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Takeaway: LVS firing on all cylinders and should continue to gain share

While the hold adjusted EBITDA is probably a little lower than that given by management, it's hard to find fault in this strong quarter

"I am pleased to report that our quarterly results reflect both strong revenue and cash flow growth and the steady execution of our global growth strategy.... The prudent management of our cash flow, including the ability to both invest in future growth and to increase the return of capital to our shareholders, remains a cornerstone of our strategy."

- Mr. Sheldon G. Adelson, chairman and chief executive officer


  • Mass table game productivity increased marketably in 4Q in Macao.  Mass table efficiency up 33% to $9,726/win per table per day.  
  • Had 5MM visitors to their properties in Macao in the month of December alone
  • Opened the pedestrian bridge between SCC and FS
  • Retail sales increased by 45% on the second floor of FS since the opening of the bridge. Sales on other levels also increased. 
  • Their RC volume at MBS was their second best month on record. If they held normal, they would have produced $406MM of EBITDA
  • The Parisian will be their 4th property on the Cotai Strip. They have received requisite approvals and are started construction on that site.
  • Retail mall business in Asia generated $110MM of NOI. Think that they are worth $9-10BN. 


  • MBS - the market in Singapore is a very concentrated market so there is a lot of volatility there. They are more focused on the premium mass business there.
  • The $406MM doesn't adjust out for the $24MM charge in the quarter so the actual normalized EBITDA would have been $430MM
  • Sheraton Tower is 100% booked for CNY. All of their properties are 100% booked for CNY.  They think that they will continue to gain share in that market.  Very bullish on Macau.
  • Timing on sale of the retail operations?  They have made no decision in terms of timing on a disposition of the mall real estate. Still have a long way to go on building that business. They are planning on doing another shopping center in Macau. Stand alone 300,000 SQFT mall plus more space at the Parisian. Only reason to move faster is if they thought that the cap rates were going to change. They can sell the existing retail and then have an agreement to sell the future real estate at a pre-determined cap rate. 
  • Is Singapore VIP getting more concentrated or less in terms of players? It remains unchanged. They do see some growth on the premium mass side. They want to move to a more tourist mix of business away from locals.
  • The payment cycle on receivables in Asia is just a longer cycle than in Vegas.  They feel comfortable with their ability to collect. The Singapore region is the toughest place to collect and they don't have that junket buffer. Collected $12MM of the $16MM in the drop this past Q. Reserve is almost 30% of the receivables balance.  Want to get the reserve to about 35%. Collections have been very consistent. Collect 95-97% of amounts outstanding when you go out 6 months. 
  • Venetian Macau had some renovation disruption from the work at the Piazza club - they had 29 fewer active rolling tables. Tough to say if they recaptured that business at their other properties. Don't think that the 29 tables out of service had a big impact on the Q. That property remains the jewel of their portfolio.
  • How to think about the hold % in the Singapore? Still thinks that 2.7-3.0% range is appropriate for MBS - they use the mid-point of the range. Only difference is that the market in Macau is just much deeper. Singapore is just a more volatile market.
  • What was the $24MM tax assessment in Singapore for? 1/3 of the assessment pertains to 2011 and the balance is to 2012.  The 2012 assessment doesn't all pertain to 4Q obviously but the full year.
  • What are they doing to continue to drive table efficiency in Macau? Only at Venetian do they feel the balance between VIP and mass is right.  They have an opportunity to do a lot better across the rest of their portfolio. Focus on the Peninsula is premium mass. At Four Seasons they are doing amazing on the premium Mass tables. Also need more slots there.
  • SCC: Has the lowest win per unit there but should see dramatic improvement with the opening of additional rooms. Their room, food and gaming operations put them in a strong position to do better. They are one of the players in the true "mass" business. That's a great business for them. They have basically a monopoly in that market given their table count.
  • There will be no conclusion about the growth of tables in the years to come. No firm commitment on who will get how many tables at any of the new build casinos. It will be some period of time before the government makes any firm commitment.They are confident that the government will treat them fairly as everyone else. They already own the land on Lot 3. 
  • Goal is to keep growing in Singapore. It's hard to know exactly how large. There is a large tourist market that they can tap. 
  • They are of the opinion that most US markets are either saturated or over saturated. 
  • Have people in Japan on a constant basis. 
  • All of the restrictions are on live tables; none on ETGs and slots. Reception is very favorable to ETGs and they keep getting better. They are very bullish on ETGs. Estimating an all in cost of $2,6BN for the Parisian. Of that they will use $700MM of SCL cash and the rest will be financed. 2013: $400MM, 2014: $1BN and 2015: rest in 2015. 
  • They are still building up their reserve balance from the current 29% to a goal of 35%. 
  • The Chinese people are curious about foreign locations so they believe that the Effiel Tower Design will be very well received. (Felix Wang at Hedgeye very much agrees with this assertion).  The only place that the Chinese want to get to more then Venice is to Paris. They think that the Parisian is even better designed than the Venetian.


  • LVS missed 4Q estimates due to a miss in Singapore and Vegas, offset somewhat by a big beat in Macau
  • "The Company's Board of Directors increased the...quarterly dividend by 40% to ...$0.35 per share payable in March of 2013"
  • "The quarter's adjusted property EBITDA and EBITDA margin were unfavorably impacted... by lower table games hold (approximately $90.2 million adjusted property EBITDA impact), as well as an additional $24.0 million property tax assessment at Marina Bay Sands."
  • Sands China: Net revenue of $1.97BN and Adjusted EBITDA of $620MM
    • Venetian: net revenue of $843MM and adjusted EBITDA of $331MM (3.25% hold)
    • FS: net revenue of $296MM and adjusted EBITDA of $90MM (2.68% hold)
    • SCC: net revenue of $491MM and adjusted EBITDA of $108MM (3.13% hold)
    • Sands: net revenue of $315MM and adjusted EBITDA of $83MM (3.29% hold)
  • MBS suffered from low hold of 2.14%
    •  Net revenue of $717MM and adjusted EBITDA of $302.5MM
  • Vegas: net revenue of $308MM and adjusted EBITDA of $53MM (17% hold)
  • Capital expenditures:  $386.5 million, including construction and development activities of $243.7 million in Macao,$117.4 million in Las Vegas, $21.3 million at Marina Bay Sands, and $4.1 million at Sands Bethlehem.