拉斯維加斯金沙集團 (LVS) 2008 Q2 法說會逐字稿

Good afternoon.

My name is Christie and I will be your conference operator today.

At this time, I would like to welcome everyone to the Las Vegas Sands Corporation second-quarter 2008 earnings conference call.

(Operator Instructions).

Thank you.

I would now like to turn the conference over to Mr.

Bill Weidner, President and COO.

Sir, you may begin your conference.

Thank you, Christie, and good afternoon, everyone, and thank you all for joining us today.

On the call with me here today are Mr.

Sheldon Adelson, our Chairman, who is joining us by teleconference from Macao; Brad Stone, our Executive Vice President, who is also joining us by teleconference; Rob Golstein, President of The Venetian Las Vegas and The Palazzo; Scott Henry, our Senior Vice President; Dan Briggs, our Vice President of Investor Relations; and we are all here in Las Vegas.

Before we begin, I need to remind you that today's conference call contains forward-looking statements that we're 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 the anticipated results in those forward-looking statements.

Please see today's press release under the caption "Forward-looking Statements" for a 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 a reconciliation of these measures to the most comparable GAAP financial measures are included in the press release.

Please note that this presentation is being recorded.

By now, you should have all received our press release detailing our financial results for the second quarter of 2008.

Our agenda for this call will be as follows.

I'll begin with some summary observations and spend a few minutes on Las Vegas.

From there, we will turn our attention to Macao and spend some time on current operations, including the initiatives we have in place to grow cash flow at The Venetian as it continues to mature and approaches its one-year anniversary; and on our development pipeline, as we prepare to open our second Cotai Strip integrated resort, the Four Seasons Macao, in less than a month.

I will then make some closing remarks and then we will move on to your questions.

In Las Vegas, we delivered a solid performance in a challenging economic environment.

The Palazzo's ramp-up process continued throughout the quarter, as we introduced additional features and amenities, including the Broadway hit, Jersey Boys, and additional retail shops and restaurants.

The Palazzo's adjusted property EBITDA was approximately $35 million in the quarter, up from around $20 million last quarter.

Turning to hotel operations, our hotel ADR and RevPAR statistics were solid, with occupancy rates for both The Venetian and The Palazzo running north of 90% and ADR for both properties exceeding $240.

The Palazzo suite product has been very well received with REVPAR up 17% sequentially.

We are responding to the softer FIT market in Las Vegas by pursuing more group rooms, particularly in the information technology and pharmaceutical sectors, which appear to be less impacted.

Looking at the two properties as a whole, second-quarter gaming volumes were up across the board, reflecting our now significantly larger asset base in Las Vegas.

Table games volume for the combined Las Vegas properties are up 45% in the second quarter compared to last year's second quarter, while slot handle was up 63% compared to last year.

We continue to see a steady ramp throughout the quarter as The Palazzo's gaming business continues to build as more of the property's features, including additional high-end suites, have come online.

The strong gaming volume trend has continued in the month of July with table game volumes up 58% and slot handle up 61%.

We're on track for our best month of slot play in Las Vegas since the opening of The Palazzo.

With The Palazzo ramping to full steam, we're extending our successful convention-based business model to a far larger 7100 room asset base.

Hotel operations in July remained strong.

Through the first 29 days in July, The Venetian has achieved 91% occupancy in July, while Palazzo has achieved 95% with occupancy at a blended rate of about $210.

We consider that pretty good performance in July in this marketplace.

That performance illustrates the flexibility of our service offering, the attractiveness of our product itself and our ability to effectively respond to evolving market dynamics in Las Vegas.

We are, however, ever mindful of the challenging economic environment that we are in, which could continue for some period of time.

Given our expectation, the economic environment in Las Vegas may remain challenging for an extended period.

We're focusing on tightly controlling our cost structure.

Our original Las Vegas master plan was designed to deliver between $40 million and $60 million in operating efficiencies across our two Las Vegas properties.

In the current environment where we push even harder for efficiency, our current plans reflect targeted efficiencies between $70 million and $90 million between the two properties on an annual basis, and we're looking to trim headcount by about 1500 by attrition, not by layoffs.

Looking ahead, with the largest destination resort in the world now complete with a proven business model that exhibit the agility and flexibility to respond to evolving market dynamics, we remain confident that our unique Las Vegas platform with its resident efficiencies, inherent flexibility, and broad asset base will continue to perform well in today's challenging marketplace.

In the future, Las Vegas, when the Las Vegas and the US consumer economy eventually inevitably recover, this high-quality product is positioned to perform extraordinarily well.

Let's now turn to our Asian operations.

Our progress in establishing the Cotai Strip in Macao as Asia's Las Vegas moves steadily forward.

As The Venetian Macao approaches its first-year anniversary, we're now making final preparations for the opening of our second destination resort on the Cotai Strip, the Four Seasons Macao, which will open about four weeks from tomorrow on August 28.

The shops at the Four Seasons Macao feature more than 100 of the most prestigious brand names in the world, including Louis Vuitton, Hermes, Gucci, Cartier, among others, opened last Saturday in advance of the opening of the hotel.

More than 100,000 people visited The Venetian Macao on the first day of the operation or the opening of the ball.

Another 100,000 visited The Venetian last Sunday, an all-time record for the property for a Sunday.

In addition, the first permanent Cirque show in Asia, Zaia, recently began preview performances in preparation for the world's premiere on August 28.

Looking further ahead, we're now less than a year away from the opening of the first of the destination resorts on the Cotai Strip on sites 4 and 6, directly across the Cotai Strip from The Venetian Macao and the Four Seasons Macao.

These destination resorts will feature hotels bearing the St.

Regis, Sheraton, Shangri-La, and Traders brand.

In addition, our Singapore development moved steadily forward for the opening in the 2009.

So clearly, execution on the development front remains steady.

We will address our development pipeline in greater detail in a moment.

But first, let's spend a little more time on the current period operations in Macao.

As we mentioned in our last quarterly conference call, with The Venetian Macao beginning to mature, we're now approaching its one-year anniversary.

We would naturally have the opportunity to focus more of our attention on current operating performance and the generation of incremental cash flow from the property.

We laid out for you three initiatives last quarter, on which I would like to provide an update.

Initiative number one, better management of our VIP business.

Our objectives here include growing our rolling volumes and VIP market share by implementing more competitive commission structure, developing more direct play, and where appropriate, prudently providing additional credit.

The ultimate goal of these initiatives is to generate more cash flow from the VIP segment of our business.

While we're just getting started in the implementation of these strategies, early results are promising.

We've experienced growth both in rolling volume and cash flow from this business segment in the quarter ended June 30 compared to the quarter ended March 31.

Those positive trends have continued in July, which is on track to be our best rolling volume since last November at The Venetian and the best rolling month in over a year at the Sands.

Initiative number two, grow our mass table and slot business, particularly by using our ferry services to drive more visitation to the property.

While there are some bright spots in this area in our results for the quarter ended June 30, including significant growth in slot play and healthy non-rolling table drop, which is easily the largest in Macao, our real near-term opportunities are clearly beginning to crystallize as we increasingly utilize our ferry services and soon-to-be 434 weekly sailings to target the most profitable gaming customers and bring them to the property.

After a long ramping-up period, after weathering numerous administrative obstacles and delay, our CotaiJet ferry services are now clearly beginning to gain traction in the marketplace.

It took some time, but as customers have been introduced and have become familiar with the service, particularly the advantage of avoiding long immigration lines on the Macao Peninsula ferry terminal, average passenger counts have increased substantially.

In the current month of July, the ferries have been running nearly 70% of capacity on average, representing more than 15,000 passengers a day.

Last weekend, our ferries ran over 90% capacity, carrying over 20,000 passengers a day.

This compares to an average of only 2500 passengers a day in May and only about 3500 passengers a day in June.

Weekly passenger volume has increased every week since we expanded the frequency of our service in early June to 56 sailings per day.

We are set to expand our schedule again on Friday night.

We will add our first sailings between the hours of 11 PM and 7 AM.

These new routes will take our total daily sailings to 62 with a daily capacity to nearly 25,000 passengers.

Now that our ferry services are gaining traction, with the opportunity to begin to target these services on our more Cotai Gold Club and Ruby members and the link those services to loyalty programs for slot and table play.

In addition, we're in the planning stage of additional routes to other transportation hubs and major cities on the Pearl River Delta.

Ferry services affect every segment of our Venetian Macao facility.

VIP from a regional international markets, linkages to Hong Kong and Hong Kong international airport, mass tables and slots, particularly high repeat convenience, Hong Kong mass players, FIT rooms business, meetings, conventions, and trade show for the convenience of the delegates to access the marketplace, arena events, shopper convenience for retail sales and so on, all critical for maximizing the synergies of our integrated resort amenities.

This becomes particularly important as we add more reasons to come directly to Cotai, the Four Seasons and the upscale shopping brands of the shops at the Four Seasons in Macao and the Cirque show, called Zaia.

Initiative number three, control our costs.

We have now begun to implement a plan that will take between $60 million and $70 million of annual operating expenses out of our cost structure at The Venetian Macao and the Sands Macao.

We've already begun to see early results from the implementation of this plan reflecting in our second-quarter results, particularly at The Venetian Macao, and expect to realize significant additional cost savings as we move through the remainder of the year.

We will continue to exercise our plans and expect to continue to deliver results on those most important initiatives into the future.

Our six factors of success we established at the opening of The Venetian Macao as vital to our long-term success remain in place.

We expect each of these elements will be enhanced, both by the growth in our ferry service, and the addition of the Company's second resort on the Cotai Strip, the Four Seasons Macao.

The first factor of the six is visitation.

Over 20 million visitors have experienced The Venetian Macao since it opened approximately 11 months ago, including over 100,000 visitors last Saturday and Sunday.

July visitation at The Venetian is on track to be up over 28% over June.

This significant visitation increase is directly correlated to the sixfold increase in ferry passengers utilizing our CotaiJet service to visit the Cotai Strip.

Second factor, hotel performance.

It remains solid, with ADR coming in at 225 for the quarter, occupancy reaching 80.2%, and REVPAR of about $180.

In July, hotel occupancy is tracking north of 90% with ADR north of $200 and REVPAR north of $188.

Item number three, gaming volumes.

Our VIP business is moving in the right direction with rolling volume increasing 13.6% sequentially in the second quarter.

The total cash flow generated from this business also is increasing sequentially.

As we begin to prudently grant more credit and as we add our upscale casino at the Four Seasons, we expect to continue to grow both our share of this business and our total cash flow generated from it.

Mass table volumes have been solid, clearly the largest in the Macao marketplace, reflecting the acceptance and appeal of Venetian Macao.

After a seasonally weak June, July is tracking to be our strongest mass gaming month in the history of the property with slots and not rolling play both on pace to set record levels of volume.

This increase in play again is correlated to our increase in CotaiJet ferry passengers and visitation to the property.

Next as far as entertainment offerings, they have worked.

The have driven both visitation and incremental play, and they are set to be expanded, beginning with the opening of Cirque's Zaia in a custom-built theater at The Venetian Macao, Cirque's first permanent show in Asia overall.

Our Asian entertainer performances, including Jay Chou, Hacken Lee, Eason Chan, Aaron Kwok, and others have proven to be successful in drawing visitation.

And for certain of these acts, we've exceeded 100,000 visitors a day on the day of their performances.

Team USA is now in Macao, and we're flooded with press.

They're making their appearance in the next few weeks as they make their final preparations at our Cotai Arena, for competing in the 2008 Olympic tournament in Beijing.

A combination of these kinds of acts has driven visitation interest and brand awareness for the property.

Our group meetings and convention business after a strong start, continues to grow with significant multinational groups, hosting multiple follow-on group meetings and our first 11 months of operation.

The business is seasonal, so there are naturally weaker and stronger months and periods, and most shows take many years to ramp and not even every show will be an immediate success, particularly as the economy of the Guangdong Province evolves up the value chain in comparison to its neighbors.

The low-tech manufacturer relocates to less developed economies in the region, but overall, the trajectory remains positive.

On the retail front, with 272 stores and over 620,000 squares feet of retail space now open in the Grand Canal Shoppes and the opening last Sunday of 90 new luxury stores at the shops at the Four Seasons Macao, the Cotai Strip is clearly taking shape as a premiere shopping destination.

The luxury brands at the Four Seasons will extend and complete our retail offering to the luxury market segment.

This will contribute to increased visitation to the property and should be accretive to the stores in the Grand Canal Shoppes themselves, by drawing wealthier customers to the visit and by increasing the foot traffic to the Grand Canal Shoppes.

So, as we close in on the one-year anniversary of The Venetian Macao, it's clear that each of these indicators is evolving and progressing and each one is moving in the right direction.

So, what will drive our performance higher in the near future?

First, more frequent CotaiJet ferry service from Hong Kong Harbor to the ferry terminal at the foot of the Cotai Strip, including initially moving into 30-minute intervals in the evening hours between 6 PM and 11 PM, then to 15-minute intervals at peak times, followed by service from the Kowloon Ferry Terminal in Hong Kong.

We are in the planning process now to provide service to additional location in the Pearl River delta.

These additional services will increase visitation to Macao and to the Cotai Strip, provide a more satisfying convenient visitor experience for shoppers, arena and event attendees and convention tradeshow and corporate meeting delegates.

We initiated the ferry service in order to provide a public transportation infrastructure component that is vital for the visitation to Macao and the properties being developed on Taipa.

As our ferry services have ramped up, we've seen a direct correlation between those services and visitation to the Cotai Strip.

Visitation of The Venetian Macao itself is up by about 28% June to July, and incremental visitor counts are contributing what will likely be the biggest mass drop month and our biggest slot handle month since the opening of the property in August of last year.

As we head into August of this year with passenger levels and loads reaching 90% on the weekends, additional savings being added, additional routes on the way, we feel confident in the ability of the ferry service to deliver incremental visitors to the Cotai Strip.

Looking ahead as visitation continues to increase and our ferry services run at very high occupancy rates, we have increasingly focused on efforts to drive mass table volumes and slot revenues by fine-tuning and expanding loyalty programs that reward our most valuable customers with transportation and other amenities.

With our ferry service now up and delivering visitors to the Cotai Strip, the Shops at the Four Seasons recently opened, the Cirque show, Zaia, now in previews and the Four Seasons Macao set to open in less than a month we feel confident in our ability to utilize the critical mass of these assets to drive mass table drop and slot revenues increasingly higher at The Venetian Macao.

The opening of the Four Seasons Macao in just over four weeks from tomorrow will take our service offering on the Cotai Strip to the next level and provide the most discriminating customer, the one who might prefer a more intimate experience than we offer at The Venetian, together with the personal service and attention to detail that is synonymous with the Four Seasons brand on the Cotai Strip an additional amenity for their visit.

The Shoppes at the Four Seasons Macao will extend our retail offering to the luxury segment, distinctly positioning the two properties that should allow them to present two experienced visitors to the Cotai Strip and appeal to different segments of the marketplace.

While we increase visitation and broaden our service offering, we'll continue to execute our plan to control our cost structure so that the growth in revenues increasingly makes it through to the EBITDA line.

So, that's the update from an operating perspective.

I now want to move on to update the pacing of our development activities.

In Bethlehem and Singapore, we're progressing on pace and on budget to open these projects consistent with our previous expectations.

Sands Bethlehem is on track to open in less than a year in July of 2009 while Marina Bay Sands in Singapore is on track to open December of 2009.

In Macao, we remain on track on sites 5 and 6.

The integrated resort complex across from The Venetian Macao, Phase I which will feature the Sheraton, the Shangri-La, and Traders brand, is on track to open summer 2009, while Phase II, which features the St.

Regis brand, is on track to open by December 2009.

We continue to make great progress on sites 5 and 6.

It is while that continues -- it is clear that the pace of approvals for development activities throughout Macao has slowed substantially.

Looking ahead, we anticipate further delays as Macao government takes strides to get its arms around the development implementation and enforcement of existing and proposed gaming regulations.

While we wholeheartedly support the government's efforts in this area, we understand that one byproduct of those efforts is that the approval process for new developments will likely remain slow until the current administration is able to sort through these matters.

We will of course continue to do everything in our control to deliver our announced developments as expeditiously as possible.

As I said before, sites 5 and 6 remain on track to open their initial phase in mid-2009 and completed by the end of 2009.

For sites 7, 8, and 3, however, we have yet to receive final approval of our submitted designs.

We have not received to date the necessary permits to begin the foundation work.

We do, of course, expect to receive final approval for our designs and permits, allowing us to begin construction in the near future.

Once we do receive final design approvals and the requisite approvals to begin foundation work on those sites, we expect the time to actually construct these things to be between 30 months and 36 months.

So, the combination of approval slowdown and our ability to be able to access the sites have affected our schedules somewhat, but our 30 to 36-month construction cycle remains intact.

Let me now just spend a few moments to provide an update on ongoing the financing process of the Macao developments.

As you know, our strategy for the funding of the development of the Macao properties has always been on a phased approach.

In the benefit of the phased approach is that the cash flows from each completed phase can support development costs associated with the next phase.

As we prepare to open the Four Seasons Macao and to turn our developments focused principally on sites 5 and 6, we're now entering the next phase of the funding cycle.

To kick off the funding of the next phase of the Cotai Strip development, we'll focus on securing the funding we need to complete sites 5 and 6.

And then to continue to advance sites 7, 8, and 3, we have recently posted a bank due diligence meeting in Macao, which was attended by about 180 principals, representing approximately 40 banks from around the region and the world.

In this round of funding, we intend to raise the total of approximately $5.25 billion, primarily, if not entirely in the Asian bank markets.

The proceeds of the financing will refinance our $3.3 billion Macao credit facility, allow us to complete the construction of sites 5 and 6 on the Cotai Strip and continue design and development work on sites 7, 8, and 3.

The marketing of the transaction is now underway and we are making good progress.

We're utilizing the formula we recently employed to raise capital in Singapore by inviting significant participation from the regional Asian banks, European banks, and with a focus on the Asia marketplace and a handful of institutions domiciled in the United States.

We're targeting to fund this new credit facility this fall.

Again, primarily, from Asian banks and European banks focused on the Asian markets.

Turning to our funding strategies overall, I want to add that we regularly evaluate as a matter of course the funding needs for the Company overall and we regularly evaluate and are currently evaluating various strategies that would put additional of liquidity in place at the corporate parent; both to support our domestic credit facility, should that become necessary at some point in the future, and to provide additional liquidity and flexibility at the parent level to support our current and future development plans.

As we evaluate various strategies, it's important to recognize that we only have two significant domestic capital requirements.

First, The Palazzo condo tower, with the remaining costs to build of approximately $400 million, which is scheduled to be completed in the first quarter of 2010 and Sands Bethworks, with the remaining cost to build of approximately $500 million, which is scheduled to be completed in July 2009.

We believe we have tremendous flexibility in how we fund those two projects, should our current domestic credit facilities and other funds currently available prove inadequate to fund those projects to completion or should we choose to supplement that domestic credit facility with additional liquidity at the corporate level.

Turning to Singapore, as I said a moment ago, the construction of the integrated resort at Marina Bay -- the three hotel towers are now visibly rising on the waterfront at Marina Bay, and we're on track to be topped off in less than a year.

We've begun leasing retail space at the Shoppes at Marina Bay Sands and have reached commercial terms of 195 stores, representing approximately 280,000 square feet of retail space, at an average annual base rent of US$453 per square foot.

We realize these specific locations are likely to represent very sought-after retail space, but we're enthused about the reception of our retail offering, the commercial terms that we've been able to agree to date and the future potential of this unique asset.

Once complete, the Marina Bay will become an integral component of Singapore's commitment to becoming South Asia's premier business and tourism destination.

At its current pace, Singapore is set to achieve a record number of visitors for 2008.

Its hospitality industry has been strong with room revenues growing at 22% and average daily rates growing at 30% compared to the first six months of last year.

Additionally, Singapore's average length of stay for 2008 is 3.9 days, which is up nearly 9% over the last year.

With events like the first-ever Formula One night race to be held this September that reflects Singapore's dedication to utilizing visitation to drive its economic growth.

So, our investments at Marina Bay Sands are perfectly positioned to help Singapore reach its goals and perfectly positioned to be extraordinary investments.

Before we go to Q&A, let me now throw out a couple of concluding thoughts.

First, in Las Vegas.

The Venetian is performing well in a somewhat softer Las Vegas market overall, and the 3,068 suite Palazzo is ramping up to full power as all of its amenities come online and continue to ramp.

On the Macao Peninsula, The Sands continues to be the Peninsula market leader in mass gaming volumes despite very large increases in high-quality competitive capacity.

We will continue to work to capture additional operating efficiencies and focus on maximizing the Sands cash flow returns.

Finally, on the Cotai Strip, The Venetian is just beginning to realize some of its tremendous potential.

We will remain focused on the three fundamental objective here -- managing our VIP business, growing our mass table and slot play, particularly by expanding our ferry service, and controlling our cost structure.

Success in those three areas should drive significant increase in adjusted property EBITDAR.

We'll also realize synergies from the opening of the Four Seasons four weeks from tomorrow as we continue to construct the Shangri-La, the Sheraton, the St.

Regis and Traders and seek additional approvals to continue our development on the Hilton, Conrad, Fairmont, Raffles, Swiss Hotel, Intercontinental, and the other remaining properties on the Cotai Strip.

Critical mass on the Cotai Strip is building as we speak.

By the end of 2009, there will be nearly 15,000 international standard rooms on Cotai, more than 4 times as many as exist on the Macao Peninsula today.

The bulk of the Peninsula investment is now completed.

The focus of the future development in Macao will be on Cotai.

Those factors, together with strong market growth overall, the eventual backstop of supply by government regulation, expanded infrastructure, including conditions on the CotaiJet ferry service, paint a compelling picture for the future of our Cotai investment.

We remain confident that the execution of these plans, growing our cash flow, and executing our business development plans will lead to superior returns for our shareholders.

And with that, we will open the lines for Q&A for anybody that has any questions after that elongated presentation today.

Thank you.

(Operator Instructions).

Felicia [Hendrix], Lehman Brothers.

Sheldon, someone told me it was your birthday this week.

So, if that's true, happy birthday to you.

Thank you very much.

A few questions for you guys.

One is, I know it's very early days, but are there any mall statistics that you can give us following the opening of the Four Seasons Mall?

For example, has it improved traffic at The Venetian Mall or are you getting any kind of indication of that yet?

That's too early.

We haven't opened -- it just opened for advanced viewing.

And I got calls in the last couple of days from some friends that were here that say that it's the most beautiful mall they've ever seen.

I think the -- it's too early.

It just opened preview for a day or two ago.

I mean, today is what, Wednesday?

I think no earlier than Monday.

We opened Friday.

I think, Felicia, you can say that with the combination of the ferry service and more things to see on Cotai that drove 100,000 -- 103,000 visits on Saturday and 101,000 visits on Sunday.

So I think it's the combination of increased ferry service and more things to see that really kind of bodes for the future of the attractiveness of the Cotai Strip.

So we opened a new mall and we add enough capacity on the ferry and the increase in visitation is -- you can count.

Actually that's an excellent segue to my next question, because if you look at the mass market table drop for the Macao properties, they've been declining over the last three quarters.

So, what I'm wondering is, is there a reason for that or now that you have another mall open, the ferry service has improved, do you expect that to increase going forward or what are you seeing?

Felicia, this is Brad.

I mean Bill pointed out that the initial indications for July, for example, we were going to set a new record for our property in Cotai, The Venetian.

It's been very sudden.

I mean it's really -- when you look at the increase in the ferry business, the fact that we got the night sailings and all, 1.5 months ago we were talking about how to fill the ferries.

Now as Bill sort of indicated in his presentation, we're going to be faced at some point with making sure that we are selective on how we market to our own customers because we're reaching capacity on certain days very quickly.

So I think the traffic flows are tremendous.

We are working hard to convert traffic throughout the property down to the casino floor.

And we have more promotional and marketing things to come which we think will supplement, as we get people into the property, to get them to play the games and to get them to extend their visitation at The Venetian property.

Okay, is the increased volume on the ferries driven by demand or have you been promoting ticket prices and things like that?

It's really been a combination of both.

And to that point, demand that we have driven internally, we're probably going to end up scaling back because we're catching up with demand; as people become familiar with it and as it becomes more convenient, we're going to be more selective on how we promote the ferry to our players at The Venetian.

We're running on it, Felicia, at the -- this is Sheldon.

Within the last few weeks, we've started frequency at about every half-hour instead of every hour.

I think, by the -- I can't swear about the date, but I think it's the end of August or beginning of September, we will be running every 15 minutes.

So we'll have a substantially greater capacity in both directions.

So, if you're running 90% on a ferry, the average occupancy for Shun Tak's ferry service has been 70% or 80% over the last decades, as we understand.

So, we're very, very happy with the performance of the ferries.

The -- although we don't want to provide any guidance, as Bill and Brad indicated, that July is showing a very, very positive upward trend in the ferry deliveries.

I'm wondering if you could also give us some color on both of your current condo or Four Seasons service department project in Vegas with The Palazzo.

First, on the Four Seasons, you've talked a lot about the using a co-op structure.

I was wondering if that's still in place or if you have altered that.

And I'm wondering where you are in the process.

Do you have a sales office open, marketing materials out, that sort of thing?

And then, the same for The Palazzo in Vegas, the Plaza condos.

I'll tell you that about a month ago, I personally spoke with the head of sales for the Four Seasons condo -- I call them condos; it's the co-op project.

And I asked him whether or not the model -- they call it a [shell] flat -- if the shell flat was ready and the marketing materials are ready.

He indicated to me that he had expressions of interest from 150 people.

And, in talking to him and others, the 22 penthouses that are being offered, they have such a high demand for that, that they think they're going to -- they were proposing to take sealed bids on them.

I suggested they do a live auction.

So, it certainly indicates a strong demand.

Of course, you never know till the fact lady sings.

And, but this is the indication.

And they've stopped taking expressions of interest because they didn't know when they could deliver it.

Without getting into any further detail, I would say that in the near future, there will be a reason to announce that we'll be able to start converting those expressions of interest into orders.

Okay, so that's in Macao, correct?

So what's going on in Vegas?

In Vegas, Rob, do you want to say what's going on in Vegas?

Yes, our marking materials are ready in Las Vegas.

We will start actively selling or taking expressions of interest sometime in the month of August.

The tower is going up; it looks very, very good.

We're obviously looking at what's happening in the marketplace.

But we are ready to start offering these things this summer and into fall, and we believe we're going to have strong demand for them.

And then final question.

Just you guys seem very optimistic about the financing progress that you're making in Asia.

Just wondering, is there any chance to augment that?

There might be -- Sheldon, you might issue some equity or sell some equity?

There will be no equity sold at these levels.

What I could say -- all right, go ahead.

Celeste Brown, Morgan Stanley.

First, can you talk further about this domestic liquidity, particularly given, Sheldon, your comment just now that there will be no more equity issued at these levels?

Could you explain -- could you repeat that question, please?

Bill talked about increasing the liquidity in the US market.

And you mentioned you wouldn't be raising equity.

Can you just discuss how the liquidity would be increased at the parent if you're not issuing equity?

Well, we want to maintain our flexibility that we see various options out there.

We do have quite a bit of flexibility, but at this stage of the game, I can't get into any of the details because obviously we don't want to upset markets or move markets.

But we're evaluating various alternatives to put additional liquidity in the corporate parent level.

Now, let me say, I don't know if you were around nine years ago in 1999, Celeste?

I was covering media then.

But in 1999, we had a slow opening and a slow ramp-up because of the construction problems we had with [Bobus], the builder, and everybody was saying to me, Sheldon we may need $50 million, please tell us you're going to put it in, put it aside in an escrow account and tell us that everything is going to be safe.

And I said no, I'm not going to do that, but I could tell you this, the payment that will be made.

And the reason why I didn't do that is because I wanted the market to accept Sheldon Adelson's verbal commitment, that his word is something to rely upon.

A friend of mine says, that, as all of you that know me know that I don't equal the height of Yao Ming or leBron James or any of the basketball players.

Ming isn't here but the Brown James and Kobe Bryant and other top players are here in Macao.

However, one of my closest friends says, Sheldon, don't worry about your height.

You're the tallest person I know when you stand on your wallet.

And I'm saying right now the Company will not have liquidity problems.

Need I say more?

So you're saying you'll backstop the Company if need be in worst-case?

I don't want to -- my lawyers have -- let me put it this way.

My lawyers have cautioned me what I can say and what I cannot say.

However, as I said back in '99, we're not going to have any problems, and I will say again.

We're not going to have any problems.

And those of you who want to believe it will act accordingly and those of you who don't want to believe it will act what they think they want to do.

I guess this question would be for Bill or Brad.

The corporate expense in the quarter increased pretty substantially sequentially.

Is that sustainable, especially given your comments on cutting costs in both Macao and Las Vegas?

Usually we would be looking at each other to answer that question.

[I found] somewhere far away so it's like the price isn't quite right.

Tell the truth, who's going to take this one.

I think the -- we don't believe it is sustainable.

Some of those -- Scott, do you have the details on some of those expenses in front of you?

This is Dan.

I've got a piece of paper right here.

Celeste, I mean looking at second-quarter '08 corporate expense, we're talking about $33.6 million and you've got some incremental legal fees up this quarter, which probably won't be -- won't necessarily be ongoing at the same rate they're at today, and there are some other things moving around in there.

But effectively, you're not necessarily going to see a change from $25 million to $33 million and have it continue to go in that direction going forward.

Sorry, so we won't see -- it will be somewhere between $25 million and $33 million going forward?

We don't give guidance, obviously, but there's some legal expenses in there that we wouldn't expect to necessarily recur every quarter.

Larry Klatzkin, Jefferies & Company.

A couple of things.

You guys mentioned that you're looking to go more direct to customers.

Can you say what percent of your VIP was direct?

And Four Seasons I guess was the first real intimate product that is looking to go a very high percentage direct at that, compete with when?

We're seeing a ramp-up in that, Larry.

I will tell you without going into specific numbers for example in the month of June, we were actually able to double what we were able to produce in the month of May.

So they are not off large bases but we're growing that business.

And certainly the Four Seasons is a real positioning opportunity for that.

We have a Paiza area in the Four Seasons, which is about 19 tables.

It's not designed to be a junket spot in itself merely by its size and its connection into the Chinese restaurant there; and it's immediately adjacent to the Four Seasons hotel.

So, we're going to look to leverage that product differentiation and offer a consumer who wants a more closer, cloistered, intimate experience that experience.

The Venetian offers a lot of excitement and fun and huge asset base for a customer to take advantage of and many customers enjoy that.

Some customers want to get away from that.

The great thing about the Four Seasons, it really offers that premium customer the best of both worlds.

They can be in the intimate settings of the Four Seasons or they can be 100 meters away and be in the action in the arenas and the Cirque showrooms and the malls of The Venetian.

Certainly, we're going to look to take that as a steppingstone forward.

I think the other thing that we're seeing too in the month of July is just an increase in utilization of some of the aircraft that we've been perhaps slow in utilizing.

We have a 737 over there, which we're bringing in small groups from out of the immediate marketplace and we also utilize the gulf stream there.

So we have all the tools to work towards direct play and we have the ultimate tool in terms of what we believe the Four Seasons will offer, particularly to that non-junket direct play type customer.

All right because I think Wynn is up to like 30% direct.

Could you see the Four Seasons achieving more than 25% direct?

As far -- you mean, within itself I think (multiple speakers)

Yes, within itself.

Within itself, I think it will probably have to do that or better simply by the size of its junket rooms.

It's not designed primarily at this point for the junket.

We do have junket expansion capabilities at the Four Seasons, which are actually under development.

But initially we're going to position that property primarily against the directed play customer.

And Brad, while we're on it, you had some bad hold at the Sands in Macao.

Could you quantify what that might have cost you?

The Sands Macao is for the quarter was about 2.82%.

And so you're talking about -- we say are normalized.

And if you look at Sands and Venetian for the quarter, we were about 2.94% (multiple speakers)

(multiple speakers) I guess compared to last year (multiple speakers)

It's negligible as far as the overall Company is concerned.

The Sands played a little unlucky.

The Venetian played just about where it should and blended, it's a couple million dollars.

And then budget-wise, are we still looking 5 and 6, around $3.3 billion plus land?

And the Singapore around $4.5 billion plus land, not including land, I mean?

I think the -- when we talked about the projects and we talked about these at investor days, for sites 5 and 6, we classified the $3.3 billion, $3.4 billion as hard costs.

There are still pre opening costs on top of that and certain other costs.

But it's in line with what we've talked about in other investor days.

So, nothing has changed for example since February in terms of our budgets on 5 and 6.

Okay.

And Singapore is still $4.5 billion?

Singapore -- we haven't commented on lately.

We're still trying to get our hands around that.

I don't want to comment until I really feel sure about that number.

All right.

And then I guess the government is going around talking to everybody in Macao.

What is your guys feeling about with the commission cap timing and where you see it happening?

I'm meeting with Edmond today, late today.

And, you know, bear in mind, guys, that the performance in this quarter was based upon our offering $1.35 billion plus comps, and that's the highest that -- as high as anybody else.

And we can benefit by having the commission capped at $1.25 billion, although we felt it should've been capped at 1 -- 1.0, including comps.

So, it will make a material difference between the [1.43] -- the $1.35 billion plus comps, whatever that comes to.

And, what we end up with were the $1.25 billion cap, including comps.

So we're looking forward to some benefit accruing out of that.

There's something I want to say concerning development in Macao.

First of all, let me say that the fundamentals of our Company have not changed.

Contrary to what everybody -- to some of the rumors that have been going around, we're moving forward with our development pipeline aggressively.

It is acknowledged that the approval for 7 and 8 -- we don't need 3 because that's the land we already own and we paid the premium for that.

I believe we paid the premium.

7 and 8 has been delayed and we have also done some more redesign.

But, our intention go forward with that, which I am led to believe, and I may have an answer within the next week, I can't guarantee it but I may -- I hope to have an answer on when we could start 7 and 8.

We've done groundwork; we haven't done foundation.

We have done groundwork.

We leave about $100 million in the financing package so that we could continue site development on 7, 8 and 3.

And we've also left -- and this is important.

We've put into the $5-plus billion financing package an accordion feature that will allow us in two phases to take down $1 billion, which is exactly what we did with lots 5 and 6.

So, we started off to get the pilings done, which take a few hundred million now for 7 and 8 and we start on the foundation and stuff.

And by that time, the other properties will be opened and we'll be able to generate more income and borrow money besides just going on a project financing basis.

So, things haven't changed there.

It's taken us time to get approval.

We're doing some redesign because of the cost of construction of the magnificent design we have is high so we're tweaking that design.

And we're optimistic that we'll -- I'm optimistic that we'll be able to get an approval for that in the very near future.

Sheldon, do you think that the commission cap is enforceable?

Some people are claiming that it's not.

I talked to Lawrence [Tso] and he seems to believe that it really is.

What is your opinion on this one?

Listen, you've got to look at it from a practical basis.

It depends how much the government enforces the law.

There is going to be a pressure on the government because I think they've gotten to the point and I think -- if in fact central government told Edmond, which is why he made that announcement that he's got to control it better -- made that announcement to the legislative council, it's got to be seriously enforced.

I believe that, certainly at the beginning, it will be enforced.

Will somebody find some way around it?

I don't know.

I mean you never know.

But people know and understand with their back betting on the line, that if they continue to push, they may be pushing -- it may be the straw that breaks the camel's back.

And they're smart enough businessmen to know they don't want to kill the goose that's laying the golden eggs.

So, if the government says $1.25 billion based upon my conversations, with a leading junket rep, I think they will abide by it.

At least the top guys will.

Last question, and I don't know if you guys will answer this, but can you give us some indication of The Venetian versus Palazzo EBITDA?

It was in the script, Larry.

$35 million for Palazzo.

Joe Greff, JPMorgan.

I was hoping, Bill, Rob, or Brad if you could comment on what you're seeing for forward convention bookings on the Las Vegas strip, second half of this year, and what your read is for next year?

Obviously this is a challenging market.

We can't deny that in all segments, be it convention, be it group.

Certain segments within the group market are especially challenging, obviously -- auto, financials, freight transportation.

However, pharmaceuticals, IT, fast food, insurance, biotech all seem to bode pretty well.

The pressures, both external outside Las Vegas market rate, the market is essentially within Las Vegas as well.

I think we're going to rebound in the first quarter.

We've had some disappointing cancellations that -- and especially in the automotive sector.

But I think year on year we'll be up, albeit we have 3,000 rooms to fill.

We're more sensitive to rate than we have been in the past.

The tradeshow market is holding up well.

And I think the group market will bounce back.

But we're going to lose some important segments and I think auto, financials, freight transportation will continue to be, obviously, nonperforming segments within the group market.

Joe, this is on the convention -- the mice giant, sorry, the rat giant (multiple speakers)

On your wallet.

That's what they call me here in Asia.

Go back to 9/11 and see what happened.

Now I've been in the tradeshow business for 35 years.

I've been in it and affiliated with it for 35 years.

And I could tell you that what happened on 9/11 is a good example.

It was much more drastic a hit on the market and more immediate than anything else, than any sort of economic slowdown.

Everything is cyclical.

There isn't anybody that doesn't think that we're in a trough right now and hopefully we're at the bottom of the trough and some people will even say we're at the beginning of climbing out of it.

I could tell you that the convention market, the exhibition market, doesn't go sour for more than a year.

So, if somebody had a problem this year, typically, they won't have any problem next year.

Because the fundamental need of people in the exhibition and the conference market is to get the latest information in order for them to carry on making a living.

If somebody showed information, they put their company at a competitive disadvantage and other guys will come in and eat their lunch.

So, they've got to see the new products, they've got to see what's going on in the industry, and they have to discuss what research is showing.

And of course, other reasons that people go to shows and conferences is to recruit other people and to do PR.

So, I'm here to say that, typically, and I've seen it several times over the past, in a recessionary contraction or any incident like 9/11 typically will not last more than one cycle.

What is positive is, the tradeshow business continues to -- be it, we're not losing tradeshows, there is slight attrition, but there's no lack of shows.

[Shoe] is in town right now, ASD shows up in a couple weeks, and then Magic.

So there's strong tradeshow support in Las Vegas and we have the advantage of, if we want to, open up our rooms to more tradeshow business because we're usually the host hotel.

So, we have that advantage as well in the tradeshow market.

Yes, I think this is kind of a testament to the business plan overall.

I mean the ability to be able to access the corporate market with the carpeted space that we have, access the exhibition market with the Expo Center that we have, all suite rooms be able to reach out to the gaming market further, to be able to then test the FIT markets.

I mean it's a product that allows us to be able to react at core times like this.

And also a product that allows us to identify segments that may still be in good shape and then go out after those.

And the all suite product also against those.

And lastly, I think the fact that there is concern about some of the airlift into Las Vegas, when you're going to be at a group for a tradeshow, you're going to get there some way or another.

There's less discretion on the travel and certainly lots of lift still exists to Vegas.

And somebody attending those types of meetings or those type of exhibitions is going to make sure they get there because they need to.

A recent example demonstrates the point.

The ICSC, the International Council of Shopping Centers, which is real estate oriented and has been hit hard, had a drop from 50,000 to 30,000 and we still sold out and still at the same prices we had last year.

We don't need 100% of a planned convention, unless it's tiny, in order to satisfy our demand -- satisfy the supply we have.

It's true also with the shoe show, Sheldon.

We're very strong this week with shoes, the same way.

That's excellent guys.

One final question.

Did you guys -- I made it last quarter on the call, did you break out the Q2 EBITDA between The Venetian and Palazzo?

Last quarter?

Yes, we did.

We said it was about $20 million.

$20 million.

Robin Farley.

I wonder if you could give us some numbers that aren't usually available until the Q is filed but that would just give us a sense of liquidity, sort of where you are drawn down on different credit facilities?

And the question is not to diminish Sheldon's height when he stands on his wallet, but just to get the information.

Robin, did you at least laugh at it?

Of course.

I thought it was funny.

I even tried it to demonstrate it.

I still could be a basketball player.

Robin, are you looking just for the specific debt balances at each of our various entities or levels?

What specifically are you looking for?

Specifically the credit facilities -- what's drawn down and what's available in terms of liquidity today.

I have the drawn amounts in front of me.

I don't have the exact remaining availabilities.

But I can give you the drawn amounts at each of the various levels.

And of course (multiple speakers)

Scott, I mean you're going to go into the analysis of the entire balance sheet and our debt structure; it's going to use up the rest of the time for everybody else.

So the bottom line is that we have plenty of flexibility and whatever liquidity we need we're going to have.

Scott, maybe I can follow up with you after the call.

And then one other question that hopefully won't take up the rest of the call.

But if you could just talk about your strategy with The Palazzo condo sales in Las Vegas.

If you look at City Center and maybe the pace of sales, it has been a little bit slower than what was originally expected.

But since they're condo hotels the property can just I guess ultimately keep them in their hotel inventory.

And you've made the point that you didn't design The Palazzo condos to be condo hotels because of the conflict of interest.

So I guess what's the strategy if condo sales there are at that sort of slower pace?

Sheldon, you want to take that?

Go ahead, Rob.

Well we don't expect the condo sales to come out at a slow pace.

There's already a backlog of expressions of interest and we expect to start selling; we had a meeting yesterday; what was yesterday?

We had a meeting on Tuesday, at which time we always had a Board meeting.

The sales group came in and made a pitch.

And the approach that they are taking, we accelerated their efforts and try to move them along, but since we can't deliver the property until the end of '09 and the first quarter of '10, nobody seemed to have been in too much of a hurry.

And I reversed that kind of thinking and I said let's go and get our expressions of interest and then let's see what the market looks like.

We will have some news coming out about that in the near future.

Robin, I think in respect to your comment about City Center, two thoughts.

One is we're selling [4 and] 20 Street condos, not condos hotels, so are a lot less than their 3,000 plus.

Two, even at their current booking, we hear their current sales pace, we'd be sold out in about 15 months with our inventory of 420 units.

And lastly, I think the unique positioning of this property, where it sits in The Venetian Palazzo, the amenity package, the views, I think it is pretty extraordinary compared to everything else.

I don't think we're going to have a lot of resistance.

And lastly, we priced this thing even at the low levels that some of the City Center approximate out at, we still have a very, very large profit margin based on our construction costs, and we feel very optimistic.

In the worst-case, looking at MGM's numbers, we'll sell this thing out in 18 months.

And I think the other thing to point that is the wide variety of products down at City Center.

This is more analogous to the Mandarin Oriental project at City Center and that sold out extremely well.

Yes, did very well.

Listen, we already had our first order.

My wife called me up and said that she wants an entire floor.

We're charging full price.

And I'm prepared to pay full price, but I don't want an entire floor because I will bounce around in it.

So, I've got to convince her to take maybe half a floor.

So, we'll be the first buyer at a retail price.

Steven Kent, Goldman Sachs.

Maybe you could talk about the retail trends, the sales per square foot in Macao, how that's working out.

Leasing pace for the rest of Macao on the retail side.

And then, you've said that July was pretty good or it continued to show strength.

Any impact of any visa restrictions or expectations of tightening visa restrictions, what the impact would be?

The impact of the visa restrictions have been compensated for by our own CotaiJet ferry service and the increase of participation on the jet.

So, if there is any loss, we can't detect it at The Venetian.

So, I mean we've just had two days on this past weekend.

Each day was over 100,000.

One was 101,000; one was 104,000.

Our increase in availability of seats on the ferry, on the Cotai water jet ferry service, has manifested itself and substantially increased weekday and weekend attendance.

So, if there is an impact from the IBS gain, we're not -- we can't see it.

No, there may be.

I'm just saying that we can't see it because our attendance is compensated for by some other factors.

I just want to make sure that we're addressing the question.

The question was retail sales per square foot, was it not?

I don't have that answer.

But he talked about retail attendance.

Well, we know that attendance overall is up 28%, 29% month on month.

We know retail sales is up about 12%, 14%, approximately month on month.

So, there's a tracking.

And the key thing here that is the most important indicator I think is slot revenues.

Probably the direct line is much better drawn between people coming into the building and then the increase in slot revenues.

It's just steadily increasing as more and more visitation comes.

Now we're going to convert more of that traffic to more mass table play as we focus more on the incentive programs and we can identify higher quality people on the ferries, but the foot traffic looks to be almost directly measurable to slot income.

Our income is per unit and our overall slot income has grown dramatically as foot traffic increases.

And we see residual benefits in sales in the mall also.

The sales in the mall, has that impacted the leasing out pace for 5 and 6?

Four Seasons is first for having that product.

Who said that?

I thought we were talking to Robin.

That's Steve.

No, we were talking to Batman before.

It's 5;30 in the morning here.

I probably fell asleep for a few moments.

All right, Rob, do you have a comment on the Four Seasons?

The quality, if you've seen the Four Seasons offerings in Macao, I think what does is round out the luxury component of our overall mall.

I think The Venetian is wonderful and it's got all the gondola, etc.

But I think the luxury offerings -- the success of the Wynn guys, clearly, they've done some astounding numbers in the retail.

And I think some of the stores like Hermes and Channel, etc.

are going to give us an offering we don't heretofore have at The Venetian.

I think it's going to impact sales overall per square foot.

It's going to help leasing in future parts of the retail, but also.

it's going to drive just overall demand for that Cotai Strip from the retail side.

I think it's really extraordinary what the Four Seasons has to offer.

I think also I would weigh in, when you master plan these projects and they do them piece by piece, the Four Seasons always was the upscale product against the upscale end of the marketplace, whether that's the VIP casino market, whether that's the high end leisure traveler or whether it's the retail.

So, we opened The Venetian, and we're very pleased with The Venetian.

The Venetian is what it is and the way that it was planned.

It's a mass product, a high-end mass product.

It's got arenas, it.

Showrooms, it's got meeting space.

It's got all suite rooms, but the intention always was to have your VIP market and your high-end market focused on the Four Seasons and The Venetian being the more mass and meeting product.

So we're looking forward to the completion -- the first real piece of the overall strip; and the ability to focus on market segments that we haven't had product or at least ideal product to attract.

You can throw Cirque into that mix as well.

Bill Lerner, Deutsche Bank.

That was nice of Larry to let us get in on his one-on-one earlier.

I couldn't resist.

I have a few; I will fire them off real quickly in deference to the time.

One I guess for Rob, is it possible to give us a sense for, at Venetian Las Vegas, a handle and drop percentage delta?

Sure.

Let me pull my notes.

You're talking -- you're looking at tables and slots?

Yes, just to get a sense for volumes.

Second quarter in Las Vegas at The Venetian, slot volume was about $500 million versus $562 million last year.

Win was down a few points to the whole percentage on the slot.

Win per unit per day down to $182 million from $227 million.

Obviously it would have an impact on the new offerings at Palazzo.

Palazzo I think is starting to prove to be a very powerful slot player in terms of the quality of product and the room product.

There's been some cannibalization.

However, cumulatively, we're heading for our best month ever in July.

Very candidly, Bill, we've used the decline in a few points in occupancy to throw some slot rooms to slot players and that's driving both occupancy and slot win.

And we're hoping to see the two of these things get to the point where they can get to $60 million, $65 million a quarter together and work in tandem.

Because the slot offerings are different and the product is different.

Table side is not as dramatic.

I think the table side, Q2, total drop was in The Venetian side, $215 million, down from $280 million the previous year.

A lot of that kind of a [bock rot] year to year.

Obviously again The Palazzo have the impact.

We have the newer suite product and the newer casino floor.

I think if you look at these two properties at some point as working together, both slot and table and creating more amenities, more things to do, more places to gamble, getting a nice bounce-back in both slot and tables from customers who might play at Palazzo and then decide they are not lucky or they want to go and try something different.

And rather than leave the building, they go over to The Venetian.

So although it's definitely been some cannibalization, I think we're going to see some especially in the second quarter and end of the third quarter, some nice synergies working together on the gaming side.

That's helpful Rob, thanks.

And then, Bill, you talked about $40 million to $60 million -- actually now $70 million to $90 million and I should say in cost saves in Vegas between the two properties.

And then you talked about I think $60 million to $70 million in cost saves in Macao going forward.

I guess the question is, how much of that is -- flows through?

Is that sort of 80% margin or is there some revenue impact of some of those cuts?

Rob, do you want to deal with that?

I think, obviously, there's going to always be some revenue risk.

The goal is to cut the fat and not the muscle.

But I think we're trying -- obviously we're not going to do layoffs here.

That's not in the vocabulary.

The idea is cost-containment through, on the labor side, through freezes; we have a hiring freeze in place currently.

It is downsizing some hours of some things we think we can do without off-hours.

It's just being more judicious on our spending and paying attention to every corner of the building.

This is a big building.

There's 10,000 restaurant seats; there's 7,000 plus rooms.

There a lot that goes on here.

We're just trying very hard to be really, really focused on every area we can save money from the packaging center to the purchasing, to our light bills, etc.

How much it flows through, I would not want to venture a guess.

But I think at The Venetian Palazzo, it's going to be important.

I don't want to put a percentage on that yet.

We're still measuring how far we can get.

We still had this back in April.

But obviously, if you can reduce the headcount through attrition, if you can watch your spending, the flowthrough is going to be dramatic, if you can, again, avoid the muscle and just deal with the fat.

In Macao, the majority of it goes right to the operating line.

We're not talking about cutting back on marketing programs.

Most of the costs we've identified are costs associated with labor.

Certainly the opening of the Four Seasons gives us an opportunity to take care of some of our labor sins at the current facility.

And again, without layoffs and things, moving people, reassigning them as that property opens, you will see some additional spending at The Venetian in terms of some of the mass play.

But we think that that's going to return itself in spades in terms of revenue and drive and grow our EBITDA.

So, the data costs that Bill identified in his presentation in Macao are primarily driven to affect, totally, the bottom line.

Last one, hi, Scott, when you've talked in the past, or we've talked in the past, you guys have intimated that you needed an incremental US$3 billion to US$4 billion to build out the next 24 months in Cotai.

And then as I do the back of the envelope for the $5.25 billion that you need -- that you're saying you'll raise, which includes, obviously, a refi, you get to obviously a $2 billion incremental number to build out Cotai.

Did something change?

Is there sort of an apples and orange or did I miss something on the accordion future or what am I thinking?

The accordion feature is in addition to that $5.25 million.

Okay, so that's the spread then?

Not really.

No (multiple speakers)

That doesn't get us all the way there, Bill, but (multiple speakers)

It gets us to the point that we operate at -- the manner in which we did 5 and 6, we did the groundwork, we did the foundations, the primers, etc.

We got it out of the ground and now here we are refinancing it.

And that's the way it'll happen with 7 and 8.

(multiple speakers) accordion feature that allows us to continue seamlessly.

So basically all the concern out there that you need to raise $7 billion and obviously all the whole Cotai stores have been backed out of your valuation, the way to kind of think about that now perhaps is you can actually achieve what the market is not at all paying for by raising $2 billion.

And once you're open there, the accordion feature is already part of the story and you move forward.

Is that kind of --?

But -- generally.

Let me say that one, there's no surety we're going to have the approval this week.

However, I have reason to be optimistic; I just want to clarify can't guarantee it, that we will have an approval to move forward on 7 and 8 imminently.

That's item one.

Item two, we are and we need some time to do some redesign particularly structurally because the cost of these buildings that are very long have to be redesigned structurally so that we can -- they act like a sale, so what we have to do is cut up the big sale and cut the sale into several pieces.

So, that it will diminish the need for -- a substantial cost increase based upon structural requirements.

Brad can address that better.

But conjecturally, I think that's where we are.

So, as I said, nothing fundamentally has changed in this Company.

Those people who thought that we wanted to go on again, what am I borrowing money for when I'm going to have a negative carry for another few months?

If we've got an accordion feature that we can pick up another $1 billion as time moves on, then what's the rush?

I want to open it as quickly as humanly possible.

We've got to get over two things.

One is the permitting; one is the redesign.

And both of those at best will take at least a quarter.

Well the realities are, the spend at the beginning of the project, these construction projects, is very slow.

You're sitting there drilling holes and pouring concrete for months and months and months.

It's not till you start getting out of the ground that you start accelerating your spending.

So, there's no need to go out and raise this kind of money.

We're not going to have a need for significant money until the latter second part of next year.

Somebody asked about square footage sales.

If you listen carefully to the numbers that the average rent -- US per square foot, that we're booking in Singapore, will indicate also -- I mean I wanted to get that plug in -- the issue that we're doing there that the rents that these people are willing to pay as base rents are absolutely extraordinary.

And they certainly indicate that they expect to do a high level of gross volume to justify these high minimum rents.

We expect that our mall in Singapore, the Marina Bay Sands will be considered probably the most successful or the most profitable mall ever.

Now, that having been said, I also want to address another thing that somebody talked about, about the slot win in Venetian.

It is ramping up, continues to ramp up very handsomely.

And what I want to say is that when we first started in Macao and started to do our planning in '02, everybody said that the Chinese people will not take slot machines.

Well, if that's the case, we must have done something.

We've got the Rumpelstiltskin touch, if I could tell you that The Venetian Macao is already ramped up to the point where the monthly income on slots is higher than the monthly income at The Venetian, that's been open for nine years.

So, it is to the Chinese will play and will learn to play more, and that they like it.

And we're doing very well on the slots.

So, the absolute dollar income is more than on a monthly basis than we've been experiencing and have experienced with The Venetian Las Vegas.

Thank you, Bill.

And with that, I think that ends our conference call for this quarter.

I didn't realize till Sheldon educated me that Rumpelstiltskin was a Chinese guy.

We appreciate your attention and it was a long call.

He ate Chinese food.

It was a long call.

We had a lot to explain and a lot to go over and we appreciate your patience and look forward to updating you again at our next quarterly call.

With that, thank you very much and we'll talk to you again next quarter.

This does conclude today's conference call.

You may now disconnect.