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Las Vegas Sands, (NYSE:LVS)

Q2 2006 Earnings Conference Call

August 2, 2006, 4:30 p.m. EST

Executives:

William Weidner, President and Chief Operating Officer

Sheldon G. Adelson, Chairman

Brad Stone, Executive Vice President

Scott Henry, Senior Vice President

Rob Goldstein, President of the Venetian Las Vegas

Bob Rozek, Chief Financial Officer

Analysts:

Felicia Hendricks, Lehman Brothers

Lawrence Klatzkin, Jefferies & Company

Robin Farley, UBS

Steven Kent, Goldman Sachs

Celeste Brown, Morgan Stanley

Dennis Forst, Keybanc Capital Markets

David Anders, Merrill Lynch

Jeremy Cogan, Banc of America Securities

Harry Curtis, JP Morgan

Operator

Good day, ladies and gentlemen, and welcome to the Second Quarter 2006 Las Vegas Sands Corporation Earnings Conference Call. My name is Shanik and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of this conference. If at any time during the call you require assistance please press * followed by 0 and an operator will be happy to assist you. I would now like to turn the presentation over to your host for today’s call Mr. Bill Weidner. Please proceed.

William Weidner, President and Chief Operating Officer

Thank you and good afternoon everyone, and thank you all for joining us today. We appreciate your attendance. We have a lot to talk about, and again we appreciate you joining us today. With me today are Mr. Sheldon Adelson, our Chairman; Brad Stone, Executive Vice President; Rob Goldstein, Vice President of the Venetian here in Las Vegas; Scott Henry, our Senior Vice President; and Bob Rozek, our Chief Financial Officer.

Before we begin I need to remind you that today’s conference call contains forward-looking statements that we are making under the Safe Harbor provisions of the federal securities laws. I would also like to caution you that 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 the discussion of the risks that may affect our results. In addition, we may discuss adjusted EBITDA, adjusted net income, adjusted EPS, and adjusted property EBITDAR, which are non-GAAP measures. A definition and a reconciliation of these measures to the most comparable GAAP financial measure is included in the press release and please note that this presentation is being recorded.

By now you should have received our press release detailing our financial results. Before we address those results in greater detail I wanted to spend a few moments on two developments in the quarter that will be very important to the Company in the years ahead. The first development I wanted to highlight is the situation we see playing out in the market place in Macao. Those of you who have followed the Company for sometime may remember that as we opened the Sands Macao in 2004 the conventional wisdom of the day about the Macao market place was that a foreign operator could not be successful there. The incumbent Stanley Ho was too strong, he owned the ferries, had dominated the VIP market which we really couldn’t compete in. And with a clean well-lit casino with friendly customer oriented staff it was bound to fail. After all Macao customers prefer low ceiling smoky casinos and the product we envisioned would overshoot the market and intimidate the customer.

I would like to point out that during the quarter we completed our second anniversary of the opening of the Sands, which over the life of the property has made over $700 million of EBITDA including a record $117 million this quarter. You can’t blame the observers of the market of 2004 as they had never seen a product like the Sands, but I think it’s fair to say that those widely held opinions, the conventional wisdom of that day have now been laid to rest.

Let’s now turn the clock forward to today’s Macao and take a look at that conventional wisdom of today. The success of the Sands has clearly changed many widely held perceptions of the market place; n particular, the value and the explosive growth of the mass market. Market capacity particularly pertaining to mass play is now increasing at double digit rates and is expected to do so for some time. Now while it’s clear that those capacity increases will drive win per unit per table down for the market in total, we have long held the view that all capacity is not created equal. We based our development plan in the view that the highest quality products in the market place will not only win market share from an inferior product but will also serve to expand the market to a new set of customers, a set of customer who either do not visit Macao at all today or only visit infrequently.

The trends in our business today clearly support that view. While table capacity of the Macao market place has increased 59% over last year and the win per table per day has dropped 28% for the Macao market in total, our win per table per day at the Sands has actually increased over last year despite the expansion of our table capacity at the Sands by almost 30%. While slot capacity in the Macao market has increased 67% with market by win per unit per day decreasing by about 8%, our slot win per unit per day at the Sands has increased 32% during that same timeframe despite a 9% increase in Sands’ slot capacity.

Conventional wisdom today also applies that Macao is a locals market, more like Atlantic City than Las Vegas. Today’s Macao observers have never seen a destination product in Macao because there isn’t one, just as they have never seen a high quality gaming product aimed at the mass market where we opened the Sands in 2004. The fact is Macao is both a locals market like Atlantic City and a destination market like Las Vegas, only on steroids, three times the number of locals, six times the number of potential visitors within a five-hour flight time.

So, one can’t blame the current Macao observers conventional wisdom today since they’ve never seen a Las Vegas styled destination product before, keep in mind that in 2004 we introduced a never seen before mass market product to the Macao market. In 2007, we’ll introduce a mega destination product at Macao market; what they didn’t see in 2004, they don’t appear to see it again today, even though right next door in Hong Kong mainlanders are staying overnight, shopping, dining, and attending trade shows and conventions by the millions.

We remain unwavering in our fundamental strategy -- build the heart of the Las Vegas strip with multi-branded destination resorts connected by air-conditioned walkover bridges mirroring the world’s most successful destination, Las Vegas, on the doorstep of China. So, Macao overall we’re feeling pretty good about both our original strategy to target the market with a new kind of product and our ability to take more than our fair share of both markets that exist today and the incremental growth in the market in the years ahead.

Our momentum today bodes well for our near term future as we prepare to increase the capacity at the Sands by 30% next month and looking further ahead to about a year from today as we prepare to open the Venetian Macao, Macao’s first true Las Vegas styled mega casino integrated resort. In longer term, the Cotai Strip will take its place as Asia’s premier convention, vacation, and leisure destination. So, that’s Macao.

The other big picture development I wanted to touch upon was our victory in Singapore. We view the opportunity in Singapore as incredibly compelling for at least three important reasons: first the projected economic growth in South Asia is predicted to be robust in the coming decade as is in the case with an emerging China with GDP growth rate of 11% so far this year, driving and expanding North Asia economy; that growing Chinese economic engine along with that of India will bode well for the economies of South Asia. These emerging economies have already driven Singapore’s 33,000 hotel room inventory to an 86% occupancy this year with average daily room rates increasing about 16%.

Second, as we move deeper into what some economists have turned the Asian century, we will look to use our huge footprint in Macao in North Asia in concert with our complementary footprint in Singapore and South Asia to build unrivaled relationship with international meeting organizers, junket and high roller sales agents, tour group organizers from China, India, Japan, Korea, Malaysia and the remainder of the region, and with international retail brands. We will then use these relationships to bring real value to the jurisdictions in which we operate.

And third, the validation and strengthening of our status as the world’s number one convention-based integrated resort developer will give us a real advantage as we seek to expand our integrated convention-based resort business model in other jurisdictions in the world. So, the Singapore takeaway we believe is that success breeds success, and we feel we are uniquely positioned to capitalize on that success in the years ahead.

Turning now to our operating highlights for the quarter, second quarter adjusted EBITDA for the Sands Macao came in at an all time record of $116.9 million, that’s an increase over 24% versus the second quarter of ’05. Second quarter net revenues for the company in total came in at $517 million; that’s an increase of 30% over the second quarter of 2005. Second quarter occupancy at the Venetian was a second quarter record of 99.5%. Second quarter REVPAR was also a second quarter record of $241, up 5.7%. Second quarter adjusted EBITDA came in at $180 million; that’s a 19% increase over second quarter of 2005.

We added depth to our management ranks as we executed our worldwide growth plans including significantly expanding our development group in Asia and adding two world class senior executives to our management team. We advanced on a number of target capital improvements at our operations both in Las Vegas and Macao strengthening our long-term strategic position. We made significant process in execution of the development of the Cotai Strip in Macao, which I’ll talk about in greater detail a little later. We completed a $2.5 billion credit facility, the largest of its kind ever in Asia to fund our development plans on the Cotai Strip. And finally, we’ve continued our ongoing efforts to secure additional development opportunities to supplement our growth pipeline around the globe.

Turning now to our detailed quarterly results, our second quarter of 2006 reflected a solid top line growth at both our Las Vegas and Macao properties. In Las Vegas, revenues were stronger overall as our convention-based strategy drove revenue increases in our hotel, convention, and food and beverage businesses. Casino revenues were down modestly compared to a year ago. Table games volume was up slightly over the same quarter last year, while hold came in at below our expected range at 17.6% and below last year’s second quarter hold of 18.6%. Our expected range for hold is between 20% and 22%, whilst legacy EBITDA came in at just over $63 million.

The recent expansion of our meeting facilities continues to provide us with greater capacity to book group business. Increased group business led the way to delivering a second quarter REVPAR increase of 5.7% driven by an all time second quarter high occupancy rate of 99.5% and an ADR that also increased to $242. And if catering revenues are added to room revenues and divided by available rooms, the rooms and catering REVPAR grew from $271 second quarter of ’05 to another record quarter of $298 in the second quarter ’06, an increase of about 10%.

The results highlight the sustained competitive advantage of our convention-based business model and bodes well both for our ability to foster continued same store REVPAR growth for the remainder of 2006 and in the years ahead, and of course the opening of the Palazzo in the third quarter of 2007 will allow an expansion in extension of that strategy to a significantly larger asset base.

While we successfully increased the top line, our operating expenses were higher in the quarter as we brought on this new business. While we anticipated some expense increases in the startup phase as we opened up new areas and expanded our offerings, a declining whole percentage coupled with overhead cost increases and greater than expected startup inefficiencies in operating and marketing these new areas clearly impacted our results.

Expense increases year over year occurred principally in two categories: first, our employee related overhead cost increased in the quarter, part of this increase related to an escalation in healthcare cost in general, while another portion related to a spike in unusual high dollar tastes for which we are short. The recognition of on cash stock compensation expense which was not recognized in the second quarter of last year also contributed.

Second, we increased our head count by about 400 FTEs. The head count increase is part of our strategy to broaden our product offering and invest in the property to enhance its long-term competitiveness and profitability. These additions include employees who are servicing our new 450,000 square feet meeting space, our new poker product offering, our expanded Paiza Club and the Baccara Play, and auxiliary support staff for our new entertainment offer, Blue Man Tao and Phantom of the Opera. As you can imagine, management has been ripping those numbers apart, refocusing marketing efforts, challenging our initial assumptions relating to those investments, and reaching for additional operating efficiency.

In the future of course we expect to increase revenues from these enhancements, improve upon creating the proper mix of business for more efficient optimized profitability, become more efficient at operating these product enhancements, and of course to a table whole percentage to return to expected levels. Obviously improve top lines like “Kissing Your Sister Gets You No Where,” we’re focused on improving bottom line.

As we move toward the opening of Palazzo in 2007 we continue our strategy of strengthening and re-merchandizing the Venetian. Construction continues on our third theater adding 800 more entertainment seats to our offering. The theater is expected to open this fall by the celebrating committee and entertainer Gordie Brown. This theater will have the capacity to double as broadcast venue for televised broadcast of poker tournaments.

Mario Batali, the award winning chef, will open two new restaurants at the Venetian this year. The restaurants will be modeled on its highly successful New York creations of Babbo and Luapa. Phase two of our pool deck renovation is now complete and our new Tao beach area will premier in spring of ’07.

In terms of room product, we’ll be renovating all of our suite rooms in the Venetian tower. The renovation process will begin before the end of this year and we’ll update, improve, and contemporize our Venetian rooms while minimizing disruption to our business.

Construction of the Palazzo All Suites resort remains on schedule for third quarter 2007 opening. Our retail leasing activity in the Palazzo mall continues to go well with 25 tenants now in lease including Barney’s New York who will anchor the mall at the Palazzo. These tenants represent approximately 60% of the retail space available at the shops of the Palazzo. We anticipate the remainder of the space will be full leased by spring 2007.

Turning now to our performance activities and activities in Asia, the Sands Macao turned in another record quarter generating an all time high adjusted EBITDA of $117 million, up over 44% from the quarter one year ago. We remain particularly pleased with the momentum in our mass casino business. As I mentioned at the beginning of my comments, our win per table per day and win per machine per day have increased compared to the first quarter year ago, despite capacity increases in both the market place and at the Sands itself.

Mass table drop was $11.4 million per day in the quarter, that’s up 20% from the $9.5 million per day in the second quarter of 2005. Slot handle grew 57% reaching $263 million and producing a win per unit per day of $247 across all 895 units. As I mentioned in my introductory comments, our win per table per day and slot per unit per day growth, despite large increases in capacity, secure our belief that by following our strategy we’ll continue to see growth in both our mass table and slot businesses over the long term, despite the addition of new capacity in the market place.

On the VIP market side, rolling volume came in at a record $4.3 billion in the second quarter compared to $2 billion in the second quarter of ’05. We recently expanded our Paiza Club which added 16 VIP tables and incremented capacity to 30% to accommodate the needs of additional junket eruption sales agents. We continue to bring additional VIP players through our high end network and we’ll continue to focus our pies to marketing activities in Asia to directly support Macao and indirectly support Las Vegas.

Our strategy for growth and expansion in Macao remains clear. The Sands Macao, the balance of our podium expansion which will have 250 mass tables and nearly 300 slot machines to our current capacity remains on track to open later this month. Upon completion of the expansion we will expect to have a total capacity of over 700 tables and over 1200 slot machines, over three times the initial capacity of the Wind Resort opening in September. Capacity to meet the increasing importance of the mass market, which we believe will provide the lion share of Macao’s market growth in the years ahead.

Construction of the Venetian Macao, which will anchor the Cotai Strip remains on schedule for a summer 2007 opening, and we have now topped off the building. And on the remainder of the Cotai Strip we’ll continue to make significant progress in all aspects of development. We have now reached agreements with Fairmont Holdings Raffles International who have signed on to operate their brand on site 8, the final site available in phase one of our Cotai Strip development, along with a fair amount of Raffles brands that have entered into nonbinding letters of intent with Four Seasons, Hilton’s, Conrad, Starwood Sheraton, and St. Regis brands have expected to sign definitive agreements shortly. We’ve already signed definitive agreements for Shangril La covering our Shangril La and traders brands.

With respect to construction, we’ve begun construction on each of sites 2, 5, and 6 in addition to obviously the Venetian in Macao. Additionally, we’re now on the ground of both sites 7 and 8 and have received government approval to begin soil testing work on those sites. We continue with design and planning activities on site 3. We expect all of these developments to be completed by the end of 2008.

On the retail side, we continue to make steady progress on leasing the malls on the Cotai Strip. At our last update a little over one month ago, we announced that we had reached commercial terms with more than 200 premium retailers who combined will bring 250,000 branded stores to the Company’s malls. Today, six weeks later, I’m pleased to report we have reached commercial terms with more than 315 retailers for 699,000 square feet of retail space. That represents nearly 60% of the approximately 1.2 million square feet of available space at our Grand Canal shops and the adjoining mall at the Four Seasons in Macao.

Moving ahead with the definitive leasing documents, we have now executed the first handful of them fully and have signed leases in place. We remain pleased with the enthusiasm of the retail customers on the Cotai Strip, a number of whom have expressed interest in leasing additional space from us in the malls we plan to construct in conjunction with the remainder of the strip. The additional Cotai development will add another 2 million square feet of retail space overall.

As we’ve related in earlier discussions of our mall leasing activities at Macao, we believe that steadily increasing sales per square foot reported by retailers of Hong Kong shopping malls fueled largely by mainland Chinese visitors drawn by the approximate 30% tax advantage of purchasing luxury goods in China in the special administrative region of Hong Kong and Macao fall into our strategy of developing valuable non-core assets to both attract patrons to our properties and maximize returns on investment.

In addition, we’re following closely the political debate taking place in Hong Kong that would impose a goods and services tax on retail goods there, which if it is active will give Macao-based retailers an advantage over Hong Kong based retailers. We certainly note that Hong Kong visitation has increased 11% this year with mainland visitation up about 14%. Year-to-date Hong Kong hotels ran 86% occupancy with an ADR increase of 16.2% for an average daily rate across all Hong Kong hotels of $132 and this all occurring despite a 3.7% addition to rooms.

As a side note, relationships developed by our in-house leasing team have already borne fruit in our preliminary leasing activities in Singapore where we have received expressions of interest from our tenants in the Grand Canal shops by the dozen.

Turning to development of our Macao convention business, we are pleased to share we continue make notable progress. We’ve now signed binding contracts with 10 multi-year trade shows representing more than 26 separate events to host at Venetian Macao on the Cotai Strip, beginning in September of 2007.

Again our relationships with convention planners in Las Vegas and Macao give us a leg up in our pre-marketing activities for the 1.2 million square feet of convention space at our Singapore integrated resort.

Turning to entertainment offerings on the Cotai Strip, we advanced our plans with Cirque Du Soleil to provide them a permanent home, their first in Asia, and our Cirque Du Soleil theater at the Venetian Macao on the Cotai Strip, and we continue pursue other world class entertainment talent who appeal specifically to our mainland Chinese, Hong Kong, and Pam-Asian customers in Macao.

We’re making great progress with our Hengqin Island development. For those of you who are familiar Las Vegas, think of a Las Vegas Strip’s complimentary relationship with suburbs like Summerlin and Henderson. The amenities there particularly golf is a good recreational visitation to Las Vegas and are in themselves real estate value degeneratives. We think of the Cotai Strip and Hengqin Island in the same way, both with the added value of the second vacation home market and incremental visits to the Cotai Strip from buyers of those second homes. Now, add boarders, tennis players, convention delegates to the golfers then you have a complementary mix of non-core asset real estate value and ongoing visitor volume from second home visits as well as enhanced visitors amenity making the combined destination a more compelling offering.

So there we are, the authority to execute the master plan for Hengqin Island has now been granted to Guangdong Province; that’s happened just in the past few days. Guangdong’s plan for all of Hengqin Island of which our proposed plans are a component will be agreed shortly. The process is taking place through a committee that includes participation from the central government. We are in dialogue with the committee and as comments or questions on our portion of the proposal are received from that committee, we are responding and we’re helpful to them in the process.

We expect the Guangdong master plan for all of Hengqin Island will be decided by the end of this year. In fact, the Macao Daily News reported this week that the Guangdong Development and Reform Commission is attempting to get approval from central government from the second half of this year regarding the formation of their Hengqin Economic Cooperation Government and to start construction by the end of the year.

Much remains to be finalized as a result as it relates to things like planning issues, construction negotiations, and contract negotiations and so forth, and policy approvals like border crossing issues, offshore currency trading, preferred taxations and so forth remain in the hands of the Beijing authorities, but we remain enthused about he level of interest we’re finding in terms of branded amenities and partnerships interest as well as government support.

Being encouraged by the progress we are making, we have recently begun planning on a complimentary leisure destination which will enhance our Hengqin Island development plans. This development, Changxing Island, will offer water sports or resort amenities in the crystal clear waters of the South China Sea, only about an hour high speed ferry ride away from the Marina on Hengqin Island. Changxing provides an idyllic setting of wide sand beaches, clear waters, and a natural marine anchorage. Hengqin and Changxing developments continue to be subjective to receipt of necessary government approvals, but are very complementary to one another and very favored by the governments themselves.

As most of you know we closed in June on a $2.5 billion senior secured credit facility to fund our near term growth plans in Macao. This facility will be used for the completion of the Sands expansion, the Venetian Macao and the Four Seasons as well as a portion of the construction on sites 5 and 6 as well as sites 3, 7, and 8. In terms of other development activities worldwide, we are continuing to pursue many promising opportunities. Expect o hear more from us in regard to those activities in the future. On the domestic front, we filed our application with the State of Pennsylvania for our proposed development of the Bethlehem Steel Works in downtown Bethlehem, Pennsylvania.

We have been scheduled to present the event to the Pennsylvania regulators on November 6th. We remain enthused about the potential of this site, just a 90-minute drive from New York City and less than an hour’s drive from the affluent Northern New Jersey suburbs of New York. We expect a decision on this project by the end of the year.

As I mentioned earlier, we added two world class senior executives to our team since our last call, Kevin Kelley most recently, President and Chief Operating Officer for Hard Rock Motel and Casino, has joined the operating team; and Bob Rozek, a former audit and insurance partner at Price Waterhouse Coopers, and more recently senior finance executive of Eastern Kodak Company has joined the company as our Chief Financial Officer and Principle Accounting Officer. They join Mark Brown, formerly the President of the Trump Organization and Michael Chandler followed by a senior development executive of the Hyatt organization, each of whom joined us last quarter. We also added key personnel in our Asian development group as we expanded the scope of their activities to include Singapore. Expect us to continue to deepen our bench strength with high-caliber management talent as we pursue our growth plans around the globe.

Before we turn to the Q&A let me say that it’s gratifying to see our strategic vision being realized with our performance in Macao as well as the recognition of our place in the market as illustrated by the Singapore win. While our current performance this quarter in Las Vegas did not meet our expectation, we remain confident that successful execution of our plans will produce long-term results and industry wide leading returns. Although the trajectory of our growth will certainly not be without an interruption or two, steady, deliberate execution of our plans in Macao, in Las Vegas, and now in Singapore remains our primary focus. That’s what brought us to where we are today and that’s what will take us to higher levels of performance in the future.

And now with that I’ll ask the operator to begin our Q&A session. Operator, would you please open the lines.

Question-and-Answer Session

Operator

Ladies and gentlemen, if you wish to ask a question please press * followed by 1 on your touchtone telephone. If your question has been answered or you wish to withdraw your question press * followed by 2. Please press * and 1 to begin. Our first question comes from the line of Felicia Hendricks with Lehman Brothers, please proceed.

Felicia Hendricks, Lehman Brothers

Hello, probable questions for you guys. First, I was wondering if you could just quantify the dollar impact of the low hold in Las Vegas for us.

William Weidner, President and Chief Operating Officer

I think Brad has that statistic.

Brad Stone, Executive Vice President

If you look at a normalized hold of 21%, I think if you look at our last two years of operations it has actually exceeded that. There’s prior effect in revenue of about $8.6 million and assuming about a 60% margin, because it probably would have been at the higher end of our customer base, probably affected EBITDA to a tune of just over $5.2 million.

Felicia Hendricks, Lehman Brothers

Okay, and then as we kind of model going forward, obviously assuming the normalized hold, with the expense levels that you talked about, the highest expense levels that you’re clearly using to kind drive growth there, when do you expect it to kind of even out back to normalized levels, the margin that is?

Brad Stone, Executive Vice President

I think I’ll answer that question as well. As Bill pointed out in the presentation, we’ve added a lot of products. We’re kind of feeling our way through that process. A couple of recent good examples are the poker room. We opened the poker room and we actually lost money on that in the second quarter as we ramped that up. July, for example, we see it becoming profitable and reasonably profitable. As we get comfortable with that business, we grow the recognition that we have poker and we get efficient in our operations. Regarding a similar condition with the 450,000 square feet of meeting space we expanded, we’re feeling our way through that, so we found quite frankly while we’ve increased revenue in the catering side, the space we added is frankly not real efficient for us in the sense that we opened it prior to the infrastructure, which is supported by the Palazzo; in other words that 80,000 square feet ballroom that we have up on the fourth floor of that space doesn’t have a kitchen, for example. That kitchen is behind us about a year as we continue to develop and build the Palazzo resort. So, in the meantime, it becomes relatively expensive and we’ve seen some impact on our margins. In the short term, we’ll be more careful about what kind of events we book in that incremental space to improve our margins in the short term, but again that’s something once the infrastructure is in place and our cost of operating what is currently somewhat an inefficient space, that should improve our margins. Certainly, as we open our shell rooms with room and roof opened several months before this quarter started and obviously Phantom we opened in mid June, we’ve borne some expenses there without necessarily the benefit of the revenues, and we’ve had some inefficiencies in both those theaters and we see Blue Man starting to ramp up nicely. We have tremendous hopes based on the reviews and feedback on the fanfare, but again that will take some time as with any new product the feeling out the proper staffing levels that we supported with and of course growing the revenues as those products get marketed. So, I think in general we have a lot of new products, we’re very fortunate to have that product, but we’re finding that we can do some things better and we’ve got some challenges, and we’re ready and willing and able t as we have in the past to attack those challenges and make those venues very profitable.

Felicia Hendricks, Lehman Brothers

Okay, the next question I have — I think this is more for Bill — you gave us an update on a lot of different endeavors that you’re pursuing, one that’s come out in the news recently, your name was associated with a project in Japan, I was wondering if you could touch upon that?

William Weidner, President and Chief Operating Officer

Well that was as much of a surprise to us as it was to you; I mean we have been active in Asia now for years. About three years ago, we pointed at individuals to actually work for us in Japan and work basically under the radar screen there to deal with the Liberal Democratic Party and the various committees that had been set up. This individual that made that comment happened to be in Singapore. So, apparently the question must have come up in the context of expansion and he basically ousted us as it were in terms of our activities there relating to helping to advance the concept of casino gaming for Japan. Things move slowly shall we say, some say glacially in Japan, in terms of how things move from one step to another, but he accurately reported that the Liberal Democratic Party there has advanced an outlined casino legislation that will be introduced and debated in the Diet beginning the first quarter of next year if all went well. By the end of 2007 there would be legislation and 2008 they would go through a process of bidding and/or lining up potential partners, and as he were relating they would hope by 2010 if all went well there would be some form of casino gaming in Japan. Now, there’s a lot of distance between today and there, but I think the report essentially reflected our activities in Asia where we have a number of people that are working with us and for us to position us for other opportunities.

Sheldon G. Adelson, Chairman

Now Felicia this is Sheldon Adelson. I just like to say that newspaper article didn’t come as a surprise, but that’s what actually happened. It was somebody’s estimate. We won the tender in Macao and we won the tender in Singapore. I think with any company in Asia it would be hard pressed to say that they prefer to have number two or number three or number five candidates in other places that didn’t receive the nod. So, I can’t imagine companies like Thailand or Japan saying, “Oh, we don’t want number one, we want number five.” So, the fact that we’ve accomplished what we said we’re going to accomplish, and the Chinese government is quite satisfied with us. We’re very optimistic but when it comes to submitting tenders in other countries that will be right up there at the top.

Felicia Hendricks, Lehman Brothers

Okay, thanks a lot.

William Weidner, President and Chief Operating Officer

Just to clarify the surprise was just that…not surprised that it was identified as being active, it was surprising to us that an advisor in official government would make that announcement at this time.

Operator

Our next question comes from the line of Larry Klatzkin with Jefferies, please proceed.

Lawrence Klatzkin, Jefferies & Company

Hey guys, a couple of questions. One, as you’re more in the market, what are you seeing as far as seasonality in Macao and even mass versus high end?

Bob Rozek, our Chief Financial Officer

I think we’ve articulated on prior conference calls that one of our channels, at least from our database so far, first quarter is challenging, it has a lot of mass business, but a lot of the premium business is over here in Las Vegas and traveling during that Chinese New Year period. In the second quarter, we had good solid business in both segments. As you look to the third quarter, a little bit more of a mass segment, a lot of people on vacation, lot of visitation, a little less high end perhaps, though we feel very encouraged about our business there. Then the fourth quarter is kind of like the second quarter. So, we are starting to see a pattern of seasonality, of course the opening of Win provides an opportunity for let’s say additional visitation as that becomes an event for Macao along with our expansion of our facility and our ability to take our property now and to reach into a broader market; with those additional table capacities we can start offering the mass market that is currently relegated to the secondary quality properties because of gaming limits as we begin to offer 200 Hong Kong Dollars, in some case 100 Hong Kong Dollars table minimums we think will help stimulate a section of the market as well as Macao people get to see and continue to enjoy better quality products, and of course that will capped off with the opening of the Venetian in the spring of next year.

Lawrence Klatzkin, Jefferies & Company

All right, second question, going forward, you’re talking about this new island that’s a little bit of a resort island and high speed ferry to get people back and forth in Cotai from your other island, are you going to have your own high speed ferry to bring people back and forth or are you depending on Stanley’s ferry company to do that?

Sheldon G. Adelson, Chairman

We’ll be doing our own ferries. We’re also looking at the possibility of doing ferries in the current routes, and we think it’s a good thing for us to do.

Lawrence Klatzkin, Jefferies & Company

And the new ferry terminal for Cotai, looks it’s a little bit behind schedule?

Sheldon G. Adelson, Chairman

I was just there a few days ago on Saturday, today is Wednesday, about five days ago. It looked like it would be on schedule for me. The whole skeleton was up, the sides were going on, and I felt they were making tremendous progress. Now, I don’t have access to the plans, it wasn’t on my radar screen, but it appears to be going at a good clip. As long as it’s ready and running by the time the first true destination resort in Macao opens, that’s the Venetian Macao next summer, as long as it’s up and operating by then it’s enough of time.

Lawrence Klatzkin, Jefferies & Company

All right, I’m going to switching over to Vegas. What are you seeing, I mean we’re in through July right now, what are you seeing in the next quarters, do you still see strength in Vegas, any backing off or weakening?

Sheldon G. Adelson, Chairman

We don’t see anything on the horizon. I think it was a weak quarter all the way around for everybody in Vegas, but we don’t see anything in the horizon and the growth trend that Las Vegas has been experiencing for decades, and hopefully will continue to experience in the future. One weak quarter is not a trend interrupt.

Lawrence Klatzkin, Jefferies & Company

And how about July in Macao?

Sheldon G. Adelson, Chairman

We’ll have to discuss that at the next conference call.

Lawrence Klatzkin, Jefferies & Company

Okay, and then last question…

Brad Stone, Executive Vice President

It’s hard for him to say that yet.

Sheldon G. Adelson, Chairman

We can only say we’re not putting our…sneak it in, that’s okay.

William Weidner, President and Chief Operating Officer

We can say this, Larry, first of all the whole thing about whether gasoline or no gasoline or whatever just walking across the fall, walking around the building, it’s very busy. I don’t perceive any difference in filing of just a pure body count this July from last July; I mean just looking around the table there the rest of the guys come here pretty well every day, and in Macao it’s busy.

Sheldon G. Adelson, Chairman

I remember that many years ago when fuel was under $1 a gallon and when it up over $1, everybody was crying doomsday. Now, we’re at $3 or $4 a gallon and everybody is saying that the cost of fuel is going to affect the visitation to Vegas. Well, Larry, when you come into Vegas next time I’d like you to come into my office and I’ll show you a picture of Life Magazine of Doom 1955. Las Vegas I think is the boom over expenses.

Lawrence Klatzkin, Jefferies & Company

Yeah, I know, many people have written about the end of Vegas over the years, I agree with you.

Sheldon G. Adelson, Chairman

Rumors of my demise are exaggerated and premature.

Lawrence Klatzkin, Jefferies & Company

On the Far East, there are some rumors that they’re looking to do their own project and leave you guys. I understand that’s not true, but better get it from the horse’s mouth, what’s up?

William Weidner, President and Chief Operating Officer

It would be hard to do, it’s our land.

Lawrence Klatzkin, Jefferies & Company

No they were going to go to another site, I know that they would go to a different site?

Sheldon G. Adelson, Chairman

The Far East is not going to a different site.

Lawrence Klatzkin, Jefferies & Company

Good, I’m glad to hear that.

Sheldon G. Adelson, Chairman

Larry, the Far East isn’t going anywhere. It would be better for us, however. We have moral obligations and we want to continue with them. They are good people and we’d like to continue with them. I mean it would be best for us if we just kept our land.

Operator

Our next question comes from the line of Robin Farley with UBS. Please proceed.

Robin Farley, UBS

Thanks, Sheldon, a couple of questions. Obviously before your results there was some concern about convention, visitation in Las Vegas, and your REVPAR strength, looks like that’s not an issue, I don’t if you can comment on forward convention bookings as well. At the same time, your table drops in Las Vegas was relatively flat and always seems so far of the overall market is the numbers through May and volume through May looked like it was up significantly. I just wonder if you could comment a little bit about what we’re seeing in your results versus what we seem to find the market overall.

Sheldon G. Adelson, Chairman

Robin, before Bill says anything on this, I’d just like to repeat. One quarter does not make or interrupt. If you talk about a month or a quarter, Vegas was good for decades, it’s going to be here for decades more. We exist on a trend and if there’s a little fight, drop it…and no trend is completely smooth. So, I don’t know why we talk about a month or a quarter; let’s just talk about the trend. Like I said before, there’s nothing on the horizon, there’s nothing we’ve envisioned, then the radar screens show the long term that would affect the trend that we ride.

Brad Stone, Executive Vice President

To get us to break your question down into the group size; I mean we saw a healthy increase in group business in the second quarter. We’re up about 24% in group nights, so a lot of activity there. We capitalized and used the new meeting space. Again that caught a little short on the margins with that catering aspect of that new meeting space. As we look forward, we share with you from time to time our group booking pace and the way we define is if you look at the 30th June of 2005 and looking forward 12 months as of 06/30/05, we had 402,000 room nights on the books. As we look at 06/30/06 for the 12 months looking forward, we have 562,000 room nights on the books, so a very healthy growth and also a growth in the average daily rate despite adding that many rooms. Again, the positive thing about adding that many rooms is those rooms are being added in mid October, they’re being added on the marginal periods because that’s where our growth opportunities in the group business are. The only thing we have to look at quite frankly is making sure that we…we talk about fine tuning things and I know in other conference calls we’ve said…it sounds schizophrenic here, some quarters we didn’t book enough group rooms. We’re constantly reviewing and examining the mix of room nights as it affects all our revenue centers, whether it be catering, whether it be slot products, whether it be table games drop which kind of sags away into the other question, and maybe we’ll have Rob answer that. But certainly as we know it that when we add group room nights we do see effects in terms of the volumes in the casino, particularly on the mass side; that’s one thing that perhaps contributed to…we grew nicely in the Baccara business, we grew about 15% in the second quarter and dropped, but we fell off and so had an almost offset effect on what I call the non-Baccara business.

Sheldon G. Adelson, Chairman

Robin, what I’d like to say is, just think back for a second as part of our conference here. We said in the first quarter we had 99.9% occupancy, the second quarter we had 99.5%. It’s virtually 100% full and we couldn’t get any higher. Think of the fact that we opened our 500,000 square feet meeting complex a year and a half in advance because the demand for groups was so great that we had to open it to be accommodative. We now have 300 plus meeting rooms that hold 57,000 people simultaneously. That facility is the largest such facility in the world and we have more meeting rooms than all the hotels in San Francisco or all the hotels in Los Angeles and all the cities in the West Coast, maybe even New York and Chicago, we haven’t run into that research yet. If you look at our ADR, if you look at our occupancy rate, if you look at our demand for the meeting room complex, we can hold 57,000 people simultaneously; now not that there is one group that wants that, but we could accommodate a lot of groups and overlap a lot. So, higher occupancy is our future. The matter of the fact of opening the meeting room complex before we finish the infrastructure was a decision we made because of the demand that was out there. So, we accelerated and we will catch up to it. So, it’s better to bring the business in and have virtually 100% occupancy rate than turn the business away because the kitchen wasn’t up.

Robin Farley, UBS

Can you clarify the comments about the nights on the books, the 562,000, does some of that include Palazzo room nights at this point?

Brad Stone, Executive Vice President

No, it doesn’t. In fact that just takes you through the second quarter of ’07 and we’re opening the Palazzo in obviously the third quarter, so that takes you through 560,000 room nights from 06/30/06 to 06/30/07.

Robin Farley, UBS

Okay, great. Also, a question on Macao, you talked about Changxing Island near Hengqin, maybe you can clarify, would that require a whole other set of approvals on a different timeframe then Hengqin, and I don’t know if you can talk about any kind of economic commitment from LVS for that.

Sheldon G. Adelson, Chairman

We don’t want to go overboard on that. Consider that just an amenity, that it’s an island. I once had a huge 30-foot boat that I drove myself and went deep sea fishing; it was a lot of fun. And the fact of the matter is that it’s only an amenity. It’s just an amenity and we’re not creating another big development there. It’s an entrant to Hengqin Island development.

William Weidner, President and Chief Operating Officer

Those of you who’ve been to Macao recognize that the waters around Macao are not particularly swimmable, shall we say. It looks like a cup of coffee. It’s a river delta, so it’s a brown muddy river delta. A large part of what we’re doing on Hengqin Island is to develop marina facilities. Chinese are breeding some of the materials, they’re buying cars, they’re buying boats, their lifestyle is changing. So, the primary focus of Changxing is to give a destination for those yachts so that it’s got a clear water destination. There’s not a lot of investment that needs to be done in Changxing; it has the natural marina, it has the beaches, etc. So, it’s an amenity but it’s also a way of spreading further economic wealth in the Southern part of China so that more than Macao and more than Xuhai our advantage buy it. So, it has a dual purpose quite frankly, but it certainly adds to the amenity value of a business to the region, and that’s what we’re trying to do -- making the Cotai Strip a full fledged destination, dining, shopping, golf, gaming, sailing, buying, all the kinds of things that people like to do in one place at one time, to drive Macao as the destination, as is Las Vegas.

Robin Farley, UBS

Can you put kind of outside capital commitment just so we get what kind of economic commitment that is there?

William Weidner, President and Chief Operating Officer

It’s very small.

Sheldon G. Adelson, Chairman

It won’t make an impact of a tiny fraction of 1% of Hengqin, it’s probably unremarkable.

Robin Farley, UBS

Great, thank you.

Operator

Our next question comes from the line of Steve Kent with Goldman Sachs, please proceed.

Steven Kent, Goldman Sachs

Hi, good afternoon, just to stick on Hengqin just for another moment. The Hengqin opportunity as you’ve stated and we’ve seen is a huge opportunity, but as you’re interacting with the government and talking to them about some of the issues, are there any issues out there as you’re talking to them that would sort of reduce your desire to go into that market, and what I mean by that is the potential for the tunnel between Macao and Hengqin, the potential to not have checking of travel documents, etc., any of those kinds of issues as you talk to them that sort of says we may not be willing to go forward with this?

Sheldon G. Adelson, Chairman

I’m sorry, they’re the ones that are telling us they want a tunnel under the channel and there’s been a lot of discussion about the multi-million square foot convention center/exhibition center to build on Hengqin to essentially move the Macao immigration prints on the other side of the building. That’s a problem, they understand, they know what it’s about, that travel between the two countries, China and Macao have to be considered as though there’s an expansion in Macao.

William Weidner, President and Chief Operating Officer

I was very careful in what I said to make sure that we divide between Macao and Vegas. The local authorities in Xuhai, the regional authorities in Guangdong province, have indicated they want to be able to create advantages for Hengqin Island and they’ve asked the central government for policy decisions that would then relate to that. So, while we have Guangdong who are involved directly in the master planning process, those policy decisions are still in the hands of Beijing. While the local authorities have indicated that’s what they want to do, Beijing has to determine whether that makes sense or not; I think that’s the best way to clarify it. But, I don’t believe that Beijing’s decision about a border crossing would affect the fundamental value of development of Hengqin Island. It would certainly ease the process of particularly the convention business of being able to have millions of square feet of exhibition space on Hengqin Island as well as millions of square feet in Macao.

Sheldon G. Adelson, Chairman

They know the room supply in Macao is what’s going to hold the delegates to go to the convention center. They know that if everybody has to go through immigration and wait in line that it’s never going to work. So, subject to the approval of Beijing, people are working very close to accomplish what they want to accomplish.

Steven Kent, Goldman Sachs

Finally, last quarter you mentioned that there might be an opportunity you’re working on I believe in Europe, is there any additional color you could provide to that?

William Weidner, President and Chief Operating Officer

We’ve been very low key on that process. We don’t want to have the market be disappointed. So, it’s not really even on our communications radar screen. If in fact we’re successful, we’ll inform everyone. We are involved, it could be very interesting, but there’s no sense. Although we have in front of us all the positive things going on, we don’t want to put any flack I guess you would say in the atmosphere.

Steven Kent, Goldman Sachs

Okay, thanks for your help.

Operator

Our next question comes from the line of Celeste Brown with Morgan Stanley, please proceed.

Celeste Brown, Morgan Stanley

Good afternoon. A couple of questions; first, I guess inverse of the Las Vegas question, what was the EBITDA and back to the higher hold in Macao?

Sheldon G. Adelson, Chairman

I’d like to interrupt and tell you I read cover to cover of your Macao study and I’d like to compliment you, you did a very good job.

Bob Rozek, our Chief Financial Officer

I guess I’d start off by saying that the impact of the full percentage would have been primarily in the rolling ship program. Rolling ship program was up about four-tenths of a percent above the 2.5. So, we’d say that our expected range on the rolling ship program is 2.5 to 2.8, so it’s slightly above. So on a $4 billion rolling ship program, obviously one-tenth of 1% would have been about $4 million, and you can say if it’s two times of a percent it’s $8 million, and of course on that particular business we only run about 15% to 20% margin because of the 40% tax and the 1% roughly of the rolling ship that we paid as a junket rip. So, it had an effect probably in the range of EBITDA of $2 million to $4 million. On the mass side, again we held I believe it was 18.9, and that’s kind of towards the higher end but it’s still roughly within our range and roughly four tenths of a percent on roughly of $330 million of drop would have been…

Celeste Brown, Morgan Stanley

And then on Hengqin Island I guess, first do you view this as a done deal just sort of dotting the i’s and crossing the t’s waiting for Beijing, and do you have a sense for how much you’re going to need to put into that and when that would begin, and then I guess when we would start to see proceeds back out?

William Weidner, President and Chief Operating Officer

The answer to number tone is nothing is over till it’s over and when we’re dealing with the central government it’s always better to be cautious in terms of how you frame how the process is perceived. Number two, we see the expenditures of being relative to what we’re doing, relative and small over the near time, because the infrastructure work and the development work and things of that nature, preparation work are the beginning parts of it. So, let’s say over a 12-month time horizon we don’t see it being a very large amount of money. If we are correct in our judgment it is possible that we may get started by the end of this year, but we don’t see it being certainly a significant amount of money over the year of 2007. We have proposed a staged development that would put in place product as we test the market quite frankly. So, we would see about a two-year development process and we would then see return coming shortly thereafter because we get our pre-marketing activities for selling the individual units as we begin the construction process.

Sheldon G. Adelson, Chairman

Celeste, we’re optimistic and confident that it will be fine, but Bill says it’s not over till it’s over. As far as investment is concerned remember that the cost of construction in doing infrastructure work is significantly less than what it is even in Macao, because it’s in China and we use Chinese labor. So, it’s not going to command a significant part of our resources, a matter of fact small enough so that we will just handle that out of working capital, we won’t have to do separate finances for that. And when we do the first phase of development there, we believe that we’ll be pre-selling all of the units, so we don’t see Hengqin Island, although the outside potential of 62 million square feet is somewhat phenomenal to say the least.

Bob Rozek, our Chief Financial Officer

But, if I were to jump and correct myself, you think of month versus quarter, we had about $1 billion of non-rolling drafts in the second quarter and we’re actually at 18.6, one-tenth of a point which maybe above the higher end of our range. So it probably affected us, after gaming tax maybe it’s a tune of $4 million or $5 million.

Celeste Brown, Morgan Stanley

Okay, great, thank you.

Operator

Our next question comes from the line of Dennis Forst with Keybanc Capital Markets, please proceed.

Dennis Forst, Keybanc Capital Markets

Yeah, all my questions were answered except for one simple one. At the very beginning, Bill, you had mentioned that you added 400 FTEs to the Venetian, what does that bring the total up to?

Rob Goldstein, President of the Venetian Las Vegas

It’s just under $6 million. The breakup on direct fees was poker was 119, theater operations box office, Phantom was around 87, Paiza Club increased…the total was about 6000 employees.

Dennis Forst, Keybanc Capital Markets

6000 employees, okay, thanks a lot.

Sheldon G. Adelson, Chairman

Dennis, bearing in mind that all our restaurants are leased out. The spa is leased, the restaurants are leased out, so a significant part of all the employment in the hotel is by third parties.

Dennis Forst, Keybanc Capital Markets

All right, but 400 sounds like a fairly significantly number on top of 5600 going in.

Rob Goldstein, President of the Venetian Las Vegas

Well, it’s adding a lot of product and poker takes a lot of generation, and again we saw in July, we turned the corner on covering those payroll costs and actually making some additional dollars. Some of those numbers are, as Rob said, 87 are in the area of the theaters. We actually get revenue, we collect box office revenue, we get certain reimbursements for those as well. So, it’s not just added cost.

Rob Goldstein, President of the Venetian Las Vegas

Three areas are profitable, the poker room obviously is labor intense, the dealer operations will stabilize, we’re comfortable with Blue Man, Sam and Gordie Brown are profitable already. We actually added more cabanas to the pool this summer and 197 banquets there was for the quarter, just because we increased banquet business and not all that…

Dennis Forst, Keybanc Capital Markets

And kind of spoil this with the high margins at the Venetian, the 30% for the quarter seems to be hopefully a trough margin?

Bob Rozek, our Chief Financial Officer

I think we did spoil it, but we hope to spoil it again in the future.

Dennis Forst, Keybanc Capital Markets

Okay, thanks.

Operator

The next question comes from the line of David Anders with Merrill Lynch, please proceed.

David Anders, Merrill Lynch

Hey Brad or Bill, you’ll be at 700 tables, what day will that be for Sands Macao?

Brad Stone, Executive Vice President

Our current projected opening date is the 23rd of August.

David Anders, Merrill Lynch

And so you’ll be at 700 and then you’ll kind of run there for the next year or so?

Brad Stone, Executive Vice President

We don’t see that necessarily changing. We will be adding hotel products in Sands Macao, approximately 180 mini-suites; that construction will start shortly and be opened sometime next summer to support the convenience, but still there’s some overnight market there.

David Anders, Merrill Lynch

Have you tried to cross on that as well or not really?

Brad Stone, Executive Vice President

We still have to do a cross somewhere between $80 and $90 million.

David Anders, Merrill Lynch

And now just to be clear on this full whole percentage, you played unlucky in Vegas, you played lucky in Macao, and net-net at all counts was out at the corporate level?

Brad Stone, Executive Vice President

Well, marginally lucky I guess in Macao, within our ranges. Certainly, we’ve been enjoying an excess of a 22% whole percentage for the last year or two and Las Vegas to fall down to 17.5% is quite a difference for us. So, it’s a bit unusual for us to go down that low.

David Anders, Merrill Lynch

Well, I thought you said it was 3% in Macao and you normally run 2.5% to 2.8%, are those the right numbers?

Brad Stone, Executive Vice President

Yeah, that’s two-tenths of a percent against the upper part of the range.

David Anders, Merrill Lynch

Okay, thank you.

Operator

You next question comes from the line of Jay Cogan with Banc of America, please proceed.

Jeremy Cogan, Banc of America Securities

Hi, good afternoon. I’ve got a few quickies her for you. First, as it relates to the retail in Macao, has there been any change, Bill, meaningful in regards to the average price per foot that you’re getting those indications or you’re starting to write those leases at? As it relates to the vacation suites in Cotia, I was just wondering if there was any update as to the 2.4 million square feet and the expected rates you were hoping to achieve there, and then I have a couple of quick followups.

William Weidner, President and Chief Operating Officer

Okay, let’s say it one at a time. Now the rates that we’re booking the mall, as far as the lease rates are somewhere accordingly to our table, I guess you could say the lease rates that we’ve talked to you all about. The question of what the blended rate is depends on the space leased during the time period, that’s all. There is time space that commands a premium to let’s say mezzanine space, but our expectation of average is where we were in the past.

Sheldon G. Adelson, Chairman

The overall budget could be entire Grand Canal shop, we’re ahead of that budget.

Jeremy Cogan, Banc of America Securities

Okay, and as it relates to the vacation suites, number of square feet, has that moved at all in terms of more or less units, and what price you hope to achieve on those?

Sheldon G. Adelson, Chairman

All the square footage has stayed the same.

Jeremy Cogan, Banc of America Securities

Okay, then as it relates just to the broader CapEx in Macao, the Venetian, and the Four Season sites 5, 6, 7, and 8, have the CapEx numbers for those projects moved at all one way or the other since the last fall?

Bob Rozek, our Chief Financial Officer

I’ll give you the CapEx forecast for the balance of the year.

Sheldon G. Adelson, Chairman

Final plans for 7 and 8 haven’t been completed and we are still opening there and we are still out to bid on 5 and 6, but we think that our estimates are within range.

Jeremy Cogan, Banc of America Securities

Got it, just wanted to make sure, and then as it relates to the healthcare…

Sheldon G. Adelson, Chairman

We have a lot of experience building 10.5 million square feet now with the Venetian and we have a better idea as to exactly what it costs us and how to plug in numbers for different elements of construction.

Jeremy Cogan, Banc of America Securities

Understood, it’s just that there have been a few changes during this running season, so I just wanted to make sure as we look at the models we’re still looking at the right numbers.

Sheldon G. Adelson, Chairman

I think it’s fair to say there are no significant changes.

Jeremy Cogan, Banc of America Securities

Then, on the healthcare cost in the self-insurance issues that you had in the quarter, if you can help quantify maybe what the impact there was kind of year over year, because I would image that some of that probably just goes away right away, so is there anyway to quantify that at all that healthcare and self-insurance issue in the quarter?

Bob Rozek, our Chief Financial Officer

For the quarter if you look at all payroll related it was roughly significantly $7 million year over year, which had a big impact on our margins. Healthcare insurance itself was up just under $4 million of that. So, that’s a pretty significant number that we need to attack and work on. We need to find a balance between making sure we have outstanding benefits for our team members and making sure that those costs are controlled adequately, and this is a big number we’re going to delve in. There’s no quick or easy solution for this. It’s certainly a trend that people are saying nationwide I think we’re being impacted perhaps more than we should be and I think there’s opportunity for us to bring these costs down.

Jeremy Cogan, Banc of America Securities

Okay, thanks a lot.

Operator

Our next and final question comes from the line of Harry Curtis with JP Morgan Chase, please proceed.

Harry Curtis, JP Morgan

Hi guys, going back to Singapore for a moment, could you talk about the convention market in Singapore today and your sense of what that demand is going to look like once you open in perhaps 2009?

William Weidner, President and Chief Operating Officer

The convention market in Singapore is probably, at least in Asia, the top most popular place to hold a convention. It may be among the top three in the world with places like Las Vegas and Vienna as far as holding conferences, perhaps not as much trade shows but certainly conferences. And the interesting thing I think about Singapore is we look at the Singapore market and it has very little modern good meeting space. I think the demand for Singapore exceeds the supply of space there and we believe that once we put good modern flexible space in the market place we could capture a lot more share of world conference revenues that Singapore currently captures. So, we’re very confident that the convention and eventually the trade show market development there can be very robust. So, we got more encouraged as we actually dug into the detail.

Sheldon G. Adelson, Chairman

We’re building a significant convention facility there like we have here in Las Vegas. We’ll build somewhere about 250 meeting rooms that will hold 52,000 people simultaneously, and that compares with the equivalent of 34,000 people capacity in the top 50 hotels in Singapore. So, rather than any group having to use multiple hotels for meeting rooms, they’ll be able to use one facility and that will be very, very effective with a lot of groups that would go to Singapore.

Harry Curtis, JP Morgan

Do you think it takes a longer or shorter period of time for the demand to ramp?

Sheldon G. Adelson, Chairman

Well, I’ve got a meeting on the 14th there with a chairman of a very well known company, it’s huge, probably one of the top 20 companies in the country; we talked about a 16,000 person group and all night. So, the ramp up there, there’s a lot of interest, there’s quality. There’s an IMF meeting occurring either currently or in the next month or so in Singapore and it’s recognized as a very high quality meeting place, but it will be even more because when they’ll be able to hold all their plenaries, hold all their banquets, and hold all their breakup room sessions under one roof it’s a highly effective configuration for them.

Harry Curtis, JP Morgan

That’s great, thank you.

Sheldon G. Adelson, Chairman

We see nothing but the convention upside in the Macao is going very good.

William Weidner, President and Chief Operating Officer

It’s just bringing our model that’s been so successful here to another place that has infrastructure support, so I think it’s a perfect combination.

Harry Curtis, JP Morgan

Thank you.

Operator

I would now like to turn the call back over to Mr. Bill Weidner.

William Weidner, President and Chief Operating Officer

Thank you for joining us today. We look forward to talking with you again in the future. We spent a lot of time on a lot of different issues and I appreciate your patience and your focus, and we’ll look forward to talking to you again next quarter. Thanks again and have a good day.

Operator

Thank you for your participation in today’s conference. This concludes the presentation, you may now disconnect.

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Source: Las Vegas Sands Q2 2006 Earnings Conference Call Transcript (LVS)
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