MACAU UPDATE FROM THE (CONSTRUCTION) GROUND

Our guys in Macau have put on their construction helmets and safety glasses. Some interesting observations as follows:

• LVS stopped construction on 2 of the 4 towers on Lots 5 and 6.
• Construction remains on the Sheraton and St. Regis towers. We continue to believe construction will pause on these 2 towers as well after they skin the building.
• Shrangi-La and Traders postponed indefinitely and immediately
• Construction of two Cirque theaters on Lots 5 and 6 have been cancelled. The Cirque production teams have been sent home. The Cirque du Soleil show at The Venetian remains intact.
• MPEL’s City of Dreams has moved to a 3 phase opening from a 2 phase opening. Surprisingly, the opening of Phase 1 has been moved up to March 2009. It is our understanding that Phase 1 will include the casino floor and Crown Tower

We’ve been predicting the construction delays on Lots 5 and 6 for some time but incrementally the news is probably a positive for LVS and the Macau market. Less Capex means more cash flow near term. Regarding MPEL, for the City of Dreams to begin generating cash flow sooner is also a positive.