Regression analysis: Simple Linear Regression Multiple Linear Regression
Macau Gambling Industry History and Las Vegas Sands 1Q2009 Results
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2. Macau-Portuguese authorities first legalized gambling in 1847
Monopolies controlled by casino owners
In 1930, first exclusive concession was granted to the Hou Heng Company
Renovated and refurbished casinos, offered rewards to patrons
In 1937, the Tai Heng Company was given exclusive rights to industry
Introduced baccarat and several Western games
In 1961, the governor designated Macau a “permanent gaming region”
In 1962, Stanley Ho Hung-sun won a monopoly concession, formed STDM
Sociedade de Turismo e Diversões de Macau
In 2002, when STDM’s license expired, Macau opened bidding for operation of
casino games with 3 licenses available
STDM won an 18-year concession, Wynn Resorts won a 20-year concession, and Las
Vegas Sands (LVS) won a 20-year concession
3. “ The steady execution of the business plan we presented in November
2008, including the implementation of our cost savings program, continues
to be our primary focus as we navigate through the current challenging
economic conditions. We have made notable progress during the quarter on
each of the three basic objectives of our plan—first, to maximize our cash
flow from current operations in Las Vegas and Macau, including through the
implementation of approximately $470 million in annualized cost savings;
second, to complete on time and on budget our properties currently under
development in Singapore and Bethlehem, Pennsylvania; and third, to
enhance our financial flexibility by advancing opportunities that will increase
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liquidity and allow us to execute our deleveraging strategy.
— Sheldon G. Adelson, CEO!
4. COMPANY-WIDE OPERATING RESULTS
Net revenue for the first quarter of 2009 was $1.08 billion, about the same as the first
quarter of 2008
Operating income in the first quarter of 2009 was $36.3 million compared to $96.6
million in the first quarter of 2008
Net loss attributable to common stockholders in the first quarter of 2009 was $87.7
million, compared to $11.2 million in the first quarter of 2008, resulting in a diluted loss
per share of $0.14 compared to $0.03 in the prior year quarter
LAS VEGAS 1ST QUARTER OPERATING RESULTS
Despite weakened economy, both The Venetian Las Vegas and The Palazzo generated
solid cash flow
While slot handle was down for the first quarter of 2009, table games volumes were
relatively stable, with a drop of only 2.7% compared to the first quarter of 2008
Our table games win percentage of 20.6% was down significantly compared to 25.3% in
last year’s first quarter
7. THE VENETIAN MACAU
Continues to attract large numbers of visitors—overall gaming volumes are steady and
have held up well despite the challenging operating environment
Visits to the Venetian Macau increased to over 6 million during the first quarter of 2009,
a 14.1% increase compared to visits in the first quarter of 2008
Over 37 million visitors since opening in August 2007
Gaming revenues for The Venetian were up 7.8% in the 2009 quarter compared to the
same quarter last year, while gaming revenues for the Macau market overall were down
approximately 13% over the same period
According to the Statistics and Census Service of Macau, visitor arrivals to the Macau
market decreased by approximately 9.6% during the first quarter of 2009 compared to the
same quarter in 2008
Expect to achieve total annualized cost savings of approx. $270 million across our Macau
operations
CotaiJet ferry service increased its sailing during the quarter to provide 72 daily sailings
between Hong Kong’s Shun Tak ferry terminal and the Cotai Strip.
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10. In 1996, the Sands Casino was demolished and
replaced with the Venetian Resort-Hotel-Casino,
which opened in May 1999
Largest AAA Five-Diamond resort in Americas
Cost of $1.2 billion
4,027 all-suite hotel rooms
120,000 sq. ft. of casino space consisting of 130
tables, 1,550 slots, a poker room, and sportsbook
Grand Canal Shoppes, a world class Venice-themed
shopping mall totaling 440,000 sq. ft. (sold to GGP
in 2004 for approx. $766m gross)
11. In December 2007, LVS opened The Palazzo
Resort-Hotel-Casino
AAA Five-Diamond luxury hotel and casino
resort
Cost of $1.8 billion
3,066-suite, 50-floor hotel tower
105,000 sq. ft. of casino space consisting of 130
tables and 1,375 slots
400,000 sq. ft. Shoppes at The Palazzo, anchored
by Barney’s New York (sold to GGP in 2008 for
approx. $300m gross)
12. In May 2004, LVS opened the Sands Macau
Casino in Macau, China—first modern Las
Vegas-style facility
Cost of $265 million
298-suite hotel tower
229,000 sq. ft. of casino space consisting of 505
tables and 1,250 slots
Offers four restaurants, two spas, VIP facilities, a
theater, and other high-end services and
amenities
13. In August 2007, LVS opened the Venetian Macau
Resort-Casino on the Cotai Strip in Macau, China
Cost of $2.4 billion
2,900 all-suite, 39-floor luxury hotel
550,000 sq. ft. of casino space consisting of 800 tables
and 2,200 slots
1.2 million sq. ft. of convention and meeting space
1.6 million sq. ft. of retail space consisting of 300
premium shops, 20 restaurants, a 15,000-seat stadium,
and 1,800-seat arena featuring Cirque du Soleil’s “ZAIA”
14. In August 2008, LVS opened the Four
Seasons Hotel Macau on the Cotai Strip in
Macau, China
Cost of approx. $905 million
360 rooms, 84-suites, including 19 Paiza
Mansions
70,000 sq. ft. of casino space consisting of
100 tables (capacity to go to 150) and 200
slots
211,000 sq. ft. of luxury retail space
connected to the mall at The Venetian
Macau
25,000 sq. ft. of MICE facilities capable of
hosting small and medium-sized events and
corporate meetings (11 meeting rooms)
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29. The Cotai Strip is rapidly transforming
Macau into a world-class resort destination
The Venetian Macao is the first part of
LVS’s strategy of building sufficient critical
mass:
Anchor property of the Cotai Strip
Strong visitation and market share trends
ADR and occupancy far exceeding market
average
Increased average length of stay
Sequenced strategy of building critical
mass:
Four Seasons Macao
Sites 5 & 6: when financing becomes
available on acceptable terms
Sites 3, 7, & 8
30. Cost Savings Program at Venetian Macao, Sands Macao and Four Seasons Macao
Annualized targeted savings > $100 million
$46 million run-rate savings implemented
through 9/30/08
Fully integrated into 2009 operating plan
Labor savings: ~60%
Expense savings: ~40%
Headcount
Labor efficiency
Benefits
Transportation
Utilities
Partner contributions
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37. “ We remain focused on the reduction of our financial leverage. The
complete implementation of our $470 million cost savings program, together
with the future addition of operating cash flows from the openings of our
properties currently under development in Bethlehem, Pennsylvania and
Singapore, will significantly enhance our financial position. We believe we have
opportunities to generate additional liquidity, should we choose to do so,
through the monetization of non-core assets or the sale of minority interests in
certain of our operating assets or subsidiaries in Macau. We remain confident
that our currently available liquidity and capital resources, coupled with our
opportunities to generate additional liquidity, provide sufficient means to
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complete our current development plans and meet our obligations.
— Sheldon G. Adelson, CEO!