拉斯維加斯金沙集團 (LVS) 2018 Q1 法說會逐字稿

Good afternoon.

My name is Latoya, and I'll be your conference operator today.

At this time, I would like to welcome everyone to the Las Vegas Sands First Quarter 2018 Earnings Conference Call.

(Operator Instructions) I would now like to turn the conference over to Mr. Daniel Briggs.

You may begin.

Thank you.

Joining me on the call today are Sheldon Adelson, our Chairman and Chief Executive Officer; Rob Goldstein, our President and Chief Operating Officer; and Patrick Dumont, Executive Vice President and Chief Financial Officer.

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

The company's actual results could differ materially from the anticipated results in those forward-looking statements.

In addition, we may discuss non-GAAP measures.

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

We also want to share that we have posted supplementary earnings slides on our Investor Relations website for your use.

We may refer to those slides during the Q&A portion of the call.

Also, Las Vegas Sands adopted the Financial Accounting Standard Board's accounting standard codification 606, revenue from contracts with customers on January 1, 2018.

As such, all of our earnings materials reflect the adoption of ASC 606.

Further information, including a comparison of LVSC consolidated results as originally reported and as reported reflecting the new accounting standards is available in separate supplementary earnings slides on our website.

Finally, for those who would like to participate in the question-and-answer session, we ask that you limit yourself to one question and one follow-up, so we might allow everyone with interest to participate.

Please note that this presentation is being recorded.

With that, let me please introduce our Chairman, Sheldon Adelson.

Thank you, Dan.

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

This was a record freaking quarter and I'm very pleased that we delivered such exceptional results in each and every one of our markets.

Company-wide adjusted EBITDA reached an all-time record of USD 1.5 billion, an increase of 31% over the prior year.

Our Macao operations generated adjusted EBITDA of a whopping USD 789 million, an increase of 26% over the prior year.

We broke a number of quarterly records, our highest ever managed table gaming drop in revenue, the highest ever retail mass sales -- retail mall sales and the highest EBITDA margin since the third quarter of 2006.

At the same time, we achieved an all-time quarterly record in adjusted property EBITDA in both Singapore and Las Vegas.

As I said last quarter, the G in my middle name stands for Gary, but it also stands for growth, and that is fully on display at present in each of our markets.

The acceleration of Macao's mass market growth in the fourth quarter last year has continued into the first quarter.

Non-rolling drop grew by 21% over the prior year and non-rolling win grew by 22% over the prior year.

This strong mass revenue growth, combined with cost efficiencies, drove significant margin expansion.

Our whole normalized EBITDA margin reached a record 36.4% for the quarter, representing a substantial increase of 350 bps compared with the prior year.

The structural drivers that enable us to grow across all segments in Macao were on full display during the quarter.

The scale and range of our hotel suite inventory, the diversity of our non-gaming offerings, especially in retail and entertainment, and the unique benefit of inter-connectivity between our Cotai properties.

These advantages allow us to attract more overnight visitors than any other operator as well as increase their length of stay.

We achieved total hotel occupancy of 94% in the first quarter, maintaining the record occupancy that we enjoyed in the fourth quarter of 2017.

As a result, we grew by an exceptional 35% in premium mass when compared to the prior year and our retail mall sales grew by 33% over the prior year, with each of our 4 malls delivering strong growth.

Our strategy to build integrated resorts with scale and diversity is differentiated and is visibly paying dividends, especially in Macao as visitation increases from outside Hong Kong and Guangdong province.

In support of that, official government statistics this week reported total visitations to Macao from Mainland China, excluding Guangdong province, were up 18% year-on-year in the first quarter of 2018.

These visitors are staying longer in Macao and spending more time enjoying the ever-growing diversity in critical mass at both gaming and non-gaming attractions and amenities.

The Venetian introduced large-scale non-gaming amenities in Macao, retail malls, MICE, live entertainment and arenas, which came to be known as Macao's first integrated resort.

These attractions are now very well established in Macao and will only grow in importance and contribution to Macao's diversification in the future.

Our market-leading property portfolio received 23.8 million visitors in the quarter, while Macao's total visitation was 8.5 million.

It means we got almost 3 visitations from each visitor.

The strong appeal and power of the critical mass of hotel, dining, retail and entertainment in our property portfolio of the Cotai Strip is evident.

This demonstrates the appeal of our properties as they receive multiple visits from tourists each trip.

While much has been accomplished to date in the transformation of Macao into Asia's premier business and leisure tourism destination, we will not rest on our laurels.

We will continue to invest substantial capital into our portfolio across every segment of our business.

In particular, I'm very excited by the way the design work for The Londoner is progressing.

The Londoner will have a tremendous potential as a third landmark must-see destination, complementing The Venetian and The Parisian.

Our commitment to further reinvest in Macao is not limited to The Londoner.

Many other significant capital projects are taking shape as we speak.

The suite additions Parisian, the renovation of our VIP gaming areas, a plethora of new and exciting F&B outlets and the full-scale development of the 2 luxury hotel towers immediately adjacent to the Four Seasons and St.

Regis properties, all of which will greatly bolster our growth prospects in the year ahead.

We regarded it as a privilege to contribute to Macao's success and realizing its objectives of diversifying its economy, supporting the growth of local businesses and providing meaningful career development opportunities for its citizens, including through our Sands Academy, and reaching its full potential as it is a leading business and leisure tourism destination.

Now I'm going to move on to Marina Bay Sands in Singapore.

As mentioned earlier, we delivered an all-time record quarter at Marina Bay Sands with EBITDA of USD 551 million, an increase of 48% over the prior year.

The quarter was marked by strong VIP and slot revenue growth.

Normalized EBITDA margin increased by 490 bps versus the prior year, reaching 58.7% for the first quarter, supported by solid cost control and successful collection of receivables.

Our retail mall also continues to outperform the broader Singapore retail market, with strong tenant sales growth of 14% over the prior year.

We're proud that Marina Bay Sands stands as the ideal reference site for companies that are considering iconic, large-scale, integrated resort development.

Turning to Las Vegas.

We achieved an all-time record adjusted EBITDA of USD 141 million, an increase of 16% over the prior year.

We achieved record hotel room revenues, underpinned by group room revenues and stronger baccarat play.

So that's the summary of the quarter.

As I mentioned, our growth was fully on display.

Now let's move to another of my favorite subjects, the result of capital to shareholders, yay dividends and yay buybacks.

Our recurring dividend remains the cornerstone of our program to return excess capital to shareholders.

Last October, the Las Vegas Sands Board of Directors approved an increase in our recurring dividend for the 2018 calendar year to $3 per share, for the year was $0.75 per quarter.

We have increased our recurring dividend to our shareholders every year since we first established it in 2012.

We remain deeply committed to our recurring dividend programs at both Las Vegas Sands and Sands China, and we look forward to increasing those recurring dividends in the future as our cash flows grow.

We repurchased $75 million of stock during the quarter and we'll continue to use share repurchases to return excess cash to shareholders in the future.

Our industry-leading cash flows, geographic diversity and balance sheet strength enable us to continue our recurring dividend and stock repurchase programs while retaining ample financial flexibility to reinvest in our existing properties and pursue new development opportunities.

In conclusion, our cash flow generation continues to be strong and predictable.

The structural advantage from our scale, critical mass and product diversity was on full display in our strong financial results.

The robust growth in the mass market in Macao continued during the quarter and the secular growth in China is driving more wealth creation, together with enhanced transportation infrastructure, bode well for future growth.

We will continue to make significant investments in Macao because we have a long-term and unwavering commitment to Macao.

We look to the future with confidence.

We have a strong organic growth outlook.

We are strategically reinvesting in our existing assets while also pursuing new development opportunities, and we have both the intent and the financial strength to continue to return excess capital to shareholders.

Yay dividends again.

Thank you for joining us on the call today.

Now we'll take questions.

(Operator Instructions) The first question is from Thomas Allen of Morgan Stanley.

So focusing on Macao, I noticed that 3 of your larger properties, their RevPAR in the quarter was up anywhere from 27% to 29%.

Can you just kind of talk about the trends there?

Is that cash RevPAR?

Is that stronger premium mass?

And then, in the slide, you talk about your strengthening VIP business.

Can you just touch on that just a little bit more too?

Sure.

Thanks, Thomas.

Just talking about our Macao business in general and I'll answer your questions as well.

The hotel is running about 94% occupancy and that's a market that introduced 10,000 new sleeping rooms the last 3 years.

Just for commentary, our food and beverage sales exceeded $300 million annually.

Our 850 retail stores saw a 33% increase in sales and it will soon grow at about $0.5 billion a year contribution.

And our arena, which isn't spoken about much, is we carefully book with top stars from all the world.

This week Bruno Mars sells out numerous shows.

Macao's become a full-blown destination that's worked for China, far beyond Guangdong and far beyond Hong Kong.

The penetration into China is growing and growing and finding younger and more affluent customers who find Macao a constant calling destination.

As you know, the bridge opens up sometime this year, and soon the entire Pacific Rim will be able to fly into Hong Kong and take a car to Macao, which makes it pretty extraordinary.

As to your question, it's driven by both more gaming demand, higher demand for the gaming side but also higher cash demand.

As you know, we run about 50/50 cash/comp, but the comp standard keeps rising, as does the cash ADR.

And the gaming portion of our business is growing and it's well balanced in all segments.

So whether it's rolling or non-rolling tables or slots, there's strong double-digit demand which we believe is sustainable.

And this is not 2013 or '14, which is more rolling-dependent.

This is a massive non-gaming gaming market.

We're at the epicenter of this.

If you look at Page 11 in your deck, I think you'll see our strong mass stable story from both a base mass and premium mass perspective.

It illustrates our growth and the power of this segment.

And so Page 11 is worth a look, as is Page 15, which illustrates the growth of Macao's overall high-margin mass gaming segment, and that's the place we reside.

And as shown in the reference, we'll keep aggressively investing in Macao.

The Londoner is engaged and work begins later this year.

We expect this property will resemble The Venetian in terms of mass and premium appeal for both the gaming, retail and lodging perspective.

Our Four Seasons St.

Regis Suite product will open in 2019, offering 600 additional suites.

And one more point about our gaming business, our junket capacity today is about 50% where we want it to be.

By 2019, we could offer as many as 21 junket rooms as opposed to our current 11.

And these rooms we fully renovated with input from our partners, with smoking rooms easy access.

So we're fully committed to Macao.

That's the market to be in.

We're in a run rate of $3-plus-billion a year and growing.

And I think the demand for rooms is insatiable.

Hard to imagine we're running 94-plus-percent in a market that's grown so much capacity.

It speaks so well to the penetration into China.

It speaks so well to the surging demand, both in the gaming and non-gaming perspectives.

Just as my follow-up, can we just touch on Singapore?

You've had 4 quarters in a row now of high hold and you shifted your theoretical hold in Macao.

Would you think about doing that in Singapore?

And then, any update on your thinking around the mall sale?

Look at Page 40 of the deck, Thomas.

That might be helpful to understand the change in our approach to the non-rolling chip drop at Marina Bay Sands.

We have adjusted and we have changed the methodology and perhaps that's illustrative of what we're trying to do there.

It just keeps our business in sync across the globe.

Sorry, Thomas, did you also inquire about changing the normalization percentage for Singapore?

Yes, on roll for Singapore.

And then, another question was just on the Marina Bay -- on the mall sale potential?

We're constantly looking at our table mix, at our play historically and looking at the math behind achieving the correct theoretical volumes.

So in doing that, that was the review that we went into and we actually revised the whole normalization range in Macao based on the volume of play and the historical averages.

When we think about Marina Bay Sands, we're constantly evaluating it.

So if you look at our whole percentage over time, you'll see what we typically are holding outside of that range.

So it is something that we constantly look at.

And when there's math to support that change, we'll definitely review it.

And the mall sale?

I think, our answer to that is the same one that we had in prior quarters.

I think it's the best retail asset in the world today.

If you look at the growth that we've experienced just in the last quarter alone, you can see that sales per square foot for Marina Bay Sands, the trailing 12 months for the first quarter were above 1,700 a square foot.

There are not many malls of that size globally that have that type of productivity.

So from our standpoint, it's an unbelievable asset and one that has trophy status at the highest level.

So from our standpoint, it should be very attractive to any potential investor.

That being said, there's really nothing to talk about at this time, but eventually, we hope to be able to achieve the cap rates the Chairman has alluded to in prior calls.

The next question is from Joe Greff of JPMorgan.

I mean, what -- obviously, what stood out to us was the approximate 35% growth in premium mass in Macao.

I guess, just trying to get a better understanding of the operating leverage there, I know you're still targeting segment profit margin in the 25% to 40% range.

I'm presuming given that type of growth, you're at the high end of the range.

I mean, can you give us a sense of where you were in the 1Q?

And again, to further better understand the operating leverage there, how do you think about that segment OpEx growth relative to the top line growth?

I missed the last part of the question.

Repeat the last second portion, Joe, I'm sorry, about the leverage.

Yes.

Just to get a better sense of the operating leverage when you guys are experiencing this type for segment growth, I guess, where were you in terms of segment margin for the 1Q.

I'm presuming, just where you ended up for the quarter, you're at the higher end of that 25% to 40%?

And then, maybe to complement that answer, where has that segment OpEx or where was that OpEx growth in the 1Q?

And then, I have a follow-up on Singapore.

Obviously, we're growing -- the demand in that segment is growing, and so is the leverage.

It's not changed a whole lot in the last few quarters, pretty much consistent.

But to your point, as there's surging demand at the premium mass level, it's going to make more money and (inaudible) unchanged all that much against it.

So leverage is growing.

But more importantly, demand is growing.

And again, what we are seeing is a lifestyle thing.

We're getting people from further and further.

You see the growth in non-Guangdong.

I think, it's Slide 13, which talks about the growth outside of Guangdong province.

I believe that's -- yes, the growth of non-Guangdong is hugely beneficial to us, including our 13,000 rooms.

And part of the reason why we're rethinking St.

Regis, Londoner, Four Seasons, because that's where the sweet spot is in that demand.

That cost is invaluable.

More of them are coming further away.

We believe that even increases further with the bridge later this year.

So I don't know it's going to grow a whole lot more as leverage but there's a whole lot more demand, more top line and more value to those rooms than ever.

And again, it's the retail component.

It's the better sleeping rooms.

It's the arena.

We have some great competitive structural advantages which enable to us to grow and grow to hopefully 800 and beyond.

Patrick, do you want to take a piece of it?

Hey, Joe.

So a couple of comments.

I think, a couple of quarters ago, we reviewed some of our cost-cutting measures and call it, cost-offsetting measures in order to try to mitigate expanding cost as the business grew.

And I think you can see some of the benefits of that.

I have to hand it to the team, they did a great job.

If you look at our margins, you can see the deck on Page 10, our hold-normalized adjusted property EBITDA margin was 29.1%, which -- excuse me, grew -- our EBITDA grew 29.1%.

Our margin itself is 36.4%, excuse me.

That's an incredibly strong flow-through amount percentage.

And we feel very confident that as revenues continue to grow, as the mass market is deeper and is more developed in our property portfolio, we will have the ability to continue that margin, potentially expand a little bit further.

I'd like to point out that we did a nice job with our controllable expenses and managing those.

There are obviously variable expenses related to gaming taxes and other things, but those are out of our control as play grows.

But from a controllable expenses standpoint, we've worked very hard to ensure that those only grow at minimum levels in order to support our customer base.

And I think you can see that today in our margin and the expansion that we showed across the year, even on a normalized basis.

So I think we're pretty happy with our margins.

We feel there's some more opportunity there as we continue to get improved flow-through from the mass market because it's such high margin and we look forward to taking advantage of that as the market grows.

Joe, I think, in addition, you just look in Macao, the story we told years ago is actually occurring rapidly.

The deep penetration into Mainland China, the deep growth of this market in terms of premium mass, it makes the margin appreciation easier to get to.

So I think it's going to keep getting better and better.

As we see more top line, we'll deliver stronger and stronger margins.

And they're very encouraging story from our perspective.

Great.

That's helpful.

And then, for Marina Bay Sands, you have on Page 25 of the slide deck, on a hold-adjusted basis, EBITDA grew 11% year-over-year.

If you were to neutralize for FX and collections activity, what was that -- I guess you would neutralize it in both periods, what was that EBITDA growth?

It came down to 4 20.

Hold-normalized, I think we showed 4 20 for the quarter.

And as you can tell by the numbers, there's deceleration in the rolling segments.

Disappointing that, that segment has slowed down quite a bit.

We held very well.

The other aspects of our business looks strongly.

Patrick referenced the sales per square foot in the mall, the ADR, the lodging business holding up nicely.

And our slots ETGs non-rolling business is decent at 4.7, but there's a slowdown at the top line in terms of the -- that's a pretty soft quarter.

We just played very lucky against that business and I hope we see it return to a better day.

But right now, that's a soft spot in Singapore.

The rest of the business looks pretty decent.

And the next question will come from Stephen Grambling of Goldman Sachs.

I guess, as a follow-up to your response to Joe's question just now on customers coming from outside Guangdong, how does the spend from that customer base compare to those coming from the existing regions?

And as you think about the typical new customer spend trajectory, do you typically see a ramp in spend from those visiting for the first time?

It's higher for a couple of reasons.

One is they come from further away and they're very -- I think, they're very lifestyle-driven.

The way our team described it to us is the acceleration of younger people who are very affluent, bringing their families, want to stay as much as 4 nights.

They want to see Bruno Mars or whoever the star is that weekend.

They want to shop at the stores.

They want to go to the spa and they bring families and they like to gamble.

It's quite a great combination.

So they're not -- so they stay longer as they gamble more and they have more time to spend in our shops.

That's a positive thing.

But more positive is, as you can see by that chart on Page 20 -- or 13 rather, the acceleration of demand outside Guangdong is incredible.

And I think, when you start seeing the Pacific Rim [around the] airport and the transportation via bridges there, that -- hopefully, that process or that approach keeps getting better for us.

We have 13,000, soon 13,600 sleeping rooms, pretty powerful products we have, coupled with our 850 shops and our spas and our entertainment.

So the answer is they spend more time.

They spend more money.

They're younger and there's more of them coming every day, and it's a very positive trend for Macao.

I think, this property, our properties are built for this customer and this customer is showing up in mass.

And so we believe this quarter's -- really, I think, this quarter really defines where Macao is going in our mind.

It's becoming a very, very impressive place, a retail destination, a spa destination, an eating, lodging, lifestyle destination.

We're very encouraged by the things we're seeing, our trends.

Our team is very excited about what's happening to our business in Macao.

I guess, one quick follow-up on that.

I guess, what kind of data are you able to collect on that customer now that you can potentially utilize in the future?

Is it equivalent to the existing kind of database of customers?

Well, yes.

Clearly, we acquire data the same way that we've always collected.

We have an extensive database.

We have extensive information of the customers because that's the nature of this business, isn't it?

So of course, we have extensive data on that customer.

Yes.

I can't share that extensive data but we have lots of it...

The next question is from Shaun Kelley of Bank of America.

So my main question would just be to maybe follow up on Patrick's comments on operating expenses.

But by our account, Macao looks like operating expenses were super well-controlled in the market for the quarter.

The question is, how sustainable is that as we move through the year?

And sort of what kind of level of trajectory of inflation should we sort of be considering or thinking about in those types of expenses?

I'll just -- before Patrick, I'll just say, I think, it's going to -- Shaun, obviously, margins are driven by 3 different variables, but the top line is growing and the quality of customer is growing, and that makes margins easier to achieve.

And I think our team there has demonstrated an ability to deliver top line coupled with margin and great flow-through.

I think it gets better.

I don't think it's a question.

It's just I hope it gets better, not decelerate.

So I think we have -- with our offerings and with our team's approach to this premium mass customer, if we get our junket business where I hope we can get it to, which couples up nicely with premium mass, I would think we'd see more top line business which would create more flow-through.

So I don't think we have much risk of decelerating.

Patrick?

I think the current environment should allow for (inaudible).

I think the team there has done a great job.

I think the market itself is very favorable on the revenue side and we hope to see continued further margin expansion in the upcoming quarters.

Of course, there's no way to predict what will happen but we feel very confident that we'll be able to manage cost appropriately.

Great.

And just as my follow-up then, I mean, Rob, you alluded to what's going on, on the VIP side, and that's a target area for you guys.

I mean, I think, if I got the slide decks correct, then last quarter, you saw roughly 4% growth in VIP.

This quarter, that jumped up to 20%, 21%.

Can you talk a little bit about what initiatives you may have in place that already started to drive a little bit of that and then what you might have in the comp?

Yes, look, we're not happy with our VIP segment.

We can do better.

We want to do better.

People think because we're so dominant in the slot business, ETG and non-rolling table, that we should see that segment grow.

We're not going to do that at all, just the opposite.

We have spent a lot of capital, a lot of time with our partners to create, we think, the best environments, most successful, egress access, smoking-friendly in terms of 2019 January.

Our goal is to accelerate our VIP play because we think it's important both as a segment unto itself.

But as you know, it offers crossover opportunities into premium mass.

So we're very happy that we are investing large amounts of dollars and time in an approach that we think will grow our junket business and other segments as well.

We're not finished.

We want to be a much bigger player in that segment and we've got some wonderful partners that we're listening to very carefully to grow that segment.

That 17 illustrates where we're at, but again, we hope we can get to a much better place.

The next question is from Anil Daswani of Citi.

First of all, with all the new infrastructure that's coming online in Macao with the bridge as well as the new high-speed link to Lotus, hopefully, do you guys see that as a driver more for the base mass business rather than the premium mass business?

And do you believe that we could see a shift in the focus of the market to this base mass business that you guys are incredibly strong in?

Yes, we do.

Very simply put, all new products in the market, be it the rail, be it the bridge, anything and everything that drives more base and more business in that market, we're usually in support of and excited about.

I think we waited a long time.

I think I was 28 when they started that bridge and I'm now almost 41, so it's been a long time.

But we're damn excited about the bridge.

It offers a whole new entree into different segments.

I mean, there's a real story in Macao.

Yes, it's Hong Kong, it's Guangdong.

But the real growth potential is outside of Guangdong, and you see it in that one slide.

We've done that for years.

It's really actually happening with the growth in those markets are extraordinary.

I also believe the Rim can open up, too.

And Macao has become -- in the 4 years I have been going there, it's become a wonderful destination.

The government has done an extraordinary job and we've invested billions of dollars to make it a place that is extraordinary.

What's happened in Cotai is nothing short of exemplary development of a property that has opened up wonderful IRs to a bunch of people.

So as the infrastructure completes the picture for both local and for foreign tourism, we're going to be at the epicenter, and believers that can drive more business, both base and premium mass.

So of course, we're both supportive and enthused about what's happening there.

It can only be good for us.

We're the biggest player in the market in terms of hotel rooms, lodging, retail, gaming capacity.

We intend to be aggressive in trying to create more capacity there.

So sure, it's a positive for us, of course.

Perfect.

And as my follow-up, clearly, with Japan's hotting up again, it seems like everyone's expecting a bill to get tabled at some point at the end of this week even potentially.

If you guys have the choice and you could pick between Yokohama or Osaka, which are the 2 favorite cities at this point in time for big urban centers, could you suggest which one you'd prefer?

Sheldon?

We're still assessing that.

We want them all.

That's the better answer.

We're still assessing that.

They're both very good.

The Yokohama area, we got like a bedroom city, a bedroom community to Tokyo.

Tokyo has got about 32 million people and Tokyo Metropolitan area which Yokohama is part.

And -- but Osaka is about 12 million.

Probably a bit more.

12 million to 14 million people.

20 million if you go the entire...

We're still assessing that.

The Yokohama location is right downtown and the Osaka location is the furthest island.

Next stop is the other side of Tokyo Bay, and after that, next stop is Hawaii, the main island.

And the location is much further away from downtown.

So it's very difficult to say.

We haven't -- first of all, we don't think that anything is going to happen.

A point to the operators, according to everything I read and all the clippings that we are #1 in line.

We've got the best chance of getting the first choice.

So we've been lobbying for that location for a better part of 10 years for Japan, and now it looks like it's coming to fruition.

It may even be by this Friday that they'll submit the IR bill.

But then again, you hear other people say that it's postponed for a week or 2. But something that I heard from somebody in Korea was a little more encouraging than what we've been hearing in the last year or 2. They're thinking about making another location outside of Seoul, a Korean nationals visitation casino and an integrated resort.

We think we're also #1 in that line.

And Korea could be real.

We're also looking at Brazil.

I'm going down there in a couple of few weeks.

Again, we've got people from there come up here.

We're optimistic that in the near future, we should know more about getting at least one of those, either Korea, Japan or Brazil or, hopefully, more than 1.

So we're very enthused by that.

Very enthused.

The next question is from Felicia Hendrix of Barclays.

If we could just go back to Macao for a second.

Obviously, your results were outstanding.

I'm just wondering if we could drill back on Page 11 of your deck in the premium mass slide or part of the slide where it shows that the win, the mass -- the premium mass table win in the quarter was basically sequentially flat.

So I was just wondering, is there anything to read into that because, obviously, everything else is so strong?

I think it's more about hold percentage.

We were dropping the kind of volume we're doing, Felicia, these numbers are so extraordinary.

I think I've said this a few times, and the truth is a point here, a point there makes a big difference.

So if you think of a point Q-on-Q, now we actually lost a point, a whole percentage.

On the count of lines we're doing, it's pretty extraordinary.

I can't do much about that.

We got a point lucky.

When we start talking $20 billion, $25 billion of a drop in the year, a point means a lot.

It's like real money.

And the story is we actually had a nice sequential growth in the quarter but we didn't hold as well, we dropped a point in the hold.

That's the whole story.

I think our mass table business and our premium mass table business just continue to outperform even our expectations here in Las Vegas.

So it's simply a whole percentage.

So we're up single-digit, about 6%, 7%, I think, Q-on-Q, and up, I think, 21% year-on-year.

So factor in a point here and a whole percentage, we held 22 7 versus 21 8, and therein lies the dropoff.

Okay.

That's perfect.

That's what I was looking for.

And then, just, if we can switch gears to Las Vegas for a moment, just your properties in Las Vegas, they generated some -- it was moderate, but some RevPAR growth in the quarter.

We were actually expecting you to be down given the tough comps.

Wynn also reported growth yesterday as well within RevPAR.

So just wondering, can you just talk about what you're seeing in Las Vegas?

I mean, there was a tough comp in the quarter.

The market is still recovering but it seems like it could be better than we expect?

Well, I think so.

We did have a record quarter, $140 million EBITDA.

I've been here since we opened.

That's the best quarter in our history.

So we're doing something very right, and the nice thing is it's not about whole percentage or luck, we just -- we didn't -- we held within the expected range.

We had a strong MICE business, strong ADR coming out at FIT, incredible banquet demand.

It was $70 million-plus in the quarter of food and beverage.

Gaming business was really strong, great Chinese New Year's, great international play.

We held normal, nothing exceptional.

So if you can make $140 million in Las Vegas in a quarter without doing something lucky, that's pretty exceptional results.

We're very proud of the team.

Margins look good.

Future looks bright.

And our outsized results will depend on not -- historically, we've always been a very good performer in the lodging segment and the food and beverage.

Our variable, I think, there is contingent upon getting more international play in the door.

We did this quarter.

We played, fortunately, within the range, and boom, $140 million quarter, which is exemplary.

Would you say -- would you attribute most of the growth to the international play and perhaps the domestic is more flattish.

How would you look at that the complexion of that?

Yes, that's fairly characterized.

Our slot business was stellar.

It remains strong and we're very happy with the margins and the top line.

Our mass play, we have more work to do to get it to increase but that's the Las Vegas story across the board.

It's not like Macao where you expect 20% and 30% growth.

It's tougher here in Las Vegas.

But international play, we need to get our -- to show these kind of quarters successfully and sustainably, we need to get more international play and keep it.

There was a time in our history when it was pretty commonplace.

We fell off a bit and I think we're back to a better place.

But yes, to deliver $150 million, $140 million, $130 million quarters, we're going to need a strong -- a continued contribution of drop from the table on the inside.

But again, it was an exceptional hold.

We're within the range.

We had strong Asian play, strong Chinese New Year's, coupled with amazing lodging results and strong F&B.

The next question will come from Carlo Santarelli of Deutsche Bank.

Rob or Sheldon, I think, mentioned earlier in the call, talked a little bit about expansion of the VIP footprint in Macao.

Could you just talk a little bit right now in terms of, however, you can categorize it, your mix between kind of your junket business relative to your direct in-house business and the plans for kind of the direct business going forward?

Carlo, I don't want to talk -- break out our numbers.

We have a strong business in premium direct.

And as I referenced earlier, I want to get better at the junket side.

We're very happy with our premium direct business.

We want to grow our junket business.

As I referenced and Sheldon referenced, we're dedicating capital, more importantly, we're dedicating manpower and brainpower to figure out how to do better in that segment.

We should do better.

And we want to drive more VIP.

Let's be very clear about that.

So we're spending a lot of money on rooms.

The direction of our partners, making sure access egress is good, making sure it's smoking-friendly in gaming area for '19.

I won't break out the numbers but I will tell you, we're growing in the junket segment.

We're double-digit growth year-on-year and sequentially growing but I want to see more.

I think we'd need more because that segment is growing again and we should be bigger participants.

And as I referenced earlier, there's a spillover effect in the premium mass.

There's a value there.

So we are very laser-focused on getting better in that segment.

We're very happy with the other segments.

We want to get better in our junket partner segment.

And Rob, if I may just ask a quick follow-up.

You mentioned obviously that spillover effect.

What does that stem from?

Is there almost a crowding out of liquidity on the VIP side and, as you mentioned earlier, kind of constantly adjusting levels for hotel room comps?

But does the same type of phenomena happen within VIP?

Or at least are you guys seeing that, where you're starting to see some of your previously lower-rung VIP players kind of be more or less pushed into the premium mass segment which is obviously a good problem to have for you guys.

But is that happening as you think about liquidity in the junket market today and junkets being a little bit more discerning about which customers they're taking in?

I think you're absolutely right, they're more discerning.

Their coffers are full of liquidity.

And so why not be balanced and why not enable our people who want to be a junket customer, go to the junket side.

You want to be a premium direct?

Go to that side.

What we're seeing, though, again, our hotel rooms are getting more and more demand from further and further away.

Those people tend to be less junket-sensitive and more into the premium direct side, whereas Guangdong tends to be more junket preference.

But it's not my job to tell people where to gamble and what to do.

I just want to make sure they have access to capital and we have access to sleeping rooms and junket rooms they want to play in.

So again, we're an equal opportunity gambling house.

We want to give all kinds of opportunity to our customers to go to the place they want to gamble.

We're happy wherever they gamble.

But you know and I know, liquidity is there, growth is there and they're darn good partners to have.

So very happy to work with them.

Ladies and gentlemen, thank you for participating in today's conference.

This concludes the program.

You may all disconnect.

Everyone, have a great day.