Case Analysis Project
Summer 2014

Brandon Ast
Christina Casey

Table of Contents
Introduction…………………………………………………………………………………………3
Overview of the Company
Current Strategies Current Mission
External Environment…………………………………………………………………………….4 Assessment of External Environment Porter’s Five Forces Assessment of Strategic Groups Key Competitors
Internal Environment……………………………………………………………………………..7 Value-Chain Analysis SWOT Analysis Financial Statement Analysis
Analysis of Financial Data Key Resources and Capabilities Internal Efficiency and Cost Savings Industry Analysis
Analysis of Marketing Position………………………………………………………………..18 Company & Industry Growth Marketing Strategies Analysis of Management Stock Performance International Strategies
Strategic Position…………………………………………………………………………………21 Current Core Competencies Competitive Advantages Performance Indicators
Recommendations and Discussion………………………………………………………………23 Long-Term Options SBU Level Recommendations Short-Term Options Corporate Social Responsibility Environment and Sustainability
Introduction
Las Vegas Sands Corporation (LVS) is a multinational casino and resort company that began in 1989 when Sheldon Adelson purchased the Sands Hotel in Las Vegas, Nevada. Since 1990, LVS has grown into a luxury hotel, entertainment, and gambling corporation with locations in the United States in China. Among their most well-known American properties are The Venetian and Palazzo, both of which are in Las Vegas, and they also boast ownership of the Four Seasons Hotel, Sands Cotai Central, and The Venetian Macao in the Cotai Strip in Macao, China. Additionally, they operate the Marina Bay Sands in Marina Bay, Singapore. LVS is hoping to increase their presence in Singapore and Japan as well. They are planning to open The Parisian Macau, another hotel-casino, in late 2015 (Form 10-K, 2014).

Las Vegas Sands claims they were the first to introduce the concept of an “Integrated Resort.” Instead of offering a simple hotel room or a basic casino, they offer everything from “sumptuous suites to plush meeting rooms, celebrity status night clubs, intimate lounges, headliner and resident shows, upscale gaming, ultra-relaxing spa services, [to] a wide range of retail shops and award-winning cuisine (Las Vegas Sands, n.d.).” The company focuses on providing luxury to its customers in every way possible.

Las Vegas Sands does not have a mission statement, per se; instead, they discuss their values on the “Our Values” tab of their Sands.com website:

Our integrated resorts have become premier destinations for travel enthusiasts around the world. Why do they insist on us? Because they know they can count on unmatched service, a luxurious atmosphere, and superb hospitality every time.

They also know that at the heart of our company are unshakable values. We're committed to listening to our guests and employees, to considering the environmental impact of our decisions, and to contributing to the well-being of the communities in which we do business.

At the same time, we know that our values and words won't be worth much unless they are expressed through our actions. We insist therefore on participating every year in numerous charitable and environmental programs, which guarantee that our highest values have genuine impact on the world.

In order to achieve these goals, LVS does everything they can to consider guest’s wishes and to continually provide top-of-the-line service to their guests. LVS has also started a sustainability program called Sands Eco 360 which is being implemented in all their properties to help the environment without compromising their luxury experience.

Going forward, LVS has three long-term goals they will continue to pursue: 1) maximization of cash flow from existing Integrated Resort properties, 2) development of new destination Integrated Resorts in Asia, and 3) continued growth of return on capital to shareholders (2013 Annual Report, 2014).

The corporation is in the Casinos Industry in the Cyclical Consumer Goods and Services Sector. Even though they do provide experiences aside from gaming (hotels, shopping, etc.), for the purposes of this analysis, we will be focusing on the company’s gaming services only. Therefore, all the analysis focuses on the casino aspect of their business.

External Environment

The gambling industry in the United States is in the maturity stage. The market here is very saturated with everything from high revenue, all-inclusive destination resorts like Las Vegas Sands offers, all the way down to small Native American casinos and online gaming. In spite of this, Las Vegas continues to be a destination people seek out for its attractions. Gambling is legal in some form in 48 states, whether it be horse racing, casinos, lotteries, or charitable gaming such as bingo. Casinos in the United States are highly regulated at the state and federal level. They are even subject to some of the same federal laws as banks, due to the high volume of cash that they handle on a daily basis (American Gaming Association, 2009).

In Macau, the gaming industry is in the growth stage. It is still finding its way, and several changes must be made in order for it to really take off. One factor that could potentially harm the industry in Macau is the low level of diversity of visitors to the area. Most of their customers come from China and Hong Kong. Prior to 2003, Chinese law prohibited individuals from travelling to Macau; one had to apply for a group visa and visit Macau on a guided tour. Since the introduction of the Individual Visitor Scheme in 2003, individuals are now allowed to visit Macau once every three months. Another issue facing the gaming industry in Macau is the shortage of labor required to operate all the facilities that are springing up. The issue of whether or not to import labor is highly controversial, as it would potentially take jobs away from residents of the area. A third issue facing the market in Macau is the shortage of rooms in the area. In 2007, Macau only had enough rooms to lodge 12 million people over the course of the year, but they had 27 million visitors. Since then, more casino hotels have opened (including Las Vegas Sands’ Sands Cotai Central), but this may still be an issue deserving of more attention.

One interesting aspect of the markets in the two locations is the differing preferences of visitors. For example, gamblers in Las Vegas prefer slot machines to any other form of gambling. In 2007 the most frequently played games in Vegas were slot machines (65%), blackjack (14%), and video poker (6%). In Macau, high rollers are much more common, and these clients prefer higher stake table games. Macau’s top-played games were VIP baccarat (67%), baccarat (19.5%), and slot machines (only 4.3%). In addition, visitors to Las Vegas spend more on non-gaming entertainment, such as restaurants, shows, and shopping. One reason for this could be the average stay in each location: Las Vegas’ average stay is 4.6 days compared to only 1.2 days (Loi & Kim, 2009).

Porter’s Five Forces

I. Rivalry
The first force to discuss is rivalry amongst existing firms, which is very high in this industry. Firms must constantly try to outdo each other to bring in customers. They can do this in a multitude of ways. One way casinos can compete for consumers is to manipulate the table limit (or minimum bet) to a level that is attractive to gamblers, but still brings in a profit. Many casinos, however, now prefer to let “cheaper” customers play the slot machines, reserving the table games for guests willing to take on a little more risk. Therefore, they rely on other tactics to draw people in. Casinos have a multitude of advertising strategies to bring in new guests as well as to entice old customers to return. For example, there are numerous billboards along the highway informing passers-by that when they visit a certain casino for the first time, they will be treated to a free buffet. Also, rewards program members are such offers as $50 to gamble with if they return to the casino. Finally, casinos compete for customers by providing services to their guests. Some casinos give their patrons drinks, free of charge. Others will give guests a discount on a hotel room, or even pay for their stay altogether. These services are what can change a consumer’s mind from playing at one casino to visiting another instead, so providing benefits to guests ultimately gives the casino the competitive edge they need.

II. Barriers to Entry
The second force in Porter’s Five Forces is barriers to entry of the industry. This is also very high, primarily due to the high initial capital needed to open a casino. Anyone who has been to or seen Las Vegas knows that casino companies do not cut corners on their buildings. The over-the-top grandeur and pizazz are what casinos are known for, and anything less is just not good enough. On top of that expense, casino companies must also pay for the land to build on and a gambling license for their establishment. Obtaining a gambling license is not as simple as paying a fee, however. In the United States, each individual state decides whether or not to allow gambling, and to what degree. In Nevada, a very thorough questionnaire must be completed, which includes a background check and fingerprinting of the individual wishing to obtain the license, information about the proximity of the establishment relative to schools or churches, and where the individual plans to get the funds (Board, n.d.). In Macau, getting a gaming license is much more difficult. In 2002, three licenses were offered up, and twenty-one companies from across the world bid for them until three were chosen. Each of the three were allowed to sub-license to another gaming corporation; Galaxy Entertainment was one of the three, and they sub-licensed Las Vegas Sands, allowing them to enter the elite market in Macau (MacDonald & Eadington). Because of the sub-licensing allowance, there are at total of six companies running casinos in Macau. These licenses do not expire until 2020 at the earliest (they will likely extend until 2022), and no new licenses have been allowed.

III. Bargaining Power of Consumers
The third force is the bargaining power of consumers. This factor is low because ultimately, the consumers do not have much, or any, influence over the casinos’ practices. Guests to casinos have no control over their odds of winning, and they are not able to manipulate casino employees to bend the rules to allow for lower minimum bets. Consumers do have minimal power over the casino in that they are able to choose which one to go to, and they have no switching costs when they leave one casino for another. Some guests do belong to a rewards program at some casinos, and leaving it would require them to forfeit some benefits, but generally customers pay absolutely nothing to go to someone else.

IV. Bargaining Power of Suppliers
Fourth, the bargaining power of suppliers is rated as moderate. The main reason that they have any power is because casinos cannot operate without the equipment the suppliers provide. However, there are getting to be an increased number of suppliers of gaming supplies, so if the casino is not impressed by one supplier, they can simply go to another. In addition, most suppliers of gaming equipment have very little business in other areas, so they depend on casinos for business, reducing their bargaining power even further. Finally, the equipment needed to run a casino (i.e. poker chips, playing cards, slot machines) is relatively cheap and easy to find. With the exception of certain novelty games like Deal or No Deal, games do not vary from one another too much, so they can be purchased from almost any supplier.

V. Threat of Substitutes
The final factor is the threat of substitutes. Gambling is somewhat of a unique industry; there are no substitutes. Although there are some activities such as skydiving or putting money in the stock market that offer some degree of risk, some people become addicted to gambling, eliminating all substitutes. In addition, Las Vegas and Macau are places people go specifically to gamble, usually seeing shows and going shopping in between trips to the casinos.

Strategic Group – United States

Wynn
MGM
LVS

Caesars
Fully Integrated

Penn National

Boyd Gaming
Casino & Hotel

Pinnacle Entertainment

Ameristar

Isle of Capri

Monarch
Century

Casino Only

CryptoLogic

Affinity

2013 Revenue

Las Vegas Sands’ strategic group for the United States includes Wynn Resorts, Limited; MGM Resorts International; and Caesars Entertainment Corp. These companies are present in Las Vegas, Nevada to offer a wide range of services to their customers. They provide everything from casinos and hotels to high-end shows, five-star restaurants, and quality shopping.

Strategic Group – Macau

MGM

Fully Integrated
Melco Crown
Galaxy
SJM
LVS
Wynn

2013 Revenue

Las Vegas Sands’ competitors in Macau are slightly different than in the United States. Only six gaming licenses were offered in Macau in 2002. These licenses were offered to SJM Holdings Limited (holding company for Sociedade de Jogos de Macau S.A.), Galaxy Entertainment Group, and Wynn Resorts, Limited. Each of these companies sub-licensed, the honors going to MGM Resorts International, Las Vegas Sands Corp., and Melco Crown Entertainment, respectively. Because these are the only six companies allowed to have a gaming license in Macau at this time, and with all six offering similar high-end services, SJM, Galaxy, Wynn, MGM, and Melco Crown are in the strategic group of LVS in Macau (Kristof, Yang, & Ryan, 2010).

波特的五力

一较劲
第一股力量要讨论的是竞争当中存在的公司，这是非常高的在这个行业。公司必须不断尝试超越对方带来客户。它们可以以多种方式执行此操作。赌场可以竞争消费者的一种方式是操作表极限（或最小赌注）的水平，是赌客吸引力，但仍然带来利润。许多赌场，不过，现在更倾向于让“便宜”的客户玩老虎机，保留桌面游戏供客人愿意承担一点风险。因此，他们依靠其他手段来吸引人们。赌场中有大量的广告策略在新的客人带来，以及以吸引老客户的回报。例如，有在公 路沿线众多的广告牌，告知路人，当他们访问某个赌场的第一次，它们将被视为免费的自助餐。此外，奖励计划的成员都是这样报价为$ 50赌注，如果他们返回赌场。最后，赌场通过向他们的客人提供服务争夺客户。一些赌场给他们的顾客饮料，免费的。其他人会给客人在酒店房间折扣，甚至支付住宿费用共。这些服务都是什么可以在一个赌场玩到访问另一个替代，所以提供给客人的利益改变消费者的心灵，最终给人的赌场，他们所需要的竞争优势。

二。进入壁垒
在波特的五力第二种力量是阻碍该行业的进入。这也是非常高的，主要是由于需要开设赌场的高初始资金。任何人谁已经或看到拉斯维加斯的人都知道赌场公司不偷工减料自己的建筑物。过顶的庄严和潇洒是什么赌场是众所周知的，而任何少只是不够好。在这一费用之上，赌场公司还必须支付的基础上的土地，为他们建立一个赌博牌照。获得赌博许可证是不是简单的支付费用，但是。在美国，每个国家决定是否允许赌博的，到什么程度。在内华达州，一个非常彻底的调查必须完成，其中包括个人希望获得许可证，约相对于学校或教会建立的接近信息的背景检查和指纹，并在各个计划，以获得资金（董事会，ND）。在澳门，得到一个博彩牌照要困难得多。 2002年，三个许可证都提供了，21的公司来自世界各地的申办，直到三人被选中。这三个被允许再授权给其它游戏公司;银河娱乐是三个中的一个，他们分许可的拉斯维加斯金沙集团，使他们能够在澳门（麦克唐纳和Eadington）进入市场精英。由于分许可津贴，还有在总共六家公司在澳门赌场运行的。这些许可不会过期，直到2020年最早（他们可能会延长到2022年），并没有新的许可证被允许。

三。消费者的议价能力
第三个力的消费者的议价能力。这一因素是低的，因为最终的消费者没有太多，或者，影响在赌场“的做法。客人来赌场有过获胜的赔率没有控制权，他们并不能够操纵的赌场员工网开一面，允许较低的最低赌注。消费者确实有最小的功率在赌场中，他们可以选择去其中之一，他们没有转换成本时，他们留一个赌场的另一个。有些客人不属于奖励计划的一些赌场，并留下它会要求他们失去一些好处，但一般客户支付绝对没有去给别人。

四。供应商的议价能力
四，供应商的议价能力被定级为中等。他们有什么权力，主要的原因是因为赌场离不开设备供应商提供了操作。然而，也有越来越成为供应商游戏用品的数量增加，因此，如果赌场不是由一个供应商印象，他们可以简单地转到另一个。此外，大多数供应商的游戏设备很少有企业在其他领域，所以他们依赖于赌场业务，降低他们的议价能力更进一步。最后，运行一个赌场所需的设备（如扑克筹码，扑克牌，老虎机）是相对便宜和容易找到。除了某些新奇的游戏，如一掷千金，游戏不相互太大变化，因此他们可以从几乎任何供应商处购买。

代用品五威胁
最后一个因素是替代品的威胁。赌博是有点独特的行业;有没有替代品。虽然有一些活动，如跳伞或把钱在股市中，提供一定程度的风险，有些人沉迷于赌博，消除所有的替代品。此外，拉斯维加斯和澳门的地方的人专门去赌博，平时看节目，将前往赌场的购物研究。

战略集团 - 美国

拉斯维加斯金沙集团的战略组为美国，包括永利度假村有限公司;美高梅国际酒店集团;和凯撒娱乐公司，这些公司都出现在拉斯维加斯，内华达州，提供广泛的服务，他们的客户。他们提供一切从赌场和酒店，以高端的节目，五星级饭店和优质的购物。

战略集团 - 澳门
拉斯维加斯金沙集团在澳门的竞争对手比在美国略有不同。只有六博彩牌照被提供在澳门于2002年。这些许可证是提供给澳门博彩控股有限公司（控股公司的Sociedade博彩股份有限公司澳门SA），银河娱乐集团和永利度假村有限公司。这些公司分许可，荣誉将美高梅国际酒店集团，拉斯维加斯金沙集团，新濠博亚娱乐，分别。因为这些是允许有一个博彩牌照在澳门，此时唯一的六家公司，并与所有六个提供类似的高端服务，澳博，银河，永利，美高梅和新濠博亚在LVS在澳门的战略组（纪思道，杨，和瑞安，2010）。
Internal Environment

Value Chain Analysis

Las Vegas Sands’ overall goal is to provide their guests with a luxury experience and high-end services while providing an excellent workplace for their employees and constantly utilizing the most current environmentally-friendly practices in their day-to-day operations.

Their primary activities include inbound logistics, operations, sales and marketing, and service. * Inbound Logistics: this category includes activities required to get a casino up and running. Perhaps the most important of these activities is acquiring a gaming license, as the company cannot operate in a country without one. Next comes purchasing land and building the casino. Finally, LVS must research and purchase the most popular games in order to entice customers to gamble at their casino. * Operations: these activities include anything that is part of running the casino on a day-to-day basis. This could be anything from cleaning the casino to researching the most current, popular games. * Sales and Marketing: this step of the value chain includes reaching out to customers in order to convince them to come back. Las Vegas Sands doesn’t do too much marketing, but they do offer direct mail promotions to their V.I.P. gamblers. Also, they do some billboard, television, and radio advertising in the areas closest to their casinos. For example, a gambler in the Las Vegas area of Nevada will likely hear advertisements for LVS properties, but an individual living in Colorado likely will not. * Service: this category is similar to the Sales and Marketing component. Las Vegas Sands offers promotions to their guests during and after their stay using their Club Grazie Program at The Venetian and The Palazzo, both located in Las Vegas (Palazzo, n.d.). This program offers everything from discounted drinks to free rental cars and upgraded tickets to its members, depending on their amount of gambling.

Their support activities mainly include human resource management, technological development, and procurement. * Human Resource Management: Las Vegas Sands mentions in its 2013 10-K Report that they have experienced issues with labor unions in the past. Therefore, it is vital that LVS continues to work with these unions to ensure that their employees are always getting the best out of their job as possible. * Technological Development: because LVS does not manufacture their games themselves, this is more related to the games they present to their guests. They must always make sure they have the most up-to-date, high demand games that people come to play. This category can also be applied to the processes LVS uses when they build new facilities. In order to retain their ISO 20121 certification, they should always look for new ways to build their properties in the most sustainable way possible, and they should also continue to operate in the most “green” way they can. * Procurement: LVS imposes high sustainability requirements onto themselves. They therefore require all of their suppliers to be as sustainable as possible, and they also ask their direct suppliers to require the same of their own suppliers. By doing so, LVS has created a chain of highly eco-friendly companies working together.

SWOT Analysis I. Strengths
Las Vegas Sands has several strengths that allow it to keep a competitive advantage over the majority of casino-operated hotels. First, the fact that LVS has diversified itself into the Macau region has given them a huge revenue stream, making them into a very profitable company. LVS owns the largest hotel & casino in the world (The Venetian Macau), which can see up to 100,000 guests in a single day. Also, LVS has one of only two gaming concessions in the country of Singapore. If LVS can keep it this way then they will have a majority of market share in the Singapore region. They have also adapted to the ever-growing trend of offering more things than just gambling, such as movie theaters, concerts, stage performances, helicopter tours, massage parlors, fine dining, comedy shows, a variety of local excursion tours, etc. in their Integrated Resorts. II. Weaknesses
LVS may have too much capital invested into the Asian region (Macau & Singapore). If the casinos in Macau lose their profitability, LVS stands to lose much of what makes their company profitable. In order to eliminate this risk, they should diversify by investing in other geographic regions. Also, LVS may be trying too hard to fit their Las Vegas model onto Macau; they should take into consideration that preferences differ by region, and they should offer the games that are popular in Macau, rather than those that are most played in Las Vegas. Finally, they need to become better at collecting the debts owed to them by their customers. Because high-rollers are allowed to gamble on credit, the company could face large losses if these customers never pay them back. III. Opportunities
Many people in the U.S are losing the desire to travel to Las Vegas, and more and more casinos are popping up in local regions. Because of this, many are forgoing Las Vegas and are just going to the local casinos instead (Domestic Tourism, 2014). LVS can take advantage of their huge cash reserves and bring some smaller casinos to local regions with the LVS brand. Many states are in a deficit or decline in their budget, and a growing assumption is that bringing gambling in is an easy way for states to raise money to meet their budget needs. LVS can again take an opportunity to move into more local state regions with the promise that they will bring revenue to the states.
LVS is unique because while it is a casino company at heart, it is also an expert at building entertainment destinations. The ability of LVS to be more than just a casino gives them an edge. They have the opportunity to pursue a strategy in which they can build luxury hotels, minus the casino, around the world in popular vacation destinations such as Hawaii or the Bahamas. They can, therefore, expand into markets where gambling is not necessarily legal, and still make a profit by focusing on a different aspect of their business.
Another large opportunity for LVS is the growing popularity of online gaming. Millions of dollars are spent each day in online poker and casinos. LVS has casino expertise and simply needs to develop a strategy to create an online casino which will bring in more revenue. Currently in the United States, online gambling is only legal in Nevada, New Jersey, and Delaware (Chokshi, 2014). Therefore, they may need to start small, taking time to get everything set up and running smoothly, and expand into other states as they (possibly) legalize online gambling in the future. IV. Threats
With worldwide competition and plenty of countries who can potentially legalize gaming, LVS is threatened by other companies who stand to gain a concession in those new markets. Because the casino industry is so competitive, they will have to make sure they continuously set themselves apart from these possible new competitors. Additionally, airline prices are on a steady rise, so more and more people are far less willing to travel to Las Vegas or overseas than in previous years. LVS is threatened by this because they are not in the local markets like competitors such as Boyd gaming or Isle of Capri, who have casinos in smaller, local towns closer situated to their clientele. With the rise of online gaming, LVS stands to lose millions of dollars in potential gaming revenue when patrons choose to stay close to home, or who prefer going online to gamble rather than travel to an LVS location. Third, casino companies fall into an especially cyclical industry, which is shown in particular by LVS’ high beta of 1.91; therefore, if any of the countries in which they operate experiences a recession, they will feel the effects of that on their income statement. Finally, LVS is highly susceptible to the decisions made by the local governments in which they operate. If, for example, the government of Singapore decides not to renew LVS’ license in 2022, LVS must surrender all property over to the government without compensation (Form 10-K, 2014).
Financial Statement Analysis

I. Income Statement
Las Vegas Sands generated $13,769,890,000 of revenue in 2013. As shown later on, approximately 83% of this came from casino operations alone. According to a recent Forbes article (Sharf, 2014): “Macao brought in $835.9 million of adjusted property EBITDA to the company in the fourth quarter of 2013, while the company’s namesake city brought in $88.2 million.” Their before-tax income was $3,143 million, and their after-tax income was $2,954.68 million, indicating that they paid only 6% in taxes. They began paying dividends on common stock in 2012 at $1.00 per share, which was up to $1.40 per share in 2013. They do not pay preferred dividends. The Income Statement can be found in its entirety on Page 1 of Appendix A.

II. Balance Sheet
LVS had $5,515.54 million of current assets at the end of 2013. Their total assets came to $22,724.26 million, with $ 21,648.77 million of this being Property, Plant, and Equipment. This makes sense because of the vast amount of capital that goes into building and stocking each of their properties. The company has $15,058.77 million total in liabilities and $7,665.49 million of shareholders’ equity, $830,000 of which is common stock. They currently have 818,700,000 shares outstanding. The Balance Sheet can be found in its entirety on Page 2 of Appendix A.

III. Statement of Cash Flows
The Statement of Cash Flows for LVS shows that cash from operating activities was $4439.41 million, including deferred taxes of $4,250,000 in 2013. The company actually lost money from investment activities, reporting a negative cash flow of $912.21 million in this category. Cash flow from financing was negative as well, at $2,432.45 million. These are likely negative because the company is opening a new location in late 2015 (The Parisian Macau), and with debt financing being so inexpensive lately, they have taken out loans to finance the building process. The Statement of Cash Flows can be found in its entirety on Page 3 of Appendix A.

Financial Position Analysis

Complete financial ratio information for Las Vegas Sands can be found in Appendix B. The following summarize the important aspects of LVS’ business operations.

I. Profitability a. Casino Revenue as Percent of Total Revenue
Because of the focus on the casino aspect of Las Vegas Sands’ business, it is appropriate to isolate how much of the company’s total revenue comes from their casino floor. The following table shows the casino revenue, total revenue, and casino revenue as a percent of total revenue for Las Vegas Sands and the members of their strategic group (United States and Macau). Company | Casino Revenue (millions): 2013 | Total Revenue (millions): 2013 | % of Revenue | LVS | $ 11,386.92 | $ 13,769.89 | 82.69% | Wynn | $ 4,490.64 | $ 5,620.94 | 79.89% | MGM | $ 5,875.78 | $ 9,809.66 | 59.90% | SJM | $ 11,214.80 | $ 11,304.40 | 99.21% | Melco | $ 4,941.49 | $ 5,087.18 | 97.14% | Caesars | $ 5,808.80 | $ 8,559.70 | 67.86% | Galaxy | $ 7,971.86 | $ 8,516.48 | 93.61% |
LVS makes approximately 83% of their overall revenue from their casino floor. This is not quite as much as SJM, Melco Crown, or Galaxy (all of which obtain above 90% of revenue from their casinos), meaning that perhaps LVS is choosing to focus more attention on the hotel accommodations or entertainment aspects of their business than their competitors.

b. Casino Gross Profit
Gross profit is defined as a company’s revenue less the cost of goods sold. Again, due to the focus on the gambling aspect of LVS’ business, focusing on gross profit from the casinos only seemed prudent. In the following table is casino gross profit data for LVS and its strategic group. Company | 2013 Casino Gross Profit (millions) | 2011 Casino Gross Profit (millions) | Change | Average | $ 5,426.06 | | | Average (no SJM) | $ 2,914.15 | | | LVS | $ 4,903.20 | $ 3,429.12 | 42.99% | Wynn | $ 1,644.15 | $ 1,504.14 | 9.31% | MGM | $ 2,190.97 | $ 1,487.71 | 47.27% | SJM | $ 19,801.00 | $ 5,991.15 | 230.50% | Melco | $ 1,488.75 | $ 980.44 | 51.85% | Caesars | $ 2,528.30 | $ 2,774.70 | -8.88% | Galaxy | $ 2,217.60 | $ 1,092.27 | 103.03% |
The average gross profit for the casinos in this strategic group was $5.43 billion in 2013. Las Vegas Sands fell below this figure, coming in at $4.9 billion. This was, however, a growth of nearly 43% over 2011. In fact, the only company to surpass the industry average was SJM ($19.8 billion), which suggests that perhaps the average is being pulled up by their gross profit figure. If the average is recalculated excluding SJM’s casino gross profit, it drops substantially to $2,914.15 million. Aside from SJM, LVS outperformed all its competitors in casino gross profit for 2013. The table above shows substantially higher casino revenue for LVS than for the other companies in the strategic group, which causes the higher casino gross profit.

c. Return on Assets
Return on Assets (ROA) measures how efficiently a company is using its assets to generate profit. The following table compares ROA for Las Vegas Sands and its strategic group to the ROA for the casino industry as a whole. Company | 2013 Return on Assets | 2011 Return on Assets | Change | Industry | 6.0% | | | LVS | 9.52% | 6.93% | 37.37% | Wynn | 10.41% | 9.48% | 9.81% | MGM | 2.85% | 1.74% | 63.79% | SJM | 11.60% | 10.69% | 8.51% | Melco | 6.27% | 4.99% | 25.65% | Caesars | 2.34% | 1.97% | 18.78% | Galaxy | 11.83% | 6.83% | 73.21% |

All but two of the companies in LVS’ strategic group managed their assets better than the industry, which came in with a 6% ROA. Las Vegas Sands outperformed the industry average at 9.5%, but fell short of Wynn Resorts, SJM Holdings, and Galaxy Entertainment. LVS did manage to increase their ROA by 37.37% over 2011, which was one of the best improvements in its peer group.

d. Return on Capital
Return on Capital (ROC) shows how well a company generates revenue using the capital invested in the firm; that is, how well they pay back their investors. The following table summarizes ROC data for LVS and its strategic group as well as for the industry as a whole. Company | 2013 Return on Capital | 2011 Return on Capital | Change | Industry | 7.2% | | | LVS | 11.20% | 7.89% | 41.95% | Wynn | 12.92% | 11.57% | 11.67% | MGM | 3.47% | 2.12% | 63.68% | SJM | 18.44% | 16.36% | 12.71% | Melco | 7.17% | 5.63% | 27.35% | Caesars | 3.03% | 2.68% | 13.06% | Galaxy | 15.77% | 9.15% | 72.35% |
Las Vegas Sands performed better than the casino industry with an approximately 11% ROC (an increase of nearly 42% from 2011) compared to the industry’s 7%, and they also performed better than some of their competitors. However, they were outdone by Wynn Resorts (12.92%), SJM Holdings, and Galaxy Entertainment yet again.

e. Return on Equity
Return on Equity (ROE) measures how much profit a company generates using their shareholder’s equity. The data for the ROE of Las Vegas Sands, its strategic group, and the industry is as follows:

Company | 2013 Return on Equity | 2011 Return on Equity | Change | Industry | 12.1% | | | LVS | 32.54% | 21.07% | 54.44% | Wynn | 62.62% | 35.84% | 74.72% | MGM | 0.71% | 50.49% | -98.59% | SJM | 36.34% | 34.91% | 4.10% | Melco | 13.34% | 10.12% | 31.82% | Caesars | -- | -53.66% | -- | Galaxy | 39.96% | 25.02% | 59.71% |
Las Vegas Sands more than doubled the industry’s ROE for the period; at the same time, they provided a higher return than MGM Entertainment and Melco Crown. However, they were unable to outdo Wynn Resorts, SJM Holdings, and Galaxy Entertainment in this category. LVS’ ROE improved by 54% from 2011 to 2013.

II. Operating Performance f. Accounts Receivable Turnover
Accounts Receivable Turnover measures how often, during the course of the period, the firm was able to collect its accounts receivable. This is especially important in the casino industry because some V.I.P. members are allowed to gamble on credit, so the casino must be able to collect these debts in order to be profitable. The Accounts Receivable Data for LVS, its strategic group, and the industry is shown in the following table. Company | 2013 Acc. Rec. Turnover | 2011 Acc. Rec. Turnover | Change | Industry | 12.4x | | | LVS | 7.90 | 9.56 | -17.36% | Wynn | 23.40 | 24.74 | -5.42% | MGM | 19.22 | 17.24 | 11.49% | SJM | -- | -- | -- | Melco | 16.68 | 13.46 | 23.92% | Caesars | 12.36 | 17.91 | -30.99% | Galaxy | 90.72 | 82.32 | 10.20% |
Las Vegas Sands can only collect their accounts receivable approximately eight times a period, which is much less than the industry’s 12 times a period, and much less than some of their competitors (Galaxy is able to collect about 91 times a period). This is causing them to lose profit, and although their 2013 profit was much higher than the others in their peer group, they could have an even higher profit if they collected their debts more efficiently. Additionally, the 2013 Accounts Receivable Turnover is a decrease of 17% from 2011, indicating that their policies are not working. They must turn this around in order to survive long-term.

III. Liquidity g. Current Ratio
The Current Ratio measures how much of company’s debts could be paid off if they liquidated all their assets, including cash, inventory, and accounts receivable. The higher the ratio the better, as this indicates that the company can afford their debt. Current ratios for LVS, their strategic group, and the casino industry can be found in the following table.

Company | 2013 Current Ratio | 2011 Current Ratio | Change | Industry | 1.6x | | | LVS | 1.76 | 2.16 | -18.52% | Wynn | 2.04 | 1.09 | 87.16% | MGM | 1.23 | 1.61 | -23.60% | SJM | 1.70 | 1.51 | 12.58% | Melco | 2.54 | 2.50 | 1.60% | Caesars | 1.49 | 1.15 | 29.57% | Galaxy | 1.23 | 0.93 | 32.26% |

Las Vegas Sands would be able to pay off all their debts approximately 1.8 times with their current assets, which is more than the industry’s 1.6 times. Although this is better than most of the companies in the strategic group, it is not better than Wynn Resorts (2.04 times), or Melco Crown Entertainment (2.54 times). It is also a decrease from 2011 of 18.5%. They must also fix this in order to be able to continue to pay off their debts.

IV. Margin Analysis h. Casino Operating Margin
The operating margin of a company is defined as the proportion of revenues remaining after paying out the costs of operating the business. These costs include things such as wages, overhead, and advertising. Operating margin (for the casino component of business only) for LVS, its strategic group, and the casino industry is as follows: Company | 2013 Casino Op. Margin | 2011 Casino Op. Margin | Change | Average | 77.02% | | | LVS | 78.56% | 75.41% | 4.18% | Wynn | 74.99% | 74.50% | 0.66% | MGM | 55.62% | 46.91% | 18.57% | SJM | 99.21% | 99.24% | -0.03% | Melco | 94.09% | 93.61% | 0.51% | Caesars | 59.65% | 65.21% | -8.53% | Galaxy | 93.61% | 93.67% | -0.03% |
Las Vegas Sands just barely surpassed the industry operating margin of 77%, coming in at roughly 78.6% for 2013. This was an improvement of 4% over 2011, which was more than most of their competitors, but they suffered in this category; SJM Holdings, Melco Crown Entertainment, and Galaxy Entertainment had casino operating margins of above 90%.

i. Gross Margin
Gross margin of a company indicates how much of each dollar of sales revenue the company keeps after paying all direct costs associated with generating that revenue. It is similar to the operating margin discussed above, but it takes into consideration more than just operating expenses. Additionally, the above operating margin figures were focused solely on the casino component of the companies’ business; the gross margin figures presented here take into consideration all aspects of their respective businesses. Company | 2013 Gross Margin | 2011 Gross Margin | Change | Industry | 40.8% | | | LVS | 78.38% | 76.59% | 2.34% | Wynn | 73.69% | 73.24% | 0.61% | MGM | 37.60% | 37.65% | -0.13% | SJM | 99.44% | 99.48% | -0.04% | Melco | 78.80% | 77.52% | 1.65% | Caesars | 48.81% | 46.62% | 4.70% | Galaxy | 58.55% | 53.82% | 8.79% |
LVS outperformed the industry’s gross margin (41%), coming in at approximately 78% in 2013. They also surpassed many of their competitors. The only ones they were not able to outdo are, yet again, SJM Holdings and Melco Crown Entertainment. They experienced a growth in gross margin of 2.34% from 2011.

V. Debt Ratios: j. Debt-to-Equity
The debt-to-equity ratio describes how much debt a company has taken on relative to the amount of equity it carries. A high debt-to-equity ratio indicates that a company has preferred to finance their growth utilizing debt financing, and it can indicate potentially volatile earnings due to the increased interest expenses associated with that debt. Las Vegas Sands’ debt-to-equity ratio is presented in the following table along with that of their competitors and the industry. Company | 2013 Debt/Equity | 2011 Debt/Equity | Change | Industry | 12.7% | | | LVS | 102.73% | 106.29% | -3.35% | Wynn | 4,977.35% | 145.05% | 3,331.47% | MGM | 170.76% | 136.31% | 25.27% | SJM | 13.61% | 25.40% | -46.42% | Melco | 57.13% | 72.98% | -21.72% | Caesars | -- | 1,911.52% | -- | Galaxy | 51.20% | 80.61% | -36.48% |
This is an interesting ratio to examine because of the very imbalanced capital structure some companies have chosen. For example, Wynn Resorts has a staggering debt-to-equity ratio of 4977.35%; nearly four-hundred times the industry’s 12.7%. LVS’ debt-to-equity is not quite as high, but still exceeds the industry by a considerable margin, coming in at approximately 103%. Most of their competitors have chosen less extreme amounts of debt; the only other company with a higher debt-to-equity ratio than LVS is MGM Resorts International. LVS reduced their amount of debt relative to their amount of equity by 3% between 2011 and 2013. VI. Investment Valuation k. Price-to-Earnings
The Price-to-Earnings (P/E) ratio for a company indicates how much investors are willing to pay for every dollar of a company’s growth. A higher P/E can also indicate a high amount of expected future growth. The following table compares LVS’ P/E ratio to that of the casino industry. Company | P/E | Industry | 24.1x | LVS | 24.86 |
According to Capital IQ, the P/E for the casino industry is 24.1; Google Finance showed that Las Vegas Sands is priced just $0.70 higher for every dollar of the company’s earnings.

l. Beta
Beta is a measure of a company’s volatility relative to the market. The market will always have a beta of one; a company beta higher than 1 represents higher volatility, and a company beta lower than one indicates lower volatility. That is, high-volatility companies are more impacted by fluctuations in the economy than are low-volatility companies. LVS’ beta is compared to some of the other members of the strategic group. The betas listed below were found on Google Finance except for the beta for Caesars Entertainment. SJM Holdings and Galaxy Entertainment are not traded on American stock exchanges, so no beta could be found.

Company | Beta | LVS | 1.91 | Wynn | 1.90 | MGM | 2.26 | Melco | 2.29 | Caesars | 2.28 |
The casino industry is very volatile; the lowest beta in the group is Wynn Resorts’ at 1.90. This is low compared to the betas for some of LVS’ competitors – the highest is Melco Crown Entertainment at 2.29. LVS fits right in with the rest of the group with a beta of 1.91.

m. Z-Score
The Z-Score (or the Altman Z-Score) of a company is calculated by calculating the sum of the product of five unique multipliers and the respective financial ratios to each multiplier. It indicates the credit worthiness of a firm, or how likely the company is to go bankrupt. If a company scores less than 1.8, bankruptcy is considered likely. A score ranging from 1.8 to 3.0 indicates a mild risk of bankruptcy, while companies with Z-Scores above 3.0 are not considered likely to go bankrupt. The following table shows the calculations for the Z-Score for Las Vegas Sands. All dollar values are shown in millions. The market value of equity was calculated with 818.7 million shares outstanding at the June 13 price of $73.79 per share. Z = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E | | Factor 1 | Factor 1 Value | Factor 2 | Factor 2 Value | Value | Multiplier | Z | A | Working Capital | $ 2,385.88 | Total Assets | $ 22,724.26 | 0.1050 | 1.2 | 0.1260 | B | Retained Earnings | $ 1,713.34 | Total Assets | $ 22,724.26 | 0.0754 | 1.4 | 0.1056 | C | EBIT | $ 3,394.07 | Total Assets | $ 22,724.26 | 0.1494 | 3.3 | 0.4929 | D | Market Value of Equity* | $ 60,411.87 | Total Liabilities | $ 15,058.77 | 4.0117 | 0.6 | 2.4070 | E | Sales | $ 13,769.89 | Total Assets | $ 22,724.26 | 0.6060 | 1 | 0.6060 | Total | | | | | | | 3.737 |
The table shows that the Altman Z-Score for Las Vegas Sands is well above 3, so bankruptcy for the company is not considered likely at this time. Capital IQ backs this up with an Altman Z-Score of 3.56.

n. G* Value
The g* value of a company can be calculated in many different ways. One way is to find the growth in earnings per share over past years, and another is to use a company’s ROE times its retention rate. For cyclical industries, such as gaming, the former may not be a very accurate prediction because it uses historical data. Because LVS is in a cyclical industry, growth rate will be calculated using both methods. First, the earnings per share method:

Column1 | 2013 | 2012 | 2011 | 2010 | Net Income | 2306.00 | 1524.09 | 1560.12 | 599.39 | Shares Outstanding | 818.70 | 824.30 | 733.25 | 707.51 | 2013 EPS 2010 EPS = 3.32473933899
(3.32473933899)1/4 = 1.350328396
(1.350328396 – 1) x 100 = 35.0328396

EPS | 2.817 | 1.849 | 2.128 | 0.847 |

Using this method, it is shown that the expected growth rate for LVS over the next year is approximately 35%. However, as previously mentioned, since this method uses historical data for a cyclical industry, it may not be the best indicator of expected future growth.

Another method to calculate growth is using the company’s ROE multiplied by their retention rate. The retention rate measures how much of a company’s net income is paid out as dividends, and is calculated as follows: b=Net Income-DividendsNet Income
The retention rate (b) for LVS can be calculated using this formula to find that: b=$2,306,000,000-($1.04*818,700,000)$2,306,000,000 b=0.502957502 b=50.30% Utilizing this method, the expected future growth rate comes out to approximately 50.30%. This shows that there are numerous ways to calculate future growth, and all of these methods will yield very different results.

Key Resources and Capabilities

Las Vegas Sands excels at creating destination resorts and casinos. They provide top-of-the-line services and cater to their guests’ needs. Their Club Grazie loyalty program they tailor services and promotions to fit each individual that comes into their resorts.

LVS is a worldwide leader in being environmentally friendly and energy efficient and they only accept the best; the $5.7 billion spent on the Marina Bay Sands in Singapore is the perfect example that they do not cut costs over being eco-friendly (Marina Bay Sands, 2014). Since LVS spends much of their focus on the environment, they have implemented their “Sands Eco360˚ initiative. This is a set of guidelines and policies that dictate how they run their corporation, taking into consideration all aspects of their business. This is described in more detail on page 25 of this report. As a result of their Eco360˚ program, they have received the prestigious ISO 20121 certification. Being ISO 20121 certified has given them a positive public reputation and has made them an example for companies in the hospitality and gaming industries. ISO 20121 certification is proof of their commitment in boosting employee motivation; efficiency in energy consumption and waste management; and their overall supplier, client and customer satisfaction. They also have an acute ability to meet the demands for local host countries. In order to receive a concession to provide legal gambling have to meet every criteria that a country sets forth, including environmental regulations, waste management regulations, occupational hazard laws and employee wages acts, along with obtaining an overall favorable appearance and reputation in the local communities. The simple fact that they have done this in three separate countries shows their ability to adapt and evolve and cope with the legal, environmental, and business environments in which they operate.

Areas for Internal Efficiency

LVS can improve their database systems to advance their customer relations management when it comes to their loyalty programs. These database systems need to be updated in real time. A huge area for them to improve their database is when a player comes to play at a table game and the pit boss inputs their information, such as how long they play, what amount their average bet is, etc. This information usually comes at the discretion of the pit boss, and sometimes can be forgotten or falsified. LVS can streamline this process and minimize input errors, and the result will be better customer satisfaction through the loyalty program.

Secondly, a huge cost saver would be the control and re-use of their hotel room amenities. They could create larger sized soaps and shampoos instead of the “one-use” products they currently offer. This will save money on waste from customers throwing these away after only a single use.

Marketing Position

Industry Growth

Over the past 60 years, the casino industry has continually grown. This growth started mainly with Las Vegas and Atlantic City, both of which are in the United States. However, over the past 10 years there has been a decline in growth in the Las Vegas area, even though many millions of people still flock there every year from all over the world. Currently, casino companies have been looking abroad, hoping to build more casinos in locations that will draw high amounts of traffic from foreign markets. Their hope is to get the business of high rollers, as well as other gamblers, in Asian locations that, up until now, had to travel to the United States to visit the high-end casinos. This progress has been somewhat slow, however. Many countries have very strict gaming laws or outlaw gambling altogether. Macau, China and Singapore are two countries that have recently allowed gambling, so Las Vegas Sands has expanded to those markets. They are also hoping to branch into Japan soon, but gambling is still prohibited in this country.

Being a cyclical industry, all casino companies were hurt in the financial crash of 2008. MGM was trading at over $90 per share in late 2007, but since then they haven’t been able climb back above $30. This is, in part, due to their lack of ability to be a “first-mover” like LVS has been. Caesars Entertainment group only recently issued their IPO in beginning of 2012, and they haven’t seen really any growth. In fact, their company is starting to lose money.

Marketing Strategies

I. Product
With properties in Las Vegas, Pennsylvania and destinations in Macao and Singapore many people take advantage of Las Vegas Sands’ worldwide facilities every day. With a wide variety of services to all travelers and vacationers, anyone can enjoy their product/services at competitive prices. LVS offers the ability to game at all of its casino-resort locations, and for those who chose not to do so they can spend their time in a multitude of other ways. II. Promotion
Las Vegas Sands actively participates in numerous forms of marketing to their loyalty program members. They do this through magazines, radio, social media and internet, television, and billboards. They target customers around the world to attract return visitors, as well as to make new customers aware of the exceptional services and the great entertainment they can provide.
LVS has also taken a green initiative which they call “Sands Eco 360º.” There are a few basic underlying strategies to implement this green initiative. First is “Green Buildings.” The main objective of this strategy is to implement environment-saving construction processes and to create facilities that minimize the use and decay of the natural environment; this includes methods for extracting raw materials, delivering the materials, and the manufacturing of such materials. Secondly, they believe in minimizing the impact their daily operations have on the environment. They do this through recycling water, installing long-lasting energy equipment such as LED lights and energy efficient generators throughout the facilities, and recycling trash. LVS believes that it is important to give back to the environment, so they have paired with many local communities and business to help reduce their impact on the environment and to put back what they have taken.

Top Management Compensation

* Las Vegas Sands’ CEO and Treasurer Sheldon Adelson was reported to have made $14,003,900 in 2013, with an additional $10,212,900.00 in exercised stock options. His was the highest salary for the company. * The next highest salary was paid to Edward Tracy, the President and CEO of Sands China Ltd. His 2013 salary was $8,615,820, and he exercised $3,422,510.00 of stock options. * Next is Michael Leven, president, COO, secretary, and director of the company. He was paid $6,945,870 and exercised $3,422,510.00 of stock options in 2013. * Robert Goldstein, Executive Vice President of LVS and President of Global Gaming Operations, was paid $3,518,620 in 2013 and exercised $12,396,100.00 of stock options. * John Caparella is the President and COO of The Venetian, Sands Expo & Convention Center, and is Senior Vice President of Las Vegas Sands LLC. He was paid $3,115,390 in 2013 and did not exercise any stock options. * Finally, Michael Quartieri, Principal Financial Officer, was paid $1,530,900 in 2013 with no exercised stock options.
Stock Performance

Las Vegas Sands went public on December 14, 2004 at $29 per share, raising $690.5 million (Snel, 2004). The price rose fairly consistently after the IPO, peaking at $138.93 per share on October 26, 2007 just before The Palazzo opened in December of the same year. However, because the company operates in a cyclical industry, the financial crisis in 2008 sent the stock price plummeting to a mere $5.17 in November of 2008. It got worse before it got better – March 6, 2009 resulted in the lowest price the stock has ever been with just $1.77 per share. The opening of The Sands Bethlehem in May of 2009 barely had any impact on stock prices at all.

Image courtesy Yahoo! Finance.
The company has been steadily recovering since then, and had a price of $75.37 per share when the market closed on June 20, 2014. Since the financial crisis of 2008, the company has opened three locations: The Sands Bethlehem, Sands Cotai Central, and the Marina Bay Sands (Singapore). Sands Cotai Central opened on April 12, 2012 and may be the cause of the spike in stock price that can be seen in the 2012 segment of the above graph. The other two do not seem to have had any great effect on stock price, but likely contribute to the overall uptrend in the past five years. Overall the stock is given a “Buy” consensus recommendation on the NASDAQ website (NASDAQ, n.d.).

International Strategies

Las Vegas Sands should attempt to expand to more countries by building destination resorts and forgoing the casino component of their business. Because so many countries have yet to legalize gambling, eliminating this piece of their business model in these countries would allow the company to expand into areas that were formerly off-limits to them.

Strategic Position

Current Core Competencies

Las Vegas Sands had the highest 2013 revenue in their strategic group. Therefore, it is logical to assume that they are able to attract customers’ attention by providing services that set them apart from their competition. As was discussed as part of Porter’s Five Forces, casino companies are made or broken based on their ability to differentiate themselves in the industry, and LVS excels at this.

Also, Las Vegas Sands excels at finding innovative ways to build their facilities to be environmentally friendly. Their Sands Eco 360 program sets them apart from their competition.

Competitive Advantages

Singapore currently only allows two companies to operate casinos within its borders (LVS and Genting Group). The licenses that are currently active will come up for renewal in 2022, so no new competitors can enter this market until that time. If new companies are allowed to enter at that time, Las Vegas Sands will have a first-mover advantage, as they will already be a well-known, established brand in the country.

The Sands Eco 360 program gives LVS a competitive advantage. If governments in countries in which LVS is located see that the company is improving conditions in those countries, they will be more likely to renew the gambling concessions in the future. Also, countries where casino gambling is currently illegal may be more likely to legalize casinos and allow LVS to enter the market if they see all the benefits they are providing to other countries.

Performance Indicators

I. Key Performance Indicators

The first key performance indicator (KPI) is casino revenue in USD, which can be found in the table on page 10 of this report. It shows that Las Vegas Sands outperformed every competitor in this field in 2013 except for SJM Holdings. They must continue to do so going forward.

The second KPI is the number of casinos owned by the company. At the end of 2013, LVS owned eight casinos around the world. This is only half the number of casinos owned by MGM, and is almost one-sixth the number of casinos owned by Caesars (they have 44). In fact, the only company in the strategic group with fewer casinos than LVS is Wynn.

Third is the number of slot machines owned by each company. Las Vegas Sands owns 11,080 slot machines, which is enough to dwarf most of their competition, with most other companies having somewhere around 3,000 slot machines. However, MGM (28,618 slot machines) and Caesars (57,305 slot machines) have more than LVS.

The final KPI is the number of gaming tables owned by the companies in the strategic group. Las Vegas Sands operates 1,970 tables. Wynn and Melco Crown have approximately 700 tables each, and MGM and SJM Holdings have about 1,700 each. The only competitor with more tables than Las Vegas Sands is Caesars, with 3,565 gaming tables.

II. Balanced Scorecard
There are four categories included in a balanced scorecard: financial, consumer, internal process, and innovation and growth. The balanced scorecard for Las Vegas Sands is included in its entirety in Appendix C, but the following highlights some of the most important details. * Profitability: the main goal for Las Vegas Sands in this category is to increase revenue. They should do this by getting more people into their casinos to gamble. One option is to offer a variety of minimum bets in order to cater to a wider audience. * Customer: there are two goals for LVS in this section. The first is to increase the return visits of people in their V.I.P. programs. This could be accomplished by researching what promotions are the most effective (measured by recording the promotions that get redeemed most often) and sending them out loyalty program members. The second goal is to make sure they are offering the best services to their guests. They should constantly reevaluate themselves and their competition utilizing a customer survey, perhaps offering perks to those customers who provide feedback. * Internal Process: something LVS should focus on in this category is increasing their brand awareness in the United States. They are a very popular company in Macau and Singapore due to the limited number of competitors, but they get drowned out by other casino companies in Las Vegas. MGM and Caesars are household names, but not as many people have heard of Las Vegas Sands. They could spread their name by promoting their environmentally-friendly building and operating practices, and they could also launch a brand awareness campaign, expanding their advertising to regions outside the Las Vegas strip. * Learning and Growth: there are two primary goals in this category. First, LVS needs to ensure its employees are content with their working environment. The company must work with unions to avoid pickets, and to do this they must work with labor unions and survey their employees. Second, LVS should work to expand into new markets. Russia and India have legalized gaming, as well as sizeable populations, yet LVS has not made any attempts to enter these markets. They would benefit from diversifying themselves geographically.

Recommendations and Discussion

Long-Term Options

I. BCG Matrix

High
Macau

Market Growth

Singapore

Las Vegas

Low

Low
Market Share
High

It is best to group Las Vegas Sands’ operations by locations because although they offer unique services, it is important to understand that what truly diversifies their products is the varying locations of their properties. First, Macau can be considered a star. Macau has high market growth because LVS has been able to attract the business of the over 3 billion people living within a 5 mile radius. Many people from Asia are forgoing to travel to Las Vegas, and instead are taking trips to Macau. In terms of the market share for the casino industry, Macao is quickly surpassing Las Vegas in number of visitors and revenue generated per year.

Next, Las Vegas can be considered a cash cow. People are already aware of Las Vegas, and although it may have a large market share the market here is saturated with casino companies. While there is continued growth and other building, it has likely already filled most of its potential.

Singapore is a little harder to define, due to the fact that only two casino companies are legally allowed to operate here (Genting Group being the other). However, only a very small portion of LVS’ revenue actually comes from this region. Therefore, they have high market share, but since they began operations in 2011, they have not experienced much growth. This could almost make them a dog, but perhaps once regulations loosen up some in Singapore, the company will experience the growth they lacked in 2012 and 2013.

II. Business Life Cycle
Increasing revenue for Las Vegas Sands suggests that the casino industry is still in a growth stage. Although traditional casino gambling may have slowed in the United States, it is still illegal in many countries overseas. As more and more countries legalize casino gambling, the industry will continue to grow. Also, as Macau has seen an increased number of visitors every year, it is obvious that the casino industry is only getting started in international markets.

III. Long-Term Recommendations
One top recommendation for Las Vegas Sands to adopt in the long-term is to begin building destination resorts in popular vacation spots around the world. This may help them hedge some of the risk they take on from their casino business, and it would also make them less reliable on favorable government policies. They could expand into any country in the world without having to depend on legalized casino gambling.

Another recommendation for Las Vegas Sands to consider is branching off into online gaming. Although it is a very limited market in the United States as of 2014, they could spend some time making partnerships and getting their foot in the door. Then, if online gaming expands into other states, they have already established themselves as an online platform and could easily move into those new markets.

A third option for LVS to implement in the long-term is expanding their casinos into smaller areas. They could build small-scale, casino-only facilities in small towns in order to reach an increased number of customers. Entering markets such as Blackhawk, Colorado could potentially bring them a decent source of revenue for a relatively small start-up cost.

Finally, Las Vegas Sands could expand to countries in which gambling is currently legal. For example, both Russia and India have legalized casino gambling, but no company has really made a move to enter those markets. Perhaps breaking away from the mainstream trends in Asia could result in an unexpected source of large profits.

Porter’s Generic Strategies

In the casino industry, competitors must employ a diversification strategy in order to be successful. Therefore, Las Vegas Sands should implement a cost-leadership strategy in an attempt to generate more profit. If they could find a way to build their casinos at a lower cost, as well as a way to operate with lower overhead expenses, they would keep a higher percentage of their overall revenue as profit. However, with the extensive lengths LVS goes to in order to build in an eco-friendly way, it could be difficult to reduce their building expenses.

Short-Term Recommendations

In order for Las Vegas Sands to succeed in the short term they need to focus on maximizing their profit. One way to do this is by instituting more table games in Macau. In Macao, many people come to play baccarat; this game accounts for nearly half of their daily gambling revenue. Simply put, they should provide a wider variety of baccarat variations in order to keep people interested and playing.

Secondly, LVS needs to maximize what its customers can do in a single day, since the average visit to Macao is only 1.2 days. Perhaps putting more frequently played games closer together within the casino would help with this. They could also try to entice guests to stay for longer periods of time, but this may not be possible for all guests. The government in mainland China has very strict rules; for example, Chinese citizens are only allowed to visit Macau once in any three-month period. Therefore, they should target certain groups of customers when attempting to extend the average stay period. They need to implement a better, more specific, tailored experience to the individual in order to keep clients from leaving after only a single-day visit.

Corporate Social Responsibility

Las Vegas Sands has received the ISO 20121 accreditation for its Marina Bay Sands and its Venetian Macao properties. ISO 20121 is given to companies who meet the standards set forth in the areas of economic and social sustainability, as well as proper environmental management. ISO criteria are met by following a strict set of policies, processes and procedures (ISO 20121, n.d.). LVS goes to great lengths to prove itself a responsible company, and the ISO certification is proof that they care about their clients’ needs and the welfare of the environmental and their employees. LVS met these criteria through their Sands Eco 360 program, which is described in detail in the “Environment and Sustainability” section below.

Environment and Sustainability

Sands Eco 360 is Las Vegas Sands’ dedicated conservation program. They focus heavily on building and operating properties with a low environmental footprint, looking at four categories in particular, which they call Green Buildings, Environmentally Responsible Operations, Green Meetings, and Stakeholder Engagement (Eco 360: Our Strategy, n.d.). LVS obtained the ISO 20121 certification in May of 2014 because of their commitment to helping the environment. I. Green Buildings
Las Vegas Sands’ properties are built with the intention of saving energy, water, and materials. For example, when the Marina Bay Sands was constructed in Singapore, part was designed to have a “lotus-shaped roof” with the intention of catching water and recycling it to use in restrooms and other facilities on the property.

II. Environmentally Responsible Operations
After the properties are built, Las Vegas Sands implements ways to keep them operating under the same environmentally-friendly conditions. One innovative technique they use is key-card docking stations. When guests are in their hotel rooms, they place their room card into these stations to inform the room that they are there. When they leave, they take the key-card with them, and the room turns off all the lights and reduces the amount of heat or air conditioning that is used in the room. They also used LED lights in all their properties as another means of conserving energy.

III. Green Meetings
Because Las Vegas Sands hosts a large amount of conferences and other events in its facilities over the course of the year, they implemented this program so companies wishing to use their venues can do so in an environmentally friendly way. Guests automatically benefit from the water- and energy-conservation techniques mentioned above, but they can go above and beyond if they so choose. LVS offers transportation to and from conventions to reduce guests’ carbon footprint. They also have connections with certain food brands, such as Fair Trade coffee and other local and organic food producers, to deliver food to events. After the event has taken place, LVS will provide clients with an Impact Statement, which calculates how many resources the guests used and what their combined carbon footprint was.

IV. Stakeholder Engagement
Las Vegas Sands is very concerned with having their Team Members understand the Sands Eco 360 concept. Therefore, it is introduced to them on their first day of orientation and training. They continue to communicate this message to employees with pre-shift meetings, bi-weekly newsletters, and periodic giveaways. LVS also does everything it can to spread the sustainability message around its community by implementing recycling programs and other charitable organizations through The Sands Foundation. In addition to sustainability, The Sands Foundation also reaches out to youth organizations, wounded veterans, and health and education programs.

APPENDIX A
Financial Statements

Income Statement In Millions of USD (except for per share items) | 12 months ending 2013-12-31 | 12 months ending 2012-12-31 | 12 months ending 2011-12-31 | 12 months ending 2010-12-31 | Revenue | 13,769.89 | 11,131.13 | 9,410.75 | 6,853.18 | Other Revenue, Total | - | - | - | - | Total Revenue | 13,769.89 | 11,131.13 | 9,410.75 | 6,853.18 | Cost of Revenue, Total | 7,516.46 | 6,069.57 | 4,922.68 | 3,875.19 | Gross Profit | 6,253.43 | 5,061.56 | 4,488.07 | 2,977.99 | Selling/General/Admin. Expenses, Total | 1,810.75 | 1,692.26 | 1,282.27 | 1,046.04 | Research & Development | 15.81 | 19.96 | 11.31 | 1.78 | Depreciation/Amortization | 1,007.47 | 892.05 | 794.4 | 694.97 | Interest Expense(Income) - Net Operating | - | - | - | - | Unusual Expense (Income) | 25.33 | 165.15 | 32.76 | 73.17 | Other Operating Expenses, Total | - | - | - | - | Total Operating Expense | 10,375.82 | 8,838.98 | 7,043.41 | 5,691.15 | Operating Income | 3,394.07 | 2,292.15 | 2,367.33 | 1,162.03 | Interest Income(Expense), Net Non-Operating | - | - | - | - | Gain (Loss) on Sale of Assets | - | - | - | - | Other, Net | 4.32 | 5.74 | -3.96 | -8.26 | Income Before Tax | 3,143.51 | 2,062.58 | 2,094.82 | 855.9 | Income After Tax | 2,954.68 | 1,881.81 | 1,883.12 | 781.6 | Minority Interest | -648.68 | -357.72 | -323 | -182.21 | Equity In Affiliates | - | - | - | - | Net Income Before Extra. Items | 2,306.00 | 1,524.09 | 1,560.12 | 599.39 | Accounting Change | - | - | - | - | Discontinued Operations | - | - | - | - | Extraordinary Item | - | - | - | - | Net Income | 2,306.00 | 1,524.09 | 1,560.12 | 599.39 | Preferred Dividends | - | - | - | - | Income Available to Common Excl. Extra Items | 2,306.00 | 1,524.09 | 1,269.51 | 407.46 | Income Available to Common Incl. Extra Items | 2,306.00 | 1,524.09 | 1,269.51 | 407.46 | Basic Weighted Average Shares | - | - | - | - | Basic EPS Excluding Extraordinary Items | - | - | - | - | Basic EPS Including Extraordinary Items | - | - | - | - | Dilution Adjustment | 0 | 0 | - | - | Diluted Weighted Average Shares | 826.32 | 824.56 | 811.82 | 791.76 | Diluted EPS Excluding Extraordinary Items | 2.79 | 1.85 | 1.56 | 0.51 | Diluted EPS Including Extraordinary Items | - | - | - | - | Dividends per Share - Common Stock Primary Issue | 1.4 | 1 | 0 | 0 | Gross Dividends - Common Stock | - | - | - | - | Net Income after Stock Based Comp. Expense | - | - | - | - | Basic EPS after Stock Based Comp. Expense | - | - | - | - | Diluted EPS after Stock Based Comp. Expense | - | - | - | - | Depreciation, Supplemental | - | - | - | - | Total Special Items | - | - | - | - | Normalized Income Before Taxes | - | - | - | - | Effect of Special Items on Income Taxes | - | - | - | - | Income Taxes Ex. Impact of Special Items | - | - | - | - | Normalized Income After Taxes | - | - | - | - | Normalized Income Avail to Common | - | - | - | - | Basic Normalized EPS | - | - | - | - | Diluted Normalized EPS | 2.82 | 2.03 | 1.6 | 0.6 |

Balance Sheet In Millions of USD (except for per share items) | As of 2013-12-31 | As of 2012-12-31 | As of 2011-12-31 | As of 2010-12-31 | Cash & Equivalents | 3,600.41 | 2,512.77 | 3,902.72 | 3,037.08 | Short Term Investments | - | - | - | - | Cash and Short Term Investments | 3,600.41 | 2,512.77 | 3,902.72 | 3,037.08 | Accounts Receivable - Trade, Net | 1,762.11 | 1,819.26 | 1,336.82 | 716.92 | Receivables - Other | - | - | - | - | Total Receivables, Net | 1,762.11 | 1,819.26 | 1,336.82 | 716.92 | Total Inventory | 41.95 | 43.88 | 34.99 | 32.26 | Prepaid Expenses | 104.23 | 94.79 | 45.61 | 46.73 | Other Current Assets, Total | 6.84 | 6.82 | 77.02 | 225.92 | Total Current Assets | 5,515.54 | 4,477.51 | 5,397.15 | 4,058.91 | Property/Plant/Equipment, Total - Gross | 21,648.77 | 21,181.58 | 19,513.60 | 18,232.91 | Accumulated Depreciation, Total | -4,861.00 | -3,956.09 | -3,092.16 | -2,331.87 | Goodwill, Net | - | - | - | - | Intangibles, Net | 102.08 | 70.62 | 80.07 | 89.81 | Long Term Investments | - | - | - | - | Other Long Term Assets, Total | 318.87 | 390.03 | 345.46 | 994.56 | Total Assets | 22,724.26 | 22,163.65 | 22,244.12 | 21,044.31 | Accounts Payable | 119.19 | 106.5 | 104.11 | 113.5 | Accrued Expenses | 1,180.76 | 1,094.37 | 857.29 | 747.1 | Notes Payable/Short Term Debt | 0 | 0 | 0 | 0 | Current Port. of LT Debt/Capital Leases | 377.51 | 97.8 | 455.85 | 767.07 | Other Current liabilities, Total | 1,452.21 | 1,324.15 | 1,081.46 | 972.74 | Total Current Liabilities | 3,129.66 | 2,622.82 | 2,498.71 | 2,600.41 | Long Term Debt | 9,382.75 | 10,132.26 | 9,577.13 | 9,373.75 | Capital Lease Obligations | - | - | - | - | Total Long Term Debt | 9,382.75 | 10,132.26 | 9,577.13 | 9,373.75 | Total Debt | 9,760.26 | 10,230.07 | 10,032.98 | 10,140.82 | Deferred Income Tax | 173.21 | 185.94 | 205.44 | 115.22 | Minority Interest | 1,835.04 | 1,596.57 | 1,588.46 | 1,268.20 | Other Liabilities, Total | 538.11 | 564.21 | 523.7 | 520.35 | Total Liabilities | 15,058.77 | 15,101.81 | 14,393.43 | 13,877.94 | Redeemable Preferred Stock, Total | - | - | - | - | Preferred Stock - Non Redeemable, Net | - | - | 0 | 710.74 | Common Stock, Total | 0.83 | 0.82 | 0.73 | 0.71 | Additional Paid-In Capital | 6,348.06 | 6,237.49 | 5,610.16 | 5,444.70 | Retained Earnings (Accumulated Deficit) | 1,713.34 | 560.45 | 2,145.69 | 880.7 | Treasury Stock - Common | -570.52 | - | - | - | Other Equity, Total | 173.78 | 263.08 | 94.1 | 129.52 | Total Equity | 7,665.49 | 7,061.84 | 7,850.69 | 7,166.37 | Total Liabilities & Shareholders' Equity | 22,724.26 | 22,163.65 | 22,244.12 | 21,044.31 | Shares Outs - Common Stock Primary Issue | - | - | - | - | Total Common Shares Outstanding | 818.7 | 824.3 | 733.25 | 707.51 |

Statement of Cash Flows In Millions of USD (except for per share items) | 12 months ending 2013-12-31 | 12 months ending 2012-12-31 | 12 months ending 2011-12-31 | 12 months ending 2010-12-31 | Net Income/Starting Line | 2,954.68 | 1,881.81 | 1,883.12 | 781.6 | Depreciation/Depletion | 1,007.47 | 892.05 | 794.4 | 694.97 | Amortization | - | - | - | - | Deferred Taxes | -4.25 | 5.19 | 90.93 | 99.54 | Non-Cash Items | 386.12 | 551.62 | 326.44 | 299.12 | Changes in Working Capital | 95.39 | -272.91 | -432.39 | -5.08 | Cash from Operating Activities | 4,439.41 | 3,057.76 | 2,662.50 | 1,870.15 | Capital Expenditures | -943.98 | -1,449.23 | -1,508.59 | -2,069.28 | Other Investing Cash Flow Items, Total | 31.77 | 3.6 | 810.49 | -638.53 | Cash from Investing Activities | -912.21 | -1,445.63 | -698.11 | -2,707.82 | Financing Cash Flow Items | -47.27 | -129.93 | -112.08 | -72.54 | Total Cash Dividends Paid | -1,564.05 | -3,442.31 | -75.3 | -93.4 | Issuance (Retirement) of Stock, Net | -491.2 | 575.15 | -807.3 | 241.97 | Issuance (Retirement) of Debt, Net | -329.93 | -48.21 | -98.78 | -1,203.58 | Cash from Financing Activities | -2,432.45 | -3,045.31 | -1,093.46 | -1,127.56 | Foreign Exchange Effects | -7.11 | 43.23 | -5.29 | 46.89 | Net Change in Cash | 1,087.65 | -1,389.95 | 865.64 | -1,918.34 | Cash Interest Paid, Supplemental | 208.24 | 209.09 | 246.78 | 237.23 | Cash Taxes Paid, Supplemental | 173.28 | 115.05 | -5.42 | 1.28 |

APPENDIX B
Financial Ratios & Industry-Specific Financials

Las Vegas Sands Corp. (NYSE:LVS) > Financials > Ratios | | | | | | | | | | | | Restatement: | Latest Filings | | Period Type: | Annual | | | Order: | Latest on Right | | Decimals: | Capital IQ (Default) | | | | | | | | | | | | | | | | Ratios | | | | | | | For the Fiscal Period Ending | 12 months
Dec-31-2009 | 12 months
Dec-31-2010 | 12 months
Dec-31-2011 | 12 months
Dec-31-2012 | 12 months
Dec-31-2013 | LTM
12 months
Mar-31-2014 | Profitability | | | | | | | Return on Assets % | 0.6% | 3.7% | 6.9% | 6.9% | 9.5% | 10.5% | Return on Capital % | 0.7% | 4.2% | 7.9% | 8.0% | 11.2% | 12.4% | Return on Equity % | (6.1%) | 9.9% | 21.1% | 20.8% | 32.5% | 36.7% | Return on Common Equity % | (11.1%) | 6.8% | 17.7% | 20.4% | 31.3% | 34.4% | | | | | | | | Margin Analysis | | | | | | | Gross Margin % | 70.0% | 75.4% | 76.6% | 77.2% | 78.4% | 77.0% | SG&A Margin % | 14.2% | 12.2% | 11.4% | 11.9% | 11.4% | 11.1% | EBITDA Margin % | 17.7% | 28.8% | 34.4% | 30.5% | 32.4% | 33.1% | EBITA Margin % | 5.2% | 18.1% | 25.6% | 22.2% | 24.9% | 25.9% | EBIT Margin % | 4.2% | 18.0% | 25.5% | 22.1% | 24.8% | 25.8% | Earnings from Cont. Ops Margin % | (8.1%) | 11.4% | 20.0% | 16.9% | 21.5% | 22.4% | Net Income Margin % | (7.8%) | 8.7% | 16.6% | 13.7% | 16.7% | 17.3% | Net Income Avail. for Common Margin % | (11.8%) | 5.9% | 13.5% | 13.7% | 16.7% | 17.3% | Normalized Net Income Margin % | (1.4%) | 5.8% | 10.7% | 9.3% | 9.7% | 9.9% | Levered Free Cash Flow Margin % | (26.3%) | (12.2%) | 5.3% | 8.8% | 17.9% | 17.8% | Unlevered Free Cash Flow Margin % | (22.5%) | (10.1%) | 6.7% | 9.8% | 18.7% | 18.6% | | | | | | | | Asset Turnover | | | | | | | Total Asset Turnover | 0.2x | 0.3x | 0.4x | 0.5x | 0.6x | 0.7x | Fixed Asset Turnover | 0.4x | 0.5x | 0.6x | 0.7x | 0.9x | 0.9x | Accounts Receivable Turnover | 13.3x | 13.2x | 9.6x | 7.3x | 7.9x | 7.7x | Inventory Turnover | 48.9x | 56.8x | 65.5x | 64.4x | 69.4x | 79.5x | | | | | | | | Short Term Liquidity | | | | | | | Current Ratio | 3.1x | 1.6x | 2.2x | 1.7x | 1.8x | 1.8x | Quick Ratio | 2.9x | 1.4x | 2.1x | 1.7x | 1.7x | 1.7x | Cash from Ops. to Curr. Liab. | 0.3x | 0.7x | 1.1x | 1.2x | 1.4x | 1.6x | Avg. Days Sales Out. | 27.5 | 27.7 | 38.2 | 50.4 | 46.2 | 47.3 | Avg. Days Inventory Out. | 7.5 | 6.4 | 5.6 | 5.7 | 5.3 | 4.6 | Avg. Days Payable Out. | 20.6 | 21.2 | 18.0 | 15.1 | 13.8 | 14.5 | Avg. Cash Conversion Cycle | 14.4 | 13.0 | 25.8 | 41.0 | 37.6 | 37.4 | | | | | | | | Long Term Solvency | | | | | | | Total Debt/Equity | 150.0% | 120.2% | 106.3% | 118.2% | 102.7% | 116.3% | Total Debt/Capital | 60.0% | 54.6% | 51.5% | 54.2% | 50.7% | 53.8% | LT Debt/Equity | 147.6% | 111.1% | 101.5% | 117.0% | 98.8% | 112.9% | LT Debt/Capital | 59.1% | 50.5% | 49.2% | 53.6% | 48.7% | 52.2% | Total Liabilities/Total Assets | 64.3% | 59.9% | 57.6% | 60.9% | 58.2% | 60.7% | | | | | | | | EBIT / Interest Exp. | 0.6x | 4.0x | 8.5x | 9.5x | 12.6x | 13.7x | EBITDA / Interest Exp. | 2.5x | 6.4x | 11.4x | 13.1x | 16.5x | 17.5x | (EBITDA-CAPEX) / Interest Exp. | NM | NM | 6.1x | 7.5x | 13.2x | 14.0x | Total Debt/EBITDA | 13.7x | 5.1x | 3.1x | 3.0x | 2.2x | 2.1x | Net Debt/EBITDA | 7.5x | 3.6x | 1.9x | 2.3x | 1.4x | 1.5x | Total Debt/(EBITDA-CAPEX) | NM | NM | 5.8x | 5.3x | 2.7x | 2.7x | Net Debt/(EBITDA-CAPEX) | NM | NM | 3.5x | 4.0x | 1.7x | 1.8x | | | | | | | | Altman Z Score | 0.81 | 1.58 | 2.56 | 2.7 | 3.56 | 3.84 | | | | | | | | Growth Over Prior Year | | | | | | | Total Revenue | 3.9% | 50.2% | 37.3% | 18.3% | 23.7% | 24.0% | Gross Profit | 7.9% | 61.7% | 39.5% | 19.2% | 25.6% | 27.0% | EBITDA | 8.6% | 144.8% | 64.2% | 4.7% | 31.8% | 35.9% | EBITA | (2.2%) | 420.7% | 94.1% | 2.4% | 39.1% | 47.3% | EBIT | (7.8%) | 541.9% | 94.3% | 2.4% | 39.2% | 47.3% | Earnings from Cont. Ops. | NM | NM | 140.9% | (0.1%) | 57.0% | 61.8% | Net Income | NM | NM | 160.3% | (2.3%) | 51.3% | 57.2% | Normalized Net Income | NM | NM | 152.7% | 2.4% | 29.2% | 40.5% | Diluted EPS before Extra | NM | NM | 205.9% | 18.6% | 50.8% | 57.8% | | | | | | | | Accounts Receivable | 14.6% | 83.2% | 92.6% | 36.7% | (3.3%) | (9.8%) | Inventory | (6.1%) | 19.2% | 8.5% | 25.4% | (4.4%) | (2.4%) | Net PP&E | 12.5% | 8.6% | 3.6% | 4.9% | (2.6%) | (1.9%) | Total Assets | 20.0% | 2.3% | 5.7% | (0.4%) | 2.5% | 2.1% | | | | | | | | Tangible Book Value | 35.0% | 14.4% | 22.1% | (10.0%) | 8.2% | (1.0%) | Common Equity | 36.2% | 14.9% | 21.6% | (10.0%) | 8.5% | (0.5%) | Cash from Ops. | 411.4% | 192.8% | 42.4% | 14.8% | 45.2% | 43.1% | Capital Expenditures | (44.8%) | (3.3%) | (25.5%) | (3.9%) | (38.0%) | (23.7%) | Levered Free Cash Flow | NM | NM | NM | 97.3% | 149.6% | 85.7% | Unlevered Free Cash Flow | NM | NM | NM | 74.3% | 134.6% | 79.5% | Dividend per Share | NA | NA | NA | 10.0% | 40.9% | 41.7% | | | | | | | | Compound Annual Growth Rate Over Two Years | | | | | | | Total Revenue | 24.4% | 24.9% | 43.6% | 27.4% | 21.0% | 20.0% | Gross Profit | 62.9% | 32.1% | 50.2% | 28.9% | 22.4% | 21.5% | EBITDA | 20.2% | 63.0% | 100.5% | 31.1% | 17.5% | 16.9% | EBITA | (15.1%) | 125.7% | 217.9% | 41.0% | 19.4% | 18.4% | EBIT | (23.8%) | 143.2% | 253.2% | 41.0% | 19.4% | 18.4% | Earnings from Cont. Ops. | NM | NM | NM | 55.2% | 25.3% | 24.4% | Net Income | NM | NM | NM | 59.5% | 21.6% | 19.1% | Normalized Net Income | NM | NM | NM | 60.8% | 15.0% | 10.6% | Diluted EPS before Extra | NM | NM | NM | 90.5% | 33.7% | 27.0% | | | | | | | | Accounts Receivable | 57.6% | 44.9% | 87.8% | 62.3% | 15.0% | 7.9% | Inventory | 16.6% | 5.8% | 13.7% | 16.6% | 9.5% | 1.7% | Net PP&E | 24.8% | 10.5% | 6.1% | 4.3% | 1.1% | 0.1% | Total Assets | 33.9% | 10.8% | 4.0% | 2.6% | 1.1% | (0.9%) | | | | | | | | Tangible Book Value | 56.9% | 24.2% | 18.2% | 4.8% | (1.3%) | (9.3%) | Common Equity | 57.6% | 25.1% | 18.2% | 4.6% | (1.2%) | (9.0%) | Cash from Ops. | 33.0% | 287.0% | 104.2% | 27.9% | 29.1% | 26.9% | Capital Expenditures | (25.7%) | (26.9%) | (15.1%) | (15.4%) | (22.8%) | (22.2%) | Levered Free Cash Flow | NM | NM | NM | NM | 121.9% | 102.9% | Unlevered Free Cash Flow | NM | NM | NM | NM | 102.2% | 89.4% | Dividend per Share | NA | NA | NA | NA | 24.5% | 16.6% | | | | | | | | Compound Annual Growth Rate Over Three Years | | | | | | | Total Revenue | 26.8% | 32.4% | 28.9% | 34.6% | 26.2% | 23.8% | Gross Profit | 43.9% | 62.5% | 34.5% | 39.0% | 27.8% | 25.5% | EBITDA | 5.4% | 52.4% | 63.4% | 61.4% | 31.3% | 26.7% | EBITA | (25.5%) | 55.4% | 114.6% | 117.9% | 40.4% | 33.2% | EBIT | (30.6%) | 55.1% | 125.7% | 133.7% | 40.4% | 33.2% | Earnings from Cont. Ops. | NM | 88.5% | NM | NM | 55.8% | 43.5% | Net Income | NM | 72.5% | NM | NM | 56.7% | 42.3% | Normalized Net Income | NM | 61.9% | NM | NM | 49.5% | 35.9% | Diluted EPS before Extra | NM | 15.7% | NM | NM | 76.2% | 56.7% | | | | | | | | Accounts Receivable | 28.4% | 65.7% | 59.3% | 68.9% | 36.6% | 30.4% | Inventory | 30.1% | 17.5% | 6.7% | 17.5% | 9.1% | 7.2% | Net PP&E | 42.8% | 19.1% | 8.2% | 5.7% | 1.9% | 1.5% | Total Assets | 42.4% | 22.4% | 9.1% | 2.5% | 2.6% | 1.9% | | | | | | | | Tangible Book Value | 63.9% | 41.2% | 23.5% | 7.9% | 5.9% | 2.2% | Common Equity | 39.4% | 41.9% | 23.9% | 7.9% | 5.9% | 2.2% | Cash from Ops. | NM | 73.0% | 177.3% | 68.5% | 33.4% | 32.7% | Capital Expenditures | 2.8% | (18.9%) | (26.4%) | (11.5%) | (23.7%) | (19.4%) | Levered Free Cash Flow | NM | NM | NM | NM | NM | NM | Unlevered Free Cash Flow | NM | NM | NM | NM | NM | NM | Dividend per Share | NA | NA | NA | NA | NA | NA | | | | | | | | Compound Annual Growth Rate Over Five Years | | | | | | | Total Revenue | 30.7% | 31.5% | 33.3% | 30.4% | 25.7% | 27.0% | Gross Profit | 37.8% | 42.9% | 46.4% | 48.1% | 29.5% | 47.8% | EBITDA | 21.7% | 27.4% | 36.3% | 43.5% | 43.2% | 46.8% | EBITA | 0.5% | 20.4% | 33.1% | 49.4% | 69.7% | 92.0% | EBIT | (3.7%) | 20.3% | 33.0% | 49.3% | 74.9% | 91.9% | Earnings from Cont. Ops. | NM | 22.5% | 33.6% | 74.4% | NM | NM | Net Income | NM | 16.1% | 28.7% | 67.2% | NM | NM | Normalized Net Income | NM | 8.4% | 26.0% | 61.5% | NM | NM | Diluted EPS before Extra | NM | (8.6%) | 4.7% | 41.3% | NM | NM | | | | | | | | Accounts Receivable | 45.4% | 51.3% | 49.5% | 64.3% | 39.8% | 38.8% | Inventory | 27.6% | 26.5% | 23.3% | 17.1% | 7.8% | 8.8% | Net PP&E | 50.0% | 41.0% | 26.8% | 13.0% | 5.3% | 4.8% | Total Assets | 41.7% | 40.2% | 25.6% | 14.1% | 5.8% | 5.8% | | | | | | | | Tangible Book Value | 33.4% | 31.7% | 43.8% | 25.3% | 12.9% | 12.0% | Common Equity | 33.7% | 32.0% | 30.5% | 25.6% | 13.2% | 12.3% | Cash from Ops. | 11.3% | 26.0% | NM | 53.3% | 104.3% | 88.3% | Capital Expenditures | 35.1% | 18.7% | (4.8%) | (17.5%) | (25.0%) | (22.3%) | Levered Free Cash Flow | NM | NM | NM | NM | NM | NM | Unlevered Free Cash Flow | NM | NM | NM | NM | NM | NM | Dividend per Share | NA | NA | NA | NA | NA | NA |

Las Vegas Sands Corp. (NYSE:LVS) > Financials > Industry Specific | | | | | | | | | | In Millions of the reported currency, except per share items. | Restatement: | Latest Filings | | Period Type: | Annual | | | Currency: | Reported Currency | | Conversion: | Historical | | | Order: | Latest on Right | | Units: | S&P Capital IQ (Default) | | Decimals: | Capital IQ (Default) | | | | | | | | | | | | | | | | | | | Industry Specific | | | | | | | For the Fiscal Period Ending | 12 months
Dec-31-2008 | 12 months
Dec-31-2009 | 12 months
Dec-31-2010 | 12 months
Dec-31-2011 | 12 months
Dec-31-2012 | 12 months
Dec-31-2013 | Currency | USD | USD | USD | USD | USD | USD | Rooms Data | | | | | | | Rooms Opened | - | - | 2,600 | 300 | 3,600 | 2,100 | Total Rooms | 360 | 360 | 2,960 | 3,260 | 6,860 | 8,960 | | | | | | | | Owned Rooms Opened | - | - | 2,600 | 300 | 3,600 | 2,100 | Total Owned Rooms | 360 | 360 | 2,960 | 3,260 | 6,860 | 8,960 | | | | | | | | Number of Suites | 10,282 | 10,289 | 10,289 | 10,282 | 10,281 | 10,281 | Meeting and Conference Space (Sq.Ft) | 3,500,000.0 | 3,500,000.0 | 3,500,000.0 | 4,700,000.0 | 5,050,000.0 | 5,250,000.0 | | | | | | | | Casinos and Gaming Data | | | | | | | Owned Casinos | 5 | 6 | 7 | 12 | 8 | 8 | Total Casinos, Incl. JVs | 5 | 6 | 7 | 12 | 8 | 8 | | | | | | | | Owned Gaming Space | 1,074,000 | 1,074,000 | 1,349,000 | 1,359,000 | 1,491,000 | 1,638,000 | Total Gaming Space, Incl. JVs | 1,074,000 | 1,074,000 | 1,349,000 | 1,359,000 | 1,491,000 | 1,638,000 | | | | | | | | Owned Slot Machines | 6,280 | 9,840 | 11,460 | 11,480 | 11,480 | 11,050 | Total Slot Machines, Incl. JVs | 6,280 | 9,840 | 11,460 | 11,480 | 11,480 | 11,050 | | | | | | | | Owned Tables | 1,450 | 1,380 | 2,070 | 2,080 | 1,830 | 1,970 | Total Tables, Incl. JVs | 1,450 | 1,380 | 2,070 | 2,080 | 1,830 | 1,970 | | | | | | | | Owned Land Available | 324 | 200 | 200 | 200 | - | - | Total Land Available, Incl. JVs | 324 | 200 | 200 | 200 | - | - | | | | | | | | Owned Land | 396 | 282 | 282 | 282 | 222 | 222 | Total Land, Incl. JVs | 396 | 282 | 282 | 282 | 222 | 222 | | | | | | | | Hotels and Gaming Operating Statistics | | | | | | | Casino Margin | 30.6% | 33.3% | 41.3% | 46.1% | 43.1% | 43.1% | Casino Operating Margin | 67.4% | 71.5% | 75.6% | 75.4% | 77.1% | 78.6% | Room Margin | 79.8% | 81.6% | 82.0% | 79.0% | 79.4% | 80.3% | Promotional Allowances / Gross Operating Revenue | (7.3%) | (7.4%) | (6.4%) | (4.6%) | (4.7%) | (5.0%) | Food and Beverage Expense / Direct Operating Expenses | 13.1% | 12.1% | 12.3% | 14.0% | 13.0% | 12.4% | Casino Expense / Direct Operating Expenses | 155.0% | 171.9% | 192.8% | 182.0% | 201.9% | 217.8% | Room Expense / Direct Operating Expenses | 10.8% | 8.9% | 8.5% | 9.5% | 9.3% | 9.1% | Food and Beverage Revenue / Total Revenue | 7.8% | 6.6% | 6.1% | 6.1% | 5.4% | 5.0% | Room Revenue / Total Revenue | 16.2% | 13.3% | 10.9% | 10.1% | 9.9% | 9.5% | | | | | | | | Hotels and Gaming Revenue Breakdown | | | | | | | Casino | 3,192.1 | 3,524.8 | 5,533.1 | 7,437.0 | 9,008.2 | 11,386.9 | Food and Beverage | 369.1 | 327.7 | 446.6 | 598.8 | 628.5 | 730.3 | Rooms | 767.1 | 657.8 | 797.5 | 1,000.0 | 1,154.0 | 1,380.7 | Other | 406.8 | 419.2 | 540.8 | 826.5 | 894.0 | 996.6 | Promotional Allowances | (345.2) | (366.3) | (464.8) | (451.6) | (553.5) | (724.6) | Total | 4,389.9 | 4,563.1 | 6,853.2 | 9,410.7 | 11,131.1 | 13,769.9 | | | | | | | | Gross Operating Revenue | 4,044.8 | 4,196.8 | 6,388.4 | 8,959.2 | 10,577.6 | 13,045.3 | | | | | | | | Hotels and Gaming Expense Breakdown | | | | | | | Casino | 2,214.2 | 2,349.4 | 3,249.2 | 4,007.9 | 5,128.0 | 6,483.7 | Food and Beverage | 186.6 | 166.0 | 208.0 | 307.4 | 331.2 | 369.6 | Rooms | 154.6 | 121.1 | 143.3 | 210.1 | 237.3 | 271.9 | Development | 12.8 | 0.5 | 1.8 | 11.3 | 20.0 | 15.8 | | | | | | | | Other Direct Casino & Gaming Expenses | 213.4 | 240.4 | 274.7 | 397.3 | 373.0 | 391.2 | | | | | | | | Casino Operations Gross Profit | 977.9 | 1,175.4 | 2,283.9 | 3,429.1 | 3,880.1 | 4,903.2 | Room Operations Gross Profit | 612.5 | 536.7 | 654.2 | 790.0 | 916.7 | 1,108.7 | | | | | | | | Promotional Costs | | | | | | | Rooms Promotional Costs | 44.2 | 54.5 | 55.4 | 38.0 | 62.2 | 88.4 | Food and Beverage Promotional Costs | 71.0 | 66.3 | 91.2 | 119.2 | 140.4 | 167.2 | Other Promotional Costs | 42.6 | 50.3 | 74.2 | 75.6 | 73.1 | 88.2 | Total Promotional Costs | 157.7 | 171.1 | 220.8 | 232.9 | 275.7 | 343.8 |

APPENDIX C
Balanced Scorecard

Goal Area/ Perspective | Strategic Objective | Performance Measure | Unit of Measure | | | | | 1.0 Financial | Profitability | Increase profit through the casino floor/ room sales | Increase net income by | | | Increase profit through return guests | 50% +/- 10% | | | Increase stock price | | | Increase Revenue | Getting more people on the casino floor playing | Increase revenue by 6% | | | Increase revenue through loyalty program and return customers | (from loyalty program) | | | | | | | | | | | | | | | | | 2.0 Customer | Loyalty | Increase returns of our (gambler)V.I.P program | Increase redemption of | | | Increase return visits by our(non-gamblers) | promotions by 3% | | | Expand our loyalty program to attact new people. | | | Service Quality | Create personal relationships with LVS employees and customers | | | | Increase customer satisfaction with services provided | Customer survey responses | | | Provide differentiated line of service unique to LVS | | | | | | | | | | | | | | 3.0 Internal Processes | Growth of Loyalty Programs | Employees selling the benefits of joining loyalty program | | | | Increase membership in loyalty programs | Increase by 3% | | | | | | Service Quality | More rigorous hiring process to ensure we hire the best in the marketplace | Customer surveys of | | | Advertise our jobs(make people seek us out) | individual imployees | | | Employee based incentives for good ideas through personal research. | | | Increase Brand Awareness | Turn LVS Into a household name like MGM | Brand awareness campaign | | | Increase LVS SEO | | | | Socially resposnsible practices | | 4.0 Learning and Growth | Information/Database Systems | Improve accuracy of database system in order to understand needs of customer base | Increased customer base | | | Create technology for employees/customers to add information to the systems | through promotions | | | | | | Employee Satisfaction | Increase employee satisfaction of working for the company | Decrease turnover by | | | Create environment employees are happy working in | 25% | | | Create a benefit program for employees to gain ownership in the company | Employee surveys | | Expand to New Markets | Build new relationships in Japan in case gaming is legalized | If legalized, receive | | | Creating public support for new markets | gaming concession | | | Research new markets to enter | |

Initiatives | | "Million dollar a day winner" Promote the idea that someone on an LVS property becomes a millionaire every single day. | Use the loyalty program to keep customers who spend money coming back as often as possible | Being successful in all of our inteneded stratigies should automatically result in an increase in stock price. | Offering turly better odds and having games with a variety of minimum bets that can be wagered. | Retaining existing customers be offering unique and best benefits for staying with LVS | | | | | Use database systems to send promotions to target audiences more efficiently. | Adverts to promote/attract the non-gambling benefits received while staying at LVS | Widen our acceptance range to include more people in the loyalty program | Offer promotions to customers if they fill out the survey | Create program where a service employee is basically is a personal LVS representative for a certain # of customers i.e(customer can call on this employee for questions,opinions, and ask for service if needed) | | | | | Broaden acceptance range of VIP program to allow for lower-income customers to receive benefits | Creating a better intelligence system to analyze customers needs/wants | Employees being rewarded for how many sign ups of the loyalty program they can generate(must be quality sign ups. I.e customer must use the program rather than just sign the name) | Promotion/benefits for employees who receive high sastisfaction feedback from customer surveys | 360 review process | Internal feedback surveys from employees(private) | Commercials and direct mail imforming customers that we are more than just a casino and hotel | Create a large Social Media presence | Promote Sands eco 360 initiative | Create system that does not need its customers to carry around a loyalty card | Improve artificial intelligence | Employee based input i.e(our employees can add input from a customer based on face-toface interactions) | Employee surveys | 360° review | Stock option incentives | Awareness campaing into the benefits of having casino in a country that does not yet. | Creating public support rallys in possible host countries | Hiring citizens of possible host countries rather than people from the outside for market research. |

APPENDIX D
Works Cited

Works Cited
American Gaming Association. (2009). Facts at Your Fingertips: U.S. Commercial Casino Industry.
Board, N. G. (n.d.). License Fees and Tax Rate Schedule. Retrieved from Nevada Gaming Commission and the State Gaming Control Board: http://gaming.nv.gov/index.aspx?page=94
Chokshi, N. (2014, February 5). At Least 10 States Expected to Consider Online Gambling this Year. Retrieved from The Washington Post: http://www.washingtonpost.com/blogs/govbeat/wp/2014/02/05/at-least-10-states-expected-to-consider-allowing-online-gambling-this-year/
Domestic Tourism. (2014, January 1). Retrieved from WikiWealth: http://www.wikiwealth.com/swot-opportunity:domestic-tourism
ISO 20121. (n.d.). ISO 20121. Retrieved from ISO 20121: Event Sustainability Management System: http://www.iso20121.org/
Kristof, K., Yang, A. S., & Ryan, C. (2010). Strategic Report for Las Vegas Sands.
Las Vegas Sands Corp. (2014). 2013 Annual Report.
Las Vegas Sands Corp. (2014). Form 10-K.
Las Vegas Sands Corp. (n.d.). Eco 360: Our Strategy. Retrieved from Las Vegas Sands Corp: http://www.sands.com/sands-eco-360/our-strategy.html
Las Vegas Sands Corp. (n.d.). Las Vegas Sands. Retrieved from Las Vegas Sands Corp.: http://www.sands.com/corporate-overview.html
Las Vegas Sands Corp. (n.d.). Our Values. Retrieved from Las Vegas Sands Corp.: http://www.sands.com/values.html
Loi, K.-l., & Kim, W. G. (2009). Macao's Casino Industry: Reinventing Las Vegas in Asia. Cornell Hospitality Quarterly, 268-283.
LVS. (n.d.). Retrieved from Google Finance: https://www.google.com/finance?q=NYSE%3ALVS&ei=itypU5i5FMW0qgHL7IGYDA
MacDonald, A., & Eadington, W. R. (n.d.). Macau – A lesson in scarcity, value and politics. Retrieved from Gaming Management Portal: www.urbino.net
Marina Bay Sands. (2014, June 18). Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Marina_Bay_Sands
NASDAQ. (n.d.). Las Vegas Sands Corp. Stock Research - Analyst Summary. Retrieved from NASDAQ: http://www.nasdaq.com/symbol/lvs/analyst-research
Palazzo, T. (n.d.). Grazie. Retrieved from The Palazzo Las Vegas: http://www.palazzo.com/grazie.html
People: Las Vegas Sands Corp (LVS). (n.d.). Retrieved from Reuters: http://www.reuters.com/finance/stocks/companyOfficers?symbol=LVS
Sharf, S. (2014, April 1). Macau Reports Strong Q1 Gambling Revenue, Wynn and Las Vegas Sands Win. Retrieved from Forbes: www.forbes.com
Snel, R. (2004, December 14). Las Vegas Sands IPO Comes Up a Winner. Retrieved from TheStreet.com: http://www.thestreet.com/story/10199086/1/las-vegas-sands-ipo-comes-up-a-winner.html

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[ 1 ]. Financial statement information was obtained from Google Finance.
[ 2 ]. All financial ratio data was obtained from Capital IQ for the twelve months ending December 31, 2013.
[ 3 ]. SJM and Galaxy both trade on the Hong Kong Securities Exchange. Their revenue figures were changed into U.S. Dollars using the June 3, 2014 spot exchange rate for HKD/USD. This is also true for the “Casino Gross Profit” table.
[ 4 ]. All employee compensation information found on Reuters.com.
[ 5 ]. According to Google Finance as of June 22, 2014.
[ 6 ]. KPI data taken from Capital IQ and can be found in the Industry-Specific Financials section of Appendix B.