拉斯維加斯金沙集團 (LVS) 2017 Q4 法說會逐字稿

Good afternoon.

My name is Jesse, and I'll be your conference operator today.

At this time, I would like to welcome everyone to the Las Vegas Sands Fourth Quarter 2017 Earnings Conference Call.

(Operator Instructions)

I'll now turn the call over to Mr. Daniel Briggs.

Thank you.

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

Before I turn the call over to Mr. Adelson, 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.

We also want to point out that we have posted supplementary earnings slides on our Investor Relations website.

We may refer to those slides during the Q&A portion of the call.

(Operator Instructions)

Please note that this presentation is being recorded.

With that, let me please turn the call over to our Chairman, Sheldon Adelson.

Thank you, Dan.

Good afternoon, everyone, and thank you for joining us today.

Our company delivered another great quarter, and I am very pleased that we ended 2017 with such strong financial results.

Company-wide adjusted EBITDA reached USD 1.34 billion, an increase of 20% over the prior year, driven by outstanding growth in Macao and Singapore.

This has given me a hint that I should change my middle initial, meaning Gary, to growth as I've done before.

So it's now Sheldon growth Adelson.

Our Macao operations produced its best quarter since quarter 3 2014 with adjusted EBITDA reaching USD 731 million.

Hold-normalized EBITDA came in at USD 758 million, representing growth of 30% over the prior year.

Macao's mass market growth accelerated during the quarter, 5% in quarter 3 to an estimated 18% in quarter 4. We again outperformed the market in mass gaming growth as we have throughout 2017.

Our Non-Rolling table drop grew by 18% over the prior year, while our Non-Rolling win grew by 27%.

This outperformance in mass revenue growth drove significant margin expansion.

Our hold-normalized EBITDA margin reached 35.1% to the quarter, an increase of 320 basis points compared with the prior year.

The structural advantages that enable us to drive mass non-gaming growth were fully evident during the quarter: the scale and range of our hotel suite inventory; the diversity of our non-gaming offering, especially in retail and entertainment; and the unique benefit of interconnectivity between our Cotai properties.

These advantages allow us to attract more overnight visitors than any other operator as well as increase in length of stay.

As a result, we grew by an exceptional 52% in premium mass when compared to the prior year.

We achieved hotel occupancy of 94% in the fourth quarter despite having added approximately 3,000 rooms to our inventory just over a year ago with the opening of The Parisian.

At over 1 million occupied room nights in the fourth quarter, this was an all-time quarterly record for our Macao hotels.

Our MICE business has gone from strength to strength, growing by 44% year-on-year to just under 290,000 room nights in 2017.

Our strategy to build integrated results with scale and diversity is clearly paying dividends as Macao's mass and tourism growth accelerates.

The opening of The Venetian Macao 10 years ago marked the first step in my vision and created the Cotai Strip.

The Venetian introduced large-scale, non-gaming amenities to Macao such as retail malls, MICE, live entertainment and arenas.

These attractions are now well established in Macao and will continue to flourish and grow.

I cannot be more proud of the fact that, today, after receiving more than 290 million visitors, The Venetian Macao stands as the most integrated -- sorry, the most visited Integrated Resort in Asia, if not the world.

We've also successfully established The Parisian Macao as a new landmark, must-see destination resort.

The Parisian Macao achieved EBITDA of USD 412 million in its first full year of operations and welcomed over 15 million visitors to the property.

The rapid development of digital and social media marketing in China has been instrumental in establishing The Parisian Macao with its iconic Eiffel Tower as a marquee attraction for Chinese travelers visiting Macao.

The brand recognition we have generated for The Parisian Macao on these platforms has simply been incredible with over 5.2 billion impressions as of December 31.

The addition of The Parisian to our Cotai Strip portfolio has taken our critical mass and diversity of offering to another level.

The Parisian, together with The Venetian, Four Seasons and Sands Cotai Central, all interconnected, is the only MICE-based Integrated Resort complex of this scale in the world.

I'm truly grateful to the Macao government and the local community for their great support over the years in enabling us to implement this vision and strategy.

It is in that same spirit of deep commitment to Macao's future development that we announced last October that we would be reinvesting over USD 1.1 billion over the next 2 years in expanding, renovating and retheming Sands Cotai Central into The Londoner as well as adding approximately 650 high-end hotel suites by completing the 2 towers at the Four Seasons and the St.

Regis.

The Londoner will have tremendous potential as the third landmark must-see destination.

The scale of the current SCC assets are unmatched in Macao, including over 6,000 hotel keys, a 400,000-square-foot retail mall, a 1,700-seat theater and over 300,000 square feet of developed MICE space.

The Londoner renovation and expansion will completely re-envision the property, developing another 1.7 million square feet of space, expanding and enhancing all our offerings, hotel suites, retail mall, F&B, entertainment and MICE.

The fourth quarter results at SCC demonstrate the earnings power of this building with quarterly EBITDA of over USD 200 million, anchored by its strong position in premium mass segment and the scale and range of hotel suite inventory.

But the full potential of this property in catering to every segment of the market is yet to be realized, and that is why it's exciting for us to embark on The Londoner project.

Upon its completion, The Londoner will accommodate more overnight guests than The Venetian and The Parisian combined.

The Londoner will offer great potential for visitation and growth as a standalone Integrated Resort but will also provide synergies with The Venetian Macao and The Parisian.

Having 3 iconic must-see European-themed destination resorts with a broad range of amenities will strengthen our marketing and customer service capabilities and position us to grow faster than the Macao market in every segment on both the top line and the bottom line in the years ahead.

Sands China is a company rooted in Macao, and we will continue to strongly support the community.

Following the pledge of MOP 65 million by Sands China and the Adelson Family Foundation to assist with the rebuilding efforts in the aftermath of Typhoon Hato, we've been working hard to provide financial assistance to the individuals, institutions and charities that have been significantly impacted.

This long-term support of Macao will continue in the coming months ahead.

At the same time, we remain as committed as ever to playing the pioneering role in Macao's transformation into Asia's leading business and leisure tourism destination.

Our decision to reinvest and develop The Londoner Macao reflects that long-term commitment to Macao and our confidence in its future.

We regard it as a privilege to contribute to Macao's success in realizing its objectives of diversifying its economy, supporting the growth of local businesses and providing meaningful career development opportunities for its citizens, including through our Sands Academy, and reaching its full potential as Asia's leading business and leisure tourism business.

Now moving to Marina Bay Sands in Singapore.

We delivered another excellent quarter at Marina Bay Sands with EBITDA of USD 456 million, an increase of 25% over the prior year.

The quarter was marked by a strong VIP and slot revenue growth.

Normalized EBITDA margin increased by 190 basis points versus the prior year, reaching 52.5% for the fourth quarter, supported by solid cost control and efficiency gains.

Our retail mall also continues to outperform the broader Singapore retail market with strong tenant sales growth of 10% year-on-year in 2017.

It is worth noting that for 2017, the total operating profit for our malls in Singapore and Macao exceeded USD 570 million.

2017 was a record year for Marina Bay Sands in adjusted property EBITDA when measured in Singapore dollars.

Because of its business and leisure tourism appeal and strong positive impact on the local economy, Marina Bay Sands continues to serve as a powerful reference site for emerging jurisdictions that are considering large-scale Integrated Resort developments.

Now let's move on to my favorite subject, the return of capital to shareholders, yay dividends and yay buybacks.

Our recurring dividend remains the cornerstone of our program to return capital to shareholders.

Last October, the Las Vegas Sands Board of Directors approved an increase in our recurring dividend for the 2018 calendar year to $3 per share for the year or $0.75 per quarter.

After establishing our recurring dividend program in 2012, this marks the sixth consecutive year that we have increased our recurring dividend to our shareholders.

We remain deeply committed to our recurring dividend programs at both Las Vegas Sands and Sands China, and we look forward to increasing those recurring dividends in the future as our cash flows grow.

At the same time, we will remain opportunistic in returning excess capital via our share repurchase program.

We repurchased USD 75 million of stock during the quarter.

We look forward to continuing to utilize the stock repurchase program to return excess capital to shareholders and to enhance long-term shareholder returns in the future.

Our leverage or debt-to-EBITDA ratio remains low at 2.0x on a gross basis and only 1.5x on a net basis.

My view of our leverage levels has not changed.

We're comfortable with the debt-to-EBITDA ratio of between 2.0x and 3.0x on a gross basis before any additional debt related to development opportunities in new markets.

In conclusion, our cash flow generation continues to be strong and predictable.

The structural advantage from our scale, critical mass and product diversity remains evident in our strong financial results.

The resurgence of growth in the Macao market has continued during the quarter with mass market growth accelerating.

It feels like we have now returned to 2014 and this -- the period prior to that.

Very excited about the growth that we're experiencing in Macao.

We have grown faster than the market in mass, in both the fourth quarter and in 2017 as a whole.

We will continue to make significant investments in Macao because we have a long-term and unwavering commitment to Macao.

The substantial redevelopment of Sands Cotai Central into The Londoner Macao will add a third iconic must-see destination to our Cotai Strip development.

The full-scale utilization of the 2 apartment hotels that was -- comes at an opportune time as we look to take advantage of the structural growth in Macao in the coming years and stay ahead of the competition in terms of the quality and scale of our product and amenities.

We look to the future with confidence.

We have a strong organic growth outlook.

We are strategically reinvesting on our existing assets while also pursuing new development opportunities, and we have both the intent and the financial strength to continue to return excess capital to shareholders.

Thank you for joining us on the call today, and now we'll take questions.

(Operator Instructions) Our first question comes from Felicia Hendrix with Barclays.

Rob, I just wanted to start with you, and maybe we could just talk about The Parisian for a moment.

And I did want to thank you for the -- Dan, for the really nice detail on the deck on that because it was helpful.

So at The Parisian, it looks like last quarter may have been an anomaly on the VIP side.

So just want to talk about that relative last quarter, this quarter and how we should think about VIP at the property and what might have changed.

I'm not sure it's anomaly as much as it was a very, very strong quarter.

We've always cautioned you that, these concentrated levels of play sometimes, be it Singapore Macao.

And clear we'd be -- The Parisian has a very, very strong play last quarter.

I think The Parisian has captured the most important segment of all the base mass.

However, the room product we built at The Parisian just isn't sufficient to meet the premium mass demand, and that will change with the addition of 300 more suites that come onboard in 2018.

In addition, the Four Seasons apartments will still be available to us for use in sometime in probably Q2 of '19.

So I think with those 300 more suites and the 300 or 400 of the Four Seasons, you'll see a much stronger premium mass customer at The Parisian.

We had a demand.

Frankly, we don't have the room product to satisfy demand.

In addition, we should keep in mind that The Parisian was down 600 rooms this quarter, so it suffered a bit there.

I think it's early days in The Parisian's evolution.

I believe we'll get much stronger.

We're -- also, you should note that The Venetian performance this quarter were pretty extraordinary, and that's the direct result of the 1,000 keys back onboard, premium mass keys, that drove most of that play.

So I think you'll see a light kind result at The Parisian once you get the product right.

We built a very, very nice hotel, very attractive hotel, a great-demand hotel.

I'm not sure we built the right room product to satisfy the demand we created.

This incredible double-digit growth we're seeing in Macao, it matches perfectly with our massive footprint, our lodging, gaming retail footprint.

And even though we're the market leader in mass, as you know, we still outperform the market by 25%.

Our mass table and slot revenue grew by over $300 million year-on-year, but we think that's as much as 40%, 45% of the mass growth in the entire market.

And as Sheldon referenced, to see numbers of that magnitude, you have to go back to '14.

We did $1.5 billion roughly in the mass table and slot win this quarter, pretty extraordinary numbers.

I'm convinced The Parisian will participate, just like SCC and Venetian, once it has the appropriate room product matching up with its mass and premium mass appeal.

So yes, on the terms that we had more concentration of rolling play last quarter.

But yes, we believe, long term, Parisian is a very strong product.

It's just early days in its infancy.

Okay.

So that's helpful.

And then just switching gears, Singapore, Rob.

You have highlighted previously that VIP, the volumes could be volatile there.

So I was just wondering if the decline year-over-year there was just due to the normal ebbs and flows in your business or anything else.

And then also on the mass side, you did better than what we were looking for in the quarter, but the volumes were also lower year-over-year as well.

So I was just wondering if you could comment on that.

Sure.

I have 2 thoughts on Singapore.

One is we're extremely pleased with the result this year, and $1.7 billion is a pretty extraordinary result.

Yet I would caution, either realize that Singapore has -- is the -- is not growing on the rolling side.

In fact, it declined a bit.

And as we mentioned ad nauseam, it's highly concentrated and continues to rely on a too small segment of customers to drive it.

So we're not seeing growth in that segment.

We are seeing extraordinary management.

I'm really pleased with the team over there.

They did an excellent job of controlling costs, commissions, everything across the board to create these big numbers that came out of MBS this year.

I'd also agree with you that we're not seeing growth in the mass segment.

They -- it's hovering around $4.4 million, $4.5 million, $4.6 million for the last 8 quarters, and I am disappointed we haven't seen more growth out of Singapore.

I don't know why I would say otherwise into the future.

I don't see why it would be any catalyst in the near future to drive that.

Singapore is a wonderful success story.

But at this point, it's just a very large producer of EBITDA without growth prospects in the near future.

So we would applaud management's efforts this year to create $1.7 billion.

It could have been a lot less.

And yet, I'm hoping we'll see growth to make it easier in the future to create some more growth, be it Rolling or Non-Rolling.

Your points are appreciated and agree with.

Your next question comes from Stephen Grambling with Goldman Sachs.

I guess on the Sands Cotai Central renovation of The Londoner, I may have missed this, and maybe it's in the deck.

But what are the factors to mitigate any kind of disruption there?

And any sense for how you can quantify the potential impact or compare it to other types of renovations?

I can't really tell you what the impact would be.

I do believe there'll be disruption.

That would be foolish to think otherwise.

It won't happen in '18 until the very, very end of the year.

We'll close down the Holiday Inn product late, late year, probably November, December.

In the next 10 months, you won't see any disruption whatsoever.

And I would also just highlight that as the numbers coming at SCC, $200 million plus this quarter, are just terrific, and it shows the power of that room product.

But imagine we're going to marry that product to a base mass demand and a retail demand and get that product up to The Venetian-type numbers.

And I believe we can exceed $1 billion and more when we get The Londoner right.

Disruption is very hard to quantify.

I would say to a positive side, we have 2 different casinos there.

We can move business back and forth.

The St.

Regis will be under construction in the rear and will not be as -- it won't be an operating hotel.

It's just a shell at this point, so that will be less disruptive.

The Londoner would be more disruptive, the transition from the Holiday Inn to The Londoner.

There'll be some pain along the way.

I have a hard time, Stephen, giving you a number because I don't know that number.

It's never been done in this size and scale.

It's truly a Herculean task, but I think the net result in '20 is going to be very, very helpful to the company.

We see great things at Macao this quarter.

Our run rate $758 million normalized is pretty astounding, and the market just seems like it has great, great win behind it.

And so what we think it's a great transition for us to achieve.

It will be disruptive in '19.

Don't want to quantify because I simply can't.

That's helpful just thinking about the puts and takes.

And then maybe changing gears a little bit.

There's been the Macao Hong Kong bridge is seemingly always been in process.

Are there things that you're doing as you think about the potential opening coming up in the next 12 to 18 months hopefully?

What are the things that you can do to try to position yourself to benefit from that?

And how do you think about how that will benefit the market?

I think we have to wait and have confidence the government will deliver us a bridge sometime this year and will take...

They're saying it will be done in the first half of this year.

Right, right.

Yes.

No.

I think we'll just wait and see.

I mean, I'm not sure we can do a lot but wait and see.

The connectivity, how we can -- obviously, it benefits the entire market.

We're excited to see it happen, but it's hard at this point to make a concrete observation that we would do us a company.

I think as an industry, we're waiting and hoping that thing can really deliver some fresh products and fresh customers and be a real value add.

We've all been anticipating this for a long time.

It's a major achievement for the government to achieve it and get it done.

And we, as operators, wait patiently to see how it works.

Your next question comes from Shaun Kelley with Bank of America.

This is Barry Jonas, in for Shaun.

For Macao, I was just wondering if you can give any color on what you think drove the 52% growth in premium mass in Q4.

Is it just more of volume of players, lower players stepping up or just the quality of players driving it?

I think it's all the above.

I think it's a lot more players.

I think it's larger people -- bankrolls perhaps, higher visitation.

I also think as a company, it's underappreciated how valuable these assets are.

They're coming from further away.

They're younger.

They're, I think, more affluent, the new generation we're seeing, especially in the Plaza and even in the new Venetian suites.

I think we're experiencing a really strong growth period that is further and further outside Guangdong.

The visitation outside Guangdong is growing.

And to us, as the guys who own 13,000 sleeping rooms, it's pretty good.

We're seeing huge demand.

Hotel rates have spiked.

Occupancy has spiked.

Our entertainment offerings have just been extraordinarily well received.

We can't get enough shows in there.

They just keep adding more and better shows to the mix, and the reception has been phenomenal.

So our growth is tied very simply to -- it's coming from further away.

We've got the sleeping rooms to accommodate it.

It's mass and premium mass.

It's every weekend.

It's midweek.

We're seeing numbers midweek that used to be weekend successes.

We're seeing dropping numbers that are just simply off the chart.

A year ago, couldn't comprehend these kind of numbers you saw in the last 3, 4 months.

It's very exciting, and it's full force.

And December was even stronger than November and October, so we're hoping this continues to charge forward.

And I think our biggest advantage is this massive footprint of 13,000 sleeping room is primarily in Cotai.

The growth is in Cotai.

That's our major footprint, obviously.

It's entertainment driven.

It's mass, premium mass driven, and it's coming outside Guangdong, all which, honestly, falls into -- that's the reason we're growing so quickly.

$300 million of growth in 1 quarter year-on-year in mass is pretty extraordinary for any company.

Great.

And then just a quick one on Vegas.

I'm wondering if you have a view on other operators starting to invest again in the Vegas market.

I know in the past you've talked about maybe converting the condo tower to 1,000 hotel rooms or so.

And while we're talking Vegas, any update on the arena JV with MSG?

Yes.

The arena JV with MSG is alive and well.

Construction will start this summer.

It's going to be quite an arena.

We'll have a public -- Jim Dolan and Irving Azoff and Tim Leiweke are coming out here to present publicly.

I think it's going to be in March, is it, in February, March?

Not sure of the date yet, but you're going to see something that's pretty spectacular.

I know our neighbors across the street, the Wynn guys, have seen it, and it looks extraordinary.

It's a great build.

It's just a great -- what Jim Dolan is to build is extraordinary.

So we're looking forward to construction commencing this summer, hopefully open in 2020.

As far as more people building in Las Vegas, why not?

It's a great market.

It's a great place to live and work.

The growth is returning to Las Vegas.

It's more of a lodging-based market than it's ever been in the past.

The Black Knights have done extraordinarily well.

The hockey has been -- is just terrific.

The football is coming.

Why not?

Las Vegas has some great days ahead of it, so we're very much in favor of the market growing.

And if a competitor wants to invest dollars, so be it.

Your next question comes from Anil Daswani from Citigroup.

Just another one actually on premium mass in Macao.

Clearly, that's been outperforming the base mass business.

Do you guys see that being the key driver in '18 and '19 as well?

And can you give us a flavor for how many rooms you guys are now comping in the premium mass segment and how that's compared over the last couple of quarters?

In addition, once you guys open the St.

Regis suites as well as the Four Seasons suites, do you see that comp ratio going up as you can put in some higher-end premium mass players into your product?

Well, there's no question that premium mass is where the money is being made.

It's double -- it's 52%, and base mass is double digit.

And we're not complaining about solid double-digit growth in base.

But to your point, the driver is premium mass unequivocally.

As far as our approach to this whole thing, we -- clearly, we're building this -- we think about this.

We're going to add 650 keys using the Four Seasons, the St.

Regis sometime in '19 that will be built for the premium mass customer, and those customers drive extraordinary amounts of business on buildings.

We're extremely excited about what could be a surge on our business next year from that.

There's no arguing that that's where the profitability is coming from.

We still like our base mass.

It's important to us.

What's driving this market right now for us and for most of the operators is the premium mass customer.

We're 50-50 cash-comp mix right now in the -- in cash versus comp.

I can't see it changing a whole lot, but I do think the lion's share -- the greater lion's share of the Four Seasons suites and the St.

Regis will go to the premium mass customer, probably it'll be much more skewed to that base.

I mean -- those ones are built -- those products are built for that, that customer.

As long as they perform at the levels they're giving us now, and we can keep growing our top line and the flow-through is there, it'd be extraordinary.

Why not?

As you see our flow-through this quarter, not just the top line growth, but the flow through the margin, has just been excellent.

And so that's the future of the business as we see it today.

And my follow-up would be is there any update on monetizing the mall product in Singapore?

It's Patrick.

So right now, as you can look, the -- to your view, your sales number, sales per square foot in Singapore was up 15%.

It's the best mall in the world.

It's exceeding everyone's expectations in terms of performance.

We saw some tenant remixing going on.

We think we'll get more out of that asset in the years to come.

We're very proud of it.

It works incredibly well.

It demonstrates the power of the Integrated Resort.

That being said, we have nothing to update anyone on the process.

If anything happens, we'll let you know.

But right now, we're optimistic.

We're hopeful that, at some point, that will come to fruition.

But at this time, we're really just proud of the asset's operating performance, how iconic it is, how well it fits in with the rest of the Integrated Resort.

And we'll let you know if we have anything to update you on.

But at this point, no comment.

Your next question comes from Joe Greff with JPMorgan.

Sheldon, you always say that one of your favorite topics is the return of capital.

Given the momentum and across the board and all of your markets, what we would characterize as limited CapEx over the next few years relative to your free cash flow generation, is there any appetite to assess capital return more than just once a year, i.e.

2 times a year or every quarter?

Joe, it's Patrick.

So the highest and best use of our capital is for our Chairman to make investments to high-growth projects, so that's our primary focus.

So if there's an opportunity in Japan or Korea, we hope that we can put our Chairman to work and have him develop something ordinary like he does in every other market we're in.

That being said, if we have excess capital, I think we've said all along, that our dividend is our return-to-capital cornerstone.

And so we'll look to increase that prudently and sustainably in the future.

And of course, the lever that we can pull to modulate our return of capital is our share repurchase program.

So I think if you kind of look through that waterfall, that's how you should frame out any excess capital that we have, and we'll go by that guidance.

That's something that we talk about with the board very frequently.

That's a discussion we have with our Chairman very frequently, and I think that's how our company and shareholders ultimately will get comfortable.

So I think that's kind of the process you should have in your mind or framework you should have in your mind as you think about excess capital and what we look to do with it.

Your next question comes from Carlo Santarelli with Deutsche Bank.

I know you've taken a few already on premium mass, but maybe, Rob, you could help a little bit.

Just always had the perception that, that kind of premium mass and VIP were somewhat tethered, at least, from a cadence perspective.

Obviously, premium mass, as you mentioned in the slide, was up 52% year-over-year, where Rolling Chip volume has kind of slowed a little bit and were up kind of mid-single digits.

First of all, could you just talk a little bit about the decoupling of those 2 metrics?

And then maybe if you can, any specific industry drivers in terms of where you're seeing kind of that strength in the premium mass for Mainland China coming?

Is it any specific industries or sectors of the market that are really driving it?

I'll speak to, Carlo, the second part first, and that is I don't think we can identify where it comes from in terms of the drivers, what industry or what business they come from.

We can tell you with certainty it comes outside Guangdong increasingly.

What we like to see and we're seeing is more penetration in the other provinces.

We're seeing fresh money, fresh customers.

It's very encouraging.

We're seeing younger people.

We're seeing them packing our retail malls and going to see our shows and using our suite product, and we're seeing lots of them.

So I would think that is a very positive sign for us.

As that increases, again, that's one of our hidden advantages or not-so-hidden advantages.

As far as the decoupling, I missed that part of the -- to your point, what has happened because I agree with you that typically, historically, these 2 segments were tied together at the hip.

The premium mass grew like it's grown.

You see junket grow much more.

One of the theories I have, and it's not substantiated, is that perhaps we're seeing more and more younger people opt for direct play and not going through junket.

And they're opting not to -- this has raised the rolling environment.

We're seeing -- we're -- we, of course, have not been as strong as others.

Wish we were.

We're not as strong as others in the rolling business.

And with the junkets, we're trying very hard to increase our share.

We want to be back to the industry average, and we're working with the junket people as well as with our physical product, I mean, to improve it.

But clearly, this quarter has been the decoupling of those 2 segments.

And I guess I would think this way that demand is still there to gamble, but perhaps the demand is moving more towards direct non-rolling as opposed to a rolling chip program tied to a junket operator.

That's the only rational explanation I can give you.

I think demand is still there and demand is there stronger than ever, but perhaps it's moving away from the rolling segment into the non-rolling, which, obviously, has some real benefits on the margin flow-through.

And again, from our perspective, there's more of them.

We're seeing a lot of customers, and we're seeing a lot of people outside Guangdong.

And so our rooms are being used, especially on weekends and holidays and even midweek.

Some of the non-rolling drop we're seeing is just extraordinary, and so that's as good an explanation I can give you.

I don't know if I can give you more clarity on the decoupling.

But clearly, the number's evidence it's there.

What I'd like to tell you -- it's Sheldon.

What I'd like to tell you is that Macao feels like it's going back to 2014 and prior to that.

Nobody could tell you with certainty how much the VIP is going to grow in the forthcoming year, how much the mass is going to grow.

The mass is comprised of additional people, and we're -- and Macao is getting additional people.

I see on our [lays-accounted] -- counts every day, on some weekends and holidays, we get as many as 400,000 people in 1 day coming into our properties.

That's quite a bit, 400,000 people.

So I see Macao growing like it did before, and we're going to take advantage of that.

Spending the money in The Londoner is for the purpose of re-theming the property and bringing the same number of people to the Sands Cotai Central, soon to be called The Londoner.

They were asked -- you asked before, and Rob answered that it's going to be a major disruption.

I disagree with that.

I don't think it's going to be any major disruption any more than any of the property that's re-themed.

So we have the equivalent of 2 properties, 2 individual properties on that side of the world.

We call it -- it's slots 5 and 6. Or narratively, we would have 1 launch, 1 theme.

And here, we've got 2 launch together, and we still don't have -- we don't have a theme per se.

I don't see any reason for this to be any more disruptive than any other renovation of any other property or hotel anywhere.

So as a matter of fact, there is -- there will be 2 major entrances: 1 for the first 2 buildings and 1 for the last 2 buildings.

So it's not as though the entire property is going to be worked on at 1 time on 1 day and all the entrances will be closed.

We'll be doing it in sections where we'll have the least disruption.

So I disagree with the fact that it's going to be a major disruption.

Your next question comes from David Katz with Jefferies.

I just wanted to ask one detail.

And as I look across at the progress of The Parisian, I'm just trying to think through what the EBITDA margin opportunity or aspirational level could be based on looking at some of the other properties in Cotai, which are -- have managed to get up into the 30s.

And last quarter was particularly high, and this was a little bit lower.

And if you could just color that in a bit, that would be helpful.

Yes, sure.

Listen, I think we should be clear that we have a lot of belief in The Parisian.

It hit 30% at 30.6% in Q3 '17 margin.

It hit 29.3% this quarter, normalized.

But I think the whole story isn't margin.

The whole story here is we're missing an important part.

Look, the growth in Macao this quarter, our growth and the market's growth is tethered to premium mass.

We're not getting our fair share.

It's simple.

We have demand like crazy in that property.

Walk in it.

It's chock-full of people want to stay there.

They're disappointed in the room product.

We need more premium suites to address it.

That product -- we went back and redid these suites.

They're very, very -- I was there a couple weeks ago, walked thought, very pleased with the end result.

It's a very aesthetically pleasing product.

The customers are going to love it.

It comes onboard first -- in the Chinese New Year's and throughout the year.

I think it's very simple.

The Parisian needs more top line to get to the $150 million, $160 million, $170 million.

I want to see it be a $500 million to $600 million building.

It's going to be there.

It's a question if it's going to be reflective of the market.

The market, as we've talked about for most of the call, David, is tied to this massive tsunami of revenue coming up here in mass.

We saw it at the Four Seasons.

We're seeing at the -- for sure, we're seeing at The Venetian.

The Venetian numbers are just terrific, and we're making $1.5 billion a quarter top line at The Venetian in these base mass and premium mass markets.

We saw it this quarter at Sands Cotai Central.

There's no way not to see The Parisian getting there.

But every market, customers dictate where they want to spend their money, dictate where they want to be.

They want to be at The Parisian.

They want to sleep, for example, at the Four Seasons right now because the room fog is much better.

You can see that the Four Seasons is taking off, and they got to $75 million this quarter, normalized, instead of being a $300-plus million building.

Once we fix the room product, both inside The Parisian -- and honestly, the Four Seasons suites are the hidden opportunity for us.

If you get 600 or 700 suites between the 2 of those buildings adjacent to The Parisian, you're going to see an uplift -- a big uplift in The Parisian, and I think you'll see it in the Four Seasons.

The Four Seasons and The Parisian almost work in tandem, if you think about it.

One's more of a mass, very attractive product.

One's a very high-end product.

You throw in 650 or so premium mass suites, you're going to see some very, very good numbers out there.

I don't want to make you feel as though we're disappointed that we haven't gotten there, but we are disappointed we haven't gotten there.

We need to fix the product and get where it can get to.

This product can be every bit as strong as we were seeing at the other buildings that have the right mix of room.

And the SCC results this quarter reflect a very strong room product with no base play.

That's why The Londoner is going to happen.

The Venetian, it shows that product would also in the city, great mass play, premium mass play, even great rolling play.

And with 1,000 new rooms in The Venetian, it's becoming a world-class product again, could get to 1,400, 1,500.

We think there's a lot of run room left.

If this market continues to grow double-digit premium mass, we're in a whole new place in Macao, a whole new place in making money, pretty exciting times for us.

So one other quick comment.

If you remember, a couple of quarters ago we talked about the expenses we took out of the business and the rationalization that we did in order to make it more efficient so that when we did receive revenue growth, it would be leveraged against that revenue.

I think you've seen that in Sands Cotai Central, the margin change there in this quarter.

One thing to note, as Rob referenced, the rooms that are offline and are being modified or being changed to address the customer, that's very high value and very high margin.

So the segment differential there and the value that our customer will be seeing, eventually you'll see better flow-through in The Parisian when those rooms open up.

And just as you did in Sands Cotai Central, as you've seen this from our margins, you get The Venetian.

So system-wide, we're very happy with our expense base.

As we said in prior quarters, you'll start to see the margin expansion.

As revenues grow, we believe that will continue.

Your next question comes from Robin Farley with UBS.

Great.

I wonder if you could just sort of speculate out loud a little bit on why you think the VIP volumes aren't growing in Singapore, just given the improvement we've seen from other VIP play in Macao, just why that's not happening in Singapore.

Okay, Robin, and I'll take my best shot at this.

First of all, we've always said it's concentrated to not thousands but hundreds of players.

I also think that Singapore is somewhat a victim of you've got some competition in the region.

I think the Philippines have grown a lot.

The Highlands have been renovated nicely.

I think you've got -- Macao is going to be a very, very important destination for people coming out of Korea and even Japan.

Much more -- I think it's much easier to go to Macao than Singapore for lobby, premium mass Chinese play.

I have to point to those examples.

As well as you know, we've had some -- we have to be very careful.

We cannot remarket Indonesia.

That's become increasingly more difficult, and so we're very cautious.

We run our business that way.

We take no risks with marketing.

We take no risks with collections.

We take no risks we think are unnecessary.

You're right.

I think the growth in Macao is driven by premium mass Chinese business out of Mainland China that I think is opting to go to very, very nice resorts in Macao that are attracting a lot of attention.

It's also easier to do business in Macao in terms of credit, money movement, et cetera.

So I think we're the victim of a very strong Macao market, an increasingly strong competitive market, be it the Highlands, be it Philippines, et cetera.

We're not far from giving up.

I mean, the property made $1.7 billion, not too bad.

And as you know, my bigger concern is not in the rolling but in the premium mass and the non-rolling because that's where most of our profit resides and most of our margins are 60-plus.

That's more concerning, and that's a mix that comes out of -- there's a decline in Singaporean patrons but also a decline in other markets around us.

So as much as we focus on rolling, I think the non-rolling is more disturbing.

You can't grow that number beyond $4.5 million, $4.6 million for the last 7, 8 quarters.

We're going to keep at it.

We got a very good team on the ground there.

We'll keep looking at cost, but obviously, love to see some top line growth.

And that's the best indications or best thoughts I can give you on the growth prospects for Singapore.

We're going to press more in the Pacific Rim countries, in Korea and Japan, to come to Singapore.

I'm very excited about Singapore reaching the highest quarter that we've had -- or the year for -- since we opened it in 2010.

So I can't say that we're sorry that we achieved the record.

I'm very happy we achieved the record, and I'm not apologizing for it.

I think we...

No.

That's helpful.

I don't want to cut you off, but if -- I was going to also ask, just switching to Macao for a moment, whether your reinvestment there.

Do you think that will lead to maybe greater table allocation in 2018 or 2019, above what you've received already?

Rob (sic) [Robin], we never talk about that because it's beyond our control.

As you know, we rely on the government to make decisions for us and have no comment about table allocations or what we might expect in the future.

Okay.

No.

That's helpful.

And then just last thing really quickly, housekeeping item.

I'm just curious what your convention mix for the full year in Vegas was versus the prior year, if you happen to have that -- your convention mix as a percent of room nights in...

I can't tell you the mix, but I can tell you we had, I think, the best room nights we ever had in terms of convention.

I think we broke 800,000 room nights in Vegas.

We're seeing a bigger opportunity in '18.

I know there's been talk about the Vegas market.

We think it's strong.

We think the convention business looks very strong.

There are some concern about international business because of the October tragedy, but we've experienced a pretty good quarter here, 92% or so.

We feel good about '18.

We feel very good about our convention.

Our MICE demand has accelerated and a bigger part of our mix.

So if you guys have those numbers, you can just -- you have them handy, Patrick?

We have the actual number, the split, 40%.

You want to speak?

Sure.

So...

So we're at-- this is...

(inaudible) about 30%.

30% on the group business for the Q4 against 39% for the FIT.

But I think the real key to our business here is we're always a group house.

We always will be a group house.

We have complete confidence in group market in '18.

Again, we hear some talk of the international business cooling off, but we feel very good about Las Vegas.

The tragedy made for some very difficult moments around here and great concern, but the market has bounced back and appears to be running pretty strong from our perspective.

And Robin, we have the strongest MICE facility in the world.

No Integrated Resort, no hotel has more MICE business than we do.

That arises from my experience and the experience of our staff having been involved in the trade show business as far back as 45 -- give or take, 45 years.

So somebody who just builds a new convention center a few years ago and says in the newspaper, "Oh, we are copying Adelson." You can't get that kind of experience.

When I was in Japan a few months ago, one of the officials from the city of Osaka said, "Oh, I remember you back in the early '80s.

You helped to design Makuhari Messe." Now that's almost 40 years ago.

Makuhari Messe was the biggest exhibition and convention center in all of Japan.

And the governor of -- because I ran COMDEX, the governor of Chiba, which adjacent to Tokyo on the way to Narita airport, saw what I did with the COMDEX.

And he said he sent his entire staff and he came as well to my office in Boston, and we designed that convention center.

So somebody who builds a convention center today isn't going to have the experience and the know-how how to deal with the people.

We earned in our Sands Expo center here in Las Vegas I think more money than any exhibition, it's called convention center, in the United States.

And we've always earned money, right, almost from year 1. So nobody has.

That's why we're in a strong position when it comes to new destinations because there isn't a city in the world that doesn't want MICE space.

They don't want -- that doesn't want MICE business.

We're the experts in MICE business.

We know how to get it.

If we get another location in the Pacific Rim, we'll have several locations surrounding the Pacific that could take shows that move from one city to another every year.

Then we're in a better position to pick those shows up to be in our convention center.

And I think I'm not the only one who feels that way because it's my background, but the people, the elected officials in various prospective new destinations, they also feel that same way.

Your last question comes from Harry Curtis with Nomura Instinet.

Wanted to -- my questions, I had 2 of them that focused on the development of The Londoner.

First of all, Sheldon had talked about an incremental 1.7 million square feet.

I'm assuming they are -- the individual suites comprise a reasonable chunk of that.

Are you developing any other space that doesn't exist today?

No.

We are looking to the government to give us an okay to do that, but I don't want to make any statement vis-à-vis what they've -- how they responded to us.

We're taking -- we're adding in the apartment side of the tower that's close to 1 million square feet of the St.

Regis Tower, where we have about 300 apartments.

And so that's a substantial part of that 1.7 million.

We have warehoused 1 or 2 levels for more MICE space, and that will open up more completed space.

And that will contribute another substantial portion of the 1.7 million.

I can understand, Harry, what you're thinking.

We're not adding on 1.7 million.

We are converting unused space now from unused to used.

So maybe we should have explained that a little better.

Sorry.

To Sheldon's point, St.

Regis is 1 million square feet roughly, and that's a shelled hotel that's not been built out, but it's shelled.

The 300,000 was a retail, additional retail that always shelled but not built out, the same with the MICE, 400,000 more of MICE, shelled not built out.

So it's a mammoth building, big footprint, a lot of which we've never used.

Okay.

And then just the other -- the last question was when you think about re-theming the properties, what are the kind of iconic tourist sites are you planning to put out front to act as a tourist attraction?

The outside will be like the Big Ben and the Parliament building.

We will have the tower bridge represented somewhere.

We will have telephone booths that are all over London, would use them as ATMs.

So we'll have the telephone booths as ATMs or vice versa.

We'll have 2-level buses.

We'll have the bearskin hats aplenty, like the guards at the...

Beefeaters?

The beefeaters at the -- what's the palace?

Buckingham.

Buckingham.

Buckingham Palace.

And maybe we'll even have some horses and buckskin heads riding down the Cotai Strip.

Look, I want to say that people one thing.

People won't talk a lot about it, but we have 13,000 rooms interconnected.

Can you imagine if that was in Las Vegas or any other location?

I created that by creating the Cotai Strip.

And if you could see 13,000 rooms without going outside, you could connect all of the properties together without stepping outside an air-conditioned space.

And there's nowhere like that in the world.

We have a potpourri of different price rooms, different size, sleeping rooms.

And we have large and medium, maybe even small casinos.

So there's a mixture of taste for everybody who wants to have a different experience.

There's no other property in Macao that has done that.

And people say, "Oh, we have a lot of tables." Yes, we have a lot of tables because when I built the properties with so many rooms and a common restaurant and entertainment and the arena and so much to attract so many people.

Whoever gets 400,000 people in 1 day in their properties?

Never.

No category, no group of properties in the world has ever attracted that many people.

So I'm very proud of the fact that we have an interconnected 13,000 rooms that covers from small to medium to large in every aspect, restaurants I never added on the map.

But we probably have 100-or-so places to eat, which is not good for my belt size.

So it's -- we have that large number of tables because we needed them when we built, and so we have them, not that we've got any extra.

Frankly, we got fewer than anybody else or fewer at the same time.

So I'm very proud of where we are in Macao, and I am very excited about the possibility that Macao can grow.

You guys weren't sitting there like I was, standing on the hill, looking at over the swamp and the bay and saying to my wife and a colleague with me, "I'm going to turn this bay and this swamp into Asia's Las Vegas." And everybody laughed and criticized me.

Stanley Ho -- except my wife.

Stanley Ho said he's going to fail.

They'll be in bankruptcy.

He'll never get the first place built.

If he does get it built, he will never get it open.

And I said when we created a confrontation, I said, "Stanley, if it's too hot, get out of the kitchen." So he, I'm sorry to say, is not around as much so he could see that Cotai became equivalent of what I said, the Las Vegas Strip, compared to downtown.

Now this something is a big jolt in the arm that downtown is going to get when the bridge opens.

It is -- it said that it's going to open, operational by the middle of this year because we've been hearing that for a couple of years, but there's a lot of belief that it will open this year.

That could change downtown dramatically.

People have approached us, and they want to buy the Sands Macao.

I don't want to sell it because I think that when the bridge opens, it could be a different property on the upside.

So I'm very optimistic and I'm very, very confident about the growth of Macao.

As I said a couple of times today, it feels like 2014 and earlier.

There are no more questions at this time.

If that's the case, I want to thank everybody for calling in today, and I'll consider this earnings call adjourned.

This concludes today's conference call.

You may now disconnect.