Las Vegas Sands Q4 Earnings Call Transcript

123jump.com Staff
23 Feb, 2010
New York City

The casino operator revenue rose 17.5% to $1.28 billion in the quarter. Net loss narrowed 16.5% to $113.9 million boosted by increase in casino revenues and lower expenses. The company lost 17 cents per share compared to a loss of 27 cents per share the prior-year quarter.

Las Vegas Sands Corp. ((LVS))
Q4 2009 Earnings Call Transcript
February 17, 2010 4:30 p.m. ET

Executives

Daniel Briggs - Vice President, Investor Relations
Sheldon G. Adelson - Chairman and Chief Executive Officer
Michael A. Leven - President and Chief Operating Officer
Robert G. Goldstein - Executive Vice President and President, Venetian Casino Resort, LLC
Kenneth J. Kay - Senior Vice President and Chief Financial Officer
Steven Jacobs - Chief Executive Officer, Sands China Limited
Thomas Arasi - Chief Executive Officer, Singapore

Analysts

Joseph Greff - J.P. Morgan
Felicia Hendrix - Barclays Capital
Cameron Mcknight - Buckingham Financial Group
Larry Klatzkin - Chapdelaine Credit Partners
Janet Brashear - Sanford C. Bernstein & Company
David Bain - Sterne, Agee & Leach
Dennis Forst - KeyBanc Capital Markets
Robin Farley - UBS
Chris Woronka - Deutsche Bank

Presentation

Operator

Good afternoon. My name is Kerry and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Las Vegas Sands Corporation''s Fourth Quarter and Year End 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. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key.

I would like to turn the call over to Mr. Dan Briggs, Vice President of Investor Relations. Thank you. Mr. Briggs, you may begin your conference.

Daniel Briggs

Thank you, operator and good afternoon, everyone and thank you for joining us today. On the call with me today are Mr. Sheldon G. Adelson, our Chairman and Chief Executive Officer, Mike Leven, our President and Chief Operating Officer, Rob Goldstein, Executive Vice President and President of the Venetian and Palazzo, Las Vegas, Ken Kay, our CFO, Steve Jacobs, CEO of Sands China Limited and Tom Arasi, CEO of Marina Bay Sands.

Before we begin, I need to remind you that today''s conference call will contain forward-looking statements that we are making under the Safe Harbor Provisions of 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 a discussion of risks that may affect our results. In addition, we may discuss adjusted EBITDA, adjusted net income, adjusted diluted EPS and adjusted property EBITDAR 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.

I will now turn the call over to Mr. Adelson.

Sheldon G. Adelson

Thanks, Dan. Good afternoon. Thank you all for joining us today. I will begin the call today by sharing a few general thoughts on the quarter. I will then hand the call over to Mike and the team to provide some additional detail.

In Macau, I''m pleased to report that we generated more EBITDAR from our three properties during the fourth quarter of 2009 than in any other quarter in the company''s history. We continue to lead the Macau market in this most important measure of financial performance. Notwithstanding the often quoted gross gaming market share figures, we firmly believe that EBITDAR is the appropriate measure of overall financial performance and that that growth in this metric, along with increasing returns on net invested capital will translate directly into shareholder value.

Total net revenue at our three properties did increase 25% compared to last year''s fourth quarter, but most importantly, adjusted property EBITDAR increased a whopping 48% across our portfolio of properties in Macau.

At the Venetian Macau, EBITDAR for the quarter was a record $175 million, an increase of over 55% compared to last year''s fourth quarter. EBITDAR margin increased to 30.6%, another quarterly record. The Four Seasons Hotel Macau and Plaza Casino also had its best quarter yet. The strength of our business model in Macau is clearly on display in our quarterly results.

Our focus on the highly profitable mass gaming hotel and retail businesses together with our attention and cost structure and efficiency has allowed us to grow our EBITDAR faster than others in the market that rely more heavily on lower margin segments for growth.

A strong quarterly performance provides momentum as we resume the construction process on our largest Cotai Strip development today, Parcels 5 and 6 directly across the Cotai Strip from the Venetian Macao and Four Seasons Hotel Macao. We like to call that development the game-changer because we believe the addition to the Cotai Strip of a development of that scale at 13.3 million square feet together with its resident cornucopia of world-class attractions in the Manatees [ph] will change the dynamic of Macao quite dramatically.

The first phase of the development featuring 3,700 hotel rooms from the Shangri-La, Traders, Sheraton brands will open in June 2011, around 16 months from today. The second phase of the development will open approximately six months thereafter and will feature an additional 2,300 rooms from the Sheraton Towers brand, totaling 6,000 keys.

We are confident that the addition of our latest integrated resort development will both enhance Macau''s appeal as a tourism and MICE destination and extend our position as the leading mass market operator in Macau.

Also during the quarter, we completed the sale of a minority interest on our Macau operations, so the listing of Sands China Limited on the Hong Kong stock exchange. SCL now trades in Hong Kong under listing code 1928, must have been a good year.

We are pleased to both increase our cash reserves to just under $5 billion of unrestricted cash on our balance sheet and to offer Asian and other investors the opportunity to participate in the future growth in Macau through Sands China Limited.

Turning to our Marina Bay Sands development in Singapore, we are now entering the final stages of our pre-opening activities and expect to announce the specific April opening date next week. SB in Singapore opened last Sunday an early indications are that our activity is brisk and robust. This contributes to our enthusiasm about the property’s potential to generate both significant growth and strong returns. We look forward to introduce this iconic destination resort to the world in about 10 weeks and to formally celebrating its debut with the people of Singapore in a grand opening celebration in June.

Finally, let me spend a moment on Las Vegas. The good news is that group business is returning. In fact, our group business was up 20% in the first 40 days of 2010 compared to last year.

Forward bookings were also increasing for both 2010 and 2011. Two things, the Venetian and The Palazzo was purposefully built to serve this customer segment and with two in a quarter mainly with exhibition and meeting space as well as 7,100 all suite rooms and Marriott dining and entertainment amenities. We believe we are extremely well positioned to benefit as the recovery in the group business sector continues. So, overall from my perspective, I am extremely pleased with both our performance today and our positioning for the future.

I’ll now turn the call over to Mike.

Michael A. Leven

Thank you, Sheldon. I will add just a couple of big picture points, because I think the results pretty much speak for themselves and we want to allow plenty of time for your questions. Our operating results clearly reflect our right sizing and efficiency initiatives. We have eliminated over $500 million of costs from our expense base.

We''re working hard to make sure that a culture of efficiency and a focus on cost control will be among the most important pillars of our future success. Our strong results in Macau reflect both our focus on efficiency and a healthy gaming market.

The Venetian Macau remains the clear market leader in mass play in Macau delivering non-rolling drops of $905 million on a record slot handle of $659 million for the quarter. We strongly believe that the development of critical mass on the Cotai Strip including the City of Dreams as well as Galaxy''s planned property on Cotai and our development Parcels 5 and 6 can not only expand the market, driving greater mass play as well as greater hotel and retail revenues to our current and future properties, but also will contribute to the maturation process of the Cotai Strip and its evolution as Asia''s premier business and leisure destination. Cash flow generation at the Venetian Macau continues to mirror our strategy.

For every dollar of EBITDA generated at the property during the quarter, approximately 49% was produced by less volatile, higher margin mass gaming and slot play. Approximately 26% was generated from non-gaming areas including our hotel, convention, banquet and retail operations and approximately 25% was contributed by the more variable lower margin VIP rolling play.

We remain focused on developing and growing our premium direct business which is the higher margin segment of VIP rolling play. The direct VIP play at the Venetian Macau grew to $1.7 billion or approximately 17% of the more than $10 billion of rolling volume during the quarter.

At the Four Seasons Hotel Macau and Plaza Casino which is clearly benefiting from our 19 Paiza mansions rolling volume grew impressively to $3.8 billion while direct VIP business accounted for $1.1 billion or 29% of that amount.

Let me spend a moment on the Sands Hotel. The Sands Macao EBITDA increased 8% to $56 million for the quarter reflecting healthy gaming volumes and the execution of the right-sizing and efficiency programs. Our flow through the EBITDA was less pronounced at the Sands this quarter because of approximately $12 million of high reserves for receivables primarily relating to one long-time player.

The Sands remains a market leader in mass play on the Peninsula delivering non-rolling drop of $579 million and a record slot handle of over $352 million, an increase of nearly 40% compared to the fourth quarter of 2008. Rolling volume of $6.6 million was the highest of the property since the third quarter of 2008. The operating momentum of our Macao properties continued in January of this year with strong year-over-year growth despite the fact that Chinese New Year fell in January last year. So that covers Macao.

Let me spend a moment on Sands Bethlehem before Rob covers Las Vegas. Historically, it has taken about 17 months on average the slot parlors in Pennsylvania to complete their initial ramp-up. Since we only opened the property in May of last year, it clearly remains early days of Sands Bethlehem. We continue to believe the property has great potential, particularly given the introduction of table games in the Pennsylvania market which will occur later this year.

With respect to our current performance, we generated $6 million of EBITDA for the quarter. We look to improve that performance in the near term to enhance marketing programs. We are also resuming that development strategy in light of the introduction of table games and are preparing to submit our applications to install table games at Sands Bethlehem with the Pennsylvania gaming control business.

We expect to introduce approximately 80 tables to the property in the third quarter. The table games offering should enable us with a broader custom segments, enhance our revenues and should contribute to great profitability of property overall.

With that, let''s go to Rob in Las Vegas.

Robert G. Goldstein

Thanks, Mike. The Las Vegas properties delivered EBITDA of $57 million in the fourth quarter compared to $90 million in the fourth quarter of last year. In a nutshell, the game piece of our business is holding up pretty well, in fact the volume levels today are trending above what they were in 2008. The problem for us and for all Las Vegas remains room rates.

Decreased hotel, food and beverage revenues is still the high margin segments of our Las Vegas business for our profitability in this quarter. In addition, low table hold also negatively impact our results by our $20 million.

Table game drop was $509 million from the fourth quarter, a modest increase in the fourth quarter of 2008 while slot one was $51 million for the quarter, about the same as 2008 fourth quarter.

Our January performance in Las Vegas is quite healthy compared to last year, principally due to revenue growth and continued impact of our right-sizing initiatives. ADR for the month reflected a slight increase from last year, that''s particularly promising result given last year’s ADR in January included some room blocks having booked at a higher pricing levels existed before the economic downturn.

Looking ahead, we will clearly realize more group rooms in 2010 than we realized in 2009. The pace of group bookings continues to improve and all signs indicate 2011 will be stronger than 2010.

In 2009, we realized approximately 478,000 group room nights as of today we have more than that number on our books for 2010. In the month of January, we realized approximately 64,000 group room up 17% from 55,000 group room nights in 2009.

As Sheldon mentioned in his comments, we do expect that pricing will turn around and business expansion and economy eventually strengthen. Until then, we will continue to focus on providing service to our business customers and work to ensure that our all suite integrated resort offerings remains the most attractive destination for business in the Las Vegas market.

So in summary, our gaming business is relatively healthy with volumes turning above 2008 levels and our costs are down. Given that backdrop, we are confident that Los Vegas properties will exhibit significant operating leverage as pricing in the group’s business segment proves.

With that, I will turn it to over to Ken.

Kenneth J. Kay

Thanks, Rob. As Sheldon mentioned earlier, during the quarter, we completed the sale of a minority interest in our Macau operations. We also made marked progress on our de-leveraging strategy and mitigated the financial risk associated with covenant compliance on our credit facilities. We now have in excess of $5 billion of cash and cash equivalents on our balance sheet.

That cash has significantly increased our financial flexibility and will enable us to execute additional components of our de-leveraging strategy in the future. Excluding our development financing in Singapore, we have paid down or retired in excess of $1.1 billion of debt during the quarter.

In addition to our cash balances at December 31, we have approximately $850 million of availability under our undrawn credit facilities at current exchange rates, principally through our Singapore credit facility. So together, we have approximately $5.85 billion of cash, cash equivalents and available sources of liquidity.

The principal uses for that $5.85 billion include approximately $1.5 billion of capital expenditures, pre-opening FF&E and construction period interest to spend of our Marina Bay Sands development in Singapore through the end of calendar 2010. An additional $400 million principally retained its payments on the development will be paid out of cash flow from the completed property in 2011.

Further, approximately $400 million in additional equity contributions will be made toward the development of Parcels 5 and 6 on the Cotai Strip in Macao. In addition, in March, we expect to close the previously announced $1.75 billion credit facility to fund construction of Parcels 5 and 6 in Macao. The equity and project financing is sufficient to complete the first two phases of that development which will features over 6,000 hotel rooms and all the major cash flow generating components of the development.

As of December 31, total debt was $11 billion while our cost of borrowing remains low. Our weighted average interest rate for the quarter was approximately 4% compared to 6.1% in the fourth quarter of 2008. At our current levels of operating performance, our cash balances provide ample cushion for compliance [inaudible] group covenant compliance purposes at December 31, 2009, our trailing 12 months EBITDA was $412 million, our total gross domestic debt was $5.2 billion, our cash balances up in the U.S. restricted group were $3 billion and our calculated net debt was $2.2 billion. Our leverage ratio was 5.3 times compared to a maximum leverage covenant under our U.S. credit facility of 6.5 times.

For the Venetian Macao restricted group at December 31, 2009, our trailing 12-months EBITDA for compliance purposes was $940 million. Total gross debt at the Venetian Macao restricted group was $2.6 billion and our leverage ratio was 2.81 times compared to a maximum leverage covenant of 4.5 times. We remained focus on maximizing operating profitability to enable debt reduction while our business will naturally generate a significant amount of free cash flow that will enable de-leveraging in the future. We also expect to execute in due course the sale of non-core assets which will enable significant debt repayments and enhance return on investments.

With that, I will turn the call back over to Sheldon.

Sheldon G. Adelson

Thanks, Ken. Before we go to Q&A, let me make a couple of final points. We worked very aggressively over the last year to right size our cost structure and to clean up our balance sheet. The results of those efforts are now clear. We just completed the most successful quarter in our history, generating record revenues and EBITDAR.

And our balance sheet now has more than $5 billion of cash, providing significant financial flexibility, enabling to us continue our industry leading growth strategy. We stand today on the cusp of our next major phase of firm growth. In about ten weeks, Marina Bay Sands will open its doors to the public, introducing to the people of South Asia convention based integrated resort destination that will be unique in the world.

And less than 18 months from today, we will open additional integrated resort destinations on Parcels 5 and 6 on Macau''s Cotai Strip, including the Shangri-la Traders Sheraton and extend the Sheraton brands, in extending our position in the world''s largest gaming market on the doorstep of the world''s fastest growing major economy. And while the Las Vegas market may not shine quite as brightly as our Asian properties, in the near term, our convention based business model remains compelling and we remain confident that our group business strategy together with our reduced cost base will enable us to perform well in Las Vegas in the years ahead, particularly in comparison with our competitors.

With that, we will move to your questions.

Question-and-Answer Session

Operator

At this time I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We’ll pause for just a moment to compile the Q&A roster. And your first question comes from Joe Greff with J.P. Morgan.

Joseph Greff - J.P. Morgan

Good afternoon, everyone. Thank you, Mike, for clarifying about the Sands Macau reserve being largely one longtime customer. Can you help us understand and if you could do it by property, if you want to do for Macau in the aggregate at the end of the fourth quarter, what sort of outstanding receivables you have out there and what''s reserved against that and if you can talk about sort of collections history in general? Obviously, we''re all reading calls about China tightening is how concerned are you that you''re adequately reserved?

And then the second Macau related question, if you can help us understand what percentage of your VIP junket related business is on a revenue share basis? And then where are you on a percentage of revenues relative to what you think the market or where the market is right now?

Sheldon G. Adelson

That''s about ten questions.

Joseph Greff - J.P. Morgan

I have a couple of more to add to that.

Michael A. Leven

Let me address the receivables.

Sheldon G. Adelson

Joe, the memory is first thing to go. I can''t remember all those questions.

Michael A. Leven

Second. Let me address the receivables and then Steve will take the rest of it. At the end of the year, I mean, you got to break down the total receivables between Casino hotels and other, but I think where your focus is more on Casino, we got about let’s call, $440 million approximately of receivables. We have about 22% reserve for doubtful accounts against that total account of about 20% or so. Now a little bit higher than Las Vegas about 28%. But in Macao, you’ve got to break it out between kind of the junkets and non-junkets. So if you back out the junkets portion of account receivables which is a fairly modest reserve against that, reserve against the remaining receivables balance is about 32% which we think is adequate. And part of, I think, what went on during the course of 2009 was a little bit of catch up with regard to some of the slower paying accounts and thus approaching it more conservatively in that regard.

Steven Jacobs

Joe, I think the second part of your question was what percentage of the junkets have switched over to revenue share versus the volume base. We had 19 contracts that were up for renewal at the end of the year and of those 19, 15, 16 of those actually chose the volume based. I’ll tell you at the end of our next quarter what the actual share will be, because we’ve got a due respect month-to-month changes between the revenue base and volume base.

Joseph Greff - J.P. Morgan

Thank you.

Operator

Your next question comes from Felicia Hendrix with Barclays Capital.

Felicia Hendrix - Barclays Capital

Hi, good afternoon.

Michael A. Leven

Hi, Felicia.

Felicia Hendrix - Barclays Capital

Hi. Just a few questions for you. In Macau, some pluses and minuses in terms of holds, some places better, some places lower than that, can you -- is there a net impact you can give us so we help us through that?

Kenneth J. Kay

Sure. In the quarter, the hold impact was probably about a little bit north of $50 million that were favorable.

Felicia Hendrix - Barclays Capital

$50 million favor?

Kenneth J. Kay

Yes. Okay. [Multiple speakers]

Felicia Hendrix - Barclays Capital

Okay. And now just to go back to that bad debt. At Sands Macau, part of -- did you clarify the bad debt issue, but our margin that the rest wasn’t that unexpected so [inaudible]?

Kenneth J. Kay

We''re having a really hard time hearing you on the cell phone.

Sheldon G. Adelson

You must be moving around on a cell phone because we can''t understand, your voice is distorted.

Kenneth J. Kay

We heard something about margin degradation at the Sands Macau, can you try to restate the question?

Felicia Hendrix - Barclays Capital

Yeah. Is this better?

Kenneth J. Kay

Yes.

Felicia Hendrix - Barclays Capital

Okay. I was sitting, but now -- so what I was wondering is, as part of the differential I think what allows us a debt expense but it also fell short of expectations. I was wondering other than hold is there anything out there that would be impacting margins?

Sheldon G. Adelson

I couldn''t understand what she said.

Michael A. Leven

She''s talking about the margin impact.

Kenneth J. Kay

I think the question is the perceived degradation of the margin at Sands. Is that correct?

Felicia Hendrix - Barclays Capital

Correct.

Kenneth J. Kay

Okay. There is couple of things to going out. One, we talked about the reserve that we took for a long-time outstanding receivable, that was about $12 million. The second had to do with the incentive cost which we booked fourth quarter which is our bonus typically that is accrued quarter-to-quarter [audio gap] as we’re dig into the tail end of our fourth quarter, we went ahead and we reserve all of our bonus for the fourth quarter.

Felicia Hendrix - Barclays Capital

Okay. That''s helpful. And then just, are you guys seeing at the Venetian Macau -- City of Dreams has now started a new marketing program. Are you guys seeing any kind of impact from that at all, anything promotional coming from them?

Kenneth J. Kay

We certainly see their volume picking up which is very positive for Cotai Strip. That''s their Get Lucky campaign. You can''t miss it everywhere you go even on Do Not Disturb sign it has the get lucky which is quite clever and pretty. I don’t know how many people are getting lucky but certainly the there’s more people in their…

Michael A. Leven

Casino research university.

Kenneth J. Kay

Yeah. We will research that later. The overall, I think at Cotai from what we can tell, is going up and is going up favorable to [inaudible] to our accounts which are by no means conclusive, but rather directionally correct.

Felicia Hendrix - Barclays Capital

Okay. Thanks. Then finally…

Sheldon G. Adelson

Felicia.

Felicia Hendrix - Barclays Capital

Yes.

Sheldon G. Adelson

Felicia, I would I’d just like to clarify what Steve said before about that write-off. That was not really a really a long-term write-off. The debt started about a year ago and a long term write-off in our terms, in our terms, I mean write-off of a long-term debt would be somewhere in excess of a year. Our payments are being made on this, not as much as we would like. The man was a major, he was in a play, he was also a player but he was also a junket rep. And the amount of money that was built up was not on the basis of him playing but was as a junket rep.

So, we cut our junket rep relationship with him. He does have other assets, he has been a customer of our company and certain executives in the company for over 20 years and has always paid his debts. And we feel confident, frankly, I had a sort of warm discussion with our CFO about the necessity to take that. It was really heated, he was going to take my cane and beat him over the head but I was dissuaded from hitting him, only because he is about a foot taller than me. And so, I objected to that write-off but he claims that TW required us to write it off, TWC. And then that was an extraordinary write-off. That’s not a usual kind of write-off.

Felicia Hendrix - Barclays Capital

Understood. Thank you. Rob, in Las Vegas, are you seeing any promotional activity in gaming and play at all?

Robert G. Goldstein

Well, on the gaming side, there’s increased pressure I think on the high end on some discounting in airfare but I don’t think it''s exceptional. The problem in Las Vegas remains room rate and now I think the gaming issue really up. For us, it’s not really an issue, it’s more room rate remains in all segments that have pressure.

Felicia Hendrix - Barclays Capital

Okay. And then on that subject, obviously, a competitor is trying to build market share in the convention business. I was wondering what you guys are doing to try to maintain your market share?

Robert G. Goldstein

We''ve actually, I know that one of our competitors has been boasting about taking business from us. The bottom line is that we''ve done a calculation and we''ve taken more business from them than they have from us. And we allowed them to take some business from us because in one case there was a group of thousands of room nights that they gave an $80 less rate on the rooms than what we quoted and what we were willing to give. We gave up that group, let it go to the area wherever they went.

For one year, the group has come back and signed us at the more realistic rates for the following three years. MGM talks about stealing business us from. We take more business from them than they do from us. And the fact of the matter is that they just don''t have the experience, from having been on the other side of the desk, in dealing with conventions they don''t understand the service and the issues that have to be addressed.

So, we don''t want to buy that business. We were complimented by a competitor, with whom one of our colleagues had dinner last week and that colleague, that competitor, said that the industry recognized that we were the only one that was holding our rates up there and everybody wishes they, too, could hold their rates up. But maybe we''ll set a leadership role and perhaps they will keep their rates up.

Felicia Hendrix - Barclays Capital

Okay. Thanks a lot.

Kenneth J. Kay

Thanks, Felicia.

Operator

Your next question comes from Cameron McKnight with Buckingham.

Cameron McKnight - Buckingham Financial Group

Good afternoon, guys. How are you?

Sheldon G. Adelson

Good.

Cameron McKnight - Buckingham Financial Group

Just -- Sheldon, just wondering if you could elaborate for us on the current quarter to date conditions that you are seeing in Macau, especially in the mass market in January and February.

Sheldon G. Adelson

At first, this is a quarter. We can''t get into that because we''re public in Macau and we can''t disclose any information for January and February. Here it over, yes, when SCL hasn''t disclosed it yet.

Cameron McKnight - Buckingham Financial Group

Got it.

Sheldon G. Adelson

Good try.

Cameron Mcknight - Buckingham Financial Group

You asked me to comment generally on Chinese New Year and how…

Sheldon G. Adelson

Let''s put it this way. Over the results, we''re smiling and we''re not frowning.

Michael A. Leven

Sheldon, just put a couple things in…

Cameron McKnight - Buckingham Financial Group

I just got shocked.

Michael A. Leven

A couple things into context with regards to Macau, this isn''t our numbers, these are Macau numbers. If you look at January ''09 versus ''08, up significantly. If you look at a press clipping that came out yesterday or the day before, for the expectation for Chinese New Year, exceptionally strong. We dominate the mass market. We always have. Nothing has changed. So, as Sheldon said, we''re quite pleased with where we sit today, vis-a-vis as our expectation for Q1.

Cameron McKnight - Buckingham Financial Group

Right. Thanks. And some have been talking about a commission war erupting with SJM. Are you seeing any evidence of that?

Kenneth J. Kay

None to date, but I wouldn''t necessarily carve out SJM. With the new restrictions on the junket commission caps, you have seen, over the last, really five to six months, a fair amount of jockeying from all of the different concessionaires. The simple truth in Macau is you can buy business through commission and you can move share a point, two points, three points through changing those commission rates. But it''s not sustainable, you can''t build a business on gimmicks or on incentives, it''s got to be built on the fundamentals. So, notwithstanding the fact that from time to time some of our competitors raised their commission rates, at the end of the day it comes back to haunt them and everything settles back down to a sustainable level.

Cameron McKnight - Buckingham Financial Group

Okay. Great, thanks. And finally, Sheldon, could you give us some color on the convention calendar in Singapore? I understand you have Lee Kuan Yew speaking at a lawyers'' conference in early May.

Sheldon G. Adelson

Tom, do you have anything to say about that? Tom is the CEO of Singapore.

Thomas Arasi

Yes. Hi. We have a significant piece of group business, the IPBA coming in at that time, end of the month. And there is discussion about potential VIP speakers there. We''re not aware that anyone is absolutely confirmed, however.

Michael A. Leven

We understand that Al Gore is speaking and Lee Kuan Yew is speaking. This is Singapore?

Thomas Arasi

Yes.

Michael A. Leven

We also have another group, a bank, having a big group just a week, the following week.

Thomas Arasi

Yes. The calendar is building, particularly as we get closer to announcing opening dates, particularly as people see everything coming together. So, we''re pleased how well that''s moving along.

Cameron McKnightS - Buckingham Financial Group

Right. Thanks very much, guys.

Sheldon G. Adelson

Thanks, Cameron.

Operator

Your next question comes from Larry Klatzkin with Chapdelaine.

Larry Klatzkin - Chapdelaine Credit Partners

Hey, guys.

Sheldon G. Adelson

Hi, Larry.

Larry Klatzkin - Chapdelaine Credit Partners

Nice to see the Four Seasons starting to respond, couple of things, one, the bonus reserve, you said it all did it in the fourth quarter this year. How did that compare to what you reserved in the fourth quarter last year?

Kenneth J. Kay

There wasn''t a bonus last year.

Larry Klatzkin - Chapdelaine Credit Partners

Okay. Okay. As far as table games upside in Bethlehem, I know it''s kind of minor for you guys, but what are you guys thinking? You said eight tables?

Michael A. Leven

80.

Larry Klatzkin - Chapdelaine Credit Partners

80. Okay. I misheard there. So you think it could be a significant gain to the property?

Michael A. Leven

Well, all of the forecasts for Bethlehem at the table games which have been published by many of the analyst community is just about where we''re projecting the situation. We think that, at 80 tables appropriately run and trained and can generate the numbers that have been published.

Larry Klatzkin - Chapdelaine Credit Partners

All right.

Michael A. Leven

It should be a big impact, not only on our, not only in table games and sales but on the rest of the facility in terms of restaurants and all of that as well.

Sheldon G. Adelson

Well, we''ll be the closest casino to New York City and of course, to northern New Jersey. And as far as we can see by Atlantic City, they continue to decline. We may pick up an incremental chunk of business out of Atlantic City, too.

Larry Klatzkin - Chapdelaine Credit Partners

Okay. As far as -- that''s good. As far as the VIP commission rate and Singapore, what are you guys seeing? I know Genting has talked about high numbers. What are you guys expecting the commission rate to be, in your opinion?

Michael A. Leven

There''s commission rate and there''s commission rate, Larry, as you probably recall, from the equity days. The commission rate for a junket rep in the field which I call a field sales person is capped at a few thousand dollars, but it''s not the Macau style commission. So, the second commission rate is the Macau style commission rate for which the junket performed three functions. One, they find the customer, two, they provide the credit and three, they get the money into our venue, from where they come.
Obviously, we can''t have anything to do directly with that and we''re not going to and to the best of our knowledge, they say, Genting says, they intend to pay 1.5, but the Singapore Government continues to maintain unequivocally and when the Singapore government maintains something unequivocally, you can go to sleep on it, you can bank on it.

They say there will be no junket reps of the Macau style. They don''t want people to come in and earn 40%, 50% or more of the gross income and they, to the best of our knowledge, they have received very, very few applications, probably only applications from somebody in the former category of junket reps, not the ones who provide the credit.

So it''s still a moving target. My personal take on this is that, if there are junket reps, they will be of the former type and not because the government won''t necessarily approve them, but because they''re not going to apply. Everybody, every one of our companies'' directors that has applied, including myself, say it is the most comprehensive, the most detailed application they''ve ever had to fill out in their lifetime. So I don''t think, while I''m positive, that the junket reps in Macau are not going to provide the information that Singapore gaming control authorities want.

Larry Klatzkin - Chapdelaine Credit Partners

All right. So, you still to have give the gamblers their kind of discount. So, what do you guys think, you''re probably giving 0.7 to 0.9 to the gamblers or combination thereof, versus the 1.25 you''re giving in Singapore? Is that reasonable?

Michael A. Leven

I suspect. And all my estimates have been figured on about 0.7 to 0.75 or 0.8, direct to the players that wants to get compensated and even out the, to neutralize the house advantage a little bit

We''re going to give them the option of the Las Vegas way or the rolling chip way. So, if somebody says, well, I don''t want to do a rolling chip, so, I just want to know that if I lose, I want a discount of X%. And we''d much rather have it that way because on the roll, we to have pay win or lose. On the losses, we pay on that and we''re much better off that way, in my opinion.

Larry Klatzkin - Chapdelaine Credit Partners

So, this could actually mean maybe an extra, what, 15, 20 basis points of margin compared to Macau?

Michael A. Leven

Well, if we don''t get -- I feel that we should be getting 30 to 40 percentage -- 30 or 40 basis points, not basis points, 30% to 40% or more.

Larry Klatzkin - Chapdelaine Credit Partners

Right. Right.

Michael A. Leven

Just on the taxes alone, we''ll pick up at least 24%. And in our integrated resort model, if we make 28% or 30% and we add another 24%, never mind the savings on the junket reps, we''re at 54% of gross.

And if we pick up -- depends upon the ratio of high end versus mass, but let''s take a round number of 50/50. It''s 44% we''d save at 1.25 and let''s say we get half of that, so we would save 0.22 on the total. And if we give half of that to the player, we save about 11% which could bring this to an extraordinary EBITDAR margin. I mean, it''s so large I don''t even want to -- it sounds like blue sky, but I don''t see any reason why it can''t occur.

Sheldon G. Adelson

Larry, keep in mind that the rolling direct to the customer also, the big variable there is credit, right? It''s not just about junket reps, it''s a question of not what we pay or Genting pays, but the question is who wants to issue and collect the credit. That will determine in part what the rolling number is.

Larry Klatzkin - Chapdelaine Credit Partners

Have you guys put aside a chunk of money that you''re willing to use for credit in Singapore since it will be significant?

Michael A. Leven

Yes. In our mind we''ll be in the credit business in Singapore with credit worthy customers and the right people we can collect from in a direct fashion, yes.

Larry Klatzkin - Chapdelaine Credit Partners

Is this new ruling with win on credit collection, you think, significant?

Sheldon G. Adelson

The Hong Kong decision.

Michael A. Leven

I can only speak for Macau, but I can tell you that it has had profound impacts on your ability to get people''s attention to come back and play or pay. It was a very big watershed event for those that extend credit in Macau, the fact that you can now collect through Hong Kong.

Sheldon G. Adelson

So, it''s a big deal.

Larry Klatzkin - Chapdelaine Credit Partners

Good, guys. Thanks, I appreciate it.

Michael A. Leven

Thanks, Larry.

Sheldon G. Adelson

Larry, I want to say that we experienced between a 1% and 2% default rate here in Las Vegas. I think that my personal opinion is that if we''re judicious in our granting of credit which we''re certainly going to make an effort to be, we will experience a very low single-digit credit default rate because the Asian people are far more face sensitive if somebody tries to collect money. Particularly if you collect money from gambling, because of the stigma that it is present in their social circles and the last thing they want to do is let their government find out they''re doing this. So, I think that we''ll have a much higher collection success rate than otherwise thought.

Operator

Your next question comes from Janet Brashear with Sanford Bernstein.

Sheldon G. Adelson

Are you whistling at us, Janet?

Janet Brashear - Sanford C. Bernstein & Company

Not me. I don''t know where that''s coming from. Thank you. My question is about the rates at the Venetian and the Palazzo. We know that last year the Venetian was doing $163. The Palazzo was doing $179. And as Rob was talking about the rate pressure, I''m wondering, what would you expect for 2010?

Robert G. Goldstein

Any segment in particular? Just in general?

Janet Brashear - Sanford C. Bernstein & Company

Well, across the board. I know you have your group rates booked in largely for the year at least at the same levels as last year, but I''d be curious to know how those rates are trending and then what the overall impact is on your RevPAR?

Robert G. Goldstein

We''re trending down, relative to 2009 rates. We''re at $211 for actual group segment for the year. We''re down in the $180 range for 2010, high $170''s, low $180''s. And again, the competitive pressure is pretty relentless, I mean, to be honest with you, it''s not slowing down.

And everyone''s numbers in town, you have to factor in the segment that''s growing tremendously and that is the -- everybody in town, this is not different. Comping room is off to slot and table players at a higher rate than ever. So if you factor that in, it''s going to be a big driver of your ADR. I mean, our ADR, obviously, there''s rate pressure across the board in every segment. No one is immune to it.

I''m hoping we can maintain a better cash ADR than we''d hoped in to the past, but, look, rate pressure will determine that and the market will determine that. Every day, you can look at the e-mails. You can look at the offers out there.

There''s pressure, whether it be the casino segment, the FIT, the wholesale and you have to factor in, these days, the non cash RevPAR segment which is driven by the growing use of comped rooms in every hotel in this town.

So, I''m trying to elude you with changes every day. We''re trying to maintain rate, I think Sheldon and Mike both referenced. Our intention is to stay above the market somewhat, but group rates are slightly down and that''s a function of the marketplace. And I don''t see how that changes, until the market starts trending up.

Michael A. Leven

I want to address that, excuse me, Rob. It varies from show-to-show and event-to-event. We have the largest convention facility in the world. We have 330 meeting rooms, including ball rooms and we could hold, somewhere, in the 50,000 person category simultaneously. There''s no need for 50,000 people to sit simultaneously, but we can have overlap of smaller groups.

And so if we have a group that needs the facilities that only we could provide and nobody else can provide, we maintain the leverage on the room rates. So far, the room rates on the groups have been what we''ve had have been in the two''s for the most part and Rob is shaking his head. He said, I''m right about that. We''re trending up now. Rob said that they were trending down because of the competition, but there''s two packages of competition.

The people that small and they don''t need a lot of the breakout rooms. They can go somewhere else and the larger groups that need our breakout rooms that nobody else can provide. So, we maintain some leverage. And besides, there is just -- they''re coming out, it''s like a tsunami of groups that are signing up.

I don''t want to wish us anything, but we do have a government group coming in that we can''t say the name of that. That''s paying a pretty good rate. And we''ve got to face it, Las Vegas is the best convention, most cost effective, most efficient convention city in the world and we''re the leader in the conventions in this market.

Robert G. Goldstein

The group segment obviously continues to be the most desirable segment in the city, in terms of both ADR and when they attend midweek. And I think we''ll survive and prosper in that segment, but it has been challenging. The more challenging segments are everybody FIT wholesale.

And those segments, you can see those every day on the Internet and see who is doing what. And it''s challenging, by anyone''s –you look at this thing, it''s a very difficult FIT wholesale market.

Janet Brashear - Sanford C. Bernstein & Company

If you factor in all those as much is it fair to assume that your RevPAR will be down in 2010 versus 2009?

Sheldon G. Adelson

Our what?

Michael A. Leven

Jane, this is Mike. I think it will be slightly down because there was a hangover in 2009 in the first four or five months of new business and other business that we reported for 2008. But I think the RevPAR -- I think there''s been a lot of commentary by others about their RevPARs improving and going up. And I''m sure you''ve seen some of that. I think honestly, we don''t know what the sum is going to look like at this point which is going to determine where that number is really going to end up where we don''t have groups. Where we have groups, I think our RevPAR will hold. Where we don''t have groups, it may be very difficult in the summer to hold it.

Robert G. Goldstein

We just moved a group into the summer.

Michael A. Leven

Yeah.

Robert G. Goldstein

A big one, a big show.

Michael A. Leven

Yeah. So I think we''re sort of in the early going as we''ve said, in the early going, we seem to be holding up here. But I think that candidly, I think if you''re looking purely at RevPAR which I personally think is a misleading number due to all of the casino props that go around the city, because people can use casino props above contain to build up their RevPAR by putting a special rate on it. We don''t do that, but others do. I think we''ll probably be closer to losing a little RevPAR this year than last year. But I don''t think it''s going to affect our EBITDAR in any way, actually.

Sheldon G. Adelson

I think it all depends on what happens closer to the last half of the year. If the -- if we continue to pick up group bookings between now and the end of the year I think the ADR will increase if we maintain that level of bookings. So I''m on the optimistic side of comparison to last year.

Janet Brashear - Sanford C. Bernstein & Company

Thanks. If could I ask one more question on the group side, but this time in Macau, now that you have extra hotel rooms on Cotai Strip with the Hyatt rooms from City of Dreams and you''ve got five and six in the works. Where''s the tipping point where you become where Macau and Cotai Strip becomes an important convention destination and you have a high utilization of your space there?

Michael A. Leven

When the Chinese and the Asian population shrink to a fraction of what they are today. I mean its 1.3 billion people. There''s 120 million in Japan, there''s 44 million in Korea, there''s 24 million in Taiwan. I don''t understand how anybody could say, one of the analysts I read the report last night said that it''s very clear that the opening of Genting in Singapore made it abundantly clear that this truly is an industry that supply creates the demand.

Everybody who says, where is the tipping point? I can guarantee you this, there will be no tipping point in my lifetime and Janet, there will be no tipping point in your lifetime and I know you''re a lot younger than I am. At least you look so, I''m sure you are. So there is no tipping point. How can you say there''s a tipping point?

But we haven''t had enough critical mass of hotel rooms to be able to bring on other conventions and now we''re starting to book more and more conventions in Macau. We got -- I met yesterday with a show producer here in the United States that has 45 shows big ones that they want to start duplicating them over in Asia and they''re going to go and take a look at both Macau and Singapore and I don''t understand. You''ve got 1.3 billion people and these populations are not shrinking, they''re growing. So there is no such thing, it''s supply creates demand. It''s not demand creates supply.

Thomas Arasi

I think just to add to that point, the point of inflection, where we''ll start hosting more meaningful and more frequent events, is actually when you get five and six open. The 1400 rooms across the street, the City of Dreams did not give us sufficient growth to be able to host the additional shows. With the opening of five and six and 6,000 rooms personal opinion, then you''re starting to talk about a meaningful capacity to book very large groups and take advantage of the infrastructure that''s in there. That''s why we call it''s a game changer.

So I think we are well within 16, 18 months to see a very profound change. And interestingly, you''re starting to see it now. I don''t know if you follow the local Hong Kong and Macau papers, but about three, four weeks ago on the inside front page of Hong Kong paper, you saw that the Hong Kong airshow now is going to alternate every other year between Hong Kong and Macau.

And that''s a very calculated event which in connection with the airport authority and the Macau government, we sat down last year and we said, in keeping with the mandates to diversify the economy, let''s start attacking and identifying some of these larger trade shows that we can start to migrate into Macau that will have a more profound impact. So that when the extra rooms from Galaxy, City of Dreams and five and six come onboard, we can actually start to use the infrastructure that we built to it''s best and highest use.

Michael A. Leven

So we need a critical mass of five and six, it''s not a tipping point. The tipping point is that it allows us to reach the threshold of critical mass a lot faster. It will give us 10,000 rooms, the problem with City of Dreams is that putting up four separate buildings and they only hold 350 to 400 rooms each. And that''s not sufficient capacity for each one of those brands to make an effort to send in a lot of business, because the properties are too small. Hyatt is not interested in filling Hard Rock and Hard Rock is not interested in filling -- filing Crown, Crown.

We have 4,000 Sheraton rooms, 4,000 plus another 400 or 500 St. Regis to be built in the third phase or maybe along with this phase. The issue is that with 4,000 rooms Sheraton has to put a major full court press on filling up those rooms and we are going to be along with Shangri-La and Traders. There''s dozens of Shangri-La with a very good reputation. I''ve stayed in several of them myself. I think they''re very good.

And you can''t with 300 rooms at a Hard Rock Hotel, offer yourself as a convention property. You can''t -- with one Hyatt at 350, the other Hyatt at 300, you can''t do that. And I think that even though they resemble an integrated resort, they''re not truly an integrated resort that can focus or could specialize in the convention and trade show market.

Janet Brashear - Sanford C. Bernstein & Company

Thank you.

Kenneth J. Kay

Thanks, Janet.

Operator

Your next question comes from David Bain with Sterne, Agee.

David Bain - Sterne, Agee & Leach

Thanks. First, I was hoping to clarify something that was said earlier. The whole benefit in Macau was that a $50 million benefit to net revenue or EBITDAR? I haven''t done the math yet, but it was mentioned earlier?

Michael A. Leven

EBITDAR.

David Bain - Sterne, Agee & Leach

Okay. And I guess the first question or I had a question on policy shifts with regard to the tightening of credit in China and its impact to your business in Macau. I didn''t really hear the answer if there was one.

Michael A. Leven

I don''t know that we gave one. I think it was one of the questions that were wrapped in with Joe''s, so I apologize for that. Clearly, there is a lot of press, a lot of discussion going on right now in terms of the liquidity and the excess thereof in the China marketplace and the impact on Macau when and if they start to really restrict the additional credit. That will have a far more pronounced impact on the VIP business. And I think on the junket business and it will for ours, primarily because the majority of our business is mass oriented.

The other thing that I would throw out there for consideration is -- everyone assumes that there''s a one to one relationship between the credit market and liquidity and the role of Macau. It would have to be profoundly different in my opinion, for it to have a material near term impact, because the people that come particularly on a frequent basis, aren''t coming on credit. They''re fairly liquid individuals themselves.

David Bain - Sterne, Agee & Leach

Okay. And I mean, as that does sort of bleed in there over time, if it does. Can you just given your liquidity situation yourselves be a little bit flexible with your balance sheet and loan additionally to junkets with a track record to extend to their players?

Michael A. Leven

If anything, we''ve gotten a bit more stringent over the last couple quarters. We''ve put in some standards and we don''t tend to deviate from those standards. It works well for us and it works well for the junkets. I think we are on par with our competitors in terms of the premium direct. So long answer to a short question, no, we don''t see us using our balance sheet to offset any liquidity issues from the mainland.

David Bain - Sterne, Agee & Leach

Okay. And then just final one…

Sheldon G. Adelson

Keep in mind that we''re actually in and above competitor because we want to increase our direct play.

David Bain - Sterne, Agee & Leach

Right.

Sheldon G. Adelson

So we don''t necessarily think its contributory to that end to start loaning more money to the junket reps.

David Bain - Sterne, Agee & Leach

Okay. And then a final one. If we can get an update on the progress or potential time line for the sale of the Four Seasons apartments.

Kenneth J. Kay

We have not made any official announcement on that. We are well aware that there is north of a $1 billion of value tied up in that asset. And as prudent management, you should expect us to be evaluating different ways to free that.

David Bain - Sterne, Agee & Leach

Okay. Great. Thank you.

David Bain - Sterne, Agee & Leach

Thank you.

Operator

Your next question comes from Dennis Forst with KeyBanc Capital.

Dennis Forst - KeyBanc Capital Markets

Yeah. Good Afternoon.

Sheldon G. Adelson

Are you still around?

Dennis Forst - KeyBanc Capital Markets

I ask question about, hello?

Sheldon G. Adelson

Are you still around?

Dennis Forst - KeyBanc Capital Markets

Yes.

Sheldon G. Adelson

This is Sheldon.

Dennis Forst - KeyBanc Capital Markets

You''re around, I know it''s Sheldon. If you''re around, I''m around.

Sheldon G. Adelson

Okay. Well. I remember meeting you 20 some odd years ago. At the time I was the only guys that had the stamina to go this far.

Dennis Forst - KeyBanc Capital Markets

My wife likes to eat three meals a day.

Sheldon G. Adelson

I''m only joking with you, Dennis.

Dennis Forst - KeyBanc Capital Markets

Yeah. I know. I wanted to ask, I''ve been so busy putting the numbers in that I may have missed this comment on the call. Have you taken out a minority interest for SCL in the quarter? Is there someplace where that is reflected in the income statement?

Kenneth J. Kay

Yeah. If you look on the income statement, it''s the line just below net loss and it shows a net loss attributable to non controlling interest of 5…

Dennis Forst - KeyBanc Capital Markets

6.6 million.

Kenneth J. Kay

Correct.

Dennis Forst - KeyBanc Capital Markets

Okay. Was there something in the third quarter also for that?

Kenneth J. Kay

Not for SCL. That would have only been in the fourth quarter.

Dennis Forst - KeyBanc Capital Markets

Okay. What was it then in the third quarter, Ken?

Kenneth J. Kay

Well, it would have been mostly for Pennsylvania and then some other kind of joint venture arrangements we have.

Dennis Forst - KeyBanc Capital Markets

Okay. But the lion''s share of that 6.6 was SCL related now?

Kenneth J. Kay

That''s correct.

Dennis Forst - KeyBanc Capital Markets

Okay. Great.

Michael A. Leven

Just for the month of December.

Dennis Forst - KeyBanc Capital Markets

Right. Only the one month. And then when will SCL have to release their detailed results? Not that it can be any more detailed than you''ve already done, but I''m just wondering on the Hong Kong Exchange, what their requirements are for disclosure?

Kenneth J. Kay

We will release our FP&A on March 1 and then we''ll release our annual towards the tail end of April.

Dennis Forst - KeyBanc Capital Markets

End of April. Okay. Great. Thanks a lot.

Operator

Your next question comes from Robin Farley with UBS.

Robin Farley - UBS

Well, thanks. And most of my questions have been answered. Just I wanted to clarify, you gave a dollar amount of receivables for the whole company and then you talked about reserve percentages by region. But I don''t know if you specified, what is the dollar amount of receivables just in Vegas versus last year?

Kenneth J. Kay

The total amount of receivables in Vegas including casino and hotel and other or just the casino number?

Robin Farley - UBS

Just casino, I guess versus the prior year in Vegas.

Kenneth J. Kay

Yeah. The -- I don''t have the prior year on me, but the gross receivable casinos for Vegas was about 100 -- a little short of 160 million.

Robin Farley - UBS

I''m sorry, that would 160?

Kenneth J. Kay

Yes.

Robin Farley - UBS

Okay. Great. Thank you.

Operator

Your next question comes from Chris Woronka with Deutsche Bank.

Chris Woronka - Deutsche Bank

Hi, good afternoon. I was hoping maybe, we could get a little color on your thoughts of potential development in South Florida maybe some higher level things, what needs to happen before you move forward and just general thoughts on that? Thanks.

Sheldon G. Adelson

Well, let''s see -- an exclusivity for the entire United States. A nice condo sitting out in Bal Harbour. Besides that and we don''t have to wait in line at Rascal House, the deli. Seriously, I think that tax rate is priority one. If they maintain a very high tax rate, we won''t be in. If they particularly on table games. If they allow too many pari-mutuel, racinos and it would interrupt where we think we''d like to go, then that might be a deal breaker for us. I''m expressed, I''ve been to Florida personally, several times. As you can see, I like it. And I think there are just too many places. We learned from the Sands and we learned from what they''re talking about in Massachusetts and then other states like Ohio, like Kentucky and Texas.

They''re talking about 12 tracks, 12 racinos in Texas and they''re talking about another 12 casinos. The point is, if we can''t do our song and dance of an integrated resort, it becomes less and less attractive. We think that South Florida attracts an enormous number of people from Latin and South America, a number of high rollers. So if we can do an IR there, in spite of the fact that there are a lot of local casinos in the racino category. We might still be able to do it, but that then depends upon the tax rate.

So that''s where we are on South Florida and the same in any other U.S. state. They''re becoming more plentiful now and so we''ll have to decide whether or not we want to be in the $50 million a year casino business or we want to be in the 0.5 billion or $1 billion integrated reserve business.

Chris Woronka - Deutsche Bank

Okay. Very good. Thanks.

Sheldon G. Adelson

I hope it''s very good.

Operator

Ladies and gentlemen, this ends our allotted time for questions. Management, are there any closing remarks?

Sheldon G. Adelson

Yeah. I would like to ask everybody, anybody have a question or comment about Singapore? I guess not. Okay. Well, if that''s it do we have any other comments? Mike? Ken?

Kenneth J. Kay

That''s it.

Sheldon G. Adelson

Okay, Steve, Tom, nobody? All right. Thank you, everybody for joining our call and having an interest in our company. And for those investors that are on the line, we want to thank you for your confidence in our company. We will do everything we can to increase shareholder value. Thank you. This concludes the call.

Operator

This concludes today''s conference. You may now disconnect.