Las Vegas Sands Corp.   Tushar Jain ♠ AJ Tus ♣ Ellen Yang
AgendaI. Company OverviewII. Investment ThesisIII. Competitive Analysis   •   Las Vegas   •   Macau   •   SingaporeIV. Key...
Visionary leader• Sheldon Adelson  – Bought Sands Hotel and    Casino in 1988  – Transformed company    into global empire...
Company OverviewLVS is owner and operator of luxury hotels, casinos, and resorts worldwideLas Vegas                       ...
Corporate Timeline  1988             1990                1999       2004      2007 2008     2009   2010      2012 2013+   ...
Investment Thesis• Non-replicable market exposure  – Joint property model in Las Vegas  – First mover advantage in Cotai S...
Las VegasIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
Stagnation in Las Vegas  155000                                                          96%                              ...
Las Vegas Gaming Market(Company Revenue by Geographic Distribution)                         LVS                           ...
LVS Vegas Strategy                                                          Table Game Revenue: $357.9 MThe Venetian      ...
AsiaIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
What Happens in Vegas    Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
Has Moved to Asia  Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
Macau and Singapore have Overtaken Vegas                                                    2010 Gaming Revenue (In Billio...
Why Asia   Heavily        • Government grants concession rights  regulated       • Limits entrance of competition         ...
MacauIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
Macau Development Timeline  2006                   2007              2010            2010            2012                 ...
Macau Gaming Market(Company Revenue by Geographic Distribution)                        LVS                                ...
Competitive Advantage in Macau• Strong foothold in Cotai Strip  – Effectively managing Cotai Development  – Largest curren...
SingaporeIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
Singapore Gaming Market(Company Revenue by Geographic Distribution)                        LVS                            ...
Singapore’s Gaming Industry  Sentosa Island Resort                               Marina Bay Sands     Introduction ♦ Inves...
Drivers and RisksIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
Catalysts & Drivers• Junket legalization in Singapore• Opening of Cotai properties• Q3 Earnings (October 28, 2011)      In...
Risks• Reductions in discretionary spending• Travel restrictions imposed by the Chinese  government to Macau• Significant ...
ValuationIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
QuestionsIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
AppendixIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
Appendix A:LVS Property Summary     Property               Hotel Rooms        # Table Games   # Slot Machines             ...
Appendix B:Industry Analysis                            • Gaming equipment industry is highly concentratedPower of        ...
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Las Vegas Sands 9-16-11

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Las Vegas Sands Inc. (LVS) presented by Tushar (T.J.) Jain, Ellen Yang, and A.J. Tus on September 16, 2011.

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Las Vegas Sands 9-16-11

  1. 1. Las Vegas Sands Corp. Tushar Jain ♠ AJ Tus ♣ Ellen Yang
  2. 2. AgendaI. Company OverviewII. Investment ThesisIII. Competitive Analysis • Las Vegas • Macau • SingaporeIV. Key Drivers and RisksV. ValuationVI. Questions Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  3. 3. Visionary leader• Sheldon Adelson – Bought Sands Hotel and Casino in 1988 – Transformed company into global empire – Considered the Steve Jobs of the gaming industry Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  4. 4. Company OverviewLVS is owner and operator of luxury hotels, casinos, and resorts worldwideLas Vegas Macau Singapore The Venetian Sands Macao Marina Bay Sands Bethlehem The Palazzo LV The Venetian Macao Sands Bethlehem Sands Expo Center Four Seasons Hotel Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  5. 5. Corporate Timeline 1988 1990 1999 2004 2007 2008 2009 2010 2012 2013+ Sands CotaiSheldon Adelson scheduled tobuys Sands Hotel open in and Casino Macau Four Seasons Hotel opened in Cotai Strip, Macau Additional Cotai properties to be opened Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  6. 6. Investment Thesis• Non-replicable market exposure – Joint property model in Las Vegas – First mover advantage in Cotai Strip, Macau – Dominant market position in Singapore• Great business at a good price – Unrecognized growth in developing properties – Mitigated risks in premium target market Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  7. 7. Las VegasIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  8. 8. Stagnation in Las Vegas 155000 96% 94% 150000 92% 145000 90% 140000 88% Rooms 135000 86% Occupancy 84% 130000 82% 125000 80% 120000 78% 2006 2007 2008 2009 2010 $12,000.0 39.5 39 $10,000.0 38.5 $8,000.0 38 37.5 $6,000.0 Revenue 37 Visitors $4,000.0 36.5 36 $2,000.0 35.5 $- 35 2006 2007 2008 2009 2010 Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  9. 9. Las Vegas Gaming Market(Company Revenue by Geographic Distribution) LVS Wynn Singapore US 19% 31% US Macau 21% 60% MGM Macau 69% Macau US 48% 52% Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  10. 10. LVS Vegas Strategy Table Game Revenue: $357.9 MThe Venetian Slot Machine Revenue: $201.4 M • Over 5,000 suites Hotel Revenue: $445.9 M • 110 table games Food and Bev Revenue: $260.6 M • 1,370 slot machines • VIP Club, SpaClub, entertainment Total Revenue: $1.3 Billion complex, Grand Canal ShoppesThe Palazzo 5-Year Vegas Net Revenues • Over 3,000 suites • 120 table games $1,400.00 • 1,270 slot machines $1,200.00 • VIP Club, SpaClub, entertainment $1,000.00 complex, Shoppes at the Palazzo $800.00 $600.00 $400.00Sands Expo Center $200.00 • Over 2.3 million square feet of $- premier exhibition and meeting 2006 2007 2008 2009 2010 space Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  11. 11. AsiaIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  12. 12. What Happens in Vegas Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  13. 13. Has Moved to Asia Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  14. 14. Macau and Singapore have Overtaken Vegas 2010 Gaming Revenue (In Billions) Asia Las Vegas $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 Revenue/Casino (In Millions) Revenue/Visitor Asia AsiaLas Vegas Las Vegas $- $200 $400 $600 $800 $1,000 $- $200 $400 $600 $800 $1,000 Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  15. 15. Why Asia Heavily • Government grants concession rights regulated • Limits entrance of competition • Growing middle class in AsiaTarget market • Number of high net worth individuals to increase by 133% in growth next five years Increased • New ferry from Hong Kong to Cotai modes of • Bridge from China to Macau and Zhu Hai planned for 2016transportation • Possible move by Singapore government to allow junketsDeregulation of Junkets Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  16. 16. MacauIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  17. 17. Macau Development Timeline 2006 2007 2010 2010 2012 2012+First Cotai Strip Venetian Macau Wynn announces Macau Theme MGM LVS Cotai hotel opens opens planned Park announced Expects to Central development begin Coati brought development online Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  18. 18. Macau Gaming Market(Company Revenue by Geographic Distribution) LVS Wynn Singapore US 19% 31% US Macau 21% 60% Macau 69% MGM Macau US 48% 52% Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  19. 19. Competitive Advantage in Macau• Strong foothold in Cotai Strip – Effectively managing Cotai Development – Largest current and developing projects • Venetian Macau: 3,000+Rooms • Sands Cotai Center: 6,000+ Rooms – Control of Transportation Infrastructure • LVS Owned Ferry System • New Bridge Development Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  20. 20. SingaporeIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  21. 21. Singapore Gaming Market(Company Revenue by Geographic Distribution) LVS Wynn Singapore US 19% 31% US Macau 21% 60% MGM Macau 69% Macau US 48% 52% Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  22. 22. Singapore’s Gaming Industry Sentosa Island Resort Marina Bay Sands Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  23. 23. Drivers and RisksIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  24. 24. Catalysts & Drivers• Junket legalization in Singapore• Opening of Cotai properties• Q3 Earnings (October 28, 2011) Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  25. 25. Risks• Reductions in discretionary spending• Travel restrictions imposed by the Chinese government to Macau• Significant changes to tax laws• Double-dip recession Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  26. 26. ValuationIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  27. 27. QuestionsIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  28. 28. AppendixIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  29. 29. Appendix A:LVS Property Summary Property Hotel Rooms # Table Games # Slot Machines Amenities VIP Club, SpaClub, entertainment Venetian (Vegas) 5,040 110 1,370 complex, Grand Canal Shoppes VIP Club, SpaClub, entertainment Palazzo (Vegas) 3,066 120 1,270 complex, Shoppes at the Palazzo Sands Expo Center 2.3 million sq ft of exhibition and meeting N/A N/A N/A (Vegas) space Ferry to Mainland China, VIP Club, Sands (Macau) 289 420 1,140 restaurants and retail Restaurants and retail, entertainment Venetian (Macau) 2,900 600 2,160 complex, event center Apartment complex (underFour Seasons & Plaza 360 120 200 development), VIP mansions, Casino (Macau) restaurants and retail, event center Marina Bay Sands SkyPark, restaurants and retail, 2,600 620 2,300 (Singapore) entertainment complex, event center Retail facility, event center, National Sands (Bethlehem) 300 (opening 2011) 80 3,020 Museum of Industrial History Total 14,555 2,070 11,460 - Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  30. 30. Appendix B:Industry Analysis • Gaming equipment industry is highly concentratedPower of Moderate • No dominant player (stable prices)Suppliers • Lengthening of replacement cyclesPower of • Game offerings are similar across casinos ModerateBuyers • Switching costs are low (loyalty programs are key)Barriers to • Heavily regulated industry HighEntry • High development costs ($500 M - $1.5 B)Power of • Alternative forms of gambling LowSubstitutes • Alternative forms of entertainmentIntra- • Few high-end, integrated resort casino companiesIndustry High • Same target market and similar gaming optionsRivalry • Key differentiators: ambience and amenities Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation

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