Good day, ladies and gentlemen, and welcome to the Sands Third Quarter 2023 Earnings Conference Call. At this time, all participants have been placed on listen-only mode. 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, Paul. Joining the call today are Rob Goldstein, our Chairman and CEO; Patrick Dumont, our President and COO; Dr. Wilfred Wong, the President of Sands China, and Grant Chum, EVP of Asia Operations and COO of Sands China. Today's conference call will contain forward-looking statements. We will be making those statements under the safe harbor provision of federal securities laws. The company's actual results may differ materially from 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 may 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 thanks for joining us today. Macao diluted $630 million of EBITDA for the quarter and we are only eight months into our post-COVID reopen. These are early days. We began in Q1 with $400 million of EBITDA; Q2, we did $540 million of EBITDA; and Q3 is now at $630 million of EBITDA. Look forward to growth in both the gaming and non-gaming revenue to lift the entire market. SCL (ph) the largest share of non-rolling table win, rolling table win and slot ETG win. We've always believed that completed Londoner will meet perhaps exceed the earning power of the nation. Our future growth in Macao is tethered these powerful assets which have all the variables necessary to drive growth in years ahead. Whether it's rooms, gaming capacity, retail, entertainment, food and beverage, we have stellar assets. There is speculation about future growth of Macao. A relevant question is, can the market grow to $30 billion, $35 billion, $40 billion of GGR and beyond? We are firm believers that it will and may occur much -- a much shorter timetable that anyone realizes. This underscores our confidence and the returns will be generated by our capital investment programs in our portfolio. We are staunch believers in the growth of Macao market near and long-term. LVS has invested $15 billion in Macao, which is the most important land-based market in the world. A few reference points to consider, third quarter EBITDA represents strong growth compared to previous quarters, as I mentioned. Our retail business in Macao has far exceeded pre-COVID numbers. I expect the gain portion of our business to follow the same trajectory as Singapore and accelerated 2024. [Technical Difficulty] MBS and Singapore. Six quarters into a reopening, MBS delivered a $490 million quarter. The power of this building is evident based on the results despite the disruptive impact of our ongoing $1.75 billion renovation program. Disruption notwithstanding MBS is hitting on all cylinders from a gaming, lodging and retail perspective. Slots and ATG (ph) MBS are approaching $1 billion annually, non-rolling tables are exceeding $20 million of drop per day. The ADRs are escalating and our retail component is going far beyond pre-COVID numbers. MBS is a testament that quality assets prevail and validates the thesis that reinvesting in our assets will generate sustained returns. MBS has it all (ph), an iconic building with superb decor and service levels, which attract the most desirable customers in every segment. At the completion of both phases of our refurbishment program, MBS will feature 770 suites. We used to have 200 suites before the refurbishment. There is no denies future. How far can MBS go? Our expectations starts with $2 billion or more in the future of annualized EBITDA. Finally, we're bidding for a license in New York. We have secured the Nassau Coliseum (ph) and the process of gaining necessary selling requirements to move forward. We're also receiving strong local support from the local community. The resort will cost in excess of $5 billion, but enables us to develop a five-star resort with unlimited appeal. This is simply an extraordinary opportunity. We are very excited about the prospect. Our bid is compelling, that we award the license who will be in the ground as quickly as possible. Thanks for joining us again. I'm going to turn the call over to Patrick before we move on to some Q&A. Patrick?

Thanks, Rob. I would like to cover two important topics before we get on to your questions. The first is the long-term margin structure we expect in our Macao business. As the Macao market revenues continue to recover, our margins will naturally benefit from an improved business mix. This quarter, our Macao EBITDA reached $631 million at a 35.3% margin, which is an increase of 210 basis points compared to the second quarter of '23. As revenues continue to grow, we expect our margin to exceed the 36% of Macao business in 2019. This quarter, the Malaysian Macao grew EBITDA to $290 million, with margins reaching 40.1%. This is an example of a property achieving strong revenue recovery with financial performance and margin that reflect the improved business mix. The Londoner Macao grew EBITDA to $167 million during the quarter, with EBITDA margin expanding 660 basis points sequentially to reach 32.2%. The strong flow-through of revenue to EBITDA reflects the operating leverage of our business, once the fixed costs have been covered. The transformation to Londoner has created a world-class product that is a must see for visitors for Macao. We will naturally have some construction disruption in 2024, but we expect future EBITDA growth and margin expansion over time, so that's Macao. The second item I wanted to cover is an update on our plans for the return of capital to shareholders. Our Board of Directors has authorized a $2 billion share repurchase through 2025, and we're looking forward to restarting our share repurchase program. In the nine-year period from 2012 to 2020, we returned over $22 billion of capital to [Technical Difficulty] shareholders in the form of dividends and repurchases, which was split roughly 80% dividends and 20% to share repurchases. As we consider our future capital return, we expect share repurchase will be more heavily weighted than dividends. We believe repurchases will be more accretive in dividends over time as they reduce the denominator. We fundamentally believe in the compounding long-term benefit of share repurchases. So that's the capital return update. [Technical Difficulty] again today, and let's move to Q&A.

Thank you. Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] And the first question today is coming from Carlo Santarelli from Deutsche Bank. Carlo, your line is live.

Hey, guys. Patrick, thank you for the additional color. Rob or anyone over in Macao maybe this one’s best for. But as you guys think about the base and the premium mass. It looks like in the quarter, you guys kind of converted some premium mass tables to base mass tables. And obviously, with the increases in visitation that makes sense. Is that something you expect to do going forward? Do you have what you need basically in terms of the premium mass footprint in terms of table count at this point?

Yeah. The beauty of our business model is we've got plenty of capacity to do everyone. We will move to the market. As you saw in the quarter, we moved tables around to accommodate where we saw demand. But again, with the number of rooms and our table capacity, we can grow into any market in any segment that shows strength and that's what happened here. The truth is, I expect that to both move forward in the future and show growth both in base and premium. But our assets are built to be just this, which is versatile, able to accommodate the market. Grant may have some color on that's true of any market. The only difference in this market for me is, we did such a huge amount of table supply that we're very nimble. Grant?

Yeah. Thank you, Rob. Yeah. I think the repositioning this quarter for more towards base mass tables, that's just a natural part of our optimization between the segments and of course, as you rightly referenced, the summer saw a big increase in visitation and the base mass business. So that was just a natural repositioning to optimize the table count. As you can see, sequentially, a win per unit increased substantially in premium mass up 19% and base mass, even though we reorientated the table count towards base mass, we also increased the win per unit by 7% sequentially. So I think that you can see very clearly that we actually did optimize pretty well for the quarter between the two segments in terms of table capacity and these numbers will change again as the market evolves depending on which segment is growing faster.

Great. And then -- thank you for that. Patrick, if I could just kind of follow up on the Venetian and acknowledging that there was some high hold in the period on the VIP side. But it's a relatively small number in terms of revenue. As you think about kind of the margin profile, the 40.1% margins in the period at the property kind of rivaled '19 despite annualized third quarter net revenue being down, I think, close to 18% versus what you did in 2019. If we think about that gap, that odd $600 million flow-through, getting back to kind of '19 net revenue levels at that property or any other property. How would you think about kind of the incremental flow-through on that incremental net revenue and perhaps we could obviously take it from there to get a sense for where margins could kind of prove out over time?

So it's a great question. I think for us, the first thing is, this is what happens if you cover your fixed cost base. So when we were 70% recovered, we had to cover our fixed cost base in Macao. And as the market recovered and as tourism and visitation continue to grow, we will reach our run rate margin levels, which we always felt was in this context. So what do you see the Venetian is a result of a great product that has, is really an example of a property reaching a more run rate level of operation post-pandemic and the performance in margins that result. And we feel very strongly that the Venetian Macao is going to run as mass visitation continues to return to the market. Remember, Macao visitation is still about 20% less than it was pre-pandemic, we're down about 1 million visitors in the same period. So we feel very strongly about the margin potential. We're very proud about what's going on to The Londoner. We think the market is starting to understand that product operate it is, and we’re starting to see the results in terms of productivity in terms of margin. But again, in that product as well, we think there’s more room to run. So I think it’s a great testament to the team there, the work they’ve done to grow these businesses. But to be fair, we think there’s strength in margins to continue as revenue continues to come into the market through visitation.

Great. Thank you very much guys. Appreciate it.

Thank you. The next question is coming from Joe Greff from JPMorgan. Joe, your line is live.

Good afternoon, guys. Before COVID, you guys used to disclose department margin ranges for base mass table games and premium mass table game ranges. I think base was 35% to 45% and premium mass is 25%, 40%. Are those margin ranges or the midpoint and higher still viable or does The Londoner and that ramp and clearly is in ramp mode right now, does that cause those ranges to be more middle or the lower end of that range is in the aggregate in Macao?

So I think for us, because of the mix of business and where we're investing, we sort of run the business in aggregate. So what we're looking at is the 40% margin that Venetian just put up in the quarter and the 660 basis point expansion in margin that The Londoner saw as the market discovered how great it was, and we started getting more visitation and more growth. So I think for us, that's really how we're looking at it. Departmentally, I think we manage the business overall. And as Rob said earlier, we're going to shift assets to the segment that is most productive and provides the best returns. So I think for us, we're not really looking at that as a guide. We're really looking at overall productivity of our asset base in total. I think one thing that's interesting to consider is, so in Macao, room occupancy was 96% versus 95% in the same period in '19. But the thing that's interesting is we're actually driving more daily casino nights at higher yields per room. And so in the premium mass segment, we're seeing a recovery, but our base mass segment is starting to recover strongly. And this is really what you see is, the businesses that used to support Macao mass tourism continue to come back online after what was basically a three-year hiatus. So this increased visitation will drive base mass revenue growth, and we'll start to see margin return to a more normal mix. So I wouldn't look at the departmental. I would look at the recovery in the aggregate margin of the operating asset. That's kind of how we're managing the business, and we're trying to manage segments throughout.

And then we look at EBITDA.

And then we look at EBITDA, which is the most important effect. Thank you, Rob.

Thanks. And then with respect to the buyback, that was great to see, Patrick. Do you look at that as more episodic or opportunistic? Or do you look at it as there's a minimum consistent minimum level or a consistent level per quarter per year that you would look at?

I think we're going to be measured across time. I think we want to return capital through share repurchases in a meaningful way. We think there is a real benefit to reducing the denominator. We think it's accretive. We think there's a compounding effect in share repurchases. And so we're looking forward to do it on a regular basis. The amounts to be determined. But for us, you see the size of the authorization, you see our balance sheet strength. You see the amount of cash flow we're generating down in the business. And we're going to go out and be aggressive. I think for us, we fundamentally believe in the dividend. But if you look at that split that we had, let's call it, pre-pandemic of a return of capital story (ph), I think we're looking to be majority share repurchases and get that benefit. And so if you look at how we've returned capital historically in a regular and repeatable way, I think we're going to look to do that again.

And Joe, it can't help, but be somewhat opportunistic as we look at the market. Our stock is trading roughly COVID levels, and we think our buildings are going to make $5 billion (ph) and more $40 billion, $50 billion in the next decade. It's hard not to look at the stock in [indiscernible], that's opportunistic. On the other hand, we also like to be long term and be consistent. So it's kind of a mixture of both. But it's hard for us to sit here today and look at pricing as if we’re close to Macao or half open to Macao and Singapore, not think there’s opportunity, but we also have a long-term perspective.

Great. Thanks a lot. Thanks, Patrick. Thanks, Dan.

Thank you. The next question is coming from Robin Farley from UBS. Robin, your line is live.

Great. Thank you. I wonder if you could give us some thoughts on kind of what is holding back that lower spending customer. It sounds like transportation bottlenecks are no longer really the issue in Macao, if it's the RMB depreciation? Is that something we have to kind of wait for that to anniversary next year or I guess what do you think will change that the kind of visitor levels for that lower spending segment? Thanks.

Yeah. I think it's interesting. If you go to Page 16 in our deck and by the way, we debate this all the time. I think the team on the ground there is very focused on it. I think what you'll see is that visitation is from China, excluding Guangdong is 72%. [Technical Difficulty] Guangdong is back to 92%, but if you look at the air lift, Macao Airport was only at 64% of 2019 capacity in the quarter, and Hong Kong was only at 63%. So it's a pretty meaningful difference and so frictional transportation difficulties are still real, and they're getting better. Customers can get to Macao more easily in this border than they could before. But we're still not back to normal. And so what we're starting to see is, I mentioned earlier, some of the infrastructure for mass store groups are returning, which is very positive, starting to see some of the increased volumes due to their visitation. Some of the higher-value customers, premium mass customers and the IP customers, airlift isn't great. And some of this airlift coming into Macao was domestic and some of it's -- some of it's international. So I think for us, as we see this airlift capacity recover, we're going to start to see more entertainment (ph), of course, benefit not only us, but also the entire market is where people are able to get here more easily. But I think the recovery story is not fully there in terms of air travel and in terms of accessibility. I think it's on the way, but it's not fully back.

I guess I'm thinking that the air travel wouldn't necessarily be -- where the lower spending customer will be coming from there, and high-speed rail, I think is back to pre-COVID levels. So I just -- is there anything else that you think is impacting if that needs to change, whether it's policy in Mainland China or it’s kind of anything else outside of that transportation issue. Thanks.

Grant, do you want to jump in here?

Sure. Yeah. I think, Robin, the -- Patrick referenced 72% out of non-Guangdong, Actually, if you look at the regional differences between provinces, I mean there are some of the higher spending provinces are actually way above 2019 in terms of visitation and some are lower than 2019. So I think there are just some regional differences depending on the whole host of factors ranging from the transportation to the availability of hotel rooms and so on and so forth, and their propensity to go cross border in their trips. I mean this is the first set of summer holidays since COVID. And then, I think what you see is actually a very strong acceleration in that non- Guangdong visitation this quarter. So we're really up 22% over visitations, but within that Mainland China is up a lot more sequentially. And that is also reflected in the property visitations that we saw this quarter, the 17% increase in the base mass revenue that we saw. So it is picking up, but it just accelerated at a different pace from the premium mass, which as you know, came back right from the start in a stronger fashion than the base mass. So I think as more to inventory is actually opening up and the propensity improves. People know the Macao market is back with all the non-gaming investments and events that are driving the interest in the destination I think that base mass segment will naturally improve over time as it did already significantly this quarter.

Okay. Great. Thank you, all. Thanks.

Thank you. The next question is coming from Stephen Grambling from Morgan Stanley. Stephen, your line is live.

Hi. Thanks. This may be a bit myopic, but I would love to hear a little bit more color on how Golden Week maybe trending and how the pace of recovery has continued across different customer categories more recently, especially around these big events that seem to have driven kind of a step function move in the recovery historically.

Steve, we traditionally don't talk about the current quarter. We'll keep that intact here as well. I think if you look at the numbers in the market as the print to see the strength of Golden Week’s [indiscernible] the numbers driven by the government and other sources. But we never comment inside the quarter.

Fair enough. And maybe changing to something more specific [Technical Difficulty] would love to just hear anything around potential near-term disruption. I think that that's going to be starting in November and then when that might be felt most and when we can anticipate the re-ramp?

Yeah. I'll turn to Grant, there will be some disruption, but we still feel as though the initial results, under are -- obviously, we're looking at it as a future hope that one of these prospects. Grant take it through '24, both [indiscernible] and Casino seeing that better and how we see it.

Yeah. Sure, Rob. I think clearly, we will work to minimize the impact on the guest experience and the business operations, but this is something that we have managed many, many times over the years. And indeed, we did that during 2019 when we started the holiday in conversion into The Londoner hotel. I think you'll see some disruption on the gaming side in the middle of next year. And I think we'll be managing the Sheraton Tower renovation methodically and judiciously over the entire period over the next 15, 18 months. So as to really continue to enhance the yielding on the customer front, but at the same time, try to get these works done as quickly as possible. I think the intent here is to move forward and complete the renovation and the repositioning of the entire south side of the resort, the Sheraton Towers and Pacifica Gaming as quickly as possible. The sooner we make the entire resort Londoner, the better it will be for everyone, our guests, our staff, our business and the brand positioning. So the only other point I would make is, we should take note that this part of the property portfolio is the lowest yielding part of the entire Cotai portfolio that we have both on the hotel and the gaming side. So we do hope to be able to successfully manage to minimize the disruption to the business. But when we get to completion on the other side, in the first half of '25. I think the earnings power through the holistic and expanded experience of the Londoner and Macao will be significantly enhanced. That's the goal.

Just sort of one thing to think about -- yeah, one thing to think about, so we're very focused on return on invested capital and growth in Macao. And so our anticipation is that the returns on these investments will be commensurate with those that we have previously and will drive meaningful growth. And by the way, the initial market reaction to this product really to what's been brought online so far really helps us with his view. Given the customer response and the performance of the asset in the long run, we believe that the completed Londoner, when it's done will be on par with the Venetian. That's what our target is.

I'd also add the Grant's comments, Stephen. Just again, the size, the scale of our portfolio gives us flexibility. We have 10,000 other rooms, money gets seems to new customers, too. So I think we minimize the disruption and maximize the opportunity to deploy the rest of our assets to keep our business strong despite that. And to Patrick's comment, one of those things can be juggernaut, they'll be neck and neck maybe exceed those two assets that are going to be hugely important in the future. But getting to ‘24, while not easy, I think it’s very manageable to see deploy other assets in the portfolio intelligently.

Thanks. I’ll jump back in the queue.

Okay. Thank you.

Thank you. The next question is coming from Chad Beynon from Macquarie. Chad, your line is live.

Chad?

Chad, please check your mute button. Your line is live, if you wish to ask a question. Okay. We can come back to Chad later. The next question is coming from Shaun Kelley from Bank of America. Shaun, your line is live.

Hi. Good afternoon, everybody. I just wanted to go back to the margins in Macao, and maybe that flowed through discussion a little bit more. If we look at it, it does look like flow-through just sequentially was a bit better in the third quarter here than in the second. I was just wondering, if we could get a little color on sort of maybe some of the mix impacts that drove that. Was that normalized staffing? Was it some of the non-gaming amenities, which are now kind of fully back on, which flow through at really good rates, like retail and hotel, was it sort of the base mass mix coming back? Just kind of how do you see it in terms of what maybe some of the factors were that drove that because it does look quite impressive.

Thanks for that, and appreciate the question. I will tell you that there's a little bit of magic to it. It's called revenue increase 28.9%. So for us, it really is just more people showing up, spending money at the product, recognizing how great it is and increased demand. I mean it's a phenomenal product there last week. It really looks for the team, it’s really providing unbelievable customer service and it's a highlight for Macao. It's a great asset and will continue to grow. And for us, it was just covering the fixed cost base. We just had to get -- and it was not a known product in the market. People are starting to figure it out, and it's going to keep growing. And so for us, this was really just growth in revenue across all segments, that was really the secret to it.

Great. Thanks, Patrick. And then, as my follow-up, I just want to dig a little deeper into the buyback authorization, obviously, a big kind of strategic change. Could you give us a couple of parameters. I mean pre-COVID, the company was actually pretty high on its sort of overall payout ratio. You obviously have a pretty ambitious capital program across potentially New York, certainly, what you want to do on this -- on the big project in Singapore, some renovation activity and some of the CapEx in Macao. So should we think and parameters of a payout ratio and maybe how could we put some numbers around that, if possible? And then also just help us think about medium-term leverage, just given you're probably the most under levered gaming company I've ever covered. So a big complement to where you sit at the moment, but obviously, it presents a lot of potential firepower there.

So really appreciate the commentary of the question. I will tell you, so right now, we're sitting at about $5.6 billion worth of cash system-wide. Macao is starting to become very cash generative. Singapore is very cash generative. So the way we think about this is due to the timing of our development obligations and those cash flows, we will be able to do all. We'll be able to invest in our core markets and growth through organic growth and through redevelopment of key assets. We'll be able to do IR [Technical Difficulty] core. We'll be able to do our concession commitment to Macao and then we'll have excess capital and we'll pursue New York, and we're going to pursue other growth opportunities in new jurisdictions, and we'll be able to do it all because of the timing of the cash flow, the cash we have on hand and the cash tentative nature of our assets. So in terms of the payout ratio, as we addressed earlier in the call, we're not going to be as heavily weighted towards dividends as we were before. So if you look on Page 30, we sort of included a look on what were our prior return of capital programs looking like for both share repurchase and dividends. And on Page 30, what you'll see is historically, we were very dividend weighted. And to your point about payout ratio, we don't typically guide to payout ratio, but the point is well taken, we're looking really to flip it. So for us, the majority is actually going to end up being share repurchases, because we're very focused on growth. So we can grow the company's EPS through share shrink, we're going to do it. We can grow through capital allocations or high growth projects, we're going to do it. It's really an ROIC, and we're going to pursue it aggressively. And the good thing is we've got cash on the balance sheet. We've got cash center of assets and we have a historical program to provide you a good guide that we can launch off of and really hopefully drive real shareholder return in the future. So that's kind of how we're thinking about it.

Thank you very much.

Sorry, one thing. Thank you, Dan. You mentioned leverage, and this is a very important thing. So prior to the pandemic, we spent about five years transforming the company to be an investment grade name. We thought this was really important. It gives us access to the largest, most liquid debt market in the world. It gives us a very efficient cost of capital, which in the long run provides flexibility but also drives returns on our new projects. And so having this investment-grade balance sheet also helps us in new jurisdictions because we have the financial capability to execute on projects we propose. So for us, we like being leveraged 2 times to 3 times on a gross basis. We've said it before. You've heard it from us on prior calls, nothing's changed. We still believe that. We think we’ll delever over time through EBITDA expansion. But more importantly, I think for us, that’s a key metric so that we maintain our investment grade rating for all the benefits we just described. So that’s kind of how we’re thinking about it.

Thanks for that.

Thanks, Shaun.

Thank you. The next question is coming from Brandt Montour from Barclays. Brandt, your line is live.

Great. Good evening, everybody. Thanks. So for Marina Bay Sands first, in your slide, you show flight capacity hovering around 80% recovered. Based on the momentum that you guys are seeing in that asset, do you still feel like you need that last 20% of China inbound to fully recover to hit that $2 billion run rate target. And can that happen actually while Tower 3 is under Reno?

What's happening, isn't it? I mean, this quarter, we just did 490. I hate to say, if that's happening. Good question. We always need China, let's be clear about that. We always want more business in all countries. But I think what you're seeing in Singapore is a very diverse bunch of assets are coming together. I think the biggest story is the suite product, which we haven't -- you haven't seen it's pretty extraordinary. When it goes from 200 to 700 -- 770, it's just a very potent combination of great food and beverage grade service. It enables us to get a place we've never thought of before. The real question is, I think $2 billion is our goal in the future and beyond. The real question is, when you get more China, when do you get more flights where you open up totally -- the thing that we talk about [Technical Difficulty] it's been open about six quarters of now. If you follow the trajectory of Singapore, we're hoping to see anything after Macao. We're very early stages in Macao. Singapore opened up, it wasn't that powerful in the first couple of quarters. And it been along, all of a sudden, it caught fire and now it's certainly performed, we're surprised how strong it is and because the place is kind of turn up. If you've been there, it's got some real challenges from a physical perspective. So to answer your question, we think we can get to without more a lot more. We'll take all the customers we can get. We think this is user for an asset. It's one of the places you just want to go to. You'll pay up for whether a room product or the gaming opportunity in retail it just is going to keep getting stronger. Do we think it's achievable? Yes, but we prefer to have all airlift coming in and all the potential customers in trying to have business [indiscernible]. We just have a huge faith in this product. We don't think two at the end, at the beginning, we're in to. So I do think it's important that we look at it the cabin benefit of understanding. We've gone from a dead stop in January back to the very difficult times of no one coming to mere in nine months later about 80% of Q3 '19. But how much for they're going to go? I think a lot more. If you look at Singapore, this trajectory, I think it's very telling what's going to happen in Macao. So I think, again, another illustration of what's happening in was on Page 25. I think the retail side is just you have to look at it. I mean all you guys have spent time in about $3,000 a foot is a pretty good local mall. The four season Macao is 8,400 foot in the luxury segment and 3,700 of the non-luxury in Venetian (ph) Macau, which is not a necessary luxury malls to $70 a foot. So the power of the spending right now in the retail opportunity always seem to happen first. The gaming seems to follow us happen in Singapore to happen in Macao. But to your question, we have huge confidence in the future of MBS. And I think our investments will prove in the end we make works in many places is supremely strong buildings with great service and great architecture, and that's what you have Rosadi (ph) and MBS.

Great. That's super helpful. And then over on Macao, on Slide 14, it shows the win per visitor coming down quarter-over-quarter, it's the second quarter that's declined. Is that sort of wholly explainable by the reallocation of tables to base mass, which we talked about earlier in the call or is there any other constraints that you'd want to highlight why that sort of win per visitor is hovering around some of the quarters that we saw in 2019.

Just a quick thought on Page 14. This is really driven by visitation by the number of visitors that we're showing up to the market as it averages down. But I would like Grant to comment if he had any thoughts, just for some additional color.

Yeah. Thanks, Patrick. No, I think what you're seeing is the evolution of premium mass coming back first. So for the first couple of quarters after the Board has reopened, you saw the revenue per Macao visit arrival, which is what this page shows, upon skyrocketed versus the historical levels. And you're now obviously getting more of the base mass, especially during the summer, so you are normalizing. But it's important to note that you are still getting a much higher quality mix of customers even with that when you compare to the same quarter in 2019. So I think from this slide, you can see is 610 per visits arrival in this quarter versus 557 in the same quarter in 2019. So the narrative continues that you are getting that higher quality across every segment, a higher spend per capita. But between the premium and base mass, you're now seeing the base mass starting to accelerate, especially during those July and August summer months.

Got it. So just sorry to clarify, so it's mix to the base mass, but also more well-heeled customers that might be gambling slightly less, like families and such? Is that kind of a way to look at it?

No, this is actually showing you that the mass revenue per visit arrival is actually higher than the same quarter in 2019. So actually, you suggest that the higher spend per capita is actually prevalent in all segments of the market right now. And that also shows through in the gaming. I'm sorry, in the retail mall that Rob referenced as well.

Perfect. Thanks for all the color.

Thanks, Brandt.

Thank you. The next question is coming from George Choi from Citi. George, your line is live.

Thank you very much. While we do believe concerts can help to get incremental revenues in Macao. How should we think about the associated incremental expenses? And I guess more specifically, do you expect the [indiscernible] concerts at the Venetian this month to be both EBITDA accretive and margin enhancing at the same time?

So one thing just to begin, and thank you for the question. Entertainment is a very important part of our business. We're very focused on using entertainment to drive premium as visitation and create the programs that our customers feel like they'll get experiences with us, they can't get in other places. It's a very successful thing in Asia. And in fact, we just recently opened a brand-new venue in The Londoner that allows us to do that in more scale. But so I think for us, these programs are very accretive. Directionally, we think more entertainment as high quality is good, not only for the market, but also for diversification in Macao and in Singapore. I think it brings a prominence and an entertainment glow to the regions. But I would like to turn it over to Grant to see if you guys any additional comments about an entertainment and cost associated with it.

Yeah. Thanks, Patrick. Yeah. I think we've always been pursuing the entertainment strategy to create a better, more attractive destination and that hasn't stopped since the Board has reopened. In fact, we have been redoubling our efforts, as Patrick said, with the opening of The Londoner arena in May and June. So if you look at the third quarter, we actually did around 15 different show events with about 19 performances across the two arenas and obviously, in some only 13 weekends in the quarter, so there were some weekends where we are doing both a show at The Londoner and also in the Venetian. And we believe this is critical to driving not just the diversification in Macao and the non-gaming, but also to enhance the attractiveness and the propensity to come to the destination, especially our properties, and we can see the impact on our business. The economics of this hasn't changed and we've done this for 15 years. So we know how to calibrate the investment in entertainment versus the return we get on the overall resource spending. And also, there are different types of partnerships that we do in entertainment events, and that can range from just pure any rental to us being the actual promoter. So it varies and it's a calibration. It's analysis between the revenue benefit that we get and the visitation benefit that we get versus the cost and also depends also potentially on the entertainment partner as well, whether they invest or they want us to co-invest or us to invest. So that really hasn't changed, and we've been doing it for more than a decade. But what has changed is that we are actually significantly increasing the content because we now have a new spectacular venue in The Londoner for live music, which is already getting great feedback in terms of quality as any both for the audience but also for the office.

George, I’d say, in my experience, entertainment is an essential component of any top-tier resort. You can never underestimate how powerful it is as a statement of the customer, longevity, commitment and honestly, for us, it's been stable. I wish regard how we can't do more because it's so powerful, just like retail, just like it's part of the package that makes people to come and visit. The reason why we have been so successful at the Venetian and it was true in Las Vegas. It was true in Lilac City (ph). It was true that anybody has ever worked. It's always been an essential component to be very tolerable in Singapore as well. So to me, it's not even a question, of course, how we do more of this stuff because it pays and pays and pays, very powerful.

That’s very good color. Thank you very much.

Thanks, George.

Thank you. The next question is coming from Dan Politzer from Wells Fargo. Dan, your line is live.

Hey. Good afternoon, everyone. First, on Singapore, the CapEx, the $750 million for Phase 2. How do you think about this maybe relative to your longer-term expansion plans at the property? I know that's been pushed out and the budget is probably higher than it initially was. But I mean, is this more kind of a bridge to that or how should we think about that long term and maybe when we get an update there?

Its commitment to Phase 1 because the product as good as it was externally architecturally, it lacked. Frankly, it was necessary that what happens in Phase 2. It's the best money we could spend to make that product successful and stronger. It's going to have enormous dividends in the future, the room product was lacking both from a size perspective, but also a finish perspective. Some of the casino space were just not very good. I always felt that MBS as good as was architecturally is lack of [indiscernible] inside the building. And in our business, great buildings, always prevail, and prevail for a decade and just grow and grow. So that money is money very well spent. It's not connected at all. It's meant to make MBS 1 a very powerful 2-plus billion product. We built in Singapore years ago, the speculation was that you'd never be more than $500 million, $600 million EBITDA. We're going to push through $2 billion and beyond. And I think it's a testament to reinvestment and spend money wisely. It doesn't have any association with Phase 2. Patrick, Phase 2.

Yeah. Just to follow on with what Rob said, so fundamentally, we believe it's a product-driven business, right? And so that investment in quality, investment in innovation with great service and guest experience are going to drive the outside returns over time, right? So I think you're seeing that with The Londoner. And in Marina Bay Sands, the rules we just completed Tower 1 and Tower 2. The design is luxurious. It's residential, it is unmatched levels of service. These are the best things we've ever done, and they're basically saying a new standard for hospitality and customer experience at our properties. And to Rob's point, when Tower 3 is done, A Marina Bay Sands is going to be a hotel property in the world. We're really focused on it. From a food and beverage standpoint and from a retail standpoint, as Rob said before, from a guest experience standpoint, that's what we're focused on. IR 2 is going to be something different. It's going to be a new stand-alone development. It's going to have unique spaces, unique design, unique service, but it's something that's probably six months to a year away depending on how things go with approvals in order to get started. It will be additive to Marina Bay Sands. It will grow the market for us, be a different product and allow us to also have a live entertainment venue in Singapore, which is something that we really haven't had in scale before. And so if you look at the power of the Venetian and what we're doing in The Londoner with the venue that Grant mentioned, we will now have that capability in Singapore to drive high-value tourism to drive further growth and to really work that tourism that's related to live entertainment that we never really could do before. So for us, the expansion of Marina Bay Sands is a step function of growth potential. We're looking forward to doing it. We think it will be an unbelievable product. We've been spending a lot of time on it. And hopefully, we'll get a chance to start soon, but a completely different thing.

Got it. Thanks. And then just moving to Macao. I think for the last two to three quarters, your non-rolling ship win has been kind of in that 22% to 23% range. Is this a function of just really premium mass being a bigger piece of the mix or -- and so we should think about this kind of edging up over time back to that 23% to 24% plus range or is there something different in this market? And I'm sorry to harp on 1%, but when we're talking $24 billion.

You're right to harp on in, something we think about quite a bit. No, that your question is an excellent one, and we look at all the time, I was on the phone last night with our team Macao discussing its fast things we don't have an honest sans to tell you exactly why the entire industry seems to be down [indiscernible]. It's very impactful money we're talking about would be worth probably a couple of hundred million dollars used to us and go back 2% right, because it’s EBITDA. So it's going back. We just don’t have an answer. Is it mix? Maybe is it the removal of junket and that type of thing, maybe. But until we have a really coherent and certain answer, we don't want to give you a response. I'd like to believe that the oil industry trades up a point or 2. I'd vote for that. I'm sure our competitors would. But we didn't make it happen. We need perhaps -- it's very simple. The math on the baccarat games don't change. The customer best can change, ties and payers can change flatback change. So the point is, we don't know the answer ourselves. A lot of people scratched our heads until we have a certain answer we consider confidence. I want to hope along with you that we turn up to 24 again because it'd be a wonderful thing for us with our volumes, it will be incredibly impactful. We'd be at $700 million probably this quarter of EBITDA. So an excellent question. I don't have an excellent answer. We're working to prove it. Grant, any idea you add to that – that answer.

No, you're exactly right. We don't have a clear answer on that. There's -- in theory, actually, but just a point to make is, in theory, the premium mass being higher, higher mix in the drop actually should be positive for the whole facility. And it could also obviously add more volatility to the metric. But I think Rob is absolutely right that we don't have a clear answer and in truth, I mean this is only like eight, nine months into a recovery where the segments and the customers, I mean, all that is still evolving. So I think it's also premature to make specific pronouncements on what should be the non-rolling total percentage range. So right now, the numbers are what they are. But as you rightly referenced, as Rob also said 0.5 point of different, not even just 1 point, makes a tremendous difference to the numbers, the EBITDA, the margin, et cetera. So we're closely watching this, but there's no clear answer we can give on that in terms of why the whole percentage is where it is versus before.

Really in the new world in Macao, and I think people really don't understand. I think it's fast people understand how quickly this thing is reopened. I mean I know you know it, but the problem is Vegas open, regionals open, simple and quite a while ago, Macao was near the game. It's going to open for eight months, 8.5 months. So things are evolving and turning, it's happening quickly. Again, I think it's an instructive look at the trajectory of what happened in Singapore go back to eight months after it open, and you watch us happen double that time it's incredibly, I think, interesting to see the comparisons. I think this whole percentage thing is evolving. And we don't know we'll be wonderful to find out, we're back in '24 in Q2 would be wonderful. But without certainty, we will only give you an answer which we don't have clarity on ourselves, and we do we’re happy to share with the market.

Got it. I appreciate all the detail and the perspective. Thanks.

Thank you. And the last question today is coming from David Katz from Jefferies. David, your line is live.

Hi. Good day, everyone. Thanks for taking my question. I just wanted to go back on one detail. I'm not sure if you discussed this, but I'm just looking at the historical margin levels in Singapore, which were north of 50. Could you just talk about the puts and takes of getting back to that level again or if there's some specific headwinds? And then I have one quick follow-up.

No problem. I think one thing to highlight is that there was an increase in our tax rate by 3 percentage points and then there was a 1% GST. So what you see there is the impact of that along with inflation of the market. We've been able to manage expenses, manage business mix, manage pricing and push the business to be better. But our long term there is going to be with strong margins, with revenue growth just based on our investment and what we're seeing in the market. So we sort of manage the productivity yield and return on invested capital. Obviously, we look at margins and do our best. But we like where this business is going, and we think the future is very strong.

Understood. And as my follow-up, with the very, very good quarter that you had, and it's not just for your stuff, but many in our coverage, the market seems to expect some macro pressure in the future. And it's almost an obligatory question for all of our management teams. Are you seeing anything or providing anything that would validate any macro pressure at this point.

So I'll tell you what's interesting. You heard up Rob earlier reference our retail productivity. We are in very fortunate markets. So Singapore is an unbelievable place to do business. It's just a great place to visit as a tourist. There's a lot of exciting things to do there. It's a great business environment to trade and I think Singapore has benefited from its years of investment in the structure and people are going there and people are going there and consuming. And so we don't have a huge physical plant there. We've got 2,500 hotel rooms are going down as we add more suites. And I think in, Macao, we're less than 1% penetration in the market. And so when you look at business and leisure tourism opportunities, I don't know that we're impacted like a broad-based consumer staple. I think we're for a narrower segment, we don't appeal to everyone, but I think we're a great tourism assets in both of our markets. And we've continued to see growth through different cycles, because of who we appeal to and the volumes that we need to be successful.

Got it. Thank you very much. Appreciate it.

Thank you. 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. We thank you for your participation.