Las Vegas Sands Corp.
Q4 2012 Earnings Call Transcript

Published: 31 Jan 2013

[Operator:]

Good afternoon. My name is Dustin, and I will be your conference operator today. At this time I would like to welcome everyone to the Las Vegas Sands Corp. Fourth Quarter 2012 Earnings Conference Call. [Operator Instructions] I'll now hand the call over to our host, Mr. Daniel Briggs, Vice President of Investor Relations. Sir, you may begin.

[Daniel J. Briggs:]

Thank you. 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 laws. 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, adjusted property EBITDA and hold 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 release. Please note that this presentation is being recorded. We also want to inform you that we have posted supplementary earnings slides in our Investor Relations website for your use. With that, let me please introduce our Chairman, Mr. Sheldon G. Adelson.

[Sheldon Gary Adelson:]

Thanks, Dan. Good afternoon, everyone, and thank you for joining us today. Joining me on the call today are Mike, Rob, Chris and Ken and we look forward to addressing your questions in just a few minutes. Well, we had a record quarter. On a hold adjusted basis, we generated $1.1 billion in EBITDA and $0.63 of earnings per share. But first, I would like to provide a progress report and execution of our 4 principal strategic objectives

[Michael Alan Leven:]

Thank you, Sheldon. Operator, may we please have the first question?

[Operator:]

[Operator Instructions] Our first question comes from Shaun Kelley with Bank of America.

[Shaun C. Kelley:]

I just wanted to see if I could start by asking about Singapore. It looks like the volumes there were very strong. Could you give us any color about just the trend that you guys saw across the quarter, how Western new year looked and just kind of what you guys saw at the rebound, particularly on the VIP side that drove that big number?

[Robert G. Goldstein:]

Shaun, it's Rob Goldstein. We -- obviously a good quarter on the volume side, as far as the rolling segment. I would caution you that it's a very concentrated market. We're not sitting next to mainland China and so again remains concentrated, but we're seeing -- obviously, happy with the results in terms of the volume. More important, from my perspective, is the mass -- the non-Rolling and the slot ETG number was, I think, a nice balance from the bottom. Our high was 4.6 a day. We were north of 4.4 a day and we see recovery there, which I think that's more -- to me, it's more important, to us a long-term opportunity. That represents $1.1 billion of departmental income annualized. So to me, the rolling volumes will continue to vacillate. We could see some real growth, or we could see diminishing -- depends on the players that visit that quarter. But to me, the critical part of Singapore was the bounce-back up to a number above 4.4 a day. And I hope we can trend back up. As we've mentioned previously, we have a sales team and a strategy in place to address the premium mass, because we drive that premium mass from a tourist perspective and not be -- depend on local Singaporeans, I think, will bode very, very well in the future, in Singapore. Clearly, a $400 million normalized quarter is a damn good quarter. We're very happy with the numbers.

[Shaun C. Kelley:]

And just one more knit on that, the $400 million does not adjust for the $24 million, so we would probably add that back on a recurring basis as well, correct?

[Sheldon Gary Adelson:]

That's correct.

[Robert G. Goldstein:]

That's correct.

[Shaun C. Kelley:]

Great. And then switching over to Macau, obviously, some really impressive property level margin numbers. I think that the question that we're getting from folks is just, as we look forward here, you guys look like you're really starting to take some share, just any sense you can give to us about how you're kind of seeing customer behavior maybe starting to look at things more like bookings as we think about Chinese New Year and looking a little bit ahead here given just how strong the rebound seems to have been in December and into January?

[Sheldon Gary Adelson:]

Even our new property we opened 2 days ago is 100% full for the new Sheraton Towers of 2,100 rooms approximately. It is completely booked for China and all the properties are booked.

[Robert G. Goldstein:]

Shaun, we should take share. We've got the best products there to take share because we have the most rooms, the most gaming space and look, we're in a very fortunate position, having enormous exposure in Macau, and we should take share. At our retail, our footprint, both in Cotai and the peninsula, we're in a very privileged position. So yes, we're very happy in the quarter, but we think the best is ahead of us. Look, it's an extraordinary market from any perspective, the best in the world. We've got the most exposure there as far as gaming positions, retail space, sleeping rooms. So to Sheldon's point, it just keeps getting better. As you know, the greatest predictor of a mass gamers place to gamble is where he sleeps and in our case, with all these new rooms, we are in position -- we should be taking share and doing very, very well in the future, and we're very fortunate, obviously, at not just the mass, but the premium mass going our way as well. So we feel very bullish about what we did last quarter in Macau.

[Sheldon Gary Adelson:]

[indiscernible] everybody, except the homeless.

[Shaun C. Kelley:]

Great. I guess the last one for me would be just a big picture strategic question, but you did bring up the -- in your prepared comments, the retail space. Could you -- any timeline or any sense of timing you guys could give to us about how you're thinking about that? I mean, I think generically, we've heard in the past that you did want to get Cotai Central probably ramped up a bit further on the retail side before you looked, to do, maybe, something more strategic. But any color or glimpse you guys could give to us on that?

[Michael Alan Leven:]

Shaun, we've made no decision in terms of the timeline for a retail disposal. I think as ramp ups take place both in Singapore and Macau, they're always under consideration. We are getting our work done organizationally for when the time comes so that we'll be prepared for whatever disposal matter will take place. But there's no real indication now. We have still a long way to go in terms of building that business and we're seeing very significant increases in retail still in Macau. And of course, the other thing is that we are planning to do an additional shopping center in Macau, which is subject to government approval. Those plans are being submitted as we speak. So there's a long way to go before we'd actually put it on the marketplace.

[Sheldon Gary Adelson:]

That piece of land that we're talking about, putting up a standalone retail mall, a big one, with over 800,000 net regular square feet, and potentially another 300,000-plus in The Parisian net. The only question, at least in my mind right now, is whether or not we'll see a change in the cap rates coming up in front of us, because that would motivate us to move quicker, or should we wait until we put up the new mall in The Parisian before we sell all the retail in Macau. We can also make a deal that we sell the current retail, the Four Seasons, the Grand Canal shops and shops in Cotai Central. And then with an understanding that somebody else will buy -- somebody will buy with a predetermined cap rate and a certain EBITDA number. The new mall, by the way, we already own the land to the mall, already own it. And we don't have to worry about getting a new piece of land.

[Operator:]

Our next question comes from the line of Joe Greff with JPMorgan.

[Joseph Greff:]

I have a couple of Singapore questions put a little bit differently. Rob, you mentioned Singapore Rolling Chip is still a concentrated area. Is it getting less concentrated by looking at either geographic sources or number of players? And the big volume increase relative to what we're expecting on the Rolling Chip, is that more players or is that more wagering per player? And then I have a couple of follow-ups on mass and credit.

[Robert G. Goldstein:]

It all remains unchanged. It's -- again, you're down in a different part of the world. We're really dependent on mainland Chinese, Indonesians and Malaysians, as well as PRs from Singapore. But I would say that it's a very concentrated market, and unfortunately, I don't see that growing as quickly on the spread of customers. We want to see it grow, that's our intent. That's our design of our program. But frankly, no, I don't see a lot of change quarter-on-quarter to tell you otherwise. I do see a changing on the premium mass segment. I think we're seeing significant movement. I think our team there is starting to unearth some opportunities outside of -- we want to move to a more tourist-based segment in the mass, premium mass, and again, I think, that's where I think there's real growth potential to add more customers, add a more desirable mix of people.

[Joseph Greff:]

Okay, that partially answered my second question on Singapore. Looking at the slide...

[Robert G. Goldstein:]

As you know, Joe, I'll be redundant here, is that, that segment, from my perspective, that's where the real -- because of the margins and all that, the opportunities there are much more material to us than the Rolling segment.

[Joseph Greff:]

Did you guys see a tangible benefit in the fourth quarter from some of the new hires that are trying to target that higher frequency premium mass gamer?

[Robert G. Goldstein:]

I wouldn't say we saw a tangible benefit. I think we're starting to see it in the first quarter. I think we'll see it progressing throughout this year. Frankly, we're doing 2 things, we're revisiting our database in the premium mass, but also opening offices in -- and I think you'll see that progressively in 2013. I do think there's real opportunity to grow this segment materially as we get into '13 and '14. I think this is a very good move for us. It's very fortunate we're doing this and I think that's where our big upside in the short term is.

[Joseph Greff:]

Got it. In the slide deck, on the slide deck on your website, you have the slide regarding Singapore and credit collections. One thing there maybe you could help to answer, is the aging of those credit collections. Are you seeing improvements there, i.e., or are you seeing the older credit outstanding starts to come down? Or is it the relatively newer issued credit that's in that collections number more recently?

[Robert G. Goldstein:]

It's a mixed bag. I mean, I don't think it's -- I wouldn't characterize it either way. There are some aging issues in Singapore, because when we found that market like Las Vegas, is that customers will go somewhere else, that they want to wait longer to pay. So it's a longer cycle than we ever anticipated. On the other hand, we collected $377 million in the fourth quarter, which is up significantly than the previous 2 quarters. I feel our balance is pretty good right now with our receivable mix versus our -- we've taken the balance again in terms of -- or near for us, reserves have grown significantly, but now we're at a point where we feel much more comfortable. I wouldn't characterize, I'd be clear at this, Singapore is the most challenging credit market from a perspective of, a, highly concentrated; b, very little legal help in the region to collect; and c, there's no junket buffer. So as I said in the past, I remain optimistic but cautious. You're giving away a lot of credit to a smaller number of people and you don't have the legal remedies you have here in the U.S. It still remains a challenge. I don't want to represent that it's easy, it's not, but we're seeing nice collections. We keep ramping them up. I think we're in a much more balanced place vis-à-vis questions and are -- what we've done in the last 12 months. I think it was the right approach.

[Kenneth J. Kay:]

And the one thing I'd add to that is, we've issued a big number in terms of credit drop, almost $13 billion. We've collected almost $12 billion of that. So when you think of it in terms of kind of size of issue, as we talked about in the past, any collection issues we have are really specific to isolated accounts as opposed to systemic problems across the portfolio. And our receivable balance now, if you back out the open programs, it's about almost 30% of -- the reserve is almost about 30% of the receivable balance. I think we're in pretty good shape as we talked about before. That number will continue to grow a little bit, but we're getting up there where it will get to that 35% or so, which we think will be about a stabilized reserve percentage in relation to receivable balance. So...

[Joseph Greff:]

Would you say on average that you're seeing collections on average shorter to collect and are you seeing the average aging come down as well, or has it been pretty consistent?

[Kenneth J. Kay:]

No, I think that collections have been very consistent. I think that the issue with regard to the aging is just those kind of -- those isolated accounts that are problems. So those obviously age out until we get collections on that. But the vast majority of it is pretty consistent from a collections standpoint. And if you look out kind of going back over the last, I don't want to call it 8 to 10 quarters, when you get out about 6 months and you look back in terms of our collections, we collect about 95% to 97% of the amounts that are outstanding. So it's those things that are in essence problems that end up aging longer. But I don't think it's really the bulk of the accounts. The bulk of the accounts are collected within, in essence, that first 6 months. The majority of them are even shorter than that, but after 6 months, we're about in 95% to 97% collected.

[Joseph Greff:]

Okay, great. And then switching over to Macau, and this will be my final question, you referenced in the fourth quarter, at The Venetian Macau, there's some renovation disruption from the work that you're doing at Paiza club, do you think you were able to kind of capture that business at your other properties, or were you able to -- are you able to quantify the net impact there? And in fact, what may have been even a stronger quarter in Macau absent those 29 fewer active rolling tables.

[Robert G. Goldstein:]

I think it's hard to quantify, Joe. The one nice thing, though, now -- I haven't been there this month. The one nice thing about it is that you can now access across that bridge right into Four Seasons, right next [indiscernible]. So I think you get a lot more access. So people are comfortable with The Venetian, they couldn't find a place to play. I think we have a hard time quantifying. But anytime -- you can see the numbers we're doing, The Venetian is the most potent product in Macau. It's hitting on all cylinders, all gaming segments, lodging, retail. The scale and the theme they are building just translates well in the market. And no matter where the Macau market goes, the Venetian will participate. So I think it's by far the most important part of our portfolio right now and I don't think that 29 tables had a major impact either way. I do think The Venetian, as it gets more tables on the floor, and these numbers coming up at the mass and the VIP, I mean the balance in The Venetian is staggering to me. It's just the most balanced product in Macau by far, and our results speak to that.

[Operator:]

Our next question comes from the line of Steve Kent with Goldman Sachs.

[Steven E. Kent:]

A couple of questions. First, Ken, should we no longer use for Singapore this range of hold of 2.7 to 3, which is I think historically what we've been assuming, because essentially over the past 11 periods, you've been all over that and I think it's only 1 in 11 where you've come in there. And I understand the issues, but should we just start to widen out the range? Is that how you're starting to think about the hold percentage in Singapore? Or will at some point start to narrow down? And then second question, $24 million property tax assessment. I'm sorry if I've missed that. What is that for in Singapore? And then finally, expansion, in particular, the hotel stock, at some point you've talked about trying to do something with that?

[Kenneth J. Kay:]

Well, let me just talk to the normalization. I'm sure Rob will want to comment on that and the property tax and then I'll turn it over to Rob. But I think that 2.7 to 3 range is still inappropriate. The kind of range that -- for Singapore and when we normalize, we use the midpoint of the range. With regards to the property tax, the issues that we've got to -- basically at the very end of the year, we got an additional assessment from the government of about $24 million. At least 1/3 of that pertains to 2011. The balance pertains to 2012. We're still going through that to see what it pertains to, but certainly, the balance of the $13 million that's specific to 2012 doesn't all belong in that fourth quarter. It would have to be spread basically ratably over the year. So obviously, it was impactful to our fourth quarter numbers. And part of it, as I said before, doesn't even pertain to 2012.

[Robert G. Goldstein:]

Steve, it's Rob. On the range, I wouldn't change a thing. Since we opened the property, I don't know if you noticed, but our life to date since the day we opened in 2010 is 2.7% and it will remain a 2.73% property. The only one thing different in Macau and Singapore is the volumes, obviously, in Macau are deeper and the player base is deeper, but when it's all said and done, we're at 2.7% even after experiencing a horrific year this year on a few small customers who still -- the math is the math is the math and in the end, those people who won some money will come back and lose it back. It isn't that complicated. I wouldn't change a thing. I would leave you a range of 2.7% to 3% because you're in the range. After all, there's -- after all the bad quarters...

[Steven E. Kent:]

So even though the quarter's -- what you're saying then, and it's truly you're saying is that they all offset each other. So from the 2.18% to the 3.34%, so 3.58%, they all offset. And you're saying, when you add them all up, it comes out right to 2.7% or so?

[Robert G. Goldstein:]

Yes, it's 2.7% and Macau, it's over 3%. And frankly, it's going to be -- I also I think this will be -- I think in Singapore -- here's my bet, if you have a lot of Asian people betting a lot of money for a lot of time, you're going to do just fine. In Las Vegas, we're at The Venetian, Palazzo, we've handled billions of dollars. We're holding 27% lifetime here. It's the greatest market in the world with the greatest gamers. I wouldn't worry one bit about it. The math will prove out just fine. One quarter will kind of hold 4.5% on one of these quarters and be back up to 3%. It's just the business we're in.

[Michael Alan Leven:]

I'll take the expansion question, Steve. It's Mike. We have -- we've been talking about tower 3, putting a new VIP facility up there for some period of time. I was in Singapore just a few weeks ago and we're in the -- we did receive requests for information from the government, from certain government agencies, about putting more details on the request, which we are now submitting. But I don't expect you'll see something like that happen because there's about 1 year construction period where it would happen. As far as additional rooms are concerned and additional buildings, we've had some conversations, but nothing is quite moving forward at this point. So in terms of projections and what have you, I would not feel comfortable that you would have projections of that for some period of time. And we'll give you updates as soon as we get them, but the construction periods would be really a year to the tower and probably considerably more than that for the room addition and the building addition. Let me just add one other thing. We're investing significant capital in the building now, doing more facility work inside the casino in the Ruby room and others, redoing it, expanding it, making it better. So there are capital investments going into the building, which will expand our capabilities when inside. So those are different than the room additions that we've been talking about.

[Sheldon Gary Adelson:]

We also -- we've also applied to the government to build another tower, the lots, the available lots, that are unused at this time and they're right abutting our [indiscernible] and we're hoping to get approval to -- we don't know how long it will take, to put in some more ballroom space, some more exhibition space and another 1,400 to 1,500 rooms, because they're running at such high room occupancy. But we don't have any sign that it's eminent. We don't have any signs that it's far away. But Singapore moves at its own pace and we'll just have to wait until they give us an okay.

[Operator:]

Our next question comes from the line of Felicia Hendrix with Barclays.

[Felicia R. Hendrix:]

Switching gears back to Macau, your table efficiency improved nicely in the quarter, it's obviously been a goal of yours, so that's been great to see. Just wondering if you could discuss some things that you're doing to continue to drive table efficiency in the market. And if you could, perhaps Rob, this is a question for you, just discuss your plans to improve/grow your premium mass presence in the market?

[Robert G. Goldstein:]

Sure. Thanks for the compliment. We feel making progress. I think Ed and David have just done a terrific job and our goal over there is to make all our tables work harder. To your point, the only prop that we have that we feel very balanced with right now, despite our great results is The Venetian. I mean, the win for us, both on the premium mass, mass and the junket are just terrific. And we feel the balance is really right at the Venetian and that's why that property is just knocking the door down. But we have opportunities throughout the portfolio, both downtown and in Cotai to do a lot better, in my opinion. I think it's a segment -- we have 1,500 tables with the additional 200 tables we were given by the government this week. And so our goal is to -- we're agnostic as far as what segment we're in, the highest performing tables. Our segments get the tables. I think the growth is clear. Downtown, we think, although our 10th year of operation, the place has found a real audience especially in terms of the food program that Jeff and his team has put together downtown. We're embracing the high frequent day trip market at Guangdong. We think that we have -- we found a nice niche downtown in the peninsula and we're going to keep growing our business there. The focus there will be mass, premium mass for sure. We'll have some junket, but we're not going to compete with people downtown. We're going to focus on mass, premium mass. The Plaza is the most, I think, of all of our opportunities, that might be the greatest. Because clearly, our junket performance is very strong. What David has done there is exceptional. Where it began 2 years ago it's at now, but what has happened is we're winning $19,000 a day on the mass side and of course, that's premium mass. So if you multiply that times let's say 50 or 60 or 70 tables, there could be huge potential growth there. And David and his team are looking at that today and so we think there's big upside there to do better. Our slot win, by the way, was over $1,000 per unit per day at the Four Seasons. To me, you've got to rethink the balance there. As good as the junkets are, we're looking at that opportunity. And then of course, SEC, we're starting to really hit it there, but I think, as you -- as to our lowest performing in the portfolio in terms of the win per -- from a non-junket, but non-rolling performance, our mass tables there are the most sluggish in our group. With the new rooms opening, with the market booming, I think you'll see that improve dramatically. But like The Venetian, since SEC remain more of a mixed product with lots of variety, the big focus, obviously, is -- remains return on table. And with so much exposure in the market, we can do better. And we will do better. I think there's a clear indication that our room base, our retail base, our food offerings and the truckload of things we offer in all these properties puts us in a very unique position to do better. And that is our sole focus, Felicia, as far as Macau. We see terrific upside. We're privileged to be in the market with all that growth, and frankly, we're not tied to any one segment. We're tied to making money and productivity. And one thing I will say, there's one market we're in that almost no one else is in and that's the mass, mass. Our exposure the pure mass, not premium mass is incredibly important to us. So when you look around and see the SEC or The Venetian, we can get those places to making $8,000, $9,000, $10,000 a day on a pure mass play has been very, very important to our growth. And people right now are all focused on premium mass. We're there, but we're really focusing as well on the mass, mass. We have kind of a monopoly due to pricing and table count.

[Felicia R. Hendrix:]

Great, that's really helpful. Sheldon, you had a nice announcement recently, obviously, with the 200 incremental tables. Can you update us at all on where you are on the discussions with the government regarding procuring tables for The Parisian?

[Michael Alan Leven:]

You want me to...

[Sheldon Gary Adelson:]

Yes, I'll let Mike...

[Michael Alan Leven:]

Felicia, I -- we're in constant conversation, Ed Tracy and myself have just met with the government a couple of weeks ago when I was in Asia. I think that regarding Cotai and all of the new products that are coming on Cotai, you're not going to see any real conclusion on distribution of new tables there for a number of months since. I think the government has assured us, as well as others, that they're going to operate appropriately with these hotels and casinos, which you're going to see developed, but there's no firm commitment yet as to who is going to get what. But we've been told, I've assumed the others have been told the same thing that in their own time, they will make up their mind and treat everybody adequately. That's how we're going today as we get to financing on site 3. We're in the ground now and we're going forward with the project, on the anticipation that all will be well, but it'll be some period of time before you see an absolute commitment for us, as well as others, I believe.

[Sheldon Gary Adelson:]

I think what the -- the government has -- we trust the government that they're going to treat everybody fairly. They have a -- there's been more publicity about our competitors buying their land. They make a big deal about it when they close their land. But we've owned the land since 2007. We've owned lot 20 since 2007. And so, however they treat everybody else, they're going to treat us. We're confident of that. And just like the 200 tables was allocated to us 7 years ago because we couldn't gut the financing without the assurance of tables and they kept their commitment, we're very happy over that. And I'm sure that we'll be treated the same, but sort of like in a different category, because everybody was talking about getting the land and what they're going to build. We already own the land. So we've been assured by the government, we're going to be treated like everybody else. And they seem to be giving -- they said they're going to give preference to those companies that build more non-gaming. And of course, that's our specialty. We develop that a little.

[Felicia R. Hendrix:]

Okay, great. And then just my final question, Rob, back to Singapore. You definitely talked about mass win per day and how you're pleased with the level you have in the quarter, but I'm also assuming that you'd love to grow that. So how should we think about the kind of optimal levels there, or your goals, rather?

[Robert G. Goldstein:]

Honestly, our goal is -- if you recall 1 year ago, was we're trending. We're at 4.6 a quarter, our goal was at 5 and it all came apart. So our goal is to get back to a -- keep growing again. I can't define where we want to get to, because I don't know how high up it really is. I have a belief that we have been given an opportunity to go after tourist-based market and not be dependent on the local market and I think there's a lot of people in Jakarta and KL and I see in the region in general that premium mass customers. I don't know how high we think about that, I just think we can do a lot better than 4.4 a day. I'm pleased we got back to that. But I think the team over there, we talked to some very good people and we're putting a management and sales team in place. I feel there's a lot of potential growth in that segment. I don't want to define it as 4.8 a day, 5 a day -- I don't know. I just believe we're going to get more out of that region we have in the past and more of that segment and that's a 65%, 75% margin a segment. So to drive Marina Bay Sands to a higher level, that's going to be the most important indicator. The most important metric is that win per unit per day, Non-Rolling tables, slot, ETG.

[Operator:]

Our next question comes from the line of Robin Farley with UBS.

[Robin M. Farley:]

Two questions. One, is, with this tremendous growth you have in Asia. I wonder if you have any thoughts about some of your U.S. assets maybe being kind of non-core and just your thoughts on that topic.

[Robert G. Goldstein:]

There is nothing, nothing new that anybody doesn't know about as far as the U.S. assets are concerned. We just continue to operate them and maximize them as best as we can.

[Sheldon Gary Adelson:]

I think that a lot of people are talking about possibility of different emerging markets coming out. We are of the opinion that a lot of the U.S. markets have been oversaturated or about to be oversaturated. And we keep our eye open, but we don't want to get -- we don't want to compete with the job that Caesars' is doing on the riverboat market and the small casino market out there. We know that we're the experts at Integrated Resorts and I think anybody we approach, the various governments understand that and what it can do for them and their tourism efforts. But there's no reason to -- we don't want to liquidate, we don't want to sell any of our assets because we don't want to sell the keys to the kingdom. Our basic differentiation beside the Integrated Resort model of a multi-disciplined resort offering is how do we fill the hotel rooms every day is because of the MICE market, the meetings, incentives, conventions and exhibitions. That is very critical to us. So we sell out any one of our properties, somebody is going to learn how to make the key to our kingdom. We don't want that to happen.

[Robin M. Farley:]

Okay. And I wonder, I know you made a reference to Japan in your opening comments. But I wondered if you could give us a little bit more color on how active are the conversations you're having in Japan and that kind of thing.

[Sheldon Gary Adelson:]

We have people there on a constant basis. And we're constantly talking to the powers that be and to be. But as you can see, the Japanese just reelected another -- they went to the opposite party and -- from the one that was governing. And they, in the past, have been favorably inclined to doing IRs with casinos because actually there's no reason why Japan should welcome IRs with open arms. They want more tourism, and there's a great, great fantastic location there if we could get it. And I think if they got serious, very serious about it, which they may be now, because there is an interim party, about 125 members, interim party convention that's been put together to, on a non-cognizant basis to study the issue of IRs. So we're just going to have to wait. The Asians don't move as fast as we can here in Las Vegas. But we're on it. If there's anybody that's on it, anybody that's doing it and that's keeping their finger on the pulse, it's us. We know how good -- with Singapore, we know how good one of these locations could be.

[Operator:]

Our next question comes from the line of Harry Curtis with Nomura.

[Harry C. Curtis:]

Several quick follow-up questions. First, on The Parisian. There's not a lot of clarity, it sounds like, yet on the table -- on tables. But when you open in late 2015 and would there be any restrictions in view -- anything restricting you from installing slots or ETGs?

[Michael Alan Leven:]

Not at this point, Harry. The restrictions are tables, not on slots or ETGs.

[Harry C. Curtis:]

Okay. And what has been your experience in Macau just over the past 6 months on customer reception to ETGs?

[Robert G. Goldstein:]

Harry, it's Rob. It's been terrific and it keeps getting better. We're really pleased with the ETG market there and I think the team keeps growing the balance. And to Mike's reference point, you're not as restricted as live table games, but the Asian market is very receptive. You look at our numbers in Singapore, they're unbelievable and they're getting better by the day in Macau. So I think there's no reason to think that market doesn't continue to boom. We're very bullish on ETGs.

[Harry C. Curtis:]

And then just last question on Parisian, can you give us a sense of what you would expect to spend yourself for the Parisian in 2013, '14 and '15?

[Michael Alan Leven:]

The total project costs, Harry, we're estimating, at somewhere around $2.6 billion all-in. It could range up a little bit, but that number has actually been approved by our board as for the capital cost of the building. That's including what we put in before. In terms of the investment as to how the cash will go out, probably we'll be using about $700 million roughly of SCL cash and the rest will be financed. And Ken -- Ken can speak a word about that to you.

[Kenneth J. Kay:]

Yes, to answer your question, with regard -- 2013 is going to be probably just over about $400 million. 2014 is going to probably be right around $1 billion, maybe a little bit more.

[Sheldon Gary Adelson:]

He isn't talking about what the financing is. I think Harry was referring to our equity portion.

[Harry C. Curtis:]

Exactly, the cash outlay.

[Kenneth J. Kay:]

Oh, I see. Well then, as Mike talked about, it's going to be around $600 million to $700 million and it should go up.

[Harry C. Curtis:]

You've just cut out.

[Kenneth J. Kay:]

Yes -- no, $600 million to $700 million and then that, for the most part, will go out ratably, a little bit more upfront in 2013 and then the balance kind of spread over '14 and with a little bit in '15.

[Harry C. Curtis:]

Okay, and then the last question that I had is really a housekeeping item. Going back to Singapore, you made a comment that you feel like your reserves there are essentially where you think that they're appropriate. Do you think that at this point or from this point on that your actual dollar outlay for your reserve can actually decline?

[Kenneth J. Kay:]

As I mentioned before, we're still building up on a percentage basis. We're in about 29%. I think It's about 35% or so in terms of the receivable balance. And so, yes, I do think over time, it could come down a little bit, but we're still going to be spending a fair amount each quarter, maybe a little bit less than what we've done in 2012, but it'd still be fairly close to that, because if you think about it, we're still issuing a tremendous amount of credit on an annual basis and we want to make sure that we're appropriately reserved. So we'll be booking our reserves consistent with the amount of credit that we're issuing. So if it comes down, it will be incrementally down, but it should be just marginally lower, if not the same.

[Operator:]

Our next question comes from the line of Cameron McKnight with Wells Fargo.

[Cameron Philip Sean McKnight:]

So a question for Rob, or perhaps Sheldon, as we think about Parisian, one thing that seems to become clearer is that more and more of these developments on Cotai are going to be much more heavily branded, and much more heavily themed. The feedback we've had on Parisian and Eiffel Tower theme has been very strong. What's your sense when you talk to customers about how that brand and theme will resonate as the property opens?

[Sheldon Gary Adelson:]

Well, we can only point to The Venetian and its property theme. It's been very well received and the Chinese people are curious, interested in foreign locations and the appearance of them. I think that the uniqueness of having an architectural icon like the -- as the Eiffel Tower, I think you've got to be very well received. People speak very optimistically about the fact that the Chinese people like it, they'll flock to it. It was challenging to get a walkway or elevator and getting it over to the -- where the restaurant is at the base of the -- about 1/3 of the way up the tower. We're trying to be as authentic as we can. We learned from building the Venetian here is that what brings the feeling of being in the thematic location is the construction and the development of the landmarks and the icons. And certainly, the Eiffel Tower is the most iconic structure in the world and we're going to do a good job on that. I think they're going to come there. Listen, it's going to be gangbusters. It'll be tremendous.

[Robert G. Goldstein:]

I think to Sheldon's point, if you look at the scale and the theming of The Venetian, the only place that might make more sense and the only place they want to visit more perhaps than Venice is Paris. I think our research indicates that the Chinese folks want to get to Paris, just like my wife wants to get to Paris and I think you're going to find it -- I think it's a great theme, a great concept. I mean look at the Venetian performance, it's so nimble and it works on all cylinders because it's not just themed, it's got scale, it's got the food product. It works on all different levels, lodging, retail. I think what's been designed to The Parisian honestly is as good as The Venetian, maybe better, pretty extraordinary product. We feel confident that our customer feedback on the Parisian theme is exceptionally strong and positive. And to your point, I think it's a lot like Vegas was in the '90s when we built the Venetian here. There's a desire to see a theme property, a theme experience, that speaks very, very well to the mass market, as well as the high end.

[Sheldon Gary Adelson:]

One of the -- one of our designer/architects is a Parisian. He's a very well known designer/architect in Paris and he was brought in to one of our consultants and we're using him to get some authenticity for the entire property. It's going to look very authentic and I think the Chinese people, the Asians are going to be very excited about it.

[Cameron Philip Sean McKnight:]

Great, thanks. And a lot of that dovetails with what we're heard on the ground. And just moving on, Rob, a question that relates to your earlier comments on the mass, mass business. I mean, one thing that surprised us was the strength in slot and hotel revenues in Macau in the quarter. How should we think about growth in those 2 segments going forward?

[Robert G. Goldstein:]

I don't know how you think about it, but I'm wildly bullish. I think that Macau, in its infancy, is what Sheldon did in the Cotai peninsula, enabled the mass. If you think about -- if it hadn't been the Cotai development, you would have been struck as being landlocked on the peninsula. I think we've had done this over at the floodgates to build these magnificent, multi-thousand room hotels that enabled the customers to have a place to sleep, a place to gamble and we're just lucky enough to have -- yes, we're a premium mass segment, yes we're junket segment, but we're kind of in a really weird place into the pure mass and to your point, having just come back from there. When you look at the pure mass, non-premium mass, it is just extraordinary, how much they're gambling and how much they're sleeping there, eating. It's a whole experience. And I think it's a -- I'm terrifically bullish on Macau and the mass business, not just the premium mass.

[Operator:]

Ladies and gentlemen, we have reached the allotted time for questions. I'll now hand the call back over to management for closing remarks.

[Sheldon Gary Adelson:]

Thank you very much, everybody, for joining the call. As we close the call, it was a wonderful year for Las Vegas Sands Corp. I think everybody realizes that. I think this is a year where we opened close to 6,000 hotel rooms in Macau, 2 additional casinos, a variety of food and beverage restaurants, expanded our capital investments, rehabilitated our Venetian Hotel in Las Vegas, moved our Bethlehem numbers up to be one of the most successful property in Pennsylvania. I think the management team and the company's employees have done a marvelous job. I hope all of you recognize the work that they have done to get to these kinds of results. So thank you very much.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. We thank you for your participation. You may all disconnect.