Las Vegas Sands' CEO Discusses Q4 2011 Results - Earnings Call Transcript

Las Vegas Sands (LVS)

Q4 2011 Earnings Call

February 01, 2012 4:30 pm ET

Executives

Daniel J. Briggs - Vice President of Investor Relations

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Sheldon Gary Adelson - Chairman, Chief Executive Officer, Treasurer, Member of Nominating & Governance Committee, Chairman of Las Vegas Sands LLC, Chairman of Sands China Ltd and Chief Executive Officer of Las Vegas Sands LLC

Robert G. Goldstein - Executive Vice President and President of Global Gaming Operations

K. J. Kay - Chief Financial Officer and Executive Vice President

Michael Alan Leven - President, Chief Operating Officer, Secretary, Director, Chairman of Advisory Committee, Acting Chief Executive Officer of Sands China Ltd, President of Las Vegas Sands LLC and Chief Operating Officer of Las Vegas Sands LLC

Analysts

Mark Strawn - Morgan Stanley, Research Division

Joseph Greff - JP Morgan Chase & Co, Research Division

Shaun C. Kelley - BofA Merrill Lynch, Research Division

Felicia R. Hendrix - Barclays Capital, Research Division

Jon T. Oh - Credit Agricole Securities (USA) Inc., Research Division

Carlo Santarelli - Deutsche Bank AG, Research Division

Harry Curtis - Nomura Securities Co. Ltd., Research Division

Presentation

Operator

Good afternoon, ladies and gentlemen. My name is Mo, 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 Earnings Conference Call. [Operator Instructions] Thank you. I would now like to turn this call over to Mr. Daniel Briggs, Vice President of Investor Relations. Mr. Briggs, the floor is yours.

Daniel J. Briggs

Thank you very much. Before I turn the call over to Mr. Adelson, let me remind you that today's conference call will contain forward-looking statements that we are making under the Safe Harbor provisions of Federal Securities laws. The company's actual results could differ materially from the anticipated results in those forward-looking statements. Please see today's press release under the caption Forward-Looking Statements for a discussion of risks that may affect our results.

In addition, we may discuss adjusted net income, adjusted diluted EPS and adjusted property EBITDA, which are non-GAAP measures. A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures are included in the press release. Please note that this presentation is being recorded. In addition, we have made some presentation slides available on our website.

With that, let me please introduce the Chairman, Mr. Sheldon G. Adelson.

Sheldon Gary Adelson

Thank you, Dan, and good afternoon, everyone. For our company, 2011 was a landmark year in which we broke company records and at the same time, we believe most industry records for revenue, EBITDA and earnings per share. I want to walk you through a more detailed look at the previous quarter which includes record results in Macau and Singapore, an incredible growth in our mass gaming, hotel and retail businesses. But first, let me provide some additional perspective on 2011 and share my thoughts on where the company is heading for 2012.

Thanks to our financial strength and significant liquidity, we are happy to announce that the LVS Board of Directors has approved an annual dividend of $1 per share, which will be paid at $0.25 per quarter; that is $0.25 a quarter. A geographic diversity in the center of our operations and each of our business locations, or as I've said in the past, the reliability and predictability of our operating results and cash flow has put us in a unique and enviable position, one which allows us to offer much deserved dividend to our shareholders, while at the same time providing us ample resources to aggressively pursue new development opportunities around the world.

As a testament to the work of our corporate executives team, like Mike, Rob and Ken, our property management leadership teams and all of our team members worldwide, the company increased its net revenue from $6.9 billion in 2010 to a record $9.4 billion in 2011, an increase of 37%. Since gross revenue seems to be on people's minds, even though RevPAR is still what you take to the bank, I'm happy to point out the all-time industry record, $11.5 billion in total gross revenue the company produced in 2011. I'll just report gross revenue figures as it is a measurement of overall growth, so we thought we would share the figure with you as well.

While we're on the topic of gross revenue, let me also point out, since it seems to be grabbing some headlines today, that our gross gaming market share in Macau grows from 15% last January to 19% in January of 2012. Not that we run our business for market share, but a re-affiliation with Macau's most important gaming promoters can help drive our market share about 25% or even higher than the previous year [ph]. I remember discussing this on a previous telephone call that I expect to win new relationships with new junket reps would bring us back to the mid-20s. I'm now optimistic that moving so fast with so few new -- comparatively so few new junket reps that we moved up to 19.7%, I think it is. It depends who's reporting [ph].

Now let me get back to a topic a little closer to my heart, and that is EBITDA. Our 2011 company-wide EBITDA soared from $2.2 billion in 2010 to an industry record, an all-time industry record of $3.53 billion last year, a remarkable 58% increase. In addition, earnings per diluted share in 2011 increased a whopping 106% over the previous quarter. These over -- sorry, that should be year instead of quarter. Earnings per diluted share in 2011 increased a whopping 106% over the previous year. These overall results also reflect another substantial accomplishment.

In another industry first, we had 2 properties in 2 different markets, Marina Bay Sands in Singapore and The Venetian Macao in Macau, that both produced EBITDA in excess of $1 billion. In fact, every single one of our properties saw meaningful percentage increases in EBITDA in 2011 compared to 2010. This past year truly showed the power of our Integrated Resort business model and its ability to generate tremendous revenue, but of course, EBITDA.

Our company did not make its debut on the Fortune 500 until 2010, but since that time, we've been fortunate enough to surpass all of our industry competitors on that prestigious list. Although important to note -- also important to note, our growth is not just fueled by a single revenue source either. You could point this strong growth at retail, food and beverage, meetings and conventions or the $1 billion a room revenue the company did in 2011 as clear evidence that we are much better described as an international Integrated Resort developer rather than simply as a gaming company.

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