Do I start with this first before Sheldon comes in?
Yes, sir. Sheldon will come in about every third to the way indoors.
Okay. Good afternoon, everybody. The 2013 annual meeting of stockholders of Las Vegas Sands Corporation will please come to order. My name is Michael Leven. I'm the President and Chief Operating Officer of Las Vegas Sands Corp. I would like to welcome all of you and thank you for your interest in our company. As president of the company, I will preside at this meeting. The agenda for this afternoon includes all formal business stated in the proxy statement. Following this meeting, we will have a period during which we will be happy to answer your questions. Please note that this meeting is being webcast on our investor relations website. Also present at the meeting today are Sheldon G. Adelson, our Chairman and Chief Executive Officer, and other members of our board of directors, Jason Ader, Irwin Chafetz, Charles D. Forman, George Koo, Charles Koppelman, Jeffrey Schwartz, and Irwin Siegel.
Victor Chaltiel, unfortunately, is not able to join us in person today. Rob Goldstein, our Executive Vice President and President of Global Gaming, is also here today, along with Ken Kay, our Executive Vice President and Chief Financial Officer, Chris Cahill, our Executive Vice President of Global Operations, as well as Ira Raphaelson, our Executive Vice President and General Counsel. Ira Raphaelson will act as Secretary of the meeting. Each of you was given the rules of conduct when you entered the meeting room this morning. Additional copies are available in the registration area. It is our intention to conduct this meeting in accordance with the agenda and rules of conduct. Please remember that an opportunity will be provided immediately following the formal portion of the meeting for a Q&A.
Let us now proceed with the formal business of the meeting, namely, one, to elect four directors of the board, each for a three-year term. Two, to consider and act upon the proposal to approve the performance-based provisions of the company's 2004 Equity Award Plan. Three, to consider and act upon the proposal to approve the performance-based provisions of the company's Executive Cash Incentive Plan. Four, to consider and act upon a non-binding advisory proposal on executive compensation, and five, to transact such other business as may properly come before this meeting. Will the Secretary please report on the mailing of the notice of this meeting to all stockholders and the availability of the stockholders list?
Yes. Thank you, Mr. Meeting Chair. I have an affidavit in hand of the mailing of the notice of internet availability of the proxy materials to each shareholder of record as of the close of business on April 12th, 2013. I also present an alphabetical list showing all persons who are holders of record of the company's common stock at the close of business on April 12th, 2013, that is the date the board of directors fixed as the date for determining stockholders entitled to notice and to vote at this meeting. The list has been duly certified by the American Stock Transfer & Trust Company, the transfer agent of the company's shares.
This list has been available for inspection for the 10 days prior to this meeting at the company's headquarters, is available for examination by any of the stockholders of the company for any purpose germane to this meeting at any time during the meeting. Thank you, Mr. Chairman.
Will the Secretary please file the list of stockholders, the affidavit of mailing, and copies of the notice of internet availability of proxy materials transmitted to stockholders with the records of this meeting?
I will, Mr. Chairman.
Thank you. Bill Kennedy of the American Stock Transfer & Trust Company has been asked to act as Inspector of the election at this meeting. Mr. Kennedy is present and has submitted an oath of office, which will be filed with the minutes of this meeting. I now ask that all those present with proxies who have not already done so, please fill their proxies in with the inspector. If there are any stockholders present in person who did not register at the door and have not filed a proxy, will they please give their names and number of shares owned to the attendants at the door at this time? Will the inspector now report whether a quorum is present?
The shares outstanding on the record date, which is [inaudible] this meeting consists of 823,856,853 shares of common stock. Of common stockholders present in person or by proxy, the majority of those shares are represented at this meeting either in person or by proxy. A quorum is present.
Thank you. On the basis of the report of the inspector, I declare a quorum present and the meeting duly convened and competent to proceed with the transaction of business. As noted in the proxy statement, the purpose of this stockholders meeting is the election of four directors of the board for a three-year term, to consider and act upon the proposal to approve the performance-based provisions of the company's 2004 Equity Award Program, and to consider and act upon a proposal to approve the performance-based provisions of the company's Executive Cash Incentive Plan, and to consider and act upon a non-binding advisory proposal on the executive compensation. Votes will be taken on these matters after all nominations and proposals have been introduced, and the Inspector of Election will make a report on the outcome of the votes. We will now proceed with the formal business of the meeting.
Please note that after each of the matters to be considered has been formally proposed, we will circulate written ballots so that stockholders who have not already voted by proxy may vote on these matters. The first order of business is the nomination of four individuals to stand for election to the board. All four of the company's nominees are presently directors of the company. I would like to introduce them to you at this time. They are Sheldon G. Adelson on my left, Irwin Chafetz, Victor Chaltiel, who is not present, and Charles Koppelman. Is there a motion on the proposed election of the three nominees?
I nominate Mr. Adelson, Mr. Chafetz, Mr. Chaltiel, and Mr. Koppelman for election to serve as directors for a three-year term, until their successors have been duly elected and qualified.
I second the motion.
Are there any questions or comments with respect to this proposal? There are no further nominations, a motion to close the nominations is in order.
I move that the nominations be closed.
I second the motion.
It has been moved and seconded that the nominations be closed, and we will collect and tabulate the votes later in this meeting. The next order of business is the consideration and acting upon the proposal to approve the performance-based provisions of the company's 2004 Equity Award Plan. I will now entertain a resolution to act upon the proposal to approve the performance-based provisions of the company's 2004 Equity Award Plan.
I move that the following resolution be adopted: Resolved, that the performance-based compensation provisions of the company's 2004 Equity Award Plan be, and they hereby are confirmed, ratified, and approved in all respects.
I second the motion.
The motion has been moved and seconded, and we will collect and tabulate the votes later in the meeting. The next order of business is the consideration and acting upon the proposal to approve the performance-based provisions of the company's Executive Cash Incentive Plan. I will now entertain a resolution to act upon the proposal to approve the performance-based provisions of the company's Executive Cash Incentive Plan.
I move that the following resolution be adopted: Resolved, that the performance-based compensation provisions of the company's Executive Cash Incentive Plan B, and they hereby are confirmed, ratified, and approved in all respects.
I second the motion.
The motion has been moved and seconded, and we will collect and tabulate the votes later in the meeting. The next order of business is the consideration and acting upon a non-binding advisory proposal on executive compensation. Although the vote is advisory and non-binding on the board of directors, the compensation committee will take into account the outcome of the vote when considering future executive compensation decisions. I will now entertain a resolution to act upon a non-binding advisory proposal on the executive compensation.
I move that the following resolution be adopted: Resolved, that stockholders approve the compensation of the named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC, which disclosure shall include the compensation discussion and analysis, the compensation tables, and any related material disclosed in the proxy statement.
I second the motion.
The motion has been moved and seconded, and we will collect and tabulate the votes later in the meeting. I now declare the polls open for voting by ballot. All those who wish to vote by ballot should obtain a ballot from the attendant. If you have already filed your proxy, it would simplify the count greatly if you would not fill out a ballot unless you wish to change your vote. I would also like to point out that most of you who returned proxies authorized the individuals named in the proxy to vote all proposals coming before this meeting. Has everyone voted who wishes to vote? Apparently, everyone has. I therefore declare the polls closed and ask the inspector to prepare a report on the voting. While the inspector is counting the ballots, I would like at this time to give Sheldon G.
Adelson, the Chairman of the Board of Directors, Chief Executive Officer of Las Vegas Sands Corporation, and founder of the company, the opportunity to say a few words.
Thank you, Mike. I want to thank all of you for joining us here today in New York. Thanks to all of you who have joined us this afternoon via our webcast. I'm pleased to report to you that we had a very successful year in 2012. Before we discuss our operating results and address your questions, I wanted to share some important news. I'm extremely proud to announce that our outstanding financial performance, together with our strong cash flows and strong balance sheet, have enabled the Board of Directors to initiate a multi-year share repurchase program. The share repurchase program will complement our recurring dividend program and will provide another meaningful avenue for the company to return capital to shareholders. The initial authorization for the share repurchase program will be $2 billion. We plan to utilize the program in an opportunistic fashion in the future.
We believe the implementation of our share repurchase program, together with our previously established recurring dividend program, will allow us to maximize returns to shareholders in the years ahead. That's great news. Let's not overlook the importance of the recurring dividend program we established during the year. The Board of Directors established a recurring dividend of $1 per share during the 2012 year. In addition, the company declared and paid a special dividend of $2.75 per share in December 2012. The Board of Directors was also able to increase the recurring dividend for 2013 by 40% to $1.40 per share, and we remain committed to increasing the recurring dividend meaningfully in the future as our businesses and cash flows expand.
It is gratifying that the company's business and cash flows have grown to a level that enabled the company to return nearly $3.1 billion of capital to shareholders in 2012 while retaining ample liquidity to pursue future growth opportunities. I'm extremely proud to be able to deliver strong growth for our shareholders as well as income to our dividend program and enhanced equity returns through the stock repurchase program. As the company's largest developer, our interests are aligned. I'm sorry. As the company's largest shareholder and also developer. I get two hats. They mess up my hair. As the company's largest shareholder, better, our interests are aligned. I have a vested interest in maximizing shareholder value, and the implementation of our stock repurchase program provides another avenue with which we plan to do so in the future.
I'm also pleased to announce that my vision for the Cotai Strip to serve as an international business and leisure tourism destination has taken another major step forward today with the addition of the Four Seasons-branded apartment hotel units on the Cotai Strip. These luxurious residences will provide visitors from surrounding countries the opportunity to own units on the Cotai Strip and will allow them to utilize the retail, dining, and entertainment amenities of the Cotai Strip more frequently and for longer periods of time. We look forward to continuing to contribute to Macau's growth as Asia's leading business and leisure destination in the years ahead. This will also be an open door for us to continue with development of the co-op form of ownership of selling apartments as opposed to the condominium form of ownership.
The permission from the government was memorialized in what's called gazetting that occurred Wednesday morning, this morning, Hong Kong time. We had to notify the Sands China Limited listing on the Hong Kong Stock Exchange before the Hong Kong Stock Exchange opened up this morning, but they didn't. Through some technical glitch, they didn't announce it till midday over in Hong Kong. Turning now to our operations for the year. What I wanted to say was that we have potentially two more developments. One is partially started. It's the St. Regis Hotel on lots five and six, now called Sands Cotai Central. There are three buildings that are completed.
The original plan called for the fourth, the fourth building is the St. Regis combination of about 460 rooms of St. Regis rooms managed by the St. Regis division of Starwood Hotels, and they will service about 300 apartments that will be sold on a co-op, cooperative form of ownership. We have that already up about eight floors, the construction itself is already ready. It's constructed for the first eight or 10 floors, and all we have to do is build the upper 30-plus floors. We also have a permission to build another apartment house and sell it the same way under the cooperative form of ownership on the lot known as Lot 3, where we're developing the Parisian Hotel and Casino. That means two more properties for us to develop.
The third property that we've already been submitting plans, and I believe working on the ground, is the property we're calling the Tropical Garden Retail Mall. It will be unlike the retail malls that we have in Sands Cotai Central and unlike the retail mall at the Four Seasons, the shops at the Four Seasons. Unlike the retail mall of about 300, 350 tenants that we have in the Venetian Macao, in the Grand Canal Shoppes. Turning now to our operations for the year. 2012 saw the company continue to successfully execute our operating strategies and fortify our position as the preeminent worldwide developer and operator of premium convention-based integrated resorts. The company delivered another industry-leading financial performance in 2012 and achieved record revenues, adjusted property EBITDA, diluted earnings per share, and cash flows from operations.
We also saw the benefits of our integrated resort business model extend far beyond our own financial success. The company's properties and service offerings featuring world-class dining, shopping, conventions, group meeting, and entertainment experiences enhance the appeal of our host countries as business and leisure tourism destinations while helping to diversify their economies, attract outside investment, and increase employment. We are particularly proud that our investments in the special administrative region of Macao and in Singapore have successfully enhanced the stature of both locations as international business and leisure travel destinations while generating strong growth for the company. That growth should continue in the years ahead as the expanding wealth and rise of the middle class throughout the Asian region should meaningfully increase business and leisure travel to both markets.
If the right conditions for investment are established, we believe our integrated resort business model could provide meaningful economic benefits in additional countries in Asia and around the world. We believe our unmatched track record of successful integrated resort development, coupled with our industry-leading financial strength, uniquely positions us to secure and capitalize on the most promising integrated resort development opportunities in the world. The company remains committed to maximizing returns to shareholders through the execution of our three-pronged operating strategy. First, the maximization of cash flow from our existing integrated resort properties. Second, the development of new destination integrated resort properties around the world. Third, the continued growth of our return of capital to shareholders. Yay, return of capital. Thank you for your support and the confidence you continue to show in our company.
I would like to thank our 50,000 team members for the hard work over the last year and congratulate them on a job well done. We look forward to sharing with you the ongoing success of the company in the years ahead, and we look forward to addressing your questions in just a few minutes. Mike?
Thank you, Mr. Adelson. Now the results of the voting. Let us now proceed with the voting results. Is the inspector ready to report?
The results of the voting are as follows: In the election of directors, Sheldon G. Adelson, Irwin Chafetz, Victor Chaltiel, and Charles A. Koppelman have been elected directors of the company by the affirmative vote of a plurality of the votes cast at the meeting. With respect to the proposal to approve the performance-based provisions of the company's 2004 Equity Award Plan, the proxies and ballots representing a majority of the votes cast by shareholders present in person or by proxy and entitled to vote at this meeting were voted in favor of the resolution, and therefore, the proposal has been passed.
With respect to the proposal to approve the performance-based provisions of the company's Executive Cash Incentive Plan, the proxies and ballots representing a majority of the votes cast by stockholders present in person or by proxy and entitled to vote at this meeting were voted in favor of the resolution, and therefore, the proposal has been approved. With respect to the non-binding advisory proposal on the executive compensation, the proxies and ballots representing a majority of votes cast by stockholders present in person or by proxy and entitled to vote at the meeting were voted in favor of the resolution, and therefore, the proposal has been approved.
Thank you. On the basis of the report of the inspector, I declare that the resolutions covering the election of four directors of the board of directors, the proposal to approve the performance-based provisions of the company's 2004 Equity Award Plan, the proposal to approve the performance-based provisions of the company's Executive Cash Incentive Plan, and the non-binding advisory proposal on executive compensation have all been approved. Will the inspector please prepare a written record to be filed with the records of the meeting? If there is no other business to come before the meeting, a motion is in order that the meeting be adjourned.
I move the meeting be adjourned.
I second the motion.
It has been moved and seconded that the meeting be adjourned. All those stockholders in favor signify by saying aye.
Aye.
Those stockholders opposed by saying no. The motion is carried, and the meeting is adjourned. At this point, we would be glad to answer questions that you might have regarding the company. If you have a question, please rise. Identify yourself so that we may have a complete record of the meeting. Please wait for one of the assistants to come to you with a microphone before proceeding with your questions or question, note that the question and answer period is being webcast on our investor relations website.
First off, great job on what you guys have done, again. Secondly, considering the significant presence in China and the level of operations and success you've had there and the future plans, what do you believe will, if anything, happen with the new administration in that country? Will it have any effect on the operations?
You okay? Okay. We don't see any difference in their overall policy. They've recently started or about to start a new five-year plan, all the indications are that the Chinese government is supportive of the way that Macao is running its business. Macao has a basic law that the Chinese government doesn't interfere with them. I just heard this morning that, it's strictly rumor, that the Chinese Yuan, the currency of the People's Republic of China, the PRC, may be allowed to float and to be convertible. If that happens, that would be very positive for Macao because it will allow people to get money out of the country, which is one of the issues today, and it probably will not put a limit as to how much money people could take out.
Today, there is such a limit, it would be beneficial to all the operators in Macao if there was no limit. That would be an extremely positive step, if it's true and if it happens. Otherwise, there's nothing else that we know of that would have an impact, material or otherwise, on our ability to continue doing well there. Does that answer your question? You're welcome. Is there another question here?
Yes. Hi. Alan Burke from Coconut Creek, Florida, now. I just moved down there, new resident of Florida.
Collecting coconuts?
Yeah. Like coconuts, right. Well, on behalf of the stockholders, thanks for the dividend, and thank you a lot for the special dividend. I don't know what's going to happen next-
You're welcome
I agree with that.
Yay, special dividend.
Yay, right. On the three things that you mentioned in Cotai, I have three questions to ask. First of all, are they ready to go, or is it going to take a couple of years before they're done? Or just how long is it going to take?
You want me to answer?
Sure.
Four Seasons is already built.
Oh, okay.
It has been built for several years. It's standing there waiting for the government to gazette it, meaning it's an official passing notice to the public that the underlying information has been approved by the government. We've been waiting for this for quite a while, and we're very happy that the current Chief Executive has signed the documents and gazetted them. We have a few technical things to overcome, but that's normal, like what's the name of the bank that will be the holder of the securities. Technical issues that I spoke with our attorney last night should take, he said, no more than a month or two, and we're in negotiation with an outside sales organization to sell the apartments under the co-op technique. That's ready to go. It's already built. I was there last Thursday and Friday, and I walked through the model apartments. They were gorgeous.
Beautiful. The second one is the St. Regis Apartments. It's the fourth building in a four-building presentation of Cotai Central. The building is already built up to the top of what we call the podium. That which is in the low rise as opposed to that which is in the column, the high rise.
Okay.
That's partially completed. We have the plans. We have a permit. If we don't change anything, we're prepared to go forward. If the government doesn't require any updating of the building codes, I think we could just hire a contractor, a GC, and go forward.
Okay.
The third one is the possibility of doing another apartment project with The Parisian. We have to take a piece of Lot 2 and annex it to Lot 3. We'll need the government approval for that, but we already have the approval to do apart hotels, which is the title under which we're developing the apartments for sale. The sale of the apartments is a very significant step forward in the completion and the validation of my vision for a business model of building core and non-core assets. Selling the non-core assets, such as the apartments and the retail properties that we have, the malls, pays for all the core assets, the hotels, the convention space, the casino, et cetera. Validates my fundamental business model that we've been working on for years.
The last thing, it's the fourth one, we have submitted plans, and we're going through the routine of submitting plans, for a piece of land that we already own. It's part of Sands Cotai Central, and it was called the Tropical Gardens Shopping Center because it was going to be a park. Since we're no longer going to develop Lots 7 and 8, the government has given us permission to develop a shopping mall, which is a non-gaming development, on the Tropical Gardens Shopping Center land. We have right now an estimated 880,000 or 900,000 sq ft net leasable space in the Tropical Gardens Shopping Center Mall. We could start that before the end of this year.
My second question was, do we have any property in Japan that we're going to build a casino, or they haven't given any licenses yet, or what's the story there?
One from each column.
Oh.
We don't have any land that we own. However, we have been dealing for a number of years for a piece of land in conjunction with either one of two developers on a place in Tokyo Harbor. Everything has been built around it, so it doesn't really look like it's in the harbor anymore, except that it's abutting or next to what they call, I think, the Rainbow Bridge to cut out a long ride and a lot of curves and turns from downtown Tokyo to the Narita Airport. Now, the Narita Airport, it was the only international airport, so everybody went that way. They built the bridge, and now they've converted part of the Haneda Airport, which is only minutes from where we have this site. We don't own it yet. We haven't selected whether we'll go with one or two other developers.
We have been lobbying Japan for four to five years, and we have people on the ground there. We are generally considered by the media and by the government as the most likely candidate because of our business model of integrated resort and our business model of building convention-based integrated resorts. We're very optimistic that we will either get Tokyo or Osaka. Tokyo would be the best for us. We're hoping that we could build both, but I doubt if they'll give us both.
Okay.
If they're only going to put out two.
I'll let somebody else talk now.
Okay. Thank you very much. Gentleman there.
Oh. Sorry. This is not meant as a criticism, but did your experience with parcel seven-
Your name, please?
Oh, Eric Strobel. I'm an individual investor.
No, we're used to getting a lot of criticism. I'm married. It goes with the territory.
Did your experience with parcel seven and eight in Macao, which I believe was negative, give you any insight into the probability that you will be granted extensions to complete Sands Cotai Central on parcel five and six and complete and open The Parisian Macao on parcel three? The second part, are there generally warning signs that these extensions are in jeopardy with enough time to correct any problems?
I didn't understand the last part of that.
Are there any warning signs that the extensions are in jeopardy so that you have time to correct it before it's denied?
What extensions?
You're talking about concession in 2022?
The extension to get to approve the parcels.
I understand you're asking for an extension to complete The Parisian Macao.
The land extension, right?
We've already done that.
We have the extension. How about the Cotai Central? I thought that you were asking for an extension there.
That's what the annual report says.
Won't be a problem. I met with the Chief Executive last Thursday, and the Chief Executive gave me permission. He said, "You can now go forward with the fourth building on Cotai Central." I don't think there's any problem.
What happened with parcel seven and eight? Did you lose money on that or something like that? I read that in the annual report.
Well, we had to take a reserve for, what's the word, impairment, because we spent some money on moving around the land, the soil, and we spent some money. We're hoping to recover that because we're getting something that we weren't entitled to begin with. If we can get the government to say that that's compensation for us to displace or to replace our investment in lot seven and eight, it's easily worth that amount of money that we have in the lot seven and eight, which is about $120 some odd million.
Thank you.
We don't have any problem. I think that finally getting the Four Seasons okay signals a Let me speculate and call it a re-examination on the positive side of our relationship with the Macau government.
Thank you.
Gentleman, name?
Thank you. Just a quick question. What do you think of New York Governor Cuomo's idea of after approval in November to allow three upstate licenses, let them develop for five years before opening up a license in New York City? Would you be interested in one of them?
I'd love to make the call.
Go ahead. I'll let somebody else-
I don't think there's any real understanding of the casino business.
I agree.
Frankly, I think that it's 20 years past the time where the Catskills would've been a place to put an integrated resort, and whether it can recover its old days, I think we'd have to bring Grossinger's back, which would be fun for a lot of people in this room, I think.
the Nevele.
I think.
It was in the paper yesterday about the Nevele.
Yesterday. Yeah, the Nevele. We have, what's that Dirty Dancing thing going on and whatever. I think a lot of what happens in terms of casino locations and what happens with governments is they make political decisions and not necessarily what's best for the state. I'm not sure that they can drive enough business into those casinos to make them really profitable. We would not be interested.
No, I agree with you. I just wanted to make sure you're in the same alignment. He's having enough trouble with the Indian Gaming.
Most of us normal citizens agree. It's the politicians that make the decisions. That's the problem.
My second quick question was, a couple of years ago, somebody smarter than me at the meeting made a suggestion to change the corporate name to really involve the full global footprint, that you have Sands International Gaming and Resorts. Is that person still here? No. Well, somebody then. I was just wondering if that's still on the table.
Not really, because I think there is some value to an imprimatur called Las Vegas Sands because Las Vegas is perceived as the worldwide center of gaming. When we say we're in Vegas, our name is Las Vegas, it's better than saying the same as a million other companies that say, "I'm an international company." It's better to say who we are, where we're from, that we're experts in both gaming and non-gaming, particularly the convention market. We haven't thought it wasn't compelling enough in the past, and it's not compelling enough now. I ask Rob if he wants to say anything about your first question.
New York gaming?
Yeah.
Yeah, I think obviously New York's a great market for somebody, the density of population is magnificent here. If it, in fact, came to be there's licensing, we certainly would be interested in this market. I think Mike's comments are correct. Upstate may be less desirable. Obviously, the density of population in Queens, Manhattan, Brooklyn makes a lot more sense for us. We do an hour and a half away, we do have a casino in Bethlehem, Pennsylvania.
There's also the issue of, do we want to pay what Genting is paying at Aqueduct to run those slots? 78% off the top. That means of every dollar they take in, they only have $0.22 to pay their expenses to recover their $3 50 million to $400 million key money to get into the deal, and their potential profit. Question is, can we make the 20% cash on cash return that we've set, and we've told you as our shareholders That's the minimum that we have to make in order to embark on any new property and make billion or multi-billion dollar investments. I don't know if we can make that kind of money. We certainly have to see what kind of tax rate there would be and whether or not what the competition is. Are we interested in expanding? Absolutely.
Are we interested in expanding at a 78% off the top? No. It's going to be very difficult for Governor Cuomo to say to somebody, well, they pay 55% in Pennsylvania to run slot parlors. They pay us 60% in Yonkers and wherever else. These guys between the state tax, the sharing with the New York Racing Association, and whoever knows what else, maybe sharing with Queens. They pay 78%. Why should I go down to a 25%-35%, which is the maximum somebody could afford to pay to set up what we want, what they want, meaning what Governor Cuomo wants. Like we want convention facilities, we want shopping, we want all the other stuff that costs billions of dollars. Is it going to be worth it for somebody else?
Why should we take less from those guys than we get from other guys? The bottom line is, there's a lot to be determined before we say that we are definitely a candidate to move into the next available slot in New York. We don't want to go upstate New York. There's a young fellow over there.
Hi.
I'll put my very yellow cigarettes here.
Nicholas Daka. I'm an individual shareholder.
Am I.
My question is somewhat related to his because I've been to both the Aqueduct and Empire, and I've been to the property in Bethlehem. How has the property in Bethlehem responded to increased competition from both in the New York area and also with Parx has opened up semi-recently, I think. SugarHouse Casino, I think in Philadelphia? I don't know.
I'll just say one sentence and let Rob finish. We're doing very well, and our earnings continue to improve.
That's well said. We are doing very well in Bethlehem. You should be aware that here in New York, especially Resorts World, it's non-human gaming. It's ETG slots, that's a huge advantage. Our customer base comes from New York primarily in terms of the Asian market, Brooklyn, Queens, and Chinatown. We're delighted with our return on invested capital. We're delighted with our customer mix and it's been very frothy there. It's a shame the tax rate that Sheldon's comments are successfully high relative to other like Nevada. We're delighted with our investment there, and it keeps ramping up and all positive.
Yes, sir.
Harold Wollman, I'm an individual investor.
Sir.
You can probably hear me without this anyway. I'm an individual investor, I'd like you to just say a few words about the trends of business in Las Vegas at The Venetian.
Well, Las Vegas, as you know, is a more challenging market these days. Since the crisis of 2007, 2008, especially the gaming side has been affected because Americans are more levered up, more leverage in lives, less money to spend on leisure activities, that's been very difficult on the gaming side. We are fortunate being the two best businesses there, that is Sheldon's initial business years. When I met him years ago, is the MICE business continues to trend up, that segment's very important on the hotel side, thank God we have it because the non-MICE business is difficult. On the gaming side, we're also in the high-end baccarat business for Asian people to come to visit to the U.S., we always kid and say Las Vegas is sort of mecca for Asian gamblers. They want to come visit.
I was walking down Fifth Avenue the other day, I realized that a lot of luxury brands here trade on the Asian clientele as well, it's great they're buying. Well, they're buying in Las Vegas, baccarat business is ramped up. We, along with the Wynn organization, number one baccarat revenues in the market. We're very happy it's there. Having said that, the days of 2007, 2008, where rates were much higher, more Americans gambled, there's less competition throughout the country are gone. Rates are challenging in the market, I don't think you'll see Las Vegas return to the heavy, those exciting days of 2006, 2007 for quite a while for those reasons. Yep.
This gentleman here.
I'm Neil Yohe. I'm a shareholder of Las Vegas Sands. I'm also a guest of the Las Vegas properties. I've been here at Convention for 15, 20 years, so I know everything about it. What areas of improvement would management like to focus on? I know you do everything right, but if there's something you really wanted to add value to.
Are you being facetious?
Is that okay, Sheldon, do you agree with him?
I mean that from my heart.
Thank you, very kind.
People that know me.
I'd like to answer that before Sheldon.
says what he wants to prove because we hear it all the time. One thing they can be absolutely sure of is that we're never satisfied with where we are. I think it's a common goal here and a common wisdom here that what we look at is that because the company is successful and significantly successful financially today, it doesn't mean you'll be significantly successful tomorrow. Every day, we work on areas of improvement, areas of our margins, our marketing, our development, our capital investments. I could not name you one specific area that needs to be challenged more than another, but this business is challenging in every area, Neil. I will say this, one of the areas that we're going to put some special emphasis now is innovation in our IT department. We have been a responsive IT department, but not a creative one for years.
We've hired new people there beginning June 15th, we expect to see some very significant innovative activities in that area. Besides that, if you were to sit in Las Vegas week after week or day after day or go around the company, we're always looking for ways to do things better, moving our games, challenging our casino people, our marketing people at all times. That's the nature of the business we're in.
Well, I also wanted to say, we're probably $6 away from an all-time market cap of $52.875 billion, but who's counting? Thank you for that.
That's at $63, right? Didn't the news send me a note about that?
$63.88 is the price.
Wow
to make history.
Okay.
Thank you for that hard work.
Thanks for your support all these years.
Well, I get your emails all the time. We've never met, and I'm very happy to know who you are so I could see-
Enjoying it
I could tie in a face with the email. Thank you.
Thank you so much. My name is Howard Levine. I'm an individual investor. Last year at the meeting, you or the corporation seemed to be very interested in locating possibly new gaming in Madrid. I read in the newspaper several months ago that you were there. You met with the officials. From what I read, they were willing to give you a large tax break. I do know right now Europe is quite challenging economically, but I also know you're very forward-thinking in years to come. That's the first portion of my question. The second is, again, looking to the future, I wonder what you think of or positioning yourself of online wagering, realizing right now it's a very difficult subject legally, but as I see state after state looking to raise revenue, and I think in my opinion, eventually this will come to fruition.
I wonder how Las Vegas Sands Corporation views this in the future.
Did I hear you say correctly that we said something about Europe?
Yes.
Yes, you were asking about Madrid.
About Madrid. Okay.
Madrid is in Europe, sir.
There are two issues. This is a very, very significant investment over a very long period, over a significant nine or 10 years. It will be the culmination of development of any similar genre in the world. This could be over the long term with equity financing, we start off with four 3,000-room properties, enough critical mass to attract a Las Vegas-type market. We would proceed with another four 3,000-room properties, and then another, a third category. That's 36,000 rooms, 12 properties, convention-based. We are trying to make sure that whatever happens, that nothing can be changed, that we are indemnified by the local, regional, and national government in Spain. We're talking about the state of Madrid. I'm sorry, the city of Madrid, and like here in New York, like we have New York, New York, they have Madrid.
There's the city of Madrid, the community of Madrid, which we would call the state of Madrid. Then there's the federal government of Spain. We are doing everything we can. We brought in the best lawyers that can handle all the outstanding issues. There are two fundamental issues, or three, that we've received a lot of assurances. We've got the land. It'll be at quite a reasonable price. I believe this will be our biggest and best project. However, we've got to get the other issues cleared, and those are, number one, smoking. There was just an article I read last night that occurred yesterday's time in Spain from one of the leading newspapers about the smoking and quoted Prime Minister Rajoy, with whom I met last Monday, like 10 days ago.
In Madrid about the smoking, he said that they have not given up the idea of creating an exception. They have 27% unemployment in Spain, our project fully developed, not counting other of our competitors that want to come in with us. Our competitors want to come in and join this development. Not everybody, but enough to make it sort of an industry-wide effort. There are two things. Number one, we need some more satisfaction on internet gaming. Internet gaming, we've done studies in Europe because they've allowed internet gaming in Europe. They're starting to allow it here in the United States. We are very, very, very much against it. There's no benefit to our society to have internet gaming. We don't create jobs. The tax revenue from internet gaming is minuscule. It's hardly worth the paper it's written on, there's no real benefit.
We need that bill repealed because we look at the trend of internet gaming growth, and it goes like that. If I look at the reaction to the land-based casinos, it's either flat or going down. We can't live with that. The last thing we need to do is to get a pre-approval from the European Union. On that issue, there has been some encouraging news lately because some top finance ministers in a couple of the top countries in the EU have said that the EU has to be more flexible in allowing the southern Mediterranean countries like Portugal, Spain, Italy, and Greece to be more flexible in providing grants and incentives because they put limits on it. The EU puts limits on it because of the dire situation those countries are in. If we can get those resolved, we're there.
If we can't get them resolved, we're not going there. Could somebody bring this gentleman a microphone, please? Over to your left.
Alexander Navarre. I represent my family as a shareholder. For the last five years, I've been talking to Mr. Daniel Briggs and Ian, today I have the pleasure of speaking to your vice president in charge of finance. It's not a question, but I'd like to make an observation and congratulate Mr. Adelson for what you've done for all of us, board of directors, and all the related people with this company. Being a New Yorker for 50 years, I left my family to go to Vegas 19 years ago. I'm back here to say thank you. You're an amazing man. I'd go to war with you. What you've done in Singapore, it's amazing. What you did November 2008 with Goldman Sachs to save us, putting up your own money, it's amazing as a shareholder. I wrote it down 99% with you. I know the numbers.
$1.38, March 9th of 2009. September 16th, the shorts tried to kill us when we got to $20.73, 138 million shares traded that day. We didn't waver in September of 2009. November 5th, at $55 a share, 91 million shares traded. We hit $55. We closed at $51.98. I know those numbers better than my own Social Security number. Your leadership is unbelievable. All the comments and criticisms of lawyers, message boards, I love to tell people who my handle is, that I fought every one of them. Daniel Briggs and Ian knows, now they know the face. You got a lot of support, and you got a great support team. I like your attorney, the way he eyeballs people. I'm one of his contemporaries. This president over there, you guys are doing a great job.
Thank you.
I really mean that. Singapore, I will never question how you think, you execute. You pulled off an amazing feat May 2010. I love how people have to dig through the 8-Ks, the 10s, to see the revenue, the bottom line, EBITDA. The people in Macau, they make headlines. "Oh, we're up 13% from the previous year. From the previous year, up 39% for the year," blah, blah. You got to dig to know what's going on in Singapore, I got to tell everybody now. Q1 last year, when Singapore came in with profits about $406 million, $480 something million, three in Macau, $86 million in Vegas with three casinos and one expo
We got 91% of our revenue coming from Asia. I'll take a Las Vegas address, like I have a New York address. I'm in 11772 Patchogue Village now. I'm in 89005 Boulder City 19 years with you. How about West Palm, 33417? You made it possible. My pleasure to come here, sir. Thank you.
Thank you so much. Very nice of you to say thank you. It's very warm. It's very warm to hear you say that.
Any further questions?
If only my wife would agree with all the good things you say. I have good advice.
I'm going to follow that. 49 years right here. Jesus, Papa. Blessed be angels, right here.
I just have one other question.
Sure.
That Land and Buildings proposal by Jonathan Litt, which was, I think, six months ago, about the restructure.
Yeah.
Is that something down the road, or is this something I'll just observe or whatever? You can't comment at this time?
We've just come from investor conferences at Goldman Sachs for the last couple of days, Robert Goldstein, myself, and members of the team here. The question's come up about selling malls and doing that. It's always been Sheldon's major theory of business to take non-core assets and sell those non-core assets to repay debt or to do something else with it. Lots of conversations about REITs and these kinds of things. It's a few years away before decisions are going to be made in that kind of situation for the company. We're still maturing these assets in Asia. At that particular time, the strategy of how we're going to dispose and what we're going to dispose will take place. I think Jonathan Litt's theory, which caused a bump in the stock, of course, at that time, and went away.
Sometimes you see these things written around and everybody says, "Oh, boy, they know something." There are a variety of ways to maximize these assets. We have wonderful assets with Sheldon's theory of building these non-core assets. Compared to any other company in our business, our retail assets in Asia are a major asset for us. At the time, when the time comes, decisions will be made as what the best possible way to dispose them are, Neil, but it's really premature at this time.
Okay. Next year, hopefully the stock may be $85, $90. As you know, every year it goes up.
You have a very happy table here, I could tell you. More cookies.
Thank you very much.
I'd like to say that if it works out the way that the theory says it'll work out, it's certainly a very attractive suggestion. As I said earlier, my interests are aligned with yours. If we could get the stock up to $100 by splitting into a real estate REIT and an OpCo and a real estate co, whatever, it certainly should get my attention, and I will look at it. I'd love it.
A lot of guys are going to be knocking on the door tomorrow morning, I can tell you that.
I'm not sure because we need control of our real estate assets. If somebody else owned it, owned our real estate assets, our hotels, our exhibition and convention center, then we'd be hampered somewhat in our ability to expand and to accommodate our customers' needs, et cetera. Bottom line is, I'll look at it. I'll take a serious look at it if it's possible.
Take one more question from Mr. Levine over there.
Just a dose of reality. I appreciate what the gentleman just said, but I also bought the stock at 72, and it went down to three. The dose of reality is things go up and things go down. Fortunately, I bought it at six. Right now I'm quite happy with it. Let's not get carried away and think that this thing is going to 3,000 tomorrow afternoon at 4:00 P.M., because it isn't. Congratulations on your recovery and the comment that you personally took your children's trust fund and put the money in, convinced me to convince my wife, who is very tight with a buck, to put money into Las Vegas Sands.
Thank you very much.
I called a meeting of my wife and our grown children, I told them of the situation, and I said, "Look, it's like the ad you see for Patek Philippe watches." The ad very cleverly says, "You never get to own a Patek Philippe watch. You only get to hold it for the next generation." I called my kids and I said, "This money we have is not mine. I'm holding it for you guys. Do you want to put the money in?" Every one of them, we have three grown children, we have two teenagers, they couldn't participate in the conversation. Every one of them said, "You take whatever you want." I knew that there was no way that I was going to let the company be in difficulty. I knew there was no way that we were not going to fail.
The need for money at the time was not an actual need of money. The need at the time could have been solved with money, but was to create a potential breach of a covenant, one of the conditions of borrowing money, because it was a ratio of debt to EBITDA. We were at an eight, that is eight times debt to EBITDA, and we had to be at seven and a half. I didn't want to put the money up first, because then the rest of the time, if the company ever needed money, everybody was going to say, "Oh, we'll go to Adelson, he'll put the money up." In any event, I put up first almost a half a billion, and then a few months later, I put up the other half a billion.
I want to thank my children for giving me the confidence, because they all said I mean, they're grown. They all said that, "You make the decision. It's your money. You made it. Whatever you want to do with it, you do with it." My kids gave me a vote of confidence, my wife did, and it was a happy day in my life to be able to put the money in, and we were prepared to put in more. I'm very happy that other people put up the money and made a fortune of money. People say, "I want to make a small fortune." Other people say, "Well, start off with a big one." This time, the way to make a big fortune was to start off with an investment in LVS at the end of 2008.
Jimmy, you can adjourn the meeting if you want.
No.
It's over.
Okay. That's it. No more questions? Good. Okay.
Thank you all for coming.
Thank you all for coming.