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Las Vegas Sands. (NYSE:LVS)

Q3 2010 Earnings Call

October 27, 2010 4:30 pm ET

Executives

Daniel Briggs - VP, IR

Sheldon G. Adelson - Chairman & CEO

Mike Leven - President & COO

Robert Goldstein - EVP & President of The Venetian and Palazzo Las Vegas

Ken Kay - SVP & CFO

Analysts

Felicia Hendrix - Barclays Capital

Janet Brashear - Sanford Bernstein

Mark Strawn - Morgan Stanley

David Katz - Jefferies

Joe Greff - JPMorgan

Robin Farley - UBS

Larry Klatzkin - Chapdelaine

Rachel Rothman - SIG

Cameron McKnight - Buckingham Research

John Ou - Alpha

Chris Woronka - Deutsche Bank

David Bain - Sterne Agee

Dennis Forst - KeyBanc

Operator

Good afternoon my name is Christine and I will be your conference operator today. At this time, I would like to welcome everyone to the Las Vegas Sands Corporation Q3 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. (Operator Instructions).

Thank you, I would like to turn the call over to our host Mr. Daniel Briggs, Vice President of Investor Relations. Please go ahead.

Daniel Briggs

Before I turn the call over to Mr. Adelson let me remind you that today’s conference call will contain forward-looking statements that we are making under Safe Harbor provisions of federal securities laws.

The company’s actual results could differ materially from the anticipated results in those forward-looking-statements. We see today’s press release under the caption forward-looking-statements for a discussion of the risks that may affect our results. In addition, we may discuss adjusted net income, adjusted diluted EPS and adjusted proper EBITDA which are non-GAAP measures.

A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures are included in the press release. Please note that this presentation is being recorded. With that let me please introduce our Chairman, Mr. Sheldon G. Adelson.

Sheldon G. Adelson

Thanks Dan. Ladies and gentlemen I am very excited to report that Las Vegas Sands blew out the third quarter of 2010, with record EBITDA of $645 million, net revenue of $1.9 billion. Our EBITDA results were the highest in our industry since late 2006 when Las Vegas was at the very peak of this profitability. These results are part of a powerful and continuing trend which can be explained by the company’s longstanding strategic direction in combination with prudent new management and the team that Mike Leven and I have assembled and continue to build around us.

Some of you may recall that at our annual shareholders meeting in June I suggested that the company might be able to reach $3 billion in EBITDA in 2011. Well it turns out I might have been wrong. Looking at our results from the first 25 days of October, our annualized run rate is now substantially in excess of $3 billion. It’s good to be wrong in that direction.

So with that important clarification out of the way, let me take a few minutes to discuss the highlights for this quarter’s historic performance and some of the trends we are seeing moving into the end of October. Adjusted EBITDA reached a record 645 million for the quarter. Our EBITDA climbed by more than 73% from the beginning of June to the end of this September. The trends continues into October where we are on pace to grow an additional 31% from the September to October.

Net revenue reached a record 1.9 billion in the quarter. From June to September, net revenue increased more than 8%. And from September to October, we are projecting an increase of 12%. EBITDA margin also reached a record 33.8%, up nearly 1,000 basis points from the 3.9% in the quarter last year. Adjusted diluted EPS reached $0.34, up over 1100%, that’s 11 times from $0.03 in last year’s third quarter and is the highest third quarter EPS in that company’s history.

Let’s turn to Singapore where Marina Bay Sands in its first full quarter of operations generated a whopping $245 million in EBITDA and an outstanding EBITDA margin of just a 10 under 50% at 49.7% for the quarter. Both our record trending property in our company’s history. This is in spite of the fact that low hold on rolling play of 2.65% negatively impacted our revenue by approximately $20 million. These results are particularly impressive considering we are still in the very early stages in Singapore, after opening the doors just six short months ago.

Let me share with you some of the exciting trends we are experiencing in Marina Bay Sands, these figures are based on a four week average comparison. Gross gaming revenue has increased to 126% since May reaching $8.4 million per day in October at an annualized run rate of 3.1 billion. Rolling volumes have increased to 182% since May to reach 116.3 million per day in October. At that rate we will roll $42 billion annually approximately. Gross gaming revenue from our mass tables and slots increased 49% since May to reach $3.2 million per day in October at an annual run rate of $1.2 billion.

Non-rolling drop increased 21% since May to $9.6 million per day in October. That’s an annual run rate of 3.5 billion. Slot handle increased 165% to reach 18.3 million per day in October, that is 6.7 billion annually. And slot win per unit per day increased 43% since May to reach $517 per unit per day so far in October. These results reflect the addition of electronic cable games which came in August and September. The annual run rate for gross slot win is approximately $350 million.

Let me now provide some quick color on the Macau. I'll address the issue of EBITDA versus gross revenue in a minute, but let me first point out that our EBITDA margin and Macau reach a record 31.3%, up 310 basis points from the 28.2% in the same quarter last year. I believe that’s a result of having an integrated resort where you have other departments that are contributing to lot of the fixed and of course the variable census.

Additionally, you all know the Golden Week holiday took place earlier this month. This was a strong Golden Week for Sands China as we said set two daily records for EBITDA and with a full week and still ahead of us and despite the prior week's typhoon warning, we are on pace to have a record month in October overall. We are certainly enjoying tailwinds for both Singapore and Macau at the moment. Our progress in both the Las Vegas and Bethlehem Sands should be discounted either.

We are optimistic about trends in Las Vegas including momentum from our recently announced marketing alliance with InterContinental Hotel group. And in Bethlehem where table games and the completion of our hotel next spring should continue to produce increased growth revenue and EBITDA.

Simply put, our business overall has never been healthier. We are growing at a significant rate while generating more cash flow than ever before. As a widely read Macau publication recently said on separate occasions and I quote, “LVS will one day still be remembered for in the quarter in which it separated from the pack and became the one”. It’s not the kind of stock you would want to put in your children’s trust fund simply because Adelson has pulled away thanks to its huge bets in Asia. For properties he already has are going to provide fantastic cash flow in the coming years for investors”. Not our words, but we couldn’t agree more.

The fundamentals of this business and our basic business model have not changed and were always valuable. Our strong results reflect a successful execution of the integrated development strategy that we have aggressively pursued since we founded the company. That is the key to our growth story is the liberty of our assets. We can't possibly know how these trends will continue to develop, but we can give you a real-time look at what we are seeing right now. As a starting point for our Q&A discussion let me share my thoughts of three additional points.

First with respect of the granting of credit in Singapore. We have more than 10 years experience granting credit to Asian customers in both Las Vegas and Macau. We've been very judicious about granting credit. Notwithstanding the ramp up we've been experiencing, we are managing this very tightly and monitor it on a daily if not on hourly basis. We have been measured and prudent about granting credit. Second, a strong belief is that the appropriate measure of our financial performances EBITDA, not market share of gross revenue. For instance in Macau and Sam has given us tens of sub licenses an according to rumors MGM, Galaxy and Melco have decided to follow suit.

And I believe Galaxy and Melco are also doing so. Under these arrangements, the operator may actually receive and these are the most recent offers. The operator may actually receive as little as 3% of gross revenue. But the used 100% of the gross revenue could determine their market share.

I personally think there is an over-exaggeration of the issue of gross revenue for market share, but all you are getting is 3% out of it when you are counting the entire 100% as part of your market share. What’s more important, 3% of revenues before expenses or EBITDA of more than 30%. I think that the answer is obviously. Anybody who has read the dummy’s guide to doing business knows that what really counts is the cash we are able to put in the bank. So I hope that will put an end to the market share quotations the way it has been done.

While our market share of gross gaming revenues in Macau has remained approximately 20%. Our share of EBITDA in the market place is significantly higher. We estimate that we are currently generating between 35 and 40% of the total EBITDA in the market. Now that is how we define market share leadership in Macau. One final thought. Sometimes we yield a little less, sometimes we yield a little more, but we are right where we should be so will be averages over time. So with that Mike, Rob and Ken are also here to your questions. So let’s go to Q&A.

Question-and-Answer Session

Operator

(Operator Instructions). And your first question is from the line of Felicia Hendrix with Barclays Capital.

Felicia Hendrix - Barclays Capital

Good afternoon. So great quarter, Sheldon. At the beginning, you ran through a lot of impressive numbers for October, for me kind of fast. Everybody else can't speak up at this moment. So, if I missed something, I apologize. But in those numbers, you were just talking about how important EBITDA was. I was just wondering if you can give us an idea of what EBITDA was trending in October at Marina Bay Sands?

Sheldon G. Adelson

The trend of EBITDA, well I got can tell you, we don’t have that, do we have that here as a percentage?

Felicia Hendrix - Barclays Capital

Not as the percentage though. Your EBITDA in the quarter was about 80 million a month, so I was just wondering how it’s turning out in October?

Mike Leven

It’s over 20%. It’s beyond 20%.

Sheldon G. Adelson

From the end of May to the beginning of October.

Felicia Hendrix - Barclays Capital

Then so the margins at the property, very impressive 50%. You definitely got there faster than we expected. Where do margins go from here?

Sheldon G. Adelson

That’s a good question. We are sailing in Marina Bay since Singapore is sailing in unchartered waters and the amount we don’t see any let up in the growth, but the higher, the Paiza Club or the high-end gaming, the larger the slug of revenue from that segment the higher the percentage will be. The other day we pulled in 71% of Casino departmental profit. So the more of that, it’s tough to say, but I can’t see it going much more then 60%, but I have a very high very consistent high end of the marker return every since day to get beyond 60%.

Felicia Hendrix - Barclays Capital

Just getting back to my other question as a follow-up, so it grew 20% from the end of May to October. What's the base that you're using?

Sheldon G. Adelson

No, no, no much more what is Dan, what's the figure? Somebody came along and took my pages here. I can’t refer back to the beginning.

Daniel Briggs

We've got a very strong October. We are holding a little heavy. We have got a very, very strong start to October, so if you look at the months in the quarter July, August and September EBITDA by property, it goes up every month from June to July, from July to August, from August to September and from September to October.

Again October had a Golden week in it, it’s also got a heavier hold even after the Golden Week, so we were really enjoying the wind in our back right now, but the number is much, much higher than the number we had in September. On a percentage basis, based on what’s happening right now, it’s up 40% approximately 40% from September to October.

Sheldon G. Adelson

EBITDA

Daniel Briggs

EBITDA

Felicia Hendrix - Barclays Capital

So you won't tell us what the September EBITDA was?

Daniel Briggs

I think we have plenty of caller, Felicia.

Felicia Hendrix - Barclays Capital

Okay and then just are the rebates still at 1.2 to 1.3?

Daniel Briggs

Yes

Felicia Hendrix - Barclays Capital

Okay great Final question, on Four Seasons Macau, EBITDA margins were also a record. You obviously held well in the mass, but I was just wondering what a run rate was there.

Sheldon G. Adelson

I don’t think we have that carved out, and annual run rate of EBITDA.

Felicia Hendrix - Barclays Capital

No, you had a record EBITDA margin at the Four Seasons, but you held well. Should we look at this as we model forward, or is this an anomaly?

Sheldon G. Adelson

I don’t think it’s an anomaly I think it because we had a very had a much higher percentage of high-end gaming, of high-end wind. But I see the Plaza at the Four Seasons not equaling, but starting to approach within a striking range, the number were experiencing at Sands Macao. That’s picking and we expect it to pick that more, we anticipate doing some property improvements and adding couple of amenities.

Operator

Your next question is from Janet Brashear with Sanford Bernstein

Janet Brashear - Sanford Bernstein

On the topic of Singapore, could you give us a little preview of what you see coming in the next quarter relative to the moving parts? You had a lot of moving parts, a new part to the resort open like with retail ramping up, with changing the electronic games or adding the electronic games, and increasing your occupancy. Could you talk a little bit about where you think the occupancy can go if you have more changes to the game mix, and how the retail might ramp?

Mike Leven

Basically our occupancy has been building (inaudible) favorably, our tour operator business is close to 600 rooms a night. Our MICE business is building. We expect the occupancies to grow significantly higher towards the end of the year. On the retail, we are still not completely open, all the retail with the possible exception of Louis Vuitton will be open by the end of the year and it’s starting to ramp, not as well as we would have thought in the early going because the construction is going on, but it will basically be finished so that will be a contributor in 2011 we think significantly.

Our room rate is holding and going and actually heading north, it’s going up. So that's working. I think all the signs are call center, all the signs of business beyond the casino situation are starting to move forward now, pretty rapidly and I think you will see some very significant consequences to that, the theatres will open at the end of the year and the museum will open at the end of the year.

So we are pretty much done with everything there except the light and water show which will probably open in February and now we just have celebrity chefs open the end of this month, the roof top restaurant opens at the end of this month and the only significant delay in anything is the health club and the spa and that will take place some time in the early part of ‘11. So all of these income generating areas will pretty much be done by the time we head into ‘11 and some of them would have already ramped. So we expect a bigger contribution in 2011 from the rest of the property.

Janet Brashear - Sanford Bernstein

Could you also give us a little update on Lots Five and Six and Macau on things like have you been able to resolve all the prior contracts from when you shut down and restarted? How is the labor situation coming along? What sorts of expenses are you incurring as an additive expense now that the work is not going quite at the pace you would like? Maybe a little bit about when you expect Galaxy to open and the impact on the whole market, not necessarily the Venetian, but maybe the Peninsula as well.

Mike Leven

The latest commentary on Galaxy is June. What we are hearing, we have no definitive word out about that. As far as that we are concerned, we are still on our target, our budget has remained the same. Yes, there will be a couple months delay. We are still looking at the end of the last quarter, we’ve 11 to open a Phase 1, however in the next 30 days we should know pretty well whether we can make that particular situation depending upon the amount of available employees.

We have gotten indications that were going to get the numbers we need. But until we actually see them, we can’t give a definitive answer as to the exact date it will open. All the contract situations have been basically resolved, the contracts are out to the sub-contractors, everything is ready to go. All the design work is pretty much done. Our material is being ordered and as soon as we get the, move our construction work force from where it is to where it has to be to get everything done, we will be able to get give you that definitive date but I would say by the end of this year we will have much more definitive date on five and six.

The every indication in the press and from the government says that the problem should be solved. But until it is solved we just kind of plugging along with our plans, but the contracts that you asked, but were all taken care of this year. There should be no surprises there at all.

Janet Brashear - Sanford Bernstein

Finally, could you just comment a little on Sands Macao? If there's any property that didn't perhaps hit the ball quite as far out of the park as every other one, it would be Sands Macao. Where do you see that property trending now? When Sheldon mentioned earlier some improvements, was he talking about Sands Macao?

Mike Leven

Actually improvements that Sheldon was talking about were in the Plaza and the Four Seasons. We were putting in some high limit areas which have been very good for that particular casino. And we’ve also done some more junket work in the Four Seasons and the Plaza Casino. So those things are starting to ramp up. In the Sands, as many of you know we are doing the Playboy situation in the roof top area. We put some private gaming rooms in there with that. I think the Sands Macao we really sort of look at as the cash cow in Macau. Remember that the most amount of competition that’s there in Macau really affects the Sands which is located on the Peninsula. So we work very hard with our business mix there and we are not looking for enormous hops in growth. We are looking for really stability and I think that’s what you saw happen in this quarter.

Sheldon G. Adelson

We are still growing. I am looking at the members who are still growing not as dramatically as there are other properties but we are still growing and bear in mind that most of the competition is on the Peninsula. And just totaling our own when there is more capacity, it dropped into the market periodically just totaling our own is that accomplishment but we are actually increasing.

Also another point I want to bare in mind back in 2005 we announced that we paid up the entire cost of the property. So we are providing an infinite return, so every nickel we make there is a nickel is without an investment. Let me talk about billion, every billion we make is without an investment.

Operator

Your next question comes is from Mark Strawn with Morgan Stanley.

Mark Strawn - Morgan Stanley

Just one quick question on Singapore. As you look at your customers today, do you have a rough breakdown of the customer mix between locals and foreign markets and which maybe foreign markets you could target more heavily going forward?

Sheldon G. Adelson

Well, I tell you, you know that foreign market is a moving target. I'll tell you that I watch that every single day but I only have access to the top 20 what we call the hit sheet. The top 10 winners, top ten losers and the average number of countries that are represented and those 20 customers are eight to nine different countries. We get countries from all over the Pacific, from Laos and Cambodia and Myanmar. Let me get back to the beginning and say that our primary markets are Singapore, Malaysia and Indonesia.

We are building up steady stream of business from Korea, from Japan and outside of the area Hong Kong is our biggest contributor. China is let me say equally as strong. So we get a lot of business from China, but we are very cautious about granting credit only to people that we know. So it’s just a whole potpourri of countries that are represented, I have ordered a percentage of total business, a breakdown by country.

So we will see some sort of an analysis. But I got to tell you, as far as the top ten winners or losers it comes from a wide variety and I personally curious about it. I watch this every single day and I can look at it and sometimes we have as little as four people from Singapore, sometimes as many as 12 or 14 out of the 20.

One day last week I saw, mid week only four countries represented, but it’s going out, we get from Bangladesh, we get from India, from Thailand, from the Indo-Chinese countries, Vietnam, we got from Philippines, New Zealand Australia, couple from the USA, but we are going to do an analysis of that. We will probably be publish that, but I personally see it as a very promising sign, because when you penetrate of the haves as opposed to the have-nots in a place like Bangladesh all have to know each other and people say, they enjoyed their stay, their trip. Well then I get a lot more people from outside Bangladesh and so we will have a steady solid stream of business, from each of those countries and is an awful lot.

Mark Strawn - Morgan Stanley

One follow-up if I may, perhaps a question for Mike. As you look at operating expenses at Marina Bay Sands, would you say you're pretty much fully staffed at this point without a lot of incremental labor coming on?

Mike Leven

We actually have been understaffed Mark from the original target, original target was about 8400 people. We ran below that for the first number of months just in terms of on boarding people, we couldn’t find enough of them. So our present payroll levels will probably increase closer to that 8400 level and then we have additional employees coming on with the theaters and the retail stores and the museum, et cetera. All of which will come according to plan. So we don't expect that there would be any enormity in the payroll increases compared to what we expected from the beginning, but you will have some slight increases to what we've been running now.

And we watched that very carefully and continue to watch that very carefully. We also get requests from the Casino Regulatory Commission for certain audits and things like that that keep coming in that require additional people and we are working, we do that as well, but I don't think you will see any enormous surprise in terms of payroll costs.

Operator

Your next question is from David Katz with Jefferies.

David Katz - Jefferies

I wanted to ask about Singapore, if I may? Noticing that the occupancy in the hotel is still what I guess we should consider at the formative stages, how should we think about a fuller or a higher occupancy and how that translates into casino revenue once you get there? In the context of what we've seen so far appears to be clearly stronger than what we had and my guess is stronger than what many people had been forecasting so far?

Mike Leven

David I think you will see that in the growth in the mass market play. The numbers that we talked about before on the per day actualities for the mass market. We expected those, that those numbers will increase as the participation in the hotel increases. Our venture will get a tracking for the out of town or the foreign visitors from the hotel and what they are doing if they get carded, in other words if they get monitored in the Casino.

But we haven’t done that yet, but that’s your metric that you will watch, because there is only so much mass market that can come from the Singapore environment itself. And so as the hotel fills and gets more interesting business from MICE et cetera. Things like we have a big Indian promotion going on in January to open that market more viably for us.

I think that is the measure that you will see. Slot play and mass drop will be the ones.

David Katz - Jefferies

On Las Vegas, one of the things I observe is a potential I believe expansion of McCarran at some point out in the future. I admit to not knowing a heck of a lot about how those expansions get filled up with air capacity. Looking at that as a potential driver of some recovery in Las Vegas, what can you help us with in terms of how that rolls and what you might know about an expansion at the airport, increased capacity at the airport, and just thinking about a Las Vegas recovery longer-term?

Mike Leven

The airport is expanding with an additional runway, but it doesn’t really do as much good because unless you get more lift into Las Vegas, US Air and South West and whatever have cut back some of their lift into Vegas which has caused I believe something like 800,000 less passengers this year coming into the airport. That drop is really because no seats are available. Most of the planes that come in here have very high load factors and they are very profitable for the airlines, but they sort of left us out in the cold.

There are couple of things that are happening that I see, our Korean Air is coming in here now. There is a couple of other foreign carriers that have come in, BA and Virgin and what have you that are dropping some people in here, but at the end of the day, to have a significant recovery for Vegas in terms of the totality of the market, we need more lift in here because the drive traffic is pretty stable as well. And California does siphon off a little bit of that drive track with their own entertainment casino facilities. So lift is the single most important thing in terms of that. McCarran can handle more traffic. It’s just a question of getting more planes in it.

Operator

And your next question is from the line of Joe Greff with JPMorgan.

Joe Greff - JPMorgan

At Marina Bay Sands, do you have any more space to add more slot or table gaming capacity? Do you feel that your capacity is constrained at all right now?

Sheldon G. Adelson

We do have capacity, we can find more room. Well we do have capacity, we are ready to do something. There is a possibility of some additional GFA to be connected to the hotel, but I really can’t say much about that now. If we are going to expand right now with what we have, we are doing an analysis of the availability of the number of private gaming rooms.

So we are looking ahead and we do have some space to put that. I think we are okay in the mass market, and I think we have enough capacity, but I think the high end as it grows, it’s pushing 60% of the total gaming income. It's like 57 to 60% of the gaming income and that keeps improving, keeps increasing. So I think that what we are going to focus on first is more private gaming. So in private gaming, one bet can equal all the bets that are around the table in the mass gaming floor for that minute. So there is a lot of upside potential at the high end, we are going to focus on making sure we have enough private gaming rooms.

Joe Greff - JPMorgan

Thank you. I was hoping you can maybe give us some sort of status update on commercial gaming in Japan. I believe, a few weeks ago, there were some delegates from the government visiting in Las Vegas. Then I have a follow-up question.

Sheldon G. Adelson

The status of the Japan well as I mentioned before there was an inter-party gambling study group put together. It appears to me and we have been told there is a draft of legislation we've contributed to that, we've commented on that and it’s moving forward. They say that it should come through by the end of the six months session starting I think in either January or February coming up and that within six months the legislation and all the companion legislation.

You know they have to modify other laws such an anti-gaming law to make it legal to allow gaming, so there are number of a companion measures that have to be done. They say that should be done by the end of June and if it’s done by the end June, we are talking about going into July, going into the next session of the legislature will be the first half of 2012 during which it will have already been put over to, transferred to the prefectures and the prefectures will setup their own procedures and selection of operators should be made sometime. It could happen soon, but they are talking more conservatively about first half of 2012.

Joe Greff - JPMorgan

Sheldon, you started out this call by talking about how, in the first 25 days of October, you are already run-rating at your old $3 billion 2011 EBITDA. (multiple speakers)

Sheldon G. Adelson

Can you imagine that Joe, I was wrong.

Joe Greff - JPMorgan

Let me give you a chance to correct yourself and establish a new target. What is that new target now?

Sheldon G. Adelson

I got myself into so much trouble. I blurbed it out during the shareholders meeting and I got into so much trouble. The attorney said why did you do that? Mike might carried on a lot of one on ones by the end of the day and they said that’s all they ask, but about the 1 billion in Singapore and 3 billion, and Rob is telling me I have to step up to the plate and admit that I was wrong.

I had to admit that I was wrong and that I was much too conservative and that’s certainly is not my reputation, so I had to correct it, so I certainly didn't want to lose my reputation so we just had to do more than what I expected.

Operator

Your next question is from Robin Farley with UBS.

Robin Farley - UBS

I wonder if you could give us some color around receivables, and that as a percent of specifically casino receivables in both Singapore and Macau.

Ken Kay

As Sheldon mentioned in the prepared remarks, we’ve been very careful with regard to the extension of credit in Singapore and as with the rest of our operations when we established reserves against receivables balances, we go account by account and work with marketing people, the collection people and the finance people to determine the appropriate balance.

So as a just overall statement I think we are very conservatively stated, relatively to our receivable balances. And if you look at Macau, we've got reserve or allowance for question about 42% against the gross casino accounts in total. And if you take a look at that kind of the immediate collections that come right after the end of the quarter, it’s almost 48%.

In Singapore obviously we are just getting started with regard to kind of the extension of credit and balances. We've got about a couple of hundred million dollars of receivables outstanding and we've got about 12% reserve against that and no significant issues to really report. So we've gone through the vast majority of the accounts and feel that they are all adequately stated with the modest amount of reserves that we have and actually interesting enough we've had some kind of long outstanding balances that we are starting to see collections come in on those in the fourth quarter and the accounts that haven’t paid for some time and so we are doing actually better than what we expected.

Robin Farley - UBS

Just to clarify, did you say 42% reserved in Macau, but 12% in Singapore? I just want to make sure I got those numbers right.

Mike Leven

That’s correct and as Singapore, it is about 12% against the gross receivables, continuously outstanding.

Ken Kay

Obviously that Casino balance Rob and is much pressured and there is nothing old so to speak of (inaudible).

Robin Farley - UBS

The last question is just do you have any thoughts on the timing of junket operators getting approved in Singapore, and I don't know whether how important that is here now, but just your thoughts on that and timing of that?

Sheldon G. Adelson

Robin, what was that word, the training of junket operators?

Robin Farley - UBS

Your government approval in Singapore?

Sheldon G. Adelson

My position hasn’t changed we will seriously consider doing business with junket rep, but I am still of the opinion that either they are not going to fully apply or they are not going to be if they fully apply. Only the ones were they, I would think that only ones with no track record would pass. And if they did pass they won’t have enough business to really add a lot of value to the junket rep mainstream of customers coming in.

We keep finding little things that happen, one guy will send in a lot of money for the benefit of several other people. And we cut that off as soon as we have seen that, we are not going to take any steps whatsoever that can be directly, indirectly, remotely or overtly through junket reps, because it’s disallowed. We are erring on this side of following the casino regulatory authority rules. We are not sure, that our competitor is doing this. There is a great amount of curiously about, this seems to be the best, the worst kept secret that (inaudible) is doing business with junket reps.

Now they have been doing business with junket reps for decades and I am not sure that they know, they have any experience with the credit markets and they certainly want to, they find it a lot easy to deal with the junket reps. But as I said before and I will say it again, I don’t believe they are going to provide the information that the government will require and if they do, they will either not be the kind of junket reps that are the Macau style junket reps that provide a collective credit, They will just be referring for a limited commission or cap on this commission. So I don’t think the junket reps are going to be a major fact, but they want very much to be there.

And if they are going to really work seriously consider doing business with them, but so far we are doing quite well without them.

Operator

Your next question is from Larry Klatzkin with Chapdelaine.

Larry Klatzkin - Chapdelaine

Couple of quick questions, one, our Four Seasons apartment sales any update on that or a status of when you might get that money in?

Sheldon G. Adelson

I don’t want to stand like a broken record, but we are hopeful that we can immediately receive the approval. If you read the newspapers, you read the clippings, we have a clipping service. If you read that and you believe it we are about to get it.

Larry Klatzkin - Chapdelaine

I hope that's the case. You could bring in as much as, what, $1 billion with all the apartments being sold?

Sheldon G. Adelson

At the number we are looking at, it could be a size of 1.4 billion

Larry Klatzkin - Chapdelaine

Okay. Rob, as far as convention bookings for Vegas goes, I know Vegas is the boring area at this point. But how is it looking for 2011? Are you still booking over $200 a night on what you are seeing?

Rob Goldstein

To a group cycle, Larry?

Larry Klatzkin - Chapdelaine

Yes, for groups, forward booking.

Rob Goldstein

Groups are strong and the main trends are good for the group cycle and unfortunately the ADRs are lagging, we are split probably in the 180, 190 range, but we are not getting to 200 plus. So it’s not happening. Demand is there on (inaudible) all competition in that segment, every segment of Las Vegas. So we expect that we hit our numbers as for as our percentage of our segmentation, but I don’t think rates will be, they will not reach 200 plus million.

Sheldon G. Adelson

And as an indication we are straddling 200 in October. One of the two properties is 201, one is 199, so we are straddling an average of $200.

The InterContinental deal with 102 million customers, they have got thousand of sales people out in the field and the biggest venue that they bidding us for is Las Vegas with no property here to fill it. So we've signed a deal with them, we just announced it a couple of days ago. I think it’s difficult to add a lot of numbers to it, but I am quite convinced and so is Mike that this will be the difference between lower occupancy and a full occupancy. No hotel company goes out for the big groups we do. It will chase five or10000 person or 15000 groups, we can almost handle that in house, you know without leaving the building, when other properties need a while city full of hotel to accommodate that. So InterContinental is going to be a big push up in trust and I think it’s going to have a positive effect on us.

Larry Klatzkin - Chapdelaine

All right Are you guys still feeling better about Las Vegas in 2011?

Sheldon G. Adelson

I think we have mixed feelings.

Rob Goldstein

Let’s not get too emotional about Las Vegas, it’s still a struggle, when group segment rates, is still up to $200 and there is lots of, working with the partner nothing, your numbers are numbers, they haven’t been all that (inaudible) move back to a better place, but I wouldn’t expect huge numbers of anyone in this thing.

Sheldon G. Adelson

I know that sounds contradictory considering the reputation of my relationship with Steve Wynn, but I am hoping that Steve Wynn who is great at creating a mystique about an opening I hope he opens up with no property, that will give Las Vegas the push

Larry Klatzkin - Chapdelaine

I know China currency chance of moving Singapore's full amount of currency, what does that mean for you guys and what are you hoping for?

Mike Leven

I would say that everything we read, it helps right now by the weaker dollar and the stronger Singapore Dollar and as far the China currency is concerned, we are also helped there as well, so I don’t think anybody really knows you can read everyday, you are more into than we are in terms of currency management, but right now we are in a very favorable situation with the money that comes in Singapore dollars and the money in the Chinese currency. So I don't expect any negative surprises in there, it should be all positive for us in 2011.

Operator

And your next question is from Rachael Rothman with SIG.

Rachel Rothman - SIG

I think you guys were talking a bit about the Las Vegas environment. Can you talk a little bit about the promotional environment on the casino side and whether or not you expect to see or how you would characterize the change in the market that you would expect to see from the opening of Cosmopolitan and maybe any changes in your marketing or promotional strategy around that as well?

Mike Leven

Well it is a very intense promotional market in Las Vegas for last 24 months due to the downturn in cash demand segment. More people are giving away more things to casino customers (inaudible) our table and that continues as we speak today. In addition obviously the cash segment is very competitive as you saw with the LTAs, I think the recent trip offers you are seeing personally, but I think it’s no surprise that Las Vegas is competitive on the cash rate side and due to the lack of demand that makes it more competitive on the comp rate side and additional offers. We've cut back, we continue to rethink our offers and how aggressive we want to be in sales marketing.

The town is still aggressive. I don't know how Cosmo, I have no idea how that will play out. So it can be helpful obviously, doing more capacity in a already difficult market can’t be a positive for the market. How big and negative I just don't know but I think that you are going to see in 2011, that continuous promotional landscape in the casino segment because the cash side is not holding up strong, so more people turn to spot and tail marketing as a way to fill rooms. We try to cut back and we try to play to our peer group which we think is Wynn and Bellagio and the better hotel casinos that we felt can offer you products. But we are getting competitive by anyone’s definition, a lot more so than it was in 2008.

And I don’t know how that gets any better with additional capacity. It’s going to get worse in my opinion.

Rachel Rothman - SIG

On the gaming side, is it getting more promotional? Are more promotional chips being offered, or is it just predominantly on the room rate side?

Mike Leven

No I think it is on gaming side as well because of lack of men in cash segment people are looking to fill the rooms up right, so they are going to look for the gaming side and dropped your requirements for complementary rooms and discounted rooms and promotional giveaways, the tournaments, et cetera. There are a lot most we got there at all segments on the casino side as alternatives that we cash market. So I think if anything has gotten worse and this summer was difficult summer promotions and the competition is fierce.

Rachel Rothman - SIG

So as we think about modeling next year in gaming revenue, would the pace of promotions have an impact on what we should think as the theoretical hold and would it be lower than it had been historically because of the increased promotional environment?

Rob Goldstein

I don’t think it holds impact by the way. On the table games side, it is not a hold issue nor or the slot machines as far as promotion giveaways. We are going to cut back on offers and be more judicious I think and hope that we can grow more business on room and in cash segments. We are hoping InterContinental deals, we are hoping better OTA approach and also the strong group business.

But all set on the promotional side, as Sheldon alluded to early in call, he alluded to the difficulties of chasing market share and I think that’s part of the problem. As you chase market share, the margins flip and this adds more pressure. So this probably will reduce our gaming losses and keep our revenues there. On the table game side, honestly it's driven primarily by Asian business anyway. Our high-end business gets more important everyday towards as a mix, percentage mix on the table game side. On the slot side we are going to reduce our offer somewhat and be more judicious and hope to flow more into the cash side.

Sheldon G. Adelson

Personally I am reverse to this kind of promotion and I think that this is the time we can convert that into other paying customers rather than giving too many of these giveaway packages. I think that it diminishes our brand and I don’t think it does much for us except put people in rooms. I remember Steve Wynn, our friend, said that he decided to try to fill up his room. So, he said but every time people who stayed in his room, they went to down to the bars and to the restaurants and they got sticker shock.

And they went over to other places where they’ve previously been, the lower end place, the budget places and bought their food and did their playing over there. So I unusually so agree with him and I think it doesn’t really do and spend much good. I’ve cut it down to 15% and I am now probably today, tomorrow going to cut it down to a maximum of 10% and there is got to be certain high limit. There’s got to be certain higher threshold for anybody to qualify.

Operator

And your next question is from the line of Cameron McKnight with Buckingham Research.

Cameron McKnight - Buckingham Research

Good afternoon and thanks. Sheldon, on Japan, do you have any sense of what the market structure that could be on the table may look like?

Sheldon G. Adelson

10, the market structure.

Rob Goldstein

In Japan what the market structure might look like.

Sheldon G. Adelson

In what respect.

Cameron McKnight - Buckingham Research Group

In terms of number of concessionaires, whether a partner would be required, tax rate.

Sheldon G. Adelson

Right now they were talking about three, but now they are focusing on two, Tokyo and Osaka. We believe that we've got our leg up because, number one I know that everybody was talking about another competitor of us had $1.2 million of free cash. I would like to say we have 3.2 billion in cash and excess were up to 6 billion. So we could do almost anything buy any company, go develop any properties. We are considered the leading contender because of the integrated resort model, both Macau and Singapore in that part of the world. And we are very, very excited about Japan. I keep going there every few weeks and meeting with the decision makers.

And we are also focusing on Korea. I might say that while we are talking right now one of our development people has just finished a few days in Korea and he is flying to a gaming investment meeting in Japan and Tokyo. So we are very optimistic. You know, they have Pachinko parlors there, but they don't want to recognize that those are really casinos. And they have other forms of gaming like a boat racing, horse racing , I believe football betting, soccer betting and lotteries. So it’s not as though they aren’t familiar with wagering, they are quire familiar with wagering. They still have about 12 or 13000 pachinko parlors and most of those are like what we could call slot parlors.

Operator

And you next question is from John Ou with Alpha

John Ou - Alpha

You have an additional six months of data points on Singapore. Could you share with us what is your renewed expectations on the market side? Also, I guess for argument's sake as well, what is your view on your revenue share going forward? I know your focus is on EBITDA, but just for argument's sake, where do you think…

Sheldon G. Adelson

Market share in terms of gross revenue or money we can put in the bank

John Ou - Alpha

Gross revenue

Sheldon G. Adelson

It’s tough to say, but I think our market share will be at least equal. We are focusing on the high end on the market, I believe more so than what Kenting is, Kenting is doing a very good job at the mass end by the way, but it’s just not experience in granting credit and they really want junket reps and they are sponsoring a number of them. As I said earlier it’s difficult to say, I don’t want to my foot in my mouth and get into the trouble, about the future it is true that I am seeing the upside potential for us for more than 3 billion and that was only in 2011, so when we move to 2012 I see that with the major contribution from Singapore we could be hitting 2 billion in 2012 in Singapore.

So it’s very difficult to say, as I said earlier we are sailing in uncharted waters. I personally believe that we have little baskets of the whole cornucopia of the perspective players coming from many, many different countries and we are not going to be affected like somebody mentioned currency I think before. They are dealing in so many currencies that I don't think if China really loosens up their currency or tightens up their currency that they would allow it to float. I don't think it’s going to have much meaning. It will have a big meaning in Macau and of course we are all in favor of that, but I don't think it’s going to have much of a meaning in Singapore because the business comes from too many countries.

John Ou

My other question was on your rebate and commissions. I notice that, for the third quarter, it worked out to be about 1.3%. Have we seen any trends at least in October? Again, what are your expectations going forward on that? Do you see that going up?

Mike Leven

No.

Sheldon Adelson

We hope so, we want to try to get it down. That includes the comps and a lot of those comps have to be spent with us. So we get part of it back. It’s one tenth of 1% comps, but I don't think it’s an average of 1.3. I think it’s somewhat substantially less than that. Rob, have you focused on that.

Rob Goldstein

It’s correct.

Sheldon Adelson

It’s correct.

Rob Goldstein

1.3.

Sheldon Adelson

1.3, just on the high end.

Rob Goldstein

We are all seeing the market growth to answer your question on any growth in that. It seems to be that Kenting Europe, there is a heavy raise in commissions.

Sheldon G. Adelson

We only anticipated commission war between us and Kenting. And if we do we intend to lose.

John Ou - Alpha

All right. Just my final question, just on the mass market, could you give us some color on the average daily foot traffic, if you have that number, and also roughly what is the percentage of local Singapore as your business, either from a foot traffic percentage or even from a revenue percentage, if you can just break that down for us?

Rob Goldstein

Towards the percentage of Singapore and (inaudible) casino is about 38%.

Sheldon G. Adelson

38% and we are averaging about 22 to 24,000 people a day. Am I correct there Dan? Yes, Dan put some box shots in front of me and took my attention away but I recollect of we are under 25. Well movie most recent moving full week period is 25000 people.

John Ou - Alpha

Okay, what about the percentage of revenue coming from the local market?

Sheldon G. Adelson

38%.

Rob Goldstein

The percent of revenue by first and we don’t, we don’t have at this time between Singapore and the non-Singaporean in the math. That maybe something we can get in the future, but today we don’t have any of that.

Sheldon G. Adelson

It’s interesting we are getting two thirds of attendance from the non-Singaporean. So they are coming from somewhere. I would suspect that we are getting there a 36 or 38000 hotel rooms, and they are pretty good hotels in, there are no club houses that I know of in Singapore, they are all pretty good, a lot of brand, international brandings. They and then some of them have multiple hotels. I think that we get a lot of those people that come over by cab or any other way from these other properties because almost two third of the attendance are coming far end.

And we are not brining in a lot of the far ends from Malaysia. Now they could be coming to us, but we still don’t have a lot of that, but we have some buses, but not that many up and running. So I think we are getting a lot and we will be getting more and more turn there. In January I believe we have the V Oscar equivalent awards from India, January 14th and if we have that and really when we had the IFA the Indian International, IIFA whatever. The equivalent, another equivalent. They have three or four Oscar type award programs. Zee is one of them. We are getting Zee, we’ll get tremendous publicity all over India, I think that will be a big boost for India.

John Ou - Alpha

Thinking ahead, how should I be thinking about what you're going to be doing with the cash that you'll be generating out of Singapore? It seems like, at the rate that EBITDA is chalking up, it's going to be very good. Will you be looking to speed up the debt repayment, or would you be looking at potentially, say, paying a special dividend at some point back to the parent company? Could you share with us, may be looking forward, what would you do?

Sheldon G. Adelson

We will do one from each call. We’ll look to pass our debt, bear in mind that our retail is ramping up. If and when it ramps to the point I say when really. It ramps at a point we expect it to, we could sell that and get more money than what we need to pay off all the financing. So as far as I am concerned in my own mind, we are all but paid off, it’s all over, but they are shouting about having the capacity to pay it off and at a billion-plus in EBITDA there is a lot of cash flow they could pay off in just in very short period of time, 3.5 billion. By the way we always talk in US dollars, we are not talking in local currency.

Operator

Your next question is from the line Chris Woronka with Deutsche Bank.

Chris Woronka - Deutsche Bank

Hey, good afternoon guys. I don't think anyone asked about the margins of Venetian in Macau. Is there any kind of notional limit there or target you have? You set another record this quarter. Just kind of thinking going forward what are some of the expense issues and where can that go with similar levels of gaming growth?

Sheldon G. Adelson

Listen, we resigned ourselves to dealing with the junket reps. We have good relationship with them. I had lunch with several of them. It is okay. They are doing a good job in Macau and that’s where we are at, but problem that we have is that [SJ] and it’s rumored that MGM is going to do it. They are going to start leasing out just to get the high end, the top line market share that they are going to give out 3% of the gross income for the sub licenses. Well that’s amazing and people are talking about whether conjunctionally or factually or whatever they are talking about gross income.

What the heck does the gross income means when you all you have taken is 3% out of the gross income. I don’t know how far we can get, bear in the mind they are still talking about the possibility of the government lowering the tax rate in Macau and as Singapore gets goes up, I could say there is business coming, a lot of business coming from Hong Kong and China.

You know they are not the dominant countries, Malaysia and Indonesia are the dominant countries and Singapore, but as Singapore does more and more business and it’s all over the clippings that it is projected now by 2012 that we will pass our Las Vegas trip in terms of gross income, in terms of revenue. So in Macau, because of the tax rate I don’t know how much higher we can get, but I mean just take, seat-of-the-pant’s estimate I don think we surpass 38 or 40%. Do you Rob, Mike do you think so.

No I don’t think so. We’d have to really, really, although we have set several records in October, Golden Week, our moving average is about where it should it be. Some months will have a high end number, sometime a higher whole number, some months the lower whole number at a moving average just the way it should be. So I don’t where we want to go on EBITDA margin. Like we said we are doing the best we can. We are trying to reduce expenses not only in total number of employees, we are trying to reduce outside expenses. We are just about a hiring a new General Counsel over there extraordinarily so we can keep some of our Hong Kong legal expenses down. We are taking every step we can to get our customer.

Operator

Your next question is from David Bain with Sterne Agee.

David Bain - Sterne Agee

On Singapore, can you give us a sense as to what percentage of room nights in '11 and '12 may be MICE? If you could also maybe an idea of weekday occupancy versus weekend at MBS?

Mike Leven

We will be in the high 90s or mid to high 90s on weekends in MBS relying those occupancies now. Hopefully mid-week occupancy would get into the 80s at least in 2011 better than that perhaps in 2012 because of the MICE ramp up. I don't have the MICE roommate situation for 2011 and 2012 in front of me at the moment, but our expectation is that we should be building up to roughly 300,000 roommates a year on MICE business. As we get ramped up probably 2012, we will get that, probably we will be lower than that in 2011. The forward bookings are we are only starting to really get the credibility now and if you split the building up into various segments, your tour business should be in the 700s, MICE business in the 1000s and then you've got 400 to 500 casino businesses and the rest is transient. I mean that's basically an overall look at it. And that's our target to get to an occupancy that runs in the 90s.

2012 will be a very interesting year because I think 2012 is where the retail business will really start to move dramatically because the subway system will open that runs right into the retail area. We are working on some other transportation mechanisms now to get people in there to drive that up as well. So I think by the time 2012 we should be in a situation where you are getting maximum out of the total facility not counting the casino of course which will continue to grow.

David Bain - Sterne Agee

Then just two more, one on the metrics in October, given very strong for Singapore, obviously. I know there's no official Golden Week in Singapore, but did you see an unusual increase in the IP volume maybe from mainland China? Has there been any falloff since a holiday ended?

Mike Leven

We did get significantly more play in the Golden Week period. I can’t tell you for sure whether it’s the Mainland China, but it was a better play, but October has been very strong all the way through, but not quite as strong as those two or three days. Those two or three days, due to the same days in Macau was still off the chart in terms of room as well as mass. But we have had very steady play all the way through October.

David Bain - Sterne Agee

We saw kind of the visitation volume and percentage year-over-year in Macau. It dipped in September. I know the revenue is good, so the quality of customer must have been good. But I'm just trying to figure that out. I mean, I know Moon Festival fell into September versus last year it didn't. Maybe that's a family holiday. I know it's back-to-school season. But is there anything you guys have seen or something to look out for going forward in visitation?

Mike Leven

I saw that number yesterday about the September drop in visitation if it dropped we didn’t really feel it. I mean we had a very good September and I don’t remember what last September really was about. I think often times there is a drop before Golden Week, people don’t come in they wait for the Golden Week period to come in which is in October obviously. I looked at it, it was a strange number to me. I didn’t hear anything from our people over there nor had we discussed it here because frankly the business was so good we didn’t really pay much attention to that.

David Bain - Sterne Agee

And then I'm sure just looking at where you guys were in terms of room rates, October visitation looks like it was back to normal form in a way.

Mike Leven

So far. We still have five days ago.

Sheldon G. Adelson

I think you were right on Singapore not having more than official Chinese New Year, but we did get an increase in business over that period and we did get a number of customers from China but not as the same percentage of Macau. However, is very good and we have no complaints about it.

Operator

And your next question is from Dennis Forst with KeyBanc.

Dennis Forst - KeyBanc

I wanted you to ask Ken for capitalized interest in the quarter and what is it going to look like going forward?

Ken Kay

Call me and I can give you the specifics on that. I don’t have that in front of me but I can walk you through that.

Dennis Forst - KeyBanc

Then next same thing on depreciation, I noticed that the Marina Bay Sands depreciation in the quarter was about $45 million. That was well below what I thought it would be, given the size of the project. Is that a fair number going forward or is there going to be some adjustments by the end of the year?

Ken Kay

No. That should be reflective of a full quarter of depreciation, and I would think as the continued construction spend takes place and we’ve got probably another $250 million spend through the end of this year to about $600 million of retainage payment that will go through next year. We will see that number creep up based upon the total capitalized costs.

Dennis Forst - KeyBanc

Okay, but it's not going to go up hugely from here? That is pretty much hit on the first, $5 billion of investment?

Ken Kay

Well a little bit less then that, but yes.

Sheldon G. Adelson

We cannot depreciate close to a million dollars of land. If we have a flood, we could lose [7k]

Dennis Forst - KeyBanc

At the Marina Bay, what was the number of Rolling tables and Non-Rolling tables? If you could break those down?

Sheldon G. Adelson

We’ve get about a 110 versus over 500, so it’s about 1/6th of the total table count

Dennis Forst - KeyBanc

Okay. And then Sheldon, can you clarify at the beginning you were talking very fast about how strong October was in the Marina Bay Sands. EBITDA growth rate or EBITDA in dollars is running what right now?

Sheldon G. Adelson

We are at just about 50% EBITDA margin. Growth of September to October I think I said I said 21% from September to October.

Rob Goldstein

The number that missed out were the gross gaming revenue at Marina Bay Sands was up a 126% since May reaching $8.4 million per day in October, and that’s an annualized rate of $3.1 billion.

Dennis Forst - KeyBanc

Okay, 8.3 per day.

Rob Goldstein

8.4 per day, $3.1 billion annualized.

Dennis Forst - KeyBanc

Okay. Then I got the roll and the mass Wynn, the Handle, On Las Vegas, Rob said that the room rate next year is going to be in the $180, $190 range. Is that up from this year? What does the group side look this year in terms of rate?

Sheldon G. Adelson

About flat, give or take it’s not that moving away. There is no much moving in the whole group of segment 12 months and (inaudible) 12 months?

Dennis Forst - KeyBanc

So somewhere around $180 for '09, '10 and 2011?

Rob Goldstein

I can’t speak of 2009, but 2010 and 2011 we will be 18 and 190.

Sheldon G. Adelson

Not overall, just the group segment.

Dennis Forst - KeyBanc

Also, Rob, the second-quarter call, you mentioned that retail sales I think the Canal Shoppes in June were up 56% above June of '09. Can you give us an idea of how that business was in the third quarter?

Rob Goldstein

I didn’t refer that we don’t own them all.

Sheldon G. Adelson

I think he is referring to Macau.

Ken Kay

This is something that just Mike actually said in the last call. We are talking about June in Macau, the grand Canal Shoppes.

Rob Goldstein

Are you in Macau Dennis or are you here?

Dennis Forst - KeyBanc

No Macau.

Mike Even

Yeah weekend rate in Macau are in up. In fact we are basically pretty close to signing an increase in our retail space from DSS in the Four Seasons mall for another I think it’s 50,000 feet. Because sales are very brisk they are up considerably Macau. We did change some of our rental percentages and rental situations during the drop in Macau a year or two ago, but now it started to come back pretty strongly for us.

Sheldon G. Adelson

In the third quarter.

Rob Goldstein

Just quarter-over-quarter basis the annualized sales per square foot are up about 25%.

Dennis Forst - KeyBanc

Third quarter year-over-year.

Ken Kay

Yes.

Dennis Forst - KeyBanc

Then what about the direct VIP business in Macau? What percentage of your role is from direct play?

Ken Kay

It's about a quarter? A third? What is it? Round the same as the last quarter.

Dennis Forst - KeyBanc

Okay. And which is about 25…

Sheldon G. Adelson

This is a process that a former CEO did, that's Steve Jacobs. We are not in agreement with that. We believe that junket reps own the market in Macau. It diminishes our relationship and the value of our relationship with the junket reps. So we are not proactively looking for direct business and we still don't know how much it cost us in credit defaults et cetera., et cetera. Clearly there's a lot more churning business in Macau from Mainland China, than there is in Singapore. So it's more precarious for us to issue credit to China. And unlimited amount of credit to China so I think we are going to keep, we are hoping to keep the direct business where it is. I think it’s somewhere between about 25% to 30% and we are going to try to keep it even at that.

Dennis Forst - KeyBanc

Okay, last question, the Wynn percentage in Las Vegas was a pretty similar between the Venetian and the Palazzo.

Rob Goldstein

Cumulatively you see the numbers were 17.1 and it cost us [$90] million.

Ken Kay

We don’t present them together.

Rob Goldstein

We present them unified and obviously if you look at the volume play in Las Vegas will be recipient of a lot of help from our casinos in Asia. Unfortunately plain lucky about 4.5 points against norm. So it cost us $19 million. It doesn’t really matter unless you lose table (inaudible) playing in the Venetian Plaza, we treat them equally.

Ken Kay

And the capitalized interest numbers are around $32 million for this quarter.

Dennis Forst - KeyBanc

Okay and is it going up, Ken?

Ken Kay

It will go up because of the construction of Macau.

Dennis Forst - KeyBanc

Yes. So it will go up probably right through the fourth quarter of next year?

Ken Kay

Correct.

Operator

At this time I would like to turn the call back over to Mr. Mike Leven, President of Las Vegas Sands.

Mike Even

Thank you operator and thanks to all of you again for your questions and your interest today. Just a couple of quick comments from me before I turn it back to Sheldon for final thoughts. First I want to mention that the focus on our cost control and efficiency that we emphasize over the last two years continues in the future. You can be certain we will continue to watch our cost as we go forward even as we turn attention increasingly towards revenue growth in all of our outlets. Secondly I want all to know that we have been working very hard over the last two years to broaden and deepen the management team and to build the right management infrastructure that will allow the company to make prudent management decisions and to achieve even greater levels of performance in the years ahead. We want to prepare ourselves to repeat our common success in additional emerging gaming jurisdictions. Now let me turn it over to Sheldon for final thoughts.

Sheldon G. Adelson

Thanks Mike, we just completed another outstanding quarter generating record revenues and EBITDA in Macau and outstanding first full quarter of operations from Marina Bay Sands in Singapore and record revenues and EBITDA for the company overall. From my perspective, our operations are in outstanding shape and we have clearly as the Macau Publication stated separated our sales from the pack. We have never in the history of our company been in better position to deliver strong growth in the future. We have also significantly reduced our debt levels and our balance sheet has over 3 billion of cash, I think it’s 3.2 billion providing significant financial flexibility and enabling us to continue our industry leading growth strategy. We will have upto 6 billion if we included our unused revolvers, I believe. Am I correct on that, Ken?

Ken Kay

Just a hair under that, but yes.

Sheldon G. Adelson

A hair under 6 billion. We couldn’t be more enthused about our business today, and about a strong positioning for the future with the quality of the assets that we have that have seen a bump, we have seen a thrust upward and particularly the uncovering of the an untouched market in Southeast for Singapore. I want to thank all of your for joining us. We sincerely appreciate your interest and the support of our shareholders. That’s the end of our call. Thank you very much, good bye.

Operator

Thank you. This does conclude today’s conference call. You may now disconnect.

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