Las Vegas Sands Corp. (LVS) Q1 2012 Earnings Report, Transcript and Summary

Good afternoon. My name is Ashley, and I will be your conference operator today. At this time, I would like to welcome everyone to the Las Vegas Sands Corp. First Quarter Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. Daniel Briggs, Vice President of Investor Relations. Mr. Briggs, you may begin your conference.

Thank you, operator. Before I turn the call over to Mr. Adelson, let me remind you that today's conference call will contain forward-looking statements that we're making under the Safe Harbor provisions of Federal Securities laws. The company's actual results could differ materially from the anticipated results in those forward-looking statements. Please see today's press release under the caption Forward-Looking Statements for a discussion of risks that may affect our results. In addition, we may discuss adjusted net income, adjusted diluted EPS and adjusted property EBITDA, which are non-GAAP measures. A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures are included in the press release. Please note that this presentation is being recorded. With that, let me please introduce our Chairman, Mr. Sheldon G. Adelson

Thank you all, for joining us today. Before we go to Q&A, let me make some brief opening remarks. I want to apologize in advance if I -- if you hear some paper rattling because I've got several papers that people have given me. I'm trying to take information from the paper. We're very pleased with the overall financial results for the quarter. As you saw in the press release, we have set an all-time industry-wide record. No company in our industry has ever achieved $1 billion EBITDA for a quarter. We're very proud of that, and we hope it will be the first of many -- well, we know it's the first of many records that we're already setting, and we hope it will be the beginning -- well, a continuation of a lot more records that we’re going to set. We also -- we went up -- the earnings per share went up 89% from last year to $0.70. Now I know there were a lot of estimates coming out in the 50s, in the $0.52, $0.53. I even saw an analyst last night that said his estimate the day before our earnings release from $0.56 to $0.61 or something like that. That was probably the highest. Our net revenue, after -- and again, according to GAAP, net revenue increased 31% to $2.76 billion. Now frankly, the gross revenue was somewhat higher, and I've been having discussions with our auditors, PricewaterhouseCoopers, as to why the industry reports net. And if I read the rules regarding it under the FASB, the Financial Standards -- the Financial Accounting Standards Board, under the rules, I read that, and I have some questions about that. In any event, it would be up to $3-point-something billion. The EBITDA margin is an industry-leading EBITDA margin of 38.6%. In the case of Macau, we have results that are in excess of our Cotai share. This is the 11th consecutive quarter of EBITDA growth, and I have the chart in front of me. And it comes to a whopping and instead of CAGR, C-A-G-R, compounded annual growth rate, we've got -- I don't know how to pronounce it.

CQGR.

CQGR. Compound quarterly growth rate of 14.2% from quarter-to-quarter. I'm looking at a bar chart. For the last 11 quarters, we've gone from $247.6 million in EBITDA to $1,070,000,000 EBITDA. I suppose that managed to surprise a few of you, guys, because nobody even approached $1 billion and most of the analysts that I -- most of the analysts' projections were in the, I believe, some in the 800s, some in the low 900s. In earnings per share, we had a 47.1% increase in earnings per share. In gross revenue we had a 9.4% increase and a net revenue and a 9.1% increase. There was the -- let me look at our 2 biggest markets. Our business in Macau has never been in a stronger position. Our mass business is growing, our VIP efforts are working and our non-gaming revenue, the backbone of the IR model also increased significantly. We've had record consolidated non-model drop of $1.92 billion, up 10% versus 2011. We're cooking on all cylinders. We’ve had record consolidated slot handle up 53% to $2.1 billion. Retail mall revenue increased 30% versus last year, and I'd like to address the issue that somebody talked about that we were trueing up or loading up our books to show more income, more retail income in the fourth quarter of the year. So let me point something out you. In the United States, I've seen figures that, and you guys will probably know better than I, but I'm only going by memory, that 40% of an annual sales are done between Thanksgiving and Christmas. So the larger percentage of sales over there are done during these periods. They're in the same period. Hong Kong is not just -- it doesn't have exactly the same holidays that the mainland does. There are a lot of Christians in Hong Kong, a lot of Christmas shopping going on from different visitors to Macau. And the interesting part about it is that it's natural that in the fourth quarter, because of our relationship with the -- there is no trueing up. We don't do true-ups. But where something is required to do, a true up will do it but this is not a policy nor a practice to say we're going to pump up the figures in the last quarter of the year. The reason why the last period of year is because that's when people exceed the percentage; it's called the natural breakpoint, where they exceed the percentage of revenue that constitutes the baseline, and they go beyond the natural breakpoint. And therefore, they go into excess rent. So we get excess rent during that period. And that is why it's substantially more during that fourth quarter than there are in other quarters because the breakthrough the percentage barrier. Now there are some retailers that take percentage on a monthly basis because they’re doing so much more than the basic rent, and there are some retailers that -- everybody reports on -- well, not everybody, but the majority of the retailers, of the several hundred retailers we have, report on a monthly basis, and there are some that report quarterly. I think there's even some that report on an annual basis. So as far as retail is concerned, there is no trueing up. The percentages and the income is the way that it occurs. Hotel revenue is up 19% versus last year. And we have now -- we will have 10,000 hotel rooms before this time next year. We will open -- plans that we'll open the second phase, phase 2a, I guess, it's called of Cotai Central by September, mid-September. And I think the last phase will go to either December or January, probably January. So that will give us a total of close to 10,000 rooms and that represents probably 50% of the hotel rooms supplied in the entire city of Macau. As far as 4-star and 5-star rooms are concerned, we're way up there with a high percentage annually. Referring to what's going on in Singapore, we had another very strong quarter. The mass win per day increased 21% to $4.47 million per day, $4,470,000 per day. The mass win for Rolling Volume was up 26% over last year's quarter 1. I'd like to address that questions that have been brought up before when people think that we plateaued -- where the market has plateaued. Let me point out to you that there is, if you take 73% of about $34 billion that was conducted in Macau in 2011, you would come to about $25 billion of high roller VIP play. Now all those players don't come down to -- they don't represent the fertile opportunity that 100% of those VIP players are going to come to Singapore on one weekend. There will be a turnover, there will be a revolving number of our people coming from Macau, just like those people -- that are going to Macau that typically also go to Las Vegas; they go to Sydney, Australia; they go to Melbourne; they go to other places to play. They will -- there is a very healthy market of $25 billion of VIP play that occurred in 2011, we're already a quarter beyond that. That represents a truly fertile opportunity for us to increase and to get beyond what people think potentially is a plateau in the number of VIP players. We are constantly surprised at the -- who they are, the number of people, how they come out of the woodwork and how many they are in the world. There was a time, many years ago, 10, 15 years ago, that people thought that in the entire world there was as few as 150 VIP players. We sometimes get that in a few days, a week or 2 weeks or whatever. So there are an awful lot of people that are playing all around the world and from many different countries that nobody even thought of before. So the word plateau, in terms of Asia is not in our vocabulary. Let's see, the high-margin segments continue to grow. Our hotel room revenue was up 38% over 2011, and our mall revenue was up 25% over 2011. As in Macau, Marina Bay Sands also achieved a new record property EBITDA of $473 million. And clearly we -- if you look at the last 11 quarters, you see, we've gone an average of 14.2% quarter-to-quarter...

Compound quarterly...

Compound quarter.

Compound quarterly growth rate.

That's right. It's one of those. And if you look at that, we're just going to continue quarter by quarter. I know there are a lot of people out there, that there are some analysts out there who I've seen that seem to suggest that they either are playing on a quarter-to-quarter basis. This company is out to attract long-term value investors, investors who want to invest in a company that pays dividend, investors that want to be in a special company, and in that respect, let me read to you, at our September Investor Day that we had in New York, we read out -- there were 6 companies that fit into several categories, and I'll tell you that there's fewer than that today, but let me tell you what they are. There are 12,222 publicly traded companies on U.S. Exchange. The next category is market capitalization. There are 155 over $20 billion, and we are pushing back up against $50 billion. And that revenue compound annual growth rate of over 20%, there were 12 companies. So starting off with 12,000 plus companies, we're now down to 12 that had compound annual growth of 20%. There are, in 2013 estimated free cash flow that will yield 7.5%. There are only 3 companies. So now we're down to 3 out of 12,000. And the companies that pay current dividend, all this plus, including companies who pay dividends, there are only 2, LVS and Apple. Well, considering what Apple did today, let's put Apple first. Let's say Apple and LVS. I think it puts it in a very unique position for being considered a value investment. The second item is that -- the next item I'd like to address is that somebody came up with the idea that there was going to be a seventh concession here in Macau. Now, I don't know whether they've been reading the press or looking at press clippings or talked with to the government, but the government -- or listening to the government. The government has said, both in the prior chief executive administration and the current administration, 2009 was the year, they were going to reconsider it. They said no, no, no. If there's anybody that doesn't understand what no means, please give me a call offline, I'll be happy to explain it to you. There was also somebody who said that -- somebody speculated that we're going to have to move 386 or so odd number of tables from our other properties. Let me address that. On a daily basis, we are always shuffling tables around, moving them from one place to the other, changing the game of play from, say, a blackjack to a baccarat or vice versa. And we're always trying, on a good operational basis, to improve performance of every one of our products, whether it's a table, a slot or an EPP. So we always move tables around. Both with any property and in between properties. Now we have to get approval from the government every time we move it, so we do that. The government has committed to lenders, to provide 400 tables. They gave us 200 tables for the opening of the first of the 2 mass casinos, and they're going to give us, presumably, the second 200 tables when we go open our second casino. The casino in March 6 is part of Cotai Central. So I don't know how somebody knows so much about the government. For those people that are interested in -- that know more than we know, and maybe you would ostensibly know more than the government knows, it's right to apply for a job at us as a government relations person. Maybe we can improve our flow of information in a more qualitative way. I'd also like to straighten out another issue, and that is there's been a lot of mention of $35 billion that we're going to spend in Europe, for Europe, in Spain, for the European market. That figure was taken from a press conference that I conducted at the opening of Sands Cotai Central in April on April 11, where I answered the question, vis-à-vis what was the total budget going to cost. But I'd like to explain that so we could put that issue, that false issue, to bed once and for all. We're going to build the property, at least that's the way it's planned, over a 9-year period. That will include building four 3,000 room hotel-integrated resorts, hotel-integrated resorts, every 3 years. The first one will start off and we're only estimating and we haven't drawn our plans, we don't have the blueprints. We don't know exactly. We've had a quantity surveyors, these are independent estimators in construction, give us numbers. So the most we can estimate at this time is that each property will be [ph] $2 billion or $3 billion per property. So it can be from 8 to 12. And as Ken Kay announced in September Investor Day meeting, that 25% to 35% of that will be equity. So let's say, the largest amount of money this company will be expected to put out over a 3-year period is $4 billion in equity, not 35. That's only the first phase. And I want to make it clear for about the 942nd time that I have said to the market, we will not go into any development where we don't see the 20% cash-on-cash return. So I repeat that for this 974th -- 975th time. No investment without a 20% cash-on-cash return. So then we'll take the money that we're earning in Phase 1, and we'll have another 3 years to take that amount of money that we're earning to put up for the equity for Phase 2. So, so far we're up to about, give or take, $3 billion to $4 billion in equity. And then Phases 1 and 2 will earn enough money over the following 3 years, so that we can finance almost fully Phase 3. So, so far we have $4 billion. If anybody else has any arithmetic over and above that, I'd be happy to listen to you. But this is what I know we're going to do, and since I'm the CEO and Chairman, our board has agreed with this. This has been discussed ad infinitum and within our own company, and that's what we intend to do, 20% cash-on-cash return. Otherwise, we don't go. Equity goes out to the first phase only, and the equity we earn for the second phase will come out at the first phase operating. I don't think I can be any clearer than that. Let's see, let me finish by talking about our development activities, and then we'll open up to questions. Two weeks ago, we opened the first phase of Sands Cotai Central. As it ramps up, Cotai Central will add to the critical mass of rooms, retail mass to the Cotai Strip, which will make it an international destination for leisure, business and conventions, and it will validate my original vision to what was then swamp in a bay. If anybody wants to see the pictures of what it was at that time, we'll be happy to send it to you, and just send me an e-mail. And we will then have accomplished the establishment of a Las Vegas in Asia, or as I've said many times before, Asia's Las Vegas. And what we intend to do in that respect, we'll have Europe's Las Vegas. It will have to be called Europa Vegas or Eurovegas or something like that. So that's it. I think that -- let me look at my papers. Well, I'd like to tell you that in terms of Macau, we're extremely happy with the progress we make in Macau. As I've said in my last couple of earnings call, we expect that our market share with Sands Cotai Central, which, by the way, is the only product opening over the next 3 years, the only product opening. There is no other construction underway. I'd like to also point to something else, because everybody that didn't want the product -- didn't want Cotai in the first place because they didn't think it was either ready or they didn't think it was viable, or for whatever reason, all those people that didn't want to have a piece of land in Cotai, now will cut up their arms to get a piece of land in Cotai. I just want to remind everybody, we bought, we paid for and we own Lot 3. Lot 3 can hold 3,600 rooms. We are applying for the government for permission to move forward with that, and of course that will require -- that will usually require an extension of time to build. I might also point out that not in the history as Macau, has the government ever required a piece of land, because somebody didn't build on to. The government is a very cooperative, accommodating government, and the government wants lights. They attribute the change in Macau to a leisure, business, convention destination to Sands China Ltd. and our majority of subsidiary and of course, our parent company, Las Vegas Sands Corporation. And they know that we've done more. As a matter of fact, I saw a clipping recently that said that Sands, we hope, petition the government or made a statement that the government shouldn’t require her to put out convention space and shopping space and this and that and everything because of a nation that has not done such a good job on it, but she didn't have to add to the MICE space that has to be done. We have the biggest footprint in Macau in terms of hotel rooms, MICE space retail, and they're all important visitation drivers. There are no other development activities. The government has not approved any development. And to the best of my knowledge, no land has been transferred to anybody except Galaxy got the land at about the same time that we did. And one of the clipping said that they're going to announce, the rumors are they're going to announce a non-gaming hotel on -- more rooms. And on the balance of the land and I understand they're putting it next to our exhibition center so they could take advantage of filling up some of the rooms from our MICE business. So that's it. I can't -- I'm very glad we're only one of 2 out of 12,222 companies. And I just want to tell you that our whole team is here listening. And we'd be happy to answer your questions at this time. Operator, let's go to the questions.

[Operator Instructions] Our first question comes from the line of Joseph Greff with JPMorgan. Joseph Greff - JP Morgan Chase & Co, Research Division: This is going to be my first question, Sheldon, but since you brought up the topic of Spain, have you entered into a memorandum of understanding with either Madrid or Barcelona? And do you know what the gaming tax rate is, the corporate tax rate? I know you were trying to get some concessions on labor and things like that. I guess how far along are you?

We are at the point where I'm going to fly our Board of Directors over. It's a very big decision. We're going to look at Madrid and Barcelona. And let's say, we're on the cusp of having a decision. I'm just having a little difficulty in getting the whole board, scheduled to be worked out on any one day. If somebody isn't available, we'll take as many board members as we can, as soon as we can. And I hope that we can -- I'm looking forward to doing a -- to having a decision. Where it's going to be located and what parcel of land we're going to select, maybe within the next month or so. Well, that's going to grow [ph] -- our gaming next year [ph].

Joe, this is Mike Levin here. Negotiations continue with both governments of Barcelona and Madrid. We expect those negotiations not only to continue but at some point, once we make a city decision, those negotiations that we agree upon go to legislation at the various legislations of various governments involved. And at that particular time, when that legislation closed, the governments and it becomes public knowledge as to what's going to be happening.

What I'd like to say is that it'll be an unusual comfort in the world and [indiscernible] we have to confirm the deduction of a highway [indiscernible] and we structured our idea that we earned it, so we bring this out -- And everybody else could do this. I think they're going to spend a cut [indiscernible] we're going to spend. And it'll be -- I can't say for sure. It'll be a highly favorable rate. Joseph Greff - JP Morgan Chase & Co, Research Division: Okay. And then switching topics to Singapore, and then I have a follow-up. Obviously your competitor...

I just want to clear that I don't want the Spanish government to give an opinion. It will be a favorable rate compared to other jurisdictions throughout the world. Joseph Greff - JP Morgan Chase & Co, Research Division: And then switching over to a question on Singapore, and then I have a quick follow-up after that. Obviously Genting got 2 junkets approved for their property. Can you share with us your strategy, your position, whether or not you're sponsoring any application in the near term or what your views are there, with the use of junkets or IMAs there? And then I have a quick follow-up.

It's very interesting, Joe. This is Joe, right? Joseph Greff - JP Morgan Chase & Co, Research Division: Yes.

All right. Very interesting, when I was at the opening, another analyst, a colleague of yours, I don't know if it was from JPMorgan, came over to me and he said, he talked about the advantage that RWS has. Let me explain to you. You’ve got to understand what they mean by international marketing agents. And they specifically did not call them junket reps. The junket rep in Macau does 3 primary services. One, brings the customer; two, provides and collects the credit; and three, shares commission with the customer; and four, somehow rather gets the money to us. Now in Singapore, as we read the rules and regulations, the junket rep could not share commission with anybody else. So that takes away a major incentive for the junket reps to be replaced, to go through the junket reps because there is a share of the commission [ph] . Secondly, they can't give out credit. So that kills something else. We compare the over 100 field salespeople that we have in various offices, particularly around Asia with those 2 junket reps because our customers can -- our field salespeople can go out and bring in customers and get paid on a basis of productivity, probably a lot of detail you're not interested in is how they get paid. But the bottom line is they don't get a percentage of the role. They don't share any of their commission. They're called junket reps here in Las Vegas. And Las Vegas-style junket rep is the field sales guy who gets some limited amount of money for bringing in a player based upon the theoretical play that the player plays or theoretical win. In Singapore, they call them international marketing agents because that's all they are. They're salespeople that bring in a customer, and I suppose they get paid. They can't provide credit. They can't share the commission. So they're the equivalent of our more than 100 salespeople. So we don't see that RWS has any advantage over us. And for those kinds of international marketing agents, we already have over 100 of the equivalent of a function of those 2 international marketing agents. So why are we going after them for? So let me be clear, that’s rhetorical. There's no reason for us to go after those -- that kind of junket, that kind of liaise. Joseph Greff - JP Morgan Chase & Co, Research Division: Okay. And then my final question, then maybe, Ken, you can help me out here. What was the positive hold impact on EBITDA in Singapore and in Las Vegas? And that will be it for me.

He was addressing the question again? frankly, I didn't hear the question.

The question was on the hold...

Okay, let me tell you what we've done. We have -- I keep telling people it isn't a quarterly hold rate, whether it's plus or minus that should be adjusted. If the hold rate is 3.3%, 3.5%, 4%, you got to bring it back down to 2.85%. We have prepared documents that show a 200-day moving average. The 200-day moving average was 2.85%, company-wide. It was a higher percentage in Singapore. I'm sorry I don't have it in front of me. Somebody had it, they didn't give it to me. No, I think Ken is -- somebody is about to give it to me. Let's see, the total Macau properties is 2.90% -- sorry, 420 -- well, I can't get it to 421. I can only -- because that includes probably the second quarter. I can only go to end of the first quarter. Joseph Greff - JP Morgan Chase & Co, Research Division: You can give us the second-quarter-to-date numbers.

The moving average is 2.90%. The Marina Bay Sands -- total Macau and Singapore properties, 3.05% on a 200-day moving average. So that's what counts. Now if somebody wants to go to a more rapid evaluation, I'd like to hold a contest. We can have people guess on a quarterly basis, on a monthly basis, on a weekly basis, on a daily basis, an hourly basis, and minute by minute, and I would provide a multimillion dollar prize for anybody who can guess and determine where our entire company is going based upon win or loss or percentage of hold on a minute to minute basis. Just being sarcastic about that. 3.31%, total; Macau and Singapore properties, 3.05%.

Our next question comes from the line of Shaun Kelley with Bank of America.

I wanted to ask a little bit more about Cotai Central. I understand the property has only been open for 15 days. But I did want to see if you guys could give us any -- your just -- your early thoughts on any metrics that are coming out of property. And also, maybe most importantly, kind of what you're learning about cannibalization across the other properties. Are you seeing any impact at some of your other resorts?

I keep talking about cannibalization. I keep telling everybody the critical mass in a supply-driven industry brings in more people. It doesn't cannibalize others. We are trying to cannibalize our competitors and not cannibalize ourselves. I cannot talk about anything that has occurred since April 1 because that's in the current quarter. And I urge you to turn -- to call this number again, maybe a different number, 90 days from now, and we'll give you all the information you want. I'm going to tell you, I see no reason that our 14.2% growth per quarter of the 11 quarters won’t continue because every quarter we do the earnings call, everybody -- and by the way, for all except for those quarters, it's all organic growth. Because we open up Singapore, it became organic with us. It became a legacy property. And from that point on, it's gone, I think, more than 14.2%. But over the last 11 quarters, it's a spread of 14.2% quarterly. That's Cotai Central. All you have to do is look at our history, look at the position that we occupy in the market. I don't see any other company earning $1.70 billion EBITDA for one quarter, so there must be something we're doing.

Totally understand. We'll check back on that. So I guess the second would be on Singapore. Just wanted to ask, there's a lot of questions around sequential improvement in the market and some of the seasonality there. It does look like volumes came back on the VIP side. So we just want to kind of get a sense of historically, if you look at visitation patterns, Q1 and Q3, kind of looked like they'll be the strongest. Does that also seem like a reasonable expectation as we think about kind of modeling what you guys are seeing there? And how much do you think Chinese New Year really drove some of the activity now that you guys have had a chance to digest that?

Frankly, I'm not as smart as Goldstein. I think he understood the question better that I do, and same thing for Mike Levin. Do you guys want to answer that question? Because I didn't understand it.

On the gaming side, Shaun, we obviously we did underestimate the impact of the Chinese New Year's. And obviously that's our bread-and-butter quarter in this company vis-a-vis Asia, and there's not a discount. We did show nice growth, I think, year-on-year. I'm pleased with that. Again, we're only our ninth quarter of operating there. So it's hard to predict seasonality and even more difficult to estimate the importance of all the new infrastructure, such as the cruise ship terminal, increased growth to China and to Singapore in general, that the mass market growth out of Indonesia and Malaysia. But I think we're very confident that if you look at Singapore and its position in the market, it's a very, very exciting place to travel for Asians, especially newly employed Asians. I think it continues to grow both on the VIP and mass side. Again, being 1 of 2 competitors there is a huge advantage. The duopoly situation is a huge advantage for us and RWS. Singapore has done a new quarter record for us results-wise. I don't think there's any question to growth in Singapore in the future. It's hard for me to determine, except for Chinese New Year's, in fact, if our first -- third quarter would be a better quarter. Fourth is obviously challenged as December isn't there, but we see bright days ahead with the cruise ship terminal, with the Tiger Gardens and the growth of tourism infrastructure, et cetera. And the affluence throughout Asia, I think it bodes well for our growth in the markets.

And I guess last question, maybe for you as well. But just I've gotten a few questions from investors on the margin at the Four Seasons. Obviously, there are some negative mix from all of the junket initiatives. But I guess the question is, is this probably a reasonable run rate in the low 20s? Just given kind of whether the junket business has stabilized? Or is there anything else in that number that people should be aware of?

Good question, I'm glad you asked it. The Four Seasons had -- first of all, has a non-gaming variable in there. The fourth quarter versus the first quarter was down by $13 million as it relates to our retail operations. And I can't -- I won't go to detail, why, but suffice to say, there's a $13 million quarter-on-quarter miss there. You should know that we are very pleased with what's happened in the Four Seasons. Rolling Volume is up 4x from the first quarter of '11 to first quarter of '12. So we’re thrilled about that. Unfortunately, we did experience heavy concentration on our win based versus volume based conditions. The cost is about $10 million to $11 million of additional compensation, and that was a big bang to our numbers. Across the entire portfolio, to put your mind at rest, we ran about $800 million of win. We were 11-plus percent in the margin. We feel good about that. We're still pretty underperformed at that [ph] point. There's concern in the marketplace, I know, as it relates to our bonus program. I think it's simple to say that over $800 million of gaming win of that segment, we did less than $3.2 million. So it's $800 million versus $3.2 million out of this huge junket experience or bonus program. So I think what you're seeing is I'm disappointed because we felt we had much better quarter at the Plaza. We got rich [ph] somewhat, vis-à-vis the win based versus volume based. We got hurt on the retail comparison. And again, normal operating, we should have done -- we should have had normalized profit of roughly 4x we did in the first quarter of '11 and twice we did in the fourth quarter. So I have a lot of confidence, the things David has achieved over there, David Sisk, is extraordinary. Our growth for the first time in the junket segment exceeds the market across the board. I see even brighter days ahead for us in that segment as we get stronger in Cotai Central. And we have no fears whatsoever that Plaza is on its way, both in the mass, the retail and especially the junket segments performing very, very strong.

I want to get into the -- put aside the retailers. Look, the retail venue of our assets is so great that we could eliminate, almost completely eliminate -- if that were included, there's cash and we're able to monetize that, which we don't want to at this point, it will pay off all our debt. We would essentially be in the net cash basis, including the monetization of retail debt free. I want to point out to you that the -- I don't understand. You take one of our 4 properties and -- to make an evaluation. Well, that's liable to hurt [ph]. But we can get down as soon as a -- estimating the impact of every hour's worth of activity. I want to point out that from first quarter ’11 to '12, our gross gaming revenue went up 32%. Our gross rolling revenue went up 40%. And that was helped by a big jump in the Four Seasons in the Plaza Casino. Our Non-Rolling table revenue went up 19%, and our slot revenue went up 21%. Those are the numbers. If you want to -- we think it would be an exaggeration to say that one of the properties didn't perform as good as somebody expected. That everything has gone into hell in hand basket, I would strongly suggest that, that would be an overreaction or exaggeration to the reality. We've got a 14.2% quarter-to-quarter EBITDA, and that's what really counts.

And Shaun, just to close the door on that. In the first quarter of '11 we rolled about 2.375. We should have been $8 million. We did like $8 million on that. This year we rolled 10.7, we should have made $39 million normalized, if you take out all variations. So excluding 30-plus million dollars year-on-year growth in that segment profit-wise, from my way of thinking, is great. And I think we're going to be very strong in that segment.

Robert was talking about the junket segment right there. Yes, just junket without directly IP.

Our mass business is off the chart. We wish we could get more tables in there though.

And are your next question comes from the line of Mark Strawn with Morgan Stanley.

Just one question for me. On the mass side in Macau, the business is groing nicely there on a sequential and a year-over-year basis, but still growing slightly slower than the overall market. Can you talk about what kind of steps you're taking to narrow...

[indiscernible] On a longer-term basis, that's true. But on this quarter we grew in excess of our fair share.

Okay got it. And just think about the steps you're going to take to continue to grow that business and when and how you see Cotai Central contributing to that.

I think this company -- keep that in Cotai Central for this next quarter.

I think, Mark, we all know there's no confusion here that what this company has is probably the most dramatic opportunity is our gaming to be very, very strong in the mass segment. I think we all recognize the junket segment has ruled Macau. It has been amazing. Hard to believe, the 7 to 8 years, the growth we've seen. I think the junkets are important. The mix, everybody, but everyone can participate in that. I think what LVS has and I think we are working hard on is maximizing our huge table and lodging advantage we have over there. Because I think at the end of the day, it's about capacity to gamble, place to sleep, a shopping opportunity and a place to eat. We have those in spades across the board. I think that's our future. I'm back in Macau next month and meet with the team once again to review how we move forward in every one of our properties to get to that 45% business. As nice as the junket business is, what's really doing it and it's a great business for us, we all know the opportunity. If we do our job and we get 1,000 plus mass tables to perform the upper reach of the market at a 45-point margin, will make this number looks small. So we're very focused on it. We get it, we see it, we are very uniquely advantaged at this point. The Cotai opportunity is amazing for us, and that's our focus and that's where our energies will be.

I want to point out that we have more tables than one out of 6 -- 1/6 of the concessionaires. We have far more hotel rooms than one out of 6 concessionaires, and I'm sure we have all the other amenities like nice space far and away, hotel rooms far and away, restaurants far and away. So we got to the point, where as I said earlier, [indiscernible] knows it, we don't have to put in all this stuff because Venetian is doing it [indiscernible] .

Our next question comes from the line of John Oh with CLSA. Jon T. Oh - Credit Agricole Securities (USA) Inc., Research Division: I have 2 questions. I'll start off with Singapore. Sheldon, you mentioned earlier that the IMAs in Singapore are not allowed to extend any credit and hence, there’s not much a value to your business. Are you suggesting that you're not planning to work with them?

We already have 100 of those guys working for us. Jon T. Oh - Credit Agricole Securities (USA) Inc., Research Division: In Singapore?

If there is an advantage for us to work to any third party to bring in more business and that will improve our business, we'll work with them. But as I've said earlier, that the only thing they could do, the only things they could do is that exactly which our own 100 or so field salespeople can do. And as we understand it, they can't do any more than that. And if they cannot and if we're correct in interpreting the law, they can't do any more than that. There's no reason for us to work for them -- to have them work for us.

Jon, it's Rob Goldstein. To Sheldon's comment, we spent the last decade developing what we think is the premier team in the business on the customer side as it relates to the high-end, high net worth individual. We're proud of that team. Larry Chiu runs it. I think he's the best in business, and I think our team is extraordinary all throughout Asia. Andrew and Mark and the team and Jeremy over in Singapore have examined, and continue to look at all aspects of the junket situation over there. We'll see where it goes. Sheldon’s absolutely right, at this point, we don't see enough importance to jump into that. But we'll keep looking at it, and obviously we won't be disadvantaged if there's an opportunity there.

There's no advantage for a player to go through one of those junket reps with whom they cannot share the commission. They can get the entire commission, if they come directly to us, and we provide the credit. So I don't know, somebody's got to explain to me what the advantage is. I don't see it. Jon T. Oh - Credit Agricole Securities (USA) Inc., Research Division: Okay. And my follow-up question is could you share with us your progress that you've made in Japan and also in Vietnam? I know we've talked a lot about Spain, more about some of these more -- some of these markets in Asia. Where are we in the legislative process? If you could give us an update. And also where are you in terms of your negotiations in both these countries?

We are very heavily petitioning. Let's call it in U.S. terms, lobbying the government. They don't have lobbying firms over there in Asia. But we are asking the government and do what we can to contribute toward regulatory structure in terms of the drafters of the legislation. We're sticking our two cents in there. You probably have heard almost the same thing we have. I wouldn't want to get into anything you may not have heard because it will give a roadmap to our competitors. So we're doing what it will take to get there. I can't tell you what's going to happen tomorrow. I can't tell you what will happen this year. But the possibility -- there are elections in Korea this year. There are elections in Japan this year. Those are the 2 primary properties. We're still -- we are very heavily involved with Vietnam. We're looking at Taiwan. Although Taiwan has passed a law for NAVI. It's from the mainland of Taiwan to Kimen and Matsu, adjacent to the PRC. So they're talking. I don't know if they have talked to mainland yet. So we're out there. We have resources that we're applying and are petitioning or lobbying process. And it's very difficult to say when. It can happen this year. It can happen until next year. Maybe it will happen not until the year after. But we're right on top of it on every single move. We've talked into the legislator. We are helping to contribute to the drafting of the legislation. We're touring a lot of people, a lot of government people that come from any of these countries. They've all heard about Singapore. They've been on to Singapore. We carry on a regular practice. It's a revolving door, a government of people who are coming to see how Singapore works, and they typically want to follow that model. That's all we can say about that.

And our next question comes from the line of Steven Kent with Goldman Sachs.

Just a couple of questions, Sheldon, on Spain. Just to go back for a second. I still don't completely understand the idea of self-funding. And the reason I bring it up, Sheldon is that originally Macau and Singapore, in some ways, was going to be self-funding and project financed, and you're going to use the debt markets. And then as you remember, we all remember, the debt markets closed down, and you had to put up your own capital. So don't we run that same risk with Spain? So even though you're saying it's not truly a $35 billion investment, you still have to have a solid capital market and a solid debt market in order to be successful here. And then a second, just on Spain, the core Asian player was -- is such an important part of Macau and Singapore. Obviously, it's not going to be the same because it's in the middle of Europe. So I want to understand that part of the strategy too.

I didn't understand that.

And one final point. Sorry, Sheldon, one final point. With all of this capital, all of these opportunities ahead, what does that mean for dividends for '12 and '13, given from the cash flow that you need to have. Or should we expect to continue the dividend to increase at a solid pace?

We’re not going to put a shovel in the ground without having the financing. There is no more than taking equity and putting 100% equity. I attribute that to my former management who follow that practice. We will have financing before we put a shovel in the ground. And if the financing is not available, we're not putting the shovel in the ground. So if we have the financing, we'll finish the property. If we start it, we'll finish it. And if there is no financing available, if things in the market change, we will simply delay that. It didn't go on for many years. It was a relatively short-term phenomenon where money wasn't available. But I've seen, in the last 20 years, money being or not being available almost on a revolving basis, certainly no more than annually or 12- to 15-month hiatus. So we're not going to get into the -- listen, it's like the expression, fool me once, shame on you; fool me twice, shame on me. We've already gotten caught in that mess. Even though it wasn't my mess, but although it was, I was the CEO, it was our mess. And we're not going to make -- we learned from it, we're not going to make that same mistake again.

You got to have dividends as well.

What about dividends? Well, I got to tell you, I do own a few shares in the company. One can easily assume that I’m all in favor of dividends. But I've also said to the board, I recuse myself on voting on it. And if the board voted for more dividends, it's not because they think I want it, it's because they think it's appropriate. If they voted for less, which I don't think will happen, we'll -- it's without my vote. I recuse myself because I think I have a conflict here. Mike, do you want to answer that?

I just want to answer Steve's question on the core Asian player that he talked about. We talked a lot about this. Basically our forecast, what we've looked at is not counting on that core Asian player, as you recall, what Sheldon mentioned earlier in the day that we must forecast the 20% return, cash-on-cash return for our investment. And those forecasts, those one-offs that we've been doing, we have had limited situations involving core Asian players. However, we do have a distinct competitive advantage. We use a very significant air force, the big players around. You've seen major baccarat improvement here in Las Vegas. That's as a result of the air force that we have. There's nothing to say that we can't bring players to Spain as well. But in the initial forecasting of our revenue and our bottom line in Spain that we're working on now is subject to the government agreements we make, we have not counted on those Asian players, Steve. There are many Asian players in Europe, but perhaps not at the caliber, at the high-end that you see in Asia.

We've done about a dozen or more studies about the market in Europe, and we probably have most studies and more validation of our vision than any other project ever. After all, this will be one of the largest projects ever built. And I don't want to mention the number because I'll be reading it in every journalist's article or every analyst's report. But we've done an awful lot of study on this. We feel quite confident, and the bottom line is no 20% cash-on-cash return, no project.

And our next question comes from the line of Carlo Santarelli with Deutsche Bank.

I was just wondering if you could maybe help walk us through your table skew across Macau as Sands Cotai Central opens, and where we should expect to see the biggest hit. And then if someone could just quickly address maybe the Singapore VIP event calendar over the rest of this year, if there's anything notable you guys are doing in certain quarters that we should be aware of. That would be helpful.

I could hand that question.

It's Rob. On the first question -- on the second question, it's easy enough. The Chinese New Year has come and gone. That's in our event calendar in the first quarter. And obviously there's holidays, and there's F1 races, and there's all the events that takes place throughout Singapore. But as far as the specific calendar, we do for events there for our customers, but obviously Chinese New Year's is by far the most important event of the calendar. There is F1. There is our events internally. But I don't think there's any worth mentioning, it's going to be that earth shattering and that important to you.

Got it. And then my first question, I don't know if you heard me. It was more along the lines of how you will skew tables across Macau, i.e. as you ramp Sands Cotai Central over time, and where we should expect to see the table count impacts at your existing properties.

As I've said earlier, we're always trying to maximize the performance of the tables, and we will even move tables around within our property, within multiple properties. That doesn't answer the question?

No, that does, Sheldon. I didn't hear you before.

Our next question comes from the line of Felicia Hendrix with Barclays.

Rob, guys, I know you're not going to give any -- you don't want to talk about Sands Cotai Central, makes sense given that it's next quarter's data. But just wondering if you could tell us how many VIP rooms and tables are open at the property now? And then maybe give us a schedule for how they're opening across the year.

Yes, it's fully occupied in the month of May. We opened -- all those will commit to, Felicia. We have some issues with some of the physical issues in the rooms and the hotel, being it done in April. It's fully operational except for one junket on the 3rd week of May, the last junket rolls in there of the 12 we'll be there. We expect the full hit in month of May. And we feel very, very good the complement of offers is assembled there. Again, I think what that team has done is exemplary. And our advantage on the VIP side is that we have so much capacity now in Cotai that people want to be in our buildings. We feel very confident at the product and the VIP themselves, I didn't get a chance to see them, but they're very impressive. And we get the best and the brightest as our junket operators, and we're fully occupied in the month of May.

Great. And then are you on track to start revamping this VIP product at The Venetian this summer?

Yes, we are. We'll start renovation shortly, and I think you'll see a big change there, obviously we're overdue. And then we had to push back the -- with the customers and operators about it. It's been a problem for us. I think on the upside, I'm pleased with our performance, the VIP tables on The Venetian, but there's room to improve. I think the new tables or the new rooms we're building at Venetian are very, very nice to look at, very pleasant, coupled with, again, our presence in Cotai in general gives us advantage, good performance in The Venetian as well. Although, it's probably [indiscernible]

Okay. And then can I just take another stab at this question? I just think it's important to ask so that everybody is just on the same page, and we're not all guessing different numbers. If you could give us, either Rob or Ken, the EBITDA impact from the holds at Marina Bay Sands, Las Vegas and then I guess there was quite [ph] in Macau.

I think Ken should take that question.

I appreciate the question. I'm not really sure that I can really add much to what -- Sheldon's already talked about that from a 200-day moving average perspective, and I think that gives you really a good reference point to compare against.

I understand that, but the 200-day moving average is still lower than the actual hold in some cases.

It may or it may not be. Listen, the hold changes from day to day. Anybody who can predict day-to-day, hour-to-hour, minute-by-minute is a miracle person. We don't want to withhold any information from you. We'll work with everything and we're obliged to share, and we want to share with you. But if you're taking a one quarter and you're not taking [Technical Difficulty]

Okay, so I understand the logic behind that, but in other quarters, you've given us the color. So is this just that we're just looking at things differently now?

No, we're looking at it realistically. I'll tell you honestly, Felicia. I've been after my people for a couple of years that, on a monthly basis, I was -- the first 30 days of a 200-moving day average dropped off and the last 30 days added on. And I've been a proponent of the 200-day moving average for years. But unfortunately, not all the people at my company do exactly what I wanted to do. So this time, I make sure that I have it -- we're going to have it from now on. I finally got the figure today, and the figure for Macau and Singapore, which constitutes almost 90% of our total business, it's 3.05%. That's the number. And that's the 200-day moving average. So what can I do? If 2.85% is less than that, well that's more than 2.85%. You think you want to adjust it because it's too high than the average hold, you have to take into account the habits of the people that play. And the habits of the people that play in this industry can change the results of the law of averages. The law of averages is 2.85%. But I tell you, I fail to be amazed at the fact that the game of blackjack, where we have a 17% to 22% hold, say, give or take 20%, even in the States in Las Vegas, the maker of the gaming, it's 36% over in Asia. Why is it 36%? Dramatically, it's like 80%, whatever, whatever number higher than the law of averages calls for, is because the people don't play on the rules that people play here. They play on the basis of luck. And people's behavior is that's an excellent classical example of how that can change returns. So if you take the law of averages return in Las Vegas and apply it to what you want -- if you take the law of averages or the results should be in Asia, there's a risk that those numbers won't jump. I don't think it's a risk. I think it's a surety. So the 200-moving day average is going to give us a more authoritative and a more lengthy basis on which to make our own internal projections and to report whether we're above or below a milestone.

And our next question comes from the line of Robin Fraley with UBS.

I know you've commented on VIP business in Singapore. But I wondered if you could give us your thoughts on the mass business, where it was a little bit more flat sequentially. And just, is that seasonality or how you view the mass business and how you think that will grow sequentially from here. And I've got one or 2 other after that.

Sequentially, it was flat -- not sequentially, I mean -- year-on-year, the way we're reporting that numbers...

It's 22% year-on-year.

No, sequentially meaning from the December quarter to the March quarter.

Give me any business that grows 22% year-to-year, I'll be a happy investor.

No, that's great, but I'm asking about the sequential pattern and just how you expect sequential change, not the year-over-year.

Robin, we've talked about sequential the last 2 or 3 conference calls. And basically, you're dealing in a business that sequential comparisons are not relevant compared to year-over-year comparisons. Because as you see a product matures, if you look at Macau where it's getting more mature, you have to -- you could see where the annual comparisons year-over-year work. In Singapore, it's not mature enough to really understand the seasonality, which we've talked about before. And I think honestly, you get into a little trouble when you look at sequential. And if that happened looking at various rolled numbers, et cetera, and so forth. Someone said previously that the first quarter and the third quarter tend to look like our stronger quarters. Right now, that's what they do. But comparing it month over month is really not -- days change, holidays change, things affect those particular situations. And the mass market is particularly sensitive to seasonality, particularly sensitive to various months. So you know what...

And I think the Q1 comment before was really about VIP. I was trying to get some more color on mass. But if that's -- if you just want to say -- I understand what you're saying, you don't know the seasonality of the market, and that's fine...

It's different because VIP, you'll never be able to track sequentially because of the major...

Exactly. In other words, the comment before about Q1 was about VIP. And then the other thing I wanted to ask was on the table cap in Macau, and I know you made some comments, Sheldon, in your introductory remarks. But I wonder if you could tell us, do you expect the Macau to go above the 5,500 table cap before March of 2013?

Before what? March 15?

March of 2013.

I have no idea what the government's going to do then. Robin, all I know is the government is trying to be as accommodating and supportive of the concessionaires as they can, but whatever they do for one, I think they got to do for everybody. And listen, I'm not an analyst. I'm not free to speculate. I have to report the facts. And if somebody wants to speculate about the number of tables or speculate about labor, speculate about this and that, that's what it is. It's speculation. We are required under the pains and penalties of getting bawled at by my wife, I'm not telling exactly the way it is, not to mention the SEC. We have to be accurate. We cannot speculate.

Robin, it's Rob. Before we leave the Singapore question, I came up with things that -- we're 2 years into Singapore and forget sequential year-on-year. The fact is we have a duopoly with all those people in Indonesia and Malaysia. It seems to me an awfully good bet that the market across the board, be it lodging, be it retail, be it gaming, be it high-end gaming, has got to grow and it will keep growing. Because as you saw in Macau, in the early days back then, no one would have guessed, back in 3 and 4, it's happened to mass or VIP. I think any place in Asia you can get duopoly in a major city with an airport like that. It's an awfully good bet and we're sitting it down the road, whether it's next quarter or next year, astounded by the growth in Singapore. I just think you have to give more respect how good that market will be and can be.

The rooms and the price we can get, the ADR and the rooms, is clearly unequivocally subject to seasonality. We're going to have trade shows and conventions go in the spring and the fall, not in the summer. The FIT leisure rate in the summer is totally different. The retail with Christmas and other Golden Week spending periods in Asia is seasonal. The gaming is seasonal. We just happened to be in a seasonal business where I guess under the category of consumer discretionary. And unless somebody thinks we're in another category, and that is seasonal. Look, if 40% or more of all the retailers come in the United States between Thanksgiving, the 4 weeks between Thanksgiving and Christmas, I can't make any stronger case for seasonality than that.

Sure. I was looking for factors outside the seasonality that you might address. Then the other question, the last one is on Spain, and I wonder if you could just give us -- and this could be a wide range or just kind of ballpark on what kind of revenue assumption you have for the market there that gets you to the 20% return.

It's just all figures. We can't -- It's much too early to make that assumption, particularly to make it public. We've done most studies, at least about a dozen studies. And that we did feel confident that the amount of money that we need, the amount of business we need to get to the 20% cash-on-cash return, and we will continue with it. We just pull it back, and say we're sorry, everybody, we wish that it was done. But we don't believe that's in the cusp. We believe that all the studies that we've done validate our vision.

And there are no further questions in the queue. I will now turn the call over to senior management for any closing remarks.

Well, I don't have any closing remarks, except to say I'm looking at the chart that shows us 2 -- 1 out of 2 of 12,222 companies. I look at the constant growth, I look at the 14.2% quarter-on-quarter EBITDA growth. And frankly, I don't understand -- I don't want to encourage analysts to overreach and to overpromise because that happened once before, and we just barely made it, everybody's projections. So everybody makes their own projections. We're going to keep doing what we're doing. I can't -- it's very difficult for me to give a lot of credibility to people who think that there’s a plateau level and that is predictable in Asia. It's just the nature of their culture that they have a greater propensity for play and to shop and to do other things than other cultures. This is a cultural sensitivity issue, and we live with that. And I see no reason for our 14.2% quarterly EBITDA growth to go backwards and to reduce. So that's my closing remark. I want to thank everybody for phoning in, and we'll talk to you in 90 days. Thank you.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may now disconnect.