Good day, ladies and gentlemen, and welcome to the Sands Fourth Quarter 2023 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments following the presentation. It is now my pleasure to turn the floor over to Mr. Daniel Briggs, Senior Vice President of Investor Relations at Sands. Sir, the floor is yours.

Thank you. Joining the call today are Rob Goldstein, our Chairman and CEO; Patrick Dumont, our President and Chief Operating Officer; Dr. Wilford Wong, Executive Vice Chairman of Sands China; and Grant Chum, CEO and President of Sands China and EVP of Asia Operations. Today's conference call will contain forward-looking statements. We'll be making those statements under the safe harbor provision of federal securities laws. The company's actual results may differ materially from the results reflected in those forward-looking statements. In addition, we will discuss non-GAAP measures. Reconciliations to the most comparable GAAP financial measures are included in our press release. We have posted an earnings presentation on our website. We will refer to that presentation during the call. Finally, for the Q&A session, we ask those with interest to please pose one question and one follow-up, so we might allow everyone with interest the opportunity to participate. This presentation is being recorded. I'll now turn the call over to Rob.

Thanks, Dan, and thank you all for being here today. Macao generated $654 million in EBITDA for the quarter. This figure could have been $40 million higher had we performed as expected in the rolling segment. It's been just a year since COVID ended in Macao. We started Q1 with $400 million in EBITDA, followed by $540 million in Q2, and $630 million in Q3. The growth continues to impress. We are optimistic about sustained growth in both gaming and non-gaming revenue that will enhance our market. SCL maintains the largest share of non-rolling table win, rolling table win, and slot ETG win. Notably, we hold a significant share of EBITDA in the Macao market. We believe the completed Londoner project will meet or even surpass the expected earnings potential in the area. Our future growth in Macao is closely linked to our strong assets, which will drive revenue growth in the years to come, whether in rooms, gaming capacity, retail, entertainment, or food and beverage. Our assets are exceptional and will improve further as we finish the ongoing $1.2 billion Londoner investment program. There’s ongoing speculation about Macao’s growth potential. Can the Macao market expand to $30 billion, $35 billion, or even $40 billion and more? We are confident it will. This reinforces our belief in the returns generated through our capital investment in the portfolio. We firmly believe in the short- and long-term growth of the Macao market. LBS has already invested $15 billion in Macao. It's the most significant land-based market globally. To provide some context: fourth quarter EBITDA, assuming normal hold on rolling play, shows notable growth compared to previous quarters. Our retail segment in Macao has already surpassed pre-COVID figures. I anticipate that the gaming dynamics of our business will mirror Singapore's trajectory and accelerate in 2024. Now, let’s discuss MBS and Singapore. Seven quarters into our reopening, MBS posted $544 million in EBITDA for a single quarter, marking the highest quarter ever for this venue. The strength of this building is apparent from the results, even amidst the ongoing $1.75 billion renovation. Despite disruptions, MBS is performing exceptionally well across gaming, lodging, and retail. Slots and ETGs at MBS are nearing a $1 billion annual run rate. Non-rolling tables are outperforming with drops exceeding $20 million per day. Average daily rates are rising, and retail performance greatly exceeds pre-COVID levels. MBS exemplifies the value of quality assets, and reinvesting in them will lead to sustainable returns. MBS has it all: an iconic building with top-notch decor and service, attracting the most sought-after customers from every segment. Once both phases of the renovation program are complete, MBS will offer 770 suites, compared to fewer than 200 before. The future for MBS is bright. What’s our expectation for MBS? We anticipate starting at $2 billion and potentially more in annual EBITDA. As you know, we are pursuing a license in New York, and we have strong local backing. The building cost is projected to be around $6 billion, allowing us to create a genuine five-star resort. This presents a tremendous opportunity, and we are very excited about it. Our proposal is strong. If we are awarded the license, we plan to get started as quickly as possible. Thank you for being here today. I’ll now turn the call over to Patrick before we begin the Q&A session.

Thanks, Rob. We wanted to highlight some changes in the materials that we typically provide for the quarter. After discussions and review with the SEC, we will no longer be presenting hold-normalized adjusted property EBITDA in our press releases, SEC filings and supplemental earnings materials. These changes are being made to our materials for this quarter and for our reporting going forward. We believe that the analysis of our financial and operating results in any quarter will continue to benefit from an understanding of the impact of expected hold in our rolling volume segments for our reported results. We will continue to provide the impact of expected hold in our rolling volume segments for our earnings materials. Please see Pages 6 and 7 in our earnings presentation for an overview of the new presentation format. For this quarter, the quarter ended December 31, 2023, we generated $654 million of adjusted property EBITDA in Macao, a very strong operating result. It is important to note that we held 2.16% in our rolling segment in Macao. EBITDA would have been higher by $40 million in Macao had we held as expected in our rolling segment. At Marina Bay Sands for the fourth quarter of 2023, we generated $544 million in adjusted property EBITDA, another strong result. We held 4.57% in our rolling segment in Singapore. EBITDA would have been lower by $71 million in MBS had we held as expected in our rolling segment. It is also important to address our margin structure as we held as expected in our rolling line segments in Macao and Singapore. In Macao, our margins for the fourth quarter of 2023 would have been 35.9%, an improvement of 100 basis points as compared to the third quarter of 2023, if our hold was as expected in our rolling volume segment. At MBS, had we held as expected in our rolling volume segment, our fourth quarter 2023 margin would have been 48.8%, an increase of 170 basis points sequentially. It's important to note that both in Macao and in Marina Bay Sands in Singapore, we are generating revenue growth, EBITDA growth and when considering expected hold for rolling volume segments, margin expansion. We are very focused on the quality of our offerings and further investment to drive high-value visitation to our properties on the resulting revenue growth and our margin expansion over time. Looking ahead, we are excited about our progress in our markets, and we are focused on growth for the long term. Let's move to the Q&A portion of our call. Thanks.

Thank you. The floor is now open for questions. Your first question today is from Joe Greff from JPMorgan. Joe, your line is live. Please go ahead.

Good afternoon, guys. Thanks for taking my question.

Hi, Joe.

The premium mass experienced significant sequential growth and outperformed the base mass. Can you discuss how the base mass recovery has progressed throughout the fourth quarter? Additionally, we've observed a nice overall mass growth in the Macao market for January. As you mentioned earlier, growth continues to come in. Can you elaborate on the performance of base mass in January and if we are witnessing the expected uptick in that segment?

Thanks, Joe. As you know, we don't comment on the current quarter. The numbers speak for themselves so the market appreciation in Macao in January thus far has been published, a very encouraging continuation of December. As for our performance in Q4, I'll turn to Grant to talk about the acceleration of base and premium mass. Grant?

Yes, Rob. Thank you. Yes, Joe, the segment differential growth in the fourth quarter, we had 13% growth in premium mass and 8% growth sequentially on base mass. So I think base mass was progressing nicely through the quarter. It's just that premium mass had a great performance that exceeded that. If you look at the visitation trends during the fourth quarter, Macao actually recovered to almost 90% of 2019 levels on visitations. So I think the base mass is continuously progressing and building up. Transportation infrastructure has been improving. I think the demand to come, I think the desire to take advantage of the non-gaming events that have been coming on stream across our properties, but across the whole industry, have been very effective. So I think you should expect that growth pattern to continue.

Grant can also say – Grant, why I ask is it fair to say transportation and Visa, the whole lubricant that supplies the market into Macao is getting better year after COVID. It seems to me as if the ability to get the desire is there, but also the ability that this is improving daily. Is that fair to say?

Yes. The ability to get there has been improving, but the desirability of the destination is even clearer. You can see that the domestic flight to mainland key Greater Bay Area airports has all but fully recovered. And if you look at our ferry statistics, passengers that we carried in the fourth quarter recovered to 93% of pre-COVID, but only 52% of our sailing capacity. So clearly, people are enthusiastic about coming even though the transportation capacity is still recovering. And that's also clear, very gratifyingly the overseas, the foreign visitation recovered dramatically in the fourth quarter, especially from Southeast Asia, and that's great to see from Macao. And that's despite the direct flights from foreign countries into Macao, haven't recovered even by, I think, 60% in the fourth quarter versus pre-COVID. But the visitation now is getting back up to 80%, 90% of what it was before despite the flight connectivity still catching up.

Great. And then my follow-up…

Hey, Joe, before you proceed with your follow-up, I want to highlight something important that we haven't discussed in a while. We currently have the capacity to accommodate the growing base mass business as it enters the market. Considering our property portfolio and the investments we've made in amenities and attractions for the base mass customer, along with our ability to provide food and beverage, shopping, and entertainment services, we are well-positioned to serve this customer segment. It's key to highlight that the market has not yet reached full capacity. As more visitors come into the base mass segment, we will be ready to absorb that influx. What's your next question?

My next question is for you, Patrick. Obviously, it's nice to see $1 billion of buyback activity this past quarter. Do you view that as a sustainable level unless there's some huge volatility in the share price level?

I believe there was some activity during the quarter, and honestly, we saw the share price levels as an opportunity. When we consider our future capital return, we expect our share repurchase to be more heavily weighted in that regard. We fundamentally believe in the long-term value of share repurchases, the benefits of compounding, and the advantage of shrinking the share count, which affects the denominator. In terms of the amount, we will be measured over time. If you look at our balance sheet and the free cash flow we generate, we plan to be aggressive when the opportunity arises. We intend to run a program where we consistently acquire shares over time. However, I don't think we'll necessarily purchase the same amount going forward each quarter as we did this past quarter.

Okay. And then one final thing, congratulations, Grant, on your promotion. That's all for me. Thanks.

Thank you, Joe. Thank you very much.

Thank you. Your next question is coming from Stephen Grambling from Morgan Stanley. Stephen, your line is live. Please go ahead.

Hey, there. Sorry, can you hear me?

Yes.

Yes.

Sorry about that. So you may have touched on this a little bit, but as we think about the renovations coming up for the remainder of Sands Cotai Central/Londoner. Can you just maybe help contextualize how that will compare to the first renovation, both in terms of disruption and then contribution?

Yes. I think we'll turn over to Grant for that comment. Grant, Londoner?

Sure. Thanks, Rob. Thanks for the question, Steve. I mean, I think we can say in terms of the timeline, we have already commenced the renovation of the Sheraton Hotel, and that will continue through the whole of 2024, and we'll hopefully complete sometime in the first quarter of 2025. And yes, there could be some impact from construction disruption, especially as we go into the second half of the year. That a little bit depends on when the works are approved to commence on the Sheraton side of the casino floor, and also as well as the number of keys that will be our at any given time at the Sheraton. That said, I think we'll be managing this whole process just as we did in the first phase when we converted the Holiday Inn into the London starting in 2019. So, we'll be well used to yielding the rest of the portfolio. As you know, the yields we're getting at the Sheraton side of the building is lower than the rest of the portfolio. So, we will be trying to not miss any opportunity to yield the rest of the portfolio whilst the works are going on. And this is something that we've been doing throughout these existing building renovations. Right now, the schedule is still a little bit fluid, just pending some statutory approvals. But at this point, our expectation is the first half will be relatively normal and then expect to see some disruption into the second half. But then by 2025, we're going to be in a dramatically elevated and different position in terms of the entire Londoner. You asked about the Phase I and Phase II contribution. Well, we have done the bulk of the work in the public areas and external facade in the Phase I and the retail mall and one of the two casino floors, but we only touched 1,000 keys out of the 6,000 that we have. So, the main difference is that Phase II is going to address the majority of the hotel inventory in terms of renovation and of course, the other main gaming floor that we have on the Sheraton side.

Stephen, following up on Grant's comments, I understand there are concerns about disruptions in London, which is a valid point. However, I have two thoughts. First, if the market continues to grow as we are seeing with January's numbers, we may be able to mitigate those concerns by leveraging other assets in our portfolio. Second, regarding Grant's observation, when the Londoner transformation is complete, it will be a significant force, potentially on par with or exceeding other major projects. This provides us with two assets that we believe can generate around $3 billion on their own. While there may be disruptions in 2024, the years 2025 and beyond will present unique opportunities in that market. The top two assets are expected to remain the leaders in the market for years to come. So, while there may be some challenges, market forces might help us overcome them, and I believe the eventual outcomes will justify any difficulties we face.

That's all super helpful. Maybe an unrelated follow-up on Singapore. Looking at least at the visitation data, it seems like it was mixed at best, but yet you're still seeing that market grow sequentially from an EBITDA standpoint, revenue, I guess, what are you seeing from China customers coming back to the market? Any initial reason how we should be thinking about that building into next year?

I think I'm happy to give the floor to Rob. Please go ahead.

Go ahead, Patrick. I'll follow yours. Go ahead.

Yes, the main point about Singapore is that it's focused on the quality of tourism. We have emphasized investment, which we've discussed in previous calls, indicating that with higher-quality assets, we will attract higher-quality tourists, and that's evident here. It's not about the number of visitors or a complete recovery; instead, we're seeing a significant influx of high-value tourists. Singapore is an attractive market with a growing number of high net worth individuals, numerous family offices relocating there, increased business activity, political stability, a solid tourism infrastructure, and a strategic location—all factors benefiting the overall Singapore market and driving our business. There has been an increase in visitors from China, but there is still more potential. Visitor arrivals are currently at about 50% capacity. Additionally, there are plans to possibly implement a visa-free policy this year, which we hope becomes a reality; while we can't be certain of the details, it would be beneficial. Importantly, this quarter's results come from a building still under construction, lacking its full complement of amenities, which will be available by mid-2024 and 2025. This situation highlights the market's potential and the capabilities of this building. As Rob mentioned regarding our outlook for this business, we are quite optimistic. Ultimately, the focus should be on high-value tourism rather than solely on the total visitor numbers as a measure of our business's potential.

I believe Patrick's comments are very accurate, Steve. We are facing limitations due to the capacity constraints of our building in MBS. Unfortunately, our number of suites is limited, despite the potential for significantly more. Mass market tourism is equally important to us as attracting the right tourists. We currently value this asset at $2 billion in annualized EBITDA, and we expect it could grow by 10% to 20% over the next three to four years. Additionally, once we finalize our plans with the government, we anticipate that a new building could open later this year, potentially increasing our projected EBITDA to $3 billion by the end of the decade in Singapore. We envision our growth moving from $2 billion to $2.2 billion, $2.3 billion, $2.4 billion, and eventually reaching $3 billion. There is significant potential for growth in this asset, especially as we recover from COVID. Our only frustration in Singapore is the lack of additional space since it's a very sought-after market. This building is likely the most valuable hotel structure ever constructed and will likely accelerate in value over the next three to five years until we can confirm a final deal in Phase II.

Makes sense. It’s all helpful. Thanks so much. Best of luck.

Thank you.

Thanks, Stephen.

Thank you. Your next question is coming from Carlo Santarelli from Deutsche Bank. Carlo, your line is live. Please go ahead.

Thank you. Hey, guys. Rob, you touched on it a little bit just there, but I was wondering, obviously, there's a ton of moving parts with COVID and everything else, but $1 billion in Phase I at Marina Bay Sands. Returns on that product look to be very favorable, $750 million over 2024 and into 2025. I was wondering how you think about returns there? And then to your point there at the end of your last comments, when do you expect to have an update around the timing and perhaps the spend on the larger scale projects there?

I'll just reiterate how much we believe in Singapore as a market. My comment is about $3 billion. We actually believe retainable when we opened this new building late in the decade. As for the update, Patrick's been right in the middle of that. So Patrick please take it away in terms of Phase II Singapore.

I find your comment intriguing. The main point for us is that we are focused on investment. The more we invest in high-quality assets, the better our service levels will be, which will enhance our pricing, allow us to differentiate our product, attract high-value tourists, and ultimately grow our EBITDA and margins. We're witnessing this firsthand in Singapore. We expect to complete the third tower by Chinese New Year next year with an investment of $750 million. Some amenities will be finished in parts of 2025, but by mid-2025, we will essentially have a completely renovated building showcasing the full potential of our offerings. Visitors will benefit from the premium experience, shopping, entertainment, and unique lifestyle programs that we provide. These enhancements are designed to encourage repeat visits, ensuring that our investments yield substantial returns. This is why we were committed to this strategy, and the board fully supported it. You can already see the trajectory of EBITDA, and we believe that Tower 3 will significantly contribute to our growth. We are confident in the numbers Rob mentioned. Regarding the next building, IR 2, we have been in close discussions with the government for several months. There are many factors to consider and requirements to fulfill since this is a project of national importance. We are working to ensure everything is in place for the necessary approvals, and we are optimistic about making progress in the next quarter or two. Our visits to Singapore have reinforced our confidence, and we hope to receive the approvals needed to move forward soon.

That's all I need. Thank you guys. Helpful.

Thank you, Carlo. Appreciate it.

Thank you. Your next question is coming from Shaun Kelley from Bank of America. Shaun, your line is live. Please go ahead.

Hi. Good afternoon, everyone. I wanted to offer my congrats to Grant on the promotion as well. And maybe speaking of promotions, Grant or whoever, if you could comment a little bit just on the promotional environment. I mean, I think this is a big question or theme that came out of the quarter last quarter and just sort of what you're seeing, particularly at the upper end of the premium mass segment right now? And in general, are premium mass market margins consistent with your pre-COVID expected ranges, or are they still a little bit below that? And what would it take for them to recover? Thanks.

Grant? Shaun, that was good. By the way, thank you.

Thank you, Shaun for the question. I think if you look at the competitive landscape, of course, it is very intense at the premium mass segment. But if you look at also at our margin structure, I think the way we've driven our business is no different from before, which is to really drive and elevate the product and to drive the content and the events that we put on across a whole range of sectors to attract visitors and patrons. And I do think that back to Patrick's opening comment, if you look at that margin progression, underlying margin grew another 100 basis points. We actually saw a good improvement in our mass margin sequentially. So we are dealing with the competitive market as any competitor does. It is intense, but we believe strongly that in the end, product wins and Londoner and Grand Suisse at Four Seasons are testaments to that argument; that good product wins. And there are going to be fluctuations in the competitive intensity in particular segments at different points in time. But to have a sustainable competitive advantage and sustainable profitable growth, product and service and the content we put into the resort calendar are still going to trump everything else. And you can see that through what we've done at Londoner, which is already at a run rate of close to $800 million as it was exiting the year. And you can see that the way this is going, we will end up with a margin structure as we already are in Q4 back to the same level as we were in 2019. And then as the revenues continue to grow, you should logically expect that margin to continue to improve and therefore, exceed where we were in 2019.

Shaun, I would like to build on Grant's comments. My experience has consistently shown that no matter the market conditions, outstanding buildings and exceptional experiences always succeed. We have those in Macao. In Q3, our EBITDA not only surpassed that of our closest two competitors combined but also highlights the strength of our properties. While we may face some promotional challenges from time to time, we possess a structural advantage that cannot be overlooked. We have significantly more capacity in lodging, food and beverage, retail, entertainment, and gaming, which will allow us to improve both our margins and EBITDA. Although there might occasionally be promotional issues, they shouldn't be a concern for our business. Our margins and overall market position in Macao remain strong across all segments.

Thank you, Rob, for that. And then maybe just as a quick follow-up, last quarter, it was mentioned, Grant, I think in one of your comments or one of your responses, a little bit about a bit of an uneven recovery we were seeing coming out of some of the source markets from broader Mainland China, as some of the air travel reopening. Wondering if we're continuing to see that uneven recovery or just any other broader signs of the kind of where the macro situation sits in China? Because so far, and again, seems to be continuing through January. Seems like Macao is relatively unaffected there, but I wanted sort of an update on that trajectory, if you could give one.

Sure, Shaun. I think if you look at the fourth quarter, it did even have quite a bit. I think if you look at bans visitation from non-Guangdong versus Guangdong slides…

Page 20.

Are catching. Yes. Thanks, Dan. We're catching up significantly on the recovery rate in non-Guangdong. That said, it is still uneven in the sense that if you look at the breakdown by province, some of the wealthier provinces, have recovered way beyond pre-COVID levels of visitations, particularly in the Yangtze River Delta versus even Guangdong, the recovery rate is actually much higher. But overall, I think you can see an evening out in terms of the recovery rate in Guangdong versus non-Guangdong. And then also, I think the fourth quarter, the overseas, the foreign country visitation also started to accelerate and even out as well against the nearby region source markets. So I think you are seeing I think, a progressive improvement across all the source markets. I don't know, maybe Wilford, I don't know if you have anything to add on the China side in terms of the – the economy.

Yes, Shaun, China is still recovering from the tough COVID period. And – but what is evident is the company's quarterly performance has actually been trending well. We have seen, as Grant alluded to, healthy growth in the number of visitors, especially from the non-confidential region. Now one observation is that when long-haul travels of Chinese travelers has not fully recovered, Macao is emerging as a top tourist destination for short-haul drivers from the Chinese mainland.

Thank you, everyone.

Thank you. Appreciate it.

Thank you. Your next question is coming from Chad Beynon from Macquarie. Chad, your line is live. Please go ahead.

Afternoon. Thanks for taking my question. I wanted to ask one, just about the retail portfolio. We've been hearing and seeing a little bit of pressure just kind of in the luxury retail space, particularly in Asia based on the numbers that you put out, and I guess, the turnover rent that you collected, you're not seeing that. But how are you thinking about the recovery in retail? Are you getting the right customers in there now? And do you think this could continue to improve as visitation and overall spend improves in 2025 or 2024? Thank you.

If you look at your deck on, I think it's Page 28 and 29, it gives you a pretty good look at our retail portfolio in Asia and be blunt about it, how it could be in half of these numbers, almost $3,000 a foot and a 600,000-foot more at MBS. Finished $2,000 a foot with 800,000 feet, of course, $9,200 a foot at the Four Seasons luxury and a mere $4,200 a foot on the non-luxury, so the answer is we are seeing our retail portfolio that's approaching $700 million of contribution and growing. Of course, there's discussions out, they'll be mentioned a slowdown globally. But it looks to me that I spoke to David, because they are retail experts. It feels like we continue to see opportunity to remerchandize and get better and better at the retail segment. We still believe that retail has a long way to go. Our buildings are a little different than other retail in that we attract a higher value customer, both in Macao and Singapore, as you reference the lack of supply in Singapore. So I think that mall just keeps appreciating and we keep remerchandizing it to be more effective every day, more luxurious, more upscale. In Macao, we've got work cut out for us in some of our buildings, not there yet in the Parisian. There's some work to be done, but I don’t know how you could argue with these kinds of results, $677 million of contribution, and it just keeps accelerating. It compares very favorably with 2019. So we feel very bullish about our retail prospects. And again, it takes work. David Sylvester constantly remerchandizes things and reassesses the portfolio. He's got a lot of work to do. But the numbers, I think, are stellar and I think we'll continue to be stellar for years to come.

Thanks, Rob. Makes sense. And then just in terms of the hold, understanding that it's kind of random here in terms of luck or unlucky. Has there been any difference in terms of gameplay or you talk about kind of the recovery from the Chinese consumer? And I'm speaking of Singapore, but hold has been high now for three quarters. So is there anything that could kind of lead to maybe an elevated hold in that market in the near term, or should we expect kind of the reversion to the mean that we've seen in prior quarters and years? Thanks.

I think it's safe to say this business always runs on mathematics. The mathematics prevail, and I wouldn't take three quarters as an ongoing trend forever. There'll be a dark day in Singapore will miss by $70 million, because we take the highest volume players in the world, people who bet lots of money. And some days, it goes with you and some days it doesn't. This quarter, obviously, in Singapore went with us. But I would caution you, I don't think that the bettors are changing. In fact, if any, there's more of them, more affluence coming out of Asia, and we're fortunate enough to have the capacity to handle all of it. But I don't think you can point to a change in betting patterns in either jurisdiction that would elevate or hurt the hold percentage. It will revert to the mean always. And Macao will come back next quarter probably and do $70 million higher, and Singapore may have a bad quarter. Grant, do you have any comment on that? That's how I see it.

That's exactly right, Rob. And people have relatively short memories. But in the fourth quarter of 2022, there is like $100 million plus adjustment on the downward impact from low hold at Marina Bay Sands. So I think one or two, three, four even five quarters is actually a relatively short period of time and sample size for you not to get potentially very random results that deviate from the expected normal hold. But I think it's fair to say, yeah, the mathematics always prevail. And given the scale of our business, over time over one year, two years, we should stay very much in the expected range. As you saw in Macao as well, we had the first three quarters holding significantly above the expected mean hold and then fourth quarter reversed. And for the whole year, we end up at about 3.3%, which is exactly where we expect it to be.

Going back about eight to ten years, we experienced a series of difficult quarters due to a few players in Indonesia or Malaysia, resulting in significant losses each quarter. Some Board members expressed concerns and wanted reassurance. We reviewed everything and felt very confident. There was a belief for some time that these players were unbeatable, but ultimately, they lost all their winnings and then some. It typically goes this way. I don't think it's wise to get overly emotional about any single quarter. It's noteworthy that while Macao underperformed, Singapore exceeded expectations. However, the fundamentals of the games remain consistent; the distinction between pairs and ties versus straight bets is important. Asian gamblers are unique; they are reliable and valuable customers. I wouldn’t allow the success of a few quarters to alter your understanding of backlog mathematics. We maintain that perspective, so thank you.

Great. Thank you.

Thanks, Chad.

Thank you. Your next question is coming from Robin Farley from UBS. Robin, your line is live. Please go ahead.

Great. Thank you. Two questions, if I could crease it in. One is just any comments on Chinese New Year upcoming anything with trends approaching that? And then Cole-related just your latest expectations for timing of a decision in New York? Thanks.

I'll start with New York, Robin. Governor Hochul commented this week about some developments expected this year. I hope that's accurate. As you know, we have been working in New York for a considerable time and we believe we have a strong proposal. However, I don’t have any specific insight on whether it will come to fruition. We certainly hope the Governor’s remarks are valid, and regardless of the outcome, we expect a decision in 2024. Beyond the Governor's comments, I can't provide more insight. We have put significant effort into this project and believe we have a solid chance, but I can't offer guidance beyond that. Regarding Chinese New Year, do you think there will be any activity around that? Will the year of the dragon attract visitors to the building?

Well, Robin, I mean, we can't really comment on the current quarter and obviously, booking windows are short here. But I think you can see from the December holidays in these peak holiday periods, even though the end of December is not a big China holiday. It is in Hong Kong and some other parts of the region. But the ramp-up in demand during those peak periods was tremendous. So hopefully, that will be replicated through into this Chinese New Year as well. So there is a lot of optimism and expectations that this will be a strong one, yes.

I believe December was really great, and the numbers that came in were excellent. With the market data for January, we are very hopeful that the year of the Dragon will be a significant year for us in the market.

Thank you, Robin.

Thank you. Your next question is coming from Brandt Montour from Barclays.

Good evening everybody. Thanks for taking my question. So in Singapore on the Phase II, I was wondering if you could maybe remind us the total room count exiting the year and then specifically with regards to disruption cadence what is the quarter-to-quarter and overall year look like in terms of how that will flow through the P&L?

Patrick, do you want to grab that?

Yeah. So, yes, sure. So I think when we finished the year, we were around 2,200 keys available next year because of the construction in T3, Tower 3, we're going to get down to the mid-1,600 in Q3, it's probably going to be our peak of disruption. But those rooms are smallest right now and really have our lowest yield. So hopefully, the impact will be minimal, and we'll be able to yield because of the compression to higher-value customers. The performance today on Sands has been quite good, and you think we'll be able to yield up in the renovated portion of the building. Sorry, what was the rest of your question?

And sorry, so then the ending key count when all is said and done with suites and normal rooms?

It's mid-1800s.

Mid-1800, perfect. Okay. And then as a quick follow-up, just a broader question. We haven't really talked about non-gaming spending. I was just curious if you could give us an update on your efforts on that front and maybe how your outlook has evolved for the return profile as we sort of go into 2024 on non-gaming spend?

When you say non-gaming, can you be more specifically talking about retail, food and beverage, hotels?

Of course, sorry about that. Yeah, with regards to the concession agreements.

Oh, I see. Okay. I'm going to let Grant handle that, but I would say we are a little bit different than the rest of our competitors in terms of we've been spending money aggressively in Macao forever for 20 years on entertainment and other things. We believe it's a huge value add. I'll let Grant take the question specifically. But I think, again, it's important to note, we are a different animal than other people in terms of this concession. We welcome it. We've been doing it before the concession mandate. I think it's been very beneficial to our company. Grant?

Thank you for the question. In 2023, we made significant investments in all the non-gaming categories we committed to in the concession. As Rob mentioned, many of these areas are ones we've been involved with for a long time. For example, in entertainment, we hosted nearly 80 shows throughout 2023, achieving remarkable attendance records. A highlight was the Jacky Cheung concert at Cotai Arena, followed by a successful 14-show run at the Londoner featuring a popular singer from Hong Kong. This has likely set a new benchmark for various residencies in Macao. Additionally, we've invested heavily in other areas such as MICE, art and culture, themed attractions, and gastronomy. Overall, our investment in the first year of the 10-year plan has significantly exceeded our initial forecasts in 2023, and we intend to continue this trend in 2024. Wilford, would you like to share more about the non-gaming projects and events we are investing in?

Yes. We have, in the past years, been investing heavily in the areas that Grant just described. And by a long way off, we are the leader in the MICE market. So we are still seeing a very strong presence of MICE activities in our properties. For non-gaming, apart from the shows, we've been helping to promote Macao as a destination, not just for gaming. Therefore, we have a lot of art exhibitions, cultural shows that really put us apart from the other competitors.

Great. Very helpful. Thanks, all.

Thank you.

Thank you. Your next question is coming from David Katz from Jefferies. David, your line is live. Please go ahead.

Hi. Good evening, everyone. Thank you for taking my questions. I have two questions to ask at once. First, regarding share repurchases, I’m not inquiring about the specifics of how much or when, but I’m interested in the family's long-term perspective on their stake and how it might evolve over time. Secondly, since our last earnings call, there has been significant activity in Texas. I would appreciate your insights on the family’s activities in relation to the company and shareholders. Thank you.

Sure. So I think first off, I think we see value in both equities. So we're very long-term bullish. From a company standpoint, we're going to continue to be aggressive, as you said before, focusing on investment for growth. Do you see the success of our capital allocation programs, both in Macao as Grant just described in Singapore in driving growth in high-value tourism in diversifying our amenities and by creating margin and revenue expansion. So we're very focused on investment for growth. That being said, we generate a lot of free cash flow, and we anticipate to generate free cash flow in the future that we'll be able to use to return capital to shareholders. So I think the company will look to be aggressive and measured over time as we return capital to share through share repurchases to shareholders. I think we've always had a dividend is not from the pandemic. I think we like having a dividend. We think it's helpful for shareholder returns. We think it's an important component of our overall shareholder value strategy. But that being said, we're going to be overweight to share repurchases. In terms of Texas, I think the most important thing is that Las Vegas Sands is actively trying to facilitate the development of integrated resorts in the State of Texas and through the liberalization of gaming. And so we're very excited about it. We think it's an unbelievable market. Over time, we hope that it happens. I can't tell you when it's going to be, but we're very focused on it as a company, and we like the opportunity to develop some very unique tourism assets, specifically in Dallas. We think that's a great market. We've been very focused on it. And we think the opportunity there would be a great one. In terms of the family's activities in Texas, I think we like the state. We're very obviously happy with our investment there. We're very excited about it. And we'll look to be part of the business community there. But in terms of LVS, we're very focused on bringing integrated resource to decimate resource, the State of Texas and the development opportunity that would exist there.

Hey, good afternoon, everyone and thanks for taking my questions. I wanted to follow-up on Sands China and as it relates to capital allocation. Your net leverage there, I think, is around three times at this point. It should be much lower than that as you kind of make your way through 2024. How do you think about the subsidiary there resuming dividend payments up to the parent? And then obviously, your stake went up a little bit through the quarter through those debt repurchase. So maybe does that incentivize some of those dividends coming up sooner than later? Thanks.

If it's okay. I'll take that one. I think the key thing here, as I just mentioned in the prior question, and as Grant mentioned, as Wilford mentioned, we're very committed to investing in the long term in Macao. And so our primary focus is going to be deploying capital there for growth. That being said, we are generating meaningful free cash flow there as we did in this last quarter. I think what you'll look to see over time is that some of the leverage that we put on the balance sheet during the pandemic will decrease. So we have a maturity coming up in 2025. We'll look to decrease some of that in front of the refinancing. And our goal is really to bring leverage down in terms of quantum, but then also our leverage is going to come in naturally as our EBITDA stands over time, which is our expectation. So I think once that occurs, we're going to start looking to begin the dividend again at the Sands China level. That's something that's going to be determined by the Board there. But I think overall, it's something that we'd like to see. And I think the goal is to begin that dividend in the years ahead. It was a very strong dividend payer in prior years pre-pandemic. And we'd like to become an investment-grade name there, keep that investment-grade rating, invest in the future in terms of scale and scope to grow our business there and then return excess capital through dividends to shareholders there. So that's the plan.

Got it. And then just for my follow-up, as you think about Macao, we've talked a bit about the margins and the improvement; more or less, it's been about 100 basis points quarter-over-quarter. As you think about kind of the trajectory from here, and I know you're on pace to get back to those 2019 levels, how should we think about maybe the pacing of improvement? And do you think that operating expense structure is really in place at this point, you should benefit from scale here on out?

I have one quick comment and I'd like to turn it to Grant. We've mentioned this a few times in the past couple of quarters. I think the story of our margin expansion in Macao is going to be based on revenue growth. As the market continues to recover, as tourism continues to recover, as more high-value tourists come online, they see the types of high-quality offerings lab, they experience the amenities and the entertainment that Grant referenced earlier, we're going to continue to grow and expand our customer base. And that will lead to pricing, that will lead to expansion, that will lead to revenue growth. So, from that standpoint, I think our long-term margin view is expansion because of the investment and because of what we just described. But I'll turn it over to Grant to see if he has some additional comments.

Yes, Patrick, I believe you explained it well. It hinges on revenue growth; as the market expands, we will be actively involved in that growth, leading to an upward trend in margins. We definitely have a more efficient and productive cost structure now compared to 2018 and 2019. We are gaining from this efficiency as revenues increase, giving us operating leverage on fixed costs. This trend will continue, and it largely depends on how revenue grows from this point. As revenues increase, we will see further improvements in our margins.

Got it. And congratulations on the promotion, Grant.

Thank you very much.

Thank you. Your next question is coming from George Choi from Citi. George, your line is live, please go ahead.

Thanks for taking my questions. My questions were answered earlier, but do have a housekeeping question. Would you please remind us how the overran mechanism works at the Macao properties? Should we expect a normal uptick in the quarter? That is when you guys receive for rent? Thank you very much, I will come back to the queue.

I'm sorry, George, I think we missed that. Could you repeat yourself? It was unclear; there was some difficult static, yes. Can you try again, George, about Macao?

Apologies. So, I just wonder how the turnover rent mechanism works in the Macao properties. Is it a fourth quarter event? Is that when you receive your turnover rent?

Grant, do you want to handle the fourth quarter turnover to retail.

George, there are leases that are on monthly turnover rents and there are leases that are on annual turnover rents. So, historically, what happens is for those annual turnover rent leases, as we get into the third quarter, the end of the third quarter and the fourth quarter, we will obviously be recognizing more of those turnover rents, as we hit the annual sales targets. So, historically, you should expect seasonally the second half of the retail rental revenues will be higher than the first half.

Okay. Understood. That's all I have. Thank you very much.

Before we finalize the call, I want to reach out and recognize the great contributions of Wilfred Wong, who is now Executive Vice Chair. Wilfred has been with us about eight years and made a great contribution. And Wilfred, congratulations on the elevation of Executive Vice Chair. Grant Chum, well deserved. We hired Grant many years ago; the big concern was, was he old enough to win the casino at that time? And over the years, he's aged sufficiently so he did not win the casino. Congratulations to you, Grant. Both of you guys have built a terrific team over there. We're very proud and grateful for your efforts and look forward to many more years working together. Thank you for your time today and interest in our company. We bid you adieu.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.