拉斯維加斯金沙集團 (LVS) 2006 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the fourth-quarter 2006 Las Vegas Sands Corporation earnings conference call.

My name is Tim, and I will be your operator for today. (OPERATOR INSTRUCTIONS).

As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the call over to Mr. William Weidner, President and Chief Operating Officer.

Please proceed, sir.

Thank you, Tim.

Good afternoon, everyone, and thank you all for joining us here today.

With me in Las Vegas are Mr. Sheldon Adelson, our Chairman;

Brad Stone, Executive Vice President;

Scott Henry, Senior Vice President;

Rob Rozek, our Chief Financial Officer, and Dan Briggs, our VP of Investor Relations.

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

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

Please see today's press release under the caption of forward-looking statements for the discussion of risks that may affect our results.

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

A definition and reconciliation of these measures to the most comparable GAAP financial measure is included in the press release.

Please note, as Tim mentioned, this presentation is being recorded.

By now you should have all received our press release detailing our financial results for the fourth quarter and for the year 2006.

Our results confirm that we continue to execute on our operating and development strategies both in Asia and in the United States.

In Macao The Sands delivered another strong quarter reaching record fourth-quarter gaming win.

This was our first full quarter after opening our podium expansion.

Our visitation and operating metrics are continuing to reflect incremental growth even as extensive additional high-quality capacity is added to the marketplace.

In Las Vegas the Venetian delivered the strongest quarterly performance of any property in the history of Las Vegas with the EBITDAR reaching over 134 million, an increase of over 52% compared to the quarter one year ago.

The property is clearly firing on all cylinders, and that is extraordinarily good news as we prepare to open the Palazzo this fall.

Before turning to our detailed quarterly results and your questions, let me spend a few moments updating you on our thoughts about the Macao market.

First, as we have said in the past, we feel that a supply-driven market condition remains in place.

Gaming capacity is now being added at significant rates, and the market continues to expand in response to those increases in capacity.

For the fourth quarter, Macao market grew a whopping 44.3%, and that gaming market expansion is now happening in all three segments of the marketplace -- the VIP, the mass and our slots.

Each of these three markets are growing at healthy double-digit rates.

Second, the highest quality products in the marketplace -- those that most effectively address the market opportunity -- continue to perform against the inferior products -- outperform the inferior products.

Our fourth-quarter results at The Sands Macao directly illustrate that market dynamic.

In a period when substantial amounts of high-quality and new product have been added to the marketplace, our visitation numbers and gaming revenues at The Sands set all-time records for the fourth quarter.

While The Sands did experience, as we had expected, an initial decrease in market share as customers visited the new competitive products added early in the quarter, our market share has since rebounded.

In the month of December, The Sands recorded a table games market share of over 21%.

That is higher than our share was before the introduction of that new product.

That is quite a performance and one that we believe speaks volumes about the Macao market in general as well as the competitiveness of The Sands product both today and for the years ahead.

As we have said before, our sense of Cotai development plans are based squarely on those two fundamental concepts.

First, that the gaming market will expand dramatically as quality product is introduced, and second, that the highest quality products in the marketplace will not only win market share from the inferior product but will also expand the market to customers who rarely if ever came to Macao before.

This is clearly what is happening in the market today in every segment of the marketplace -- in the VIP, in the mass and in the slots market.

We believe that this market environment is ideal for the opening this year of the market's first truly integrated resort, truly mega-resort -- the Venetian Macao, the anchor of our Cotai Strip development.

The scale of this development, the level of investment, the gaming capacity and the amenities of this huge 11 million square foot development, will introduce to the market -- that this development introduced to the marketplace will clearly create a fundamentally new playing field for those who wish to compete in Macao, and we believe generate significant incremental gaming demand in the Macao marketplace.

We also believe that the non-gambling amenities that accompany a true destination mega-resort -- thousands of world-class all suite rooms, entertainment offerings, meeting and exhibition facilities, world-class shopping and fine-dining -- will create new revenue streams for the Macao market as has been the case for the Las Vegas market.

Now we believe that these those operators who do not invest in those amenities will put themselves at a distinct competitive disadvantage compared to those operators who do.

We remain unwavering in our fundamental strategy -- build the heart of the Las Vegas strip, re-creating its scale nearly 50 million square feet of integrated multibrand destination resorts, complete with massive meeting facilities, shopping malls and thousands of high-end condominiums, featuring 12 premier hotel brands with nearly 20,000 hotel rooms all interconnected by air conditioned walk-over bridges right on the doorstep of (indiscernible).

To put the scale of our Cotai Strip development in perspective, we're creating something similar to the Las Vegas strip from Bellagio in Paris on the South up through Treasure Island and Palazzo on the North.

The difference, however, is that every property is master planned to work together and interconnected with a climate controlled environment.

With such a massive scale of gaming, shopping, entertainment, meeting and dining options available, leaving that air-conditioned environment will never be necessary.

We are now just months away from opening the Venetian Macao, the anchor of the Cotai Strip, and in realizing the first step of our vision of creating Asia's premier convention, vacation and leisure destination.

In short, Asia's Las Vegas.

Turning to our financial highlights for the quarter, fourth-quarter consolidated adjusted property EBITDAR came in at a record $244 million.

That is a 28% increase over the fourth quarter of 2005.

Fourth-quarter revenue at The Sands Macao came in another record $345.9 million.

That's an increase of over 27% compared to the fourth quarter 2005.

Adjusted EBITDAR at The Sands Macao came in at over $110 million.

The fourth-quarter EBITDA for the Venetian in Las Vegas was an all-time quarter Las Vegas record of $134.1 million.

RevPAR was a fourth-quarter record for the Venetian of $235, up nearly 10%.

ADR was $243.

In addition to our strong financial resorts, we accomplished or advanced on a number of notable strategic and operating objectives.

In Macao we entered in the final phase of the construction of the Venetian Macao, and we expect the principal construction of the building to be completed in the second quarter.

Our project there is on-time and on budget.

In Singapore we have advanced our preconstruction pre-leasing activities and expect to market a significant construction milestone there shortly.

In Las Vegas we continued construction of the Palazzo, which is scheduled for a late fall 2007 opening and made additional progress on the leasing of the Palazzo mall.

Finally, we won the right to build an integrated resort in Bethlehem, Pennsylvania on the site of the historic Bethlehem Steel Works about 70 miles from midtown Manhattan.

So those are the highlights.

And so turning now to more detail concerning our quarterly results, in Las Vegas both revenues and EBITDAR increased sizably.

Casino revenues were up strongly compared to one year ago, reflecting the increase in both table drop and hold compared to the year ago period.

Table hold was 36.9%, significantly above our expected range of 20 to 22% and last year's fourth-quarter hold of 26.4%.

While gaming win and hold were clearly extraordinary, our hotel, convention and food and beverage businesses all showed significant increases compared to the quarter one year ago.

Our convention-based strategy continues to drive increases in those important and profitable segments of our business.

Our expanded meeting facilities continue to provide us with greater capacity to book group business, which contributed to the record fourth-quarter occupancy, strong F&B performance and strong RevPAR.

And if the group catering revenues are added to the room revenues and divided by available rooms, the rooms and catering RevPAR hit $299, an increase of 10.7% compared to the $270 in the fourth quarter of 2005.

Our convention-based business model is performing well, and we look forward to extending that strategy and harnessing the full power of our Las Vegas master plan with the opening of the Palazzo in the fall of this year.

Our retail leasing activity in the Palazzo mall, which will be anchored by Barney's New York, continues to progress ,and we anticipate the leasing of the remainder of the space to be completed this spring.

Turning now to our performance in activities in Asia, on the VIP side of the market, at The Sands Macao rolling volume was a record $5.6 billion in quarter four, up 44% compared to the $3.9 billion in the fourth quarter of 2005 and up over 60% from the $3.5 billion in the third quarter of 2006.

We are very pleased about the significant inroads we have made in this business, which just two years ago was a non-existent for us, and the most recent quarter contributed approximately 50% to our gaming win.

Our VIP continues to gain momentum as we focus our Paiza marketing activities in Asia to directly support The Sands and very shortly the Venetian Macao, a facility which will bring unprecedented amenities to this important customer group.

Our ongoing marketing activities are also designed to benefit the Venetian in Las Vegas as is evidenced by our fourth-quarter high-end table results and most particularly the Palazzo here in Las Vegas, which has been specifically designed to cater to the high-end Asia VIP gaming market.

Our mass table drop at The Sands Macao was $1.03 billion for the fourth quarter, about the same as the fourth quarter of 2005, despite the significant large increase in quality mass table capacity opened by competitors.

Slot handle grew by 22%, reaching $273 million.

Slot win grew 11.7% to $20.6 million.

Our podium expansion, which was opened in late August, is now providing incremental capacity for mass play during evenings, weekends and peak holiday periods such as the Chinese New Year which will occur this month.

And the completion of our 240-room hotel tower will allow us to aggressively compete for that slice of the mass market vat, while very valuable does not qualify for a rolling chip program or one of our 51 suites reserved for our very highest and VIP players.

On Cotai construction of the Venetian Macao remains on schedule.

We expect the building to be delivered to us from construction during the second quarter, and at that point we will increasingly focus on preopening activities, including the finish out of tenant and retail spaces.

The staging of marketing events designed to build awareness as we move towards summer of 2007 opening will begin shortly.

The first television advertising for the Venetian and mainland China will occur on the Chinese language broadcast of the upcoming NBA All-Star Game, set to be broadcast live throughout China from Las Vegas on February 18, just two weeks from now.

We are now planning additional events to be broadcast in China, Asia and around the world from our 15,000 seat arena slated to open in the fall of this year.

In conjunction with the planning of these awareness building promotional events, we have been actively building on our three group business segments -- convention and exhibition, corporate and incentive meeting and tour and travel segments, as well as building our rep network to fill VIP and junket sleeping rooms.

In that regard, we reached agreement with two additional exhibition meeting organizers during the quarter.

This brings the total number of contracted exhibitors to over 30. (technical difficulty)--.

We have signed our first corporate meetings for fall of 2007.

To date we have contracted with over a dozen corporate meeting organizers to host corporate events at the Venetian, including some globally recognized household names in the financial and professional services sector.

On the tour and travel side, we have now signed agreements with 56 tour and travel operators in Asia, including five of the largest and most important in the region.

In concert with these tour operators, we have tailored packages to bring thousands of visitors to Asia's Las Vegas from major cities in China, Taiwan, Japan, Korea, Thailand, Malaysia, Singapore, Indonesia, Australia and India.

These tour packages will include bus, rail or air transportation and, of course, accommodation at the Venetian Macao and in the years ahead in the other resort hotels on the Cotai Strip.

In addition to these group segments, we have begun to negotiate agreements with many of the most important junket operators in Macao to provide them the opportunity to reserve rooms in the Paiza Club at the Venetian Macao.

We believe the Paiza Club at the Venetian Macao -- effectively a hotel within a hotel with hundreds of superluxury suites, private dining areas, a separate entrance and lobby, private and dedicated elevator core, along with numerous other amenities -- will be a tremendous innovation in the Macao VIP marketplace.

Turning to retail leasing in Macao, the process of construction of retail and restaurant tenants in the Grand Canal Shoppes has begun, and our efforts today are focused principally on working closely with the approximately 400 parties who will be tenants in either the Grand Canal Shoppes or the adjoining mall at the Four Seasons and working with them on the final placement, design and construction activities for their stores and facilities.

Our base minimum rents now exceed $140 a square foot for these tenants, and we have remained ahead of budget with respect to minimum rents on each of our three retail levels -- the casino level, the canal level and the canal mezzanine level.

We have also begun unusual leasing activity on the malls, on sites five and six, and have reached commercial terms with more than 20 retailers to lease space from us on those sites.

Leasing activities on-site seven and eight and three will follow sites five and six.

These additional malls will add another 2 million of square feet of retail space, bringing a total of about 3 million square feet to the Cotai Strip.

While on the topic of mall leasing in Asia, we have begun the pre-leasing process for our 1 million square foot mall at the Marina Bay Sands in Singapore.

Over the last five months, during our pre-leasing process, we have received expressions of interest for more than 250 prospects who have pitched more than 400 different brands and retail concepts for the mall at the Marina Bay Sands.

Our leasing team is holding dozens of meetings per week to listen to these ideas, and we are increasingly enthused about the prospect of creating Singapore's most exciting shopping experience at the Marina Bay Sands.

The actual retail lease signing process will begin this summer.

We continue to make progress with our Hengqin Island development plans we announced on January 10 that we received official letters from the Zhuhai municipal government informing us that they have established a Project Coordination Committee specifically related to our proposed development.

The functions of the Project Coordination Committee is to act as the liaison between -- that is empowered to work directly with us to advance the developments of our project.

This is clearly another positive development in the advancement of our master plan.

Subsequent to the formation of the Project Coordination Committee on the 10th, our engineering, design and architecture teams have interfaced with the committee and their consultants on numerous aspects of our master plan, and we expect to continue this interaction with the committee and their representatives as we work toward our vision of building Asia's premier leisure destination, the Chinese Riviera if you will.

While we can not know the precise timing of future events and cannot guarantee that all approvals will be given, we do expect that consistent with our understanding of the development process in China that the overall master plan is approved by the relevant governmental authorities.

A series of land grants would then be awarded for each phase of the master plan, and thereafter, we would seek separate approval for construction for each of those phases.

We remain enthused about the level of government support we are receiving for our Hengqin Island master plan.

We believe that the vision of what our master plan strives to achieve in combination with our developments on Cotai is shared by the national, regional and local governmental authorities in Zhuhai, Guangdong Province and the PRC.

That vision behind this master plan is to build the largest combined destination resort in Asia, which will cater to both business and leisure travelers with gaming, live entertainment, shopping, fine-dining and world-class conference and exhibition facilities in Macao, complemented by a world-class sister exhibition and conference center, plus additional leisure activities like yachting, golf, tennis and water sports on Hengqin Island in Zhuhai.

And the non-gaming amenities of Hengqin Island, our Chinese Riviera, will come with one additional major benefit, a mainland Chinese address.

That mainland Chinese address can be promoted through tour and travel operators and meeting convention sales organizations to the $1.3 billion annual visitor Chinese domestic travel market, as well as the over $60 million annual delegate Chinese meeting and convention market.

And the Chinese Riviera can be visited directly by bus, train or even domestic flight into Zhuhai.

We expect to invest approximately $400 million in the first 18 months of our initial phase of development on Hengqin Island.

However, once again, I would point our development plans there on the island continue to be subject to receipt of additional government approvals.

On the domestic front, we have won the right to develop an integrated resort on the 126-acre Bethlehem Steel Works site in Bethlehem, Pennsylvania.

We're clearly enthused about the potential of this site, which is just 70 miles from New York City and less than an hour's drive away from the affluent Northern New Jersey suburbs of New York.

The site is master planned to allow us to utilize our proven business model, developing both core and noncore assets and with the ability to expand as the market expands.

Think something like Foxwoods, only half the distance from New York City.

The Steel Works also presents a unique opportunity to work with the National Museum of Industrial History, an affiliate of the Smithsonian Institution, as well as other public and private institutions as we bring one of the largest brownfield sites in the United States back to productive use.

To head up our Bethlehem development activities, we are pleased to have recently brought [Bob DeSalvio], a 28-year veteran of the gaming industry onboard.

Bob joins us from Foxwoods where he was a senior operations executive.

Bob and his team have already made great progress on various preconstruction activities, and we look forward to breaking ground on the Sands Bethworks later this year and opening the property in 2008.

Before we go on to our Q&A, let me conclude by saying that we achieved many significant objectives this year, record revenues and profitability in both Las Vegas and Macao, significant increases in the breadth and depth of our management team, the Singapore and Bethlehem wins, our podium expansion for the Sands Macao and the remerchandising of the Venetian and Las Vegas just to name a few.

We clearly recognize that we have far greater things to do and to accomplish in the years ahead.

As we move forward, our number one focus remains on steady, deliberate execution in operations, in development and the identification and aggressive pursuit of future opportunities.

We remain confident that successful execution of our plans will showcase how to maximize the economic impact of gaming for governments, of potential new gaming venues and produce tremendous long-term results and industry-leading returns for our Company.

With that introduction, I would now like to ask the operator to begin -- open the microphones for our Q&A session.

Thank you.

(OPERATOR INSTRUCTIONS).

Harry Curtis, JPMorgan.

Brad, I wonder if you could talk a little bit about your normalized margins at the Venetian, and could you give more detail on the efficiency programs that you have put in place, how sustainable are they and how broad based are they?

Okay.

Thank you.

During our second-quarter conference call, we talked a little bit about some disappointments in some of our margins at the Venetian, and we have been attacking them aggressively since then.

Some of them were physically related by bringing on meeting space -- you know, the meeting space we brought on in advance -- some issues as far as medical benefits, and I think we have made some excellent progress.

If you look at the fourth-quarter results, obviously the casino revenues were stunning and benefited from the whole percentage.

That was unusual.

But if you look at all the departments, whether it be the rooms department, the food and beverage department, the retail departments, made great progress not only in terms of growing the revenues but all those departments also showed improved operating margins.

If we look at the casino itself, particularly the table games area, I look at the calculation if we normalize the whole percentage to about 21%, which is the mid of our range of 20 to 22%, and you take a look at the costs associated with the premium business because obviously that is where the delta was, it probably benefited us in the range of about $30 million of additional incremental EBITDA because of whole percentage against a normalized 21%.

If you looked at the adjusted hold based upon -- I am sorry, margin based upon a reduction in our EBITDA based upon the advantage we received from the whole percentage, we still would have run about 37.6% margin.

That compares very favorably to last year at 35% margin.

Of course, what we have not done is adjusted the fact that there was a 26% hold in the fourth quarter of last year.

So not having done that math at 21%, my calculation roughly would have run about a 37.6 margin versus last year's 35% margin with a 26% hold percentage.

Certainly the gross revenues have been very good across the board, but I think our expenses are coming in line, and I think the most important thing for everybody to recognize is as we move towards the Palazzo, we will see significant, significant economies of scale as we operate those two properties together as one in the back of the house.

Again, the idea is to present two different products to the front of the house, but operate them as one in the back.

And I think the most initial indication of that is our preopening expenses for the Palazzo are going to be very efficient compared to what a stand-alone resort would be, and I think that bodes well for additional operating efficiency as the Palazzo comes onboard and the overall complex here in Las Vegas continues to show improvements in its operating margins.

And so can you talk to the sustainability of it?

Again, the sustainability of it I think currently we feel comfortable we can sustain it through the opening of the Palazzo, and I think the real good news is once the Palazzo opens, we anticipate seeing a nice ramp up in margin as we become extremely efficient in terms of particularly our overhead costs and our G&A costs.

So the sustainability I believe is there through the third quarter until we open the Palazzo, and then I think we move upward again and improve the margins post Palazzo opening.

And then I had a question for Bill or Sheldon with respect to Hengqin.

You have estimated your profit per foot at Hengqin would be comparable in the neighborhood of the profit per foot at Mission Hills, and I am wondering how comparable you think your development is going to be versus other projects in and around Macao and what the difference might be?

I think what we talked about was not necessarily profit.

We did talk about what Mission Hills was garnering in terms of a sale per square foot.

My recollection was somewhere between at the low-end $700 or $800 a square foot; up at the high-end, $1100 or $1200 a square foot, and the larger places were generating sales per square foot at higher numbers, which is kind of a similar to what happens in Hong Kong.

But I think Mission Hills obviously it is solely focused on golf.

What we're doing at Hengqin Island, we not only have the golf amenities that we will be developing, but we will have yachting amenities, water sports plus the appeal I guess you would say of the Cotai Strip, which has something that neither Mission Hills nor any other place has -- the shopping, dining, gaming and entertainment of Macao.

So we think we can position Mission Hills as more of a, call it a European or a more traditional non-Chinese destination.

We kind of call it the Chinese Riviera, and that is the way we want to position it.

That is not Mission Hills.

That is Hengqin Island.

Yes, positioning -- pardon me, did I misspeak myself?

Hengqin Island is to be positioned above where Mission Hills market position is because of the multifaceted appeal that we can develop on Hengqin Island.

I think the marketing strategy for Mission Hills is for buyers to come mostly from Shenzhen and Hong Kong.

We think the buyers for our condo properties, of which we hope to have 20,000 or 30,000, we don't really know yet, plus maybe 20 or 30,000 hotel rooms, will be from all around China because they are selling primary homes there, as well as some weekend homes.

We are selling second homes.

That is our intention.

And I look at it as a housing supply for the Cotai Strip.

Steven Kent, Goldman Sachs.

Two things.

Bill, I think in your opening comments you suggested that maybe the customers that influence some of the results in Vegas, especially at the high-end, may have come from another market.

I'm assuming Asia.

Could you just talk a little bit about that flow and whether you are -- you talked about that a couple of months ago that you were targeting that.

You are starting to see that benefit.

Maybe you could just give us a little bit more color there.

And then the second thing is, just on the mass market table drop, which has been roughly flat the last quarter or two, could you just talk about where you see that going?

Obviously I think the new hotel tower should help, but you have had some other initiatives over the past couple of months.

I'm wondering if they are starting to gain traction, or do you really need the hotel tower and essentially the Venetian Macao to more aggressively target that mass market customer?

Steve, let me answer the first one, and I will turn the second one over to Brad who has got more specific detail on the mass market activities.

What we have basically said pretty well all along is that the more we increase our activities in Asia and the more people know who we are and the more people recognize what it is we do and the more that we develop a reputation of a high-quality operation, then the more opportunity there is for our salespeople to reach out into those markets with people who have a familiarization with our brand.

So we see that just beginning now.

We're really kind of -- this is the tip of the iceberg.

It has only been in the past three or four quarters that we have actually penetrated in a major way that high-end marketplace.

We see some of the value of that this fourth quarter with a number of high-end individuals that know of us or that either come directly or indirectly from our activities in Asia.

And, as we opened the Paiza Club at the Venetian Macao, I touched on that.

The Paiza Club there is an entirely separate hotel.

While it is a part of the mega complex, it is its own self-contained entity that allows us to provide services to that high-end customer that just does not exist in Macao now.

So, as we take our next steps into that marketplace and we penetrate it further, I think we see more and more value to whatever we do in the world from the exposure to our products there, whether it be here in Las Vegas, Singapore or other places.

I also mention that the Palazzo, I mean we retrofit the Venetian here with our Paiza Club here to try to make it more responsive to that high-end Asian market.

But we actually built into the Palazzo amenities that we learned from in our developments there in Macao.

So I think we see more and more value directly obviously to Macao in terms of the Venetian Macao Paiza Club and then more and more value indirectly as we penetrate those more markets more deeply there in Asia.

Brad, do you want to talk a bit about the mass market?

Yes.

On the mass markets, I think we often make the mistake in Macao of we define three markets -- VIP, mass and slots.

There are certainly many submarkets within the mass market.

As Bill referenced in his presentation, the high-end of the mass market is very important to us.

The expansion of the podium, if you actually look at the numbers, has worked out pretty well for us.

Our mass mass business has shown some nice growth to it.

We fell off a little bit and started rebounding, as Bill mentioned, at what we call the higher end of the mass market.

There is a market out in Macao that really is not the VIP market that qualifies for the rolling program.

It is not really a mass customer, and really a room product is a good thing to give that particular customer.

A lot of room product came into the marketplace in the fourth quarter between Wynn and StarWorld, and as Bill also referenced, we will be catching up with that in the too distant future with our 240 room expansion of our product.

It is an excellent product.

It is basically similar to the Venetian since it has a living room, a bedroom, so every room is basically a suite in those 240 rooms.

So we think it will compete very well against the current products.

On the general mass side, we have seen some nice growth into the December period.

We have seen visitation improve as we go into January and continue to on a year-to-year basis despite the fact that the end of January of last year had Chinese New Year in it.

We're doing that through extensive busing.

We have expanded our busing programs, on floor promotions, things they create interest at the property, and we will continue to do so as we lead up to the opening of the Venetian itself.

And again, on the higher end mass side, we continue to be aggressive against that, and we look forward to having the room product onboard to help us against that particular product.

This is Sheldon.

I just want to say that it is significant to us that our income and our visitor volume was flat or increased.

I don't think any one of the three months we suffered a decline.

Notwithstanding the fact that our internal projections and our budget anticipated a decline from the competition of both Wynn and StarWorld.

We are very happy to say that our attendance continued to rise, which indicates there is a loyalty factor that we were not sure of to the customers that have been coming to us amplifying our first mover advantage.

So we think it is very significant that instead of going down we stayed flat and then we recovered.

We did not recover from a fall.

We just accelerated the -- we got back the increases.

In December I think our increase was 21% over (multiple speakers) -- market share was 21%.

And that was significant.

So instead of competition hurting us and creating a long-lasting impact, it actually helped because it is very clear that new quality product coming into the marketplace is going to expand the market significantly, and that bodes very well for our new market projections for the Cotai Strip.

Larry Klatzkin, Jefferies.

My identity has changed, but the questions are the same.

A couple of things.

One, host dynamics, would Steve change in the way he is doing host?

What have you found gaming, and where is that going right now?

I am not sure we understand the question.

Host dynamics?

You know, where you are saying you guys have been saying that Steve Wynn is working and running the host a different way than the rest of the market.

Have you been --

No, no, no, not the host.

The junket reps.

The junket reps, sorry.

Yes, it is hard to know exactly how Wynn Resorts is doing.

We have two different approaches.

We pay a commission on the roll.

The Wynn organization has chosen to go with they call it a 60/40 split of revenues, and a lot of it depends on the junket rep and what their motivations are, whether they want to share in the risk, which they do under the more traditional Macao formula, or whether they want to be paid a commission, which is the formula we have chosen to take.

So it is hard for me to comment without knowing what is happening with the Wynn Resorts property.

We are very pleased obviously in terms of our ability to the compete against -- you know, this is a people a market that people said for years we were not going to be able to compete in, and we're doing excellently in that market, and the best is yet to come when we open the additional rooms at The Sands and when we open the Venetian Macao.

So it is a different model, Larry.

It is hard for me to comment directly on it.

Some reps participate in both.

Some prefer ours, and I'm sure there's some that prefer that other model.

How is the Cotai --?

Larry, I just want to add a couple of other observations to that.

One of the things that we had indicated when we started in this VIP market is we said that the macrotrends in mainland China were really trending in our favor, and that is the more freely tradable RMB of mainland China opening to the individual visitor scheme, etc., and that would affect the ability for the more traditional junket rep operators to maintain their hold on the marketplace.

So what has really happened -- two things have really happened.

As I mentioned, the increase in the IBS scheme.

The IBS scheme opened in the quarter just in the past two months to another approximately 50 million mainland Chinese out of five more cities.

I would also point out that as of February 1 they now allow mainland Chinese to bring $50,000 worth of RMB across the borders as opposed to $20,000 of RMB.

That is what I think is driving some of those VIP market year-on-year increases, and more importantly, that is what, quite frankly, allows the customers to deal directly with our rep network as opposed to dealing with what the traditional rep network is.

So it is a combination of being able to add more reps to the marketplace, as well as macro changes in the market that are really driving a lot of that VIP incremental revenue.

What I would like to say is that contrary to what was expected we have held our own against the new competition at the beginning of the competition's appearance, and we have significantly increased our high-end market share.

So it is not true that our competitor is leading the high-end of the market for American operators.

We believe we are, although we have not seen the figures, but our high-end income has grown so significantly that we find it difficult to believe that either the StarWorld or Wynn are running ahead of us, and we continue to aggressively penetrate that high-end of the market.

All right.

How is the Cotai ferry terminal fairing?

I know they are expanding it to a bigger terminal.

Does that mean a delay, or can you get a partial opening on time?

We're going to get a partial opening.

I don't know the -- originally the government said they were going to extend the opening time into '08.

We're getting ferries at the end of '07.

We will have several ferries by November and December that are 420 person ferries that carry twice as many people as the hydrofoils do on Stanley Ho's fleet.

So we have petitioned the government to open up partway, and our President of Asia, Stephen Weaver, told me just a few days ago the government has approved it, and they expect to open in time for us.

However, it is always a long way between a lip and cup, and anything can happen over there.

But we're going to see -- Bill and I are going over tonight, and we will see the chief executive this week we hope, and we will discuss that with him, and I will have a better answer next week.

So they increased -- wasn't it growing it from eight days to 12 is what they are doing?

Yes, I think that is the number.

Okay.

That is excellent.

One is 11.

Maybe more. 16 is what they are proposing.

16 now.

Okay.

So doubling it basically?

Okay.

And then just a little bit of guidance for the upcoming period, just the depreciation and option expense, corporate, any indications on that stuff?

Let's take that off-line.

Okay.

That is fine.

That is it, guys.

We don't give guidance.

That is our policy.

There is the answer.

It is tempting sometimes, but I think we have to follow our own policy.

All right.

Thanks, guys.

Good results.

(inaudible), Bear Stearns.

I have three questions, the first two for Brad.

If we look at Las Vegas or the Venetian in the fourth quarter, if we adjust for table hold, what would win per table per day be?

And then if I do the math for the Sands Macao in the fourth quarter, it looks like you benefited slightly from favorable hold percentage.

I was hoping you could help me with the math on that?

Yes, I could -- I don't have that in front of me.

I guess I was so busy reading your 140-page report.

But I would like to comment I thought your first report while 30-pages was very comprehensive and very detailed.

Thank you.

Of course, I don't agree with your conclusions.

I was waiting for that comment.

(multiple speakers).

But I thought it was very comprehensive.

I thought you did a very good job.

I guess the easiest way to do it, we're actually doing the math is, we feel we are advantaged by about $60 million of table revenue during the fourth quarter of this year.

In terms of that difference between 36.7 and 21%, so you take that and we obviously divide by roughly 130 table games, and that is what the advantage would be.

And then the net result of that would be about $82 million of table win divided by the same amount, so you can do that math and come up with that.

I don't have that stat in front of me.

And I am sorry, the second question?

Sands Macao, it looked like you had slightly positive -- (multiple speakers)

In the Sands we are right at then end of our range there.

We say our range is between 2.7 and 3.

The midrange is about 2.85 on the Rolling Chip program.

We came in at 3.1, so we were slightly above that.

If you took it down to the way we do our calculation, if you looked at the 3.1% to the 2.85 and what we have been doing is increasing the roll and saying that to generate that we would have had additional commission, it would have cost us about $5 million of EBITDA for the quarter.

If you think that 2.85 is the right number.

I mean that is our estimate.

That is what the market has been since the beginning I guess you would say.

But now we have had billions and billions of roll, and it may very well be that our experience will be above 2.85.

Great.

And then one final question to kind of put question for you, Bill and Sheldon, as well.

Either based on your conversation with the folks in Beijing or with this Project Coordination Committee, in terms of the tax rate on the profits on Hengqin Island, what are you guys being told or if you guys have -- I guess had any conversation since that Wall Street Journal article a few weeks back, if you can talk about that a little bit?

Yes, we have had conversations.

We have had conversation at the local level with the folks in Zhuhai, and we spent some time talking to our advisors in Beijing, accounting people and things of that nature to try to get some idea of how and where and what happens with this announcement.

All we can say right now is we are not sure exactly how in weather and when it is supplied.

It has been on the books since the early '90s, '92, '93.

They have either chosen not to enforce it or to enforce it selectively.

It may be enforced selectively in the areas where they feel the housing market is moving too aggressively and speculation is rampant in places like Shanghai and Beijing.

They may choose to either not enforce it or enforce it differentially in places where they want to incent a development, for example, in the Western part of the country.

So I think the best answer to give is that yes, we have had active discussions.

No one that we have talked to so far knows exactly how it is going to be implemented, and they say that more clarification will probably be coming out of the central government in terms of how it might be applied and whether it might be applied in a situation like Hengqin Island.

David Anders, Merrill Lynch.

Two questions.

First, with the depreciation in the quarter, was there any catchup, or is that kind of depreciation and amortization level for the current assets?

And then secondly, Brad, since (inaudible) did not ask you this, I will ask it, how about the sustainability of the Sands Macao margins?

I noticed those dipped a little sequentially.

Was there anything unique about those?

This is Bob Rozek.

The depreciation and amortization that you saw in the quarter, there was no catchup, so that is the current run-rate that we have in place.

As far as the Sands goes, a couple of things are happening with the Sands.

We have obviously mentioned that we've grown significantly in the premium end of the business.

Obviously that mathematically as it goes currently our mix last year of the rolling program is about 34% of our revenue.

On the table side, this year it was about 48%.

So again, a large growth in that area, lower margins.

That is one of the reasons that it has come down somewhat.

Additionally we find ourselves we are building a very robust organization over there with the opening of Cotai and the Venetian.

While some of that gets charged off the preopening, not everything does, and we are in it for the long-haul there.

So the Sands is perhaps taking some of the burden of development of world-class executives that we have brought in from General Electric, from Exxon Mobile, etc., etc.

So we are seeing some of that pressure.

And lastly, opening the expansion of the table games in the September timeframe, we're still working through that.

We were obviously working through that most of the fourth quarter in terms of how to optimize our staffing levels with that rather major expansion.

So I think you will see margins expand and get better as we get better at doing some of that work, but also, as we bring back a very profitable segment of that market which in the short-term we have not grown as aggressively like, and that is the higher end of the mass-market.

Celeste Brown, Morgan Stanley.

A few questions.

First, I know that it is tough for you guys to speak about Hengqin Island, but I think about it in the past you have talked about a groundbreaking potentially sometime in the first quarter of this year.

Is that still on track?

Secondly, [Taubman], which is one of most respected retail REITs in the world, has talked about joining the project next door to you guys on the Cotai Strip.

Do you see that as a risk in terms of your ability to lease out further space, or do you just see that as potentially something more positive for retailers seeing a company like Taubman sort of validating that market?

I guess those are two questions I guess.

One, I have spoken personally with Taubman a few months ago about joining with us on what we're doing on the Cotai Strip.

We basically said we don't really need it.

Why would we share whatever we're doing since we already have traction, already have a leasing group in place, etc.

I think it is a real complement to the idea.

People thought the idea was, I won't say a crazy idea, but not one recognized the value of what retail could be in Macao until we got enough traction to where somebody like Taubman is attracted to it.

So it does not bother us in terms of our leasing activity, and I think it is kind of a compliment I guess you would say and call it a way of validating the decision that 400 plus retailers have already made.

Let's just say imitation is the sincerest form of flattery.

But let me add something that most people just don't see.

We are going to have 20,000 hotel rooms and several thousand condominiums all connected through all weather air-conditioning connectors.

And all the 12 brands that Macao Studio City property, we call it the Asian TV site because that was what was originally projected for it, is going to be standing out there alone.

The retailers know that in our 3 million square feet of space they are getting the output of as many as 40,000 people.

Plus, we anticipate bringing in tens of thousands of more daily on busloads to come to shop 3 million square feet.

So if you were a shopper and you were staying in one of our 20,000 rooms, would you leave the property, walk down the street and go to another property simply because it is stand-alone and Taubman developed it?

I can assure you that the American developers mean little or nothing to Asian retailers.

So the fact that we built the second highest grossing shopping mall per sales per square foot in the history of the United States when we first opened the underground canals jobs at the Venetian gives us the bona fides that the retailers in Asia were looking for.

So I think that Taubman is a Johnny come lately because the operators of the property simply could not do it themselves, and we don't think -- yes, it is nice to be flattered, but we don't back even consider that competition.

No less serious competition.

Now we better ask the first part.

What was your first question? (multiple speakers)

We are reluctant to name dates again.

I mean this is a process, and we try to be as straightforward as we can about having never developed in mainland China before and having gone through so far a little over two years worth of process.

We keep on saying that we are pleased with the progress, but rather than necessarily putting dates on things, we're trying to keep the markets informed on the step-by-step indications that we get.

As I said, the latest one was January 10 when we actually got the Zhuhai governmental letter with the official red star chop on it indicating that they have appointed the committee that specifically addresses our master plan for that particular site.

So rather than us passing on to you what we're necessarily being told are the next steps, we will pass on to you as the next steps are confirmed.

So the next communication probably would be approval of master plan if we get again an official sealed communication on it, we will mention that.

And then the next step to that is the actual parcelized process, and that is where the groundbreaking would take place on one of those parcels.

But again, we will be talking about that as we receive the confirmations going forward.

Great, thanks.

And just one more question on the retail since we are on the topic.

How much of the retail do you expect to open at the Venetian with the casino opening, and then when do you think you will have the full square footage up and running?

I know it is difficult to get it all -- with all the -- with so many square feet all up at the same time.

We opened the Grand Canal Shoppes jobs with fewer than the 60 or 70 shops that eventually fully opened in Las Vegas, and I will let Brad tell you about it.

Yes, I think to answer your question, it is a lot of square footage to open at once, and what we are looking at doing, a leasing team over there is focusing on one of the canals zones, the big wow space in perhaps (indiscernible) square, and opening what is still significantly larger than the current Grand Canal Shoppes here in Las Vegas with the gondola rides, the streetmosphere, etc.

So that is where our focus is.

And then the opening really in three phases with the third phase being completed in the fall.

So it is not a long time between the phases, just the practicality of getting that many tenants into that building in the time available and realizing that we can ramp that up, that if we opened retail space that in and of itself is larger than that which exists in Las Vegas with the amenities of a gondola ride, with the amenities of the streetmosphere and, of course, retail brands, we think that will be sufficient to open the property and, like I said, it would be ramp-to probably over a four to five-month period.

Robin Farley, UBS.

I have got three or four questions.

First, for Hengqin, it had sounded like there was initially going to be sort of one final approval that was forthcoming, and it sounds now like you were talking about after the master plan then there would be approvals for a series of land grants and then approvals for each piece of construction on there.

That sounds like maybe it pushes the timeframe out over the year or maybe even a several year period?

No, we don't -- go ahead.

Do you want the questions answered one at a time?

Sure.

All right.

We --

Well, the one I guess you would say that we would is the adoption of the full master plan.

It always was anticipated, as I had indicated before, that we will take this thing and develop it over about a 10-year period in phases.

So I don't think it is really a change.

It is just the key I guess you would say of macro, shall we say step is that the master plan itself is adopted up and down the approval line.

And then right behind that would come the initial stage.

We ourselves split this thing into several different stages, so I don't think that is really a change, and I don't think it really changes the timing process in terms of moving forward.

When you think of the fact that we plan 80 million square feet or at least that is what is allowable, I cannot imagine any one municipal government the size of 1.5 million population town like Zhuhai approving and giving final approval to build permitting 80 million square feet simultaneously.

By virtue of its scope, it has to be done in many different phases.

Okay.

And then can you talk about the timeframe for starting to sell the Four Seasons apartments?

I assume that is still on track for an April '08 opening, and so what would be the timeframe for selling those to have that complete in advance of the opening?

We're hoping to put on an aggressive push.

We're going to open the Four Seasons I think in the first quarter of '08.

The Four Seasons property itself we are forecasting the first quarter of '08, and then the condominium project is about six months behind that.

Obviously it is a large structure.

It is 39 stories tall, so it takes us a lot longer to get to the top of the Four Seasons.

Currently we are under construction on our previous center in Hong Kong as one of the pre-marketing tools.

So similar to what most major sellers of these types of products have come is a place that you can show actually what you're going to buy.

That is currently being developed in one of our buildings in Hong Kong (multiple speakers) -- Lippo Tower, and I'm not sure exactly of the timing.

It is very soon to get done, and that would really probably be the key launching of the sales of that product.

So the release of condo sales would be third-quarter '07?

Could you speak a little louder, please?

Sure.

So the condo sales would actually begin in the third quarter of '07?

I think we will see ourselves starting that probably in the second quarter.

Okay.

Great.

And then looking at the Macao property, I realized there was a greater mix of VIP revenue.

But even when you adjust for that mix, it seems like the margins were maybe a little bit lower than we would have expected, the EBITDA margins.

And you talked about building up the management and things.

So I guess adjusting for the mix change, are you expecting margins to stay at this level or to move up from what we saw in Q4?

I think two things.

If you look at the expenses in Macao, it is pretty simple.

It is down to taxes, commissions and payroll, and that is what -- that is where it all resides.

That is almost all our expense.

The commissions are going to follow the junket programs, and they will affect our margins.

Taxation is constant no matter what form of revenue it is obviously, and our payroll is really, as I tried to explain, is really two components.

One is the component that relates to developing infrastructure, developing executives and developing the overhead, let's say, to grow the company, not only at The Sands but also at the Cotai site.

And the other is getting ourselves efficient in terms of the payroll on the mass floor.

Things that you run into in Macao that did affect us in the quarter is getting efficient on the mass floor is important because we have tip subsidies and things that we pay in order to round out the salary of the Macao Casino worker.

So those are things that we want to make sure our payroll is reflective of the volumes on the mass floor, and we're working towards that.

And at the same time, we're kind of in a funny situation because, as you try and control that expense, you realize that right around the corner you're going to be opening a very significant property in Cotai.

So it is my belief that in the short-term that we may have -- I would not say continued pressures, but we're going to have -- we are not necessarily going to be in a mode where we try and trim costs just to expand them again in the June/July timeframe as we open the Venetian.

So I think my sense of it is that most of it is going to be driven by mix of business in the short-term.

We're not going to necessarily, while we try and control our costs, we're not going to go into some cost-cutting mode as we rapidly expand the company in the next four months, five months.

Okay.

Great.

Jeremy Cogan, Banc of America Securities.

I have got a few questions for you on a variety of topics.

First, from a big picture standpoint, as we take a look at the gaming revenue numbers coming out of the government on Macao and that VIP business grew 61% I believe it was for the fourth quarter, the mass, which is growing 21%, which is a big number but it is obviously down from the growth rate we saw earlier in '06, are those apples to apples comparisons?

I remember when you guys opened up the Paiza Club, and suddenly some of the VIP business of before was starting to be reflected as high-end mass business in your casino.

So I'm wondering are we having a reverse effect now as others have opened into the market, or is that really an apples-to-apples year-over-year growth, and are those growth rates in line with what you were anticipating?

Well, first of all, the mass business is going to be reflective of the travel patterns on a relative basis quarter to quarter.

Third quarter is a better mass quarter than fourth quarter simply because of the way the summer vacations are and the way people travel.

So I think we're going to see a reasonably steady increase in mass play as more people come to Macao.

So that one I think you can look quarter to quarter, year-to-year, and I think you will see it growing approximately in step with visitation numbers.

The real variable is the whole percentage, quite frankly, on the VIP market.

So you will have bounces up and down.

I think fourth quarter, if I'm not mistaken, fourth quarter of '05 actually was a reduction year-on-year over fourth quarter of '04.

So you have a real magnified effect of an increase in VIP in fourth quarter of '06/'05.

I also mentioned to you the macro things affecting a VIP play out of mainland China.

People are allowed to bring more money out of mainland China and being able to convert it more easily and then the more opening of the IVS cities.

Generally those individual visit cities are further away from Macao; therefore, people more than likely are getting an airplane to fly to Macao.

Therefore, people are probably more likely to have more affluence than the masses traveling out of Guangdong Province, Hong Kong or close in place like [Fuchong] Province.

So I think those are the factors that will affect it.

I think you will see VIP play bouncing up and down more so than the mass market.

But again, the mass market is seasonal, although I think you will see double-digit growth year on year, but seasonally more amplified in a quarter like the third quarter when more people are traveling.

I think just looking at the numbers I have in front of me for the Macao market, growth on mass I think it plays right out, is that July, August and September, the December travel periods they grew 29, 22 and 50%.

October Golden Week grew 54% and then hit kind of a low into November and December.

You are down 10, 11% ranges.

I think you will see it bounce back this month in February.

We have got Chinese New Year.

You will see a big growth rate because now this additional capacity is onboard, during those peak seasons that is where the capacity is really going to be taken full advantage of, including our own place.

You have events, quite frankly, that are interesting but dinosaurs.

I guess the best one is the Macao Grand Prix, and as interesting as it may be, whether the Macao Grand Prix takes place, no one can move around the city.

So the growth rates are really stagnated by the fact that the streets are closed down for the Grand Prix race.

Something that generated incremental revenues when Macao was a sleepy little place now affects its ability to move the thousands and thousands of tourists around during the 14 days that it represents.

That is helpful.

And maybe just one quick follow-up on that.

Are you seeing or are you hearing of if they are not playing in your casino, players coming in to Macao, VIP types, that are new to Macao but that are also not from China, that Macao is becoming more of a regional draw to the higher end community at large?

Well, I think we have seen that all along, particularly places like Thailand and Japan and other places.

Yes, as it becomes more of a destination, I think this is just the beginning of the tip of the iceberg.

And my part of the presentation where we talked about the tour travel people and the number of tour and travel operators in the region that are more interested now when you get thousands of rooms in a place like the Venetian available for them for overnight trips, and I think the initial reaction, for example, to Wynn and the occupancies that have been run by Wynn only limited by the limited number of rooms that he has has really affected the ability for that market to then leap into that next layer I guess you would say of regional market as opposed to local market.

I think that is just the beginning of what is going to happen as we introduce those macro projects on the Cotai Strip.

Okay.

And then on a separate topic, back to the retail in Cotai Strip, can you give us an update as to where we are with respect to the potential monetization of that opportunity and I guess the many forms that it could take?

I missed the beginning of the question.

Monetization of retail.

Of retail?

Yes.

Where are we in the process?

Well, you know, as I said, the good news is it looks like the base rents as we come to the end of the process, the mall marketers over there in Asia call it the stinger.

That is the last 10% of the space where they really start pushing through the high per square foot minimums, and then as we see validation whether it is Taubman or others and as we see that the tour travel people are interested in coming for shopping and dining and entertainment, the monetization of that is really going to be driven I think by the percentage of rents.

I mean the initial monetization if you just were going in the front door and were not looking to maximize would be $104 a square foot times the square feet.

But the real ability to monetize maximum monetization is when the percentage rents come in with a successful mall and that sales per square foot and rentals per square foot go to 200,200 plus like they do in Hong Kong.

So I think we are patient enough with the base rents the way that they are, and we are confident enough in the overall master plan that when the percentage rents kick in that is when we begin to start thinking about how do we monetize this thing in a maximized way.

I think that there will be an opportunity for Asian buyers that will consider this the trophy -- the most premium of trophy properties that will certainly want to get ahold of this to go ahead and buy on the basis that we may be able to sell here in Las Vegas on, and that is a true-up after two and a half years.

If we don't see that reception in the market to pay a price based upon base rents now and a true-up in two years, we're just going to wait until it trues up.

And there's no sense of urgency because once we have got that income, the value is there and we can pledge that anytime if we need any money.

So it is not as though we have to sell it.

Clearly our strategy is to sell noncore retail and still keep the benefit from what we have sold.

Once we establish the mall, it is part of the integrated resort.

That is when people come.

We're not selling the mall.

We're selling the cash flow from the mall.

We're going to maximize the return on that, and we feel that the cap rate that is justified is going to be hopefully a record-setting cash rate -- cap rate.

Fortunately we are not in a position under no pressure.

We are not desperate for anything.

We're just going to wait and we're just going to see what it's going to take to get the best.

But I think that some of the buyers will want this quality trophy property to go along with our terms.

As a last question if I may, I recall that at the last conference call, I think, Bill, in your prepared remarks, you mentioned that I think The Sands would be the first into Hengqin Island.

I was wondering if you do think that there will be additional competition.

Obviously I know this is a fluid situation.

Will there be maybe not competition but other operators, developers in that market?

How long would that potentially take?

Who could they be theoretically?

Would it be competition for you as you were talking about before?

Would it be complementary potentially as well?

How should we think about that?

Well, think of it this way.

Macao total is about 32 to 36 square kilometers depending upon how much additional land that they have added.

Hengqin Island is about 85 square kilometers.

So it is three times almost the size of Macao.

So it's a very large Island.

Secondly, the portion of the Island that we have been on is the prime portion of the island that faces Macao, Zhuhai and borders the Cotai Strip, borders the Cotai development process.

So the rest of the property is significantly south of that and does not have the synergy of the primary markets.

So that is my qualification.

You cannot see it from Cotai.

We're the only property you can see from Cotai to the best of our knowledge.

The developers there including, Lui Che Woo, Stanley Ho and others have tried to develop something on Hengqin Island for 20-someodd years.

We are gratified that we started first, and we have a headstart and that the master plan is just about to be approved through the committee that was approved January 10.

Others will have to go through the same process behind it.

I think I have a shorter development timeframe since we have kind of paved the way about how the whole island works because we worked with them in terms of how the different parts of the Island, what functions that will fulfill.

Some parts of the island are designated for things like housing in the further Southern part of it.

But the part of the island that we wanted to focus on was the part that really developed tourism, convention business, second homes, transient homes and I mean the things that would provide, as Sheldon says, the housing support for the Cotai Strip and the addition to the, call it, the regional economy so that the Zhuhai also, as the mainland Chinese address, would also then be advantaged by the development on Hengqin Island.

So it is a long-winded answer to the fact that yes, there will be other developers.

We know that Stanley Ho and his organization has bid.

We know that Lui Che Woo has been interested out of Hong Kong, and we know the [Loy] family from Galaxy has also been interested in developing there.

But we expect to be the first ones.

We will be the first ones to have a master plan approved and the process in development.

But I think it is a matter of months perhaps as long as a year or so behind it that the next developments might be approved.

Ladies and gentlemen, we have exhausted the time set aside for questions.

At this time I would now like to turn the call back over to Mr. William Weidner for closing remarks.

Mr. Adelson wants to make some closing remarks.

I just want to make one statement that was brought up once or twice about the desirability of the 40/40/20 rate to pay the junket reps or the program we have which is 1% and after a very high number a very high rolled requirement threshold.

We pay 1.1 with the .1 coming on in-kind compensation.

If you do the arithmetic, you will find that the 40/40 -- both formats are even at a 2.5 rate.

But since the experience shows we're getting much closer to a 3.0 rate, consistently then we are closer to 2.5.

The advantage on our program brings us down to -- our costs down several percentage points -- that is several hundred basis points below 40.

When somebody who is doing the 40/40/20 rate is stuck at 40 and we come in below -- we become several percentage points below so that we can increase our profit percentage.

It is easy to do the arithmetic.

Just check it out.

With that, that concludes our conference call for today.

We appreciate your attention and look forward to communicating many more accomplishments in the quarters ahead.

Thank you, again, and have a good day.

Thank you for your participation in today's conference.

This concludes your presentation.

You may now disconnect.

Good day.