Good afternoon. My name is Dustin, and I will be your conference operator today. At this time, I would like to welcome everyone to The Las Vegas Sands Corp. fourth quarter 2012 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I'll now hand the call over to our host, Mr. Daniel Briggs, Vice President of Investor Relations. Sir, you may begin.
Thank you. Before I turn the call over to Mr. Adelson, let me remind you that today's conference call will contain forward-looking statements that we are making under the safe harbor provisions of federal securities laws. The company's actual results could differ materially from the anticipated results in those forward-looking statements. Please see today's press release under the caption Forward-Looking Statements for a discussion of risks that may affect our results. In addition, we may discuss adjusted net income, adjusted EBITDA, adjusted property EBITDA, and hold adjusted property EBITDA, which are non-GAAP measures. A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures are being included in the release. Please note that this presentation is being recorded. We also want to inform you that we have posted supplementary earnings slides on our investor relations website for your use.
With that, let me please introduce our Chairman, Mr. Sheldon G. Adelson.
Thanks, Dan. Good afternoon, everyone, and thank you for joining us today. Joining me on the call today are Mike, Rob, Chris, and Shin, and we look forward to addressing your questions in just a few minutes. Well, we had a record quarter. On a hold-adjusted basis, we generated $1.1 billion in EBITDA and $0.63 of earnings per share. First, I would like to provide a progress report on the execution of our four principal strategic objectives. One, deliver organic growth from our existing property portfolio. Two, deliver additional growth through new investments in our current markets. Three, identify new integrated resort development opportunities in geographic areas outside of our current markets of Macau, Singapore, Las Vegas, and Pennsylvania. Four, increase the return of capital to shareholders. I like that one. First, organic growth.
I will highlight our record performance in Macau, where our industry-leading scale and infrastructure investments enable us to deliver robust market-leading growth in the world's largest and most profitable gaming market. For the quarter, our market share of gross gaming revenue in Macau was 21.1%, up from 15.5% last year. That's a 36% growth in market share. Rolling volume was up 37.1% this quarter to a record $39 billion. That represents VIP market share of approximately 18% of rolling volume for the quarter, compared to just 12.8% one year ago. That's a 40% increase in market share of rolling volume. Equally impressive is our strong growth and momentum in the mass market in Macau. Due to its high-margin structure, this segment is far more important to our future cash flow and bottom-line results.
That doesn't mean that we're going to ignore the VIP or any other segment, we just want to point out that this has very robust potential. Our mass table win in Macau for the quarter was up a whopping 52.6% to more than $769 million. Another company record. Our unrivaled strength in this segment allows us to lead the pack in EBITDA generation in the Macau market today, as we always have. Looking ahead, our investments in our portfolio of integrated resorts on the Cotai Strip in Macau, featuring dining, retail, entertainment, and the hotel room capacity so vital to serving the mass gaming segment, uniquely position us to deliver strong cash flow growth in Macau. Our mass table game productivity, again, improved meaningfully this quarter, with win per mass table per day across our portfolio of properties expanding by over 33% to reach a record $9,716 per day.
Our mass win per table per day was a record at every property in our portfolio, with the Four Seasons increasing 68% and The Venetian Macao increasing 47.8%. Wow, I'm full of figures today. Sands Cotai Central continues its steady run, with the mass table and slot businesses each reflecting meaningful growth this quarter. Total mass win per day, which includes revenue from mass table games, electronic table games, and slot machines, increased by 65.4% compared to the quarter and to the previous quarter. We welcomed over 13 million visitors to our Cotai Strip properties in the fourth quarter, including over This is wild. Over 5 million in the month of December alone. When you annualize that, you're coming to twice, that every visitor to Macau came in at least twice.
Recently opened a fully enclosed climate-controlled pedestrian walkway with escalators and moving sidewalks to promote greater interconnection of and accessibility between our Cotai Strip properties. The pedestrian walkway links Sands Cotai Central and its almost 6,000 hotel rooms on the east side of the Cotai Strip, with The Venetian Macao and Four Seasons on the west side, promoting easier access between all our Cotai Strip properties. As additional amenities mature, including the 2,100 new Sheraton hotel rooms and the additional gaming capacity that came online earlier this week, and as the massive infrastructure projects underway throughout China make it easier for more people residing outside Guangdong Province to efficiently and conveniently reach Macao. We believe our interconnected Cotai Strip properties will comprise an ideal platform for growth in the world's largest and most profitable gaming market.
Stepping back to the opening of the pedestrian crossway between the east side of the Strip and the west side of the Strip. We have, as expected, increased the retail sales the first week or 2, first couple of weeks, I think almost the whole first month, by about 45% on the second floor of the Four Seasons. It's also increased the 1st level, and we significantly increased the retail sales on Sands Cotai Central on the first, second, and third floors, which provides additional value to us when we get to the point of monetization of our retail assets. Turning to Marina Bay Sands in Singapore. The $16.5 billion USD roll was the second-highest quarterly total on record and missed setting a property record by only a slim margin.
If we held 2.85% against that rolling volume, we would have produced EBITDA of $406 million this quarter at Marina Bay Sands. Let's turn to strategic objective number 2, development growth in our core markets. In Macao, we will also develop The Parisian, which will be our fourth integrated resort property on the Cotai Strip in Macao. The Parisian will add another interconnected integrated resort property to our portfolio on the Cotai Strip. We've received the requisite government approvals and have now started construction of The Parisian, and site preparation work is well underway. We're targeting the open of The Parisian for late 2015. Let's turn to strategic objective number 3, development of integrated resorts in new markets and geographic areas. We're committed to identifying and executing on new development opportunities in Asia. As we've had teams on the ground for some time in Japan, Korea, and Vietnam.
We will continue to work on these promising properties. We've also been investigating opportunities elsewhere around the globe, including in Europe, North America, and South America. In December, the government of the region of Madrid passed legislation that outlines a regulatory framework to enable integrated resort development in the Madrid region. There are a variety of steps left in the development process, which continues to move along. As we've said in the past, we will only pursue projects with EBITDA returns in excess of 20% on investment. As the company's largest shareholder, I naturally have a vested interest in pursuing only the highest-value projects that will maximize shareholder returns. Your interest and my interest are aligned. Turning to strategic objective number 4, return of capital to shareholders.
The board and I were pleased to be able to return nearly $3.1 billion of cash to our shareholders through dividends in 2012. It is gratifying that we have now built our business and cash flows and strengthened our balance sheet to a degree that we were able to return such substantial sums while retaining sufficient liquidity to fund our promising future growth opportunities. We have every intention of increasing the recurring dividend in the years ahead. Hopefully, the months ahead. Our business and cash flows steadily grow. Before moving to your questions, I want to point out an asset of the company that we will continue to highlight, our retail mall business in Asia. It generated over $128 million in revenue. That's a 16.9% increase over the results from one year ago. Net operating income reached a record $110 million in the period.
We believe our Asian retail mall assets are among the most valuable retail assets of their type in the world, and at cap rates for similar assets in Asia, could easily approach $9 billion-$10 billion in value. The eventual sale of monetization of assets, which is an important component of our fundamental business strategy, will fill our coffers and allow us to greatly increase the return of capital to shareholders in the future. Let me emphasize my confidence about the future of our company. With our outstanding strategic positioning and the disciplined, experienced leadership team we have in place to execute our strategy, I couldn't be more optimistic about the future. With that, let me turn the call over to Mike to begin the Q&A session.
Thank you, Sheldon. Operator, may we please have the first question?
Ladies and gentlemen, if you would like to ask a question, please press star then one on your telephone keypad. Our first question comes from Shaun Kelley with Bank of America.
Hi, good afternoon, everyone. Solid results. I just wanted to see if I could start by asking about Singapore. Looks like the volumes there were very strong. Could you give us any color about just the trends that you guys saw across the quarter, how Western New Year looked, and just what you guys saw at the rebound, particularly on the VIP side that drove that big number?
Shaun, it's Rob Goldstein. We obviously had a good quarter on the volume side as far as the rolling segment. I would caution you that it's a very concentrated market. We're not sitting next to mainland China. Again, it remains concentrated. We're obviously happy with results in terms of the volume. More important from my perspective is the mass. The non-rolling and the slot ETG number was, I think, a nice bounce from the bottom. Our high was 4.6 a day. We're north of 4.4 a day, and we see recovery there. To me, that's more important to us for long-term opportunity. That represents $1.1 billion of departmental income net annualized. To me, the rolling volumes will continue to vacillate. We could see some real growth or we could see it diminish. It depends on the players that visit that quarter.
To me, the critical part for Singapore was the bounce back up to a number above 4.4 a day, and I hope we can trend back up. As we've mentioned previously, we have a sales team and a strategy in place to address the premium mass, because we drive that premium mass from the tourist perspective and not be dependent on local Singaporeans, I think will bode very well in the future in Singapore. Clearly, a $400 million normalized quarter is a damn good quarter. We're very happy with the numbers.
Just one more nit on that. The $400 million does not adjust for the $24 million. We would probably add that back on a recurring basis as well, correct?
That's correct.
That's correct.
Great. Switching over to Macau. Obviously, some really impressive property-level margin numbers. I think that the question that we're getting from folks is just as we look forward here, you guys look like you're really starting to take some share. Just any sense you can give to us about how you're seeing customer behavior, maybe starting to look at things more like bookings as we think about Chinese New Year and looking a little bit ahead here, given just how strong the rebound seems to have been in December and into January.
Even our new property we opened two days ago is 100% full. The new Sheraton Tower of 2,100 rooms, approximately, is completely booked for Chinese New Year. All the properties are.
Shaun, we should take share. We've got the best products there to take share because we have the most rooms, the most gaming space. I mean, look, we're in a very fortunate position, having enormous exposure in Macau, and we should take share. With all our retail, our footprint, both in Cotai and the Peninsula, we're in a very privileged position. Yes, we're very happy with the quarter, but we think the best is ahead of us. Look, it's an extraordinary market from any perspective, the best in the world. We've got the most exposure there as far as game positions, retail space, sleeping rooms. To Sheldon's point, it just keeps getting better. As you know, the greatest predictor of a mass gamer's place to gamble is where he sleeps.
In our case, with all these new rooms, we are in a position we should be taking share and doing very well in the future. We're very fortunate, obviously, to have not just the mass, but the premium mass going our way as well. Feel very bullish about what we did last quarter in Macau.
It applies to everybody except the homeless.
Great. I guess the last one for me would be just a big picture strategic question. You did bring up, in your prepared comments, the retail space. Any timeline or any sense of timing you guys could give to us about how you're thinking about that? I think generically, we've heard in the past that you did want to get Cotai Central probably ramped up a bit further on the retail side before you looked to do maybe something more strategic. Any color or glimpse you guys could give to us on that?
Shaun, we've made no decision in terms of the timeline for retail disposal. I think as ramp-ups take place both in Singapore and Macau, they're always under consideration. We are getting our work done organizationally for when the time comes so that we'll be prepared for whatever disposal matter will take place. There's no real indication now. We have still a long way to go in terms of building that business, and we're seeing very significant increases in retail still in Macau. Of course, the other thing is that we are planning to do an additional shopping center in Macau, subject to government approval. Those plans are being submitted as we speak. There's a long way to go before we'd actually put it on the marketplace.
That piece of land that we're talking about putting up a standalone retail mall, a big one with about 800,000 net rentable sq ft, and potentially another 300,000-plus in The Parisian net. The only question facing my mind right now is whether or not we see a change in the cap rates coming up in front of us because that would motivate us
We should wait till we put up the new mall and The Parisian before we sell all the retail on Macau. We could also make a deal that we sell the current retail, the Four Seasons, the Grand Canal Shoppes, and the Shoppes in Cotai Central. Then with an understanding that somebody else will buy, somebody will buy with a predetermined cap rate, and certainly with that number. The new mall, by the way, we already own the land for the mall. Already own it. We don't have to worry about getting a new piece of land.
That's helpful color . Great quarter, guys. Thanks. I appreciate it.
Thank you, sir.
Our next question comes from the line of Joe Greff with JPMorgan.
Hey, guys. Good afternoon. I have a couple of Singapore questions put a little bit differently. Rob, you mentioned Singapore rolling chip is still a concentrated area. Is it getting less concentrated by looking at either geographic sources or number of players? And the big volume increase relative to what we were expecting on the rolling chip, is that more players or is that more wagering per player? And then I have a couple of follow-ups on mass and credit.
Joe, it remains unchanged. Again, you're down in a different part of the world. We're very dependent on Mainland Chinese, Indonesians, and Malaysians, as well as PRs from Singapore. I would say that it's a very concentrated market, and unfortunately, I don't see that growing as quickly on the spread of customers. We want to see it grow. That's our intent. That's our design of our program. Frankly, I don't see a whole lot of change quarter to quarter to tell you otherwise. I do see it changing on the premium mass segment. I think we're seeing significant movement. I think our team there is starting to unearth some opportunities. We want to move to a more tourist-based segment in the premium mass. Again, that's where I think there's real growth potential to add more customers, add a more desirable mix of people.
Okay. That partially answered my second question on Singapore.
As you know, Joe, but I'll be redundant here, is that segment, from my perspective, because of the margins and all that, the opportunities there are much more material to us than the rolling segment.
Did you guys see a tangible benefit in the fourth quarter from some of the new hires that are trying to target that higher frequency premium mass gamer?
I wouldn't say we saw a tangible benefit. I think we're starting to see it in the first quarter. I think we'll see it progressively throughout this year. Frankly, we're doing two things. We're revisiting our database in the premium mass, but also opening offices, and I think you'll see that progressively in 2013. I do think there's real opportunity to grow this segment materially as we get into 2013 and into 2014. I think this is a very good move for us. It's very fortunate we're doing this, and I think that's where our big upside in the short term is.
Got it. In the slide deck on your website, you have the slide regarding Singapore credit collections.
Right.
One thing there maybe you could help answer is the aging of those credit collections. Are you seeing improvements there, i.e., are you seeing the older credit outstanding start to come down, or is it the relatively newer issued credit that's in that collections number more recently?
It's a mixed bag. I wouldn't characterize it either way. There are some aging issues in Singapore because we found that market, like Las Vegas, is that customers will go somewhere else if they want to wait longer to pay. It's a longer cycle we ever anticipated. On the other hand, we collected $377 million in the fourth quarter, which is up significantly from the previous two quarters. I feel our balance is pretty good right now with our receivable mix versus what we've taken the balance against in terms of well, it's been a long year for us, let's be honest. Our reserves have grown significantly, but now we're at a point where we feel much more comfortable. I wouldn't characterize, I'll be clear with this.
Singapore is the most challenging credit market from a perspective of, A, highly concentrated, B, very little legal help in the region to collect, and C, there is no junket buffer. As I said in the past, I remain optimistic but cautious. You're giving away a lot of credit to a smaller number of people, and you don't have the legal remedies you have here in the U.S. It still remains a challenge. I don't want to represent that it's easy. It's not. We're seeing nice collections. We keep ramping them up. I think we're in a much more balanced place vis-à-vis collections and what we've done in the last 12 months. I think it was the right approach.
Yeah. The one thing I'd add to that is we've issued a big number in terms of credit drop, almost $13 billion. We've collected almost $12 billion of that.
Good point
when you think of it in terms of size of issue, as we've talked about in the past, any collection issues we have are really specific to isolated accounts as opposed to systemic problems across the portfolio. Our receivable balance now, if you back out the open programs, the reserve is almost about 30% of the receivable balance. I think we're in pretty good shape. As we talked about before, that number will continue to grow a little bit, but we're getting up there where it'll get to that 35% or so, which we think will be about a stabilized reserve percentage in relation to receivable balance.
Would you say on average that you're seeing collections on average shorter to collect? Are you seeing the average aging come down as well, or has it been pretty consistent?
No, I think the collections have been very consistent. I think the issue with regard to the aging is just those isolated accounts that are problems. Those obviously age out until we get collections on that. The vast majority of it is pretty consistent from a collection standpoint. If you look out, going back over the last, I don't know, call it eight to 10 quarters, when you get out about six months and you look back in terms of our collections, we collect about 95%-97% of the amounts that are outstanding. It's those things that are, in essence, problems that end up aging longer. I don't think it's really the bulk of the accounts. The bulk of the accounts are collected within, in essence, that first six months. The majority of them even shorter than that.
After six months, we're about in 95%-97% collected.
Okay, great. Switching over to Macau, this will be my final question. You referenced in the fourth quarter at The Venetian Macao, there was some renovation disruption from the work that you're doing at Paiza Club. Do you think you were able to capture that business at your other properties, or are you able to quantify the net impact there? In fact, what may have been even a stronger quarter in Macau, absent those 29 fewer active rolling tables?
I think it's hard to quantify, Joe. The one nice thing, though, now, having just been there this month, the one nice thing about it is that you can now access across that bridge, right into Four Seasons, right into FCC. I think you have a lot more access. People are comfortable with The Venetian. They couldn't find a place to play. I think we have a hard time quantifying, but any time you get to the numbers we're doing, The Venetian, it's the most potent product in Macau. It's hitting on all cylinders, all gaming segments, lodging, retail. The scale and theming of the building just translates well in the market. No matter where the Macau market goes, The Venetian will participate. I think it's by far the most important part of our portfolio right now.
I don't think that 29 tables had a major impact either way. I do think The Venetian, as it gets more tables on the floor and these numbers coming out at the mass and the VIP, the balance in The Venetian is staggering to me. It's just the most balanced product in Macau by far, and our results speak to that.
Great. Thanks, guys.
Our next question comes on the line of Steve Kent with Goldman Sachs.
Hi. Good afternoon. A couple questions. First, Ken, should we no longer use for Singapore this range of hold of 2.7 to 3, which is, I think, historically what we've been assuming, because essentially over the past 11 periods, you've been all over that, and I think it's only one in 11 where you've come in there. I understand the issues, but should we just start to widen out the range? Is that how you're starting to think about the hold percentage in Singapore, or will, at some point, it start to narrow down? Second question, $24 million property tax assessment. I'm sorry if I've missed that. What is that for in Singapore? Finally, expansion, in particular, the hotel stock. At some point, you've talked about trying to do something with that.
Let me just talk to the normalization. I'm sure Rob will want to comment on that and the property tax, then I'll turn it over to Rob. I think that 2.7 to 3 range is still an appropriate kind of range for Singapore. When we normalize, we use the midpoint of the range. With regards to the property tax, the issues that we got, basically at the very end of the year, we got an additional assessment from the government of about $24 million. At least a third of that pertains to 2011. The balance pertains to 2012. We're still going through that to see what it pertains to, but certainly the balance of the $13 million that's specific to 2012 doesn't all belong in that fourth quarter, would have to be spread basically ratably over the year.
Obviously, it was impactful to our fourth quarter numbers. Part of it, as I said before, doesn't even pertain to 2012.
Steve, it's Rob. On the range, I wouldn't change a thing. Since we opened the property, I don't know if you know this, but our life to date since the day we opened in 2010 is 2.7%, and it will remain a 2.7%, 3% property. The only difference between Macau and Singapore is the volumes, obviously, in Macau, are deeper. The player base is deeper. When it's all said and done, we're at 2.7, even after experiencing a horrific year this year on a few small customers. The math is the math is the math, and in the end, those people who won some money will come back and lose it back. It isn't that complicated. I wouldn't change a thing.
I would leave your range at 2.7 to 3 because you're in the range after a lot of bad quarters.
Even though the quarters, what you're saying then, it's truly you're saying, is that they all offset each other. From the 2.18 to the 3.34, so 3.58, they all offset, you're saying when you add them all up, it comes out right to 2.7 or so.
Yeah. It's 2.7 in Macau, it's over 3. Frankly, honestly, I think this will be bigger than. I think Singapore is going to be. Here's my bet. If you have a lot of Asian people betting a lot of money for a lot of time, you're going to do just fine. In Las Vegas, at The Venetian Palazzo, we've handled billions of dollars. We're holding 27% lifetime here. It's the greatest market in the world with the greatest gamers, I wouldn't worry one bit about it. The math will prove out just fine. One quarter, we're going to hold 4.5 on these quarters and be back up at 3%. It's just the business we're in.
All right.
I'll take the expansion question, Steve. It's Mike. Yeah, we've been talking about Tower 3, putting a new VIP facility up there for some period of time. I was in Singapore just a few weeks ago. We did receive requests for information from the government, from certain government agencies, about putting more details on the request, which we are now submitting. I don't expect you'll see something like that happen, because there's about a year construction period where it would happen. As far as additional rooms are concerned and additional buildings, we've had some conversations, but nothing is quite moving forward at this point. In terms of projections and what have you, I would not feel comfortable that you would have projections of that for some period of time. We'll give you updates as soon as we get them.
The construction periods would be really a year for the tower and probably considerably more than that for the room addition and the building addition.
Okay, thank you.
Let me just add one other thing. We're investing significant capital in the building now, doing more facility work inside the casino, in the Ruby Room and others, redoing it, expanding it, making it better. There are capital investments going into the building, which will expand our capabilities when inside. Those are different than the room additions that we've been talking about.
We've also applied to the government to build another tower. The available lots that are unused at this time, and they're right abutting our porte cochere, and we're hoping to get approval to, we don't know how long it'll take, to put in some more ballroom space, some more exhibition space, and another 1,400-1,500 rooms, because we're running such high room occupancy. We don't have any sign that it's imminent. We don't have any sign that it's far away. Singapore moves at its own pace. We'll just have to wait until they give us an okay.
Our next question comes on the line of Felicia Hendrix with Barclays.
Hi, good afternoon, everybody. Switching gears back to Macau, your table efficiency improved nicely in the quarter. That's obviously been a goal of yours, so that's been great to see. Just wondering if you could discuss some things that you're doing to continue to drive table efficiency in the market. If you could, perhaps, Rob, this is a question for you. Just discuss your plans to improve/grow your premium mass presence in the market.
Sure. Thanks for the compliment. We feel we're making progress. I think Ed and David have just done a terrific job, our goal over there is to make all our tables work harder. To your point, the only property we have that we feel very balanced with right now, despite our great results, is The Venetian. I mean, the win pers, both on the premium mass, and the junket are just terrific. We feel the balance is really right at The Venetian, that's why that property is just knocking the door down. We have opportunities throughout the portfolio, both downtown and in Cotai, to do a lot better, in my opinion. I think as a segment, we have 1,500 tables with the additional 200 tables we were given by the government this week.
Our goal is to, we're agnostic as far as what segment we're in. The highest-performing tables or segments get the tables. I think the growth is clear. Downtown, we think, although our tenth year of operation, the place has found a real audience, especially in terms of the food program that Jeff and his team have put together downtown. We're embracing the high frequent day trip market at Guangdong. We think that we found a nice niche downtown in the Peninsula, we're going to keep growing our business there. The focus there will be mass, premium mass, for sure. We'll have some junket, we're not going to compete with people downtown. We're going to focus on mass, premium mass. The Plaza is the most, I think, of all of our opportunities, that might be the greatest because clearly our junket performance is very strong.
What David has done there is exceptional. From where it began 2 years ago, where it's at now. What has happened is we're winning $19,000 a day on the mass side. Of course, that's premium mass. If you multiply that times, let's say, 50 or 60 or 70 tables, there could be huge potential growth there. David and his team are looking at that today. We think there's big upside there to do better. Our slot win, by the way, was over $1,000 per unit per day at the Four Seasons. To me, you've got to rethink the balance there. As good as the junkets are, we're looking at that opportunity. Then, of course, SCC, we're starting to really hit it there.
I think as to our lowest performing in the portfolio in terms of the win per from a non-junket, non-rolling performance, our mass tables are the most sluggish in our group. With the new rooms opening, with the market booming, I think you'll see that improve dramatically. Like The Venetian, SCC will be more of a mixed product with lots of variety. The big focus, obviously, is remain return on table, and with so much exposure to the market, we can do better, and we will do better. I think there's a clear indication that our room base, our retail base, our food offerings, and the plethora of things we offer at all these properties puts us in a very unique position to do better. That is our sole focus, Felicia, as far as Macau. We see terrific upside.
We're privileged to be in the market with all that growth. Frankly, we're not tied to any one segment. We're tied to making money and productivity. One thing I will say is one market we're in that almost no one else is in, and that's the mass. Our exposure to pure mass, not premium mass
When you look around and see the SCC or The Venetian, we can get those places to making eight, nine, 10,000 a day on a pure mass play. It's going to be very important to our growth. People right now are all focused on premium mass. We're there, but we're really focusing as well on the mass where we have kind of a monopoly due to pricing and table count.
Great. That's really helpful. Thanks. Sheldon, you had a nice announcement recently, obviously, with the 200 incremental tables. Can you update us at all on where you are in the discussions with the government regarding procuring tables for The Parisian?
Do you want me to?
Yeah, I'll let Mike.
Yeah. Hi, Felicia. We're in constant conversation. Edward Tracy and myself have just met with the government a couple of weeks ago when I was in Asia. I think that regarding the Cotai and all of the new products that are coming on Cotai, you're not going to see any real conclusion on distribution of new tables there for a number of months yet. I think the government has assured us as well as others that they're going to operate appropriately with these hotels. Casinos, which you're going to see developed. There's no firm commitment yet as to who is going to get what. We've been told, I assume the others have been told the same thing, that in their own time, they will make up their mind and treat everybody adequately. That's how we're going today.
As we get to financing on site 3, we're in the ground now, and we're going forward with the project on the anticipation that all will be well, but it'll be some period of time before you see an absolute commitment for us as well as others, I believe.
Thanks.
I think we trust the government they're going to treat everybody fairly. There's been more publicity about our competitors buying their land. They make a big deal about it when they close the land. We've owned the land since 2007. We've owned Lot 3 since 2007. However they treat everybody else, they're going to treat us. We're confident of that. Just like the 200 tables was allocated to us several years ago because we couldn't get the financing without the assurance of tables. They kept their commitment. We're very happy over that. I'm sure that we'll be treated the same, but sort of like in a different category because everybody was talking about getting the land and what they're going to build. We already own the land.
We've been assured by the government we're going to be treated like everybody else. They said they're going to give preference to those companies that build more non-gaming. Of course, that's our specialty. We developed that model.
Okay, great. Then, just my final question, Rob, back to Singapore. You definitely talked about mass win per day and how you're pleased with the level you have in the quarter. I'm also assuming that you'd love to grow that. How should we think about the optimal levels there, or your goals rather?
Yeah. Also, our goal is, if you recall a year ago, is we were trending. We're at $4.6 a quarter. Our goal is at $5, it all came apart. Our goal is get back to keep growing again. I can't define where we want to get to because I don't know how high up it really is. I have this belief that we have been given an opportunity to go after the tourist-based market and not be dependent on the local market. I think there's a lot of people in Jakarta and KL, and honestly in the region in general, that are premium mass customers. I don't know how high, Felicia, you think about that. I just think we can do a lot better than $4.4 a day. I'm pleased we got back to that.
I think the team over there, we've hired some very good people, and we're putting a management sales team in place. I feel there's a lot of potential to grow that segment. I don't want to define, is it $4.8 a day? $5 a day? I don't know. I just believe we're going to get more out of that region we have in the past and more of that segment. That's a 65%-70% margin segment. To drive Marina Bay Sands to a higher level, that's going to be the most important indicator. Most important metric is that win per unit per day, non-rolling table, slot ETG.
Okay. Thanks a lot, guys.
Our next question comes from the line of Robin Farley with UBS.
Great. Thanks. Two questions. One is, with this tremendous growth you have in Asia, I wonder if you have any thoughts about some of your U.S. assets maybe being non-core and just your thoughts on that topic.
Well-
There's nothing new that anybody doesn't know about as far as the U.S. assets are concerned. We just continue to operate them and maximize them as best as we can.
I think that a lot of people are talking about possibility of different emerging markets coming out. We are of the opinion that a lot of the U.S. markets have been oversaturated or about to be oversaturated. We keep our eye open, we don't want to compete with the job that Caesars is doing on the riverboat market and the small casino market out there. We know that we're the experts in integrated resorts, I think anybody we approach, the various governments understand that and what it can do for them and their tourism efforts. There's no reason to. We don't want to sell the keys to the kingdom. Our basic differentiation beside the integrated resort model of a multidisciplinary resort offering is how do we fill the hotel rooms weekday is because of the MICE market, the meetings, incentives, conventions, and exhibitions.
That is very critical to us. We sell off any one of our properties, somebody is going to learn how to make the key to our kingdom. We don't want that to happen.
Okay. I know you made a reference to Japan in your opening comments, but I wonder if you could give us a little bit more color on how active are the conversations you're having in Japan and that kind of thing.
We have people there on a constant basis, and we're constantly talking to the powers that be and to be. As you can see, the Japanese just reelected. They went to the opposite party from the one that was governing. They in the past have been favorably inclined to doing IRs with casinos. There's absolutely no reason why Japan shouldn't welcome IRs with open arms. They want more tourism. There's a great, fantastic location there, if we could get it. I think if they got very serious about it, which they may be now, because there is an interparty, about 125 members, interparty commission that's been put together on a nonpartisan basis to study the issue of IRs. We're just going to have to wait. The Asians don't move as fast as we can here in Las Vegas. We're on it.
If there's anybody that's on it, anybody that's doing it, and that's keeping their finger on the pulse, it's us. With Singapore, we know how good one of these locations could be.
Great. Thank you.
You're welcome.
Our next question comes on the line of Harry Curtis with Nomura.
Hi, good afternoon, guys. Several quick follow-up questions. First on The Parisian. There is not a lot of clarity, it sounds like yet on tables, but when you open in late 2015, would there be anything restricting you from installing slots or ETGs?
Not at this point, Harry. The restrictions are tables, not on slots or ETGs.
Okay. What has been your experience in Macau just over the past six months on customer reception to ETGs?
Harry, it's Rob. It's been terrific, and it keeps getting better. We're really pleased with the ETG market there, and I think the team keeps growing the balance. To Mike's reference point, you're not as restricted as live table games, but the Asian market is very receptive. You look at our numbers in Singapore, they're unbelievable, and they're getting better by the day in Macau. I think there's no reason to think that market doesn't continue to boom. We're very bullish on ETGs.
Just last question on Parisian, can you give us a sense of what you would expect to spend yourself for the Parisian in 2013, 2014, and 2015?
The total project cost, Harry, we're estimating at somewhere around $2.6 billion all in. It could range up a little bit, but that number has actually been approved by our board as for the capital cost of the building. That's including what we put in before. In terms of the investment as to how the cash will go out, probably we'll be using about $700 million roughly of SCL cash, and the rest will be financed. Hello?
Hello?
Yeah, we can hear you.
Okay. Ken can speak a word about that to you.
Yeah. To answer your question with regard, 2013 is going to be probably just over about $400 million. 2014 is going to probably be around $1 billion, maybe a little bit more.
He is talking about what the financing-
Right.
I think Harry was referring to our equity portion.
Exactly, the cash outlay.
Oh. I see. Well, then, as Mike talked about, it's going to be around $600 million-$700 million, it should go out.
You've just cut out.
Yeah, no, $6 million-$700 million. That, for the most part, will go out ratably. A little bit more upfront, 2013, the balance kind of spread over 2014 and with a little bit in 2015.
Okay. The last question that I had, it's really a housekeeping item. Going back to Singapore, you made a comment that you feel like your reserves there are essentially where you think that they're appropriate. Do you think that at this point or from this point on, that your actual dollar outlay for your reserve can actually decline?
As I mentioned before, we're still building up on a percentage basis. We're at about 29%. We are probably getting to about 35% or so in terms of the receivable balance. Yeah, I do think, over time, it could come down a little bit. We're still going to be spending a fair amount each quarter, maybe a little bit less than what we've done in 2012. It'll still be fairly close to that because if you think about it, we're
On an annual basis, we want to make sure that we're appropriately reserved. We'll be booking reserves consistent with the amount of credit that we're issuing. If it comes down, it'll be incrementally down, but it should be just marginally lower, if not the same.
That's very helpful, and it does it for me. Thank you.
Our next question comes on the line of Cameron McKnight with Wells Fargo.
Hi, thanks very much. Good afternoon.
Hi, Cameron.
A question for Rob or perhaps Sheldon. As we think about The Parisian, one thing that seems to become clearer is that more and more of these developments on Cotai are going to be much more heavily branded and much more heavily themed. The feedback we've had on The Parisian and Eiffel Tower theme has been very strong. What's your sense when you talk to customers about how that brand and theme will resonate as the property opens?
We can only point to The Venetian, and its property theme has been very well received, and the Chinese people are curious, interested in foreign locations and the appearance of them. I think that the uniqueness of having an architectural icon as the Eiffel Tower, I think it's going to be very well received. People speak very optimistically about the fact that the Chinese people will like it. They'll flock to it. It was challenging to get a walkway or elevator, getting it over to where the restaurant is, at the base of the, about a third of the way up the tower. We're trying to be as authentic as we can. We learned from building The Venetian here that what brings the feeling of being in the thematic location is the construction and the development of the landmarks and the icons.
Certainly, the Eiffel Tower is the most iconic structure in the world, and we're going to do a good job on that. I think they're going to come there. Listen, it's going to be gangbusters. It'll be tremendous.
I think to Sheldon's point, you look at the scale and the theming of The Venetian. The only place might make more sense and the only place they want to visit more, perhaps, than Venice, is Paris. I think our research indicates that the Chinese folks want to get to Paris just like my wife wants to get to Paris. I think you're going to find that, I think it's a great theme, a great concept. If you look at The Venetian's performance, it's so nimble, and it works on all cylinders because it's not just theme. It's got scale. It's got the food product. It works on all different levels, lodging, retail. I think what's been designed to The Parisian, honestly, is as good as The Venetian, maybe better. Pretty extraordinary product. We have total confidence. Our customer feedback on The Parisian theme is exceptionally strong and positive.
To your point, I think it's a lot like Vegas was in the '90s when we built The Venetian here. There's a desire to see a themed property, a themed experience that speaks very well to the mass market as well as the high-end.
One of our designers/architects is a Parisian. He's a very well-known designer/architect in Paris, he was brought in through one of our consultants, we're using him to get some authenticity for the entire property. It's going to look very authentic, I think the Chinese people, the Asians, are going to be very excited about it.
I agree.
Great. Thanks. A lot of that dovetails with what we've heard on the ground. Just moving on, Rob, a question that relates to your earlier comments on the mass business. One thing that surprised us was the strength in slot and hotel revenues in Macau in the quarter. How should we think about growth in those two segments going forward?
I don't know how you think about it, but I'm wildly bullish. I think that Macau is in its infancy. What Sheldon did in the Cotai Peninsula enabled the mass. If you think about it, if it hadn't been the Cotai development, you would've been stuck just being landlocked on the peninsula. I think what we've done is open up the floodgates to build these magnificent multi-thousand-room hotels that enable the customers to have a place to sleep, a place to gamble, and we're just lucky enough to have, yes, we're premium mass segment. Yes, we're junket segment, but we're kind of in a really weird place because of pure mass. To your point, having just come back from there, when you look at the pure mass, non-premium mass, it is just extraordinary how much they're gambling and how much they're sleeping there, eating. It's a whole experience.
I'm truthfully bullish on Macau and the mass business, not just the premium mass.
Great. Thanks very much, guys.
Ladies and gentlemen, we have reached the allotted time for questions. I'll now hand the call back over to management for closing remarks.
Thank you very much, everybody, for joining the call. As we close the call, it was a wonderful year for Las Vegas Sands Corporation. I think everybody realizes that. I think this is a year where we opened close to 6,000 hotel rooms in Macau, two additional casinos, a variety of food and beverage restaurants, expanded our capital investments, rehabilitated our Venetian hotel in Las Vegas, moved our Bethlehem numbers up to be the most successful property in Pennsylvania. I think the management team and the company's employees have done a marvelous job. I hope all of you recognize the work that they have done to get to these kinds of results, so thank you very much.
Ladies and gentlemen, this concludes today's conference call. We thank you for your participation. You may all disconnect.