Welcome to the Wynn Resorts First Quarter 2020 Earnings Call. All participants are on listen only until the question and answer session of today's conference.
Thank you, operator, and good afternoon, everyone. On the call with me today are Matt Maddox in Las Vegas and on the phone line, Marilyn Spiegel, Ian Collin, Linda Chen, Ron Carruthers, Frederick Luvisutto and Brian Goldbrand. I want to remind you that we may make forward looking statements under Safe Harbor federal securities laws and those statements may or may not come true. I'll now turn the call over to Matt Matt.
Thanks, Craig, and hello, everyone. I hope that you are all safe and healthy, likely working from home right now. Instead of just jumping right into our Q1 results, what I'd like to do is spend some time talking about how we've handled this pandemic and the way that we've been thinking about it. So well before we closed our facilities in North America because of our Macau experience, I reached out to one of the leading experts in really in the world in terms of pandemic research and global health security. It's the Director for Global Health Security from Georgetown University and engaged that team months ago and spent daily conversations with that team trying to understand the situation and what was going on and how best we could protect our customers and our employees and provide information to our medical communities and to our state and local government.
We actually because of that led the industry both in Massachusetts and in Nevada in closing our casinos. We suggested to the Massachusetts Gaming Commission in mid March that it was time for us to close based on the data and based on the science and the potential community spread that we were seeing. And we actually closed our resorts in Las Vegas in advance of the state declaration to close and we were the first that led that. And we did it because at that time it was the right thing to do. And we knew that we needed to be early and to make that move.
We also knew during that time that asking our 30,000 employees, team members, 15,000 of them in North America and 15,000 in Macau, that a pandemic is upon us, that we're closing our resorts. We felt that we should invest in our culture right now because it's taken years years years to build the best team in the industry. And so we chose and I chose to pay all of our people since we've closed through the end of May. We are one of the outliers in our industry or in hospitality in general that have done that. But I believe that investing in culture right now and making sure that your team members feel safe during these times is a corporate responsibility and I also believe it's a great investment.
I'm not sure how long this will last and I'm not sure how much longer we can continue this practice. It's currently the May 31. But what I know is when we do reopen in whatever state that is in Las Vegas and in Massachusetts that I want our team members to add smiles on their face. It will be underneath the mask, but it will still radiate through because we're in the business of making people happy. And only if our customers and our customers will only be happy if our employees felt like they were part of the family.
So that's been my focus is to really make sure that we're doing this as a family and to think about the future because you can quickly disrupt a culture that takes years years to build. It also allowed us I think to be to act quite fast in the way that we're thinking about a reopening because of the resources we had at hand. As an example, I believe we were one of the first companies in the nation, not just in our industry, but in the nation to produce a detailed reopening plan. We published it for the world to see on April 19. It's a 23 page plan that goes department by department, area by area, space by space in terms of how we're going to keep our employees safe and our customers safe.
It's actually become known as the Win plan and I've had sports teams call to walk through it, airlines call and walk through it, retail, large landlords call and walk through it, developers, dozens of CEOs. To look at the win plan and to think about it and apply it to their own business. And we did that because we wanted to help lead the conversation to a reopening of our economy, but in a phased approach and in a safe approach and focused on the data. We've been working with our experts and state and local officials on benchmarks to track that should be public and transparent. We've crafted with our medical community here in Nevada benchmarks based on disease growth, which is a case growth coupled with hospitalizations and deaths and the disease growth needs to be at a certain level before you can consider reopening.
We have set benchmarks for ICU capacity with our medical community, as well as ventilator capacity that you need the ability to achieve a two time surge in COVID patients in your ICU without needing crisis care to begin a phased approach to opening as well as test positivity rate, So the which really measures the amount of tests that are being conducted in an area. Those benchmarks have been widely distributed. They're going to be quite public. And it's really a great way that our medical community is looking at this to think about phased openings of the economy. In Nevada, our governor has launched the concept of a phased opening.
The Phase 1 should begin in the next week or so, sometime around mid May. And then based on the benchmarks and the data, I believe we'll continue to see in Phase 2 openings of additional businesses and potentially opening of our business in late May. But again, that is assuming that we stay in line with the benchmarks and that the environment is safe for customers and for all of our employees. In Massachusetts, they have formed a task force at the state level, and I want to commend both Governor Sisolak and Governor Baker for early fast action and for their tireless work on this effort. Massachusetts is also I believe will be coming out with a phased approach to opening.
They have clearly had a much more difficult time than Nevada has given the high amount of cases and deaths there. But their community has handled it, really is good as has been handled around the globe, and should be commended. On the testing front, we think a lot about this. And in fact, we in Las Vegas have signed a partnership with the University Medical Center, the research hospital in Las Vegas, whereby any of our employees can get tested for COVID-nineteen. In fact, we have on-site testing tomorrow set up at an 85,000 square foot ballroom with 25 nurses from UMC, all appropriately spaced out and we believe that we'll have over the next couple of days, thousands of employees that will have been tested.
These are the types of things that we're doing now and early into an eventual lead up to opening our properties. In Macau, we have we've been we've remained open in Macau after the closure in the 1st 2 weeks of February. However, as all of you on this phone there the Macau volumes have really not been there because there's a 14 day quarantine of going in and out of Macau from Hong Kong or Mainland China. One of some encouraging things that we have seen in Macau is, first, there hasn't been a new COVID case in Macau in weeks. 2nd, in Mainland China and Macau and Hong Kong, teachers and students are back to school as of last week.
There's continued to be progress in, the Macau government has publicly talked about it in the health check system, which in China as I'm sure a lot of you are aware, on your mobile phone, you have a red, yellow or green system that gives access to various areas. And Macau has been working very closely with Guangdong to make sure that those health checks are in line. All of those seem to be in our progress. So we would anticipate that as everyone else is, that progress will continue in terms of reopening the borders in a cautious way, resuming tourism in a cautious way. And the amount of progress that's been made over there has been extraordinary.
Just looking at the results, high level, before our closure in Las Vegas, RevPAR was up 8%. In Massachusetts, we were on our way to record EBITDA and win per unit per day before closure was up on the slot floor about 13%. In Macau, as we laid out probably on the Q1 call, during the closure, we were roughly between $2,200,000 $2,600,000 a day of burn. And what we saw from February 20 to roughly March 20 after we reopened was a gradual increase in gaming volumes and particularly led by VIP and premium segment to the point where our burn went in a matter of 3 weeks from $2,500,000 a day to $800,000 a day. And we were back to roughly 25% of our volumes in the 4th quarter.
So we are continuing to be optimistic about what's going to happen in Macau as the cautious reopening of the border continues. We're focused on our 3 pillars that we talk about on these calls, which in Macau and in North America. In Macau particularly, it's investing in our people, which we're doing, investing in our communities, which includes the Greater Bay Area and really helping to position Wynn to be beneficial in the Greater Bay Area and working on investments throughout the region and investing in our assets. So during these times, we have continued extensive design development work design work on our Crystal Pavilion project in Macau and we remain very excited about it. So that's really where we are right now.
I believe we're going to continue to lead in our industry in Las Vegas and in Massachusetts. We're working very carefully and closely on a daily basis with state and local officials and the gaming regulatory bodies. And I believe that the data will be transparent as to opening dates based on benchmarks and we'll be ready to begin in the new normal atmosphere. With that, I'd like to turn it over to Craig to talk about some of our financial results. Thank you, Matt.
This quarter, I'll focus my remarks on the company's current liquidity position and our expected cash burn rate. At the onset of the outbreak of the virus in both Asia and the U. S, we took immediate and decisive action to bolster our global liquidity position, maximize our financial flexibility and preserve cash. On April 30, our global cash and liquidity position was nearly 3,400,000,000 providing the company with significant runway to weather the impact of the pandemic on our business. In Macau, where we drew down our revolving credit facility in February, we had approximately $1,800,000,000 of available liquidity as of April 30.
And in the U. S, we had total available liquidity of approximately $1,600,000,000 at the end of April. Our already strong domestic liquidity position was recently bolstered by the issuance of 600,000,000 dollars of unsecured notes in April. In fact, the transaction was upsized from $350,000,000 and was approximately 8 times oversubscribed. We were pleased to be the 1st company in our industry to issue unsecured notes since the onset of the pandemic, once again highlighting the strength of our brands and our business.
We also obtained a covenant waiver for our U. S. Credit facility further increasing our financial flexibility. We are well positioned to bridge the current period of uncertainty and thrive operationally and strategically during the recovery period. Turning to our cash burn rate, upon the closure of casino operations in Macau in February, as Matt just alluded to, we announced an expected daily OpEx burn rate in Macau of 2,500,000.
As he also mentioned, upon reopening in late February, our normalized EBITDA burn rate improved to approximately 800,000 per day in March. And with the subsequent implementation of additional public health measures, quarantines and border closures, this rate in April was approximately $2,000,000 per day, reflective of limited business volumes. Until the reimplementation of visa schemes and full reopening of transit to Hong Kong, we expect a daily burn rate in the 2,000,000 to 2,500,000 range in Macau, excluding interest in CapEx. In the U. S, we have currently committed to pay all our team members their full wages and benefits.
Under this approach, our daily OpEx burn rate in the U. S. Is approximately $3,600,000 inclusive of corporate expense. Globally, cash interest expense and our scaled down CapEx program combined are approximately $1,700,000 per day and thus our current global worst case all in daily cash burn rate is approximately $7,800,000 per day, meaning we have sufficient liquidity runway in a worst case no revenue full pay environment until at least the Q3 of 2021. But we will of course continue to actively assess our cash OpEx uses and liquidity position as the situation evolves and we'll make adjustments as required based on the facts on the ground including likely reopening dates.
On the CapEx front, we have postponed the Wynn Las Vegas room remodel which slated to begin in June, conserving approximately $170,000,000 of cash and liquidity. We're fortunate to have the highest quality room product in Las Vegas and we plan to revisit the project again as we plan for 2021. We will also be very judicious with our global normal course maintenance capital spending over the coming quarters, only proceeding with our highest priority projects. Our pre construction planning work on the Crystal Pavilion at Wynn Palace continues with our in house development team, as Matt mentioned. And in order to further solidify the company's financial position, our Board, along with senior management, have decided to temporarily suspend the company's quarterly dividend, preserving over $100,000,000 of liquidity per quarter.
We look forward to resuming the dividend when business conditions permit. Lastly, I'll quickly note that our reported EBITDA for our U. S. Properties in the Q1 was negatively impacted by a $75,700,000 accrual associated with our commitment to pay our domestic team members full wages and benefits after quarter end from April 1 through May 15. $56,400,000 of this accrual was from Wynn Las Vegas and $19,300,000 was for Boston.
With that, we will now open up
the call to Q and A.
Thank you. Our first question comes from Carlo Santarelli from Deutsche Bank. Your line is now open.
Hey, Matt, Craig. How are you guys? Thanks for the comments. For starters, Matt, maybe you could talk a little bit about, obviously, we have some time now in Macau until kind of some of those quarantine and visa restrictions, IBS visa restrictions, believe a little bit. When you start thinking out a little bit, the summer months, how do you envision the ramp in business across the segments?
So just based on our limited experience between February 20 March 20, we definitely saw the VIP and premium segments come back faster. There's clearly pent up demand for activity. If you look at what's going on in Beijing and Shanghai, the go back to work and resume production campaign that has been launched, there's a lot of activity. So I do believe that there'll be demand for Macau without a doubt. I am also very happy that we're in the business of the premium and high end, which requires less people and more revenue.
So at Wynn, we're not looking for 100,000 people a day to be going through our properties. That's never been our business. We've always been focused on the premium end and I believe that that will definitely be the segment that comes back first in Macau.
And Carlo, I would just add to that. As Matt mentioned, when we reopened in February and into March, we got back to 25% to 30% of our Q4 'nineteen gaming volumes. That really reduced the cash burn rate and frankly wasn't far off from the 45% or so of Q4 2019 GGR volumes that we need to hit EBITDA breakeven. So you'll have your own view of Macau wide GGR mix, share, etcetera. But whether it's VIP or premium mass led, we feel like the snapback will be pretty quick and that will obviously help our cash flow position there.
And Craig, of that 45% that's breakeven, I'm assuming you're
generated in the 4Q that you mentioned?
Yes.
Great. And then if I
could, just one follow-up for either of you. How much do you
guys think about the presence more or less of the 5 to 10 year view that Beijing Macau will take as it pertains to the 2nd or as it pertains to the concession renewal process and the importance of the capital spending. Clearly, you guys have the Crystal Pavilion and whatnot. But in terms of that renewal process, how much do you think that 5 to 10 year plan will factor into the thinking around the concession renewals?
So Carla, it's Matt. Again, we believe in what's happening in the Greater Bay Area in Macau and China. We are focused on doing the best we can to be a part of it and to invest in our people, our communities and our assets. So we put that plan together at the beginning of this year. It's still our plan.
We're focused on it. We think it makes a lot of sense for the community, for our people and for our shareholders. So that's really where we are and that's we're not we have not deviated from that plan.
Thank you very much guys.
Next question is from Joe Greff with JPMorgan. Your line is now open.
Good afternoon everyone. Matt, thank you for your prepared comments and thoughts. The first question relates to Macau. Obviously, you saw strength relative strength
in the VIP and the
premium segments in that period in February March. Can you talk about the status of your top junkets or the top junkets in Macau? What kind of financial position are they in? How mindful do we all have to be of this as a consideration to assess the VIP segment recovery? Would you be willing and or are you
a very close contact with we're obviously in very close contact with the large junkets there. I think everyone's trying to understand what that the larger junket operators are still okay on the liquidity side and everybody is just waiting to see what's going to happen. Ian, do you have any thoughts on that?
Anecdotally, locally, the junkets are just like the rest of us. They're waiting for the borders to ease and to get back into business. They've, like the rest of us, have kept their teams together in anticipation of business picking up. We can see the pent up demand. I think the May holiday has given people a lot of encouragement.
Something we talk about locally is the Macau advantage. We have proximity to China. We've got proximity to Guangdong, and the biggest, wealthiest province in China, 114,000,000 people. Of the 49 IVS Cities in China, 20 one of them are in Guangdong. It looks like our borders will be opening up over the next couple of months.
And I think everybody's anticipating building business very nicely. There is pent up demand in China. What we've seen over the May holiday is a lot of resort and luxury driven travel, a lot of family driven travel, which is very good for kol Thai. We saw Chimelong Resort just a stone's throw from Macau, absolutely packed over the May holiday. There are people that want to come and once the borders ease, we will have players and we will have customers back and the junkets are in the same position as us.
And Ian, I think just to clarify, the May holiday traffic that we witnessed was in Mainland China, not necessarily in Sao. But Chimlin, which is right in Hinchin Island, had really strong volumes and as well as lots of resorts around. So I think that's a great point. There's clear demand for the product that we offer.
Great. Thank you. And then switching over to Las Vegas, can
you talk about your current thoughts on how you're opening? I'm presuming it's going to be one of the 2 assets on the Strip. And when you think of what sort of percentage of revenue, EBITDA breakeven thresholds you need there, That would be helpful in understanding how you're thinking that. That's all for me.
Sure. So Joe, I'll start off with In Las Vegas, we're still working through what our opening plan is going to look like. We're working closely with the state officials and the Gaming Control Board here. It's unclear if it'll just be one of the 2 assets. I'm currently given all of the occupancy limitations that we will have self imposed, it will it could very likely be both of the assets open, but just with occupancy restrictions.
We do anticipate as we get closer to an opening weeks from now that there will be pent up demand in the leisure segment. We've seen that in a lot of surveys that have happened out there. And so we're working through that. I think each day people's mentality changes depending on where they live and what they're experiencing. And if you look at what's happening in Texas right now, with the various food and beverage outlets, if you look at what's happening on the beaches in Southern California, we're going to have a very safe environment, but we will have an environment that I think a lot of people want to come participate in.
Clearly, we won't be opening large mass gathering places, nightclubs or convention areas or shows, But we will be opening most of our restaurants and working with our retail partners to try to have an experience that will be safe and fun. So Marilyn, do you have anything you want to add to that?
No, I think that's really the essence of what we're going to do. I mean, we do see demand and we see the leisure market coming back, the drive in market for sure. The casino customers, the value oriented ones and some of our hosted customers can't wait to come through the door. But whatever we open, it's going to be an integrated resort experience that will rival any other hotel that is going to be opening up any other resort that will open up.
And Joe, the answer to your question on the it's Craig here. The answer to your question on occupancy, it really depends on how much of the campus we open, as Matt alluded to, which we'll make that decision based on public health considerations and our view of demand over the course of 'twenty looking forward over the course of all of 2020. So depending upon what we open, we would expect to breakeven at the 50% to 60% occupancy level.
Great. Thank you.
Next question is from Felicia Hendrix from Barclays. Your line is now open.
Hi, thanks so much. Good to hear from you all. Thanks for all the detailed comments. Craig, on liquidity, you've given us a decent amount of information. Just wondering if we could take it one step further.
Just in the extreme case that you did need to access more liquidity, just wondering if you could walk us through the incremental levers you have to pull both in Macau and on the U. S. Side?
Sure. I think you saw us access the market just last month. And so we have the we think we have the ability to do that to the extent that we need to. But with $3,400,000,000 on the balance sheet and really being at peak burn now, I don't anticipate we'll need to do that. But I think the capital markets showed that they were more than happy to embrace us.
Okay. So there's no limitation in any of your debt? Any of your facilities The company
in Macau is at the concessionaire level on a senior secured basis. So we would have access to the bond market at WML. And in the U. S, we actually got a covenant waiver, even though that's also a senior secured covenant. We got a covenant waiver on our U.
S. Facility. So we have ample room to add liquidity to the extent we need it, though again, I don't anticipate we will.
Yes, great. Thank you. And then Craig, you also just was mentioning CapEx. I was just wondering if you could get into a little bit more detail, walk us through kind of how you're thinking about capital spending for this year and next year. And you did mention some of that relative to Vegas.
With things shut, does that give you an opportunity to get a head start on or accelerate your room remodel plan?
Hey, Puig, it's Matt. So we went through our long list of capital projects in Massachusetts, Las Vegas and in Macau. And we've effectively put all of the short term things on hold outside of something that's under construction now. For example, Delilah in Las Vegas that was halfway through construction, we're going to finish that. But the large projects, room remodels, some of the other things that we were looking at, we have put on hold until we're cash flow positive.
So we're really focused on maintaining our liquidity right now.
Okay. That's helpful. Thank you.
Our next question is from Shaun Kelley with Bank of America. Your line is now open.
Great. Thank you. And just wanted to pass along my sentiments and thanks for also just keeping all of the employees on the payroll. I mean, you're one of the few operators across all of the companies that we cover that's doing that. And I think that needs to be said, that's a really big statement to your local communities.
So I think that's a big deal. But Matt, just overall, if you could comment just you mentioned in your prepared remarks, you're talking to a number of CEOs and partners out there. I was curious, specifically on if any of those conversations have moved into, specifically airline partners as it relates to Lyft into Las Vegas, because that's pretty important, particularly as you get into the higher price points and it's obviously, going to need to be something that works together with the broader industry out there. So just how are you thinking about that?
Yes, that's a great question, Sean. And we I've personally spoken to the airlines that have lots of lift capacity in particular into Las Vegas. And in the month of May and in June, there's a dramatic reduction in lift capacity as you can imagine. Some of the large airlines are starting to put their plans out, their sanitization plans, which we've been encouraging them to be transparent and to start putting that out. I think that there's continued disagreement between the airlines and TSA on temperature checks, which is kind of a logistical problem as to are they going to do them and if so, who's doing them.
So there's some behind the scenes work that needs to happen. And but the airlines are definitely focused on it and they're contracting the lift now. But based on my conversations, it's been fairly short term because trying to predict what demand will be 60 or 90 days from now is almost impossible, given the speed of the information in the economy that we're all learning every day.
Thanks for that. And then maybe the other question along the same dynamic would just be, having been through one crisis not terribly long ago. The pricing strategy within Vegas and across the Strip is also going to be an important variable here. And obviously, you're positioned very much at the premium end, but you have to be impacted by what else is going on in the market. So how do you think or how are you thinking about both the sort of the balance of new supply coming back along relative to how you can kind of retain some rate integrity and because you kind of have to have both those variables work for this to be a successful reopening.
So just how are you thinking about managing it?
Yes, I think that on the supply side that in the early days, I don't think not a lot is going to reopen in my I don't know how many resorts are going to reopen, but it's certainly not even close to the entire Las Vegas Strip. Clearly, our base of group in the is well, not is not existent in the 1st few months after we reopened. So we're really focused on casino and on leisure and trying to capture a disproportionate amount of that market, people coming to Las Vegas. So I think that it will be a slow ramp because the group will not be there, but there's also not a lot of I don't think there'll be a lot of supply either. So our pricing power, I believe, will help dictate how full we want our properties to be.
Next question comes from Thomas Allen with Morgan Stanley. Your line is now open.
Hey, good afternoon. So, Matt, you were at the White House last week meeting with the President. What do you learn there in terms of, 1, the government's expectation in terms of the pace of recovery? And 2, any interesting comments from other corporates throughout demand to start coming back to Vegas? Thanks.
I think there's clearly a focus on a safe reopening of the economy. I think that the it's obvious what's happening with this rapidly decelerating curve with our economy that has to be blunted as we blunted the growth of COVID-nineteen. And so there was a real focus on how to do that, how to in testing is continuing to be real point of focus. And on that, I think that there's been tremendous progress in terms of testing and testing capacity. 100 and 100 of 1000 of tests likely will be performed over the next couple of weeks on a daily basis.
In Las Vegas, like I said, we're going to have the ability working with UMC when we open it, when any employee and any customer that wants the swab test, you can get it. We have on-site. Anybody, we have 3 various antibody tests that are going through EUA approval right now and one that already has it that we're working on, that will also be available. So I think that until it's a commodity, businesses themselves need to work with medical communities, to make sure that those are available. And so we're definitely doing that.
But there was a clear focus on how to reopen the economy and to start moving in that direction.
Okay. And then just as my follow-up question, LVS when they reported 2 weeks ago talked about being more interested in M and A right now. Do think there will be more industry consolidation and when does the company fit in? Thanks.
Yes, I'm not sure about that. I think that during these times, there's usually transactions that are out there and there could be some really interesting assets that could come up that I think everybody will be watching. Helpful.
Our next question is from Harry Curtis with Instinet. Your line is now open.
Hello, everyone. My first question relates to just the timing of opening in Macau. What do you think the authorities are waiting for, particularly given the opening of Chin Long and the fact that there haven't been any cases of COVID in Macau for weeks?
I'll start with this and then turn it over to Ian. So I think situation has been handled really well in Macau. I think it's been almost 28 days without a case. There's been clarity, daily press conferences, lots of interaction, operators are focused on it. Employees are being very compliant in terms of wearing mask and what they need to be doing and hand sanitization.
And there seems to be a really deep collaboration and cooperation with Macau and Guangdong in terms of these health checks and to begin to move in a very reasonable and data driven way. So to me, it seems like every 2 weeks there's progress, there's real progress and in a way that is measurable and people can understand. Ian, what do you think for Linda?
Steve, this is Ian. The Chief Executive in his policy address said that when Macau and the region of Guangdong are stable, that they will look at the process of reopening the border restrictions. They've been very methodical about it. When we faced our two levels of risk with the pandemic, they were extremely quick and decisive, which we appreciated. And now we really appreciate the fact that it's about safety first.
They're phasing the lifting of restrictions. They've had a very progressive development over the last 2 weeks. The first stage was allowing teachers and students based in Zhuhai, who live in Zhuhai and come over to Macau to attend school and teachers to work. And so they've gone through that process. That process involved introducing relative mass testing for the individuals, and that was very successfully done.
We're now looking at Macau people that are working in Macau, but actually living in Zhuhai. They're the next stage of the testing process. The merging and synchronizing of the 2 health codes for Guangdong and for Macau involved a lot of regional cooperation between government departments. They're deep in dialogue about that. The system has been set up and now they're trialing it.
And they've already altered the border open and closure hours back to where they were previously. So there's a lot of things happening. One of the great outcomes of this is the dialogue between Guangdong and Macau at a government departmental level, this augurs really well for the future. When you look at Henshin Island and how that opens up to Macau and how we become a bigger part of the Greater Bay Area. So we appreciate the sequencing, the measured approach and the safety first approach, but it's happening and it's imminent.
Maybe as a follow-up, Ian, do you think that testing for customers wanting to either get a Visa or by definition cross the border, do you think testing is going to be a prerequisite?
There's no clarity on that right now, Harry.
Okay. All right. And you also mentioned, Matt, testing in Vegas. What about are you testing your employees in Macau as well?
No. This was just the University Medical Center and Wynn Las Vegas reaching that agreement in Macau because the government has done a very good job there. There are tests available for people that need them. My understanding is that teachers are getting tested when they're going in. And so I think it's a little bit of a different situation there.
What we noticed here in Las Vegas is there was testing capacity, but nobody prescribing tests, because people weren't hitting their 5 or 6 symptoms. So we decided to cut through that and make a direct partnership with the research hospital so that our employees would have the ability to get tested.
Thanks everybody. Appreciate it.
Thanks Harry.
Our next question is from Stephen Grambling with Goldman Sachs. Your line is now open.
Thanks. Two questions. First, as a follow-up to Thomas' question on consolidation, what would make an asset more interesting or less interesting during these times or surface willing sellers? And then second, but perhaps related in some ways, how is your thought process and the right capital structure specific to the right leverage levels and amount of liquidity evolve if we think longer term given this experience? Thanks.
So from my perspective on the consolidation, our expertise has been and I think always will be development and running the best assets. So we are not actively thinking about M and A right now. We're actively thinking about how do we have the industry leading assets in the markets where we operate and take market share as we open. And then how do we develop the land that we have around those over the longer period of time. So that's really our strategic goal right now.
Craig, do you want to take the follow-up?
Sure. On the capital structure side,
I would
just reiterate liquidity, liquidity, liquidity is king. We have always maintained a pretty healthy amount of liquidity and I think that that has served us well in this process. I think it's a little too early to start talking about target leverage levels. We need to actually get back to generating cash flow first. But certainly, maintenance of liquidity was and is a really important part of capital structure management in times like this.
Great. Thanks so much.
I guess we'll take our last question. Operator?
All right. The final question is from David Katz with Jefferies. Your line is now open.
Hi everyone. Thank you for taking my question. Look, I think you've given an awful lot of detail, and Matt, you've obviously put the company's resources behind doing a lot of research. What thoughts or concerns or views do you have about the prospect of opening up in kind of a choppy fashion or any kind of resurgence that could delay the ramp up. Not that you would predict it one way or the other, but perhaps provide contingencies beyond just the financial ones for it?
That's something that I think about and we think about every day, which is why we've continued to encourage phased openings and watch the data. So I think from a health and safety perspective, we've done I believe just about everything that we could possibly think of. And if there are other good ideas, we will implement them. But what we're going to do is think about it incrementally, watch it and then we have to watch the data from all the communities around us and what's going on. So do I think that there'll be moments when we all will need to pull back a little bit or when we can push forward a little faster?
Of course. And so we need to make sure that our teams are prepared for that and that we can learn as we go.
Okay. Thank you very much. Appreciate all the detail.
Thanks, David. So thank you everybody for joining us today. We hope everybody stays safe and healthy and we'll talk to you next quarter.
Thanks everyone.
This concludes today's call. Thank you for your participation. You may disconnect at this time.