred taxations and so forth, remain in the hands of the Beijing authorities.

So we remain enthused about the level of interest we're finding In terms of brand and amenities and partnership interest, as well as government support.

Being encouraged by the progress we are making we have recently begun planning on a complimentary destination, which will enhance our Henjqin Island development plans.

This development [Xangxan] Island will offer water sports oriented resort amenities in the crystal clear waters of the south China sea, only about an hour high-speed carrier ride away from the marina on Henjqin Island.

Xangxan provides an idyllic setting of white sand beaches, clear waters, and a natural marine anchorage.

Henjqin and Xangxan developments continue to be subject to receipt of necessary government approvals, also but are very complementary to one another and very favored by the governments themselves.

As most of you know we closed in June on a $2.5 billion senior secured credit facility to fund our near term growth plans in Macao.

This facility will be used for the completion of the Sands expansion, The Venetian Macao, and the Four Seasons as well as a portion of the construction on sites 5 and 6 as well as sites 3, 7, and 8.

In terms of other development activities worldwide, we are continuing to pursue many promising opportunities.

Expect to hear more from us in regard to those activities in their future.

On the domestic front, we filed our application with the State of Pennsylvania for proposed development of the Bethlehem Steelworks, and downtown Bethlehem, Pennsylvania.

We have been scheduled to present to the Pennsylvania regulators on November 6th.

We remain enthused about the potential of this site, just a 90 minute drive from New York City and less that an hour's drive this the affluent northern New Jersey suburbs of New York.

We expect a decision on this project by the end of this the year.

As I mentioned earlier we added two world class senior executives to our team since our last call.

Kevin Kelly, most recently President and Chief Operating Officer for Hard Rock Hotel and Casino, has joined the operating team.

And Bob Rosak, a former audit and assurance partner at Price Waterhouse Cooper, and more recently Senior Finance Executive of Eastman Kodak Company, has joined the Company as our Chief Financial Officer and Principal Accounting Officer.

They join Mark Brown, formerly the President of the Trump Organization, and Michael Schindler, formerly a senior development executive for the Hyatt organization, each of whom joined us last quarter.

We also added key personnel in our Asia development group as we expanded the scope of their activities to include Singapore.

Expect us to continue to deepen our bench strength with high caliber management talent as we pursue as our growth plans around the globe.

Before we turn to the Q&A, let me say that it is gratifying to see our strategic vision being realized with our performance in Macao, as well as the recognition of our place in the market as I demonstrated by the Singapore win.

And while our current performance in quarter in Las Vegas did not meet our expectation, we remain confident that successful execution of our plans will produce long-term results and industry-wide leading returns.

While the trajectory of our growth was certainly not without an interruption or two, steady delivered execution of our plans, in Macao, in Las Vegas and now this Singapore remains our primary focus.

That's what brought us to where we are today and that's what will take us to higher levels of performance in the future.

And now with that, I'll ask the operator to begin our Q&A session.

[OPERATOR INSTRUCTIONS] Our first question comes from any line of Felicia Hendrix with Lehman Brothers.

Please proceed.

Hello.

Couple of questions for you guys.

First, Bill I was wondering if you could quantify the dollar impact of the low hold in Las Vegas for us.

I think Brad has-- has that statistic.

Okay, Brad.

If you look at a normalized hold of 21%, I think if you look at our last two years of operation, we've actually exceeded that.

There's affect in revenue of about 8.6 million and assuming about a 60% margin, because it probably would have been at the higher end of our customer base, it probably affected EBITDA to tune of just over 5 million-- about $5.2 million.

Okay.

As we, you know, kind of model going forward, always obviously, assuming a normalized hold, with the expense levels that you talked about, the higher expense levels, which you are clearly using to drive growth there, what kind of margin level-- or when does-- when do you expect it to kind of even it out back to normalized levels.

The margin, that is.

I think I'll answer that question as well.

As Bill pointed out in this presentation we added a lot of product.

We're kind of feeling our way through that product.

A good example, a couple of recent good examples is the poker room.

We opened the poker room, we actually lost some money on that in the second quarter as we-- as we ramped that up, July, for example, we see it becoming profitable.

And-- and reasonably profitable as we-- we get comfortable with that business, we grow the recognition that we have poker and we get efficient in our operations.

We run into a similar condition with the-- the 450,000 square feet of meeting space we expanded.

We're feeling our way through that.

We found, quite frankly, that while we've increased revenue in the catering side, that the space we added is frankly not real efficient for us in the sense that we opened it prior to the infrastructure which is supported by the Palazzo.

In other words the 80,000 square foot ballroom we have up on the fourth floor of that space doesn't have a kitchen, for example.

That kitchen, is you know, behind us about a year as we continue to develop and build the Palazzo resort.

So in the meantime it becomes extremely -- relatively expensive and we've seen some impact on our margins.

On the short-term we'll be more careful about what kind events we book in that incremental space to improve our margins in the short term, but again, that's something once the infrastructure is in place and our cost of operating what is currently somewhat inefficient space, that should improve our margins.

Certainly as we open our showrooms, you know, the Blue Man Group opened several months before this quarter started, and obviously Phantom we opened in mid-June.

We've borne in some expenses there without necessarily the benefit of the revenues, and we have had some inefficiencies in both of those theaters.

We see Blue Man starting to ramp up nicely.

We have tremendous hopes based on the reviews and feedback on the Phantom Theater but that will take some time, as with any new product, in filling out the proper staffing levels that we support it with, and of course growing the revenues as those products get marketed.

I think in general we have a lot of new product we're versus fortunate to have that product, but we are finding we can do some things better and we've got some challenges, and we are ready and willing and able, as we have in the past, to attack those challenges and make those venues very profitable.

Great.

The next question I have I think this probably more for Bill, you gave us an update on a lot of different endeavors that you are pursuing.

One that has come up in the news recently, your name was associated with a project in Japan.

I was wondering if you could touch on that.

That was as much of a surprise to us as it was to you.

I mean, we have been active in Japan, obviously we've been active in Asia now for years.

About three years ago, we appointed to an individual to actually work for us in Japan and work, basically under the radar screen there, to deal with the liberal democrat party and the various committees that have been set up.

It just happened to be, this individual that made that comment, happened to be in Singapore.

And so apparently the question must have some up in the context of expansion, and he basically outed us, as it were, in terms of our activities there of relating to helping to advance the concept of casino gaming for Japan.

Things move slowly, shall we say?

Some say glacially in Japan, in terms of how things move from one step to another.

But he accurately reported that the liberal democratic there has advanced a outlying casino legislation that will be introduced and debated in the diet, beginning the first quarter of next year.

If all went well, by the end of 2007 there would be legislation and 2008 they would go through a process of beating and or lining up potential partners and as he was relating they would hope by 2010, if all went well, there would be some form of casino gaming in Japan.

There's a lot of distance between today and there, but I think that he reflected, I think that the report essentially reflected our activities in Asia where we have a number of people that are working with us and for us to position us for other opportunities.

Felicia, this is Sheldon Adelson.

I would just like to say it didn't-- that newspaper article did come as a surprise, that that's what actually happened.

It was somebody 's estimate.

You know, we won in Macao.

We won our tender in Macao.

We won the tender Singapore.

I think with any company in Asia would be hard pressed to say that they prefer to have Number 2 or Number 3 or Number 5 candidates in other places that didn't-- that didn't receive the nod.

So I can't imagine companies like Thailand or Japan saying, oh, we don't want Number 1, we want Number 5.

So the fact we have accomplished what we said we were going to accomplish, and the Chinese government is quite satisfied with us, we're very optimistic that when it comes to submitting tenders in other countries that we'll be right up there at the top.

Okay.

Thanks a lot.

Just a clarify the surprise was just that the-- I mean not surprising to us that they identified us as being active, it was surprising to us an adviser of an official government would make that announcement at this time.

Our next question comes from the line of Larry Klatzkin with Jefferies.

Please proceed.

Hi, guys, a couple of questions.

One, as you are more in the market, what are you seeing as far as seasonality in Macao and even mass versus high end?

I think we-- we have articulated some on prior conference calls that one of our-- at least from our database so far.

First quarter is challenging, it has a lot of mass business but a lot of the premium business is over here in Las Vegas and traveling during that Chinese New Year period.

Second quarter, we had good solid business in both segments.

As you look to the third quarter, you know, a little bit more of a mass segment, a lot of people on vacation, a lot of visitation, a little less high end, perhaps.

Although we feel very encouraged by about our business there.

And then fourth quarter is kind of like the second quarter.

So you know, we-- we are starting to see a-- a pattern of seasonality.

Of course, you know, the opening of Wynn, provides an opportunity for, let's say additional visitation, as that becomes an event for Macao, along with our expansion of our facility and our ability to take our property now and to reach into a broader market, as with those additional table capacities we are can start offering the mass market that is currently relegated to the secondary quality properties, because of gaming limits.

As we begin to offer, you know, $200 and in some cases $100 table minimums, we think we'll help stimulate as a section of the market as well as Macao people get to see and continue to enjoy better quality products.

Of course that will be capped off with the opening of The Venetian in the spring of next year.

That's Hong Kong dollars.

Yes, Hong Kong dollars. 100, 200 excuse me.

Yes.

Second -- second question, going forward you are talking about this new island that a little bit of a resort island and high speed ferry to get people back and forth from Cotai, and from your other island.

Are you going to control -- actually have your own high-speed ferry to bring people back and forth or are you depending on Stanley's current ferry company to do that.

We'll be doing our own ferries.

We're also looking at the possibility of doing ferries for the current routes, and we're looking to-- we think that it's a good thing for us to do.

Okay.

And then-- and then -- okay.

So-- and then new ferry terminal for Cotai, looks like it's little behind schedule.

I was just there a few days ago, on Saturday, today is Wednesday, four or five days ago, it didn't look like it was on schedule to me.

The whole skeleton was up the sides were going on.

I thought they were making tremendous progresses.

I have never had access to the plans so it wasn't on my radar screen, but it appears to be going at a good-- at a good clip.

And the only-- as long as it's ready and running by the time the first true destination resort in Macao opens, that The Venetian Macao, next summer, as long as it's up and running by them it's has enough time.

All right.

As far-- switching over to Vegas, what are you seeing-- I mean we're in through July at this right now, what are you seeing in the next quarter?

Are you still seeing strength in Vegas?

Any backing off or weakening?

We don't see-- we don't see anything on the horizon.

I think it was a weak quarter all the way around for everybody in Vegas.

And we don't see anything in the horizon that will interrupt the growth trend that Las Vegas has been experiencing for decades and hopefully will continue to experience in the future.

One weak quarter does not determine a drought.

How about July in Macao?

We'll have to discuss that at the next conference call.

Okay.

And then last question--

It was hard for him to say that, you know.

We can say this, I mean, it's very busy.

We're not putting out information that's [INAUDIBLE].

I understand.

The creditor wants to sneak it in.

That's okay.

Now-- We can say this, Larry.

First of all, the whole thing about whether gasoline or no gasoline or whatever, walking across the floor, walking around the building it's very busy.

I don't perceive any difference in volume of just pure body count in July from last July.

I'm looking around the table here at the rest of the guys that come here, pretty well every day.

And in Macao, I mean, you know it's-- it's busy.

I remember many years ago when-- when fuel was under $1 a gallon and when it went up over the dollar everybody was crying doomsday.

Now we're at 3 or $4 a gallon and everybody is saying the cost of fuel is going to effect the visitation to Vegas.

Well-- Larry when you come in to Vegas next time I would like you to come into my office and I'll show you a picture of Life Magazine on June of 1955 and on the cover it says "Las Vegas, is the boom over-extended?"

Yeah, I know, many people have written about the end of Vegas over the years.

I agree with you.

But the last question--

To quote Mark Twain, rumors of my demise are exaggerated and premature.

On the Far East, there's some rumors they are looking to do their own project and leave you guys.

Yeah,I understand that's not true, but better get it from the horse's mouth, what do you-- what is up.

It would be hard to do when it's our land.

They were going another site.

Someplace else?

No, that they would go to a different site.

The Far East is not going a different site.

Good.

No, no, I'm glad to hear that that's it.

Thank you very much--

Larry.

Yes?

It's really a joint venture with Far East.

Okay.

No-- I-- I had heard--

Far East isn't going anywhere else.

Okay.

Good.

I tell you the truth.

Good.

That's very good.

It would be better for us.

However, we have our obligations and we want to continue with them.

They are good people and we would like to continue with them.

It would be bad for us if we just kept our own land.

Our next question comes from the line of Robin Farley with UBS.

Please proceed.

Thanks, yes I had a couple of questions.

Obviously before your results there were some concern about convention visitation in Las Vegas and your RevPAR strength looks like that's not an issue.

I don't know if you can comment a little bit on forward convention bookings as well.

And then at the same time, your table drop in Las Vegas was relatively flat and you know, all-- all we have seen so far of the overall market is the numbers through May, and volume through May looked like it was up significantly.

I was just wondering if you could comment a little bit about what we are seeing in your results versus what we've seen so far in the market overall.

Robin, before Bill says anything on this, I would just like to repeat, one quarter was not a trend make or interrupt.

You are talking about a month or a quarter, Vegas is here for decades, it's going to be here for decades more.

We exist on the trend and if there's a little spike or drop-- it peaks and valleys in every trend, and no trend is completely smooth.

So -- I don't know why we talk about a month or a quarter, let's just talk about the trend.

As I said before there's nothing on the horizon.

There's nothing within vision.

Within our radar screen short or long term that would effect the trend that we ride.

You get-- to break your question down into the group side.

I mean we-- we saw a healthy increase in group business in the second quarter.

We were up about 24% in group room nights so a lot of activity there.

We capitalized and used, you know, the new meeting space.

Again, got caught a little short of the margins of that, with that catering aspect of the new meeting space.

As we look forward, we share with you from time to time our group books pace, and the way we define it is, if you look at the 30th of June of '05 and looking forward 12 months as of 6-30-05 we had 402,000 room nights on the books.

As we look at 6-30-06 for the 12 months looking forward we have 562,000 room nights on the books, so a very healthy growth and also a growth in the average daily rate, despite adding that many rooms.

And again, the positive thing about adding that many rooms a we tend-- those rooms aren't being added in mid-you know, October they are being added on the marginal periods because that's where our growth opportunities in the group business are.

Are--

The only thing we have to look at quite frankly, is making sure that we -- we talk about fine tuning things, and I know in other conference call we have said some quarters, it sounds schizophrenic here, the some quarters we didn't book enough group rooms.

We are constantly reviewing and examining the mix of room nights as it affects all of our revenue centers, whether it be catering, whether it be slot product, whether it be table games, drop, which is kind of a segue into the other question and maybe we'll have Rob answer that.

But certainly as we know it that when we add group room nights, we do see effects in terms of the volumes in the casino, particularly on the mass side.

That's one thing that perhaps contributed to -- we grew nicely there the baccarat business we grew about 15% in the second in drop but we fell off and saw almost an opposite effect on the non-baccarat business.

What I would like to say is just think back for a second as part of our conference here, we said in the first quarter we had 99.9% occupancy.

The second quarter we had 99.5.

It's virtually 100% full and it couldn't get any higher.

Think of the fact we opened our 500,000 square feet meeting complex a year and a half in advance because the demand for groups was so great that we had to open to accommodate it.

We now have 300 plus meeting rooms that hold 57,000 people simultaneously.

Our facility is the largest such facility in the world, and we have more meeting rooms than all of the hotels in San Francisco or all of the hotels in Los Angeles and all of the cities in the West Cost maybe even in New York and Chicago, we haven't run into that research yet.

You look at our ADR, you look at our occupancy rate, you look at our demand for the meeting room complex, we can hold 57,000 people simultaneously.

Not that there's one group that wants that, but we could accommodate a lot of groups and overlap a lot.

So our occupancy and our future-- matter of fact, opening the-- the meeting room complex before we finished the infrastructure was-- was a decision we made because of the demand that was out there, so we accelerated opening it and we-- we'll catch up to it.

So it's better to bring the business in and have virtually 100% occupancy rate than turn the business away because the kitchen wasn't open.

That's great.

And can you clarify the comments about the forward -- the nights on the books, the 562,000.

Does some of thank include Palazzo room nights at this point?

No.

In fact that just takes you through the second quarter of '07 and we're opening the Palazzo in obviously the third quarter.

This takes you that 560,000 room nights from 6-30 of '06 to 6-30 of '07.

Great.

Question on Macao, you talked about Xangxan island near Henjqin, I assume that -- maybe you can clarify, would that require a whole other set of approvals on a different time frame then Henjqin and if you can talk of any kind of economic commitment from LVS for that.

We don't want to go overboard on that.

Consider just that an amenity to Henjqin Island, it's I'm a little boastful you might say.

I once had a huge 30-foot boat that I drove myself and went deep sea fishing and it was a lot of fun, and the fact of the matter is it's only an amenity.

We're not creating another big development there. it's just an adjunct to Henjqin Island development.

Those of you who have been to Macao recognize that the waters around Macao are not particularly swimmable, shall we say.

It looks like a cup of coffee.

It's a river delta.

So it's a brown muddy river delta.

A large part of what we're doing on Henjqin Island is to develop marina facilities.

Chinese, if you've been reading some of the materials they are buying cars, boats, their lifestyle is changing.

So the primary purpose of Xangxan is to give a destination for those yachts.

So that it's got a clear water destination.

There's not a lot of investment that needs to be done in Xangxan, it's a natural marina, has the beaches, et cetera.

So it is an amenity, but it's also a way of spreading further economic wealth in the southern part of China so that more than Macao and Xu Hi are advantaged by it.

So it has a dual purpose quite frankly, but it certainly adds to the amenity value of a visit to the region, and that's what we are trying to do, making the Cotai Strip a full-fledged destination.

Dining, shopping golf, gaming, sailing, buying, all of the things people like to do in one place at one time to drive Macao as a destination, as is Las Vegas.

Can you put an outside capital commitment, just so we get a sense of what kind of economic commitment that is there?

It's very small.

Very small.

It's-- it won't make an impact of a tiny fraction of 1%.

It's remarkable.

Okay.

Great.

Thank you.

Our next question comes from the line of Steve Kent with Goldman Sachs, please proceed.

Hi, good afternoon.

Just to stick on Henjqin just for another moment.

The Henjqin opportunity as you have stated and as we have seen is a huge opportunity.

But as you have are interacting with the government and talking about some of the issues, are there any issues out there as you are talking them to that would sort of reduce your desire to go into that market?

And what I mean by that is the potential for the tunnel between Macao and Henjqin, the potential to not have checking of travel document, et cetera, any of those kinds of issues as you talk to them that sort of says, you know, we may not be willing to go forward with this?

To the contrary, they the ones telling us they want a tunnel under the channel, and there's been a lot of discussion about the -- the multi-million square foot convention center -- exhibition center to build on Henjqin to essentially move the Macao immigration tents on the other side of the building, so we don't see-- we don't see-- that's the problem-- they understand.

They know what it's about, that travel between the two-- the two countries, China and Macao have to be considered as though it's just an expansion of Macao.

I was very careful in what I said that we divide between who "they" is, the local authorities in Xi Hi, the regional authorities in Quandong Province, have indicated they want to be able to create advantages for Henjqin Island.

And they have asked the central government for policy decisions that would then relate to that.

So while we have Quandong, we're involved directly in the master planning process, those policy decisions with still in the hands of Beijing.

So while the local authorities have indicated that's what they want to do, Beijing has to determine whether that makes sense or not.

I think that's the best way to clarify that.

But I don't believe that Beijing's decision about a border crossing would affect the fundamental value of development on Henjqin Island.

It would certainly ease the process of-- particularly the convention business of being able to have millions of square feet of exhibition space on Henjqin Island as well as millions of square feet in Macao.

It doesn't make sense for --

The room supply in Macao is what is going to hold the delegates to go to the convention center.

They know if everybody has to go through immigration and wait in line that it is never going to work.

So subject to the approval of Beijing, these people are working very close to accomplish what they want to accomplish.

Finally, last quarter you mentioned there might be an opportunity you were working on, I believe in Europe, is there any additional color you would provide with us today.

We have been very low-key on that process.

We don't want to have the markets be disappointed.

So it's not really even on our communications radar screen.

If-- in fact we're successful, we'll-- we'll inform everyone, but we are-- we are involved, you know, it could be very interesting, but there's no sense-- with all that we have in front of us, all of the positive things going, we don't want to-- we don't want to put in flak, I guess you would say, in the atmosphere.

Okay.

Great.

Thanks for your help.

Our next question comes from the line of Celeste Brown with Morgan Stanley.

Please proceed.

Good afternoon.

Couple of questions.

First, I guess the inverse of the Las Vegas question, what was the EBITDA and back to the higher hold in Macao?

The EBITDA--

I'll tell you I read cover to cover of your-- your Macao study and I would like to complement you you did a very good job.

Thank you.

I guess I would start off by saying that the-- really the impact of the whole percentage would have been primarily in the-- the rolling chip program.

Rolling chip program was up about .4% a above the 2.5, I believe the actual number.

I'm looking for that through our calculations.

And so you know, we would say that our-- our expected range on-- on the rolling chip program is 2.5 to 2.8.

So it's slightly above.

So on a $4 million -- $4 billion -- it's hard to say that-- excuse me-- $4 billion rolling chip program, obviously you know, .1% would have been like -- what is that, $4 million.

And with the-- and you know, you can say, okay if it's .2%, it's 8 million and of course on that particular business, we only run a about a 15 to 20% margin because of the 40% tax and the 1% roughly of the rolling chip that we pay to the junket rep.

So it had an affect probably in the range of EBITDA of probably 2 to 5 -- 2 to $4 million.

On the mas side again, we tell-- I believe it was 18.9 and that's kind of, you know, towards the higher end, but it's still roughly within our range.

And roughly you know, let's say it was 18.5, .4% on roughly $340 million a drop would have been -- 1.2 million I guess that would be.

Less expenses and taxes and everything else.

Maybe -- maybe $1 million.

Okay.

And then on the Henjqin Island, I guess, first to you view this as a done deal, just sort of dotting the I's and cross this T's waiting for Beijing?

And then do you have a sense how much you going to put into that and when that would begin.

And then I guess when we would start to see proceeds back out.

The answer to number 1 is, nothing is over until it's over, and when you are dealing with the central government it's always better to be caution in terms of how you frame how the process is proceeding.

Number 1.

Number 2, we see the expenditures being a relative-- relative to what we're doing, relatively small over the near term, because of the infrastructure work and the development work, and things of that nature, preparation work, are the beginning parts of it, so-- over let's say a 12-month time horizon we don't see it being a very large [amount] on the money.

If we-- if we are correct in our judgment, it is possible that we may get started by the end of this year, but we won't see it being certainly a significant amount of money over the year-- the year 2007.

We have proposed a staged development that would put in place product as we test the market, quite frankly, and so we would see about a two-year development process and we would then see return coming shortly thereafter, because we get our pre-marketing activities for selling the individual units as we begin the construction process.

Celeste, I would just like to add on and I say I would shocked-- I would be-- let me back up and say we're optimistic and confident that it will be final.

Now, like Bill says it's not over until it's over.

As far as investment is concerned, remember that the cost of construction and doing infrastructure work is significantly less than what it is even in Macao, because it's in China, we use-- we use Chinese labor.

So it's not going to command a significant part of our-- of our resources, matter of fact, small enough so that we will just handle it out of working capital.

We won't have to do separate financing for that.

And when we do the first phase of development there we believe we will be pre-selling all of the units.

So we don't see Henjqin Island all the upside potential of 62 million square feet is somewhat-- is-- is phenomenal, to say the least, we see it as sort of pay as you go.

I just have to correct myself.

You know, it's-- you think a month versus a quarter.

We had about $1 billion of non-rolling drop in the second quarter at we actually at 18.6 over .1 of a point, at maybe above the higher end of our range, so it probably affected us after gaming tax, maybe to the tune of 4 or $5 million.

Okay.

Great.

Thank you.

Our next question comes from the line of Dennis Forest with KeyBanc Capital Markets.

Please proceed.

All of my questions were answered except for one simple one.

At the beginning Bill you had mentioned that you added 400 FTE's to The Venetian, what does that bring the total up to?

Just under 6 million.

6 million?

The break out on the -- on the FTEs was, poker is about 119, theater operations, box office, technical related to Phantom was around 87, Paiza Club increased

He just wants to know what the total was.

Total was about 6,000.

6,000 employees.

Okay.

Thanks a lot.

Bear in mind all that of our restaurants are leased out.

Uh-huh.

So a significant part of all of the employment in the hotel is by third parties.

Right.

Right.

But 400 sounds like a fairly significant number on top of what, 5600 going in.

Well, you know, it's adding a lot of product and poker takes a lot of generation, and again, we saw in July, we turned the corner on covering those payroll costs, and actually making some additional dollars.

Some of those numbers are -- as Rob said, 87 are in the area of the theaters, we actually get revenue, we collect box office revenue, we get certain reimbursements for those as well.

It's not just at added cost, we --

All three areas of profitable the poker room obviously is labor intense.

The theater operations will stabilize with income from both Blue Man, Phantom, and Gordy Brown is profitable already.

Pool, we actually added more cabanas to pool this summer. and lastly our banquets are up considerably, 197 banquet service for the quarter, just because of increased banquet business and not all that efficient banquet business.

You kind of spoiled us with the high margins at the Venetian, the 30% for the quarter seems to be-- hopefully a trough margin.

We did spoil you, but I hope we spoil you again in the future.

Okay.

Thanks.

Our next question comes from the line of David Andrews with Merrill Lynch, please proceed.

Great.

Hey, Brad, or Bill, could you give us -- so, you'll be at 700 tables.

What day will that be for Sands Macao?

Our current projected opening date is the 23rd of August.

And so you'll have 700 and then you'll run there for the next year or so.

We don't see that necessarily changing.

We will be adding hotel product to the Sands Macao, approximately 180 mini-suites that-- that construction will start shortly and be open sometime next summer to support, you know, the convenience, but still there's only overnight market there.

Have you [INAUDIBLE] cost on that as well or not really?

The cost is somewhere-- we're still looking at cost somewhere between 80 and $90 million.

Okay, now just to be clear on this whole percentage, so you played unlucky in Vegas, you played lucky in Macao and net net it all cancels out at the corporate level.

Well, I guess, I mean, you know, marginally lucky, I guess in Macao, within our ranges.

Certainly when we have been enjoying in excess of a 22% hold percentage for the last year or two in Las Vegas to fall down to 17.5 is quite a difference for us, so it's-- it's bit unusual for us to go down that low.

I thought you said it was 3% at Macao and you normally run 2.5 to 2.8.

Is that not the right numbers?

Yes, it's 3 -- it's .2% against the upper part of the range.

Okay.

Thank you.

The next question comes from the line of Jake Hogan with Banc of America.

Please proceed.

Hi, good afternoon.

I just got a few quickies here for you.

First and it relates to the retail in Macao, has there been any change Bill, meaningful, in regards to the average price per foot that you are getting her to indications or you are starting to write those leases at?

And as it relates to the vacation seats in Cotai, I was wondering if there's any update as to the 2.4 million square feet and the expected rates you were hoping to achieve there, and then I also have couple of follow-ups.

Okay, let's take one at a time.

The rates that we are booking at the mall, as far as the lease rates, are similar according to our table, I guess you would say of lease rates that we talked to you all about.

The question of what the blended rate is, depends upon the space leased during the time period, that's all.

In other words, there's time space that commands a premium to, let's say, mezzanine space, but our expectation--

Wait--

Our expectation of average is where we were in the past.

The overall budget for the entire Grand Canal shops--

Still on budget, okay.

Got it.

We're ahead of budget.

Ahead of budget.

Okay.

I was having a hard time hearing you, Sheldon.

Got it.

As it relates to the vacation suites as-- you know, in number of square feet, has that moved at all in terms of more or less units and at what price you hope to achieve on those/

All of the square footage has stayed the same.

And it relates to the broader CapEx in Macao, The Venetian, the Four Seasons site, 5, 6, 7, and 8, have the CapEx numbers for those projects moved at all one way or the other since the last call?

Yes, I mean, Jay, I'll give you the CapEx forecast for the balance of the year.

What he's asking is whether or not it is significant.

Final plans for 7 and 8 haven't been completed.

And they still-- we're still opening there and we're still out to bid on 5 and 6, but we think our estimates of construction cost are within-- are within range.

Got it.

Okay.

Just wanted to make sure.

And then as it relates to the--

We're-- we're not doubling the costs.

Sorry I didn't hear that.

We have a lot of experience building tenant operated square feet now with The Venetian and we have a better idea as to exactly what the costs are and how to plug in numbers in subs of different elements of construction.

Understood, it's just there that there has been a few changes during this earnings season, so I just wanted to make sure as we're looking to model, we're still looking at the right ones.

I think it's fair to say there's no significant changes.

Got it.

And then on those healthcare costs in the self insurance issues that you had in the quarter, if you can help quantify maybe what the impact there was, you know, kind of year-over-year?

Because I would imagine that some of probably just goes away right away.

So can you-- is there any way to quantify that at all, that health care and self insurance issue in any quarter?

For the quarter if you look at all payroll and related, we're up pretty significantly $7 million year-over-year, which had a big impact on our margins.

Group healthcare insurance itself was up just under $4 million of that, so you know, that's a pretty significant number that we need to attack and work on.

We need to find a balance between making sure we have outstanding benefits for our team members and making sure that those-- costs are controlled adequately.

And this is a big number we're going delve in there's no quick or easy solution to this.

Certainly a trend that people are seeing nationwide and I think we'll being impacted perhaps more than we should be and I think there's opportunity for us to bring these costs down.

Great.

Okay.

Thanks a lot.

Our next and final question comes from the line of Harry Curtis with J.P.

Morgan Chase.

Please proceed.

Hi, guys.

Could you -- going back to Singapore for a moment -- talk about the convention market in Singapore today and your sense of what they demand is going to look like once you open in perhaps 2009.

The convention market Singapore is probably the-- either-- at least in Asia the top most popular place to hold a convention.

It may be among the top three in the world, with places like Las Vegas and Vienna, as far as holding conferences.

Perhaps not as much trades shows, but certainly conferences.

And the interesting thing I think about Singapore, as we looks at the Singapore market, it has very little modern good meeting space.

I think the demand for Singapore exceeds the supply of space there, and we believe that once we put good, modern, flexible space in the marketplace, we can capture a lot more share of world conference revenues that Singapore currently captures.

So we're very confident that the convention, and eventually the trade show market, development there can be very robust.

So we got more encouraged as we actually dug into the detail.

And--

We're building a significant convention facility there like we have here in Las Vegas.

We'll build somewhere about 450 meeting rooms, that will hold 52,000 people simultaneously, and that compares with the equivalent of a 34,000 people capacity in the top 50 hotels in Singapore.

So rather than any group having to use multiple hotels for meeting rooms, you'll be able to use one facility, and that will be very, very attractive to a lot of groups that would go to Singapore.

Do you think it takes a-- a longer or shorter period of time for the demand to ramp?

We've already started.

Well I have got a meeting on the 14th here, with the chairman of a very well-known company that's -- you know, huge, probably one of the Top 20 companies in the country, to talk about a 16,000 person group in '09.

So the ramp-up there -- there's a lot of interest.

There's quality.

There's an IMF meeting occurring, either currently or in the next month or so, in Singapore, and it's -- it's recognized.

There's a very high quality meeting place, but it will-- it will be even more because when they will be able to hold all of their banquets and hold all their break our room sessions, under one roof, it's a highly attractive configuration for them.

That's great.

Thank you.

We-- we see nothing but upside the-- the convention upside in Macao is going -- is going very good.

Singapore, sorry.

I know he's talking and Singapore.

It's in that part of the world.

It's just bringing our model that has been so successful here to another place that has infrastructure support, so I think it's a perfect combination.

Thank you.

I would now like to turn the call back over to Mr. Bill Weidner.

Thank you.

And thank you for joining us today.

We look forward to talking with you again in the future.

We spent a lot of time on a lot of different issues, and I appreciate your patience and your focus, and we look forward to talking to you again next quarter.

Thanks again, and have a good day.

Thank you for your participation in today's conference.

This concludes the presentation.

You may now disconnect.

Good day.