拉斯維加斯金沙集團 (LVS) 2012 Q1 法說會逐字稿

Good afternoon.

My name is Ashley, and I will be your conference operator today.

At this time I would like to welcome everyone to the Las Vegas Sands Corporate first-quarter earnings conference call.

(Operator Instructions).

Thank you.

I would now like to turn the conference over to Mr.

Daniel Briggs, Vice President of Investor Relations.

Mr.

Briggs, you may begin your conference.

Thank you, operator.

Before I turn the call over to Mr.

Adelson, let me remind you that today's conference call will contain forward-looking statements that we are making under the Safe Harbor provisions of federal securities law.

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 net income, adjusted diluted EPS and adjusted property EBITDA, which are non-GAAP measures.

A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures are included in the press release.

Please note that this presentation is being recorded.

With that, let me please introduce our Chairman, Mr.

Sheldon G.

Adelson.

Thank you all for joining us today.

Before we go to Q&A, let me make some brief opening remarks.

I want to apologize in advance if I -- if you hear some paper rattling because I have got several pages that people have given me trying to take information from papers.

We are very pleased with the overall financial results for the quarter.

As you saw in the press release, we have set an all-time industrywide record.

No Company in our industry has ever achieved $1 billion EBITDA for a quarter.

We are very proud of that, and we hope it will be the first of many records -- well, we know it is the first of many records that we are already setting and that we hope it will be the beginning of the continuation of a lot more records that we are going to set.

We also -- the earnings-per-share went up 89% from last year to $0.70.

I know there were a lot of estimates coming out in the 50s -- in the $0.52, $0.53.

I even saw an analyst last night that jumped his estimate the day before our earnings release from $0.56 to $0.61 or something like that.

That was probably the highest.

Our net revenue after -- you know, according to GAAP -- net revenue increased 31% to $2.76 billion.

Now, frankly, the gross revenue was somewhat higher, and I have been having discussions with our auditors, Price Waterhouse, as to why the industry reports net.

And if I have read the rules regarding it under FASB, financial standards -- the Financial Accounting Standards Board, under their rules, I read that, and I have some question about that.

In any event, it would be up to $3 point-something billion.

The EBITDA margin is an industry-leading EBITDA margin of 38.6%.

In the case of Macao, we have results that are in excess of our co-fair share.

This is the 11th consecutive quarter of EBITDA growth, and I have the chart in front of me.

And it comes to a whopping -- instead of CAGR, compound annual growth rate, we have got -- I don't know how to pronounce it -- CAGR -- compound quarterly growth rate of 14.2% from quarter to quarter.

I am looking at a bar chart.

For the last 11 quarters, we have gone from $247.6 billion EBITDA -- million EBITDA to $1,070,000,000 EBITDA.

I suppose that might have surprised a few of you guys because nobody even approached $1 billion, and most of the analysts' projections were in the -- there were even some in the $800 millions, some in the low $900 millions.

In earnings-per-share, we had a 47.1% increase in earnings-per-share.

In gross revenue we had a 9.4% increase, and in net revenue, we had a 9.1% increase.

There was -- let me look at our two biggest markets.

Our business in Macao was has never been in a stronger position.

Our mass business is growing, our VIP efforts are working, and our non-gaming revenue, the backbone of the IR model, also increased significantly.

We have record consolidated non-rolling drop of $1.92 billion, up 10% versus 2011.

We are cooking on all cylinders.

We had record consolidated slot handle up 53% to $2.1 billion.

Retail mall revenue increased 30% versus last year, and I would like to address the issue that somebody talked about that we were truing up or loading up our books to show more income, more retail income in the fourth quarter of the year.

So let me point something out to you.

In the United States, I have seen figures that -- and you guys would probably know better than I, but I'm only going back by memory -- that 40% of annual sales are done between Thanksgiving and Christmas.

So the larger percentage of sales over there are done during these periods, during the same period.

Hong Kong is not just -- it does not have exactly the same holiday the mainland does.

There are a lot of Christians in Hong Kong.

There is a lot of Christmas shopping going on from different visitors to Macao.

And the interesting part about it is that it is natural that in the fourth quarter because of the relationship with the -- there is no truing up.

We don't do true-ups.

But where is something is required to do a true-up, we will do it.

But this is not a policy nor a practice to say we are going to pump up the figures in the last quarter of the year.

The reason why it is the last period of the year is because that is when people exceed the percentage -- it is called the natural breakpoint -- where they exceed the percentage of revenue that constitutes the base rent, and they go beyond the natural breakpoint.

And, therefore, they go into excess rent.

So we get excess rent during that period, and that is why it is substantially more during that fourth quarter than there are in other quarters because we break through the percentage rent.

Now there are some retailers that pay a percentage on a monthly basis because they are doing so much more than the basic rent, and there are some retailers that everybody reports on -- well, not everybody, but the majority of the retailers of the several hundred retailers we have report on a monthly basis, and there were some that report quarterly.

I think there is even some that report on an annual basis.

So, as far as retail is concerned, there is no truing up.

The percentages and the income is the way that that occurs.

Hotel revenue is up 19% versus last year, and we have now -- we will have 10,000 hotel rooms before this time next year.

We will open -- our plans are to open the second phase, Phase IIA I guess it is called of Cotai Central by September, mid-September, and I think the last phase will go to either December or January, probably January.

So that will give us a total of close to 10,000 rooms, and that represented 50% of the hotel room supply in the entire city of Macao.

As far as four-star and five-star rooms are concerned, we are way up there with the high percentage anyway.

Referring to what is going on in Singapore, we had another very strong quarter.

The mass win per day increased 21% to $4.47 million per day, $4,470,000 per day, and that is when the rolling volume was up 26% over last year's quarter one.

I would like to address questions that have been brought up before where people think that we have plateaued or the market has plateaued.

Let me point out to you that there is, if you take 73% of about $34 billion that was conducted in Macao in 2011, you come to about $25 billion of highroller VIP plus.

Now all those players don't come down to -- they don't represent the fertile opportunity that 100% of those VIP players are going to come to Singapore on one weekend.

There will be a turnover.

There will be a revolving number of our people coming from Macao, just like those people that come -- that are going to Macao that typically also go to Las Vegas; they go to Sydney, Australia, they go to Melbourne; they go to other places to play.

There is a very healthy market of $25 billion of VIP play that occurred in 2011 or already a quarter beyond that that represents a truly fertile opportunity for us to increase and to get beyond what people think potentially is a plateau in the number of VIP players.

We are constantly surprised at who they are, the number of people, how they come out of the woodwork and how many there are in the world.

There was a time many years ago, 10, 15 years ago, that people thought that in the entire world there were as few as 150 VIP players.

We sometimes get that in a few days.

A week or two weeks or whatever.

So there are an awful lot of people that are playing all around the world and from many different countries that nobody even thought of before.

So the word plateau in terms of Asia is not in our vocabulary.

Let's see, the high-margin segments continue to grow.

Our hotel room revenue was up 38% over 2011, and our mall revenue was up 25% over 2011.

As in Macao, Marina Bay Sands also achieved a new record property EBITDA of $473 million.

And clearly if you look at the last 11 quarters, you see we have grown an average of 14.2% quarter to quarter and a compound quarterly annual -- compound quarter --

Compound quarter growth rate.

That's right.

It is one of those.

And if you look at that, we are just going to continue quarter by quarter.

I know there are a lot of people out there that there are some analysts out there who I have seen there seem to suggest that they either are playing on a quarter to quarter basis -- this Company is out to attract long-term value investors, investors who want to invest in a Company that pays dividend, investors that want to be in a special company, and that we said to some degree to you.

At our September Investor Day that we had in New York, we went out -- there was six companies that fit into several categories.

I will tell you there are fewer than that today, and let me tell you what they are.

There are 12,222 publicly traded companies on US exchanges.

The next category is market capitalization.

There are 155 over $20 billion, and we are pushing back up against $50 billion.

And revenue compound annual growth rate of over 20%, there were 12 companies.

So starting off with 12,000 plus companies, we are now down to 12 that have compound annual growth of 20%.

There are in 2013 estimated free flow that will yield 7.5% to only three companies.

So now we are down to three out of 12,000.

And the companies that pay current dividend, all this plus, including companies who pay dividends, there are only two, LVS and Apple.

Considering what Apple did today, let's put Apple first and say Apple and LVS.

I think it puts us in a very unique position to be considered a value investment.

The second item is that -- the next item I would like to address is that somebody came up with the idea that there was going to be a seventh concessionaire in Macao.

I don't know whether they are reading the press or looking at press clippings or talking to the government, but the government -- or listening to the government.

But the government has said both in the prior chief executive administration and the current administration, 2009 was the year they were going to reconsider it.

They said no, no, no.

If there is anybody that does not understand what no means, please give me a call offline, and I will be happy to explain it to you.

There was also somebody who said that -- somebody speculated that we are going to have to move 386 or someodd number of tables from our other properties.

Let me address that.

On a daily basis, we are always shuffling tables around, moving them from one place to the other, changing the game of play from, say, a blackjack to a baccarat or vice versa.

And we are always trying on a good operational basis to improve performance of every one of our products whether it is a table, a slot or an APG.

And so we always move tables around both within each property and in between properties.

Now we have to get approval from the government every time we move it, so we do that.

The government is committed to lenders to provide 400 tables.

They gave us 200 tables for the opening of the first of the two mass casinos, and they are going to give us presumably the second 200 tables when we go to open our second casino.

The casino in Lot 6 is part of Cotai Central.

So I don't know how somebody knows so much about the government.

For those people that are interested that know more than we know and maybe you will know more ostensibly more than the government knows, if you would like to apply for a job with us as a government relations person, maybe we can improve our flow of information in a more qualitative way.

I would also like to straighten out another issue, and that is there has been a lot of mention of $35 billion that we are going to spend in Europe, for Europe and Spain for the European market.

That figure was taken from a press conference that I conducted at the opening of the Sands Cotai Central in April, I think, 11th where I answered the question vis-a-vis what was the total project going to cost.

I would like to explain that, so we can put that issue, that false issue too bed once and for all.

We are going to build the property -- at least that is the way it is planned -- over a nine-year period.

That will include building four 3000 room hotel integrated resorts, hotel room integrated resorts every three years.

The first one will start off, and we are only estimating that.

We have not drawn up plans.

We don't have the blueprints.

We don't know exactly.

We have had quantity surveyors -- these are independent estimators of construction -- give us numbers.

So the most we can estimate at this time is that each property will go between $2 billion and $3 billion per property.

So being from [8 to 12], and as Ken Kay announced in our September Investor Day meeting, that 25% to 35% of that will be equity.

So let's say the largest amount of money this Company will be expected to put out over a three-year period is $4 billion in equity.

Not $35 billion.

That is only the first phase.

I want to make it clear for about the 942 time that I have said to the market we will not go into any development where we don't see the 20% cash-on-cash return.

So I will repeat that for the 975th time.

No investment without a 20% cash-on-cash return.

So then we will take the money that we are earning in phase one, and we will have another three years to take that amount of money that we are earning to put up for the equity for phase two.

So so far we are up to about, give or take, $3 billion to $4 billion in equity.

And then in phases one and one, we will earn enough money over the following three years so that we can finance almost fully phase three.

So so far we are in $4 billion.

If anybody else has any arithmetic over and above that, I would be happy to receive it.

But this is what I know we are going to do, and since I'm the CEO and Chairman, our Board has agreed with this.

This has been discussed ad infinitum and within our own Company, and that is what we intend to do.

20% cash-on-cash return, otherwise we don't go.

Equity goes up to the first phase only, and the equity we earn for the second phase will come out of the first phase operating results.

I don't think I could be any clearer than that.

Let's see, let me finish by talking about our development activities, and then we will open it up for questions.

Two weeks ago we opened the first phase of Sands Cotai Central.

As it ramps up, Cotai Central will add to the critical mass of rooms retail MICE to the Cotai Strip, which will make it an international destination for leisure business and conventions, and it will validate my original vision for what was then a swamp and a bay.

If anybody wants to see the pictures of what it was at that time, we will be happy to send it to you.

Just send me an e-mail.

We will then have accomplished the establishment of a Las Vegas in Asia, or, as I have said many times before, Asia's Las Vegas.

And what we intend to do in that respect we will have Europe's Las Vegas.

It will be either called Europa Vegas or EuroVegas or something like that.

So that is it.

I think that -- let me look at my papers.

I would like to tell you that in terms of Macao, we are extremely happy with the progress we are making in Macao.

As I have said in my last couple of earnings calls, we expect that our marketshare with Sands Cotai Central, which, by the way, is the only product opening over the next three years.

The only product opening -- there is no other construction underway.

I would also like to point to something else because everybody that did not want the product -- did not want Cotai Central in the first place because they did not think it was either ready or they did not think it was viable, or for whatever reason, all those people that did not want to have a piece of land in Cotai Strip, now will cut off their arms to get a piece of land in Cotai Strip.

I just want to remind everybody we bought, we paid for and we own Lot 3.

Lot 3 can hold 3600 rooms.

We are applying to the government for permission to move forward with that, and of course, that requires -- that will require an extension of time to build.

I might also point out that not in the history as Macao has the government ever required a piece of land because somebody did not build on it.

The government is a very cooperative, accommodating government, and the government likes -- they attribute the change in Macao to a leisure business convention destination to Sands China Ltd.

and our majority owned subsidiary, and, of course, our parent company, Las Vegas Sands Corp.

And they know that we have done more -- as a matter of fact, I saw a clipping recently that said that Sands we hope to petition the government.

They made a statement that the government should require her to put up convention space and shopping space in this and that and everything because Venetian has done such a good job on it, that she did not have to add to the MICE space that has to be done.

We have the biggest footprint at Macao in terms of hotel rooms, MICE space, retail, and they are all important visitation drivers.

There are no other development activities.

The government has not approved any development, and to the best of my knowledge, no land has been transferred to anybody, except Galaxy got the land at about the same time that we did.

One of the clippings said they are going to announce, the rumors are they are going to announce a non-gaming hotel on more rooms on the balance of the land.

And I understand they are putting it next to our exhibition center so they could take advantage of filling up some of the rooms from our MICE business.

So that is it.

I cannot -- I am very glad we are only one of two out of 12,222 companies.

And I just want to tell you that our whole team is here listening, and we would be happy to answer your questions at this time.

(Operator Instructions).

Joseph Greff, JPMorgan.

This was not going to be my first question, Sheldon, but since you brought up the topic of Spain, have you entered into a memorandum of understanding with either Madrid or Barcelona?

Do you know what the gaming tax rate is, the corporate tax rate?

I know you were trying to get some concessions on labor and things like that.

I guess how far along are you?

We are at the point where we are going to apply our Board of Directors over it.

It is a very big decision.

We are going to look at Madrid and Barcelona, and let's say we are on the cusp of having a decision.

But, at this time, we're a little difficulty in getting the whole schedule to be worked out that on any one day somebody is not available.

We will take as many board members as we can as soon as we can.

And I hope that we can -- I'm looking forward to doing a -- to having a decision of where it is going to be located and which parcel of land where the developers (technical difficulty) within the next month or so.

(technical difficulty)--

This is Mike Leven here.

Negotiations continue with both the government of Barcelona and Madrid.

We expect those negotiations to not only continue, but at some point, once we make the city decision, those negotiations that we agree upon go to legislation and for various legislators of the various governments involved.

And, at that particular time, when that legislation goes through the government, then it becomes public knowledge as to what is going to be happening.

What I would like to say is that it will be -- and I do feel (technical difficulty)-- in the world (technical difficulty)-- and we have to learn that we don't chase (technical difficulty)-- we have structured our deal that we are in it.

So we bring the (technical difficulty)--.

And everybody else can do this.

But nobody is going to spread the (technical difficulty)--.

It will be unveiled (technical difficulty)-- it will be a highly favorable rate.

Okay.

And then switching topics to Singapore and then I have a follow-up, after your competitors --

I just want to clear that.

I don't want the Spanish government to get a different opinion.

It will be a favorable rate compared to other jurisdictions throughout the world.

Okay.

And then switching over to a question on Singapore and then I have a quick follow-up after that.

Obviously Genting got two junkets approved for their property.

Can you share with us your strategy or your position weather or not you are sponsoring any applications in the near-term and what your views are there with the use of junkets or INIs there?

And then I have a quick follow-up?

Let me address that, Joe.

This is Joe, right?

Yes.

Very interesting when I was at the opening, another analyst, colleague of yours -- I don't know if he was from JPMorgan -- came over to me and he said, they talked about the advantage that RWS has.

Let me explain to you, you have got to understand what they mean by international marketing agents, and they specifically -- they don't call them junket reps.

The junket rep at Macao does three primary services -- one, brings the customer; two, provides and collects the credit; and three, shares commission with the customer; and four, somehow or other gets the money to us.

Now in Singapore, as we read the rules and regulations, the junket rep cannot share commission with anybody else.

So that takes away a major incentive for the junket reps -- for players to go through junket reps because there is a sharing of information.

Secondly, they cannot give out credit.

So that kills something else.

We compared the over 100 field salespeople that we have in various offices, particularly around Asia, with those two junket reps.

Because our customers, our field salespeople can bring in customers and get paid on a basis of productivity and -- probably amount of detail you are not interested in is how they get paid.

But the bottom line is they don't get a percentage of the role.

They don't share any of their commission.

They are called called junket reps here in Las Vegas, and a Las Vegas style junket rep is a field sales guy who gets a limited amount of money for bringing in a player based upon the theoretical play that the player plays or theoretical win.

In Singapore they call them international marketing agents because that is all they are.

They are salespeople that bring in a customer and I suppose they get paid.

They cannot provide credit, they cannot share the commission, so they are the equivalent of our more than 100 salespeople.

So we don't see that RWS has any advantage over us.

And for those kinds of international marketing agents, we already have over 100 of the equivalent of the function of those two international market agents.

So what are we going to have to do?

Well, let me be clear.

There is no reason for us to go after those, that kind of junket, that kind of INA.

Okay.

Then my final question and maybe, Ken, you can help me out here.

What was the positive hold impact on EBITDA in Singapore and in Las Vegas, and that will be it for me?

He was addressing the question, and frankly, I did not hear the question.

The question was on the hold -- (multiple speakers)

Okay.

Let me tell you what we have done.

We have -- I keep telling people it is not a quarterly hold rate whether it is plus or minus that should be adjusted.

If the hold rate is 3.3%, 3.5%, 4%, you have got to bring it back down to 2.85%.

We have prepared documents that show a 200-day moving average.

The 200-day moving average was 2.85% companywide.

It was a higher percentage in Singapore.

I'm sorry, I don't have it in front of me.

Somebody had it.

They did not give it to me.

I think Ken that somebody is about to give it to me.

Let's see, the total Macao properties is 2.90%, and -- sorry -- well, I cannot get into 421.

I can only -- because that includes part of the second quarter.

I can only go to the end of the first quarter.

You can give us the second quarter to date numbers.

The moving average is 2.90%, the Marina Bay Sands -- total Macao and Singapore properties 3.05% on a 200-day moving average.

So that is what counts.

Now if somebody wants to go to a more rapid evaluation, I would like to hold a contest.

We can have people guess on a quarterly basis, on a monthly basis, on a weekly basis, on a daily basis, an hourly basis and minute by minute.

And I would provide a multimillion dollar price for anybody who can guess and determine where our entire Company is going based upon win or loss or percentage of hold on a minute to minute basis.

I'm just being sarcastic about that.

3.31%, total Macao and Singapore properties, 3.05%.

Next question.

Shaun Kelley, Bank of America.

I wanted to ask a little bit more about Cotai Central.

I understand that the property has only been open for 15 days.

But I did want to see if you guys could give us any your early thoughts on any metrics that are coming out of the property, and, also maybe most importantly, what you are learning about cannibalization across the other properties?

Are you seeing any impact at some of your other resorts?

You know, I keep talking about cannibalization.

I keep telling everybody that critical mass in a supply-driven industry brings in more people; it does not cannibalize others.

We are trying to cannibalize our competitors and not cannibalize ourselves.

I cannot talk about anything that has occurred since April 1 because that is in the current quarter, and I urge you to turn -- to call this number again, maybe a different number, 90 days from now, and we will give you all the information you want.

Okay, great.

I --

I've got to tell you I see no reason that our 14.2% growth per quarter over the 11 quarters won't continue.

Because every quarter we do the earnings call, everybody -- and, by the way, for all except four of those quarters, it is all organic growth.

Because we opened up Singapore.

It became organic with us.

It became a legacy property.

And from that point on, we have gone, I think, more than 14.2%.

But over the last 11 quarters, the spread is 14.2% quarterly (technical difficulty)-- .

Okay.

(technical difficulty)-- Cotai Central, all you have to do is look at our history, look at the position that we occupy in the market.

I don't see any other company earning $1,070,000,000 EBITDA for one quarter, so there must be something we are doing right.

Totally understandable.

We will check back on that.

So I guess the second would be on Singapore.

I just wanted to ask, there's a lot of questions around sequential improvement in the market and some of the seasonality there.

It does look like volumes came back on the VIP side.

So I just wanted to get a sense of historically, if you look at visitation patterns, Q1 and Q2 look like they will be the strongest.

Does that still seem like a reasonable expectation as we think about modeling what you guys are seeing there, and how much do you think Chinese New Year really drove some of the activity now that you guys have had a chance to digest that?

Frankly, I'm not as smart as Goldstein.

I think he understood the question better than I did.

And the same thing for Mike Leven.

Do you guys want to answer that question because I did not understand it.

On the gaming side, we obviously never underestimate the impact of Chinese New Year's, and obviously that is our bread and butter quarter in this company vis-a-vis Asia, and there is no discount.

We did show nice growth, and I think year on year we are pleased with that.

Again, we are only in our ninth quarter of operating there.

So it is hard to predict seasonality, and it would be even more difficult to underestimate the importance of all the new infrastructure such as the increased terminal, increased road to China and to Singapore in general, the mass market growth out of both Indonesia and Malaysia.

But I think we are very confident that, if you look at Singapore and its position in the market, it is a very, very exciting place to travel for Asians, especially, newly affluent Asians.

I think it continues to grow both at VIP and mass side.

Again, being one of two competitors there is a huge advantage.

A duopoly situation is a huge advantage for us and RWS.

Singapore set a new quarterly record for us results-wise.

I don't think there is any question there is growth in Singapore in the future.

It is hard for me to determine, except for Chinese New Year's (technical difficulty)-- growth versus third quarter within the quarter.

Fourth is obviously challenged as the summer is in there.

But we see bright days ahead with the cruise terminal, the botanical gardens, the growth of tourism infrastructure, etc.

and the affluence throughout Asia.

I think it bodes well for our growth (technical difficulty)-- in that market.

Okay.

Thanks, Rob.

And I guess last question maybe for you as well.

I have gotten a few questions from investors on the margins at the Four Seasons.

Obviously there is some negative mix from all the junket initiatives.

But the question is, is this probably a reasonable run-rate in the low 20s just given where the junket business has stabilized, or is there anything else in that number that people should be aware of?

That is it.

Good question.

I'm glad you asked it.

The Four Seasons had, first of all, is a non-gaming variable in there.

The fourth quarter versus the first quarter is down by $13 million as it relates to our retail operations, and I cannot -- I will not go into details why.

But, suffice to say, there is a $13 million quarter-on-quarter miss there.

You should know that we are very pleased with what has happened at the Four Seasons.

Rolling volume is up 4 times from the first quarter of 2011 to the first quarter of 2012, so I filled that back.

Unfortunately we did experience heavy concentration on our win-based versus volume-based commissions.

It cost us about $10 million to $11 million of additional compensation, and that was a big bang to our numbers.

Across the entire portfolio, to put your mind at rest, we ran about $800 million.

We were at 11% plus in the margin.

We feel good about that.

We still underperformed about a point.

There is concern in the marketplace I know as it relates to our bonus program, and I think it is important to say that $800 million of gaming win out of that segment, we did less than $3.2 million.

So it is $800 million versus $3.2 million out of these huge junkets that experience our bonus program.

So I think what you are seeing is I'm disappointed because I think we had a much better quarter out of the Plaza.

We got -- we saw solid somewhat vis-a-vis the win-based versus volume-based.

We got hurt on the retail comparison, and I think in normal operating we should have done -- we should have had normalized profit of roughly 4 times what we did in the first quarter of 2011 and twice what we did in the fourth quarter.

So I have a lot of confidence.

I think what David has achieved over there, David Sisk, is extraordinary.

Our growth for the first time in the junket segment exceeds the market across the board.

I see even brighter days ahead for us in that segment as we get stronger in Cotai Central.

And we have no fears whatsoever that the Plaza is on its way both from the mass, the retail and especially in the junket segment is performing very, very strong.

I want to get into the -- put aside the retail list.

Look, the retail venue of our assets is so great that we can eliminate -- almost completely eliminate on -- if that were included as cash and we are able to monetize that, which we don't want to at this point, it would pay off all of our debt, and we would essentially be on a net cash basis, including the monetization of retail, debt-free.

I want to point out to you that -- I don't understand -- you take one of our four properties, and to make it a valuation, well, that is liable to hurt.

But we can get down as steadily as estimating the impact of every hour's worth of activity.

I want to plot out that from the first quarter of 2011 (technical difficulty)-- 2012, our gross gaming revenue went up 32%.

Our gross rolling revenue went up 40%, and that was helped by a big jump in the Four Seasons in the Plaza Casino.

Our non-rolling table revenue went up 19%, and our slot revenue went up 21%.

Those are the numbers.

If you want to -- we think it would be an exaggeration to say that one of the properties did not perform as good as somebody expected, that everything is going to hell in a handbasket, I would strongly suggest that that would be an overreaction and an overexaggeration to the reality.

We have got a 14.2% quarter to quarter EBITDA, and that is what really counts.

Just to close the door on that, in the first quarter of 2011, we rolled out [2.375].

We did make $8 million on that.

This year we rolled [10.7].

We should have made $39 million normalized, if you take out all the variations.

So $30 million plus year-on-year growth in that segment profit-wise is, to my way of thinking, is just great, and I think we are going to be very strong in that segment.

And, Rob, just talk about the junket segment right there?

Just junket?

Just junket without direct VIP.

Our mass business in Plaza is off the charts.

We should get more tables in there (technical difficulty)--

Got it.

Thank you for all the extra color.

Really appreciate it.

Mark Strawn, Morgan Stanley.

Just one question for me.

On the mass side in Macao, just the business is growing nicely there on a sequential and a year-over-year basis, but it still growing slightly slower than the overall market.

You talked about what kind of steps you are taking to narrow --?

(multiple speakers).

On a longer-term basis, that is true, but on this quarter, we grew in excess of our fair share.

Okay.

Got it.

And just in times of (multiple speakers) think about the steps you are going to take to continue to grow that business and when and how you see Cotai Central contributing to that?

I think this company (multiple speakers).

I think we all know -- there is no confusion here, that what this company has is probably the most dramatic opportunity in the history of gaming to be very, very strong in the mass segment.

I think we all recognize the junket segment has ruled Macao, has been amazing, hard to believe over seven or eight years the growth we have seen.

I think the junkets are important, they mix everybody, but everyone can participate in that.

I think what LVS has and we are working hard on is maximizing our huge table end lodging advantage we have over there.

Because I think, at the end of the day, it is about capacity to gamble, a place to sleep, a shopping opportunity and a place to eat.

We have those in spades across the board.

I think that is our future.

I am back in Macao next month and meet with the team once again to review how we move forward in every one of our properties to get to that 45% business.

As nice as the junket business is, we are thrilled to be doing it, and it's a great business for us.

We all know the opportunity.

If we do our job and we get 1000 plus mass tables to perform the upper reach of the market at a 45 point margin, it will make these numbers look small.

So we are very focused on it.

We get it.

We see it.

We are very uniquely advantaged at this point.

I think the Cotai Strip opportunity is amazing for us, and that is our, focus and that is where our energies will be.

I want to point out that we have more tables than one out of six -- 1/6 of the concessionaires.

We have far more hotel rooms than one out of six concessionaires.

And I'm sure we have all the other amenities like MICE space far and away, hotel rooms far and away, restaurants far and away.

So it got to the point, where as I said earlier, we don't have to put in all this stuff because Venetian is doing it .

John Oh, CLSA.

I have two questions.

I will start off with Singapore.

Sheldon, you mentioned earlier that the INAs in Singapore are not allowed to extend any credit and hence there is not much value to your business.

Are you suggesting that you are not planning to work with them?

We already have 100 of those guys working for us.

In Singapore?

If there is an advantage for us to work to any third party to bring in more business and that will improve our business, we will work with them.

But, as I have said earlier, that the only thing they could do, the only things they could do is that exactly which are own 100 or so field salespeople can do.

And, as we understand it, they cannot do any more than that.

And if they cannot and if we are correct in interpreting the law, they cannot do any more than that, there is no reason for us to work with them -- to have them work for us.

It is Rob Goldstein.

To Sheldon's comment, we have spent the last decade developing what we think is a premier team in the business on the customer side as it relates to the high-end high net worth individual.

We are very proud of that team.

[Larry Hsu] runs it.

I think he is the best in the business, and I think our team is extraordinary off about Asia.

Andrew and Mark and the team and Jeremy over in Singapore have examined and continue to look at all aspects of the junket situation over there, and we will see where it goes.

Sheldon is obviously right.

At this point we don't see enough importance to jump into that.

But we will keep looking at it, and obviously we will not be disadvantaged if there is an opportunity there.

There is no advantage for a player to go to one of those junket reps with whom they cannot share the commission.

They can get the entire commission if they come directly to us, and we provide the credit.

So I don't know.

Somebody has got to explain to me what the advantage is.

I don't see it.

Okay.

And my follow-up question is, could you share with us your progress that you have made in Japan and also in Vietnam?

I know we have talked a lot about Spain, but what about some of these markets in Asia?

Where are we in the legislative process?

If you could give us an update?

And also where are you in terms of your negotiations in both these countries?

We are very heavily petitioning, let's call it in US terms, lobbying the government.

They don't have lobbying firms over there in Asia, but we are asking the government and doing what we can to contribute toward a regulatory structure in terms of the draft legislation.

We are sticking our $0.02 in there.

You probably have heard almost the same thing we have.

I would not want to get into anything you may not have heard because it will give the roadmap to our competitors.

So we are doing what it will take to get there.

I cannot tell you it is going to happen tomorrow.

I cannot tell you it will happen this year, but the possibility -- there are elections in Korea this year.

There are elections in Japan this year.

Those are the two primary properties we are still very heavily involved with Vietnam.

We are looking at Taiwan, although Taiwan has not -- Taiwan has passed a law for any of the islands from the mainland of Taiwan to [Kanman] and Matsu, adjacent to the PRC.

So they are talking -- I don't know if they have talked to the mainland.

So we are out there.

We have resources that we are applying in our petitioning our lobbying process, and it is very difficult to say when.

It could happen this year.

It can happen until next year.

Maybe it will happen not until the year after.

But we are right on top of it on every single move.

We are talking to the legislators.

We are helping to contribute to the drafting of the legislation.

We are touring a lot of people, a lot of government people that come from any of these countries.

They have all heard about Singapore.

They have been on to Singapore.

We will carry out a regular practice.

It is a revolving door of government people that are coming to see how Singapore works, and they typically want to follow that model.

That is all we can say about that.

Steven Kent, Goldman Sachs.

Just a couple of questions on Spain just to go back to it for a second because I still don't completely understand the idea of self-funding.

But the reason I bring it up, Sheldon, is that originally Macao and Singapore in some ways close going to be self-funding in project finance, and you are going to use the debt markets.

And then as you remember and we all remember, the debt markets closed down, and you had to put up your own capital.

So don't we run that same risk with Spain?

So even though you are saying it is not truly a $35 billion investment, you still have to have a solid capital market and a solid debt market in order to be successful here.

But then second, just on Spain, the core Asian player was such an important part of Macao and Singapore.

Obviously it is not going to be the same here in the middle of Europe.

So I want to understand that part of the strategy, too.

I did not understand --

And then one final point.

Sorry, Sheldon.

One final point.

With all of this capital and all of these opportunities ahead, what does that mean for dividends for 2012 and 2013 given some of the cash flow needs you have, or should we expect continued dividend increases at a solid pace?

We are not going to put a shovel in the ground without having the financing.

There is no more taking equity and putting 100% equity.

I attribute that to my former management who followed that practice.

We will have financing before we put a shovel in the ground.

And if the financing is not available, we are not putting the shovel in the ground.

So if we had the financing, we will finish the property.

If we start it, we will finish it, and if there is no financing available as things in the market change, then we will simply delay that.

It did not go on for many years.

It was a relatively short-term phenomenon where money was not available, but I have seen in the last 20 years money being and not being available almost on a revolving basis certainly no more than annually or a 12 to 15 month hiatus.

So we are not going to get into -- listen, it is like the expression -- fool me once, shame on you; fool me twice, shame on me.

We have already been -- we have already gotten caught in that mess, even though it was not my mess, but although I was the CEO, it was our mess, and we are not going to make -- we learned from it.

We are not going to make that same mistake again.

You guys have got dividends as well.

What about dividends?

Well, I have got to tell you, I do own a few shares in the company.

One can easily assume that I'm all in favor of dividends.

But I have also said to the Board I recuse myself on voting on it.

And if the Board voted for more dividends, it is not because they think I won it; it is because they think it is appropriate.

If they voted for less, which I don't think will happen, we will -- it is without my vote.

I recuse myself because I think I have a conflict here.

Mike, do you want to answer that?

I just want to answer Steve's question on the core Asian player that he talked about that.

We have talked about a lot of this.

Basically our forecast, what we have looked at is not getting on that core Asian player.

As you recall what Sheldon mentioned earlier in the day that we -- we must forecast a 20% return cash-on-cash return for our investment.

And those forecasts, those run-ups that we have been doing, we have had limited situations involving core Asian players.

However, we do have a distinct competitive advantage.

We used a very significant Air Force to bring players around.

You have seen major baccarat improvement here in Las Vegas.

That is as a result of the Air Force that we have.

There is nothing to say that we cannot bring players to Spain as well.

But, in the initial forecasting of our revenue and our bottom line in Spain that we are working on now subject to the government agreements we make, we have not counted on those Asian players.

There are many Asian players in Europe, but perhaps not at the caliber of the high-end that you see in Asia.

We have done about a dozen or more studies about the market in Europe, and we probably have more studies and more validation of our vision than any other project ever.

Afterall, this will be one of the largest projects ever built.

And I don't want to mention the number because I will be reading it in every journalist article or every analyst report.

But we have done an awful lot of study on this.

We feel quite confident.

And the bottom line is no 20% cash-on-cash return, no project.

Carlo Santarelli, Deutsche Bank.

I was just wondering if you could maybe help walk us through your table skew across Macao as Cotai Central opens and where we should expect to see the biggest hit?

And then just quickly address maybe the Singapore VIP event calendar over the rest of this year, if there is anything notable you guys are doing in certain quarters that we should be aware of, that would be helpful.

Thanks.

I could not hear the first --

It is Rob.

On the first question -- on the second question, that is easy enough.

The Chinese New Year has come and gone, and that is our event calendar for the first quarter.

There's holidays, and there's F1 races, and there's all the events that takes place throughout Singapore.

But, as far as a specific calendar, we do events there for our customers, but obviously Chinese New Year's is by far the most important event on the calendar.

There is F1.

There is our events currently, but I don't think there is anything worth mentioning that is going to be that earth-shattering and that important to you.

Got it.

And then my first question -- I don't know if you heard me -- it was more along the lines of how you will skew tables across Macao, i.e.

as you ramp Sands Cotai Central over time, and where we should expect to see the table count impacts at your existing properties?

As I said earlier, we are always trying to maximize the performance of the tables, and we routinely move tables around within a property and within multiple properties.

That does not answer the question?

No, that does, Sheldon.

I did not hear you before.

Thank you.

That makes us even.

I did not hear your question.

(multiple speakers)

Felicia Hendrix, Barclays.

Rob, guys, I know you are not going to give any -- you don't want to talk about Sands Cotai Central.

It makes sense given that it is next quarter's data.

But I'm just wondering if you could tell us how many VIP rooms and tables are open at the property now, and then maybe give us a schedule for how they are opening across the year?

Yes, we are still occupied in the month of May.

We opened -- all of the rooms are committed to.

We have some issues with some of the physical issues in the rooms and the hotel gaming done in April.

It is fully operational, except for one junket.

On the third week of May, the last junket rolls in there.

The 12 will be there.

We expect the full hit in the month of May, and we feel very, very good the complement of offerings we have assembled there.

Again, I think what that team has done is exemplary, and our advantage on the VIP side is that we have so much capacity now in Cotai that people want to be in our buildings.

We feel very confident that the product and the VIP rooms themselves -- you don't get a chance to see them, but they are very impressive -- and we get the best and the brightest as our junket operators, and they will be fully occupied in the month of May.

Great.

And then are you on track to start revamping the VIP product at The Venetian this summer?

Yes, we are.

We will start renovation shortly, and I think you will see a big change there, obviously overdue, and we had some (technical difficulty)-- push back with some customers and operators about it.

It has been a problem for us.

I think there is a lot of upside.

I am pleased with our performance at the VIP tables on that Venetian, but there is room to improve.

I think the new -- I'm sorry, the new tables -- the new rooms we are building at Venetian are very, very nice to look at, very pleasant, coupled with again our presence in Cotai in general, gives us an advantage for the performance of The Venetian as well.

Although (technical difficulty)--

Okay, thanks.

And then can I just take another stab at this question?

I think it is important to ask so that everybody is just on the same page and we are not all guessing different numbers.

If you could give us, either Rob or Ken, the EBITDA impact at -- on the holds at Marina Bay Sands, Las Vegas and then I guess it was [Flight] and Macao?

I think Ken should take that question.

I appreciate the question.

I'm not really sure that I can really add much to what (multiple speakers)

(multiple speakers).

Absolutely.

I like that.

Sheldon has already talked about that from a 200-day moving average perspective.

I think that gives you really a good reference point to compare against.

I understand that, but the 200-day moving average was still lower than the actual hold in some cases.

Well, it may or may not be.

Listen, the hold changes from day to day.

Anybody who can predict day to day, hour to hour, minute by minute is a miracle person.

We don't want to withhold any information from you.

We want to give everything that we are obliged to share, and we want to share with you.

But if you are taking a one quarter and you are not taking (technical difficulty)-- somebody has to put their mute on.

Listen, we just (multiple speakers)

It is actually your line (technical difficulty)-- Okay, so I understand the logic behind that.

But in other quarters, you have given us the color, so it is just that we are looking at things differently now?

No, we are looking at it realistically.

I tell you honestly I have been after my people for a couple of years that on a monthly basis I want the first 30 days of a 200-moving day average dropped off and the last 30 days added on.

And I have been a proponent of the 200-day moving average for years, but unfortunately not all of the people at my Company do exactly what I want them to do.

So this time I will make sure that I have it, and I'm going to have that from now on.

I finally got the figure today, and the figure for Macao and Singapore, which constitutes almost 90% of our total business, is 3.05%.

That is the number, and that is the 200-day moving average.

So what can I do?

If 2.85% is less than that, well, that is more than 2.85%.

You think you want to adjust it because it is too high, then the average hold you got.

But you have got to take into account the habits of the people that play.

And the habits of the people that play in this industry can change the results of the law of averages.

The law of averages is 2.85%.

But, you know, I tell you, I failed to be amazed at the fact that in the game of blackjack where we have a 17% to 22% hold, say, give or take 20%, here in the States in Las Vegas the maker of gaming, it is 36% over in Asia.

Why is it 36%?

Dramatically it is like -- or 80% -- whatever number higher than the law of averages calls for is because the people don't play on the rules that people play here.

They play on the basis of luck.

And people's behavior is -- that is an excellent classical example of how that can change returns.

So if you take the law of averages return in Las Vegas and apply it to what you think the law of average is or the results should be in Asia, there is a risk that those numbers will not jive.

I don't think it is a risk; I think it is a surety.

So the 200-moving day average is going to give us a more authoritative and a more lengthy basis on which to make our own internal projections and to report whether we are above or below a milestone.

Robin Farley, UBS.

I know you commented on VIP business in Singapore, but I wonder if you can give us your thoughts on the mass business where it was a little bit more flat sequentially and if that is seasonality or how you view the mass business and how you think that will grow sequentially from here?

And then I've got one or two other after that.

Sequentially it was flat.

Not sequentially, I mean year on year the way we recoded -- (multiple speakers)

It grew 22% year on year.

No, sequentially meaning from the December quarter to the March quarter.

Give me any business that grows 22% year to year, and I will be happy to invest in it.

That is great, but I'm asking about the sequential pattern and just how you expect sequential change, not the year over year.

We talked about sequential the last two or three conference calls, and basically you are dealing in a business that sequential comparisons are not relevant compared to year-over-year comparisons.

Because, as you see a product matures, if you look at Macao where it is getting more mature, you have to -- you can see where the annual comparisons year over year work.

In Singapore it is not mature enough to really understand the seasonality, which we talked about before.

You get into a little trouble when you look at sequential, and that happened looking at various roll numbers, etc., and so forth.

As someone said previously that the first quarter and the third quarter tend to look like stronger quarters.

Right now that is what they do, but comparing it month over month, it is really not -- days change, holidays change, things affect those particular situations.

And the mass market is particularly sensitive to seasonality and particularly sensitive to various months.

So -- (multiple speakers)

And I think the Q1 comment before was really about VIP.

That is why I was trying to get some more color on mass.

But if that (multiple speakers) if you just want to say -- I understand what you are saying.

You don't know the seasonality of the market, and that is fine.

VIP is different because VIP, you will never be able to track sequentially because of the nature of (multiple speakers)

Exactly.

In other words, the comment before about Q1 was about VIP.

But then the other thing I wanted to ask was on the table cap in Macao, and I know you made some comments, Sheldon, in your introductory remarks.

But I wonder if you can tell us, do you expect Macao to go above the 5500 table cap before March of 2013?

For what, March 15?

March of 2013.

I have no idea what the government is going to do.

All I know is that government is trying to be as accommodating and supportive of the concessionaires as they can.

But whatever they do for one, I think they are going to do for everybody, and I -- listen, I am not an analyst.

I am not free to speculate.

I have to report the facts.

And if somebody wants to speculate about the number of tables or speculate about labor or speculate about this or that, that is what it is.

It is speculation.

We are required under the pains and penalties that get bawled out by my wife, of not telling exactly the way it is, not to mention the SEC, we have to be accurate with you.

We cannot speculate.

(multiple speakers)

Before I leave the Singapore question, I cannot help but think that we are two years into Singapore and forget sequential year on year.

The fact is we have a duopoly with all of those people in Indonesia and Malaysia.

It seems to me an awfully good bet that the market across the (technical difficulty) be it retail, be it gaming, be it high-end gaming, it has got to grow, and it is going to keep growing.

Because, as you saw in Macao, in the early days back in -- no one would guess back in 2003 and 2004 what has happened with the mass or VIP.

I think any place in Asia you can get a duopoly in a major city with an airport like that.

It is awfully good bet that we are sitting here down the road whether it is next quarter or next year astounded by the growth in Singapore.

I just think you have to be more respectful of how good that market will be and can be.

The rooms and the price we get the ADR in the rooms is clearly, unequivocally subject to seasonality.

We can have tradeshows and conventions go in the spring and the fall and not in the summer.

The FIP leisure rate in the summer is totally different.

The retail with Christmas and other golden week spending periods in Asia is seasonal.

The gaming is seasonal.

We just happen to be in a seasonal business.

We are, I guess, under the category of consumer discretionary.

Unless somebody thinks we are in another category.

And that is seasonal.

Look, if 40% or more of all the retailers down in the United States between Thanksgiving and the four weeks between Thanksgiving and Christmas, I can not make any stronger case for seasonality than that.

Sure.

I was looking for factors outside of seasonality that you might address.

But the other question, this last one, is on Spain.

I wonder if you could just give us -- and this could be wide range or just kind of ballpark on what kind of revenue assumption you have for the market there that gets you to the 20% return?

They are just all figures.

We cannot -- it is much too early to make that assumption, particularly to make it public.

We have got more studies, about a dozen studies, and if we did not feel confident that the amount of money that we need, the amount of business we need to get to the 20% cash-on-cash return, then we would not continue it.

We would just pull it back and say, we are sorry, everybody.

We wish that it was different.

But we don't believe that that is in the cards.

We believe that all of the studies that we have done validate our vision.

And there are no further questions in the queue.

I will now turn the call over to senior management for any closing remarks.

Well, I don't have any closing remarks, except to say I'm looking at the chart that shows us one out of two with 12,222 companies.

As I look at the constant growth, I look at the 14.2% quarter-on-quarter EBITDA growth, and frankly, I don't understand -- I don't want to encourage analysts to overreach and to overpromise because that happened once before, and we just barely made it, everybody's projections.

So everybody make their own projections.

We are going to keep doing what we are doing.

I cannot -- it is very difficult for me to give a lot of credibility to people who think that there is a plateau level and that it is predictable in Asia.

It is just the nature of their culture that they have a greater propensity for play and to shop and to do other things than other cultures.

This is a cultural sensitivity issue.

And we live with that, and I see no reason for our 14.2% quarterly EBITDA growth to go backwards and to reduce.

So that is my closing remark.

I want to thank everybody for calling in, and we will talk to you in 90 days.

Thank you.

Thank you, ladies and gentlemen.

This does conclude today's conference call.

You may now disconnect.