In preparation for STNR's 2Q earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary





    • Revenue: $190-195MM
    • EPS: $0.87-0.92
    • D&A: $4.6MM
      • Above the line depreciation: $3.4MM
      • Below the line depreciation: $900K
      • Below the line amortization: $300K
    • Capital spending: $12.5MM (includes $7.5MM for FL corp office purchase)
    • Revenue: $810MM
    • EPS: $3.80
  • "The scheduled capital repayments on the term loan commenced at the end of the first quarter of 2012 and due at the end of each of quarter of 2012 is an amount of $4.125 million, with the interest on the loan for 2012 anticipated to be LIBOR plus 2.5%."
  • "We have commenced the build-out of our second Texas location, and expect to enroll students in the Houston location by the third quarter of 2012."
  • "Ideal Image continues to perform well. We have opened two new laser centers this year, and continue to track well on our target of 15 new centers for 2012."
    • "Cash sales generated in the quarter exceeded expectations and increased our deferred revenue liability on the balance sheet, which was a healthy barometer of the future earnings potential of our laser hair removal division."
  • [$17MM as run rate for SG&A?] "There's probably some stuff in there that could come down a little bit. But it's about right, I mean, that looks like the run rate that is going to track along. I mean, we're still working on some of the synergies in Cortiva, but I wouldn't look for that thing to drop down much through the back end of the year."
  • [Education segment ex Cortiva] "The headwinds that we've faced since July of last year have not changed direction, nor have they changed their intensity. We're all working much harder to get enrollments with less money in terms of Title IV. So it's clearly a struggle, Steve. We're not different than anybody else. Having said that though, we're watching our costs as much as we can."
  • [Product business] "If you take a look at the 2% clip in our revenue growth, it would have been higher, but for a big QVC promotion that was scheduled for March, and part of our control was pushed into the second quarter. So it will still be there....We expect that to take place, I think, it takes place on April 30. So really QVC just switched that up at the last moment on us, so we really don't have any control of it. It wasn't that we lost that; it's just that it was shifted from a timing perspective. So good news is we'll still do it. It will impact the second quarter. So that was a big chunk of it."
  • "So trend's difficult to say. I haven't seen any change, negative change. I haven't seen anything that really sort of is noticeable on whatever we look at across the board. I would say Europe is still soft-ish. And I don't think that is very different from what our cruise line partners are seeing. Certainly, there are soft points in our itineraries, but the most noticeable one so far, and continues to be, which is similar to my comments on my last quarter, is Europe is weaker than last year at this time. Outside of that, I haven't seen any trends."
  • "We do see a little bit of softness in Europe still and I don't see that fixing itself in the near term."
  • [Sales trends and margins in product business] "I expect it to be much of the same. I mean, I think clearly we were impacted by some timing issues in there. Europe, UK, I mean, is turning to be tougher. Just this morning they reported that the economy there has got a little tougher. And a large part of the elements business is there. So it's really an unknown for us to say that we're seeing downward pressure from where we're at today. Hopefully, we can continue to roll as we are and not take so many more hits."
  • "Schools are a tough environment right now. The good news is after second quarter, we'll anniversary the regulatory changes. So it'll be apples-and-apples to compare how we're doing from an enrollment perspective, and all the other metrics that we follow. I don't see the environment getting any better. It's a tough environment. There's less money for the students. And that's making them think a lot longer about coming to school and enrolling. And we'll certainly see how we do sort of in the third quarter where we have the larger enrollments. But it's been tough for the last seven months. And I don't think it's going to lighten up for the next eight months. We will see how things turn out after the election. And we'll see how the regulatory headwinds change, if any, next year. And if they do for the better, then so too will the schools get better. But who knows where the focus will be next year post-elections."


In preparation for HOT's 2Q earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary




  • "We're the biggest in China by a wide margin. We have 200 hotels coming up in China."
  • "We are roughly in that 10% range and fees coming from Greater China. Our pipeline, 40%-60% of it is now Greater China. So you can see that it will grow. So it's not inconceivable that China will get to 20%, somewhere in that range at some point in time."



  • "We have just announced that we will redeem our 2013 debt early by the end of June."
  • "9% of our profits are exposed to the Europe per se."
  • "So we've been hedging about half our euro profit exposure each year, not a directional bet, just a fixed variable approach, and we happen to have
    hedged about half our exposure for 2012 at $1.44. So that will certainly help us mitigate some of the impact this year."
  • "We are reinvesting in our own hotel portfolio. That will probably continue for another year."
  • "Typically, we spend about $100 million a year on the pipeline, so to speak, whether it's key money here or a mezz loan there."
  • "Our goal is to stay investment grade through cycles. We're there with the next paydown. We pretty much brought our debt down to levels where we want it to be. We think, over time, the ratings will all line up at BBB."
  • "We do expect to pay a good dividend. We've announced our dividend policy. Our dividend will grow with earnings, and we announce that every year as to sort of what the dividend is going to be some time later this year. But we've clearly stated that our dividend is going to be a certain percentage of our EPS and therefore as EPS grows you should expect our dividend to grow."
  • "We had cash on the balance sheet at the end of the last quarter. So, we're using some of that cash to redeem our debt early.  We have a share buyback authorization already; we've had it for a while. I think the timing of our share buyback is going to be linked more to assessment of intrinsic value than any kind of trigger around asset sales and so on."
  • "The rate part of the RevPAR is where all the action is going to be in the next couple of years especially in the developed world."
  • "Corporate negotiated rates always take a little while to catch up, but they are beginning to catch up. We've had some rate increases in the negotiated rates."
  • "You have old group business that you booked at lower rates that needs to fall off and that's beginning to happen and then you do want the group business to come back in a reasonable way so that you get that base load of business that allows you to reduce your dependence on some of the lower-rated channels and that mix shift is happening and it's really – as it happens more and more that you start getting more and more rate flexibility."
  • "No hotels are being built as we speak in the U.S. or Europe. There is really no financing available to build full-service hotels."





  • "Primarily driven by rates, we expect RevPAR growth momentum to be sequentially stronger from Q1 to Q2."
    • "Rate in the first quarter was roughly 50/50 and we're heading towards more like a 60%-plus rate to occupancy mix as we head into the latter part of the year."
    • "Occupancies are getting to the point where rates should begin to move more than it has to date. It's clearly helped by the fact that the business we're now booking on the group side is clearly at a much higher rate. Recent group bookings have been at rate increases that are in the range of 7%, 8%, 9%. The corporate negotiated rate business that we're getting this year is 6%-plus more than last year."
  • "Despite continuing concerns around the outcome of the French election or Spain's refinancing needs, we are seeing improving business trends in our key European markets. These trends would suggest that RevPAR growth in Q2 should approach 4% in local currencies from under 2% in Q1. We are currently tracking at a 4% level in April."
    • "We see strong booking confidence across Germany, the U.K., and early signs of a pickup in Italy. Booking windows are also returning back to normal. Based on what we are seeing, we would expect the European recession to be shallow, as some economic forecasters are now predicting. As such, we are more confident today that the second half in Europe will be better than the first half, helped along by easier comparisons."
  • [Asia] "We expect a sequential acceleration in Q2, with RevPAR growth returning to a double-digit pace."
  • "In the Middle East and Africa, we saw big jumps in RevPAR in March, as North Africa started to lap the start of Arab Spring events of last year. However, in absolute terms, business is still weak in countries like Egypt, where the situation remains unsettled for travel. Saudi and the Gulf, on the other hand, are on a strong cyclical recovery track, and sub-Saharan Africa is delivering solid double-digit growth. As a result, we expect RevPAR growth to accelerate in this region in Q2."
  • "You might recall that last quarter we suggested that 2012 had more potential to surprise to the upside than to the down side. We still believe this."
  • "Commercial real estate loans in general and especially construction loans continue to decline. So supply is tight and it looks set to stay that way for a while, but demand in North America, Europe and Japan has continued to build. Companies are profitable and in great financial shape and they're in search of growth."
  • "We also expect best ever performance in rooms growth in 2012 outside of their home markets."
  • "Although there have been concerns about the real estate sector in China, the pace of hotel signings and openings remains steady and strong, especially in tier two and tier three markets, where we have been focused for the past few years."
  • "We expect things will pick up as the Central Bank is entering an easing cycle. Indonesia and Korea are booming, up 15% in Q1. Japan continues on its recovery track with double-digit growth as we lapped last year's earthquake tsunami impact. We expect Asia to finish 2012 as our second largest division accounting for 20% of profits."
  • "All indications are that Latin America will remain our fastest growing region."
  • "Significant renovation reduced Q1-owned EBITDA by approximately $5 million and we expect a similar impact in Q2."
  • [Vacation ownership business] "We remain on track to deliver over $100 million in cash from this business in 2012."
  • [Bal Harbour] "To date, we have closed on 138 condo units, 102 this year and 36 last year. 32 units have been sold but not yet closed. As such, the project will be over 50% sold and closed by the end of this quarter."
  • "In Q1, we received over $260 million in cash from closings. As we look ahead, sales momentum is looking good."
    • "A new positive trend is that we're seeing a sharp increase in interest from North American buyers who accounted for 50% of sales in Q1. The South American season starts in another 45 days as their winter begins. We expect a very good selling season."
  • "We remain steadfastly focused on holding cost in line. Run rate costs are only increasing in Asia and Africa, where we continue to invest in infrastructure to support our growth. For the year, we are still targeting a 4% to 5% increase."
  • "We now forecast Bal Harbour will deliver $300 million in cash in 2012."
  • "In terms of assets sales, we are always exploring opportunities to sell our owned hotels at attractive prices to high quality, long-term owners. We have several conversations currently underway. We expect some or all of these transactions to close later this year."
  • % of properties paying incentive fees:  "typically on the international side, that number is always in the 70%, 80% range. On the U.S. side, I think we're probably still in the 30% to 40% range."
  • "In terms of the renovations, it's a comprehensive set of renovations. It's the luxury collection, as Fritz said, is about $100 million out of that. But then we have other big hotels like the Sheraton Rio coming up for renovation later this year. The Westin, which is 1,000 rooms in Atlanta, under renovation. So those are pretty sizable underway. We do have some more coming up in the next year, so the St. Regis in New York is up for a pretty major renovation potentially next year, and a few other hotels."


We advised not staying short, but staying away, from this stock on the print.  That ended up being the wrong call; the sell-off we were looking for happened more abruptly than we were expecting.  We still see risk in the stock from here.  Below we offer some takeaways and a recap of the quarter.



Buffalo Wild Wing’s quarter (recap below) was disappointing.  Same-store sales missing expectations and, more predictably, elevated food costs led to a 7% miss on the bottom line.  Here are the key takeaways:


1. Management layered on roughly one point of price in July bringing the total run rate to 3% for the third quarter.  On September 3rd, with the rollout of revised menus, the company will take an additional 1%, bringing the run rate to 4% for the fourth quarter.


HEDGEYE: We believe that Buffalo Wild Wings’ competitive set may be broader than some think.  Running price at 4% versus Food Away from Home CPI at ~3% could negatively impact traffic.  CMG struck a cautious tone when discussing price, and consumer demand in general, on its earnings call last Thursday.  Even with much less price on the menu than a year ago, CMG is not seeing an uptick in traffic that some were expecting.  CFO John Hartung said, on price, “when a lot of restaurants get resistance, when they increase prices, they either see resistance and people spending less on each visit or they visit less. We don't usually see that. So last year when we raised prices, we didn't see any kind of decline in transactions. We didn't see any kind of decline in average check.”  If Chipotle is observing some incremental softness in consumer demand, we believe it is reasonable to assume that all restaurant companies are experiencing it to some degree.



2. Management lowered FY12 guidance from 20% net income growth, provided on April 24th, to 15-20% net income growth.


HEDGEYE: We believe that there is further downside to that guidance.  Our range of expectations is for EPS growth of between 11-14% for FY12. 



3. The commodity cost set up for this company is not favorable.  Corn prices remaining elevated suggest that chicken wing prices may take longer to fall than many have been anticipating.   Management said, “It’s hard to believe that wing prices could go much higher”.  Chicken wing prices were up 86% versus 2Q11 levels and the remainder of the commodity basket was up roughly 3% year-over-year.  For 3Q to-date, wing prices are tracking roughly 70% above 3Q11 levels.


HEDGEYE: An upgrade on the EPS miss last quarter was based on the chicken wing conversation turning from higher prices to lower prices.  We believe that consensus is now much less certain about chicken wing prices declining in the near future, particularly given recent movements in the grain markets and the ongoing struggles of the food processors within the chicken industry. 



4. Same-restaurant sales growth for 3Q to-date at company-owned stores was +6.8%.  This implies a sequential acceleration in two-year average trends from 2Q.


HEDGEYE: In his monthly write-up, Malcolm Knapp mentioned a shift from June to July related to the fourth of July this year that favorably impacted casual dining revenues this month.  Additionally, management mentioned one additional UFC event versus the same period last year that will benefit traffic for the quarter.  Other non-recurring factors in the third quarter include a positive impact from the NFL adding Thursday night games versus 3Q11.  Despite these positives, there are many other variables, such as the elasticity of demand, that remain to be seen.  Our sense from this conference call was that the Wall Street community is far less trusting of this management team today than it was in April when the company last reported.  The line of questioning was far more skeptical and we believe appropriately so. That management can navigate the delicate path between protecting margins and not overly discouraging traffic in the current cost environment is less than certain.  



2Q12 Earnings Recap


BWLD missed on the top-line largely due to comps coming in at 5.3% at company-operated restaurants versus 6.1% consensus.  Earnings per share of $0.62 also missed the Street’s target of $0.67 as food costs “moderated” the company’s earnings growth, according to management.  Earnings per share grew 7.7% year-over-year versus 15.8% consensus. The tables below offer further details.










Howard Penney

Managing Director


Rory Green




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In an effort to evaluate performance and as a follow up to our YouTube, we compare how the quarter measured up to previous management commentary and guidance.




  • WORSE:  Even international was worse, the one area we thought was performing well.


  • WORSE:  EPS guidance remained unchanged at $0.98-$1.04, even though 4Q will have 22MM less shares outstanding.  Despite the IGT's denial's on the call we can all do the math which implies a 2 cent reduction in EPS


  • SAME:  operators are optimistic in their intent to purchase but some anxiety still remains
  • PREVIOUSLY:  "I would say the mood is improving but still tempered. I think we're all wondering about the economy as we go into this election cycle, and then, post-election, kind of what things look like next year. And I think there's always a great intent to make investments and then just stopping short of actually making it at the same robust level....I would say people are enthusiastic but still a little anxious."


  • BETTER:  IGT received 900 units in FQ3, previously they had expected to maybe get some in Canadian units out by the 4Q
  • PREVIOUSLY:  "We feel very good about our position there, that market is going through a huge replacement cycle in fiscal 2013 and 2014; for us, it is kind of a once-every-10-year opportunity, so when it comes, you have to really be prepared. We feel like we are prepared. We still think we might get some [Canadian VLT] in the September quarter. It just kind of comes down to timing and revenue recognition issues. It's really going to be more of a 2013 event. There may be 1,000 contracts or so that sneak into September. But we... obviously got a very good share from the first announcement and we're hopeful that those kind of trends continue."


  • SAME:  management continues to say Double Downs is performing ahead of expectations. But monthly daily users fell 7% QoQ. We'll split the difference - perhaps results were better than IGT expected but not quite as good as the where investors would expect things to be performing given the price tag paid and margin dilution.
    • "On your projections, EBITDA should roughly triple from here, and that would equate to a purchase multiple of roughly 6.5 to 7 times EBITDA on 2014. Are we in the same ballpark?"
      • "So I would say your math makes sense in this kind of a worst-case, and we think there's actually a lift from that in the business, just based on the R&D that has been spent years ago, and putting some legs on that R&D as we repurpose a lot of our content into the social gaming space and monetize it, again, when it's been sitting on the shelf."
    • "We expect slight margin pickup there in the back half"


  • MUCH WORSE:  Patti admitted that heightened competition, lower MegaJackpots yields,  and most importantly poor product performance, had negatively impacted their gaming operations performance
    • "We're generally pleased with our WAP product performance. It continues to perform as expected.  Really, the quarter was really just a mix to the lower earning units and we expect continued improvement sequentially over the remainder of the year."
    • "So I feel like we have a nice lineup of product in the bag of the sales folks at this particular point in the game ops side."


  • WORSE:  lower units sales in Europe and South America drove a miss in this segment and IGT admits that they have no visibility here.  So much for market share gains
  • PREVIOUSLY:  "Our international business pace continues to accelerate, with improvement in both quantity and quality of order flow."


  • MUCH WORSE:  at 48.9%, it is 3% lower QoQ.
  • PREVIOUSLY:  "We had an isolated non-standard cost situation in our Asia-Pac region in the quarter, so we are anticipating that the gross margins across the board... will pick up between now and the year – and the end of the year back to more normalized levels."


  • BETTER:  North American unit sales were one of the very few bright spots this quarter. The earlier than originally guided to shipments to Canada made all the difference between hitting consensus estimates and the reported beat in this segment.
    • "Our outlook is positive for North American replacements. It will, we think, continue to strengthen throughout the year, we will expect North American replacements to grow modestly over the remainder of the year...the replacement market is going to be flat to growing has kind of been IGT's stance now for about six months. 
    • "We've recognized 8,100 units. I think that's a comfortable kind of six month rate for us that we feel very comfortable with."


  • SAME:  Scioto Downs VLTs, Toledo and Cleveland casino were all recognized in the quarter
  • PREVIOUSLY:  "Our current forecast is that the Ohio properties will be recognized in June." 


A pretty big miss but you wouldn't know it by the tone of the conference call



"Against the backdrop of an inconsistent global economic recovery, we are generally pleased with this quarter's results and remain on track to meet our fiscal year 2012 financial goals.  The recent announcement of our $1 billion share repurchase is further evidence of our confidence in the outlook for IGT."


- Patti Hart, CEO of IGT



  • While some areas of the business fell short of their expectations, other areas excelled. 
  • International results were mixed.  Confident that international will be a strong contributor to growth in the future.
  • Expanding their Interactive business into mobile applications
  • About where they expected to be at this point in the year.
    • It is surprising that IGT thought the quarter would be this weak
  • They claim to be pleased with their revenue growth in the Q? Seriously?
  • Interactive generated $43MM in the Q
  • 62% gaming operations margin for next quarter
  • The gaming operations business remains extremely competitive
  • Game sales: Shipped 900 Canadian VLT units. More used unit sales lowered ASPs.
    • We thought that these were just new units
  • Expect gross margin of 52% for product sales in 4Q
  • Have repurchased 10% of their share count this year so far.  Anticipate returning $500MM of cash to shareholders (including dividends) in FY12
  • They are reiterating the same guidance for the year, despite the lower share count...ongoing fundamentals have clearly gotten worse.


  • Why in the world would they do the buyback ahead of such a nasty quarter?
    • They don't see the quarter as a miss: Double Down is performing better than expected. North America shipments are better than expected. They had some one time used unit sales into Mexico that negatively affected ASPs.
  • Big difference between shipped and recognized units this quarter
  • The reason for such a large range of guidance for one quarter has to do with:
    • Few thousand VLTs shipping next Q
    • Little IL VLTs in the F4Q
    • A few new Ohio properties that can go either way
    • Some import/export issues that have nothing to do with the business
    • Double Down has some new products launching
    • Poor international visibility
  • Double Downs 
    • Focusing on expanding across platforms and geographies and rolled out less games this Q which is why users slowed
  • Would like to see the trend of replacements in NA increasing YoY
  • Have a little IL and Canadian units included in their guidance now; they did not include them in their previous guidance
  • Lower margins on product sales next quarter is partly driven by the very competitive environment.  Their AVP and MLD units were down materially as a % of their mix. Since Canada and VLTs are going to be a big part of their business going forward, they will have lower prices and margins.
  • Excluding VLTs and used unit sales, the unit pricing would have been flat
  • Game ops margins ex DD was 60% 
  • Implicit guide down is due to margin challenges in gaming operations and international sales. 
  • Gaming operations yields continues to slide. They are adjusting their thinking about putting out lower yielding products and taking what they can get.  Competition is really hot in the WAP area, the economy is weak and they have some WAPs that aren't performing.  They have made some personnel changes to address some of the product issues. 
  • Double Down user growth from here?
    • The first priority is to expand the platform to mobile and geographic exposure
    • Then they are focused on adding the IGT content
    • So basically they don't expect to have MAU growth until the two above happen. 
    • Will their bookings per unit decrease when they go mobile? No comment but their competition has lower bookings per user on mobile. Mobile is still a small piece of their business so it's not impacting them yet.
  • They will have better ASPs next quarter but units need to be way higher to make the guidance
  • Double Down looks like a dilutive business so far, when will that change?
    • It's not dilutive 
    • There are other Interactive businesses in there, not just Double Down
    • Will continue to invest in those businesses as long as they believe in the growth there
  • There was nothing extraordinary in the R&D and SG&A 
  • Will they have to take an impairment on the Double Down purchase?
    • No, they don't believe that they will need to take a writedown. If anything they just wrote up their contigent payment. The added verbiage on writedowns had nothing to do with an impairment charge down the road. 
    • They are more focused on mining revenues from their existing users than customer acquisitions. Their plan is to grow users and revenue per user. 
    • The impairment language has to do with the fact that they will be reevaluating the earnout payments
  • The competitive environment has remained constant in terms of product and price for over a year at this point
  • Had sizable used unit sales in their unit numbers
  • Video poker: their competitors are making some moves but time will tell on how successful they will be.  The video poker customer is not one that likes change.  Their strategy is to tweak the product but to stick to appealing to the core player.
  • Evaluate the pricing on their WAP games based on each individual situation.  On a case by case basis, they will do what they can to maintain floor space, other times they relinquish floor space rather than cap yields.
  • In the quarter, they recognized Scotia Downs
  • They don't currently expect that OH legislation will allow for route operators
  • Expect that a handful of IGT games go into the Double Down platform this year. Want to wait until they have the broadest reach possible. Will see the broader language conversion come online in calender 2013.



  • "The company is reiterating its fiscal year 2012 guidance for adjusted earnings from continuing operations of $0.98 to $1.04 per share. This guidance assumes our fully diluted weighted average shares outstanding will be 291 million for fiscal 2012"
  • "Revenues increased 13% to $301 million in the third quarter, primarily due to increases in the interactive businesses. Excluding the interactive businesses, revenues were flat." 
  • "Gross margin decreased to 59% from 62% in the third quarter, primarily due to the inclusion of the interactive businesses and lower MegaJackpots yields"
  • "Excluding the positive impact from the interactive businesses, average revenue per unit per day in the third quarter was $50.20, down 4% sequentially and 7% over the prior year quarter, mainly due to lower MegaJackpots yields and a higher mix of lower-yielding units in the installed base."
  • "Double Down monthly users were 5.2 million as of June 30, 2012, a decrease of 7% when compared to March 31, 2012" but daily bookings per day increased to $0.25 from $0.24 last Q
  •  Product sales: 11.6k shipments recognized vs. 12.6k shipped
    • NA: 8.2k (3.1k new, 5.1k replacement) recognized and 8.7k shipped
      • ASP down 8.5% YoY and 12% QoQ to $13.1k
    • International: 3.4 units recognized, 3.9k shipped
      • ASP down 9% YoY and 14% QoQ to $15.1k
    • "Average machine sales price decreased 11% in the third quarter, mainly due to an unfavorable pricing mix related to increased lottery and used game sales." 
    • "North America gross margin increased to 56% from 55% due to higher production volumes"
  • "Excluding the revenue and operating expenses associated with the interactive businesses, total operating expenses increased 140 bps as a percentage of revenue compared to the prior year quarter, largely due to unfavorable bad debt provisions"
  • Debt increased $280MM as a result of funding the $400MM buyback announced on 6/14. 21MM shares were delivered under the ASB on July 2.  "The company may receive additional shares until the completion of the repurchase period, which is expected to end during this calendar year."
  • IGT also repurchased 2MM shares of stock in the open market under its previous authorization at an average price of $14.48 per share for a total cost of $25 million.


In preparation for LVS's 2Q earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.



Sands plans to start Parcel 3 construction in Cotai by November 2012 (July 19)







  • The infrastructure of Macau continues to build, continues to get better and of course, we're dependent on the Chinese economic condition, which we feel is we'll have some level of softness from time to time, but overall is very well positioned for the future.”
  • I don't think on a mass market basis we've seen anything negative whatsoever. I think the conventional wisdom is that things are slowing in China, which affect us. We haven't seen any credit problems in junket. We haven't seen any real problems in our cage in terms of the requests for more money, but I think generally the competitive environment of Macau has said that things have slowed in May, but I wish I could give you a reason for it. I wish I could tell you that it's a trend. I don't know that it is and certainly not going to know it's a trend for another couple of months at least, but one must remember that May, even though it was down to only a 7.3% growth, was still the second best month in Macau's history for the gaming revenue.”
  • “None of the junkets we do business with have been crying the blues to us.”
  • “We're still getting requests for more VIP rooms in site 6, which we've allocated capital for to build and if we're not under construction now, we're all designed and ready to go to add an additional 60 to 70 tables in VIP on site 6.”
  • [Mass tables]We will be sitting with about 27% of the total table count in Macau by January of next year. We sit with about 24% of the table count now.”
  • [VIP table share] “About 20% of that table count is VIP.”
  • “The Sheraton, 4,000 room-Sheraton, which is two phases, will be open fully complete by the end of January and will pen 1,850 rooms, by the end of this September.”
  • “Right now the company, though, when you look at the amount of spending that we have remaining on Sands Cotai Central, it's about $1 billion this year, about $300 million next year and about maybe $200 million the year after that.”
  • “I think what you're seeing statistically is there has been a small drop in VIP gross for the whole Macau market. It was growing in the 30s% a month. It's now growing in the 20%s. Some of the sell side have predicted it'll grow a little bit less than that. However, if you look at the statistics over the last six months, our VIP share has improved.”
  • “We're already managing our costs. I was looking at the numbers just a couple of weeks ago and our costs are way down right away. I mean, first of all a lot of our costs at the operating level are in the gaming area itself. They automatically reduce if you don't have the volumes, and from a cost management standpoint we run the highest margins in Macau by far, and our company is built now as a high-margin company.”
  • “I think over the next five years, you should be talking somewhere between 10% and 15% growth a year.”
  • “Our plans to open the second phase, Phase IIA, I guess it's called, of Cotai Central by mid-September. And I think the last Phase will go to either December or January."
  • [Lot 6] “The government is committed to lenders to provide 400 tables. They gave us 200 tables for the opening the first of the two mass casinos. And they're going to give us, presumably, the second 200 tables when we go to open our second casino.”
  • “Lot 3 can hold 3,600 rooms.”
  • “Our mass business in Plaza is off the charts. We should get more tables in there.”
  • [SCC]  “We're fully occupied in the month of May. We opened, all the rooms are committed to. We had some... physical issues in the rooms and the hotel getting it done in April. It's fully operational except for one junket, on the third week of May, the last junket rolls in there of, the 12 that'll be there. We expect a full hit in the month of May and we feel very, very good the [inaudible] of operators we've assembled there.”
  • [Revamping VIP product at Venetain] “We'll start renovation shortly and I think you'll see a big change there.”





  • “We've gotten to maturity in less than two years. So from now on you're going to see gradual increases in the Singapore market mostly from the VIP scenario because our hotel is running at capacity now and has been for a year.”
  • [Customer demographics] “The great majority of these people appear to be in factories consumer goods and export businesses. And that's why they have money in the banks in Singapore and Hong Kong... which are easily accessible to them. It'd be hard to say what percentages, but I would say the percentage of real estate development people that we have is probably in the single digits would be my guess.”
  • “We also have mass market help from the new MRT station, the cruise terminal that will open and...  the Botanical Gardens that will open I think this November."
  • “Marina Bay Sands has become a really a significant retail destination. We have over 300 stores there driving traffic as well. So I think you'll see moderate... but consistent growth."
  • “Our hotel's running in the high 90%s, it's sold out most of the time on 2,500 keys at a very high rate.  The room [to grow] is really in the casino.  I would expect a high single-digit growth there over the next number of years.”
  • “We also have a plan to add some VIP rooms on the third tower, which we're waiting for approval on, which will give us some very high end play.”




  • We'll go up to 30% to 35% equity in any property we do or any resort development we do. We will not go above that and we will go for development financing for the rest of that for the rest of those projects.”
  • “We're extremely comfortable with the 1.5x, but if we were to ... lever up to really develop projects...we're also comfortable the 2.5x. It's tough to envision today based upon our cash balance... the cash flow that we generate on an annual basis or even if we're in a development mode for us to kind of really increase above that 2.5x.”
  • “Our cash build, if you look at the analyst consensus numbers on this side, you can see that by the end of 2013, we'll be looking at about $6 billion of cash and about $8.5 billion in 2014."
  • “Our priority list is Japan, Korea, Vietnam and Asia, and we're looking at Toronto, which is getting very active, about a possible lakeside location for an integrated resort here in Canada.”
  • [Spain] “But we will make a decision probably on the location sometime this summer.  When that decision is made there are certain situations that have to go on with the land, et cetera, but more important there is legislation that could take anywhere from 6-7 months to pass with the grants and incentives that we require. So at the absolute earliest in Spain you're talking about maybe sometime in mid-2013 that you would actually start spending any really serious money.”
  • [ROI hurdle on Spain] “20% is our hurdle. Don't forget, that's 20% cash on cash, it's a higher return on equity obviously.”
  • “What happens in the FCPA investigation is that an outside law firm was hired by our audit committee as an independent firm to do the investigation. That investigation completes on the 30th of June. It's just – we're almost 30 days from finality, and that investigation gets turned over then to the Department of Justice, and we would expect that by some time towards the fall, the end of the year, that would conclude.”
  • Win percentage on VIP: “The 200-day moving average is 2.90% in Marina Bay Sands. Total Macao and Singapore properties 3.05% on a 200-day moving average…. 3.31%, total Macao.”

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