拉斯維加斯金沙集團 (LVS) 2018 Q2 法說會逐字稿

Good afternoon.

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

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

(Operator Instructions) I will now turn the call over to Mr. Daniel Briggs.

Thanks, Vincent.

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, our 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 inform you 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.

(Operator Instructions)

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.

Our company had a great quarter, and I am pleased that we continue to deliver strong financial results.

Hold-normalized, company-wide adjusted property EBITDA reached USD 1.23 billion, an increase of 12% over the prior year.

Our Macao operations again performed exceptionally well, with adjusted property EBITDA growing by 25% to USD 750 million.

We experienced strong growth in both the VIP and mass table games segments, enabling us to grow our market share of gaming revenue both year-over-year and sequentially.

Our Macao operations are back to generating an annualized EBITDA run rate of USD 3 billion.

Marina Bay Sands continued to produce strong cash flows, while Las Vegas has another strong quarter on a hold-normalized basis.

Our balance sheet remains the strongest in the industry.

As of the end of the second quarter, our gross debt to trailing 12 months EBITDA and leverage ratio was 2.2x at Las Vegas Sands and 1.6x at Sands China.

The size and stability of our cash flows enable us to reinvest in our existing portfolio, pursue new development opportunities and return excess capital to shareholders.

At the same time, we will continue to maintain a prudent approach to our balance sheet, and we intend to stay within our targeted ratio of gross leverage to EBITDA of between 2 and 3x at both Las Vegas Sands and Sands China.

In Macao, the acceleration in mass market growth that began in the fourth quarter of last year has continued into the first and second quarters of this year.

Our non-rolling drop in the second quarter grew by 19% over the prior year, and non-rolling win grew by 20% over the prior year.

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

Our hold-normalized EBITDA margin reached 35.2% for the quarter, representing an increase of 170 basis points compared with the prior year.

The successful execution of our Cotai Strip development over the past decade has given us important structural advantages: the scale and range of our hotel suite inventory, the diversity of our non-gaming offerings, especially in retail, mass and entertainment, and the unique benefit of interconnectivity between our Cotai properties.

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

In the second quarter of 2018, we equated our record hotel occupancy of -- we equaled our record hotel occupancy of 94%, despite the second quarter typically being a seasonally softer period.

As a result, we grew by an outstanding 29% in premium mass when compared to the prior year.

And our retail mall tenant sales grew by 30% over the prior year, with each of our 4 malls contributing strong growth.

Our strategy to build [integrated] resorts with scale and diversity continues to pay clear dividends as Macao receives more visitors from outside of Hong Kong and Guangdong province.

Chinese visitation to Macao from provinces outside of Guangdong grew by 17% over the 12 months to June 30.

These visitors are also staying longer in Macao and enjoying the ever-growing diversity of non-gaming attractions and amenities.

The opening of The Venetian Macao over a decade ago marked the first step in our vision to create the Cotai Strip.

The Venetian introduced large-scale, non-gaming amenities in Macao, such as retail malls, MICE, live entertainment and arrangements.

These attractions are now well established in Macao and will continue to flourish and grow.

This quarter, The Venetian Macao delivered an exceptional performance, benefiting from its comprehensive suite renovation program, which was completed at the beginning of this year.

Rolling volumes were up 44%; non-rolling drop grew by 32%; retail mall tenant sales increased by 27%; and hold-normalized adjusted EBITDA was up by 33%.

The Venetian, together with the Four Seasons, SCC and the Parisian, all interconnected, comprises the only MICE-based Integrated Resort complex of this scale in the world.

I'm truly grateful to the Macao government and the local community for their great support over the years in enabling us to implement this vision and strategy.

I was absolutely committed then, and I remain as deeply committed today to continuing to support Macao's economic diversification and its transformation into Asia's leading leisure and business tourism destination.

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

I'm confident that these investments will drive additional growth in leisure and business tourism for both our portfolio and for Macao overall.

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

The Londoner will have tremendous potential as the 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 place as we speak: the suite conversions at Parisian, the wholesale renovation of our VIP gaming areas, a number of new F&B outlets and the full-scale development of the tower adjacent to the Four Seasons Macao, which will greatly bolster the competitive position of the Plaza/Four Seasons property.

Let me (inaudible) constantly investing, upgrading and modernizing key elements of the Macao portfolio to attract new visitors and give repeat visitors new reasons to come back to our properties.

Our decision to reinvest and develop The Londoner Macao and to add additional suite inventories reflects that long-term commitment to Macao and our confidence in its future.

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 Asia's leading leisure and business tourism destination.

Now moving on to Marina Bay Sands in Singapore.

As mentioned earlier, we continue to generate strong cash flow of Marina Bay Sands, with EBITDA of USD 368 million.

Our mass win per day grew by 10% over the prior year to USD 4.85.

Our retail mall also continues to outperform the broader Singapore retail market, with our tenant sales per square foot growing more than 19% in the 12 months ended June 30.

At the same time, Marina Bay Sands continues to serve as a powerful reference site for emerging jurisdictions that are considering large-scale, integrated resort developments.

Our pioneering track record, unmatched development expertise and financial strength put us in a leading position and take advantage of the most promising new development opportunities on the horizon.

With the successful passage of the IR Implementation Bill in Japan last week, we look forward to pursuing what would be a unique opportunity.

We hope to be able to bring our track record, expertise and development vision, together with our industry-leading financial strength, to deliver to Japan a large-scale, MICE-based Integrated Resort that would be uniquely tailored to the Japanese market.

In Las Vegas, we achieved another strong quarter with hold-normalized EBITDA [of] USD 106 million, an increase of 23% over the prior year.

Now let's move on to my favorite subject: the return of capital to shareholders, yay, dividends and yay, buybacks.

Our recurring dividend program remains the cornerstone of our program to return 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 or $0.75 per quarter.

After establishing our recurring dividend program in 2012, this marks the sixth consecutive year that we have increased our recurring dividend to shareholders.

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.

At the same time, we will remain optimistic in returning excess capital via our share repurchase program.

We repurchased USD 100 million of stock during the quarter.

We look forward to continuing to utilize the stock buyback program to return excess capital to shareholders and to enhance long-term shareholder returns 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 the most promising new development opportunities.

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

The structural advantages from our scale, critical mass and product diversity continues to translate to strong financial results.

The market acceleration and mass market growth in the Macao market has continued during the current quarter.

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

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.

Thank you for joining us on the call today, and now we'll take questions.

(Operator Instructions) We have a question that comes from the line of Shaun Kelley from Bank of America.

I just wanted to maybe start with the current market and operating environment.

I think the last couple of months of GGR growth, we've seen a little bit of a deceleration in the market overall, but obviously, LVS is taking a material share and performing well.

I was just wondering if you could give us your thought -- latest thoughts on both the operating environment, a little bit about that deceleration.

And if I caught it correctly, I think at the tail end of the prepared remarks, there was something about an acceleration or continued strong growth in the current quarter, and I just want to clarify that comment.

Shaun, it's Rob.

I think the success of this quarter demonstrates material growth in all our segments, in our business in Macao, growing mass, premium mass, slots, ETGs, rooms, retail, all showed material growth.

And our EBITDA reflects $150 million year-on-year improvement.

But the most important driver of this growth is premium mass.

And on Page 11 of the deck, you'll see our references to our win per unit per day in mass and premium mass tables were basically at $7,300 a day in mass and about $17,000 day in premium mass.

And this strong growth comes at -- we think it comes at a non-Guangdong segment of our business, and it bodes well for our future.

We intend to emulate the success of The Venetian from lodging and from a -- and prospectively move forward in growth.

The Venetian's renovated room and suite product has resulted in about 33% year-on-year EBITDA growth.

Mass table is up by about 32%, rolling volume up 44%, slot volume by about 20%, retail sales up 27%.

This properties continues to accelerate, and it's hitting on all cylinders.

And this is the blueprint as we move forward in our CapEx, how we see the market for the -- for our company.

The Parisian currently has about 30% of its rooms out of order.

But by the end of this year, by the end of 2018, we'll have about 350 newly converted premium suites.

The theoretical win of the ones we've finished thus far is 4x we're getting at the old rooms.

So by year-end, The Parisian is a whole different product.

And again, the blueprint here goes back to our Venetian success.

Same holds true with the Four Seasons.

We've been -- We renovated, and we've delivered about 22% year-on-year growth, EBITDA growth.

But next year, we'll see the addition of 300 new suites at the Four Seasons, which is kind of the material impact on the performance of that property.

The SCC is showing growth, but when it comes to The Londoner, with newly converted suites at both The Londoner and St.

Regis, we believe this property could go far beyond its current $700 million or $800 million run rate.

It will feature 2,000 premium mass suites, and by far, our greatest growth vehicle in the future.

Let's address non-Guang (sic) [non-Guangdong] growth for a second on Page 12.

This is the penetration story we've been waiting for, that we'll grow our EBITDA to $3 billion and beyond.

The penetration beyond Guangdong province is critical to our growth and our ambitions.

These people come to gamble.

They stay longer at our hotel.

They come to our arena for shows.

They shop at our 850 retail stores.

This is a lifestyle segment, and the situation of the visitation of these affluent Chinese consumers, we think, is the future of the growth at our company.

In summary, the long-term demand is there, non-Guangdong penetration, younger premium mass demographic, which consumes our lifestyle-driven Integrated Resort product with retail, entertainment, dining, luxury.

At the same time, we have a clear path to emulate what we've achieved at The Venetian, followed by, first, The Venetian this year; The Parisian; Four Season (sic) [Four Seasons]; and lastly, Londoner.

So we're extremely confident that we found the key to growing our business, not just this year but beyond.

And unlike '14, which will probably rival our '14 EBITDA, this year, unlike '14, obviously, the growth is based on a much more sustainable segment, that being mass, premium mass.

So we're extremely confident of not just this quarter, next quarter, but next 2 years of meaningful growth of our properties, assuming the market continues to tick up like it is.

We feel very bullish.

(inaudible), Rob.

I could.

I could.

Just the other update would be, you mentioned the importance of getting some of the new premium mass suites open at both Four Seasons, and I assume St.

Regis as well.

Just -- I know there's been some scope changes you guys have been looking at there.

What's the latest on timing for when we could expect or think about those opening?

At this point, we're working through the issues of our development team, and we'll be back to when we have a final date, but we feel good about the timing, and we feel good about the scope.

We expanded some of the quality.

Our main goal as we move forward is to get this right.

If it comes in poorly done and poorly executed, it will reflect in the revenue.

We've learned the hard way.

When you get things right, it really does pay off.

And if it takes more dollars to do, we'll do that.

So we'll come back to you when we've got a finite number on terms of design schedule and timing, but we're not prepared today to talk about that.

The next question comes from the line of Thomas Allen from Morgan Stanley.

Can you talk about the Singapore performance in the quarter?

Mass trends look to have grown pretty strongly, but obviously, VIP fell significantly.

So can you just talk about what's going on there, and how should we think about the future?

Sure.

As you see, MBS stood about 3 68 for the quarter.

We ran -- our business ran very well there with the exception you've called out.

The hotel rev at 97% at $418 million.

RevPAR, $405 million.

Retail, [however], I think its best quarter ever at $1,753 sales per square foot.

And non-rolling slots, as you mentioned, got to -- non-rolling slots tables got to $4.8 million per day, with margins hanging up in the low 60s.

So -- And that is, of course, the main driver of our success.

The weak link in that performance was the rolling segment, and we had our lowest rolling volume in our history at under $6 billion, and we held about in the range, 2.4 but down last -- from last quarter's 4.77.

We've always represented this is a highly concentrated quarter, and this quarter, there was no concentration.

The business was soft, and there's no denying it.

We are working towards looking what we can do to improve that.

Even with that weakness, this place still shows about $1.5 billion annualized run rate, which is acceptable.

The question is how can you drive more business in here?

And the answer is twofold.

We've got to keep ramping our premium mass business, which clearly is the real driver of the underlying EBITDA.

And we've got to work harder to figure out how to get better-quality play in from the rolling segment.

Again, it's concentrated.

It's confusing to us at times how it jumps up some quarters to $7 billion, $8 billion, $9 billion and then tumbles like this quarter.

We're not happy with it.

We plan to work at it.

We're looking at our suite product.

We need to renovate some suite product.

The competition for that segment is strong regionally, Macao and Australia, et cetera.

But we're not pleased with that rolling segment performance.

We've got work to do, and there's no other excuse, and we've got to keep looking at how to improve it.

And we certainly don't want to give up on it because next thing you know, we could have an $8 billion or $9 billion quarter this year.

But clearly, that's the weak link in the performance at MBS.

Very helpful.

And just as my follow-up, there's obviously been some new supply that's opened up in Macao this year.

How is it influencing the market and your position within the market?

I'm sorry, Tom.

One more time.

I was looking at something.

I'm sorry.

One more time.

The new supply in Macao, how is it impacting the market in your view, and how is it impacting your share in the market?

I think it's positive, very positive when Macao gets new product.

And I think the Morpheus tower and the Wynn and MGM, all these things are very positive to the market.

We view Macao as a growing market, as a growth market.

Those products make it honestly bulletproof to the rest of the region as it grows into a $40 billion, $50 billion CapEx there.

It's an amazing place to watch.

We started here 11 years ago with the sole Venetian product, and it has morphed into this amazing visitation machine.

Very honestly, it just benefits us.

We think the new product helps us because with 13,000 rooms, we have the -- the MICE business is ours, the entertainment business.

We're the only arena of scale.

We have the only place with 850 stores.

The pure scale of what we have over there helps us when these guys bring new product to the market.

The competition is great, the quality of product is excellent.

Our job is to, again, take our Venetian model to fuel our growth and emulate it.

We do think, at the end of the day, it's a rooms-driven market.

I kind of chuckle when people say -- a few years ago, people [said], "Oh, it's a bloodbath.

It's too many rooms." And now we're running at 94% across our portfolio.

Our biggest problem is the team there wants more rooms, more quality rooms because we're sold out every weekend.

But I believe that we are -- everyone's going to win in Macao.

It's just those with the most capacity will win the most.

So I think this quarter reflects the beginning of a good strong trend, the non-Guangdong visitation.

And I think it's great that Cotai keeps bringing more products like Morpheus, like Wynn, like MGM.

It just helps us bring more visitation, which bodes very well for our company.

I want to point out that -- this is Sheldon.

I want to point out that this $1,753 per square foot sales in...

MBS.

In Marina Bay Sands in Singapore is probably the second highest -- if you were in the United States, it would be the second highest beyond, I think, a couple of -- 1 or 2 shops, 1 or 2 malls in Florida.

It may even be one of the top 2 or 3 highest.

I want to point out that the reason for that is while all the malls in the United States are frequented by local visitors -- they're not visitors, but they're local people, we are frequented by tourists.

And the same thing is happening at the malls in Macao, at the duty-free shops.

The first level of Four Seasons mall is over $5,000 per square foot.

On an average, I think, between the duty-free shops and 1 or 2 additional floors, we're at close to $3,000 upfront sales.

There's nothing like that in the world, and there's nothing like our Integrated Resorts, which acts as the anchors.

If you think about it, we don't have any department store anchors, and we won't have any because we don't need them.

The Integrated Resort is the anchor.

Thomas, when you mentioned Q3, I don't think we gave any indication of Q3, and we won't.

Your next question comes from the line of Stephen Grambling from Goldman Sachs.

I guess just a follow-up on Marina Bay Sands.

Have you seen any change in the competitive environment, specifically there within the market?

And I guess, has anything changed from a promotional intensity?

And how do you think about that as a lever?

Not really.

I think the market remains -- We -- I don't see competitive problems there as far as Genting.

It does a very good job in the market.

But we continue to run our business as we see fit.

Our concern with ourselves, with our product was getting the right kind of the team out in the field to get the rolling segment we're missing.

But we're very pleased with our $4.8 million a day.

[intelligible] Sheldon referenced the mall sales, extraordinary.

Hotel is sold out.

If anything, we lack in that market, Stephen, it's more capacity.

What's frustrating is we just need more -- we'd love to have more sleeping rooms and more gaming capacity.

Slots there do terrific numbers, and it's hard to see that as a competitive problem.

It's simply a problem of capacity.

We have built a building that's always full.

Retail's full.

Slots, ETGs, 80%, 90% occupancy at weekends.

So I don't think it's a competitive problem in terms of pressures from Genting.

We just try to do a better job in our rolling segment.

Fair enough.

And then maybe changing gears.

I think last quarter, you gave some good detail on Japan.

And now with the bill passing, can you just remind us of how you're planning and anticipating the process to unfold from here and how you assess the opportunity, I guess, across various markets as well as how you're thinking about capital allocation in pursuit of that opportunity?

Japan.

So Japan, as we all know, it passed finally, and we're thrilled.

And we -- I think Sheldon has talked about it in the past being a very, very important part of our -- we'd love to be there as a third country, along with Macao and Singapore.

We don't have a timetable.

We wait for the government to direct us as to how it goes forward.

We've had a presence there for over a decade, and we're eager to be there.

I think our plan is simple.

We have the balance sheet, we have the reference point IRs in both Macao and Singapore that the Japanese government looked to.

We have the defining my space in Macao and Singapore.

We have the defining entertainment activity in those places.

So I think when you realize what we've done in Macao, I think Sheldon's reference to MBS is true, but also, the buildings we built in Macao are pretty extraordinary, too.

I think, again, strategically, what makes this company different is our balance sheet and Sheldon's ability to figure out what to build and where to build it.

When he built Macao, it remains the reference point for Asian IRs.

He took up the Cotai Strip, and that's an amazing achievement.

I think they look at that, looked at its MICE focus, looked at its retail focus, looked at its grand plan.

I think that bodes well for our future development in Japan.

We have a balance sheet.

We have the reference sites.

We sure have the appetite, and we just want to get started.

So hopefully the government can move forward.

We're waiting for their direction and adhere to their advices.

What about our good looks and charm (inaudible)?

(inaudible) getting old, so...

(inaudible)and I are the only old dogs around here, so I don't think it'll get us there.

What I'd like to point out is that we have -- everybody says, local Japanese, business people, banks, everybody says we have the leading position in Japan because of my background.

I used to produce the COMDEX show in Japan, and I also helped them to redesign the biggest exhibition center they have in Japan called Makuhari Messe.

And when they went to build that in the '80s, the governor of Chiba, in which Makuhari is located, came to my office in Boston, and I helped them redesign the center, the exhibition center.

So I've got a good background and reputation in Japan for being the leading MICE Integrated Resort developer and operator.

And I think that the estimates by people who know -- who say they know, whom we believe they know, say that we're in the #1 (inaudible) position.

I guess one quick follow-up.

Is there anything, I guess, as you're looking at the market that has changed that makes you reconsider either how much capital you deploy or how you're thinking about returns in that market?

We're not, as I've said before, we're not going to do anything that'll -- we don't intend to do anything that'll bring returns down below 20% cash-on-cash.

And we just don't know the details.

The law was just passed last week.

It consist of hundreds of pages.

There's about 250 different items in the bill.

And I think it's going to go down to the various prefectures before we know what can be done and when and to get further clarification on several of the important things like the percentage of overall build space.

They're saying 3%, but there are a lot of variables that might be able to get us -- I mean, we normally count front of the house and back of the house in our casino allocation of space.

But over there, we will count only the front of the house.

And as we understand it, we won't have to count the aisles and the food and beverage space as part of the 3%.

So it's a matter of how many gaming positions we put in, and I think it's too early now.

This implementation bill will take at least a year for any city that wants to be involved to come up with their requirements and their criteria.

Your next question comes from the line of Joe Greff from JPMorgan.

Rob, what's interesting to me going through the earnings release and the supplemental presentations was when I look at your Macao results in mass and VIP and compare it to your growth versus the growth for the market segment, you meaningfully exceeded on the VIP side.

And on the mass side, you were a little bit below the estimated mass segment growth.

And I can understand directionally each of those, but can you talk about sort of from here your efforts in growing the VIP business through the use of maybe underutilized junket rooms and maybe what the path is there?

And then my second question is, with respect to the mass growth, this quarter was maybe the first quarter where you didn't meaningfully exceed or maybe match the segment growth.

And I get that we probably have to sort of total up all the operators to get a really true for the segment number for the market.

But from here, does it get more difficult to keep pace with the mass side of things, just given your historical position in the mass?

And that's all for me.

Yes.

Joe, I'll take the second part first.

I think just the opposite.

I think our mass business is going to continue to do very, very well.

We grew so quickly in the last few quarters.

Our base grew so quickly that perhaps you're right.

We might have (inaudible) by a point or 2, but we'll see that once all the numbers come out.

I think we're built for growth far beyond anybody understands because of the products we have.

As we complete these renovations, what we did at the Venetian, which now puts us on track to do $1.4 billion, $1.5 billion next year, that's going to just keep like dominoes.

You're going to see it at the Parisian next at the end of the year, boom.

Then, you're going to see it hit the -- the Four Seasons is going to become a very, very strong player.

And then lastly, you're going to see it at The Londoner, that conversion.

So my belief is this company, with 13,000 rooms, the dominant position in both rooms, retail, arena, it just has all the elements of growth.

And as that non-Guangdong visitation continues, I think we're going to be a very strong player in the [group] segment.

I have total confidence.

(inaudible) there.

In case you missed it, we opened the first Apple flagship store outside the United States last month.

We're very proud, it sits outside of Cotai.

We were at the -- the people from Apple last month in Asia, and they're delighted with the store, and we sure are.

We're hoping for more stores with the Apple people if they want to do more with us.

We think that, that store is going to become a traffic machine, great for our retail business but not so bad for gaming.

Again, I think these kinds of things, the Cotai Arena, the new Apple Store, the renovation of literally thousands of rooms and suites over the next 18 to 24 months, I think it redefines our growth and who we are.

I am very optimistic that this non-Guangdong visitation which, as we build this company forward, is to grow beyond Hong Kong and Guangdong into the outer reaches, the outer provinces of China, is the story.

That's where the growth is.

They're younger, but they gamble.

They want all the amenities.

They want the lifestyle we offer.

And I think we're built for that kind of growth.

And frankly, if you don't have the rooms at weekends, you can't get them.

And they come over the board, and they want quality product.

They'll pay for it.

They'll buy the retail products, they'll buy the shopping, they'll buy the dining.

But that's the growth engine that we're depending upon.

And if we execute our room suite product properly and get the right product and then find the consumer, we have total confidence.

On the junket piece, I think, again, it looks -- just look at the 44% year-on-year growth at The Venetian.

What we did in The Venetian, we redefined some of the rooms there.

We redid our suite product.

We worked with our junket partners, and we're just doing some great numbers out of the Venetian.

That we think happens at The Parisian, that we think happens at the SCC.

It's happening as we speak at the Plaza.

The only problem at the Plaza, we need more sleeping rooms of the quality we have currently, and that comes onboard with the completion of the Four Seasons.

That Four Seasons, 300 suites is going to really make us rethink the value of that asset at Plaza and the Four Seasons.

We're really excited.

The junket business, we need to do more.

We keep redefining the physical structures in the rooms.

We keep talking to our junket partners.

We think there's a lot more growth ahead of us.

And as you know, that relationship also spills over into our premium mass, so there's a relationship there that's undeniable in Macao.

When you have this strong junket, you have liquidity, that fuels other segments.

So what you're seeing in our business this quarter, that 750, it hopefully gets to 800 and keeps growing, is the beginning of, we think, of a strong growth pattern with 13,000 sleeping rooms, the dominant retail position, the dominant entertainment position in Macao to fuel more growth in all segments.

And we've just started our work in junkets.

It's just beginning.

And we're at the early phases of adding more rooms and make the rooms nicer and more acceptable to our customers.

So we are very bullish on our growth.

Great.

Just a follow-up on the VIP segment.

Do you think you're growing that segment?

Or do you think it's more just a share shift?

Well, that's -- I think we're growing that segment.

I think when you see the kind of growth -- we get the majority, obviously, of our business coming out of Cotai, about 93%.

But when you're running $18 billion portfolio-wide, and you're seeing like The Venetian by 44% growth, and you're seeing the Plaza growing, you're seeing The Parisian.

The Parisian is just handicapped by -- it needs a better room product.

It's going to get it.

But even that product is growing.

I think we're -- I believe we're growing, but that's hard to say, Joe, seeing everyone else's numbers.

But I feel that our products are getting better, and our competitive position is getting stronger.

And again, I think our junket partners are recognizing that, too.

And don't forget, we have a strong premium mass, premium direct business as well as a junket [rolling].

So we kind of hit them on 2 fronts.

Your next question comes from the line of Anil Daswani from Citigroup.

My question is also along the lines of The Parisian.

You mentioned in your remarks earlier that you're getting 4x the return from these new suites at The Parisian.

Again, given the market's being driven by premium mass, would you consider doing even more conversions to these premium-mass-friendly rooms, whether it be at The Parisian or even at some of the other properties in The Londoner going forward?

That's my first question.

It's a very good question.

It's a very fair question.

And the answer is I would certainly talk to (inaudible) and the board about that because if we can deliver the current returns we're seeing on the first hundred or so suites converted, why wouldn't you?

I mean, the truth is we've learned in Macao, a room -- all rooms are not created equal.

A better room product definitely speaks to the segments we want to speak to.

So if we can get ourselves up to a couple of $3,000 a day versus $500, $600, why wouldn't you convert?

And that's a good question, and the answer is, sure.

Why wouldn't we?

We're here to make money and get margin and grow our business beyond $3 billion.

And how we get there is intelligent CapEx.

We've demonstrated you our willingness.

Our board, Mr. (inaudible) has shown their willingness to write checks to improve our products.

The Parisian opened up, and it's a good hotel.

It just has more premium mass demand than we have rooms to give it.

So we got the 300 or 400 suites, and that, I think, grows to $500-some million and $600 million, gee, I would think we'd definitely think about more conversion, of course.

But one thing I would mention, you think about (inaudible) -- Anil, just one...

My follow-up is, could you tell us just a little bit about the opportunity to expand your room product in Singapore?

Because obviously, that has been what's hurting the growth over there.

I'm sorry, I missed that.

I just want to say one thing, just to follow up on that.

The one thing you should think about with The Parisian is it's going to benefit by its proximity to the conversion of the Four Seasons products that go onboard when we finish those 300 suites.

So you can walk out of that Four Seasons product into the Four Seasons or the Plaza, or you can walk into The Parisian.

It may be that between the 300 there and the 350 at The Parisian, we may have enough but just to make that clear.

Your second question was about MBS?

Yes.

So at MBS, is there an opportunity to get more room product now that the moratorium is up in Singapore?

We can't at this point comment on that, about if there's an opportunity now.

We'd like believe there is at some point, but we can't discuss that today.

Clearly, we have maxed out the occupancy from a cash and comp demand.

And clearly, at $4.8 million a day, we have tremendous demand for that product, but it's not worth discussing at this point today.

That's also [due to] gaming capacities issue as well but nothing to discuss at this time.

We have a question that comes from the line of Jared Shojaian from Wolfe Research.

So apparently, we're -- don't have any more questions.

We appreciate your time today.

Thanks for joining us.

[This concludes today's conference call.

You may now disconnect].