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Edited Transcript of LVS earnings conference call or presentation 17-Apr-19 8:30pm GMT

Q1 2019 Las Vegas Sands Corp Earnings Call

LAS VEGAS Apr 20, 2019 (Thomson StreetEvents) -- Edited Transcript of Las Vegas Sands Corp earnings conference call or presentation Wednesday, April 17, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Daniel J. Briggs

Las Vegas Sands Corp. - SVP of IR

* Patrick Dumont

Las Vegas Sands Corp. - Executive VP, CFO & Director

* Robert Glen Goldstein

Las Vegas Sands Corp. - President, COO & Director

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Conference Call Participants

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* Anil Jeevan Daswani

Citigroup Inc, Research Division - MD and Head of Global Gaming Research & Hong Kong Country Research

* Arpine Kocharyan

UBS Investment Bank, Research Division - Director and Analyst

* David Brian Katz

Jefferies LLC, Research Division - MD and Senior Equity Analyst of Gaming, Lodging & Leisure

* Felicia Rae Kantor Hendrix

Barclays Bank PLC, Research Division - MD & Senior Equity Research Analyst

* Jared H. Shojaian

Wolfe Research, LLC - Director & Senior Analyst

* Joseph Richard Greff

JP Morgan Chase & Co, Research Division - MD

* Shaun Clisby Kelley

BofA Merrill Lynch, Research Division - MD

* Stephen White Grambling

Goldman Sachs Group Inc., Research Division - Equity Analyst

* Thomas Glassbrooke Allen

Morgan Stanley, Research Division - Senior Analyst

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Presentation

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Operator [1]

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Good afternoon. My name is Rusty, and I'll be your conference operator today. At this time, I would like to welcome everyone to Las Vegas Sands Corp. First Quarter 2019 Earnings Conference Call. (Operator Instructions) I would now like to turn the call over to Mr. Daniel Briggs.

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Daniel J. Briggs, Las Vegas Sands Corp. - SVP of IR [2]

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Thank you. Joining me on the call today are Rob Goldstein, our President and Chief Operating Officer; and Patrick Dumont, our Executive Vice President and Chief Financial Officer.

Before I turn the call over to Rob, please let me remind you that today's conference call will contain forward-looking statements that we are making under the safe harbor provision of federal securities laws. The company's actual results could differ materially from the anticipated results in those forward-looking statements.

In addition, we may discuss non-GAAP measures. A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures is included in the press release. Please note that we have posted supplementary earnings slides in our Investor Relations website. We may refer to those slides during the Q&A portion of the call.

Finally, for those who would like to participate in the question-and-answer session, we ask that you please respect our request to limit yourself to one question and one follow-up question so we might allow everyone with interest an opportunity to participate. Please note that this presentation is being recorded.

With that, let me please turn the call over to Rob.

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [3]

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Thank you, Dan. Good afternoon, everyone, and thank you for joining us today. As you know, Sheldon is still receiving medical treatment so he will not be on the call with us today, but we look forward to his recovery in due course. He did, however, want me to pass this message to everyone: amazing results this quarter; great news on the Singapore expansion; and of course, yay new developments, yay buybacks and yay dividends.

Let's turn to our financial results. We had an outstanding quarter, especially in Macao. Company-wide adjusted EBITDA was USD 1.45 billion. In Macao, adjusted EBITDA was USD 858 million, up 9% over the prior year. We achieved record mass table revenues, which reached USD 1.5 billion, an increase of 13% year-on-year. Our profitability continues to lead the industry, with EBITDA margins of 36.8%, up another 30 basis points year-on-year.

The Parisian had a record quarter, with adjusted EBITDA of USD 163 million, with mass win per table growing by 21% year-on-year, aided by the introduction of our renovated suites. Next month, we celebrate the 15th anniversary of the Sands Macao opening, which marked the beginning of Macao's transformation into a world-class tourism destination for leisure and business travelers. Sheldon's vision more than a decade ago to create the critical mass of integrated resource on Cotai with hotel, entertainment, retail and MICE facilities positions both the market and our company for future growth. We look forward to making additional investments in Macao as we contribute to Macao's diversification and evolution into Asia's leading leisure and business tourism destination.

With the opening of the Hong Kong-Zhuhai-Macao Bridge and the ongoing development of the Greater Bay initiatives, we truly believe Macao has the potential to become the MICE capital of Asia, and we fully intend to contribute to that goal, both through our existing assets and future investments.

In Singapore, MBS delivered $423 million of EBITDA. This is consistent -- this consistent strong cash flow generation was driven by mass win, which reached nearly USD 5 million per day. The iconic Marina Bay Sands hotel continues to enjoy near full occupancy. Retail sales exceeded $1,900 per square foot. And we recently opened last week the Marquee, a Las Vegas style nightclub that is unique in Asia. We look forward to the contributions from Marquee as well as exciting new retailers in the near future.

Over the past several quarters, we had commented on our capacity constraints at Marina Bay Sands and our willingness to invest additional capital for expansion. We are very excited. We are thrilled. We recently reached an agreement with the Singapore government to invest an additional $3.3 billion to develop a new iconic hotel tower with premium suites, a state-of-the-art entertainment arena, additional MICE capacity and other amenities, including luxury retail.

Marina Bay Sands has already established itself as an iconic tourism destination. With this exciting and multifaceted expansion, we are confident Marina Bay Sands will continue to grow Singapore's appeal as a leading leisure and business tourism destination in China. We are truly grateful to the Singapore government for their support, and as Sheldon said a few weeks ago, Integrated Resort development in Singapore is a tremendous example of a government and a private business working in tandem to maximize an opportunity that benefits all those involved.

Finally, we continue to increase the rate of return, the rate of capital to shareholders. We raised the annual dividend for the 2019 calendar year. We repurchased $174 million of stock in the quarter. We see meaningful long-term value of the LVS and SCL equity.

We thank you for joining us today, and now let's take some questions.

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Questions and Answers

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Daniel J. Briggs, Las Vegas Sands Corp. - SVP of IR [1]

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Operator, we're ready to begin the Q&A session. Thank you.

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Operator [2]

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(Operator Instructions) Our first question comes from the line of Joe Greff from JPMorgan.

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Joseph Richard Greff, JP Morgan Chase & Co, Research Division - MD [3]

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We look forward to hearing Sheldon hopefully soon.

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [4]

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We do too, Joe.

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Joseph Richard Greff, JP Morgan Chase & Co, Research Division - MD [5]

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Rob, when we look back, was it the 1Q in Macao, I think what surprised us was the premium mass growth exceeded that of the base mass growth. I think that's kind of contrary to what we would expect just given maybe perceptions of the market dynamics. And can you talk about what drove that and how much of that was the renovated suite product at The Parisian? I guess how even was that relative growth throughout the quarter, and do you think that's sustainable?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [6]

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Well, Joe, if you're looking at your deck, turn to Page 11. I think it's the nicest slide I've seen in a long time. It illustrates our growth in both base mass and premium mass. And the numbers are just extraordinary, almost $19,300 coming out of our tables from the premium side and $8,600 from the mass side. This was a challenging quarter in Macao. The comps from 2018 were strong. The smoking ban obviously began this quarter. China macro concerns are out there, and VIP clearly is softening. And yet, against this backdrop, we delivered our best quarter since 2014. And our non-rolling table revenue that you alluded to was our best in history at $1.52 billion with strong margins.

The landscape in Macao has changed dramatically since 2014. This is a market driven by mass and premium mass. And as we said previously and we'll say again, we have the scale and the quality of rooms and suites and retail and gaming and entertainment to excel in this environment. It's just not scale for us though. I think what you have to realize it is quality. And that's why we're building 1,300 new suites as we speak at the Londoner and Four Seasons. It's a lifestyle commitment by these customers.

This complete package enables us to earn beyond our fair share in Macao. We believe the rolling market will resurrect, it has in the past, it will in the future, and we're prepared to accommodate that segment as well with our relations with the junkets, our relations with the better room quality in both the suites and the junket rooms. But I think this quarter signals our ability to perform exceptionally well in mass and premium mass, and we look forward to return in the rolling market.

As to where it came from, obviously, you know we've told the story about The Parisian, and The Parisian, we converted 600 keys to 300. And some people thought that was -- might be a good idea, it might not be. It's turning out to be a very good idea. The Parisian delivered an outstanding quarter driven by huge growth in the premium mass business, and I think it's going to continue. The truth is that this is a market that's driven by product, by quality and by scale. We have all 3. And we don't want to cede control of our junket business. We don't want to give that segment up. We plan to be a player in that. But this quarter was powered obviously by these base mass win and premium mass win and by better room product and better product in general, and that's always been our calling card and it will continue to be.

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Joseph Richard Greff, JP Morgan Chase & Co, Research Division - MD [7]

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Great. And then as my follow-up question, and I'm not sure if this one's actually been posed to you, at least anytime recently, but maybe, Patrick, you can chime in here as well. Maybe you can just give us your updated views and evolved views on M&A as a way for you guys to grow, maybe in light of what your neighbor up the street potentially did. I just want to make sure we're kind of current on how you're thinking of external growth opportunities versus what I understand, and I appreciate there's a lot on your plate with Singapore, The Londoner and then a newer market like Japan potentially. And then if M&A is some sort of potential growth driver, under what criteria would you engage in M&A? And that's all for me.

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Patrick Dumont, Las Vegas Sands Corp. - Executive VP, CFO & Director [8]

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Thanks, Joe. It's Patrick. I think I just want to highlight something that I think we said in some prior calls. Our highest and best use of capital is having our Chairman develop new high-growth properties. And so we kind of look at everything through that lens. And I think as you look at the expansion, Singapore, that we've been very fortunate to reach agreement on, and you look at the investment that Rob just spoke about regarding some of the new developments that we're doing in Macao, activating some old assets as well as refreshing the SCC building into The Londoner, we think new development and renovations in very established, very positive growth markets is the best way for us to deploy capital.

I think, for us, it's really tough to get comfortable with a M&A opportunity given how successful we have been doing what we've been doing. I think it's hard to look at those opportunities and say that they are a better use of our capital than what we can do with our development capability as well as returning capital to shareholders, either through the dividend program or through repurchases. So our focus is on development of our existing markets in Macao, which has been a tremendous market for us historically and we believe will be even stronger in the future as well as in Singapore as well as in some of the new jurisdictions in Asia. So that's really where we're focused. I don't think you'll see us do M&A in the near term.

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [9]

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Joe, just to add to Patrick's comments, you and I have been doing this for a long time, but there seems to be a lot of people who are just buying things and selling things as valuable. We've learned over the years that buying a few things, really focusing and getting it right and having long-term growth in markets and finding the right opportunities, to have that at mode approach is much more effective than just buying and selling. I think we want to grow. Singapore's evidence of that. We have a few things that we're looking at right now that I think are extraordinary opportunities for the company. But it's hard to emulate Macao and Singapore and perhaps Japan. These are extraordinary opportunities.

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Operator [10]

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Our next question comes from the line of Stephen Grambling from Goldman Sachs.

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Stephen White Grambling, Goldman Sachs Group Inc., Research Division - Equity Analyst [11]

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I guess starting on Singapore. Can you talk to the returns on invested capital there? And maybe some of the specifics around the buildout and the customer you are trying to go after there, especially that I think you referenced, say, VIP could be a little bit softer in Macao. Does that have spillover, have any -- does that factor into your thoughts in terms of what you're doing in Singapore?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [12]

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Okay. Let's take a crack at this. MBS has been an extraordinary story, which is altered by an outstanding government and a visionary company and founder. It's one of the greatest development stories in the history of this industry. And tourism has soared and benefit -- as tourism has soared in Singapore and we benefit as well.

But Steve, when we designed MBS about 15 years ago, and we built the usual thing at that time, we built nice suites, at the high end, we built a top-tier hotel rooms for everybody else, we just couldn't have imagined that time of the incredible power of the emerging premium mass segment. And that segment is demanding, and they should be. We just delivered about $19,000, almost $20,000 win per table from that segment in Macao this quarter. We did it for the first time, almost $5 million MBS primarily from that segment. That's where the growth is. But this opportunity in Singapore is so much bigger than even that. I mean I think $5 million is a nice starting point. We didn't build the right room product for this segment. We didn't give the premium mass the entertainment product they wanted. This segment wants it all. It's a lifestyle segment. And with this expansion, we take dead aim at that segment. We're building 1,000 suites roughly, at 1,000 square feet roughly, basically the best product we've ever built, bar none any hotel in the world.

We're building a large arena and partnering with the smartest and best entertainment people in the world to ensure week after week that Macao -- excuse me, MBS and Singapore will become an entertainment powerhouse. And we couple that with our Cotai Arena in Macao. We have synergy there, and we've become an important part of any touring entertainer's plans. The synergy from Macao and Singapore is exceptional from an entertainment perspective.

The target for this audience is affluent foreign tourism in Singapore, what do they want -- the best suites, we'll get them; the best entertainment, check; the best retail, we already have it. We opened Marquee last week to an amazing response. This is a voracious consumer that wants it all, and MBS will deliver it all, along with a one-of-a-kind 54 -- 5th-floor gaming salon, more slots, more ETGs. We can't fill all the rooms when we have those days. We can't fill up the rooms of premium mass. The suites will be sold at remarkable high rates to nongamers. The same with the MICE space, it will enable us to achieve the highest midweek rates we can get for our 3,500 rooms and suites.

This project will take Singapore and MBS to a different level, to a different gear. Our industry is product-driven. Look at Cotai. Does anyone believe Macao could achieve its current success without Cotai? I was there. It was a vertical building property. It was all tall buildings, pinned with small acreage, few rooms, no entertainment, no retail, no spa, no MICE. Macao has become supercharged by an extraordinary product. $20,000 win per unit per day in premium mass this quarter or $19,500. Look what happens if you bring Bruno Mars or Jacky Cheung or BTS or Maroon 5 or Celine Dion to Macao, revenues explode.

In Las Vegas, entertainment drives room rate. In Macao, it drives gaming revenue. It explodes game revenue. This will happen in MBS. It's always about the product in our business. The market for Singapore premium mass is there. It needs to be exploited. We need to give it what it wants to come.

And in addition, let's mention our competitor. Genting will invest, I think, $4 billion or $5 billion, the SGD dollars to create a new product to further enhance the destination. Changi Airport, already an exceptional airport, just opened another key expansion. Singapore is an extraordinary place, and its growth will keep coming. The government made a wise choice to enable this to happen, and we couldn't be more grateful or more excited.

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Stephen White Grambling, Goldman Sachs Group Inc., Research Division - Equity Analyst [13]

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Great. And changing gears to Japan, I guess. And maybe it's still too early, but how do the development products you have underway in these other markets compare to what you think is possible in Japan? And maybe what are the puts and takes to ROIC to think about in that market?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [14]

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Well, Japan is still, as you know, a ways out. We are deep into it. We're committed to it. We have a team on the ground there. And I think you'll see us do something in the same fashion we've done in Macao or Singapore. Our goal is -- we're looking at decades of investment, investing many billions of dollars. But we don't go into markets and look for a cheap way to do things. Sheldon's approach has always been scale. It's been dramatic. It's design-driven. It's a very, very special way of approaching a market.

To the M&A question a few minutes ago, M&A doesn't offer the opportunities to us that Japan could or other markets could. So our commitment to Japan is immense. It will be lots and lots of rooms, many, many rooms. There will be lots of retail. There will be lots of MICE, far beyond what people understand we're thinking about for Japan. The government understands that. But we are fully committed to be in Osaka. We're fully committed to make a commitment to do very well there. And you'll see us invest a lot of money to create an extraordinary product that lasts for a long time, and we'll get great returns as well.

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Operator [15]

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Our next question comes from the line of Thomas Allen from Morgan Stanley.

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Thomas Glassbrooke Allen, Morgan Stanley, Research Division - Senior Analyst [16]

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So a few questions on Singapore. So VIP revenues or rolling volumes were up about 5% quarter-over-quarter. Have you seen any life there? And then your mass table revenue was up a lot and your slots were down. Any like rationale for why that -- for that dynamic?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [17]

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Yes. I'll start with VIP, Tom. As you know, we're not big believers in huge growth. It's volatile. It's driven by -- it's a very -- it's a market we've always believed could grow, but it's got impediments that we find very difficult. I don't think our -- the biggest growth opportunity will be in VIP. Could it slide to $8 billion, $9 billion, $10 billion in 1 quarter? Yes, it could. Could it fall back to $6 billion, $7 billion next? It could. I think we're looking basically that the playing field's stable, and that's about all.

There is growth. There's real growth in the premium mass side, and we're seeing increased tourism, foreign tourism.

Again, comments on the last question, why we're committed to spending a lot of capital in Singapore. We think it's well underserved. I mean $5 million a day is a nice number to get to. But Macao, we did $1.5 billion for the quarter, and there's just no question that we can get further there in terms of the premium mass table play.

Slot capacity is constrained. We're having trouble growing it. It has grown, I think, 650 annually. It was 675 or -- but we have had trouble growing it. We need more slot machines. This will fix that issue, this expansion. There's no question it's one of the world's great slot ETG markets, and there's no question this will serve us well. So the growth is there in Singapore. The growth is there in tables and slots, more on the premium side than the rolling. It's -- again, it's concentrated in the rolling side. It's more difficult there, but yet, the premium mass side looks like it's got vast potential from our perspective as does the slot growth.

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Thomas Glassbrooke Allen, Morgan Stanley, Research Division - Senior Analyst [18]

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Powerful. And then did you change the name of the St. Regis Tower Suites to The Londoner Tower Suites? And then if you did, why? And then did the timing of that just dropped a little bit?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [19]

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Yes, we did change the name. We've decided we'll keep the St. Regis name on the current building. It's there and operating very well. We decided to be more of -- again, it's more of a lifestyle brand decision on our part to focus on our own brand as part of The Londoner umbrella. We're going to control 95% of the product there. Anyway, it won't be for sale. It will be comped if we're successful 100% of the time. We probably could do a better job controlling it that way and putting it under The Londoner umbrella. We are really enthused with what's happening in Londoner. We feel this is going to be a very, very successful product. And it's got focus, again, take dead aim at the premium mass customer in Macao, and so we thought we had better control by converting that back to The Londoner umbrella. We will retain and we're very enthusiastic about our relationship with St. Regis on the current St. Regis hotel as part of The Londoner theming. But again, we thought we could do better and we're trying a different approach, and you're exactly right, we did.

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Operator [20]

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Our next question comes from the line of Shaun Kelley from Bank of America.

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Shaun Clisby Kelley, BofA Merrill Lynch, Research Division - MD [21]

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Rob, probably for you, but maybe to stick with Sands Cotai Central. Some of the results there have been actually holding in, I think, quite strong, if not better than we expected. Could you just talk about sort of the outlook there for the property given some of the potential disruption as you get into the -- some of the more aggressive renovation phases throughout this year and early next, what people should anticipate? Or can you maintain some level of activity given what you're doing in the premium mass casino areas there?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [22]

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Right. So Sheldon's theory is people want to see it before we get rid of it, which I think is a funny theory. He said the more we talk about this, the more people keep coming. We've got a great quarter at Sands Cotai Central, and I think what is remarkable is that we are in the construction there and it will worsen. I'm not prepared to define the level of disruption because I just don't know. I mean very candidly, I just don't know. Macao is an extraordinary place and people seem to cope with extraordinary circumstances, but we will -- we are continuing to build Londoner rooms. They are under construction currently. The process continues. The project may be -- the exterior will start happening in the summer, I believe.

So there will be construction. There is bound to be some disruption. I'm not prepared to quantify what that might look like. You're right, though. The 200-million-plus quarter is kind of comical. Some people give me a hard time about that and say why get rid of something that could make $1 billion the current way it's growing. But I think the answer is because it probably could be closer to The Venetian. That building was 6,000 keys, and we do it properly and Shaun, we're doing it properly. The team, our design development group, has really evolved, and the stuff we're doing is pretty special. I'm very excited to see it open and just share it with you and the investment community. It will offer more keys than any place, double The Parisian key count, more suites, more theming. It's just pretty special, what's going to happen there. And we're very confident that it can grow immeasurably.

We talk about the M&A question. I don't think there's a better investment out there. We're going to invest, dollar-wise, our return there. You can't touch any place in the world because this is going to do very, very well. I can't tell you it's going to hit Venetian numbers. That might be a little too ambitious. But it's sure going to improve a whole lot, and we're extremely enthused about it.

Again, I don't want to speak to disruption because I just don't know. I've been -- the consumer over there thinks differently, is different. They love the room product in some of the hotels. I think the Holiday Inn conversion will mimic The Parisian. And that conversion is 1,200 keys to 600 suites is going to be an unbelievable statement. The rooms look extraordinary. And so we couldn't be more enthused about what's going to happen as the transition evolves.

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Shaun Clisby Kelley, BofA Merrill Lynch, Research Division - MD [23]

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Great. And then as an update, a follow-up to an earlier question, just on the overall market growth you saw in premium mass. Can you just give us your kind of latest thoughts on kind of the cash comp dynamic for what you're doing with rooms? It's obviously a huge advantage for you guys given what you've got on all the product out there. Are you continuing to bump up what you're able to do on the comp side just because you see that kind of gaining demand, or just what's the latest on market environment?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [24]

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Actually, we're -- I'm not sure I understand the question. Are you asking we comp more rooms to get more demand?

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Shaun Clisby Kelley, BofA Merrill Lynch, Research Division - MD [25]

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Or yes. Basically, are you comping more rooms to drive the premium mass side?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [26]

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We'd like to comp them all, Shaun, but we don't have the demand yet. We're at 55%, I believe, portfolio-wide. The truth is, I mean, that's -- you cannot get -- there's no customer in the world that pays the kind of rates you get from a premium mass gaming customer. And our goal is to keep moving towards more and more comped rooms. That's always been the goal. We do have MICE demand midweek. Sheldon's prophecy is coming true. MICE demand certainly picked up. The bridge is going to be a major driver. We're going to have a great problem someday in Macao. We already run in the 90s, but the truth is, Macao needs more rooms. We have huge competition in this segment. Cash business there is booming. Comp business is picking up. Premium mass is showing strong. MICE business is evolving. The bridge will change that. I wish we just had 5,000, 10,000 more rooms because we could use them, painfully so.

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Patrick Dumont, Las Vegas Sands Corp. - Executive VP, CFO & Director [27]

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And the environment there, Shaun, just to add onto that, has been very stable. In fact, on the same number of rooms we're using for comp, the cash piece of reinvestment is actually decreasing as a percentage of revenue, and you see this kind of growth, which is a pretty extraordinary performance by the team there.

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Operator [28]

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Our next question comes from the line of Felicia Hendrix from Barclays.

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Felicia Rae Kantor Hendrix, Barclays Bank PLC, Research Division - MD & Senior Equity Research Analyst [29]

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So you guys okay if I ask a question about Las Vegas for a second?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [30]

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Sure. You can ask of any one, Felicia.

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Felicia Rae Kantor Hendrix, Barclays Bank PLC, Research Division - MD & Senior Equity Research Analyst [31]

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Well, no it's not a big part of your business. But I just -- I was wondering, especially since you guys are the first ones to report how the quarter progressed, January through March, because we know that the January and February market RevPAR was strong, clearly March, not as much given your RevPAR results. So I wanted to know if you could just talk about that. But also February was a tough baccarat month. We saw that in your numbers. Wondering if you've seen the demand for the Chinese high-rollers pick up. And then finally, just on this Las Vegas question. You said in the last call that you were well positioned for a group in the year. So is that still the case? So overall, like barring all this volatility, how do you think Vegas in general and your property performs for the rest of the year? I thought it was really interesting in the deck that you said that one of the opportunities you see in Vegas is the opportunity for room pricing increases, especially when there's a lot of investors that we speak with who think it's getting more and more challenging to raise rates in Vegas.

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [32]

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Well, obviously, we're different than some other people in Vegas. Firstly, we have a different campus, and I think that we're structurally different. And when Sheldon built this place, we're the only people in town, I think, to have this kind of campus, 7,000 keys, all suites. We're in the epicenter, right in the middle of what's happening in Las Vegas. We have all those convention and MICE space, which Sheldon, again, 20 years ago, told people build it and some did, some didn't. So we're a little bit unique. And this quarter is a good quarter for us. Nothing exceptional in terms of the -- nothing happened here in the gaming side, so we held within the range, which we hadn't been doing recently. Our baccarat business had been decent. I think Vegas will be fine with baccarat, but I wouldn't expect there to be a growth engine because honestly, as Macao gets better and better and those flights seem longer and longer, I think the -- our Asian customers may opt to stay in Macao. And if you look at our campus in Macao, it's so damn compelling what they're offering. So I do think you're going to see a challenge to Vegas baccarat growth potential.

On the room side, we're very fortunate. We had an extraordinary rooms quarter. And I think this -- I know we're not saying what the rest of the industry is saying. We're seeing strong group demand. We're seeing a strong FIT weekend. I think George and the team here has done an exemplary job of maintaining rate and margin. And I think it will get a little bit different than the other people in town. We have a very strong room product. We're underpinned by convention and MICE space. We have strong FIT demand.

This quarter is just a good quarter because we held within the range. And the rates were strong. RevPARs are strong. We may or may not be indicative of the -- I wouldn't call us a barometer though for the Strip. I can't speak to other people. And again, our product is very top-tier.

So we're very happy with our Vegas business. If we can keep having $125 million, $135 million quarters, it would be a very nice year for us. And I think we will feel good about it. From our perspective, Vegas is just fine.

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Patrick Dumont, Las Vegas Sands Corp. - Executive VP, CFO & Director [33]

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I think it's -- it's Patrick. One other thing about Vegas, I think we're a firm believer that if you reinvest in high-quality product, you'll be able to drive value and drive returns, and that speaks through the ADR.

So if you look at what we did in the last quarter, our ADR was up 2.3%. Incrementally, if we keep doing that, eventually, over time, we'll head in the right direction, assuming our investments continue, right? So we've done a lot to reinvest in the campus here as Rob mentioned. We have an unbelievable asset hopefully coming online in a few years, with the Sphere that's being done with Madison Square Garden, one of the leading entertainment companies in the world, as you know.

So we think our trajectory for Vegas is actually incredibly positive. We like the expansion and some of the development that's going on around us. We think that will help us. The retail has been performing well in the building. There's a lot of things that are now firing on all cylinders with George Markantonis following Sheldon's original vision. Yes, the critical mass does work. So our ADR is just visibility into the success of the overall property.

And I think one thing that you'll see in the future is that our convention business will continue to grow, but our FIT business will continue to be powerful as we get additional amenities online. And so that's why we have this view, and we'll continue to deploy capital against this asset because it's a great asset.

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [34]

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One thing I would add, you touched maybe 2 points I wanted to just sort of articulate further. I should have referenced the Sphere, which I think is a game changer for our building. I apologize. I missed that. Sorry, Jim Dolan. Sorry, MSG. It's going to be a very, very different place in a couple of years when the Sphere gets opened as far as entertainment and driving ADR.

Second thing, I think what's important is to realize Vegas is, as you know, CapEx-strong. You've got to invest dollars to just stay in the game. Now you look around this town. I visited the Palms recently, extraordinary what the Fertittas have done to the Palms. You walk through these buildings, you've got to have an appetite for excessive CapEx to stay in the game. We've done that. We've invested heavily in Vegas and to Patrick's point it paid off. But it's not a town you can let things erode or you will erode quickly. And we've reinvested over the years and we keep reinvesting, but that's a key part of our strategy here is to stay current.

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Felicia Rae Kantor Hendrix, Barclays Bank PLC, Research Division - MD & Senior Equity Research Analyst [35]

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That's really helpful. And then just kind of switching gears to your retail business in Macao. Those sales per-square-foot numbers continue to be helpful. I appreciate it. I'm not sure if we'd make anything of it. There was a slight decline from the TTM fourth quarter to now the first quarter. Just wondering if there's anything to read into that, especially given China macro, or if it's just, I don't know, really nothing.

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Patrick Dumont, Las Vegas Sands Corp. - Executive VP, CFO & Director [36]

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I think we have -- I think you're referring to Page 34 and 35 in our deck. If you kind of look at the performance in Macao, we're very proud of these malls. We don't think there's any issue with global macro. I don't think you'll see malls anywhere in the world grow like this. And if there are some, just point us out -- point them out to us. We think this retail story of Macao is extraordinary. We think it speaks to Sheldon's original vision of building critical mass of retail, of MICE, of entertainment and bringing high-value customers into beautiful premium mass suites, really driving this retail experience. And so these revenue numbers, we think, will continue to expand over time as we continue to remix tenants, as we invest more in the malls, as The Londoner mall opens up refreshed, and as we get some other remixing done, we'll start to see additional upward pressure on our revenues as well as on our rent rolls.

So we're very pleased about the Macao story. I think Rob has some comments as well. But this is really just another example of the critical mass story that Sheldon authored, and we're very proud of the offerings that we have there, including the tenant mix, which we think is unique to shopping experiences throughout Asia and the world.

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [37]

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Yes. All I'd add to that was our retail malls, although they make a lot of money, obviously is demonstrated by these sales per-square-foot, they are part of the overall lifestyle packets that makes this property and all these properties in Macao and Singapore so compelling to consumers.

You walk through the Four Seasons, you walk through all these very high-end, high-street stores, full of very chic people dressed very well, buying with both hands, they're packed to the gills in The Venetian, it's just -- honestly, it's an extraordinary part of what we do. And we already have that piece in Singapore, as you see, $1,900 a foot there. The Venetian, which is not necessarily the highest in the market, doing $1,700 a foot, obviously, luxury at Four Seasons, $6,000, crazy numbers, but the point is these numbers won't go down, they're going to keep going. And as part of our story, part of our life, the whole feeling of the lifestyle that you get in Macao, if you hadn't walked through it recently, you should because the quality merchandise that we have achieved, the quality consumer and the way that it fits in with all of them, you guys, I was there, you watch these entertainment packages, show up at weekends, pack the malls, it's all part of the approach where gambling is obviously critical in Macao, but we're selling lifestyle over there and it's an essential part of who we are. And I don't think it's going to diminish, I think it's going to keep growing, both in Singapore and Macao.

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Operator [38]

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Our next question comes from the line of Anil Daswani from Citigroup.

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Anil Jeevan Daswani, Citigroup Inc, Research Division - MD and Head of Global Gaming Research & Hong Kong Country Research [39]

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My first question is on the Marina Bay Sands. Could you comment a little bit on the time lines of when you expect the project to be able to open? And also, could you give us some more color on the option for the additional 2,000 square feet of gaming area? Will that be focused on premium mass rooms in the new tower? Or are you going to focus everything on the existing casino?

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Patrick Dumont, Las Vegas Sands Corp. - Executive VP, CFO & Director [40]

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Hey, it's Patrick. Thanks very much for the question. I think there's 2 things to think about. I think there's a lot of work to be done on the front end. This is a very, very significant investment and a very meaningful project for Singapore. And like the initial Marina Bay Sands development, there is going to be a lot of review. Our goal is to have this thing open as quickly as possible. Our Chairman's view is that everything should be opened as quickly as The Venetian, which I think was 18 months. Is that right?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [41]

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Yes.

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Patrick Dumont, Las Vegas Sands Corp. - Executive VP, CFO & Director [42]

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So we're going to do our best. As a practical matter, on Page 16, we have a CapEx slide that you can see. We kind of laid out our preliminary views based on our development team's initial works. I think we're looking to open this thing by the end of '23, although hopefully, we'll be able to get it sooner.

For those of you who remember the initial Marina Bay Sands development, had some interesting in-ground issues related to water, sand, mud and a whole bunch of other things, so hopefully, we've learned from that and we can move a little more quickly. But we like to believe that this is something that by 2023, we're open and trading. And I think the -- sorry, what was the second part of the question?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [43]

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The gaming piece.

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Patrick Dumont, Las Vegas Sands Corp. - Executive VP, CFO & Director [44]

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Oh, the gaming piece, sorry, excuse me. The gaming piece. So all of the benefits associated with this development that we may receive are dependent on us achieving certain milestones. So this is something that, in effect, when we do the development and complete these milestones, we'll have the ability to access some of these benefits to the gaming.

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Anil Jeevan Daswani, Citigroup Inc, Research Division - MD and Head of Global Gaming Research & Hong Kong Country Research [45]

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Okay. As a follow-up on the premium mass player that we've been seeing and the strong growth that you guys have been experiencing in premium mass in Macao, could you comment on whether it's bet size or the sheer number of players that are driving this business for you guys?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [46]

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Interesting question. I don't know the answer on top of my head. I think it's -- for sure, it's more players showing up. That's a given. I'm not sure it's bet size as much as it's just a lot more people showing up.

And again, I think it's about where you sleep depends where you gamble. And since we have most of the better rooms and scale in Macao, be it the Four Seasons or The Venetian -- The Parisian, you tend to get the lion's share of wallet when you've got the suite they want to stay in. They may wander off to another campus, but the truth is, in our buildings, they have the shows they want, they have the food they want, they have the retail they want, they have the spa they want. So we get an outsized wallet share, and I think visitation is up on that premium mass segment. There's no question it's growing. I don't think it's bet size. I have to ask around on that question in detail, but I think it's more about the amount of customers showing up. And they're sure showing up. Again, $1.5 billion this quarter. It's just a spectacular number when you think about the margins against that segment. And we were built for this segment, and this segment is coming on strong.

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Operator [47]

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Our next question comes from the line of Robin Farley from UBS.

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Arpine Kocharyan, UBS Investment Bank, Research Division - Director and Analyst [48]

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This is [Arpine] on behalf of Robin. What is your view on Macao VIP and particularly, on Q1, VIP declines? Do you feel like that was sort of trade-related -- trade war-related? And do you see that improving as you look into Q2 in terms of overall market declines?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [49]

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Actually, the numbers speak for themselves. There was a decline, and I'd be foolish to guess exactly why, is it macro, is it China macro, is it trade war. I think that would be silly to opine on something I don't have real visibility into. I want to tell you though that having been in Macao for a long time, I can promise you, VIP will resurrect, and it's still an important segment and it trades in tandem with the very highest end of the premium mass market, the super premium mass and probably trades in sympathy with those kinds of people.

Yes, I think we believe VIP is worth investing in. We're doing that right now. We believe it will come back. This quarter was obviously disappointing for the market in terms of the decline. And again, I won't speculate on whether it's the economy, whether this is smoking or there's a trade war. I just don't know the answer to that. What I do know is it will come back. And I do know we're going to invest heavily if we want to get our fair share because we think it's an important segment to be in, we think our products are made for it, and we think our new VIP rooms and our better relationships will enhance our ability to get more of that share when it comes back. But that's the best I can tell you. The market speaks for itself, and you draw your own conclusions based on the catalyst for the decline.

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Operator [50]

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(Operator Instructions) Our next question is from the line of David Katz from Jefferies.

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David Brian Katz, Jefferies LLC, Research Division - MD and Senior Equity Analyst of Gaming, Lodging & Leisure [51]

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I wanted to just ask about your impressions of the economic context or the economic backdrop in China and how that's playing into the Macao business. Having made a recent visit, having seen some of the -- heard some of the commentary and seeing what the numbers today are, how are you thinking about the rest of the year?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [52]

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Well, we like to see, look, we were not experts in the economy, and I think, again, I'll be remiss to talk about how we blew -- view a huge nation. I will say, again, tourism and premium mass appears to be -- outbound tourism is strong. The premium mass play into the town is strong. Base mass is just fine. We don't try to pretend we understand the macroeconomic climate in China and give an opinion on that because there's so many different points of view and it changes so rapidly. But I will tell you that I think, again, Macao is showing real strength as evidenced by our numbers. And all I can point to is our success. I can't see the entire -- the other people's numbers, how they did. But our premium mass, base mass and demand for rooms is very, very strong. It's excellent, and it's evidenced by the $858 million quarter. And that's all we look at, how we see it.

It's a day-by-day, week-by-week, to sit and monitor the market. We don't pretend all's going to happen 6 months from now. We all know what the impact would be if the trade war's resolved. We just don't know the answer to that. All we do is run our business, look at outbound tourism, it's strong in Macao, it's strong in our buildings, and I'll stop with that comment.

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David Brian Katz, Jefferies LLC, Research Division - MD and Senior Equity Analyst of Gaming, Lodging & Leisure [53]

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You've said it. My follow-up is under what circumstances -- are there any circumstances where you would consider pursuing any growth or development in Las Vegas?

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Patrick Dumont, Las Vegas Sands Corp. - Executive VP, CFO & Director [54]

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Well, I think -- it's Patrick. I think we spoke about this a little bit in a prior question, but we're investing heavily in Las Vegas. We spend hundreds of millions of dollars of CapEx in room refresh, the casino refresh, and redoing our restaurants and entertainment spaces. We feel very strongly about the trajectory of Las Vegas and the potential, particularly with some of the investments we have coming in, as we mentioned, and as Rob mentioned, the MSG Sphere, which is going to be the most technologically advanced arena in the world, where we can see it's going to be an absolutely stunning investment because it will be completely unique, like a must-see globally. We're very excited about this stuff. So we continuously reinvest in Las Vegas to improve our offerings because it's competitive out there. I don't know that we're interested in doing a ground-up development because we have such a great asset base already where we sit. So that's kind of how we're thinking about it today. I don't know, Rob, if you have any other comments.

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [55]

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I think to Patrick's point, the returns here, it's a lodging-based market. Let's not look otherwise. It's a great place to live and work, and we've made a great -- our buildings have performed very well. The problem for us, Dave, is the returns outside here is far greater. I think the Singapore project is going to be extraordinary. If we get it right, it's going to shock a few people. And over the years, we've made some pretty good bets over the years with -- in Macao and Singapore. This one, I think, is going to be a very, very good investment and will surprise a lot of people. Obviously, Macao is the same way. We're deep into Osaka situation. We have a few other jurisdictions we're looking at, which we won't tell you which they are. But we are always looking, and the problem is Las Vegas doesn't have the return that we get in other markets, except for our own building. As Patrick alluded to, we'll invest heavily in The Venetian and Plaza. And we are making some very large bets in this building to make it better and improve it and stay current. But I don't foresee us investing in Las Vegas because everything's out there and the rest of the jurisdictions are so much better in terms of return on our investment. And again, Singapore is a very large bet, but it's also a great investment.

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Operator [56]

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Our last question is from the line of Jared Shojaian from Wolfe Research.

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Jared H. Shojaian, Wolfe Research, LLC - Director & Senior Analyst [57]

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Can you just talk about hold on the mass side? Obviously, VIP was above the range, but it seems like you're Non-Rolling Chip win rates were a bit higher than normal, too. Anything different operationally or that you saw in terms of play? Or do you think that's sort of simply just holding better on the luck side?

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [58]

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Probably, we held it in the range. I think I would say that we held it in the range. Let's begin there. We held the high end of the range, but within the range. And again, that's just one indicator. Drop is one indicator, not a perfect one of volume.

The base mass business and premium mass business is growing very, very strong. The weakness in the non-rolling business resides at the super premium mass, again, which trades kind of in tandem in sympathy with the junket segment.

All I'd say is we didn't hold outside the range, which is good. If we only could make $6 billion this year and not only win, I'll be happy, I'll leave it there. It's not an exceptional result. When we hold 2021, we don't call it out and say, gee, we were held a few points at the low end of the range. So you can make an argument that premium mass helps us and we sure get our fair share of really high-end premium mass play and lots of it, and perhaps, that helped this quarter but it could be down next quarter. When it's all said and done, it's a non event, it's not going to matter at the end of a day, but a $1.52 billion result in non-rolling tables is just a great quarter with margins to match, so we're very pleased.

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Jared H. Shojaian, Wolfe Research, LLC - Director & Senior Analyst [59]

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All right. And then just switching over to Singapore again. Can you give us some sense as to what percentage of your GGR is, I guess, coming from guests that are exposed to the entry fee? And then in the near term, puts and takes, obviously, you have the higher entry fee, but then you get the additional slots later this year. How are you thinking about Singapore in terms of the 2020 net impact? Is it EBITDA positive, neutral, negative versus what you were thinking before the announcement?

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Patrick Dumont, Las Vegas Sands Corp. - Executive VP, CFO & Director [60]

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So we don't really get into the details about splits of EBITDA from locals. I think the key thing here is this is a great investment for us and a tremendous investment for Singapore. And we work very closely with Singapore to establish the program and to decide exactly how to do this. I know that our other co-concessioner did as well. This is a massive amount of foreign investment going to Singapore that's going to fundamentally allow for a step function in growth in leisure and business tourism. This is a very big deal for us and a very big deal for Singapore. We're very proud and very lucky to be able to do this. And I think, in our minds, this is something that over time will be a very favorable long-term investment.

We don't know the timing of everything yet, so it's hard to answer your question about cash flows, but we take a very long-term view. And over the next 30 years, this is going to be a great investment for us and a great investment for Singapore just as the original MBS building was as well.

And so I think, on Page 27, we kind of lay out the investment case for Singapore a little bit. We have a couple of slides where we show the growth in tourism. We talk about some of the investment that Singapore is making in Changi Airport, how that infrastructure addition is going to help tourism growth. And just we address some of the themes around why the IR expansion will deliver what we all hope it will deliver. We're very focused on this arena. We have great success with our arena in Macao. It's something that we feel like LVS will be the Asian leader in live entertainment, with the ability to program these 2 great venues. And we think it will be something that will really benefit Singapore and benefit us, both from the desirability of our resort as well as our ability to fill our hotel rooms.

So from our standpoint, it's hard for me to answer your question, what's going to happen, timing and cash flows, because we're not really that close yet. What I can tell you, the long-term thesis is a strong one. We're very enthusiastic about this investment. We feel it's a great one for the company and will produce good returns as well as the fact that it will enhance the overall attractiveness of the MBS asset as well as drive additional leisure and business tourism in Singapore.

So from our standpoint, this was tremendous, and we're very proud about it, we're very excited to do it. But I can't give you specifics about exactly the timing of cash flows or the slot machines or entry or tax increases because we're not there yet.

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Robert Glen Goldstein, Las Vegas Sands Corp. - President, COO & Director [61]

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One thing I will add to Patrick's comments though, the answer to your question about local versus foreign, it's clear when you build 1,000 square-foot suites and you build this kind of arena, you're focusing on foreign tourism. The growth here will come from premium mass people outside of Singapore, and that is where the growth resides. It's all those people in countries around Singapore. That's why we're building this thing. If we didn't see that kind of growth, we wouldn't build all these keys and build this arena. And we believe there are so many drivers of profitability from the ADR, from the gaming side, from the retail side. It's a wonderful opportunity. But again, the laser focus is premium mass, foreign tourism.

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Operator [62]

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This concludes today's conference call. Thank you for joining. You may all disconnect. Have a wonderful day.