Grant Chum: Yeah. Sure, Rob. I think clearly, we will work to minimize the impact on the guest experience and the business operations, but this is something that we have managed many, many times over the years. And indeed, we did that during 2019 when we started the holiday in conversion into The Londoner hotel. I think you’ll see some disruption on the gaming side in the middle of next year. And I think we’ll be managing the Sheraton Tower renovation methodically and judiciously over the entire period over the next 15, 18 months. So as to really continue to enhance the yielding on the customer front, but at the same time, try to get these works done as quickly as possible. I think the intent here is to move forward and complete the renovation and the repositioning of the entire south side of the resort, the Sheraton Towers and Pacifica Gaming as quickly as possible.
The sooner we make the entire resort Londoner, the better it will be for everyone, our guests, our staff, our business and the brand positioning. So the only other point I would make is, we should take note that this part of the property portfolio is the lowest yielding part of the entire Cotai portfolio that we have both on the hotel and the gaming side. So we do hope to be able to successfully manage to minimize the disruption to the business. But when we get to completion on the other side, in the first half of ’25. I think the earnings power through the holistic and expanded experience of the Londoner and Macao will be significantly enhanced. That’s the goal.
Patrick Dumont: Just sort of one thing to think about — yeah, one thing to think about, so we’re very focused on return on invested capital and growth in Macao. And so our anticipation is that the returns on these investments will be commensurate with those that we have previously and will drive meaningful growth. And by the way, the initial market reaction to this product really to what’s been brought online so far really helps us with his view. Given the customer response and the performance of the asset in the long run, we believe that the completed Londoner, when it’s done will be on par with the Venetian. That’s what our target is.
Robert Goldstein: I’d also add the Grant’s comments, Stephen. Just again, the size, the scale of our portfolio gives us flexibility. We have 10,000 other rooms, money gets seems to new customers, too. So I think we minimize the disruption and maximize the opportunity to deploy the rest of our assets to keep our business strong despite that. And to Patrick’s comment, one of those things can be juggernaut, they’ll be neck and neck maybe exceed those two assets that are going to be hugely important in the future. But getting to ‘24, while not easy, I think it’s very manageable to see deploy other assets in the portfolio intelligently.
Stephen Grambling: Thanks. I’ll jump back in the queue.
Robert Goldstein: Okay. Thank you.
Operator: Thank you. The next question is coming from Chad Beynon from Macquarie. Chad, your line is live.
Robert Goldstein: Chad?
Operator: Chad, please check your mute button. Your line is live, if you wish to ask a question. Okay. We can come back to Chad later. The next question is coming from Shaun Kelley from Bank of America. Shaun, your line is live.
Shaun Kelley: Hi. Good afternoon, everybody. I just wanted to go back to the margins in Macao, and maybe that flowed through discussion a little bit more. If we look at it, it does look like flow-through just sequentially was a bit better in the third quarter here than in the second. I was just wondering, if we could get a little color on sort of maybe some of the mix impacts that drove that. Was that normalized staffing? Was it some of the non-gaming amenities, which are now kind of fully back on, which flow through at really good rates, like retail and hotel, was it sort of the base mass mix coming back? Just kind of how do you see it in terms of what maybe some of the factors were that drove that because it does look quite impressive.
Patrick Dumont: Thanks for that, and appreciate the question. I will tell you that there’s a little bit of magic to it. It’s called revenue increase 28.9%. So for us, it really is just more people showing up, spending money at the product, recognizing how great it is and increased demand. I mean it’s a phenomenal product there last week. It really looks for the team, it’s really providing unbelievable customer service and it’s a highlight for Macao. It’s a great asset and will continue to grow. And for us, it was just covering the fixed cost base. We just had to get — and it was not a known product in the market. People are starting to figure it out, and it’s going to keep growing. And so for us, this was really just growth in revenue across all segments, that was really the secret to it.
Shaun Kelley: Great. Thanks, Patrick. And then, as my follow-up, I just want to dig a little deeper into the buyback authorization, obviously, a big kind of strategic change. Could you give us a couple of parameters. I mean pre-COVID, the company was actually pretty high on its sort of overall payout ratio. You obviously have a pretty ambitious capital program across potentially New York, certainly, what you want to do on this — on the big project in Singapore, some renovation activity and some of the CapEx in Macao. So should we think and parameters of a payout ratio and maybe how could we put some numbers around that, if possible? And then also just help us think about medium-term leverage, just given you’re probably the most under levered gaming company I’ve ever covered. So a big complement to where you sit at the moment, but obviously, it presents a lot of potential firepower there.
Patrick Dumont: So really appreciate the commentary of the question. I will tell you, so right now, we’re sitting at about $5.6 billion worth of cash system-wide. Macao is starting to become very cash generative. Singapore is very cash generative. So the way we think about this is due to the timing of our development obligations and those cash flows, we will be able to do all. We’ll be able to invest in our core markets and growth through organic growth and through redevelopment of key assets. We’ll be able to do IR [Technical Difficulty] core. We’ll be able to do our concession commitment to Macao and then we’ll have excess capital and we’ll pursue New York, and we’re going to pursue other growth opportunities in new jurisdictions, and we’ll be able to do it all because of the timing of the cash flow, the cash we have on hand and the cash tentative nature of our assets.
So in terms of the payout ratio, as we addressed earlier in the call, we’re not going to be as heavily weighted towards dividends as we were before. So if you look on Page 30, we sort of included a look on what were our prior return of capital programs looking like for both share repurchase and dividends. And on Page 30, what you’ll see is historically, we were very dividend weighted. And to your point about payout ratio, we don’t typically guide to payout ratio, but the point is well taken, we’re looking really to flip it. So for us, the majority is actually going to end up being share repurchases, because we’re very focused on growth. So we can grow the company’s EPS through share shrink, we’re going to do it. We can grow through capital allocations or high growth projects, we’re going to do it.
It’s really an ROIC, and we’re going to pursue it aggressively. And the good thing is we’ve got cash on the balance sheet. We’ve got cash center of assets and we have a historical program to provide you a good guide that we can launch off of and really hopefully drive real shareholder return in the future. So that’s kind of how we’re thinking about it.
Shaun Kelley: Thank you very much.
Patrick Dumont: Sorry, one thing. Thank you, Dan. You mentioned leverage, and this is a very important thing. So prior to the pandemic, we spent about five years transforming the company to be an investment grade name. We thought this was really important. It gives us access to the largest, most liquid debt market in the world. It gives us a very efficient cost of capital, which in the long run provides flexibility but also drives returns on our new projects. And so having this investment-grade balance sheet also helps us in new jurisdictions because we have the financial capability to execute on projects we propose. So for us, we like being leveraged 2 times to 3 times on a gross basis. We’ve said it before. You’ve heard it from us on prior calls, nothing’s changed.
