Daniel J. Briggs - Las Vegas Sands Corp. Sheldon G. Adelson - Las Vegas Sands Corp. Robert G. Goldstein - Las Vegas Sands Corp. Patrick Dumont - Las Vegas Sands Corp..

Thomas G. Allen - Morgan Stanley & Co. LLC Joseph R. Greff - JPMorgan Securities LLC Stephen Grambling - Goldman Sachs & Co. LLC Shaun C. Kelley - Bank of America Merrill Lynch Anil J. Daswani - Citigroup Global Markets Asia Ltd. Felicia Hendrix - Barclays Capital, Inc. Carlo Santarelli - Deutsche Bank Securities, Inc..

Good afternoon my name is Litvaya and I'll be your conference operator today. At this time I'd like to welcome everyone to the Las Vegas Sands First Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. I would now like to turn the conference over to Mr. Daniel Briggs, you may begin..

Thank you. Joining me on the call today are Sheldon Adelson, our Chairman and Chief Executive Officer; Rob Goldstein, our President and Chief Operating Officer; and Patrick Dumont, Executive Vice President and Chief Financial Officer. Before I turn the call over to Mr.

Adelson, please let me remind you that today's conference call will contain forward-looking statements that we are making under the Safe Harbor provision of federal securities laws. The company's actual results could differ materially from the anticipated results in those forward-looking statements. In addition, we may discuss non-GAAP measures.

A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures is included in the press release. We also want to share that we have posted supplementary earnings slides on our Investor Relations website for your use. We may refer to those slides during the Q&A portion of the call.

Also, Las Vegas Sands adopted the Financial Accounting Standards Boards Accounting Standard Codification 606 Revenue from Contracts with Customers on January 1, 2018. As such all of our earnings materials reflect the adoption of ASC 606.

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

Finally for those who would like to participate in the Q&A session, we ask that you limit yourself to one question and one follow-up so we might allow everyone with interest to participate. Please note that this presentation is being recorded. With that, let me please introduce our Chairman, Sheldon Adelson..

Thank you, Dan. Good afternoon, everyone and thank you for joining us today. This was a record breaking quarter and I am very pleased that we delivered such exceptional results in each and every one of our markets. Company-wide adjusted EBITDA reached an all-time record of $1.5 billion, an increase of 31% over the prior year.

Our Macao operations generated adjusted EBITDA of a whopping $789 million, an increase of 26% over the prior year. We broke a number of quarterly records, the highest ever mass table gaming drop in revenue, the highest ever retail mall sales and the highest EBITDA margin since the third quarter of 2006.

At the same time we achieved an all-time quarterly record in adjusted property EBITDA in both Singapore and Las Vegas. As I said last quarter, the G in my middle name stands for Gary but it also stands for growth and that is fully on display at present in each of our markets.

The acceleration of Macao's mass market growth in the fourth quarter last year has continued into the first quarter. Non-Rolling drop grew by 21% over the prior year and Non-Rolling wins grew by 22% over the prior year. This strong mass revenue growth combined with cost efficiencies drove significant margin expansion.

Our hold-normalized EBITDA margin grew a record 36.4% for the quarter representing a substantial increase of 350 basis points compared with the prior year. The structural drivers that enabled us to grow across all segments in Macao were on full display during the quarter.

The scale and range of our hotel suite inventory, the diversity of our non-gaming offerings, especially in retail and entertainment and the unique benefit of interconnectivity between our Cotai properties. These advantages allow us to attract more overnight visitors than any other operator, as well as increase their length of stay.

We achieved total hotel occupancy of 94% in the first quarter maintaining the record occupancy that we enjoyed in the fourth quarter of 2017. As a result, we grew by an exceptional 35% in premium mass when compared to the prior year .And our retail mall sales grew by 33% over the prior year with each of our four malls delivering strong growth.

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

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

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

The Venetian introduced large scale non-gaming amenities in Macao, retail malls, MICE, live entertainment and arenas, which came to be known as Macao's first Integrated Resort. These attractions are now very well established in Macao and will only grow in importance and contribution to Macao's diversification in the future.

Our market leading property portfolio received 23.8 million visitors in the quarter, while Macao's total visitation was 8.5 million. It means we've got almost three visitations from each visitor. The strong appeal and power, the critical mass of hotel, dining, retail and entertainment and our property portfolio at the Cotai Strip is evident.

This demonstrates the appeal of our properties as they receive multiple visits from tourists each trip. While much has been accomplished to-date in the transformation of Macao into Asia's premier business and leisure tourism destination, we will not rest on our laurels.

We will continue to invest substantial capital into our portfolio across every segment of our businesses. In particular I am very excited by the way the design work for The Londoner is progressing. The Londoner will have a tremendous potential as a third landmark must see destination, complementing The Venetian and The Parisian.

Our commitment to further reinvest in Macao is not limited to The Londoner. Many other significant capital projects are taking shape as we speak.

The suite additions at Parisian, the renovation of our VIP gaming areas, a plethora of new and exciting F&B outlets and the full scale development of the two luxury hotel towers immediately adjacent to The Four Seasons and St. Regis properties, all of which will greatly bolster our growth prospects in the year ahead.

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

Now I'm going to move on to Marina Bay Sands in Singapore. As mentioned earlier, we delivered an all-time record quarter at Marina Bay Sands with EBITDA of $551 million (sic) [$541 million] (9:18), an increase of 48% over the prior year. The quarter was marked by strong VIP and slot revenue growth.

Normalized EBITDA margin increased by 490 basis points versus the prior year, reaching 58.7% for the first quarter, supported by solid cost control and successful collection of receivables. Our retail mall also continues to outperform the broader Singapore retail market with strong tenant sales growth of 14% over the prior year.

We're proud that Marina Bay Sands stands as the ideal reference site for countries that are considering iconic, large-scale Integrated Resort developments. Turning to Las Vegas. We achieved an all-time record adjusted EBITDA of $141 million, an increase of 16% over the prior year.

We achieved record hotel room revenues, underpinned by group room revenues and stronger backlog rates (10:35). So that's the summary of the quarter. Did I mention that growth was fully on display? Now let's move to another of my favorite subjects, the result of capital to shareholders. Yay dividends and yay buybacks.

Our recurring dividend remains the cornerstone of our program to return excess capital to shareholders. Last October, the Las Vegas Sands board of directors approved an increase in our recurring dividend for the 2018 calendar year to $3 per share for the year, or $0.75 per quarter.

We have increased our recurring dividend to our shareholders every year since we first established it in 2012. We remain deeply committed to our recurring dividend programs at both Las Vegas Sands and Sands China. And we look forward to increasing those recurring dividends in the future as our cash flows grow.

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

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

In conclusion, our cash flow generation continues to be strong and predictable. The structural advantage from our scale, critical mass and product diversity was on full display in our strong financial results.

The robust growth in the mass market in Macao continued during the quarter and the secular growth in Chinese travel and wealth creation together with enhanced transportation infrastructure bode well for future growth. We will continue to make significant investments in Macao because we have a long term and unwavering commitment to Macao.

We look to the future with confidence. We have a strong organic growth outlook. We are strategically reinvesting in our existing assets while also pursuing new development opportunities. And we have both the intent and the financial strength to continue to return excess capital to shareholders. Yea dividends, again.

Thank you for joining us on the call today, now we will take questions..

Thank you. The first question is from Thomas Allen of Morgan Stanley. Your line is open..

Hey, good afternoon, and congrats on the good results. So focusing on Macao I noticed that for your three larger properties there, RevPar in the quarter was up anywhere from 27% to 29%.

Can you just kind of talk about the trends there, is that cash RevPar, is that stronger premium mass and then in the slides you talk about your strengthening VIP business, can you just touch on that a little bit more too? Thank you..

Sure. Thanks, Thomas. Just talk about our Macao business in general, and I'll answer your questions as well. The hotels are running about 94% occupancy and that's in a market that introduced 10,000 new sleeping rooms last three years.

Just for commentary, our food and beverage sales exceeded $300 million annually, our 850 retail stores saw a 33% increase in sales and will soon grow about $0.5 billion a year contribution and our arena, which isn't spoke about much is, we carefully book with top stars from all over the world, this week Bruno Mars sells out numerous shows.

Macao has become a full blown destination, has worked for China far beyond Guangdong and far beyond Hong Kong. The penetration into China is growing and growing and finding younger and more affluent customers who find Macao a compelling destination.

As you know, the bridge opens up sometime this year and soon the entire Pacific Rim will be able to fly into Hong Kong and take a car to Macau, which makes it pretty extraordinary. As to your question, it's driven by both more gaming demand, higher demand from the gaming side but also higher cash demand.

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

And the gaming portion of our business just keeps growing and is well balanced in all segments, whether it's Rolling or Non-Rolling, tables or slots, there's strong double-digit demand, which we believe is sustainable, and this is not 2013 or 2014 which is more rolling dependent. This is a mass of nongaming and gaming market.

We're at the epicenter of this. If you look at page 11 in your deck, I think you'll see our strong mass table story. From both a base mass and premium mass perspective, it illustrates our growth and the power of this segment.

So page 11 is worth a look as is page 15 which illustrates the growth of Macao's overall high-margin mass gaming segment, and that's the place we reside. And as Sheldon referenced, we'll keep aggressively investing in Macao. The Londoner is engaged and work begins later this year.

We expect this property resemble The Venetian in terms of mass and premium feel from both a gaming, retail, and lodging perspective. Our Four Seasons St. Regis suite product will open in 2019 offering 600 additional suites. And one more point about our gaming business. Our junket capacity today is about 50% of where we want to be.

By 2019 we could offer as many as 21 junket rooms as opposed to our current 11. And these rooms we fully renovate it with input from our partners with smoking rooms easy access. So we're fully committed to Macao. That's the market to be in. We're on a run rate of 3-plus billion dollars a year and growing, and I think the demand for rooms is insatiable.

Hard to imagine, running 94-plus percent in a market that's grown so much capacity. It speaks so well to the penetration into China, it speaks well to the surging demand both from the gaming and nongaming perspective..

Thanks, Rob. This is my follow-up. Can we just touch on Singapore? You've had four quarters in a row now of high hold and you've shifted your theoretical hold in Macao. Would you think about doing that in Singapore? And then any update on your thinking around the mall sale? Thank you..

Look at page 40 in your deck, Thomas. That might be helpful to understand the change I'll refer (00:17:50) to the non-rolling chip drop at Marina Bay Sands. We have adjusted and we have changed the methodology, and perhaps that's illustrative of what we're trying to do there. It just keeps our business instinct across the globe..

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

Yeah. On roll for Singapore and then another question was just on the mall sale potential. Thanks..

We're constantly looking at our table mix at our play historically and looking at the math behind achieving the correct theoretical volumes. So in doing that that was the review that we went into, and we actually revised the hold normalization range in Macao based on the volume of play and the historical averages.

When we think about Marina Bay Sands, we're constantly evaluating it. So if you look at our hold percentage over time, you'll see that we typically are holding outside of that range. So it is something that we constantly look at, and when there is math to support that change, we'll definitely review it..

Thanks. And, yeah, on the mall sale..

I think our answer to that is the same one that we had in prior quarter. I think it's the best retail asset in the world today. If you look at the growth that we've experienced just in the last quarter alone, you can see that sales per square foot for Marina Bay Sands on the trailing 12 months for the first quarter were above $1,700 a square foot.

There are not many malls of that size globally that have that type of productivity. So from our standpoint, it's an unbelievable asset and one that has trophy status at the highest level. So from our standpoint, it should be very attractive to any potential investor.

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

Great. Thank you..

Thank you. The next question is from Joe Greff of JPMorgan. Your line is open. Hi, Joe, please check to see if your line is on mute..

Good afternoon, everybody..

Hey, Joe..

Hey, Joe..

Obviously what stood out to us was the approximate 35% growth in premium mass in Macao. I guess, just trying to get a better understanding of the operating leverage there, I know you're still targeting segment profit margin in the 25% to 40% range. I'm presuming given that type of growth, you're at the high end of that range.

I mean can you give us a sense of where you were in the 1Q? And again, to further better understand the operating leverage there, how do you think about that segment OpEx growth relative to the top line growth?.

I missed the last part of your questions.

Can you repeat the second portion – Joe, I'm sorry – about the leverage?.

Yeah. Just to get a better sense of the operating leverage when you guys are experiencing this type of segment growth, I guess where were you in terms of segment margin for the 1Q? I'm presuming just where you ended up for the quarter, you're at the higher end of that 25% to 40%.

And then maybe to complement that answer, where has that segment OpEx or where was the OpEx growth in the 1Q and then I have a follow-up on Singapore..

Okay. Obviously, the demand in that segment is growing and so is the leverage. It's not changed a whole lot in the last few quarters and pretty much consistent. But to your point, as the surging demand at the premium mass level is going to make more money (00:21:14) changing all that much against this.

So leverage is growing, but more importantly demand is growing. And again what we are seeing is a lifestyle thing. We're getting people from further and further. You see the growth in non-Guangdong I think it's slide 13, which talks about the growth outside of Guangdong province.

I believe that's – yeah, the growth of non-Guangdong has been hugely beneficial to us in filling our 13,000 rooms. And part of the reason why we're rethinking St. Regis Londoner, Four Seasons is because that's where the sweet spot is in that demand. That customer is valuable. More of them, they're coming further away.

We believe that even increases further with the bridge later this year. So I don't know if it's going to grow a whole lot more as leverage, but there's a whole lot more demand and more top line and more value to those rooms than ever. And again it's the retail component, it's the better sleeping rooms, it's the arena.

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

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

Sure. Hey, Joe. So, a couple of comments. I think a couple quarters ago, we reviewed some of our cost-cutting measures and call it cost offsetting measures in order to try to mitigate expanding cost as the business grew. And I think you can see some of the benefits of that. I have to hand it to the team there, did a great job.

If you look at our margins, you can see the deck on page 10. Our hold normalized adjusted property EBITDA margin was 29.1%, which – excuse me, our EBITDA grew 29.1%. Our margin itself was 36.4%, excuse me.

That's an incredibly strong flow through percentage, and we feel very confident that as revenues continue to grow, as the mass market is deeper and more developed in our property portfolio, we'll have the ability to continue that margin, potentially expand a little bit further.

I'd like to point out that we did a nice job with our controllable expenses and managing those. There are obviously variable expenses related to gaming taxes and other things, but those are out of our control as play grows.

But from a controllable expenses standpoint, we've worked very hard to ensure that those only grow at the minimum levels in order to support our customer base. And I think you can see that today in our margin and the expansion that we showed just across the year even on a normalized basis. So I think we're pretty happy with our margins.

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

Joe, I think you know this from years looking at Macao. The story we told years ago is actually occurring rapidly. The deep penetration into Mainland China, the deep growth of this market in terms of premium mass, it makes the margin appreciation easier to get to. So I think it's going to keep getting better and better.

As we see more top line, we'll deliver stronger and stronger margins, and it's a very encouraging story from our perspective..

Great. That's helpful. And then for Marina Bay Sands, you have on page 25 of the slide deck on a hold adjusted basis EBITDA grew 11% year-over-year.

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

I think it came down to $420 million. The hold-normalized, I think we showed $420 million for the quarter. And as you can tell by the numbers, there is de-acceleration in the Rolling segment. It's disappointing that segment has slowed down quite a bit. We held very well. The other aspects of our business look strong.

Patrick referenced the sales per square foot in the mall, the ADR, the lodging business holding up nicely, and our slots and ETGs, the Non-Rolling business decent at $4.7 million. But there's a slowdown at the top line in terms of the (00:25:01). That's a pretty soft quarter.

We just played very lucky against that business and are hoping to see a return to a better day, but right now that's the soft spot in Singapore. The rest of the business looks pretty decent..

Thank you..

Okay..

Thank you. And the next question will come from Stephen Grambling of Goldman Sachs. Your line is open..

Hey, good afternoon. Thanks for taking the questions.

I guess as a follow up to your response to Joe's question just now on customers coming from outside Guangdong, how does the spend from that customer base compare to those coming from the existing regions? And as you think about the typical new customer spend trajectory, do you typically see a ramp in spend from those visiting for the first time?.

Well, it's higher for a couple reasons. One is they come from further away and I think they are very lifestyle driven. What our teams describe to us is this acceleration of younger people who are very affluent, bring their families, want to stay as much as four nights.

They want to see Bruno Mars or whoever the star is that weekend, they want to shop at the stores, they want to go to the spa and they bring families, and they like to gamble. It's quite a great combination. So they are not necessarily – they stay longer as they gamble more and they have more time to spend in our shops.

It's a positive thing, but more positive is as you can see by that chart on page 13, the acceleration of demand outside of Guangdong is incredible. And I think when you start seeing the Pacific Rim property at the (00:26:33) airport and the transportation via bridges there, hopefully that process or that approach keeps getting better for us.

We have 13,000, soon 13,600 sleeping rooms, pretty powerful products we have coupled with our 850 shops and our spas and our entertainment. So the answer is they spend more time, they spend more money, they're younger and there is more of them coming every day, and so very positive trend for Macao.

I think our properties are built for this customer, and this customer is showing up in mass, and so we believe this quarter is – really I think this quarter redefines where Macao is going in our mind. It's becoming a very, very impressive place, a retail destination, a spa destination, an eating, lodging, lifestyle destination.

We're very encouraged by the things we're seeing, our trends. Our team is very excited about what's happening to our business in Macao..

I guess one quick follow-up on that.

I guess what kind of data are you able to collect on that customer now that you can potentially utilize in the future? Is it equivalent to the existing kind of database of customers?.

Well, yeah, of course, we collect data the same way we've always collected data. We have extensive database, we have extensive information of customers because that's the nature of this business, isn't it. So, of course, we have extensive data on our customer, yes..

Thanks. I'll jump back in the queue..

Not going to share that extensive data (00:28:01). Thank you very much..

Thank you. The next question is from Shaun Kelley of Bank of America. Your line is open..

Thank you very much. So my main question would just be to maybe follow up on Patrick's comments on operating expenses, but by our account, Macao looks like operating expenses were super well-controlled in the market for the quarter.

The question is how sustainable is that as we move through the year and sort of what kind of level of trajectory of inflation should we sort of be considering or thinking about in those types of expenses?.

Before Patrick, I'll just say I think it's going to – Shaun, obviously margins are driven by two different variables, but the top line is growing and the quality of customer is growing, and that makes margins easier to achieve. And I think our team has demonstrated an ability to deliver top line coupled with margin and great flow-through.

I think it gets better. I don't think it's a question – just I hope it gets better, not de-accelerate.

I think we have with our offerings and with our team's approach to this premium mass customer, if we get our junket business where I hope we can get it to, which couples up nicely with premium mass, I would think we'd see more top line business which would create more flow-through. So I don't think we have much risk of it de-accelerating. Patrick..

I think the current environment should allow for what Rob just described. I think the team there has done a great job. I think the market itself is very favorable on the revenue side and we hope to see continued and further margin expansion in the upcoming quarters.

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

Great. And just as my follow-up, Dan. I mean, Rob, you alluded to what's going on on the VIP side and that that's a target area for you guys. I think if I've got the slide decks correct then last quarter you saw roughly 4% growth in VIP. This quarter that jumped up to 20%, 21%.

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

Yeah. Look, we're not happy with our VIP segment. We can do better. We want to do better. People think because we're so dominant in the slot business, ETG, not only table that we should see that segment growth. We're not going to do that at all. Just the opposite.

We have spent a lot of capital, a lot of time with our partners to create we think are the best environments, most accessible, egress access, smoking friendly.

In terms of 2019 January, our goal is to accelerate our VIP play because we think it's important both as a segment unto itself, but as you know, it offers crossover opportunities into premium mass.

So we're very happy that we are investing large amounts of dollars and time in an approach that we think will grow our junket business and other segments as well. We're not finished. We want to be a much bigger player in that segment, and we've got some wonderful partners that we're listening to very carefully to grow that segment..

Thank you very much..

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

Thanks a lot..

Sure..

Thank you. The next question is from Anil Daswani of Citi. Your line is open..

Okay, good morning, guys. Thanks for taking my question.

First of all, with all the new infrastructure that's coming online in Macao with the bridge as well as the new high-speed link to Lotus hopefully, do you guys see that as a driver more for the base mass business rather than the premium mass business? And do you believe that we could see a shift in the focus of the market to this base mass business that you guys are incredibly strong in?.

Yeah, we do. Very simply put, all new products in the market, be it the rail, be it the bridge, anything and everything that drives more base and more business in that market, we're hugely in support of and excited about. I think we've waited a long time. I think I was 28 when they started that bridge and I'm now almost 41. So it's been a long time.

But we're damn excited about the bridge. It offers a whole new entrée into different segments. The real story in Macao, yes, it's Hong Kong, it's Guangdong. But the real growth potential resides outside of Guangdong. And you see it in that one slide. We've done that for years.

It's really actually happening where the growth in those markets are extraordinary. I also believe the Rim can open up too. The Macao in the 40 years I've been going there, it's become a wonderful destination. The government has done extraordinary job, and we've invested billions of dollars to make it a place that is extraordinary.

What's happening in Cotai is nothing short of an exemplary development of a property that has opened up wonderful IRRs to a bunch of people. So as the infrastructure completes the picture for both local and for foreign tourism, we're going to be at the epicenter and believe as that can drive more business, both base and premium mass.

So, of course, we're both supportive and enthused about what's happening there. It can only be good for us. We're the biggest player in the market in terms of hotel rooms, lodging, retail, gaming capacity. We intend to be aggressive in trying to create more capacity there. So, sure it's a positive for us, of course..

Perfect. And as my follow-up, clearly Japan's hotting up again. Seems like everyone is expecting a bill to get tabled at some point at the end of this week even potentially. If you guys have the choice and you could pick between Yokohama or Osaka, which are the two favorite cities at this point of time for big urban centers.

Can you suggest which one you'd prefer?.

(00:33:44)..

We're still assessing that..

We want them all..

That's the better answer. We're still assessing that. They're both very good. In Yokohama, we've got like a bedroom community to Tokyo. Tokyo has got about 32 million people in Tokyo Metropolitan area, of which Yokohama is part, but Osaka is about 12 million to 14 million people..

With 20 million if you go the outer line, the entire....

We're still assessing that. The Yokohama location is right downtown and the Osaka location is the farthest island. Next stop is the other side of Tokyo Bay and after that next stop is Hawaii (00:34:57). And the location is much further away from downtown, so it's very difficult to say. First of all, we don't think that anything is going to happen.

Appoint the operators, according to everything I read in all the clippings that we are number one in line. We've got the best chance of getting the first choice. So we've been lobbying for that location for better part of 10 years for Japan. And now it looks like it's coming to fruition.

Maybe it'll by this Friday that they'll submit the IR bill, but then again, you hear other people say that it's postponed for a week or two. But something that I heard from somebody in Korea was a little more encouraging than what we've been hearing in the last year or two.

They are thinking about making another location outside of Seoul, a Korean national's visitation casino in an Integrated Resort. We think we're also number one in that line. And Korea could be real. We're also looking at Brazil. I'm going down there in a couple or few weeks. Again, we've had people from there come up here.

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

So we're very enthused about Japan..

Thank you, guys..

Very enthused..

Yeah..

Yeah. Thank you..

Thank you, guys..

Thank you. The next question is from Felicia Hendrix of Barclays. Your line is open..

Hi, good afternoon..

Hi..

Hi, if we could just go back to Macao for a second. Obviously your results were outstanding. I'm just wondering if we could drill back on page 11 of your deck in the premium mass slide or part of the slide where it shows that the premium mass table win in the quarter was basically sequentially flat.

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

I think it's more about a hold percentage. As we're dropping the kind of volume we're doing, Felicia, these numbers are so extraordinary. I hate to – I've said this a few times. And the truth is a point here, a point there makes a big difference.

So if you pick up a point Q-on-Q, we actually lost a point, a hold percentage; on the kind of volumes we're doing it's pretty extraordinary. So I can't do much about that. We play a point lucky. If we start talking $20 billion, $25 billion of a drop in a year, a point means a lot. It's like real money.

And the story is we actually had a nice – we had that nice sequential growth in the quarter but we didn't hold as well, we dropped a point in hold, that's the whole story. I think our mass table business and our premium mass table business just continue to outperform even our expectations here in Las Vegas.

So it's simply a hold percentage, we're up single-digit, about 6%, 7% I think Q-on-Q and up I think 21% year-on-year. So, factoring a point here in hold percentage, we held 22.7% versus 21.8% and therein lies the drop off..

Okay. That's perfect, that's what I was looking for. Okay, and then just if we can switch gears to Las Vegas for a moment, just your properties in Las Vegas they generated some – it was moderate but some RevPAR growth in the quarter. But we were actually expecting you to be down given the tough comps.

Wynn also reported growth yesterday as well within RevPAR.

So just wondering, can you just talk about what you're seeing in Las Vegas? I mean there was a tough comp in the quarter, the market is still recovering, but it seems like it could be better than we expect?.

Well, I think so. We did have a record quarter. $140 million EBITDA. I've been here since we opened, that's the best quarter in our history. So we're doing something very right.

And the nice thing is it's not about hold percentage or luck, we held within the expected range, we had a strong MICE business, strong ADR coming out of FIT, incredible banquet demand, it was $70-plus million in the quarter of food and beverage. Gaming business was really strong.

Great Chinese New Year's, great international play, we held normal, nothing exceptional. So, if you can make $140 million in Las Vegas in a quarter without doing something lucky, that's pretty exceptional results. We're very proud of the team, margins look good, future looks bright.

And our outsized results will depend on not – historically we've always been a very good performer in the lodging segment and the food and beverage. Our variable I think there is contingent upon getting more international play in the door. We did it this quarter.

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

Would you attribute most of the growth to the international play and perhaps the domestic is more flattish? How would you look at the complexion of that?.

Yeah, that's fair to characterize. Our slot business was stellar. It remains strong and we're very happy with the margins and the topline. Our mass play, we have more work to do to get it to increase but that's the Las Vegas story across the board. It's not like Macao where you expect 20% and 30% growth. It's tougher here in Las Vegas.

But international play, we need to get our – to show these kind of quarters successfully and sustainably, we need to get more international play and keep it. There was a time in our history, it was pretty commonplace. We fell off a bit and I think we're back to a better place.

To deliver $150 million, $140 million, $130 million quarters, we're going to need a continued contribution of a drop from the table game side. But again, it was an exceptional hold, we're in the range with strong Asian play, strong Chinese New Year's coupled with amazing lodging results and strong F&B..

Great. Thank you..

Yep. Thank you..

Thank you. The next question will come from Carlo Santarelli of Deutsche Bank. Your line is open..

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

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

Carlo, I don't want to talk, break out our numbers. We have a strong business premium direct and as I referenced earlier, I want to get better at the junket side, we're very happy with our premium direct business.

We want to grow our junket business as I referenced and Sheldon referenced, we're dedicating capital and more importantly we're dedicating manpower and brainpower to figure out how to do better in that segment. We should do better. And we want to drive more VIP, let's be very clear about that.

So, we're spending a lot of money on rooms at the direction of our partners, making sure access egress is good, making sure smoking friendly in gaming for 2019 (42:50). I won't break out the numbers but I will tell you we're growing in the junket segment, we're double-digit growth year-on-year and sequentially growing. But I want to see more.

I think we need more because that segment is growing again and we should be bigger participants. And as I referenced earlier, there's a spillover effect in the premium mass. There's a value there. So, we are very laser focused on getting better with that segment. We're very happy with the other segments.

We want to be better in our junket partner segment..

And Rob if I may just ask a quick follow-up, you mentioned obviously that spillover effect, what does that stem from? Is there almost a crowding out of liquidity on the VIP side and as you mentioned earlier kind of constantly adjusting levels for hotel room comps.

But does the same type of phenomenon happen within VIP or at least are you guys seeing that where you're starting to see some of your previously lower rung VIP players kind of be more or less pushed into the premium mass segment, which is obviously a good problem to have for you guys, but is that happening as you think about liquidity in the junket market today and junkets being a little bit more discerning about which customers they're taking in?.

I think you're absolutely right. They're more discerning. Their coffers are full of liquidity and so why not be balanced and why not enable our – people want to be a junket customer, go to the junket side; you want to be a premium direct, go that side.

What we're seeing though, again our hotel rooms are getting more and more demand from further and further away. Those people tend to be less junket sensitive and more into the premium direct side, whereas Guangdong tends to be more junket preference. But it's not my job to tell people where to gamble, what to do.

I just want to make sure they have access to capital and that we have access to sleeping rooms and junket rooms they want to play in. So, again, we're a equal opportunity gaming house. We want to give all kinds of opportunity to our customers to go to the place they want to gamble.

We're happy wherever they gamble but you know and I know, liquidity is there, growth is there, and they're darn good partners to have. So, we're very happy to work with them..

Great. Thank you very much..

Thank you..

Thank you. Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may all disconnect. Everyone, have a great day..