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Las Vegas Sands Q3 2007 Earnings Call Transcript

Good day ladies and gentlemen andwelcome to the Las Vegas Sands Corp Earnings Call. My name is Solomon and I'llbe your coordinator for today. (Operator Instructions).

I would now like to turn thepresentation over, to your host for today's call Mr. Bill Weidner. Pleaseproceed sir.

Thank you Solomon, and thank youall for joining us this afternoon or evening. We apologize for the slight delayhere and I guess there was bit of a traffic jam at the call center, but lasttime we checked there only 10 people in queue, so we will get going.

With me here today in the Las Vegas area is Mr. Sheldon Adelson,replica rolex oyster date, our Chairman; BradStone, Executive Vice President; Rob Goldstein, President of The Venetian in Las Vegas; Scott Henry,Senior Vice President; Bob Rozek, Chief Financial Officer; and Dan Briggs, ourVice President of Investor Relations.

Before we begin I do need toremind you that today's conference call contains forward looking statementsthat we're making under the Safe Harbor provisions ofFederal securities laws.

I would also like to caution youthat the Company's actual results could differ materially from the anticipatedresults in those forward looking statements. Please see today's press releaseunder the caption forward looking statements for the discussion of the risks thatmay affect our results.

In addition, we may discussadjusted EBITDA, adjusted net income, adjusted EPS and adjusted propertyEBITDAR, which are non GAAP measures. A definition and reconciliation of eachof these measures to the most comparable GAAP financial measures are includedin the press release. Please note also that this presentation is beingrecorded.

By now,rolex daytona imitation, you should have allreceived our press release detailing our financial results for the thirdquarter of 2007. We've put quite a bit of detail on our release today and thenumbers speak for themselves. So we'll keep our prepared remarks short,beginning with some highlights for the quarter, moving on to a few concludingthoughts and then we'll move on to your questions.

In Las Vegas the story of the quarter is prettysimple, everything is up with the table hold.

Our entertainment offeringscontinue to mature, our upgrading and re merchandising of property have beenincreasingly successful and we have had much momentum as we prepare for thePalazzo opening on December 20th of this year. At the Sands Macao,imitation rolex oyster perpetual day date, ouryear on year increases in our VIP gaming revenues were normalized for hold, andmore than made up for the weaker mass market revenues, as mass customers sharemore their gaming time with new entrance to the marketplace.

We're satisfied with theresiliency of the Sands as our VIP business remains robust,rolex day date womens fake.

We opened the 238 suite hoteltower at the Sands of September 28th, and in the month of October,we've seen significant increases in our high end mass table drop, as a directresult of the edition of those rooms. We remained convinced that the nowcompleted Sands product offering with more amenities like our 25th floorgambling club will be a formidable competitor on the Macao Peninsula for yearsto come.

Turning now to the VenetianMacao, some of the notable items from the opening of The Venetian Macao includenearly four million visitors in the past 65 days of operation. Strong hoteloperating performance for with ADR north of $200 and occupancy of our 3000suite hotel growing from 77% in September to over 86% in October, while REVPAR startedthe $161 million in September and expanded nicely to $179 million in October.

There were outstanding retailsales figures at the Grand Canal Shoppes with more stores opening in the weeksahead and greater visitation. Circulation increased traffic flow, to come, aswe open the remainder of the mall. A tremendous reception for entertainmentofferings including the NBA China games, Black Eyed Peas last week and thenBeyonce, which is expected to be a sold out performance this Saturday evening.

Our group meeting at conventionbusiness was also off to outstanding starts, with more than 200 group meetingset to occur and The Venetian Macao of the fourth quarter alone, along withseven trade shows this year at approximately 30 trade shows booked for 2008.

And finally, our VIP volumes havesignificantly exceeded our expectations and our non rolling table game drop issteadily increasing, just as it did at the Sands in the early days. It was upover 32% in October when compared to September. So the transformation of themarket is coming on strong and The Venetian Macao is paving the way. And asdramatic that this transformation is, we are clearly just at the top of thefirst inning, we are quite literally just getting started.

Looking ahead, our investmentsand infrastructure, including our soon to be launched ferry services in HongKong harbor, Hong Kong airport and the new Pac On ferry terminal at Taipa, willdrive increases in both customer visitation and in customer satisfaction with Macao as a destination.

Our marketing and entertainment activities,sports such as soccer, basketball and tennis and entertainment attractions likeBeyonce, I just mentioned continue to put Macaoon the map, as the destination for leisure and entertainment, in Asia. These high profile events were just the beginningof a series of activities position The Venetian Macao as a just first true Las Vegas style,multi night stay destination resort.

With respect to the retailprogress at The Grand Canal Shoppes in the adjoining mall of the Four SeasonsMacao we are over 150 stores in food and beverages open now, up from a 130 atthe grand opening on August 28, representing approximately 350,000 square feetincluding shops and restaurants that were on the main casino floor. We expectanother 350,000 square feet will be opened before the end of the year, with theremaining space set to open in early 2008.

The 211,000 square foot shops atthe Four Season Macau, featuring prestigious fashion and luxury brandsincluding Armani, Cartier, Dior, Fendi, Gucci, Aramis and many others whichwill directly connect to the shops at The Venetian Macau will open in latespring 2008.

Our average base minimum rentsfor The Grand Canal Shoppes and the shops at the Four Seasons Macau continue toexceed a $135 per square foot. While our early retail sales numbers give usconfidence that the mall will be an extraordinary economic success, as well asa powerful attraction for Macau.

Moving on to our proposeddevelopment of Trade Shows at Convention Destination, Hengqin Island,our development team continues to extensive collaboration with the projectcoordinating committee and their consultants. Those plans are currently beingintegrated into the overall plan for the development of Hengqin Island.

At Singapore our constructioncontinues to advance at a steady pace. As we mentioned in our press release wehave now completed terms with over 100 retailers and others to hope to betenants in our approximately 800,000 square foot mall at shops at the MarinaBay Sands, and at rates far in excess of rates in any other major market inAsia, reflecting the tremendous potential for our unique retail assetdeveloping there.

We remain on track for an openingof Marina Bay Sands in late 2009. In Bethlehem, Pennsylvania, we received siteplan approval from the city and are now moving forward with construction there.

That concludes the highlights. Weare clearly executing across the board, but before go on to the Q let mesummarize how we feel as a company and as a management team.

First, in Las Vegas our properties are performingexceptionally well, and on December 20, we will preview the 3068 suite Palazzo,ramping up to full power in the first quarter of 2008, to extend our successfulbusiness model here, driving growth while capturing the efficiencies manifestedin our master plan. The Palazzo will feature even more products, specificallydesigned to appeal to our increasingly important high end Asian gamingcustomer.

On the Macao Peninsula,we will continue to reposition the Sands and capture more operatingefficiencies and on Cotai we will continue to dial in the various synergisticprofit centers for The Venetian Macao. The rooms, the retail, theentertainment, the convention, the trade shows, the VIP table business, masstable business and slots, to maximize revenues and income as we completeadditional infrastructure and product features. Retail outlets, as well as ourpurpose build 1800 seats showroom to drive traffic into the facility.

We'll convert the pre bookedbusiness, our tour and travel book, our convention book, our contracted tradeshows to operating profits, which will ramp up occupancy ADR and also continueto grow our VIP and mass market volume. This is all while executing ourconstruction plan to fully develop the potential of Cotai Strip, Asia's Las Vegas. We remainconfident that the execution of these plans will lead to superior returns forour shareholders.

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