Daniel Briggs - Senior Vice President of Investor Relations Sheldon Adelson - Chairman of the Board, Chief Executive Officer, Treasurer Patrick Dumont - Vice President Robert Goldstein - Executive Vice President, President - Global Gaming Operations.

Joe Greff - JPMorgan Shaun Kelley - Bank of America Merrill Lynch Thomas Allen - Morgan Stanley Carlo Santarelli - Deutsche Bank Felicia Hendrix - Barclays Robin Farley - UBS Steven Kent - Goldman Sachs Harry Curtis - Nomura.

Good afternoon. I would like to welcome everyone to the Las Vegas Sands Corp's third quarter 2014 earnings conference call. I would now like to turn the call over to Mr. Daniel Briggs, Senior Vice President of Investor Relations..

Thank you, Courtney. Before I turn the call over to Mr. Adelson, please 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 and hold-normalized adjusted net income, adjusted diluted EPS and hold-normalized adjusted diluted EPS and adjusted property EBITDA and hold-normalized adjusted property EBITDA, all of which are non-GAAP measures.

A definition and a reconciliation of each of those measures to the most comparable GAAP financial measures are included in the press release. Please note that this presentation is being recorded. We also want to inform you that we have posted supplementary earnings slides on our Investor Relations website for your reference.

We may refer to those slides during the Q&A portion of the call. Finally, for those who would like to participate in the Q&A session, we ask that you please limit yourself to one question and one follow-up, so we might allow everyone with interest to participate. With that, let me please introduce our Chairman, Sheldon Adelson..

Thank you, Dan. Good afternoon everyone and thank you for joining us today. I am pleased to report that we continued to execute our strategic objectives during this quarter.

Despite some obvious challenges in the VIP gaming segment in the nation, we delivered a solid set of financial results, increasing our companywide EBITDA to $1.284 billion, but who is counting. In Macao, we achieved the third quarter record of $809 million in adjusted property EBITDA.

In addition, we continued to return excess capital to shareholders, mainly dividends. Notwithstanding the recent cyclicality in Macao, I am as confident today as I have ever been in the long-term future of our company. This confidence is not based on whimsical fancy, but is founded on the company's sustainable strategic advantages.

Before I take you through some of the highlights for the quarter, allow me to spend a moment to reflect on our company's strategic position. First, we are the creators of the large-scale convention-based integrated resort.

As a result, we enjoy the benefit of revenue diversification and we are able to cater to virtually every type of business and leisure due to that. Today, well over 80% of operating profit in both our Macao and Singapore operations comes from mass gaming and non-gaming segments, with less than 20% of profits coming from VIP gaming.

I built these resorts in Asia to capture long-term growth of consumer spending in Asia. Scale, diversity and critical mass should position us well for future growth. With these advantages already allow us to outpace our competitors as we always have on the bottom line where it really counts.

In the first half of 2014, we secured 34% share of overall EBITDA in Macao's six player [ph] market. Let me point out to you that the highest of the also-ran was 18.4, just under twice the next one. The next one was 13.7. The one below that was 11.2. The one next to that was 15.4 and 9.4 was the last.

We were at through second quarter 2014, we are at 33.9, but in the third quarter, we 34%, substantially in excess of both our fair share of table capacity and at 23% share in gross gaming residents. Going after EBITDA as opposed to revenue is thing that matters most. I have been saying this for years.

Likewise in Singapore, we generate around 60% of the total EBITDA in a duopoly market. Second, the share size of our cash flows. With annual consolidated EBITDA of over $5 billion allows us to pursue development opportunities in new jurisdiction and aggressively return capital to shareholders, again, pay dividends.

Whether our growth is a bit faster or slower in any given quarter does not alter this unique strategic advantage. When others hesitated or counseled otherwise, I pursued development opportunities in both Macao and Singapore concurrently.

As a result, I am happy to say that the company today can simultaneously reinvest capital in the existing operations and future projects. Say growing the generous dividends and continue with the judicious share repurchase program. Now let me take you through some of the highlights of our results in Macao for this quarter.

Macao adjusted property EBITDA grew by 3.2% to $808 million in quarter three. Our gross gaming revenues declined by 5% year-over-year versus the Macao market decline of 7%. So we out bested the market again. Clearly Macao's VIP market weakened further during the quarter.

The reasons for this ongoing VIP decline are well documented, and I don't think I need to repeat them here. Everyone is talking about China reducing its growth from 7.5% to 7.4%. That's a reduction in growth of one-tenth of 1%, which continues to be a rounding error or a meaningless move.

I don't think anyone can perceive an economic slowdown by GDP changing one-tenth of 1%. I think when it turns from 7.5% to 7.6% growth, I guess it will be happy days are here again. The important point is that growth in China continues. The mass business in Macao is still growing at 15% per year, the envy of a lot of industries.

15% growth is still very solid top line growth, and we believe the mass business in Macao will continue to grow for the foreseeable future, in particular, as new supply comes online in Macao, which very clearly remains a supply driven market. I have been saying this for years and my words will continue to come to pass.

Also, as I have said in the past, all things in life are cyclical. We have experienced cyclicality in Macao in the past, and we believe that the current softness in the environment in Macao today is also cyclical. And that is only a matter of time before the cycle reverses itself.

No one has ever suggested that the behavior of Chinese and Asian people, which has been established over a 3,000 year history, is going to change. The important point is that our strategy hasn't changed. Our business will continue to be anchored around the mass market and the secular growth of Chinese tourist.

We have a unique portfolio that is designed to appeal to virtually every type of visitor to Macao. Our property visitation in quarter three reached a new record of 18.2 million, (inaudible), up 8% year-over-year. Our mass table revenue grew by 15% in the quarter, while our ETG revenues grew by 33%.

Our hotel room optimization strategy continues to yield successful results. Sands Cotai Central achieved a new quarter record in mass table revenues growing by 27% year-over-year. Well, I would say that's some ramping up and supported by 24% increase in hotel rooms allocated to the last percent.

Retail sales at our malls grew by 9% year-over-year against the backdrop of declining retail sales. The sales in our malls now account for nearly 40% of Macao's retail goods in categories in which we have a presence. Overall non-gaming revenues grew by 15% during the quarter.

Sands China accounts for over half of the total non-gaming revenues of the six gaming operators in Macao. Out of the six, the average fair share would be 16% and a fraction, we have over half, which demonstrates our clear leadership in this important and profitable segment.

Everyone likes to talk about Macao's diversification from pure gaming, whereas we are the only ones actually delivering on all aspects of that diversification. From the outset, my commitment to the government of bringing diversification of Macao has been unwavering.

I believe diversification is important for Macao, and I believe diversification is important for our business. The financial success of our business in Macao has also allowed us to share the financial benefits out of our growth with our employees and team members in Macao.

We are, by far, the largest employer in Macao, and we have provided generous wage and benefit growth for our team members throughout the years, as well as unrivaled opportunities for their professional development and career progression.

There has been a great deal of noise slightly from certain critics in certain circles about the negative impact of rising labor costs in Macao. Let me share with you that we are more than happy to increase the salaries of our employees there.

And while our employee compensation and benefit costs have increased in dollars terms meaningfully, as we have grown in Macao from about $450 million in 2010 or 10.9% of SCL's net revenue to what will be slightly over $1 billion in the 2014 year, approximately 11% of net revenue.

So how does that make a difference to us, when over four years our increase in revenue has outpaced the increase in wage and benefit dollars.

Clearly, our labor cost have remained very stable over the last four years, when measured as a percentage of revenue and our rate of growth in net revenue has kept up with the growth in labor costs, in fact, in some cases exceeded it. To come back to our three unique differentiators.

First, the scale of our hotel room inventory caters to the broadest range of offerings and customer segments. Second, our retail mall portfolio. By the way, we have secured commitments by retailers for 85% of the retail mall at the Parisian and we are more than a year away from opening there. Our fourth mall. The Parisian is our fourth mall in Macao.

Third, our unique and ambitious events and entertainment strategy, fully utilizing our advantage in having multiple performance venues, particularly the Cotai arena. We now have a track record of bringing world-class events to Macao.

I don't believe any of these unique competitive advantages can remotely be matched by our competition, even after the completion of the next phase of their developments. While there have been and will continue to be cyclical bumps along the path of secular growth, I have every confidence in our ability to clearly grow over the long term.

We have a still under-penetrated Chinese market. We have improving transportation infrastructure. And we, Las Vegas Sands, through Sands China have a uniquely differentiated portfolio of properties and product offerings in Macao. So that completes my opening remarks on Macao operations. Now let me turn to Marina Bay Sands in Singapore.

We generated $352 million of EBITDA at Marina Bay Sands during the quarter, while hold-normalized EBITDA was $15 million higher at $367 million. Despite a 34% decline in rolling volumes, our hold-normalized EBITDA is down by only 2% year-on-year.. I think this again demonstrates the quality and resilience of the cash flow generation at MBS.

Mass win per day reached, and this is a number we have been reporting to you for the last year or two, it reached an all-time quarterly record of $4.8 million, up 7% year-on-year, principally driven by our successful efforts in bringing in the foreign premium mass customers to Singapore.

In the VIP rolling segment, we have chosen to seek some lower volume revenue and have focused our efforts on long-term profitability. We would much rather take in a lower cost, high-end of the market and let somebody else take the much higher cost lower margin end of the market.

We maintained a very prudent reserve ratio during the quarter and will continue to maintain the highest compliance standards in the industry. At the same time, Marina Bay Sands continues to serve as the most important reference site for emerging jurisdictions that are considering large-scale integrated resort development.

It is obvious that that would put us in an advantageous competitive position as a candidate for emerging market opportunities when the first thing they are saying is, they want a Marina Bay Sands, nice based iconic structure, and that's what we specialize in.

Both Japan and Korea have extensively mentioned MBS, Marina Bay Sands, as their model for integrated resort development. Marina Bay Sands is the most iconic integrated resort in the world. That iconic appeal has driven strong growth and valuation from residents of Japan, Korea and the world to Marina Bay Sands in Singapore.

We have prepared and presented in Korea, one of the most iconic buildings ever, will turn out to be the most iconic building in the world and we hope and we believe that its received a very, very strong reception, a positive reception. Again, we are the creators of the convention based integrated resorts.

Our meetings, incentive, convention and exhibition facilities in Singapore have contributed meaningfully to Singapore's appeal in Asia as a nice destination. Our mall at Marina Bay Sands is the most important shopping destination in Singapore, which by itself is among the most important shopping destinations in Asia.

On that note, let's move onto our potential development opportunities in new jurisdictions to which I am dabbling in a minute. In Japan we are pleased to see that progress is being made. Earlier this year the Diet began discussion of proposed integrated resort legislation. The legislative process there continues.

We are pursuing the potential for an IR development in Japan, with great enthusiasm and believe our unique convention-based integrated resort development model will bring meaningful benefits to Japan in terms of business and leisure tourism, employment and economic growth.

We have also been spending extensive time on the ground in Korea, to which I am also going. We have been doing so for some time. As in Japan, we believe integrated resort developments can deliver significant economic benefits to the local and national governments.

In both Japan and Korea, we are willing to commit substantial capital investment to develop large-scale, truly iconic integrated resorts. There is also the potential for Vietnam to move to allow domestic entry with social safeguards in the context of an IR development.

It could also very well be that Vietnam emerges as the jurisdiction suitable for an appropriately scaled integrated resort. And we are assertively exploring opportunities in that market. Financially, we have the wherewithal to pursue developments in all three of these jurisdictions concurrently, if the opportunity to do so arises.

Our track record speaks for itself. Our development capabilities, our operating know-how in every business segment of the integrated resort and our financial strength are unmatched. We believe we are exceptionally well positioned to compete for these development opportunities. Finally, let's address the return of capital to shareholders.

The confidence we have in the strength of our business and the reliability and predictability of our cash flows have allowed us to progressively increase the return of capital to shareholders. Ours remains a uniquely privileged business model.

We can continue to return significant amounts of capital to shareholders through dividends and share buybacks, while retaining more than sufficient financial firepower to pursue both organic growth and new development opportunities for the periods that it will take to plan and develop these and at the same time to generate significant cash flow that gives us plenty of extra money.

Over the last 11 quarters through September 30, 2014, we have returned over $8.3 billion to our shareholders through dividends and stock repurchases, including nearly $7 billion to Las Vegas Sands shareholders and at Hong Kong dollars, the equivalent of over $1.5 billion to shareholders of Sands China.

Also last year we increased the annual dividend for LVS 42.9% for the 2014 calendar year. For 2015, I am pleased to announce that the Board of Directors has recently increased the dividend by 30% to $2.60 per year or $0.65 per quarter, yay dividends. The increase in the dividend will take place beginning in the first quarter of 2015.

We have every intention of increasing the dividends in the years ahead as our business and cash flows continue to grow. In addition to dividend growth, we returned $300 million of capital to LVS shareholders this quarter through a stock repurchase program which I believe completed the previously authorized $2 billion.

This completed the execution of our initial $2 billion LVS stock repurchase authorization. I am now pleased to announce that the Board of Directors has also authorized an additional $2 billion for further stock repurchases.

We look forward to continue to utilize the stock repurchase program to return capital to shareholders and to enhance long-term shareholder returns. In conclusion, we will continue to stay disciplined and execute our business plan. With the right strategy and the right management team in place, I am more confident than ever about our future success.

Before I turn the call over to the operator to the Q&A session, I wanted to take a moment to thank Mike Leven for the meaningful contributions he has made to the company over the more than five years he has served as its President and Chief Operating Officer. His ability to execute my vision for the company will always be appreciated.

While this will be Mike's final quarterly conference call, as he will retire from this position as President and COO at the end of this year, we look forward to his continuing contributions as a member of the Board of Directors for both Las Vegas Sands Corporation and Sands China Limited.

On behalf of the 50,000 worldwide employees of Las Vegas Sands, as well as our Board of Directors and management team, and particularly from me personally, thank you Mike for the efforts you have made on behalf of both our companies. All of us here at Las Vegas Sands wish you all the best in the future. Now I am turning it over to Q&A..

(Operator Instructions). Your first question comes from the line of Joe Greff with JPMorgan. Your line is open..

Good afternoon everybody. Question for you all in Macao on the base mass and premium mass departmental profit margin assumption specifically referring to your slide 21 in supplemental earnings slide deck. The assumptions are lowered for both base and premium mass relative to three months ago.

I kind of understand, I think I understand what's going on in the premium mass.

Can you talk about what's actually going on in both segments relative to three months ago? And specifically when you look at the third quarter results, are those the profit margins that you experienced or are you making further lowered assumptions going forward? And then on a follow topic, if you can talk about the smoking ban impact? That's something, obviously, we all are curious about to hear your experiences.

Thank you..

I will tell you, Joe, I will start with the easy one. Smoking, we don't think has been impactful.

It's difficult with all things going Hong Kong, and obviously, the other pressures in Macau, all the headwinds we have been facing, it is really hard to segregate the smoking issue directly, but our anecdotal feedback is pretty positive that it doesn't appear to be impactful in any segment.

The smoking areas are being utilized and business appears to be unaffected by the smoking issue. As for the margin issue, I think we are all aware that there is competitive pressures in the premium mass segment. I think you will hear that one, anybody who has been in Macau recently.

We have the wonderful structural advantage of having a lot more control, a lot stronger position in mass mass or base mass segment. We remain steadfast and I believe we can get a 45% plus margin there.

That's somewhere we think today and tomorrow the decisions made by this company 10 years ago will resonate for years to come in terms of having more gaming positions, more sleeping rooms, more retail and simply more control over that segment.

So we are very much a big believer of these standalone tables and more tables and more gaming capacity, more retail, et cetera. So we are very secure that we can run the highest margins at 45% plus in the base mass or mass mass segment. Competitive pressures are unavoidable right now in premium mass.

I think you will see by other, the competitors versus our numbers that win per unit is one metric but flow through is another. Our margins have dipped a bit. I think they will, with the declining junket situation, I think there will be more pressure in premium mass.

Having said that, our blended flow through is going to stay around 40%, and we believe it will rise with the market getting stronger.

Again, our strength, the breakdown of our mass revenues is still leaning heavily towards the pure mass side than mass mass side which gives a very strong advantage to maintain margin and we think the other competitors are going to have a different situation because we have obviously structurally a better place to build.

On the premium mass side, I think there has been escalating pressure and that will continue..

Your next question comes from the line of Shaun Kelley with Bank of America Merrill Lynch. Your line is open..

Hi. Good afternoon guys. Just two questions from me. My first would be, on the buyback I think previously you guys have given some kind of general target around maybe $75 million or so a month.

Just any guidance you could give us folks in terms of being more opportunistic on that, given the recent dip in the share price? And then my follow up would be, on the capital expenditures, it looks like things were pushed out a little bit on the Parisian and maybe some of your other projects as well.

I am referring to one of the slides laid in your slide deck. If you could just give us a little bit more color on some of these changes in the capital expenditure expectations, that would be great. Thank you..

Hi Shaun, it's Patrick Dumont.

How are you?.

I am great, Patrick. Thanks..

In terms of the buyback, the focus of the Board has been that it will be programmatic in nature. The levels haven't been exactly set as of yet, but it is something that we will identify over the next couple of weeks..

We just got the okay. This is Sheldon. We just got the okay from the Board. I think it was Monday and we are having a board meeting coming up next week in Macau. We are having two separate board meetings, LVS and SCL, and we will attempt to come out with the details of the program.

It will probably be somewhat similar to what we have done so that we could spread it over a period of time. But then again, as any opportunism arises we should take another look at it then..

And with respect to Parisian targeted opening date?.

Parisian targeted opening date. We have two categories of opening date, partial opening and complete opening. The last I am going to look at it next week. As I said earlier, I am going to Japan, Korea and I am also going to Macau.

The last thing I have been told is that a full opening will occur in March, but we can still achieve a partial opening of the casino and some number of rooms if the government will allow us to do that in November or December. So it's not a minor issue. It's maybe we have a partial opening, which has occurred in the past to us and everybody else.

So I hope we can open partially in November, December of 2015..

Thank you very much..

Thanks, Shaun..

Your next question comes from the line of Thomas Allen with Morgan Stanley. Your line is open..

Hi, good afternoon. Two questions on Macao. First one, just following up on the earlier commentary regarding premium mass competition, and also just on slide 21 you are showing that there is slower growth there versus base mass. You have continued to shift tables to the premium mass segment over the past couple of quarters.

Are you going to slow that down at all? Or are you going to shift back to mass mass? And then the second question is just around the Macau market in general, visitation continues to be quite strong, up high single digits but gaming revenue growth has obviously decelerated.

Can you just talk a little bit more about the shift in the customer mix? Are really customers coming fewer times or just any interesting dynamic you can add? Thanks..

The first thing, Thomas, we will move tables based on market demand obviously. We have moved away, as you know, last couple of years from the junket segment into premium mass as well as pure mass and that will be the continuing mantra for the team over there as time tells what to do.

It's very simply a managerial position to take that wherever the most money is made at the table, that's where we will deploy it. And there is no magic to when we have done it in the past. There is no magic in the future. The market will dictate that.

At this point, you know, there is excessive supply on the junket side than probably on the premium mass side. So my guess, we would be more focused on mass mass where our biggest advantage resides. As for the new growth in new visitor, first thing it is very positive that we are seeing more growth in Macau. I think it bodes well for future in Macau.

I think it bodes well for the story. China, we believe, has continued to be very supportive of Macau. The President will be there this December.

The infrastructural improvements continue at a massive scale and given the more settled environment, meaning Hong Kong becomes calmer, smoking is absorbed, we believe the Macau story will continue quite nicely and future supply will grow demand and Macau will offer the Chinese growing middle-class a first-class destination.

Having said that, as you noted, there is not the same amount of growth in the GGRs commensurate with the growth in the pure visitors to Macau. I think that will change in time. We believe very much so that as new markets open up and the transportation matures, that problem will solve itself.

It's a much better situation than having less demand for the city in terms of visitors shift. So clearly we want to see more GGR growth coming out of new visitors but the numbers are what they are.

We remain very confident that the mass mass business, which is our strength and the backbone of our strategy will yield a great profit in the future, and those future people coming to Macau, they won't just sleep there and eat there and go see shows and shop. They will in fact gamble..

This red herring of the smoking issue, which I talk to the people in Macau every day, seems to have no impact. The few people grumble a little bit about going into the smoking lounge, but they are an obedient society, and they do what the government says. And they go to the smoking rooms and they seem to enjoy and come back out.

It reminds me of what the colloquial title was of the year 2000. There is no nature, God and nature must have known whether it was Eastern Standard Time or Central or Mountain or Pacific Standard Time or maybe Hawaii Time, that will maybe the first reporting of midnight Australia Time, I don't know, but it was all a big hullabaloo about nothing.

So to quote, I think it was Shakespeare, "It's all a tempest in a teapot." Was that Shakespeare?.

I am not sure..

We have a Brit here.

Is that, you said Shakespeare?.

Almost, you were paraphrasing him..

Paraphrasing, okay. Well, he is not really a Brit. He is Scottish. Almost, not a Brit..

Anything else, Thomas?.

Your next question comes from the line of Carlo Santarelli with Deutsche Bank. Your line is open..

Hi, everyone. Good morning or good afternoon. Thanks for taking my question. Just on the VIP side in Macau, it appears as if there is a little bit of a difference in the incremental margin for the addbacks.

And I am wondering if maybe there was a delta in your direct hold this time that's causing it to look a little bit different?.

I don't think so..

Carlo, you are asking about the mix issue? I guess you guys get all the lead data that doesn't include our specific hold on our non-junket business..

Yes, I was just wondering --.

I can tell you that the margins in VIP in Macau are healthy. Commission rates are not going up..

That's what I was looking for. Thanks, Dan..

Yes..

Your next question comes from the line of Felicia Hendrix with Barclays. Your line is open..

Hi. Thanks for taking my question. With the new buyback authorization, can you just discuss for a moment how you are planning on funding that? Will that be continued from free cash flow? Are you planning on increasing leverage? How are you thinking about that? And then I have a follow-up about Singapore..

Money. According to the song, it's burning a hole in our pocket. We haven't addressed that yet, Felicia..

Okay, and --.

We know that we have plenty of money and we are contemplating, we been using all cash for the development and construction of the Parisian Macao, and we are now going to go out and get a separate project financing that will recover a lot of the cash that we put in there.

So earnings at the rate of 5%, 5.5%, 6%, 6.5% that I see some of you analysts come out with, I think per year, I think we are going to have plenty of cash flow..

Yes. That's helpful color. Thank you. And then just on Singapore. Rob, we have seen it in the numbers. You are sacrificing some of your roll for profitability, which is a great strategy.

Just trying to think about, for those of us who are modeling this, what is the optimal level of roll you are trying to get to as you maximize the profitability there?.

It's a hard question to answer, Felicia, because --.

That's saying how high is up?.

We would love to be rolling $60 billion a year. We just have some headwinds we just can't overcome. One is the commissions. We remain steadfast in our belief that to pay too much commission makes no sense in terms of margin and profitability. Second, as we are very cognizant of the atmosphere in China and lending exorbitantly in China.

So call us too conservative for today but as you can see with this quarter's results, we are bearish in terms of that segment right now. We love to see return to days of $15 billion a quarter, with appropriate margins. It's tough to model because as you know it is highly concentrated. It is driven by not as many players as we like it to be.

We are also in a very competitive environment vis-à-vis our competitor there plus, the Philippines. I wish I can give you color that I could believe myself, but the team and I are working through it. In fact, we are meeting next week to talk that very issue through.

We are trying very hard to remain focused on profitability and for right now, I think you can model up more growth in our $4.8 million a day and 60 plus point margin. I am not as confidence to give you any kind of forecast how we see the rolling business. It really depends on the environment..

Unfortunately, we have a competitor that has never worked in a competitive market before. Genting Berhad didn't have any competition and exclusive in Malaysia. So apparently they are still trying to get used to having competition.

But when they have competition, it appears as though their only response to that is to what we call quote, "buy the business." They are paying up to 1.7 and 1.8, anecdotally above for the junket -- not the junket, but they are paying the same thing to the premium direct VIP players, and we are still down a much lower reasonable number.

No more than what we pay in Macau to the junket reps. So that's why we have grown to take over in excess of 55% of the market GGR compared to their 45% of the market and who knows, maybe one day, they will get used to competing on the basis of a quality product. If they ever build one and they won't have to buy the business..

I wouldn't say we are out of that business. The one thing I would caution is that, it's a very thin and concentrated business. I would like to say we are back in it in a big way. We have the product. We have the demand.

And we also have the headwinds of the fact that we are very, very careful and trying really hard to be the most compliant people in the industry. So moving money for us is also a challenge. But having said that, we are hoping to have a stronger day in that segment in Singapore in 2015..

Let me give you an idea. I wanted to discuss this about where we stand competitively, what kind of advantage we have in the emerging markets. For instance, when we plan an integrated resort, our competitors, for instance Genting in Sentosa.

When we say we have nice facilities, we have Asia's largest ballroom at 90,000 square feet column free, while our competitor has a 60,000 foot volume which doubles up as an exhibition space and event center. We have over 400,000 square feet of additional exhibition space when our competitive downtown Suntec has only 200,000.

So when we plan, we don't say Genting has only 17 meeting rooms, we have 250 which can be combined into smaller ballrooms that will hold 600, 700, 800 people for dinners. And out ballroom is sold out six months in advance.

So when we go into Japan or Korea and we say we have an integrated resort, we will go in with somewhere, maybe 500 meeting rooms and somebody else will come in and say, oh, we are an integrated resort. We have some of the components that LVS or SCL has and they will come out with 20 or 30 meeting rooms.

We based our meeting rooms on a formula that's calculated on so many square feet per sleeping room and the allocation of total room supply towards the MICE business. So we say we have meeting rooms, we have meeting rooms.

When we talk about having the mall, we have up to and in excess of a million square feet of mall and our competitors come along and say, oh, we have a mall as part of our IR and see we have got 50,000 square feet and about a dozen retailers.

So we can talk about 300, 400, 500 retailers in the mall and that gives us the critical mass and takes us to where we are in Macao. My original vision was, is and will be critical mass.

But it's based on an educated and informed calculation of how many MICE meeting room, how much MICE space we have based upon the number of sleeping rooms, we allocate to MICE based upon the entertainment. Look, we are the only place that has a museum and we have arenas and we plan arenas in our future development.

So that differentiates us between competitive slate..

Great, thank you..

Your next question comes from the line of Robin Farley with UBS. Your line is open..

Thanks. I wonder if you can talk about your interest in Japan? There is some discussion that locals may not be allowed. And does that change the scope of what you think you could do there or what you would be willing to invest since locals would have been a significant part of a project there..

From our standpoint, I will say that we will not be interested in Japan or any other country on a foreigners only basis. We can't do that. Our business model won't allow it. I could point out to you that in Korea there are 17 casinos. One, Kangwon Land is the direct with domestic entry.

The other 16 foreigners only casino don't do as much combined as the single domestic entry casino does and it's different people have different the estimates.

And depending on what time of the year, Korea is in the snow belt and so is the North Korea -- I am sorry, north of South Korea is in the snow belt as is Japan and I spent a lot of time in both places. But it takes anywhere from two-and-half to four hours to drive depending upon weather and traffic.

But the foreigners only casinos in Korea cannot anticipate getting large amounts of business and therefore they can't build a true integrated resort with all of its components that need the casino to subsidize the loss making components. So, from our standpoint, we are not interested in developing a multi-billion dollar resort and nobody else can.

If somebody just wants to open a small casino box and try to get people of foreign countries, say from China to come to Korea or Japan, all we have to do is look at South Korea and Jeju Island has got half of the foreigners only casinos and ask ourselves whether or not a plain casino with one or two restaurants can compete with the humongous and big integrated resorts in Macau and in Singapore.

We only have to look at Australia and Philippines to see that they don't have the components of a true integrated resort. But they do a good job. They are well regulated. We went out there and don't anticipate going there. And we are not interested in foreigners only resorts..

Okay, great.

That's helpful, and for my follow-up question, I wonder if you can comment on, with Golden Week, whether the players that had not been to Macau in a while come back, did id help collections? Is it your sense from the junkets, did that help at all with liquidity in the system?.

Dan will take that. Well, I am not going to talk about Golden Week in the middle of October in this call. I can't do it..

But reported in the third quarter, not on when Golden Week is..

Okay..

That's in the fourth quarter..

Thank you..

Sorry..

Your next question comes from the line of Steven Kent with Goldman Sachs. Your line is open..

Hi. Sheldon, when I looked at slide 28 of your deck, I saw how well once again the mall is doing.

And I just wanted to once again ask your thoughts on selling it and then to combine that with the ability to use that cash, basically sell the mall at pretty high profitability, pretty big multiples we are still seeing out there and then use that cash to buy back stock at an even faster pace and just create that arbitrage.

I just wanted to see what your reaction was to that and whether that's something, whether those are two separate decisions? Or whether they can be combined?.

You wanted to know whether or not we are interested in selling the malls?.

Yes..

I did give out the number to you above the dark long arrow spanning all the bars. It says 19.1%. You think that this is an appropriate prudent time to sell while we are still growing and that includes a little slow down to 9% in the last quarter or last two quarters. Part of our properties can go up 20%, 30%. We have expanded and improved significantly.

The mall at the Four Seasons which is running on average about $5,500 per square foot per annum and we have the DFS boutique shops that are running at $7,000 a square foot. I was talking to somebody with authoritative data points in Saks Fifth Avenue in New York City and I think it is only running at $1,000 a foot.

And I look at the Four Seasons mall which does $7,000 per square foot compared to other like Neiman Marcus and other top U.S. brands, they don't come within shouting distance where the malls are.

We don't yet see if we have ever come down to under 10% growth, we would consider that, I would never sell this mall at approximately 20% growth with the likelihood of more. We are redoing a lot of the slower malls and slow retailers in Macau.

We are adding on 330,000 net rentable square feet and we have submitted four other projections, including an 800,000 square foot retail mall on the Tropical Gardens and I hope to see the government when I go there next week. We are the leading IR developers in shopping by far.

Actually as a matter of fact, one of the problems is that, say you look at $536 million, there is no mall having $536 million in the third quarter of 2014, when we continue our tweaking of MBS and Four Seasons and when we add on more space at the Parisian, we are bigger than any of the REITs in Asia.

So there is no single REIT that's in a position to buy us. As a matter of fact, we would be more in a position to buy them. But as long as we keep growing, I could see that number going up significantly over the next handful of years. And I don't know.

We are going to have to -- the original plan was to monetize it and at a 4% cap rate, which we think is achievable, we should be looking at it, but it's tough to want to sell when you are growing at 20%, 30% a year..

Okay, so that's really, because the valuations were already there and it's really that you are just continuing to see growth and still see some more opportunity there.

Could I then just ask, how are the discounts in Macau manifesting themselves? What are the things that your competitors are doing to eat away at this? Is it giveaways? Is it discounts on losses? What are they doing that allows them to effectively do this, especially when you look at your own properties, which are so iconic, so attractive? It's hard for me to imagine what they could be giving to get people to come to their place rather than your place..

You mean on the gaming side?.

Yes..

They are not discounts there. Discounts that take place here in Vegas, in the U.S. We always take all discounts, but it is the rolling chip by commission..

So that's where --.

You mean the mass, Steve? You mean the mass, I assume, right?.

Yes, I am talking about the mass.

What is going on there?.

Steve, two things. Mass is obviously multi-segment. Our margins have maintained the highest levels in the pure mass. And again, that's our strength. It resides there today, tomorrow and forever because they are structurally managed due to asset class in our portfolio. On the premium mass, it is lot more competitive.

We compete in that segment as well, and pressure there were comes from labor costs, which Sheldon alluded to in his opening remarks, as well as promotional chips as well as complimentary rooms as well as lucky chips. There is multitude of ways you can incent customers to gamble.

And think of it as when there are only so many tables in the market and the junket business is eroding, people are more focused on that segment. So I think you will see, across the board, margins in that area are going to be difficult.

We are doing that at all and our strength, which is over $2 billion of EBITDA, emanates from the pure mass side, and that's where we steadfastly maintained that. As the market is healthier, we would like to grow our margin back into the 42%, 43%, 44% range combined.

But for now, we are in the 30s in the premium mass and then the mid-40s in the pure mass..

Thanks for the color..

Sure..

Your last question comes from the line of Harry Curtis with Nomura. Your line is open..

Hi. Sheldon, I had a quick question on a comment that you made a couple of weeks ago about your, I don't know if it was a hope or a belief that you could see an improvement in the VIP business over the coming few months.

My first question is, do you have confidence behind that? Or what might you be looking at to see that kind of improvement? Then the second question that I had is, if you guys could talk about the expected number of tables that the Parisian is going to get? What are the formulas that if you were the Macau government, you would espouse? Thanks..

I will answer the last part first. The Macau government has said repeatedly that it will give favoritism to the operator that puts in more non-gaming space than gaming. And they said, nobody will get any tables if the gaming space represents more than 10% of the total amount of space to be built. This is our business model.

I heard that one of our competitors was enlarging their lobby significantly so they can have a greater of non-gaming to gaming. I suppose, counting lobbies might be part of that trick. I did say that it would be a few months, I was quoted as saying two months and thank you, Harry, for asking that question.

I forgot, but I did want to try to find a place to correct that. It was that day or the day before that the Chinese government had said that the investigation of the corruption was complete.

I have since heard that the investigation in corruption has been narrowed to a certain segment of this society, and it's not the impression that the press gave based upon that day's or the day before statement that they were stopping the investigation on the high profile people who are on the government, people that were gaming.

So I would have to rethink. I don't really know. I said that honestly and with good information at that time, but I think it will then have to get greater clarification on what the central government means about the narrow portion. I saw a couple of days ago that they enumerated the number of cases they were investigating.

It was somewhere around 6,000 or 7,000 individual cases. I don't know what that means. They said there were party members, the communist party members that amounted to about 7,000. They were investigating. I have no idea whether that's a complete number, an incomplete number.

I am sure the government is pointing out the right numbers, but what that represents in terms of how much they anticipated investigating. So if I were asked the same question again today, I would say that it's tough to say. It could be anywhere from three or four months.

And most of the analysts are projecting that by the second quarter of 2015 that it should either already be on the growth track or will accelerate being on the growth track by the second quarter. But one thing I will say for sure, it's not going away. It's going to come back. Again, nobody's changing the culture of 1.4 billion people.

It simply does not happen.. It is not if, it's when.

Does that answer your question, Harry?.

It does. If I could just ask one other quick question, Rob. Rob, on a hold-adjusted basis in Macau, and I think I have got these numbers right, but I am not sure, it looks like your margins, your EBITDA margin, was roughly flat year-over-year which I think in this competitive environment and the decline in VIP is pretty exceptional.

But the question is, given your more cautious comments about margins on the premium mass side, is it going to be tough to hold those margins flat? Or do you think that there are things you guys can do on the expense side to at least keep those margins flat?.

Two thoughts, Harry. One is, there are certain things we can do and I think the team there is addressing the expense part of the ledger. But honestly, we believe is that the mass business maintains and maybe even exceeds and the margin as you get stronger in, hope, this quarter in 2015.

So again the great majority of our business comes out of is on mass. These are margin and our EBITDA is so strong in Macau is because we have a mass-driven model over there. And so I think maintaining the margin is very, very possible, if not growing the margin. The question is the competitive set, what they do in premium mass segment.

That's the one thing I can't understand will happen there. Hopefully that remains an environment where you can work in the current structure and not losing more margin in the premium mass side. Mass mass feels very good and we can control expense and perhaps even get some better cost control over our numbers.

But, in essence, our story is so much different than anybody else because of the fact that mass segment is our strength and that's where we reside primarily and that's the biggest part of our composite of our EBITDA..

And Harry, to be clear, on page 10 of the slide deck, we actually had a 100 bip increase in margins on a hold-normalized basis from 34% to 35%. So margins increased by 100 bips on hold-adjusted basis, despite the fact that we are seeing pressure in premium mass..

Very good. Thank you..

Thank you..

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