拉斯維加斯金沙集團 (LVS) 2010 Q1 法說會逐字稿

Good afternoon, my name is Kanesha, and I will be your conference operator today.

At this time I would like to welcome everyone to the Las Vegas Sands Corp.

Q1 earnings conference call.

(Operator Instructions).

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

Daniel Briggs, Vice President of Investor Relations.

Please go ahead sir.

Thank you, operator, and good afternoon everyone.

Thank you for joining us today on the call.

With me today are Mr.

Sheldon G.

Adelson, our Chairman and Chief Executive Officer; Mike Leven, our President and Chief Operating Officer; Rob Goldstein, Executive Vice President and President of The Venetian and Palazzo in Las Vegas; Ken Kay, our Chief Financial Officer; and Gayle Hyman, our General Counsel.

Before we begin let me remind you that today's conference call will contain forward-looking statements that we are making under the Safe Harbor provisions of the federal securities laws.

The Company's actual results could differ materially from the anticipated results and 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 net income, adjusted diluted EPS, and adjusted property EBITDA, which are non-GAAP measures.

A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures are included in the press release.

Please note that the presentation is being recorded.

With that, I will turn the call over to Mr.

Adelson.

Good afternoon and thank you all for joining us today.

I will begin the call today with some big picture thoughts on this quarter's results, and the preview opening of Marina Bay Sands in Singapore.

I will then hand the call over to Mike and the team to provide some additional detail.

Big picture.

We are quite pleased with our results.

Our business is doing very well at the moment.

Each of our properties is growing revenue, operating efficiently and expanding EBITDA margins.

The strength of our business model in Macau remains on display in our quarterly results.

We again generated record revenues and ebitda in the quarter, and continue to lead the mass market in EBITDA generation.

While total net revenue at our three properties in Macau increased 24% compared to last year's first quarter, adjusted property EBITDA increased 47% across our portfolios of properties in Macau.

It just validates what we have been saying that somebody once told me, you can't put "revenue" in the bank, only "EBITDA" goes in the bank.

At The Venetian Macao EBITDA for the quarter was $170 million, an increase of 40% compared to last year's first quarter.

EBITDA margin increased to a quarterly record 30.9%.

That financial performance we pledged stronger [than the growth], coupled with our continued focus on efficiency throughout our operations.

The results of the Sands Macao and Four Seasons Hotel Macao and Plaza Casino also reflect these trends.

Revenue was up 26% at Sands Macao for the quarter, while EBITDA was up 38%.

At the Four Seasons Hotel Macao and Plaza Casino revenues were up 118% for the quarter, while EBITDA was up 343%.

Focus on the highly profitable mass gaming hotel and retail businesses, together with our attention of cost structure and efficiency, has allowed us to bring record revenue dollars through to the EBITDA line.

We will recommence construction shortly of parcels five and six, which is our largest Cotai Strip development to date.

We believe the 13.3 million square foot integrated resort complex, with its array of world-class attractions and amenities, will broadly appeal in Macau as an international tourism destination.

Importantly, the development will more than double the hotel inventory on the Cotai Strip.

That hotel inventory is critical to increasing the competitiveness of Macau as an international MICE destination and enhancing retail growth.

I might say that I believe there is several thousand employees already on the site that are doing some remediation work, and that our -- may have already started some of the minor reconstruction works.

Let me spend a moment on Las Vegas.

Revenues increased modestly this quarter compared to the quarter one year ago, due principally to record volumes in the gaming portion of our business.

Group business is also returning, although pricing remains competitive.

Forward bookings are increasing for both 2010 and 2011, which is encouraging.

We are also seeing stronger pricing trends in the FIP portion of our business, particularly on weekends.

Finally, let me touch on the newest and most exciting property in our portfolio, Marina Bay Sands of Singapore.

After years of hard work and preparation we opened the doors of Marina Bay Sands on April 26, just 10 days ago.

While it remains early days, the initial results are extremely promising.

Visitation and gaming play levels have been robust.

We hosted our first group meeting earlier this week, and we will host our second major group next week.

Forward booking trends, which were already quite healthy, have increased markedly since we opened our doors.

Let me provide a few early observations on Marina Bay Sands that we have learned since we opened.

One, we have a substantially different customer profile than our competitor, which should lead to a high revenue per visitor.

Two, our departmental profit from gaming has ranged between 45% and 60%, depending on the volume of play per day.

This is what we have been saying for quite some time, and others have not been -- others haven't agreed with it.

Three, direct VIP play has been robust to date with over 450 credit applications completed in the first week.

Customers have come principally from Malaysia, Indonesia and Singapore, which we have always maintained has been our primary market, with additional customers from Taiwan, Mainland China, Hong Kong, the Middle East, and India.

Four, both our premium direct and slot play have been quite robust, and have exceeded our expectations.

Five, to date visitation has been mostly from overseas visitors, with a smaller component, much smaller component, coming from Singapore.

Six, we are learning rapidly about our customer's tastes.

We have significant opportunities to reconfigure our gaming floor, as well as minimum wages, and game mix to deliver the most popular games based on customer demand in the future.

Particularly on the ETG, the electronic table games side, we believe that can somewhat increase our average win per unit per day on the slots.

We are confident about the property's potential to generate both significant growth and strong returns for the Company, while increasing visitation at Singapore and enhancing its reputation as the leading international business and tourism destination.

We look forward to formally celebrating the debut of Marina Bay Sands with the people of Singapore in a grand opening celebration on June 23.

I look forward to addressing your questions later, but we will turn it over to the team for a quick update first.

Mike, you are on.

Thank you, Sheldon.

I will add just a couple of thoughts.

We have worked hard to instill a culture of cost discipline across the Company, and expect that focus to be an ongoing component of our future success.

Now our principal focus has turned to opportunities for growth, which we believe to be significant.

In Macau we have outstanding organic growth opportunities in the gaming hotel, MICE and retail areas.

We will also significantly expand our asset base in Macau with the debut of parcels five and six on the Cotai Strip.

In Las Vegas a recovery of consumer spending and an eventual recovery in room rates will occur over time.

At Sands Bethlehem the addition of table games this summer and our 300 room hotel in the spring of 2011, as well as the expansion and maturation of our regional marketing programs, will benefit that property.

Of course, Marina Bay Sands should provide substantial growth in the coming quarters.

The Venetian Macao remains the market leader in mass play in Macau, delivering non-rolling drop of $922 million, and record slot handle at $670 million to the quarter.

The trend of high hold at The Venetian Macao on non-rolling play continued last quarter and also occurred in April.

We believe these higher hold rates at The Venetian Macao on non-rolling play, which are impacted by many factors including the length of play, the customer profile, and the mix of games on The Venetian floor should continue in the foreseeable future.

Our contribution to ebitda at The Venetian Macao continues to reflect our strategy.

For every dollar of EBITDA generated at the property during the quarter, nearly 60% was produced by less volatile, higher-margin mass gaming and slot play.

Over 25% was generated from non-gaming areas, including our hotel, convention, banquet and retail operations, and less than 15% was contributed by the more variable lower margin VIP rolling play segment.

We remain focused on developing and growing our premium direct business, which is the higher-margin segment of VIP play.

Our direct VIP play at The Venetian Macao grew to $2.1 billion, or approximately 21% of the more than $10 billion or rolling volume during the quarter.

At the Four Seasons Hotel Macao and Plaza Casino total rolling volume was $3.7 billion, with direct VIP rolling business growing to $1.6 billion or 43% of that total.

Looking ahead, we remain confident that the development of additional destinations on the Cotai Strip will expand the market, driving greater mass play, hotel and retail revenues to our current and future profits.

Let me spend a moment on the Sands Macao.

The Sands remains both a cash cow and a market leader in mass play on the Macau Peninsula.

EBITDA increased 38% to $70 million for the quarter.

EBITDA margin improved to 24.6% this quarter compared to 22.4% in last year's first quarter.

So that covers Macau.

Let me spend a minute on Sands Bethlehem before Rob covers Las Vegas.

I am pleased to share that Sands Bethlehem had its best quarter since we opened the property last summer, generating $11 million of EBITDA.

The improving results reflect stronger slot revenues, the introduction of additional marketing programs, and in concert with our efficiency effort that was just completed.

We continue to believe Sands Bethlehem has potential.

We plan to add 89 table games this summer, which should increase the property's appeal, and should contribute to greater profitability at the property overall.

We have also restarted the construction of our 300 room hotel, which is expected to open in the spring of 2011.

The addition of the hotel will increase the length of stay at Sands Bethlehem, while adding higher-margin hotel revenues to the property's financial results.

With that, let's go to Rob and Las Vegas.

Thanks, Mike.

Our Las Vegas properties drove EBITDA of $105 million in the first quarter of 2010 compared to $90 million in the first quarter of last year.

The gaming segment of our business remains strong.

Hotel occupancy also remains healthy.

The challenge continues to be room rates, which remain weaker compared to (inaudible) levels.

Although FIP rates have shown improvement particularly on weekends.

The food and beverage business is also down compared to levels we enjoyed in the past.

Table games drop was a record $547 million during the quarter, a 23% increase in the first quarter of 2009, while slot was $49 million during the quarter, about the same as it was in the 2009 first quarter.

Looking forward we expect to realize more group rooms in 2010 than we realized in 2009.

If the pace of group business bookings continues to improve, 2011 should be stronger than 2010.

In 2009 we realized approximately 470,000 group room nights, or about 18% of our total room nights.

Today we have about 515,000 group rooms on the books for 2010.

And we expect our actual group rooms to exceed that number as we add additional business throughout the remainder of the year.

We do expect that pricing will improve over time as business expands, our competitors in Las Vegas will raise prices, and the economic recovery continues.

So in summary our gaming business is healthy, with record volumes in our most recent quarter, while the costs are down.

Given that backup, we are confident that Las Vegas properties will continue to exhibit significant operating leverage, as pricing FIT and group segments improves.

With that I will turn the call over to Ken.

Thanks, Rob.

We made steady progress this quarter on our deleveraging strategy.

Excluding our development financing in Singapore, we paid down or retired approximately $850 million of our debt during the quarter.

Those repayments include the total outstanding balance of $776 million on the revolving portion of our domestic credit facility.

The repayments also include purchase and retirement of approximately $35 million of face value of our senior notes, which were purchased at a discount.

These repayments will reduce our cash interest expense by more than $25 million per year in the future.

As of March 31, we had in excess of $4.2 billion of cash, cash equivalents and short-term investments on our balance sheet.

That cash provides us with significant financial flexibility and will enable us to execute additional components of our deleveraging strategy in the future.

In addition to our cash balances at March 31, we have approximately $1.3 billion of availability under our undrawn credit facilities at current exchange rates, including amounts available through our US credit facility and our Singapore credit facility.

So together, we have approximately $5.5 billion of cash, cash equivalents and short-term investments and available sources of liquidity.

The principal uses for that $5.5 billion includes approximately $1.4 billion of capital expenditures, preopening FF&E and construction period interest to spend on our Marina Bay Sands development in Singapore through the end of calendar year 2010.

Although we expect as much as $400 million of that amount to be paid out of cash flow generated by Marina Bay Sands during the year.

An additional $400 million, principally retainage payments on the development, will be paid out of cash flow from the completed property in 2011.

Approximately $400 million in additional equity contributions will be made toward the development of parcels five and six on the Cotai Strip in Macau.

In addition, we expect to close later this month the previously announced $1.75 billion credit facility to fund construction of parcels five and six in Macau.

The $400 million in equity and the project financing together are sufficient to complete the first two phases of that development, which will feature approximately 6,000 hotel rooms, and all of the major cash flow generating components of the development.

As of March 31, total debt was $10.5 billion, while our cost of borrowing remains low.

Our weighted average interest rate for the quarter was approximately 3.5%.

At our current levels of operating performance our cash balances provide ample cushion for compliance with the financial covenants in our domestic credit facility.

At March 31, 2010, for the US restricted group covenant compliance purposes, our trailing 12-month EBITDA was $439 million.

Our total gross domestic debt was $4.3 billion.

Our cash balances within the US restricted group were $2 billion, and our calculated net debt was $2.4 billion.

Our leverage ratio was 5.4 times compared to a maximum leverage covenant under our US credit facility of 6 times.

For The Venetian Macao restricted group at March 31, 2010, our trailing 12-month EBITDA for compliance purposes was $1 billion.

Total gross debt at The Venetian Macao restricted group was $2.6 billion.

And our leverage ratio was 2.6 times compared to a maximum leverage covenant of 4 times.

We remain focused on maximizing operating profitability to enable debt reduction.

While our business will naturally generate a significant amount of free cash flow, that will enable deleveraging in the future, we also expect to execute in due course the sale of non-core assets, which will enable additional debt repayments and enhance returns.

Before I turn the call over to Sheldon for concluding comments, let me highlight two changes we are making this quarter with respect to our expectations for table games hold.

For rolling play we are establishing a range of 2.7% to 3% across our portfolio of properties, which is consistent with the actual old rate we have experienced over the last few years.

For non-rolling play a range of expectation for hold rates has historically been 18% to 20% in Macau, and 20% to 22% in Las Vegas.

We do not believe these ranges accurately reflect our evolving non-rolling table games business in either Las Vegas or Macau.

Our non-rolling table games hold rates in both Las Vegas and Macau are impacted by many factors, including the length of play, the customer profile, the mix of games and seasonality.

These factors vary widely across our portfolio of properties and are constantly changing.

Given that backdrop and our belief that a one-size-fits-all hold expectations cannot accurately capture these factors across our portfolio of properties, we have chosen to move to a property-specific four-quarter moving average methodology for non-rolling table games hold expectation.

We believe this methodology is a reasonable one, that will allow each properties' expected hold percentage to reflect that property's unique characteristics and expected hold performance, as determined by actual historical experience.

With that, I will turn the call back over to Sheldon.

Thanks, Ken.

The first thing I want to say is that I made an error before.

It was a typo in our draft.

I said that we open on April 26, we actually open on April 27.

I should have known, I was there.

Before we go to Q&A let me make a couple of final points.

We worked very aggressively last year to rightsize our cost structure and to clean up our balance sheet.

I know we have made a lot of that in several prior conference calls, and I'm very happy to say that that has been substantially completed.

The result of those efforts are now clear.

We just completed another outstanding quarter, generating record revenues and EBITDA.

We have significantly reduced our debt levels, and our balance sheet now has more than $4.2 billion of cash, providing significant financial flexibility and enabling us to continue our industry-leading growth strategy.

We stand today at the beginning of our next major phase of growth.

With that, we will move to your questions.

(Operator Instructions).

Joe Greff.

I was hoping you can give us an update on any conversations, or the many conversations I am sure you have had with Macau and/or Beijing with respect to the table game cap for new development in Macau?

I think, Ken, you phrased when you were talking about [pikes] five and six as having 6,000 rooms and all the cash flow generating amenities, can you comment on how many table games you are allowed right now to have there, or what you're anticipating to end up there?

And whether that would involve table games being brought over from some of your existing properties, whether it is a Four Seasons or Venetian Macao?

Thank you.

This is Mike.

We met last week with members of the Macau government.

We have been assured in writing for 400 tables to start with, and their assurances of reviewing tables as we go over the next couple of years.

Our expectation, and our lenders know that we will open with enough tables in five and six to justify the numbers that we projected in the loan documents.

That will involve moving some tables from some of our facilities, as well as the additions of some electronic games.

Okay, just to clarify that the 400 that you have been assured of in writing --

That is correct.

That is inclusive of table games that you would move from other properties?

No, 400 is -- 400 new tables, that is 2,200 -- plus 2,200 slots.

We have assurances from the government.

And we have received that assurance and the assurance that they will work with us to get additional tables by the latest in March of 2013.

But if that doesn't happen, we will still open -- we will move some tables that we are not using in the other facilities, as well as add electronic games.

So the numbers that we projected are the numbers that are in the loan documents and have been approved by banks.

I would like to add onto that and say, I believe the number is approximately 170 tables that we're going to move that either are not being used right now or that are -- these would be marginal games that are being used at lower rates.

We are adding 100 electronic table games, which offer some very good potential.

We are going to try different electronic table games.

We are also assured by the government -- we have been assured that we will have the 270 extra games that we originally put in our plans in 2013.

So we will operate for two or three years without -- well, we will still operate with that number of tables, but we will be able to get another 270.

That is before we start to make adjustments like we are making in Singapore and we make with all new properties, increasing or decreasing the number of tables and denominations as we open a property and we see the demographics of the visitation.

Then with respect to Marina Bay Sands, Sheldon, I was hoping you can share with us -- I know it has been only 10 days, any kind of revenue metrics at the property, whether it is win per slot per day, or slot revenue per day, or mass revenue per day, it would be nice hearing what those numbers are relative to other numbers that we might be hearing from your competitors.

I will answer it.

Let's put it this way.

None of the analysts have come up -- first of all, we don't have -- one thing we are short of that takes a long time to order are stadium style electronic table games that seem to have gone gangbusters (inaudible).

I call it [Genting], other people call it RWS.

They are completely full, and we have ordered them.

And these sort of have to be made custom, but we expect them in 4 to 6 weeks.

So that will make a big difference.

However, the lowest number per day that we have experienced is higher than the maximum number that any of the many analysts have been estimating.

The estimates that we have seen in the market are similar to Las Vegas numbers, $200 plus, so some other numbers around the country.

But we have ranged -- it depends upon the day and depends upon which machines have been opened, because in the first few days the surveillance requirements are really, really very particular, very meticulous, very protectionist.

But we have run, I will give you a range, from $400 to $900 per unit per day.

I don't think any one analysts came up with our lowest number of $400.

So I think we will have a somewhat higher average when we bring in those electronic table roulette games.

It is obvious that the roulette games, we get eight turns to an hour, eight to ten turns an hour out of the roulette games -- the live roulette games.

And the ETG, the electronic table games, to roulette are 80 games an hour.

And there are just unbelievable cash cows.

Great.

Thank you, Sheldon.

Rob, I almost didn't recognize you, actually not sounding so negative on Las Vegas.

Your comments about the FIT rates on the weekends, can you explain why you think that is?

Is that just demand coming back and therefore you and the others on the strip are yield managing appropriately, or is it just a rationalization of how the operators are looking at charging room rates?

Before you answer, Joe, I just want to say, we around here completely agree with you.

We don't know if we are talking to Rob Goldstein the new or Rob Goldstein the old.

But his birthday -- is it tomorrow?

My birthday is Sunday.

Sunday, yes.

So he is the older long-term Goldstein.

I'm getting old and pessimistic.

There has been a nice (multiple speakers).

More optimistic.

There is a night movement in the weekend.

I have to be clear though, it is not across-the-board.

It is in especially in the FIT and leisure segment has shown some relative strength in the last month.

April is very good for the entire industry.

I think that May is holding up that trend.

And I don't know how to attribute to what.

But I think there is some confidence building among our competitors, and certainly in this hotel, that we are seeing weekend rates on the leisure side trading up.

It has been very -- it is nice to see.

Group demand, as we said on previous calls, continues to be strong.

Unfortunately, pricing doesn't seem to accompany that demand.

So I would love to see our group business get back up in the higher ranges.

But what is happening clearly last week -- all of April was very, very encouraging on the weekends in the leisure segment.

And I'm hoping it bodes well for the summer, because you know, a lot of folks are down in (inaudible) in this summer, and they should have been, but there has been the last 4 to 6 weeks a nice trend upward.

Could we say the number?

I think we have been averaging on weekends between $240 and $260.

(multiple speakers).

Last weekend $262.

We had nice -- and lots of -- it just looked good.

It has been a recent trend though, Joe.

I think you saw the [MGen] numbers this morning, and I think what is happening in town the first quarter was not that strong.

I think we have got a ways to go in Las Vegas, but I am a little more optimistic, and have been the last six months, because I do see some leisure -- positive leisure trends.

Clearly demand on the group side is very strong, but the rates haven't been as strong.

Great.

Thanks guys.

You couldn't talk about tables, could you, Joe?

I will let the next guy ask about that.

Thanks.

[Janet Brashear].

I wanted to ask you about lots five and six in Macau.

We first heard strories of labor rallies against foreign labor and potential requirements that you have one local worker for every non-local worker, and cost escalations due to labor shortage.

You have a few dozen people on site now, but typically would have more like 10,000 to get a project of this size done.

What are you hearing from the government about your ability to bring in more workers?

And what does that mean for your timetable and your cost projection?

This is Mike.

At a meeting last Friday in Macau we had a very good meeting.

The indications we got were that there is some levels of -- it is a very low level of unemployment in Macau.

We actually have about, I think, 3,900 workers on the site now.

The indications we got as we left the meeting is that we shouldn't be worrying about whether or not we would be able to have the blue cards for our workers.

But we have to absorb some of those nonemployed workers in Macau, which we are willing to do.

We don't expect either us -- and I can't speak for Galaxy, who is going to have the same situation, about having a problem there.

We feel very confident they will have the workers to finish the project.

Will you have them on a quick timing?

So if you do what your part is, which is absorbing the nonemployed workers, is that a process you can work through quickly so that you can get your blue cards expeditiously?

Yes, we believe so.

I think that it is in the interest of Macau and the government and the citizens there that we be successful and get done.

And at this point there will be some time that we would have to execute certain construction contracts, which will probably last three or four months, before we get fully operational.

There are workers available outside of Macau obviously for that.

And at this point we don't expect to have a problem.

We will go through the process.

We will work through the process and we expect that we will be okay.

If we switch to Singapore, what was your biggest surprise in opening Singapore?

The biggest surprise in Singapore?

You are talking about the biggest surprise in the first week of opening?

Yes.

Oh, boy.

It is kind of tough question.

(multiple speakers) I think that I would have to say from a casino standpoint, I think the biggest surprise is the VIP premium -- the direct premium business, the credit business, the amount of credit applications, and the activity in our casino results, which indicate roughly around 50% coming from that particular segment right off the bat.

I think that was a big surprise to me.

I think the other surprise was that -- how well the casino was accepted in the community in terms of its positioning vis-a-vis the competitor.

All the press and all the support kind of lifted it to a different level.

And in mass play, the non-slot mass play was surprisingly good.

I thought the slot play would be what it is, but I didn't know that the mass play would hold on the tables.

The way we set the floor up, we set it up so that we would have enough tables to accommodate everybody who came.

So at some points there were empty tables or very slow play at some tables.

But there were no lines, no pushing, no shoving, no crowd that occurred in the other environment, and that was intentionally done.

So I was surprised how well that worked.

We had no lines, no difficulties, etc.

On the negative side, I think we were surprised at how much surveillance activity we had to do in the last minute to get tables open.

The amount of cameras kept being added.

And so as a consequence we didn't open some of the VIP rooms.

We only got about half of our tables opened in the Paiza area.

And that was a little bit of surprise.

We thought we were okay that we, but in the last couple of weeks this kind of went away from us.

I think for the resort that is basically, even though 50% of the GFA space is open, only really about 20% to 25% to 30% of the total resort is open.

And I think we are surprised at how well it was accepted by the community.

You said that the local crowd was less than -- was a low percentage.

Can you give us some idea of how low, and was it lower than you expected and --?

No, one-third, two-thirds.

(multiple speakers).

The first number of days in the casino you had foreigners, about 66% and about 33% Singaporean.

For a couple of days it was even 50-50, but most -- if you looked at the whole -- over the course of eight days it is up there.

Many more foreigners, Malaysia, Indonesia and foreigners from Singapore, primary markets, which we expected.

And the Singapore market about one-third to 40% maybe at the most of Singaporeans.

There is going to be 6,000 other rooms -- this is Sheldon -- in Singapore.

And they enjoy very high occupancy rate in the 80s typically -- mid to high 80s.

There is a lot of opportunity for foreigners to come -- that visitation to the other hotels, we're just going to try to set up shuttle buses between some of the bigger hotels, if they will allow us to do it.

There is good news and bad news on the opening day.

The good news is we had an awful lot of people.

The good news -- well, I shouldn't say good news -- the bad news.

The good news is -- the second part of the good news is that people looked at it and said, wow, there weren't a lot of crowds.

There weren't long lines that there was at [Genting], blah, blah, blah.

Did they have a lot of people?

Well [Genting] did have a huge 1.25 million square-foot convention center to warehouse the people in.

So what we did is set up -- they didn't have any air-conditioned space to put them in, so we turned the air on in the convention center.

We put in thousands of chairs.

We put in food service.

We put in counters where they could pay their -- Singaporeans could pay their $100 entry fee.

The real bad news was that we weren't allowed to advertise that we were going to be open.

But people just knew, and the rumor had gotten around that we are going to open on the 27th, and we weren't able to advertise it until the 27th, until most people already went to work.

So then we let the people in on an orderly basis, straight line, with (inaudible) and ropes and very orderly.

So we had thousands of people waiting, but I guess the journalists didn't know they were in there.

They were just shooting pictures of the people that were there on a very early basis coming into the casino from the convention center.

We should have -- I think all of us were there.

The one thing about the building, we should say it is a stunning building, by [Conex].

It is beautiful.

And I think everyone who went to the opening was very, very impressed, both tourists and (inaudible) is an amazing iconic building, in fact, if you are ever in that region, you have to see.

Mark Strawn.

I have two quick questions.

First question on Singapore.

I know it is early, but given the strength in the spot market that you're seeing so far, do you guys have any thoughts on reconfiguring the floor, and maybe including more slots and pulling tables?

And if you were to do so, would there be any labor or CRA issues in doing so?

Then I have a quick follow-up on Macau.

Let me just give you this answer.

We are in there eight days.

And although there is some sense of urgency to get the stadium electronic slots in, at this point it is really too early to tell what the movements will be.

We know we have to make some changes in the floor.

But it is going to take another week or two before we find some very -- I am on my way there next week also.

So it is going to take a little while to get exactly the right mix of business.

And that is going to be ever-changing.

So the only really sure thing now is we have ordered the electronic stadium seating games, and our mix of Baccarat to other tables is being looked at very carefully.

The size of the casino -- a lot of the traffic is coming into the sides and not moving towards the middle.

So there is a number of things we're looking at, which you find as you go.

So the answer to your question is, yes, there will be movement.

There will be changes.

On the other side, on the labor side with the CRA, it is a pretty free environment for us to do what we want to do, as long as the surveillance requirements are taken care of, but from a table side standpoint, if that is what you are really -- they won't affect us in terms of staffing.

Then on Macau, just looking at the mass performance, while it is certainly impressive, if you look at it sequentially, volumes have been relatively flat.

Do you guys have plans in place, whether marketing or otherwise, to try to stimulate volumes somewhat in the market?

A lot of the emphasis in Macau by the individuals in charge now has been on trying to build VIP direct market with our own credit.

We are doing a lot of that.

It is growing, as I mentioned, in the call.

I think it was 21% of our business in the quarter.

That will help us.

But with that strategy, as well as our strategy in terms of our MICE business and the tour and travel business that we have been working on and getting good results on, that doesn't build the same kind of revenue, as you know, of the junket rolling revenue.

That sort of dominates the revenue perspective of Macau.

So I can't tell you that our revenue will have sequentially the amount of growth, but I feel very confident that our EBITDA will continue to grow exponentially as we produce that kind of business.

We have no real plans to build our junket level traffic, as we have held to 1.25 also, we have lost -- potentially lost or been impacted by some of the Peninsula properties that give better rates.

So we are taking another -- we are taking another approach to it.

I don't know if that answers your question but --.

Yes, that is helpful.

One quick follow-up.

Have you seen any impact from -- has City of Dreams across the street been any more promotional?

And have you felt the need to match at all, or that has not be necessary at this point?

To our knowledge here we haven't matched it.

I have not heard anything from Steve Jacobson, the people over there that City of Dreams has been changing their 1.25 rate.

The changes that I hear -- oh, you're talking about in the mass market?

Yes, more on the mass side.

Well, they have done some things on mass.

They have done some promotion on some advertising.

We are doing some things in other areas now promoting business.

We have been pretty successful at it so far.

But you don't really see that unless you actually look at in our -- particularly in The Venetian and the Four Seasons at how many rooms are being sold every night to the non-VIP, the non-junket play.

And we are selling about at least two-thirds of our rooms, or more at The Venetian, on a paid customer basis now.

Okay.

Thank you very much.

That is a big indicator if you -- I don't know what City of Dreams is doing, but my guess is it is not nearly as much as that.

Shaun Kelley.

Just wondering, going back to Singapore for a second, if we could get a little bit more color on the VIP versus mass mix?

I think you talked -- you had mentioned just briefly that about 50% of the business was coming from VIP, is that correct?

That is correct.

I think the actual number for 8 days is 48% of the revenue from VIP.

Just kind of -- where are you at right now in terms of the tables that are up and running, given the surveillance issues, how many VIP and mass market tables are you at, and where are you headed for the next --?

We are at 70 VIP, 440 --.

Out of 139.

Out of 139.

We are 442 out of 559.

And we are 1,450 slots out of 1,642 slots.

Then, Mike, we have talked before a little bit about the commission and rebate structure.

Obviously you're not using junkets today.

Is that right now in line with your expectation?

And how should we think about the rebates that are being demanded in the market right now?

Rob can speak to that, I think.

But let me just say that we have always said and continue to say on the junket side that if there are junkets that are licensed by Singapore, we will do business with them.

We don't expect that to be many, but there will be a few.

On the commission rate side we basically -- our strategy on the commission rate side on the private -- for the VIP private play, we positioned ourselves much below the competitor in Singapore.

And the rates, we have not had pressure to move those rates so far.

The reason for doing that was that we thought that we would impact our WS' VIP business.

And if we competed dollar for dollar on the commission rate and they lost the business to us that they would start moving the commission rate up again.

So we positioned ourselves lower on the commission rate.

I can't tell you at the average is, because I haven't really looked at it in the eight days.

But it is below what the competitor has published as their commission rates.

So far we are not budging on it, because we are doing okay.

This is Sheldon.

The ramp up of the high-end is going well, but it is ramping up.

We are getting customers from places that we didn't consider in our priority countries.

We look at the breakdown of the apps for the credit, and we find they are coming from the main three areas, Singapore, Malaysia, and Indonesia.

And there are lots of very high rollers.

Substantially higher -- at least the numbers I have seen -- substantially higher than we have experienced here in Las Vegas.

We don't get a lot of $10 million, $12 million credit players here, although we do get some.

But there's a lot -- there is more than what I expected.

So we are still ramping up.

Particularly the first night that we opened, we had some surveillance table issues, and we couldn't open all the tables.

I would like to point out something that nobody has ready asked.

Our gaming table -- our gaming table win per unit is very encouraging.

It is difficult for me to give you the exact numbers, but let's put it this way.

When I did some estimates of what we would do, and I screened them, fixed it extensively, the number that I came up with -- now I have adjusted it based upon the tables that are not open because -- for various reasons, mostly surveillance.

The numbers coming in at higher than what I originally estimated to come up with our overall EBITDA number.

So we are very encouraged about the high-end.

I think a good part of that relates to the fact that we have a higher quality visitor compared to Genting.

People say they have a lot of the construction workers.

I personally wasn't able to get there for the few days I was there.

But everybody else has been there, and so the word that comes to me is that they have domestic help and construction workers, a lot of Bangladeshis.

And we seem to have -- just eyeballing against myself, we seem to have a higher quality person.

Mostly what appear to be middle class, lower to upper-middle-class people.

Just one last one on that.

On that number, just to be clear, you're talking about the $1 billion to $1.25 billion estimate that has been put out in the market previously?

We haven't given any guidance.

We have debated.

We said we came up with certain figures that were (inaudible) in excess of $1 billion, and nobody got there.

That we are looking at numbers and metrics that are on a ramp, and that seemed to go very well.

We can estimate -- we believe that the final numbers after the ramp up period, and on a 12 month basis, will be a heck of a lot closer, if not equal to or maybe even exceeding our number that we expect than the average of the consensus of all the analysts together at a substantially lower number.

Most of the analysts are estimating, you know, say slots as an example, at the normal US type of slot numbers.

But the slot numbers -- you know, the 200 rank.

Slot numbers over there, I am sure you have heard about [camping] in our slot numbers, I told you what they were on different days.

We still don't -- we haven't maximized the most desirable games.

So we have to do the fine-tuning of the table -- both the table games and denominations, and slots and denominations.

By the way, the electronic table games over there are considered slots, slot units, which will go up to 2,500.

And we believe that the slot return is so good and so promising for the future that we are going to -- we are seriously considering putting in as many as the maximum that we can in the near future, 2,500.

Thanks, everyone.

Robin Farley.

I wonder if you could help us quantify a little bit of the impact of luck in the quarter.

I know that you said your ranges for normal hold are going to change.

But based on the ranges that you have talked about before the quarter, if you could help us quantify?

Because some of the factors aren't in the release that would impact it, like whether the play came in under what kind of duration.

So if you could help us quantify that for both Las Vegas and Macau.

Then also a question on Singapore.

In terms of the stickiness of that local play, are most of the local visitors paying a one-time fee, or are you getting some signing up for the annual membership?

Just kind of think about how long-term or how sticky that local visitation is.

Actually, I don't think we have that information.

We were focusing on other stuff.

Does anybody have that information?

While we are searching information, I will just answer the Vegas hold issue.

I think our number is dead on and should be because of our mix.

Obviously we handled about $547 million in Las Vegas.

About 50% of the drop came out of our Asian (inaudible) Chinese New Year's week -- couple of weeks.

And so we didn't play lucky, we played what we should play, which is we held very well.

Our historical is in the high 20s.

We actually held in the low 30s.

But balancing that, the other half of the drop came out of our non-baccarat more typical US customer.

We held very poorly, about 13%.

We blended at the rate you see on the stat.

We blended [234].

But if you really look at -- I don't think we held high at all.

In fact, I think we held about dead on where we should be, because the baccarat business for the 10 years we have been doing this, we held 28%, 29% against billions of dollars of drop.

I think it is reflective of the baccarat market.

And the Asian play was disappointing to me.

It was we held back 5 points under norm on the balance of the drop.

So I don't think in Las Vegas results, because of the mix, would be considered [234] would be considered high.

In fact, I think it is right where it should be.

Perhaps we can talk about Macau and --.

We have tried to script this issue.

We have tried to find a way to neutralize it or level it out on the hole.

So I came up with the idea that we should take a 200 day, 100, 200 day or two or four quarter moving average.

So we put together some of the figures, and the moving average, say on the roll, and -- do you have the figures in front of you, Ken?

The moving average on the roll I believe was exactly 2.84% over four quarters -- 2.84%.

You can't get any more accurate than that.

We could have come 2 basis points higher at 2.85%.

But I think 2.84% is a very good moving average.

You've got to remember, so every time we come in with a lower number, nobody wants to adjust it upwards because we had a lower than normal number.

Everybody wants to reduce our performance down when we come with a high number.

So I think the average number should be what the average is.

Over the longer the period, the greater the law of averages assuredly kicks in.

Ken, do you want to make some comment about that?

Breaking it out between the rolling and the non-rolling, on the rolling side, Sheldon is exactly right in terms of the average, which is the 2.84%, 2.85%.

If you look at the actual numbers for the first quarter, we were unlucky, if you will, by about $5 million on the roll.

It is a little complicated because you have to look at it on the volume-based and win-based.

And the volume-based was more from an overall kind of revenue perspective.

And we were unlucky, if you will, from that standpoint and a little bit lucky on the win side.

So when you marry the two together, because the volume-based was a higher percentage of the overall revenue stream, on our net hold was was an unfavorable $5 million.

So you basically have to add about $5 million to our performance for that.

On the non-rolling side, did, if you compare it to the moving averages, we were a little bit favorable from that perspective.

But nonetheless, you have to look at it from the standpoint of we think that the actual performance that we achieved in the first quarter is kind of consistent with where the business has been performing over the last four quarters, and falling within that range.

So if you consider that our actual first-quarter 2010 performance was within the range of performance that we have seen on the non-rolling business for each one of the properties, in essence there would be no adjustment for the non-rolling business.

Now if you compare it to just a single data point, which would be the moving average, then we would have been favorable by approximately around $10 million or so.

So when you marry the two together, meaning the rolling and the non-rolling, we were favorable in total by about $5 million.

That was helpful.

Thanks.

Then just the last question.

Can you break out what your casino receivables are for both regions?

Just one second.

Well, our casino receivables for Las Vegas on a net basis is about $118 million.

For Macau it is -- hold on one second -- it is about $190 million.

And do you -- you obviously have in front you what percent reserved that is?

Yes, so in Vegas and we're about 31% reserved.

And in -- but you have to look at it between the breakout between junkets and non-junkets.

Overall it is about 23%.

But versus the non-junket business it is about 39% reserved.

Felicia Hendrix.

So, Sheldon, on Singapore, in your prepared remarks I thought that you had said -- had something to the tune of you are generating a 45% to 50% profit.

Did I hear that right?

You heard that the range of departmental profit for the casino, which we do every day.

Different days, depending upon the amount, came in between 45% and 60%.

Maybe it is give or take 45%, maybe 43%, maybe 47%.

But the hiring highest number I saw was 60%.

You know, I keep saying that we pick up 24% on the taxes alone versus Macau.

Thank you, Rob.

Versus Macau we pick up 24%.

And although we do give away from 0.75 to 1.0 to the players direct, we save at least 25 basis points on -- well, the average is probably somewhere between 0.75 and 1.0, so far at the high end.

So we are picking up 24 bips on -- 24 point on taxes.

That is a tough explanation.

We pick up probably another 11% or 12% on the savings vis-a-vis the [tech reps].

By the way, Mike said, and I would like to put a little more color to that, said that there would probably be some junket reps.

Now there are junket reps and there are junket reps.

Let's talk to the Macau style of junket wraps, and then the Las Vegas style of junket reps.

Las Vegas style junket reps are really field salespeople that send customers in, for which they get paid a basis of theoretical win with a cap.

Some of the higher-end players that people send in they make, what, $8,000 to $10,000 the field salespeople, the junket reps in the field.

But they're both unfortunately called the same things.

Then there is the Macau style junket reps, that not only deliver the customer, they provide the credit and collection, and they provide the cash.

So there is -- I don't believe there is going to be a lot of the Macau style junket reps approved because I have talked to a couple of them myself.

The only couple I have ever talked to.

They say they certainly don't want to give out the information, that they are very private people.

They have -- they are dealing a lot of cash.

And they will never submit that kind of information.

So I am very pessimistic that any of the Macau style junket reps will be approved, or will either not apply or will not be approved for inadequate information.

In Singapore, now there may be some field salespeople that are junket reps, like we use here in Las Vegas that might be approved.

But this range, which is impressive to begin with, is within your first eight days.

Assuming that, like other new casinos, you might not be as efficient, could we see this range shift higher?

You have certain fixed expenses, so I don't know how much higher you can get.

It has been -- our highest range of estimate was in the 60s.

I don't know how we can get much higher than that, because we have certain fixed charges.

Let me explain something on the mix.

We are doing three very diverse segments of this so far.

The slot business is one terrific segment thus far, as Sheldon and Mike offered.

The mass table market so far has been very exciting to us, as we mentioned the premium.

It really depends on the segment you're in, because obviously the most difficult segment margin-wise is going to be the premium, right, because you are discounting.

You're doing other things.

You're rolling.

You've got expense against that.

As long as our mix -- we are doing very well off these segments, but it depends on the mix how strong the margin gets, because obviously the slot machines, just for example on what -- $400 million, $500 million of slot revenue your margins are going to be extraordinary, far beyond 45%.

It really depends on your mix.

And if your mix on the mass tables ends up being $5 million to $10 million, that could be extraordinary, with [all this' labor and nominal complementary, so it really depends on the mix of your revenues.

The most difficult would be obviously the premium segment.

But I think it really depends, what Sheldon is referencing thus far, and all three segments are very strong, so it depends which segment performs the best as to what the eventual margin will be.

Just staying on the margin topic, if we could move to Las Vegas for a minute, Rob.

In this quarter you guys obviously saw a nice benefit from strong baccarat play, which helped margins.

But when we think about -- I know you're getting a little more optimistic, but when we think about how you should look for the next year or so, is this a margin base you are comfortable with, or should we when we go forward and model take into consideration that maybe you had extra good baccarat play this quarter?

Let's be candid.

No one can refute the fact we had exceptional -- our team -- our Las Vegas-based sales team for the Asian business I think is extraordinary, and they're proving it right now in Singapore and they're proving it in Las Vegas.

However, unfortunately, we can't figure out a way how to get the Chinese to come every quarter.

Like we want to make Chinese New Year's every month, we haven't figured that out yet.

So let's be clear, that -- we dropped $550 million and hold 37%.

That is a pretty good thing, right?

But what I think is most exciting for The Venetian and Palazzo Las Vegas is this -- what Sheldon prophesied a decade ago in terms of the group connection business still holds true.

As the market returns, keep in mind something I always tell people which is, every $10 of ADR can contribute $20 million to $25 million of EBITDA.

So I think we are really the first guys to step up and anticipate as a top-tier property, when the commission segment moves up, and group segment appreciates, $10, $10 lousy dollars of ADR translates to $20 million, $25 million of ADR -- of EBITDA.

I don't want to depend on Asian highrollers or even slot players.

The base business we're in is rooms and rates.

And we need rates to move for us to get back.

We want to be back to 6s and 7s.

But I think when it does come to be, we will be the first guys to jump in and participate from that side.

So margins are going to be -- are not going to be consistent when you're holding -- when you have that kind of handle.

Obviously that drives our business.

We are very proud of our slot win.

We had exceptional slot results, and again, almost $50 million of top line.

But again, what drives Las Vegas is our room rates.

And right now room rates will continue to be the decider of margin, the decider of EBITDA.

I just think when things get better, and I hate to be overoptimistic, but it has been a good couple, three or four weeks of weekend stuff.

And re-entering ADRs back $30, $40, this place makes a whole bunch of money.

Then speaking of that, when you think about 2011 -- you touched on it somewhat, but what kind of rates are you booking your group business at yet so far?

We are trying to stay above $200.

In some groups we are getting higher than that.

Very candidly that is our goal is to exceed $200 in 2011.

I can't tell you that we are there yet.

We have some business with [Flag] which goes back 6 to 8 months.

This is a very competitive group market.

Unfortunately some people in this town just don't believe they can charge $250 and $300.

We believe it.

If some people would stop discounting aggressive, this market could move quickly.

I mean that very sincerely.

I think the upside for us is significant.

It is material to our EBITDA.

But for our group business to move every time we take a piece of the business and we've got to knock it down $30, $40, because someone else says I will [let] at $170, it is painful, but it is a fact of life.

I think the town has to regain its sea legs.

Its belief it is a great place to visit.

It is stupidly inexpensive.

Groups are flocking here because despite some comments on Las Vegas earlier, Las Vegas is the best place in the world to add to your group.

People that don't have a group for a meeting here it is silly.

The rates are ridiculously cheap.

I think they only trend up drastically when people believe in the town.

I hope it is going to happen shortly.

But I think our rates for 2011 will be hopefully above [200], 215, but that is the best I can hope for right now for 2011.

Then final question, Sheldon, how is you -- how are the condo sales going?

How are the what?

Condos.

Co-ops.

Co-ops, I'm sorry, the co-ops.

The co-ops.

We are just in the throes of getting the final okay.

In days the last e-mail I got from Jacob said that he expects the ability to move it into the separate corporation that we have set up, and that he would immediately start selling.

The responsibility for that was moved from the Ministry of Finance to the Minister of Public Works.

And the last e-mail I got was positive -- was optimistic about our getting the okay.

And the sales activity, the condo -- well, they don't have co-ops over there -- but the condo market in Hong Kong as an example, was very strong.

And the condo market in Shanghai, which caused the Chinese government to say, well, we want to cool this hot market off.

The market had been hot enough.

And as Michael said, we are looking for other foreigners.

We are not looking for Macau residents.

So Steve Jacobs -- the sales department was booking up $1,500 a foot.

And I told them that we should keep our orginal target of $1,750 a foot.

And we are looking at a strong market in both Korea and Japan.

Larry Klatzkin.

Actually the majority of my questions were answered.

I guess one question would be, as far as Singapore goes, have you guys -- still in the mode of ramping up the mall, and would you still consider selling that mall if you are allowed to?

Not yet.

We can't sell it for a (inaudible).

No, no, no.

Under the sale of real estate, we can't sell it I think for seven years.

However, I still think it will be -- will get a lot more up in the next several months.

We will ramp up to completion.

It should be completed by the end of the year.

But I wouldn't even consider it until we found out that it had matured.

By mature meaning that it has gone up substantially.

Now that a lot of the tenants are in percentage rents, which go from 12.5 to 18 there, just like Macau.

And I wouldn't consider selling it now.

All right.

So once you hit Orchard Street numbers and past you will look at what you can do with it, and you could --

We will have to grow, and then see what happens, if we level out the growth or the growth rate stops.

If we feel we are getting toward the maximum, we've got to leave some room for anybody who buys it to have some growth in it too, besides just inflation.

So I would say it is -- if I had to give an answer today, I would say it is probably at least two years, maybe three away.

Of monetizing the cash flow stream.

Okay, that's good.

That's good.

And then, other than that, I think all the rest of my questions have been answered.

So congratulations on a great quarter.

I think -- thank you -- And I think on a good rate, I think that we would be able to sell it.

At a good cap rate we would be able to sell it at enough money to pay off our debt.

That will be fantastic.

The original budget -- and if we get into percentage rents, we get back to the original budget.

But a lot of the leases returned during the economic tsunami, but we still have the percentage rents.

And if they hit where the original budget was, we will be able to sell it and get back most of our costs.

That will be great.

$1 billion of cash flow and no debt.

All right, thanks guys.

$1 billion, who said just $1 million?

Larry, Sheldon.

Is your analyst orientation leaking out?

Are there any further questions?

There are no further questions.

Okay, thank you everybody.

It has been a good time, except that it felt like September 18 -- the stock market today felt more like September 18, '08.

But I am sure you will all respond positively to our good news.

Thank you.

Thank you for participating in today's conference call.

You may now disconnect.