##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 20-F
   o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR
    12(g)
    OF THE SECURITIES EXCHANGE ACT OF 1934ORþ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    toORo

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this
    shell company report       Commission file number
    001-33178
 MELCO PBL ENTERTAINMENT (MACAU)
    LIMITED
 (Exact name of Registrant as
    specified in its charter)
 (Translation of
    Registrants name into English)
      Cayman Islands
 (Jurisdiction of incorporation
    or organization)
      36th Floor, The
    Centrium
 60 Wyndham Street
 Central
 Hong Kong
 (Address of principal executive
    offices)
      Securities registered or to be
    registered pursuant to Section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredAmerican depositary shares
    each representing three ordinary shares

The NASDAQ Stock Market LLC      Securities registered or to be
    registered pursuant to Section 12(g) of the Act:
    None.
 (Title of Class)
 Securities for which there is a
    reporting obligation pursuant to Section 15(d) of the Act:
    None.
 (Title of Class)
   1,320,938,904
    ordinary shares of Registrant issued as of December 31,
    2007.
  þ o
  o þ
  þ o
  Rule 12b-2
  þ o o
  o þ
  Rule 12b-2 o þ
    o o




---



##### Table of Contents





TABLE OF
    CONTENTS
   
 INTRODUCTION


1SPECIAL NOTE REGARDING FORWARD-LOOKING
    STATEMENTS


2PART I


4Item 1.

Identity of Directors, Senior Management and
    Advisers


4Item 2.

Offer Statistics and Expected Timetable


4Item 3.

Key Information


4A. Selected Financial Data


4B. Capitalization and Indebtedness


7C. Reasons for the Offer and Use of Proceeds


7D. Risk Factors


7Item 4.

Information on the Company


32A. History and Development of the Company


32B. Business Overview


32C. Organizational Structure


47D. Property, Plant and Equipment


49Item 4A.

Unresolved Staff Comments


49Item 5.

Operating and Financial Review and Prospects


49A. Operating Results


49B. Liquidity and Capital Resources


59C. Research and Development, Patents and
    Licenses, Etc.


63D. Trend Information


64E. Off-balance Sheet Arrangements


64F. Tabular Disclosure of Contractual
    Obligations


64G. Safe Harbor


65Item 6.

Directors, Senior Management and Employees


66A. Directors and Senior Management


66B. Compensation of Directors and Executive
    Officers


70C. Board Practices


70D. Employees


75E. Share Ownership


75Item 7.

Major Shareholders and Related Party
    Transactions


76A. Major Shareholders


76B. Related Party Transactions


79C. Interests of Experts and Counsel


84Item 8.

Financial Information


85A. Consolidated Statements and Other Financial
    Information


85B. Significant Changes


85Item 9.

The Offer and Listing


85A. Offering and Listing Details


85B. Plan of Distribution


86C. Markets


86D. Selling Shareholders


86E. Dilution


86F. Expenses of the Issue


86 i




---



##### Table of Contents



Item 10.

Additional Information


86A. Share Capital


86B. Memorandum and Articles of Association


87C. Material Contracts


87D. Exchange Controls


87E. Taxation


87F. Dividends and Paying Agents


91G. Statement by Experts


91H. Documents on Display


91I. Subsidiary Information


91Item 11.

Quantitative and Qualitative Disclosures about
    Market Risk


92Item 12.

Description of Securities Other than Equity
    Securities


93PART II


93Item 13.

Defaults, Dividend Arrearages and
    Delinquencies


93Item 14.

Material Modifications to the Rights of Security
    Holders and Use of Proceeds


93Item 15.

Controls and Procedures


93Item 16A.

Audit Committee Financial Expert


95Item 16B.

Code of Ethics


95Item 16C.

Principal Accountant Fees and Services


95Item 16D.

Exemptions from the Listing Standards for Audit
    Committees


95Item 16E.

Purchases of Equity Securities by the Issuer and
    Affiliated Purchasers


96PART III


96Item 17.

Financial Statements


96Item 18.

Financial Statements


96Item 19.

Exhibits


96EX-2.7 AMENDED AND RESTATED SHAREHOLDERS' DEEDEX-8.1 LIST OF SUBSIDIARIESEX-12.1 CEO CERTIFICATION PURSUANT TO SECTION 302EX-12.2 CFO CERTIFICATION PURSUANT TO SECTION 302EX-13.1 CEO CERTIFICATION PURSUANT TO SECTION 906EX-13.2 CFO CERTIFICATION PURSUANT TO SECTION 906EX-15.1 CONSENT OF WALKERS   ii




---



##### Table of Contents



INTRODUCTION  Form 20-F
  
    China, mainland China and
    PRC are to the Peoples Republic of China,
    excluding Hong Kong, Macau and Taiwan;
    Greater China is to mainland China, Hong Kong, Macau
    and Taiwan, collectively;
    HK$ and H.K. dollars are to the legal
    currency of Hong Kong;
    Hong Kong is to the Hong Kong Special Administration
    Region of the Peoples Republic of China;
    Hong Kong Stock Exchange is to The Stock Exchange of
    Hong Kong Limited;
    Macau and the Macau SAR are to the Macau
    Special Administrative Region of the Peoples Republic of
    China;
    Patacas and MOP are to the legal
    currency of Macau;
    Renminbi and RMB are to the legal
    currency of China; and
    US$ and U.S. dollars are to the
    legal currency of the United States.    Form 20-F
     1




---



##### Table of Contents



SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS  Form 20-F Form 20-F
    
    growth of the gaming market and visitation in Macau;
    satisfaction of conditions precedent and compliance with other
    conditions and covenants under the US$1.75 billion City of
    Dreams Project Facility, or City of Dreams Project Facility, to
    maintain and effect further drawdown under the facility;
    the completion of the construction of our City of Dreams project;
    the formal grant of a land concession for the City of Dreams
    site;
    obtaining approval from the Macau government for an increase in
    the developable gross floor area of the City of Dreams site;
    the formal grant of an occupancy permit for the City of Dreams;
    our acquisition and development of the Macau peninsula site;
    the development of Macau Studio City;
    construction cost estimates for our development projects;
    increased competition and other planned casino hotel and resort
    projects in Macau and elsewhere in Asia, including in Macau from
    SJM, Venetian Macao, Wynn Macau, Galaxy and MGM Grand Paradise
    Limited;
    the completion of infrastructure projects in Macau;
    government regulation of the casino industry, including gaming
    license approvals and the legalization of gaming in other
    jurisdictions;
    our ability to raise additional financing;
    the uncertainty of tourist behavior related to spending and
    vacationing at casino resorts in Macau;
    our entering into new development and construction and new
    ventures;
    the liberalization of travel restrictions and convertibility of
    the Renminbi by China; 2




---



##### Table of Contents




    fluctuations in occupancy rates and average daily room rates in
    Macau;
    our anticipated growth strategies; and
    our future business development, results of operations and
    financial condition.  Form 20-F Form 20-F. Form 20-F Form 20-F
 3




---



##### Table of Contents



PART I  ITEM 1.  IDENTITY
    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
    ITEM 2.  OFFER
    STATISTICS AND EXPECTED TIMETABLE
    ITEM 3.  KEY
    INFORMATION
  A. SELECTED
    FINANCIAL DATA
  Form 20-F page F-1. Form 20-F.
      4




---



##### Table of Contents



HistoricalResult for thePeriod from



HistoricalMarch 20,

Historical

Result for the2003

Result for the

Period from(Date of

Period from

June 9,

For the Year

For the Year

For the YearIncorporation

January 1,

2004

Ended

Ended

Endedto December 31,

2004 to June 8,

to December 31,

December 31,

December 31,

December 31,2003

2004

2004

2005

2006

2007(Predecessor)

(Predecessor)

(Successor)

(Successor)

(Successor)

(Successor)(In thousands of US$, except share and per share data and
    operating data)Consolidated statement of operations dataNet Revenues

$
611


$
1,896


$
6,071


$
17,328


$
36,101


$
358,613Total operating costs and expenses


(461
)


(1,286
)


(7,001
)


(21,050
)


(93,754
)


(554,430
)Operating income (loss)

$
150


$
610


$
(930
)

$
(3,722
)

$
(57,653
)

$
(195,817
)Net income (loss)

$
137


$
494


$
(1,007
)

$
(3,259
)

$
(73,479
)

$
(178,151
)Loss per share Basic and diluted



*



*


(0.002
)


(0.006
)


(0.116
)


(0.145
) ADS(1)



*



*


(0.005
)


(0.019
)


(0.348
)


(0.436
)Shares used in calculating loss per share Basic and diluted



*



*


625,000,000



522,945,205



633,228,439



1,224,880,031Other data:Operating/Adjusted
    EBITDA(2)





$
771


$
1,119


$
7,430


$
13,178


$
(388
)     *
    
    Figures not provided as the number of shares of our predecessor
    Mocha and our company are not directly comparable.(1)
    
    Each ADS represents three ordinary shares.(2)
    
    Prior to the opening of Crown Macau in May 2007, our management
    used Operating EBITDA of the Mocha Clubs to measure our
    operating performance, as Mocha Slot was our sole business until
    May 2007. Subsequent to the opening of Crown Macau in May 2007,
    our management used Adjusted EBITDA of Mocha Slot and Crown
    Macau to measure their operating performance as they are the two
    primary operating businesses of the Company.  December 31,2003

2004

2005

2006

2007(Predecessor)

(Successor)

(Successor)

(Successor)

(Successor)(In thousands of US$)Balance Sheet Data:Cash and cash equivalents

$
386


$
5,537


$
19,769


$
583,996


$
835,419Restricted cash


















298,983Total assets


2,113



106,112



421,208



2,279,920



3,620,268Amounts due to affiliated companies/person


164



4,125



31,518



10,611



6,602Amounts due to
    shareholders(1)(2)


1,497



11,930



94,577



212,506



116,167Capital lease
    obligation(3)


205



105



11



16



Total current liabilities


1,863



17,524



138,741



207,613



483,685Total liabilities


1,976



23,845



163,024



389,554



1,191,727Minority Interests






35



19,492







Total shareholders equity


137



82,232



238,692



1,890,366



2,428,541     (1)
    
    Includes amounts due to shareholders within one year of
    US$1.5 million, US$11.9 million, US$94.6 million,
    US$96.9 million and US$1.6 million as of
    December 31, 2003, 2004, 2005, 2006 and 2007, respectively,
    and 5




---



##### Table of Contents



amounts due to shareholders after one year of nil, nil, nil,
    US$115.6 million and US$114.6 million as of
    December 31, 2003, 2004, 2005, 2006 and 2007, respectively.(2)
    
    The balance of the outstanding term loan from Melco and Crown
    amounting to approximately US$115.6 million as of
    December 31, 2006 was repayable in May 2008 and carries
    interest at a floating rate equal to three months HIBOR.
    Subsequently in September 2007, the final maturity date was
    extended to May 2009.(3)
    
    Includes capital lease obligations, due within one year of
    US$100,000, US$105,000, US$3,000, US$6,000 and of nil as of
    December 31, 2003, 2004, 2005 and 2006 and 2007,
    respectively, and capital lease obligations, due after one year
    of US$105,000, nil, US$8,000, US$10,000 and of nil as of
    December 31, 2003, 2004, 2005, 2006 and 2007, respectively.
    The capital lease obligations were fully repaid during the year
    2007.  Exchange
    Rate Information
  Form 20-F Form 20-F
     6




---



##### Table of Contents



Noon Buying RatePeriod

Period End

Average(1)

Low

High(Hong Kong dollar per US$1.00)2003


7.7640



7.7864



7.8001



7.70852004


7.7757



7.7899



7.8010



7.76322005


7.7533



7.7755



7.7999



7.75142006


7.7771



7.7685



7.7928



7.75062007


7.7984



7.8008



7.8289



7.7497October 2007


7.7502



7.7544



7.7694



7.7497November 2007


7.7874



7.7773



7.7890



7.7573December 2007


7.7984



7.7983



7.8073



7.7879January 2008


7.7961



7.8044



7.8107



7.7961February 2008


7.7807



7.7963



7.8012



7.7807March 2008


7.7819



7.7813



7.7897



7.7642April 2008 (through April 1, 2008)


7.7868



7.7868



7.7868



7.7868     (1)
    
    Annual averages are calculated from month-end rates. Monthly
    averages are calculated using the average of the daily rates
    during the relevant period.    B. CAPITALIZATION
    AND INDEBTEDNESS
    C. REASONS
    FOR THE OFFER AND USE OF PROCEEDS
    D. RISK
    FACTORS
    Risks
    Relating to Our Early Stage of Development
  We are
    in an early stage of development of our business and properties,
    and so we are subject to significant risks and uncertainties.
    Our limited operating history may not serve as an adequate basis
    to judge our future operating results and
    prospects.
   7




---



##### Table of Contents




    satisfying conditions precedent and complying with other
    conditions and covenants under the $1.75 billion City of
    Dreams Project Facility to effect further drawdowns under the
    facility and to maintain the facility;
    completing the construction contracts for the City of Dreams
    project;
    obtaining the formal grant of a land concession from the Macau
    government for the City of Dreams site;
    obtaining the approval from the Macau government to increase the
    developable gross floor area of the City of Dreams site; and
    acquiring an ownership interest in the company that owns the
    Macau peninsula site, which is subject to significant conditions
    in the control of third parties unrelated to us and the seller,
    and to obtaining Macau governmental approvals, and obtaining
    financing commitments for the acquisition and development of the
    Macau peninsula project.    
    complete our construction projects within their anticipated time
    schedules and budgets;
    obtain a land concession for the City of Dreams project;
    obtain formal occupancy licenses for City of Dreams;
    identify suitable locations and enter into new lease agreements
    for new Mocha Clubs;
    renew lease agreements for existing Mocha Clubs;
    attract and retain customers and qualified employees;
    operate, support, expand and develop our operations and our
    facilities;
    maintain effective control of our operating costs and expenses;
    raise additional capital, as required;
    fulfill conditions precedent to draw down funds from current and
    future credit facilities;
    develop and maintain internal personnel, systems, controls and
    procedures to assure compliance with the extensive regulatory
    requirements applicable to the gaming business as well as
    regulatory compliance as a public company;
    respond to changes in our regulatory environment;
    respond to competitive market conditions; and
    respond to changing financing requirements.    We
    could encounter problems that substantially increase the costs
    to develop our projects and delay or prevent the opening of one
    or more of our projects.
   8




---



##### Table of Contents




    changes to plans and specifications;
    engineering problems, including defective plans and
    specifications;
    shortages of, and price increases in, energy, materials and
    skilled and unskilled labor, and inflation in key supply markets;
    delays in obtaining or inability to obtain necessary permits,
    licenses and approvals;
    changes in laws and regulations, or in the interpretation and
    enforcement of laws and regulations, applicable to gaming,
    leisure, residential, real estate development or construction
    projects;
    labor disputes or work stoppages;
    disputes with and defaults by contractors and subcontractors;
    environmental, health and safety issues, including site
    accidents;
    weather interferences or delays;
    fires, typhoons and other natural disasters;
    geological, construction, excavation, regulatory and equipment
    problems; and
    other unanticipated circumstances or cost increases.      We may
    be required to incur significant additional indebtedness or sell
    convertible bonds, ADSs or other equity or equity-linked
    securities. Our ability to obtain additional financing may be
    limited, which could delay or prevent the opening of one or more
    of our projects.
  and/or
 9




---



##### Table of Contents




    limitations on our ability to incur additional debt, including
    as a result of prospective lenders evaluations of our
    creditworthiness and pursuant to restrictions on incurrence of
    debt in our existing and anticipated credit facilities, which
    currently prohibits MPBL Gaming and our other subsidiaries from
    incurring additional indebtedness with only limited exceptions,
    and the fact that our senior creditors have pledges over our
    operating assets, including Crown Macau and Mocha Clubs;
    limitations on our ability to raise capital from the credit
    markets, especially if the current turmoil in the credit markets
    originating from the negative conditions in the
    U.S. subprime mortgage market continues. For example, this
    turmoil led us to restructure the US$2.75 billion
    commitment announced in June 2007 to the sum of
    US$1.75 billion under the City of Dreams Project Facility;
    investors and lenders perception of, and demand for,
    debt and equity securities of gaming, leisure and hospitality
    companies, as well as the offerings of competing financing and
    investment opportunities in Macau by our competitors;
    whether it is necessary to obtain further credit support or
    other assurances from Melco and Crown on terms and conditions
    and in amounts that are commercially acceptable to them;
    MPBL Gamings ability to obtain consent from the Macau
    government as required under our subconcession contract;
    conditions of the U.S., Macau, Hong Kong, and other capital
    markets in which we may seek to raise funds;
    our future results of operations, financial condition and cash
    flows;
    requirements for approval for certain transactions from Macau,
    Hong Kong or Australian authorities, the Hong Kong Stock
    Exchange, the Nasdaq, our principal lenders
    and/or
    shareholders of Melco
    and/or
    Crown, among others;
    Macau governmental regulation of gaming in Macau; and
    economic, political and other conditions in Macau, China and the
    Asian region.    
    complete the development of our existing projects or acquire and
    develop new projects;
    pay the land premium for our sites;
    acquire necessary rights, assets or businesses;
    expand our operations in Macau;
    hire, train and retain employees;
    market our programs, services and products; or
    respond to competitive pressures or unanticipated funding
    requirements.   10




---



##### Table of Contents



Servicing
    the debt of our subsidiaries requires a significant amount of
    cash, and our subsidiaries may not generate a sufficient level
    of cash flow from their businesses to make scheduled payments on
    their debt.
    Even
    if our development projects are completed as planned, they may
    not be financially successful, which would limit our cash flow
    and would adversely affect our operations and our ability to
    repay our debt.
    Risks
    Relating to the Completion and Operation of Our
    Projects
  For
    the City of Dreams project, we are directly negotiating and
    entering into contracts with all our construction contractors
    and vendors, which may increase the risk of delay and cost
    overruns.
    Our
    insurance coverage may not be adequate to cover all losses that
    we may suffer from our projects. In addition, our insurance
    costs may increase and we may not be able to obtain the same
    insurance coverage in the future.
     11




---



##### Table of Contents



Construction
    at our projects is subject to hazards that may cause personal
    injury or loss of life, thereby subjecting us to liabilities and
    possible losses, which may not be covered by
    insurance.
    We may
    encounter all of the risks associated with the development and
    construction of the Crown Macau project in the development and
    construction of the City of Dreams and the Macau peninsula
    projects.
    We are
    developing City of Dreams on land for which we have not yet been
    granted a formal concession by the Macau government. If we do
    not obtain a land concession, we could forfeit all or a part of
    our investment in the site and the design and construction of
    City of Dreams and would not be able to open and operate that
    facility as planned.
   12




---



##### Table of Contents



Simultaneous
    planning, design, construction and development of our two major
    projects may stretch our management time and resources, which
    could lead to delays, increased costs and other inefficiencies
    in the development of one or more of our projects.
    We
    will need to recruit a substantial number of new employees
    before each of our projects can open and competition may limit
    our ability to attract qualified management and
    personnel.
    Our
    contractors may face difficulties in finding sufficient labor at
    acceptable cost, which could cause delays and increase
    construction costs of our projects.
   13




---



##### Table of Contents



Our
    business depends substantially on the continuing efforts of our
    senior management, and our business may be severely disrupted if
    we lose their services or their other responsibilities cause
    them to be unable to devote sufficient time and attention to our
    company.
    Because
    we will depend upon a limited number of properties for a
    substantial portion of our cash flow, we will be subject to
    greater risks than a gaming company with more operating
    properties.
    Risks
    Relating to Our Operations in the Gaming Industry in
    Macau
  Because
    our operations will face intense competition in Macau and
    elsewhere in Asia, we may not be able to compete successfully
    and we may lose or be unable to gain market share.
      Rule 13d-3
  U.S.-based
 14




---



##### Table of Contents



Gaming
    is a highly regulated industry in Macau and adverse changes or
    developments in gaming laws or regulations could be difficult to
    comply with or significantly increase our costs, which could
    cause our projects to be unsuccessful.
       15




---



##### Table of Contents



Under
    MPBL Gamings subconcession, the Macau government may
    terminate the subconcession under certain circumstances without
    compensation to MPBL Gaming, which would prevent it from
    operating casino gaming facilities in Macau and could result in
    defaults under our indebtedness and a partial or complete loss
    of our investments in our projects.
           16




---



##### Table of Contents



The
    Macau government could grant additional rights to conduct gaming
    in the future, which could significantly increase the already
    intense competition in Macau and cause us to lose or be unable
    to gain market share.
    MPBL
    Gamings subconcession contract expires in 2022 and if we
    were unable to secure an extension of its subconcession in 2022
    or if the Macau government were to exercise its redemption right
    in 2017, we would be unable to operate casino gaming in
    Macau.
   17




---



##### Table of Contents



While
    MPBL Gaming will not initially be required to pay corporate
    income taxes on income from gaming operations under the
    subconcession, this tax exemption will expire in 2011, and it
    may not be extended.
      We
    extend credit to a portion of our customers, and we may not be
    able to collect gaming receivables from our credit
    customers.
     18




---



##### Table of Contents



Our
    business may face a higher level of volatility due to our focus
    on the VIP and premium mass market segment of the gaming
    market.
    We
    depend upon gaming junket operators for a portion of our gaming
    revenue and if we are unable to establish, maintain and increase
    the number of successful relationships with junket operators,
    our ability to attract high-end patrons may be adversely
    affected. If we are unable to ensure high standards of probity
    and integrity in the junket operators with whom we are
    associated, our reputation may suffer or we may be subject to
    sanctions, including the loss of MPBL Gamings
    subconcession.
      We are
    dependent on the reputation and integrity of the parties with
    whom we engage in business activities and we cannot assure you
    that these parties will always maintain high standards or
    suitability throughout the term of our association with them.
    Failure to maintain such high standards or suitability may cause
    us and our shareholders to suffer harm to our and the
    shareholders reputation, as well as impaired relationships
    with, and possibly sanctions from, gaming
    regulators.
   19




---



##### Table of Contents



The
    recently completed consolidation of junket operations under Ama
    International Limited, or Ama, has resulted in a significant
    proportion of our business becoming consolidated under one
    commercial arrangement, and has introduced into Macau the
    concept of a junket aggregator, either of which could have an
    adverse impact on our future prospects.
    We
    cannot assure you that anti-money laundering policies that we
    have implemented, and compliance with applicable anti-money
    laundering laws, will be effective to prevent our casino
    operations from being exploited for money laundering
    purposes.
    If
    Macaus transportation infrastructure does not adequately
    support the development of Macaus gaming and leisure
    industry, visitation to Macau may not increase as currently
    expected, which may cause our projects to be
    unsuccessful.
    Risks
    Relating to Our Indebtedness
  Our
    current, projected and potential future indebtedness could
    impair our financial condition, which could further exacerbate
    the risks associated with our significant
    leverage.
    
    approximately US$1.75 billion under the City of Dreams
    Project Facility primarily for the development and construction
    of City of Dreams, of which an amount equivalent to
    US$500 million has been drawn down as of December 31,
    2007;
    financing for a significant portion of the costs of developing
    the Macau peninsula site in an amount which is as yet
    undetermined; and
    financing for a significant portion of the costs of developing
    an apartment hotel complex at the City of Dreams site, in an
    amount which is as yet undetermined. 20




---



##### Table of Contents




    increase our vulnerability to general adverse economic and
    industry conditions;
    impair our ability to obtain additional financing in the future
    for working capital needs, capital expenditures, acquisitions or
    general corporate purposes;
    require us to dedicate a significant portion of our cash flow
    from operations to the payment of principal and interest on our
    debt, which would reduce the funds available to us for our
    operations;
    limit our flexibility in planning for, or reacting to, changes
    in our business and the industry in which we operate;
    subject us to higher interest expense in the event of increases
    in interest rates to the extent a portion of our debt will bear
    interest at variable rates;
    cause us to incur additional expenses by hedging interest rate
    exposures of our debt and exposure to hedging
    counterparties failure to pay under such hedging
    arrangements, which would reduce the funds available for us for
    our operations; and
    in the event we or one of our subsidiaries were to default,
    result in the loss of all or a substantial portion of our and
    our subsidiaries assets, over which our lenders have taken
    or will take security.  We
    currently do not generate sufficient cash flow to service our
    existing and projected indebtedness and we may not be able to
    generate sufficient cash flow to meet our debt service
    obligations because our ability to generate cash depends on many
    factors beyond our control.
    The
    terms of our and our subsidiaries indebtedness may
    restrict our current and future operations and harm our ability
    to complete our projects and grow our business operations to
    compete successfully against our competitors.
    
    incur additional debt, including guarantees;
    create security or liens;
    dispose of assets;
    make certain acquisitions and investments; 21




---



##### Table of Contents




    pay dividends, including to us, during the construction of the
    City of Dreams project;
    make other restricted payments or apply revenues earned in one
    part of our operations to fund development costs or cover
    operating losses in another part of our operations;
    enter into sale and leaseback transactions;
    engage in new businesses;
    issue preferred stock; and
    enter into transactions with shareholders and affiliates.    
    maximum capital expenditures test;
    minimum interest and debt service coverage ratios; and
    a maximum leverage ratio.    Draw
    down of advances under our debt facilities involve satisfaction
    of extensive conditions precedent and our failure to satisfy
    such conditions precedent will result in our inability to access
    loan advances under such facilities. We do not guarantee that we
    are able to satisfy all conditions precedent under our current
    or future debt facilities.
    Our
    failure to comply with the covenants contained in our or our
    subsidiaries indebtedness, including failure as a result
    of events beyond our control, could result in an event of
    default that could materially and adversely affect our cash
    flow, operating results and our financial
    condition.
   22




---



##### Table of Contents



Current
    turmoil in the credit markets may affect our ability to maintain
    current financing or obtain future financing which could result
    in delays in our project development schedule which could impact
    on our ability to generate revenue from present and future
    projects.
    Risks
    Relating to Our Business and to Operating in Macau
  Conducting
    business in Macau has certain political and economic risks that
    may lead to significant volatility and have a material adverse
    effect on our results of operations.
    
    changes in Macaus and Chinas political, economic and
    social conditions;
    changes in policies of the government or changes in laws and
    regulations, or in the interpretation or enforcement of these
    laws and regulations;
    changes in foreign exchange regulations;
    measures that may be introduced to control inflation, such as
    interest rate increases; and
    changes in the rate or method of taxation.     23




---



##### Table of Contents



Because
    we depend upon our properties in one market for all of our cash
    flow, we will be subject to greater risks than a gaming company
    that operates in more markets.
    
    dependence on the gaming and leisure market in Macau and limited
    diversification of our businesses and sources of revenue;
    a decline in economic, competitive and political conditions in
    Macau or generally in Asia;
    inaccessibility to Macau due to inclement weather, road
    construction or closure of primary access routes;
    a decline in air or ferry passenger traffic to Macau due to
    higher ticket costs, fears concerning travel or otherwise;
    changes in Macau governmental laws and regulations, or
    interpretations thereof, including gaming laws and regulations;
    natural and other disasters, including typhoons, outbreaks of
    infectious diseases or terrorism, affecting Macau;
    that the number of visitors to Macau does not increase at the
    rate that we have expected; and
    a decrease in gaming activities at our properties.    Our
    gaming operations could be adversely affected by restrictions on
    the export of the Renminbi and limitations of the Pataca
    exchange markets.
   24




---



##### Table of Contents



Terrorism
    and the uncertainty of war, economic downturns and other factors
    affecting discretionary consumer spending and leisure travel may
    reduce visitation to Macau and harm our operating
    results.
  and/or
  An
    outbreak of the highly pathogenic avian influenza caused by the
    H5N1 virus (avian flu or bird flu),
    Severe Acute Respiratory Syndrome (SARS) or other
    contagious disease may have an adverse effect on the economies
    of certain Asian countries and may adversely affect our results
    of operations.
    Macau
    is susceptible to severe typhoons that may disrupt our
    operations.
    Any
    fluctuation in the value of the H.K. dollar, U.S. dollar or
    Pataca may adversely affect our expenses and
    profitability.
   25




---



##### Table of Contents



Contract
    Parties not securing Adequate Financing
  and/or
  Risks
    Relating to Our Corporate Structure and Ownership
  Our
    existing shareholders will have a substantial influence over us
    and their interests in our business may be different than
    yours.
  Form 20-F.
     26




---



##### Table of Contents



Melco
    and Crown may pursue additional casino projects in Asia, which,
    along with their current operations, may compete with our
    projects in Macau which may have adverse consequences to us and
    the interests of our minority shareholders.
    Business
    conducted through joint ventures involves certain
    risks.
    Changes
    in our share ownership, including a change of control or a
    change in the amounts or relative percentages of our shares
    owned by Melco and Crown, could result in our inability to draw
    loans or events of default under our indebtedness.
    We are
    a holding company and our only material sources of cash are and
    are expected to be dividends, distributions and payments under
    shareholder loans from our subsidiaries.
   27




---



##### Table of Contents



Crowns
    investment in our company is subject to Australian regulatory
    review, and if Australian regulators were to find that we, Crown
    or Melco failed to comply with certain regulatory requirements
    and standards, then Crown may be required to withdraw from the
    joint venture.
         28




---



##### Table of Contents



Risks
    Relating to the ADSs
  The
    trading price of our ADSs has been volatile and may continue to
    be volatile regardless of our operating
    performance.
    
    uncertainties or delays relating to the financing, completion
    and successful operation of our projects;
    developments in the Macau market or other Asian gaming markets,
    including the announcement or completion of major new projects
    by our competitors;
    regulatory developments affecting us or our competitors;
    actual or anticipated fluctuations in our quarterly operating
    results;
    changes in financial estimates by securities research analysts;
    changes in the economic performance or market valuations of
    other gaming and leisure industry companies;
    addition or departure of our executive officers and key
    personnel;
    fluctuations in the exchange rates between the U.S. dollar,
    Hong Kong dollar, Pataca and Renminbi;
    release or expiry of
    lock-up or
    other transfer restrictions on our outstanding ordinary shares
    or ADSs; and
    sales or perceived sales of additional ordinary shares or ADSs.    We
    currently do not intend to pay dividends, and we cannot assure
    you that we will make dividend payments in the
    future.
    Substantial
    future sales or perceived sales of our ADSs in the public market
    could cause the price of our ADSs to decline.
   29




---



##### Table of Contents



Form F-3
    Holders
    of ADSs have fewer rights than shareholders and must act through
    the depositary to exercise those rights.
    You
    may be subject to limitations on transfers of your
    ADSs.
    Your
    right to participate in any future rights offerings may be
    limited, which may cause dilution to your holdings and you may
    not receive cash dividends if it is unlawful or impractical to
    make them available to you.
   30




---



##### Table of Contents



We are
    a Cayman Islands company and, because judicial precedent
    regarding the rights of shareholders is more limited under
    Cayman Islands law than that under U.S. law, you may have less
    protection for your shareholder rights than you would under U.S.
    law.
      You
    may have difficulty enforcing judgments obtained against
    us.
    We may
    be treated as a passive foreign investment company, which could
    result in adverse United States federal income tax consequences
    to U.S. Holders.
   31




---



##### Table of Contents



ITEM 4.  INFORMATION
    ON THE COMPANY
  A. HISTORY
    AND DEVELOPMENT OF THE COMPANY
  50/50
  852-2598-3600 852-2537-3618.
      Form 20-F.
  B. BUSINESS
    OVERVIEW
  Overview
  50/50
   32




---



##### Table of Contents



Operations
  Crown
    Macau
        Mocha
    Clubs
     33




---



##### Table of Contents



Development
    Projects
  City
    of Dreams
          Form 20-F
  
    The Casino.  We plan to offer a casino and
    gaming area of approximately 420,000 sq. ft. housing
    approximately 550 gaming tables and approximately 1,500 gaming
    machines with potential for future expansion. We target the
    casino to be substantially completed as part of the first phase.
    The Hotels.  City of Dreams is planned to
    include three full service luxury hotels and an apartment hotel
    complex with a total of approximately 2,200 rooms, consisting
    of: (1) a luxury premium hotel designed with the aim of
    exceeding the average five-star hotel in Macau, to be operated
    under the Crown Towers brand by us with approximately 300 rooms,
    suites and villas; (2) a themed hotel to be operated under
    the Hard Rock brand with approximately 300 rooms and suites;
    (3) a twin-tower hotel to be operated under the Grand Hyatt
    brand with approximately 800 rooms and suites; and (4) an
    800-unit
    luxury apartment hotel complex, planned for development as part
    of the third phase. This development is subject to the
    availability of additional financing, the Macau
    governments approval and the approval of our lenders under
    our existing and any future debt facilities. We expect to market
    the apartment hotel in advance of project completion, subject to
    compliance with legal and regulatory provisions.
    Performance Theatre.  A wet stage performance
    theatre offering 2,000 seats is included in the plan of
    City of Dreams. The performance theatre, which is being designed
    by the award winning Pei Partnership Architects according to the
    specifications of Dragone, is a purpose-built theatre catering
    to the preferences of the Asian mass market. The performance
    theatre is expected to offer a brand new live stage show
    production created exclusively for us by Dragone, the
    co-producer and creator of Celine Dions A New
    Day show. The artistic director and founder of Dragone was
    formerly the creator and director of several Cirque du Soleil
    shows. 34




---



##### Table of Contents




    Retail Area.  Our plan includes a retail area
    of approximately 175,000 sq. ft. The retail area is
    designed to feature a wide range of luxury retailers which is
    designed to cater to the needs of residential guests and to
    attract other visitors to the resort. We currently expect to
    complete a majority of the retail space as part of the first
    phase.
    Food and Beverage.  We plan to position City of
    Dreams as one of the leading destinations for food and beverage
    in Cotai by offering an extensive range of high-quality food and
    beverage facilities. City of Dreams is planned to include over
    20 mid- to high-end restaurants plus a range of other dining
    outlets offering a variety of cuisines and dining styles to
    service both our gaming customers as well as to attract other
    customers from competing Macau properties as well as nearby Hong
    Kong and Guangzhou, China. We currently expect to complete
    significant portions of the food and beverage outlets as part of
    the first phase.
    Entertainment Venues.  City of Dreams is
    planned to feature a variety of recreational facilities designed
    to attract customers to the resort. The resort is also planned
    to feature a range of concept bars and night clubs and a live
    performance venue that is expected to accommodate up to
    1,500 people.
    Conference Rooms and Ballrooms.  We plan to
    build approximately 100,000 sq. ft. of high quality
    conference, banqueting and ballroom facilities, featuring some
    of the latest audio and visual equipment. We will aim to make
    these facilities the venue of choice in Macau for high-end
    banqueting and corporate hospitality. These facilities will be
    located within the twin-tower Grand Hyatt hotel and are planned
    to be completed as part of phase two.           35




---



##### Table of Contents



Macau
    peninsula Site
    Macau
    Studio City Project
    Our
    Objective and Strategies
    Develop
    a Targeted Product Portfolio of Well-recognized Gaming
    Brands
      Utilize
    MPBL Gamings Subconcession to Maximize Our Business and
    Revenue Potential
   36




---



##### Table of Contents



Develop
    a Comprehensive Marketing Program
      
    creating a cross-platform sales and marketing department to
    promote the Crown Macau, the City of Dreams and the Mocha brands
    to potential customers throughout Asia;
    utilizing special product offers, special events, tournaments
    and promotions to build and maintain relationships with our
    guests, increase repeat visits and help fill capacity during
    lower-demand periods;
    refining our own customer loyalty programs to build a
    significant database of repeat customers, which we closely
    modeled on Crowns successful Crown Club
    program; and
    implementing complimentary incentive programs and commission
    based programs with selected junket operators to attract
    high-end customers.  Focus
    on Building First Class Facilities
    Leverage
    the Experiences and Resources of Our Founders
    Our
    Properties
   37




---



##### Table of Contents



Crown
    Macau
        Mocha
    GamingMocha Club

Opening Date

Location

Area(in sq. ft.)Royal

September 2003

Lobby of Hotel Royal


8,500Kingsway

April 2004

G/F, Kingsway Commercial Centre


6,100TP Square

March 2005

G/F and 1/F, Hotel Taipa Square


4,560Sintra

November 2005

G/F and 1/F, Hotel Sintra


5,110Hotel Taipa

January 2006

G/F of Hotel Taipa


6,100Marina Plaza

December 2006

1/F & 2/F Marina Plaza


12,500Mocha Square

October 2007

1/F, 2/F and 3/F of Mocha Square


6,000Total






48,870         City
    of Dreams
   38




---



##### Table of Contents



Macau
    peninsula Project
    Other
    Premises
    Advertising
    and Marketing
    Competition
     39




---



##### Table of Contents



SJM.
  Wynn Macau.
  Galaxy.
  Las Vegas Sands.
  MGM Grand Paradise Limited.
  Cruise Ships.
  Other Asian Destinations. one-hour
 40




---



##### Table of Contents



Intellectual
    Property
    Employees
    As of December 31,2005

2006

2007Number of

Percentage

Number of

Percentage

Number of

PercentageEmployees

of Total

Employees

of Total

Employees

of TotalMocha


401



97.3
%


459



76.6
%


545



11.1
%Crown Macau and City of
    Dreams(1)


11



2.7



134



22.4



4,330



87.9
%Corporate










6



1.0



53



1.0
%Total


412



100
%


599



100
%


4,928



100
%     (1)
    
    Includes project management and marketing staff.   41




---



##### Table of Contents



Legal and
    Administrative Proceedings
    GAMING
    REGULATIONS
      
    the prevention of unsavory or unsuitable persons from having a
    direct or indirect involvement with gaming at any time or in any
    capacity;
    the adequate operation and exploitation of games of fortune and
    chance;
    the fair and honest operation and exploitation of games of
    fortune and chance free of criminal influence;
    the protection of the Macau SAR interest in receiving the taxes
    resulting from the gaming operation; and
    the development of the tourism industry, social stability and
    economic development of the Macau SAR.   42




---



##### Table of Contents




    pay that person any dividend or interest upon our shares;
    allow that person to exercise, directly or indirectly, any
    voting right conferred through shares held by that person;
    pay remuneration in any form to that person for services
    rendered or otherwise; or
    fail to pursue all lawful efforts to require that unsuitable
    person to relinquish its shares.            
    a percentage of the gross revenues received; or
    the number and type of gaming devices operated.         43




---



##### Table of Contents



Anti-Money
    Laundering Regulations in Macau
      
    identify any customer or transaction where there is a sign of
    money laundering or financing of terrorism or which involves
    significant sums of money in the context of the transaction,
    even if any sign of money laundering is absent;
    refuse to deal with any of our customers who fail to provide any
    information requested by us;
    keep records following the identification of a customer for a
    period of five years;
    notify the Finance Information Bureau if there is any sign of
    money laundering or financing of terrorism; and
    cooperate with the Macau government by providing all required
    information and documentation requested in relation to
    anti-money laundering activities.      Subconcession
    Contract
    Subconcession Term.
  Development of Gaming Projects/Financial
    Obligations.
 44




---



##### Table of Contents



Payments.
  Termination Rights.
  
    the operation of gaming without permission or operation of
    business which does not fall within the business scope of the
    subconcession;
    abandonment of approved business or suspension of operations of
    our gaming business in Macau without reasonable grounds for more
    than seven consecutive days or more than 14 non-consecutive days
    within one calendar year;
    transfer of all or part of MPBL Gamings operation in Macau
    in violation of the relevant laws and administrative regulations
    governing the operation of games of fortune or chance and other
    casino games in Macau and without Macau government approval;
    failure to pay taxes, premiums, levies or other amounts payable
    to the Macau government;
    refusal or failure to resume operations following the temporary
    assumption of operations by the Macau government;
    repeated opposition to the supervision and inspection by the
    Macau government and failure to comply with decisions and
    recommendations of the Macau government, especially those of the
    DICJ, applicable to us;
    failure to provide or supplement the guarantee deposit or the
    guarantees specified in the subconcession within the prescribed
    period;
    bankruptcy or insolvency of MPBL Gaming;
    fraudulent activity harming the public interest;
    serious and repeated violation of the applicable rules for
    carrying out casino games of chance or games of other forms or
    damage to the fairness of casino games of chance or games of
    other forms;
    systematic non-compliance with the Macau Gaming Laws basic
    obligations;
    the grant to any other person of any managing power over the
    gaming business of MPBL Gaming or the grant of a subconcession
    or entering into any agreement to the same effect; or
    failure by a controlling shareholder in MPBL Gaming to dispose
    of its interest in MPBL Gaming, within 90 days, following
    notice from the gaming authorities of another jurisdiction in
    which such controlling shareholder is licensed to operate casino
    games of chance to the effect that such controlling shareholder
    no longer wishes to own shares in MPBL Gaming.   45




---



##### Table of Contents



Ownership and Capitalization.
  Others.
  Tax
            Dividend
    Distribution
  Restrictions on Distributions.
 46




---



##### Table of Contents



Distribution of Profits.
  C. ORGANIZATIONAL
    STRUCTURE
  Current
    Corporate Structure
           47




---



##### Table of Contents



(1)
    
    In respect of shares of each Macau subsidiary shown above, the
    shares are owned as to 96% by MPBL Gaming and 4% by Melco PBL
    Nominee Two Limited, except for the subsidiary referred to in
    footnote 2 below.(2)
    
    The shares of this company are owned as to 99.98% by MPBL
    Gaming, 0.01% by Melco PBL Nominee Three Limited and 0.01% by
    Melco PBL Nominee Two Limited. 48




---



##### Table of Contents



D. PROPERTY,
    PLANT AND EQUIPMENT    ITEM 4A.  UNRESOLVED
    STAFF COMMENTS
    ITEM 5.  OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS
  The following discussion should be read in conjunction with,
    and is qualified in its entirety by, the audited consolidated
    financial statements and the notes thereto in this Annual Report
    on
    Form 20-F.
    Certain statements in this Operating and Financial Review
    and Prospects are forward-looking statements. See
    Special Note Regarding Forward-Looking Statements
    regarding these statements.
    Overview
   A. OPERATING
    RESULTS  Operations
  Crown
    Macau
      Mocha
    Development
    Projects
  City of
    Dreams
   49




---



##### Table of Contents



The Macau
    Peninsula Site
    The Macau
    Studio City Project
    Summary
    of Financial Results
    For the Years Ended December 31,2005

2006

2007(In thousands of US$)Net Revenue

$
17,328


$
36,101


$
358,613Operating costs and expenses


(21,050
)


(93,754
)


(554,430
)Operating loss


(3,722
)


(57,653
)


(195,817
)Net loss

$
(3,259
)

$
(73,479
)

$
(178,151
)     
    Prior to September 2006, we did not hold a concession or
    subconcession to operate gaming activities in Macau and operated
    under a services agreement with SJM.
    On September 8, 2006, we acquired a Macau subconcession for
    consideration of $900 million.
    From September 2006 up until the opening of Crown Macau in May
    2007, Mocha Clubs was our sole operating business.
    On May 12, 2007, Crown Macau opened and was fully
    operational by July 14, 2007.    Key
    Performance Indicators (KPIs)
      
    Table games win:  the amount of wagers won net
    of wagers lost that is retained and recorded as casino revenue.
    Drop:  the amount of cash and net markers
    issued that are deposited in a gaming tables drop box. 50




---



##### Table of Contents




    Turnover:  the sum of all wagers.
    Gaming machine handle (volume):  the gross
    amount of wagers placed in gaming machines.
    Win percentage  gaming
    machines:  actual win expressed as a percentage of
    gaming machine handle.
    Hold percentage:  the amount of win (calculated
    before discounts and commissions) as a percentage of drop.
    Expected hold percentage:  casino win based
    upon our mix of games as a percentage of drop assuming
    theoretical house advantage is achieved.    
    Rolling chip volume:  the amount of
    non-negotiable gaming chips wagered and lost by the VIP market
    segment.
    Rolling chip performance indicator:  VIP table
    games win as a percentage of rolling chip volume.
    Non rolling chip volume:  the amount of table
    games drop in the mass market segment.
    Non rolling chip performance indicator:  Mass
    market table games win as a percentage of non-rolling chip
    volume.        
    Average Daily Rate
    (ADR):  calculated by dividing total
    room revenue (less service charges, if any) by total rooms
    occupied, i.e. average price of occupied rooms per day.
    Revenue per Available Room
    (REVPAR):  calculated by dividing
    total room revenue (less service charges, if any) by total rooms
    available, thereby representing a summary of hotel average daily
    room rates and occupancy.
    Hotel occupancy rate:  the average percentage
    of available hotel rooms occupied during a period.         51




---



##### Table of Contents



Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
  Revenues
            Operating
    costs and expenses
    Casino.
  Food, beverage and others.
  Rooms.
  General and administrative.
 52




---



##### Table of Contents



Selling and marketing.
  Pre-opening costs.
  Amortization of gaming
    subconcession.
  Amortization of land use rights.
  Depreciation and amortization.
  Non-operating
    income (expenses)
            Income
    tax credit
    Minority
    interest
   53




---



##### Table of Contents



Net
    loss
    Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
  Revenues
  ramp-up
  Operating
    costs and expenses
    Casino.
  Food, beverage and others.
  General and administrative.
  Selling and marketing.
  Pre-opening costs.
 54




---



##### Table of Contents



Amortization of gaming
    subconcession.
  Amortization of land use rights.
  Depreciation and amortization.
  Impairment loss recognized on slot lounge services
    agreements.
  Non-operating
    income (expenses)
          Income
    tax credit
    Minority
    interest
    Net
    loss
    Critical
    Accounting Policies and Estimates
   55




---



##### Table of Contents



Valuation
    of Long-Lived Assets, including Goodwill and Purchased
    Intangible Assets
      Impairment
    of Long-Lived Assets (Other Than Goodwill)
    Business
    Combinations
   56




---



##### Table of Contents



Share-based
    Compensation
    Revenue
    Recognition
            01-9, EITF 01-9
    Accounts
    Receivable and Credit Risk
     57




---



##### Table of Contents



Income
    Tax
      Accounting
    for Derivative Instruments and Hedging Activities
    Recent
    Changes in Accounting Standards
    instrument-by-instrument
 58




---



##### Table of Contents



B. LIQUIDITY
    AND CAPITAL RESOURCES    For the Year Ended December 31,2005


2006


2007(In thousands of US$)Net cash provided by (used in) operating activities

$
4,284


$
(20,237
)

$
151,138Net cash used in investing activities


(181,258
)


(38,645
)


(972,620
)Net cash provided by financing activities


191,206



623,109



1,072,905Net increase in cash and cash equivalents


14,232



564,227



251,423Cash and cash equivalents at beginning of year


5,537



19,769



583,996Cash and cash equivalents at end of year

$
19,769


$
583,996


$
835,419   Operating
    activities
    Investing
    activities
       59




---



##### Table of Contents



Financing
    activities
  Proceeds from Our Offerings.
  Shareholder Loans and Contributions. 3-months
    MPBL Crown Macau Developments Project
    Facility.
  City of Dreams Project Facility.
    Description
    of Our Indebtedness
  City
    of Dreams Project Facility
    
    a portion of the net proceeds from our initial offering and our
    second public offering in December 2006 and November 2007
    respectively;
    borrowings under the US$1.75 billion City of Dreams Project
    Facility; and
    cashflow generated from the operations of our existing
    businesses.  Drawdown
     60




---



##### Table of Contents



Repayment
        Accounts
    Interest
    and Fees
   61




---



##### Table of Contents



Melco and
    Crown Support
    Security
    
    a first priority mortgage over all land and all present and
    future buildings on and fixtures to such land, and an assignment
    of land use rights under land concession agreements or
    equivalent held by the relevant entities in the Borrowing Group;
    the letters of credit described above in
     Description of Our Indebtedness 
    City of Dreams Project Facility  Melco and Crown
    Support;
    charges over the bank accounts in respect of the Borrowing
    Group, subject to certain exceptions including the capital
    contribution account for the holding or payment of equity for
    Crown Macau and cash deposits of Melco Crown (COD) Developments
    set aside as guarantee money in favor of the Macau government;
    assignment of the Borrowing Groups rights under certain
    insurance policies;
    first priority security over the Borrowing Groups
    chattels, receivables and other assets which are not subject to
    any security under any other security documentation;
    pledge over equipment and tools used in the gaming business by
    MPBL Gaming; and
    first priority charges over the issued share capital of the
    Borrowing Group.  Covenants
    
    create or permit to subsist further charge or any form of
    encumbrance over its assets, property or revenues except as
    permitted under the City of Dreams Project Facility;
    sell, transfer or dispose of any of its assets unless such sale
    is conducted on an arms length basis at a fair market
    value permitted in accordance with the terms of the City of
    Dreams Project Facility and the proceeds from the sale shall be
    credited to the relevant accounts over which the lenders have a
    first priority charge on; 62




---



##### Table of Contents




    make any payment of fees under any agreement with Melco or Crown
    (or their affiliates) other than fees approved by the Majority
    Lenders or, after a certain date, in accordance with the
    waterfall, or enter into agreements with Melco or Crown or their
    affiliates except in certain limited circumstances;
    make any loan or guarantee indebtedness except for certain
    identified indebtedness and guarantees permitted;
    create any subsidiaries except as permitted under the City of
    Dreams Project Facility, such as those necessary for completion
    and operation of City of Dreams; or
    make investments other than within agreed upon limitations.    Events of
    Default
  and/or
      Sources
    and Uses
      C. RESEARCH
    AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
   63




---



##### Table of Contents



D. TREND
    INFORMATION
  Form 20-F,
  E. OFF-BALANCE
    SHEET ARRANGEMENTS
      F. TABULAR
    DISCLOSURE OF CONTRACTUAL OBLIGATIONS
    Payments Due by PeriodLess Than








More Than1 Year


1-3 Years


3-5 Years


5 Years


Total(In millions of US$)Contractual obligationsLong-term debt obligations:Loans from
    shareholders(1)

$



$
114.6


$



$



$
114.6Other long-term
    liabilities(2)






30.0



215.1



255.1



500.2Capital (finance) lease
    obligations:(3)


















Operating lease obligations:Rent payable for Crown Macau
    land(4)


0.2



0.3



0.3



3.1



3.9Rent payable for City of Dreams
    land(5)


0.4



1.3



1.8



18.1



21.6Leases for office space, VIP lounge, recruitment and training
    center, staff quarter and Mocha Clubs locations


9.7



15.7



14.6



25.8



65.8Other contractual commitments:Premium and interest for City of Dreams
    land(5)


45.9



34.0



33.9







113.8Construction, plant and equipment acquisition
    commitments(6)


378.5















378.5Buses and limousines services commitments


3.7



6.9



4.3







14.9Total

$
438.4


$
202.8


$
270.0


$
302.1


$
1,213.3     (1)
    
    Excludes the working capital loans provided by Melco and Crown,
    which had outstanding balances of US$96.9 million and
    US$1.6 million, respectively, as of December 31, 2006
    and 2007. As of December 31, 2006 and 2007, the balance of
    the outstanding term loan, from Melco and Crown amounts to
    approximately US$115.6 million and US$114.6 million,
    respectively, were repayable in May 2008 carrying interest at a 64




---



##### Table of Contents



floating rate equal to three months HIBOR. Subsequently in
    September 2007, the final maturity date was extended to May 2009.(2)
    
    Other long-term liabilities represents US$1.75 billion
    under the City of Dreams Project Facility and its draw down at
    September 2007 of approximately US$500.2 million. The loan
    matures in September, 2014 and is subject to quarterly
    amortization payments commencing in September 2010.(3)
    
    Capital lease obligations due within one year and after one year
    are US$6,000 and US$10,000, respectively, as of
    December 31, 2006. During the year ended December 31,
    2007, the capital lease obligations were fully repaid.(4)
    
    Annual rent payable is MOP 1,371,890 (US$171,200) and is
    adjusted every five years as agreed between the Macau government
    and Melco Crown (CM) Developments in accordance with the
    applicable market rates from time to time.(5)
    
    Melco Crown (COD) Developments was offered a grant of
    medium-term lease of 25 years for the City of Dreams by the
    Macau government in April 2005 which offer was preliminarily
    accepted by Melco Crown (COD) Developments on May 10, 2005.
    In February 2008 Melco Crown (COD) Developments and MPBL Gaming
    accepted the final terms of the land lease agreement. The final
    lease terms require us to pay a land premium of approximately
    MOP 842 million (US$105.1 million), of which
    MOP 300 million (US$37.4 million) has been paid
    upon our acceptance of the final terms and the remaining balance
    of MOP 542 million (US$67.7 million) is payable
    in nine equal semi-annual installments bearing interest at 5%
    per annum. We must also provide a guarantee deposit of
    MOP 3,399,750 (US$424,300), subject to adjustments in
    accordance with the relevant amount of rent payable during the
    year. The rent payable during the construction period is of
    MOP 3,399,750 (US$424,300) per year. The annual rent
    payable after completion of construction is MOP 7,236,350
    (US$903,000). The rent payable is adjusted every five years as
    agreed between the Macau Government and Melco Crown (COD)
    Developments and MPBL Gaming in accordance with the market rates
    from time to time.(6)
    
    The amount as of December 31, 2007 mainly represents the
    construction contract for the design and construction, plant and
    equipment acquisition of the COD Project of
    US$373.9 million. The balances include remaining payment
    obligation for Crown Macau Project and Mocha.  G. SAFE
    HARBOR
   65




---



##### Table of Contents



ITEM 6.  DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES  A. DIRECTORS
    AND SENIOR MANAGEMENT
  Directors
    and Executive Officers
  Form 20-F.
  Name

Age

Position/TitleLawrence (Yau Lung) Ho


31


Co-Chairman and Chief Executive OfficerJames D. Packer


40


Co-ChairmanJohn Wang


47


DirectorClarence Chung


45


DirectorJohn H. Alexander


56


DirectorRowen B. Craigie


52


DirectorThomas Jefferson Wu


35


Independent DirectorAlec Tsui


58


Independent DirectorDavid E. Elmslie


51


Independent DirectorRobert Mactier


43


Independent DirectorSimon Dewhurst


39


Executive Vice President and Chief Financial OfficerGarry Saunders


56


Executive Vice President and Chief Operating OfficerRichard Tsiang


47


Executive Vice President and Chief Development OfficerStephanie Cheung


45


General CounselNigel Dean


54


Group Internal Audit DirectorAkiko Takahashi


54


Group Human Resources DirectorGreg Hawkins


44


Chief Executive Officer of Crown MacauConstance (Ching Hui) Hsu


34


Chief Operating Officer of Mocha Clubs   Directors
  Mr. Lawrence (Yau Lung) Ho
  Mr. James D. Packer
 66




---



##### Table of Contents



Mr. John Wang
  Mr. Clarence (Yuk Man) Chung
  Mr. John H. Alexander editor-in-chief editor-in-chief The Sydney Morning Herald editor-in-chief The Australian Financial Review
  Mr. Rowen B. Craigie
  Mr. Thomas Jefferson Wu
  Mr. Alec Tsui
 67




---



##### Table of Contents



Mr. David E. Elmslie
  Mr. Robert W. Mactier
  Executive
    Officers
  Mr. Simon Dewhurst
 68




---



##### Table of Contents



Mr. Garry Saunders
  Mr. Richard Tsiang
  Ms. Stephanie Cheung U.S.-based U.S.-listed
  Mr. Nigel Dean
  Ms. Akiko Takahashi
 69




---



##### Table of Contents



Mr. Greg Hawkins
  Ms. Constance (Ching Hui) Hsu
  B. COMPENSATION
    OF DIRECTORS AND EXECUTIVE OFFICERS
      C. BOARD
    PRACTICES
  Composition
    of Board of Directors
   70




---



##### Table of Contents



Duties of
    Directors
      
    convening shareholders annual general meetings and
    reporting its work to shareholders at such meetings;
    declaring dividends and distributions;
    appointing officers and determining the term of office of
    officers;
    exercising the borrowing powers of our company and mortgaging
    the property of our company; and
    approving the transfer of shares of our company, including the
    registering of such shares in our share register.    Terms of
    Directors and Executive Officers
    Committees
    of the Board of Directors
    Audit
    Committee
      
    the integrity of the financial statements of our company;
    the qualifications and independence of our independent auditors;
    the performance of our independent auditors;
    the integrity of our systems of internal accounting and
    financial controls;
    legal and regulatory issues relating to the financial statements
    of our company, including the oversight of the independent
    auditor, the review of the financial statements and related
    material, the internal audit process and the procedure for
    receiving complaints regarding accounting, internal accounting
    controls, auditing or other related matters; 71




---



##### Table of Contents




    the disclosure, in accordance with our relevant policies, of any
    material information regarding the quality or integrity of our
    financial statements, which is brought to its attention by our
    disclosure committee, which we expect to set up and will
    comprise certain members of our senior management; and
    the integrity and effectiveness of our internal audit function
    and risk management policies, procedures and practices.    
    selecting our independent auditors and pre-approving all
    auditing and non-auditing services permitted to be performed by
    our independent auditors;
    at least annually, obtaining a written report from our
    independent auditor describing matters relating to its
    independence;
    discussing with our independent auditor, among other things,
    issues regarding accounting and auditing principles and
    practices and the managements internal control report;
    approving related-party transactions, amounting to more than
    US$120,000 per transaction or series of transactions, which are
    brought to its attention;
    establishing and overseeing procedures for the handling of
    complaints and whistle blowing;
    deciding whether any material information regarding the quality
    or integrity of the Companys financial statements, which
    is brought to its attention by our disclosure committee, should
    be disclosed;
    approving the internal audit charter and annual audit plans;
    assessing and approving any policies and procedures to identify,
    accept, mitigate, allocate or otherwise manage various types of
    risks presented by management, and making recommendations with
    respect to our risk management process;
    together with our board, evaluating the performance of the audit
    committee;
    assessing the adequacy of its charter; and
    cooperating with the other board committees in any areas of
    overlapping responsibilities.  Compensation
    Committee
          
    in consultation with senior management, making recommendations
    on our general compensation philosophy and overseeing the
    development and implementation of our compensation programs;
    making recommendation to the board with respect to the
    compensation packages of our directors and approving the
    compensation package of our senior executive officers, including
    the chief executive officer; 72




---



##### Table of Contents




    overseeing our regulatory compliance with respect to
    compensation matters;
    together with the board, evaluating the performance of the
    compensation committee;
    assessing the adequacy of its charter; and
    cooperating with the other board committees in any areas of
    overlapping responsibilities.  Nominating
    and Corporate Governance Committee
      
    the identification of qualified candidates to become members and
    chairs of the board committees and to fill any such vacancies;
    oversight of our compliance with legal and regulatory
    requirements, in particular the legal and regulatory
    requirements of the Macau Special Administrative Region of the
    Peoples Republic of China (including the relevant laws
    related to the gaming industry), of the Cayman Islands, of the
    SEC and of the Nasdaq;
    the development and recommendation to our board of a set of
    corporate governance principles applicable to our
    company; and
    the disclosure, in accordance with our relevant policies, of any
    material information (other than that regarding the quality or
    integrity of our financial statements), which is brought to its
    attention by the disclosure committee.    
    identifying and recommending to the board nominees for election
    or re-election to the board committees, or for appointment to
    fill any such vacancy;
    developing a set of corporate governance principles and
    reviewing such principles at least annually;
    deciding whether any material information (other than that
    regarding the quality or integrity of our financial statements),
    which is brought to its attention by the disclosure committee,
    should be disclosed;
    together with the board, evaluating the performance of the
    committee;
    assessing the adequacy of its charter; and
    cooperating with the other board committees in any areas of
    overlapping responsibilities.  Interested
    Transactions
    Remuneration
    and Borrowing
   73




---



##### Table of Contents



Qualification
    Benefits
    Upon Termination
    Employment
    Agreements
         74




---



##### Table of Contents



D. EMPLOYEES
  Employees
    As of December 31,2005

2006

2007Number of

Percentage

Number of

Percentage

Number of

PercentageEmployees

of Total

Employees

of Total

Employees

of TotalMocha


401



97.3
%


459



76.6
%


545



11.1
%Crown Macau and City of
    Dreams(1)


11



2.7



134



22.4
%


4,330



87.9
%Corporate administrative offices










6



1.0
%


53



1.0
%Total


412



100.0
%


599



100.0
%


4,928



100.0
%     (1)
    
    Includes project management and marketing staff for the two
    projects.   E. SHARE
    OWNERSHIP    2006 Share
    Incentive Plan
        Types of Awards.
  
    options to purchase our ordinary shares; and
    restricted shares.  Plan Administration.
  Award Agreement.
 75




---



##### Table of Contents



Eligibility.
  Exercise Price and Term of Awards.
    Vesting Schedule.
  ITEM 7.  MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 A. MAJOR
    SHAREHOLDERS    Ordinary Shares Beneficially
    Owned(1)(2)Name

Number

%Melco Leisure and Entertainment Group
    Limited(2)(3)(4)


500,000,000



37.9PBL Asia Investments
    Limited(5)


500,000,000



37.9     (1)
    
    Beneficial ownership is determined in accordance with
    Rule 13d-3
    of the General Rules and Regulations under the Securities
    Exchange Act of 1934, as amended, and includes voting or
    investment power with respect to the securities. Melco and Crown
    continue to have a shareholders agreement relating to
    certain aspects of the voting and disposition of our ordinary
    shares held by them, and may accordingly constitute a
    group within the meaning of
    Rule 13d-3.
    See  Melco Crown Joint Venture. However,
    Melco and Crown each disclaim beneficial ownership of the shares
    of our company owned by the other.(2)
    
    Melco Leisure and Entertainment Group Limited is incorporated in
    the British Virgin Islands and is a wholly owned subsidiary of
    Melco. The address of Melco and Melco Leisure and Entertainment
    Group Limited is
    c/o The
    Penthouse, 38th Floor, The Centrium, 60 Wyndham Street, Central,
    Hong Kong. Melco is listed on the Main Board of the Hong Kong
    Stock Exchange.(3)
    
    Mr. Lawrence Ho, our Chairman and Chief Executive Officer
    and the Chairman, Chief Executive Officer and Managing Director
    of Melco, personally holds 7,232,612 ordinary shares of Melco,
    representing approximately 0.6% of Melcos ordinary shares
    outstanding as of March 15, 2008. In addition,
    115,509,024 shares are held by Lasting Legend Ltd., and
    288,532,606 shares are held by Better Joy Overseas Ltd.,
    both of which companies are owned by persons and trusts
    affiliated with Mr. Lawrence Ho. Therefore, we believe that
    for purposes of
    Rule 13d-3,
    Mr. Ho beneficially owns 411,274,242 ordinary shares of
    Melco, representing approximately 33.5% of Melcos ordinary
    shares outstanding as of March 15, 2008. This does not
    include 117,912,694 shares into which convertible notes
    held by Great Respect Limited, a company controlled by a
    discretionary trust formed for the benefit of members of the Ho
    family (including Mr. Ho and Dr. Ho), may be converted
    upon the issuance of the land certificate for the City of Dreams
    site. None of the beneficiaries of the trust control the voting
    or disposition of shares held by the trust or Great Respect
    Limited.(4)
    
    As of March 15, 2008, Dr. Stanley Ho personally held
    18,587,789 ordinary shares of Melco. In addition,
    3,127,107 shares of Melco are held by Lanceford Company
    Limited, a company 100% owned by Dr. Stanley 76




---



##### Table of Contents



Ho. Therefore, for purposes of
    Rule 13d-3,
    Dr. Ho may be deemed to beneficially own 21,714,896
    ordinary shares representing approximately 1.77% of Melcos
    outstanding shares. Dr. Hos beneficial ownership does
    not include 117,912,694 shares into which convertible notes
    held by Great Respect Limited may be converted upon the issuance
    of the land certificate for the City of Dreams site.  (5)
    
    PBL Asia Investments Limited is incorporated in the Cayman
    Islands and is 100% indirectly owned by Crown. The address of
    Crown is Level 3, Crown Towers, 8 Whiteman Street,
    Southbank, Victoria 3006, Australia. The address of PBL Asia
    Investments Limited is
    c/o Walkers
    SPV Limited, Walker House, Mary Street, George Town, Grand
    Cayman, Cayman Islands. Crown is listed on the Australian Stock
    Exchange. As of March 15, 2008, Crown was approximately
    37.92% owned by Consolidated Press Holdings Group, which is a
    group of companies owned by the Packer family.    Form 20-F.
  Melco
    Crown Joint Venture
      Original
    and Amended Shareholders Deed
    Memorandum
    of Agreement
   77




---



##### Table of Contents




    Melco and PBL are to share on a 50/50 basis all the economic
    value and benefits with respect to all gaming projects in the
    Territory;
    Melco and PBL are to appoint an equal number of members to our
    board of directors, with no casting vote in the event of a
    deadlock or other deadlock resolution provisions;
    All of the class A shares of MPBL Gaming, representing 28%
    of all the outstanding capital stock of MPBL Gaming, are to be
    owned by PBL Asia Limited (as to 18%) and the Managing Director
    of MPBL Macau (as to 10%), respectively. Mr. Lawrence Ho
    has been appointed to serve as the Managing Director of MPBL
    Gaming. The holders of the class A shares, as a class, will
    have the right to one vote per share, receive an aggregate
    annual dividend of MOP 1 and return of capital of an
    aggregate amount of MOP 1 on a wind up or liquidation, but
    will have no right to participate in the winding up or
    liquidation assets;
    All of the class B shares of MPBL Gaming, representing 72%
    of all the outstanding capital stock of MPBL Gaming are to be
    owned by MPBL Investments, our wholly owned subsidiary. As the
    holder of class B shares, we will have the right to one
    vote per share, receive the remaining distributable profits of
    MPBL Gaming after payment of dividends on the class A
    shares, to return of capital after payment on the class A
    shares on a winding up or liquidation of MPBL Gaming, and to
    participate in the winding up and liquidation assets of MPBL
    Gaming;
    The shares of Melco Crown (CM) Developments and Melco Crown
    (COD) Developments and the operating assets of Mocha would be
    transferred to MPBL Gaming;
    MPBL (Greater China) and Mocha are to be liquidated or remain
    dormant; and
    The provisions of the shareholders deed relating to the
    operation of our company are to apply to MPBL Gaming.  Shareholders
    Deed
    Exclusivity.
  Directors.
  Transfer of Shares.
 78




---



##### Table of Contents



Events of Default.
  Notice from a Regulatory Authority.
  Term.
   B. RELATED
    PARTY TRANSACTIONS    Transfer
    of Control of MPBL Gaming
      Mocha
    Clubs
   79




---



##### Table of Contents



Crown
    Macau
       80




---



##### Table of Contents



City of
    Dreams
        Other
    Transactions with Melco and Crown
  Working
    Capital Loans for the Crown Macau and the City of
    Dreams
    3-months
  3-months
 81




---



##### Table of Contents



Support
    Arrangements
    Transactions
    with Melco Crown Hospitality and Services Limited
    Service
    Fee paid to Publishing and Broadcasting (Finance)
    Limited
    Consultancy
    Fee paid to Crown Melbourne Limited
    Transactions
    with Elixir and iAsia
      Guarantees
    and Support
   82




---



##### Table of Contents



Rental
    of Mocha Club
    Rental
    of Office Space
    Transactions
    with Stargames Corporation Pty. Limited
    Transactions
    with Shun Tak China Travel Ship Management Limited
    Licensing
    Agreement
    Registration
    Rights
  Form F-3
  Other
    transactions with STDM
   83




---



##### Table of Contents



Letters
    of Confirmation
    Employment
    Agreements
    Equity
    Incentive Plan
    C. INTERESTS
    OF EXPERTS AND COUNSEL
   84




---



##### Table of Contents



ITEM 8.  FINANCIAL
    INFORMATION
 A. CONSOLIDATED
    STATEMENTS AND OTHER FINANCIAL INFORMATION    Legal and
    Administrative Proceedings
    Dividend
    Policy
        B. SIGNIFICANT
    CHANGES
  ITEM 9.  THE
    OFFER AND LISTING
  A. OFFERING
    AND LISTING DETAILS
     85




---



##### Table of Contents



Sales PriceHigh

LowQuarterly High and LowFourth Quarter 2006


23.55



18.88First Quarter 2007


22.34



14.12Second Quarter 2007


19.45



11.29Third Quarter 2007


17.00



9.95Forth Quarter 2007


19.09



11.34First Quarter 2008


13.23



8.20Monthly High and LowOctober 2007


19.09



15.11November 2007


15.45



12.22December 2007


14.60



11.34January 2008


12.72



8.20February 2008


13.23



10.80March 2008


12.98



11.00April 2008 (through April 1, 2008)


12.69



12.69   B. PLAN
    OF DISTRIBUTION
    C. MARKETS
    D. SELLING
    SHAREHOLDERS
    E. DILUTION
    F. EXPENSES
    OF THE ISSUE
    ITEM 10.  ADDITIONAL
    INFORMATION
  A. SHARE
    CAPITAL
   86




---



##### Table of Contents



B. MEMORANDUM
    AND ARTICLES OF ASSOCIATION
  No. 333-146780)
  C. MATERIAL
    CONTRACTS
  Form 20-F.
  D. EXCHANGE
    CONTROLS
  Foreign
    Currency Exchange
    E. TAXATION
  Cayman
    Islands Taxation
    Macau
    Taxation
    United
    States Federal Income Taxation
   87




---



##### Table of Contents




    banks;
    insurance companies;
    dealers in securities;
    certain former citizens or residents of the United States;
    persons that elect to mark to market;
    tax-exempt entities;
    real estate investment trusts;
    regulated investment companies;
    persons holding an ADS or ordinary share as part of a straddle,
    hedging, conversion or other integrated transaction;
    persons that actually or constructively own 10% or more of our
    voting stock; or
    persons who acquired ADSs or ordinary shares pursuant to the
    exercise of any employee share option or otherwise as
    compensation or pursuant to the conversion of another instrument.  non-U.S. tax
  U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS
    ABOUT THE APPLICATION OF U.S. FEDERAL TAX RULES TO
    THEIR PARTICULAR CIRCUMSTANCES AS WELL AS U.S. STATE AND
    LOCAL AND
    NON-U.S. TAX
    CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION
    OF THE ADSs OR ORDINARY SHARES.
    
    an individual who is a citizen or resident of the United States;
    a corporation organized under the laws of the United States, any
    State thereof or the District of Columbia;
    an estate whose income is subject to U.S. federal income
    taxation regardless of its source; or
    a trust that (1) is subject to the supervision of a court
    within the United States and the control of one or more
    U.S. persons or (2) has a valid election in effect
    under applicable U.S. Treasury regulations to be treated as
    a U.S. person.    Tax
    Treatment of ADSs
     88




---



##### Table of Contents



Dividends
    and Other Distributions on the ADSs or Ordinary
    Shares
      non-U.S. source
  Sale,
    Exchange or Other Disposition of the ADSs or Ordinary
    Shares
  24-month
  Passive
    Foreign Investment Company
     89




---



##### Table of Contents



non-U.S. corporation
  step-up
  de
    minimis non-U.S. securities
        Information
    Reporting and Backup Withholding
   90




---



##### Table of Contents



Form W-9.
   F. DIVIDENDS
    AND PAYING AGENTS   G. STATEMENT
    BY EXPERTS   H. DOCUMENTS
    ON DISPLAY  Form F-1,
  Form 20-F 1-800-SEC-0330.
     I. SUBSIDIARY
    INFORMATION   91




---



##### Table of Contents



ITEM 11.  QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    Interest
    Rates Risk
      Foreign
    Exchange Risk
    Construction
    Materials Risk
   92




---



##### Table of Contents



Credit
    Risk
    ITEM 12.  DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES
   PART II  ITEM 13.  DEFAULTS,
    DIVIDEND ARREARAGES AND DELINQUENCIES
    ITEM 14.  MATERIAL
    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
    AND USE OF PROCEEDS
    Use of
    Proceeds
  Form F-1 No. 333-146780),
  Form F-1 No. 333-139088),
  ITEM 15.  CONTROLS
    AND PROCEDURES
  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(3) 15d-15(3)
 93




---



##### Table of Contents



Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rules 13a-15(f) 15d-15(f)
                  Changes
    in Internal Controls Over Financial Reporting
     94




---



##### Table of Contents



ITEM 16A.  AUDIT
    COMMITTEE FINANCIAL EXPERT
  Form 20-F.
  ITEM 16B.  CODE
    OF ETHICS
  Form F-1
  ITEM 16C.  PRINCIPAL
    ACCOUNTANT FEES AND SERVICES
    For the Year Ended December 31,2006

2007Audit
    fees(1)

$
500,000


$
1,480,000Audit-related
    fees(2)






100,000Tax
    fees(3)






33,805All other
    fees(4)


1,900,000



300,000     (1)
    
    Audit fees means the aggregate fees billed in each
    of the fiscal years indicated for our calendar year audits.(2)
    
    Audit-related fees means the aggregate fees billed
    in respect of the review of our interim financial statement for
    the six months ended June 30, 2007.(3)
    
    Tax fees include fees billed for tax consultations.(4)
    
    All other fees means the aggregate fees billed in
    respect of (1) our initial public offering in December
    2006, which amounted to US$1.4 million, (2) the review
    of our interim financial statement for the nine months ended
    September 30, 2006 in respect of an aborted project in
    2006, which amounted to US$500,000, and (3) our second
    public offering in November, 2007, which amounted to US$300,000.  de minimis
  ITEM 16D.  EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
   95




---



##### Table of Contents



ITEM 16E.  PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS
   PART III  ITEM 17.  FINANCIAL
    STATEMENTS
    ITEM 18.  FINANCIAL
    STATEMENTS
    ITEM 19.  EXHIBITS
  ExhibitNumber

Description of Document1
.1

Amended and Restated Memorandum and Articles of Association
    (incorporated by reference to Exhibit 1.1 from our annual
    report on
    Form 20-F
    for the fiscal year ended December 31, 2006 (File
    No. 001-33172
    as amended initially filed with the SEC on March 30, 2007)2
.1

Form of Registrants American Depositary Receipt (included
    in Exhibit 2.3)2
.2

Registrants Specimen Certificate for Ordinary Shares
    (incorporated by reference to Exhibit 4.2 from our F-1
    registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)2
.3

Form of Deposit Agreement among the Registrant, the depositary
    and Owners and Beneficial Owners of the American Depositary
    Shares issued thereunder (incorporated by reference to
    Exhibit 4.3 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)2
.4

Holdco 1 Subscription Agreement dated December 23, 2004
    among the Registrant (formerly known as Melco PBL Holdings
    Limited), Melco, PBL and PBL Asia Investments Limited
    (incorporated by reference to Exhibit 4.4 from our F-1
    registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)2
.5

Supplemental Agreement to the Memorandum of Agreement dated
    May 26, 2006 between Melco and PBL (incorporated by
    reference to Exhibit 4.7 from our F-1 registration
    statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)2
.6

Deed of Variation and Amendment relating to the Registrant dated
    July 27, 2007 between Melco Leisure and Entertainment Group
    Limited, Melco International Development Limited, PBL Asia
    Investments Limited, Publishing and Broadcasting Limited, Crown
    Limited and the Registrant (incorporated by reference to
    Exhibit 4.11 from our F-1 registration statement (File
    No. 333-146780),
    as amended, initially filed with the SEC on October 18,
    2007)2
.7*

Amended and Restated Shareholders Deed Relating to the
    Registrant dated December 12, 2007 among the Registrant,
    Melco Leisure and Entertainment Group Limited, Melco, PBL Asia
    Investments Limited and Crown Limited2
.8

Form of Post-IPO Shareholders Agreement among the
    Registrant, Melco Leisure and Entertainment Group Limited,
    Melco, PBL Asia Investments Limited and PBL (incorporated by
    reference to Exhibit 4.9 from our F-1 registration
    statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)2
.9

Form of Registration Rights Agreement among the Registrant,
    Melco and PBL (incorporated by reference to Exhibit 4.10
    from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006) 96




---



##### Table of Contents



ExhibitNumber

Description of Document4
.1

Form of Indemnification Agreement with the Registrants
    directors and executive officers (incorporated by reference to
    Exhibit 10.1 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.2

Form of Directors Agreement of the Registrant
    (incorporated by reference to Exhibit 10.2 from our F-1
    registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.3

Form of Employment Agreement between the Registrant and an
    Executive Officer of the Registrant (incorporated by reference
    to Exhibit 10.3 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.4

English Translation of Subconcession Contract for operating
    casino games of chance or games of other forms in the Macau
    Special Administrative Region between Wynn Macau and PBL Macau,
    dated September 8, 2006 (incorporated by reference to
    Exhibit 10.4 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.5

Senior Facilities Agreement dated September 5, 2007 for
    Melco PBL Gaming (Macau) Limited as Original Borrower, arranged
    by Australia and New Zealand Banking Group Limited, Banc of
    America Securities Asia Limited, Barclays Capital, Deutsche Bank
    AG, Hong Kong Branch and UBS AG Hong Kong Branch as Coordinating
    Lead Arrangers with Deutsche Bank AG, Hong Kong Branch acting as
    Agent and DB Trustees (Hong Kong) Limited acting as Security
    Agent (incorporated by reference to Exhibit 10.32 from our
    F-1 registration statement (File
    No. 333-146780),
    as amended, initially filed with the SEC on October 18,
    2007)4
.6

Agreement dated May 9, 2006 between Dr. Stanley Ho and
    MPBL International, regarding sale and transfer of Mocha Slot
    Group Limited, together with Deed of Assignment dated
    May 9, 2006 between Dr. Ho, as assignor, and MPBL
    International, as assignee (incorporated by reference to
    Exhibit 10.8 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.7

English Translation of Sale and Purchase Agreement dated
    September 21, 2006 between Mocha and MPBL Gaming
    (incorporated by reference to Exhibit 10.9 from our F-1
    registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.8

Letter Agreement in relation to termination of the Mocha service
    arrangement dated March 15, 2006 among Mocha, SJM and Melco
    (incorporated by reference to Exhibit 10.10 from our F-1
    registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.9

First Supplementary Agreement to Joint Venture dated
    February 8, 2005 Relating to transfer of 70% interests in
    Melco Crown (CM) Developments (its former names were MPBL
    Crown Macau Developments and Great Wonders) to MPBL (Greater
    China) (formerly known as Melco Entertainment Limited) among
    STDM, Melco and MPBL (Greater China) (incorporated by reference
    to Exhibit 10.11 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.10

Agreement dated March 17, 2005 Relating to transfer of 30%
    shareholding in Melco Crown (CM) Developments (its former
    names were MPBL Crown Macau Developments and Great Wonders) from
    STDM to Melco among STDM, Melco and MPBL (Greater China)
    (formerly known as Melco Entertainment Limited) (incorporated by
    reference to Exhibit 10.12 from our F-1 registration
    statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.11

English Translation of Order of the Secretary for Public Works
    and Transportation published in Macau Official Gazette
    no. 9 of March 1, 2006 (incorporated by reference to
    Exhibit 10.13 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.12

Contract Document dated November 24, 2004 for the design
    and construction of the hotel and casino at Junction of Avenida
    Dr. Sun Yat Sen and Avenida de Kwong Tung, Taipa, Macau
    between Melco Crown (CM) Developments (its former names
    were MPBL Crown Macau Developments and Great Wonders) and Paul
    Y. Construction Company Limited (incorporated by reference to
    Exhibit 10.14 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006) 97




---



##### Table of Contents



ExhibitNumber

Description of Document4
.13

Agreement dated March 9, 2005 between Melco Leisure and
    Entertainment Group Limited and MPBL (Greater China) (formerly
    known as Melco Entertainment Limited) (incorporated by reference
    to Exhibit 10.15 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.14

Assignment Agreement dated May 11, 2005 in relation to a
    memorandum of agreement dated October 28, 2004 and a
    subscription agreement in relation to convertible loan notes in
    the aggregate principal amount of HK$1,175,000,000 to be issued
    by Melco among Great Respect, as assignor, MPBL (Greater China)
    (formerly known as Melco Entertainment Limited), as assignee,
    and Melco, as issuer (incorporated by reference to
    Exhibit 10.16 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.15

Transfer Deed in relation to the entire issued equity capital of
    Melco Crown (COD) Developments (formerly known as
    MPBL (COD) Developments) and Assignment Deed in relation to
    a memorandum of agreement dated October 28, 2004, dated
    May 17, 2005, between Melco Leisure and Entertainment Group
    Limited and MPBL (Greater China) (incorporated by reference to
    Exhibit 10.16 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.16

Construction Management Agreement dated August 22, 2007 for
    the Construction and Commissioning of City of Dreams, Macau for
    Melco Crown (COD) Developments Limited (formerly known as
    MPBL (COD) Developments) (incorporated by reference to
    Exhibit 10.33 from our F-1 registration statement (File
    No. 333-146780),
    as amended, initially filed with the SEC on October 18,
    2007)4
.17

Management Agreement for Grand Hyatt Macau dated June 18,
    2006 by and between Melco Crown (COD) Developments
    (formerly known as MPBL (COD) Developments) and Hyatt of
    Macau Ltd (incorporated by reference to Exhibit 10.19 from
    our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.18

Management Agreement for Hyatt Regency Macau dated June 18,
    2006 by and between Melco Crown (COD) Developments
    (formerly known as MPBL (COD) Developments) and Hyatt of
    Macau Ltd (incorporated by reference to Exhibit 10.20 from
    our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.19

Hotel Trademark License Agreement by and between Hard Rock
    Holdings Limited and Melco Crown (COD) Developments
    (formerly known as MPBL (COD) Developments) dated
    January 22, 2007 (incorporated by reference to
    Exhibit 4.21 from our annual report on
    Form 20-F
    for the fiscal year ended December 31, 2006 (File
    No. 001-33178),
    as amended, initially filed with the SEC on March 30, 2007)4
.20

Casino Trademark License Agreement by and between Hard Rock
    Holdings Limited and Melco Crown (COD) Developments
    (formerly known as MPBL (COD) Developments) dated
    January 22, 2007 (incorporated by reference to
    Exhibit 4.22 from our annual report on
    Form 20-F
    for the fiscal year ended December 31, 2006 (File
    No. 001-33178),
    as amended, initially filed with the SEC on March 30, 2007)4
.21

Memorabilia Lease (casino) between Hard Rock Cafe International
    (STP) Inc. and MPBL Gaming dated January 22, 2007
    (incorporated by reference to Exhibit 4.23 from our annual
    report on
    Form 20-F
    for the fiscal year ended December 31, 2006 (File
    No. 001-33178),
    as amended, initially filed with the SEC on March 30, 2007)4
.22

Memorabilia Lease (hotel) between Hard Rock Cafe International
    (STP) Inc. and MPBL Gaming dated January 22, 2007
    (incorporated by reference to Exhibit 4.24 from our annual
    report on
    Form 20-F
    for the fiscal year ended December 31, 2006 (File
    No. 001-33178),
    as amended, initially filed with the SEC on March 30, 2007)4
.23

Promissory Transfer of Shares Agreement dated May 17, 2006
    with respect to the sale and transfer of Omar Limited
    (incorporated by reference to Exhibit 10.21 from our F-1
    registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.24

Shareholders Agreement relating to MPBL Gaming dated
    November 22, 2006 among PBL Asia Limited, MPBL Investments,
    Manuela António and MPBL Gaming (incorporated by reference
    to Exhibit 10.22 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006) 98




---



##### Table of Contents



ExhibitNumber

Description of Document4
.25

Termination Letter dated December 15, 2006 in connection
    with Shareholders Agreement Relating to Melco PBL Gaming (Macau)
    Limited dated November 22, 2006 (incorporated by reference
    to Exhibit 4.27 from our annual report on
    Form 20-F
    for the fiscal year ended December 31, 2006 (File
    No. 001-33178),
    as amended, initially filed with the SEC on March 30, 2007)4
.26

Letter dated December 15, 2006 in connection with
    appointment of Mr. Lawrence Ho as the managing director of
    Melco PBL Gaming (Macau) Limited (incorporated by reference to
    Exhibit 4.28 from our annual report on
    Form 20-F
    for the fiscal year ended December 31, 2006 (File
    No. 001-33178),
    as amended, initially filed with the SEC on March 30, 2007)4
.27

Termination Agreement relating to the Shareholders
    Agreement dated December 15, 2006 among PBL Asia Limited,
    Melco PBL Investments Limited, Lawrence Yau Lung Ho and Melco
    PBL Gaming (Macau) Limited (incorporated by reference to
    Exhibit 4.5 from our F-3 registration statement (File
    No. 333-148849),
    filed with the SEC on January 25, 2008)4
.28

2006 Share Incentive Plan (incorporated by reference to
    Exhibit 10.23 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.29

Trade Mark License dated November 30, 2006 between Crown
    Limited and the Registrant as the licensee (incorporated by
    reference to Exhibit 10.24 from our F-1 registration
    statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)4
.30

Agreement between the Registrant and Melco Leisure and
    Entertainment Group Limited dated March 27, 2007
    (incorporated by reference to Exhibit 4.32 from our annual
    report on
    Form 20-F
    for the fiscal year ended December 31, 2006 (File
    No. 001-33178),
    as amended, initially filed with the SEC on March 30, 2007)4
.31

Agreement between the Registrant and PBL Asia Investments
    Limited dated March 27, 2007 (incorporated by reference to
    Exhibit 4.33 from our annual report on
    Form 20-F
    for the fiscal year ended December 31, 2006 (File
    No. 001-33178),
    as amended, initially filed with the SEC on March 30, 2007)8
.1*

List of Subsidiaries11
.1

Code of Business Conduct and Ethics (incorporated by reference
    to Exhibit 99.1 from our F-1 registration statement (File
    No. 333-139088),
    as amended, initially filed with the SEC on December 1,
    2006)12
.1*

CEO Certification Pursuant to Section 302 of the
    Sarbanes-Oxley Act of 200212
.2*

CFO Certification Pursuant to Section 302 of the
    Sarbanes-Oxley Act of 200213
.1*

CEO Certification Pursuant to Section 906 of the
    Sarbanes-Oxley Act of 200213
.2*

CFO Certification Pursuant to Section 906 of the
    Sarbanes-Oxley Act of 200215
.1*

Consent of Walkers     *
    
    Filed with this Annual Report on
    Form 20-F 99




---



##### 



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
    FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
  PageManagements Annual Report of Internal Control over
    Financing ReportingReport of Independent Registered Public
    Accounting Firm


F-2Report of Independent Registered Public
    Accounting Firm


F-3Consolidated Balance Sheets as of
    December 31, 2006 and 2007


F-4Consolidated Statements of Operations for the
    years ended December 31, 2005, 2006 and 2007


F-5Consolidated Statements of Shareholders
    Equity for the years ended December 31, 2005, 2006 and
    2007


F-6Consolidated Statements of Cash Flows for the
    years ended December 31, 2005, 2006 and 2007


F-7Notes to Consolidated Financial Statements for
    the years ended December 31, 2005, 2006 and 2007


F-9   F-1




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  REPORT OF INDEPENDENT REGISTERED PUBLIC
    ACCOUNTING FIRM
                Deloitte Touche Tohmatsu
    F-2




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            Deloitte Touche Tohmatsu
    F-3




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  CONSOLIDATED
    BALANCE SHEETS
 (In
    thousands of U.S. dollars, except share and per share
    data)
  December 31,2006


2007ASSETSCURRENT ASSETSCash and cash equivalents

$
583,996


$
835,419Restricted cash






298,983Accounts receivable, net (Note 3)


414



49,390Amounts due from affiliated companies (Note 18(a))


152



Inventories


196



1,484Prepaid expenses and other current assets


1,790



15,715Total current assets


586,548



1,200,991PROPERTY AND EQUIPMENT, NET (Note 4)


279,885



980,241GAMING SUB-CONCESSION (Note 5)


885,691



828,453INTANGIBLE ASSETS, NET (Note 6)


4,220



4,220GOODWILL (Note 6)


81,915



81,915LONG-TERM PREPAYMENT AND DEPOSITS


5,742



15,832DEFERRED FINANCING COST






48,295DEPOSIT FOR ACQUISITION OF LAND INTEREST (Note 7)


12,853



12,853LAND USE RIGHTS, NET (Note 17(a), 20)


423,066



447,468TOTAL

$
2,279,920


$
3,620,268LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESAccounts payable

$
2,509


$
5,736Accrued expenses and other current liabilities (Note 8)


97,369



468,236Income tax payable


259



1,560Capital lease obligations, due within one year (Note 11)


6



Amounts due to affiliated companies (Note 18(b))


10,611



6,602Amounts due to shareholders (Note 18(c))


96,859



1,551Total current liabilities


207,613



483,685LONG-TERM DEBT (Note 9)






500,209OTHER LONG-TERM LIABILITIES (Note 10)






11,074DEFERRED TAX LIABILITIES (Note 13)


24,046



21,286CAPITAL LEASE OBLIGATIONS, DUE AFTER ONE YEAR (Note 11)


10



LOANS FROM SHAREHOLDERS (Note 18(c))


115,647



114,616LAND USE RIGHTS PAYABLE (Note 17(a), 20)


42,238



60,857COMMITMENTS AND CONTINGENCIES (Note 17)SHAREHOLDERS EQUITYOrdinary shares at US$0.01 par value per share
    (Authorized  1,500,000,000 shares and
    issued  1,180,931,146 and 1,320,938,904 shares
    as of December 31, 2006 and 2007 (Note 12))


11,809



13,209Additional paid-in capital


1,955,383



2,682,125Accumulated other comprehensive income (loss)


740



(11,076
)Accumulated losses


(77,566
)


(255,717
)Total shareholders equity


1,890,366



2,428,541TOTAL

$
2,279,920


$
3,620,268    F-4




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (In
    thousands of U.S. dollars, except share and per share
    data)
  Year Ended December 31,2005


2006


2007OPERATING REVENUESCasino Affiliated customer (Note 18)

$
16,433


$
16,276


$
 External customers


136



19,108



348,725Sub-total


16,569



35,384



348,725Rooms










5,679Food and beverage


1,358



1,523



11,229Entertainment, retail and others










1,964Gross revenues


17,927



36,907



367,597Less: promotional allowances


(599
)


(806
)


(8,984
)Net revenues


17,328



36,101



358,613OPERATING COSTS AND EXPENSESCasino


(6,351
)


(18,777
)


(274,439
)Rooms










(11,482
)Food and beverage


(596
)


(530
)


(6,088
)Entertainment, retail and others










(30
)General and administrative


(4,336
)


(15,105
)


(60,110
)Selling and marketing


(534
)


(3,511
)


(48,317
)Pre-opening costs


(730
)


(11,679
)


(40,032
)Amortization of gaming sub-concession






(14,309
)


(57,190
)Amortization of land use rights


(3,535
)


(12,358
)


(17,276
)Depreciation and amortization


(4,968
)


(9,845
)


(39,466
)Impairment loss recognized on slot lounge services agreement
    (Note 6)






(7,640
)


Total operating costs and expenses


(21,050
)


(93,754
)


(554,430
)OPERATING LOSS


(3,722
)


(57,653
)


(195,817
)NON-OPERATING INCOME (EXPENSES)Interest income


2,516



816



18,640Interest expenses, net of capitalized interest


(2,028
)


(11,184
)


(770
)Write off of deferred financing costs






(12,698
)


Amortization of deferred financing costs










(1,005
)Loan commitment fees










(4,760
)Foreign exchange (loss) gain, net


(570
)


55



3,832Other, net


146



285



275Total non-operating income (expenses)


64



(22,726
)


16,212LOSS BEFORE INCOME TAX


(3,658
)


(80,379
)


(179,605
)INCOME TAX CREDIT (Note 13)


91



1,885



1,454LOSS BEFORE MINORITY INTERESTS


(3,567
)


(78,494
)


(178,151
)MINORITY INTERESTS


308



5,015



NET LOSS

$
(3,259
)

$
(73,479
)

$
(178,151
)LOSS PER SHARE:Basic and diluted

$
(0.006
)

$
(0.116
)

$
(0.145
)SHARES USED IN LOSS PER SHARE CALCULATION:Basic and diluted


522,945,205



633,228,439



1,224,880,031    F-5




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY
 (In
    thousands of U.S. dollars, except share and per share
    data)
  AccumulatedAdditional


Other





TotalCommon Shares


Paid-in


Comprehensive


Accumulated


Shareholders


ComprehensiveShares


Amount


Capital


Income (Loss)


Losses


Equity


LossBALANCE AT JANUARY 1, 2005


625,000,000


$
6,250


$
76,989


$



$
(1,007
)

$
82,232Net loss for the year


















(3,259
)


(3,259
)

$
(3,259
)Contribution from PBL










163,000











163,000Contribution of Great Wonders from Melco










16,484











16,484Effect of reorganization on minority interests


(125,000,000
)


(1,250
)


(18,694
)






179



(19,765
)BALANCE AT DECEMBER 31, 2005


500,000,000



5,000



237,779







(4,087
)


238,692


$
(3,259
)Net loss for the year


















(73,479
)


(73,479
)

$
(73,479
)Foreign currency translation adjustment














740







740



740Share-based compensation










278











278Shares issued upon initial public offering, net of offering
    expenses


180,931,146



1,809



1,065,665











1,067,474Shares issued during the year


500,000,000



5,000



315,000











320,000Capital contributions from shareholders










150,000











150,000Contribution from Melco










109,170











109,170Contribution of MPBL Gaming from PBL










77,491











77,491BALANCE AT DECEMBER 31, 2006


1,180,931,146



11,809



1,955,383



740



(77,566
)


1,890,366


$
(72,739
)Net loss for the year


















(178,151
)


(178,151
)

$
(178,151
)Foreign currency translation adjustment














(1,685
)






(1,685
)


(1,685
)Change in fair value of interest rate swap














(10,131
)






(10,131
)


(10,131
)Share-based compensation










5,346











5,346Shares issued, net of offering expenses (Note 12)


139,612,500



1,396



721,396











722,792Shares issued upon restricted shares vested (Note 12)


395,258



4















4BALANCE AT DECEMBER 31, 2007


1,320,938,904


$
13,209


$
2,682,125


$
(11,076
)

$
(255,717
)

$
2,428,541


$
(189,967
)    F-6




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (In
    thousands of U.S. dollars)
  Year Ended December 31,2005


2006


2007CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(3,259
)

$
(73,479
)

$
(178,151
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation and amortization


8,503



36,512



113,932Amortization of deferred financing costs










1,005Loan commitment fees










4,760Impairment loss recognized on slot lounge services agreement






7,640



(Gain) loss on disposal of property and equipment


(35
)


1,140



585Impairment loss recognized on property and equipment










421Allowance for doubtful debts










2,733Share-based compensation






278



5,256Minority interests


(308
)


(5,015
)


Changes in operating assets and liabilities:Accounts receivable


8



(377
)


(51,711
)Amounts due from affiliated companies


(313
)


1,276



151Inventories


(72
)


(109
)


(1,288
)Prepaid expenses and other current assets


(547
)


10,330



(13,924
)Long term prepayment and deposits


(297
)


(1,638
)


(7,899
)Accounts payable


(419
)


2,360



3,172Accrued expenses and other current liabilities


719



3,015



272,172Income tax payable


445



(356
)


1,301Amounts due to affiliated companies


407







428Other long-term liabilities










950Deferred tax liabilities


(548
)


(1,814
)


(2,755
)Net cash provided by (used in) operating activities


4,284



(20,237
)


151,138CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of property and equipment


(46,088
)


(22,743
)


(668,281
)Deposits for acquisition of property and equipment


(919
)


(3,555
)


(5,356
)Acquisition of other assets


(102,564
)






Restricted cash










(298,983
)Payment for land use rights


(31,870
)


(12,371
)


Proceeds from sale of property and equipment


183



24



Net cash used in investing activities


(181,258
)


(38,645
)


(972,620
)CASH FLOWS FROM FINANCING ACTIVITIESPayment of deferred financing costs










(49,735
)Amounts due to shareholders


8,088



75,544



(96,583
)Amounts due to affiliated companies


20,225



(45,643
)


Payment of principal of capital leases


(107
)


(5
)


(16
)Payment of loan commitment fees










(3,766
)Cash contribution from PBL


163,000







Issue of share capital






1,067,474



722,796Cash from contribution of MPBL Gaming from PBL






25,739



Proceeds from long-term debt










500,209Repayment of bank loan






(500,000
)


Net cash provided by financing activities


191,206



623,109



1,072,905NET INCREASE IN CASH AND CASH EQUIVALENTS


14,232



564,227



251,423CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR


5,537



19,769



583,996CASH AND CASH EQUIVALENTS AT END OF YEAR

$
19,769


$
583,996


$
835,419    F-7




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS  (Continued)
 (In thousands of U.S. dollars)
  Year Ended December 31,2005


2006


2007SUPPLEMENTAL DISCLOSURES OF CASH FLOWSCash paid for interest (net of capitalized interest)

$
(495
)

$
(10,328
)

$
(596
)Cash paid for tax

$
(12
)

$
(285
)

$
NON-CASH INVESTING ACTIVITIESConstruction costs funded through accrued expenses and other
    current liabilities

$
7,441


$
61,383


$
132,356Construction costs funded through amounts due to shareholders

$



$
127,287


$
Inception of capital leases on property and equipment

$
13


$
10


$
Land use rights cost funded through land use rights payable,
    accrued expenses and other current liabilities and amounts due
    to shareholders

$
38,012


$
63,411


$
41,680Other assets costs funded through amounts due to shareholder

$
48,077


$



$
Costs of property and equipment funded through amounts due to
    affiliated companies

$
6,885


$
5,616


$
1,598Acquisition of additional 20% share of Mocha Slot funded through
    advances from shareholders

$



$
32,051


$
Acquisition of shareholder loan advanced by Dr. Stanley Ho
    funded through advances from shareholders

$



$
5,859


$
Deposit for acquisition of land interest funded through advances
    from shareholders

$



$
12,853


$
Contribution of MPBL Gaming from PBL

$



$
77,491


$
Contribution of interest in MPBL (Greater China)

$



$
109,170


$
Deferred financing costs funded through accounts payable and
    accrued expenses and other current liabilities

$



$



$
575    F-8




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (In thousands of U.S. dollars, except share and per share
    data)
  1.
    COMPANY
    INFORMATION    2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  (a) Basis
    of Presentation and Principles of Consolidation
      (b) Use
    of Estimates
    (c) Fair
    Value of Financial Instruments
    (d) Cash
    and Cash Equivalents
   F-9




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
    (e) Restricted
    Cash
    (f) Accounts
    Receivable and Credit Risk
      (g) Inventories
  first-in,
  (h) Property
    and Equipment
      Classification

YearsBuildings

25 years or over the term of the land use right agreement,
    whichever is shorterFurniture, fixtures and equipment

3 to 7 yearsPlant and gaming machinery

3 to 5 yearsLeasehold improvements

10 years or over the lease term, whichever is shorterMotor vehicles

5 years    F-10




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
    (i) Capitalization
    of Interest and Amortization of Deferred Financing
    Costs
    (j) Gaming
    Sub-concession
    (k) Goodwill
    and Intangible Assets
      (l) Impairment
    of Long-Lived Assets (Other Than Goodwill)
   F-11




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
  (m) Deferred
    Financing Costs
    (n) Land
    Use Rights, Net
    (o) Revenue
    Recognition and Promotional Allowances
            01-9, EITF 01-9
 F-12




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
    Year Ended December 31,2005


2006


2007Rooms

$



$



$
903Food and beverage


470



596



7,029$
470


$
596


$
7,932   (p) Point-Loyalty
    Programs
      (q) Pre-Opening
    Costs
  start-up
  (r) Advertising
    Expenses
    (s) Foreign
    Currency Transactions and Translations
     F-13




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
    (t) Share-Based
    Compensation Expenses
        (u) Income
    Tax
        (v) Earnings
    Per Share
     F-14




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
    Year Ended December 31,2005

2006

2007Weighted average number of common shares outstanding


522,945,205



633,228,439



1,224,880,031Restricted shares






62,628



2,349,339Share options










30,773522,945,205



633,291,067



1,227,260,143     (w) Accounting
    for Derivative Instruments and Hedging Activities
      (x) Accumulated
    Other Comprehensive Income (Loss)
    Year Ended December 31,2005


2006


2007Foreign currency translation adjustment

$



$
740


$
(945
)Change in fair value of interest rate swaps










(10,131
)$



$
740


$
(11,076
)   (y) Reclassifications
   F-15




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
  (z) Recent
    Changes in Accounting Standards
    instrument-by-instrument
      3.
    ACCOUNTS
    RECEIVABLE, NET  December 31,2006


2007Components of accounts receivable, net are as follows:Casino

$
346


$
50,710Hotel






1,157Other


68



258Sub-total

$
414


$
52,125Less: allowance for doubtful accounts






(2,735
)$
414


$
49,390  F-16




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
  4.
    PROPERTY
    AND EQUIPMENT, NET  December 31,2006


2007CostBuildings

$



$
300,437Furniture, fixtures and equipment


7,601



62,165Plant and gaming machinery


35,114



67,731Leasehold improvements


11,286



22,903Motor vehicles


299



1,400Sub-total

$
54,300


$
454,636Less: Accumulated depreciation


(12,993
)


(52,638
)Sub-total

$
41,307


$
401,998Construction in progress


238,578



578,243Property and equipment, net

$
279,885


$
980,241     5.
    GAMING
    SUB-CONCESSION  December 31,2006


2007Deemed cost (Note)

$
900,000


$
900,000Less: Accumulated amortization


(14,309
)


(71,547
)Gaming Sub-concession, net

$
885,691


$
828,453         6.
    GOODWILL
    AND INTANGIBLE ASSETS, NET     F-17




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
    December 31,2006


2007Trademarks

$
4,220


$
4,220Slot lounge services agreement


10,485



$
14,705


$
4,220Less: Accumulated amortization


(2,845
)


Impairment loss recognized


(7,640
)


Intangible assets, net

$
4,220


$
4,220       7.
    DEPOSIT
    FOR ACQUISITION OF LAND INTEREST   F-18




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
  8.
    ACCRUED
    EXPENSES AND OTHER CURRENT LIABILITIES  December 31,2006


2007Construction costs payable

$
61,383


$
132,356Customer deposits






12,926Outstanding gaming chips and tokens






166,691Other gaming related accruals






44,105Gaming tax accrual






34,434Rental payable


228



1,936Land use rights payable


21,173



44,234Operating expense accruals


14,585



31,554$
97,369


$
468,236   9.
    LONG-TERM
    DEBT       F-19




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
                 F-20




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
          Year2008

$
2009


2010


30,0132011


100,0422012


115,048Over 2012


255,106$
500,209   10.
    OTHER
    LONG-TERM LIABILITIES  December 31,2006


2007Interest rate swap contracts

$



$
10,124Deferred rent liabilities






950$



$
11,074         11.
    CAPITAL
    LEASE OBLIGATIONS   F-21




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
  12.
    CAPITAL
    STRUCTURE            13.
    INCOME
    TAX CREDIT       F-22




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
    Year Ended December 31,2005


2006


2007Income tax provision for current year:Macau Complementary Tax

$
458


$



$
Hong Kong Profits Tax










1,301458







1,301Overprovision of income tax in prior years:Macau Complementary Tax

$
(1
)

$
(71
)

$
Hong Kong Profits Tax










(1
)


(71
)


Deferred tax charge (credit):Macau Complementary Tax

$
(548
)

$
(1,814
)

$
(2,812
)Hong Kong Profits Tax










57(548
)


(1,814
)


(2,755
)$
(91
)

$
(1,885
)

$
(1,454
)     Year Ended December 31,2005


2006


2007Loss before income tax

$
(3,658
)

$
(80,379
)

$
(179,605
)Macau Complementary Tax rate


12
%


12
%


12
%Income tax credit at Macau Complementary Tax rate


(439
)


(9,645
)


(21,553
)Effect of different tax rates of subsidiaries operatingin other jurisdiction










641Overprovision in prior year


(1
)


(71
)


Effect of income for which no income tax expensesis payable


(89
)


(255
)


(2,671
)Effect of expense for which no income tax benefitis receivable


361



1,404



1,048Losses that cannot be carried forward










20,045Increase in valuation allowance


77



6,682



1,036$
(91
)

$
(1,885
)

$
(1,454
)  F-23




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
    December 31,2006


2007Deferred income tax assetsNet operating loss carryforwards

$
6,086


$
7,795Depreciation and amortization


673



6,759



7,795Valuation allowance


(6,759
)


(7,795
)Total net deferred income tax assets






Deferred income tax liabilitiesLand use rights


(23,541
)


(20,724
)Intangible assets


(505
)


(505
)Unrealized capital allowance






(57
)Net deferred income tax liabilities

$
(24,046
)

$
(21,286
)              F-24




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
  14.
    SHARE-BASED
    COMPENSATION            December 31,2005

2006

2007Expected dividend yield










Expected stock price volatility










38.26
%Risk-free interest rate










3.96
%Expected average life of options (years)










5.2  F-25




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
  Stock
    Options
    WeightedWeighted


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicOptions


Price


Term


ValueOutstanding at January 1, 2007






Granted


3,908,390


$
5.02Exercised






Cancelled


(191,514
)

$
5.06Outstanding at December 31, 2007


3,716,876


$
5.02



6.5



Exercisable at December 31, 2007














     Expected to VestedWeightedWeighted

AverageAverage

RemainingNumber

Exercise

Contractualof Options

Price Per Option

TermRange of Exercise Prices ($4.72-$5.06)


3,716,876


$
5.02



6.5        F-26




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
  Restricted
    Shares
    WeightedAverage GrantShares


Date Fair ValueUnvested at January 1, 2006





$
Granted


2,532,010



6.33Vested






Cancelled






Unvested at December 31, 2006 and January 1, 2007


2,532,010


$
6.33Granted






Vested


(395,258
)


6.33Cancelled


(130,310
)


6.33Unvested at December 31, 2007


2,006,442


$
6.33         Year Ended December 31,2006


2007Stock options

$



$
518Restricted shares


278



4,828Total share based compensation expense


278



5,346Less: Compensation expense capitalized






(90
)Compensation costs recognized as expense

$
278


$
5,256   15.
    EMPLOYEE
    BENEFIT PLANS    16.
    DISTRIBUTION
    OF PROFITS   F-27




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
    17.
    COMMITMENTS
    AND CONTINGENCIES  (a) Capital
    Commitments
          (b) Lease
    Commitments
   F-28




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
    Operating
    Leases
  Year2008

$
9,6932009


8,6632010


7,0112011


7,1902012


7,417Over 2012


25,816Total minimum lease payments

$
65,790   (c) Other
    Commitments
          
    $37 (MOP 300,000) per year for each gaming table (subject to a
    minimum of 100 tables) reserved exclusively for certain kind of
    games or to certain players;
    $19 (MOP 150,000) per year for each gaming table (subject to a
    minimum of 100 tables) not reserved exclusively for certain kind
    of games or to certain players; and
    $0.1 (MOP 1,000) per year for each electrical or mechanical
    gaming machine.         F-29




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
    (d) Contingencies
    18.
    RELATED
    PARTY TRANSACTIONS    Year Ended December 31,2005

2006

2007Consultancy fee paid/payable to affiliated companies capitalized
    in construction in progress

$



$
3,015


$
2,294Consultancy fee paid to an affiliated company recognized as
    expense






2,525



4,150Interest paid/payable to affiliated companies/person


832



413



Management fee paid/payable to affiliated companies


197



144



Network support fee paid/payable to affiliated companies


92



193



238Project management fee paid/payable to an affiliated company
    capitalized in construction in progress


1,077



1,420



1,442Purchase of services and operating/office supplies from
    affiliated companies










813Purchase of plant and equipment from affiliated companies


15,643



11,991



12,141Rental expense paid/payable to affiliated companies


135



473



1,114Service fee income received or receivable from an affiliated
    company


16,433



16,276



Service fee paid/payable to affiliated companies


538



1,988



Travelling expense paid/payable to affiliated companies


124



375



746Interest paid/payable to shareholders capitalized in
    construction in progress






586



4,167Interest paid/payable to shareholders recognized as expense


2,031



1,814



758   (a) Amounts
    Due From Affiliated Companies
  Sub-concession
 F-30




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
      (b) Amounts
    Due To Affiliated Companies
               F-31




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
        (c) Amounts
    Due To/Loans From Shareholders
      3-months
  3-months
   F-32




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
            Sub-concession
  Sub-concession
  Sub-concession Sub-concession
  Sub-concession
   F-33




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
      19.
    SEGMENT
    INFORMATION    Total
    Assets
  December 31,2006


2007Mocha Slot

$
138,029


$
149,524Crown Macau


435,875



781,832City of Dreams


475,907



918,198Corporate and others


1,230,109



1,770,714Total consolidated assets

$
2,279,920



3,620,268       Year Ended December 31,2005


2006


2007NET REVENUESMocha Slot

$
17,328


$
36,101


$
81,388Crown Macau










277,225Total net revenues


17,328



36,101



358,613ADJUSTED
    EBITDA(1)Mocha Slot


7,302



12,846



22,056Crown Macau






(1,901
)


(22,444
)Total adjusted EBITDA


7,302



10,945



(388
) F-34




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
  Year Ended December 31,2005


2006


2007OTHER OPERATING COST AND EXPENSESPre-opening costsMocha Slot


(174
)


(91
)


Crown Macau


(318
)


(9,586
)


(36,985
)City of Dreams


(238
)


(2,002
)


(3,047
)Corporate and other










Depreciation and amortizationMocha Slot


(4,957
)


(9,429
)


(11,399
)Crown Macau


(3,535
)


(5,696
)


(30,317
)City of Dreams






(7,063
)


(14,501
)Corporate and other


(11
)


(14,324
)


(57,715
)Share-based compensationMocha Slot










(95
)Crown Macau










(360
)City of Dreams










Corporate and other






(278
)


(4,801
)Marketing expense relating to Crown Macau
    Opening(2)Crown Macau










(2,500
)Corporate and other










(9,459
)Impairment loss recognized on slot lounge services agreementMocha Slot






(7,640
)


Other expensesMocha Slot










Crown Macau










City of Dreams






(718
)


(316
)Corporate and other


(2,753
)


(9,820
)


(23,934
)Minority interest of Mocha Slot included in adjusted EBITDAMocha Slot


962



(1,951
)


Total


(11,024
)


(68,598
)


(195,429
)Operating loss


(3,722
)


(57,653
)


(195,817
) F-35




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands of U.S. dollars, except share and per share
    data)
  Year Ended December 31,2005


2006


2007OTHER NON-OPERATING INCOME AND EXPENSEInterest income


2,516



816



18,640Interest expenses, net of capitalized interest


(2,028
)


(11,184
)


(770
)Write off of deferred financing costs






(12,698
)


Amortization of deferred financing costs










(1,005
)Loan commitment fees










(4,760
)Foreign exchange (loss) gain, net


(570
)


55



3,832Other, net


146



285



275Total


64



(22,726
)


16,212LOSS BEFORE INCOME TAX


(3,658
)


(80,379
)


(179,605
)INCOME TAX CREDIT


91



1,885



1,454LOSS BEFORE MINORITY INTERESTS


(3,567
)


(78,494
)


(178,151
)MINORITY INTERESTS


308



5,015



NET LOSS

$
(3,259
)

$
(73,479
)

$
(178,151
)       (1)
    Adjusted EBITDA is earnings before interest, taxes,
    depreciation, amortization, other expenses (including
    pre-opening costs, stock-based compensation, marketing expense
    relating to Crown Macau Opening, non-operating income (expenses)
    and impairment loss recognized on the slot lounge services
    agreement). The Adjusted EBITDA is presented for results of
    Mocha Slot and Crown Macau. Prior to the opening of the casino
    operation of Crown Macau in May 2007, the management of the
    Company used Adjusted EBITDA for Mocha Slot to measure the
    operating performance of the Company as Mocha Slot was the
    Companys business until then. Subsequent to the opening of
    the casino operation of Crown Macau in May 2007, the management
    of the Company used Adjusted EBITDA of Mocha Slot and Crown
    Macau to measure their operating performance as they are the two
    primary operations of the Company. The management of the Company
    does not use Adjusted EBITDA on the COD Project to measure its
    operating performance since it is still in its development stage.(2)
    Marketing expenses related to the Crown Macau opening are
    allocated to Crown Macau in accordance with the property budget
    as set at the end of 2006.  20.
    POST
    BALANCE SHEET EVENTS   F-36




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
    ADDITIONAL INFORMATION  FINANCIAL STATEMENT
    SCHEDULE 1
    FINANCIAL INFORMATION OF PARENT COMPANY
    BALANCE SHEET
    (In thousands of U.S. dollars, except share and per share
    data)
  December 31,2006


2007ASSETSCURRENT ASSETSCash and cash equivalents

$
329,430


$
573,650Amounts due from affiliated companies


30



2Amounts due from subsidiaries


1,058,735



163,223Prepaid expenses and other current assets


421



3,473Total current assets


1,388,616



740,348INVESTMENTS IN SUBSIDIARIES


900,611



1,992,448LONG-TERM PREPAYMENT AND DEPOSITS


126



TOTAL

$
2,289,353


$
2,732,796LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESAccrued expenses and other current liabilities

$
4,121


$
2,905Income tax payable






1,177Amounts due to affiliated companies


2,300



3,661Amounts due to subsidiaries


180,285



180,345Amounts due to shareholders


96,634



1,551Total current liabilities


283,340



189,639LOANS FROM SHAREHOLDERS


115,647



114,616SHAREHOLDERS EQUITYOrdinary shares at US$0.01 par value per share
    (Authorized  1,500,000,000 shares and
    issued  1,180,931,146 and 1,320,938,904 shares
    as of December 31, 2006 and 2007)


11,809



13,209Additional paid-in capital


1,955,383



2,682,125Accumulated other comprehensive income (loss)


740



(11,076
)Accumulated losses


(77,566
)


(255,717
)Total shareholders equity


1,890,366



2,428,541TOTAL

$
2,289,353


$
2,732,796  F-37




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
    ADDITIONAL INFORMATION  FINANCIAL STATEMENT
    SCHEDULE 1
    FINANCIAL INFORMATION OF PARENT COMPANY
    STATEMENTS OF OPERATIONS
    (In thousands of U.S. dollars, except share and per share
    data)
  Year Ended December 31,2005


2006


2007REVENUE

$



$



$
OPERATING EXPENSESGeneral and administrative


(51
)


(3,961
)


(16,017
)Selling and marketing






(321
)


(306
)Total operating expenses


(51
)


(4,282
)


(16,323
)OPERATING LOSS


(51
)


(4,282
)


(16,323
)NON-OPERATING INCOME (EXPENSES)Interest income


626



240



11,159Interest expenses










(758
)Foreign exchange gain






2



5,138Other, net










16,106Share of results of subsidiaries


(3,834
)


(69,439
)


(192,296
)Total non-operating expenses


(3,208
)


(69,197
)


(160,651
)LOSS BEFORE INCOME TAX


(3,259
)


(73,479
)


(176,974
)INCOME TAX EXPENSE










(1,177
)NET LOSS

$
(3,259
)

$
(73,479
)

$
(178,151
)  F-38




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
  ADDITIONAL INFORMATION  FINANCIAL STATEMENT
    SCHEDULE 1
 FINANCIAL INFORMATION OF PARENT COMPANY
 STATEMENTS OF SHAREHOLDERS EQUITY
 (In thousands of U.S. dollars, except share and per share
    data)
  AccumulatedAdditional


Other





TotalCommon Shares


Paid-in


Comprehensive


Accumulated


Shareholders


ComprehensiveShares


Amount


Capital


Income (Loss)


Losses


Equity


LossBALANCE AT JANUARY 1, 2005


625,000,000


$
6,250


$
76,989


$



$
(1,007
)

$
82,232Net loss for the year


















(3,259
)


(3,259
)

$
(3,259
)Contribution from PBL










163,000











163,000Contribution of Great Wonders from Melco










16,484











16,484Effect of reorganization on minority interests


(125,000,000
)


(1,250
)


(18,694
)






179



(19,765
)BALANCE AT DECEMBER 31, 2005


500,000,000



5,000



237,779







(4,087
)


238,692


$
(3,259
)Net loss for the year


















(73,479
)


(73,479
)

$
(73,479
)Foreign currency translation adjustment














740







740



740Share-based compensation










278











278Shares issued upon initial public offering, net of offering
    expenses


180,931,146



1,809



1,065,665











1,067,474Shares issued during the year


500,000,000



5,000



315,000











320,000Capital contributions from shareholders










150,000











150,000Contribution from Melco










109,170











109,170Contribution of MPBL Gaming from PBL










77,491











77,491BALANCE AT DECEMBER 31, 2006


1,180,931,146



11,809



1,955,383



740



(77,566
)


1,890,366


$
(72,739
)Net loss for the year


















(178,151
)


(178,151
)

$
(178,151
)Foreign currency translation adjustment














(1,685
)






(1,685
)


(1,685
)Change in fair value of interest rate swap














(10,131
)






(10,131
)


(10,131
)Share-based compensation










5,346











5,346Shares issued, net of offering expenses


139,612,500



1,396



721,396











722,792Shares issue upon restricted shares vested


395,258



4















4BALANCE AT DECEMBER 31, 2007


1,320,938,904


$
13,209


$
2,682,125


$
(11,076
)

$
(255,717
)

$
2,428,541


$
(189,967
)  F-39




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
    ADDITIONAL INFORMATION  FINANCIAL STATEMENT
    SCHEDULE 1
    FINANCIAL INFORMATION OF PARENT COMPANY
    STATEMENTS OF CASH FLOWS
    (In thousands of U.S. dollars)
  Year Ended December 31,2005


2006


2007CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(3,259
)

$
(73,479
)

$
(178,151
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Share-based compensation






278



5,256Share of results of subsidiaries


3,834



69,439



192,296Changes in operating assets and liabilities:Amounts due from affiliated companies


(2
)


(30
)


28Prepaid expenses and other current assets






(421
)


(3,052
)Long term prepayment and deposits






(126
)


126Accrued expenses and other current liabilities






4,121



(1,216
)Income tax payable










1,177Amounts due to affiliated companies


1



2,299



1,361Amounts due to subsidiaries






1,965



60Net cash provided by operating activities


574



4,046



17,885CASH FLOWS FROM INVESTING ACTIVITIESInvestments in subsidiaries


(163,000
)






Amounts due from subsidiaries






(742,664
)


(399,878
)Net cash used in investing activities


(163,000
)


(742,664
)


(399,878
)CASH FLOWS FROM FINANCING ACTIVITIESAmounts due to shareholders










(96,583
)Cash contribution from PBL


163,000







Issue of share capital






1,067,474



722,796Net cash provided by financing activities


163,000



1,067,474



626,213NET INCREASE IN CASH AND CASH EQUIVALENTS


574



328,856



244,220CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR






574



329,430CASH AND CASH EQUIVALENTS AT END OF YEAR

$
574


$
329,430


$
573,650  F-40




---



##### Table of Contents



MELCO PBL
    ENTERTAINMENT (MACAU) LIMITED
    ADDITIONAL INFORMATION  FINANCIAL STATEMENT
    SCHEDULE 1
    FINANCIAL INFORMATION OF PARENT COMPANY
    NOTES TO FINANCIAL STATEMENT SCHEDULE 1
  12-04(a) Regulation S-X,
     F-41




---



##### Table of Contents



SIGNATURES
  Form 20-F
    By
    /s/  Lawrence
    Ho  Name:
    Lawrence HoTitle:
    Co-Chairman and Chief Executive Officer   ii