永利渡假村 (WYNN) 2020 Q1 法說會逐字稿

Welcome to the Wynn Resorts First Quarter 2020 Earnings Call. (Operator Instructions) This call is being recorded. If you have any objections, you may disconnect at this time.

I will now turn the line over to Craig Billings, President and Chief Financial Officer. Sir, you may begin.

Thank you, operator, and good afternoon, everyone. On the call with me today our Matt Maddox in Las Vegas; and on the phone line, Marilyn Spiegel; Ian Coughlan; Linda Chen; Ciaran Carruthers; Frederic Luvisutto; and Brian Gullbrants.

I want to remind you that we may make forward-looking statements under safe harbor federal securities laws, and those statements may or may not come true.

I'll now turn the call over to Matt Maddox.

Thanks, Craig, and hello, everyone. I hope that you are all safe and healthy, likely working from home right now. Instead of just jumping right into our first quarter results. What I'd like to do is spend some time talking about how we've handled this pandemic in the way that we've been thinking about it. So well before we closed our facilities in North America because of our Macau experience, I reached out to one of the leading experts in -- really in the world in terms of pandemic research and global health security. It's the Director for Global Health Security from Georgetown University. And engaged that team months ago and spent daily conversations with that team, trying to understand the situation and what was going on and how best we could protect our customers and our employees and provide information to our medical communities and to our state and local government. We actually -- because of that led the industry, both in Massachusetts and in Nevada in closing our casinos. We suggested to the Massachusetts Gaming Commission in mid-March that it was time for us to close. Based on the data and based on the science and the potential community spread that we were seeing. And we actually closed our resorts in Las Vegas in advance of the state declaration to close. And we were the first that led that. And we did it because at that time it was the right thing to do. And we knew that we needed to be early and to make that move. We also knew, during that time, they -- asking our 30,000 employees, team members, 15,000 of them in North America and 15,000 in Macau, that a pandemic is upon us, that we're closing our resorts. We felt that we should invest in our culture right now because it's taken years and years and years to build the best team in the industry. And so we chose and I chose to pay all of our people since we closed through the end of May.

We are one of the outliers in our industry or in hospitality in general that have done that. But I believe that investing in culture right now and making sure that your team members feel safe during these times is a corporate responsibility, and I also believe it's a great investment. I'm not sure how long this will last, and I'm not sure how much longer we can continue this practice. It's currently till May 31. But what I know is when we do reopen, in whatever state that is in Las Vegas and in Massachusetts that I want our team members to have smiles on their face. It will be underneath the mask, but it'll still radiate through because we're in the business of making people happy. And only if our customers -- and our customers will only be happy if our employees felt like they were part of a family. So that's been my focus is to really make sure that we're doing this as a family and to think about the future because you can quickly disrupt a culture that takes years and years to build. It also allowed us, I think, to be -- to act quite fast in the way that we're thinking about a reopening because of the resources we had at hand. As an example, I believe we were one of the first companies in the nation, not just in our industry, but in the nation, to produce a detailed reopening plan.

We published it for the world to see on April 19. It's a 23-page plan that goes department by department, area by area, space by space in terms of how we're going to keep our employees safe and our customers safe. It's actually become known as the Wynn plan. And I've had sports teams call to walk through it; airlines call and walk through it; retail, large; landlords calling up through it; developers; dozens of CEOs to look at the Wynn plan and to think about it and apply it to their own business. And we did that because we want to help lead the conversation to a reopening of our economy, but in a phased approach and in a safe approach and focused on the data.

We've been working with our experts and state and local officials on benchmarks to track that should be public and transparent. We've crafted, with our medical community here in Nevada, benchmarks based on disease growth, which is a case growth coupled with hospitalizations and deaths. And the disease growth needs to be at a certain level before you consider reopening. We have set benchmarks for ICU capacity with our medical community as well as ventilator capacity that you need the ability to achieve a 2x surge in COVID patients in your ICU without needing crisis care to begin a phased approach to opening as well as test positivity rate. So -- which really measures the amount of tests that are being conducted in an area. Those benchmarks have been widely distributed. They're going to be quite public. And it's really a great way that our medical community is looking at this to think about phased openings of the economy.

In Nevada, our governor has launched a -- the concept of a phased opening. The Phase 1 should begin in the next week or so, sometime around mid-May. And then based on the benchmarks and the data, I believe we'll continue to see, in Phase 2, openings of additional businesses and potentially opening of our business in late May. But again, that is assuming that we stay in line with the benchmarks and that the environment is safe for customers and for all of our employees.

In Massachusetts, they have formed a task force at the state level, and I want to commend both Governor Sisolak and Governor Baker for early, fast action and for their tireless work on this effort.

Massachusetts is also, I believe, will be coming out with a phased approach to opening. They have clearly had a much more difficult time than Nevada has given the high amount of cases and deaths there. But their medical community has handled it really as good as has been handled around the globe and should be commended.

On the testing front, we think a lot about this. And in fact, we in -- Las Vegas, has signed a partnership with the University Medical Center, the research hospital in Las Vegas, whereby any of our employees can get tested for COVID-19. In fact, we have on-site testing tomorrow, set up in an 85,000 square foot ballroom with 25 nurses from UMC, all appropriately spaced out, and we believe that we'll have, over the next couple of days, thousands of employees that will have been tested. These are the types of things that we're doing now and early into an eventual lead up to opening our properties.

In Macau, we've been -- we've remained open in Macau after the closure in the first 2 weeks of February. However, as all of you on this phone know there -- the Macau volumes have really not been there because there's a 14-day quarantine of going in and out of Macau from Hong Kong or Mainland China. One of -- some encouraging things that we have seen in Macau is: first, there hasn't been a new COVID case in Macau in weeks; second, in Mainland China and Macau and Hong Kong, teachers and students are back to school as of last week. There's continued to be progress in -- the Macau government has publicly talked about it, in the health check system, which in China, as I'm sure a lot of you are aware, on your mobile phone, you have a red, yellow or green system that gives access to various areas. And Macau has been working very closely with Guangdong to make sure that those health checks are in line. All of those seem to be in our progress. So we would anticipate that, as everyone else is, that progress will continue in terms of reopening the borders in a cautious way, resuming tourism in a cautious way. And the amount of progress that's been made over there has been extraordinary. Just looking at the results, high level, before our closure in Las Vegas, RevPAR was up 8%. In Massachusetts, we were on our way to record EBITDA and win per unit per day before closure was up on the slot floor, about 13%.

In Macau, as we laid out for all of you on the first quarter call, during the closure, we were roughly between $2.2 million and $2.6 million a day of burn. And what we saw from February 20 to roughly March 20 after we reopened, was a gradual increase in gaming volumes and particularly led by VIP and Premium segment to the point where our burn went, in a matter of 3 weeks, from $2.5 million a day to $800,000 a day. And we were back to roughly 25% of our volumes in the fourth quarter. So we're continuing to be optimistic about what's going to happen in Macau as the cautious reopening of the border continues. We're focused on our 3 pillars that we talk about on these calls, which in Macau and in North America, in Macau, particularly: it's investing in our people, which we're doing; investing in our communities, which includes the Greater Bay Area; and really helping to position win to be beneficial in the Greater Bay Area and working on investments throughout the region and investing in our assets. So during these times, we have continued extensive design development work -- design work on our Crystal Pavilion project in Macau, and we remain very excited about it. So that's really where we are right now. We -- I believe we're going to continue to lead in our industry in Las Vegas and in Massachusetts. We're working very carefully and closely on a daily basis with state and local officials and the gaming regulatory bodies. And I believe that the data will be transparent as to opening dates based on benchmarks, and we'll be ready to begin in the new normal atmosphere.

With that, I'd like to turn it over to Craig to talk about some of our financial results.

Thank you, Matt. This quarter, I'll focus my remarks on the company's current liquidity position and our expected cash burn rate. At the onset of the outbreak of the virus in both Asia and the U.S., we took immediate and decisive action to bolster our global liquidity position, maximize our financial flexibility and preserve cash. On April 30, our global cash and liquidity position was nearly $3.4 billion, providing the company with significant runway to weather the impact of the pandemic on our business. In Macau, where we drew down our revolving credit facility in February, we had approximately $1.8 billion of available liquidity as of April 30. And in the U.S., we had total available liquidity of approximately $1.6 billion at the end of April. Our already strong domestic liquidity position was recently bolstered by the issuance of $600 million of unsecured notes in April. In fact, the transaction was upsized from $350 million and was approximately 8x oversubscribed. We were pleased to be the first company in our industry to issue unsecured notes since the onset of the pandemic, once again highlighting the strength of our brands and our business. We also obtained a covenant waiver for our U.S. credit facility, further increasing our financial flexibility. We are well positioned to bridge the current period of uncertainty and to thrive operationally and strategically during the recovery period.

Turning to our cash burn rate. Upon the closure of casino operations in Macau in February as Matt just alluded to, we announced an expected daily OpEx burn rate in Macau of $2.5 million. As he also mentioned, upon reopening in late February, our normalized EBITDA burn rate improved to approximately $800,000 per day in March. And with the subsequent implementation of additional public health measures, quarantines and border closures, this rate in April was approximately $2 million per day. Reflective of limited business volumes. Until the reimplementation of visa schemes and full reopening of transit to Hong Kong, we expect a daily burn rate in the $2 million to $2.5 million range in Macau, excluding interest and CapEx.

In the U.S., we have currently committed to pay all our team members their full wages and benefits. Under this approach, our daily OpEx burn rate in the U.S. is approximately $3.6 million, inclusive of corporate expense. Globally, cash interest expense and our scale down CapEx program combined are approximately $1.7 million per day, and thus, our current global worst-case, all-in daily cash burn rate, is approximately $7.8 million per day, meaning we have sufficient liquidity runway in a worst case, no revenue full pay environment until at least the third quarter of 2021. But we will, of course, continue to actively assess our cash OpEx usage and liquidity position as the situation evolves, and we'll make adjustments as required based on the facts on the ground, including likely reopening dates.

On the CapEx front, we have postponed the Wynn Las Vegas room remodel, which was slated to begin in June conserving approximately $170 million of cash and liquidity. We're fortunate to have the highest quality room product in Las Vegas, and we plan to revisit the project again as we plan for 2021. We will also be very judicious with our global normal course maintenance capital spending over the coming quarters, only proceeding with our highest priority projects. Our preconstruction planning work on the Crystal Pavilion at Wynn Palace continues with our in-house development team, as Matt mentioned.

And in order to further solidify the company's financial position, our Board, along with senior management, have decided to temporarily suspend the company's quarterly dividend, preserving over $100 million of liquidity per quarter. We look forward to resuming the dividend when business conditions permit.

Lastly, I'll quickly note that our reported EBITDA for our U.S. properties in the first quarter was negatively impacted by a $75.7 million accrual associated with our commitment to pay our domestic team members' full wages and benefits after quarter end from April 1 through May 15. $56.4 million of this accrual was for Wynn Las Vegas and $19.3 million was for Boston.

With that, we will now open up the call to Q&A.

(Operator Instructions) Our first question comes from Carlo Santarelli from Deutsche Bank.

Matt, Craig. For starters Matt, maybe you could talk a little bit about -- obviously, we have some time now in Macau until kind of some of those quarantine and visa restrictions, IDSPs restrictions relieve a little bit. When you start thinking out a little bit, the summer months, how do you envision the ramp in business across the segments?

So just based on our limited experience between February 20 and March 20, we definitely saw the VIP and premium segments come back faster. There's clearly pent-up demand for activity. If you look at what's going on in Beijing and Shanghai, the -- go back to work and resume production campaign that has been launched, there's a lot of activity. So I do believe that there will be demand for Macau, without a doubt. I am also very happy that we're in the business of the premium in high-end, which requires less people and more revenue. So at Wynn, we're not looking for 100,000 people a day to be going through our properties. That's never been our business. We've always been focused on the premium end. And I believe that, that will definitely be the segment that comes back first in Macau.

And Carlo, I would just add to that. As Matt mentioned, when we reopened in February and into March, we got back to 25% to 30% of our Q4 '19 gaming volumes. That really reduced the cash burn rate and frankly, wasn't far off from the 45% or so of Q4 2019 GGR volumes that we need to hit EBITDA breakeven. So you'll have your own view of Macau-wide GGR, mix, share, et cetera. But whether it's VIP or premium mass lead, we feel like the snapback will be pretty quick. And that'll obviously help our cash flow position there.

And Craig, of that 45% that's breakeven. I'm assuming -- you're assuming that's the same split as you generated in the 4Q that you mentioned?

Yes.

Great. And then if I could, just one follow-up for either of you. How much do you guys think about the presence more or less of the 5- to 10-year view that Beijing, Macau will take, as it pertains to the second -- as it pertains to the concession renewal process and the importance of the capital spending, clearly, you guys have the Crystal Pavilion and whatnot. But in terms of that renewal process, how much do you think that 5- to 10-year plan will factor into the thinking around the concession renewals?

So Carlo, it's Matt. Again, we believe in what's happening in the Greater Bay Area in Macau and China. We are focused on doing the best we can to be a part of it and to invest in our people, our communities and our assets. So we put that plan together at the beginning of this year. It's still our plan. We're focused on it. We think it makes a lot of sense for the community, for our people and for our shareholders. So that's really where we are, and that's -- we're not -- we have not deviated from that plan.

Next question is from Joe Greff with JP Morgan.

Matt, the first question relates to Macau. Obviously, you saw strength -- relative strength in the VIP and the premium segments in that period in February and March. Can you talk about the status of your top junkets or the top junkets in Macau? What kind of financial position are they in? How mindful do we all have to be this as a consideration to assess the VIP segment recovery -- would you be willing? And are you anticipating lending more to junkets and directly to VIP players?

So Joe, we're obviously in very close contact with the large junkets there. I think everyone's trying to understand what liquidity will look like. We don't have any answers right now on how much we'll be loaning to our junkets. But it does seem like the larger junket operators are still okay on the liquidity side, and everybody's just waiting to see what's going to happen. Ian, do you have any thoughts on that?

Anecdotally, locally, the junkets are just like the rest of us, they're waiting for the borders to ease and to get back into business. They've -- like the rest of us, have kept their teams together in anticipation of business picking up. We can see the pent-up demand. I think the May holiday has given people a lot of encouragement. Something we talk about locally is the Macau advantage. We have proximity to China. We've got proximity to Guangdong, the biggest, wealthiest province in China, 114 million people, of the 49 IVS cities in China, 21 of them are in Guangdong. It looks like our borders will be opening up over the next couple of months. And I think everybody is anticipating us building business very nicely. There is pent-up demand in China. What we've seen over the May holiday is a lot of resort and luxury-driven travel, a lot of family-driven travel, which is very good for Cotai. We saw Chimelong Resort just the stone’s throw from Macau, absolutely packed over the May holiday. There are people that want to come. And once the borders ease, we will have players and we will have customers back, and the junket are in the same position as us.

And Ian, I think just to clarify. The May holiday traffic that we witnessed was in Mainland China, not necessarily in Macau. But Chimelong, which is right in Hengqin Island, had really strong volumes and as well as lots of resorts around. So I think that's a great point. There's clear demand for the product that we offer.

Great. And then switching over to Las Vegas. Can you talk about your current thoughts on how you're opening? I'm presuming it's going to be 1 of the 2 assets on the strip. And when you think of what sort of -- kind of percentage of revenue, EBITDA breakeven threshold you need there? That would be helpful in understanding how you're thinking that. That's all for me.

Sure. So Joe, I'll start off with this. In Las Vegas, we're still working through what our opening plan is going to look like. We're working closely with the state officials and the gaming control board here. It's unclear if it will just be 1 of the 2 assets. I'm currently -- given all of the occupancy limitations that we will have self imposed, it will -- it could rarely likely be both of the assets open, but just with occupancy restrictions. We do anticipate, as we get closer to an opening weeks from now, that there will be pent-up demand in the leisure segment. We've seen that in a lot of surveys that have happened out there. And so we're working through that. I think each day people's mentality changes depending on where they live and what they're experiencing. And if you look at what's happening in Texas right now, with the various food and beverage outlets, if you look at what's happening on the beaches in Southern California, we're going to have a very safe environment, but we will have an environment that I think a lot of people want to come participate in. Clearly, we won't be opening large mass gathering places, night clubs or convention areas or shows. But we will be opening most of our restaurants and -- working with our retail partners to try to have an experience that will be safe and fun. So Marilyn, do you have anything you want to add to that?

No, I think that's really the essence of what we're going to do. I mean we do see demand, and we see the leisure market coming back, the drive in market for sure, the casino customers, the value-oriented ones. And some of our hosted customers can't wait to come through the door. But when -- whatever we open, it's going to be an integrated resort experience that will rival any other hotel that is going to be opening up -- any other resorts that will open up.

And Joe, the answer to your question on the -- it's Craig here. The answer to your question on occupancy. It really depends on how much of the campus we open, as Matt alluded to, which we'll make that decision based on public health considerations and our view of demand over the course of '20 -- looking forward over the course of all of 2020. So depending upon what we opened, we would expect to break even at the 50% to 60% occupancy level.

Next question is from Felicia Hendrix from Barclays.

Craig, on liquidity, you've given us a decent amount of information. Just wondering if we could take one step farther. Just in the extreme case that you did need to access more liquidity, just wondering if you could walk us through the incremental levers you have to pull both in Macau and on the U.S. side.

Sure. I think you saw us access the market just last month. And so we have the -- we think we have the ability to do that to the extent that we need to. But with $3.4 billion on the balance sheet and really being a peak burn now, I don't anticipate we'll need to do that. But I think the capital market's showed that they were more than happy to embrace us.

Okay. So there's no limitation in any of your debt -- any of your facilities?

The covenant in Macau is at the concessionaire level on a senior secured basis. So we would have access to the bond market at WML. And in the U.S., we actually got a covenant waiver, even though that's also a secured covenant. We got a covenant waiver on our U.S. facility. So we have ample room to add liquidity to the extent we need it, though, again, I don't anticipate we will.

Yes. Great. And then and then Craig, you also -- just was mentioning CapEx. So I was just wondering if you could get into a little bit more detail, walk us through kind of how you're thinking about capital spending for this year and next year. And you did mention some of that relative to Vegas. With things shut, does that give you an opportunity to get a head start on or accelerate your room remodel plan?

Felicia, it's Matt. So we went through our long list of capital projects in Massachusetts, Las Vegas and in Macau. And we've effectively put all of the short-term things on hold outside of something that's under construction now, for example, Delilah in Las Vegas that was halfway through construction. We're going to finish that. But the large projects, room remodels, some of the other things that we were looking at, we have put on hold until we're cash flow positive. So we're really focused on maintaining our liquidity right now.

Our next question is from Shaun Kelley with Bank of America.

And just wanted to pass along my sentiments and thanks for also just keeping all of the employees on the payroll. I mean, you're one of the few operators across all of the companies that we cover that's doing that. And I think that needs to be said that, that's a -- it's a really big statement to your local community. So I think that's a big deal. But Matt, just overall, if you could comment, just -- you mentioned in your prepared remarks, you're talking to a number of CEOs and partners out there. Was curious specifically on -- if any of those conversations have moved into specifically airline partners as it relates to lift into Las Vegas? Because that's pretty important, particularly as you get into the higher price points, and it's obviously going -- need to be something that works together with the broader industry out there. So just how are you thinking about that?

Yes. That's a great question, Shaun. And we -- I've personally spoken to the airlines that have lots of lift capacity, in particular, into Las Vegas. And in the month of May and in June, there was a dramatic reduction in lift capacity, as you can imagine. Some of the large airlines are starting to put their plans out, their standardization plans, which we've been encouraging them to be transparent and to start putting that out. I think that there's continued disagreement between the airlines and TSA on temperature checks, which is kind of a logistical problem as to how are they going to do them? And if so, who's doing them? So there's some behind the scenes work that needs to happen. And -- but the airlines are definitely focused on it and they're contracting the list now. But based on my conversations, it's been fairly short term because trying to predict what demand will be 60 or 90 days from now is almost impossible, given it's the speed of the information in the economy that we're all learning every day.

And then maybe the other question along the same dynamic would just be having been through one crisis not terribly long ago, the pricing strategy within Vegas and across the strip is also going to be an important variable here. And obviously, you're positioned very much at the premium end, but you have to be impacted by what else is going on in the market. So how do you think -- or how are you thinking about both the sort of the balance of new supply coming back along relative to how you can kind of retain some rate integrity? And -- because you kind of have to have both those variables work for this to be a successful reopening. So just how are you thinking about managing it?

Yes. I think that on the supply side, that in the early days, I don't think not a lot is going to reopen, in my opinion. I don't know how many resorts are going to reopen, but it's certainly not even close to the entire Las Vegas strip. Clearly, our base of group in the -- is -- well, not -- is nonexistent in the first few months after we reopen. So we're really focused on casino and on leisure and trying to capture a disproportionate amount of that market, people coming to Las Vegas. So I think it'll be a slow ramp because the group will not be there, but there's also not a lot of -- I don't think there'll be a lot of supply either. So our pricing power, I believe, will help dictate how full we want our property to be.

Next question comes from Thomas Allen with Morgan Stanley.

Mr. Matt, you were at the White House last week, meeting with the President. What did you learn there in terms of, one, the government's expectations in terms of the pace of recovery? And two, any interesting comments from other corporates around demand to start coming back to Vegas?

I think there's clearly a focus on a safe reopening of the economy. I think that the -- it's obvious what's happening with this rapidly decelerating curve with our economy that, that has to be blunted as we blunted the growth of COVID-19. And so there was a real focus on how to do that. How to -- testing is continuing to be a real point of focus. And on that, I think that there's been tremendous progress in terms of testing and testing capacity, hundreds and hundreds of thousands of tests likely will be performed over the next couple of weeks on a daily basis. In Las Vegas, like I said, we're going to have the ability working with UMC when we open it wins. Any employee and any customer that wants the swab test, you can get it, we have on-site. Anybody -- we have 3 various antibody tests that are going through EUA approval right now and one that already has it, that we're working on. That will also be available. So I think that until it's a commodity, businesses themselves need to work with medical communities to make sure that those are available. And so we're definitely doing that. But there was a clear focus on how to reopen the economy and to start moving in that direction.

Okay. And then just as my follow-up question, LVS, when they reported 2 weeks ago, talked about being more interested in M&A right now. Do you think there will be more industry consolidation? And where does Wynn -- the company fit in?

Yes. I'm not sure about that. I think that during these times, there's usually transactions that are out there, and there could be some really interesting assets that could come up that I think everybody will be watching.

Our next question is from Harry Curtis with Instinet.

My first question relates to just the timing of opening in Macau. What do you think the authorities are waiting for, particularly given the opening of Chimelong and the fact that there haven't been any cases in -- of COVID in Macau for weeks?

I'll start with this and then turn it over to Ian. So I think the situation has been handled really well in Macau. I think it's been almost 28 days without a case. There's been clarity, daily press conferences, lots of interaction. Operators are focused on it. Employees are being very compliant in terms of wearing mask and what they need to be doing and hand sanitization. And there seems to be a really deep collaboration and cooperation with Macau and Guangdong in terms of these health checks and to begin to move in a very reasonable and data-driven way. So to me, it seems like every 2 weeks, there's progress. There's real progress. And in a way that is measurable and people can understand. Ian, what do you think? Or Linda?

This is Ian. The Chief Executive in his policy address said that when Macau and the region of Guangdong are stable, that they will look at the process of reopening the border restrictions. They've been very methodical about it. When we faced our 2 levels of risk with the pandemic, they were extremely quick and decisive, which we appreciated. And now we really appreciate the fact that it's about safety first. They're phasing the lifting of restrictions. They've had a very progressive development over the last 2 weeks. The first stage was allowing teachers and students based in Zhuhai, who live in Zhuhai and come over to Macau to attend school and teachers, to work. And so they've gone through that process. That process involved introducing relative mass testing for the individuals, and that was very successfully done. We're now looking at Macau people that are working in Macau but actually living in Zhuhai. They're the next stage of the testing process. The merging and synchronizing of the 2 health colds for Guangdong and for Macau involved a lot of regional cooperation between government departments that -- they're deep in dialogue about that. The system is being set up and now they're trialing it. And they've already altered the border open and closure hours back to where they were previously. So there's a lot of things happening. One of the great outcomes of this is the dialogue between Guangdong and Macau at a government departmental level. This augurs really well for the future. When you look at Hengqin Island and how that opens up to Macau and how we become a bigger part of the Greater Bay Area. So we appreciate the sequencing, the measured approach and the safety first approach, but it's happening and it's imminent.

Maybe as a follow-up, Ian, do you think the testing for customers wanting to either get a visa or by definition, cross the board, do you think testing is going to be a prerequisite?

There's no clarity on that right now, Harry.

Okay. All right. And you also mentioned, Matt, testing in Vegas, what about -- are you testing your employees in Macau as well?

No. We're -- this was a -- just the University Medical Center and Wynn Las Vegas reaching that agreement. In Macau -- because the government has done a very good job there. There are test available for people that need them. My understanding is that teachers are getting tested when they're going in. And so I think it's a little bit of a different situation there. What we noticed here in Las Vegas is there was testing capacity, but nobody prescribing tests because people weren't hitting the 5 or 6 symptoms. So we decided to cut through that and make a direct partnership with the research hospital so that our employees would have the ability to get tested.

Our next question is from Stephen Grambling with Goldman Sachs.

Two questions. First, as a follow-up to Thomas' question on consolidation, what would make an asset more interesting or less interesting during these times or surface willing sellers?

And then second, but perhaps related in some ways, how is your thought process on the right capital structure specific to the right leverage levels of amount of liquidity evolve if we think longer term, given this experience?

So from my perspective, on the consolidation, our expertise has been, and I think always will be, development and running the best assets. So we are not actively thinking about M&A right now. We're actively thinking about how do we have the industry-leading assets in the markets where we operate. And take market share as we open. And then how do we develop the land that we have around those over the longer period of time. So that's really our strategic goal right now. Craig, do you want to take the follow-up?

Sure. On that capital structure side, I would just reiterate liquidity, liquidity, liquidity is king. We have always maintained a pretty healthy amount of liquidity, and I think that, that has served us well in this process. I think it's a little too early to start talking about target leverage levels, we need to actually get back to generating cash flow first. But certainly, maintenance of liquidity is -- was and is a really important part of capital structure management in times like this.

The final question is from David Katz with Jefferies.

Look, I think you've given an awful lot of detail. And Matt, you've obviously put the company's resources behind doing a lot of research. What thoughts or concerns or views do you have about the prospect of opening up in kind of a choppy fashion or any kind of a resurgence that could delay the ramp-up? Not that you would predict it one way or the other, but perhaps provide contingencies beyond just the financial ones for it.

That's something that I think about and we think about every day, which is why we've continued to encourage phased openings and watch the data. So I think from a health and safety perspective, we've done, I believe, just about everything that we could possibly think of. And if there are other good ideas, we will implement them. But what we're going to do is think about it incrementally, watch it. And then we have to watch the data from all the communities around us and what's going on. So do I think that there'll be moments when we all will need to pull back a little bit or when we can push forward a little faster? Of course. And so we need to make sure that our teams are prepared for that and that we can learn as we go.

So thank you, everybody, for joining us today. We hope everybody is -- stays safe and healthy, and we'll talk to you next quarter.

Thanks, everyone.

This concludes today's call. Thank you for your participation. You may disconnect at this time.