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Q & A session


  • Haven't gone through the details of their thoughts on dividends. That will be discussed at their next board meeting in a few weeks.
  • They will not be able to put a shovel in the ground in Europe for at least 2 years. Feel that development in Spain is within their control. There are 980MM people in visitation range of Spain. If all visitors to Las Vegas were unique, which they are not, that would imply 13% penetration.
  • Thoughts on Florida / Genting development: Not possible that they can execute on their design for $3BN but more likely like $6BN. Every single floor needs different designs - especially the curved walls... Genting is fighting against Nevada state gaming regulations.  As far as Miami is concerned, if you put in more than one integrated resort, there isn't enough business to support that because the Seminoles already have 7 locations. They will look at the tax rate, minimum investment and other provisions before they decide on whether they want to participate in that market.
  • Phase I: 4 buildings in Spain and wouldn't go to the next phase until they see that the market demand is there. In Macau they also wanted to Phase but ran into that issue for 2008.  Need enough critical mass in the first phase to support casino, convention, hotel and retail business. 
  • All the other projects they are looking at in other Asian countries are single structures - ala MBS
  • Even if they commit to $20BN of project, they are all likely to be staggered with equity contributions of just ~30%. Think that the costs of most projects would be $9-10BN (at most). All constructions loans are non-recourse. Thinking about the name Europa for their Spanish development.
  • Think that if they build in Japan, it would cost around $4BN. 
  • They still own Site 3 in Macau as well... well, they lease it ... which is another development opportunity that they are discussing with the government of Macau. Site 3 will be a more Mass market oriented building so it will be substantially less expensive then their other projects and smaller.  It will not be a $4BN property. Not even sure if they can get approval on their design.
  • If they pay dividends, would it need to come out of Sands China?
    • A: actually the larger % will come from Singapore, not Macau. Also, don't expect that the dividend will be so huge... or rather that hasn't been determined yet.
  • Think that the reason that other Cotai projects haven't gotten approval is because the government wants more Venetian like projects - not gambling halls
  • Doesn't think that the government will allow Macau style junket reps. 
  • Where do they want to be on a target leverage basis given their cash flow and development pipeline?
    • A: 3x - and they will be there on a gross basis in 2011
  • Projecting $300-$400MM of maintenance capex in their existing building which include adding new VIP rooms and keeping the property fresh. Bottom line is that unlike other gaming operators they will not be cash constrained on maintaining their properties. Made a mistake for waiting 7 years to refresh Sands Macau.
  • Thoughts on Phillipines: The political structure is too dangerous for them - too corrupt and there is also a lot of product going into that market
  • Massachusetts: Told the governor that if they do more than 2 casinos, LVS isn't interested. There is too much gaming dilution in the USA.  Current bill proposes 3 casinos and 1 slot parlor.  If they don't get the location that they think is ideal, they will not participate because New Hampshire may legalize too.  There is a $500MM min capex and good relationships with unions are needed (which they lack).
  • How much retail real estate do they own?
    • A: 350 tenants and 800,000 SQFT (leasable - GLA).  They had sales of over $3000/SQFT on the first floor of their Grand Canal Shoppes in Macau.  That's $360/SQFT of rental income to them... Cap rates in Asia are about 4-5%. Malls in Macau are not yet mature because they don't have the bridge from Cotai Central yet. Thinks that the monetization of their retail real estate would retire all their debt.
  • Korea or Japan would be their preferred gaming locations if they had to choose