拉斯維加斯金沙集團 (LVS) 2013 Q2 法說會逐字稿

Good afternoon and welcome to the Las Vegas Sands Corp.

second-quarter 2013 conference call.

I will now turn the conference over to Daniel Briggs.

Thank you.

Before I turn the call over to Mr. Adelson let me remind you that today's conference call will contain forward-looking statements that we are making under the safe harbor provisions of federal securities laws.

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 net income and hold-adjusted adjusted net income, adjusted diluted EPS and hold-adjusted adjusted diluted EPS, and adjusted property EBITDA and hold-adjusted adjusted property EBITDA -- all of 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 this presentation is being recorded.

We also want to inform you that we have posted supplementary earnings slides in our Investor Relations website for your use.

Finally, for those who would like to participate in the Q&A session, we would ask that you keep to one question and then one follow-up question.

With that I am pleased to introduce our Chairman, Sheldon Adelson.

Thank you, Dan.

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

We are extremely pleased with our financial results which continue to reflect our outstanding strategic positioning, strong execution, and position of leadership in integrated resort development and operations.

We delivered strong growth in revenue, cash flow, and earnings per share with hold-adjusted diluted earnings per share increasing 41.2% to reach $0.72 per share.

Our results continue to reflect strong execution against our core principle strategic objectives.

We are more confident than ever that successful execution against these strategic objectives will both extend our industry leadership and maximize shareholder value.

I will provide a brief progress report on those four objectives before we move to your questions.

Our strategic objectives are -- first, maximizing organic growth from our property portfolio.

Second, deliver additional growth by making new investments in our current market.

Third, identify and nurture new integrated resort development opportunities in geographic areas outside our current markets.

And, fourth, continue to increase the return of capital to shareholders (inaudible).

Focusing on organic growth, we again delivered an all-time record performance at Macao where our industry-leading investments and the unrivaled scale of our properties have again enabled us to deliver robust market-leading growth in the world's largest and most profitable gaming market.

We welcomed a record 14.6 million visits to our Macao properties in the quarter, an increase of 40% compared to the second quarter of 2012.

Adjusted EBITDA across our Macao property portfolio expanded 53.2% to reach a record $657.2 million.

Adjusted EBITDA across our Macao property portfolio expanded 53.2% to reach a record $657.2 million.

[Our mass] table win at Macao for the quarter was up a whopping 61.1% to a record $930 million.

Our growth for the quarter was twice as fast as the Macao market in the most important and most profitable segment in Macao.

Also impressive is our rolling volume growth at Macao, which was up 25.7% this quarter to a record $42 billion.

That represents VIP market share of approximately 17.4% of Macao market rolling volume compared to just 14.8% one year ago.

Our growth for the quarter was nearly 2.5 times faster than the Macao market in the VIP segment.

The Venetian Macao delivered the strongest quarter in the property's history.

The Venetian Macao leads the Macao market in visitation, business and leisure tourism [field], and last but not least, the generation of EBITDA which reached a property record $361 million in the quarter.

The Venetian's non-rolling chip drop increased 56.1% to reach a market-leading property record of $1.59 billion for the quarter.

Sands Cotai Central continues its steady [growth] with strong growth on display across the board.

Our mass tables (inaudible) and ETG win-per-day increased over 158% this quarter compared to the period last year reaching over $3.51 million per day.

Visitation at Sands Cotai Central exceeded 40,000 visits per day during the quarter, an increase of over 142% compared to the year-ago period.

EBITDA generation is also improving meaningfully and despite low hold reached $146 million for the quarter.

Had we held normally at Sands Cotai Central, the property would have generated approximately $170 million in adjusted property EBITDA during the quarter.

Now turning to Marina Bay Sands in Singapore.

Rolling volume was up over 24% compared to last year's second quarter reaching $14.4 billion.

On a hold-adjusted basis we produced EBITDA of $396 million this quarter at Marina Bay Sands, which was up about 6% compared to the same quarter last year.

Turning to our US operations.

Hold-adjusted, adjusted property EBITDA was up nearly 8% in Las Vegas and grew nearly 10% at Sands Bethlehem.

We are pleased to be generating growth in both the largest gaming market in the US, Las Vegas, and the fastest-selling gaming market in the US, Pennsylvania.

Now let's turn to strategic objective number two, development growth in our current markets.

The Parisian Macao, our fifth integrated resort property on the Cotai Strip and our sixth in Macao overall, is now under construction.

Piling work is now well underway and the substructure work in the podium and hotel tower areas has commenced.

Based on our current construction schedule, subject to timely government approvals, we are targeting the opening of the Parisian Macao for late 2015.

We are extremely enthusiastic about the Parisian which will be a themed, aspirational destination integrated resort featuring replicas of common Parisian landmarks, including a 50% scale replica of the Eiffel Tower.

The Parisian's offerings have been designed to appeal to a wide range of consumer [tastes], including the business and leisure traveler or family that is visiting Macao's attraction for the very first time.

The dining, shopping, and entertainment offerings at the Parisian reflect the cumulative experience and the Western flair in our 10-plus years of integrated resort development and operation in Macao.

The Parisian Macao will be seamlessly integrated with our other Cotai Strip properties -- the Venetian Macao, the Four Seasons Macao, and Plaza Casino, and Sands Cotai Central -- increasing the property portfolio's critical mass in business and leisure tourism appeal while enhancing the total returns of our Cotai Strip portfolio.

We are also advancing our plans to sell shares of a co-op venture to prospective buyers of Four Seasons branded properties in the Apart Hotel on the Cotai Strip.

On June 5, 2013, the latest approval on the development process was published in Macao's (inaudible).

The eventual sale of Apart Hotel units has always been a fundamental component of our Cotai Strip development strategy of monetization of core assets.

Moving on to strategic objective number three, the development of integrated resorts in new markets and geographic areas.

In Asia activity levels at (inaudible) have increased and we are pursuing the potential integrated resort development with great enthusiasm and optimism.

Korea has also shown increased activity and we are looking forward to the potential development of it.

We have also been investigating opportunities in other parts of the world.

With respect to Madrid, there are a variety of [steps] left in the development process.

Any investment would be subject to the receipt of government approvals and the finalization of a grant and incentive package that would enable investment, as well as success, in a competitive tender process.

I have a vested interest in pursuing on the highest value projects that will maximize shareholder returns.

As the Company's largest shareholder, my interests are aligned with yours.

Finally, let's review strategic objective number four, the return of capital to shareholders.

We have now returned nearly $4.5 billion of cash to our shareholders through dividends and stock repurchase over the last 18 months, including over $3.7 billion to Las Vegas Sands shareholders and nearly $700 million to the non-LVS shareholders (inaudible).

It is gratifying that we have built our businesses and expanded our cash flows to the degree that we are able to return to shareholders such substantial sums while retaining a strong balance sheet and ample liquidity to fund future growth opportunities.

We have every intention of increasing the recurring dividend at both Las Vegas Sands and Sands China in the quarters ahead as our business and cash flows continue to grow.

We are also pleased that the Board of Directors of Las Vegas Sands authorized on June 5, 2013, a $2 billion stock repurchase program.

The stock repurchase program will complement our previously established recurring dividend programs at Las Vegas Sands and Sands China and will provide another avenue for the Company to return capital to shareholders.

I am pleased to report that we are able to complete the establishment of the program during the quarter to repurchase 883,000 shares of stock at an average price of $52.71 per share returning nearly $47 million to shareholders.

We believe the repurchase program will enable the Company to enhance shareholder returns in the future.

In summary, we are executing on all four of our strategic objectives.

I also wanted to point out that our leadership team is doing an outstanding job across the board with our industry leadership, outstanding strategic position, strong operating momentum, and the disciplined experienced leadership team we have in place to execute our strategy.

I couldn't be more confident about our continued success in the future.

With that let me turn the call over to the operator to begin our Q&A session.

(Operator Instructions) Shaun Kelley, Bank of America.

Good afternoon, guys.

Just wondering if maybe you could start with either Rob or Sheldon giving a little bit more color on the ramp up that you are seeing at Sands Cotai Central.

It seems like the VIP side is very strong there.

You saw some pretty big sequential growth in mass as well, but we did notice that the hotel occupancies dipped from last quarter.

So how do you see the hotel side ramping up and what you are seeing out of the player behavior there would be really helpful.

Sure, Shaun.

It is Rob.

I will just discuss the gaming issue for a second.

Really pleased where SCC is going.

The big driver, obviously, is mass tables.

We grew from $30 million Q2 of 2012 to $114 million this quarter, so terrific growth there.

We are seeing obviously VIP segment is leading our portfolio, so very positive there.

Sheldon referenced in his opening remarks the lack of hold percentage, which is actually evident across the whole group of segments in SCC, so we actually hold-adjusted about 170.

We have always felt this is a $1 billion property.

We think that run rate will be achieved some point; I am not sure this year, but certainly in 2014.

So very, very pleased where it's going.

The cross-traffic between SCC Venetian continues to build.

I think SCC -- we have always said it's built for the best market segment in Macao, that being the mass market, and that mass market segment is fueled by sleeping rooms.

We have got 6,000 keys all at the Venetian.

We have 9,000 keys between Venetian and SCC.

Really bright days ahead in the gaming piece of this building.

Really, really pleased, especially about the mass ramp there.

Across the portfolio our mass ramp grew from -- it went from $577 million last year across all four properties to $920 million this year, so I think the staggering growth in Macao continues.

We are the leaders in mass segment.

We are approaching $4 billion of top line there.

So very pleased where SCC is going, very pleased of the future.

I think the rooms drive it.

As we get more retail occupancy that will help the gaming piece as well.

Then I guess my follow-up would be, to maybe switch gears, on the strategic side.

You did get another approval for moving ahead with the Four Seasons co-op sales.

Could you just talk about possible milestones behind that and then also what that might mean for development of the St.

Regis or perhaps the last set of the -- kind of the fourth tower over there at Sands Cotai Central?

That would be really helpful.

That fourth tower is the St.

Regis and that is a combination of a few hundred rooms, about 450, 500 rooms, plus about 300 apartments.

The government has informed us that once the precedent is set with the Apart Hotel -- by the way, the St.

Regis -- we have been sitting with an approval to go forward with the St.

Regis, but since we don't have the approval to sell the apartments under co-op or any other scheme we decided not to go.

But we still have the building permit.

So I don't know what you mean by milestones leading up to that.

What I mean by -- I guess what I am getting at is what is next?

Can you guys begin to pre-market condos at the Four Seasons right now or do you need any additional approvals before you can do that?

No, no, we are all set.

We are lining up the project management and the sales team, and we don't need any further approvals.

There is some minor things to resolve such as how many apartments are going to be put in a rental pool or the alternative, how many apartments will be held aside to rent.

Those are minor negotiating points that we have to finalize with the government.

However, as far as being able to sell them, we have that approval and that has been [consented].

Thank you very much.

Joe Greff, JPMorgan.

Hello, everyone.

Obviously a big topic of late for all of us on this call has been concerns about a slowing macro picture in mainland China and whether or not that is going to have some sort of impact in Macao.

And it doesn't appear to have any impact on results in 2Q in Macao, or Singapore for that matter.

Can you talk about what you are seeing more recently, if there is any change in consumer behavior, any kind of impact, any changes in general liquidity?

I will keep this broad as that.

And I have a follow-up, thank you.

Let me tell you, the consumer behavior is going in the right direction as far as we are concerned.

There were more people coming in spending more money.

The macro view about China is not affecting the visitation to Macao.

If anything, the visitation is increasing.

Well, not if anything.

I can't give you a projection, but let me leave it at that.

If anything -- if there is any impact, the visitation is increasing.

Look, this has been going on for nine years, since 2004 since we started.

Every time there is -- some journalist decides to say something in the market and writes an article, typically without having the authority from the central government to state about how many visits one individual is allowed, how many IVS's, individual visit schemes.

It is everybody -- everybody starts to scratch their head and wonder if there is anything doing.

To our knowledge, if there is anything to a macro slowdown in China, it is not affecting Macao as far as we are concerned.

It is just the opposite of what people are suggesting.

Joe, to amplify Sheldon's comments, if you turn to page 11 in your investor deck, this slide illustrates [SEO's] year-on-year growth in the most important segment in Macao, mass table games.

SEO has grown 60% in the last year to $920 million from $577 million a year ago in this segment and the margin is still mid-40%s, 45%, 46%, 47%.

It is just a staggering market and this segment is the growth engine.

The segment has grown from $2 billion in 2005 to $13 billion this year in Macao.

We have 1,000 games on the floor currently doing $10,200 per day.

Upside in this segment comes from the organic growth from the Macao market, specifically in Cotai.

Our ability to leverage our hotel and retail asset base in Macao, and Cotai in particular, to drive much higher win per unit.

We are just in a unique position to improve dramatically and see SEO's mass table growth to $4 million, $5 million, $6 million (inaudible).

We are in a very fortunate place in a very strong market and I think the numbers speak for themselves.

That slide to me is staggering and the profit margin is equally staggering.

So this is the story of Macao and the consumption on the mass tables just grows and grows and grows.

Excellent.

Then my follow-up is you started buying back stock at the end of the 2Q.

Have you bought anything since the quarter ended here in July?

And also on this topic of share repurchases, can you review your strategy with regard to repurchases?

Is it more programmatic consistent or is it more episodic depending on the valuation and depending to movements in the stock price?

The latter, it is opportunistic buying.

If we see the stock price down below where we think it should be, we are going to buy.

But once we start to buy we don't know whether or not people know we are buying or we don't know, but the stock seems -- as soon as we step the stock seems to go up.

But we can't state what we have done so far this quarter because that would be selective disclosure.

All right, guys.

Good stuff.

Thank you.

Cameron McKnight, Wells Fargo.

Great, thanks very much.

First question, can you talk to the hold percentage in Singapore?

This has been the third quarter in a row where hold has been a little bit lower than expected and we have had a number of questions from folks just asking about that.

So if you could address that that would be great.

Then I have a follow-up.

Sure.

You are right; this is actually the fifth quarter we have been under where we would like to be at, but still life-to-date since we opened the property hold percentage is about 2.65%.

And in the aggregate, if you add our competitors, the market is about 2.9%.

No mysteries here.

We have had a lot of amazing play.

We are running at a run rate of $60-plus-billion for the first time ever in this year.

Very encouraged by it and have no concerns whatsoever.

We take very large bets there; the swings are dramatic.

The market is very concentrated.

I have no explanation except in the end the math always wins out.

Across our portfolio worldwide when you add up what we do here in Las Vegas and Macao and Singapore, the numbers are just where we expect them to be, north of [2.85%] on the rolling segment.

So total confidence in our team, total confidence that nothing untoward, very confident in the end the math will prevail, so no concerns there at all.

Just like the cards don't know how much money is being bet on them, the law of averages is not impacted by anybody's questioning whether the average, whether above average or below average -- it always turns out.

The law of averages, like the law of physics, doesn't change.

Over the long-term the number is going to be 2.85%, that is why they call it a theoretical average.

To reach the average you have to have some periods below and some periods above, and it all ends up at 2.85%.

We did have a couple of exceptionally strong quarters back in late 2011, early 2012.

We held 3.5%, 3.6%, but it has been a disappointing run.

But one of these quarters we will break out and hold 4.2% and life will go back to 2.85% so no concerns.

Right, got it.

Then as a follow-up, Rob, we are hearing on the ground in Macao that some operators have been increasing the amount of credit they are extending to junket operators.

Can you talk to the overall credit environment in Macao and also the VIP market there and conditions there?

The VIP market, the numbers speak for themselves.

The market has not been the growth engine it has been in the past.

We continue to believe it is not driven by credit; it is driven by lack of back-end demand by the consumer.

We are happy to extend credit because our credit track record in Macao has been excellent.

The fact is when the managers will extend the credit; I don't think it is a credit-driven issue in Macao.

I think they operators will give credit.

It is demand driven by the consumer.

To be really positive about it, we are happy to participate.

We are very happy where we have gone in that segment in the last couple of years, but from our purposes, the VIP issue is all about consumer demand.

If demand is there, we will extend the credit.

Our junket partners will extend credit.

But that story has been overwhelmed by the extreme growth in the mass side of the business.

So as much as we want to keep participating and growing our junket business, our year and this quarter is dictated by the ridiculously strong returns in mass tables.

Our junket business is better for us.

Well, it is not junket business, but the VIP business is better for us in Singapore.

One, because of the tax rates; and, number two, because the junket reps themselves don't limit the amount of bets that the players can make.

We can accept very large bets, up to SGD1 million, but the junket reps in Macao have too many customers and they don't want to take that risk.

Because if everybody bets SGD1 million a hand and a hand -- as you probably know, unless somebody twists the cards takes about 30 to 60 seconds.

So we would rather see that high-end business and, fortunately, there is no -- we are paying very high commission to the players but the tax rates help make up for that.

So we would like to see more of that business, the SGD1 million hand business, down in Singapore but we are not doing anything to push it down there.

It just happens to go there.

Okay, great.

Thanks very much, guys.

Felicia Hendrix, Barclays.

Good afternoon.

Rob, I wanted to talk about your mass table yields in Macao a bit.

You have been increasing the number of mass tables and your mass table win per day has been going up.

In the quarter it was flattish, which is pretty impressive.

So I just wanted to talk -- wanted you to speak to what you are doing to drive those strong results.

And then I have a follow-up.

It is flattish in the win-per-unit basis, but in the aggregate it is growing up because obviously more tables on the floor.

It is pretty simple, it is yield management and we are looking at our junket yield versus our mass table yield.

This story, as you know, Felicia, this industry just doesn't have any place where you can make $10,000, $11,000, $12,000 win per unit per day.

It is beyond comprehension for me.

When I go to Macao it is shockingly strong and growing across the entire market.

So we are simply, as managers, looking to get the most yield we can at a table.

As long as junket performance stays on par we will stay with junkets.

It is an important segment, but the reason we are moving more tables to the mass floor is evident by looking at our numbers.

We increased over 1,000 mass tables.

We may go 1,100 mass tables.

We will just keep riding the wave.

When you realize what is happening in mass tables to think about the fact that win per unit in that market has grown to as high as $12,000, $13,000 at 45% margins, how do you not do what we are doing?

It is the only intelligent thing we do as managers and that is to yield up.

We do that in Pennsylvania.

We try to do it in Las Vegas wherever it is possible, but no place is like Macao.

As you well know, it is just extraordinary and we are very fortunate, because we may be somewhat overrepresented in one segment and we will adjust accordingly.

So I am not concerned about our win per unit, if you're down, it's down 10.2, 10.1.

But the aggregate win is up significantly.

We keep adding more and we will keep doing it because we believe that mass table business, as long as it is 20%, 30% growth, we are the biggest beneficiaries.

The primary growth resides on Cotai, that is our biggest representation of tables.

When you see the kind of numbers we are getting out of Venetian and SCC it is very, very gratifying.

So that is our direction; as managers, we want to yield up and we will keep doing that.

Great.

Then just moving then to the slot side, kind of similar conversation.

So the numbers in the slots in ETG's have been declining and the slot win per day as well, so I was wondering if you could discuss that.

Exactly.

We keep changing the mix there and we are big fans of slot ETG.

The margins are breathtaking, 50%-plus.

I would like to see that business grow across the board, not just for our company, but Macao is somewhat flattish and that growth is somewhat surprising to me.

But I think, as you know, as you yield up on mass table games you are pushing a segment of the market the consumer can't participate in.

I think the real value to our slot ETG program, especially ETG, is it offers a place for the customers not betting HKD2,000 to have a place at the table so to speak.

So we are complete believers and we have -- one of the things we did very well -- when Sheldon built the Venetian people were shocked at the sheer size of the building, but in the end it was a great trade because that real estate now, which a lot of people felt was wasted space, can now deploy a massive ETG slot strategy.

It enables us -- to be honest with you, a lot of customers are pushed out of the market.

The table yields have pushed up the numbers so high on the minimum bets that they are looking for an alternative and that is what ETG's do.

I am surprised it's not growing faster in our portfolio, but we have a lot of confidence.

It is a great segment.

I still believe there is a day we will do $1 billion of slot ETG in the aggregate across our portfolio.

So not as exciting as mass tables for this quarter, but still a really nice segment to be in and one we are very committed to.

Great.

Thanks a lot.

Carlo Santarelli, Deutsche Bank.

Good afternoon.

Just as you look at kind of the cadence of share in the market, as the mass market continues to grow obviously your presence in that market should be a net benefit with respect to share.

But over the last few quarters here as Sands Cotai Central has ramped we have kind of seen a flat line at about 21%, and I know you guys are trying to optimize that.

Is there anything here on to come in the future where you think there is some low-hanging fruit and an opportunity to start to take a bigger share of the wallet over there?

Yes, I do.

I think we are in the pole position to do just that.

If you look at our ramp this quarter, you think about growing from 5-something to 9-something year on year -- what business in the world grows 60% of a 45% margin?

Yet, to your point, Carlo, we are exactly positioned to do that.

Because of -- we are on Cotai.

We developed Cotai with the idea -- it is a mass-market machine -- hotel rooms, fabulous retail opportunities.

So to your point I think we have a lot of growth ahead of us.

I think $4 billion, $5 billion, $6 billion, who knows how high it goes, but we are positioned very well because we have the tables, we have the sleeping rooms, we have the retail, we have the whole show.

No reason why we think we can't keep yielding up materially.

I think SCC is going to be a big surprise to a lot of people as it goes beyond $1 billion of annualized EBITDA.

I think Venetian has upside potential.

We have struggled with the Four Seasons to get there; we are going to get there in terms of the yield per table, but our story is about the ridiculous growth in mass tables.

It is primarily a Cotai story.

We are the biggest Cotai provider, so I think our story is just beginning.

We are in the infancy of this growth.

This is not -- the story is just starting to be told now.

Thanks, Rob.

I think the vision of Sheldon building Cotai -- this never could have happened without Cotai.

You don't have the physical space to build these big places if you are stuck in the peninsula.

The vision here a decade ago to build Cotai is now really being fulfilled.

The vision is really starting to really occur where I think our properties are going to grow and grow in this critical segment.

And, Carlo, just to clarify what Rob said, he is talking about mass the whole way and we have gone in a year from 24.3% of the mass market for tables to 29.9%.

So that is what we are focused on, not the revenue number that includes the 11%, 12% margin business.

We are always going to be focused on that piece.

You have got to remember that SJM that maintains the leadership and the gross gaming revenue has 19 what I would call sublicensed casinos.

19.

So they are each picking up a piece of business and they are not -- they are just sublicenses that have been there for many years that the government allowed Stanley Ho and now SJM to sublicense their license and their ability to operate casinos to 19, 20 other people.

And yet they are only 2 or 3 percentage points ahead of us.

We are operating five casinos if you separate five and six and the Plaza, the Venetian, and the Sands, so there is only five.

They are operating over 20-some-odd casinos.

Sure, that is not for gotten.

Thank you, guys.

That is really helpful.

Then just quickly on the Four Seasons.

I know, Rob, you mentioned it a little bit there.

Obviously the mass hold was a lot lower this quarter than it has been running but on better drop in volume.

Is there anything structurally there that has changed maybe that would make us think about it differently going forward?

No, nothing at all.

Let's not go into the whole cage drop issue, but -- it's not worth talking about.

But the Four Seasons is a work in progress.

We are not happy where we are at right now.

We can do a lot better and we repositioned that.

We are in a transition period, Carlo.

I think we all know that.

As we move more into this premiums mass, mass business there our numbers will get better and hold percentage will be what it is going to be.

We know with that kind of volume the hold percentage pretty much stays flattish when it is all said and done.

Great, guys, thank you.

When we sell out the 300 apartments at the Four Seasons that will bring us in a lot of direct premium or premium direct at the high end, because anybody spending several million dollars from the casinos is going to play at the Four Seasons.

They will be direct play or they will be premium mass.

So that is one element that is going to contribute to an increased growth and increased EBITDA number.

Appreciate the color, guys.

Thank you.

Just like to emphasize, we have never been an advocate of gross gaming revenue.

I know you have to start somewhere, but everybody -- you got to start off at the top line somewhere, but where you end up at the bottom line is the most important thing.

And every single quarter since 2004 we have done more than anybody else in Macao, and we continue to do more.

Nobody is even close to us.

You could bring in -- a lot of these guys that are doing a lot of business are only doing it because they are trying to be competitive with us.

They are trying to increase their gross gaming revenue because they think that that is the bottom line.

I never saw anybody to deposit in the bank gross gaming revenue, only net profit.

The teller doesn't take GGR.

Steven Kent.

So two quick questions.

One, as much as people focus on the hold percentage for Singapore, the volumes have been very, very strong, especially at the high end.

I was just wondering if you could give us some indication as to what is driving maybe some of that incremental volume, because at one point there was a question about that.

Also on that same on Singapore, the slot play also volume was very, very high and whether there is some early thoughts from that that might be part of your strategy in other parts of the world.

Then one final thing; CFO search, if you could just give us an update on that.

I will just tell you that the fact that we are taking up to a SGD1 million is contributing to a very big top line rolling number.

That doesn't mean every bet is SGD1 million.

Some guys just want to have the right to bet SGD1 million if they want to bet it.

It is a matter of ego.

They boast to their friends, oh, I could play SGD1 million a hand if I want to.

The CFO search; we have retained an executive search firm and we are looking so far as I know.

Mike is involved with that.

Mike?

We are in the process of the final selection search.

We have done all of our specifications.

We are reviewing our alternatives and doing specific situations as to how the job should be really put together.

In the meantime, our team is doing very well, and as you know, Ken is still there so we are in good shape there.

We expect that we will have something happening in the next three to four months.

Sheldon, just on the Singapore, the amount of volume there.

Besides the propensity for people to make big bets what I guess I was asking was were you seeing more people from different parts of the world?

Because, again, that was one of the strategic focuses to go deeper into Southeast Asia to bring more and more customers into Singapore and are you starting to see that?

Steve, it is Rob.

Frankly, the answer is it remains the same sources.

That being, we have always said it is concentrated.

Certainly Mainland China is the primary driver, Hong Kong.

Singaporeans who are PR's, permanent residents, in Singapore are important as well.

Indonesia.

The regional hasn't changed a whole lot.

We still see some business from Tokyo and Korea, but the principal drivers in the last two quarters have been A) Mainland China/Hong Kong, B) permanent residents living in Singapore who may be Chinese nationals, and then C) Indonesia.

Again, this remains a highly concentrated market.

I don't think there is a whole lot of difference in terms of previous quarters and I think it will remain highly concentrated.

Hopefully, we will grow it.

We are pleased to see ourselves getting into the $60 billion annualized run rate area, but the challenges remain the same.

Sheldon referenced the high nature of the betting.

We take the highest bets in the world there and our team is committed to keep trying, but I can't tell you if something is going change from the last year fundamentally in terms of that.

Your reference to slot ETG, I think you know the story there.

Everyone knows that the government has been more restrictive vis-a-vis Singaporean local play.

We are outsourcing, or I should say, we are growing our business outside of Singapore, both premium mass, primarily table; slot to a lesser degree.

The slots have been challenging because primarily slot business in any market is regional.

It depends on the region you are in.

And less visitation by Singaporeans has been more than offset by increased visitation by non-Singaporeans.

Indonesians, Malaysians, Chinese, etc., have helped our business there.

We remain confident that there is growth ahead of us in the win per unit per day and the mass table, non-rolling, as well as slot ETG.

But we are kind of flattish this quarter.

Overall, the blend is around $4 million or $5 million and change.

We would love to get back to a -- and our ambition two years ago was to approach $5 million a day.

We haven't seen growth Q-on-Q, but we are lapping last year's -- it happened second quarter of 2012, the pullback by the government.

So we grow our business outside of Singapore; remain confident there is some growth there as well.

Thank you.

Thomas Allen, Morgan Stanley.

You had talked earlier about the improvement in visitation to Macao that has played out the past few months.

What is your view on what is driving the increase and do you think it is sustainable?

There appears to have been a number of infrastructure improvements, but the past couple months also had easy comps, so I just wanted to hear your thoughts on it.

Thank you.

I will start off with the first comment.

It's the infrastructure.

There are more high-speed trains coming from Guangzhou and there is more and more trains that are coming from the north from Fujian province.

The further out the tentacles reach with the high-speed rails the more visitation we are going to get.

There is more and more infrastructure coming in.

They will be able to move around with the light rail system a lot faster.

And I understand that -- well, we were talking at length about this yesterday.

Once the bridge, the Hong Kong-Zhuhai-Macao bridge opens in three years, hopefully earlier, it is going to be Katie bar the door.

It is going to be incredible numbers of visitation, because instead of having just the Macao airport you have got the Hong Kong airport that is already bringing in -- handling 50 million, give or take, passengers a year.

You are getting -- so if somebody says, okay, I can either go to Hong Kong Island, which takes 45 minutes, or I can go to Macao which takes 20 to 25 minutes.

So once I leave the airport I go to the right I am going to Macao, I go to the left I am going to Hong Kong.

When that opens it is, like I said, Katie bar the door.

There is going to be incredible -- it is the infrastructure that is holding up a significant increase in potential attendance.

Then I mean last year there were around 28 million visitors to the market and you have said the past two quarters you have had around 14 million visitors to your Cotai properties.

Do you have numbers around where you think that will go, maybe in 2016 when the new supply opens?

Thanks.

I don't think that anybody could say.

It depends how many trains they put on the high-speed rails, how far out they are going to go that people can travel.

What used to be eight hours is now two or three hours and people go for one night stays in Macao instead of going eight hours in each direction and take quite awhile to travel.

I don't think anybody could read that crystal ball.

But one thing, I feel very confident that is why we are building another Lot 3. We are building the Parisian to over 3,000 rooms, because I don't see any reason to limit the number of people.

You are talking about Macao having two airports, the Macao Airport and the Hong Kong Airport.

As a matter of fact, it would be just as quick to get into Macao from -- quicker to get into Macao than Hong Kong.

They say that -- talking 45 million visitors, I think, to Hong Kong and we had 28 million visitors last year.

But based upon our counts in our properties, on a same-store basis we are looking at significant increases in attendance.

I can't get into much further, but when I say significant it is more than 5% or 10%, a lot more.

Very helpful.

Thank you.

Harry Curtis, Nomura Securities.

Can you give us any updated thoughts on development in Japan or casino legislation in Japan given the LDP's recent victory?

Listen, we have been lobbying there for five years and we have had a very strong presence there.

We know everything that is going on.

The Restoration Party headed up by Hashimoto in Osaka, who was alternately governor of the state of Osaka and mayor of the city of Osaka, going back and forth, and Ishihara the former mayor of the Tokyo Metropolitan Government and/or just Tokyo.

It is kind of like a city and a state.

It's like New York, New York.

They wanted to submit the bill in June, but they didn't have the clout.

They didn't have a number of votes to carry it.

Right now it appears as though November is the anticipated date that the bill will be submitted.

The problem with the bill -- well, there is good news and there is bad news.

The good news is they are finally going to submit the bill to legalize full casino gambling.

The bad news is it is going to take a couple of years.

The other guys wanted to do it, but (technical difficulty) limit on.

Now it looks as though two years is the outside limit; it could get done a lot sooner.

It is not that you have to -- that the various candidate cities have to wait two years, but it has to be done within two years.

So we don't have any more inside information.

Okay.

Then let's move on to the second, which is kind of the genesis of LVS Vegas.

Most of the metrics there were better -- slot, table, and RevPar.

Is there a better tone there or do you think it is a head fake?

I don't know.

Listen, as long as President Obama doesn't say you can't take taxpayers' money and go to the Super Bowl or to Las Vegas we stand a chance of going back up again.

I don't know if that is (inaudible) anybody could say there is any significant turn for the better or significant turn for the worse.

I think it is stupid.

Harry, I think you know it is a challenging place in terms of it has to grow ADR to improve, obviously, the non-gaming side.

That is going to be the challenge in this town and that will come first out of the convention segment.

We think that is -- we are hoping for a turn there in 2014.

And the gaming side, truth is we are very dependent on high-end premium Asian players who come here.

And although we have participated -- we have done very well in that segment, we are happy to be it -- the entire town doesn't share equally in that.

And on the gaming side, slot and mass tables continue to be mediocre.

The premium segment is very strong on the Asian side, but that is the tale of Las Vegas today.

I wouldn't call it a head fake as much as it is just a challenging market that will slowly get better, but I wouldn't look for rapid improvement the next few quarters.

Look, I think the issue, Harry, is that there are two companies that own about 20-some-odd properties on The Strip or just off The Strip, and they are really controlling the room rates.

We had -- during our growth years, our first decade, we had the highest grossing hotel room income for almost even for a small to medium-sized chain.

The Venetian proved itself as the most profitable hotel ever.

Now we have two major holding companies, holding/operating companies, Caesar's and MGM, both of which have significant debt and they don't have a big way to pay them off.

Caesar's has got $22 billion, $24 billion and I guess their income just barely pays their debt service so maybe it exceeds it.

So they are trying to fill up all their rooms and get more bodies in to play the slots and to play in their casino.

I don't necessarily blame them.

I suppose if I were in their position I might do the same thing.

They need bodies in their casinos and they need bodies in their beds.

And the only way to get them is to buy the business by reducing the price.

And that brings down my friend Steve Wynn's and our higher-end properties where they are undercutting us by large amounts.

Of course, they don't the quality -- well, the Bellagio is good, but they don't have the number of rooms that we have at the high end of the market.

So, obviously, people want a better property they will pay more for us.

But they are trying to -- the sucking sound that we hear is there room pricing and trying to reduce the -- trying to fill up their properties so they can do something to help pay off their excessive debt.

They don't have the business model we do to sell off non-core assets and pay down all our debt.

We could be totally debt-free by selling off just our malls.

Not necessarily the apartments, but just the malls; we could be totally debt free.

So that is an opportunity that we have that others don't have.

As long as they are in that position, they are going to keep the room rates down.

Hopefully, they get out of it.

Ian Weissman, ISI Group.

Good afternoon.

You guys gave timing on the opening of the Parisian.

Was there any update on the table allocation?

And any concern about competing with four or five other projects going at the same time and labor shortages in getting those projects built on time?

Well, the government would not have given building permits if they did not think they would have the -- they could allow the labor.

Right now there has been no change in our estimate.

As a matter of fact, we are moving a little fast because we are practicing the follow-on trades, practice like you do in building high-rises.

As soon as you finish the structure, you come in with MEP and you drill through the floors etc., etc.

Then you have one trade following another sequentially.

We are doing that in the pilings.

We have both board pilings driven pilings.

What we are doing is taking the corner of the pilings and we are putting the piling caps on as each of the pilings are completed.

So we are starting off the -- it's sort of a foundation.

You put the pile caps on and then you start the structure on top of that.

So we are taking advantage of the opportunities to keep the foreign labor that we have and trying to get it done even quicker.

That is helpful.

There is no new news on table allocation.

We have always been -- every company I have ever run in my lifetime I have always been a competitor.

I could touch wood, except my table is wood, but it's now stone.

That is helpful.

One last question.

Just given the enormous success of the mall at Marina Bay Sands and it is sort of in the early stages of the cycle of the mall, maybe you could talk a little bit about the re-leasing spreads.

As leases are coming due or you are turning tenants over what type of rent uplift are you getting?

I don't think I can answer that, I am not sure.

Last time I talked to our Head of Leasing he was optimistic that because the people who wanted more space -- they want bounty-level space.

Like Chanel started off with two or three floors and put large identification, large signage and there were other tenants doing that, Prada and other tenants.

The Crystal Palace or Crystal Pavilion with Louis Vuitton is doing over $120 million in sales -- $120 million, $140 million.

It is one of their best shops in their entire chain.

So retail is going very well.

I am certain that -- look, we are getting a base rent plus percentages.

There are other developers that get base rent plus 2% or 3% on top of the base but they charge a very high base.

We charge up to 18% rent, so whether we get a due or we get it by increasing upon when leases expire, it doesn't make any difference because we are getting the percentage.

We are doing very well.

I am very happy.

We could sell that mall and pay off almost the entire cost, not just the mortgage.

Okay.

Thank you very much.

Ladies and gentlemen, that does conclude today's conference call.

Thank you for your participation and you may now disconnect.