Vitaly Umansky: Thanks, Patrick and Rob. Maybe just a follow-up, switching gears to Macau. And Grant, you talked a little bit about kind of the base mass and the growth you’ve seen in the quarter is very similar to premium. But I think overall, if we kind of think about sands in Macau, obviously, you’re very strong in the direct VIP business, you’re very strong in the premium business, but where you have a massive competitive advantage? In my view, it’s just your scale, which then talks about base mass and the higher margin available from base mass. If you look at the recovery in overall base mass, it has not been as strong as the more premium end of the market. Can you maybe give an explanation as to why you think that is, if you agree with that statement, and then how does the market maybe change, or need to change over the next couple of quarters in order to get some of that base mass back, which I think would benefit Sands relative to others in a much stronger way?
Grant Chum: Yes. Thanks.
Patrick Dumont: Grant, go ahead.
Grant Chum: Yeah. Yeah, sure, Patrick. Yeah, I’ll take it. And I think first point is your — I agree we have a huge advantage with our scale, but I think the scale advantage speaks to all the segments. I think if you looked at historically, how the company has developed absolutely the base mask with our scale, that has been a core advantage. But in the sense of how we described all of these capital investments that we’re making, especially in Londoner, the scale we have on the quality of the premium product is really unprecedented. So I think scale advantage will apply to all segments, in my view. Specifically on base mass, if you look at our actual numbers, the way we break it out between premium mass and base mass through the recovery since the reopening after the COVID restrictions, actually they’re not too dissimilar now in terms of rate of recovery from a volume and revenue perspective.
But it is true that in terms of customer count patron hours, we’re still missing more from the base mass. So really it’s two things it tells you. One is the quality of patronage has risen significantly because the revenue per patron is higher than before COVID. And secondly, there is still room for that base mass revenue and visitation to further recover. And I think there are many reasons and it’s hard to specifically attribute to one or two factors, but I think over time, especially as the economy improves and also so I think people — the distribution of content in terms of the lifestyle, the destination attractions, all of the events, all of the non-gaming products and assets and events that are actually distributed out there, I think you see a progressive improvement in that base mass segment.
And obviously, we will be — obviously, best placed to capture that growth when that comes.
Vitaly Umansky: Thanks, Grant. That’s helpful.
Operator: Thank you. The next question is coming from Chad Beynon from Macquarie. Chad, your line is live.
Chad Beynon: Afternoon. Thanks for taking my question and thanks for posting the slides. On Slide 44, the flags of interest remain the same as what we’ve seen in the past couple of decks, Macau, Singapore, New York, and you’ve talked through all these. There’s been some recent discussions around Thailand and some even think that an integrated resort could open in Thailand, maybe even ahead of Japan. So wondering if you could opine on your views. I know early, but could this market be big enough? Could a resort generate the cash flow meaningful enough for you guys to look at the market? Any views there? Thanks.
Robert Goldstein: Yeah. We absolutely have interest in Thailand. To your point, it could happen quicker than Japan. I think it’s conceivable. It’s early days, though we still have work to do with the numbers and understanding it. It’s a very, very exciting market in a lot of levels, and just the sheer size of population, the accessibility and the willingness of people travel to Thailand, it’s obviously, I think, number one resort destination city in Asia. So, yeah, we’re very interested. But again, it’s early days. I agree with your comments. It could be faster than Japan, which is possible. Certainly, there’s usually a lot of pent-up desire from both business and government to work towards us. So we’re interested, we’re listening. We’re doing the work to find out what makes sense for us there and we’ll keep you posted.
Chad Beynon: Thank you. And then on the P&L statement, investors are increasingly looking at EPS just given what you’re generating and where the stock is trading. I believe there was a tax benefit in Q1. Could you talk to that potential benefit? And then any additional color in terms of will the tax rate start to look similar to what we saw in prior years, given your mix of Singapore and Macau? Thanks.
Patrick Dumont: I’ll answer this in reverse. Yes, it will look more normal. It was a one-time item. It was related to reversal in Macau, $57 million. But the tax rate will look more normal going forward.
Chad Beynon: Thanks, Patrick. Appreciate it, guys.
Patrick Dumont: No problem.
Operator: Thank you. The next question is coming from David Katz from Jefferies. David, your line is live.
David Katz: Hi. Evening. Thanks for taking my questions. When we look at the Macao strategy in view of the renovations that are going on this year, I would think about, you know, reinvestment credit referral programs that people are talking about. What’s your philosophy on those this year? And do you dial them back until next year? Or how should we think about that?
Robert Goldstein: I’m just trying to understand your question. Will we dial back our investment programs because we’re under renovation? Is that your question?
David Katz: That’s right. Level of conservatism versus aggressiveness and sort of how you…
Robert Goldstein: No, no. We’re not going to — we will not dial back. We just may not be as aggressive as some of, you know, the competitive pressures on the commercial front right now, it’s been talked about quite a bit. We’re not believers in that approach. We believe we make our buildings the best in class. We have the scale. We have a lifestyle product. We just believe long-term GGRs will grow. We’ll participate in that. We’ll be very, very here into good margins, and that’s an important part of business. But no, we won’t dial back our current reinvestment strategy. We won’t necessarily dial it up either to compete in the market right now. So this will be a year of reinvestment, as Patrick and Grant alluded to, both the arena and the Londoner. But we’re not going to pull back. If anything, we’ll stay consistent.
David Katz: Perfect. And I wanted to just ask about, you know, one of the slides we show your maturities, you know forthcoming ’25-’26, any sort of updated thoughts about, you know, how or when you’re approaching those. And that’s it for me. Thanks.
Patrick Dumont: Yeah. So, you know, we’re going to look to deal with. So if you go to Page 32, which is the page I think you’re referring to, and you look at the LVS maturities, we should deal with those in short order. That’s kind of our intent. And then in August of ’25, we have the $8 billion that you see at the SEL level, and we’ll address those in due time. We mentioned that we wanted to bring down our total debt level in at SEL given that we borrowed during the pandemic so you’ll see us reduce the quantum of debt there. And then as part of the MDS credit facility, we’ll address that in course along with the IR2 start. So that’s kind of how we’ll deal with our capital structure. You’ll see us turn that out as we’ve done previously.
David Katz: Perfect. Thanks.
Operator: Thank you. Next question will be from Daniel Politzer from Wells Fargo. Daniel, you’re line is live.
Daniel Politzer: Hey, good afternoon. Thanks for taking my question. First one on Macau. This is, I think, the second quarter in a row your mass shares declined a little bit. Obviously, there was a lot of different factors this quarter, but if you could kind of maybe give us a little bit more color. Is this really just disruption, heightened promotional levels? Or is there a difference in the customer that you’re seeing coming into the market, or maybe something else altogether that’s kind of driving the market share shifts we’re seeing on the mass side?
Patrick Dumont: Yeah. I do want to point out before Grant answers this question, that when we have less revenue because of disruption, we’ll have less market share. So I do want to point out that with the arena being out with less revenue and a slightly lower margin because of the impact, having some hotel rooms out, that our market share will be impacted because it’s the same thing. So with that, I’ll just turn it over to Grant.
Grant Chum: Yeah. I think it’s hard to say which factors. I mean, you have a promotion environment out there that people have been talking about and that Rob reference you have, obviously, the disruptions that we’ve encountered because of our own projects. But on the other hand, it’s also just looking at a very short time period here and there. So, yes, our mass revenues were flat for the quarter and the market grew 3%, 4%. But there’s also a lot of factors that could have swung our way during the quarter and we would have been much closer to the market growth rate. So I wouldn’t draw too big a conclusion from that. If you look at historically how we’ve sustained our share of EBITDA in a pre-pandemic, the market shares fluctuate, but we always end up back in that low to mid-30s range in terms of EBITDA share.
And to be fair, let’s look at a longer time frame, let’s look at the scorecard for 2023, we achieved 35% EBITDA share against a GGR share of 26%. We were leaders in GGR, yes, but we were, by a much bigger margin, the leader in EBITDA share as well as non-gaming revenues, where we had 41% of the share of the market. So in aggregate, for the year, if you look at revenue gaming, non-gaming EBITDA, I think our performance has been solid. But quarter to quarter, obviously there will be fluctuations depending on those factors that we just discussed.
Daniel Politzer: Got it. And then just for the follow-up, I think you guys have gone up to 71% share of 1928 HK. I mean, can you talk about maybe where that goes over time? Is there an upper limit there and maybe some of the puts and takes to increasing that ownership stake?
Patrick Dumont: So I think there’s an upper limit of 75% by exchange rules, although they do give waivers based on the size of the equity, depending on the name. For us, I think, as I said before, SEL is investing a lot for the future. It has a bright future ahead of it, and we’d like to own more of it. So you’ll see us be aggressive, and I think where we stand, we see value in the stocks today meaningfully. So that is a repeat of what we said before, but I think you understand our conviction.
Daniel Politzer: Understood. Thank you.
Robert Goldstein: Thanks, Dan.
Operator: Thank you. The next question is coming from Colin Mansfield from CBRE Institutional Research. Colin, your line is live.
Colin Mansfield: Hey, everybody, thanks for taking my call, and congratulations on getting the last rating up to investment grade during the quarter. Maybe following on to David’s question about the refinancing, maybe just an updated thoughts on how you’re thinking about the subordinated term loan down at Sands China. And I know there’s a lot of liquidity up at the parent, but how are you guys thinking about timing of potentially taking that out of the capital structure down there? And then I have one follow-up on ratings.
Patrick Dumont: Sure. I think you’ll see us deal with LBS maturities and the SEL 25s before you see any activity around the LVS [Indiscernible] term loan down to SEL. The one thing I’d like to point out is that it benefits SEL. It’s a very favorable loan and allows them to have high-quality financing deeply subordinated at a favorable rate. So from that standpoint, the maturity is ’28, and we’ll see how it goes with SEL and what their needs are and kind of go from there. But I think we have ample liquidity up at parent co we believe to do what we need.
Colin Mansfield: Great. Thanks, Patrick. And then just one follow-up on ratings. I mean, obviously, the company fully back at investment grade now. And I think with the development pipeline that you guys do have ahead of you, I’d just be curious how you’re thinking about any sort of change to financial policy as it relates to target ratings. I think this is one of the companies that could eventually get to mid-BBB if you guys so desired. So I guess how do you guys balance any sort of desire to have those levels of ratings as it relates to cost of capital relative to obviously, the development pipeline you have ahead of yourself?
Patrick Dumont: Thanks. So I think as we look back pre-pandemic, we spent five years working towards investment grade. We think it’s very important for us to actually be investment grade. It gives us access to the largest most liquid debt market in the world, gives us a very efficient cost of capital, which in the long run provides us flexibility, but really drives returns on new projects. We have this investment rate balance sheet. It helps us in new jurisdictions. You heard Rob talk about several of them. We have the financial capability to execute on these projects. Our financial policy always been that we like gross leverage to be between 2 times and 3 times. You know, we’ve said this for many years. Nothing has really changed.
